Document:

exv10w2

Exhibit 10.2

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

dated as of

December 9, 2010

by and between

CONEXANT SYSTEMS, INC.,

a Delaware corporation

(“Seller”)

and

UPTOWN NEWPORT LP,

a Delaware limited partnership

(“Buyer”)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1.	 	Agreement to Purchase/Sell	 	 	1	 
	2.	 	Purchase Price; Independent Consideration; Downpayment	 	 	2	 
	3.	 	Contingencies	 	 	3	 
	 

	 	(a)
	 	Buyer Contingencies
	 	 	3	 
	 

	 	(b)
	 	Seller Contingencies
	 	 	4	 
	4.	 	Escrow	 	 	5	 
	 

	 	(a)
	 	Escrow Holder
	 	 	5	 
	 

	 	(b)
	 	Opening and Close of Escrow
	 	 	5	 
	 

	 	(c)
	 	Escrow Instructions
	 	 	5	 
	 

	 	(d)
	 	Seller Deposits into Escrow
	 	 	5	 
	 

	 	(e)
	 	Buyer Deposits into Escrow
	 	 	6	 
	 

	 	(f)
	 	Delivery of Leases to Buyer Outside of Escrow
	 	 	7	 
	 

	 	(g)
	 	Authorization to Close Escrow
	 	 	7	 
	 

	 	(h)
	 	Interpleader
	 	 	8	 
	 

	 	(i)
	 	U.S. Treasury Regulations
	 	 	8	 
	 

	 	(j)
	 	Exchange Cooperation
	 	 	8	 
	5.	 	Closing Costs	 	 	9	 
	6.	 	Prorations and Adjustments	 	 	9	 
	7.	 	Possession; Jazz Lease	 	 	12	 
	 

	 	(a)
	 	Possession
	 	 	12	 
	 

	 	(b)
	 	Deed
	 	 	12	 
	 

	 	(c)
	 	Jazz Lease
	 	 	12	 
	8.	 	Representations, Warranties and Covenants of Buyer	 	 	13	 
	9.	 	Representations, Warranties and Covenants of Seller	 	 	16	 
	10	 	Seller’s Right to Studies	 	 	18	 
	11.	 	Destruction of the Improvements	 	 	19	 
	12.	 	Loss by Condemnation	 	 	19	 
	13.	 	Default of Buyer	 	 	19	 
	14.	 	Broker’s Commission	 	 	20	 
	15.	 	Seller Covenants	 	 	21	 
	16.	 	Notices	 	 	22	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	17.	 	Lease of Space Within Half Dome Building	 	 	24	 
	18.	 	El Capitan Auditorium	 	 	27	 
	19.	 	Electrical Pass-Throughs	 	 	27	 
	20.	 	Miscellaneous Provisions	 	 	29	 
	 

	 	(a)
	 	Incorporation of Prior Agreements
	 	 	29	 
	 

	 	(b)
	 	Buyer’s Right to Assign
	 	 	29	 
	 

	 	(c)
	 	Attorneys’ Fees
	 	 	29	 
	 

	 	(d)
	 	Time is of the Essence
	 	 	29	 
	 

	 	(e)
	 	Successors and Assigns
	 	 	29	 
	 

	 	(f)
	 	California Law; Choice of Forum
	 	 	30	 
	 

	 	(g)
	 	Counterparts
	 	 	30	 
	 

	 	(h)
	 	Interpretation
	 	 	30	 
	 

	 	(i)
	 	Construction
	 	 	30	 
	 

	 	(j)
	 	No Recordation
	 	 	30	 
	 

	 	(k)
	 	Business Days
	 	 	30	 
	 

	 	(l)
	 	Calculation of Days
	 	 	30	 
	 

	 	(m)
	 	Due Execution
	 	 	30	 
	 

	 	(n)
	 	Condition Precedent to Filing of Specific
Performance Action Against Seller
	 	 	31	 
	 

	 	(o)
	 	Joint and Several Obligations
	 	 	31	 
	EXHIBIT A	 	LEGAL DESCRIPTION	 	 	 	 
	EXHIBIT B	 	TENANT LEASES	 	 	 	 
	EXHIBIT C	 	[INTENTIONALLY DELETED]	 	 	 	 
	EXHIBIT D	 	[INTENTIONALLY DELETED]	 	 	 	 
	EXHIBIT E	 	FORM OF GRANT DEED	 	 	 	 
	EXHIBIT F	 	FORM OF NON-FOREIGN AFFIDAVIT	 	 	 	 
	EXHIBIT G	 	FORM OF NOTICE TO TENANTS	 	 	 	 
	EXHIBIT H-1	 	LOCATION OF HALF DOME PREMISES	 	 	 	 
	EXHIBIT H-2	 	FORM OF DATA CENTER LEASE	 	 	 	 
	EXHIBIT H-3	 	FORM OF FLEX SPACE LEASE	 	 	 	 
	EXHIBIT I	 	FORM OF BILL OF SALE	 	 	 	 
	EXHIBIT J	 	FORM OF ASSIGNMENT OF LEASES	 	 	 	 
	EXHIBIT K	 	FORM OF GENERAL ASSIGNMENT	 	 	 	 
	EXHIBIT L	 	FORM OF ENVIRONMENTAL MANAGEMENT AGREEMENT	 	 	 	 

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PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

     THIS
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(“Agreement”) is dated as of
December 9, 2010, by and between CONEXANT SYSTEMS, INC., a Delaware corporation (“Seller”), and
UPTOWN NEWPORT LP, a Delaware limited partnership (“Buyer”). Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in that certain Exclusivity Agreement
dated as of April 12, 2010, by and between Seller and SHOPOFF ADVISORS, L.P., a Delaware limited
partnership (“Shopoff’), as reinstated and amended pursuant to that certain Reinstatement and
Amendment to Exclusivity Agreement dated July 9, 2010 and as further modified by (i) that certain
Amendment No. 1 to Reinstatement and Amendment to Exclusivity Agreement dated July 30, 2010, (ii)
that certain Amendment No. 2 to Exclusivity Agreement dated October 25, 2010, (iii) that certain
Amendment No. 3 to Exclusivity Agreement dated November 19, 2010, (iv) that certain Amendment No. 4
to Exclusivity Agreement dated November 24, 2010, and (v) that certain Amendment No. 5 to
Exclusivity Agreement dated December 8, 2010 (collectively, the “Exclusivity Agreement”). Buyer is
the successor in interest to Shopoff under the Exclusivity Agreement.

1. Agreement to Purchase/Sell.

     Seller hereby agrees to sell, convey and assign to Buyer, and Buyer agrees to buy and accept
from Seller, under the terms and conditions and for the purchase price hereinafter set forth, that
certain real property located in the City of Newport Beach (the “City”), County of Orange (the
“County”), State of California, and more particularly described in Exhibit A attached hereto (the
“Land”) together with any and all rights, privileges and easements appurtenant thereto owned by
Seller including the following (hereinafter collectively referred to as the “Property”):

     (a) Seller’s fee interest in the Land and all of the improvements (the “Improvements”) located
thereon. The Improvements consist of a manufacturing building consisting of approximately 311,452
square feet and an administrative office building consisting of approximately 126,675 square feet,
and related on-site improvements.

     (b) Seller’s entire interest as landlord under certain leases and license agreements
(collectively, the “Leases”), together with all security and other deposits made thereunder
(collectively, the “Security Deposits”), which Leases exist and are in effect with respect to the
Improvements or other portions of the Property. The Leases are identified in Exhibit B attached
hereto and incorporated herein by this reference (the “Rent Schedule”).

     (c) Seller’s right, title and interest in and to any and all tangible personal property owned
by Seller and located on, at or exclusively used in connection with the Land and Improvements,
including, without limitation, any and all equipment, furniture, carpeting, draperies and curtains,
tools and supplies but excluding (x) the personal property listed in Schedule 1(c) attached hereto,
and (y)
the “Remediation Systems,” as such term is defined in the Environmental Management Agreement
(collectively, the “Excluded Property”), together with

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any replacements thereof or additions thereto made by Seller following Opening of Escrow (the
property described in this subparagraph (c), other than the Excluded Property, is hereinafter
referred to collectively as the “Personal Property”).

     (d) Seller’s right, title and interest in and to any intangible property exclusively used in
connection with the Land and Improvements, including, without limitation, (i) all construction,
engineering, consulting, architectural and other similar drawings, plans, analyses and
specifications relating to the Land (subject to the rights of third parties in and to such work
product), (ii) all existing certificates of occupancy, guaranties and warranties (express or
implied), entitlements, permits, licenses, water rights and development rights, and (iii) any
applications for entitlements, permits, licenses and the like made by or on behalf of Seller with
respect to the Land and Improvements and any fees paid in connection therewith (the property
described in this subparagraph (d) of Section 1 being herein referred to collectively as the
“Intangibles”).

2. Purchase Price; Independent Consideration; Downpayment.

     (a) The purchase price to be paid by Buyer at the Close of Escrow (as defined in Section
4) for the Property (the “Purchase Price”) is $23,500,000 and shall be paid in the following
increments at the following times:

     (i) Buyer shall deposit into Escrow (as defined in Section 4) immediately available
funds equal to that portion of the Deposit not already released to Seller pursuant to the
Exclusivity Agreement within one (1) business day following the date Buyer receives a counterpart
original of this Agreement duly executed by Seller following Buyer’s election to purchase the
Property pursuant to Section 2 of the Exclusivity Agreement. For the avoidance of doubt, (A)
$400,000 of the Deposit has already been released to Seller pursuant to the Exclusivity Agreement,
leaving the remaining
$1,600,000 of the Deposit to be deposited by Buyer pursuant to this Section 2(a)(i), and (B) this
Agreement shall not be deemed effective (notwithstanding its execution by both Parties) unless
Escrow Holder receives the sum of $1,600,000 from Buyer in immediately available funds within one
(1) business day following the date Buyer receives a counterpart original of this Agreement duly
executed by Seller. The full $2,000,000 released to Seller pursuant to the Exclusivity Agreement
and/or deposited in Escrow pursuant to the foregoing, together with any interest accrued on the
$1,600,000 deposited by Buyer with Escrow Holder, shall collectively be referred to herein as the
“Downpayment.”

     (ii) At least one business day prior to the Close of Escrow, Buyer shall deposit into Escrow
the Purchase Price (less the Downpayment and less the PLL Policy Premium Credit and the Brooktree
Capital Contribution Credit, each as defined below) in immediately available funds as well
as all sums necessary to pay Buyer’s costs, expenses and prorations in connection with this
transaction (collectively, the “Balance of the Purchase Price”).

     (b) In exchange for Seller’s agreement to enter into this Agreement, Buyer agrees that One
Hundred and 00/100 Dollars ($100.00) from the Downpayment constitutes independent

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consideration for the execution of this Agreement (“Independent Consideration”) and shall not be
refundable to Buyer (even in the event of a default by Seller).

     (c) The Deposit shall be placed in an account by Escrow Holder at a financial institution
whose deposits are federally insured upon terms and at an interest rate acceptable to Buyer;
provided, however, any such account shall place no restrictions on the ability to withdraw the
Deposit and all accrued interest on demand. All interest which accrues on the Deposit shall be
considered a part of the Downpayment. The entire Downpayment shall
become non-refundable to Buyer
when made (except if either (i) Seller fails to close Escrow in breach of this Agreement or (ii)
there occurs a failure of a condition precedent for Buyer’s benefit set forth in Section 3
below other than the condition set forth in Section 3(a)(iv)). Except as otherwise
expressly provided herein, the Downpayment shall be applied as follows: (i) in the event that Close
of Escrow occurs, the entire amount of the Downpayment shall be credited against the Purchase Price
concurrently with the Close of Escrow; (ii) in the event this Agreement is properly terminated by
Buyer pursuant to Section 3 below (other than a termination due to the failure of the
condition set forth in Section 3(a)(iv)) or by Seller pursuant to Section 17 below,
the Downpayment minus the Independent Consideration and minus Buyer’s share of Escrow cancellation
charges as provided in Section 5(e) below shall be refunded to Buyer; or (iii) in the event
of a termination of this Agreement by Seller due to a default by Buyer with respect to Buyer’s
obligations under this Agreement or due to a failure of the condition set forth in Section 3
(b)(iii) below, the Downpayment shall be non-refundable to Buyer and shall constitute the
liquidated damages of Seller pursuant to Section 13 below.

3. Contingencies.

     (a) Buyer Contingencies. Buyer acknowledges that Buyer has had the opportunity to
approved and has approved all aspects of the Property and its suitability for Buyer’s intended use,
including without limitation the physical and environmental condition of the Property, the status
of title to the Property, the Property Documents, the studies and reports obtained by Buyer during
Exclusivity Period, the current and projected net operating income of the Property, applicable
government land use entitlements, availability of utility or other services to the Property, and
any other matter which Buyer deemed necessary or appropriate. Accordingly, Buyer’s obligation to
purchase the Property is conditioned only on satisfaction of contingencies set forth below in this
Section 3(a) (collectively the “Buyer
Contingencies”). Buyer may waive any of the Buyer
Contingencies by the delivery of written notice thereof to Seller and Escrow Holder. The failure of
the Escrow to close by reason of a failure of one or more Buyer Contingences shall not constitute a
default by Seller under this Agreement.

     (i) Seller’s Obligations. As of the Close of Escrow, Seller shall have (i) made all of the
deliveries required to be made by Seller pursuant to Section 4(d) below, and (ii) complied
with its obligations under Section 15 below (excluding Seller’s obligations under
Section 15(a), compliance with which shall not be a condition to Close of Escrow).

