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EXHIBIT 10.7
PURCHASE AND SALE AGREEMENT
By and Between
LIMAR REALTY CORP. #23
("SELLER")
and
AMERICAN XTAL TECHNOLOGY, INC.
("BUYER")
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TABLE OF CONTENTS
Page
1. PURCHASE AND SALE......................................................1
2. PURCHASE PRICE.........................................................2
3. TITLE..................................................................3
4. ESCROW.................................................................4
5. CLOSING................................................................4
6. DUE DILIGENCE..........................................................4
7. CONDITIONS TO CLOSING..................................................9
8. DELIVERIES INTO ESCROW................................................10
9. PRORATIONS; CLOSING COSTS; CREDITS....................................12
10. OPERATION OF PROPERTY PENDING THE CLOSING. ..........................14
11. REPRESENTATIONS AND WARRANTIES........................................14
12. INDEMNIFICATION.......................................................16
13. CASUALTY OR CONDEMNATION..............................................17
14. COMMISSIONS...........................................................18
15. NOTICES...............................................................18
16. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.........................19
17. MISCELLANEOUS.........................................................22
18. DEFAULT...............................................................24
19. DEFINITIONS. ........................................................25
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("AGREEMENT") is made and entered into
as of April __, 1998 (the "EFFECTIVE DATE") by and between Limar Realty Corp.
#23, a California corporation ("SELLER"), and American Xtal Technology, Inc., a
Delaware corporation ("BUYER").
R E C I T A L S
This Agreement is made with respect to the following facts and
circumstances:
A. Seller owns certain real property commonly known as the OSI Building,
0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, XX, which real property, together with certain
personal property is collectively referred to in this Agreement as the
"Property" and is more particularly defined below.
B. Subject to the terms and conditions herein, Seller desires to sell
and Buyer desires to purchase the Property.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Buyer agree as follows:
1. PURCHASE AND SALE.
1.1 Property. Subject to the terms and conditions hereof,
Seller hereby agrees to sell, convey and assign to Buyer, and Buyer hereby
agrees to purchase and accept from Seller on the Closing Date (as defined below)
the following (collectively, the "PROPERTY"):
1.1.1 That certain tract or parcel of land situated in the
City of Fremont, County of Alameda, California which is legally described on
Exhibit 1.1.1 attached hereto, together with any and all rights, privileges and
easements appurtenant thereto, which are owned by Seller (collectively, the
"LAND");
1.1.2 All buildings, structures, fixtures and other
improvements of every kind and description affixed to or located in, on, over,
or under the Land (all of which are collectively referred to as the
"IMPROVEMENTS"); and
1.1.3 All right, title and interest of Seller in and to all
tangible personal property of any type located upon the Land or within the
Improvements and used exclusively in connection with the operation of the Land
and Improvements (collectively, the "PERSONAL PROPERTY").
1.2 Real Property. The Land and Improvements are collectively
referred to as the "REAL PROPERTY".
1.3 Assignment. In addition, Seller shall convey and assign to
Buyer all of the right, title and interest of Seller in and to (i) all
assignable service contracts and other agreements,
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if any, relating to the Real Property or Personal Property to be assumed by
Buyer as described on Exhibit 1.3 (i) attached hereto (collectively the "SERVICE
CONTRACTS"); (ii) all assignable current licenses, permits, certificates of
occupancy, approvals and entitlements issued or granted in connection with the
Real Property as well as any and all assignable development rights and any other
intangible rights, interests or privileges relating to or used in connection
with the Real Property; (iii) any assignable right to use the current names of
the Real Property, logos, trademarks, tradenames and symbols and promotional
materials; and (iv) all transferrable warranties, guarantees or sureties
relating to the Real Property or the Personal Property. Such assignment shall be
made pursuant to the Assignment and Assumption Agreement in the form described
in Section 8.1.3 below ("ASSIGNMENT"). All of the above interests as described
in clauses (ii), (iii) and (iv) of this Section 1.3 shall sometimes be referred
to collectively as the "INTANGIBLE PROPERTY".
2. PURCHASE PRICE. Buyer shall pay as the total purchase price for
the Property ("PURCHASE PRICE") the sum of Nine Million Twenty Three Thousand
Dollars ($9,023,000.00). The Purchase Price shall be paid as follows:
2.1 Deposit. On or before one (1) business day following the
Effective Date, Buyer shall cause One Hundred Thirty Five Thousand Three Hundred
Forty Five Dollars ($135,345.00) (the "DEPOSIT #1") in immediately available
funds to be delivered into Escrow (as defined below). On or before one (1)
business day following the Due Diligence Date (as defined below), Buyer shall
cause an additional One Hundred Thirty Five Thousand Three Hundred Forty Five
Dollars ($135,345.00) (the "DEPOSIT #2") in immediately available funds to be
delivered into Escrow. The "DEPOSIT" shall refer to the sum of the Deposit #1
and Deposit #2 as each of said amounts are received by Escrow. The failure of
Buyer to timely deliver any of the respective Deposits shall be a material
default, and shall entitle Seller, at Seller's sole option, to terminate this
Agreement immediately by giving written notice of such termination to Buyer and
the Title Company (as defined below);
2.2 Interest on Deposit. The Deposit shall be held by the Title
Company as an xxxxxxx money deposit towards the Purchase Price. The Deposit
shall be held in Escrow in accordance with the provisions of this Agreement in a
federally insured interest bearing account or other investment suitable for
daily investment reasonably acceptable to Seller and Buyer (and in any event
with any risk of loss for the account of Buyer) with any interest accruing
thereon to be paid or credited, except as otherwise provided in this Agreement,
to Buyer. The term "Deposit" shall include any and all interest then accrued;
2.3 Disposition of Deposit. At the Closing (as defined below) the
Deposit shall be applied and credited toward the payment of the Purchase Price.
If Escrow does not close, and this Agreement is terminated in a manner governed
by Sections 7.3 or 13, the Deposit will be disbursed to Buyer as provided in
such Sections. If the Escrow does not close and neither Section 7.3 nor Section
13 applies, the Deposit shall be returned to Buyer unless the provisions of
Section 18.1 are applicable, in which case the disposition of the Deposit shall
be governed by the provisions of Section 18.1; and
2.4 Cash Balance. On or before the Closing, Buyer shall deliver
into Escrow in immediately available funds the balance of the Purchase Price.
The Purchase Price, net of any
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prorations and closing costs to be paid by Seller as provided in this Agreement,
shall be paid by the Title Company to Seller on the Closing Date by federal wire
transfer of immediately available funds to a bank account(s) designated by
Seller in a written notice to the Title Company given prior to the Closing.
3. TITLE.
3.1 Vesting of Title. At Closing, Seller shall convey fee simple
title to the Real Property to Buyer by execution and delivery of the Deed (as
defined below). Issuance by the Title Company (or an unconditional commitment to
issue) as of the Closing of the Buyer's Title Policy (as defined below) shall
constitute evidence of delivery of title by Seller.
3.2 Buyer's Title Insurance. At Closing, the Title Company shall
issue to Buyer a CLTA owner's form of title insurance policy ("BUYER'S TITLE
POLICY") in the amount of the Purchase Price insuring that fee simple title to
the Real Property is vested in Buyer subject only to the Permitted Exceptions
(as defined below). Buyer shall be entitled to request that the Title Company
provide an ALTA title insurance policy and/or such endorsements to the Buyer's
Title Policy as Buyer may reasonably require, provided that such ALTA policy
and/or endorsements shall be at no cost or additional liability to Seller and
the Closing shall not be delayed as a result of Buyer's request.
3.3 Permitted Exceptions. As a condition precedent of Buyer's
obligations as provided in Section 7.2.4 but not as a covenant of Seller, Seller
shall convey the Property and Buyer shall accept the Property subject to the
following matters, which are collectively referred to as the "PERMITTED
EXCEPTIONS":
3.3.1 all exceptions to title shown in the Title Report (as
defined below) as it may be amended and on the Survey (as defined below) that
are approved or deemed approved by Buyer as provided in Section 6.3 hereof;
3.3.2 the lien of nondelinquent real and personal property
taxes and assessments;
3.3.3 Intentionally Deleted;
3.3.4 the Service Contracts, if any, to be assumed by Buyer;
3.3.5 local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building and zoning
laws, ordinances and regulations, now existing or hereafter in effect with
respect to the Real Property;
3.3.6 matters affecting the condition of title created by or
with the written consent of Buyer;
3.3.7 water rights, and claims of title to water, whether or
not shown by the public records;
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3.3.8 unless Buyer elects to obtain an ALTA policy of title
insurance, discrepancies, conflicts in boundary lines, shortages in area,
encroachments, and any state of facts which inspection of the Real Property
would disclose and which are not shown by the public records; and
3.3.9 standard printed exclusions generally included in a
CLTA owner's policy (or ALTA owner's policy, as the case may be).
