-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BKJiYnwbgr1JNh/9SWV3H6m4P17TdLi4mUCd5+mJ2XIzRzL8W/98RB9+gBOcealP SUUrQM5kppXBsMjRfJzs0Q== 0000912057-97-003408.txt : 19970225 0000912057-97-003408.hdr.sgml : 19970225 ACCESSION NUMBER: 0000912057-97-003408 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970122 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970206 SROS: AMEX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSION WEST PROPERTIES/NEW/ CENTRAL INDEX KEY: 0000704874 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 952635431 STATE OF INCORPORATION: CA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08383 FILM NUMBER: 97519472 BUSINESS ADDRESS: STREET 1: 6815 FLANDERS DR STE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194503135 MAIL ADDRESS: STREET 1: 6815 FLANDERS DR STREET 2: SUITE 250 CITY: SAN DIEGO STATE: CA ZIP: 92121-3914 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): JANUARY 22, 1997 Commission File Number 1-8383 MISSION WEST PROPERTIES Incorporated in California IRS Employer Identification Number: 95-2635431 Principal Executive Offices: Telephone: (619) 450-3135 6815 Flanders Drive, Suite 250 San Diego, California 92121-3914 ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS On December 6, 1996, Mission West Properties (seller and "the Company") entered into an agreement (the "Agreement") to sell all its real estate assets to Spieker Properties, L.P. (purchaser and "Spieker"), a California limited partnership, for $50,500,000 cash. The Company's real estate constituted nearly all of its assets. A special shareholder meeting was held December 16, 1996, at which time the Company's shareholders approved the sale of the real estate assets to Spieker. A majority of the sale transaction was completed January 22, 1997, at which time nine (9) of the Company's 11 real estate properties were sold. The remaining two (2) properties are anticipated to close within 120 days after January 22, 1997. The nine (9) properties sold consisted of occupied office, light industrial, and R&D buildings in San Diego and Riverside counties, California, and occupied industrial buildings and vacant land in Chandler, Arizona. The total building space sold approximated 685,000 square feet. The two (2) remaining properties consist of leaseholds, together with hangar and office buildings thereon, comprising approximately 25 percent of the land at Palomar-McClellan airport in San Diego county, California. Upon completion of sale of the nine (9) properties, the Company received $47,500,000 in cash, from which it repaid all debt encumbering the properties and paid a majority of the related transaction and closing costs. In accordance with the Agreement, $300,000 was withheld from the proceeds to allow for satisfaction of any post-closing breaches of representations and warranties made by the Seller. If no such breaches occur, the $300,000 will be released to the Company after 90 days. Also in accordance with the Agreement, upon completion of sale of the two (2) leasehold properties, the Company will receive $3,000,000 in cash, subject to an additional $300,000 representation and warranty holdback (for 90 days), and will repay related debt and transaction costs from the proceeds. There is no relationship between the Company and Spieker. ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS (b) PRO FORMA FINANCIAL INFORMATION: The following unaudited pro forma consolidated financial statements are filed with this report: Pro Forma Consolidated Balance Sheet as of August 31, 1996 Pro Forma Consolidated Statement of Operations for the Year Ended November 30, 1995 Pro Forma Consolidated Statement of Operations for the Year Ended November 30, 1994 Pro Forma Consolidated Statement of Operations for the Year Ended November 30, 1993 Pro Forma Consolidated Statement of Operations for the Nine Months Ended August 31, 1996 Pro Forma Consolidated Statement of Operations for the Nine Months Ended August 31, 1995 The Pro Forma Consolidated Balance Sheet reflects the financial position of the Company after giving effect to the sale of the nine (9) real estate properties and satisfaction of the related liabilities as discussed in Item 2 and assumes the sale took place on August 31, 1996. The Pro Forma Consolidated Statements of Operations assume that