EXHIBIT 10.9
PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS
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THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") is dated
as of this 24th day of July, 2000, for reference purposes only, and is made by
and between TMG North First Associates, L.P., a Delaware limited partnership
("Seller"), and NetIQ Corporation, a Delaware corporation ("Buyer"). This
Agreement shall be effective on the "Effective Date", which is the date on which
Buyer has received from Seller a fully executed copy of this Agreement.
R E C I T A L S:
This Agreement is entered into on the basis of the following facts,
understandings and intentions of the parties:
A. Seller is the owner of that certain real property located in San Jose,
California, consisting of that property (including all buildings,
structures, fixtures and other improvements located thereon or thereunder)
commonly known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and more
particularly described in Exhibit A attached hereto (the "Real Property").
B. Buyer desires to purchase the "Property" (as defined in Section 1.2 below)
from Seller and Seller desires to sell the Property to Buyer, upon the
terms and conditions stated in this Agreement. Seller, as landlord, and
Buyer, as tenant, have entered into a lease, dated as of June 15, 2000, of
the Property (the "New Lease"). Pursuant to Sections 1.1 and 1.2 of the New
Lease, Buyer has the right to seek reimbursement from Seller in connection
with certain parking lot repair costs to be paid by Buyer (the "Parking Lot
Costs"). If Seller actually reimburses Buyer any Parking Lot Costs before
Closing (the "Reimbursed Costs"), then at Closing, Buyer shall reimburse
Seller for the full amount of the Reimbursed Costs actually reimbursed by
Seller before the Closing.
C. North First Investors, LLC, a Delaware limited liability company
("Farallon") is a limited partner of Seller. Before the Closing Date,
Seller may convey to Farallon or a Farallon affiliate (a "Farallon Entity")
a tenancy in common interest in the Property. If such tenancy in common
interest is conveyed to a Farallon Entity before Closing, then at Closing
the term "Seller" as used in this Agreement shall include the original
Seller and such Farallon Entity, and such Farallon Entity shall execute all
documents necessary to convey title to Buyer.
D. In order to effectuate the foregoing, Seller and Buyer desire to enter into
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of the parties herein
contained and other valuable consideration, the parties agree as follows:
1. SALE AND PURCHASE; TITLE COMPANY
1.1 General. Subject to the terms, covenants and conditions of this
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Agreement, Seller shall sell to Buyer, and Buyer shall purchase from Seller, all
of the Property.
1.2 The Property. As used in this Agreement, the term "Property" includes
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all of Seller's right, title and interest in the Real Property and all of the
items referred to in Subsections 1.2.1 through 1.2.5.
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1.2.1. Personal Property. All of Seller's right, title and interest
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in by Seller and which is used in the operation and maintenance of the Real
Property (the "Personal Property").
1.2.2. Rights and Privileges. All of Seller's right, title and
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interest, if any, in and to all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appurtenances, mineral rights, development rights, air
rights and riparian or littoral rights belonging or appertaining to the Real
Property.
1.2.3. Contracts and Leases. All of Seller's right, title and
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interest in and to (i) all assignable service, maintenance, construction,
management and other contracts relating to the operation of the Property
(collectively, "Contracts"), and (ii) all leases, tenancy and occupancy
agreements for all or any portion of the Real Property (collectively, "Leases").
1.2.4. Permits and Warranties. All of Seller's right, title and
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interest in and to (i) all licenses, permits and approvals, if any ("Permits"),
affecting or pertaining to the Property which, if assignable, are to be assigned
to Buyer at the Closing, and (ii) all warranties, if any, ("Warranties")
affecting or pertaining to the Property which, if assignable, are to be assigned
to Buyer at the Closing.
1.2.5 Reports. Any survey of the Real Property, and all reports
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and other studies regarding the soil, subsurface, topographical, environmental,
hazardous materials, feasibility, engineering or traffic (the "Reports").
1.3. Title Company. The purchase and sale of the Property shall be
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accomplished through an escrow which Seller has established or will establish
with Chicago Title Insurance Company (the "Title Company") in Oakland,
California.
2. PAYMENT OF PURCHASE PRICE
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2.1. AmountERROR! BOOKMARK NOT DEFINED.. The purchase price (the
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"Purchase Price") to be paid by Buyer to Seller for the Property is Twenty-Eight
Million Two Hundred Thousand Dollars ($28,200,000.00), as such amount may be
adjusted as provided in this Agreement.
2.2. Terms of Payment. Buyer shall pay the Purchase Price to Seller as
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follows:
2.2.1. Deposit. Within three (3) business days of the Effective
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and as a condition precedent of the effectiveness of this Agreement, Buyer
shall deliver to Title Company a cashier's check or wire transfer of funds in
the amount of One Hundred Thousand Dollars ($100,000.00) (the "Initial
Deposit"), as an ▇▇▇▇▇▇▇ money deposit on account of the Purchase Price. Within
three (3) business days of satisfaction or waiver of both of the conditions
precedent set forth in Sections 4.1.1 and 4.1.5 of this Agreement, Buyer shall
deliver to Title Company an additional deposit (the "Second Deposit") in the
amount of Nine Hundred Thousand Dollars ($900,000.00). If the Closing Date has
not previously occurred, within twenty (20) calendar days of satisfaction or
waiver of both of the conditions precedent set forth in Sections 4.1.1 and 4.1.5
of this Agreement, Buyer shall deliver to Title Company an additional deposit
(the "Third Deposit") in the amount of One Million Dollars ($1,000,000.00). As
used in this Agreement, the term "Deposit" means the Initial Deposit, the Second
Deposit, the Third Deposit (if such Third Deposit is made before the Closing
Date) and all amounts which, at the time in question, shall have been deposited
into escrow by Buyer.
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2.2.2. Payment of BalanceERROR! BOOKMARK NOT DEFINED.. The balance of the
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Purchase Price shall be paid in full, in cash, through escrow at the Closing.
3. DEPOSIT.
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3.1. Handling of Deposit. Title Company shall deposit the Deposit in an
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interest-bearing account, and the term "Deposit" as used in this Agreement shall
include any interest earned thereon.
3.2. Liquidated Damages. BUYER ACKNOWLEDGES THAT THE CLOSING OF THE SALE
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OF THE PROPERTY TO BUYER, ON THE TERMS AND CONDITIONS AND WITHIN THE TIME PERIOD
SET FORTH IN THIS AGREEMENT, IS MATERIAL TO SELLER. BUYER ALSO ACKNOWLEDGES THAT
SUBSTANTIAL DAMAGES WILL BE SUFFERED BY SELLER IF SUCH TRANSACTION IS NOT SO
CONSUMMATED DUE TO BUYER'S DEFAULT UNDER THIS AGREEMENT. BUYER FURTHER
ACKNOWLEDGES THAT, AS OF THE DATE OF THIS AGREEMENT, SELLER'S DAMAGES WOULD BE
EXTREMELY DIFFICULT OR IMPOSSIBLE TO COMPUTE IN LIGHT OF THE UNPREDICTABLE STATE
OF THE ECONOMY AND OF GOVERNMENTAL REGULATIONS, THE FLUCTUATING MARKET FOR REAL
ESTATE AND REAL ESTATE LOANS OF ALL TYPES, AND OTHER FACTORS WHICH DIRECTLY
AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY. IN LIGHT OF THE FOREGOING
AND ALL OF THE OTHER FACTS AND CIRCUMSTANCES SURROUNDING THIS TRANSACTION, AND
FOLLOWING NEGOTIATIONS BETWEEN THE PARTIES, BUYER AND SELLER AGREE THAT THE
AMOUNT OF THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES WHICH
SELLER WOULD SUFFER BY REASON OF BUYER'S DEFAULT HEREUNDER. ACCORDINGLY, BUYER
AND SELLER HEREBY AGREE THAT, IN THE EVENT OF SUCH DEFAULT BY BUYER UNDER THIS
AGREEMENT, SELLER MAY TERMINATE THIS AGREEMENT BY GIVING NOTICE TO BUYER AND
TITLE COMPANY. IN THE EVENT OF SUCH TERMINATION, SELLER SHALL RETAIN THE DEPOSIT
AS LIQUIDATED DAMAGES IN LIEU OF ANY OTHER CLAIM SELLER MAY HAVE AT LAW OR IN
EQUITY (INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, WHICH OTHER CLAIMS
SELLER HEREBY WAIVES) ARISING BY REASON OF BUYER'S DEFAULT. THE PARTIES HAVE
INITIALED THIS SECTION 3.2 TO ESTABLISH THEIR INTENT SO TO LIQUIDATE DAMAGES.
NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED IN THIS SECTION 3.2 SHALL BE
DEEMED TO LIMIT BUYER'S OBLIGATION TO PERFORM THE "CONTINUING OBLIGATIONS"
DEFINED IN SECTION 4.6 BELOW.
Seller's Buyer's
Initials: _________________ Initials: ___________________
4. BUYER'S CONDITIONS PRECEDENT; INSPECTION OF PROPERTY.
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4.1. Enumeration of Conditions. Buyer's obligation to purchase the
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Property shall be subject to the satisfaction (or waiver by Buyer) of each of
the conditions precedent specified below in this Section 4.1, each of which is
for the sole benefit of Buyer.
4.1.1. Inspection and Financing. On or before July 24, 2000 (the
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"Due Diligence Expiration Date"), subject to the provisions of Section 4.3.1
below, Buyer shall have approved all investigations, inspections, tests, studies
and analyses, including, without limitation, with respect to the soil, drainage,
the existence of any hazardous materials on the Property or adjacent properties,
applicable laws, codes,
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regulations and governmental approvals, zoning, availability of utilities and
feasibility of the Property for the use intended by Buyer, which Buyer elects to
make as provided in Section 4.3 with respect to the Property, and Buyer shall
have satisfied itself that it shall be able to obtain financing for the purchase
of the Property.
4.1.2. Property Documents. Within three (3) business days after the
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Effective Date, Seller shall have delivered copies, and Buyer shall have
reviewed and approved, on or before the Due Diligence Expiration Date, of each
of the following to the extent in Seller's direct or indirect possession:
(a) Leases. Each Lease.
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(b) Contracts. Each Contract.
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(c) Reports, Permits, Warranties. Each Report, including all surveys,
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plans, specifications, licenses, approvals, variances, waivers, certificates of
approval from any governmental authority, and engineering, feasibility, traffic
or other consultants' reports, tests and assessments (including, without
limitation, all reports with respect to hazardous materials on, in, under or
about the Real Property), if any, and all Permits and Warranties, pertaining to
the development, improvement, physical condition or status of the Property,
excepting appraisals, internal valuation documents, and any other attorney-
client privileged or proprietary documents.
(d) Title Policy. A current preliminary title report for the Property
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and a copy of Seller's title insurance policy for the Property (the "Seller's
Title Policy"), together with the survey of the Property prepared by ▇▇▇▇▇▇ &
▇▇▇▇▇ for Seller (the "Survey") and referred to in Seller's Title Policy and a
copy of each document referred to in Seller's Title Policy.
4.1.3. Seller's Performance. Seller shall have performed in all
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respects, each and every agreement to be performed by Seller pursuant to this
Agreement including, without limitation, timely delivery and execution by Seller
of all instruments or other items required to be delivered by Seller pursuant to
this Agreement, and each representation and warranty made in this Agreement by
Seller shall have been true and correct as of date made and as of the Closing.
4.1.4. Buyer's Title Policy. On or before the Due Diligence Expiration
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Date, Buyer shall have reviewed and approved of the Seller's Title Policy and
the Survey (updated as Buyer may require). In addition, as of the Closing, the
Title Company shall have committed to issue, upon the condition of the payment
of its regularly scheduled premium, the Title Policy (as defined below). If as
of the Closing Title Company is not prepared to issue such commitment, then
Buyer either may waive this condition precedent and proceed with the purchase
or, as Buyer's sole remedy, terminate this Agreement on or before the Closing
Date and receive a return of the Deposit. In the event of such termination by
Buyer, neither Seller nor Buyer shall thereafter have any further rights or
obligations under this Agreement, except Buyer's and Seller's obligations to
perform their respective Continuing Obligations (as defined below). Buyer shall
have no right to commence any action for damages, specific performance or other
relief as a result of Seller's inability to deliver title to the Property
subject only to the Conditions of Title approved by Buyer or Seller's
unwillingness to remove or otherwise cure any title matter that is not a
Condition to Title.
4.1.5. Permit. On or before August 21, 2000, Seller shall have received
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the Site Development Plan permit required to bring the exterior of the
Improvements into compliance with ADA and to reconstruct, reseal and restripe
the parking area to provide approximately 290 parking spaces (the "SDP Permit").
A copy of the current draft of the SDP Permit is attached to this Agreement as
Exhibit G. Buyer hereby approves the
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current form of the SDP Permit and Buyer shall have the right to approve, which
approval shall not be unreasonably withheld or delayed, any modifications of the
SDP Permit.
4.1.6 Board Approval. On or before the Due Diligence Expiration Date,
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Buyer shall have obtained approval of this transaction by the Board of Directors
of Buyer.
4.1.7 Other Matters. On or before the Due Diligence Expiration Date,
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Buyer shall have reviewed and approved any other matters Buyer deems relevant to
the Property.
4.1.8 Alps Tenant. Alps Electric (USA), Inc. ("Alps") is currently a
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tenant of a portion of the Property. On or before the Closing Date, Alps shall
have fully vacated the Property and Alps shall cease to be a tenant of the
Property. The date on which Alps has both vacated the Property and ceased to be
a tenant of the Property shall be referred to in this Agreement as the "Alps
Date".
4.2. Right to Terminate. Buyer shall use all due diligence to bring about
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the satisfaction of each of Buyer's conditions precedent set forth above on or
before the date which is specified for each such condition. With respect to
each such condition, Buyer shall give written notice to Seller, on or before the
date specified above for such condition, stating whether such condition is
satisfied, unsatisfied or is waived by Buyer. If any such notice states that a
condition is unsatisfied, then such notice shall state the reasons therefor in
reasonable detail. Buyer's failure to give any notice with respect to a
condition shall be conclusively deemed to mean that such condition is not
satisfied. If Buyer notifies Seller in writing, on or before the date for
satisfaction of such condition, that any condition is unsatisfied, or if any
condition is deemed unsatisfied, then this Agreement shall terminate. If this
Agreement is so terminated, then: (i) the Deposit shall be returned to Buyer
upon Buyer's compliance with the provisions of Section 4.4; and (ii) neither
Seller nor Buyer shall have any further obligations under this Agreement, except
Buyer's obligation to perform the "Continuing Obligations" (as defined in
Section 4.6), and Seller's obligation to perform its "Continuing Obligations"
(as defined in Section 4.6.). If Buyer fails to deliver Buyer's documents and
work product to Seller in compliance with Section 4.4, within ten (10) days
after the termination of this Agreement, then Buyer shall forfeit the Deposit
and Seller shall be entitled to have the Deposit immediately disbursed to
Seller.
4.3. Buyer's Inspection of Property.
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4.3.1. General. Subject to the restrictions, limitations and other
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provisions of this Section 4.3, upon at least one (1) business day's prior
written or verbal notice, Seller shall allow Buyer (and its authorized
representatives and agents) reasonable access to the Property, during business
hours, for the purpose of making examinations, tests, analyses, investigations,
surveys, inquiries and other inspections in connection with Buyer's efforts to
bring about satisfaction of the conditions precedent set forth in Section 4.1.
All of such examinations, tests, analyses, investigations, surveys, inquiries
and other inspections shall be performed by Buyer at Buyer's sole cost and
expense and shall be subject to such reasonable conditions as Seller may impose,
including a requirement that Buyer and its authorized representatives and agents
be accompanied by a representative of Seller while present on the Property.
Buyer shall have no right to perform any borings, samplings, soils tests,
groundwater tests or other physical environmental audit procedures on the
Property without obtaining Seller's prior written consent, which consent shall
not be unreasonably withheld or delayed. In addition, Buyer shall have the
right to contact any governmental agency with respect to the Property, so long
as Buyer provides Seller with prior notice and Seller, at Seller's election,
shall be entitled to have a representative on any phone or other contact made by
Buyer to any such governmental authority and to be present at any meeting by
Buyer with any such governmental authority.
