Document:

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                                                                    EXHIBIT 10.3

            PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

                                       by

                                       and

                                     between

                              BPP/ARROWHEAD, L.P.,
                         a Delaware limited partnership,

                                    "SELLER"

                                       and

                                    LAV, LLC,
                      a Delaware limited liability company

                                   "PURCHASER"

                                   Dated as of
                                November 26, 2001

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                                TABLE OF CONTENTS
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                                                                                   Page
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1.  DESCRIPTION OF THE PROPERTY..................................................    1

2.  THE PURCHASE PRICE; ASSUMPTION OF LIABILITIES................................    2

3.  TITLE........................................................................    3

4.  REPRESENTATIONS AND WARRANTIES OF SELLER.....................................    4

5.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.......................    5

6.  CONFIDENTIALITY..............................................................    7

7.  CONDITIONS PRECEDENT TO CLOSING..............................................    7

8.  COVENANTS OF SELLER.........................................................    10

9.  SELLER'S CLOSING DELIVERIES.................................................    11

10. PURCHASER'S CLOSING DELIVERIES..............................................    12

11. PRORATIONS, CREDITS AND ADJUSTMENTS.........................................    12

12. CLOSING.....................................................................    17

13. CLOSING COSTS...............................................................    17

14. RISK OF LOSS; CASUALTY AND CONDEMNATION; MATERIAL ADVERSE CHANGE............    17

15. DEFAULT.....................................................................    20

16. BROKER'S COMMISSION.........................................................    20

17. ESCROW......................................................................    20

18. RELEASE BY PURCHASER........................................................    21

19. LOAN ASSUMPTION.............................................................    23

20. INDEMNIFICATION.............................................................    23

21. MISCELLANEOUS...............................................................    25

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            PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

     THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"AGREEMENT") is entered into as of November 26, 2001, by and between LAV, LLC, a
Delaware limited liability company ("PURCHASER"), and BPP/ARROWHEAD, L.P., a
Delaware limited partnership ("SELLER").

                                R E C I T A L S:

     A. Seller is the owner of fee title to that certain real property located
in the County of San Bernardino, State of California, more particularly
described on EXHIBIT A attached hereto (the "LAND"), together with the
improvements, structures and facilities owned by Seller and located thereon and
commonly known as the "The Village at Lake Arrowhead" (the "IMPROVEMENTS").

     B. Purchaser is experienced in the evaluation and acquisition of real
property improved with a shopping center.

     C. Seller desires to sell and convey to Purchaser, and Purchaser desires to
purchase and acquire from Seller, the Property (as defined below) subject to the
terms and conditions set forth below.

     NOW THEREFORE, in consideration of the foregoing recitals and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as follows:

     1. DESCRIPTION OF THE PROPERTY.

     Seller agrees to sell, assign and convey to Purchaser, and Purchaser agrees
to purchase from Seller, the following:

     (a) The Land and the Improvements;

     (b) All of Seller's interest as lessor in all leases, licenses and other
     occupancy agreements covering the Land and Improvements (said leases,
     licenses and other occupancy agreements, together with any and all
     amendments, modifications or supplements thereto, are hereinafter referred
     to collectively as the "LEASES" and are identified on the Schedule of
     Leases attached hereto as EXHIBIT B);

     (c) All rights, privileges, licenses, easements and appurtenances to the
     Land and the Improvements, if any, including, without limitation, all of
     Seller's right, title and interest, if any, in and to all mineral and water
     rights and all easements, rights-of-way and other appurtenances used or
     connected with the beneficial use or enjoyment of the Land and the
     Improvements (the Land, the Improvements and all such easements and
     appurtenances (including, without limitation, Seller's interest under the
     Leases) are sometimes collectively hereinafter referred to as the "REAL
     PROPERTY");

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     (e) All personal property and fixtures owned by Seller and located on the
     Real Property or on the Maintenance Yard (as described in EXHIBIT A-1
     attached hereto), including, without limitation, all personal property
     owned by Seller and located in the Property management office and the
     equipment in the maintenance shed (the "PERSONAL PROPERTY"); and

     (f) All of Seller's interest in and to any websites, trademarks, trade
     names, logos and copyrights used in connection with the Real Property
     (including, without limitation, the name "THE VILLAGE AT LAKE ARROWHEAD"),
     excluding, however, Seller's name and trademarks or trade names of Seller's
     affiliated companies (collectively, the "TRADE NAMES"), together with
     Seller's interest in and to any Service Contracts (hereinafter defined)
     which Purchaser elects to take an assignment of in accordance with this
     Agreement, guarantees, licenses, certificates, including, without
     limitation, on a non-exclusive basis, the rights of Seller as the insured
     under that certain PLL Commercial Pollution Legal Liability Policy issued
     by AIG Environmental to Burnham Pacific Properties, Inc., as Policy No.
     PLC1957154 (the "ENVIRONMENTAL POLICY") and warranties, to the extent
     assignable (collectively, the "INTANGIBLE PROPERTY"), but excluding
     Seller's obligations under that certain Liquidation and Property Management
     Services Agreement by and among Burnham Pacific Properties, Inc. and DDR
     Real Estate Services Inc. ("DDRES"), dated as of September 10, 2000 (the
     "LIQUIDATION SERVICES AGREEMENT"), which shall be terminated as of the
     Closing.

     (g) All permits, licenses, authorizations, consents, entitlements,
     approvals and certificates relating to the Real Property, to the extent
     assignable (collectively, the "PERMITS"). (The Real Property, the Personal
     Property, the Trade Names, the Intangible Property and the Permits are
     sometimes collectively hereinafter referred to as the "PROPERTY").

     (h) Seller's rights, title and interest in (i) subject to the consent of
     The Arrowhead Joint Venture, that certain Shopping Center Lease, dated as
     of July 1, 1998, by and between Seller and Arrowhead Joint Venture (the
     "MAINTENANCE LEASE") for the Maintenance Yard, (ii) subject to the consent
     of Arrowhead Lake Association, that certain Conveyance of Easement
     Determinable, recorded on September 2, 1998, as Document No. 19980375829
     (the "EASEMENT") concerning Seller's rights to use the docks and have
     access to Lake Arrowhead and (iii) subject to the consent of Arrowhead Lake
     Association, that certain Tour Boat License Agreement, dated April 13,
     1998, as amended, by and between Arrowhead Lake Association and Arrowhead
     Village (as Seller's predecessor) (the "LICENSE").

     2. THE PURCHASE PRICE; ASSUMPTION OF LIABILITIES.

         The purchase price for the Property shall be $21,175,519 (the
"PURCHASE PRICE"), subject to the adjustments and prorations hereinafter set
forth.

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     (a) Within two (2) business days after execution of this Agreement by all
     parties, Seller shall open an escrow account with Chicago Title Company
     ("ESCROW COMPANY") in preparation for the Closing.

     (b) Subject to the terms and conditions of SECTION 19, Purchaser shall take
     title to the Property subject to, and shall assume, the Existing
     Indebtedness (as defined in SECTION 19), and Purchaser shall be entitled to
     a credit against the Purchase Price for the outstanding balance due and
     owing to the Beneficiary (as defined in SECTION 19) thereunder as of the
     Closing Date.

     (c) At the Closing, Purchaser shall assume the liabilities and obligations
     of Seller arising from and after the Closing Date under or in respect of
     the Leases (including any obligation to refund any security deposits), the
     Maintenance Lease, the Easement, the License and the assigned Service
     Contracts (with the liability of Purchaser being limited to the same
     extent, if any, as Seller's liability is limited under such Service
     Contracts).

     All of the obligations to be assumed by Purchaser pursuant to SECTIONS 2(b)
     and 2(c) are hereinafter referred to as the "ASSUMED LIABILITIES."

     3. TITLE.

     (a) Purchaser has reviewed the proforma owner's title policy, dated
     September 27, 2001 (Order No. 2040052-K32), a copy of which is attached
     hereto as EXHIBIT I, pertaining to the Real Property (the "PROFORMA")
     prepared by Chicago Title Company ("TITLE COMPANY"), together with copies
     of all documents relating to the title exceptions and other matters
     referred to in such Proforma (the "TITLE DOCUMENTS").

     (b) Purchaser has reviewed the survey of the Real Property, dated February
     20, 1998, prepared by CM Engineering Associates (the "SURVEY").

     (c) Purchaser hereby acknowledges that it has approved the Proforma and the
     Survey and shall take title to the Property subject to the exceptions and
     other matters contained in the Proforma and as shown on the Survey and
     approved pursuant to SECTION 3(d) or (e) (collectively, the "APPROVED
     MATTERS").

     (d) Purchaser shall have sole responsibility for obtaining, at its sole
     cost and expense, any update of the Proforma or Survey desired by
     Purchaser. Purchaser agrees to take title to the Real Property subject to
     any additional exceptions and other matters disclosed by such updates which
     (i) were known to Scott Verges or Dan Platt prior to or as of the date of
     this Agreement; (ii) were caused by Seller while Scott Verges or Dan Platt
     are employed as senior executives of Seller and (iii) rights of tenants
     under leases in effect as of the date of this Agreement, all of which shall
     be deemed Approved Matters.

     (e) If any written update, supplement or amendment to the PTR or Survey
     discloses an exception to title which is not covered by SECTIONS 3(c) or
     (d) above,

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     then Purchaser may notify Seller in writing of Purchaser's disapproval of
     such new exception within ten (10) days after Purchaser's receipt of such
     update and a copy of the document relating to such new exception, and the
     exceptions disapproved in such timely notice shall also be "DISAPPROVED
     EXCEPTIONS." Any such matters or exceptions to title to the Property not
     disapproved in writing within the period specified above shall be deemed to
     be approved by Purchaser. Within ten (10) days after the date Seller
     receives Purchaser's written notice of any Disapproved Exception within the
     time periods specified above, Seller shall notify Purchaser in writing of
     any Disapproved Exceptions which Seller is unable or unwilling to cause to
     be removed or insured against prior to or at the Closing (the "UNRESOLVED
     EXCEPTIONS"). With respect to any Unresolved Exception, Purchaser shall
     elect, by giving written notice to Seller and the Escrow Company within
     five (5) days after Purchaser's receipt of Seller's determination regarding
     the Unresolved Exceptions, (i) to terminate this Agreement, or (ii) to
     waive Purchaser's disapproval of such Unresolved Exception, in such latter
     event each such Unresolved Exception shall then be deemed to be approved by
     Purchaser. Purchaser's failure to terminate this Agreement within such five
     (5) day period shall constitute Purchaser's agreement to treat such
     Unresolved Exceptions as approved by Purchaser. In the event Purchaser
     terminates this Agreement in accordance with this SECTION 3, this Agreement
     will be deemed terminated; provided that Purchaser shall pay all title and
     escrow cancellation fees with respect thereto.

     4. REPRESENTATIONS AND WARRANTIES OF SELLER.

     Seller represents and warrants to Purchaser 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 Closing:

     (a) Seller is a limited partnership, duly formed, validly existing and in
     good standing under the laws of the State of Delaware. Each partner of
     Seller is an entity duly formed or organized (as the case may be), validly
     existing, and in good standing under the laws of its state of formation or
     incorporation.

     (b) This Agreement is, and all the documents executed by Seller which are
     to be delivered to Purchaser at the Closing will be, duly authorized,
     executed, and delivered by Seller, and is and will be legal, valid, and
     binding obligations of Seller enforceable against Seller 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 right of contracting parties
     generally), and does not and will not violate any provisions of any
     agreement to which Seller is a party or to which it is subject.

     (c) Except for that certain Stipulation of Settlement with regard to IN RE
     BURNHAM PACIFIC PROPERTIES SHAREHOLDER LITIGATION, Case No. GIC743017,
     filed on February 7, 2000 in the Superior Court, San Diego County,
     California, none of the execution, delivery or performance of this
     Agreement by Seller does or will violate, constitute a default under,
     result in an acceleration of payments due or

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     creation of any lien upon the Property or require the approval or waiver of
     or filing with any governmental body, agency or instrumentality under (i)
     the organizational documents of Seller or its partners, or (ii) any
     judgment, decree, order, statute, injunction, rule, regulation or the like
     of a governmental unit applicable to Seller or its partners.

     The express representations and warranties made in this Agreement shall not
merge into any instrument or conveyance delivered at the Closing.

     5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.

     Purchaser represents and warrants to Seller 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 Closing:

     (a) Purchaser is a limited liability company duly formed, validly existing
     and in good standing under the laws of the State of Delaware. Each member
     in Purchaser is an entity duly formed or organized (as the case may be),
     validly existing and in good standing under the laws of its state of
     formation and incorporation.

     (b) This Agreement is, and all the documents executed by Purchaser which
     are to be delivered to Seller at the Closing will be, duly authorized,
     executed, and delivered by Purchaser, and is and will be legal, valid, and
     binding obligations of Purchaser enforceable against Purchaser 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 right of contracting
     parties generally), and does not and will not violate any provisions of any
     agreement to which Purchaser is a party or to which it is subject.

     (c) The principals in Purchaser, Scott Verges and Dan Platt, are senior
     executives of Seller and are thoroughly familiar with the Property,
     including, without limitation, the economic condition of the Property and
     its market, the physical, structural and environmental condition of the
     Property, the status of existing leases and the future prospects for
     leasing at the Property, the condition of title to the Real Property,
     operating expenses incurred in operating and maintaining the Property and
     the extent of revenues from the Property. Purchaser has had ample
     opportunity to investigate all physical and economic aspects of the
     Property and to make all inspections and investigations of the Property
     which Purchaser deems necessary or desirable to protect its interests in
     acquiring the Property, including, without limitation, review of the
     Leases, building permits, certificates of occupancy, environmental audits,
     toxic reports, surveys, investigations of land use and development rights,
     the condition of title, soils and geological reports, engineering and
     structural tests, insurance contracts, contracts for work in progress,
     marketing studies.

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     (d) None of the execution, delivery or performance of this Agreement by
     Purchaser does or will violate, constitute a default under, result in
     acceleration of payments due or require the approval or waiver of or filing
     with any governmental body, agency or instrumentality under (i) the
     organizational documents of Purchaser, or (ii) any judgment, decree, order,
     statute, injunction, rule, regulation or the like of a governmental unit
     applicable to Purchaser.

