PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT dated as of October _, 1999 (the "EFFECTIVE
DATE"), is by and between NORTHWEST PUBLICATIONS, INC., a Delaware corporation
("SELLER"), and XXXXXXX PROPERTIES, L.P., a California limited partnership
("BUYER").
IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer agree as follows:
1. PROPERTY INCLUDED IN SALE.
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, subject to the terms and conditions set forth
herein, the following:
(a) all of Seller's right, title and interest in and to that
certain unimproved real property consisting of approximately 17.2 gross acres
located on Ridder Park Drive, San Jose, California and more particularly
described in EXHIBIT A attached hereto (the "REAL PROPERTY") and all of Seller's
right, title and interest in the Real Property, rights relating to the
ownership, use, and operation of the Real Property, and all rights, privileges
and easements appurtenant to the Real Property, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Real
Property, as well as all development rights, permits and approvals of any kind
and nature, air rights, water, water rights, riparian rights and water stock
relating to the Real Property and any rights-of-way or other appurtenances used
in connection with the beneficial use and enjoyment of the Real Property and all
of Seller's right, title and interest in and to all roads and alleys adjoining
or servicing the Real Property (except only to the centerline of Ridder Park
Drive) (collectively, the "APPURTENANCES") (the Real Property and Appurtenances
are referred to collectively as the "PROPERTY").
2. PURCHASE PRICE.
The purchase price of the Property is Eighteen Million Dollars
($18,000,000) (the "PURCHASE PRICE"), subject to adjustments as provided in
Paragraphs 2(b) and 7 below.
(a) The Purchase Price shall be payable to Seller as follows:
(i) Within five (5) days after mutual execution of this
Agreement, Buyer shall deposit, in escrow, with First American Title
Guaranty Company, located at 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxx (the "TITLE COMPANY") the
sum of Three Hundred Thousand Dollars ($300,000) as xxxxxxx money (the
"DEPOSIT"). The Title Company shall be instructed by Buyer and Seller
to deposit the Deposit in an interest bearing account with interest
payable to Buyer if the Deposit is returned to Buyer and with interest
payable to Seller if the Deposit is payable to Seller. The Deposit,
together with all interest accrued thereon, shall be credited toward
the Purchase Price. If the sale is not closed due to a default under
this Agreement by Seller or due to nonsatisfaction of a Buyer's
Condition Precedent (defined below), then the Deposit (or a portion
thereof as provided for herein) shall be returned to Buyer, together
with all interest accrued thereon in accordance with the terms set
forth in Paragraphs 2(c) and 4 below; and
(ii) the remainder of the Purchase Price shall be paid to
Seller in immediately available funds at the closing of the purchase
and sale contemplated hereunder (the "CLOSING").
(b) Notwithstanding any provision of this Paragraph 2 to the
contrary, in the event that the Zoning Approvals (as hereinafter defined)
adopted and approved by the City and approved by Buyer and Seller pursuant to
this Agreement provide for the development of an office/research and development
complex containing in excess of two hundred forty thousand (240,000) gross
buildable square feet, the Purchase Price shall be increased by an amount equal
to Fifty Dollars ($50.00) per gross buildable square foot for every gross
buildable square foot in excess of two hundred forty thousand (240,000) gross
buildable square feet.
(c) The Deposit shall be treated as follows:
(i) Upon (a) the expiration of the Due Diligence Period (as
defined below), (b) receipt by Seller on or prior to the expiration of
the Due Diligence Period of Buyer's written notice that Buyer has
elected to proceed with the acquisition of the Property pursuant to
Paragraph 4 below, and (c) agreement by Buyer and Seller on the CC&Rs
(as hereinafter defined) (as provided in Paragraph 4(e) below), then a
portion of the Deposit in an amount equal to Seventy Five Thousand
Dollars ($75,000) (the "PHASE I DEPOSIT") shall become non-refundable
to Buyer except as otherwise expressly provided in this Agreement. The
parties acknowledge that Seller has obtained the City's (as hereinafter
defined) approval of the Lot Line Adjustment (as hereinafter defined)
pursuant to Paragraph 4(d)(i) below. In the event that there is a
Challenge (as hereinafter defined) to the Lot Line Adjustment prior to
the expiration of the Due Diligence Period, Buyer may elect to
terminate this Agreement by delivering written notice to Seller, the
Deposit shall be returned to Buyer, Seller shall pay to Buyer all of
Buyer's Due Diligence Costs, and neither party shall have any further
obligations except as set forth in Paragraphs 10, 13(b) and 13(l). For
purposes of this Agreement, "DUE DILIGENCE COSTS" shall mean any and
all title, escrow, survey, and inspections fees incurred by Buyer and
any other expenses incurred by Buyer in connection with the performance
of its due diligence review of the Property and the entitlements
process, including, without limitation, environmental and engineering
consultants' fees and expenses. In the event Buyer does not elect to
terminate this Agreement and there is a Challenge to the Lot Line
Adjustment prior to the expiration of the Due Diligence Period, Buyer
shall be subject to the provisions of Paragraphs 4(d)(v) and 7(c)
below.
(ii) Upon (a) the satisfaction of all of the conditions set
forth in Subparagraph 2(c)(i) above, (b) the Adoption (as hereinafter
defined) by the City of San Xxxx (the "CITY") of the General Plan
Amendment (the "GPA") as described in the documents attached hereto as
EXHIBIT B and in the Application for Environmental Clearance/Initial
Study for the Lands of Northwest Publications General Plan Amendments
dated September, 1999, (c) the expiration of the General Plan CEQA
Challenge Period (as hereinafter defined) without any Challenges, and
(d) the expiration of the General Plan Challenge Period (as hereinafter
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defined) without any Challenges, then an additional portion of the
Deposit in an amount equal to One Hundred and Twenty Five Thousand
Dollars ($125,000) (the "PHASE II DEPOSIT") shall become non-refundable
to Buyer except as otherwise expressly provided in this Agreement. In
the event the condition contained in Subparagraph 2(c)(ii)(b) does not
occur by March 31, 2000, and the conditions contained in Subparagraph
2(c)(i) above have been satisfied, this Agreement shall terminate, the
Phase I Deposit shall be delivered to Seller, the Phase II Deposit and
the Phase III Deposit shall be returned to Buyer and neither party
shall have any further obligations except as set forth in Paragraphs
10, 13(b) and 13(l). Upon satisfaction of the conditions contained in
Subparagraphs 2(c)(ii)(a), 2(c)(ii)(b), and 2(c)(ii)(c), the Phase II
Deposit shall become non-refundable to Buyer except as otherwise
expressly provided in this Agreement; provided, however, that in the
event the condition contained in Subparagraph 2(c)(ii)(d) is not
satisfied, Buyer may terminate this Agreement by delivering written
notice to Seller within ten (10) days after expiration of the General
Plan Challenge Period, the Phase I Deposit shall be delivered to
Seller, the Phase II Deposit and the Phase III Deposit shall be
returned to Buyer, and neither party shall have any further obligations
except as set forth in Paragraphs 10, 13(b) and 13(l). In the event
Buyer does not elect to terminate this Agreement due to nonsatisfaction
of the condition contained in Paragraph 2(c)(ii)(d), Buyer shall be
subject to the provisions of Paragraphs 4(d)(v) and 7(c) below. For
purposes of this Agreement "ADOPTION OF THE GPA" shall mean thirty (30)
days after the approval of the GPA by the City Council.
