Exhibit 10.14
PURCHASE AND SALE AGREEMENT
By and Between
LIMAR REALTY CORP. #13
("SELLER")
and
ARENA PHARMACEUTICALS, INC.
("BUYER")
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE....................................................1
2. PURCHASE PRICE.......................................................2
3. TITLE................................................................3
4. ESCROW...............................................................4
5. CLOSING..............................................................4
6. DUE DILIGENCE........................................................5
7. CONDITIONS TO CLOSING...............................................10
8. DELIVERIES INTO ESCROW..............................................11
9. PRORATIONS; CLOSING COSTS; CREDITS..................................13
10. OPERATION OF PROPERTY PENDING THE CLOSING. ........................15
11. REPRESENTATIONS AND WARRANTIES......................................16
12. INDEMNIFICATION.....................................................18
13. CASUALTY OR CONDEMNATION............................................19
14. COMMISSIONS.........................................................20
15. NOTICES.............................................................20
16. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.......................21
17. MISCELLANEOUS.......................................................23
18. DEFAULT.............................................................26
19. DEFINITIONS. ......................................................27
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("AGREEMENT") is made and entered into
as of December 1, 2000 (the "EFFECTIVE DATE") by and between Limar Realty Corp.
#13, a California corporation ("SELLER"), and Arena Pharmaceuticals, Inc., a
Delaware corporation ("BUYER").
R E C I T A L S
This Agreement is made with respect to the following facts and
circumstances:
A. Seller represents and warrants that it owns certain real
property commonly known as the Arena Pharmaceuticals Building, 6138 and ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇, which real property, together with certain
personal property is collectively referred to in this Agreement as the
"Property" and is more particularly defined below.
B. Subject to the terms and conditions herein, Seller desires to
sell and Buyer desires to purchase the Property.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer agree as follows:
1. PURCHASE AND SALE.
1.1 PROPERTY. Subject to the terms and conditions hereof,
Seller hereby agrees to sell, convey and assign to Buyer, and Buyer hereby
agrees to purchase and accept from Seller on the Closing Date (as defined below)
the following (collectively, the "PROPERTY"):
1.1.1 That certain tract or parcel of land
situated in the City of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ which is
legally described on EXHIBIT 1.1.1 attached hereto, together with any and all
rights, privileges and easements appurtenant thereto, which are owned by Seller
(collectively, the "LAND");
1.1.2 All buildings, structures, fixtures and
other improvements of every kind and description affixed to or located in, on,
over, or under the Land (excluding fixtures owned by tenants) (all of which are
collectively referred to as the "IMPROVEMENTS"); and
1.1.3 All right, title and interest of Seller in
and to all tangible personal property of any type located upon the Land or
within the Improvements and used exclusively in connection with the operation of
the Land and Improvements (collectively, the "PERSONAL PROPERTY").
1.2 REAL PROPERTY. The Land and Improvements are
collectively referred to as the "REAL PROPERTY".
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1.3 ASSIGNMENT. In addition, Seller shall convey and
assign to Buyer all of the right, title and interest of Seller, if any, in and
to (i) the lease(s) scheduled on EXHIBIT 1.3 (i) attached hereto (the
"LEASE(S)") and all lease(s) approved by Buyer subject to Section 10.3 below,
together with any and all security deposits in Seller's possession in connection
therewith; (ii) all assignable service contracts and other agreements, if any,
relating to the Real Property or Personal Property to be assumed by Buyer as
described on EXHIBIT 1.3 (ii) attached hereto (collectively the "SERVICE
CONTRACTS"); (iii) all assignable current licenses, permits, certificates of
occupancy, approvals and entitlements issued or granted in connection with the
Real Property as well as any and all assignable development rights and any other
intangible rights, interests or privileges relating to or used in connection
with the Real Property; (iv) any assignable right to use the current names of
the Real Property, logos, trademarks, tradenames and symbols and promotional
materials; and (v) all transferrable warranties, guarantees or sureties relating
to the Real Property or the Personal Property. Such assignment shall be made
pursuant to the Assignment and Assumption Agreement in the form described in
Section 8.1.3 below ("ASSIGNMENT"). All of the above interests as described in
clauses (iii), (iv) and (v) of this Section 1.3 shall sometimes be referred to
collectively as the "INTANGIBLE PROPERTY".
1.4 EXCLUDED PROPERTY. Notwithstanding anything to the
contrary set forth herein, the Property being conveyed pursuant to this
Agreement does not include (and Seller expressly reserves all rights with
respect thereto) any existing claims or causes of action with respect to the
Property to the extent attributable to the period prior to the Closing Date
including, without limitation, any tax rebates attributable to the period prior
to the Closing and claims against existing tenants with respect to matters
accruing prior to the Closing Date or previous tenants. The provisions of this
Section 1.4 shall not be construed, however, to restrict the ability of Buyer
following the Closing Date to deal with any existing tenants of the Real
Property or to restrict the Buyer following the Closing Date from pursuing any
and all remedies in connection with existing hazardous materials on, in or about
the Real Property.
2. PURCHASE PRICE. Buyer shall pay as the total purchase price
for the Property ("PURCHASE PRICE") the sum of Five Million Four Hundred
Thousand Dollars ($5,400,000). The Purchase Price shall be paid as follows:
2.1 DEPOSIT. On or before one (1) business day following
the Effective Date, Buyer shall cause One Hundred Thousand Dollars ($100,000)
(the "DEPOSIT #1") in immediately available funds to be delivered into Escrow
(as defined below). On or before one (1) business day following the Due
Diligence Date (as defined below) provided that Buyer has given the Approval
Notice (as defined below), Buyer shall cause an additional One Hundred Thousand
Dollars ($100,000) (the "DEPOSIT #2") in immediately available funds to be
delivered into Escrow. The "DEPOSIT" shall refer to the sum of the Deposit #1
and Deposit #2 as each of said amounts are received by Escrow. The failure of
Buyer to timely deliver any of the respective Deposits shall be a material
default, and shall entitle Seller, at Seller's sole option, to terminate this
Agreement immediately by giving written notice of such termination to Buyer and
the Title Company (as defined below);
2.2 INTEREST ON DEPOSIT. The Deposit shall be held by the
Title Company as an ▇▇▇▇▇▇▇ money deposit towards the Purchase Price. The
Deposit shall be held in Escrow in accordance with the provisions of this
Agreement in a federally insured interest bearing account or other investment
suitable for daily investment reasonably acceptable to Seller and Buyer (and in
any
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event with any risk of loss for the account of Buyer) with any interest accruing
thereon to be paid or credited, except as otherwise provided in this Agreement,
to Buyer. The term "Deposit" shall include any and all interest then accrued;
2.3 DISPOSITION OF DEPOSIT. At the Closing (as defined
below) the Deposit shall be applied and credited toward the payment of the
Purchase Price. If Escrow does not close, and this Agreement is terminated in a
manner governed by Sections 7.3 or 13, the Deposit will be disbursed to Buyer as
provided in such Sections. If the Escrow does not close and neither Section 7.3
nor Section 13 applies, the Deposit shall be returned to Buyer unless the
provisions of Section 18.1 are applicable, in which case the disposition of the
Deposit shall be governed by the provisions of Section 18.1; and
2.4 CASH BALANCE. On or before the Closing, Buyer shall
deliver into Escrow in immediately available funds the balance of the Purchase
Price. The Purchase Price, net of any prorations and closing costs to be paid by
Seller as provided in this Agreement, shall be paid by the Title Company to
Seller on the Closing Date by federal wire transfer of immediately available
funds to a bank account(s) designated by Seller in a written notice to the Title
Company given prior to the Closing.
3. TITLE.
3.1 VESTING OF TITLE. At Closing, Seller shall convey fee
simple title to the Real Property to Buyer by execution and delivery of the Deed
(as defined below). Issuance by the Title Company (or an unconditional
commitment to issue) as of the Closing of the Buyer's Title Policy (as defined
below) shall constitute evidence of delivery of title by Seller.
3.2 BUYER'S TITLE INSURANCE. At Closing, the Title
Company shall issue to Buyer a CLTA standard coverage owner's form of title
insurance policy in the amount of the Purchase Price insuring that fee simple
title to the Real Property is vested in Buyer subject only to the Permitted
Exceptions (as defined below) ("BUYER'S TITLE POLICY"). Buyer shall be entitled
to request that the Title Company provide an ALTA title insurance policy and/or
such endorsements to the Buyer's Title Policy as Buyer may reasonably require,
provided that such ALTA policy and/or endorsements shall be at no cost or
additional liability to Seller and the Closing shall not be delayed as a result
of Buyer's request.
