EXHIBIT 10.50

 

OPTION AGREEMENT FOR THE PURCHASE AND
SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS

 

This Option Agreement for the Purchase and Sale of Real Property and Escrow
Instructions (the “Agreement”), dated October 17, 2013, is entered into by and
between Spansion LLC, a Delaware limited liability company (“Optionor”), and
Watt Communities LLC, a California limited liability company (“Optionee”).
Optionor and Optionee are hereinafter sometimes individually referred to as a
“party” and collectively as the “parties”.

 

RECITALS

 

A.     Optionor is the owner of that certain real property consisting of
approximately twenty-four and one-half (24.5) acres located at 915 DeGuigne
Drive in the City of Sunnyvale (“City”), County of Santa Clara (“County”), State
of California which real property is legally described on Exhibit A-1 attached
hereto and which is depicted on Exhibit A-2 attached hereto, which Exhibits are
incorporated herein by this reference (the “Property”).

 

B.     The Property is improved with a submicron development center building
consisting of approximately 189,000 gross square feet (the “SDC”), a PG&E
transmission facility (the “Transmission Facility”), a headquarters building
containing approximately 265,000 square feet of office space, labs with a data
center and an on-site cafeteria (the “HQ Building”), and a warehouse building
containing approximately 17,000 square feet (“Building 943”). The Property is
part of a Superfund site, which is the subject of a tri-party agreement
(“Tri-Party Agreement”) between TRW, Philips Semiconductors, Inc. (“Philips”),
and Advanced Micro Devices, Inc. (“AMD”) for the cleanup and involves an on-site
ground water treatment facility and test wells, as more particularly described
in the Hazardous Materials Documents (defined below).

 

C.     After closing, Optionee intends to develop the Property with residential
dwelling units (each, a “Unit” and collectively, the “Units”), or may elect to
use the Property for commercial purposes.

 

D.     Optionee desires to acquire an option to purchase the Property from
Optionor, and Optionor desires to grant Optionee such an option to purchase the
Property. This Agreement sets forth the terms and conditions agreed upon between
Optionor and Optionee with respect to the option to purchase the Property and,
if and to the extent the option is exercised, the purchase and sale of the
Property.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

  

 
 

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AGREEMENT

 

1.     GRANT OF OPTION

 

Subject to the terms and conditions set forth in this Agreement, and the payment
by Optionee of the Option Consideration (as that term is defined below),
Optionor hereby grants to Optionee the exclusive right and option (the “Option”)
to purchase the Property in accordance with the terms and conditions of this
Agreement. The term of the Option (the “Option Term”) shall commence as of the
delivery of the Approval Notice (defined below), following deposit of the First
Installment (defined below) and the Second Installment (defined below) required
to be made under the terms of Article 2 below, and end on November 21, 2013 (the
“Option Expiration Date”), unless terminated earlier as set forth herein.
Optionee shall have the right to exercise the Option at any time during the
Option Term, by delivering to Optionor written notice stating that Optionee has
exercised the Option (“Option Exercise Notice”). Upon such exercise, this
Agreement shall become an effective purchase and sale agreement for the sale of
the Property by Optionor to Optionee. The Option Term may be extended only by
mutual agreement of Optionor and Optionee, evidenced by an executed, written
amendment to this Agreement.

 

2.     OPTION CONSIDERATION

 

Optionee agrees to pay to Optionor option consideration in the amount of One
Million Five Hundred Thousand Dollars ($1,500,000) (the “Option Consideration”),
as follows. No later than 5:00 p.m. Pacific Time on the day that is three (3)
business days after the execution of this Agreement by Optionee and Optionor,
Optionee shall deposit with Escrow Holder (as hereinafter defined) the first
installment of the Option Consideration in the amount of Five Hundred Thousand
and No/100 Dollars ($500,000) in immediately available funds (the “First
Installment”). If Optionee fails to deposit the First Installment as and when
required hereunder, this Agreement shall automatically terminate without notice,
and neither party shall have any further rights, duties or obligations under
this Agreement or with respect to the Property, except as otherwise specifically
set forth in this Agreement. Optionor and Optionee hereby instruct Escrow Holder
to place the First Installment in an interest bearing account, with all interest
thereon accruing to the benefit of the party entitled thereto. No later than
5:00 p.m. Pacific Time on the Approval Date (defined below), Optionee shall
deposit with Escrow Holder (as hereinafter defined) the second installment of
the Option Consideration in the amount of One Million Dollars ($1,000,000) in
immediately available funds (the “Second Installment”). If Optionee fails to
deposit the Second Installment on or before 5:00 p.m. Pacific Time on the
Approval Date, then in such event this Agreement shall be deemed terminated, and
neither party shall have any further rights, duties or obligations under this
Agreement or with respect to the Property, except as otherwise specifically set
forth in this Agreement. Escrow Holder is hereby irrevocably authorized and
instructed by the parties to release the entire amount of the First Installment
and Second Installment to Optionor, together with any accrued interest,
immediately after Optionee’s delivery of the Approval Notice. On and after the
Approval Date, the Option Consideration shall be nonrefundable to Optionee,
except where escrow fails to close due solely to a material default by Optionor
or as otherwise specifically provided in this Agreement. Provided the Option is
exercised in accordance with Article 1 above, the Option Consideration shall be
applied toward the Purchase Price at the Closing (hereinafter defined in Section
). Escrow Holder shall pay a portion of the Option Consideration in the amount
of One Hundred and No/100 Dollars ($100.00) (the “Independent Consideration”) to
Optionor upon the earlier of the Close of Escrow or the termination of this
Agreement for any reason. The Independent Consideration constitutes
consideration for this Agreement and Optionee’s rights under Section 4.1. The
obligation of Optionee to pay the Independent Consideration to Escrow Holder is
unconditional and shall survive any termination of this Agreement.

  

 
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3.     PURCHASE PRICE; PRICE PARTICIPATION

 

3.1     Purchase Price. The purchase price for the Property shall be
Seventy-Seven Million Dollars ($77,000,000) (the “Purchase Price”).

 

3.2     Payment of Purchase Price. The Purchase Price, plus an amount equal to
Optionee’s share of the closing costs and prorations as set forth in Section 8.4
below, less an amount equal to Optionor’s share of the closing costs and
prorations set forth in Section 8.4 below, and less the Option Consideration,
which is to be applied against the Purchase Price at Closing under the terms of
Article 2 above, shall be deposited by Optionee with Escrow Holder in
immediately available funds on or prior to the Closing Date (hereinafter
defined) (the “Closing Payment”). At the Closing, the Closing Payment shall be
disbursed to or for the benefit of Optionor.

  

 
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4.     INSPECTION AND RELATED MATTERS

 

4.1     Inspection. At all reasonable times (during business hours) prior to
November 7, 2013 (the “Approval Date”), and thereafter until the Close of Escrow
or the earlier termination of this Agreement, Optionee, its agents and
representatives shall be entitled to enter upon the Property, on prior
reasonable notice to Optionor, to perform inspections of the Property to
determine and evaluate, in Optionee’s sole and absolute discretion (i) the
feasibility of Optionee’s acquisition of the Property based on Optionee’s review
of the Property Documents (hereinafter defined), (ii) the physical condition of
the Property, including, without limitation, any hazardous materials survey, and
any other surveys, inspections, tests, studies and investigations relating to
physical, geological, engineering or environmental conditions of the Property
that Optionee conducts in accordance with the terms of this Agreement, it being
understood and agreed by Optionee that no physical testing for Hazardous
Materials (as hereinafter defined) shall be performed on the Property without
the express written consent of Optionor, which consent shall not be unreasonably
withheld or delayed, (iii) the feasibility of Optionee’s acquisition of the
Property based on its investigation, studies and reports (including, without
limitation, market studies and appraisals), (iv) the zoning of the Property, (v)
the grading of and any grading plans for the Property, and (vi) any other matter
or thing relating to or affecting the Property or Optionee’s intended use
thereof. Optionee acknowledges and agrees that all studies, inspections and
investigations conducted by Optionee have been and will be conducted at
Optionee’s sole cost, expense and risk, and Optionor shall have no obligation
with respect thereto except as otherwise expressly provided in this Agreement.
Within ten (10) business days after the opening of Escrow (defined below),
Optionor shall provide to Optionee, or otherwise make available to Optionee for
Optionee’s review, copies of all tests, surveys, approvals, maps, plans,
records, permits, correspondence with governmental agencies; engineering,
geological, soils, or other studies, tests, or reports; any environmental and
hazardous material reports and notices; all leases and contracts, if any,
affecting the Property and any amendments or side letters thereto; tax and
assessment statements; any documents regarding any filed or threatened
litigation affecting or relating to the Property; and any other material data
and information about the Property in Optionor’s possession or, to the extent
commercially reasonably available, control related to the operation of the
Property (collectively, the “Property Documents”). Except as specifically set
forth in Section 9.5 hereof, Optionor makes no representation or warranty with
respect to the accuracy or completeness of any of the Property Documents or any
of the Hazardous Materials Documents (defined below). Notwithstanding any other
provision of this Section 4.1, Optionor shall not be liable for the failure to
deliver or make available any Property Document which is otherwise available
prior to the Approval Date in public records located in the County of Santa
Clara (or of which Optionee actually obtains prior to the Approval Date a copy
through some other means), and no failure to deliver any Property Document
expressly referenced in this sentence shall give rise to any right to terminate
this Agreement or to any cause of action against Optionor or any other party. At
Optionee’s request, Optionor shall use commercially reasonable and diligent
efforts to obtain any Property Document specifically identified by Optionee that
is not in Optionor’s possession but under Optionor’s control (to the extent
commercially reasonably available) if such document is not otherwise available
in the public records located in the County of Santa Clara, the Regional Water
Quality Control Board, the Environmental Protection Agency, or any other local,
state, or federal office, agency, or authority. On or before 5:00 p.m. Pacific
Time on the Approval Date, Optionee may elect, in its sole and absolute
discretion, to deliver a written notice to Optionor approving the condition of
the Property and all Property Documents (the “Approval Notice”). If Optionee
fails to deliver the Approval Notice on or before such date, or if the Approval
Notice contains any qualifications or conditions (other than qualifications or
conditions already contemplated by this Agreement or otherwise agreed to by
Optionor in writing prior to the Approval Date), this Agreement shall be deemed
terminated, Optionor shall retain the Independent Consideration, which shall be
released by Escrow Holder to Optionor, but the remainder of the Option
Consideration and interest thereon shall be returned to Optionee, less the
amount of any applicable escrow cancellation charges, and neither party shall
have any further rights, duties or obligations under this Agreement or with
respect to the Property, except as otherwise specifically set forth in this
Agreement.

 

4.1.1     NHDS. Within ten (10) business days after the opening of Escrow,
Optionor shall provide or cause to be provided to Optionee (by e-mail
transmittal or otherwise), or otherwise make available to Optionee for
Optionee’s review, a copy of a Natural Hazard Disclosure Statement for the
Property prepared by a qualified expert (the “Expert”), in the form required by
California Civil Code Section 1103.2(a), setting forth the Expert’s
determination of whether the Property is subject to Sections 8589.3, 8589.4 or
51183.5 of the California Government Code or Sections 2621.9, 2694 or 4136 of
the California Public Resources Code. It is agreed that (i) Optionor will rely
solely and exclusively on the Expert to make such determination and (ii) without
limiting Optionor’s representations and warranties contained in Article 9, the
release set forth in Section 4.2.2 below shall include any failure of Optionor
to provide the disclosure required by California Civil Code Section 1103 et seq.
due to an error or omission of the Expert.

 

 

 
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4.2       Releases.

 

4.2.1     Except to the extent caused by a breach of a representation or
warranty of Optionor expressly set forth in Article 9 below, or the fraud or
intentional misconduct of any Optionor Indemnitees, or the breach of Optionor’s
covenants or indemnities contained herein or in the Lease (defined below), or
third party claims made by employees of Optionor or any of the other Optionor
Indemnitees, Optionee on behalf of itself and its successors and assigns waives
its right to recover from, and forever releases and discharges, Optionor
Indemnitees (hereinafter defined), from any and all demands, claims, legal or
administrative proceedings, suits, losses, liabilities, damages, penalties,
obligations, fines, liens, causes of action, judgments, settlements, injunctive
relief, injury to persons, natural resources or property (including without
limitation claims for loss of property values and claims for “stigma” related
damages), costs or expenses whatsoever (including, without limitation,
reasonable attorneys' fees and costs), whether direct or indirect, known or
unknown, foreseen or unforeseen (collectively, “Claims and Damages”), that may
arise on account of or in any way be connected with the physical condition of
the Property, the presence of Hazardous Materials (hereinafter defined) in, on,
under, or about the Property, any patent or latent condition affecting the
Property, or any law or regulation applicable thereto, including, without
limitation, any Hazardous Materials Laws (hereinafter defined). As used in this
Agreement, the term “Optionor Indemnitees” shall mean and include (i) Optionor;
(ii) Optionor's members, and any entity controlling, controlled by, or in common
control of Optionor or Optionor’s members (“Optionor’s Affiliates”); (iii)
Optionor’s managers, directors, officers, employees, representatives and agents
(“Optionor’s Agents”); and (iv) all of their respective heirs, successors,
personal representatives and assigns.