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4.3.2. Confidentiality. Buyer, and its agents, employees, contractors
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and representatives, shall not disclose to any third party (including any
governmental or quasi-governmental authority except as expressly set forth in
Section 4.3.1 above), the results of any examinations, tests, analyses,
investigations, surveys, inquiries or other inspections conducted by, or at the
request of, Buyer on or regarding the Property, except: (i) to the extent that
Buyer is required to do so pursuant to applicable law, provided that, prior to
such disclosure, Buyer shall notify Seller of Buyer's belief that Buyer is
required to disclose such information; and (ii) to those of Buyer's consultants
who require such information in order to perform the services for which they
were retained. Seller, its agents, employees, contractors and representatives
shall not disclose to any third party any and all confidential financial
information obtained about Buyer, except (i) to the extent Seller is required to
do so pursuant to applicable law, provided that, prior to such disclosure,
Seller shall notify Buyer of Seller's belief that Seller is required to disclose
such information; and (ii) to those of Seller's consultants who require such
information in order to perform the services for which they were retained. Each
party shall remain responsible for ensuring the compliance by each party's
respective consultants and professionals with the provisions of this Section
4.3.2. This provision shall survive the Closing or any termination of this
Agreement for a period of twelve (12) months after the termination or Closing.
4.3.3. Indemnity. Buyer shall indemnify, defend, protect and hold
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Seller harmless from and against any and all loss, cost, damage, injury, claim
(including claims of lien for work or labor performed or materials or supplies
furnished), liability or expense (including reasonable attorneys' fees) as a
result of, arising out of, or in any way connected with the exercise of Buyer's
(or its agents', contractors', employees' or authorized representatives') right
of entry pursuant to Section 4.3 or the performance of Buyer's due diligence
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under this Agreement. Buyer shall promptly repair any damage to the Property
caused by its entry onto the Property.
4.4. Buyer's Work Product. Upon termination of this Agreement for any
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reason whatsoever (other than a default by Seller under this Agreement), Buyer
shall promptly deliver to Seller all reports, plans, specifications, studies,
drawings, photographs, models, surveys, test results and other documents or work
product of Buyer, or its consultants, agents, employees and independent
contractors, either received by Buyer from Seller or any third person, or
prepared by or for Buyer, relating to the Property or in any way arising out of
this Agreement. Notwithstanding any other provision of this Agreement to the
contrary, Buyer's delivery to Seller of all such work product shall be a
condition precedent to Buyer's right to obtain disbursement of the Deposit upon
termination of this Agreement.
4.5. Insurance. Before any entry onto the Property under Section 4.3, Buyer
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shall procure and furnish to Seller a certificate of insurance showing that
Buyer has obtained a policy of commercial liability insurance with combined
single limit coverage of $1,000,000.00, naming Buyer as an insured and Seller as
an additional insured, which shall be issued by a responsible insurer approved
by Seller and licensed to conduct insurance business in California. Such
insurance policy shall expressly provide that such insurance may not be canceled
or reduced in scope or coverage without at least thirty (30) days' prior written
notice to Seller.
4.6. "Continuing Obligations". For purposes of this Agreement, the
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"Continuing Obligations" means, collectively, (i) the obligations of Buyer which
are set forth in Sections 4.3, 4.4 and 4.5 (subject to the time limitations
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expressly set forth herein); (ii) Buyer's indemnification contained in this
Agreement, including those contained in Subsection 4.3.3, Section 9.3 and
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Article 12 (subject to the time limitations expressly set forth herein); (iii)
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Buyer's obligation under Section 13.6; and Seller's obligation set forth in
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Section 4.3.2 (subject to the time limitations expressly set forth herein).
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5. SELLER'S CONDITIONS PRECEDENT.
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5.1. Enumeration of Conditions. Seller's obligation to sell the Property to
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Buyer shall be subject to the satisfaction (or waiver by Seller) of each of the
conditions precedent specified below in this Section 5.1.
5.1.1. Buyer's Performance. Buyer's performance of all of its
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obligations under this Agreement as of the applicable dates set forth in this
Agreement.
5.2. Right to Terminate. Seller shall give written notice to Buyer and
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Title Company stating whether such condition is satisfied, unsatisfied or is
waived by Seller. Seller's failure to give such notice shall be conclusively
deemed to mean that such condition is satisfied. If such condition remains
unsatisfied as of the date specified above for such condition, then Seller may
terminate this Agreement by giving written notice to Buyer. In the event of any
such termination, the Deposit shall be paid to Seller, and neither Seller nor
Buyer shall have any further obligations under this Agreement, other than
Buyer's and Seller's obligation to perform their respective Continuing
Obligations.
6. TITLE. Title to the Real Property shall be conveyed from Seller to Buyer
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by grant deed (the "Deed"), subject to: (i) liens to secure payment of real
estate taxes and assessments not delinquent; (ii) applicable zoning and use
laws, ordinances, rules and regulations of any municipality, township, county,
state or other governmental agency or authority; (iii) all matters disclosed by
the Survey or that are actually known to Buyer; (iv) any exceptions or matters
created by Buyer, its agents, employees or representatives; (v) all exceptions
of record which are enumerated on Exhibit B attached to this Agreement (which
are all of the exceptions set forth in Seller's Title Policy, other than
Seller's existing deed of trust); (vi) all Contracts and Reports; and (vii) such
other exceptions as Buyer may approve in writing after the Due Diligence
Expiration Date, and Buyer will be deemed to have approved in writing any such
other exception if it fails to give Seller written notice of its objection
thereto within five (5) business days after Buyer receives written notice of the
same. The foregoing exceptions to title are referred to collectively as the
"Conditions of Title". Conclusive evidence of delivery of title in accordance
with the foregoing shall be the willingness of Title Company to issue to Buyer,
upon payment of its regularly scheduled premiums, its ALTA owner's policy of
title insurance, in the amount of the Purchase Price, showing title to the Real
Property vested of record in Buyer, subject only to the approved Conditions of
Title (and the standard printed exceptions and conditions in the policy of title
insurance), together with the endorsements set forth in Seller's Title Policy
(the "Title Policy").
7. DAMAGE, DESTRUCTION OR TAKING AND OPERATION.
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7.1 Damage and Destruction. If at any time prior to the Closing, Seller
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reasonably determines that the Real Property has been destroyed or damaged by
earthquake, flood or other casualty and that such damage will require more than
$1,000,000.00 to repair (a "Casualty"), or if a proceeding is instituted for the
taking of all or any material portion of the Real Property under the power of
eminent domain (a "Taking"), then Buyer shall have the right by giving written
notice to Seller and Title Company within fifteen (15) days after the date of
receipt of written notice of any such Casualty or Taking, either to: (i)
consummate the purchase of the Property in accordance with this Agreement, in
which event Seller shall assign to Buyer at the Closing (A) any insurance
proceeds payable to Seller on account of such Casualty (excluding rental income
insurance proceeds allocable to the period prior to Closing) or (B) any award
payable to Seller by reason of the Taking (excluding any award for a temporary
taking to the extent allocable to the period prior to Closing), as the case may
be; or (ii) terminate this Agreement effective as of the date such notice of
termination is given. If Buyer fails to give such notice within such 15-day
period, then Buyer shall be deemed to have elected to terminate this Agreement
pursuant to this Article 7. The Closing Date shall be deferred, if necessary,
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to permit Buyer to
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have the 15-day period following receipt of notice of a Casualty or a Taking to
make the election specified hereinabove. If Buyer terminates this Agreement
pursuant to this Article 7, then the Deposit shall be returned to Buyer, and
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neither Seller nor Buyer shall have any further obligations under this
Agreement, except Buyer's obligation to perform the Continuing Obligations.
However, notwithstanding the foregoing, Buyer's delivery of Buyer's work product
to Seller in compliance with Section 4.4 shall be a condition precedent to
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Buyer's right to obtain disbursement of the Deposit upon termination of this
Agreement pursuant to this Article 7. Before Closing, Seller shall continue to
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carry and maintain its current insurance pertaining to the Property, including
the insurance required to be carried by Seller pursuant to Section 9.2 of the
New Lease. In addition to the foregoing, if Seller reasonably determines that
the Real Property has been destroyed or damaged by earthquake, flood or other
casualty and that such damage will require less than $1,000,000.00 to repair,
then at Closing Seller shall assign to Buyer any insurance proceeds payable to
Seller on account of such Casualty (excluding rental income insurance proceeds
allocable to the period prior to Closing).
