EX-10.03 5 dex1003.txt AGREEMENT TO PURCHASE BETWEEN ELLIS-MIDDLEFIELD EXHIBIT 10.03 AGREEMENT TO PURCHASE BUILDINGS By and Between VeriSign, Inc. a Delaware corporation, as Purchaser and Ellis-Middlefield Business Park, a California limited partnership, as Seller TABLE OF CONTENTS -----------------

PAGE ---- ARTICLE 1: DEFINITIONS .................................................. 1 1.1 Definitions .................................................. 1 1.2 References ................................................... 4 ARTICLE 2 PURCHASE AND SALE/LEASE TERMINATION .......................... 4 2.1 Purchase and Sale/Lease Termination .......................... 4 ARTICLE 3 PURCHASE PRICE ............................................... 5 3.1 Purchase Price ............................................... 5 3.2 Escrow ....................................................... 5 3.3 Review and Inspection ........................................ 5 ARTICLE 4 COVENANTS, REPRESENTATIONS AND WARRANTIES .................... 6 4.1 Covenants, Representations and Warranties of Seller .......... 6 (a) Authority ............................................... 7 (b) No Breach ............................................... 7 (c) Leases .................................................. 7 (d) Commissions ............................................. 7 (e) Condemnation ............................................ 7 (f) Contracts ............................................... 7 (g) Employees ............................................... 7 (h) Legal Requirements ...................................... 7 (i) Litigation .............................................. 7 (j) Value ................................................... 8 (k) Siemens Documents ....................................... 8 (l) License and Permits ..................................... 8 (m) Exactments/Recapture Agreements ......................... 8 (n) Zoning .................................................. 9 (o) Environmental Reports ................................... 9 (p) Documents ............................................... 9 4.2 Covenants, Representations and Warranties of Purchaser ....... 10 (a) Authority ............................................... 10 (b) No Breach ............................................... 10 ARTICLE 5 MATTERS ...................................................... 10 5.1 Closing ...................................................... 10 5.2 [Retained for Numbering Purposes Only] ....................... 10 5.3 Survey, Title Commitment and Searches ........................ 10 (a) Survey .................................................. 10 5.4 Defects ...................................................... 11

i ARTICLE 6 DELIVERIES....................................................... 11 6.1 Seller's Deliveries............................................... 11 6.2 Purchaser's Deliveries............................................ 13 6.3 Closing Statement................................................. 13 6.4 Further Assurances................................................ 13 6.5 Seller's Post Closing Deliveries.................................. 13 ARTICLE 7 APPORTIONMENTS; TAXES; UTILITIES................................. 13 7.1 Taxes............................................................. 14 7.2 Rents............................................................. 14 7.3 Security Deposits................................................. 14 7.4 Contracts......................................................... 14 7.5 Other Property Operating Expenses................................. 14 7.6 Insurance Premiums................................................ 15 7.7 No Credit For Tenant Inducements.................................. 15 ARTICLE 8 CONDITIONS TO SELLER'S OBLIGATIONS............................... 15 8.1 Seller's Conditions Precedent..................................... 15 ARTICLE 9 CONDITIONS TO PURCHASER'S OBLIGATIONS............................ 15 9.1 Feasibility Contingency........................................... 15 9.2 Additional Conditions Precedent................................... 16 ARTICLE 10 ACTIONS AND OPERATIONS PENDING.................................. 16 10.1 Actions and Operations Pending Closing........................... 16 ARTICLE 11 DAMAGE OR DESTRUCTION; CONDEMNATION; INSURANCE.................. 17 11.1 Termination of Agreement......................................... 17 11.2 No Termination of Agreement...................................... 17 ARTICLE 12 LIABILITIES, ASSIGNMENT AND ASSUMPTION OF CERTAIN CONTRACT OBLIGATIONS.................................................. 17 12.1 No Liability of Purchaser........................................ 17 12.2 Assumption of Liabilities by Purchaser........................... 17 ARTICLE 13 RETAINED FOR NUMBERING PURPOSES ONLY............................ 18 ARTICLE 14 NOTICES......................................................... 18 14.1 Notices.......................................................... 18 ARTICLE 15 MISCELLANEOUS.................................................. 19 15.1 Expenses......................................................... 19 15.2 Brokerage........................................................ 19 15.3 Books and Records................................................ 20 15.4 Seller Default................................................... 20 15.5 Liquidated Damages............................................... 20 ii 15.6 Survival........................................................... 21 15.7 Construction....................................................... 21 15.8 Confidential Information........................................... 21 15.9 General............................................................ 21 15.10 Headings.......................................................... 22 15.11 Governing Law; Parties at Interest................................ 22 15.12 Computation of Time............................................... 22 15.13 [Retained for Numbering Purposes Only.]........................... 22 15.14 Time of the Essence............................................... 22 15.15 As-Is and Release................................................. 22 15.16 Like-Kind Exchange................................................ 24 15.17 [Retained for Numbering Purposes Only.]........................... 24 15.18 Attorneys' Fees................................................... 25 iii LIST OF EXHIBITS Exhibit A Land Legal Description Exhibit B Permitted Exceptions Exhibit C Submission Matters Exhibit D Building 4 Option Exhibit E Bill of Sale Exhibit F Leases Exhibit G Contracts Exhibit H Licenses & Permits Exhibit I Deed Exhibit J Environmental Reports Exhibit K Lease Termination Exhibit L Assignment Exhibit M Siemens Estoppel Exhibit N Access Agreement 1 AGREEMENT TO PURCHASE BUILDINGS ------------------------------- THIS AGREEMENT TO PURCHASE BUILDINGS (the "Agreement") is made this 1st day of October, 2001, by and between Ellis-Middlefield Business Park, a California limited partnership ("Seller"), and VeriSign, Inc., a Delaware corporation ("Purchaser"). R E C I T A L S: - - - - - - - - A. Seller is currently the owner of fee simple title to approximately 10.8 acres of land upon which are currently constructed (i) the building commonly known as 455 East Middlefield Road, Mountain View, California containing approximately 32,500 rentable square feet, (ii) the building commonly known as 487 East Middlefield Road, Mountain View, California containing approximately 49,362 rentable square feet, (iii) the building commonly known as 501 East Middlefield Road, Mountain View, California containing approximately 49,362 rentable square feet and (iv) that certain parking garage ("Garage") to be or in the process of being constructed on the land on which the foregoing buildings are located (collectively, the "Property). B. Pursuant to those certain leases listed on Exhibit F hereto (the "Leases") Purchaser is the tenant of the Property, as well as a 4-story, approximately 102,000 square foot building to be constructed by the Company on the Property ("Building 4"). C. Purchaser desires (i) to purchase the Property from Seller, (ii) to terminate the Leases effective as of the Closing, and (iii) to obtain from Sobrato Construction Corporation ("Sobrato Construction") (an affiliate of Seller) at the Closing the option to engage Sobrato Construction to construct Building 4 on a portion of the Property. Seller desires to effectuate the foregoing. A G R E E M E N T S: - - - - - - - - - - NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, agreements, covenants and conditions herein contained, and other good and valuable consideration, Seller and Purchaser agree as follows: ARTICLE 1 DEFINITIONS ----------- 1.1 Definitions As used herein, the following terms shall have the ----------- respective meanings indicated below: Agreement: This Agreement to Purchase Buildings, including the --------- Exhibits, which are incorporated herein. Building 4 Option: The option agreement between Sobrato Construction ----------------- and Purchaser for the construction of Building 4 in the form attached hereto as Exhibit D. Buildings: The buildings referred to in Recital A. --------- -1- Closing: As defined in Section 5.1. ------- Closing Date: As defined in Section 5.1. ------------ Contracts: All equipment leases, management, leasing, repair, --------- maintenance, operating, supply, purchase, consulting, advertising, service, equipment, utility, concession, telephone, cable, employment, collective bargaining, employee benefit and other contracts, commitments and agreements (excluding the Leases) relating to all or any portion of the Property, including, but not limited to, (i) the Garage Contract, (ii) that certain Indemnification Agreement (the "Siemens Indemnity") dated November ____, 1993 by and between Sobrato Development Companies, John A. Sobrato and Susan R. Sobrato, both individually and as trustees of the John A. Sobrato and Susan R. Sobrato 1979 Revocable Trusts, Ann R. Sobrato, John Michael Sobrato as trustee of the Ann Sobrato 1989 Revocable Trust, and Ellis-Middlefield Business Park (collectively, the "Indemnitees") and Siemens Components, Inc. ("SCI"), (iii) that certain Guaranty Agreement (the "Siemens Guaranty") dated November 19, 1993 made by Siemens Corporation ("Siemens") in favor of the Indemnitees, and (iv) that certain Settlement Agreement (the "Settlement Agreement") dated November ___, 1993 by and between the Indemnitees, SCI and Litronix, Inc. Deposit: The sum of Thirty Thousand Dollars ($30,000.00), which shall ------- be deposited by Purchaser with Escrowee, as escrowee, to be held as earnest money subject to the terms of this Agreement, and interest thereon, if any. Escrow: The escrow created for the purpose of facilitating the ------ transactions contemplated hereby pursuant to the Escrow Instructions (as defined herein). Escrowee: Alliance Title Company, located at 901 Campisi Way, Suite -------- 100, Campbell, California. Escrow Instructions: The escrow instructions to be executed and ------------------- delivered by a party hereto pursuant to Section 3.2 (or such party's attorneys who are hereby authorized by such party to execute same) to the Escrowee, as are reasonably necessary to consummate the transactions contemplated by this Agreement and consistent with the terms of this Agreement. Garage Contract: That certain construction contract dated August 1, --------------- 2001 by and between Sobrato Construction and Seller for construction of the Garage on the Property. Improvements: The Buildings and Garage, including, but not limited to, ------------ structures (surface and sub-surface) and other improvements, including all fixtures, systems, facilities, machinery, equipment and conduits to provide fire protection, security, heat, exhaust, ventilation, air-conditioning, electric power, light, plumbing, refrigeration, gas, sewer and water thereto, to the extent completed as of the Closing. Intangible Personal Property: All intangible property owned by Seller ---------------------------- or any affiliate thereof and used in connection with the Property, if any, including without limitation all permits, approvals, land use and other rights to construct Building 4 (Seller does not warranty that any 2 such rights will exist for Building 4 in the future), all permits, approvals, land use and other rights to construct the Garage, all trademarks, trade names, contract rights, guarantees, licenses, permits, warranties, promotional materials, leasing brochures, and logos. Land: The parcels of real property described in Exhibit A hereto, ---- together with all easements and appurtenances thereto, all oil, gas and mineral rights belonging to Seller with respect to such real property, all rights, title and interest, if any, of Seller in and to all land lying in any street, alley, road or avenue, open or proposed, in front of or adjoining said Land, to the centerline thereof. Leases: The leases listed on Exhibit F hereto. ------ Legal Requirements: (i) All laws, statutes, codes, acts, ordinances, ------------------ orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, certificates (including the certificate of occupancy issued for the Property), directions and requirements, including any applicable environmental, zoning, building, housing or similar law, ordinance, code, order or regulation of all governments and governmental authorities having jurisdiction of the Property (including, for purposes hereof, any local Board of Fire Underwriters), which now or hereafter may be applicable to the Property, and the operation thereof, and (ii) all covenants, easements and restrictions affecting the Property. Obligations: All payments required to be made and all representations, ----------- warranties, covenants, agreements and commitments required to be performed under the provisions of this Agreement by Seller or