3.3 PERMITTED EXCEPTIONS. As a condition precedent of
Buyer's obligations as provided in Section 7.2.4 but not as a covenant of
Seller, Seller shall convey the Property and Buyer shall accept the Property
subject to the following matters, which are collectively referred to as the
"PERMITTED EXCEPTIONS":
3.3.1 all exceptions to title shown in the Title
Report (as defined below) as it may be amended and on the Survey (as defined
below) that are approved or deemed approved by Buyer as provided in Section 6.3
hereof;
3.3.2 the lien of non-delinquent real and personal
property taxes and assessments;
3.3.3 the rights of the tenant(s) under the
Lease(s);
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3.3.4 the Service Contracts, if any, to be assumed
by Buyer;
3.3.5 local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building and zoning
laws, ordinances and regulations, now existing or hereafter in effect with
respect to the Real Property;
3.3.6 matters affecting the condition of title
created by or with the written consent of Buyer;
3.3.7 water rights, and claims of title to water,
whether or not shown by the public records;
3.3.8 unless Buyer elects to obtain an ALTA policy
of title insurance, discrepancies, conflicts in boundary lines, shortages in
area, encroachments, and any state of facts which inspection of the Real
Property would disclose and which are not shown by the public records; and
3.3.9 standard printed exclusions generally
included in a CLTA owner's policy (or ALTA owner's policy, as the case may be).
4. ESCROW.
4.1 OPENING OF ESCROW. Seller shall deliver a copy of a
fully executed counterpart of this Agreement into escrow ("ESCROW") to be
established at Chicago Title Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇ ("TITLE COMPANY") on or
before three (3) days following the Effective Date.
4.2 INSTRUCTIONS TO TITLE COMPANY. Seller and Buyer shall
each be entitled to submit escrow instructions to the Title Company in
connection with the Closing of the Escrow. Seller and Buyer shall in addition
execute such further escrow instructions as the Title Company may reasonably
require in connection with the Closing so long as such instructions are
consistent with the provisions of this Agreement and the escrow instructions of
Seller and Buyer. In the event of any conflict between the terms and conditions
of this Agreement and the provisions of any escrow instructions prepared by
Seller, Buyer or the Title Company, the terms and conditions of this Agreement
shall control.
5. CLOSING.
5.1 CLOSING. The purchase and sale of the Property as
contemplated by this Agreement, including but not limited to the recordation of
the Deed and the completion of the other matters required by this Agreement to
be done contemporaneously (the "CLOSING") shall occur on a date selected by
Seller (with written notice to Buyer no less than three (3) business days prior
to the selected date), but shall occur no sooner than Monday, December 11, 2000
and no later than Wednesday, January 3, 2001. The date on which the Closing
actually occurs shall be referred to as the "CLOSING DATE".
5.2 FAILURE TO CLOSE. If the Closing does not occur on or
before the date set forth in Section 5.1 above (as such date may be extended
pursuant to the express provisions of this Agreement), then in the absence of a
written agreement between the parties to extend the Closing
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Date, either party hereto (so long as such party is not then in default pursuant
to this Agreement), without waiving any rights it may otherwise have pursuant to
the Agreement, may elect to terminate this Agreement by giving written notice of
such termination to the other and to the Title Company.
6. DUE DILIGENCE.
6.1 DUE DILIGENCE PERIOD. The period commencing as of the
Effective Date and continuing through 5:00 p.m. PST, Friday, December 8, 2000
(the "DUE DILIGENCE DATE") shall be referred to as the "DUE DILIGENCE PERIOD".
6.2 AVAILABLE INFORMATION. Seller shall make available to
Buyer the following documents and materials (collectively, the "DUE DILIGENCE
MATERIALS").
6.2.1 DELIVERED MATERIALS. Within two (2) days
following the Effective Date, Seller will deliver or cause to be delivered to
Buyer copies of all of the documents and materials relating to the Property
listed on EXHIBIT 6.2.1 attached hereto provided that the same is not
confidential or proprietary in nature. Seller has not undertaken any independent
investigation as to the truth or accuracy of the documents and materials to be
delivered and is providing same solely as an accommodation to Buyer.
6.2.2 PROPERTY FILES. Seller shall make available
to Buyer and Buyer's agents and representatives, upon reasonable notice and
during normal business hours, all files in the possession of Seller, or in
possession of Seller's property manager, if any, relating to the ownership,
operation, construction, use or occupancy of the Property, or any portion of the
Property. Buyer, at its expense, may make photocopies of such material relative
to the Property as Buyer may determine.
6.2.3 RESTRICTED INFORMATION. Notwithstanding any
provision to the contrary, "Due Diligence Materials" shall not include, and
Seller shall have no obligation to furnish or otherwise make available to Buyer,
any of the following documents: (i) any internally or externally prepared
reports or analysis concerning the valuation or economic performance of the
Property; (ii) any information received from or concerning any other potential
purchaser of the Property; (iii) any federal or state income tax returns; (iv)
any documents, instruments or agreements evidencing, securing or relating to any
mortgage loan currently encumbering the Real Property; (v) any correspondence or
analyses regarding past, pending or proposed real property tax appeals; or (vi)
any information or documentation that is privileged or otherwise legally
protected from disclosure under applicable law.
6.2.4 CONFIDENTIALITY. Buyer and its
representatives shall hold in strictest confidence all data and information
obtained with respect to Seller or the Property whether obtained before or after
the execution and delivery of this Agreement, and shall not disclose the same to
others; provided, however, that it is understood and agreed that Buyer may
disclose such data and information to the employees, lenders, consultants,
accountants and attorneys of Buyer provided that such persons agree to treat
such data and information confidentially. In the event this Agreement is
terminated or Buyer fails to perform hereunder, Buyer shall promptly return to
Seller any statements, documents, schedules, exhibits and other written
information obtained from Seller in connection with this Agreement or the
transaction contemplated herein. It is understood and agreed that, with respect
to any provision of this Agreement which refers to the termination of this
Agreement and the
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return of the Deposit to Buyer, Twenty-Five Thousand Dollars ($25,000.00) of the
Deposit shall not be returned to Buyer unless and until Buyer has fulfilled its
obligation to return to Seller the materials described in the preceding sentence
and the Buyer's Reports in accordance with Section 6.5. The provisions of this
Section 6.2.4 shall survive Closing or any termination of this Agreement.
6.3 TITLE REVIEW. The period commencing as of the
Effective Date and continuing through the date which is ten (10) days following
the Effective Date shall be referred to as the "TITLE REVIEW PERIOD".
6.3.1 TITLE MATERIAL. Promptly following the
Effective Date, Seller will obtain and deliver to Buyer a current preliminary
title report ("TITLE REPORT") for the Real Property prepared by the Title
Company, together with a copy of the documents listed as exceptions therein.
Buyer, at its election, may obtain a survey ("SURVEY") of the Real Property
prepared by a licensed engineer which Survey shall be sufficient to provide the
basis for an ALTA owner's policy of title insurance. The Survey shall be
obtained by Buyer, if at all, prior to the expiration of the Title Review Period
and, if obtained, Buyer shall promptly deliver a copy of the Survey to Seller
and the Title Company. It is acknowledged that Buyer will not be entitled to
obtain an ALTA title insurance policy with respect to the Real Property if Buyer
elects not to timely obtain a Survey with respect to such Real Property.
6.3.2 REVIEW OF TITLE. Buyer shall notify Seller
in writing (the "TITLE NOTICE") prior to the expiration of the Title Review
Period which exceptions to title as shown on the Title Report and Survey, if
any, will not be accepted by Buyer. If Buyer fails to notify Seller in writing
of its disapproval of any exceptions to title by the expiration of the Title
Review Period, Buyer shall be deemed to have approved the condition of title to
the Real Property. If Buyer notifies Seller in writing that Buyer objects to any
exceptions to title, Seller shall have one (1) business day after receipt of the
Title Notice to notify Buyer (a) that Seller will remove such objectionable
exceptions from title on or before the Closing, provided that Seller may extend
the Closing for such period as shall be required to effect such cure, but not
beyond ten (10) days; or (b) that Seller elects not to cause such exceptions to
be removed. If Seller fails to timely give such notice to Buyer, the Seller
shall be deemed to have given notice to Buyer under clause (b). Seller shall
have no obligation to remove any title exceptions to which Buyer objects
provided, however, that Seller shall remove, as of the Closing, all liens
evidencing any deed of trust (and related documents) securing financing. The
procurement by Seller of a commitment for the issuance of the Buyer's Title
Policy (as defined in Section 3.2 hereof) or an endorsement thereto insuring
Buyer against any title exception which was disapproved pursuant to this Section
6.3.2 shall be deemed a cure by Seller of such disapproval. If Seller gives or
is deemed to have given Buyer notice under clause (b) above, Buyer shall have
one (1) business day from the date on which such notice to Buyer is given in
which to notify Seller that Buyer will nevertheless proceed with the purchase
and take title to the Property subject to such exceptions, or that Buyer will
terminate this Agreement. If Buyer fails to timely give such notice, Buyer will
be deemed to have elected to proceed with the purchase and take title to the
Property subject to such exceptions. If this Agreement is terminated pursuant to
the foregoing provisions of this Section 6.3.2, then neither party shall have
any further rights or obligations hereunder (except with respect to those
matters expressly stated to survive such termination), the Deposit shall be
returned to Buyer and each party shall bear its own costs incurred hereunder.