     (ii) Title Policy. Title Company shall be irrevocably committed to issuing in favor of Buyer
as of the Close of Escrow an ALTA Owner’s Standard Coverage Policy of Title Insurance (Form
10-17-92)(the “Title Policy”) with liability in the amount of the

3

 

Purchase Price, dated the date of the Close of Escrow, issued by the Title Company, insuring that
Buyer is vested with fee simple title in the Land and any easements appurtenant thereto as shown on
the Commitment, subject only to the Permitted Exceptions and containing such endorsements as Buyer
and the Title Company may agree; provided, however, Buyer may arrange that in lieu of the Title
Policy, the Title Company shall issue an ALTA Owner’s Extended Coverage Policy of Title Insurance
(the “ALTA Policy”) with such liability and coverage. If, after Opening of Escrow and prior to
Close of Escrow, Title Company discloses to Buyer a new exception, or materially amends any
exception previously approved by Buyer during the Exclusivity Period, or materially amends the
terms under which the Title Company is willing to issue its policy of title insurance, then Buyer
shall have five business days from its receipt of such disclosure (together with legible copies of
all documents mentioned in such disclosure) to disapprove the same by written notice to Seller and
Escrow Holder; Buyer’s failure to so notify Seller shall be deemed to mean that such disclosures
are acceptable to Buyer and shall constitute additional Permitted Exceptions. Any such disapproved
disclosures shall be treated as Disapproved Title Matters and the procedures therefor set forth in
the Exclusivity Agreement shall be implemented. Seller shall cause to be released from title at or
prior to the Close of Escrow all mortgages, deeds of trust, mechanics liens and judgment liens then
encumbering the Property, as well as any delinquent real property taxes and assessments.

     (iii) Accuracy of Seller’s Representations and Warranties. Seller’s representations and
warranties set forth in Section 9 shall be true and correct in all material respects at the
Close of Escrow.

     (iv) Pollution Liability Policy. Carrier shall be irrevocably committed to issuing to Buyer
and Seller at the Close of Escrow, upon payment of the applicable premium, the Pollution Liability
Policy in the form set forth in Section 2 of that certain Amendment No. 1 to Reinstatement and
Amendment to Exclusivity Agreement dated July 30, 2010, by and between Buyer and Seller.

     (b) Seller Contingencies. Seller’s obligation to consummate the transaction
contemplated by this Agreement is subject to the satisfaction of the following conditions for
Seller’s benefit:

     (i) Buyer’s Obligations. Buyer shall have timely performed all of the obligations required by
the terms of this Agreement to be performed by Buyer.

     (ii) Accuracy of Buyer’s Representations and Warranties. Buyer’s representations and
warranties set forth in Section 8 shall be true and correct in all material respects at the
Close of Escrow.

     (iii) Pollution Liability Policy. Carrier shall be irrevocably committed to issuing to Buyer
and Seller at the Close of Escrow, upon payment of the applicable premium, the Pollution Liability
Policy in the form set forth in Section 2 of that certain Amendment No. 1 to Reinstatement and
Amendment to Exclusivity Agreement dated July 30, 2010, by and between Buyer and Seller.

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4. Escrow.

     (a) Escrow Holder. Escrow No. 436671 for the purchase and sale of the Property (the “Escrow”)
has been established at First American Title Insurance Company, 5 First American Way, Santa Ana,
California 92701, Attention: Patty Beverly (the “Escrow Holder”).

     (b) Opening
and Close of Escrow. The Escrow shall be deemed open (the
“Opening of Escrow”)
upon the date Escrow Holder receives a counterpart original of this Agreement duly executed and
initialed by both parties as indicated in the Escrow Holder acknowledgement set forth below. Escrow
shall close on or before December 22, 2010 (the “Close
of Escrow”). Escrow shall be deemed to have
closed at the time the Grant Deed is filed for record in the Official Records of the County.

     (c) Escrow Instructions. This Agreement and any standard escrow instructions of Escrow Holder
as executed by Buyer and Seller shall constitute the escrow instructions of Buyer and Seller to the
Escrow Holder. To the extent of any inconsistency between the provisions contained herein and the
provisions contained in such standard escrow instructions, the provisions contained herein shall
prevail.

     (d) Seller Deposits into Escrow. Seller shall deliver or cause to be delivered to Escrow
Holder in a timely manner to permit the closing of the transaction contemplated hereby by the Close
of Escrow, the following:

     (i) A duly executed and acknowledged Grant Deed in the form attached hereto as Exhibit E (the
“Grant Deed”);

     (ii)
A Bill of Sale (“Bill of Sale”), duly executed by Seller in the form attached hereto as
Exhibit “I”, conveying all of Seller’s right, title and interest in and to the Personal Property;

     (iii) Two (2) counterpart original assignments and assumption of leases (each an “Assignment
of Leases”), duly executed by Seller in the form attached hereto as Exhibit “J”, pursuant to which
Seller shall assign to Buyer all of Seller’s right, title and interest in and to the Leases and
Security Deposits for the Property;

     (iv) Two (2) counterpart original general assignments (each a “General Assignment”), duly
executed by Seller in the form attached hereto as Exhibit “K”, pursuant to which Seller shall
assign to Buyer all of Seller’s right, title and interest in, under and to the Intangibles;

     (v) A duly executed Non-Foreign Affidavit in the form of Exhibit “F” attached hereto (the
“Non-Foreign Affidavit”), and a California 593-C completed to indicate that no withholding is
required;

     (vi) A duly executed notice to each tenant or licensee under the Leases in the form of Exhibit
G attached hereto (the “Tenant Notices”);

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     (vii) Two (2) counterpart originals of the Data Center Lease (as defined in Section 17
below) in the form of Exhibit “H-2” attached hereto, each duly executed by Seller;

     (viii) Two (2) counterpart originals of the Flex Space Lease (as defined in Section 17
below) in the form of Exhibit “H-3” attached hereto, each duly executed by Seller;

     (ix) Two (2) counterpart originals of the Environmental Management Agreement in the form of
Exhibit “L” attached hereto (“Environmental Management Agreement”), each duly executed by Seller;

     (x) A counterpart original Memorandum of Environmental Management Agreement in the form
attached to the Environmental Management Agreement as Exhibit B (“Memorandum”), duly executed and
acknowledged by Seller;

     (xi) Any other executed or other documents reasonably required by the Title Company to
consummate this transaction, including without limitation a commercially reasonable owner’s
affidavit with respect to the existence or absence of potential
mechanics liens arising from
construction at the Property occurring prior to Close of Escrow.

     (e) Buyer Deposits into Escrow. Buyer shall deliver or cause to be delivered to Escrow Holder
in a timely manner to permit the closing of the transaction contemplated hereby by the Close of
Escrow, the following:

     (i) The Balance of the Purchase Price;

     (ii) Two (2) counterpart original Assignments of Leases, duly executed by
Buyer;

     (iii) Two (2) counterpart original General Assignments, duly executed by Buyer;

     (iv) Two (2) counterpart originals of the Data Center Lease, each duly executed by Buyer;

     (v) Two (2) counterpart originals of the Flex Space Lease, each duly executed by Buyer;

     (vi) Two (2) counterpart originals of the Environmental Management Agreement, each duly
executed by Buyer;

     (vii) A counterpart original of the Memorandum, duly executed and acknowledged by Buyer;

     (viii) A duly executed preliminary change of ownership statement (the “PCO Statement”);

6

 

     (ix) A copy of the Natural Hazard Disclosure Statement signed as acknowledged by Buyer;

     (x) An “Authorization to Bind” the Pollution Liability Policy in the form prescribed by Marsh
USA Inc., duly executed by Buyer; and

     (xi) Any other executed or other documents reasonably required by the Title Company to
consummate this transaction.

     (f) Delivery of Leases to Buyer Outside of Escrow. At or immediately after the Close of
Escrow, Seller shall deliver to Buyer, to the extent same are in the possession of Seller, Seller’s
original executed Leases (to the extent originals are not available, Seller shall deliver copies in
Seller’s possession or control).

     (g) Authorization to Close Escrow. Provided that Escrow Holder shall not have received written
notice from Buyer or Seller of the failure of any conditions precedent or of the termination of the
Escrow, Buyer and Seller have deposited into the Escrow the items required by this Agreement and
the Title Company can and will issue the Title Policy, concurrently with the Close of Escrow,
Escrow Holder shall:

     (i) Deliver to Buyer the Grant Deed by causing it to be recorded in the Official Records of
the County (“Official Records”) and requesting that it be mailed to Buyer after it has been
recorded;

     (ii) Record the Memorandum in the Official Records immediately following recordation of the
Grant Deed and prior to the recordation of any mortgage, deed of trust or other recordable document
delivered to Escrow Holder in connection with the Escrow.

     (iii) Deliver to Seller or to Seller’s order the Purchase Price, less (A) all amounts to be
paid by Seller hereunder, (B) Seller’s share of liabilities and/or expenses to be prorated by
Escrow Holder to Seller’s account under Section 6, (C) the PLL Policy Premium Credit (if
applicable), the Brooktree Capital Contribution Credit and the amounts to be credited against the
Deposit pursuant to the Exclusivity Agreement (totaling $400,000), and (D) all amounts paid by
Escrow Holder or the Title Company in satisfaction of liens and encumbrances on the Property in
order to put title to the Property into the state required by this Agreement;

     (iv) Deliver to the Carrier the premium for the Pollution Liability Policy and deliver to
Marsh USA, Inc. (Attn: Charity O’Sullivan) the executed Authorization to Bind;

     (v) Deliver executed counterpart originals of the Assignment of Leases, General Assignment,
Data Center Lease, Flex Space Lease and Environmental Management Agreement to each of the Parties;

     (vi) Deliver to Buyer the Bill of Sale and Non-Foreign Affidavit;

7

 

     (vii) Deliver by certified mail the Tenant Notices to each of the tenants or licensees under
the Leases;

     (viii) Cause the Title Policy to be issued to Buyer by Title Company;

     (ix) Cause the PCO Statement to be delivered to the Tax Assessor for the County or with any
other governmental official or agency as required by applicable law; and

     (x) Deliver to Seller the copy of the Natural Hazard Disclosure Statement as signed and
acknowledged by Buyer.

     (h) Interpleader. Buyer and Seller (each a “Party” and collectively the “Parties”) expressly
agree that if the Parties give the Escrow Holder contradictory instructions, the Escrow Holder
shall have the right at its election to file an action in interpleader requiring the Parties to
answer and litigate their several claims and rights between themselves and the Escrow Holder is
authorized to deposit with the clerk of the court all documents and funds held in the Escrow. In
the event such action is filed, the Parties each agree to pay one-half of the total of Escrow
Holder’s cancellation charges and costs, expenses and reasonable attorney’s fees which Escrow
Holder is required to expend or incur in the interpleader action, the amount thereof to be fixed
and judgment therefor to be rendered by the court; provided, however, if the court determines that
the instructions given to Escrow Holder by one of the Parties were improper, then such Party shall
bear all of such costs and expenses. Upon the filing of such an action, Escrow Holder shall
thereupon be fully released and discharged from all obligations to perform further any duties or
obligations otherwise imposed by the terms of the Escrow.

     (i) U.S. Treasury Regulations. The purchase and sale of the Property is the sale of
“reportable real estate” within the meaning of U.S. Treasury Regulations Section 1.6045-4 (the
“Regulation”). Escrow Holder is the “real estate reporting person” within the meaning of the
Regulation and shall make all reports to the federal government as required by the Regulation.

     (j) Exchange Cooperation. Either Party may substitute an intermediary (the “Intermediary”) to act
in place of such Party with regards to the sale or purchase of the Property. An Intermediary shall
be designated in writing by the Party designating the Intermediary (the “Designating Party”) to the
other Party (the “Non-Designating Party”) and Escrow Holder. Upon designation of an Intermediary
and upon the Intermediary’s written assumption of the Designating Party’s obligations hereunder,
the Intermediary shall be substituted for the Designating Party in the Escrow as the buyer or
seller of the Property. The Non-Designating Party agrees to accept the Purchase Price and all other
required performance under this Agreement from the Intermediary and to render its performance of
all of its obligations to the Intermediary. The Non-Designating Party agrees that performance by
the Intermediary will be treated as performance by the Designating Party, and the Designating Party
agrees that the Non-Designating Party’s performance to the Intermediary will be treated as
performance to the Designating Party. The Designating Party unconditionally guarantees the full and
timely performance by the Intermediary of each and every one of the representations, warranties,
indemnities, obligations and undertakings of the Designating Party pursuant to this Agreement. As
such guarantor, the Designating Party shall be treated as a primary obligor with

8

 

respect to such representations, warranties, indemnities, obligations and undertakings, and, in the
event of breach thereof, the Non-Designating Party may proceed directly against the Designating
Party on this guarantee without the need to join the Intermediary as a party to the action against
the Designating Party. The Designating Party unconditionally waives any defense that it might have
as guarantor that it would not have if it had made or undertaken such representations, warranties,
indemnities, obligations and undertakings directly. If either of the Parties or both undertakes to
designate an Intermediary pursuant to this paragraph, (i) in no event shall the Designating Party,
as applicable, be deemed to have given the Non-Designating Party any advice regarding the
tax-deferred nature of this transaction or any other advice regarding the treatment of this
transaction under federal or state tax laws and both of the Parties shall rely solely on the advice
of their own legal and tax advisors; (ii) any Non-Designating Party shall not bear any additional
expenses from the Designating Party’s decision to designate Intermediary; (iii) there shall not be
any delay in the Close of Escrow by reason of such designation; and (iv) neither Buyer nor Seller
shall be required to take title to any real or personal property other than the Property.

5. Closing Costs.

     (a) Seller shall pay (i) any documentary transfer tax on the Grant Deed, and (ii) 50% of all
escrow fees of the Escrow Holder.

     (b) Buyer shall pay (i) the fees for recording the Grant Deed and Memorandum, (ii) 50% of all
escrow fees of the Escrow Holder, (iii) the costs of mailing the Tenant Notices, and (iv) the
premium for the Pollution Liability Policy.

     (c) Seller shall pay the base premium for the Title Policy and the cost of any endorsements
issued to insure over Disapproved Title Matters which Seller has agreed to cure pursuant to the
Exclusivity Agreement; Buyer shall pay the cost of all other title endorsements. If Buyer elects to
obtain the ALTA Policy as provided below, Buyer shall be solely responsible for any difference in
premium or charge between the Title Policy and the ALTA Policy and for all survey and other costs
associated with such ALTA Policy. Buyer shall also be responsible for the additional premium for
any separate lender’s policy of title insurance.

     (d) Any other costs of the Escrow or of closing pertaining to this transaction not otherwise
expressly allocated between Buyer and Seller under this Agreement shall be apportioned in the
manner customary in the County.

     (e) Notwithstanding the foregoing provisions of this Section 5, if the Escrow fails to
close for any reason other than the breach of this Agreement by one or both of the Parties, Escrow
cancellation costs shall be borne equally by Buyer and Seller. Otherwise, the Party who breached
this Agreement first shall bear all such cancellation costs.