the sale occurred on December 1, 1994, December 1, 1993, and December 1, 1992 for the years ended November 30, 1995, November 30, 1994, and November 30, 1993, respectively, and that the sale occurred on December 1, 1995 and December 1, 1994 for the nine- (9) month periods ended August 31, 1996 and August 31, 1995, respectively. The unaudited pro forma consolidated financial statements have been prepared by the Company based upon assumptions deemed proper by management. The unaudited pro forma consolidated financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of the Company, or of the financial position - 2 - or results of operations of the company that would have actually occurred had the transaction been in effect as of the date or for the pro forma periods presented. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements and related notes thereto. (10) ADDITIONAL EXHIBITS: Amendment No. 1 to Agreement of Purchase and Sale and Joint Escrow Instructions (99) ADDITIONAL EXHIBITS: January 23, 1997 News Release announcing completion of the sale of nine (9) properties SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. MISSION WEST PROPERTIES - ----------------------- Registrant By: /s/ Katrina L. Thompson ------------------------------------------------ Katrina L. Thompson Chief Financial Officer & Secretary (Principal Financial and Accounting Officer) February 6, 1997 - 3 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Balance Sheet As of August 31, 1996
Pro Forma Adjustments Historical (a) Pro Forma ----------- ------------ ------------ ASSETS: Cash and cash equivalents $ 1,880,000 $ 13,654,000 $15,534,000 Short-term investments, held-to-maturity 1,123,000 - 1,123,000 Real estate investments: Rental Properties, less accumulated depreciation of $1,164,000 ($2,381,000 pledged) 46,154,000 (42,392,000) 3,762,000 Unimproved land 461,000 (461,000) - Allowance for estimated losses (4,413,000) 3,759,000 (654,000) ----------- ------------ ----------- Net real estate investments 42,202,000 (39,094,000) 3,108,000 ----------- ------------ ----------- Other assets, less allowances of $5,000 and accumulated depreciation of $314,000 1,168,000 (767,000) 401,000 ----------- ------------ ----------- $46,373,000 $(26,207,000) $20,166,000 ----------- ------------ ----------- ----------- ------------ ----------- LIABILITIES AND SHAREHOLDERS' EQUITY: Notes payable $30,982,000 $(29,295,000) $ 1,687,000 Accounts payable and accrued expenses 1,181,000 710,000 1,891,000 ----------- ------------ ----------- Total liabilities 32,163,000 (28,585,000) 3,578,000 ----------- ------------ ----------- Shareholders' equity: Common stock, no par value; 10,000,000 shares auth- orized, 1,371,121 shares issued and outstanding 19,456,000 - 19,456,000 Accumulated deficit (5,246,000) 2,378,000 (2,868,000) ----------- ------------ ----------- Total shareholders' equity 14,210,000 2,378,000 16,588,000 ----------- ------------ ----------- $46,373,000 $(26,207,000) $20,166,000 ----------- ------------ ----------- ----------- ------------ -----------
(a) Adjustments from the sale of real estate assets (includes the related tax effects, the proceeds, and the paydown of debt). - 4 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Statement of Operations Year Ended November 30, 1995
Pro Forma Adjustments Historical (a) Pro Forma ----------- ----------- ----------- REVENUES: Rental revenues from real estate $ 7,146,000 $(6,284,000) $ 862,000 Sales of real estate 400,000 - 400,000 Other, including interest 380,000 (102,000) 278,000 ----------- ----------- ----------- 7,926,000 (6,386,000) 1,540,000 ----------- ----------- ----------- EXPENSES: Operating expenses of real estate 1,783,000 (1,316,000) 467,000 Depreciation of real estate 1,352,000 (1,192,000) 160,000 Costs of real estate sold 324,000 - 324,000 General and administrative 945,000 (92,000) 853,000 Interest 3,435,000 (3,251,000) 184,000 ----------- ----------- ----------- 7,839,000 (5,851,000) 1,988,000 ----------- ----------- ----------- Income (loss) before gain on sale of real estate 87,000 (535,000) (448,000) Gain on sale of real estate - 3,928,000 3,928,000 ----------- ----------- ----------- Income before income taxes 87,000 3,393,000 3,480,000 Provision for income taxes 35,000 1,335,000 1,370,000 ----------- ----------- ----------- NET INCOME $ 52,000 $ 2,058,000 $ 2,110,000 ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME PER SHARE $ 0.04 $ 1.47 $ 1.51 ------ ------ ------ ------ ------ ------
