EXHIBIT 10.2
AGREEMENT FOR
PURCHASE AND SALE
OF REAL PROPERTY
AND ESCROW INSTRUCTIONS
This Agreement for Purchase and Sale of Real Property and Escrow
Instructions (the "AGREEMENT") is made and entered into as of the 15th day of
October, 2002, by and between XXXXXX HOMES, a California corporation, formerly
named Xxxxxx Construction Company ("SELLER"), and NEUROCRINE BIOSCIENCES, INC.,
a Delaware corporation ("BUYER").
R E C I T A L S
A. Seller presently owns the fee interest in and to that certain
real property consisting of approximately 13.77 acres of land, located in the
City of San Diego, County of San Diego, State of California, as depicted on the
Site Plan attached as Exhibit "A" and made a part hereof (hereinafter the
"PROPERTY"). The Property currently consists of two (2) legal parcels and a
portion of a third legal parcel, hereinafter referred to as follows: a single
legal parcel consisting of approximately 7.73 acres of land ("PARCEL A"), as so
depicted on Exhibit "A"; and a single legal parcel consisting of approximately
4.36 acres of land ("PARCEL B"), as so depicted on Exhibit "A" and legally
described on Exhibit "B" attached hereto and incorporated herein. Prior to the
"First Closing" (as defined in Paragraph 5(b) below) Seller intends to cause the
Lot Line Adjustment (as defined in Paragraph 3(c) below) to be completed, which
shall result in the existing boundary lines for Parcel A to be similar to those
depicted on Exhibit "A," as legally described on Exhibit "B" attached hereto and
incorporated herein, and resulting in the increase of the area of Parcel A to
approximately 9.41 acres of Land. As used herein, the term "PROPERTY" shall be
deemed to include all of Seller's right, title and interest in and to: the land
of Parcels A and B (as expanded pursuant to the Lot Line Adjustment), together
with all rights, privileges and easements appurtenant thereto or used in
connection therewith, including, without limitation, all development rights, air
rights, solar rights, water, water rights and water stock relating thereto, oil,
gas and mineral rights, if any, all strips and gores, and all of Seller's right,
title and interest in and to any streets, alleys, easements, rights-of-way,
public ways, or other rights appurtenant, adjacent or connected thereto or used
in connection therewith, whether or not of record (collectively, the "LAND");
(ii) all improvements on or in, the Land (collectively, the "IMPROVEMENTS"), and
(iii) all intangible property (collectively, the "INTANGIBLE PROPERTY") now
owned by Seller and used in connection with the Land or the Improvements,
including, without limitation, any pending or future award made in condemnation
thereof, or any payment in lieu of such condemnation, any award or payment for
damage thereto, and any proceeds of insurance or claim of cause of action for
damage, injury or loss thereto or thereof, any architectural, site, landscaping
or other permits, applications, approvals, authorizations and other
entitlements, transferable guarantees and warranties covering the Land and/or
Improvements, all contract rights and all transferable utility contracts
(including all deposit interests therein).
1
B. Seller desires to sell the Property to Buyer, and Buyer
desires to purchase the Property from Seller, all on the terms and conditions
hereinafter provided.
C. The parties have agreed that the sale of the Property shall be
completed at two (2) closings, the "FIRST CLOSING" and "SECOND CLOSING,"
respectively. At the First Closing, Seller shall convey and Buyer shall purchase
Parcel A (as depicted on Exhibit "A"), along with a ground lease of Parcel B. At
the Second Closing, Seller shall convey and Buyer shall purchase Parcel B (as
depicted on Exhibit "A").
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the parties hereto agree as follows:
1. Purchase of the Property.
For the purchase price and upon the terms and conditions hereinafter
set forth, Seller agrees to sell the Property to Buyer and Buyer agrees to
purchase the Property from Seller subject to the terms, covenants and conditions
herein set forth.
2. Purchase Price of the Property.
The purchase price of the Property (the "PURCHASE PRICE") shall be
approximately Twenty Five Million One Hundred Ninety-Two Thousand Four Hundred
Ninety and 40/100 Dollars ($25,192,490.40), and shall more exactly equal the sum
of: Forty-Two Dollars ($42.00) multiplied by the gross land area (in square
feet) of the Property. The exact measurement of the square footage of the gross
land of Parcel A and Parcel B shall be determined by the Survey to be obtained
by Seller as provided in paragraph 3(a)(ii) below. The Purchase Price shall be
payable as follows:
(a) Within seven (7) days after the Opening of Escrow, Buyer shall
deposit with the Escrow Holder (defined in paragraph 5(a) below) the
sum of Five Hundred Thousand Dollars ($500,000) (the "DEPOSIT") in the
form of cash or immediately available funds.
(b) No later than one (1) business day after the expiration of the Due
Diligence Period (provided that Buyer has not terminated this
Agreement), Buyer shall deposit with Escrow Holder the additional sum
of Five Hundred Thousand Dollars ($500,000) which shall become a part
of the Deposit; unless Buyer elects to extend the First Closing in
accordance with paragraph 27 below, in which event Buyer shall deposit
with Escrow Holder the additional sum of Two Million Five Hundred
Thousand Dollars ($2,500,000), for a total Deposit of Three Million
Dollars ($3,000,000).
(c) At least one (1) day prior to the First Closing Date (as defined in
paragraph 5(b) below), Buyer shall deliver into Escrow in immediately
available funds that portion of the Purchase Price allocable to Parcel
A, which shall be an amount equal to the sum of Forty Two Dollars
($42.00) multiplied by the gross land area (in square feet) of Parcel A
(approximately Seventeen Million Two Hundred Fifteen Thousand Seven
Hundred Eighty Three and 20/100 ($17,215,783.20)) (the "PARCEL A
PURCHASE PRICE"), plus the Seller's Carry Costs payable pursuant to
Section 27 below, if any less the Deposit and
2
interest thereon, plus or minus any adjustments for prorations and
expenses required under paragraph 5(g) below for the First Closing.
(d) At least one (1) day prior to the Second Closing Date (as defined
in paragraph 5(b) below), Buyer shall deliver into Escrow in
immediately available funds that portion of the Purchase Price
allocable to Parcel B, which shall be an amount equal to the sum of
Forty-Two Dollars ($42.00) multiplied by the gross land area (in square
feet) of Parcel B (approximately Seven Million Nine Hundred Seventy-Six
Thousand Seven Hundred Seven Dollars and 20/100 ($7,976,707.20)) (the
"PARCEL B PURCHASE PRICE"), less any credits against such purchase
price pursuant to the terms of this Agreement, plus or minus any
adjustments for prorations and expenses required under paragraph 5(g)
below for the Second Closing.
(e) All monetary deposits in escrow by Buyer shall be placed in a
separate interest bearing account for Buyer's benefit at a
federally-insured financial institution, as Buyer shall direct. The
Escrow Holder shall pay all interest accruing on the Deposit to Buyer
on a monthly basis prior to the First Closing Date. Buyer and Seller
shall instruct Escrow Holder to take instructions solely from Buyer
regarding the investment and release of the Deposit during the period
from the date deposited until the expiration of the Due Diligence
Period, without any further authorization from Seller and
notwithstanding any subsequent instructions to the contrary by Seller.
After the expiration of the Due Diligence Period, unless acting
pursuant to instructions received from Buyer prior to the expiration of
the Due Diligence Period, Escrow Holder shall not release the Deposit,
or any portion thereof, to Buyer, or change the nature or location of
the investment of the Deposit, without prior written authorization to
do so from both Seller and Buyer. With respect to the Deposit, Seller
shall have no obligations to Buyer and Buyer shall have no obligations
to Seller for any acts or omissions of the Escrow Holder or any
institution in which the Deposit is invested by Escrow Holder.
3. Contingencies to the Purchase.
(a) Buyer's obligations under this Agreement are expressly conditioned
upon the satisfaction or waiver of the following:
(i) Buyer's approval, in its sole discretion, of all
matters of title affecting the Property as disclosed by a preliminary
title report to be issued by Chicago Title Company ("TITLE COMPANY")
covering the Property and fully-legible copies of all documents
referred to in the exceptions set forth therein (the "TITLE REPORT").
Seller shall cause Title Company to deliver the Title Report to Buyer
within five (5) business days after the full execution of this
Agreement. Unless objected to in writing by Buyer prior to the end of
the Due Diligence Period (defined in subparagraph (a)(iv) below), the
exceptions and liens set forth on the Title Report shall be deemed
approved by Buyer. Notwithstanding the foregoing, except for property
taxes and assessments not yet due and payable and any liens created or
caused by Buyer, any monetary liens ("MONETARY LIENS") upon the
Property shall be eliminated by Seller prior to the First Closing Date.
Any encumbrances disapproved by Buyer in writing other than the
Monetary Liens are hereinafter referred to
3
as the "DISAPPROVED TITLE MATTERS". The exceptions and liens set forth
on the Title Report, excepting the Disapproved Title Matters and
Monetary Liens, shall be referred to herein as the "PERMITTED
ENCUMBRANCES." Within seven (7) days after receiving any written notice
of disapproval, Seller shall indicate whether it is willing or able to
eliminate or correct the Disapproved Title Matters. If Seller fails to
commit in writing, within ten (10) days after Seller's receipt of such
disapproval, to eliminate or correct any Disapproved Title Matter,
Seller shall be deemed to have indicated its unwillingness to eliminate
the Disapproved Title Matter and Buyer shall have the option either to
waive such Disapproved Title Matter in writing, in which case the title
matter shall become a Permitted Encumbrance, or terminate this
Agreement. In the event Buyer fails to elect to waive or terminate
within ten (10) days after the expiration of said ten (10) day period,
Buyer shall be deemed to have waived its right to terminate by reason
of such Disapproved Title Matters. In the event Seller has agreed to
remove the Disapproved Title Matters, but has not removed the
Disapproved Title Matters within sixty (60) days after receipt of
Buyer's notice of disapproval, Buyer, at its option, may either: (1)
elect in writing to waive its prior disapproval; or (2) treat the
failure to eliminate the Disapproved Title Matter as a failure of a
contingency under this Agreement, in which event Buyer shall have the
right to terminate this Agreement.
(ii) Within ten (10) days after the completion of the Lot
Line Adjustment, Seller shall cause the Title Report to be updated and
delivered by the Title Company to Buyer, to reflect any changes to
matters of title affecting the Property resulting therefrom. The
parties shall have the respective rights and obligations with respect
to any new or changed title matters disclosed by the updated Title
Report as are set forth above except that if any such new or changed
title matters are disclosed after the expiration of the Due Diligence
Period, Buyer shall have ten (10) days after receipt of the Updated
Title Report to provide Seller with written notice of Buyer's
disapproval of any of such title matters as Disapproved Title Matters.
Within ten (10) days after receipt of Buyer's written notice of
disapproval, Seller shall indicate whether Seller is willing and able
to eliminate or correct such Disapproved Title Matters. If Seller fails
to so commit in writing within ten (10) days after Seller's receipt of
such disapproval, Seller shall be deemed to have indicated its
unwillingness to eliminate the Disapproved Title Matter and Buyer shall
have the option either to waive such Disapproved Title Matter in
writing, in which case the title matter shall become a Permitted
Encumbrance, or terminate this Agreement. In the event Buyer fails to
elect to waive or terminate within ten (10) days after the expiration
of the ten (10) day period for Seller's response, Buyer shall be deemed
to have waived its right to terminate by reason of such Disapproved
Title Matters. In the event Seller has agreed to remove the Disapproved
Title Matters, but has not removed the Disapproved Title Matters within
thirty (30) days after receipt of Buyer's notice of disapproval, Buyer,
at its option, may either: (1) elect in writing to waive its prior
disapproval; or (2) treat the failure to eliminate the Disapproved
Title Matter as a failure of a contingency under this Agreement, in
which event Buyer shall have the right to terminate this Agreement.
Additionally, in the event that Title Company issues any modification
or supplement to the Title Report between the expiration of the Due
Diligence Period and the First Closing Date (with respect to Parcel A)
or the Second Closing Date (with respect to Parcel B) that is not the
result of activities of Buyer or any of Buyer's agents,
representatives,
4
consultants or contractors, and, if, in Buyer's reasonable judgment,
the change materially and adversely affects the Property or Buyer's
projected use thereof, Buyer shall have three (3) business 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 five (5) business days after the date
Seller receives Buyer's objection notice (and, if necessary, the
applicable Closing Date shall be extended by the number of days
necessary to give Seller this full five (5) business day period) in
which to notify Buyer in writing of its election either to satisfy or
cure Buyer's objection or not to satisfy or cure Buyer's objection.
Seller shall have until the applicable Closing Date to cure or satisfy
any objections that Seller elects to cure or satisfy and Seller's
failure to do so by such Closing Date shall constitute a default by
Seller under this Agreement. Seller shall be deemed to have elected not
to cure or satisfy all of Buyer's objections if Seller fails to notify
Buyer in writing of its election within the five (5) business day
period referenced above. If Seller notifies Buyer in writing of its
election not to satisfy the objection or Seller is deemed to have
elected not to cure or satisfy Buyer's objection, then Buyer shall
either: (A) waive the objection and proceed with the applicable Closing
pursuant to all of the terms of this Agreement, or (B) terminate this
Agreement; provided, however, that if Buyer's objection relates to a
Monetary Lien arising from Seller's actions or failure to act, and if
Buyer elects the option under clause (A) of the preceding sentence,
then the Purchase Price shall be reduced by the amount of such Monetary
Lien. Buyer shall notify Seller in writing of its election either to
terminate this Agreement or waive its objection within five (5)
business days after the earlier of Buyer's receipt of Seller's written
notice election not to cure Buyer's objection or the expiration of the
five (5) business day period within which Seller was required to notify
Buyer of its election. If Buyer terminates this Agreement pursuant to
this subparagraph prior to the First Closing, (i) this Agreement, and
all of the obligations, rights and liabilities of Buyer and Seller to
each other hereunder shall terminate; and (ii) Seller shall immediately
direct Escrow Holder to return the Deposit to Buyer. If Buyer
terminates this Agreement pursuant to this subparagraph after the First
Closing, but before the Second Closing, (i) this Agreement, and all of
the obligations, rights and liabilities of Buyer and Seller to each
other hereunder shall terminate with respect to Parcel B only, and
Buyer's and Seller's respective rights with respect to Parcel A and
that portion of the Purchase Price received by Seller therefor, shall
not be affected by such termination; provided, however, that the Ground
Lease (as defined in paragraph 5 below) granted to Buyer over Parcel B
shall be terminated and all improvements to Parcel B made pursuant
thereto shall be quitclaimed to Seller.
(iii) Buyer's approval, in its sole discretion, of a
currently dated ALTA survey or surveys of the Property showing all
improvements and other physical conditions affecting the Property (the
"SURVEY") prior to the end of the Due Diligence Period. Seller shall
cause the Survey to be prepared and delivered to Buyer within fifteen
(15) days after Opening of Escrow. In the event Buyer disapproves the
Survey and the disapproved matters cannot be eliminated by Seller
within sixty (60) days after the end of the Due Diligence Period, Buyer
shall have the right to terminate this Agreement, and the First Closing
shall be extended as necessary to provide Seller with such sixty (60)
day period as may be reasonable for the removal of such disapproved
matters. Not later than five (5)
5
days after the completion of the Lot Line Adjustment, Seller shall
cause the Survey to be updated and delivered to the Title Company in
order to allow the updated Title report to reflect the updated Survey.
(iv) Buyer's approval in its sole and absolute discretion
of inspections, tests and studies concerning the Property and Buyer's
proposed development thereof within the period expiring on January 15,
2003 (the "DUE DILIGENCE PERIOD"). Such inspections, tests and studies
concerning the Property shall be performed at Buyer's sole cost and
expense. Upon the execution hereof, Buyer and its agent, consultants
and contractors shall have the right of entry upon the Property at
reasonable times and upon reasonable notice for the purpose of
conducting its investigations, surveys, assessments, inspections, tests
and studies of the Property and the physical and economic conditions
thereof, including, without limitation, the conduct of engineering,
economic feasibility and soil tests. Seller shall have the right to be
present at all such inspections, tests and studies, provided that such
attendance shall not unreasonably delay or increase the cost of Buyer's
performance of such inspection tests and studies. Buyer shall indemnify
and hold Seller harmless from and against any and all loss or liability
resulting from the activities of Buyer, its employees, agents
consultants or contractors upon the Property provided, however, that
Buyer's indemnity hereunder shall not include any losses, cost, damage
or expenses resulting from (a) the acts of Seller or Seller's
employees, agents, contractors or invitees, or (b) the discovery of any
pre-existing condition of the Property; and further provided that Buyer
shall have no obligation to repair any damage caused by Seller's
negligence or willful misconduct or to remediate, contain, xxxxx or
control any Hazardous Material or any defect that existed at the
Property prior to Buyer's entry thereon. Buyer shall, at its sole cost
and expense, promptly repair any damage caused by such inspections,
tests and studies if, for any reason, the Property is not transferred
by Seller to Buyer. In the event Buyer disapproves, in its sole and
absolute discretion, any of its inspections, tests and studies
concerning the Property, Buyer shall have the right to terminate this
Agreement upon written notice to Seller at any time prior to the end of
the Due Diligence Period.
(v) Buyer's approval of the "PROPERTY DOCUMENTS" listed
on Exhibit "C" attached hereto prior to the end of the Due Diligence
Period. Within five (5) days after Opening of Escrow, Seller shall
deliver the Property Documents to Buyer. Such studies and reports, if
any, together with the Property Documents, are hereinafter referred to
as the "DUE DILIGENCE MATERIALS". In the event Buyer disapproves the
condition of the Property as a result of its review of the Due
Diligence Materials, Buyer shall have the right to terminate this
Agreement upon written notice to Seller at any time prior to the end of
the Due Diligence Period.
(vi) The irrevocable commitment by the Title Company on or
before the First Closing Date to issue to Buyer the Title Policy
referred to in paragraph 4 below for Parcel A; and the irrevocable
commitment by the Title Company on or before the Second Closing Date to
issue to Buyer the Title Policy referred to in paragraph 4 below for
Parcel B.
6
(vii) The Seller's representations and warranties shall be
true and correct in all material respects.
(viii) The physical condition of the Property shall be
substantially the same on the First Closing Date as on the Opening of
Escrow, except for reasonable wear and tear and any damages due to any
act of Buyer or Buyer's partners, employees, agents, consultants and
contractors; provided, however, that if Buyer delays the First Closing
Date in accordance with paragraph 27 below, for purposes of this
subparagraph 3(a)(viii) shall mean the date upon which the First
Closing would have occurred but for Buyer's election to delay the First
Closing.
(ix) No action or proceeding shall have been commenced by
or against Seller under the federal bankruptcy code or any state law
for the relief of debtors or for the enforcement of the rights of
creditors and no attachment, execution, lien or levy shall have
attached to or been issued with respect to the Property or any portion
thereof.
(x) As of the First Closing Date, no moratorium, statute,
regulation, ordinance, or federal, state, county or local legislation,
or order, judgment, ruling or decree of any governmental agency or of
any court shall have been enacted, adopted, issued, entered or pending
which would adversely affect Buyer's intended use of the Property;
provided, however, that if Buyer delays the First Closing Date in
accordance with paragraph 27 below, for purposes of this subparagraph
3(a)(x) shall mean the date upon which the First Closing would have
occurred but for Buyer's election to delay the First Closing.
(xi) This Agreement, together with the Property Documents,
or any matters disclosed to Buyer in writing pursuant hereto shall not
contain any untrue statement of material fact.
Notwithstanding the Due Diligence Period, at all reasonable times from
the Execution Date until the last Closing or earlier termination of this
Agreement, Buyer, its employees, agents, consultants and contractors shall be
entitled at Buyer's sole cost and expense to (i) enter onto the Property and
perform any inspections, investigations, studies and tests of the Property,
including, without limitation, physical, structural, mechanical, architectural,
engineering, soils, geotechnical and environmental/asbestos tests that Buyer
deems reasonable; and (ii) upon reasonable notice to Seller, cause an
environmental assessment of the Property to be performed.
In the event any of the contingencies set forth in this subparagraph
(a) above are not satisfied or waived by Buyer within the periods specified
therein, Buyer may terminate this Agreement and the Escrow provided for below
upon written notice to Seller and Escrow Holder, without prejudice to Buyer's
other remedies by reason of any such failure (and which remedies shall survive
each Close of Escrow or any termination by Buyer pursuant to this paragraph 3).
In the event Buyer does not inform Seller in writing of its approval or
disapproval of any of the contingencies set forth in this subparagraph (a)
within the times above specified, said contingencies shall be deemed to have
been approved. Upon termination of this Agreement and Escrow for failure of the
contingencies in this subparagraph (a): (i) all documents shall be
7
returned to the party who deposited such documents into escrow or delivered same
to the other party; (ii) the Deposit shall be returned to Buyer; (iii) each
party shall bear one-half (1/2) of the Escrow Holder and Title Company
cancellation costs; and (iv) neither party shall have any further liability to
the other.
(b) If any contingency fails because of Seller's default hereunder,
Buyer may terminate the Agreement, as set forth in subparagraph (a)
above or close the transaction in accordance with this Agreement,
without prejudice to Buyer's remedies because of such default.
