exv10w27






Exhibit 10.27




200 & 300 OCEANGATE, LONG BEACH, CALIFORNIA




 





PURCHASE AGREEMENT



BETWEEN



200 OCEANGATE, LLC, A DELAWARE LIMITED LIABILITY COMPANY



AND



MOLINA CENTER LLC, A DELAWARE LIMITED LIABILITY COMPANY



NOVEMBER 30, 2010



 









 





TABLE OF CONTENTS




	 	 	 	 	 

	1. AGREEMENT OF SALE
	 	 	1	 
	 	 	 	 	 
	2. PURCHASE PRICE
	 	 	2	 
	 	 	 	 	 
	3. NON-REFUNDABLE PAYMENT AND DEPOSIT
	 	 	2	 
	 	 	 	 	 
	4. DOCUMENTS TO BE DELIVERED TO BUYER
	 	 	3	 
	 	 	 	 	 
	5. TITLE
	 	 	5	 
	 	 	 	 	 
	6. ACCESS
	 	 	7	 
	 	 	 	 	 
	7. DUE DILIGENCE PERIOD
	 	 	9	 
	 	 	 	 	 
	8. ACCEPTANCE OF PROPERTY “AS IS”
	 	 	9	 
	 	 	 	 	 
	9. CONDITIONS TO CLOSING
	 	 	12	 
	 	 	 	 	 
	10. CLOSING
	 	 	14	 
	 	 	 	 	 
	11. REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	 	 	 	 	 
	12. RISK OF LOSS; INSURANCE PROCEEDS; CONDEMNATION
	 	 	25	 
	 	 	 	 	 
	13. ASSIGNMENT
	 	 	26	 
	 	 	 	 	 
	14. SELLER’S COVENANTS DURING CONTRACT PERIOD
	 	 	26	 
	 	 	 	 	 
	15. ARBITRATION OF DISPUTES
	 	 	28	 
	 	 	 	 	 
	16. INDEMNIFICATION
	 	 	30	 
	 	 	 	 	 
	17. MISCELLANEOUS
	 	 	30	 
	 	 	 	 	 
	18. NOTICE
	 	 	30	 






LIST OF EXHIBITS




	 	 	 

	Exhibit A

	 	Description of the Land
	Exhibit B

	 	Documents Delivered to Buyer
	Exhibit C

	 	Rent Roll
	Exhibit D

	 	Form of Tenant Estoppel Certificate
	Exhibit E

	 	Service Contracts
	Exhibit F

	 	Grant Deed
	Exhibit G

	 	Bill of Sale and General Assignment
	Exhibit H

	 	FIRPTA Affidavit
	Exhibit I

	 	Form of Tenant Notice Letter
	Exhibit J

	 	Form of Owner’s Affidavit
	Exhibit K

	 	Buyer’s Insurance
	Exhibit L

	 	Seller’s Insurance






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PURCHASE AGREEMENT




200 & 300 OCEANGATE, LONG BEACH, CALIFORNIA



     THIS AGREEMENT is entered into as of the 30th day of November, 2010 (“Contract
Date”), by and between 200 OCEANGATE, LLC, a Delaware limited liability company (“Seller”), and
MOLINA CENTER LLC, a Delaware limited liability company (“Buyer”).



RECITALS




     Seller owns and is offering for sale the land and improvements commonly known as 200 & 300
Oceangate, Long Beach, California, and more completely described below. Buyer has offered to buy
the property, and the parties are entering into this Agreement to set forth the terms and
conditions of the sale to Buyer.



     NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, the
parties hereto agree as follows:


1. Agreement of Sale.




     1.1 Seller hereby agrees to sell to Buyer and Buyer hereby agrees to purchase from Seller that
certain real property (the “Land”) with street address of 200 & 300 Oceangate, Long Beach,
California, and more particularly described in attached Exhibit A, together with Seller’s
right, title and interest in the following, which together with the Land, shall be termed the
“Property” herein:



          (a) the approximately 461,263 square foot office project located at 200 & 300 Oceangate, Long
Beach, California and all fixtures and other improvements located upon the Land (collectively, the
“Improvements”);



          (b) all easements, rights of way, privileges, licenses, appurtenances and other rights and
benefits of Seller belonging to or in any way related to the Land, and the Improvements, including
water rights, mineral rights, air rights and development rights, if any (together with the Land and
Improvements, the “Real Property”);



          (c) all fixtures, furnishings, equipment and other tangible personal property owned by Seller
that are used for the operation of the Property and that are located on the Property or that are
used exclusively for the operation of the Property (the “Personal Property”);



          (d) the Leases and Service Contracts (as such terms are hereinafter defined) and all security
deposits held by Seller with respect to the Leases;



          (e) to the extent assignable, all certificate(s) of occupancy, building or equipment permits,
consents, authorizations, variances, waivers, licenses, permits, certificates



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and approvals from any governmental or quasi-governmental authority necessary for the use of
the Land or the Improvements (collectively, the “Approvals”);




          (f) all transferable or assignable warranties (the “Warranties”) relating to the ownership,
development, use and operation of the Land and Improvements;



          (g) to the extent assignable, all of Seller’s interest in all structural, soil, seismic,
geologic, engineering and other reports and studies, all operating manuals for all systems,
equipment and operating components of the Property, all marketing materials that are distributed or
shown to potential tenants in the marketing of the Property for lease, photos and depictions, all
architectural drawings, plans and specifications relating to all or any portion of the Real
Property, and all intellectual property rights to the Property, including, without limitation,
trade names, trademarks, service marks, logos or other source and business identifiers, trademark
registrations and applications for registration used at or relating to the Real Property and any
written agreement granting to Seller any right to use any trademark or trademark registration at or
in connection with the Real Property (the “Intangible Property”).


2. Purchase Price. The purchase price for the Property is Eighty-Three Million Dollars
($83,000,000.00) (“Purchase Price”) and shall be paid in cash by Buyer at the Closing (as defined
in Section 10.1 below).



3. Non-Refundable Payment and Deposit




     3.1 Non-Refundable Payment. On the Contract Date, as consideration for Seller’s
agreement to enter into this Agreement and grant Buyer the right to conduct due diligence and
terminate this Agreement on and subject to the terms of Section 7, and as a condition precedent to
the effectiveness of this Agreement, Buyer shall deliver directly to Seller, by personal check,
cash or wire transfer funds in the amount of One Hundred and No/100ths Dollars ($100)
(the “Non-Refundable Payment”). The Non-Refundable Payment shall be fully earned and retained by
Seller immediately upon receipt and, notwithstanding any provisions of this Agreement to the
contrary, the Non-Refundable Payment shall not be returned to Buyer in any circumstance.



     3.2 Deposit; Liquidated Damages.



          (a) Initial Deposit. Within one (1) business day after the Contract Date, Buyer shall
deposit in an escrow (the “Escrow”) established for the within contemplated transaction with First
American Title Insurance Company, National Commercial Services, 1850 Mt. Diablo Blvd., Suite 300,
Walnut Creek, California, 94596, Attention: Kitty Schlesinger, Order No. NCS-453433-CC (the “Title
Company”), the sum of Five Hundred Thousand Dollars ($500,000) (the “Initial Deposit”), with
instructions to the Title Company to hold the Initial Deposit in the Escrow in an interest-bearing
account, with interest accruing for the benefit of Buyer. In the event the sale of the Property is
consummated, the Initial Deposit and all interest earned thereon shall be applied towards the
Purchase Price. If Buyer elects to terminate this Agreement pursuant to its terms or fails to
notify Seller in writing that the Property is acceptable, as provided in Section 7, prior to the
end of the Due Diligence Period (as defined in Section 7), the Initial Deposit and all interest
thereon shall be returned to Buyer, and the parties shall be



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released from all further obligations and liability under this Agreement, except for those
obligations that survive the termination of this Agreement.




          (b) Additional Deposit. Concurrently with, and subject to, the delivery of the
Approval Notice to Buyer as provided in Section 7, Buyer shall deposit in the Escrow the additional
sum of Two Million and No/100ths Dollars ($2,000,000) (the “Additional Deposit” and together with
the Initial Deposit, the “Deposit”), with instructions to the Title Company to hold such Additional
Deposit in the Escrow, in an interest bearing account, with interest accruing for the benefit of
Buyer. In the event the sale of the Property to Buyer is consummated, the Deposit and all interest
earned thereon shall be applied towards the Purchase Price.



          (c) Non-Refundable Deposit. Upon the delivery by Buyer to Seller of the Approval
Notice, the Deposit shall be non-refundable to Buyer except in the following events, upon the
occurrence of which the Deposit and all interest thereon shall be returned to Buyer: (i) the
Closing fails to occur due to a material default by Seller under this Agreement; (ii) the Closing
fails to occur as a result of a failure of a condition to Closing in favor of Buyer, but only if
such failure occurs other than as a result of a material default by Buyer under this Agreement; or
(iii) the terms of this Agreement expressly provide for the return of the Deposit to Buyer. On the
Closing Date, the Deposit and all interest earned thereon shall be applied to the Purchase Price.



          (d) Liquidated Damages. If this Agreement does not terminate pursuant to Section 7,
but Buyer fails to consummate this transaction on the scheduled Closing Date (as defined in Section
10.1) due to default by Buyer and any such default continues for five (5) business days after
written notice from Seller to Buyer, which written notice shall detail such default, Seller shall
be entitled to the Deposit, and all interest thereon, as liquidated damages. The parties have
acknowledged and agreed that Seller’s damages, in the event of a default by Buyer, would be
extremely difficult or impracticable to determine. Therefore, by placing their initials below, the
parties acknowledge that the Deposit, and all interest thereon, has been agreed upon, after
negotiation, as the parties’ reasonable estimate of Seller’s damages. Notwithstanding the
foregoing, in no event shall Seller’s ability to recover from Buyer any loss, cost, damage or
expense pursuant to any indemnification or other provision of this Agreement that survives the
Closing be deemed limited in any respect by this provision or by Seller’s receipt of the Deposit.
The parties agree that the Deposit is not intended as a forfeiture or penalty within the meaning of
California Civil Code Sections 3275 or 3369 but shall be treated as liquidated damages pursuant to
California Civil Code Sections 1671, 1676 and 1677.



	 	 	 

	 

	 	 
	Seller

	 	Buyer





This Section 3.2 is not intended to limit Seller’s remedies under Sections 6, 18.6 or 18.7.



4. Documents to be Delivered to Buyer.







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     4.1 Due Diligence Deliveries. Seller has provided Buyer with, and Buyer acknowledges
receipt of, copies of the materials and documents identified in Exhibit B attached hereto.



     4.2 Title Report. Seller has also provided to Buyer, and Buyer acknowledges receipt
of that certain preliminary title report for the Property prepared under Order No. NCS-453433-CC,
together with a copy of each document referred to therein (collectively, the “Preliminary Title
Report”).



     4.3 Property Documents. Buyer shall have the right, at Buyer’s sole cost and expense
and with at least one (1) business day prior notice, to review Seller’s real property transaction
files (excluding any privileged or confidential information and excluding any valuation and
appraisal information), lease files, plans and specification files, and other files relating to the
Property and its ownership, operation, management and maintenance during regular business hours,
which files are located in the management office at the Property.



     4.4 Leases. Seller shall deliver to Buyer copies of the existing leases, license
agreements and rental agreements covering any portion of the Property, any guarantees thereof, and
all amendments, modifications and supplements thereto as listed on Exhibit C hereto (each a
“Lease” and collectively, the “Leases”).



     4.5 Tenant Estoppels.



          (a) Seller shall deliver to Buyer an estoppel certificate (a “Tenant Estoppel”), in the form
of attached Exhibit D or, if the applicable Lease provides for a different form of estoppel
in the form specified in the applicable Lease, dated no earlier than thirty (30) days prior to
Closing, from as many of the tenants of the Property (the “Tenants”) from whom Seller is able to
obtain such Tenant Estoppels through the exercise of Seller’s diligent, good faith efforts. Seller
shall, at least ten (10) days prior to the expiration of the Due Diligence Period and prior to
delivery to the Tenants for execution, deliver completed forms of Tenant Estoppels to Buyer for
Buyer’s review and approval, provided that Seller shall not be obligated to deliver the form of
Tenant Estoppel for any of the following Tenants (collectively, the “Government Tenants”): (A) the
State of California acting by and through the Director of the Department of General Services; and
(B) the United States of America, Department of Veterans Affairs. Buyer may disapprove a Tenant
Estoppel only if (i) it is not in the form of Exhibit D or, if the applicable Lease
provides for a different form or content of estoppel in the form or content specified in the
applicable Lease, the form or content provided by the applicable Lease, or (ii) if the information
set forth in the Tenant Estoppel is not consistent with the terms set forth in the applicable
Lease. If Buyer has not responded as to such approval within three (3) business days of receipt of
a Tenant Estoppel, Buyer shall be deemed to have approved the Tenant Estoppel in question for
delivery to Tenant. Seller shall deliver completed Tenant Estoppels to Buyer as they are received
by Seller. Notwithstanding the foregoing, Seller shall not be obligated to prepare or seek Tenant
Estoppels with respect to the following Leases, as amended and assigned to date: (1) License
Agreement, dated November 30, 2000, by and between Pacific Towers Associates and Captivate Network,
Inc.; (2) Antenna Site License Agreement, dated as of November 30, 2006, by and between Seller and
Direct America Satellite Services; (3) Telecommunications



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License Agreement, dated July 13, 2005, by and between Seller and Rocket Internetworking,
Inc.; (4) Telecommunications Access and License Agreement, dated December 21, 2009, by and between
Seller and TCG Los Angeles, Inc.; (5) License Agreement, dated December 21, 2000, by and between XO
Communications, Inc., and Pacific Towers Associates; and (6) UPS Drop Box Agreement, dated February
2, 2010, by and between United Parcel Service, Inc., and Seller.




