PURCHASE AGREEMENT
BETWEEN
MARINERS ISLAND CO-TENANCY
AND
KEYNOTE SYSTEMS, INC.
April 25, 2000
TABLE OF CONTENTS
PAGE
1. Agreement of Sale..............................................1
2. Purchase Price.................................................2
3. Deposit........................................................2
3.1. Deposit...................................................2
3.2. Buyer's Default...........................................2
3.3. Seller's Default..........................................3
4. Documents to be Delivered to Buyer.............................3
5. Title..........................................................4
6. Access.........................................................5
6.1. Access....................................................5
6.2. Requirements for Contractors and Inspectors...............6
6.3. Indemnity.................................................6
6.4. No Disclosure.............................................6
6.5. Survival..................................................7
7. Due Diligence Period...........................................7
8. Acceptance of Property "As Is".................................7
9. Conditions to Closing.........................................10
9.1. Buyer's Conditions to Closing............................10
9.2. Seller's Conditions......................................10
10. Closing......................................................11
10.1. Closing Date...........................................11
10.2. Seller's Deposits Into Escrow..........................11
10.3. Buyer's Deposits into Escrow...........................12
10.4. Prorations.............................................12
10.5. Closing Costs..........................................13
10.6. Closing................................................13
10.7. Possession.............................................14
11. Representations and Warranties...............................14
11.1. Representations and Warranties of Seller...............14
11.2. Material Changes; Survival.............................15
11.3. Representations and Warranties of Buyer................15
12. Risk of Loss; Insurance Proceeds; Condemnation...............16
12.1. Insurance..............................................16
12.2. Damage or Destruction..................................16
12.3. Eminent Domain.........................................17
13. Seller's Covenants During Contract Period....................17
13.1. Operation and Management of the Property...............17
13.2. Franklin Lease.........................................17
14. Assignment...................................................18
15. Indemnification..............................................18
16. Miscellaneous................................................18
16.1. Notice.................................................18
16.2. Headings...............................................20
16.3. Covenant of Further Assurances.........................20
16.4. Entire Agreement.......................................20
16.5. Partial Invalidity.....................................20
16.6. No Waiver..............................................20
16.7. Attorneys' Fees........................................20
16.8 Brokers and Finders.....................................21
16.9. Time of the Essence....................................21
16.10. Governing Law; Forum..................................21
16.11. Interpretation........................................21
16.12. Exchange Transaction..................................21
16.13. IRS Form 1099-S Designation...........................22
16.14. Third Party Beneficiaries.............................22
16.15. Compliance With Laws..................................22
16.16. Limitation on Seller's Liability......................22
16.17. Counterparts..........................................23
16.18. Exhibits..............................................23
16.19. Authority.............................................23
LIST OF EXHIBITS
Exhibit A Property Description
Exhibit B Tangible Personal Property
Exhibit C Tenant Estoppel Letter
Exhibit D Bill of Sale
Exhibit E Assignment of Leases
Exhibit F Assignment of Service Contracts
Exhibit G Non-Foreign Certificate (FIRPTA)
Exhibit H Notice to Tenants
Exhibit I List of Leases
PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of the 25th day of April, 2000
("CONTRACT DATE"), by and between FRANKLIN RESOURCES, INC., a Delaware
corporation (as to an undivided 60.00% interest in the Property, as defined
below), WILLIAM WILSON III, a married man (as to an undivided 19.35% interest in
the Property), DAVID R. WORD, a married man (as to an undivided 15.15% interest
in the Property), PETER A. NOSSARDI, a married man (as to an undivided 0.75%
interest in the Property), JILL M. BENITEZ, a married woman (as to an undivided
0.75% interest in the Property), HOWARD E. WOLF, a married man (as to an
undivided 1.00% interest in the Property), JOHN J. HAMILTON III, a married man
(as to an undivided 1.00% interest in the Property), THE BOARD OF TRUSTEES OF
THE LELAND STANFORD JUNIOR UNIVERSITY (as to an undivided 1.00% interest in the
Property), and SAN FRANCISCO MUSEUM OF MODERN ART, a California non-profit
corporation (as to an undivided 1.00% interest in the Property) (each
individually and collectively, "SELLER"), and KEYNOTE SYSTEMS, INC., a Delaware
corporation ("BUYER").
RECITALS
Seller owns and is offering for sale the land and improvements commonly
known as 777 Mariners Island Boulevard in San Mateo, California, and more
completely described below. Buyer has offered to buy the property, and the
parties are entering into this Agreement to set forth the terms and conditions
of the sale to Buyer.
NOW, THEREFORE, in consideration of the foregoing and the agreements set
forth below, the parties hereto agree as follows:
1. AGREEMENT OF SALE. Seller hereby agrees to sell to Buyer and Buyer
hereby agrees to purchase from Seller that certain real property (the "LAND")
described in attached EXHIBIT A, together with the following, which together
with the Land shall be termed the "PROPERTY" herein:
a. the office building and any and all fixtures, parking areas,
landscaping and other improvements located upon the Land (collectively, the
"IMPROVEMENTS");
b. all machinery, equipment, and other tangible personal property
owned by Seller and identified on EXHIBIT B (collectively, the "TANGIBLE
PERSONAL PROPERTY");
c. all right, title and interest of Seller, if any, in and to any
intangible personal property owned, collectively, by all of the individuals and
entities that comprise Seller or in which all of such entities and individuals
otherwise have an interest, and used exclusively in connection with, or relating
solely to, the Property (collectively, the "INTANGIBLE PERSONAL PROPERTY"),
including, to the extent assignable (i) all certificate(s) of occupancy,
building or equipment permits, consents, authorizations, variances, waivers,
licenses, permits, certificates and approvals from any governmental or
quasi-governmental authority with respect to the Land or the Improvements
(collectively the "APPROVALS"), (ii) and all warranties, representations,
guaranties, and miscellaneous rights relating to the ownership, development, use
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and operation of the Land and Improvements (the "WARRANTIES"), and all claims
and causes of action in which all of the individuals and entities comprising
Seller have an interest and that arise from Seller's ownership of the Property;
and
d. All right, title and interest of Seller, as landlord, in and to
the Leases and all right, title and interest of Seller in and to the Service
Contracts (as such terms are hereinafter defined);
e. all easements, rights of way, privileges,licenses, appurtenances
and other rights and benefits of Seller belonging to or related to the Land; and
f. all architectural, mechanical, engineering, as-built and other
plans, specifications and drawings in Seller's possession or control (the
"PLANS"), all surveys and all soil, environmental, engineering, or other reports
or studies in Seller's possession or control (the "REPORTS").
2. PURCHASE PRICE. The purchase price for the Property is EIGHTY MILLION
DOLLARS ($80,000,000) ("PURCHASE PRICE") and shall be paid in cash by Buyer at
the Closing (as defined in Section 10.1 below).
3. DEPOSIT AND DEFAULTS.
3.1 DEPOSIT. Within one (1) business day after the Contract Date,
Buyer shall deposit in escrow with First American Title Company, 1737 N. First
St., Ste. 100, San Jose, CA 95112, Attention: Peg Larkin, Escrow Officer (the
"TITLE COMPANY") the sum, in immediately available funds, of FIVE HUNDRED
THOUSAND DOLLARS ($500,000) (the "INITIAL DEPOSIT"). In addition, if Buyer
accepts the condition of the Property and desires to proceed to Closing as set
forth in Section 7 below, it shall deliver to Title Company, no later than the
expiration of the Due Diligence Period (as defined in Section 7), an additional
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000) in immediately
available funds (the "SECOND DEPOSIT"). The term "DEPOSIT" shall mean the
Initial Deposit, as increased by the Second Deposit, if applicable, together
with all interest earned thereon. The Deposit shall be held in an interest
bearing account for the account of Buyer and shall be disbursed in accordance
with the terms of this Agreement. In the event the sale of the Property is
consummated, the Deposit shall be applied to the Purchase Price. If Buyer elects
to terminate this Agreement pursuant to its terms, prior to the end of the Due
Diligence Period (as defined in Section 7), or if this transaction fails to
close based solely on Seller's default of its obligations hereunder, the Deposit
shall be returned to Buyer.
3.2 BUYER'S FAILURE TO CLOSE. IF BUYER DOES NOT ELECT TO TERMINATE
THIS AGREEMENT PURSUANT TO ITS TERMS, BUT BUYER FAILS TO CONSUMMATE THIS
TRANSACTION ON THE SCHEDULED CLOSING DATE (AS DEFINED IN SECTION 10.1) ON
ACCOUNT OF BUYER'S DEFAULT, SELLER SHALL BE ENTITLED TO THE DEPOSIT AS
LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER'S DAMAGES, IN THE EVENT
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OF A FAILURE BY BUYER TO CONSUMMATE THIS TRANSACTION ON ACCOUNT OF BUYER'S
DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS
BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES IN THE EVENT OF A FAILURE BY BUYER TO CONSUMMATE THIS
TRANSACTION ON ACCOUNT OF BUYER'S DEFAULT. THE PARTIES AGREE THAT THE DEPOSIT IS
NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL
CODE SECTIONS 3275 OR 3369 BUT SHALL BE TREATED AS LIQUIDATED DAMAGES PURSUANT
TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.
Seller: _______________ Buyer: _______________
3.3 SELLER'S DEFAULT. Notwithstanding anything to the contrary
contained in this Agreement, if Seller fails to perform in accordance with the
terms of this Agreement, then Buyer may, as its sole and exclusive remedy
hereunder and at Buyer's option, either (a) terminate this Agreement, in which
event the Deposit shall be returned to Buyer, this Agreement shall be null and
void, and neither party shall have any rights or obligations under this
Agreement, except such rights and obligations as expressly survive the
termination of this Agreement, or (b) provided an action is filed within thirty
(30) days after the scheduled Closing Date, seek specific performance of this
Agreement, but not any damages (whether actual, direct, indirect, consequential,
compensatory, punitive or otherwise). Buyer's failure to seek specific
performance as aforesaid shall constitute its election to proceed under clause
(a) above.
