California-Fremont-34801/34781 Campus Drive Agreement of Purchase and Sale - Ardenstone LLC and Protein Design Labs Inc.
AGREEMENT OF PURCHASE AND SALE
SUMMARY OF CERTAIN TERMS
EFFECTIVE DATE:
June ___,1999
SELLER:
ARDENSTONE LLC, a Delaware limited liability company
SELLER'S ADDRESSES:
c/o Freestone Properties, Inc.
4400 Bohannon Drive, Suite 260
Menlo Park, CA 94025
Attn: Mr. Michael E. Tamas
Telephone: (650) 329-9030
Facsimile: (650) 329-0129
With a copy to:
Brobeck, Phleger & Harrison LLP
One Market
Spear Street Tower, Floor 25
San Francisco, CA 94105
Attn: Michael F. Potter, Esq.
Telephone: (415) 442-1163
Facsimile: (415) 979-2580
BUYER:
PROTEIN DESIGN LABS, INC., a Delaware corporation
BUYER'S ADDRESS:
34801 Campus Drive
Fremont, CA 94555
Attn: Chief Executive Officer
Telephone: (510) 574-1400
Facsimile: (510) 574-1500
With a copy to:
Protein Design Labs, Inc.
34801 Campus Drive
Fremont, CA 94555
Attn: General Counsel
Telephone: (510) 574-1400
Facsimile: (510) 574-1500
REAL PROPERTY:
That certain improved real property commonly known as
34801 Campus Drive/7450 Paseo Padre Parkway and
34781 Campus Drive/7400 Paseo Padre Parkway, located
in Ardenwood Corporate Commons, Fremont, California.
The land portion is more particularly described in
Exhibit A, attached hereto.
PURCHASE PRICE:
Thirteen Million Five Hundred Thirty Thousand Dollars
($13,530,000.00).
DUE DILIGENCE
PERIOD:
The period commencing on the Effective Date and
ending at 5:00 p.m. Pacific Daylight Savings Time on
the thirtieth (30th) day after the Effective Date.
FINANCING CONTINGENCY
EXPIRATION DATE:
The sixtieth (60th) day after the Effective Date.
SELLER'S
REPRESENTATIVE:
Mr. Michael E. Tamas
BUYER'S
REPRESENTATIVES:
Mr. Glen Y. Sato and Mr. Douglas O. Ebersole
ESCROW HOLDER:
First American Title Company
1850 Mt. Diablo Blvd., Suite #300
Walnut Creek, CA 94596
Attn: Ms. Kitty Schlesinger
Telephone: (925) 927-2100
Facsimile: (925) 927-2180
SCHEDULED
CLOSING DATE:
The fifteenth (15th) day after the satisfaction or
waiver of the conditions precedent set forth in
Sections 9.2.1, 9.2.2, 9.2.3 and 9.2.4.
SELLER'S BROKER:
None
BUYER'S BROKER:
Cornish and Carey Commercial
CLOSING COST
ALLOCATIONS:
- BUYER:
TITLE INSURANCE
100%
ESCROW FEES
100%
RECORDING FEES (DEED)
100%
ALTA SURVEY
100%
PHASE I ENVIRONMENTAL REPORT
100%
- SELLER:
COUNTY TRANSFER TAXES
100%
RECORDING FEES (OTHER)
100%
TABLE OF CONTENTS
Page
1. Purchase and Sale of Property
1.1. Real Property
1.2. Intangible Property
1.3. Lease
2. Purchase Price
3. Escrow.
4. Payment of Purchase Price
5. Remedies; Liquidated Damages
5.1. Tenant Improvement Allowance
5.2. Remedies
5.3. LIQUIDATED DAMAGES
6. Due Diligence
6.1. Seller's Studies
6.2. Survey
6.3. Buyer's Inspections
6.4. Designation of Representatives
6.5. Disapproval of Seller's Studies or Buyer's Inspections
6.6. Title Review
6.7. Modification of Title Report
6.8. Assumption of Bonds
7. Status
7.1. As-Is Purchase
7.2. Release
7.3. Operation of Property Through Closing Date
8. Grant Deed
9. Conditions Precedent
9.1. Seller
9.2. Buyer
9.3. Failure of Buyer's Conditions Precedent
9.4. Waiver
10. Closing Date
11. Escrow
11.1. Time
11.2. Documents
11.3. Procedure
11.4. Possession
11.5. Deliveries Outside Escrow
11.6. Escrow Instructions
11.7. Closing Costs and Prorations
12. Brokerage Commission
13. Condemnation/Casualty
13.1. Right to Terminate
13.2. Election to Terminate
13.3. No Election to Terminate
13.4. Definition of Materiality
13.5. Damage Caused by Tenant
14. Representations and Warranties
14.1. Buyer
14.2. Seller
14.3. No Warranties
15. Miscellaneous
15.1. Indemnity
15.2. Successors and Assigns
15.3. Entire Agreement
15.4. Attorneys' Fees
15.5. Governing Law
15.6. Further Assurances
15.7. Severability
15.8. Notices
15.9. Counterparts
15.10. Time
15.11. Nonwaiver
15.12. Survival
15.13. Captions
15.14. Exhibits
15.15. Construction
15.16. Confidentiality
15.17. Tenant Improvement Allowance
16. Deferred Exchange
EXHIBITS: A - Land
B - Lease
C - Service Contracts
D - Due Diligence Documents
E - Grant Deed
F - General Assignment
G - Non-Foreign Certificate
H - Seller's Date Down Certificate
I - Buyer's Date Down Certificate
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is entered into
as of June ___, 1999 (the "Effective Date"), by and among ARDENSTONE LLC, a
Delaware limited liability company ("Seller"), and PROTEIN DESIGN LABS, INC.,
a Delaware corporation ("Buyer").
THIS AGREEMENT IS ENTERED INTO on the basis of the following facts,
intentions and understandings of the parties:
A. Seller is the owner of the land (the "Land") and the
improvements located thereon (the "Improvements"), commonly known as 34801
Campus Drive/7450 Paseo Padre Parkway and 34781 Campus Drive/7400 Paseo Padre
Parkway, located in Ardenwood Corporate Commons, Fremont, California. The
Land is more particularly described in Exhibit A, attached hereto. The Land
and the Improvements are hereinafter collectively referred to as the "Real
Property."
B. The Real Property is subject to that certain lease (the
"Lease") listed on Exhibit B, attached hereto.
C. Seller desires to sell the Property (as hereinafter defined) to
Buyer, and Buyer desires to purchase the Property from Seller, in accordance
with the terms of this Agreement.
NOW THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Seller and Buyer hereby agree as follows:
Purchase and Sale of Property. Seller shall sell and assign to Buyer,
and Buyer shall purchase and assume from Seller, on the terms, covenants and
conditions set forth in this Agreement, the following described property
(collectively, the "Property"):
Real Property. All of Seller's interest in the Real Property, and
all rights and appurtenances pertaining thereto;
Intangible Property. Seller's interest in any and all intangible
personal property (collectively, the "Intangible Property") arising out of or
in connection with the ownership or operation of the Real Property, including
the right to use the current names of the Real Property, all licenses,
permits, certificates of occupancy and franchises issued to Seller by federal,
state or local municipal authorities relating to the use, maintenance,
occupancy or operation of the Real Property, all warranties given by third
parties with respect to the Real Property (including all warranties given to
Seller under or in connection with construction contracts entered into by
Seller for the construction of Improvements) and all service, equipment,
maintenance and employment agreements (collectively, the "Service Contracts")
entered into by Seller with respect to the Real Property and listed on
Exhibit C, attached hereto; and
Lease. The Lease, together with all security and damage deposits
held by Seller in accordance with the terms of the Lease.
Purchase Price. Buyer shall pay to Seller the purchase price (the
"Purchase Price") in the amount of Thirteen Million Five Hundred
Thirty Thousand Dollars ($13,530,000.00) for the Property. The Purchase Price
shall be paid in the manner described in Section 4.
Escrow. Buyer and Seller shall open an escrow account (the "Escrow")
with First American Title Company ("Escrow Holder") within three (3) business
days after the expiration of the Due Diligence Period.
Payment of Purchase Price. On or before Close of Escrow, Buyer shall
deposit with Escrow Holder by immediately available federal wire transfer or
cashier's check an amount equal to the Purchase Price, plus or minus the
closing adjustments and prorations described in Section 11.7.
Remedies; Liquidated Damages.