 

4.2.2     Except to the extent caused by a breach of a representation or
warranty of Optionee expressly set forth in Article 10 below, or the fraud or
intentional misconduct of Optionee, or the breach of Optionee’s covenants or
indemnities contained herein or in the Lease (defined below), Optionor and
Optionor Indemnitees on behalf of themselves and their successors and assigns
waive their rights to recover from, and forever release and discharge, Optionee
and Optionee’s Indemnitees (hereinafter defined), from any and all Claims and
Damages that may arise on account of or in any way be connected with the
physical condition of the Property, the presence of Hazardous Materials
(hereinafter defined) in, on, under, or about the Property, any patent or latent
condition affecting the Property, or any law or regulation applicable thereto,
including, without limitation, any Hazardous Materials Laws (hereinafter
defined). As used in this Agreement, the term “Optionee Indemnitees” shall mean
and include (i) Optionee; (ii) Optionee's members, and any entity controlling,
controlled by, or in common control of Optionee or Optionee’s members
(“Optionee’s Affiliates”); (iii) Optionee’s managers, directors, officers,
employees, representatives and agents (“Optionee’s Agents”); and (iv) all of
their respective heirs, successors, personal representatives and assigns.

 

4.2.3     In connection with Section 4.2.1 and Section 4.2.2 above, and
elsewhere as expressly provided for in this Agreement, Optionee and Optionor
each hereby expressly waives the benefits of Section 1542 of the California
Civil Code, which provides as follows:

  

 
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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

Optionee’s Initials _____    Optionor’s Initials _____

 

The foregoing release shall survive the Closing and/or any termination of this
Agreement.

 

4.3     Hazardous Materials Definition, Disclosure, and Assignment.

 

4.3.1     As used in this Agreement, the term “Hazardous Materials” means and
includes any flammable, explosive, or radioactive materials or hazardous, toxic
or dangerous wastes, substances or related materials or any other chemicals,
materials or substances, exposure to which is prohibited, limited or regulated
by any applicable federal, state, county, regional or local authority (each, an
“Authority” and, collectively, “Authorities”) or which, even if not so
regulated, may or could pose a hazard to the health and safety of the occupants
of the Property or of property adjacent to the Property, including, but not
limited to, asbestos, PCBs, petroleum products and by-products, infectious
substances or raw materials which include hazardous constituents, substances
defined or listed as “hazardous substances” or “toxic substances” or similarly
identified in, pursuant to, or for purposes of, the California Solid Waste
Management, Resource Recovery and Recycling Act (California Government Code
Section 66700, et seq.), the Comprehensive Environmental Response, Compensation,
and Liability Act, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.),
Section 25117 or Section 25316 of the California Health & Safety Code; and any
so-called “Superfund” or “Superlien” law, or any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material; or any substances or
mixture regulated under the Toxic Substance Control Act of 1976, as now or
hereafter amended (15 U.S.C. Section 2601, et seq.); and any “toxic pollutant”
under the Clean Water Act, as now or hereafter amended (33 U.S.C. Section 1251,
et seq.); and any hazardous air pollutant under the Clean Air Act, as now or
hereafter amended (42 U.S.C. Section 7401 et seq.). The term “Hazardous
Materials Laws” means any applicable federal, state or local law, code, statute,
ordinance, rule, regulation, rule of common law or guideline relating to
Hazardous Materials now or hereafter enacted or promulgated (collectively, and
including, without limitation, any such laws which require notice of the use,
presence, storage, generation, disposal or release of any Hazardous Materials to
be provided to any party).

  

 
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4.3.2     Optionee hereby acknowledges and agrees that Optionor has disclosed to
Optionee the fact that the Property is a Superfund site, and further
acknowledges and agrees that although Optionor shall deliver copies of certain
documents in Optionor’s possession or, to the extent commercially reasonably
available, control pertaining to the Hazardous Materials condition of the
Property (collectively, the “Hazardous Materials Documents”), except as provided
in Article 9 Optionor makes no representation or warranty whatsoever as to the
accuracy or completeness of any of the Hazardous Materials Documents, or as to
whether other and more significant documents pertaining to the Hazardous
Materials condition of the Property may exist. Optionee acknowledges and agrees
that Optionee shall be solely responsible for researching and obtaining copies
of any and all publicly available documents pertaining to the Hazardous
Materials condition of the Property, notwithstanding the delivery of the
Hazardous Materials Documents by Optionor to Optionee, and that in proceeding
with this transaction, except as provided in Article 9, Optionee shall not be
relying on any other representation of Optionor pertaining to the Superfund site
status of the Property or any other matter concerning the Hazardous Materials
condition of the Property whatsoever.

 

4.3.3     On or about June 30, 2003, Advanced Micro Devices, Inc., a Delaware
corporation (“AMD”), Fujitsu Limited, a corporation organized under the laws of
Japan (“Fujitsu”) and FASL, LLC, a Delaware limited liability company (“FASL”)
entered into that certain Remediation Agreement dated June 30, 2003, with
respect to the remediation of certain hazardous substances on the Property (the
“Remediation Agreement”). A true, correct and complete copy of the Remediation
Agreement has been or will be provided to Optionee as part of the Property
Documents. At the Closing, Optionor shall assign the Remediation Agreement to
Optionee while retaining, on a non-exclusive basis, rights thereunder
sufficient, in Optionor’s sole discretion, to protect Optionor from claims or
liability with respect to Optionor’s ownership of the Property (provided such
retention of rights by Optionor does not negatively affect Optionee’s rights
thereunder), and Optionee shall assume the obligations of FASL under the
Remediation Agreement arising from and after the Closing to the extent relating
to the Property.

 

4.3.4     Optionor has secured or is in the process of securing, or causing to
be secured, decommissioning or closures as appropriate from all applicable
Authorities with respect to all of the following: (i) the underground storage
tank permit with respect to the SDC facility; (ii) the air permit; (iii) the
hazardous waste permits; (iv) Fire Prevention and Environmental Program
Consolidation Permit; (v) the wastewater discharge permit; (vi) the stormwater
permits, and (vii) the aboveground storage tanks permit (individually, a
“Closure” and collectively, “Closures”). The Closure of the permit described in
(i) above has been secured. The permits described in (ii), (iii), (iv) and (v)
above require the vacating of the leased premises before Closure, so those
Closures shall be obtained on or before the expiration of the Lease. The permit
described in (vi) does not require Closure. The permit described in (vii) is for
the diesel tank for the emergency generator, so it will stay for the future use
of the Buyer for the emergency generator. Items (iii), (iv) and (v) are all part
of what is known as the building hazardous materials closure and will be covered
in the closure of the labs and buildings at or before the expiration of the
Lease. Optionor shall diligently and expeditiously secure, decommission or close
(as appropriate) the Closures to be done on or before expiration of the Lease.

 

4.4     Insurance. At all times before the Close of Escrow, Optionee shall
secure, maintain and provide evidence to Optionor, of the following:

 

(a)     Workers’ compensation insurance for Optionee’s employees as required by
law;

  

 
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(b)     the General Policy and the Umbrella Policy required pursuant to and as
defined below; and

 

(c)     automobile liability insurance, including liability for all owned, hired
and non-owned vehicles, with minimum limits of One Million Dollars ($1,000,000)
for bodily injury per person, One Million Dollars ($1,000,000) property damage
and One Million Dollars ($1,000,000) combined single limit per occurrence.

 

As used herein, “General Policy” shall mean a commercial general liability
insurance policy, on an occurrence basis form, from a carrier with a Best Rating
of “A-VIII” or better, evidencing the existence of liability coverage in an
amount not less than Two Million Dollars ($2,000,000) combined single limit
insuring against any and all liability or damage that might arise out of or be
related to any work done by Optionee or at Optionee’s request on or relating to
all or any portion of the Property.

 

Optionor shall be named as an additional insured under the General Policy, which
policy shall stipulate that the insurance afforded the additional insureds shall
apply as primary insurance and that any other insurance carried by Optionor will
be excess only and will not contribute with this insurance. Each such policy
shall contain an endorsement to the effect that such insurance policy will not
be canceled or materially modified until after thirty (30) days prior written
notice of cancellation or material modification has been given to such
additional insureds. Optionee’s liability insurance shall not be on a “claims
made” basis. All insurance policies required herein shall be issued by
responsible insurance companies, maintaining an A.M. Best’s Rating of A-VIII or
better and qualified to do business in California. All insurance policies shall
contain provisions (which shall be designated on the certificate of insurance)
that the coverage afforded thereunder shall not be canceled or reduced, nor
shall restrictive modifications be added, without providing Optionor with at
least thirty (30) days’ prior written notice thereof. The indemnification
obligations of Optionee as contained in Section 4.5 hereof shall not be limited
by the amounts or types of insurance (or the deductibles or self-insured
retention amounts of such insurance) which Optionee is required to carry
hereunder, and shall survive the Closing or any termination of this Agreement.

 

4.5     Indemnity. Notwithstanding anything provided herein to the contrary, any
investigation of the Property or pursuit of any entitlements by Optionee,
Optionee’s members and/or any entity controlling, controlled by or in common
control of Optionee (collectively, or any of the foregoing, as the case may be,
are hereinafter referred to as “Optionee’s Affiliates”), and/or Optionee’s
employees, contractors, subcontractors, representatives, officers and agents
(collectively, or any of the foregoing, as the case may be, are hereinafter
referred to as “Optionee’s Agents”) have been and shall be performed at the sole
cost and expense of Optionee, and Optionee shall be solely and absolutely
responsible for the acts of Optionee, Optionee’s Affiliates and/or any of
Optionee’s Agents in connection with any such investigation of the Property.
Optionee hereby agrees to protect, indemnify, defend, release (the parties
agreeing that the California Civil Code Section 1542 release set forth at
Section 4.2.2 hereof shall apply to such release) and hold Optionor Indemnitees
harmless from and against any and all Claims and Damages to the extent caused by
any act, omission or willful misconduct of the Optionee, Optionee’s Affiliates
and/or Optionee's Agents at any time prior to Closing in connection with any
investigation of the Property, which indemnification, release and agreement to
defend and hold harmless shall survive the Closing or the termination of this
Agreement, as the case may be, and remain binding upon the parties hereto (and
their successors and assigns) until fully observed, kept or performed. Optionor
shall have the right to have its representatives accompany Optionee, Optionee’s
Affiliates and/or Optionee's Agents on any on-site inspection. Optionee,
Optionee’s Affiliates and/or Optionee's Agents shall not, in any unreasonable
manner or fashion prior to the Closing Date, disrupt the operation and/or
management of the Property. If at any time prior to Closing, Optionee,
Optionee’s Affiliates and/or Optionee's Agents cause any damage to the Property,
Optionee shall, at its sole cost and expense, immediately restore the Property,
to the satisfaction of Optionor, to the same condition as it existed immediately
prior to the occurrence of such damage. Notwithstanding the foregoing, Optionee
shall not be obligated to restore the Property or indemnify Optionor in
connection with any damage, liability, or claim resulting (a) from any active
negligence or willful misconduct of Optionor Indemnitees, or (b) from any
discovery of any Hazardous Materials contamination or other adverse conditions
on or about the Property (but such freedom from restoration and indemnification
obligations shall not extend to the exacerbation (other than exacerbation
resulting from any investigation of the Property which is performed in a
non-negligent manner and in accordance with a scope of work approved in writing
by Optionor) of any such Hazardous Materials contamination or adverse conditions
caused or contributed to by Optionee, Optionee’s Affiliates, and/or Optionee’s
Agents). This Section 4.5 shall survive the Closing or termination of this
Agreement for any reason, notwithstanding any other provisions herein to the
contrary.