          (b) Estoppel Thresholds. Buyer shall have a right to terminate this Agreement upon
written notice prior to the Closing Date and receive a refund of the Deposit and all interest
thereon as its sole remedy if Seller fails to deliver to Buyer at least three (3) days prior to the
Closing Date, Tenant Estoppels from (i) the State of California acting by and through the Director
of the Department of General Services, which is the contracting party under five (5) separate
Leases – State Lands Commission (two Leases), California Coastal Commission, and Department of
Industrial Relations (two Leases), confirming that such Leases are in effect, that the Tenant has
no default claims against Seller, that the term of the Lease is consistent with the term reflected
in the Lease, and that the base monthly rent payable is consistent with the base monthly rent shown
in the Lease, (ii) the United States of America, Department of Veterans Affairs confirming that the
Lease is in full force and effect, the date to which the rent and other charges have been paid in
advance, if any; and whether any notice of default has been issued, (iii) each of (1) AECOM
Technology Corp., (2) Pacific Maritime Association, (3) Long Beach Publishing Company, Inc., and
Medianews Group, Inc., and (4) J. Perez Associates, Inc. (collectively, the “Major Non-Government
Tenants in Occupancy”) in the form approved or deemed approved by Buyer pursuant to Section 4.5(a)
above, and (iv) an estoppel from Crowell Weedon & Co. certifying that its Lease has not been
modified or amended in writing or orally or by course of conduct, and contains the entire
understanding and agreement with Seller concerning the premises under the Lease. Buyer
acknowledges and agrees that if the Major Non-Government Tenants in Occupancy delete or modify one
or both of sections 20 and 21 of the form Tenant Estoppel attached as Exhibit D, such deletion(s)
or modification(s) shall not constitute a change in the form approved or deemed approved by Buyer.
As used in this Agreement, the term “Major Non-Government Tenants” shall mean the Major
Non-Governmental Tenants in Occupancy and Crowelll Weedon & Co.



     4.6 Service Contracts. Seller has delivered to Buyer, and Buyer acknowledges receipt
of, copies of the service, maintenance, management and other contracts and agreements related to
the operation and management of the Property, excluding the property management agreement which
will not be assigned at Closing, all of which are listed on the attached Exhibit E (the
“Service Contracts”). If Buyer delivers the Approval Notice, Buyer shall be deemed to have agreed
to assume at Closing all of the Service Contracts.



     4.7 Survey. Seller shall deliver a copy of Seller’s existing survey to Buyer (the
“Survey”). Buyer may, at its sole cost and expense, cause the Survey to be updated and recertified
as deemed necessary and appropriate by Buyer.


5. Title.




     5.1 Title Commitment. Buyer shall be responsible for obtaining, no later than the end
of the Due Diligence Period, a commitment from the Title Company to issue at Closing a policy



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of title insurance in a form acceptable to Buyer, which is not conditioned on the performance
by any party or third party of any actions other than the express obligations of the parties under
this Agreement (the “Commitment”). Seller will provide, at Closing, an affidavit to the Title
Company in the form attached hereto as Exhibit J. Buyer shall deliver the Commitment to
Seller together with a letter from Buyer to Seller stating that the exceptions to title reflected
in the Commitment are approved by Buyer. If Buyer does not provide Seller with the Commitment and
such letter prior to the expiration of the Due Diligence Period, the title reflected in the
Preliminary Title Report (or any updated title report) shall be deemed unacceptable and
disapproved, this Agreement shall terminate and the Deposit, together with all interest thereon,
shall be returned to Buyer. Seller shall have no duty to cure, and Buyer shall not be entitled to
any offset or credit against the Purchase Price due to, any defect in the title to the Property or
any condition or aspect of the Property, to which Buyer may object, except as may be agreed by
Seller in writing, in its sole and absolute discretion; provided, however, that Seller shall
remove, bond over, or obtain a title endorsement for any liens (“Seller Liens”) that affect the
Property and that are not liens for taxes or assessments accruing on or after the Closing and that
are not created by, or the result of actions of, Buyer, Molina or any of their respective
affiliates, agents, employees or contractors. Any cure that Seller has so agreed to perform or is
obligated to perform shall become a condition precedent to Closing in favor of Buyer and shall be
cured by the Closing Date. For purposes of this Section 5.1, a “cure” of a title exception means
the elimination of such exception from title and shall not include the bonding of, or endorsement
over unless such bonding is in an amount and on terms required by the Title Company for elimination
of such exception from the Title Policy (as defined in Section 5.3) as reasonably determined by
Buyer. If such cure is not accomplished by the Closing Date, Buyer, as its sole and exclusive
remedy, may either terminate this Agreement, in which case the Deposit shall be returned to Buyer,
or waive such objection and complete the Closing subject to such exception, provided that if Seller
refuses to remove a Seller Lien at Closing, Buyer shall have the right to instruct the Title
Company, as escrow agent, to apply a portion of the Purchase Price sufficient to discharge such
Seller Lien at Closing.




     5.2 Permitted Exceptions. The following shall constitute the “Permitted Exceptions”:
(a) the Title Company’s standard exceptions; (b) all exceptions that are shown on the Commitment;
(c) all of the Leases; and (d) all exceptions that arise after the expiration of the Due Diligence
Period and prior to the Closing that are not Seller Liens and that are approved by Buyer, in
writing, in its sole and absolute discretion, or are caused by Buyer or Molina, their agents,
employees, contractors or representatives or result from any new survey of the Real Property or any
update of any existing survey.



     5.3 Title Policy. Evidence of title shall be the issuance by the Title Company at
Closing of a policy of title insurance in the form of the Commitment, subject only to the Permitted
Exceptions (“Title Policy”). Seller shall be responsible for the cost of a CLTA standard coverage
policy of title insurance in the amount of the Purchase Price; Buyer shall be responsible for the
incremental cost of an ALTA extended coverage policy of title insurance, the cost of any
endorsements to the Title Policy and for providing any necessary surveys (other than the Survey) to
the Title Company.



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     5.4 No Recording. Neither this Agreement nor any memorandum of this Agreement shall
be recorded by, or on behalf of, Buyer in the Official Records of the County of Los Angeles. If
Buyer violates the terms of this Section 5.4 by recording or attempting to record this Agreement or
a memorandum thereof, such act shall not operate to bind or cloud the title to the Property, shall
constitute a material breach and default by Buyer under this Agreement, and shall entitle Seller to
terminate this Agreement by written notice to Buyer, which termination notice may be recorded
against the Property.


6. Access.




     6.1 Provided that Buyer has complied with the insurance requirements in Section 6.3 and gives
Seller at least one (1) business day’s prior notice (oral or written), Seller shall allow Buyer and
authorized representatives of Buyer reasonable access, at reasonable times, to the Property for the
purposes of satisfying Buyer with respect to the Property. In performing its examinations and
inspections of the Property, Buyer shall use reasonable efforts to minimize any interference with
Seller’s and the Tenants’ use and occupancy of the Property. Seller shall have the right at all
times to have a representative of Seller accompany any of Buyer or Buyer’s employees, agents,
contractors, consultants, officers, directors, representatives, managers or members (collectively,
“Buyer’s Agents”) while such persons are on the Property. Buyer may conduct interviews with the
Tenants, provided Buyer has given Seller no less than two (2) business days notice prior to any
such interview, and provided further that Seller shall have the right to be present at all such
interviews. Buyer’s breach of this Section 6.1 (and all subsections) shall constitute a material
breach and default by Buyer of this Agreement. All investigations and inspections shall be
performed in compliance with this Section 6 and all local, state and federal laws, rules and
regulations, including, without limitation, any and all permits required thereunder, which permits
shall be obtained by and at the sole cost of Buyer.



          (a) Buyer shall not conduct or allow any physically intrusive or destructive testing of, on or
under the Property, without Seller’s prior written consent, which consent may be withheld at
Seller’s sole and absolute discretion; provided, however, Buyer may, subject to its damage and
repair obligations in this Section 6.1 and 6.2, inspect the Property for asbestos-related
materials. Buyer shall provide Seller with two (2) days written notice prior to the commencement
of any physically intrusive or destructive testing, accompanied by a detailed work plan describing
the nature, scope, location and purpose of the proposed work. Buyer acknowledges and agrees that
Seller’s review of Buyer’s work plan is solely for the purpose of protecting Seller’s interests,
and shall not be deemed to create any liability of any kind on the part of Seller in connection
with such review that, for example, the work plan is adequate or appropriate for any purpose or
complies with applicable legal requirements. All work and investigations shall be performed in
compliance with all local, state and federal laws, rules and regulations, including, without
limitation, any and all permits required thereunder, all of which shall be at the sole cost and
expense of Buyer.



          (b) During the performance of Buyer’s investigations, Buyer shall promptly remove and properly
dispose of all samples, substances and materials extracted from or generated by Buyer at the
Property and, upon the completion of its investigations, shall return the Property to its original
condition, including the removal of all equipment and materials used or



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generated during its investigations. Buyer shall name itself as the generator on any waste
manifests required to dispose of said materials and shall obtain its own waste generator
identification number with respect thereto. If Buyer fails to perform or cause such restoration,
and such failure shall continue for two (2) days after Buyer receives written notice from Seller
demanding the cure thereof, Seller may perform or cause to be performed such restoration work, and
Buyer shall reimburse Seller for all the costs and expenses thereof within two (2) days after
receipt of bills therefor from Seller.




     6.2 Notwithstanding anything in this Agreement to the contrary, any entry upon, inspection, or
investigation of the Property by Buyer or Buyer’s Agents shall be performed at the sole risk and
expense of Buyer, and Buyer shall be solely and absolutely responsible for the acts or omissions of
any of Buyer’s Agents. Furthermore, Buyer shall protect, indemnify, defend and hold Seller, and
its successors, assigns, and affiliates harmless from and against any and all losses, damages
(whether general, punitive or otherwise), liabilities, claims, causes of action, judgments, costs
and legal or other expenses (including, but not limited to, attorneys’ fees and costs)
(collectively, “Access Claims”) suffered or incurred by any or all of such indemnified parties to
the extent resulting from any act or omission of Buyer or Buyer’s Agents in connection with: (i)
Buyer’s inspection or investigations of the Property; (ii) Buyer’s entry upon the Property; (iii)
any activities, studies or investigations conducted at, to, or on the Property by Buyer or Buyer’s
Agents; or (iv) the presence by Buyer or Buyer’s Agents at or on the Property. If at any time
prior to Closing, Buyer or Buyer’s Agents cause any damage to the Property, Buyer shall, at its
sole expense, immediately restore the Property to the same condition as existed immediately prior
to the occurrence of such damage as determined by Seller in Seller’s reasonable discretion.
Buyer’s obligations under this Section 6.2 shall survive the termination of this Agreement or the
Closing, as the case may be, notwithstanding any other provisions herein to the contrary, and shall
not be limited by the terms of Section 3. Buyer shall, at all times, keep the Property free and
clear of any mechanics’, materialmen’s or design professional’s claims or liens arising out of or
relating to its investigations of the Property. The foregoing provisions of this Section 6.2 shall
not apply to, and Buyer shall have no liability for, or obligation to protect, indemnify, defend or
hold Seller (or any other person or party) harmless from or against any of the following: (i) the
discovery by Buyer or any of Buyer’s Agents of any Hazardous Material on, under or affecting the
Property, except to the extent that Buyer and Buyer’s Agents exacerbate such condition in any
material respect; (ii) the discovery by Buyer or Buyer’s Agents of adverse physical, environmental,
economic, neighborhood or other conditions at, on, in, under, around or affecting the Property,
except to the extent that Buyer and Buyer’s Agents exacerbate such condition in any material
respect; or (iii) events, occurrences or conditions resulting from the acts or omissions of Seller
or Seller’s agents or representatives, except to the extent Buyer and Buyer’s Agents exacerbate
such events, occurrences or condition in any material respect. Notwithstanding anything in this
Section 6.2 to the contrary, Buyer shall have no duty or obligation to identify or repair any
condition in, on or affecting the Property that Buyer or Buyer’s Agents discover or of which they
are aware that may or could be unsafe or dangerous unless and to the extent such unsafe or
dangerous condition was caused by the Buyer or Buyer’s Agents.



     6.3 Buyer shall maintain in full force and effect during the term of this Agreement, the
public liability insurance covering Buyer and its activities at the Property on the terms and



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with the coverages described in the ACORD Certificate of Liability Insurance attached hereto
as Exhibit K, naming Seller as an additional insured under all such liability insurance.