Tenant Improvement Allowance. Pursuant to the terms of the Lease,
Seller, as landlord, is obligated to pay to Buyer, as tenant, a tenant
improvement allowance (the "Tenant Improvement Allowance") in the amount of
One Million Eight Hundred Forty-Five Thousand Dollars ($1,845,000.00) upon the
satisfaction of certain conditions set forth therein. With respect thereto,
Buyer, as tenant, and Seller, as landlord, hereby agree that, notwithstanding
anything to the contrary contained in the Lease, (i) in the event that the
transfer of the Property from Seller to Buyer is not consummated due to a
default by Buyer under this Agreement, the amount of the Tenant Improvement
Allowance shall be reduced by Five Hundred Thousand Dollars ($500,000.00) (the
"Liquidated Damages Amount") and Seller shall be entitled to retain the
Liquidated Damages Amount as liquidated damages pursuant to Section 5.3 below
and (ii) Buyer's entitlement to receive the Tenant Improvement Allowance shall
be deferred until (A) the termination of this Agreement or thirty (30) days
after Close of Escrow (whichever is first to occur) and (B) Buyer's
satisfaction of all of the conditions precedent set forth in Section VI.B of
the Work Letter, attached as Exhibit C to the Lease, regarding Seller's
obligation to pay to Buyer the Tenant Improvement Allowance. In the event
that the transfer of the Property from Seller to Buyer is not consummated due
to any reason other than a default by Buyer under this Agreement, the amount
of the Tenant Improvement Allowance shall be One Million Eight Hundred
Forty-Five Thousand Dollars (1,845,000.00).
Remedies. If the transfer of the Property from Seller to Buyer
does not close as a result of a default by Seller under this Agreement,
Buyer's sole remedy shall be either (but not both) (i) reimbursement of all
third party costs incurred by Buyer as a result of entering into this
Agreement (e.g., attorneys' fees) and in performing any due diligence in
connection with the Property, not to exceed Fifty Thousand Dollars
($50,000.00) in the aggregate (with Buyer thereby waiving any other remedy,
including specific performance, which Buyer may have against Seller), or
(ii) an action for specific performance of this Agreement (with Buyer thereby
waiving any other remedy which Buyer may have against Seller at law or in
equity). In addition, provided and on the condition that (i) Buyer is the
tenant under the Lease and (ii) Buyer has satisfied all of the conditions
precedent set forth in Section VI.B of the Work Letter attached as Exhibit C
to the Lease with respect to Seller's obligation to pay to Buyer the Tenant
Improvement Allowance, Seller shall immediately pay to Buyer the Tenant
Improvement Allowance owed to Buyer under the Lease.
LIQUIDATED DAMAGES. IF THE TRANSFER OF THE PROPERTY FROM SELLER
TO BUYER IS NOT CONSUMMATED DUE TO A DEFAULT BY BUYER UNDER THIS AGREEMENT,
SELLER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN WRITING IMMEDIATELY
AND WITHOUT FURTHER OBLIGATION TO BUYER, AND SELLER SHALL HAVE THE RIGHT TO
(1) REDUCE THE TENANT IMPROVEMENT ALLOWANCE DUE TO THE TENANT UNDER THE LEASE
BY AN AMOUNT EQUAL TO THE LIQUIDATED DAMAGES AMOUNT AND (2) RETAIN THE
LIQUIDATED DAMAGES AMOUNT AS LIQUIDATED DAMAGES AND AS SELLER'S SOLE REMEDY
(EXCEPT AS PROVIDED BELOW). THE PARTIES AGREE THAT SELLER'S ACTUAL DAMAGES AS
A RESULT OF BUYER'S DEFAULT UNDER THIS AGREEMENT WOULD BE DIFFICULT OR
IMPOSSIBLE TO DETERMINE, AND THE LIQUIDATED DAMAGES AMOUNT IS THE BEST
ESTIMATE OF THE AMOUNT OF DAMAGES SELLER WOULD SUFFER AS A RESULT OF SUCH
DEFAULT; PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT , AFFECT BUYER'S
RESTORATION OBLIGATIONS UNDER SECTION 6.3.6, OR WAIVE OR AFFECT BUYER'S
INDEMNITY OBLIGATIONS UNDER SECTIONS 6.3.7 AND 12 AND SELLER'S RIGHTS TO THOSE
INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT. THE PAYMENT OF THE LIQUIDATED
DAMAGES AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR
PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT
IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA
CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS
OF CALIFORNIA CIVIL CODE SECTION 3389. THE PARTIES WITNESS THEIR AGREEMENT TO
THIS LIQUIDATED DAMAGES PROVISION BY INITIALING THIS SECTION:
Seller: (_____) Buyer: (_____)
Due Diligence.
Seller's Studies. Seller has provided to Buyer copies of the
documents (the "Due Diligence Documents") listed in Exhibit D, attached
hereto. In addition, within five (5) days after Buyer's written request,
Seller shall make available at Seller's office for Buyer's review all studies,
reports, maps, surveys and other documents and information relating to the
Property in Seller's possession (together with the Due Diligence Documents
hereinafter referred to as the "Due Diligence Materials"); provided, however,
that Seller shall not make available for Seller's review and the Due Diligence
Materials shall not include (i) any proprietary information related to
Seller's ownership of the Property or Seller's financing or proposed financing
of the Property or other documents relating to Seller's venture (including,
without limitation, balance sheets, internal financial reports, lease
proposals and the operating agreement or partnership agreement of Seller),
(ii) any appraisals of the Property, (iii) any offers or solicitations to
purchase, sell or lease the Property, and (iv) any loan documents of Seller or
any correspondence between Seller and Seller's lenders. At Buyer's request,
Seller shall deliver to Buyer copies of specific Due Diligence Materials. The
Due Diligence Materials are for Buyer's use in connection with Buyer's
investigation of the Property. Buyer acknowledges that the Due Diligence
Materials were prepared by or at the direction of others and that, except as
otherwise provided in Section 14.2, Seller is not making any representation or
warranty of any kind with respect to the Due Diligence Materials, including
their accuracy, completeness or suitability for reliance thereon by Buyer.
Survey. Buyer, at its sole cost and expense, shall have the right
to update that certain ALTA survey (the "Survey") of the Real Property
prepared by Kier & Wright, dated September 2, 1998.
Buyer's Inspections. During the period (the "Contract Period")
commencing on the Effective Date and ending on the earlier of Close of Escrow
or termination of this Agreement, Buyer and Buyer's representatives, agents,
consultants and contractors shall have the right to inspect (including the
performance of tests, surveys and other studies, inspections and
investigations) the Property including, without limitation, structural
components of the Improvements, plumbing, sewer/septic system, wells, heating,
ventilation and air conditioning systems, electrical systems and components,
built-in appliances, roofs, soils, foundation, existing pipelines and power
lines (each, a "Buyer Inspection"), pursuant to the following terms and
conditions:
No Default. Buyer shall not be in default of this
Agreement.
Buyer's Expense. Each Buyer Inspection shall be at Buyer's
sole cost and expense.
Licensed and Qualified. The persons or entities performing
the Buyer Inspections shall be properly licensed and qualified and shall have
obtained all appropriate permits for performing relevant tests on the Real
Property and shall have delivered to Seller, prior to performing any tests on
the Real Property or entering the Real Property, copies of insurance policies
or certificates of insurance evidencing that such consultants have obtained
and are maintaining a policy of general commercial liability insurance
(occurrence form) having a combined single limit of not less than One Million
Dollars ($1,000,000.00) per occurrence and workers' compensation insurance
with limits not less than those required by law.
Seller's Approval Rights. Seller shall have the right to
approve of any proposed physical testing or drilling of the Real Property,
which approval may not be unreasonably withheld.
Seller's Representatives. Buyer shall provide Seller with
twenty-four (24) hours' prior written or oral notice of the date and time on
which Buyer proposes to conduct any physical testing or drilling of the Real
Property and Seller shall have right to have one (1) or more representatives
of Seller present during the physical testing or drilling.
Restoration. Buyer, at Buyer's sole cost and expense, shall
immediately restore the Real Property to its condition existing immediately
prior to Buyer's Inspections if, for any reason, the Property is not
transferred by Seller to Buyer. Until restoration is complete, Buyer shall
take all steps necessary to ensure that any conditions on the Real Property
created by Buyer's Inspections do not interfere with the normal operation of
the Real Property, create any dangerous, unhealthy, unsightly or noisy
conditions on the Real Property or violate the terms of the Lease. The
restoration obligation contained in this Section 6.3.6 shall survive the
termination of this Agreement.
