Exhibit 10.27
200 & 300 OCEANGATE, LONG BEACH, CALIFORNIA
 
PURCHASE AGREEMENT
BETWEEN
200 OCEANGATE, LLC, A DELAWARE LIMITED LIABILITY COMPANY
AND
MOLINA CENTER LLC, A DELAWARE LIMITED LIABILITY COMPANY
NOVEMBER 30, 2010

 

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TABLE OF CONTENTS

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

LIST OF EXHIBITS

     
Exhibit A
  Description of the Land
Exhibit B
  Documents Delivered to Buyer
Exhibit C
  Rent Roll
Exhibit D
  Form of Tenant Estoppel Certificate
Exhibit E
  Service Contracts
Exhibit F
  Grant Deed
Exhibit G
  Bill of Sale and General Assignment
Exhibit H
  FIRPTA Affidavit
Exhibit I
  Form of Tenant Notice Letter
Exhibit J
  Form of Owner’s Affidavit
Exhibit K
  Buyer’s Insurance
Exhibit L
  Seller’s Insurance

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PURCHASE AGREEMENT
200 & 300 OCEANGATE, LONG BEACH, CALIFORNIA
     THIS AGREEMENT is entered into as of the 30th day of November, 2010
(“Contract Date”), by and between 200 OCEANGATE, LLC, a Delaware limited
liability company (“Seller”), and MOLINA CENTER LLC, a Delaware limited
liability company (“Buyer”).
RECITALS
     Seller owns and is offering for sale the land and improvements commonly
known as 200 & 300 Oceangate, Long Beach, California, and more completely
described below. Buyer has offered to buy the property, and the parties are
entering into this Agreement to set forth the terms and conditions of the sale
to Buyer.
     NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth below, the parties hereto agree as follows:
1. Agreement of Sale.
     1.1 Seller hereby agrees to sell to Buyer and Buyer hereby agrees to
purchase from Seller that certain real property (the “Land”) with street address
of 200 & 300 Oceangate, Long Beach, California, and more particularly described
in attached Exhibit A, together with Seller’s right, title and interest in the
following, which together with the Land, shall be termed the “Property” herein:
          (a) the approximately 461,263 square foot office project located at
200 & 300 Oceangate, Long Beach, California and all fixtures and other
improvements located upon the Land (collectively, the “Improvements”);
          (b) all easements, rights of way, privileges, licenses, appurtenances
and other rights and benefits of Seller belonging to or in any way related to
the Land, and the Improvements, including water rights, mineral rights, air
rights and development rights, if any (together with the Land and Improvements,
the “Real Property”);
          (c) all fixtures, furnishings, equipment and other tangible personal
property owned by Seller that are used for the operation of the Property and
that are located on the Property or that are used exclusively for the operation
of the Property (the “Personal Property”);
          (d) the Leases and Service Contracts (as such terms are hereinafter
defined) and all security deposits held by Seller with respect to the Leases;
          (e) to the extent assignable, all certificate(s) of occupancy,
building or equipment permits, consents, authorizations, variances, waivers,
licenses, permits, certificates

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and approvals from any governmental or quasi-governmental authority necessary
for the use of the Land or the Improvements (collectively, the “Approvals”);
          (f) all transferable or assignable warranties (the “Warranties”)
relating to the ownership, development, use and operation of the Land and
Improvements;
          (g) to the extent assignable, all of Seller’s interest in all
structural, soil, seismic, geologic, engineering and other reports and studies,
all operating manuals for all systems, equipment and operating components of the
Property, all marketing materials that are distributed or shown to potential
tenants in the marketing of the Property for lease, photos and depictions, all
architectural drawings, plans and specifications relating to all or any portion
of the Real Property, and all intellectual property rights to the Property,
including, without limitation, trade names, trademarks, service marks, logos or
other source and business identifiers, trademark registrations and applications
for registration used at or relating to the Real Property and any written
agreement granting to Seller any right to use any trademark or trademark
registration at or in connection with the Real Property (the “Intangible
Property”).
2. Purchase Price. The purchase price for the Property is Eighty-Three Million
Dollars ($83,000,000.00) (“Purchase Price”) and shall be paid in cash by Buyer
at the Closing (as defined in Section 10.1 below).
3. Non-Refundable Payment and Deposit
     3.1 Non-Refundable Payment. On the Contract Date, as consideration for
Seller’s agreement to enter into this Agreement and grant Buyer the right to
conduct due diligence and terminate this Agreement on and subject to the terms
of Section 7, and as a condition precedent to the effectiveness of this
Agreement, Buyer shall deliver directly to Seller, by personal check, cash or
wire transfer funds in the amount of One Hundred and No/100ths Dollars ($100)
(the “Non-Refundable Payment”). The Non-Refundable Payment shall be fully earned
and retained by Seller immediately upon receipt and, notwithstanding any
provisions of this Agreement to the contrary, the Non-Refundable Payment shall
not be returned to Buyer in any circumstance.
     3.2 Deposit; Liquidated Damages.
          (a) Initial Deposit. Within one (1) business day after the Contract
Date, Buyer shall deposit in an escrow (the “Escrow”) established for the within
contemplated transaction with First American Title Insurance Company, National
Commercial Services, 1850 Mt. Diablo Blvd., Suite 300, Walnut Creek, California,
94596, Attention: Kitty Schlesinger, Order No. NCS-453433-CC (the “Title
Company”), the sum of Five Hundred Thousand Dollars ($500,000) (the “Initial
Deposit”), with instructions to the Title Company to hold the Initial Deposit in
the Escrow in an interest-bearing account, with interest accruing for the
benefit of Buyer. In the event the sale of the Property is consummated, the
Initial Deposit and all interest earned thereon shall be applied towards the
Purchase Price. If Buyer elects to terminate this Agreement pursuant to its
terms or fails to notify Seller in writing that the Property is acceptable, as
provided in Section 7, prior to the end of the Due Diligence Period (as defined
in Section 7), the Initial Deposit and all interest thereon shall be returned to
Buyer, and the parties shall be

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released from all further obligations and liability under this Agreement, except
for those obligations that survive the termination of this Agreement.
          (b) Additional Deposit. Concurrently with, and subject to, the
delivery of the Approval Notice to Buyer as provided in Section 7, Buyer shall
deposit in the Escrow the additional sum of Two Million and No/100ths Dollars
($2,000,000) (the “Additional Deposit” and together with the Initial Deposit,
the “Deposit”), with instructions to the Title Company to hold such Additional
Deposit in the Escrow, in an interest bearing account, with interest accruing
for the benefit of Buyer. In the event the sale of the Property to Buyer is
consummated, the Deposit and all interest earned thereon shall be applied
towards the Purchase Price.
          (c) Non-Refundable Deposit. Upon the delivery by Buyer to Seller of
the Approval Notice, the Deposit shall be non-refundable to Buyer except in the
following events, upon the occurrence of which the Deposit and all interest
thereon shall be returned to Buyer: (i) the Closing fails to occur due to a
material default by Seller under this Agreement; (ii) the Closing fails to occur
as a result of a failure of a condition to Closing in favor of Buyer, but only
if such failure occurs other than as a result of a material default by Buyer
under this Agreement; or (iii) the terms of this Agreement expressly provide for
the return of the Deposit to Buyer. On the Closing Date, the Deposit and all
interest earned thereon shall be applied to the Purchase Price.
          (d) Liquidated Damages. If this Agreement does not terminate pursuant
to Section 7, but Buyer fails to consummate this transaction on the scheduled
Closing Date (as defined in Section 10.1) due to default by Buyer and any such
default continues for five (5) business days after written notice from Seller to
Buyer, which written notice shall detail such default, Seller shall be entitled
to the Deposit, and all interest thereon, as liquidated damages. The parties
have acknowledged and agreed that Seller’s damages, in the event of a default by
Buyer, would be extremely difficult or impracticable to determine. Therefore, by
placing their initials below, the parties acknowledge that the Deposit, and all
interest thereon, has been agreed upon, after negotiation, as the parties’
reasonable estimate of Seller’s damages. Notwithstanding the foregoing, in no
event shall Seller’s ability to recover from Buyer any loss, cost, damage or
expense pursuant to any indemnification or other provision of this Agreement
that survives the Closing be deemed limited in any respect by this provision or
by Seller’s receipt of the Deposit. The parties agree that the Deposit is not
intended as a forfeiture or penalty within the meaning of California Civil Code
Sections 3275 or 3369 but shall be treated as liquidated damages pursuant to
California Civil Code Sections 1671, 1676 and 1677.

     
 
   
Seller
  Buyer

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

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     4.1 Due Diligence Deliveries. Seller has provided Buyer with, and Buyer
acknowledges receipt of, copies of the materials and documents identified in
Exhibit B attached hereto.
     4.2 Title Report. Seller has also provided to Buyer, and Buyer acknowledges
receipt of that certain preliminary title report for the Property prepared under
Order No. NCS-453433-CC, together with a copy of each document referred to
therein (collectively, the “Preliminary Title Report”).
     4.3 Property Documents. Buyer shall have the right, at Buyer’s sole cost
and expense and with at least one (1) business day prior notice, to review
Seller’s real property transaction files (excluding any privileged or
confidential information and excluding any valuation and appraisal information),
lease files, plans and specification files, and other files relating to the
Property and its ownership, operation, management and maintenance during regular
business hours, which files are located in the management office at the
Property.
     4.4 Leases. Seller shall deliver to Buyer copies of the existing leases,
license agreements and rental agreements covering any portion of the Property,
any guarantees thereof, and all amendments, modifications and supplements
thereto as listed on Exhibit C hereto (each a “Lease” and collectively, the
“Leases”).
     4.5 Tenant Estoppels.
          (a) Seller shall deliver to Buyer an estoppel certificate (a “Tenant
Estoppel”), in the form of attached Exhibit D or, if the applicable Lease
provides for a different form of estoppel in the form specified in the
applicable Lease, dated no earlier than thirty (30) days prior to Closing, from
as many of the tenants of the Property (the “Tenants”) from whom Seller is able
to obtain such Tenant Estoppels through the exercise of Seller’s diligent, good
faith efforts. Seller shall, at least ten (10) days prior to the expiration of
the Due Diligence Period and prior to delivery to the Tenants for execution,
deliver completed forms of Tenant Estoppels to Buyer for Buyer’s review and
approval, provided that Seller shall not be obligated to deliver the form of
Tenant Estoppel for any of the following Tenants (collectively, the “Government
Tenants”): (A) the State of California acting by and through the Director of the
Department of General Services; and (B) the United States of America, Department
of Veterans Affairs. Buyer may disapprove a Tenant Estoppel only if (i) it is
not in the form of Exhibit D or, if the applicable Lease provides for a
different form or content of estoppel in the form or content specified in the
applicable Lease, the form or content provided by the applicable Lease, or
(ii) if the information set forth in the Tenant Estoppel is not consistent with
the terms set forth in the applicable Lease. If Buyer has not responded as to
such approval within three (3) business days of receipt of a Tenant Estoppel,
Buyer shall be deemed to have approved the Tenant Estoppel in question for
delivery to Tenant. Seller shall deliver completed Tenant Estoppels to Buyer as
they are received by Seller. Notwithstanding the foregoing, Seller shall not be
obligated to prepare or seek Tenant Estoppels with respect to the following
Leases, as amended and assigned to date: (1) License Agreement, dated
November 30, 2000, by and between Pacific Towers Associates and Captivate
Network, Inc.; (2) Antenna Site License Agreement, dated as of November 30,
2006, by and between Seller and Direct America Satellite Services;
(3) Telecommunications