(c) The parties' obligations under this Agreement are further
conditioned upon the satisfaction or waiver of the following:
(i) Within sixty (60) days after Opening of Escrow, Buyer
shall submit to Seller a site plan and conceptual plans showing all
building elevations and material board for all buildings and related
improvements (including parking facilities and signage) to be
constructed by Buyer upon the Property ("BUYER'S CONCEPTUAL PLANS") for
the review and approval by Seller in its sole discretion. Buyer agrees
that Buyer's Conceptual Plans shall conform to Seller's Building
Guidelines attached hereto as Exhibit "G." Buyer agrees that Seller's
Building Guidelines are reasonable. In the event Buyer fails to submit
Buyer's Conceptual Plans to Seller pursuant to the end of said sixty
(60) day period, Seller shall have the right to terminate this
Agreement by delivering to Buyer written notice thereof. Buyer
understands and agrees that Buyer's grading of the Property will
necessarily affect Lots 18 and 19 located to the south of the Property
and Parcel 3 located to the north of the Property and that Seller may
withhold its approval of the Buyer's Conceptual Plans if any grading
associated therewith (as set forth in a grading plan included in the
Conceptual Plans) would adversely impact the actual or potential
development of Lots 18 and 19 or Parcel 3. Within twenty (20) days
after Seller's receipt of Buyer's Conceptual Plans, Seller shall notify
Buyer of its approval or disapproval of Buyer's Conceptual Plans,
including, but not limited to, any materially adverse impact that the
grading associated therewith (as set forth in a grading plan included
in the Conceptual Plans) may have on the development of adjacent lots,
(consistent with the existing graded elevation of said lots or changes
to the grade of said lots pursuant to conceptual plans approved by
Seller prior to the date of this Agreement). If Seller fails to notify
Buyer of its disapproval of the Buyer's Conceptual Plans within said
twenty (20) day period, the Buyer's Conceptual Plans shall be deemed
approved. After Buyer's receipt of Seller's notice of disapproval, if
Buyer revises the Buyer's Conceptual Plans, Buyer shall submit the
revised Buyer's Conceptual Plans to Seller for its approval or
disapproval which Seller shall give within fifteen (15) days after
receipt thereof. This process shall continue until the Buyer's
Conceptual Plans are approved. If Seller timely disapproves Buyer's
Conceptual Plans and Seller and Buyer are unable to agree upon Buyer's
Conceptual Plans within forty-five (45) days after Seller's receipt of
such plans, either party shall have the right to terminate this
Agreement; and the First Closing shall be extended to occur no earlier
than the earlier of (A) Buyer's and Seller's mutual agreement upon
Buyer's Conceptual Plans, or (B) the expiration of such forty-five (45)
day period.
8
(ii) On or before January 15, 2003, Seller shall obtain
from the City of San Diego at Seller's expense any necessary lot line
adjustment, parcel map or similar document certifying to the
satisfaction of Title Company that the Property consists of two
separate legal parcels in the configuration depicted on Exhibit "A" and
complies with all applicable subdivision laws, regulations and
ordinances (the "LOT LINE ADJUSTMENT"). Any conditions or requirements
imposed by any governmental authorities in connection with the Lot Line
Adjustment which affect Seller or any property owned by Seller shall be
subject to the written approval of Seller, in its sole discretion. Any
conditions or requirements imposed by any governmental authorities in
connection with the Lot Line Adjustment which affect Buyer's
development of the Property shall be subject to Buyer's written
approval, in its sole discretion. In the event Buyer or Seller
disapprove any such conditions or requirements imposed in connection
with the Lot Line Adjustment, and cannot reach an agreement concerning
such disapproval prior to January 23, 2003, or in the event Seller is
unable to obtain the Lot Line Adjustment prior to January 23, 2003,
either party shall have the right to terminate this Agreement upon
written notice to the other. Subject to the parties' right to approve
certain conditions or requirements of the Lot Line Adjustment, Buyer
shall perform all obligations imposed by the City of San Diego or other
government agencies in connection with the Lot Line Adjustment.
Upon termination of this Agreement and Escrow for failure of the
contingencies in this subparagraph (c): (i) all documents shall be returned to
the party who deposited such documents into escrow or delivered same to the
other party; (ii) Buyer's Deposit shall be returned to Buyer; (iii) each party
shall bear one-half (1/2) of the escrow cancellation costs; and (iv) neither
party shall have any further obligation to the other. Notwithstanding the
foregoing, if a Close of Escrow does not occur because of a failure of either
Seller or Buyer to comply with its obligations under this Agreement, any costs
incurred in connection with the Escrow and not previously paid through Escrow,
including any cancellation fees or other costs of Title Company, shall be paid
by the defaulting party.
4. Title Insurance; Condition of Title.
(a) At each Close of Escrow, Buyer's fee simple title shall be insured
by an ALTA Owner's Extended Coverage Policy of Title Insurance (1970
Form B), containing such endorsements as may be reasonably requested by
Buyer (collectively, the "TITLE POLICIES") issued by Title Company. The
Title Policy issued at the First Close of Escrow shall provide coverage
in the amount of the Parcel A Purchase Price. The Title Policy issued
at the Second Close of Escrow shall provide coverage in the amount of
the Parcel B Purchase Price. The Title Policy issued to Buyer at the
First Closing shall show fee simple title to Parcel A vested in Buyer,
subject only to:
(i) Non-delinquent real property taxes and assessments;
(ii) The Permitted Encumbrances; and
9
(iii) Any other matters recorded by Escrow Holder pursuant
to the terms of this Agreement or matters consented to, created or
caused by Buyer prior to the Close of Escrow.
The Title Policy issued to Buyer at the Second Closing shall show fee
simple title to Parcel B vested in Buyer alone, subject only to:
(i) Non-delinquent real property taxes and assessments;
(ii) The Permitted Encumbrances; and
(iii) Any other matters recorded by Escrow Holder pursuant
to the terms of this Agreement or matters consented to, created or
caused by Buyer prior to the Close of Escrow.
(b) Buyer and Seller each agree to deliver to Title Company such proof
of their respective authority and authorization to enter into this
Agreement and consummate the transactions contemplated hereby as may be
reasonably required by the other party or Title Company.
5. Escrow Provisions.
(a) Within three (3) days following the full execution of this
Agreement, Seller and Buyer shall open Escrow (the "ESCROW") by
delivering a fully executed copy of this Agreement to Chicago Title
Company (referred to herein as "ESCROW HOLDER"), at 000 "X" Xxxxxx, Xxx
Xxxxx, XX 00000, Attn: Xxxxxx Xxxx, Escrow Officer. The "OPENING OF
ESCROW" shall be deemed the date that this Agreement has been signed by
the parties and delivered to Escrow Holder. Each party shall execute
Escrow instructions on the standard form of Escrow Holder; provided,
however, such additional instructions shall not modify the provisions
of this Agreement. This Agreement shall be attached to and made an
exhibit to such Escrow instructions. To the extent that such Escrow
instructions conflict with any of the provisions of this Agreement,
this Agreement shall control. If any requirements relating to the
duties or obligations of the Escrow Holder hereunder are not acceptable
to the Escrow Holder, or if the Escrow Holder requires additional
instructions, the parties agree to make such deletions, substitutions
and additions to the Escrow Instructions as counsel for Buyer and
Seller shall mutually approve and which do not materially change this
Agreement or its intent
(b) Buyer and Seller agree that, except as provided in subparagraph (i)
below, the sale of the Property shall occur at two (2) closings, to be
known as "First Closing" and the "Second Closing". At the First
Closing, Seller shall convey to Buyer all of its interest in Parcel A.
At the Second Closing, Seller shall convey to Buyer all of its interest
in Parcel B. Although the First Closing may be delayed by Buyer in
accordance with Section 27 below, the First Closing shall be scheduled
to occur on January 31, 2003 and the actual closing shall be referred
to as the "FIRST CLOSE OF ESCROW". The Second Closing shall be
scheduled to occur on December 15, 2003; however, Seller may, in its
sole discretion, postpone the Second Closing to not later than January
15, 2004 upon written notice to
10
Buyer and the actual closing shall be referred to herein as the "SECOND
CLOSE OF ESCROW". On or before thirty (30) days prior to the First
Close of Escrow, if the design of Buyer's improvements to the Property
results in the need to construct such improvements over or in proximity
to the lot line between Parcel A and Parcel B (and that the City will
not recognize the Ground Lease as affording Buyer the right to
construct its improvements over or in proximity to such lot line),
Buyer may elect to acquire an undivided two-thirds (2/3) interest in
the Property in lieu of Parcel A. In the event Buyer so elects, this
Agreement shall be modified as follows: All references to Parcel A
herein shall be modified to refer to such undivided two-thirds (2/3)
interest, and all references to Parcel B herein shall be modified to
refer to the remaining undivided one-third (1/3) interest in the
Property; and in such event, there shall be no requirement for the
execution and delivery of the Ground Lease; and in lieu thereof the
parties shall enter into a co-tenancy agreement with similar terms and
conditions to those contained in the Ground Lease; provided, however,
that the Ground Lease shall be modified as necessary to comply with
those regulations and rulings applicable to Section 1031 of the
Internal Revenue Code of 1986, as amended (the "CODE"), and
corresponding provisions of applicable state tax legislation, in order
that the Buyer's co-tenancy interest will be considered a real estate
interest rather than a partnership interest for the purpose of Buyer
acquiring the Property as part of a so-called like like-kind exchange
under Section 1031 (a "SECTION 1031 EXCHANGE")of the Code.
(c) At the First Close of Escrow, Seller shall execute and deliver to
Buyer through Escrow a Grant Deed conveying to Buyer fee simple title
to Parcel A. At the First Close of Escrow, Buyer and Seller shall
execute and deliver to Escrow Holder a Ground Lease over Parcel B, in
the form attached hereto as Exhibit "H" (the "GROUND LEASE"). The
purpose of the Ground Lease is to provide Buyer with an interest in
Parcel B sufficient to obtain construction permits for the development
thereof, and all rent payable pursuant thereto shall be credited
against the Parcel B Purchase Price at the Second Close of Escrow. At
the Second Close of Escrow, Seller shall execute and deliver to Buyer
through Escrow a Grant Deed conveying to Buyer fee simple title to
Parcel B. The Grant Deeds shall be in Title Company's standard form.
(d) On or before the First Close of Escrow, Buyer shall deliver to
Seller outside of escrow an original irrevocable standby letter of
credit ("LETTER OF CREDIT") in the amount of the Parcel B Purchase
Price ("LETTER OF CREDIT AMOUNT"). In the event Buyer defaults under
this Agreement and fails to complete its purchase of Parcel B, Seller
shall have the right to draw upon the Letter of Credit in the Letter of
Credit Amount; such draw shall constitute payment to Seller of the
Parcel B Purchase Price. In the event Seller draws upon the Letter of
Credit, Buyer, Seller and Escrow Holder shall perform all of their
obligations under this Agreement, except for Buyer's deposit of the
balance of the Parcel B Purchase Price. Upon confirmation from Escrow
Holder that the Parcel B Purchase Price has been received into Escrow,
and prior to the distribution of such funds to Seller, Seller shall
deliver the Letter of Credit to Escrow Holder, who shall release the
Letter of Credit to Buyer contemporaneously with delivery of the Parcel
B Purchase Price amount to Seller. Buyer's failure to deliver the
Letter of Credit to Seller as required above shall be deemed to be a
breach of this Agreement which shall entitle Seller to
11
terminate this Agreement, in addition to any other remedies available
at law or in equity. In the event of such breach, Seller may retain
Buyer's Deposit as liquidated damages, as provided in paragraph 11
below. The Letter of Credit shall be issued by Bank of America, Xxxxx
Fargo Bank or another major U.S. commercial bank acceptable to Seller,
having a Los Angeles, California office at which the Letter of Credit
may be drawn. The Letter of Credit shall have an expiration date no
earlier than February 15, 2004. The Letter of Credit shall provide for
payment to Seller upon the issuer's receipt of a sight draft from
Seller together with Seller's certificate certifying that the Letter of
Credit amount is due and payable from Buyer, and with no other
conditions, and otherwise be in form and content satisfactory to
Seller's attorneys.
(e) In consideration of Buyer's delivery of the Letter of Credit,
Seller shall cause to be recorded against Parcel B at the First Close
of Escrow, a deed of trust granted by Seller to Escrow Holder, as
trustee, in favor of Buyer as beneficiary, in the form attached hereto
as Exhibit "I" (the "DEED OF TRUST"), securing Seller's obligation to
convey to Buyer fee simple title to Parcel B upon any draw under the
Letter of Credit constituting payment in full to Seller of the Parcel B
Purchase Price. Prior to the First Close of Escrow, Buyer shall execute
and deliver to Escrow Holder a request for reconveyance, in Escrow
Holder's standard form, requesting the reconveyance of Parcel B from
the lien of the Deed of Trust in the event Buyer defaults under this
Agreement prior to the Second Close of Escrow and Seller elects to
terminate this Agreement without drawing upon the Letter of Credit.
Escrow Holder shall hold such request for reconveyance of the Deed of
Trust unless and until Buyer defaults under this Agreement and Seller
releases the Letter of Credit to Buyer in accordance with subparagraph
5(d) above. If Buyer defaults under this Agreement and Seller releases
the Letter of Credit to Buyer in accordance with subparagraph 5(d),
Escrow Holder shall promptly cause the reconveyance of the lien of the
Deed of Trust as an encumbrance on Seller's title to Parcel B. Buyer
shall be solely responsible for the costs associated with the
reconveyance of the Deed of Trust pursuant to this subparagraph 5(e).
(f) At the First Close of Escrow, Escrow Holder shall (i) cause the
Grant Deed for Parcel A to be recorded in San Diego County; (ii)
deliver to Seller the Parcel A Purchase Price, plus or minus Seller's
share of any expenses or prorations; (iii) cause the Memorandum of
Option to Purchase (in the form of Exhibit "E" hereto), Memorandum of
Right of First Refusal (in the form of Exhibit "F" hereto) Ground
Lease, (in the form of Exhibit "H" hereto), the Deed of Trust (in the
form of Exhibit "I" hereto), and the Memorandum of Agreement (in the
form of Exhibit "D" hereto) to be recorded in San Diego County. At the
Second Close of Escrow, Escrow Holder shall (i) cause the Grant Deed
for Parcel B to be recorded in San Diego County; (ii) deliver to Seller
the Parcel B Purchase Price, plus or minus Seller's share of any
expenses or prorations.
(g) Expenses and costs concerning the Escrow shall be borne as follows:
(i) Seller shall pay the portion of the Title Policy
premiums for each policy applicable to a standard CLTA policy, any
documentary transfer taxes, the recording fees
12
for the Grant Deeds and the other documents to be recorded pursuant to
paragraph 5(f) above and one-half (1/2) of the Escrow fees;
(ii) Buyer shall pay the Title Policy premiums for each
policy in excess of Seller's share described in clause (i) above,
including the cost of any ALTA inspection, the cost of any title
endorsements requested by Buyer in its sole discretion and one-half
(1/2) of the Escrow fees;
(iii) At the First Close of Escrow, Buyer shall reimburse
Seller for the cost of the Survey referred to in paragraph 3(a)(ii)
above (it being agreed that the cost shall be limited to the cost of
updating Seller's existing survey of the Property);
(iv) Seller and Buyer shall each bear their respective
legal and accounting fees and costs (if any); and
(v) All other fees and charges shall be shared by the
parties according to the usual custom in San Diego County.
(h) Prior to each Close of Escrow, Seller shall provide Escrow Holder
and Buyer with the certification required by Internal Revenue Code
Section 1445 (the "NON-FOREIGN PERSON CERTIFICATE"), and the
certification required to show that withholding is not required
pursuant to California Revenue and Taxation Code Sections 18662(e) and
26131(e). If Seller shall fail to deposit into Escrow the Non-Foreign
Person Certificate as required by this Agreement, Buyer may at its
option either (i) delay Close of Escrow until such time as Seller has
complied with the conditions set forth herein, and such adjournment
shall not place Buyer in default of its obligations hereunder, or (ii)
withhold from the Purchase Price and remit to the Internal Revenue
Service, a sum equal to ten percent (10%) of the gross selling price of
the Property or such other sum as shall be required in accordance with
the withholding obligations imposed upon Buyer pursuant to Section 1445
of the Code. Such withholding shall not place Buyer in default under
this Agreement, and Seller shall not be entitled to claim that such
withholding shall excuse Seller's performance under this Agreement.
(i) Real property taxes, any installments of bonds and
any special taxes and assessments affecting the entire Property shall
be prorated as of the First Closing Date based on the actual number of
days in the month and year. Any reconciliation of estimated closing
adjustments, or corrections of errors in the calculation of closing
adjustments, shall be made as soon as practicable after each Close of
Escrow and the provisions of this Section shall survive the last Close
of Escrow.
(i) Notwithstanding any other provision of this Agreement to the
contrary, Seller shall have the right, in its sole discretion, to
convey the entire Property to Buyer at the First Closing, provided that
all conditions to closing have been satisfied. If Seller so elects to
convey the entire Property to Buyer at the First Closing: (i) the
Ground Lease described in subparagraph (c) and the Letter of Credit
described in subparagraph (d) above shall not be required; (ii) Buyer
shall deposit into Escrow the entire Purchase Price for the
13
Property prior to the First Closing; and (iii) all other conditions
applicable to the Second Closing shall be satisfied at the First
Closing.
6. Change of Possession and Buyer's Right to Develop Property.
Possession of the Property and shall be delivered to Buyer at the First
Close of Escrow free and clear of all leases or rights of other parties to
possess or occupy all or any portion of the Property. Following the First Close
of Escrow, Buyer shall have the right to develop the Property, subject to the
terms and conditions set forth in this Agreement, the Ground Lease and in
accordance with applicable law.
7. Seller's Covenants, Representations and Warranties.
As a material consideration for Buyer's entering into this Agreement,
Seller hereby covenants, represents and warrants to Buyer as follows:
(a) Seller is a corporation duly organized and existing in good
standing under the laws of the State of California. Seller has full
power and authority to enter into this Agreement and carry out its
undertakings hereunder.
(b) The execution of this Agreement by Seller and its delivery to Buyer
and the performance hereof have been duly authorized by all necessary
action on the part of Seller and its shareholders and/or board of
directors, as applicable. This Agreement constitutes the binding
obligation of Seller and is enforceable against Seller in accordance
with its terms and does not violate the Articles of Incorporation of
Seller or any contract, agreement or commitment to which the Seller is
a party or by which Seller is bound.
(c) Seller has not received written notice from any governmental
authority advising Seller of the existence of any violation relative to
the Property of any applicable building codes, environmental, zoning,
subdivision, and land use laws, the violation of which would have a
material adverse effect upon the Property. To the best of Seller's
knowledge, there are no threatened claims, litigation, legal action
involving the Property to which Seller is a party, and there are no
threatened condemnation or other private or governmental proceedings or
investigations involving the Property.
(d) Except for any agreements terminable at will without penalty or
premium, neither Seller nor its agents have entered into any agreements
or understandings concerning the Property by which Buyer would be bound
following the Close of Escrow.
(e) Seller does not use, treat, store or dispose of, and has not
knowingly permitted anyone else, to use, treat, store or dispose of any
hazardous or toxic materials ("HAZARDOUS MATERIALS") nor does Seller
know of the existence of Hazardous Materials on, in, under or about the
Property. Seller has not received written notice of any violation
affecting the Property under any federal, state or local law or
regulation relating to Hazardous Materials. For the purpose of this
Agreement, "Hazardous Materials" shall include substances defined as
"extremely hazardous substances," "hazardous substances," "hazardous
materials," "hazardous waste," or "toxic substances," in the
Comprehensive
14
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, et seq., as amended; the Emergency Planning and
Community Right-To-Know Act, 42 U.S.C. Sections 11001-11050, as
amended; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., as amended; the Toxic Substances Control Act, 15 U.S.C.
Section 2601, et seq., as amended; the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq.; and those substances
defined as "hazardous waste" in Section 25117 of the California Health
& Safety Code, as "infectious waste" in Section 25117.5 of the
California Health & Safety Code, or as "hazardous substances" in
Section 25316 of the California Health & Safety Code or "hazardous
materials" as defined in Section 353 of the California Vehicle Code.
(f) Seller agrees that, from and after the date hereof, it will not
hypothecate, transfer, encumber or affirmatively take any other action
with respect to the Property, or any portion thereof, which would
render Seller unable to convey the Property to Buyer pursuant to this
Agreement. There are no leases or tenancies in effect on the Property
and no facts or conditions exist that will prevent possession of the
Property from being delivered to Buyer upon the Close of Escrow.
(g) Buyer and Seller hereby agree that (i) except for the warranties,
representations and covenants of Seller set forth in this Agreement,
Buyer is purchasing the Property on an "AS IS" basis without relying on
any communications that may have been made by Seller, or any of
Seller's agents or employees, with respect to the Property or Buyer's
intended use thereof; (ii) the only representations and warranties made
with respect to the Property are contained herein; and (iii) for
purposes of this paragraph 7, Seller's "knowledge" shall be deemed to
include the present knowledge of Xxxxx X. Xxxxxx (Senior Vice President
of Seller) or Xxxxxxx X. Xxxxxx (Vice President of Seller), and
Seller's "written notice" shall be deemed to include notices received
by one or more of said persons. Seller represents that the foregoing
persons are the most knowledgeable of the circumstances and conditions
relating to the Property and that they are the most likely persons
within Seller's organization to receive notices relating to the
condition of the Property. The foregoing does not imply and shall not
be deemed to require Seller's independent investigation.
