PURCHASE AND SALE AGREEMENT

 

By and between

 

COP-WESTERN AVENUE, LLC
a California limited liability company

 

as Seller,

 

and

 

MMB MANAGEMENT, LLC
a California limited liability company

 

as Purchaser

 

December 28, 2012

 

 

 

 

TABLE OF CONTENTS

 

    Page       1. DEFINITIONS 1       2. PURCHASE AND SALE; CLOSING 3   2.1
Purchase and Sale 3   2.2 Closing 3   2.3 Payment of Purchase Price 3   2.4
Escrow Agent 4         3. TITLE, DILIGENCE MATERIALS 5   3.1 Title 5   3.2
Survey 5   3.3 Property Documents 5   3.4 Inspection Indemnity 7         4.
CONDITIONS TO THE PURCHASER’S OBLIGATION TO CLOSE 8   4.1 Closing Documents 8  
4.2 Title Policy 9   4.3 Other Conditions 9         5. CONDITIONS TO SELLER’S
OBLIGATION TO CLOSE 10   5.1 Purchase Price 10   5.2 Closing Documents 10   5.3
Other Conditions 10         6. REPRESENTATIONS AND WARRANTIES OF SELLER 10   6.1
Status and Authority of the Seller 10   6.2 Action of the Seller 10   6.3 No
Violations of Agreements 11   6.4 Litigation 11   6.5 Existing Leases 11   6.6
Agreements 11   6.7 Not a Foreign Person 11   6.8 Prohibited Person 11   6.9 No
Approval 11   6.10 Bankruptcy 12   6.11 No Notices 12   6.12 Hazardous Materials
12   6.13 Cause to be Untrue 12   6.14 AS-IS 13         7. REPRESENTATIONS AND
WARRANTIES OF PURCHASER 14   7.1 Status and Authority of the Purchaser 14   7.2
Action of the Purchaser 14   7.3 No Violations of Agreements 14

 

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      Page           7.4 Litigation 14   7.5 Prohibited Person 14   7.6 No
Approvals 14   7.7 Bankruptcy 15         8. COVENANTS OF THE SELLER 15   8.1
Approval of Leasing 15   8.2 Operation of Property 15   8.3 Compliance with Laws
15   8.4 Compliance with Agreements 15   8.5 Notice of Material Changes or
Untrue Representations 16   8.6 Insurance 16   8.7 Cooperation 16         9.
APPORTIONMENTS 16   9.1 Real Property Apportionments 16   9.2 Closing Costs 18  
      10. DAMAGE TO OR CONDEMNATION OF PROPERTY 19   10.1 Casualty 19   10.2
Condemnation 19   10.3 Survival 19         11. DEFAULT   19   11.1 Default by
the Seller 19   11.2 Default by the Purchaser 20         12. Miscellaneous 20  
12.1 Brokers 20   12.2 Publicity 21   12.3 Notices 21   12.4 Waivers 22   12.5
Assignment; Successors and Assigns 23   12.6 Severability 23   12.7 Counterparts
23   12.8 Performance on Business Days 23   12.9 Attorneys’ Fees 23   12.10
Section and Other Headings 24   12.11 Time of Essence 24   12.12 Governing Law
24   12.13 Arbitration 24   12.14 Like-Kind Exchange 25   12.15 Recording 26  
12.16 Non-liability of Representatives of Seller 26   12.17 Non-liability of
Representatives of Purchaser 26   12.18 Waiver 26

 

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      Page           12.19 Further Assurances 26   12.20 [Intentionally
omitted.] 26   12.21 IRS Real Estate Sales Reporting 26   12.22 Entire Agreement
26   12.23 Interrelation 26

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT is made as of December 28, 2012, by and between
COP-WESTERN AVENUE, LLC, a California limited liability company (the “Seller”),
and MMB MANAGEMENT, LLC, a California limited liability company (the
“Purchaser”).

 

WITNESSETH:

 

WHEREAS, the Seller is the owner of the Property (this and other capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in Section 1); and

 

WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser desires
to purchase from the Seller, the Property, subject to and upon the terms and
conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the mutual receipt and legal sufficiency
of which are hereby acknowledged, the Seller and the Purchaser hereby agree as
follows:

 

1.          DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings set forth below or in the section of this Agreement referred to below:

 

1.1           “Agreement” shall mean this Purchase and Sale Agreement, together
with any exhibits and schedules attached hereto, as it and they may be amended
from time to time as herein provided.

 

1.2           “Business Day” shall mean any day other than a Saturday, Sunday or
any other day on which banking institutions in the State of California are
authorized by law or executive action to close.

 

1.3           “Closing” shall have the meaning given such term in Section 2.2.

 

1.4           “Closing Date” shall have the meaning given such term in Section
2.2.

 

1.5           “Commitment” shall have meaning set forth in Section 3.1.

 

1.6           “Deposit” shall have the meaning set forth in Section 2.3.

 

1.7           “Environmental Laws” shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal, state or local
governmental authority because of its toxicity, infectiousness, radioactivity,
explosiveness, ignitability, corrosiveness or reactivity, including, without
limitation, asbestos, solvents, polychlorinated biphenyls, flammable explosives,
oil, petroleum or any refined petroleum product.

 

 

 

  

1.8           “Escrow Agent” shall have the meaning set forth in Section 2.4.

 

1.9           “Existing Survey” shall mean the existing ALTA survey, if any, and
any other “as-built” survey, for the Property.

 

1.10         “Existing Title Policy” shall mean the existing title insurance
policy for the Property.

 

1.11         “Grant Deed” shall have the meaning set forth in Section 4.1(a).

 

1.12         “Hazardous Materials” shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal, state or local
governmental authority because of its toxicity, infectiousness, radioactivity,
explosiveness, ignitability, corrosiveness or reactivity, including, without
limitation, asbestos, solvents, polychlorinated biphenyls, flammable explosives,
oil, petroleum or any refined petroleum product.

 

1.13         “Improvements” shall mean the Seller’s entire right, title and
interest in and to the existing buildings, fixtures and other structures and
improvements situated on, or affixed to, the Land.

 

1.14         “Land” shall mean, the Seller’s entire right, title and interest in
and to (a) the parcel(s) of land described in Exhibit A hereto, together with
(b) all easements, rights of way, privileges, licenses and appurtenances which
the Seller may own with respect thereto.

 

1.15         “Leases” shall mean the leases identified in the Rent Roll and any
other leases hereafter entered into in accordance with the terms of this
Agreement, and all of Seller's rights and interests therein, including Seller's
rights to any tenant deposits held by or for Seller pursuant to the Leases.

 

1.16         “Other Property” shall mean the Seller’s entire right, title and
interest in and to (a) all fixtures, machinery, systems, equipment and items of
personal property owned by the Seller and attached or appurtenant to, located on
and used in connection with the ownership, use, operation or maintenance of the
Land or Improvements, if any, (b) all freely assignable intangible property
owned by the Seller arising from or used in connection with the ownership, use,
operation or maintenance of the Land or Improvements, if any; and (c) all use,
occupancy, building and operating licenses, permits, approvals, and development
rights, if any, and (d) all freely assignable plans and specifications related
to the Land and Improvements, if any. Seller shall not be required to obtain any
consents to assignment of the Other Property as a condition to closing.

 

1.17         “Permitted Exceptions” shall mean, collectively, (a) liens for
taxes, assessments and governmental charges not yet due and payable or due and
payable but not yet delinquent; (b) the Leases, and (c) such other nonmonetary
encumbrances with respect to the Property as may be shown on any supplemental
title report which are not objected to by the Purchaser (or which are objected
to, and subsequently waived, by the Purchaser) in accordance with Section 3.1.

 

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1.18         “Property” shall mean, collectively, all of the Land, the
Improvements and the Other Property.

 

1.19         “Purchase Price” shall mean Seventeen Million Six Hundred
Thirty-One Four Hundred Fifty-Eight Dollars ($17,631,458) in good funds, plus or
minus all adjustments, prorations, and credits as provided in this Agreement.

 

1.20         “Purchaser” shall have the meaning given such term in the preamble
to this Agreement, together with any permitted successors and assigns.

 

1.21         “Rent Roll” shall mean Schedule 1 to this Agreement.

 

1.22         “Seller” shall have the meaning given such term in the preamble to
this Agreement, together with any permitted successors and assigns.

 

1.23         “Survey” shall have meaning set forth in Section 3.2.

 

1.24         “Title Company” shall mean First American Title Insurance Company
at the office set forth in Section 12.3: Attention Lance Capel, Title Officer.

 

1.25         “Title Inspection Period” shall have the meaning set forth in
Section 3.1.

 

2.           PURCHASE AND SALE; CLOSING.

 

2.1           Purchase and Sale. In consideration of the payment of the Purchase
Price by the Purchaser to the Seller and for other good and valuable
consideration, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Property for the
Purchase Price, subject to and in accordance with the terms and conditions of
this Agreement. .

 

2.2           Closing. The purchase and sale of the Property shall be
consummated at a closing (the “Closing”) to be processed at the offices of the
Escrow Agent on or before January 23, 2013. The Closing shall be the date that
the Grant Deed for the Property is recorded in the applicable County recorder’s
office..

 

2.3           Payment of Purchase Price.

 

(a)          Within two (2) Business Days of Opening of Escrow pursuant to
Section 2.4, Purchaser shall deposit in escrow with Escrow Agent (as defined in
Section 2.4) as the initial earnest money deposit the sum of Five Hundred
Thousand Dollars ($500,000) (the “Deposit”) in cash to be held and disbursed by
Escrow Agent in accordance with the remaining provisions of this Agreement
including, without limitation, Section 3.3 below. The Deposit shall be
non-refundable in the event Purchaser gives Seller written notice of approval of
the Property in accordance with Section 3.3 below. In addition to the Deposit,
Purchaser shall, concurrently with its execution of this Agreement, deliver to
Seller the amount of One Hundred Dollars ($100.00), which amount Seller and
Purchaser agree has been bargained for as consideration for Seller's execution
and delivery of this Agreement and Purchaser’s right to inspect the Property.
Such sum is in addition to and independent of any other consideration or payment
provided for in this Agreement and is non-refundable in all events.

 

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If the Escrow is not opened pursuant to Section 4 on or before the date two (2)
Business Days after the Opening of Escrow, or if Purchaser fails to deposit the
Deposit on or before the applicable date specified above, this Agreement and the
Escrow shall automatically stand terminated without further notice in which
event Escrow Agent shall return any Deposit to Purchaser and Seller and
Purchaser shall have no further obligations under this Agreement except those
that expressly survive termination hereunder.

 

(b)          One (1) Business Day prior to the Closing Date, the Purchaser shall
deposit in Escrow with Escrow Agent the balance of the Purchase Price, subject
to adjustment as provided in Article 9.

 

2.4          Escrow Agent. Purchaser and Seller hereby engage First American
Title Insurance Company (attention: Patty Beverly) at the office set forth in
Section 12.4 (“Escrow Agent”) to act as agent for the parties in closing this
transaction and carrying out the terms of this Agreement on the terms and
conditions set forth herein. This Agreement shall constitute escrow instructions
to Escrow Agent; provided, however, in the event of any inconsistency between
the provisions hereof and the provisions of any escrow instructions requested by
Escrow Agent, the terms hereof shall govern and control. “Opening of Escrow”
shall mean the date on which Escrow Agent receives one (1) fully executed
original counterpart of this Agreement from Seller and Purchaser together with
the Deposit. Escrow Agent shall give Seller and Purchaser written notice of the
date of Opening of Escrow and its signature hereto indicating its acceptance of
the escrow instructions. Escrow and the transaction contemplated hereby shall
close (referred to herein interchangeably as the “Close of Escrow,” the
“Closing,” or by similar words) when all documents and funds necessary to close
this transaction have been received by Escrow Agent and the Grant Deed conveying
title to the Property to Purchaser has been recorded in accordance with Section
2.2.

 

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3.          TITLE, DILIGENCE MATERIALS.