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License Agreement, dated July 13, 2005, by and between Seller and Rocket
Internetworking, Inc.; (4) Telecommunications Access and License Agreement,
dated December 21, 2009, by and between Seller and TCG Los Angeles, Inc.;
(5) License Agreement, dated December 21, 2000, by and between XO
Communications, Inc., and Pacific Towers Associates; and (6) UPS Drop Box
Agreement, dated February 2, 2010, by and between United Parcel Service, Inc.,
and Seller.
          (b) Estoppel Thresholds. Buyer shall have a right to terminate this
Agreement upon written notice prior to the Closing Date and receive a refund of
the Deposit and all interest thereon as its sole remedy if Seller fails to
deliver to Buyer at least three (3) days prior to the Closing Date, Tenant
Estoppels from (i) the State of California acting by and through the Director of
the Department of General Services, which is the contracting party under five
(5) separate Leases – State Lands Commission (two Leases), California Coastal
Commission, and Department of Industrial Relations (two Leases), confirming that
such Leases are in effect, that the Tenant has no default claims against Seller,
that the term of the Lease is consistent with the term reflected in the Lease,
and that the base monthly rent payable is consistent with the base monthly rent
shown in the Lease, (ii) the United States of America, Department of Veterans
Affairs confirming that the Lease is in full force and effect, the date to which
the rent and other charges have been paid in advance, if any; and whether any
notice of default has been issued, (iii) each of (1) AECOM Technology Corp.,
(2) Pacific Maritime Association, (3) Long Beach Publishing Company, Inc., and
Medianews Group, Inc., and (4) J. Perez Associates, Inc. (collectively, the
“Major Non-Government Tenants in Occupancy”) in the form approved or deemed
approved by Buyer pursuant to Section 4.5(a) above, and (iv) an estoppel from
Crowell Weedon & Co. certifying that its Lease has not been modified or amended
in writing or orally or by course of conduct, and contains the entire
understanding and agreement with Seller concerning the premises under the Lease.
Buyer acknowledges and agrees that if the Major Non-Government Tenants in
Occupancy delete or modify one or both of sections 20 and 21 of the form Tenant
Estoppel attached as Exhibit D, such deletion(s) or modification(s) shall not
constitute a change in the form approved or deemed approved by Buyer. As used in
this Agreement, the term “Major Non-Government Tenants” shall mean the Major
Non-Governmental Tenants in Occupancy and Crowelll Weedon & Co.
     4.6 Service Contracts. Seller has delivered to Buyer, and Buyer
acknowledges receipt of, copies of the service, maintenance, management and
other contracts and agreements related to the operation and management of the
Property, excluding the property management agreement which will not be assigned
at Closing, all of which are listed on the attached Exhibit E (the “Service
Contracts”). If Buyer delivers the Approval Notice, Buyer shall be deemed to
have agreed to assume at Closing all of the Service Contracts.
     4.7 Survey. Seller shall deliver a copy of Seller’s existing survey to
Buyer (the “Survey”). Buyer may, at its sole cost and expense, cause the Survey
to be updated and recertified as deemed necessary and appropriate by Buyer.
5. Title.
     5.1 Title Commitment. Buyer shall be responsible for obtaining, no later
than the end of the Due Diligence Period, a commitment from the Title Company to
issue at Closing a policy

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

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     5.4 No Recording. Neither this Agreement nor any memorandum of this
Agreement shall be recorded by, or on behalf of, Buyer in the Official Records
of the County of Los Angeles. If Buyer violates the terms of this Section 5.4 by
recording or attempting to record this Agreement or a memorandum thereof, such
act shall not operate to bind or cloud the title to the Property, shall
constitute a material breach and default by Buyer under this Agreement, and
shall entitle Seller to terminate this Agreement by written notice to Buyer,
which termination notice may be recorded against the Property.
6. Access.
     6.1 Provided that Buyer has complied with the insurance requirements in
Section 6.3 and gives Seller at least one (1) business day’s prior notice (oral
or written), Seller shall allow Buyer and authorized representatives of Buyer
reasonable access, at reasonable times, to the Property for the purposes of
satisfying Buyer with respect to the Property. In performing its examinations
and inspections of the Property, Buyer shall use reasonable efforts to minimize
any interference with Seller’s and the Tenants’ use and occupancy of the
Property. Seller shall have the right at all times to have a representative of
Seller accompany any of Buyer or Buyer’s employees, agents, contractors,
consultants, officers, directors, representatives, managers or members
(collectively, “Buyer’s Agents”) while such persons are on the Property. Buyer
may conduct interviews with the Tenants, provided Buyer has given Seller no less
than two (2) business days notice prior to any such interview, and provided
further that Seller shall have the right to be present at all such interviews.
Buyer’s breach of this Section 6.1 (and all subsections) shall constitute a
material breach and default by Buyer of this Agreement. All investigations and
inspections shall be performed in compliance with this Section 6 and all local,
state and federal laws, rules and regulations, including, without limitation,
any and all permits required thereunder, which permits shall be obtained by and
at the sole cost of Buyer.
          (a) Buyer shall not conduct or allow any physically intrusive or
destructive testing of, on or under the Property, without Seller’s prior written
consent, which consent may be withheld at Seller’s sole and absolute discretion;
provided, however, Buyer may, subject to its damage and repair obligations in
this Section 6.1 and 6.2, inspect the Property for asbestos-related materials.
Buyer shall provide Seller with two (2) days written notice prior to the
commencement of any physically intrusive or destructive testing, accompanied by
a detailed work plan describing the nature, scope, location and purpose of the
proposed work. Buyer acknowledges and agrees that Seller’s review of Buyer’s
work plan is solely for the purpose of protecting Seller’s interests, and shall
not be deemed to create any liability of any kind on the part of Seller in
connection with such review that, for example, the work plan is adequate or
appropriate for any purpose or complies with applicable legal requirements. All
work and investigations shall be performed in compliance with all local, state
and federal laws, rules and regulations, including, without limitation, any and
all permits required thereunder, all of which shall be at the sole cost and
expense of Buyer.
          (b) During the performance of Buyer’s investigations, Buyer shall
promptly remove and properly dispose of all samples, substances and materials
extracted from or generated by Buyer at the Property and, upon the completion of
its investigations, shall return the Property to its original condition,
including the removal of all equipment and materials used or

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

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with the coverages described in the ACORD Certificate of Liability Insurance
attached hereto as Exhibit K, naming Seller as an additional insured under all
such liability insurance.
7. Due Diligence Period. Buyer shall have until December 30, 2010, (“Due
Diligence Period”) to inspect and investigate the Property, including roof,
plumbing, soils, electrical, sprinkler, water, sewer, mechanical, engineering,
heating, ventilation and air conditioning and life safety systems, structural
integrity of the Improvements, measurement of the square footage of the Land and
Improvements, legal status and requirements pertaining to the Property
(including applicable building codes, zoning, environmental, public health and
fire safety laws), hazardous substance inspections including preparation of an
environmental assessment, suitability of the Property for Buyer’s purposes and
all other matters of significance to Buyer. Buyer agrees to keep the results of
such testing and inspections confidential, except to the extent that disclosure
is required by law (in which case Buyer will notify Seller in writing prior to
making any such disclosure). Buyer shall order and pay for all costs and
expenses with respect to such inspections and investigations. If, in Buyer’s
sole and absolute discretion, Buyer desires to proceed with its acquisition of
the Property, Buyer shall deliver written notice to Seller (the “Approval
Notice”), prior to the expiration of the Due Diligence Period, stating that it
approves the Property, in which case the parties shall proceed to complete the
Closing (subject to the terms and conditions of this Agreement). If Buyer fails
to deliver the Approval Notice prior to the expiration of the Due Diligence
Period or if such Approval Notice seeks to modify any of the terms or provisions
of this Agreement, Buyer will be deemed to have disapproved the Property and to
have exercised its right to terminate this Agreement pursuant to this Section 7,
in which case this Agreement shall automatically terminate as of the expiration
of the Due Diligence Period and the Initial Deposit, together with all interest
earned thereon, shall be returned to Buyer. Further, if Buyer fails to deposit
the full Additional Deposit in Escrow prior to the expiration of the Due
Diligence Period, regardless of whether Buyer has delivered the Approval Notice,
Buyer will be deemed to have disapproved the Property and to have exercised its
right to terminate this Agreement pursuant to this Section 7, in which case this
Agreement shall automatically terminate as of the expiration of the Due
Diligence Period and the Initial Deposit, together with all interest earned
thereon, shall be returned to Buyer. Notwithstanding anything in this Agreement
to the contrary, Buyer may elect, at any time prior to the expiration of the Due
Diligence Period, for any reason or no reason, to terminate this Agreement, upon
which termination the Deposit and all interest earned thereon shall be refunded
to Buyer and the parties shall have no further obligation to each other excepts
for those obligations which expressly survive such termination.
8. Acceptance of Property “As Is”. ACKNOWLEDGING BUYER’S OPPORTUNITY TO INSPECT
AND INVESTIGATE THE PROPERTY AS PROVIDED IN THIS AGREEMENT, BUYER AGREES TO TAKE
THE PROPERTY “AS IS” WITH ALL FAULTS AND CONDITIONS THEREON, SUBJECT ONLY TO THE
EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER SET FORTH IN THIS
AGREEMENT OR THE OTHER AGREEMENTS ENTERED INTO BETWEEN BUYER AND SELLER AS OF
THE CLOSING DATE. ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS
(“DISCLOSURES”) PROVIDED OR MADE TO BUYER OR ITS CONSTITUENTS BY SELLER, ITS
AGENTS, REPRESENTATIVES OR EMPLOYEES CONCERNING THE PROPERTY SHALL NOT
CONSTITUTE REPRESENTATIONS OR

