California-Chatsworth-21411 Prairie Street Purchase and Sale Agreement - WHLW Real Estate LP, Natrol Real Estate Inc. and Natrol Inc.
PURCHASE AND SALE AGREEMENT
BETWEEN
WHLW REAL ESTATE LIMITED PARTNERSHIP
AS SELLER,
NATROL REAL ESTATE, INC.
AS PURCHASER
AND
NATROL, INC.
AS TENANT
DATED: DECEMBER 22, 1998
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TABLE OF CONTENTS
Page
Section 1. AGREEMENT OF PURCHASE AND SALE . . . . . . . . . . . . 1
Section 2. THE PURCHASE PRICE . . . . . . . . . . . . . . . . . . 2
Section 3. INSPECTION PERIOD; CERTAIN TERMINATION PROVISIONS . . 3
Section 4. TITLE . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5. CLOSING DATE . . . . . . . . . . . . . . . . . . . . . 6
Section 6. "AS IS, WHERE IS AND WITH ALL FAULTS" . . . . . . . . 7
Section 7. SATISFACTION OF LIENS . . . . . . . . . . . . . . . . 10
Section 8. VIOLATIONS . . . . . . . . . . . . . . . . . . . . . . 10
Section 9. REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . 10
Section 10. OPERATION OF PROPERTY TO CLOSING . . . . . . . . . . . 13
Section 11. CLOSING DOCUMENTS . . . . . . . . . . . . . . . . . . 14
Section 12. PRORATIONS AND COSTS . . . . . . . . . . . . . . . . . 15
Section 13. BROKERAGE . . . . . . . . . . . . . . . . . . . . . . 18
Section 14. NOTICES . . . . . . . . . . . . . . . . . . . . . . . 18
Section 15. DAMAGE OR DESTRUCTION PRIOR TO CLOSING AND
CONDEMNATION . . . . . . . . . . . . . . . . . . . . . 19
Section 16. REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . 19
Section 17. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 20
Section 18. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . 22
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EXHIBITS
Page
EXHIBIT A - Description of Land . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B - Assignment and Assumption of Leases . . . . . . . . . . B-1
EXHIBIT C - Bill of Sale . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D - Assignment of Warranties, Permits, Contracts and
General Intangibles . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E - Purchaser's AS-IS Certificate . . . . . . . . . . . . . E-1
EXHIBIT F - Natural Hazard Disclosure Statement . . . . . . . . . . F-1
EXHIBIT G - Grant Deed . . . . . . . . . . . . . . . . . . . . . . G-1
SCHEDULES
SCHEDULE 1 - Disclosure Items . . . . . . . . . . . . . . . . . . 1
SCHEDULE 1.3 - Personal Property . . . . . . . . . . . . . . . . . 1
SCHEDULE 1.5 - Leases and Related Matters . . . . . . . . . . . . . 1
SCHEDULE 1.7 - Property Contracts . . . . . . . . . . . . . . . . . 1
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PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT ("Agreement") made this 22nd day of
December, 1998 between the Seller identified as such on the execution page
hereof ("Seller"), the Purchaser identified as such on the execution page
hereof ("Purchaser") and, for the specific purposes specified herein, Natrol,
Inc., a California corporation (the "Tenant").
W I T N E S S E T H :
WHEREAS, Purchaser desires to acquire and Seller desires to sell
all of Seller's right, title and interest in and to the office building more
particularly described on Exhibit A attached hereto.
NOW, THEREFORE, in consideration of Ten and no/100 ($10.00) Dollars
and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, and the mutual covenants and undertakings of the
parties set forth herein, the Seller and Purchaser agree as follows:
Section 1. AGREEMENT OF PURCHASE AND SALE. Seller hereby agrees to
sell and convey and Purchaser agrees to purchase on the terms and conditions
herein set forth, all of Seller's right, title and interest in and to the
following:
1.1 The fee simple estate in and to the land described in
EXHIBIT A attached hereto (the "Land") together with the office building and
all other improvements located thereon ("Improvements"), together with all
air rights, water rights, mineral rights, rights of way, easements,
appurtenances and hereditaments appertaining thereto. The Land and
Improvements are herein referred to as the "Property";
1.2 All machinery, apparatus, equipment, fittings and fixtures
in or on the Property or which are attached thereto but excluding any such
items to the extent owned by the Tenant or other third parties ("Fixtures");
1.3 All of the personal property located in or on the Property
including, without limitation, the property listed on SCHEDULE 1.3 attached
hereto but specifically excluding the personal property in Seller's
management office on the Property and the personal property owned by Tenant
("Personal Property");
1.4 All rights, if any, to general intangibles relating to the
Property (including, without limitation, any name or trade name used in
connection with the Improvements), but excluding the names or tradenames
Lincoln Property Company, Legacy Partners, Whitehall Street Real Estate
Limited Partnership, Lincoln-Whitehall, Lincoln-
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Whitehall Pacific, WHLW Real Estate Limited Partnership ("WHLW") or any
abbreviations or derivations of any of the foregoing and related names and
proprietary computer equipment, software and systems);
1.5 The interest of Seller, as landlord, in the occupancy
leasehold estate created by the certain lease, tenancy and rental agreement
and all amendments thereto or assignments thereof that are described in the
Schedule of Leases attached hereto as Schedule 1.5 (hereto collectively
referred to as the "Lease");
1.6 All assignable warranties and guaranties, if any, issued in
connection with the Property (collectively, the "Assignable Warranties");
1.7 Any transferable consents, authorizations, variances or
waivers, licenses, permits and approvals from any governmental or
quasi-governmental agency, department, board, commission, bureau or other
entity or instrumentality relating to the Property (collectively, the
"Permits"); and
1.8 All written agreements (other than the Lease and the
Permitted Exceptions as hereinbelow defined and the management and leasing
agreement with Legacy Partners Commercial, Inc. (formerly known as Lincoln
Property Company N.C., Inc. and LPC MS, Inc.) which shall be cancelled at
Closing at no cost to Purchaser), to which Seller is a party and which affect
the Property ("Contracts"), a schedule of which is attached hereto as
SCHEDULE 1.7.
Except as herein otherwise specifically provided, it is intended
that Seller shall transfer to Purchaser all of Seller's right, title and
interest of every kind or nature in the Property, the Fixtures, the Lease,
the Personal Property, the Assignable Warranties, the Permits, Contracts and
all other interests of Seller in and to the Property (collectively, the
"Project").
Section 2. THE PURCHASE PRICE. The purchase price (the "Purchase
Price") for the Project is Five Million Two Hundred-Fifty Thousand Dollars
($5,250,000) to be paid as follows:
2.1 One Hundred Thousand Dollars ($100,000) (the "Deposit")
shall be paid by Purchaser on the same day as the executive hereof, which
amount shall, subject to collection, be held in escrow by Fidelity National
Title Insurance Company (hereinafter referred to as "Escrow Agent" or "Title
Insurer"). The Deposit shall be held in an interest bearing account
reasonably acceptable to the parties and all interest on the Deposit shall
become part of the Deposit. If the purchase and sale of the Project is
consummated in accordance with the terms and provisions of this Agreement,
then the Deposit shall be paid to Seller at Closing and credited against the
Purchase Price. In all other events, the Deposit shall be disposed of by the
Escrow Agent as provided herein.
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2.2 The balance of the Purchase Price shall be paid on
Closing, plus or minus prorations and adjustments to be made pursuant to this
Agreement, in good immediately available United States funds. The balance of
the Purchase Price shall be wire transferred into escrow and Escrow Agent
shall receive confirmation of receipt thereof no later than 9:00 a.m.
(Pacific Time) on the date of Closing.
Section 3. INSPECTION PERIOD: CERTAIN TERMINATION PROVISIONS
3.1 Purchaser acknowledges that it has had, prior to the date
hereof, the opportunity to perform its due diligence investigations with
respect to the Project, which due diligence has included, without limitation
(a) all investigations relating to the physical characteristics of the
Property including, without limitation, all engineering, structural and
environmental inspections and assessments, and (b) reviews of all of the
files relating to the Project, the books and records of Seller relating to
the operation of the Project and all other documents, instruments and written
information in Seller's possession relating to the Project (collectively, the
"Due Diligence Materials") except, however, appraisals, internal memos
dealing with the economies of the Project, and other information which is
privileged, which privileged information would not adversely affect
Purchaser's operation or ownership of the Property subsequent to Closing. The
Purchaser acknowledges that prior to or simultaneously with execution hereof,
Seller has arranged to deliver to Purchaser the Due Diligence Materials, the
Contracts, a preliminary title report and certain other documents relating to
the Project.
3.2 Any due diligence conducted by Purchaser, whether prior to
or after the execution and delivery of this Agreement, shall be at the sole
cost and expense of the Purchaser. Purchaser shall be fully responsible to
Seller for all of the acts and/or omissions of Purchaser, its employees,
agents and representatives on or affecting the Project in the course of any
such inspections or assessments. In connection with any such due diligence
activities, whether conducted prior to or after the date of this Agreement,
Purchaser (i) shall indemnify, defend and hold Seller harmless from and
against all costs, expenses, losses, claims, damages and/or liabilities
relating to any physical damage or personal injury or death resulting from
Purchaser's inspection of the Property, provided Purchaser shall not be
liable to Seller solely as a result of the discovery by Purchaser of a
preexisting condition on the Property; (ii) shall promptly repair any damage
resulting from any such inspections; (iii) shall fully comply with all laws,
ordinances, rules and regulations in connection with such inspections; (iv)
shall conduct its activities in a manner to minimize any disturbance to
Seller, its employees and others; (v) shall not contact any governmental
agencies without the prior written consent of Seller (which consent shall not
be unreasonably withheld or delayed) and shall permit a representative of
Seller to accompany Purchaser on any interviews with governmental agencies;
(vi) shall not permit any inspections, investigations or other due diligence
activities to result in any liens, judgements or other encumbrances being
filed against the Property and shall, at its sole cost and expense, promptly
discharge of record any such liens or encumbrances that are so filed or
recorded; (vii) shall not permit any borings,
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drillings or samplings to be done on or at the Property without the prior
written consent of Seller; (viii) shall promptly following the termination of
this Agreement, provide Seller with copies of inspection reports and studies
prepared by third parties in connection with Purchaser's inspection and due
diligence, provided Purchaser makes no warranty or representation as to the
accuracy or thoroughness of the reports or studies and Seller shall not be
entitled to rely thereon; (ix) shall maintain, with insurance companies
satisfactory to Seller, a policy of comprehensive general public liability
insurance, with a broad form contractual liability endorsement covering
Purchaser's indemnification obligations hereunder, and with a combined single
limit of not less than $1,000,000 per occurrence for bodily injury and
property damage, automobile liability coverage including owned and hired
vehicles with a combined single limit of $1,000,000 per occurrence for bodily
injury and property damage, and an excess umbrella liability policy for
bodily injury and property damage in the amount of $5,000,000 insuring Seller
and its affiliates as additional insureds (certificates of which shall be
given to Seller prior to the first entry by Purchaser on the Property), all
of which insurance shall be written on an "occurrence form"; and (x) shall
return to Seller all materials with respect to the Property provided to
Purchaser by Seller if Purchaser fails to acquire the Property for any
reason. The provisions of this paragraph shall survive the termination of
this Agreement.