6. Prorations and Adjustments.

     (a) At the Close of Escrow, the following items shall be prorated as of the date of the Close
of Escrow with all items of income and expense for the Property being borne by, and accruing to,
Buyer from and after (but including) the date of the Close of Escrow: Tenant Receivables (as
defined below) and other income and rents; fees and assessments; prepaid

9

 

expenses and obligations under service contracts; accrued operating expenses; taxes and
assessments; and any assessments by private covenant for the then-current calendar year of the
Close of Escrow. Specifically, the following shall apply to such prorations:

     (i) Taxes. If taxes and assessments for the year of the Close of Escrow are not known or
cannot be reasonably estimated as of the Close of Escrow, taxes and assessments shall be prorated
based on taxes and assessments for the year prior to the Close of Escrow and an adjustment shall be
made pursuant to Section 6(b) below when the amount of the taxes and assessments is known.
For the purpose of prorating the tax bill(s) for the Property, any portion of such tax bill(s)
constituting personal property taxes shall be borne exclusively by Seller and shall not be prorated
between the parties to the extent such personal property taxes relate to Excluded Property; in
connection therewith, Seller and Buyer shall separately certify to Escrow Holder what portion of
the personal property taxes shown on such tax bill(s) constitutes taxes on Excluded Property and
what portion constitutes taxes on the Personal Property being conveyed to Buyer at Close of Escrow
(the parties agreeing that any taxes on Personal Property shown on such tax bill(s) shall be
prorated between the parties in the same manner in which real property taxes are prorated).

     (ii) Utilities. Buyer and Seller shall take all steps necessary to effectuate the transfer of
all utilities to the name of Buyer as of the Close of Escrow. Seller shall endeavor to have all
utility meters read as of the date of Close of Escrow. To the extent utility readings cannot be
taken as of the date of Close of Escrow, Buyer and Seller shall reasonably estimate what the
readings would likely have been as of the Close of Escrow based upon (i) an actual reading, (ii)
the date and time the actual reading occurred and (iii) such information as may be available to
Seller and Buyer relating to daily usage rates.

     (iii) Tenant Receivables. Rents due from tenants under Leases and operating expenses and/or
taxes payable by tenants under Leases (collectively, “Tenant Receivables”) shall be apportioned on
the basis of the period for which the same is payable and if, as and when collected, as follows:

               (1) Buyer shall apply rent, license fees and other income and payments received from tenants
under Leases after the Close of Escrow in the following order of priority: (A) first, to payment of
the current Tenant Receivables then due for the month in which the Close of Escrow occurs, which
amount shall be apportioned between Buyer and Seller as of the Close of Escrow as set forth in this
Section 6 (with Seller’s portion thereof to be delivered to Seller); (B) second, to Tenant
Receivables applicable to the period of time after the month in which Close of Escrow occurs, which
amount shall be retained by Buyer; and (C) thereafter, to Tenant Receivables applicable to the
period of time before the month in which the Close of Escrow occurs, which amount shall be
delivered to Seller (collectively, “Uncollected Tenant Receivables”). Buyer shall not be obligated
to attempt to collect Uncollected Tenant Receivables for the benefit of Seller. Seller may,
however, pursue collection efforts (including without limitation instituting collection actions)
against tenants with Uncollected Tenant Receivables. Any sums received by one party to which the
other party is entitled shall be
remitted to the other party within five (5) business days after receipt thereof less
reasonable,

10

 

actual costs and expenses of collection, including reasonable attorneys’ fees, court costs and
disbursements, if any. Seller expressly agrees that if Seller receives any amounts after the Close
of Escrow which are attributable, in whole or in part, to any period after the Close of Escrow,
Seller shall remit to Buyer for proration hereunder all such sums received by Seller within five
(5) business days after receipt thereof. The provisions of this
Section 6(a)(iii)(1) shall
survive the Close of Escrow.

               (2) If the final reconciliation or determination of operating expenses and/or taxes due under
the Leases shows that a net amount is owed by Seller to Buyer, Buyer’s prorata portion shall be
paid by Seller to Buyer within ten (10) business days of such final determination under the Leases
as the case may be. If the final determination of operating expenses and/or taxes under the Leases
shows that a net amount is owed by Buyer to Seller, Buyer shall, within ten (10) business days of
such final determination, remit to Seller Seller’s portion of operating expenses and/or taxes for
the period up to and including the Close of Escrow, if, as and when received. Notwithstanding
anything contained herein to the contrary, if the operating expenses and/or taxes payable by a
tenant under its Lease are subject to a cap, such cap shall be prorated based upon the number of
days Seller is the owner of the Property during the applicable period. In the event Seller’s
collection of operating expenses and/or taxes from such tenant during such period is in excess of
the prorated cap, the reconciliation statement shall reflect a payment to Buyer in the amount of
such excess which Seller shall make concurrent with the finalization of the applicable
reconciliation statement. The provisions of this Section 6(a)(iii)(2) shall survive the
Close of Escrow.

               (3) Notwithstanding anything to the contrary contained herein, the determination of Tenant
Receivables under the Jazz Leases shall be based upon the latest quarterly reconciliations under
the Jazz Leases then available as of the Close of Escrow. Seller and Buyer shall cooperate with one
another after the Close of Escrow in preparing the quarterly reconciliations required under the
Jazz Leases for the period which includes the Close of Escrow.

     (b) Final Adjustment After Close of Escrow. If final bills are not available or cannot be
issued prior to the Close of Escrow for any item being prorated above, then Buyer and Seller shall
allocate such items on a fair and equitable basis at the Close of Escrow, with final adjustments to
be made as soon as reasonably possible after the Close of Escrow; provided, however, such final
adjustment shall be made by the date which is twelve (12) months after the Close of Escrow.
Payments in connection with the final adjustment shall be due within thirty (30) days of written
notice. All such rights and obligations shall survive the Close of Escrow. In addition to the
foregoing, if at any time before or after following the Close of Escrow Seller receives from the
County of Orange a refund of real property taxes for the Property applicable to the period prior to
the Close of Escrow, whether due to a decrease in the assessed value of the Property or otherwise,
Seller agrees to promptly notify Buyer of same and remit such refund directly to the tenants of the
Property but only to the extent such tenants are entitled to receive the benefit of such refund
under the terms of their leases. Notwithstanding the immediately preceding sentence, Seller shall
not be obligated to deliver any portion of such tax refund to tenants of the Property unless and
until Buyer shall have delivered to Seller and Seller shall have approved (which approval shall not
be unreasonably withheld, conditioned or delayed) a written accounting of the amounts to which each
tenant is entitled together with sufficient backup documentation to enable Seller to verify such
entitlement.

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     (c) Security Deposits. All security deposits not applied by Seller (and interest thereon
if required by law or contract) shall be transferred or credited to Buyer at the Close of Escrow.
Non-cash forms of security deposits (letters of credit and the like) shall also be so assigned at
the Close of Escrow. As of the Close of Escrow, Buyer shall assume all of Seller’s obligations
related to the security deposits, but only to the extent they are credited or. transferred to
Buyer. Any other deposits of tenant funds (e.g., deposits held for tenant improvement costs and/or
reserves, if any) held and not applied by Seller shall also be so transferred or credited at the
Close of Escrow.

     (d) Miscellaneous Credit for Portion of Premium for Environmental Insurance. At the Close of
Escrow, Buyer shall be entitled to a miscellaneous credit against the Purchase Price (and not as a
reduction to the Purchase Price itself) equal to fifty percent (50%) of the premium for the
Pollution Liability Policy, but in no event shall the amount of such credit exceed $100,000 (“PLL
Policy Premium Credit”). Notwithstanding the immediately preceding sentence, Buyer shall not
receive a PLL Policy Premium Credit in the event Seller had disapproved the form of Pollution
Liability Policy offered by the Carrier in its final quote, in a writing delivered to Buyer prior
to expiration of the Exclusivity Period.

     (e) Miscellaneous Credit for Conexant Capital Contribution to TSG-Newport,
L.P. At the Close of Escrow, Buyer shall be entitled to a credit against the Purchase Price (and
not as a reduction to the Purchase Price itself) equal to $1,900,000 (“Brooktree Capital
Contribution Credit”); provided, however, with the written approval of Seller the Brooktree
Capital Contribution Credit may be increased to not more than $2,200,000. Effective as of the Close
of Escrow, Seller’s affiliate Brooktree Broadband Holding, Inc., a Delaware corporation
(“Brooktree”) shall be deemed to have made a capital contribution equal to the Brooktree
Capital Contribution Credit into TSG-Newport L.P., a Delaware limited partnership (“TSG
Newport”) for which Brooktree shall receive at the Close of Escrow a limited partnership
interest in TSG Newport as set forth in the TSG Partnership Agreement (defined below). TSG Newport
is a limited partner in Buyer as set forth in that certain Limited Partnership Agreement of Uptown
Newport LP dated December 9, 2010 (the “Uptown Newport Partnership Agreement”). As used
herein, the term “TSG Partnership Agreement” means that certain TSG — Newport, L.P. Limited
Partnership Agreement dated December 9, 2010.

7. Possession; Jazz Lease.

     (a) Possession. Buyer shall be placed in possession of the Property as of the Close of Escrow,
subject to the rights of tenants under Leases and the rights of any parties disclosed to Buyer as
part of the Property Documents.

     (b) Deed. Title to the Property shall be conveyed to Buyer by the Grant Deed.

     (c) Jazz Lease. For purposes of complying with those provisions of the leases between Seller
and Newport Fab, LLC for portions of the Property (collectively, the “Jazz Leases”)
respecting the release of seller from liability thereunder following the Close of Escrow, upon
the Close of Escrow Buyer shall be deemed to have assumed responsibility to cure any continuing
defaults of Seller under the Jazz Leases existing as of the Close of Escrow. Upon

12

 

request of Seller, Buyer agrees to confirm such assumption in a writing to be delivered to
Jazz. Buyer’s obligations under this subparagraph (c) shall survive the Close of Escrow.

8. Representations, Warranties and Covenants of Buyer.

     (a) Buyer hereby represents, warrants and covenants to Seller that the following matters are
true and correct as of the execution of this Agreement and also will be true and correct as of the
Close of Escrow:

     (i) Buyer is a limited partnership duly formed, validly existing and in good standing in the
State of Delaware. By the Close of Escrow, Buyer shall be qualified to do business in the State of
California.

     (ii) This Agreement and all the documents to be executed and delivered by Buyer to Seller
pursuant to the terms of this Agreement, (i) have been or will be duly authorized, executed and
delivered by Buyer, (ii) are or will be legal, valid and binding obligations of Buyer as of the
date of their respective executions, (iii) are or will be enforceable in accordance with their
respective terms (except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of
contracting parties generally), and (iv) do not, and will not at, the Close of Escrow, violate any
provisions of any agreement to which Buyer is a party. Buyer shall deliver to Seller, within thirty
(30) days after Opening of Escrow, a set of resolutions of the board of directors of Buyer
confirming the due authorization, execution and delivery of this Agreement by Buyer and the
person(s) authorized to execute any agreement or other instrument to be delivered in connection
with this Agreement, which resolutions shall be certified by the corporate secretary of Buyer.

     (iii) To Buyer’s actual knowledge, Buyer is not included on the List of Specially Designated
Nationals and Blocked Persons maintained by the Office of Foreign Assets Control (“OFAC”), or
resides in, or is organized or chartered under the laws of, (A) a jurisdiction that has been
designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act
(defined below) as warranting special measures due to money laundering concerns or (B) any foreign
country that has been designated as non-cooperative with international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as the Financial
Action Task Force on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization continues to concur. As
used herein, the term “Patriot Act” means the International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as
reauthorized by the USA Patriot Improvement and Reauthorization Act of 2005. As used herein, the
term “actual knowledge” as it relates to Buyer shall mean the actual knowledge (without
investigation or the duty to conduct investigation) of William Shopoff.

13

 

     (b) Buyer hereby agrees and acknowledges that, except to the extent of Seller’s obligations
under the Environmental Management Agreement, (i) it is buying the Property on an “AS-IS” basis;
(ii) it has made its own investigations and inspections of the Property, including, without
limitation, the physical aspects of the Property and the Property’s compliance with all laws
applicable to the Property and the Property’s fitness for its current or intended use or
development (including without limitation the availability of future governmental permits or
entitlements for the Property); (iii) in connection with its investigations and inspections of the
Property it has contracted or had the opportunity to contract with certain advisors and
consultants, including, but not limited to, environmental consultants, engineers and geologists, to
conduct such environmental, hazardous material, geological, soils, hydrology, seismic, endangered
species, archeological, physical, structural, mechanical and other inspections of the Property as
Buyer deemed to be necessary; (iv) it has approved the reports of such advisors and consultants;
(v) it is relying solely on such reports and its own investigations as to the Property, its
condition and other characteristics and compliance with laws; and (vi) except for the
representations and warranties set forth in Section 9, it is not making the purchase of the
Property in reliance upon any statements or representations, express or implied, made by Seller or
its agents or brokers, as to the condition of or characteristics of the Property, its fitness for
use for any particular purpose, or the Property’s compliance with any zoning or other rules,
regulations, laws or statutes applicable to the Property, or the uses permitted on or the
development requirements for or any other matters relating to the Property. Except as set forth in
Section 9 and in the Environmental Management Agreement, Seller has no liability nor
responsibility to Buyer in connection with the matters set forth in this Section 8(b),
including, without limitation, any liability under any laws, rules, regulations or ordinances
regulating the environment, Hazardous Materials (defined below), or human health and safety, or any
latent or patent defects. Without limiting the foregoing, Buyer has not relied on any comparable
sales or rents provided by Seller or any of its agents or representatives with respect to the value
or cash flow of the Property, nor has Buyer relied on any value or cash flow projections, lease
abstracts, tenant information or general information provided by Seller or any of its agents or
representatives regarding the Property’s submarket or the availability of entitlements to redevelop
the Property.