4. DOCUMENTS TO BE DELIVERED TO BUYER. During the Due Diligence Period,
Seller shall provide Buyer with access at its offices at 1400 Fashion Island
Boulevard, Suite 305, San Mateo, California 94404, during regular business
hours, to all information concerning the Property in Seller's possession,
including the items listed below but excluding the Excluded Documents (as
defined below). To the extent Buyer requests from Seller a specific document
(excluding any Excluded Documents) that is not in Seller's possession but is
reasonably accessible to Seller, Seller shall make commercially reasonable
efforts to obtain such document, provided that such reasonable efforts shall not
require Seller to incur more than nominal expenses.
a. SURVEY. Any surveys of the Land in Seller's possession, but
Seller shall not be obligated to have a survey prepared.
b. LEASES. Copies of all existing leases covering any portion of
the Property, any guarantees thereof, and all amendments thereto (the "LEASES"),
together with documents relating to the Leases that are in Seller's possession.
c. TENANT ESTOPPELS. An estoppel certificate, in the form of
attached EXHIBIT C from Franklin Resources, Inc., a Delaware corporation
("FRANKLIN"), only. Buyer acknowledges and agrees that it shall not receive
estoppels from any of the other tenants of the Property.
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d. PROPERTY DOCUMENTS. Reports, Approvals and Plans in Seller's
possession.
e. SERVICE CONTRACTS. Copies of all service, maintenance,
management and other contracts and agreements related to the operation and
management of the Property that will remain in effect after the Closing. All
such agreements and contracts shall be assumed by Buyer at Closing and are
hereinafter are referred to as the "SERVICE CONTRACTS."
f. OPERATING DOCUMENTS. Copies of the real and personal property
tax bills and a statement of income and expenses for the Property for the last
12 months.
Notwithstanding anything in this Section 4 or Section 6 to the contrary,
Seller shall have no obligation to make available to Buyer, and Buyer shall have
no right to inspect or make copies of, any Excluded Documents. As used herein,
"EXCLUDED DOCUMENTS" shall mean any documents involving Seller's financing or
refinancing of the Property, any purchase and escrow agreements and
correspondence pertaining to Seller's acquisition of the Property (other than
documents pertaining to the physical or environmental condition of the
Premises), any documents pertaining to the potential acquisition of the Property
by any past or prospective purchasers (other than documents relating to the
physical or environmental condition of the Premises), any documents in
Franklin's possession that relate to Franklin as a tenant and occupant of the
Property or that relate to Franklin's business operations at the Property, any
third-party purchase inquiries and correspondence, appraisals or economic
evaluations of the Property, Seller's organizational documents and records, any
internal budgets, financial projections or reports prepared by Seller or its
advisors, managers, attorneys, accountants or consultants, exclusively for
Seller or any of its constituent partners or members, and any documents or
materials that are subject to the attorney/client privilege or that are the
subject of a third-party written confidentiality obligation.
5. TITLE. Buyer acknowledges and agrees that it has received and reviewed
that certain Preliminary Report, Order No. 454976-TD, dated as of March 16,
2000, prepared by the Title Company for the Property (the "PRELIMINARY REPORT").
Buyer may also, at its sole cost and expense, during the Due Diligence Period,
obtain an ALTA land survey of the Property. The Preliminary Report and any
survey obtained by Buyer are referred to herein as the "TITLE EVIDENCE." Buyer
and Seller agree that Seller shall have no obligation to cure any exceptions to
title to the Property other than exceptions 14, 17, 18, 19, 20, 21, 22, 23, 24,
25, 27, 28, 29, 30, 31, 32, 33 and 34 (the "DISAPPROVED EXCEPTIONS") (provided,
however, notwithstanding the foregoing, that Seller shall not be obligated to
remove any exception relating to the Leases), the removal of monetary liens
(excluding public liens, such as taxes and special assessments) placed on the
Property by Seller, the payment (by way of proration at Closing) of real
property taxes and assessments that accrue prior to Closing and the execution of
the Title Company's standard owner's affidavit with respect to parties in
possession and work done at the Property during Seller's period of ownership
(collectively, "SELLER'S TITLE OBLIGATIONS"). Exceptions to title that Buyer
causes to appear of record, the exceptions shown in the Preliminary Report
(excluding the Disapproved Exceptions) and exceptions for the Leases are
referred to collectively herein as the "APPROVED EXCEPTIONS." During the Due
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Diligence Period, Buyer shall obtain from the Title Company a commitment (the
"COMMITMENT"), subject only to Seller's performance of Seller's Title
Obligations and the consummation of the transaction contemplated under this
Agreement, to issue at Closing an owner's policy of title insurance in a form
acceptable to Buyer insuring that fee title in the Property is vested in Buyer,
subject only to the Approved Exceptions, with such endorsements as may
reasonably be requested by Buyer (the "TITLE POLICY"). On or before the
expiration of the Due Diligence Period, Buyer shall deliver to Seller a copy of
the Commitment together with a certificate (the "CERTIFICATE"), executed by
Buyer, certifying that Buyer has approved the form of the Title Policy reflected
in the Commitment, including all of the Approved Exceptions. If Buyer fails to
deliver the Commitment and Certificate prior to the expiration of the Due
Diligence Period, all matters evidenced by the Title Evidence (other than
matters that are required to be removed as part of Seller's Title Obligations)
and any matters that Buyer causes to appear of record at or prior to Closing
shall be deemed "Approved Exceptions." If after delivery of the Commitment to
Seller and prior to Closing, the Title Company notifies Buyer of the existence
of a material exception to title to the Property that has first appeared of
record after the date of the Commitment and prior to Closing that was not the
result of any action by Buyer or Seller and is not required to be removed as
part of Seller's Title Obligations, Buyer shall be entitled, as its sole remedy
on account of the existence of such exception, to terminate this Agreement prior
to Closing, whereupon the Deposit shall be returned to Buyer and the parties
shall have no further rights or obligations hereunder, except such rights and
obligations as expressly survive the termination of this Agreement. In all other
events, such exception shall be deemed a "Permitted Exception" and this
Agreement shall remain in full force and effect. For purposes of this Section 5,
exceptions to title shall be deemed "material" if, in the aggregate, such
exceptions would either require an expenditure in excess of $1,000,000 to remove
or would prompt a commercially reasonable buyer to request a reduction in excess
of $1,000,000 in the Purchase Price.
6. DUE DILIGENCE INVESTIGATIONS.
6.1 ACCESS. During the Due Diligence Period, Seller shall afford
Buyer and authorized representatives of Buyer reasonable access, at normal
business hours, to the Property to enable Buyer to perform its inspections and
investigations with respect to the Property. Notwithstanding anything to the
contrary contained herein: (a) Buyer's right of inspection pursuant to this
Section 6.1 shall cause as little disruption as reasonably possible to the
operation of the Property and the operation of the tenant's businesses at the
Property; (b) no inspection shall be undertaken without reasonable prior notice
(oral or written) to Seller of not less than twenty-four (24) hours; (c) Seller
shall have the right to be present at any or all inspections; (d) no entry,
inspection or investigation of the Property shall (i) involve the taking of
samples or other physically invasive procedures without the prior written
consent of Seller; (ii) damage any part of the Property or any personal property
owned or held by Seller, any tenant or any other third party; or (iii) injure or
otherwise cause bodily harm to any person; (e) Buyer shall promptly pay when due
the costs of all tests, investigations, studies and examinations done with
regard to the Property; (f) Buyer shall not permit any liens to attach to the
Property by reason of the exercise of Buyer's rights hereunder; (g) neither
Buyer nor its agents or representatives shall contact any tenants, other than
5
Franklin, without the prior consent of Seller, which shall not be unreasonably
withheld or delayed; and (h) Buyer shall, at its sole cost, fully repair any
damage caused by its inspections, tests or studies at the Property and restore
the Property to its condition as it existed prior to any of Buyer's inspections,
tests or studies. To the maximum extent possible, Buyer shall take steps to
insure that its repairs do not interfere with any tenant's or Seller's
operations at the Property.
6.2 REQUIREMENTS FOR CONTRACTORS AND INSPECTORS. The persons or
entities performing Buyer's RS inspections shall be properly licensed and
qualified and shall have obtained all appropriate permits for performing
relevant tests on the Property and shall have delivered to Seller, prior to
entering or performing any tests on the Property, evidence of proper and
adequate insurance reasonably satisfactory to Seller, with at least Three
Million Dollars ($3,000,000.00) combined, single-limit, comprehensive general
liability coverage.
6.3 INDEMNITY. Buyer shall indemnify, protect, defend and hold
harmless Seller and its members, affiliates, officers, employees and agents, and
each of them, from and against any and all demands, claims, legal or
administrative proceedings, losses, liabilities, damages, penalties, fines,
liens, judgments, costs or expenses whatsoever, including attorneys' fees and
defense costs (collectively, "CLAIMS") arising out of or resulting from Buyer's
inspection of or entry on the Property as provided for in this Section 6;
provided, however, that in no event shall Buyer be liable for any damages,
including any perceived loss of economic value in the Property, resulting solely
from Buyer's discovery of a pre-existing condition affecting the Property.