 

3.1           Title. Escrow Agent is hereby instructed to, within three (3) days
after the date of Opening of Escrow, provide to Purchaser a Commitment for Title
Insurance relating to the Property (which Commitment, together with any
amendments thereto is referred to as the “Commitment”), disclosing all matters
of record which relate to the title to the Property and Escrow Agent’s
requirements for both closing the escrow created by this Agreement and issuing
the policy of title insurance described in Section 4.2. Escrow Agent shall also
simultaneously cause legible copies of all instruments and other documents
referred to in the Commitment (collectively, the “Underlying Documents”) to be
furnished to Purchaser. On or prior to the date which is ten (10) days prior to
the expiration of the Property Inspection Period, (the “Title Inspection
Period”), the Purchaser shall give the Seller written notice of any title
exceptions (other than Permitted Exceptions) set forth on the Commitment as to
which the Purchaser objects, in its sole and absolute discretion. The Seller
shall have the right, but not the obligation, to attempt to remove, satisfy or
otherwise cure any exceptions to title to which the Purchaser so objects;
provided, however, that Seller shall be obligated to remove, satisfy or
otherwise eliminate, on or before Closing, all monetary liens, deeds of trust
and monetary encumbrances securing the payment of money (other than liens for
property taxes not yet due and payable). If Seller elects to take such actions
as may be required to cause such exceptions as to which Purchaser has objected
to be removed from the Commitment, the Seller shall, on or before five (5) days
following delivery of Purchaser's objections, give the Purchaser written notice
thereof; it being understood and agreed that the failure of the Seller to timely
give such written notice as to any matters objected to by Purchaser shall be
deemed an election by the Seller not to remedy such matters. If the Seller
elects (or is deemed to have elected) not to cure any title defects to which the
Purchaser has so objected, the Purchaser may elect (i) to terminate this
Agreement prior to the expiration of the Property Inspection Period, in which
case Purchaser shall receive a prompt return of the Deposit and Purchaser and
Seller shall have no further obligations to each other under this Agreement
except for those obligations hereunder which expressly survive such termination,
or (ii) to consummate the transactions contemplated hereby, notwithstanding such
title defect, without any abatement or reduction in the Purchase Price on
account thereof (whereupon such objected to exceptions or matters shall be
deemed to be Permitted Exceptions). The Purchaser shall make any such election
by written notice to the Seller given on or prior to five (5) days after
delivery of the Seller’s notice of its unwillingness or inability to cure (or
deemed election not to cure) such defect and time shall be of the essence with
respect to the giving of such notice. Failure of the Purchaser to give such
notice shall be deemed an election by the Purchaser to proceed in accordance
with clause (ii) above. Escrow Agent shall also promptly deliver to Purchaser
any updated or revised Commitment, and the corresponding Underlying Documents,
which reflect any new lien, encumbrance, or other exception to title first
arising after the Opening of Escrow and not shown on the original Commitment
described above (a “New Title Matter”), as to which the same procedures, rights
and other provisions set forth above in this Section 3.1 shall apply, except
that the Title Inspection Period with respect to any such New Title Matter shall
be five (5) days. Notwithstanding the foregoing, Purchaser shall have no right
to disapprove any survey inspection after the expiration of the Title Inspection
Period.

 

3.2           Survey. Seller shall, within five (5) days after the Opening of
Escrow, provide Purchaser with any Existing Survey to the extent such exist and
are in Seller’s possession or control. Purchaser may, at its cost, cause any
such survey to be updated, or, in the event there is no Existing Survey, cause a
new survey to be prepared (collectively, the “Survey”) and Purchaser shall have
until the end of the Title Inspection Period to object in writing to any matter
shown in the Survey. If Purchaser fails to object within such time period, the
legal description of the Property and any other matters shown in the Survey
shall be deemed approved by Purchaser. If Purchaser does object in writing to
any matter shown in the Survey, Purchaser shall specify the matter objected to
in the Title Objection Notice.

 

3.3           Property Documents. Purchaser acknowledges that Seller has
delivered to Purchaser the Rent Roll and true and correct copies of those
documents set forth on Schedule 2 attached hereto (the “Property Documents”).
Purchaser acknowledges and agrees that Seller’s Property Documents will be
provided by Seller to accommodate and facilitate Purchaser’s investigations
relating to the Land and the Property and that, except as expressly set forth
herein, Seller makes no representations and warranties of any kind regarding the
accuracy or thoroughness of the information contained in Seller’s Property
Documents and Purchaser shall not be entitled to rely on the Property Documents.
Purchaser must perform its own due diligence investigation of the Property.

 

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Subject to the terms and conditions below, Purchaser shall have until 5:00 p.m.
California time on January 17, 2013 (the “Property Inspection Period”) to review
the Property Documents and perform a feasibility study with respect to the
Property which may include market and engineering studies, leasing and financial
investigations, soil tests, drainage studies, confirmation that all utilities
including water, electric, gas, sewer and telephone are available to the
Property, environmental investigations, confirmation of zoning, and/or such
other tests, studies or investigations with respect to the Property as Purchaser
deems appropriate in its sole and absolute discretion. Subject to the rights of
tenants of the Property under their respective leases and with reasonable
advance notice to Seller, Seller shall cause access to the Property to be
available to Purchaser and the persons so designated by it within 48 hours of
Purchaser’s written request, but during the regular business hours of the
respective Property, and shall afford them the opportunity to inspect and
perform any tests upon the Property that Purchaser deems necessary or
appropriate to determine whether the Property is suitable for Purchaser’s
purposes, in Purchaser's sole and absolute discretion. At Seller’s request,
Seller and/or the involved tenant or its designees shall be entitled to
accompany Purchaser during any such inspection or contact with any tenant.
Purchaser shall have the right to conduct a Phase I environmental site
assessment and, with Seller's prior written consent (to be given or withheld in
Seller’s sole and absolute discretion) a Phase II environmental site assessment
(including soils borings, soil sampling and, if relevant, ground water testing,
and invasive sampling of building materials with respect to the Premises).
Purchaser’s activities at the Property shall be conducted in such a manner so as
not to unreasonably interfere with the occupancy of tenants or their employees,
licensees or invitees. Purchaser shall have the right to conduct tenant
interviews with Seller's prior consent, not to be unreasonably withheld, but
with Purchaser to be accompanied by a Seller representative if required by
Seller. Notwithstanding the foregoing, Purchaser shall not conduct any intrusive
testing of the Property without the prior written consent of Seller, not to be
unreasonably withheld.

 

If Purchaser, after conducting such inspections, investigations, and tests,
determines that the Property or any part thereof or the Property Documents, or
any other aspect of the Property whatsoever, are not, in Purchaser’s sole and
absolute discretion, satisfactory for any reason, or no reason at all, then
Purchaser may elect, at any time on or prior to the date of expiration of the
Property Inspection Period, to cancel this Agreement and the Escrow by written
notice to Seller and Escrow Agent, in which case Purchaser shall receive a
prompt return of the Deposit and Purchaser and Seller shall have no further
obligations to each other under this Agreement except for those obligations
hereunder which expressly survive such termination. Upon termination by
Purchaser, but not as a condition precedent to the return of the Deposit to
Purchaser, Seller shall have the right to demand from Purchaser and pay the
reasonable copying costs for copies of all documents obtained by or for
Purchaser with respect to its investigations of the Property (which shall be
delivered by Purchaser without any representation or warranty or liability to
Purchaser), except for such document which are of an internal and proprietary
nature or the dissemination of which has been prohibited by the third-party
preparer thereof. Notwithstanding anything else contained herein to the
contrary, if Purchaser has not provided Seller with a written notice of
disapproval of the Property or Property Documents prior to the end of the
Property Inspection Period, the Property and Property Documents shall be deemed
approved by Purchaser. When Purchaser gives Seller written notice of approval of
its due diligence or is deemed to have given Seller notice of such approval, the
Deposit shall be non-refundable to Purchaser except for a default by Seller. If
Purchaser cancels this Agreement as provided in this Section 3.3, then (i)
Escrow Agent shall return to Seller all documents Seller deposited with Escrow
Agent in connection with the Escrow; (ii) Escrow Agent shall return to Purchaser
all documents Purchaser deposited with Escrow Agent in connection with the
Escrow; and (iii) Escrow Agent shall return the Deposit to Purchaser. Upon such
event, this Agreement and the Escrow shall be deemed null and void and neither
party shall have any further rights or obligations to the other hereunder or on
account hereof, except for those which by the provisions of this Agreement are
expressly stated to survive or occur at termination of this Agreement. If
Purchaser does not elect to cancel this Agreement as provided in this Section
3.3, Purchaser shall be deemed to have approved all matters concerning the
Property and elected to proceed with the acquisition of the Property in
accordance with and subject to the terms and conditions of this Agreement.

 

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Purchaser or Purchaser’s representatives, agents and/or consultants shall keep
in full force and effect general liability insurance from an insurance company
and in form and substance reasonably approved by Seller, naming Seller as an
additional insured during Purchaser’s or Purchaser’s agents, representatives
and/or consultants entries and inspections of the Property, as follows:

 

A.           Commercial general liability insurance with combined single limits
of not less than $2,000,000.00 per occurrence for bodily injury and property
damage, containing an endorsement insuring against damage to the Property and to
or from underground utilities.

 

B.           Any contractor hired to perform environmental tests to the Property
shall maintain errors and omissions or professional liability insurance covering
injury or damage arising out of the rendering or failing to render professional
services with limits of at least $2,000,000.00 per claim.

 

C.           All insurance maintained under this Section 3.3 shall be procured
from insurance companies reasonably satisfactory to Seller.

 

Any damage, disturbance or other disruption of the Improvements or the Land or
other portion of the Property caused by Purchaser or its employees, contractors
or agents shall be promptly repaired and/or placed in the condition existing
prior to disturbance thereof by Purchaser or its employees, contractors and
agents upon completion of any activities by such parties on or with respect to
the Property.

 

3.4           Inspection Indemnity. Purchaser shall indemnify, defend and hold
harmless Seller for, from and against any and all losses, defaults, liabilities,
causes of action, demands, claims, damage or expenses of every kind including,
without limitation, reasonable attorneys’ fees and court costs, arising as a
result of each of the inspections by Purchaser and/or its employees, agents and
contractors, and from and against any mechanic’s liens or claims of lien
resulting therefrom (“Inspection Indemnity”). The Inspection Indemnity shall
survive the Close of Escrow or any termination or cancellation of this
Agreement, and shall not be subject to or limited by, the provisions of Section
12.13 hereof.

 

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4.           CONDITIONS TO THE PURCHASER’S OBLIGATION TO CLOSE. The obligation
of the Purchaser to acquire the Property shall be subject to the satisfaction of
the following conditions precedent on and as of the Closing Date:

 

4.1          Closing Documents. The Seller and Purchaser as applicable shall
have delivered, or cause to have been delivered, to the Escrow Agent the
following:

 

(a)          A deed to the Property in the form set forth in Exhibit “G”
attached hereto (the “Grant Deed”), duly executed and acknowledged by the
Seller, conveying title to the Property, free from all liens and encumbrances
other than the Permitted Exceptions;

 

(b)          An assignment by the Seller and an assumption by the Purchaser, in
the form set forth on Exhibit “C” attached hereto (“Assignment of Leases”), duly
executed by the Seller and the Purchaser, of all of the Seller’s right, title
interest obligations and liabilities in, to and under the Leases;

 

(c)          Written notice to each of the tenants of the Property in the form
set forth on Exhibit “E” attached hereto (“Notices to Tenants”) executed by
Seller and Purchaser which notifies the tenants to pay to the Purchaser all rent
and other payments made by the tenants under the Leases from and after the
Closing Date;

 

(d)          A general assignment by the Seller and an assumption by the
Purchaser in the form set forth on Exhibit “B” attached hereto (“General
Assignment”), duly executed by the Seller and the Purchaser, of all of the
Seller’s right, title interest obligations and liabilities, if any, in, to and
under all freely transferable Other Property;

 

(e)          A bill of sale executed by the Seller, without warranty of any kind
except as expressly set forth in this Agreement, in the form set forth on
Exhibit “D” attached hereto (“Bill of Sale”), with respect to any personal
property owned by the Seller, situated at the Property owned by Seller and used
in connection with the Property (it being understood and agreed that no portion
of the Purchase Price is allocated to personal property);

 

(f)          To the extent the same are in the Seller’s possession or control,
copies of all material documents and agreements, plans and specifications and
contracts, licenses and permits pertaining to the Property;

 

(g)          To the extent the same are in the Seller’s possession or control,
duly executed original copies of the Leases;

 

(h)          A closing statement showing the Purchase Price, and fees, and costs
and expenses paid in connection with the Closing, all according to the
applicable provisions of this Agreement; and

 

(i)          Such other conveyance documents, certificates, deeds and other
instruments as the Escrow Agent or the Title Company may reasonably require and
as are customary in like transactions in sales of property in similar
transactions.

 

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4.2          Title Policy. The Title Company shall be prepared to issue to
Purchaser, upon payment of the title premium, a CLTA standard coverage policy of
title insurance in the amount of the Purchase Price, showing title to the
Property vested in the Purchaser subject to only the exceptions approved by
Purchaser pursuant to this Agreement. Purchaser shall have the right to obtain
an ALTA extended coverage policy of title insurance and any endorsements,
provided: (i) Purchaser pays the cost of the ALTA policy and any endorsements,
in excess of the cost of the CLTA policy; (ii) Purchaser obtains, at Purchaser’s
sole cost and expense, an ALTA survey of the Property; and (iii) the issuance of
the ALTA policy and/or endorsements shall not delay the Closing.

 

4.3          Other Conditions.

 

(a)          All representations and warranties of the Seller herein shall be
true, correct and complete in all material respects on and as of the Closing
Date and the Seller shall not be in default under this Agreement.