7.2 Operation of Property. During the period between the Effective Date of
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this Agreement and the earlier to occur of (i) the Closing Date or (ii) the
termination of this Agreement, Seller shall operate the Property in the same
manner in which Seller operated the Property before the date of this Agreement
(such operation obligations not including capital expenditures or expenditures
not incurred in the normal course of business). Seller shall be obligated to
continue to carry the insurance required by Section 9.2 of the New Lease. After
the Effective Date, Seller shall not convey any ownership interest in the
Property and will not enter any agreement which would encumber title to the
Property except as otherwise permitted pursuant to the terms of this Agreement.
8. SELLER'S REPRESENTATIONS AND WARRANTIES.
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8.1. General; Seller's Knowledge. Seller makes the covenants,
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representations and warranties set forth in Sections 8.2.1 through 8.2.9, each
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of which (i) (together with the provisions of Section 7.2) shall survive the
Closing for a period of twelve (12) months regardless of what investigations
Buyer shall have made with respect thereto prior to the Closing (and Seller
shall have no liability to Buyer hereunder after such date if any claim is not
set forth in a lawsuit that is properly filed and served on Seller within such
twelve (12)- month period), (ii) is material and being relied upon by Buyer,
(iii) is true in all respects as of the date hereof, and (iv) shall be true as
of the Closing. As used in this Agreement, the term "Seller's Current Actual
Knowledge" means the current actual knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇ ("Seller's Representatives"), without any obligation of
inquiry, and such term shall not include the knowledge of any other person or
firm, it being understood by Buyer that (i) Seller's Representatives were not
involved in the operation of the Property before Seller's acquisition of the
Property, (ii) Seller's Representatives are not charged with knowledge of any of
the acts or omissions of predecessors in title to the Property or the management
of the Property before Seller's acquisition of the Property, and (iii) Seller's
Current Actual Knowledge shall not apply to, or be construed to include,
information or material which may be in the possession of Seller generally or
incidentally, but of which Seller's Representatives are not actually aware.
8.2. Representations and Warranties. Seller hereby makes the following
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representations and warranties as of the date of this Agreement:
8.2.1. Leases. To Seller's Current Actual Knowledge, attached hereto
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as Exhibit C is a current, accurate list of all of the Leases.
8.2.2. Hazardous Materials; Applicable Laws. To Seller's Current
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Actual Knowledge, except as disclosed by Seller to Buyer on or before the Due
Diligence Expiration Date, and except as disclosed in any
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documents or reports delivered by Seller to Buyer before the Due Diligence
Expiration Date, Seller has not received written notice from any governmental
authority of the need of Seller to take any remedial or corrective action under
any environmental laws with respect to any hazardous materials on, in or under
the Real Property, or that the present use and operation of the Property is in
violation of any laws, including (i) the ADA, (ii) Title 24 of the California
Administrative Code and other similar federal, state and local laws, or (iii)
applicable building codes and any other laws relating to the construction or
design of the improvements on the Property, including fire, safety, handicapped
access or seismic design. As used in this Agreement, "environmental laws" means
all present and future statutes, ordinances, orders, rules and regulations of
all federal, state and local governmental agencies relating to the use,
generation, manufacture, installation, release, discharge, storage,
transportation or disposal of hazardous materials; and "hazardous materials"
means petroleum, asbestos, polychlorinated biphenyls, radioactive materials,
radon gas, underground storage tanks or any chemical, material or substance now
or hereafter defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste" or "toxic substances", or words of similar import,
under any environmental laws.
8.2.3. Condemnation. To Seller's Current Actual Knowledge, Seller has
------------
not received written notice of any pending condemnation or eminent domain
proceedings affecting the Real Property or any part thereof.
8.2.4. Due Authorization. Seller has been duly authorized to execute and
-----------------
perform its obligations under this Agreement. The persons signing this
Agreement on behalf of Seller have the power and authority to do so and to bind
Seller to this Agreement. All the instruments, agreements and other documents
executed by Seller which are to be delivered to Buyer at the Closing are and at
the time of the Closing will be duly authorized, executed and delivered by
Seller.
8.2.5. Non-Foreign Person. Seller is not a foreign person as defined in
------------------
Internal Revenue Code Section 1445(f)(3) and Seller is not subject to
withholding under Section 26131 of the California Revenue and Taxation Code. At
the Closing, Seller shall deliver to Buyer through Escrow a declaration under
penalty of perjury confirming the foregoing statement.
8.2.6. No Official Notices. To Seller's Current Actual Knowledge, except
-------------------
as disclosed by Seller to Buyer on or before the Due Diligence Expiration Date,
and except as disclosed in any documents or reports delivered by Seller to Buyer
before the Due Diligence Expiration Date, Seller has not received any written
notice from any insurance company, the Board of Fire Underwriters or any similar
rating organization requiring or requesting that any work or repairs be done at
or to the Real Property or that the present use and operation of the Property is
in violation of any laws.
8.2.7. No Consents. To Seller's Current Actual Knowledge, no consent to
-----------
the sale and conveyance of the Property by Seller is required to be obtained
from any governmental agency or public administrative body.
8.2.8 No Bankruptcy. Seller has not (i) made a general assignment for
-------------
the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by Seller's creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Seller's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Seller's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
-9-
8.2.9 No Proceedings. To Seller's Current Actual Knowledge, Seller
--------------
has received no written notice of litigation or administrative proceedings
affecting the Property.
8.3. Limitations on Seller's Representations and Warranties. In the event
------------------------------------------------------
of any breach by Seller of any of such covenants, representations or warranties
which is discovered prior to the Due Diligence Expiration Date or the Closing,
Buyer's sole remedy shall be to elect in writing to terminate this Agreement on
or before the Due Diligence Expiration Date or the Closing Date, respectively.
In no event shall Seller be liable for any indirect or consequential damages on
account of Seller's breach of any covenant, representation or warranty contained
in this Agreement or any certificate delivered in connection with this
Agreement; and Seller's total liability to Buyer for any and all breaches of any
covenant, representation or warranty contained in this Agreement or any
certificate delivered in connection with this Agreement shall not exceed
$1,500,000.00, in the aggregate.
9. SELLER'S DISCLAIMER; RELEASE AND INDEMNIFICATION OF SELLER.
-----------------------------------------------------------
9.1. Seller's Disclaimer. Except for the representations and warranties
-------------------
by Seller set forth in Section 8.2, Buyer acknowledges and agrees that the
-----------
sale of the Property to Buyer is made without any warranty or representation of
any kind by Seller, either express or implied, with respect to any aspect,
portion or component of the Property, including: (i) the physical condition,
nature or quality of the Property, including the quality of the soils on and
under the Property and the quality of the labor and materials included in any
buildings or other improvements, fixtures, equipment or personal property
comprising a portion of the Property; (ii) the fitness of the Property for any
particular purpose; (iii) the presence or suspected presence of hazardous
materials on, in, under or about the Property (including the soils and
groundwater on and under the Property); or (iv) existing or proposed
governmental laws or regulations applicable to the Property, or the further
development or change in use thereof, including environmental laws and laws or
regulations dealing with zoning or land use. Buyer further agrees and
acknowledges that, as of the Closing, Buyer shall have made such feasibility
studies, investigations, environmental studies, engineering studies, inquiries
of governmental officials, and all other inquiries and investigations, which
Buyer shall deem necessary to satisfy itself as to the condition, nature and
quality of the Property and as to the suitability of the Property for Buyer's
purposes. Buyer further agrees and acknowledges that, in purchasing the
Property, Buyer shall rely entirely on its own investigation, examination and
inspection of the Property and its analysis and evaluation of the property
documents furnished by Seller to Buyer pursuant to Subsection 4.1.2, and not
----------------
upon any representation or warranty of Seller, or any agent or representative of
Seller, which is not set forth in Section 8.2. THEREFORE, BUYER AGREES THAT, IN
-----------
CONSUMMATING THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, BUYER
SHALL ACQUIRE THE PROPERTY IN ITS THEN CONDITION, "AS IS, WHERE IS" AND WITH ALL
FAULTS, AND, SUBJECT TO SELLER'S REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 8.2, SOLELY IN RELIANCE ON BUYER'S OWN INVESTIGATION, EXAMINATION,
INSPECTION, ANALYSIS AND EVALUATION OF THE PROPERTY. The agreements and
acknowledgments contained in this Section 9.1 constitute a conclusive admission
-----------
that Buyer, as a sophisticated, knowledgeable investor in real property, shall
acquire the Property solely upon its own judgment as to any matter germane to
the Property or to Buyer's contemplated use of the Property, and not upon any
statement, representation or warranty by Seller, or any agent or representative
of Seller, which is not expressly set forth in this Agreement. At the Closing,
upon the request of Seller, Buyer shall execute and deliver to Seller a
certificate of Buyer reaffirming the foregoing.