6.3.3 SUBSEQUENT TITLE DEFECTS. Buyer may, at or
prior to Closing, notify Seller in writing (the "SUBSEQUENT TITLE DEFECTS
NOTICE") of any objection(s) to title exceptions (a)
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raised by the Title Company between the expiration of the Title Review Period
and the Closing and (b) not disclosed by the Title Company or the Survey or
otherwise known to Buyer prior to the expiration of the Title Review Period,
provided that Buyer must notify Seller of such objection(s) to title within two
(2) business days of being made aware of the existence of such exception. If
Buyer gives a Subsequent Title Defects Notice to Seller, Seller shall have two
(2) business days after receipt of the Subsequent Title Defects Notice to notify
Buyer (a) that Seller will remove such objectionable exceptions from title on or
before the Closing, provided that Seller may extend the Closing for such period
as shall be required to effect such cure, but not beyond ten (10) days; or (b)
that Seller elects not to cause such exceptions to be removed. If Seller fails
to timely give such notice to Buyer, Seller shall have been deemed to have given
notice to Buyer under clause (b). Seller shall have no obligation to remove any
title exceptions to which Buyer objects, provided however, that Seller shall
remove, as of the Closing, all liens evidencing any deed of trust (and related
documents) securing financing. The procurement by Seller of a commitment of the
Title Company for Buyer's Title Policy or an endorsement thereto insuring Buyer
against any title exception which was disapproved pursuant to this Section 6.3.3
shall be deemed a cure by Seller of such disapproval. If Seller gives or is
deemed to have given notice under clause (b) above, Buyer shall have two (2)
business days from the date on which such notice to Buyer is given in which to
notify Seller that Buyer will nevertheless proceed with the purchase and take
title to the Property subject to such exceptions or that Buyer will terminate
this Agreement. If Buyer fails to timely give such notice, Buyer shall be deemed
to have elected to proceed with the purchase and take title to the Property
subject to such exceptions. If this Agreement is terminated pursuant to the
foregoing provisions of this Section 6.3.3 then neither party shall have any
further rights or obligations hereunder (except with respect to those matters
expressly set forth to survive such termination), the Deposit shall be returned
to Buyer and each party shall bear its own costs incurred hereunder.
6.4 INSPECTION; RIGHT OF ENTRY. Buyer and Buyer's agents,
contractors, engineers, consultants, employees and other representatives
(collectively, "BUYER'S REPRESENTATIVES") shall have the right, during the Due
Diligence Period and subject to the terms and conditions of Section 6.6 below,
(i) to enter the Real Property to inspect the same (including the performance of
environmental audits of the Real Property in accordance with the terms of
Section 6.4.1 and 6.4.2 below), upon reasonable notice to Seller, provided that
Buyer does not unreasonably disturb any business of Seller in connection with
the Property or any tenant of the Real Property and provided that Seller shall
be afforded the opportunity to participate in such visitations and (ii) to
contact representatives of third parties who have executed Service Contracts
with Seller or Seller's representatives regarding the Real Property. Buyer shall
keep the Property free and clear of any mechanics' liens, materialmen's liens or
claims arising out of any of Buyer's activities or those of Buyer's
Representatives on or with respect to the Real Property. All entries onto the
Real Property by Buyer and all inspections and examinations thereof shall be at
Buyer's sole cost and expense, shall be done in a workmanlike manner in
accordance with all applicable codes, statutes, ordinances, rules, regulations
and laws and shall not disturb in any way the quiet occupancy or enjoyment of
any tenant or other occupant of the Real Property. Buyer shall not perform any
test or inspection or carry out any activity at the Real Property which damages
the Real Property in any way or which is physically intrusive into the
Improvements or soil of the Real Property without the prior written consent of
Seller, which Seller may withhold in its sole and absolute discretion. After
each entry onto any portion of the Real Property, Buyer, at its sole cost and
expense shall repair (which shall include replacement where necessary) any
damage to the Real Property arising from such entry. In connection with any
inspections of the Real Property, Buyer and Buyer's Representatives will carry
liability insurance adequate in Seller's reasonable judgement and, upon the
request of Seller, will
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provide Seller with written evidence of same. Buyer will give Seller reasonable
prior notice of its intention to conduct any inspections or tests with respect
to the Real Property and Seller reserves the right to have a representative
present.
6.4.1 PHASE I ENVIRONMENTAL AUDIT. During the Due
Diligence Period, Buyer may conduct (or have conducted on its behalf by an
environmental auditor) a Phase I environmental audit of the Real Property,
subject to the terms and conditions of Sections 6.4.2 and 6.6 below.
6.4.2 ENVIRONMENTAL CONDITIONS. In the event that
Buyer shall enter the Real Property for purposes of conducting a Phase I
environmental audit of the Real Property, Buyer shall provide Seller with at
least forty-eight (48) hours' prior written notice of its intent thereof. Buyer
shall not conduct a Phase II environmental audit of the Real Property without
the prior written consent of Seller which consent may be withheld or granted in
the sole and absolute discretion of Seller. Buyer shall not disclose to any
third party, other than Buyer's consultants, agents and attorneys associated
with any environmental investigation of the Real Property and other than as may
be required by applicable law, the results of any of Buyer's inspections or
testing of the Real Property. Prior to performing any environmental inspections
or testing of the Real Property, Buyer shall obtain any required permits and
authorizations and shall pay all applicable fees required by any public body or
agency in connection therewith.
6.5 BUYER'S REPORTS. If the Escrow fails to close for any
reason other than Seller's material breach of this Agreement, then all studies,
surveys (including, without limitation the Survey), if any, reports, test
results and analyses concerning the Real Property prepared by, for or on behalf
of Buyer in connection with the Real Property (collectively, "BUYER'S REPORTS")
shall at the option of Seller, immediately be delivered and assigned to Seller
free and clear of all claims and at no cost, expense or liability to Seller.
Buyer shall not be required to deliver to Seller internally prepared reports or
analyses concerning the valuation or potential performance of the Real Property.
Any Buyer's Reports delivered to Seller at Seller's request pursuant to this
Section 6.5 shall be delivered without representation or warranty, nor shall
Seller assert any warranty or rights against the consultants of Buyer who have
prepared such Buyer's Reports.
6.6 INDEMNITY. Buyer shall indemnify, defend by counsel
reasonably acceptable to Seller, and hold Seller harmless from and against any
and all costs, expenses, claims, demands or liens, (including, without
limitation, mechanics' liens) including reasonable attorneys' fees, arising from
or in any fashion related to the entry by Buyer or Buyer's Representatives on
the Real Property or the performance by Buyer or Buyer's Representatives of any
testing or investigations of the Real Property except with respect to any loss
or liability incurred by Seller resulting from the mere discovery by Buyer or
Buyer's Representatives of the presence of hazardous materials at the Property
or the existence of other defects with respect to the Property. Without limiting
the scope or generality of the foregoing indemnity, Buyer shall not permit any
mechanics', materialman's, or other lien against all or any part of the Real
Property to exist as the result of any activity by Buyer or Buyer's
Representatives undertaken in connection with the Real Property. If any such
lien shall be filed against the Real Property or any portion of the Real
Property, Buyer shall cause the lien to be discharged within five (5) business
days after the filing thereof. The provisions of this Section 6.6 shall survive
the Closing and delivery of the Deed and shall further survive any earlier
termination of this Agreement.
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6.7 APPROVAL BY BUYER. Buyer shall have the right to
review and approve, in its sole, absolute and subjective discretion, during the
Due Diligence Period all aspects of the Property, including but not limited to,
(i) the Due Diligence Materials, (ii) the physical and environmental condition
of the Real Property, including, without limitation, the condition of the
Improvements, the condition of the soil at the Real Property, the condition of
the ground water at the Real Property, and the presence or absence of any
hazardous materials at the Real Property, (iii) the financial condition of the
Property, including, without limitation, the feasibility, convertibility,
desirability and suitability of the Property for Buyer's intended use and
purposes, (iv) the legal condition of the Property, including, without
limitation, the Property's compliance or non-compliance with all statutes,
ordinances, codes, regulations, decrees, orders and laws applicable to the
Property, (v) the Lease(s), (vi) the Service Contracts, if any, being assumed by
Buyer, (vii) the existence or non-existence of any governmental or
quasi-governmental entitlements, if any, affecting the Property or any portion
of the Property, (viii) any dimensions or specifications of the Real Property or
any part thereof, (ix) the zoning, building and land use restrictions applicable
to the Real Property or any portion thereof, and (x) all other matters which
Buyer deems relevant to its purchase of the Property. It is acknowledged that
Buyer is the tenant of the Property and by reason of such existing relationship,
is generally familiar with matters relating to the Property. In the event that
Buyer elects to approve all of the matters as summarized in this Section 6.7
with respect to the Property, Buyer shall give written notice of such approval
to Seller ("APPROVAL NOTICE") on or before the Due Diligence Date. The Approval
Notice, if given by Buyer must be in the form of EXHIBIT 6.7 attached hereto. If
Buyer fails to timely give the Approval Notice to Seller, Buyer shall
conclusively be deemed to have disapproved the Property and more particularly
the matters set forth in this Section 6.7 in which case this Agreement shall
terminate, all rights and obligations hereunder of each party shall be at an end
(except those matters which are specifically stated in this Agreement to survive
the termination), the Deposit shall be promptly returned to Buyer and each party
shall bear its own costs incurred hereunder. If Buyer timely gives the Approval
Notice to Seller, then Buyer shall be considered to have elected to proceed with
the purchase of the Property in accordance with the provisions of this
Agreement, Buyer shall have no further rights with respect to this Section 6.7,
the condition for the benefit of Buyer as set forth in Section 7.2.5 shall be
considered to have been satisfied and Buyer shall have no further rights to
assert the conditions set forth in such Sections.
