EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
(2050 AND 0000 XXXXXXXXX XXXXX, XXX XXXX, XX)
This Purchase and Sale Agreement ("Agreement") is entered into as of this
15th day of April, 2004, by and between MICRO LINEAR CORPORATION, a Delaware
corporation ("Seller") and WILLOW XXXX INVESTMENTS, LLC, or its permitted
assignee or permitted nominee ("Buyer").
RECITALS
A. Seller is the owner of that certain real property, consisting of
approximately six and fifty-six hundredths (6.56) acres, more or less, located
at 2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx (APN 244-15-015), and
more particularly described on Exhibit A attached hereto and made a part hereof
(the "Land"), together with all improvements located thereon, including without
limitation, two single-story office/R&D buildings totaling approximately
ninety-three thousand, two hundred twenty-four (93,224) square feet, more or
less, as more particularly set forth below.
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Property defined below, subject to the terms and conditions set
forth in this Agreement. Such Property includes all rights, privileges,
rights-of-way, and easements appurtenant to the aforementioned improved real
property, including, without limitation, all of Seller's right, title and
interest in and to any minerals or hydrocarbon substances in and under the Land
referred to above, as well as all development rights, air rights, water rights,
riparian rights and water stock relating to such Land and any other
appurtenances used in connection with the beneficial use and enjoyment of such
Land, and all of Seller's right, title and interest in and to all roads and
alleys adjoining or servicing such Land.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE 1
DEFINITIONS
Unless the context otherwise specifies or requires, for the purposes of
this Agreement all words and phrases having their initial letters capitalized
herein shall have the meanings set forth below:
"CLOSING DATE" shall mean the earlier of the date of recordation of the
Deed or July 15, 2004.
"CONTRACT OBLIGATIONS" shall mean those contracts, agreements, service
contracts, utility contracts, construction contracts, maintenance agreements,
and all other written contracts and agreements which relate to the ownership,
operation, management, maintenance, use or occupancy of the Property which will
or may continue in effect on or after the Closing Date as listed on Exhibit B to
this Agreement ("Contract Obligations").
"EFFECTIVE DATE" shall mean the date the last signatory to this Agreement
executes this Agreement (as shown below such party's signature on the signature
page of this Agreement) .
"ENVIRONMENTAL LAWS" shall mean any and all presently existing federal,
state and local laws (whether statutes, rules, regulations or ordinances),
requirements under permits issued with respect thereto, and other requirements
of any federal, state or local governmental agency, court, board, bureau or
other authority having jurisdiction with respect to or relating to the
environment, to any Hazardous Substance or to any activity involving Hazardous
Substances, and shall include, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601,
et seq., the Federal Resource Conservation and Recovery Act (42 U.S.C. Section
6901, et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251,
et seq.), the Toxic Substance Control Act (15 U.S.C. Section 2601 et seq.), the
California Hazardous Waste Control Law (California Health and Safety Code
Section 25100, et seq.), the Xxxxxx-Cologne Water Quality Control Act
(California Water Code Section 13000, et seq.), and the Safe Drinking Water and
Toxic Enforcement Act (California Health and Safety Code Section 25249.5, et
seq.) and all amendments thereto in effect as of the Closing Date.
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"FEASIBILITY PERIOD" shall mean the period commencing on the Effective
Date and terminating at 5:00 p.m. Pacific Time on the date thirty (30) days
following the Effective Date.
"FINANCING CONTINGENCY PERIOD" shall mean the period commencing on the
Effective Date and terminating at 5:00 p.m. Pacific Time on June 15, 2004.
"HAZARDOUS SUBSTANCES" shall mean and include any chemical, compound,
material, mixture, waste or substance that is now or hereafter defined or listed
in, or otherwise classified pursuant to, any Environmental Laws as a "hazardous
substance," "hazardous material," "hazardous waste," "extremely hazardous
waste," "infectious waste," "toxic substance," "toxic pollutant" or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, or toxicity including any petroleum, natural gas, natural gas
liquids, liquified natural gas, or synthetic gas usable for fuel (or mixture of
natural gas and such synthetic gas). "Hazardous Substances" shall include,
without limitation, any hazardous or toxic substance, material or waste or any
chemical, compound or mixture which is (i) asbestos, (ii) designated as a
"hazardous substance" pursuant to Section 1317 of the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), (iii) defined as a "hazardous
waste" pursuant to Section 6903 of the Federal Resource Conservation and
Recovery Act, (42 U.S.C. Section 6901 et seq., (iv) defined as "hazardous
substances" pursuant to Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.), or
(v) listed in the United States Department of Transportation Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous substances (40
CFR part 302); or in any and all amendments thereto in effect as of the Closing
Date; or such chemicals, compounds, mixtures, substances, materials or wastes
otherwise regulated under any applicable local, state or federal Environmental
Laws. "Hazardous Substances" also shall include any hazardous, toxic or
dangerous wastes, substances or related materials or any other chemicals,
materials or substances whose release into the ambient air, soil or groundwater
or exposure to humans is prohibited, limited or regulated by any federal, state,
county, regional or local authority or which, even if not so regulated, may or
could pose a hazard to human health and safety or the ecology.
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"IMPROVEMENTS" shall mean all improvements now or hereafter located on the
Land including, without limitation, the two (2) single-story office/R&D
buildings, totaling approximately 93,224 square feet, more or less (the
"Buildings") constructed on the Land, and surface level paved and striped
parking areas, together with all appurtenances thereto, and all landscaping.
"INTANGIBLE PROPERTY" shall mean Seller's rights and interests in any and
all transferable or assignable permits, building plans and specifications,
certificates of occupancy, operating permits, sign permits, development rights
and approvals, certificates, licenses, warranties and guarantees relating solely
to the Property.
"LAND" shall mean the real property commonly known as 2050 and 0000
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx, and more particularly described in
Exhibit A to this Agreement, including all easements, riparian or other water
rights, rights of way and other interests appurtenant thereto, and all right,
title and interest of Seller in and to any land lying in the bed of any street,
road, highway or avenue, open or proposed, in front of, adjacent to or adjoining
such real property and in all strips and gores.
"LAWS AND RESTRICTIONS" shall mean all applicable federal, state, local
and other laws, statutes, regulations, codes, orders, ordinances and rules
including, without limitation, those relating to fire, safety, land use,
subdivision, health, labor, environmental protection, seismic design,
conservation, parking, handicapped access, zoning and building, and all
restrictive covenants (if any), other title encumbrances and other obligations
affecting the Property, all Environmental Laws, and all applicable provisions of
the Americans With Disabilities Act of 1990, and all amendments thereto.
"PERSONAL PROPERTY" shall mean all personal property now or hereafter
owned or held by Seller and used solely in connection with the Land, the
Improvements and/or the Intangible Property or the ownership, operation or
occupancy thereof including, without limitation, all furniture, fixtures,
machinery, appliances and equipment located on the Property. On or before the
expiration of the Feasibility Period, Seller shall notify Buyer in writing of
the items of Personal Property, if any, presently located within the Buildings
that Seller will remove, or cause to be removed, at Seller's cost, from the
Buildings prior to the Close of Escrow hereunder and any items
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of Personal Property presently located within such Buildings that are not so
identified for removal prior to the Close of Escrow by Seller (the "REMAINING
PERSONAL PROPERTY") shall be conveyed to Buyer at the closing in its "as is"
condition at no additional cost to Buyer. Promptly following the date the
Remaining Personal Property is identified, the parties shall attach the list of
Remaining Personal Property to this Agreement as Exhibit C.
"PROPERTY" shall mean collectively the Land, the Improvements, the
Remaining Personal Property, and the Intangible Property.
"TITLE COMPANY" shall mean First American Title Company whose address for
this transaction is as follows:
First American Title Company
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxx
Fax No. (000) 000-0000
"TITLE REPORT" shall mean the commitment for title insurance with respect
to the Land and Improvements to be issued to Buyer by the Title Company or its
underwriter.
ARTICLE 2
AGREEMENT TO PURCHASE AND SELL PROPERTY
Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase
from Seller, the Property, at the price and under the terms and conditions set
forth herein.
ARTICLE 3
DEPOSITS
3.1 Deposits. Within three (3) business days after the Effective Date,
Buyer shall deliver to the Title Company, a fully executed copy of this
Agreement and the sum of Two Hundred Fifty Thousand Dollars ($250,000) (the
"First Deposit") as a deposit on account of the Purchase Price (defined in
Section 4.1 below). Prior to the expiration of the Financing Contingency Period,
provided the conditions set forth in Sections 5.1.1, 5.1.2, 5.1.3 and 5.1.7
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below have been satisfied or waived in writing by Buyer, Buyer shall deliver to
Title Company an additional sum of One Million Two Hundred Fifty Thousand
Dollars ($1,250,000) (the "Second Deposit") as a further deposit on account of
the Purchase Price. The First Deposit and Second Deposit (collectively, the
"Total Deposit") shall be placed by Title Company in an interest-bearing
account, with interest accruing in the name of Buyer. Unless otherwise expressly
provided herein, the interest accrued on the First Deposit and Second Deposit,
as the case may be, shall be deemed part of the First Deposit and Second
Deposit, respectively, for purposes of this Agreement.
3.2 Application of Deposit. Except as otherwise provided in this
Agreement, the First Deposit shall be non-refundable to Buyer following the
satisfaction (or waiver in writing by Buyer) of the conditions set forth in
Sections 5.1.1, 5.1.2 and 5.1.3 below within the time periods prescribed therein
and the Second Deposit shall be non-refundable to Buyer following the
satisfaction (or waiver in writing by Buyer) of the condition set forth in
Section 5.1.7 below within the time period prescribed therein; provided,
however, if Seller materially breaches or defaults under any of its obligations
hereunder and this Agreement terminates as a result of such material breach or
default, then Title Company shall promptly return the Total Deposit (including
any interest accrued thereon) to Buyer. The Total Deposit (including any
interest accrued thereon) shall be released to Seller at the Closing and shall
be credited against the Purchase Price at Closing. Anything in this Agreement to
the contrary notwithstanding, Buyer agrees that if the conditions set forth in
Sections 5.1.1, 5.1.2 and 5.1.3 below are satisfied (or waived in writing by
Buyer) on or before the expiration of the Feasibility Period, but the condition
set forth in Section 5.1.7 below is not satisfied or waived in writing on or
before the expiration of the Financing Contingency Period, then Buyer shall be
deemed in breach or default of its obligation to purchase the Property pursuant
to this Agreement, Seller shall be entitled to receive the First Deposit as
liquidated damages and Buyer shall be entitled to receive the interest accrued
on the First Deposit while in escrow.
3.3 Liquidated Damages. THE PARTIES HERETO AGREE THAT SELLER'S ECONOMIC
DETRIMENT RESULTING FROM THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET
FOR AN EXTENDED PERIOD OF TIME AND ANY CARRYING AND OTHER COSTS INCURRED AFTER
THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET ARE IMPRACTICABLE OR
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EXTREMELY DIFFICULT TO ASCERTAIN. THE PARTIES HERETO AGREE THAT THE AMOUNT OF
THE TOTAL DEPOSIT, OR SUCH PORTION THEREOF AS IS DEPOSITED INTO ESCROW BY BUYER
PURSUANT TO THE TERMS ABOVE, EXCLUDING ANY INTEREST ACCRUED THEREON, IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IN THE EVENT
OF A MATERIAL BREACH OR DEFAULT OF THIS AGREEMENT BY BUYER. BUYER AGREES THAT IN
THE EVENT OF SUCH MATERIAL BREACH OR DEFAULT BY BUYER, SELLER, AS ITS SOLE
REMEDY (EXCEPT AS PROVIDED BELOW), SHALL BE ENTITLED TO RECEIVE AND RETAIN THE
TOTAL DEPOSIT, OR SUCH PORTION THEREOF AS IS DEPOSITED INTO ESCROW PURSUANT TO
THE TERMS ABOVE (EXCLUDING ANY INTEREST ACCRUED THEREON WHILE IN ESCROW, WHICH
INTEREST SHALL BE PAID TO BUYER) AS LIQUIDATED DAMAGES AND NOT AS A PENALTY.
SUCH RECEIPT OF THE TOTAL DEPOSIT, OR SUCH PORTION THEREOF AS IS DEPOSITED INTO
ESCROW PURSUANT TO THE TERMS ABOVE (EXCLUDING ANY INTEREST ACCRUED THEREON WHILE
IN ESCROW) BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER
PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL
NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF
SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
PROVISION. SELLER HEREBY WAIVES THE REMEDY OF SPECIFIC PERFORMANCE WITH RESPECT
TO ANY DEFAULT BY BUYER OF ITS OBLIGATION TO PURCHASE THE PROPERTY, AND AGREES
THAT THE LIQUIDATED DAMAGES SET FORTH HEREIN SHALL BE SELLER'S SOLE REMEDY
(EXCEPT AS OTHERWISE PROVIDED BELOW) IN THE EVENT BUYER MATERIALLY BREACHES OR
DEFAULTS IN ITS OBLIGATION TO PURCHASE THE PROPERTY HEREUNDER. ANYTHING HEREIN
TO THE CONTRARY NOTWITHSTANDING, IF, FOLLOWING THE EXPIRATION OF THE FEASIBILITY
PERIOD, THE CONDITION IN SECTION 5.1.7 IS NOT SATISFIED (OR WAIVED IN WRITING BY
BUYER) ON OR BEFORE 5:00 P.M. PACIFIC TIME ON THE EXPIRATION OF THE FINANCING
CONTINGENCY PERIOD, THEN THIS AGREEMENT SHALL TERMINATE AUTOMATICALLY AND THE
FIRST DEPOSIT MADE BY BUYER HEREUNDER SHALL BE PAID TO SELLER AS LIQUIDATED
DAMAGES AND THE
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INTEREST ACCRUED ON THE FIRST DEPOSIT WHILE IN ESCROW SHALL BE PAID TO BUYER.
THIS LIQUIDATED DAMAGES PROVISION SHALL NOT BE APPLICABLE TO ANY BREACH BY BUYER
OF ANY INDEMNIFICATION, DEFENSE OR HOLD HARMLESS OBLIGATION OF BUYER UNDER THIS
AGREEMENT, OR ANY OTHER OBLIGATION OF BUYER THAT EXPRESSLY SURVIVES THE
TERMINATION OF THIS AGREEMENT. THIS LIQUIDATED DAMAGES PROVISION ALSO SHALL NOT
SERVE AS A LIMITATION ON THE AMOUNT OF ATTORNEYS' FEES THAT SELLER MAY PURSUE OR
COLLECT FROM BUYER IN THE EVENT SELLER INCURS ATTORNEYS' FEES IN ATTEMPTING TO
COLLECT OR RETAIN THE LIQUIDATED DAMAGES REFERRED TO HEREIN. BY INITIALING THIS
SECTION 3.3 BELOW, SELLER AND BUYER AGREE TO THE TERMS OF THIS SECTION 3.3.
SELLER'S INITIALS: /s/ TR BUYER'S INITIALS: /s/ SN
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ARTICLE 4
PURCHASE PRICE
4.1 Purchase Price. The purchase price for the Property ("Purchase
Price") shall be Seven Million Two Hundred Seventy Thousand Five Hundred and
00/100 Dollars ($7,270,500.00).
4.2 Payment. The Purchase Price shall be payable in cash by Buyer to
Seller at the Closing Date. The Total Deposit (including any interest accrued
thereon) released to Seller at Closing shall be credited against the Purchase
Price at Closing.
4.3 Credit Against Purchase Price. Seller agrees to credit against the
Purchase Price at Closing the additional sum of Two Hundred Thousand Dollars
($200,000), which credit is for costs anticipated to be incurred by Buyer,
following the Closing hereunder, with respect to future demolition by Buyer of
certain interior improvements existing in the building located at 0000 Xxxxxxxxx
Xxxxx in San Xxxx.
ARTICLE 5
REVIEW AND INSPECTION; CONDITIONS OF ESCROW
5.1 Buyer Conditions to Closing. The close of escrow on the Property and
Buyer's obligation under this Agreement to purchase the Property shall be
subject to the satisfaction, on or
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prior to the time stated herein, of all of the following conditions, with Buyer
to retain the right to waive in writing, in whole or in part, any of the
following conditions at or prior to the time stated herein for satisfaction of
such conditions or for approval or disapproval by Buyer:
5.1.1 Title Review. Within five (5) business days following the
mutual execution of this Agreement, Seller shall procure and deliver, or cause
the Title Company to procure and deliver, to Buyer a current preliminary title
report issued by the Title Company ("Title Report") showing the state of the
title of the Property, and the underlying title exceptions referenced in the
Title Report. Buyer shall have until the date twenty (20) days following the
Effective Date ("Title Review Period") to notify Seller, in writing, of Buyer's
objection to any exceptions contained in the Title Report (hereinafter referred
to as "Title Defects"). If Buyer does not approve or disapprove such Title
Report in writing within such Title Review Period, then Buyer shall be deemed to
have approved the Title Report and the condition set forth in this Section 5.1.1
shall be deemed satisfied. Upon receipt of notification of any Title Defects by
Buyer within the Title Review Period, Seller shall have five (5) days within
which to elect, by written notice to Buyer, to attempt to remove or delete from
the title to be conveyed to Buyer (in a manner reasonably acceptable to Buyer)
any Title Defects objected to by Buyer. If Seller does not notify Buyer of its
election to attempt to cure such Title Defects within such five (5) day period,
Seller shall be deemed to have elected not to attempt to cure such Title
Defects. If Seller does not elect to attempt to cure such Title Defects, then
Buyer then may elect prior to the expiration of the Feasibility Period to either
waive its objections and proceed with the purchase of the Property pursuant to
the terms of this Agreement or terminate this Agreement, in which event Buyer
shall be entitled to the prompt return of the First Deposit (including any
interest accrued thereon) and this Agreement shall terminate. If Buyer fails to
make such election prior to the expiration of the Feasibility Period, then Buyer
shall be deemed to have elected to terminate this Agreement. Anything herein to
the contrary notwithstanding, Seller agrees to remove, or cause to be removed,
from the condition of title of the Property on or before the close of escrow
hereunder the lien(s) of any deed(s) of trust executed by Seller that encumber
the Property. For purposes of this Agreement, the term "Approved Exceptions"
shall mean those title exceptions applicable to the Property which are approved
or deemed approved or accepted by Buyer in accordance with the terms of this
Section 5.1.1. The lien(s) of any deed(s) of trust executed by Seller that
encumber the Property shall not be Approved Exceptions.