9.2. Buyer's Release of Seller. Buyer hereby waives, releases and forever
--------------------------
discharges Seller and its officers, directors, employees and agents from any and
all claims, actions, causes of action, demands,
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liabilities, damages, costs, expenses or compensation whatsoever, whether direct
or indirect, known or unknown, foreseeable or unforeseeable, which Buyer may
have as of the Closing or which may arise in the future on account of or in any
way arising out of or connected with the Property, including: (i) the physical
condition, nature or quality of the Property (including the soils and
groundwater on and under the Real Property); (ii) the presence or release in,
under, on or about the Property (including the soils and groundwater on and
under the Real Property) of any hazardous materials; and (iii) the ownership,
management or operation of the Property. At the Closing, upon the request of
Seller, Buyer shall deliver to Seller a certificate of Buyer reaffirming the
foregoing. Buyer hereby waives the protection of California Civil Code Section
1542, which reads as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor."
Buyer's
Initials: _______________________
However, the foregoing provisions of this Section 9.2 shall not serve to release
-----------
Seller from any breach of the express representations and warranties set forth
in Section 8.2.
-----------
9.3. Buyer's Indemnification of Seller. Buyer shall indemnify, defend,
---------------------------------
protect and hold Seller harmless from and against any and all claims, actions,
causes of action, demands, liabilities, damages, costs and expenses (including
reasonable attorneys' fees), whether direct or indirect, known or unknown,
foreseeable or unforeseeable, which may be asserted against or suffered by
Seller at any time after the Closing only on account of the following with
respect to the Property: (i) the physical condition, nature or quality of the
Property (excluding the soils and groundwater on and under the Real Property to
the extent hazardous materials are involved); and (ii) the ownership, management
or operation of the Property, including any claim or demand by any tenant for
the refund or return of any security deposit or other deposit. At the Closing,
upon the request of Seller, Buyer shall deliver to Seller a certificate
reaffirming the foregoing. However, notwithstanding the foregoing provisions of
this Section 9.3, Buyer shall have no obligations to Seller under this Section
----------- -------
9.3 with respect to any claims, actions, causes of action, demands, liabilities,
---
damages, costs or expenses to the extent based upon any fact or circumstance
with respect to which Seller shall have breached an express representation or
warranty contained in Section 8.2. Except as provided by any applicable law,
-----------
Buyer shall not be obligated to indemnify Seller with respect to the presence or
release in, under, on or about the Property (including the soils and groundwater
on and under the Real Property) of any hazardous materials.
9.4. Flood Hazard Zone. Buyer acknowledges that if the Real Property is
-----------------
located in an area which the Secretary of HUD has found to have special flood
hazards, then pursuant to the National Flood Insurance Program, Buyer will be
required to purchase flood insurance in order to obtain any loan secured by the
Real Property from any federally regulated financial institution or a loan
insured or guaranteed by an agency of the United States government. Buyer shall
have sole responsibility to determine whether the Real Property is located in an
area which is subject to the National Flood Insurance Program.
9.5. Seller's Environmental Inquiry. Buyer acknowledges and agrees that
------------------------------
the sole inquiry and investigation Seller has conducted in connection with the
environmental condition of the Property is to obtain the environmental report or
reports that Seller has provided to Buyer, and that, for purposes of California
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Health and Safety Code Section 25359.7, Seller has acted reasonably in solely
relying upon said inquiry and investigation.
9.6. Natural Hazard Disclosure Requirement Compliance. Buyer and Seller
------------------------------------------------
acknowledge that Seller or "Broker" (as hereinafter defined) is required to
disclose if the Property lies within the following natural hazard areas or
zones: (1) a special flood hazard area designated by the Federal Emergency
Management Agency (Cal. Civ. Code Section 1102.17); (2) an area of potential
flooding (Cal. Gov. Code Section 8589.4); (3) a very high fire hazard severity
zone (Cal. Gov. Code Section 51183.5); (4) a wild land area that may contain
substantial forest fire risks and hazards (Pub. Resources Code Section 4136);
(5) an earthquake fault zone (Pub. Resources Code Section 2621.9); or (6) a
seismic hazard zone (Pub. Resources Code Section 2694). Buyer and Seller
acknowledge that they have employed the services of JCP Geologists, Inc., ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇ (which, in such
capacity is herein called "Natural Hazard Expert") to examine the maps and other
information specifically made available to the public by government agencies for
the purpose of enabling each of Seller and Broker to fulfill its disclosure
obligations with respect to the natural hazards referred to in California Civil
Code Section 1102.6c(a) and to report the result of its examination to Buyer and
Seller in writing. The written report prepared by the Natural Hazard Expert
regarding the results of its examination fully and completely discharges Seller
and Broker from their disclosure obligations referred to herein, and, for the
purpose of this Agreement, the provisions of Civil Code Section 1102.4 regarding
the non-liability of each of Seller and Broker for errors or omissions not
within its personal knowledge shall be deemed to apply and the Natural Hazard
Expert shall be deemed to be an expert, dealing with matters within the scope of
its expertise with respect to the examination and written report regarding the
natural hazards referred to above. The obligations of Seller and Broker are
several (and not joint and not joint and several) and, without limitation, in no
event shall Seller have any responsibility for matters not actually known to
Seller.
10. BUYER'S REPRESENTATIONS AND WARRANTIES.
---------------------------------------
10.1. General. Buyer makes the covenants, representations and warranties
-------
set forth in Sections 10.2 and 10.3, each of which (i) shall survive the Closing
for a period of twelve (12) months regardless of what investigations Seller
shall have made with respect thereto prior to the Closing (and Buyer shall have
no liability to Seller hereunder after such date if any claim is not asserted by
written notice from Seller to Buyer within such twelve (12)- month period), (ii)
is material and being relied upon by Buyer, (iii) is true in all respects as of
the date hereof, and (iv) shall be true as of the Closing.
10.2. Organization. If Buyer is not a natural person, Buyer is duly
------------
organized, validly existing and in good standing under the laws of the State of
California.
10.3. Authorization. All the instruments, agreements and other documents
-------------
executed by Buyer which are to be delivered to Seller at the Closing are, and at
the time of Closing will be, duly authorized, executed and delivered by Buyer.
11. CLOSING.
-------
11.1. Closing. The transaction contemplated by this Agreement shall be
-------
consummated through escrow at the office of Title Company on August 15, 2000
(the "Closing Date"); provided, however, that if the Alps Date has not occurred
before August 14, 2000, then Buyer shall have the option (which may be exercised
by delivery of written notice to Seller) either: (i) to terminate this Agreement
and receive a full refund of the Deposit (in which case neither Seller nor Buyer
shall have any further rights or obligations
-12-
under this Agreement, except Buyer's and Seller's obligations to perform their
respective Continuing Obligations), or (ii) to extend the Closing Date to a date
not later than September 12, 2000. For purposes of this Agreement, the term
"Closing" shall mean the consummation of the sale and conveyance of the Property
to Buyer as evidenced by recordation of the Deed.
11.2. Seller's Delivery Into Escrow. Seller shall deliver the following
-----------------------------
items into escrow:
11.2.1. Deed. The Deed, duly executed and acknowledged by Seller,
-----
except that the amount of any transfer tax shall not be shown on the Deed, but
shall be set forth on a separate affidavit or instrument which, after
recordation of the Deed, shall be attached thereto so that the amount of such
transfer tax shall not be of record. The Deed shall be in the form of Exhibit E
---------
attached to this Agreement.
11.2.2 ▇▇▇▇ of Sale. A ▇▇▇▇ of sale ("▇▇▇▇ of Sale") in the form
------------
set forth on Exhibit F, attached to this Agreement conveying the Personal
---------
Property to Buyer;
11.2.3 No Unpaid Liens. An affidavit satisfactory to the Title
---------------
Company stating that there are no unpaid claims for labor or materials furnished
to the Property;
11.2.4 Non-Foreign Person Certificate. An affidavit in the form of
-------------------------------
attached Exhibit D stating that Seller is not a "foreign person" under U.S.C.
---------
Section 1445(f)(3).
