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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) May 22, 1997
KILROY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
MARYLAND COMMISSION FILE: 1-12675 95-4598246
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
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2250 EAST IMPERIAL HIGHWAY
EL SEGUNDO, CALIFORNIA 90245
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (213) 772-1193
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 3, 1997, Kilroy Realty Corporation (collectively with its
subsidiaries, the "Company") completed a series of transactions in which it
acquired a portfolio of office and industrial properties, an office complex and
an industrial building with an aggregate of approximately 1,220,000 rentable
square feet. All three purchases were from unaffiliated entities. The Company
used working capital to finance each of the acquisitions.
ACQUISITIONS OF SIGNIFICANT PROPERTIES
The following property acquisitions are deemed significant pursuant to the
rules governing the reporting of transactions on Form 8-K, under Rule 3-14 of
Regulation SX under the Securities Exchange Act of 1934 ("Significant
Acquisitions").
On June 3, 1997 the Company acquired sixteen office and industrial
buildings comprising approximately 785,900 rentable square feet in the
aggregate, and approximately 10 acres of land. The properties were purchased
from Mission Land Company for approximately $44,000,000 in cash, based on arms
length negotiations. Seven of the buildings are located in Brea, California (the
"Brea Buildings"), and contain approximately 276,300 aggregate rentable square
feet. The Brea Buildings are presently 98% occupied with an average annual rent
per square foot of $5.73. The quoted market rental rate for industrial buildings
in Brea is $6.60 per square foot. Six of the buildings are located in Garden
Grove, California (the "Garden Grove Buildings"), and contain approximately
276,000 aggregate rentable square feet. The Garden Grove Buildings are presently
98% occupied with an average annual rent per square foot of $5.40. The quoted
market rental rate for industrial buildings in Garden Grove is $5.40 per square
foot. Two of the buildings are located in Torrance, California (the "Torrance
Buildings"), and contain approximately 80,000 aggregate rentable square feet.
The Torrance Buildings are presently 100% occupied with an average annual rent
per square foot of $9.83. The quoted market rental rate for office buildings
in Torrance is $10.20 per square foot. The last building is located in Ontario,
California (the "Ontario Building"), and contains approximately 153,600 rentable
square feet. The Ontario Building is presently 100% occupied by one tenant at an
annual rental rate of $2.82 per square foot. The quoted market rental rate for
industrial buildings in Ontario is $3.60 per square foot. In connection with the
acquisition, the Company also purchased ten acres of undeveloped land located in
Brea, California.
On May 22, 1997 the Company acquired an office complex in Camarillo,
California comprised of four office buildings with 276,200 aggregate rentable
square feet on approximately 20.0 acres of land. The complex is presently 100%
occupied by one tenant at an annual rental rate of $9.37 per square foot. The
quoted market rental rate is $9.96 per square foot. The properties were
purchased from Camarillo Partners for approximately $24,000,000 in cash, based
on arms length negotiations.
OTHER PROPERTY ACQUISITIONS
Although the following property acquisition is not considered a Significant
Acquisition, this acquisition, considered in the aggregate with the Significant
Acquisitions presented above, may be considered to be material in nature.
On May 5, 1997 the Company acquired an industrial building located in
Irvine, California which contains approximately 157,500 rentable square feet.
The property is presently 100% occupied by one tenant at an annual rental rate
of $6.90 per square foot.
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The quoted market rental rate is $9.60 per square foot. The property was
purchased from Limar Realty Corp. for approximately $12,000,000 in cash, based
on arms length negotiations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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DESCRIPTION
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(a) Financial statements of properties acquired.
It is impracticable to provide the required financial statements at the
time of the filing of this report. The required financial statements
for the acquired properties will be filed within 60 days.
(b) Pro forma financial information.
It is impracticable to provide the required pro forma financial
information at the time of the filing of this report. The required pro
forma financial information will be filed within 60 days.
(c) Exhibits
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EXHIBIT
NO.
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10.11 Purchase and Sale Agreement and Joint Escrow Instructions by and
between Mission Land Company, and Mission-Vacaville, L.P. and Kilroy
Realty, L.P.
10.12 Agreement of Purchase and Sale and Joint Escrow Instructions by and
between Camarillo Partners and Kilroy Realty, L.P.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized,
KILROY REALTY CORPORATION
Date: June 5, 1997 By /s/ Ann Marie Whitney
------------ --------------------------------------
Name: Ann Marie Whitney
Title: Vice President and Controller
S-2
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
10.11 Purchase and Sale Agreement and Joint Escrow Instructions by and
between Mission Land Company, and Mission-Vacaville, L.P. and Kilroy
Realty, L.P.
10.12 Agreement of Purchase and Sale and Joint Escrow Instructions by and
between Camarillo Partners and Kilroy Realty, L.P.
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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
by
and
between
MISSION LAND COMPANY,
a California corporation
("MISSION")
and
MISSION-VACAVILLE, L.P.
a California limited partnership
("MISSION-VACAVILLE")
COLLECTIVELY, "SELLER"
and
KILROY REALTY, L.P.,
a Delaware limited partnership
"PURCHASER"
Dated as of
April 30, 1997
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TABLE OF CONTENTS
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Page
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1. IDENTIFICATION OF PARTIES............................................. 1
2. DESCRIPTION OF THE PROPERTY........................................... 1
3. THE PURCHASE PRICE.................................................... 3
4. TITLE................................................................. 4
5. INSPECTION; DUE DILIGENCE PERIOD...................................... 5
6. REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 7
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER........................... 9
8. RELEASE BY PURCHASER.................................................. 10
9. DELIVERY OF DOCUMENTS................................................. 11
10. CONFIDENTIALITY....................................................... 12
11. CONDITIONS PRECEDENT TO CLOSING....................................... 12
12. COVENANTS OF SELLER................................................... 14
13. SELLER'S CLOSING DELIVERIES........................................... 15
14. PURCHASER'S CLOSING DELIVERIES........................................ 16
15. PRORATIONS, ADJUSTMENTS; RELEASE OF BONDS AND OTHER
SECURITY DEVICES...................................................... 17
16. CLOSING............................................................... 20
17. CLOSING COSTS......................................................... 21
18. RISK OF LOSS; TAKING.................................................. 21
19. DEFAULT............................................................... 23
20. BROKER'S COMMISSION................................................... 24
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21. ESCROW................................................................ 24
22. MISCELLANEOUS......................................................... 25
</TABLE>
EXHIBITS
EXHIBIT A Legal Description of The Land
EXHIBIT B Schedule of Leases
EXHIBIT C Schedule of Trade Names
EXHIBIT D Allocated Purchase Prices and Allocated Deposits
EXHIBIT E Schedule of PTRs and Surveys
EXHIBIT F Form of Grant Deed
EXHIBIT G Bill of Sale
EXHIBIT H General Assignment
EXHIBIT I Assignment of Leases
EXHIBIT J Certification of Non-Foreign Status of Mission Land Company
EXHIBIT K Assumption Agreement
EXHIBIT L-1 Form of Tenant Estoppel Certificate
EXHIBIT L-2 Form of Seller Certificate
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INDEX OF DEFINED TERMS
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Definition Section
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Advance Deposit.......................................... 3(b)
Advance Deposit Account.................................. 3(b)
Affiliate................................................ 2(c)
Agreement................................................ 1
Allocated Deposit........................................ 3(b)
Allocated Purchase Price................................. 3(a)
Assignment of Leases..................................... 13(d)
Assumption Agreement..................................... 14(c)
Attorneys' fees.......................................... 21(j)
Attorneys' fees and costs................................ 21(j)
Bill of Sale............................................. 13(b)
Business Day............................................. 3(d)
Certificate of Non-Foreign Status........................ 13(e)
Closing.................................................. 16
Closing Date............................................. 16
Contracts................................................ 2(b)(vii)
Control.................................................. 2(c)
Deposit.................................................. 3(b)
Deposit Account.......................................... 3(a)
Disapproval Notice....................................... 5(d)
Disapproved Exceptions................................... 4(b)
Disapproved Property..................................... 5(d)
Due Diligence Materials.................................. 6(c)
Due Diligence Period..................................... 5(a)
Environmental Laws....................................... 8(a)
Escrow Company........................................... 3(b)
Execution Date........................................... 1
Existing Security Items.................................. 15(c)
Form 590................................................. 13(f)
General Assignment....................................... 13(c)
Grant Deed............................................... 13(a)
Hazardous Substance...................................... 8(a)
Improvements............................................. 2(b)(ii)
Land..................................................... 2(b)(i)
Leases................................................... 2(b)(iii)
Liquidated Damages Deposit............................... 3(b)
Liquidated Damages Deposit Account....................... 3(b)
Materially Damaged Property.............................. 18(a)
Materially Taken Property................................ 18(b)
Outside Closing Date..................................... 16
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INDEX OF DEFINED TERMS
(Continued)
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<CAPTION>
Definition Section
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Parcel................................................... 2(b)(i)
Permits.................................................. 2(b)(viii)
Permitted Exception...................................... 4(b)
Permitted Exceptions..................................... 4(b)
Personal Property........................................ 2(b)(v)
Properties............................................... 2(h)
Property................................................. 2(h)
PTR...................................................... 4(a)
Purchase Price........................................... 3(a)
Purchaser................................................ 1
Purchaser's Conditions Precedent......................... 11(a)
Real Property............................................ 2(b)(iv)
Seller................................................... 1
Seller's Actual Knowledge................................ 5
Real Property............................................ 2(d)
Seller Certificate....................................... 11(a)(vi)
Seller's Conditions Precedent............................ 11(b)
Seller Has Received No Written Notice.................... 6
Seller Releasees......................................... 8(a)
Surveys.................................................. 4(a)
Tenant Estoppel Certificate.............................. 11(a)(vi)
Title Company............................................ 4(a)
Title Curative Endorsements.............................. 17(a)
Title Policy............................................. 11(a)(ii)
Trade Names.............................................. 2(b)(vi)
Unresolved Exceptions.................................... 4(c)
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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
1. IDENTIFICATION OF PARTIES.
-------------------------
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"AGREEMENT") is entered into as of April 30, 1997 (the "EXECUTION DATE"), by and
between MISSION LAND COMPANY, a California corporation ("MISSION") and MISSION-
VACAVILLE, L.P., a California limited partnership ("MISSION-VACAVILLE")
(collectively, "SELLER") and KILROY REALTY, L.P., a Delaware limited partnership
("PURCHASER").
2. DESCRIPTION OF THE PROPERTY.
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(a) The following terms have the following meanings:
(i) The "BAXTER PROJECT" means the industrial building consisting
of approximately 153,566 square feet located at 821 South Rockefeller
Avenue, Ontario, California.
(ii) The "BREA LAND" means the approximately 9.87 acres of land
located at the corner of Lambert Road and Puente Street in Brea,
California.
(iii) The "BREA PROJECT" means the seven industrial buildings
consisting of an aggregate of approximately 276,278 square feet located in
the Brea Industrial Complex, Brea, California.
(iv) The "GARDEN GROVE PROJECT" means the six industrial
buildings consisting of an aggregate of approximately 275,971 square feet
located in the Garden Grove Industrial Complex, Garden Grove, California.
(v) The "TELO PROJECT" means the two industrial buildings
consisting of an aggregate of approximately 79,967 square feet located in
Torrance, California.
(b) Seller hereby agrees to sell, assign and convey to Purchaser, and
Pur chaser hereby agrees to purchase from Seller all of Seller's right, title
and interest in and to the following:
(i) Those certain parcels of real property more particularly
described on Exhibit A attached hereto (the "LAND"). The Land is divided
---------
for purposes of this Agreement into various portions, each of which is
described in a separate section of Exhibit A (each portion of the Land is
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referred to in this Agreement individually, as a "PARCEL");
1
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(ii) All improvements located on the Land (the "IMPROVEMENTS");
(iii) All leases covering the Land and Improvements (such
leases, together with any and all amendments, modifications or supplements
thereto and guaranties thereof, are hereinafter referred to collectively as
the "LEASES" and are identified on the Schedule of Leases attached hereto
as Exhibit B);
---------
(iv) All rights, privileges, easements, rights-of-way and ap
purtenances used or connected with the beneficial use or enjoyment of the
Land (the Land, the Improvements, the Leases and such rights, privileges,
easements, rights-of-way, and appurtenances are sometimes collectively
hereinafter referred to as the "REAL PROPERTY");
(v) All personal property and fixtures (if any) owned by Seller,
located on the Real Property and used in the operation or maintenance of
the Real Property (collectively, the "PERSONAL PROPERTY");
(vi) The trade names and trademarks used or useful in connection
with the Real Property, but only to the extent that the same are not
trademarks or trade names of Seller or any of Seller's Affiliates (such
trade names and trademarks are hereinafter collectively referred to as the
"TRADE NAMES" and are identified on the Schedule of Trade Names attached
hereto as Exhibit C);
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(vii) The contracts and agreements relating to the Real Property
which Purchaser has elected to assume pursuant to Section 5(e) (such
------------
contracts and agreements are hereinafter collectively referred to as the
"CONTRACTS");
(viii) All permits, licenses, authorizations, consents,
entitlements, approvals and certificates relating to the Property, to the
extent assignable (collectively, the "PERMITS"). (The Real Property, the
Personal Property, the Trade Names, the Contracts and the Permits with
respect to each Parcel is individually referred to in this Agreement as the
"PROPERTY" and are collectively referred to in this Agreement as the
"PROPERTIES").
(c) The Property does not include (i) the Existing Security Items,
(ii) cash and cash equivalents of Seller and its Affiliates, (iii) any accounts
receivable or claims of Seller or its Affiliates existing on or attributable to
any period prior to the Closing Date (subject to the provisions of Section 15),
----------
(iv) any right to use the name, marks or insignia of Seller or its Affiliates,
or (v) except as provided in Section 18, any rights under insurance policies
----------
maintained by Seller with respect to the Properties. As used in this Agreement,
an "AFFILIATE" means with respect to Seller or Purchaser, any person or entity
directly or indirectly controlling, controlled by or under common control with
such other person or entity. For purposes of this definition, "CONTROL" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies whether through the ownership of voting
securities, by contract or otherwise.
2
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3. THE PURCHASE PRICE.
------------------
(a) Subject to increase in accordance with Section 16, the aggregate
----------
purchase price for the Properties is Forty Three Million Six Hundred Eighteen
Thousand Dollars ($43,618,000.00) (the "PURCHASE PRICE"). Seller and Purchaser
agree that the Purchase Price is allocated among the Properties in accordance
with Exhibit D attached hereto (each allocated purchase price is referred to in
---------
this Agreement as an "ALLOCATED PURCHASE PRICE"). The Purchase Price shall be
paid to Seller by Purchaser by the Closing (as hereinafter defined) as follows:
(b) Within two (2) Business Days after the execution of this
Agreement by Seller and Purchaser, Purchaser shall deliver to First American
Title Company ("ESCROW COMPANY") a deposit equal to Ten Million Dollars
($10,000,000) (the "DEPOSIT"). If Purchaser fails to timely deliver the Deposit,
Purchaser shall be in breach of this Agreement and Seller shall be entitled to
terminate this Agreement and shall be entitled to liquidated damages pursuant to
Section 19(b). Escrow Company shall deposit One Million Dollars ($1,000,000) of
- -------------
the Deposit (the "LIQUIDATED DAMAGES DEPOSIT") into an interest bearing deposit
account established in the name of Seller (the "LIQUIDATED DAMAGES DEPOSIT
ACCOUNT") and the remaining Nine Million Dollars ($9,000,000) of the Deposit
(the "ADVANCE DEPOSIT") into an interest bearing account established in the name
of Purchaser and selected by Purchaser to be credited to the Purchase Price (the
"ADVANCE DEPOSIT ACCOUNT"). As used herein, the "DEPOSIT" means the Deposit plus
any interest actually earned thereon and held in the Liquidated Damages Deposit
Account or the Advance Deposit Account, as the case may be, at the relevant
time. Seller and Purchaser agree that the Deposit shall be allocated among the
Properties, in the same proportion that the Allocated Purchase Price for each
property bears to the aggregate Purchase Price and in accordance with
Exhibit D (such allocated portion of the Deposit being the "ALLOCATED DEPOSIT").
- ---------
Provided that Purchaser has not terminated the Agreement in the manner specified
in Section 5 prior to the expiration of the Due Diligence Period, Escrow Company
---------
shall immediately release One Million Dollars ($1,000,000.00) from the
Liquidated Damages Deposit Account to Seller upon the expiration of the Due
Diligence Period without the need for authorization or consent of Purchaser.
Upon written notice to the Escrow Holder and Seller, Purchaser shall be entitled
to receive periodically (but not more frequently than once per week) from the
Liquidated Damages Deposit Account or the Advance Deposit Account, as the case
may be, interest actually paid on the amount of the Deposit held therein.
(c) If the purchase and sale of the Properties is consummated as
contemplated herein, the Deposit shall be credited against the Purchase Price.
If the purchase and sale of the Properties is not consummated because of a
default under this Agreement on the part of Seller, a failure of a Purchaser's
Condition Precedent or a failure of Seller's Condition Precedent (excluding
Purchaser's default under this Agreement), the Deposit shall be immediately
refunded to Purchaser. If the purchase and sale of the Properties is not
consummated because of a default under this Agreement by Purchaser, the
Liquidated Damages Deposit shall be retained by Seller pursuant to Section
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19(b).
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3
<PAGE>
(d) The balance of the Purchase Price shall be paid to Seller in
immediately available funds at Closing, which balance shall be deposited by wire
transfer into escrow with Escrow Company no later than one (1) Business Day
prior to the Closing. As used herein, "BUSINESS DAY" means any day other than
(i) a Saturday or Sunday, or (ii) a day on which banking institutions in the
State of California are authorized or obligated by law or executive order to be
closed.
4. TITLE.
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(a) Within five (5) days after the Execution Date, Seller shall
deliver to Purchaser (i) for each of the Properties, the preliminary title
reports listed on Exhibit E attached hereto issued by First American Title
---------
Company (the "TITLE COMPANY"), together with copies of all documents relating to
the title exceptions referred to therein (collectively, the "PTRS"), and (ii)
the ALTA surveys described on Exhibit E attached hereto (collectively, the
---------
"SURVEYS").
(b) Within twenty (20) days after the Execution Date, Purchaser shall
notify Seller in writing of any title exceptions shown in any PTR that Purchaser
disapproves and the exceptions disapproved in such timely notice shall
constitute "DISAPPROVED EXCEPTIONS". Thereafter, if any written update to any
PTR reveals a material exception to title not shown on such PTR, then Purchaser
shall notify Seller in writing of Purchaser's disapproval of such new exception
within ten (10) days after Purchaser's receipt of such update, and the
exceptions disapproved in such timely notice shall also be Disapproved
Exceptions. Any exception not disapproved in writing within such twenty (20)
day period (for review of the PTRs) or within such ten (10) day period (for
review of updates) shall be deemed approved by Purchaser, and shall constitute a
"PERMITTED EXCEPTION" hereunder. Notwithstanding anything to the contrary
herein, all of the following shall also constitute Permitted Exceptions
(regardless of whether Purchaser disapproves of them): (i) real estate taxes and
assessments, existing bond or special district assessments, personal property
taxes, water and/or meter charges, sewer taxes, charges or rents, in each case
not yet due and payable, (ii) liens, encumbrances or other matters made, created
or suffered by or on behalf of Purchaser, including, without limitation, liens
arising as a result of any act or omission of Purchaser or Purchaser's agents,
contractors or representatives, (iii) zoning and other land use restrictions and
ordinances, (iv) rights of tenants under the Leases, (v) printed exceptions and
exclusions set forth in the Title Company's standard form policy of title
insurance, and (vi) matters which would be disclosed by a current and accurate
survey or an inspection of the Property.