(iii) Upon (a) the satisfaction of all of the conditions set
forth in Subparagraph 2(c)(i) above, (b) the satisfaction of all of the
conditions set forth in Subparagraph 2(c)(ii) above, and (c) (1) the
Adoption by the City of the PD Rezoning (as hereinafter defined) and
approval by the City of all Revisions (as hereinafter defined) thereto,
if any, (2) the approval by Seller of the PD Rezoning and all Revisions
thereto, if any, in accordance with Paragraph 4 below, (3) the approval
by Buyer of the PD Rezoning and all Revisions thereto, if any, in
accordance with Paragraph 4 below, (4) the expiration of the PD
Rezoning Challenge Period (as hereinafter defined) without any
Challenges, (5) the Approval by the City of the PD Permit (as
hereinafter defined) and the approval by the City of all Revisions
thereto, if any, (6) the approval by Seller of the PD Permit and all
Revisions thereto, if any, in accordance with Paragraph 4 below, (7)
the approval by Buyer of the PD Permit and all Revisions thereto, if
any, in accordance with Paragraph 4 below, and (8) the expiration of
the PD Permit Challenge Period (as hereinafter defined) without any
Challenges, then the remaining portion of the Deposit in an amount
equal to One Hundred Thousand Dollars ($100,000) (the "PHASE III
DEPOSIT") shall become non-refundable to Buyer except as otherwise
expressly provided in this Agreement. In the event the conditions
contained in Subparagraphs 2(c)(iii)(c)(1) and 2(c)(iii)(c)(5) do not
occur by September 14, 2000, and the conditions contained in
Subparagraphs 2(c)(i) and 2(c)(ii) above have been satisfied, this
Agreement shall terminate, the Phase I Deposit and Phase II Deposit
shall be delivered to Seller, the Phase III Deposit shall be returned
to Buyer and neither party shall have any further obligations except as
set forth in Paragraphs 10, 13(b) and 13(l). Upon satisfaction of the
conditions contained in Subparagraphs 2(c)(iii)(a), 2(c)(iii)(b),
2(c)(iii)(c)(1), (2), (3), (4), (5), (6), and (7), the Phase III
Deposit shall become non-refundable except as otherwise expressly
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provided in this Agreement; provided, however, that in the event the
condition contained in Subparagraph 2(c)(iii)(c)(8) is not satisfied,
Buyer may terminate this Agreement by delivering written notice to
Seller within ten (10) days after expiration of the PD Permit Challenge
Period, the Phase I Deposit and Phase II Deposit shall be delivered to
Seller, the Phase III Deposit shall be returned to Buyer, and neither
party shall have any further obligations except as set forth in
Paragraphs 10, 13(b) and 13(l). In the event Buyer does not elect to
terminate this Agreement due to nonsatisfaction of the condition
contained in Paragraph 2(c)(iii)(c)(8), Buyer shall be subject to the
provisions of Paragraphs 4(d)(v) and 7(c) below. For purposes of this
Agreement "ADOPTION OF THE PD REZONING" shall mean thirty (30) days
after the approval of the PD Rezoning by the City Council. For purposes
of this Agreement, "APPROVAL OF THE PD PERMIT" shall mean ten (10) days
after approval of the PD Permit by the City.
3. TITLE TO THE PROPERTY. At the Closing, Seller shall convey to Buyer
marketable and insurable fee simple title to Seller's interest in the Property
pursuant to a grant deed ("GRANT DEED") in the form of EXHIBIT C attached
hereto, subject only to the Permitted Exceptions (as hereinafter defined) and
free of (a) all monetary encumbrances, other than real property taxes and
assessments not yet delinquent and (b) any encumbrances against title to the
Property arising after the date of this Agreement unless such encumbrances are
approved or waived, in writing, by Buyer ("APPROVED NEW MATTERS") pursuant to
Paragraph 4 below. At the Closing, Title Company shall issue to Buyer an ALTA
Owner's Extended Policy of Title Insurance (Form B, rev. 10/17/70) in the amount
of the Purchase Price, at no more than the Title Company's standard rates,
insuring fee simple title to the Property in Buyer, subject only to the
Permitted Exceptions, real property taxes and assessments not yet delinquent and
Approved New Matters (the "TITLE POLICY"). The Title Policy shall contain such
special endorsements as Buyer may require prior to the expiration of the Due
Diligence Period (the "ENDORSEMENTS"). The Title Company shall also provide for
reinsurance with direct access to the reinsurers and in such amounts as Buyer
may reasonably request.
4. DUE DILIGENCE AND TIME FOR SATISFACTION OF CONDITIONS.
(a) Buyer, or its designees, shall commence to review and approve,
in Buyer's sole and absolute discretion, due diligence matters relating to the
Property promptly upon Seller's execution hereof. The due diligence period (the
"DUE DILIGENCE PERIOD") shall expire sixty (60) days after the Effective Date of
this Agreement. Buyer acknowledges that Seller has delivered to Buyer the
following items relating to the Property: the Archaeological Evaluation Report
prepared by Basin Research Associates dated November, 1998; the San Xxxx Mercury
News Residual Parcels Miscellaneous Biological Services prepared by X.X. Xxxxxx
& Associates dated November 20, 1998; San Xxxx Mercury News Traffic Constraints
Analysis prepared by DKS Associates dated January 8, 1999; Phase I Environmental
Site Assessment prepared by ATC Associates Inc., dated December 10, 1998; and
property tax bills for the past three (3) years (collectively, the "SELLER'S
DOCUMENTS"). In addition to the foregoing, Seller shall deliver to Buyer all
other information relating to the Property that is received or obtained by
Seller, any affiliate of Seller, or any consultant employed by Seller from and
after the Effective Date. During the Due Diligence Period, Buyer shall have the
opportunity to review and approve the physical characteristics and condition of
the Property including, but not limited to, an examination for the presence or
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absence of Hazardous Materials (as defined in Paragraph 8(g) below), which shall
be performed or arranged by Buyer at Buyer's sole expense. Further, during the
Due Diligence Period, Buyer shall have the opportunity to review and approve, in
its sole and absolute discretion (1) all governmental permits and approvals
relating to the construction, operation, use or occupancy of the Property, (2)
all zoning, land-use, subdivision, environmental, building and construction laws
and regulations restricting or regulating or otherwise affecting the use,
occupancy or enjoyment of the Property and (3) all correspondence with any and
all governmental agencies relating to the Property, including, but not limited
to, the City. Notwithstanding anything in this Agreement to the contrary, Buyer
shall have the right to terminate this Agreement at any time in Buyer's sole and
absolute discretion during the Due Diligence Period.
(b) Seller has delivered to Buyer at Seller's sole cost and
expense a current extended coverage preliminary title report on the Property,
issued by Title Company, accompanied by copies of all documents referred to in
the title report (collectively, the "PRELIMINARY REPORT").
(i) Buyer shall advise Seller, ten (10) days prior to the
end of the Due Diligence Period what exceptions to title, if any,
including such objectionable matters resulting from a review of a
survey prepared for the benefit of Buyer at Buyer's sole cost, will be
objected to by Buyer. The objectionable survey matters, together with
the objectionable exceptions to title are collectively referred to as
"OBJECTIONABLE TITLE MATTERS". Seller shall have five (5) days after
receipt of Buyer's objections to give Buyer: (i) written notice that
said exceptions will be removed on or before the Closing Date; or (ii)
written notice that Seller elects not to cause such exceptions to be
removed; provided, however, that Seller shall be obligated to remove
all deeds of trust encumbering the Property and pay all prepayment fees
or expenses owed to beneficiaries thereof and all other monetary
encumbrances against the Property, other than real property taxes and
assessments not yet delinquent, in full prior to or concurrent with the
Closing and all encumbrances against title to the Property that arise
as a result of an voluntary act by Seller arising after the date of
this Agreement (collectively, "SELLER'S OBLIGATIONS"). If Seller gives
Buyer notice under clause (ii) above or fails to give notice within
such five (5) day period, Buyer shall have five (5) days to elect to
proceed with the purchase or terminate this Agreement. If Buyer shall
fail to give Seller notice of its election within said five (5) days,
Buyer shall be deemed to have elected to terminate this Agreement. In
the event of such termination, the Deposit shall be returned to Buyer,
and neither party shall have any further obligations except as set
forth in Paragraphs 10, 13(b) and 13(l). If Seller shall give notice
pursuant to clause (i) above and shall fail to remove any such
Objectionable Title Matters from title prior to the Closing Date or
Seller shall fail to remove Seller's Obligations, and Buyer is
unwilling to take title subject thereto, Seller shall be in default and
Buyer shall have the rights and remedies set forth in Paragraph 6
below. Exceptions to title accepted by Buyer (or exceptions with
respect to which Buyer has waived its objections) are referred to as
the "PERMITTED EXCEPTIONS." In the event a new title matter arises
after the expiration of the Due Diligence Period, Buyer shall have the
right to approve or disapprove, in its sole and absolute discretion,
such new title matter and elect to proceed with the purchase or
terminate this Agreement.