11.2.5 Closing Costs. Seller's share of the closing costs (as defined
-------------
in Section 11.6 below), if necessary; and
11.2.6. Other Documents. Such other documents or instruments as may
---------------
be reasonably required to consummate this transaction in accordance with the
terms and conditions herein contained, such as appropriate escrow instructions
to Title Company.
11.3. Buyer's Delivery Into Escrow. Buyer shall deliver the following items
-----------------------------
into escrow:
11.3.1. Cash. Immediately available funds in the following amounts: (i)
-----
the balance of the Purchase Price; (ii) such amount, if any, as is necessary for
Buyer to pay Buyer's share of the closing costs and prorations specified in
Sections 11.5 and 11.6; (iii) the amount of the Reimbursed Costs if paid by
------------- ----
Seller prior to Closing; and (iv) any other amounts required to close escrow in
accordance with the terms of this Agreement.
11.3.2. Other Documents. Such other documents and instruments as may be
----------------
reasonably required in order to consummate this transaction in accordance with
the terms and conditions of this Agreement, such as appropriate escrow
instructions to Title Company.
11.3.3. Evidence of Authorization. Such evidence as shall reasonably
--------------------------
establish that Buyer's execution of this Agreement and performance of its
obligations hereunder have been duly authorized and that the person or persons
executing this Agreement on behalf of Buyer have been duly authorized and
empowered to do so.
11.4. Seller's and Buyer's Joint Delivery Into Escrow. Seller and Buyer
------------------------------------------------
jointly shall deliver the following items into escrow:
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11.4.1. Assignment and Assumption Agreements. A document by which
------------------------------------
Seller assigns to Buyer, and Buyer assumes, the Leases, Contracts, permits and
warranties which will survive the Closing (the "Assignment"). The Assignment
shall be in the form attached to this Agreement as Exhibit D.
---------
11.4.2. Other Documents. Such other documents and instruments as
---------------
may be reasonably required to consummate this transaction in accordance with the
terms and conditions of this Agreement.
11.5. Closing Prorations. At the Closing, all items of income and expense
-------------------
of the Property shall be prorated as provided in this Section 11.5 on the basis
------------
of a 360-day year, actual days elapsed for the month in which the Closing
occurs, as of midnight on the day immediately preceding the Closing Date.
Except as provided in this Section 11.5, income and expenses attributable to the
------------
period prior to the Closing Date shall be for the account of Seller, and income
and expenses attributable to the period on and after the Closing Date shall be
for the account of Buyer. Property taxes and assessments shall be prorated
through escrow, and all other items of income and expense shall be prorated
outside of escrow on the Closing Date by the parties. Without limiting the
generality of the foregoing, the following items shall be prorated through
escrow as described above:
(a) Current rents collected by Seller under the New Lease.
(b) All current real and personal property taxes, non-delinquent bonds or
improvement assessments, general and special, non-delinquent public or
governmental charges or assessments affecting the Property (including current
assessments, liens or encumbrances for sewer, water, drainage or other public
improvements whether completed or commenced on, or prior to, the date of this
Agreement). If the Closing Date occurs before the tax rate or assessment is
fixed, the proration of such taxes and assessments by Title Company shall be
made at the Closing based upon the most recent tax bills available, and adjusted
when the tax rate or assessment is fixed by Seller or Buyer promptly delivering
to the other the amount determined to be due.
(c) Water and sewer charges on the basis of the fiscal year for which
assessed (if these are not prorated as part of a tax ▇▇▇▇), but if there are
water meters on the Real Property, Seller, to the extent it is able, shall
furnish a reading effective the Closing Date, or if not feasible to do so, to a
date not more than thirty (30) days prior to the Closing Date, and the unfixed
meter charges based thereon for the intervening period shall be apportioned on
the basis of such last reading. Upon the taking of a subsequent actual reading,
such apportionment shall be readjusted and Seller or Buyer, as the case may be,
shall promptly deliver to the other the amount determined to be due upon such
readjustment. If Seller is unable to furnish such prior reading, any reading
subsequent to the Closing Date shall be apportioned on a per diem basis from the
date of the reading immediately prior thereto and Seller shall pay the
proportionate charges due up to the Closing Date. Unpaid water meter bills that
are the obligations of tenants under their respective Leases and that are billed
directly to such tenants shall not be adjusted.
(d) Amounts paid or payable in respect of the Contracts which Buyer
assumes at the Closing.
(e) Electricity, gas, telephone and other utilities and HVAC costs,
expenses and income, except to the extent that tenants pay such costs directly
to the supplier of such services.
(f) In addition to the foregoing, at Closing, Buyer shall pay to Seller an
amount equal to the Reimbursed Costs if paid by Seller prior to Closing.
-14-
11.6. Closing Costs. Seller shall pay the following closing costs: (i)
-------------
all fees and costs for releasing all encumbrances, liens and security interests
of record which are not Conditions of Title; (ii) the premium for the CLTA
portion of Buyer's policy of title insurance; (iii) county documentary or other
transfer taxes payable upon recordation of the Deed; and (iv) the cost of
recording the Deed. Buyer shall pay the following closing costs: (i) the premium
for Buyer's policy of title insurance in excess of the cost of a CLTA policy,
plus the cost of all endorsements to such policy; (ii) any and all costs, fees,
title insurance premiums and other charges payable in connection with any
financing obtained by Buyer to acquire the Property, including all escrow fees
relating to the funding and/or recordation of such financing; and (iii) all
escrow fees (excluding the cost to record the Deed). Each party shall pay one-
half of any escrow cancellation fee charged by Title Company in connection with
the purchase and sale of the Property in accordance with this Agreement and one-
half of any city transfer tax. All other closing costs shall be paid by the
parties in accordance with the custom then prevailing in the County in which the
Real Property is located.
11.7. INTENTIONALLY OMITTED.
----------------------
11.8. Possession. Seller shall deliver exclusive possession of the
----------
Propertycto Buyer at the Closing.
11.9. Closing Procedure. Title Company shall close escrow when it is in a
-----------------
position to: (i) pay to Seller, in immediately available funds, the amount of
the Purchase Price, as such amount may be increased or decreased as a result of
the allocation of the closing costs and prorations as specified in Sections 11.5
-------------
and 11.6 and Seller's obligations with respect to security deposits as specified
----
in Section 11.7; and (ii) issue to Buyer the policy of title insurance referred
------------
to in Article 6.
---------
11.10. Escrow. Within three (3) business days after the Effective Date,
------
Buyer and Seller shall deposit an executed counterpart of this Agreement with
the Title Company and this Agreement shall serve as instructions to the Title
Company for consummation of the purchase and sale contemplated hereby. Seller
and Buyer shall execute such supplemental escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement, provided such supplemental escrow instructions are not in conflict
with this Agreement. In the event of any conflict between the provisions of
this Agreement and any supplementary escrow instructions signed by Buyer and
Seller, the terms of this Agreement shall control.
11.11. Compliance. The Title Company shall comply with all applicable
----------
federal, state and local reporting and withholding requirements relating to the
close of the transactions contemplated herein. Without limiting the generality
of the foregoing, to the extent the transactions contemplated by this Agreement
involve a real estate transaction within the purview of Section 6045 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), Title
Company shall have sole responsibility to comply with the requirements of
Section 6045 of the Internal Revenue Code (and any similar requirements imposed
by state or local law). For purposes of this Section 11.11, Seller's tax
identification number is ▇▇-▇▇▇▇▇▇▇. Title Company shall hold Buyer, Seller and
their counsel free and harmless from and against any and all liability, claims,
demands, damages and costs, including reasonable attorney's fees and other
litigation expenses, arising or resulting from the failure or refusal of Title
Company to comply with such reporting requirements.
12. BROKERS. Seller and Buyer each warrant and represent to the other that no
-------
person, firm or entity other than Cornish & ▇▇▇▇▇ Commercial ("Broker"), who or
which has been retained by Buyer and Seller, is in a position to claim a real
estate brokerage commission, due diligence fee or finder's fee as a procuring
cause of this transaction based upon contacts with such party or the Property,
and each party shall indemnify, defend, protect and hold the other party
harmless from and against any and all claims, actions, causes of action,
-15-
demands, liabilities, damages, costs and expenses (including attorneys' fees)
arising as a result of a breach of the foregoing warranty and representation.
Pursuant to a separate agreement, if and only if close of escrow occurs pursuant
to this Agreement, Seller shall pay all commissions and fees owing to Broker.