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5.1.2 Feasibility Study. During the Feasibility Period, Buyer shall
have the right to conduct, at its sole cost and expense, such investigations,
studies, surveys, analyses and tests on and of the Property as it shall, in its
sole discretion, determine are necessary or desirable, including, without
limitation, soil tests, environmental audits and studies, and make such
evaluations as Buyer may, in its sole and absolute discretion, determine are
necessary or desirable under the circumstances, all subject to Article 7 below.
In order to perform the foregoing investigations, Buyer, its agents,
contractors, employees and potential lenders, shall have reasonable access to
the Property (subject to Buyer's reasonable security requirements and
conditions), all for the purposes of inspecting the same and conducting tests,
inspections, and analyses thereon and making evaluations thereof, all at Buyer's
expense. Buyer's rights to enter onto the Property to conduct the aforementioned
studies, investigations or inspections shall be subject to the provisions of
Article 7 below. If Buyer does not give Seller written notice of approval of the
results of its feasibility study on or before the expiration of the Feasibility
Period, then the conditions set forth in this Section 5.1.2 shall be deemed
unsatisfied and Buyer shall be deemed to have disapproved the Property.
On or before the expiration of the Feasibility Period, Seller shall notify
Buyer in writing of the items of Personal Property, if any, presently located
within the Buildings that Seller will remove, or cause to be removed, at
Seller's cost, from the Buildings prior to the Close of Escrow hereunder and any
items of Personal Property presently located within such Buildings that are not
so identified for removal prior to the Close of Escrow by Seller (the "Remaining
Personal Property") shall be conveyed to Buyer at the closing in its "as is"
condition at no additional cost to Buyer. Promptly following the date the
Remaining Personal Property is identified, the parties shall attach the list of
Remaining Personal Property to this Agreement as Exhibit C.
5.1.3 Contract Obligations. During the Feasibility Period, Buyer
shall have reviewed and approved the Contract Obligations. If Buyer does not
give Seller written notice of approval of the Contract Obligations on or before
the expiration of the Feasibility Period, then the conditions set forth in this
Section 5.1.3 shall be deemed unsatisfied and Buyer shall be deemed to have
disapproved the same.
5.1.4 Title Policy. At the close of escrow on the Property, Title
Company or its underwriter shall be willing and prepared to issue to Buyer, upon
payment of its regularly scheduled premium, a CLTA standard form owner's policy
of title insurance (or, if Buyer so elects and Buyer
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has obtained a survey, if necessary, an ALTA owner's extended coverage policy of
title insurance) in the amount of the Purchase Price insuring Buyer's fee title
to the Property, subject to (i) the Approved Exceptions referred to above, (ii)
all exceptions caused or created by the acts of Buyer or any of its agents,
employees, contractors, consultants or other representatives, (iii) matters that
would be shown on a current survey of the Property or which would be discovered
by a reasonable inspection of the Property, (iv) the Lease referred to in
Article 16 below, if applicable, and (v) the standard printed exclusions to
title in CLTA standard form or ALTA extended coverage, as the case may be,
owner's policy of title insurance (collectively, the "Permitted Exceptions").
5.1.5 No Material Adverse Change. As of the Closing Date, there
shall have been no material adverse change in the physical condition of the
Property, or any portion thereof.
5.1.6 Performance by Seller. Seller shall have performed and
complied in all material respects with all of the covenants and agreements
required by this Agreement to be performed and complied with by it within the
applicable time period set forth herein for performance of such covenants and
agreements. Time is of the essence with respect to the foregoing. In addition,
the representations and warranties of Seller set forth in Section 10.1 shall be
true and correct as of the date hereof and as of the Close of Escrow.
5.1.7 Financing Contingency. Buyer shall have until the expiration
of the Financing Contingency Period, to obtain a commitment from a lender
reasonably acceptable to Buyer for a loan in an amount acceptable to Buyer at
the then-market interest rate (the "Loan"), to be used by Buyer to pay a portion
of the Purchase Price. Buyer shall apply for the Loan promptly following the
Effective Date, and shall use reasonable diligence to satisfy the conditions and
requirements of potential lenders to obtain the Loan, including, without
limitation, providing Buyer's financial information. If, prior to the expiration
of the Financing Contingency Period, Buyer does not notify Seller in writing
that Buyer has obtained a commitment for the Loan on terms and conditions
reasonably acceptable to Buyer, then the condition set forth in this Section
5.1.7 shall be deemed unsatisfied and this Agreement shall automatically
terminate. If, prior to the expiration of the Financing Contingency Period,
Buyer notifies Seller in writing that Buyer has obtained a commitment for the
Loan on terms and conditions reasonably acceptable to Buyer, then the condition
described in this Section 5.1.7 shall no longer be a condition to Buyer's
obligations hereunder. Alternatively, if, prior to the expiration of the
Financing Contingency Period, Buyer notifies Seller in writing that Buyer has
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not obtained a commitment for the Loan on terms and conditions reasonably
acceptable to Buyer, but Buyer nevertheless waives the condition described in
this Section 5.1.7, then Buyer shall be deemed to have elected to proceed with
the purchase of the Property without obtaining a Loan and such condition shall
no longer be a condition to Buyer's obligations hereunder.
5.2 Failure of Buyer's Conditions to Closing. At any time or times on or
before the date for the satisfaction or waiver of each condition, at Buyer's
election, Buyer may waive any of the foregoing conditions by written notice to
Seller. Other than Buyer's close of escrow pursuant to this Agreement which
shall waive all such unfulfilled conditions, no waiver shall be effective unless
made in writing specific as to the conditions or matters so waived.
In the event any of the conditions set forth in Sections 5.1.1, 5.1.2 or
5.1.3 above are not satisfied (or waived in writing by Buyer) on or before 5:00
p.m. Pacific time on the expiration of the Feasibility Period, then this
Agreement shall terminate automatically, the First Deposit made by Buyer
hereunder (together with all interest accrued thereon while in escrow) shall be
promptly returned to Buyer and all covenants and agreements of the parties
hereunder (except for those covenants and agreements that expressly survive
termination of this Agreement) shall cease. If any of the conditions described
in Section 5.1.4 or 5.1.5 are not satisfied (or waived in writing by Buyer) on
or prior to the time prescribed therein, then Buyer shall have the right to
terminate this Agreement upon written notice to Seller and, in the event of such
termination, all covenants and agreements of the parties hereunder (except for
those covenants and agreements that expressly survive termination of this
Agreement) shall cease and Buyer shall be entitled to the prompt return of the
Total Deposit made by Buyer and all interest accrued thereon while in escrow. If
any of the conditions described in Section 5.1.6 are not satisfied or waived in
writing by Buyer on or prior to the time prescribed herein, then, in addition to
its rights and remedies described in Section 11.1 below, if applicable, Buyer
shall have the right to terminate this Agreement upon written notice to Seller
and, in the event of such termination, Buyer shall be entitled to the prompt
return of its Total Deposit and all interest accrued thereon while in escrow.
If, following the expiration of the Feasibility Period, the condition in Section
5.1.7 is not satisfied (or waived in writing by Buyer) on or before 5:00 p.m.
Pacific time on the expiration of the Financing Contingency Period, then this
Agreement shall terminate automatically, the First Deposit made by Buyer
hereunder shall be paid to Seller as liquidated damages (and Buyer shall be
entitled to receive the interest accrued on the First Deposit while in escrow)
and all covenants and
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agreements of the parties hereunder (except for those covenants and agreements
that expressly survive termination of this Agreement) shall cease.
5.3 Seller's Conditions to Closing. The close of escrow on the Property
and Seller's obligation under this Agreement to sell the Property shall be
subject to the satisfaction, at or prior to the time stated herein, of the
following conditions, with Seller to retain the right to waive in writing, in
whole or in part, any of the following conditions at or prior to the time stated
herein for satisfaction of such conditions:
5.3.1 Performance by Buyer. Buyer shall have performed and complied
with in all material respects all of the covenants and agreements required by
this Agreement to be performed and complied with by it within the applicable
time period set forth herein for performance of such covenants and agreements.
In addition, the representations and warranties of Buyer set forth in Section
10.2 shall be true and correct as of the date hereof and as of the close of
escrow.
5.3.2 Board Approval. On or before the date seven (7) days following
the date Buyer executes and delivers to Seller this Agreement signed by Buyer,
the Board of Directors of Seller shall have approved this Agreement and Seller
shall have executed and delivered to Buyer this Agreement signed by Seller.
Seller makes no representation or warranty that its Board of Directors will
approve this Agreement or authorize its execution and delivery to Buyer. If
Seller does not execute and deliver to Buyer this Agreement signed by Seller
within the seven (7) day period referred to above, then the conditions set forth
in this Section 5.3.2 shall be deemed unsatisfied.
5.4 Failure of Seller's Conditions to Closing. If any of the conditions
in Section 5.3.1 above are not satisfied (or waived in writing by Seller) at or
prior to the time prescribed therein, then Seller may terminate this Agreement
by written notice to Buyer and, in such event, all covenants and agreements of
Seller and Buyer under this Agreement (except covenants and agreements that
expressly survive termination of this Agreement) shall cease, and Seller shall
be entitled to receive and retain the Total Deposit, or such portion thereof as
has been deposited by Buyer under this Agreement as liquidated damages (and
Buyer shall be entitled to receive the interest accrued on the Total Deposit, or
such portion thereof as has been deposited by Buyer under this Agreement, while
in escrow). If the conditions set forth in Section 5.3.2 above are not satisfied
(or waived in writing by Seller) at or prior to the time prescribed therein,
then this
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Agreement shall be null and void and of no force or effect, and Buyer shall be
entitled to the prompt return of the First Deposit (together with all interest
accrued thereon while in escrow) to the extent made by Buyer under this
Agreement.
5.5 Due Diligence Materials. In the event escrow fails to close
hereunder for any reason other than as a result of a breach by Seller hereunder,
Buyer shall promptly assign, to the extent assignable, and deliver to Seller,
without representation or warranty as to accuracy or completeness, any and all
surveys, environmental reports, geotechnical reports, inspection reports,
engineering, maps or other documents related to the Property, or any portion
thereof, prepared by or for Buyer; provided, however, Buyer shall not be
obligated to assign or deliver to Seller any financial projections, architecture
or documents protected by the attorney-client privilege. The obligations of
Buyer under this Section 5.5 shall survive the termination of this Agreement.
ARTICLE 6
DELIVERY OF DUE DILIGENCE DOCUMENTS
Not later than five (5) business days following the Effective Date of this
Agreement, Seller shall deliver to Buyer (to the extent not previously delivered
to Buyer) or make available to Buyer, as a courtesy to Buyer, each of the
documents, maps, reports and writings identified on Exhibit D attached hereto
(the "Documents"). Buyer acknowledges that Seller makes no representation or
warranty, express or implied, as to the accuracy or completeness of such
Documents or any other documents or reports provided by Seller to Buyer under
the terms of this Agreement. Seller further agrees to deliver or make available
to Buyer, without representation or warranty, express or implied, as to accuracy
or completeness, all maps, surveys, plans, reports, and studies prepared by any
third party and any correspondence from any governmental agency related to the
Property received by Seller during the period of the escrow established pursuant
to the terms of this Agreement; provided, however, Seller shall not be required
to deliver or make available to Buyer any internal financial projections made by
Seller, marketing studies, appraisals, third party offers to purchase the
Property or letters of intent with respect to the sale of the Property, or
documents or writings that are confidential or protected by the attorney-client
privilege.
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ARTICLE 7
RIGHT OF ENTRY
7.1 Right of Entry. From the Effective Date and throughout the escrow
period, subject to the terms set forth below, Buyer and its designated agents,
employees, contractors and consultants are hereby granted a right of entry on
the Property to perform such soil, groundwater, engineering and geological
tests, Phase I environmental assessment, engineering and architectural studies,
and other physical inspections, evaluations, audits, studies and tests, and to
make such other reports as Buyer, in its sold and absolute discretion, shall
deem appropriate or desirable under the circumstances and for any other purpose
related to Buyer's investigation or proposed use or development of the Property;
provided, however, that Buyer shall repair any damage to the Property caused by
Buyer's or any of its agents', employees', contractors' or consultants' entry
and activities thereon. Until restoration is complete, Buyer shall take all
steps necessary to ensure that any conditions on the Property created by Buyer's
tests or inspections do not create any dangerous, noisy or unhealthy conditions
on the Property. The aforementioned restoration obligations shall survive the
termination of this Agreement. The preceding to the contrary notwithstanding,
Buyer shall have no right to undertake any invasive testing of or borings on the
Property without first obtaining the written consent of Seller (which consent
may be given or withheld in Seller's sole discretion). Buyer agrees that Seller
shall have a right to have a representative of Seller present at any or all
times that Buyer or its agents, employees, consultants or consultants enter onto
the Property. Unless otherwise agreed to by Seller, all of Buyer's (and its
designated agents', employees', contractors' and consultants') entries onto the
Property shall be during normal business hours. Buyer agrees to provide Seller
with at least one (1) business days notice (which may be provided by telephone)
prior to entering onto the Property. Buyer shall comply, and cause its agents,
employees, contractors and consultants, to comply with Seller's security
measures and requirements during Buyer's and its agents', employees',
contractors' and consultants entry onto the Property.
7.2 Insurance. Prior to Buyer or any of its contractors or consultants
entering onto the Property pursuant to the terms of Section 7.1, Buyer agrees to
cause its contractors and consultants to procure and maintain, (i) worker's
compensation insurance required by the laws of the State of California; and (ii)
commercial general liability insurance in the amount of at least One Million
Dollars ($1,000,000), combined single limit, naming Seller as an additional
insured.
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Buyer shall cause its contractors and consultants to furnish certificates and
evidence of such insurance coverage to Seller in advance of entering onto the
Property. Such certificates shall contain a clause providing for thirty (30)
days advance notice of cancellation or material change in coverage. The
aforementioned insurance shall be with companies reasonably satisfactory to
Seller. The commercial general liability insurance policy procured by Buyer's
contractors and/or consultants who desire to enter onto the Property prior to
the close of escrow hereunder shall insure Seller (to the extent of the
insurance limits) against loss caused by personal injury and/or property damage
as the result of Buyer's (and/or any of its agents', employees', contractors' or
consultants') entry onto the Property and the conduct of any and all tests and
inspections under this Agreement.
7.3 Indemnity. Buyer shall indemnify, defend (with counsel reasonably
acceptable to Seller), protect and hold Seller harmless from and against any and
all damages, losses, liabilities, actions, causes of action, injuries, death,
property damage, liens, claims, judgments, demands, obligations, costs and
expenses (including, without limitation, reasonable attorneys' fees and court
costs) of every kind and nature whatsoever (collectively, "Claims") arising
from, based upon or in connection with Buyer's or any of Buyer's agents',
employees', consultants', contractors' or other representatives' entry upon or
tests, investigations or activities on the Property, including, without
limitation, any claims for damages or destruction of the Property or any part or
component thereof or for personal injury to or death of any person caused in
whole or in part by any such activities. The provisions of the immediately
preceding sentence shall not be applicable to any Claims to the extent arising
from or related to or based upon the negligent acts or willful misconduct of
Seller or any of Seller's agents, employees, members, shareholders, officers, or
directors. The obligations of Buyer under this Section 7.3 shall survive the
close of escrow or earlier termination of this Agreement.
7.4 Confidentiality. Each of Buyer's tests, inspections and
investigations, and the results thereof, shall be held confidential by Buyer and
shall not be disclosed, without the prior written consent of Seller (which shall
not be unreasonably withheld or delayed), to any third parties before the close
of escrow hereunder, except for such disclosures to Buyer's prospective lenders,
officers, directors, employees, consultants, attorneys, accountants and exchange
facilitators as may be necessary or desired to (i) permit Buyer to perform its
obligations hereunder, (ii) assist Buyer in evaluating whether or not to acquire
the Property, (iii)
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comply with applicable laws or any legal process, and (iv) comply with rules of
any exchange upon which Buyer may participate. Buyer's obligations under this
Section 7.4 shall survive the termination of this Agreement (other than by the
close of escrow hereunder).
ARTICLE 8
BUYER'S INVESTIGATION OF THE PROPERTY, "AS IS" ACQUISITION
8.1 Buyer's Independent Investigation. Buyer acknowledges and agrees
that it has been given or will be given before the close of escrow hereunder, a
full opportunity to inspect and investigate each and every aspect of the
Property, either independently or through agents and consultants of Buyer's
choosing, including, without limitation:
(a) All matters relating to title, together with all governmental
and other legal requirements such as taxes, assessments, zoning, permit
requirements and building codes.
(b) The physical and environmental condition of the Property and
all improvements, if any, located thereon, including, without limitation, the
structural, electrical, and mechanical condition of such improvements.
(c) The economic feasibility of the development of the Property
and/or the status of the neighborhood.