(h) From the opening of Escrow to the First Close of Escrow, or the
earlier termination of this Agreement, Seller shall operate the
Property in the ordinary course, and maintain the Property in the same
manner as before the execution of this Agreement as though Seller were
retaining the Property. During said period, Seller shall keep in effect
all insurance coverage on the Property in effect as of the Effective
Date and promptly comply with all requirements of the insurance
companies with respect to such coverage. During said period, Seller
shall not actively solicit or accept any back-up offer for the purchase
of the Property.
(i) Prior to the First Close of Escrow, Seller shall promptly comply
with all applicable laws, statutes, ordinances, rules and regulations
of any and all governmental or quasi-governmental agencies having or
claiming jurisdiction over the Property or the use of all or any part
thereof ("LEGAL REQUIREMENTS").
15
(j) Prior to the First Close of Escrow, Seller shall pay before
delinquency all taxes and assessments and all other impositions of
every kind and nature whatsoever, levied, imposed or assessed, and all
other expenses and obligations at any time incurred by Seller, in
connection with the ownership, occupancy, use or operation of the
Property.
(k) Seller agrees that Buyer shall have no liability as a successor in
interest for any contracts or agreements entered into by Seller in
connection with its operation of the Property except for obligations
accruing after the Closing Date or which are set forth in the Property
Documents, or in any document which is a Permitted Encumbrance.
(l) Seller shall indemnify, defend and hold harmless Buyer from and
against any and all damages, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees) caused by
any breach of any representation, warranty or covenant of Seller
contained herein, subject to the provisions of this Agreement.
(m) To the best of Seller's knowledge, there is no material fact which
has not been disclosed to Buyer which has a material adverse effect
upon the Property, or the use or value thereof.
(n) To the best of Seller's knowledge, there are not presently pending
(i) any special assessments, except those shown as exceptions on the
Preliminary Report, (ii) condemnation actions against the Property or
any part, and Seller has not received notice of any contemplated
special assessments or eminent domain proceedings that would affect the
Property except for those assessments that will be made by any
applicable associations.
(o) No filing or petition under the United States Bankruptcy Law or any
insolvency laws, or any laws for composition of indebtedness or for the
reorganization of debtors has been filed with regard to Seller.
(p) Seller agrees to take no action that is likely to decrease the
square footage of building improvements that may be constructed on the
Property.
(q) Provided that the Building Plans submitted by Buyer for approval by
governmental agencies and community groups have been approved by Seller
pursuant to subparagraph 8(e) below, Seller agrees not to object to or
oppose the approval of such Building Plans by such governmental
agencies and community groups.
(r) All representations and warranties set forth in this paragraph 7
shall be true as of the date hereof and as of each Closing Date without
the necessity of a separate certificate with respect thereto. All
representations, warranties and covenants set forth in this paragraph 7
shall survive the last Close of Escrow hereunder.
8. Buyer's Covenants, Representations and Warranties.
As a material consideration for Seller's entering into this Agreement,
Buyer hereby covenants, represents and warrants to Seller as follows:
16
(a) Buyer is a corporation duly organized and existing in good standing
under the laws of the State of Delaware and is qualified to do business
in California. Buyer has full power and authority to enter into this
Agreement and to carry out its undertakings hereunder.
(b) The parties executing this Agreement on behalf of Buyer are duly
authorized to do so and to execute all documents which it contemplates.
(c) This Agreement constitutes the binding obligation of Buyer and is
enforceable against Buyer in accordance with its terms.
(d) Buyer has made (or will make prior to the Close of Escrow) an
independent investigation with regard to the Property and Buyer's
intended use thereof.
(e) Prior to commencement of construction, Buyer shall deliver to
Seller, for Seller's written approval in its reasonable discretion, the
following plans and other materials related to the improvements Buyer
proposes to construct on the Property (the "BUILDING PLANS"): (i)
complete building shell architectural plans, including elevations,
sections, mechanical and roof plans; (ii) conceptual landscape plans,
including lighting, landscape palette, hardscapes and architectural
features; (iii) grading plans; (iv) conceptual signage plans for all
signs to be erected upon the Property; and (v) color boards including
glass, roofing materials, exterior elevation, colors, window mullions
and veneer materials. Seller shall review and approve or reasonably
disapprove the Building Plans within ten (10) days after Seller's
receipt thereof. Seller shall not have the right to disapprove Buyer's
Building Plans to the extent such plans conform to Buyer's Conceptual
Plans approved by Seller. If Seller fails to notify Buyer of its
disapproval of the Building Plans and the reasons therefor within said
ten (10) day period, the Building Plans shall be deemed approved. After
Buyer's receipt of Seller's notice of disapproval and the reasons
therefor, if Buyer revises the Building Plans, Buyer shall submit the
revised Building Plans to Seller for its approval or reasonable
disapproval which Seller shall give within ten (10) days after receipt
thereof. This process shall continue until the Building Plans are
approved. Seller's failure to notify Buyer of its approval or
reasonable disapproval and the reasons for such disapproval within said
ten (10) day period shall be deemed Seller's approval of the Building
Plans. Buyer hereby agrees that the building(s) and all other
improvements constructed on the Property by Buyer, or its
successors-in-interest, assigns or transferees shall be constructed in
accordance with the Building Plans approved by Seller. Buyer agrees
that the Building Plans shall conform to Seller's Building Guidelines
attached hereto as Exhibit "F". Buyer agrees that Seller's Building
Guidelines are reasonable. Seller agrees that Seller shall not
disapprove of any portion of the Building Plans for any reason contrary
to the Seller's Building Guidelines. Any material modifications to the
Building Plans shall require Seller's prior written approval. To the
extent that Seller has approved, or approves or permits any deviations
from the Seller's Building Guidelines in the construction of any
non-governmental buildings located on Lots 17, 18 or 19 of Employment
Center Development Unit 2B, according to Map thereof No. 10945, filed
in the Office of the County Recorder of San Diego County on May 21,
1984, located to the south of the Property, or Parcel 2 of Parcel Map
No. 15061, filed in the Office of the County Recorder of San Diego
County on December 16,
17
1987, located to the north of the Property, similar deviations in the
construction of Buyer's buildings on the Property shall be permitted by
Seller. It is intended that the approval process set forth above shall
apply to the development of the entire Property; however, in the event
the Property is developed in phases, Buyer shall only be required to
submit Building Plans to Seller for the particular phase Buyer intends
to develop at that time. Buyer may concurrently submit the Building
Plans to Seller and related development applications to applicable
government authorities for approval, provided that Buyer acknowledges
that the Building Plans submitted to government authorities may be
revised as a result of Seller's review and approval process, and no
development approvals from government authorities shall limit Seller's
rights under this subparagraph 8(e). Buyer's and Seller's covenants set
forth in this paragraph 8(e) shall survive Close of Escrow. Buyer and
Seller agree to execute and deliver to Escrow Holder prior to the First
Close of Escrow a Memorandum of Agreement in the form attached hereto
as Exhibit "C" confirming the parties' rights and obligations under
this paragraph 8(e). Escrow Holder shall record such Memorandum of
Agreement at the First Close of Escrow. Any liens upon the Property as
security for loans shall be subordinate to the Memorandum of Agreement.
(f) From and after the First Close of Escrow until the Second Close of
Escrow or the earlier termination of this Agreement, Buyer shall
promptly comply with all Legal Requirements relating to the Property.
(g) Buyer covenants and agrees to become a member of the El Camino Real
Owners Association which will, among other things, maintain certain
open space, easement areas, medians and entry areas within the property
over which it has jurisdiction. Buyer agrees to pay the dues and
assessments of said association. Buyer understands and agrees that the
Design Review Committee of said association has the right to review and
approve all building plans for improvements (including signage) to be
constructed on the Property. If and to the extent any portion of the
Property to be purchased by Buyer is annexable but has not been annexed
into the land covered by the Declaration of Covenants, Conditions and
Restrictions for the El Camino Real Owners Association ("CC&RS"), such
portion of the Property shall be so annexed at or prior to the Second
Close of Escrow; provided, however, that upon any such annexation of
the Property into the land covered by the CC&Rs, the members of the
Design Review Committee of the El Camino Real Owners Association who
are agents or employees of Xxxxxx shall be bound by any prior approval
by Seller of Buyer's Conceptual Plans approved by Seller (and, to the
extent already approved by Seller, the Building Plans) are in form and
substance reasonably satisfactory to such committee members.
(h) Buyer covenants and agrees to become a member of the Retention
Basin Area Association and to pay dues and assessments as required by
said association. If and to the extent any portion of the Property to
be purchased by Buyer is annexable but has not been annexed into the
land covered by the Declaration of Covenants, Conditions and
Restrictions for the Retention Basin Area Association, such portion of
the Property shall be so annexed at or prior to the Second Close of
Escrow.
18
(i) All representations and warranties set forth in this paragraph 8
shall be true as of the date hereof and the Closing Date. All
representations, warranties and covenants set forth in this paragraph 8
shall survive the Close of Escrow hereunder.
9. Option to Repurchase Property.
(a) In the event that Buyer fails to commence construction of office
buildings designed to contain at least 150,000 rentable square feet of
space described in Buyer's Conceptual Plans and Building Plans for the
Property pursuant to the terms hereof within one (1) year following
Buyer's receipt of all necessary development approvals, permits and
environmental review documents prepared pursuant to the California
Environmental Quality Act (collectively, the "ENTITLEMENTS") to allow
construction of such office buildings, with such one (1) year period
commencing upon the earlier of (i) expiration of the applicable statute
of limitations for legal challenges to Entitlements or (ii) resolution
of all legal challenges to such Entitlements which are timely filed,
including all appeals thereof, Seller at its option (the "REPURCHASE
OPTION") may repurchase: (i) Parcel A; or (ii) the Property, in the
event Seller has conveyed both Parcel A and Parcel B to Buyer
(hereinafter, the "REPURCHASE PROPERTY"); provided, however, that
regardless of the reason for any delays in obtaining the Entitlements
(including any Events of Force Majeure, as defined in paragraph 18
below), if the commencement of construction required hereunder does not
occur for any reason by the third (3rd) anniversary of the First
Closing Date, Seller shall have the right to exercise the Repurchase
Option in accordance with paragraph 9(c). Notwithstanding the
foregoing, the one (1) year period described in the preceding sentence
shall be conditioned upon Buyer's reasonable and diligent efforts to
obtain the Entitlements and timely response to any challenges to the
Entitlements, and Buyer's failure to act reasonably and diligently to
obtain the Entitlements and timely respond to any challenge thereto
shall entitle Seller to accelerate the commencement of such one (1)
year period if (A) Seller notifies Buyer in writing of Seller's
determination that Buyer is not acting reasonably and diligently to
obtain the Entitlements and (B) Buyer fails to reasonably satisfy
Seller's concerns set forth in such notice relating to Buyer's alleged
failure or cure such failure within thirty (30) days after Buyer's
receipt of such notice; provided further, that such one (1) year period
shall be extended for up to one (1) additional year due to Events of
Force Majeure, as defined in paragraph 18 below, which may occur prior
to the expiration of such one (1) period. The purchase price for the
Repurchase Property shall be equal to the original purchase price paid
to Seller by Buyer under this Agreement for the Repurchase Property.
Upon the tender by Seller to Buyer of the said repurchase price, Buyer
shall reconvey the Repurchase Property to Seller free and clear of any
encumbrance except matters of record as of the original Close of
Escrow(s) hereunder for the Repurchase Property.
(b) For the purpose of this paragraph 9, "COMMENCEMENT OF CONSTRUCTION"
shall be deemed to have occurred only after a building permit has been
obtained, rough grading has been completed and work on the foundations
for the office buildings designed to contain at least 150,000 rentable
square feet of space has commenced on the Property.
19
(c) Seller may exercise the Repurchase Option by giving written notice
to Buyer on or before one (1) year after the expiration of the period
within which Buyer is obligated to commence construction as specified
in subparagraph (a) above, in which event Buyer and Seller shall
execute escrow instructions to Escrow Holder providing for escrow to
close within thirty (30) days from the opening thereof, and Buyer shall
deposit into said escrow a grant deed to the Repurchase Property;
provided, however, that if Buyer commences construction at any time
prior to Seller's exercise of the Repurchase Option, the Repurchase
Option shall be nullified thereby. Said escrow shall be subject only to
approval by Seller of a then current preliminary title report. Any
title exceptions shown thereon created after the Closing Date(s) for
the Repurchase Property (except to the extent (i) required by law, (ii)
granted to governmental, quasi-governmental entities or owners'
associations having jurisdiction over the Repurchase Property, (iii)
granted to utilities providers, or (iv) otherwise approved in writing
by Seller at the time granted by Buyer) and disapproved by written
notice to Buyer through escrow, shall be removed by Buyer at its sole
expense at or prior to close of escrow. Seller and Buyer shall each pay
one-half of (i) all escrow fees; (ii) the cost of documentary transfer
tax for recording the deed; and (iii) the premium for a CLTA standard
form owner's coverage policy of title insurance in the amount of the
repurchase price, showing title to the Repurchase Property vested in
Seller or its assigns free and clear of all liens, encumbrances or
other title exceptions other than those expressly permitted hereunder.
All other costs or expenses shall be allocated between the parties in
the manner customary in San Diego County, California.
(d) Buyer agrees to execute and deliver through the Escrow a document
in the form attached hereto as Exhibit "D" hereto and by this reference
made a part hereof reflecting Seller's option to repurchase, as
provided in this paragraph 9. Escrow Holder shall cause such document
to be recorded at the First Close of Escrow. The Property shall remain
subject to Seller's Repurchase Option under this paragraph 9 following
any sale, assignment, transfer, conveyance or encumbrance of the
Property until commencement of construction. Notwithstanding the
foregoing, if Buyer offers to sell the Property to Seller pursuant to
Seller's right of first refusal set forth in paragraph 10 below, and
Seller fails to accept such Offer as provided therein, and Buyer
subsequently sells all or any portion of the Property to a third party,
the one (1) year time period set forth in subparagraph 9(a) shall
commence to run, with respect to such portion of the Property so sold,
as of the earlier of the (i) expiration of the applicable statute of
limitations for legal challenges to such third party's Entitlements, or
(ii) resolution of all legal challenges to such Entitlements which are
timely filed, including all appeals thereof, but subject to Seller's
right to accelerate the commencement of the one (1) year period, and
extension of such one (1) year period for Events of Force Majeure, as
set forth in subparagraph (a) above, but the period in which such third
party must commence construction shall not be delayed beyond the third
(3rd) anniversary of the date such portion of the Property is conveyed
to such third party.
(e) The Repurchase Option created hereby shall be irrevocable by Buyer
and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors in interest. Upon Buyer's
written request following Buyer's commencement of
20
construction on the Property, Seller shall execute and deliver to Buyer
any documents necessary to eliminate the Memorandum of Option to
Purchase from record title to the Property.
10. Right of First Refusal to Purchase Property.
(a) Prior to the termination of Seller's rights under this paragraph 10
as provided in subparagraph (e) below, Buyer shall not sell or agree to
sell the Property without first offering it to Seller. Subject to
subparagraph (f) below, the term "SELL" shall include any transfer or
conveyance of all or any portion of the Property or Buyer's interest in
all or a portion of the Property, or a lease with a term of thirty (30)
years or more. Buyer shall offer to sell the Property to Seller (the
"OFFER") on the same terms and conditions to Seller as those proposed
for a sale of the Property to a third party except that the purchase
price shall be at the lower of the Purchase Price paid by Buyer to
Seller for the Property pursuant to the terms of this Agreement (on a
per gross square foot basis if only a portion of the Property is to be
sold), or the purchase price offered to or by the third party. Seller
shall have five (5) business days from receipt of the Offer (the "OFFER
PERIOD") in which to accept or reject the Offer. The Offer shall expire
at 5:00 P.M. Pacific Time on the last day of the Offer Period, unless,
before that time, Seller has given notice of acceptance of the Offer.
The Offer shall contain the name of the proposed purchaser, the
proposed sale price, the terms of payment, the required deposit, the
time and place for close of escrow and any other material terms and
conditions on which the sale is to be consummated.
(b) If Seller gives timely notice of acceptance of the Offer, then
Buyer shall be obligated to sell and Seller shall be obligated to
purchase the Property (or portion thereof) at a price and on the terms
of the Offer. If Seller does not give timely notice of acceptance of
the Offer, Buyer may, for a period of six (6) months following the end
of the Offer Period, sell the Property (or portion thereof) to the
person identified in the Offer on the same terms and conditions set
forth in the Offer, except for the purchase price which will be in the
same amount which was originally offered to or by the third party.
(c) Buyer shall not sell the Property to any third party on terms or at
a price more favorable to such third party than those contained in the
Offer, nor shall Buyer sell the Property to any third party after
expiration of the twelve (12) month period set forth in subparagraph
(b) above without first making another Offer to Seller pursuant to the
procedures set forth herein.
(d) Buyer shall deliver to Seller through Escrow a documents in the
form of Exhibit "E" attached hereto and incorporated herein by
reference. Escrow Holder shall record such document at the First Close
of Escrow. Seller's right of first refusal shall run with the land and
be binding upon Buyer's successors-in-interest in the Property. Upon
termination of Seller's rights hereunder or Seller's failure to
exercise its right of first refusal hereunder, Seller shall execute and
deliver to Buyer an instrument terminating Seller's rights under this
paragraph 10.
21
(e) Seller's rights under this paragraph 10 shall terminate upon the
occurrence of all of the following: (i) a building permit has been
obtained, rough grading has been completed and work on the foundations
has commenced for office buildings designed to contain at least 150,000
rentable square feet of space described in Buyer's Conceptual Plans and
Building Plans for the Property; and (ii) all landscaping to be
installed on the Property has been completed.
(f) Notwithstanding anything herein to the contrary, the parties
acknowledge that the purpose of this right of first refusal is to
preclude Buyer from reselling the Property for a price higher than the
price herein. The parties further acknowledge that Buyer may desire to
(1) sell the Property and any building which Buyer will construct
thereon to a third party before said building is constructed, subject
to a leaseback of the office building to Buyer, or (2) sell the
property to an accommodating purchaser who will construct the
building(s) thereon for the purpose of a Section 1031 Exchange of
Buyer's existing headquarters facilities for such building(s) located
on the Property, or (3) some other transaction for the purpose of
financing the development of the Property which results in Buyer being
the primary occupant of the Property. Accordingly, this Right of First
Refusal does not apply to a contract in which Buyer is selling both the
Property and an office building to be constructed by Buyer, where the
office building is to be leased back to Buyer, exchanged with Buyer or
otherwise results in Buyer as the primary occupant of the Property.
Additionally, Seller's right of first refusal shall not apply to a
conveyance of the Property pursuant to a change of control of Buyer, as
permitted under paragraph 14 below, or any foreclosure of a security
interest in the Property if such security interest is granted for the
benefit of a lender unrelated to Buyer.
11. Buyer's Default; Liquidated Damages; Seller's Default.
(a) IF BUYER DEFAULTS HEREUNDER AND ESCROW FOR THE SALE OF PARCEL A
FAILS TO CLOSE AS A RESULT OF SUCH DEFAULT, THEN, SELLER'S SOLE REMEDY
SHALL BE TO TERMINATE THIS AGREEMENT BY GIVING WRITTEN NOTICE THEREOF
TO BUYER, WHEREUPON BUYER'S DEPOSIT (TOGETHER WITH ANY INTEREST THEREON
WHILE DEPOSITED IN ESCROW), SHALL BE PAID TO SELLER BY ESCROW HOLDER
(UNLESS ALREADY RELEASED TO SELLER PURSUANT TO PARAGRAPH 27 BELOW) AND
RETAINED BY SELLER AS LIQUIDATED DAMAGES AND NEITHER PARTY HERETO SHALL
HAVE ANY FURTHER LIABILITY OR OBLIGATION TO THE OTHER PARTY HERETO
EXCEPT FOR SELLER'S RIGHT TO RECEIVE AND RETAIN SUCH LIQUIDATED
DAMAGES. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT OF BUYER'S DEFAULT HEREUNDER ARE UNCERTAIN IN
AMOUNT AND DIFFICULT TO ASCERTAIN, AND THAT SUCH AMOUNT OF LIQUIDATED
DAMAGES IS REASONABLE UNDER THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTION 1671 ET SEQ., CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON
THE DATE HEREOF INCLUDING, WITHOUT LIMITATION, THE RELATIONSHIP OF SUCH
AMOUNT TO THE RANGE OF POTENTIAL HARM TO SELLER THAT CAN REASONABLY BE
ANTICIPATED AND THE
22
ANTICIPATION THAT PROOF OF ACTUAL DAMAGES RESULTING FROM SUCH DEFAULT
WOULD BE COSTLY AND INCONVENIENT. IN PLACING ITS INITIALS IN THE SPACE
BELOW, EACH PARTY HERETO SPECIFICALLY CONFIRMS THE ACCURACY OF THE
FOREGOING AND THE FACT THAT SUCH PARTY HAS BEEN REPRESENTED BY COUNSEL
WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
PH GS CC
_________________________ _________________________
Buyer's Initials Seller's Initials
(b) In the event the closing of the transaction contemplated in this
Agreement does not occur by reason of any default by Seller, then (a)
Escrow Agent shall return the Buyer's Deposit to Buyer, and (b) Buyer
shall be entitled to pursue any remedy available to it, at law or in
equity. Accordingly, Seller hereby acknowledges that, in the event of a
breach or threatened breach of any of the provisions of this Agreement
by Seller, damages at law may be an inadequate remedy to Buyer and,
accordingly, without limiting any other remedies of Buyer, Seller's
obligations under this Agreement may be enforceable by specific
performance.