4. ESCROW.
4.1 Opening of Escrow. Seller shall deliver a copy of a fully
executed counterpart of this Agreement into escrow ("ESCROW") to be established
at Chicago Title Company, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxx ("TITLE COMPANY") on or before three
(3) days following the Effective Date.
4.2 Instructions to Title Company. Seller and Buyer shall each be
entitled to submit escrow instructions to the Title Company in connection with
the Closing of the Escrow. Seller and Buyer shall in addition execute such
further escrow instructions as the Title Company may reasonably require in
connection with the Closing so long as such instructions are consistent with the
provisions of this Agreement and the escrow instructions of Seller and Buyer. In
the event of any conflict between the terms and conditions of this Agreement and
the provisions of any escrow instructions prepared by Seller, Buyer or the Title
Company, the terms and conditions of this Agreement shall control.
5. CLOSING.
5.1 Closing. The purchase and sale of the Property as
contemplated by this Agreement, including but not limited to the recordation of
the Deed and the completion of the other matters required by this Agreement to
be done contemporaneously (the "CLOSING") shall occur on or before forty five
(45) calendar days following the Due Diligence Date. The date on which the
Closing actually occurs shall be referred to as the "CLOSING DATE".
5.2 Failure to Close. If the Closing does not occur on or before
the date set forth in Section 5.1 above (as such date may be extended pursuant
to the express provisions of this Agreement), then in the absence of a written
agreement between the parties to extend the Closing Date, either party hereto
(so long as such party is not then in default pursuant to this Agreement),
without waiving any rights it may otherwise have pursuant to the Agreement, may
elect to terminate this Agreement by giving written notice of such termination
to the other and to the Title Company.
6. DUE DILIGENCE.
6.1 Due Diligence Period. The period commencing as of the
Effective Date and continuing through the date that is thirty (30) days
following the Effective Date ("DUE DILIGENCE DATE") shall be referred to as the
"DUE DILIGENCE PERIOD".
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6.2 Available Information. Seller shall make available to Buyer
the following documents and materials (collectively, the "DUE DILIGENCE
MATERIALS").
6.2.1 Delivered Materials. Within seven (7) days following
the Effective Date, Seller will deliver or cause to be delivered to Buyer copies
of all of the documents and materials relating to the Property listed on Exhibit
6.2.1 attached hereto. Seller has not undertaken any independent investigation
as to the truth or accuracy of such documents and materials and is providing
same solely as an accommodation to Buyer.
6.2.2 Property Files. Seller shall make available to Buyer
and Buyer's agents and representatives, upon reasonable notice and during normal
business hours, all files in the possession of Seller, or in possession of
Seller's property manager, if any, relating to the ownership, operation,
construction, use or occupancy of the Property, or any portion of the Property.
Buyer, at its expense, may make photocopies of such material relative to the
Property as Buyer may determine.
6.2.3 Restricted Information. Notwithstanding any provision
to the contrary, "Due Diligence Materials" shall not include, and Seller shall
have no obligation to furnish or otherwise make available to Buyer, any of the
following documents: (i) any internally or externally prepared reports or
analysis concerning the valuation or performance of the Property; (ii) any
information received from or concerning any other potential purchaser of the
Property; (iii) any federal or state income tax returns; (iv) any documents,
instruments or agreements evidencing, securing or relating to any mortgage loan
currently encumbering the Real Property; (v) any correspondence or analyses
regarding past, pending or proposed real property tax appeals; or (vi) any
information or documentation that is privileged or otherwise legally protected
from disclosure under applicable law.
6.2.4 Confidentiality. Buyer and its representatives shall
hold in strictest confidence all data and information obtained with respect to
Seller or the Property whether obtained before or after the execution and
delivery of this Agreement, and shall not disclose the same to others; provided,
however, that it is understood and agreed that Buyer may disclose such data and
information to the employees, lenders, consultants, accountants and attorneys of
Buyer provided that such persons agree to treat such data and information
confidentially. In the event this Agreement is terminated or Buyer fails to
perform hereunder, Buyer shall promptly return to Seller any statements,
documents, schedules, exhibits and other written information obtained from
Seller in connection with this Agreement or the transaction contemplated herein.
It is understood and agreed that, with respect to any provision of this
Agreement which refers to the termination of this Agreement and the return of
the Deposit to Buyer, Twenty-Five Thousand Dollars ($25,000) of the Deposit
shall not be returned to Buyer unless and until Buyer has fulfilled its
obligation to return to Seller the materials described in the preceding sentence
and the Buyer's Reports in accordance with Section 6.5. The provisions of this
Section 6.2.4 shall survive Closing or any termination of this Agreement.
6.3 Title Review. The period commencing as of the Effective Date
and continuing through the date which is twenty (20) days following the
Effective Date shall be referred to as the "TITLE REVIEW PERIOD".
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6.3.1 Title Material. Promptly following the Effective Date,
Seller will obtain and deliver to Buyer a current preliminary title report
("TITLE REPORT") for the Real Property prepared by the Title Company, together
with a copy of the documents listed as exceptions therein. Buyer, at its
election, and at its cost, may obtain a survey ("SURVEY") of the Real Property
prepared by a licensed engineer which Survey shall be sufficient to provide the
basis for an ALTA owner's policy of title insurance. The Survey shall be
obtained by Buyer, if at all, prior to the expiration of the Title Review Period
and, if obtained, Buyer shall promptly deliver a copy of the Survey to Seller
and the Title Company. It is acknowledged that Buyer will not be entitled to
obtain an ALTA title insurance policy with respect to the Real Property if Buyer
elects not to obtain a Survey with respect to such Real Property.
6.3.2 Review of Title. Buyer shall notify Seller in writing
(the "TITLE NOTICE") prior to the expiration of the Title Review Period which
exceptions to title as shown on the Title Report and Survey, if any, will not be
accepted by Buyer. If Buyer fails to notify Seller in writing of its disapproval
of any exceptions to title by the expiration of the Title Review Period, Buyer
shall be deemed to have approved the condition of title to the Real Property. If
Buyer notifies Seller in writing that Buyer objects to any exceptions to title,
Seller shall have two (2) business days after receipt of the Title Notice (but,
in no event, later than two (2) business days prior to the Due Diligence Date)
to notify Buyer (a) that Seller will remove such objectionable exceptions from
title on or before the Closing, provided that Seller may extend the Closing for
such period as shall be required to effect such cure, but not beyond ten (10)
days; or (b) that Seller elects not to cause such exceptions to be removed. If
Seller fails to timely give such notice to Buyer, the Seller shall be deemed to
have given notice to Buyer under clause (b). Seller shall have no obligation to
remove any title exceptions to which Buyer objects provided, however, that
Seller shall remove, as of the Closing, all liens evidencing any deed of trust
(and related documents) securing financing. The procurement by Seller of a
commitment for the issuance of the Buyer's Title Policy (as defined in Section
3.2 hereof) or an endorsement thereto insuring Buyer against any title exception
which was disapproved pursuant to this Section 6.3.2 shall be deemed a cure by
Seller of such disapproval. If Seller gives or is deemed to have given Buyer
notice under clause (b) above, Buyer shall have two (2) business days from the
date on which such notice to Buyer is given (but in no event later than the Due
Diligence Date) in which to notify Seller that Buyer will nevertheless proceed
with the purchase and take title to the Property subject to such exceptions, or
that Buyer will terminate this Agreement. If Buyer fails to timely give such
notice, Buyer will be deemed to have elected to proceed with the purchase and
take title to the Property subject to such exceptions. If this Agreement is
terminated pursuant to the foregoing provisions of this Section 6.3.2, then
neither party shall have any further rights or obligations hereunder (except
with respect to those matters expressly stated to survive such termination), the
Deposit shall be returned to Buyer and each party shall bear its own costs
incurred hereunder.