(d) Any easements and/or access rights affecting the Property.
(e) All other matters of material significance affecting the
Property.
8.2 "As Is" Purchase. Buyer specifically acknowledges and agrees that
Seller is selling and Buyer is purchasing the Property on an "As Is With All
Faults" basis and that Buyer is not relying on any representations or warranties
of any kind whatsoever, express (other than as otherwise expressly provided in
this Agreement) or implied, from Seller, its agents, employees, representatives
or brokers as to any matters concerning the Property, including without
limitation: (i) the quality, nature, adequacy, and physical condition of the
Property (including, without limitation, topography, climate, air, water rights,
water, gas, electricity, utility services, waste water treatment capacity,
grading, drainage, sewers, access to public roads and related conditions, roof,
roof membrane, heating, ventilation and air conditioning units, and the
structural, electrical, and mechanical condition of the improvements located on
the Property), (ii) the quality, nature, adequacy, and physical condition of
soils, geology and any groundwater, (iii) the existence, quality, nature,
adequacy and physical condition of utilities, infrastructure and site
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improvements, if any, and public improvements serving the Property, (iv) the
development potential of the Property, and the Property's use, habitability,
merchantability, or fitness, suitability, value or adequacy of the Property for
any particular purpose, (v) the zoning or other legal status of the Property or
any other public or private restrictions on use of the Property, (vi) the
compliance of the Property or its operation with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity,
including the Laws and Restrictions applicable to the Property, (vii) the
presence or absence of Hazardous Substances on, in, under or about the Property
or the adjoining or neighboring property, (viii) the status of entitlements,
permits and approvals with respect to the Property, and (ix) the condition of
title to the Property. Buyer acknowledges that it shall use its independent
judgment and make its own determination as to the scope and breadth of the due
diligence investigation which it shall make relative to the Property. Except as
expressly set forth in this Agreement, Buyer shall rely upon its own
investigation of the physical, environmental, economic and legal condition of
the Property (including, without limitation, whether the Property is located in
an area which is designated as a special flood hazard area, dam failure
inundation area, earthquake fault zone, seismic hazard zone, high fire severity
area or wildland fire area, by any federal, state or local agency). Buyer
undertakes and assumes the risks associated with all matters pertaining to the
Property's location in any area designated as a special flood hazard area, dam
failure inundation area, earthquake fault zone, seismic hazard zone, high fire
severity area or wildland fire area, by any federal, state or local agency. The
provisions of this Section 8.2 shall survive the close of escrow hereunder.
8.3 Release. Buyer waives on behalf of itself and its agents, employees,
affiliates, members, affiliates, partners, officers, directors, shareholders,
successors and assigns, any and all right to recover from Seller and from
Seller's shareholders, directors, officers, partners, parent company,
affiliates, employees and agents (collectively, the "Seller Related Parties"),
and forever releases and discharges Seller and the Seller Related Parties from,
any and all damages, claims, losses, liabilities, penalties, fines, liens,
judgments, costs or expenses whatsoever (including, without limitation,
attorneys' fees and costs), whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be connected
with the Property, including without limitation title to the Property, the
physical and environmental condition of the Property and the improvements
located thereon or any law or
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regulation applicable thereto (including, without limitation, the Environmental
Laws). The waiver and release provisions set forth immediately above shall not
be applicable to any breach by Seller of any of its representations or
warranties set forth in Section 10.1 below or any fraud committed by Seller. The
provisions of this Section 8.3 shall survive the close of escrow under this
Agreement.
In connection with the paragraph above, Buyer expressly waives the
benefits of Section 1542 of the California Civil Code, which provides as
follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
BUYER'S INITIALS: /s/ SN
------
ARTICLE 9
ESCROW AND ESCROW CLOSING; PRORATIONS; COSTS
9.1 Close of Escrow. Escrow shall close under this Agreement, subject to
the satisfaction (or waiver in writing by the party for whom such conditions
exist) of the conditions set forth in Sections 5.1 and 5.3 above, on or before
July 15, 2004 ("Closing Date"). Time is of the essence. The close of escrow on
the Property (or closing of escrow or Closing on the Property) shall mean the
recordation of the Grant Deed (as defined in Section 9.2) as described in
Section 9.4.
9.2 Deed and Payment. Seller shall deposit with Title Company prior to
the Closing Date, a grant deed ("Grant Deed") in the form of Exhibit E attached
hereto, incorporating the legal description of the Land, and properly executed
and acknowledged by Seller. In addition, Seller shall deposit with Title Company
prior to the Closing Date, a xxxx of sale ("Xxxx of Sale") in the form of
Exhibit F attached hereto, incorporating the inventory of the Remaining Personal
Property prepared by Buyer and Seller prior to the expiration of the Feasibility
Period. Buyer shall instruct Title Company to deliver to Seller the Purchase
Price (less any charges allocable to Seller as provided in Section 9.5 below)
when (1) Title Company holds for Buyer, and is able to
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record, the Grant Deed describing the Property; (2) Title Company holds for
delivery to Buyer the Xxxx of Sale describing the Personal Property; and (3)
Title Company is prepared to issue to Buyer a policy of title insurance
applicable to the Property as described in Section 9.3.
9.3 Title Insurance; Condition of Title. Seller shall convey title to
the Property to Buyer at close of escrow pursuant to the Grant Deed. As a
condition to Buyer's obligation to close escrow hereunder, fee title to the
Property shall be conveyed to Buyer at the close of escrow subject to the
Permitted Exceptions referred to in Section 5.1.4 above. As a condition to
Buyer's obligation to close escrow hereunder, Title Company or its underwriter
shall be prepared and willing to issue to Buyer at closing, or committed to
issue to Buyer at closing, the policy of title insurance described in Section
5.1.4 above.
9.4 Recordation and Delivery. At the close of escrow on the Property,
the parties hereto shall instruct Title Company to forward the Grant Deed to the
County Recorder for recordation and to deliver the policy of title insurance and
all tax statements to Buyer at the address set forth in Article 12. Title
Company shall be instructed to request the County Recorder not to affix the
amount of documentary transfer taxes on the Grant Deed but include such amount
on a separate statement to be attached to the Grant Deed after recording.
9.5 Prorations. The parties hereto shall instruct Title Company to
prorate between Seller and Buyer at close of escrow hereunder on the Property
non-delinquent installments of city and county real property taxes and
assessments applicable to the Property (and personal property taxes allocated to
the Remaining Personal Property, if any) for the applicable fiscal year as of
such close of escrow. Such real property taxes and assessments shall be prorated
based on the latest available tax rate and assessed valuation for the Property
(exclusive of the Remaining Personal Property). If the amount of any installment
of real property taxes is not known as of the Closing Date, then a proration
shall be made by the parties based on a reasonable estimate of the real property
taxes applicable to the Property and the parties shall adjust the proration when
the actual amount becomes known upon the written request of either party made to
the other. Such prorations of real property taxes and assessments (and personal
property taxes) shall be made on the basis of a 30-day month.
9.6 Costs. Seller shall pay all County documentary transfer taxes and
the cost of the CLTA portion of Buyer's title insurance policy to be issued to
Buyer at closing. Buyer shall pay for the cost of all title insurance
endorsements requested by Buyer to be issued in connection with its
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policy of title insurance and the additional cost associated with the issuance
of an ALTA extended coverage owner's policy of title insurance (including the
cost of any survey required in connection with the issuance of an ALTA extended
policy). Buyer and Seller shall split equally the City transfer taxes imposed in
connection with the sale of the Property, all escrow fees and costs of
recordation of the Deed. All other charges or costs incurred by the parties in
connection with the Close of Escrow of the purchase and sale of the Property
shall be allocated between Buyer and Seller in accordance with the custom in the
City of San Xxxx, County of Santa Clara California. Except as otherwise provided
in Section 17.2 below, each party shall bear its own attorney's fees incurred in
connection with the subject transaction.
9.7 Seller's Affidavit. At or prior to close of escrow, Seller shall
execute and deposit in escrow for delivery to Title Company and Buyer, a
Seller's affidavit meeting the requirements of Internal Revenue Code Section
1445(b)(2), certifying that Seller is not a "foreign person" within the meaning
of Internal Revenue Code Section 1445(f)(3). At or prior to close of escrow,
Seller shall also execute a California Withholding Exemption Certificate (Form
593-W) indicating Buyer is not required to withhold any portion of the Purchase
Price at close of escrow. Title Company shall be solely responsible for the
timely filing of any reports or returns required pursuant to the provisions of
Section 6045(e) of the Internal Revenue Code of 1986 (and any similar reports or
returns required under any state or local laws) in connection with the closing
of the transaction contemplated in this Agreement.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 Seller's Representations and Warranties. Seller makes the following
representations and warranties, each of which (i) is true as of the date hereof
and shall continue to be true as of the close of escrow; and (ii) shall survive
the close of escrow for the "Survival Period," defined herein to mean six (6)
months after the Closing Date:
10.1.1 Authority. The person(s) executing this Agreement on behalf
of Seller are authorized to bind Seller and Seller is authorized and empowered
to perform its obligations hereunder.
10.1.2 Organization and Authority. Seller is duly organized and
validly exists, and Seller is qualified to do business in California. Seller has
the full right and authority and has
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obtained any and all consents required to enter into this Agreement and to
consummate or cause to be consummated the sale of the Property. This Agreement
and all of the documents to be delivered by Seller at the closing have been and
will be authorized and properly executed and will constitute the valid and
binding obligations of Seller, enforceable in accordance with their terms.
10.1.3 "Foreign Person". Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code, as
amended (the "Code"), and Seller will furnish to Buyer, prior to the Closing, an
affidavit confirming the same.
10.2 Buyer's Representations and Warranties. Buyer makes the following
representations and warranties, each of which (i) is true as of the date hereof
and shall continue to be true as of the close of escrow; and (ii) shall survive
the close of escrow for the "Survival Period" referred to above:
10.2.1 Authority. The person(s) executing this Agreement on
behalf of Buyer are authorized to bind Buyer and Buyer is authorized and
empowered to perform its obligations hereunder. This Agreement is a legal, valid
and binding obligation of Buyer and enforceable in accordance with its terms,
and does not violate any provisions of any agreements to which Buyer is a party.
10.2.2 No Other Approvals. No approvals or consents of any
persons are necessary for Buyer to enter into or perform this Agreement.
10.2.3 Binding Obligations. This Agreement and all of the
documents to be delivered by Buyer at the closing have been and will be as of
the closing authorized and properly executed and will constitute the valid and
binding obligations of Buyer, enforceable in accordance with their terms.
10.2.4 Pending Actions or Proceedings. As of the Effective
Date of this Agreement, there is no action or proceeding pending or, to Buyer's
actual knowledge, threatened against Buyer which challenges or impairs Buyer's
ability to execute this Agreement or to perform its obligations under this
Agreement.
10.3 Survival of Warranties. Each party shall promptly advise the other
if it acquires any information which would affect the continued validity of the
representations and warranties set forth in this Article 10. If any of said
representations and warranties of Seller or Buyer, as the case may be, set forth
in this Article 10 shall not be true and correct in all material respects at the
time the same is made or as of the close of escrow hereunder, and upon written
notice from the party to
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whom such representation was made to the other on or prior to such close of
escrow, this Agreement shall terminate at such noticing party's election (except
with respect to any rights, obligations, or liabilities which survive
termination of this Agreement) and the Total Deposit made by Buyer under this
Agreement (excluding any interest accrued thereon, which interest shall be
payable to Buyer) shall be (x) promptly returned to Buyer if Seller is the party
making such material misrepresentation and such misrepresentation would
constitute a material breach of this Agreement by Seller, or (y) promptly paid
to and retained Seller as liquidated damages if Buyer is the party making such
material misrepresentation and such misrepresentation would constitute a
material breach of this Agreement by Buyer.
ARTICLE 11
DEFAULTS
11.1 Seller Default. In the event Seller fails or refuses to perform any
of its obligations under this Agreement when due and such failure or refusal
continues for a period of at least five (5) days following receipt of written
notice by Seller from Buyer (excepting therefrom Seller's obligation to close
escrow as and when required hereunder for which Seller shall have no cure
period), then Seller shall be in breach or default of such obligation(s) under
this Agreement. In the event of such breach or default, Buyer's sole remedy
shall be to elect one of the following: (a) to terminate this Agreement, in
which event Buyer shall be entitled to a refund of the Total Deposit made by
Buyer hereunder (including any interest accrued thereon while in escrow) and, if
Seller willfully breaches its obligation to sell and convey the Property to
Buyer and such willful breach is not cured or remedied by Seller within the five
(5) day period referred to above, then Seller also agrees to reimburse Buyer for
Buyer's out-of-pocket expenses, not to exceed One Hundred Thousand Dollars
($100,000), reasonably paid or incurred by Buyer in connection with this
Agreement or the Property (including, without limitation, due diligence
expenses, consultants' fees, and attorneys' fees); or (b) to bring a suit for
specific performance provided that any suit for specific performance must be
brought within ninety (90) days of Seller's default, Buyer waiving the right to
bring suit at any later date. Under no circumstances shall Buyer be entitled to
pursue a suit for damages in connection with Seller's breach or default, except
(i) to recover the Total Deposit (including any interest accrued thereon while
in escrow) if Seller breaches its obligation to return the Total Deposit
(including any interest accrued thereon) to Buyer, or (ii) to recover Buyer's
out-of-pocket expenses, not to exceed One Hundred Thousand Dollars ($100,000),
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reasonably paid or incurred by Buyer in connection with this Agreement or the
Property in the event clause (a) above applies and Seller willfully breaches its
obligation to sell and convey the Property to Buyer (and such willful breach is
not cured or remedied by Seller within the five (5) day period referred to
above).
11.2 Buyer Default. In the event Buyer fails or refuses to perform any of
its obligations under this Agreement when due and such failure or refusal
continues for a period of at least five (5) days following receipt of written
notice by Buyer from Seller (excepting therefrom Buyer's obligation to close
escrow as and when required hereunder and Buyer's obligation to deliver the
First Deposit and Second Deposit into escrow under this Agreement for which
Buyer shall have no cure period), then Buyer shall be in breach or default of
such obligation(s) under this Agreement. In the event of such breach or default
of Buyer's obligation to purchase the Property, Seller shall be entitled, as its
sole and exclusive remedy (except as provided in this Section 11.2 below or in
Section 3.3 above), as liquidated damages, to receive and retain the Total
Deposit made by Buyer, or such portion thereof deposited by Buyer under this
Agreement (and Buyer shall be entitled to the interest accrued on the same while
in escrow); except that if Buyer breaches any of its indemnification, defense or
hold harmless obligations under this Agreement or other obligations that
expressly survive termination of this Agreement (collectively, the "Surviving
Obligations"), then Seller shall not be so limited in its remedies as it relates
to the Surviving Obligations and may pursue an action against Buyer for breach
of such Surviving Obligations.
ARTICLE 12
NOTICES
All notices called for pursuant to this Agreement shall be given in
writing by personal delivery, by facsimile, by overnight mail or overnight
private courier. Overnight mail or couriered notices shall be deemed received
the day following deposit into the U.S. mail or delivery to the private courier.
Notices sent by facsimile shall be deemed received on the date sent (provided
that such notice is also sent by one of the other means stated herein within one
business day following the delivery of such faxed notice). Mailed or couriered
notices shall be addressed as set forth below, but either party may change its
address by giving written notice thereof to the other in accordance with the
provisions of this article.
To Buyer: Willow Xxxx Investments, LLC
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000 Xxxxx Xxxx, Xxxxx X000
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
To Seller: Micro Linear Corporation
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copy to: Berliner Xxxxx
00 Xxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxx, XX. 00000
Attn: Xxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
To Title Company: First American Title Company
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
ARTICLE 13
BROKER'S COMMISSIONS
Seller represents and warrants to Buyer that it has not dealt with any
real estate broker, agent or salesperson in connection with this transaction
other than Xxxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxx of Colliers International.
Buyer represents and warrants to Seller that it has not dealt with any real
estate broker, agent or salesperson in connection with this transaction other
than Xxxxx Xxxxxxxx and Nigel Keep of BT Commercial. In the event escrow closes
hereunder, and only if escrow closes hereunder, Seller shall pay to Colliers
International a real estate commission in the amount of two and one-half percent
(2.5%) of the Purchase Price, and Seller shall pay to BT Commercial a real
estate commission in the amount of two and one-half percent (2.5%) of the
Purchase Price. In no event shall Seller be liable to Colliers International or
BT Commercial for the payment of any commission or other fee in connection with
this
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Agreement if escrow fails to close for any reason, including without limitation
a default on the part of Seller. Each party shall indemnify, defend and hold
harmless the other on account of any claims, demands, causes of action, or
judgments respecting payment of any sales commission, brokerage commission or
finder's fee, including attorneys' fees and court costs, arising from or brought
by any third party (other than Colliers International and BT Commercial) who has
dealt or claims to have dealt with such indemnifying party pertaining to the
Property. The obligations to indemnify, defend and hold harmless as provided in
this Article 13 shall survive the close of escrow or termination of this
Agreement.