     (e) EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, (I) NEITHER
     SELLER, NOR ANYONE ACTING FOR OR ON BEHALF OF SELLER, HAS MADE ANY
     REPRESENTATION, WARRANTY, PROMISE OR STATEMENT, EXPRESS OR IMPLIED, TO
     PURCHASER, OR TO ANYONE ACTING FOR OR ON BEHALF OF PURCHASER, CONCERNING
     THE PROPERTY OR THE CONDITION, USE OR DEVELOPMENT THEREOF, (II) IN ENTERING
     INTO THIS AGREEMENT, PURCHASER HAS NOT RELIED ON ANY REPRESENTATION,
     WARRANTY, PROMISE OR STATEMENT, EXPRESS OR IMPLIED, OF SELLER, OR ANYONE
     ACTING FOR OR ON BEHALF OF SELLER, (III) ALL MATTERS CONCERNING THE
     PROPERTY HAVE BEEN OR SHALL BE INDEPENDENTLY VERIFIED BY PURCHASER PRIOR TO
     THE CLOSING, AND PURCHASER SHALL PURCHASE THE PROPERTY ON PURCHASER'S OWN
     PRIOR INVESTIGATION AND EXAMINATION OF THE PROPERTY (OR PURCHASER'S
     ELECTION NOT TO DO SO); (IV) AS A MATERIAL INDUCEMENT TO THE EXECUTION AND
     DELIVERY OF THIS AGREEMENT BY SELLER, PURCHASER IS PURCHASING THE PROPERTY
     IN AN "AS IS" PHYSICAL CONDITION AND IN AN "AS IS" STATE OF REPAIR, WITH
     ALL FAULTS, (V) THE PRINCIPALS OF PURCHASER ARE SENIOR OFFICERS OF SELLER
     AND IN SUCH CAPACITY ARE FAMILIAR WITH THE CONDITION OF THE PROPERTY AND
     (VI) PURCHASER WAIVES, AND SELLER DISCLAIMS, ALL WARRANTIES OF ANY TYPE OR
     KIND WHATSOEVER WITH RESPECT TO THE PROPERTY, WHETHER EXPRESS OR IMPLIED,
     INCLUDING, BY WAY OF DESCRIPTION BUT NOT LIMITATION, THOSE OF FITNESS FOR A
     PARTICULAR PURPOSE AND USE, TENANTABILITY OR HABITABILITY.

     (f) No financing for this transaction shall be provided by Seller.

     (g) Purchaser acknowledges that Seller is a party to and the Property is
     subject to that certain Purchase and Sale Agreement by and among Burnham
     Pacific Operating Partnership, L.P., a Delaware limited partnership, as
     seller, and Kenneth V. Stevens and Deborah A. Stevens, as Trustees of the
     Kenneth Vincent Stevens and Deborah Ann Stevens Revocable Family Trust, GIC
     Enterprises, Inc., a California corporation, Graziadio Investment Company,
     a California limited partnership, and Ginarra Partners, LLC, a California
     limited liability company, as buyers, dated as of April 2, 2001 (the "BPOP
     AGREEMENT"). Purchaser shall cooperate with Seller and such other parties
     as necessary to complete the

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     transaction contemplated by Section 11.19 of the BPOP Agreement, in
     compliance with such section and to Seller's satisfaction (in its sole and
     absolute discretion); PROVIDED, HOWEVER, that in connection with such
     cooperation Purchaser shall not be required to incur any liability or
     assume any responsibility other than as set forth in this Agreement.

     The express representations and warranties made in this Agreement shall not
merge into any instrument or conveyance delivered at the Closing.

     6. CONFIDENTIALITY.

     Purchaser shall keep confidential the information contained in the
materials delivered or provided for inspection by Seller and shall not disclose
such information to any third parties, except that Purchaser may provide such
information to its lenders, consultants, attorneys, direct and indirect
partners, members or shareholders and prospective investors in connection with
Purchaser's acquisition of the Property (PROVIDED THAT Purchaser shall instruct
the aforesaid parties to maintain the confidentiality of such information). If
the transaction contemplated by this Agreement is not consummated for any
reason, Purchaser promptly shall return to Seller, and instruct its
representatives, consultants, attorneys, and prospective investors to return to
Seller, all copies and originals of information and materials previously
provided for inspection by Seller to Purchaser. The provisions of this SECTION 6
shall survive any termination of this Agreement. This SECTION 6 shall cease to
apply to Purchaser upon the Closing of the purchase and sale contemplated by
this Agreement.

     7. CONDITIONS PRECEDENT TO CLOSING.

     (a) The following shall be conditions precedent to Purchaser's obligation
     to consummate the purchase and sale transaction contemplated herein (the
     "PURCHASER'S CONDITIONS PRECEDENT"):

          (i) Purchaser shall not have terminated this Agreement in accordance
with SECTIONS 3, 14 or 19 of this Agreement.

          (ii) Title Company shall stand ready to issue, at the Closing, an ALTA
Owner's Policy of Title Insurance (the "TITLE POLICY"), dated the date and time
of Closing in the form of the Proforma attached hereto as EXHIBIT I, subject
only to the Approved Matters.

          (iii) There shall be no material breach of any of Seller's
representations, warranties or covenants set forth in SECTION 4 and SECTION 8,
as of the Closing.

          (iv) Seller shall have delivered to the Escrow Company the items
described in SECTION 9.

          (v) Beneficiary (as defined in SECTION 19) shall have approved
Purchaser's assumption of the Existing Indebtedness without requiring any
modification in the economic terms thereof or allocation of liabilities therein.

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          (vi) Seller shall not have terminated this Agreement pursuant to
SECTION 7(b).

          (vii) Seller shall have caused the Environmental Policy covering the
Property to be assigned to Purchaser to the extent the terms of such policy
permit such assignment; provided that such assignment shall prohibit Purchaser
from making claims under such policy for any release or other matter first
arising after the Closing for such Property.

          (viii) Arrowhead Lake Association shall have approved the assignment
of the Easement and the License to Purchaser.

          (ix) (1) the cost to repair the seawall at the Property is less than
$250,000 (in which case Seller will establish at Closing a holdback account with
Escrow Holder in the amount of the maximum cost to repair the seawall) or (2) if
the cost to repair the seawall at the Property is greater than or equal to
$250,000, then either (a) Seller and Purchaser shall have reached agreement
(each in their sole and absolute discretion) on the appropriate method to repair
the seawall at the Property, the maximum estimated cost to repair the seawall
and the method for funding the repair of the seawall, or (b) if Purchaser and
Seller are unable to agree as set forth in (a) above, then Seller shall have
agreed nonetheless (in its sole and absolute discretion) to pay up to the
maximum cost of the seawall repair and will establish at Closing a holdback
account with Escrow Holder in the amount of the maximum cost to repair the
seawall.

          (x) DDRES shall have provided to Purchaser and Seller an estimate of
the cost to repair the parking structure at the Property, and Purchaser and
Seller shall have reached agreement (each in their sole and absolute discretion)
on the appropriate method to repair the parking structure at the Property, the
maximum estimated cost to repair the parking structure and the method for
funding the repair of the parking structure. If Purchaser and Seller are unable
to agree as set forth above, then either Seller or Purchaser may, by written
notice to the other, terminate this Agreement.

The conditions set forth in this SECTION 7(a) are solely for the benefit of
Purchaser and may be waived only by Purchaser. Purchaser shall, at all times
prior to the termination of this Agreement, have the right to waive any of these
conditions.

     (b) The following shall be conditions precedent to Seller's obligation to
     consummate the purchase and sale transaction contemplated herein (the
     "SELLER'S CONDITIONS PRECEDENT"):

          (i) Purchaser shall not have terminated this Agreement in accordance
with SECTION 14 of this Agreement.

          (ii) Purchaser shall have delivered to Escrow Company, prior to the
Closing, for disbursement as directed hereunder, all cash or other immediately
available funds due from Purchaser in accordance with this Agreement.

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          (iii) There shall be no material breach of any of Purchaser's
representations, warranties or covenants set forth in SECTION 5 and SECTION 6,
as of the Closing.

          (iv) Purchaser shall have delivered to Escrow Company the items
described in SECTION 10.

          (v) Beneficiary (as defined in SECTION 19) shall have approved
Purchaser's assumption of the Existing Indebtedness.

          (vi) Seller shall not have terminated this Agreement pursuant to
SECTION 15(b).

          (vii) Seller shall have obtained and approved in its sole and absolute
discretion an appraisal from an independent appraiser as to the fair market
value of the Property.

          (viii) Seller shall have obtained and approved in its sole and
absolute discretion a fairness opinion from Houlihan Lokey on such matters as it
deems appropriate.

          (ix) Seller shall have obtained a legal opinion from its counsel that
the sale of the Property pursuant to this Agreement is not in violation of the
terms of that certain Stipulation of Settlement with regard to IN RE BURNHAM
PACIFIC PROPERTIES SHAREHOLDER LITIGATION, Case No. GIC743017, filed on February
7, 2000 in the Superior Court, San Diego County, California.

          (x) (1) the cost to repair the seawall at the Property is less than
$250,000 (in which case Seller will establish at Closing a holdback account with
Escrow Holder in the amount of the maximum cost to repair the seawall) or (2) if
the cost to repair the seawall at the Property is greater than or equal to
$250,000, then either (a) Seller and Purchaser shall have reached agreement
(each in their sole and absolute discretion) on the appropriate method to repair
the seawall at the Property, the maximum cost to repair the seawall and the
method for funding the repair of the seawall, or (b) if Purchaser and Seller are
unable to agree as set forth in (a) above, then Seller shall have agreed
nonetheless (in its sole and absolute discretion) to pay up to the maximum cost
of the seawall repair and will establish at Closing a holdback account with
Escrow Holder in the amount of the maximum cost to repair the seawall.

          (xi) DDRES shall have provided to Purchaser and Seller an estimate of
the cost to repair the parking structure at the Property, and Purchaser and
Seller shall have reached agreement (each in their sole and absolute discretion)
on the appropriate method to repair the parking structure at the Property, the
maximum estimated cost to repair the parking structure and the method for
funding the repair of the parking structure. If Purchaser and Seller are unable
to agree as set forth above, then either Seller or Purchaser may, by written
notice to the other, terminate this Agreement.

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          (xi) The transaction contemplated by Section 11.19 of the BPOP
Agreement (as defined in SECTION 5(g)) shall have been completed in compliance
with such section and to Seller's satisfaction (in its sole and absolute
discretion).

The conditions set forth in this SECTION 7(b) are solely for the benefit of
Seller and may be waived only by Seller. Seller shall, at all times prior to the
termination of this Agreement, have the right to waive any of these conditions.

     8. COVENANTS OF SELLER.

     Seller covenants with Purchaser, as follows:

     (a) After the date hereof and prior to the Closing, Seller shall not enter
     into any new Leases, or amend, modify or extend any existing Leases, in any
     case without the prior written consent of Purchaser (which consent shall
     not be unreasonably withheld); PROVIDED, HOWEVER, that Purchaser shall be
     deemed to have consented to any new or amended Lease if such Lease or
     amendment is entered into by Seller during the time that Scott C. Verges or
     Dan Platt is a senior executive of Seller. If Purchaser consents to any
     such new Lease, or is deemed to have consented to any such new Lease or to
     the amendment, modification or extension of any existing Lease, then, if
     the transaction contemplated by this Agreement is consummated, Purchaser
     shall be solely responsible for the payment of all leasing commissions in
     connection therewith and any tenant improvement costs or allowance, move-in
     allowance and any other payment to the Tenant thereunder (whether coming
     due prior to the Closing, if the transaction contemplated by this Agreement
     closes, in which case any such amount shall be payable to Seller at
     Closing, or after the Closing); PROVIDED THAT Seller shall be responsible
     for the payment of all leasing commissions for any Lease extension under an
     extension option that has been exercised by a tenant under its Lease prior
     to the Closing even though such extension is not finalized until after the
     Closing.

     (c) Until the Closing, Seller shall keep the Property insured against fire,
     vandalism and other loss, damage and destruction in accordance with
     insurance policies and coverage currently in force for the Property as of
     the date of this Agreement. Except for the Environmental Policy currently
     held by Seller for the Property which shall be assigned to Purchaser at the
     Closing, Seller's insurance policies shall not be assigned to Purchaser at
     the Closing, and Purchaser shall be obligated to obtain its own insurance
     coverage from and after the Closing.

     (d) Until the Closing, Seller shall operate and maintain the Property in
     the manner being operated and maintained on the date of this Agreement.

     (e) Seller shall use reasonable efforts to complete the capital
     improvements described on EXHIBIT H attached hereto; PROVIDED THAT the
     completion of such capital improvements shall not be a condition to the
     Closing. Purchaser shall receive a credit against the Purchase Price for
     the amount of any uncompleted capital improvements pursuant to SECTION
     11(e).

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     9. SELLER'S CLOSING DELIVERIES.

     At least one (1) business day prior to the Closing, Seller shall deliver or
cause to be delivered to the Escrow Company the following (collectively, the
"SELLER CLOSING DOCUMENTS"):

     (a) A Grant Deed executed by Seller, in the form of EXHIBIT C attached
     hereto, conveying the Real Property to Purchaser free and clear of all
     claims, liens and encumbrances except the exceptions shown on the Proforma
     and matters arising by or through Purchaser (the "GRANT DEED").

     (b) A Bill of Sale executed by Seller, in the form of EXHIBIT D attached
     hereto, conveying to the Purchaser title to the Personal Property (the
     "BILL OF SALE").

     (c) An affidavit in the form of EXHIBIT E attached hereto, certifying that
     Seller is not a "foreign person" within the meaning of Section 1445(f)(3)
     of the Code (the "CERTIFICATE OF NON-FOREIGN STATUS").

     (d) An Assignment executed by Seller, in the form of EXHIBIT F attached
     hereto, assigning to Purchaser those Service Contracts which Purchaser has
     elected to take an assignment of, the License, any warranties, guaranties
     and indemnities relating to the Property and the Environmental Policy, to
     the extent that such items are assignable (the "ASSIGNMENT").

     (e) An Assignment of Leases executed by Seller, in the form of EXHIBIT G
     attached hereto, assigning to Purchaser all of Seller's interest under the
     Leases and the security deposits thereunder, together with the Maintenance
     Lease (the "ASSIGNMENT OF LEASES").