9
7. CONDITIONS TO CLOSING.
7.1 SELLER'S CONDITIONS. The obligation of Seller to sell
and convey the Property pursuant to this Agreement is subject to the
satisfaction on or before the Closing Date (or such earlier date as is
specifically set forth in this Agreement) of all of the following conditions
precedent, which conditions are for the benefit of Seller only and the
satisfaction of which may be waived only in writing by Seller:
7.1.1 BUYER'S DELIVERIES. Delivery and execution
by Buyer of all monies, items and instruments required to be delivered by Buyer
pursuant to this Agreement;
7.1.2 BUYER'S REPRESENTATIONS. Buyer's warranties
and representations set forth herein shall be true and correct in all material
respects as of the Closing Date;
7.1.3 BUYER'S PERFORMANCE. Buyer shall have
performed each and every agreement to be performed by Buyer pursuant to this
Agreement; and
7.1.4 APPROVAL NOTICE. Buyer shall have timely
given the Approval Notice to Seller in accordance with the provisions of Section
6.7.
7.2 BUYER'S CONDITIONS. The obligation of Buyer to
acquire the Property pursuant to this Agreement is subject to the satisfaction
on or before the Closing Date (or such earlier date as is specifically set forth
in this Agreement) of all of the following conditions precedent which conditions
are for the benefit of Buyer only and the satisfaction of which may be waived
only in writing by Buyer:
7.2.1 SELLER'S DELIVERIES. Delivery and execution
by Seller of all instruments and other items required to be delivered by Seller
pursuant to this Agreement;
7.2.2 SELLER'S REPRESENTATIONS. Seller's
warranties and representations set forth herein shall be true and correct in all
material respects as of the Closing Date;
7.2.3 SELLER'S PERFORMANCE. Seller shall have
performed each and every agreement to be performed by Seller pursuant to this
Agreement;
7.2.4 BUYER'S TITLE POLICY. As of the Closing, the
Title Company shall have issued or shall have committed to issue, upon the sole
condition of the payment of its regularly scheduled premium, the Buyer's Title
Policy; and
7.2.5 BUYER'S APPROVAL. On or before the Due
Diligence Date, Buyer shall have given the Approval Notice to Seller in
accordance with the provisions of Section 6.7.
7.3 FAILURE OF CONDITIONS. If any of the conditions set
forth in Sections 7.1 or 7.2 are not timely satisfied or waived, for any reason
other that the default of Buyer or Seller under this Agreement, then this
Agreement and the rights and obligations of Buyer and Seller shall terminate and
be of no further force or effect except as to those matters as specifically
stated in this Agreement to survive termination, in which case the Title Company
is hereby instructed to return promptly to
10
the party which placed such items into Escrow all funds (including the
Deposit which is to be promptly returned to Buyer) and documents which are
held by the Title Company on the date of termination.
7.4 SATISFACTION OF CONDITIONS. The occurrence of the
Closing shall constitute satisfaction of conditions set forth in Sections 7.1
and 7.2 not otherwise specifically satisfied or waived by Buyer or Seller.
8. DELIVERIES INTO ESCROW.
8.1 DELIVERIES BY SELLER. On or before the Closing,
Seller shall deliver or cause to be delivered into Escrow the following
documents duly executed and acknowledged where appropriate:
8.1.1 DEED. A grant deed (the "DEED") in the form
attached hereto as EXHIBIT 8.1.1 conveying the Real Property to Buyer as
provided in this Agreement which Deed is to be duly executed and acknowledged by
Seller;
8.1.2 ▇▇▇▇ OF SALE. ▇▇▇▇ of sale ("▇▇▇▇ OF SALE")
in the form attached hereto as EXHIBIT 8.1.2 conveying the Personal Property to
Buyer which ▇▇▇▇ of Sale is to be duly executed by Seller;
8.1.3 ASSIGNMENT. An Assignment in the form
attached hereto as EXHIBIT 8.1.3 which is to be duly executed by Seller and
Buyer;
8.1.4 FIRPTA. A certificate of non-foreign status
to confirm that Buyer is not required to withhold part of the Purchase Price
pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended which
is to be duly executed by Seller;
8.1.5 FORM 590. Franchise Tax Board Form (590)
which is to be duly executed by Seller;
8.1.6 SELLER'S AUTHORITY. Such proof of Seller's
authority and authorization to enter into this Agreement and consummate the
transaction contemplated hereby and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be reasonably
required by Title Company; and
8.1.7 OTHER DOCUMENTS. Such other documents as may
be reasonably necessary and appropriate to complete the Closing of the
transaction contemplated herein.
8.2 DELIVERIES BY BUYER. On or before the Closing, Buyer
shall deliver or cause to be delivered into Escrow the following funds (in cash)
and documents duly executed and acknowledged where appropriate:
8.2.1 CASH. The Purchase Price and such additional
sums as are necessary to pay the Buyer's share of closing costs, prorations and
any fees as more particularly set forth in Section 9 below;
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8.2.2 ASSIGNMENT. An Assignment which is to be
duly executed by Seller and Buyer;
8.2.3 BUYER'S AFFIDAVIT. Buyer's Affidavit in the
form attached hereto as EXHIBIT 8.2.3 which is to be duly executed by Buyer;
8.2.4 BUYER'S AUTHORITY. Such proof of Buyer's
authority and authorization to enter into this Agreement and consummate the
transaction contemplated by this Agreement, and such proof of the power and
authority of the individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of Buyer to act for and bind Buyer as may be
reasonably required by Title Company or Seller; and
8.2.5 OTHER DOCUMENTS. Such other documents as may
be reasonably necessary and appropriate to complete the Closing of the
transaction contemplated herein.
8.3 DELIVERY TO BUYER UPON CLOSING. Seller shall deliver
possession of the Property to Buyer upon the Closing subject to the rights of
possession of the tenants pursuant to the Leases.
8.4 DELIVERY FOLLOWING CLOSING. Promptly following the
Closing, Seller shall deliver to Buyer: (i) the original of the Lease(s); (ii)
the originals of the Service Contracts, if any; (iii) all building plans and
specifications with respect to the Real Property which are in the possession of
Seller or reasonably accessible to Seller or its property manager; (iv) all
structural reviews, architectural drawings, engineering, soils, seismic,
geologic and architectural reports in the possession of Seller or reasonably
accessible to Seller or its property manager; and (v) such other matters and
documents in the possession of Seller or reasonably accessible to Seller or to
its property manager as Buyer may reasonably request which relate to the
Property and are not confidential and/or proprietary.
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9. PRORATIONS; CLOSING COSTS; CREDITS.
9.1 PRORATIONS.
9.1.1 RENT. Rents, revenues and other income from
the Property, actually collected as of the Closing, shall be prorated through
Escrow as of 12:01 a.m. on the Closing Date with Seller entitled to the prorated
portion of such items attributable to the period prior to such date and time and
Buyer entitled to the prorated portion of such items following such date and
time. Any prepaid rent paid by a tenant of the Property shall be credited to
Buyer. If any rent or other payments under the Lease(s) are in arrears as of the
Closing Date, Buyer shall use reasonable efforts following the Closing to
collect such rent or other payments provided that in no event shall Buyer be
obligated to commence litigation to effect collection. Nothing in this Section
9.1.1 shall restrict Seller's right to collect delinquent rents directly from a
tenant by any legal means. Notwithstanding any provision of this Agreement to
the contrary in the event that the lease with Buyer terminates by merger as of
the Closing, in no event shall such termination limit Seller's right to collect
delinquent rent, if any, or to otherwise enforce the provisions of the lease
described on Exhibit 1.3(i). Delinquent rent collected by Seller subsequent to
the Closing shall be promptly paid to Buyer to the extent that Buyer is entitled
to such rent in connection with the period on and after the Closing Date, and
delinquent rent collected by Buyer subsequent to the Closing shall be promptly
paid to Seller to the extent that Seller is entitled to such rent pursuant to
the provisions of this Agreement relating to the period prior to the Closing
Date. Seller and Buyer agree that all rent received by Seller or Buyer following
Closing shall be applied first to any current rent then due Seller, if any, and
then to delinquent rent, if any, due Buyer.