ARTICLE 14
TRADE OR EXCHANGE
Each party hereto agrees to reasonably cooperate with the other in the
event such party attempts to effectuate a Section 1031 exchange with respect to
the Property (or applicable portion thereof). Such reasonable cooperation shall
not require the cooperating party to obtain title to any exchange or target
property, execute any promissory note or other document or instrument which
would or could impose personal liability upon such cooperating party, or incur
any additional expense, cost or liability whatsoever (including, but not limited
to, liabilities or warranties of title, or assumption of indebtedness) with
regard to the Section 1031 exchange or exchanges. Each party hereto attempting
to effectuate a Section 1031 exchange hereby agrees to indemnify, protect,
defend and hold harmless the other party from any claim, damage, liability,
penalties, fines, demand, cause of action, loss, cost, or expense (including,
without limitation, reasonable attorney's fees) the other party may suffer or
incur as a result of the cooperating party's participation in the aforesaid
exchange or exchanges. Notwithstanding the foregoing, a cooperating party's
agreement hereunder to participate in a tax-deferred exchange or exchanges shall
not extend the Closing Date hereunder. A cooperating party in such 1031 exchange
shall not, by this Agreement or acquiescence to the exchange contemplated by
this Article 14, (x) have its rights under this Agreement affected or diminished
in any manner or (y) be responsible for compliance with or be deemed to have
warranted to the other party that any exchange in fact complies with Section
1031 of the Internal Revenue Code of 1986, as amended. The obligations of Seller
and Buyer under this Article 14 shall survive the close of escrow.
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ARTICLE 15
RISK OF LOSS
15.1 Minor Loss. Buyer shall be bound to purchase the Property for the
full Purchase Price as required by the terms hereof, without regard to the
occurrence or effect of any damage to the Property or destruction of any
improvements thereon or condemnation of any portion of the Property, provided
that: (a) the cost to repair any such damage or destruction, or the diminution
in the value of the remaining Property as a result of a partial condemnation,
does not exceed Five Hundred Thousand Dollars ($500,000), and (b) upon the
Closing, there shall be a credit against the Purchase Price due hereunder equal
to (i) in the event of a partial condemnation, the diminution in the value of
the remaining Property (as reasonably determined by an appraiser selected by
Seller and approved by Buyer), not to exceed $500,000, or (ii) in the event of
damage to the Property or damage or destruction of any improvements thereon, the
cost to repair the damage or destruction (as reasonably estimated by a general
contractor selected by Seller and reasonably approved by Buyer), not to exceed
$500,000. In the event of any damage to the Property or damage or destruction of
any improvements thereon or condemnation of any portion of the Property where
the cost to repair any such damage or destruction, or the diminution in the
value of the remaining Property as a result of a partial condemnation, does not
exceed Five Hundred Thousand Dollars ($500,000), any and all insurance proceeds
or condemnation awards, or rights to the same, applicable to such damage or
destruction or condemnation, as the case may be, shall be paid to Seller, and
Buyer shall not be entitled to any portion of such proceeds or awards.
15.2 Major Loss. If the amount of the damage or destruction or
condemnation as specified above exceeds Five Hundred Thousand Dollars
($500,000), then Buyer may, at its option to be exercised within ten (10) days
of Seller's notice of the occurrence of the damage or destruction or the
commencement of condemnation proceedings, either (a) terminate this Agreement by
giving written notice to Seller within such ten-day period or (b) consummate the
purchase for the full Purchase Price as required by the terms hereof. If Buyer
so terminates this Agreement, then the Total Deposit paid by Buyer, together
with all interest accrued thereon while in escrow, shall be returned to Buyer
and neither party shall have any further rights or obligations hereunder except
for such rights and obligations as expressly survive the termination of this
Agreement. If Buyer elects to proceed with the
-27-
purchase, then, upon the Closing, there shall be a credit against the Purchase
Price due hereunder equal to the amount of any insurance proceeds applicable to
the damage or destruction or condemnation awards collected by Seller as a result
of any such damage or destruction or condemnation under any policy of insurance
carried by Seller with respect to such loss, less any sums expended by Seller
toward the restoration or repair of the Property. If the proceeds or awards have
not been collected as of the Closing, then such proceeds or awards shall be
assigned to Buyer, except to the extent needed to reimburse Seller for sums
expended to repair or restore the Property.
ARTICLE 16
LEASEBACK
Seller shall have the option to lease back the entire Building located at
0000 Xxxxxxxxx Xxxxx, consisting of approximately forty-five thousand five
hundred sixty (45,560) square feet, more or less, for a term of sixty (60) days
(subject to extension as provided below), commencing from the close of escrow
hereunder, at a rental rate of $0.60 per rentable square foot, triple net. Such
triple net expenses shall not include any capital improvement costs or capital
expenditures. Seller shall have the right to extend the sixty (60) day leaseback
term for two (2) additional periods of thirty (30) days each at the same monthly
rental rate provided above provided Seller gives Buyer written notice of
exercise of such applicable extension right at least thirty days prior to the
date the Lease term would expire but for the exercise of the applicable
extension option. If Seller exercises its right to lease the entire Building
located at 2050 Concourse as provided in this Article 16, then Seller also shall
have the right to use on a non-exclusive basis forty-nine percent (49%) of the
total number of parking spaces located on the Property and the right of
vehicular and pedestrian ingress and egress over the parking areas located on
the Property. Seller shall be deemed to have exercised its leaseback right
provided in this Article 16 unless Seller gives Buyer written notice not later
than ten (10) days prior to the Closing Date that Seller does elect to lease
back the entire Building located at 0000 Xxxxxxxxx Xxxxx at the Close of Escrow.
The Lease for the lease back of the Building located at 0000 Xxxxxxxxx Xxxxx
shall be in the form and content of Exhibit G attached hereto. If Seller
exercises it right to lease back the entire Building located at 0000 Xxxxxxxxx
Xxxxx as provided above, then Seller, as Tenant, and Buyer,
-28-
as Landlord, shall execute and deliver to the other at Closing a signed
counterpart of the Lease in the form and content of Exhibit G attached hereto.
ARTICLE 17
GENERAL PROVISIONS
17.1 Merger. All negotiations and agreements, oral or written, heretofore
had by and between the parties and their agents with respect to this transaction
are merged into this Agreement, which completely sets forth the obligations of
the parties.
17.2 Attorneys' Fees. In the event either party brings an action at law
or in equity to enforce, interpret or redress the breach of this Agreement, the
prevailing party in such action shall be entitled to its litigation expenses and
reasonable attorneys' fees in addition to all other relief as may be allowed by
law. "Prevailing party" within the meaning of this section shall include,
without limitation, a party who brings an action, which action is dismissed
after the other party's payment of the sum allegedly due or performance of the
covenant allegedly breached or if the party obtains substantially the relief
sought by it in the action.
17.3 Amendment. This Agreement may be amended only by a writing signed by
each of the parties hereto.
17.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which shall constitute one instrument.
17.5 Assignment. Buyer may assign its rights and obligations under this
Agreement to a third party assignee or nominee, provided (i) Seller receives
written notice of such assignment not later than ten days prior to the close of
escrow, (ii) the third party assignee or nominee agrees in writing to assume all
of the obligations of Buyer under this Agreement and agrees in writing to be
bound by all the terms and conditions of this Agreement, including, without
limitation, the provisions of Article 8 above (and the release provisions
therein), and such writing shall be delivered to Seller not later than ten days
prior to the close of escrow. In no event shall an assignment by Buyer of this
Agreement or Buyer's rights and/or obligations hereunder release Buyer from its
obligations under this Agreement. Subject to the foregoing, all terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of, and be enforceable by, the respective assigns and successors of
Seller and Buyer.
-29-
17.6 Captions. The captions and headings in this Agreement are for
reference and convenience only and shall not limit or expand the meaning of the
provisions of this Agreement.
17.7 Governing Law. This Agreement shall be governed by the laws of the
State of California.
17.8 Exhibits. All exhibits attached hereto are incorporated herein by
reference.
17.9 Interpretation of Agreement. The parties hereto acknowledge and
agree that, although this Agreement has been drafted by Seller's legal counsel,
Buyer or its legal counsel have fully negotiated the terms of such Agreement.
Consequently, the doctrine that ambiguities in an agreement should be resolved
against the drafting party shall not be employed in connection with this
Agreement and this Agreement shall be interpreted in accordance with its fair
meaning.
17.10 No Waiver. No failure of either party hereto to exercise any right
hereunder or to insist upon strict compliance with any obligations specified
herein, shall constitute a waiver of either party's right to demand exact
compliance with the terms hereof.
17.11 Entire Agreement. The provisions of this Agreement reflect the
parties' entire agreement as to matters expressed herein and there are no other
representations, agreements, or arrangements (whether oral or written) between
or among the parties relating to the subject matter of this Agreement.
17.12 Severability. If any term, provision, condition or covenant of this
Agreement is held to be unenforceable or invalid by a court of competent
jurisdiction, then the remaining terms, conditions and provisions of this
Agreement shall not be affected thereby and shall remain in full force and
effect.
17.13 Possession. Subject to the provisions of Article 16 above, Buyer
shall be entitled to possession of the Property at the close of escrow
hereunder.
17.14 Confidentiality. Buyer agrees not to disclose any of the terms and
conditions of this Agreement to any person other than (a) Buyer's prospective
lender, (b) Buyer's attorneys and accountants, and (c) those who are actively
and directly participating in the evaluation of the Property. Buyer agrees to
cause all persons to whom it discloses any of the terms and conditions of this
Agreement to maintain the confidentiality of the such information so disclosed.
The provisions of this Section 17.14 shall survive any termination of this
Agreement.
-30-
(signature page follows on next page)
-31-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxxx
Its: Chief Executive Officer
Dated: April 15, 2004
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a limited liability company
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Its: President
Dated: April 12, 2004
-32-
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows:
All of Parcel 44, as shown on that certain Map entitled, "Parcel Map of
International Business Park," which Map was filed for record in the office of
the Recorder of the County of Santa Xxxxx, State of California on January 28,
1977, in Book 388 of Maps page(s) 16 through 27.
EXCEPTING THEREFROM the underground water rights without rights of surface entry
as conveyed to San Xxxx Water Works, a California corporation, by Deed recorded
May 22, 1985, in Book J353, Page 153 of Official Records.
APN: 000-00-000
ARB: 243-08-002.03, 004.18
-1-
EXHIBIT B
CONTRACT OBLIGATIONS
None, other than the contracts, agreements and commitments, if any, currently of
record and which encumber the real property located at 2050 and 0000 Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxxxxxxxxx ("Property"), excepting therefrom any deed of trust,
assignment of rents and leases, UCC-1 financing statement and any other
documents that evidence or secure the loan presently secured by the Property.
-1-
EXHIBIT C
REMAINING PERSONAL PROPERTY
Personal property to remain in 0000 Xxxxxxxxx Xxxxx:
1. Filing cabinets (approximately 60)
2. Conference room and other tables (approximately 8)
3. Desk Chairs (approximately 150)
4. All personal property in the security room with the exception of the
paging system.
Note: Micro Linear currently has a tenant, TLS, utilizing warehouse space, and
storing inventory on shelving and on the warehouse floor in 0000 Xxxxxxxxx
Xxxxx. All personal property of TLS, including but limited to the inventory,
shelving and various warehouse equipment remains the property of TLS.
-1-
EXHIBIT D
LIST OF DUE DILIGENCE DOCUMENTS TO BE DELIVERED
OR MADE AVAILABLE TO BUYER
DOCUMENT PROVIDED DOCUMENT DATE OR PERIOD COVERED
----------------- -------------------------------
Various blueprints depicting 2050 and Various
0000 Xxxxxxxxx Xxxxx
Electrical system analysis prepared by May 20, 2002
TDN Electric, Inc.
Letter from Micro Linear to Water May 3, 1999
Pollution Control Plant informing them that
Micro Linear has stopped production of
semiconductor products at its San Xxxx
facilities.
Letter submitted with the following
documents attached:
A. San Xxxx/Santa Xxxxx Self Monitoring Prepared on or about May 3, 1999
Report prepared by Micro Linear
B. Total Toxic Organics Certification Prepared on or about May 4, 1999
Statement prepared by Micro Linear
C. Organic Solvent Worksheet for Prepared on or about April 30, 1999
ISOPROPYL ALCOHOL
D. Organic Solvent Worksheet for Prepared on or about April 30, 1999
ACETONE
E. Priority Environmental Labs Chemical Prepared on or about April 30, 1999
Analysis
F. Applied Remediation Environmental Prepared on or about April 23, 1999
Laboratory Report and Certification
G. San Xxxx Water Company Xxxxxxxx (for September 24, 1998 through March 2, 1999
water consumption)
-1-
Preliminary title report dated as of November 18, 2003
November 18, 2003, prepared by First
American Title Insurance Company, Order
Number NCS-61517-SC, together with the
underlying title documents referred to
therein.
Commercial Natural Hazard Disclosure November 25, 2003
Report dated November 25, 2003, prepared
by JCP Geologists, covering the real
property located at 0000 Xxxxxxxxx Xxxxx,
Xxx Xxxx, Xxxxxxxxxx (APN (244-15-015).
-2-
EXHIBIT E
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
__________________________
__________________________
__________________________
SPACE ABOVE THIS LINE FOR RECORDER'S USE
Mail Tax Statements to: CITY CONVEYANCE DOCUMENTARY TRANSFER TAX $_______
__________________________ Tax: $______ ______ Computed on the
__________________________ consideration or value of
__________________________ property conveyed;
OR
City: San Xxxx ______ Computed on the
consideration or value
less liens or encumbrances
remaining at time of sale.
___________________________________________________
Signature of Declarant or Agent determining
tax -- Firm Name
________________________________________________________________________________
APN 000-00-000
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
MICRO LINEAR CORPORATION, a Delaware corporation hereby GRANT(S) to WILLOW XXXX
INVESTMENTS, LLC, a California limited liability company that certain real
property in the City of San Xxxx, County of Santa Xxxxx, State of California,
more particularly described as follows: See legal description attached hereto as
Exhibit A and made a part hereof. Such grant is made subject to all matters of
record affecting the real property described on Exhibit A attached hereto,
including, without limitation, those title matters described in Exhibit B
attached hereto.
Dated: __________________, 2004 MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Its: CFO
-1-
On ________________, before me, _________________, personally appeared
_______________,
[ ] personally known to me -OR- [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument
and acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s), or the entity
upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
__________________________________________
SIGNATURE OF NOTARY
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
____________________________________
Title(s)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: _____________________________
_____________________________
SIGNER IS REPRESENTING:
Name of Person(s) or Entity(ies)
________________________________________
________________________________________
-1-
EXHIBIT A TO GRANT DEED
LEGAL DESCRIPTION
Real property in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows:
All of Parcel 44, as shown on that certain Map entitled, "Parcel Map of
International Business Park," which Map was filed for record in the office of
the Recorder of the County of Santa Xxxxx, State of California on January 28,
1977, in Book 388 of Maps page(s) 16 through 27.
EXCEPTING THEREFROM the underground water rights without rights of surface entry
as conveyed to San Xxxx Water Works, a California corporation, by Deed recorded
May 22, 1985, in Book J353, Page 153 of Official Records.
APN: 000-00-000
ARB: 243-08-002.03, 004.18
-2-
EXHIBIT B TO GRANT DEED
Permitted Exceptions
-1-
EXHIBIT F
XXXX OF SALE
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, MICRO LINEAR CORPORATION, a Delaware corporation ("Seller") hereby
sells, transfers, and conveys to WILLOW XXXX INVESTMENTS, LLC, a California
limited liability company ("Buyer"), all of its right, title and interest in and
to the personal property located in the building or buildings situated at 2050
and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx, which personal property is more
particularly described on Schedule 1 attached hereto (the "Personal Property").
Seller makes no representation or warranties, expressed or implied,
concerning the Personal Property to be transferred to Buyer pursuant to the
terms of this Xxxx of Sale, and by accepting this Xxxx of Sale, Buyer
acknowledges and agrees that Buyer is accepting such Personal Property in their
"As Is," "Where Is" condition, and with all faults and that the provisions of
Article 8 of that certain Purchase and Sale Agreement dated April 15, 2004, as
amended. by and between Seller and Buyer shall be applicable to the transfer
described herein.
IN WITNESS WHEREOF, this Xxxx of Sale is executed as of this ____ day of
________, 2004.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Its: CFO
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a California limited liability company
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Son X. Xxxxxx
Its: Manager and Member
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Hai X. Xxxxxx
Its: Manager and Member
-1-
SCHEDULE 1 TO XXXX OF SALE
PERSONAL PROPERTY
Personal property to remain in 0000 Xxxxxxxxx Xxxxx:
1. Filing cabinets (approximately 60)
2. Conference room and other tables (approximately 8)
3. Desk Chairs (approximately 150)
4. All personal property in the security room with the exception of the
paging system.
Note: Micro Linear currently has a tenant, TLS, utilizing warehouse space, and
storing inventory on shelving and on the warehouse floor in 0000 Xxxxxxxxx
Xxxxx. All personal property of TLS, including but limited to the inventory,
shelving and various warehouse equipment remains the property of TLS.
-1-
EXHIBIT G
NET LEASE AGREEMENT
For and in consideration of the rentals, covenants, and conditions hereinafter
set forth, Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, the following described Premises for the term, at the rental and
subject to and upon all of the terms, covenants and agreements set forth in this
Net Lease Agreement ("Lease"):
1. Summary of Lease Provisions.
1.1 Tenant: Micro Linear Corporation, a Delaware corporation
("Tenant").
1.2 Landlord: Willow Xxxx Investments, LLC, a California limited
liability company ("Landlord").
1.3 Date of Lease, for reference purposes only: July 28, 2004.
1.4 Premises: That certain building, consisting of approximately
forty-five thousand five hundred sixty (45,560) square feet,
located at 0000 Xxxxxxxxx Xxxxx in the City of San Xxxx,
County of Santa Xxxxx, State of California, identified on the
site plan attached hereto as Exhibit A and made a part hereof
(Paragraph 2.1) At the expiration of the fourth month of the
Term, Tenant shall surrender approximately fifteen thousand
one hundred eighty-five (15,185) square feet of the original
Premises described above, which approximately 15,185 square
feet is shown cross-hatched on Exhibit B attached hereto.