Purchaser, as applicable. Permitted Exceptions: Any liens, encumbrances, restrictions, exceptions -------------------- and other matters specified in Exhibit B to which title to the Real Property may be subject on the Closing Date. Personalty: All fixtures, equipment, furniture, furnishings, ---------- appliances, supplies and other personal property of every nature and description attached or pertaining to, or otherwise used in connection with, all or any part of the Real Property (except such as are owned by tenants of the Real Property or anyone other than Seller), if any. Property: (i) The Real Property, (ii) the Personalty, and (iii) the -------- Intangible Personal Property, collectively. Proration Date: The day immediately preceding the Closing Date. -------------- Purchase Price: One Hundred Sixty-Two Million Eight Hundred Ninety- --------------- Seven Thousand Nine Hundred Ninety-One Dollars ($162,997,991). Real Property: The Land together with the Improvements located on the ------------- Land. 3 Records: All books and records maintained by Seller or its agents ------- pertaining to the Property (excluding organizational documents of Seller and documents relating to the ongoing governance of the entities which comprise Seller). Survey: The survey for the Real Property prepared in accordance with ------ Section 5.3(a). Title Company: First American Title Insurance Company. ------------- Title Defect: A lien, claim, charge, security interest or encumbrance ------------ other than a Permitted Exception. UCC: The Uniform Commercial Code in effect in California. --- 1.2 References. Except as otherwise specifically indicated, all ---------- references to Section and Subsection numbers refer to Sections and Subsections of this Agreement, and all references to Exhibits refer to the Exhibits attached hereto. The words "hereby," "hereof," "herein," "hereof," "hereto," "hereunder," "hereinafter," and words of similar import refer to this Agreement as a whole and not to any particular Section or Subsection hereof. The word "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of this Agreement. Captions used herein are for convenience only and shall not be used to construe the meaning of any part of this Agreement. ARTICLE 2 PURCHASE AND SALE/LEASE TERMINATION ----------------------------------- 2.1 Purchase and Sale/Lease Termination Subject to the conditions and ----------------------------------- on the terms contained in this Agreement: (a) Purchaser agrees to purchase and acquire from Seller, and Seller agrees to sell and convey to Purchaser, the Property by a recordable grant deed in the form attached hereto as Exhibit I (the " Deed"). (b) Purchaser and Seller agree to terminate the Leases. (c) Purchaser agrees to purchase and acquire from Seller, and Seller agrees to sell, assign and transfer to Purchaser pursuant to an Assignment and Assumption Agreement in the form attached hereto as Exhibit L, all of Seller's right, title and interest in (i) the Contracts listed under the heading "Assigned Contracts" on Exhibit G hereto, and (ii) the Intangible Personal Property pertaining to the Property. (d) Purchaser agrees to purchase and acquire from Seller, and Seller agrees to sell, assign and transfer to Purchaser, the Personal Property owned by Seller, if any, by good and sufficient bill of sale in the form attached hereto as Exhibit E. 4 ARTICLE 3 PURCHASE PRICE -------------- 3.1 Purchase Price Purchaser agrees to pay to Seller, and Seller --------------- agrees to accept payment of the Purchase Price as follows: (a) The Deposit shall be applied against the Purchase Price at Closing. The Deposit shall be paid to Seller if the transaction contemplated hereby fails to close for any reason, including without limitation a default by Seller. (b) At Closing, Purchaser shall pay to Seller the Deposit and the balance of the Purchase Price, plus or minus prorations and adjustments as hereinafter provided, in cash or by wire transfer of collected federal funds for immediate credit. The Purchase Price shall not be adjusted due to variances in acreage or square footage of the Land or Buildings from those stated in the Recitals. 3.2 Escrow Not later than two (2) business days following the date ------ hereof, the parties, through their respective attorneys, shall establish an escrow (the "Escrow") with Escrowee, if not established as of the date hereof, and shall deposit a copy of an executed counterpart of this Agreement with Escrowee. Seller and Purchaser agree to execute such escrow instructions, consistent with this Agreement, as may be necessary or appropriate to consummate the transactions contemplated in this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any such escrow instructions, the terms of this Agreement shall control. Upon opening of said Escrow, Purchaser shall cause the Deposit to be deposited in said Escrow. Purchaser shall direct the Escrowee to invest the Deposit in accounts or securities permitted by Escrowee at the highest available rate of interest. Said Escrow shall be auxiliary to this Agreement, and this Agreement shall not be merged into nor in any manner superseded by said Escrow. The parties shall instruct Escrowee to file with the Internal Revenue Service the information return (Form 1099B) required by Section 6045(e) of the Internal Revenue Code and any regulations issued pursuant thereto in connection with the sales proceeds delivered to Seller at the Closing. Seller shall be responsible to give to the Escrowee such information as the Escrowee requires to complete said form. 3.3 Review and Inspection At any time prior to Closing, Purchaser --------------------- shall have the right to enter upon the Real Property to inspect the Property and to conduct tests and investigations at its sole cost and expense. In addition, Seller shall allow Purchaser to review all Records. Seller shall cooperate with Purchaser, or its agents, in arranging such inspections and reviews, provided that Purchaser shall give Seller at least twenty four (24) hours prior notice of the need for Seller's cooperation. Purchaser may order an environmental report, at Purchaser's sole cost and expense, to be conducted by an environmental engineering firm selected by Purchaser (the "Environmental Study"). Purchaser may contact governmental bodies and agencies regarding the Property. Purchaser acknowledges that prior to the date of this Agreement, Seller provided Purchaser all the information described on Exhibit C. Within ten (10) days after request therefore by Purchaser, Seller shall, from time to time, update any information previously provided by Seller pursuant hereto. If this Agreement terminates for any reason other than a breach by Seller hereunder, then Purchaser shall promptly return to Seller all materials delivered by Seller to Purchaser and deliver to Seller, without representation or 5 warranty, express or implied, all non-proprietary studies, tests and reports relating to the physical condition of the Property prepared by third party consultants for Purchaser. The immediately preceding sentence shall survive the termination of this Agreement. All entry onto and inspections of the Real Property shall be subject to the following: (a) The persons or entities performing work for the Purchaser shall have obtained all required licenses and permits for performing relevant tests on the Real Property prior to performing any tests on the Real Property. Prior to entry onto the Real Property to perform any tests or other due diligence investigations pursuant to this Agreement, each of Purchaser's third party consultants and contractors shall have obtained a policy or policies of commercial general liability insurance providing for a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and aggregate, covering liability to property or persons for such consultant's or contractor's activities on or about the Real Property, and naming Seller as an additional insured. (b) Seller shall have the right, at Seller's sole cost and expense, to have one (1) or more representatives of Seller accompany Purchaser and Purchaser's agents, employees, consultants, contractors and representatives (collectively "Purchaser's Representatives") while they are on the Real Property pursuant to this Agreement. (c) If the Property is damaged in connection with any of Purchaser's activities pursuant to this Agreement, Purchaser, at Purchaser's sole cost and expense, shall immediately repair such damage and restore the Real Property to its condition existing immediately prior to such activities. Until restoration is complete, Purchaser shall take all steps necessary to ensure that any conditions on the Real Property created by Purchaser's activities do not create any dangerous or unhealthy conditions on the Real Property. Purchaser agrees that the activities of Purchaser and Purchaser's Representatives under this Article 3 shall not constitute an interference with or disturbance of Purchaser's rights as tenant under the Leases. The restoration obligation contained in this Section 3.3(c) shall survive the termination of this Agreement. (d) Purchaser shall indemnify, defend (with counsel reasonably acceptable to Seller) and hold harmless Seller for, from and against any and all claims, damages, liens, judgments, demands, obligations, actions, costs, liabilities and losses (including mechanics' liens) and expenses (including, without limitation, attorneys' fees) ("Claims and Liabilities") to the extent arising out of any entry by Purchaser or Purchaser's Representatives, except that such obligations shall not apply to the extent such Claims and Liabilities arise out of any negligent acts or omissions of Seller or any of Seller's agents, representatives, employees, consultants or contractors. The indemnity, defense and hold harmless obligations contained in this Section 3.3(d) shall survive Close of Escrow or any termination of this Agreement. ARTICLE 4 COVENANTS, REPRESENTATIONS AND WARRANTIES ----------------------------------------- 4.1 Covenants, Representations and Warranties of Seller To induce --------------------------------------------------- Purchaser to execute, deliver and perform this Agreement, Seller covenants, represents and warrants to Purchaser on and as of the date hereof as follows: 6 (a) Authority. The Seller has the power and authority to sell, --------- transfer, convey and deliver the Property to be sold and purchased hereunder, to terminate the Leases, and to enter into the agreements contemplated hereby, and all required action and approvals therefor have been duly taken and obtained. The individuals signing this Agreement and all other documents executed pursuant hereto on behalf of the Seller are duly authorized to sign same on behalf of the Seller and to bind the Seller. (b) No Breach. The execution and delivery of this Agreement, the --------- consummation of the transactions provided for herein and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, any agreement of the Seller or any instrument to which the Seller is a party or by which the Seller or the Property is bound, or any judgment, decree or order of any court or governmental body, or any applicable law, rule or regulation. (c) Leases. Exhibit F is a complete and correct list of all ------ leases, tenancies, occupancy licenses and other rights of occupancy or use for all or any portion of the Property (other than subleases or other agreements assigned to Purchaser or to which Purchaser or any affiliate of Purchaser is a party) currently in effect. (d) Commissions. No brokerage or leasing commission or other ----------- compensation is or will be due or payable to any person, firm, corporation or other entity with respect to or on account of any of the Leases affecting the Real Property (provided, however that the foregoing shall not apply with respect to any breach of the tenant's representations, warranties or other obligations expressly set forth in the Leases or with respect to any such commission or compensation incurred by Purchaser). (e) Condemnation. Seller has not received written notice of any ------------ pending condemnation, expropriation, eminent domain, or similar proceeding affecting all or any portion of the Real Property, and the Seller has no actual knowledge that any such proceeding is contemplated. (f) Contracts. To Seller's actual knowledge, attached hereto as --------- Exhibit G is a complete list of all Contracts currently in effect for the Property. The Seller has no actual knowledge of any defaults under any of such Contracts, and all of such Contracts are in good standing and in full force and effect. The Seller shall, effective as of Closing, terminate all Contracts listed as "Terminated Contracts" on Exhibit G hereto, and the Seller shall pay at or prior to the Closing all amounts which are or may come due under such terminated Contracts. (g) Employees. The Seller has no employees. --------- (h) Legal Requirements. The Seller has not received notice of ------------------ existing violations of any Legal Requirements by the Property or due to the operation of the Property which remain uncured. (i) Litigation. The Seller has not received written notice of ---------- any action, suit or proceeding pending, and Seller has no actual knowledge of any threatened against or affecting all or any portion of the Property, or any of the Leases affecting the Real Property, or relating to or arising out of the ownership, management or operation of the Property, in any court or before 7 or by any federal, state, county or municipal department, commission, board, bureau or agency or other governmental instrumentality. (j) Value. The Seller has not received notice of any proposed ----- change in the assessed valuation of all or any portion of the Real Property for real property tax purposes other than the customary reassessments imposed annually pursuant to Laws, provided however that Purchaser is hereby advised that the Real Property will also be subject