 

(b)          No later than five (5) Business Days prior to the Closing Date,
Seller shall have obtained estoppel certificates from all tenants of the
Property, in the form prescribed by the particular tenant’s corresponding Lease,
and if (and only if) no estoppel certificate form is prescribed by the
particular Lease, then in a form attached hereto as Exhibit “F” (the “Tenant
Estoppels”). Tenant Estoppels presented to Purchaser and not objected to within
three (3) Business days shall be deemed approved. Such Tenant Estoppels shall be
consistent with each corresponding Lease, and shall not reveal any default by
landlord or tenant, any right to offset rent by the tenant or any claim of the
same. Notwithstanding the foregoing, any modification by a tenant to an estoppel
certificate to qualify with a knowledge standard, or to conform a statement to
the applicable Lease shall not be grounds for disapproval by Purchaser. Seller
shall make reasonable efforts to obtain and deliver the Tenant Estoppels
required under this Section 4.3(b), provided, however, in no event shall Seller
be deemed in default under this Agreement in the event of Seller’s inability to
timely provide all of the required Tenant Estoppels hereunder, and Purchaser’s
sole remedy against Seller in the event of Seller’s inability to provide the
required Tenant Estoppels shall be to terminate this Agreement, receive a refund
of its Deposit.

 

(c)          At such time as Seller delivers to Purchaser Tenant Estoppels from
all the tenants, and same have not been disapproved by Purchaser as provided
above, then the Purchaser’s condition to Closing set forth in this
Section 4.3(b) shall automatically be deemed satisfied, and Seller shall have no
obligation to execute any substitute Tenant Estoppels for any tenant that has
not delivered an Estoppel Certificate, or for any Estoppel Certificate that has
been disapproved by Purchaser. Notwithstanding anything herein to the contrary,
in the event that Seller is unable, despite its reasonable efforts to provide
all the Tenant Estoppels to Purchaser on or before the fifth (5th) Business Day
prior to Closing, then Seller shall have the right in its sole discretion (but
not the obligation) to satisfy the condition set forth in this Section 4.3(b) by
providing substitute Estoppel Certificate(s) executed by Seller, and in the
exact form as would be required per the foregoing provisions had the tenant
signed such estoppel certificate (“Substitute Estoppel Certificate”), for any
tenants who do not provide a Estoppel Certificate or whose Estoppel Certificate
has been disapproved by Purchaser, which Purchaser shall be entitled to reply
upon. Seller shall be automatically released from liability for any
certification in any such Substitute Estoppel Certificate to the extent such
certification is ultimately made to Purchaser by an Estoppel Certificate
executed by the applicable tenant, whether prior to or following the Close of
Escrow, provided such tenant estoppel certificate is in a form which would have
satisfied the requirements of this Section 4.3(b) had it been timely delivered
to Purchaser.

 

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(d)          Purchaser shall not have terminated this Agreement in accordance
with Section 10.1 or Section 10.2 below.

 

5.          CONDITIONS TO SELLER’S OBLIGATION TO CLOSE. The obligation of the
Seller to convey the Property to the Purchaser is subject to the satisfaction of
the following conditions precedent on and as of the Closing Date:

 

5.1           Purchase Price. The Purchaser shall deliver to the Escrow Agent
the Purchase Price payable hereunder (less the Deposit which shall be applied to
the Purchase Price), subject to the adjustments set forth in Section 2.3,
together with any closing costs to be paid by the Purchaser under Section 9.2.

 

5.2           Closing Documents. The Purchaser shall have delivered to the
Escrow Agent duly executed and acknowledged counterparts of the documents
described in Section 4.1, where required.

 

5.3           Other Conditions. All representations and warranties of the
Purchaser herein shall be true, correct and complete in all material respects on
and as of the Closing Date and the Purchaser shall not be in default under this
Agreement.

 

6.          REPRESENTATIONS AND WARRANTIES OF SELLER. To induce the Purchaser to
enter into this Agreement, the Seller represents and warrants to the Purchaser
as of the date of this Agreement and as of Closing, except as qualified by
Schedule 3, as follows:

 

6.1           Status and Authority of the Seller. The Seller is duly organized,
validly existing and in good standing under the laws of its state of
organization or formation, and has all requisite power and authority under its
organizational documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.

 

6.2           Action of the Seller. With the exception of the Shareholder
Approval, the Seller has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, and upon the execution and delivery
of any document to be delivered by the Seller on or prior to the Closing Date,
this Agreement and such document shall constitute the valid and binding
obligation and agreement of the Seller, enforceable against the Seller in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors, and except for the
Shareholder Approval.

 

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6.3           No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Seller, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon the Property pursuant to the
terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness
or any other agreement or instrument by which the Seller is bound.

 

6.4           Litigation. Seller has not received written notice that, nor to
Seller's actual knowledge is there, any investigation, action, claim or
proceeding is pending, asserted, or threatened, which (i) questions the validity
of this Agreement or any action taken or to be taken pursuant hereto or (ii)
involves condemnation or eminent domain proceedings against the Property or any
portion thereof.

 

6.5           Existing Leases. Subject to Section 8.1, other than the Leases
listed in the Rent Roll, the Seller has not entered into any written contract or
agreement with respect to the use or occupancy of the Property that will be
binding on the Purchaser after the Closing. The copies of the Leases and all
tenant correspondence files heretofore delivered by the Seller to the Purchaser
are true, correct and complete copies thereof. The information set forth in the
Rent Roll is true, correct and complete in all material respects.

 

6.6           Agreements. Other than as set forth in the Property Documents, the
Seller has not entered into any contract or agreement with respect to the
Property which will be binding on the Purchaser after the Closing other than
contracts and agreements being assumed by the Purchaser or which are terminable
upon thirty (30) days notice without payment of premium or penalty.

 

6.7           Not a Foreign Person. The Seller is not a “foreign person” within
the meaning of Section 1445 of the United States Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.

 

6.8           Prohibited Person. For purposes of this Agreement, a “Prohibited
Person” means any of the following: (i) a person or entity that is listed in the
Annex to, or is otherwise subject to the provisions of, Executive Order No.
13224 on Terrorist Financing (effective September 24, 2001) (herein called the
“Executive Order”); (ii) a person or entity owned or Controlled by, or acting
for or on behalf of any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity that is named as a “specifically designated national” or “blocked person”
on the most current list published by the U.S. Treasury Department’s Office of
Foreign Assets Control (herein called “OFAC”) at its official website,
http://www.treas.gov/offices/enforcement/ofac; (iv) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or (v) a person or entity that is affiliated with any person or entity
identified in the foregoing clauses (i), (ii), (iii), or (iv). Seller represents
and warrants to Purchaser, knowing that Purchaser is relying on such
representation and warranty, that Seller is not a Prohibited Person.

 

6.9           No Approval. No authorization, consent, or approval of any
governmental authority (including courts) is required for the execution and
delivery by Seller of this Agreement or the performance of its obligations
hereunder.

 

-11-

 

 

6.10         Bankruptcy. Seller has not (a) made a general assignment for the
benefit of creditors, (b) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition by Seller's creditors, (c) suffered the
appointment of a receiver to take possession of all or substantially all of
Seller's assets, (d) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (e) admitted in writing its inability
to pay its debts as they come due, or (f) made an offer of settlement, extension
or composition to its creditors generally.

 

6.11         No Notices. Seller has not received any written notice from any
governmental agency requiring the correction of any condition with respect to
the Property, or any part thereof, by reason of a violation of any applicable
federal, state, county or municipal law, code, rule or regulation (including
those respecting the Americans With Disabilities Act or any law of regulation
respecting the presence of hazardous materials or toxic waste on the Property),
which has not been cured or waived.

 

6.12         Hazardous Materials. To the actual knowledge of Seller, except as
disclosed in the Property Documents, Seller: (i) is not aware of the existence
of any Hazardous Materials on the Property in violation of Environmental Laws;
and (ii) Seller has not received any notices from any governmental environmental
regulatory agencies of any violation of Environmental Laws and/or the existence
of Hazardous Materials on the Property.

 

6.13         Cause to be Untrue. Seller will not take or cause to be taken any
intentional action, which would cause any of the representations or warranties
contained in this Agreement to be untrue as of the Close of Escrow.

 

The representations and warranties made in this Agreement by the Seller shall be
continuing and shall be deemed remade by the Seller as of the Closing Date, with
the same force and effect as if made on, and as of, such date. All
representations and warranties made in this Agreement by the Seller shall
survive the Closing for a period of six (6) months, and upon expiration shall be
of no further force or effect except to the extent that with respect to any
particular alleged breach, the Purchaser files a legal action in a court with
appropriate jurisdiction for breach of the representations and warranties within
said 6-month period. References in this Article 6 to the “actual knowledge” of
Seller shall refer only to the actual knowledge of Jon Carley, who Seller hereby
represents to be, and who at Closing shall be, the person most knowledgeable and
qualified to make the foregoing representations and warranties on behalf of
Seller (which knowledge shall not include any imputed or constructive
knowledge), and shall not be construed to refer to the knowledge of any other
officer, agent or employee of Seller or any affiliate thereof or to impose upon
such designated individuals any duty to investigate the matter to which such
actual knowledge, or the absence thereof, pertains or impose any personal
liability on such individual. No claim for a breach of any representation or
warranty of Seller shall be actionable or payable (a) if the breach in question
results from or is based on a condition, state of facts or other matter which
was disclosed by Seller to Purchaser in writing prior to Closing; and (b) unless
the valid claim for any single claimed breach is more than Fifty Thousand and
No/100 Dollars ($50,000.00). In no event shall the total liability of Seller to
Purchaser for all breaches of all representations and warranties of Seller in
this Agreement exceed Five Hundred Thousand Dollars ($500,000.00). If prior to
Closing, Seller’s representations, as made as of the Effective Date, are
determined to be untrue in any material respect as of the Effective Date or if
Seller’s representations, as remade on the Closing Date, shall result in
Seller’s Representations made as of the Effective Date being untrue in any
material respect as of the Closing Date, then Purchaser may, at Purchaser’s
option, as its sole and exclusive remedy, terminate this Agreement by notice in
writing to Seller, in which event Escrow Agent shall promptly refund the entire
Deposit to Purchaser.

 

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6.14         AS-IS. Except as expressly provided in this Agreement or in any
documents to be delivered to the Purchaser at the Closing, the Seller has not
made, and the Purchaser has not relied on, any information, promise,
representation or warranty, express or implied, regarding the Property, whether
made by the Seller, on the Seller’s behalf or otherwise, including, without
limitation, the physical condition of the Property, the financial condition of
the tenants under the Leases, title to or the boundaries of the Property, pest
control matters, soil conditions, the presence, existence or absence of
hazardous wastes, toxic substances or other environmental matters, compliance
with building, health, safety, land use and zoning laws, regulations and orders,
structural and other engineering characteristics, traffic patterns, market data,
economic conditions or projections, HABITABILITY, MERCHANT-ABILITY, FITNESS FOR
A PARTICULAR PURPOSE, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL defects or
conditions, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL
APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS. furthermore,
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT or in any documents to be
delivered to the Purchaser at the Closing, PURCHASER HAS NOT RELIED AND WILL NOT
RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED
WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR
FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING and any other information
pertaining to the Property or the market and physical environments in which they
are located. The Purchaser acknowledges that, EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT or in any documents to be delivered to the Purchaser at the
Closing, (i) the Purchaser has entered into this Agreement with the intention of
relying upon its own investigation or that of ITS CONSULTANTS with respect to
the physical, environmental, economic and legal condition of the Property and
(ii) the Purchaser is not relying upon the PROPERTY DOCUMENTS OR any statements,
representations or warranties of any kind, other than those specifically set
forth in this Agreement or in any document to be delivered to the Purchaser at
the Closing, made. The Purchaser has inspected the Property and is fully
familiar with the physical condition thereof and, subject to the representations
and warranties made in this Agreement, shall purchase the Property in its “as
is”, “where is” and “with all faults” condition on the Closing Date.
Notwithstanding anything to the contrary contained herein, in the event that
PURCHASER has actual knowledge of the default of SELLER (a “Known Default”), but
nonetheless elects to consummate the transactions contemplated hereby and
proceeds to Closing, then the rights and remedies of PURCHASER shall be waived
with respect to such Known Default upon the Closing and SELLER shall have no
liability with respect thereto. EXCEPT IN THE EVENT OF SELLER'S FRAUD, AND
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT or in any documents to be
delivered to the Purchaser at the Closing, FROM AND AFTER THE CLOSING, PURCHASER
SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO,
CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT
HAVE BEEN REVEALED BY PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON CLOSING,
SHALL BE DEEMED TO HAVE IRREVOCABLY AND UNCONDITIONALLY WAIVED, RELINQUISHED AND
RELEASED SELLER (AND SELLER’S MEMBERS OFFICERS, DIRECTORS, SHAREHOLDERS,
EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF
ACTION EXCEPT FOR FRAUD AND SELLER'S OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING
CAUSES OF ACTION IN TORT OTHER THAN FRAUD), LOSSES, DAMAGES, LIABILITIES, COSTS
AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND
OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED
AGAINST SELLER (AND SELLER’S MEMBERS, OFFICERS, DIRECTORS, SHAREHOLDERS,
EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF THE PROPERTY
ITS OPERATION ANY WAY IN CONNECTION WITH THE FOREGOING, PURCHASER EXPRESSLY
WAIVES THE BENEFITS OF ANY PROVISION OR PRINCIPLE OF FEDERAL STATE OR LOCAL LAW
OR REGULATION THAT MAY LIMIT THE SCOPE OR EFFECT OF THE FOREGOING WAIVER AND
RELEASE INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTION 1542, WHICH PROVIDES: “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” OR EQUIVALENT LAW OF ANY
JURISDICTION, TO THE EXTENT APPLICABLE.