Accordingly, at the expiration of the fourth month of the
Term, and during the remainder of the Term of the Lease, the
Premises shall consist of approximately thirty thousand three
hundred seventy-five (30,375) square feet within the building
described above, which approximately 30,375 square feet is
shown cross-hatched on Exhibit C attached hereto.
1.5 Term: From the Commencement Date of this Lease (as defined
below) through the Ending Date (as defined below) (Paragraph
3)
1.6 Commencement Date: The date of Closing (as that terms is
defined in the Purchase and Sale Agreement dated April 15,
2004, by and between Tenant, as Seller, and Landlord (or its
predecessor-in-interest or assignor), as Buyer (the "Purchase
and Sale Agreement"). (Paragraph 3)
1.7 Ending Date: The date twelve (12) months following the
Commencement Date of this Lease, unless sooner terminated
pursuant to the terms of this Lease. (Paragraph 3)
1.8 Rent: The monthly installment of rent payable during the first
four months of the Term of this Lease shall be Sixty Cents
($0.60) per square
-2-
foot of Premises (which equates to $27,336.00 per month). The
monthly installment of rent payable during months five through
twelve of the Term shall be Sixty Cents ($0.60) per square
foot of Premises (which equates to $18,225.00 per month)
(Paragraph 4)
1.9 Use of Premises: Design and manufacturing of high performance
radio frequency integrated circuits and solutions for the
communications market, together with general office use.
(Paragraph 6)
1.10 Tenant's percentage share of Common Area Charges: One hundred
percent (100%) as to the Premises and forty-eight and
eighty-seven hundredths percent (48.87%) as to the Project
generally during the first four months of the Term, and
sixty-six and sixty-seven hundredths percent (66.67%) as to
the Premises and thirty-two and fifty-eight hundredths percent
(32.58%) as to the Project generally during months five
through twelve of the Lease (Paragraph 12)
1.11 Security Deposit: None (Paragraph 5).
1.12 Addresses for Notices:
To Tenant: Micro Linear Corporation
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxx, CFO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copies to:
Berliner Xxxxx
00 Xxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Landlord: Willow Xxxx Investments LLC
______________________________
______________________________
1.13 Non-Exclusive Right to Use No More Than: Forty-nine percent
(49%) of the parking spaces within the Common Area during the
first four months of the Term and thirty-two and sixty-seven
hundredths percent (32.67%) of the parking spaces within the
Common Area during months five through twelve of the Lease.
(Paragraph 11.2)
-3-
1.14 Summary Provisions in General. Parenthetical
references in this Paragraph 1 to other paragraphs in
this Lease are for convenience of reference, and
designate some of the other Lease paragraphs where
applicable provisions are set forth. All of the terms
and conditions of each such referenced paragraph
shall be construed to be incorporated within and made
a part of each of the above referring Summary of
Lease Provisions. In the event of any conflict
between any Summary of Lease Provision as set forth
above and the balance of the Lease, the latter shall
control.
2. Property Leased.
2.1 Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord upon the terms and conditions herein set forth, that
certain Premises referred to in Paragraph 1.4 above and identified on the site
plan attached hereto as Exhibit A. In addition, Tenant shall have such rights in
and to the Common Area (defined in Paragraph 11.1 below) as are more fully
described in Paragraph 11.1 below.
The building comprising the Premises is referred to herein as the
"Building." The "Land" shall mean and refer to all of the real property,
consisting of approximately six and fifty-six hundredths (6.56) acres, more or
less, located at 2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx, commonly
referred to as Assessor's Parcel Number 000-00-000. The Land, Building, the
building located at 0000 Xxxxxxxxx Xxxxx and any other improvement(s) now or
hereafter located on the Land are referred to herein collectively as the
"Project."
Landlord reserves the right to grant to tenants of the Project, and to the
agents, employees, servants, invitees, contractors, guests, customers and
representatives of such tenants or to any other user authorized by Landlord, the
nonexclusive right to use the Land for pedestrian and vehicular ingress and
egress and vehicular parking.
2.2 Improvements. Landlord shall not be obligated to construct or
install any improvements in or on the Premises as a condition to the
effectiveness of this Lease. In connection with Tenant surrendering
approximately fifteen thousand one hundred eighty-five (15,185) square feet of
the original Premises to Landlord at the expiration of the fourth month of the
Term (pursuant to the terms of Paragraph 1.4 above), Landlord shall, at its sole
cost, make the necessary modifications to the building referred to in Paragraph
1.4 above to ensure Tenant's quiet enjoyment of the remaining portion of the
Premises leased by Tenant hereunder and for privacy and security of Tenant's
personal property. Such modifications shall include, without limitation,
providing a separate entrance and lobby for Tenant. Upon surrendering the
approximately 15,185 square feet of space to Landlord as provided above, Tenant
agrees to cooperate with Landlord in consolidating its use of the Building to
facilitate Landlord's efforts to lease such approximately 15,185 square feet to
other potential tenants in months five through twelve of the Term.
-4-
2.3 Acceptance of Premises. As of the date of execution of this
Lease, Tenant is in possession of the Premises, having been the owner of the
Project immediately prior to the Commencement Date of this Lease. Tenant shall
be deemed to have accepted the Premises in their condition existing as of the
Commencement Date of this Lease, subject to all applicable laws, covenants,
conditions, restrictions, easements and other matters of public record. Tenant
acknowledges that neither Landlord nor Landlord's agents have made any
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, the condition of the Building or Premises, or the use or
occupancy which may be made thereof and Tenant is satisfied that the Premises
are suitable for Tenant's intended use.
3. Term.
3.1 Commencement Date. The term of this Lease ("Lease Term") shall
be for the period specified in Paragraph 1.5 above, commencing on the date set
forth in Paragraph 1.6 ("Commencement Date"). The expiration or sooner
termination of this Lease is referred to herein sometimes as the "Lease
Termination."
4. Rent.
4.1 Rent. Tenant shall pay to Landlord as rent for the Premises
("Rent"), in advance, on the first day of each calendar month, commencing on the
date specified in Paragraph 1.6 and continuing throughout the Lease Term the
Rent set forth in Paragraph 1.8 above. Rent shall be prorated, based on thirty
(30) days per month, for any partial month during the Lease Term. Rent shall be
payable at the address herein specified for purposes of notice or to such other
persons or such other places as Landlord may designate in writing.
4.2 Additional Rent. All taxes, charges, costs and expenses and
other sums which Tenant is required to pay hereunder shall be deemed to be
additional rent hereunder ("Additional Rent"). Additional Rent shall accrue
commencing on the Commencement Date. In the event of nonpayment by Tenant of any
Additional Rent, Landlord shall have all the rights and remedies with respect
thereto as Landlord has for the nonpayment of Rent. The term "Rentals" as used
in this Lease shall mean Rent and Additional Rent.
5. Intentionally Omitted
6. Use of Premises.
6.1 Permitted Uses. Subject to Paragraph 6.2, Tenant shall use the
Premises and the Common Area (as described in Paragraph 11 below) in conformance
with applicable governmental or quasi-governmental laws, statutes, orders,
regulations, rules, ordinances and other requirements now or hereafter in effect
(collectively, "Laws") for the purposes set forth in Paragraph 1.9 above, and
for no other purpose.
-5-
6.2 Tenant to Comply with Legal Requirements. Tenant shall, at its
sole cost, comply with all laws now in force, or which may hereafter be in
force, relating to or affecting Tenant's particular manner of use of the
Premises. Anything in this Lease to the contrary notwithstanding, Tenant shall
have no obligation to construct or install, or contribute to the cost of
constructing or installing, any capital or structural improvements or
replacements on, in or about the Project or the Premises unless the same arise
out of or in connection with the Tenant's future specific manner of use of the
Premises or the Tenant's construction or installation of future alterations,
additions or improvements to the Premises (collectively, "Alterations"), or any
portion thereof. The cost of any structural alterations and/or capital
improvements or replacements as may be hereafter required due to a change in
laws and unrelated to Tenant's future specific manner of use of the Premises or
Tenant's future Alterations to the Premises shall be the responsibility of
Landlord.
6.3 Prohibited Uses. Tenant shall not commit or suffer to be
committed any waste upon the Premises. Tenant shall not do or permit anything to
be done in or about the Common Area which will in unreasonably interfere with
the rights of Landlord or any other tenant of the Project. Tenant shall not use
or allow the Premises to be used for any unlawful purpose or any purpose not
permitted by this Lease, nor shall Tenant cause or maintain any nuisance in, on
or about the Premises. Tenant and Tenant's agents shall not place any loads upon
the floor, walls or ceiling of the Premises which would endanger the Building or
the structural elements thereof or of the Premises.
6.4 Hazardous Materials. During the Lease Term, Tenant shall not
use, store, manufacture, transport, release or discharge (collectively
"Release") any Hazardous Material(s) (defined below) on or about any portion of
the Project without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the immediately
preceding sentence to the contrary, (a) Tenant may use de minimis quantities of
the types of materials which are technically classified as Hazardous Materials
but commonly used in domestic or office use to the extent not in an amount,
which, either individually or cumulatively, would be a "reportable quantity"
under any applicable Law, and (b) by executing this Lease, Landlord hereby gives
its written consent for Tenant to use such Hazardous Materials as have been
previously used by Tenant in connection with the operation of Tenant's business
on the Project, or applicable portion thereof. Tenant covenants that, at its
sole cost and expense, Tenant will comply with all applicable Laws with respect
to the Release by Tenant, its agents, employees, or contractors of such
permitted Hazardous Materials during the Lease Term.
As used in this Lease, the term "Hazardous Materials" means any chemical,
substance, waste or material which is included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances," or "solid
waste" under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and
the Hazardous Materials Transportation Act, as amended, and in the regulations
promulgated pursuant to said laws; those substances defined as "hazardous
wastes" in section 25117 of the California Health & Safety Code, or as
"hazardous substances" in section 25316 of the California Health & Safety Code,
as amended, and in the regulations
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promulgated pursuant to said laws; such other substances, materials and wastes
which are or become regulated or become classified as hazardous or toxic under
any Laws, including without limitation the California Health & Safety Code,
Division 20, and Title 26 of the California Code of Regulations; and any
material, waste or substance which is (i) petroleum, (ii) asbestos, (iii)
polychlorinated biphenyls, (iv) designated as a "hazardous substance" pursuant
to section 311 of the Clean Water Act of 1977, 33 U.S.C. sections 1251 et seq.
(33 U.S.C. Section 1321) or listed pursuant to section 307 of the Clean Water
Act of 1977 (33 U.S.C. Section 1317), as amended; (v) flammable explosives; (vi)
radioactive materials; or (vii) radon gas.
Landlord shall have the right, upon reasonable advance notice to Tenant,
to inspect, investigate, sample and/or monitor the Premises, the Building and
Common Area, including any soil, water, groundwater, or other sampling, to the
extent reasonably necessary to determine whether Tenant is complying with the
terms of this Lease with respect to Hazardous Materials. In connection
therewith, Tenant shall provide Landlord with reasonable access to all portions
of the Premises; provided, however, that Landlord shall avoid any interference
with the operation of Tenant's business on the Premises and shall comply with
Tenant's reasonable security requirements, if any. All costs incurred by
Landlord in performing such inspections, investigation, sampling and/or
monitoring ("Monitoring") shall be borne solely by Landlord and shall not be
subject to reimbursement by Tenant; provided, however, if such Monitoring
conclusively determines that, during the Lease Term, Tenant has caused Hazardous
Substances to be Released on, in or under the Project, or applicable portion
thereof, in violation of any applicable environmental Laws, then Tenant shall
bear such reasonable costs of the Monitoring applicable solely to such Hazardous
Substances Released by Tenant.
7. Taxes.
7.1 Personal Property Taxes. Tenant shall exercise commercially
reasonable efforts to cause Tenant's trade fixtures, equipment, furnishings,
furniture, merchandise, inventory, machinery, appliances and other personal
property installed or located on the Premises (collectively the "personal
property") to be assessed and billed separately from the Land and the Building.
Tenant shall pay before delinquency any and all taxes, assessments and public
charges levied, assessed or imposed upon or against Tenant's personal property.
If any of Tenant's personal property shall be assessed with the Land or the
Building, Tenant shall pay to Landlord, as Additional Rent (if not paid by
Tenant as part of the real property taxes allocable to the Premises), the
amounts attributable to Tenant's personal property within thirty (30) days after
receipt of a written statement from Landlord setting forth the amount of such
taxes, assessments and public charges attributable to Tenant's personal
property.
7.2 Other Taxes Payable Separately by Tenant. Tenant shall pay (or
reimburse Landlord, as Additional Rent, if Landlord is assessed), prior to
delinquency or within thirty (30) days after receipt of Landlord's statement
thereof, any and all taxes, levies, assessments or surcharges that are payable
by Landlord or Tenant and that relate to this Lease or the Premises (other than
Landlord's net income, succession, transfer, gift, franchise, estate or
inheritance taxes, and Taxes, as that term is defined in Paragraph 7.3(a) below,
payable as a Common Area Charge), upon, allocable to, or measured
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by the area of the Premises or the Rentals payable hereunder, including without
limitation any gross rental receipts, excise, or other tax levied by the state,
any political subdivision thereof, city or federal government with respect to
the receipt of such Rentals. In addition, Tenant shall pay all privilege, sales,
excise, use, business, occupation, or other taxes, assessments, license fees, or
charges levied, assessed or imposed upon Tenant's business operations conducted
at the Premises.
7.3 Common Taxes.
(a) Definition of Taxes. The term "Taxes" as used in this Lease
shall collectively mean (to the extent any of the following are not paid by
Tenant pursuant to Paragraphs 7.1 and 7.2 above) all real estate taxes and
general and special assessments; taxes computed or based on rental income or on
the square footage of the Premises (but excluding federal, state and municipal
net income taxes); gross rental receipts taxes; water and sewer taxes, levies,
assessments and other charges in the nature of taxes or assessments (including,
but not limited to, assessments for public improvements or benefit); and all
other governmental, quasi-governmental or special district impositions which
during the Lease Term are laid, levied, assessed or imposed upon Landlord
because of Landlord's ownership of the Project, and/or become a lien upon or
chargeable against any portion of the Project under or by virtue of any present
or future laws, statutes, ordinances, regulations, or other requirements of any
governmental, quasi-governmental or special district authority whatsoever. The
term "Taxes" shall include (to the extent the same are not paid by Tenant
pursuant to Paragraphs 7.1 and 7.2 above), without limitation, all taxes,
assessments, levies, fees, impositions or charges levied, imposed, assessed,
measured, or based in any manner whatsoever upon or with respect to the use,
possession, occupancy, leasing, operation or management of the Project or in
lieu of or equivalent to any Taxes set forth in this Paragraph 7.3(a).
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be required to pay any portion of any tax or assessment (i) in excess of the
amount which would be payable if the tax or assessment were paid in installments
over the longest possible term; (ii) imposed on land and improvements other than
the Project; or (iii) arising from any sale, conveyance, foreclosure or other
transfer of the Project by Landlord or any of its successors in interest.
(b) Common Area Charge. All Taxes which are levied or assessed or
which become a lien upon any portion of the Project or which become due or
accrue during the Lease Term shall be a Common Area Charge, and Tenant shall pay
as Additional Rent each month during the Lease Term 1/12th of its annual share
of such Taxes, based on Landlord's estimate thereof, pursuant to Paragraph 12
below. Tenant's share of Taxes during any partial tax fiscal year(s) within the
Lease Term shall be prorated according to the ratio which the number of days
during the Lease Term bears to 365.
8. Insurance; Indemnity.
8.1 Insurance by Landlord. Landlord shall, during the Lease Term,
procure and keep in force the following insurance, the cost of which shall be a
Common Area Charge, payable by Tenant pursuant to Paragraph 12 below:
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(a) Property Insurance. "Special Form" property insurance,
including, without limitation, boiler and machinery (if applicable) on the
Building and other building and improvements located on the Land, including any
improvements or fixtures constructed or installed in the buildings and on the
Land by Landlord. Such insurance shall be in the full amount of the replacement
cost of the foregoing, with reasonable deductible amounts. Such insurance also
may include rental income insurance, insuring that one hundred percent (100%) of
the Rentals (as the same may be adjusted hereunder) will be paid to Landlord for
a period of up to six (6) months if the Premises are destroyed or damaged. Such
insurance shall not cover Tenant's equipment, trade fixtures, inventory,
fixtures or personal property located on or in the Premises;
(b) Liability Insurance. Commercial general liability
insurance against any and all claims for personal injury, death or property
damage occurring in or about the Project, the Premises, the Common Areas or the
Land. Such insurance shall have a combined single limit of not less than One
Million Dollars ($1,000,000) per occurrence.
8.2 Insurance by Tenant. Tenant shall, during the Lease Term, at
Tenant's sole cost and expense, procure and keep in force the following
insurance:
(a) Liability Insurance. Commercial general liability
insurance against any and all claims for personal injury, death or property
damage occurring in or about the Premises and Common Area or arising out of
Tenant's or Tenant's agents' use of the Common Area, use or occupancy of the
Premises or Tenant's operations on the Premises. Such insurance shall have a
combined single limit of not less than One Million Dollars ($1,000,000) per
occurrence and One Million Dollars ($1,000,000) general aggregate. Landlord
shall be an additional insured on such commercial general liability insurance
policy required to be maintained by Tenant.
(b) Worker's Compensation Insurance. Worker's compensation
insurance as required by law.