Indemnity. Buyer shall indemnify, protect and defend (with
counsel reasonably acceptable to Seller) and hold harmless Seller for, from
and against any and all claims, damages, costs, liabilities and losses
(including mechanics' liens) and expenses (including, without limitation,
attorneys' fees) arising out of any entry by Buyer or its agents,
representatives, consultants or contractors; provided that this indemnity
shall not apply to, and Buyer shall not be obligated to remedy, any pre-
existing conditions, including those discovered by Buyer in any inspection
conducted in connection with this Agreement. Notwithstanding the foregoing,
nothing contained in this Section shall reduce or modify Buyer's remediation
or indemnification obligations contained in the Lease. The indemnity
obligations contained in this Section 6.3.7 shall survive Close of Escrow or
any termination of this Agreement.
Confidentiality. Each Buyer's Inspection, and the results
thereof, shall remain confidential pursuant to the terms of Section 15.16 of
this Agreement.
Designation of Representatives. Seller and Buyer each shall
designate one (1) or more representatives to act for them in scheduling and
arranging visits to and inspections of the Real Property and in coordinating
the delivery of and/or access to the Due Diligence Materials pursuant to
Section 6.1 above. Buyer's Representative and Seller's Representative are
identified in the Summary of Certain Terms. Each party shall have the right
to change its respective representative by notice to the other party given in
accordance with Section 15.8.
Disapproval of Seller's Studies or Buyer's Inspections.
Termination Notice. Buyer shall have the right, at any time
during the period (the "Due Diligence Period") commencing on the Effective
Date and ending at 5:00 p.m. Pacific Daylight Savings Time on the
thirtieth (30th) day after the Effective Date, to disapprove of the results of
Buyer's review of the Due Diligence Materials, Buyer's Inspections of the Real
Property or any aspect of this transaction, by notifying Seller in writing (a
"Termination Notice"). If Buyer fails to provide Seller with a Termination
Notice prior to the expiration of the Due Diligence Period, then Buyer shall
be deemed to have disapproved the results of Buyer's review of the Due
Diligence Materials and Buyer's Inspections. Nothing contained herein shall
prevent Buyer from waiving the condition precedent described in Section 9.2.1
and proceeding with Close of Escrow pursuant to the terms of this Agreement.
Result of Termination Notice. If Buyer delivers a
Termination Notice to Seller during the Due Diligence Period or is deemed to
have disapproved the results of Buyer's review of the Due Diligence Materials
or Buyer's Inspections, then (i) this Agreement, and all of the obligations,
rights and liabilities of Buyer and Seller to each other hereunder (except for
Buyer's restoration obligation under Section 6.3.6, Buyer's indemnity
obligations under this Agreement, and the parties' confidentiality obligations
under Section 15.16) shall terminate; (ii) Buyer shall immediately return to
Seller all originals and copies of the Due Diligence Materials which Buyer or
Buyer's consultants, agents, contractors or representatives received from
Seller or copied from Seller's files and (iii) Buyer shall deliver to Seller,
at no cost to Seller, the updated Survey and any environmental or geotechnical
reports, tests and studies (collectively, the "Buyer Reports") obtained or
conducted by Buyer in connection with Buyer's due diligence of the Real
Property to the extent requested by Seller within five (5) days after Seller's
receipt of the Termination Notice. Buyer makes no representation or warranty
regarding the Buyer Reports, including their accuracy, completeness or
suitability for reliance thereon by Seller.
Title Review. Buyer shall notify Seller in writing (the "Title
Objection Notice") prior to the expiration of the Due Diligence Period if
Buyer objects to the condition of title as shown on a title report (the "Title
Report") for the Real Property issued by First American Title Insurance
Company ("Title Company") or any items shown on the Survey. Buyer shall be
deemed to have approved the condition of title as shown on the Title Report
and the Survey if Buyer fails to deliver to Seller the Title Objection Notice
by the expiration of the Due Diligence Period. If Buyer timely delivers to
Seller the Title Objection Notice, Seller shall notify Buyer in writing within
five (5) business days after Seller's receipt of the Title Objection Notice of
Seller's election to either (i) attempt to cure or satisfy all or some of the
objection(s) (the "Objections") set forth in the Title Objection Notice and/or
(ii) not to cure or satisfy any of the Objections. Seller shall have until
Close of Escrow to cure or satisfy any Objections that Seller elects to cure
or satisfy. If Seller fails to notify Buyer in writing of its election within
the five (5) business day period referenced above, Seller shall be deemed to
have elected not to cure or satisfy all of the Objections. If Seller notifies
Buyer in writing of its election not to cure or satisfy any of the Objections
(or is deemed to have elected not to cure or satisfy the Objections), then
Buyer shall either: (A) waive the Objections and proceed with Close of Escrow
pursuant to all of the terms of this Agreement without any reduction in the
Purchase Price, or (B) terminate this Agreement by written notice to Seller.
Buyer shall notify Seller in writing of its election either to terminate this
Agreement or waive the Objections pursuant to the foregoing sentence on or
before the earlier of the second business day after (i) Buyer's receipt of
Seller's response to the Title Objection Notice or (ii) the expiration of the
five (5) business day period referenced above. If Buyer fails to notify
Seller in writing of its election to terminate this Agreement within the time
period provided above, Buyer shall be deemed to have waived the Objections and
elected to proceed with Close of Escrow.
Modification of Title Report. In the event that Title Company
issues any modification or supplement to the Title Report between the end of
the Due Diligence Period and Close of Escrow that is not the result of
activities of Buyer or any of Buyer's agents, representatives, consultants or
contractors, Buyer shall promptly give Seller written notice of the change
and, if, in Buyer's reasonable judgment, the change materially and adversely
affects the Real Property or Buyer's projected use thereof, Buyer shall have
three (3) days after receipt of the modification or supplement to the Title
Report in which to object thereto by written notice to Seller. If Buyer
objects to such a change, Seller shall have ten (10) days after the date
Seller receives Buyer's objection notice (and, if necessary, Close of Escrow
shall be extended by the number of days necessary to give Seller this full ten
(10) day period) in which to satisfy Buyer's objection or notify Buyer in
writing of its election not to satisfy Buyer's objection. If Seller fails to
satisfy Buyer's objection within the ten (10) day period or notifies Buyer in
writing of its election not to satisfy the objection, then Buyer shall either:
(A) waive the objection and proceed with Close of Escrow pursuant to all of
the terms of this Agreement without any reduction in the Purchase Price, or
(B) terminate this Agreement. Buyer shall notify Seller in writing of its
election either to terminate this Agreement or waive its objection within two
(2) business days after the earlier of expiration of such ten (10) day period
or Buyer's receipt of Seller's written notice election not to cure Buyer's
objection. If Buyer terminates this Agreement pursuant to this Section,
(i) this Agreement, and all of the obligations, rights and liabilities of
Buyer and Seller to each other hereunder (except for Buyer's restoration
obligation under Section 6.3.6, Buyer's indemnity obligations under this
Agreement, and the parties' confidentiality obligations under Section 15.16)
shall terminate; (ii) Buyer shall immediately return to Seller all originals
and copies of the Due Diligence Materials which Buyer or Buyer's consultants,
agents, contractors or representatives received from Seller or copied from
Seller's files and (iii) Buyer shall deliver to Seller, at no cost to Seller,
the updated Survey and any Buyer Reports within three (3) days after Buyer
notifies Seller of its election to terminate this Agreement to the extent
requested by Seller.
Assumption of Bonds. Notwithstanding anything to the contrary
contained in Section 6.6 of this Agreement, Buyer agrees to purchase the
Property subject to outstanding bonds attributable to and unpaid assessments,
appropriately pro-rated and only to the extent not delinquent, that are
assessed against the Property (with no adjustment to the Purchase Price).
Status.
As-Is Purchase. Except as otherwise provided in Section 14.2,
Seller hereby specifically disclaims any warranty, guaranty or representation,
oral or written, past, present or future, of, as to or concerning (i) the
nature and condition of the Property, including, but not by way of limitation,
the water, soil, geology, environmental conditions (including the presence or
absence of any Hazardous Materials (defined below)), and the suitability
thereof for any and all activities and uses which Buyer may elect to conduct
thereon; (ii) the nature and extent of any right-of-way, lease, possessory
interest, lien, encumbrance, license, reservation, condition or otherwise; and
(iii) the compliance of the Property or its operation with any laws,
ordinances or regulations of any government or other body. The sale of the
Property as provided for herein is made on an "AS IS" basis, and Buyer
expressly acknowledges that, in consideration of the agreements of Seller
herein, and except as otherwise expressly specified herein, SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF
LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF CONDITION,
HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY. The term "Hazardous Materials" shall mean any substance: (i) the
presence of which requires investigation or remediation under any federal,
state or local statute, regulation, ordinance, order, action, policy or common
law; (ii) which is or becomes defined as a "hazardous waste," "hazardous
substance," pollutant or contaminant under any federal, state or local
statute, regulation, ordinance, rule, directive or order or any amendments
thereto (hereinafter referred to as "Environmental Laws") including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) and/or the Resource
Conservation and Recovery Act (41 U.S.C. Section 6901 et seq.); (iii) which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of California or any political
subdivision thereof; (iv) which contains gasoline, diesel fuel or other
petroleum hydrocarbons; (v) which contains polychlorinated biphenyls (PCBs),
asbestos or urea formaldehyde foam insulation; or (vi) radon gas.