As used herein, the term “Hazardous Materials” means any chemicals, materials, compounds or
substances, which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
reproductive toxicant, mutagenic, reactive, or otherwise hazardous or defined as, listed or
included in the definition of “hazardous substance,” “hazardous materials,” “hazardous wastes,”
“universal waste,” “bio-hazardous wastes,” “medical wastes,” “radioactive wastes,” “pharmaceutical
wastes,” “commingled wastes,” “toxic substances,” “toxin,”, “pollutant”, “contaminant,” or words of
similar usage and import under any federal, applicable state or local statute, regulation, rule or
ordinance or amendments thereto, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et. seq.) and/or the Resource
Conservation and Recover Act (42 U.S.C. §§ 6901 et. seq.), including petroleum or any petroleum
products, constituents, additives, or derivatives thereof; radioactive materials; radionuclide;
radon gas; mercury; asbestos and asbestos-containing materials; mold (including without limitation
materials governed by California’s Toxic Mold Protection Act (Cal. Health & Safety Code
§§26100-26156; stats 2001, ch 584)); polychlorinated biphenyls and any transformers or other
equipment that contains dielectric fluids containing polychlorinated biphenyls; and any other
chemical, material, waste or substance, the use,

14

 

handling, storage, treatment, disposal, release, discharge of, or exposure to which is prohibited,
limited or otherwise regulated.

     (c) NEITHER SELLER NOR ANY OTHER PARTY ACTING (OR PURPORTING TO ACT) ON BEHALF OF SELLER, HAS
MADE ANY (AND SELLER HEREBY DISCLAIMS ANY) REPRESENTATION OR WARRANTY OF ANY KIND OF NATURE
CONCERNING THE EXISTENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, UNDER OR ABOUT THE PROPERTY (OR
OTHER PARCELS IN PROXIMITY THERETO), INCLUDING WITHOUT LIMITATION (1) AIR QUALITY OR WATER
CONDITIONS, OR (2) MATTERS DISCLOSED BY THE ENVIRONMENTAL REPORTS INCLUDED IN THE PROPERTY
DOCUMENTS OR OTHERWISE MADE AVAILABLE TO OR OBTAINED BY BUYER (THE MATTERS STATED THEREIN BEING
REFERRED TO AS THE “ENVIRONMENTAL DISCLOSED MATTERS”). EXCEPT AS OTHERWISE PROVIDED IN THE
ENVIRONMENTAL MANAGEMENT AGREEMENT, BUYER SHALL TAKE TITLE TO THE PROPERTY SUBJECT TO ANY AND ALL
HAZARDOUS MATERIALS WHICH MAY EXIST AT, UNDER OR ABOUT THE PROPERTY (OR OTHER PARCELS IN PROXIMITY
THERETO), WHETHER KNOWN OR UNKNOWN, DISCLOSED OR UNDISCLOSED, INCLUDING, WITHOUT LIMITATION, THE
ENVIRONMENTAL DISCLOSED MATTERS, AND ANY AND ALL CLAIMS AND/OR LIABILITIES RELATING THERETO IN ANY
MANNER WHATSOEVER (ANY OF THE FOREGOING DESCRIBED IN THIS SUBPARAGRAPH (C) BEING REFERRED TO AS
“ENVIRONMENTAL CONDITIONS”).

     (d) BUYER ACKNOWLEDGES THAT BUYER’S OPPORTUNITY FOR INSPECTION AND INVESTIGATION OF THE
PROPERTY (AND OTHER PARCELS IN PROXIMITY THERETO) HAS BEEN ADEQUATE TO ENABLE BUYER TO MAKE BUYER’S
OWN DETERMINATION WITH RESPECT TO ENVIRONMENTAL CONDITIONS. FURTHERMORE, EXCEPT WITH RESPECT TO THE
NON-RELEASED MATTERS (AS DEFINED BELOW), BUYER’S CLOSING HEREUNDER SHALL BE DEEMED TO CONSTITUTE AN
EXPRESS WAIVER OF THE RIGHT OF BUYER AND ITS SUCCESSORS AND ASSIGNS TO SUE SELLER AND OF BUYER’S
RIGHT TO CAUSE SELLER TO BE JOINED IN AN ACTION BROUGHT UNDER ANY FEDERAL, STATE OR LOCAL LAW,
RULE, ACT OR REGULATION NOW EXISTING OR HEREAFTER ENACTED OR AMENDED WHICH PROHIBITS OR REGULATES
THE USE, HANDLING, STORAGE, TRANSPORTATION OR DISPOSAL OF HAZARDOUS MATERIALS OR WHICH REQUIRES
REMOVAL OR REMEDIAL ACTION WITH RESPECT TO SUCH HAZARDOUS MATERIALS, SPECIFICALLY INCLUDING, BUT
NOT LIMITED TO THE STATUTES SET FORTH ABOVE IN THE DEFINITION OF HAZARDOUS MATERIALS.

     (e) Section 25359.7 of the California Health and Safety Code requires owners of nonresidential
property who know or have reasonable cause to believe that a release of a hazardous material has
come to be located on or beneath real property to provide written notice of that condition to a
buyer of said real property. Buyer acknowledges that Seller has disclosed to Buyer all matters
described in the Environmental Disclosed Matters. By Buyer’s execution of this Agreement, Buyer (i)
acknowledges Buyer’s receipt of the foregoing notice given pursuant to Section 25359.7 of the
California Health and Safety Code, (ii) has become or will become fully aware prior to the Close of
Escrow of the matters described in the Environmental Disclosed

15

 

Matters, a copy of which Buyer has received and has reviewed; and (iii) as of Close of Escrow and
after receiving advice of Buyer’s legal counsel, waives any and all rights or remedies whatsoever,
express, implied, statutory or by operation of law, Buyer may have against Seller and arising under
Section 25359.7 of the California Health and Safety Code.

     (f) Effective on the Close of Escrow, and except for the Non-Released Matters (which shall not
be affected by the following release), Buyer hereby releases Seller from and waives all claims
against Seller, at law or in equity, whether known or unknown, suspected or unsuspected which Buyer
has or may have, arising out of or related to Environmental Conditions, the value, cashflow or
physical condition of the Property, its compliance with applicable law, the status or availability
of entitlements for the Property, or its fitness for Buyer’s intended purpose. As used herein, the
term “Non-Released Matters” means, collectively, (i) those matters specifically set forth in
Section 9, (ii) Seller’s obligations under the Environmental Management Agreement, and (iii) third
party claims made against Buyer by claimants who hold no direct or indirect ownership or possessory
interest in the Property (and have never held such an interest) which arise out of the existence of
Hazardous Materials released from the Property into the groundwater, whether or not such Hazardous
Materials are identified in the Property Documents.

     (g) With respect to the foregoing release by Buyer contained in this Agreement, Buyer
expressly waives the provisions of California Civil Code § 1542, which provides as follows:

“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.”

BUYERS
INITIALS JMA

     (h) Each covenant, agreement, representation and warranty contained in this Section
8 shall survive the Close of Escrow or termination of this Agreement.

9.
Representations, Warranties and Covenants of Seller. Subject in all respects to the
matters set forth in Section 8 above, Seller hereby represents, warrants and covenants to
Buyer that the following matters are true and correct as of the execution of this Agreement and
will also be true and correct as of the Close of Escrow:

     (a) Seller is a corporation duly formed, validly existing and in good standing under the laws
of the State of Delaware.

     (b) This Agreement and all the documents and items to be executed and delivered by Seller to Buyer
pursuant to the terms of this Agreement, (i) have been or will be duly authorized, executed and
delivered by Seller, (ii) are or will be legal, valid and binding obligations of Seller as of the
date of their respective executions, (iii) are or will be enforceable in accordance with their
respective terms (except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of
contracting parties generally); and (iv) do not and will not, at the Close of Escrow, violate
any

16

 

provisions of any agreement to which Seller is a party. Seller shall deliver to Buyer, within
thirty (30) days after Opening of Escrow, a set of resolutions of the board of directors of Seller
confirming the due authorization, execution and delivery of this Agreement by Seller and the
person(s) authorized to execute any agreement or other instrument to be delivered in connection
with this Agreement, which resolutions shall be certified by the corporate secretary of Seller.

     (c) To Seller’s actual knowledge, the Property Documents are true and correct in all material
respects as of the date of such document; provided, however, that Seller makes no representation or
warranty and shall have no liability or responsibility for (i) any inaccuracy in the square
footages recited for the Improvements herein or in any Property Document, and (ii) anything set
forth in any third party reports which are included in the Property Documents.

     (d) To Seller’s actual knowledge, and except as otherwise disclosed to Buyer in writing, no
condemnation, eminent domain or other legal action is pending or threatened in writing against the
Property, nor has Seller any actual knowledge of any assessments affecting the Property other than
as set forth in the Commitment.

     (e) To Seller’s actual knowledge, and except as otherwise disclosed to Buyer in writing, there
are no violations of any covenants, conditions or restrictions applicable to the Property, and
Seller has received no written notice or complaint with respect to any such violation or alleged
violation.

     (f) To Seller’s actual knowledge: (i) there are no leases or tenancy agreements affecting the
Property, or any portion thereof, other than the Leases delivered to Buyer and reflected in the
Rent Schedule; (ii) the information set forth in said Rent Schedule is true and correct in all
material respects as of the date thereof; (iii) there are no amendments, modifications or
supplements to the Leases, whether oral or written, except those disclosed to Buyer in the Property
Documents; (iv) Seller has not received any rentals or security or other deposits thereunder other
than as set forth in the Leases; and (v) there are no current material defaults under the Leases.

     (g) There is not currently in effect any unrecorded agreement entered into by Seller or by
which Seller is bound by which a third party has been granted any parking rights at or with respect
to the Property except for the Leases and except as otherwise disclosed to Buyer in the Property
Documents.

     (h) Except as otherwise disclosed to Buyer in the Property Documents, Seller has not received
any written correspondence challenging the validity of any easement appurtenant to the Property as
shown on the ALTA survey made available to Buyer as part of the Property Documents.

     (i) To Seller’s actual knowledge, Seller is not included on the List of Specially Designated
Nationals and Blocked Persons maintained by OFAC, or resides in, or is organized or chartered
under the laws of, (A) a jurisdiction that has been designated by the U.S. Secretary of the
Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money
laundering concerns or (B) any foreign country that has been designated as non-cooperative with
international anti-money laundering principles or procedures by an

17

 

intergovernmental group or organization, such as the Financial Action Task Force on Money
Laundering, of which the United States is a member and with which designation the United States
representative to the group or organization continues to concur.

     For purposes of the foregoing representations and warranties, “Seller’s actual knowledge”
shall mean the actual knowledge of Jake Cisneros without duty of inquiry and without being charged
with record or constructive knowledge.

     Notwithstanding anything else contained in this Agreement, if any representation or warranty
made by Seller hereunder is true and correct as of the execution of this Agreement but is not true
and correct as of the Close of Escrow, so long as the same has not occurred by reason of Seller’s
willful act or omission, then Seller shall not be liable to Buyer in damages by reason thereof and
Buyer’s sole remedy shall be the following: (i) waive Buyer’s closing condition set forth in
Section 3(a)(iii) and close Escrow or (ii) terminate the Agreement and receive the
Downpayment minus the Independent Consideration. Notwithstanding anything to the contrary contained
in this Agreement, Buyer agrees that any claim(s) brought by Buyer against Seller after the Close
of Escrow based on an alleged breach of a representation and warranty by Seller must (1) be filed
in the appropriate forum pursuant to this Agreement within twelve (12) months from the Close of
Escrow, and (2) aggregate to more than $100,000.00. In addition and without limitation, (x) the
maximum amount of liability that Seller shall have under any circumstance for any and all surviving
obligations under this Agreement (including, without limitation, any obligation arising out of any
representation or warranty made by Seller in this Agreement and any liability under any instrument
or document delivered by Seller at or in connection with the Close of Escrow but excluding the
Excluded Claims as defined below) shall not exceed an amount equal to $1,000,000 in the aggregate
(the “Maximum Seller Liability Cap”), and (y) Buyer shall in no event be entitled to seek punitive
damages on account of any such surviving obligation of Seller under this Agreement or other Seller
obligation arising out of an instrument or document delivered by Seller at or in connection with
the Close of Escrow. Notwithstanding the immediately preceding sentence, the Maximum Seller
Liability Cap shall not apply to the following (collectively the “Excluded Claims”): (i) Seller’s
obligations and indemnification liabilities under the Environmental Management Agreement and (ii)
Seller’s obligation to pay base rent to Buyer under the Half Dome Leases.

10. Seller’s Right to Studies. If Escrow fails to close for any reason other than the
breach of this Agreement by Seller, Buyer shall immediately deliver to Seller and Seller shall be
entitled to retain, at no cost or expense to Seller, all surveys, environmental audits, reliance
letters from outside consultants and other third-party reports obtained by Buyer with respect to
the Property or any part thereof (collectively, the “Buyer’s Data”), and Seller shall be authorized
to use and distribute any and all Buyer’s Data as it shall elect in its sole and absolute
discretion. Notwithstanding the immediately preceding sentence, Buyer’s Data shall not include and
Buyer may elect not to turnover to Seller any land plans, conceptual plans or sketches relating to
Buyer’s proposed redevelopment of the Property and any of Buyer’s work papers, so long as such
excluded material has not been submitted to the City for review. All information delivered to
Seller pursuant to this Section 10 is delivered without any representation or warranty of
Buyer as to the completeness or accuracy thereof.

18

 

11. Destruction of the Improvements.

     If
prior to the Close of Escrow the Improvements are damaged or destroyed, whether by fire or
other casualty, then Seller shall promptly notify Buyer of such damage or destruction and the cost
to repair the same, as reasonably estimated by Seller. In the event such estimated cost is in
excess of $100,000, Buyer may terminate the Escrow and this Agreement by giving Seller written
notice of its intent to do so within three days after the date Buyer receives actual notice of such
damage or destruction. Upon such termination, neither Party shall have any further rights or
obligations hereunder, and the Downpayment shall be returned to Buyer minus the Independent
Consideration and minus Buyer’s share of Escrow cancellation costs determined pursuant to
Section 5(e). In the event such estimated cost of repair is $100,000 or less, or in the
event Buyer elects not to terminate this Agreement, then the Escrow and this Agreement shall remain
in full force and effect and Seller shall assign to Buyer, as a condition precedent to the Close of
Escrow, all of Seller’s right, title and interest in and to any insurance proceeds or claims
therefor with respect to such damage or destruction. Additionally, in such latter case, Seller
shall pay to Buyer, by way of a credit against the Purchase Price, an amount equal to the lesser of
the estimated cost of repairing the damage or destruction as reasonably determined by Seller or any
deductible amount applicable to such damage or destruction under any casualty insurance coverage
maintained by Seller with respect to the Property.