(c) Form of the Policies. The policies required to be
maintained by Tenant pursuant to Paragraphs 8.2 (a) shall name Landlord as an
additional insured. A certificate of Tenant's commercial general liability
insurance policy shall be delivered to Landlord within ten (10) days following
written request from Landlord to Tenant. Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms hereof
in a blanket policy, provided such blanket policy expressly affords coverage to
the Premises and Common Area and to Tenant as required by this Lease. Tenant
shall obtain a written obligation on the part of Tenant's insurer(s) to notify
Landlord at least thirty (30) days prior to any cancellation of any policy.
Tenant's commercial general liability policy referred to above shall provide
coverage on an occurrence basis and not on a claims made basis.
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8.3 Failure by Tenant to Obtain Insurance. If Tenant does not take
out the insurance required pursuant to Paragraph 8.2 or keep the same in full
force and effect, then after fifteen (15) days written notice, Landlord may, but
shall not be obligated to, take out the necessary insurance and pay the premium
therefor, and Tenant shall repay to Landlord, as Additional Rent, the reasonable
amount so paid promptly upon demand. In addition, Landlord may recover from
Tenant and Tenant agrees to pay, as Additional Rent, any and all reasonable
expenses (including reasonable attorneys' fees) and damages which Landlord may
sustain by reason of the failure of Tenant to obtain and maintain such insurance
8.4 Indemnification. Tenant shall indemnify, hold harmless and
defend Landlord against all claims, losses, damages, expenses or liabilities for
bodily injury or death to any person or for damage to or loss of use of any
property arising out of any occurrence in, on or about the Premises, Common Area
or Land to the extent caused by the negligence or willful misconduct of Tenant
or Tenant's agents or employees. Tenant's indemnification, hold harmless and
defense obligations referred to above shall not be applicable to the extent any
such claims, losses, damages, expenses or liabilities arise from or are related
to the negligence or willful misconduct of Landlord or any of its agents,
employees, contractors, invitees or other representatives of Landlord.
Landlord shall indemnify, hold harmless and defend Tenant and Tenant's
directors, officers, managers, contractors, affiliates, agents and employees
harmless from and against any and all claims, liabilities, losses, costs,
damages, injuries or expenses, including reasonable attorneys' and consultants'
fees and court costs, demands, causes of action, or judgments, arising out of or
related to claims arising from the negligent acts or omissions or willful
misconduct of Landlord or its agents, employees, contractors or invitees.
The obligations of Landlord and Tenant under this Paragraph 8.4 shall
survive the termination of this Lease.
8.5 Mutual Waiver of Subrogation. Landlord hereby releases Tenant,
and Tenant hereby releases Landlord, and each hereby releases the other's
officers, agents, and employees, from any and all claims or demands of damages,
loss, expense or injury to the Project, or to the furnishings, fixtures,
equipment, inventory or other property of either Landlord or Tenant in, about or
upon the Project, which is caused by or results from perils, events or
happenings which are the subject of insurance carried by the respective parties
pursuant to this Paragraph 8 and in force at the time of any such loss, whether
due to the negligence of the other party or its agents and regardless of cause
or origin; provided, however, that such waiver shall be effective only to the
extent permitted by the insurance covering such loss, to the extent such
insurance is not prejudiced thereby, and to the extent insured against.
9. Utilities. During the Lease Term, unless otherwise provided below,
Tenant shall continue to contract directly in its own name with the applicable
utility or service provider for gas, electricity, water, telephone or other
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communication service, janitorial service and trash pickup (collectively,
"Services") applicable to the Premises. Tenant shall pay during the Lease Term
all charges for Services supplied to Tenant or consumed by Tenant on the
Premises. Tenant shall not be responsible during the Lease Term for any Services
provided to the building located at 0000 Xxxxxxxxx Xxxxx. Tenant understands
that the security system and possibly the fire alarm system servicing the
Premises is or may be located in the building located at 0000 Xxxxxxxxx Xxxxx or
interdependent with the security system and/or fire alarm system servicing the
building at 0000 Xxxxxxxxx Xxxxx. To the extent such security system and/or fire
alarm system is located in the building at 0000 Xxxxxxxxx Xxxxx or
interdependent with the security system and/or fire alarm system servicing the
building located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx agrees that neither it nor
any of its agents, employees, contractors, licensees or other representatives
shall take any action to interrupt, curtail, terminate or suspend such security
or fire alarm service to the Premises. If such security system or fire alarm
system is so interrupted, curtailed, terminated or suspended during the Lease
Term, Landlord shall exercise diligent and reasonable efforts to cause such
applicable system to be restored as soon as practicable under the circumstances.
The reasonable costs incurred by Landlord in maintaining or operating such
security system and/or fire alarm system, to the extent the same is located in
the building at 0000 Xxxxxxxxx Xxxxx and interdependent with the security system
and/or fire alarm system servicing the building at 0000 Xxxxxxxxx Xxxxx, shall
be a Common Area Charge and Tenant shall pay, as Additional Rent, Tenant's
proportionate share of such cost to Landlord as provided in Paragraph 12 below.
If any utilities or Services are curtailed, suspended, terminated or interrupted
for a period of more than forty-eight consecutive hours as a result of the acts
or omissions of Landlord or any of Landlord's agents, employees, contractors or
other representatives, Tenant's obligation to pay Rentals under this Lease shall
be proportionately abated to the extent such curtailment, suspension,
termination or interruption interferes with Tenant's use of the Premises or
operation of its business from the date of such curtailment, suspension,
termination or interruption commences until such utilities or Services are fully
restored.
During the Lease Term, unless otherwise provided below, Tenant also shall
contract directly in its own name with the applicable utility provider for
exterior lighting in the Common Area and water for landscaping in the Common
Area.
Following the expiration of the fourth month of the Term, upon mutual
agreement of Landlord and Tenant, (i) Tenant shall continue to contract directly
in its own name with the applicable utility or service provider for Services
applicable to the Premises and for exterior lighting in the Common Area and
water for landscaping in the Common Area, in which event (a) Landlord shall
reimburse Tenant, within thirty days following receipt of an invoice(s) or
statement(s) and reasonable backup documentation evidencing the costs incurred
by Tenant, for (x) thirty-three and one-third percent (33.33%) of the cost of
such Services applicable to the Building that are not separately metered to the
remaining Premises, and (y) sixty-seven and forty-two percent (67.42%) percent
of the reasonable costs paid or incurred by Tenant in connection with the
exterior lighting in the Common Area and water for landscaping in the Common
Area, or (ii) Landlord shall contract for the Services (except for telephone
service) to be provided to the remaining Premises to the extent such Services
are not separately metered to the remaining Premises and for exterior lighting
in the Common Area and water for landscaping in the Common Area, in which event
the costs reasonably incurred by Landlord in providing
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such Services and for the exterior lighting in the Common Area and water for
landscaping in the Common Area shall be a Common Area Charge.
10. Repairs and Maintenance. Subject to the provisions of Paragraph 15,
Tenant shall, at its sole cost, maintain the Premises in accordance with the
same maintenance standards employed by Tenant when it was the owner of the
Premises; provided, however, under no circumstances shall Tenant's obligations
under this Paragraph 10 include making any capital or structural improvements or
capital repairs or replacements or obligate Tenant to incur any capital
expenditures. If Tenant fails to make repairs or perform maintenance work
required of Tenant hereunder within thirty (30) days after written notice from
Landlord specifying the need for such repairs or maintenance work, Landlord or
Landlord's agents may, in addition to all other rights and remedies available
hereunder or by law and without waiving any alternative remedies, enter into the
Premises and make such repairs and/or perform such maintenance work. If Landlord
makes such repairs and/or performs such maintenance work, Tenant shall reimburse
Landlord within thirty (30) days following receipt of a written invoice and back
up documentation (reasonably satisfactory to Tenant) evidencing the costs
reasonably incurred by Landlord, for the cost of such routine maintenance work.
Landlord shall use reasonable efforts to avoid causing any inconvenience to
Tenant or interference with the use of the Premises by Tenant or Tenant's agents
or employees during the performance of any such repairs or maintenance.
11. Common Area.
11.1 In General. Subject to the terms and conditions of this Lease
and such rules and regulations as Landlord may from time to time reasonably
prescribe, Tenant and Tenant's agents and employees shall have, in common with
Landlord and other tenants of the building located at 0000 Xxxxxxxxx Xxxxx and
other permitted users, the nonexclusive right to use during the Lease Term the
access roads, parking areas, sidewalks, landscaped areas and other facilities on
the Land designated by Landlord for the general use and convenience of the
occupants of the Premises and other authorized users, which areas and facilities
are referred to herein as the "Common Area." This right to use the Common Area
shall terminate upon Lease Termination. Landlord reserves the right to
promulgate such reasonable rules and regulations relating to the use of all or
any portion of the Common Area and to amend such rules and regulations from time
to time with or without advance notice, as Landlord may deem appropriate for the
best interests of the occupants of the Premises and other building located on
the Land and other authorized users. Any amendments to the rules and regulations
shall be effective as to Tenant, and binding on Tenant, upon delivery of a copy
of such rules and regulations to Tenant. Landlord shall not be responsible for
the nonperformance of the rules and regulations by any tenants or occupants of
the building located at 0000 Xxxxxxxxx Xxxxx or other authorized users.
11.2 Parking Areas. Tenant is allocated and Tenant and Tenant's
employees and invitees shall have the nonexclusive right to use not more than
the number of parking spaces set forth in Paragraph 1.13. Neither Tenant nor
Tenant's agents shall at any time use more parking spaces than the number so
allocated to Tenant. Tenant and Tenant's agents shall not have the exclusive
right to use any specific parking space. Landlord reserves the right to
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promulgate such reasonable rules and regulations relating to the use of such
parking areas on the Land as Landlord may deem appropriate. Landlord furthermore
reserves the right, after having given Tenant reasonable notice, to have any
vehicles owned by Tenant or Tenant's agents which are parked in violation of the
provisions of this Paragraph 11.2 or in violation of Landlord's rules and
regulations relating to parking, to be towed away at the vehicle owner's cost.
Provided that Tenant's use, occupancy and enjoyment of the Premises or access to
the Premises is not unreasonably interfered with, Landlord shall have the right
to close, at reasonable times, all or any portion of the parking areas for any
reasonable purpose, including without limitation, the prevention of a dedication
thereof, or the accrual of rights of any person or public therein.
11.3 Maintenance by Tenant. Tenant shall maintain, or cause to be
maintained, the Common Area in good repair and condition and shall manage the
Common Area in accordance with substantially the same standards as were employed
by Tenant when it was the owner of the Project. Such management of the Common
Area shall include, without limitation, providing, or causing to be provided,
lighting in the parking lot and water for exterior landscaping within the Common
Area. Landlord agrees to reimburse Tenant, within thirty (30) days following
receipt of an invoice(s) or statement(s) and reasonable back up documentation
evidencing the costs incurred by Tenant (but not more often than once per
month), for fifty-one and thirteen hundredths percent (51.13%) of the reasonable
costs paid or incurred by Tenant in connection with the maintenance, management,
operation, and repair of the Common Area (including, without limitation,
sweeping of the parking lot, and maintenance and watering of exterior
landscaping); provided, however, the parties hereto agree that during months
five through twelve of the Term, the 51.13% referred to immediately above shall
be increased to 67.42%.
12. Common Area Charges.
12.1 Definition. "Common Area Charge" or "Common Area Charges" as
used in this Lease shall mean and include all items identified in other
paragraphs of this Lease as a Common Area Charge and the reasonable and
necessary costs paid or incurred by Landlord for the operation and routine
maintenance and repair of the Project, which costs shall include, without
limitation: the cost of Services and utilities supplied to the Project generally
(to the extent the same are not separately charged or metered to tenants of the
buildings located on the Land); maintenance and repair of fire protection, storm
drainage and sanitary sewer systems; property and liability insurance carried by
Landlord pursuant to Paragraph 8 above covering the Premises and other building
or improvements located in the Project and the Land.
Notwithstanding anything to the contrary contained in this Lease, within
ninety (90) days after receipt by Tenant of Landlord's statement of Common Area
Charges prepared pursuant to Paragraph 12.2 hereof for any partial annual
period, Tenant or its authorized representative shall have the right to inspect
the books of Landlord during the business hours of Landlord at Landlord's office
within the Project (or within ten miles of the Project) or, at Landlord's
option, such other location as Landlord reasonably may specify (but not further
than ten miles from the Project), for the purpose of verifying the information
contained in the statement. Unless Tenant
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asserts specific errors within ninety (90) days after receipt of the statement,
the statement shall be deemed correct as between Landlord and Tenant.
12.2 Payment of Common Area Charges by Tenant. Prior to the
Commencement Date, Landlord shall deliver to Tenant an estimate of Common Area
Charges for the Lease Term. Tenant's payment of Common Area Charges shall be
based upon Landlord's estimate of Common Area Charges and shall be payable in
equal monthly installments in advance on the first day of each calendar month
commencing on the date specified in Paragraph 1.6 and continuing throughout the
Lease Term. Tenant shall pay to Landlord, as Additional Rent and without
deduction or offset, an amount equal to Tenant's percentage share (stated in
Paragraph 1.10 above) of the Common Area Charges.
Landlord shall furnish Tenant a statement within thirty (30) days after
Lease Termination, showing the actual Common Area Charges for the period to
which Landlord's estimate pertains and shall concurrently, as appropriate, xxxx
Tenant for the balance due (payable within thirty (30) days of Landlord's
written demand) or refund to Tenant the excess previously paid.
Alternatively, Common Area Charges actually incurred or paid by Landlord
but not theretofore billed to Tenant, as invoiced by Landlord shall be payable
by Tenant within thirty (30) days after receipt of Landlord's invoice, but not
more often than once each calendar month.
12.3 Exclusions From Common Area Charges. Notwithstanding anything
to the contrary contained in this Lease, in no event shall Tenant have any
obligation to perform, to pay directly, or to reimburse Landlord for, all or any
portion of the following repairs, maintenance, improvements, replacements,
premiums, claims, losses, fees, commissions, charges, disbursements, attorneys'
fees, experts' fees, costs and expenses (collectively, "Costs").
(a) Capital Improvements and Replacements. Costs of a
capital nature, including, without limitation, capital improvements, capital
replacements, capital repairs, capital equipment and capital tools, all as
determined in accordance with generally accepted accounting principles,
consistently applied.
(b) Losses Caused by Others and Construction Defects. Costs
occasioned by the act, omission or violation of any law, ordinance, statute,
rule or regulation ("Laws") by Landlord, any other occupant of the Project, or
their respective agents, employees or contractors, or Costs to correct any
construction defect in the Premises or Project or Common Areas in accordance
with Laws and private restrictions applicable at the time of construction
thereof.
(c) Condemnation and Insurance Costs. Costs occasioned by
the exercise of the power of eminent domain, or increases in insurance Costs
caused by the activities of other occupant(s) of the Project.
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(d) Reimbursable Expenses. Costs for which Landlord has a
right of reimbursement from others, or Costs which Tenant pays directly to a
third person.
(e) Utilities or Services. Costs (i) arising from the
disproportionate use of any utility or service consumed by Landlord or any third
party in connection with the use of any portion of the Project other than the
Premises; or (ii) associated with utilities and services of a type not provided
to Tenant.
(f) Leasing Expenses. Costs incurred in connection with
negotiations or disputes with other occupant(s) of the Project, and Costs
arising from the violation by Landlord or any occupant of the Project (other
than Tenant) of the terms and conditions of any lease or other agreement.
(g) Reserves. Depreciation, amortization or other expense
reserves.
(h) Mortgages. Interest, charges and fees incurred on debt,
payments or mortgages and rent under ground leases.
(i) Hazardous Materials. Costs incurred to investigate the
presence of any Hazardous Material, Costs to respond to any claim of Hazardous
Material contamination or damage, Costs to remove any Hazardous Material from
the Premises, Common Area or Project or to remediate any Hazardous Material
contamination, and any judgments or other Costs incurred in connection with any
Hazardous Material exposure or release.
(j) Management. Wages, salaries, compensation and labor
burden for any employee not stationed on the Project on a full-time basis
(unless prorated based on the time spent on the Project), and/or any fee, profit
or compensation retained by or paid to Landlord or its affiliates for management
and administration of the Project.
(k) Repairs of Damage. Damage and repairs of a capital
nature to the Common Areas attributable to condemnation, fire or other casualty,
and damage and repairs of a non-capital nature to the Common Areas attributable
to condemnation, fire or other casualty to the extent of awards or insurance
proceeds received by Landlord.
(l) Landlord's Negligence. Costs of repairs necessitated by
the negligence or willful misconduct of Landlord or Landlord's employees,
contractors or agents.
(m) Executive Salaries. Executive salaries or salaries of
service personnel (including the Building superintendent) to the extent that
such service-personnel perform services other than in connection with the
operation and routine repair or maintenance of the Project or Common Area.
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13. Alterations and Improvements.
13.1 In General. Tenant shall not make any alterations,
improvements or additions (collectively "Alterations") in, on, about or to the
Premises, or any part thereof. The preceding to the contrary notwithstanding,
Tenant shall be permitted to remove its trade fixtures, personal property and
equipment from the Premises prior to the expiration or earlier termination of
the Lease Term.
13.2 Landlord's Improvements. All fixtures, improvements or
equipment which are installed, constructed on or attached to the Premises,
Building or Common Area by Landlord shall be a part of the realty and belong to
Landlord.
