Exhibit 10.2


 


 


AGREEMENT FOR PURCHASE AND SALE


 


OF


 


2280 Faraday Avenue


 


San Diego, CA 92008


 


June 28, 2005


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I

  	
  BASIC DEFINITIONS

  	
   

  
	
  ARTICLE II

  	
  PURCHASE AND SALE

  	
   

  
	
  Section 2.1

  	
  Purchase and Sale

  	
   

  
	
  Section 2.2

  	
  Purchase Price

  	
   

  
	
  Section 2.3

  	
  Buyer’s Review and Seller’s
  Disclaimer

  	
   

  
	
  Section 2.4

  	
  Permitted Title Exceptions

  	
   

  
	
  ARTICLE III

  	
  CONDITIONS PRECEDENT

  	
   

  
	
  Section 3.1

  	
  Conditions

  	
   

  
	
  Section 3.2

  	
  Failure or Waiver of
  Conditions Precedent

  	
   

  
	
  ARTICLE IV

  	
  COVENANTS, WARRANTIES AND
  REPRESENTATIONS

  	
   

  
	
  Section 4.1

  	
  Seller’s Warranties and
  Representations

  	
   

  
	
  Section 4.2

  	
  Seller’s Covenants

  	
   

  
	
  Section 4.3

  	
  Buyer’s Warranties and
  Representations

  	
   

  
	
  Section 4.4

  	
  Limitations

  	
   

  
	
  Section 4.5

  	
  Indemnifications

  	
   

  
	
  ARTICLE V

  	
  DEPOSIT

  	
   

  
	
  ARTICLE VI

  	
  ESCROW AND CLOSING

  	
   

  
	
  Section 6.1

  	
  Escrow Arrangements

  	
   

  
	
  Section 6.2

  	
  Closing

  	
   

  
	
  Section 6.3

  	
  Prorations

  	
   

  
	
  Section 6.4

  	
  Other Closing Costs

  	
   

  
	
  Section 6.5

  	
  Further Documentation

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS

  	
   

  
	
  Section 7.1

  	
  Damage or Destruction

  	
   

  
	
  Section 7.2

  	
  Brokerage Commissions and
  Finder’s Fees

  	
   

  
	
  Section 7.3

  	
  Successors and Assigns

  	
   

  
	
  Section 7.4

  	
  Notices

  	
   

  
	
  Section 7.5

  	
  Time

  	
   

  
	
  Section 7.6

  	
  Possession

  	
   

  
	
  Section 7.7

  	
  Incorporation by Reference

  	
   

  
				



 


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  Section 7.8

  	
  No Deductions or Off-Sets

  	
   

  
	
  Section 7.9

  	
  Attorneys’ Fees

  	
   

  
	
  Section 7.10

  	
  Construction

  	
   

  
	
  Section 7.11

  	
  Governing Law

  	
   

  
	
  Section 7.12

  	
  Damages

  	
   

  
	
  Section 7.13

  	
  Confidentiality

  	
   

  
	
  Section 7.14

  	
  Counterparts

  	
   

  
	
  Section 7.15

  	
  Entire Agreement

  	
   

  



 


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AGREEMENT FOR PURCHASE AND SALE


OF


2280 FARADAY AVENUE, CARLSBAD, CA


 


THIS
AGREEMENT FOR PURCHASE AND SALE is made and entered into as of June 28, 2005 (the “Effective Date”) by
and between ISIS PHARMACEUTICALS, INC.,
a Delaware corporation (“Seller”), and ELECTRO
SURFACE TECHNOLOGY, INC., a California corporation (“Buyer”).


 


RECITALS


 


A.            Seller owns certain improved real property
situated at 2280 Faraday Avenue, Carlsbad, CA 92008, together with associated
tangible and intangible personal property.


 


B.            Buyer desires to purchase from Seller and
Seller desires to sell to Buyer, subject to the terms and conditions contained
in this Agreement, the foregoing real property and any and all associated
tangible and intangible personal property owned by Seller.


 


AGREEMENT


 


NOW,
THEREFORE, Buyer and
Seller do hereby agree as follows:


 


ARTICLE I



BASIC DEFINITIONS


 


Closing Date. 
Unless otherwise agreed upon in writing by the Parties, the term
“Closing Date” shall mean the 90th day following the Effective Date
(i.e September 26, 2005), or any earlier date approved in writing by Buyer and
Seller for the close of escrow with respect to the purchase and sale of the
Property.