3.3 In the event that this Agreement terminates pursuant to
any other Section of this Agreement which refers to this Section 3.3, (a)
Purchaser shall receive a full refund of the Deposit, together with all
interests actually earned thereon and (b) except for obligations that this
Agreement expressly states survive termination, neither party shall have any
further rights or claims or liabilities towards the other.
Section 4. TITLE
4.1 Purchaser shall accept title to the Property if Title
Insurer (as hereinafter defined) will insure the Property subject only to the
Permitted Exceptions (as hereinafter defined).
4.1.1 Seller has ordered a preliminary title report ("Title
Report") to be issued by the Title Insurer and Seller has delivered to
Purchaser the Title Report. Purchaser has ordered a survey or a survey update
of the Property from a survey or licensed in California (such survey or
survey update being herein referred to as the "Survey") and shall use its
best efforts to deliver a copy thereof which shall be certified to the Title
Insurer, to Purchaser and to Seller on or prior to the second Business Day
following the execution and delivery of this Agreement. All exceptions to
title and other matters appearing on the Title Report or the Survey (other
than any such exceptions described in the second sentence of section 4.1.2
hereof) shall constitute "Permitted Exceptions" for purposes of this
Agreement. The Purchaser shall pay the entire cost of the Survey. In the
event the Title Insurer amends or updates the Title Report ("Title Report
Update") after the date on which the Purchaser posts the Deposit, Purchaser
shall furnish Seller with a statement of objections, if any, to the title
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to the Property to any matter first raised in the Title Report Update
("Objections") within three (3) business days after its receipt of the Title
Report Update ("Title Update Review Period"). Should Purchaser fail so to
timely notify Seller of any such Objections to title to the Property which
are first disclosed in a Title Report Update, Purchaser shall be deemed to
have agreed to accept title subject to all matters of record and all matters
shown on the Survey. All title matters and exceptions (i) arising out of the
Lease including, without limitation, new Leases or amendments to Leases
entered into pursuant to the terms hereof, or (ii) set forth in the Title
Report, in any Title Report Update and on the Survey which are not Objections
that Seller agrees to satisfy pursuant to Sections 4.1.2 and 4.2 hereof, and
all title matters and exceptions which are waived or deemed to be waived are
hereafter referred to as the "Permitted Exceptions". In no event shall the
provisions of this Section be deemed to extend the Closing Date (it being
understood and agreed that the posting of the Deposit by the Purchaser shall
be deemed to be a waiver of all Objections that the Seller has not agreed to
cure prior to the posting of the Deposit or that the Seller is not obligated
to cure pursuant to the second sentence of Section 4.1.2 and that, in the
event Purchaser posts the Deposit all such Objections shall be deemed to be
"Permitted Exceptions" for all purposes of this Agreement).
4.1.2 If Purchaser notifies Seller within the Title Update
Review Period, if applicable, of any Objections first raised in the Title
Report Update, then within five (5) days after Seller's receipt of
Purchaser's notice ("Seller Response Period"), Seller shall notify Purchaser
("Seller's Title Notice") of the Objections which Seller agrees to satisfy on
or prior to the Closing, at Seller's sole cost and expense, and of the
Objections that Seller cannot or will not satisfy. Notwithstanding the
foregoing sentence, Seller shall, in any event, be obligated to cure those
Objections (i) that are monetary liens or security interests against the
Project other than taxes and assessments not yet delinquent or (ii) that have
been voluntarily placed against the Property by Seller after the date hereof
and that are not otherwise permitted pursuant to the provisions hereof. If
Seller (a) delivers Seller's Title Notice stating that Seller cannot or will
not satisfy any such Objections first raised in the Title Report Update or
(b) fails to send the Seller's Title Notice within the Seller Response
Period, then Purchaser has the option on or prior to the date that is two (2)
days after the delivery by the Seller of the Seller's Title Notice of either
(i) terminating this Agreement by delivering written notice thereof to Seller
in which event it shall be deemed that Purchaser terminated this Agreement
pursuant to Section 3.3 hereof and the rights of the parties shall be as set
forth therein or (ii) it shall be deemed to have waived such Objections, in
which event those Objections shall become "Permitted Exceptions".
4.1.3 It is a condition to Purchaser's obligations to close that
provided Purchaser shall meet the requirements of the Title Insurer and
comply with its obligations under this Agreement including, without
limitation, to pay the Purchase Price, the Title Insurer shall issue a
standard American Land Title Association Owners Title Policy (on their
current form but deleting the creditors' rights exception) (the "Title
Policy") to Purchaser in the amount of the Purchase Price, insuring that
Purchaser has good and indefeasible fee
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simple title to the Property, subject only to the Permitted Exceptions.
Purchaser will pay for the Title Policy which shall include (a) limiting the
standard parties in possession exception to the rights of other parties in
possession under the Lease shown on Schedule 1.5 as same may be revised
pursuant to the terms hereof, as tenants only. (b) deleting any general
mechanic's lien exception and (c) deleting any general survey exception
and the standard exception for easements, or claims of easements, not shown by
the public records and replacing same with all matters disclosed by the
Survey (unless Seller, in Seller's sole discretion, agrees to remedy any such
matter disclosed by the Survey). The Title Policy shall contain such
endorsements as reasonably required by Purchaser, provided that Seller shall
have no obligation to take any action or provide any indemnity or agreement
to Title Insurer to support the issuance of such endorsements, and Purchaser
shall pay the costs for all such endorsements.
4.2 In the event that Seller shall be unable to convey title
to the Property as herein provided, Purchaser shall, at its election, either
(a) accept such title as Seller is able to convey without abatement or
reduction of the Purchase Price or any credit or allowance on account
thereof; or (b) terminate this Agreement. Upon such termination, the rights
of the parties shall be as set forth in Section 3.5 hereof, Seller shall have
no obligation or liability to Purchaser for any damages or other compensation
which Purchaser may have sustained by reason of Seller's inability to convey
title in accordance with the terms of this Agreement. Notwithstanding
anything to the contrary herein contained, Seller shall not be required to
bring any action or proceeding or take any other steps to remove any defects
in or objections to tile or to expend any monies therefor, nor shall
Purchaser have any right of action against Seller therefor at law or in
equity for damages or specific performance for Seller's inability to convey
title in accordance with the terms of the Agreement, provided, however, the
Seller shall satisfy any mortgage or other lien which may be satisfied by
payment of a sum of money only except for the liens for taxes and assessments
not yet delinquent, and Seller shall remove at Closing any exceptions to
title the Property created by the intentional acts of Seller after the date
hereof which are in breach of this Agreement. In the event the Property is
encumbered by any mortgage or other liens which may be satisfied by a sum of
money only except for the liens for taxes and assessments not yet delinquent
and which is not a Permitted Exception, Purchaser shall have the right, at
the time of Closing, to apply a portion of the Purchase Price towards the
payment and satisfaction of such mortgage or other liens and receive a credit
against the Purchase Price for the amount so applied. Seller shall, however,
have the right at its option, to remedy any title defects or objections and
for such purpose shall be entitled to one or more adjournments of the
Closing, but not for more than fifteen (15) days beyond the date Purchaser
gives written notice of such defect or objection. Purchaser's obligations
shall remain in full force and effect in the meantime.
Section 5. CLOSING DATE. The sale contemplated by this Agreement shall
be consummated and closed at 9:00 a.m. (Pacific Time) on December 23, 1998,
provided, however, that if such day shall not be a business day then on the
next succeeding business day ("Closing Date") at the offices of the Title
Insurer (or its agent), or at such earlier time
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or other place as the parties shall mutually agree. TIME SHALL BE OF THE
ESSENCE WITH RESPECT TO PURCHASER'S and SELLER'S OBLIGATION TO CLOSE ON THE
CLOSING DATE subject, however, to Seller's rights to adjourn the Closing Date
expressly set forth in this Agreement. The consummation and the closing of
the purchase and sale of Project as contemplated by this Agreement,
including, without limitation, the recordation of the grant deed, is herein
referred to as the "Closing".
Seller's obligation to sell the Property is conditioned upon the
satisfaction (or Seller's written waiver) on or prior to the Closing Date of
the following conditions:
(i) There shall exist on the Closing Date no pending
order or decree from any governmental authority or
entity prohibiting, enjoining or restraining
Purchaser from consummating the transactions
contemplated hereby with respect to the Property;
(ii) Purchaser shall have paid to Seller in cash the
balance of the Purchase Price;
(iii) The Purchaser shall have signed a Natural Hazard
Disclosure Statement, substantially in the form of
Exhibit F, which shall serve to acknowledge
Purchaser's receipt from the Seller of such Natural
Hazard Disclosure Statement and the Purchaser's
understanding thereof, and
(iv) Purchaser shall not otherwise be in material default
of its obligations hereunder.
Section 6. "AS IS, WHERE IS AND WITH ALL FAULTS"
6.1 The Purchaser has made, and shall make, such
investigations and inspections of the Project and the books and records
relating thereto to satisfy itself as to all matters relating to its purchase
of the Project and Purchaser shall purchase the Project in "AS IS, WHERE IS
AND WITH ALL FAULTS" condition, at the date hereof, subject to normal wear
and tear until Closing (consistent with Seller's obligations in Section 10
hereof) and subject to casualty damage as herein provided.
Without limitation of the foregoing or of other provisions hereof,
each of the Purchaser and Tenant acknowledges that (i) Tenant, an affiliate
of the Purchaser, is, and at all times since August 27, 1996 has been, the
sole tenant of the Property and accordingly each of the Tenant and the
Purchaser is familiar with all aspects of the Property and the condition
thereof and (ii) that the Purchaser, Tenant, Seller and certain other parties
have, pursuant to the Settlement Agreement (as defined herein), settled all
claims and potential claims of either the Purchaser or Tenant (and their
respective affiliates) against the Seller or
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Lincoln-Whitehall Pacific, L.L.C. ("Lincoln-Whitehall"), their affiliates and
certain other persons or entities arising out of the lease or occupation by
the Tenant or the Purchaser of the Property.