7. Due Diligence Period. Buyer shall have until December 30, 2010, (“Due Diligence
Period”) to inspect and investigate the Property, including roof, plumbing, soils, electrical,
sprinkler, water, sewer, mechanical, engineering, heating, ventilation and air conditioning and
life safety systems, structural integrity of the Improvements, measurement of the square footage of
the Land and Improvements, legal status and requirements pertaining to the Property (including
applicable building codes, zoning, environmental, public health and fire safety laws), hazardous
substance inspections including preparation of an environmental assessment, suitability of the
Property for Buyer’s purposes and all other matters of significance to Buyer. Buyer agrees to keep
the results of such testing and inspections confidential, except to the extent that disclosure is
required by law (in which case Buyer will notify Seller in writing prior to making any such
disclosure). Buyer shall order and pay for all costs and expenses with respect to such inspections
and investigations. If, in Buyer’s sole and absolute discretion, Buyer desires to proceed with its
acquisition of the Property, Buyer shall deliver written notice to Seller (the “Approval Notice”),
prior to the expiration of the Due Diligence Period, stating that it approves the Property, in
which case the parties shall proceed to complete the Closing (subject to the terms and conditions
of this Agreement). If Buyer fails to deliver the Approval Notice prior to the expiration of the
Due Diligence Period or if such Approval Notice seeks to modify any of the terms or provisions of
this Agreement, Buyer will be deemed to have disapproved the Property and to have exercised its
right to terminate this Agreement pursuant to this Section 7, in which case this Agreement shall
automatically terminate as of the expiration of the Due Diligence Period and the Initial Deposit,
together with all interest earned thereon, shall be returned to Buyer. Further, if Buyer fails to
deposit the full Additional Deposit in Escrow prior to the expiration of the Due Diligence Period,
regardless of whether Buyer has delivered the Approval Notice, Buyer will be deemed to have
disapproved the Property and to have exercised its right to terminate this Agreement pursuant to
this Section 7, in which case this Agreement shall automatically terminate as of the expiration of
the Due Diligence Period and the Initial Deposit, together with all interest earned thereon, shall
be returned to Buyer. Notwithstanding anything in this Agreement to the contrary, Buyer may elect,
at any time prior to the expiration of the Due Diligence Period, for any reason or no reason, to
terminate this Agreement, upon which termination the Deposit and all interest earned thereon shall
be refunded to Buyer and the parties shall have no further obligation to each other excepts for
those obligations which expressly survive such termination.



8. Acceptance of Property “As Is”. ACKNOWLEDGING BUYER’S OPPORTUNITY TO INSPECT AND
INVESTIGATE THE PROPERTY AS PROVIDED IN THIS AGREEMENT, BUYER AGREES TO TAKE THE PROPERTY “AS IS”
WITH ALL FAULTS AND CONDITIONS THEREON, SUBJECT ONLY TO THE EXPRESS REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER SET FORTH IN THIS AGREEMENT OR THE OTHER AGREEMENTS ENTERED INTO BETWEEN BUYER
AND SELLER AS OF THE CLOSING DATE. ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS
(“DISCLOSURES”) PROVIDED OR MADE TO BUYER OR ITS CONSTITUENTS BY SELLER, ITS AGENTS,
REPRESENTATIVES OR EMPLOYEES CONCERNING THE PROPERTY SHALL NOT CONSTITUTE REPRESENTATIONS OR






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WARRANTIES. BUYER SHALL NOT RELY ON SUCH DISCLOSURES BUT, RATHER, BUYER SHALL RELY SOLELY ON ITS
OWN INSPECTION OF THE PROPERTY AND THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
IN THIS AGREEMENT. ACCORDINGLY, BUYER’S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE PROVISIONS
OF SECTION 7 (DUE DILIGENCE PERIOD) ABOVE, SHALL CONSTITUTE BUYER’S ACKNOWLEDGMENT AND AGREEMENT TO
THE FOLLOWING: (i) BUYER HAS REVIEWED, EVALUATED AND VERIFIED THE DISCLOSURES AND DOCUMENTS AND
HAS CONDUCTED ALL INSPECTIONS, INVESTIGATIONS, TESTS, ANALYSES, APPRAISALS AND EVALUATIONS OF THE
PROPERTY (INCLUDING FOR TOXIC OR HAZARDOUS MATERIALS, SUBSTANCES OR WASTES (DEFINED AND REGULATED
AS SUCH PURSUANT TO SECTIONS 25316 AND 25501 OF THE CALIFORNIA HEALTH & SAFETY CODE, THE RESOURCE
CONSERVATION AND RECOVERY ACT, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY
ACT OF 1980, AS AMENDED (“CERCLA”) OR ANY SIMILAR LAWS AND ALL REGULATIONS PROMULGATED THEREUNDER))
AS BUYER CONSIDERS NECESSARY OR APPROPRIATE TO SATISFY ITSELF FULLY WITH RESPECT TO THE CONDITION
AND ACCEPTABILITY OF THE PROPERTY (ALL OF SUCH INSPECTIONS, INVESTIGATIONS AND REPORTS BEING HEREIN
COLLECTIVELY CALLED THE “INVESTIGATIONS”); (ii) SELLER HAS PERMITTED BUYER ACCESS TO THE PROPERTY
AND HAS DELIVERED TO, OR MADE AVAILABLE TO, BUYER ALL OF THE MATERIALS REFERENCED IN SECTION 4
(INCLUDING THE DOCUMENTS AND MATERIALS IDENTIFIED ON EXHIBIT B) (COLLECTIVELY, THE
“DOCUMENTS”); AND (iii) BUYER HAS COMPLETED ITS DUE DILIGENCE WITH RESPECT TO THE PROPERTY AND THE
DOCUMENTS TO ITS SATISFACTION, IS THOROUGHLY FAMILIAR WITH THE PHYSICAL CONDITION OF THE PROPERTY,
AND SUBJECT ONLY TO THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER IN THIS
AGREEMENT OR THE OTHER AGREEMENTS ENTERED INTO BETWEEN BUYER AND SELLER AS OF THE CLOSING DATE, IS
ACQUIRING THE PROPERTY BASED EXCLUSIVELY UPON ITS OWN INVESTIGATIONS AND INSPECTIONS OF THE
PROPERTY AND THE DOCUMENTS.




          FURTHER, BUYER’S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE PROVISIONS OF SECTION 7 (DUE
DILIGENCE PERIOD) ABOVE, SHALL CONSTITUTE BUYER’S ACKNOWLEDGMENT AND AGREEMENT TO THE PROVISIONS OF
THIS SECTION 8 AND THAT, REGARDLESS OF THE CONTENT OF ANY OF THE DOCUMENTS OR ANY STATEMENTS THAT
SELLER, ITS AGENTS, EMPLOYEES, OFFICERS, CONTRACTORS, PARTNERS OR MEMBERS MAY HAVE MADE TO BUYER,
ITS AGENTS, EMPLOYEES, OFFICERS, CONTRACTORS, PARTNERS OR MEMBERS PRIOR TO OR DURING THE DUE
DILIGENCE PERIOD, OTHER THAN THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER IN
THIS AGREEMENT AND THE OTHER AGREEMENTS ENTERED INTO BY AND BETWEEN BUYER AND SELLER AS OF THE
CLOSING DATE, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,



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CONCERNING OR WITH RESPECT TO: (1) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (2) THE INCOME TO BE DERIVED FROM THE
PROPERTY; (3) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY
CONDUCT THEREON; (4) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (5) THE HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; OR (6) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY. BUYER SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR
WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., OR ANY
HAZARDOUS SUBSTANCE, AS DEFINED BY CERCLA AND REGULATIONS PROMULGATED THEREUNDER.




          EXCEPT WITH RESPECT TO HAZARDOUS MATERIALS THAT WERE DISCHARGED, RELEASED OR DISPOSED BY
SELLER OR ITS MEMBERS, MANAGERS, PARTNERS, DIRECTORS, OFFICERS, SHAREHOLDERS, TRUSTEES,
BENEFICIARIES, AGENTS, EMPLOYEES AND REPRESENTATIVES IN VIOLATION OF APPLICABLE ENVIRONMENTAL LAWS
AS OF THE DATE OF SUCH DISCHARGE, DISPOSAL OR RELEASE, BUYER, ITS SUCCESSORS AND ASSIGNS, HEREBY
WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION OR CLAIM FOR
CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER (COLLECTIVELY OR INDIVIDUALLY) OR ITS RELATED
ENTITIES, AND ITS AND THEIR MEMBERS, MANAGERS, PARTNERS, DIRECTORS, OFFICERS, SHAREHOLDERS,
TRUSTEES, BENEFICIARIES, AGENTS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS
(COLLECTIVELY, “SELLER AND ITS AFFILIATES”) BASED ON, (x) ANY FEDERAL, STATE, OR LOCAL
ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT, OR
ANY SIMILAR LAW NOW EXISTING OR HEREAFTER ENACTED; (y) ANY DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE
OF ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON, AT, TO, OR FROM THE PROPERTY; OR (z) ANY
CONDITIONS WHATSOEVER ON, IN, UNDER, OR IN THE VICINITY OF THE PROPERTY. EXCEPT WITH RESPECT TO
ANY CLAIMS ARISING OUT OF ANY BREACH OF COVENANTS, REPRESENTATIONS OR WARRANTIES EXPRESSLY SET
FORTH IN THIS AGREEMENT OR THE DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT, BUYER, ON
BEHALF OF ITSELF AND ITS PARTNERS, MEMBERS, MANAGERS, DIRECTORS, OFFICERS, SHAREHOLDERS, TRUSTEES,
BENEFICIARIES, AGENTS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS HEREBY RELEASES,
SELLER AND ITS AFFILIATES, FROM ANY AND ALL CLAIMS OF ANY KIND WHATSOEVER, KNOWN OR UNKNOWN, WITH
RESPECT TO ANY ASPECT OF THE PROPERTY, INCLUDING THE FOREGOING MATTERS, AND SPECIFICALLY WAIVES
WITH RESPECT TO ALL SUCH MATTERS THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, AND ANY
COMPARABLE LAW APPLICABLE IN THE STATE WHERE THE PROPERTY IS LOCATED, REGARDING THE MATTERS COVERED
BY A GENERAL RELEASE, WHICH PROVIDES AS FOLLOWS:



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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”


BUYER AND SELLER REPRESENT AND ACKNOWLEDGE THAT THIS SECTION 8 WAS EXPLICITLY NEGOTIATED AND
BARGAINED FOR AS A MATERIAL PART OF BUYER’S CONSIDERATION BEING PAID. Terms appearing in this
Section 8 in all capital letters that have been defined elsewhere in this Agreement shall have the
meanings set forth in such definitions.



9. Conditions to Closing.




     9.1 Buyer’s Conditions to Closing. Buyer’s obligation to purchase the Property is
conditioned upon the satisfaction of each of the following conditions each of which is for the
exclusive benefit of Buyer. Buyer may, at any time or times before the Closing, waive one or more
of the following conditions, but only in writing and any such waiver will not affect its rights and
remedies with respect to the remaining conditions:



          (a) Buyer shall have received the requisite Tenant Estoppels as and when required under
Section 4.5(b). If Buyer has not received the requisite Tenant Estoppels at least six (6) business
days prior to the Closing Date, Buyer shall have the one-time right to extend the Closing Date by
an additional two (2) business days by delivering written notice of Buyer’s exercise of such right
to Seller no later than the date five (5) business days prior to the Closing Date. If Buyer timely
exercises such right, the Closing Date shall be extended by two (2) business days.



          (b) The Rent Roll and Delinquency Report (as defined in Sections 11.1(h) and 11.1(i) below)
shall have been updated to a date not earlier than three (3) business days prior to the Closing
Date, and such updated Rent Roll and Delinquency Report shall not identify any material adverse
change (with a change being deemed to be material and adverse only if the change would expose Buyer
to damages or a loss of income in excess of Thirty-Five Thousand and No/100ths Dollars ($35,000))
in the aggregate as to all Leases with the Government Tenants and Major Non-Governmental Tenants as
compared to the status of such Leases as shown on the Rent Roll and Delinquency Report delivered to
Buyer two (2) business days prior to the expiration of the Due Diligence Period pursuant to
Sections 11.1(h) and 11.1(i) below;



          (c) No Government Tenant or Major Non-Government Tenant shall have notified Seller or Buyer of
any material adverse change in its Tenant Estoppel (with a change being deemed to be material and
adverse only if the change would expose Buyer to damages or a loss of income in excess of
Thirty-Five Thousand and No/100ths Dollars ($35,000) in the aggregate as to all such Tenant
Estoppels); no proceedings under any federal or state bankruptcy or insolvency laws have been
commenced by or against any of the Major Non-Government Tenants that have not been terminated; no
general assignment for the benefit of creditors has



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been made by any of the Major Non-Government Tenants; and no trustee or receiver of any of the
Major Non-Government Tenants’ property has been appointed;




          (d) Seller’s performance of all its obligations hereunder;



          (e) The truth, completeness and accuracy, in all material respects, of each representation and
warranty made by Seller as of the Contract Date and the Closing; and



          (f) The issuance at Closing of the Title Policy.