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WARRANTIES. BUYER SHALL NOT RELY ON SUCH DISCLOSURES BUT, RATHER, BUYER SHALL
RELY SOLELY ON ITS OWN INSPECTION OF THE PROPERTY AND THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER IN THIS AGREEMENT.
ACCORDINGLY, BUYER’S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE PROVISIONS
OF SECTION 7 (DUE DILIGENCE PERIOD) ABOVE, SHALL CONSTITUTE BUYER’S
ACKNOWLEDGMENT AND AGREEMENT TO THE FOLLOWING: (i) BUYER HAS REVIEWED, EVALUATED
AND VERIFIED THE DISCLOSURES AND DOCUMENTS AND HAS CONDUCTED ALL INSPECTIONS,
INVESTIGATIONS, TESTS, ANALYSES, APPRAISALS AND EVALUATIONS OF THE PROPERTY
(INCLUDING FOR TOXIC OR HAZARDOUS MATERIALS, SUBSTANCES OR WASTES (DEFINED AND
REGULATED AS SUCH PURSUANT TO SECTIONS 25316 AND 25501 OF THE CALIFORNIA HEALTH
& SAFETY CODE, THE RESOURCE CONSERVATION AND RECOVERY ACT, THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED
(“CERCLA”) OR ANY SIMILAR LAWS AND ALL REGULATIONS PROMULGATED THEREUNDER)) AS
BUYER CONSIDERS NECESSARY OR APPROPRIATE TO SATISFY ITSELF FULLY WITH RESPECT TO
THE CONDITION AND ACCEPTABILITY OF THE PROPERTY (ALL OF SUCH INSPECTIONS,
INVESTIGATIONS AND REPORTS BEING HEREIN COLLECTIVELY CALLED THE
“INVESTIGATIONS”); (ii) SELLER HAS PERMITTED BUYER ACCESS TO THE PROPERTY AND
HAS DELIVERED TO, OR MADE AVAILABLE TO, BUYER ALL OF THE MATERIALS REFERENCED IN
SECTION 4 (INCLUDING THE DOCUMENTS AND MATERIALS IDENTIFIED ON EXHIBIT B)
(COLLECTIVELY, THE “DOCUMENTS”); AND (iii) BUYER HAS COMPLETED ITS DUE DILIGENCE
WITH RESPECT TO THE PROPERTY AND THE DOCUMENTS TO ITS SATISFACTION, IS
THOROUGHLY FAMILIAR WITH THE PHYSICAL CONDITION OF THE PROPERTY, AND SUBJECT
ONLY TO THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER IN THIS
AGREEMENT OR THE OTHER AGREEMENTS ENTERED INTO BETWEEN BUYER AND SELLER AS OF
THE CLOSING DATE, IS ACQUIRING THE PROPERTY BASED EXCLUSIVELY UPON ITS OWN
INVESTIGATIONS AND INSPECTIONS OF THE PROPERTY AND THE DOCUMENTS.
          FURTHER, BUYER’S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE
PROVISIONS OF SECTION 7 (DUE DILIGENCE PERIOD) ABOVE, SHALL CONSTITUTE BUYER’S
ACKNOWLEDGMENT AND AGREEMENT TO THE PROVISIONS OF THIS SECTION 8 AND THAT,
REGARDLESS OF THE CONTENT OF ANY OF THE DOCUMENTS OR ANY STATEMENTS THAT SELLER,
ITS AGENTS, EMPLOYEES, OFFICERS, CONTRACTORS, PARTNERS OR MEMBERS MAY HAVE MADE
TO BUYER, ITS AGENTS, EMPLOYEES, OFFICERS, CONTRACTORS, PARTNERS OR MEMBERS
PRIOR TO OR DURING THE DUE DILIGENCE PERIOD, OTHER THAN THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER IN THIS AGREEMENT AND THE
OTHER AGREEMENTS ENTERED INTO BY AND BETWEEN BUYER AND SELLER AS OF THE CLOSING
DATE, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO,

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CONCERNING OR WITH RESPECT TO: (1) THE NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (2) THE
INCOME TO BE DERIVED FROM THE PROPERTY; (3) THE SUITABILITY OF THE PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY CONDUCT THEREON; (4) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY;
(5) THE HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY; OR (6) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY. BUYER
SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR WASTES, AS
DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., OR
ANY HAZARDOUS SUBSTANCE, AS DEFINED BY CERCLA AND REGULATIONS PROMULGATED
THEREUNDER.
          EXCEPT WITH RESPECT TO HAZARDOUS MATERIALS THAT WERE DISCHARGED,
RELEASED OR DISPOSED BY SELLER OR ITS MEMBERS, MANAGERS, PARTNERS, DIRECTORS,
OFFICERS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES, AGENTS, EMPLOYEES AND
REPRESENTATIVES IN VIOLATION OF APPLICABLE ENVIRONMENTAL LAWS AS OF THE DATE OF
SUCH DISCHARGE, DISPOSAL OR RELEASE, BUYER, ITS SUCCESSORS AND ASSIGNS, HEREBY
WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION
OR CLAIM FOR CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER (COLLECTIVELY
OR INDIVIDUALLY) OR ITS RELATED ENTITIES, AND ITS AND THEIR MEMBERS, MANAGERS,
PARTNERS, DIRECTORS, OFFICERS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES, AGENTS,
EMPLOYEES, REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, “SELLER
AND ITS AFFILIATES”) BASED ON, (x) ANY FEDERAL, STATE, OR LOCAL ENVIRONMENTAL OR
HEALTH AND SAFETY LAW OR REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT,
OR ANY SIMILAR LAW NOW EXISTING OR HEREAFTER ENACTED; (y) ANY DISCHARGE,
DISPOSAL, RELEASE, OR ESCAPE OF ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON,
AT, TO, OR FROM THE PROPERTY; OR (z) ANY CONDITIONS WHATSOEVER ON, IN, UNDER, OR
IN THE VICINITY OF THE PROPERTY. EXCEPT WITH RESPECT TO ANY CLAIMS ARISING OUT
OF ANY BREACH OF COVENANTS, REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN
THIS AGREEMENT OR THE DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT,
BUYER, ON BEHALF OF ITSELF AND ITS PARTNERS, MEMBERS, MANAGERS, DIRECTORS,
OFFICERS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES, AGENTS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS HEREBY RELEASES, SELLER AND ITS
AFFILIATES, FROM ANY AND ALL CLAIMS OF ANY KIND WHATSOEVER, KNOWN OR UNKNOWN,
WITH RESPECT TO ANY ASPECT OF THE PROPERTY, INCLUDING THE FOREGOING MATTERS, AND
SPECIFICALLY WAIVES WITH RESPECT TO ALL SUCH MATTERS THE PROVISIONS OF
CALIFORNIA CIVIL CODE SECTION 1542, AND ANY COMPARABLE LAW APPLICABLE IN THE
STATE WHERE THE PROPERTY IS LOCATED, REGARDING THE MATTERS COVERED BY A GENERAL
RELEASE, WHICH PROVIDES AS FOLLOWS:

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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
BUYER AND SELLER REPRESENT AND ACKNOWLEDGE THAT THIS SECTION 8 WAS EXPLICITLY
NEGOTIATED AND BARGAINED FOR AS A MATERIAL PART OF BUYER’S CONSIDERATION BEING
PAID. Terms appearing in this Section 8 in all capital letters that have been
defined elsewhere in this Agreement shall have the meanings set forth in such
definitions.
9. Conditions to Closing.
     9.1 Buyer’s Conditions to Closing. Buyer’s obligation to purchase the
Property is conditioned upon the satisfaction of each of the following
conditions each of which is for the exclusive benefit of Buyer. Buyer may, at
any time or times before the Closing, waive one or more of the following
conditions, but only in writing and any such waiver will not affect its rights
and remedies with respect to the remaining conditions:
          (a) Buyer shall have received the requisite Tenant Estoppels as and
when required under Section 4.5(b). If Buyer has not received the requisite
Tenant Estoppels at least six (6) business days prior to the Closing Date, Buyer
shall have the one-time right to extend the Closing Date by an additional two
(2) business days by delivering written notice of Buyer’s exercise of such right
to Seller no later than the date five (5) business days prior to the Closing
Date. If Buyer timely exercises such right, the Closing Date shall be extended
by two (2) business days.
          (b) The Rent Roll and Delinquency Report (as defined in
Sections 11.1(h) and 11.1(i) below) shall have been updated to a date not
earlier than three (3) business days prior to the Closing Date, and such updated
Rent Roll and Delinquency Report shall not identify any material adverse change
(with a change being deemed to be material and adverse only if the change would
expose Buyer to damages or a loss of income in excess of Thirty-Five Thousand
and No/100ths Dollars ($35,000)) in the aggregate as to all Leases with the
Government Tenants and Major Non-Governmental Tenants as compared to the status
of such Leases as shown on the Rent Roll and Delinquency Report delivered to
Buyer two (2) business days prior to the expiration of the Due Diligence Period
pursuant to Sections 11.1(h) and 11.1(i) below;
          (c) No Government Tenant or Major Non-Government Tenant shall have
notified Seller or Buyer of any material adverse change in its Tenant Estoppel
(with a change being deemed to be material and adverse only if the change would
expose Buyer to damages or a loss of income in excess of Thirty-Five Thousand
and No/100ths Dollars ($35,000) in the aggregate as to all such Tenant
Estoppels); no proceedings under any federal or state bankruptcy or insolvency
laws have been commenced by or against any of the Major Non-Government Tenants
that have not been terminated; no general assignment for the benefit of
creditors has

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been made by any of the Major Non-Government Tenants; and no trustee or receiver
of any of the Major Non-Government Tenants’ property has been appointed;
          (d) Seller’s performance of all its obligations hereunder;
          (e) The truth, completeness and accuracy, in all material respects, of
each representation and warranty made by Seller as of the Contract Date and the
Closing; and
          (f) The issuance at Closing of the Title Policy.
          (g) Delivery of the fully executed amendments (the “State Lease
Amendments”) to each of the Leases with the State of California, acting by and
through the Director of the Department of General Services, extending the term
of such Leases, with such extension term commencing on the date the amendments
are executed, for an additional eight (8) years (Buyer acknowledging that after
the 53rd month of such extension term the State will have an ongoing termination
right exercisable with thirty (30) days notice).
     9.2 Seller’s Conditions. Seller’s obligation to sell the Property is
conditioned upon the satisfaction of each of the following conditions, each of
which is for the exclusive benefit of Seller. Seller may, at any time before the
Closing, waive one or more of the following conditions, but only in writing and
any such waiver will not affect its rights and remedies with respect to the
remaining conditions:
          (a) The performance by Buyer of all its obligations hereunder; and
          (b) The truth, completeness and accuracy, in all material respects, of
each representation and warranty made by Buyer as of the Contract Date and the
Closing.
     9.3 Seller Default. If, at the Closing, (i) Seller is in default of any of
its obligations hereunder, or (ii) any of Seller’s representations or warranties
set forth in Section 11.1 are untrue, inaccurate or incorrect when given, in any
material respect, or (iii) the Closing otherwise fails to occur by reason of
Seller’s failure or refusal to perform its obligations hereunder in a prompt and
timely manner, and any such circumstance described in any of clauses (i),
(ii) or (iii) continues for five (5) business days after written notice from
Buyer to Seller, which written notice shall detail such default, untruth or
failure, as applicable, then Buyer shall have the right, to elect, as its sole
and exclusive remedy, to (a) terminate this Agreement by written notice to
Seller, promptly after which (A) the Deposit and all interest earned thereon
shall be returned to Buyer, and (B) Seller shall pay to Buyer any title, escrow,
legal and inspection fees incurred by Buyer and any other expenses incurred by
Buyer in connection with its review of the Property, and the negotiation,
documentation and performance of this Agreement (including, without limitation,
the fees and expenses of environmental and engineering consultants, legal and
accounting fees and expenses, and other out-of-pocket third party charges
related to the transactions contemplated by this Agreement and their
consummation), subject to a cap of $125,000 (collectively, “Buyer’s Costs”), in
which case, the parties shall have no further rights or obligations hereunder
except for obligations which expressly survive the termination of this
Agreement, or (b) waive the condition and proceed to Closing, or (c) seek
specific performance