9.1.2 TAXES AND ASSESSMENTS. Except to the extent
that real estate taxes are paid directly by the tenant(s), all nondelinquent
real estate taxes on the Property shall be prorated through Escrow based on the
actual current tax ▇▇▇▇ as of 12:01 a.m. on the Closing Date with Seller
responsible for all such taxes attributable to the period prior to such date and
time and Buyer responsible for all such taxes attributable to the period
following such date and time. If after the Closing, supplemental real estate
taxes are assessed against the Property by reason of any event occurring prior
to the Closing Date, Buyer and Seller shall adjust the proration of the real
estate taxes following the Closing. Any delinquent taxes on the Property shall
be paid at the Closing from funds accruing to Seller. Any current installments
with respect to assessments on the Real Property shall be prorated through
Escrow as of 12:01 a.m. on the Closing Date and Seller shall have no obligation
to pay any amount with respect to any such assessments other than the prorated
current installment. Any refund in connection with real estate taxes relating to
the Property attributable to the period prior to the Closing Date shall be paid
to Seller.
9.1.3 OPERATING EXPENSES. Operating expenses
payable by the owner of the Real Property and all other customary charges or
costs incident to the ownership of the Property (not otherwise payable directly
by the tenants) shall be prorated through Escrow as of 12:01 a.m. on the Closing
Date. Seller shall be responsible for all operating expenses accruing and
attributable to the Property through the day prior to the Closing Date and Buyer
shall be responsible for all operating expenses accruing and attributable to the
Property commencing as of the Closing Date. Seller, as landlord under the
Lease(s), may be currently collecting from tenants under the Lease(s) additional
rent to cover taxes, insurance, utilities (to the extent not paid directly by
tenants), common area maintenance and other operating costs and expenses
(collectively, "OPERATING COSTS") in connection
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with the ownership, operation, maintenance and management of the Property.
Seller and Buyer shall each receive a debit or credit, as the case may be, for
the difference between the aggregate tenants' current account balances for
Operating Costs and the amount of Operating Costs reimbursable to Seller.
Operating Costs for Seller's period of ownership shall be reasonably estimated
by the parties if final bills are not available. Seller shall not assign to
Buyer any deposits which Seller has with any utility companies servicing the
Property. Buyer shall arrange with such companies to have accounts open in
Buyer's name beginning at 12:01 a.m. on the Closing Date. To the extent
possible, Seller and Buyer shall obtain ▇▇▇▇▇▇▇▇ and meter readings as of the
Closing Date and all operating expenses shall be prorated based upon the
information then available. Seller and Buyer shall make any adjustments required
to be made subsequent to the Closing in the event the information available at
the Closing is incorrect.
9.1.4 SERVICE CONTRACTS. The amounts payable under
the Service Contracts which shall be assumed pursuant to the provisions of the
Assignment, shall be prorated through Escrow on an accrual basis as of 12:01
a.m. on the Closing Date. Seller shall pay all amounts due thereunder which
accrue prior to the Closing Date and Buyer shall pay all amounts accruing on the
Closing Date and thereafter. Buyer shall have no responsibility for Service
Contracts not specifically being assumed by Buyer pursuant to this Agreement.
Those Service Contracts which Buyer elects during the Due Diligence Period not
to assume by giving written notice of such election to Seller shall be
terminated by Seller as of the Closing, provided, however that with respect to
those Service Contracts which require a termination notice longer than that
allowed by reason of the date of the Closing (which in all events shall be no
greater than thirty (30) days notice) provided that Seller has given notice of
termination on or prior to the Closing Date, Buyer shall be responsible for the
obligations that relate to such terminated Service Contracts for the period from
and after the Closing Date and Seller shall be responsible for the obligations
that relate to the period prior to the Closing Date. Buyer shall have no
responsibility for Service Contracts which Buyer has elected not to assume for
any period in excess of thirty (30) days following the Closing Date. Seller
shall not be obligated to terminate the Service Contracts which Buyer has
elected not to assume prior to the Closing Date.
9.1.5 CALCULATION OF PRORATIONS. All prorations
shall be made on the basis of the actual number of days of the month which have
elapsed as of 12:01 a.m. on the Closing Date provided that the cash portion of
the Purchase Price is received by Seller's depository bank in time to credit to
Seller's account on the Closing Date. If the cash portion of the Purchase Price
is not so received by Seller's depository bank on the Closing Date, then the day
of Closing shall belong to Seller and such proration shall be made as of the end
of the day that is the Closing Date.
9.1.6 PROFORMA CLOSING STATEMENT. Buyer and Seller
shall reasonably cooperate to produce at least one business day prior to the
Closing Date, a schedule of prorations in accordance with the provisions of this
Agreement which is as complete and accurate as is then reasonably possible. All
prorations which can be reasonably estimated as of the Closing Date shall be
made in Escrow on the Closing Date. All other prorations and any adjustments to
the initial estimated prorations, shall be made by Buyer and Seller within
thirty (30) days following the Closing or such later time as may be reasonably
required, in the exercise of due diligence to obtain the necessary information.
Any net credit due one party from the other as the result of such post-Closing
prorations and adjustments shall be paid to the other in cash immediately upon
the parties' written agreement to a final schedule of post-Closing adjustments
and prorations. The provisions of Section 9.1 shall survive the Closing and the
recordation of the Deed.
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9.2 CLOSING COSTS.
9.2.1 SELLER'S COSTS. Seller shall pay (i) the
premium for the standard coverage CLTA portion of the Buyer's Title Policy; (ii)
fifty percent (50%) of all documentary and transfer taxes; (iii) fifty percent
(50%) of all escrow fees, costs and recording costs; (iv) fifty percent (50%) of
the cost of the Survey, if applicable; and (v) its own attorneys' fees.
9.2.2 BUYER'S COSTS. Buyer shall pay (i) fifty
percent (50%) of all escrow fees, costs and recording costs; (ii) the
incremental premium for the ALTA portion of Buyer's Title Policy, if applicable,
and the premium for any endorsements; (iii) the premium for the Buyer's lender's
title policy, if any; (iv) fifty percent (50%) of all documentary and transfer
taxes; (v) fifty percent (50%) of the cost of the Survey, if applicable; and
(vi) its own attorneys' fees.
9.3 CREDITS. Buyer shall be credited and Seller shall be
debited in an amount equal to all security deposits in Seller's possession paid
under the Lease(s), except to the extent that Seller was entitled to and did
apply any part of such deposits to tenant obligations under the Lease(s).
9.4 OTHER EXPENSES. Buyer and Seller shall each pay all
legal and professional fees and fees of other consultants incurred by Buyer and
Seller, respectively.
10. OPERATION OF PROPERTY PENDING THE CLOSING. Following the
Effective Date and pending the Closing, the Seller shall operate the Property in
accordance with the following:
10.1 NORMAL COURSE OF BUSINESS. Seller shall use
commercially reasonable efforts to continue to operate, manage and maintain the
Property in such condition so that the Property shall be in substantially the
same condition as of the Closing Date as it is as of the Due Diligence Date,
reasonable wear and tear and casualty excepted, provided however, Seller shall
not be required to perform any capital repairs or improvements. Seller shall
maintain all existing insurance policies in connection with the Property and
shall keep in effect and renew without material modification all licenses,
permits and entitlements applicable to the Property. Seller's existing liability
and property insurance pertaining to the Property may be canceled by Seller as
of the Closing Date. After the expiration of the Due Diligence Period, except as
may be required by the Lease(s), Seller shall not make any material alterations
to the Property or remove any Personal Property without the prior written
approval of Buyer, which approval shall not be unreasonably withheld or delayed;
10.2 FURTHER ENCUMBRANCES. Seller shall not execute any
documents or otherwise take any action which will have the result of further
encumbering the Property in any fashion;
10.3 LEASING. Following the Due Diligence Date, the Seller
shall not terminate, amend or otherwise modify the Lease(s), or enter into any
new lease without the prior consent of Buyer, which consent shall not be
unreasonably withheld or delayed; and
10.4 NEW OBLIGATIONS. Without the prior written consent of
Buyer, which consent shall not be unreasonably withheld or delayed, Seller shall
not enter into any maintenance contract, service contract or any other contract
affecting or relating to the Property or any portion thereof which cannot be
canceled upon thirty (30) days (or less) prior written notice. Notwithstanding
the above sentence, Seller shall be entitled to enter into any obligations
required to be undertaken by
15
Seller pursuant to the provisions of the Lease(s) without the prior consent of
Buyer provided that Seller shall give Buyer prior written notice of the entry of
Seller into any such obligations.
11. REPRESENTATIONS AND WARRANTIES.
11.1 NO REPRESENTATIONS OR WARRANTIES BY SELLER. Except as
expressly set forth in this Agreement, Seller has not made any warranty or
representation, express or implied, written or oral, concerning the Property.