14. Default and Remedies.
14.1 Events of Default. The term "Default by Tenant" as used in
this Lease shall mean the occurrence of any of the following events:
(a) Tenant's failure to pay when due any Rentals, where such
failure continues for ten (10) days after written notice from Landlord;
(b) Commencement and continuation for at least sixty (60)
days of any case, action or proceeding by, against or concerning Tenant under
any federal or state bankruptcy, insolvency or other debtor's relief law,
including without limitation, (i) a case under Title 11 of the United States
Code concerning Tenant, whether under Chapter 7, 11, or 13 of such Title or
under any other Chapter, or (ii) a case, action or proceeding seeking Tenant's
financial reorganization or an arrangement with any of Tenant's creditors;
(c) Voluntary or involuntary appointment of a receiver,
trustee, keeper or other person who takes possession for more than sixty (60)
days of substantially all of Tenant's assets or of any asset used in Tenant's
business on the Premises, as a result of Tenant's insolvency;
(d) Levy of a writ of attachment or execution on Tenant's
interest under this Lease, if such writ continues for a period of thirty (30)
days; or
(e) Breach by Tenant of any term, covenant, condition,
warranty, or other provision contained in this Lease where such breach is not
cured within thirty (30) days after receipt of written notice of such breach by
Landlord to Tenant (or if such breach cannot be reasonably cured within such
thirty (30) days, then if Tenant does not commence to cure the breach within the
thirty (30) day period or does not diligently prosecute the cure to completion).
14.2 Remedies. Upon any Default by Tenant and the expiration of any
applicable grace period, Landlord shall have the
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following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:
14.2.1 Termination. Upon any Default by Tenant, Landlord shall have
the right (but not the obligation) to give written notice to Tenant of such
default and terminate this Lease and Tenant's right to possession of the
Premises. Upon termination of this Lease and Tenant's right to possession of the
Premises, Landlord shall have the right to recover from Tenant:
(a) The worth at the time of award of the unpaid Rentals
which had been earned at the time of termination;
(b) The worth at the time of award of the amount by which
the Rentals which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided;
(c) The worth at the time of award (computed by discounting
at the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent) of the amount by which the Rentals for the balance of
the Lease Term after the time of award exceed the amount of such rental loss
that Tenant proves could be reasonably avoided;
(d) Any other amounts necessary to compensate Landlord for
all detriment proximately caused by the Default by Tenant or which in the
ordinary course of events would likely result.
(e) The "worth at the time of award" of the amounts referred
to in subparagraphs (a) and (b) of this Paragraph 14.2.1 is computed by allowing
interest at an annual rate equal to two percent above the prime rate established
by Bank of America, NT&SA, San Francisco Main Branch.
14.2.2 Continuance of Lease. Upon any Default by Tenant and
unless and until Landlord elects to terminate this Lease pursuant to Paragraph
14.2.1 above, this Lease shall continue in effect after the Default by Tenant
and Landlord may enforce all its rights and remedies under this Lease, including
without limitation, the right to recover payment of Rentals as they become due.
Neither efforts by Landlord to mitigate damages caused by a Default by Tenant
nor the acceptance of any Rentals shall constitute a waiver by Landlord of any
of Landlord's rights or remedies, including the rights and remedies specified in
Paragraph 14.2.1 above.
15. Damage or Destruction.
15.1 Right to Terminate Lease. If, due to damage or destruction,
the Premises are rendered untenable or unfit for Tenant's use of the same
existing immediately prior to such damage or destruction, then either party
hereto may terminate this Lease by delivery of written notice to the other
party. In the event such notice of termination is delivered by either party to
the other, this Lease shall terminate thirty (30) days following the date such
termination
-17-
notice is received by the recipient party, but in no event shall this Lease
terminate later than the expiration date of this Lease. The Rentals shall be
proportionately reduced during the period following the event of damage or
destruction until the date on which Tenant surrenders the Premises, based upon
the extent to which the damage or destruction interferes with Tenant's business
conducted in the Premises, as reasonably determined by Tenant.
15.2 Abatement of Rentals. Notwithstanding any language to the
contrary in this Lease, if the Premises are to be rebuilt or restored by
Landlord following damage or destruction of the same, then the then-current
Rentals shall be proportionately reduced from the date of such damage or
destruction until the Premises are fully restored, based upon the extent to
which the damage or destruction and/or making of repairs interferes with
Tenant's business conducted in the Premises, as reasonably determined by Tenant.
15.3 Liability for Personal Property. Except for the negligent acts
or willful misconduct Landlord or that of its agents, employees, contractors or
invitees, in no event shall Landlord be required to repair or restore any injury
or damage to any trade fixtures, equipment, merchandise, furniture, or any other
property installed by Tenant or at the expense of Tenant.
16. Condemnation.
16.1 Definition of Terms. For the purposes of this Lease, the term:
(a) "Taking" means a taking of the Premises, Common Area or Project or damage
related to the exercise of the power of eminent domain and includes, without
limitation, a voluntary conveyance, in lieu of court proceedings, to any agency,
authority, public utility, person or corporate entity empowered to condemn
property; (b) "Total Taking" means the Taking of the entire Premises or so much
of the Premises or Common Area as to prevent or substantially impair the use
thereof by Tenant for the uses herein specified; provided, however, that in no
event shall the Taking of less than ten percent (10%) of the Premises be
considered a Total Taking; (c) "Partial Taking" means the Taking of only a
portion of the Premises or Common Area which does not constitute a Total Taking;
(d) "Date of Taking" means the date upon which the title to the Premises or
Common Area or a portion thereof, passes to and vests in the condemnor or the
effective date of any order for possession if issued prior to the date title
vests in the condemnor; and (e) "Award" means the amount of any award made,
consideration paid, or damages ordered as a result of a Taking.
16.2 Rights. The parties agree that in the event of a Taking all
rights between them or in and to an Award shall be as set forth herein.
16.3 Total Taking. In the event of a Total Taking during the Lease
Term: (a) the rights of Tenant under this Lease and the leasehold estate of
Tenant in and to the Premises shall cease and terminate as of the Date of
Taking; (b) Landlord shall refund to Tenant any prepaid Rent; (c) Tenant shall
pay Landlord any Rentals due Landlord under the Lease, prorated as of the Date
of Taking; (d) to the extent the
-18-
Award is not payable to the beneficiary or mortgagee of a deed of trust or
mortgage affecting the Premises, Tenant shall receive from the Award those
portions of the Award attributable to trade fixtures and personal property; and
(e) the remainder of the Award shall be paid to and be the property of Landlord.
Nothing contained in this Paragraph 16.3 shall be deemed to deny Tenant its
right to recover awards made by the condemning authority for moving costs,
relocation costs, and costs attributable to goodwill.
16.4 Partial Taking. In the event of a Partial Taking during the
Lease Term: (a) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking; (b) from and after the Date of Taking the Rent shall be
an amount equal to the product obtained by multiplying the then current Rent by
the quotient obtained by dividing the square footage of the Premises immediately
after the Taking by the total square footage of the Premises immediately prior
to the Taking; (c) to the extent the Award is not payable to the beneficiary or
mortgagee of a deed of trust or mortgage affecting the Premises, Tenant shall
receive from the Award the portions of the Award attributable to trade fixtures
and personal property of Tenant; and (d) the remainder of the Award shall be
paid to and be the property of Landlord. Each party waives the provisions of
California Code of Civil Procedure Section 1265.130 allowing either party to
petition the Superior Court to terminate this Lease in the event of a Partial
Taking. Nothing contained in this Paragraph 16.4 shall be deemed to deny Tenant
its right to recover awards made by the condemning authority for moving costs,
relocation costs, and costs attributable to goodwill.
17. Liens.
17.1 Premises to Be Free of Liens. Tenant shall pay for all labor
and services performed for, and all materials used by or furnished during the
Lease Term to Tenant, Tenant's agents, or any contractor employed by Tenant with
respect to the Premises. Landlord shall have the right, at all times, to post
and keep posted on the Premises any notices permitted or required by law, or
which Landlord shall deem proper for the protection of Landlord and the
Premises, Common Area, Project and Land, and any other party having an interest
therein, from mechanics' and materialmen's liens, including without limitation a
notice of nonresponsibility.
17.2 Notice of Lien; Bond. Should any claims of lien be filed
against, or any action be commenced affecting the Premises, Tenant's interest in
the Premises or any other portion of the Project, purporting to be for labor or
materials furnished to Tenant during the Lease Term, Tenant shall give Landlord
notice of such lien or action within ten (10) days after Tenant receives notice
of the filing of the lien or the commencement of the action. In the event that
Tenant shall not, within thirty (30) days following the imposition of any such
lien, cause such lien to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to cause the same to be released by
such means as Landlord shall deem proper, including payment of the claim giving
rise to such lien or posting of a proper bond. All such sums reasonably paid by
Landlord and all expenses reasonably incurred by Landlord in connection
therewith, including attorneys' fees and costs, shall be payable to
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Landlord by Tenant as Additional Rent within thirty (30) days following Tenant's
receipt of a written statement or invoice and evidence of payment by Landlord.
18. Landlord's Right of Access to Premises. Landlord reserves and shall
have the right and Tenant and Tenant's agents shall permit Landlord and
Landlord's agents to enter the Premises at any reasonable time during normal
business hours (or at any time in the event of an emergency) and subject to any
security measures of Tenant that are applied to visitors to the Premises on a
non-discriminatory basis for the purpose of (i) inspecting the Premises, (ii)
posting notices of nonresponsibility, (iii) placing upon the Premises at any
time "For Sale" signs, (iv) placing on the Premises ordinary "For Lease" signs,
(v) protecting the Premises in the event of an emergency and (vii) exhibiting
the Premises to prospective purchasers, tenants or lenders at any reasonable
time. In the event of an emergency, Landlord shall have the right to use any and
all means which Landlord reasonably may deem proper to gain access to the
Premises. Notwithstanding anything to the contrary contained in this Lease,
Landlord and Landlord's agents, except in the case of emergency, shall provide
Tenant with twenty-four (24) hours' notice prior to entry of the Premises. Any
entry by Landlord and Landlord's agents shall not impair Tenant's operations
more than reasonably necessary, and Tenant shall have the right to have an
employee accompany Landlord at all times that Landlord is present on the
Premises.
19. Lender Requirements.
19.1 Subordination. Subject to Tenant's receipt of an appropriate
non-disturbance agreement(s) as set forth below, this Lease, at Landlord's
option, shall be subject and subordinate to the lien of any mortgages or deeds
of trust (including all advances thereunder, renewals, replacements,
modifications, supplements, consolidations, and extensions thereof) in any
amount(s) whatsoever now or hereafter placed on or against or affecting the
Premises, Common Area, Project or Land, or Landlord's interest or estate
therein. If any mortgagee or beneficiary shall elect to have this Lease prior to
the lien of its mortgage or deed of trust, and shall give written notice thereof
to Tenant, this Lease shall be deemed prior to such mortgage or deed of trust,
whether this Lease is dated prior or subsequent to the date of such mortgage or
deed of trust or the date of the recording thereof.
19.2 Subordination Agreements. Tenant shall execute and deliver
such further instruments evidencing subordination of this Lease to the lien of
any mortgages or deeds of trust affecting the Premises, Common Area, Project or
Land as may be required by Landlord within twenty (20) days following Landlord's
request therefor; provided that Tenant's subordination of this Lease shall be
subject to Tenant obtaining a commercially reasonable non-disturbance agreement
from the mortgagee or beneficiary under such mortgage or deed of trust agreeing
in writing that Tenant's possession of the Premises, and this Lease, shall not
be terminated, disturbed or modified in any way so long as Tenant is not in
default under this Lease beyond any applicable cure or grace period.
19.3 Estoppel Certificates. Tenant shall, within twenty (20) days
following reasonable request by Landlord therefor, execute and deliver to
Landlord any and all estoppel
-20-
certificates reasonably requested by Landlord in connection with the sale or
financing of the Premises, Project or Land. Landlord may require that Tenant in
any estoppel certificate shall (i) certify, if true, that this Lease is
unmodified and in full force and effect (or, if modified, state the nature of
such modification and certify that this Lease, as so modified, is in full force
and effect) and has not been assigned, (ii) certify the date to which Rentals
are paid in advance, if any, (iii) acknowledge that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specify
such defaults if claimed, (iv) evidence the status of this Lease as may be
required either by a lender making a loan to Landlord to be secured by a deed of
trust or mortgage covering the Premises, Project or Land or a purchaser of the
Premises or Project, or applicable portion thereof, from Landlord, and (v)
certify, if true, such other matters relating to the Lease and/or Premises as
may be reasonably requested by a lender making a loan to Landlord or a purchaser
of the Premises or Project, or applicable portion thereof, from Landlord.
20. Holding Over. This Lease shall terminate without further notice at
the expiration of the Lease Term. Any holding over after Lease Termination shall
be deemed to be a month to month tenancy, subject to all the conditions,
provisions and obligations of this Lease insofar as applicable to a month to
month tenancy. The Rent required to be paid during any hold over period shall
remain the same as the Rent payable under the Lease Term prior to such holding
over, and Tenant shall also pay all Additional Rent payable hereunder. Either
party may terminate the month-to-month tenancy of the holdover period by
providing thirty (30) days prior written notice of such termination to the other
party.
21. Notices. Any notice required or desired to be given under this Lease
shall be in writing, and all notices shall be given by (i) personal delivery,
(ii) receipted messenger or courier service, (iii) receipted overnight delivery
(including Federal Express), (iv) electronic facsimile transmission or (v)
United States mail (postage prepaid), registered or certified, return receipt
requested. Any notice given pursuant to this Paragraph 21 shall be deemed to
have been delivered (a) if delivery is made or fax transmission completed before
5:00 p.m. recipient's local time on a business day, or if tendered for delivery
between 9:00 a.m. and 5:00 p.m. recipient's local time on a business day and
refused, then on the date of such actual or attempted delivery or completed
transmission, as evidenced by postal, messenger, courier or overnight delivery
service receipt or by the transmission and confirmed answer back log sheet
generated by the sending fax machine; and, otherwise (b) on the business day
next following the date of actual delivery or completed fax transmission;
provided, however, that any notice by fax shall be confirmed within three
business days after transmission by duplicate notice delivered as otherwise
provided herein. At the date of execution of this Lease, the addresses of
Landlord and Tenant are set forth in Paragraph 1.12 above.
22. Attorneys' Fees. In the event either party hereto shall bring any
action or legal proceeding for damages for an alleged breach of any provision of
this Lease, to recover Rentals, to enforce an indemnity, defense or hold
harmless obligation, to terminate the tenancy of the Premises, or to enforce,
protect, interpret, or establish any term, condition, or covenant of this Lease
or right or remedy of either party, the prevailing party shall be entitled to
recover, as a part of such action or proceeding, reasonable
-21-
attorneys' fees and court costs, including reasonable attorneys' fees and costs
for appeal, as may be fixed by the court or jury.
23. Assignment and Subletting.Tenant shall not assign, sublease,
transfer, mortgage or encumber all or any part of Tenant's interest in this
Lease or in the Premises or any part thereof, without the prior written consent
of Landlord in each instance (which consent shall not be unreasonably withheld,
conditioned or delayed). Notwithstanding anything to the contrary contained in
this Lease, Tenant, without Landlord's prior written consent (but with written
notice to Landlord), may sublet the Premises or assign this Lease to (i) a
subsidiary, affiliate, division or corporation which is controlled by, controls
or is under common control with Tenant; (ii) a successor corporation related to
Tenant by merger, consolidation, non-bankruptcy reorganization or government
action; or (iii) a purchaser of all or substantially all of Tenant's assets or
the stock of Tenant (each, a "Permitted Assignee"). Notwithstanding that a
Transfer is made to a Permitted Assignee, Tenant shall not be released from any
of its obligations under this Lease.
24. Successors. Subject to the provisions of Paragraph 23 above, the
covenants, conditions, and agreements contained in this Lease shall be binding
on the parties hereto and on their respective heirs, successors and assigns.
25. Exhibits. All exhibits attached to this Lease shall be deemed to be
incorporated herein by the individual reference to each such exhibit, and all
such exhibits shall be deemed to be a part of this Lease as though set forth in
full in the body of the Lease.
26. General.
26.1 Captions and Headings. The captions and paragraph headings
used in this Lease are for convenience of reference only. They shall not be
construed to limit or extend the meaning of any part of this Lease, and shall
not be deemed relevant in resolving any question of interpretation or
construction of any paragraph of this Lease.
26.2 Definitions.
(a) Agents. For purposes of this Lease and without otherwise
affecting the definition of the word "agent" or the meaning of an "agency," the
term "agents" shall be deemed to include the agents, employees, successors, and
representatives of the respective party, Tenant or Landlord.
(b) Interpretation of Terms. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. Words
in the neuter gender include the masculine and feminine and words in the
masculine or feminine gender include the neuter.
-22-
26.3 Copies. Any executed copy of this Lease shall be deemed an
original for all purposes.
26.4 Severability. In case any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had not been
contained herein.
26.5 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
26.6 Construction of Lease Provisions. Although printed provisions
of this Lease were prepared by Tenant's counsel, this Lease shall not be
construed either for or against Tenant or Landlord, but shall be construed in
accordance with the general tenor of the language to reach a fair and equitable
result.
27. Interest. Any payment due from Tenant to Landlord, except for Rent
received by Landlord within thirty (30) days after the same is due, shall bear
interest from the date due until paid, at an annual rate equal to the greater
of: ten percent (10%); or five percent (5%) plus the rate established by the
Federal Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the
month immediately preceding the due date, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended.
28. Surrender of Premises. On the last day of the Lease Term or upon the
sooner termination of this Lease, Tenant shall surrender the Premises to
Landlord in the condition existing as of the Commencement Date of this Lease
(reasonable wear and tear, acts of God, casualty, condemnation, and Hazardous
Materials other than those stored, used or disposed of by Tenant, its agents,
employees, contractors or invitees, excepted). Tenant shall remove all of
Tenant's personal property and trade fixtures from the Premises on or before
Lease Termination, except that Tenant shall not remove from the Premises on or
before Lease Termination the Remaining Personal Property (as defined in the
Purchase and Sale Agreement). Landlord acknowledges and agrees that, at the
expiration or earlier termination of this Lease, Tenant shall not be obligated
to surrender to Landlord (and Tenant may remove from the Premises and Land prior
to the expiration or earlier termination of the Lease) the personal property
designated (prior to expiration of the Feasibility Period) for removal by Tenant
pursuant to the terms of the Purchase and Sale Agreement.