  

 
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5.     TITLE AND ESCROW

 

Escrow for this transaction (“Escrow”) shall be with First American Title
Company (“Escrow Holder” or “Title Company”), which is located at 6683 Owens
Drive, Pleasanton, California 94588, Escrow Officer: Diane Burton. Within three
(3) business days following the execution of this Agreement by both parties, the
parties shall deposit with Escrow Holder a fully signed original, or counterpart
originals, of this Agreement, together with the First Installment. Escrow shall
open as of the date upon which Escrow Holder has received a fully signed
original, or counterpart originals, of this Agreement. Escrow Holder is hereby
authorized and instructed to act in accordance with the provisions of this
Agreement, as the same may be amended in writing by the parties, which
Agreement, together with any separate escrow instructions submitted by a party,
shall constitute Escrow Holder’s escrow instructions, provided however, that if
there is a conflict between a party’s individual escrow instructions and this
Agreement, this Agreement will control.

  

 
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6.     PERMITTED TITLE EXCEPTIONS

 

On or before the date hereof Optionor shall deliver or cause to be delivered to
Optionee a preliminary report with respect to the Property issued by the Escrow
Holder, together with legible copies of all documents constituting exceptions to
title referred to therein (the “Title Report”). Optionee shall have a period of
twenty (20) calendar days after delivery to Optionee of the Title Report in
which to review and approve same and in which to obtain (at Optionee’s sole
cost), review and approve an ALTA survey of the Property (the “Survey”) Optionee
shall advise Optionor within said periods as to any exceptions to title that are
unacceptable to Optionee (it being understood that Optionee shall have the right
to reserve comment until the end of the aforesaid twenty (30) day period with
respect to any title exception that may be affected by information shown on the
Survey). Optionee’s failure to so advise Optionor within said twenty (20)
calendar day period shall be deemed to constitute Optionee’s deemed objection of
the condition of title as described in the Title Report or the Survey, as
applicable. Upon receipt of notice of Optionee’s objections or deemed objections
to title, Optionor may elect to undertake to use good faith efforts to remove
any exceptions to title objected to by Optionee or deemed to have been objected
to by Optionee prior to Closing Date, by giving notice to Optionee with three
(3) business days after delivery or deemed delivery to Optionor of Optionee’s
objections. If Optionor does not so notify Optionee within such three (3)
business day period, Optionee may, by notice to Optionor given by not later than
three (3) business days after expiration of the previous three (3) business day
period, to elect either (1) to proceed with the purchase and waive its title
objections, or (2) to cancel this Agreement and receive back the First
Installment (less the Independent Consideration), including any accrued
interest. Failure of Optionee to so notify Optionor within said period as to its
election shall be deemed an election to cancel this Agreement. All exceptions to
title set forth in the Title Report that are approved by Optionee pursuant to
this Section 6 shall be collectively referred to as the “Permitted Title
Exceptions.” Notwithstanding the foregoing, or any other provisions of this
Agreement to the contrary, in no event shall the Permitted Title Exceptions
include, and Optionor shall remove, at or before the Close of Escrow, and shall
cause the Property to be delivered free and clear of any of the following: (a)
unpaid taxes and assessments, except those to be prorated as of the Closing Date
in accordance with Section 8.4.2 hereof; (b) any mortgage, deed of trust, or
other instrument securing any financial obligation of any party other than
Optionee, (c) any tax liens, abstracts of judgments, mechanics' liens or similar
liens or encumbrances which require any monetary payment to remove or release,
(d) any notices of default, foreclosure notices, or similar notices reflecting
any action being taken to assert or foreclose upon any lien or encumbrance, and
(e) the Blanket Encumbrance (as herein defined). If Optionor agrees to remove
any title objection pursuant to this Article 6 and fails to do so on or before
the Closing, then Optionor shall be in default under this Agreement. All
endorsements which are requested by Optionee and both approved by the Title
Company and approved in writing by Optionor prior to the Approval Date shall be
collectively referred to as the “Permitted Endorsements.”

 

Subject to the penultimate sentence of the immediately preceding paragraph, the
Permitted Title Exceptions shall also include all the following exceptions to
title:

  

 
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6.1     Any additional exceptions set forth in any supplement to the Title
Report that are not set forth in the Title Report and are not otherwise
Permitted Title Exceptions as provided in this Article 6, provided such
exceptions are not specifically disapproved by written notice from Optionee to
Optionor given no later than fifteen (15) days following the date of delivery to
Optionee of such supplement to the Title Report, together with copies of any
such new title exception or title exceptions (each a “Supplemental Title
Defect”), provided, however, that Optionee shall not have the right to
disapprove any such additional exception to title unless such exception would
materially and adversely affect the development, use, operation or ownership of
the Property both for its current use and its use as reasonably determined by
Optionee. However, in no event shall Optionee have the right to disapprove a
title exception created or caused to be created by Optionee, Optionee’s Agents
or Optionee’s Affiliates. If any Supplemental Title Defect is disapproved by
Optionee, then Optionor shall advise Optionee in writing within five (5)
business days after Optionor’s receipt of Optionee’s notice whether Optionor
will cause such title exception to be removed prior to the Closing Date. If
Optionor advises Optionee in writing within such 5-business day period that it
will not cause such title exception to be removed, or Optionor fails to respond
within such 5-business day period, then Optionee shall have five (5) business
days following the end of the foregoing 5-business day period in which to elect
by written notice to Optionor to either waive its disapproval and proceed with
the purchase or terminate this Agreement. Subject to the provisions of Section
20.1, if Optionee elects to terminate this Agreement or fails to provide any
notice to Optionor, then this Agreement shall terminate, and Optionor shall
authorize the release to Optionee from escrow of the First Installment (less the
Independent Consideration) and interest thereon still held by Escrow Holder
(provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee), and neither party shall have any further rights,
duties or obligations under this Agreement or with respect to the Property,
except as otherwise specifically set forth herein; and

 

6.2     Mechanic’s liens, judgment liens or other encumbrances arising from work
or the pursuit of entitlements performed by or at the direction of Optionee or
any of Optionee’s Agents or Optionee’s Affiliates.

 

7.     CONDITIONS TO CLOSE OF ESCROW

 

7.1     Optionee Conditions. Optionee’s obligation to acquire the Property, and
the Close of Escrow thereof, shall be conditional and contingent upon the
satisfaction, or written waiver by Optionee in Optionee’s sole and absolute
discretion (except with respect to Section 7.1.4, which condition may not be
waived), as and when required below, of each of the following conditions
(collectively, the “Optionee Conditions”):

 

7.1.1     Representations and Warranties. As of the Close of Escrow, the
representations and warranties of Optionor set forth in Article 9 below and
expressly set forth elsewhere in this Agreement shall be true and correct in all
material respects, except with respect to those matters waived or deemed waived
by Optionee pursuant to the provisions of Article 9 below.

 

7.1.2     Title Insurance. Title Company shall be committed to issue to
Optionee, as of the Close of Escrow, an ALTA (2006) Owner’s Policy of Title
Insurance with liability limits equal to the Purchase Price, insuring fee title
to the Property as being vested in Optionee, together with any easements
appurtenant, subject only to the Permitted Title Exceptions and the Permitted
Endorsements (the “Title Policy”). Optionee shall have the right to obtain, at
its sole cost, any title endorsements to the Title Policy it wishes (in addition
to the Permitted Endorsements), provided that Optionee’s decision to obtain, and
Escrow Holder’s willingness to provide, any such additional title endorsements
shall not be deemed a Optionee Condition and shall not affect in any way the
date for the Close of Escrow set forth in this Agreement.

 

7.1.3     Satisfaction of Optionor’s Obligations. Optionor shall have timely
satisfied all of its material obligations under this Agreement, including,
without limitation, under Section 8.3 below.

  

 
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7.1.4     Legal Parcel. The Property shall constitute a legal parcel under the
California Subdivision Map Act (California Government Code Section 66411, et.
seq.

 

7.1.5     No Material Environmental Change. There shall have been no material
adverse change in the environmental condition of the Property between the
Effective Date and the Closing Date that would render residential development of
the Property economically infeasible.

 

Except as otherwise provided in Article 20 herein, if any of the Optionee
Conditions have not been satisfied or waived in writing by Optionee prior to the
Closing Date, as such Closing Date may be extended as provided in the final
paragraph of Article 98.1 below, then this Agreement and the Escrow shall
automatically terminate. Subject to the terms and conditions of Article 20
herein, in the event of the termination of this Agreement by reason of the
failure of any such Optionee Condition, then (i) Optionor shall authorize the
release to Optionee from escrow of the Option Consideration (less the
Independent Consideration) and interest thereon still held by Escrow Holder,
provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee; and (ii) each party shall pay one-half of any escrow
and title cancellation charges, and neither party shall have any further rights,
duties or obligations under this Agreement, except with respect to those
obligations which are specified to survive the termination of this Agreement.

 

7.2     Optionor Conditions. Optionor’s obligation to sell the Property to
Optionee, and the Close of Escrow thereof, shall be conditional and contingent
upon the satisfaction, or written waiver by Optionor in Optionor’s sole
discretion, as and when required below, of each of the following conditions
(collectively, the “Optionor Conditions”):

 

7.2.1     Option Exercise Notice; Approval Notice. Optionee shall have delivered
both the Approval Notice on or before the Approval Date and the Option Exercise
Notice within the Option Term.

 

7.2.2    Representations and Warranties. As of the Close of Escrow, the
representations and warranties of Optionee expressly set forth in this Agreement
shall be true and correct in all material respects.

 

7.2.3     Satisfaction of Optionee’s Obligations. Optionee shall have timely
satisfied all of its material obligations under this Agreement, including,
without limitation, under Section 8.2 below.

   

Except as otherwise provided in Article 20 herein, if any of the Optionor
Conditions have not been satisfied or waived in writing by Optionor prior to the
Closing Date, as such Closing Date may be extended as provided in the final
paragraph of Article 98.1 below, then this Agreement and the Escrow shall
automatically terminate. Subject to the terms and conditions of Article 20
herein, in the event of the termination of this Agreement by reason of the
failure of any such Optionor Condition, Optionor shall retain the Option
Consideration, each party shall pay one-half of any escrow and title
cancellation charges, and neither party shall have any further rights, duties or
obligations under this Agreement, except with respect to those obligations which
are specified to survive the termination of this Agreement.

  

 
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8.     CLOSE OF ESCROW

 

8.1     Closing Date. Provided that the Option has been validly exercised as
provided in Article 1 above, the close of Escrow (the “Closing” or “Close of
Escrow”) for the Property shall occur on or before December 10, 2013. For
purposes of this Agreement, the defined term “Closing” or the “Close of Escrow”
shall mean the recordation of the Grant Deed (hereinafter defined in
Section 8.3).

 

8.2     Optionee’s Obligations. In addition to any other obligations of Optionee
contained in this Agreement, on or before one (1) business day prior to the
Closing Date, Optionee hereby covenants and agrees to deposit with Escrow Holder
the following:

 

8.2.1     The Closing Payment;

 

8.2.2     Executed (and acknowledged, where required) counterpart originals of
the General Assignment (hereinafter defined) and the Lease attached hereto as
Exhibit C;

 

8.2.3     All other documents and sums required hereunder or otherwise
reasonably required by Escrow Holder or the Title Company to be deposited by
Optionee to carry out the Closing of the Escrow in accordance with this
Agreement; and

 

8.2.4     An Assignment and Assumption of the Remediation Agreement described in
Section 4.3.3 above in the form attached hereto as Exhibit E.

 

8.3     Optionor’s Obligations. Optionor shall deposit all sums and documents
and perform all other acts necessary on the part of Optionor so that the Close
of Escrow shall close by the date specified herein, including, without
limitation, the following:

 

8.3.1     A grant deed, duly executed by Optionor and acknowledged, conveying
the Property to Optionee free and clear of all encumbrances except the Permitted
Title Exceptions, in the form of the grant deed attached hereto as Exhibit B and
incorporated herein by this reference (the “Grant Deed”);

 

8.3.2     An affidavit or qualifying statement, which satisfies the requirements
of Paragraph 1445 of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, duly executed by Optionor (the “Certificate of Non
Foreign Status”);

 

8.3.3     A California Franchise Tax Board Form CA 597-W to satisfy the
requirements of California Revenue and Taxation Code Section 18662, duly
executed by Optionor (the “Exemption Certificate”);

 

8.3.4     Executed (and acknowledged, where required) counterpart originals of
the General Assignment and the Lease attached hereto as Exhibit D;

 

8.3.5     Optionor’s portion of the Escrow fees, prorations, and other charges
related to the Closing, except that Optionor may instruct Escrow Holder to
deduct such closing costs and prorations from the Closing Payment;

  

 
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8.3.6     An Assignment and Assumption of the Remediation Agreement described in
Section 4.3.3 above in the form attached hereto as Exhibit E.