          (g) Delivery of the fully executed amendments (the “State Lease Amendments”) to each of the
Leases with the State of California, acting by and through the Director of the Department of
General Services, extending the term of such Leases, with such extension term commencing on the
date the amendments are executed, for an additional eight (8) years (Buyer acknowledging that after
the 53rd month of such extension term the State will have an ongoing termination right
exercisable with thirty (30) days notice).



     9.2 Seller’s Conditions. Seller’s obligation to sell the Property is conditioned upon
the satisfaction of each of the following conditions, each of which is for the exclusive benefit of
Seller. Seller may, at any time before the Closing, waive one or more of the following conditions,
but only in writing and any such waiver will not affect its rights and remedies with respect to the
remaining conditions:



          (a) The performance by Buyer of all its obligations hereunder; and



          (b) The truth, completeness and accuracy, in all material respects, of each representation and
warranty made by Buyer as of the Contract Date and the Closing.



     9.3 Seller Default. If, at the Closing, (i) Seller is in default of any of its
obligations hereunder, or (ii) any of Seller’s representations or warranties set forth in Section
11.1 are untrue, inaccurate or incorrect when given, in any material respect, or (iii) the Closing
otherwise fails to occur by reason of Seller’s failure or refusal to perform its obligations
hereunder in a prompt and timely manner, and any such circumstance described in any of clauses (i),
(ii) or (iii) continues for five (5) business days after written notice from Buyer to Seller, which
written notice shall detail such default, untruth or failure, as applicable, then Buyer shall have
the right, to elect, as its sole and exclusive remedy, to (a) terminate this Agreement by written
notice to Seller, promptly after which (A) the Deposit and all interest earned thereon shall be
returned to Buyer, and (B) Seller shall pay to Buyer any title, escrow, legal and inspection fees
incurred by Buyer and any other expenses incurred by Buyer in connection with its review of the
Property, and the negotiation, documentation and performance of this Agreement (including, without
limitation, the fees and expenses of environmental and engineering consultants, legal and
accounting fees and expenses, and other out-of-pocket third party charges related to the
transactions contemplated by this Agreement and their consummation), subject to a cap of $125,000
(collectively, “Buyer’s Costs”), in which case, the parties shall have no further rights or
obligations hereunder except for obligations which expressly survive the termination of this
Agreement, or (b) waive the condition and proceed to Closing, or (c) seek specific performance



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of this Agreement by Seller. As a condition precedent to Buyer exercising any right it may
have to bring an action for specific performance hereunder, Buyer must commence such an action
within ninety (90) days after the occurrence of Seller’s default. Buyer agrees that its failure to
timely commence such an action for specific performance within such ninety (90) day period shall be
deemed a waiver by it of its right to commence an action for specific performance as well as a
waiver by it of any right it may have to file or record a notice of lis pendens or notice of
pendency of action or similar notice against any portion of the Property. Notwithstanding the
foregoing, if by Seller’s affirmative acts the remedy of specific performance has been rendered
unavailable to Buyer, Buyer shall have and may assert against Seller as a result of Seller’s
default under this Agreement, any and all rights available at law and in equity, without imposition
of the limitations in this Agreement on Buyer’s rights, remedies or damages.



10. Closing.




     10.1 Closing Date. The consummation of the purchase and sale of the Property (the
“Closing”) shall be held at the offices of the Title Company (or at such other location as the
parties may agree) on January 19, 2011 (the “Closing Date”). Buyer acknowledges that Seller is
required to defease the existing securitized loan that is currently secured by a deed of trust on
the Property (the “Existing Loan”) in order to deliver title to the Property free and clear of the
lien of such deed of trust (the “Existing Deed of Trust”). In connection with such defeasance,
Buyer agrees to cooperate in good faith with all usual and customary requirements imposed by the
master loan servicer, bond trustee and ratings agency for such defeasance transaction so long as
Buyer is not required to incur any additional liability or expense in so doing. The parties
acknowledge that, in light of the defeasance, the Grant Deed (as defined below) will be recorded,
and the Seller’s proceeds will be disbursed, one day after the Closing Date. Seller may extend the
Closing Date by up to three (3) business days to accommodate such defeasance. Seller shall be
solely responsible for any and all costs, fees and expenses in connection with such defeasance, and
any yield maintenance or other premiums or payments required in connection with such defeasance.
The defeasance of the Existing Loan shall not be a condition to Seller’s obligation to close the
Escrow.



     10.2 Seller’s Deposits Into Escrow. Seller shall deposit the following documents and
items into escrow at least one (1) business day prior to the Closing Date:



          (a) a duly executed and acknowledged grant deed conveying the Property and Improvements to
Buyer in the form of the attached Exhibit F, together with a separate transfer tax
affidavit (the “Grant Deed”);



          (b) a duly executed bill of sale and general assignment, in the form of the attached
Exhibit G (the “Assignment”), transferring the Personal Property, Leases, Service
Contracts, Approvals, Warranties and Intangible Property to Buyer;



          (c) an affidavit in the form of the attached Exhibit H stating that Seller is not a
“foreign person” under IRC Section 1445(f)(3);



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          (d) tenant notice letters for all tenants at the Property informing them of the sale of the
Property and assignment of the Leases to Buyer, in the form of attached Exhibit I;



          (e) a duly executed affidavit in the form required by the California Franchise Tax Board
certifying that no withholding of any amount of the Purchase Price is required in connection with
the Closing;



          (f) Seller’s share of the closing costs as described in Section 10.5 below or instructions to
Title Company to deduct same from the Purchase Price;



          (g) an owner’s title affidavit in the form of the attached Exhibit J;



          (h) the Rent Roll, updated to a date no earlier than three (3) business days prior to the
Closing Date, certified by Seller as true and correct;



          (i) A certification that all of the representations and warranties set forth in Section 11.1
remain true, complete and accurate, except to the extent of any exceptions to such representations
and warranties identified in such certification; and



          (j) such other documents as may reasonably be required to complete the Closing.



     10.3 Seller’s Deliveries to Buyer Outside of Escrow. Seller shall deliver to Buyer at
the Property (except as otherwise provided below) on or before the Closing Date, all of the
following:



          (a) originals, to the extent in Seller’s possession or control, or copies of the Leases and
the Service Contracts, which copies are certified by Seller as true and correct;



          (b) the original Estoppel Certificates, duly executed by the Tenants, which shall be delivered
to Buyer’s counsel, James Moore of Boutin Jones Inc.;



          (c) all keys and security codes to the Property;



          (d) electronic or hard copies of all Documents; and



          (e) originals or copies of all Lease files and Property files, including all records,
instruments and correspondence related to maintenance and repair, the Tenants, the Leases,
construction and alteration of the Improvements (base building and tenant improvements), and
operation of the Property, to the extent such files are located at the Real Property.



     10.4 Buyer’s Deposits into Escrow. Buyer shall deposit the following into escrow at
least one (1) business day prior to the Closing Date:



          (a) the balance of the Purchase Price in immediately available funds;



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          (b) Buyer’s share of the closing costs as described in Section 10.5. below;



          (c) two original duly executed counterparts of the Assignment; and



          (d) such other documents as may reasonably be required to complete the Closing.



     10.5 Adjustment and Proration. All accounts receivable and all accounts payable shall
be prorated between Buyer and Seller as of 12:01 a.m. on the Closing Date, on the basis of a
365-day year, with Seller entitled to all accounts receivable and responsible for all accounts
payable with respect to the period prior to such date and time, and with Buyer entitled to all
accounts receivable and responsible for all accounts payable with respect to the period from and
after such date and time. Prior to Closing, Seller shall prepare for review, comment and agreement
by Buyer a proration statement for the Property, and each party shall be credited or charged at the
Closing, in accordance with the following:



          (a) Accounts Receivable. Seller shall account to Buyer for any Rents actually
collected by Seller for the month in which the Closing occurs, and Buyer shall be credited for its
pro rata share applicable to the period from and after the Closing Date. For purposes of this
Agreement, the term “Rents” means and includes Fixed Rents and Additional Rents; “Fixed Rents”
means the periodic fixed rent payable by a Tenant under its Lease; and “Additional Rents” means all
amounts, other than Fixed Rents, due from any Tenant under any Lease, including without limitation,
percentage rents, escalation charges for real estate taxes, parking charges, marketing fund
charges, reimbursement of operating expenses or common area expenses, maintenance escalation rents
or charges, cost of living increases or other charges of a similar nature, if any, and any
additional charges and expenses payable under any Lease.



          (b) Accounts Payable. For purposes of this Agreement, the term “Expenses” means all
operating expenses normal to the operation and maintenance of the Property, including without
limitation real property taxes and assessments, current installments of any improvement bonds or
assessments which are a lien on the Property or which are pending and may become a lien on the
Property, water, sewer and utility charges, amounts payable under any Service Contract for any
period in which the Closing occurs, permits, licenses and inspection fees. Expenses shall not
include expenses which are of a capital nature.



               (i) Prepaid Expenses. To the extent Expenses have been paid prior to the Closing Date
for any part of the period on or after the Closing Date, Seller shall account to Buyer for such
prepaid Expenses, and Seller shall be credited for the amount of such prepaid expenses applicable
to the period after the Closing Date.



               (ii) Unpaid Expenses. To the extent Expenses relating to the period prior to the
Closing Date are unpaid as of the Closing Date but are ascertainable, Buyer shall be credited for
Seller’s pro rata share of such Expenses for the period prior to the Closing Date.



               (iii) Service Contracts. Payments due under any Service Contracts shall be prorated
as of the Closing Date, and Buyer shall be liable for all payments accruing



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thereunder after the Closing. Seller shall be responsible for all payments under all
contracts and agreements not assumed by Buyer




          (c) Property Taxes. Seller shall be responsible for all real and personal property ad
valorem taxes and special assessments applicable to the period prior to the Closing Date; Buyer
shall be responsible for all real and personal property ad valorem taxes and special assessments
applicable to the period from and after the Closing Date. With respect to any property tax appeal
or reassessment filed by Seller for the current tax year or tax years (or portions thereof) prior
to the Closing, Seller shall be entitled to the full amount of any refund or rebate resulting
therefrom applicable to the period before the Closing Date, except to the extent such amounts are
payable to, or otherwise accrue to the benefit of, the Tenants pursuant to the Leases, which
amounts Seller shall promptly refund to such Tenants.



          (d) Utility Charges. All utility (including electricity, gas, water, sewer and
telephone) charges will be prorated to the Closing Date as Expenses. All refundable utility
security deposits, if any, will be retained by Seller.



          (e) Government Tenants. Buyer acknowledges that the Government Tenants pay Rents in
arrears. Accordingly, Seller shall receive a credit at Closing for the Rents that accrue under the
Leases of the Government Tenants in the month that Closing occurs, to the extent any rents accrue
under such Leases.



          (f) Molina Rents and Reimbursements. If, as of the Closing Date, Seller is due any
amounts from Molina under its Lease that are ascertainable, Seller shall receive a credit at
Closing for such amounts. Likewise, if any amounts are due and owing from Seller to Molina at
Closing, Seller shall pay such amounts to Molina at or before Closing. Any amounts that are due
and owing from Seller to Molina after Closing shall be paid by Seller to Molina as and when such
amounts come due, after deduction for all amounts then due and owing to Seller by Molina or Buyer.



          (g) Post-Closing. If the amount of any proration cannot be determined at the Closing,
the adjustments will be made between the parties as soon after Closing as possible, as follows:



               (i) Non-delinquent Rents. If after the Closing either Buyer or Seller collects any
non-delinquent Rents applicable to the month in which the Closing occurred (or if Seller collects
any Rents applicable to any month following the month in which the Closing occurred), such Rents
shall be prorated as of the Closing Date and paid to the party entitled thereto not later than five
(5) business days following receipt, except to the extent such party received a credit at Closing
for such Rents.



               (ii) Delinquent Rents for Month in which the Closing Occurred. If after the Closing
Date either Buyer or Seller receives from any Tenant Rents that were delinquent as of the Closing
Date and that relate to the rental period in which the Closing occurred, then such Rents shall be
applied in the following order of priority: First, to reimburse Buyer for all out-of-pocket
third-party collection costs actually incurred by Buyer in collecting



- 17 -









 




such Rents; second, to satisfy such Tenant’s Rent obligations relating to the period after the
Closing Date; and third, to satisfy such delinquent Rent obligations relating to the period prior
to the Closing Date. Buyer agrees to use commercially reasonable efforts to collect any such
delinquent rents but Buyer has no obligation to institute any collection action or otherwise incur
any material cost in connection therewith. Seller shall have no right to pursue or continue the
collection of such delinquent Rents from any Tenant in occupancy as of the Closing Date, but Seller
shall have the right to continue to prosecute any collection proceedings that were initiated prior
to the Closing against any tenant no longer in occupancy as of the Closing Date. Notwithstanding
the foregoing, if Molina owes any Rents for any period prior to Closing for which Seller did not
receive a credit at Closing, Buyer shall pay all Rents received from Molina to Seller until such
Rents owed to Seller have been paid in full.




               (iii) Expenses. With respect to any invoice received by Buyer or Seller after the
Closing Date for Expenses that relate to the period in which the Closing occurred, the party
receiving such invoice shall give the other party written notice of such invoice, and the other
party shall have thirty days to review and approve the accuracy of any such invoice. If the
parties agree that the Invoice is accurate and should be paid, the parties shall compute each
party’s pro rata share, and deliver a check for that amount in favor of the vendor.