     (f) Written notices to the Tenants advising them of the change of ownership
     and directing them to pay rent and other charges under their respective
     Leases from and after the Closing as directed by Purchaser.

     (g) To the extent in Seller's possession, original Leases, together with
     all records, books of account and papers in Seller's possession relating to
     the construction, ownership and operations of the Property.

     (h) Keys and combinations to locked compartments within the Property.

     (i) The instruments, documents or certificates as are customarily required
     by the Title Company to be executed or provided by Seller as a condition to
     the issuance of the Title Policy at the Closing pursuant to the Proforma.

     (j) A California Franchise Tax Board Form 597-W, specifying that Seller has
     a permanent place of business in California and is qualified to do business
     in California.

                                       11
<PAGE>

     (k) An Assignment of Easement executed by Seller, Purchaser and Arrowhead
     Lake Association, in the form of EXHIBIT J attached hereto, assigning to
     Purchaser all of Seller's right, title and interest in the Easement,
     subject to the consent of Arrowhead Lake Association.

     10. PURCHASER'S CLOSING DELIVERIES.

     At least one (1) business day prior to the Closing, Purchaser shall deliver
to the Escrow Company (collectively, the "PURCHASER CLOSING DOCUMENTS"):

     (a) Such sums as required to pay Purchaser's share of the Closing costs,
     prorations, reimbursements and adjustments as set forth in SECTIONS 11 and
     12 herein, in immediately available funds.

     (b) Executed counterparts of the Loan Assumption Documents, if applicable,
     as set forth in SECTION 19 below.

     (c) A certificate stating that, as of the Closing, Purchaser had the
     opportunity to investigate all physical and economic aspects of the
     Property and to make all inspections and investigations of the Property
     which Purchaser deemed necessary or desirable to protect its interests in
     acquiring the Property, including, without limitation, review of the Leases
     (and the rights of the Tenants thereunder), building permits, certificates
     of occupancy, environmental audits and assessments, toxic reports, surveys,
     investigation of land use and development rights, development restrictions
     and conditions that are or may be imposed by governmental agencies,
     agreements with associations affecting or concerning the Property, the
     condition of title, soils and geological reports, engineering and
     structural tests, insurance contracts, contracts for work in progress,
     marketing studies, cost-to-complete studies, governmental agreements and
     approvals, architectural plans and site plans.

     (d) Such other documents, instruments or agreements which Purchaser may be
     required to deliver to Seller pursuant to the other provisions of this
     Agreement or which are reasonably necessary to consummate the transactions
     set forth herein.

     11. PRORATIONS, CREDITS AND ADJUSTMENTS.

     (a) The following shall be prorated and adjusted between Seller and
     Purchaser as of the day of the Closing, except as otherwise specified:

          (i) TAXES. General real estate, personal property and ad valorem taxes
and assessments, and any improvement or other bonds encumbering the Property,
for the current tax year for the Property shall be the responsibility of Seller
through the day before the Closing (which proration shall take into account
amounts paid by the Tenants for such taxes and assessments, or as reimbursement
thereof).

                                       12
<PAGE>

          (ii) OPERATING EXPENSES. All utility expenses for gas, water,
electricity, heat, fuel, sewer and other utilities relating to the Property
shall be the responsibility of Seller through the day before the Closing, based
on final readings done as of the day before the Closing, and Purchaser shall be
responsible for all such utility expenses accruing on and after the Closing, and
there shall be no other proration of such utility expenses. All insurance
premiums under Seller's existing policies relating to the Property shall be
Seller's responsibility through the day before the Closing, and, there shall be
no proration of such insurance premiums; none of Seller's insurance policies (or
any proceeds payable thereunder, except for the Environmental Policy and except
as expressly provided for in SECTION 14 below) will be assigned to Purchaser at
the Closing, and Purchaser shall be solely obligated to obtain any and all
insurance that it deems necessary or desirable. All payments under the Service
Contracts shall be the responsibility of Seller through the last day of the
calendar month in which the Closing occurs, with Purchaser responsible for all
amounts thereafter accruing under the Service Contracts, and there shall be no
other proration of amounts payable under the Service Contracts. Seller shall
receive a credit at the Closing in an amount equal to the Pre-Closing Allocable
Share (defined below) of amounts payable under the Leases in calendar year 2001
as "pass-throughs" or reimbursements for common area maintenance costs, taxes
and assessments and insurance premiums and other operating expenses relating to
the Property. As used in this SECTION 11, the "PRE-CLOSING ALLOCABLE SHARE" will
be a fraction, the numerator of which is the number of days in calendar year
2001 occurring up to but not including the Closing and the denominator of which
is 365. Purchaser shall receive a credit at the Closing in the amount equal to
Two Million Dollars ($2,000,000) for certain leasing commissions, tenant
improvement costs, capital expenditures and deferred maintenance on the Property
not described on EXHIBIT H attached hereto. The parties hereto agree that
Purchaser shall not assume the responsibility for the salaries or other payments
due to the nine (9) employees of DDRES that are currently working at the
Property, as such employees shall be terminated by Seller prior to the Closing.

          (iii) BASE RENT. Rent and other charges under the Leases (to the
extent such monies have actually been collected by Seller) shall be for the
account of Seller for the period through the day before the Closing, except that
Additional Rents (defined below) shall be prorated in accordance with SECTION
11(a)(iv) below. Rents and other charges under the Leases which are delinquent
as of the Closing shall not be prorated, and rents and other amounts received by
Purchaser after the Closing from a Tenant owing such delinquent rent or other
charges shall be applied (A) first, Purchaser's actual out-of-pocket costs of
collection incurred with respect to such Tenant; (B) second, to rents due from
such Tenant for the month in which such payment is received by Purchaser; (C)
third, to rents attributable to any period after the Closing which are past due
on the date of receipt; and (D) finally, to rents and other charges delinquent
as of the Closing (and Purchaser promptly shall remit such amounts to Seller).
Purchaser agrees that it shall use commercially reasonable efforts to collect
any such delinquent rents (PROVIDED, HOWEVER, that Purchaser shall have no
obligation to institute legal

                                       13
<PAGE>

proceedings, including an action for unlawful detainer, against a tenant owing
delinquent rents). Seller agrees to deliver to Purchaser any rents received by
Seller for the period from and after the Closing Date.

          (iv) ADDITIONAL RENTS. Any percentage rent, escalation charges for
real estate taxes, parking charges, operating and maintenance expenses,
pass-throughs for roof, parking area and other capital asset replacements
(including amortization payments), escalation rents or charges, electricity
charges, cost of living increases or any other charges of a similar nature other
than fixed or base rent under the Leases (collectively, the "Additional Rents")
shall be prorated as of the Closing Date between Purchaser and Seller, with
proration payments to be made on or before the date which is ninety (90) days
following the end of the calendar year in which the Closing occurs based on the
actual number of days of the year and month which shall have elapsed as of the
Closing Date. Prior to the Closing, Seller shall provide Purchaser on an
estimated basis with information regarding Additional Rents which were received
by Seller prior to Closing and the amount of reimbursable expenses paid by
Seller prior to Closing. If Seller's collections of such amounts is in excess of
the amounts actually paid by Seller for such items for the period prior to
Closing, then Purchaser shall receive a credit at Closing for the excess amounts
collected. Purchaser shall apply all such excess amounts to the charges owed by
Purchaser for such items for the period after the Closing and, if required by
the Leases, shall rebate or credit the tenants with any remainder. If it is
determined that the amount collected during Seller's ownership period was less
than the amounts actually paid by Seller for such items for the period prior to
the Closing, then the collection and remitting of such amounts shall be governed
by the provisions of subsection (iii) above regarding the post-closing
application of rents. With respect to reimbursable expenses paid by Seller prior
to Closing, but not billed to tenants prior to Closing, Seller will provide to
Purchaser all relevant information including supporting documentation and
Seller's calculation of the amount to be billed to each tenant. On or before the
date which is ninety (90) days following the end of the calendar year in which
the Closing occurs, Purchaser shall deliver to Seller a reconciliation of all
expenses reimbursable by tenants under the Leases, and the amount of Additional
Rents received by Seller and Purchaser relating thereto (the "RECONCILIATION").
Upon reasonable notice and during normal business hours, each party shall make
available to the other all information reasonably required to confirm the
Reconciliation. In the event of any overpayment of Additional Rents by the
tenants to Seller, Seller shall promptly, but in no event later than fifteen
(15) days after receipt of the Reconciliation, pay to Purchaser the amount of
such overpayment and Purchaser, as the landlord under the particular Leases,
shall pay or credit to each applicable tenant the amount of such overpayment. In
the event of an underpayment of Additional Rents by the tenants to Seller,
Purchaser shall pay to Seller the amount of such underpayment within fifteen
(15) days following Purchaser's receipt of any such amounts from the tenants.

          (v) SECURITY DEPOSITS. The amount of all unapplied security deposits
under the Leases shall be credited to Purchaser or paid in cash to Purchaser;

                                       14
<PAGE>

PROVIDED, HOWEVER, that if any tenant security deposit is in the form of a
letter of credit, promissory note or similar instrument, Seller shall use its
best efforts to cause such letter of credit, promissory note or other instrument
to be assigned and transferred to Purchaser no later than thirty (30) days after
the Closing, and there shall be no credit against the Purchase Price at the
Closing with respect to any such tenant security deposit.

          (vi) ADJUSTMENTS TO PRORATIONS. After the Closing, the parties shall
from time to time, as soon as is practicable after accurate information becomes
available and in any event within one (1) year following the Closing,
recalculate and reapportion any of the items subject to proration or
apportionment (i) which were not prorated and apportioned at the Closing because
of the unavailability of the information necessary to compute such proration, or
(ii) which were prorated or apportioned at the Closing based upon estimated or
incomplete information, or (iii) for which any errors or omissions in computing
prorations at the Closing are discovered subsequent thereto, and thereafter the
proper party shall be reimbursed based on the results of such recalculation and
reapportionment. Unless otherwise specified herein, all such reimbursements
shall be made on or before thirty (30) days after receipt of notice of the
amount due.

          (vii) PRIOR YEAR'S RECONCILIATION. If the Closing occurs before Seller
has performed the annual reconciliation of Additional Rents for the calendar
year immediately preceding the calendar year in which the Closing occurs, then
Seller shall, as soon as practicable after Closing, perform such reconciliation
at its sole cost and expense. Upon completion of such annual reconciliation,
Seller shall immediately deliver to Purchaser a detailed description of any
Additional Rents which are payable by or reimbursable to any present tenant (the
"PRIOR YEAR RECONCILIATION"). The Prior Year Reconciliation shall be accompanied
by all applicable back-up documentation, together with Seller's check for such
Additional Rents which are reimbursable to a tenant. Based upon Seller's
calculations, Purchaser shall send customary statements for reimbursement of
Additional Rents to tenants under the Leases based on the Prior Year
Reconciliation, and shall remit to Seller within thirty (30) days of receipt,
all sums so collected. If Seller's calculations show that Additional Rents have
been overpaid by any present tenant and Seller has submitted its check to
Purchaser for such amounts, Purchaser shall refund such Additional Rents to such
tenant.

          (viii) LOAN ASSUMPTION In connection with the Loan Assumption (as
defined in SECTION 19), accrued and unpaid interest, reserves, impounds or
escrow deposits, fees, charges and outstanding principal payable under the
Existing Indebtedness with respect to the period prior to the Closing shall be
the responsibility of Seller. Any unpaid interest, principal, reserves, charges,
impounds or escrow deposits shall be prorated for the month in which the Closing
occurs with Purchaser receiving a credit for any amounts which it pays and which
are attributable to the period before the Closing. Additionally, at the Closing,
Purchaser shall receive a credit for the amount of principal amortization paid
by

                                       15
<PAGE>

Seller on the Existing Indebtedness for the period commencing on October 1,
2001, through the Closing Date.

     (b) For purposes of calculating prorations, Purchaser shall be deemed to be
     in title to the Property, and, therefore, entitled to the income therefrom
     and responsible for the expenses thereof for the entire day upon which the
     Closing occurs. All such prorations shall be made on the basis of the
     actual number of days of the month which shall have elapsed as of the day
     of the Closing and based upon the actual number of days in the month and a
     three hundred sixty-five (365) day year. The amount of such prorations
     shall be initially performed by Seller and Purchaser at Closing but, except
     as set forth above, shall be subject to adjustment in cash after the
     Closing outside of escrow as and when complete and accurate information
     becomes available, if such information is not available at the Closing.
     Seller and Purchaser shall cooperate and use their best efforts to make
     such adjustments no later than sixty (60) days after the Closing (except
     with respect to property taxes, which shall be adjusted within sixty (60)
     days after the tax bills for the applicable period are received).

     (c) Without limiting the generality of the foregoing, Seller and Purchaser
     agree that, with respect to any property tax appeals or reassessments filed
     by Seller for tax years prior to the year in which the Closing occurs,
     Seller shall be entitled to the full amount of any refund or rebate
     resulting therefrom (subject to any requirement under the Leases to pay to
     the Tenants a share of any such refund or rebate, which shall be Seller's
     sole obligation), and with respect to any property tax appeals or
     reassessments filed by Seller for the tax year in which the Closing occurs,
     Seller and Purchaser shall share the amount of any rebate or refund
     resulting therefrom (after first paying to Seller all costs and expenses
     incurred by Seller in pursuing such appeal or reassessment) in proportion
     to their respective periods of ownership of the Property for such tax year
     (with Seller and Purchaser each obligated for any amount of such refund or
     rebate required to be paid to the Tenants for its respective period of
     ownership of the Property for such tax year).

     (d) Except as set forth in this SECTION 11, all items of income and expense
     which accrue for the period prior to the Closing will be for the account of
     Seller and all items of income and expense which accrue for the period on
     and after the Closing will be for the account of Purchaser. The provisions
     of this SECTION 11 shall survive the Closing.