(c) Within three (3) days after receiving Purchaser's written notice
disapproving any title exceptions contained in the PTRs (or update thereof),
Seller shall notify Purchaser in writing of any disapproved title exceptions
which Seller is unable or unwilling to cause to be removed or insured against
prior to or at Closing (the "UNRESOLVED EXCEPTIONS"). Seller's failure to
deliver its notice within such three (3) day period shall be deemed to be
Seller's election to treat such disapproved title exceptions as Unresolved
Exceptions. Notwithstanding the foregoing and prior to or at Closing, Seller
shall, at
4
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Seller's sole cost and expense, remove all deeds of trusts encumbering the
Properties (and pay all prepayment fees and expenses required in connection
therewith) and such deeds of trust will not be Unresolved Exceptions. With
respect to any Unresolved Exception, Purchaser shall elect within two (2) days
after receipt of Seller's notice, either to (i) deliver its Disapproval Notice
(as defined in Section 5(d) with respect to any Property affected by such
------------
Unresolved Exception, or (ii) waive its disapproval of such Unresolved
Exception, in which event, each such Unresolved Exception shall then be deemed
to be a Permitted Exception. Purchaser's failure to deliver its Disapproval
Notice with respect to any Property affected by such Unresolved Exceptions
within such two (2) day period shall be deemed to be Purchaser's election to
treat such Unresolved Exceptions as Permitted Exceptions.
(d) Purchaser, at Purchaser's option, may obtain additional title
endorsements and other extended title coverage at Purchaser's sole cost and
expense, including without limitation, any costs of surveys or survey updates as
may be required to obtain such coverage.
5. INSPECTION; DUE DILIGENCE PERIOD.
--------------------------------
(a) From the Execution Date and continuing until 5:00 p.m. Los Angles
time on the twenty-fifth (25th) day after the Execution Date (i.e., May 25,
1997) (the "DUE DILIGENCE PERIOD") and with reasonable advance notice to Seller,
Purchaser, its agents and representatives shall be entitled to enter onto the
Properties during regular business hours (subject to the rights of tenants in
possession) to perform inspections and tests of the Properties with respect to
the physical and the environmental condition of the Properties; provided,
--------
however, that in no event shall Purchaser or its agents or representatives (i)
- -------
unreasonably disturb the on-going operation of the Properties, (ii) unreasonably
disturb any tenants or occupants of the Properties, or (iii) drill or bore on or
through the surface of the Land without Seller's prior written consent, which
consent may be given or withheld in Seller's reasonable discretion. Prior to
Purchaser entering any Property to conduct the inspections and tests described
above, Purchaser shall obtain and maintain, and shall cause each of its
contractors and agents to maintain (and shall deliver to Seller evidence
thereof), at Purchaser's sole cost and expense, general liability insurance,
from an insurer reasonably acceptable to Seller, in the amount of One Million
Dollars ($1,000,000) combined single limit for personal injury and property
damage per occurrence and Two Million Dollars ($2,000,000) in the aggregate,
such policies to name Seller as an additional insured party, which insurance
shall provide coverage against any claim for personal liability or property
damage caused by Purchaser or its agents, employees or contractors in connection
with such inspections and tests. After making such tests and inspections,
Purchaser shall promptly restore the Properties to its condition prior to such
tests and inspections. Purchaser shall pay all costs and expenses relating to
such tests and inspections of the Properties and any restoration of the Property
in accordance with the terms of this Section 5. Seller or its representatives
----------
may accompany Purchaser during Purchaser's inspections.
(b) Purchaser shall keep the Properties free from all liens and shall
indemnify, defend, and hold harmless Seller from and against all loss,
liability, damage, cost
5
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and expense (including, but not limited to, reasonable attorneys' fees and
costs) incurred, suffered by, or claimed against Seller by reason of any actual
damage to the Properties or injury to persons caused by Purchaser and/or its
agents, employees or contractors in exercising its rights under Section 5(a).
------------
This indemnity shall survive the Closing or any termination of this Agreement.
(c) Purchaser shall provide to Seller, upon Purchaser's receipt
thereof, copies of all environmental and physical inspection reports, studies,
test results and similar data obtained by Purchaser in the course of its due
diligence investigation other than any attorney-client privileged
communications; provided, however, the foregoing shall be delivered to Seller
-----------------
without representation, warranty or liability to Purchaser, and Seller shall
have no right to rely on such reports unless the party preparing such reports so
agrees.
(d) On or before 5:00 p.m. Los Angeles time on the last day of the Due
Diligence Period, Purchaser may give written notice to Seller (the "DISAPPROVAL
NOTICE") of its desire to terminate the Agreement with respect to one or more
Properties (each, a "DISAPPROVED PROPERTY") because of the physical or
environmental condition of the Property, land use entitlement or any other
criteria deemed appropriate by Purchaser. If Purchaser disapproves of all of
the Properties, this Agreement shall be terminated in its entirety and the
Escrow Company shall refund the Deposit to Purchaser and Purchaser shall pay all
title or escrow cancellation fees related thereto. Purchaser's failure to
deliver the Disapproval Notice on or before the end of the Due Diligence Period
in accordance with the provisions of this Section 5(d) shall be conclusively
------------
deemed to be Purchaser's approval of all of the Properties. Purchaser and
Seller acknowledge that Purchaser may complete its due diligence investigations
before the end of the Due Diligence Period and that Purchaser and Seller would
intend to use reasonable efforts to expedite the Closing.
(e) If Purchaser disapproves of one or more, but not all, of the
Properties, Seller may elect, in its sole and absolute discretion, to do any of
the following by delivering written notice to Purchaser within three (3)
Business Days after receiving Purchaser's Disapproval Notice:
(i) to terminate this Agreement as to only the Disapproved
Properties, in which event, (x) Escrow Company shall retain the
Allocated Deposits for all of the Properties except the Disapproved
Properties in escrow and credit the retained Allocated Deposits
against amounts owed by Purchaser at Closing, (y) Escrow Company shall
refund the Allocated Deposits for the Disapproved Properties to
Purchaser at Closing and (z) Purchaser shall pay all title or escrow
cancellation fees related thereto; or
(ii) terminate this Agreement in its entirety, in which event,
Escrow Company shall refund the Deposit to Purchaser, and Purchaser
shall pay all title or escrow cancellation fees related thereto;
provided, however, if Seller elects or is deemed to elect to terminate
-----------------
this Agreement in its entirety, Purchaser may elect to waive its
disapproval of all of the Disapproved
6
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Properties and consummate its purchase of all of the Properties as
contemplated by this Agreement by delivering written notice of such
election to Seller and Escrow Company within two (2) Business Days
after receiving Seller's written notice.
Seller's failure to deliver the foregoing notice on or before the end of such
three (3) Business Day period in accordance with the provisions of Section 5(e)
------------
shall be conclusively deemed to be Seller's election to terminate this Agreement
in its entirety. Purchaser's failure to deliver the foregoing notice on or
before the end of such two (2) Business Day period in accordance with the
provisions of Section 5(e)(ii) shall be conclusively deemed to be Purchaser's
----------------
election to so waive its disapproval of all of the Disapproved Properties.
(f) Purchaser shall notify Seller in writing not later than 5:00 p.m.
Los Angeles time on the tenth (10th) day after the Execution Date of any
contract or agreement affecting the Property which Purchaser elects to assume.
If Purchaser fails to so designate any contract or agreement, Purchaser shall be
conclusively deemed to have elected not to assume such contract or agreement and
Seller shall be entitled to terminate such contract or agreement.
6. REPRESENTATIONS AND WARRANTIES OF SELLER.
----------------------------------------
Seller represents and warrants to Purchaser that the following matters
are true and correct as of the Execution Date and will also be true and correct
as of the Closing:
(a) AUTHORITY. Seller is a corporation, duly organized, validly
---------
existing and in good standing under the laws of the State of California.
(b) DUE EXECUTION. Seller has the corporate power and authority to
-------------
execute, deliver and perform this Agreement. Seller has duly authorized the
execution, delivery and performance of this Agreement. This Agreement, assuming
due authorization, execution and delivery by Purchaser, constitutes the legal,
valid, and binding obligations of Seller enforceable against Seller in
accordance with its 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
violate the material provisions of any agreement to which Seller is a party or
to which it is subject.
(c) LITIGATION. To Seller's Actual Knowledge and except as set forth
----------
in the Due Diligence Materials, Seller has received no written notice of any
actions, suits or proceedings, pending or threatened, before any judicial,
administrative or other governmental authority with respect to any Property (or
any portion thereof), including without limitation, any eminent domain or
condemnation proceedings affecting any portion of any Property.
(d) GOVERNMENTAL NOTICES. To Seller's Actual Knowledge and except as
--------------------
set forth in the Due Diligence Materials, Seller has received no written notice
from any city,
7
<PAGE>
county, state or other government authority that any Property or any matter
thereon is in violation of the laws, rules or ordinances applicable to the
Property, which violation has not been corrected prior to the Execution Date.
(e) TAXES; ZONING. To Seller's Actual Knowledge and except as set
-------------
forth in the Due Diligence Materials, Seller has received no written notice of
the existence or proposed assessment of special taxes or assessments against any
Property, or the pendency of changes in the zoning materially adversely
affecting the Property.
(f) LEASING COMMISSIONS. Other than any leasing commission which may
-------------------
be due and payable upon the extension or renewal of any Lease after Closing (for
which Purchaser shall be solely responsible), there are no leasing commissions
due and payable with respect to any Property.
For purposes of this Agreement and each of the documents executed in
connection herewith, "SELLER'S ACTUAL KNOWLEDGE" shall specifically mean and be
limited to the actual knowledge, as of the Execution Date, of Mr. Charles
Johnson and Ms. Sunny Lee in their capacity as officers of Mission Land Company,
without any duty of inquiry or independent investigation on the part of Seller
or such individuals. As used in this Agreement, "DUE DILIGENCE MATERIALS" shall
mean the (i) information and other materials contained in the files made
available to Purchaser at Seller's office in Ontario, California, including,
without limitation, the PTRs and Surveys, and (ii) supplementary information and
materials disclosed in writing to Purchaser on or before the expiration of the
Due Diligence Period. Also as used in this Agreement, the phrase "SELLER HAS
RECEIVED NO WRITTEN NOTICE" with respect to an event or a situation shall
specifically mean that Mr. Charles Johnson and Ms. Sunny Lee have no Actual
Knowledge of receiving the subject written notice. Purchaser expressly
understands and agrees that the individuals listed above shall not be personally
liable to Purchaser for any representation or warranty set forth herein. The
representations and warranties of Seller set forth in this Section 6 shall
---------
survive the Closing for a period of one year and shall terminate and be of no
further force or effect upon the first anniversary of the Closing Date. Any
action or proceeding with respect to the truth, accuracy or completeness of any
representation or warranties of Seller must be commenced, if at all, prior to
the first anniversary of the Closing Date and, if not commenced on or before
such date, shall be void and of no force or effect. Notwithstanding anything to
the contrary contained herein, Seller shall have no liability with respect to
any of the foregoing representations and warranties if, prior to the Closing,
Purchaser discovers or learns of information (from whatever source, as a result
of Purchaser's due diligence tests, investigations and inspections of the
Property, disclosure by Seller or Seller's agents and employees or the Tenant
Estoppel Certificates) that contradicts any of the foregoing representations and
warranties, or renders any of the foregoing representations and warranties
untrue or incorrect, and Purchaser nevertheless consummates the transaction
contemplated by this Agreement.
8
<PAGE>
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
-------------------------------------------
Purchaser represents and warrants to Seller that the following matters
are true and correct as of the Execution Date and will also be true and correct
as of the Closing:
(a) AUTHORITY. Purchaser is a limited partnership duly organized,
---------
validly existing and in good standing under the laws of Delaware.
(b) DUE EXECUTION. Purchaser has the power and authority to execute,
-------------
deliver and perform this Agreement. Purchaser has duly authorized the
execution, delivery and performance of this Agreement. This Agreement, assuming
due authorization, execution and delivery by Seller, constitutes the legal,
valid, and binding obligations of Purchaser enforceable against Purchaser in
accordance with its 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 violate the material provisions of any agreement to which Purchaser is a
party or to which it is subject.
(c) DUE DILIGENCE APPROVALS. Purchaser acknowledges that prior to the
-----------------------
Closing, Purchaser will have had the opportunity to investigate all physical,
legal 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,
(i) development potential of the Properties and the use, habitability,
merchantability, fitness, value or adequacy of the Property for any particular
purpose, (ii) zoning, entitlements, land use or development restrictions and
conditions of the Properties, (iii) compliance of the Properties and their
operations with all applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions and restrictions or any governmental or quasi-governmental
entity, (iv) condition of title to the Properties, (v) Leases, Contracts,
Permits and other agreements and instruments affecting the Properties, (vi)
contracts for work in progress, and (vii) economic performance and feasibility
of the Properties, and (viii) the physical and environmental condition of the
Property.
(d) NO REPRESENTATIONS; PURCHASE AS IS. Except as otherwise expressly
----------------------------------
set forth in this Agreement, 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 Properties, including, without limitation, the use or development
thereof or the financial situation of any tenants of the Properties. Purchaser
further represents and warrants that, 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, other than as
expressly set forth in this Agreement, and that all matters concerning the
Properties have been or shall be independently verified by Purchaser prior to
the Closing, and that Purchaser shall purchase the Properties based on
Purchaser's own prior due diligence investigations, inspections and examinations
of the Properties (or Purchaser's election not to do so); AND
---
9
<PAGE>
THAT PURCHASER IS PURCHASING THE PROPERTIES IN AN "AS IS" AND "WITH ALL FAULTS"
- -------------------------------------------------------------------------------
PHYSICAL CONDITION AND IN AN "AS IS" AND "WITH ALL FAULTS" STATE OF REPAIR.
- --------------------------------------------------------------------------
Except as expressly provided for in this Agreement, Purchaser does hereby waive,
and Seller does hereby disclaim, all warranties of any type or kind whatsoever
with respect to the Properties, whether express or implied, including, by way of
description but not limitation, those of fitness for a particular purpose and
use, tenantability or habitability.
8. RELEASE BY PURCHASER.
--------------------
(a) Purchaser and any person or entity claiming by, through or under
Purchaser, hereby fully and irrevocably releases, discharges and waives its
rights to recover from Seller and Seller's Affiliates, and their respective
officers, directors, employees, shareholders, partners, agents and
representatives (collectively, the "SELLER RELEASEES"), from any and all claims
that Purchaser may now have or hereafter acquire against any Seller Releasee 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 existence or presence of Hazardous
Substances in, on, under, or about any Property or the non-compliance of any
Property with any Environmental Laws. As used in this Agreement, "HAZARDOUS
SUBSTANCE" means (i) any chemical, compound, material or substance that is
defined in or otherwise classified pursuant to any Environmental Law as a
"hazardous substance," "extremely hazardous substance," "hazardous material,"
"extremely hazardous material," "hazardous waste," "toxic pollutant," or "toxic
substance"; (ii) any substance classified by reason of deleterious properties
such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity;
(iii) oil, gas and any other petroleum hydrocarbon; (iv) polychlorinated
biphenyls; (v) inflammable substances or explosives; (vi) radon or other
radioactive materials; (vii) asbestos or asbestos-containing materials; (viii)
urea formaldehyde foam insulation; (ix) lead or lead-containing materials; or
(x) those substances listed in the United States Department of Transportation
Table (49 CFR (S)(S) 172.101 and amendments thereto) or by the Environmental
Protection Agency (or any successor agency) (40 CFR (S) 302 and amendments
thereto). As used herein, "ENVIRONMENTAL LAWS" means collectively, all present
and future laws (whether common law, statute, rule, regulation, ordinance or
otherwise), the requirements of governmental authorities and any permits and
guidance issued pursuant thereto relating to human health or the environment, as
heretofore or hereafter amended, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, 42, U.S.C. (S)(S) 9601 et seq., the Resource Conservation and Recovery
-------
Act of 1976, as amended, 42 U.S.C. Section 6901 et seq., the Hazardous Materials
-------
Transportation Act, as amended, 49 U.S.C. (S)(S) 1801 et seq., the Toxic
-------
Substance Control Act, as amended, 15 U.S.C. (S)(S) 2601 et seq., the Clean Air
-------
Act, 42 U.S.C. (S)(S) 7401 et seq., the Clean Water Act of 1977, 33 U.S.C. (S)
-------
1251 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
-------
(S)(S) 136 et seq., the Occupational Safety and Health Act of 1970, 29 U.S.C.
-------
(S)(S) 651 et seq., the Hazardous Substance Account Act, Cal. Health & Safety
-------
Code (S)(S) 25300 et seq., California Porter-Cologne Water Quality Control Act,
-------
Cal. Water Code (S)(S) 13000 et seq., and the California
-------
10
<PAGE>
Occupational Safety and Health Act of 1973, Cal. Labor Code (S)(S) 6300 et seq.,
-------
and in any regulations promulgated pursuant thereto.
(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
Properties, Purchaser shall look solely to persons and entities other than the
Seller Releasees 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 (S) 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.
9. DELIVERY OF DOCUMENTS.
---------------------
Seller, at Seller's office, shall make available to Purchaser and its
agents and employees during Seller's regular business hours, Seller's files
regarding the operation and ownership of the Properties (except for materials
which are subject to attorney-client privilege or other confidentiality
restrictions) including, without limitation, the following:
(a) any outstanding Contracts, and any amendments thereto, to which
Seller is a party relating to the Properties;
(b) any environmental reports (including Phase 1 reports,
environmental impact reports, toxic reports, soils and geological reports) and
any surveys of the Properties in Seller's possession;
(c) any Permits in Seller's possession;
(d) the tax bill for each Property issued for the most recent year for
real estate taxes;
11
<PAGE>
(e) any engineering and structural tests, contracts for work in
progress, insurance contracts, governmental agreements and approvals,
architectural plans and site plans;
(f) the Leases and any amendments thereto;
(g) the PTRs and Surveys; and
(h) plans and drawings of the Improvements.
Purchaser acknowledges and agrees that the foregoing deliveries, and the
delivery of any other material or documents to Purchaser, were made by Seller to
accommodate and facilitate Purchaser's investigations relating to the
Properties, and that except as expressly provided for in Section 6, neither
---------
Seller nor any of its agents or representatives make any representations or
warranties of any kind regarding the accuracy or thoroughness of the information
contained in the materials delivered to Purchaser or made available for
Purchaser's inspections.
10. CONFIDENTIALITY. Purchaser agrees that it shall keep strictly
---------------
confidential the information contained in the materials provided for inspection
by Seller pursuant to this Agreement and shall not disclose such information to
any third parties; provided, however, that Purchaser shall have the right to
-------- -------
provide such information to its lenders, consultants, attorneys, and prospective
investors in connection with Purchaser's acquisition of the Properties under the
following conditions:
(i) Purchaser shall instruct the aforesaid parties to maintain
the confidentiality of such information;
(ii) At the written request of Seller, Purchaser shall promptly
inform Seller of the identity of each party to whom such information is
furnished and when such information was furnished to each party; and
(iii) Purchaser shall instruct such parties to return to Seller
all copies and originals of any documents relating to the Properties upon
Seller's written request.
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.
11. CONDITIONS PRECEDENT TO CLOSING.
-------------------------------
(a) PURCHASER'S CONDITIONS PRECEDENT. The following shall be
--------------------------------
conditions precedent to Purchaser's obligation to consummate the purchase and
sale transaction
12
<PAGE>
contemplated herein with respect to each Property (the "PURCHASER'S CONDITIONS
PRECEDENT"):
(i) Neither Purchaser nor Seller shall have validly terminated
this Agreement.
