Exhibit 10.1

 

OPTION AGREEMENT FOR

THE PURCHASE AND SALE OF REAL PROPERTY

 

FOR PROPERTIES LOCATED IN

KERN COUNTY AND KINGS COUNTY, CALIFORNIA

 

THIS OPTION AGREEMENT FOR THE PURCHASE AND SALE OF REAL PROPERTY (this
“Agreement”) is made and entered into as of October 31, 2016 (the “Effective
Date”), by and between each of RE ASTORIA LANDCO LLC, a Delaware limited
liability company, RE GARLAND LANDCO LLC, a Delaware limited liability company,
RE GARLAND A LANDCO LLC, a Delaware limited liability company, RE MUSTANG LANDCO
LLC, a Delaware limited liability company (each a “Seller” and collectively, the
“Sellers”), on the one hand, and RECURRENT ENERGY LANDCO LLC, a Delaware limited
liability company (“Buyer”), on the other hand.

 

RECITALS

 

A.                                    Landmark Infrastructure Operating Company
LLC, a Delaware limited liability company (“Landmark Operating Company”), and
Buyer are parties to that certain Purchase and Sale Agreement dated as of
October 12, 2016 (as the same may have been or may hereinafter be amended or
modified in accordance with its terms, the “Purchase and Sale Agreement”). 
Landmark Operating Company assigned all of its right, title and interest in and
to the Purchase and Sale Agreement to Landmark Infrastructure REIT LLC, a
Delaware limited liability company (“Landmark”) pursuant to that certain
Assignment and Assumption of Purchase and Sale Agreement dated as of October 25,
2016.  Pursuant to the Purchase and Sale Agreement, Buyer is selling, assigning,
transferring and conveying to Landmark (or its affiliate or
designee)(“Purchaser”) 100% of the equity interests (the “Equity Interests”) in
each Seller.

 

B.                                    Each Seller owns certain real property
interests located either in Kern County or in Kings County, State of California,
at the site as set forth opposite such Seller’s name on Exhibit A attached
hereto.  The legal description of the real property interests at each site
(each, a “Site”) are described on Exhibit B attached hereto (each a “Property”
and collectively, the “Properties”).

 

C.                                    Upon the closing of the transaction under
the Purchase and Sale Agreement, Purchaser shall become the owner of the Equity
Interests in each Seller, and each Seller in turn will continue to hold fee
title to the applicable Property set forth opposite the name of such Seller on
Exhibit A.

 

D.                                    Each Property is subject to an existing
ground lease in which a Seller is the lessor as described on Exhibit C attached
hereto (as the same may be amended, modified, supplemented from and after the
date hereof, each a “Ground Lease” and collectively, the “Ground Leases).

 

E.                                     In connection with the closing of the
transaction under the Purchase and Sale Agreement, Purchaser, as the holder of
100% of the Equity Interests in each Seller, has agreed to cause each Seller to
enter into this Agreement with Buyer, pursuant to which Sellers shall grant to
Buyer a one-time exclusive right, but not the obligation, to repurchase any or
all of the Properties from the applicable Seller(s) on the terms and conditions
set forth herein.

 

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NOW THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Seller and Buyer hereby agree as follows:

 

1.                                      Grant of Option to Purchase.  Each
Seller hereby grants to Buyer an exclusive and irrevocable option (with respect
to each Property, the “Option”) to purchase from such Seller and, if Buyer
exercises the Option, agrees to sell to Buyer, all of the Property (but not a
portion of any individual Property) owned by such Seller, subject to and upon
the terms, covenants and conditions set forth herein.  For avoidance of doubt,
if Buyer exercises an Option with respect to any one or more of the Properties
(i.e., the entire  Astoria Site, Garland Site, Garland A Site, or the Mustang
Site, as applicable) as described on Exhibit A and legally described on
Exhibit B, then the parties hereto agree and acknowledge that such exercise
means that Buyer intends to purchase and each applicable Seller that owns such
Property intends to sell all of the land (and not just some of the parcels of
land) comprising such Property or Properties.

 

2.                                      Option Consideration.  On the Effective
Date, Buyer shall pay to Sellers the amount of One Hundred Dollars ($100.00)
(the “Option Consideration”) by wire transfer to an account for the benefit of
Sellers as instructed by Sellers.  Any apportionment of the Option Consideration
among the Sellers shall be solely among Sellers and Buyer need not be concerned
therewith.  The Option Consideration shall be non-refundable upon payment by
Buyer to Sellers.  The parties acknowledge and agree that the Option
Consideration is adequate consideration paid by Buyer to Sellers for entering
into this Agreement.

 

3.                                      Option Period; Exercise of Option.

 

3.1                               Option Period.  The Option may only be
exercised with respect to a Property during a period commencing on the date that
is two (2) years prior to the “Repurchase Date” for the specific Property as set
forth on Exhibit D attached hereto and expiring as to that Property on the date
that is one (1) year prior to the Repurchase Date (for each Property, the
“Option Period”).

 

3.2                               Exercise of Option.  The Option may be
exercised with respect to a Property upon Buyer’s written Notice (as defined in
Section 17.4 below) to the applicable Seller of its election to exercise the
Option (an “Option Notice”) within the Option Period for that Property.  Such
Option Notice shall be deemed timely with respect to a Property if it is
transmitted by facsimile, delivered or mailed, by registered or certified mail,
return receipt requested, or via a nationally recognized overnight delivery
service to the applicable Seller in accordance with the Notice provisions of
Section 17.4 hereof within the Option Period for such Property.  If Buyer
delivers an Option Notice relating only to one or more, but not all, of the
Properties, Buyer’s Option to purchase the remaining Properties shall not be
terminated and Buyer shall continue to have the right to exercise the Option to
purchase any remaining Property or Properties, but only by timely exercising the
Option for remaining Property or Properties during the Option Period therefor. 
In the event that Buyer timely exercises the Option with respect to one or more
Properties, the applicable Seller of such Property(ies) shall sell to Buyer and
Buyer shall buy from such Seller the Property owned by such Seller, on the terms
and conditions established in this Agreement.  If Buyer does not timely exercise
the Option with respect to any Property prior to the expiration of the Option
Period therefor, the Option with respect to such Property shall automatically
terminate, the parties shall execute a writing in recordable form as reasonably
requested by the applicable Seller confirming such termination and Buyer shall
have no further right to purchase such Property.  In no

 

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event shall any Seller be required to provide Notice to Buyer of the expiration
(whether before or after) of the Option Period for any Property.

 

3.3                               Option Conditioned Upon Extension of Ground
Lease.  Notwithstanding anything to the contrary as set forth in this Agreement,
the exercise of the Option with respect to any Property shall be conditioned on
the exercise by the tenant under the Ground Lease of all renewal and/or
extension rights to extend the term of the Ground Lease for such Property to the
maximum term permitted under the Ground Lease in effect as of the Effective Date
so that the expiration of the term of such Ground Lease (but not including any
decommissioning period or license period, if any) occurs no earlier than the
Repurchase Date for such Property; provided, however, the expiration of the term
of a Ground Lease may occur after the applicable Repurchase Date so long as
Buyer has consented in writing to the extension of the term of such Ground
Lease, which consent shall not be unreasonably withheld, conditioned or
delayed.  For avoidance of doubt, if the term of the Ground Lease for a Property
expires or otherwise terminates for any reason (including by reason of a default
by the tenant thereunder, a rejection of the Ground Lease in any bankruptcy or
other insolvency proceeding, or any agreement between the landlord and tenant
thereunder that shortens the term of, or otherwise terminates, the Ground Lease,
none of which shall require the consent or approval of Buyer), then the Option
with respect to such Property shall automatically terminate, the parties shall
execute a writing in recordable form as reasonably requested by the applicable
Seller confirming such termination and Buyer shall have no further right to
purchase such Property.  Notwithstanding the foregoing, the Option with respect
to an applicable Property shall not terminate and shall continue in effect if
the Ground Lease with respect to such Property terminates as a result of a
default of the landlord under such Ground Lease or if the agreement (or
agreements pursuant to a series of transactions) that shortens the term of, or
otherwise terminates, such Ground Lease is a subterfuge by the landlord under
such Ground Lease primarily to avoid or terminate its obligations with respect
to the Option (i.e., without the primary purpose of furthering the landlord’s
other legitimate legal or business concerns).