     (e) Purchaser shall receive a credit against the Purchase Price for capital
     improvements shown on the attached EXHIBIT H not yet completed or paid for
     as of the Closing Date. The amount of the credit shall be the amount
     reasonably determined by DDRES, as approved by Purchaser and Seller, as the
     amount necessary to complete the capital improvements in accordance with
     the purchase order or contract for such capital improvement; provided,
     however, that the amount of the credit for each item may not exceed the
     lesser of (i) the amount set forth on EXHIBIT H, or (ii) if applicable, the
     amount set forth on the purchase order or construction contract for such
     item which remains unpaid. DDRES shall determine the amount of the credit
     no later than five (5) days prior to the Closing Date.

                                       16
<PAGE>

     12. CLOSING.

     The purchase and sale contemplated herein shall close (the "CLOSING") on or
before February 28, 2002, (the "CLOSING DATE"), subject to extension by Seller
in order to permit satisfaction of Seller's Conditions Precedent; PROVIDED THAT
in no event shall the Closing Date be later than April 30, 2002. As used herein,
the term "Closing" means the date and time that Seller's Grant Deed is recorded
in the Official Records.

     13. CLOSING COSTS.

     (a) Seller shall pay any documentary transfer tax due in connection with
     the consummation of the transaction contemplated herein, the premium for
     the Title Policy equal to the amount of a standard coverage owner's policy
     and fifty percent (50%) of all other escrow and closing costs.

     (b) Seller shall also pay all costs and expenses incurred in connection
     with the Loan Assumption (including, without limitation, any loan
     assumption fee, Beneficiary's out-of-pocket expenses, legal fees, title,
     escrow, documentation and appraisal costs relating thereto, and lender's
     title insurance policy).

     (c) Purchaser shall pay any additional title insurance premium payable in
     connection with Purchaser obtaining an extended coverage owner's policy and
     any lender's policy of title insurance, the cost of any title endorsements,
     any reinsurance of the risk covered by the Title Policy, the fee for
     recording the Grant Deed and any other documents Purchaser elects to record
     in the Official Records, and fifty percent (50%) of all other escrow and
     closing costs.

     (d) Each party shall bear the expense of its own counsel.

     (e) If the sale of the Property contemplated hereunder does not occur
     because of a default by Purchaser, all escrow cancellation and title fees
     shall be paid by Purchaser. If the sale of the Property does not occur
     because of a default by Seller, all escrow cancellation and title fees
     shall be paid by Seller. If the sale of the Property contemplated hereunder
     does not occur because of the failure of a Seller's Condition Precedent or
     a Purchaser's Condition Precedent, in each case other than due to default,
     Seller shall pay all escrow cancellation and title fees.

     14. RISK OF LOSS; CASUALTY AND CONDEMNATION; MATERIAL ADVERSE CHANGE.

     (a) If prior to the Closing, the Improvements, or any part thereof, are
     materially damaged (as set forth in SECTION 14(d)), Purchaser shall have
     the right, exercisable by giving written notice to Seller within five (5)
     days after receiving written notice of such damage or destruction (but in
     any event prior to the Closing), either (i) to terminate this Agreement, in
     which case the documents in

                                       17
<PAGE>

     escrow shall be returned to the party depositing the same, and neither
     party shall have any further rights or obligations under this Agreement,
     except for those obligations that are to survive the termination of this
     Agreement, as expressly set forth elsewhere in this Agreement, or (ii) to
     accept the Property in its then condition and to proceed with the Closing
     without any abatement or reduction in the Purchase Price (other than a
     credit for any deductible or any insurance proceeds received by Seller
     prior to Closing, less Seller's actual out-of-pocket expenses incurred to
     obtain such insurance proceeds) and receive an assignment of all of
     Seller's right to any insurance proceeds payable by reason of such damage
     or destruction. A failure by Purchaser to notify Seller in writing within
     such five (5) day period shall be deemed an election to proceed under
     CLAUSE (ii) above. If Purchaser elects (or is deemed to elect) to proceed
     under CLAUSE (ii) above, Seller shall not compromise, settle or adjust any
     claims to such proceeds without Purchaser's prior written consent.

     (b) If prior to the Closing, all or any material portion (as set forth in
     SECTION 14(d)) of the Property is subject to a taking by public authority,
     Purchaser shall have the right, exercisable by giving written notice to
     Seller within five (5) days after receiving written notice of such taking
     (but in any event prior to the Closing), either (i) to terminate this
     Agreement, in which case the documents in escrow shall be returned to the
     party depositing the same, and neither party shall have any further rights
     or obligations under this Agreement, except for those obligations that are
     to survive the termination of this Agreement, as expressly set forth
     elsewhere in this Agreement, or (ii) to accept the Property in its then
     condition, without any abatement or reduction in the Purchase Price (other
     than a credit for any award received by Seller prior to Closing, less
     Seller's actual out-of-pocket expenses incurred to obtain such award), and
     receive an assignment of all of Seller's rights to any condemnation award
     payable by reason of such taking. A failure by Purchaser to notify Seller
     in writing within such five (5) day period shall be deemed an election to
     proceed under CLAUSE (ii) above. If Purchaser elects (or is deemed to
     elect) to proceed under CLAUSE (ii) above, Seller shall not compromise,
     settle or adjust any claims to such award without Purchaser's prior written
     consent. As used in this SECTION 14, "TAKING" shall mean any transfer of
     the Property or any portion thereof to a governmental entity or other party
     with appropriate authority, by exercise of the power of eminent domain.

     (c) If prior to the Closing, any non-material portion of the Property is
     damaged or subject to a taking, Purchaser shall accept the Property in its
     then condition (without any abatement or reduction in the Purchase Price
     other than a credit for any deductible or any insurance proceeds received
     by Seller prior to Closing, less Seller's actual out-of-pocket expenses
     incurred to obtain such insurance proceeds) and proceed with the Closing,
     in which case Purchaser shall be entitled to an assignment of all of
     Seller's rights to any insurance proceeds or any award in connection with
     such taking, as the case may be. If any such non-material damage or taking
     occurs, Seller shall not compromise, settle or adjust any claims to such
     insurance proceeds or such award, as the case may be, without Purchaser's
     prior written consent.

                                       18
<PAGE>

     (d) For the purpose of this SECTION 14, damage to the Property or a taking
     of a portion thereof shall be deemed to involve a material portion thereof
     if:

          (i) in the case of damage to the Property, the reasonably estimated
cost to repair the damage exceeds $400,000; or

          (ii) in the case of a taking, such taking would, in the reasonable
opinion of Purchaser, leave remaining a balance of the Real Property, which, due
either to the area taken or the location of the part taken would not, under
applicable zoning laws or building regulations then prevailing, readily
accommodate a new or restructured building or buildings of a type and size
generally similar to the building or buildings existing on the date hereof, or
would result in inadequate parking or lack of reasonable access to public roads.

     (e) If prior to the Closing, a Material Adverse Change occurs to the
     Property, Purchaser shall have the right, exercisable by giving written
     notice to Seller within five (5) days after the occurrence of such Material
     Adverse Change (but in any event prior to the Closing), either (i) to
     terminate this Agreement, in which case the documents in escrow shall be
     returned to the party depositing the same, and neither party shall have any
     further rights or obligations under this Agreement, except for those
     obligations that are to survive the termination of this Agreement, as
     expressly set forth elsewhere in this Agreement, or (ii) to accept the
     Property in its then condition, without any abatement or reduction in the
     Purchase Price. A failure by Purchaser to notify Seller in writing within
     such five (5) day period shall be deemed an election to proceed under
     CLAUSE (ii) above. As used in this SECTION 14(e), "MATERIAL ADVERSE CHANGE"
     means (1) the default by any tenant under a Lease with a base rent equal to
     or in excess of $300,000 per year and the failure to cure such default
     under the terms of such Lease, (2) any tenant under a Lease with a base
     rent equal to or in excess of $300,000 per year files for relief as debtor
     or bankrupt under Title 11 of the U.S. Code or like provision of law or is
     determined insolvent by a court proceeding or (3) the filing of a Material
     Lawsuit. "MATERIAL LAWSUIT" means a claim filed against Seller or the
     Property that either restricts the sale of the Property or is an uninsured
     claim seeking damages in excess of $500,000.

     (f) Seller agrees to give Purchaser notice of any taking, damage or
     destruction of the Property or Material Adverse Change promptly after
     Seller obtains knowledge thereof. If a taking or casualty as set forth in
     this SECTION 14 shall occur, Seller shall initiate all actions required to
     adjust, compromise and collect the awards payable by the condemning
     authority or the proceeds payable under the applicable policy or policies
     of casualty insurance. Purchaser shall have the right (but not the
     obligation) to participate with Seller in the initiation of all such
     actions and, in any event, Seller shall consult with, and keep Purchaser
     advised of, Seller's progress in connection therewith.

                                       19
<PAGE>

     15. DEFAULT.

     (a) If Seller defaults in its obligations under this Agreement, Purchaser
     shall be entitled to have all remedies at law and in equity; PROVIDED,
     HOWEVER, that in an action for damages, Purchaser shall be limited to
     recovering its actual costs and damages but not any consequential damages.

     (b) Notwithstanding clause (a) above, prior to October 31, 2001, Seller may
     terminate this Agreement in its sole and absolute discretion if it obtains
     an offer to purchase the Property that it deems in its sole and absolute
     discretion to be superior to the terms of this Agreement. If Seller elects
     to terminate this Agreement pursuant to the preceding sentence, such
     termination shall not be a default by Seller under this Agreement and, upon
     such termination, neither party shall have any further rights or
     obligations under this Agreement, except for those obligations that are
     expressly to survive the termination of this Agreement.

     16. BROKER'S COMMISSION.

     Purchaser and Seller each represent and warrant to the other that no
brokerage commission, finder's fee or other compensation is due or payable with
respect to the transaction contemplated hereby, except for that certain $100,000
commission to be paid by Seller to CB Richard Ellis pursuant to that certain
Sale Listing Agreement, dated as of September 1, 2001, by and between Burnham
Pacific Properties, Inc., a Maryland corporation, and CB Richard Ellis, a
Delaware corporation. Purchaser shall indemnify, defend, and hold the Seller
Parties harmless from and against any losses, damages, costs and expenses
(including, but not limited to, reasonable attorneys' fees and costs) incurred
by the Seller Parties, or each of them, by reason of any breach or inaccuracy of
the Purchaser's representations and warranties contained in this SECTION 16.
Seller shall indemnify, defend, and hold Purchaser harmless from and against any
losses, damages, costs and expenses (including, but not limited to, reasonable
attorneys' fees and costs) incurred by Purchaser by reason of any breach or
inaccuracy of Seller's representations and warranties contained in this SECTION
16. The provisions of this SECTION 16 shall survive the Closing.

     17. ESCROW.

     (a) INSTRUCTIONS. Within two (2) days after execution of this Agreement,
     Purchaser and Seller each shall deposit a copy of this Agreement executed
     by such party (or either of them shall deposit a copy executed by both
     Purchaser and Seller) with Escrow Company. This Agreement, together with
     such further instructions, if any, as the parties shall jointly provide to
     Escrow Company by written agreement, shall constitute the escrow
     instructions. If any requirements relating to the duties or obligations of
     Escrow Company hereunder are not acceptable to Escrow Company, or if Escrow
     Company requires additional instructions, the parties hereto agree to make
     such deletions, substitutions and additions hereto as counsel for Purchaser
     and Seller shall mutually approve, which additional instructions shall not
     substantially alter the terms of this Agreement unless otherwise expressly
     agreed to by Seller and Purchaser.

                                       20
<PAGE>

     (b) DEPOSITS INTO ESCROW. Seller shall make its deposits into escrow in
     accordance with SECTION 9. Purchaser shall make its deposits into escrow in
     accordance with SECTION 10. Escrow Company is authorized to close the
     escrow only if and when: (i) Escrow Company has received all items to be
     delivered by Seller and Purchaser pursuant to SECTIONS 9 and 10; and (ii)
     Title Company can and will issue the Title Policy concurrently with the
     Closing.

     (c) CLOSE OF ESCROW. Provided that Escrow Company shall not have received
     written notice in a timely manner from Purchaser or Seller of the failure
     of any condition to the Closing or of the termination of the escrow, AND if
     and when Purchaser and Seller have deposited into escrow the matters
     required by this Agreement and Title Company can and will issue the Title
     Policy concurrently with the Closing, Escrow Company shall:

          (i) Deliver to Purchaser: (1) the Grant Deed by causing it to be
     recorded in the Official Records and immediately upon recording delivering
     to Purchaser a conformed copy of the Grant Deed; (2) the Bill of Sale; (3)
     the Certificate of Non-Foreign Status; (4) the Assignment; (5) the
     Assignment of Leases by causing it to be recorded in the Official Records
     and immediately upon recording delivering to Purchaser; and (7) all other
     Seller Closing Documents;

          (ii) Deliver to Seller: the Purchase Price, after satisfying the
     Closing costs, prorations and adjustments and the broker commission to be
     paid by Seller, pursuant to SECTIONS 11, 12 and 16, respectively, and the
     Purchaser Closing Documents;

          (iii) Deliver to Purchaser: any funds deposited by Purchaser, and any
     interest earned thereon, in excess of the amount required to be paid by
     Purchaser hereunder; and

          (iv) Deliver the Title Policy issued by Title Company to Purchaser.

     (d) REAL ESTATE REPORTING PERSON. Escrow Company is designated the "real
     estate reporting person" for purposes of section 6045 of title 26 of the
     United States Code and Treasury Regulation 1.6045-4 and any instructions or
     settlement statement prepared by Escrow Company shall so provide. Upon the
     consummation of the transaction contemplated by this Agreement, Escrow
     Company shall file Form 1099 information return and send the statement to
     Seller as required under the aforementioned statute and regulation.