11.2 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
represents and warrants to Buyer that:
11.2.1 AUTHORITY. This Agreement constitutes the
valid and binding obligation of Seller and is enforceable against Seller in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles. Seller is a corporation, validly formed, duly organized and in good
standing under the laws of the State of California. Seller has full power, right
and authority to enter into and perform this Agreement. The execution and
delivery of this Agreement, delivery of money and all required documents,
Seller's performance of this Agreement and the transaction contemplated hereby
have been duly authorized by the requisite action on the part of Seller. Neither
the execution and delivery of this Agreement, nor the transaction contemplated
by this Agreement will conflict in any material respect or constitute a breach
under any agreement or instrument by which Seller or the Property is bound;
11.2.2 SERVICE CONTRACTS. To Seller's knowledge,
the Service Contracts listed on EXHIBIT 1.3 are all of the agreements concerning
the operation and maintenance of the Property entered into by Seller and
affecting the Property, except those operating agreements that are not
assignable and except any agreement with Seller's property manager, which shall
be terminated by Seller as of the Closing;
11.2.3 CONDEMNATION. To Seller's knowledge, Seller
has received no written notice of any pending condemnation proceedings relating
to the Real Property;
11.2.4 LITIGATION. To Seller's knowledge, Seller
has not received written notice of any litigation which has been filed against
Seller that arises out of the ownership of the Property and would materially
affect the Property or use thereof, or Seller's ability to perform hereunder;
11.2.5 VIOLATIONS. To Seller's knowledge, Seller
has not received written notice of any uncured violation of any federal, state
or local law relating to the use or operation of the Property which would
materially adversely affect the Property or use thereof, or Seller's ability to
perform hereunder. To Seller's knowledge, Seller has not received written notice
of any alleged building code violations, health and safety code violations,
federal, state or local agency actions regarding environmental matters or zoning
violations currently affecting the Real Property which remain uncured;
16
11.2.6 ACCESS. To the best of Seller's knowledge,
no fact or condition exists which may result in the termination or reduction of
the current access from the Real Property to existing roads and highways;
11.2.7 FOREIGN PERSON. Seller is not a "foreign
person" as defined in Section 1445 of the Internal Revenue Code of 1986, as
amended, and the income tax regulations issued thereunder;
11.2.8 LEASE(S). To Seller's knowledge, except as
disclosed in writing to Buyer, Seller has not received notice of any claimed
default by Seller under the Lease(s) and there are no unperformed obligations of
Seller pursuant to the Lease(s); and
11.2.9 LEASING COMMISSIONS. As of the Effective
Date, there are no leasing commissions required to be paid in connection with
the Lease(s) except as may be related to future renewals, expansions or
extensions.
11.3 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer
represents and warrants to Seller that:
11.3.1 AUTHORITY TO EXECUTE; ORGANIZATION. This
Agreement constitutes the valid and binding obligation of Buyer and is
enforceable against Buyer in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting the enforcement of creditors' rights
generally and general equitable principles. Buyer represents that it is a
corporation, is validly formed and duly organized in good standing under the
laws of the State of New Jersey and the execution of this Agreement, delivery of
money and all required documents, Buyer's performance of this Agreement and the
transaction contemplated hereby have been duly authorized by the requisite
action on the part of Buyer;
11.3.2 NO ENCUMBRANCE. Prior to Closing, Buyer
shall neither encumber nor cause any liens to be created against the Property in
any way, nor shall Buyer, at any time, record this Agreement or a memorandum
thereof; and
11.3.3 PRINCIPAL; FINANCIAL RESOURCES. Buyer is
acting as a principal in connection with the transaction as contemplated by this
Agreement and presently possesses, and will possess as of the Closing, the
financial resources to timely consummate the purchase and sale transaction
contemplated by this Agreement.
11.4 KNOWLEDGE DEFINED. References to the "knowledge" of
Seller and phrases of similar import shall refer only to the current actual (not
constructive) knowledge of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, and shall not be construed,
by imputation or otherwise, to refer to the knowledge of any affiliate of
Seller, to any property manager, or to any other officer, agent, manager,
representative or employee of Seller or any affiliate thereof or to impose upon
such person any duty to investigate the matter to which such actual knowledge,
or the absence thereof, pertains. Seller represents that ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇ is the President of Seller and is active in the management of the
Property.
17
12. INDEMNIFICATION.
12.1 INDEMNIFICATION OF BUYER. Seller hereby agrees to
indemnify Buyer against, and to hold Buyer harmless from, all losses, damages,
costs and expenses whatsoever including without limitation reasonable legal fees
and disbursements, incurred by Buyer relating to the Property which arise,
result from or relate to (i) acts, occurrences or matters that took place prior
to the Closing to the extent that any such claim described in this clause (i) is
covered by the commercial general liability insurance policy maintained by
Seller or otherwise covered pursuant to applicable insurance coverage maintained
by Seller and in this connection Seller represents and warrants that Seller has
during the period of its ownership maintained and continues to maintain
commercial general liability insurance coverage; or (ii) any material breach of
any of the representations or warranties of Seller set forth in Section 11.2 of
this Agreement subject, however, to the limitations of Section 16.4.
12.2 DEFENSE OF CLAIMS AGAINST BUYER. With respect to any
claim for which Buyer has requested indemnification under Section 12.1, Seller
shall be entitled to assume the defense of any related litigation, arbitration
or other proceeding, provided that Buyer may at its election and expense,
participate in such defense, and provided further that if there is any
difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Seller's
counsel will, after consultation with Buyer's counsel, determine the actual
strategy, defense or counterclaim to be employed. At Seller's reasonable
request, Buyer will cooperate with Seller in the preparation of any defense for
any such claim and Seller will reimburse Buyer for any reasonable expenses
incurred in connection with such request. If Seller does not elect to assume the
defense of any such matter and such matter is defended by Buyer, Seller shall
have the right, at its sole expense, to employ separate counsel acceptable to
Buyer and participate in such defense, provided that if there is any difference
of opinion or strategy with respect to the defense of such action or the
assertion of counterclaims to be brought with respect thereto, Buyer's counsel
will, after consultation with Seller's counsel, determine the actual strategy,
defense and/or counterclaim to be employed.
12.3 INDEMNIFICATION OF SELLER. Buyer hereby agrees to
indemnify Seller against, and to hold Seller harmless from, all losses, damages,
costs and expenses whatsoever including without limitation reasonable legal fees
and disbursements, incurred by Seller relating to the Property which arise,
result from or relate to (i) acts, occurrences or matters that take place
subsequent to the Closing to the extent that any such claim described in this
clause (i) is covered by the commercial general liability insurance policy
maintained by Buyer or otherwise covered pursuant to applicable insurance
coverage maintained by Buyer and in this connection Buyer represents and
warrants that Buyer will during the period of its ownership maintain commercial
general liability insurance coverage; or (ii) any material breach of any of the
representations or warranties of Buyer set forth in Section 11.3 of this
Agreement.
12.4 DEFENSE OF CLAIMS AGAINST SELLER. With respect to any
claim for which Seller has requested indemnification under Section 12.3, Buyer
shall be entitled to assume the defense of any related litigation, arbitration
or other proceeding, provided that Seller may at its election and expense,
participate in such defense, and provided further that if there is any
difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Buyer's
counsel will, after consultation with Seller's counsel, determine the actual
strategy, defense or counterclaim to be employed. At Buyer's reasonable request,
Seller will cooperate with Buyer in the preparation of any defense for any such
claim and Buyer will reimburse Seller for any reasonable expenses incurred in
connection with such request. If Buyer does not elect
18
to assume the defense of any such matter, and such matter is defended by Seller,
Buyer shall have the right, at its sole expense, to employ separate counsel
acceptable to Seller and participate in such defense, provided that if there is
any difference of opinion or strategy with respect to the defense of such action
or the assertion of counterclaims to be brought with respect thereto, Seller's
counsel will, after consultation with Buyer's counsel, determine the actual
strategy, defense and/or counterclaim to be employed.
13. CASUALTY OR CONDEMNATION.
13.1 CASUALTY. Prior to the Closing, and notwithstanding
the pendency of this Agreement, the entire risk of loss or damage by earthquake,
flood, landslide, fire or other casualty shall be borne and assumed by Seller,
except as otherwise provided in this Section 13.1. If, prior to the Closing, any
part of the Real Property is damaged or destroyed by earthquake, flood,
landslide, fire or other casualty, Seller shall immediately notify Buyer of such
fact. If such damage or destruction is "material", Buyer shall have the option
to terminate this Agreement upon notice to Seller given not later than ten (10)
days after receipt of Seller's notice. For purposes of this Section 13.1,
"material" shall be deemed to be any damage or destruction (i) where the costs
of repair or replacement is estimated to be One Hundred Thousand Dollars
($100,000.00), or more, or (ii) which Seller reasonably estimates shall take
more than ninety (90) days to repair. If Buyer does not exercise this option to
terminate this Agreement, or the casualty is not material, neither party shall
have the right to terminate this Agreement, but Seller shall assign and turn
over to Buyer, and Buyer shall be entitled to receive and keep all insurance
proceeds payable to it with respect to such destruction (but not in excess of
the Purchase Price) and the parties shall proceed to the Closing pursuant to the
terms hereof without modification of the terms of this Agreement and without any
reduction in the Purchase Price. If Buyer does not elect to terminate this
Agreement by reason of any casualty, Buyer shall have the right to participate
in any adjustment in the insurance claim. If Buyer does terminate this Agreement
pursuant to this Section 13.1, this Agreement shall terminate, all rights and
obligations hereunder of each party shall be at an end (except those matters
which are specifically stated in this Agreement to survive the termination) and
the Title Company is hereby instructed to return promptly to the party which
placed such items into Escrow all funds (including the Deposit which is to be
promptly returned to Buyer) and documents which are held by the Title Company on
the date of termination.