 

4.                                      Purchase Price; Deposit.

 

4.1                               Purchase Price.  If Buyer is entitled to and
timely exercises the Option for a Property, the purchase price therefor shall be
a fixed price as shown on Exhibit D for such Property being repurchased (with
respect to each Property, the “Repurchase Price”) and the closing for such
Property shall occur on the Repurchase Date for such Property as set forth on
Exhibit D.  Within five (5) business days after the timely delivery by Buyer of
an Option Notice for a Property, Buyer shall deposit the amount of One Hundred
Twenty-Five Thousand Dollars ($125,000) as earnest money into the Escrow (as
defined in Section 12.2) pursuant to instructions to be provided by the
applicable Seller and Buyer, as consideration for the exercise of the Option for
such Property (with respect to each Property for which an Option has been
exercised, the “Purchase Option Deposit”) and the Purchase Option Deposit shall
be credited against the Repurchase Price for such Property at Closing (as
defined below).

 

4.2                               Additional Deposit.  If Buyer timely delivers
the Buyer’s Notice (as defined in Section 7 below) with respect to a Property,
Buyer shall deposit into the Escrow an additional amount of Two Hundred Fifty
Thousand Dollars ($250,000) (with respect to each Property for which a Buyer’s
Notice is delivered, the “Additional Deposit”) in cash or other immediately
available funds within two (2) business days following Buyer’s delivery of the
Buyer’s Notice for such Property.  The Purchase Option Deposit and the
Additional Deposit for a Property (if and when the Additional Deposit is
deposited into Escrow) are collectively referred to as the “Deposit.”  The
Deposit shall be held by the Escrow Agent (as

 

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defined in Section 12.4.2) in Escrow and invested in an account reasonably
satisfactory to Buyer, and all interest thereon, less any fees, if any, shall be
deemed a part of the Deposit.

 

5.                                      Due Diligence.

 

5.1                                           Buyer shall have the right during
the Option Period for a Property, and if Buyer delivers an Option Notice for a
Property, continuing until the earlier of (i) the Closing of the sale and
purchase of such Property or (ii) the termination of any purchase prior to the
Closing as provided below, to access such Property and to conduct due diligence
(“Due Diligence Period”), in each case, at its sole cost and expense, including,
but not limited to:  (a) the review of any documents for such Property in the
actual possession of the applicable Seller, other than any Confidential
Materials (as defined below), (b) a current preliminary title report prepared by
a title insurance company selected and ordered by Buyer (the “Title Company”)
for a standard coverage owner’s policy of title insurance for the Property (the
“PTR”) and copies of all documents referenced as exceptions therein
(collectively, the “Underlying Documents”), (c) a survey of the Property (the
“Survey”), which Buyer shall be responsible for obtaining (the PTR, the
Underlying Documents and the Survey shall be collectively referred to herein as
the “Title Documents”), and (d) a Phase I Environmental Site Assessment (“Phase
I”) and to otherwise conduct its due diligence of such Property as Buyer shall
deem necessary or appropriate (all such documents, agreements, reports,
materials and information, collectively, the “Diligence Documents”); provided,
however, that if Buyer desires to do any invasive (i.e., Phase II) testing at
any Property, Buyer shall do so only after notifying the applicable Seller and
obtaining such Seller’s prior written consent thereto, which consent shall not
be unreasonably withheld, conditioned or delayed.  Further, in the event Buyer
conducts any such invasive/Phase II testing, Buyer agrees in all events, unless
otherwise instructed in writing by the applicable Seller, to keep the results of
such testing confidential and to cause its employees, contractors, consultants
and agents to do the same.  Specifically, Buyer agrees not to disclose the
results of any such testing to any governmental agency or authority, without the
express written consent of the applicable Seller of such Property, provided that
the foregoing shall not be deemed or construed to require Buyer to violate any
applicable law or regulation.  Provided that Buyer has obtained the prior
consent or approval of the tenant under the Ground Lease for a Property, and
subject to the foregoing terms and conditions in the case of any proposed
invasive/Phase II testing, each Seller shall allow Buyer to have reasonable
access to its Property, at reasonable times and upon reasonable advance Notice
and, at such Seller’s election, accompanied by a representative of such Seller. 
In connection with Buyer’s due diligence during the Due Diligence Period, Buyer
acknowledges that Seller shall provide Buyer with copies of any then existing
Title Documents, Phase I and other environmental studies as to a Property that
are in the applicable Seller’s actual possession, other than any Confidential
Materials.  As used herein, “Confidential Materials” means books, records or
files (whether in a printed or electronic format) to the extent that they
consist of or contain any of the following:  market studies; strategic plans for
a Property; internal analyses; attorney and accountant work product;
attorney-client privileged documents; internal correspondence of Seller;
information relating to properties other than a Property; and agreements between
Seller and/or its affiliates relating to a Property that will be terminated as
to a Property at or prior to the Closing; and documents; and information and
agreements relating to Seller’s internal ownership for a Property.

 

5.2                                           Buyer shall keep each Property
free and clear of any liens (including, but not limited to, mechanics’ liens or
materialmen’s liens) arising out of Buyer’s entry onto or inspection of such
Property.

 

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5.3                                           Buyer shall obtain and shall cause
its consultants to obtain, at Buyer’s sole cost and expense, prior to the
commencement of any investigative or other activities on any Property, a policy
of commercial general liability insurance covering any and all liability of
Buyer and the applicable Seller with respect to or arising out of any such
investigation or other activities.  Such policy of insurance shall have
liability limits of not less than Five Million Dollars ($5,000,000), combined
single limit per occurrence for Buyer, and Three Million Dollars ($3,000,000)
combined single limit per occurrence for any consultant of Buyer, for bodily
injury, personal injury and property damage liability.  Such insurance policy
shall be on an occurrence (as opposed to claims made) basis, shall include the
Seller of such Property, the tenant of such Property and each of their
successors and assigns as an additional insured and shall be in form and
substance and issued by an insurance company authorized to insure in the State
of California and otherwise reasonably satisfactory to such Seller.  Buyer shall
provide to such Seller a certificate of insurance for said policy, complete with
all endorsements, prior to conducting any investigation activities on such
Seller’s Property.

 

5.4                                           Buyer shall indemnify and defend
each Seller of a Property, each tenant under a Ground Lease of such Property and
its each of their partners, employees, officers, directors, members,
shareholders, agents, contractors and representatives (collectively, the “Seller
Parties”) and hold the Seller Parties, and each of them, harmless from and
against any and all loss, cost, liability or expense whatsoever (including,
without limitation, attorneys’ fees with counsel selected by such Seller
Parties) (collectively, “Losses”) arising out of any damage to persons or
property occurring in or about such Property arising in any way from the
inspection or examination permitted by this Section 5; provided, however, that
the foregoing indemnity shall expressly exclude (a) any negligent acts or
omissions of any of the Seller Parties, or (b) any matters which are
pre-existing conditions of the Property that Buyer discovers during its
investigation of the Property, including, without limitation, any diminution in
value of the Property resulting from such discovery , unless Buyer exacerbates
any such pre-existing conditions, in which case the foregoing indemnity shall
expressly include Losses arising or resulting from such exacerbation.  For
purposes of the foregoing, “pre-existing conditions” shall include and not be
limited to, Buyer’s discovery of any environmental contamination of hazardous
substances located in, or, under or about the Property.  Buyer’s indemnification
obligation under this Section 5.4 sentence shall survive any termination of this
Agreement and shall also survive Closing.