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of this Agreement by Seller. As a condition precedent to Buyer exercising any
right it may have to bring an action for specific performance hereunder, Buyer
must commence such an action within ninety (90) days after the occurrence of
Seller’s default. Buyer agrees that its failure to timely commence such an
action for specific performance within such ninety (90) day period shall be
deemed a waiver by it of its right to commence an action for specific
performance as well as a waiver by it of any right it may have to file or record
a notice of lis pendens or notice of pendency of action or similar notice
against any portion of the Property. Notwithstanding the foregoing, if by
Seller’s affirmative acts the remedy of specific performance has been rendered
unavailable to Buyer, Buyer shall have and may assert against Seller as a result
of Seller’s default under this Agreement, any and all rights available at law
and in equity, without imposition of the limitations in this Agreement on
Buyer’s rights, remedies or damages.
10. Closing.
     10.1 Closing Date. The consummation of the purchase and sale of the
Property (the “Closing”) shall be held at the offices of the Title Company (or
at such other location as the parties may agree) on January 19, 2011 (the
“Closing Date”). Buyer acknowledges that Seller is required to defease the
existing securitized loan that is currently secured by a deed of trust on the
Property (the “Existing Loan”) in order to deliver title to the Property free
and clear of the lien of such deed of trust (the “Existing Deed of Trust”). In
connection with such defeasance, Buyer agrees to cooperate in good faith with
all usual and customary requirements imposed by the master loan servicer, bond
trustee and ratings agency for such defeasance transaction so long as Buyer is
not required to incur any additional liability or expense in so doing. The
parties acknowledge that, in light of the defeasance, the Grant Deed (as defined
below) will be recorded, and the Seller’s proceeds will be disbursed, one day
after the Closing Date. Seller may extend the Closing Date by up to three
(3) business days to accommodate such defeasance. Seller shall be solely
responsible for any and all costs, fees and expenses in connection with such
defeasance, and any yield maintenance or other premiums or payments required in
connection with such defeasance. The defeasance of the Existing Loan shall not
be a condition to Seller’s obligation to close the Escrow.
     10.2 Seller’s Deposits Into Escrow. Seller shall deposit the following
documents and items into escrow at least one (1) business day prior to the
Closing Date:
          (a) a duly executed and acknowledged grant deed conveying the Property
and Improvements to Buyer in the form of the attached Exhibit F, together with a
separate transfer tax affidavit (the “Grant Deed”);
          (b) a duly executed bill of sale and general assignment, in the form
of the attached Exhibit G (the “Assignment”), transferring the Personal
Property, Leases, Service Contracts, Approvals, Warranties and Intangible
Property to Buyer;
          (c) an affidavit in the form of the attached Exhibit H stating that
Seller is not a “foreign person” under IRC Section 1445(f)(3);

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          (d) tenant notice letters for all tenants at the Property informing
them of the sale of the Property and assignment of the Leases to Buyer, in the
form of attached Exhibit I;
          (e) a duly executed affidavit in the form required by the California
Franchise Tax Board certifying that no withholding of any amount of the Purchase
Price is required in connection with the Closing;
          (f) Seller’s share of the closing costs as described in Section 10.5
below or instructions to Title Company to deduct same from the Purchase Price;
          (g) an owner’s title affidavit in the form of the attached Exhibit J;
          (h) the Rent Roll, updated to a date no earlier than three
(3) business days prior to the Closing Date, certified by Seller as true and
correct;
          (i) A certification that all of the representations and warranties set
forth in Section 11.1 remain true, complete and accurate, except to the extent
of any exceptions to such representations and warranties identified in such
certification; and
          (j) such other documents as may reasonably be required to complete the
Closing.
     10.3 Seller’s Deliveries to Buyer Outside of Escrow. Seller shall deliver
to Buyer at the Property (except as otherwise provided below) on or before the
Closing Date, all of the following:
          (a) originals, to the extent in Seller’s possession or control, or
copies of the Leases and the Service Contracts, which copies are certified by
Seller as true and correct;
          (b) the original Estoppel Certificates, duly executed by the Tenants,
which shall be delivered to Buyer’s counsel, James Moore of Boutin Jones Inc.;
          (c) all keys and security codes to the Property;
          (d) electronic or hard copies of all Documents; and
          (e) originals or copies of all Lease files and Property files,
including all records, instruments and correspondence related to maintenance and
repair, the Tenants, the Leases, construction and alteration of the Improvements
(base building and tenant improvements), and operation of the Property, to the
extent such files are located at the Real Property.
     10.4 Buyer’s Deposits into Escrow. Buyer shall deposit the following into
escrow at least one (1) business day prior to the Closing Date:
          (a) the balance of the Purchase Price in immediately available funds;

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          (b) Buyer’s share of the closing costs as described in Section 10.5.
below;
          (c) two original duly executed counterparts of the Assignment; and
          (d) such other documents as may reasonably be required to complete the
Closing.
     10.5 Adjustment and Proration. All accounts receivable and all accounts
payable shall be prorated between Buyer and Seller as of 12:01 a.m. on the
Closing Date, on the basis of a 365-day year, with Seller entitled to all
accounts receivable and responsible for all accounts payable with respect to the
period prior to such date and time, and with Buyer entitled to all accounts
receivable and responsible for all accounts payable with respect to the period
from and after such date and time. Prior to Closing, Seller shall prepare for
review, comment and agreement by Buyer a proration statement for the Property,
and each party shall be credited or charged at the Closing, in accordance with
the following:
          (a) Accounts Receivable. Seller shall account to Buyer for any Rents
actually collected by Seller for the month in which the Closing occurs, and
Buyer shall be credited for its pro rata share applicable to the period from and
after the Closing Date. For purposes of this Agreement, the term “Rents” means
and includes Fixed Rents and Additional Rents; “Fixed Rents” means the periodic
fixed rent payable by a Tenant under its Lease; and “Additional Rents” means all
amounts, other than Fixed Rents, due from any Tenant under any Lease, including
without limitation, percentage rents, escalation charges for real estate taxes,
parking charges, marketing fund charges, reimbursement of operating expenses or
common area expenses, maintenance escalation rents or charges, cost of living
increases or other charges of a similar nature, if any, and any additional
charges and expenses payable under any Lease.
          (b) Accounts Payable. For purposes of this Agreement, the term
“Expenses” means all operating expenses normal to the operation and maintenance
of the Property, including without limitation real property taxes and
assessments, current installments of any improvement bonds or assessments which
are a lien on the Property or which are pending and may become a lien on the
Property, water, sewer and utility charges, amounts payable under any Service
Contract for any period in which the Closing occurs, permits, licenses and
inspection fees. Expenses shall not include expenses which are of a capital
nature.
               (i) Prepaid Expenses. To the extent Expenses have been paid prior
to the Closing Date for any part of the period on or after the Closing Date,
Seller shall account to Buyer for such prepaid Expenses, and Seller shall be
credited for the amount of such prepaid expenses applicable to the period after
the Closing Date.
               (ii) Unpaid Expenses. To the extent Expenses relating to the
period prior to the Closing Date are unpaid as of the Closing Date but are
ascertainable, Buyer shall be credited for Seller’s pro rata share of such
Expenses for the period prior to the Closing Date.
               (iii) Service Contracts. Payments due under any Service Contracts
shall be prorated as of the Closing Date, and Buyer shall be liable for all
payments accruing

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thereunder after the Closing. Seller shall be responsible for all payments under
all contracts and agreements not assumed by Buyer
          (c) Property Taxes. Seller shall be responsible for all real and
personal property ad valorem taxes and special assessments applicable to the
period prior to the Closing Date; Buyer shall be responsible for all real and
personal property ad valorem taxes and special assessments applicable to the
period from and after the Closing Date. With respect to any property tax appeal
or reassessment filed by Seller for the current tax year or tax years (or
portions thereof) prior to the Closing, Seller shall be entitled to the full
amount of any refund or rebate resulting therefrom applicable to the period
before the Closing Date, except to the extent such amounts are payable to, or
otherwise accrue to the benefit of, the Tenants pursuant to the Leases, which
amounts Seller shall promptly refund to such Tenants.
          (d) Utility Charges. All utility (including electricity, gas, water,
sewer and telephone) charges will be prorated to the Closing Date as Expenses.
All refundable utility security deposits, if any, will be retained by Seller.
          (e) Government Tenants. Buyer acknowledges that the Government Tenants
pay Rents in arrears. Accordingly, Seller shall receive a credit at Closing for
the Rents that accrue under the Leases of the Government Tenants in the month
that Closing occurs, to the extent any rents accrue under such Leases.
          (f) Molina Rents and Reimbursements. If, as of the Closing Date,
Seller is due any amounts from Molina under its Lease that are ascertainable,
Seller shall receive a credit at Closing for such amounts. Likewise, if any
amounts are due and owing from Seller to Molina at Closing, Seller shall pay
such amounts to Molina at or before Closing. Any amounts that are due and owing
from Seller to Molina after Closing shall be paid by Seller to Molina as and
when such amounts come due, after deduction for all amounts then due and owing
to Seller by Molina or Buyer.
          (g) Post-Closing. If the amount of any proration cannot be determined
at the Closing, the adjustments will be made between the parties as soon after
Closing as possible, as follows:
               (i) Non-delinquent Rents. If after the Closing either Buyer or
Seller collects any non-delinquent Rents applicable to the month in which the
Closing occurred (or if Seller collects any Rents applicable to any month
following the month in which the Closing occurred), such Rents shall be prorated
as of the Closing Date and paid to the party entitled thereto not later than
five (5) business days following receipt, except to the extent such party
received a credit at Closing for such Rents.
               (ii) Delinquent Rents for Month in which the Closing Occurred. If
after the Closing Date either Buyer or Seller receives from any Tenant Rents
that were delinquent as of the Closing Date and that relate to the rental period
in which the Closing occurred, then such Rents shall be applied in the following
order of priority: First, to reimburse Buyer for all out-of-pocket third-party
collection costs actually incurred by Buyer in collecting