 


Contract
Period.  The term “Contract Period” shall mean the
period from the date of this Agreement through and including the Closing Date.


 


Disclosure
Statement.  The term “Disclosure Statement” shall mean the
statement set forth as Exhibit A
to this Agreement.


 


Inspection
Period.  The term “Inspection Period” shall mean the
period commencing on the Effective Date and ending at 5:00 p.m. California time
on the 45th day following the Effective Date (i.e. August 12, 2005),
except that solely with respect
to the condition set forth in clause (iii) of Section 3.1(a), the Inspection
Period will end at 5:00 p.m. California time on September 1, 2005.  Notwithstanding the foregoing, if prior to September
1, 2005 (I) the appraisal in connection with Buyer’s SBA loan has been
completed; (II) the result of such appraisal is an amount sufficient to fund
Buyer’s SBA loan as contemplated by clause (iii) of Section 3.1(a); (III)
Buyer’s lenders’ inform Seller that the lenders’ are prepared to fund the SBA
loan prior to the Closing Date, but subject to final loan committee approval;
and (IV) one or both 


 


1





















 


of such loan committees have not met, but are
scheduled to meet to approve Buyer’s SBA loan on a date between September 1,
2005 and September 16, 2005, then with respect to the condition set forth in
clause (iii) of Section 3.1(a), the Inspection Period will end at 12:00 p.m.
California time on the first business day following the date such loan
committees are scheduled to meet to approve Buyer’s SBA loan.


 


Intangible
Property.  The term “Intangible Property” shall mean
Seller’s rights and interests in: (a) any and all transferable or assignable
permits, building plans and specifications, certificates of occupancy,
operating permits, sign permits, development rights and approvals,
certificates, licenses, warranties and guarantees, trade names, service marks,
engineering, soils, pest control and other reports relating to the Property,
tenant lists, and advertising materials identified with the Property; (b)
maintenance, service and other operating contracts, equipment leases and other
arrangements or agreements to which Seller is a party affecting the ownership,
repair, maintenance, management, leasing or operation of the Property; and (c)
all other transferable intangible property, miscellaneous rights, benefits or
privileges of any kind or character with respect to the Property.


 


Leases.  The
term “Leases” shall mean all leases, rental agreements or other agreements
(including all amendments or modifications thereto) which entitle any person to
the occupancy or use of any portion of the Property.


 


Personal
Property.  The term “Personal Property” shall mean all
furniture, furnishings, trade fixtures, building systems and equipment
(including, without limitation, HVAC, back-up generators, security and life
safety systems) and other tangible personal property owned by Seller that is
located at and used in connection with the operation of the Real Property.


 


Property.  The
term “Property” shall mean the Real Property, Seller’s interest in the Leases,
the Personal Property and the Intangible Property.


 


Real
Property.  The term “Real Property” shall mean that
certain real property (including, without limitation, any and all other
improvements thereon) situated at 2280 Faraday Avenue, Carlsbad, CA 92008.  The land component of the Real Property is
legally described in Exhibit B attached
to this Agreement.


 


Title
Company.  The term “Title Company” shall mean First
American Title Insurance Company, 411 Ivy Street, San Diego, CA 92101.


 


ARTICLE II



PURCHASE AND SALE


 


Section 2.1            Purchase and Sale. 
Seller agrees to sell the Property to Buyer, and Buyer agrees to
purchase the Property upon all of the terms, covenants and conditions set forth
in this Agreement.


 


Section 2.2            Purchase Price.  The
purchase price for the Property (the “Purchase Price”) shall be the sum of
$3,200,000.00.  The entire amount of the
Purchase Price (less the 


 


2





















 


Deposit delivered pursuant to Article V
below) shall be payable by Buyer to Seller in cash on the Closing Date through
the escrow described in Section 6.1 below.


 


Section 2.3            Buyer’s Review and Seller’s
Disclaimer.