 

-13-

 

  

This release by Purchaser shall constitute a complete defense to any claim,
cause of action, defense, contract, liability, indebtedness or obligation
released pursuant to this release. Nothing in this release shall be construed as
(or shall be admissible in any legal action or proceeding as) an admission by
Seller or any other released party that any defense, indebtedness, obligation,
liability, claim or cause of action exists which is within the scope of those
hereby released.

 

          /s/ JKM          
Purchaser’s Initials

 

7.           REPRESENTATIONS AND WARRANTIES OF PURCHASER. To induce the Seller
to enter into this Agreement, the Purchaser represents and warrants to the
Seller as follows:

 

7.1           Status and Authority of the Purchaser. The Purchaser is duly
organized, validly existing and in good standing under the laws of its state of
organization or formation, and has all requisite power and authority under its
charter documents to enter into and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby.

 

7.2           Action of the Purchaser. The Purchaser has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and upon the execution and delivery of any document to be delivered by the
Purchaser on or prior to the Closing Date, this Agreement and such document
shall constitute the valid and binding obligation and agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.

 

7.3           No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by the Purchaser, nor compliance with the terms
and provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the
Purchaser is bound.

 

7.4           Litigation. The Purchaser has received no written notice that any
investigation, action or proceeding is pending or threatened which questions the
validity of this Agreement or any action taken or to be taken pursuant hereto.

 

7.5           Prohibited Person. Purchaser represents and warrants to Seller,
knowing that Seller is relying on such representation and warranty, that
Purchaser is not a Prohibited Person.

 

7.6           No Approvals. No authorization, consent, or approval of any
governmental authority (including courts) is required for the execution and
delivery by Purchaser of this Agreement or the performance of its obligations
hereunder.

 

-14-

 

  

7.7           Bankruptcy. Purchaser has not (a) made a general assignment for
the benefit of creditors, (b) filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by Purchaser's creditors, (c)
suffered the appointment of a receiver to take possession of all or
substantially all of Purchaser's assets, (d) suffered the attachment or other
judicial seizure of all, or substantially all, of Purchaser's assets, (e)
admitted in writing its inability to pay its debts as they come due, or (f) made
an offer of settlement, extension or composition to its creditors generally.

 

The representations and warranties made in this Agreement by the Purchaser shall
be continuing and shall be deemed remade by the Purchaser as of the Closing Date
with the same force and effect as if made on, and as of, such date. All
representations and warranties made in this Agreement by the Purchaser shall
survive the Closing for a period of six (6) months, and upon expiration shall be
of no further force or effect except to the extent that with respect to any
particular alleged breach, the Seller files a legal action in a court with
appropriate jurisdiction for breach of Purchaser’s representations and
warranties prior to the expiration of said period.

 

8.          COVENANTS OF THE SELLER. The Seller hereby covenants with the
Purchaser between the date of this Agreement and the Closing Date or earlier
termination of the Agreement as follows:

 

8.1           Approval of Leasing. Following Opening of Escrow, Seller will not
extend, amend or terminate any existing Lease, or enter into any new Lease
without providing Purchaser the following: (a) all material supporting
documentation, including, without limitation, broker’s commissions, tenant
improvement allowances, cancellation fees and any tenant financial information
to the extent in Seller’s possession; and (b) as to any such extension,
amendment or termination of a Lease, or new Lease which is to be executed after
the Opening of Escrow, or which is to become effective after the Opening of
Escrow but which was not disclosed to Purchaser prior to the Opening of Escrow,
Seller must receive Purchaser’s prior written approval which may be withheld in
Purchaser’s reasonable discretion. Purchaser agrees to give Seller written
notice of approval or disapproval of a proposed amendment or termination of a
Lease, or new Lease within five (5) days after Purchaser’s receipt of all of the
items described above. If Purchaser does not respond to Seller’s request within
such five (5) day time period, then Purchaser will be deemed to have disapproved
such amendment, termination or new Lease.

 

8.2           Operation of Property. To continue to operate the Property
substantially consistent with past practices.

 

8.3           Compliance with Laws. To comply in all material respects with (i)
all laws, regulations and other requirements from time to time applicable of
every governmental body having jurisdiction of the Property, or the use or
occupancy thereof, and (ii) all material terms, covenants and conditions of all
agreements affecting the Property.

 

8.4           Compliance with Agreements. To comply with each and every material
term, covenant and condition contained in the Leases and any other material
document or agreement affecting the Property.

 

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8.5           Notice of Material Changes or Untrue Representations. Upon
learning of any material adverse change affecting the Property or any event or
circumstance which makes any representation or warranty of the Seller to the
Purchaser under this Agreement untrue or misleading, promptly to notify the
Purchaser thereof in writing.

 

8.6           Insurance. To maintain, or cause to be maintained, all existing
property insurance relating to the Property.

 

8.7           Cooperation. The Purchaser and the Seller shall reasonably
cooperate in complying with the requirements under the Leases in connection with
the transfer and assignment of the Property and the Leases to the Purchaser.

 

9.           APPORTIONMENTS.

 

9.1          Real Property Apportionments.

 

(a)          The following items shall be apportioned at the Closing as of the
close of business on the day immediately preceding the Closing Date:

 

(i)          to the extent same have been paid to Seller as of the Closing Date,
monthly Rents that are not delinquent, operating costs, taxes and other fixed
charges payable under the Leases;

 

(ii)         to the extent same have been paid to Seller as of the Closing Date,
percentage rents and other unfixed charges payable under the Leases;

 

(iii)        fuel, electric, water and other utility costs;

 

(iv)        municipal assessments and governmental license and permit fees;

 

(v)         non-delinquent real estate taxes and assessments other than special
assessments, based on the rates and assessed valuation applicable in the fiscal
year for which assessed;

 

(vi)        water rates and charges;

 

(vii)       sewer and vault taxes and rents; and

 

(viii)      all other items of income and expense normally apportioned in sales
of property in similar situations in the jurisdiction where the Property is
located.

 

If any of the foregoing cannot be apportioned at the Closing because of the
unavailability of the amounts which are to be apportioned, such items shall be
apportioned on the basis of a good faith estimate by the parties and reconciled
as soon as practicable after the Closing Date but, in any event, no later than
twelve (12) months after the Closing Date.

 

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(b)          If there are water, gas or electric meters located at the Property,
the Seller shall obtain readings thereof to a date not more than thirty (30)
days prior to the Closing Date and the unfixed water rates and charges, sewer
taxes and rents and gas and electricity charges, if any, based thereon for the
intervening time shall be apportioned on the basis of such last readings. If
such readings are not obtainable by the Closing Date, then, at the Closing, any
water rates and charges, sewer taxes and rents and gas and electricity charges
which are based on such readings shall be prorated based upon the per diem
charges obtained by using the most recent period for which such readings shall
then be available. Upon the taking of subsequent actual readings, the
apportionment of such charges shall be recalculated and the Seller or the
Purchaser, as the case may be, promptly shall make a payment to the other based
upon such recalculations. The parties agree to make such final recalculations
within sixty (60) days after the Closing Date. At Closing, Purchaser shall
credit to the account of Seller all refundable cash or other deposits posted
with utility companies serving the Property, or, at Seller’s option, Seller
shall be entitled to receive and retain such refundable cash and deposits.

 

(c)          If any refunds of real property taxes or assessments, water rates
and charges or sewer taxes and rents shall be made after the Closing, the same
shall be held in trust by the Seller or the Purchaser, as the case may be, and
shall first be applied to the unreimbursed costs incurred in obtaining the same,
then to any required refunds to tenants under the Leases, and the balance, if
any, shall be paid to the Seller (for the period prior to the Closing Date) and
to the Purchaser (for the period commencing with the Closing Date).

 

(d)          If, on the Closing Date, the Property shall be or shall have been
affected by any special or general assessment or assessments or real property
taxes payable in a lump sum or which are or may become payable in installments
of which the first installment is then a charge or lien and has become payable,
the Seller shall pay or cause to be paid at the Closing the unpaid installments
of such assessments due and as of the Closing Date.

 

(e)          No insurance policies of the Seller are to be transferred to the
Purchaser, and no apportionment of the premiums therefor shall be made.

 

(f)          At the Closing, the Seller shall transfer to, or cause to be
credited to, the Purchaser the amount of all security deposits held pursuant to
the terms of the Leases.

 

(g)          Brokerage commissions, tenant improvement expenses and other
amounts payable by the Seller as landlord under Leases first entered into by the
Seller after the Opening of Escrow and approved by Purchaser pursuant to the
approval procedures set forth in Section 8.1, or otherwise, or due in connection
with the renewal or extension of any existing Lease taking place after the
Opening of Escrow, shall be the sole responsibility of the Purchaser. The
Purchaser shall receive a credit at Closing for all unfunded, brokerage
commissions, tenant improvement allowances and other amounts payable by the
Seller as landlord under Leases (only to the extent) entered into by the Seller
prior to the date of this Agreement and solely attributable to periods prior to
the Close of Escrow.

 

-17-

 

 

(h)          If a net amount is owed by the Seller to the Purchaser pursuant to
this Section 9.1, such amount shall be credited against the Purchase Price. If a
net amount is owed by the Purchaser to the Seller pursuant to this Section 9.1,
such amount shall be added to the Purchase Price paid to the Seller.

 

(i)          If, on the Closing Date, there are past due rents with respect to
any Lease then such delinquent rents shall not be prorated at Closing. Any
delinquent rents received by the Purchaser from a tenant after the Closing shall
be applied between the parties, as follows: first, to the out of pocket expenses
incurred by Purchaser in collecting such rents, and second, to rents due or to
become due during the calendar month in which the Closing occurs, and third, to
all other rents due or past due in inverse order to the order in which they
became due (i.e., first to arrearages most recently occurring, then to older
arrearages). Seller shall promptly remit to Purchaser all sums received by
Seller from tenants after the Closing other than for rents for which Purchaser
received credit hereunder. Any delinquent rents not paid to Purchaser shall bear
interest at the maximum rate by law until paid. In no event shall the Seller
have any right to take any action to collect any past due rents or other amounts
following the Closing; provided, however, the Purchaser shall use commercially
reasonable efforts to collect such past due rents and other amounts, except that
the Purchaser shall have no obligation to institute any legal action or
proceeding or otherwise enforce any of its rights and remedies under any Lease
in connection with such commercially reasonable efforts.

 

The provisions of this Section 9.1 shall survive the Closing.

 

9.2          Closing Costs.

 

(a)          The Purchaser shall pay (i) the costs its own diligence in
connection with the transactions contemplated hereby; (ii) all premiums, charges
and fees of the Title Company in excess of the premium for a standard owners
CLTA title policy in the amount of the Purchase Price including for the
Purchaser’s account the cost of extended coverage and any affirmative
endorsements, and (iii) fifty percent (50%) of the Escrow Fee.

 

(b)          The Seller shall pay (i) the title insurance premium for a standard
CLTA policy of title insurance in the amount of the Purchase Price, (ii) fifty
percent (50%) of the Escrow Fee, (iii) all transfer taxes, transfer fees,
documentary stamp taxes, and other similar fees, taxes or charges; and (iv) all
recording fees.

 

(c)          Each party shall pay the fees and expenses of its attorneys and
other consultants, except as provided in Section 12.9 of this Agreement.

 

(d)          Any other costs shall be allocated in accordance with customary
practice in the jurisdiction in which the relevant Property is located.