(ii) Title Company shall stand ready to issue at the Closing an
ALTA extended coverage Owner's Policy of Title Insurance with liability in
the full amount of the Allocated Purchase Price, subject only to the
Permitted Exceptions (the "TITLE POLICY"), insuring Purchaser's interest in
the Property, dated the day of the Closing.
(iii) There shall exist no material breach of any of Seller's
representations and warranties set forth in Section 6 or any other material
---------
obligation of Seller hereunder as of the Closing.
(iv) Seller shall have delivered to the Escrow Company the items
described in Section 13.
----------
(v) Purchaser shall have received, at least three (3) Business
Days prior to the Closing, estoppel certificates substantially in the form
of Exhibit L-1 attached hereto executed by tenants of the Improvements (the
-----------
"TENANT ESTOPPEL CERTIFICATES") occupying a total of at least eighty-five
percent (85%) of the space which is leased as of the Execution Date for
each Property, which Estoppel Certificates do not materially and adversely
differ from information contained in the Due Diligence Materials; provided,
--------
however, that if the form of estoppel certificate attached hereto as
-------
Exhibit L-1 requests information in addition to or different than that
-----------
required to be given pursuant to a tenant's Lease, this condition will be
satisfied for such tenant if such tenant executes an estoppel certificate
in the form or containing only such information required pursuant to its
Lease. If Seller is unable to obtain a Tenant Estoppel Certificate from a
sufficient number of tenants at any Property to satisfy the percentage set
forth above, then, in lieu thereof, Seller may elect, in its sole and
absolute discretion, to satisfy such condition by providing to Purchaser a
certificate in the form of Exhibit L-2 attached hereto (the "SELLER
-----------
CERTIFICATE") so that for each Property Purchaser receives Tenant Estoppel
Certificates and Seller Certificates for at least eighty-five percent (85%)
of such leased area; provided, however, that if, after the Closing, Seller
-------- -------
delivers to Purchaser a Tenant Estoppel Certificate from a tenant for whom
Seller executed a Seller Certificate at the Closing, then such Seller
Certificate shall be of no force or effect and Seller shall be released
from the Seller Certificate. Any action, suit or proceeding with respect
to the truth, accuracy or completeness of such Seller Certificate shall be
commenced, if at all, on or before the date which is twelve (12) months
after the date of the Closing and, if not commenced on or before such date,
thereafter shall be void and of no force or effect.
13
<PAGE>
The conditions set forth in this Section 11(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) SELLER'S CONDITIONS PRECEDENT. The following shall be conditions
-----------------------------
precedent to Seller's obligation to consummate the purchase and sale transaction
contemplated herein with respect to each Property (the "SELLER'S CONDITIONS
PRECEDENT"):
(i) Neither Purchaser nor Seller shall have validly terminated
the Agreement.
(ii) Purchaser shall have delivered to Escrow Company, prior to
the Closing, for disbursement as directed hereunder, all cash or other
consideration or other immediately available funds due from Purchaser in
accordance with this Agreement.
(iii) There shall exist no material breach of any of Purchaser's
representations or warranties set forth in Section 7 or any other material
---------
obligation of Purchaser hereunder as of the Closing.
(iv) Purchaser shall have delivered to Escrow Company the items
described in Section 14.
----------
(v) Purchaser shall have replaced all of the Existing Security
Items in accordance with Section 15(c).
-------------
The conditions set forth in this Section 11(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.
12. COVENANTS OF SELLER.
-------------------
Seller covenants after the Execution Date and prior to the Closing, so
long as this Agreement remains in full force and effect and so long as Seller
has no good faith reason to believe that there exists a breach or default by
Purchaser hereunder, as follows:
(a) NO TRANSFERS. After the Execution Date and prior to the Closing,
------------
no part of the Properties, or any interest therein, will be sold or otherwise
transferred without Purchaser's consent. After the Execution Date and prior to
the Closing, Seller shall not create or permit the creation of any new title
exceptions (such as easements or liens) without Purchaser's prior written
approval, which approval shall not be unreasonably withheld or delayed.
(b) LEASING. After the Execution Date and prior to the Closing,
-------
Seller shall not enter into any new leases, or amend, modify, terminate or
extend any existing
14
<PAGE>
Leases without the prior written consent of Purchaser (which consent shall not
be unreasonably withheld or delayed). Seller shall perform its obligations
under the Leases. Purchaser shall be solely responsible for the payment of all
leasing commissions and any tenant improvement costs or allowance, move-in
allowance and any other payment to the tenant thereunder in connection with all
Leases (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).
(c) CONTRACTS. After the Execution Date and prior to the Closing,
---------
Seller shall not enter into any new contracts or agreements which would bind any
Property or Purchaser or amend, modify, terminate or extend the Contracts, in
any case without the prior written consent of Purchaser, which consent shall not
be unreasonably withheld or delayed. Seller shall perform its obligations under
the Contracts.
(d) INSURANCE. Until the Closing, Seller shall keep the Properties
---------
insured against fire, vandalism and other loss, damage and destruction
customarily insured against by owners of similar real property in the same
location as the Property; provided, however, that 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.
(e) OPERATIONS. Until the Closing, Seller shall operate and maintain
----------
the Properties as required in the ordinary course of its business and perform
its obligations with respect thereto.
13. SELLER'S CLOSING DELIVERIES.
---------------------------
At least one (1) Business Day prior to the Closing, Seller shall
deliver or cause to be delivered to Escrow Company the following:
(a) A grant deed in the form of Exhibit F attached hereto (the "GRANT
---------
DEED") for each Property, executed by Seller, in recordable form, conveying the
Property (free and clear of all claims, liens and encumbrances except the
Permitted Exceptions) to Purchaser.
(b) A Bill of Sale in the form of Exhibit G attached hereto (the "BILL
---------
OF SALE"), executed by Seller, conveying to the Purchaser title to the Personal
Property, if any.
(c) A General Assignment in the form of Exhibit H attached hereto (the
---------
"GENERAL ASSIGNMENT"), executed by Seller, assigning to Purchaser the Contracts
and the Permits relating to the Properties, to the extent that such items are
assignable.
(d) An Assignment of Leases in the form of Exhibit I attached hereto
---------
(the "ASSIGNMENT OF LEASES"), for each Property, executed by Seller, in
recordable form, assigning to Purchaser all of Seller's interest under the
Leases.
15
<PAGE>
(e) An affidavit in the form of Exhibit J attached hereto (the
---------
"CERTIFICATE OF NON-FOREIGN STATUS"), executed by Seller, certifying that Seller
is not a "foreign person" within the meaning of Section 1445(f)(3) of the
Internal Revenue Code of 1986.
(f) A California Franchise Tax Board Form 590 ("FORM 590") specifying
that Seller has a permanent place of business in California and is qualified to
do business in California.
(g) An officer's certificate of Mission, dated as of the Closing Date,
certifying to the authority and incumbency of the officer(s) signing on behalf
of Seller.
(h) A certificate of good standing from the State in which each Seller
is organized.
(i) Any other documents, instruments or agreements reasonably
necessary to effectuate the transactions contemplated by this Agreement.
(j) A notice to each tenant of each Property prepared by Purchaser, in
form and substance reasonably satisfactory to Seller and Purchaser, notifying
such tenant of the sale of the Property to Purchaser.
On the Closing Date, Seller shall deliver to Purchaser outside of the escrow
originals of the Leases and Contracts to the extent in Seller's possession,
together with any keys or access cards to the Properties.
14. PURCHASER'S CLOSING DELIVERIES.
------------------------------
At least one (1) Business Day prior to the Closing, Purchaser shall
deliver to Seller or Escrow Company:
(a) The balance of the Purchase Price, together with such other sums
as Escrow Company shall require to pay Purchaser's share of the closing costs,
prorations, reimbursements and adjustments as set forth in Sections 15 and 17
----------- --
herein, all in immediately available funds.
(b) An executed counterpart of the General Assignment and the
Assignment of Leases, whereby Purchaser shall assume the obligations relating to
the matters set forth in such documents.
(c) An Assumption Agreement in the form of Exhibit K attached hereto
---------
(the "ASSUMPTION AGREEMENT"), executed by Purchaser pursuant to which Purchaser
shall assume all of the Assumed Liabilities. As used herein, "ASSUMED
LIABILITIES" shall mean all liabilities and obligations relating or attributable
to the ownership, development, use or operation of the Property on or after the
Closing, including, without limitation, all liabilities and obligations arising
on or after the Closing Date under Contracts and work in progress on
16
<PAGE>
any part of the Property for which Purchaser has agreed to be liable, all
liabilities and obligations under Leases, Contracts and Permits, the performance
of which may or are to be performed on or after the Closing and all liability
for any personal injury or property damage occurring in, on or about the
Property on or after the Closing.
(d) A certificate from a general partner dated as of the Closing
Date, certifying to the authority and incumbency of the general partners (or
officers thereof) signing on behalf of Purchaser.
(e) A certificate of good standing from the state in which Purchaser
is organized.
(f) Any other documents, instruments or agreements reasonably
necessary to effectuate the transactions contemplated by this Agreement.
15. PRORATIONS, ADJUSTMENTS; RELEASE OF BONDS AND OTHER SECURITY
--------------
DEVICES.
-------
(a) The following shall be prorated and adjusted between Seller and
Purchaser as of the day of the Closing, except as otherwise specified:
(i) REAL PROPERTY TAXES. General real and personal property
-------------------
taxes, assessments, existing bond or special district assessments and any
improvement or other bonds encumbering the Properties, shall be prorated
for the current tax year for the Properties. Such amounts shall be for the
account of Seller for the period before the Closing Date and for the
account of Purchaser for the Closing Date and thereafter. Such proration
shall satisfy the obligation of Seller to Purchaser with respect to such
taxes and assessments and levies.
(ii) RENTS. Rent and other charges payable under the Leases (to
-----
the extent such monies have actually been collected by Seller) shall be
prorated. Such amounts shall be for the account of Seller for the period
before the Closing Date and for the account of Purchaser for the Closing
Date and thereafter. Rents and other charges payable 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, to
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 shall remit such amounts to Seller within ten
(10) days after receipt). 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 proceedings,
including an action for unlawful detainer, against a tenant owing
delinquent rents.
17
<PAGE>
(iii) SECURITY DEPOSITS. The amount of all unapplied security
-----------------
deposits under the Leases as of the Closing Date shall be credited to
Purchaser and Purchaser shall assume all of Seller's obligations with
respect thereto; 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 at the Closing, and there shall be no credit against the Purchase
Price at the Closing with respect to any such tenant security deposit.
(iv) OTHER. Operating cost reimbursements, percentage rentals,
-----
additional rentals and other retroactive rental escalations, sums or
charges payable by tenants which accrue prior to the Closing but are not
then due and payable, shall be prorated as of the Closing. Such amounts
shall be for the account of Seller for the period before the Closing Date
and for the account of Purchaser for the Closing Date and thereafter.
(v) UTILITIES. All utility service charges for electricity,
---------
heat and air conditioning service, other utilities, elevator maintenance,
common area maintenance, taxes (other than real estate taxes) such as
rental taxes, other expenses incurred in operating the Property that Seller
customarily pays, and any other costs incurred in the ordinary course of
business or the management and operation of the Property shall be prorated
on an accrual basis. Seller shall pay all such expenses that accrue prior
to the Closing Date and Purchaser shall pay all amounts accruing on the
Closing Date and thereafter. To the extent possible, Seller and Purchaser
shall obtain billings and meter readings as of the Closing Date to aid in
such prorations. Any utility deposits held by utilities on the Closing
Date shall be credited to Seller and charged to Purchaser to the extent
such deposits are assignable and assigned to Purchaser on or prior to the
Closing Date.
(vi) LEASING COMMISSIONS. Seller shall pay in full all leasing
-------------------
commissions with respect to the tenant leases entered into as of or prior
to the Closing without contribution or proration from Purchaser; provided,
--------
however, that Purchaser shall reimburse Seller at Closing for all such
-------
commissions paid by Seller and relating to Leases (or amendments,
modifications or extensions thereto) entered into as permitted by this
Agreement after the Execution Date and meeting the Leasing Criteria or
approved by Purchaser pursuant to Section 12(b), and Purchaser shall assume
-------------
Seller's obligations with respect to any leasing commissions due with
respect to the renewal or extension of any Lease which occurs after the
Closing.
(vii) CONTRACTS. Amounts payable under any Contracts shall be
---------
prorated on an accrual basis. Seller shall pay all amounts due thereunder
which accrue prior to the Closing and Purchaser shall pay all amounts
accruing on the Closing Date and thereafter.
18
<PAGE>
(b) Subject to Section 15(a), all income and expenses for the
-------------
Properties which accrue for the period prior to the Closing shall be for the
account of Seller and all income and expenses of the Properties which accrue for
the period on and after the Closing shall be for the account of Purchaser. For
purposes of calculating prorations, Purchaser shall be deemed to be in title to
the Properties, 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 (360) day year, as
applicable. The amount of such prorations shall be initially performed by
Seller prior to Closing but 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 agree to 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). Without limiting the generality of the
foregoing, Seller and Purchaser agree that:
(i) with respect to any year-end reconciliations of percentage
rent, retroactive rental escalations and reimbursable expenses under the
Leases, Seller and Purchaser shall cooperate to complete such
reconciliations as soon as possible after the Closing, with Seller
responsible for amounts owing to tenants under the Leases, and entitled to
amounts payable by tenants under the Leases (as the case may be), with
respect to periods prior to the Closing, and with Purchaser responsible for
amounts owing to tenants under the Leases, and entitled to amounts payable
by tenants under the Leases (as the case may be), with respect to periods
from and after the Closing (and, with respect to any such amounts payable
to Seller, Purchaser agrees that it shall use commercially reasonable
efforts to collect such amounts; provided, however, that Purchaser shall
-------- -------
have no obligation to institute legal proceedings, including an action for
unlawful detainer, against a tenant owing any such amounts);
(ii) 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 thereunder 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 reasonable costs and
expenses incurred by Seller in pursuing such appeal or reassessment) in
proportion to their respective periods of ownership of the Properties 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 under the Leases
for its respective period of ownership of the Properties for such tax
year); and
19
<PAGE>
(iii) in no event will there be any proration of insurance
premiums under Seller's existing policies of insurance relating to the
Properties, and Purchaser acknowledges and agrees that none of Seller's
insurance policies (or any proceeds payable thereunder, except as expressly
provided for in Section 18) 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.
(c) On or before the date which is five (5) Business Days after the
Execution Date, Seller shall deliver to Purchaser a schedule setting forth all
of the bonds, deposits, letters of credit, set aside letters or other similar
items, if any, that are outstanding with respect to the Properties or the
development thereof that have been provided by Seller or any of its Affiliates
to any governmental agency, public utility or similar entity (collectively,
"EXISTING SECURITY ITEMS"). On or before the Closing Date, Purchaser shall
replace all of the Existing Security Items with new letters of credit, bonds,
deposits and the like and obtain the release of Seller and its Affiliates from
any obligations under the Existing Security Items. To the extent that any funds
are released as a result of the termination of the Existing Security Items, such
funds shall be delivered to Seller or the Affiliate which originally provided
the same. The provisions of this Section 15 shall survive the Closing.
----------
16. CLOSING.
-------
As used herein, the "CLOSING" is the consummation of the purchase and
sale contemplated herein which shall occur in a single closing as soon as
possible after the satisfaction or waiver of the last of Purchaser's Conditions
Precedent and Seller's Conditions Precedent but in no event later than five (5)
Business Days after the end of the Due Diligence Period (i.e., June 2, 1997)
(the "OUTSIDE CLOSING DATE"). If the Closing has not occurred by the Outside
Closing Date due to the inability to satisfy all of the Purchaser's Conditions
Precedent or Seller's Conditions Precedent, Seller shall have the right, but not
the obligation, to postpone by written notice to Purchaser the Closing by one or
more postponements, to a date not later than July 31, 1997. If the Closing has
not occurred by the Outside Closing Date due to a default by Purchaser, Seller
may elect not to terminate this Agreement but to allow Purchaser to cure such
default, and in such event the Purchase Price shall be increased in the amount
of Fifteen Thousand Dollars ($15,000.00) per day for each day after the Outside
Closing Date that the Closing occurs in order to fairly compensate Seller for
the opportunity costs and other detriment resulting from the delay in the
Closing. As used herein, the term "CLOSING DATE" means the date that all of
the Grant Deeds with respect to the Properties are recorded in the Official
Records of the County in which the applicable Parcel is located.
17. CLOSING COSTS.
-------------
(a) SELLER'S CLOSING COSTS. Seller shall pay (i) the fee for
----------------------
recording the Grant Deeds and Assignments of Leases and any other documents
recorded in connection with this transaction, (ii) any documentary transfer tax
imposed upon the conveyance of the Property to Purchaser, (iii) the portion of
the premium for the Title Policy (including the cost
20
<PAGE>
of Title Curative Endorsements (defined below)) equal to the amount of a CLTA
standard coverage owner's policy, and (iv) fifty percent (50%) of all other
escrow and closing costs. For purposes of this Agreement and each of the
documents executed in connection herewith, "TITLE CURATIVE ENDORSEMENTS" shall
specifically mean and be limited to those title endorsements obtained by Seller
to clear Disapproved Exceptions.
(b) PURCHASER'S CLOSING COSTS. Purchaser shall pay (i) all costs and
-------------------------
expenses incurred in connection with obtaining any financing for the purchase of
the Properties, (ii) any additional title insurance premium payable in
connection with any lender's policy of title insurance or any additional or
extended title coverage (including, without limitation, that portion of the
premium for the Title Policy equal to the amount in excess of a CLTA standard
coverage owner's policy and any costs of new surveys or survey updates,
revisions or certifications as may be required to obtain extended coverage),
(iii) the cost of any title endorsements which are not Title Curative
Endorsements, and (iv) fifty percent (50%) of all other escrow and closing
costs.
(c) OTHER CLOSING COSTS. Each party shall bear the expense of its own
-------------------
counsel. Unless specified herein, if the sale of any property contemplated
hereunder does not occur because of a default on the part of Purchaser, all
escrow and title cancellation fees with respect to such Property shall be paid
by Purchaser. If the sale of the Properties does not occur because of a default
on the part of Seller, all escrow and title cancellation fees shall be paid by
Seller. If the sale of the Properties does not occur because of a failure of a
Purchaser's Condition Precedent or a Seller's Condition Precedent, all escrow
and title cancellation fees shall be divided equally between Seller and
Purchaser.
18. RISK OF LOSS; TAKING.
--------------------
(a) If prior to the Closing, any Property is materially damaged (as
defined in this Section 18(d), a "MATERIALLY DAMAGED PROPERTY"), Purchaser shall
-------------
have the right, exercisable by giving written notice to Seller within five (5)
Business Days after receiving written notice of such damage or destruction (but
in any event prior to the Closing), either (i) to terminate this Agreement with
respect the Materially Damaged Property, in which case neither party shall have
any further rights or obligations hereunder with respect to the Materially
Damaged Property, and any money (including, without limitation, the applicable
Allocated Deposit and all interest actually earned thereon from the Execution
Date) or documents in escrow with respect to such Materially Damaged Property
shall be returned to the party depositing the same and Purchaser shall be
responsible for any title or escrow cancellation fee, or (ii) to accept the
Materially Damaged Property in its then condition and to proceed with the
Closing and to receive an assignment of all of Seller's right to any insurance
proceeds payable by reason of such damage or destruction and a credit at Closing
for any deductible under Seller's insurance policies or uninsured physical
damage; provided, however, that if the aggregate deductible and uninsured
-------- -------
physical damage exceeds Two Hundred Thousand Dollars ($200,000), Seller is
entitled to terminate this Agreement as to the Materially Damaged Property by
delivering written notice of such election to Purchaser.