6.3.3 Subsequent Title Defects. Buyer may, at or prior to
Closing, notify Seller in writing (the "SUBSEQUENT TITLE DEFECTS NOTICE") of any
objection(s) to title exceptions (a) raised by the Title Company between the
expiration of the Title Review Period and the Closing and (b) not disclosed by
the Title Company or otherwise known to Buyer prior to the expiration of the
Title Review Period, provided that Buyer must notify Seller of such objection(s)
to title within two (2) business days of being made aware of the existence of
such exception. If Buyer gives a Subsequent Title Defects Notice to Seller,
Seller shall have two (2) business days after receipt of the Subsequent Title
Defects Notice to notify Buyer (a) that Seller will remove such
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objectionable exceptions from title on or before the Closing, provided that
Seller may extend the Closing for such period as shall be required to effect
such cure, but not beyond ten (10) days; or (b) that Seller elects not to cause
such exceptions to be removed. If Seller fails to timely give such notice to
Buyer, Seller shall have been deemed to have given notice to Buyer under clause
(b). Seller shall have no obligation to remove any title exceptions to which
Buyer objects. The procurement by Seller of a commitment of the Title Company
for Buyer's Title Policy or an endorsement thereto insuring Buyer against any
title exception which was disapproved pursuant to this Section 6.3.3 shall be
deemed a cure by Seller of such disapproval. If Seller gives or is deemed to
have given notice under clause (b) above, Buyer shall have two (2) business days
from the date on which such notice to Buyer is given in which to notify Seller
that Buyer will nevertheless proceed with the purchase and take title to the
Property subject to such exceptions or that Buyer will terminate this Agreement.
If Buyer fails to timely give such notice, Buyer shall be deemed to have elected
to proceed with the purchase and take title to the Property subject to such
exceptions. If this Agreement is terminated pursuant to the foregoing provisions
of this Section 6.3.3 then neither party shall have any further rights or
obligations hereunder (except with respect to those matters expressly set forth
to survive such termination), the Deposit shall be returned to Buyer and each
party shall bear its own costs incurred hereunder.
6.4 Inspection; Right of Entry. Buyer and Buyer's agents,
contractors, engineers, consultants, employees and other representatives
(collectively, "BUYER'S REPRESENTATIVES") shall have the right, during the Due
Diligence Period and subject to the terms and conditions of Section 6.6 below,
(i) to enter the Real Property to inspect the same (including the performance of
environmental audits of the Real Property in accordance with the terms of
Section 6.4.1 and 6.4.2 below), upon reasonable notice to Seller, provided that
Buyer does not unreasonably disturb any business of Seller in connection with
the Property, (ii) to contact representatives of third parties who have executed
Service Contracts with Seller or Seller's representatives regarding the Real
Property; and (iii) to contact representatives of Seller's property manager, if
any, regarding the Property. Buyer shall keep the Property free and clear of any
mechanics' liens, materialmen's liens or claims arising out of any of Buyer's
activities or those of Buyer's Representatives on or with respect to the Real
Property. All entries onto the Real Property by Buyer and all inspections and
examinations thereof shall be at Buyer's sole cost and expense, shall be done in
a workmanlike manner in accordance with all applicable codes, statutes,
ordinances, rules, regulations and laws. Buyer shall not perform any test or
inspection or carry out any activity at the Real Property which damages the Real
Property in any way or which is physically intrusive into the Improvements or
soil of the Real Property without the prior written consent of Seller, which
Seller may withhold in its sole and absolute discretion. After each entry onto
any portion of the Real Property, Buyer, at its sole cost and expense shall
repair (which shall include replacement where necessary) any damage to the Real
Property arising from such entry. In connection with any inspections of the Real
Property, Buyer and Buyer's Representatives will carry liability insurance
adequate in Seller's reasonable judgement and, upon the request of Seller, will
provide Seller with written evidence of same. Buyer will give Seller reasonable
prior notice of its intention to conduct any inspections or tests with respect
to the Real Property and Seller reserves the right to have a representative
present.
6.4.1 Phase I Environmental Audit. During the Due Diligence
Period, Buyer may conduct (or have conducted on its behalf by an environmental
auditor) a Phase I
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environmental audit of the Real Property, subject to the terms and conditions of
Sections 6.4.2 and 6.6 below.
6.4.2 Environmental Conditions. In the event that Buyer shall
enter the Real Property for purposes of conducting a Phase I environmental audit
of the Real Property, Buyer shall provide Seller with at least forty-eight (48)
hours' prior written notice of its intent thereof. Buyer shall not conduct a
Phase II environmental audit of the Real Property without the prior written
consent of Seller which consent shall not be unreasonably withheld. Buyer shall
not disclose prior to Closing to any third party, other than Buyer's
consultants, agents and attorneys associated with any environmental
investigation of the Real Property, the results of any of Buyer's inspections or
testing of the Real Property. Prior to performing any environmental inspections
or testing of the Real Property, Buyer shall obtain any required permits and
authorizations and shall pay all applicable fees required by any public body or
agency in connection therewith.
6.5 Buyer's Reports. If the Escrow fails to close for any reason
other than Seller's material breach of this Agreement, then all studies, surveys
(including, without limitation the Survey), if any, reports, test results and
analyses concerning the Real Property prepared by, for or on behalf of Buyer in
connection with the Real Property (collectively, "BUYER'S REPORTS") shall at the
option of Seller, immediately be delivered and assigned to Seller free and clear
of all claims and at no cost, expense or liability to Seller. Buyer shall not be
required to deliver to Seller internally prepared reports or analyses concerning
the valuation or potential performance of the Real Property. Any Buyer's Reports
delivered to Seller at Seller's request pursuant to this Section 6.5 shall be
delivered without representation or warranty, nor shall Seller assert any
warranty or rights against the consultants of Buyer who have prepared such
Buyer's Reports.
6.6 Indemnity. Buyer shall indemnify, defend by counsel
reasonably acceptable to Seller, and hold Seller harmless from and against any
and all costs, expenses, claims, demands or liens, (including, without
limitation, mechanics' liens) including reasonable attorneys' fees, arising from
or in any fashion related to the entry by Buyer or Buyer's Representatives on
the Real Property or the performance by Buyer or Buyer's Representatives of any
testing or investigations of the Real Property except with respect to any loss
or liability incurred by Seller resulting from the mere discovery by Buyer or
Buyer's Representatives of the presence of hazardous materials at the Property
or the existence of other defects with respect to the Property. Without limiting
the scope or generality of the foregoing indemnity, Buyer shall not permit any
mechanics', materialman's, or other lien against all or any part of the Real
Property to exist as the result of any activity by Buyer or Buyer's
Representatives undertaken in connection with the Real Property. If any such
lien shall be filed against the Real Property or any portion of the Real
Property, Buyer shall cause the lien to be discharged within five (5) business
days after the filing thereof. The provisions of this Section 6.6 shall survive
the Closing and delivery of the Deed and shall further survive any earlier
termination of this Agreement.
6.7 Approval by Buyer. Buyer shall have the right to review and
approve, in its sole, absolute and subjective discretion, during the Due
Diligence Period all aspects of the Property, including but not limited to, (i)
the Due Diligence Materials, (ii) the physical and environmental condition of
the Real Property, including, without limitation, the condition of the
Improvements, the condition of the soil at the Real Property, the condition of
the ground water at the Real Property, and the presence or absence of any
hazardous materials at the Real Property,
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(iii) the financial condition of the Property, including, without limitation,
the feasibility, convertibility, desirability and suitability of the Property
for Buyer's intended use and purposes, (iv) the legal condition of the Property,
including, without limitation, the Property's compliance or non-compliance with
all statutes, ordinances, codes, regulations, decrees, orders and laws
applicable to the Property, (v) the Service Contracts, if any, being assumed by
Buyer, (vi) the existence or non-existence of any governmental or
quasi-governmental entitlements, if any, affecting the Property or any portion
of the Property, (vii) any dimensions or specifications of the Real Property or
any part thereof, (viii) the zoning, building and land use restrictions
applicable to the Real Property or any portion thereof, and (ix) all other
matters which Buyer deems relevant to its purchase of the Property. In the event
that Buyer elects to approve all of the matters as summarized in this Section
6.7 with respect to the Property, Buyer shall give written notice of such
approval to Seller ("APPROVAL NOTICE") on or before the Due Diligence Date. The
Approval Notice, if given by Buyer must be in the form of Exhibit 6.7 attached
hereto. If Buyer fails to timely give the Approval Notice to Seller, Buyer shall
conclusively be deemed to have disapproved the Property and more particularly
the matters set forth in this Section 6.7 in which case this Agreement shall
terminate, all rights and obligations hereunder of each party shall be at an end
(except those matters which are specifically stated in this Agreement to survive
the termination), the Deposit shall be promptly returned to Buyer and each party
shall bear its own costs incurred hereunder. If Buyer timely gives the Approval
Notice to Seller, then Buyer shall be considered to have elected to proceed with
the purchase of the Property in accordance with the provisions of this
Agreement, Buyer shall have no further rights with respect to this Section 6.7,
the conditions for the benefit of Buyer as set forth in Sections 7.2.5 and 7.2.6
shall be considered to have been satisfied and Buyer shall have no further
rights to assert the conditions set forth in such Sections.