 

-18-

 

 

10.         DAMAGE TO OR CONDEMNATION OF PROPERTY.

 

10.1         Casualty. If, prior to the Closing, any of the individual buildings
making up any Property is materially destroyed or damaged by fire or other
casualty (i.e., five percent (5%) or more of any Property), or in the event that
the physical condition of any Property otherwise suffers a material adverse
change resulting in a diminution of value of five percent (5%) or more of such
Property, the Seller shall promptly notify the Purchaser of such fact. In such
event, the Purchaser shall have the right to terminate this Agreement by giving
written notice to the Seller not later than ten (10) days after the giving the
Seller’s notice (and, if necessary, the Closing Date shall be extended until one
day after the expiration of such ten (10) day period). If the Purchaser elects
to terminate this Agreement as aforesaid, this Agreement shall terminate and be
of no further force and effect, the Deposit shall be promptly returned to
Purchaser, and no party shall have any liability to the other hereunder. If less
than a material part of any of the individual buildings making up the Property
shall be affected by fire or other casualty or if the Purchaser shall not elect
to terminate this Agreement as aforesaid, there shall be no abatement of the
Purchase Price and the Seller shall assign to the Purchaser at the Closing the
rights of the Seller to the proceeds, if any, under the Seller’s insurance
policies covering the Property with respect to such damage or destruction and
there shall be credited against the Purchase Price the amount of any deductible,
any proceeds previously received by Seller on account thereof and any deficiency
in proceeds.

 

10.2         Condemnation. If, prior to the Closing, a material part of any of
the individual land making up any Property (i.e., a portion of and/or interest
in any Property comprising five percent (5%) or more of the value of any
Property), is taken by eminent domain (or is the subject of a pending taking
which has not yet been consummated), the Seller shall notify the Purchaser of
such fact promptly after obtaining knowledge thereof and the Purchaser shall
have the right to terminate this Agreement by giving written notice to the
Seller not later than ten (10) days after the giving of the Seller’s notice
(and, if necessary, the Closing Date shall be extended until one day after the
expiration of such ten (10) day period). If the Purchaser elects to terminate
this Agreement as aforesaid, this Agreement shall terminate and be of no further
force and effect, the Deposit shall be promptly returned to Purchaser, and no
party shall have any liability to the other hereunder. If less than a material
part of any of the individual buildings making up the Property shall be affected
or if the Purchaser shall not elect to terminate this Agreement as aforesaid,
the sale of the Property shall be consummated as herein provided without any
adjustment to the Purchase Price (except to the extent of any condemnation award
received by the Seller prior to the Closing) and the Seller shall assign to the
Purchaser at the Closing all of the Seller’s right, title and interest in and to
all awards, if any, for the taking, and the Purchaser shall be entitled to
receive and keep all awards for the taking of the Property or portion thereof.

 

10.3         Survival. The parties’ obligations, if any, under this Section 10
shall survive the Closing.

 

11.         DEFAULT.

 

11.1         Default by the Seller. If the transaction herein contemplated fails
to close solely as a result of a default by Seller hereunder, the Purchaser may,
as its sole remedy, either (a) terminate this Agreement and receive a refund of
its Deposit, plus Purchaser’s actual documented out-of-pocket third party
expenses incurred in conducting its due diligence with respect to the
transaction contemplated by this Agreement, subject to a cap of Twenty-Five
Thousand Dollars ($25,000.00), or (b) pursue an action for specific performance
provided that Purchaser files such action in a court with appropriate
jurisdiction within thirty (30) days of Seller’s default.

 

-19-

 

  

11.2         Default by the Purchaser. IF THE TRANSACTION HEREIN CONTEMPLATED
FAILS TO CLOSE AS A RESULT OF THE DEFAULT OF THE PURCHASER HEREUNDER, THEN
SELLER’S SOLE AND EXCLUSIVE RIGHT AND REMEDY FOR SUCH BREACH SHALL BE TO
TERMINATE THIS AGREEMENT AND CANCEL THE ESCROW BY WRITTEN NOTICE TO PURCHASER
AND ESCROW AGENT IN WHICH EVENT ESCROW AGENT SHALL PAY THE DEPOSIT AND ALL
ACCRUED INTEREST THEREON TO SELLER. THE DEPOSIT SHALL CONSTITUTE LIQUIDATED
DAMAGES. THE PARTIES ACKNOWLEDGE AND AGREE THAT IT WOULD BE IMPRACTICABLE OR
EXTREMELY DIFFICULT TO FIX THE ACTUAL DAMAGES THAT SELLER WOULD INCUR AS A
RESULT OF THE BREACH BY PURCHASER OF ITS OBLIGATION TO PURCHASE THE PROPERTY.
THE PARTIES AGREE THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF SELLER’S DAMAGES,
AND SHALL CONSTITUTE LIQUIDATED DAMAGES IN ACCORDANCE WITH ALL LAWS APPLICABLE
TO THIS TRANSACTION INCLUDING WITHOUT LIMITATION ALL LAWS OF THE JURISDICTION IN
WHICH THE PROPERTY IS LOCATED. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH
LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING
OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,
1676 AND 1677. SELLER WAIVES ALL OTHER REMEDIES FOR PURCHASER’S BREACH OF ITS
OBLIGATION TO PURCHASE THE PROPERTY IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, PROVIDED HOWEVER NOTHING HEREIN SHALL LIMIT SELLER’S RIGHT TO
RECOVERY FOR (i) PURCHASER’S INDEMNITY OBLIGATIONS; (ii) ANY RIGHT TO ATTORNEY’S
FEES UNDER THIS AGREEMENT; (iii) DAMAGES RESULTING FROM PURCHASER MAKING A BAD
FAITH FILING OF A LIS PENDENS AGAINST THE PROPERTY; (iv) ANY BREACH OF THE
CONFIDENTIALITY PROVISIONS; OR (v) PURCHASER’S OBLIGATION TO PROVIDE COPIES OF
PURCHASER’S DUE DILIGENCE DOCUMENTS TO SELLER.

 

/s/ JMB   /s/ KE Purchaser’s Initials   Seller’s Initials

  

12.         Miscellaneous.

 

12.1         Brokers. Each of the parties hereto represents to the other parties
that it dealt with no broker, finder or like agent in connection with this
Agreement or the transactions contemplated hereby other than Darla Longo, CBRE,
Orange, California, which Seller shall compensate under a separate written
agreement if and only if the Closing occurs. Each party shall indemnify and hold
harmless the other party and its respective legal representatives, heirs,
successors and assigns from and against any loss, liability or expense,
including reasonable attorneys’ fees, charges and disbursements arising out of
any claim or claims for commissions or other compensation for bringing about
this Agreement or the transactions contemplated hereby made by any other broker,
finder or like agent, if such claim or claims are based in whole or in part on
dealings with the indemnifying party. The provisions of this Section 12.1 shall
survive the Closing.

 

-20-

 

  

12.2        Publicity. The parties agree that, during the period prior to
Closing, and except as otherwise required by law and except for the exercise of
any remedy hereunder, no party shall, with respect to this Agreement and the
transactions contemplated hereby, contact or conduct negotiations with public
officials, make any public pronouncements, issue press releases or otherwise
furnish information regarding this Agreement or the transactions contemplated to
any third party (other than such party's consultants, attorneys, experts, and
prospective lenders and investors) without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.

 

12.3        Notices.

 

(a)          Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, by telecopier with confirmed receipt, or by mail or Federal
Express or similar expedited commercial carrier, addressed to the recipient of
the notice, postpaid and registered or certified with return receipt requested
(if by mail), or with all freight charges prepaid (if by Federal Express or
similar carrier).

 

(b)          All notices required or permitted to be sent hereunder shall be
deemed to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.

 

(c)          All such notices shall be addressed,

  

If to the Seller, to: COP-Western Avenue, LLC   1920 Main St, Suite 400  
Irvine, CA  92614   Attn:  Mr. Jon Carley   Telecopier No:  (949) 852-2734    
with a copy to: Rutan and Tucker, LLP   611 Anton Boulevard, Suite 1400   Costa
Mesa, CA 92626   Attn:  Joe Maga, Esq.   Telecopier No:  (714) 546-9035     If
to Purchaser: MMB Management, LLC   17610 Pacheco Pass Highway   Hollister, CA
95023   Attn:  Mr. Todd W. Mathis   Manager   Telecopier No:  (408) 847-4509

 

-21-

 

  

  MMB Management, LLC   21985 Elsberry Way   Lake Forest, CA 92630   Attn:  Mr.
Scott T. Barnes   Manager   Telecopier No: (949) 305-1403       MMB Management,
LLC   c/o National Association of Home Builders   1201 15th Street, NW  
Washington, D.C.  20005-2800   Attn:  Mr. Jared K. Mathis   Manager   Telecopier
No: (202) 266-8587     with a copy to: William B. Brinckloe, Jr., Esq.   9841
Irvine Center Drive, Suite 220   Irvine, CA 92618-4316   Telecopier No: (949)
475-6999     If to Escrow Agent, to: First American Title Company   National
Commercial Services   5 First American Way   Santa Ana, CA 92707   Attn:  Ms.
Patty Beverly   Telecopier No:  (714) 242-7479

  

(d)          By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.

 

12.4         Waivers. Subject to the terms of the last paragraph of Section 6,
any waiver of any term or condition of this Agreement, or of the breach of any
covenant, representation or warranty contained herein, in any one instance,
shall not operate as or be deemed to be or construed as a further or continuing
waiver of any other breach of such term, condition, covenant, representation or
warranty or any other term, condition, covenant, representation or warranty, nor
shall any failure at any time or times to enforce or require performance of any
provision hereof operate as a waiver of or affect in any manner such party’s
right to at a later time enforce or require performance of such provision or any
other provision hereof. This Agreement may not be amended, nor shall any waiver,
change, modification, consent or discharge be effected, except by an instrument
in writing executed by or on behalf of the party against whom enforcement of any
amendment, waiver, change, modification, consent or discharge is sought.

 

-22-

 

 

 

12.5       Assignment; Successors and Assigns. Subject to Section 12.14, this
Agreement and all rights and obligations hereunder shall not be assignable,
directly or indirectly, by any party without the written consent of the other,
except that the Purchaser may assign this Agreement without Seller's consent to
any entity or entities owned in part and controlled or managed by Purchaser,
provided that Purchaser shall give Seller written notice of such assignment at
least ten (10) days before the Closing Date; provided, however, that, in the
event this Agreement shall be assigned by Purchaser to any one or more entities
owned in part and controlled or managed by the Purchaser, the Purchaser named
herein shall remain liable for the obligations of the “Purchaser” hereunder.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns. This Agreement is not intended and shall not
be construed to create any rights in or to be enforceable in any part by any
other persons.

 

12.6       Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other provision or
provisions herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict with such
constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.

 

12.7       Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the
subject matter hereof. The parties may also exchange signatures by facsimile or
electronic mail.

 

12.8       Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.

 

12.9       Attorneys’ Fees. If any lawsuit or arbitration or other legal
proceeding arises in connection with the interpretation or enforcement of this
Agreement, the prevailing party therein shall be entitled to receive from the
other party the prevailing party’s costs and expenses, including reasonable
attorneys’ fees and expert witness fees incurred in connection therewith, in
preparation therefor and on appeal therefrom, which amounts shall be included in
any judgment therein.

 

-23-

 

 

12.10       Section and Other Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

12.11       Time of Essence. Time shall be of the essence with respect to the
performance of each and every covenant and obligation, and the giving of all
notices, under this Agreement.

 

12.12       Governing Law. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of California.

 

12.13       Arbitration. Any party hereto may elect to submit any dispute
hereunder that has an amount in controversy in excess of $100,000 to arbitration
hereunder. Any such arbitration shall be conducted in Orange County, California
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then pertaining and the decision of the arbitrators with respect to
such dispute shall be binding, final and conclusive on the parties.

 

WHENEVER AN ARBITRATION IS REQUIRED, THE ARBITRATOR OR REFEREE SHALL BE SELECTED
IN ACCORDANCE WITH THIS SECTION. WITHIN FIVE (5) DAYS AFTER WRITTEN NOTICE OF
ANY DISPUTE IS GIVEN TO THE OTHER PARTY, THE PARTIES’ SHALL ATTEMPT TO AGREE ON
A MUTUALLY ACCEPTABLE ARBITRATOR. IN THE EVENT THE PARTIES ARE UNABLE TO SO
AGREE WITHIN SUCH FIVE (5) DAY PERIOD, THE ARBITRATOR OR REFEREE SHALL BE
SELECTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. THE DISPUTED MATTER SHALL BE HEARD BY THE ARBITRATOR OR
REFEREE SO APPOINTED NO LATER THAN TWENTY (20) DAYS AFTER SUCH APPOINTMENT.
ARBITRATORS SHALL APPLY CALIFORNIA LAW AND BE BOUND BY PRECEDENT AND STATUTORY
RULES AS THOUGH THEY WERE JUDGES SITTING IN A CALIFORNIA COURT. STATEMENTS OF
ARBITRATION AWARDS SHALL BE IN WRITING. THE PARTIES SHALL BE ENTITLED IN ANY
ARBITRATION HEREUNDER, TO SUCH RIGHTS OF DISCOVERY AS DETERMINED BY THE
ARBITRATOR.

 

The fees of the arbitrator and the expenses incident to the proceedings shall be
borne equally between the Seller and the Purchaser, unless the arbitrators
decide otherwise. The fees of respective counsel engaged by the parties, and the
fees of expert witnesses and other witnesses called for by the parties, shall be
paid by the respective party engaging such counsel or calling or engaging such
witnesses.