21
<PAGE>
If Purchaser elects 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 defined
in this Section 18(d), a "MATERIALLY TAKEN PROPERTY") of any Property is subject
-------------
to a taking by public authority, Purchaser shall have the right, exercisable by
giving written notice to Seller within five (5) Business Days after receiving
written notice of such taking (but in any event prior to the Closing), either
(i) to terminate this Agreement with respect to the Materially Taken Property,
in which case neither party shall have any further rights or obligations
hereunder with respect to the Materially Taken Property, any money (including,
without limitation, the applicable Allocated Deposit and all interest actually
earned thereon from the Execution Date) or documents in escrow with respect to
such Materially Taken Property shall be returned to the party depositing the
same, and Purchaser shall be responsible for any title or escrow cancellation
fee, or (ii) to accept the Materially Taken Property in its then condition,
without a reduction in the Purchase Price, and to proceed with the Closing and
to receive an assignment of all of Seller's rights to any condemnation award
payable by reason of such taking. If Purchaser elects 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 18,
----------
"TAKING" shall mean any transfer of the Properties or any portion thereof or
interest therein to a governmental entity or other party with appropriate
authority, by exercise of the power of eminent domain.
(c) In the event that prior to the Closing, any non-material portion
of any Property is damaged or subject to a taking, Purchaser shall accept such
Property in its then condition 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, and a credit at Closing for any deductible under Seller's insurance policies
or uninsured physical damage; provided, however, if the aggregate deductible and
-------- -------
uninsured physical damage exceeds Two Hundred Thousand Dollars ($200,000),
Seller is entitled to terminate this Agreement as to such Property by delivering
written notice of such election to Purchaser. In the event of any such non-
material damage or taking, 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.
(d) For the purpose of this Section 18, damage to any Property or a
----------
taking of a portion thereof shall be deemed to be "material", or involve a
material portion, if the cost of restoration or repair of such damage or the
amount of the condemnation award with respect to such taking exceeds ten percent
(10%) of the Allocated Purchase Price.
(e) Seller agrees to give Purchaser notice of any taking, damage or
destruction of any Property promptly after Seller obtains knowledge thereof.
22
<PAGE>
19. DEFAULT.
-------
(a) Purchaser hereby acknowledges that the timely sale of the
Properties is of paramount importance to Seller, whether to Purchaser or to
another party. In acknowledgement of Seller's concern, and as a material
inducement to Seller to enter into this Agreement with Purchaser and
specifically in consideration of the terms set forth in this Agreement,
Purchaser hereby waives any and all rights that Purchaser may otherwise have
under applicable law, based upon the performance or non-performance of any of
the parties hereto, that may affect Seller's ability to sell the Properties to
another party in the event the sale contemplated herein is not consummated.
Without limiting the generality of the foregoing, Purchaser hereby specifically
waives any and all rights it may have (i) to record a notice of pendency of
action or a lis pendens or similar notice in any form or any other similar lien
-----------
against the Properties, (ii) to initiate or prosecute any action for specific
performance of this Agreement or any provision contained herein, (iii) to record
a memorandum or similar evidence of this Agreement against the Properties, or
(iv) to record or file or otherwise make a matter of public record any other
documents or perform any other act which may impede Seller's ability to timely
transfer, sell or convey the Properties to any other party (it being
acknowledged that the filing of an action against Seller for a breach of its
obligations hereunder shall not be deemed to materially impede the transfer of
the Properties so long as such action does not include an action for specific
performance, injunctive relief or a lien against or with respect to the
Properties). Notwithstanding the foregoing, Purchaser shall retain all other
rights and remedies available to Purchaser at law or in equity which are not
specifically waived herein; provided, however, that in an action for damages,
-------- -------
Purchaser shall be limited to recovering its actual damages but not any
consequential, special, exemplary or punitive damages and Purchaser hereby
waives its right to recover any such consequential, special, exemplary or
punitive damages.
(b) IF PURCHASER FAILS TO CLOSE THE PURCHASE OF ANY PROPERTY FOR ANY
REASON OTHER THAN SELLER'S DEFAULT OR FAILURE OF A PURCHASER'S CONDITION
PRECEDENT, SELLER MAY TERMINATE THIS AGREEMENT AND SELLER SHALL BE ENTITLED TO
RETAIN THE LIQUIDATED DAMAGES DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES
HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT
OF A DEFAULT BY PURCHASER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
ASCERTAIN AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE EXECUTION DATE ONE
23
<PAGE>
MILLION DOLLARS ($1,000,000.00) REPRESENTS THE PARTIES' REASONABLE ESTIMATE OF
SUCH DAMAGES. THIS SECTION 19(B) WILL NOT LIMIT SELLER'S RIGHT TO RECEIVE
REIMBURSEMENT OF ATTORNEY'S FEES OR COSTS, NOR WAIVE OR AFFECT PURCHASER'S
INDEMNITY OBLIGATIONS AND SELLER'S RIGHTS TO THOSE INDEMNITY OBLIGATIONS UNDER
THIS AGREEMENT. THE PAYMENT OF THE LIQUIDATED DAMAGES DEPOSIT AS LIQUIDATED
DAMAGES IS NOT INTENDED TO BE A FORFEITURE OR PENALTY, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE
SECTIONS 1671, 1676 AND 1677.
SELLER'S INITIALS: CWJ PURCHASER'S INITIALS: JCH
----- -----
20. BROKER'S COMMISSION.
-------------------
(a) Purchaser represents and warrants to Seller that no brokerage
commission, finder's fee or other compensation is due or payable with respect to
the transactions contemplated herein arising from Purchaser's actions or
omissions, except for amounts due to Purchaser's broker, Lee and Associates.
Purchaser hereby agrees to indemnify, defend, and hold the Seller harmless from
and against any losses, damages, costs and expenses (including, but not limited
to, attorneys' fees and costs) incurred by such party by reason of any breach or
inaccuracy of the representations and warranties contained in this Section
-------
19(a).
- -----
(b) Seller represents and warrants to Purchaser that no brokerage
commission, finder's fee or other compensation is due or payable with respect to
the transactions contemplated herein arising from Seller's actions or omissions,
except for amounts due to Seller's broker, Timothy Joyce and The Seeley Company,
for which Seller shall be solely responsible pursuant to separate written
agreements. Seller hereby agrees to indemnify, defend, and hold the Purchaser
harmless from and against any losses, damages, costs and expenses (including,
but not limited to, attorneys' fees and costs) incurred by such party by reason
of any breach or inaccuracy of the representations and warranties contained in
this Section 20(b).
-------------
(c) The provisions of this Section 20 shall survive the Closing.
----------
21. ESCROW.
------
(a) INSTRUCTIONS. Within five (5) Business Days after the Execution
------------
Date, 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 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
24
<PAGE>
instructions, the parties hereto agree to make such deletions, substitutions and
additions hereto as Purchaser and Seller shall mutually approve, which
additional instructions shall not substantially alter the terms of this
Agreement unless otherwise expressly provided therein.
(b) DEPOSITS INTO ESCROW. Seller shall make its deposits into escrow
--------------------
in accordance with Section 13. Purchaser shall make its deposits into escrow in
----------
accordance with Section 14. Escrow Company is hereby 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 13 and 14; and (ii) Title
----------- --
Company can and will issue the Title Policies 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 items required
by this Agreement and Title Company can and will issue the Title Policies
concurrently with the Closing, Escrow Company shall:
(i) Deliver to Purchaser: (1) the Grant Deeds by causing them to
be recorded in the Official Records of the Office of the County Recorder of
the County in which the Land is located; and immediately upon recording,
delivering to Purchaser a conformed copy of the Grant Deed; (2) the Bill of
Sale; (3) the General Assignment; (4) the Assignments of Leases; (5) the
Certificate of Non-Foreign Status.; (6) the Form 590; (7) any funds
deposited by Purchaser, and any interest earned thereon, in excess of the
amount required to be paid by Purchaser hereunder; and (8) the Title
Policies issued by Title Company.
(ii) Deliver to Seller: (1) the Purchase Price, after satisfying
the closing costs, prorations and adjustments to be paid by Seller pursuant
to Sections 15 and 17 hereof; (2) the Bill of Sale; (3) the General
----------- --
Assignment; (4) the Assignments of Leases; and (5) the Assumption
Agreement.
(d) REAL ESTATE REPORTING PERSON. Escrow Company is hereby 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 the Form 1099 information return and send the statement to Seller as
required under the aforementioned statute and regulation.
22. MISCELLANEOUS.
-------------
(a) AUTHORITY. Each individual and entity executing this Agreement
---------
hereby 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.
25
<PAGE>
(b) ENTIRE AGREEMENT. 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.
(c) COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument. 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 OF ESSENCE. Time is of the essence in the performance of and
---------------
compliance with each of the provisions and conditions of this Agreement. All
times provided in this Agreement for the performance of any act shall be
strictly construed.
(e) NOTICES. 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 tested by telephonic confirmation or confirmed in
writing sent by personal service or registered or certified mail, postage
prepaid, return receipt requested), or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
Purchaser: c/o Kilroy Realty Corp.
2250 East Imperial Highway
Suite 1200
El Segundo, California 90245
Attention: Mr. Jeff Hawken
Telephone: (213) 772-1193
Telecopy: (310) 322-5981
With a copy to: Latham & Watkins
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626
Attention: Bruce Tester, Esq.
Telephone: (714) 540-1235
Telecopy: (714) 755-8290
26
<PAGE>
Seller: Mission Land Company
3281 East Guasti Road, Suite 550
Ontario, California 91761-7616
Attention: Mr. Charles Johnson
Telephone: (909) 605-7737
Telecopy: (909) 605-7764
With a copy to: O'Melveny & Myers
400 South Hope Street, 11th Floor
Los Angeles, California 90071-2899
Attention: Mitchell B. Menzer, Esq.
Telephone: (213) 669-6577
Telecopy: (213) 669-6407
Escrow Company: First American Title Company
114 East Fifth Street
Santa Ana, California 92701
Attention: Ms. Rosie Frank
Telephone: ______________________
Telecopy: ______________________
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 two (2) days after being placed in the U.S. Mail,
if mailed.
(f) FURTHER ASSURANCES. The parties agree to execute such
------------------
instructions to Escrow Company and such other instruments and to do such further
acts as may be reasonably necessary to carry out the provisions of this
Agreement.
(g) NO REPRESENTATIONS. 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) SEVERABILITY. 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) CONSTRUCTION. 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
27
<PAGE>
to Sections of this Agreement, unless otherwise specifically provided. Where
the context so requires, the use of the singular shall include the plural and
vice versa.
(j) ATTORNEYS' FEES. If any action is brought by either party against
---------------
the other party for the enforcement of this Agreement or any document or
instrument delivered pursuant hereto, 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 or any
appeal thereof. For purposes of this Agreement, the term "ATTORNEYS' FEES" or
"ATTORNEYS' FEES AND COSTS" shall mean the fees and expenses of counsel to the
parties hereto, which may include expert witness fees, printing, duplicating and
other expenses, delivery 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.
(k) GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. This
----------------------------------------------------------
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, without giving effect to choice of law rules
and principles of said State. Seller and Purchaser hereby irrevocably (i)
submit to the exclusive jurisdiction of the courts of the State of California
and the federal courts of the United States of America for the Central District
of California for the purpose of any action or proceeding relating to this
Agreement; (ii) waives, to the fullest extent permitted by law, the defense of
an inconvenient forum in any action or proceeding in any such court; (iii)
agrees that a final judgment in any action or proceeding in any such court shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law; and (iv) consents to service of process
upon it by mailing a copy thereof by certified mail addressed to it and its
counsel as provided for notices hereunder.
(l) SUCCESSORS AND ASSIGNS. 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. Notwithstanding the foregoing sentence, Purchaser may assign
its rights under this Agreement to an Affiliate so long as (i) the Affiliate
assumes all of Purchaser's obligations and liabilities under this Agreement in
writing pursuant to an assumption agreement in form and substance acceptable to
Seller, (ii) the Affiliate establishes to Seller's reasonable satisfaction that
it has the financial capability to close the purchase and sale of the
Properties, and (iii) the Affiliate ratifies, for the benefit of Seller, all of
the representations, warranties and covenants of Purchaser set forth in this
Agreement.
(m) EXHIBITS. Exhibits A-L attached hereto are incorporated herein by
-------- ------------
reference.
(n) RELATIONSHIP. 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
Properties to be conveyed as contemplated hereby.
28
<PAGE>
(o) NO RECORDATION. Neither this Agreement nor any memorandum or
--------------
short form hereof shall be recorded or filed in the public land or other public
records of any jurisdiction by either party and any attempt to do so shall
constitute a breach of this Agreement.
(p) NO THIRD PARTY BENEFICIARIES. Seller and Purchaser agree that it
----------------------------
is their specific intent that no broker or other party shall be a party to or a
third party beneficiary of this Agreement or the escrow; and further that the
consent of a broker or other third party shall not be necessary to any
agreement, amendment, or document with respect to the transaction contemplated
by this Agreement.
(q) NO WAIVER. No waiver hereunder by any party of any breach
---------
hereunder shall be deemed a waiver of any other or subsequent breach.
(r) AMENDMENT. Any waiver, amendment, 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.
(s) EXPENSES. Except as expressly provided herein, each party hereto
--------
shall pay its own expenses incurred in connection with this Agreement and the
transactions contemplated hereby.
(t) AUTHORITY. Notwithstanding anything to the contrary in this
---------
Agreement, (i) Mission is entering into this Agreement only with respect to the
Brea Project, Brea Land, Garden Grove Project and Baxter Project (collectively,
the "MISSION PROPERTIES"), and (ii) Mission-Vacaville is entering into this
Agreement only with respect to the Telo Project. Purchaser acknowledges and
agrees that (x) all representations, warranties and covenants of Mission under
this Agreement are made only with respect to the status of Mission and with
respect to the Mission Properties only and Mission has no obligations,
liabilities or responsibilities other than with respect to the Mission
Properties, (y) all representations, warranties and covenants of Mission-
Vacaville under this Agreement are made only with respect to the status of
Mission-Vacaville and with respect to the Telo Project only and Mission-
Vacaville has no obligations, liabilities or responsibilities other than with
respect to the Telo Project, and (z) Mission and Mission-Vacaville are not and
will not be construed to be jointly and severally liable for any obligations
under this Agreement.
[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: MISSION LAND COMPANY,
a California corporation
By: Charles W. Johnson
-------------------------------
Its: EXECUTIVE VICE PRESIDENT
--------------------------
MISSION-VACAVILLE, L.P.,
a California limited partnership
By: Mission Land Company,
a California corporation,
General Partner
By: Charles W. Johnson
-------------------------
Its: EXECUTIVE VICE PRESIDENT
-------------------------
PURCHASER: KILROY REALTY, L.P.,
a Delaware limited partnership
By: Kilroy Realty Corporation,
a Maryland corporation,
General Partner
By: Jeff Hawkin
-----------------------------
Its: EXECUTIVE VICE PRESIDENT
------------------------
By: ______________________________
Its: ________________________
30
<PAGE>
Escrow Holder hereby accepts the foregoing escrow instructions and
agrees to follow such instructions.
ESCROW COMPANY: FIRST AMERICAN TITLE COMPANY
By: Rosie Frank
------------------------
Its:
------------------------
31
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
A-1
<PAGE>
EXHIBIT B
SCHEDULE OF LEASES
<TABLE>
<CAPTION>
UNIT TENANT LEASE DATE
- ---- ------- ----------
<S> <C> <C>
BREA PROJECT
Building #1 Data Technology Printed Circuits, May 16, 1990 as
Inc. (Winonics) amended May 6, 1996
Building #4 Suite A- Topway Global August 25, 1995
Suite B- Mission Land Company April 29, 1997
Suite C & D- Capital Products March 10, 1993 as
amended May 31,
1994 and March 28,
1996
Building #7 Suite A- Lucas Western, Inc. March 10, 1993 as
amended on May 1,
1996 and February
5, 1997
Suite B- We're Organized, Ltd. November 9, 1988,
renewed on October
31, 1991, November
1, 1992,
September 21, 1993,
October 21, 1996
Suite C- Nancy Calhoun October 19, 1992,
amended September
18, 1995
Suite D- Biomechanical Services, January 18, 1993, as
Inc. amended February
25, 1997
Suite E- John H. Kearns III, d/b/a
Fluid Dynamics and Controls January 30, 1996
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C>
Building #9 Suite A- Sonic Air February 22, 1994
Suite B- Century Repair
and Service, Inc. May 29, 1986,
renewed on (non-
dated), August 26,
1992 and October 1,
1993 and July 29,
1996
Suite C & D- Nancy Calhoun December 9, 1992,
as amended
September 18, 1995
Building #11 California Turf Products, Co. September 1, 1994
Building #12 I.A.C. Industries, Inc. November 1, 1990,
(Note: Copy only. No original) as amended May 2,
1995, March 8, 1996
Building #15 Plastic Engineered Components, Inc. June 14, 1996
GARDEN GROVE PROJECT
Building #5 T.A. Industries March 27, 1991 as
amended June 12,
1991
Building #6 Suite A- Webcraft August 19, 1993,
renewal of Lease
Agreement dated
September 8, 1986,
June 12, 1989, April
10, 1992, July 4,
1994, terminated July
31, 1997
Suite B- Kenneth Graves dba
Elite Circuit Equipment February 3, 1997
Suite C- Ren J. Tsai September 29, 1994
Suite D- E.P. Industries April 26, 1994
</TABLE>
B-2
<PAGE>
<TABLE>
<S> <C> <C>
Building #7 Suite A- Graphic Resources November 20, 1989,
as amended
September 13, 1994
Suite B- Carpet Concepts March 27, 1995
Building #13 J.C. Penney Company, Inc. March 25, 1974 as
amended July 20,
1976 and further
amended August 27,
1993
Building #42 Gem Products December 29, 1983
as amended
November 29, 1988
and renewed
November 5, 1991
and August 10, 1994
Building #43 Wyle Laboratories August 10, 1992 as
amended November
18, 1992 and
renewed on February
18, 1994, February
28, 1995, June 5,
1996, October 2,
1996, and February
21, 1997
BAXTER PROJECT Baxter Healthcare Corporation October 2, 1992
TELO
Building #23600 Electronic Ballast Technology July 1, 1994
Inc.
Building #23610 Versyss Inc./Andrew April 16, 1991
Corporation (Sublease) October 15, 1992
Versyss Inc.-Andrew-Mission-
Messenger Vacaville Consent
Agreement October 20, 1992
</TABLE>
B-3
<PAGE>
EXHIBIT C
SCHEDULE OF TRADE NAMES
PROPERTY TRADE NAME
- -------- ----------
Baxter Project None
Brea Project None
Brea Land None
Garden Grove Project None
Telo Project None
C-1
<PAGE>
EXHIBIT D
ALLOCATED PURCHASE PRICES AND ALLOCATED DEPOSITS
<TABLE>
<CAPTION>
PROPERTY ALLOCATED PURCHASE PRICE ALLOCATED DEPOSIT
- -------- ------------------------ -----------------
<S> <C> <C>
Baxter Project $ 5,375,000 $ 1,232,289.43
Brea Project $14,920,000 $ 3,420,606.17
Brea Land $ 3,300,000 $ 756,568.39
Garden Grove Project $13,523,000 $ 3,100,325.55
Telo Project $ 6,500,000 $ 1,490,210.46
----------- ------------
$43,618,000 $10,000,000.00
</TABLE>
D-1
<PAGE>
EXHIBIT E
SCHEDULE OF PTRS AND SURVEYS
PROPERTY PRELIMINARY TITLE REPORT SURVEY
- -------- ------------------------ ------
[To be provided by Seller]
E-1
<PAGE>
EXHIBIT F
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,
MISSION LAND COMPANY, a California corporation [or MISSION-VACAVILLE, L.P., a
California limited partnership] ("GRANTOR"), hereby GRANTS to KILROY REALTY,
L.P., a Delaware limited partnership, that certain real property located in the
County of ___________, 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,
F-1
<PAGE>
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.