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Notwithstanding anything in this Agreement to the contrary, if
Buyer, in its sole and absolute discretion, determines after a review
of the items described in Paragraphs 4(a) and 4(b) above and other
matters with respect to the Property deemed relevant by Buyer in
Buyer's sole and absolute discretion that the Property does not meet
Buyer's criteria for the acquisition and development of the Property in
the manner contemplated by Buyer, or if the information disclosed does
not otherwise meet Buyer's investment criteria or underwriting as
determined by Buyer in Buyer's sole and absolute discretion, or if
Buyer determines in its sole and absolute discretion that it does not
desire to acquire the Property and consummate the transactions
contemplated hereby, Buyer may terminate this Agreement by written
notice to Seller, given not later than the last day of the Due
Diligence Period. In the event Buyer has failed to deliver written
notice to Seller no later than the last day of the Due Diligence Period
that it elects to either terminate this Agreement or proceed with the
acquisition of the Property, this Agreement shall be deemed terminated.
In the event this Agreement is terminated or deemed terminated, the
Deposit shall be promptly returned to Buyer and neither party will have
any further rights or obligations hereunder except as provided in
Paragraphs 10, 13(b) and 13(l) below.
(C) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE
DOCUMENTS EXECUTED AT CLOSING, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT
MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY
KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO
HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ZONING,
TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION,
UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS
OR THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS. BUYER ACKNOWLEDGES AND
AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL
ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT
EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT OR IN THE DOCUMENTS EXECUTED AT
CLOSING. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DOCUMENTS
EXECUTED AT CLOSING, BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS
NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR
RELATING THERETO MADE OR FURNISHED BY SELLER OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING. UPON CLOSING, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH
IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS, BUYER SHALL ASSUME THE RISK THAT
ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE
PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S
INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED,
RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, DIRECTORS,
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SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION, LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES
(INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER,
KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND
SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY
REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR
PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT
LIMITATION, ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS,
EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. NOTWITHSTANDING THE
FOREGOING, IN NO EVENT, SHALL BUYER BE PREVENTED FROM JOINING SELLER IN ANY
LITIGATION OR MATTER THAT IS THE SUBJECT OF A GOVERNMENTAL ENFORCEMENT ORDER OR
DIRECTIVE (EACH AN "ACTION" AND COLLECTIVELY, THE "ACTIONS") BASED UPON AN
ALLEGED VIOLATION OF ANY ENVIRONMENTAL LAW, WHICH ACTION IS BROUGHT BY A THIRD
PARTY (PRIVATE OR GOVERNMENTAL) AGAINST BUYER ALLEGING LOSS OR SEEKING EQUITABLE
RELIEF RESULTING FROM SELLER'S ACTS OR OMISSIONS OCCURRING DURING SELLER'S
OWNERSHIP OF THE PROPERTY, EXCEPT FOR SUCH ACTIONS ARISING OUT OF FACTS
OTHERWISE DISCLOSED TO OR ACTUALLY KNOWN TO BUYER PRIOR TO CLOSING.
(d) ENTITLEMENTS.
(i) LOT LINE ADJUSTMENT. Seller is the owner of certain
real property adjacent to the Property and improved with the San Xxxx
Mercury News building ("SELLER'S ADJACENT PROPERTY"). The parties
acknowledge that pursuant to the Subdivision Map Act, Seller has
recorded a lot line adjustment which modifies the lot line between the
Property and Seller's Adjacent Property (the "LOT LINE ADJUSTMENT").
Seller shall pay all engineering, surveying, application and other
processing costs in connection with achieving the Lot Line Adjustment.
(ii) AMENDMENT TO GENERAL PLAN. The parties acknowledge that
the transfer of the Property to the Buyer shall be subject to the
Adoption by the City of an amendment to the General Plan in the form of
EXHIBIT B attached hereto (the "GPA"). Prior to the execution of this
Agreement, Seller has filed the application for the GPA and has paid
the costs therefor. From and after the date of this Agreement, Buyer
covenants and agrees that it will diligently pursue Adoption of the GPA
and Buyer shall pay all additional costs necessary to obtain the GPA.
Seller shall cooperate with Buyer in all respects in obtaining the GPA,
provided that Seller shall not be obligated to incur any additional
cost or expense in connection with the GPA. In the event that the City
Adopts the GPA subject to Revisions imposed by the City, Buyer and
Seller shall have the right to approve or disapprove the Revisions in
their respective sole and absolute discretion. For purposes of this
Agreement, "REVISIONS" shall mean a material change, material amendment
or a new or different condition. In the event Buyer does not approve
the Revisions, Buyer may terminate this Agreement by written notice to
Seller, the Phase I Deposit shall be delivered to Seller (provided that
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the conditions contained in Paragraph 2(c)(i) have been satisfied), the
Phase II and Phase III Deposit shall be delivered to Buyer, and neither
party will have any further rights or obligations except as provided in
Paragraphs 10, 13(b), and 13(l). In the event Seller does not approve
the Revisions, Seller may terminate this Agreement by written notice to
Buyer, the Deposit shall be delivered to Buyer, Seller shall pay to
Buyer one-half (1/2) of Buyer's Due Diligence Costs (which obligation
of Seller shall not exceed $200,000), Buyer shall pay to Seller
one-half (1/2) of Seller's Property and Entitlement Costs (as
hereinafter defined) (which obligation of Buyer shall not exceed
$30,000) and neither party will have any further rights or obligations
except as provided in Paragraph 10, 13(b) and 13(l). "SELLER'S PROPERTY
AND ENTITLEMENT COSTS" shall mean the costs incurred by Seller on or
prior to the date of this Agreement in connection with investigating
the Property and applying for and pursuing the entitlements referred to
herein, including civil engineering costs and consultants' fees, but
excluding however, legal fees and costs incurred in connection with
obtaining the Lot Line Adjustment.
(iii) ZONING APPROVALS. The parties acknowledge that the
transfer of the Property to the Buyer shall be subject to the Adoption
by the City of the PD rezoning (the "PD REZONING"), the approval by
Buyer and Seller of the PD Rezoning, the Approval of the PD permit (the
"PD PERMIT", together with the PD Rezoning, the "ZONING APPROVALS"),
and the approval by Buyer and Seller of the PD Permit. Buyer covenants
and agrees that upon Adoption by the City of the GPA, it will
diligently pursue Adoption and Approval of the Zoning Approvals and
Buyer shall pay all costs associated therewith. Seller shall act in
good faith and shall cooperate with Buyer in all respects in obtaining
the Zoning Approvals, provided that Seller shall not be obligated to
incur any additional cost or expense in connection with the Zoning
Approvals.
(iv) APPROVAL RIGHTS FOR ZONING APPROVALS. The parties
acknowledge that the transfer of the Property to Buyer shall be subject
to the unconditional approvals by Buyer and Seller of the Zoning
Approvals pursuant to the terms and conditions as hereinafter provided.