Seller hereby discloses to Buyer that Seller is a licensed California real
estate broker.
13. MISCELLANEOUS.
--------------
13.1. Notices. All notices, demands or other communications of any type
-------
given by either party to the other or to Title Company, whether required by this
Agreement or in any way related to this transaction, shall be in writing and
delivered: (i) by hand or Federal Express or similar courier service; or (ii) by
United States Mail, as a certified item, return receipt requested, and deposited
in a Post Office or other depository under the care or custody of the United
States Postal Service, with proper postage affixed; (iii) or by facsimile, with
a hard copy to be delivered by either of the methods described in subsections
(i) or (ii) above. Each notice to a party shall be addressed as follows:
To Seller: ▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
To Buyer: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇. ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice delivered by hand or Federal Express or similar courier service shall
be deemed to be delivered when actual delivery is made. Any notice deposited in
the United States Mail in the manner required above shall be deemed to be
delivered three (3) calendar days after the date of such deposit, and any time
periods provided for herein during which a party may act shall not commence
until such notice is deemed to be so delivered. Either party hereto may change
its address by notice given as provided herein to the other party and Title
Company.
13.2. Survival of Provisions. Subject to the express time limitations set
----------------------
forth in this Agreement, each representation, warranty, covenant or agreement
contained in this Agreement (including Buyer's obligations pursuant to
Subsection 4.3.3, Section 9.3 and Article 12) shall survive and be binding and
---------------- ------------ ----------
enforceable following the Closing and shall not be deemed to be merged into, or
waived by delivery or recordation of, the Deed or any other instruments
delivered at the Closing.
13.3. Rules of Construction. Where required for proper interpretation,
---------------------
words in the singular shall include the plural; the masculine gender shall
include the neuter and the feminine, and vice versa. The headings of the
Articles, Sections, Subsections and paragraphs contained in this Agreement are
included only for convenience of reference and shall be disregarded in the
construction and interpretation of this Agreement. References in this Agreement
to Articles, Sections, Subsections and paragraphs are references to the
Articles, Sections, Subsections and paragraphs contained in this Agreement.
Each reference in this Agreement to an Article shall be deemed a reference to
all Sections and Subsections contained within such Article; each reference to a
Section shall be deemed a reference to all Subsections contained within such
Section. This
-16-
Agreement has been fully negotiated at arms' length between the parties, after
advice by counsel and other representatives chosen by the parties, and the
parties are fully informed with respect thereto. No party shall be deemed the
scrivener of this Agreement and, accordingly, the provisions of this Agreement
shall be construed as a whole according to their common meaning and not strictly
for or against any party. Use in this Agreement of the words "including" or
"such as", or words of similar import, following any general term, statement or
matter shall not be construed to limit such term, statement or matter to the
enumerated items, whether or not language of non-limitation (such as "without
limitation" or "but not limited to") are used with reference thereto, but rather
shall refer to all items or matters that could reasonably fall within the
broadest scope of such term, statement or matter.
13.4. Amendment; Waivers. This Agreement may not be modified or amended
------------------
except by an agreement in writing signed by the parties hereto. A party may
waive any of the conditions contained herein or any of the obligations of the
other party hereunder, but any such waiver shall be effective only if in writing
and signed by the party waiving such conditions or obligations.
13.5. Time of Essence. Time is of the essence of this Agreement and each
---------------
provision hereof.
13.6. Attorneys' Fees. If either party brings an action or proceeding at
---------------
law or in equity to interpret or enforce this Agreement or any provisions
contained herein, or to seek damages or other redress for a breach, the
prevailing party shall be entitled to recover, in addition to all other remedies
or damages, reasonable attorneys' fees and court costs incurred in such action
or proceeding.
13.7. Governing Law. This Agreement shall be construed and interpreted in
-------------
accordance with the laws of the State of California.
13.8. Entire Agreement. This Agreement, including the exhibits hereto,
----------------
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings of the parties in connection therewith. No representation,
warranty, covenant, agreement or condition not expressed in this Agreement shall
be binding upon the parties hereto or shall affect or be effective to interpret,
change or restrict the provisions of this Agreement.
13.9. Assignment; Successors and Assigns. Buyer shall have no right to
----------------------------------
assign this Agreement or any of Buyer's rights hereunder without first having
obtained Seller's prior written consent to such assignment, which Seller may
withhold in its sole and absolute discretion. Subject to the immediately
preceding sentence, this Agreement, and the terms, covenants and conditions
herein contained, shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs and assigns. In no event shall an
assignment by Buyer of this Agreement or any of Buyer's rights hereunder release
Buyer from its obligations under this Agreement. Notwithstanding anything to
the contrary contained in this Agreement, Buyer shall have the right to assign
this Agreement to a third party entity formed for the purpose of effecting an
off-balance sheet financing for the purchase of the Property and to receive
title to the Property. Notwithstanding anything to the contrary contained in
this Agreement, Seller shall have the right to assign an undivided interest in
this Agreement to a Farallon Entity, so long as any such assignment does not
limit any of the obligations of Seller under this Agreement.
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13.10. Exhibits. Each exhibit to which reference is made in this Agreement
--------
is deemed incorporated into this Agreement in its entirety by such reference.
The exhibits to this Agreement are the following:
Exhibit A Legal Description of Real Property
Exhibit B Title Exceptions Indicated in Seller's Title Policy
Exhibit C Lease Information
Exhibit D Form of Assignment
Exhibit E Deed
Exhibit F ▇▇▇▇ of Sale
Exhibit G SDP Permit
13.11. Joint and Several Obligations. If more than one person or entity is
-----------------------------
included within the party designated hereinabove as Buyer, then each of the
obligations imposed upon such party under this Agreement shall be the joint and
several obligations of each of such persons or entities.
13.12. Definition of Business Day. For purposes of this Agreement, the
---------------------------
term "business day" shall mean Monday through Friday, inclusive, but excluding
any day which is recognized as a legal holiday by the State of California or
the United States.
13.13. Seller's Offer. Buyer acknowledges and agrees that Seller's
--------------
execution and delivery of this Agreement constitutes an offer by Seller to sell
the Property to Buyer on the terms and conditions set forth in this Agreement.
13.14 Counterparts. This Agreement may be executed in counterparts,
------------
each of which when taken together as a whole shall constitute one complete
document.
14. Exchange. At the option of either party, such party may elect to
--------
consummate the transaction hereunder in whole or in part as a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended. If
either party (the "Exchanging Party") so elects, the other party (the
"Cooperating Party") shall cooperate with the Exchanging Party, executing such
documents and taking such action as may be reasonably necessary in order to
effectuate this transaction as a like-kind exchange; provided, however, that (i)
the Cooperating Party's cooperation hereunder shall be without cost, expense or
liability to the Cooperating Party of any kind or character, including, without
limitation, any attorneys' fees, costs or expense incurred in connection with
the review or preparation of documentation in order to effectuate such like-kind
exchange, and the Cooperating Party shall have no obligation to take title to
any real property; (ii) the Exchanging Party shall assume all risks in
connection with the designation, selection and setting of terms of the purchase
or sale of any exchange property; (iii) the Exchanging Party shall bear all
costs and expenses in connection with any such exchange transaction in excess of
the costs and expenses which would have otherwise been incurred in acquiring or
selling the Property by means of a straight purchase, so that the net effect to
the Cooperating Party shall be identical to that which would have resulted had
this Agreement closed on a purchase and sale; (iv) any documents to effectuate
such exchange transaction are consistent with the terms and conditions contained
in this Agreement; and (v) the Exchanging Party shall indemnify, defend and hold
the Cooperating Party harmless from any and all claims, demands, penalties,
loss, causes of action, suits, risks, liability, costs or expenses of any kind
or nature (including, without limitation, reasonable attorneys' fees) which the
Cooperating Party may incur or sustain, directly or indirectly, related to or in
connection with, or arising out of, the consummation of this transaction as a
like-kind exchange as contemplated hereunder.