7. CONDITIONS TO CLOSING.
7.1 Seller's Conditions. The obligation of Seller to sell and
convey the Property pursuant to this Agreement is subject to the satisfaction on
or before the Closing Date (or such earlier date as is specifically set forth in
this Agreement) of all of the following conditions precedent, which conditions
are for the benefit of Seller only and the satisfaction of which may be waived
only in writing by Seller:
7.1.1 Buyer's Deliveries. Delivery and execution by Buyer of
all monies, items and instruments required to be delivered by Buyer pursuant to
this Agreement;
7.1.2 Buyer's Representations. Buyer's warranties and
representations set forth herein shall be true and correct in all material
respects as of the Closing Date;
7.1.3 Buyer's Performance. Buyer shall have performed each
and every agreement to be performed by Buyer pursuant to this Agreement; and
7.1.4 Approval Notice. Buyer shall have timely given the
Approval Notice to Seller in accordance with the provisions of Section 6.7.
7.2 Buyer's Conditions. The obligation of Buyer to acquire the
Property pursuant to this Agreement is subject to the satisfaction on or before
the Closing Date (or such
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earlier date as is specifically set forth in this Agreement) of all of the
following conditions precedent which conditions are for the benefit of Buyer
only and the satisfaction of which may be waived only in writing by Buyer:
7.2.1 Seller's Deliveries. Delivery and execution by Seller
of all instruments and other items required to be delivered by Seller pursuant
to this Agreement;
7.2.2 Seller's Representations. Seller's warranties and
representations set forth herein shall be true and correct in all material
respects as of the Closing Date;
7.2.3 Seller's Performance. Seller shall have performed each
and every agreement to be performed by Seller pursuant to this Agreement;
7.2.4 Buyer's Title Policy. As of the Closing, the Title
Company shall have issued or shall have committed to issue, upon the sole
condition of the payment of its regularly scheduled premium, the Buyer's Title
Policy;
7.2.5 Buyer's Approval. On or before the Due Diligence Date,
Buyer shall have given the Approval Notice to Seller in accordance with the
provisions of Section 6.7; and
7.2.6 Intentionally Deleted.
7.3 Failure of Conditions. If any of the conditions set forth in
Sections 7.1 or 7.2 are not timely satisfied or waived, for any reason other
that the default of Buyer or Seller under this Agreement, then this Agreement
and the rights and obligations of Buyer and Seller shall terminate and be of no
further force or effect except as to those matters as specifically stated in
this Agreement to survive termination, in which case the Title Company is hereby
instructed to return promptly to the party which placed such items into Escrow
all funds (including the Deposit which is to be promptly returned to Buyer) and
documents which are held by the Title Company on the date of termination.
7.4 Satisfaction of Conditions. The occurrence of the Closing
shall constitute satisfaction of conditions set forth in Sections 7.1 and 7.2
not otherwise specifically satisfied or waived by Buyer or Seller.
8. DELIVERIES INTO ESCROW.
8.1 Deliveries by Seller. On or before the Closing, Seller shall
deliver or cause to be delivered into Escrow the following documents duly
executed and acknowledged where appropriate:
8.1.1 Deed. A grant deed (the "DEED") in the form attached
hereto as Exhibit 8.1.1 conveying the Real Property to Buyer as provided in this
Agreement which Deed is to be duly executed and acknowledged by Seller;
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8.1.2 Xxxx of Sale. Xxxx of sale ("XXXX OF SALE") in the form
attached hereto as Exhibit 8.1.2 conveying the Personal Property to Buyer which
Xxxx of Sale is to be duly executed by Seller;
8.1.3 Assignment. An Assignment in the form attached hereto
as Exhibit 8.1.3 which is to be duly executed by Seller and Buyer;
8.1.4 FIRPTA. A certificate of non-foreign status to confirm
that Buyer is not required to withhold part of the Purchase Price pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended which is to be
duly executed by Seller;
8.1.5 Form 590. Franchise Tax Board Form (590) which is to be
duly executed by Seller;
8.1.6 Seller's Authority. Such proof of Seller's authority
and authorization to enter into this Agreement and consummate the transaction
contemplated hereby and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Seller to act for and bind Seller as may be reasonably
required by Title Company or Buyer; and
8.1.7 Other Documents. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.
8.2 Deliveries by Buyer. On or before the Closing, Buyer shall
deliver or cause to be delivered into Escrow the following funds and documents
duly executed and acknowledged where appropriate:
8.2.1 Cash. The cash portion of the Purchase Price and such
additional sums as are necessary to pay the Buyer's share of closing costs,
prorations and any fees as more particularly set forth in Section 9 below;
8.2.2 Assignment. An Assignment which is to be duly executed
by Seller and Buyer;
8.2.3 Buyer's Affidavit. Buyer's Affidavit in the form
attached hereto as Exhibit 8.2.3 which is to be duly executed by Buyer;
8.2.4 Buyer's Authority. Such proof of Buyer's authority and
authorization to enter into this Agreement and consummate the transaction
contemplated by this Agreement, and such proof of the power and authority of the
individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer as may be reasonably
required by Title Company or Seller; and
8.2.5 Other Documents. Such other documents as may be
reasonably necessary and appropriate to complete the Closing of the transaction
contemplated herein.
8.3 Intentionally Deleted.
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8.4 Delivery to Buyer Upon Closing. Seller shall deliver
possession of the Property to Buyer upon the Closing.
8.5 Delivery Following Closing. Promptly following the Closing,
Seller shall deliver to Buyer: (i) the originals of the Service Contracts, if
any; (ii) all building plans and specifications with respect to the Real
Property which are in the possession of Seller or reasonably accessible to
Seller or its property manager; (iii) all structural reviews, architectural
drawings, engineering, soils, seismic, geologic and architectural reports in the
possession of Seller or reasonably accessible to Seller or its property manager;
and (iv) such other matters and documents in the possession of Seller or
reasonably accessible to Seller or to its property manager as Buyer may
reasonably request.
9. PRORATIONS; CLOSING COSTS; CREDITS.
9.1 Prorations.
9.1.1 Rent. Rents, revenues and other income from the
Property, if any, actually collected as of the Closing, shall be prorated
through Escrow as of 12:01 a.m. on the Closing Date with Seller entitled to the
prorated portion of such items attributable to the period prior to such date and
time and Buyer entitled to the prorated portion of such items following such
date and time. Nothing in this Section 9.1.1 shall restrict Seller's right to
collect delinquent rents directly from a tenant by any legal means. Delinquent
rent collected by Seller subsequent to the Closing shall be promptly paid to
Buyer to the extent that Buyer is entitled to such rent in connection with the
period on and after the Closing Date, and delinquent rent collected by Buyer
subsequent to the Closing shall be promptly paid to Seller to the extent that
Seller is entitled to such rent pursuant to the provisions of this Agreement
relating to the period prior to the Closing Date.