(a) Adjustments from the sale of real estate assets. - 5 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Statement of Operations Year Ended November 30, 1994
Pro Forma Adjustments Historical (a) Pro Forma ------------ ------------ ------------ REVENUES: Rental revenues from real estate $ 6,637,000 $(5,846,000) $ 791,000 Sales of real estate 2,096,000 - 2,096,000 Other, including interest 564,000 (126,000) 438,000 ----------- ----------- ----------- 9,297,000 (5,972,000) 3,325,000 ----------- ----------- ----------- EXPENSES: Operating expenses of real estate 1,991,000 (1,579,000) 412,000 Depreciation of real estate 1,472,000 (1,306,000) 166,000 Costs of real estate sold 229,000 - 229,000 Provision for estimated losses on real estate 5,200,000 (4,546,000) 654,000 General and administrative 1,200,000 (108,000) 1,092,000 Interest 3,088,000 (2,927,000) 161,000 ----------- ----------- ----------- 13,180,000 (10,466,000) 2,714,000 ----------- ----------- ----------- Income (loss) before loss on sale of real estate (3,883,000) 4,494,000 611,000 Loss on sale of real estate - (618,000) (618,000) ----------- ----------- ----------- Income (loss) before income taxes and cumulative effect of of change in accounting (3,883,000) 3,876,000 (7,000) Provision for (benefit from) income taxes (1,500,000) 1,497,000 (3,000) ----------- ----------- ----------- Income (loss) before cumulative effect of change in accounting (2,383,000) 2,379,000 (4,000) Cumulative effect of change in accounting for income taxes 440,000 - 440,000 ----------- ----------- ----------- NET INCOME (LOSS) $(1,943,000) $ 2,379,000 $ 436,000 ----------- ----------- ----------- ----------- ----------- ----------- PER SHARE: Income (loss) before cumulative effect of change in accounting $(1.62) $ 1.62 $ - Cumulative effect of change in accounting for income taxes 0.30 - 0.30 ------ ------ ----- Net income (loss) per share $(1.32) $ 1.62 $ 0.30 ------ ------ ----- ------ ------ -----
(a) Adjustments from the sale of real estate assets. - 6 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Statement of Operations Year Ended November 30, 1993
Pro Forma Adjustments Historical (a) Pro Forma ----------- ----------- ----------- REVENUES: Rental revenues from real estate $ 6,678,000 $(5,883,000) $ 795,000 Sales of real estate 102,000 - 102,000 Other, including interest 362,000 (91,000) 271,000 ----------- ----------- ----------- 7,142,000 (5,974,000) 1,168,000 ----------- ----------- ----------- EXPENSES: Operating expenses of real estate 2,421,000 (2,001,000) 420,000 Depreciation of real estate 1,688,000 (1,483,000) 205,000 Costs of real estate sold 43,000 - 43,000 Provision for estimated losses on real estate 94,000 - 94,000 General and administrative 1,386,000 (108,000) 1,278,000 Interest 3,205,000 (3,021,000) 184,000 ----------- ----------- ----------- 8,837,000 (6,613,000) 2,224,000 ----------- ----------- ----------- Income (loss) before loss on sale of real estate (1,695,000) 639,000 (1,056,000) Loss on sale of real estate - (618,000) (618,000) ----------- ----------- ----------- Income (loss) before income taxes (1,695,000) 21,000 (1,674,000) Provision for (benefit from) income taxes (630,000) 8,000 (622,000) ----------- ----------- ----------- NET INCOME (LOSS) $(1,065,000) $ 13,000 $(1,052,000) ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) PER SHARE $(0.73) $ 0.01 $(0.72) ------ ------ ------ ------ ------ ------
(a) Adjustments from the sale of real estate assets. - 7 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Statement of Operations Nine Months Ended August 31, 1996