     18. RELEASE BY PURCHASER

     (a) Except for Seller's obligations under the complaints described in
     SECTION 20(a), Purchaser, and any person or entity claiming by, through or
     under Purchaser, each hereby fully and irrevocably releases, discharges and
     waives its rights to recover from Seller, any and all claims that Purchaser
     may now have or hereafter acquire against Seller for any cost, loss, claim,
     penalty, fine, lien, judgment, liability, damage, expense, action or cause
     of action (including, without limitation attorneys' fees and costs),
     whether foreseen or unforeseen, direct or

                                       21
<PAGE>

     indirect, known or unknown, arising from or related to the existence or
     presence of Hazardous Substances in, on, under, or about the Property or
     the non-compliance of the Property with any Environmental Laws.
     "HAZARDOUS SUBSTANCES" means any materials, substances or wastes defined
     or classified as "hazardous" or "toxic" under any Environmental Law,
     including, without limitation, lead-based paint, asbestos, methane gas,
     urea formaldehyde insulation, petroleum or petroleum products and
     polychlorinated biphenyls. "ENVIRONMENTAL LAWS" means the Comprehensive
     Environmental Response, Compensation and Liability Act, 42 U.S.C.
     Section 9601 ET. SEQ., as amended by the Superfund Amendments and
     Reauthorization Act; the Resource Conservation and Recovery Act, 42
     U.S.C. Section 6901 ET SEQ., as amended by the Hazardous and Solid Waste
     Amendments of 1984; the Federal Insecticide, Fungicide, and Rodenticide
     Act, 7 U.S.C. Section 136 ET. SEQ.; the Hazardous Materials
     Transportation Act (49 U.S.C. Section 1801 ET SEQ.); the Emergency
     Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 ET.
     SEQ.; the Toxic Substance Control Act, 15 U.S.C. Section 2601 ET. SEQ.;
     the Atomic Energy Act, 42 U.S.C. Section 2011 ET. SEQ.; the Clean Water
     Act, 33 U.S.C. Section 1251 ET. SEQ.; and the Clean Air Act, 42 U.S.C.
     Section 7401 ET SEQ., the Hazardous Substance Account Act, Cal. Health &
     Safety Code Section 25300 ET SEQ., California Porter-Cologne Water
     Quality Control Act, Cal. Water Code Section 13000 ET SEQ., and the
     California Occupational Safety and Health Act of 1973, Cal. Labor Code
     Section 6300 ET SEQ.; and any comparable federal or state laws,
     regulations and ordinances.

     (b) Purchaser further acknowledges and agrees that this release shall be
     given full force and effect according to each of its expressed terms and
     provisions, including, but not limited to, those relating to unknown and
     unsuspected claims, damages and causes of action. As a material covenant
     and condition of this Agreement, Purchaser agrees that in the event of
     the presence of any Hazardous Substances, or any other environmental
     conditions affecting the Property, Purchaser shall look solely to
     persons and entities other than Seller for any redress or relief. With
     respect to the release set forth herein relating to unknown and
     unsuspected claims, Purchaser hereby acknowledges that such waiver and
     release is made with the advice of counsel and with full knowledge and
     understanding of the consequences and effects of such waiver, and that
     such waiver is made with the full knowledge, understanding and agreement
     that California Civil Code Section 1542 provides as follows, and that
     the protection afforded by said Code Section is hereby waived:

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

     Upon consummation of the Closing hereunder, the foregoing release shall be
     deemed to be restated and made again as of the Closing Date and shall
     survive the Closing.

                                       22
<PAGE>

     19. LOAN ASSUMPTION

     (a) EXISTING INDEBTEDNESS. The Property is subject to a deed of trust lien
     in favor of LaSalle National Bank, as Trustee for the Holders of Asset
     Securitization Corporation Commercial Mortgage Pass-Through Certificates,
     Series 1997 D-4 (as assignee of Nomura Asset Capital Corporation)
     ("BENEFICIARY"), securing a note in the original principal amount of
     $19,800,000, with interest at the rate of 9.2% per annum, with equal
     monthly payments of principal and interest of $162,172.82, and a current
     principal balance as of October 1, 2001 of $19,175,519.83 (the "EXISTING
     INDEBTEDNESS"). For purposes of this Agreement, the term "EXISTING
     INDEBTEDNESS" refers to the instrument evidencing the deed of trust lien,
     all modifications thereto, the note and allonges thereto which are secured
     by the deed of trust lien, and any all assignments, security agreements,
     guarantees, and all other documents security said note.

     (b) LOAN ASSUMPTION. As additional consideration to and as a material
     inducement for Seller to enter into this Agreement and consummate the
     transaction contemplated hereby, Purchaser shall assume as of the Closing
     the Existing Indebtedness (such assumption being referred to as the "LOAN
     ASSUMPTION"), subject to Beneficiary's approval of the Loan Assumption. If
     Beneficiary does not approve the Loan Assumption, Purchaser may terminate
     this Agreement, in which case the documents in escrow shall be returned to
     the party depositing the same, and neither party shall have any further
     rights or obligations under this Agreement, except for those obligations
     that are to survive the termination of this Agreement, as expressly set
     forth elsewhere in this Agreement.

     (c) LOAN ASSUMPTION DOCUMENTS. If the Loan Assumption is approved by
     Beneficiary, Purchaser shall (i) execute and deliver to the Beneficiary all
     documents necessary to consummate the Loan Assumption, as required by the
     Beneficiary (the "LOAN ASSUMPTION DOCUMENTS"), and (ii) cause Beneficiary
     to release Seller (and any other party currently obligated under the
     documents evidencing or securing the Existing Indebtedness) from any and
     all obligations relating to the Existing Indebtedness arising or accruing
     from and after the Closing Date (with the form of such release documents to
     be acceptable to Seller and in the standard form obtained by Seller in
     previous assumption transactions). Purchaser shall be responsible for
     obtaining Beneficiary's consent to and approval of the Loan Assumption, at
     Seller's sole cost and expense (except as provided in SECTIONS 11 and 13)),
     but Seller shall reasonably cooperate with Purchaser's efforts. In no event
     shall the Outside Closing Date be delayed by reason of Purchaser's
     inability to obtain Beneficiary's consent or approval.

     20. INDEMNIFICATION

     (a) Seller shall indemnify, defend and hold harmless Purchaser and its
     shareholders, directors, officers, members, partners, employees,
     representatives

                                       23
<PAGE>

     and agents, and their respective successors and assigns (collectively,
     the "INDEMNIFIED PURCHASER PERSONS") from and against any claims,
     actions, suits, demands, losses, damages, liabilities, obligations,
     judgments, settlements, awards, penalties, costs or expenses, including,
     without limitation, reasonable attorneys' fees and expenses
     (collectively, "LOSSES") incurred or suffered by any Indemnified
     Purchaser Person that results from, relates to or arises out of and
     included in the following complaints: (i) ROBERT L. BELL AND BELL
     ACQUISITIONS, INC. V. BURNHAM PACIFIC OPERATING PARTNERSHIP, L.P., ET
     AL, Case No. SCVSS-076639, Superior Court, San Bernardino County,
     California; (ii) ROBERT BAKER, ET AL V. BPP/ARROWHEAD L.P., ET AL, Case
     No. 01CC06062, Superior Court, Orange County, California; (iii) HODSON
     V. BURNHAM PACIFIC PROPERTIES, Case No. SCVSS-079157, Superior Court,
     San Bernardino County, California; (iv) SPOA V. BURNHAM PACIFIC
     PROPERTIES, INC. ET AL, Case No. SCVSS-077639, Superior Court, San
     Bernardino County, California; (v) YORE V. BURNHAM PACIFIC PROPERTIES,
     Case No. STP15420, San Bernardino County, California; (vi) KIMBERLY DRUM
     V. STATER BROTHERS MARKETS AND BURNHAM PACIFIC PROPERTIES, Case No.
     SCVSS81287, Superior Court, San Bernardino County, California; and (vii)
     any claim filed by Pam Houske relating to a slip-and-fall injury that
     occurred on November 5, 2001; PROVIDED THAT, Seller shall have sole
     control of the litigation and/or settlement of the abovementioned
     complaints. Purchaser shall be responsible for any disputes relating to
     the Property and arising out of events from and after the Closing Date,
     including, without limitation, liability for overcharging pass-through
     expenses for the period from and after the Closing.

     (b) Notice:

          (i) The respective indemnified party under the foregoing provisions
(the "INDEMNIFIED PARTY") shall give the indemnifying party (the "INDEMNIFYING
PARTY") prompt notice of any Losses incurred (or likely to be incurred) by the
Indemnified Party with respect to any claim or assertion of claims by a third
party ("THIRD PARTY CLAIM") for which indemnification is available hereunder and
the Indemnifying Party may (A) prior to the commencement of any proceedings in
connection with such Losses, undertake the negotiation of any resolution of the
dispute relating to such Losses, including without limitation any settlement or
release, or (B) undertake the defense of any proceeding (including any
alternative dispute resolution proceeding) regarding such Losses by selecting
legal counsel who shall be reasonably acceptable to the Indemnified Party.

          (ii) Provided the Indemnifying Party shall have undertaken the
Indemnified Party's defense of a Third Party Claim with legal counsel reasonably
acceptable to the Indemnified Party, and shall have so notified the Indemnified
Party, the Indemnified Party shall be entitled to participate at its own expense
in the aforesaid negotiation or defense of any claim relating to such Losses
(subject to reimbursement to the limited extent provided in SECTION 20(c)(v)),
but such negotiations or defense shall be controlled by counsel to the
Indemnifying Party.

                                       24
<PAGE>

          (iii) The Indemnifying Party shall not be liable for payments relating
to the resolution of any dispute or any settlement of any litigation or
proceeding effected without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. The Indemnifying Party shall not,
without the Indemnified Party's written consent, resolve any dispute or settle
or compromise any claim regarding Losses from a Third Party Claim or consent to
entry of any judgment which would impose an injunction or other equitable relief
upon the Indemnified Party or which does not include as an unconditional term
thereof the release by the claimant or the plaintiff of the Indemnified Party
from all liability in respect of any such Losses.

          (iv) Each party hereto agrees to give the other party prompt notice of
any Losses (or possible Losses) asserted against it which might be Losses for
which indemnity could be sought against the other party, but the failure to give
such notice shall not release the Indemnifying Party of its obligations under
this SECTION 20(c), expect to the extent of the actual harm suffered thereby.

          (v) If the Indemnifying Party fails to timely undertake negotiation of
any dispute or defend, contest or otherwise protect against any claim or suit
with respect to a Third Party Claim, and to so notify the Indemnified Party, the
Indemnified Party may, but will not be obligated to, defend, contest or
otherwise protect against the same, and make any compromise or settlement
thereof and recover the entire costs thereof from the Indemnifying Party,
including reasonable attorneys' and experts' fees, disbursements and all amounts
paid as a result of such claim or suit or the compromise or settlement thereof;
PROVIDED, HOWEVER, that if the Indemnifying Party undertakes negotiation of any
dispute and the defense of such matter in accordance with and subject to the
above terms of this SECTION 20, the Indemnified Party shall not be entitled to
recover from the Indemnifying Party for its costs incurred thereafter in
connection therewith other than the reasonable costs of investigation undertaken
by the Indemnified Party and reasonable costs of providing assistance. The
Indemnified Party shall cooperate and provide such assistance as the
Indemnifying Party may reasonably request in connection with the negotiation of
any dispute and the defense of the matter subject to indemnification and the
Indemnifying Party shall reimburse the Indemnified Party's reasonable costs
incurred thereafter in connection with such cooperation and assistance.

     21. MISCELLANEOUS.

     (a) Each individual and entity executing this Agreement represents and
     warrants that he, she or it has the capacity set forth on the signature
     pages hereof with full power and authority to bind the party on whose
     behalf he, she or it is executing this Agreement to the terms hereof.

     (b) This Agreement is the entire agreement between the parties hereto with
     respect to the subject matter hereof and supersedes all prior agreements
     and understandings, whether oral or written, between the parties with
     respect to the matters contained in this Agreement. Any waiver,
     modification, consent or acquiescence with respect to any provision of this
     Agreement shall be set forth in writing and duly executed by or in behalf
     of the party to be bound thereby. No

                                       25
<PAGE>

     waiver by any party of any breach hereunder shall be deemed a waiver of any
     other or subsequent breach.

     (c) 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. The signature page of any
     counterpart may be detached therefrom without impairing the legal effect of
     the signature(s) thereon provided such signature page is attached to any
     other counterpart identical thereto except having additional signature
     pages executed by other parties to this Agreement attached thereto.

     (d) Time is of the essence in the performance of and compliance with each
     of the provisions and conditions of this Agreement.

     (e) Any communication, notice or demand of any kind whatsoever which either
     party may be required or may desire to give to or serve upon the other
     shall be in writing and delivered by personal service (including express or
     courier service), by electronic communication, whether by telex, telegram
     or telecopy (if confirmed in writing sent by registered or certified mail,
     postage prepaid, return receipt requested), or by registered or certified
     mail, postage prepaid, return receipt requested, addressed as follows:

Purchaser:                 LAV, LLC
                           100 Bush Street, Suite 2600
                           San Francisco, California 94104
                           Attention:  Mr. Scott C. Verges
                           Facsimile: 415-352-1711

Seller:                    Burnham Pacific Properties, Inc.
                           110 West A Street, Suite 900
                           San Diego, California 92101
                           Attention: Mr. Michael Rubin
                           Facsimile: 619-652-4711

With a copy to:            O'Melveny & Myers LLP
                           400 South Hope Street
                           Los Angeles, California 90071-2899
                           Attention: Mitchell B. Menzer, Esq.
                           Facsimile:  (213) 430-6407

Escrow Company:            Chicago Title Company
                           3703 Camino Del Rio South, Suite 100
                           San Diego, California 92108
                           Attention:  Ms. Kathy Robinson
                           Facsimile:  ________________

Title Company:             Chicago Title Company
                           3703 Camino Del Rio South, Suite 100
                           San Diego, California 92108
                           Attention:  Ms. Kathy Robinson
                           Facsimile:  ________________

                                       26
<PAGE>

Any party may change its address for notice by written notice given to the other
in the manner provided in this Section. Any such communication, notice or demand
shall be deemed to have been duly given or served on the date personally served,
if by personal service, on the date of confirmed dispatch, if by electronic
communication, or three (3) days after being placed in the U.S. Mail, if mailed.

     (f) The parties agree to execute such instructions to Escrow Company and
     Title Company as may be reasonably necessary to carry out the provisions of
     this Agreement, and, at any time and from time to time after the Closing,
     to execute, acknowledge where appropriate and deliver such further
     instruments and other documents (and to bear its own costs and expenses
     incidental thereto) and to take such other actions as the other of them may
     reasonably request in order to carry out the intent and purpose of this
     Agreement; PROVIDED, HOWEVER, that neither Seller nor Purchaser shall be
     obligated, pursuant to this SECTION 21(f), to incur any expense of a
     material nature and/or to incur any material obligations in addition to
     those set forth in this Agreement and/or its respective closing documents.