 

6.                                      Buyer’s Acknowledgement; Waivers.  With
respect to any Property for which Buyer delivers an Option Notice, Buyer
acknowledges, agrees and covenants as follows (subject, in any event, to the
applicable Seller’s representations and warranties in Section 13 hereof (as such
representations and warranties may be deemed modified or waived by Buyer
pursuant to this Agreement, “Seller’s Warranties”)):

 

6.1                               AS-IS.  THE PROPERTY IS BEING SOLD TO BUYER IN
ITS PRESENT “AS IS, WHERE IS” CONDITION “WITH ALL FAULTS.”  THE PARTIES HEREBY
ACKNOWLEDGE AND AGREE AS FOLLOWS:  (A) BUYER IS A SOPHISTICATED BUYER WHO IS
FAMILIAR WITH REAL PROPERTY SUCH AS THE PROPERTY; AND (B) EXCEPT AS MAY BE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, NONE OF THE SELLER PARTIES HAS MADE OR
WILL MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL
OR WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY.  SUBJECT TO THE
TERMS HEREOF, BUYER HAS BEEN OR WILL BE AFFORDED THE OPPORTUNITY TO MAKE ANY AND
ALL INSPECTIONS OF SUCH PROPERTY AND SUCH RELATED MATTERS AS BUYER
MAY REASONABLY DESIRE AND, ACCORDINGLY, BUYER WILL RELY SOLELY ON ITS OWN DUE
DILIGENCE AND INVESTIGATIONS IN PURCHASING SUCH PROPERTY.

 

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6.2                               Waivers.  Buyer acknowledges and agrees that
Buyer will independently confirm to its satisfaction all information that it
considers material to its purchase of the Property (including, without
limitation, all Diligence Documents), and Buyer will not rely on any
representation or warranty by any Seller other than Seller’s Warranties set
forth in Section 13 hereof or otherwise furnished or made available to Buyer by
any Seller in determining the Repurchase Price for a Property.  In addition,
Buyer expressly understands and acknowledges that it is possible that unknown
liabilities may exist with respect to any Property and that Buyer will
explicitly take that possibility into account in determining and agreeing to the
Repurchase Price for such Property, and that a portion of such consideration,
having been bargained for between parties with the knowledge of the possibility
of such unknown liabilities shall be given in exchange for a full accord and
satisfaction and discharge of all such liabilities (subject, in any event, to
Seller’s Warranties).

 

7.                                      Closing Notice.  If after delivering an
Option Notice for a Property, Buyer determines not to proceed with the purchase
of such Property, then Buyer shall, no later than thirty (30) days before the
Repurchase Date for such Property, notify the applicable Seller of such Property
in writing that Buyer has elected to terminate the Option Notice and not to
proceed with the purchase of such Property, and upon such termination, the
Purchase Option Deposit for such Property shall become non-refundable and the
Escrow Agent shall automatically and without further instructions from Buyer
release the Purchase Option Deposit from Escrow to the applicable Seller of such
Property within five (5) business days, and neither party thereafter shall have
any further rights or obligations under this Agreement with respect to such
Property (except for any provisions which survive termination by their terms). 
If Buyer determines to proceed with the purchase of the Property, then Buyer
shall:  (a) no later than thirty (30) days before the Repurchase Date for such
Property, so notify the applicable Seller thereof in writing (“Buyer’s Notice”),
in which case Buyer shall be deemed to have approved all aspects of the
Property, including without limitation, all of the Diligence Documents,
(b) within two (2) business days following Buyer’s delivery of the Buyer’s
Notice deposit into the Escrow the Additional Deposit for such Property, and
(c) the entire Deposit shall become non-refundable (except in the event of a
breach by Seller under this Agreement, in which case Buyer may pursue the
remedies provided for in this Agreement by reason of a Seller default).  If
Buyer does not deliver a Buyer’s Notice within the time period specified above,
Buyer shall be deemed to have elected to not proceed with the purchase of such
Property, and within five (5) business days thereafter, the Escrow Agent shall
automatically and without further instructions from Buyer release the Purchase
Option Deposit for such Property from Escrow to the applicable Seller, and
neither party thereafter shall have any further rights or obligations under this
Agreement with respect to such Property (except for any provisions which survive
termination by their terms).  For avoidance of doubt, if Buyer terminates an
Option with respect to a Property, or fails to timely deliver Buyer’s Notice
with respect to such Property, in either case as provided above, the Option for
such Property shall automatically terminate, the parties shall execute a writing
in recordable form as reasonably requested by the applicable Seller confirming
such termination and Buyer shall have no further right to purchase such
Property.

 

8.                                      Conditions to Closing.  The following
provisions shall apply as to any Property for which Buyer delivers an Option
Notice and Buyer elects timely to proceed to Closing with the purchase of such
Property:

 

8.1                                                             Buyer’s Closing
Conditions.  The obligation of Buyer to complete the purchase of a Property
contemplated by this Agreement is subject to the following conditions precedent
(and conditions concurrent, with respect to deliveries to be made by the parties
at Closing) (the “Buyer’s

 

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Closing Conditions”), which conditions may be waived, or the time for
satisfaction thereof extended, by Buyer only in a writing executed by Buyer:

 

8.1.1                     Seller’s Representations and Warranties.  All of the
representations and warranties of the applicable Seller of such Property as set
forth in Section 13 hereof (and as the same may be updated as provided therein)
shall be true, correct and complete in all material respects as of the Closing
Date (as defined below).

 

8.1.2                     Due Diligence.  Buyer’s satisfactory completion of its
due diligence during the Due Diligence Period as provided in Section 5 above.

 

8.1.3                     Bankruptcy.  No action or proceeding shall have been
commenced by or against the applicable Seller of such Property under the federal
bankruptcy code or any state or provincial law for the relief of debtors or for
the enforcement of the rights of creditors, and no attachment, execution, lien
or levy shall have attached to or been issued with respect to such Seller’s
interest in such Property or any portion thereof and not fully satisfied and
released as of the Closing Date.

 

8.1.4                     Buyer’s Notice.  Buyer shall have timely delivered to
the applicable Seller the Buyer’s Notice for such Property as provided in
Section 7 above.

 

8.1.5                     Deliveries.  The applicable Seller shall have
delivered to Escrow or Buyer, as the case may be, such documents or instruments
as are required to be delivered by such Seller at the Closing pursuant to the
terms of this Agreement.

 

8.1.6                     Title Policy.  The Title Company shall be committed to
issue to Buyer an ALTA extended coverage owner’s policy of title insurance in
favor of Buyer (a) showing fee title to such Property vested in Buyer, (b) with
liability coverage in an amount equal to the Repurchase Price for such Property,
and (c) with those endorsements reasonably requested by Buyer (provided that
such endorsements are available in the State of California) (the “Owner’s Title
Policy”).

 

8.1.7                     Estoppel Certificates.  Except in the case where the
existing tenant/lessee of the Ground Lease for such Property is controlled by
Buyer, the applicable Seller shall have used commercially reasonable efforts to
deliver or cause to be delivered to Buyer an estoppel certificate substantially
in the form of Exhibit I attached hereto executed by each existing tenant/lessee
of the Ground Lease for such Property.