12. Loss by Condemnation.

     In the event that prior to the Close of Escrow, the Property, or any material part thereof, is
subject to a taking by a public authority, then Buyer shall have the right, exercisable by giving
notice to Seller within 15 days after receiving written notice of such taking, either (a) to
terminate this Agreement, in which case neither Party shall have any further rights or obligations
hereunder, and the Downpayment shall be returned to Buyer minus the Independent Consideration and
minus Buyer’s share of Escrow cancellation costs determined pursuant to Section 5(e), or
(b) to accept the Property in its then condition and proceed to close this transaction, and to
receive an assignment of all of Seller’s rights to any condemnation awards payable by reason of
such taking. If Buyer elects to proceed under clause (b) above, Seller shall not compromise, settle
or adjust any claims to such awards without Buyer’s prior written consent, which consent shall not
be unreasonably withheld. Seller agrees to give Buyer prompt notice of any taking of the Property
promptly after Seller receives notice of the same.

13. Default of Buyer.

     (a) PRIOR TO ENTERING INTO THIS TRANSACTION, BUYER AND SELLER HAVE BEEN CONCERNED WITH THE
FACT THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY SELLER IN THE EVENT OF BUYER’S DEFAULT UNDER THIS
AGREEMENT. WITH THE FLUCTUATION IN LAND VALUES, THE UNPREDICTABLE STATE OF THE ECONOMY AND OF
GOVERNMENTAL REGULATIONS, THE FLUCTUATING MARKET FOR REAL ESTATE LOANS OF ALL TYPES, AND OTHER
FACTORS WHICH DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY, IT IS REALIZED BY THE
PARTIES THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN
WITH ANY DEGREE OF

19

 

CERTAINTY THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED BY SELLER IN THE EVENT OF BUYER’S DEFAULT
UNDER THIS AGREEMENT. THEREFORE, IN THE EVENT BUYER DEFAULTS IN ITS OBLIGATION TO CLOSE THE
PURCHASE OF THE PROPERTY, THE DOWNPAYMENT SHALL BE RELEASED TO AND RETAINED BY SELLER AS LIQUIDATED
DAMAGES WHICH (SUBJECT TO PARAGRAPH (b) OF THIS SECTION 13) SHALL BE SELLER’S SOLE REMEDY
HEREUNDER BY REASON OF SUCH DEFAULT. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE
AMOUNT OF THE DOWNPAYMENT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES IN THE
EVENT OF SUCH DEFAULT. BUYER AND SELLER EXPRESSLY AGREE THAT THE FOREGOING LIQUIDATED DAMAGES
PROVISION IS NOT INTENDED TO DEFINE OR LIMIT ANY INDEMNITY LIABILITY OF BUYER TO SELLER UNDER THIS
AGREEMENT OR ANY PROVISION CONTAINED IN THIS AGREEMENT FOR THE PAYMENT OF ATTORNEYS FEES.

SELLER’S
INITIALS: MP BUYER’S INITIALS: JMA

     (b) If Buyer shall default in its obligations hereunder and shall fail to cooperate fully in
the immediate cancellation of Escrow and the release to Seller of the Downpayment as liquidated
damages (if not previously released) then, notwithstanding the Parties’ agreement to limit damages
to liquidated damages, and in addition to all other rights and remedies, the following provisions
will obtain: (i) in the event Buyer agrees to cancellation of the Escrow but not to the release of
the Downpayment as liquidated damages (if not previously released), then the prevailing party in
any dispute shall be entitled to recover its costs of enforcement, including reasonable attorneys
fees (if Seller is the prevailing party in such dispute, Seller shall also be entitled to the
Downpayment as liquidated damages); and (ii) in the event Buyer shall fail or refuse to agree to
the cancellation of the Escrow or shall commence an action for specific performance and/or file a
notice of lis pendens, then the prevailing party in any such dispute shall be entitled to recover
its actual damages (and Seller shall not be limited to liquidated damages), plus costs of
enforcement including reasonable attorneys fees.

14. Broker’s Commission.

     In connection with the transaction contemplated by this Agreement, at the Close of Escrow,
Seller shall pay a broker’s commission to Jones Lang LaSalle pursuant to separate written
agreement. Said commission shall be paid through Escrow at the close thereof. With the exception of
such commission, Buyer and Seller each represent to the other that they have not entered into any
agreement or incurred any obligation which might result in the obligation to pay a sales or
brokerage commission or finder’s fee with respect to this transaction. Buyer and Seller each agree
to indemnify, defend, protect and hold the other harmless from and against any and all losses,
claims, damages, costs or expenses (including attorneys’ fees) which the other may incur as a
result of any claim made by any person to a right to a sales or brokerage commission or finder’s
fee in connection with this transaction to the extent such claim is based, or purportedly based, on
the acts or omissions of Seller or Buyer, as the case may be. The obligations of Buyer and Seller
under this Section 14 shall survive the Close of Escrow.

20

 

15. Seller Covenants. Seller agrees as follows:

     (a) From and after the Opening of Escrow until the Close of Escrow or earlier termination of
this Agreement, Seller will provide or cause to be provided substantially such services with
respect to the Property that have been provided by or on behalf of Seller in the past in accordance
with Seller’s customary practice. For the avoidance of doubt, Buyer acknowledges and agrees that
Seller shall not be obligated to make any replacements, alterations or improvements to the Property
or otherwise make any capital expenditures on account of the Property prior to Close of Escrow.

     (b) Seller shall not knowingly encumber the Project from and after the Opening of Escrow until
the Close of Escrow or earlier termination of this Agreement, except as otherwise permitted under
this Agreement and except for liens which are dischargeable upon the payment thereof out of
Seller’s proceeds from the Escrow.

     (c) From and after the Opening of Escrow until the Close of Escrow or earlier termination of
this Agreement and except as otherwise provided in this Section 15(c) and in Section
19(b) below, Seller shall not amend any existing Lease or enter into a new Lease covering any
portion of the Property (each a “Lease Transaction”) nor shall Seller enter into a service contract
for the Property (each a “Service Contract”) which is not otherwise terminable at or prior to the
Close of Escrow, in each case without obtaining the prior written consent of Buyer, which consent
shall not be unreasonably withheld and which consent shall be deemed given if notice of disapproval
is not received by Seller within five (5) business days of delivering a request for consent to
Buyer. Notwithstanding the immediately preceding sentence, Seller may extend the term of any
existing Lease which expires within six (6) months after Opening of Escrow for up to twelve (12)
months after such expiration date without obtaining the prior written consent of Buyer so long as
Seller promptly notifies Buyer of such Lease Transaction and provides Buyer with a copy of the
executed amendment; provided, however, that any change in the base rent during such extension
period must be based upon Seller’s reasonable determination of fair market rent. In addition,
Seller may amend the Jazz Leases to obtain a reduction in the portion of electricity costs
allocable to the landlord thereunder subject to obtaining Buyer’s prior written consent to such
amendment, which consent shall not be unreasonably withheld. Seller shall be responsible for any
broker commissions, tenant improvement costs and other expenses incurred in connection with a Lease
Transaction (collectively, “Leasing Costs”) which are associated with any Lease Transaction entered
into prior to the Opening of Escrow. Buyer shall be responsible for a prorata share of any Leasing
Costs which are associated with any Lease Transaction entered into after the Opening of Escrow
which has been approved by Buyer, based upon the percentage of the term of such Lease Transaction
occurring on and after the Close of Escrow (with Seller responsible for the balance).

     (d) At or prior to Close of Escrow, Seller shall terminate all existing Service Contracts
entered into by Seller at Seller’s sole cost except (excluding utilities and waste disposal
accounts in Seller’s name, which Buyer shall place in its own name at the Close of Escrow). If any
Service Contract covers both the Property and areas located outside the Property, Seller shall have
the right to amend such Service Contract prior to the Close of Escrow (without the necessity of
obtaining Buyer’s consent) so that such Service Contract no longer covers the Property at Close of
Escrow. Buyer acknowledges that Seller currently reimburses

21

 

Jazz for the cost of a service contract for maintenance of the central plant equipment at the Jazz
premises and that such obligation shall pass to Buyer at the Close of Escrow as successor in
interest to Seller under the Jazz Leases.

     (e) Seller shall continue to use its commercially reasonable efforts to obtain and deliver to
Buyer, prior to the Close of Escrow, any Tenant Estoppel Certificates which Seller has been unable
to obtain during the Exclusivity Period (Buyer hereby acknowledging that Seller’s failure to obtain
executed Tenant Estoppel Certificates from all of the tenants under Leases (or from any individual
tenant under a Lease) shall not be a condition to Buyer’s obligation to close Escrow or otherwise
subject Seller to liability to Buyer on account thereof).

16. Notices.

     All notices, requests and demands to be made hereunder to the Parties hereto shall be made in
writing to the addresses set forth below and shall be given by any of the following means: (a)
personal service; (b) electronic communication, including facsimile or e-mail transmission
((provided, however, that notice is also given by one of the other means set forth
in Subparagraph 15(a), (c), or (d)); (c) certified or registered mail,
postage prepaid, return receipt requested; or (d) courier or delivery service. Such addresses may
be changed by notice to the other Parties given in the same manner as provided above. Any notice,
demand or request sent pursuant to either subsection 15(a), (b) or (d)
hereof shall be deemed received upon the actual delivery thereof, and, if sent pursuant to
subsection 15(c) shall be deemed received five (5) days following deposit in the mail.
Refusal to accept delivery of any notice, request or demand shall be deemed to be delivery thereof.
If any Party hereto is not an individual, notice may be made on any officer, general partner or
principal thereof. Notice to any one co-Party shall be deemed notice to all co-Parties.

	 	 	 	 	 

	 

	 	To Seller:
	 	Conexant Systems, Inc.
	 

	 	 	 	4000 MacArthur Blvd.
	 

	 	 	 	Newport Beach, California 92660
	 

	 	 	 	Attention: Mark Peterson, Esq., General Counsel
	 

	 	 	 	E-mail Address: Mark.Peterson@conexant.com
	 

	 	 	 	Facsimile No: (949) 483-5536
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Manatt, Phelps & Phillips, LLP
	 

	 	 	 	695 Town Center Drive, 14th Floor
	 

	 	 	 	Costa Mesa, California 92626
	 

	 	 	 	Attention: Steven Edwards, Esq.
	 

	 	 	 	E-mail Address: sedwards@manatt.com
	 

	 	 	 	Facsimile No.: 714-371-2550
	 
	 	 	 	 
	 

	 	To Buyer:
	 	Shopoff Advisors, L.P.
	 

	 	 	 	8951 Research Drive
	 

	 	 	 	Irvine, California 92618
	 

	 	 	 	Attention: William A. Shopoff, President, CEO and Chairman
	 

	 	 	 	E-mail Address: bshopoff@shopoff.com
	 

	 	 	 	Facsimile No: 949-417-1399

22

 

	 	 	 	 	 

	 

	 	 	 	And to:
	 
	 	 	 	 
	 

	 	 	 	DRA Advisors LLC
	 

	 	 	 	220 East 42nd Street, 27th Floor
	 

	 	 	 	New York, NY 10017
	 

	 	 	 	Facsimile: (212) 697-7403
	 

	 	 	 	Attention: Jean Marie Apruzzese
	 
	 	 	 	 
	 

	 	 	 	And to:
	 
	 	 	 	 
	 

	 	 	 	DRA Advisors LLC
	 

	 	 	 	220 East 42nd Street, 27th Floor
	 

	 	 	 	New York, NY 10017
	 

	 	 	 	Facsimile: (212) 697-7403
	 

	 	 	 	Attention: Daniel Goldman, Director, Acquisitions
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Gromet & Associates
	 

	 	 	 	114 Pacifica, Suite 250
	 

	 	 	 	Irvine, CA 92618
	 

	 	 	 	Attention: Stevan J. Gromet, Esq.
	 

	 	 	 	E-mail Address: sjgromet@grometlaw.com
	 

	 	 	 	Facsimile No: (949) 261-1818
	 
	 	 	 	 
	 

	 	 	 	And to:
	 
	 	 	 	 
	 

	 	 	 	Morrison & Foerster LLP
	 

	 	 	 	425 Market Street
	 

	 	 	 	San Francisco, California 94105
	 

	 	 	 	Attention: Craig B. Etlin, Esq.
	 

	 	 	 	Reference: 23573 (222)
	 

	 	 	 	Facsimile: (415) 268-7522
	 
	 	 	 	 
	 

	 	To Escrow Holder:
	 	First American Title Insurance Company
	 

	 	 	 	5 First American Way
	 

	 	 	 	Santa Ana, California 92701
	 

	 	 	 	Attention: Patty Beverly
	 

	 	 	 	E-mail Address: pbeverly@firstam.com
	 

	 	 	 	Facsimile No: (714) 200-0519

23

 

17. Lease of Space Within Half Dome Building. Effective as of the Close of Escrow, Seller
shall lease from Buyer (i) approximately 5,923 rentable square feet located within the building
commonly known as 4311 Jamboree Road (“Half Dome
Building”) and designated on Exhibit H-1 attached
hereto as the “Data Center” (“Data Center Space”), and (ii) the areas designated as “Generator/Haz
Waste Storage,” “Shipping/Receiving,” “Housekeeping Stock Room,” “Facilities Storage” and “G-Tem
Lab” on Exhibit H-1 attached hereto, consisting of 7,703 rentable square feet (collectively, the
“Flex Space Premises”), on the following terms:

     (a) The Data Center Space shall be covered by a lease in the form of Exhibit “H-2” attached
hereto (the “Data Center Lease”) and the Flex Space Premises shall be covered by a separate lease
in the form of Exhibit “H-3” attached hereto (“Flex Space Lease”).

     (b) The Data Center Space and Flex Space Premises shall be leased in their current “as is”
condition as of the Close of Escrow.

     (c) Base rent for the Data Center Space shall be $13.50 per square foot per month full service
gross but subject to adjustment in accordance with subparagraph (g) below. Base rent for the Flex
Space Premises shall be $0.75 per square foot per month full service gross. There shall be no
pass-throughs of common area charges, taxes, insurance, utilities or any other operating or
ownership costs incurred by Buyer as landlord in connection with either Half Dome Lease.