Pro Forma Adjustments Historical (a) Pro Forma ----------- ----------- ----------- REVENUES: Rental revenues from real estate $ 5,342,000 $(4,740,000) $ 602,000 Sales of real estate 86,000 - 86,000 Other, including interest 237,000 (78,000) 159,000 ----------- ----------- ----------- 5,665,000 (4,818,000) 847,000 ----------- ----------- ----------- EXPENSES: Operating expenses of real estate 1,224,000 (913,000) 311,000 Depreciation of real estate 1,026,000 (905,000) 121,000 General and administrative 987,000 (297,000) 690,000 Interest 2,319,000 (2,194,000) 125,000 ----------- ----------- ----------- 5,556,000 (4,309,000) 1,247,000 ----------- ----------- ----------- Income (loss) before gain on sale of real estate 109,000 (509,000) (400,000) Gain on sale of real estate - 3,928,000 3,928,000 ----------- ----------- ----------- Income before income taxes 109,000 3,419,000 3,528,000 Provision for income taxes 46,000 1,335,000 1,381,000 ----------- ----------- ----------- NET INCOME $ 63,000 $ 2,084,000 $ 2,147,000 ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME PER SHARE $ 0.05 $ 1.52 $ 1.57 ------ ------ ------ ------ ------ ------
(a) Adjustments from the sale of real estate assets. - 8 - PRO FORMA FINANCIAL INFORMATION MISSION WEST PROPERTIES Pro Forma Consolidated Statement of Operations Nine Months Ended August 31, 1995
Pro Forma Adjustments Historical (a) Pro Forma ----------- ----------- ----------- REVENUES: Rental revenues from real estate $ 5,320,000 $(4,675,000) $ 645,000 Sales of real estate 125,000 - 125,000 Other, including interest 282,000 (58,000) 224,000 ----------- ----------- ----------- 5,727,000 (4,733,000) 994,000 ----------- ----------- ----------- EXPENSES: Operating expenses of real estate 1,448,000 (1,112,000) 336,000 Depreciation of real estate 1,011,000 (891,000) 120,000 General and administrative 701,000 (60,000) 641,000 Interest 2,663,000 (2,528,000) 135,000 ----------- ----------- ----------- 5,823,000 (4,591,000) 1,232,000 ----------- ----------- ----------- Income (loss) before gain on sale of real estate (96,000) (142,000) (238,000) Gain on sale of real estate - 3,928,000 3,928,000 ----------- ----------- ----------- Income (loss) before income taxes (96,000) 3,786,000 3,690,000 Provision for (benefit from) income taxes (40,000) 1,491,000 1,451,000 ----------- ----------- ----------- NET INCOME (LOSS) $ (56,000) $ 2,295,000 $ 2,239,000 ----------- ----------- ----------- ----------- ----------- ----------- NET INCOME (LOSS) PER SHARE $(0.04) $ 1.64 $ 1.60 ------ ------ ------ ------ ------ ------
(a) Adjustments from the sale of real estate assets. - 9 - EX-10 2 EX 10 AMEND 1 TO AGRMT OF PURCHASE EXHIBIT (10) AMENDMENT NO. 1 TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS This AMENDMENT NO. 1 TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (the "Amendment") is made as of this 8th day of January 1997 by and among SPIEKER PROPERTIES, L.P., a California limited partnership ("SP"), SPIEKER NORTHWEST, INC., a California corporation ("SPN"), MISSION WEST PROPERTIES, a California corporation ("MWP"), and MISSION WEST EXECUTIVE AIRCRAFT CENTER, INC., a California corporation ("MWEAC"), with reference to the facts set forth in the Recitals below. RECITALS A. MWEAC is a wholly-owned subsidiary of MWP. Hereafter, MWP and MWEAC may sometimes be collectively referred to as the "Seller." B. SP and Seller are parties to a certain Agreement of Purchase and Sale and Joint Escrow Instructions dated December 6, 1996 (the "Purchase Agreement"). C. SPN is an affiliate of SP. SP desires to assign to SPN SP's rights under the Purchase Agreement to purchase certain of the Assets. D. The parties desire to amend the Purchase Agreement to obtain Seller's consent to such assignment and to address other concerns of the parties, all as set forth below in this Amendment. AGREEMENT NOW, THEREFORE, in consideration of the Purchase Agreement, this Amendment and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. INTERPRETATION. Terms with initial capital letters are defined terms which shall have the meanings ascribed to them in the Purchase Agreement, unless the context of this Amendment requires otherwise. Except as amended by this Amendment, the Purchase Agreement shall remain in full force and effect. In the event of a conflict between the provisions of this Amendment and those of the Purchase Agreement, this Amendment shall control. 