12. Condemnation.
(a) In the event that prior to the First Closing Date, all or any
"material portion" (as defined in subparagraph (c) below) of the
Property is subject to a taking or a threatened taking by public
authority, Buyer shall have the right, exercisable by giving notice to
Seller within fifteen (15) days after receiving written notice of such
taking, and, if necessary, the First Closing Date shall be extended to
give Buyer the full 15 day period to make such election, to either (i)
to terminate this Agreement, in which case neither party shall have any
further rights or obligations hereunder except that (x) any money
(including, without limitation, the Deposit, and all interest accrued
thereon) or documents in Escrow shall be returned to the party
depositing the same, and (y) each party shall be responsible for
one-half (1/2) of any title or Escrow cancellation fee, or (ii) to
accept the Property in its then condition and to proceed with the First
Close of Escrow without an abatement or reduction in the Purchase
Price, in which case Buyer shall be entitled to receive an assignment
of all of Seller's rights to any condemnation award payable by reason
of such taking (provided, however, to the extent such award relates to
Parcel B, Buyer shall only be assigned Seller's rights upon the Second
Close of Escrow). If Buyer elects to proceed under clause (ii) above,
Seller shall not compromise, settle or adjust any claims to such award
without Buyer's prior written consent. In the event that after the
First Close of Escrow and prior to the Second Closing Date, all or any
portion of the Parcel B is subject to a taking or a threatened taking
by public authority, the Second Close of Escrow shall be accelerated to
occur prior to the date of such taking (or the date of granting a deed
in lieu thereof, as required by the condemning authority accepting such
deed), and Buyer shall accept Parcel B and pay the Parcel B Purchase
Price without any abatement or reduction in such Purchase Price, in
which case Buyer shall be entitled to receive an assignment of all of
Seller's rights to and interest in any condemnation award payable by
reason of such taking. Seller shall not compromise, settle or adjust
any claims
23
to such award without Buyer's prior written consent, and Buyer shall
have the sole right after the First Close of Escrow to negotiate and
otherwise deal with the condemning authority with respect to any
threatened taking of all or any portion of the Property.
(b) In the event that prior to a Closing Date any non-material portion
of that portion of the Property to be conveyed at such Closing is
subject to a taking or a threatened taking by public authority, Buyer
shall accept such portion of the Property in its then condition and
proceed with the First Close of Escrow and Second Close of Escrow
without any abatement or reduction in the Purchase Price, in which case
Buyer shall be entitled to receive an assignment of all of Seller's
rights to any condemnation award payable by reason of such taking
(provided, however, to the extent such award relates to Parcel B, Buyer
shall only be assigned Seller's rights upon the Second Close of
Escrow). In the event of any such non-material taking, Seller shall not
compromise, settle or adjust any claims to such award without Buyer's
prior written consent.
(c) For the purpose of this paragraph 12, a taking of a portion of the
Property shall be deemed to involve a material portion thereof if the
condemnation award with respect to such taking shall exceed Two Hundred
Fifty Thousand Dollars ($250,000) or such taking would materially
interfere with Buyer's development of the Property. The parties agree
that the reduction of the buildable square footage of building
improvements on the Property to less than 90% of the currently
allowable buildable square footage of the Property (based on the
current floor area ratio) shall be one example of a material
interference with Buyer's development of the Property.
(d) Seller agrees to give Buyer written notice of any taking, or
threatened taking, of the Property, promptly after learning of the
same.
13. Broker's Commissions.
Upon each Close of Escrow, a real estate sales commission (each, a
"COMMISSION") shall be paid by Seller to Business Real Estate Brokerage Company
("BRE"), as Seller's broker, pursuant to a separate agreement entered into
between Seller and BRE. Forty-five percent (45%) of each Commission payable to
BRE shall be paid to Buyer's broker, Phase 3 Properties, Inc. ("PHASE 3") upon
each Close of Escrow hereunder. Except for Seller's payment to BRE of the
Commission(s), and BRE's payment to Phase 3 of its share of such Commission(s)
(from payment of which Seller shall indemnify and hold harmless Buyer), Seller
and Buyer each agree that, to the extent any real estate commission or brokerage
and/or finder's fee shall be earned or claimed in connection with this Agreement
or the Close of Escrow hereunder, the payment of such fee or commission, and the
defense of any action in connection therewith, shall be the sole and exclusive
obligation of the party who requested the services of the broker and/or finder.
In the event that any claim, demand or cause of action or brokerage and/or
finder's fee is asserted against the party to this Agreement who did not request
such services, the party through whom the broker or finder is making the claim
shall indemnify, defend (with an attorney of the indemnitee's choice) and hold
harmless the other from and against any and all such claims, demands and causes
of action. Buyer hereby warrants and represents that it has not been
24
represented by any broker or "finder" in connection with its purchase of the
Property, except for Phase 3.
14. Assignment.
Buyer shall not assign its rights under this Agreement without the
prior written consent of Seller, which Seller may grant or withhold in its sole
discretion; provided, however, Buyer shall have the right to assign its rights
and obligations under this Agreement to (i) any entity which controls, is
controlled by or is under common control with Buyer, (ii) any entity resulting
from the merger, consolidation or other reorganization with Buyer whether or not
Buyer is the surviving entity, (iii) any entity which acquires all or
substantially all of the assets or stock of Buyer, (iv) any accommodating
purchaser pursuant to a Section 1031 Exchange or (v) any entity as part of a
sale/leaseback, operating lease or similar transaction pursuant to which
Neurocrine Biosciences, Inc. or its corporate successor or affiliate leases the
Property or the improvements from such entity pursuant to a written lease. As
used herein, "CONTROL" means the ownership of more than 50% of the voting
securities of an entity or possession of the right to vote more than 50% of the
voting interest in the ordinary direction of the entity's affairs. In the event
of an assignment permitted by this paragraph 14 or consented to in writing by
Seller, the assignee will automatically become (i) the person to (a) deliver
statements, notices, demands, approvals or other documents and (b) waive
conditions, all as may be permitted or required by this Agreement and not then
already accomplished by Buyer or a previous assignee, (ii) the grantee of the
Seller's Grant Deed; (iii) the insured under the Title Policy, and (iv) the
obligor under all of Buyer's obligations pursuant to this Agreement (with the
exception of the occupancy obligations set forth in subparagraph 8(e) and
elsewhere in this Agreement); further provided that the assignor, as the
intended ultimate occupant of the Property shall be an intended third party
beneficiary of all of Seller's covenants, representations, warranties and
obligations under this Agreement. No assignment shall release Buyer from any
liability hereunder to the extent arising prior to the effective date of such
assignment.
15. Successors in Interest.
Subject to paragraph 14 above, this Agreement shall inure to the
benefit of and be binding upon the successors, personal representatives, heirs
and assigns of the parties hereto. This Agreement is not intended to benefit any
person or entity not a party hereto.
16. Subdivision Improvement Agreements.
Pursuant to the terms of certain subdivision improvement agreements
related to the Property, between Seller and the City of San Diego (collectively,
the "SUBDIVISION IMPROVEMENT AGREEMENTS"), Seller is required to install certain
landscaping and sidewalks on the Property to the extent not already installed
thereon (the "LANDSCAPING WORK" and the "SIDEWALK WORK", respectively). Within
one-hundred-eighty (180) days after the First Close of Escrow, Seller shall have
access to the Property to complete and Seller shall complete any remaining
obligations under the Subdivision Improvement Agreements with respect to the
Sidewalk Work only and obtain the City's written acceptance of such work in
accordance with the applicable provisions of the Subdivision Improvement
Agreements, at Seller's sole cost and
25
expense. Within one-hundred eighty (180) days after the First Close of Escrow,
Buyer shall either: (i) enter into an agreement with the City of San Diego to
perform the Landscaping Work (as such Landscaping Work may be altered by
agreement between Buyer and the City of San Diego pursuant to Buyer's
development of the Property) and obtain the City's written agreement that Seller
has no obligation to perform the Landscaping Work unless Seller subsequently
takes title to the Property; or (ii) complete the Landscaping Work (as such
Landscaping Work may be altered by agreement between Buyer and the City of San
Diego pursuant to Buyer's development of the Property) at its sole cost and
expense and obtain the City's written acceptance of such work in accordance with
the applicable provisions of the Subdivision Improvement Agreements. Subject to
the limitations set forth in the last sentence of this paragraph, in the event
Buyer fails to perform its obligations with respect to the Landscaping Work
under subparagraphs (i) or (ii) above, Seller shall have the right, but not the
obligation, to enter upon the Property to take such actions as may be necessary
to perform the Landscaping Work and Buyer shall pay Seller an amount equal to
110% of the actual costs incurred by Seller in order to perform such work within
ten (10) days of a request therefor by Seller. In the event Seller fails to
perform its obligations with respect to the Sidewalk Work, Buyer shall have the
right, but not the obligation, to take such actions as may be necessary to
perform the Sidewalk Work and Seller shall pay Buyer an amount equal to 110% of
the actual costs incurred by Buyer in order to perform such work within ten (10)
days of a request therefor by Buyer. Notwithstanding the foregoing, if Seller
exercises the Repurchase Option or the right of first refusal to purchase the
Property, Seller shall assume Buyer's (and any successor Property owner's)
obligations relating to any Landscaping Work not performed by Buyer or Seller
prior to the conveyance of the Property to Seller, and Buyer shall have no
further liability hereunder, or under any agreement with the City of San Diego,
for such unperformed Landscaping Work.
17. Required Actions of Buyer and Seller.
Buyer and Seller agree to execute all such instruments and documents
and to take all actions pursuant to the provisions hereof in order to consummate
the purchase and sale herein contemplated and shall use their best efforts to
accomplish the First and Second Close of Escrow in accordance with the
provisions hereof, or to further perfect the conveyance, transfer and assignment
of the Property to Buyer.
18. Time Periods.
Unless "business day" is specified, the term "day" means a calendar
day. The term "business day" means any day other than a Saturday, Sunday or
federal or State of California holiday. If the last day for any act falls on a
Saturday, Sunday or holiday, the time for performance shall be extended to the
next business day. As used in this Agreement, an "Event of Force Majeure" shall
mean any delay encountered by Buyer in carrying out its obligations under this
Agreement resulting from strikes, lockouts, earthquakes, floods, unavailability
of labor, inclement weather, unavailability of standard materials or customary
facilities, equipment or supplies, governmental building moratoriums,
governmental or administrative action or inaction, riot, insurrection, mob
violence, acts of terrorism or civil commotion, war, acts of God or other acts
beyond the reasonable control of Buyer (financial condition excepted)
(individually or
26
collectively, "EVENTS OF FORCE MAJEURE"). The occurrence of any Events of Force
Majeure shall not excuse any failure by Buyer to make any payment required under
this Agreement.
19. Attorneys' Fees.
If either party files any action or brings any proceeding against the
other party arising out of this Agreement, or any agreement executed pursuant
hereto, or is made a party to any action or proceeding brought by Escrow Holder,
then as between Buyer and Seller, the prevailing party shall be entitled to
recover as an element of its costs of suit, and not as damages, reasonable
attorneys' fees to be fixed by the court. The prevailing party shall mean the
party which obtains the principal relief it has sought, whether by compromise,
settlement or judgment.
20. Notices.
Any notice, request, demand, instruction or other communication to be
given to either party hereunder shall be in writing and shall be delivered
personally, transmitted by telecopier, sent by overnight courier or by
registered or certified mail, return receipt requested, to the parties at the
following addresses:
Seller: Xxxxxx Homes
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a Copy to: Xxxxxx Homes
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a Copy to: Sandler and Xxxxx, LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Buyer: Neurocrine Biosciences, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Valeur-Xxxxxx, Ph.D
Telephone: (000) 000-0000
Fax: (000) 000-0000
27
With a Copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: W. Xxxxx Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
or such other addresses as the parties may from time to time direct. The address
to which any such communication shall be sent may be changed from time to time
by notice sent in the same manner as set forth above. All notices shall be
deemed delivered on the date personally delivered or upon receipt if transmitted
by telecopier or sent by overnight courier, or forty-eight (48) hours after the
date deposited into the United States mail.
21. Time is of the Essence.
Time is of the essence of this Agreement.
22. Entire Agreement.
This Agreement contains all of the agreements of the parties hereto
with respect to the matters contained herein, and no prior agreement or
understanding pertaining to any such matter shall be effective for any purpose.
No provision of this Agreement may be amended or added to except by an agreement
in writing signed by the parties hereto or their respective successors in
interest.
23. Interpretation.
The language in all parts of this Agreement shall be construed under
the laws of the State of California according to its normal and usual meaning,
and not strictly for or against either Buyer or Seller.
24. Paragraph Headings.
Headings at the beginning of each numbered paragraph of this Agreement
are solely for the convenience of the parties and are not a part of this
Agreement.
25. Counterparts.
This Agreement and any amendments or supplements to it, and the Escrow
Instructions herein referred to, may be executed in counterparts, and all
counterparts together shall be construed as one document.
26. 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 the First Close of
28
Escrow on the Property, 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 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 purchasers of the Property. Buyer's and
Seller's obligations under this paragraph 26 shall terminate upon the
termination of this Agreement (other than by the Close of Escrow).
27. Section 1031 Exchange.
Buyer may consummate the purchase of either or both parcels of the
Property as part of a Section 1031 Exchange, provided that: (1) although the
consummation or accomplishment of the Exchange shall not be a condition
precedent or condition subsequent to Buyer's obligations under this Agreement,
Buyer may delay the First Closing to a date not later than September 15, 2003
for the sole purpose of complying with the timing requirements of a Section 1031
Exchange for Buyer's existing headquarters facilities, provided that as
conditions of such delay, (a) Buyer shall have given Seller notice of such delay
no later than December 31, 2002, (b) the Purchase Price of Parcel A shall be
increased by an amount equal to Seller's imputed interest on the Parcel A
Purchase Price, which shall be deemed to be 8.25% per annum, for the period of
such delay ("SELLER'S CARRY COST"), which shall be payable by Buyer in monthly
installments, in arrears, on the first day of each calendar month (and if the
First Closing occurs on any day other than the last day of a calendar month,
Seller's Carry Cost shall accrue on a per diem basis for that portion of the
month in which the First Closing occurs, with such interest payable on the First
Close of Escrow) by payment directly to Seller, (c) the Deposit shall be
increased to Three Million Dollars ($3,000,000) as of the date that the Seller's
conditions to the First Closing are otherwise satisfied, and the Deposit shall
be released to Seller as of such date, and (d) all of Buyer's conditions to its
obligations under this Agreement with respect to the First Closing shall be
deemed satisfied or waived as of the date that the Seller's conditions to the
First Closing are otherwise satisfied; (2) the Second Closing shall not be
delayed or affected by reason of the Exchange; (3) Buyer shall effect the
Exchange through an assignment of this Agreement, or its rights under this
Agreement, to a qualified intermediary; (4) Seller 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 (5) Buyer shall pay any additional costs that
would not otherwise have been incurred by Buyer or Seller had Buyer not
consummated its purchase through the Exchange. Seller shall not by this
agreement or acquiescence to the Exchange 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 Buyer that the Section 1031 Exchange in fact
complies with the requirements of the Code.
[Remainder of Page Intentionally Blank -- Signature Page Follows]
29
[Signature page to Agreement for Purchase and Sale of Real Property and
Escrow Instructions]
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date first written above.
"Seller"
XXXXXX HOMES,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Its: Vice President
----------------------------
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Its: Assistant Vice President
----------------------------
"Buyer"
NEUROCRINE BIOSCIENCES, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Its: Exec V.P.
----------------------------
By:_____________________________
Its:_______________________
30
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Purchase Agreement, (ii) be Escrow Agent under said Purchase Agreement, (iii)
make all filings required under Section 6045 of the Internal Revenue Code of
1986, as amended, and (iv) be bound by said Purchase Agreement in the
performance of its duties as Escrow Agent; provided, however, the undersigned
shall have no obligations, liability or responsibility under (a) this Consent or
otherwise, unless and until said Purchase Agreement, fully signed by the
parties, has been delivered to the undersigned, or (b) any amendment to said
Purchase Agreement unless and until the same is accepted by the undersigned in
writing.
Dated: __________________ CHICAGO TITLE INSURANCE COMPANY
By _____________________________
Xxxxxx Xxxx
31
EXHIBIT "A"
SITE PLAN
EXHIBIT "B"
LEGAL DESCRIPTION OF PROPERTY
Parcel A:
Parcel 4 of Parcel Map No. 15061, in the City of San Diego, County of San Diego,
State of California, according to Map thereof filed in the Office of the County
Recorder of San Diego County.
Plus
That portion of Parcel 3 of Parcel Map No. 15061, in the City of San Diego,
County of San Diego, State of California, according to Map thereof filed in the
Office of the County Recorder of San Diego County, more particularly described
as follows:
Beginning at the most Southerly corner of said Parcel 3, thence along
the Southwesterly and Northwesterly lines of said Parcel 3 the
following courses: North 70(degree)17'30" West 916.08 feet; thence
North 00(degree)37'21" East 82.70 feet; thence leaving said
Northwesterly line South 70(degree)17'30" East 961.03 feet to the
Southeasterly line of said Parcel 3, being the beginning of a
non-tangent 1861.00 foot radius curve concave Southeasterly, to which a
radial line bears North 56(degree)09'02" West; thence along said
Southeasterly line, Southwesterly along the are of said curve through a
central angle of 02(degree)28'07" a distance of 80.18 feet to the Point
of Beginning.
Parcel B:
Xxx 00 xx Xxxxxxxxxx Xxxxxx Xxxxxxxxxxx Xxxx Xx. 0X, in the City of San
Diego, County of San Diego, State of California, according to Map
thereof No. 10945, filed in the Office of the County Recorder of San
Diego County.
EXHIBIT "B"
EXHIBIT "C"
PROPERTY DOCUMENTS
1. A current legal description of the Property.
2. An ALTA Survey, if available, for the Property. Buyer shall be
responsible for the cost of updating such ALTA Survey.
3. All plans, drawings, and specifications relating to the Property and
any soils reports, engineering and architectural studies, grading
plans, topographical maps, and similar data for the Property, if
available.
4. If such is available, a list and complete copies of all licenses,
permits, maps, and covenants, conditions, and restrictions (CC&R's) for
the Property.
5. Copies of the property tax bills, utility bills, and similar records
for the Property for the past three (3) years.
6. The Subdivision Improvement Agreements (as defined in paragraph 16).
EXHIBIT "C"
EXHIBIT "D"
Recording Requested By
And When Recorded Mail To:
XXXXXX HOMES
c/o Xxxxx X. Xxxxxx
Sandler and Xxxxx, LLP
1801 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
MEMORANDUM OF AGREEMENT
The undersigned, NEUROCRINE BIOSCIENCES, INC., a Delaware corporation
("Buyer") and XXXXXX HOMES, a California corporation ("Seller"), have entered
into that certain Agreement for Purchase and Sale of Real Property and Escrow
Instructions dated October 15, 2002 (the "Agreement"), affecting that certain
the real property described as set forth in Exhibit "1" hereto and incorporated
herein by this reference.
The parties have executed and recorded this instrument for the purpose
of imparting notice of the parties' rights and obligations under paragraph 8(e)
of the Agreement. Paragraph 8(e) of the Agreement provides as follows:
(e) Prior to commencement of construction, Buyer shall
deliver to Seller, for Seller's written approval in its reasonable
discretion, the following plans and other materials related to the
improvements Buyer proposes to construct on the Property (the "Building
Plans"): (i) complete building shell architectural plans, including
elevations, sections, mechanical and roof plans; (ii) conceptual
landscape plans, including lighting, landscape palette, hardscapes and
architectural features; (iii) grading plans; (iv) conceptual signage
plans for all signs to be erected upon the Property; and (v) color
boards including glass, roofing materials, exterior elevation, colors,
window mullions and veneer materials. Seller shall review and approve
or reasonably disapprove the Building Plans within ten (10) days after
Seller's receipt thereof. Seller shall not have the right to disapprove
Buyer's Building Plans to the extent such plans conform to Buyer's
Conceptual Plans approved by Seller. If Seller fails to notify Buyer of
its disapproval of the Building Plans and the reasons therefor within
said ten (10) day period, the Building Plans shall be deemed approved.