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such Rents; second, to satisfy such Tenant’s Rent obligations relating to the
period after the Closing Date; and third, to satisfy such delinquent Rent
obligations relating to the period prior to the Closing Date. Buyer agrees to
use commercially reasonable efforts to collect any such delinquent rents but
Buyer has no obligation to institute any collection action or otherwise incur
any material cost in connection therewith. Seller shall have no right to pursue
or continue the collection of such delinquent Rents from any Tenant in occupancy
as of the Closing Date, but Seller shall have the right to continue to prosecute
any collection proceedings that were initiated prior to the Closing against any
tenant no longer in occupancy as of the Closing Date. Notwithstanding the
foregoing, if Molina owes any Rents for any period prior to Closing for which
Seller did not receive a credit at Closing, Buyer shall pay all Rents received
from Molina to Seller until such Rents owed to Seller have been paid in full.
               (iii) Expenses. With respect to any invoice received by Buyer or
Seller after the Closing Date for Expenses that relate to the period in which
the Closing occurred, the party receiving such invoice shall give the other
party written notice of such invoice, and the other party shall have thirty days
to review and approve the accuracy of any such invoice. If the parties agree
that the Invoice is accurate and should be paid, the parties shall compute each
party’s pro rata share, and deliver a check for that amount in favor of the
vendor.
          (h) Survival of Obligations. The obligations of Seller and Buyer under
this Section 10.5 shall survive the Closing.
     10.6 Items Not to be Prorated. There shall be no prorations or adjustments
of any kind with respect to:
          (a) Insurance Premiums. Insurance Premiums shall not be prorated.
Seller will terminate its coverages as of the Closing Date, and Buyer shall be
responsible for obtaining its own coverages as of the Closing Date.
          (b) Delinquent Fixed Rents for Full Months Prior to the Month in which
the Closing Occurred. Delinquent Fixed Rents with respect to Tenants under the
Leases applicable to months prior to the calendar month in which the Closing
occurred shall remain the property of Seller, and Buyer shall have no claim
thereto whether collected by Seller or Buyer, before or after the Closing, and
no responsibility of any kind with respect thereto except as specifically set
forth herein. Seller shall not take or continue to take collection measures from
or after the Closing. Buyer agrees to use commercially reasonable efforts to
collect any delinquent Fixed Rents owed Seller, but Buyer has no obligation to
institute any collection action or otherwise incur any material costs in
connection therewith. Except with respect to the Rents collected from Molina,
Fixed Rents collected from Tenants after the Closing Date shall be applied in
the following order of priority: First, to reimburse Buyer for all out-of-pocket
third-party collection costs actually incurred by Buyer in collecting such
Rents; second, to satisfy such Tenant’s Rent obligations relating to the period
after the Closing Date; and third, to satisfy such delinquent Rent obligations
relating to periods prior to the Closing Date. In the event that Buyer collects
any such delinquent Fixed Rents, Buyer shall apply such Fixed Rents as
contemplated above and shall promptly pay over to Seller any amounts properly
owed to Seller.

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          (c) Additional Rents Relating to Full or Partial Months Prior to the
Closing Date. If Additional Rents relating to full or partial months prior to
the Closing Date are not finally adjusted between Seller and any Tenant until
after the Closing Date, then any refund to which any Tenant may be entitled
shall be the obligation of Seller, and any additional amounts due from the
Tenant for such period shall be the property of Seller. Buyer shall have no
obligation with respect to any such refund due to any Tenant and no claim to any
such amounts due from any Tenant, except that Buyer shall promptly pay to Seller
any such delinquent Additional Rent amounts as it actually collects. If Seller
receives any refund of expenses paid prior to the Closing and relating to a
period prior to the Closing, and such expenses were reimbursed in whole or in
part by any Tenant, Seller shall refund to each Tenant its share of any such
refund. Buyer agrees to use commercially reasonable efforts to collect any such
Additional Rents but Buyer has no obligation to institute any collection action
or otherwise incur any material cost in connection therewith.
          (d) Security Deposits. Seller shall deliver to Buyer (or credit to
Buyer at Closing) all prepaid rents, security deposits, letters of credit and
other collateral actually held by Seller or any of its affiliates or successors
in interest under any of the Leases, to the extent not applied by Seller prior
to the Closing Date to the extent permitted under the Leases. From and after the
Contract Date, Seller shall not apply any security deposits without the Buyer’s
prior written consent.
          (e) Survival. The terms of Section 10.6 shall survive the Closing.
     10.7 Closing Costs. The Closing costs for this transaction shall be paid as
follows:
          (a) Seller shall pay (i) any brokerage fees to the Selling Broker as
required under Section 18.7 below; (ii) one-half of all transfer and sales taxes
(including documentary transfer taxes); (iii) all costs, expenses and fees
related to the defeasance of the Existing Loan; (iv) the cost of the Title
Policy, up to but not to exceed an amount equal to the cost of owner’s standard
CLTA coverage title insurance in the amount of the Purchase Price; (v) one-half
of the escrow fees; and (vi) all other costs and expenses allocated to Seller
pursuant to this Agreement.
          (b) Buyer shall pay (i) any brokerage fees to the Buying Broker as
required under Section 18.7 below; (ii) one half of all transfer and sales taxes
(including documentary transfer taxes); (iii) the increased cost of the Title
Policy associated with ALTA extended coverage and endorsements requested by
Buyer (except for “gap” coverage); (iv) all recording fees (other than in
connection with any documents recorded in connection with the defeasance of the
Existing Loan); (v) one-half of the escrow fees; and (vi) all other costs and
expenses allocated to Buyer pursuant to this Agreement.
          (c) All other costs shall be paid in accordance with customary
practices in the County of Los Angeles.
     10.8 Closing. Pursuant to Section 10.1 above, Title Company shall close the
escrow for this transaction when it is in a position to issue the Title Policy
and has received from Seller

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and Buyer the items required of each in Sections 10.2 and 10.4 above. Title
Company shall close escrow by doing the following:
          (a) Recording the Grant Deed in the Official Records of the County of
Los Angeles;
          (b) Delivering to Buyer the Title Policy, the original documents and
items listed in Section 10.2 above, and a closing statement for the escrow
consistent with this Agreement and signed by Buyer and Seller (the “Closing
Statement”), and any refund due Buyer; and
          (c) Delivering to Seller the amount due Seller as shown on the Closing
Statement, the original documents listed in Section 10.4 above, and a signed
original of Seller’s Closing Statement.
     10.9 Possession. Seller shall deliver possession of the Property to Buyer
on the Closing Date, subject to the rights of the Tenants under the Leases.
11. Representations and Warranties.
     11.1 Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Buyer, which representations and
warranties shall survive the Closing, and all of which (i) are material and are
being relied upon by Buyer, and (ii) are true, complete and accurate as of the
date hereof.
          (a) Organization. Seller is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and qualified to do business, and in good standing, in the State of
California.
          (b) Authorization. This Agreement has been duly authorized, executed,
and delivered by Seller; the obligations of Seller under this Agreement are
legal, valid, and binding obligations of Seller; and this Agreement does not,
and at the time of Closing will not, (i) violate or conflict with the
organizational documents of Seller or any member of Seller acting on Seller’s
behalf, (ii) violate or conflict with any judgment, decree, or order of any
court applicable to or affecting Seller, (iii) breach the provisions of, or
constitute a default under, any contract, agreement, instrument, or obligation
to which Seller is a party or by which Seller is bound, or (iv) violate or
conflict with any law, ordinance, or governmental regulation or permit
applicable to Seller. All documents that are executed by Seller and that are
delivered to Buyer at the Closing will be, at the time of Closing, duly
authorized, executed, and delivered by Seller; the obligations of Seller under
such documents will be, at the time of Closing, legal, valid, and binding
obligations of Seller; and such documents will not, at the time of Closing,
(i) violate or conflict with the organizational documents of Seller or any
member of Seller acting on Seller’s behalf, (ii) violate or conflict with any
judgment, decree, or order of any court applicable to or affecting Seller,
(iii) breach the provisions of, or constitute a default under, any contract,
agreement, instrument, or obligation to which Seller is a party or by which
Seller is bound, or

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(iv) violate or conflict with any law, ordinance, or governmental regulation or
permit applicable to Seller.
          (c) Bankruptcy. No proceedings under any federal or state bankruptcy
or insolvency laws have been commenced by or against Seller which have not been
terminated; no general assignment for the benefit of creditors has been made by
Seller; and no trustee or receiver of Seller’s property has been appointed.
          (d) Not a Foreign Person. Seller is not a foreign person within the
meaning of section 1445(f)(3) of the Internal Revenue Code of 1986. Seller has
read and understands the provisions of sections 18662 and 18668 of the
California Revenue and Tax Code (the “Act”) and has a “permanent place of
business” within California within the meaning of the Act and the regulations
and guidelines of the California Franchise Tax Board promulgated from time to
time pursuant thereto.
          (e) Litigation. Except as disclosed in writing to Buyer, no litigation
or proceeding is pending or, to Seller’s knowledge, threatened that affects the
Property or Seller’s ability to consummate the transactions contemplated by this
Agreement.
          (f) Violations. Except as disclosed in writing to Buyer, Seller has
not received any written notice of any violation by the Property of any
applicable rule, regulation, ordinance or government directive from any
administrative or governmental authority that has not been cured.
          (g) Leases; Landlord Defaults. There are no leases, rental agreements,
license agreements or occupancy rights affecting the Property other than those
listed on Exhibit C and any matters of record. Seller has not received any
written notice of a default by Seller from any Tenant under any of the Leases
that has not been cured, other than as set forth in the Tenant Estoppels.
          (h) Rent Roll. Exhibit C contains a complete and correct list of all
existing Leases, setting forth with respect to each Lease, the following minimum
information (the “Rent Roll”): the name of the Tenant, the number of the room or
suite occupied by the Tenant, the square footage of the space, the commencement
and expiration dates, the amount of the monthly base rent payment, the current
monthly additional rent payment for the Tenant share of Real Property expenses
and taxes, the amount of any security deposit or prepaid rent, and the amount
and due date of any payments due Tenants in the future as reimbursement for
costs of tenant improvements. Seller shall deliver an updated Rent Roll to Buyer
two (2) business days prior to the expiration of the Due Diligence Period, which
shall be accurate as of the date set forth on the updated Rent Roll (which date
shall not be more than three (3) business days prior to the date the updated
Rent Roll is delivered to Buyer). Seller shall deliver a further updated Rent
Roll to Buyer three (3) business days prior to the Closing Date, which shall be
accurate as of the date set forth on the updated Rent Roll (which date shall not
be more than three (3) business days prior to the date the updated Rent Roll is
delivered to Buyer).