9.1.2 Taxes and Assessments. Except to the extent that real
estate taxes are paid directly by the tenant(s), all nondelinquent real estate
taxes on the Property shall be prorated through Escrow based on the actual
current tax xxxx as of 12:01 a.m. on the Closing Date with Seller responsible
for all such taxes attributable to the period prior to such date and time and
Buyer responsible for all such taxes attributable to the period following such
date and time. If after the Closing, supplemental real estate taxes are assessed
against the Property by reason of any event occurring prior to the Closing Date,
Buyer and Seller shall adjust the proration of the real estate taxes following
the Closing. Any delinquent taxes on the Property shall be paid at the Closing
from funds accruing to Seller. Any current installments with respect to
assessments on the Real Property shall be prorated through Escrow as of 12:01
a.m. on the Closing Date and Seller shall have no obligation to pay any amount
with respect to any such assessments other than the prorated current
installment. Any refund in connection with real estate taxes relating to the
Property attributable to the period prior to the Closing Date shall be paid to
Seller.
9.1.3 Operating Expenses. Operating expenses payable by the
owner of the Real Property and all other customary charges or costs incident to
the ownership of the Property shall be prorated through Escrow as of 12:01 a.m.
on the Closing Date. Seller shall be responsible for all operating expenses
accruing and
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attributable to the Property through the day prior to the Closing Date and Buyer
shall be responsible for all operating expenses accruing and attributable to the
Property commencing as of the Closing Date. Seller shall not assign to Buyer any
deposits which Seller has with any utility companies servicing the Property.
Buyer shall arrange with such companies to have accounts open in Buyer's name
beginning at 12:01 a.m. on the Closing Date. To the extent possible, Seller and
Buyer shall obtain xxxxxxxx and meter readings as of the Closing Date and all
operating expenses shall be prorated based upon the information then available.
Seller and Buyer shall make any adjustments required to be made subsequent to
the Closing in the event the information available at the Closing is incorrect.
9.1.4 Service Contracts. The amounts payable under the
Service Contracts which shall be assumed pursuant to the provisions of the
Assignment, shall be prorated through Escrow on an accrual basis as of 12:01
a.m. on the Closing Date. Seller shall pay all amounts due thereunder which
accrue prior to the Closing Date and Buyer shall pay all amounts accruing on the
Closing Date and thereafter. Buyer shall have no responsibility for Service
Contracts not specifically being assumed by Buyer pursuant to this Agreement.
Those Service Contracts which Buyer elects during the Due Diligence Period not
to assume by giving written notice of such election to Seller shall be
terminated by Seller as of the Closing, provided, however that with respect to
those Service Contracts which require a termination notice longer than that
allowed by reason of the date of the Closing (which in all events shall be no
greater than thirty (30) days notice) provided that Seller has given notice of
termination on or prior to the Closing Date, Buyer shall be responsible for the
obligations that relate to such terminated Service Contracts for the period from
and after the Closing Date and Seller shall be responsible for the obligations
that relate to the period prior to the Closing Date. Buyer shall have no
responsibility for Service Contracts which Buyer has elected not to assume for
any period in excess of thirty (30) days following the Closing Date. Seller
shall not be obligated to terminate the Service Contracts which Buyer has
elected not to assume prior to the Closing Date.
9.1.5 Calculation of Prorations. All prorations shall be made
on the basis of the actual number of days of the month which have elapsed as of
12:01 a.m. on the Closing Date.
9.1.6 Proforma Closing Statement. Buyer and Seller shall
reasonably cooperate to produce at least one business day prior to the Closing
Date, a schedule of prorations in accordance with the provisions of this
Agreement which is as complete and accurate as is then reasonably possible. All
prorations which can be reasonably estimated as of the Closing Date shall be
made in Escrow on the Closing Date. All other prorations and any adjustments to
the initial estimated prorations, shall be made by Buyer and Seller within
thirty (30) days following the Closing or such later time as may be reasonably
required, in the exercise of due diligence to obtain the necessary information.
Any net credit due one party from the other as the result of such post- Closing
prorations and adjustments shall be paid to the other in cash immediately upon
the parties' written agreement to a final schedule of post-Closing adjustments
and prorations. The provisions of Section 9.1 shall survive the Closing and the
recordation of the Deed.
9.2 Closing Costs.
9.2.1 Seller's Costs. Seller shall pay (i) the premium for
the standard coverage CLTA portion of the Buyer's Title Policy; (ii) fifty
percent (50%) of all documentary
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and transfer taxes; (iii) fifty percent (50%) of all escrow fees, costs and
recording costs; and (iv) its own attorneys' fees.
9.2.2 Buyer's Costs. Buyer shall pay (i) fifty percent (50%)
of all escrow fees, costs and recording costs; (ii) the incremental premium for
the ALTA portion of Buyer's Title Policy, if applicable, and the premium for any
endorsements; (iii) the premium for the Buyer's lender's title policy, if any;
(iv) fifty percent (50%) of all documentary and transfer taxes; (v) the cost of
the Survey, if applicable; and (vi) its own attorneys' fees.
9.3 Intentionally Deleted.
9.4 Other Expenses. Buyer and Seller shall each pay all legal and
professional fees and fees of other consultants incurred by Buyer and Seller,
respectively.
9.5 Late Recording. In the event that Buyer delivers into Escrow
the Cash Balance specified in Section 2.4 above but the recording time for
Closing occurs too late to permit Seller's net proceeds to be credited the same
day to Seller's bank account, then for each day after the Closing Date that
Seller has not received credit to Seller's bank account, Buyer shall pay to
Seller through Escrow one (1) day's interest on Seller's net proceeds at a rate
per annum equal to the "prime" lending rate of interest then in effect at Bank
of America.
10. OPERATION OF PROPERTY PENDING THE CLOSING. Following the
Effective Date and pending the Closing, the Seller shall operate the Property in
accordance with the following:
10.1 Normal Course of Business. Seller shall continue to operate,
manage and maintain the Property in such condition so that the Property shall be
in the same condition as of the Closing Date as it is as of the Effective Date,
reasonable wear and tear and casualty excepted. Seller shall maintain all
existing insurance policies in connection with the Property and shall keep in
effect and renew without modification all licenses, permits and entitlements
applicable to the Property. Seller's existing liability and property insurance
pertaining to the Property may be canceled by Seller as of the Closing Date;
10.2 Further Encumbrances. Seller shall not execute any documents
or otherwise take any action which will have the result of further encumbering
the Property in any fashion;
10.3 Intentionally Deleted; and
10.4 New Obligations. Without the prior written consent of Buyer,
which consent shall not be unreasonably withheld or delayed, Seller shall not
enter into any maintenance contract, service contract or any other contract
affecting or relating to the Property or any portion thereof which cannot be
canceled upon thirty (30) days (or less) prior written notice.
11. REPRESENTATIONS AND WARRANTIES.
11.1 No Representations or Warranties by Seller. Except as
expressly set forth in this Agreement, Seller has not made any warranty or
representation, express or implied, written
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or oral, concerning the Property.
11.2 Seller's Representations and Warranties. Seller represents
and warrants to Buyer that:
11.2.1 Authority. This Agreement constitutes the valid and
binding obligation of Seller and is enforceable against Seller in accordance
with its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforcement of creditors' rights generally and general equitable principles.
Seller is a corporation, validly formed, duly organized and in good standing
under the laws of the State of California. Seller has full power, right and
authority to enter into and perform this Agreement. The execution and delivery
of this Agreement, delivery of money and all required documents, Seller's
performance of this Agreement and the transaction contemplated hereby have been
duly authorized by the requisite action on the part of Seller. Neither the
execution and delivery of this Agreement, nor the transaction contemplated by
this Agreement will conflict in any material respect or constitute a breach
under any agreement or instrument by which Seller or the Property is bound;
11.2.2 Service Contracts. To Seller's knowledge, the Service
Contracts listed on Exhibit 1.3 are all of the agreements concerning the
operation and maintenance of the Property entered into by Seller and affecting
the Property, except those operating agreements that are not assignable and
except any agreement with Seller's property manager, which shall be terminated
by Seller as of the Closing;
11.2.3 Condemnation. To Seller's knowledge, Seller has
received no notice of any pending condemnation proceedings relating to the Real
Property;
11.2.4 Litigation. To Seller's knowledge, Seller has not
received notice of any litigation which has been filed against Seller that
arises out of the ownership of the Property and would materially affect the
Property or use thereof, or Seller's ability to perform hereunder;
11.2.5 Violations. To Seller's knowledge, Seller has not
received notice of any uncured violation of any federal, state or local law
relating to the use or operation of the Property which would materially
adversely affect the Property or use thereof, or Seller's ability to perform
hereunder. To Seller's knowledge, Seller has not received notice of any alleged
building code violations, health and safety code violations, federal, state or
local agency actions regarding environmental matters or zoning violations
currently affecting the Real Property which remain uncured;
11.2.6 Access. To the best of Seller's knowledge, no fact or
condition exists which may result in the termination or reduction of the current
access from the Real Property to existing roads and highways; and
11.2.7 Foreign Person. Seller is not a "foreign person" as
defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and
the income tax regulations issued thereunder.