     (g) The making, execution and delivery of this Agreement by the parties
     hereto has been induced by no representations, statements, warranties or
     agreements other than those expressly set forth herein.

     (h) 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.

     (i) The language in all parts of this Agreement shall be in all cases
     construed simply according to its fair meaning and not strictly for or
     against any of the parties hereto. 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. References to "Sections" are to
     Sections of this Agreement, unless otherwise specifically provided.

     (j) This Agreement shall be governed by and construed in accordance with
     the laws of the State of California.

     (k) If any action is brought by either party against the other party,
     relating to or arising out of this Agreement, the transaction described
     herein or the enforcement hereof, the prevailing party shall be entitled to
     recover from the other party reasonable attorneys' fees, costs and expenses
     incurred in connection with the prosecution or defense of such action. For
     purposes of this Agreement, the term "ATTORNEYS' FEES" or "ATTORNEYS' FEES
     AND COSTS" shall mean the fees and

                                       27
<PAGE>

     expenses of counsel to the parties hereto, which may include printing,
     photostating, duplicating and other expenses, air freight charges, and fees
     billed for law clerks, paralegals and other persons not admitted to the bar
     but performing services under the supervision of an attorney, and the costs
     and fees incurred in connection with the enforcement or collection of any
     judgment obtained in any such proceeding. The provisions of this SECTION
     21(k) shall survive the entry of any judgment, and shall not merge, or be
     deemed to have merged, into any judgment.

     (l) 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. Neither this Agreement nor any of the rights or obligations of
     Seller or Purchaser hereunder shall be transferred or assigned by Seller or
     Purchaser without the prior written consent of the non-assigning party,
     except that Purchaser may assign this Agreement to an affiliate of
     Purchaser, PROVIDED THAT no such assignment shall relieve Purchaser of its
     obligations under this Agreement, and provided further that the assignee
     shall assume for Seller's benefit the obligations of Purchaser under this
     Agreement.

     (m) EXHIBITS A through J, inclusive are incorporated herein by reference.

     (n) Notwithstanding anything to the contrary contained herein, this
     Agreement shall not be deemed or construed to make the parties hereto
     partners or joint venturers, or to render either party liable for any of
     the debts or obligations of the other, it being the intention of the
     parties to merely create the relationship of Seller and Purchaser with
     respect to the Property to be conveyed as contemplated hereby.

     (o) This Agreement shall not be recorded or filed in the public land or
     other public records of any jurisdiction by either party and any attempt to
     do so may be treated by the other party as a breach of this Agreement.

     (p) Each party agrees that, except as otherwise set forth in this Agreement
     or provided by law or unless compelled by an order of a court, it shall
     keep the contents of this Agreement and any information related to the
     transaction contemplated hereby confidential (except that Purchaser may
     disclose such matters in accordance with the provisions of SECTION 7 above)
     and further agrees to refrain from generating or participating in any
     publicity statement, press release, or other public notice regarding this
     transaction without the prior written consent of the other party unless
     required under applicable law or by a court order. The provisions of this
     SECTION 21(p) shall survive the Closing or any termination of this
     Agreement and shall not be merged into any instrument or conveyance
     delivered at the Closing.

     (q) Seller and Purchaser agree that it is their specific intent that no
     broker shall be a party to or a third party beneficiary of this Agreement
     or the escrow; and further that the consent of a broker shall not be
     necessary to any agreement, amendment, or document with respect to the
     transaction contemplated by this Agreement.

                                       28
<PAGE>

     (r) If any of the dates specified in this Agreement shall fall on a
     Saturday, a Sunday, or a holiday, then the date of such action shall be
     deemed to be extended to the next business day.

                            [SIGNATURES ON NEXT PAGE]

                                       29
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.

SELLER:                                  BPP/ARROWHEAD, L.P.,
                                         a Delaware limited partnership

                                         By: BPP/Arrowhead, Inc.
                                             a Delaware corporation,
                                             its General Partner

                                             By: /S/ MICHAEL L. RUBIN
                                                 --------------------------
                                             Name: Michael L. Rubin
                                             Its: Senior Vice President

                                             By: /S/ MARC T. ARTINO
                                                 --------------------------
                                             Name: Marc T. Artino
                                             Its: Senior Vice President

PURCHASER:                               LAV, LLC,
                                         a Delaware limited liability company

                                         By: Verges-Platt Manager, Inc.,
                                             a Delaware corporation,
                                             Its Managing Member

                                             By:  /S/ SCOTT C. VERGES
                                                  -------------------------
                                             Name: Scott C. Verges
                                             Its: President

                                      S-1

<PAGE>

                                    EXHIBIT A

                          LEGAL DESCRIPTION OF THE LAND

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      A-1
<PAGE>

                                   EXHIBIT A-1

                       DESCRIPTION OF THE MAINTENANCE YARD

     The Premises as described under that certain Shopping Center Lease, dated
as of July1, 1998, by and between Arrowhead Joint Venture, a California general
partnership, as landlord, and Seller, as tenant, which are described as follows:

1.   Maintenance Yard and Building, totaling approximately 10,000 square feet,
     located on APN # 0335-101-390-000.

2.   Floor Area of Maintenance Building, approximately 2,500 square feet.

3.   The Premises are near the shopping center commonly known as Lake Arrowhead
     Village.

                                      A-1-1
<PAGE>

                                    EXHIBIT B

                               SCHEDULE OF LEASES

                                [TO BE ATTACHED]

                                      B-1

<PAGE>

                                    EXHIBIT C

                               FORM OF GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL GRANT
DEED AND TAX STATEMENTS TO:
------------------------

------------------------

------------------------

GRANT DEED

The undersigned Grantor requests that the Documentary Transfer Tax not be made a
part of the public records.

     FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
BPP/ARROWHEAD, L.P., a Delaware limited partnership ("GRANTOR"), hereby GRANTS
to LAV, LLC, a Delaware limited liability company ("GRANTEE") that certain real
property located in the County of San Bernardino, State of California and more
particularly described in EXHIBIT A attached hereto and incorporated herein by
this reference (the "PROPERTY"), together with all rights, privileges, easements
and appurtenances held by Grantor appertaining to the Property, SUBJECT TO those
matters of record and any and all applicable laws, ordinances, rules,
regulations and permits affecting the Property or governing the use thereof.

                                      C-1

<PAGE>

     IN WITNESS WHEREOF, Grantor has caused its duly authorized representative
to execute this instrument as of the date hereinafter written.

DATED:  ______________, 2001                GRANTOR:

                                            BPP/ARROWHEAD, L.P.,
                                            a Delaware limited partnership

                                            By: BPP/Arrowhead, Inc.
                                                a Delaware corporation,
                                                its general partner

                                                By:
                                                    ----------------------------
                                                Name:
                                                      --------------------------
                                                Its:
                                                     ---------------------------

                                                By:
                                                    ----------------------------
                                                Name:
                                                      --------------------------
                                                Its:
                                                     ---------------------------

Tax Assessor's Parcel Nos. 335-101-45, 335-101-46, 335-101-47, 335-101-48,
                           ----------------------------------------------
335-101-49, 335-101-50
----------------------

                                      C-2

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF CALIFORNIA           )
                              )
COUNTY OF ____________________)

                  On _______________________ 2001, before me,
____________________________________________________a Notary Public in and for
said state, personally appeared _______________________________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

     WITNESS my hand and official seal.

     -----------------------------------------

[SEAL]

                                      C-3

<PAGE>

                        STATEMENT OF TAX DUE AND REQUEST
                     THAT TAX DECLARATION NOT BE MADE A PART
                             OF THE PERMANENT RECORD
                              IN THE OFFICE OF THE
                                 COUNTY RECORDER

(PURSUANT TO CAL. REV. AND TAX CODE SECTION 11932)

TO: Registrar - Recorder
    County of San Bernardino

Request is hereby made in accordance with the provision of the Documentary
Transfer Tax Act that the amount of tax due not be shown on the original
document which names:

     BPP/ARROWHEAD, L.P., a Delaware limited partnership, as Grantor,

and

     LAV, LLC, a Delaware limited liability company, as Grantee.

The property described in the accompanying document is located in San Bernardino
County, California.

The amount of tax due to the County of San Bernardino on the accompanying
document is -$0- because the net consideration for the transfer is equal to the
amount of the mortgage loan being assumed and encumbering the property and there
is no additional consideration received by the Grantor under California Revenue
and Taxation Code Section 11911.

                  ------------------------------------
                  Authorized Signatory of
                  BPP/ARROWHEAD, L.P.,
                  a Delaware limited partnership

NOTE: After the permanent record is made, this form will be affixed to the
conveying document and returned with it.

                                      C-4

<PAGE>

                                    EXHIBIT A

                        LEGAL DESCRIPTION OF THE PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      C-5

<PAGE>

                                    EXHIBIT D

                                  BILL OF SALE

     FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, the undersigned, BPP/ARROWHEAD, L.P., a Delaware limited
partnership ("SELLER"), does hereby give, grant, bargain, sell, transfer,
assign, convey and deliver to LAV, LLC, a Delaware limited liability company
("PURCHASER"), all personal property owned by Seller and located on or in that
certain real property located in the County of San Bernardino, State of
California and more particularly described in SCHEDULE A attached hereto or
located on the Maintenance Yard (as described in Exhibit A-1 to that certain
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of November
26, 2001, by and between Seller and Purchaser (the "PURCHASE AGREEMENT"), and
incorporated herein by this reference.

     Seller warrants that it has not previously transferred, conveyed, assigned
or encumbered any of the personal property conveyed by this Bill of Sale.

     EXCEPT AS SET FORTH ABOVE OR AS OTHERWISE PROVIDED IN THE PURCHASE
AGREEMENT, SAID PERSONAL PROPERTY IS BEING TRANSFERRED ON AN "AS IS" BASIS,
WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, OF ANY
KIND WHATSOEVER BY SELLER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
BUYER ACKNOWLEDGES THAT SELLER EXPRESSLY DISCLAIMS AND NEGATES, AS TO ALL
PERSONAL PROPERTY TRANSFERRED HEREBY: (A) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY; (B) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE; AND (C) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR
MATERIALS.

     Seller covenants that it will, at any time and from time to time upon
written request therefor, at Purchaser's sole expense and without the assumption
of any additional liability thereby, execute and deliver to Purchaser, its
nominees, successors and/or assigns, any new or confirmatory instruments and do
and perform any other acts which Purchaser, its nominees, successors and/or
assigns, may reasonably request in order to fully assign and transfer to and
vest in Purchaser, its nominees, successors and/or assigns, and protect its or
their rights, title and interest in and enjoyment of, all of the assets of
Seller intended to be transferred and assigned hereby, or to enable Purchaser,
its nominees, successors and/or assigns, to realize upon or otherwise enjoy any
such assets.

                                      D-1

<PAGE>

     All references to "SELLER" and "PURCHASER" herein shall be deemed to
include their respective nominees, successors and/or assigns, where the context
permits.

Dated: ________________, 2001.

SELLER:                        BPP/ARROWHEAD, L.P.,
                               a Delaware limited partnership

                               By:  BPP/Arrowhead, Inc.
                                    a Delaware corporation,
                                    its general partner

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

PURCHASER:                     LAV, LLC,
                               a Delaware limited liability company

                               By:  Verges-Platt Manager, Inc.,
                                    a Delaware corporation,
                                    Its Managing Member

                                    By:
                                        ----------------------------------
                                    Name: Scott C. Verges
                                    Its: President

                                      D-2

<PAGE>

                                   SCHEDULE A

                     LEGAL DESCRIPTION OF THE REAL PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      D-3

<PAGE>

                                    EXHIBIT E

                        CERTIFICATE OF NONFOREIGN STATUS

     BPP/ARROWHEAD, L.P., a Delaware limited partnership ("SELLER"), is the
transferor of that certain real property located in the County of San
Bernardino, State of California and more particularly described on EXHIBIT A
attached hereto (the "PROPERTY").

     Section 1445 of the Internal Revenue Code of 1986 (the "CODE") provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person. To inform the transferee that withholding of tax
will not be required in connection with the disposition of the Property pursuant
to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated
as of November 26, 2001, by and between Seller and LAV, LLC, a Delaware limited
liability company, the undersigned certifies the following on behalf of Seller:

     1. Seller is not a foreign corporation, foreign partnership, foreign trust
or foreign estate, as those terms are defined in the Code and the regulations
promulgated thereunder;

     2. Seller's U.S. employer identification number is 33-0804359; and

     3. Seller's address is c/o Burnham Pacific Properties, Inc., 110 West A
Street, Suite 900, San Diego, California 92101, Attn: Michael Rubin.

     It is understood that this certificate may be disclosed to the Internal
Revenue Service and that any false statement contained herein could be punished
by fine, imprisonment, or both.

     Under penalties of perjury I declare that I have examined the foregoing
certification and, to the best of my knowledge and belief, it is true, correct
and complete, and I further declare that I have authority to sign this document
on behalf of Seller.

Date:  _______  __, 2001        Signature: ____________________________
                                              Authorized Signatory

                                      E-1

<PAGE>

                                    EXHIBIT A

                       LEGAL DESCRIPTION OF REAL PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      E-2

<PAGE>

                                    EXHIBIT F

                               FORM OF ASSIGNMENT

     THIS ASSIGNMENT (this "ASSIGNMENT") is made as of __________ ____, 2001, by
and between BPP/ARROWHEAD, L.P., a Delaware limited partnership ("ASSIGNOR"),
and LAV, LLC, a Delaware limited liability company ("ASSIGNEE").

     FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
are hereby acknowledged, Assignor grants, sells, conveys, transfers and assigns
unto Assignee all of Assignor's right, title and interest in, to and under the
following items relating to that certain real property located in the County of
San Bernardino, State of California and more particularly described in EXHIBIT A
attached hereto and incorporated herein by this reference (the "REAL PROPERTY"):

     (a) the contracts or agreements described in EXHIBIT B attached hereto and
     incorporated herein by this reference;

     (b) warranties, guarantees and indemnities (including, without limitation,
     those for workmanship, materials and performance) which may exist from, by
     or against any contractor, subcontractor, manufacturer, laborer or supplier
     of labor, materials or other services relating to the Real Property or any
     improvements located thereon;

     (c) plans, drawings, and specifications for the improvements located on the
     Real Property;

     (d) any licenses (including that certain Tour Boat License Agreement, dated
     April 13, 1998, between Arrowhead Lake Association and Arrowhead Village,
     LLC, as the same has been amended), approvals, certificates, tradenames
     (including the name "The Village at Lake Arrowhead," but excluding, the
     name "Burnham Pacific Properties, Inc." (or any trade names related
     thereto), permits and claims (other than any claims against previous
     tenants of the Real Property, which claims are hereby reserved by
     Assignor);

     (e) the Environmental Policy (as defined in that certain Purchase and Sale
     Agreement and Joint Escrow Instructions dated as of November 26, 2001)
     currently held by Seller with respect to the Property; and

     (f) all rights to the website of WWW.LAKEARROWHEADvillage.com.

     Except as otherwise provided in Section 5(e) of that certain Purchase and
Sale Agreement and Joint Escrow Instructions dated as of November 26, 2001, by
and between Assignor, as seller, and Assignee, as purchaser, Assignor shall
indemnify, protect, defend and hold Assignee harmless from and against any and
all claims, demands, damages, losses, liabilities, costs and expenses (including
reasonable attorneys' fees) arising in connection with the contracts and
agreements described above and relating to the period prior to the date hereof.
Assignee accepts the foregoing assignment and assumes any executory obligations
of Assignor in connection with the contracts and agreements described above
arising from and after the date hereof and shall indemnify, protect, defend and
hold Assignor harmless from and against any and all claims, demands, damages,
losses, liabilities, costs and expenses (including

                                      F-1

<PAGE>

reasonable attorneys' fees) arising in connection with the contracts and
agreements described above and relating to the period on or after the date
hereof.

     Assignor covenants that it will, at any time and from time to time upon
written request therefor, at Assignee's sole expense and without the assumption
of any additional liability therefor, execute and deliver to Assignee, and its
successors and assigns, any new or confirmatory instruments and take such
further acts as Assignee may reasonably request to fully evidence the assignment
contained herein and to enable Assignee, and its successors and assigns, to
fully realize and enjoy the rights and interests assigned hereby.

     The provisions of this Assignment shall be binding upon, and shall inure to
the benefit of, the successors and assigns of Assignor and Assignee,
respectively.

     This Assignment 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. The signature page of any counterpart
may be detached therefrom without impairing the legal effect of the signature(s)
thereon, provided such signature page is attached to any other counterpart
identical thereto except having additional signature pages executed by other
parties to this Assignment attached thereto.

                            [SIGNATURES ON NEXT PAGE]

                                      F-2

<PAGE>

     IN WITNESS WHEREOF, Assignor and Assignee have caused their duly authorized
representatives to execute this Assignment as of the date first above written.

ASSIGNOR:                       BPP/ARROWHEAD, L.P.,
                                a Delaware limited partnership

                                By: BPP/Arrowhead, Inc.
                                    a Delaware corporation,
                                    its general partner

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

ASSIGNEE:                       LAV, LLC,
                                a Delaware limited liability company

                                By: Verges-Platt Manager, Inc.,
                                    a Delaware corporation,
                                    Its Managing Member

                                    By:
                                        ----------------------------------
                                    Name:   Scott C. Verges
                                    Its: President

                                      F-3

<PAGE>

                                    EXHIBIT A

                       LEGAL DESCRIPTION OF REAL PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      F-4

<PAGE>

                                    EXHIBIT B

                              SCHEDULE OF CONTRACTS

                                [TO BE ATTACHED]

                                      F-5

<PAGE>

                                    EXHIBIT G

                          FORM OF ASSIGNMENT OF LEASES

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

--------------------------------

--------------------------------

--------------------------------

--------------------------------

     THIS ASSIGNMENT OF LESSOR'S INTEREST IN LEASES (this "ASSIGNMENT") is made
on ________ ___, 2001, by BPP/ARROWHEAD, L.P., a Delaware limited partnership,
("ASSIGNOR"), in favor of LAV, LLC, a Delaware limited liability company
("ASSIGNEE").

     For a valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby grants, conveys, transfers and assigns to
Assignee all of Assignor's right, title and interest in, to and under the leases
(and all amendments and modifications thereto) relating to that certain real
property located in the County of San Bernardino, State of California and more
particularly described in EXHIBIT A attached hereto and incorporated herein by
this reference (the "REAL PROPERTY"), which leases are identified in EXHIBIT B
attached hereto and incorporated herein by this reference (as amended and
modified, the "LEASES"), together with (i) any and all rights, title, estates
and interests of Assignor in and to such security deposits (and any interest
required thereon) and prepaid rents, if any, as have been paid to Assignor
pursuant to such Leases and not previously applied pursuant to the Leases, and
(ii) any and all rights, title, estates and interests of Assignor in and to any
subleases, if any, relating to the Real Property.

     Except as otherwise provided in Section 5(e) of that certain Purchase and
Sale Agreement and Joint Escrow Instructions dated as of November 26, 2001, by
and between Assignor, as seller, and Assignee, as purchaser, Assignor shall
indemnify, protect, defend and hold Assignee harmless from and against any and
all claims, demands, liabilities, losses, costs, damages or expenses (including,
without limitation, reasonable attorneys' fees and costs) arising out of or
resulting from any breach or default by Assignor under the terms of the Leases
arising prior to the date hereof.

     Assignor covenants that it will, at any time and from time to time upon
written request therefor, at Assignee's sole expense and without the assumption
of any additional liability thereby, execute and deliver to Assignee, its
successors and assigns, any new or confirmatory instruments and take such
further acts as Assignee may reasonably request to fully evidence the assignment
contained herein and to enable Assignee, its successors and assigns to fully
realize and enjoy the rights and interests assigned hereby.

                                      G-1

<PAGE>

     Assignee accepts the foregoing assignment and assumes and shall pay,
perform and discharge, as and when due, all of the agreements and obligations of
Assignor under the Leases arising from and after the date hereof and agrees to
be bound by all of the terms and conditions of the Leases, and Assignee further
agrees that, as between Assignor and Assignee, Assignee shall be responsible for
any brokerage commissions, fees or payments which may be due or payable in
connection with any extension or renewal of the term of any Lease arising from
and after the date hereof.

     Assignee shall indemnify, protect, defend and hold Assignor harmless from
and against any and all claims, demands, liabilities, losses, costs, damages or
expenses (including, without limitation, reasonable attorneys' fees and costs)
arising out of or resulting from any breach or default by Assignee under the
terms of the Leases arising on or after the date hereof.

     The provisions of this Assignment shall be binding upon, and shall inure to
the benefit of, the successors and assigns of Assignor and Assignee,
respectively.

     This Assignment 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. The signature and acknowledgment pages
of any counterpart may be detached therefrom without impairing the legal effect
of the signature(s) and acknowledgment(s) thereon, provided such signature and
acknowledgment pages are attached to any other counterpart identical thereto
except having additional signature and acknowledgment pages executed and
acknowledged by other parties to this Assignment attached thereto.

                            [SIGNATURES ON NEXT PAGE]

                                      G-2

<PAGE>

     IN WITNESS WHEREOF, Assignor and Assignee have caused their duly authorized
representatives to execute this Assignment as of the date first above written.

ASSIGNOR:                       BPP/ARROWHEAD, L.P.,
                                a Delaware limited partnership

                                By: BPP/Arrowhead, Inc.
                                    a Delaware corporation,
                                    its general partner

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

ASSIGNEE:                           LAV, LLC,
                                    a Delaware limited liability company

                                    By: Verges-Platt Manager, Inc.,
                                        a Delaware corporation,
                                        Its Managing Member

                                        By:
                                           --------------------------------
                                        Name: Scott C. Verges
                                        Its: President

                                      G-3

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF CALIFORNIA             )
                                )
COUNTY OF ______________________)

                  On _______________________ 2001, before me,
____________________________________________________a Notary Public in and for
said state, personally appeared ______________________________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

     WITNESS my hand and official seal.

     -------------------------------------

[SEAL]

                                      G-4

<PAGE>

                                    EXHIBIT A

                       LEGAL DESCRIPTION OF REAL PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.

                                      G-5

<PAGE>

                                    EXHIBIT B

                               SCHEDULE OF LEASES

                                [to be attached]

                                      G-6

<PAGE>

                                    EXHIBIT H

                              CAPITAL IMPROVEMENTS

<TABLE>
<CAPTION>

        DESCRIPTION OF WORK                                   COST OF WORK
----------------------------------------                   -------------------
<S>                                                        <C>
1.  Seawall repair                                          [to be determined]*

2.  Dockside railing--repair loose rails                           $6,000

3.  Lot swale--patch and repair parking lot                       $22,000

4.  Maintenance loader--vehicle for maintenance
    equipment and snow plowing                                    $25,000

5.  Directional signage                                            $5,000

6.  Deck repairs--patches to upper level deck                     $15,000

7.  Garage repairs                                          [to be determined]*

8.  Maintenance cart replacement                                   $6,000

9.  Security gate replacement                                     $10,000

10. Building R Mech. Deck--repair leaks                           $24,000

11. Restroom refurbishment                                        $26,700

12. Building F HVAC                                               $28,000

</TABLE>

* See Sections 7(a)(ix), 7(a)(x), 7(b)(x) and 7(b)(xi) of the Agreement

                                      H-1

<PAGE>

                                    EXHIBIT I

                          PROFORMA OWNER'S TITLE POLICY

                                [TO BE ATTACHED]

                                      I-1

<PAGE>

                                    EXHIBIT J

                         FORM OF ASSIGNMENT OF EASEMENT

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

O'MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, California 90071-2899
Attention: Mitchell B. Menzer, Esq.
                       (121,728-1)
------------------------------------------------------------------------------

                             ASSIGNMENT OF EASEMENT

     This ASSIGNMENT OF EASEMENT (this "ASSIGNMENT") is made on ________ ___,
2001, by BPP/ARROWHEAD, L.P., a Delaware limited partnership, ("ASSIGNOR"), in
favor of LAV, LLC, a Delaware limited liability company ("ASSIGNEE").

     For a valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby grants, conveys, transfers and assigns to
Assignee all of Assignor's right, title and interest in, to and under that
certain Conveyance of Easement Determinable, dated as of July 31, 1998, by and
between Arrowhead Lake Association, a California non-profit corporation, as
grantor, and Assignor, as grantee, recorded on September 2, 1998, as Document
No. 19980375829 (the "EASEMENT"), which relates to that certain real property
located in the County of San Bernardino, State of California and more
particularly described in EXHIBIT A attached hereto and incorporated herein by
this reference.

     Except as otherwise provided in Section 5(e) of that certain Purchase and
Sale Agreement and Joint Escrow Instructions dated as of November 26, 2001, by
and between Assignor, as seller, and Assignee, as purchaser, Assignor shall
indemnify, protect, defend and hold Assignee harmless from and against any and
all claims, demands, liabilities, losses, costs, damages or expenses (including,
without limitation, reasonable attorneys' fees and costs) arising out of or
resulting from any breach or default by Assignor under the Easement arising
prior to the date hereof.

     Assignor hereby covenants that it will, at any time and from time to time
upon written request therefor, at Assignee's sole expense and without the
assumption of any additional liability thereby, execute and deliver to Assignee,
its successors and assigns, any new or confirmatory instruments and take such
further acts as Assignee may reasonably request to fully evidence the assignment
contained herein and to enable Assignee, its successors and assigns to fully
realize and enjoy the rights and interests assigned hereby.

<PAGE>

     Assignee hereby accepts the foregoing assignment and agrees to assume, pay,
perform and discharge, as and when due, all of the agreements and obligations of
Assignor under the Easement arising from and after the date hereof and agrees to
be bound by all of the terms and conditions of the Easement. The foregoing
acceptance and assumption by Assignee is made for the benefit of Assignor.

     Assignee shall indemnify, protect, defend and hold Assignor harmless from
and against any and all claims, demands, liabilities, losses, costs, damages or
expenses (including, without limitation, reasonable attorneys' fees and costs)
arising out of or resulting from any breach or default by Assignee under the
terms of the Easement arising on or after the date hereof.

     The provisions of this Assignment will be binding upon, and will inure to
the benefit of, the successors and assigns of Assignor and Assignee,
respectively.

     This Assignment may be executed in any number of counterparts, each of
which will be deemed an original, but all of which when taken together will
constitute one and the same instrument. The signature and acknowledgment pages
of any counterpart may be detached therefrom without impairing the legal effect
of the signature(s) and acknowledgment(s) thereon, provided such signature and
acknowledgment pages are attached to any other counterpart identical thereto
except having additional signature and acknowledgment pages executed and
acknowledged by other parties to this Assignment attached thereto.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

     IN WITNESS WHEREOF, Assignor and Assignee have caused their duly authorized
representatives to execute this Assignment as of the date first above written.

ASSIGNOR:                       BPP/ARROWHEAD, L.P.,
                                a Delaware limited partnership

                                By: BPP/Arrowhead, Inc.
                                    a Delaware corporation,
                                    its general partner

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

                                    By:
                                        ----------------------------------
                                    Name:
                                          --------------------------------
                                    Its:
                                         ---------------------------------

ASSIGNEE:                       LAV, LLC,
                                a Delaware limited liability company

                                By: Verges-Platt Manager, Inc.,
                                    a Delaware corporation,
                                    Its Managing Member

                                    By:
                                        ----------------------------------
                                    Name:   Scott C. Verges
                                    Its: President

BY ITS SIGNATURE BELOW, ARROWHEAD LAKE ASSOCIATION, A CALIFORNIA NON-PROFIT
CORPORATION, HEREBY CONSENTS TO THE ASSIGNMENT OF THE EASEMENT BY ASSIGNOR TO
ASSIGNEE:

ARROWHEAD LAKE ASSOCIATION,
a California non-profit corporation

By:
    -------------------------------------
Name:
      -----------------------------------
Its:
     ------------------------------------

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF CALIFORNIA              )
                                 )
COUNTY OF _______________________)

     On _______________________ 2001, before me,
____________________________________________________a Notary Public in and for
said state, personally appeared _______________________________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

                  WITNESS my hand and official seal.