After Buyer's receipt of Seller's notice of disapproval and the reasons
therefor, if Buyer revises the Building Plans, Buyer shall submit the
revised Building Plans to Seller for its approval or reasonable
EXHIBIT "D"
disapproval which Seller shall give within ten (10) days after receipt
thereof. This process shall continue until the Building Plans are
approved. Seller's failure to notify Buyer of its approval or
reasonable disapproval and the reasons for such disapproval within said
ten (10) day period shall be deemed Seller's approval of the Building
Plans. Buyer hereby agrees that the building(s) and all other
improvements constructed on the Property by Buyer, or its
successors-in-interest, assigns or transferees shall be constructed in
accordance with the Building Plans approved by Seller. Buyer agrees
that the Building Plans shall conform to Seller's Building Guidelines
attached hereto as Exhibit "F". Buyer agrees that Seller's Building
Guidelines are reasonable. Seller agrees that Seller shall not
disapprove of any portion of the Building Plans for any reason contrary
to the Seller's Building Guidelines. Any material modifications to the
Building Plans shall require Seller's prior written approval. To the
extent that Seller has approved, or approves or permits any deviations
from the Seller's Building Guidelines in the construction of any
non-governmental buildings located on Lots 17, 18 or 19 of Employment
Center Development Unit 2B, according to Map thereof No. 10945, filed
in the Office of the County Recorder of San Diego County on May 21,
1984, located to the south of the Property, or Parcel 2 of Parcel Map
No. 15061, filed in the Office of the County Recorder of San Diego
County on December 16, 1987, located to the north of the Property,
similar deviations in the construction of Buyer's buildings on the
Property shall be permitted by Seller. It is intended that the approval
process set forth above shall apply to the development of the entire
Property; however, in the event the Property is developed in phases,
Buyer shall only be required to submit Building Plans to Seller for the
particular phase Buyer intends to develop at that time. Buyer may
concurrently submit the Building Plans to Seller and related
development applications to applicable government authorities for
approval, provided that Buyer acknowledges that the Building Plans
submitted to government authorities may be revised as a result of
Seller's review and approval process, and no development approvals from
government authorities shall limit Seller's rights under this
subparagraph 8(e). Buyer's and Seller's covenants set forth in this
paragraph 8(e) shall survive Close of Escrow. Buyer and Seller agree to
execute and deliver to Escrow Holder prior to the First Close of Escrow
a Memorandum of Agreement in the form attached hereto as Exhibit "C"
confirming the parties' rights and obligations under this paragraph
8(e). Escrow Holder shall record such Memorandum of Agreement at the
First Close of Escrow. Any liens upon the Property as security for
loans shall be subordinate to the Memorandum of Agreement.
The parties' rights and obligations shall be subject to the terms and
conditions contained in the Agreement. In the event of any inconsistency between
this Memorandum and the Agreement, the Agreement shall control. This Memorandum
and the Agreement shall bind and
EXHIBIT "D"
inure to the benefit of the parties hereto, and their respective heirs,
successors and assigns, subject, however, to the provisions of the Agreement on
assignment.
EXHIBIT "D"
IN WITNESS WHEREOF, Buyer and Seller have executed this Memorandum this
_____ day of ____________, 200__.
XXXXXX HOMES,
a California corporation
By:_____________________________
Its:_______________________
NEUROCRINE BIOSCIENCES, INC.,
a Delaware corporation
By:_____________________________
Its:_______________________
EXHIBIT "D"
EXHIBIT "E"
Recording Requested By
And When Recorded Mail To:
XXXXXX HOMES
c/o Xxxxx X. Xxxxxx
Xxxxxxx and Xxxxx, LLP
1801 Avenue of the Stars
Xxxxx 000, Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
-----------------------------------------------------------------
MEMORANDUM OF OPTION TO PURCHASE
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
the undersigned, NEUROCRINE BIOSCIENCES, INC., a Delaware corporation ("Buyer")
has granted and hereby grants to XXXXXX HOMES, a California corporation
("Xxxxxx"), the option to purchase, upon and subject to the terms, covenants,
conditions and agreements set forth in a certain Agreement for Purchase and Sale
of Real Property and Escrow Instructions between Buyer and Xxxxxx dated October
15, 2002 (the "Agreement"), and particularly paragraph 9, thereof, the real
property described as set forth in Exhibit "1" hereto and incorporated herein by
this reference.
The option to purchase shall commence on the recordation of this
instrument and shall terminate, to the extent not exercised, on such date as
provided in the aforesaid Agreement, but not later than the expiration of twenty
(20) years from the date of the Agreement, and shall otherwise be subject to the
terms and conditions contained therein. No further instrument shall be required
to remove this Memorandum from title other than the commencement of construction
within the time frame specified in the Agreement.
The parties have executed and recorded this instrument for the purpose
of imparting notice of the Agreement and the respective rights and obligations
of Buyer and Xxxxxx. The price and other terms are set forth in the Agreement,
all of the terms, covenants, and conditions of which are incorporated herein by
reference as though set forth fully herein. In the event of any inconsistency
between this Memorandum and the Agreement, the Agreement shall control. This
Memorandum and the Agreement shall bind and inure to the benefit of the parties
hereto, and their respective heirs, successors and assigns, subject, however, to
the provisions of the Agreement on assignment.
EXHIBIT "E"
IN WITNESS WHEREOF, Buyer and Xxxxxx have executed this Memorandum this
_____ day of ____________, ______.
XXXXXX HOMES,
a California corporation
By:______________________________
Its:______________________
NEUROCRINE BIOSCIENCES, INC.,
a Delaware corporation
By:______________________________
Its:______________________
EXHIBIT "E"
EXHIBIT "F"
Recording Requested By
And When Recorded Mail To:
XXXXXX HOMES
c/o Xxxxx X. Xxxxxx
Xxxxxxx and Xxxxx, LLP
1801 Avenue of the Stars
Xxxxx 000, Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
-----------------------------------------------------------------
MEMORANDUM OF RIGHT OF FIRST REFUSAL
By this Memorandum, NEUROCRINE BIOSCIENCES, INC., a Delaware
corporation ("Buyer") hereby grants to XXXXXX HOMES, a California corporation
("Xxxxxx") a right of first refusal to purchase the real property, together with
all improvements located upon the real property legally described as set forth
in Exhibit "1" attached hereto and by this reference incorporated herein and
upon the terms more particularly set forth in paragraph 10 of the Agreement For
Purchase and Sale of Real Property and Escrow Instructions dated October 15,
2002, between Buyer and Xxxxxx (the "Agreement").
Xxxxxx'x right of first refusal shall commence on the recordation of
this instrument and shall terminate, to the extent not exercised, as provided in
the aforesaid Agreement, but not later than the expiration of twenty (20) years
from the date of the Agreement set forth above, and shall otherwise be subject
to the terms and conditions contained therein. No further instrument shall be
required to remove this Memorandum from title other than the commencement of
construction within the time frame specified in the Agreement.
The parties have executed and recorded this instrument for the purpose
of imparting notice of the Agreement and the respective rights and obligations
of Buyer and Xxxxxx. The price and other terms are set forth in the Agreement,
all of the terms, covenants, and conditions of which are incorporated herein by
reference as though set forth fully herein. In the event of any inconsistency
between this Memorandum and the Agreement, the Agreement shall control. This
Memorandum and the Agreement shall bind and inure to the benefit of the parties
hereto, and their respective heirs, successors and assigns, subject, however, to
the provisions of the Agreement on assignment.
EXHIBIT "F"
IN WITNESS WHEREOF, Buyer and Xxxxxx have signed this Memorandum this
_____ day of ____________, 200__.
NEUROCRINE BIOSCIENCES, INC.,
a Delaware corporation
By:_______________________________
Its:______________________
XXXXXX HOMES,
a California corporation
By:_______________________________
Its:______________________
EXHIBIT "F"
EXHIBIT "G"
SELLER'S BUILDING GUIDELINES
The following include some, but not all, of the design criteria
utilized by Seller in its review of Buyer's Conceptual Plans and the Building
Plans:
1. No tilt-up concrete buildings will be permitted.
2. The proposed project will not exceed the maximum floor area
ratio to meet a minimum of 4 cars per 1,000 SF of usable area for office space
of the buildings, and 3 cars per 1,000 SF of usable area for laboratory space of
the buildings, provided that the Buyer's Conceptual Plans shall indicate the
location for additional parking spaces to provide at least 4 cars per 1,000
square feet of usable area of additional office space in the event that any or
all of the laboratory space of the buildings is converted to office space.
3. Up to 50% of the building exterior may be done in visual glass
and a minimum of 50% of the exterior shall be done in natural granite, marble,
brick or natural stones. All exterior glass shall be vision glass only. Spandrel
glass will not be accepted. Exterior cladding materials that will not be
permitted will be exterior finish and insulation systems (EFIS), dryvit, and
STO, etc. (plaster or stucco, artificial stone or cast stone products).
4. All mechanical equipment whether ground mounted or on building
rooftops shall be screened from view from ground level, at grade, where they
will be in enclosures of materials similar to the buildings, and otherwise
aesthetically-screened from above-grade locations. Trash dumpsters shall also be
placed within an enclosure consistent in design to the buildings.
5. Covering approximately 50% of the building's exterior, glass
plays an extremely important role in the aesthetic expression of any building.
Windows set in within the exterior cladding material will consist of glass
within aluminum frames of bronze anodized, or a kynar finish and/or other
similar finishes, including, without limitation, black or dark xxxx finishes.
Bright or mill aluminum will not be an acceptable product. Glass shall be either
clear or lightly tinted up to a shading heat gain coefficient of 0.50. Viracon
one inch (1") bronze uncoated insulating glass (as described in the performance
specifications for uncoated insulating glass located at the Viracon website
[xxx.xxxxxxx.xxx]), and glass of similar specifications, is expressly permitted
for building exterior glass. Color for the window frames and glass tinting shall
be approved by Seller. Windows integrated within the exterior skin shall be
recessed from the face of the cladding materials so as to read as punched
openings. The cladding material shall return into the window opening a minimum
of six inches. Glass and fenestration that are not permitted:
EXHIBIT "G"
A. Reflective glass (as determined by a shading heat
gain coefficient greater than that set forth above)
B. Dark-tinted xxxx light or bronze glass (as determined
by a shading heat gain coefficient greater than that
set forth above)
C. Spandrel glass
D. Non-recessed window openings.
EXHIBIT "G"
EXHIBIT "H"
GROUND LEASE
This Ground Lease (this "LEASE") is made and entered into as of the
30th day of May, 2003, (the "COMMENCEMENT DATE") by and between XXXXXX HOMES, a
California corporation ("LANDLORD") and NEUROCRINE INTERNATIONAL LLC, A DELAWARE
LIMITED LIABILITY COMPANY ("TENANT").
RECITALS
This Lease is entered into upon the basis of the following facts,
understandings and intentions of Landlord and Tenant:
A. Landlord is the fee owner of certain real property situated in the
City of San Diego, County of San Diego, State of California and more
particularly described in EXHIBIT A attached hereto (the "SITE"). The Site
consists of two separate legal parcels as follows: a single legal parcel
consisting of approximately 9.41 acres of land ("PARCEL A") and a single legal
parcel which shall consist of approximately 4.36 acres of land ("PARCEL B").
Parcel B is more particularly described in Exhibit B attached hereto, and is
sometimes hereinafter referred to as the "PREMISES."
B. Pursuant to that certain Agreement for Purchase and Sale of Real
Property and Escrow Instructions dated October 15, 2002, by and between
Landlord, as Seller and Neurocrine Biosciences, Inc. ("NBI") as Buyer as amended
by First Amendment dated January 15, 2003, Second Amendment dated February 28,
2003 and Third Amendment dated May 28, 2003 (as so amended, the "PURCHASE
AGREEMENT"), Landlord shall sell the Parcel A to NBI (or its successor, assign
or permitted designee) such party shall purchase Parcel A from Landlord on the
terms and conditions contained in the Purchase Agreement. NBI has assigned its
interest under the Purchase Agreement with respect to the purchase of Parcel A
to Peony Acquisitions LLC, a Delaware limited liability company ("Peony").
C. Upon acquisition of Parcel A by Peony, Tenant desires to lease the
Premises from Landlord.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, Landlord and Tenant, each for
itself, its successors and assigns, do hereby agree to perform all of the terms,
covenants, conditions and agreements herein provided to be kept and performed by
Landlord and Tenant, respectively.
ARTICLE I - ADDITIONAL DEFINITIONS
The terms defined below shall, have the meanings specified, unless the
context clearly indicates otherwise:
1.1 Tenant's Equipment. "TENANT'S EQUIPMENT" shall mean any items of
movable machinery, trade fixtures, furniture, furnishings or other personal
property which are capable of
1
being moved without substantial damage, whether or not attached to a building,
located on the Premises during the term of this Lease.
1.2 Tenant's Improvements. "TENANT'S IMPROVEMENTS" shall mean all
buildings, landscaping, driveways, parking areas, sidewalks, utilities and other
improvements (excluding Tenant's Equipment) which from time to time are placed,
constructed or located upon the Premises during the Term of this Lease.
1.3 Lease Year. "LEASE YEAR" shall mean a one-year period
commencing on the Commencement Date or any anniversary thereof and expiring at
midnight on the date before the next anniversary thereof.
ARTICLE II - DEMISE AND TERM
2.1 Demise. Landlord hereby demises and leases the Premises to
Tenant, and Tenant hereby takes and accepts the same from Landlord in its
unqualified "AS IS, WHERE IS AND WITH ALL FAULTS" condition.
2.2 Term. The term of this Lease shall be for a period (the
"TERM") commencing on the Commencement Date and continuing until 11:59 P.M. on
the thirty-first (31st) anniversary of the Commencement Date, unless canceled or
terminated prior to the expiration of the Term.
Notwithstanding the foregoing, the following events may cause the early
termination of this Lease:
2.2.1 Upon the earlier of (a) Second Closing (as defined in
Paragraph 5(b) of the Purchase Agreement), and (b) the termination of the
Purchase Agreement without transfer of Landlord's title to the Premises pursuant
thereto, this Lease shall terminate.
2.2.2 Upon Termination of this Lease for any reason other
than the transfer of Landlord's title to the Premises pursuant to the Purchase
Agreement, then Tenant shall convey to Landlord good and clear title to the
Tenant's Improvements, if any, in their then unqualified "AS IS, WHERE IS AND
WITH ALL FAULTS" condition, subject to matters of record but free of all
mortgages, liens, and other encumbrances securing the payment of money and all
leasehold rights of others and otherwise without warranty or representation by
Tenant.
2.3 Ground Lease. Landlord acknowledges that this is and shall for
all purposes be considered a ground lease, with Tenant retaining fee title
ownership, including all rights and privileges relating thereto, to all Tenant's
Equipment and Tenant's Improvements located at the Premises, except as otherwise
expressly provided herein.
2.4 Covenant of Quiet Enjoyment. Subject to the terms and
provisions of this Lease, Landlord covenants that Tenant shall lawfully,
peaceably, and quietly have, hold, occupy, and enjoy the Premises during the
term hereof, without hindrance or ejection by Landlord or by any persons
lawfully claiming under Landlord; the foregoing covenant of quiet enjoyment is
in lieu of any other covenant, express or implied.
2
ARTICLE III - RENT
3.1 Rent. Commencing on the Commencement Date, Tenant agrees to
pay rent ("RENT") to Landlord, in quarterly installments in the amount of
$100,000 per quarter of the Lease Year, payable in advance, at the address of
Landlord or such other place as Landlord may by written notice to Tenant from
time to time direct, without demand, deduction, or offset, except as expressly
otherwise provided herein, provided, however, if the Term commences on other
than the first day of an applicable quarter, or if the Term expires on other
than the last day of an applicable quarter, then the Quarterly Rent shall be
prorated according to the portion of the Term. Upon the Second Closing, if any,
all Rent, received by Landlord and interest thereon accruing at the rate of
8.25% per annum, shall be credited against the Parcel B Purchase Price (as
defined in the Purchase Agreement).
ARTICLE IV - USE
4.1 Use. Tenant may use the Premises for the construction,
operation, development, maintenance, repair and use of the Tenant Improvements
and the operation of Tenant's business therein, and for the parking of vehicles
associated therewith, and for ingress to and egress from any adjacent
properties, (the "PERMITTED USE"), and for any other legal purpose or purposes.
Landlord agrees not to impose, or consent to, any use restrictions on the
Premises limiting the Permitted Use, without in each case the prior written
consent of Tenant, in its sole discretion. Tenant shall procure at its expense
any permits and licenses required for the Permitted Use upon the Premises and
shall indemnify Landlord against any liability under any such permit or license
or for the failure to obtain the same. Except as provided in the Purchase
Agreement, nothing contained in this Lease shall be deemed to impose upon
Tenant, either directly, indirectly, constructively or implicitly, an obligation
to construct improvements upon the Premises, or remain open and operating for
any period or in accordance with any operating schedule, procedure or method,
all of which shall be within the absolute discretion of Tenant. No failure to
use the Premises shall, per se, constitute abandonment thereof.
4.2 Legal Compliance. Subject to such contest as Tenant may elect,
Tenant shall at its expense comply with the valid requirements of all
governmental authorities now or hereafter in force controlling or regulating the
use of the Premises by Tenant.
4.3 Utility and Other Charges. Tenant shall pay, before the same
becomes delinquent, all charges for gas, electricity, water, heat, telephone,
computer service, sewage and other utilities or services furnished to or for the
benefit of the Premises. To the extent required by law and at no expense to
Landlord, Landlord shall join in the execution of any applications required by
the provider of such utility service if necessary to do so in order for such
service to be extended or offered to the Premises and/or Tenant.
ARTICLE V - TAXES
5.1 Definition; Payment. The term "TAXES" shall mean and include
all real and personal property taxes and special assessments which are assessed
with respect to the Premises, the Tenant's Equipment and the Tenant's
Improvements for the period commencing with the Commencement Date through the
end of the Term, including, without limitation, payments made
3
with respect to the Premises and/or the Site pursuant to any payment in lieu of
tax (i.e., "pilot") agreement with any applicable taxing authority, exclusive of
(a) taxes, assessments or charges, however characterized, including supplemental
taxes, abatements, reassessments and deferments, payable with respect to periods
prior to the Commencement Date, and (b) deferred, catch-up ad valorem or
roll-back taxes applicable to the period prior to the Commencement Date. Such
excluded amounts under (a) and (b) above shall be the responsibility of Landlord
and paid by Landlord when due. If Tenant's obligation to pay Taxes shall cover a
period that is less than a full tax year, then such Taxes shall be prorated on a
daily basis. Landlord shall promptly provide to Tenant copies of each assessment
or tax valuation notice received by Landlord affecting the Premises. Tenant
shall be entitled to negotiate, at Tenant's sole expense, directly with the
taxing authority regarding the tax valuation of any portion of the Premises, the
Tenant's Equipment or the Tenant's Improvements. Tenant shall pay the Taxes as
hereinafter provided.
5.1.1 Tenant shall pay all Taxes directly to the taxing
authority before the same shall become delinquent.
5.1.2 Where any tax or special assessment is permitted by
law to be paid in installments, Tenant may elect to pay such tax or special
assessment in installments as and when each such installment becomes due;
provided, that Tenant shall only be liable for its share of those installments
which actually are or should have been paid by Tenant during the Term of this
Lease in accordance with this Section 5.1.
5.2 Right to Contest Taxes. Tenant may contest at its sole expense
the validity or amount of any tax or assessment, in whole or in part, or
endeavor to obtain a reduction of the assessed valuation for the purposes of
reducing the Taxes, by an appropriate proceeding commenced and conducted within
applicable time periods provided that the same does not result in an actual or
reasonably foreseeable adverse effect on the tax treatment of the balance of the
Tax Parcel. If the Premises are separately assessed for tax purposes, then
Tenant shall only have the right to contest Taxes assessed on the Premises and
Tenant's Improvements. Notwithstanding the foregoing, before initiating any such
proceeding, Tenant shall notify Landlord of Tenant's intention to do so. If
Landlord elects to initiate and prosecute such proceeding directly in its own
name, by giving Tenant written notice of such election not later than ten (10)
business days after receipt of such notice from Tenant, then Tenant shall have
no right to institute such proceedings unless Landlord fails to do so within
twenty (20) days after Landlord gives such notice to Tenant. If Landlord
notifies Tenant that Landlord elects to initiate and prosecute such proceedings,
then Landlord shall promptly initiate and diligently prosecute such proceedings
to a determination thereof and Tenant shall have the right to join in such
proceedings. If Landlord does not elect to initiate and prosecute such
proceedings, Landlord shall join in any such proceedings initiated by Tenant if
necessary to do so in order to prosecute such proceedings properly, and Landlord
shall cooperate in any contest conducted by Tenant; provided, however, that any
such contest shall be taken without expense to Landlord, except that, to the
extent Landlord's other property shall benefit therefrom, an allocable portion
of such expenses shall be netted from any collections received by Landlord.
Nothing herein contained, however, shall be so construed as to allow a
challenged tax to remain unpaid so as to incur any interest or penalty thereon.
Promptly upon the determination of any such contest, Tenant shall pay any
amounts (including all penalties and interest) due in respect of the challenged
tax, except that if the contested amount includes any amount payable by
Landlord, Landlord shall remain
4
liable for such amount, which shall be paid promptly upon such determination.
Tax refunds obtained pursuant to any contest conducted by Tenant shall be
payable to Tenant, and Tenant is authorized to collect the same. Landlord shall
be entitled to collect, and Tenant shall pay to Landlord, if Tenant collects the
same, net of Tenant's reasonable expenses of obtaining such refunds, or portions
thereof, any refunds, or portions thereof, attributable to taxes or assessments
previously paid by Landlord and not reimbursed by Tenant. If Landlord contests
the validity or amount of any taxes and/or assessments covering the Premises,
Tenant shall be entitled to collect, and Landlord shall pay to Tenant, if
Landlord collects the same, net of Landlord's reasonable expenses of obtaining
such refunds, or portions thereof, any refunds, or portions thereof,
attributable to Taxes previously paid by Tenant.