6.4 NO DISCLOSURE. Buyer acknowledges and agrees that all of the
materials (collectively, the "MATERIALS") that Seller makes available to Buyer
in connection with Buyer's due diligence investigations of the Property are, or
may be, proprietary and confidential in nature and have been or will be made
available to Buyer solely to assist Buyer in determining the feasibility of
purchasing the Property. Buyer agrees not to disclose the Materials or any of
the provisions, terms or conditions of the Materials, or any analyses,
compilations, studies or other documents or records prepared by or on behalf of
Buyer from the Materials or otherwise with respect to the Property, or any other
reports of Buyer (collectively, the "PROPRIETARY INFORMATION"), to any party
outside of Buyer's organization except (a) as necessary to the Broker (as
defined in Section 16.8, below) and to Buyer's attorneys, accountants, lenders,
prospective lenders, investors and/or prospective investors and consultants or
contractors engaged to investigate, inspect or analyze the Property
(collectively, the "PERMITTED OUTSIDE PARTIES"), (b) to the Title Company, or
(c) as may be required by law or court order. Buyer further agrees to notify all
Permitted Outside Parties that the Proprietary Information is to be kept
confidential and not disclosed to third parties and Buyer agrees to use Buyer's
best efforts to cause all Permitted Outside Parties to comply with the
provisions of this Section 6.4. Without limiting the foregoing, Buyer agrees not
to use any of the Proprietary Information for any purpose other than to
determine whether to proceed with the contemplated purchase or, if the Closing
occurs, for the development, operation and ownership of the Property following
the Closing. In permitting Buyer and the Permitted Outside Parties to review the
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Materials to assist Buyer, Seller has not waived any privilege or claim of
confidentiality with respect thereto, and no third-party benefits or
relationships of any kind, either expressed or implied, have been offered,
intended or created by Seller and any such claims are expressly rejected by
Seller and waived by Buyer. If the Closing fails to occur for any reason, other
than Seller's breach of its obligations under this Agreement, Buyer shall
promptly deliver, upon request of Seller, all of the Proprietary Information,
including the Materials, to Seller, provided, however, that to the extent any of
the Proprietary Information is comprised of materials that Seller has delivered
to Buyer which are either originals or materials of which Seller does not have a
duplicate copy, Buyer shall promptly deliver, upon request of Seller, all such
Proprietary Information to Seller even if the Closing fails to occur as a result
of Seller's breach of its obligations under this Agreement.
6.5 SURVIVAL. All of Buyer's obligations under this Article 6 shall
survive the Closing or termination of this Agreement for any cause.
7. DUE DILIGENCE PERIOD. Buyer shall have until 5:00 p.m., California
time, on the first business day thirty (30) days after the Contract Date (the
"DUE DILIGENCE PERIOD") to inspect and investigate the Property, including roof,
plumbing, soils, electrical, sprinkler, water, sewer, mechanical, engineering,
heating, air conditioning and life safety systems, structural integrity of the
Improvements, measurement of the square footage of the Land and Improvements,
legal status and requirements pertaining to the Property (including building
codes, zoning, environmental, public health and fire safety laws), hazardous
substance inspections including preparation of an environmental assessment,
geologic stability, status of leases and contracts affecting the Property,
suitability of the Property for Buyer's purposes and all other matters of
significance to Buyer. Buyer shall, at no additional cost to Seller, provide
Seller, as and when Buyer receives same, with a copy of all due diligence
materials, reports, plans, surveys and inspections performed by or on behalf of
Buyer, which obligation shall survive termination of this Agreement. Buyer shall
order and pay for all costs and expenses with respect to such inspections and
investigations. If Buyer determines in its sole and absolute discretion that the
Property is acceptable and suitable for its purposes and prior to the expiration
of the Due Diligence Period (a) delivers written notice (the "APPROVAL NOTICE")
to Seller of such decision, and (b) delivers to Title Company the Second
Deposit, as required under Section 3, above, this Agreement shall remain in full
force and effect, Buyer shall have no further right to terminate this Agreement,
except as expressly provided to the contrary in this Agreement, and the parties
shall proceed to complete the Closing in accordance with the terms of this
Agreement. In all other events (including, if the Approval Notice seeks to
qualify or modify any of the terms or provisions of this Agreement, including
Section 8, below), this Agreement shall terminate effective as of the expiration
of the Due Diligence Period, the Deposit shall be returned to Buyer, and neither
party shall have any further rights or obligations under this Agreement, except
for such rights and obligations that expressly survive the termination of this
Agreement.
8. ACCEPTANCE OF PROPERTY "AS IS". ACKNOWLEDGING THE PRIOR USE OF THE
PROPERTY AND BUYER'S OPPORTUNITY TO INSPECT THE PROPERTY, BUYER AGREES TO TAKE
THE PROPERTY "AS IS" WITH ALL FAULTS AND CONDITIONS THEREON. ANY INFORMATION,
REPORTS, STATEMENTS, DOCUMENTS OR RECORDS ("DISCLOSURES") PROVIDED OR MADE TO
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BUYER OR ITS CONSTITUENTS BY SELLER, ITS AGENTS, REPRESENTATIVES OR EMPLOYEES
CONCERNING THE ENVIRONMENTAL CONDITION OF THE PROPERTY SHALL NOT CONSTITUTE
REPRESENTATIONS OR WARRANTIES. BUYER SHALL NOT RELY ON SUCH DISCLOSURES, BUT
RATHER, BUYER SHALL RELY ONLY ON ITS OWN INSPECTION OF THE PROPERTY.
ACCORDINGLY, BUYER'S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE PROVISIONS
OF SECTION 7 (DUE DILIGENCE PERIOD) ABOVE, SHALL CONSTITUTE BUYER'S
ACKNOWLEDGMENT AND AGREEMENT TO THE FOLLOWING: (i) BUYER HAS REVIEWED, EVALUATED
AND VERIFIED THE DISCLOSURES AND HAS CONDUCTED ALL INSPECTIONS, INVESTIGATIONS,
TESTS, ANALYSES, APPRAISALS AND EVALUATIONS OF THE PROPERTY (INCLUDING FOR TOXIC
OR HAZARDOUS MATERIALS, SUBSTANCES OR WASTES (DEFINED AND REGULATED AS SUCH
PURSUANT TO SECTIONS 25316 AND 25501 OF THE CALIFORNIA HEALTH & SAFETY CODE, THE
RESOURCE CONSERVATION AND RECOVERY ACT, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE
COMPENSATION AND LIABILITY ACT OR ANY SIMILAR LAWS AND ALL REGULATIONS ISSUED
THEREUNDER)) AS IT CONSIDERS NECESSARY OR APPROPRIATE TO SATISFY ITSELF FULLY
WITH RESPECT TO THE CONDITION AND ACCEPTABILITY OF THE PROPERTY (ALL OF SUCH
INSPECTIONS, INVESTIGATIONS AND REPORTS BEING HEREIN COLLECTIVELY CALLED THE
"INVESTIGATIONS"); (ii) SELLER HAS PERMITTED BUYER ACCESS TO THE PROPERTY; AND
(iii) BUYER HAS COMPLETED ITS DUE DILIGENCE WITH RESPECT TO THE PROPERTY AND THE
DISCLOSURES TO ITS SATISFACTION, IS THOROUGHLY FAMILIAR WITH THE PHYSICAL
CONDITION OF THE PROPERTY, AND IS ACQUIRING THE PROPERTY BASED EXCLUSIVELY UPON
(X) ITS OWN INVESTIGATIONS AND INSPECTIONS OF THE PROPERTY AND THE DISCLOSURES
AND (Y) SELLER'S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER SHALL FURTHER
BE DEEMED TO HAVE ACKNOWLEDGED AND AGREED THAT (A) SELLER, BY MAKING THE
DISCLOSURES AND PERMITTING BUYER TO PERFORM THE INVESTIGATIONS, HAS FULLY
COMPLIED WITH ALL DISCLOSURE REQUIREMENTS UNDER LOCAL, STATE AND FEDERAL LAWS,
INCLUDING THE REQUIREMENTS OF SECTIONS 25359.7 AND 25915, ET SEQ., OF THE
CALIFORNIA HEALTH & SAFETY CODE (COLLECTIVELY, THE "DISCLOSURE LAWS"), AND (B)
BUYER'S RIGHTS AND REMEDIES WITH RESPECT TO THE PROPERTY SHALL BE LIMITED TO THE
RIGHTS AND REMEDIES (INCLUDING ALL CONDITIONS AND LIMITATIONS PLACED THEREON)
EXPRESSLY SET FORTH IN THIS AGREEMENT, AND BUYER HEREBY WAIVES ALL RIGHTS AND
REMEDIES THAT MIGHT OTHERWISE BE AVAILABLE TO BUYER UNDER THE DISCLOSURE LAWS.