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          (i) Delinquency Report. With the exception of delinquencies in the
payment of rents which are set forth on the Rent Roll, Seller has not delivered
written notice to any Tenant of any default in the payment of rent under its
Lease that has not been cured. Exhibit C contains a true and correct report (the
“Delinquency Report”) showing the name of each Tenant as to which a delinquency
currently exists as to the payment of Rents and specifying the amount of each
such delinquency, and the period of time during which each such delinquency has
been outstanding. Seller shall deliver an updated Delinquency Report to Buyer
two (2) business days prior to the expiration of the Due Diligence Period, which
shall be accurate as of the date set forth on the updated Delinquency Report
(which date shall not be more than three (3) business days prior to the date the
updated Delinquency Report is delivered to Buyer). Seller shall deliver a
further updated Delinquency Report to Buyer three (3) business days prior to the
Closing Date, which shall be accurate as of the date set forth on the updated
Delinquency Report (which date shall not be more than three (3) business days
prior to the date the updated Delinquency Report is delivered to Buyer).
          (j) Leases. The Documents contain a true, correct and complete copy of
each Lease. Each such Lease constitutes the entire agreement between Seller and
each other party thereto. As of the Closing Date, no rents due under, or any
other interest in, any of the Leases will be assigned to any party other than
Buyer, or otherwise pledged or encumbered in any way.
          (k) Tenant Improvements; Lease Costs. Except as set forth in
Exhibit C, all of the improvements to be constructed by Seller under each of the
Leases, have been fully completed and paid for. Except as set forth in
Exhibit C, Seller has paid, in full, any leasing commissions, except for future
contingent obligations set forth in the Rent Roll.
          (l) Service Contracts. Exhibit E contains a true and complete list of
all Service Contracts. The Documents include true and complete copies of all
Service Contracts. To Seller’s knowledge, there have been no material defaults
by any Party to a Service Contract which have not been cured. To Seller’s
knowledge, Seller is not in breach or default under any Service Contract which
has not been cured. The Service Contracts constitute the entire agreement
between Seller and the other parties to the Service Contracts.
          (m) Insurance. Exhibit L correctly identifies the policies of casualty
and liability insurance currently in effect with respect to the Property. All
premiums for such insurance have been paid in full. Seller has not received any
notice or request from any insurance company or Board of Fire Underwriters (or
organization exercising functions similar thereto) canceling or threatening to
cancel any of said policies or denying or disputing coverage thereunder.
          (n) Commission Agreements. Except as expressly set forth in the Leases
or on Exhibit C, there are no lease brokerage agreements, leasing commission
agreements or other agreements providing for payments of any amounts for leasing
activities or procuring tenants with respect to the Property, other than such
commissions as may be due on future lease renewals, expansions or extensions.

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

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For purposes of the representations and warranties given by Seller in this
Agreement, the phrase “to Seller’s knowledge” or other terms regarding the
knowledge of Seller, shall mean the actual, current knowledge of Kennard P.
Perry and Cory Kristoff, excluding constructive or imputed knowledge or duty of
inquiry, existing as of the Contract Date and the Closing. In no event shall
there be any personal liability on the part of any of the foregoing individuals
on account of any breach of any representation or warranty of Seller herein.
     11.2 Material Changes; Survival. Two (2) business days prior to the
expiration of the Due Diligence Period, Seller shall deliver to Buyer a
certification that all of the representations and warranties set forth in
Section 11.1 remain true, complete and accurate, except to the extent of any
exceptions to such representations and warranties identified in such
certification. Further, if, prior to the Closing, Seller becomes aware of any
fact or circumstance that would materially change a representation or warranty
of Seller in this Agreement, then Seller shall promptly, and in all events at
least five (5) business days prior to the Closing Date (which date shall be
extended if necessary to give Buyer five business days to review such material
change), give written notice of such changed fact or circumstance to Buyer. If,
prior to Closing, upon Seller’s notice or otherwise, Buyer becomes aware of the
material untruth or inaccuracy of, or facts or circumstances that would change
materially, any representation or warranty of Seller in this Agreement that was
true when made by Seller, then Buyer shall have the option of: (i) waiving such
breach of representation or warranty or material adverse change and completing
its purchase of the Property pursuant to this Agreement; (ii) reaching agreement
with Seller to adjust the terms of this Agreement to compensate Buyer for such
change; or (iii) terminating this Agreement and receiving the return of the
Deposit as Buyer’s sole remedy prior to Closing. All of Seller’s representations
and warranties shall survive the Closing; provided, however, that Seller’s
representations and warranties set forth in Sections 11.1(d) through 11.1(i)
shall survive the Closing only with respect to written claims alleging a
specific breach of one or more of those representations and warranties received
by Seller prior to the first anniversary of the Closing Date. Buyer shall not be
entitled to any right or remedy for any inaccuracy in or breach of any
representation, warranty or covenant under this Agreement or any conveyance
document unless the amount of damages, in the aggregate, proximately caused by
all such breaches or inaccuracies exceeds Fifty Thousand and No/100ths Dollars
($50,000). If Buyer’s aggregate damages exceed Fifty Thousand and No/100ths
Dollars ($50,000), Buyer shall be entitled to recover the entire first Fifty
Thousand and No/100ths Dollars ($50,000) of damages suffered by Buyer.
Notwithstanding anything to the contrary in this Agreement the aggregate
liability of Seller under this Agreement to Buyer for any and all actions or
claims by Buyer with respect to these representations and warranties that
survive the Closing shall be limited to One Million Five Hundred Thousand
Dollars ($1,500,000).
     11.3 Representations and Warranties of Buyer. Buyer hereby makes the
following representations and warranties to Seller, which representations and
warranties shall survive the Closing and all of which (i) are material and are
being relied upon by Seller, (ii) are true, complete and accurate in all
respects as of the date hereof and shall be true, complete and accurate as of
the Closing Date, and (iii) shall survive the Closing:

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          (a) Organization. Buyer is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is qualified to do business, and is in good standing, in the State
of California.
          (b) Authorization. This Agreement has been duly authorized, executed,
and delivered by Buyer; the obligations of Buyer under this Agreement are legal,
valid, and binding obligations of Buyer; and this Agreement does not, and at the
time of Closing will not, (i) violate or conflict with the organizational
documents of Buyer or any member of Buyer acting on Buyer’s behalf, (ii) violate
or conflict with any judgment, decree, or order of any court applicable to or
affecting Buyer, (iii) breach the provisions of, or constitute a default under,
any contract, agreement, instrument, or obligation to which Buyer is a party or
by which Buyer is bound, or (iv) violate or conflict with any law, ordinance, or
governmental regulation or permit applicable to Buyer. All documents that are
delivered to Seller at the Closing will be, at the time of Closing, duly
authorized, executed, and delivered by Buyer; the obligations of Buyer under
such documents will be, at the time of Closing, legal, valid, and binding
obligations of Buyer; and such documents will not, at the time of Closing,
(i) violate or conflict with the organizational documents of Buyer or any member
of Buyer acting on Buyer’s behalf, (ii) violate or conflict with any judgment,
decree, or order of any court applicable to or affecting Buyer, (iii) breach the
provisions of, or constitute a default under, any contract, agreement,
instrument, or obligation to which Buyer is a party or by which Buyer is bound,
or (iv) violate or conflict with any law, ordinance, or governmental regulation
or permit applicable to Buyer.
          (c) Bankruptcy. No proceedings under any federal or state bankruptcy
or insolvency laws have been commenced by or against Buyer which have not been
terminated; no general assignment for the benefit of creditors has been made by
Buyer; and no trustee or receiver of Buyer’s property has been appointed.
12. Risk of Loss; Insurance Proceeds; Condemnation.
     12.1 Damage or Destruction. In the event of damage or destruction of the
Improvements that occurs prior to the Closing Date that (i) would require the
expenditure of an amount less than one percent (1%) of the Purchase Price to
repair, and (ii) does not permit any Government Tenant or Major Non-Government
Tenant to terminate its Lease (each of the foregoing events, a “Material Damage
Event”), Buyer and Seller shall consummate this Agreement, and Seller shall
(a) assign to Buyer at Closing all rights to insurance proceeds on account of
such damage or destruction, including any insurance proceeds previously received
by Seller with respect to such damage or destruction, and (b) pay to Buyer the
amount of the deductible or retention applicable to such damage or destruction
under the insurance policy. In the event such damage or destruction results in
or causes a Material Damage Event, Buyer or Seller may elect to terminate this
Agreement by written notice to the other within ten (10) days after the Material
Damage Event. If neither party elects to terminate this Agreement, Seller shall
assign the insurance proceeds and pay the applicable deductible or retention to
Buyer at Closing and Seller shall have no further responsibility to Buyer for
such damage or destruction. If either party elects to terminate this Agreement,
the Deposit and all interest thereon shall be refunded to Buyer and the parties
shall no further obligation to each other except for those obligations which
expressly survive the termination of this Agreement.

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     12.2 Eminent Domain. If, prior to the Closing, a taking by eminent domain
of all or any portion of the Land or Improvements is pending, and such taking
would (i) materially and adversely interfere with the use of the Property for
its current permitted uses, (ii) materially and adversely affect ingress, egress
or parking for the Property or any Tenant’s access to its space, (iii) would
permit the termination of any Lease by any Government Tenant or Major
Non-Government Tenant, or (iv) has a value exceeding one percent (1%) of the
Purchase Price (each a “Material Taking”), Buyer or Seller shall have the right,
by delivering written notice to the other within ten (10) days after Seller
delivers written notice to Buyer of such pending taking, to terminate this
Agreement, in which event the Deposit and all interest thereon shall be returned
to Buyer. If neither party elects to terminate this Agreement or if the taking
would not result in or cause a Material Taking, then this Agreement shall remain
in effect, and Seller shall assign to Buyer at Closing its rights to the
compensation and damages due Seller on account of such taking (and will not
settle any proceedings relating to such taking without Buyer’s prior written
consent) and Seller shall have no further responsibility to Buyer for such
taking. Seller shall promptly (and in any event prior to the Closing) notify
Buyer of any condemnation affecting the Property.
     The provisions of this Section 12 shall supersede the provisions of any
applicable laws with respect to the subject matter of this Section 12.
13. Assignment. Buyer may not, at any time, assign this Agreement or Buyer’s
rights or obligations under this Agreement, either directly or indirectly,
without the prior written consent of Seller, which Seller may withhold in its
sole and absolute discretion. Subject to the foregoing, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective heirs, devisees, executors, administrators, legal
representatives, successors and assigns. In connection with any approved
assignment, the assignee shall assume the assignor’s obligations hereunder, but
assignor shall nevertheless remain liable therefor.
14. Seller’s Covenants During Contract Period. Between Seller’s execution of
this Agreement and the Closing, or earlier termination of this Agreement as
permitted hereunder, Seller shall (i) maintain the Property in good order,
condition and repair, reasonable wear and tear excepted; (ii) not make any
material physical changes to the Improvements; (iii) continue to manage the
Property in the manner in which it is being managed; (iv) not enter into any
contracts or agreements affecting the Property unless such contracts can be
completed or terminated prior to the Closing or Buyer, in its sole discretion,
agrees to assume such contract or agreement as of the Closing Date, in which
case such contracts shall be included within the term “Service Contracts”;
(v) not enter into any lease, amendment of lease or other agreement pertaining
to the Property, or permit any tenant of the Property to enter into any sublease
or assignment of lease, except as provided in Section 14.1; (vi) after the end
of the Due Diligence Period, not offer the Property for sale publicly or
otherwise solicit, make, pursue, negotiate or accept offers for the sale of the
Property to or from any party; (viii) maintain the insurance described on
Exhibit L in full force and effect, except as otherwise approved by Buyer; and
(ix) not dispose of or encumber the Property or any part thereof, except for
dispositions of personal property in the ordinary course of business. From and
after the Contract Date, Seller shall provide Buyer with regular written updates
as to the status of any leasing activity at the Property.