 

8.2                                                 Failure of Buyer’s Closing
Conditions.  If any of Buyer’s Closing Conditions with respect to a Property
have not been fulfilled in accordance with this Agreement, Buyer may:

 

8.2.1                     waive the Buyer’s Closing Condition and complete the
purchase of such Property in accordance with this Agreement, without adjustment
or abatement of the Repurchase Price for such Property; or

 

8.2.2                     at any time after delivery of Buyer’s Notice for such
Property, terminate its election under the Buyer’s Notice by written Notice to
Seller within five (5) business days of becoming aware that the Buyer’s Closing
Conditions have not been fulfilled (which is not caused by a breach of any of
the covenants or agreements contained in this Agreement to be complied with by
the

 

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applicable Seller or a breach of any representation or warranty of such Seller,
which breach shall be governed by Section 9.3), in which case (i) the Purchase
Option Deposit for such Property shall become non-refundable and the Escrow
Agent shall automatically and without further instructions from Buyer release
the Purchase Option Deposit from Escrow to the applicable Seller of such
Property within five (5) business days, (ii) neither party thereafter shall have
any further rights or obligations under this Agreement with respect to such
Property (except for any provisions which survive termination by their terms),
(iii) the last sentence of Section 7 above shall apply and (iv) Buyer shall pay
for all of the cancellation charges of the Title Company, if any.

 

8.3                                                 Seller’s Closing
Conditions.  The obligation of a Seller to complete the sale of its Property
contemplated by this Agreement is subject to the following conditions precedent
(and conditions concurrent, with respect to deliveries to be made by the parties
at Closing) (the “Seller’s Closing Conditions”), which conditions may be waived,
or the time for satisfaction thereof extended, by such Seller only in a writing
executed by such Seller:

 

8.3.1                     Buyer’s Representations and Warranties.  All of the
representations and warranties of Buyer as set forth in Section 14 hereof (and
as the same may be updated as provided therein) shall be true, correct and
complete in all material respects as of the Closing Date.

 

8.3.2                     Bankruptcy.  No action or proceeding shall have been
commenced by or against Buyer under the federal bankruptcy code or any state or
provincial law for the relief of debtors or for the enforcement of the rights of
creditors.

 

8.3.3                     Deliveries.  Buyer shall have delivered to Escrow or
the applicable Seller, as the case may be, such documents or instruments as are
required to be delivered by Buyer pursuant to the terms of this Agreement.

 

8.3.4                     Full Term of Ground Lease.  The term of the Ground
Lease for such Property shall not have expired or otherwise terminated for any
reason (including by reason of a default by the tenant thereunder, a rejection
of the Ground Lease in any bankruptcy or other insolvency proceeding, or any
agreement between the landlord and tenant thereunder that shortens the term of,
or otherwise terminates, the Ground Lease, none of which shall require the
consent or approval of Buyer); subject, however, to the last sentence of
Section 3.3 above.

 

8.4                                                 Failure of Seller’s Closing
Conditions.  If any of the Seller’s Closing Conditions have not been fulfilled
in accordance of this Agreement, Seller may:

 

8.4.1                     waive the Seller’s Closing Condition in accordance
with this Agreement, without adjustment of the Repurchase Price; or

 

8.4.2                     terminate its obligation to sell the Property pursuant
to Buyer’s Notice by written Notice to Buyer within five (5) business days of
becoming aware that the Seller’s Closing Conditions have not been fulfilled
(which is not caused by a breach of any of the covenants or agreements contained
in this Agreement to be complied with by Buyer or a breach of any representation
or warranty of Buyer, which breach shall be governed by Section 9.4), in which
case (i) the Purchase Option Deposit for such Property shall become
non-refundable and the Escrow Agent shall automatically and without further
instructions from Buyer release the Purchase Option Deposit from Escrow to the
applicable Seller of such Property within five (5) business days, (ii) neither
party thereafter shall have any further rights or

 

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obligations under this Agreement with respect to such Property (except for any
provisions which survive termination by their terms), (iii) the last sentence of
Section 7 above shall apply and (iv) Buyer shall pay for all of the cancellation
charges of the Title Company, if any.

 

9.                                      Termination Before Closing.  The sale
and purchase of a Property pursuant to a Buyer’s Notice may be terminated and
the transaction may be abandoned at any time prior to the Closing for such
Property:

 

9.1                               By mutual written agreement of the applicable
Seller and Buyer.

 

9.2                               By Buyer pursuant to Section 8.2.2 or by the
applicable Seller pursuant to Section 8.4.2.

 

9.3                               By Buyer upon written Notice to the
applicable  Seller if (a) such Seller shall have breached any of the covenants
or agreements contained in this Agreement to be complied with by such Seller
such that any closing condition set forth in Section 8.1 would not be satisfied,
or (b) there exists a breach of any representation or warranty of such Seller
contained in Section 13 such that the closing condition set forth in
Section 8.1.1 would not be satisfied prior to the Closing Date, in each case,
only if (i) Buyer shall have first given written Notice to such Seller
identifying such breach, and (ii) such Seller has not cured or remedied such
breach within ten (10) business days of receipt of such Notice; or

 

9.4                               By the applicable Seller upon written Notice
to Buyer if (a) Buyer shall have breached any of the covenants or agreements
contained in this Agreement to be complied with by Buyer such that any closing
condition set forth in Section 8.3 would not be satisfied, or (b) there exists a
breach of any representation or warranty of Buyer contained in Section 14 such
that the closing condition set forth in Section 8.3.1 would not be satisfied
prior to the Closing Date, in each case, only if (i) Seller shall have first
given written Notice to Buyer identifying such breach, and (ii) Buyer has not
cured or remedied such breach within ten (10) business days of receipt of such
Notice.

 

10.                               Effect Of Termination.  In the event of a
termination of the Buyer’s Notice for the sale and purchase of a Property as
provided in Section 9, the Buyer’s Notice for such Property shall cease to have
force and effect, and there shall be no further liability or obligation on the
part of the applicable Seller or Buyer, except that (a) the applicable
provisions of Section 8.2.2, Section 8.4.2, Section 9, this Section 10,
Section 11.1 (Buyer Default), Section 11.2 (Liquidated Damages), Section 11.3
(Buyer’s Remedy Upon Seller’s Default), and Section 17.9 (Public Statements)
shall continue to apply following any such termination, (b) in the event of a
termination by Buyer pursuant to Section 9.3, Buyer’s sole and exclusive remedy
shall be as set forth in Section 11.3, (c) in the event of a termination by
Seller pursuant to Section 9.4, Seller’s sole and exclusive remedy shall be the
receipt and retention of the Deposit as liquidated damages as set forth in
Section 11.1 and Section 11.2, and (d) nothing in this Section 10 or elsewhere
in the Agreement shall be deemed to release any party from liability (or any
limit thereof) for any fraud or willful breach of its obligations under this
Agreement in any material respect or from any of its obligations (including
indemnification) that expressly survive a termination.

 

11.                               Default.

 

11.1                        Buyer Default.  Should Buyer default under any of
the terms, covenants or conditions of this Agreement with respect to the
purchase of any Property pursuant to a Buyer’s Notice prior to Closing, the
applicable Seller shall have as its sole and exclusive remedy the right to
terminate

 

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the Buyer’s Notice with respect to such Property in accordance with Section 9
and to retain the Deposit as liquidated damages.