IN WITNESS WHEREOF, Grantor has caused its duly authorized
representative to execute this instrument as of the date hereinafter written.
DATED: _________ __, 1997 GRANTOR: MISSION LAND COMPANY,
a California corporation
By: ___________________________
Its: ______________________
MISSION-VACAVILLE, L.P.,
a California limited partnership
By: Mission Land Company
a California corporation,
General Partner
By: ______________________
Its: ________________
F-2
<PAGE>
EXHIBIT G
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, the undersigned, MISSION LAND COMPANY, a California corporation
[or MISSION-VACAVILLE, L.P., a California limited partnership] ("SELLER"), does
hereby give, grant, bargain, sell, transfer, assign, convey and deliver to
KILROY REALTY, L.P., a Delaware limited partnership ("PURCHASER"), the personal
property identified on Schedule A attached hereto and incorporated herein by
----------
this reference, and all other personal property (if any) owned by Seller and
located on or in that certain real property located in the City of
______________, County of _________________, State of _____________.
1. SUCH 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,
PURCHASER 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.
2. 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
any new or confirmatory instruments and do and perform any other acts which
Purchaser may reasonably request in order to fully assign
G-1
<PAGE>
and transfer to and vest in Purchaser 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 to realize upon or
otherwise enjoy any such assets.
Dated: ________________, 1997.
SELLER: MISSION LAND COMPANY,
a California corporation
By: __________________________
Its: _________________________
MISSION-VACAVILLE, L.P.,
a California limited partnership
By: Mission Land Company,
a California corporation,
General Partner
By: __________________________
Its: ____________________
G-2
<PAGE>
EXHIBIT H
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT (this "ASSIGNMENT") is made as of __________
____, 1997, by and between MISSION LAND COMPANY, a California corporation [or
MISSION-VACAVILLE, L.P., a California limited partnership] ("ASSIGNOR"), and
KILROY REALTY, L.P., a Delaware limited partnership ("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
___________, ______________ 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 (the "CONTRACTS");
(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, approvals, certificates, permits and claims (other
than any claims against previous tenants of the Real Property, which claims
are hereby reserved by Assignor); and
(e) the trade names set forth on Exhibit C attached hereto
---------
(excluding, however the trade name Mission Land Company, Mission-Vacaville,
L.P., or any trade names related thereto).
1. 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 and costs)
arising in connection with the Contracts and relating to the period prior to the
date hereof. Assignee accepts the foregoing assignment and assumes any
obligations of Assignor in connection with the Contracts accruing from and after
________, 1997 [the Closing Date] and shall indemnify, protect, defend and hold
Assignor
H-1
<PAGE>
harmless from and against any and all claims, demands, damages, losses,
liabilities, costs and expenses (including reasonable attorneys' fees and costs)
accruing in connection with the Contracts from and after ________, 1997 [the
Closing Date].
2. 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
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 to fully realize and enjoy the rights and interests assigned
hereby.
3. 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.
4. 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.
IN WITNESS WHEREOF, Assignor and Assignee have caused their duly
authorized representatives to execute this Assignment as of the date first above
written.
ASSIGNOR: MISSION LAND COMPANY,
a California corporation,
By: _____________________________
Its: ________________________
MISSION-VACAVILLE, L.P.,
a California limited partnership
By: Mission Land Company,
a California corporation,
General Partner
H-2
<PAGE>
By: ________________________
Its: ___________________
ASSIGNEE: KILROY REALTY, L.P.,
a Delaware limited partnership
By: Kilroy Realty Corporation,
a Maryland corporation,
General Partner
By: _______________________________
Its: _________________________
By: _______________________________
Its: _________________________
H-3
<PAGE>
EXHIBIT I
ASSIGNMENT OF LEASES
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
_______________________________
_______________________________
_______________________________
_______________________________
The consideration for this Assignment is included in the consideration paid for
the Grant Deed being recorded concurrently herewith and in the documentary tax
affixed to said deed.
________________________________________________________________________________
ASSIGNMENT OF LESSOR'S INTEREST IN LEASES
THIS ASSIGNMENT OF LESSOR'S INTEREST IN LEASES (this "ASSIGNMENT") is
made on ________ ___, 1997, by MISSION LAND COMPANY, a California corporation
[or MISSION-VACAVILLE, L.P., a California limited partnership] ("ASSIGNOR"), in
favor of KILROY REALTY, L.P., a Delaware limited partnership ("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, supplements and modifications thereto and guaranties
thereof) relating to that certain real property located in the City of
____________, County of ______________, State of _______________ and more
particularly described in Exhibit A attached hereto and incorporated herein by
---------
this reference (the "REAL PROPERTY"), which leases, amendments, supplements and
modifications thereto and guaranties thereof are identified in Exhibit B
---------
attached hereto and incorporated herein by this reference (as amended and
modified, together with any such guaranties, the "LEASES"), together with (i)
any and all rights, title, estates and interests of Assignor in and to such
security deposits 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.
1. 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
any new or confirmatory instru-
I-1
<PAGE>
ments and take such further acts as Assignee may reasonably request to fully
evidence the assignment contained herein and to enable Assignee to fully realize
and enjoy the rights and interests assigned hereby.
2. 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 accruing from and after ______, 1997
[the Closing Date] 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.
3. 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 occurring on or after ______________,
1997 [the Closing Date] or the disposition of the security deposits and prepaid
rents which were credited to Assignee in connection with its acquisition of the
Real Property.
4. 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 occurring prior to ________, 1997 [the
Closing Date].
5. 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.
6. 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.
I-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: MISSION LAND COMPANY,
a California corporation,
By: _______________________________
Its: __________________________
MISSION-VACAVILLE, L.P.,
a California limited partnership
By: Mission Land Company
a California corporation,
General Partner
By: __________________________
Its: ____________________
ASSIGNEE: KILROY REALTY, L.P.,
a Delaware limited partnership
By: Kilroy Realty Corporation,
a Maryland corporation,
General Partner
By: __________________________
Its: ____________________
By: __________________________
Its: ____________________
I-3
<PAGE>
EXHIBIT J
CERTIFICATION OF NON-FOREIGN STATUS
OF
MISSION LAND COMPANY
MISSION LAND COMPANY, a California corporation [or MISSION-VACAVILLE,
L.P., a California limited partnership] ("SELLER"), is the transferor of those
certain real properties located in the County of _______________, State of
California and more particularly described in Exhibit A attached hereto (the
---------
"PROPERTIES").
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 Properties
pursuant to that certain Purchase and Sale Agreement and Joint Escrow
Instructions dated as of ________________, 1997, by and between Seller and
Kilroy Realty, L.P., a Delaware limited partnership, the undersigned hereby
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 _____________; and
3. Seller's address is 3281 East Guasti Road, Ontario, California
91761.
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, impris onment, 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: ________ ___, 1997 Signature: __________________________________
Authorized Signatory of Seller
J-1
<PAGE>
EXHIBIT K
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (this "AGREEMENT") made as of this _____ day of
_____________, 1997 by and between Mission Land Company, a California
corporation [or MISSION-VACAVILLE, L.P., a California limited partnership]
("SELLER"), and KILROY REALTY, L.P., a Delaware limited partnership
("PURCHASER"),
RECITALS
A. Purchaser purchased the Property from Seller pursuant to that
certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of
______________, 1997 (the "PURCHASE AGREEMENT");
B. Pursuant to the terms of the Purchase Agreement, Purchaser has
agreed to assume all liabilities and obligations relating and attributable to
the ownership, development, use or operation of the Property on or after the
Closing, including, without limitation, all liabilities and obligations arising
on or after the Closing Date under Contracts and work in progress on any part of
the Property for which Seller has agreed to be liable, all liabilities and
obligations under Leases, Contracts, and Permits, the performance of which may
or are to be performed on or after the Closing and all liability for any
personal injury or property damage occurring in, on or about the Property on or
after Closing relating to the Property (the "ASSUMED LIABILITIES").
C. Any initially capitalized term which is not defined in this
Agreement shall have the meaning given such term in the Purchase Agreement.
Now, Therefore, for and in consideration of the foregoing recitals and
mutual covenants, agreements, representations and warranties contained herein
and in the Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
1. Assignment and Assumption. Effective as of the date hereof, Seller
-------------------------
hereby transfers and assigns to Purchaser the Assumed Liabilities, and Purchaser
hereby accepts and assumes from Seller the Assumed Liabilities and agrees to
fully and completely pay, perform and discharge the Assumed Liabilities as and
when due.
2. Indemnity. Purchaser releases Seller from, and shall indemnify,
---------
defend and hold harmless Seller from and against, all losses arising from or in
any way connected with the Assumed Liabilities.
K-1
<PAGE>
3. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the successors and assigns of the parties hereto.
Governing Law. This Agreement shall be governed by and construed according
-------------
to the laws of the State of California, without regard to conflicts of laws
rules.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ASSIGNEE: KILROY REALTY, L.P.,
a Delaware limited partnership
By: Kilroy Realty Corporation,
a Maryland corporation,
General Partner
By: ____________________________________
Its: ______________________________
By: ____________________________________
Its: ______________________________
K-2
<PAGE>
EXHIBIT L-1
FORM OF TENANT ESTOPPEL CERTIFICATE
To: [Purchaser]
________________________
________________________
________________________
Re: [Property Address]
------------------
_______________________ ("Tenant") certifies as follows:
1. The undersigned is the Tenant under that certain lease dated
__________, 19___ (the "LEASE"), executed by __________________________________
("LANDLORD") as Landlord and the undersigned as Tenant, covering a portion of
the property (the "PREMISES") located at ________________________ (the
"PROPERTY").
2. Tenant has paid to Landlord a security deposit of $__________.
The term of the Lease commenced on __________, 19___ and the expiration date of
the Lease is __________, 19___. Tenant has paid rent through April 30, 1997.
The next rental payment in the amount of $__________ is due on __________,
19___. Tenant has not paid any rentals in advance of the current month.
3. The Lease provides for an option to extend the term of the Lease
for _____ years, at a rental rate for such extension term as set forth in the
Lease. Tenant does not have any right or option to renew or extend the term of
the Lease, to lease other space at the Property, to terminate or cancel the
Lease, rights of first offer or first refusal, nor any preferential right to
purchase all or any part of the Premises or the Property, except as follows:
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________.
4. Complete copies of the Lease and all amendments, modifications
and supplements thereto are attached hereto and the Lease, as so amended,
modified and supplemented, is in full force and effect, and represents the
entire agreement between Tenant and Landlord with respect to the Premises and
the Property. There are no amendments, modifications or supplements to the
Lease, whether oral or written, except as attached hereto.
L-1-1
<PAGE>
5. All space and improvements leased by Tenant have been completed
and furnished in accordance with the provisions of the Lease, and Tenant has
accepted and taken possession of the Premises.
6. Landlord is not in any material respect in default in the
performance of the terms and provisions of the Lease. Tenant has not given
Landlord written notice of any dispute between Landlord and Tenant. Tenant has
not assigned, transferred or hypothecated the Lease or any interest therein or
subleased all or any portion of the Premises.
7. Tenant does not claim any offsets or credits against rentals
payable under the Lease and no free rent periods or rental concessions have been
granted to Tenant, except as follows:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
8. The undersigned individual is authorized to deliver this Estoppel
Certificate on behalf of Tenant.
This Certificate is given to [Purchaser] with the understanding that
[Purchaser] and its successors and assigns and Purchaser's lender financing all
or a portion of the Property may rely hereon in connection with the conveyance
of the Property of which the Premises constitute a part. Following any such
conveyance, Tenant agrees that the Lease shall remain in full force and effect
and shall bind and inure to the benefit of [Purchaser] and its successors and
assigns as if no purchase had occurred.
DATED: _______________, 1997. "TENANT"
______________________________
______________________________
L-1-2
<PAGE>
EXHIBIT L-2
FORM OF SELLER CERTIFICATE
To: [Purchaser]
________________________
________________________
________________________
Re: [Property Address]
------------------
Mission Land Company ("Seller") certifies as follows:
1. _______________ is the tenant ("Tenant") under that certain lease
dated __________, 19___ (the "LEASE"), executed by ____________________________
("LANDLORD") as Landlord and Tenant, covering a portion of the property (the
"PREMISES") located at ________________________ (the "PROPERTY").
2. Tenant has paid to Seller a security deposit of $__________. The
term of the Lease commenced on __________, 19___ and the expiration date of the
Lease is __________, 19___. Tenant has paid rent through __________, 19___.
The next rental payment in the amount of $__________ is due on __________,
19___. Tenant has not paid any rentals in advance of the current month.
3. The Lease provides for an option to extend the term of the Lease
for _____ years, at a rental rate for such extension term as set forth in the
Lease. Except as expressly provided in the Lease and all amendments,
modifications and supplements attached hereto, Tenant does not have any right or
option to renew or extend the term of the Lease, to lease other space at the
Property, to terminate or cancel the Lease, rights of first offer or first
refusal, nor any preferential right to purchase all or any part of the Premises
or the Property.
4. Complete copies of the Lease and all amendments, modifications
and supplements thereto are attached hereto and the Lease, as so amended,
modified and supplemented, is in full force and effect, and represents the
entire agreement between Tenant and Landlord with respect to the Premises and
the Property. There are no amendments, modifications or supplements to the
Lease, whether oral or written, except as attached hereto.
5. All space and improvements leased by Tenant have been completed
and furnished in accordance with the provisions of the Lease, and Tenant has
accepted and taken possession of the Premises.
L-2-1
<PAGE>
6. Landlord is not in any material respect in default in the
performance of the terms and provisions of the Lease. To Seller's Actual
Knowledge, Tenant has not given Landlord written notice of any dispute between
Landlord and Tenant. To Seller's Actual Knowledge, Tenant has not assigned,
transferred or hypothecated the Lease or any interest therein or subleased all
or any portion of the Premises.
7. No free rent periods or rental concessions have been granted to
Tenant by Seller and, to Seller's Actual Knowledge, there are no offsets or
credits against rentals payable under the Lease, except as follows:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________.
This Certificate is given to [Purchaser] with the understanding that
[Purchaser] and its successors and assigns will rely hereon in connection with
the conveyance of the Property of which the Premises constitute a part.
DATED: _______________, 1997. "SELLER"
______________________________
______________________________
L-2-1
<PAGE>
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of April 30, 1997 (the "Effective
Date") by and between CAMARILLO PARTNERS, a California general partnership
("Seller"), and KILROY REALTY L.P., a Delaware limited partnership ("Buyer").
Buyer and Seller agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms will
-----------
have the meanings indicated below, or are defined where indicated below:
"awareness of Seller" and words of similar effect are defined in Subsection
13.4.
"Assignment and Assumption" is defined in Subsection 7.1.
"Bill of Sale" is defined in Subsection 7.1.
"Broker" shall mean Jones Lang Wootten USA.
"Closing" and "Close of Escrow": Closing and Close of Escrow are terms used
interchangeably in this Agreement. The Closing or the Close of Escrow will be
deemed to have occurred when the Deed is recorded in the official records of the
county in which the Property is located, and the Purchase Price is paid to
Seller.
"Closing Date" shall mean the date on which the Closing actually occurs.
"Contingency Date" shall mean the last day of the Due Diligence Period.
Unless otherwise agreed in writing by the parties, the Contingency Date shall be
the earlier to occur of (i) May 12, 1997, or (ii) the Scheduled Closing Date
designated in any notice sent by Buyer to Seller in accordance with Section 2.
"Deed" is defined in Subsection 7.1.
"Deposit": The Deposit will be $500,000.00, and will be placed into escrow
on the Opening of Escrow as defined in Section 4.
"Due Diligence Period" shall mean the period of time starting on and
including the Effective Date and continuing
<PAGE>
through and including the earlier to occur of (i) May 12, 1997, or (ii) the
Scheduled Closing Date designated in any notice sent by Buyer to Seller in
accordance with Section 2.
"Effective Date" is defined in the first paragraph of this Agreement.
"Environmental Audit" is defined in Section 19.
"Environmental Law" is defined in Section 19.
"Escrow" is defined in Section 4.
"Escrow Holder" shall mean Title Company.
"Excluded Additional Items" is defined in Subsection 23.2.
"FIRPTA Certificate" is defined in Subsection 7.1.
"Hazardous Substance" is defined in Section 19.
"Improvements" shall mean all of Seller's right, title and interest in and
to all improvements and fixtures situated on the Land.
"Intangibles" shall mean any and all of Seller's right, title and interest
in and to all assignable existing warranties and guaranties, express or implied,
issued to Seller in connection with the Improvements or the Personal Property,
and all assignable existing permits, licenses, approvals and authorizations
issued by any governmental authority in connection with the Property.
"Known to Seller" shall mean within Seller's awareness, as defined in
Subsection 13.4.
"Land" shall mean that certain land located in the County of Ventura, State
of California, more particularly described in Exhibit A attached hereto.
---------
"M/R Systems" shall mean M/R Systems Corporation.
"M/R Systems Lease" shall mean that certain Standard Industrial Lease-
Special Net dated as of April 15, 1991, by and between Seller and M/R Systems.
"M/R Systems Lease Documents" shall mean the M/R Systems Lease and the
documents identified in Exhibit B.
--------
-2-
<PAGE>
"Newly Discovered Condition" is defined in Subsection 12.3.
"Objections" is defined in Subsection 6.6.
"Opening of Escrow" is defined in Section 4.
"Personal Property" shall mean (i) all tangible personal property owned by
Seller and located at the Real Property, including without limitation
appliances, furniture, fixtures, equipment, carpeting, draperies, tools and
supplies, and (ii) the Intangibles. Buyer acknowledges that there may be little
or no such Personal Property.
"Property" shall mean, collectively, (i) the Real Property, (ii) the
Improvements, (iii) Seller's interest in the M/R Systems Lease Documents, and
(iv) the Personal Property.
"PTR" is defined in Subsection 6.3.
"Purchase Price" is defined in Section 3.
"Real Property" shall mean the Land and the Improvements, together with all
rights appurtenant thereto.
"Scheduled Closing Date" shall mean the date on which the Closing is
scheduled to occur. As of the Effective Date, the Scheduled Closing Date is May
22, 1997. See Section 2.
"Seller Parties" shall mean each and all of Seller, Weingart Foundation,
D/L Camarillo Partners, The Deutsch Company, Stephen Lebowitz, and each of their
employees, officers, directors, trustees, representatives, agents, servants,
attorneys, affiliates, parent companies, subsidiaries, successors and assigns,
and all persons, firms, corporations and organizations acting or providing
information on their behalf and their successors and assigns.
"Tenant Notice" is defined in Section 7.
"Termination Provisions" shall mean the provisions of Section 17.
"Title Company" shall mean Chicago Title Insurance Company or such other
title company as may be reasonably designated by Seller. Seller's designation
of any of Lawyers Title Insurance Company, First American Title Insurance
Company, or Stewart Title Guaranty Company shall be reasonable. Seller will not
designate any other title company without Buyer's consent, which consent shall
not be unreasonably withheld.