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     14.1 New Leases and Lease Amendments; Lease Expenses.
          (a) If Seller desires to enter into any new lease affecting the
Property (each a “New Lease”) or any termination, amendment, modification,
expansion or renewal of any existing Lease (each, a “Lease Amendment”), after
the Contract Date but prior to Closing, Seller shall provide Buyer with a copy
of the proposed New Lease or Lease Amendment and a copy of the landlord’s
anticipated improvement costs, tenant improvement allowances, brokerage
commissions and out-of-pocket costs and expenses in connection with the New
Lease or Lease Amendment for Buyer’s review and approval, which approval shall
not be unreasonably withheld; provided, however, Buyer shall not have the right
to disapprove any New Lease or Lease Amendment prior to the expiration of the
Due Diligence Period. Buyer shall advise Seller, in writing, whether Buyer
approves or reasonably disapproves such proposed New Lease or Lease Amendment
within three (3) business days after Buyer’s receipt of the proposed New Lease
or Lease Amendment; provided, however, if Buyer fails to notify Seller within
such three (3) business day period, Buyer shall be deemed to have approved the
proposed transaction. If after the expiration of the Due Diligence Period, Buyer
reasonably disapproves of the proposed New Lease or Lease Amendment, Seller
shall not enter into such New Lease or Lease Amendment. If Buyer unreasonably
disapproves of the proposed New Lease or Lease Amendment, Seller shall have the
full right, power and authority to execute such New Lease or Lease Amendment so
long as Seller delivers to Buyer at least three (3) business days’ prior written
notice of such execution; provided, however, that after receipt of such notice,
Buyer shall have the right to terminate this Agreement, upon written notice
delivered to Seller within three (3) business days after receipt of Seller’s
notice of execution of such New Lease or Lease Amendment. If Buyer timely
exercises such termination right, this Agreement shall terminate and the Deposit
and all interest thereon shall be returned to Buyer. In all other events, this
Agreement shall remain in full force and effect. Notwithstanding the foregoing,
Seller acknowledges that it shall not enter into any extension or expansion of
the AECOM Technology Corp. Lease during the term of this Agreement without
Buyer’s approval, which may be withheld at Buyer’s sole discretion.
          (b) New Lease Expenses. If the Closing occurs, Buyer shall assume and
be responsible for (and to the extent previously paid by Seller, reimburse
Seller on the Closing Date for) a pro rata portion of any and all improvement
costs, tenant improvement allowances, brokerage commissions and out-of-pocket
costs and expenses actually paid or incurred by Seller (collectively the “New
Lease Expenses”) arising out of or in connection with those New Leases and Lease
Amendments entered into by Seller pursuant to the foregoing provisions of this
Section 14.1; such pro rata portion shall equal the product of (i) the New Lease
Expenses multiplied by (ii) a fraction, the numerator of which is the number of
months of the lease term of the New Lease (or the number of months of the term
of any exercised extension period provided by any Lease Amendment, as
applicable) remaining as of the Closing Date, and the denominator of which is
the total number of months of such lease term (or exercised extension period, as
applicable). Seller shall be responsible for the remaining pro rata portion of
the New Lease Expenses. All New Leases and Lease Amendments entered into by
Seller pursuant to this Section 14.1 shall be part of the Leases, shall be
deemed included on Exhibit C and shall be assumed by Buyer upon Closing.

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          (c) Existing Lease Expenses. Seller shall be responsible for the cost
of tenant improvement work and leasing commissions required to be paid under or
with respect to all Leases (and amendments thereto) entered into prior to the
Contract Date and the cost of tenant improvement work, leasing commissions
required to be paid under or with respect to the State Lease Amendments and the
scheduled rent-free periods set forth in the State Lease Amendments
(collectively, “Existing Lease Expenses”), and if Seller fails to deliver Buyer
evidence reasonably acceptable to Buyer confirming that such Existing Lease
Expenses have been paid prior to the Approval Date, Seller shall give Buyer a
credit therefore at Closing which shall be calculated as follows: Buyer and
Seller shall attempt to agree on the amount of the credit for such Existing
Lease Expenses during the Due Diligence Period, which amount shall equal 100% of
the anticipated post-Closing Existing Lease Expenses (“Closing Leasing Credit”).
If Seller and Buyer can agree on the Closing Leasing Credit on or before the
Approval Date, such amount shall be credited against the Purchase Price due from
Buyer at Closing. If Seller and Buyer cannot agree on the Closing Leasing Credit
at least five (5) business days prior to the expiration of the Due Diligence
Period, then at least three (3) business days prior to the expiration of the Due
Diligence Period, Seller shall give Buyer written notice of the amount of the
Closing Leasing Credit that Seller is willing to offer. If Buyer timely delivers
the Approval Notice, Buyer shall be deemed to have accepted Seller’s proposed
Closing Leasing Credit and Buyer will proceed with the acquisition of the
Property under the terms of this Agreement. Except as otherwise agreed to by
Seller and Buyer, the Closing Leasing Credit shall constitute Seller’s sole and
only obligations with respect to the Existing Lease Expenses, and as of the
Closing Date Buyer shall assume all such obligations (as to leasing commissions
only, up to the amount set forth for leasing commissions in the Closing Lease
Credit) and indemnify and hold Seller harmless with respect thereto (as to
leasing commissions only, up to the amount set forth for leasing commissions in
the Closing Lease Credit).
15. ARBITRATION OF DISPUTES. IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES
ARISING UNDER OR RELATED TO THIS AGREEMENT, SUCH DISPUTE, SHALL BE RESOLVED BY
BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR. SUCH ARBITRATION MAY BE
INITIATED BY EITHER PARTY BY DELIVERING WRITTEN NOTICE OF INTENT TO ARBITRATE TO
THE OTHER PARTY AND TO THE SAN FRANCISCO OFFICE OF THE AMERICAN ARBITRATION
ASSOCIATION (“AAA”), WHICH NOTICE SHALL DESCRIBE THE DISPUTE AND THE PARTY’S
PROPOSAL FOR RESOLVING THE DISPUTE IN DETAIL. WITHIN THIRTY (30) DAYS AFTER
DELIVERY OF SUCH NOTICE EACH PARTY SHALL PROVIDE ALL RELEVANT DOCUMENTS AND
MATERIALS THAT PERTAIN TO THE DISPUTE. THE PARTIES SHALL FIRST ENDEAVOR TO AGREE
ON THE ARBITRATOR, BUT IF THEY ARE UNABLE TO DO SO WITHIN TEN (10) DAYS AFTER
THE ARBITRATION HAS BEEN INITIATED, THE ARBITRATOR SHALL BE SELECTED, WITHIN
THIRTY (30) DAYS AFTER THE ARBITRATION WAS INITIATED, USING THE AAA PROCEDURES.
THE ARBITRATOR SHALL BE A RETIRED SUPERIOR COURT JUDGE OR A LICENSED, PRACTICING
ATTORNEY WHO IS SUBSTANTIALLY FAMILIAR WITH THE REAL ESTATE LAW, CUSTOM,
PRACTICE, OR PROCEDURE, IN THE AREA IN WHICH THE PROPERTY IS LOCATED, PERTINENT
TO THE DISPUTE BEING ARBITRATED, IN EITHER CASE WITH NOT LESS THAN TWENTY
(20) YEARS CONTINUOUS EXPERIENCE AS A JUDGE AND/OR REAL ESTATE PRACTITIONER. IN

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

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PERFORMANCE, SHALL BE FINAL AND BINDING ON ALL PARTIES AND ENFORCEABLE IN ANY
COURT OF COMPETENT JURISDICTION; PROVIDED, HOWEVER, THAT THE AWARD MAY BE
VACATED OR CORRECTED FOR ANY OF THE REASONS PERMITTED UNDER AND PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 1286.2 OR 1286.6. THE ARBITRATOR
SHALL HAVE NO AUTHORITY TO MODIFY ANY OF THE TERMS OF THIS AGREEMENT. THE FEES
AND EXPENSES OF THE ARBITRATOR AND THE COSTS AND ATTORNEYS’ FEES OF THE
PREVAILING PARTY SHALL BE PAID BY THE PARTY WHO IS NOT THE PREVAILING PARTY, AS
DEFINED IN SECTION 18.6 (ATTORNEYS’ FEES) AND DETERMINED BY THE ARBITRATOR IN
ITS DECISION.
          NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.
          WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION
TO NEUTRAL ARBITRATION

     
 
   
Seller
  Buyer

16. Indemnification. Each party hereby agrees to indemnify, defend, protect and
hold harmless the other party from and against any and all claims, demands,
liabilities, costs and damages, including without limitation, reasonable
attorneys’ fees (collectively, “Claims”) suffered by the other party and
resulting from or arising out of all third-party tort claims and similar claims
of the type that would typically be insured under a Commercial General Liability
Insurance Policy which are based on actions, facts or circumstances existing or
occurring during the indemnifying party’s ownership of the Property, excluding
any Claims related to hazardous substances. All of the indemnifications set
forth in this Section 16 shall survive the Closing and conveyance of the
Property to Buyer.
17. Miscellaneous.
18. Notice. All notices and any other communications permitted or required under
this Agreement must be in writing and will be effective (i) immediately upon
delivery in person or by facsimile, provided delivery is made during regular
business hours or receipt is acknowledged by

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

            Seller:   200 Oceangate, LLC     c/o The Swig Company, LLC     220
Montgomery Street, 20th Floor     San Francisco, CA 94104     Attn: Kennard P.
Perry
 
  Telephone:   (415) 291-1140
 
  Facsimile:   (415) 291-8373
 
  Email:   kperry@swigco.com
 
          with copy to:   Farella Braun + Martel LLP     235 Montgomery Street  
  San Francisco, CA 94104     Attn: Anthony D. Ratner
 
  Telephone:   (415) 954-4448
 
  Facsimile:   (415) 954-4480
 
  Email:   tratner@fbm.com
 
       
  Buyer:
       
 
        Prior to Closing:   Molina Healthcare, Inc.     300 University Avenue,
Suite 100     Sacramento, CA 95825     Attn: General Counsel
 
  Telephone:   (916) 646-9193 x114663
 
  Facsimile:   (916) 646-4572
 
  Email:   Jeff.Barlow@Molinahealthcare.com

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            with copy to:   Boutin Jones Inc.     555 Capitol Mall, Suite 1500  
  Sacramento, CA 95814     Attn: James R. Moore
 