ARTICLE VI - INSURANCE
6.1 Tenant's Insurance. Tenant, at its expense, shall maintain at
all times during the Term the following insurance policies: (a) all risk
replacement cost property insurance, including extended coverage, vandalism,
malicious mischief, water damage coverage and demolition and debris removal,
insuring all personal property owned or used by Tenant and located in or upon
the Premises; (b) commercial general liability insurance, contractual liability
insurance and property damage insurance with respect to the Premises, with
reasonable limits to be set by Landlord from time to time but in any event not
less than $3,000,000 per occurrence for personal injury, sickness or death or
for damage to or destruction of property and not less than $3,000,000 aggregate
for personal injury, sickness or death or for damage to or destruction of
property; and (c) all risk replacement cost property insurance on the Tenant's
Equipment and the Tenant's Improvements to be constructed on the Premises,
covering all risks of direct physical loss or damage and so-called "extended
coverage" risks. All such policies shall be issued by insurers authorized to do
business in the State of California and shall contain a waiver of any rights of
subrogation thereunder. In addition, the policies shall name Landlord as an
additional insured, shall require at least thirty (30) days prior written notice
to Landlord of termination or nonrenewal and shall be primary and not
contributory to policies maintained by Landlord. Tenant shall deliver to
Landlord certificates evidencing the foregoing insurance or renewal thereof, as
the case may be.
6.2 Waiver of Subrogation. Landlord shall allow Tenant to offset
against the amount of any loss, cost, damage, liability or expense suffered or
incurred by Landlord which Tenant shall be obligated to pay to Landlord under
any provision of this Lease, the net proceeds of any insurance received by
Landlord for or on account of such loss, cost, damage, liability or expense,
provided that the allowance of such offset does not invalidate or prejudice the
policy or policies under which such proceeds were payable.
Tenant shall allow Landlord to offset against the amount of any loss,
cost, damage, liability or expense suffered or incurred by Tenant which Landlord
shall be obligated to pay to Tenant under any provision of this Lease, the net
proceeds of any insurance received or to be received by Tenant for or on account
of such loss, cost, damage, liability or expense, provided that the allowance of
such offset does not invalidate the policy or policies under which such proceeds
were payable.
5
The parties hereto shall each endeavor to procure an appropriate clause
in, or endorsement to, any fire or extended coverage insurance policy covering
the Premises and the buildings and personal property, fixtures and equipment
located thereon or therein, pursuant to which the insurance companies waive
subrogation or consent to a waiver of right of recovery, and, having obtained
such clauses and/or endorsements of waiver of subrogation or consent to a waiver
of right of recovery, each party hereby agrees that it will not make any claim
against or seek to recover from the other for any loss or damage to its property
or property of others resulting from fire or other perils to the extent the same
are covered by such fire and extended coverage insurance; provided, however,
that the release, discharge, exoneration and covenant not to xxx herein
contained shall be limited by the terms and provisions of the waiver of
subrogation clauses and/or endorsements or clauses and/or endorsements
consenting to a waiver of right of recovery and shall be coextensive therewith.
If either party may obtain such clause or endorsement only upon payment of an
additional premium, such party shall promptly so advise the other party and
shall be under no obligation to obtain such clause or enforcement unless such
other party pays the additional premium.
6.3 Tenant's Risk. Tenant agrees that Landlord shall have no
responsibility or liability for any loss or damage, however caused, to any of
the Tenant's Improvements, Tenant's Equipment, or any other real or personal
property of any nature of Tenant or of anyone claiming by, through, or under
Tenant unless caused by Landlord's gross negligence or willful misconduct.
ARTICLE VII - LIENS
In the event any mechanic's lien is filed against the Premises as a
result of services performed for or materials furnished for the use of Tenant or
Landlord, the party permitting or causing such lien to be so filed ("LIENOR")
agrees to cause such lien to be discharged within thirty (30) days after the
written request of the other party, either by paying the indebtedness which gave
rise to such lien or by posting bond or other security as shall be required by
law to obtain such release and discharge. If the Lienor shall fail to cause such
lien to be discharged or bonded against or properly insured over to the sole
satisfaction of the other party within such thirty (30) day period, then, in
addition to any other right or remedy, the other party may, but shall not be
obligated to (i) discharge the same either by paying the amounts claimed to be
due or by procuring the discharge of such lien from the Premises by bonding
proceedings or other legal proceedings, or (ii) obtain title insurance coverage
over the lien by a title insurance company acceptable to the other party.
Nothing herein shall prevent the Lienor from contesting the validity of the
indebtedness which gave rise to the lien in any manner it so chooses, so long as
the Lienor discharges such lien as aforesaid. The Lienor agrees to defend,
protect, indemnify and hold harmless the other party from and against all claims
and demands, including any action or proceeding brought thereon, and all costs,
losses, expenses and liabilities of any kind relating thereto, including
reasonable attorneys' fees and costs of suit, arising out of or resulting from
such lien.
6
ARTICLE VIII IMPROVEMENTS AND ALTERATIONS;
MAINTENANCE; DAMAGE AND DESTRUCTION
8.1 Construction of Improvements. Tenant is not under any
obligation to commence construction of any improvements on the Premises, but if
Tenant does so it will diligently pursue such construction to completion of an
enclosed shell. Tenant or its agents may, at Tenant's sole risk and expense,
from time to time throughout the Term of the Lease (a) perform all necessary
site assessments, feasibility studies, environmental assessments, surveys and
any additional due diligence tests and studies on the Site which Tenant, in its
sole discretion, may deem necessary, (b) make such improvements to the Premises
as it determines, and (c) thereafter improve, expand, contract, reconfigure,
demolish, or otherwise alter the Tenant's Improvements as Tenant deems in its
best interests. If it is necessary to grant easements to the provider of any
utility service over, across or through either the Premises or the Site,
Landlord agrees to and shall execute without undue delay the appropriate
documentation prepared by Tenant or on Tenant's behalf so long as such easements
do not materially interfere with the use of the Site by Landlord.
8.2 Permits. Landlord shall, at no expense to Landlord (except as
reimbursed by Tenant), join in the application for all permits, variances,
special uses, licenses or authorizations deemed necessary or desirable by Tenant
in connection with the construction of Tenant's Improvements and/or use of the
Premises if necessary in order to prosecute such applications properly, provided
that the same shall have first been reviewed and approved by Landlord, which
approval shall not be unreasonably withheld or delayed, provided the same do not
materially adversely affect the remainder of the Site or the performance of the
Site Work. In addition, Tenant shall have the right to review and approve any
and all applications for changes or variances to zoning of the Premises, or for
conditional use permits, where such permits or changes, if granted, may change
the use, zoning or character of any portion of the Premises, which approval
shall not be unreasonably withheld.
8.3 Maintenance. Tenant shall keep and maintain the Premises,
together with all Tenant's Improvements and other facilities thereon, in good
condition and repair.
8.4 Damage. Tenant shall take such action as may be required under
applicable municipal ordinances and other laws, rules and regulations with
respect to any damage or destruction of the Tenant's Improvements. Tenant shall
not have any obligation to repair and/or rebuild the Tenant's Improvements
damaged by fire or other casualty or cause. Tenant shall have the right to
determine how much, if any, of the damaged or destroyed Tenant's Improvements it
chooses to rebuild, and Landlord shall not have the right to terminate this
Lease if Tenant elects to rebuild and/or repair any material portion of the
Tenant's Improvements. Whether or not Tenant elects to repair or rebuild, Tenant
shall promptly provide a sightly safety barrier and shall use diligent efforts
to place the Premises in an orderly and safe condition.
ARTICLE IX ASSIGNMENT, SUBLETTING AND LEASEHOLD MORTGAGE
9.1 Assignment and Subletting.
9.1.1 Tenant shall have the right from time to time to
transfer or assign this Lease or any interest herein or sublet the Premises or
any portion thereof to any entity that
7
controls, is controlled by, or is under common control with the Tenant named
herein or to a third party as part of sale/leaseback operating lease, 1031
exchange or similar transaction pursuant to which Tenant leases the Property
from such third party pursuant to a written lease in its sole discretion and
without obtaining the consent of Landlord; provided, however, that any
transaction or series of transactions whereby the occupant of the Premises
ceases to control, be controlled by, or be under common control with the Tenant
named herein shall constitute an assignment or sublease subject to the
provisions of Section 9.1.2 below, and if any such transaction or series of
transactions shall occur without the express written consent of Landlord in each
instance, such assignment shall be deemed ineffective and the interest of the
Tenant under this lease shall automatically revert to the Tenant originally
named herein. For the purposes of this Article, the term "CONTROL" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management, affairs and policies of anyone, whether through the
ownership of voting securities, by contract or otherwise.
9.1.2 Except as expressly permitted pursuant to Section 9.1
above, and pursuant to Section 9.2 below, Tenant shall not, directly or
indirectly, assign, mortgage, pledge, or otherwise transfer, voluntarily or
involuntarily, this Lease or any interest herein or sublet (which term shall
include, without limitation, granting of concessions, licenses and the like or
allowing any other person or entity to occupy the whole or any part of the
Premises), without, in each instance, having first received the express written
consent of Landlord, which consent shall not unreasonably withheld, conditioned
or delayed. Any assignment, sublease, mortgage, or other transfer of all or any
part of Tenant's interest in this Lease or in the Premises is hereinafter
referred to as a "TRANSFER." No Transfer whether or not permitted under Sections
9.1 or 9.2 or approved by Landlord in accordance with the foregoing sentence,
shall relieve Tenant of its liability for the performance of all of the terms,
agreements, covenants and conditions of this Lease unless Landlord, in its sole
discretion, by separate written agreement, elects to release Tenant.
9.2 Leasehold Mortgagee and Beneficiary. Tenant shall have the
right at any time and from time to time (and as many times as Tenant desires),
without Landlord's consent, to mortgage or otherwise encumber Tenant's leasehold
estate and Tenant's rights under this Lease and interest in the Project, and in
any and all subleases and in and to all rents payable thereunder, together with
any or all improvements appurtenant thereto, pursuant to one or more leasehold
mortgages or deeds of trust ("LEASEHOLD MORTGAGE") and related instruments
reasonably required by the holder of such Leasehold Mortgage to perfect such
holder's security interest in and to Tenant's leasehold estate and all
appurtenant rights and interests relating thereto, and Tenant may assign its
interest in the Lease, the leasehold estate, the Project and all proceeds
thereof as collateral security for such Leasehold Mortgage. In no event shall
the fee to the Premises or Landlord's interest in and to this Lease be subject
or subordinate in any way to any such Leasehold Mortgage or to any
sale/leaseback or any other financing arrangement of any nature entered into by
or on behalf of Tenant. Notwithstanding any other provision of this Lease to the
contrary, until such time as Landlord shall have been provided written notice of
the existence of any Leasehold Mortgage or Other Financing Arrangement, as the
case may be, together with a copy of same, and the name and notice address of
the applicable Leasehold Mortgagee (defined below) or Permitted Transferee, as
the case may be, Landlord shall not be required to perform any of its
obligations with respect to such Leasehold Mortgagee or Permitted Transferee, as
the case may be, nor shall such Leasehold Mortgagee or Permitted Transferee, as
8
the case may be, be entitled to exercise any of its rights hereunder. Landlord
shall be obligated to hold all such documents and information related to the
Leasehold Mortgage or Other Financing Arrangement confidential, according to
terms to be agreed upon by Landlord and Tenant.
9.2.1 Notwithstanding any other provision of this Lease to
the contrary, no Leasehold Mortgage shall be granted unless and until such
Leasehold Mortgagee shall have entered into a written agreement with Tenant, for
the benefit of Landlord, providing for the following:
a. the Leasehold Mortgagee shall,
contemporaneously with the delivery thereof to Tenant, send Landlord copies of
all notices to Tenant under the Leasehold Mortgage and all other communications
to Tenant regarding any exercise of remedies under such Leasehold Mortgage;
b. upon any default by Tenant under such
Leasehold Mortgage, but subject to Tenant's cure rights under such Leasehold
Mortgage, and any other right of Tenant to purchase the Premises or other real
property interest securing such Leasehold Mortgage, or to otherwise redeem its
interest in the Premises from the lien of the Leasehold Mortgage, Landlord may
elect to purchase the interest of the Leasehold Mortgagee at par. (For the
purposes hereof, "par" is the amount of the payment due to the Leasehold
Mortgagee pursuant to the Leasehold Mortgagee, and secured by the value of the
Premises and of Tenant's Improvements;
c. following any default by Tenant under such
Leasehold Mortgage, and Tenant's failure to cure such default, or to otherwise
redeem its interest in the Premises from the Leasehold Mortgage, Landlord shall
have a right of first refusal to purchase the interest of the Leasehold
Mortgagee prior to any transfer of such interest to any third party, other than
at a public auction as to which Landlord has received actual written notice at
least ten (10) days prior to the date of such auction; and
d. that any such Leasehold Mortgage shall be
limited to the acquisition, development and construction costs (including, but
not limited to, all financing costs and other soft costs associated therewith)
associated with the development of the Premises as to which the Landlord has a
reversionary right (or which the Leasehold Mortgagee holds as collateral under a
Leasehold Mortgage) and, in any event, shall not be cross-collateralized with
any other obligations of the obligor.
9.2.2 Landlord shall not have the right to exercise any
remedies under this Lease unless Landlord shall first give the mortgagee under
the Leasehold Mortgage (a "LEASEHOLD MORTGAGEE"), (i) a notice of its intent to
exercise its rights hereunder (the "REMEDIES NOTICE") containing a statement of
all existing defaults under this Lease, and (ii) the opportunity to cure such
default(s), as follows: the Leasehold Mortgagee shall be entitled to cure any
stated monetary default for a period of fifteen (15) business days after receipt
of such Remedies Notice; the Leasehold Mortgagee shall be entitled to cure any
stated non-monetary default for a period of thirty (30) days after receipt of
such Remedies Notice, provided however, that if such non-monetary default is not
reasonably susceptible of cure within such 30-day period, then, provided the
Leasehold Mortgagee has commenced to cure such Default within
9
such 30-day period and thereafter prosecutes the same to completion with
reasonable diligence, the Leasehold Mortgagee shall be entitled to such
additional time as is reasonably necessary to cure such Default. If the
Leasehold Mortgagee cures all stated defaults in accordance with the foregoing
provisions, then both the notice of default given to Tenant and the Remedies
Notice shall be null and void and of no effect. Landlord agrees to accept
performance of Tenant's obligations hereunder by the Leasehold Mortgagee with
the same force and effect as though observed or performed by Tenant.
9.2.3 Nothing contained herein shall require the Leasehold
Mortgagee, to cure any Default not reasonably susceptible of being cured by the
Leasehold Mortgagee, including but not limited to a Default based upon the
bankruptcy or insolvency of Tenant. If the stated default is cured and the
Leasehold Mortgagee discontinues such foreclosure or other steps, this Lease
shall continue in full force and effect as if Tenant had not defaulted under
this Lease.
9.2.4 Under no circumstances shall the Leasehold Mortgagee
be liable for the performance of Tenant's obligation hereunder unless and until
the Leasehold Mortgagee acquires Tenant's rights and interest by foreclosure or
other assignment, transfer or proceeding. In the event that the Leasehold
Mortgagee so acquires Tenant's rights and interest, the liability of the
Leasehold Mortgagee, its successors and assigns shall be limited to their
leasehold interest pursuant to this Lease, and then only for obligations which
arise during the period of such ownership. None of the Leasehold Mortgagee, or
its respective successors or assigns, or any agent, partner, officer, trustee,
director, shareholder or principal (disclosed or undisclosed) of the Leasehold
Mortgagee shall have any personal liability hereunder. The Leasehold Mortgagee
shall be released from any obligations hereunder arising after the transfer of
its leasehold interests.
9.2.5 In the event a Leasehold Mortgagee, or its nominee
designated for that purpose, acquires Tenant's interest in this Lease, the
leasehold estate and Tenant's Improvements pursuant to any proceedings for
foreclosure of such Leasehold Mortgage, or by a voluntary assignment or transfer
of this Lease and the leasehold estate and Tenant's Improvements in lieu of
foreclosure or otherwise, the Leasehold Mortgagee or its nominee or assignee as
aforesaid shall be deemed an assignee of all the rights of Tenant under this
Lease.
9.2.6 Within ten (10) business days after written request
by Tenant or Tenant's Permitted Assignee, Landlord agrees to deliver an estoppel
certificate to any proposed Leasehold Mortgagee or to Tenant certifying (if such
be the case): (i) the amount of Rent and additional rent due under this Lease,
if any, and the date to which Rent has been paid; (ii) that this Lease is in
full force and effect; (iii) that Landlord has no knowledge of any Default under
this Lease or, if any default exists, specifying the nature of the default; and
(iv) that there are no defenses or offsets which may be asserted by Landlord
against Tenant in respect of obligations pursuant to this Lease or if defenses
or offsets exist, specifying the nature of such offsets or defenses.
9.2.7 If Tenant, or any trustee of Tenant, shall reject
this Lease pursuant to Section 365(h) of the Bankruptcy Code, 11 U.S.C. Section
101, et seq. (the "BANKRUPTCY CODE"), (i) Tenant shall without further act or
deed be deemed to have elected under Section 365(h)(1) of the Bankruptcy Code to
remain in possession of the Premises for the balance of the term of this
10
Lease, (ii) any exercise or attempted exercise by Tenant of a right to treat
this Lease as terminated under Section 365(h)(1) of the Bankruptcy Code shall be
void and (iii) no Leasehold Mortgage shall be affected or impaired by any such
rejection of this Lease. (For the purposes of Section 365(h) of the Bankruptcy
Code, the term "POSSESSION" shall mean the right to possession of the Property
granted to Tenant under this Lease notwithstanding that all or part of the
Premises shall have been subleased.)
ARTICLE X ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Third Party Rights. Landlord covenants that during the Term
Landlord shall not grant to anyone, any rights in the Site that would materially
limit or interfere with Tenant's right to use the Premises as permitted under
this Lease.
10.2 Binding Agreement on Landlord. Landlord represents and
warrants that the individuals signing this Lease and all other documents
executed or to be executed pursuant hereto on behalf of Landlord are and shall
be duly authorized to sign the same on Landlord's behalf and to bind Landlord
thereto. This Lease is and shall be binding upon and enforceable against
Landlord in accordance with its terms.
10.3 Binding Agreement on Tenant. Tenant represents and warrants
that the individuals signing this Lease and all other documents executed or to
be executed pursuant hereto on behalf of Tenant are and shall be duly authorized
to sign the same on Tenant's behalf and to bind Tenant thereto. This Lease is
and shall be binding upon and enforceable against Tenant in accordance with its
terms.
10.4 Hazardous Substances. Tenant shall indemnify, protect, defend
and hold Landlord and its officers, directors, employees, shareholders, agents
and their respective successors and assigns, forever harmless from and against
any and all claims, actions, judgments, liabilities, liens, damages, penalties,
fines, costs and expenses, including but not limited to attorneys' fees, costs
of defense and expert/consultant fees asserted against, imposed on, or suffered
or incurred by Landlord (or the Premises) directly or indirectly arising out of
or in connection with any Hazardous Materials that have been introduced to the
Premises by Tenant, any of its affiliates (but, for the purposes of this Section
10.4, Landlord, and any other entity that would constitute an affiliate of
Tenant solely by reason of its relationship to Landlord shall not be considered
affiliates of Tenant), any party claiming by, through, or under Tenant, or the
agents, contractors, or employees of any of them. The representations and
warranties in this Lease and the indemnity obligations set forth hereunder shall
survive the expiration or termination of this Lease.
ARTICLE XI - SURRENDER
11.1 Expiration of Term. Upon the expiration or earlier termination
of the Term of this Lease for any reason other than transfer of Landlord's title
to the Premises pursuant to the Purchase Agreement, Tenant will remove such of
Tenant's Equipment as Landlord may require to be removed by notice to Tenant or
that Tenant may elect to remove, and surrender and deliver to Landlord the
Premises and to the extent then existing, the Tenant's Improvements, in their
then "AS IS, WHERE IS AND WITH ALL FAULTS" condition. The Tenant's Improvements
11
that remain upon the Premises at such expiration or earlier termination for any
reason other than transfer of Landlord's title to the Premises pursuant to the
Purchase Agreement and any of Tenant's Equipment not so required or elected to
be removed shall automatically become the property of Landlord, and Landlord
hereby agrees to accept title thereto and Tenant agrees to convey to Landlord
good and clear title to such Tenant Improvements free and clear of (a) all
mortgages, liens, and other encumbrances securing the payment of money, and (b)
all leasehold rights of others, unless approved in writing by Landlord, which
approval may be withheld or conditioned at Landlord's sole discretion, and
otherwise without representation or warranty by Tenant.
ARTICLE XII - HOLDING OVER AFTER TERM
If Tenant shall hold the Premises after the expiration or earlier
termination of this Lease for any reason other than transfer of Landlord's title
to the Premises pursuant to the Purchase Agreement, such holding over shall, in
the absence of written agreement on the subject, be deemed to have created a
tenancy from month to month terminable on thirty (30) days notice by either
party to the other, at a monthly rental equal to the monthly rental payable
during the last year of said Term.