 

11.2                        Liquidated Damages.  IN THE EVENT THE TRANSACTION
CONTEMPLATED BY BUYER’S NOTICE FOR A PROPERTY IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, AS THE APPLICABLE SELLER’S
SOLE AND EXCLUSIVE REMEDY BY REASON OF SUCH DEFAULT BY BUYER, THE AMOUNT OF THE
DEPOSIT (COMPRISED OF THE PURCHASE OPTION DEPOSIT AND THE ADDITIONAL DEPOSIT,
PLUS ANY INTEREST) SHALL BE PAID TO AND RETAINED BY SUCH SELLER AS LIQUIDATED
DAMAGES, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY
WAIVED BY SUCH SELLER; AND FOR THE AVOIDANCE OF DOUBT, NO OTHER SELLER SHALL
HAVE ANY RIGHTS OR REMEDIES AGAINST BUYER UNLESS AND TO THE EXTENT OF A DEFAULT
UNDER THIS AGREEMENT ON THE PART OF BUYER WITH RESPECT TO SUCH OTHER SELLER AND
ITS PROPERTY.  THE PARTIES ACKNOWLEDGE THAT, IN THE EVENT THE TRANSACTION
CONTEMPLATED BY BUYER’S NOTICE FOR A PROPERTY IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, SUCH SELLER’S ACTUAL DAMAGES
BY REASON OF SUCH DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE
TO DETERMINE.  THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES
ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT FOR EACH PROPERTY HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF THE APPLICABLE
SELLER’S DAMAGES IN THE EVENT THE TRANSACTION CONTEMPLATED BY BUYER’S NOTICE FOR
SUCH PROPERTY IS NOT CONSUMMATED BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON
THE PART OF BUYER.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION SHALL
IN ANY WAY LIMIT ANY DAMAGES FOR WHICH BUYER IS OR MAY BE LIABLE AS SET FORTH
ELSEWHERE IN THIS AGREEMENT.

 

Seller:

  /s/ GD

 

Buyer:

  /s/ HKS

Seller:

  /s/ GD

 

 

Seller:

  /s/ GD

 

 

Seller:

  /s/ GD

 

 

 

11.3                        Buyer’s Remedy Upon Seller’s Default.  Should a
Seller default under any of the terms, covenants or conditions of this Agreement
with respect to the sale of its Property pursuant to a Buyer’s Notice prior to
Closing, Buyer shall have as its sole and exclusive remedies, only the
following: (a) the right to terminate the Buyer’s Notice in accordance with
Section 9 and receive a return of the Deposit; or (b) pursue a remedy of
specific performance, provided that any action for specific performance is
commenced within ninety (90) days after the occurrence of such default.

 

12.                               Closing.  The following provisions shall apply
as to any Property for which Buyer timely delivers an Option Notice and a
Buyer’s Notice:

 

12.1                        Closing Date.  Subject to the provisions of this
Agreement, closing of the sale and purchase of such Property (“Closing”) shall
take place at the office of the applicable Seller or the office of Escrow Agent
on the Repurchase Date (or if the Repurchase Date is not on a business day, on
the next business day thereafter, and before 11:00 a.m. local time, or such
other earlier date and time as Buyer and such Seller may mutually agree upon in
writing (the “Closing Date”).  As with respect to such transaction, time is of
the essence, and such date and time shall not be extended without the prior
written approval of both such Seller and Buyer.  In the event the Closing does
not occur on or before the

 

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Closing Date, the Title Company shall, unless it is notified by both parties to
the contrary within five (5) days after the Closing Date, return to the
respective party any items previously delivered by such party to the Title
Company, other than the Deposit for such Property, which shall continue to be
held by the Escrow Agent until returned to Buyer or otherwise delivered to such
Seller in accordance with the other provisions of this Agreement .  Any such
return of such items shall not, however, relieve either party of any liability
it may have for its wrongful failure to close.

 

12.2                        Deliveries by Seller.  On or before the Closing Date
for a Property, the applicable Seller, at its sole cost and expense, shall
deliver or cause to be delivered into the escrow established by the Title
Company (the “Escrow”) the following documents and instruments, each dated as of
the Closing Date, in addition to all other items and payments required by this
Agreement to be delivered by such Seller at Closing:

 

12.2.1              Grant Deed.  A duly executed and acknowledged Grant Deed
from such Seller with respect to such Property in the form attached hereto as
Exhibit F;

 

12.2.2              Property Documents.  All material, non-confidential and
non-attorney-client privileged, documents, agreements and correspondence
relating to the fee ownership of such Property, if any (which may be delivered
by such Seller to Buyer outside of Escrow on or prior to the Closing through an
electronic data room);

 

12.2.3              Non-Foreign Affidavit.  A non-foreign affidavit with respect
to the transfer of the Property in accordance with the requirements of Internal
Revenue Code Section 1445, as amended, a California Form 593, as amended, and/or
such other affidavits and certificates as may then exist as of the Closing Date
to comply with applicable tax reporting laws, executed by such Seller or, if
such Seller is disregarded for tax purposes, its parent company (the “Tax
Reporting Certificates”);

 

12.2.4              Closing Statement.  A Closing Statement (as hereinafter
defined) executed by such Seller;

 

12.2.5              Proof of Authority.  Certificates of good standing and
certified copies of certificate of formation of such Seller, together with such
proof of such Seller’s authority and authorization to execute and deliver the
instruments, documents or certificates provided for hereinto be delivered by
such Seller, and such proof of the power and authority of the
individual(s) executing or delivering any instruments, documents or certificates
on behalf of such Seller to act for and bind such Seller, as may be reasonably
required by the Title Company or Buyer;

 

12.2.6              Title Documents.  Such affidavits, indemnities and/or
similar certifications in customary form and executed by such Seller as maybe
required by the Title Company to issue the Owner’s Title Policy at the Closing;
provided, however, that such documents and instruments shall be in a form
reasonably acceptable to such Seller; and

 

12.2.7              Other.  Such other documents and instruments, signed and
properly acknowledged by such Seller, as may be reasonably required by Buyer
and/or the Title Company or otherwise in order to effectuate the sale of such
Property and Closing; provided, however, that such documents and instruments
shall be in a form reasonably acceptable to such Seller.

 

--------------------------------------------------------------------------------

 

12.3                        Deliveries by Buyer.  On or before the Closing Date
for a Property, Buyer, at its sole cost and expense, shall deliver or cause to
be delivered into Escrow the following funds, documents and instruments, each
dated as of the Closing Date, in addition to all other items and payments
required by this Agreement to be delivered by Buyer at Closing:

 

12.3.1              Purchase Price.  Cash in an amount equal to the Repurchase
Price for such Property (less the Deposit) and all of the Buyer’s Closing Costs
(and otherwise sufficient to close the transaction contemplated herein);

 

12.3.2              Closing Statement.  A Closing Statement executed by Buyer;

 

12.3.3              Proof of Authority.  Certificates of good standing and
certified copy of the certificates of formation of Buyer, together with such
proof of Buyer’s authority and authorization to enter into the purchase
transaction, and such proof of the power and authority of the
individual(s) executing or delivering any instruments, documents or certificates
on behalf of Buyer to act for and bind Buyer as may be reasonably required by
the Title Company or the applicable Seller; and

 

12.3.4              Other.  Such other documents and instruments, signed and
properly acknowledged by Buyer, if appropriate, as may reasonably be required by
the applicable Seller and/or the Title Company or otherwise in order to
effectuate the purchase of such Property and Closing; provided, however, that
such documents and instruments shall be in a form reasonably acceptable to
Buyer.