     (d) The initial term of the Flex Space Lease shall be three (3) years commencing on the Close
of Escrow. Seller shall have two (2) options to extend the term of Flex Space Lease for a period of
twelve (12) months in each instance; provided, however, that the final extension option applicable
to the Flex Space Lease shall extend the term thereof to March 24, 2015 (the expiration date of
Conexant’s lease covering the West Tower). Each such option may be exercised by delivering written
notice to Buyer at least ninety (90) days prior to expiration of the term (as the same may have
been previously extended). The initial term of the Data Center Lease shall expire on March 24,
2015, with no extension options.

     (e) Buyer shall have the option to terminate either or both Half Dome Leases (or, in the
alternative and from time to time, reduce the size of the premises covered by the Flex Space Lease)
by giving Seller at least twelve (12) months prior written notice in each instance (each a
“Termination Notice”); provided, however, that no such Termination Notice may be delivered to
Seller prior to the second anniversary of the Close of Escrow (i.e., neither Half Dome Lease may be
terminated by Buyer prior to the third anniversary of the Close of Escrow). In the event Buyer
elects to reduce the size of the premises covered by the Flex Space Lease as provided in this
subparagraph, Buyer shall be responsible for separately demising the newly-configured premises at
its sole cost and expense.

     (f) Seller shall have the option to terminate the Flex Space Lease (or, in the alternative and
from time to time, reduce the size of the premises covered by the Flex Space Lease) by giving Buyer
at least ninety (90) days prior written notice in each instance. In the event Seller elects to
reduce the size of the premises covered by the Flex Space Lease as provided in this subparagraph,
Seller shall be responsible for separately demising the newly-configured premises at its sole cost
and expense. Seller shall also have the option to terminate the Data Center Lease by giving Buyer a
Termination Notice at least twelve (12) months prior to

24

 

the effective date of such termination; provided, however, that no such Termination Notice may
be delivered to Buyer prior to the second anniversary of the Close of Escrow (i.e., the Data Center
Lease may not be terminated by Seller prior to the third anniversary of the Close of Escrow).

     (g) Seller shall also have the option to reduce the size of the premises covered by the Data
Center Lease to not less than 3,500 rentable square feet (which shall in any event include the
square footage currently occupied by Jazz as well as the support rooms consisting of 767 square
feet identified on Exhibit H-1 attached hereto, hereinafter referred to as the “Support Rooms”) by
giving Seller at least thirty (30) days prior written notice (which notice shall identify the
location of such reduced premises) and provided that such reduction shall be completed by not later
than the date which is one hundred eighty (180) days following the Close of Escrow. In the event
Conexant elects to reduce the size of the Data Center premises as provided above, (i) Base rent
under the Data Center Lease shall be increased to $14.50 per square foot per month full service
gross (based upon the square footage of such reduced premises), and (ii) Seller will permit a
future tenant occupying a portion of the Data Center Space (“Future Data Space Tenant”) to share in
the use of Seller’s equipment located therein (classified herein as Excluded Property) so long as
(x) both Conexant and such Future Data Space Tenant have entered into an agreement reasonably
acceptable to Conexant which obligates such Future Data Space Tenant to reimburse Conexant for its
prorata share of all maintenance and operating costs incurred by Conexant with respect to such
shared equipment and (y) Conexant shall reasonably determine that the power requirements of such
new tenant do not exceed the then-available capacity of the support equipment taking into
consideration the requirements of Conexant and Jazz. In the event Seller elects to reduce its
premises within the Data Center and Buyer thereafter enters into a lease or other form of occupancy
agreement with a Future Data Space Tenant for any remaining portion of the Data Center, (i) the
Support Rooms shall thereupon be considered common area and shall not thereafter constitute a part
of Seller’s premises in the Data Center, in which event monthly rent for the Data Center shall be
adjusted accordingly (at the same rate as is provided in this subparagraph (g)) to reflect the
reduced square footage of such premises, and (ii) the Generator
Room (as depicted on Exhibit H-1
attached hereto, consisting of 586 rentable square feet) shall thereupon be considered common area
and shall not thereafter constitute a part of the Flex Space Premises, in which event monthly rent
under the Flex Space Lease shall be adjusted accordingly (at the same rate as is provided in
subparagraph (c) above with respect to the Flex Space Premises) to reflect the reduced square
footage of such premises.

     (h) Seller shall have the right to sublease a portion of the Data Center Space to Jazz on such
terms as Seller may elect, all without notice to or the requirement to obtain the consent of Buyer.
Buyer and Seller shall cooperate after the Close of Escrow to obtain a signed amendment to the Jazz
Lease covering the Half Dome Building (“Jazz/Half Dome Lease”) which has the effect of removing the
from such Lease the portion of the Data Center currently leased by Jazz (consisting of
approximately 748 square feet), so that a separate sublease can be executed between Seller and Jazz
with respect to such portion of the Data Center Space. Pending execution of such amendment and new
sublease and so long as the Data Center Lease remains in full force and effect, Seller shall (i)
lease the Data Center Space subject to Jazz’s rights under the Jazz/Half Dome Lease, and (ii)
observe and perform those obligations of Buyer under the Jazz/Half Dome Lease (as successor
landlord) arising from and after the Close of Escrow which pertain directly and exclusively to the
portion of the Data Center currently leased

25

 

by Jazz. For the avoidance of doubt, Seller does not and shall not be deemed to have assumed any of
the landlord’s obligations under Jazz/Half Dome Lease with respect to the balance of the premises
covered thereby (i.e., excluding the Data Center Space) on account of Seller’s obligations pursuant
to the immediately preceding sentence. All rent payable by Jazz on account of the Data Center Space
is hereby assigned by Buyer to Seller effective as of the Close of Escrow; in connection therewith,
(x) Buyer shall remit and pay over to Seller any such rental received by Buyer promptly upon
receipt by Buyer, (y) at or promptly following the Close of Escrow, Buyer shall notify Jazz in
writing that such rental is to be paid directly to Seller, and (z) Buyer shall cooperate with
Seller and use commercially reasonable efforts to collect the rent payable by Jazz on account of
the Data Center Space on Seller’s behalf pending execution of such amendment and new sublease by
Jazz. Buyer acknowledges that some of the Excluded Property is located in the Data Center and shall
remain the property of Seller following Close of Escrow. Upon request of either party, the other
party will execute a separate writing in commercially reasonable form which confirms the terms set
forth in this subparagraph (h).

     (i) Seller shall have an option (“Option”), exercisable only within the sixty (60) day period
immediately following the Close of Escrow (“Option Period”), to lease any remaining space in the
Half Dome Building including without limitation any space surrendered by Jazz on or after the Close
of Escrow (as applicable, the “Option Space”). The Option Space shall be offered to Seller at $0.75
per square foot per month full service gross, for a term co-terminus with the then-remaining term of
the Flex Space Lease and otherwise on the same terms and conditions as are set forth in the Flex
Space Lease. In order to validly exercise the Option, Seller must notify Buyer in writing (“Option
Notice”) of such exercise prior to expiration of the Option Period, which Option Notice shall (i)
specify the portions of the Option Space which Seller desires to lease (“Optioned Space”), (ii)
specify the effective date of the lease of the Optioned Space (which effective date shall not be
later than the date which is 30 days after the date of such Option Notice), and (iii) be
accompanied by two (2) counterpart originals of an amendment to the Flex Space Lease each duly
executed by Seller (“Flex Space Lease Amendment”) which modifies the definition of the premises
covered thereby to include the Optioned Space and provides for an effective date of such
modification consistent with the effective date specified in such Option Notice. Provided that the
Option has been timely and validly exercised and the form of Flex Space Lease Amendment is
consistent with this subparagraph (i) and is otherwise in a commercially reasonable form, Buyer
shall execute the Flex Space Lease Amendment and return a signed counterpart original to Seller
within five (5) business days following Buyer’s receipt of the Flex Space Lease Amendment. In any
event, Buyer shall not enter into any lease or other form of occupancy agreement respecting the
Optioned Space (or any portion thereof) during the Option Period.

     (j) The parties agree to enter into amendments to the Half Dome Leases from time to time to
reflect the changes to the monthly rent, premises size and other modifications contemplated by this
Section 17, so long as the terms of each such amendment are consistent with the terms
contained herein and the amendment is otherwise in a commercially reasonable form.

     (k) Buyer acknowledges that Seller is currently occupying 17,089 rentable square feet within
the Half Dome Building (not including the Data Center Space). Prior to the Close of Escrow, Seller
will vacate a total of 4,584 rentable square feet within the Half Dome Building

26

 

(not including any of the Data Center Space), surrendering such space to Buyer at Close of
Escrow in good condition and repair (normal wear and tear excepted), broom clean and free of all
personal property of Seller currently located therein. As of the Close of Escrow, Seller will
continue to occupy within the Half Dome Building approximately 12,505 rentable square feet as shown
on Exhibit H-1 attached hereto, comprised of (i) 7,703 rentable square feet constituting the Flex
Space Premises which Seller will leaseback from Buyer at Close of Escrow, and (ii) an additional
4,802 rentable square feet (collectively, the “Give Back Space”). In order to effect an orderly
transition out of the Give Back Space, Buyer hereby grants to Seller a license to occupy the Give
Back Space for a thirty (30) day period commencing on the Close of Escrow for no additional
consideration; provided, however, that if and only if Seller fails to vacate and surrender the Give
Back Space to Buyer by the end of such thirty (30) day license period: (i) the license granted
hereby shall be deemed revoked, (ii) the Flex Space Premises shall be deemed to include the Give
Back Space (Seller, however, retaining the option to reduce the size of the premises covered by the
Flex Space Lease as provided in subparagraph f) above), (iii) Seller shall be responsible for
payment of base rent for the Give Back Space at the rate specified in subparagraph (c) above
retroactive to the Close of Escrow and (iv) the installment of base rent due and payable by Seller
on February 1, 2011 on account of the Flex Space Premises shall include an amount necessary to
compensate Buyer for the base rent due and payable on the Give Back Space during the period
commencing on the Close of Escrow and ending January 31, 2011. The Give Back Space shall be
surrendered to Buyer in good condition and repair (normal wear and tear excepted), broom clean and
free of all personal property of Seller currently located therein.

     (I) This Section 17 and the obligations of each party hereunder shall survive the
Close of Escrow.

18. EI Capitan Auditorium. From and after the Close of Escrow, Seller shall have the right,
at no additional cost (except as otherwise provided below), to use the auditorium currently located
within the building commonly known as 4321 Jamboree (“El Capitan Building”) for company meetings
and other company functions (e.g., Christmas holiday parties) provided that (i) Seller reserve each
date with Buyer at least 30 days in advance, (ii) Seller may not use such auditorium more than
twelve (12) times in any given calendar year (each time for no more than one day), (iii) Buyer
cannot guarantee that any specific date desired by Seller will be available and Seller understands
that its use of the auditorium is subject to availability, (iv) Seller shall at all times maintain
a policy of commercial general liability insurance with a combined single limit not less than
$2,000,000 and naming Buyer as an additional insured, (v) Seller shall reimburse Buyer for its
direct out of pocket costs incurred as a result of Seller’s use of such auditorium (e.g., cost of
cleanup crew), and (vi) Seller shall indemnify, defend and hold harmless Buyer from and against any
and all claims, losses, damages and expenses, including without limitation attorneys fees and cost,
arising from the use of such auditorium by Seller or its employees, agents and invitees. Seller’s
rights and duties contained in this Section shall survive the Close of Escrow until the El Capitan
Building is demolished or until such auditorium is otherwise converted by Buyer into a use other
than as an auditorium.

19. Electrical Pass-Throughs. The parties acknowledge that electrical power is currently
supplied to the Property via an electrical substation located at the most southerly point of the
Land and that there currently exists a grid of underground electrical conduit maintained within an

27

 

existing easement appurtenant to the Property (labeled as Parcel C in the legal description of the
Land attached hereto as Exhibit A) and created pursuant to Section 1.08 of that certain Reciprocal
Grant of Easements recorded November 6, 1972 in Book 10413, Page 573 (as amended by that certain
First Amendment to Reciprocal Grant of Easements recorded May 7, 1974 in Book 11137, Page 1004 and
by subsequent quitclaim deeds recorded in Book 11137, Page 1018 and Book 11137, Page 1022, all of
Official Records of Orange County) (the “Electrical Easement”). The electrical grid lying within
the Electrical Easement includes an extension running from a substation at the rear of the Half
Dome Building to the office towers leased by Seller and commonly known 4000 MacArthur Boulevard
(“Conexant Towers”) (located immediately to the south of the Land). Southern California Edison
(“SCE”) invoices Jazz on a monthly basis (the existing SCE account for the Property being held in
Jazz’s name) for the entire cost of the electricity supplied to the Property, including without
limitation electricity utilized within the portion of the Half Dome Building not occupied by Jazz.
Pursuant to the Jazz Lease (specifically, Paragraph 4 of that certain Third Amendment to Lease
dated September 1, 2006, with respect to the Jazz Lease covering the El Capitan Building,
hereinafter referred to as the “Jazz/El Capitan Lease”), Seller and Jazz have agreed to apportion
such monthly electrical bill by allocating a fixed 89.2% of each such bill to Jazz and allocating
the remaining 10.8% to Seller (regardless of actual usage by each respective party). On or about
June 6, 2010, both Conexant Towers were disconnected from the shared electrical grid and are not
drawing electricity from such grid as of the Opening of Escrow.

     (a) Any electricity invoice received by Buyer from Jazz after the Close of Escrow which covers
a period prior to the Close of Escrow shall be apportioned between the parties so that Seller is
responsible for 100% of that portion of the bill attributable to any period prior to the Close of
Escrow and Buyer shall be responsible for the remainder. Seller agrees to reimburse Buyer for
Seller’s share of each such electricity bill within thirty (30) days following presentation of an
invoice from Buyer together with the backup documentation provided by Jazz to Buyer as successor
landlord.

     (b) Prior to the Close of Escrow, Seller shall have the continuing right to negotiate directly
with Jazz for a reduction hi the landlord’s share of such monthly electricity bill (on account of
the disconnection of the Conexant Towers from the shared electrical grid); provided, however, that
Buyer shall be allowed to participate in such discussions and no modification of the landlord’s
contribution percentage shall be made by Seller unless the same as been approved by Buyer in
writing (which approval shall not be unreasonably withheld). Buyer shall be deemed to have approved
a landlord contribution percentage of 2.8% with respect to monthly electrical bills. Buyer agrees
to cooperate with Seller in connection with Seller’s efforts to obtain a reduction in the
landlord’s share of such monthly electricity bill.