to reassessment in connection with the Garage or any other work in progress or otherwise completed and not yet reassessed. (k) Siemens Documents. The Settlement Agreement, the Siemens ----------------- Indemnity and the Siemens Guaranty are in good standing and in full force and effect. Seller has delivered to Purchaser true correct and complete copies of the Settlement Agreement, the Siemens Indemnity and Siemens Guaranty. Neither the Settlement Agreement, the Siemens Indemnity nor the Siemens Guaranty has been amended or modified in any way. The Indemnitees have not waived any rights under the Settlement Agreement, the Siemens Indemnity or Siemens Guaranty, and neither Siemens Components, Inc. nor Siemens Corporation has any defense or right to set off against any claim that may be made by any Indemnitee under the Settlement Agreement, the Siemens Indemnity or Siemens Guaranty. (l) License and Permits. The licenses and permits listed on ------------------- Exhibit H are all of the renewable licenses and permits currently held by the Seller in connection with its ownership and operation of the Real Property. The Seller has not received written notice of any intention on the part of the issuing authority to cancel, suspend or modify any of such licenses or permits or any other license or permit issued in connection with the ownership or operation of the Real Property or to take any action or institute any proceedings to effect such a cancellation, suspension or modification. The Seller has not received written notice that it fails to hold any licenses, franchises, certifications, authorizations, approvals or permits required by any governmental or quasi-governmental authority for the use and operation of the Property as the same is presently used and operated or that the operation of such Property fails to comply with any of the licenses and permits. All of the licenses and permits are fully paid for, and the Seller has made, or will make, application for renewals of any such licenses and permits which will expire before the Closing Date. (m) Exactments/Recapture Agreements. Except as disclosed in any ------------------------------- preliminary title reports, the documents listed on Exhibit J (the "Environmental Reports") hereto or in any other materials delivered by Seller to Barry Popkin, Robert Dmytryk or Peter Ross (collectively, the "Delivered Materials"), the Seller has no actual knowledge of any outstanding obligations in connection with the Land it owns for any exactments. Except as disclosed in the Delivered Materials, the Seller has no actual knowledge of any outstanding obligations in connection with the Land for any so-called "recapture agreement" involving refund for sewer extension, oversizing utility, lighting or like expense or charge for work or services done upon or relating to the Real Property. To the Seller's actual knowledge, no portion of its Property is subject to or is affected by any special assessment or special taxing district, except as disclosed in the Delivered Materials. 8 (n) Zoning. The Seller has no actual knowledge of any existing, ------ pending, contemplated, threatened or anticipated (i) change in the zoning classification of the Real Property or (ii) widening, change of grade or limitation on use of streets abutting the Real Property, except as may be disclosed in the Delivered Materials. (o) Environmental Reports. The Delivered Materials include all --------------------- reports currently in the Seller's possession related to whether any Hazardous Materials have been located on the Real Property or have migrated onto the Real Property or have been released into the environment, or discharged, placed or disposed of at, on or under the Real Property. The term "Hazardous Materials" shall mean and include the following, including mixtures thereof: any hazardous substance, pollutant, contaminant, waste, by-product or constituent regulated under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.; oil and petroleum products and natural gas, natural gas liquids, -- --- liquefied natural gas and synthetic gas usable for fuel; pesticides regulated under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq.; asbestos and asbestos-containing materials, PCBs and other -- --- substances regulated under the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; source material, special nuclear material, by-product material and -- --- any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act of 1954, 42 U.S.C Section 2011 et seq., or -- --- the Nuclear Waste Policy Act of 1982 , 42 U.S.C 10101 et seq.; chemicals subject -- --- to the OSHA Hazard Communication Standard, 29 C.F.R. { 1910.1200 et seq.; and -- --- industrial process and pollution control wastes, whether or not hazardous within the meaning of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. The term "Environmental Laws" shall mean and include all federal, -- --- state and local statutes, ordinances, regulations and rules in effect and as amended from time to time relating to environmental quality, health, safety, contamination and clean-up, including, without limitation, the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et -- --- -- seq., and the Water Quality Act of 1987, 33 U.S.C. Section 1251; the Federal --- Insecticide, Fungicide, and Rodenticide Act 7 U.S.C. Section 136 et seq.; the -- --- Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. Section 1401 et -- seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; the --- -- --- Noise Control Act, 42 U.S.C. Section 4901 et seq.; the Occupational Safety and -- --- Health Act, 29 U.S.C. Section 651 et seq.; the Resource Conservation and -- --- Recovery Act 42 U.S.C. Section 6901 et seq., as amended by the Hazardous and -- --- Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Comprehensive Environmental Response, Compensation and -- --- Liability Act 42 U.S.C. Section 9601 et seq., as amended by the Superfund -- --- Amendments and Reauthorization Act, the Emergency Planning and Community Right-to-Know Act of 1986, 12 U.S.C. Section 1101 et seq., and the Radon Gas and -- --- Indoor Air Quality Research Act of 1986, 42 U.S.C. Section 7401, et seq.; the -- --- Toxic Substances Control Act 15 U.S.C. Section 2601 et seq.; the Atomic Energy -- --- Act of 1954, 42 U.S.C. Section 2011 et seq., and the Nuclear Waste Policy Act of 1982, 42 U.S.C. Section 10101 et seq.; and state and local environmental -- --- statutes and ordinances, with implementing regulations and rules, as any of the foregoing may be amended from time to time. (p) Documents. The Delivered Materials, together with the JCP --------- Report referenced in Section 15.15 and the Contracts described on Exhibit G, constitute all of the 9 documents of the type described in Exhibit C affecting the Property which are currently in the Seller's possession with respect to the Property. The representations and warranties made by Seller in this Section 4.1 (other than Section 4.1(k)) shall survive the Closing and not be merged therein for a period of one (1) year, and the Seller shall only be liable to Purchaser hereunder for a breach of representation or warranty made herein with respect to which a claim is made by Purchaser against the Seller on or before the first anniversary of the Closing Date. The representations and warranties made by Seller in Section 4.1(k) shall survive the Closing until Seller delivers to Purchaser the New Indemnity (as defined below), the New Guaranty (as defined below) and the Siemens Estoppel (as defined below). 4.2 Covenants, Representations and Warranties of Purchaser. Purchaser ------------------------------------------------------- covenants, represents and warrants to Seller as follows: (a) Authority. Purchaser has the power and authority to purchase --------- and accept the Property to be sold and purchased hereunder, to terminate the Leases, and to enter into the agreements contemplated hereby, and all required action and approvals therefor have been duly taken and obtained. The individuals signing this Agreement and all other documents executed pursuant hereto on behalf of Purchaser are duly authorized to sign same on behalf of Purchaser and to bind Purchaser. (b) No Breach. The execution and delivery of this Agreement, the --------- consummation of the transactions provided for herein and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, any agreement of Purchaser or any instrument to which Purchaser is a party or by which Purchaser is bound, or any judgment, decree or order of any court or governmental body, or any applicable law, rule or regulation. ARTICLE 5 MATTERS ------- 5.1 Closing. The closing of the transaction contemplated hereby (the ------- "Closing") shall take place on October 1, 2001 (the "Closing Date"). The parties will deposit documents and funds into escrow in sufficient time to close on the scheduled Closing Date, but in any event documents shall be deposited at least one (1) business day prior to the scheduled Closing Date. The Closing shall be effected pursuant to the Escrow Instructions. 5.2 [Retained for Numbering Purposes Only] 5.3 Survey, Title Commitment and Searches. Seller shall deliver to ------------------------------------- Purchaser the following (hereinafter referred to collectively as the "Title Documents") within ten (10) days after the date hereof, to the extent not already delivery as of the date hereof: (a) Survey. Five (5) copies of a Plat of Survey of the Property ------ prepared after the date hereof by a surveyor licensed by the State of California, in conformity with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys" jointly established and adopted by ALTA and ACSM in 1999, meeting the accuracy requirements of an Urban Survey, as defined therein, and including items 1-4 and 6-11 and 13 in Table A contained 10 therein, and in conformity with such standards as are required by the Title Insurer as a condition to the removal of any general survey exceptions from the Title Commitment (other than those matters that may be shown by the survey), certified to Purchaser and the Title Company. Purchaser acknowledges having received preliminary title reports ("Title Report") dated as of July 9, 2001 issued by the Escrowee with respect to the Real Property, together with full and legible copies of all documents ("Title Papers") referred to in the Title Report. Purchaser shall arrange for any update thereto and such other information relating to title matters as Purchaser may desire directly with the Escrowee and Title Company. 5.4 Defects. ------- (a) Seller shall be obligated to remove mortgages, deeds of trust and other monetary liens or encumbrances of a definite and liquidated amount which encumber the Real Property (other than non-delinquent real property taxes and assessments and any encumbrances caused by or through Purchaser, the Purchaser's Representatives, or any tenant or subtenant of the Property) ("Mortgage Liens"), which the parties agree may be removed by the use of the proceeds of sale at Closing. If the proceeds of sale are insufficient to remove all Mortgage Liens, the Seller shall deposit at Closing any additional amount required to remove such Mortgage Liens, and should Seller fail to do so, Purchaser may exercise any remedy available to Purchaser at law or in equity against Seller. If any such Title Defect other than a Mortgage Lien is not cured (or subject to Purchaser's approval (not to be unreasonably withheld), insured over by the Title Company) on or prior to the Closing Date, Purchaser may either: (i) terminate this Agreement, in which event (hereinafter referred to as "Election No. 1") the parties shall have no further Obligation or liability to each other hereunder other than the obligations which are expressly stated herein to survive the termination of this Agreement ("Surviving Obligations") and the interest on the Deposit shall be returned to Purchaser; or (ii) accept title with the Title Defect, without any adjustment to the Purchase Price and without any liability of Seller with respect thereto (hereinafter referred to as "Election No. 2"). Title Defects which are acceptable as part of Election No. 2 shall thereupon be deemed to be Permitted Exceptions. (b) Purchaser's obligations hereunder shall be contingent on the Title Company being unconditionally committed to issue, at the Closing, (i) an ALTA Owner's Policy of Title Insurance (Form B, rev. 10/17/70) in the amount of the Purchase Price insuring fee simple title to the Real Property in the Purchaser subject only to the Permitted Exceptions and the pre-printed exceptions not removed by extended coverage, and with a Zoning 123.2 endorsement (with parking), an access endorsement, a contiguity endorsement, a restrictions endorsement, and such other endorsements as may be reasonably requested by Purchaser and available in California (the "ALTA Title Policy"). ARTICLE 6 DELIVERIES ---------- 6.1 Seller's Deliveries. At least one day prior to the Closing Date, ------------------- Seller shall deposit in the Escrow the following: 11 (a) the Deed executed by the Seller, together with a separate statement regarding documentary transfer tax in the form attached in Exhibit I-1 containing the information requested therein, which separate statement shall not be recorded as a public record in the Official Records, but shall be filed with the County Recorder when the Deed is recorded in the Official Records; (b) a Bill of Sale in the form attached hereto as Exhibit E executed by the Seller; (c) the Assignment and Assumption Agreement (the "Assignment") in the form attached hereto as Exhibit L executed by the Seller; (d) a termination of the Leases in the form attached hereto as Exhibit K (the "Lease Termination") effective as of the Closing Date, executed by the Seller; (e) originals of certificates of occupancy, licenses, permits, authorizations, consents and approvals required by law and issued by any governmental or quasi-governmental authority having jurisdiction over the Real Property (to the extent in the Seller's possession) and copies of all certificates, if any, issued by the local board of fire underwriters (or other body exercising similar functions) to the extent in the Seller's possession, to the extent not previously delivered to Purchaser; (f) to the extent in the Seller's possession and not previously delivered to Purchaser, a complete set of as-built architectural and engineering drawings, utilities layout plans, topographical plans and the like used in the construction of the buildings, structures and other improvements on the Real Property; (g) an original or certified copies of all Contracts then in the Seller's possession, which will be assigned pursuant to the Assignment; (h) a written certification ("FIRPTA Certificate"), which certification shall be in compliance with the Tax Reform Act of 1984 (the "Act") and the regulations thereunder that are imposed by the Foreign Investment in Real Property Tax Act ("FIRPTA") and certifying that the Seller is not a person or entity subject to withholding under FIRPTA and the Act, and containing the Seller's tax identification number and address. If Seller does not provide such written certification, Purchaser may withhold at Closing ten percent (10%) of the gross proceeds of the sale of the Property for remittance to the Internal Revenue Service in accordance with the provisions of the Act; (i) a California 597-W form; (j) the Building 4 Option executed by Sobrato Construction and the John M. Sobrato 1985 Separate Property Trust; (k) a certificate remaking and updating through the Closing Date the representations and warranties made in Section 4.1 hereof, or in the event the Seller has knowledge that any such representations and warranties are no longer accurate, describing how they are no longer accurate; and 12 (l) an Access Agreement (the "Access Agreement") in the form attached hereto as Exhibit N executed by Seller. 