(1) Prior to submission to the City of the application
for the PD Rezoning and the application for the PD Permit
(individually and collectively, the "PD APPLICATION") by Buyer,
Buyer shall submit each PD Application to Seller for Seller's
approval within ten (10) business days after receipt of the
applicable PD Application from Buyer and which approval may be
withheld in Seller's sole and absolute discretion. In the event
that Seller fails to timely respond to Buyer's submission, Seller
shall be deemed to have approved the applicable PD Application. In
the event that Seller disapproves the PD Application, this
Agreement shall terminate, the Deposit shall be returned to Buyer,
Seller shall pay to Buyer one-half (1/2) of Buyer's Due Diligence
Costs (which obligation of Seller shall not exceed $200,000),
Buyer shall pay to Seller one-half (1/2) of Seller's Property and
Entitlement Costs (which obligation of Buyer shall not exceed
$30,000) and neither party will have any further rights or
obligations hereunder except as set forth in Paragraphs 10, 13(b)
and 13(l).
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(2) If, after Seller's approval of the applicable PD
Application (the "APPROVED PD APPLICATION"), the City requires any
Revision to the Approved PD Application, such Revision shall be
submitted to Seller for its review along with a copy of any
drawings or site plans showing the Revisions to the Approved PD
Application ("NOTICE OF REVISIONS"). In the event Seller
determines that the Revisions to the Approved PD Application are
unacceptable, in Seller's sole and absolute discretion, Seller
shall notify Buyer within ten (10) business days after receipt of
Buyer's Notice of Revisions of Seller's disapproval of the
Revisions (the "NOTICE OF DISAPPROVAL") and Seller shall specify
in such Notice of Disapproval Seller's objections to the
Revisions. After receipt of the Notice of Disapproval, Buyer may
negotiate with the City in an attempt to resolve Seller's
objections to the Revisions to Buyer's and Seller's satisfaction.
If Buyer is able to resolve Seller's objections to Seller's
satisfaction, and Buyer is satisfied with the Revisions, in
Buyer's sole and absolute discretion, Buyer shall proceed to have
the City incorporate the Revisions into the Approved PD
Application. If Seller does not submit the Notice of Disapproval
within ten (10) business days after receipt of Buyer's Notice of
Revisions, Seller shall be deemed to have approved the Revisions.
If Buyer is unable to resolve Seller's objections to the Revisions
imposed by the City, Buyer shall withdraw its Approved PD
Application, this Agreement shall terminate, the Deposit shall be
returned to Buyer, Seller shall pay to Buyer one-half (1/2) of
Buyer's Due Diligence Costs (which obligation of Seller shall not
exceed $200,000), Buyer shall pay to Seller one-half (1/2) of
Seller's Entitlement Costs (which obligation of Buyer shall not
exceed $30,000), and neither party shall have any further
obligations except as set forth in Paragraphs 10, 13(b) and 13(l).
In the event Seller has approved the Revisions imposed by the
City, but Buyer determines in its sole and absolute discretion
that the Revisions imposed by the City are unacceptable, Buyer may
terminate this Agreement, the Phase I Deposit and Phase II Deposit
shall be delivered to Seller in accordance with Paragraphs 2(c)(i)
and 2(c)(ii)), the Phase III Deposit shall be returned to Buyer,
and neither party shall have any further obligations except as set
forth in Paragraph 10, 13(b) and 13(l).
(3) If, after the PD Application has been approved by
Seller and the City and prior to Closing (the "Post-Approval
Period"), Buyer elects to make immaterial modifications to the PD
Application, such modifications shall not be subject to review or
approval by Seller. If, during the Post-Approval Period, Buyer
elects to make Revisions to the PD Application, such Revisions
shall be subject to Seller's approval which shall not be
unreasonably withheld, conditioned, or delayed. The standard for
whether Seller's approval is reasonable shall be set forth in the
CC&R's (as hereinafter defined). Seller shall grant or deny such
approval within ten (10) business days after written request by
Buyer.
(v) CHALLENGES. The parties acknowledge that, as provided
in Subparagraphs 2(c)(ii) and 2(c)(iii), the transfer of the Property
to Buyer shall be subject to the requirements that (i) the General Plan
CEQA Challenge Period shall have expired with respect to the GPA
9
without any Challenges, (ii) the General Plan Challenge Period shall
have expired with respect to the GPA without any Challenges, (iii) the
PD Rezoning Challenge Period shall have expired with respect to the PD
Rezoning without any Challenges, and (iv) the PD Permit Challenge
Period (as hereinafter defined) shall have expired with respect to the
PD Permit without any Challenges. For purposes of this Agreement, the
following definitions shall apply. The period of thirty-five (35) days
from the approval by the City Council of the GPA shall mean the
"GENERAL PLAN CEQA CHALLENGE PERIOD". The period of ninety five (95)
days from the approval by the City Council of the GPA shall mean the
"GENERAL PLAN CHALLENGE PERIOD". The period of ninety five (95) days
from the approval by the City Council of the PD Rezoning shall mean the
"PD REZONING CHALLENGE PERIOD". The period of ninety five (95) days
from the approval by the City Council of the PD Permit shall mean the
"PD PERMIT CHALLENGE PERIOD". A "CHALLENGE" shall mean a filing of a
petition or other action in court. In the event that there is a
Challenge during one or more of the applicable Challenge Periods, Buyer
shall have the right to either (i) terminate this Agreement, in which
case the Deposit or a portion thereof (pursuant to Subparagraph 2(c)
above) shall be returned to Buyer and neither party shall have any
further obligations except as set forth in Paragraphs 10, 13(b) and
13(l) or (ii) elect to maintain this Agreement in effect subject to the
following terms and conditions. If all Challenges have been resolved
prior to December 31, 2000, then Buyer may proceed with the acquisition
of the Property pursuant to the terms of this Agreement. In the event
that a Challenge has not been resolved prior to December 31, 2000, and
the Challenge does not present a credible threat to the cancellation or
termination of the GPA and/or the PD Permit (the "Insufficient
Challenge") as reasonably determined by Buyer and Seller, then Buyer
may proceed with the acquisition of the Property pursuant to the terms
of this Agreement. In the event that a Challenge has not been resolved
prior to December 31, 2000, and the Challenge presents a credible
threat to the cancellation or termination of the GPA and/or the PD
Permit (the "Credible Challenge") as reasonably determined by Buyer and
Seller, then the Closing shall be extended until such time as the
Credible Challenge has been resolved; provided, however, in no event
shall the Closing be extended beyond December 31, 2001.
(e) COVENANTS, CONDITIONS AND RESTRICTIONS. The parties
acknowledge that the transfer of the Property to Buyer shall be subject to the
parties entering into an agreement that restricts certain uses of the Property
and of Seller's Adjacent Property from and after the Closing (the "CC&RS").
During the Due Diligence Period, the parties shall negotiate reasonably and in
good faith the terms and conditions of the CC&Rs. Buyer and Seller hereby agree
that the CC&Rs shall include a provision that with respect to Seller's Adjacent
Property, so long as Seller continues to operate a newspaper business on
Seller's Adjacent Property, modifications and/or additions to Seller's Adjacent
Property shall be allowed so long as the modifications and/or additions are
architecturally consistent with the improvements that are present on Seller's
Adjacent Property as of the Effective Date of this Agreement. The CC&Rs shall
also include design criteria and restrictions on the use of the Property and
Seller's Adjacent Property as reasonably determined by Buyer and Seller.
5. CONDITIONS TO CLOSING. The following conditions are precedent to
Buyer's obligation to purchase the Property (the "BUYER'S CONDITIONS
PRECEDENT"):
10
(a) This Agreement has not otherwise terminated pursuant to the
terms and conditions contained herein.
(b) All of Seller's representations and warranties contained in or
made pursuant to this Agreement shall have been true and correct when made and
shall be true and correct as of the Closing Date in all material respects. At
the Closing, Seller shall deliver to Buyer a certificate certifying that each of
Seller's representations and warranties contained in Paragraph 8 below are true
and correct as of the Closing Date in all material respects or, if not true in
all material respects, stating the manner and extent any such representations
and warranties are no longer true and correct. In the event any of Seller's
representations and warranties are not true and correct in all material respects
on the Closing Date, Buyer may elect, in its sole and absolute discretion, to
terminate this Agreement in which case the Deposit shall be returned to Buyer
and neither party will have any further rights or obligations hereunder except
as set forth in Paragraphs 10, 13(b) and 13(l).