  Telephone:   (916) 321-4444
 
  Facsimile:   (916) 441-7597
 
  Email:   jmoore@boutininc.com     After Closing:   Molina Center LLC     200
Oceangate, Suite 100     Long Beach, CA 90802     Attn: John Molina
 
  Telephone:   (562) 435-3666 x111128
 
  Facsimile:   (562) 495-7770
 
  Email:   John.Molina@Molinahealthcare.com
  with a copy to:
            Molina Healthcare, Inc.     300 University Avenue, Suite 100    
Sacramento, CA 95825     Attn: General Counsel
 
  Telephone:   (916) 646-9193 x114663
 
  Facsimile:   (916) 646-4572
 
  Email:   Jeff.Barlow@Molinahealthcare.com

     18.1 Headings. The headings used herein are for purposes of convenience
only and should not be used in construing the provisions hereof.
     18.2 Covenant of Further Assurances. The parties hereby agree to execute
and deliver such other documents and instruments (including, without limitation,
additional escrow instructions in conformity with this Agreement), and to take
such other actions, whether before or after Closing, as may reasonably be
required and which may be necessary to consummate this transaction and to
otherwise effectuate the agreements of the parties hereto; provided that such
additional documents, instruments, or actions shall not impose upon the parties
any obligations, duties, liabilities or responsibilities which are not expressly
provided for in this Agreement.
     18.3 Entire Agreement. This document represents the final, entire and
complete agreement between the parties with respect to the subject matter hereof
and supersedes all other prior or contemporaneous agreements, communications or
representations, whether oral or written, express or implied, including any
letters of intent, including that certain Confidentiality Agreement 200 & 300
Oceangate by and between Molina and Seller. The parties acknowledge and agree
that they may not and are not relying on any representation, promise,
inducement, or other statement, whether oral or written and by whomever made,
that is not contained expressly in this Agreement. This Agreement may only be
modified by a written instrument signed by representatives authorized to bind
both parties. Oral modifications are unenforceable.

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     18.4 Partial Invalidity. If any term, covenant or condition of this
Agreement or its application to any person or circumstances shall be held to be
illegal, invalid or unenforceable, the remainder of this Agreement or the
application of such term or provisions to other persons or circumstances shall
not be affected, and each term hereof shall be legal, valid and enforceable to
the fullest extent permitted by law, unless an essential purpose of this
Agreement would be defeated by the loss of the illegal, unenforceable, or
invalid provision. In the event of such partial invalidity, the parties shall
seek in good faith to agree on replacing any such legally invalid provisions
with valid provisions which, in effect, will, from an economic viewpoint, most
nearly and fairly approach the effect of the invalid provision and the intent of
the parties in entering into this Agreement.
     18.5 No Waiver. No consent or waiver by either party to or of any breach or
non-performance of any representation, condition, covenant or warranty shall be
enforceable unless in a writing signed by the party entitled to enforce
performance, and such signed consent or waiver shall not be construed as a
consent to or waiver of any other breach or non-performance of the same or any
other representation, condition, covenant, or warranty.
     18.6 Attorneys’ Fees. In the event of any arbitration or litigation between
the parties, whether based on contract, tort or other cause of action or
involving bankruptcy or similar proceedings, in any way related to this
Agreement, the non-prevailing party shall pay to the prevailing party all
reasonable attorneys’ fees and costs and expenses of any type, without
restriction by statute, court rule or otherwise, incurred by the prevailing
party in connection with any action or proceeding (including arbitration
proceedings, any appeals and the enforcement of any judgment or award), whether
or not the dispute is litigated or prosecuted to final judgment. The “prevailing
party” shall be determined based upon an assessment of which party’s major
arguments or positions taken in the action or proceeding could fairly be said to
have prevailed (whether by compromise, settlement, abandonment by the other
party of its claim or defense, final decision, after any appeals, or otherwise)
over the other party’s major arguments or positions on major disputed issues.
     18.7 Brokers and Finders. Neither party has had any contact or dealings
regarding the Property, through any licensed real estate broker or other persons
who can claim a right to a commission or finder’s fee in connection with this
transaction, except for CB Richard Ellis, Inc., representing Seller (the
“Selling Broker”) and McKinney Advisory Group, Inc., representing Buyer (the
“Buying Broker”). The parties agree that Seller shall pay a brokerage commission
to Selling Broker, pursuant to its separate agreement with the Selling Broker.
The parties agree that Buyer shall pay any amount owing to Buying Broker
pursuant to its separate agreement with the Buying Broker. In the event that any
other party claims a commission or finder’s fee in this transaction, the party
through whom the party makes its claim shall be responsible for said commission
or fee and shall indemnify the other against all costs and expenses (including
reasonable attorneys’ fees) incurred in defending against the same. This
indemnification obligation shall survive the Closing or termination of this
Agreement.
     18.8 Time of the Essence. Time is of the essence of this Agreement.

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     18.9 Governing Law; Forum. This Agreement is entered into and shall be
governed by and construed in accordance with the laws of the State of California
(without giving effect to its choice of law principles).
     18.10 Interpretation. All parties have been represented by counsel in the
preparation and negotiation of this Agreement, and this Agreement shall be
construed according to the fair meaning of its language. The rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in interpreting this Agreement. Unless the
context clearly requires otherwise, (i) the plural and singular numbers shall
each be deemed to include the other; (ii) the masculine, feminine, and neuter
genders shall each be deemed to include the others; (iii) “shall,” “will,” or
“agrees” are mandatory, and “may” is permissive; (iv) “or” is not exclusive; (v)
“includes” and “including” are not limiting, absent express language to the
contrary; (vi) “days” means calendar days unless specifically provided
otherwise; and (vii) “business day” means any day other than Saturday, Sunday,
or any day that is an “optional bank holiday” under Section 7.1 of the
California Civil Code, whether or not any particular bank is open for business
on such optional bank holiday.
     18.11 IRS Form 1099-S Designation. In order to comply with information
reporting requirements of Section 6045(e) of the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations thereunder, the parties agree (i) to
execute an IRS Form 1099-S Designation Agreement to designate the Title Company
(the “Designee”) as the party who shall be responsible for reporting the
contemplated sale of the Property to the Internal Revenue Service (the “IRS”) on
IRS Form 1099-S; and (ii) to provide the Designee with the information necessary
to complete Form 1099-S.
     18.12 Third Party Beneficiaries. This Agreement has been made solely for
the benefit of the parties hereto and their respective successors and permitted
assigns, and nothing in this Agreement is intended to, or shall, confer upon any
other person any benefits, rights or remedies under or by reason of this
Agreement.
     18.13 Compliance With Laws. Each party shall comply with all applicable
laws, rules, regulations, orders, consents and permits in the performance of all
of their obligations under this Agreement.
     18.14 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and is intended to be binding when all parties have
delivered their signatures to the other parties. Signatures may be delivered by
facsimile transmission or by e-mail in a portable document format (pdf). All
counterparts shall be deemed an original of this Agreement.
     18.15 Exhibits. All Recitals and Exhibits referred to in this Agreement are
incorporated herein by reference and shall be deemed part of this Agreement.
     18.16 Authority. The individuals executing this Agreement on behalf of
Seller and Buyer individually represent and warrant that he or she has been
authorized to do so and has the power to bind the party for whom they are
signing.

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     18.17 Exchange Transaction. Buyer agrees upon the request of Seller to
cooperate with Seller in closing all or part of this transaction as an exchange
pursuant to Internal Revenue Code Section 1031, provided that:
          (a) Buyer shall incur no additional expense or liability in connection
therewith and shall not be required to make any representations or warranties,
incur any personal liabilities or hold title to any property other than the
Property;
          (b) Seller shall indemnify, protect, defend and hold Buyer harmless
from any claims, liabilities, demands, causes of action, judgments, expenses,
costs and attorneys’ fees in connection with such exchange or which result from
Buyer’s compliance with this paragraph, which obligation shall survive the
Closing or termination of this Agreement; and
          (c) The Closing is not extended or delayed by the exchange and the
completion of the exchange is not a condition to Seller’s obligation to close
the Escrow.
     18.18 Confidentiality. Buyer and Seller shall each maintain as confidential
any and all material or information about the other, the terms of this
Agreement, and the Property, and shall not disclose such information to any
third party, except, in the case of Buyer, to Buyer’s investment bankers, lender
or prospective lenders, insurance and reinsurance firms, accountants, attorneys,
environmental and other consultants, as may be reasonably required for the
consummation of this transaction, as required by law or in connection with any
arbitration or litigation between the parties, and except, in the case of
Seller, to Seller’s existing lender, attorneys, accountants and other
professional consultants, as may be reasonably required for the consummation of
this transaction, as required by law or in connection with any arbitration or
litigation between the parties. Neither party shall issue a press release or
other public statement about this Agreement or the transactions contemplated by
this Agreement without the other party’s prior written consent, unless such
release or statement is required by law. Seller acknowledges that Buyer’s
ultimate parent is a publicly traded company and that Buyer is, therefore,
subject to laws and regulations regarding the disclosure and dissemination of
business information. Buyer acknowledges that in the event this Agreement
terminates for any reason, Seller has the right and the obligation to disclose
to subsequent purchasers of the Property the price and material terms of this
Agreement, and Buyer agrees that such disclosure is a permitted disclosure under
this Section 18.18.
[Signatures on following page]

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

              SELLER:   200 OCEANGATE, LLC,     a Delaware limited liability
company
 
                By:   200 Oceangate, Inc.,         a Delaware corporation      
  its Manager
 
           
 
      By:    
 
           
 
          Jeanne R. Myerson
 
          President
 
            BUYER:   MOLINA CENTER LLC,     a Delaware limited liability company
 
                By:   Molina Healthcare, Inc., a Delaware corporation
 
           
 
      By:    
 
           
 
      Name:    
 
           
 
      Title:    
 
           

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

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EXHIBIT A
DESCRIPTION OF THE LAND
PARCELS 2 AND 3, AS SHOWN ON PARCEL MAP NO. 5196, IN THE CITY OF LONG BEACH,
COUNTY OF LOS ANGLES, STATE OF CALIFORNIA, FILED IN BOOK 71 PAGE 14 OF PARCEL
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM, ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY
KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND,
TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS
OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL
PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS,
HYDROCARBON SUBSTANCES OR MINERALS FROM SAID OR OTHER LANDS, BUT WITHOUT,
HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF SAID LAND OR ANY PORTION OF SAID
LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER AS
RESERVED BY VARIOUS DEEDS OF RECORD, AMONG THEM, BEING THE DEED RECORDED JULY
19, 1965 AS INSTRUMENT NO. 885 IN BOOK D2981 PAGE 153 OFFICIAL RECORDS.
APN: 7278-003-035 and 7278-003-036

Exhibit A, Page 1