Release. Excluding any claim that Buyer may have against Seller
as a result of any breach by Seller of any of Seller's representations or
warranties set forth in Section 14.2, effective as of Close of Escrow, Buyer,
for itself and its agents, affiliates, successors and assigns, hereby releases
and forever discharges Seller and its officers, directors, shareholders,
members, partners, agents, affiliates, successors and assigns (collectively,
"Seller's Parties") from, and waives any right to proceed against Seller or
Seller's Parties for, any and all costs, expenses, claims, liabilities and
demands (including attorneys' fees and costs) at law or in equity, whether
known or unknown, arising out of the physical, environmental, economic, legal
or other condition of the Property (collectively, "Claims"), including any
claims for contribution pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Environmental
Laws which Buyer has or may have in the future. Without limiting the
foregoing, Buyer hereby specifically waives the provisions of Section 1542 of
the California Civil Code which provide:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Notwithstanding anything to the contrary contained in this Section 7.2, Buyer
shall not release Seller from any Claims which Buyer, as tenant, may have
against Seller, as landlord, under the Lease that accrue prior to Close of
Escrow, and such claims as against Seller shall survive Seller's assignment to
Buyer of the Lease. Buyer hereby specifically acknowledges that Buyer has
carefully reviewed this Section 7.2, and discussed its import with legal
counsel, is fully aware of its consequences, and that the provisions of this
Section 7.2 are a material part of this Agreement.
Buyer (_____) (_____) agrees.
Operation of Property Through Closing Date. Seller hereby
covenants with Buyer that during the Contract Period:
Leases, Contracts. Seller shall not enter into or amend any
lease, service contract or any other agreement or contract affecting or
relating to the Real Property that will survive Close of Escrow (including the
Lease or any Service Contract) without the prior written consent of Buyer,
which consent shall not be unreasonably withheld or conditioned. Buyer shall
be deemed to have given its consent if Buyer does not deliver a written
response to Seller within five (5) days after Seller's written request for
such consent;
Insurance. All insurance coverage carried by Seller with
respect to the Real Property and in effect as of the Effective Date shall
remain continuously in full force and effect; and
Maintenance. Seller shall continue to maintain the Real
Property in substantially the same manner in which Seller is maintaining the
Real Property as of the Effective Date.
Grant Deed. Seller shall convey to Buyer all of its interest in the
Real Property by a grant deed (the "Deed") in the form of Exhibit E, attached
hereto.
Conditions Precedent. In addition to the documents and funds which must
be placed into Escrow prior to Close of Escrow as stated in Section 11 of this
Agreement, the following are conditions precedent to Close of Escrow:
Seller. The following are conditions precedent to Seller's
obligation to proceed with Close of Escrow:
No Proceedings. No suit, action or other proceeding
(instituted by any party other than Seller) shall be pending which seeks, nor
shall there exist any judgment the effect of which is, to restrain the
purchase and sale of the Property;
Buyer's Representations True and Correct. Buyer's
representations and warranties set forth herein shall be true and correct in
all material respects on Close of Escrow;
Performance of Covenants. Buyer shall have performed all of
Buyer's covenants and agreements contained in this Agreement that are required
to be performed by Buyer prior to or on Close of Escrow; and
Corporate Resolutions. Buyer shall have provided to Seller
and Title Company prior to Close of Escrow certified copies of corporate
resolutions approving the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, together with such other
certificates of incumbency and other evidences of corporate or regulatory
authority, including certificates of good standing, as Seller or Title Company
may reasonably require.
Buyer. The following are conditions precedent to the Buyer's
obligation to proceed with Close of Escrow:
Satisfaction with Due Diligence. Buyer's inspection and
approval during the Due Diligence Period of the Due Diligence Materials, the
Service Contracts, the updated Survey and all other physical, environmental,
legal and any other matters relating to the Property that Buyer may elect to
investigate.
Title. Buyer's inspection and approval or deemed approval
of all title and survey matters relating to the Property within the time
periods provided in Sections 6.6 and 6.7 and Escrow Holder shall be ready,
willing and able to insure Buyer's fee title interest in the Property subject
only to the exceptions approved (or deemed approved) by Buyer pursuant to
Sections 6.6 and 6.7 or those caused by or attributable to the acts of Buyer
or its consultants.
Financing Contingency.
Loan Commitment. Buyer's receipt prior to the
sixtieth (60th) day after the Effective Date of a commitment (the "Loan
Commitment") from a lender acceptable to Buyer pursuant to which the lender
commits to lend to Buyer (the "Loan") an amount equal to sixty-five percent
(65%) of the Purchase Price at a fixed interest rate not to exceed eight
percent (8%), compounded monthly. The Loan shall have a term of not less than
five (5) years and be amortized over twenty (20) year period. The Loan shall
be secured by a first priority deed of trust on the Real Property. The
contingency described in this Section 9.2.3.a is hereinafter referred to as
the "Financing Contingency."
Conditional Commitment Letter. Within thirty (30)
days after the Effective Date, Buyer shall either (i) provide to Seller
evidence reasonably acceptable to Seller that Buyer has obtained the Loan
Commitment, subject only to the lender's review and approval of certain third
party reports regarding the condition of the Property and the estimated value
of the Property (e.g., Phase I Report, property condition assessment,
appraisal) and other commercially reasonable conditions or (ii) waive the
Financing Contingency by written notice to Seller. If Buyer fails to provide
to Seller the evidence described in subsection (i) above or waive the
Financing Contingency by written notice to Seller, then Seller shall have the
right to terminate this Agreement by written notice to Buyer within five (5)
business days after the expiration of the thirty (30) day period referenced
above. Failure by Seller to terminate this Agreement within the time period
provided above shall be deemed a waiver by Seller of its right to terminate
this Agreement pursuant to this Section.
Conditions as of Closing. As of Close of Escrow:
No Proceedings. No suit, action or other proceeding
(instituted by any party other than Buyer) shall be pending which seeks, nor
shall there exist any judgment the effect of which is, to restrain the
purchase and sale of the Property;
Seller's Representations True and Correct. Seller's
representations and warranties set forth in this Agreement shall be true and
correct in all material respects; and
Performance and Covenants. Seller shall have
performed all of the covenants and agreements herein that Seller is required
to perform on or before Close of Escrow.
Resolutions. To the extent requested by Buyer or Title
Company, Seller shall have provided to Buyer and Title Company at Close of
Escrow with evidence of authority to transfer the Property to Buyer.
Failure of Buyer's Conditions Precedent. If any of Buyer's
conditions precedent described in Section 9.2 have not been satisfied, waived
or deemed waived by the time provided therein, then, except in the case of a
failure of the condition precedent in Section 9.2.4.c or a failure of the
condition precedent set forth in Section 9.2.4.b. due to any reason other than
a change in circumstances over which Seller has no reasonable control (either
of which failure shall constitute a default by Seller under this Agreement),
this Agreement shall terminate. If Close of Escrow fails to occur due to a
default under this Agreement by either Seller or Buyer, the parties'
respective remedies shall be as described in Section 5 hereof.
Waiver. Notwithstanding anything to the contrary contained in
this Agreement, the parties' participation in Close of Escrow shall be deemed
a waiver of (i) each party's ability to terminate this Agreement on the basis
of any failure of any conditions precedent and (ii) each party's right to seek
damages from the other party for the breach of any representations, warranty
or covenant of which the non-breaching party had actual knowledge prior to
Close of Escrow; provided, however, that such waivers shall not be deemed to
waive a party's right to such damages for any subsequently discovered breach
of any representation, warranty or covenant made by the other party to this
Agreement, subject to the express limitations provided in Section 15.12. For
purposes of this Section 9.4, a party shall be deemed to have "knowledge" of a
misrepresentation or breach of warranty or covenant if either it, or any of
its consultants in connection with this Agreement (including, without
limitation, in Buyer's case, Buyer's Representative), has such knowledge.