FURTHER, BUYER'S DELIVERY OF THE APPROVAL NOTICE PURSUANT TO THE
PROVISIONS OF SECTION 7 (DUE DILIGENCE PERIOD) ABOVE , SHALL CONSTITUTE BUYER'S
ACKNOWLEDGMENT AND AGREEMENT TO THE PROVISIONS OF THIS SECTION 8 AND THAT,
REGARDLESS OF THE CONTENT OF ANY OF THE DISCLOSURES OR ANY STATEMENTS THAT
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SELLER, ITS AGENTS, EMPLOYEE, OFFICERS, CONTRACTORS, PARTNERS OR MEMBERS MAY
HAVE MADE TO BUYER, ITS AGENTS, EMPLOYEE, OFFICERS, CONTRACTORS, PARTNERS OR
MEMBERS PRIOR TO OR DURING THE DUE DILIGENCE PERIOD, SELLER HAS NOT MADE, DOES
NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO: (1) THE NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (2) THE
INCOME TO BE DERIVED FROM THE PROPERTY; (3) THE SUITABILITY OF THE PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY CONDUCT THEREON; (4) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (5)
THE HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY; OR (6) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 11.1 OF THIS
AGREEMENT, ANY OTHER MATTER WITH RESPECT TO THE PROPERTY, AND BUYER SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR WASTES, AS DEFINED BY THE
U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., OR ANY HAZARDOUS
SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION
AND LIABILITY ACT OF 1980 ("CERCLA"), AS AMENDED, AND REGULATIONS PROMULGATED
THEREUNDER. BUYER, ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE
NOT TO MAKE ANY CLAIM OR BRING ANY COST RECOVERY ACTION OR CLAIM FOR
CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST SELLER (COLLECTIVELY OR
INDIVIDUALLY) OR ITS RELATED ENTITIES, AND ITS AND THEIR MEMBERS, MANAGERS,
PARTNERS, DIRECTORS, OFFICERS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES, AGENTS,
EMPLOYEES, REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, "SELLER
AND ITS AFFILIATES") BASED ON, (x) ANY FEDERAL, STATE, OR LOCAL ENVIRONMENTAL OR
HEALTH AND SAFETY LAW OR REGULATION, INCLUDING CERCLA OR ANY STATE EQUIVALENT,
OR ANY SIMILAR LAW NOW EXISTING OR HEREAFTER ENACTED; (y) ANY DISCHARGE,
DISPOSAL, RELEASE, OR ESCAPE OF ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON,
AT, TO, OR FROM THE PROPERTY; OR (z) ANY ENVIRONMENTAL CONDITIONS WHATSOEVER ON,
IN, UNDER, OR IN THE VICINITY OF THE PROPERTY. EXCEPT WITH RESPECT TO ANY CLAIMS
ARISING OUT OF ANY BREACH OF COVENANTS, REPRESENTATIONS OR WARRANTIES SET FORTH
IN THIS AGREEMENT OR THE DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT,
BUYER, ON BEHALF OF ITSELF AND ITS PARTNERS, MEMBERS, MANAGERS, DIRECTORS,
OFFICERS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES, AGENTS, EMPLOYEES,
REPRESENTATIVES, SUCCESSORS, HEIRS AND ASSIGNS HEREBY RELEASES, SELLER AND ITS
AFFILIATES, FROM ANY AND ALL CLAIMS OF ANY KIND WHATSOEVER, KNOWN OR UNKNOWN,
9
WITH RESPECT TO ANY ASPECT OF THE PROPERTY, INCLUDING THE FOREGOING MATTERS, AND
SPECIFICALLY WAIVES WITH RESPECT TO ALL SUCH MATTERS THE PROVISIONS OF
CALIFORNIA CIVIL CODE SECTION 1542 , AND ANY COMPARABLE LAW APPLICABLE IN THE
STATE WHERE THE PROPERTY IS LOCATED, REGARDING THE MATTERS COVERED BY A GENERAL
RELEASE, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
BUYER AND SELLER REPRESENT AND ACKNOWLEDGE THAT THIS SECTION 8 WAS EXPLICITLY
NEGOTIATED AND BARGAINED FOR AS A MATERIAL PART OF BUYER'S CONSIDERATION BEING
PAID. Terms appearing in this Section 8 in all capital letters that have been
defined elsewhere in this Agreement shall have the meanings set forth in such
definitions.
9. CONDITIONS TO CLOSING.
9.1. BUYER'S CONDITIONS TO CLOSING. Buyer's obligation to purchase
the Property is conditioned upon the satisfaction of each of the following
conditions each of which is for the exclusive benefit of Buyer. Buyer may, at
any time or times before the Closing, waive one or more of the following
conditions, without affecting its rights and remedies with respect to the
remaining conditions.
9.1.1 Seller's performance of all its obligations hereunder,
and the truth, completeness and accuracy, in all material respects, of each
representation and warranty made by Seller as of the Contract Date and the
Closing.
9.1.2 The issuance at Closing of the Title Policy, subject only
to the Approved Exceptions.
9.2. SELLER'S CONDITIONS. Seller's obligation to sell the Property is
conditioned upon the satisfaction of each of the following conditions, each of
which is for the exclusive benefit of Seller. Seller may, at any time before the
Closing, waive one or more of the following conditions, without affecting its
right, and remedies with respect to the remaining conditions:
9.2.1 The performance by Buyer of all its obligations hereunder,
and the truth, completeness and accuracy, in all material respects, of each
representation and warranty made by Buyer as of the Contract Date and the
Closing.
10
10. CLOSING.
10.1.CLOSING DATE. The consummation of the purchase and sale of the
Property (the "CLOSING") shall be held at the offices of the Title Company on
the first business day falling thirty (30) days after the end of the Due
Diligence Period, or earlier as Buyer may elect, or later if agreed to in
writing by Buyer and Seller (the "CLOSING DATE."). Buyer may elect to extend the
Closing Date by up to an additional thirty (30) days, by delivering written
notice of such extension at least five (5) business days prior to the Closing
Date, for the purposes of arranging a synthetic lease financing, provided that
in no event shall such financing (or any other financing) be a condition to
Closing.
10.2.SELLER'S DEPOSITS INTO ESCROW. Seller shall deposit the
following documents and items into escrow:
a. a duly executed and acknowledged grant deed conveying the
Land and Improvements to Buyer, subject to all matters of record as of the
Closing;
b. a duly executed bill of sale, in the form of attached
EXHIBIT D, transferring the Tangible Personal Property to Buyer;
c. a duly executed assignment of leases, in the form of
attached EXHIBIT E, assigning to Buyer all of Seller's interest as lessor under
the Leases;
d. the duly executed tenant estoppel certificate described in
Section 4.d. above;
e. a duly executed assignment, in the form of attached EXHIBIT
F, assigning to Buyer all of Seller's interest in the Service Contracts and, to
the extent assignable, Seller's interest in the Intangible Personal Property,
Plans and Reports;
f. originals of all Leases (including lease guarantees),
Service Contracts, Warranties, and originals or copies of all Plans, Reports,
and Approvals, to the extent the same are in Seller's possession or control;
g. an affidavit in the form of attached Exhibit G stating that
Seller is not a "foreign person" under IRC Section 1445(f)(3).
h. a duly executed California non-foreign person affidavit;
i. tenant notice letters for all tenants at the Property
informing them of the sale of the Property and assignment of the Leases to
Buyer, in the form of attached EXHIBIT H;
j. Seller's share of the closing costs as described in Section
10.5 below or instructions to Title Company to deduct same from the Purchase
Price;
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k. cash equal to the amount of all refundable tenant security
deposits or instructions to Title Company to deduct same from the Purchase
Price; and
l. such other documents as may reasonably be required by the
Title Company to complete the Closing.
10.3. BUYER'S DEPOSITS INTO ESCROW. Buyer shall deposit the
following into escrow:
a. the balance of the Purchase Price;
b. a duly executed assignment of leases, in the form of
attached EXHIBIT E, which shall also be signed by Seller as provided in Section
10.2.c above;
c. a duly executed assignment, in the form of attached EXHIBIT
F, which shall also be signed by Seller as provided in Section 10.2.e above;
d. Buyer's share of the closing costs as described in Section
10.5. below; and
e. such other documents as may reasonably be required by the
Title Company to complete the Closing.
10.4. PRORATIONS. All rents and other sources of income and
all expenses for the Property will be prorated on the Closing Date (based on
actual days of the month and a 365 day year) and the Purchase Price will be
adjusted on the following basis:
a. ACCOUNTS RECEIVABLE. All rents receivable under the Leases
attributable to the period prior to the Closing Date will be paid to or retained
by Seller. Rents attributable to the period beginning on the Closing Date and
thereafter will be paid to Buyer. Buyer will promptly pay over to Seller any
rents received by Buyer after the Closing attributable to the period prior to
the Closing Date (determined on the basis of applying rents received to the most
recently accrued rent first).
b. ACCOUNTS PAYABLE. All sums due for accounts payable that were
owing or accrued by the Property for any period prior to the Closing will be
paid by Seller. Buyer will furnish to Seller for payment any bills received
after the Closing that apply to any period prior to the Closing with respect to
such accounts, agreements and contracts. Payments due under any Service
Contracts shall be prorated as of the Closing Date, and Buyer shall be liable
for all payments accruing thereunder after the Closing.
c. PROPERTY TAXES. All real and personal property ad valorem
taxes and special assessments, if any, will be prorated to the Closing Date,
based on the latest available tax rate and assessed valuation. With respect to
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any property tax appeal or reassessment filed by Seller for tax years (or
portions thereof) prior to the Closing, Seller shall be entitled to the full
amount of any refund or rebate resulting therefrom applicable to the period
before the Closing Date, except to the extent such amounts are payable to, or
otherwise accrue to the benefit of, the tenants pursuant to the Leases.
d. UTILITY CHARGES. All utility (including electricity, gas,
water, sewer and telephone) charges will be prorated to the Closing Date. All
utility security deposits, if any, will be retained by Seller.
e. POST-CLOSING. If the amount of any proration cannot be
determined at the Closing, the adjustments will be made between the parties as
soon after Closing as possible.
10.5. CLOSING COSTS. The Closing costs for this transaction shall be
paid as follows:
a. Seller shall pay (i) the premium for a standard CLTA title
insurance policy; (ii) all San Mateo County transfer and sales taxes; (iii)
one-half of any escrow fees; (iv) the prepayment fees, if any, required in
connection with the discharge of the indebtedness currently secured by a
first-priority mortgage lien on the Property; and (v) all other costs and
expenses allocated to Seller pursuant to this Agreement.
b. Buyer shall pay (i) the cost of any endorsements to the Title
Policy, and the increased costs of an ALTA policy, if chosen by Buyer; (ii) all
recording fees; (iii) one-half of any escrow fees; (iv) all City of San Mateo
transfer taxes; (v) any and all commissions due the Broker (as defined in
Section 16.8, below); and (vi) all other costs and expenses allocated to Buyer
pursuant to this Agreement.