This Agreement and the Exhibits and Schedules attached hereto contain
all the terms of the agreement entered into between the parties, and
Purchaser acknowledges that niether Seller nor any representatives of Seller
has made any representations or held out any inducements to Purchaser, other
than those herein expressed. Without limiting the generality of the
foregoing, Purchaser has not relied on any representations or warranties and
neither Seller nor its representatives has made any representations or
warranties other than as expressly set forth herein, in either case express
or implied, as to (i) the current or future real estate tax liability,
assessment or valuation of the Property; (ii) the potential qualification of
the Property for any and all benefits conferred by federal, state or
municipal laws, whether for subsidies, special real estate tax treatment,
insurance, mortgages, or any other benefits, whether similar or dissimilar to
those enumerated; (iii) the compliance of the Property, in its current or any
future state, with applicable zoning ordinances and the ability to obtain a
change in the zoning or a variance in respect to the Property's
non-compliance, if any, with said zoning ordinances; (iv) the availability of
any financing for the purchase, alteration, rehabilitation or operation of
the Property from any source, including but not limited to, state, city, or
federal government or any institutional lender; (v) the current or future use
of the Property; (vi) whether any Real Property lies within a special flood
hazard area, regulated wetlands, an area of potential flooding, a very high
hazard severity zone, a wildland fire area, an earthquake fault zone or a
seismic hazard zone; or (vii) the physical condition of the Property
including, without limitation, any environmental conditions (including,
without limitation, the presence of asbestos or other hazardous materials)
which may exist.
Without limiting the above, and subject to the limitation expressly set
forth in the third to last paragraph of this Section 6.1, each of the
Purchaser and Tenant, on behalf of itself and its respective agents, present
and former officers, directors, shareholders, partners, employees, parent and
subsidiary affiliates, predecessors, affiliates, related entities,
successors, subrogees, and assigns, and anyone acting in concert with or
claiming rights derivative of any of them (collectively, the "Purchase
Parties"), waives its right to recover from, and forever releases and
discharges, and covenants not to sue each of Seller and Lincoln-Whitehall,
and its respective direct and indirect owners, partners, members, property
management company (including the general partners, officers, directors,
members, shareholders, employees or agents thereof), principals, officers,
directors, trustees, beneficiaries, agents, predecessors, servants,
employees, successors, assigns, heirs, administrators, attorneys,
subsidiaries, affiliated companies, insurance carriers, representatives and
adjusters, and all other persons, corporations, or associations related to or
acting in conjunction with, Seller or Lincoln-Whitehall (each a "Seller
Party" and collectively, the "Seller Parties") from any and all Claims (as
hereinafter defined) arising from or relating to the physical condition of
the Property, the lease or occupation by the Tenant of the Property or any
law or regulation applicable thereto, including, without
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limitation, the future assumption of responsibility for the presence or
alleged presence of asbestos or harmful, hazardous or toxic substances in,
on, under or about the Property, including, without limitation, any claims
under or on account of (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as the same may have been or may be
amended from time to time, and similar state statutes, and any rules and
regulations promulgated thereunder, (ii) any other federal, state or local
law, ordinance, rules or regulation, now or hereafter in effect that deals
with or otherwise in any manner relates to, environmental or health and
safety matters of any kind, or (iii) this Agreement or the common law.
In furtherance of the releases set forth in this section, each of
Purchaser and Tenant (for itself and on behalf of the Purchaser Parties)
hereby expressly waives to the maximum extent legally permissible any and all
rights or benefits conferred by any law that is inconsistent with the waiver
and release contained in this Section 6.1 and expressly consents that each
such waiver and release shall be given full force and effect according to
each and all of its express terms and conditions, including, without
limitation, those relating to unknown and unsuspected Claims (as hereinafter
defined), if any, as well as those relating to any other Claims set forth
herein.
EACH OF THE PURCHASER AND TENANT ACKNOWLEDGES THAT IT MAY
HEREAFTERDISCOVER CLAIMS OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE
WHICH IT NOW KNOWS OR BELIEVES TO EXIST WITH RESPECT TO THE SUBJECT MATTER OF
THE RELEASES AND WHICH, IF KNOWN OR SUSPECTED AT THE TIME OF EXECUTING THIS
AGREEMENT, MAY HAVE MATERIALLY AFFECTED THE RELEASES. NEVERTHELESS, EACH OF
THE PURCHASER AND TENANT (FOR ITSELF AND ON BEHALF OF THE PURCHASER PARTIES)
HEREBY WIAVES ANY RIGHT, CLAIM OR CAUSE OF ACTION THAT MIGHT ARISE AS A
RESULT OF SUCH DIFFERENT OR ADDITIONAL CLAIM OF FACTS. EACH OF THE PURCHASER
AND TENANT ACKNOWLEDGES THAT IT UNDERSTANDS THE SIGNIFICANCE AND CONSEQUENCE
OF SUCH RELEASES AND THAT IT HAS BEEN ADVISED BY ITS LEGAL COUNSEL IN
CONNECTION WITH SUCH RELEASES AND SPECIFIC WAIVER.
IN CONNECTION WITH THE RELEASES CONTAINED HEREIN, EACH OF THE PURCHASER
AND TENANT (FOR ITSELF AND ON BEHALF OF THE PURCHASER PARTIES) EXPRESSLY
WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH
PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF
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EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED
THE SETTLEMENT WITH THE DEBTOR.''
_________________INITIALS OF SELLERS _________________INITIALS OF PURCHASER
_________________INITIALS OF TENANT
As used in this Agreement, "Claims" mean any claim, demand, lien,
agreement, contract, covenant, action, suit, cause of action (whether based
on statutory or common law theories), obligation, loss, cost, expense
(including, without limitation, reasonable attorney's fees (whether or not
litigation is commenced), penalty, damages, order or other liability, of any
kind whatsoever, whether at law or in equity, fixed or contingent, known or
unknown, and whether accruing prior to the date hereof, now or in the future.
The provisions of this Section 6 shall survive the Closing and
converyance of title to the Property.
Section 7. SATISFACTION OF LIENS. If on the Closing there are any
monetary liens or encumbrances on the Property which Seller is obligated to
pay and discharge, Seller may use or instruct the Title Insurer to use any
cash portion of the Purchase Price for the Property to satisfy the same,
provided that Seller shall have delivered to Purchaser or the Title Insurer
on or before the Closing, instruments in recordable form sufficient to
satisfy such liens and encumbrances of record, together with the cost of
recording or filing such instruments. The existence of any such liens or
encumbrances shall not be deemed objections to title if Seller shall comply
with the foregoing requirements and shall cause each of such liens and
encumbrances to be discharged at or prior to Closing or cause the Title
Insurer to insure against collection of the same out of the Property, which
insurance against collections shall be subject to Purchaser's consent not
to be unreasonably withheld. Nothing herein shall be deemed to modify the
provisions of Section 4.1 of this Agreement.
Section 8. VIOLATIONS. Seller shall have no obligation or liability
with respect to any violations of any laws, ordinances, statutes, codes,
rules or regulations relating to the Property ("Violations").
Section 9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
9.1 Subject to the information disclosed or contained in the
Disclosure Items (as defined herein), in the Due Diligence Materials, or in
any third party or other reports or similar documents received or prepared by
Purchaser in connection with its investigation of the Properties, Seller
hereby represents and warrants for the exclusive benefit of Purchaser as of
the date hereof as follows:
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9.1.1 Seller is duly organized, validly existing and in good
standing under the laws of the State of its organization and is entitled to
and has all requisite power and authority to own and operate its assets as
they are presently owned and operated.
9.1.2 The execution of this Agreement by Seller, the
consummation of the transactions herein contemplated, and the execution and
delivery of all documents to be executed and delivered by Seller pursuant
hereto, have been duly authorized by all requisite action on the part of the
Seller and this Agreement has been, and all documents to be delivered by
Seller pursuant hereto will be, duly executed and delivered by Seller and is
or will be, as the case may be, binding upon and enforceable against it in
accordance with their respective terms.
9.1.3 Neither the execution of this Agreement nor the
carrying out of the transactions contemplated herein will result in any
violations of or be in conflict with the instruments pursuant to which Seller
was organized and/or operates or any applicable law, rule or regulation of
any public, governmental or quasi-governmental agency or authority, or of any
instrument or agreement to which Seller is a party, nor will it result in the
creation or imposition of any lien on the Property nor will it result in the
termination or the right to terminate any agreements to which Seller is a
party or which affects the Property and no consent or approval of any third
party is required for the execution of this Agreement or the carrying out of
the transactions contemplated herein.
9.1.4 Attached hereto as SCHEDULE 9.1.4 is a list of all
material agreements, instruments and understandings (excluding the Leases and
Permitted Exceptions) to which Seller is a party and which affect the
Property. The property management agreement with Legacy Partners Commercial,
Inc. (formerly known as Lincoln Property Company N.C., Inc. and LPC MS Inc.)
shall be terminated by Seller on the Closing.
9.1.5 Seller is not a foreign person (as defined in Section
1445 of the Internal Revenue Code of 1986, as amended, and the Regulations
promulgated thereunder).
Except for any material changes made in compliance with Section
10 hereof, if any of the foregoing representations and warranties shall
change in any way which would have a material adverse affect on the Property,
the income derived therefrom, the expenses relating thereto, or the operation
thereof, Purchaser shall have the right to terminate this Agreement within
the shorter of five (5) days of Purchaser's obtaining accrual knowledge of
any such change or the time then remaining to Closing. If Purchaser timely
exercises its right to terminate this Agreement it shall be deemed that
Purchaser terminated this Agreements pursuant to Section 3.3 hereof and the
rights of the parties shall be as set forth therein. If Purchaser fails to
timely exercise its right to terminate this Agreement as provided above, this
Agreement shall remain in full force and effect. The provisions of this
Paragraph shall not survive the Closing. For purposes hereof, "material
adverse affect" shall mean a change that in the aggregate would have an
adverse effect on the Property, the income
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derived therefrom and/or the expenses related thereto in excess of Fifty
Thousand Dollas ($50,000).
Notwithstanding anything to the contrary contained herein, Seller
makes no representations or warranties with respect to the matters (the
"Disclosure Item") set forth in SCHEDULE 1 attached hereto and made a part
hereof. Notwithstanding anything to the contrary contained herein or in any
document delivered in connection herewith, Seller shall have no liability
with respect to the Disclosure Items.