Closing Date. The close of Escrow (the "Close of Escrow") shall occur
on the fifteenth (15th) day after the satisfaction or waiver of the conditions
precedent set forth in Sections 9.2.1, 9.2.2 and 9.2.3 above (the "Scheduled
Closing Date"); provided, however, so long as it is acceptable to Buyer's
lender, Seller shall have the right to delay the Scheduled Closing Date for up
to sixty (60) days by written notice to Buyer to the extent necessary in order
to cure any Objections. The day on which Escrow actually closes is
hereinafter referred to as the "Closing Date."
Escrow.
Time. Close of Escrow shall occur when all documents and funds
specified in this Section 11 have been deposited into Escrow. The failure of
Seller or Buyer to be in a position by the Scheduled Closing Date to fulfill
their respective obligations with respect to Close of Escrow and thus enable
Title Company to cause Close of Escrow to occur on the Scheduled Closing Date
shall constitute a default by the party so failing.
Documents. On or before the business day immediately preceding
the Scheduled Closing Date, the parties shall deposit into Escrow the funds
and documents described below.
Seller. Seller shall deposit the following:
Deed. A duly executed and acknowledged Deed,
conveying to Buyer all of its interest in the Real Property;
Assignment. Two (2) duly executed counterparts of a
General Assignment (the "Assignment") in the form of Exhibit F, attached
hereto, transferring to Buyer all of Seller's interest in the Lease and
Intangible Property;
Non-Foreign Person Certificate. A duly executed non-
foreign person certificate (the "Non-Foreign Person Certificate") under
Section 1445 of the Internal Revenue Code in the form of Exhibit G, attached
hereto;
Form 590-RE. A duly executed Withholding Exemption
Certificate for Real Estate Sales (Form 590-RE) (the "Form 590-RE");
Seller's Date Down Certificates. A Seller's Date Down
Certificate ("Seller's Date Down Certificate") in the form of Exhibit H,
attached hereto; and
Additional Documents. Such additional documents and
funds, including without limitation, escrow instructions consistent with the
terms and conditions of this Agreement, as may be reasonably required of
Seller to close the transaction in accordance with this Agreement.
Buyer. Buyer shall deposit the following:
Purchase Price. The Purchase Price, plus or minus the
closing adjustments and prorations due hereunder;
Assignment. Two (2) duly executed original
counterparts of the Assignment;
Buyer's Date Down Certificate. A duly executed
Buyer's Date Down Certificate in the form of Exhibit I, attached hereto; and
Additional Documents. Such additional documents and
funds, including without limitation, escrow instructions consistent with the
terms and conditions of this Agreement, as may be reasonably required of Buyer
to close the transaction in accordance with this Agreement.
Procedure. Escrow Holder shall close the Escrow as follows:
Record Deed. Record the Deed in the Official Records of
Alameda County, California (instructing the County Recorder not to affix the
amount of any documentary transfer taxes to the Deed but to attach a separate
statement to the Deed after recording) and deliver conformed copies thereof to
Buyer and Seller;
Purchase Price. Deliver to Seller by wire transfer to the
account designated by Seller in writing, the Purchase Price, minus prorations
and closing costs;
Additional Deliveries to Seller. Deliver to Seller one
(1) fully executed original of the Assignment and Buyer's Date Down
Certificate; and
Additional Deliveries to Buyer. Deliver to Buyer (i) one
(1) fully executed original of the Non-Foreign Certificate, Assignment, Form
590-RE, and Seller's Date Down Certificate, and (ii) the owner's title policy
purchased by Buyer.
Possession. To the extent Buyer is not already in possession of
the Property at Close of Escrow as the tenant under the Lease, Seller shall
deliver possession of the Property to Buyer at Close of Escrow.
Deliveries Outside Escrow. Upon Close of Escrow, Seller shall
deliver (or shall have previously delivered) to Buyer, without any
representation as to accuracy or completeness, the following items to the
extent in Seller's possession:
Keys; Security Systems. Keys to all buildings located on
the Real Property and access codes to any security systems comprising part of
the Property;
Approvals. Originals or, to the extent originals are not
available, copies of all governmental licenses, permits and approvals relating
to the occupancy or use of the Real Property;
Project Agreements and Project Documents. Originals, or to
the extent originals are not available, copies of all construction drawings
and specifications (including, without limitation, structural, electrical,
HVAC, mechanical and plumbing plans and specifications) and any addenda
thereto, and all other blueprints, architectural documents, operating manuals
and similar documents, landscaping plans, development plans and shop drawings
relating to the Improvements; and
Warranties. Originals or, to the extent originals are not
available, copies of all existing warranties given by third parties with
respect to the Real Property that are in Seller's possession.
Escrow Instructions. This Agreement shall serve as escrow
instructions and an executed copy of this Agreement shall be deposited by
Seller and Buyer with Escrow Holder following the execution and delivery
hereof. The parties agree to execute for the benefit of Escrow Holder such
additional escrow instructions as required, provided that the additional
escrow instructions do not change the terms of this Agreement but merely offer
protection to Escrow Holder. Seller and Buyer hereby designate Escrow Holder
as the "Reporting Person" for the transaction pursuant to Section 6045(e) of
the Internal Revenue Code.
Closing Costs and Prorations.
11.7.1. Closing Costs
Buyer's Share of Closing Costs. Buyer shall pay the
following portions of the closing costs (the "Closing Costs") in connection
with transfer of the Property: (A) the title insurance premiums for the
owner's title policy and any endorsements requested by Buyer; (B) the Escrow
fees; and (C) all recording fees incurred in connection with the Deed.
Seller's Share of Closing Costs. Seller shall pay the
following portions of the Closing Costs: (A) all County documentary transfer
taxes; and (B) all recording fees not the responsibility of Buyer pursuant to
Section 11.7.1.a above.
No Close of Escrow. If Close of Escrow does not occur
because of a failure of either Seller or Buyer to comply with its obligations
under this Agreement, the costs incurred in connection with the Escrow,
including the cost of the Title Report and any cancellation fees or other
costs of Title Company, shall be paid by the defaulting party. If Close of
Escrow does not occur because of any other reason, including any termination
of this Agreement by Buyer pursuant to Sections 6.5, 6.6 (other than as a
result of Seller's failure to cure or satisfy any Objection which Seller has
agreed to cure or satisfy) or 6.7, such costs shall be paid equally by Buyer
and Seller.
11.7.2. Lease Rentals
Prorations. All accrued rent (including all accrued
operating expenses and tax escalations and recoveries), charges and revenues
of any kind under the Lease shall be prorated as of 11:59 p.m. Pacific
Daylight Savings Time on the day immediately prior to Close of Escrow (the
"Proration Date") based on the actual number of days in the month in which
Close of Escrow occurs; provided, however, Seller shall receive a credit at
Close of Escrow for any uncollected rent, charges or revenues. If, after
Close of Escrow, either Buyer or Seller receives any revenue to which it is
not entitled under the terms of this Agreement, the party receiving the
revenue shall promptly forward such amount to the other party.
Order of Application. The rents and other payments
collected after the Proration Date from any tenant shall be applied to rents
and/or payments in the order in which the rents and/or payments became due
(i.e., on a FIFO basis).
Re-Proration. After the Closing Date, when periodic tenant
reconciliations are performed (which tenant reconciliations shall be performed
no later than sixty (60) days after the end of the calendar year), Buyer and
Seller shall promptly re-prorate the rent, charges and revenues under the
Lease if any additional rent is due to or owed by the tenant under the terms
of the Lease for the period prior to Close of Escrow. Any amounts due from
one party to the other as a result of the re-proration shall be paid in cash
at the time of the re-proration.
Leasing Costs. All brokerage commissions which are the
obligation of the landlord due in connection with the Lease (collectively,
"Leasing Costs") shall be paid in full by Seller. Buyer shall be responsible
for all brokerage commissions which shall become due after Close of Escrow in
connection with any modifications or amendments to the Lease or any other
leases entered into by Buyer.
Security Deposits. Buyer shall receive a credit against the
Purchase Price equal to all security deposits or any other deposits currently
held by Seller in connection with the Lease.
Real Estate Taxes. All real and personal property taxes,
installments of bonds and special taxes and assessments (collectively,
"Taxes") attributable to the Real Property (to the extent they are not the
obligation of the tenant under the Lease) shall be prorated as of 11:59 p.m.
Pacific Daylight Savings Time on the Proration Date based on a 365-day year
and the assessed value of the Property in effect on the Proration Date.