 


(a)           Subject
to the provisions of subsection 2.3(c) below, during the Inspection Period
Buyer shall be permitted to make a complete review and inspection of the
physical, legal, economic and environmental condition of the Property,
including, without limitation, any leases and contracts affecting the Real
Property, books and records maintained by Seller or its agents relating to the
Property, boundary and other survey-related issues relating to the Real
Property, pest control matters, soil condition, asbestos, PCB, hazardous waste,
toxic substance or other environmental matters, compliance with building,
health, safety, land use and zoning laws, regulations and orders, plans and
specifications, structural, life safety, HVAC and other building system and engineering
characteristics, traffic patterns and all other information pertaining to the
Property.  Without representation or
warranty, Seller shall cooperate in Buyer’s review and provide Buyer with the
opportunity to review leases, financial reports, survey and other third party
inspection reports and similar non-proprietary or non-confidential materials in
Seller’s possession relating to the Property. 
Buyer acknowledges (i) that Buyer has entered into this Agreement with
the intention of making and relying upon its own investigation of the physical,
environmental, economic and legal condition of the Property, and (ii) that
Buyer is not relying upon any representations and warranties, other than those
specifically set forth in Section 4.1 below, made by Seller or anyone acting or
claiming to act on Seller’s behalf concerning the Property.  Buyer further acknowledges that it has not
received from Seller any accounting, tax, legal, architectural, engineering,
property management or other advice with respect to this transaction and is
relying solely upon the advice of its own accounting, tax, legal,
architectural, engineering, property management and other advisors.  Buyer specifically undertakes and assumes all
risks associated with the matters disclosed by Seller on the Disclosure
Statement.  Subject to the provisions of
Section 4.1 of this Agreement, Buyer shall purchase the Property in its “as is”
condition on the Closing Date and assumes the risk that adverse physical, environmental,
economic or legal conditions may not have been revealed by its
investigation.  Furthermore, at Seller’s
expense, Seller will engage Kleinfelder Inc, or such other environmental
consulting firm as reasonably approved by Buyer, to analyze a single core
sample taken from the sump area located on the Property using the analytical
methods listed on Schedule 2.3(a) attached hereto, with the results of such
analysis to be provided electronically (the “Core Test”).  Seller will provide the results of such Core
Test to Buyer on or before 5:00 p.m. on the 25th day following the
Effective Date.


 


(b)           Except
with respect to any claims arising out of any breach of covenants,
representations or warranties set forth in Section 4.1 below, Buyer, for itself
and its agents, affiliates, successors and assigns, hereby releases and forever
discharges Seller, its agents, affiliates, successors and assigns from any and
all rights, claims and demands at law or in equity, whether known or unknown at
the time of this agreement, which Buyer has or may have in the future, arising
out of the physical, environmental, economic or legal condition of the
Property, including, without limitation, any claim for indemnification or
contribution arising under the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et. seq.) or any
similar federal, state or local statute, rule or ordinance relating to
liability of property owners for environmental matters.  For the foregoing purposes, Buyer hereby 


 


3





















 


specifically waives the provisions of Section
1542 of the California Civil Code and any similar law of any other state,
territory or jurisdiction.  Section 1542
provides:


 


A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.


 


Buyer hereby specifically
acknowledges that Buyer has carefully reviewed this subsection and discussed
its import with legal counsel and that the provisions of this subsection are a
material part of this Agreement.


 


	
   

  	
   

  
	
   

  	
  Buyer

  



 


By proceeding with the close
of escrow, Buyer shall be deemed for all purposes to have remade as of the
Closing Date, all of the statements set forth in this Section 2.3(b).


 


(c)           Buyer’s
exercise of the rights of review and inspection set forth in subsection (a)
shall be subject to the following limitations: (i) any entry onto the Real
Property by Buyer, its agents or representatives, shall be during normal
business hours, following reasonable prior notice to Seller and delivery to
Seller of satisfactory evidence of Buyer’s general liability insurance (in the
amount of at least $1,000,000 per occurrence, $3,000,000 aggregate, and with
Seller named as an additional insured), and, at Seller’s discretion,
accompanied by a representative of Seller; (ii) Buyer shall not conduct any
drilling, test borings or other disturbance of the Real Property for review of
soils, compaction, environmental, structural or other conditions without
Seller’s prior written consent; (iii) Buyer shall exercise reasonable diligence
not to disturb the use or occupancy of any occupant of the Property; and (iv)
Buyer shall indemnify, defend and hold Seller harmless from all loss, cost, and
expense resulting from any entry or inspections performed by Buyer, its agents
or representatives.