 

8.3.7     All other documents required hereunder or otherwise reasonably
required by Escrow Holder or the Title Company to be deposited by Optionor to
carry out the Closing of the Escrow under this Agreement, including, without
limitation, a Seller’s Affidavit in the form attached hereto as Exhibit F.

 

8.4     Escrow Holder’s Obligations. When all items and funds required to be
deposited by Optionee and Optionor pursuant to this Article 8 have been
delivered into Escrow, Escrow Holder shall perform the following duties:

 

8.4.1     Escrow Holder shall (i) disburse to Optionor the Closing Payment, less
Optionee’s and Optionor’s share of the closing costs and prorations per Section
8.4.3. hereof; (ii) record the Grant Deed in the Official Records of the County,
(iii) deliver the original Certificate of Non-Foreign Status, the Exemption
Certificate, the Lease, the Assignment and Assumption of Remediation Agreement,
and the General Assignment to Optionee, and the General Assignment, the Lease
and the Assignment and Assumption of Remediation Agreement to Optionor, and (iv)
disburse all other funds and instruments to the party entitled thereto.

 

8.4.2     Escrow Holder shall prorate as of the Close of Escrow, on the basis of
a thirty (30) day month and using the latest available tax bills, real property
taxes and assessments for the current fiscal year and the annual installment of
any bonded indebtedness, as applicable.

 

8.4.3     Escrow Holder shall (i) charge Optionor with all County documentary
transfer taxes and one-half (1/2) of any City transfer taxes, and all other
closing costs customarily paid by a seller of real estate in Santa Clara County,
and (ii) charge Optionee the entire cost of the premium for the Title Policy,
including any Survey and any title endorsements desired by Optionee, all
recording charges, one-half (1/2) of any City transfer taxes, all Escrow fees,
and all other closing costs customarily paid by a buyer of real estate in Santa
Clara County.

 

If there are any errors or omissions in the prorations of taxes, bonds, and
assessments, or in the event any supplemental tax is levied following the Close
of Escrow, then promptly upon the discovery of the error or omission, or upon
issuance of the supplemental tax bill, and within ten (10) days of written
demand, the parties shall make any adjustments and pay any funds as are required
to comply with the provisions of this Section 8.4 in order to correct such error
or omission or to have the responsible party pay the applicable amount. The
parties’ obligations set forth in this Section 8.4 shall survive the Closing.

 

8.5     Supplemental Taxes. Supplemental taxes for the period prior to the Close
of Escrow shall be paid by Optionor and supplemental taxes for the period from
and after the Close of Escrow shall be paid by Optionee. The parties’
obligations set forth in this Section 8.5 shall survive the Closing.

 

8.6     Escrow Holder’s Reporting Obligations. For purposes of complying with
Section 6045 of the Internal Revenue Code of 1986, as amended, Escrow Holder
shall be deemed the “person responsible for closing the transaction,” and shall
be responsible for obtaining the information necessary to file with the Internal
Revenue Service Form 1099-S, “Statement for Recipients of Proceeds From Real
Estate, Broker and Barter Exchange Transaction”. Escrow Holder shall also be
responsible to prepare and deliver to Optionee for execution appropriate “Change
in Ownership” forms required by the County or the State of California in
connection with the transactions contemplated hereby. Escrow Holder shall
provide evidence to the parties of Escrow Holder’s compliance with this
Section 8.6.

  

 
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8.7     Optionee Documents. If this Agreement is terminated for any reason other
than Optionor’s default, Optionee shall deliver to Optionor, without
representation or warranty as to the accuracy or completeness thereof, and at no
cost to Optionor, copies of all third party prepared studies, tests, surveys,
applications, maps, agreements, plans and other documents related to the
Property in Optionee’s possession or control (collectively, the “Optionee
Documents”), as well as the Hazardous Materials Documents and the Property
Documents, whether previously delivered to Optionee by Optionor or obtained by
Optionee in connection with its investigations of the Property prior to the
Approval Date or otherwise. Upon written request of Optionor and at no cost to
Optionor, Optionee shall assign to Optionor, to the extent assignable and
without representation or warranty as to the accuracy or completeness thereof,
all right, title and interest of Optionee in and to all or any portion of such
documents as specified by Optionor; provided, however, that the Optionee
Documents shall not include (i) any plans, schematics, elevations or other
drawings for the Units Optionee intends to construct on the Property; (ii)
Optionee's internal financial projections with respect to the Property; (iii)
Optionee's internal marketing studies, it being acknowledged and understood that
third party marketing studies shall be considered part of Optionee Documents;
(iv) items that are Optionee Documents but are protected by the attorney-client
privilege or are attorney work-product; or (v) other proprietary information of
Optionee.

 

8.8     Escrow Cancellation Charges. If the Escrow shall fail to close by reason
of the default of either party hereunder, the defaulting party shall be liable
for all Escrow and title cancellation charges. If the Escrow shall fail to close
for any other reason, including, without limitation, the failure of any
condition precedent set forth herein, each party shall be liable for one-half
(1/2) of all Escrow and title cancellation charges.

 

9.     OPTIONOR’S REPRESENTATIONS AND WARRANTIES.

 

Optionor hereby represents and warrants to Optionee as of the Effective Date and
(subject to the final paragraph of this Article 9) as of the Closing Date, and
where applicable, covenants with Optionee, as follows:

 

9.1     Due Authorization. Optionor is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Delaware, is qualified to transact business in the State of California, and has
the full power and authority to enter into and carry out the agreements
contained in, and the transactions contemplated by, this Agreement. The person
or persons signing this Agreement and any documents and instruments in
connection herewith on behalf of Optionor have full power and authority to do
so. This Agreement has been duly authorized and executed by Optionor, and upon
delivery to and execution by Optionee shall be a valid and binding agreement of
Optionor.

  

 
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9.2     No Conflict. The execution, delivery and performance by Optionor of this
Agreement and such other instruments and documents to be executed and delivered
in connection therewith does not, and will not, result in any violation of or
conflict with any provisions of any agreement of Optionor or any mortgage, deed
of trust, indenture, lease, security agreement, or other instrument, covenant,
obligation or agreement to which Optionor is subject.

 

9.3     No Condemnation or Litigation. There is no suit, action, arbitration,
legal, administrative or other proceeding or governmental investigation, formal
or informal, including, without limitation, eminent domain, condemnation,
assessment district or zoning change proceeding, pending or, to the actual
knowledge of Optionor, threatened in writing, or any judgment, moratorium or
other government policy or practice which affects the Property or Optionee’s
anticipated development of the Property.

 

9.4     No Violations of Law. To the actual knowledge of Optionor there are no
uncured notices that have been served by any Authority of violations of law,
rules or regulations that would affect the Property or any portion thereof.

 

9.5     Property Disclosures. The Property Documents and the Hazardous Materials
Documents shall set forth certain disclosures of Optionor with respect to the
Property (the “Property Disclosures”). Optionor makes no representation or
warranty that the Property Disclosures contain a complete listing of (i) all
matters which may be relevant or important to Optionee in its acquisition and
development of the Property, it being agreed that the terms of Article 4 and
Article 11 shall control with respect to such matters, and (ii) all matters
which must be disclosed to Optionee’s purchasers and successors in interest, it
being understood and agreed that Optionee shall be fully liable and responsible
for determining and making all such disclosures pursuant to the terms of this
Agreement and applicable law. The copies of the Property Documents and the
Hazardous Materials Documents which are to be delivered by Optionor to Optionee
under the terms of this Agreement shall be, upon such delivery, to the best of
Optionor’s knowledge without investigation, true, correct and complete copies
thereof.

 

9.6     No Fraudulent Transfer. Optionor is not entering into the transactions
described in this Agreement with an intent to defraud any creditor or to prefer
the rights of one creditor over any other. Optionor and Optionee have negotiated
this Agreement at arm’s length and the consideration paid represents fair value
for the assets to be transferred.

 

9.7     Leases or Other Agreements. There are (i) no leases or other agreements
permitting possession or occupancy of all or any portion of the Property by any
third party which shall survive the Close of Escrow, and (ii) no contracts or
other agreements for management, operations, services, supplies or materials
affecting the use, operation or management of the Property which shall survive
the Close of Escrow. Prior to the Close of Escrow, Optionor shall not encumber
the Property or enter into any new contract, lease, license, easement or other
agreement relating to the use, development, occupancy or possession of the
Property which would survive the Close of Escrow without the prior written
consent of Optionee, which consent may be withheld in Optionee’s sole
discretion.

  

 
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9.8     Third Party Rights. No third party has an option to purchase, right of
first refusal, right of first offer or other similar right with respect to all
or a portion of the Property, and Optionor has entered into no other contracts
for the sale of all or any portion of the Property with any third party which is
in effect as of the Effective Date. Prior to the Close of Escrow, Optionor shall
not enter into any option to purchase, right of first refusal, right of first
offer or other similar agreement with respect to the purchase and sale of the
Property or any other agreement that would render Optionor unable to convey the
Property to Optionee at the Close of Escrow.

 

9.9     Remediation Agreement. Optionor has delivered to Optionee a copy of the
Remediation Agreement, and shall deliver to Optionee within five (5) business
days after the Effective Date, copies of the “Contribution Agreement” (as
defined in the Remediation Agreement). Optionor changed its name from FASL to
Spansion LLC, a Delaware limited liability company, and therefore holds the
beneficial interests of FASL under the Remediation Agreement, and possesses the
power and authority to assign the Remediation Agreement to Optionee in the
manner contemplated by this Agreement. To the best of Optionor’s actual
knowledge, the Remediation Agreement is in full force and effect in accordance
with its terms. Optionor is not in material default under the Remediation
Agreement, and Optionor has no actual knowledge that there is currently any
default or breach by AMD under the Remediation Agreement. To the best of
Optionor’s actual knowledge, there exists no fact or condition which, with the
passage time, giving of notice or both, would constitute a default or breach by
either AMD or Optionor under the Remediation Agreement. Except for this
Agreement, Optionor has not alienated, encumbered, transferred, assigned or
otherwise conveyed its interest in the Remediation Agreement or any portion
thereof, nor entered into any agreement to do so which is still in effect, nor
shall Optionor do so prior to the Closing. Optionor is not aware of any
restriction on assignment of the Remediation Agreement. Following the Effective
Date, Optionor shall not modify, amend or terminate the Remediation Agreement
without the prior written consent of Optionee, which consent shall not be
unreasonably withheld or delayed.

 

9.10     Environmental Condition. To the best of Optionor’s knowledge, except
for Hazardous Materials which are the subject of the Remediation Agreement,
Optionor has not used, manufactured, generated, treated, stored, disposed of, or
released any Hazardous Material on, under or about the Property or transported
any Hazardous Material over the Property in violation of, or in a manner that
would give rise to liability or financial responsibility under, Hazardous
Materials Laws. No claims have been asserted or threatened against Optionor with
respect to Hazardous Materials at the Property.

 

9.11     Closures. To the best of Optionor’s knowledge, no Closures other than
those referenced in Section 4.3.4, above, are necessary in order to fully
decommission, secure, or close all permits and licenses affecting the Property.

 

9.12     Bankruptcy or Insolvency. Optionor was previously in bankruptcy but is
no longer in bankruptcy. Since exiting bankruptcy, Optionor has not made a
general assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by its creditors,
suffered the appointment of a receiver to take possession of substantially all
of its assets, suffered the attachment or other judicial seizure of
substantially all of its assets, admitted its inability to pay its debts as they
come due, or made an offer of settlement, extension, or compromise to its
creditors generally.

  

 
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As used in this Article 9, the term “actual knowledge of Optionor” means and is
limited to the actual knowledge of Terry Maloney (the senior manager of
facilities for Optionor) and of Ajay Changaran (the Director of Global Supply
Management of Optionor) as of the Effective Date, who is the person most likely
to possess actual knowledge of all such matters on behalf of Optionor. The
foregoing representations and warranties shall survive the Close of Escrow for a
period of eighteen (18) months following the Close of Escrow after which time
such representations and warranties shall terminate and be of no further force
or effect except with respect to claims made in writing delivered to Optionor
within such eighteen (18) month period.