Seller shall pay or credit Buyer for all such Taxes attributable to periods
through and including the Proration Date. If at any time after the Proration
Date additional or supplemental Taxes (which are not the obligation of the
tenant under the Lease) are assessed against the Real Property by reason of
any event occurring prior to or on the Proration Date, or there is any rebate
of such Taxes (with Seller being responsible for the supplemental or
additional taxes attributable to the period prior to and including the
Proration Date and Buyer being responsible for the supplemental or additional
taxes attributable to the period after the Proration Date), Buyer and Seller
shall promptly re-prorate such Taxes, and any amounts due from one party to
the other shall be paid in cash at that time. All Taxes which the tenant is
obligated to pay to Seller as landlord under the Lease shall be considered to
be rent for purposes of prorating such Taxes and shall be prorated among Buyer
and Seller pursuant to Section 11.7.2.
Utilities. Buyer shall arrange with all utility services
and companies serving the Real Property to have accounts started in the name
of Buyer or its property manager beginning as of the Closing Date. Seller
shall not assign to Buyer any deposits Seller has with any utility services or
companies. Buyer and Seller shall cooperate to have the utility services and
companies make utility readings as of the Proration Date. If readings cannot
be made, utility charges shall be prorated as of 11:59 p.m. Pacific Daylight
Savings Time on the Proration Date based on estimates from the latest bills
available; provided, in any event, Seller shall pay, through and including the
Proration Date, all utility charges attributable to the Real Property that are
not payable directly by the tenant under the Lease. All utility charges
attributable to the Real Property that the tenant is obligated to pay to
Seller as landlord under the Lease shall be considered to be rent for purposes
of prorating such utility charges and shall be prorated among Buyer and Seller
pursuant to Section 11.7.2).
Insurance. Seller shall not assign to Buyer any insurance
policies in connection with the Property.
Owner's Association Dues. All owner's association dues with
respect to the Property shall be prorated as of 11:59 p.m. on the Proration
Date, with Seller being responsible for all owner's association dues
applicable to the period prior to the Closing Date and Buyer being responsible
for all owner's association dues applicable to the period after and including
the Closing Date.
Calculations for Closing. Seller and Buyer shall provide
Escrow Holder with a preliminary calculation of prorations no later than three
(3) days prior to the Proration Date and a final calculation no later than one
(1) day prior to the Proration Date. The final calculation shall be executed
by each party and may be relied upon by Escrow Holder in completing the
closing adjustments and prorations. In the event incomplete information is
available, or estimates have been utilized to calculate prorations as of the
Proration Date, any prorations relating thereto shall be further adjusted and
completed outside of Escrow within sixty (60) days after the Proration Date or
as soon as possible after complete information becomes available to Buyer and
Seller. Any adjustments to initial estimated prorations that are required
upon review of such complete information shall be made by Buyer and Seller,
with due diligence and cooperation, by prompt cash payment to the party
entitled to a credit as a result of such adjustments. Any errors or
adjustments in calculations of the foregoing adjustments shall be corrected or
adjusted as soon as practicable after Close of Escrow; provided, however, the
provisions hereof shall survive Close of Escrow for not more than one (1)
year.
Additional Costs. Buyer and Seller each shall pay their own
legal, lending and other fees and expenses incurred in connection with the
negotiation, documentation and closing of the contemplated transactions.
Brokerage Commission. Upon Close of Escrow, a real estate sales
commission (the "Commission") shall be paid by Seller to Buyer's Broker
(defined in the Summary of Certain Terms) pursuant to a separate agreement
entered into between Seller and Buyer's Broker. Except for Seller's payment
to Buyer's Broker of the Commission (from payment of which Seller shall
indemnify and hold harmless Buyer), each party to this Agreement warrants to
the other that no person or entity can properly claim a right to a real estate
commission, finder's fee or other real estate brokerage-type compensation
(collectively, "Real Estate Compensation") based upon the acts of that party
with respect to the transaction contemplated by this Agreement. Each party
hereby agrees to indemnify, protect and defend the other (by counsel
reasonably acceptable to the party seeking indemnification) against and hold
the other harmless from and against any and all loss, damage, liability or
expense, including costs and reasonable attorneys' fees, resulting from any
claims for Real Estate Compensation by any person or entity based upon such
acts.
Condemnation/Casualty.
Right to Terminate If, before Close of Escrow, all or any portion
of the Real Property is materially (as defined below) damaged or destroyed by
fire or other casualty, or is taken by a material (as defined below)
condemnation or action of eminent domain (or a material condemnation or
eminent domain action has been commenced against all or any portion of the
Real Property), then (i) upon obtaining actual knowledge thereof each party
shall notify the other of the casualty or the condemnation or eminent domain
action and (ii) except as provided in this Section 13, Buyer shall have the
option to terminate this Agreement upon written notice to Seller within five
(5) business days after Buyer's receipt of notice of any casualty or
condemnation or eminent domain action.
Election to Terminate. Provided and on the condition that (i)
Buyer is the tenant under the Lease and (ii) Buyer has satisfied all of the
conditions precedent set forth in Section VI.B of the Work Letter attached as
Exhibit C to the Lease with respect to Seller's obligation to pay to Buyer the
Tenant Improvement Allowance, Seller shall immediately pay to Buyer the Tenant
Improvement Allowance owed to Buyer under the Lease upon Buyer's termination
of this Agreement pursuant to Section 13. Upon termination of this Agreement,
neither Buyer nor Seller shall have any further rights or obligations under
this Agreement (except for Buyer's restoration obligation under 6.3.6, Buyer's
indemnity obligations under this Agreement and the parties' confidentiality
obligations under Section 15.16).
No Election to Terminate. If Buyer does not exercise the option
to terminate this Agreement, or does not have the option pursuant to the
express provisions of this Section 13, neither Buyer nor Seller shall have the
right to terminate this Agreement; however, Buyer shall be entitled to receive
and keep at Close of Escrow all insurance proceeds, in the event of any
casualty that occurs during the Contract Period, and all rights to receive
awards, in the case of a taking by condemnation or eminent domain that occurs
during the Contract Period with respect to the Property, regardless of when
paid and regardless of whether paid to Buyer or Seller, and Close of Escrow
shall be consummated pursuant to the terms hereof. There shall be no
reduction of the Purchase Price as a result of the casualty or condemnation.
Definition of Materiality.
Casualty. For purposes of this Agreement, the Real Property
shall be deemed "materially" damaged by fire or other casualty if (i) in the
reasonable opinion of Seller, it would take more than ninety (90) days from
after the date of the damage to repair the damage, or (ii) the cost of
repairing the damage caused by the fire or other casualty which is not covered
by insurance is reasonably estimated by Seller to exceed Two Hundred
Fifty Thousand Dollars ($250,000.00). In addition, a casualty shall be deemed
material if the damage or loss is uninsured and the cost to repair the
Property to its condition prior to the occurrence of the damage or destruction
is reasonably estimated by Seller to exceed the amount of Two Hundred
Fifty Thousand Dollars ($250,000.00).
Condemnation. For purposes of this Agreement, a material
condemnation or action in eminent domain shall be deemed to have occurred only
if, (i) the taking would materially impair access or require any substantial
reconfiguration of the Improvements located on the Real Property, or (ii) the
amount of the award as reasonably estimated by Seller would exceed Two Hundred
Fifty Thousand Dollars ($250,000.00).
Damage Caused by Tenant. Notwithstanding anything to the contrary
contained in this Section, if the Real Property is damaged due to the gross
negligence or willful misconduct of the tenant under the Lease, Buyer shall
not have the right to terminate this Agreement.
Representations and Warranties.
Buyer. Buyer represents and warrants to Seller the following:
Buyer's Investigation. Buyer has (or will have) examined,
inspected and conducted its own investigation of all matters with respect to
the physical and environmental condition of the Property, taxes, bonds,
permissible uses, zoning, covenants, conditions and restrictions and all other
matters which in Buyer's judgment bear upon the value and suitability of the
Property for Buyer's purposes. Buyer acknowledges that, except as otherwise
provided herein, Seller has not made any representation of any kind in
connection with soils, environmental or physical conditions on, or bearing on,
the use of the Real Property or the financial condition or creditworthiness of
any tenant, and Buyer is relying solely on Buyer's own inspection and
examination of such items and not on any representation of Seller.
Formation and Standing. Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
Authority. Buyer has the full power to execute and deliver
and fully perform its obligations under this Agreement; and this Agreement
constitutes a valid and legally binding obligation of Buyer, enforceable in
accordance with its terms.
No Violation. Neither this Agreement nor anything provided
to be done hereunder violates or shall violate any contract, agreement or
instrument to which Buyer is a party, the effect of which shall be to prohibit
or to seek or purport to prohibit Buyer from fulfilling its obligations under
this Agreement.