2. ASSIGNMENT BY SP. Pursuant to Section 14.6 of the Purchase Agreement, SP has assigned its rights under the Purchase Agreement to purchase the Arizona Corporate Center Property, the Unimproved Parcel and the Leasehold Properties to SPN. Seller hereby consents to such assignment to SPN on the express condition that SP shall remain responsible for the full performance of all obligations of SPN under the Purchase Agreement through the Close of Escrow. By signing below, SP expressly agrees to remain responsible for the full performance of all obligations of SPN under the Purchase Agreement through the Close of Escrow. By signing below, SPN agrees to be bound by the Purchase Agreement and to assume all obligations of SP to purchase the Arizona Corporate Center Property, the Unimproved Parcel and the Leasehold Properties in accordance with the terms and conditions of the Purchase Agreement, as amended by this Amendment. Hereafter, the term "Buyer" shall mean and include SP and SPN. 3. ARIZONA PROPERTY TAX APPEALS. (a) BACKGROUND. In August 1995 Seller filed appeals (the "Arizona Property Tax Appeals") with the Arizona Tax Court for the purpose of contesting increases in the assessed value of the Arizona Corporate 1 Center Property for calendar years 1995 and 1996. Pending resolution of the Arizona Property Tax Appeals, Seller has been paying the property taxes levied on the Arizona Corporate Center Property at the increased rates. The total amounts of property taxes levied and paid on the Arizona Corporate Center Property in 1995 and 1996 were $96,293 and $91,330, respectively. Any unpaid property taxes allocable to calendar year 1997 will be subject to proration, as provided elsewhere in the Purchase Agreement. (b) REFUNDS. It is agreed that Seller shall be entitled to pursue, at Seller's sole cost and expense, the Arizona Property Tax Appeals after the Closing. It is also agreed that Seller shall be entitled to be paid the full amount of any property tax refund(s) for calendar years 1995, 1996 and the portion of 1997 during which Seller owned the Arizona Corporate Center Property which may ultimately become payable, even if the refund(s) are paid after the Closing. Buyer hereby agrees to pay to Seller any such refund(s) in the event the refund(s) are inadvertently paid to Buyer. Buyer also agrees to cooperate with Seller in pursuing the Arizona Property Tax Appeals. (c) COLLECTION FROM TENANTS. (1) Notwithstanding the amount of property taxes actually paid by Seller during 1995 and 1996 with respect to the Arizona Corporate Center Property, Seller has only collected from the Tenants of the Arizona Corporate Center Property property taxes for such years in the aggregate amounts of $37,252 and approximately $42,000, respectively. (The final amount of property taxes actually collected for 1996 has not yet been finally ascertained.) The difference (the "Property Tax Delta") between the amounts ultimately determined to be owed by Seller to Arizona tax authorities and the amounts actually collected by Seller from the subject Tenants for the subject years is presently unknown. (The Property Tax Delta will become known only after Seller's refund claims are resolved.) (2) When the amount of the Property Tax Delta is finally ascertained, two outcomes are possible. Under one scenario, the Property Tax Delta could be such that the subject Tenants owe Seller money due to Seller's under collection of property taxes from the subject Tenants. Under the second scenario, the Property Tax Delta could be such that Seller owes the subject Tenants money due to Seller's collection of property taxes in excess of the amounts finally determined to be due and payable to Arizona taxing authorities. The first scenario has been assumed to be more likely and Seller has billed the subject Tenants the estimated amount of the Property Tax Delta. (3) The actual amount of the Property Tax Delta will be determined after the Closing. Once it is determined, Seller shall promptly notify Buyer of the actual Property Tax Delta. If the first scenario does in fact apply, Seller expects the Tenants of the Arizona Corporate Center Property to reimburse Seller for the amount of the Property Tax Delta and Seller shall be entitled to collect same from the subject Tenants by appropriate means -- to the extent not previously collected -- excluding, however, any right to evict delinquent Tenants or to terminate the subject Leases, at Seller's sole cost and expense. Buyer agrees to cooperate with Seller in collecting the Property Tax Delta with no cost to Buyer. (4) If the second scenario applies, Seller shall promptly pay to SPN outside of the Escrow the amount of excess property taxes collected by Seller and Buyer shall credit such amount to the Tenants entitled thereto. (5) If SPN sells the Arizona Corporate Center Property to a third party before the Arizona Property Tax Appeals are resolved and the actual amount of the Property Tax Delta is determined, Buyer shall cause the party purchasing from Buyer to assume Buyer's obligations under this Section 3. 