ARTICLE XIII - DEFAULT
13.1 Tenant's Default. Tenant shall be in "DEFAULT" under this
Lease if (i) Tenant shall not have paid the Rent or other amounts payable by
Tenant pursuant to this Lease within fifteen (15) business days following
Tenant's receipt of written notice from Landlord stating that such payment was
not made when due (a "MONETARY DEFAULT"); or (ii) Tenant shall not have
performed any of the other covenants, terms, conditions or provisions of this
Lease within thirty (30) days after Tenant's receipt of written notice
specifying such failure; provided however, with respect to those failures which
cannot with due diligence be cured within said 30-day period, Tenant shall not
be deemed to be in default hereunder if Tenant commences to cure such default
within such 30-day period and thereafter diligently continues to cure such
default (a "NON-MONETARY DEFAULT").
13.2 Landlord's Remedies. If Landlord shall claim that Tenant is in
Default, then, in addition to all other rights and remedies of Landlord under
this Lease, at law, or in equity, Landlord's shall have the right to draw down
upon the full amount of the Letter of Credit (as defined in the Purchase
Agreement) in satisfaction of Tenant's purchase obligations under the Purchase
Agreement, and convey title to the Property to Tenant, subject to Landlord's
rights as Seller under the Purchase Agreement.
In addition to the foregoing, Landlord may (but shall not be obligated
to) cure such Default on behalf of Tenant, and upon demand by Landlord, Tenant
shall promptly pay to Landlord as additional rent the reasonable costs and
expenses of such cure. Notwithstanding anything contained in this Lease to the
contrary, in the event of an emergency situation, as reasonably determined by
Landlord based on circumstances known at the time, the correction of which is
Tenant's responsibility, Landlord shall immediately notify Tenant orally or by
facsimile, and upon the failure of Tenant to immediately correct the emergency
situation, Landlord shall have the right to correct the same and receive
reimbursement therefor pursuant to
12
the terms set forth in the foregoing sentence, provided that the failure of
Tenant to immediately correct the emergency situation shall not be considered a
Default under this Lease. An "emergency" situation shall be presumed if the
prompt or immediate failure to cure has the potential to result in injuries to
persons or damage to property or a material, adverse consequence to the
business(es) then being operated on the Site.
13.3 Landlord's Default and Tenant's Remedies. In the event of any
breach or default by Landlord under this Lease which continues for a period of
thirty (30) days after notice thereof from Tenant; (provided, however, with
respect to those failures which cannot with due diligence be cured with said
30-day period, Landlord shall not be deemed to be in default hereunder if
Landlord commences to cure such default within such 30-day period and thereafter
continues the curing of such default with all due diligence), then in addition
to all other rights and remedies of Tenant under this Lease and at law or
equity, Tenant may (but shall not be obligated to) cure such breach on behalf of
Landlord, and upon demand by Tenant, Landlord shall promptly pay to Tenant the
reasonable costs and expenses of such cure. Notwithstanding anything contained
in this Lease to the contrary, in the event of an emergency situation, as
reasonably determined by Tenant based on circumstances known at the time, the
correction of which is Landlord's responsibility, Tenant shall immediately
notify Landlord, and upon the failure of Landlord to immediately correct the
emergency situation, Tenant shall have the right to correct the same and receive
reimbursement therefor pursuant to the terms set forth in the foregoing
sentence, provided that the failure of Landlord to immediately correct the
emergency situation shall not be considered a default under this Lease. An
"emergency" situation shall be presumed if the prompt or immediate failure to
cure has the potential to result in injuries to persons or damage to property or
a material, adverse consequence to the business(es) then being operated on the
Premises.
13.4 Delay; Waiver. No delay or omission by either party hereto to
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms of this Lease shall impair the
exercise of any such right or power or otherwise be construed to be a waiver
thereof, except as otherwise herein provided. A waiver by either of the parties
hereto of any of the covenants, conditions or agreements hereof to be performed
by the other shall not be construed to be a waiver of any subsequent breach
thereof or of any other covenant, condition or agreement herein contained.
13.5 Bankruptcy. If a petition of bankruptcy or reorganization
shall be filed by Tenant or if any such petition shall be filed against Tenant
and not dismissed within one hundred twenty (120) days of filing, or if in any
proceeding based upon the insolvency of Tenant a receiver or trustee of all of
the property of Tenant shall be appointed and shall not be discharged within one
hundred twenty (120) days after such appointment, then any such event shall be a
Default under this Lease unless the trustee or receiver affirms or assumes this
Lease within one hundred twenty (120) days (or such reasonable period as the
court with jurisdiction shall determine) after the commencement of the
proceedings and cures any other Default under this Lease within one hundred
twenty (120) days (or within such reasonable period as the court with
jurisdiction shall determine) after affirmation or assumption of this Lease. In
any event, the foregoing shall be subject to all applicable federal and state
bankruptcy laws.
13
ARTICLE XIV - CONDEMNATION
In the event of a condemnation of all or any portion of the Premises
then the provisions of Section 12 of the Purchase Agreement shall control and
the this Lease shall terminate as of the date of any such taking, and Rent shall
be prorated as of such date.
14.1 Awards. Pursuant to the terms of Section 12 of the Purchase
Agreement, Tenant shall be entitled to the entire award made for such
condemnation with respect to the Premises, and for Tenant's Improvements
including any severance damages with respect thereto. Tenant shall further be
entitled to make a separate claim for an award (i) made with respect to a taking
of its trade fixtures or Tenant's Equipment, (ii) made with respect to Tenant's
removal or relocation costs, damages to Tenant's personal property, any special
damages of Tenant, or loss of Tenant's business profits or goodwill, (iii) made
for the value of the leasehold estate of Tenant for the remainder of the Term of
this Lease, (iv) made with respect to the diminution in the value of Tenant's
leasehold interest attributable to the operation of the Premises, and (v) for
damages for interruptions or dislocation of Tenant's business and for moving and
remodeling expenses. Any awards in addition to the awards described herein shall
be payable to Tenant.
ARTICLE XV - EXPENSE OF ENFORCEMENT
In any action to enforce any of the rights and remedies hereunder, or
arising on account of a default in the performance of any of the obligations
hereunder, then the substantially prevailing party in any such litigation shall
also receive from the other party all costs and reasonable attorneys' fees,
including in-house legal fees, incurred by such party in such litigation,
including on appeal.
ARTICLE XVI - NOTICE
All notices, demands and requests (collectively, the "NOTICE") required
or permitted to be given under this Lease must be in writing and shall be deemed
to have been given as of the date such notice is (i) delivered to the party
intended, (ii) delivered to the then designated address of the party intended,
or (iii) sent by nationally recognized overnight courier or by United States
certified mail, return receipt requested, postage prepaid and addressed to the
then-designated address of the party intended. The initial addresses of the
parties shall be:
To Landlord: Xxxxxx Homes
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Homes
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
14
Facsimile: (000) 000-0000
With a copy to: Sandler & Xxxxx, LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
15
To Tenant: Care of:
Neurocrine Biosciences, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Upon at least ten (10) days prior written notice, each party shall have
the right to change its address to any other address within the United States of
America.
ARTICLE XVII - MISCELLANEOUS
17.1 Entire Agreement. This Lease, along with the Purchase
Agreement, and the exhibits hereto and thereto contain the entire agreement
between the parties relating to the Premises. Any prior negotiations,
correspondence, memoranda or agreements are superseded in total by this Lease
and the exhibits hereto. This Lease has been fully negotiated at arms length
between the signatories hereto, and after advice by counsel and other
representatives chosen by such signatories, and such signatories are fully
informed with respect thereto; no such signatory shall be deemed the scrivener
of this Lease; and, based on the foregoing, the provisions of this Lease and the
exhibits hereto shall be construed as a whole according to their common meaning
and not strictly for or against any party. Landlord and Tenant may consider,
approve or disapprove any proposed amendment to this Lease in their respective
sole and absolute discretion without regard to reasonableness or timeliness.
This Lease shall be binding upon, inure to the benefit of, and be enforceable by
Landlord and Tenant, and their respective successors and permitted assigns. Time
is declared to be of the essence of this Lease.
17.2 Headings. The Article headings contained in this Lease are for
purposes of reference only and shall not limit or define the meaning of any of
the terms or provisions hereof.
17.3 Governing Law. This Lease shall be governed by and construed
in accordance with the laws of the State of California.
17.4 Force Majeure. Whenever performance is required of any party
hereunder, such party shall use all due diligence to perform and take all
necessary measures in good faith to perform; provided, however, that if
completion of performance shall be delayed at any time by reason of acts of God,
significant variations from normal weather conditions reasonably expected during
the period in question, war, civil commotion, acts of terrorism, riots, strikes,
picketing, or other labor disputes, unavailability of labor or materials or
damage to work in progress by reason of fire or other casualty or causes beyond
the reasonable control of a party (other than financial reasons), then the time
for performance as herein specified shall be appropriately extended by the time
of the delay actually caused. The provisions of this section shall not operate
to excuse any party from the prompt payment of any monies required by this
Lease.
16
17.5 Brokers. Tenant and Landlord represent and warrant to each
other that (except as covered pursuant to the Purchase Agreement) neither has
had any dealings or discussions with any broker or agent, licensed or otherwise
in connection with this Lease. Landlord and Tenant each covenants to protect,
defend, hold harmless and indemnify the other from and against any and all
losses, liabilities, damages, costs and expenses (including reasonable legal
fees) arising out of or in connection with any other claim by any brokers or
agents for brokerage commissions relating to this Lease (in excess of those
payable pursuant to the Purchase Agreement) alleged to be due because of
dealings or discussions with the indemnifying party.
17.6 Approvals.
17.6.1 Except as otherwise specifically provided in this
Lease, with respect to any matter which either Landlord or Tenant has
specifically been granted an approval or consent right under this Lease, nothing
contained in this Lease shall limit the right of a party to exercise its
business judgment, or act in a subjective manner with respect to any matter as
to which it has specifically been granted such right, or the right to act in its
sole discretion or sole judgment, whether "objectively" reasonable under the
circumstances, and any such decision shall not be deemed inconsistent with any
covenant of good faith and fair dealing otherwise implied by law to be part of
this Lease. The parties intend by this Lease to set forth their entire
understanding with respect to the terms, covenants, conditions and standards
pursuant to which their obligations are to be judged and their performance
measured. Pursuant to the Permitted Uses, Landlord agrees to execute such
easements and restrictions of record, with respect to the Premises, as may be
necessary for Tenant's development of the Site as a single campus project, as
may be requested from time to time by Tenant.
17.6.2 Unless provision is made for a specific time period,
each response to a request for an approval or consent required to be provided
pursuant to this Lease shall be given by the party to whom directed within
thirty (30) days of receipt. Each disapproval shall be in writing and, subject
to Section 17.6.1 above, the reasons shall be clearly stated. If a response is
not given within the required time period, the requested party shall be deemed
to have given its approval if the original notice stated that failure to respond
within the applicable time period will be deemed an approval.
17.7 Notice of Lease. Landlord and Tenant have executed and
delivered to each other a memorandum of this Lease for recording. The Memorandum
of Lease shall promptly be recorded by Tenant in the appropriate public records
for the Premises.
17.8 Inspection. Landlord and its authorized agents shall at any
and all reasonable times, and upon reasonable notice to Tenant, have the right
to enter the Premises to inspect the same, or to show the Premises to
prospective mortgagees.
17.9 Survival. Notwithstanding the expiration or termination of the
Term of this Lease, all obligations of the parties hereunder that accrued or are
attributable to any period prior to such expiration or termination, including,
without limitation, any obligation to pay Rent and additional rent for any such
period and any indemnity obligations with respect to occurrences during any such
period, shall remain in effect and enforceable until performed in full.
17
17.10 Counterparts. This Lease may be signed in counterparts, each
of which shall be deemed an original and all of which when taken together shall
constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed these presents as
of the day and year first above written.
"LANDLORD" "TENANT"
XXXXXX HOMES NEUROCRINE INTERNATIONAL LLC,
a California corporation a Delaware limited liability company
By: NEUROCRINE BIOSCIENCES, INC.
Its: Managing Member
By: ________________________________ By: _______________________________
Name: ________________________________ Name: _______________________________
Title: ________________________________ Title _______________________________
18
EXHIBIT A - LEGAL DESCRIPTION OF THE SITE
PARCEL A
Parcel 4 of Parcel Map No. 15061, in the City of San Diego, County of San Diego,
State of California, according to Map thereof filed in the Office of the County
Recorder of San Diego County.
That portion of Parcel 3 of Parcel Map No. 15061, in the City of San Diego,
County of San Diego, State of California, according to Map thereof filed in the
Office of the County Recorder of San Diego County, more particularly described
as follows:
Beginning at the most Southerly corner of said Parcel 3, thence along the
Southwesterly and Northwesterly lines of said Parcel 3 the following courses:
North 70(degree)17'30" West 916.08 feet; thence North 00(degree)37'21" East
82.70 feet; thence leaving said Northwesterly line South 70(degree)17'30" East
961.03 feet to the Southeasterly line of said Parcel 3, being the beginning of a
non-tangent 1861.00 foot radius curve concave Southeasterly, to which a radial
line bears North 56(degree)09'02" West; thence along said Southeasterly line,
Southwesterly along the arc of said curve through a central angle of
02(degree)28'07" a distance of 80.18 feet to the Point of Beginning.
PARCEL B
Lot 17 of Employment Center Development Unit No. 2B, in the City of San Diego,
County of San Diego, State of California, according to Map thereof No. 10945,
filed in the Office of the County Recorder of San Diego County.
1
EXHIBIT B - LEGAL DESCRIPTION OF THE PREMISES
Lot 17 of Employment Center Development Unit No. 2B, in the City of San Diego,
County of San Diego, State of California, according to Map thereof No. 10945,
filed in the Office of the County Recorder of San Diego County.
1
EXHIBIT "I"
DEED OF TRUST
RECORDING REQUESTED BY )
)
Chicago Title Insurance Company )
) )
WHEN RECORDED, RETURN TO: )
)
Xxxxxxx, Phleger & Xxxxxxxx )
00000 Xx Xxxxxx Xxxx )
Xxx Xxxxx, Xxxxxxxxxx 00000 )
Attn: W. Xxxxx Xxxx )
)
--------------------------------------------------------------------------------
(Space Above for Recorder's Use)
DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
(LETTER OF CREDIT/SECURITY DEPOSIT)
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
("Deed of Trust"), is made effective as of the ___ day of _________, 2003, by
XXXXXX HOMES, a California corporation ("Trustor"), as trustor, to CHICAGO TITLE
INSURANCE COMPANY ("Trustee"), for the use and benefit of NEUROCRINE
BIOSCIENCES, INC., a Delaware corporation ("Beneficiary").
WHEREAS, Trustor has agreed to sell to Beneficiary and Beneficiary has
agreed to purchase from Trustor pursuant to the terms and conditions of that
certain Agreement for Purchase and Sale of Real Property and Escrow Instructions
dated October 14, 2002, by and between Trustor as Seller and Beneficiary as
Buyer (the "Purchase Agreement") that certain land located in San Diego,
California, as more particularly described as "Parcel B" in the Purchase
Agreement and on Exhibit "A" attached hereto and incorporated herein by this
reference (the "Land");
WHEREAS, concurrently herewith Trustor has agreed to lease to
Beneficiary, and Beneficiary has agreed to lease from Trustor, the Land and any
improvements thereto, either
existing or subsequently constructed by or for Beneficiary, pursuant to the
terms and conditions of that certain Ground Lease, dated as of the date hereof
(the "Ground Lease"), between Trustor, as landlord, and Beneficiary, as tenant;
WHEREAS, concurrently herewith Beneficiary shall deliver to Trustor an
irrevocable standby letter of credit in the amount of the Parcel B Purchase
Price (as defined in Paragraph 2(c) of the Purchase Agreement), which amount
shall be approximately Seven Million Nine Hundred Seventy Six Thousand Seven
Hundred Seven Dollars and 20/100 ($7,976,707.20) (the "Letter of Credit");
WHEREAS, pursuant to the terms of the Purchase Agreement, Trustor has
agreed and is obligated to set-off the amount of the Letter of Credit given by
Beneficiary against the Parcel B Purchase Price payable by Beneficiary to
Trustor under the Purchase Agreement, and upon such set-off, Trustor is
obligated to convey fee title to the Mortgaged Property (defined below) to
Beneficiary in accordance with the terms of the Purchase Agreement;
WHEREAS, Trustor and Beneficiary desire to secure such obligation and
agreement of Trustor to convey the Mortgaged Property as hereinafter described;
and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to secure Trustor's due and punctual performance of
the Secured Obligations, Trustor does hereby, give, grant, bargain, sell,
warrant, convey, mortgage, transfer, grant a security interest in, set over,
deliver, confirm and convey unto Trustee, in trust, with power of sale and right
of entry as hereinbelow provided, upon the terms and conditions of this Deed of
Trust, the following "Mortgaged Property" described hereinafter.
1. Grant and Assignment. For good and valuable consideration, Trustor
hereby irrevocably and unconditionally grants, transfers and assigns to Trustee,
in trust, with power of sale and right of reentry and possession, all right,
title and interest of Trustor in the Land;
TOGETHER with all right, title and interest of Trustor, if any, in all
buildings and improvements now located or hereafter to be constructed thereon
(collectively "Improvements");
TOGETHER with all right, title and interest of Trustor, if any, in the
appurtenances, privileges, easements, franchises and tenements thereof,
including all minerals, oil, gas and other hydrocarbon substances thereon or
therein, air rights, water rights and development rights, and any land lying in
the streets, roads or avenues, open or proposed, in front of or adjoining the
Land and Improvements;
TOGETHER with all right, title and interest of Trustor, if any, in all
equipment, machinery, fixtures, chattels, furniture, furnishings and other
articles of tangible personal property and any additions to, substitutions for,
changes in or replacements of the whole or any part thereof now or at any time
hereafter affixed to, attached to, placed upon or used in any way in connection
with the use, enjoyment, occupancy or operation of the Land and Improvements or
any portion thereof, including all building materials and equipment now or
hereafter delivered to the Land and Improvements and intended to be installed in
or about the same, and all inventory,
6.
accounts, deposit accounts, accounts receivable, contract rights, development
and use rights, permits, licenses, applications, architectural and engineering
plans, specifications and drawings, chattel paper, instruments, documents,
notes, drafts and letters of credit arising from or related to the Land and
Improvements and any business conducted thereon by Trustor and any other
intangible personal property and rights relating to the Land and Improvements or
any part thereof or to the operation thereof or used in connection therewith,
including, without limitation, tradenames and trademarks (collectively "Personal
Property");
TOGETHER with all of Trustor's right, title and interest, if any, to
all proceeds (including claims or demands thereto) from the conversion,
voluntary or involuntary, of any of the Land, Improvements or Personal Property
into cash or liquidated claims, including, without limitation, proceeds of all
present and future fire, hazard or casualty insurance policies and all
condemnation awards or payments in lieu thereof made by any public body or
decree by any court of competent jurisdiction for taking or for degradation of
the value in any condemnation or eminent domain proceeding, and all causes of
action and the proceeds thereof of all types for any damage or injury to the
Land, Improvements or Personal Property or any part thereof, including, without
limitation, causes of action arising in tort or contract and causes of action
for fraud or concealment of a material fact, and all claims, causes of action
and recoveries by settlement or otherwise for any damage to, or loss, taking or
diminution in the value of, any of the Mortgaged Property, or for any breach (or
rejection in bankruptcy) of any of the Leases (defined below) from Trustor as
lessor, by any lessee thereunder (or such lessee's trustee in bankruptcy)
(collectively "Proceeds").
IN ADDITION, Trustor absolutely and irrevocably assigns to Beneficiary
all right, title and interest of Trustor in and to all leases and other rental
agreements and other contracts and agreements relating to use and possession
(collectively "Leases") of any of the Land or Improvements, including, without
limitation, the Ground Lease, and the rents, issues, profits and proceeds
therefrom together with all guarantees thereof and all deposits (to the full
extent permitted by law) and other security therefor (collectively "Rents"),
provided, however, that until an Event of Default hereunder, neither the
assignment of Leases and Rents hereunder, nor any provisions contained in this
Deed of Trust with respect to the Leases or Rents shall be deemed to amend,
modify or otherwise affect the relative rights between Beneficiary and Trustor
under the Ground Lease, and that until an Event of Default hereunder, in the
event that any term or provision of this Deed of Trust would otherwise be deemed
to modify or contradict the terms or provisions of the Ground Lease, the
provisions of the Ground Lease shall control and the terms of the Deed of Trust
shall not apply. Notwithstanding the foregoing, upon an Event of Default
hereunder, this Deed of Trust shall control all relative rights between
Beneficiary and Trustor under the Ground Lease. (The Land, Improvements,
Personal Property, Proceeds, and all other right, title and interest of Trustor
described above are hereinafter collectively referred to as "Mortgaged
Property.")
7.
2. Obligations Secured.
(a) Trustor makes this Deed of Trust, for the purpose of securing:
(i) Performance of all obligations of Trustor to Beneficiary
under the Purchase Agreement, including, without limitation, Trustor's
obligation to convey the Property to Beneficiary as required pursuant
to the Purchase Agreement;
(ii) Performance of all obligations of Trustor under this Deed
of Trust; and
(iii) All modifications, extensions and renewals (if any) of
one or more of the obligations secured hereby, including without
limitation, modifications, extensions or renewals of the Lease or the
Purchase Agreement, whether or not the modification, extension or
renewal is evidenced by a new or additional contract.