 

-24-

 

 

The decision of the arbitrators shall be rendered within thirty (30) days after
appointment of the arbitrator. Such decision shall be in writing and in
duplicate, one counterpart thereof to be delivered to the Seller and one to the
Purchaser. A judgment of a court of competent jurisdiction may be entered upon
the award of the arbitrators in accordance with the rules and statutes
applicable thereto then obtaining.

 

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 VOLUNTARILY.

 

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, AND WAIVE ANY APPLICABLE LAW THAT WOULD INVALIDATE THIS
SECTION.

 

/s/ JMB   /s/ KE Purchaser’s Initials   Seller’s Initials

 

12.14       Like-Kind Exchange. At either party’s request, the non-requesting
party will take all actions reasonably requested by the requesting party in
order to effectuate all or any part of the transactions contemplated by this
Agreement a like-kind exchange for the benefit of the requesting party in
accordance with Section 1031 of the Internal Revenue Code, including executing
an instrument acknowledging and consenting to any assignment by the requesting
party of its rights hereunder to a qualified intermediary or an exchange
accommodation titleholder. In furtherance of the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the requesting party may
assign its rights under this Agreement to a “qualified intermediary” or an
“exchange accommodation titleholder” in order to facilitate, at no cost or
expense to the other, a forward or reverse like-kind exchange under Section 1031
of the Internal Revenue Code; provided, however, that such assignment will not
relieve the requesting party of any of its obligations hereunder. The
non-requesting party will also agree to issue all closing documents, including
the deed, to the applicable qualified intermediary or exchange accommodation
titleholder if so directed by the requesting party prior to Closing.
Notwithstanding the foregoing, in no event shall the non-exchanging party incur
or be subject to any liability that is not otherwise provided for in this
Agreement; the Closing Date shall not be delayed as the result of such exchange;
all additional costs in connection with such exchange shall be borne by the
exchanging party; and the exchanging party shall indemnify the non-exchanging
party and hold the non-exchanging party harmless from and against any and all
claims, demands, liabilities, costs, expenses, penalties, damages and losses,
including, without limitation, reasonable attorneys’ fees relating to the
non-exchanging party’s participation in such exchange. This Agreement is not
subject to or conditioned upon the ability to consummate an exchange. The
indemnification provision set forth in this Section 12.14 shall survive the
Closing.

 

-25-

 

 

12.15       Recording. Neither this Agreement nor any memorandum thereof may be
recorded without the prior written consent of both parties.

 

12.16       Non-liability of Representatives of Seller. No trustee, officer,
shareholder, employee or agent of the Seller shall be held to any personal
liability, jointly or severally, for any obligation of, or claim against, the
Seller. Purchaser shall look only to the assets of the Seller for the payment of
any sum or the performance of any obligation hereunder.

 

12.17       Non-liability of Representatives of Purchaser. No trustee, officer,
shareholder, employee or agent of Purchaser shall be held to any personal
liability, jointly or severally, for any obligation of, or claim against,
Purchaser. Seller shall look only to the assets of Purchaser for the payment of
any sum or the performance of any obligation hereunder.

 

12.18       Waiver. The Purchaser hereby acknowledges that it is a sophisticated
purchaser of real properties and that it is aware of all disclosures the Seller
is or may be required to provide to the Purchaser in connection with the
transactions contemplated hereby pursuant to any law, rule or regulation
(including those of California and those of the states in which the Property is
located).

 

12.19       Further Assurances. In addition to the actions recited herein and
contemplated to be performed, executed, and/or delivered by the Seller and the
Purchaser, the Seller and the Purchaser agree to perform, execute and/or deliver
or cause to be performed, executed and/or delivered at the Closing or after the
Closing any and all such further acts, instruments, deeds and assurances as may
be reasonably required to establish, confirm or otherwise evidence the Seller’s
satisfaction of any disclosure obligations or to otherwise consummate the
transactions contemplated hereby.

 

12.20       [Intentionally omitted.]

 

12.21       IRS Real Estate Sales Reporting. Purchaser and Seller hereby appoint
Escrow Agent as, and Escrow Agent agrees to act as, “the person responsible for
closing” the transaction which is the subject of this Agreement pursuant to
Internal Revenue Code Section 6045(e). Escrow Agent shall prepare and file all
informational returns, including, without limitation, IRS Form 1099-S and shall
otherwise comply with the provisions of Internal Revenue Code Section 6045(e).
Escrow Agent agrees to comply with the provisions of Executive Order 13224
regarding the Specially Designated Nationals Blocked Persons list.

 

12.22       Entire Agreement. This Agreement and all Exhibits hereto and the
instruments referred to herein contain the entire agreement and understanding
between the parties hereto relating to the subject matter hereof.

 

12.23       Interrelation. This Agreement is in all respects intended by each
party hereto to be deemed and construed to have been jointly prepared by the
parties. The parties hereby expressly agree that any uncertainty or ambiguity
existing herein shall not be interpreted against either of them as a result of
the actual identity of the draftsman.

 

[SIGNATURES ON FOLLOWING PAGE]

 

-26-

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a
sealed instrument as of the date first above written.

 

  SELLER:      

COP-WESTERN AVENUE, LLC,
a California limited liability company

      By: /s/ Kent Eikanas   Name: Kent Eikanas   Its: President

 

  PURCHASER:       MMB MANAGEMENT, LLC, a
California limited liability company       By: THE LEWIS FENNO MOULTON TRUST
UDT, APRIL 17, 1925     Manager

 

    By: /s/ Lewis M. Mathis     Lewis M. Mathis     Trustee         By: /s/ Jane
M. Barnes     Jane M. Barnes     Trustee         By: /s/ Glenn E. Mathis, Jr.  
  Glenn E. Mathis, Jr.     Trustee

 

  By: /s/ Todd W. Mathis     Todd W. Mathis     Manager       By: /s/ Scott T.
Barnes     Scott T. Barnes     Manager       By: /s/Jared K. Mathis     Jared K.
Mathis     Manager

 

-27-

 

 

Acceptance by Escrow AGENT

 

By signing below, Escrow Agent acknowledges that Escrow Agent has received a
fully executed counterpart of this Purchase and Sale Agreement and agrees to act
as Escrow Agent thereunder and to be bound by and perform the terms thereof as
such terms apply to Escrow Agent.

 

Dated: December 31, 2012 FIRST AMERICAN TITLE COMPANY, a   California
corporation       By: /s/Patty Beverly     Patty Beverly     Senior Escrow
Officer, CEO

 

-28-

 

 

EXHIBIT “A”

 

Land

 

The land is situated is in the City of Los Angeles, County of Los Angeles, State
of California, and is described as follows:

 

PARCEL A:

 

THOSE PORTIONS OF LOTS 18, 19 AND 20 OF TRACT NO. 52172-02, IN THE CITY OF LOS
ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK
1238 PAGES 17 TO 22, INCLUSIVE, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, AS DESCRIBED AS PARCEL 3 IN EXHIBIT "A" OF THAT CERTAIN CERTIFICATE
OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8, 2000 AS
INSTRUMENT NO. 00-1917705, OFFICIAL RECORDS AND BEING MORE PARTICULARLY
DESCRIBED AS A WHOLE AS FOLLOWS:

 

COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 18; THENCE ALONG THE NORTHERLY
LINE OF SAID LOT 18, SOUTH 86° 30’ 05" WEST 0.67 FEET TO THE TRUE POINT OF
BEGINNING; THENCE LEAVING SAID NORTHERLY LINE OF LOT 18, "SOUTH" 798.54 FEET TO
THE SOUTHERLY LINE OF SAID LOT 20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOT
20, SOUTH 89° 59’ 31" WEST 346.30 FEET TO THE SOUTHWEST CORNER OF SAID LOT 20;
THENCE ALONG THE WESTERLY LINE OF SAID LOTS 18, 19, AND 20, NORTH 00° 23’ 15"
WEST 690.86 FEET; THENCE NORTH 89° 36’ 45" EAST 1.89 FEET TO A POINT OF A NON
TANGENT CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 90.00 FEET, A RADIAL
LINE TO SAID POINT BEARS SOUTH 88° 54’ 26" WEST; THENCE NORTHEASTERLY ALONG SAID
CURVE, THROUGH A CENTRAL ANGLE OF 87° 35’ 39", AN ARC LENGTH OF 137.59 FEET;
THENCE ALONG THE NORTHERLY LINE OF SAID LOT 18, NORTH 86° 30’ 05" EAST 265.09
FEET TO THE TRUE POINT OF BEGINNING.

 

PARCEL B:

 

EASEMENTS FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS, DRAINAGE, FIRE
HYDRANTS, UNDERGROUND UTILITIES, AND REFUSE ENCLOSURE AS CREATED BY THAT CERTAIN
DECLARATION AND GRANT OF EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT, RECORDED
SEPTEMBER 21, 2000 AS INSTRUMENT NO. 00-1482684, OVER PORTIONS OF CERTAIN
PARCELS OF LAND DESCRIBED AS PARCELS 1 AND 2 IN EXHIBIT "A" OF THAT CERTAIN
CERTIFICATE OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8,
2000 AS INSTRUMENT NO. 00-1917705, AS MORE PARTICULARLY DESCRIBED IN SAID
DECLARATION, UPON THE TERMS, COVENANTS AND PROVISIONS THEREIN CONTAINED, AS
AMENDED BY A DOCUMENT ENTITLED "FIRST AMENDMENT TO DECLARATION GRANT OF
EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT", RECORDED DECEMBER 19, 2000 AS
INSTRUMENT NO. 00-1975273.

 

PARCEL C:

 

THOSE CERTAIN EASEMENT RIGHTS AS CREATED BY THAT CERTAIN DOCUMENT ENTITLED
"DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR HARBOR GATEWAY
CENTER, INDUSTRIAL TRACT PARCEL", RECORDED AUGUST 6, 1999 AS INSTRUMENT NO. 99-
1483487, AS AMENDED BY DOCUMENTS RECORDED DECEMBER 10, 1999 AS INSTRUMENT NOS.
99-2285253, 99-2285254, AND 99-2285255, AFFECTING THE COMMON AREA, AS DEFINED
THEREIN. SUBJECT TO THE TERMS, COVENANTS AND PROVISIONS CONTAINED THEREIN.

 

APN: 7351-021-038

 

EXHIBIT “A”

 

 

 

EXHIBIT “B”

 

General Assignment and Assumption

 

(See attached copy)

 

EXHIBIT “B”

 

 

 

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

 

This ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”) is made as of
January 23, 2013 (“Effective Date”) by and between COP-WESTERN AVENUE, LLC, a
California limited liability company (“Assignor”), and MMB MANAGEMENT, LLC, a
California limited liability company (“Assignee”).

 

RECITALS

 

A.       Assignor and Assignee are parties to that certain Purchase and Sale
Agreement (the “Purchase Agreement”), dated as of December 28, 2012, with
respect to that certain real property (the “Property”) more specifically
described in “Exhibit A” attached hereto and made a part hereof.

 

B.       Concurrently with the execution and delivery of this Assignment,
Assignor is conveying the Property to Assignee.

 

C.       Assignor desires to assign, transfer and convey to Assignee to the
extent assignable, and Assignee desires to obtain, all of Assignor’s right,
title, interest, liabilities and obligations in and to the Contracts (as
hereinafter defined).

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

As of the Effective Date Assignor does hereby sell, assign, convey and transfer
unto Assignee, to the extent assignable, all of Assignor’s right, title,
interest, liabilities and obligations in and to the service contracts and
assignable equipment leases (“Contracts”) described on “Exhibit B” attached
hereto and made a part hereof, provided, however, that Assignor makes no
representation or warranty with respect to the assignability of same, except as
may be expressly provided in the Purchase Agreement.

 

By execution of this Assignment, as of the Effective Date Assignee
unconditionally assumes and agrees to perform all of the covenants, agreements,
liabilities and obligations under the Contracts binding on Assignor or the
Property arising after the Effective Date. Assignor hereby agrees to indemnify,
hold harmless and defend Assignee from and against any and all third party
obligations, liabilities, costs and claims actions, expenses and fees (including
reasonable attorney’s fees) arising as a result of or with respect to any of the
Contracts that are attributable to the period of time prior to the Effective
Date. Assignee hereby agrees to indemnify, hold harmless and defend Assignor
from and against any and all third party obligations, liabilities, costs and
claims actions, expenses and fees (including reasonable attorney’s fees) arising
as a result of or with respect to any of the Contracts that are attributable to
the period of time from and after the Effective Date.

 

EXHIBIT “B”

-1-

 

 

ASSIGNEE ACKNOWLEDGES THAT IT HAS INSPECTED THE CONTRACTS AND THAT THIS
ASSIGNMENT IS MADE BY ASSIGNOR AND ACCEPTED BY ASSIGNEE WITHOUT REPRESENTATION
OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, AND WITHOUT RECOURSE
AGAINST ASSIGNOR, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE PURCHASE
AGREEMENT.