(c) The physical condition of the Property shall be substantially
the same on the Closing Date as on the date of Buyer's execution of this
Agreement and, as of the Closing Date, there shall be no litigation or
administrative agency or other governmental proceeding of any kind whatsoever,
pending or threatened, which as of or after Closing would, in Buyer's sole
discretion, materially adversely affect the value of the Property or the ability
of Buyer to operate the Property in the manner in which Buyer intends to operate
the Property, and, except as permitted by Buyer and Seller, no proceedings shall
be pending or threatened which could or would cause the redesignation or other
modification of the zoning classification of, or of any building or
environmental code requirements applicable to, any of the Property. As of the
Closing, Seller shall deliver the Property free of all occupants (including
squatters) and abandoned personal property.
(d) Satisfaction of all conditions contained in Paragraphs 2 and 4
above.
(e) Title Company shall be irrevocably and unconditionally
committed to issue to Buyer the Title Policy and Endorsements as described in
Paragraph 3 above.
(f) Seller has performed all of its obligations under this
Agreement.
The Buyer's Conditions Precedent contained in Paragraphs 5(a) through (f)
are intended solely for the benefit of Buyer. Subject to the provisions of
Paragraph 6 below, if any of the Buyer's Conditions Precedent are not satisfied,
Buyer shall have the right in its sole discretion either to waive in writing the
Condition Precedent (except for the conditions contained in Subparagraphs
4(d)(iv) 4(d)(v) (except for the Insufficient Challenge) and 4(e) above which
may not be waived by Buyer) and proceed with the purchase or terminate this
Agreement. If Buyer shall not have approved or waived (if not expressly
prohibited pursuant to this Agreement) in writing all of the Buyer's Conditions
Precedent by the Closing Date, then this Agreement shall automatically
terminate, the Deposit (or a portion thereof in accordance with Subparagraph
2(c)) shall be returned to Buyer and neither party will have any further rights
or obligations hereunder except for Seller's obligation to pay to Buyer its Due
Diligence Costs or a portion thereof and Buyer's obligation to pay to Seller a
portion of Seller's Property and Entitlement Costs in accordance with this
Agreement and except as set forth in Paragraphs 10, 13(b), and 13(l).
11
The following conditions are precedent to Seller's obligation to sell
the Property (the "SELLER'S CONDITIONS PRECEDENT"):
(i) All of Buyer's representations and warranties contained
in or made pursuant to this Agreement shall have been true and correct
when made and shall be true and correct as of the Closing Date in all
material respects. At the Closing, Buyer shall deliver to Seller a
certificate certifying that each of Buyer's representations and
warranties contained in Paragraph 9 below are true and correct as of
the Closing Date in all material respects or, if not true in all
material respects, stating the manner and extent any such
representations and warranties are no longer true and correct. In the
event any of Buyer's representations and warranties are not true and
correct in all material respects on the Closing Date, Seller may elect,
in its sole and absolute discretion, to terminate this Agreement in
which case the Deposit shall be returned to Buyer and neither party
will have any further rights or obligations hereunder except as set
forth in Paragraphs 10, 13(b), and 13(l).
(ii) Satisfaction of the conditions set forth in Paragraph 2
and 4 above (except for the conditions set forth in Subparagraph
2(c)(i)(c), which shall solely benefit Buyer).
(iii) Buyer has performed all of its obligations under this
Agreement.
The Seller's Conditions Precedent are intended solely for the benefit of Seller.
Subject to the provisions of Paragraph 6 below, if any of the Seller's
Conditions Precedent are not satisfied, Seller shall have the right in its sole
discretion either to waive in writing the Condition Precedent (except for the
conditions contained in Subparagraphs 4(d)(i), 4(d)(iv), 4(d)(v)(except for the
Insufficient Challenge) and 4(e) above which may not be waived by Seller) and
proceed with the purchase or terminate this Agreement. In the event Seller
elects to terminate this Agreement, subject to the provisions of Paragraph 6
below, the Deposit (or a portion thereof in accordance with Subparagraph 2(c))
shall be returned to Buyer, and neither party will have any further rights or
obligations hereunder except for Seller's obligation to pay to Buyer its Due
Diligence Costs or a portion thereof and Buyer's obligation to pay to Seller a
portion of Seller's Property and Entitlement Costs in accordance with this
Agreement and except as set forth in Paragraphs 10, 13(b), and 13(l).
6. REMEDIES.
(a) IN THE EVENT THIS TRANSACTION IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT SOLELY ON THE PART OF BUYER, THE DEPOSIT PLUS
INTEREST ACCRUED THEREON SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE
PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY
BUYER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY
PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN
12
EQUITY, IN THE EVENT THAT THIS TRANSACTION DOES NOT CLOSE DUE TO A DEFAULT UNDER
THIS AGREEMENT ON THE PART OF BUYER.
INITIALS: SELLER _______ BUYER _______
(b) If the sale of the Property is not consummated because of a
default under this Agreement on the part of Seller or if a Condition Precedent
cannot be satisfied because Seller intentionally frustrated such satisfaction by
some affirmative act (provided that so long as Seller is acting in accordance
with the terms of this Agreement, Seller shall not be deemed to have
intentionally frustrated such satisfaction by some affirmative act), Buyer may
either (1) terminate this Agreement by delivery of written notice of termination
to Seller, whereupon the Deposit shall be returned to Buyer and, in the instance
of an unsatisfied Condition Precedent because Seller intentionally frustrated
such satisfaction by some affirmative act, Seller shall pay to Buyer all of
Buyer's Due Diligence Costs, and neither party shall have any further rights or
obligations hereunder except as otherwise provided in Paragraphs 10, 13(b), and
13(l), or (2) enforce specific performance of Seller's obligation to execute the
documents required to convey the Property to Buyer.
7. CLOSING AND ESCROW.
(a) Upon mutual execution of this Agreement, the parties hereto
shall deposit an executed counterpart of this Agreement with Title Company and
this Agreement shall serve as instructions to Title Company as the escrow holder
for consummation of the purchase and sale contemplated hereby. Seller and Buyer
agree to execute such additional escrow instructions as may be appropriate to
enable the escrow holder to comply with the terms of this Agreement; provided,
however, that in the event of any conflict between the provisions of this
Agreement and any supplementary escrow instructions, the terms of this Agreement
shall control.
(b) The Closing shall occur ten (10) business days after receipt
by Seller of Buyer's written notice of Buyer's intention to pay to the City the
Permit Fees (as hereinafter defined) (the "NOTICE OF PAYMENT") (the "CLOSING
DATE"). Except as provided in Paragraphs 4(d)(v) and 7(c) below, the Closing
shall not occur later than December 31, 2000. For purposes of this Paragraph 7,
"PERMIT FEES" shall mean the permit fees and development taxes required by the
City to enable Buyer to obtain a permit card from the City.