(b) The obligations of Trustor secured by this Deed of Trust are herein
collectively called the "Secured Obligations". All persons who may have
or acquire an interest in the Property shall be deemed to have notice
of, and shall be bound by, the terms of this Deed of Trust and any
other instruments or documents made or entered into in connection
herewith and each of the Secured Obligations.
3. Representations and Warranties. Trustor acknowledges, represents and
warrants as follows:
(a) Trustor is a corporation duly formed and validly existing under the
laws of the State of California, authorized to do business in the State
of California. The execution, delivery and performance of this Deed of
Trust have been duly authorized by all necessary action of Trustor.
(b) When executed and delivered by the undersigned on behalf of
Trustor, this Deed of Trust will be valid and binding obligations of
Trustor, legally enforceable in accordance with their express terms.
(c) Trustor's execution and performance of this Deed of Trust does not
conflict with or violate any law, statute, rule or regulation or any
order of any court or other governmental authority or, any contract or
other obligation of Trustor or any other person.
4. Condemnation Proceeds.
(a) So long as no Event of Default hereunder has occurred and so long
as the Ground Lease has not expired or terminated, all awards of
damages and all other compensation payable directly or indirectly by
reason of a condemnation for public or private use affecting any
interest in any of the Mortgaged Property and all proceeds of any
insurance policies payable by reason of loss of or damage to any part
of the Land and Improvements shall be governed by the terms of the
Purchase Agreement. Upon an Event of Default hereunder, Trustor
unconditionally waives all rights of a property owner under the
provisions of California Code of Civil Procedure Section 1265.225(a),
or any
8.
successor statute, providing for the allocation of condemnation
proceeds between a property owner and a lienholder.
5. Liens, Encumbrances and Charges. Trustor shall immediately discharge
any lien, claim or encumbrance which is not caused or permitted by Beneficiary
to be incurred or which is not approved by Beneficiary in writing and which has
or may attain priority over this Deed of Trust; provided that Trustor shall not
be required to discharge any lien, claim or encumbrance which is a Permitted
Encumbrance (as defined in Section 3 of the Purchase Agreement).
6. Distributions. Trustor shall pay the costs and expenses associated with
the operation of the Property, including, but not limited to, financing costs,
charges or fees in connection with the Lease until the earlier the date of
Trustor's fulfillment of all of its Secured Obligations hereunder.
7. Additional Obligations. Trustor shall not create, incur or suffer to
exist any indebtedness for borrowed money or any other material obligations to
which the holder or obligee thereof has recourse against the Mortgaged Property
to satisfy the same without Beneficiary's prior written consent, which consent
Beneficiary may withhold in its sole discretion, provided that nothing herein
shall preclude Trustor from incurring personal liability and recourse
obligations to the extent expressly permitted pursuant to the Lease.
8. Notice of Losses, Claims and Actions. Trustor shall give Beneficiary
prompt notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to any of the Mortgaged
Property, of any condemnation offer or action and of any Event of Default.
9. Further Assurances. Trustor shall do, execute, acknowledge and deliver,
at its sole cost and expense, all and every such further acts, deeds,
conveyances, mortgages, assignments, estoppel certificates, notices of
assignment, transfers and assurances as Beneficiary may reasonably require from
time to time in order to better assure, convey, assign, transfer and confirm
unto the Beneficiary, the rights granted Beneficiary under this Deed of Trust,
and other instruments executed in connection with this Deed of Trust, or any
other instrument under which a Trustor may be or may hereafter become bound to
convey, mortgage or assign to Beneficiary for carrying out the intention of
facilitating the performance of the terms of this Deed of Trust.
10. Beneficiary's Powers. Except for claims or actions arising, directly or
indirectly, from or in any way related to Beneficiary's obligations or
liabilities under the Lease, Beneficiary may commence, appear in, defend or
prosecute any assigned claim or action; and Beneficiary may adjust, compromise,
settle and collect all claims and awards assigned to Beneficiary. Without
affecting the liability of any other person liable for the payment of any
obligation herein mentioned, without affecting the lien or charge of this Deed
of Trust upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Secured Obligations, and without
affecting Beneficiary's obligations under the Ground Lease, Beneficiary may,
from time to time and without notice (i) release any person so liable, (ii)
extend the maturity or alter any of the terms of any such obligation, (iii)
grant other indulgences, (iv) release or reconvey, or cause to be released or
reconveyed, at any time and at Beneficiary's option, any parcel, portion or all
of the Mortgaged Property, (v) take or release any other or
9.
additional security for any Secured Obligation or (vi) compromise or make other
arrangements with debtors in relation thereto.
11. Trustee's Powers. At any time, or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and at
Beneficiary's sole expense, and without affecting the effect of this Deed of
Trust upon the remainder of the Mortgaged Property, Trustee may (i) reconvey any
part of the Mortgaged Property, (ii) consent in writing to the making of any map
or plat thereof, (iii) join in granting any easement thereon or (iv) join in any
extension agreement or any agreement subordinating the lien or charge hereof.
The grantee in any reconveyance may be described as the "person or persons
legally entitled thereto," and the recitals therein of any matters or facts
shall be conclusive proof of the truthfulness thereof.
12. Transfers. Trustor agrees that Trustor shall not, without Beneficiary's
written consent: except as permitted under the Lease, directly or indirectly
sell, transfer or convey or further pledge, encumber, hypothecate, mortgage,
assign or lease, whether voluntary, involuntary or by operation of law, or
suffer or permit the same, all or any part of the Property.
13. Event of Default. Each of the following events is a "Event of Default"
hereunder:
(a) Trustor's failure to convey the Mortgaged Property to Beneficiary
pursuant to the Purchase Agreement;
(b) Any other breach or default by Trustor of any covenant of Trustor
under this Deed of Trust and which Trustor does not cure within the
"Applicable Cure Period," as defined below, or, in the event such cure
cannot be completed within such time period, which Trustor does not
diligently and continuously prosecute to completion, but in no event
later than 45 days thereafter. As used herein, the "Applicable Cure
Period" is, unless otherwise specifically set forth herein, the 30-day
period commencing on the date Trustor receives written notice of the
occurrence of such breach or default;
(c) Trustor's making of any transfer prohibited by Section 12 of this
Deed of Trust;
(d) Trustor makes an assignment for the benefit of creditors, files a
petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions
or applies to any tribunal for any receiver of or any trustee for
Trustor or any substantial part of Trustor's property, commences any
proceeding relating to Trustor under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or there is commenced
against or with respect to Trustor or any substantial portion of
Trustor's property any such proceeding and an order for relief is
issued or such proceeding remains undismissed for a period of thirty
(30) days; or
(e) Trustor shall dissolve, liquidate or wind up its affairs or shall
bring any legal action or take any other action contemplating such
dissolution, liquidation or winding up.
14. Remedies. Upon the occurrence of an Event of Default, Beneficiary may
at any time, at its option and in its sole discretion, declare all Secured
Obligations of the defaulting party to be due and payable and the same shall
thereupon become immediately due and payable; provided, upon the occurrence of
any Event of Default set forth in Sections 13(d) and 13(e), all of the
10.
Trustor's Secured Obligations shall automatically be immediately due and
payable. Beneficiary may also do any or all of the following, although it shall
have no obligation to do any of the following:
(a) Either in person or by agent, with or without bringing any action
or proceeding, or by a receiver appointed by a court and without regard
to the adequacy of Beneficiary's security, enter upon and take
possession of the Mortgaged Property, or any part thereof, and do any
acts which Beneficiary deems necessary or desirable to preserve the
value, marketability or rentability of the Mortgaged Property, or to
increase the income therefrom or to protect the security hereof and,
with or without taking possession of any of the Mortgaged Property, xxx
for or otherwise collect all rents and profits, including those past
due and unpaid, and apply the same, less costs and expenses of
operation and collection, including attorney's fees and expenses, upon
the Secured Obligations, all in such order as Beneficiary may
determine. The collection of rents and profits and the application
thereof shall not cure or waive any Event of Default or notice thereof
or invalidate any act done in response thereto or pursuant to such
notice.
(b) Bring an action in any court of competent jurisdiction to foreclose
this instrument.
(c) Exercise any or all of the remedies available to a secured party
under the UCC.
(d) Elect to sell by power of sale the Property which is Land and
Improvements or which Beneficiary has elected to treat as Land and
Improvements and, upon such election, such notice of Event of Default
and election to sell shall be given as may then be required by law.
Thereafter, upon the expiration of such time and the giving of such
notice of sale as may then be required by law, at the time and place
specified in the notice of sale, Trustee shall sell such property, or
any portion thereof specified by Beneficiary, at public auction to the
highest bidder for cash in lawful money of the United States. Trustee
may, and upon request of Beneficiary shall, from time to time, postpone
the sale by public announcement thereof at the time and place noticed
therefor. If the Land consists of more than one legal parcel,
Beneficiary may designate the order in which the same shall be offered
for sale or sold. Trustor waives all rights to direct the order in
which any of the Mortgaged Property will be sold in the event of any
sale under this Deed of Trust, and also any of right to have any of the
Mortgaged Property marshalled upon any sale. In the case of a sale
under this Deed of Trust, the said property, real, personal and mixed,
may be sold in one parcel or more than one parcel. Should Beneficiary
desire that more than one such sale or other disposition be conducted,
Beneficiary may, at its option, cause the same to be conducted
simultaneously, or successively on the same day, or at such different
days or times and in such order as Beneficiary may deem to be in its
best interest. Any person, including a Trustor, Trustee or Beneficiary,
may purchase at the sale. Upon any sale, Trustee shall execute and
deliver to the purchaser or purchasers a deed or deeds conveying the
property so sold, but without any covenant or warranty whatsoever,
express or implied, whereupon such purchaser or purchasers shall be let
into immediate possession. Beneficiary, from time to time before the
trustee's sale pursuant to this section, may rescind any notice of
breach or default and of election to cause to be sold the Property by
executing and delivering to Trustee a written notice of such
rescission, which notice, shall also constitute a cancellation of any
prior declaration of
11.
default and demand for sale. The exercise by Beneficiary of such right
of rescission shall not constitute a waiver of any breach or default
then existing or subsequently occurring or impair the right of
Beneficiary to execute and deliver to Trustee, as above provided, other
declarations of default and demand for sale, and notices of breach or
default, the obligations hereof, nor otherwise affect any provision,
covenant or condition of the Purchase Agreement and/or of this Deed of
Trust or any of the rights, obligations or remedies of the parties
thereunder or hereunder.
(e) Exercise each of its other rights and remedies under this Deed of
Trust.
(f) Except as otherwise required by law, apply the proceeds of any
foreclosure or disposition hereunder to payment of the following: (i)
the expenses of such foreclosure or disposition, (ii) the cost of any
search or other evidence of title procured in connection therewith and
revenue stamps on any deed or conveyance, (iii) all sums expended under
the terms hereof, not then repaid, with accrued interest in the amount
provided herein, (iv) all other sums secured hereby and (v) the
remainder, if any, to the person or persons legally entitled thereto.
(g) Upon any sale or sales made under or by virtue of this section,
whether made under the power of sale or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale,
Beneficiary may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash for the Mortgaged Property, Beneficiary
may make settlement for the purchase price by crediting against the
defaulting party's Secured Obligations the sales price of the Mortgaged
Property, as adjusted for the expenses of sale and the costs of the
action and any other sums for which the defaulting Trustor is obligated
to reimburse Trustee or Beneficiary under this Deed of Trust.
15. Releases, Extensions, Modifications and Additional Security. Without
notice to or the consent, approval or agreement of Trustor, any subsequent owner
of any part of the Property, any maker, surety, guarantor, or endorser of this
Deed of Trust or any other Secured Obligation, or any holder of a lien or other
claim on all or any part of the Mortgaged Property, whether senior or
subordinate hereto, Beneficiary may, from time to time, do one or more of the
following: release any person's liability for the payment of any Secured
Obligation, take any action or make any agreement extending the maturity or
otherwise altering the terms or increasing the amount of any Secured Obligation,
or accept additional security or release all or a portion of the Property and
other security for any Secured Obligation. No such release of liability, taking
of additional security, release of security, change in terms or conditions of
any Secured Obligation, or other action shall release or reduce the personal
liability of a Trustor (if any), subsequent purchasers of all or any part of the
Mortgaged Property, or release or impair the priority of the lien of this Deed
of Trust upon any of the Mortgaged Property.
16. No Waiver. Any failure by Beneficiary to insist upon the strict
performance by a Trustor of any of the terms and provisions of this Deed of
Trust shall not be deemed to be a waiver of any of the terms and provisions of
any of this Deed of Trust; and Beneficiary, notwithstanding any such failure,
shall have the right thereafter to insist upon the strict performance by Trustor
of any and all of the terms and provisions of this Deed of Trust. The acceptance
by Beneficiary of any sum less than the sum then due shall be deemed an
acceptance on account only and shall not
12.
constitute a waiver of the obligation of a Trustor to pay the entire sum then
due. A Trustor's failure to pay said entire sum due shall be and shall continue
to be an Event of Default hereunder notwithstanding such acceptance of such
lesser amount on account, and Beneficiary shall be entitled to exercise all
rights conferred upon it following an Event of Default hereunder notwithstanding
such acceptance.
17. Cumulative. The rights of Beneficiary arising under this Deed of Trust
the Purchase Agreement and the Ground Lease shall be separate, distinct and
cumulative, and none of them shall be in exclusion of the others. All covenants
hereof shall be construed as affording to Beneficiary rights additional to and
not exclusive of the rights conferred under any applicable law.
18. Reconveyance. Upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed of Trust to
Trustee for cancellation, and upon payment of its fees (which shall be paid by
Beneficiary), Trustee shall reconvey, without warranty, the Property then held
hereunder. The recitals in any such reconveyance of any matters or facts shall
be conclusive proof of the truth thereof. The grantee in such reconveyance may
be described as "the person or persons legally entitled thereto."
19. Substitution. Provided that such successor Trustee consents to and
assumes in writing the obligations of Trustee as the "Escrow Holder" under the
Purchase Agreement, including but not limited to the Trustee's reconveyance
obligations with respect to the lien of this Deed of Trust set forth therein,
Beneficiary may substitute Trustee hereunder in any manner now or hereafter
provided by law or, in lieu thereof, Beneficiary may from time to time, by an
instrument in writing, substitute a successor or successors to any Trustee named
herein or acting hereunder, which instrument, executed and acknowledged by
Beneficiary and recorded in the office of the recorder of the county or counties
in which the Land and Improvements are situated, shall be conclusive proof of
proper substitution of such successor Trustee, who shall thereupon and without
conveyance from the predecessor Trustee, succeed to all its title, estate,
rights, powers and duties.
20. Law. This Deed of Trust shall be governed by and construed in
accordance with the laws of the state in which the Land is located.
21. Severable. If any provision of this Deed of Trust or its application to
any person or circumstance is held invalid, the other provisions hereof or the
application of the provision to other persons or circumstances shall not be
affected.
22. Successors and Assigns. Each of the covenants and obligations of
Trustor set forth in this Deed of Trust shall run with the land and shall bind
Trustor, its heirs, personal representatives, successors and assigns and all
subsequent encumbrances and tenants of the Property and shall inure to the
benefit of Beneficiary and its respective successors and assigns.
23. Captions. The captions or headings at the beginning of each section
hereof are for the convenience of the parties and are not a part of this Deed of
Trust.
13.
24. Amendments. This Deed of Trust contains (or incorporates) the entire
agreement of the parties hereto with respect to the matters discussed herein,
and this Deed of Trust may only be modified or amended by a written instrument
executed by each of the parties hereto.
25. No Third Party Beneficiaries. This Deed of Trust is made and entered
into for the sole protection and benefit of the parties hereto, and no other
person or entity shall be a direct or indirect beneficiary of, or shall have any
direct or indirect cause of action or claim in connection with this Deed of
Trust.
26. Notice. Any notice, request, demand, consent, approval or other
communication ("Notice") provided or permitted under this Deed of Trust, or any
other instrument contemplated hereby, shall be in writing, signed by the party
giving such Notice, and shall be given by personal delivery to the other party
or by United States certified or registered mail, postage prepaid, return
receipt requested, addressed to the party for whom it is intended at its address
as set forth below. Unless otherwise specified, Notice shall be deemed given
when received, but if delivery is not accepted, on the earlier of the date
delivery is refused or the third day after same is deposited in any official
United States Postal Depository. Any party from time to time, by Notice to the
other parties given as above set forth, may change its address for purposes of
receipt of any such communication.
To Landlord: Xxxxxx Homes
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Homes
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Sandler & Xxxxx, LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Tenant: Neurocrine Biosciences, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxx Valeur-Xxxxxx, PhD
Telephone: (000) 000-0000
14.
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: W. Xxxxx Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
27. Time. Time is of the essence of each provision of this Deed of Trust.
28. Survival of Warranties. All representations, warranties, covenants and
agreements of Trustor hereunder shall survive the delivery of this Deed of Trust
and shall continue in full force and effect until the full and final payment and
performance of Trustor's Secured Obligations.
29. Waivers. Trustor agrees that it shall not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any stay of execution, extension or marshalling in the event
of foreclosure of the liens and security interests hereby created.
30. Specific Performance. At any time, Beneficiary may commence and
maintain an action in any court of competent jurisdiction for specific
performance of any of the covenants and agreements contained herein or in the
Purchase Agreement, and may obtain the aid and direction of the court in the
performance of any of the covenants and agreements contained herein or in the
Purchase Agreement, and may obtain orders or decrees directing the execution of
the same and, in case of any sale hereunder, directing, confirming or approving
its or Trustee's acts and granting it such relief as may be warranted in the
circumstances.
31. Attorneys' Fees. In the even any action is brought by Trustor or
Beneficiary against the other to enforce or for the breach of any of the terms,
covenants or conditions contained in this Deed of Trust, the prevailing party
shall be entitled to recover reasonable attorneys' fees to be fixed by the
court, together with costs of suit therein incurred.
32. WAIVER OF JURY TRIAL. BENEFICIARY AND TRUSTOR EACH WAIVE TRIAL BY JURY
IN ANY ACTION OR OTHER PROCEEDING (INCLUDING COUNTERCLAIMS), WHETHER AT LAW OR
EQUITY, BROUGHT BY BENEFICIARY OR A TRUSTOR AGAINST THE OTHER ON MATTERS ARISING
OUT OF OR IN ANY WAY RELATED TO OR CONNECTED WITH THIS DEED OF TRUST, THE LEASE,
THE PURCHASE AGREEMENT, OR ANY TRANSACTION CONTEMPLATED BY, OR THE RELATIONSHIP
BETWEEN BENEFICIARY AND A TRUSTOR, OR ANY ACTION OR INACTION BY ANY PARTY UNDER,
ANY OF THE DEED OF TRUST, GROUND LEASE, OR PURCHASE AGREEMENT DOCUMENTS.
33. Request for Notice. Pursuant to California Government Code Section
27321.5(b), Trustor hereby requests that a copy of any notice of default and a
copy of any notice of sale given pursuant to this Deed of Trust be mailed to
Trustor at the address set forth above.
15.
34. Obligations of Tenant. Nothing in this Deed of Trust shall be deemed to
amend, modify, limit, waive or otherwise affect the liabilities, obligations,
duties, covenants and agreements of the Beneficiary as the Tenant under the
Ground Lease.
16.
[SIGNATURE PAGE TO DEED OF TRUST]
IN WITNESS WHEREOF, this Deed of Trust has been duly executed and
acknowledged by the undersigned as of the day and year first above written.
TRUSTOR PLEASE NOTE: UPON THE OCCURRENCE OF A DEFAULT, CALIFORNIA
PROCEDURE PERMITS THE TRUSTEE TO SELL THE MORTGAGED PROPERTY AT A SALE HELD
WITHOUT SUPERVISION BY ANY COURT AFTER EXPIRATION OF A PERIOD PRESCRIBED BY LAW.
UNLESS YOU PROVIDE AN ADDRESS FOR THE GIVING OF NOTICE, YOU MAY NOT BE ENTITLED
TO NOTICE OF THE COMMENCEMENT OF SALE PROCEEDINGS. BY EXECUTION OF THIS DEED OF
TRUST, YOU CONSENT TO SUCH PROCEDURE. BENEFICIARY URGES YOU TO GIVE PROMPT
NOTICE OF ANY CHANGE IN YOUR ADDRESS SO THAT YOU MAY RECEIVE PROMPTLY ANY NOTICE
GIVEN PURSUANT TO THIS DEED OF TRUST.
"TRUSTOR"
XXXXXX HOMES
a California corporation
By:
-------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
By:
-------------------------------------
Name:
-------------------------------------
Its:
-------------------------------------
EXHIBIT A
PROPERTY DESCRIPTION
REAL PROPERTY in the City of San Diego, County of San Diego, State of
California, described as follows:
Xxx 00 xx Xxxxxxxxxx Xxxxxx Xxxxxxxxxxx Xxxx Xx. 0X, in the City of San Diego,
County of San Diego, State of California, according to Map thereof No. 10945,
filed in the Office of the County Recorder of San Diego County.
EXHIBIT "I"