 

It is agreed that the obligation of Optionee to acquire the Property is
conditioned upon the accuracy, in all material respects as of the Closing Date,
of all of Optionor’s warranties and representations. Notwithstanding the
foregoing, any fact, condition or circumstance actually known by or disclosed in
writing to Optionee as of the Approval Date, and contradicting or rendering
untrue (in whole or in part) any warranty or representation made by Optionor
under this Agreement, shall render such warranty or representation superseded
and of no effect to the full extent of such contradiction or untruth. If at any
time prior to Closing, Optionee actually discovers that any warranty or
representation made in this Agreement by Optionor is materially untrue, Optionee
may within five (5) business days after Optionee’s actual discovery of the same,
provide Optionor with written notice of Optionee’s intention to terminate.
Optionee’s failure to deliver such written notice within such five (5) business
day period shall be conclusively deemed Optionee’s acceptance of such matters
and waiver of any Claims and Damages relating to or arising out of Optionor’s
making any such untrue representation or warranty, the parties agreeing that the
California Civil Code Section 1542 release set forth at Section 4.2.2 hereof
shall apply to such waiver. Upon receipt of such written notice, Optionor may
elect to use reasonable efforts, but only after the Approval Date, to cure or
remedy any such untrue representation or warranty within the earlier of
(i) thirty (30) days of its receipt of such notice, or (ii) the Closing Date,
which may, at Optionor’s election, be extended for a reasonable period of time
not to exceed thirty (30) days, to enable Optionor to cure or remedy such untrue
representation or warranty. If after having received written notice of such
untrue representation or warranty by Optionee, Optionor elects not to cure or
fails to cure any such untrue representation or warranty first discovered by
Optionee prior to the Closing (as the same may be extended as set forth above),
then Optionee shall have the right, as Optionee’s sole remedy, to either (a)
cancel and terminate this Agreement by written notice to Optionor and Escrow
Holder, in which event this Agreement shall terminate, Optionor shall authorize
the release to Optionee from escrow of the Option Consideration (less the
Independent Consideration) and interest thereon still held by Escrow Holder,
provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee, and Optionor shall reimburse to Optionee its actual
out of pocket costs in entering into and performing the terms and conditions of
this Agreement, but in no event shall Optionee be entitled to recover
consequential or punitive damages arising out of such untrue representation or
warranty, or (b) to proceed to close the Escrow otherwise in accordance with the
terms of this Agreement without reduction of the Purchase Price, and in such
event, Optionee hereby agrees to waive any and all Claims and Damages relating
to or arising out of Optionor's making of an untrue representation or warranty,
the parties agreeing that the California Civil Code Section 1542 release set
forth at Section 4.2.2 hereof shall apply to such waiver and release.

  

 
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10.     OPTIONEE’S REPRESENTATIONS AND WARRANTIES.

 

Optionee hereby represents and warrants to Optionor as of the Effective Date and
the Closing Date, as follows:

 

10.1     Due Authorization. Optionee is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
California, is qualified to transact business in the State of California, and
has the full power and authority to enter into and carry out the agreements
contained in, and the transactions contemplated by, this Agreement. The person
or persons signing this Agreement and any documents and instruments in
connection herewith on behalf of Optionee have full power and authority to do
so. This Agreement has been duly authorized and executed by Optionee, and upon
delivery to and execution by Optionor shall be a valid and binding agreement of
Optionee.

 

10.2     Due Execution. The execution, delivery and performance by Optionee of
this Agreement and such other instruments and documents to be executed and
delivered in connection herewith by Optionee does not, and will not, result in
any violation of or conflict with any provisions of any agreement of Optionee or
any mortgage, deed of trust, indenture, lease, security agreement, or other
instrument, covenant, obligation or agreement to which Optionee is subject.

 

10.3     Bankruptcy or Insolvency. Optionee has not made a general assignment
for the benefit of creditors, filed any voluntary petition in bankruptcy or
suffered the filing of an involuntary petition by its creditors, suffered the
appointment of a receiver to take possession of substantially all of its assets,
suffered the attachment or other judicial seizure of substantially all of its
assets, admitted its inability to pay its debts as they come due, or made an
offer of settlement, extension, or compromise to its creditors generally.

 

10.4     Preliminary Due Diligence. Optionee has evaluated and priced its offer
to purchase the Property from Optionor after reviewing preliminary information
provided by its broker and by Optionor, as well as its evaluation of other
public information and its knowledge of the market, entitlements requirements
and groundwater contamination issues respecting future use of the site.
Specifically, Optionee makes the following representations and warranties to
Optionor:

 

10.4.1     Optionee has conducted a reasonable review of Optionor’s on-line due
diligence documents.

 

10.4.2     Optionee understands that the Property may require rezoning,
depending on Optionee’s intended use.

 

10.4.3     Optionee understands that there is groundwater contamination, that
said condition will require approval from the appropriate public agencies to
permit residential development and that the site contains a groundwater
treatment facility and test wells that will need to operate for the foreseeable
future.

  

 
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10.4.4     Optionee understands that Optionor makes no representations regarding
relocation of the groundwater treatment facility and test wells, that Optionee
will conduct its own due diligence on such and intends to either build around
the existing treatment facility and test wells or relocate them, if allowed, at
its sole cost.

 

10.4.5     Optionee understands that there is asbestos and potentially lead in
the buildings and other improvements on the Property, and that Optionee will be
responsible for the cost of remediating said Hazardous Materials conditions,
which it has considered in pricing its offer.

 

10.4.6     Optionee understands that the Property is subject to a blanket
encumbrance for the benefit of creditors (the “Blanket Encumbrance”).

 

The foregoing representations and warranties shall survive the Close of Escrow
for a period of eighteen (18) months following the Close of Escrow and not be
merged in the Grant Deed, after which time such representations and warranties
shall terminate and be of no further force or effect except with respect to
claims made in writing delivered to Optionor within such eighteen (18) month
period.

 

11.     PROPERTY “AS-IS”

 

11.1     “As-Is” Sale. Except as specifically set forth in Article 9 above, and
subject to Optionee’s right to disapprove the condition of the Property prior to
the Approval Date pursuant to the terms of Article 2 hereof and the receipt of
the Closures as and when required under this Agreement, and subject to
Optionor’s obligations under the Lease, Optionee acknowledges and agrees that
neither Optionor, nor any of Optionor Indemnitees nor any person acting or
purporting to act as agent or representative of Optionor, has made any
representation, warranty, promise or statement of any kind whatsoever, express
or implied, to Optionee or any of Optionee’s Affiliates or Optionee’s Agents, or
upon which Optionee or any of Optionee’s Agents or Optionee’s Affiliates have
relied or will rely in any respect regarding this Agreement, the Property, the
condition of the Property, the zoning for the Property, the payment of school
fees or any other impact fees, the grading plans, the income, profit and/or
development potential for the Property, the Property Documents, the Hazardous
Materials Documents, the soils condition or subsoils condition of the Property,
the presence or absence of any Hazardous Materials in, on, under or about the
Property, or any other matter whatsoever with respect to the Property.

  

 
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ACCORDINGLY, OPTIONEE EXPRESSLY ACKNOWLEDGES AND AGREES THAT, SUBJECT TO
(A) OPTIONOR'S REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE 9
ABOVE, AND (B) OPTIONEE’S RIGHT TO DISAPPROVE THE CONDITION OF THE PROPERTY
PRIOR TO THE APPROVAL DATE PURSUANT TO THE TERMS OF ARTICLE 4 HEREOF, AND (C)
OPTIONOR’S POST-CLOSING OBLIGATIONS HEREUNDER, INCLUDING UNDER THE LEASE,
OPTIONEE IS PURCHASING THE PROPERTY “AS IS”, AND “WITH ALL FAULTS”, AFTER SUCH
INSPECTION, ANALYSIS, EXAMINATION AND INVESTIGATION AS OPTIONEE DEEMS DESIRABLE
OR NECESSARY, AND EXPRESSLY WITHOUT OPTIONOR’S COVENANT, WARRANTY OR
REPRESENTATION AS TO PHYSICAL CONDITION, ENTITLEMENTS, UTILITIES, TITLE, LEASES,
RENTS, REVENUES, INCOME, EXPENSES, OPERATION, ZONING OR OTHER REGULATION,
COMPLIANCE WITH LAW, SUITABILITY OR FITNESS FOR PARTICULAR PURPOSES OR ANY OTHER
MATTER WHATSOEVER. OPTIONEE ACKNOWLEDGES AND AGREES THAT OPTIONEE IS A
SOPHISTICATED RESIDENTIAL AND COMMERCIAL REAL ESTATE DEVELOPER WITH EXPERIENCE
IN THE ACQUISITION, INVESTIGATION AND DEVELOPMENT OF REAL PROPERTY SIMILAR TO
THE PROPERTY. OPTIONEE EXPRESSLY ACKNOWLEDGES THAT IT HAS BEEN OR PRIOR TO THE
APPROVAL DATE SHALL HAVE BEEN AFFORDED AMPLE OPPORTUNITY TO INSPECT, ANALYZE AND
INVESTIGATE ALL ASPECTS OF THE PROPERTY AND CONDITIONS RELEVANT THERETO, AND
EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 9 OF THIS AGREEMENT OPTIONEE SHALL RELY
ON OPTIONEE’S OWN INVESTIGATION AND INSPECTION, AND ALL MATTERS RELATING
THERETO. EXCEPT AS SPECIFICALLY SET FORTH IN ARTICLE 9 OF THIS AGREEMENT,
OPTIONOR MAKES NO REPRESENTATION OR WARRANTY CONCERNING THE ACCURACY OR
COMPLETENESS OF ANY PLANS, STUDIES, REPORTS OR OTHER PROPERTY DOCUMENTS OR
HAZARDOUS MATERIALS DOCUMENTS DELIVERED TO OPTIONEE BY OPTIONOR OR BY ANY AGENTS
AND AFFILIATES OF OPTIONOR, AND OPTIONEE HEREBY RELEASES (THE PARTIES AGREEING
THAT THE CALIFORNIA CIVIL CODE SECTION 1542 RELEASE SET FORTH AT SECTION 4.2.2
HEREOF SHALL APPLY TO SUCH RELEASE) AS OF THE CLOSE OF ESCROW, OPTIONOR
INDEMNITEES (OTHER THAN OPTIONOR TO THE EXTENT PROVIDED IN ARTICLE 9 ABOVE) FROM
ANY LIABILITY WHATSOEVER WITH RESPECT TO ANY SUCH REPORTS INCLUDING, WITHOUT
LIMITATION, ANY MATTERS SET FORTH IN SUCH REPORTS, OR THE ACCURACY OR
COMPLETENESS OF ANY SUCH REPORTS.

 

12.     GENERAL ASSIGNMENT

 

Optionor agrees, concurrently with the Closing of the Property, to assign to
Optionee all of Optionor’s right, title and interest, if any, in and to all
assignable warranties, guaranties, licenses, permits, plans, maps, entitlements,
and approvals relating to the Property, and any other documents and instruments
pertaining to the Property, pursuant to and in accordance with the terms and
provisions of the General Assignment in the form of Exhibit C attached hereto
and incorporated herein by this reference (the “General Assignment”), and
Optionor shall use commercially reasonable efforts to obtain prior to Closing
all third party consents required in order to make such assignments.

 

13.     [INTENTIONALLY OMITTED]

 

14.     DISCLOSURES TO PURCHASERS

 

Optionee shall distribute to all purchasers or renters of all or any portion of
the Property, including without limitation Units within the Property, any and
all disclosures and/or disclosure reports specifically required by a
governmental agency to be made to such parties in connection with such agency’s
approval of Optionee’s real estate development project (“Optionee’s
Disclosures”). Optionee shall defend, protect, indemnify and hold Optionor
Indemnitees harmless from and against, and shall reimburse Optionor Indemnitees
for, any and all Claims and Damages incurred by or asserted against any of
Optionor Indemnitees to the extent arising directly or indirectly out of
Optionee's failure to distribute Optionee’s Disclosures as provided in the first
sentence of this Article 14. All obligations of the parties pursuant to this
Article 14 shall survive the Closing of the Property hereunder.