10.6. CLOSING. Pursuant to Section 10.1 above, Title Company
shall close the escrow for this transaction when it is in a position to issue
the Title Policy and has received from Seller and Buyer the items required of
each in Sections 10.2 and 10.3 above. Title Company shall close escrow by doing
the following:
a. Recording the grant deed in the Official Records of the San
Mateo County Recorder;
b. Delivering to Seller the amount due Seller as shown on the
Closing Statement, the original documents listed in Section 10.3 above, and a
signed copy of the closing statement for the escrow consistent with this
Agreement and satisfactory to Buyer and Seller (the "CLOSING STATEMENT"); and
c. Delivering to Buyer the Title Policy, the original documents
and items listed in Section 10.2 above, a signed copy of Buyer's Closing
Statement, and any refund due Buyer.
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10.7.POSSESSION. Seller shall deliver possession of the Property to
Buyer on the Closing Date.
11. REPRESENTATIONS AND WARRANTIES.
11.1. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
makes the following representations and warranties to Buyer, which
representations and warranties shall survive the Closing for a period of twelve
(12) months (it being understood that so long as Buyer has filed a lawsuit
specifically alleging breach of any such representation or warranty within said
twelve (12) month period, any claim arising therefrom shall survive said twelve
(12) month period throughout the pendency of said lawsuit) and all of which (i)
are material and are being relied upon by Buyer, and (ii) are true, complete and
accurate, in all material respects, as of the date hereof and shall be true,
complete and accurate, as modified by any Pre-Closing Disclosures (defined
below), in all material respects, at the Closing Date. All references to the
"knowledge of Seller", "Seller's knowledge" or similar terms in this Section
11.1 shall mean the actual, current knowledge of David R. Word, William Wilson
III, and Michael McCulloch only, without duty of inquiry or investigation.
a. All documents executed by Seller that are to be delivered to
Buyer at the Closing are, or at the time of Closing will be, duly authorized,
executed, and delivered by Seller, and are, or at the Closing will be, legal,
valid, and binding obligations of Seller, and do not, and at the time of Closing
will not, violate any provision of any agreement to which Seller is a party or
to which it is subject or any law, judgment or order applicable to Seller.
b. Seller is not a "foreign person" within the meaning of IRC
Section 1445(f)(3).
c. No proceedings under any federal or state bankruptcy or
insolvency laws have been commenced by or against Seller that have not been
terminated; no general assignment for the benefit of creditors has been made by
Seller; and no trustee or receiver of Seller's property has been appointed.
d. Except as disclosed in writing to Buyer, there is no
litigation or proceeding pending or, to Seller's knowledge, threatened,
involving Seller or the Property that will adversely affect the Property or
Seller's ability to consummate the transactions contemplated by this Agreement.
e. Except as disclosed in writing to Buyer, Seller has not
received any written notice of any claimed violation of any applicable rule,
regulation, ordinance or government directive from any administrative or
governmental authority.
f. Seller has delivered to Buyer true, correct and complete
copies of each of the Leases and Service Contracts. There are no material
14
defaults currently existing under the Leases or Service Contracts. There are no
written leases or written contracts that will affect the Property after Closing,
other than the Leases, the Service Contracts and any matters of record. The
Leases are the only leases affecting the Property and each of the Leases is
identified on the attached EXHIBIT I. Seller has not assigned any of its rights
or interests under the Leases, except as evidenced by the Disapproved
Exceptions.
11.2. PRE-CLOSING DISCLOSURE. As of Closing, Seller shall be deemed
to remake and restate the representations set forth in Section 11.1, except that
the representations shall be deemed modified by any fact, matter or circumstance
disclosed to Buyer or discovered by Buyer prior to Closing that would make any
of Seller's representations or warranties contained herein untrue, incomplete or
incorrect in any respect (any such disclosure or discovery being referred to as
a "PRE-CLOSING DISCLOSURE"). Seller shall promptly deliver written notice to
Purchaser of any fact, matter or circumstance in Seller's Knowledge that would
make any of Seller's representations or warranties contained herein materially
untrue, incomplete or incorrect. Buyer acknowledges that Seller shall have no
liability, obligation or responsibility with respect to any representation or
warranty that was true and accurate when made by Seller upon the execution and
delivery of this Agreement and that subsequently becomes untrue or inaccurate
for any reason that is not a breach or default by Seller of the covenants made
by Seller in Section 13 below (e.g., an untruth or inaccuracy due to the passage
of time, litigation initiated against Seller by a third party, events occurring
or Knowledge acquired by Seller after the date of this Agreement, etc.). Except
as provided in the previous sentence, Buyer's sole remedy for any Pre-Closing
Disclosure that is material shall be to terminate this Agreement prior to
Closing, whereupon the Deposit shall be returned to Buyer and the parties shall
have no further rights or obligations hereunder, except such rights and
obligations as expressly survive the termination of this Agreement. In all other
events, including if the Pre-Closing Disclosures are not material, Buyer shall
have no right to terminate this Agreement, the representations and warranties of
Seller shall be deemed modified by the each of the Pre-Closing Disclosures, and
this Agreement shall remain in full force and effect. For purposes of this
Section 11.2, the Pre-Closing Disclosures shall be deemed "material" if, in the
aggregate, it would either cost in excess of $1,000,000 to cure all of the
Pre-Closing Disclosures or would prompt a commercially reasonable buyer to
request a reduction in excess of $1,000,000 in the Purchase Price.
Notwithstanding anything to the contrary contained herein, Buyer shall have no
right to terminate this Agreement by reason of any untruth or inaccuracy in
Seller's representations and warranties that is caused by an action that Seller
is authorized or permitted to take under this Agreement. The provisions of this
Section 11.2 shall survive the Closing or termination of this Agreement for any
cause.
11.3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby makes
the following representations and warranties to Seller, which representations
and warranties shall survive the Closing and all of which (i) are material and
are being relied upon by Seller, and (ii) are true, complete and accurate in all
respects as of the date hereof and shall be true, complete and accurate as of
the Closing Date:
15
a. Buyer is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware;
b. This Agreement and all documents executed by Buyer that are
to be delivered to Seller or the Title Company at the Closing are, or at the
time of Closing will be, duly authorized, executed, and delivered by Buyer, and
are, or at the Closing will be, legal, valid, and binding obligations of Buyer,
and do not, and at the time of Closing will not, violate any provisions of any
agreement to which Buyer is a party or to which it is subject or any law,
judgment or order applicable to Buyer.
c. No proceedings under any federal or state bankruptcy or
insolvency laws have been commenced by or against Buyer that have not been
terminated; no general assignment for the benefit of creditors has been made by
Buyer; and no trustee or receiver of Buyer's property has been appointed.
If Buyer assigns its rights under this Agreement pursuant to the terms of
Section 14 below, such permitted assignee shall be required and deemed to have
made all of the foregoing representations and warranties as of the date of
assignment and the Closing Date, modified to apply to the assignee, including
its form of enterprise and state of formation. All of Buyer's representations
and warranties shall survive the Closing.
12. RISK OF LOSS; INSURANCE PROCEEDS; CONDEMNATION.
12.1. INSURANCE. Seller agrees to maintain the insurance policy
currently in effect with respect to the Property through the Closing Date, and
upon Buyer's request, to provide Buyer evidence of such insurance. Seller shall
promptly (and in any event prior to Closing) notify Buyer of any casualty
causing damage to, or destruction of, the Improvements and Seller's estimate of
the cost of repair.
12.2.DAMAGE OR DESTRUCTION.
a. In the event of any casualty causing damage to, or
destruction of, the Improvements prior to the Closing Date that would cost
$5,000,000 or less to repair, Buyer and Seller shall consummate this Agreement,
and Seller's rights to the proceeds, if any, of insurance payable to Seller by
reason of such damage or destruction shall be assigned to Buyer and Seller shall
pay Buyer the amount of the deductible under such insurance policy or policies.
b. In the event of damage or destruction of the Improvements
prior to the Closing Date in an amount in excess of $5,000,000, either party may
elect to terminate this Agreement upon written notice to the other party, in
which event the Deposit shall be returned to Buyer. If neither party so elects
to terminate within sixty (60) days after the casualty, the parties shall
consummate this Agreement, with an adjournment in the Closing Date by sixty (60)
days, or such shorter period as the parties may agree, in which event Seller
16
shall assign to Buyer Seller's rights to insurance proceeds, if any, payable by
reason of such damage or destruction and pay to Buyer the deductible under the
applicable insurance policies.
12.3.EMINENT DOMAIN. If, prior to the Closing, all of the Land and
Improvements are taken by eminent domain, this Agreement shall be deemed
canceled. If only part of the Land or Improvements are so taken and such taking
(a) requires the removal of any material portion of the office building located
on the Land, (b) results in a loss of access to the Property that causes the
Property to fail to comply with applicable laws or codes, or (c) results in a
material and adverse loss of parking at the Property, Buyer shall have the
option of (1) proceeding with the Closing and acquiring the Property as affected
by such taking, together with an assignment from Seller of all compensation
awarded to Seller on account of such taking or the right to receive same, or (2)
canceling this Agreement, in which event the Deposit shall be returned to Buyer.
If Buyer elects option (1) above, Seller agrees to assign to Buyer at the
Closing its rights to such compensation and damages, and will not settle any
proceedings relating to such taking without Buyer's prior written consent.
Seller shall promptly (and in any event prior to the Closing) notify Buyer of
any actual or threatened condemnation affecting the Property of which Seller has
knowledge (as defined in Section 11.1).