-3-
<PAGE>
"Title Policy" is defined in Section 12.
2. Purchase and Sale: Scheduled Closing Date. Upon and subject to the terms
-----------------------------------------
and conditions set forth in this Agreement, Seller agrees to sell the Property
to Buyer and Buyer agrees to buy the Property from Seller, and in consideration
thereof Buyer will pay to Seller the Purchase Price at the Closing, subject to
prorations as provided herein. Subject to the express provisions of this
Agreement pertaining to extensions of the time for Closing, the Closing shall
occur on the earlier of (i) the 10th day after the Contingency Date, or (ii) the
Scheduled Closing Date designated by Buyer on not less than seven day's prior
written notice to Seller.
3. Purchase Price. The Purchase Price for the Property shall be
---------------
$24,000,000.00.
4. Escrow; Deposit.
---------------
4.1 Opening of Escrow. Within two business days after the execution and
-----------------
delivery of this Agreement, Buyer and Seller will open an escrow (the "Escrow")
for the transaction contemplated herein with the Escrow Holder by delivering to
Escrow Holder a fully executed copy of this Agreement. Such delivery by either
party shall constitute the "Opening of Escrow". Contemporaneously with execution
and delivery of this Agreement, Buyer and Seller shall execute and deliver
instructions to Escrow Holder in the form attached hereto as Exhibit C.
---------
4.2 Deposit. Immediately upon the Opening of Escrow, Buyer will deliver
-------
the Deposit to Escrow Holder for deposit into Escrow. Escrow Holder is hereby
instructed to invest the Deposit in an interest-bearing account. Interest on
the Deposit will accrue for the account of Buyer except as otherwise provided in
this Agreement. If the Deposit or any portion thereof is not delivered to
Escrow Holder or to Seller as and when required hereunder, then Seller shall
have the right to terminate this transaction by giving written notice of such
termination to Buyer and Escrow Holder.
4.3 Provisions Regarding Escrow Holder. Escrow Holder shall hold and
----------------------------------
dispose of the Deposit and any interest earned thereon in accordance with the
terms of this Agreement. Escrow Holder shall incur no liability in connection
with the safekeeping or disposition of the Deposit for any reason other than
Escrow Holder's failure to follow instructions pertaining thereto which Escrow
Holder has accepted, or Escrow Holder's willful misconduct or gross negligence.
If Escrow Holder is in doubt as to its duties or obligations with regard to the
Deposit, or if
-4-
<PAGE>
Escrow Holder receives conflicting instructions from Buyer and Seller with
respect to the Deposit, Escrow Holder shall not be required to disburse the
Deposit or any interest earned thereon and may, at its option, continue to hold
such funds until both Buyer and Seller execute and deliver instructions
satisfactory to Escrow Holder as to it's disposition, or until a final judgement
is entered by a court of competent jurisdiction directing its disposition, or
Escrow Holder may interplead such funds in accordance with applicable law.
Escrow Holder shall not be responsible for any interest on the Deposit except as
is actually earned, or for the loss of interest resulting from the withdrawal of
the Deposit prior to the date interest is posted thereon.
5. Excluded Items. Notwithstanding anything to the contrary herein or in the
--------------
instruments delivered pursuant hereto, Seller shall not sell or transfer to
Buyer and Buyer shall not acquire any contractual rights which Seller has under
the agreements (other than the M/R Systems Lease Documents) pursuant to which
Seller acquired the Property.
6. Due Diligence Period.
--------------------
6.1 Right to Investigate. During the Due Diligence Period, Buyer shall
--------------------
have the right (and is hereby encouraged) to conduct any inquiry and
investigation pertaining to the Property, subject to the rights of tenants and
parties in possession and subject to the provisions of this Agreement.
6.2 Physical Access. Subject to the rights of tenants and other parties
---------------
in possession, and subject to the provisions of this Agreement, on reasonable
notice and at reasonable times during the Due Diligence Period, Seller will
allow Buyer and/or its agents access to the Property to perform any and all
investigations and inspections desired by Buyer (provided that any entry will
be subject to the provisions of Section 22, and any Environmental Audit will be
subject to the provisions of Section 19).
6.3 Preliminary Title Report. Buyer hereby acknowledges receipt of a
------------------------
preliminary title report pertaining to the Real Property issued by Title Company
as of September 23, 1996 (the "PTR") accompanied by all documents referred to in
such report.
6.4 Other Documents and Materials.
-----------------------------
A. Inspection of Files. Upon reasonable request during the Due
-------------------
Diligence Period, Seller will make its files, books, and records pertaining to
the Property reasonably available for inspection and copying by Buyer in Los
Angeles
-5-
<PAGE>
and/or Santa Monica (at the election of Seller), to the extent that the same are
Known to Seller to be in the possession of any of the Seller Parties, except:
(i) appraisals or valuation information, (ii) internal memoranda,
communications, analyses, and business plans, (iii) correspondence and other
materials to or from legal counsel for Seller or any of the Seller Parties, (iv)
correspondence and other materials pertaining to potential other buyers, and (v)
other information which is privileged, confidential, or proprietary.
B. Lease Documents. Buyer acknowledges receipt of copies of the M/R
---------------
Systems Lease Documents.
C. Estoppel Certificate. Seller promptly will request from M/R
--------------------
Systems an estoppel certificate in the form attached hereto as Exhibit D.
----------
Notwithstanding the foregoing, there shall be no obligation to threaten or
declare a default under the M/R Systems Lease if such M/R Systems fails to
deliver such an estoppel certificate.
6.5 Commercial Property Owner's Guide to Earthquake Safety. Buyer
------------------------------------------------------
hereby acknowledges receipt of a copy of the Commercial Property Owner's Guide
to Earthquake Safety.
6.6 Objections; Supplemental Agreement. If on or before the Contingency
----------------------------------
Date, any condition or other matter affecting the Property or the suitability of
the Property for Buyer's purposes is unsatisfactory to Buyer for any reason or
for no reason (such conditions or matters may be referred to herein as
"Objections"), then Buyer may inform Seller of any such Objections; and Seller
and Buyer may, but shall have no obligation to, arrange to resolve such
Objections on or before the Contingency Date through a written supplemental
agreement duly executed and delivered by Buyer and Seller. If Buyer does not
terminate this transaction in accordance with the following Subsection, Buyer
shall be deemed conclusively to have waived any and all Objections for which
resolution is not arranged expressly in such a written supplemental agreement.
6.7 Buyer's Option to Terminate. Buyer shall have the option to terminate
---------------------------
this transaction for any reason or for no reason in Buyer's sole discretion,
which option may be exercised only by delivering written notice to Seller on or
before the Contingency Date, which notice expressly sets forth Buyer's exercise
of its option to terminate this transaction. If Buyer so exercises its option
to terminate this transaction in accordance with the preceding sentence, then
Seller and Buyer shall each instruct Escrow Holder to return the Deposit and all
interest earned thereon to Buyer, less Buyer's share of any
-6-
<PAGE>
escrow cancellation charges as provided below (which obligation to so instruct
Escrow Holder shall survive termination of this Agreement), and the Termination
Provisions shall apply.
6.8 Waiver of Objections. Buyer's failure to terminate this transaction
--------------------
in accordance with the foregoing Subsection shall constitute an irrevocable
election to proceed with the purchase of the Property (subject only to the
rights of the parties to subsequently terminate this transaction as expressly
provided in this Agreement), and upon the close of business on the Contingency
Date, except only as otherwise provided in this Agreement, the Deposit shall
become nonrefundable and all Objections other than those that Seller and Buyer
have mutually agreed in writing to resolve, if any, shall be deemed waived.
7. Deliveries to Escrow Holder.
---------------------------
7.1 Deliveries by Seller. The Closing shall be consummated through the
---------------------
Escrow and shall be administered by Escrow Holder in accordance with the terms
of this Agreement. On or before the day prior to the Scheduled Closing Date,
Seller will deliver or cause to be delivered to Escrow Holder the following
items:
A. A Grant Deed (the "Deed"), in the form attached to this Agreement
as Exhibit E, duly executed and acknowledged by Seller.
---------
B. A Transferor's Certificate of Non-Foreign Status in the form
attached to this Agreement as Exhibit F ("FIRPTA Certificate"), duly executed by
---------
Seller.
C. A duly executed California Form 590, duly executed by Seller.
D. A bill of sale in the form attached to this Agreement as Exhibit
-------
G (the "Bill of Sale"), duly executed by Seller.
- -
E. Two counterpart originals of an Assignment and Assumption of M/R
Systems Lease Documents in the form attached to this Agreement as Exhibit H (the
---------
"Assignment and Assumption"), duly executed by Seller.
F. Originals of the M/R Systems Lease Documents (or copies if
originals are not available).
G. An Assignment of Guaranty and Deed of Trust in the form attached
hereto as Exhibit I, duly executed by Seller.
---------
-7-
<PAGE>
H. A Tenant Notice in the form of Exhibit J (the "Tenant Notice"),
---------
duly executed by Seller.
I. A closing statement in form mutually satisfactory to Seller and
Buyer, duly executed by Seller, reflecting debits and credits to the accounts of
Seller and Buyer in accordance with this Agreement.
7.2 Deliveries by Buyer. On or before 1:00 pm local time on the day prior
-------------------
to the Scheduled Closing Date, Buyer will deliver or cause to be delivered to
Escrow Holder the following items:
A. Funds in an amount equal to the sum of the following:
(i) The balance of the Purchase Price (that is, the Purchase
Price less any portion of the Deposit and any interest thereon that is then held
by Escrow Holder); and
(ii) Any additional amounts required to fund Buyer's
obligations hereunder; and
(iii) Plus any additional amount due from Buyer to Seller, or
less any additional amount due from Seller to Buyer, as the case may be, if any,
as a result of the prorations and cost allocations provided for herein.
B. Two counterpart originals of the Assignment and Assumption, duly
executed by Buyer.
C. The Tenant Notice, duly executed by Buyer.
D. A closing statement in form mutually satisfactory to Seller and
Buyer, duly executed by Buyer, reflecting debits and credits to the accounts of
Seller and Buyer in accordance with this Agreement.
7.3 Additional Deliveries by Buyer and Seller. Buyer and Seller each
-----------------------------------------
shall deliver to Escrow Holder such resolutions, certificates of good standing
and/or other entity documents as Escrow Holder may reasonably require.
8. Conditions to the Close of Escrow. The following are conditions precedent
---------------------------------
to the Closing:
8.1 Seller's Deliveries. Seller shall have performed its covenants under
-------------------
Subsections 7.1 and 7.3, and shall not have
-8-
<PAGE>
breached its covenants under Section 14. This is a condition in favor of Buyer.
8.2 Buyer's Deliveries. Buyer shall have performed its covenants under
------------------
Subsections 7.2 and 7.3. This is a condition in favor of Seller.
8.3 Representations Remain True. The representations of each party
---------------------------
contained in this Agreement shall remain true and correct in all material
respects as of the Closing. This is a condition in favor of Buyer if the
representation is made by Seller, and in favor of Seller if the representation
is made by Buyer.
8.4 Title Insurance. As of the Close of Escrow, the Title Company will
---------------
be prepared and committed to issue the Title Policy to Buyer. This is a
condition in favor of each of Buyer. Seller shall not be deemed in breach of any
covenant hereunder by reason of the Title Company's not being so prepared and
committed.
Subsections 8.1 through 8.4 are conditions only and are not covenants, provided
however that this sentence shall not prevent any such condition from being a
covenant if separately stated as a covenant elsewhere in this Agreement.
The conditions set forth in Subsections 8.1 through 8.4 are solely for the
benefit of the party or parties indicated. Where such conditions are for one
party, they may be asserted or waived only by that party. Where such conditions
are for both parties, they may be asserted by either party but may only be
waived by both parties. If any conditions are not satisfied on or before the
Closing, then the party in favor of whom such condition exists may (i) waive
such condition and proceed to close this transaction, (ii) suspend performance
for so long as is reasonably necessary to obtain satisfaction of the condition,
but in any event not more than 30 days, or (iii) terminate this transaction.
Any such election shall be executed by written notice of the same delivered to
the other party and to Escrow Holder, and an election under the second part of
the preceding sentence shall not preclude a subsequent election under the first
or third part of such sentence. If the transaction is so terminated, then the
Termination Provisions shall apply.
9. Closing; Disbursements and Other Actions by Escrow Holder. At the Close of
---------------------------------------------------------
Escrow, Escrow Holder will promptly undertake all of the following:
9.1 Funds. Disburse all funds deposited with Escrow Holder as follows:
-----
-9-
<PAGE>
A. Deliver to Seller the Purchase Price, after deducting therefrom
(i) the amount of all items, costs and prorations chargeable to the account of
Seller, and (ii) the amount of the Deposit to the extent that the same
previously shall have been disbursed to Seller. All disbursements hereunder to
or for the benefit of Seller shall be made 50 percent to Weingart Foundation and
50 percent to D/L Camarillo Partners, in each case in accordance with written
instructions to be provided by the applicable recipient.
B. Disburse the remaining balance, if any, of the funds deposited by
Buyer to Buyer, less amounts chargeable to Buyer.
9.2 Recording. Cause the Deed (with documentary transfer tax information
---------
to be affixed after recording) to be recorded in the county where the Real
-----
Property is located, and cause the Assignment of Guaranty and Deed of Trust to
be recorded in the county where the encumbered property is located, and obtain
conformed copies thereof for distribution to Buyer and Seller.
9.3 Title Policy. Direct the Title Company to issue the Title Policy to
------------
Buyer.
9.4 Delivery of Documents.
---------------------
A. Deliver to Buyer (i) the following documents and instruments
executed by Seller: FIRPTA Certificate, the California Form 590, the Bill of
Sale, the Assignment and Assumption, and the closing statement, and (ii) The M/R
Systems Lease Documents, any other documents (or copies thereof) deposited into
Escrow by Seller.
B. Deliver to Seller (i) the following documents and instruments
executed by Buyer: the Assignment and Assumption and the closing statement, and
(ii) any other documents (or copies thereof) deposited into Escrow by Buyer.
C. Mail the Tenant Notice to the addressee thereof by certified
mail, return receipt requested.
9.5 Escrow Holder as Reporting Person. Seller and Buyer hereby
--------------------------------
designate Escrow Holder as the "Reporting Person" for the transaction pursuant
to Section 6045(e) of the Internal Revenue Code.
10. Costs and Expenses. Seller will pay: (a) the premium for the Title Policy;
------------------
(b) one-half of all escrow fees and costs,
-10-
<PAGE>
including recording costs; (c) all city and county documentary transfer taxes;
(d) one-half (but not to exceed $2,500) of the costs of a survey or survey
update of the Real Property obtained by Buyer; (e) the compensation owing by
Seller to Broker in accordance with Section 21 hereof; and (f) prorations duly
allocated to Seller.
Buyer will pay: (a) one-half of the costs of a survey or survey update
of the Real Property obtained by Buyer, and any excess of such costs over the
amount that Seller is obligated to pay; (b) one-half of all escrow fees and
costs, including recording costs; (c) additional title insurance premiums and
costs as described in Subsection 12.2 hereof; and (e) prorations duly allocated
to Buyer.
Each of Buyer and Seller will pay the fees and expenses of its own
legal counsel and other consultants and professionals. Such persons are not
third-party beneficiaries of this Agreement.
11. Prorations.
-----------
11.1 Rent Under M/R Systems Lease. The rents referred to in this
----------------------------
Subsection are the rents under the M/R Systems Lease. All rents for the month
in which the Closing occurs which are actually received by Seller as of the
Closing will be prorated. Delinquent rents and rents not paid by Close of
Escrow will not be prorated, and Seller shall have the right to continue to
collect such rents, provided that Seller shall not have the right to bring or
prosecute an action for unlawful detainer in connection with the same after the
Closing. Rents allocable to the period prior to Closing will be the property of
Seller, and rents allocable to the period after Closing will be the property of
Buyer. All rents collected by either party after Closing will be applied first
to current rent then due (that is, rent for the month in which the collection
occurs), then to past due rents (if any), and then to rent for months after the
month in which collection occurs. Each party that receives any rents owned by
the other party shall promptly pay the same to the other party. Prorations
under this Subsection will be made as of the date of Closing based on the actual
number of days of the applicable month.
11.2 No Other Prorations. Except for rents under the M/R Systems Lease,
-------------------
there shall be no other prorations. Without limitation, there shall be no
prorations for real estate taxes and assessments, utilities, insurance, or other
operating expenses.
-11-
<PAGE>
12. Title Insurance and Newly Discovered Conditions.
-----------------------------------------------
12.1 Title Policy. At the Close of Escrow, the Title Company will issue to
------------
Buyer Title Company's then-current form of ALTA standard coverage owner's policy
(the "Title Policy"), with coverage in an amount equal to the Purchase Price.
Such Title Policy shall satisfy any written criteria therefor agreed to in
writing between Buyer and Seller during the Due Diligence Period, but may also
contain exceptions for conditions accepted or permitted pursuant to Subsection
12.3.
If no such criteria shall have been so agreed to in writing during the Due
Diligence Period, then the Title Policy shall show title to the Property vested
in Buyer subject only to (i) the printed exclusions, (ii) the exceptions which
were disclosed in the PTR and any supplements thereto that shall have been
delivered to Buyer prior to or during the Due Diligence Period, and that Seller
does not prior to the Contingency Date agree in writing to remedy, (iii) matters
that are reasonably apparent from physical inspection of the Property or
otherwise known to Buyer, (iv) exceptions for other conditions accepted or
permitted pursuant to Subsection 12.3 hereof, and (v) an exception for matters
that would be disclosed by a survey.
12.2 Additional Coverage. If Buyer elects to obtain any other form of
-------------------
title insurance policy or any title insurance endorsements, then Buyer at its
sole cost and expense shall pay any additional premiums and costs, including the
cost of any survey required by the Title Company. Buyer's inability to obtain
any such other form of policy or endorsements at the scheduled time and date of
Closing shall not (i) delay the Closing or (ii) constitute a failure of any
condition to Closing.
12.3 Newly Discovered Conditions. If, subsequent to the Contingency Date
---------------------------
and prior to Closing, a condition of title or an exception to title insurance
coverage is discovered by Buyer or disclosed to Buyer by Title Company that
materially adversely affects the value or use of the Property, and such
condition or exception then shall not have been previously referenced in the PTR
or any supplement thereto that shall have been delivered to Buyer prior to or
during the Due Diligence Period, reasonably apparent from physical inspection of
the Property, or otherwise known to Buyer (a "Newly Discovered Condition"), then
Buyer either shall deliver to Seller written notice of Buyer's objection to such
Newly Discovered Condition within ten days from Buyer's first receipt of notice
of such Newly Discovered Condition (and delivery of a supplement or
-12-
<PAGE>
amendment to the PTR to Buyer shall constitute notice of any Newly Discovered
Conditions disclosed therein), or if such notice of objection is not so
delivered within such time then Buyer shall be deemed to have accepted such
Newly Discovered Condition.
If Buyer so delivers such notice of objection within such time, then
within ten days after receipt of such notice of objection, Seller either shall
deliver notice to Buyer electing to cure such Newly Discovered Condition on or
before the Closing (and, without limitation, provision of title insurance
coverage for such Newly Discovered Condition shall constitute such a cure), or
if Seller does not so deliver such notice of election to cure within such time,
then as of the tenth day following Seller's receipt of Buyer's timely delivered
notice of objection Seller shall be deemed to have declined to cure such Newly
Discovered Condition. Seller shall have no liability for or as a consequence of
any Newly Discovered Condition or failure to cure any such condition.