 

12.4                        Prorations.  With respect to the Closing of a
Property:

 

12.4.1              Rentals, revenues, and other income, if any, from such
Property, and ad valorem or real estate Taxes and assessments (collectively,
“Real Estate Taxes”), improvement bonds, utility costs, and other expenses
affecting such Property shall be prorated between Buyer and the applicable
Seller as of the Closing Date based on a 365-day year, if applicable.  Real
Estate Taxes shall be determined without regard to any increased assessment
resulting from the transactions contemplated by this Agreement or the
development or construction of such Property after the Closing Date.  For
purposes of calculating prorations, Buyer shall be deemed to be title holder of
such Property, and therefore entitled to the income and responsible for the
expenses, from and after 12:01 a.m. Pacific Standard Time on the Closing Date. 
Delinquent rentals as of Closing Date, if any, shall not be prorated, but any
rental paid to Buyer after Closing shall be applied first to such delinquent
rentals, if any, and Buyer shall deliver the rentals so applied to such Seller
within 30 days after receiving the same.  After Closing, any delinquent rent
shall remain the property of such Seller, but Buyer shall have no obligation to
collect such delinquent rent.  Notwithstanding the foregoing, any scheduled
payments that are not delinquent and that are received after Closing shall be
applied to the applicable period and prorated as of the Closing Date.  All
non-delinquent Real Estate Taxes  shall be prorated based on the actual current
tax bill, but if such tax bill has not yet been received by such Seller by the
Closing Date or if supplemental Real Estate Taxes are assessed after Closing for
the period prior to Closing, the parties shall make any necessary adjustment
after Closing by cash payment to the party entitled thereto so that such Seller
shall have borne all Real Estate Taxes, including all supplemental Real Estate
Taxes, allocable to the period prior to Closing and Buyer shall bear all real
property taxes, including all supplemental taxes, allocable to the period from
and after Closing.  If any expenses attributable to such Property and allocable
to the period prior to such Closing are discovered or billed after Closing, the
parties shall make

 

--------------------------------------------------------------------------------

 

any necessary adjustment after Closing by cash payment to the party entitled
thereto so that such Seller shall have borne all expenses allocable to the
period prior to Closing and Buyer shall bear all expenses allocable to the
period from and after Closing.  Upon Closing, and except as provided in this
Section 12.4.1, Buyer assumes all expenses and Real Estate Taxes, including all
supplemental Real Estate Taxes, allocable to the period from and after Closing. 
For the avoidance of doubt, nothing in this Section alters or modifies any
obligation of any tenant under any of the Ground Leases to pay Real Estate Taxes
to the extent required thereunder.  The provisions of this Section 12.4.1 shall
survive Closing.

 

12.4.2              The escrow officer handling the Escrow for the Title Company
(the “Escrow Agent”) shall deliver to each of the parties for their review and
approval a preliminary closing statement (the “Preliminary Closing Statement”)
setting forth:  (a) the proration amounts allocable to each of the parties
pursuant to Section 12.4 hereof; and (b) the Closing Costs allocable to each of
the parties pursuant to Section 12.5 hereof.  Based on each of the party’s
comments, if any, to the Preliminary Closing Statement, Escrow Agent shall
revise the Preliminary Closing Statement and delivered a final, fully executed
version of a closing statement to each of the parties as of Closing (the
“Closing Statement”).

 

12.5                        Closing Costs.  Each party shall pay its own costs
and expenses arising in connection with the Closing (including, without
limitation, its own attorneys’, consultants’ and advisors’ fees, charges and
disbursements), except the following costs (the “Closing Costs”), which shall be
allocated between the parties as follows:

 

12.5.1              all documentary transfer, land transfer, stamp, sales
(including harmonized sales or goods and services) and other taxes related to
the transfer of the Property, if any, which shall be paid by Buyer;

 

12.5.2              Escrow Agent’s escrow fees and costs, which shall be paid
one-half (½) by Seller and one-half (½) by Buyer;

 

12.5.3              the cost of any diligence conducted by Buyer shall be paid
by Buyer; and

 

12.5.4              the cost of the Owner’s Title Policy and the endorsements
thereto, which shall be paid by Buyer.

 

12.6                        Estoppel Certificate.  To the extent that the tenant
under the applicable Ground Lease for such Property is not controlled by Buyer,
the applicable Seller shall use commercially reasonable efforts to deliver or
cause to be delivered to Buyer an estoppel certificate substantially in the form
of Exhibit E attached hereto executed by such tenant under such Ground Lease
(the “Estoppel Certificate”); provided, however, that such Seller shall not be
deemed in breach or default hereunder if such tenant fails or refuses to deliver
such Estoppel Certificate or makes any changes thereto prior to executing and
delivering the same.

 

13.                               Seller’s Representations and Warranties.  Each
Seller severally and not jointly with any other Seller, represents and warrants
to, and agrees with Buyer, as of the Effective Date and as of the applicable
Closing Date for such Seller’s Property (if applicable), as follows (except to
the extent otherwise disclosed in writing by such Seller to Buyer at or prior to
such Closing Date):

 

--------------------------------------------------------------------------------

 

13.1                        Due Organization of Seller.  Such Seller is duly
organized/formed and existing in good standing under the laws of its state of
formation.  Such Seller is qualified to do business in the State of California.

 

13.2                        Seller’s Authority; Validity of Agreements.  Such
Seller has the full right, power and authority to grant the Option to Buyer to
purchase its Property as provided in this Agreement and to carry out its
obligations hereunder.  The individual(s) executing this Agreement on behalf of
such Seller has the legal power, right and actual authority to bind such Seller
to the terms hereof and thereof.  This Agreement has been duly authorized,
executed and delivered by such Seller and is the valid, binding and enforceable
obligation of such Seller (except as enforcement may be limited by bankruptcy,
insolvency or similar laws) and, to such Seller’s Knowledge (as hereinafter
defined), the execution and delivery of this Agreement by such Seller, and the
performance of their respective obligations hereunder, does not violate any
provisions of any agreement or judicial order to which such Seller is a party.

 

13.3                        Litigation.  To Seller’s Knowledge, (a) there are no
actions, suits, investigations or proceedings pending or threatened in writing
against such Seller, and (b) there are no judgments, orders, awards or decrees
currently in effect against such Seller or its Property.

 

13.4                        No Prior Options or Purchase Rights.  Subject to the
terms of the applicable Ground Lease, Seller has not granted any option or right
of first refusal or first opportunity to any party to acquire all or any portion
of its Property.

 

13.5                        Knowledge.  As used herein, the term “Seller’s
Knowledge” shall mean the actual knowledge, without any investigation or
inquiry, of the officer or manager within such Seller’s organization most likely
to have knowledge of the matters set forth herein, provided that in no event
shall any such officer or manager as set forth in this Section 13.5 have any
personal liability as a result of being designated a knowledge party hereunder. 
Notwithstanding anything to the contrary in this Section 13, the representations
and warranties of each Seller contained herein as to the due organization, valid
existence and good standing of such Seller and absence of litigation with
respect to such Seller and its Property, in each case as of the Effective Date
shall be qualified in their entireties and subject to the truth and accuracy of
the representations and warranties of Buyer as to such matters as set forth in
the Purchase and Sale Agreement, and no Seller shall be in breach or default
hereunder or be subject to any liability hereunder for such matters if any of
such Seller’s representations or warranties under this Section 13 as to its due
organization, valid existence and good standing and/or absence of litigation are
untrue, incomplete or incorrect as of the Effective Date as a result of a breach
by Buyer of its representations and warranties as to such matters under the
Purchase and Sale Agreement.