     (c) At the request of either party which may be made at any time after the Close of Escrow,
the parties shall jointly execute and cause to be acknowledged and recorded an agreement (in
commercially reasonable form and content) partially terminating that portion of the Electrical
Easement currently located on the real property which includes the Conexant Towers.

28

 

20. Miscellaneous Provisions.

     (a) Incorporation of Prior Agreements. This Agreement and the Exclusivity Agreement contain
the entire understanding of Buyer and Seller with respect to the subject matter hereof, and
supersedes all prior or contemporaneous written or oral agreements and understandings between the
Parties hereto pertaining to any such matter. No provision of this Agreement may be amended,
modified or supplemented or added to except by an agreement in writing, expressly stating that such
agreement is an amendment of this Agreement, signed by the Parties to this Agreement or their
respective successors in interest.

     (b) Buyer’s Right to Assign. Buyer shall have no right to assign or transfer any of its rights
or responsibilities hereunder to any person or entity without Seller’s prior written consent which
may be given or withheld in Seller’s sole and absolute discretion. Any attempt by Buyer to assign
or transfer any of its rights or responsibilities hereunder without Seller’s written consent shall
be void. Notwithstanding the foregoing, Buyer shall have the right to (i) assign this Agreement to
any of Buyer’s affiliates (provided, however, that Buyer shall not be released from any of its
obligations under this Agreement) and/or (ii) nominate any person to take title to the Property at
the Close of Escrow. As used in this Agreement, the term “affiliate” means a person or entity
controlling, controlled by or under common control with the person or entity in question, and
“control” and person or correlated words means the effective ability to control management
decisions of the person or entity in question.

     (c) Attorneys’ Fees. If either Party commences an action against the other to interpret or
enforce any of the terms of this Agreement or because of the breach by the other Party of any of
the terms hereof, the losing Party shall pay to the prevailing Party reasonable attorneys’ fees,
costs and expenses incurred in connection with the prosecution or defense of such action, whether
or not the action is prosecuted to a final judgment. For the purpose of this Agreement, the terms
“attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to the
Parties hereto, which may include in-house counsel and printing, photocopying and other expenses,
air freight charges, and fees billed for law clerks, paralegals, librarians and others not admitted
to the bar but performing services under the supervision of an attorney. The terms “attorneys’
fees” or “attorneys’ fees and costs” shall also include, without limitation, all such fees and
expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings, and whether or
not any action or proceeding is brought with respect to the matter for which said fees and expenses
were incurred. The term “attorney” shall have the same meaning as the term “counsel.”

     (d) Time is of the Essence. Time is of the essence of this Agreement and the performance of
each term in which a time period is given for such performance.

     (e) Successors and Assigns. Subject to any limitations on the rights of Buyer to transfer its
interest in this Agreement set forth in Section 20(b), this Agreement shall be binding
upon and inure to the benefit of each of the Parties hereto and to their respective transferees,
successors, and assigns. In connection therewith, Buyer agrees to (i) provide actual notice of
Seller’s continuing rights under Sections 17 through 19 above to any successor in interest
to Buyer as to all or any portion of the Property, so long as (and to the extent that) such
continuing rights have not sooner been extinguished in accordance with this Agreement at the time
of a

29

 

transfer of the Property or any portion thereof to such successor, and (ii) provide in the
agreement of transfer to such transferee that such transferee shall similarly provide actual notice
of such continuing rights to its immediate successor in interest.

     (f) California Law; Choice of Forum. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of California, without giving effect to any “conflict of
law” rules of such state. Buyer and Seller each acknowledge and agree that the Superior Court of
the State of California in and for the County and the associated federal and appellate courts shall
have exclusive jurisdiction to hear and decide any dispute, controversy or litigation regarding the
enforceability or validity of this Agreement or any portion thereof.

     (g) Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which, when taken together, shall constitute one and the
same instrument.

     (h) Interpretation. Wherever possible, each provision of this Agreement shall be interpreted
in such a manner as to be valid under applicable law, but, if any provision of this Agreement shall
be invalid or prohibited thereunder, such invalidity or prohibition shall be construed as if such
invalid or prohibited provision had not been inserted herein and shall not affect the remainder of
such provision or the remaining provisions of this Agreement. Section headings of this Agreement
are solely for convenience of reference and shall not govern the interpretation of any of the
provisions of this Agreement.

     (i) Construction. The language in all parts of this Agreement shall be in all cases construed
simply according to its fair meaning and not strictly against the party who drafted such language.

     (a) Exhibits. All Exhibits attached hereto are incorporated herein by reference and made a
part hereof for all purposes.

     (j) No Recordation. This Agreement shall not be recorded or filed in the public records of any
jurisdiction by either Party. Any attempt to do so shall be a breach of this Agreement.

     (k) Business Days. As used in this Agreement, a “business day” shall mean a day other than
Saturday, Sunday or any day on which banking institutions in the City of Los Angeles are authorized
by law or other governmental action to close. All other references to “days” in this Agreement
shall refer to calendar days.

     (l) Calculation of Days. If the date for any approval or disapproval or other notice by either
Buyer or Seller under this Agreement falls on a day other than a business day, then such date shall
automatically be extended to the next succeeding business day.

     (m) Due Execution. Each person whose signature is affixed hereto in a representative capacity
represents and warrants that he is authorized to execute the Agreement on behalf of and to bind the
Party on whose behalf his signature is affixed.

30

 

     (n) Condition Precedent to Filing of Specific Performance Action Against Seller. As a
condition precedent to the filing of any specific performance action by Buyer against Seller on
account of a breach or alleged breach by Seller of its obligations to sell the Property to Buyer
pursuant to this Agreement (an “Action”), Buyer shall deposit with Escrow Holder prior to the
commencement of such Action, in immediately available funds, the sum of $750,000 (the “Lawsuit
Deposit”). The Lawsuit Deposit (i) shall not constitute a part of Seller’s liquidated damages in
the event of a default by Buyer under this Agreement; and (ii) shall remain in Escrow during the
pendency of the Action(s) and shall not be refunded to Buyer except in accordance with this
subparagraph. In the event final judgment shall have been entered in such Action in Buyer’s favor
(after exhaustion of all applicable appeals and the expiration of all applicable appeal periods),
the Lawsuit Deposit shall be applied toward the Purchase Price at Close of Escrow and Buyer shall
receive a credit against the Purchase Price for the attorneys fees and costs awarded to Buyer as
part of such Action. However, in the event the Action is dismissed or judgment entered in Seller’s
favor (after exhaustion of all applicable appeals and the expiration of all applicable appeal
periods), or in the event judgment in such action is entered in Buyer’s favor but Buyer thereafter
fails to close escrow, then in any such case Escrow Holder shall disburse to Seller out of the
Lawsuit Deposit an amount equal to Seller’s attorneys fees and costs incurred in such Action (in
addition to releasing the Downpayment to Seller as liquidated damages pursuant to Section
13(a) above) promptly following delivery of written demand by Seller to Escrow Holder (such
demand to be accompanied by backup documentation setting forth the attorneys fees and costs for
which Seller seeks reimbursement) and Escrow Holder shall thereafter deliver the balance of the
Lawsuit Deposit to Buyer. If Escrow Holder is unwilling to accept custody of the Lawsuit Deposit as
provided herein, then (in lieu of making such deposit with Escrow Holder) Buyer shall instead
obtain a bond in such amount with a licensed surety and deposit such bond with the court (or other
applicable adjudicator) prior to or concurrently with the filing or other initiation of such
Action.

     (o) Joint and Several Obligations. In the event that this Agreement is executed by more than one
party as Buyer, all obligations of Buyer hereunder shall be deemed to be joint and several.

31

 

     IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement as of the day and year first above written.

	 	 	 	 	 
	 	“SELLER”

CONEXANT SYSTEMS, INC., a Delaware corporation

 	 
	 	By:  	/s/ Mark Peterson 	 
	 	Its: 	Senior Vice President, General Counsel & Secretary 	 
	 	 	[Printed Name and Title] 	 
	 

	 	 	 	 	 
	 	“BUYER”

UPTOWN NEWPORT LP, a Delaware limited partnership

 	 
	 	By:  	G&I VI NEWPORT CORP., a Delaware corporation, its General Partner
 	 
	 	 	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/
Jean Marie Apruzzese 	 
	 	Its: 	Vice
President 	 
	 	 	[Printed Name and Title] 	 
	 

Acceptance by Escrow Holder

     Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions
contained therein.

	 	 	 	 	 
	 	Dated: 12-9-10

FIRST AMERICAN TITLE INSURANCE COMPANY

 	 
	 	By:  	/s/ Patty Beverly 	 
	 	 	Patty Beverly, Escrow Officer 	 
	 	 	 	 
	 	 	1. 4(a) corrected to be escrow #421096-A 	 
	 	 	2. 4(g)(vii) to be handled outside of escrow 	 

S-1exv10w3

Exhibit 10.3

AMENDMENT NO. 3

TO

LOAN AND SECURITY AGREEMENT

This Amendment No. 3 To Loan And Security Agreement (this
“Amendment”) is entered into December 13, 2010, by and between Conexant
CF,LLC, a Delaware limited liability company (“Borrower”), and
Silicon Valley Bank, (“Bank”). Capitalized terms used herein without definition
shall have the same meanings given them in the Loan Agreement (as defined below).

Recitals

	A.	 	Borrower and Bank have entered into that certain Loan and Security Agreement
dated as of December 22, 2009, as amended by that certain Amendment No. 1 to Loan and Security
Agreement dated as of March 3, 2010 and that certain Amendment No. 2 to Loan and Security
Agreement dated as of June 10, 2010 (as amended, restated, or modified from time to time, the
“Loan Agreement”), pursuant to which Bank has agreed to extend and make
available to Borrower certain advances of money.
	 
	C.	 	Subject to the representations and warranties of Borrower herein and upon
the terms and conditions set forth in this Amendment, Bank is willing to amend the Loan Agreement.

Agreement

NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be
legally bound, the parties hereto agree as follows:

	1.	 	Amendments To Loan
Agreement.

	 	1.1	 	Section 2.5 (Payment of Interest). Subsections (a) and (f) of Section 2.5 of the Loan
Agreement are hereby amended in their entirety and replaced with the following:

             
       “(a) Interest
Rate; Advances. Subject to Section 2.5(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a per annum rate equal to the number
of percentage points above the WSJ Prime Rate (the “Applicable Margin”) set forth
opposite the applicable Quick Ratio in the chart below, which interest shall be payable monthly.

	 	 	 	 	 
	Quick Ratio	 	Applicable Margin
	Greater than or equal to 1.50:1.00
	 	 	0.50	%
	Less than 1.50:1.00, but greater than 1.00:1.00
	 	 	1.00	%
	Less than 1.00:1.00
	 	 	2.00	%

 

 

          
          “(f) Minimum Monthly Interest. In the event the
aggregate amount of interest earned by
Bank in any month (exclusive of any collateral monitoring fees, or any other fees and charges
hereunder) is less than Four Thousand Dollars ($4,000) (the “Minimum Monthly
Interest”), Borrower shall pay Bank an amount, payable on the last day of such month, in an
amount equal to the (i) Minimum Monthly Interest minus (ii) the aggregate amount of all interest
earned by Bank (exclusive of any collateral monitoring fees or any other fees and charges
hereunder) in such month.”

	 	1.2	 	Section 2.6 (Fees). Subsections (a) and (b) of Section 2.6 of the Loan
Agreement are hereby amended in their entirety and replaced with the following:

          
          “(a) Commitment Fee. A fully earned, non-refundable
commitment fee of $50,000, on the
Third Amendment Effective Date and each anniversary of the Third Amendment Effective Date
thereafter;

                    
(b) Reserved.”

	 	1.3	 	Section 6.9 (Financial Covenants). Section 6.9 of the Loan Agreement is amended in
its entirety and replaced by the following:

           
         “Borrower shall maintain on a consolidated basis with respect to
 Borrower and
Parent:

                    
(a) Tangible Net Worth. A Tangible Net Worth of at least the amount set forth for each
period in the chart below, increasing by 50% of issuances of new equity or Borrower’s realization
of a net gain from the sale of land assets of Borrower after the Third Amendment Effective Date and
such increase shall be applied to the quarter that the equity is raised or the sale of land assets
is realized and all subsequent quarters; provided, that, any asset loss pertaining to Borrower’s
equity interest in the stock of Mindspeed Technologies, Inc. shall not effect the calculation of
Tangible Net Worth and Bank shall adjust the Tangible Net Worth covenant accordingly.

	 	 	 	 	 
	Fiscal Quarter Ending	 	Minimum Tangible Net Worth
	December 31, 2010
	 	$	(124,525,000	)
	April 1,2011
	 	$	(129,625,000	)
	July 1,2011
	 	$	(133,744,000	)
	September 30, 2011
	 	$	(137,994,000	)
	December 30, 2011
	 	$	(136,301,000	)

Quarterly thresholds through the Revolving Line Maturity Date
shall be established by Bank on an
annual basis based on Borrower’s future projections. On an annual basis, Bank will continue to
establish quarterly thresholds representing 85% of plan in the event future projections assume net
profits on a quarterly basis. Bank will reevaluate the methods of establishing thresholds in the
event projections assume net losses in a manner acceptable to Borrower and Bank. The threshold set
forth above for December 30, 2011 shall remain the baseline threshold until future thresholds are

2

 

documented. As used in this paragraph, “plan” shall mean Borrower’s financial outlook provided to
Bank for the next 3 fiscal years within the term of this Agreement, provided that the plan is
subject to change based on the updated annual forecasts as provided in Section 6.2(v).

               
          (b) Liquidity Coverage. As of the last day of each fiscal month and on a consolidated
basis, a ratio of Parent’s Unrestricted Cash and Cash Equivalents plus net accounts receivable to
Obligations, exclusive of Obligations secured by cash maintained at Bank, of not less than
1.50:1.00.”

	 	1.4	 	Section 13.1 (Definitions). The following definitions in Section 13.1 of the Loan
Agreement are hereby amended and restated in their entirety with the following:

       
   ““Account Receivable” means an Obligee’s right to the payment of money from an
Account Debtor arising out of goods sold or to be sold, property leased or to be leased, and
services rendered or to be rendered, whether secured or unsecured, whether now existing or
hereafter arising, and whether or not specifically sold or purchased in connection with the Loan
Documents; provided that the parties hereto agree that each such right to payment evidenced by a
separate, discrete invoice shall constitute a separate Account Receivable hereunder; and further
provided that, the Account Receivables sold by Seller to Purchaser pursuant to Section 2.1 of the
Purchase Agreement shall include Posted Credit Balances.”