13.2 CONDEMNATION. In the event that all or any
substantial portion of the Real Property shall be taken in condemnation or under
the right of eminent domain after the Effective Date and before the Closing,
Buyer may, at its option either (a) terminate this Agreement by written notice
thereof to Seller and receive an immediate refund of the Deposit, together with
any interest earned thereon, or (b) proceed to close the transaction
contemplated herein pursuant to the terms hereof in which event Seller shall
assign and turn over to Buyer, and Buyer shall be entitled to receive and keep
all awards for the taking by eminent domain which accrue to Seller and there
shall be no reduction in the Purchase Price. For purposes of this provision, a
"substantial portion" of the Real Property shall mean (i) any material portion
of the Real Property is taken; (ii) the access to the Real Property or available
parking area therefor is materially reduced or restricted; or (iii) any of the
rentable square footage of the Improvements is taken. In the event that a
portion of the Real Property less than a substantial portion is taken, or Buyer
elects not to terminate this Agreement, Buyer shall proceed to close the
transaction contemplated herein and there shall be no reduction in the Purchase
Price and Seller shall assign and turn over to Buyer and Buyer shall be entitled
to receive and keep all awards for the taking by eminent domain which accrue to
Seller.
19
14. COMMISSIONS.
14.1 PAYMENT OF THE SALES COMMISSION. Seller and Buyer
represent to each other that no real estate broker or agent has been authorized
to act on their behalf in the contemplated transaction. Buyer and Seller each
indemnifies the other party and agrees to defend and hold the other party
harmless from any and all demands or claims which now or hereafter may be
asserted against the other party for any brokerage fees, commissions or similar
types of compensation which may be claimed by any broker as a result of the
indemnifying party's acts in connection with this transaction.
14.2 LEASING COMMISSIONS AND LANDLORD TENANT IMPROVEMENTS.
Subject to the provisions of Section 10.3 above, Buyer shall pay all leasing
commissions and landlord tenant improvement costs relative to any lease(s) made
on or after the Effective Date.
15. NOTICES.
All notices, requests or demands to a party hereunder shall be
in writing and shall be given or served upon the other party by personal
service, by certified return receipt requested or registered mail, postage
prepaid, or by Federal Express or other nationally recognized commercial
courier, charges prepaid, addressed as set forth below. Any such notice, demand,
request or other communication shall be deemed to have been given upon the
earlier of personal delivery thereof, three (3) business days after having been
mailed as provided above, or one (1) business day after delivery through a
commercial courier, as the case may be. Notices may be given by facsimile and
shall be effective upon the transmission of such facsimile notice provided that
the facsimile notice is transmitted on a business day and a copy of the
facsimile notice together with evidence of its successful transmission
indicating the date and time of transmission is sent on the day of transmission
by recognized overnight carrier for delivery on the immediately succeeding
business day. Each party shall be entitled to modify its address by notice given
in accordance with this Section 15.
If to Seller: Limar Realty Corp. #13
c/o Limar Realty Group
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
20
If to Buyer: ▇▇▇▇ ▇▇▇▇
President & CEO
Arena Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: General Counsel
Arena Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
16. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
16.1 NO RELIANCE ON DOCUMENTS. Except as expressly stated
herein, Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information delivered by Seller or its
agents to Buyer in connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information delivered by
Seller to Buyer in connection with the transaction contemplated hereby are
provided to Buyer as a convenience only and that any reliance on or use of such
materials, data or information by Buyer shall be at the sole risk of Buyer.
Neither Seller, nor any affiliate of Seller, nor the person or entity which
prepared any report or reports delivered by Seller to Buyer shall have any
liability to Buyer for any inaccuracy in or omission from any such reports.
16.2 AS-IS SALE: DISCLAIMERS. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING
AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND
CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL
FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO
THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY
EMPLOYEES OR AGENTS REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER
MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY
SET FORTH IN THIS AGREEMENT. BUYER ALSO ACKNOWLEDGES THAT THE PURCHASE PRICE
REFLECTS AND TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS-IS."
21
BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY
OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE
EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY
HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY
SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER
OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH
IN THIS AGREEMENT. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL
AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S
INVESTIGATIONS, AND BUYER, UPON CLOSING (EXCEPT WITH RESPECT TO THE EXPRESS
REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT), SHALL BE
DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE
ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES
OR MATTERS REGARDING THE PROPERTY. BUYER HEREBY WAIVES THE PROVISIONS OF
CALIFORNIA CIVIL CODE SECTION 1542 WHICH PROVIDES THAT:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
--------------------------- -------------------------
RPB THK
--------------------------- -------------------------
BUYER'S INITIALS SELLER'S INITIALS
--------------------------- -------------------------
16.3 MATERIAL CHANGE. Seller shall promptly notify Buyer
of any change in any condition with respect to the Property or any event or
circumstance which makes any representation or warranty of Seller as set forth
in Section 11.2 of this Agreement materially untrue or misleading or any
covenant of Seller under this Agreement incapable of being performed. In no
event shall Seller be liable to Buyer for, or be deemed to be in default
pursuant to this Agreement by reason of any inaccuracy of a representation or
warranty which results from any change that (i) occurs between the Effective
Date and the Closing Date; and (ii) is expressly permitted under the terms of
this
22
Agreement or is beyond the reasonable control of Seller to prevent; provided,
however, that the occurrence of a material change which is not permitted
hereunder shall constitute the non-fulfillment of the condition set forth in
Section 7.2.2 hereof. If, in spite of such nonfulfillment of the conditions set
forth in such Section 7.2.2 the Closing occurs, Seller's representations and
warranties set forth in this Agreement shall be deemed to have been modified by
all statements made in any notice or notices of modification as given by Seller
to Buyer pursuant to this Section 16.3 prior to the Closing.
16.4 SURVIVAL OF SELLER'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller set forth in Section 11.2 hereof
(as such may have been updated as of the Closing in accordance with Section
16.3) in accordance with the terms of this Agreement, shall survive Closing for
a period of twelve (12) months. No claim for a breach of any representation or
warranty of Seller shall be actionable or payable if the breach in question
results from or is based on a condition, state of facts or other matter which
was known to Buyer prior to Closing. Seller shall have no liability to Buyer for
a breach of any representation or warranty (a) unless the valid claims for all
such breaches collectively aggregate more than One Hundred Thousand Dollars
($100,000.00), in which event the amount of such valid claims in excess of One
Hundred Thousand Dollars ($100,000.00) shall be actionable, up to the Maximum
(as defined in this Section), and (b) unless written notice containing a
description of the specific nature of such breach shall have been given by Buyer
to Seller prior to the expiration of said twelve (12) month period and any
action shall have been commenced by Buyer against Seller within fourteen (14)
months of Closing. Buyer agrees to first seek recovery under any insurance
policies, Service Contracts and the Lease(s) prior to seeking recovery from
Seller, and Seller shall not be liable to Buyer if Buyer's remaining claim after
recovery from such insurance policies, Service Contracts and/or Lease(s) is less
than One Hundred Thousand Dollars ($100,000.00). As used herein, the term
"MAXIMUM" shall mean the total aggregate amount of Five Hundred Thousand Dollars
($500,000.00).
16.5 SURVIVAL OF LIMITATIONS. The provisions of this
Article 16 shall survive Closing or any termination of this Agreement.
17. MISCELLANEOUS.
17.1 TIME. Time is of the essence in the performance of
each party's obligations hereunder; however, if the final date of any period
which is set out in any provision of this Agreement falls on a Saturday, Sunday
or legal holiday under the laws of the United States or the State in which the
Property is located, then, in such event, the time of such period shall be
extended to the next day which is not a Saturday, Sunday or legal holiday.
17.2 ATTORNEYS' FEES. If any legal action, arbitration or
other proceeding is commenced to enforce or interpret any provision of this
Agreement, the prevailing party shall be entitled to seek an award of its
attorneys' fees and expenses. The phrase "prevailing party" shall include a
party who receives substantially the relief desired whether by dismissal,
summary judgment, judgment or otherwise.
17.3 NO WAIVER. No waiver by any party of the performance
or satisfaction of any covenant or condition shall be valid unless in writing
and shall not be considered to be a waiver by such party of any other covenant
or condition hereunder.
23
17.4 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties regarding the Property and supersedes all prior
agreements, whether written or oral, between the parties regarding the same
subject. This Agreement may only be modified in writing.
17.5 SURVIVAL. The provisions of this Agreement shall not
merge with the delivery of the Deed but shall, except as otherwise provided in
this Agreement, survive the Closing.
17.6 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the heirs, executors, administrators
and successors and assigns of Seller and Buyer; provided, however, that Buyer
shall not assign Buyer's rights and obligations pursuant to this Agreement to
any party without the prior written consent of Seller which consent may be
withheld in its sole and absolute discretion.