 


Section 2.4            Permitted Title Exceptions. 
During the Inspection Period, Seller with provide to Buyer from Title
Company and Buyer will review a preliminary title report with respect to the
Real Property, together with all documents and information pertaining to the
exceptions to title listed in such report. 
In addition, Buyer shall, at its expense, obtain during the Inspection
Period any survey of the Real Property desired by Buyer or required by Title
Company as a condition to the issuance of the Title Policy described in Section
3.1(a)(ii) below (the “Survey”).  Buyer
may advise Seller in writing and in reasonable detail, not later than five (5)
business days prior to the close of the Inspection Period, what exceptions to
title, if any, listed in the then current preliminary report or disclosed on
the Survey are not acceptable to Buyer (the “Title Objections”).  Buyer shall not, however, unreasonably
express disapproval of any exceptions to title and, prior to notifying Seller
of any Title Objections, shall endeavor in good faith to cause Title Company to
modify and update the preliminary report to reflect requested corrections and
revisions.  Seller shall have five (5)
business days after receipt of Buyer’s Title Objections to give Buyer notice
that (a) Seller will remove any Title Objections from title (or afford the
Title Company necessary information or certifications to permit it to insure
over such exceptions) or (b) Seller elects not to cause such exceptions to be
removed.  Seller’s failure to 


 


4





















 


provide notice to Buyer within such five (5)
business day period as to any Title Objection shall be deemed an election by
Seller not to remove the Title Objection. 
If Seller so notifies or is deemed (pursuant o the previous sentence) to
have notified Buyer that Seller shall not remove any or all of the Title
Objections, Buyer shall have until the close of the Inspection Period to
determine whether (i) to proceed with the purchase and take the Property
subject to such exceptions or (ii) to terminate this Agreement, in which case
the Deposit made by Buyer to Title Company will promptly be returned to Buyer
in its entirety.  “Permitted Exceptions”
shall include and refer to any and all exceptions to title, excepting solely
Title Objections that have been timely identified by Buyer and that Seller has
notified Buyer pursuant to this Section that Seller is willing to remove.


 


ARTICLE III



CONDITIONS PRECEDENT


 


Section 3.1            Conditions.


 


(a)           Notwithstanding
anything in this Agreement to the contrary, Buyer’s obligation to purchase the
Property shall be subject to and contingent upon the satisfaction or waiver of
the following conditions precedent:


 


(i)            Buyer’s
inspection and approval, within the Inspection Period, of all physical,
environmental (including, but not limited to the Core Test), economic and legal
matters relating to the Property, pursuant to Section 2.3 above;


 


(ii)           The
willingness of Title Company to issue, upon the sole condition of the payment
of its regularly scheduled premium, its American Land Title Association
extended coverage Owner’s Policy of Title Insurance 1992 Form (the “Title
Policy”), with such endorsements as may have been requested by Buyer and agreed
to by Title Company during the Inspection Period, insuring Buyer in the amount
of the Purchase Price that title to the Real Property is vested of record in
Buyer on the Closing Date subject only to the printed conditions and exceptions
of such policy and the Permitted Exceptions;


 


(iii)         Prior
to the expiration of the Inspection Period, Buyer obtaining a commitment for an
SBA loan for a sum equal to at least 90% of the Purchase Price; provided, however, from and after the
expiry of the Inspection Period, the condition set forth in this clause (iii)
will be null and void;


 


(iv)          Seller’s
performance or tender of performance of all material obligations under this
Agreement and the material truth and accuracy of Seller’s express
representations and warranties.


 


(b)           Notwithstanding
anything in this Agreement to the contrary, Seller’s obligation to sell the
Property shall be subject to and contingent upon the satisfaction or waiver of
the following conditions precedent:


 


5





















 


(i)            Buyer’s
performance or tender of performance of all material obligations under this
Agreement and the material truth and accuracy of Buyer’s express representations
and warranties;


 


(ii)           The
board of directors of Buyer will have approved the sale of the Property
pursuant to the terms of this Agreement; provided,
however that this condition (ii) will become null and void after the
expiration of the Inspection Period; and


 


(iii)         The
satisfaction of the conditions set forth in subparagraphs (a)(i) through (iii)
above.


 


Section 3.2            Failure or Waiver of
Conditions Precedent.  In the event any of the conditions set forth
in Section 3.1 are not fulfilled or waived, the party benefited by such
condition may, by written notice to the other party, terminate this Agreement,
whereupon all rights and obligations hereunder of each party shall be at an
end.  Either party may, at its election,
at any time or times on or before the date specified for the satisfaction of
the condition, waive in writing the benefit of any of the conditions set forth
in Section 3.1(a) and 3.1(b) above. 
Notwithstanding any contrary provision of this Agreement, Buyer shall be
deemed to have completed the inspection and approval described in Section
3.1(a)(i) above, and the condition set forth in that clause shall be deemed
satisfied, unless Buyer delivers to Seller written notice of failure of such
condition on or prior to the close of the Inspection Period.  In the event this Agreement is terminated as
a result of the failure of any condition set forth in Section 3.1(a), Seller
shall return the full amount of the Deposit to Buyer.  In any event, Buyer’s consent to the close of
escrow pursuant to this Agreement shall waive any remaining unfulfilled
conditions.