                  -------------------------------------

[SEAL]

<PAGE>

                                    EXHIBIT A

                       LEGAL DESCRIPTION OF REAL PROPERTY

The real property described herein is situated in the County of San Bernardino,
State of California and is more particularly described as follows:

Parcel A:

Lots 7 to 12, inclusive of Tract No. 10908, in the County of San Bernardino,
State of California, as per Map recorded in Book 151 of Maps, Pages 95, 96 and
97, in the Office of the County Recorder of said County and as amended by a
Certificate of Correction which recorded January 9, 1981 as Instrument No.
81-005688 Official Records.

Except therefrom those portions more particularly described in the Deed to the
State of California, recorded April 20, 1982, as Instrument No. 82-076963 of
Official Records of said County.

Parcel B:

A non-exclusive easement for pedestrian and vehicular ingress, egress and
movement over that certain private roadway system located on Tract no. 10908, in
the County of San Bernardino, State of California, as per Map recorded in Book
151, Pages 95 to 97 inclusive of Maps, in the Office of the County Recorder of
said County, as established, described and depicted by the Declaration of
Protective Covenants, Conditions and Restrictions and Easements executed by
Grantor on December 19, 1980, and recorded in the Office of the County Recorder
of said San Bernardino County, State of California, on December 29, 1980 as
Instrument No. 80-295716 of Official Records, and as amended by document
recorded August 31, 1984 as Instrument No. 84-210586, Official Records.

Parcel C:

That certain dock-site or dock rights designated as Dock No. Village 49 on a map
of Lake Arrowhead, maintained in the offices of Arrowhead Lake Association at
Lake Arrowhead, California, to be used as a portion of the insured estate in and
to that certain real property described above.<PAGE>

                                                                    EXHIBIT 10.4

                               FIRST AMENDMENT TO
                           PURCHASE AND SALE AGREEMENT
                          AND JOINT ESCROW INSTRUCTIONS

     This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this "AMENDMENT") is entered into as of February 12, 2002, by and
between LAV, LLC, a Delaware limited liability company ("PURCHASER"), and
BPP/ARROWHEAD, L.P., a Delaware limited partnership ("SELLER"), with reference
to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated
as of November 26, 2001, between Seller and Purchaser (the "PURCHASE
AGREEMENT").

                                    RECITALS:
                                    --------

     A. Under the Purchase Agreement, Seller agreed to sell, and Purchaser
agreed to purchase from Seller, certain property commonly known as the Village
at Lake Arrowhead, located in the County of San Bernardino, California.

     B. Seller and Purchaser desire to execute this Amendment in order to modify
certain of the terms of the Purchase Agreement.

     C. Each initially capitalized term used herein shall have the meaning
ascribed to such term as set forth in the Purchase Agreement, unless otherwise
defined herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, Seller and
Purchaser hereby agree that the Purchase Agreement is amended as follows:

     1. The date of the Maintenance Lease referred to in Section 1(h)(i) and in
Exhibit A-1 is changed to January 31, 2002.

     2. Seller and Purchaser agree that the conditions precedent set forth in
Sections 7(a)(ix), 7(a)(x), 7(b)(x) and 7(b)(xi) have been satisfied. At
Closing, Seller shall provide Purchaser with a cash credit against the Purchase
Price in the amount of One Million Five Hundred Thousand Dollars ($1,500,000)
for repair of the seawall and the parking structure and any and all defects or
deferred maintenance in connection with the Property, including without
limitation the items on EXHIBIT H of the Purchase and Sale Agreement. Such
credit shall be in addition to the credit referred to in Section 11(a)(ii).
Purchaser acknowledges that the $1,500,000 credit represents full satisfaction
of Seller's obligations with respect to all repair items at the Property.

                                       1

<PAGE>

     3. The following sentence is added to the end of Section 8(a):

        "Notwithstanding the above, Seller shall provide Purchaser with a
        credit at Closing for any unpaid tenant improvement allowances,
        commissions, architectural fees and landlord capital improvements
        required to be made by landlord under that certain Lease Agreement,
        dated January 9, 2002, by and between Seller and CF Real Estate Loans,
        Inc. (d/b/a Re/Max Lake Arrowhead), with such aggregate amount to be
        agreed upon prior to Closing by Seller and Purchaser each in its
        reasonable discretion; provided, however, that such amount shall not
        exceed the sum of $275,000 plus the applicable commissions.

     4. Section 8(e) is deleted in its entirety.

     5. In Section 11(a)(ii), the phrase "not described on Exhibit H attached
hereto" is deleted. In addition, the following sentence is added to the end of
Section 11(a)(ii):

        "Notwithstanding the above, Purchaser shall reimburse Seller at
        Closing in the following amounts (to the extent that such amounts have
        been paid by Seller): (1) $12,548.50 plus $4,462.48 for Fireman's Fund
        Commercial Insurance with Business Coverage Endorsement, (2) $2,500
        for Floating Property Insurance, (3) $8,900 for Umbrella Insurance
        Coverage, (4) $62,375 for Difference in Conditions Insurance, and (5)
        $1,539 for Contractors' Equipment Insurance."

     6. Section 11(e) is deleted in its entirety.

     7. Section 12 is amended and restated in its entirety as follows:

        "The purchase and sale contemplated herein shall close (the "CLOSING")
        as soon as possible following approval of the transaction contemplated
        herein by Seller's Board of Directors (the "CLOSING DATE"). Purchaser
        and Seller anticipate that the transaction will be considered at the
        Board's next meeting on February 14, 2002. As used herein, the term
        "Closing" means the date and time that Seller's Grant Deed is recorded
        in the Official Records."

     8. Section 18 is amended and restated to include the following clause (c):

                                       2

<PAGE>

        "(c) Purchaser acknowledges that the principals in Purchaser, Scott
        Verges and Dan Platt, are senior executives of Seller and are thoroughly
        familiar with the Property, including the condition of the seawall and
        the parking structure and the extent of repairs required to be made to
        the seawall and the parking structure. Purchaser has had full and ample
        opportunity to investigate all aspects of the condition of the Property,
        including the seismic risk, to make all inspections and investigations
        of the Property that it deems necessary, including the testing and
        pulling of the post-tension cables supporting the parking structure, to
        consult with several structural engineers and other experts as to the
        extent of repairs required to be made and cost estimates for such
        repairs, and to underwrite the cost of such repairs. Purchaser
        acknowledges that it has received and reviewed the following documents:
        (1) Property Condition Assessment, dated February 11, 1998, prepared by
        Property Condition Assessments, LLC, (2) Property Condition Survey
        Report, dated October 10, 2000, prepared by Marx/Okubo Associates, Ltd.,
        (3) Request for Bid, Construction of Soil Vapor Extraction System, dated
        February 19, 1999, prepared by PES Environmental, Inc., (4) Report of
        Fuel Conveyance Pipelines and Abandonment and Request for No Further
        Action, dated July 20, 1999, prepared by PES Environmental, Inc., (5)
        Phase I Environmental Site Assessment, dated March 10, 1998, prepared by
        PES Environmental, Inc., (6) Preliminary Seismic Evaluation Report,
        dated January 16, 2002, prepared by Cash & Associates, (7) Structural
        Evaluation, Lake Arrowhead Village Parking Structure, dated January 21,
        2002, prepared by Seneca Structural Engineering, (8) Geotechnical
        Investigation, Lake Arrowhead Seawall, dated November 5, 2001, prepared
        by TerraCosta Consulting Group, (9) Bulkhead Improvement Project, dated
        December 10, 2001, prepared by Cash & Associates, (10) Structural Third
        Party Review, Lake Arrowhead Parking Structure, dated February 1, 2002,
        prepared by Nabih Youssef & Associates, (11) Retrofit System Proposal,
        Arrowhead Village Parking Structure, dated January 30, 2002, prepared by
        Seneca Structural Engineering, (12) Letter from Seneca Structural
        Engineering dated January 29, 2002 regarding the existing system
        capacity estimate for the parking structure. Specifically, Purchaser
        acknowledges (i) the deficient condition of the seawall, (ii) the
        corrosion and possible compromising of the post-tension cables in the
        parking structure, (iii) other damage to the rebar and concrete in the
        parking structure, (iv) the difficulty encountered in removing and
        replacing the post-tension cables, (v) the potential need to install an
        external post-tension cable system on the parking structure, (vi) that
        the parking garage leaks and water has intruded into the structural
        components of the parking garage, possible

                                       3

<PAGE>

        compromising the post-tension cables and other structural components,
        (vii) that the parking structure has several large openings which must
        be barricaded to protect against injury, and (viii) that Seller has been
        advised to limit the weight load on the parking structure. Accordingly,

        (i) Purchaser hereby waives all warranties of any type or kind
        whatsoever with respect to the Property, including the seawall and the
        parking structure, including by way of description but not limitation,
        those of fitness for a particular purpose and use, tenantability or
        habitability.

        (ii) Purchaser, on behalf of itself and its members, shareholders,
        principals, directors, officers, agents and any person or entity
        claiming by, through or under Purchaser, each hereby fully and
        irrevocably releases, discharges and waives its rights to recover
        from Seller, any and all claims that Purchaser may now have or
        hereafter acquire against Seller for any cost, loss, claim, penalty,
        fine, lien, judgment, liability, damage, expense, action or cause of
        action (including, without limitation, attorneys' fees and costs),
        whether foreseen or unforeseen, direct or indirect, known or unknown,
        arising from or related to the physical condition of the Property,
        including, without limitation, the items identified on EXHIBIT H of
        the Purchase Agreement, the matters described in SECTION 18(c) above,
        the condition of the seawall and the parking structure and any
        building code, engineering, construction or seismic deficiencies or
        defects in the seawall, parking structure or item identified on
        EXHIBIT H. Purchaser further acknowledges and agrees that this
        release shall be given full force and effect according to each of its
        expressed terms and provisions, including, but not limited to, those
        relating to unknown and unsuspected claims, damages and causes of
        action. As a material covenant and condition of this Agreement,
        Purchaser agrees that in the event of any claims arising out of the
        physical condition of the Property, including, without limitation,
        that of the Seawall and the parking structure, Purchaser shall not
        seek recourse, redress or relief from Seller and shall look solely to
        persons and entities other than Seller for any recourse, redress or
        relief. With respect to the release set forth herein relating to
        unknown and unsuspected claims, Purchaser hereby acknowledges that
        such waiver and release is made with the advice of counsel and with
        full knowledge and understanding of the consequences and effects of
        such waiver, and that such waiver is made with the full knowledge,
        understanding and agreement that California Civil Code Section 1542
        provides as follows, and that the protection afforded by said Code
        Section is hereby waived:

                                       4

<PAGE>

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

        Upon consummation of the Closing, the foregoing release shall be deemed
        to be restated and made again as of the Closing Date and shall survive
        the Closing."

     9. Section 20(a) is revised to include the following after clause (vii):

             "(viii) any claim filed by Coldwell Banker Sky Ridge Realty
        relating to its assertion that Seller's refusal to permit it to maintain
        buyer's guide display boxes on the Property is a violation of its First
        Amendment rights, (ix) any claim filed by Richard Lowe relating to a
        slip-and-fall injury that occurred on December 15, 2001, (x) any claim
        filed by Cesar Gonzalez relating to a slip-and-fall injury that occurred
        on January 29, 2002 and (xi) MR. G'S, INC. V. BPP/ARROWHEAD, L.P., et
        al, Case No. SCVSS086278, Superior Court, Orange County, California.
        None of the foregoing lawsuits is a Material Lawsuit."

     10. The last sentence of Section 20(a) is amended and restated as follows:

        "Purchaser shall indemnify, defend and hold harmless Seller and its
        shareholders, directors, officers, members, partners, employees,
        representatives and agents, and their respective successors and assigns
        (collectively, the "INDEMNIFIED SELLER PERSONS") from and against any
        claims, actions, suits, demands, losses, damages, liabilities,
        obligations, judgments, settlements, awards, penalties, costs or
        expenses, including, without limitation, reasonable attorneys' fees and
        expenses (collectively, "LOSSES") incurred or suffered by any
        Indemnified Seller Person that results from, relates to or arises out of
        (x) events occurring from and after the Closing Date, including, without
        limitation, liability for overcharging pass-through expenses for the
        period from and after Closing, (y) the physical condition of the
        Property, including, without limitation, that of the seawall and the
        parking garage."

     11. Exhibit H to the Purchase Agreement is deleted in its entirety.

                                       5

<PAGE>

     12. Except as otherwise set forth herein, the Purchase Agreement (i) shall
remain unmodified, in full force and effect and enforceable in accordance with
its terms, and (ii) is hereby ratified and reaffirmed in each and every
respect."

     13. This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument, with the same effect as if all parties had signed the same signature
page. In order to facilitate and expedite execution of this Amendment, the
parties hereto may execute and exchange facsimile counterparts of the signature
pages, and facsimile counterparts will serve as originals.

     14. Burnham Pacific Properties, Inc. has executed this Amendment for the
purpose of memorializing that it shall be secondarily liable for the performance
of the obligations of Seller set forth in Section 20(a) of the Purchase
Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.

SELLER:                                  BPP/ARROWHEAD, L.P.,
                                         a Delaware limited partnership

                                         By: BPP/Arrowhead, Inc.
                                             a Delaware corporation,
                                             its General Partner

                                             By: /S/ MICHAEL L. RUBIN
                                                --------------------------
                                             Name: Michael L. Rubin
                                             Its: Senior Vice President

                                             By: /S/ MARC T. ARTINO
                                                --------------------------
                                             Name: Marc T. Artino
                                             Its: Senior Vice President

PURCHASER:                               LAV, LLC,
                                         a Delaware limited liability company

                                         By: Verges-Platt Manager, Inc.,
                                             a Delaware corporation,
                                             Its Managing Member

                                             By: /S/ DANIEL B. PLATT
                                                -------------------------------
                                                Name:    Daniel B. Platt
                                                Its: Chief Financial Officer

                                       6

<PAGE>

BURNHAM:                         BURNHAM PACIFIC PROPERTIES, INC.,
                                 a Maryland corporation

                                 By: /S/ MICHAEL L. RUBIN
                                    -----------------------------
                                    Name: Michael L. Rubin
                                    Its: Senior Vice President

                                 By: /S/ MARC T. ARTINO
                                    -----------------------------------
                                    Name: Marc T. Artino
                                    Its: Senior Vice President

                                       7

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