29. Signs. During the Lease Term, Tenant shall not install or erect any
signs on or in the Premises, in the Common Area or on the Land.
30. Entire Agreement. This Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and understandings,
whether written or oral, between Landlord and its agents and Tenant and its
-23-
agents with respect to this Lease. This Lease constitutes the entire agreement
between the parties hereto with respect to this Lease and Tenant's letting of
the Premises and no addition to, or modification of, any term or provision of
this Lease shall be effective until and unless set forth in a written instrument
signed by both Landlord and Tenant.
31. Quiet Enjoyment. Landlord covenants and agrees with Tenant that upon
Tenant paying Rentals and performing its covenants and conditions under the
Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the
Premises for the Lease Term, subject to the terms of this Lease. Any purchaser
upon any foreclosure or exercise of the power of sale under any mortgage or deed
of trust made by Landlord and covering the Premises to whom Tenant attorns shall
be bound by the terms of this Paragraph 31.
32. Authority. The undersigned parties hereby warrant that they have
proper authority and are empowered to execute this Lease on behalf of the
Landlord and Tenant, respectively.
33. Effectiveness of Lease. This Lease shall be effective if, and only
if, escrow closes under the Purchase and Sale Agreement referred to in Paragraph
1.6 above.
(balance of page left intentionally blank; signatures on following page)
-24-
IN WITNESS WHEREOF, the parties have executed this Lease effective as of
the date set forth below.
LANDLORD: TENANT:
MICRO LINEAR CORPORATION, WILLOW XXXX INVESTMENTS, LLC,
a Delaware corporation a California limited liability company
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxx Xxxxxx
----------------------------- --------------------------------
Its: CFO Son X. Xxxxxx
Its: Manager and Member
By: ____________________________ By: /s/ Xxx Xxxxxx
---------------------------------
Hai X. Xxxxxx
Its: ____________________________ Its: Manager and Member
-25-
EXHIBIT A TO LEASE
SITE PLAN
-26-
[PROPOSED PARCEL MAP]
EXHIBIT A
EXHIBIT B
PLAN SHOWING PORTION OF PREMISES TO BE SURRENDERED CROSS-HATCHED
[to be agreed upon by Landlord and Tenant]
-27-
EXHIBIT C
PLAN SHOWING REMAINING PREMISES AS OF FIFTH MONTH OF TERM CROSS-HATCHED
[to be agreed upon by Landlord and Tenant]
-28-
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, XX)
This First Amendment to Purchase and Sale Agreement ("First Amendment") is
made effective as of this seventh (7th) day of May, 2004, by and between MICRO
LINEAR CORPORATION, a Delaware corporation ("Seller") and WILLOW XXXX
INVESTMENTS, LLC, or its permitted assignee or permitted nominee ("Buyer").
Recitals
A. Seller and Buyer have entered into a Purchase and Sale Agreement
dated April ___, 2004 (the "Purchase Agreement"), pursuant to which Seller
agreed to sell to Buyer, and Buyer agreed to purchase from Seller, that certain
Property described in the Purchase Agreement which includes, in part, that
certain real property, consisting of approximately six and fifty-six hundredths
(6.56) acres, more or less, located at 2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx,
Xxxxxxxxxx (APN 244-15-015), and more particularly described on Exhibit A
attached to the Purchase Agreement, together with all improvements located
thereon, including without limitation, two single-story office/R&D buildings
totaling approximately ninety-three thousand, two hundred twenty-four (93,224)
square feet, more or less, as more particularly described in the Purchase
Agreement.
B. Seller and Buyer now desire to modify or amend the Purchase
Agreement to provide for an extension of the expiration of the Feasibility
Period as more particularly described below and to address certain matters
related to Buyer recording a parcel map with respect to the Land simultaneously
with (but immediately following) the close of escrow under the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The Recitals set forth above are true and correct and are
incorporated herein by reference.
2. Capitalized Terms. Except as otherwise defined herein, the
capitalized terms set forth in this First Amendment shall have the meanings
ascribed to them in the Purchase Agreement.
3. Extension of Feasibility Period. The expiration of the Feasibility
Period is hereby extended to 5:00 p.m. Pacific Time on May 28, 2004.
4. Parcel Map. The parties hereto acknowledge that Buyer desires to
record a parcel map, prepared by J.M.H Xxxxx, Inc. (the "Parcel Map"), with
respect to the Land simultaneously with, but immediately following, the close of
escrow under the Purchase Agreement. Seller has no objection to Buyer recording
such Parcel Map immediately following the recording of the Grant Deed to be
executed by Seller in favor of Buyer at the close of escrow. Seller agrees to
reasonably cooperate with Buyer, at no cost or liability to Seller, in Buyer's
efforts to record the Parcel Map
-1-
concurrently with, but immediately following, the close of escrow under the
Purchase Agreement. Notwithstanding the foregoing, Seller's agreement to
reasonably cooperate in the recording of the Parcel Map shall not extend the
Closing Date under the Purchase Agreement. All costs and expenses incurred in
connection with the recording of the Parcel Map as provided above shall be borne
one hundred percent (100%) by Buyer. Buyer shall be responsible for paying all
real property taxes (or the posting of a tax bond) required to be paid (or
posted) in connection with the recordation of the Parcel Map.
5. Conflicts. Except as modified above, the terms and conditions of the
Purchase Agreement shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms of this First Amendment
and the terms of the Purchase Agreement, the terms of this First Amendment shall
control.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date and year first written above.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxxxxxxxx
----------------------------------
Name: Xxx Xxxxxxxxxx
Its: President/CEO
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a limited liability company
By: /s/ Xxx Xxxxxx
----------------------------------
Name: Xxx Xxxxxx
Its: President
-2-
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
(2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, XX)
This Second Amendment to Purchase and Sale Agreement ("Second Amendment")
is made effective as of this twenty-eighth (28th) day of May, 2004, by and
between MICRO LINEAR CORPORATION, a Delaware corporation ("Seller") and WILLOW
XXXX INVESTMENTS, LLC, or its permitted assignee or permitted nominee ("Buyer").
Recitals
A. Seller and Buyer have entered into a Purchase and Sale Agreement
dated April 15, 2004, as amended by that certain First Amendment to Purchase and
Sale Agreement dated May 7, 2004 (collectively, the "Purchase Agreement"),
pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to purchase
from Seller, that certain Property described in the Purchase Agreement which
includes, in part, that certain real property, consisting of approximately six
and fifty-six hundredths (6.56) acres, more or less, located at 2050 and 0000
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx (APN 244-15-015), and more particularly
described on Exhibit A attached to the Purchase Agreement, together with all
improvements located thereon, including without limitation, two single-story
office/R&D buildings totaling approximately ninety-three thousand, two hundred
twenty-four (93,224) square feet, more or less, as more particularly described
in the Purchase Agreement.
B. Seller and Buyer now desire to modify or amend the Purchase
Agreement to provide for an extension of the expiration of the Feasibility
Period as more particularly described below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The Recitals set forth above are true and correct and are
incorporated herein by reference.
2. Capitalized Terms. Except as otherwise defined herein, the
capitalized terms set forth in this Second Amendment shall have the meanings
ascribed to them in the Purchase Agreement.
3. Extension of Feasibility Period. The expiration of the Feasibility
Period is hereby extended to 5:00 p.m. Pacific Time on June 28, 2004.
4. Conflicts. Except as modified above, the terms and conditions of the
Purchase Agreement shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms of this Second
Amendment and the terms of the Purchase Agreement, the terms of this Second
Amendment shall control.
(signature page follows on next page)
-1-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date and year first written above.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxxxxxxxx
----------------------------------
Name: Xxx Xxxxxxxxxx
Its: President/CEO
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a limited liability company
By: /s/ Xxx Xxxxxx
-----------------------------------
Name: Xxx Xxxxxx
Its: President
-2-
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
(2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, CA)
This Third Amendment to Purchase and Sale Agreement ("Third Amendment") is
made effective as of this twenty fourth (24th) day of June, 2004, by and between
MICRO LINEAR CORPORATION, a Delaware corporation ("Seller") and WILLOW XXXX
INVESTMENTS, LLC, or its permitted assignee or permitted nominee ("Buyer").
Recitals
A. Seller and Buyer have entered into a Purchase and Sale Agreement
dated April 15, 2004, as amended by that certain First Amendment to Purchase and
Sale Agreement dated May 7, 2004 and that certain Second Amendment to Purchase
and Sale Agreement dated May 28, 2004 (collectively, the "Purchase Agreement"),
pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to purchase
from Seller, that certain Property described in the Purchase Agreement which
includes, in part, that certain real property, consisting of approximately six
and fifty-six hundredths (6.56) acres, more or less, located at 2050 and 0000
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx (APN 244-15-015), and more particularly
described on Exhibit A attached to the Purchase Agreement, together with all
improvements located thereon, including without limitation, two single-story
office/R&D buildings totaling approximately ninety-three thousand, two hundred
twenty-four (93,224) square feet, more or less, as more particularly described
in the Purchase Agreement.
B. Seller and Buyer now desire to modify or amend the Purchase
Agreement to provide for an extension of the expiration of the Feasibility
Period as more particularly described below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The Recitals set forth above are true and correct and are
incorporated herein by reference.
2. Capitalized Terms. Except as otherwise defined herein, the
capitalized terms set forth in this Third Amendment shall have the meanings
ascribed to them in the Purchase Agreement.
3. Extension OF Feasibility Period and Extension of Close of Escrow.
The expiration of the Feasibility Period is hereby extended to 5:00 p.m. Pacific
Time on, July 16, 2004 and the Close of Escrow is hereby extended to 5:00 p.m.
on, July 23, 2004.
4. Seller's Agreement to Remove Potential Environmental Hazards. Seller
agrees to complete the following work recommended in the Xxxxxx Associates Phase
1 Environmental Site Assessment ("Xxxxxx Report") attached as Exhibit A to this
Third Amendment
a) Seller will remove acid waster water piping in the floor trench,
the interior exhaust
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hoods, ductwork and fans located in 0000 Xxxxxxxxx Xxxxx as recommended
by Section 5.7 of the Xxxxxx Report and in accordance with the
standards of removal indicated in the Xxxxxx Report.
b) Seller agrees to remove the ULTRA Fab machine, Emergency Shower and
chemical sink located in 0000 Xxxxxxxxx Xxxxx in accordance with the
standards of removal indicated in the Xxxxxx Report.
c) Seller agrees to remove all 55 gallon drums that contain hazardous
chemicals, all one (1) gallon containers of flammable material at the
hooded lab and other containers, if any are present, that contain
hazardous chemicals, located at 0000 Xxxxxxxxx xxxxx. The containers
will be disposed of by a qualified contractor in accordance with the
proper environmental requirements.
d) Seller agrees to close all seven ground water monitoring xxxxx
("Xxxxx") in accordance with the requirements of the Santa Xxxxx County
Water District and further agrees to obtain all necessary permits
required for closure of the Xxxxx.
5. Buyer's Agreement to Take All Additional Actions Necessary to
Satisfy Environmental Financing Contingency Related to Xxxxx. Buyer agrees to
take any and all necessary additional actions required by Bridge Bank to remove
the Financing Contingency relating to the Xxxxx, other than the closure of the
Xxxxx, which Seller has agreed to perform in Paragraph 4 (d) to this Amendment.
6. Seller's Agreement to Remove Personal Property From Buildings Seller
Agrees to remove all personal property from all areas of 0000 Xxxxxxxxx Xxxxx,
except for the security system and any other personal property which the parties
agree to have remain with the building, by the Closing Date and all personal
property from 0000 Xxxxxxxxx Xxxxx at the conclusion of the leaseback period,
except for personal property that the parties agree to have remain with the
building. Personal property does not include fixtures that are bolted to the
building walls and other permanent improvements that have been made to the
buildings.
7. Additional Credits to Buyer for HVAC Repairs and Replacement Seller
Agrees To provide Buyer $60,000 in additional credits for the repair and/or
replacement HVAC units as recommended in the Cal-Air inspection report that was
commissioned by Seller ("HVAC Report"). The total estimate for the repair work
was $177,500 and the credit is based on Seller paying for approximately one
third of the HVAC repair and/or replacement costs. The $60,000 will be credited
to Buyer at the Closing.
8. No Additional Buyer Credits Seller has agreed to provide Buyer with
a $200,000 credit at closing as provided for by Paragraph 4.3 of the April 15,
2004 Purchase and Sale Agreement and up to $60,000 in additional credits for the
repair and replacement of HVAC units as provided for in Paragraph 7 above. The
parties acknowledge that the $200,000 credit is intended for costs anticipated
to be incurred by Buyer, subsequent to the Closing Date, with respect to
demolition and other costs as detailed in the XxXxxxxx Construction proposal
dated June 8, 2004 and attached as Exhibit B to this Third Amendment. In
addition the parties acknowledge that they have entered into
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an as is sale of the buildings and that there will be no additional Buyer
credits, other than the credits referred to above, for any repairs, maintenance,
refurbishment or replacement of the building, the building improvements,
building fixtures and/or any personal property which Buyer and Seller agree to
have remain with the buildings upon their sale to Buyer.
9. Conflicts. Except as modified above, the terms and conditions of the
Purchase Agreement shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms of this Third Amendment
and the terms of the Purchase Agreement, the terms of this Third Amendment
shall control.
10. Leaseback Provision Article 16, per the Purchase and Sale Agreement
dated April 2004 shall be modified as follows: Seller shall be required to lease
back the entire building at 0000 Xxxxxxxxx Xxxxx, consisting of approximately
45,560 square feet for no less than one (1) year. All other terms of the
paragraph shall remain in full force and affect.
(signature page follows on next page)
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date and year first written above.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxxxx
Its: President & CEO
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a limited liability company
By: /s/ Xxx Xxxxxx
-------------------------------
Name: Xxx Xxxxxx
Its: President
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FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
(2050 and 0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, XX)
This Fourth Amendment to Purchase and Sale Agreement ("Fourth Amendment")
is made effective as of this twentieth (20th) day of July, 2004, by and between
MICRO LINEAR CORPORATION, a Delaware corporation ("Seller") and WILLOW XXXX
INVESTMENTS, LLC, or its permitted assignee or permitted nominee ("Buyer").
Recitals
A. Seller and Buyer have entered into a Purchase and Sale Agreement
dated April 15, 2004, as amended by that certain First Amendment to Purchase and
Sale Agreement dated May 7, 2004, that certain Second Amendment to Purchase and
Sale Agreement dated May 28, 2004 and that certain Third Amendment to Purchase
and Sale Agreement dated June 24, 2004 (collectively, the "Purchase Agreement"),
pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to purchase
from Seller, that certain Property described in the Purchase Agreement which
includes, in part, that certain real property, consisting of approximately six
and fifty-six hundredths (6.56) acres, more or less, located at 2050 and 0000
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx (APN 244-15-015), and more particularly
described on Exhibit A attached to the Purchase Agreement, together with all
improvements located thereon, including without limitation, two single-story
office/R&D buildings totaling approximately ninety-three thousand, two hundred
twenty-four (93,224) square feet, more or less, as more particularly described
in the Purchase Agreement.
B. Seller and Buyer now desire to modify or amend the Purchase
Agreement to provide for an extension of the expiration of the Feasibility
Period as more particularly described below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The Recitals set forth above are true and correct and are
incorporated herein by reference.
2. Capitalized Terms. Except as otherwise defined herein, the
capitalized terms set forth in this Third Amendment shall have the meanings
ascribed to them in the Purchase Agreement.
3. Deposit for Lease Back. In the event that Seller's total of cash,
cash equivalents and short-term investments, as reported by Seller on Seller's
quarterly and annual reports filed with the Securities and Exchange Commission
on forms 10Q and 10K respectively, falls below ten (10) million dollars, Seller
agrees to deposit an amount equivalent to the base rent for the remaining lease
back period with Bridge Bank and further agrees to authorize Bridge Bank to
deduct the monthly base rent from Seller's deposit through the posting of
automatic debits payable to Buyer as the monthly base rent becomes due.
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4. Extension of Close of Escrow. By mutual agreement of Buyer and
Seller, Close of Escrow is extended to no later than August 16, 2004. If Escrow
fails to close by August 16, 2004, and said failure was caused by Seller, then
Seller will authorize the immediate return to Buyer of the first and second
deposits, totaling $1.5 million, and the return to Buyer of all unexpended funds
placed into Escrow for the parcel map split. Thereafter, if Seller notifies
Buyer in writing that it is in a position to Close Escrow by August 30, 2004,
then Buyer shall, within one (1) business day, again place in escrow the first
and second deposits, totaling $1.5 million, in addition to the funds necessary
to effect the parcel map split. Buyer and Seller shall then cooperate to
immediately effect the Close of Escrow.
5. Conflicts. Except as modified above, the terms and conditions of the
Purchase Agreement shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms of this Third Amendment
and the terms of the Purchase Agreement, the terms of this Third Amendment shall
control.
(signature page follows on next page)
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IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date and year first written above.
SELLER:
MICRO LINEAR CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name Xxxxxxx Xxxxxxxx,
Its: VP, CFO
BUYER:
WILLOW XXXX INVESTMENTS, LLC,
a limited liability company
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Its: Managing Partner
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