 


ARTICLE IV



COVENANTS, WARRANTIES AND REPRESENTATIONS


 


Section 4.1            Seller’s Warranties and
Representations.  Seller hereby makes the following
representations and warranties to Buyer as of the date of this Agreement;
provided that each of such representations and warranties shall be deemed to be
modified by any contrary or qualifying information contained in any reports,
schedules or other informational materials delivered or made available to Buyer
pursuant to this Agreement or set forth on the Disclosure Statement:


 


(a)           Seller
has full power and lawful authority to enter into and carry out the terms and
provisions of this Agreement and to execute and deliver all documents which are
contemplated by this Agreement, and all actions of Seller necessary to confer
such power and authority upon the persons executing this Agreement (and all
documents which are contemplated by this Agreement) on behalf of Seller have
been taken;


 


(b)           To
Seller’s knowledge, (i) the list of service and equipment contracts attached to
this Agreement as 

Exhibit D is a complete and
accurate list of all of the service and equipment contracts presently in effect
with respect to the Real Property, (ii) the copies of such contracts that have
been (or will be) delivered or made available to Buyer are true, correct and
complete, and (iii) each such contract is in full force and effect;


 


6





















 


(c)           To
Seller’s knowledge, Seller has received no written notice from any governmental
authorities that (i) eminent domain proceedings for the condemnation of the
Real Property are pending or (ii) that the Property or its operation violates
in any way any applicable laws, ordinances, rules, regulations, judgments,
orders, covenants, conditions or restrictions, whether federal, state, local,
foreign or private, including without limitation the Americans with
Disabilities Act and applicable environmental laws, rules and regulations, the
violation of which would result in a material adverse change in the Property or
its operation;


 


(d)           To
Seller’s knowledge, Seller has received no written notice of any threatened or
pending litigation against Seller or affecting the Real Property which would
materially and adversely affect the Real Property or Seller’s capacity to
perform under this Agreement;


 


(e)           Seller
is not a “foreign person” within the meaning of Section 1445(f)(3) of the
Internal Revenue Code; and


 


(f)            To
Seller’s knowledge, Seller has received no written notice from any governmental
authority that any of the improvements located on the Real Property are
presently in violation of any applicable building codes, zoning or land use
laws, or other law, order, ordinance, rule or regulation affecting the Real
Property.


 


As used herein, the term
“Seller’s knowledge” or words of similar effect shall mean the current actual,
subjective knowledge of (i) Patricia Lowenstam, Vice President Human Resources,
Operations, Health, Safety and Environment, (ii) Elizabeth Hougen, Vice
President Finance and (iii) Grantland E. Bryce, Vice President Legal and
General Counsel.  Neither Patricia
Lowenstam, Elizabeth Hougen or Grantland Bryce nor any party other than Seller
shall bear responsibility for any breach of representation.  Notwithstanding the foregoing, an officer of
Isis identified above charged with responsibility for the aspect of the
business relevant or related to the matter at issue will be deemed to have
knowledge of a particular matter if, in the reasonable exercise of his or her
duties and responsibilities, such officer should have known of such matter.


 


Section 4.2            Seller’s Covenants. 
Seller hereby covenants and agrees as follows:


 


(a)           during
the Contract Period, Seller shall ensure that the Property is operated and
maintained in a manner consistent with current practices and maintain
reasonable and customary levels and coverages of insurance and Seller shall not
create or acquiesce in the creation of liens or exceptions to title other than
the Permitted Exceptions or voluntarily take any action (other than as may be
permitted pursuant to subparagraphs (b) and (c) of this Section 4.2) to render
any of the representations or warranties of Seller set forth in Section 4.1
materially incorrect; and


 


(b)           during
the Contract Period, Seller will not execute or modify any Leases or other
contracts, (i) without promptly notifying Buyer thereof and providing Buyer
with copies of the relevant contract documents, and (ii) as to any Lease or
other contract (or modification thereof) executed during the period between the
expiration of the Inspection Period and the Closing Date, without Buyer’s prior
approval, which approval shall not be unreasonably 


 


7





















 


withheld and shall be deemed given if Buyer
should fail to approve or disapprove any such matter in writing within 5 days
following Seller’s request for such action.