6.2 Purchaser's Deliveries. At the Closing, Purchaser shall cause to ---------------------- be delivered to Seller: (a) (the Purchase Price required to be paid pursuant to Section 3.1 hereof; (b) the Lease Termination executed by Purchaser; (c) the Assignment executed by Purchaser; (d) the Building 4 Option executed by Purchaser; (e) a certificate remaking and updating through the Closing Date the representations and warranties made in Section 4.2 hereof, or in the event the Purchaser has knowledge that any such representations and warranties are no longer accurate, describing how they are no longer accurate; and (f) the Access Agreement executed by Purchaser. 6.3 Closing Statement. Not later than five (5) days prior to the ----------------- Closing Date, Seller and Purchaser shall request of the Escrowee that Escrowee prepare a closing statement showing the funds to be delivered, closing costs and prorations for the transactions contemplated hereby in accordance with the provisions of Article 7 hereof. 6.4 Further Assurances. Each of parties hereto, at the Closing, will ------------------ execute such additional instruments, documents or certificates as is reasonably required in order to consummate the purchase and sale of the Property pursuant to this Agreement. 6.5 Seller's Post Closing Deliveries After Closing, Seller agrees to -------------------------------- exercise best efforts to obtain an indemnification agreement issued by SCI to Purchaser, and to VeriSign, Inc. as tenant of the Property, in the form required by Paragraph 6 of the Settlement Agreement (the "New Indemnity") and a guaranty issued by Siemens to Purchaser, and to VeriSign Inc. as tenant of the Property, in the form required by Paragraph 6 of the Settlement Agreement (the "New Guaranty"). In addition, Seller shall exercise good faith reasonable efforts to obtain an estoppel letter issued by SCI and Siemens in the form attached hereto as Exhibit M or in such other form as is reasonably acceptable to Purchaser which in all material respects addresses the issues in the form attached hereto as Exhibit M (the "Siemens Estoppel"). The provisions of this Section 6.5 shall survive Closing. ARTICLE 7 APPORTIONMENTS; TAXES; UTILITIES -------------------------------- The following items shall be adjusted and apportioned between Seller and Purchaser as follows: 13 7.1 Taxes. Except with respect to Building 4 and the Land associated ----- therewith, there shall be no proration of ad valorem real estate taxes, general and special real property assessments, personal property taxes, charges and assessments ("Taxes") affecting the Property pursuant to this Agreement or under the Leases. The Taxes on Building 4 and the Land associated therewith shall be prorated on a per diem basis as of midnight of the Proration Date, disregarding any discount or penalty and on the basis of the fiscal year of the authority levying the same, which proration shall also be deemed to satisfy any Taxes proration requirements under the Leases. If any of the same have not been finally assessed as of the date of Closing for the current fiscal year of the taxing authority, then the same shall be adjusted at Closing based upon the most recently issued bills therefor and shall be readjusted immediately when and if final bills are issued, which obligation shall survive Closing and not be merged therein. Such proration shall be calculated based upon the actual number of days in such fiscal year, with Seller being responsible for that portion of such fiscal year occurring prior to midnight of the Proration Date and Purchaser being responsible for that portion of such fiscal year occurring after midnight of the Proration Date. 7.2 Rents. All rents with respect to the Real Property shall be ----- prorated as of midnight of the Proration Date, such that Seller shall be entitled to rents which are due or past due or not yet due but accrued under the terms of the Leases, prorated to midnight of the Proration Date, regardless of when such payments are actually made and Purchaser shall be entitled to all such rents and other revenues accruing on and after the Closing Date. Any proration of rents between Purchaser and Seller pursuant to this Section shall also be deemed to have satisfied any rent proration requirements of the landlord and tenant under the Leases. 7.3 Security Deposits. All cash security and other deposits of all ----------------- tenants under Leases not theretofore applied, shall be delivered by Seller to Purchaser on the Closing Date, or as to such cash deposits, Seller may elect to give Purchaser a credit against the Purchase Price in the amount of such deposits. Any security deposit in the form of a letter of credit shall be delivered to Purchaser immediately following the Closing. Any such delivery or credit of the security and other deposits by Seller shall also be deemed to satisfy any requirement under the Leases for the return of such security and deposits to the tenant under the Leases. 7.4 Contracts. Purchaser shall be entitled to a credit against the --------- Purchase Price for sums that are due (or accrued) and unpaid as of the Closing Date under any contracts listed on Exhibit G as "Assigned Contracts", and Seller shall be entitled to a credit to the extent that sums have been paid under any such Contracts for services to be performed or goods to be delivered after the Closing Date. In addition, to the extent not already credited pursuant to the prior sentence, Purchaser shall receive a credit for all amounts that are not then currently due or accrued which remain to be paid under the Garage Contract calculated as of the Closing. At Closing, Seller shall at its cost and expense terminate the existing insurance policies affecting the Property, and there shall be no prorations of any amounts related thereto under this Agreement or under the Leases. 7.5 Other Property Operating Expenses. Operating expenses for the --------------------------------- Property shall be prorated as of midnight of the Proration Date. Seller shall pay all utility charges and other operating expenses attributable to the Property to, but not including the Closing Date (except for those utility charges and operating expenses payable by tenants in accordance with the Leases) 14 and Purchaser shall pay all utility charges and other operating expenses attributable to the Property on or after the Closing Date together with any utility charges and operating expenses payable by tenants in accordance with the Leases (other than real property taxes and assessments and insurance premiums). To the extent that the amount of actual consumption of any utility services is not determined prior to the Closing Date, a proration shall be made at Closing based on the last available reading and post-closing adjustments between Purchaser and Seller shall be made within twenty (20) days of the date that actual consumption for such pre-closing period is determined, which obligation shall survive the Closing and not be merged therein. Seller shall not assign to Purchaser any deposits which Seller has with any of the utility services or companies servicing the Property, and Seller shall be entitled to the return of such deposits from the utility provided, if any. Purchaser shall arrange with such services and companies to have accounts opened in Purchaser's name beginning at 12:01 a.m. on the Closing Date. 7.6 Insurance Premiums. At Closing, Seller shall cancel the existing ------------------ insurance policies for the Property. Seller shall pay all insurance premiums owed prior to the Closing Date and there shall be no proration of such items. 7.7 No Credit For Tenant Inducements. Purchaser agrees that there shall -------------------------------- be no payment or credit to Purchaser or liability to any tenant for any allowances and other expenditures required to complete tenant improvements or to satisfy other tenant inducements to be provided by the landlord under any Leases. ARTICLE 8 CONDITIONS TO SELLER'S OBLIGATIONS ---------------------------------- 8.1 Seller's Conditions Precedent. The obligation of Seller to close ----------------------------- the transaction contemplated hereby is, at Seller's option, subject to all representations and warranties of Purchaser contained in this Agreement being true and correct in all material respects at and as of the Closing Date and all covenants of Purchaser to have been performed on or before the Closing Date having been timely and duly performed in all material respects, which conditions are for Seller's benefit only and can be unilaterally waived by Seller. ARTICLE 9 CONDITIONS TO PURCHASER'S OBLIGATIONS ------------------------------------- 9.1 Feasibility Contingency. The obligation of Purchaser to close the ----------------------- transaction contemplated hereby is, at the option of Purchaser, subject to Purchaser's being satisfied, in Purchaser's sole and absolute discretion, with the Records, Leases, Contracts and reports for the Property and the results of its physical inspections of the Property, including, but not limited to, environmental and engineering reports, and the availability of financing for the proposed acquisition (the "Feasibility Contingency"). Purchaser shall have through September 30, 2001 (the period from the date hereof through September 30, 2001 being the "Contingency Period") for satisfaction of the Feasibility Contingency. If Purchaser does not terminate this Agreement by written notice to Seller given prior to the expiration of the Contingency Period, Purchaser shall be deemed to have satisfied the Feasibility Contingency, in which event, subject to the terms and conditions hereof, Purchaser shall be obligated to close the transaction contemplated hereby. If Purchaser does terminate this Agreement by written notice to Seller given prior to the 15 expiration of the Contingency Period, the interest on the Deposit shall forthwith be released to Purchaser from Escrow, the Deposit shall forthwith be released to Seller from Escrow, and, thereupon, this Agreement shall become null and void and neither party shall have any further rights and obligations hereunder, other than the Surviving Obligations. 