          (h) Survival of Obligations. The obligations of Seller and Buyer under this Section
10.5 shall survive the Closing.



     10.6 Items Not to be Prorated. There shall be no prorations or adjustments of any
kind with respect to:



          (a) Insurance Premiums. Insurance Premiums shall not be prorated. Seller will
terminate its coverages as of the Closing Date, and Buyer shall be responsible for obtaining its
own coverages as of the Closing Date.



          (b) Delinquent Fixed Rents for Full Months Prior to the Month in which the Closing
Occurred. Delinquent Fixed Rents with respect to Tenants under the Leases applicable to months
prior to the calendar month in which the Closing occurred shall remain the property of Seller, and
Buyer shall have no claim thereto whether collected by Seller or Buyer, before or after the
Closing, and no responsibility of any kind with respect thereto except as specifically set forth
herein. Seller shall not take or continue to take collection measures from or after the Closing.
Buyer agrees to use commercially reasonable efforts to collect any delinquent Fixed Rents owed
Seller, but Buyer has no obligation to institute any collection action or otherwise incur any
material costs in connection therewith. Except with respect to the Rents collected from Molina,
Fixed Rents collected from Tenants after the Closing Date shall be applied in the following order
of priority: First, to reimburse Buyer for all out-of-pocket third-party collection costs actually
incurred by Buyer in collecting such Rents; second, to satisfy such Tenant’s Rent obligations
relating to the period after the Closing Date; and third, to satisfy such delinquent Rent
obligations relating to periods prior to the Closing Date. In the event that Buyer collects any
such delinquent Fixed Rents, Buyer shall apply such Fixed Rents as contemplated above and shall
promptly pay over to Seller any amounts properly owed to Seller.



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          (c) Additional Rents Relating to Full or Partial Months Prior to the Closing Date. If
Additional Rents relating to full or partial months prior to the Closing Date are not finally
adjusted between Seller and any Tenant until after the Closing Date, then any refund to which any
Tenant may be entitled shall be the obligation of Seller, and any additional amounts due from the
Tenant for such period shall be the property of Seller. Buyer shall have no obligation with
respect to any such refund due to any Tenant and no claim to any such amounts due from any Tenant,
except that Buyer shall promptly pay to Seller any such delinquent Additional Rent amounts as it
actually collects. If Seller receives any refund of expenses paid prior to the Closing and
relating to a period prior to the Closing, and such expenses were reimbursed in whole or in part by
any Tenant, Seller shall refund to each Tenant its share of any such refund. Buyer agrees to use
commercially reasonable efforts to collect any such Additional Rents but Buyer has no obligation to
institute any collection action or otherwise incur any material cost in connection therewith.



          (d) Security Deposits. Seller shall deliver to Buyer (or credit to Buyer at Closing)
all prepaid rents, security deposits, letters of credit and other collateral actually held by
Seller or any of its affiliates or successors in interest under any of the Leases, to the extent
not applied by Seller prior to the Closing Date to the extent permitted under the Leases. From and
after the Contract Date, Seller shall not apply any security deposits without the Buyer’s prior
written consent.



          (e) Survival. The terms of Section 10.6 shall survive the Closing.



     10.7 Closing Costs. The Closing costs for this transaction shall be paid as follows:



          (a) Seller shall pay (i) any brokerage fees to the Selling Broker as required under Section
18.7 below; (ii) one-half of all transfer and sales taxes (including documentary transfer taxes);
(iii) all costs, expenses and fees related to the defeasance of the Existing Loan; (iv) the cost of
the Title Policy, up to but not to exceed an amount equal to the cost of owner’s standard CLTA
coverage title insurance in the amount of the Purchase Price; (v) one-half of the escrow fees; and
(vi) all other costs and expenses allocated to Seller pursuant to this Agreement.



          (b) Buyer shall pay (i) any brokerage fees to the Buying Broker as required under Section 18.7
below; (ii) one half of all transfer and sales taxes (including documentary transfer taxes); (iii)
the increased cost of the Title Policy associated with ALTA extended coverage and endorsements
requested by Buyer (except for “gap” coverage); (iv) all recording fees (other than in connection
with any documents recorded in connection with the defeasance of the Existing Loan); (v) one-half
of the escrow fees; and (vi) all other costs and expenses allocated to Buyer pursuant to this
Agreement.



          (c) All other costs shall be paid in accordance with customary practices in the County of Los
Angeles.



     10.8 Closing. Pursuant to Section 10.1 above, Title Company shall close the escrow
for this transaction when it is in a position to issue the Title Policy and has received from
Seller



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and Buyer the items required of each in Sections 10.2 and 10.4 above. Title Company shall
close escrow by doing the following:




          (a) Recording the Grant Deed in the Official Records of the County of Los Angeles;



          (b) Delivering to Buyer the Title Policy, the original documents and items listed in Section
10.2 above, and a closing statement for the escrow consistent with this Agreement and signed by
Buyer and Seller (the “Closing Statement”), and any refund due Buyer; and



          (c) Delivering to Seller the amount due Seller as shown on the Closing Statement, the original
documents listed in Section 10.4 above, and a signed original of Seller’s Closing Statement.



     10.9 Possession. Seller shall deliver possession of the Property to Buyer on the
Closing Date, subject to the rights of the Tenants under the Leases.


11. Representations and Warranties.




     11.1 Representations and Warranties of Seller. Seller hereby makes the following
representations and warranties to Buyer, which representations and warranties shall survive the
Closing, and all of which (i) are material and are being relied upon by Buyer, and (ii) are true,
complete and accurate as of the date hereof.



          (a) Organization. Seller is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware, and qualified to do
business, and in good standing, in the State of California.



          (b) Authorization. This Agreement has been duly authorized, executed, and delivered
by Seller; the obligations of Seller under this Agreement are legal, valid, and binding obligations
of Seller; and this Agreement does not, and at the time of Closing will not, (i) violate or
conflict with the organizational documents of Seller or any member of Seller acting on Seller’s
behalf, (ii) violate or conflict with any judgment, decree, or order of any court applicable to or
affecting Seller, (iii) breach the provisions of, or constitute a default under, any contract,
agreement, instrument, or obligation to which Seller is a party or by which Seller is bound, or
(iv) violate or conflict with any law, ordinance, or governmental regulation or permit applicable
to Seller. All documents that are executed by Seller and that are delivered to Buyer at the
Closing will be, at the time of Closing, duly authorized, executed, and delivered by Seller; the
obligations of Seller under such documents will be, at the time of Closing, legal, valid, and
binding obligations of Seller; and such documents will not, at the time of Closing, (i) violate or
conflict with the organizational documents of Seller or any member of Seller acting on Seller’s
behalf, (ii) violate or conflict with any judgment, decree, or order of any court applicable to or
affecting Seller, (iii) breach the provisions of, or constitute a default under, any contract,
agreement, instrument, or obligation to which Seller is a party or by which Seller is bound, or



- 20 -









 




(iv) violate or conflict with any law, ordinance, or governmental regulation or permit
applicable to Seller.




          (c) Bankruptcy. No proceedings under any federal or state bankruptcy or insolvency
laws have been commenced by or against Seller which have not been terminated; no general assignment
for the benefit of creditors has been made by Seller; and no trustee or receiver of Seller’s
property has been appointed.



          (d) Not a Foreign Person. Seller is not a foreign person within the meaning of
section 1445(f)(3) of the Internal Revenue Code of 1986. Seller has read and understands the
provisions of sections 18662 and 18668 of the California Revenue and Tax Code (the “Act”) and has a
“permanent place of business” within California within the meaning of the Act and the regulations
and guidelines of the California Franchise Tax Board promulgated from time to time pursuant
thereto.



          (e) Litigation. Except as disclosed in writing to Buyer, no litigation or proceeding
is pending or, to Seller’s knowledge, threatened that affects the Property or Seller’s ability to
consummate the transactions contemplated by this Agreement.



          (f) Violations. Except as disclosed in writing to Buyer, Seller has not received any
written notice of any violation by the Property of any applicable rule, regulation, ordinance or
government directive from any administrative or governmental authority that has not been cured.



          (g) Leases; Landlord Defaults. There are no leases, rental agreements, license
agreements or occupancy rights affecting the Property other than those listed on Exhibit C
and any matters of record. Seller has not received any written notice of a default by Seller from
any Tenant under any of the Leases that has not been cured, other than as set forth in the Tenant
Estoppels.



          (h) Rent Roll. Exhibit C contains a complete and correct list of all existing
Leases, setting forth with respect to each Lease, the following minimum information (the “Rent
Roll”): the name of the Tenant, the number of the room or suite occupied by the Tenant, the square
footage of the space, the commencement and expiration dates, the amount of the monthly base rent
payment, the current monthly additional rent payment for the Tenant share of Real Property expenses
and taxes, the amount of any security deposit or prepaid rent, and the amount and due date of any
payments due Tenants in the future as reimbursement for costs of tenant improvements. Seller shall
deliver an updated Rent Roll to Buyer two (2) business days prior to the expiration of the Due
Diligence Period, which shall be accurate as of the date set forth on the updated Rent Roll (which
date shall not be more than three (3) business days prior to the date the updated Rent Roll is
delivered to Buyer). Seller shall deliver a further updated Rent Roll to Buyer three (3) business
days prior to the Closing Date, which shall be accurate as of the date set forth on the updated
Rent Roll (which date shall not be more than three (3) business days prior to the date the updated
Rent Roll is delivered to Buyer).



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          (i) Delinquency Report. With the exception of delinquencies in the payment of rents
which are set forth on the Rent Roll, Seller has not delivered written notice to any Tenant of any
default in the payment of rent under its Lease that has not been cured. Exhibit C contains
a true and correct report (the “Delinquency Report”) showing the name of each Tenant as to which a
delinquency currently exists as to the payment of Rents and specifying the amount of each such
delinquency, and the period of time during which each such delinquency has been outstanding.
Seller shall deliver an updated Delinquency Report to Buyer two (2) business days prior to the
expiration of the Due Diligence Period, which shall be accurate as of the date set forth on the
updated Delinquency Report (which date shall not be more than three (3) business days prior to the
date the updated Delinquency Report is delivered to Buyer). Seller shall deliver a further updated
Delinquency Report to Buyer three (3) business days prior to the Closing Date, which shall be
accurate as of the date set forth on the updated Delinquency Report (which date shall not be more
than three (3) business days prior to the date the updated Delinquency Report is delivered to
Buyer).



          (j) Leases. The Documents contain a true, correct and complete copy of each Lease.
Each such Lease constitutes the entire agreement between Seller and each other party thereto. As
of the Closing Date, no rents due under, or any other interest in, any of the Leases will be
assigned to any party other than Buyer, or otherwise pledged or encumbered in any way.



          (k) Tenant Improvements; Lease Costs. Except as set forth in Exhibit C, all
of the improvements to be constructed by Seller under each of the Leases, have been fully completed
and paid for. Except as set forth in Exhibit C, Seller has paid, in full, any leasing
commissions, except for future contingent obligations set forth in the Rent Roll.



          (l) Service Contracts. Exhibit E contains a true and complete list of all
Service Contracts. The Documents include true and complete copies of all Service Contracts. To
Seller’s knowledge, there have been no material defaults by any Party to a Service Contract which
have not been cured. To Seller’s knowledge, Seller is not in breach or default under any Service
Contract which has not been cured. The Service Contracts constitute the entire agreement between
Seller and the other parties to the Service Contracts.



          (m) Insurance. Exhibit L correctly identifies the policies of casualty and
liability insurance currently in effect with respect to the Property. All premiums for such
insurance have been paid in full. Seller has not received any notice or request from any insurance
company or Board of Fire Underwriters (or organization exercising functions similar thereto)
canceling or threatening to cancel any of said policies or denying or disputing coverage
thereunder.



          (n) Commission Agreements. Except as expressly set forth in the Leases or on
Exhibit C, there are no lease brokerage agreements, leasing commission agreements or other
agreements providing for payments of any amounts for leasing activities or procuring tenants with
respect to the Property, other than such commissions as may be due on future lease renewals,
expansions or extensions.