13. SELLER'S COVENANTS DURING CONTRACT PERIOD.
13.1. OPERATION AND MANAGEMENT OF THE PROPERTY. Between Seller's
execution of this Agreement and the Closing, or earlier termination of this
Agreement as provided for hereunder, Seller shall (i) maintain and operate the
Property in accordance with Seller's current practices, provided that in no
event shall Seller be obligated to make any capital repairs, replacements or
improvements to any portion of the Property; (ii) not make any material physical
changes to the Improvements; (iii) not enter into any contracts or agreements
affecting the Property unless such contracts can be completed or terminated
prior to the Closing or Buyer, in its sole discretion, agrees to assume such
contract or agreement as of the Closing Date, in which case such contracts shall
be included within the term "Service Contracts"; (iv) not enter into any new
lease affecting the Property, extend the term of any Lease, or grant any
extension options under any Lease; and (vi) during the Due Diligence Period, may
offer the Property for sale publicly, but shall not negotiate the sale of the
Property to or from any party, other than Buyer.
13.2. FRANKLIN LEASE. Prior to the expiration of the Due Diligence
Period, Seller shall negotiate an amendment to all of the Leases between Seller
and Franklin, in a form acceptable to Franklin and Seller, whereby the
expiration date of all of such the Leases shall be July 31, 2001, subject to
Franklin's right to extend the term of each such Lease by up to four (4)
additional thirty (30) day periods, by delivering written notice of such
extension to Buyer, its successor or assign, prior to the then current
expiration date, which right shall be exercisable to the extent deemed necessary
by Franklin in the event the new campus to which Franklin intends to relocate is
not ready for occupancy sufficiently in advance of the then current expiration
date. Such amendment shall also include provisions that will require the
landlord, including any successor landlord, under the Franklin Leases to (a)
continue to manage and operate the Property in the manner in which it is
operated as of the Contract Date, throughout the remaining term of the Franklin
Leases, and (b) to retain Franklin as the property manager, under the terms of
17
the management agreement currently in effect with respect to the Property.
Seller shall deliver such form of amendment to Buyer prior to the expiration of
the Due Diligence Period. Seller and Franklin shall execute such amendment prior
to the Closing and shall deliver such amendment to Buyer at Closing as part of
Seller's delivery of the Leases.
14. ASSIGNMENT. Neither Buyer nor Seller shall assign its rights or
delegate its obligations hereunder without the prior written consent of the
other party, which consent may be withheld in such other party's sole
discretion; provided, however, that Buyer shall be permitted to assign its
rights and obligations under this Agreement to a third-party entity in
connection with a synthetic lease financing, provided Seller is given written
evidence, satisfactory to Seller, of such assignment, the existence and good
standing of the assignee, and the necessity of such assignment as part of a
synthetic lease financing; provided, further, however, that no such assignment
shall operate to relieve Buyer of any of its obligations hereunder, Buyer and
such assignee being jointly and severally liable for such obligations from and
after such assignment, and that in no event shall such synthetic lease financing
(or any other financing) or such assignment be a condition to Closing. Subject
to the foregoing, this Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the parties hereto and their respective heirs, devisees,
executors, administrators, legal representatives, successors and assigns.
15. INDEMNIFICATION. Each party hereby agrees to indemnify, defend,
protect and hold harmless the other party from and against any and all claims,
demands, liabilities, costs and damages, including without limitation,
reasonable attorneys' fees (collectively, "Claims"), resulting from any breach
of any warranty or covenant expressly set forth in this Agreement. Each party
further agrees to indemnify, defend, protect and hold harmless the other party
from and against any Claims suffered by the other party and resulting from or
arising out of all third-party tort claims and similar claims of the type that
would typically be insured under a Commercial General Liability Insurance Policy
that are based on actions, facts or circumstances existing or occurring during
the indemnifying party's ownership of the Property, excluding any Claims related
to hazardous substances. All of the indemnifications set forth in this Section
15 shall survive the Closing and conveyance of the Property to Buyer, except
that the obligation to indemnify for breaches of representation or warranty
shall survive only to the extent that a lawsuit is filed by Seller or Buyer with
respect to such breach within one (1) year after the Closing Date.
16. MISCELLANEOUS.
16.1. NOTICE. All notices and any other communications permitted or
required under this Agreement must be in writing and will be effective (i)
immediately upon delivery in person or by facsimile, provided delivery is made
during regular business hours or receipt is acknowledged by a person reasonably
believed by the delivering party to be employed by the recipient, or (ii) 24
hours after deposit with a commercial courier or delivery service for overnight
delivery, provided delivery is made during regular business hours or receipt is
acknowledged by a person reasonably believed by the delivering party to be
employed by the recipient. The inability to deliver because of a changed address
18
of which no notice was given, or rejection or other refusal to accept any
notice, shall be deemed to be the receipt of the notice as of the date of such
inability to deliver or rejection or refusal to accept. Any notice to be given
by any party hereto may be given by the counsel for such party. All notices must
be properly addressed and delivered to the parties at the addresses set forth
below, or at such other addresses as either party may subsequently designate by
written notice given in the manner provided in this Section:
Seller: David R. Word
430 Cowper Street, Suite 200
Palo Alto, California 94301
Telephone: 415-990-9292
Facsimile: 650-321-4049
with copies to:Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, California 94403
Attn: Michael McCulloch
Telephone: 650-312-5812
Facsimile: 650-312-5830
Farella Braun & Martel LLP
235 Montgomery Street
San Francisco, California 94104
Attn: Anthony D. Ratner
Telephone: 415-954-4448
Facsimile: 415-954-4480
Greene Radovsky Maloney & Share LLP
Four Embarcadero Center
Suite 4000
San Francisco, CA 94111
Attn: Thomas Feldstein
Telephone: 415-248-1517
Facsimile: 415-777-4961
Buyer: Keynote Systems, Inc.
2855 Campus Drive
San Mateo, California 94403
Attn: John Flavio
Telephone: 650-522-1017
Facsimile: 650-522-1099
19
with copy to: Fenwick & West
Two Palo Alto Square
Palo Alto, California 94306
Attn: Blakeney Stafford
Telephone: 650-494-0600
Facsimile: 650-494-1417
16.2. HEADINGS. The headings used herein are for purposes of
convenience only and shall not be used in construing the provisions hereof.
16.3. COVENANT OF FURTHER ASSURANCES. The parties hereby agree to
execute such other documents and perform such other acts as may be necessary or
desirable to carry out the purposes of this Agreement, whether before or after
Closing.
16.4. ENTIRE AGREEMENT. This document represents the final, entire
and complete agreement between the parties with respect to the subject matter
hereof and supersedes all other prior or contemporaneous agreements,
communications or representations, whether oral or written, express or implied,
including that Letter of Intent dated March 31, 2000. The parties acknowledge
and agree that they may not and are not relying on any representation, promise,
inducement, or other statement, whether oral or written and by whomever made,
that is not contained expressly in this Agreement. This Agreement may only be
modified by a written instrument signed by representatives authorized to bind
both parties. Oral modifications are unenforceable.
16.5. PARTIAL INVALIDITY. If any term, covenant or condition of
this Agreement or its application to any person or circumstances shall be held
to be illegal, invalid or unenforceable, the remainder of this Agreement or the
application of such term or provisions to other persons or circumstances shall
not be affected, and each term hereof shall be legal, valid and enforceable to
the fullest extent permitted by law, unless an essential purpose of this
Agreement would be defeated by the loss of the illegal, unenforceable, or
invalid provision. In the event of such partial invalidity, the parties shall
seek in good faith to agree on replacing any such legally invalid provisions
with valid provisions that, in effect, will, from an economic viewpoint, most
nearly and fairly approach the effect of the invalid provision and the intent of
the parties in entering into this Agreement.
16.6. NO WAIVER. No consent or waiver by either party to or of any
breach or non-performance of any representation, condition, covenant or warranty
shall be enforceable unless in a writing signed by the party entitled to enforce
performance, and such signed consent or waiver shall not be construed as a
consent to or waiver of any other breach or non-performance of the same or any
other representation, condition, covenant, or warranty.
16.7. ATTORNEYS' FEES. In the event of any dispute between the
parties, whether based on contract, tort or other cause of action or involving
bankruptcy or similar proceedings, in any way related to this Agreement, the
non-prevailing party shall pay to the prevailing party all reasonable attorneys'
20
fees and costs and expenses of any type, without restriction by statute, court
rule or otherwise, incurred by the prevailing party in connection with any
action or proceeding (including arbitration proceedings, any appeals and the
enforcement of any judgment or award), whether or not the dispute is litigated
or prosecuted to final judgment. The "prevailing party" shall be determined
based upon an assessment of which party's major arguments or positions taken in
the action or proceeding could fairly be said to have prevailed (whether by
compromise, settlement, abandonment by the other party of its claim or defense,
final decision, after any appeals, or otherwise) over the other party's major
arguments or positions on major disputed issues.
16.8. BROKERS AND FINDERS. Neither party has had any contact or
dealings regarding the Property, through any licensed real estate broker or
other persons who can claim a right to a commission or finder's fee in
connection with this transaction, except for BT Commercial, representing Buyer
("BROKER"). The parties agree that Buyer shall pay any and all brokerage
commissions due Broker, upon consummation of the Closing. In the event that any
other party claims a commission or finder's fee in this transaction, the party
through whom the party makes its claim shall be responsible for said commission
or fee and shall indemnify the other against all costs and expenses (including
reasonable attorneys' fees) incurred in defending against the same. This
indemnification obligation shall survive the Closing or termination of this
Agreement.
16.9. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
16.10. GOVERNING LAW; FORUM. This Agreement is entered into and shall
be governed by and construed in accordance with the laws of the State of
California (without giving effect to its choice of law principles). The parties
agree that all suits or actions of any kind brought to interpret or enforce the
terms of, or otherwise arising out of or relating to, this Agreement shall be
filed and litigated solely in the state courts in San Mateo, California or
federal courts in San Francisco, California. Each party hereby consents to the
personal and subject matter jurisdiction of said courts.