 

EXECUTED to be effective January 23, 2013.

 

  ASSIGNOR:       COP-WESTERN AVENUE, LLC,   a California limited liability
company       By:     Name:     Its:  

 

  ASSIGNEE:       MMB MANAGEMENT, LLC, a
California limited liability company       By: THE LEWIS FENNO MOULTON TRUST
UDT, APRIL 17, 1925     Manager

 

    By:       Lewis M. Mathis     Trustee         By:       Jane M. Barnes    
Trustee         By:       Glenn E. Mathis, Jr.     Trustee

 

  By:       Todd W. Mathis     Manager       By:       Scott T. Barnes    
Manager       By:       Jared K. Mathis     Manager

 

-2-

 

 

Exhibit A to Assignment and Assumption of Contracts

 

LEGAL DESCRIPTION

 

The land is situated in the City of Los Angeles, County of Los Angeles, State of
California, and is described as follows:

 

PARCEL A:

 

THOSE PORTIONS OF LOTS 18, 19 AND 20 OF TRACT NO. 52172-02, IN THE CITY OF LOS
ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK
1238 PAGES 17 TO 22, INCLUSIVE, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, AS DESCRIBED AS PARCEL 3 IN EXHIBIT "A" OF THAT CERTAIN CERTIFICATE
OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8, 2000 AS
INSTRUMENT NO. 00-1917705, OFFICIAL RECORDS AND BEING MORE PARTICULARLY
DESCRIBED AS A WHOLE AS FOLLOWS:

 

COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 18; THENCE ALONG THE NORTHERLY
LINE OF SAID LOT 18, SOUTH 86° 30’ 05" WEST 0.67 FEET TO THE TRUE POINT OF
BEGINNING; THENCE LEAVING SAID NORTHERLY LINE OF LOT 18, "SOUTH" 798.54 FEET TO
THE SOUTHERLY LINE OF SAID LOT 20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOT
20, SOUTH 89° 59’ 31" WEST 346.30 FEET TO THE SOUTHWEST CORNER OF SAID LOT 20;
THENCE ALONG THE WESTERLY LINE OF SAID LOTS 18, 19, AND 20, NORTH 00° 23’ 15"
WEST 690.86 FEET; THENCE NORTH 89° 36’ 45" EAST 1.89 FEET TO A POINT OF A NON
TANGENT CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 90.00 FEET, A RADIAL
LINE TO SAID POINT BEARS SOUTH 88° 54’ 26" WEST; THENCE NORTHEASTERLY ALONG SAID
CURVE, THROUGH A CENTRAL ANGLE OF 87° 35’ 39", AN ARC LENGTH OF 137.59 FEET;
THENCE ALONG THE NORTHERLY LINE OF SAID LOT 18, NORTH 86° 30’ 05" EAST 265.09
FEET TO THE TRUE POINT OF BEGINNING.

 

PARCEL B:

 

EASEMENTS FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS, DRAINAGE, FIRE
HYDRANTS, UNDERGROUND UTILITIES, AND REFUSE ENCLOSURE AS CREATED BY THAT CERTAIN
DECLARATION AND GRANT OF EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT, RECORDED
SEPTEMBER 21, 2000 AS INSTRUMENT NO. 00-1482684, OVER PORTIONS OF CERTAIN
PARCELS OF LAND DESCRIBED AS PARCELS 1 AND 2 IN EXHIBIT "A" OF THAT CERTAIN
CERTIFICATE OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8,
2000 AS INSTRUMENT NO. 00-1917705, AS MORE PARTICULARLY DESCRIBED IN SAID
DECLARATION, UPON THE TERMS, COVENANTS AND PROVISIONS THEREIN CONTAINED, AS
AMENDED BY A DOCUMENT ENTITLED "FIRST AMENDMENT TO DECLARATION GRANT OF
EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT", RECORDED DECEMBER 19, 2000 AS
INSTRUMENT NO. 00-1975273.

 

PARCEL C:

 

THOSE CERTAIN EASEMENT RIGHTS AS CREATED BY THAT CERTAIN DOCUMENT ENTITLED
"DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR HARBOR GATEWAY
CENTER, INDUSTRIAL TRACT PARCEL", RECORDED AUGUST 6, 1999 AS INSTRUMENT NO. 99-
1483487, AS AMENDED BY DOCUMENTS RECORDED DECEMBER 10, 1999 AS INSTRUMENT NOS.
99-2285253, 99-2285254, AND 99-2285255, AFFECTING THE COMMON AREA, AS DEFINED
THEREIN. SUBJECT TO THE TERMS, COVENANTS AND PROVISIONS CONTAINED THEREIN.

 

APN: 7351-021-038

 

-1-

 

 

Exhibit B to Assignment and Assumption of Contracts

 

EQUIPMENT LEASES

 

 

 

 

EXHIBIT “C”

 

Assignment and Assumption of Leases

 

[See attached copy.]

 

EXHIBIT “C”

 

 

 

ASSIGNMENT AND ASSUMPTION OF LEASES

 

This ASSIGNMENT AND ASSUMPTION OF LEASES is hereby entered into as of January
23, 2013 (“Effective Date”), by and between COP-WESTERN AVENUE, LLC, a
California limited liability company (“Assignor”), and MMB MANAGEMENT, LLC, a
California limited liability company (“Assignee”).

 

1.       Assignment. As of the Effective Date Assignor does hereby sell, assign,
transfer and set over unto Assignee, without representation or warranty of any
kind or nature whatsoever, express or implied, all of Assignor’s interest as
landlord in and to (i) all leases of all or any portion of the buildings or
other improvements located on the land described on Exhibit “1” attached hereto
and made a part hereof (the “Property”), which leases are more particularly
described in Exhibit “2” attached hereto and made a part hereof, and all
guaranties of, or relating to, those leases and/or any portion of any lease, if
any (collectively, the “Leases”), and (ii) all security deposits, advanced
rentals and all letters of credit, paid or deposited by tenants or occupants
under the Leases (the “Security Deposits”).

 

2.       Assumption. Assignee, for itself and its successors and assigns,
(i) hereby accepts the foregoing assignment, and (ii) agrees to, and hereby
does, assume and agree to keep, pay, perform, observe and discharge all of the
terms, covenants, conditions, agreements, provisions and obligations contained
in Leases to be kept, paid, performed, observed and discharged by the landlord
thereunder from and after the Effective Date, including without limitation, the
payment of all broker’s commissions and tenant improvement allowances, as and to
the extent provided in the Purchase and Sale Agreement for the Property between
Assignor and Assignee dated December 28, 2012.

 

3.       Indemnities. Assignee agrees to, and hereby does, indemnify, defend and
hold harmless Assignor from and against all claims, liabilities, damages and
expenses (including, without limitation, reasonable attorneys’ fees and
disbursements) which may be asserted against or imposed on or incurred by
Assignor by reason of Assignee’s failure to perform any of its obligations under
the Leases after the Effective Date, and including, without limiting the
generality of the foregoing, by reason of Assignee’s disposition or alleged
disposition of any of the Security Deposits. Assignor agrees to, and hereby
does, indemnify, defend and hold harmless Assignee from and against all claims,
liabilities, damages and expenses (including, without limitation, reasonable
attorneys’ fees and disbursements) which may be asserted against or imposed on
or incurred by Assignee by reason of Assignor’s failure to perform any of its
obligations under the Leases prior to the Effective Date.

 

5.       Attorneys’ Fees. In the event of any action between Assignor and
Assignee seeking enforcement or interpretation of any of the terms and
conditions to this Assignment, the prevailing party in such action, whether by
fixed judgment or settlement, shall be entitled to recover, in addition to
damages, injunctive or other relief, its actual costs and expenses, including,
but not limited to, actual attorneys’ fees, court costs and expert witness fees.
Such costs shall include attorneys’ fees, costs and expenses incurred in
(a) post-judgment motions, (b) contempt proceedings, (c) garnishment, levy and
debtor and third-party examination, (d) discovery, and (e) bankruptcy
litigation.

 

EXHIBIT “C”

-1-

 

 

6.       Successors. This Assignment shall inure to the benefit of Assignor and
Assignee, and their respective heirs, assigns and successors in interest.

 

7.       Counterparts. This Assignment may be signed by the parties in different
counterparts and the signature pages combined to create a document binding on
all parties.

 

IN WITNESS WHEREOF, this Assignment of Leases, has been executed by Assignor and
Assignee as of the 23rd day of January, 2013.

 

 

  ASSIGNOR:       COP-WESTERN AVENUE, LLC,   a California limited liability
company       By:     Name:     Its:  

 

  ASSIGNEE:       MMB MANAGEMENT, LLC, a
California limited liability company       By: THE LEWIS FENNO MOULTON TRUST
UDT, APRIL 17, 1925     Manager

 

    By:       Lewis M. Mathis     Trustee         By:       Jane M. Barnes    
Trustee         By:       Glenn E. Mathis, Jr.     Trustee

 

  By:       Todd W. Mathis     Manager       By:       Scott T. Barnes    
Manager       By:       Jared K. Mathis     Manager

 

-2-

 

 

EXHIBIT 1

 

 

 

 

EXHIBIT 2

 

 

 

 

EXHIBIT “D”

 

Bill of Sale

 

[See attached copy.]

 

EXHIBIT “D”

 

 

 

BILL OF SALE

 

This BILL OF SALE (this “Bill of Sale”) is made as of the 23rd day of January,
2013 (“Effective Date”), by and between COP-WESTERN AVENUE, LLC, a California
limited liability company (“Assignor”), and MMB MANAGEMENT, LLC, a California
limited liability company (“Assignee”)..

 

For good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:

 

1.       Assignor hereby sells, transfers, assigns and conveys to Assignee the
following as of the Effective Date. To the extent assignable, all right, title
and interest of Assignor in and to all tangible personal property (“Personalty”)
located on, and used in connection with the management, maintenance or operation
of that certain land and improvements located on the real property, as more
particularly described in Exhibit “1” hereto and made a part hereof (“Real
Property”), but excluding tangible personal property owned or leased by
Assignor’s property manager or the tenants of the Real Property.

 

2.       This Bill of Sale is given pursuant to that certain Purchase and Sale
Agreement (as amended, the “Purchase Agreement”) dated as of December 28, 2012,
between Assignor and Assignee. Except as set forth in the Purchase Agreement,
the Personalty conveyed hereunder is conveyed by Assignor and accepted by
Assignee AS IS, WHERE IS, AND WITH ALL FAULTS AND EXCLUDES ALL WARRANTIES,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF
FACT OR PROMISE OR BY ANY DESCRIPTION OF THE PROPERTY CONVEYED HEREUNDER, OR BY
ANY SAMPLE OR MODEL THEREOF, AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR
CREATED BY THE UNIFORM COMMERCIAL CODE.

 

3.       Assignee hereby accepts the assignment of the Personalty and agrees to
assume and discharge, in accordance with the terms thereof, all of the
obligations thereunder from and after the Effective Date hereof.

 

[Signatures set forth on following page.]

 

EXHIBIT “D”

-1-

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale as of the
date first above written.

 

 

  ASSIGNOR:       COP-WESTERN AVENUE, LLC,   a California limited liability
company       By:     Name:     Its:  

 

  ASSIGNEE:       MMB MANAGEMENT, LLC, a
California limited liability company       By: THE LEWIS FENNO MOULTON TRUST
UDT, APRIL 17, 1925     Manager

 

    By:       Lewis M. Mathis     Trustee         By:       Jane M. Barnes    
Trustee         By:       Glenn E. Mathis, Jr.     Trustee

 

  By:       Todd W. Mathis     Manager       By:       Scott T. Barnes    
Manager       By:       Jared K. Mathis     Manager

 

-2-

 

 

EXHIBIT “E”

 

Notices to Tenants

 

[See attached copy.]

 

EXHIBIT “E”

 

 

 

NOTICE TO TENANTS

 

_____________________, 2013

 

               

 

Dear __________:

 

You are hereby notified that _______________________________ (“Seller”), the
current owner of __________________ (the “Property”) and the current owner of
the landlord’s interest in your lease in the Property, has sold the Property to
_______________________ (“New Owner”), as of the above date. In connection with
such sale, Seller has assigned and transferred its interest in your lease and
your security deposit thereunder in the amount of $____________ (the “Security
Deposit”) to New Owner, and New Owner has assumed and agreed to perform all of
the landlord’s obligations under your lease (including any obligations set forth
in your lease or under applicable law to repay or account for the Security
Deposit) arising after the above date. New Owner acknowledges that New Owner has
received and is responsible for the Security Deposit.

 

Accordingly, (a) all your obligations under the lease from and after the date
hereof, including your obligation to pay rent, shall be performable to and for
the benefit of New Owner, its successors and assigns, and (b) all the
obligations of the landlord under the lease arising after the above date,
including any obligations thereunder or under applicable law to repay or account
for the Security Deposit, shall be the binding obligation of New Owner and its
successors and assigns.