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15. Damages Against Seller. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
----------------------
IN THE EVENT THAT SELLER FAILS TO PERFORM ALL OF SELLER'S OBLIGATIONS UNDER THIS
AGREEMENT AND BUYER PERFORMS ALL OF ITS OBLIGATIONS AND TENDERS PERFORMANCE,
INCLUDING THE OBLIGATION TO CONSUMMATE THIS TRANSACTION, THEN BUYER MAY MAKE
WRITTEN DEMAND TO SELLER FOR PERFORMANCE OF THIS AGREEMENT. IF SELLER FAILS TO
COMPLY WITH BUYER'S WRITTEN DEMAND WITHIN TEN (10) DAYS AFTER RECEIPT OF SUCH
WRITTEN DEMAND FOR PERFORMANCE, BUYER SHALL HAVE THE EXCLUSIVE RIGHT TO (I)
WAIVE SUCH DEFAULT, OR (II) SEEK SPECIFIC PERFORMANCE OF SELLER'S OBLIGATIONS
UNDER THIS AGREEMENT. SELLER AGREES THAT THE PROPERTY IS UNIQUE AND THAT
DAMAGES FOR FAILURE BY SELLER TO CONSUMMATE THIS TRANSACTION WILL BE
IMPRACTICABLE AND EXTREMELY DIFFICULT TO DETERMINE. THEREFORE, IN THE EVENT
THAT SELLER FAILS OR REFUSES TO CONSUMMATE THIS TRANSACTION AND BUYER SEEKS
SPECIFIC PERFORMANCE, SELLER SPECIFICALLY AGREES THAT THE REMEDY OF SPECIFIC
PERFORMANCE IS AN APPROPRIATE REMEDY FOR BUYER, AND SELLER WAIVES AND AGREES NOT
TO ASSERT ANY CLAIM OR DEFENSE THAT SPECIFIC PERFORMANCE IS NOT AN APPROPRIATE
REMEDY FOR BUYER. NOTHING IN THIS ARTICLE SHALL BE DEEMED A WAIVER OF BUYER'S
RIGHT TO SEEK DAMAGES AGAINST SELLER TO THE EXTENT PERMITTED BY THIS AGREEMENT.
__________________________ _______________________
Buyer's Initials Seller's Initials
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16. Termination of New Lease. Upon the Closing the New Lease shall terminate
------------------------
and be of no further force and effect, and Seller shall return to Buyer through
escrow on the Closing Date the Letter of Credit delivered by Buyer to Seller
pursuant to Section 3.6 of the Lease.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below.
SELLER:
TMG NORTH FIRST ASSOCIATES, L.P.,
a Delaware limited partnership
By: TMG NORTH FIRST LLC,
a California limited liability company
Its: General Partner
By: THE ▇▇▇▇▇▇ GROUP OF COMPANIES, INC.,
a California corporation,
Its: Managing Member
By:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
Date: __________________________
BUYER:
NetIQ Corporation,
a Delaware corporation
By: ____________________________
____________________________
(typed or printed name)
Its: ___________________________
Date: __________________________
-20-
EXHIBIT A
---------
LEGAL DESCRIPTION OF THE REAL PROPERTY:
(see attached)
-21-
EXHIBIT B
---------
(see attached exceptions)
-22-
EXHIBIT C
---------
1. The New Lease.
2. Lease dated March 28, 2000 between Seller, as landlord, and Alps Electric
(USA), Inc., as tenant.
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EXHIBIT D
---------
ASSIGNMENT OF CONTRACTS AND OTHER RIGHTS
----------------------------------------
THIS ASSIGNMENT OF CONTRACTS AND OTHER RIGHTS ("Assignment") is dated and
effective as of this _____ day of _____________, 2000, and is made by and
between ___________________ ("Assignor"), and __________________________, a
__________________________ ("Assignee").
RECITALS
--------
This Assignment is made with reference to the following facts:
A. Concurrently with this Assignment, Assignor is selling to Assignee, and
Assignee is purchasing from Assignor, that real property and related
improvements, fixtures and personal property comprising that certain Building
commonly known as ______________ Street, located in ______________ County,
California (the "Property").
B. In connection with such purchase and sale, Assignor desires to assign
and delegate to Assignee, and Assignee desires to assume, all of Assignor's
right, title, interest, duties and obligations in, to and under various
contracts and other rights pertaining to the Property and its operation.
NOW, THEREFORE, in consideration of the purchase price paid by Assignee to
Assignor for the Property and for the sum of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee agree as follows:
1. Assignment of Contracts. Assignor hereby assigns and delegates to
-----------------------
Assignee, and Assignee hereby assumes, all of Assignor's right, title, interest,
duties and obligations in, to and under all of those contracts listed in Exhibit
-------
A attached hereto.
-
2. Assignment of Permits. Assignor hereby assigns and delegates to
---------------------
Assignee, and Assignee hereby assumes, all of Assignor's right, title, interest,
duties and obligations in, to and under all of those permits listed in Exhibit B
---------
attached hereto.
3. Assignment of Warranties. Assignor hereby assigns and delegates to
------------------------
Assignee, and Assignee hereby assumes, all of Assignor's right, title, interest,
duties and obligations in, to and under those warranties listed in Exhibit C
---------
attached hereto.
4. Attorneys' Fees. In the event any dispute between the parties hereto
---------------
should result in litigation, the prevailing party shall be reimbursed for all
reasonable costs in connection thereto, reasonable attorneys fees.
5. Successors and Assigns. The terms of this Assignment of Contracts and
----------------------
Other Rights shall bind and inure to the benefit of the parties hereto and their
respective heirs, legal representatives and successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
date first above written.
ASSIGNOR:
ASSIGNEE:
-24-
EXHIBIT E
---------
Recorded at the Request of and
When Recorded, Return and
Mail Tax Statements to:
----------------------------------------------
GRANT DEED
For valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ____________________ ("Grantor") hereby grants to
___________________________________ ("Grantee") that certain real property
located in _________________, California, more particularly described in Exhibit
A attached hereto and incorporated herein by this reference ("Property").
The conveyance by Grantor to Grantee pursuant to this Grant Deed is subject
to: (i) a lien securing payment of real estate taxes and assessments; (ii)
applicable zoning and use laws, ordinances, rules and regulations of any
municipality, township, county, state or other governmental agency or authority;
(iii) all matters that would be disclosed by a physical inspection or survey of
the Property or that are actually known to Grantee; and (iv) all covenants,
conditions, easements, restrictions, liens, encumbrances and other exceptions of
record.
IN WITNESS WHEREOF, Grantor has executed this Grant Deed this _____ day of ____,
2000.
"Grantor"
By: ____________________________
Its: ___________________________
By: ____________________________
Its: ___________________________
-25-
EXHIBIT F
---------
▇▇▇▇ OF SALE
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
undersigned, ____________ ("Seller") does on the date hereof, grant, convey,
transfer, assign, bargain, sell, deliver and set over unto _____________, its
successors and assigns ("Buyer") forever, all of the Seller's right, title, and
interest in and to the following personal property located in and upon and used
in connection with the operation of all the improvements ("Improvements") on the
land located in _____________, California, generally known as
__________________, as more particularly described on Exhibit A attached hereto
---------
(the "Land"): (a) all appliances, parts, instruments, equipment, personal
property, appurtenances, accessories, furnishings, fixtures and other property
owned by Seller and incorporated or installed in or on and used in connection
with the operation of the Improvements or attached to the Land and including
without limitation any reports, plans, renderings, permits, approvals, and maps
related to the Improvements or Land, (collectively, the "Personal Property"),
and (b) an undivided interest in all warranties, guaranties and indemnities,
whether those warranties, guaranties and indemnities are express or implied, and
all similar rights which Seller may have against any manufacturer, supplier,
seller, engineer, contractor or builder, in respect of the Personal Property, or
any portion of the Personal Property.
SELLER MAKES NO WARRANTIES WHATSOEVER, INCLUDING WITHOUT LIMITATION,
WARRANTIES OF CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS ▇▇▇▇ OF SALE, SELLER
REPRESENTS AND WARRANTS FOR THE BENEFIT OF BUYER THAT SELLER IS CONVEYING TITLE
TO THE PERSONAL PROPERTY TO BUYER FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES.
This ▇▇▇▇ of Sale shall in all respects be governed by, and construed in
accordance with the laws of the State of California, including all matters of
construction, validity and performance. In the event of any litigation
involving the parties arising out of this ▇▇▇▇ of Sale, the prevailing party
shall be entitled to recover from the other party such attorneys' fees and costs
as may reasonably be incurred, as awarded by the court hearing the matter.
IN WITNESS WHEREOF, Seller has caused this ▇▇▇▇ of Sale to be duly executed
and delivered on the day and year first above written.
By: ___________________________
Its ____________________________
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EXHIBIT G
---------
SDP PERMIT
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