No Assignment. Buyer has not made (i) a general assignment
for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy
or suffered the filing of an involuntary petition by Buyer's creditors;
(iii) suffered the appointment of a receiver to take possession of all or
substantially all of Buyer's assets; (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Buyer's assets; (v) admitted
in writing its inability to pay its debts as they become due; or (vi) made an
offer of settlement, extension or composition to its creditors generally.
Seller. Seller represents and warrants to Buyer the following:
Authority. Seller has the full power to execute and deliver
and fully perform its obligations under this Agreement; and this Agreement
constitutes a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
No Conflicts. There is no agreement to which Seller is a
party or, to Seller's actual knowledge, which is binding on Seller which is in
conflict with this Agreement.
No Assignment. Seller has not (i) made a general assignment
for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy
or suffered the filing of an involuntary petition by its creditors;
(iii) suffered the appointment of a receiver to take possession of all or
substantially all of its assets; (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of its 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.
No Additional Leases. Seller has not entered into or
assumed any lease relating to the Property that is in effect as of the
Effective Date except for the Lease.
Good Standing. Seller is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
No Warranties. Except for those representations and warranties
expressly set forth in Section 14.2, the parties understand and acknowledge
that no person acting on behalf of either Seller or Buyer is authorized to
make, and by execution hereof each party hereto acknowledges that no person
has made, any representation or warranty regarding the Property, or the
transaction contemplated herein, or regarding the Lease or the zoning,
construction, physical condition or other status of the Real Property. No
representation, warranty, agreement, statement, guaranty or promise, if any,
made by any person acting on behalf of either Seller or Buyer which is not
contained in this Agreement shall be valid or binding on that party.
Miscellaneous.
Indemnity. Seller shall indemnify, protect and defend (by counsel
reasonably acceptable to Buyer) and hold harmless Buyer from any Leasing Costs
payable in connection with the Lease. Buyer shall indemnify, protect and
defend (by counsel reasonably acceptable to Seller) and hold harmless Seller
from any brokerage commissions relating to any modification or amendment to
the Lease or the Property after Close of Escrow (other than Leasing Costs
payable by Seller pursuant to Section 11.7.4). The indemnification
obligations set forth in this Section 15.1 shall survive Close of Escrow.
Successors and Assigns. This Agreement shall be binding upon the
heirs, executors, administrator, and successors and assigns of Seller and
Buyer. Notwithstanding the forgoing, neither party may assign its rights and
obligations under this Agreement without the prior written consent of the
other party (which consent may be withheld in each party's sole discretion);
provided, however, (i) Seller may assign this Agreement without Buyer's
consent to any member of Seller in connection with a transfer of a portion of
the Property by Seller to a member in order to facilitate an Exchange (defined
in Section 16) by the member, (ii) Seller may assign this Agreement without
Buyer's consent to effectuate an Exchange, and (iii) Buyer may assign this
Agreement without Seller's consent to an Affiliate or to effect an Exchange.
For purposes of this Section 15.2, an "Affiliate" means (a) an entity that
directly or indirectly controls, is controlled by or is under common control
with Buyer or (b) an entity at least a majority of whose economic interest is
owned by Buyer; and "control" means the power to direct the management of such
entity through voting rights, ownership or contractual obligations. Any
assignment by Buyer (to which Seller has consented or for which Seller's
consent is not required) shall not be effective against Seller until Buyer
delivers to Seller a fully executed copy of the assignment instrument pursuant
to which the assignee (i) assumes and agrees to perform for the benefit of the
Seller all of the obligations of Buyer under this Agreement and (ii) makes the
warranties and representations required of Buyer under this Agreement. No
assignment by Buyer shall result in Buyer being released from any obligations
of Buyer to Seller under this Agreement. Any assignment in violation of this
Section shall be void.
Entire Agreement. This Agreement contains all of the covenants,
conditions and agreements between the parties and shall supersede all prior
correspondence, agreements and understandings, both oral and written.
Attorneys' Fees. Should either party employ attorneys to enforce
any of the provisions of this Agreement or to protect its interest in any
manner arising under this Agreement, or to recover damages for breach of this
Agreement, or to enforce any judgment relating to this Agreement and the
transaction contemplated hereby, the prevailing party shall be entitled to
reasonable attorneys' fees and court costs; provided, however, if Buyer
defaults hereunder the Liquidated Damages Amount shall be deemed to include
all attorneys' fees, court costs and all other amounts to which Seller
otherwise may be entitled under this Section 15.4, and Seller shall not be
entitled to recover any additional attorneys' fees and court costs under this
Agreement.
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
Further Assurances. Seller and Buyer shall promptly perform,
execute and deliver or cause to be performed, executed and/or delivered at or
after Close of Escrow any and all acts, deeds and assurances, including the
delivery of any documents, as either party or Escrow Holder may reasonably
require in order to carry out the intent and purpose of this Agreement.
Severability. In case any one (1) or more of the provisions
contained in this Agreement for any reason is held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
Notices.
Means/Receipt. All notices or other communications required
or permitted hereunder shall be in writing, and shall be personally delivered
or sent by national overnight courier service (next business day delivery) or
facsimile, and shall be deemed received upon the earlier of (i) if personally
delivered, the date of delivery to the address of the person to receive such
notice, (ii) if sent by national overnight courier service (next business day
delivery), one (1) business day after delivery to such courier service, or
(iii) if given by facsimile, upon electronic evidence of receipt. Notices or
other communications may not be sent by U.S. Mail.
Addresses. Any notice to Seller shall be sent to Seller at
Seller's Address, as stated on page (i) of this Agreement. Any notice to
Buyer shall be sent to Buyer at Buyer's Address, as stated on page (i) of this
Agreement.
Counterparts. This Agreement may be executed in one (1) or more
counterparts, and all the counterparts shall constitute but one (1) and the
same agreement, notwithstanding that all parties hereto are not signatory to
the same or original counterpart.
Time. Time is of the essence of every provision contained in this
Agreement.
Nonwaiver. Unless otherwise expressly provided in this Agreement,
no waiver by Seller or Buyer of any provision hereof shall be deemed to have
been made unless expressed in writing and signed by Seller or Buyer, as the
case may be. No delay or omission in the exercise of any right or remedy
accruing to Seller or Buyer, as the case may be, upon any breach under this
Agreement shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by Seller or
Buyer of any breach of any term, covenant or condition herein stated shall not
be deemed to be a waiver of any other term, covenant or condition.
Survival. Each of the terms, covenants and conditions of this
Agreement contained in Sections 6.3.7, 7.1, 7.2, 11.7.2, 11.7.3, 11.7.4,
11.7.6, 11.7.7, 11.7.9, , 11.7.10, 14, and 15 shall survive the delivery of
the Deed to Buyer and shall not be deemed to have merged into the Deed;
provided, however, that unless Seller or Buyer, as the case may be, receives a
written notice regarding an alleged breach of any representation, warranty or
covenant of Seller or Buyer contained in the Sections referenced above on or
prior to the date that is one (1) year after Close of Escrow, then Seller's or
Buyer's obligations and liability with respect to such representation,
warranty or covenant, as applicable, shall terminate on the date that is one
(1) year after Close of Escrow.
Captions. Section titles or captions contained in this Agreement
are inserted as a matter of convenience and for reference, and in no way
define, limit, extent or describe the scope of this Agreement.
Exhibits. All exhibits attached hereto shall be incorporated
herein by reference as if set out herein in full.
Construction. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement
or any amendment or exhibits hereto.
Confidentiality. Neither Buyer nor Seller shall make any public
announcement or disclosure of any information related to this Agreement to
outside brokers or third parties, before or after the Close of Escrow, without
the specific prior written consent of the other, except for such disclosures
to the parties' lenders, creditors, partners, members, officers, employees,
agents, consultants, attorneys, accountants, and exchange facilitators as may
be necessary to permit each party to perform its obligations hereunder and as
required to comply with applicable laws and/or rules of any exchange upon
which a party's shares may be traded; provided, however, Seller may disclose
the existence of this Agreement and the contents of any Due Diligence
Materials to other potential purchases of the Property. Seller's obligations
under this Section 15.16 shall terminate upon the termination of this
Agreement (other than by the Close of Escrow). Buyer's obligations under this
Section 15.16 shall survive the termination of this Agreement; provided,
however, Buyer's obligations under this Section 15.16 shall terminate upon
Close of Escrow.
Tenant Improvement Allowance. Buyer acknowledges that Seller is
assigning to Buyer all of its obligations under the Lease, including, without
limitation, the obligation to pay to the tenant under the Lease the Tenant
Improvement Allowance in the amount of One Million Eight Hundred
Forty-Five Thousand Dollars ($1,845,000.00). There shall be no adjustment to
the Purchase Price as the result of Buyer's assumption of Seller's obligation
to pay the outstanding Tenant Improvement Allowance to the tenant under the
Lease.