9.2 Additional Conditions Precedent. The obligation of Purchaser to ------------------------------- close the transaction contemplated hereby is, at Purchaser's option, further subject to all representations and warranties of the Seller contained in this Agreement being true and correct in all material respects at and as of the Closing Date, all covenants of Seller contained in this Agreement to have been performed on or before the Closing Date having been timely and duly performed in all material respects, the Title Company being committed to issue the ALTA Title Policy, and there being no material change in the condition of the Property from the date of the waiver of the Feasibility Condition through the Closing Date (other than changes caused by Purchaser, the Purchaser's Representatives or any tenant or subtenant of Purchaser). ARTICLE 10 ACTIONS AND OPERATIONS PENDING 10.1 Actions and Operations Pending Closing. Seller agrees that from -------------------------------------- the date hereof through the Closing Date: (a) Except as may be provided to the contrary herein, the Property will continue to be operated and maintained substantially in accordance with the Seller's present standards (except to the extent failure to so maintain such Property is due to the tenant's breach of its obligations under any of the Leases). (b) the Seller shall perform or cause to be performed all obligations of the landlord under the Leases, all obligations of Seller under the Contracts to which it is a party and all licenses and permits, all obligations of Seller under the Legal Requirements applicable to the Property, and all obligations of the mortgagor under the any mortgage affecting the Property, to and including the Closing Date or termination of this Agreement. From the date hereof to the Closing Date or earlier termination of this Agreement, Seller shall operate and manage the Property in the same manner as it has been operated and managed heretofore, provided that during said period, without the prior written consent of Purchaser (except as indicated below), Seller shall not do, suffer or permit, or agree to do, any of the following: (i) Enter into any transaction with respect to or affecting the Property out of the ordinary course of business; (ii) Sell, lease, encumber or grant any interest in the Property or any part thereof in any form or manner whatsoever; or (iii) Remove from the Real Property any of the fixtures thereon or any of the Personalty. (c) Seller will not enter into any new contracts affecting the Property, or cancel, modify or renew any existing Contracts, without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Seller shall comply with all applicable terms, 16 provisions and obligations of Seller contained in the Contracts and any other contractual arrangements referred to in this Agreement applicable to Seller. (d) Seller shall notify Purchaser promptly if Seller becomes aware of any transaction or occurrence prior to the Closing Date which would make any of the representations or warranties of Seller contained in Section 4.1 untrue in any material respect. (e) Seller will maintain in effect all policies of casualty and liability insurance, or similar policies of insurance, with the same limits of coverage which they now carry with respect to the Property. ARTICLE 11 DAMAGE OR DESTRUCTION; CONDEMNATION; INSURANCE ---------------------------------------------- 11.1 Termination of Agreement. If at any time after the date hereof and ------------------------ prior to the date of Closing, (i) all or any material portion of the Property is destroyed or damaged as a result of fire or any other casualty whatsoever or (ii) if any proceeding relating to the proposed taking of all or any material portion of the Property by condemnation or eminent domain is instituted or threatened by any public authority, then, at the option of Purchaser, this Agreement shall terminate and shall be cancelled with no further liability of either party to the other, other than the Surviving Obligations. Seller shall give Purchaser written notice of any such casualty or instituted or threatened proceeding within three (3) days after Seller becomes aware of the occurrence thereof. 11.2 No Termination of Agreement. If there is any partial or total --------------------------- damage or destruction or condemnation or taking, as above set forth, and if Purchaser elects not to terminate this Agreement as herein provided, then in any such case all condemnation and insurance proceeds paid or payable to the Company or Seller as a result thereof shall belong to Purchaser at the Closing and shall be paid over and assigned to Purchaser at Closing, and Seller shall further execute all assignments and any other documents or other instruments as Purchaser may reasonably request or as may be necessary to transfer all interest in all such proceeds to Purchaser or to whomever Purchaser shall direct. ARTICLE 12 LIABILITIES, ASSIGNMENT AND ASSUMPTION OF CERTAIN CONTRACT OBLIGATIONS ---------------------------------------------------------------------- 12.1 No Liability of Purchaser. Except as expressly provided herein, ------------------------- Purchaser shall not assume or take subject to any liabilities or obligations of the Property or Seller existing or accrued as of the date of Closing, and Seller shall pay the same as they mature and shall hold Purchaser harmless with respect to all thereof. Liabilities and obligations of the Property accruing after the date of Closing shall be the responsibility of Purchaser or the Property, as the case may be. 12.2 Assumption of Liabilities by Purchaser. Subject to the terms and -------------------------------------- conditions of this Agreement, Seller will assign to Purchaser all of its right, title and interest in and to the Contracts listed as "Assigned Contracts" on Exhibit G hereto, and Purchaser will assume and 17 agree to perform Seller's duties and obligations thereunder accruing on and after the date of Closing, pursuant to the Assignment. ARTICLE 13 [Retained for Numbering Purposes Only] ARTICLE 14 NOTICES ------- 14.1 Notices. Except as otherwise provided in this Agreement, all ------- notices, demands, requests, consents, approvals and other communications (herein collectively called "Notices") required or permitted to be given hereunder, or which are to be given with respect to this Agreement, shall be in writing and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or by overnight express courier, postage prepaid, addressed to the party to be so notified as follows: If intended for Seller, to: Ellis-Middlefield Business Park 10600 North De Anza Boulevard, Suite 200 Cupertino, California 95014 Attention: John M. Sobrato Copies to: Berliner Cohen Ten Almaden Boulevard 11/th/ Floor San Jose, California 95113-2233 Attention: Kathy Siple If intended for Purchaser, to: VeriSign, Inc. 487 East Middlefield Road Mountain View, California 94043-4047 Attention: Rick Walsh with copies to: VeriSign Inc. 21355 Ridgetop Circle Dulles, Virginia 20166-6503 Attention: Henry F. White, III and: VeriSign Inc. 487 East Middlefield Road Mountain View, California 94043-4047 Attention: James Ulam, Esq. Senior Vice President, General Counsel 18 and: Jones Lang LaSalle Americas, Inc. 8484 Westpark Drive, Suite 710 McLean, Virginia 22102 Attention: Kenneth W. Rudy and: Piper Marbury Rudnick & Wolfe, LLP 1200 Nineteenth Street, NW Washington, D.C. 20036-2412 Attention: Jeffrey R. Keitelman Notice mailed by registered or certified mail shall be deemed received by the addressee three (3) days after mailing thereof. Notice personally delivered shall be deemed received when delivered. Notice mailed by overnight express courier shall be deemed received by the addressee one (1) business day after mailing thereof. Either party at any time may change the address for notice to such party by mailing, sending or delivering a Notice as aforesaid. ARTICLE 15 MISCELLANEOUS ------------- 15.1 Expenses. All costs associated with the transfer of title to the -------- Property and the associated escrow shall be in accordance with the customary practices in Santa Clara County, California except as otherwise expressly set forth herein. Seller shall pay one-half (1/2) of the escrow fees, one-half (1/2) of the applicable city transfer taxes, all of the documentary county transfer taxes, all of the recording costs necessary to remove monetary liens which the Seller is required or elects to remove pursuant to this Agreement, and the portion of the premium charged by the Title Company for the ALTA Title Policy which is attributable to basic CLTA coverage (including for those endorsements required by the Title Company to be obtained in order to cause the removal from title of objectionable title matters which Seller is required to remove in accordance with the provisions of Section 5.3 above) . Purchaser shall pay one-half (1/2) of the escrow fees, one-half (1/2) of the applicable city transfer taxes, all costs associated with Purchaser's financing, all of the recording costs with respect to the Deed, and the entire portion ALTA Title Policy not required to be paid by Seller (including endorsements). The fees and expenses of Seller's designated representatives, accountants and attorneys shall be borne by Seller, and the fees and expenses of Purchaser's designated representatives, accountants and attorneys shall be borne by Purchaser. The provisions of this Section 15.1 shall survive Closing. 15.2 Brokerage. Seller and Purchaser each hereby represent and warrant --------- to the other that with the exception of Jones Lang LaSalle Americas, Inc., to whom Purchaser shall pay all commissions due, neither has dealt with any broker or finder in connection with the transaction contemplated hereby, and each hereby agrees to indemnify, defend and hold the other harmless of and from any and all manner of claims, liabilities, loss, damage, attorneys' fees and expenses, incurred by the other party and arising out of, or resulting from, any claim by any such broker or finder in contravention of the representing party's representation and warranty herein contained. The parties' obligations hereunder shall survive the termination of this Agreement. 19 15.3 Books and Records. Seller covenants and agrees that the Records ----------------- will remain at Seller's offices, located within Santa Clara County, California, for examination and audit by Purchaser and its agents for a period of five (5) years after the Closing. The provisions of this Section 15.3 shall survive Closing. 15.4 Seller Default. If this Agreement is terminated by a default of -------------- Seller, the interest on the Deposit shall be promptly released to Purchaser, the Deposit shall be promptly released to Seller, and Purchaser shall be entitled to pursue against Seller any and all remedies available to Purchaser, at law or in equity, including, but not limited to, specific performance. The provisions of this Section 15.4 shall survive termination of this Agreement. 15.5 Liquidated Damages. IN THE EVENT PURCHASER FAILS TO COMPLETE THE ------------------ PURCHASE OF THE PROPERTY AS CONTEMPLATED HEREIN DUE TO THE DEFAULT BY PURCHASER (AND NOT DUE TO A FAILURE OF A CONDITION PRECEDENT IN FAVOR OF PURCHASER) TO PERFORM ITS OBLIGATIONS HEREUNDER AND SELLER IS READY, WILLING AND ABLE TO CONSUMMATE THE SALE CONTEMPLATED HEREIN, PURCHASER AND SELLER HEREBY AGREE THAT THE DEPOSIT (TO THE EXTENT MADE) SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. SUBJECT TO THIS SECTION BELOW, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT HEREUNDER BY PURCHASER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, SUBJECT TO THIS SECTION BELOW, BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT (TO THE EXTENT MADE) HAS BEEN AGREED UPON, AFTER NEGOTIATION AND TAKING INTO CONSIDERATION ALL CIRCUMSTANCES EXISTING AS OF THE AGREEMENT DATE, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AS WELL AS THE RELATIONSHIP OF THE SUM TO THE RANGE OF HARM TO SELLER THAT COULD BE ANTICIPATED AND, SUBJECT TO THIS SECTION BELOW, SUCH SUM SHALL BE PAID TO AND RETAINED BY SELLER AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST PURCHASER, AT LAW OR IN EQUITY, IN THE EVENT OF A DEFAULT BY PURCHASER IN PURCHASING THE PROPERTY UNDER THIS AGREEMENT ON THE PART OF PURCHASER. NOTWITHSTANDING THE FOREGOING, THE SURVIVING OBLIGATIONS (AS DEFINED IN THIS AGREEMENT) SHALL NOT BE LIMITED, IMPAIRED OR OTHERWISE AFFECTED BY ANY TERMINATION OF THIS AGREEMENT OR ANY LIQUIDATED DAMAGES RECEIVED BY SELLER PURSUANT TO THIS SECTION AS A RESULT OF PURCHASER'S DEFAULT. AS TO THE SURVIVING OBLIGATIONS, SELLER SHALL RETAIN THE RIGHT TO SEEK AND OBTAIN ANY AND ALL ADDITIONAL REMEDIES AVAILABLE AT LAW AND IN EQUITY AND SHALL NOT BE LIMITED OR AFFECTED BY THE LIQUIDATED DAMAGES PAID TO AND RETAINED BY SELLER PURSUANT TO THIS SECTION. IN PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS 20 LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS MADE. SELLER'S INITIALS: ____________ PURCHASER'S INITIALS: ____________ 15.6 Survival. Subject to the limitations specified in Section 4.1 -------- hereof, the representations, warranties, indemnification, defense and hold harmless obligations and the post Closing obligations of Seller and Purchaser contained or in the documents to be delivered at the Closing herein shall survive the Closing. 15.7 Construction. This Agreement shall not be construed more strictly ------------ against one party than against the other, merely by virtue of the fact that it may have been prepared primarily by counsel for one of the parties, it being recognized that both Purchaser and Seller have contributed substantially and materially to the preparation of this Agreement. 15.8 Confidential Information. Seller and Purchaser acknowledge that ------------------------ the economic terms of the transaction described herein are of confidential nature and shall not be disclosed except to consultants, lenders, attorneys, advisors and affiliates, or as required by law or regulation of any governmental authority or self regulatory organization (i.e., NYSE, NASD), or as reasonably necessary to consummate the transaction. Neither Seller nor Purchaser will make any public disclosure of the economic terms of this Agreement, except as provided in this paragraph. In connection with the preparation for the consummation of the transactions contemplated thereby, each party acknowledges that it will have access to confidential information relating to the other party. Each party shall treat such information as confidential, preserve the confidentiality thereof, not duplicate or use such information, except to advisors, attorneys, consultants, lenders and affiliates in connection with the transactions contemplated hereby, or in connection with any litigation involving Seller and Purchaser or related to the Property, or as required by law or regulation of any governmental authority or self-regulatory organization or as reasonably necessary to consummate the transaction. Seller acknowledges and agrees that any press release will be made only in a form approved in advance by Purchaser and Seller. The provisions of this Section 15.8 shall survive Closing. 