(c) Notwithstanding the provisions of Paragraph 7(b) to the
contrary, if all of the conditions set forth in Paragraphs 2 and 4 hereof have
been satisfied (or waived in the instance of an Insufficient Challenge) prior to
December 31, 2000, Buyer shall have the right to extend the Closing Date in its
sole and absolute discretion, upon the following terms and conditions. If Buyer
elects to extend the Closing Date, then prior to December 31, 2000, Buyer shall
(i) deliver to Seller a written notice of its intention to extend the Closing
Date (the "EXTENDED CLOSING DATE") and (ii) deposit with Title Company the sum
of One Hundred Thousand Dollars ($100,000) which shall become a part of the
Deposit and which amount together with the rest of the Deposit shall be
non-refundable except as otherwise expressly provided herein. The Extended
Closing Date shall occur ten (10) business days after receipt by Seller of
Buyer's Notice of Payment, provided that in no event shall the Extended Closing
Date be later than December 31, 2001. Notwithstanding the foregoing, in the
event that all of the conditions set forth in Paragraphs 2 and 4 have been
13
satisfied (or waived in the instance of an Insufficient Challenge) prior to
December 31, 2000 with the exception of an outstanding Credible Challenge, the
Closing shall occur ten (10) days after resolution of such Credible Challenge;
provided, however, that in the event such Credible Challenge has not been
resolved prior to December 31, 2001, this Agreement shall terminate in
accordance with the terms of Paragraph 2(c)(iii). In the event such Credible
Challenge is resolved prior to December 31, 2001, and Buyer has not previously
delivered the Notice of Payment to Seller, Buyer may elect to extend the Closing
Date to a date not later than December 31, 2001 in accordance with the
provisions of this Paragraph 7(c)(i) and (ii). If the Closing does not occur on
or before the Closing Date, or the Extended Closing Date, if Buyer has exercised
its right to extend pursuant to the terms hereof, the escrow holder shall,
unless it is notified by both parties to the contrary within five (5) days after
the Closing Date, or Extended Closing Date, as applicable, pay the Deposit or
portions thereof to the party entitled thereto pursuant to the terms hereof and
return to the depositor thereof any other items which were deposited hereunder.
Any such return shall not, however, relieve either party of any liability it may
have for its wrongful failure to close.
(d) At or before the Closing (except to the extent otherwise
specifically provided below), Seller shall deliver to Buyer the following:
(i) a duly executed and acknowledged Grant Deed, which
shall be recorded at Closing by Title Company in the records of the
county in which the Property is located.
(ii) a duly executed and acknowledged original of the CC&Rs
which shall be recorded at Closing by the Title Company in the records
of the county in which the Property is located.
(iii) an affidavit pursuant to Section 1445(b)(2) of the IRC,
and on which Buyer is entitled to rely, that Seller is not a "foreign
person" within the meaning of Section 1445(f)(3) of the IRC;
(iv) Seller's closing statement prepared by the Title
Company in form and content satisfactory to Buyer and Seller;
(v) the certificate certifying as to Seller's
representations and warranties as required by Paragraph 5 above;
(vi) any other instruments, records or correspondence called
for hereunder which have not previously been delivered; and
(vii) a properly executed California Form 590RE certifying
that Seller is a California resident if Seller is a corporation or
individual or that withholding of tax under Section 18805 or Section
26131 of the California Revenue and Taxation Code will not be required
upon the transfer of the Property from Seller to Buyer.
(e) At or before the Closing, Buyer shall deliver to Seller the
following:
14
(i) a Buyer's closing statement prepared by the Title
Company in form and content satisfactory to Buyer and Seller;
(ii) a duly executed and acknowledged original of the CC&Rs;
(iii) the Purchase Price;
(iv) the certificate certifying as to Buyer's
representations and warranties as required by Paragraph 5 above; and
(v) any other instruments, records or correspondence called
for hereunder which have not previously been delivered.
(f) Seller and Buyer shall each deposit such other instruments as
are reasonably required by the escrow holder or otherwise required to close the
escrow and consummate the purchase of the Property in accordance with the terms
hereof.
(g) The following are to be apportioned at Closing, as follows:
(i) CERTAIN APPORTIONMENTS. Seller shall pay for (i) the
premium for the CLTA portion of the Title Policy, (ii) escrow fees,
(iii) any and all county transfer taxes, (iv) one-half (1/2) of the
city transfer taxes, and (v) recording fees. Buyer shall pay (i) the
difference between the ALTA and CLTA portion of the Title Policy, (ii)
the ALTA survey for the Property, and (iii) one-half (1/2) of the city
transfer taxes. Seller shall be responsible for all costs incurred in
connection with the prepayment or satisfaction of any loan or bond
secured by the Property including, without limitation, any prepayment
fees, penalties or charges. Buyer shall pay for all endorsements to its
ALTA Owner's Policy of Title Insurance except for endorsements
necessary to satisfy Seller's Obligations which shall be paid for by
Seller. All other costs and charges of the escrow for the sale not
otherwise provided for in this Paragraph 7(g)(i) or elsewhere in this
Agreement shall be allocated in accordance with the closing customs for
the county in which the Property is located.
(ii) REAL ESTATE TAXES AND ASSESSMENTS.
(1) All delinquent real estate taxes and assessments
shall be paid by Seller at or before Closing.
(2) Non-delinquent real estate taxes and assessments
shall be prorated at Closing to the Buyer's and Seller's ownership
periods using the actual current tax xxxx, but if such tax xxxx is
not available at Closing, then such proration shall use an
estimate calculated to be 102% of the amount of the previous
year's tax xxxx, subject to a post-closing reconciliation using
the actual current tax xxxx when received pursuant to Paragraph
7(g)(iv) below. In the proration(s), Buyer shall be credited with
an amount equal to the real estate taxes and assessments
15
applicable to Seller's ownership period, to the extent such amount
has not been actually paid by Seller; Seller shall be credited
with an amount equal to the real estate taxes and assessments paid
by Seller and applicable to Buyer's ownership period.
(3) If, after Closing, any additional real estate taxes
or assessments applicable to the Seller's ownership period are
levied for any reason, including back assessments, then Seller
shall pay all such additional amounts. If, after Closing, any
refund of real estate taxes or assessments applicable to Seller's
ownership period are received by Buyer for any reason, including a
successful tax appeal, then Buyer shall remit to Seller any such
refund, less Buyer's costs of collection.
(iii) PRELIMINARY CLOSING ADJUSTMENT. Prior to Closing,
Seller and Buyer shall jointly prepare a preliminary Closing adjustment
statement addressing all of the aforesaid apportionments and shall
deliver such statement to the Title Company.
(iv) POST-CLOSING RECONCILIATION. Subject to the provisions
of Paragraph 7(g)(ii) above, if any of the aforesaid apportionments
cannot be calculated accurately at the time of the Closing, then they
shall be calculated as soon after the Closing as feasible. Either party
owing the other party a sum of money based on such subsequent
apportionments shall promptly pay said sum to the other party, together
with interest thereon at the rate of two percent (2%) over the then
applicable publicly announced prime rate of Bank of America, NT&SA per
annum or the maximum rate allowed by law, whichever is less (the
"RATE"), from the date of the Closing to the date of payment if payment
is not made within ten (10) days after delivery of a xxxx therefor. In
making the reconciliation's described in this Paragraph 7(g)(iv), each
party shall have the right to review the other party's books and
records to the extent relevant to a specific apportionment then being
reconciled.
(v) SURVIVAL. The provisions of this Paragraph 7(g) shall
survive the Closing.
(h) Buyer shall deposit with Title Company at Closing the Permit
Fees and upon Closing, the Permit Fees shall be disbursed by the Title Company
to the City pursuant to the joint instructions by Buyer and Seller.
8. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to and covenants with Buyer as
follows, which representations and warranties shall survive the Closing (as
provided in Paragraph 13(e) below).
(a) SELLER'S DOCUMENTS. To the best of Seller's knowledge, the
Seller's Documents constitute all of the information and documents known by
Seller to be in its possession regarding the Property.
(b) COMPLIANCE WITH LAWS. Seller has not received any written
notice of violation or alleged violation of environmental, zoning and land use
laws, and other applicable local, state and federal laws and regulations
applicable to the Property ("APPLICABLE LAWS"). Seller covenants and agrees that
it will immediately deliver to Buyer any written notice of violation or alleged
16
violation of Applicable Laws that Seller receives from the date hereof through
the Closing Date.
(c) PROCEEDINGS. Seller has not received any written notice of any
threatened or actual condemnation proceeding, environmental proceeding, zoning
or other land-use regulation proceeding, or other governmental proceeding
affecting the Property nor has Seller received notice of any special assessment
proceedings affecting the Property (other than as set forth in the Preliminary
Report). Seller covenants and agrees that it will immediately deliver to Buyer
any written notice of any such threatened or actual proceeding affecting the
Property that Seller receives from the date hereof through the Closing Date.