 

13.6                        Survival and Limitation of Liability.  All of the
representations, warranties and agreements of each Seller set forth in this
Agreement shall be true upon the Effective Date, shall be deemed to be repeated
at and as of each Closing Date for such Property (except as otherwise disclosed
in writing to Buyer prior to the Closing Date) and shall survive the Closing for
a period of one (1) year.  Buyer acknowledges and agrees that no Seller shall be
liable for the payment of any losses or damages (collectively, “Buyer Losses”)
suffered by Buyer as a result of any representation or warranty made by such
Seller under this Agreement pertaining to its Property being untrue, incomplete
or incorrect in any material fashion, until the aggregate amount of all such
Buyer Losses (as determined by a court of competent jurisdiction in a final and
non-appealable order) for such Property is equal to or greater than

 

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$100,000, whereupon such Seller shall be liable for all Buyer Losses in excess
of $100,000 and up to a maximum liability amount equal to ten percent (10%) of
the Repurchase Price for such Property (the “Cap”).  For the avoidance of doubt,
Buyer hereby expressly acknowledges and agrees that no Seller shall have any
obligation or liability for any Buyer Losses in an amount in excess of its
respective Cap or for a breach by any other Seller of its respective
representations, warranties and/or agreements.

 

14.                               Buyer’s Representations And Warranties.  Buyer
represents and warrants to each Seller, as of the Effective Date and as of each
applicable Closing Date, as follows (except to the extent otherwise disclosed in
writing by Buyer to such Seller at or prior to such Closing Date):

 

14.1                        Due Organization of Buyer.  Buyer is duly
organized/formed and existing in good standing under the laws of its state of
formation.  Buyer is qualified to do business in the State of California.

 

14.2                        Buyer’s Authority; Validity of Agreements.  Buyer
has full right, power and authority to enter into this Agreement as provided in
this Agreement and to carry out its obligations hereunder.  The
individual(s) executing this Agreement on behalf of Buyer have the legal power,
right and actual authority to bind Buyer to the terms hereof and thereof.  This
Agreement has been, duly authorized, executed and delivered by Buyer and is
valid, binding and enforceable obligations of Buyer (except as enforcement may
be limited by bankruptcy, insolvency or similar laws) and do not violate any
provision of any agreement or judicial order to which Buyer is a party or to
which Buyer is subject.

 

14.3                        Survival.  All of the representations, warranties
and agreements of Buyer set forth in this Agreement shall be true upon the
Effective Date, shall be deemed to be repeated at and as of each Closing Date
for a Property (except as otherwise disclosed in writing to Seller prior to the
Closing Date) and shall survive the Closing for a period of one (1) year.

 

15.                               Seller Covenants.

 

15.1.                     Between the Effective Date and earlier of (i) the
applicable Repurchase Date for a Property and (ii) the termination of the Option
or this Agreement with respect to such Property, Seller shall provide to Buyer
within a reasonable period of time after Seller’s receipt thereof, copies of any
material notices delivered to Seller under any Ground Lease.

 

15.2.                     Following the Effective Date, and unless the Option or
this Agreement terminates with respect to a Property, no Seller of a Property
shall enter into any amendment or other agreement that would extend the term of
the Ground Lease or otherwise grant to the tenant thereunder the right to extend
the term thereof, in either case beyond the Repurchase Date for such Property,
without the prior written consent of Buyer, which consent may be withheld in
Buyer’s sole and absolute discretion.

 

15.3.                     Between the Effective Date and the earlier of (i) the
applicable Repurchase Date for a Property and (ii) the termination of the Option
or this Agreement with respect to such Property, each Seller of a Property
agrees that, subject to the terms of each existing Ground Lease, such Seller
shall not sever, sell, lease or otherwise transfer any oil, gas, and other
hydrocarbon substances and mineral interests that may exist (if any), in, on, or
under its Property (collectively, the “Mineral Interests”), nor shall such
Seller agree to waive, amend, release or terminate any agreement or any material
provision of any agreement existing as of the Effective Date with respect to the
Mineral

 

--------------------------------------------------------------------------------

 

Interests, without the prior written consent of Buyer, which consent may be
withheld in Buyer’s sole and absolute discretion.

 

16.                               Grant of Easements.  The parties acknowledge
and agree that, pursuant to Section 3 of each Ground Lease with respect to a
Property, and, if applicable, the  Agreement Regarding Easement Form being
executed concurrently herewith by each Seller (such provisions of each such
Ground Lease and the Agreement Regarding Easement Form, collectively, the
“Easement/License Provisions”), from and after the date hereof, each applicable
Seller may, or may hereinafter be required to, grant (a) to third parties
(including local public utilities or service providers) non-exclusive easements
over, across and upon portions of its Property for purposes of ingress and
egress, roads, constructing a substation, overhead and underground utility
lines, communication lines and other related facilities and utilities for
interconnection, transmission and/or telecommunications purposes and/or (b) such
other easements and/or licenses for access, utilities, transmission and/or
telecom to other parties (including the tenant under a Ground Lease and to
owners of projects that are owned by affiliates of such tenant and located
within the near vicinity of such Property, utilities and certain others), in
each case as more particularly described and provided for in, and subject to the
terms of, the Easement Provisions (each, a “Future Easement/License”). 
Notwithstanding anything to the contrary contained herein, Buyer agrees that
each Seller shall be entitled to enter into and grant any and all such Future
Easement/Licenses in, on, over, under or across its Property or any portion
thereof, in each case without any consent or approval of Buyer, and the Option
for any such Property and Buyer’s right to purchase such Property upon exercise
of such Option shall automatically and without further action be subject and
subordinate to any such Future Easement/License so entered into and granted by
any such Seller in accordance with the Easement Provisions, and upon any
acquisition of a Property, Buyer shall accept title to such Property subject to
any such Future Easement/License then encumbering title to such Property.   The
foregoing shall be self-operative and no further instrument of subordination
shall be required; provided, however, that in confirmation of such
subordination, Buyer shall execute promptly any certificate or document that any
Seller may request for such purposes.

 

17.                               Miscellaneous Provisions.

 

17.1                        Governing Law.  This Agreement and the legal
relations between the parties hereto shall be governed by and construed and
enforced in accordance with the Laws of the State of California, without regard
to its principles of conflicts of law.

 

17.2                        Entire Agreement.  This Agreement, including the
exhibits attached hereto, constitutes the entire agreement between Buyer and
each Seller pertaining to the express subject matter hereof and supersedes all
prior agreements, understandings, letters of intent, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to
either party by the other party in connection with the subject matter hereof
except as specifically set forth herein or in the documents delivered pursuant
hereto or in connection herewith.

 

17.3                        Modification; Waiver.  No supplement, modification,
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.  No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.

 

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17.4                        Notices.  All notices, consents, requests, reports,
demands or other communications hereunder (collectively, “Notices”) shall be in
writing and may be given personally, by registered or certified mail, by
facsimile or by Federal Express (or other reputable overnight delivery service)
as follows:

 

To a Seller:

c/o Landmark Dividend LLC

 

2141 Rosecrans Avenue, Suite 2100

 

El Segundo, CA 90245

 

Attention: Legal Dept.

 

Telephone:

(424) 543-2061

 

Facsimile:

(424) 543-2061

 

 

 

To Buyer:

Recurrent Energy LandCo LLC

 

c/o Recurrent Energy, LLC

 

300 California Street, 7th Floor

 

San Francisco, CA 94104

 

Attention: Office of the General Counsel

 

Telephone:

(415) 675-1500

 

Facsimile:

(415) 675-1501

 

or to such other address or such other person as the addressee party shall have
last designated by notice to the other party.  All Notices shall be deemed to
have been given when received.  All Notices given by telecopy shall be followed
by the delivery of a hard copy of such Notice, provided that such Notice shall
be deemed to have been given when received by telecopy.

 

17.5                        Expenses.  Subject to the provision for payment of
the Closing Costs in accordance with the terms of Section 12.5 hereof and any
other provision of this Agreement to the contrary, whether or not the
transaction contemplated by this Agreement shall be consummated, all fees and
expenses incurred by any party hereto in connection with this Agreement shall be
borne by such party.