 

Unless and until you are otherwise notified in writing by New Owner, the address
of New Owner for all purposes under your lease is:

 

               

 

EXHIBIT “E”

-1-

 

 

 

Please immediately forward a new certificate of insurance naming New Owner as an
additional insured under your liability policy as required by your lease.

 

  Very truly yours,       SELLER:      
                                                                               ,
  a                                                                           
By:     Name:     Title:           NEW OWNER:      
                                                                               ,
  a                                                                             
By:     Name:     Title:  

 

-2-

 

  

EXHIBIT “F”

 

Form of Estoppel Certificate

 

[See attached copy.]

 

EXHIBIT “F”

  

-1-

 

 

TENANT ESTOPPEL CERTIFICATE

 

To: ____________________     Re: Lease Pertaining
to                                                      (the “Project”)    

Ladies and Gentlemen:

 

The undersigned, as tenant (“Tenant”), hereby states and declares as follows:

 

1.          Tenant is the lessee under that certain lease (the “Lease”)
pertaining to the Project which is dated _______.

 

2.          The name of the current Landlord is: __________________________.

 

3.          The Lease is for the following portion of the Project
_______________________ (the “Demised Premises”).

 

4.          The Lease has not been modified or amended except by the following
documents (if none, so state): _________

 

5.          The initial term of the Lease commenced on _________, [__________]
and shall expire on ______________, [__________], unless sooner terminated in
accordance with the terms of the Lease. Tenant has no option to renew or extend
the term of the Lease, except as follows (if none, so state): ______________.

 

6.          The Lease, as it may have been modified or amended, contains the
entire agreement of Landlord and Tenant with respect to the Demised Premises,
and is in full force and effect.

 

7.          As of the date hereof, Tenant is occupying the Demised Premises and
is paying rent on a current basis under the Lease.

 

8.          The minimum monthly or base rent currently being paid by Tenant for
the Demised Premises pursuant to the terms of the Lease is $______ per month.

 

a.           Common area maintenance, taxes, insurance and other charges (the
“Reimbursables”), if any, due under the Lease have been paid through
____________________.

 

9.          Tenant has accepted possession of the Demised Premises, and all
items of an executory nature relating thereto to be performed by Landlord have
been completed, including, but not limited to, completion of construction
thereof (and all other improvements required under the Lease) in accordance with
the terms of the Lease and within the time periods set forth in the Lease.
Landlord has paid in full any required contribution towards work to be performed
by Tenant under the Lease, except as follows (if none, so state):
____________________.

 

EXHIBIT “F”

 

-1-

 

 

10.         No default or event that with the passage of time or notice would
constitute a default (hereinafter collectively a “Default”) on the part of
Tenant exists under the Lease in the performance of the terms, covenants and
conditions of the Lease required to be performed on the part of Tenant.

 

11.         To the best of Tenant's knowledge, no Default on the part of
Landlord exists under the Lease in the performance of the terms, covenants and
conditions of the Lease required to be performed on the part of Landlord.

 

12.         Tenant has no option or right to purchase all or any part of the
Project.

 

13.         Tenant has not assigned, sublet, transferred or otherwise disposed
of its interest in the Lease and/or the Premises, or any part thereof.

 

14.         Neither the Lease nor any obligations of Tenant thereunder have been
guaranteed by any person or entity, except as follows (if none, so state):
______________________.

 

15.         No prepayments of rentals due under the Lease have been made for
more than one month in advance. No security or similar deposit has been made
under the Lease, except for the sum of $_____ which has been deposited by Tenant
with Landlord pursuant to the terms of the Lease.

 

16.         Tenant has no defense as to its obligations under the Lease and
asserts no setoff, claim or counterclaim against Landlord.

 

17.         The undersigned is authorized to execute this Tenant Estoppel
Certificate on behalf of Tenant.

 

-2-

 

 

18.         This Tenant Estoppel Certificate may be executed in any number of
separate counterparts, each of which shall be deemed an original, but all of
which, collectively and separately, shall constitute one and the same
instrument.

 

Very truly yours,       TENANT:  
                                                                               ,
  a
                                                                               
    By     Name:     Its:    

 

 

-3-

 

 

Schedule 1

 

Rent Roll

 

[See attached copy.]

 

Schedule 1

 

 

 

 

Schedule 2

 

List of Property Documents

 

[See attached copy.]

 

Schedule 2

 

 

 

Harbor Gateway

20100 Western Avenue, Torrance

Due Diligence List

 

 

Property Information

·Western Ave Zoning Report via GE

·Physical Report via GE

·Fujitsu Western Site Depiciton of Premises

·Floor Plans (13 documents)

 

Environmental

·20100 Western Ave_LGS REPORT

·CBRE DISCLOSURE FORM_No Flood_No Quake

·LGS Disclosure Letter No Flood No Quake

·Phase I ESA dated 8-23-12

 

Accounting

·Western - 2011 CAM Reconciliation

·Western – 2012 YTD Expense

·Aged Receivables Report- Age as of 11/30/2012

 

Title & Survey

·Preliminary Title Report- First American Title Insurance Company

·Western Ave ALTA Survey 8-12

 

Roof Report

·Roof Report- date of 7/3/2012

·Preventative Maintenance Report 2012-2013

 

Service Contracts

·Landscaping Contract

·Lighting Contract

·Parking lot sweeping Contract

 

Leases and Tenant Info

·E&J

oE&J Acquisition Lease

·Fujitsu

oFujitsu tenant allowance – Western Ave

oFully executed Fujitsu Addendum to lease

oFully executed Fujitsu lease

·Nextel

oNextel Lease abstract

oNextel Lease

 

-2-

 

 

Harbor Gateway

20100 Western Avenue, Torrance

Due Diligence List

 

·Patlite

oFully executed Patlite First Amendment (11/15/2011)

oPatlite Lease

 

·Yonex

oFully executed First Amendment - Yonex

oFully executed Yonex Second Amendment 10-11-12

oSecond Amendment to Lease (signed by Yonex) 10-2-12

oYonex Lease

 

-3-

 

 

EXHIBIT “G”

 

Grant Deed

 

[See attached]

 

 

 

 

 

grant deed

 

RECORDING REQUESTED BY AND   WHEN RECORDED MAIL TO:       MMB Management, LLC  
9841 Irvine Center Drive, Suite   Irvine, California  92618-4316   Attn: 
William B. Brinckloe, Jr., Esq.       MAIL TAX STATEMENTS TO: SPACE ABOVE THIS
LINE FOR RECORDER'S USE     Mr. Scott T. Barnes [Amount of Documentary Transfer
Tax Manager Shown on Attached Paper – Not For Public MMB Management, LLC Record
Pursuant to Sections 11932 and 21985 Elsberry Way 11933 of the California
Revenue and Lake Forest, California  92630 Taxation Code.]

 

grant deed

 

THE UNDERSIGNED GRANTOR DECLARES:

 

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, COP-WESTERN
AVENUE, LLC, a California limited liability company (“Grantor”), hereby grants
to MMB MANAGEMENT, LLC, a California limited liability company, the real
property located in the City of Los Angeles, County of Los Angeles, State of
California, which is legally described in Exhibit A, attached hereto and
incorporated herein by this reference (the "Property").

 

IN WITNESS WHEREOF, Grantor has caused this Grant Deed to be executed as of the
date indicated.

 

    GRANTOR       Dated: January            , 2013   COP-WESTERN AVENUE, LLC,  
  a California limited liability company             By:       Name:       Its:
 

 

 

 

 

EXHIBIT “G”

 

 

 

 

Exhibit A to Grant Deed

 

LEGAL DESCRIPTION OF THE PROPERTY

 

The land is situated in the City of Los Angeles, County of Los Angeles, State of
California, and is described as follows:

 

PARCEL A:

 

THOSE PORTIONS OF LOTS 18, 19 AND 20 OF TRACT NO. 52172-02, IN THE CITY OF LOS
ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK
1238 PAGES 17 TO 22, INCLUSIVE, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, AS DESCRIBED AS PARCEL 3 IN EXHIBIT "A" OF THAT CERTAIN CERTIFICATE
OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8, 2000 AS
INSTRUMENT NO. 00-1917705, OFFICIAL RECORDS AND BEING MORE PARTICULARLY
DESCRIBED AS A WHOLE AS FOLLOWS:

 

COMMENCING AT THE NORTHEAST CORNER OF SAID LOT 18; THENCE ALONG THE NORTHERLY
LINE OF SAID LOT 18, SOUTH 86° 30’ 05" WEST 0.67 FEET TO THE TRUE POINT OF
BEGINNING; THENCE LEAVING SAID NORTHERLY LINE OF LOT 18, "SOUTH" 798.54 FEET TO
THE SOUTHERLY LINE OF SAID LOT 20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOT
20, SOUTH 89° 59’ 31" WEST 346.30 FEET TO THE SOUTHWEST CORNER OF SAID LOT 20;
THENCE ALONG THE WESTERLY LINE OF SAID LOTS 18, 19, AND 20, NORTH 00° 23’ 15"
WEST 690.86 FEET; THENCE NORTH 89° 36’ 45" EAST 1.89 FEET TO A POINT OF A NON
TANGENT CURVE CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 90.00 FEET, A RADIAL
LINE TO SAID POINT BEARS SOUTH 88° 54’ 26" WEST; THENCE NORTHEASTERLY ALONG SAID
CURVE, THROUGH A CENTRAL ANGLE OF 87° 35’ 39", AN ARC LENGTH OF 137.59 FEET;
THENCE ALONG THE NORTHERLY LINE OF SAID LOT 18, NORTH 86° 30’ 05" EAST 265.09
FEET TO THE TRUE POINT OF BEGINNING.

 

PARCEL B:

 

EASEMENTS FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS, DRAINAGE, FIRE
HYDRANTS, UNDERGROUND UTILITIES, AND REFUSE ENCLOSURE AS CREATED BY THAT CERTAIN
DECLARATION AND GRANT OF EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT, RECORDED
SEPTEMBER 21, 2000 AS INSTRUMENT NO. 00-1482684, OVER PORTIONS OF CERTAIN
PARCELS OF LAND DESCRIBED AS PARCELS 1 AND 2 IN EXHIBIT "A" OF THAT CERTAIN
CERTIFICATE OF COMPLIANCE FOR LOT LINE ADJUSTMENT 99-2594, RECORDED DECEMBER 8,
2000 AS INSTRUMENT NO. 00-1917705, AS MORE PARTICULARLY DESCRIBED IN SAID
DECLARATION, UPON THE TERMS, COVENANTS AND PROVISIONS THEREIN CONTAINED, AS
AMENDED BY A DOCUMENT ENTITLED "FIRST AMENDMENT TO DECLARATION GRANT OF
EASEMENTS AND RECIPROCAL EASEMENT AGREEMENT", RECORDED DECEMBER 19, 2000 AS
INSTRUMENT NO. 00-1975273.

 

PARCEL C:

 

THOSE CERTAIN EASEMENT RIGHTS AS CREATED BY THAT CERTAIN DOCUMENT ENTITLED
"DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR HARBOR GATEWAY
CENTER, INDUSTRIAL TRACT PARCEL", RECORDED AUGUST 6, 1999 AS INSTRUMENT NO.
99-1483487, AS AMENDED BY DOCUMENTS RECORDED DECEMBER 10, 1999 AS INSTRUMENT
NOS. 99-2285253, 99-2285254, AND 99-2285255, AFFECTING THE COMMON AREA, AS
DEFINED THEREIN. SUBJECT TO THE TERMS, COVENANTS AND PROVISIONS CONTAINED
THEREIN.

 

APN: 7351-021-038

 

 

 

 

ACKNOWLEDGEMENT

 

STATE OF CALIFORNIA   } COUNTY OF LOS ANGELES   } S.S.

 

On January          , 2013, before me,
                                            , a Notary Public, personally
appeared,                                            , who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal. 

Signature
_____________________________                                                       (Seal)

 

 

 

 

Document No.

 

Date Recorded

 

STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION

 

NOT BE MADE A PART OF THE PERMANENT RECORD

 

IN THE OFFICE OF THE COUNTY RECORDER

 

(Pursuant to Section 11932 R&T Code)

 

To: Registrar-Recorder County of Los Angeles

 

Request is hereby made in accordance with the provisions of the Documentary
Transfer Tax Act that the amount of tax due not be shown on the original
document which names: MMB MANAGEMENT, LLC, a California limited liability
company (as Grantee).

 

Property described in the accompanying document is located in the County of Los
Angeles, State of California.

 

The amount of tax due on the accompanying document is $            

 

x Computed on full value of property conveyed, or

 

¨ Computed on full value less liens and encumbrances remaining at time of sale.

 

first American title COMPANY, a

California corporation

 

By:       Patty Beverly     Senior Escrow Officer, CEO