9.2 Purchaser and/or Tenant, as applicable, hereby warrants and
represents for the sole and exclusive benefit of Seller as follows:
(a) Each of Purchaser and Tenant is, and will continue to be at
all times until the Closing, a California corporation, duly organized and
validly existing in the state of its formation and will at Closing be in good
standing under the laws of the State in which the Project is located.
Purchaser is and shall continue to be entitled to and has and shall continue
to have all requisite power and authority to own and operate its assets as
they are presently owned and operated.
(b) The execution of this Agreement by each of the Purchaser and
Tenant has been duly authorized by all requisite action on the part of each
of the Purchaser and Tenant and this Agreement is binding upon and
enforceable against each of the Purchaser and Tenant in accordance with its
terms. The consummation of the transactions contemplated herein and the
execution and delivery of all documents to be executed and delivered by each
of the Purchaser, and Tenant pursuant hereto have or will (if Purchaser
elects to proceed with the transaction in accordance with this Agreement),
prior to the Closing Date, be duly authorized by all requisite action on the
part of the Purchaser and Tenant and all such documents to be executed and
delivered by each of the Purchaser and Tenant pursuant hereto will be duly
executed and delivered by it and will be binding upon and enforceable against
each of the Purchaser and Tenant in accordance with their respective terms.
(c) Neither the execution of this Agreement nor the carrying out
by each of the Purchaser and Tenant of the transactions contemplated herein
will result in any violation of or be in conflict with the Articles of
Organization or By-Laws of each of the Purchaser and Tenant, of any
applicable law, rule or regulation of any public, governmental or
quasi-governmental agency or authority, or of any instrument or agreement to
which each of the Purchaser and Tenant is a party and no conesnt or approval
of any governmental authority or third party is required for the execution of
this Agreement or the carrying out by Purchaser of the transactions
contemplated herein.
(d) Purchaser 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 involuntar petition by Purchaser's creditors,
(iii) suffered the appointment of a receiver to
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take possession of all, or substantially all, of Purchaser's assets, (iv)
suffered the attachment or other judicial seizure of all, or substantially
all, of Purchaser'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. Purchaser has, and as of the Closing
Date will have, sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by the Agreement.
(c) Purchaser (i) is a sophisticated investor, (ii) is
represented by competent counsel, (iii) understands the assumptions of risk
and liability set forth in this Agreement and that, prior to Closing,
Purchaser and its agents will have inspected the Property, fully observed the
physical characteristics and condition of the Property, including without
limitation, the suitability of the topography, the availability of water
rights or utilities, the present and future zoning, subdivision and any and
all other land use matters, the condition of the soil, subsoil or groundwater
of the Property and any and all other environmental matters, the purpose(s)
to which the Property is suited, drainage, flooding, access to public roads,
and proposed routes or roads or extensions relative to the Property, (iv)
acknowledges that its posting of the Deposit shall be deemed to be an
acknowledgement by the Purchaser that, as of the date of the posting of such
Deposit, it has received and has approved its due diligence investigation and
the Due Diligence Materials and (v) understands that it will have no recourse
whatsoever against the Seller or its Affiliates.
9.3 The representations and warranties set forth in Section 9.1
and Section 9.2 hereof shall not survive the Closing, PROVIDED that the
representation contained in Section 9.2(e) shall survive the Closing.
Notwithstanding anything to the contrary contained herein, if prior to the
Closing, Purchaser has actual knowledge that any representation or warranty
of Seller set forth in this Agreement (including, without limitation, any of
the representations and warranties in Section 9.1) is not true, and
nevertheless Purchaser proceeds to close the transaction, then Purchaser
shall be deemed to have irrevocably and unconditionally waived its rights to
assert any claim against Seller after the Closing with respect to any
misrepresentation of which it had actual knowledge prior to the Closing. For
purposes of this Section 9.3, Purchaser shall be deemed to have actual
knowledge of the contents of the Due Diligence Materials, the Disclosure
Items and all information specifically delivered to Purchaser or made
available to Purchaser. The provisions of the preceding sentence shall
survive the Closing.
Section 10. OPERATION OF PROPERTY TO CLOSING.
10.1 From the date hereof until the Closing, or the termination
of this Agreement, whichever shall first occur, (a) Seller shall continue to
operate the Property in the manner in which it presently operates the
Project; (b) Seller will maintain the existing insurance covering the
Property or if any of such policies is expiring such policies shall be
replaced with new policies containing similar coverage provided the same is
available; (c) Seller shall not place any mortgage or any other encumbrance
on the Property and Seller will not remove any of the Fixtures unless it
replaces the same with Fixtures of similar quality
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and (d) Seller will continue to do routine repairs to the Property in the
same manner in which such repairs are presently made. If required to comply
with its obligations contained in subdivisions (a) and (d) of the preceding
sentence, Seller, to the extent required by the terms of the Lease, spend up
to an aggregate sum of Ten Thousand Dollars ($10,000) for capital repairs and
replacements to the Property. Notwithstanding anything to the contrary
contained herein, Seller shall not be obligated to make any capital repairs
and replacements to the Property exceeding the aggregate sum of Ten Thousand
Dollars ($10,000) in order to comply with its obligations herein. In the
event Seller would need to make such an expenditure in excess of Ten Thousand
Dollars ($10,000) to comply with the foregoing provisions of subdivision
10.1(a) and (d) of the first sentence of this Section 10.1 and the terms of
the Lease and it shall be unwilling to do so, then Purchaser shall have the
right either (a) to terminate this Agreement as provided in Section 3.3
hereof as its sole and exclusive remedy or (b) to close on the acquisition of
title to Property and receive a credit towards the Purchase Price in the
amount of Ten Thousand Dollars ($10,000).
10.2 Between the date hereof and the Closing, the Seller shall
not enter into any new Contract without the prior written approval of the
Purchaser nor shall it amend, modify, extend or terminate any Contract
without the prior written approval of the Purchaser, unless such amendment,
modification, extension or termination is expressly provided for in the
applicable Contract or unless with respect to the extension or replacement of
a Contract it is on terms generally similar to the existing arrangement and
may be terminated by Purchaser on not more than thirty (30) days' notice
without any penalty.
Section 11. CLOSING DOCUMENTS.
11.1 At the Closing, Seller shall execute where appropriate and
deliver the following documents to the Title Insurer:
11.1.1 a grant deed in the proper form for recording and
meeting the requirements of the Title Insurer;
11.1.2 assignments of Seller's interest in all the Leases
in the form of EXHIBIT B attached hereto and made a part hereof together with
the original copies or photocopies of the same (to the extent they are in
writing);
11.1.3 a bill of sale in the form of EXHIBIT C attached
hereto ("Bill of Sale") and made a part hereof duly executed by Seller and an
assignment of assignable warranties, permits, contracts, general intangibles
(including, without limitation, trade names, to the extent provided herein)
and other items transferring Seller's rights, title and interest in and to
Assignable Warranties, Permits, Contracts and General Intangibles (including,
without limitation, trade names, to the extent provided herein) if any, in
the form of Exhibit D attached hereto and made a part hereof duly executed by
Seller;
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11.1.4 a FIRPTA Affidavit of Seller stating that Seller is
not a foreign person (as defined in Section 1445 of the Internal Revenue Code
of 1986, as amended, and the Regulations promulgated thereunder) and a
California 590 Certificate;
11.1.5 a Natural Hazard Disclosure Statement,
substantially in the form of Exhibit F, in respect of the Properties listed
on Exhibit A, which the Purchaser shall sign to acknowledge Purchaser's
receipt from the Seller of such Natural Hazard Disclosure Statement and the
Purchaser's understanding thereof; and
11.1.6 copies of any "As-Built" surveys commissioned by
Seller and in Seller's possession on the Closing Date;
11.1.7 such other instruments and documents which shall be
useful and necessary in connection with the transaction herein contemplated
and which do not impose any liability not agreed to in this Agreement.
11.2 At the Closing, each of the Purchaser and Tenant, as
applicable, shall execute (where appropriate) and deliver the following
documents in addition to payment of the balance of the Purchase Price;
11.2.1 reasonable evidence of each of the Purchaser's and
Tenant's authority to execute and deliver this Agreement and the documents to
be delivered by it pursuant thereto.
11.2.2 an instrument of assumption of all of Seller's
obligations under the Leases in the form of EXHIBIT B.
11.2.3 an instrument acknowledging the assignment of the
Assignable Warranties, Permits, Contracts and General Intangibles in the form
of EXHIBIT D.
11.2.4 a Bill of Sale in the form of EXHIBIT C.
11.2.5 a Purchaser's "AS-IS" Certificate in the form of
EXHIBIT E.
11.2.6 a countersigned copy of the Natural Hazard
Disclosure Statement.
11.2.7 such other instruments or documents which shall be
useful and necessary in connection with the transaction herein contemplated.
Section 12. PRORATIONS AND COSTS.
12.1 PRORATIONS. Purchaser and Seller shall apportion (based on
the actual number of days in a calendar month) as of 12:01 a.m. on the day of
the Closing (except as
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may otherwise be herein provided), the items hereinafter set forth. Any
errors or omissions in computing apportionments at Closing shall be promptly
corrected after Closing. The obligations set forth in this Section 12 shall
survive the Closing. The items to be adjusted are:
12.1.1 City, state, county, school, real property taxes
and other assessments for the fiscal year of sale (such apportionment shall
be based upon the latest assessment available); should such proration be
inaccurate based on the actual tax bills, if the same has not been received
by the date of Closing, either party may demand after the date of Closing,
and shall be entitled to receive upon demand, a payment correcting any
inaccurate apportionment favoring the other party.
12.1.2 All rent and other Tenant charges to the extent
that any rent or other Tenant charges have been collected at Closing,
provided that if any delinquent rent or other Tenant charges exist at
Closing, such amounts shall be paid to Seller at the Closing and the Purchase
Price shall be increased by an amount equal to the amount of such delinquent
rent or Tenant charges. From and after the Closing Date, Seller shall have
and hereby reserves the right to pursue any remedy against Tenant in the
event it owes rent or other charges with respect to the period prior to the
Closing. The provisions of this Paragraph shall survive the Closing.
12.1.3 All other income and ordinary operating expenses of
the Project including, without limitation, maintenance and other service
charges and all other normal operating charges with respect to the Project
shall be prorated at the Closing effective as of the Closing Date, and
appropriate cash adjustments shall be made by Purchaser.