There is no litigation pending or, to the best of Seller's knowledge threatened,
against Seller that arises out of the ownership of the Property or that might
detrimentally affect the value or the use or operation of the Property for its
intended purpose or the ability of Seller to perform its obligations under this
Agreement. From the date hereof through the Closing Date, Seller shall
immediately notify Buyer of any such litigation of which Seller becomes aware.
(d) AUTHORITY. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware; this
Agreement and all documents executed by Seller which are to be delivered to
Buyer at the Closing are and at the time of Closing will be duly authorized,
executed and delivered by Seller, are and at the time of Closing will be legal,
valid and binding obligations of Seller enforceable against Seller in accordance
with their respective terms, are and at the time of Closing will be sufficient
to convey title (if they purport to do so), and do not and at the time of
Closing will not violate any provision of any agreement or judicial order to
which Seller or the Property is subject.
(e) CONTRACTS; LIENS. At the time of Closing there will be no
outstanding written or oral contracts or other agreements made by Seller
concerning the Property which have not been fully paid for and Seller shall
cause to be discharged all mechanics' and materialmen's liens arising from any
labor or materials furnished to the Property prior to the time of Closing.
(f) WITHHOLDING TAXES. Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the IRC.
(g) ENVIRONMENTAL. Seller has not received any written notice that
the Property or any portion thereof is in violation of any federal, state, local
or administrative agency ordinance, law, rule, regulation, order or requirement
relating to environmental conditions or Hazardous Material (collectively,
"ENVIRONMENTAL LAWS"). For the purposes hereof, "HAZARDOUS MATERIAL" shall mean
any substance, chemical, waste or other material which is listed, defined or
otherwise identified as "hazardous" or "toxic" under any federal, state, local
or administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
xx.xx. 9601 ET SEQ.; and the Resource Conservation and Recovery Act, 42 U.S.C.
xx.xx. 6901 ET SEQ.; or any regulation, order, rule or requirement adopted
thereunder, as well as any formaldehyde, urea, polychlorinated biphenyls,
petroleum, petroleum product or by-product, crude oil, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture
thereof, radon, asbestos, and "source," "special nuclear" and "by-product"
material as defined in the Atomic Energy Act of 1985, 42 U.S.C. xx.xx. 3011 ET
SEQ. Notwithstanding the foregoing, Seller hereby discloses to Buyer the
17
following: (i) one or more underground storage tanks are or were located on
Seller's Adjacent Property and Seller periodically conducts testing with regard
thereto; and (ii) the Property may have been used in the past for agricultural
purposes and there may exist in the soil on the Property residues of
fertilizers, pesticides and fungicides as a result thereof.
(h) THIRD PARTY RIGHTS. Seller has not granted any option or right
of first refusal or first opportunity to any party to acquire any interest in
any of the Property and to the best of Seller's knowledge, no party has an
interest in the Property as a result of adverse possession.
(i) CONTRACTS. To the best of Seller's knowledge, there are no
obligations in connection with the Property which will be binding upon Buyer
after Closing, except Permitted Exceptions.
(j) INSOLVENCY. Seller has not filed or been the subject of any
filing of a petition under the Federal Bankruptcy Law or any federal or state
insolvency laws or laws for composition of indebtedness or for the
reorganization of debtors.
For purposes of this Agreement, "to the best of Seller's knowledge"
shall mean the actual knowledge, but not the implied or constructive knowledge,
of Xxxx Xxxxxxxxxx without any duty of investigation or inquiry.
9. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows: Buyer is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of California; this Agreement and all documents executed
by Buyer which are to be delivered to Seller at the Closing are or at the time
of Closing will be duly authorized, executed and delivered by Buyer, and are or
at the Closing will be legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms, and do not and at the
time of Closing will not violate any provisions of any agreement or judicial
order to which Buyer is subject.
10. POSSESSION.
Possession of the Property shall be delivered to Buyer on the Closing
Date, provided, however, that prior to the Closing Date Seller shall afford
authorized representatives of Buyer reasonable access to the Property for
purposes of satisfying Buyer with respect to the representations, warranties and
covenants of Seller contained herein and with respect to satisfaction of any
Condition Precedent. Buyer shall maintain, and shall ensure that its contractors
maintain, not less than $1,000,000 comprehensive general liability coverage
written on an occurrence basis and reasonably adequate to insure against all
liability of Buyer and its agents, employees or contractors, arising out of any
entry or inspections of the Property pursuant to the provisions hereof and
naming Seller as an additional insured. Buyer shall provide Seller with
certificates of such insurance coverage prior to any entry onto the Property by
Buyer or its employees, agents or contractors. Seller shall reasonably (except
in the case of Phase II testing where Seller shall approve or disapprove such
testing in its sole and absolute discretion) approve or disapprove any proposed
environmental testing within two (2) business days after receipt of a request
from Buyer concerning the same. If Seller fails to respond within two (2)
business days after receipt of such notice, Seller shall be deemed to have
denied such request. If Seller denies Buyer the right to perform Phase II
testing on the Property, Buyer may terminate this Agreement by giving written
notice thereof to Seller prior to the expiration of the Due Diligence Period, in
18
which case this Agreement shall terminate and all of the Phase I Deposit, Phase
II Deposit and Phase III Deposit, as applicable, shall be returned to Buyer.
Buyer hereby agrees to indemnify and hold Seller harmless from any damage or
injury to persons or property caused by Buyer or its authorized representatives
during their entry and investigation prior to the Closing; provided, however,
nothing herein shall obligate Buyer to indemnify Seller for the mere discovery
by Buyer of any matters during the course of Buyer's testing of the Property
conducted pursuant to this Paragraph 10. If this Agreement is terminated, Buyer
shall repair the damage caused by Buyer's entry and investigation. This
indemnity shall (A) survive the termination of this Agreement or the Closing, as
applicable, provided that Seller must give notice of any claim it may have
against Buyer under such indemnity (i) within three (3) months of such
termination or the Closing Date, as applicable, if the claim involves damage to
Seller's Property or any other claim not described in clause (ii) below, or (ii)
if the claim is brought by a third party against Seller, within one (1) year of
such termination or the Closing Date, as applicable, and (B) shall not be
limited by the liquidated damages provision set forth in Paragraph 6 above.
11. BUYER'S CONSENT TO CONTRACTS AND LEASES. Seller shall not, after
the date of Seller's execution of this Agreement, enter into any lease,
contract, other agreement, or any amendment thereof affecting the Property,
without in each case obtaining Buyer's prior written consent thereto.
Notwithstanding the provisions of this Paragraph 11 to the contrary, Seller may
enter into new contracts as long as such contract(s) will be terminated as of
the Closing Date. Seller shall terminate prior to the Closing, at no cost or
expense to Buyer, any and all agreements, contracts or similar agreements
affecting the Property that are not Permitted Exceptions or otherwise expressly
assumed in writing by Buyer in Buyer's sole and absolute discretion.
12. COOPERATION. Seller shall cooperate and do all acts as may be
reasonably required or requested by Buyer, at no material cost to Seller, with
regard to the fulfillment of any Condition Precedent including execution by
Seller of any documents, applications or permits or similar items, and using its
best efforts to obtain the signature from any third party required on such
documents, applications or permits or similar items. Seller hereby irrevocably
authorizes Buyer and its agents to make all inquiries with and applications to
any third party, including any governmental authority as Buyer may reasonably
require to complete its due diligence and the proceedings contemplated in this
Agreement. Buyer shall not place any encumbrance on the Property in connection
with obtaining the entitlements contemplated herein without first obtaining
Seller's written consent and Buyer shall not do anything in the process of
obtaining the entitlements which will materially decrease the value of the
Property.