  

 
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15.     INDEMNITY

 

From and after the Close of Escrow, Optionee shall indemnify, defend and hold
Optionor Indemnitees harmless from and against all Claims and Damages that any
of Optionor Indemnitees may suffer or incur with respect to third party claims
to the extent such third party claims arise as a result of construction defects
in any development of the Property, or any portion thereof, by Optionee
(excluding any work performed by Optionor or Optionor’s Agents or Optionor’s
Affiliates), including, without limitation, the following:

 

15.1     any defective design, construction, engineering or other work performed
by Optionee, Optionee’s Agents and/or Optionee’s Affiliates with respect to the
Property, and the defective design, construction, engineering or sale or other
conveyance of Units or any other improvements upon the Property by Optionee,
Optionee’s Agents and/or Optionee’s Affiliates;

 

15.2     any claim asserting alleged defects in the design, construction or
engineering of any structures or other improvements made by Optionee, any of
Optionee’s Agents and/or any of Optionee’s Affiliates on the Property, including
claims by any purchaser of any Unit or any other improvements from Optionee or
Optionee’s successors or assigns; and/or

 

15.3     any claim made by any successor-in-interest to the Property or any
portion thereof (including, without limitation, purchasers of Units from
Optionee) arising out of any failure by Optionee, any of Optionee’s Agents
and/or any of Optionee’s Affiliates to make any or all disclosures that
Optionee, any of Optionee’s Agents and/or any of Optionee’s Affiliates were
legally required to make regarding the Property, the Units, the improvements
and/or the structures located thereon to an applicable successor-in-interest.

 

This Section shall in no event be construed to require indemnification by
Optionee to a greater extent than permitted by the laws and the public policy of
the State of California.

 

Specifically excluded from the foregoing indemnity are any Claims and Damages to
the extent arising from or caused by (i) a breach by Optionor or an Optionor’s
Affiliate of any representation, warranty, indemnity or covenant expressly set
forth in this Agreement or the Lease, (ii) the intentional misconduct or
negligence of Optionor or Optionor’s Affiliate, or their respective agents,
employees, contractors or subcontractors, and (iii) performance or failure to
perform by Optionor or Optionor’s Affiliates, or their respective agents,
employees, contractors or subcontractors pursuant to this Agreement or the
Lease.

 

With respect to any Claims and Damages for which Optionee indemnifies Optionor
Indemnitees as provided above (the “Indemnified Claim”), Optionor shall assign
to Optionee any rights, claims and causes of action relating to the Indemnified
Claim that such party may have against any person or entity including without
limitation subcontractors, engineers or consultants who performed any work or
services in connection with the claim which is the subject of that
indemnification.

  

 
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This Article 15 shall survive the Closing, notwithstanding any other provisions
herein to the contrary.

 

16.     OPTIONOR’S COVENANTS

 

16.1     Covenants. During the term of this Agreement, Optionor shall, at
Optionor's expense:

 

16.1.1     Maintain the Property. Maintain Optionor’s insurance currently in
effect with respect to the Property and use commercially reasonable efforts to
maintain the Property in the same condition as on the Effective Date, ordinary
wear and tear excepted, and not construct any additional structural improvements
on the Property. Notwithstanding the foregoing, Optionor shall have the right to
make modifications to the Property to the extent necessary to (a) operate
Optionor’s business on the Property (provided that, where such modification
would materially affect the value of the Property for its existing use or future
use or the feasibility of Optionee’s development plans, Optionor restores the
affected portion of the Property prior to Close of Escrow to substantially the
same condition it was in immediately prior to such modification, at Optionor’s
sole cost), or (b) obtain the Closures; provided that if any such modification
would materially affect the value of the Property or the feasibility of
Optionee’s development plans, then Optionee and Optionor shall meet for a period
of twenty (20) days Optionor after Optionee notifies Optionor in writing that
such modification would materially affect the value of the Property or the
feasibility of Optionee’s development plans and the parties shall meet and
confer in good faith to try and find an alternative approach reasonably
acceptable to Optionor and Optionee. If, following such efforts, Optionor and
Optionee are unable to reach agreement on a mutually acceptable alternative
approach, then Optionee shall have the right to terminate this Agreement upon
written notice given to Optionor no later than thirty (30) days after the end of
such twenty (20) day period, whereupon Optionor shall authorize the release to
Optionee from escrow of the Option Consideration (less the Independent
Consideration) and interest thereon still held by Escrow Holder, provided that
if the Option Consideration has been released to Optionor at such time, Optionor
shall promptly return the same (less the Independent Consideration) to Optionee,
Optionor shall be obligated to pay any escrow cancellation charges, and neither
party shall have any further rights, duties or obligations under this Agreement
or with respect to the Property, except as otherwise specifically set forth in
this Agreement.

 

16.1.2     Comply with Laws. Comply with any and all laws, regulations,
ordinances of the City or any agency of the State, local or federal government,
including, but not limited to, Hazardous Materials Laws, to the extent the
failure to so comply will materially adversely affect the ownership,
development, operation or use of the Property after the Closing.

 

16.1.3     Enter into No Agreements. Shall not enter into any agreements with
the City, any other governmental agency, utility company or any person or entity
regarding the Property, which would remain in effect after the Close of Escrow,
without obtaining Optionee's prior written consent, which Optionee shall not
withhold unreasonably. Without limitation, Optionee may withhold its consent to
any agreement that would, in Optionee’s reasonable opinion, have any material
adverse impact on Optionee's intended development, use, operation or ownership
of the Property.

  

 
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16.1.4     Enter into Any Leases. Shall not enter into any licenses, agreements
or leases that would give any person or entity any right of possession to any
portion of the Property, which would remain in effect after the Close of Escrow
on the Property.

 

16.1.5     Notify Optionee of Certain Matters. At all times prior to the Close
of Escrow, Optionor shall promptly advise Optionee in writing of any material
adverse change in the condition of the Property, the occurrence of any event or
discovery of any fact which would render any representation or warranty of
Optionor to Optionee in this Agreement untrue or misleading, and any written
notice or other communication from any third person or entity alleging that the
consent of such third person or entity may be required in connection with the
transaction contemplated by this Agreement or otherwise may have a material
adverse effect on Optionee’s intended development, use, operation or ownership
of the Property.

 

16.1.6     No Other Agreements. Prior to the Close of Escrow or the earlier
termination of this Agreement, Optionor shall not enter into any agreement to
sell, lease, or otherwise transfer the Property to third parties.

 

16.2     Optionee's Right to Cure. In addition to any other right or remedy that
Optionee may have for any breach of any of Optionor's covenants, Optionee shall
have the right, but not the obligation, to cure any breach of such covenant upon
ten (10) days prior written notice to Optionor. Optionee's cure of Optionor's
breach of covenants shall not be construed as a waiver of such breach or an
election of remedies. Optionee may deduct all reasonable costs and expenses
incurred by Optionee prior to the Close of Escrow in connection with performing
any of Optionor's covenants from the Purchase Price upon the Close of Escrow.

 

17.     LEASEBACK

 

Once Optionor knows the actual Closing Date, it can proceed to secure its new
location and prepare its new facilities for occupancy. To allow Optionor time to
do this after the Closing Date, Optionee and Optionor will enter into the
“Lease” attached hereto as Exhibit D by executing same as part of the Closing.

  

 
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18.     CONFIDENTIALITY OF AGREEMENT

 

Optionee acknowledges that all information with respect to or relating to the
Property furnished or to be furnished to Optionee is so furnished on the
condition that Optionee, from and after the date of this Agreement, maintain the
confidentiality thereof prior to the Close of Escrow. Optionee further
acknowledges that the terms and provisions of this Agreement are likewise
confidential and Optionee agrees to maintain the confidentiality thereof at all
times prior to the Close of Escrow. Accordingly, Optionee shall, and shall cause
Optionee’s Agents, Optionee’s Affiliates, and Optionee’s attorneys and other
personnel and representatives to hold in strict confidence, and not disclose to
any other person or entity, without the prior written consent of Optionor, any
of the following information, unless and until the Closing occurs: (i) any
information with respect to the Property delivered to Optionee by Optionor or
any of Optionor's Agents or Optionor's Affiliates or (ii) the nature or content
of any term or provision of this Agreement, or (iii) the results of the
inspections or studies undertaken in connection herewith. Notwithstanding the
foregoing, Optionor and Optionee may each disclose such information to
individuals or entities necessary for the parties to consummate the transactions
contemplated herein (such as to partners, shareholders, affiliates,
subsidiaries, parent companies, lenders, engineers, environmental consultants,
attorneys, accountants and tax advisors), or in response to a subpoena or as
required by law, and Optionor and Optionee may consult with the City and the
Regional Water Quality Control Board and all other Authorities whose consent may
be required regarding Optionee’s intended development of the Property and other
matters described in this Agreement. Until the Closing of the Property occurs,
Optionee agrees to inform all parties to whom any term or provision hereof or
any information with respect to the Property is disclosed that all such parties
are not to disclose any term or condition hereof or any information with respect
to the Property to any other person or entity. Additionally, notwithstanding the
foregoing, during the continuance of any default by Optionee, Optionor may
disclose information regarding the Property and/or this Agreement (but not the
economic terms of this Agreement) for use in Optionor’s marketing materials for
the Property; provided, however, any such information so disclosed shall not
include the details of any material or monetary terms set forth in this
Agreement. Optionee acknowledges and agrees that there are other parties with
certain obligations or potential obligations for groundwater contamination
remediation including AMD, Philips and TRW. Optionee shall cooperate with said
parties in disclosing reasonable information regarding its plans and remediation
experience and shall execute reasonable non-disclosure agreements as may be
reasonably required by said parties in order to gain access to agreements and
other information relating to remediation of the groundwater contamination under
the Property. The obligations of this Article 18 shall survive the termination
of this Agreement but not the Closing.

 

19.     BROKER’S COMMISSION

 

If, and only if, the Close of Escrow occurs, Optionor shall pay a real estate
broker’s commission to Jones Lang LaSalle (the “Broker”) for the Property,
pursuant to a separate commission agreement between Optionor and the Broker.
Optionor and Optionee each represents and warrants to the other that other than
Optionor’s engagement of the Broker, no broker, agent or finder, licensed or
otherwise, has been engaged by it in connection with this transaction. Except as
expressly set forth above, in the event of any claim for a broker’s, agent’s or
finder’s fee or commission in connection with the negotiation, execution or
consummation of this transaction, the party upon whose alleged statement,
representation or agreement such claim or liability arises shall indemnify, hold
harmless and defend the other party from and against such claim and liability
including, without limitation, Claims and Damages in connection therewith. In no
event shall Optionor be liable to Optionee for any statement made by any real
estate broker, including Broker. This Article 19 shall survive the Close of
Escrow or termination of this Agreement.

  

 
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20.     DEFAULT

 

20.1     Optionor Default. If the sale of the Property fails to close as a
result of a default of Optionor, and provided such default remains uncured for a
period of thirty (30) days after Optionor’s receipt of written notice from
Optionee of such default (except that in the event Optionor commences to cure
such default within such thirty (30) day period and diligently proceeds to cure
such default thereafter, Optionor shall not be in default hereunder, so long as
Optionor is proceeding diligently to effect such cure and such cure is effected
within ninety (90) days after Optionor’s receipt of such notice of default, the
Closing Date being automatically extended to the extent necessary for Optionor
to complete such cure), Optionee may, as its sole and exclusive remedy at law
and in equity, elect to either: (a) seek to enforce the terms of this Agreement
by action for specific performance, but with no reduction in the Purchase Price;
provided, however, that (i) Optionee shall have no right to seek specific
performance unless it files an action seeking same no later than sixty (60) days
after Optionee becomes actually aware of the occurrence of such default or after
the expiration of the cure period described above, whichever is later, and (ii)
no action for specific performance shall compel Optionor to commence litigation;
or (b) cancel and terminate this Agreement by written notice to Optionor and
Escrow Holder in which event this Agreement shall terminate, Optionor shall
authorize the release to Optionee from escrow of the Option Consideration (less
the Independent Consideration) and interest thereon still held by Escrow Holder,
provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee, the parties shall be released from all further
obligations and liability under this Agreement except as otherwise specifically
provided in this Agreement, and Optionor shall pay to Optionee its actual out of
pocket costs in entering into and performing the terms and conditions of this
Agreement, but in no event shall Optionee be entitled to recover consequential
or punitive damages.

 

20.2     Optionee Default. If the sale of the Property fails to close as a
result of a default by Optionee, Optionor’s sole remedy (except as otherwise
specifically provided hereunder) at law and in equity shall be to declare a
default, terminate the Agreement by delivery of written notice to Optionee and
retain the Option Consideration and all interest earned thereon as liquidated
damages, it being understood that Optionor’s actual damages in the event of such
default would be extremely difficult to ascertain and that such proceeds
represent the parties’ best current estimate of such damages. Pending the full
and final resolution of any specific performance or other litigation or disputes
instituted by Optionor or Optionee, Optionor and Escrow Holder (as applicable)
shall continue to hold the Option Consideration.