12.1.4 At the Closing, Purchaser shall receive a credit
against the Purchase Price equal to the amount of all Tenant security
deposits and the Seller shall be entitled to retain such security deposits.
At the Closing, the Purchaser shall assume all bonds and assessments relating
to the Properties.
12.1.5 If, at the time of the delivery of the deed, the
Property or any part thereof shall have been affected by an assessment or
assessments, which are or may become payable in annual installments, of which
the first installment is then a charge or lien, the for the purposes of this
Agreement, all the unpaid installments of any such assessment due and payable
in calendar years prior to the year in which the Closing occurs shall be paid
by the Seller and all installments becoming due and payable after the
delivery of the deed shall be assumed and paid by the Purchaser, except,
however, that any installments which are due and payable in the calendar year
in which the Closing occurs shall be adjusted pro rata.
12.1.6 At the Closing, Purchaser shall reimburse Seller
for the amount of any transferable utility or other deposits (other than
security deposits which are covered by Section 12.1.4) assigned to Purchaser.
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12.1.7 The parties acknowledge that the proration and
similar provisions of this Agreement shall not operate as a termination or
limitation of any obligation of the Tenant under the Lease to make payments
or reimbursements under the terms of the Lease.
12.2 COSTS. Seller shall pay any City and County transfer tax
applicable to the sale, one-half (1/2) of the escrow fee and the recording
charges for recording the Deed. Purchaser shall pay the costs of obtaining
the ALTA title insurance policy, the cost of any endorsements, and one-half
(1/2) of the escrow fee. Any other costs and expenses of the sale of the
Property and the escrow thereafter shall be paid according to local custom.
12.3 TAX CERTIORARI PROCEEDINGS. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Closing Date) any proceeding for the reduction of the assessed
valuation of the Property for any tax year which, in accordance with the laws
and regulations applicable to the Property, requires that, to preserve the
right to bring a tax certiorari proceeding with respect to such tax year,
such proceeding be commenced prior to the Closing Date and (b) endeavour to
settle any such proceeding in Seller's discretion; PROVIDED, HOWEVER, that if
such proceeding is (i) for a tax year in which the Closing Date occurs or
would affect such tax year or any subsequent tax year, such settlement shall
not be made without Purchaser's prior consent, which consent shall not be
unreasonably withheld or delayed, and (ii) for a tax year which commences
after the Closing Date, the right to continue and settle such proceeding,
including, without limitation, any contracts or agreements with tax
certiorari counsel with respect to any such tax year, shall be deemed
assigned to and assumed by Purchaser at the Closing. After the Closing, (i)
Seller shall retain all rights (subject to any rights of Tenant under its
Lease) with respect to any tax year ending prior to the tax year (and all
refunds related thereto) in which the Closing Date occurs, and shall have the
sole right to participate in and settle any proceeding related thereto
(PROVIDED, that such settlement does not affect the assessed tax value for
any subsequent tax year), and (ii) Purchaser shall have all rights with
respect to any tax year (and all refunds related thereto) which ends after
the Closing Date; PROVIDED, HOWEVER, that if the proceeding is for a tax year
in which the Closing Date occurs, such settlement shall not be made without
Seller's prior consent, which consent shall not be unreasonably withheld or
delayed. With respect to any such proceeding for a tax year in which the
Closing Date occurs (whether commenced by Seller or Purchaser), any refund or
credit of taxes for such year shall be applied first to the unreimbursed
out-of-pocket expenses, including reasonable counsel fees, necessarily
incurred in obtaining such refund or credit, and second, to any Tenant
entitled to same, and the balance shall be apportioned between Seller and
Purchaser as of the Closing Date in accordance with the proportion of the
applicable tax year occurring before and after the Closing Date. In each
case, the party which commenced the proceeding shall deliver to the other
copies of receipted tax bills and any decision or settlement agreement
evidencing the reduction in taxes. If any refund shall be received by Seller
which is for the account of Purchaser as provided in this Section 12.3, then
Seller shall hold Purchaser's share thereof in trust for Purchaser and,
promptly upon receipt thereof, pay such share to Purchaser or any other party
entitled to same as provided above.
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If any refund shall be received by Purchaser which is for the account of
Seller as provided in this Section 12.3, then Purchaser shall hold Seller's
share thereof in trust for Seller and, promptly upon receipt thereof, pay
such share to Seller or any other party entitled to same as provided above.
Each party shall execute any and all consents or other documents as may be
reasonably necessary to be executed by such party so as to permit the other
party to commence or continue any tax certiorari proceeding which such other
party is authorized to commence or continue pursuant to the terms of this
Section 12.3, or to collect any refund or credit with respect to any such tax
proceeding. The provisions of this Section 12.3 shall survive the Closing.
Section 13. BROKERAGE. Seller and Purchaser represent and warrant to
each other that no broker or finder, other than Cushman & Wakefield of
California, Inc. and Goldman, Sachs & Co., was instrumental in arranging or
bringing about this transaction and that there are no claims or rights for
brokerage commissions or finders' fees in connection with the transactions
contemplated hereby by any person or entity other than Cushman & Wakefield of
California, Inc. and Goldman, Sachs & Co. whose fees will be the
responsibility of Seller pursuant to separate agreements between Seller and
Cushman & Wakefield of California, Inc., and Goldman, Sachs & Co. as
applicable. If any person brings a claim for a commission or finder's fee
based upon any contact, dealings or communication with Purchaser or any
Seller, then the party through whom such person makes its claim shall defend
the other party (the "INDEMNIFIED PARTY") from such claim, and shall
indemnify the Indemnified Party and hold the Indemnified Party harmless from
any and all costs, damages, claims, liabilities or expenses (including
without limitation, reasonable attorneys' fees and disbursements) incurred by
the Indemnified Party in defending against the claim. In addition, Purchaser
hereby agrees to indemnify and hold harmless each Seller Party from any and
all Claims resulting from any claim made by and Person for a brokerage
commission, finders' fee or similar fee arising out of or relating to any
Person for a brokerage commission, finders' fee or similar fee arising out of
or relating to any action taken (or any communications made) by a Purchaser,
or any of its agents, employees or contractors, in connection with the
proposed resale by Purchaser of any Property or the marketing of such
Property by Purchaser or by any Person on behalf of Purchaser. The provisions
of this Section 13 shall survive the Closing or, if the Closing does not
occur, any termination of this Agreement.
Section 14 NOTICES. All notices or other communications hereunder to
either party shall be (i) in writing and shall be deemed to be given on the
third business day after deposit of both the original copy as provided below
in a regularly maintained receptacle for the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed as provided hereinafter, and (ii) addressed as set forth on the
signature page of this Agreement.
Notices may also be given by facsimile to the facsimile numbers
set forth on the signature page hereto, with the original notice being mailed
or by overnight courier service or United States Express Mail, in which
event, the notice shall be deemed delivered on the date of facsimile
(provided there is confirmation of delivery) or on the next business
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day in the event overnight courier service or United States Express Mail (in
each case with next business day delivery specified) is used.
Section 15. DAMAGE OR DESTRUCTION PRIOR TO CLOSING AND CONDEMNATION.
15.1 If prior to the Closing, the Project is damaged or
destroyed by fire or other casualty but the Project is not "materially
damaged or destroyed" by such fire or other casualty, the Purchaser shall be
required to perform this Agreement and shall be entitled to the insurance
proceeds received by Seller or payable pursuant to the policies of insurance
maintained by Seller plus a credit against the Purchase Price in the amount
of the applicable insurance deductible. If the Project is materially damaged
or destroyed by fire or other casualty, the Purchaser may terminate this
Agreement on written notice to the Seller given within ten (10) days after
Purchaser receives written notice of the occurrence of such fire or casualty.
If Purchaser shall exercise such option, it shall be deemed that Purchaser
terminated this Agreement pursuant to Section 3.3 hereof and the rights of
the parties shall be as set forth therein. If Purchaser does not exercise
such option to terminate, the Agreement shall remain in full force and effect
in accordance with its terms and Purchaser shall be entitled to the proceeds
of insurance as provided in the first sentence of this Section 15.1 and a
credit against the Purchase Price in the amount of the applicable insurance
deductible. In no event shall the Purchaser be entitled to any abatement or
reduction of the Purchase Price by reason of such damage. In the event of any
damage by fire or other casualty, the determination as to whether such damage
or destruction is material shall be made by an engineer or contractor
designated by Seller and approved by Purchaser, provided, however, Purchaser
shall not unreasonably withhold or delay such approval and if it shall
disapprove, Purchaser shall give the reasons for such disapproval. For
purposes hereof, the Project shall be deemed "materially damaged or
destroyed" if the cost of repair and restoration of such damage or
destruction is greater than One Million Dollars ($1,000,000).
15.2 In the event proceedings to condemn the Property or any
material portion thereof (including, without limitation, the parking,
structure or any access to the Property) are commenced before the Closing,
the Purchaser shall have the right to terminate this Agreement in which event
it shall be deemed that Purchaser terminated this Agreement pursuant to
Section 3.3 hereof and the rights of the parties shall be as set forth
herein. In the event Purchaser does not elect to terminate this Agreement,
Seller shall assign to Purchaser, at the Closing, all of Seller's right,
title and interest in and to any condemnation proceeds payable with respect
to the Property.
Section 16. REPORTING REQUIREMENTS. Purchaser and Seller shall each
deposit such other instruments as are reasonably required by the Title
Insurer or otherwise required to close the escrow and consummate the purchase
and sale of the Property in accordance with the terms hereof, including,
without limitation, an agreement designating Title Insurer as the "Reporting
Person" for the transaction pursuant to Section 6045(e) of the Internal
Revenue Code and the regulations promulgated thereunder, and executed by
Seller, Purchaser and
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Title Insurer. Such agreements shall comply with the requirements of Section
6045(e) of the Internal Revenue Code and the regulations promulgated
thereunder.
Section 17. MISCELLANEOUS.
17.1 This Agreement constitutes the entire Agreement between the
parties (other than the Lease, dated August 12, 1996 between Purchaser and
Seller, as amended by the First Amendment to the Lease Agreement, dated
November 22, 1996 and all amendments thereto or assignments thereof) (and the
Settlement Agreement and Mutual Release of All Claims Agreement, dated as of
December __, 1998, among Seller, Purchaser, Tenant and certain other parties
thereto (the "Settlement Agreement"), which Settlement Agreement shall remain
in full force and effect). This Agreement cannot be changed, modified, waived
or terminated orally but only by an agreement in writing signed by the
parties hereto. This Agreement shall be binding upon the parties hereto and
their respective heirs, executors, personal representatives and permitted
successors and assigns.