4. BIFURCATION OF TRANSACTION. The parties have agreed to bifurcate the purchase of the Assets, as contemplated in Section 3.3 of the Purchase Agreement. Accordingly, it is agreed that Buyer shall purchase all the Assets other than the Leasehold Properties as soon as practicable after the date of this Amendment, as more fully provided in the Purchase Agreement, as amended hereby. It is also agreed that SPN shall purchase the Leasehold Properties at a later date, subject to the MWEAC Contingencies being waived or satisfied on or before the end of the MWEAC Contingency Period. The parties agree to further amend the Purchase Agreement to fix a Scheduled Closing Date for the purchase of the Leasehold Properties. SPN hereby affirms its intention to purchase the 2 Leasehold Properties, notwithstanding such bifurcation of the subject transaction. 5. CLOSING SCHEDULE. The parties have agreed that the Closing shall begin at 8:00 a.m. (Arizona time) on Wednesday, January 22, 1997, with recordation of the Grant Deeds (the "Arizona Grant Deeds") for the Arizona Corporate Center Property and the Unimproved Parcel. The parties intend that the Grant Deeds for the California Properties will be recorded at 8:00 a.m. (San Diego time) so that Escrow Holder will have sufficient time in which to remit funds due to encumbrancers of the Realty by 10:00 a.m. (San Diego time) on January 22, 1997. In order to accomplish the foregoing, it is agreed that Buyer shall deposit into the Escrow sufficient funds to cover its financial obligations under the Purchase Agreement, as amended by this Amendment, by the close of business on Tuesday, January 21, 1996. These funds shall be invested overnight at the direction of Buyer. 6. AMENDMENT OF SECTION 6.8(b). Section 6.8(b) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows: "(b) OPERATING EXPENSES. (1) Most of Leases, both the A-Leases and the B-Leases, are multi-tenant leases which are written on a net or so-called "modified gross" basis which require the Tenants thereunder to pay Seller, as landlord, estimates of Operating Expenses for their respective premises. Seller makes annual (calendar year) reconciliations of such Operating Expenses in order to reconcile (on a cash basis) the receipts of estimated Operating Expenses from the Tenants with the Operating Expenses actually paid for the relevant calendar year. The reconciliation of Operating Expenses collected for calendar year 1995 has been completed. (2) It is agreed that Seller shall be responsible for making the reconciliation of Operating Expenses for calendar year 1996, even if such reconciliation occurs after the Close of Escrow. This reconciliation will occur outside of the Escrow and Escrow Holder shall have no responsibility therefor. Seller shall use its best efforts to complete such reconciliation within sixty (60) days after the Closing. Seller anticipates that the amount of estimated Operating Expenses collected for calendar year 1996 will be less than the amount of actual Operating Expenses incurred for such year and that, therefore, certain payments may be due to Seller from certain Tenants. (3) After the such 1996 reconciliation is completed, Seller shall pay any amounts due to the Tenants directly to such Tenants. Buyer shall receive no credit against the Purchase Price for any such amounts that may be due to the Tenants. Seller hereby agrees to indemnify, defend and hold Buyer harmless from and against any claims by the Tenants with respect to sums which may be due to the Tenants as a result of excess billings of Operating Expenses. If the Operating Expenses actually paid by Seller for calendar year 1996 exceed the receipts of estimated Operating Expenses received by Seller for such year by more than One Thousand Dollars ($1,000) in the aggregate, Buyer agrees to use diligence to collect, after the Closing, any shortfall for the account of Seller in the same manner as delinquent rent. Buyer shall pay Seller any portion of such shortfall in Operating Expenses as and when Buyer collects same, so long as all other obligations of the paying Tenant to Buyer are current. If the shortfall in the collection of Operating Expenses from the Tenants is less than One Thousand Dollars ($1,000) in the aggregate, Seller shall have no right to collect the shortfall and Buyer shall be entitled to keep any portion of the shortfall which it may succeed in collecting. (4) Payments of Operating Expenses by Tenants for calendar year 1997 shall be prorated in the same manner as rent pursuant to Section 6.8(a). 