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          (o) Environmental Releases. To Seller’s knowledge, no Hazardous Materials have been
discharged, released or disposed of by Seller or its members, managers, partners, directors,
officers, shareholders, trustees, beneficiaries, agents, employees and representatives in violation
of applicable Environmental Laws as of the date of such discharge, disposal or release As used
herein, the term “Hazardous Materials” means without regard to amount and/or concentration any
hazardous or toxic substance, material or waste wherever located expressly including but not
limited to petroleum and petroleum derived compounds, which is included within the definition of
any hazardous or toxic material, substance or waste in any federal, state or local statutes, laws,
ordinances or regulations applicable to the Property, as well as any soils, ground or surface
waters, wetlands or other environmental media which may be contaminated by such Hazardous Material,
including the following: (a) those substances defined as a hazardous substance, hazardous waste,
hazardous material, toxic substance, solid waste, pollutant or contaminant under any Environmental
Law, as defined below; (b) those substances listed in the United States Department of
Transportation Table [49 CFR § 172.101], or by the Environmental Protection Agency, or any
successor agency, as hazardous substances [40 CFR Part 302]; (c) other substances, materials, and
wastes that are regulated or classified as hazardous or toxic under federal, state or local laws or
regulations applicable to the Property; and (d) any material, waste, or substance that is a
petroleum or refined petroleum product or byproduct, asbestos, or any rock, including serpentine
rock, which contains or might contain asbestos, chlorinated solvents, biologic waste,
polychlorinated biphenyl, designated as a hazardous substance pursuant to 33 USCS §1321 or listed
pursuant to 33 USCS §1317, a flammable explosive, or a radioactive material. As used herein, the
term “Environmental Law” means all federal, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees or requirements of any government authority
applicable to the Property and regulating, relating to, or imposing liability or standards of
conduct concerning any Hazardous Material, or pertaining to environmental conditions on or under
the Property described in this Agreement, as now in effect, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) [42 USCS
§§9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (RCRA) [42 USCS §§6901 et
seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA) [33 USCS
§§1251 et seq.]; the Toxic Substances Control Act (TSCA) [15 USCS §§2601 et seq.]; the Hazardous
Materials Transportation Act (HMTA) [49 USCS §§1801 et seq.]; the Insecticide, Fungicide,
Rodenticide Act (7 USCS §§136 et seq.]; the Superfund Amendments and Reauthorization Act [42 USCS
§§6901 et seq.]; the Clean Air Act [42 USCS §§7401 et seq.]; the Safe Drinking Water Act [42 USCS
§§300f et seq.]; the Solid Waste Disposal Act [42 USCS §§6901 et seq.]; the Surface Mining Control
and Reclamation Act [30 USCS §§1201 et seq.]; the Emergency Planning and Community Right to Know
Act [42 USCS §§11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§655 and 657]; the
California Underground Storage of Hazardous Materials Act [Health and Safety Code §§25280 et seq.];
the California Hazardous Materials Account Act [Health and Safety Code §§25100 et seq.]; the
California Safe Drinking Water and Toxic Enforcement Act [Health and Safety Code §§24249.5 et
seq.]; the Porter-Cologne Water Quality Act [Water Code §§13000 et seq.], together with any
amendments of or regulations promulgated under the statutes cited above, and any other federal,
state or local law, statute, ordinance or regulation applicable to the Property now in effect that
pertains to the regulation or protection of the environment, including ambient air, soil, soil
vapor, groundwater, surface water, or land use.



- 23 -









 




For purposes of the representations and warranties given by Seller in this Agreement, the phrase
“to Seller’s knowledge” or other terms regarding the knowledge of Seller, shall mean the actual,
current knowledge of Kennard P. Perry and Cory Kristoff, excluding constructive or imputed
knowledge or duty of inquiry, existing as of the Contract Date and the Closing. In no event shall
there be any personal liability on the part of any of the foregoing individuals on account of any
breach of any representation or warranty of Seller herein.




     11.2 Material Changes; Survival. Two (2) business days prior to the expiration of the
Due Diligence Period, Seller shall deliver to Buyer a certification that all of the representations
and warranties set forth in Section 11.1 remain true, complete and accurate, except to the extent
of any exceptions to such representations and warranties identified in such certification. Further,
if, prior to the Closing, Seller becomes aware of any fact or circumstance that would materially
change a representation or warranty of Seller in this Agreement, then Seller shall promptly, and in
all events at least five (5) business days prior to the Closing Date (which date shall be extended
if necessary to give Buyer five business days to review such material change), give written notice
of such changed fact or circumstance to Buyer. If, prior to Closing, upon Seller’s notice or
otherwise, Buyer becomes aware of the material untruth or inaccuracy of, or facts or circumstances
that would change materially, any representation or warranty of Seller in this Agreement that was
true when made by Seller, then Buyer shall have the option of: (i) waiving such breach of
representation or warranty or material adverse change and completing its purchase of the Property
pursuant to this Agreement; (ii) reaching agreement with Seller to adjust the terms of this
Agreement to compensate Buyer for such change; or (iii) terminating this Agreement and receiving
the return of the Deposit as Buyer’s sole remedy prior to Closing. All of Seller’s representations
and warranties shall survive the Closing; provided, however, that Seller’s representations and
warranties set forth in Sections 11.1(d) through 11.1(i) shall survive the Closing only with
respect to written claims alleging a specific breach of one or more of those representations and
warranties received by Seller prior to the first anniversary of the Closing Date. Buyer shall not
be entitled to any right or remedy for any inaccuracy in or breach of any representation, warranty
or covenant under this Agreement or any conveyance document unless the amount of damages, in the
aggregate, proximately caused by all such breaches or inaccuracies exceeds Fifty Thousand and
No/100ths Dollars ($50,000). If Buyer’s aggregate damages exceed Fifty Thousand and No/100ths
Dollars ($50,000), Buyer shall be entitled to recover the entire first Fifty Thousand and No/100ths
Dollars ($50,000) of damages suffered by Buyer. Notwithstanding anything to the contrary in this
Agreement the aggregate liability of Seller under this Agreement to Buyer for any and all actions
or claims by Buyer with respect to these representations and warranties that survive the Closing
shall be limited to One Million Five Hundred Thousand Dollars ($1,500,000).



     11.3 Representations and Warranties of Buyer. Buyer hereby makes the following
representations and warranties to Seller, which representations and warranties shall survive the
Closing and all of which (i) are material and are being relied upon by Seller, (ii) are true,
complete and accurate in all respects as of the date hereof and shall be true, complete and
accurate as of the Closing Date, and (iii) shall survive the Closing:



- 24 -









 





          (a) Organization. Buyer is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is qualified to do
business, and is in good standing, in the State of California.



          (b) Authorization. This Agreement has been duly authorized, executed, and delivered
by Buyer; the obligations of Buyer under this Agreement are legal, valid, and binding obligations
of Buyer; and this Agreement does not, and at the time of Closing will not, (i) violate or conflict
with the organizational documents of Buyer or any member of Buyer acting on Buyer’s behalf, (ii)
violate or conflict with any judgment, decree, or order of any court applicable to or affecting
Buyer, (iii) breach the provisions of, or constitute a default under, any contract, agreement,
instrument, or obligation to which Buyer is a party or by which Buyer is bound, or (iv) violate or
conflict with any law, ordinance, or governmental regulation or permit applicable to Buyer. All
documents that are delivered to Seller at the Closing will be, at the time of Closing, duly
authorized, executed, and delivered by Buyer; the obligations of Buyer under such documents will
be, at the time of Closing, legal, valid, and binding obligations of Buyer; and such documents will
not, at the time of Closing, (i) violate or conflict with the organizational documents of Buyer or
any member of Buyer acting on Buyer’s behalf, (ii) violate or conflict with any judgment, decree,
or order of any court applicable to or affecting Buyer, (iii) breach the provisions of, or
constitute a default under, any contract, agreement, instrument, or obligation to which Buyer is a
party or by which Buyer is bound, or (iv) violate or conflict with any law, ordinance, or
governmental regulation or permit applicable to Buyer.



          (c) Bankruptcy. No proceedings under any federal or state bankruptcy or insolvency
laws have been commenced by or against Buyer which have not been terminated; no general assignment
for the benefit of creditors has been made by Buyer; and no trustee or receiver of Buyer’s property
has been appointed.


12. Risk of Loss; Insurance Proceeds; Condemnation.




     12.1 Damage or Destruction. In the event of damage or destruction of the Improvements
that occurs prior to the Closing Date that (i) would require the expenditure of an amount less than
one percent (1%) of the Purchase Price to repair, and (ii) does not permit any Government Tenant or
Major Non-Government Tenant to terminate its Lease (each of the foregoing events, a “Material
Damage Event”), Buyer and Seller shall consummate this Agreement, and Seller shall (a) assign to
Buyer at Closing all rights to insurance proceeds on account of such damage or destruction,
including any insurance proceeds previously received by Seller with respect to such damage or
destruction, and (b) pay to Buyer the amount of the deductible or retention applicable to such
damage or destruction under the insurance policy. In the event such damage or destruction results
in or causes a Material Damage Event, Buyer or Seller may elect to terminate this Agreement by
written notice to the other within ten (10) days after the Material Damage Event. If neither party
elects to terminate this Agreement, Seller shall assign the insurance proceeds and pay the
applicable deductible or retention to Buyer at Closing and Seller shall have no further
responsibility to Buyer for such damage or destruction. If either party elects to terminate this
Agreement, the Deposit and all interest thereon shall be refunded to Buyer and the parties shall no
further obligation to each other except for those obligations which expressly survive the
termination of this Agreement.



- 25 -









 





     12.2 Eminent Domain. If, prior to the Closing, a taking by eminent domain of all or
any portion of the Land or Improvements is pending, and such taking would (i) materially and
adversely interfere with the use of the Property for its current permitted uses, (ii) materially
and adversely affect ingress, egress or parking for the Property or any Tenant’s access to its
space, (iii) would permit the termination of any Lease by any Government Tenant or Major
Non-Government Tenant, or (iv) has a value exceeding one percent (1%) of the Purchase Price (each a
“Material Taking”), Buyer or Seller shall have the right, by delivering written notice to the other
within ten (10) days after Seller delivers written notice to Buyer of such pending taking, to
terminate this Agreement, in which event the Deposit and all interest thereon shall be returned to
Buyer. If neither party elects to terminate this Agreement or if the taking would not result in or
cause a Material Taking, then this Agreement shall remain in effect, and Seller shall assign to
Buyer at Closing its rights to the compensation and damages due Seller on account of such taking
(and will not settle any proceedings relating to such taking without Buyer’s prior written consent)
and Seller shall have no further responsibility to Buyer for such taking. Seller shall promptly
(and in any event prior to the Closing) notify Buyer of any condemnation affecting the Property.



     The provisions of this Section 12 shall supersede the provisions of any applicable laws with
respect to the subject matter of this Section 12.


13. Assignment. Buyer may not, at any time, assign this Agreement or Buyer’s rights or
obligations under this Agreement, either directly or indirectly, without the prior written consent
of Seller, which Seller may withhold in its sole and absolute discretion. Subject to the
foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the
parties hereto and their respective heirs, devisees, executors, administrators, legal
representatives, successors and assigns. In connection with any approved assignment, the assignee
shall assume the assignor’s obligations hereunder, but assignor shall nevertheless remain liable
therefor.



14. Seller’s Covenants During Contract Period. Between Seller’s execution of this
Agreement and the Closing, or earlier termination of this Agreement as permitted hereunder, Seller
shall (i) maintain the Property in good order, condition and repair, reasonable wear and tear
excepted; (ii) not make any material physical changes to the Improvements; (iii) continue to manage
the Property in the manner in which it is being managed; (iv) not enter into any contracts or
agreements affecting the Property unless such contracts can be completed or terminated prior to the
Closing or Buyer, in its sole discretion, agrees to assume such contract or agreement as of the
Closing Date, in which case such contracts shall be included within the term “Service Contracts”;
(v) not enter into any lease, amendment of lease or other agreement pertaining to the Property, or
permit any tenant of the Property to enter into any sublease or assignment of lease, except as
provided in Section 14.1; (vi) after the end of the Due Diligence Period, not offer the Property
for sale publicly or otherwise solicit, make, pursue, negotiate or accept offers for the sale of
the Property to or from any party; (viii) maintain the insurance described on Exhibit L in
full force and effect, except as otherwise approved by Buyer; and (ix) not dispose of or encumber
the Property or any part thereof, except for dispositions of personal property in the ordinary
course of business. From and after the Contract Date, Seller shall provide Buyer with regular
written updates as to the status of any leasing activity at the Property.







- 26 -









 








     14.1 New Leases and Lease Amendments; Lease Expenses.



          (a) If Seller desires to enter into any new lease affecting the Property (each a “New Lease”)
or any termination, amendment, modification, expansion or renewal of any existing Lease (each, a
“Lease Amendment”), after the Contract Date but prior to Closing, Seller shall provide Buyer with a
copy of the proposed New Lease or Lease Amendment and a copy of the landlord’s anticipated
improvement costs, tenant improvement allowances, brokerage commissions and out-of-pocket costs and
expenses in connection with the New Lease or Lease Amendment for Buyer’s review and approval, which
approval shall not be unreasonably withheld; provided, however, Buyer shall not have the right to
disapprove any New Lease or Lease Amendment prior to the expiration of the Due Diligence Period.
Buyer shall advise Seller, in writing, whether Buyer approves or reasonably disapproves such
proposed New Lease or Lease Amendment within three (3) business days after Buyer’s receipt of the
proposed New Lease or Lease Amendment; provided, however, if Buyer fails to notify Seller within
such three (3) business day period, Buyer shall be deemed to have approved the proposed
transaction. If after the expiration of the Due Diligence Period, Buyer reasonably disapproves of
the proposed New Lease or Lease Amendment, Seller shall not enter into such New Lease or Lease
Amendment. If Buyer unreasonably disapproves of the proposed New Lease or Lease Amendment, Seller
shall have the full right, power and authority to execute such New Lease or Lease Amendment so long
as Seller delivers to Buyer at least three (3) business days’ prior written notice of such
execution; provided, however, that after receipt of such notice, Buyer shall have the right to
terminate this Agreement, upon written notice delivered to Seller within three (3) business days
after receipt of Seller’s notice of execution of such New Lease or Lease Amendment. If Buyer
timely exercises such termination right, this Agreement shall terminate and the Deposit and all
interest thereon shall be returned to Buyer. In all other events, this Agreement shall remain in
full force and effect. Notwithstanding the foregoing, Seller acknowledges that it shall not enter
into any extension or expansion of the AECOM Technology Corp. Lease during the term of this
Agreement without Buyer’s approval, which may be withheld at Buyer’s sole discretion.