17.2 (a) IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY
PURCHASER HEREUNDER OR THE FAILURE BY PURCHASER TO SATISFY THE CONDITIONS TO
SELLER'S OBLIGATION REQUIRED TO BE SATISFIED BY PURCHASER PRIOR TO THE
CLOSING DATE, THEN SELLER SHALL RETAIN THE DEPOSIT, AND ANY INTEREST ACCRUED
THEREON, AS LIQUIDATION DAMAGES. THE PARTIES HAVE AGREED THAT
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE
DUE TO PURCHASER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL
THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE
DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN
SUCH EVENT. SELLER'S RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES IS NOT
INTENDED TO BE A FORFEITURE OR PENALTY BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,
1676 AND 1677. BY PLACING THEIR INITIALS BELOW EACH PARTY SPECIFICALLY
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH
PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT
WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE
FOREGOING IS NOT INTENDED TO LIMIT ANY INDEMNIFICATIONS GIVEN BY PURCHASER IN
THIS AGREEMENT OR PURCHASER'S OBLIGATIONS TO PAY COSTS SET FORTH IN SECTION
12.2.
INITIALS: SELLER PURCHASER:
--------------- ---------------
(b) In the event Purchaser shall be ready, willing and able
to close and shall have performed or tendered performance of all of its
obligations in a timely
20
<PAGE>
manner and Seller shall default in its obligations under this Agreement, the
parties hereto agree that Purchaser's remedy shall be limited to the
termination of this Agreement as set forth in Section 3.3 hereof or to
specific performance of this Agreement. Except for any liability or
obligation of Seller expressly provided for in Section 9.1 (subject to the
limitations thereon set forth in Section 9.3 and elsewhere in this Agreement)
or in Section 13 of this Agreement, Purchaser hereby unconditionally and
irrevocably waives, to the greatest extent permitted by law, any claim for
damages against Seller arising out of this Agreement including, without
limitation, any claim arising out of any default or misrepresentation by
Seller hereunder.
(c) In the event of a default by either party hereto which
becomes the subject of litigation, the losing party agrees to pay the
reasonably legal fees of the prevailing party. The provision of this Section
shall survive the Closing or the termination of this Agreement.
17.3 Time shall be of the essence of the obligations of the
parties under this Agreement, provided, however, if the final date of any
period set forth herein (including, but not limited to, the Closing Date)
falls on a Saturday, Sunday or legal holiday under the laws of the State in
which the Project is located, or the United States of America, the final date
of such period shall be extended to the next day that is not a Saturday,
Sunday or legal holiday. The term "days" as used herein shall mean calendar
days, with the exception of "business days", which term shall mean each day
except for any Saturday, Sunday or legal holiday under the laws of the State
in which the Project is located or the United States of America.
17.4 This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
original, and the execution of separate counterparts by Purchaser and Seller
shall bind Purchaser and Seller as if they had each executed the same
counterpart.
17.5 This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of California.
17.6 No agreements or covenants to perform any obligation or
representations and warranties contained in this Agreement shall survive the
delivery of the deed except as expressly provided herein. Acceptance of the
deed is an acceptance of all of the obligations of the Seller hereunder
except such as may expressly be stated to survive the Closing.
17.7 The headings used in this Agreement are for convenience
only and do not constitute substantive matters to be considered in construing
same.
17.8 The parties agree that neither this Agreement nor any
memorandum or notice thereof shall be recorded.
21
<PAGE>
17.9 This Agreement may not be assigned by the Purchaser,
without the consent of the Seller; provided, that the Purchaser may assign
its rights or obligations under this Agreement to a wholly-owned subsidiary
of Purchaser that is reasonably satisfactory to Seller (which wholly-owned
subsidiary shall not be permitted to assign its rights or obligations under
this Agreement) that executes and delivers to Seller an assignment and
assumption instrument acceptable to Seller pursuant to which the Purchaser
assigns all of its rights, title and interest in and to this Agreement to the
assignee (including all rights to the Deposit and all interest earned
thereon) and the assignee assumes and agrees to be bound by all of the
obligations of the Purchaser under this Agreement and the Confidentiality
Agreement. In connection with any assignment pursuant to the terms hereof,
the assignee shall reconfirm in a written instrument reasonably acceptable to
Seller and delivered to Seller concurrently with or prior to the assignment
said representations and warranties as applied to the assignee. No other
assignment of this Agreement shall be permitted except upon the prior
written consent of Seller. No assignment of this Agreement shall release the
Purchaser herein; provided that the assigner shall be released with respect
to its obligation to consummate the transactions contemplated herein. No
Assignment shall excuse timely payment by Purchaser or its assignee hereunder.
17.10 Submission of this form of Agreement for examination shall
not bind Seller in any manner nor be construed as an offer to sell and no
contract or obligations of Seller shall arise until this instrument is
executed by both Seller and Purchaser and delivery is made to each and the
Deposit has been received by the Escrow Agent.
17.11 The obligations of Seller are intended to be binding only on
the Property of Seller and shall not be personally binding upon, nor shall
any resort be had to, the private properties of any of its trustees,
officers, beneficiaries, directors, members, or shareholders, or of its
investment manager, the general partners, officers, directors, members, or
shareholders thereof, or any employees or agents of Seller or its investment
manager.
Section 19. CONFIDENTIALITY. Each of the Purchaser and Tenant will
maintain strict confidentiality of all aspects of this Agreement including,
without limitation, any information obtained through the due diligence
process (including, without limitation, any papers, documents, data, plans or
other information or materials provided by Seller or its affiliates or agents
concerning the Project and any memoranda, reports, summaries, or together
documents, writings or recordings relating to the Project or to such
information (the "Evaluation Material"). Each of the Purchaser and Tenant
agrees that such information and Evaluation Material will be used for no
purpose other than evaluating a possible transaction involving the Purchaser,
as a principal, exclusively for its own account, and not as a broker, finder
or similar agent for any other person, and that, except as may be agreed in
writing by the Seller, each of the Purchaser and Tenant will not copy or
duplicate any Evaluation Material. In addition, each of the Purchaser and
Tenant agreed that the Purchaser and the Related Parties (as defined below)
of the Purchaser will not, without prior written consent of Seller, disclose
to any person (other than a person authorized hereunder), the fact that the
Evaluation Material has been made available to the Purchaser or Tenant, that
discussions or
22
<PAGE>
negotiations between the Purchaser or Tenant and the Seller are now taking
place or will take place, or any of the terms, conditions or other facts with
respect to the possible acquisition of the Project.
In furtherance of the foregoing, except as may be required by law
or as may be necessary to evaluate the Property for Purchaser's acquisition
and financing therefor, Purchaser will not divulge any such information or the
Evaluation Material to other persons or entities including, without
limitation, appraisers, real estate brokers, or competitors of Seller.
Notwithstanding the foregoing, Purchaser shall have the right to disclose
information with respect to the Property to officers, directors, employees,
attorneys, accountants, environmental auditors, engineers, permitted
assignees under this Agreement and other consultants (collectively, "Related
Parties") to the extent necessary for Purchaser to evaluate its acquisition of
the Property provided that all Related Parties are told that such information
is confidential and agree (in writing for any third party engineers,
environmental auditors or other consultants) to keep such information
confidential.
Each of the Purchaser and Tenant agrees that the Seller will have no
adequate remedy at law if the Purchaser or Tenant were to violate any of the
terms of this Section 18. Accordingly, in the event of such a breach by the
Purchaser or Tenant, the Seller and its affiliates have the right, in addition
to any other right the Seller and its affiliates may have, to seek injunctive
relief to restrain any breach or threatened breach by us or specific
enforcement of such terms. Each of the Purchaser and Tenant further agrees
that it shall be responsible to the Seller and the Seller Parties for any
breach by the Purchaser, Tenant or any of the Purchaser Related Parties of the
terms of this Section 18.
Although the Seller has endeavored to include in the Evaluation
Material information known to it which it believe to be relevant for the
purpose of the Purchaser's investigation, each of the Purchaser and Tenant
understands and acknowledges that neither the Seller nor any of the Seller
Parties makes any representation or warranty to us as to the accuracy or
completeness of the Evaluation Material. Each of the Purchaser and Tenant
further agrees that none of the Seller or any of the Seller Parties shall
have liability to the Purchaser, Tenant or any of the Purchaser's
representatives or agents resulting from the use of or reliance on the
Evaluation Material by the Purchaser, Tenant or the Purchaser's
representatives and agents. Each of the Purchaser and Tenant acknowledges
that the Seller is not responsible to either the Purchaser or Tenant to
determine whether toxic or hazardous wastes or substances or other
undesirable materials are present at the Project and that it is solely the
responsibility of the Purchaser to conduct investigations to determine the
presence of such materials.
Notwithstanding the foregoing, the Seller or the Tenant may make a
public announcement concerning the transactions contemplated by this
Agreement to the extent required to comply with applicable law or regulation
or the rules of a stock exchange on which the stock of the Tenant is listed or
quoted; PROVIDED that the Purchaser and the Tenant shall provide the Seller
with a copy of any such proposed announcement not less than two
23
<PAGE>
(2) business days prior to the scheduled release of such announcement and
provide the Seller with the opportunity to approve such proposed release
(such approval not to be unreasonably withheld).
The provisions of this Section 18 shall survive the Closing or any
termination of this Agreement. In the event that this Agreement is
terminated, the Purchaser agrees to return all Evaluation Materials to the
Seller immediately upon the request of the Seller and not to retain any
copies, extracts or other reproductions, in whole or in part, of such
Evaluation Materials.
24
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into as of the
day and year first above written.
SELLER: WHLW Real Estate Limited Partnership
By: WHLW Gen-Par, Inc.
General Partner
By:
---------------------------------------
Its:
---------------------------------------
PURCHASER: Natrol Real Estate, Inc.,
a California Corporation
By: /s/ DENNIS R. JOLICOEUR
---------------------------------------
Its: Executive Vice President and Treasurer
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
TENANT: Natrol, Inc., a California Corporation
By: /s/ DENNIS R. JOLICOEUR
---------------------------------------
Its: Executive Vice President and Treasurer
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
25
<PAGE>
ADDRESS FOR NOTICES TO SELLER:
Legacy Partners Commercial, Inc.