3 Any prepayments by Seller of Operating Expenses for the Realty which are to be billed to the Tenants for calendar year 1997 shall be prorated in the same manner as other items subject to proration." 7. MODIFICATION OF SECTION 4.1. Section 4.1 of the Purchase Agreement is hereby amended to state that the Purchase Price for the Realty is $47,000,000, which is apportioned as follows: - Arizona Corporate Center $3,200,000 - Camino West Business Park $2,150,000 - Camino West-Carlsbad $4,500,000 - Carmel View Office Plaza $6,450,000 - Centerpark Plaza One $5,942,000 - Centerpark Plaza Two $8,450,000 - La Place Court $6,720,000 - Western Metal Lath $5,955,000 - Leasehold Properties $3,300,000 - Unimproved Parcel $ 333,000 8. ALLOCATION TO LEASEHOLD PROPERTIES. The parties have agreed that the portion of the Purchase Price allocable to the Leasehold Properties will be $3,300,000, provided that Buyer pays Seller $300,000 (the "MWEAC Advance Payment") in cash at the first Closing as an advance payment on the portion of the Purchase Price so allocable to the Leasehold Properties. The MWEAC Advance Payment shall be non-refundable when paid as additional consideration for Seller agreeing to bifurcate the transaction. Seller shall be entitled to retain the full amount of the MWEAC Advance Payment, even if Buyer does not purchase the Leasehold Properties for any reason whatsoever, including, without limitation, the non-satisfaction of the MWEAC Contingencies in whole or in part. 9. MWEAC EXTENSION PERIOD. The length of the MWEAC Extension Period specified in Section 3.3(a) of the Purchase Agreement is hereby extended to a total of one hundred twenty (120) days. [SIGNATURE PAGE FOLLOWS] 4 IN WITNESS WHEREOF, the parties hereby execute this Amendment No. 1 to Agreement of Purchase and Sale and Joint Escrow Instructions as of the date first written above. "MWP" MISSION WEST PROPERTIES, a California corporation By: /s/ ---------------------------------------- J. Gregory Kasun President and Chief Executive Officer "MWEAC" MISSION WEST EXECUTIVE AIRCRAFT CENTER, INC., a California corporation By: /s/ ---------------------------------------- J. Gregory Kasun President and Chief Executive Officer "SP" SPIEKER PROPERTIES, L.P., a California limited partnership By: SPIEKER PROPERTIES, INC. a Maryland corporation, Its General Partner By: /s/ ---------------------------------------- Richard L. Romney Senior Vice President "SPN" SPIEKER NORTHWEST, INC., a California corporation By: /s/ ---------------------------------------- Richard L. Romney Vice President 5 EX-99 3 EX 99 PRESS RELEASE EXHIBIT (99) FOR IMMEDIATE RELEASE For Further Information Contact: J. Gregory Kasun, President and CEO Katrina L. Thompson, CFO Telephone: (619) 450-3135 MISSION WEST PROPERTIES ANNOUNCES CLOSING OF REAL ESTATE SALE SAN DIEGO, CALIFORNIA, January 22, 1997 -- Mission West Properties (ASE/PSE: MSW) today announced that it had completed the sale of most of its real estate assets to Spieker Properties, L.P. (NYSE: SPK); this transaction was closed in accordance with terms of the related Purchase and Sale Agreement dated December 6, 1996, as amended. As provided under terms of the Purchase and Sale Agreement, completion of the sale of the Company's leasehold properties at Palomar-McClellan Airport was deferred until a later period, not more than 120 days subsequent to the first closing, to allow for certain contingencies to be satisfied. The Company's Directors plan to meet shortly to consider a potential cash distribution to shareholders from the proceeds of the sale transaction and to consider future opportunities and a strategic course for the Company. Mission West is 49-percent owned by Triton Group Ltd. (AMEX: TGL), a San Diego holding company. -----END PRIVACY-ENHANCED MESSAGE-----