 


(c)           Notwithstanding
anything to the contrary contained in this Section 4.2, Seller is permitted to
grant Electronic Online Systems International (“EOS”) a non-exclusive easement
to the parking spaces depicted on Schedule 4.2(c), solely in connection with
the sale of the property located at 2292 Faraday Avenue, Carlsbad, CA 92008
(“2292 Faraday”); provided, however,
that if Seller does not ultimately sell 2292 Faraday to EOS, this exception to
Section 4.2 will become null and void.


 


Section 4.3            Buyer’s Warranties and
Representations.  Buyer hereby represents and warrants to
Seller that (a) Buyer has and as of the Closing Date shall have, full power and
lawful authority to enter into and carry out the terms and conditions of this
Agreement and to execute and deliver all documents which are contemplated by
this Agreement, (b) all actions necessary to confer such power and authority
upon the persons executing this Agreement and all documents which are
contemplated by this Agreement to be executed on behalf of Buyer or its
assignee have been taken, (c) Buyer has received no written notice of any
threatened or pending litigation which would materially and adversely affect
Buyer’s capacity to perform under this Agreement, (d) Buyer has received a SBA
approval letter from a reputable financial institution in an amount that will
allow Buyer to satisfy its obligation to pay the Purchase Price; and (e) Buyer
believes that, unless matters having a material adverse economic effect on the
Property are discovered by Buyer during the Inspection Period, the Purchase
Price as set forth in Section 2.2 above is a fair and reasonable price to pay
for the Property.  Buyer warrants and
represents to Seller that Buyer will not attempt to renegotiate the Purchase
Price unless such matters having a material adverse economic effect on the
Property are discovered by Buyer during the Inspection Period.


 


Section 4.4            Limitations.


 


(a)           The
parties agree that (i) Seller’s warranties and representations contained in
this Agreement and in any document executed by Seller pursuant to this
Agreement shall survive Buyer’s purchase of the Property only for a period of
180 days after the Closing Date (the “Limitation Period”), (ii) Seller’s
aggregate liability for claims arising out of such representations and
warranties shall not exceed $500,000.00 and (iii) Buyer shall provide actual
written notice to Seller of any breach of such warranties or representations
and shall allow Seller 30 days within which to cure such breach, or, if such
breach cannot reasonably be cured within 30 days, an additional reasonable time
period, so long as such cure has been commenced within such 30 days and
diligently pursued.  If Seller fails to
cure such breach after actual written notice and within such cure period,
Buyer’s sole remedy shall be an action at law for damages as a consequence
thereof, which must be commenced, if at all, within the Limitation Period;
provided, however, that if within the Limitation Period Buyer gives Seller
written notice of such a breach and Seller commences to cure and thereafter
terminates such cure effort, Buyer shall have an additional 30 days from the date
of such termination within which to commence an action at law for damages as a
consequence of Seller’s failure to cure. 
The Limitation Period referred to herein shall apply to known as well as
unknown breaches of such warranties or representations.


 


8





















 


(b)           Notwithstanding
any contrary provision of this Agreement, if Seller becomes aware during the
Contract Period of any matters which make any of its representations or
warranties untrue, Seller shall promptly disclose such matters to Buyer in
writing.  In the event that Seller so
discloses any matters which make any of Seller’s representations or warranties
untrue in any material respect or in the event that Buyer otherwise becomes
aware during the Contract Period of any matters which make any of Seller’s
representations or warranties untrue in any material respect, Seller shall bear
no liability for such matters (provided that Seller has not breached an express
covenant set forth in this Agreement), but Buyer shall have the right to elect
in writing on or before the Closing Date, (i) to waive such matters and
complete the purchase of the Property in accordance with the terms of this
Agreement, or (ii) as to any matters disclosed following the expiration of the
Inspection Period, to terminate this Agreement and receive a refund of the
Deposit and any earnings thereon, plus reimbursement from Seller for Buyer’s
reasonable out of pocket costs incurred in connection with the negotiation of
this Agreement, Buyer’s diligence with respect to the Property, and Buyer’s
actions in furtherance of the transactions contemplated by this Agreement
(provided that said sum recoverable as reimbursement shall not exceed
$25,000).  Buyer’s delivery of the
Additional Deposit shall constitute Buyer’s conclusive agreement to accept or
waive any such matters disclosed to Buyer prior to the close of the Inspection
Period.