101 Lincoln Centre Drive, 4th Floor
Foster City, CA 94404-1167
Attention: Robert Phipps
Fax No.: (650) 573-8624
with a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Gary Israel
Fax No.: (212) 558-4000
and
Real Estate Law Group
2330 Marinship Way, Suite 211
Sausalito, CA 94965
Attention: Bonnie Frank
Fax No.: (415) 331-7272
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery
or refusal of delivery.
ADDRESS FOR NOTICE TO PURCHASER:
Natrol Real Estate, Inc.
21411 Prairie Street
Chatsworth, CA 91311
Attention: Elliott Balbert
Fax No.: (818) 759-6001
with a copy to: Arter & Hadden, LLP
5959 Topanga Canyon Blvd.
Suite 244
Woodland Hills, California 91367
Attention: David Laufer
Fax No.: (818) 712-0036
26
<PAGE>
EXHIBIT "A"
DESCRIPTION OF LAND
21411 Prairie Street, Chatsworth, California
[Legal Description]
A-1
<PAGE>
EXHIBIT B
ASSIGNMENT AND ASSUMPTION OF LEASES
ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment") made as of
the day of December ____, 1998 by and between WHLW Real Estate Limited
Partnership ("Assignor") and Natrol Real Estate, Inc., ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor and Assignee are parties to that certain Purchase
and Sale Agreement, dated December ____, 1998 (the "Purchase Agreement")
covering the Premises set forth on Exhibit A hereto; and
WHEREAS, Assignor has simultaneously herewith conveyed to the
Assignee all of Assignor's right, title and interest in and to the Premises
located at ________________________________, and in connection therewith,
Assignor has agreed to assign to Assignee all of Assignor's right, title and
interest in and to the lease described on the Schedule of Leases attached as
Exhibit "B" hereto and the guaranties, security deposits and other documents
related thereto, if any (collectively, the "Lease").
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignor hereby assigns unto Assignee, all of the right,
title and interest of Assignor in and to the Lease.
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns from and after the date hereof, subject to the terms, covenants and
conditions of the Lease.
2. This Assignment is made without representation or warranty
by Assignor except as provided in that certain Certificate delivered by
Assignor to Assignee on the date hereof.
3. Assignee assumes the performance of all of the obligations
of Assignor under the Lease to be first performed from and after the date
hereof and does not assume any obligations or liabilities under the Lease
accruing prior to the date hereof.
4. Effective as of the date hereof, Assignee hereby agrees to
indemnify, defend (with counsel reasonably acceptable to Assignor), and hold
Assignor and each other
B-1
<PAGE>
Seller Party (as defined in the Purchase Agreement) harmless from any and all
Claims (as defined in the Purchase Agreement), originating on or subsequent
to the data hereof, under, relating to or arising out of the Lease.
5. Any rental and other payments under the Lease shall be
prorated between the parties as provided in the Purchase Agreement.
6. In the event of any dispute between Assignor and Assignee
arising out of the obligations of Assignor under this Assignment or
concerning the meaning or interpretation of any provision contained herein,
the losing party shall pay the prevailing party's costs and expenses of such
dispute, including, without limitation, reasonable attorneys' fees and costs.
Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Assignment shall be recoverable
separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Assignment and to survive and not be
merged into any such judgment.
7. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8. This Assignment is made without recourse and without any
express or implied representation or warranty of any kind. Assignee on behalf
of itself and its agents, employees, representatives, successors and assigns
hereby agrees that in no event or circumstances shall Assignor or any Seller
Party have any personal liability under this Assignment, or to any of
Assignee's creditors, or to any other party in connection with the Property.
This Assignment may be executed in counterparts, each of which shall be
deemed an original, and all of which shall taken together be deemed one
document.
9. This Assignment is delivered pursuant to the Purchase
Agreement and Assignee expressly acknowledges the affirms the provisions
thereof.
10. This Assignment shall be binding on and inure to the benefit
of the parties hereto, their heirs, executers, administrators, successors in
interest and assigns.
11. This Assignment may be executed in separate counterparts,
which together, shall constitute one and the same fully executed Assignment.
12. The obligations of Assignor are intended to be binding only on
the property of Assignor and shall not be personally binding upon, nor shall
any resort be had to, the private properties of any Seller Party.
Capitalized terms used herein and not defined herein shall be the
meanings given to them in the Purchase Agreement.
B-2
<PAGE>
IN WITNESS WHEREOF, this Assignment has been duly executed as of
the date first above written.
ASSIGNOR: WHLW Real Estate Limited Partnership
By: WHLW Gen-Par, Inc.
General Partner
Name:
----------------------------------------
Title:
----------------------------------------
ASSIGNEE: Natrol Real Estate, Inc.
Name:
----------------------------------------
Title:
----------------------------------------
B-3
<PAGE>
EXHIBIT C
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, WHLW Real Estate Limited Partnership ("Seller") does hereby
sell, transfer and convey to Natrol Real Estate, Inc. ("Purchaser"), the
Personal Property as such term is defined in that certain Purchase and Sale
Agreement between Seller and Purchaser dated as of December __, 1998 (the
"Purchase Agreement").
PURCHASER ACKNOWLEDGES THAT SELLER IS SELLING AND PURCHASER IS
PURCHASING SUCH PERSONAL PROPERTY ON AN "AS IS, WHERE IS AN WITH ALL FAULTS"
BASIS AND THAT THE PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OR ANY KIND WHATSOEVER EXPRESS OR IMPLIED, FROM SELLER OR ANY
SELLER PARTY AS TO ANY MATTERS CONCERNING SUCH PERSONAL PROPERTY, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTIES AS TO TITLE OR IMPLIED WARRANTIES OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING THE
FOREGOING, SELLER REPRESENTS THAT IT OWNS ALL OF THE PROPERTY FREE AND CLEAR
OF ALL LIENS AND ENCUMBRANCES.
The obligations of Seller are intended to be binding only on the
property of Seller and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any Seller Party.
C-1
<PAGE>
Capitalized terms used herein and not defined herein shall be the
meanings given to them in the Purchase Agreement.
Dated: December __, 1998 SELLER: WHLW Real Estate Limited Partnership
By: WHLW Gen-Par, Inc.
General Partner
Name:
---------------------------------
Title:
---------------------------------
PURCHASER: Natrol Real Estate, Inc.
Name:
---------------------------------
Title:
---------------------------------
C-2
<PAGE>
EXHIBIT D
ASSIGNMENT OF WARRANTIES, PERMITS, CONTRACTS
AND GENERAL INTANGIBLES
ASSIGNMENT OF WARRANTIES, PERMITS, CONTRACTS AND GENERAL
INTANGIBLES (this "Assignment") made as of the __ day of December, 1998 by
and between WHLW Real Estate Limited Partnership ("Assignor") and Natrol
Real Estate, Inc. ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignor her simultaneously herewith conveyed to the
Assignee all of the Assignor's right, title and interest in and to the
premises located on Exhibit "A" attached hereto (the "Premises"), and in
connection therewith. Assignor has agreed to assign to Assignee all of
Assignor's right, title and interest in and to (i) the warranties and/or
guaranties; if any, relating to the Premises to the extent assignable
(collectively, "Warranties"), (ii) any governmental approvals or permits
relating to the Premises to the extent assignable (collectively, "Permits"),
(iii) the agreements, contracts instruments and understandings listed on
Annex __ attached hereto (collectively, the "Contracts") and (iv) general
intangibles relating to the Property including, without limitation, the trade
name, to the extent provided in the Purchase Agreement, if any, used to
identify the Premises or any variation thereof, provided Assignor makes
absolutely nor representation or warranty that it has any ownership of or
right to use any trade name (collectively, "General Intangibles").
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. To the extent assignable, Assignor hereby assigns unto
assignee, all of the right, title and interest, if any, of Assignor in and to
the Warranties, Permits, Contracts and General Intangibles;
TO HAVE AND TO HOLD the same unto Assignee, its successors and
assigns from and after the date hereof.
2. Effective as of the date hereof, Assignee hereby assumes and
unconditionally agrees to observe and perform all of the Assignor's
obligations under, relating to or arising out of the Contracts, originating
on or subsequent to the date hereof Assignee hereby agrees to indemnify
Assignor and its affiliates, against and hold Assignor and its affiliates
harmless from any and all Claims (as defined in the Purchase Agreement),
originating on or subsequent to the date hereof, under, relating to or
arising out of the Contracts.
D-3
<PAGE>
3. In the event of any dispute between Assignor and Assignee
arising out of the obligations of Assignor under this Assignment or
concerning the meaning or interpretation of any provision contained herein,
the losing party shall pay the prevailing party's costs and expenses of such
dispute, including, without limitation, reasonable attorneys' fees and
costs. Any such attorneys' fees and other expenses incurred by either party
in enforcing a judgment in its favor under this Assignment shall be
recoverable separately from and in addition to any other amount included in
such judgment, and such attorneys' fees obligation is intended to be
severable from the other provisions of this Assignment and to survive and
not be merged into any such judgment.
4. This Assignment shall not be construed as a representation or
warranty by Assignor as to the transferability or enforceability of the
Warranties, the Permits, the Contracts or the Intangible Property
(collectively, the "INTERESTS"), and Assignor shall have no liability to
Assignee in the event that any or all of the Interests (a) are not
transferable to Assignee or (b) are canceled or terminated by reason of this
assignment or any acts of Assignee. Furthermore, Assignee on behalf of itself
and the Purchaser Parties hereby agrees that in no event or circumstances
shall Assignor or any Seller Party have any personal liability under this
Assignment, or to any of Assignee's creditors, or to any other party in
connection with the Interests.
5. This Assignment shall be governed by and construed and in
accordance with the laws of the State of California.
6. This Assignment is made without recourse and without any
express or implied representation or warranty of any kind or nature, except
as expressly set forth in the Purchase Agreement.
7. This Assignment is delivered pursuant to the Purchase
Agreement attached hereto and to which this Assignment is an Exhibit thereof,
and Assignee expressly acknowledges and affirms the provisions thereof. This
Assignment may be executed in counterparts, each of which shall be deemed an
original, and all of which shall taken together be deemed one document.
8. This Assignment shall be binding on Assignor and its
successors, assigns and legal representatives and shall insure to the benefit
of the Assignee and its successors, assigns and legal representatives.
9. This Assignment may be executed in separate counterparts,
which, together, shall constitute one and the same fully executed Assignment.
10. The obligations of Assignor are intended to be binding only on
the property of Assignor and shall not be personally binding upon, nor shall
any resort be had to, the private properties of any Seller Party.
D-4
<PAGE>
Capitalized terms used herein and not defined herein shall have the
meanings given to them in the Purchase Agreement.