15.9 General. This Agreement may be executed in any number of ------- counterparts, each of which shall constitute an original but all of which, taken together, shall constitute but one and the same instrument. This Agreement (including all Exhibits hereto) contains the entire agreement between the parties with respect to the subject matter hereof, supersedes all prior understandings, if any, with respect thereto (including without limitation that certain letter signed by Purchaser and Seller dated August 10, 2001) and may not be amended, supplemented or terminated, nor shall any Obligation hereunder or condition hereof be deemed waived, except by a written instrument to such effect signed by the party to be charged or as otherwise expressly provided herein. The warranties, representations, agreements and undertakings contained herein shall not be deemed to have been made for the benefit of any person or entity, other than the parties hereto and their permitted successors and assigns. Captions used herein are for convenience only and shall not be used to construe the meaning of any part of this Agreement. If Seller is comprised of more than one person or entity, the obligations of each such person or entity shall be independent of the other person or entity comprising Seller, such that one person 21 or entity comprising Seller shall not be liable for the breach of the other person or entity's obligations hereunder. 15.10 Headings. The headings preceding the text of the paragraphs and -------- subparagraphs hereof are inserted solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. 15.11 Governing Law; Parties at Interest. This Agreement will be ---------------------------------- governed by the law of the State of California, and will bind and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, permitted assigns and personal representatives. Neither Seller nor Purchaser shall assign any of its rights or obligations pursuant to this Agreement without the consent of the other; provided, however, that (i) Seller shall be permitted to assign its rights and obligations hereunder to an entity affiliated with Seller or in connection with any like-kind exchange referenced in Section 15.16 below, and (ii) Purchaser shall be permitted to assign its rights and obligations hereunder to an affiliate of Purchaser or to an entity established to facilitate a sale-leaseback, synthetic lease or other off-balance sheet financing. Any such assignment by Seller shall not relieve Seller from its liability under this Agreement. Any such assignment by Purchaser shall not relieve Purchaser from its liability under this Agreement for matters accruing prior to the assignment, and, unless such assignment is made at Closing, until Closing, Purchaser shall remain jointly and severally liable with the assignee for matters accruing after the Assignment. If the Assignment is made at Closing, Purchaser shall have no liability under this Agreement for matters accruing after the Assignment. 15.12 Computation of Time. In computing any period of time pursuant to ------------------- this Agreement, the day of the act or event from which the designated period of time begins to run will not be included. The last day of the period so computed will be included, unless it is a Saturday, Sunday or legal holiday, in which event the period runs until the end of the next day which is not a Saturday, Sunday or such legal holiday. 15.13 [Retained for Numbering Purposes Only.] 15.14 Time of the Essence. All times, wherever specified herein for the ------------------- performance by Seller or Purchaser of their respective obligations hereunder, are of the essence of this Agreement. 15.15 As-Is and Release. Except as otherwise specifically represented ----------------- by Seller in this Agreement, Purchaser acknowledges and agrees that the Property is to be purchased, conveyed and accepted by Purchaser in its present condition, "AS-IS, WHERE-IS, WITH ALL FAULTS", without representation or warranty of any kind, express or implied, and that no patent or latent defect in the condition of the Property, whether or not known or discovered, shall give rise to any claim or cause of action by Purchaser against Seller. Purchaser acknowledges and agrees that prior to the end of the Contingency Period, Purchaser and its representatives will have been afforded sufficient opportunity to make and complete such review of the documents received in connection with the Property and inspections of the Property and matters related thereto, and to investigate any land use or other governmental issues affecting the Property as Purchaser and its representatives desire and, except as otherwise expressly provided herein, Purchaser shall accept the Property upon the basis of its review and determinations. Except as otherwise expressly 22 provided herein, Purchaser acknowledges that the Property has been leased or otherwise used from time to time for various industrial/commercial purposes, and has been in the past and is currently subject to a number of environmental concerns. Purchaser further acknowledges that prior to the end of the Contingency Period it will have been given the opportunity to review and be knowledgeable of the matters described in the materials provided by Seller and that Purchaser will acquire the Property subject to all matters described in such materials. Purchaser acknowledges that the materials provided by Seller do not constitute all materials ever received by Seller with respect to the Property, and specifically, without limiting the foregoing, that over the years Seller has received significantly more reports and other information relating to the environmental condition of the Property which are no longer in Seller's possession. Purchaser therefore agrees to rely on the investigations of its environmental and other consultants in ascertaining the present condition of the Property. Purchaser acknowledges that some or all of the materials provided by Seller may have been obtained from previous owners or users of the Property or other sources and Seller makes no representation or warranty as to the reputation or reliability of the persons or entities preparing the materials. Notwithstanding that Seller has made materials available for Purchaser's review, Purchaser will make its own investigation relative to the Property and will rely on its own investigation in determining the suitability of the Property for its use. Without limiting the foregoing, Purchaser shall be responsible for confirming the accuracy of title materials provided by Seller, and for obtaining from the City of Mountain View confirmation of the existence and extent of any City development, zoning or land use approvals. Purchaser acknowledges receipt of the three reports prepared by JCP Geoplogists ("JCP") dated August 28, 2001, relating to the location of the Real Property within any natural hazard disclosure zone (the "Natural Hazard Disclosure Reports"). Purchaser acknowledges that it will prior to Closing conduct and rely its own independent investigations as to whether the Property is located within any natural hazard disclosure zone and that Seller makes no representations or warranties and shall have no liability in connection with such matters, notwithstanding any terms or conditions contained in the Natural Hazard Disclosure Reports. Purchaser, on behalf of Purchaser and its officers, directors, members, employees, agents, shareholders, heirs, executors, administrators, successors and assigns, does hereby waive, release and forever discharge Seller and its officers, directors, members, partners, employees, agents, heirs, executors, administrators, successors and assigns from any and all claims, actions causes of action, demands, liabilities, damages, costs, expenses or compensation whatsoever, whether direct or indirect, known or unknown, foreseeable or unforeseeable ("Claims"), which Purchaser may have at Closing or which may arise in the future on account of or in any way arising out of or connected with the Property (except for breach of Seller's express representations made in this Agreement), including without limitation: (i) the physical condition, nature or quality of the Property (including the soils and groundwater on and under the Property); and (ii) the presence or release in, under, on or about the Property (including the soils and groundwater on and under the Property) of any Hazardous Materials. Purchaser, on behalf of Purchaser and its officers, directors, members, employees, agents, shareholders, heirs, executors, administrators, successors an assigns, hereby waives the protection of California Civil Code Section 1542, which reads as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, 23 which if known by him must have materially affected his settlement with the debtor. Purchaser's Initials: _______________ Notwithstanding anything to the contrary contained herein, the foregoing release shall specifically exclude any Claim which Purchaser may allegedly have against Seller (i) resulting from fraud on the part of the Seller, or (ii) with respect to the Surviving Obligations under this Agreement or any obligation of Seller pursuant to the Assignment delivered to Purchaser at Closing, or (iii) for any tort claims of third parties unrelated to Purchaser or any subsequent owner of the Property from any acts or negligent omissions of Seller for which Purchaser would not be liable under any Lease and not relating to Hazardous Materials, or (iv) any remediation costs or third party tort claims ( excluding tort claims in proceedings initiated by entities which Purchaser controls, is controlled by, or is under common control with ) arising out of the presence or release of Hazardous Materials for which the owner or operator of the Property from time to time has or may have liability under the 106 Order (as defined in the Settlement Agreement), as amended from time to time, or under any other administrative or judicial order issued from time to time with respect to the Contamination (as defined in the Settlement Agreement) or otherwise arising from or relating to Hazardous Materials contaminating the MEW Site (as defined in the 106 Order) at the time of execution of the Settlement Agreement, to the extent that such liability is not required by the terms of the Settlement Agreement, Siemens Indemnity, Siemens Guaranty, New Indemnity and New Guaranty to be fully performed and discharged by SCI or Siemens to and for the direct benefit of Purchaser pursuant to the Settlement Agreement (as assigned by Seller to Purchaser), the Siemens Indemnity, the Siemens Guaranty, the New Indemnity, or the New Guaranty. As to (iv) immediately above, Seller shall not have any liability for costs incurred as a result of SCI's or Siemens' bankruptcy, insolvency or breach of their obligation under the Settlement Agreement, Siemens Indemnity, Siemens Guaranty, New Indemnity or New Guaranty. 15.16 Like-Kind Exchange. Purchaser agrees to cooperate reasonably ------------------ with Seller in effecting one or more exchange transactions which includes the Property or any portion thereof, pursuant to Section 1031 of the United States Internal Revenue Code, provided that any such exchange transactions, and the related documentation, shall: (a) be at the sole cost and expense of Seller (other than costs and expenses incurred in connection with any review by Seller's attorneys or other consultants), (b) not require Purchaser to execute any contract, make any commitment, or incur any obligations, contingent or otherwise, to third parties, (c) not cause Purchaser to be liable or potentially liable for any environmental conditions affecting property other than the Property, (d) not delay the closing of the transaction, (e) not include Purchaser's acquiring title to any property other than the Property or otherwise becoming involved in a transaction with a third party, and (f) not excuse Seller from any of its obligations under this Agreement, (g) not otherwise be contrary to or inconsistent with the terms of this Agreement. Seller acknowledges that it is not relying on any representation of Purchaser or its counsel with respect to the tax treatment of Seller or any other aspect of the exchange. 15.17 [Retained for Numbering Purposes Only.] 24 15.18 Attorneys' Fees. If any legal proceeding is brought or --------------- undertaken to enforce this Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement, then the prevailing party or parties in such proceeding shall be entitled to recover reasonable attorneys' and other professionals' fees, court costs and other expenses incurred in such action or proceeding, in addition to any other relief to which such party may be entitled. The provisions of this Section shall survive the Close of Escrow or the termination of this Agreement IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed, all as of the day and year first above written. SELLER: ELLIS-MIDDLEFIELD BUSINESS PARK, a California limited partnership By: THE 1979 JAS TRUST Its: sole general partner By:__________________________________ JOHN MICHAEL SOBRATO, Trustee PURCHASER: VERISIGN, INC., a Delaware corporation By:________________________________________ Name:___________________________________ Title:__________________________________ JOINDER ------- The 1979 JAS Trust hereby joins in the foregoing Agreement for the purpose of agreeing to be jointly and severally liable with Seller for all post-closing liability of Seller under this Agreement for which a claim is made (a) under Section 4.1(k) prior to the expiration of the survival period for Section 4.1(k) and (b) under any other Section of this Agreement, prior to the first anniversary of the Closing Date; provided, however, that the 1979 JAS Trust shall not have any liability pursuant to this Joinder if the aggregate net worth of Seller does not fall below fifty percent (50%) of the net proceeds from the closing of the transactions contemplated hereby (a) with respect to a claim under Section 4.1(k), prior to the satisfaction of any such claim made prior to the expiration of the survival period for Section 4.1(k), and (b) for claims under any other Section of this Agreement, prior to satisfaction of any such claims made prior to the first anniversary of the Closing Date. THE 1979 JAS TRUST Its: sole general partner By:______________________________________ JOHN MICHAEL SOBRATO, Trustee EXHIBIT A --------- LAND LEGAL DESCRIPTION ---------------------- All that certain real property situated in the City of Mountain View, County of Santa