 


Section 4.5            Indemnifications. 
Subject to the foregoing limitations and the provisions of Sections 6.3,
6.4 and 7.12:


 


(a)           Seller
shall indemnify and defend Buyer against and hold Buyer harmless from any and
all claims, liabilities, losses, damage, costs and expenses, including, without
limitation, all reasonable attorneys’ fees, asserted against or suffered by
Buyer resulting from (i) any breach by Seller of this Agreement, and (ii) the
untruth, inaccuracy or breach of any of the representations and warranties made
by Seller pursuant to this Agreement.


 


(b)           Buyer
shall indemnify and defend Seller against and hold Seller harmless from any
claim, loss, damage, or expense, including any reasonable attorneys fees,
asserted against or suffered by Seller resulting from (i) any breach by Buyer
of this Agreement, (ii) the untruth, inaccuracy or breach of any of the
representations or warranties made by Buyer pursuant to this Agreement, and
(iii) any liability or obligation arising in connection with the Property
accruing following the Closing Date.


 


ARTICLE V



DEPOSIT


 


Within 5 business days
following the mutual execution of this Agreement by Buyer and Seller, Buyer
shall deliver to Title Company, for deposit into such escrow, the sum of
$50,000.00 (the “Initial Deposit”).  On
or before the expiration of the Inspection Period, Buyer shall deliver to Title
Company the additional sum of $150,000.00 (the “Additional Deposit”), which,
together with the Initial Deposit, shall be referred to in this Agreement as
the “Deposit”.  In the event that this
transaction is consummated as contemplated by this Agreement, then the entire
amount of the Deposit, together with any interest accrued thereon, shall be
credited against the Purchase Price.  The
entire amount of the Deposit, together with any interest accrued thereon, shall
be 


 


9





















 


returned immediately to Buyer in the event of
the failure of any of the conditions precedent set forth in Section 3.1(a)
above or in the event that (a) the conditions precedent set forth in Section
2.4 or 3.1(b) shall have been satisfied or waived, (b) Buyer shall have
performed fully or tendered performance of its obligations hereunder and (c)
Seller shall be unable or fail to perform its obligations, under this
Agreement.  IN ALL OTHER EVENTS, THE
ENTIRE AMOUNT OF THE DEPOSIT, PLUS ACCRUED INTEREST, SHALL BE RETAINED BY
SELLER AS LIQUIDATED DAMAGES.  BUYER AND
SELLER HEREBY ACKNOWLEDGE AND AGREE THAT SELLER’S DAMAGES IN THE EVENT OF SUCH
A BREACH OF THIS AGREEMENT BY BUYER WOULD BE DIFFICULT OR IMPOSSIBLE TO
DETERMINE, THAT THE AMOUNT OF THE DEPOSIT PLUS ACCRUED INTEREST IS THE PARTIES’
BEST AND MOST ACCURATE ESTIMATE OF THE DAMAGES SELLER WOULD SUFFER IN THE EVENT
THE TRANSACTION PROVIDED FOR IN THIS AGREEMENT FAILS TO CLOSE, AND THAT SUCH
ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT.  BUYER AND SELLER AGREE THAT SELLER’S RIGHT TO
RETAIN THE DEPOSIT PLUS ACCRUED INTEREST SHALL BE THE SOLE REMEDY OF SELLER AT
LAW IN THE EVENT OF SUCH A BREACH OF THIS AGREEMENT BY BUYER.  THE FOREGOING, HOWEVER, IS A LIQUIDATED
MEASURE OF DAMAGES FOR THE SPECIFIED BREACH ONLY, AND SHALL NOT LIMIT BUYER’S
LIABILITY UNDER SECTIONS 2.3, 4.5 OR 7.9 OF THIS AGREEMENT.


 


ACCEPTED AND AGREED TO:


 


 


	
   

  	
   

  	
   

  
	
  Seller

  	
   

  	
  Buyer

  



 


ARTICLE VI



ESCROW AND CLOSING


 


Section 6.1            Escrow Arrangements.  An
escrow for the purchase and sale contemplated by this Agreement has been opened
by Buyer and Seller with Title Company. 
On or before the Closing Date, Seller and Buyer shall each deliver
escrow instructions to Title Company consistent with this Article VI, and the
parties shall deposit in escrow the funds and documents described below.