          (b) New Lease Expenses. If the Closing occurs, Buyer shall assume and be responsible
for (and to the extent previously paid by Seller, reimburse Seller on the Closing Date for) a pro
rata portion of any and all improvement costs, tenant improvement allowances, brokerage commissions
and out-of-pocket costs and expenses actually paid or incurred by Seller (collectively the “New
Lease Expenses”) arising out of or in connection with those New Leases and Lease Amendments entered
into by Seller pursuant to the foregoing provisions of this Section 14.1; such pro rata portion
shall equal the product of (i) the New Lease Expenses multiplied by (ii) a fraction, the numerator
of which is the number of months of the lease term of the New Lease (or the number of months of the
term of any exercised extension period provided by any Lease Amendment, as applicable) remaining as
of the Closing Date, and the denominator of which is the total number of months of such lease term
(or exercised extension period, as applicable). Seller shall be responsible for the remaining pro
rata portion of the New Lease Expenses. All New Leases and Lease Amendments entered into by Seller
pursuant to this Section 14.1 shall be part of the Leases, shall be deemed included on Exhibit
C and shall be assumed by Buyer upon Closing.



- 27 -









 





          (c) Existing Lease Expenses. Seller shall be responsible for the cost of tenant
improvement work and leasing commissions required to be paid under or with respect to all Leases
(and amendments thereto) entered into prior to the Contract Date and the cost of tenant improvement
work, leasing commissions required to be paid under or with respect to the State Lease Amendments
and the scheduled rent-free periods set forth in the State Lease Amendments (collectively,
“Existing Lease Expenses”), and if Seller fails to deliver Buyer evidence reasonably acceptable to
Buyer confirming that such Existing Lease Expenses have been paid prior to the Approval Date,
Seller shall give Buyer a credit therefore at Closing which shall be calculated as follows: Buyer
and Seller shall attempt to agree on the amount of the credit for such Existing Lease Expenses
during the Due Diligence Period, which amount shall equal 100% of the anticipated post-Closing
Existing Lease Expenses (“Closing Leasing Credit”). If Seller and Buyer can agree on the Closing
Leasing Credit on or before the Approval Date, such amount shall be credited against the Purchase
Price due from Buyer at Closing. If Seller and Buyer cannot agree on the Closing Leasing Credit at
least five (5) business days prior to the expiration of the Due Diligence Period, then at least
three (3) business days prior to the expiration of the Due Diligence Period, Seller shall give
Buyer written notice of the amount of the Closing Leasing Credit that Seller is willing to offer.
If Buyer timely delivers the Approval Notice, Buyer shall be deemed to have accepted Seller’s
proposed Closing Leasing Credit and Buyer will proceed with the acquisition of the Property under
the terms of this Agreement. Except as otherwise agreed to by Seller and Buyer, the Closing
Leasing Credit shall constitute Seller’s sole and only obligations with respect to the Existing
Lease Expenses, and as of the Closing Date Buyer shall assume all such obligations (as to leasing
commissions only, up to the amount set forth for leasing commissions in the Closing Lease Credit)
and indemnify and hold Seller harmless with respect thereto (as to leasing commissions only, up to
the amount set forth for leasing commissions in the Closing Lease Credit).


15. ARBITRATION OF DISPUTES. IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES ARISING UNDER
OR RELATED TO THIS AGREEMENT, SUCH DISPUTE, SHALL BE RESOLVED BY BINDING ARBITRATION BEFORE A
SINGLE ARBITRATOR. SUCH ARBITRATION MAY BE INITIATED BY EITHER PARTY BY DELIVERING WRITTEN NOTICE
OF INTENT TO ARBITRATE TO THE OTHER PARTY AND TO THE SAN FRANCISCO OFFICE OF THE AMERICAN
ARBITRATION ASSOCIATION (“AAA”), WHICH NOTICE SHALL DESCRIBE THE DISPUTE AND THE PARTY’S PROPOSAL
FOR RESOLVING THE DISPUTE IN DETAIL. WITHIN THIRTY (30) DAYS AFTER DELIVERY OF SUCH NOTICE EACH
PARTY SHALL PROVIDE ALL RELEVANT DOCUMENTS AND MATERIALS THAT PERTAIN TO THE DISPUTE. THE PARTIES
SHALL FIRST ENDEAVOR TO AGREE ON THE ARBITRATOR, BUT IF THEY ARE UNABLE TO DO SO WITHIN TEN (10)
DAYS AFTER THE ARBITRATION HAS BEEN INITIATED, THE ARBITRATOR SHALL BE SELECTED, WITHIN THIRTY (30)
DAYS AFTER THE ARBITRATION WAS INITIATED, USING THE AAA PROCEDURES. THE ARBITRATOR SHALL BE A
RETIRED SUPERIOR COURT JUDGE OR A LICENSED, PRACTICING ATTORNEY WHO IS SUBSTANTIALLY FAMILIAR WITH
THE REAL ESTATE LAW, CUSTOM, PRACTICE, OR PROCEDURE, IN THE AREA IN WHICH THE PROPERTY IS LOCATED,
PERTINENT TO THE DISPUTE BEING ARBITRATED, IN EITHER CASE WITH NOT LESS THAN TWENTY (20) YEARS
CONTINUOUS EXPERIENCE AS A JUDGE AND/OR REAL ESTATE PRACTITIONER. IN






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ESTABLISHING WHETHER AN ARBITRATOR IS ABLE TO SERVE, THE PARTIES SHALL ADVISE HIM OR HER OF THE
NAMES OF ALL PARTIES AND THEIR AFFILIATES AND PRINCIPAL OFFICERS AND OWNERS, AND CONFIRM THAT THERE
IS NO CONFLICT OF INTEREST, WHICH FOR PURPOSES HEREOF SHALL MEAN NO BUSINESS OR PERSONAL
CONNECTIONS WITH THE ARBITRATOR, OR HIS OR HER FIRM, WITH ANY OF SUCH PARTIES EITHER CURRENTLY OR
AT ANY TIME DURING THE IMMEDIATELY PRECEDING THREE (3) YEARS. THE ARBITRATION SHALL BE CONDUCTED
PURSUANT TO THE AAA’S COMMERCIAL ARBITRATION RULES, AS MODIFIED BY THIS SECTION 15, OR BY SUCH
OTHER ORGANIZATION AND RULES AS THE PARTIES MAY MUTUALLY AGREE UPON. IF AAA IS NOT AVAILABLE AND
THE PARTIES CANNOT AGREE ON AN ALTERNATE CHOICE, THE PROVISIONS OF CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1280 ET. SEQ. SHALL APPLY. ALL ARBITRATION PROCEEDINGS SHALL BE CONFIDENTIAL,
AND NEITHER PARTY NOR THE ARBITRATOR MAY DISCLOSE THE CONTENT OR RESULTS OF ANY ARBITRATION
HEREUNDER WITHOUT THE WRITTEN CONSENT OF BOTH PARTIES. THE ARBITRATOR SHALL FOLLOW THE LAW
(INCLUDING APPLICABLE STATUTES OF LIMITATIONS) AND ALL RULES OF EVIDENCE UNLESS THE PARTIES
STIPULATE TO THE CONTRARY. ANY PROVISIONAL REMEDY (INCLUDING PRELIMINARY OR PERMANENT INJUNCTIONS
AND WRITS OF ATTACHMENT AND POSSESSION) WHICH WOULD BE AVAILABLE FROM A COURT OF LAW OR EQUITY
SHALL BE AVAILABLE FROM THE ARBITRATOR PENDING COMPLETION OF THE ARBITRATION. THE BENEFITED PARTY
OF SUCH PROVISIONAL REMEDY SHALL BE ENTITLED TO ENFORCE SUCH REMEDY IN COURT IMMEDIATELY, EVEN
THOUGH A FINAL ARBITRATION AWARD HAS NOT YET BEEN RENDERED. WITHIN THIRTY (30) DAYS AFTER HIS OR
HER APPOINTMENT, THE ARBITRATOR SHALL HEAR AND DECIDE THE DISPUTE SUBMITTED TO ARBITRATION
HEREUNDER AND SHALL PROMPTLY PREPARE A WRITTEN DECISION ON THE MERITS OF THE MATTERS IN DISPUTE,
WHICH DECISION SHALL STATE THE FACTS AND LAW RELIED UPON AND THE REASONS FOR THE ARBITRATOR’S
DECISION. THE ARBITRATOR MAY, AT HIS OR HER DISCRETION, ELECT WHETHER TO MEET WITH THE PARTIES AND
WHETHER TO CONDUCT A HEARING ATTENDED BY ALL PARTIES; PROVIDED, HOWEVER, THAT FOR DISPUTES
INVOLVING $50,000.00 OR MORE, THE ARBITRATOR SHALL CONDUCT A HEARING. DISCOVERY SHALL BE ALLOWED
IN ACCORDANCE WITH CALIFORNIA CODE OF CIVIL PROCEDURE 1283.05. THE ARBITRATOR SHALL HAVE COMPLETE
DISCRETION TO RESOLVE DISCOVERY DISPUTES, TO ORDER THE PRODUCTION OF DOCUMENTS AND PRESENTATION OF
WITNESSES AND TO LIMIT SUCH DISCOVERY, INCLUDING THE NUMBER AND SCOPE OF DEPOSITIONS THAT MAY BE
TAKEN BY THE PARTIES. PRIOR TO ISSUING HIS OR HER FINAL WRITTEN DECISION, THE ARBITRATOR SHALL
INFORM THE PARTIES, IN WRITING, OF THE ARBITRATOR’S EXPECTED DECISION ON THE MATTER AND THE REASONS
THEREFORE AND GIVE THE PARTIES FIVE (5) BUSINESS DAYS TO SUBMIT ADDITIONAL ARGUMENTS OR
INFORMATION, IN WRITING, TO THE ARBITRATOR AND THE OTHER PARTIES. THE AWARD OR DECISION OF THE
ARBITRATOR, WHICH MAY INCLUDE AN ORDER OF SPECIFIC






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PERFORMANCE, SHALL BE FINAL AND BINDING ON ALL PARTIES AND ENFORCEABLE IN ANY COURT OF COMPETENT
JURISDICTION; PROVIDED, HOWEVER, THAT THE AWARD MAY BE VACATED OR CORRECTED FOR ANY OF THE REASONS
PERMITTED UNDER AND PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 1286.2 OR 1286.6. THE
ARBITRATOR SHALL HAVE NO AUTHORITY TO MODIFY ANY OF THE TERMS OF THIS AGREEMENT. THE FEES AND
EXPENSES OF THE ARBITRATOR AND THE COSTS AND ATTORNEYS’ FEES OF THE PREVAILING PARTY SHALL BE PAID
BY THE PARTY WHO IS NOT THE PREVAILING PARTY, AS DEFINED IN SECTION 18.6 (ATTORNEYS’ FEES) AND
DETERMINED BY THE ARBITRATOR IN ITS DECISION.




          NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING
OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL
ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO
HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.



          WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE
MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION



	 	 	 

	 

	 	 
	Seller

	 	Buyer





16. Indemnification. Each party hereby agrees to indemnify, defend, protect and hold
harmless the other party from and against any and all claims, demands, liabilities, costs and
damages, including without limitation, reasonable attorneys’ fees (collectively, “Claims”) suffered
by the other party and resulting from or arising out of all third-party tort claims and similar
claims of the type that would typically be insured under a Commercial General Liability Insurance
Policy which are based on actions, facts or circumstances existing or occurring during the
indemnifying party’s ownership of the Property, excluding any Claims related to hazardous
substances. All of the indemnifications set forth in this Section 16 shall survive the Closing and
conveyance of the Property to Buyer.