      
    ““Advance Rate” is eighty percent (80.0%) net of Posted Credit Balances, or such
other percentage as Bank establishes under Section 2.1.1.”

       
   ““Current Liabilities” are all obligations and liabilities of Credit Parties to
Bank, plus, without duplication, the aggregate amount of Credit Parties’ consolidated Total
Liabilities that mature within one (1) year; provided, that up to $11.2 million in Convertible Debt
shall not be included as a Current Liability.”

      
    ““Facility Amount” is an amount equal to Twenty Five Million Dollars
($25,000,000).”

       
   ““Minimum Balance” means (a) $1,575,000 until the expiration of the Policy in
December of 2011, and (b) thereafter, at any time of determination, an amount equal to the sum of
(A) the deductible then existing under the Policy, plus (B) the amount of any additional premiums
which, though not currently due and payable, have accrued for payment by Borrower at the conclusion
of the Policy’s term. Notwithstanding the foregoing, the Minimum Balance is only required if/when
Borrower obtains an Advance or at any times Advances are outstanding.”

       
   ““Program Termination Date” means the date on which the Obligations shall have
been finally paid in full and Bank’s commitment to make Advances has terminated, but not later
December 31, 2013.”

       
   ““Purchase Termination Date” means the earliest to occur of the following: (a) the
date on which the Policy is initially scheduled to expire (or, if the Policy is replaced,
substituted, extended, or amended, with Bank’s consent and approval, to provide a later expiration
date, then such later expiration date); and (b) the November 30, 2013.”

3

 

      
    ““Revolving Line Maturity Date” is December 31, 2013.”

	 	1.5	 	Section 13.1 (Definitions). The definition of “Prime Rate” in Section 13.1 of the
Loan Agreement is hereby deleted in its entirety.
	 
	 	1.6	 	Omnibus Amendment. Each reference to “Prime Rate” in the Loan Agreement
shall hereinafter be a reference to “WSJ Prime Rate”.
	 
	 	1.7	 	Section 13.1 (Definitions). The following definitions are hereby added to Section
13.1 of the Loan Agreement in their appropriate alphabetical order:

       
   ““Posted Credit Balances” are customer weekly exercised rebates and other
miscellaneous credits.”

       
   ““Third Amendment Effective Date” is December 13, 2010.”

      
    ““WSJ Prime Rate” is the rate most recently announced as the “prime rate” in the
Money Rates section of The Wall Street Journal.”

	 	1.8	 	Exhibit B to Loan Agreement (Compliance Certificate). Exhibit B (“Compliance
Certificate”) of the Loan Agreement is amended in its entirety by deleting it and
replacing it with Exhibit A attached hereto.

	2.	 	Borrower’s Representations And Warranties.

	 	2.1	 	Borrower represents and warrants that:

	 	(a)	 	immediately upon giving effect to this Amendment (i) the representations and
warranties contained in the Loan Documents are true, accurate and complete in all material
respects as of the date hereof (except to the extent such representations and warranties
relate to an earlier date, in which case they are true and correct as of such date), and (ii)
no Event of Default has occurred and is continuing;
	 
	 	(b)	 	Borrower has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by this
Amendment;
	 
	 	(c)	 	the articles of incorporation, bylaws and other organizational documents of
Borrower delivered to Bank in connection with the execution of the Loan Agreement, remain
true, accurate and complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;
	 
	 	(d)	 	the execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been
duly authorized by all necessary corporate action on the part of Borrower;
	 
	 	(e)	 	this Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against it in accordance with its

4

 

	 	 	 	terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles
relating to or affecting creditors’ rights; and
	 
	 	(f)	 	as of the date hereof, it has no defenses against the obligations to pay any amounts under
the Obligations. Borrower acknowledges that Bank has acted in good faith and has conducted in
a commercially reasonable manner its relationships with Borrower in connection with this
Amendment and in connection with the Loan Documents.

	 	2.2	 	Borrower understands and acknowledges that Bank is entering into this
Amendment in reliance upon, and in partial consideration for, the representations and
warranties in Section 3.1, and agrees that such reliance is reasonable and appropriate.

	3.	 	Limitation. The amendments in Section 2 shall be limited precisely
as written and shall not be deemed (a) to be a waiver or modification of any other term or
condition of any Loan Document or of any other instrument or agreement referred to therein or
to prejudice any right or remedy which Bank may now have or may have in the future under or in
connection with the Loan Documents or any instrument or agreement referred to therein; or (b)
to be a consent to any future amendment or modification or waiver to any instrument or
agreement the execution and delivery of which is consented to hereby, or to any waiver of any
of the provisions thereof. Except as expressly amended hereby, the Loan Agreement and the
other Loan Documents shall continue in full force and effect.
	 
	4.	 	Effectiveness. This Amendment shall become effective upon the
satisfaction of all the following conditions precedent:

	 	4.1	 	Amendment. Borrower and Bank shall have duly executed and delivered this
Amendment to Bank.
	 
	 	4.2	 	Reaffirmation of Loan Documents. Conexant Systems, Inc. shall have
executed the Reaffirmation of Loan Documents in the form of Exhibit B attached hereto.
	 
	 	4.3	 	Commitment Fee. Borrower shall have paid to Bank a fully earned,
non-refundable commitment fee of $50,000.
	 
	 	4.4	 	Bank Expenses. Borrower shall have paid all Bank Expenses incurred through
the date of this Amendment.

	5.	 	Counterparts. This Amendment may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with the same effect
as if the signatures to each such counterpart were upon a single instrument. All counterparts
shall be deemed an original of this Amendment.
	 
	6.	 	Integration. This Amendment and any documents executed in
connection herewith or pursuant hereto contain the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements, understandings,
offers and negotiations, oral or written, with respect thereto and no extrinsic evidence
whatsoever may be introduced

5

 

	 	 	in any judicial or arbitration proceeding, if any, involving this Amendment; except that any
financing statements or other agreements or instruments filed by Bank with respect to Borrower
shall remain in full force and effect.
	 
	7.	 	Governing Law; Venue. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrower and Bank each submit
to the exclusive jurisdiction of the State and Federal courts in Santa Clara County,
California.

[Remainder of page intentionally left blank — signature page follows.]

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
Loan and Security Agreement to be executed as of the date first written above.

	 	 	 	 	 
	 	Borrower:

Conexant CF, LLC,

a California limited liability company

 	 
	 	By:  	/s/ Jean Hu
 	 
	 	 	Printed Name:  	Jean Hu 	 
	 	 	Title:  	CFO & Sr. Vice President 	 
	 
	 	Bank:

Silicon Valley Bank

 	 
	 	By:  	/s/ Derek Hoyt
 	 
	 	 	Printed Name:  	Derek Hoyt 	 
	 	 	Title:  	Senior Relationship Manager 	 
	 

7

 

EXHIBIT A TO AMENDMENT NO. 3

EXHIBIT B

			
	 	 	 
	TO: SILICON VALLEY BANK
	 	Date:                     
	FROM: CONEXANT CF, LLC	 	 

The undersigned authorized officer of Conexant CF, LLC (“Borrower”) certifies that under the
terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (1) Borrower is in complete compliance for the period ending                      with
all required covenants
except as noted below, (2) there are no Events of Default, (3) all representations and warranties
in the Agreement are true and correct in all material respects on this date except as noted below;
provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring to a specific date
shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and
each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has
timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the
Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously
provided written notification to Bank. Attached are the required documents supporting the
certification. The undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an accompanying letter or
footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered. Capitalized terms used
but not otherwise defined herein shall have the meanings given them in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Weekly Transaction Report,
reconciliations of A/R,
transaction reports and general
ledger

	 	Weekly
	 	Yes  No
	Monthly A/R agings and A/P agings

	 	Monthly within 30 days
	 	Yes  No
	Monthly unaudited financial
statements of Parent
(consolidated and consolidating
w/respect to Borrower) w/Compliance
Certificate

	 	Monthly within 30 days
	 	Yes  No
	Annual operating budgets of
Parent + annual financial
projections of Parent approved
by Board of Parent

	 	FYE of Parent within 90 days
	 	Yes  No
	10-Q, 10-K and 8-K

	 	Within 15 days after filing with SEC
	 	Yes  No
	Quarterly field examination audit

	 	Quarterly at Bank’s discretion
	 	Yes  No

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain on a Fiscal
Quarter Ending Basis
Minimum Tangible Net Worth
(see 6.9(a)):
	 	$	_______	 	 	$	_______	 	 	Yes  No
	Maintain on a Monthly
Basis Liquidity Coverage
of not less than 1.50:1:00
	 	 	1.50:1:00	 	 	 	_______	 	 	Yes  No

8

 

     The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)

      

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 

	CONEXANT CF, LLC	 	 	 	BANK USE ONLY  

	 	 	 	 	 	 	 	 	Received by: 	 	 	 	 
	By:	 	 	 	 	 	 	 	 	AUTHORIZED SIGNER	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Date:	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Verified: 	 	 	 	 
	 	 	 	 	 	 	 	 	 	AUTHORIZED SIGNER	 
	 

	 	 	 	 	 	 	 	Date:	 	 	 	 
	 	 	 	 	 	 	 	 	
Compliance Status: Yes  No

9

 

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

     In the event of a conflict between
this Schedule and the Loan Agreement, the terms of the Loan
Agreement shall govern.

Dated:         
            

I. Tangible Net Worth (Section 6.9(a))

Required: Maintain, Tangible Net Worth of at least the amount
set forth for each period in the
chart below,
increasing by 50% of issuances of new equity or Borrower’s realization of a net gain from the sale
of land assets of Borrower after the Third Amendment Effective Date and such increase shall be
applied to the quarter that the equity is raised or the sale of land assets is realized and all
subsequent quarters; provided, that, any asset loss pertaining to Borrower’s equity interest in the
stock of Mindspeed Technologies, Inc. shall not effect the calculation of Tangible Net Worth and
Bank shall adjust the Tangible Net Worth covenant accordingly. Quarterly thresholds through the
Revolving Line Maturity Date shall be established by Bank based on Borrower’s future projections.

	 	 	 	 	 
	Fiscal Quarter Ending	 	Minimum Tangible Net Worth
	December 31, 2010
	 	$	(124,525,000	)
	April 1,2011
	 	$	(129,625,000	)
	July 1,2011
	 	$	(133,744,000	)
	September 30, 2011
	 	$	(137,994,000	)
	December 30, 2011
	 	$	(136,301,000	)

Actual:

	 	 	 	 	 
	Fiscal Quarter Ending	 	Minimum Tangible Net Worth
	December 31, 2010
	 	 	 	 
	April 1,2011
	 	 	 	 
	July 1,2011
	 	 	 	 
	September 30, 2011
	 	 	 	 
	December 30, 2011
	 	 	 	 

	 	 	 

	___ No, not in compliance

	 	___ Yes, in compliance

III. Liquidity Coverage (Section 6.9(b))

Required: Maintain, as of the last day of each fiscal month and
on a consolidated basis, a ratio of Parent’s
Unrestricted Cash and Cash Equivalents plus net accounts receivable to Obligations, exclusive of
Obligations secured by cash maintained at Bank, of not less than 1.50:1.00.

Actual:

10

 

	 	 	 	 	 

	A.
	 	Parent’s Unrestricted Cash and Cash Equivalents

	$	 
	 	 	 

	 	 
	B.
	 	Net accounts receivables

	$	 
	 	 	 

	 	 
	C.
	 	Obligations

	$	 
	 	 	 

	 	 
	D
	 	Obligations secured by cash maintained at Bank

	$	 
	 	 	 

	 	 
	E.
	 	Liquidity Coverage (line A plus line B divided by line C minus line D)

	 	 
	 	 	 

	 	 

Is line E equal to or greater than 1.50:1:00?

	 	 	 

	                     No, not in compliance
	 	                     Yes, in compliance

11

 

EXHIBIT B TO AMENDMENT NO. 3

REAFFIRMATION OF LOAN DOCUMENTS

          This Reaffirmation of Loan Documents is entered into as of December 13, 2010, by and
between Conexant Systems, Inc., a Delaware corporation
(“Parent”) and Conexant CF,
LLC, a Delaware limited liability company (“Borrower”).

          Whereas, Parent and Borrower entered into that certain Receivables Purchase Agreement
and that certain Servicing Agreement, each dated as of December 22, 2009 (collectively, the
“Loan Documents”), in connection with that certain Loan and Security Agreement by and
between Borrower and Bank, dated as of December 22, 2009 (as amended, and as may be further
amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”); and

          Whereas, Borrower and Bank are amending the Loan Agreement pursuant to that certain Amendment
No. 3 to Loan and Security Agreement, dated as of the date hereof (the “Amendment No.
3”), pursuant to which, among other things, Borrower and Bank have agreed to extend the maturity
date of the loan facility. Capitalized terms used herein without definition shall have the same
meanings given them in the Loan Agreement.

          Now therefore, for valuable consideration, receipt of which is acknowledged, Guarantor hereby
agrees as follows:

          1. Reaffirmation of Loan Documents. Parent and Borrower hereby ratify and reaffirm
their obligations under the Loan Documents and agree that none of the modifications or waivers to
the Loan Agreement as set forth in Amendment No. 3 shall impair either party’s obligations under
the Loan Documents.

          2. Continuing Effect and Absence of Defenses. Parent and Borrower acknowledge that
each the Loan Documents are still in full force and effect and that neither party has defenses to
enforcement of the Loan Documents. The parties hereto each waive any and all defenses to
enforcement of the Loan Documents that might otherwise be available as a result of the amendment of
the Loan Agreement.

	 	 	 	 	 
	 	Conexant CF, LLC

 	 
	 	By:  	/s/ Jean Hu
 	 
	 	 	Printed Name:  	Jean Hu 	 
	 	 	Title:  	CFO & Sr. Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	Conexant Systems, Inc.

 	 
	 	By:  	/s/ Jean Hu
 	 
	 	 	Printed Name:  	Jean Hu 	 
	 	 	Title:  	CFO & Sr. Vice President 	 
	 

2

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