Buyer's sole and exclusive remedy on account of any Newly Discovered
Condition shall be to deliver written notice of objection within the first ten-
day period referenced above in this Subsection, and if Seller shall decline or
fail to cure such Newly Discovered Condition as to which Buyer shall have so
timely delivered notice of objection, then Buyer shall have the option to
terminate this transaction and receive a refund of the Deposit (less Buyer's
share of escrow cancellation charges) which option shall be exercised, if at
all, only by delivery of written notice to Seller of Buyer's election so to
terminate within ten days after Seller has declined or has been deemed to have
declined to cure such condition, or if Seller shall have elected to cure and
failed to be prepared to cure at Closing, then Buyer's termination election
notice shall be delivered before the Closing actually occurs. Buyer shall have
no right or remedy for any Newly Discovered Condition as to which Buyer does not
timely deliver notice of objection or on account of which Buyer does not timely
deliver a termination notice as provided in this Subsection. At the election of
either Buyer or Seller, the Closing may be extended until the expiration of any
of the ten-day periods referenced in this Subsection. Notwithstanding the
foregoing, no objections or elections to terminate or extend shall be effective
after the Closing actually occurs.
If this transaction shall be terminated in accordance with this
Subsection, then the Termination Provisions shall apply.
12.4 Reliance on Title Policy. Buyer shall rely on the Title Policy (and
------------------------
shall have no right or recourse against Seller)
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<PAGE>
for any rights, assurances or protection pertaining to the condition of title to
the Property.
13. Representations.
---------------
13.1 Representations of Both Parties. Each of the parties represents to
-------------------------------
the other party as follows:
A. Authority. The representing party is duly organized and validly
---------
existing under the laws of the state of formation, and it has the legal power,
right and authority to enter into this Agreement and the documents and
instruments referenced herein, and to consummate this transaction.
B. Due Authorization. The execution and delivery of this Agreement
-----------------
and the documents and instruments referenced herein have been duly authorized by
the representing party, and in connection with such due authorization all
requisite action (corporate, trust, partnership or otherwise) has been taken,
and no further consent of any partner, shareholder, creditor, investor, judicial
or administrative body, governmental authority or other party is required.
C. Due Execution. The individuals executing this Agreement and the
-------------
documents and instruments referenced herein on behalf of the representing party
and its constituents have the legal power, right, and actual authority to bind
such party and constituents, as applicable, to the terms and conditions of this
Agreement and such documents and instruments.
D. Valid and Binding. This Agreement and the documents and
-----------------
instruments required to be executed and delivered by the representing party
hereunder are and will be valid, legally binding obligations of and enforceable
against the representing party in accordance with their terms, subject only to
applicable bankruptcy, insolvency, reorganization, moratorium laws and other
laws and equitable principles affecting or limiting the rights of contracting
parties generally.
13.2 Representations of Seller. As of the Effective Date, Seller hereby
-------------------------
represents to Buyer as follows:
A. Tenant Leases.
-------------
(i) Rent under the M/R Systems Lease is paid through April 30,
1997, and there is no other advance payment of rent or any security deposit
under the M/R Systems Lease.
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<PAGE>
(ii) The M/R Systems Lease Documents have not been modified or
amended, except as disclosed in Exhibit B.
---------
(iii) The ledger of 1995 and 1996 rental receipts under the M/R
Systems Lease attached hereto as Exhibit K is true, complete and accurate in all
material respects.
(iv) (a) except for the M/R Systems Lease and subleases,
assignments, and tenancies by, through or under the M/R Systems Lease, Seller is
not aware of any existing leases creating tenancies or rights of occupancy now
or hereafter to come into existence relating to any portion of the Property, (b)
Seller is not aware of any defense or (except as expressly provided in the M/R
Systems Lease) right to off-set of M/R Systems against its obligations under the
M/R Systems Lease, (c) Seller is not aware of having received any currently
effective written notice of any unremedied default or breach on the part of the
landlord under the M/R Systems Lease, and Seller has not issued any currently
effective written notice of any unremedied default or breach on the part of the
tenant under said lease.
B. Claims on Insurance. Seller is not aware of any outstanding
-------------------
claims under the insurance policies which relate to the Property.
C. Violations. Seller is not aware of having received any
----------
unremedied written notice of any violation of any federal, state or local laws,
ordinances, rules or regulations bearing on the construction, operation,
ownership, occupancy or use of the Property, including but not limited to, those
relating to zoning, land division, building, fire, health and safety, seismic
safety and handicap rights and access (including those under the ADA or any
similar law).
D. Pending Actions. Seller is not aware of any action, suit,
---------------
arbitration, unsatisfied order or judgment, government investigation or
proceeding pending or threatened against Seller which, if adversely determined,
could individually or in the aggregate materially interfere with the
consummation of the transaction contemplated by this Agreement. Seller is not
aware of any litigation which has been filed against Seller that arises out of
the ownership of the Property and would materially affect the Property or use
thereof, or Seller's ability to perform hereunder.
E. Lease Brokerage. Seller is not aware of any agreements with
---------------
brokers providing for the payment from and after the Closing by Seller or
Seller's successor-in-interest of
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<PAGE>
leasing commissions or fees for procuring tenants with respect to the Property.
F. Condemnation. Seller has received no written notice of any
------------
currently pending or now threatened condemnation proceedings relating to the
Property.
G. Physical Condition. Seller is not aware of any defect in the
------------------
structural elements of the Improvements or the mechanical systems of the
Improvements, including, without limitation, HVAC, plumbing, electrical,
security, utility and sprinkler systems, if any.
H. Rezoning. Seller is not aware of any pending or threatened
--------
proceeding for the rezoning of the Real Property or any portion thereof.
All of the foregoing representations are qualified by Subsection 19.3 pertaining
to environmental conditions.
13.3 Representations of Buyer. Buyer represents to Seller that Buyer is
------------------------
not domiciled outside of the United States and is not controlled by persons or
entities so domiciled. Buyer acknowledges that Section 64 of the M/R Systems
Lease imposes limitations on the transfer of Seller's interest in the Real
Property to persons and entities domiciled outside the United States or
controlled by persons or entities so domiciled.
13.4 Awareness of Seller; Known to Seller. Where this agreement refers to
------------------------------------
the awareness of Seller (including in the foregoing provisions stating that
"Seller is not aware ..."), the same or words of similar effect shall mean and
shall be limited to the actual conscious awareness of Larry Wolfe, Steven D.
Lebowitz, and William E. Holler. Where this Agreement refers to the awareness
of Seller (or words of similar effect) or to matters "Known to Seller," neither
Seller nor any of the persons identified above shall have any duty to inquire or
investigate. Without limitation, there shall be no duty to review materials or
information in Seller's files or in the files of said persons, and the existence
of materials or information in such files will not constitute awareness of
Seller and will not be Known to Seller unless one of such persons has actual
conscious awareness of the same. Seller represents that the persons named above
are the persons within the respective constituent organizations of Seller having
principal responsibility for the Property.
13.5 Acknowledgment by Buyer. Buyer acknowledges that (i) pursuant to the
-----------------------
M/R Systems Lease, the tenant is largely responsible for the ongoing operation
and maintenance of the
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<PAGE>
Property; (ii) Seller has very little involvement in matters pertaining to the
Property other than Seller's periodic receipt of rent under the M/R Systems
Lease; (iii) Seller accordingly has little or no information about the subject
matter of the representations that are made above, including the representations
that are qualified by word such as "Seller is not aware ..."; (iv) Where any
representation is qualified by words relating to Seller's awareness, the actual
facts of the subject matter of such representations may be significantly
different from the information set forth herein; and (v) To the extent that the
subject matter of any such representations is material or important to Buyer (or
would be if the actual facts were different from the information set forth
herein), Seller has urged Buyer to make thorough and independent investigations
of the same during the Due Diligence Period, and to utilize Buyer's right to
terminate this transaction during the Due Diligence Period unless Buyer is
satisfied that it knows, understands, and is satisfied with the actual facts.
13.6 Representations Made as of Effective Date; Procedure for Additional
-------------------------------------------------------------------
Disclosure. Each of the foregoing representations is made as of the Effective
- ----------
Date. However, if either party becomes aware that any such representation if
remade as of the Closing would not be true, then (i) such party shall notify the
other in writing prior to completion of the Closing, and (ii) the party to whom
the representation is made shall either proceed to complete the Closing or
terminate this transaction (in which case the termination provisions shall
apply), and (iii) the party to whom the representation is made shall have no
rights against the representing party for breach of the applicable
representation.
13.7 Limitations on Actions under Representations. No action for breach of
--------------------------------------------
any representation by either party under this Agreement shall be commenced more
than one year after Closing, and this provision shall be a complete bar and
defense against any action commenced after such date. No such action shall be
brought unless the party to whom the representation is made shall suffer losses
in excess of $10,000 by reason of the breach of the representation. The
aggregate liability of either party hereunder for the breach of all of its
representations hereunder shall not exceed $750,000.
14. Pre-Closing Amendments to M/R Systems Lease. After the Effective Date and
------------------------------------------
until the Closing or earlier termination of this transaction, Seller shall not
modify, amend or terminate the M/R Systems Lease Documents. Nothing in this
Section shall prevent Seller from granting of consents or approvals under the
M/R Systems Lease which Seller in good faith believes that it may
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<PAGE>
be obligated to grant, or that would be granted in the absence of the pending
sale.
15. Property "As-Is".
---------------
15.1 NO SIDE AGREEMENTS OR REPRESENTATIONS; AS-IS PURCHASE. ANYTHING TO
-----------------------------------------------------
THE CONTRARY SET FORTH IN THIS SUBSECTION NOTWITHSTANDING, NOTHING IN THIS
SUBSECTION SHALL DIMINISH ANY RIGHTS THAT BUYER SHALL HAVE UNDER THIS AGREEMENT
ON ACCOUNT OF ANY REPRESENTATIONS OF SELLER EXPRESSLY SET FORTH IN THIS
AGREEMENT. SUBJECT TO THE FOREGOING SENTENCE, BUYER REPRESENTS, WARRANTS AND
COVENANTS TO SELLER THAT BUYER WILL, DURING THE DUE DILIGENCE PERIOD,
INDEPENDENTLY AND PERSONALLY INSPECT THE PROPERTY AND IMPROVEMENTS, IF ANY, AND
THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON ITS RIGHTS AND INTENTIONS
TO MAKE SUCH EXAMINATION AND INSPECTION AND ITS RIGHTS AND ABILITY TO
INDEPENDENTLY VERIFY FROM SOURCES OTHER THAN SELLER AND ITS AGENTS ANY AND ALL
OTHER INFORMATION PERTAINING TO THE PROPERTY. BUYER AGREES THAT BUYER WILL
ACCEPT THE PROPERTY AT CLOSING, IN ITS THEN CONDITION AS-IS AND WITH ALL ITS
FAULTS. NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY
EXECUTION HEREOF, BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE
MADE ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR
GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL
OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO
THE PROPERTY OR ANY MATTER REFERRED TO HEREIN, AND SELLER SHALL HAVE NO
RESPONSIBILITY OR LIABILITY TO BUYER OR PERTAINING TO THE PROPERTY AFTER THE
CLOSING. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT BUYER SHALL HAVE BEEN
AFFORDED AMPLE OPPORTUNITY TO INSPECT, ANALYZE AND INVESTIGATE ALL ASPECTS OF
THE PROPERTY AND CONDITIONS RELEVANT THERETO AND THE BUSINESS CONDUCTED THEREON
AND TO REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE PROPERTY. SELLER
SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION
THEREOF, FURNISHED BY ANY OF THE FOREGOING ENTITIES AND INDIVIDUALS OR ANY OTHER
INDIVIDUAL OR ENTITY, EXCEPT THE REPRESENTATIONS OF SELLER SET FORTH HEREIN. AS
OF THE CLOSING, BUYER SHALL ASSUME ALL RISKS IN CONNECTION WITH THE OWNERSHIP OF
THE PROPERTY AND THE MATTERS REFERRED TO IN THIS SECTION.
16. RELEASE. ANYTHING TO THE CONTRARY IN THIS SECTION 16 NOTWITHSTANDING, THE
--------
RELEASE SET FORTH IN THIS SECTION DOES NOT INCLUDE ANY CONTRACTUAL OBLIGATIONS
OF SELLER ARISING UNDER THIS AGREEMENT OR UNDER THE INSTRUMENTS REFERRED TO IN
SUBSECTION 7.1. SUBJECT TO THE FOREGOING SENTENCE, BUYER ON BEHALF OF ITSELF AND
ANYONE CLAIMING BY, THROUGH OR UNDER BUYER HEREBY FULLY AND
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<PAGE>
IRREVOCABLY RELEASES THE SELLER PARTIES AND EACH OF THEM FROM ANY AND ALL NOW
EXISTING OR HEREAFTER ARISING RIGHTS, CLAIMS, LOSSES, LIABILITIES AND DAMAGES,
WHETHER KNOWN OR UNKNOWN, PERTAINING DIRECTLY OR INDIRECTLY TO THE PROPERTY.
WITHOUT LIMITATION, THE FOREGOING RELEASE INCLUDES ANY CLAIMS PERTAINING
DIRECTLY OR INDIRECTLY TO (i) ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS OR
OTHER CONDITIONS, LATENT OR OTHERWISE, GEOTECHNICAL OR SEISMIC, AFFECTING THE
PROPERTY OR ANY PORTION THEREOF, AND (ii) ANY DEFECTS IN THE M/R SYSTEMS LEASE
DOCUMENTS, AND (iii) THE TRANSACTION IN WHICH THE M/R SYSTEMS LEASE DOCUMENTS
WERE EXECUTED AND DELIVERED.
THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE OR WHICH BUYER
DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER, WOULD MATERIALLY
AFFECT BUYER'S RELEASE TO SELLER. BUYER SPECIFICALLY WAIVES THE BENEFIT OF
CALIFORNIA CIVIL CODE SECTION 1542, AND ALL LAWS AND PRINCIPLES OF SIMILAR
EFFECT. SAID SECTION PROVIDES AS FOLLOWS:
"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."
IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE REFLECTS THAT ALL OF THE
PROPERTY IS SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. THE
PURCHASE PRICE WILL NOT BE INCREASED IF ACTUAL COSTS TO BUYER ASSOCIATED WITH
THE PROPERTY ARE LESS THAN EXPECTED, NOR WILL THE PURCHASE PRICE BE REDUCED IF
ACTUAL COSTS TO THE BUYER ARE GREATER THAN EXPECTED.
WEH SDL
- --------- ----- ------ ------
Buyer's initials Seller's initials
17. Termination Provisions.
17.1 Failure of Closing Because of Breach. If the Closing does not occur
------------------------------------
when provided in this Agreement because of the default of one of the parties,
the non-defaulting party shall have the right to terminate this transaction by
written notice to the defaulting party and to the Escrow Holder, in which case
the termination charges and reasonable expenses of and Title Company and Escrow
Holder will be paid by the defaulting party.
17.2 Failure of Closing for Reason Other than Breach. If the Closing fails
-----------------------------------------------
to occur for any reason other than a default by one of the parties, then Buyer
and Seller will each pay one-half
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<PAGE>
of the termination charges and reasonable expenses of and Title Company and
Escrow Holder.
17.3 Return or Retention of Deposit. If this transaction is terminated
------------------------------
for any reason other than a default by Buyer, then Buyer will be entitled to
return of the Deposit and any interest earned thereon. If this transaction is
terminated because of a default by Buyer, then Seller will be entitled to
receive and retain the Deposit, as more particularly provided for in Subsection
23.2, and Buyer shall be entitled to receive the interest on the deposit, except
as provided in Subsection 23.2.
17.4 Return of Documents. If this transaction is terminated for any
-------------------
reason by either party, then Buyer shall deliver to Seller all documents,
instruments, studies, REPORTS, surveys, and other information obtained or
received by Buyer in connection with the Property.
17.5 Survival. If this Agreement or this transaction is terminated in
--------
accordance with this Agreement, then the parties shall have no further rights or
obligations under this Agreement except only pursuant to the provisions that
shall survive such termination. Only the following provisions shall survive such
termination: (i) this Section 17, (ii) provisions providing for indemnification,
(iii) provisions pertaining to liquidated damages, remedies for breach of this
Agreement, and limitations on such remedies, (iv) provisions pertaining to
resolutions of disputes, (v) provisions providing for reimbursement of costs or
attorneys' fees and expenses, (vi) provisions which by their terms deal with
post-termination rights or obligations or state that they shall so survive
termination.
18. Condemnation and Destruction. If prior to the Closing or any earlier
----------------------------
termination of this transaction, any portion of the Property is taken or
materially threatened to be taken under the power of eminent domain, or any
portion of the Property is materially damaged or destroyed, then Seller shall so
inform Buyer of the same within a reasonable time following the same becoming
Known to Seller. If the Closing is scheduled to occur within 15 days after such
notice, then the Closing shall be extended to the 20th day after such notice.
Within 10 days after such notice from Seller, Buyer may deliver written
notice to Seller of Buyer's election to proceed with this transaction
nonetheless, in which case (i) neither party shall have the right to terminate
this transaction pursuant to the following paragraph, and (ii) at Closing,
Seller shall assign to Buyer any right which it shall have to recover under any
insurance policy for such damage or destruction or any right
-20-
<PAGE>
to recover any award in condemnation or in lieu thereof by reason of such actual
or threatened taking, as applicable.
If Buyer does not timely deliver such notice of election, then at any time
after the 10th and before the 18th day after Seller's notice, either party may
terminate this transaction prior to Closing by written notice to the other and
to Escrow Holder, in which case the Deposit and any interest earned thereon
shall be returned to Buyer and the Termination Provisions shall apply.
19. Hazardous Substances.
--------------------
19.1 Definitions. For the purposes of this Agreement, the following terms
------------
have the meanings indicated:
A. "Environmental Law" means any law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environment
including, without limitation CERCLA (Comprehensive Environmental Response,
Compensation and Liability Act of 1980) and RCRA (Resources Conservation and
Recovery Act of 1976).
B. "Hazardous Substance" means any substance, material or waste
which is or becomes designated, classified or regulated as being "toxic" or
"hazardous" or a "pollutant" or which is or becomes similarly designated,
classified or regulated, under any Environmental Law, including but not limited
to asbestos, PCBs, urea formaldehyde, and petroleum and petroleum products.
C. "Environmental Audit" means an environmental audit, review or
testing of the Property performed by Buyer or any third party or consultant
engaged by Buyer to conduct such study.
19.2 Environmental Audit. If during the Due Diligence Period Buyer elects
-------------------
to perform an Environmental Audit:
A. The Environmental Audit will be conducted pursuant to standard
quality control/quality assurance procedures and in accordance with Section 22.
B. Buyer shall not conduct any coring, drilling, or sampling of
soils, subsurface conditions, or ground water or otherwise conduct any inquiry
that Seller reasonably determines to be in the nature of a Phase II
environmental study without Seller's prior written consent, which consent Seller
shall not withhold unreasonably.
-21-
<PAGE>
C. Buyer will give Seller at least two business days' prior written
notice of any on-site visitation, testing or other work.
D. If any report is prepared as the result of the Environmental
Audit, such report will be conspicuously labeled as a draft, and Buyer will
promptly give Seller a copy of the draft report. Prior to the Closing, Buyer
will keep the draft report and the information contained therein confidential
and will not disclose it to any person or entity without Seller's prior written
consent; provided, however, that Buyer may furnish a copy of said draft report
to any proposed lender in connection with prosecution of an application for a
mortgage loan and to any person or entity contemplating an investment in the
Property as a partner or permitted assignee of Buyer, or to any consultant
engaged in, or commenting upon the results of, said draft report.