  

 
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LIQUIDATED DAMAGES. OPTIONEE RECOGNIZES THAT OPTIONOR’S INTEREST IN THE PROPERTY
WILL BE UNAVAILABLE FOR SALE DURING THE EXISTENCE OF THIS AGREEMENT. WITH THE
FLUCTUATION IN LAND VALUES, THE UNPREDICTABLE STATE OF THE ECONOMY AND OF
GOVERNMENTAL REGULATIONS, THE FLUCTUATING MONEY MARKET FOR REAL ESTATE LOANS OF
ALL TYPES AND OTHER FACTORS WHICH DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF
THE PROPERTY, IT IS REALIZED BY THE PARTIES THAT IT IS EXTREMELY DIFFICULT AND
IMPRACTICABLE TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE AMOUNT OF DAMAGES
WHICH WOULD BE SUFFERED BY OPTIONOR IN THE EVENT OPTIONEE DEFAULTS IN ITS
OBLIGATION TO CLOSE ESCROW FOR THE PROPERTY, AS REQUIRED HEREIN. THE PARTIES,
HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL DAMAGES
OPTIONOR WOULD SUFFER IN SUCH EVENT, HAVE DETERMINED THAT ALL AMOUNTS PAID TO
OPTIONOR AS OPTION CONSIDERATION AND ALL INTEREST EARNED THEREON SHALL BE
DISBURSED TO OPTIONOR, IF THEN HELD BY ESCROW HOLDER, OR RETAINED BY OPTIONOR,
IF PREVIOUSLY DISBURSED TO OPTIONOR HEREUNDER, AND SHALL BE DEEMED FULLY EARNED
AS LIQUIDATED DAMAGES, AND THIS AGREEMENT SHALL AUTOMATICALLY TERMINATE. BY
INITIALING BELOW, THE PARTIES AGREE TO THE PROVISIONS OF THIS SECTION AND
ACKNOWLEDGE THAT SUCH REMEDY OF OPTIONOR AS SET FORTH HEREIN SHALL BE THE
EXCLUSIVE REMEDY OF OPTIONOR, AT LAW AND IN EQUITY, BY REASON OF SUCH DEFAULT OF
OPTIONEE, EXCEPT ANY RIGHTS OF OPTIONOR THAT BY THEIR TERMS SPECIFICALLY SURVIVE
THE TERMINATION OF THIS AGREEMENT, AND EXCEPT FOR ALL RIGHTS AND REMEDIES WHICH
OPTIONOR MAY HAVE AT LAW OR EQUITY OR UNDER THIS AGREEMENT IN CONNECTION WITH
OPTIONOR’S ENFORCEMENT OF THIS SECTION 20.2 INCLUDING, WITHOUT LIMITATION,
OPTIONOR’S RIGHT TO RECOVER ATTORNEYS’ FEES AND COSTS INCURRED IN CONNECTION
THEREWITH.

 

 

Optionor’s Initials [CRR]    

Optionee’s Initials [MF]

   

20.3     Recoverable Damages. Except where this Agreement specifies a particular
remedy as being Optionor’s sole remedy for a particular event or circumstance,
the provisions of Section 20.2 hereof shall not operate to limit the remedies
available to Optionor or the damages recoverable by Optionor against Optionee
(except as set forth in the last sentence of this Section 20.3) due to (i) any
breach or default by Optionee of any post-Closing covenant or agreement of
Optionee set forth herein; and/or (ii) Optionee’s obligation to indemnify,
defend and hold harmless Optionor, as more particularly set forth in this
Agreement. Except where this Agreement specifies a particular remedy as being
Optionee’s sole remedy for a particular event or circumstance, the provisions of
Section 20.1 hereof shall not operate to limit the remedies available to
Optionee or the damages recoverable by Optionee against Optionor (except as set
forth in the last sentence of this Section 20.3) due to (i) any breach or
default by Optionor of any post-Closing covenant or agreement of Optionor set
forth herein; and/or (ii) Optionor’s obligation to indemnify defend and hold
harmless Optionee as more particularly set forth in Section 19. Notwithstanding
the foregoing or any other provision of this Agreement to the contrary, neither
Optionor nor Optionee shall bear any liability to the other under this Agreement
for loss of production, loss of business or any other indirect, punitive,
special or consequential damages, even if such party has been advised of the
possibility of such damages, and neither party may seek to recover against the
other party consequential damages, punitive damages or any other damages for
loss of production, loss of business, lost profits or any other indirect or
special damages.

  

 
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21.     MATERIAL DAMAGE; CONDEMNATION.

 

Except as otherwise provided in this Section 21, risk of loss to the Property
shall be borne by Optionor until Close of Escrow. In the event that one (1) or
more of the buildings on the Property are destroyed or materially damaged other
than through the negligence or willful misconduct of Optionee, Optionee’s Agents
and/or Optionee’s Affiliates prior to Close of Escrow, Optionor shall promptly
notify Optionee of such damage and Optionee shall have the right either (a) to
terminate this Agreement, in which event Optionor shall authorize the release to
Optionee from escrow of the Option Consideration (less the Independent
Consideration) and interest thereon still held by Escrow Holder, provided that
if the Option Consideration has been released to Optionor at such time, Optionor
shall promptly return the same (less the Independent Consideration) to Optionee;
and (3) in either such case each party shall pay one-half of any escrow and
title cancellation charges, and neither party shall have any further rights,
duties or obligations under this Agreement, except with respect to those
obligations which are specified to survive the termination of this Agreement, or
(b) to accept the Property in its then condition and proceed to Closing, in
which event Optionor shall assign to Optionee at Closing any available casualty
insurance proceeds (except business interruption proceeds which shall be
retained by Optionor) or, if such proceeds are received by Optionor, then
Optionee shall receive a credit against the Purchase Price in such amount;
provided, that if Optionor desires to restore any damage caused by such casualty
and such restoration will be completed prior to the Closing Date, then Optionor
may retain the insurance proceeds and shall restore the Property, at Optionor’s
sole cost and expense, on or before the Closing Date. In the event that one (1)
or more of the buildings on the Property are destroyed or materially damaged
other than through the negligence or willful misconduct of Optionee, Optionee’s
Agents and/or Optionee’s Affiliates prior to Close of Escrow, but the total
anticipated cost of restoration of the Property is less than One Hundred
Thousand Dollars ($100,000.00), this Agreement shall not terminate, and Optionee
shall take the Property in its then condition, provided however, Optionee shall
receive a credit in Escrow against the Purchase Price in the amount of such cost
of restoration of the Property (unless Optionor elects to restore the Property
as described above in which event Optionor shall complete such restoration on or
before the Closing Date and shall retain all insurance proceeds attributable to
such casualty). Notwithstanding the foregoing, where any restoration described
above has not been completed on or before the Closing Date the Closing shall
nevertheless take place, and Optionor shall complete said restoration following
the Closing. In such event, all remaining insurance proceeds, if any, in
Optionor’s possession as of the Closing not yet used for said restoration,
together with any amount reasonably estimated by a third party contractor
reasonably acceptable to both Optionor and Optionee to be needed to complete
such restoration after Closing that exceeds the amount of available insurance
proceeds (the “Additional Funds”), shall be held back in escrow for disbursement
for such restoration work on terms reasonably satisfactory to Optionee (such
terms to include, without limitation, receipt of statutory conditional and
unconditional lien releases), with any remaining balance of such escrowed funds
following completion of such work to go (A) first, to Optionor until Optionor
has been repaid the full amount of the Additional Funds, and then (B) any
remaining amount to Optionee. Following the occurrence of any destruction or
material damage to the portion of the Property that will be subject to the Lease
that does not result in a termination of this Agreement as provided above, then
the Lease shall not be affected thereby and, where Optionor has not elected to
commence restoration prior to the Closing (in which event the foregoing
provisions of this Section 21 shall apply) the parties shall have their
respective rights under the Lease with respect to such casualty, including,
without limitation, Optionor’s restoration rights set forth in the Lease, as if
such damage occurred on the Commencement Date. To the extent damage or
destruction to the Property was caused by Optionee, Optionee’s Agents and/or
Optionee’s Affiliates, Optionee shall pay the full cost of restoration, as well
as all costs incurred by Optionor in its relocation and occupancy of any
replacement premises to the extent such costs are not covered by Optionor’s
insurance.

  

 
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If, at any time after the execution of this Agreement and prior to Closing, a
competent condemning authority files any condemnation action or threatens in
writing to file any such action seeking to condemn any interest in all or any
portion of the Property, then Optionee may terminate this Agreement. Optionee’s
termination shall be exercised by delivery to Optionor of written notice, to be
delivered no later than fifteen (15) days following Optionor’s delivery to
Optionee of notice of the commencement or receipt of written notice of the
threat of such condemnation action. Upon such termination, Optionor shall
authorize the release to Optionee from escrow of the Option Consideration (less
the Independent Consideration) and interest thereon still held by Escrow Holder,
provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee, all rights of Optionee in the Property shall be
extinguished, and Optionor shall have the exclusive right to any condemnation
award for the taking and for severance damages derived from such condemnation.
If the right to terminate is not timely exercised by Optionee, then the
transaction contemplated by this Agreement shall continue regardless of such
condemnation, without any reduction in the Purchase Price, but Optionee shall
have the exclusive right to any condemnation award and severance damages paid as
compensation by the condemning Authority for the taking of the Property so
condemned. In such case, Optionee shall be solely responsible for dealing, at
its own risk, cost and expense, with the condemning Authority with respect to
the amount of the award and/or severance damages derived from the condemnation
of the Property. If this Agreement is timely terminated pursuant to the terms of
this Article 21, then neither Optionee nor Optionor shall have any further cost,
obligation or liability to each other, except as otherwise expressly provided in
this Agreement, and, except as otherwise provided herein, Escrow Holder shall
return to the respective parties all documents which have been deposited by such
parties into Escrow.

 

22.     MISCELLANEOUS PROVISIONS

 

22.1     Time is of the Essence. Time is of the essence of this Agreement for
all provisions of which time is a factor, including, without limitation, the
Closing. If any party fails to perform its obligations in a timely manner as
required by this Agreement (after the expiration of any notice and cure periods,
or if no notice and cure period is provided for a particular obligation, within
one (1) business day after receipt of written notice from the non-defaulting
party), then the non-defaulting party may pursue the remedies set forth in this
Agreement.

 

22.2     Governing Law. This Agreement has been entered into and executed in the
State of California and shall be interpreted in accordance with the laws of said
state, excluding, however, the choice of law provisions in regard to conflicts.

 

22.3     Integration. This Agreement and the Exhibits attached hereto, upon
acceptance by the parties hereto, constitutes the sole and only agreement
between the parties hereto as to the subject matter hereof, and is intended by
each to constitute the final written memorandum of all of their agreements and
understandings in this transaction.

 

22.4     Survival of Covenants and Warranties. Except as otherwise set forth in
Article 9 hereof, all warranties, covenants, conditions, representations, and
other obligations of Optionor and Optionee, including any to be performed
subsequent to the Close of Escrow, shall survive the Close of Escrow and
delivery of the Grant Deed with respect to the Property.

 

22.5     Computation of Periods. All periods of time referred to in this
Agreement shall include all Saturdays, Sundays, and state or national holidays,
unless the period of time specifies business days, provided that if the date to
perform any act or give any notice with respect to this Agreement shall fall on
a Saturday, Sunday, or state or banking or national holiday, such act or notice
may be timely performed or given on the next succeeding day which is not a
Saturday, Sunday, or state or banking or national holiday.

  

 
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22.6     Effectiveness of Agreement and Amendments. No provision of this
Agreement may be amended or added to except by an agreement in writing signed by
the parties hereto or their respective successors in interest. This Agreement
shall not be effective or binding on any party until fully executed by all
parties hereto, but shall be interpreted as an offer under control of the
offeror prior to such acceptance.