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11.3 Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that:
11.3.1 Authority to Execute; Organization. This Agreement
constitutes the valid and binding obligation of Buyer and is enforceable against
Buyer in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles. Buyer represents that it is a corporation, is
validly formed and duly organized in good standing under the laws of the State
of Delaware and the execution of this Agreement, delivery of money and all
required documents, Buyer's performance of this Agreement and the transaction
contemplated hereby have been duly authorized by the requisite action on the
part of Buyer;
11.3.2 No Encumbrance. Prior to Closing, Buyer shall neither
encumber nor cause any liens to be created against the Property in any way, nor
shall Buyer, at any time, record this Agreement or a memorandum thereof; and
11.3.3 Principal; Financial Resources. Buyer is acting as a
principal in connection with the transaction as contemplated by this Agreement
and presently possesses, and will possess as of the Closing, the financial
resources to timely consummate the purchase and sale transaction contemplated by
this Agreement.
11.4 Knowledge Defined. References to the "knowledge" of Seller
shall refer only to the current actual knowledge of Xxxxxxxx X. Xxxxxxxxxxxx,
and shall not be construed, by imputation or otherwise, to refer to the
knowledge of any affiliate of Seller, to any property manager, or to any other
officer, agent, manager, representative or employee of Seller or any affiliate
thereof or to impose upon such person any duty to investigate the matter to
which such actual knowledge, or the absence thereof, pertains. Seller represents
that Xxxxxxxx X. Xxxxxxxxxxxx is the President of Seller and is active in the
management of the Property.
12. INDEMNIFICATION.
12.1 Indemnification of Buyer. Seller hereby agrees to indemnify
Buyer against, and to hold Buyer harmless from, all losses, damages, costs and
expenses whatsoever including without limitation reasonable legal fees and
disbursements, incurred by Buyer relating to the Property which arise, result
from or relate to (i) acts, occurrences or matters that took place prior to the
Closing to the extent that any such claim described in this clause (i) is
covered by the commercial general liability insurance policy maintained by
Seller or otherwise covered pursuant to applicable insurance coverage maintained
by Seller and in this connection Seller represents and warrants that Seller has
during the period of its ownership maintained and continues to maintain
commercial general liability insurance coverage; or (ii) any breach of any of
the representations or warranties of Seller set forth in Section 11.2 of this
Agreement subject, however, to the limitations of Section 16.4.
12.2 Defense of Claims Against Buyer. With respect to any claim
for which Buyer has requested indemnification under Section 12.1, Seller shall
be entitled to assume the defense of any related litigation, arbitration or
other proceeding, provided that Buyer may at its election and expense,
participate in such defense, and provided further that if there is any
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difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Seller's
counsel will, after consultation with Buyer's counsel, determine the actual
strategy, defense or counterclaim to be employed. At Seller's reasonable
request, Buyer will cooperate with Seller in the preparation of any defense for
any such claim and Seller will reimburse Buyer for any reasonable expenses
incurred in connection with such request. If Seller does not elect to assume the
defense of any such matter and such matter is defended by Buyer, Seller shall
have the right, at its sole expense, to employ separate counsel acceptable to
Buyer and participate in such defense, provided that if there is any difference
of opinion or strategy with respect to the defense of such action or the
assertion of counterclaims to be brought with respect thereto, Buyer's counsel
will, after consultation with Seller's counsel, determine the actual strategy,
defense and/or counterclaim to be employed.
12.3 Indemnification of Seller. Buyer hereby agrees to indemnify
Seller against, and to hold Seller harmless from, all losses, damages, costs and
expenses whatsoever including without limitation reasonable legal fees and
disbursements, incurred by Seller relating to the Property which arise, result
from or relate to (i) acts, occurrences or matters that take place subsequent to
the Closing to the extent that any such claim described in this clause (i) is
covered by the commercial general liability insurance policy maintained by Buyer
or otherwise covered pursuant to applicable insurance coverage maintained by
Buyer and in this connection Buyer represents and warrants that Buyer will
during the period of its ownership maintain commercial general liability
insurance coverage; or (ii) any breach of any of the representations or
warranties of Buyer set forth in Section 11.3 of this Agreement.
12.4 Defense of Claims Against Seller. With respect to any claim
for which Seller has requested indemnification under Section 12.3, Buyer shall
be entitled to assume the defense of any related litigation, arbitration or
other proceeding, provided that Seller may at its election and expense,
participate in such defense, and provided further that if there is any
difference of opinion or strategy with respect to the defense of such action or
the assertion of counterclaims to be brought with respect thereto, Buyer's
counsel will, after consultation with Seller's counsel, determine the actual
strategy, defense or counterclaim to be employed. At Buyer's reasonable request,
Seller will cooperate with Buyer in the preparation of any defense for any such
claim and Buyer will reimburse Seller for any reasonable expenses incurred in
connection with such request. If Buyer does not elect to assume the defense of
any such matter, and such matter is defended by Seller, Buyer shall have the
right, at its sole expense, to employ separate counsel acceptable to Seller and
participate in such defense, provided that if there is any difference of opinion
or strategy with respect to the defense of such action or the assertion of
counterclaims to be brought with respect thereto, Seller's counsel will, after
consultation with Buyer's counsel, determine the actual strategy, defense and/or
counterclaim to be employed.
13. CASUALTY OR CONDEMNATION.
13.1 Casualty. Prior to the Closing, and notwithstanding the
pendency of this Agreement, the entire risk of loss or damage by earthquake,
flood, landslide, fire or other casualty shall be borne and assumed by Seller,
except as otherwise provided in this Section 13.1. If, prior to the Closing, any
part of the Real Property is damaged or destroyed by earthquake, flood,
landslide, fire or other casualty, Seller shall immediately notify Buyer of such
fact. If such damage or destruction is "material", Buyer shall have the option
to terminate this Agreement upon
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notice to Seller given not later than ten (10) days after receipt of Seller's
notice. For purposes of this Section 13.1, "material" shall be deemed to be any
damage or destruction (i) where the costs of repair or replacement is estimated
to be One Hundred Thousand Dollars ($100,000.00), or more, or (ii) which Seller
reasonably estimates shall take more than ninety (90) days to repair. If Buyer
does not exercise this option to terminate this Agreement, or the casualty is
not material, neither party shall have the right to terminate this Agreement,
but Seller shall assign and turn over to Buyer, and Buyer shall be entitled to
receive and keep all insurance proceeds payable to it with respect to such
destruction (but not in excess of the Purchase Price) and the parties shall
proceed to the Closing pursuant to the terms hereof without modification of the
terms of this Agreement and without any reduction in the Purchase Price. If
Buyer does not elect to terminate this Agreement by reason of any casualty,
Buyer shall have the right to participate in any adjustment in the insurance
claim. If Buyer does terminate this Agreement pursuant to this Section 13.1,
this Agreement shall terminate, all rights and obligations hereunder of each
party shall be at an end (except those matters which are specifically stated in
this Agreement to survive the termination) and the Title Company is hereby
instructed to return promptly to the party which placed such items into Escrow
all funds (including the Deposit which is to be promptly returned to Buyer) and
documents which are held by the Title Company on the date of termination.
13.2 Condemnation. In the event that all or any substantial
portion of the Real Property shall be taken in condemnation or under the right
of eminent domain after the Effective Date and before the Closing, Buyer may, at
its option either (a) terminate this Agreement by written notice thereof to
Seller and receive an immediate refund of the Deposit, together with any
interest earned thereon, or (b) proceed to close the transaction contemplated
herein pursuant to the terms hereof in which event Seller shall assign and turn
over to Buyer, and Buyer shall be entitled to receive and keep all awards for
the taking by eminent domain which accrue to Seller and there shall be no
reduction in the Purchase Price. For purposes of this provision, a "substantial
portion" of the Real Property shall mean (i) any portion of the Real Property is
taken; (ii) the access to the Real Property or available parking area therefor
is materially reduced or restricted; or (iii) any of the rentable square footage
of the Improvements is taken. In the event that Buyer elects not to terminate
this Agreement, Buyer shall proceed to close the transaction contemplated herein
and there shall be no reduction in the Purchase Price and Seller shall assign
and turn over to Buyer and Buyer shall be entitled to receive and keep all
awards for the taking by eminent domain which accrue to Seller.