E. If Buyer elects during the Due Diligence Period not to acquire
the Property or if the Closing fails to occur for any reason, then Buyer will
deliver all copies of the draft report to, and they will become the property of,
Seller, and Buyer will not disclose to anyone the contents of the draft report
except pursuant to valid legal process or with the written consent of Seller.
F. Any ground water, soil or other samples taken from the Property
will be properly disposed of by Buyer at Buyer's sole cost and in accordance
with all applicable laws.
19.3 Disclosure and Acknowledgment. Buyer acknowledges (i) receipt of the
-----------------------------
documents referenced in EXHIBIT L, (ii) that Seller makes no representations or
---------
warranties regarding Hazardous Materials or environmental conditions.
20. Notices. All notices required hereunder or pertaining hereto shall be in
-------
writing and shall be deemed delivered and effective upon the earliest of (A)
telephonic confirmation of a facsimile transmission received in its entirety at
the applicable telephone numbers shown in this provision, after which the notice
will be sent within two business days by express courier as specified in (B)
below, or (B) the earliest of delivery, refusal of the addressee to accept
delivery or failure of delivery after at least one attempt during normal
business hours, in each case as such events are recorded in the ordinary
business records of the delivery entity, which will be FedEx (international
service if over international borders), DHL, Network, or other similarly
prominent express courier service, with all charges prepaid or charged to the
sender's account, or (C) actual receipt by any
-22-
<PAGE>
means. The applicable addresses and telephone numbers are as follows:
Buyer: Kilroy Realty L.P.
2250 East Imperial Highway
Suite 1200
El Segundo, CA 90245
Attn.: Mr. Jeffrey C. Hawken
Facsimile: 310/322-5981
Telephone: 310/322-4933
with a copy to: Latham & Watkins
650 Town Center Drive
20th Floor
Costa Mesa, CA 92626
Attn.: Bruce A. Tester, Esq.
Facsimile: 714/755-8290
Telephone: 714/540-1235
Seller: Camarillo Partners
c/o Weingart Foundation
1055 West Seventh Street
Suite 3050
Los Angeles, CA 90017
Attn.: Mr. Larry Wolfe
Facsimile: 213/688-1515
Telephone: 213/688-7799
and to
Camarillo Partners
c/o D/L Camarillo Partners
c/o The Deutsch Company
2444 Wilshire Boulevard
Suite 600
Santa Monica, CA 90403
Attn.: Mr. William E. Holler
Facsimile: 310/453-6467
Telephone: 310/453-0055
with a copy to: Sidley & Austin
555 West Fifth Street
40th Floor
Los Angles, CA 90013
Attn.: M. Scott Cooper, Esq.
Facsimile: 213/896-6600
Telephone: 213/896-6000
[PROVISION CONTINUES]
-23-
<PAGE>
Either party may change its address for purposes of this Agreement to another
address at which business is conducted on a regular basis (and not to a post
office box or similar receptacle) by giving notice of such change in accordance
herewith.
For reference purposes only, the address, telephone, and facsimile numbers of
Title Company are:
Chicago Title Insurance Company
700 South Flower Street
Suite 900
Los Angeles, CA 90017
Attn.: Ms. Maggie Watson
Facsimile: 213/488-0282
Telephone: 213/488-4337
21. Broker. Seller will pay Broker any commission owing pursuant to a separate
------
written agreement between Seller and Broker, subject to the occurrence of the
Closing. Buyer and Seller each represents to the other that it has dealt with
no broker or other intermediary in connection with this transaction other than
Broker. Buyer and Seller each shall indemnify, defend, and hold harmless the
other from and against any claims or liabilities in the event that any other
person or entity other than Broker claims to be entitled to a commission or
finder's fee with respect to this transaction by reason of any agreement with
the indemnifying party. There are no third-party beneficiaries of this
provision. Each party acknowledges and agrees that Broker is not authorized or
empowered to make any representation or warranty or to bind or incur any
obligation for or on behalf of either party. This Section 21 shall survive the
termination of this Agreement.
22. Entry. During the Due Diligence Period, Buyer and Buyer's representatives,
-----
agents and designees will have the right to enter upon the Property to conduct
inquiries in connection with Buyer's proposed purchase of the Property, subject
to the terms and conditions of this Agreement, including the following:
22.1 Prior to each entry onto the Property, Buyer will provide not less
than two business days' advance written notice to Seller, accurately specifying
the day and time of the entry and accurately describing in reasonable detail the
planned tests and investigations, and Buyer will schedule all tests and
investigations during normal business hours whenever feasible unless otherwise
requested by Seller.
-24-
<PAGE>
22.2 All tests and investigations will be at Buyer's sole cost and
expense.
22.3 Buyer shall assure and provide evidence satisfactory to Seller
that the persons or entities performing such tests and investigations are
properly licensed and qualified and will have obtained all appropriate permits
therefor.
22.4 Buyer shall not core, drill, or break or penetrate any surface
without the prior written consent of Seller, which Seller may not unreasonably
withhold.
22.5 Seller will have the right to have a representative of Seller
accompany Buyer and Buyer's representatives, agents or designees while they are
on the Property.
22.6 Buyer shall assure that any entry by Buyer, its representatives,
agents or designees will not interfere with Seller's or any tenant's use of the
Property or the rights of any tenant under its lease or applicable law.
22.7 Buyer will indemnify, defend and hold the Seller Parties harmless
from and against any and all claims, damages, costs, liabilities and losses
(including mechanics' liens) arising out of any entry by Buyer or its agents,
designees or representatives.
22.8 Buyer will immediately restore the Property at Buyer's sole cost and
expense, and Buyer will take all steps necessary to ensure that any conditions
on the Property created by Buyer's testing will not interfere with the normal
operation of the Property or create any dangerous, unhealthy, unsightly or noisy
conditions on the Property.
22.9 Prior to any entry involving physical testing, drilling or other
physical disturbance, Buyer will obtain, maintain and provide Seller, or shall
cause each consultant, contractor and other person entering the Property to
obtain, maintain and provide Seller proof of comprehensive general liability
insurance in the amount of at least $1,000,000.00 combined, single limit
coverage, naming Seller and M/R Systems as an additional insureds and with
coverages reasonably satisfactory to Seller.
23. Legal and Equitable Enforcement of this Agreement.
-------------------------------------------------
23.1 Default by Seller. If the transaction contemplated hereunder is not
-----------------
consummated due to Seller's default, Buyer shall be entitled to enforce specific
performance of Seller's obligation to convey the Property to Buyer in accordance
with the terms
-25-
<PAGE>
of this Agreement, but Buyer shall not be entitled to recover damages. Any such
action for specific performance shall be brought within six months after the
last Scheduled Closing Date. If any such action is later brought, then this
provision shall be a complete bar to the same.
23.2 DEFAULT BY BUYER. IF THE CLOSING DOES NOT OCCUR BY REASON OF ANY
----------------
DEFAULT OF BUYER, THEN SELLER SHALL BE ENTITLED TO RECEIVE AND RETAIN THE
DEPOSIT AS LIQUIDATED DAMAGES FOR ALL OF SELLER'S DETRIMENT AS A CONSEQUENCE OF
SUCH DEFAULT (OTHER THAN FOR "EXCLUDED ADDITIONAL ITEMS" DESCRIBED BELOW).
FOLLOWING SUCH DEFAULT, WITHIN FIVE DAYS OF SELLER'S REQUEST, BUYER SHALL
DELIVER WRITTEN INSTRUCTIONS TO ESCROW HOLDER TO PAY TO SELLER ANY PORTION OF
THE DEPOSIT THEN HELD BY ESCROW HOLDER. BUYER AND SELLER AGREE THAT IT WOULD BE
IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES TO SELLER IN THE
EVENT OF A FAILURE TO CLOSE BY REASON OF BUYER'S DEFAULT AND THAT THE AMOUNT OF
THE DEPOSIT IS THE PARTIES' REASONABLE ESTIMATE OF THE AMOUNT OF DAMAGES THAT
SELLER WOULD SUFFER (OTHER THAN FOR EXCLUDED ADDITIONAL ITEMS). THE PAYMENT OF
SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A "FORFEITURE" OR "PENALTY"
AS SUCH TERMS ARE USED IN CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369 OR
OTHERWISE, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT
TO CALIFORNIA CIVIL CODE SECTIONS 1671(b), 1676 AND 1677. SELLER HEREBY WAIVES
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. BUYER HEREBY IRREVOCABLY
AGREES THAT THIS PROVISION AND THE LIQUIDATED DAMAGES PROVIDED HEREIN ARE
REASONABLE. HOWEVER, THE LIQUIDATED DAMAGES IDENTIFIED HEREIN ARE OF VALUE TO
SELLER IF, AND ONLY IF, SELLER RECEIVES THE SAME UPON DEFAULT BY BUYER OF ITS
PURCHASE OBLIGATIONS HEREUNDER WITHOUT LITIGATION, ARBITRATION OR OTHER
PROCEEDING. IF BUYER DISPUTES SELLER'S RIGHT TO SUCH LIQUIDATED DAMAGES, AND
THE JUDGE OR ARBITRATOR PRESIDING OVER SUCH PROCEEDING DETERMINES THAT THE
CLOSING HAS NOT OCCURRED BY REASON OF A BREACH BY BUYER, OR IF BUYER FAILS TO
EXECUTE INSTRUCTIONS TO ESCROW HOLDER AS AND WHEN REQUIRED ABOVE INSTRUCTING IT
TO DELIVER THE DEPOSIT TO SELLER, THEN SELLER SHALL BE ENTITLED TO RECEIVE THE
DEPOSIT AND ALSO INTEREST THEREON AT THE GREATER OF THE LEGAL RATE OR THE AMOUNT
OF INTEREST ACTUALLY EARNED ON THE DEPOSIT, FROM THE DATE OF SELLER'S
ENTITLEMENT TO THE DEPOSIT UNTIL THE SAME IS PAID. IN THE EVENT OF SUCH A
PROCEEDING THE PREVAILING PARTY SHALL BE ENTITLED TO COSTS AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS' FEES. NOTWITHSTANDING THE FOREGOING, THIS
PROVISION WILL NOT LIMIT (AND THE LIQUIDATED DAMAGES DISCUSSED ABOVE DO NOT
INCLUDE COMPENSATION FOR) "EXCLUDED ADDITIONAL ITEMS," CONSISTING OF THE
FOLLOWING: (i) SELLER'S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS' FEES, (ii)
BUYER'S INDEMNITY OBLIGATIONS, AND (iii) BUYER'S OBLIGATIONS TO RETURN OR
PROVIDE TO SELLER DOCUMENTS,
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REPORTS OR OTHER INFORMATION PROVIDED TO OR PREPARED BY OR FOR BUYER PURSUANT TO
APPLICABLE PROVISIONS OF THIS AGREEMENT.
JH WEH SDL
- --------- ----- ----- -----
Buyer's initials Seller's initials
24. Assignment, Transfer.
--------------------
24.1 General Provisions. Buyer will not transfer by assignment or
------------------
otherwise this Agreement or any interest herein or hereunder without obtaining
Seller's prior written consent, which consent may be withheld by Seller in its
sole and absolute discretion for any reason whatsoever. Any such attempted
transfer without Seller's prior written consent will, at Seller's option, be
void and constitute a material breach of this Agreement. If Seller consents to
a transfer, the transfer will not be effective against Seller unless and until
Buyer delivers to Seller an instrument fully executed by Buyer and the
transferee, which instrument shall be in form and substance satisfactory to
Seller and shall contain provisions pursuant to which the transferee assumes and
agrees to perform for the benefit of Seller the obligations of Buyer under this
Agreement, and pursuant to which the transferee makes the warranties and
representations required of Buyer under this Agreement and such other
representations and warranties as Seller may reasonably require. Any such
transfer will not release Buyer from any of its obligations under this
Agreement.
24.2 Consent to Contemplated Transfer. Subject to compliance with
--------------------------------
Subsection 24.1, Seller shall consent to the assignment of Buyer's rights
hereunder to Kilroy Realty Finance Partnership, L.P., or a wholly owned
subsidiary thereof.
25. Miscellaneous.
-------------
25.1 Counterparts. This Agreement may be executed in counterparts.
------------
25.2 Partial Invalidity. If any term or provision of this Agreement shall
------------------
be deemed to be invalid or unenforceable to any extent, the remainder of this
Agreement will not be affected thereby, and each remaining term and provision of
this Agreement will be valid and be enforceable to the fullest extent permitted
by law.
25.3 Possession of the Property. Seller will deliver possession of the
--------------------------
Property to Buyer upon the Close of Escrow, subject to the rights of any
tenants.
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<PAGE>
25.4 Waivers. No waiver of any breach of any covenant or provision
-------
contained herein will be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision contained herein. No extension
of time for performance of any obligation or act will be deemed an extension of
the time for performance of any other obligation or act except those of the
waiving party, which will be extended by a period of time equal to the period of
the delay.
25.5 Successors and Assigns. This Agreement is binding upon and inures to
----------------------
the benefit of the permitted successors and assigns of the parties hereto.
25.6 Professional Fees. In the event of any action, arbitration or suit
-----------------
between or among the parties hereto arising out of this Agreement, the
prevailing party will be entitled to recover from the nonprevailing party all
costs and expenses of the action, arbitration or suit, actual attorneys' fees
(including the allocated costs of in-house counsel), witness fees and any other
professional fees resulting therefrom.
25.7 Entire Agreement. This Agreement (including all exhibits attached
----------------
hereto) constitutes the entire contract between the parties hereto with respect
to the subject matter hereof and may not be modified except by an instrument in
writing signed by the party to be charged. All prior negotiations and
agreements are superseded hereby.
25.8 Time of Essence. Time is strictly of the essence with respect to
---------------
each and every term, condition, obligation and provision hereof.
25.9 Construction. This Agreement has been prepared by Seller and its
------------
professional advisors and reviewed by Buyer and its professional advisers.
Seller and Buyer and their respective advisors believe that this Agreement is
the product of all of their efforts, that it expresses their agreement, and that
it should not be interpreted in favor of or against either Buyer or Seller.
25.10 Governing Law. This Agreement will be governed by, interpreted
-------------
under, and construed and enforced in accordance with the laws of the State in
which the Property is located.
25.11 Confidentiality. Unless otherwise agreed to in writing by Seller
---------------
and Buyer, each party will keep confidential all documents, financial
statements, reports or other information provided to, or generated by the other
party relating to the Property and will not disclose any such information to any
person
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<PAGE>
other than (i) employees and agents of Seller or Buyer; (ii) those who are
actively and directly participating in the evaluation of the Property and the
negotiation and execution of this Agreement or financing of the purchase of the
Property on behalf of Seller and Buyer, (iii) governmental, administrative,
regulatory or judicial authorities, (iv) as required by law or judicial order.
However, Buyer expressly covenants and agrees that it will not disclose any code
compliance or noncompliance, environmental or other regulatory matters to
governmental or other authorities without the express prior written approval by
Seller.
Notwithstanding the foregoing, (i) after termination of this Agreement,
Seller may disclose any report, study, or other matter pertaining to the
Property to anyone, and (ii) after the Closing, Buyer may disclose any report,
study, or other matter pertaining to the Property to anyone.
The provisions of this Subsection will survive the termination of this
Agreement.
25.12 No Recordation. No memorandum or other document relating to this
--------------
Agreement will be recorded without the prior written consent of Seller, which
consent may be withheld at Seller's sole and absolute discretion. Without
limitation, any such consent or approval will be conditioned upon Buyer's
providing Seller with a quitclaim deed in form and substance satisfactory to
Seller, fully executed and acknowledged by Buyer, quitclaiming any and all
interests that Buyer may have in the Property to Seller, which quitclaim deed
Seller may record in the event that this Agreement is terminated or the
transaction contemplated herein is not consummated.
25.13 Survival. This Agreement shall survive Close of Escrow and
--------
recordation of the Deed.
25.14 Form of Payment. All payments required of Buyer hereunder shall be
---------------
in cash, confirmed Federal Reserve Bank wire transfer, or otherwise in
immediately available funds satisfactory to Seller and Escrow Holder.
25.15 Facsimile Signatures. In order to expedite the transaction
--------------------
contemplated herein, telecopied signatures may be used in place of original
signatures on this Agreement or any document delivered pursuant hereto. Seller
and Buyer intend to be bound by the signatures on the telecopied document, are
aware that the other party will rely on the telecopied signatures, and hereby
waive any defenses to the enforcement of the terms of this Agreement based on
the form of signature.
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<PAGE>
25.16 Captions. The section headings appearing in this Agreement are for
--------
convenience of reference only and are not intended, to any extent and for any
purpose, to limit or define the text of any section of any subsection hereof.
25.17 Third-Party Work Product. Where either party obtains or furnishes to
------------------------
the other any title report, survey, environmental report, or other work product
of third parties, the party obtaining or furnishing such work product shall not
be responsible for the accuracy, completeness, or other quality of the same.
25.18 Not an Offer. Seller's delivery of unsigned copies of this
------------
Agreement is solely for the purpose of review by the party to whom delivered,
and neither the delivery nor any prior communications between the parties,
whether oral or written, will in any way be construed as an offer by Seller, nor
in any way imply that Seller is under any obligation to enter the transaction
which is the subject of this Agreement. The signing of this Agreement by Buyer
constitutes an offer which will not be deemed accepted by Seller unless and
until Seller has signed this Agreement and delivered a duplicate original to
Buyer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year hereinabove written.
"SELLER"
CAMARILLO PARTNERS,
a California general partnership
By: Weingart Foundation,
a California non-profit
public benefit corporation,
General Partner
By: /s/ Larry Wolfe
-----------------------------
Larry Wolfe
Vice President
[SIGNATURES CONTINUE NEXT PAGE]
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<PAGE>
By: D/L Camarillo Partners,
a California general partnership
By: The Deutsch Company,
a California corporation,
General Partner
By: /s/ William E. Holler
-----------------------------
William E. Holler
Its: V.P.
-----------------------------
By: /s/ Stephen D. Lebowitz
-----------------------------
Stephen D. Lebowitz,
General Partner
"BUYER"
KILROY REALTY L.P.,
a Delaware limited partnership
By: Kilroy Realty Corporation,
a Maryland corporation,
General Partner
By: /s/ Jeffrey L. Hawken
------------------------------
Name: Jeffrey L. Hawken
Its: Executive Vice President
----------------------------
Escrow Holder executes this Agreement subject to the Escrow Instructions
attached in the form of Exhibit C.
---------
"ESCROW HOLDER"
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Maggie G. Watson Date: 5/1/97
----------------------------- ------------------------
Name: Maggie G. Watson Escrow No.: 7151190-865
---------------------------- ------------------
Title: Sr. V.P.
---------------------------
[CONTINUES NEXT PAGE]
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<PAGE>
Exhibits:
- --------
Exhibit A - Legal Description
Exhibit B - M/R Systems Lease Documents
Exhibit C - Form of Escrow Instructions
Exhibit D - Form of M/R Systems Estoppel Certificate
Exhibit E - Form of Grant Deed
Exhibit F - Form of FIRPTA Certificate
Exhibit G - Form of Bill of Sale
Exhibit H - Form of Assignment and Assumption
Exhibit I - Form of Assignment of Guaranty and Deed of Trust
Exhibit J - Form of Tenant Notice
Exhibit K - Ledger of 1995 and 1996 rental receipts under M/R Systems Lease
Exhibit L - List of Documents Buyer has received regarding Hazardous
Materials
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