Clara, State of California, described as follows: Parcels A, B, and C, of Parcel Map recorded in Book 314 of Maps, Page 14, pursuant to the Lot Line Adjustment, recorded September 15, 1988 in Book K 681, Page 1392 and Book K 681, Page 1396 of Official Records. EXCEPTING THEREFROM all that portion of land granted the Santa Clara County Transit District by deed filed for record in the office of the Recorder of the County of Santa Clara on June 5, 1997 under Recorder's Series No. 13728710, Official Records, and being more particularly described as follows: All that certain real property situated in the City of Mountain View, County of Santa Clara, State of California, and being a portion of Parcel C as shown on that certain Parcel Map recorded in Book 314 of Maps, at Page 14, Records of Santa Clara County and being described as follows: BEGINNING at the most Easterly corner of said Parcel C, said point also being on a non-tangent curve to the right (concave to the Northwest) the center of which bears N 66(degrees) 57' 42" W, 548.11 feet; Thence along the arc of said curve, and along the Southeasterly line of said Parcel C, through a central angle of 12(degrees) 16' 03", for an arc length of 117.35 feet to a point on a non-tangent curve to the left (concave to the Northwest) the center of which bears N 56(degrees) 02' 06" W, 560.00 feet; Thence departing said Southeasterly line along the arc of said curve through a central angle of 12(degrees) 05' 27", for an arc length of 118.17 feet to a point on the Northeasterly line of said Parcel C, said point being on a non-tangent curve to the right (concave to the Southwest) the center of which bears S 46(degrees) 17' 13" W, 1,450.00 feet; Thence along said Northeasterly line and along the arc of said curve through a central angle of 00(degrees) 06' 24", for an arc length of 2.70 feet to the point of beginning. ARB No: 159-40-048; 049; 050 APN No: 160-52-016; 17; 20 A-1 EXHIBIT B --------- PERMITTED EXCEPTIONS -------------------- 1. PROPERTY TAXES, including any assessments collected with taxes, for the fiscal year 2001-2002, a lien, not yet due or payable. 1st Installment $14,055.22 Open 2nd Installment $14,055.22 Open Assessor's Parcel No. 160-52-016 Code Area 05-001 Land $992,521.00 IMP $1,412,994.00 PP NONE Exemp NONE (Affects Parcel A) 2. PROPERTY TAXES, including any assessments collected with taxes, for the fiscal year 2001-2002, a lien, not yet due or payable. 1st Installment $90,091.69 Open 2nd Installment $90,091.69 Open Assessor's Parcel No. 160-52-017 Code Area 05-001 Land $2,533,084.00 IMP $13,453,247.00 PP NONE Exemp NONE (Affects Parcel B) 3. PROPERTY TAXES, including any assessments collected with taxes, for the fiscal year 2001-2002, a lien, not yet due or payable. 1st Installment $15,088.43 Open 2nd Installment $15,088.43 Open Assessor's Parcel No. 160-52-020 Code Area 05-001 Land $990,786.00 IMP $1,595,548.00 PP NONE Exemp NONE (Affects Parcel C) 4. The lien of supplemental taxes, if any, assessed pursuant to the provisions of Chapter 3.5, (commencing with Section 75) to the Revenue and Taxation Code of the State of California. No such supplemental taxes are currently due and payable. 5. An easement affecting the portion of said land and for the purpose stated herein and incidental purposes, In Favor Of: Pacific Gas and Electric Company, a corporation For: The right and privilege of erecting, maintaining and using, for the transmission and distribution of electricity and for all purposes connected therewith, a single line of Poles and wires suspended thereon and all necessary and property guys, B-1 cross-arms and braces and other fixtures for use in connection therewith, and also a right of way along said line of poles, together with the right of ingress thereto and egress therefrom Recorded: April 22, 1931 in Book 562, Page 524, Official Records Affects: The Southwesterly 25 feet of Parcel A and the Southwesterly portion of Parcel B 6. An easement affecting the portion of said land and for the purpose stated herein and incidental purposes, In Favor Of: City of Mountain View Recorded: January 29, 1960 in Book 4675, Page 157, Official Records (A) For: Installation and Maintenance of Overhead and Underground Electrical and Telephone Wires together with Wire Clearance and Ingress and Egress thereto Affects: Southwesterly 15 feet of Parcels A, B and C (B) For: Anchor Easement Affects: A 2' x 30' strip situated in the most Westerly portion of Parcel B 7. An easement affecting the portion of said land and for the purpose stated herein and incidental purposes, In Favor Of: Pacific Bell For: Underground communication facilities Recorded: August 8, 1988 in Book K 633, Page 42, Official Records Affects: as follows: A portion of Parcel "B" as said Parcel is shown on that certain Parcel Map recorded in Book 314 of Maps at page 14, in the Office of the Recorder of Santa Clara County, said portion being more particularly described as follows: A strip of land five (5) feet in width, lying two and one-half (2.5) feet on each side of the facilities initially placed. 8. An unrecorded Lease, affecting the premises herein stated, executed by and between the parties named herein, for the terms and upon the terms, covenants, and conditions therein provided, Dated: April 28, 1995 Lessor: Ellis-Middlefield Business Park, a California limited partnership Lessee: Netscape Communications Corporation, a Delaware corporation B-2 Disclosed by: Subordination, Non-Disturbance and Attornment Agreement Recorded: July 19, 1995 in Book N 924, Page 1709, Official Records Affects: said land 9. An unrecorded Lease, affecting the premises herein stated, executed by and between the parties named herein, for the terms and upon the terms, covenants, and conditions therein provided, Dated: October 14, 1994 Lessor: Ellis-Middlefield Business Park, a California limited partnership Lessee: Netscape Communications Corporation, a Delaware corporation, formerly known as Mosaic Communications Corporation Disclosed by: Subordination, Non-Disturbance and Attornment Agreement Recorded: July 19, 1995 in Book N 924, Page 1720, Official Records Affects: said land 10. An easement affecting the portion of said land and for the purpose stated herein and incidental purposes, In Favor Of: Pacific Bell, a California corporation For: to construct and maintain communication facilities (including-ingress thereto and egress therefrom) Recorded: July 7, 1999 under Recorder's Series No. 14885523, Official Records Affects: as follows A portion of Parcel "B" as shown on the Parcel Map filed December 21, 1972 in Book 314 of Parcel Maps at page 14, Santa Clara County Records, described as follows: Commencing at the Southeast comer of said Parcel "B"; thence along the South line of said Parcel "B" North 38(degrees) 12' 25" West, 79.76 feet; thence leaving said South line of Parcel "B" North 51(degrees) 47' 35" East, 10.00 feet to the point of beginning; thence continuing North 51(degrees) 47'35" East, 20.00 feet; thence North 38(degrees) 12' 25" West, 35.00 feet; thence South 51(degrees) 47' 35" West, 20.00 feet; thence South 38(degrees) 12' 25" East, 35.00 feet to the point of beginning. 11. Any rights, interests, or claims that may exist or arise by reason of the following facts as shown on an ALTA/ACSM LAND TITLE SURVEY prepared by Kier & Wright Civil Engineers & Surveyors, Inc. prepared for Sobrato Development Company Job No. 85115-5 dated September 4, 2001: The fact that parking spaces and curbs and gutters are located on the easement recorded April 22, 1931 in Book 562, Page 524, Official Records as shown on said survey. B-3 The fact that parking spaces, curbs and gutters, and a portion of an equipment area are located on the easement recorded January 29, 1960 in Book 4675 Page 157, Official Records as shown on said survey. The fact that curbs are located on the easement recorded July 7, 1999 under Recorder's Series No. 14885523, Official Records. The fact that the easement recorded August 8, 1988 in Book K633 Page 42, Official Records is not shown on said survey. 12. Matters caused by Purchaser, Purchaser's Representatives or any subtenant of Purchaser. 13. The Access Agreement. B-4 EXHIBIT C --------- SUBMISSION MATTERS ------------------ A. Copies of all lease agreements in effect as of the date of the Contract (other than those naming Purchaser or an affiliate of Purchaser as the tenant, or any subleases or other agreements to which Purchaser or an affiliate of Purchaser is a party), if any. B. A complete list of all contracts (other than leases) in effect as of the date of the Contract and complete copies of all such contracts, other than contracts to which Purchaser or an affiliate of Purchaser is a party. C. A schedule setting forth the type and amounts of insurance coverage maintained by the Seller with respect to the Property as of the date of the Contract and complete copies of all such insurance policies. D. If or to the extent in the Seller's possession or reasonably available to the Seller: (i) Copies of complete sets of all architectural, mechanical, structural and/or electrical plans and specification used in connection with the construction of or alterations or repairs to the Property together with copies of as-built plans and specifications for the Property. (ii) Copies of all soil tests, structural engineering tests, masonry tests, percolation tests, water, oil, gas, mineral, radon, formaldehyde, PCB or other environmental tests, audits or reports, market studies and site plans related to the Property. (iii) Parking, structural, mechanical or other engineering reports or studies related to the Property, if any. (iv) Copies of the most current ALTA surveys of all or any portion of the Property. (v) Copies of all authorizations, including, without limitation, all certificates of occupancy, permits, authorizations, approvals and licenses issued by Governmental Authorities having jurisdiction over the Property and copies of all certificates issued by the local board of fire underwriters or other body exercising similar functions) relating to the Property. (vi) Financial and operating statements for the Property for the previous three (3) calendar years and the year to date. (vii) Copies of receipts for all ad valorem taxes and special assessments assessed against the Property for the current calendar year and prior three (3) calendar years, statements for utilities payable for the current calendar year and prior three calendar years, statements for utilities payable for the C-1 current calendar year and prior three calendar years, and any information regarding current renditions or assessments on the Property or notices relative to change in valuation for ad valorem taxes. (viii) Copies of all warranties. C-2 EXHIBIT D --------- BUILDING 4 OPTION ----------------- D-1 OPTION AGREEMENT ---------------- THIS OPTION AGREEMENT (the "Agreement") is entered into as of the 1st day of October, 2001 by and among SOBRATO CONSTRUCTION CORPORATION, a California corporation ("Sobrato Construction"), and EMBP 455, L. L. C., a California limited liability company ("Owner"). R E C I T A L S: ---------------- P. VeriSign, Inc., a Delaware corporation ("VeriSign") and Ellis-Middlefield Business Park, a California limited partnership ("EMBP"), entered into that certain Agreement to Purchase Buildings dated as of the 28th day of September, 2001 ("Purchase Agreement"), pursuant to which VeriSign agreed to purchase and EMBP agreed to sell certain real property located in Mountain View, California and the personal property related thereto, as more specifically described in the Purchase Agreement ("Property"). Q. VeriSign assigned its interests under the Purchase Agreement to Owner. R. Sobrato Construction is an affiliate of EMBP. S. Owner desires to have the option to have Sobrato Construction construct a four-story, approximately 102,000 square foot building ("Building 4") on land located at 575 East Middlefield Road, Mountain View, California ("575 Property"), which is a portion of the Property, in accordance with the Standard Form of Agreements between Owner and Design/Builder (Parts One and Two) attached hereto as Exhibit "A" ("Construction Contract"). T. To induce Owner to consummate the transaction contemplated by the Purchase Agreement, Sobrato Construction agrees to enter into this Agreement. A G R E E M E N T S ------------------- NOW THEREFORE, for and in consideration of the recitals set forth above, ten dollars ($10), and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Recitals Incorporated; Certain Defined Terms. The recitals set forth -------------------------------------------- above are incorporated into this Agreement and shall be deemed terms and provisions hereof, the same as if fully set forth in this Paragraph 1. All capitalized terms used herein not otherwise defined shall have the meanings ascribed to them in the Agreement. 