17. Miscellaneous.



18. Notice. All notices and any other communications permitted or required under this
Agreement must be in writing and will be effective (i) immediately upon delivery in person or by
facsimile, provided delivery is made during regular business hours or receipt is acknowledged by






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a person reasonably believed by the delivering party to be employed by the recipient and that for
all facsimiles, good and complete transmission is confirmed by the sending facsimile machine and a
copy of the notice is concurrently mailed pursuant to clause (iii) below; or (ii) upon the actual
delivery as evidenced by executed receipt of the recipient if delivered by a nationally recognized
delivery service for overnight delivery, provided delivery is made during regular business hours or
receipt is acknowledged by a person reasonably believed by the delivering party to be employed by
the recipient; or (iii) or the date shown on the return receipt if delivered by the United States
Postal Service, certified mail, return receipt requested, postage prepaid and with the return
receipt returned to the sender marked as delivered, undeliverable or rejected. In the case of any
notices sent pursuant to clauses (ii) or (iii) above, the sender shall also send a copy of such
notice by email, which email shall be sent no later than 6:00 p.m. (Pacific Time) on the date such
notice is deposited with the delivery service or United States Postal Service. The inability to
deliver because of a changed address of which no notice was given, or rejection or other refusal to
accept any notice, shall be deemed to be the receipt of the notice as of the first date of such
inability to deliver or rejection or refusal to accept. Any notice to be given by any party hereto
may be given by the counsel for such party. All notices must be properly addressed and delivered
to the parties at the addresses set forth below, or at such other addresses as either party may
subsequently designate by written notice given in the manner provided in this Section 18:




	 	 	 	 	 

	  Seller:	 	200 Oceangate, LLC
	 	 	c/o The Swig Company, LLC
	 	 	220 Montgomery Street, 20th Floor
	 	 	San Francisco, CA 94104
	 	 	Attn: Kennard P. Perry
	 

	 	Telephone:
	 	(415) 291-1140
	 

	 	Facsimile:
	 	(415) 291-8373
	 

	 	Email:
	 	kperry@swigco.com
	 
	 	 	 	 
	  with copy to:	 	Farella Braun + Martel LLP
	 	 	235 Montgomery Street
	 	 	San Francisco, CA 94104
	 	 	Attn: Anthony D. Ratner
	 

	 	Telephone:
	 	(415) 954-4448
	 

	 	Facsimile:
	 	(415) 954-4480
	 

	 	Email:
	 	tratner@fbm.com
	 
	 	 	 	 
	  Buyer:
	 	 	 	 
	 
	 	 	 	 
	Prior to Closing:	 	Molina Healthcare, Inc.
	 	 	300 University Avenue, Suite 100
	 	 	Sacramento, CA 95825
	 	 	Attn: General Counsel
	 

	 	Telephone:
	 	(916) 646-9193 x114663
	 

	 	Facsimile:
	 	(916) 646-4572
	 

	 	Email:
	 	Jeff.Barlow@Molinahealthcare.com






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	  with copy to:	 	Boutin Jones Inc.
	 	 	555 Capitol Mall, Suite 1500
	 	 	Sacramento, CA 95814
	 	 	Attn: James R. Moore
	 

	 	Telephone:
	 	(916) 321-4444
	 

	 	Facsimile:
	 	(916) 441-7597
	 

	 	Email:
	 	jmoore@boutininc.com
	 
	  After Closing:	 	Molina Center LLC
	 	 	200 Oceangate, Suite 100
	 	 	Long Beach, CA 90802
	 	 	Attn: John Molina
	 

	 	Telephone:
	 	(562) 435-3666 x111128
	 

	 	Facsimile:
	 	(562) 495-7770
	 

	 	Email:
	 	John.Molina@Molinahealthcare.com
	  with a copy to:
	 	 	 	 
	 	 	Molina Healthcare, Inc.
	 	 	300 University Avenue, Suite 100
	 	 	Sacramento, CA 95825
	 	 	Attn: General Counsel
	 

	 	Telephone:
	 	(916) 646-9193 x114663
	 

	 	Facsimile:
	 	(916) 646-4572
	 

	 	Email:
	 	Jeff.Barlow@Molinahealthcare.com






     18.1 Headings. The headings used herein are for purposes of convenience only and
should not be used in construing the provisions hereof.



     18.2 Covenant of Further Assurances. The parties hereby agree to execute and deliver
such other documents and instruments (including, without limitation, additional escrow instructions
in conformity with this Agreement), and to take such other actions, whether before or after
Closing, as may reasonably be required and which may be necessary to consummate this transaction
and to otherwise effectuate the agreements of the parties hereto; provided that such additional
documents, instruments, or actions shall not impose upon the parties any obligations, duties,
liabilities or responsibilities which are not expressly provided for in this Agreement.



     18.3 Entire Agreement. This document represents the final, entire and complete
agreement between the parties with respect to the subject matter hereof and supersedes all other
prior or contemporaneous agreements, communications or representations, whether oral or written,
express or implied, including any letters of intent, including that certain Confidentiality
Agreement 200 & 300 Oceangate by and between Molina and Seller. The parties acknowledge and agree
that they may not and are not relying on any representation, promise, inducement, or other
statement, whether oral or written and by whomever made, that is not contained expressly in this
Agreement. This Agreement may only be modified by a written instrument signed by representatives
authorized to bind both parties. Oral modifications are unenforceable.



- 32 -









 





     18.4 Partial Invalidity. If any term, covenant or condition of this Agreement or its
application to any person or circumstances shall be held to be illegal, invalid or unenforceable,
the remainder of this Agreement or the application of such term or provisions to other persons or
circumstances shall not be affected, and each term hereof shall be legal, valid and enforceable to
the fullest extent permitted by law, unless an essential purpose of this Agreement would be
defeated by the loss of the illegal, unenforceable, or invalid provision. In the event of such
partial invalidity, the parties shall seek in good faith to agree on replacing any such legally
invalid provisions with valid provisions which, in effect, will, from an economic viewpoint, most
nearly and fairly approach the effect of the invalid provision and the intent of the parties in
entering into this Agreement.



     18.5 No Waiver. No consent or waiver by either party to or of any breach or
non-performance of any representation, condition, covenant or warranty shall be enforceable unless
in a writing signed by the party entitled to enforce performance, and such signed consent or waiver
shall not be construed as a consent to or waiver of any other breach or non-performance of the same
or any other representation, condition, covenant, or warranty.



     18.6 Attorneys’ Fees. In the event of any arbitration or litigation between the
parties, whether based on contract, tort or other cause of action or involving bankruptcy or
similar proceedings, in any way related to this Agreement, the non-prevailing party shall pay to
the prevailing party all reasonable attorneys’ fees and costs and expenses of any type, without
restriction by statute, court rule or otherwise, incurred by the prevailing party in connection
with any action or proceeding (including arbitration proceedings, any appeals and the enforcement
of any judgment or award), whether or not the dispute is litigated or prosecuted to final judgment.
The “prevailing party” shall be determined based upon an assessment of which party’s major
arguments or positions taken in the action or proceeding could fairly be said to have prevailed
(whether by compromise, settlement, abandonment by the other party of its claim or defense, final
decision, after any appeals, or otherwise) over the other party’s major arguments or positions on
major disputed issues.



     18.7 Brokers and Finders. Neither party has had any contact or dealings regarding the
Property, through any licensed real estate broker or other persons who can claim a right to a
commission or finder’s fee in connection with this transaction, except for CB Richard Ellis, Inc.,
representing Seller (the “Selling Broker”) and McKinney Advisory Group, Inc., representing Buyer
(the “Buying Broker”). The parties agree that Seller shall pay a brokerage commission to Selling
Broker, pursuant to its separate agreement with the Selling Broker. The parties agree that Buyer
shall pay any amount owing to Buying Broker pursuant to its separate agreement with the Buying
Broker. In the event that any other party claims a commission or finder’s fee in this transaction,
the party through whom the party makes its claim shall be responsible for said commission or fee
and shall indemnify the other against all costs and expenses (including reasonable attorneys’ fees)
incurred in defending against the same. This indemnification obligation shall survive the Closing
or termination of this Agreement.



     18.8 Time of the Essence. Time is of the essence of this Agreement.



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     18.9 Governing Law; Forum. This Agreement is entered into and shall be governed by
and construed in accordance with the laws of the State of California (without giving effect to its
choice of law principles).



     18.10 Interpretation. All parties have been represented by counsel in the preparation
and negotiation of this Agreement, and this Agreement shall be construed according to the fair
meaning of its language. The rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in interpreting this Agreement. Unless the
context clearly requires otherwise, (i) the plural and singular numbers shall each be deemed to
include the other; (ii) the masculine, feminine, and neuter genders shall each be deemed to include
the others; (iii) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive; (iv) “or” is
not exclusive; (v) “includes” and “including” are not limiting, absent express language to the
contrary; (vi) “days” means calendar days unless specifically provided otherwise; and (vii)
“business day” means any day other than Saturday, Sunday, or any day that is an “optional bank
holiday” under Section 7.1 of the California Civil Code, whether or not any particular bank is open
for business on such optional bank holiday.



     18.11 IRS Form 1099-S Designation. In order to comply with information reporting
requirements of Section 6045(e) of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations thereunder, the parties agree (i) to execute an IRS Form 1099-S Designation Agreement
to designate the Title Company (the “Designee”) as the party who shall be responsible for reporting
the contemplated sale of the Property to the Internal Revenue Service (the “IRS”) on IRS Form
1099-S; and (ii) to provide the Designee with the information necessary to complete Form 1099-S.



     18.12 Third Party Beneficiaries. This Agreement has been made solely for the benefit
of the parties hereto and their respective successors and permitted assigns, and nothing in this
Agreement is intended to, or shall, confer upon any other person any benefits, rights or remedies
under or by reason of this Agreement.



     18.13 Compliance With Laws. Each party shall comply with all applicable laws, rules,
regulations, orders, consents and permits in the performance of all of their obligations under this
Agreement.



     18.14 Counterparts. This Agreement may be signed in any number of counterparts with
the same effect as if the signatures to each counterpart were upon a single instrument, and is
intended to be binding when all parties have delivered their signatures to the other parties.
Signatures may be delivered by facsimile transmission or by e-mail in a portable document format
(pdf). All counterparts shall be deemed an original of this Agreement.



     18.15 Exhibits. All Recitals and Exhibits referred to in this Agreement are
incorporated herein by reference and shall be deemed part of this Agreement.



     18.16 Authority. The individuals executing this Agreement on behalf of Seller and
Buyer individually represent and warrant that he or she has been authorized to do so and has the
power to bind the party for whom they are signing.



- 34 -









 





     18.17 Exchange Transaction. Buyer agrees upon the request of Seller to cooperate with
Seller in closing all or part of this transaction as an exchange pursuant to Internal Revenue Code
Section 1031, provided that:



          (a) Buyer shall incur no additional expense or liability in connection therewith and shall not
be required to make any representations or warranties, incur any personal liabilities or hold title
to any property other than the Property;




          (b) Seller shall indemnify, protect, defend and hold Buyer harmless from any claims,
liabilities, demands, causes of action, judgments, expenses, costs and attorneys’ fees in
connection with such exchange or which result from Buyer’s compliance with this paragraph, which
obligation shall survive the Closing or termination of this Agreement; and




          (c) The Closing is not extended or delayed by the exchange and the completion of the exchange
is not a condition to Seller’s obligation to close the Escrow.




     18.18 Confidentiality. Buyer and Seller shall each maintain as confidential any and
all material or information about the other, the terms of this Agreement, and the Property, and
shall not disclose such information to any third party, except, in the case of Buyer, to Buyer’s
investment bankers, lender or prospective lenders, insurance and reinsurance firms, accountants,
attorneys, environmental and other consultants, as may be reasonably required for the consummation
of this transaction, as required by law or in connection with any arbitration or litigation between
the parties, and except, in the case of Seller, to Seller’s existing lender, attorneys, accountants
and other professional consultants, as may be reasonably required for the consummation of this
transaction, as required by law or in connection with any arbitration or litigation between the
parties. Neither party shall issue a press release or other public statement about this Agreement
or the transactions contemplated by this Agreement without the other party’s prior written consent,
unless such release or statement is required by law. Seller acknowledges that Buyer’s ultimate
parent is a publicly traded company and that Buyer is, therefore, subject to laws and regulations
regarding the disclosure and dissemination of business information. Buyer acknowledges that in the
event this Agreement terminates for any reason, Seller has the right and the obligation to disclose
to subsequent purchasers of the Property the price and material terms of this Agreement, and Buyer
agrees that such disclosure is a permitted disclosure under this Section 18.18.



[Signatures on following page]







- 35 -









 








     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Contract Date.



	 	 	 	 	 	 	 

	SELLER:	 	200 OCEANGATE, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 	 	By:	 	200 Oceangate, Inc.,
	 	 	 	 	a Delaware corporation
	 	 	 	 	its Manager
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Jeanne R. Myerson
	 

	 	 	 	 	 	President
	 
	 	 	 	 	 	 
	BUYER:	 	MOLINA CENTER LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 	 	By:	 	Molina Healthcare, Inc., a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 





NOTE: BOTH PARTIES MUST INITIAL THE AGREEMENT AT SECTIONS 3.2 AND 15.




- 36 -









 





EXHIBIT A




DESCRIPTION OF THE LAND


PARCELS 2 AND 3, AS SHOWN ON PARCEL MAP NO. 5196, IN THE CITY OF LONG BEACH, COUNTY OF LOS ANGLES,
STATE OF CALIFORNIA, FILED IN BOOK 71 PAGE 14 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY.



EXCEPT THEREFROM, ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER
LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND, TOGETHER WITH THE RIGHT TO DRILL INTO,
THROUGH AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE
THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS,
HYDROCARBON SUBSTANCES OR MINERALS FROM SAID OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE
EITHER THE SURFACE OF SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY
PURPOSE OR PURPOSES WHATSOEVER AS RESERVED BY VARIOUS DEEDS OF RECORD, AMONG THEM, BEING THE DEED
RECORDED JULY 19, 1965 AS INSTRUMENT NO. 885 IN BOOK D2981 PAGE 153 OFFICIAL RECORDS.



APN: 7278-003-035 and 7278-003-036






Exhibit A, Page 1