 

17.6                        Assignment By Buyer.  Buyer shall have the
unconditional right at its sole discretion, without the need to obtain the
approval of any Seller, to assign and/or transfer its interest in this Agreement
and its Option as to any one or more of the Properties to any person or entity
in one or more separate transactions; provided that the effectiveness of any
such assignment and/or transfer shall be conditioned upon Buyer and such
assignee/transferee recording in the real property records of the county in
which the applicable Property(ies) is/are located, an instrument evidencing such
assignment/transfer and providing written Notice thereof to Sellers, with a copy
of such recorded instruments.  Upon any such transfer/assignment by Buyer as
provided above and the express assumption by the assignee of the obligations
under this Agreement as to any Property or Properties, Buyer shall be released
and relieved of all of its obligations under this Agreement that relate to acts
or omissions that first occur after the effective date of such Transfer.

 

17.7                        Severability.  Any provision or part of this
Agreement which is invalid or unenforceable in any situation in any jurisdiction
shall, as to such situation and such jurisdiction, be ineffective only to the
extent of such invalidity and shall not affect the enforceability of the
remaining

 

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provisions hereof or the validity or enforceability of any such provision in any
other situation or in any other jurisdiction.

 

17.8                        Successors and Assigns; Third Parties.  Subject to
and without waiver of the provisions of Section 17.6 hereof, all of the rights,
duties, benefits, liabilities and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors and assigns. 
Except as specifically set forth or referred to herein, nothing herein expressed
or implied is intended or shall be construed to confer upon or give to any
person or entity, other than the parties hereto and their successors or
permitted assigns, any rights or remedies under or by reason of this Agreement. 
As used herein, “Seller” shall mean each Seller named herein for so long as it
is the fee owner of a Property and any future fee owner of a Property for so
long as he/she/it is the fee owner thereof.

 

17.9                        Public Statements.  Each of the parties hereto shall
not (and shall cause its affiliates not to) issue any press release or any
similar public statement regarding the transactions contemplated by this
Agreement unless both parties consent to such public statement (such consent
from either party shall not be unreasonably withheld, conditioned or delayed)
and have approved the contents of any such public statement; provided, however,
that the forgoing shall not apply to any disclosure that such party determines
is required or appropriate to meet disclosure obligations of such party under
applicable securities laws or stock exchange rules.

 

17.10                 Drafts Not an Offer to Enter Into a Legally Binding
Contract.  The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract.  The parties shall be legally bound
with respect to the granting of an Option to purchase each Properties pursuant
to the terms of this Agreement only if and when the parties have been able to
negotiate all of the terms and provisions of this Agreement in a manner
acceptable to each of the parties in their respective sole discretion,
including, without limitation, all of the Exhibits hereto, and each Seller and
Buyer have fully executed and delivered to each other a counterpart of this
Agreement, including, without limitation, all Exhibits hereto.

 

17.11                 Recording.  This Agreement shall not be recorded, but
concurrent with the execution hereof, Buyer and each Seller with respect to its
Property shall execute a memorandum of this Agreement for such Property in the
form attached hereto as Exhibit G, which Buyer may record in the real property
records of the county in which the Property is located (the “Memorandum”).  Upon
any termination of an Option or this Agreement prior to the Closing with respect
to a Property (herein, a “Termination”), Buyer covenants and agrees, both on its
own behalf and on behalf of its permitted successors and assigns, to execute and
deliver to the applicable Seller a quitclaim deed or other recordable instrument
sufficient to remove such Memorandum or other encumbrance created by this
Agreement from record title to such Property.  Buyer shall pay all costs and
expenses of recording any Memorandum, quitclaim deeds and other recordable
instruments recorded pursuant to this Section 17.11.

 

17.12                 Counterparts.  This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.  Signatures required under this Agreement may be transmitted by
facsimile or electronic mail and, once received by the party to the Agreement to
whom

 

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such signatures were transmitted, shall be binding on the party transmitting its
signatures as though they were an original signature of such party.

 

17.13                 Headings.  The Section headings of this Agreement are for
convenience of reference only and shall not be deemed to modify, explain,
restrict, alter or affect the meaning or interpretation of any provision hereof.

 

17.14                 Time of Essence.  Time shall be of the essence with
respect to all matters contemplated by this Agreement

 

17.15                 Further Assurances.  In addition to the actions recited
herein and contemplated to be performed, executed, and/or delivered by each
Seller and Buyer, each Seller and Buyer agree to perform, execute and/or deliver
or cause to be performed, executed and/or delivered at Closing or after Closing
for any Property any and all such further acts, instruments, deeds and
assurances as may be reasonably required to consummate the transaction
contemplated hereby.

 

17.16                 Number and Gender.  Whenever the singular number is used,
and when required by the context, the same includes the plural, and the
masculine gender includes the feminine and neuter genders.

 

17.17                 Construction.  This Agreement shall not be construed more
strictly against one party hereto than against any other party hereto merely by
virtue of the fact that it may have been prepared by counsel for one of the
parties.

 

17.18                 Exhibits.  All exhibits attached hereto are hereby
incorporated by reference as though set out in full herein.

 

17.19                 Attorneys’ Fees.  In the event that either party hereto
brings an action or proceeding against the other party to enforce or interpret
any of the covenants, conditions, terms or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
attorneys’ fees, charges, disbursements and the fees and costs of expert
witnesses.

 

17.20                 Business Days.  As used herein, the term “business day”
shall mean a day that is not a Saturday, Sunday or legal holiday in the State of
California.  In the event that the date for the performance of any covenant or
obligation under this Agreement shall fall on a Saturday, Sunday or legal
holiday, the date for performance thereof shall be extended to the next business
day.

 

17.21                 Waiver of Known Defaults.  Notwithstanding anything to the
contrary contained herein, in the event that either party hereto has actual
knowledge of the default of the other party (a “Known Default”) with respect to
a Property, but nonetheless elects to consummate the Closing of such Property,
then the rights and remedies of the non-defaulting party shall be waived with
respect to any such Known Default upon the Closing of such Property and the
defaulting party shall have no liability to the non-defaulting party with
respect thereto.

 

17.22                 No Course of Dealing. Each Seller has entered into this
Agreement on the express understanding with Buyer that in entering into this
Agreement such Seller is not establishing any course of dealing with Buyer and,
for the avoidance of doubt, except as expressly set forth herein, no

 

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action shall be deemed to create a binding future obligation of such Seller or
course of dealing pursuant to this Agreement.

 

17.23                 Currency.  All reference to currency in this Agreement
shall be deemed to be reference to United States dollars.

 

17.24                 No Registration of Agreement.  Except as permitted by
Section 17.11, Buyer shall not register this Agreement or any notice of this
Agreement on title to any Property.

 

[Remainder of Page Left Blank Intentionally]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

SELLERS:

 

 

 

 

 

RE ASTORIA LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

/s/ George P. Doyle

 

 

Name: George P. Doyle

 

 

Title: Authorized Signatory

 

 

 

RE GARLAND LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ George P. Doyle

 

 

Name: George P. Doyle

 

 

Title: Authorized Signatory

 

 

 

 

RE GARLAND A LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ George P. Doyle

 

 

Name: George P. Doyle

 

 

Title: Authorized Signatory

 

 

 

 

RE MUSTANG LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ George P. Doyle

 

 

Name: George P. Doyle

 

 

Title: Authorized Signatory

 

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BUYER:

 

 

 

 

RECURRENT ENERGY LANDCO LLC,

 

a Delaware limited liability company

 

 

 

 

By:

/s/ Helen Kang Shin

 

 

Name: Helen Kang Shin

 

 

Title: Vice President

 

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