16.11. INTERPRETATION. All parties have been represented by counsel
in the preparation and negotiation of this Agreement, and this Agreement shall
be construed according to the fair meaning of its language. The rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in interpreting this Agreement. Unless the
context clearly requires otherwise, (i) the plural and singular numbers shall
each be deemed to include the other; (ii) the masculine, feminine, and neuter
genders shall each be deemed to include the others; (iii) "shall," "will," or
"agrees" are mandatory, and "may" is permissive; (iv) "or" is not exclusive; (v)
"includes" and "including" are not limiting; and (vi) "days" means calendar days
unless specifically provided otherwise.
16.12. EXCHANGE TRANSACTION. Buyer agrees upon the request of
Seller to cooperate with Seller in closing all or part of this transaction as an
exchange pursuant to Internal Revenue Code Section 1031, provided that:
21
a. Buyer shall incur no additional expense or liability in
connection therewith and shall not be required to hold title to any property
other than the Property;
b. Seller shall indemnify, protect, defend and hold Buyer
harmless from any claims, demands, causes of action, judgments, expenses, costs
and attorneys fees that result from Buyer's compliance with this paragraph,
which obligation shall survive the Closing or termination of this Agreement; and
c. The Closing is not materially delayed by the exchange.
16.13. IRS FORM 1099-S DESIGNATION. In order to comply with
information reporting requirements of Section 6045(e) of the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations thereunder, the parties
agree (i) to execute an IRS Form 1099-S Designation Agreement to designate the
Title Company (the "DESIGNEE") as the party who shall be responsible for
reporting the contemplated sale of the Property to the Internal Revenue Service
(the "IRS") on IRS Form 1099-S and (ii) to provide the Designee with the
information necessary to complete Form 1099-S.
16.14. THIRD PARTY BENEFICIARIES. This Agreement has been made solely
for the benefit of the parties hereto and their respective successors and
permitted assigns, and nothing in this Agreement is intended to, or shall,
confer upon any other person any benefits, rights or remedies under or by reason
of this Agreement.
16.15. COMPLIANCE WITH LAWS. Each party shall comply with all
applicable laws, rules, regulations, orders, consents and permits in the
performance of all of their obligations under this Agreement.
16.16. LIMITATION ON SELLER'S LIABILITY. Notwithstanding anything to
the contrary contained herein, if Closing shall have occurred (and Buyer shall
not have waived, relinquished or released any applicable rights in further
limitation), the aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Seller under this Agreement
(or any document executed or delivered in connection herewith) (collectively,
the "CONTRACT LIABILITIES") shall not exceed Four Million Dollars
($4,000,000.00); provided that in no event shall Seller be liable for any
Contract Liabilities unless the aggregate amount of such liabilities exceeds One
Hundred Thousand Dollars ($100,000.00), in which event Seller shall be liable
for the full amount of such Contract Liabilities up to the Four Million Dollar
($4,000,000.00) limitation set forth above. To the extent Seller is comprised of
a corporation, partnership or other entity, no constituent partner or member in
such corporation, partnership or other entity, nor any person, trust or entity
that becomes a constituent partner or member in such corporation, partnership or
other entity, nor any partner, member, manager, shareholder, director, officer,
employee, beneficiary, trustee or agent of any of the foregoing, shall have any
personal liability, directly or indirectly, under or in connection with this
Agreement or any agreement made or entered into under or pursuant to the
22
provisions of this Agreement, or any amendment to any of the foregoing made at
any time or times, heretofore or hereafter, and Buyer and its successors and
assigns and, without limitation, all other persons and entities, shall look
solely to the interest of Seller in the Property, including the proceeds from
the sale thereof, for the payment of any claim or for any performance, and
Buyer, on behalf of itself and its successors and assigns, hereby waives any and
all such personal liability. Buyer acknowledges that Seller is comprised of
various individuals and entities, whose respective percentage interests in the
Property are as set forth in the introductory paragraph of this Agreement. Buyer
agrees that the obligations of each of such individuals and entities with
respect to the Property and this Agreement are several and not joint.
Accordingly, each of such individuals and entities shall only be responsible for
its proportionate share of the Contract Liabilities and the foregoing limitation
on liability shall be applied proportionately to each of such individuals and
entities. This Section 16.16 shall survive the Closing or termination of this
Agreement.
16.17. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and is intended to be binding when all parties have
delivered their signatures to the other parties. Signatures may be delivered by
facsimile transmission. All counterparts shall be deemed an original of this
Agreement.
16.18. EXHIBITS. All Recitals and Exhibits referred to in this
Agreement are incorporated herein by reference and shall be deemed part of this
Agreement.
16.19. AUTHORITY. The individuals executing this Agreement on behalf
of Seller and Buyer individually represent and warrant that he or she has been
authorized to do so and has the power to bind each of the parties for whom he or
she is signing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the Contract Date.
SELLER: FRANKLIN RESOURCES, INC., a Delaware corporation
By: /s/ Harmon E. Burns
====================
Name: HARMON E. BURNS
Title: Vice Chairman
/s/ David R. Word
=====================================================
David R. Word, on behalf of himself and as
attorney-in-fact for Peter A. Nossardi, Jill M.
Benitez, Howard E. Wolf, John J. Hamilton, The Board
of Trustees of the Leland Stanford Junior University,
and The San Francisco Museum of Modern Art
/s/ William Wilson, III
=====================================================
William Wilson III, on behalf of himself and as
attorney-in-fact for Peter A. Nossardi, Jill M.
Benitez, Howard E. Wolf, John J. Hamilton, The Board
of Trustees of the Leland Stanford Junior University,
and The San Francisco Museum of Modern Art
BUYER: KEYNOTE SYSTEMS, INC., a California corporation
By: /s/ John J. Flavio
===========================================
Name: John J. Flavio
Title: Vice President and CFO
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
NOTE: ALL PARTIES MUST INITIAL THE AGREEMENT AT SECTION 3.
EXHIBIT A
DESCRIPTION OF THE LAND
PARCEL I:
Parcel "C" as shown on that certain map entitled "MARINERS ISLAND UNIT NO. 4,
BEING A SUBDIVISION OF LOTS 2 & 3 BLOCK 4 AND LOT 1 BLOCK 5, MARINERS ISLAND
UNIT NO. 2 RECORDED IN VOLUME 64 OF MAPS AT PAGES 31 TO 35 INCLUSIVE, LOTS 1, 2,
3 & 4, BLOCK 1 MARINERS ISLAND UNIT NO. 3, RECORDED IN VOLUME 67 OF MAPS AT
PAGES 19 TO 27 INCLUSIVE, AND ADJOINING ACREAGE BEING A PORTION OF LANDS
DESCRIBED IN GRANT DEED RECORDED ON MARCH 30, 1977 IN BOOK 7424 AT PAGE 182, SAN
MATEO COUNTY RECORDS, CITY OF SAN MATEO, SAN MATEO COUNTY, CALIF.", filed in the
office of the County Recorder of San Mateo County, State of California, on April
4, 1979 in Book 99 of Maps at page(s) 35 to 38 inclusive.
PARCEL II:
A NON-EXCLUSIVE EASEMENT for employee, invitees and customer traffic for the
purpose only of ingress and egress to and from Parcel C as shown on that map
(the "Final Map") recorded April 4, 1979 in Volume 99 of Maps at pages 35, 36,
37 and 38 in the Official Records of the County of San Mateo, California; over
and across a strip of land not exceeding at any point a width of 44 feet as more
particularly described on the Final Map as the "44' access easement".
Said easement is appurtenant to Parcel I above and was created by reservation in
Deed recorded April 6, 1979 in Reel 7836 of Official Records at page 443, (File
No. 92543-AN), Records of San Mateo County, California and by dedication on
Certificate Sheet of the subdivision map of Mariners Island Unit No. 4
hereinabove referred to.
EXHIBIT B
TANGIBLE PERSONAL PROPERTY
To be prepared by Seller and delivered to Buyer at least 5 days prior to the
expiration of the Due Diligence Period.
EXHIBIT C
TENANT ESTOPPEL CERTIFICATE
TO: KEYNOTE SYSTEMS, INC.
____________________
____________________
____________________
Re: Suite ____________, _________________,_________________ (the
"Premises")
This estoppel certificate is delivered by the undersigned ("Tenant") to
Keynote Systems, Inc., a California corporation ("Buyer") in connection with its
contemplated purchase of certain real property commonly known as 777 Mariners
Island Boulevard in San Mateo, California (the "Property") from the Mariners
Island Co-Tenancy ("Landlord"). Tenant hereby certifies the following
information on which Buyer may rely in connection with its purchase of the
Property and Lender may rely in connection with its making a loan secured by the
Property:
1. The undersigned is the tenant in possession of the Premises under a
written lease with Landlord, dated _________________, 19__, [as amended by
________________], which lease [as amended] (the "Lease") is in full force and
effect and each provision of which is binding on Tenant in accordance with its
terms. The Lease has not been modified or amended, except as specifically set
forth above, and contains the entire understanding and agreement between Tenant
and Landlord concerning the Premises. A true, complete and accurate copy of the
Lease is attached hereto as Exhibit A.
2. The Premises consist of approximately ___________ rentable square
feet of office space.
3. The term of the Lease commenced on _____________ and terminates on
____________.
4. Current monthly base rent under the Lease is _______. Base rent has
been paid through the period ending ________. Tenant has not paid more than one
month of base rent in advance. As of the date hereof, Tenant has no existing
right to free rent, partial rent, rent rebate, credit for improvements, rent
abatement, or other rental concessions or any right to payments from Landlord to
Tenant except as follows:_______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
5. Tenant has not assigned its rights under the Lease or sublet any
portion of the Premises.