14. COMMISSIONS.
14.1 Payment of the Sales Commission. Seller represents and
warrants to Buyer that no real estate broker or agent has been authorized to act
on Seller's behalf. Buyer represents and warrants to the Seller that no real
estate broker or agent has been authorized to act on Buyer's behalf except for
Xx. Xxxx Picker of Show and Sell Realty. Seller shall pay through Escrow at
Closing to Show and Sell Realty as a real estate brokerage commission the amount
of One Hundred Thirty Five Thousand Three Hundred Forty Five Dollars
($135,345.00). Buyer and Seller each indemnifies the other party and agrees to
defend and hold the other party harmless from any and all demands or claims
which now or hereafter may be asserted against the other party for any brokerage
fees, commissions or similar types of compensation which may be claimed by any
broker as a result of the indemnifying party's acts in connection with this
transaction, except as otherwise provided herein.
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15. NOTICES.
All notices, requests or demands to a party hereunder shall be in
writing and shall be given or served upon the other party by personal service,
by certified return receipt requested or registered mail, postage prepaid, or by
Federal Express or other nationally recognized commercial courier, charges
prepaid, addressed as set forth below. Any such notice, demand, request or other
communication shall be deemed to have been given upon the earlier of personal
delivery thereof, three (3) business days after having been mailed as provided
above, or one (1) business day after delivery through a commercial courier, as
the case may be. Notices may be given by facsimile and shall be effective upon
the transmission of such facsimile notice provided that the facsimile notice is
transmitted on a business day and a copy of the facsimile notice together with
evidence of its successful transmission indicating the date and time of
transmission is sent on the day of transmission by recognized overnight carrier
for delivery on the immediately succeeding business day. Each party shall be
entitled to modify its address by notice given in accordance with this Section
15.
If to Seller: Limar Realty Corp. #23
c/o Limar Realty Group
0000 Xxxxx Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxxxx
Fax: (000) 000-0000
With a copy to: Xxx & Xxxxxx
000 Xxx Xxxxxxxxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Buyer: American Xtal Technology, Inc.
0000 Xxxxx Xxx
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxx, CFO
Fax: (000) 000-0000
16. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.
16.1 No Reliance on Documents. Except as expressly stated herein,
Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information delivered by Seller or its
agents to Buyer in connection with the transaction contemplated hereby. Buyer
acknowledges and agrees that all materials, data and information delivered by
Seller to Buyer in connection with the transaction contemplated hereby are
provided to Buyer as a convenience only and that any reliance on or use of such
materials, data or information by Buyer shall be at the sole risk of Buyer.
Neither Seller, nor any affiliate of Seller, nor the person or entity which
prepared any report or reports delivered by Seller to Buyer shall have any
liability to Buyer for any inaccuracy in or omission from any such reports.
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16.2 As-Is Sale: Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, 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,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
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.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO
THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY
EMPLOYEES OR AGENTS REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER
MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY
SET FORTH IN THIS AGREEMENT. BUYER ALSO ACKNOWLEDGES THAT THE PURCHASE PRICE
REFLECTS AND TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS-IS."
BUYER REPRESENTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY
OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE
EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY
HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY
SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER
OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH
IN THIS AGREEMENT. UPON CLOSING, 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,
SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) 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
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ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS,
VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS,
CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. BUYER HEREBY WAIVES THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 WHICH PROVIDES THAT:
"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 SELLER'S INITIALS
16.3 Material Change. Seller shall promptly notify Buyer of any
change in any condition with respect to the Property or any event or
circumstance which makes any representation or warranty of Seller as set forth
in Section 11.2 of this Agreement materially untrue or misleading or any
covenant of Seller under this Agreement incapable of being performed. In no
event shall Seller be liable to Buyer for, or be deemed to be in default
pursuant to this Agreement by reason of any inaccuracy of a representation or
warranty which results from any change that (i) occurs between the Effective
Date and the Closing Date; and (ii) is expressly permitted under the terms of
this Agreement or is beyond the reasonable control of Seller to prevent;
provided, however, that the occurrence of a material change which is not
permitted hereunder may constitute the non-fulfillment of the condition set
forth in Section 7.2.2 hereof. If, in spite of such nonfulfillment of the
conditions set forth in such Section 7.2.2 the Closing occurs, Seller's
representations and warranties set forth in this Agreement shall be deemed to
have been modified by all statements made in any notice or notices of
modification as given by Seller to Buyer pursuant to this Section 16.3 prior to
the Closing.
16.4 Survival of Seller's Representations and Warranties. The
representations and warranties of Seller set forth in Section 11.2 hereof (as
such may have been updated as of the Closing in accordance with Section 16.3) in
accordance with the terms of this Agreement, shall survive Closing for a period
of six (6) months. No claim for a breach of any representation or warranty of
Seller shall be actionable or payable if the breach in question results from or
is based on a condition, state of facts or other matter which was known to Buyer
prior to Closing. Seller shall have no liability to Buyer for a breach of any
representation or warranty (a) unless the valid claims for all such breaches
collectively aggregate more than One Hundred Thousand Dollars ($100,000), in
which event the amount of such valid claims in excess of One Hundred Thousand
Dollars ($100,000) shall be actionable, up to the Maximum (as defined in this
Section), and (b) unless written notice containing a description of the specific
nature of such breach shall have been given by Buyer to Seller prior to the
expiration of said six (6) month period and any action shall have been commenced
by Buyer against Seller within eight (8) months of Closing. Buyer agrees to
first seek recovery under any insurance policies, Service Contracts and the
Lease(s) prior to seeking recovery from Seller, and Seller shall not be liable
to Buyer if Buyer's remaining claim
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after recovery from such insurance policies, Service Contracts and/or Lease(s)
is less than One Hundred Thousand Dollars ($100,000.00). As used herein, the
term "MAXIMUM" shall mean the total aggregate amount of One Hundred Thousand
Dollars ($100,000.00).
16.5 Survival of Limitations. The provisions of this Article 16
shall survive Closing or any termination of this Agreement.
17. MISCELLANEOUS.
17.1 Time. Time is of the essence in the performance of each
party's obligations hereunder; however, if the final date of any period which is
set out in any provision of this Agreement falls on a Saturday, Sunday or legal
holiday under the laws of the United States or the State in which the Property
is located, then, in such event, the time of such period shall be extended to
the next day which is not a Saturday, Sunday or legal holiday.
17.2 Attorneys' Fees. If any legal action, arbitration or other
proceeding is commenced to enforce or interpret any provision of this Agreement,
the prevailing party shall be entitled to an award of its attorneys' fees and
expenses. The phrase "prevailing party" shall include a party who receives
substantially the relief desired whether by dismissal, summary judgment,
judgment or otherwise.
17.3 No Waiver. No waiver by any party of the performance or
satisfaction of any covenant or condition shall be valid unless in writing and
shall not be considered to be a waiver by such party of any other covenant or
condition hereunder.
17.4 Entire Agreement. This Agreement contains the entire
agreement between the parties regarding the Property and supersedes all prior
agreements, whether written or oral, between the parties regarding the same
subject. This Agreement may only be modified in writing.
17.5 Survival. The provisions of this Agreement shall not merge
with the delivery of the Deed but shall, except as otherwise provided in this
Agreement, survive the Closing.
17.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the heirs, executors, administrators and successors
and assigns of Seller and Buyer; provided, however, that subject to the
provisions of Section 17.16 hereof, neither party shall assign its rights and
obligations pursuant to this Agreement to any party without the prior written
consent of the other party, which consent may be withheld in its sole and
absolute discretion.
17.7 Severability. In the case that any one or more of the
provisions contained in this Agreement are for any reason held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
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17.8 Captions. Paragraph titles or captions contained in this
Agreement are inserted as a matter of convenience only and for reference, and in
no way define, limit, extend or describe the scope of this Agreement.
17.9 Exhibits. All exhibits attached hereto shall be incorporated
herein by reference as if set out herein in full.