IN WITNESS WHEREOF, this Assignment has been duly executed as of
the date first above written.
ASSIGNOR: WHLW Real Estate Limited Partnership
By: WHLW Gen-Par, Inc.
General Partner
Name:
------------------------------------
Title:
------------------------------------
ASSIGNEE: Natrol Real Estate, Inc.
Name:
------------------------------------
Title:
------------------------------------
D-5
<PAGE>
EXHIBIT E
PURCHASER'S AS-IS CERTIFICATE
THIS CERTIFICATE AND AGREEMENT ("Certificate") is made as of the
day of December, 1998, by Natrol Real Estate, Inc. ("Purchaser") and
Natrol, Inc.("Tenant"), to and for the benefit and WHLW Real Estate Limited
Partnership ("Seller").
RECITALS
Seller. Purchaser and Tenant are parties to a Purchase and Sale
Agreement, dated as of December , 1998 (the "Purchase Agreement") which
provides for the sale of a certain real property (the "Property") legally
described on EXHIBIT A attached to the Purchaser Agreement and incorporated
herein by this reference. Any capitalized terms not otherwise defined herein
shall have the meaning ascribed to such term in the Purchase Agreement; and
The Purchase Agreement requires, INTER ALIA, that, as a condition
precedent to Seller's obligations under the Purchase Agreement. Purchaser and
Tenant shall execute and deliver this Certificate to Seller at Closing.
NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00)
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each of Purchaser and Tenant hereby certifies
and agrees as follows:
1. Each of Purchaser and Tenant hereby acknowledges that it has
examined and investigated to its full satisfaction all facts, circumstances
and matters relating to the Property, or otherwise relevant to its purchase
of the foregoing, including without limitation:
(i) all matters relating to governmental and other legal
requirements with respect to the Property, such as taxes,
assessments, zoning, use permit requirements and building codes;
(ii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to the Property;
(iii) to the extent in the possession of Seller or Seller's
property manager, a copy of a survey of the Property (a "SURVEY");
E-1
<PAGE>
(iv) to the extent in the possession of Seller or Seller's
property manager, reports, studies, assessments, investigations
and other materials related to the presence of Hazardous Materials
at, on or under the Property and the compliance of such Property
with all environmental laws, including environmental assessment
reports;
(v) the Lease with respect to the Property and all matters
in connection therewith, including, without limitation, the ability
of the Tenant thereto to pay the rent;
(vi) the Contracts and other documents or agreements of
significance affecting the Property;
(vii) all matters relating to the income and operating or
capital expenses of the Property and all other financial matters;
and
(viii) all matters relating to title to the Property;
(ix) the physical condition of the Property, including,
without limitation, the interior, the exterior, the square footage
of the improvements or the leasehold improvements and of the tenant
space therein, the structure, the roof, the paving, the utilities,
and all other physical and functional aspects of the Property,
including the presence or absence of Hazardous Materials;
(x) any easements and/or access rights affecting the
Property;
(xi) all matters that would be revealed by an ALTA as-built
survey, a physical inspection or an environmental site assessment
of the Property;
(xii) all matters reflected on each of the Natural Hazard
Disclosure Statements; and
(xiii) all other matters of significance affecting, or
otherwise deemed relevant by the Purchaser with respect to, the
Property.
2. Purchaser acknowledges and agrees that (i) it has been given
the full opportunity to inspect and investigate all aspects of the Property,
either independently or through agents, representatives or experts of
Purchaser's choosing, as Purchaser considers necessary or appropriate,
including without limitations those set forth in the Purchase Agreement, (ii)
it has completed its independent investigation of the Property and the Due
Diligence Materials, and (iii) it is acquiring the Property based
exclusively on such independent investigation. The funding of the Deposit by
E-2
<PAGE>
Purchaser and the execution of this certificate conclusively constitute
Purchaser's approval of each and every aspect of the Property. Purchaser (i)
is a sophisticated investor, (ii) is represented by competent counsel, (iii)
understands the assumptions of risk and liability set forth in this
Certificate and that, prior to Closing, Purchaser and its agents have
inspected the Property, fully observed the physical characteristics and
condition of the Property, performed a thorough investigation of the
suitability of Purchaser's intended use of the Property, including without
limitation, the suitability of the topography, the availability of water
rights or utilities, the present and future zoning, subdivision and any and
all other land use matters, the condition of the soil, subsoil or
groundwater of the Property and any and all other environmental matters, the
purpose(s) to which the Property is suited, drainage, flooding, access to
public roads, and proposed routes or roads or extensions relative to the
Property, (iv) acknowledges that its posting of the Deposit was deemed to be
an acknowledgment by the Purchaser that, as of the date hereof, it had
received the Date Diligence Materials and (v) understands that it will have
no recourse whatsoever against Seller or any Seller Party except as expressly
set forth in the Purchase Agreement and this Certificate. Such independent
investigation by Purchaser included items set forth in the Purchase
Agreement, the Purchaser agreeing that it has completed its due diligence
investigation of the Property prior to the date hereof and is satisfied with
results of such investigation and the Due Diligence Materials.
3. EACH OF PURCHASER AND TENANT SPECIFICALLY REPRESENTS,
ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL SELL AND PURCHASER SHALL
PURCHASE THE PROPERTY "AS IS, WHERE IS AND WITH ALL FAULTS," (ii) PURCHASER
IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM
SELLER, NOR ANY SELLER PARTY AS TO ANY MATTER, CONCERNING THE PROPERTY, OR
SET FORTH, CONTAINED OR ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING
WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION:
(i) the quality, nature, habitability, merchantability, use, operation,
value, marketability, adequacy or physical condition of the Property or any
aspect or portion thereof, including, without limitation, structural
elements, foundation, roof, appurtenances, access, landscaping, parking
facilities, electrical, mechanical, HVAC, plumbing, sewage, and utility
systems, facilities and appliances, soils, geology and groundwater, or
whether the Property lies within a special flood hazard area, an area of
potential flooding, a very high fire hazard severity zone, a wildland fire
area, an earthquake fault zone or a seismic hazard zone, (ii) the dimensions
or lot size of any Property or the square footage of the Improvements thereon
or of any tenant space therein, (iii) the development or income potential, or
rights of or relating to, the Property, or the Property's use, habitability,
merchantability, or fitness, or the
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suitability, value or adequacy of the Property for any particular purpose,
(iv) the zoning or other legal status of the Property or any other public or
private restrictions on the use of the Property, (v) the compliance of the
Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any
Governmental Authority or of any other person or entity (including, without
limitation, the Americans with Disabilities Act), (vi) the ability of
Purchaser to obtain any necessary governmental approvals, licenses or permits
for Purchaser's intended use or development of the Property, (vii) the
presence or absence of Hazardous Materials on, in, under, above or about
the Property or any adjoining or neighboring property, (viii) the quality of
any labor and materials used in any Improvements, (ix) the condition of title
to the Property, (x) the Lease, Contracts or any other agreeements
affecting the Property or the intentions of any party with respect to the
negotiation and/or execution of any lease or contract with respect to the
Property, (xi) Seller's ownership of the Property or any portion thereof or
(xii) the economics of, or the income and expenses, revenue or expense
projections or other financial matters, relating to, the operation of the
Property. Without limiting the generality of the foregoing. Purchaser
expressly acknowledges and agrees that Purchaser is not relying on any
representation or warranty of the Seller, nor any Seller Party, whether
implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Purchaser except as provided in Section 3.3 of the Purchase
Agreement. Purchaser further acknowledges and agrees that Seller is under no
duty to make any inquiry regarding any matter that may or may not be known to
Seller or any partner, officer, employee, attorney, property manager, agent
or broker of such Seller.
4. ANY REPORTS, REPAIRS OR WORK REQUIRED BY EITHER PURCHASER OR
TENANT ARE THE SOLE RESPONSIBILITY OF PURCHASER AND TENANT, AND EACH OF
PURCHASER AND TENANT AGREES THAT THERE IS NO OBLIGATION ON THE PART OF THE
SELLER TO MAKE ANY CHANGES. ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO CURE
ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
PURCHASER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR
ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY
PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME. ALL
AT PURCHASER'S SOLE COST AND EXPENSE.
5. Purchaser acknowledges and agrees that the provisions of this
Certificate were a material factor in Seller's acceptance of the Purchase Price
and agreements to sell the Property to Purchaser, and Seller is unwilling to
sell the Properties unless Seller and the other Seller Parties are
expressly released to the extent set forth in Section 6 of the Purchase
Agreement.
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IN WITNESS WHEREOF, each of Purchaser and Tenant has executed this
Certificate as of the date first set forth herein above.
NATROL REAL ESTATE, INC.
a California corporation
By:
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Name:
Title:
NATROL, INC.
a California corporation
By:
--------------------
Name:
Title:
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EXHIBIT F
NATURAL HAZARD DISCLOSURE STATEMENT
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EXHIBIT G
GRANT DEED
Recording Requested by and
When Recorded Mail to,
and Mail Tax Statements to:
-----------------------------
-----------------------------
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Attention:
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Space Above This Line for Recorder's Use
GRANT DEED
The undersigned Grantor declared that Documentary Transfer Tax is
not part of the public records.
For valuable consideration, receipt of which is acknowledged,
__________, a ___________ ("Grantor"), hereby grants to
__________, a ___________ ("Grantee"), that certain real property located in
the City of ___________, County of ___________, State of California, as
legally described in EXHIBIT A attached hereof and made a part hereto (the
"Property") together with all of Grantor's right, title and interest in and
to all improvements and structures located thereon, and all easements,
appurtenances, rights and privileges of Grantor appertaining to the Property.
The Property is conveyed subject to:
(a) The lien of supplemental taxes, if any, assessed pursuant to
the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and
Taxation Code of the State of California;
(b) The liens for real property taxes for the fiscal year 19__ -
19__ not yet due and payable;
(c) All liens, encumbrances, easements, leases, covenants,
conditions and restrictions of record;
(d) All matters which would be disclosed by an inspection of the
Property; and
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(e) Zoning ordinances and regulations and any other laws,
ordinances, regulations or orders of any governmental agency having or
claiming jurisdiction over the use, occupancy or enjoyment of the Property.
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IN WITNESS WHEREOF, Grantor has caused its duly authorized
representative to execute this instrument as of the date hereinafter written.
DATED: December____ 1998
GRANTOR:
WHLW Real Estate Limited Partnership,
a Delaware limited partnership
By: WHLW Gan-Par, Inc.
General Partner
By:
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Its:
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