6. There are no actions, whether voluntary or otherwise, pending against
Tenant under any insolvency, bankruptcy or other debtor relief laws of the
United States or of any state.
7. All insurance required of Tenant under the Lease has been obtained by
Tenant and all premiums have been paid.
The statements made herein shall be binding upon us, our successors and
assigns, and shall inure to your benefit and the benefit of your successors and
assigns. The officers executing this letter have been duly empowered to do so on
behalf of the undersigned.
Each of you may consider this certificate and the information contained
herein accurate as of any date that is within 60 days after the date hereof set
forth below, except to the extent we notify you in writing at your address set
forth above of changes to the within-described information.
Dated: ____________________
Very truly yours,
By:__________________________________
Name:________________________________
Its:_________________________________
EXHIBIT D
BILL OF SALE
THIS BILL OF SALE is executed as of the ________ day of
_______________, 19__ by , a ("Seller") in favor of _________________, a
___________________ ("Buyer").
RECITALS
A. Reference is made to certain real property and the improvements thereon
commonly known as __________________ and located at ______________________,
which real property is more thoroughly described in attached SCHEDULE I (the
"Property"). Concurrently herewith, Seller is selling to Buyer and Buyer is
purchasing from Seller all of Seller's interest in the Property.
B. In connection with the sale of the Property to Buyer, Seller desires to
transfer to Buyer all of Seller's interest in the personal property owned by
Seller and used in connection with the operation of the Property.
IN CONSIDERATION OF THE FOREGOING, and for other good and valuable
consideration, Seller agrees as follows:
Seller hereby grants, transfers and conveys to Buyer all of Seller's
interest in all of the tangible personal property identified on SCHEDULE II,
attached hereto.
Seller hereby agrees to execute such other documents and perform such
other acts as may be necessary or desirable to carry out the purposes of this
Bill of Sale.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale this _____ day
of __________ 2000.
_______________________, a _________________________
By: _____________________________
Name: ___________________________
Title: __________________________
SCHEDULE I TO BILL OF SALE
Description of the Property
SCHEDULE II TO BILL OF SALE
Itemization of Personal Property
[Same as Exhibit B to the Purchase Agreement]
EXHIBIT E
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES is executed as of the _____ day of __________,
19__, between ____________________, a ____________________ ("Assignor") and
________________, a __________________ ("Assignee").
RECITALS
A. Reference is made to certain real property and the improvements thereon
commonly known as ______________ and located at _______________, which real
property is more thoroughly described in attached SCHEDULE I (the "Property").
Concurrently herewith, Assignor is selling to Assignee all of Seller's interest
in the Property.
B. In connection with the sale of the Property to Assignee, Assignor
desires to assign to Assignee all of Assignor's interest as lessor under all
leases and occupancy agreements existing with respect to space in the Property,
which leases and occupancy agreements are listed in attached Schedule II (the
"Leases").
IN CONSIDERATION of the foregoing, the parties hereto agree as follows:
1. Assignor hereby grants, conveys, assigns and transfers to Assignee
all of Assignor's rights, title and interest in the Leases.
2. Concurrently herewith, Assignor has assigned and delivered to
Assignee the security deposits listed on Schedule II hereto.
3. Assignee hereby assumes Assignor's obligations under the Leases
arising from and after the date hereof and acknowledges receipt of the security
deposits on Schedule II.
4. In the event any dispute between the parties hereto should result in
litigation or arbitration, the prevailing party shall be reimbursed for all
reasonable costs in connection therewith, including, but not limited to,
reasonable attorneys' fees and defense costs.
5. The terms of this Assignment of Leases shall bind and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
6. The parties hereby agree to execute such other documents and perform
such other acts as may be necessary or desirable to carry out the purposes of
this Assignment of Leases.
IN WITNESS WHEREOF, the parties have executed this Assignment of
Leases as of the date and year first above written.
Assignor: Assignee:
_________________________ _________________________
_________________________ _________________________
By: _____________________ By: _____________________
Name:____________________ Name:____________________
Title:___________________ Title:___________________
SCHEDULE I TO ASSIGNMENT OF LEASES
Description of the Property
SCHEDULE II TO ASSIGNMENT OF LEASES
List of Leases and Security Deposits
EXHIBIT F
ASSIGNMENT
THIS ASSIGNMENT is executed as of the _____ day of __________, 2000,
between ____________________, a _____________________ ("Assignor") and
__________________, a _____________________ ("Assignee").
RECITALS
A. Reference is made to certain real property and the improvements thereon
commonly known as __________________ and located at ________________, which real
property is more thoroughly described in attached SCHEDULE I (the "Property").
Concurrently herewith, Assignor is selling to Assignee all of Seller's interest
in the Property pursuant to the terms of that certain Purchase Agreement, dated
April ___, 2000, by and between Assignor and Assignee (the "Purchase
Agreement"). All capitalized terms used herein and not otherwise defined herein
shall have the meanings given them in the Purchase Agreement.
B. In connection with the sale of the Property to Assignee, Assignor
desires to assign to Assignee all of Assignor's interest in the service,
utility, management, maintenance and other contracts or agreements listed in
attached SCHEDULE II ("Service Contracts").
C. In addition, Assignor desires to assign to Assignee, to
the extent assignable, Assignor's interest in the Approvals,
Plans, Reports and Warranties;
IN CONSIDERATION of and incorporating the foregoing Recitals, the parties
hereto agree as follows:
1. Assignor hereby assigns, grants, conveys and transfers to Assignee
all of Assignor's rights, title and interest in the Service Contracts. In
addition, to the extent assignable, Assignor hereby assigns, grants, conveys and
transfers to Assignee all of Assignor's rights, title and interest in the
Approvals, Plans, Reports and Warranties.
2. Assignee hereby assumes Assignor's obligations under the Service
Contracts, Approvals, Plans, Reports and Warranties arising from and after the
date hereof.
3. In the event any dispute between the parties hereto should result
in litigation or arbitration, the prevailing party shall be reimbursed for all
reasonable costs in connection therewith, including, but not limited to,
reasonable attorneys' fees and defense costs.
4. The terms of this Assignment shall bind and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
2
5. The parties hereby agree to execute such other documents and
perform such other acts as may be necessary or desirable to carry out the
purposes of this Assignment.
IN WITNESS WHEREOF, the parties have executed this Assignment as of
the date and year first above written.
Assignor: Assignee:
_________________________ __________________________
_________________________ __________________________
By: _____________________ By:_______________________
Name:____________________ Name:_____________________
Title:___________________ Title:____________________
2
SCHEDULE I TO THE ASSIGNMENT OF SERVICE CONTRACTS
Description of the Property
SCHEDULE II TO THE ASSIGNMENT OF SERVICE CONTRACTS
List of Service Contracts
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 ______________ (the "Buyer"), that withholding tax is
not required upon the disposition of a U.S. real property interest by
____________________, a ____________________(the "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 _____________________________________
_______________________________________________________________________________.
I, ___________________________________, understand that this certification
may be disclosed to the Internal Revenue Service by the Buyer and that any false
statement I have made here could be punished by fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of Seller.
Dated: _________________, 19__
By:___________________________________
(Individual Signatory)
Name:_________________________________
Title:________________________________
Authorized Representative for Seller
EXHIBIT H
NOTICE TO TENANT
(TENANT'S NAME AND ADDRESS)
_______________________________
_______________________________
_______________________________
Re: Purchase of the building known as ________________________ and
located at_______________________________ ("Property"), by
______________________, a __________________________ ("New Owner")
Dear Sir or Madam:
We hereby notify you that we have sold the Property, in which you are a
tenant, and assigned your lease to New Owner, effective as of _____________ .
New Owner will be your landlord effective immediately.
Prior to such sale, we were holding a security deposit from you under your
lease in the amount of $_____________, which amount has been transferred to New
Owner.
From this date forward you are authorized and directed to make any payment
due to the landlord under your lease to New Owner, which should be delivered to
its managing agent, _______________________, at the following address:
_____________________________. Your checks should be made payable to New Owner.
New Owner and _________________________ are looking forward to working
with you.
Seller: _________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
EXHIBIT I
LEASES
DOCUMENT DOCUMENT
TENANT TYPE DATE LESSOR LESSEE
Franklin Resources
Lease 11/30/84 Mariner Partners Franklin Resources, Inc.
First Amendment 1/21/86 Mariner Partners Franklin Resources, Inc
Second Amendment 8/25/86 Mariner Partners Franklin Resources, Inc
Third Amendment 12/29/86 Mariner Partners Franklin Resources, Inc
Fourth Amendment 7/1/87 Mariner Partners Franklin Resources, Inc
Fifth Amendment 7/27/87 Mariner Partners Franklin Resources, Inc
Sixth Amendment 4/15/89 Mariner Partners Franklin Resources, Inc
Seventh Amendment 5/28/93 Mariner Partners Franklin Resources, Inc
Eighth Amendment 2/26/96 Mariner Partners Franklin Resources, Inc
Ninth Amendment 11/27/96 Mariner Partners Franklin Resources, Inc
Tenth Amendment 8/19/98 Mariner Partners Franklin Resources, Inc
Hanson, Norris & Rossi
Lease 11/11/85 Mariner Partners Hanson & Norris
Extension of Lease 4/1/91 Mariner Partners Hanson, Norris & Rossi
Second Amendment 1/19/96 Mariner Partners Hanson, Norris & Rossi
Wall Street Cafe
Lease 2/11/87 Mariner Partners Executive Suite
Consent to Assignment 9/16/88 Mariner Partners Executive Suite
(assigned to Tony, Juliette and Robert Bazlamit)
First Amendendment 3/21/97 Mariner Partners Tony, Juliette and Robert
Bazlamit, dba Wall
Street Cafe