17.10 Relationship of the Parties. The parties acknowledge that
neither party is an agent for the other party, and that neither party shall or
can bind or enter into agreements for the other party.
17.11 Governing Law. This Agreement and the legal relations
between the parties hereto shall be governed by and be construed in accordance
with the laws of the State of California.
17.12 Review by Counsel. The parties acknowledge that each party
and its counsel have reviewed and approved this Agreement, and the parties
hereby agree that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits hereto.
17.13 Non-Disclosure. The parties hereto shall not disclose any
of the material terms of this Agreement (except to the extent as may be required
by law or as required by the Title Company or to the officers, directors,
partners and employees of the parties hereto in the ordinary course of business)
without the prior written consent of the other party.
17.14 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original. This Agreement shall
only be effective if a counterpart is signed by both Seller and Buyer.
17.15 Filing of Reports. The 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 as
amended (and any similar reports or returns required under any state or local
laws) in connection with the Closing.
17.16 Tax Deferred Exchange. In connection with the transactions
contemplated by this Agreement, Seller may wish to engage in a tax deferred
exchange of the Real Property. Buyer agrees to reasonably cooperate with Seller
in connection with such exchange, provided, however, that (i) notwithstanding
any other provision of this Agreement to the contrary, Seller can elect to delay
the Closing for a period of up to thirty (30) business days; (ii) Buyer will not
be required to take title to any other real property; (iii) Buyer shall not
incur any additional liability by reason of such exchange; (iv) Seller will
indemnify and hold Buyer harmless for, from and against any claim, demand, cause
of action, liability or expense (including attorney's fees) in connection
therewith, including, without limitation, any increase in escrow fees or charges
resulting from such exchange; and (v) Seller acknowledges and agrees and that
Buyer has not made and will not make any representation or warranty as to the
effectiveness for tax purposes of any such exchange. Seller must notify Buyer at
least five (5) days before the contemplated date of Closing if Seller intends to
proceed pursuant to this Section 17.16.
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17.17 Licensed Real Estate Brokers. Buyer hereby acknowledges
that (a) Limar Financial Corporation ("LFC"), an affiliate of Seller, is a
licensed real estate broker under the laws of the State of California, (b)
Xxxxxx Xxxxxxxxxxx, Xxxxxxx X. Xxxxxxxx and X.X. (Bing) Xxxxxxx, officers of LFC
and Seller, are similarly so licensed and (c) no agency relationship has been
created between Seller and Buyer (or between LFC or Xxxxxx Xxxxxxxxxxx or
Xxxxxxx X. Xxxxxxxx or X.X. (Bing) Xxxxxxx and Buyer) with respect to the
transactions subject to this Agreement.
17.18 Third Party Beneficiaries. This Agreement is for the
benefit of Buyer and Seller and their respective agents, employees,
shareholders, officers, directors, partners and successors and no third party
shall be entitled to the benefit of any of the provisions of this Agreement.
17.19 Access. Following the Due Diligence Date and Buyer having
placed Deposit #2 into Escrow, Buyer may have access to the Property during
reasonable business hours for the purpose of preparing for its occupancy after
Closing. During such access period, Buyer shall not alter in any manner any
portion of the Property nor shall Buyer occupy any portion of the Property prior
to Closing.
18. DEFAULT.
18.1 Liquidated Damages. FROM AND AFTER THE EXPIRATION OF THE DUE
DILIGENCE PERIOD, IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED DUE TO A DEFAULT OF BUYER, THE DEPOSIT (INCLUDING
ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE PAID TO AND RETAINED
BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL
DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS
SECTION 18.1 BELOW, THE PARTIES ACKNOWLEDGE THAT THE NONREFUNDABLE DEPOSIT HAS
BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE
CLOSING DOES NOT OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER
ARISING FROM SUCH FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER SHALL PAY ALL
TITLE, SURVEY AND ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN
NO EVENT SHALL THIS SECTION 18.1 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY
AGAINST THE OTHER PARTY DUE TO (A) THE OTHER PARTY'S OBLIGATION TO INDEMNIFY
SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT, OR (B) THIRD PARTY CLAIMS. BY
THEIR SEPARATELY EXECUTING THIS SECTION 18.1 BELOW, BUYER AND SELLER ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED
DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE
CONSEQUENCES OF THIS
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LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.
BUYER'S INITIALS SELLER'S INITIALS
18.2 Default by Seller. In the event the sale of the Property as
contemplated hereunder is not consummated due to Seller's default hereunder,
Buyer shall be entitled, as its sole remedy, either (a) to receive the return of
the Deposit, which return shall operate to terminate this Agreement and release
Seller from any and all liability hereunder, or (b) to enforce specific
performance of Seller's obligation to convey the Property to Buyer in accordance
with the terms of this Agreement, it being understood and agreed that the remedy
of specific performance shall not be available to enforce any other obligation
of Seller hereunder. Buyer expressly waives its rights to seek damages in the
event of Seller's default hereunder. Buyer shall be deemed to have elected to
terminate this Agreement and receive back the Deposit if Buyer fails to file
suit for specific performance against Seller in a court having jurisdiction in
the county and state in which the Real Property is located, on or before thirty
(30) days following the date upon which Closing was to have occurred.
19. DEFINITIONS. For ease of reference, the defined terms as employed in
this Agreement and as listed below are defined in the designated sections:
19.1 "Agreement" as defined in the first paragraph.
19.2 "Approval Notice" as defined in Section 6.7
19.3 "Assignment" as defined in Section 1.3
19.4 "Xxxx of Sale" as defined in Section 8.1.2
19.5 "Buyer" as defined in the first paragraph.
19.6 "Buyer's Reports" as defined in Section 6.5
19.7 "Buyer's Representatives" as defined in Section 6.4
19.8 "Buyer's Title Policy" as defined in Section 3.2
19.9 "Closing" as defined in Section 5.1
19.10 "Closing Date" as defined in Section 5.1
19.11 "Deed" as defined in Section 8.1.1
19.12 "Deposit" as defined in Section 2.1
19.13 "Deposit #1" as defined in Section 2.1
19.14 "Deposit #2" as defined in Section 2.1
19.15 "Due Diligence Date" as defined in Section 6.1
19.16 "Due Diligence Materials" as defined in Section 6.2
19.17 "Due Diligence Period" as defined in Section 6.1
19.18 "Effective Date" as defined in the first paragraph.
19.19 "Escrow" as defined in Section 4.1
19.20 "Future Commission Obligations" as defined in Section 14.2
19.21 "Improvements" as defined in Section 1.1.2
19.22 "Intangible Property" as defined in Section 1.3
19.23 "LFC" as defined in Section 17.17
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19.24 "Land" as defined in Section 1.1.1
19.25 "Maximum" as defined in Section 16.4
19.26 "Permitted Exceptions" as defined in Section 3.3
19.27 "Personal Property" as defined in Section 1.1.3
19.28 "Property" as defined in Section 1.1
19.29 "Purchase Price" as defined in Section 2
19.30 "Real Property"" as defined in Section 1.2
19.31 "Seller" as defined in the first paragraph.
19.32 "Service Contracts" as defined in Section 1.3
19.33 "Subsequent Title Defects Notice" as defined in
Section 6.3.3
19.34 "Survey" as defined in Section 6.3.1
19.35 "Title Company" as defined in Section 4.1
19.36 "Title Notice" as defined in Section 6.3.2
19.37 "Title Report" as defined in Section 6.3.1
19.38 "Title Review Period" as defined in Section 6.3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
SELLER: BUYER:
Limar Realty Corp. #23, American Xtal Technology, Inc.
a California corporation a Delaware corporation
By: ______________________________ By: ___________________________
Xxxxxxxx X. Xxxxxxxxxxxx Name: ___________________________
President Its: ___________________________
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LIST OF EXHIBITS
Exhibit 1.1.1 - Legal Description of Land
Exhibit 1.3 (i) - Schedule of Service Contracts
Exhibit 6.2.1 - Delivered Materials
Exhibit 6.7 - Form of Approval Notice
Exhibit 8.1.1 - Form of Grant Deed
Exhibit 8.1.2 - Form of Xxxx of Sale
Exhibit 8.1.3 - Form of Assignment and Assumption Agreement
Exhibit 8.2.3 - Form of Buyer's Affidavit
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