17.7 SEVERABILITY. In the case that any one or more of the
provisions contained in this Agreement are for any reason held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
17.8 CAPTIONS. Paragraph titles or captions contained in
this Agreement are inserted as a matter of convenience only and for reference,
and in no way define, limit, extend or describe the scope of this Agreement.
17.9 EXHIBITS. All exhibits attached hereto shall be
incorporated herein by reference as if set out herein in full.
17.10 RELATIONSHIP OF THE PARTIES. The parties acknowledge
that neither party is an agent for the other party, and that neither party shall
or can bind or enter into agreements for the other party.
17.11 GOVERNING LAW. This Agreement and the legal relations
between the parties hereto shall be governed by and be construed in accordance
with the laws of the State of California.
17.12 REVIEW BY COUNSEL. The parties acknowledge that each
party and its counsel have reviewed and approved this Agreement, and the parties
hereby agree that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits hereto.
17.13 NON-DISCLOSURE. The parties hereto shall not disclose
any of the material terms of this Agreement (except to the extent as may be
required by law or as required by the Title Company or to the officers,
directors, partners and employees of the parties hereto in the ordinary course
of business) without the prior written consent of the other party except that
each party may make disclosure to its respective lawyers, accountants, advisors
and shareholders.
17.14 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original. This Agreement shall
only be effective if a counterpart is signed by both Seller and Buyer.
24
17.15 FILING OF REPORTS. The Title Company shall be solely
responsible for the timely filing of any reports or returns required pursuant to
the provisions of Section 6045(e) of the Internal Revenue Code of 1986 as
amended (and any similar reports or returns required under any state or local
laws) in connection with the Closing.
17.16 1031 EXCHANGE. In connection with the transactions
contemplated by this Agreement, Seller may wish to engage in a tax deferred
exchange pursuant to Section 1031 of the Internal Revenue Code of 1986 as
amended. Buyer agrees to reasonably cooperate with Seller in connection with
such exchange, provided, however, that (i) notwithstanding any other provision
of this Agreement to the contrary, Seller can elect to delay the Closing for a
period of up to thirty (30) business days; (ii) Buyer will not be required to
take title to any other real property; (iii) Buyer shall not incur any
additional liability by reason of such exchange; (iv) Seller will indemnify and
hold Buyer harmless for, from and against any claim, demand, cause of action,
liability or expense (including attorney's fees) in connection therewith,
including, without limitation, any increase in escrow fees or charges resulting
from such exchange; and (v) Seller acknowledges and agrees and that Buyer has
not made and will not make any representation or warranty as to the
effectiveness for tax purposes of any such exchange. Seller must notify Buyer at
least five (5) days before the contemplated date of Closing if Seller intends to
proceed pursuant to this Section 17.16.
17.17 LICENSED REAL ESTATE BROKERS. Buyer hereby
acknowledges that (a) Limar Financial Corporation ("LFC"), an affiliate of
Seller, is a licensed real estate broker under the laws of the State of
California, (b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
officers of LFC and Seller, are similarly so licensed and (c) no agency
relationship has been created between Seller and Buyer (or between LFC or ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and Buyer) with respect
to the transactions subject to this Agreement.
17.18 THIRD PARTY BENEFICIARIES. This Agreement is for the
benefit of Buyer and Seller and their respective agents, employees,
shareholders, officers, directors, partners and successors and no third party
shall be entitled to the benefit of any of the provisions of this Agreement.
17.19 FACSIMILE SIGNATURES. Seller and Buyer each (a) has
agreed to permit the use from time to time, where appropriate, of telecopy
signatures in order to expedite the transaction contemplated by this Agreement,
(b) intends to be bound by its respective telecopy signature, (c) is aware that
the other will rely on the telecopied signature, and (d) acknowledges such
reliance and waives any defenses to the enforcement of this Agreement and the
documents affecting the transaction contemplated by this Agreement based on the
fact that a signature was sent by telecopy only.
25
18. DEFAULT.
18.1 LIQUIDATED DAMAGES. FROM AND AFTER THE EXPIRATION OF
THE DUE DILIGENCE PERIOD, IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED DUE TO A DEFAULT OF BUYER, THE DEPOSIT (INCLUDING
ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE PAID TO AND RETAINED
BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS
SECTION 18.1 BELOW, THE PARTIES ACKNOWLEDGE THAT THE NONREFUNDABLE DEPOSIT HAS
BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE
CLOSING DOES NOT OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER
ARISING FROM SUCH FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER SHALL PAY ALL
TITLE, SURVEY AND ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN
NO EVENT SHALL THIS SECTION 18.1 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY
AGAINST THE OTHER PARTY DUE TO (A) THE OTHER PARTY'S OBLIGATION TO INDEMNIFY
SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT, OR (B) THIRD PARTY CLAIMS. BY
THEIR SEPARATELY EXECUTING THIS SECTION 18.1 BELOW, BUYER AND SELLER ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED
DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE
CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS
EXECUTED.
26
--------------------------- -------------------------
RPB THK
--------------------------- -------------------------
BUYER'S INITIALS SELLER'S INITIALS
--------------------------- -------------------------
18.2 DEFAULT BY SELLER. In the event the sale of the
Property as contemplated hereunder is not consummated due to Seller's default
hereunder, Buyer shall be entitled, as its sole remedy, either (a) to receive
the return of the Deposit, which return shall operate to terminate this
Agreement and release Seller from any and all liability hereunder, or (b) to
enforce specific performance of Seller's obligation to convey the Property to
Buyer in accordance with the terms of this Agreement, it being understood and
agreed that the remedy of specific performance shall not be available to enforce
any other obligation of Seller hereunder. Buyer expressly waives its rights to
seek damages in the event of Seller's default hereunder. Buyer shall be deemed
to have elected to terminate this Agreement and receive back the Deposit if
Buyer fails to file suit for specific performance against Seller in a court
having jurisdiction in the county and state in which the Real Property is
located, on or before thirty (30) days following the date upon which Closing was
to have occurred.
19. DEFINITIONS. For ease of reference, the defined terms as
employed in this Agreement and as listed below are defined in the designated
sections:
19.1 "Agreement" as defined in the first paragraph.
19.2 "Approval Notice" as defined in Section 6.7
19.3 "Assignment" as defined in Section 1.3
19.4 "▇▇▇▇ of Sale" as defined in Section 8.1.2
19.5 "Buyer" as defined in the first paragraph.
19.6 "Buyer's Reports" as defined in Section 6.5
19.7 "Buyer's Representatives" as defined in Section 6.4
19.8 "Buyer's Title Policy" as defined in Section 3.2
19.9 "Closing" as defined in Section 5.1
19.10 "Closing Date" as defined in Section 5.1
19.11 "Deed" as defined in Section 8.1.1
19.12 "Deposit" as defined in Section 2.1
19.13 "Deposit #1" as defined in Section 2.1
19.14 "Deposit #2" as defined in Section 2.1
19.15 "Due Diligence Date" as defined in Section 6.1
19.16 "Due Diligence Materials" as defined in Section 6.2
19.17 "Due Diligence Period" as defined in Section 6.1
19.18 "Effective Date" as defined in the first paragraph.
19.19 "Escrow" as defined in Section 4.1
19.20 "Future Commission Obligations" as defined in
Section 14.2
19.21 "Improvements" as defined in Section 1.1.2
19.22 "Intangible Property" as defined in Section 1.3
19.23 "LFC" as defined in Section 17.17
19.24 "Land" as defined in Section 1.1.1
19.25 "Lease(s)" as defined in Section 1.3
19.26 "Maximum" as defined in Section 16.4
27
19.27 "Permitted Exceptions" as defined in Section 3.3
19.28 "Personal Property" as defined in Section 1.1.3
19.29 "Property" as defined in Section 1.1
19.30 "Purchase Price" as defined in Section 2
19.31 "Real Property"" as defined in Section 1.2
19.32 "Seller" as defined in the first paragraph.
19.33 "Service Contracts" as defined in Section 1.3
19.34 "Subsequent Title Defects Notice" as defined in
Section 6.3.3
19.35 "Survey" as defined in Section 6.3.1
19.36 "Title Company" as defined in Section 4.1
19.37 "Title Notice" as defined in Section 6.3.2
19.38 "Title Report" as defined in Section 6.3.1
19.39 "Title Review Period" as defined in Section 6.3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
SELLER: BUYER:
Limar Realty Corp. #13, Arena Pharmaceuticals, Inc.
a California corporation a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------ Its: Sr. Vice President, Operations
Its: President General Counsel & Secretary
---------
28
LIST OF EXHIBITS
Exhibit 1.1.1 - Legal Description of Land
Exhibit 1.3 (i) - Schedule of Lease(s)
Exhibit 1.3 (ii) - Schedule of Service Contracts
Exhibit 6.2.1 - Delivered Materials
Exhibit 6.7 - Form of Approval Notice
Exhibit 8.1.1 - Form of Grant Deed
Exhibit 8.1.2 - Form of ▇▇▇▇ of Sale
Exhibit 8.1.3 - Form of Assignment and Assumption Agreement
Exhibit 8.2.3 - Form of Buyer's Affidavit
29