2. Construction Option. ------------------- a. Owner shall have the option to have Sobrato Construction construct Building 4 on the 575 Property (the "Option") on the terms and conditions set forth herein and in accordance with the Construction Contract. The Option shall be exercisable from and after the date of Substantial Completion of the parking garage serving 455, 487, D-2 501 and 575 East Middlefield Road, Mountain View, California (the "Garage") to and including February 1, 2005 (the "Option Period"), provided that, if the Option is exercised after March 5, 2003, all approvals necessary for the construction of Building 4 have been obtained by Design/Builder at the time of exercise and will not expire before commencement of construction. Such Option may be exercised at any time during the Option Period by Owner's giving Sobrato Construction written notice of Owner's exercise thereof (the "Notice of Exercise") which Notice of Exercise shall be accompanied by four (4) copies of the Construction Contract each dated as of the date of the Notice of Exercise and executed by Owner. Time shall be of the essence as to Owner's obligation to deliver any such Notice of Exercise during the Option Period. If Owner fails to deliver the Notice of Exercise and the four (4) executed copies of the Construction Contract to Owner prior to expiration of the Option Period, Owner's rights under this Agreement, with the exception of the Owner's right to use the plans and specifications as set forth in paragraph 2 (h), shall terminate and be of no further force and effect. b. Provided Owner has timely exercised its Option, within five (5) days after Sobrato Construction's receipt of a Notice of Exercise, Sobrato Construction shall return to Owner two (2) of the four (4) copies of the Construction Contract that Owner delivered to Sobrato Construction with the Notice of Exercise, executed by Sobrato Construction and the John Michael Sobrato 1985 Separate Property Trust. c. If Owner timely exercises the Option: (a) Owner shall compensate Sobrato Construction for performance of the Work (as used in this Agreement, the term "Work" shall have the meaning ascribed to such term in the Construction Contract) in the amount and manner provided in the Construction Contract; and (b) Sobrato Construction shall complete the Work in accordance with the terms of the Construction Contract. d. Performance of the Work shall be completed within one (1) year after the Date of Commencement. (As used in this Agreement, the term "Date of Commencement" shall have the meaning ascribed to such term in the Construction Contract.) e. Sobrato Construction has the responsibility for ensuring that the Work is performed in accordance with all applicable laws, codes and regulations. Said responsibility includes assisting Owner in obtaining and maintaining all necessary governmental authorizations necessary to construct Building 4, including but not limited to preparing and processing applications for building permits and zoning approvals. If any required governmental approval will expire prior to commencement of construction, then at least ninety (90) days prior to such expiration, Sobrato Construction shall prepare and process all documentation necessary to renew such approval. Owner shall thoroughly and promptly provide all information and execute all documentation necessary to obtain such governmental authorizations and renewals within seven (7) days after receipt of written request therefor from Sobrato Construction. Any cost thereof incurred prior to the execution of the Construction Contract shall be borne by the parties in the manner described in the Construction Contract, and to the extent any fees payable to the governmental authority in connection with such authorizations and renewals are to D-3 be borne by Owner, Owner shall submit such payment to Sobrato Construction in sufficient time to allow Sobrato Construction to pay such fee to the governmental authority on or prior to the due date thereof. f. An index of plans and specifications for the core and shell of Building 4 is attached as Exhibit B. The "Core" work is all work reflected in the plans and specifications listed in Exhibit B typically associated in the industry with an office building core, including elevators, restrooms, fire sprinklers, HVAC and electrical systems distributed to each floor, exiting stair finishes, and a finished building lobby. The "Shell" work is all work reflected in the plans and specifications in Exhibit B that is not part of the Core work, including but not limited to site work, foundation, structural framework, exterior wall system, roof and landscaping. Within thirty (30) days after execution of this Agreement, the parties shall append a new Exhibit B hereto, which shall more clearly delineate between Core and Shell work. The Work includes only the Shell of Building 4. At Owner's option (not to be exercise more than twice during the Option Period), Sobrato Construction shall, within thirty (30) days after receipt of written request therefor, submit to Owner a bid to construct the Core of Building 4 which bid shall include competitive bids from at least three (3) subcontractors for each aspect of the Core work in excess of Fifty Thousand and No Hundredths Dollars ($50,000.00). The lowest qualified bidder for each aspect of the work shall be the subcontractor selected to perform that work, subject to Owner's approval. Within sixty (60) days after submittal of the bid for the Core work to Owner, Owner may elect, in its sole discretion, by delivery of written notice to Sobrato Construction, to increase the scope of the Work to include the Core work. If Owner does not deliver written notice of its election to increase the scope of the work to include the Core work within this sixty- (60-) day period, the bid shall no longer be effective and the Owner can no longer accept that bid. If Owner timely elects to increase the scope of the Work to include the Core work and delivers the Notice of Exercise, Owner and Sobrato Construction shall promptly execute a written Change Order for the Core Work, which shall provide for the increase in the Contract Price by the amount of Sobrato Construction's submitted bid (which bid, if Owner approves a subcontractor bid that is not the lowest bid, shall be increased by the increased cost resulting from the selection of a higher bid) plus seven percent (7%) of cost of the Core work for overhead, profit, supervision and general conditions, and for the extension of the time for completion of the Shell and Core work to fourteen (14) months after the Date of Commencement. g. Any changes to the Work prior to delivery of the Notice of Exercise during the Option Period--including but not limited to adding construction of the Core to the Work--shall be solely pursuant to a written change order between Owner and Sobrato Construction, executed in accordance with the Construction Contract and made effective as of the Date of Commencement; provided however that any costs incurred by Sobrato Construction prior to delivery of the Notice of Exercise as a result of such changes, to the extent the cost would be required to be borne by Owner under the terms of the Construction Contract, shall be paid by Owner to Sobrato Construction within fifteen (15) days after request for payment is delivered to Owner and shall be retained by Sobrato Construction if Owner fails to timely deliver the Notice of Exercise (and if not paid when due, shall bear interest at the rate described in Section 13.3.1 of Part Two of D-4 the Construction Contract from the due date until paid in full). All changes to the Work resulting in an increase in the Construction Contract Sum shall be billed to Owner at actual cost, plus seven percent (7%) as a mark-up for Sobrato Construction. The seven percent (7%) mark-up includes all of Sobrato Construction's profit, overhead (including but not limited to home office administration, supervision and coordination) and general conditions (including but not limited to construction supervision and administration, temporary on-site facilities). There shall be no mark-up for any work that is performed by Sobrato Construction's own forces. h. In accordance with Exhibit C, Sobrato Construction hereby grants Owner an irrevocable license to use the plans referenced in the Exhibit B hereto to perform the Work at the 575 Property, without any limitation as to time, and regardless of whether Owner exercises the Option to hire Sobrato Construction to perform the Work. Sobrato Construction hereby furnishes Owner with Arctec Associates' and Nishkian Menningers' approval to use the Construction Documents to perform the Work at the 575 Property, and not later than October 8, 2001 shall furnish Owner with the remaining architect and engineer approvals, all in the form of Consents attached to Exhibit C. The obligations of this subparagraph shall survive the termination of this Agreement. i. Sobrato Construction has provided Owner with a construction schedule for Owner's approval, a copy of which is attached as Exhibit D. 3. Miscellaneous. ------------- a. This Agreement and all provisions hereof shall extend to, be binding upon, inure to the benefit of and be enforceable by and against the respective heirs, legatees, successors and assigns of the parties hereto. b. Except as provided herein, this Agreement contains the entire agreement between the parties relating to the transactions contemplated hereby. c. This Agreement shall be governed by and construed in accordance with the laws of the State of California. d. If any of the provisions of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be deemed invalid or unenforceable, the remainder of this Agreement and the application of such provisions to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby. e. To facilitate execution of this Agreement, this Agreement may be executed in multiple counterparts, each of which, when assembled to include an original signature for each party contemplated to sign this Agreement, will constitute a complete and fully executed original. All such fully executed original counterparts will collectively constitute a single agreement. f. If either party institutes a legal action against the other relating to this Agreement or any default hereunder, the unsuccessful party to such action will reimburse D-5 the successful party for the reasonable expenses of prosecuting or defending such action, including without limitation attorneys' fees and disbursements and court costs. g. Section headings contained herein are for convenience or reference only, and shall not govern the interpretation of any of the provisions contained herein. h. This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that the Agreement may have been prepared primarily by counsel for one of the parties, it being recognized that both Sobrato Construction and Owner have contributed substantially and materially to the preparation of this Agreement. i. If, under the terms of this Agreement and the calculation of time periods provided herein, any date to be determined under this Agreement should fall on a Saturday, Sunday, legal holiday or any other day on which banks in San Francisco, California are not open for business, then such date shall be extended to the next business day. [SIGNATURE PAGE FOLLOWS] D-6 IN WITNESS WHEREOF, SOBRATO CONSTRUCTION and OWNER have respectively executed this Amendment to be effective as of the date first above written. SOBRATO CONSTRUCTION: SOBRATO CONSTRUCTION CORPORATION, a California corporation By: __________________________________ Name: ___________________________ Title: __________________________ OWNER: EMBP 455, L.L.C., a California limited liability corporation By: __________________________________ Name: ___________________________ Title: __________________________ D-7 JOINDER ------- The John Michael Sobrato 1985 Separate Property Trust hereby joins in the execution of this Agreement to acknowledge and agree that it shall be held jointly and severally liable for Sobrato's obligations hereunder, subject to the terms and conditions of the Joinder set forth in the Construction Contract. _______________________________ JOHN MICHAEL SOBRATO, Trustee D-8 EXHIBIT A --------- CONSTRUCTION CONTRACT --------------------- [Attached] D-9 EXHIBIT B --------- PLANS AND SPECIFICATIONS ------------------------ [Attached] D-10 EXHIBIT C --------- LICENSE ------- FOR VALUE RECEIVED Sobrato Construction hereby grants unto EMBP 455, L.L.C. (the "Owner") a license (the "License") to retain and alter those certain Plans and Specifications and all amendments, modifications, supplements and addenda thereto (and including all preliminary and final plans and specifications) (the "Plans") prepared by Arctec Associates and other architects and engineers identified in the Consents attached hereto (collectively, the "Architect"), which Plans have been prepared for the account of and in connection with the development and construction of a certain building and related improvements located at 575 East Middlefield Road, Mountain View, California and to be known as "the Project", a true, correct and complete schedule of which is attached hereto as Exhibit 1. Sobrato Construction retains all common law, statutory and other reserved rights, including copyright, in the Plans. The Owner is permitted to use the Plans only for the completion of, and additions and renovations to, the Project at 575 East Middlefield Road, Mountain View, California. For purposes hereof, "Plans" shall mean all of the Architect's work product and reproductions now existing or as supplemented, amended or added to from time to time for the account of Sobrato Construction and prepared and designed for the construction of such office building and related improvements, inclusive of all further work product required for the completion thereof. Sobrato Construction hereby represents and warrants to Owner that no previous assignment of interest in the Plans has been made by Sobrato Construction, and Sobrato Construction agrees not to assign, pledge, transfer or otherwise encumber its interest in the Plans so long as this Assignment remains in effect. This License shall be irrevocable and binding upon Sobrato Construction and its successors and assigns and shall inure to the benefit of the Owner, its successor and assigns. This License is conditioned on the representation and covenant of Owner that, if the Owner alters the Plans, the Owner thereby waives any claim against Sobrato Construction or its officers, directors, members, partners, affiliates, employees, agents, heirs, executors, administrators, successors and assigns ("collectively "SC Parties"), and shall indemnify, defend with counsel reasonably acceptable to Sobrato Construction, and hold Sobrato Construction and SC Parties harmless from any lawsuits, claims, damages, losses, expenses, or disputes, arising out of errors and omissions contained in the Plans, but such waiver, indemnification, defense and hold harmless obligation shall apply only to the extent that