Deferred Exchange. Either party may consummate the purchase or sale of
the Property as part of a so-called like kind exchange (the "Exchange")
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended,
provided that (i) Close of Escrow shall not be delayed or affected by reason
of the Exchange, nor shall the consummation or accomplishment of the Exchange
be a condition precedent or condition subsequent to either party's obligations
under this Agreement; (ii) the party electing to consummate this transaction
as part of an Exchange (the "Electing Party") shall effect the Exchange
through an assignment of this Agreement, or its rights under this Agreement,
to a qualified intermediary; (iii) the other party (the "Accommodator") shall
not be required to take an assignment of the purchase agreement for the
relinquished property or be required to acquire or hold title to any real
property for purposes of consummating the Exchange; and (iv) at Close of
Escrow the Electing Party shall pay any additional costs that would not
otherwise have been incurred by the Accommodator had the Electing Party not
consummated this transaction through the Exchange. The Accommodator shall not
by this Agreement or acquiescence to the Exchange proposed by the Electing
Party have its rights under this Agreement affected or diminished in any
manner or be responsible for compliance with or be deemed to have warranted to
the Electing Party that the Exchange in fact complies with Section 1031 of the
Internal Revenue Code of 1986, as amended.
[No further text on this page.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
one or more counterparts, on the date set forth above, effective as of the
date first above written.
"Seller"
ARDENSTONE LLC,
a Delaware limited liability company
By:
Name:
Its:
By:
Name:
Its:
"Buyer"
PROTEIN DESIGN LABS, INC.,
a Delaware corporation
By:
Name:
Its:
By:
Name:
Its:
EXHIBIT A
LAND
REAL PROPERTY in the City of Fremont, County of Alameda, State of California,
described as follows:
Parcel 16, Parcel Map 4483, filed March 28, 1985 in
Book 152, Pages 78 through 82 of Maps, Alameda County
Records.
A.P. Nos. 543-0439-108
543-0439-109
EXHIBIT B
LEASE
That certain Industrial Lease dated as of July 1, 1997, entered
into between Ardenstone LLC, a Delaware limited liability company, and Protein
Design Labs, Inc., a Delaware corporation, as amended.
EXHIBIT C
SERVICE CONTRACTS
EXHIBIT D
DUE DILIGENCE DOCUMENTS
EXHIBIT E
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Attn:
THE AREA ABOVE IS RESERVED FOR RECORDER'S USE
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
______________________, a __________________ grants, transfers and assigns to
______________________, a __________________, all of its interest in that
certain real property located in the City of _______________, County of
_______________, State of California, and which is more particularly described
in Schedule 1, attached hereto and incorporated herein by this reference,
subject to all matters of record in the Official Records of _________________
County, California.
IN WITNESS WHEREOF, this Grant Deed has been executed this day
of _______________, ____.
a
By:
Name:
Its:
Date:
MAIL ALL TAX STATEMENTS TO:
________________________________________
________________________________________
________________________________________
________________________________________
EXHIBIT F
GENERAL ASSIGNMENT
THIS GENERAL ASSIGNMENT (this "Assignment") is executed as of
_______________, _____, by and among ________________________, a
_________________ ("Assignor"), and _____________________________, a
_______________ ("Assignee"), with reference to the following facts:
1. Concurrently herewith, Assignor is conveying to Assignee certain
real property, together with all improvements thereon, situated in City of
________________, County of _______________, State of California, as described
on Exhibit 1, attached hereto (collectively, the "Property"), in accordance
with the terms of that certain Agreement of Purchase and Sale (the
"Agreement") dated as of ________________, _____, by and between Assignor and
Assignee. Capitalized terms used herein and not defined herein shall have the
meanings set forth in the Agreement.
2. Assignor desires to assign, transfer and convey to Assignee all of
Assignor's interests in: (i) the Lease listed in Exhibit 2, attached hereto,
and refundable security deposits, if any, posted by the tenant under the
Lease; and (ii) all Intangible Property, including the Service Contracts
listed on Exhibit 3, attached hereto, but only to the extent assignable (all
of the foregoing being referred to herein collectively as "Assigned
Property"). All of the exhibits attached hereto are incorporated herein by
reference thereto.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration in hand paid by Assignee to Assignor, the receipt and
sufficiency of which are hereby acknowledged, Assignor does hereby ASSIGN,
TRANSFER and DELIVER and GRANT, SELL and CONVEY to Assignee all of the
Assigned Property, including, without limitation of the generality of the
foregoing, the following:
(a) The Intangible Property; and
(b) The Lease.
Assignor agrees to indemnify and hold harmless Assignee from all
obligations and liabilities arising prior to the Effective Date (hereinafter
defined) out of Assignor's performance or failure to perform Assignor's
obligations as landlord under the Lease and as owner under the Service
Contracts.
Assignee hereby accepts and agrees to perform all of the terms,
covenants and conditions of the Lease and Service Contracts on the part of the
landlord and owner therein required to be performed, from and after the
Effective Date but not prior thereto, including (i) the obligation to repay to
the tenant under the Lease the security and other deposits, but only to the
extent such deposits have been delivered (or credited) to Assignee and
(ii) the obligation to pay to the tenant under the Lease the outstanding
Tenant Improvement Allowance in the amount of One Million Eight Hundred
Forty-Five Thousand Dollars ($1,845,000.00).
Assignee agrees to indemnify and hold harmless Assignor from all
obligations and liabilities arising from and after the Effective Date out of
Assignee's performance or failure to perform Assignee's obligations as
landlord under the Lease and as owner under the Service Contracts.
This Assignment shall be governed by the laws of the State of
California.
This Assignment shall be effective as of the Closing Date, as such term
is defined under the Agreement (the "Effective Date").
This Assignment may be executed in one (1) or more counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute one (1) agreement.
IN WITNESS WHEREOF, the undersigned have executed this Assignment, on
the date set forth above, as of the Effective Date.
Assignor:
By:
Name:
Its:
By:
Name:
Its:
Assignee:
By:
Name:
Its:
By:
Name:
Its:
EXHIBIT G
NON-FOREIGN CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a buyer of a
U.S. real property interest must withhold tax if the seller is a foreign
person. To inform ________________________________, a __________________
("Buyer"), that withholding of tax is not required upon the disposition of a
U.S. real property interest by ______________________, a __________________
("Seller"), the undersigned hereby certifies the following on behalf of
Seller:
1. Seller is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. Seller's U.S. employer identification number is _________________;
and
3. Seller's office address is _____________________________________.
The undersigned understands that this certification may be disclosed to
the Internal Revenue Service by Buyer and that any false statement the
undersigned has made here could be punished by fine, imprisonment, or both.
Under penalty of perjury, the undersigned declares that they have
examined this certification and to the best of their knowledge and belief it
is true, correct and complete, and the undersigned further declares that they
have the authority to sign this document on behalf of Seller.
By:
Name:
Its:
Dated:
By:
Name:
Its:
Dated:
EXHIBIT H
SELLER'S DATE DOWN CERTIFICATE
This Seller's Date Down Certificate is made and delivered by
_____________________________, a _______________ ("Seller") with reference to
that certain Agreement of Purchase and Sale ("Agreement") dated __________,
____, entered into between Seller and _____________________________.
Seller hereby restates and reaffirms its representations and warranties
set forth in Section 14.2 of the Agreement with full force and effect as if
set forth fully herein and made and delivered on the date hereof without any
exception or qualification.
"Seller"
By:
Name:
Title:
Dated:
EXHIBIT I
BUYER'S DATE DOWN CERTIFICATE
This Buyer's Date Down Certificate is made and delivered by
_________________________, a __________________ ("Buyer") with reference to
that certain Agreement of Purchase and Sale (the "Agreement") dated
October __, 1997, entered into between _____________________________, a
_______________ and Buyer.
Buyer hereby restates and reaffirms its representations and warranties
set forth in Section 14.1 of the Agreement with full force and effect as if
set forth fully herein and made and delivered on the date hereof without any
exception or qualification.
"Buyer"
By:
Name:
Title:
Dated:
By:
Name:
Title:
Dated:
iv.
06/22/99
21.
06/22/99
EXHIBIT A
06/22/99
EXHIBIT B
06/22/99
EXHIBIT C
06/22/99
EXHIBIT D
06/22/99
EXHIBIT E
06/22/99
EXHIBIT F
2.
06/22/99
EXHIBIT G
06/22/99
EXHIBIT H
06/22/99
EXHIBIT I
06/22/99