13. MISCELLANEOUS.
(a) NOTICES. Any notice, consent or approval required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been given upon (i) hand delivery; (ii) one (1) day after being deposited with
Federal Express or another reliable overnight courier service or (iii)
transmission by facsimile telecopy during the recipient's normal business hours
as evidenced by a regular machine-printed confirmation of such transmission, and
addressed as follows:
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IF TO SELLER: Northwest Publications, Inc.
c/o Xxxxxx-Xxxxxx, Inc.
00 X. Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xx. Xxxx Xxxxxxxxxx
Vice President/Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to: Northwest Publications, Inc.
c/o Xxxxxx-Xxxxxx, Inc.
00 X. Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Shartsis, Xxxxxx & Xxxxxxxx LLP
Xxx Xxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO BUYER: Spieker Properties, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to: Spieker Properties, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Xxxxxx Xxxxxxxxxx & Sutcliffe LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
(b) BROKERS AND FINDERS. Neither party has had any contact or
dealings regarding the Property, or any communication in connection with the
subject matter of this transaction, through any real estate broker or other
person who can claim a right to a commission or finder's fee in connection with
the sale contemplated herein, except for contact and dealings with Xxxxxx Xxxxx
LLC, whose compensation shall be paid by Seller. If any other broker or finder
perfects a claim for a commission or finder's fee based upon any such contact,
dealings or communication, the party through whom the broker or finder makes its
claim shall be responsible for said commission or fee and all costs and expenses
(including reasonable attorneys' fees) incurred by the other party in defending
against the same. The provisions of this paragraph shall survive the Closing.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns. Buyer may not assign its rights under this
Agreement without first obtaining Seller's written approval, which approval may
be given or withheld in Seller's sole discretion. Notwithstanding the foregoing,
Buyer shall have the right, upon written notice to Seller, to assign its right,
title and interest in and to this Agreement to one or more assignees affiliated
with Buyer at any time before the Closing Date; provided, however, in such
event, the party originally designated as Buyer shall not be relieved of its
obligations under this Agreement.
(d) AMENDMENTS. Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument executed by
Seller and Buyer.
(e) CONTINUATION AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
ETC. All representations and warranties by the respective parties contained
herein or made in writing pursuant to this Agreement are intended to and shall
remain true and correct as of the time of Closing (unless otherwise provided in
the certificates to be delivered pursuant to Paragraphs 7(c)(vi) and 7(d)(iv)),
and, together with all conditions, covenants and indemnities made by the
respective parties contained herein or made in writing pursuant to this
Agreement (except as otherwise expressly limited or expanded by the terms of
this Agreement), shall survive the execution and delivery of this Agreement and
the Closing for a period of twelve (12) months.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(g) MERGER OF PRIOR AGREEMENTS. This Agreement and the exhibits
hereto constitute the entire agreement between the parties and supersede all
prior agreements and understandings between the parties relating to the subject
matter hereof.
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(h) ENFORCEMENT. If either party hereto fails to perform any of
its obligations under this Agreement or if a dispute arises between the parties
hereto concerning the meaning or interpretation of any provision of this
Agreement, then the party not prevailing in such dispute shall pay any and all
costs and expenses incurred by the other party in enforcing or establishing its
rights hereunder, including, without limitation, court costs or costs of
arbitration and reasonable attorneys' fees and costs. Any such attorneys' fees
and other reasonable expenses incurred by either party in enforcing a judgment
in its favor under this Agreement shall be recoverable separately from and in
addition to any other amount included in such judgment, and such attorneys' fees
obligation is intended to be severable from the other provisions of this
Agreement and to survive and not be merged into any such judgment. The
provisions of this Paragraph 13(h) shall not be limited by the liquidated
damages provision set forth in Paragraph 6 above.
(i) TIME OF THE ESSENCE. Time is of the essence of this Agreement.
(j) SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
(k) MARKETING. During the term of this Agreement, Seller shall not
market the Property, accept any offer to purchase, offer the Property for sale
to or enter into any contract for the sale of the Property with any other
prospective purchaser. After the expiration of the Due Diligence Period, Buyer
may offer the Property for lease and place signs on the Property reflecting the
same.
(l) CONFIDENTIALITY. Buyer and Seller agree that to the extent
reasonably practical, they shall keep the contents of this Agreement
confidential and that prior to Closing, no publicity or press release to the
general public with respect to this transaction shall be made by either party
without the prior written consent of the other.
(m) LIKE-KIND EXCHANGE. Buyer and Seller hereby acknowledge that
Buyer may desire to effectuate a tax-deferred exchange (also known as a "1031"
exchange) (the "EXCHANGE") in connection with Buyer's acquisition of the
Property. Seller hereby agrees to cooperate with Buyer in connection with the
Exchange contemplated by Buyer, provided that:
(i) All documents executed in connection with the Exchange
(the "EXCHANGE DOCUMENTS") shall recognize that Seller is acting solely
as an accommodating party to such Exchange, shall have no liability
with respect thereto, and is making no representation or warranty that
the transactions qualify as a tax-free exchange under Section 1031 of
the Internal Revenue Code or any applicable state or local laws and
shall have no liability whatsoever if any such transactions fail to so
qualify.
(ii) Such Exchange shall not result in Seller incurring any
additional costs or liabilities (and Buyer shall pay all additional
costs and expenses to the extent that such are incurred), and in no
22
event will there be any extension of the Closing Date in order to
permit Buyer to initiate or consummate such Exchange.
(iii) In no event shall Seller be obligated to acquire any
property or otherwise be obligated to take title, or appear in the
records of title, to any property in connection with the Exchange.
(iv) In no event shall Buyer's consummation of such Exchange
constitute a condition precedent to Buyer's obligations under this
Agreement, and Buyer's failure or inability to consummate such Exchange
shall not be deemed to excuse or release Buyer from its obligations
under this Agreement.
Seller further agrees that, in connection with the foregoing, and
subject in all respects to the foregoing provisions, Seller shall consent to
Buyer's assigning all or a portion of its rights under this Agreement to an
exchange intermediary solely for the purpose of consummating such Exchange. In
no event shall any such assignment release Buyer of its obligations under this
Agreement, including, without limitation, its indemnity obligations thereunder,
or affect in any manner any of Buyer's representations, warranties or covenants
set forth in this Agreement. Buyer shall indemnify and hold Seller harmless from
and against all loss, liability, damage or expense (including reasonable
attorney's fees and costs) actually incurred or suffered by Seller as a direct
result of such Exchange.
(n) COUNTERPART EXECUTION. This Agreement may be executed in any
number of identical counterparts, any or all of which may contain the signatures
of less than all of the parties, and all of which shall be construed together as
but a single instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
BUYER: XXXXXXX PROPERTIES, L.P.,
a California limited partnership
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
Its: General Partner
By: /s/ XXX XXXXXXX
------------------------------
Xxx Xxxxxxx
Its: President, Silicon Valley
SELLER: NORTHWEST PUBLICATIONS, INC.,
a Delaware corporation
By: /s/ XXXX XXXXXXXXXX
------------------------------
Xxxx Xxxxxxxxxx
Its: Assistant Vice President/
Treasury
24
COUNTERPART SIGNATURE PAGE TO
PURCHASE AGREEMENT DATED AS OF OCTOBER 21, 1999
(TITLE COMPANY)
Title Company agrees to act as escrow holder and title company in
accordance with the terms of this Agreement and to act as the Reporting Person
in accordance with Section 6045(e) of the Internal Revenue Code and the
regulations promulgated thereunder.
FIRST AMERICAN TITLE GUARANTY COMPANY
By: /s/ XXXXXXX XXXXXX
------------------------------
Xxxxxxx Xxxxxx
Its: Escrow Officer
By: /s/
------------------------------
Its:
Date: October 21, 1999
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LIST OF EXHIBITS
Exhibit A -- Description of Real Property
Exhibit B -- Application for Amendment to General Plan
Exhibit C -- Form of Grant Deed