 

22.7     Assignment. Optionee shall have the right to assign its rights under
this Agreement without Optionor’s consent to a partnership (general or limited)
or limited liability company in which Optionee or any person or entity which
directly owns at least fifty-one percent (51%) of Optionee has at least a ten
percent (10%) membership interest or management control. Except as provided in
the foregoing sentence, Optionee may not assign this Agreement without the prior
written approval of Optionor, which approval may not be unreasonably withheld,
conditioned or delayed. Prior to any assignment by Optionee (whether or not such
assignment requires Optionor’s consent), Optionee shall provide Optionor with
prior written notice and a written assumption by such assignee in form and
content reasonably acceptable to Optionor of all obligations of the Optionee
under this Agreement arising from and after such assignment. No such assignment
and assumption, however, shall relieve Optionee from any of its obligations,
liabilities or duties hereunder to be performed on or before the Closing, all of
which obligations, liabilities and duties shall remain binding on the original
Optionee hereunder.

 

22.8     Notices. All notices required or permitted by this Agreement shall be
in writing and may be delivered in person to either party or may be sent by
registered or certified mail, with postage prepaid, return receipt requested, or
delivered by Express Mail of the U.S. Postal Service, charges prepaid, or by
Federal Express or any other nationally recognized courier service guaranteeing
overnight delivery, or by facsimile or email, provided such transmission is
acknowledged in writing by the other party as a good transmission, addressed as
follows:

 

If to Optionor at:

 

Spansion LLC

915 DeGuigne Drive

P.O. Box 3453, MS212

Sunnyvale, CA 94088

Attn: Manager of Real Estate

Telephone No.: (408) 616-6833

Fax No.: (408) 616-1976

Email: allan.manzagol@spansion.com

  

 
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With a copy to:

 

Hopkins & Carley

70 South First Street

San Jose, CA 95113

Attn: Ross G. Adler, Esq.

Telephone No.: (408) 299-1302

Fax No.: (408) 938-6212

Email: radler@hopkinscarley.com

 

If to Optionee at:

 

Watt Communities LLC

2716 Ocean Park Boulevard, Suite 2025

Santa Monica, CA 90405

Attention: Max Frank

Phone: (310) 314-2418

Fax: (310) 450-3802

Email: mfrank@wattcompanies.com

 

With a copy to:

 

Watt Companies, Inc.

2716 Ocean Park Boulevard, Suite 2025

Santa Monica, CA 90405

Attention: Christopher Chase

Phone: (310) 314-2504

Fax: (310) 450-3802

Email: cchase@wattcompanies.com

 

If to Escrow Holder at:

 

First American Title Company

6683 Owens Drive

Pleasanton, CA 94588

Attention: Diane Burton

Phone: (925) 738-4050

Fax: (866) 648-7806

Email: dburton@firstam.com

 

Any such notice sent by registered or certified mail, return receipt requested,
shall be deemed to have been duly given and received seventy-two (72) hours
after the same is so addressed and mailed with postage prepaid. Notices
delivered by overnight service shall be deemed to have been given and received
twenty-four (24) hours after delivery of the same, to the U.S. Postal Service,
charges prepaid, or to the private courier; provided, however, that notices
given by Federal Express or other private courier shall be deemed given upon
actual receipt thereof if received earlier than twenty-four (24) hours after
delivery to Federal Express or such courier. Notices given by facsimile or email
shall be effective upon acknowledgment by the other party of good transmission.
Any notice or other document sent by any other manner shall be effective only
upon actual receipt thereof. Refusal to accept notice shall be deemed to be
delivery thereof. Any party may change its address for purposes of this Section
by giving notice to the other party and to Escrow Holder and the Title Company
as herein provided.

  

 
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22.9     Attorneys’ Fees. In the event of any action or proceeding brought by
either party against the other under this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys’ fees and all fees, costs and
expenses incurred for prosecution, defense, consultation, or advice in such
action or proceeding. In addition to the foregoing, the prevailing party shall
be entitled to its actual attorneys’ fees and all fees, costs and expenses
incurred in any post-judgment proceedings to collect or enforce the judgment.
This provision is separate and several and shall survive the merger of this
Agreement into any judgment on this Agreement.

 

22.10    Successors and Assigns. Subject to the provisions of Section 22.7
above, this Agreement, and all the provisions, covenants and conditions hereof,
shall be binding upon and shall inure to the benefit of each of the parties
hereto and their respective successors and permitted assigns.

 

22.11     Severability. If any paragraph, section, sentence, clause or phrase
contained in this Agreement shall become illegal, null or void, against public
policy, or otherwise unenforceable, for any reason, or shall be held by any
court of competent jurisdiction to be illegal, null or void, against public
policy, or otherwise unenforceable, the remaining paragraphs, sections,
sentences, clauses or phrases contained in this Agreement shall not be affected
thereby.

 

22.12     Waiver. The waiver of any breach of any provision hereunder by
Optionor or Optionee shall not be deemed to be a waiver of any preceding or
subsequent breach hereunder. No failure or delay of any party in the exercise of
any right given hereunder shall constitute a waiver thereof nor shall any
partial exercise of any right preclude further exercise thereof.

 

22.13     Further Assurances. Optionee and Optionor each agree to do such
further acts and things and to execute and deliver such additional agreements
and instruments as the other may reasonably require to consummate, evidence or
confirm the sale or any other agreement contained herein in the manner
contemplated hereby.

 

22.14     Capitalized Terms. All capitalized terms used but not defined in the
Exhibits hereto shall have the same meanings as set forth in this Agreement.

 

22.15     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one and the same instrument. Delivery of the executed Agreement may
be accomplished by fax or electronic mail, and if so done, the fax copy or
electronically mailed copy shall be deemed an executed original counterpart of
the Agreement. All executed counterparts and any initialed pages and signature
pages, including fax or electronically mailed copies thereof, may be assembled
to form a single original document.

  

 
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22.16     Negotiated Transaction. The provisions of this Agreement were
negotiated by all parties with the advice of counsel and this Agreement shall be
deemed to have been drafted by all the parties.

 

22.17     Board of Directors Approval. Notwithstanding any other provision of
this Agreement, the parties agree that Optionor’s obligations under this
Agreement shall be contingent upon Optionor obtaining the approval of this
transaction by the board of directors of Spansion Inc., a Delaware corporation,
on or before thirty (30) days after the Effective Date. If Optionor does not
deliver written notice to Optionee on or before the end of such 30-day period
either confirming that such approval has been obtained or waiving this
condition, this Agreement shall be deemed terminated, Optionor shall authorize
the release to Optionee from escrow of the First Installment (less the
Independent Consideration) and interest thereon still held by Escrow Holder,
provided that if the Option Consideration has been released to Optionor at such
time, Optionor shall promptly return the same (less the Independent
Consideration) to Optionee, and Optionor shall pay any escrow and title
cancellation charges, and neither party shall have any further rights, duties or
obligations under this Agreement, except with respect to those obligations which
are specified to survive the termination of this Agreement.

 

 
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22.18     Effective Date. As used herein, the term “Effective Date” shall mean
the first date on which both Optionor and Optionee shall have executed this
Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

 

 

OPTIONOR:

 

SPANSION LLC,
a Delaware limited liability company

 

 

By: /s/ Carmine R. Renzulli

Name: Carmine R. Renzulli

Title: Corporate Senior Vice President, Worldwide Human Resources

 

Dated: October 17, 2013

 

 

OPTIONEE:

 

WATT COMMUNITIES LLC,
a California limited liability company

 

 

By: /s/ Max Frank

Name: Max Frank

Its: Group President

 

Dated: October 17, 2013

 

 
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ESCROW HOLDER ACKNOWLEDGEMENT

 

Escrow Holder hereby acknowledges that it has received a fully executed
counterpart of the foregoing Option Agreement for the Purchase and Sale of Real
Property and Escrow Instructions and agrees to act as Escrow Holder and the
Title Company thereunder and to be bound by and perform the terms thereof as
such terms apply to Escrow Holder and the Title Company. Escrow Holder’s failure
to execute this Agreement where indicated below and deliver a counterpart
original of this Agreement to either or both of Optionor and Optionee shall in
no way delay the Effective Date hereunder or invalidate or render this Agreement
unenforceable in any respect.

 

 

 

ESCROW HOLDER:

 

FIRST AMERICAN TITLE COMPANY

 

 

By:                                                                        

Name:                                                                   

Its:                                                                         

  

 
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Table of Contents

Page

 

1.

GRANT OF OPTION

1

     

2.

OPTION CONSIDERATION

2

     

3.

PURCHASE PRICE; PRICE PARTICIPATION

3

     

 

3.1

Purchase Price

3

 

3.2

Payment of Purchase Price

3

       

4.

INSPECTION AND RELATED MATTERS

3

     

 

4.1

Inspection

3

 

4.2

Release

5

 

4.3

Hazardous Materials Definition, Disclosure, and Assignment

6

 

4.4

Insurance

8

 

4.5

Indemnity

9

       

5.

TITLE AND ESCROW

9

     

6.

PERMITTED TITLE EXCEPTIONS

10

     

 

6.1  

11

 

6.2  

11

       

7.

CONDITIONS TO CLOSE OF ESCROW

11

     

 

7.1

Optionee Conditions

11

 

7.2

Optionor Conditions

13

       

8.

CLOSE OF ESCROW

13

     

 

8.1

Closing Date

14

 

8.2

Optionee’s Obligations

14

 

8.3

Optionor’s Obligations

14

 

8.4

Escrow Holder’s Obligations

15

 

8.5

Supplemental Taxes

15

 

8.6

Escrow Holder’s Reporting Obligations

15

 

8.7

Optionee Documents

16

 

8.8

Escrow Cancellation Charges

16

       

9.

OPTIONOR’S REPRESENTATIONS AND WARRANTIES

16

     

 

9.1

Due Authorization

16

 

9.2

No Conflict

16

 

9.3

No Condemnation or Litigation

17

 

9.4

No Violations of Law

17

 

9.5

Property Disclosures

17

 

9.6

No Fraudulent Transfer

17

 

9.7

Leases or Other Agreements

17

 

9.8

Third Party Rights

17

 

9.9

Remediation Agreement

18

 

9.10

Environmental Condition

18

       

10.

OPTIONEE’S REPRESENTATIONS AND WARRANTIES

19

  

 
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TABLE OF CONTENTS

(Continued)

Page

 

 

10.1

Due Authorization

19

 

10.2

Due Execution

19

 

10.3

Bankruptcy or Insolvency

20

 

10.4

Preliminary Due Diligence

20

       

11.

PROPERTY “AS-IS”

21

     

 

11.1

“As-Is” Sale

21

       

12.

GENERAL ASSIGNMENT

22

     

13.

[INTENTIONALLY OMITTED]

22

     

14.

DISCLOSURES TO PURCHASERS

24

     

15.

INDEMNITY

24

     

 

15.1  

24

 

15.2  

24

 

15.3  

24

       

16.

OPTIONOR’S COVENANTS

25

     

 

16.1

Covenants

25

 

16.2

Optionee's Right to Cure

26

       

17.

LEASEBACK

26

     

18.

CONFIDENTIALITY OF AGREEMENT

27

     

19.

BROKER’S COMMISSION

27

     

20.

DEFAULT

28

     

 

20.1

Optionor Default

28

 

20.2

Optionee Default

28

 

20.3

Recoverable Damages

29

       

21.

MATERIAL DAMAGE; CONDEMNATION

30

     

22.

MISCELLANEOUS PROVISIONS

31

     

 

22.1

Time is of the Essence

31

 

22.2

Governing Law

31

 

22.3

Integration

31

 

22.4

Survival of Covenants and Warranties

31

 

22.5

Computation of Periods

31

 

22.6

Effectiveness of Agreement and Amendments

31

 

22.7

Assignment

31

 

22.8

Notices

32

 

22.9

Attorneys’ Fees

34

 

22.10

Successors and Assigns

34

 

22.11

Severability

34

 

22.12

Waiver

34

 

22.13

Further Assurances

34

  

 

 
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TABLE OF CONTENTS

(Continued)

Page

 

 

22.14

Capitalized Terms

34

 

22.15

Counterparts

34

 

22.16

Negotiated Transaction

34

 

22.17

Board of Directors Approval

35

 

22.18

Effective Date

36

 

LIST OF EXHIBITS

         

Exhibit A-1

-

Legal Description of Property

 

Exhibit A-2

 

Depiction of Property

 

Exhibit B

-

Grant Deed

 

Exhibit C

-

General Assignment

 

Exhibit D

-

Lease

 

Exhibit E

-

Assignment and Assumption of Remediation Agreement

 

Exhibit F

-

Seller’s Affidavit

  

 
- iii -

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OPTION AGREEMENT FOR THE PURCHASE AND
SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS

 

Dated _________, 2013

 

by and between

 

SPANSION LLC,
a Delaware Limited Liability Company

 

and

 

WATT COMMUNITIES LLC,
A California Limited Liability Company