 


(a)           Seller
shall deposit (or cause to be deposited):


 


(i)            a
duly executed and acknowledged grant deed in favor of Buyer from Seller with
respect to the Real Property in the form attached to this Agreement as Exhibit E (the “Deed”);


 


(ii)           a
duly executed bill of sale with respect to the Personal Property in the form
attached to this Agreement as Exhibit F
(the “Bill of Sale”);


 


10





















 


(iii)         a
duly executed counterpart of an assignment and assumption of Seller’s interest
in the Intangible Property in the form attached to this Agreement as Exhibit G (the “Assignment of Intangible
Property”);


 


(iv)          a
certificate from Seller certifying the information required by §§ 18662 of the
California Revenue and Taxation Code and the regulations issued thereunder to
establish that the transaction contemplated by this Agreement is exempt from
the tax withholding requirements of such provisions (the “California Certificate”);
and


 


(v)            a
certificate from Seller certifying the information required by §1445 of the
Internal Revenue Code and the regulations issued thereunder to establish, for
the purposes of avoiding Buyer’s tax withholding obligations, that Seller is
not a “foreign person” as defined in Internal Revenue Code § 1445(f)(3) (the
“FIRPTA Certificate”); and


 


(b)           Buyer
shall deposit:


 


(i)            immediately
available funds sufficient to pay the balance of the Purchase Price, plus
sufficient additional cash to pay Buyer’s share of all escrow costs and closing
expenses;


 


(ii)           a
duly executed counterpart of the Assignment of Intangible Property; and


 


(iii)         a
certificate duly executed by Buyer in favor of Seller confirming the waivers
and acknowledgments set forth in Sections 2.3(a) and (b) above.


 


Section 6.2            Closing. 
Title Company shall close escrow by:


 


(a)           recording
the Deed;


 


(b)           causing
Title Company to issue the Title Policy to Buyer;


 


(c)           delivering
to Buyer the Bill of Sale, the FIRPTA Certificate, the California Certificate
and the counterpart Assignment of Intangible Property executed by Seller; and


 


(d)           delivering
to Seller the counterpart Assignment of Intangible Property executed by Buyer
and the certificate described in Section 6.1(b)(iv) above, and funds in the
amount of the Purchase Price, as adjusted for credits, prorations and closing
costs in accordance with this Article VI.


 


Section 6.3            Prorations.


 


(a)           Real
estate taxes and assessments constituting a lien and allocable to the payment
period that includes the Closing Date, personal property taxes, if any, rental
income and all other items of income and expense with respect to the Property
shall be prorated between Seller and Buyer as of the Closing Date.  Income and expenses shall be prorated on the
basis of a 30-day month and on the basis of the accrual method of
accounting.  All such items attributable
to the period through and including the Closing Date shall be credited to
Seller; all such items 


 


11





















 


attributable to the period following the
Closing Date shall be credited to Buyer. 
Buyer shall be credited in escrow with (i) any portion of rental
agreement or lease deposits in Seller’s possession with respect to the Property
which are refundable to the tenants and (ii) rent prepaid beyond the Closing
Date.  Buyer shall not be entitled to any
interest on rental agreement or lease deposits or prepaid rent accrued on or
before the Closing Date.  Seller shall be
credited in escrow with any refundable deposits or bonds held by any utility,
governmental agency or service contractor with respect to the Property.  Seller shall also be credited in escrow with
any prepaid real estate taxes and assessments allocable to the period after the
Closing Date.  In addition, Seller shall
be credited in escrow with any leasing commissions, free rental periods or
tenant improvement or other allowances paid or incurred by Seller during the
Contract Period to the extent such amounts (x) were disclosed in the copies of
the Leases delivered to Buyer or were otherwise disclosed to Buyer during the
Inspection Period, and (y) are equitably allocable to that portion of the
stabilized term (i.e., the term following the tenant’s entry into occupancy and
commencement of unabated rental obligations) of any new or existing Lease of
the Property following the Closing Date. 
To the extent disclosed to Buyer by Seller, Buyer shall assume all
obligations for any such leasing commissions, free rental periods or tenant
improvement or other allowances payable following the Closing Date.


 


(b)           Buyer
and Seller shall cooperate to produce prior to the Closing Date a schedule of
prorations to be made on and after the Closing Date as complete and accurate as
reasonably possible.  With respect to
taxes or other expenses payable or reimbursable by the tenants of the Property,
the amounts prorated between Buyer and Seller shall be the net amounts (if any)
not subject to payment or reimbursement by the tenants.  All prorations which can be liquidated
accurately or reasonably estimated as of the Closing Date shall be made in
escrow on the Closing Date.  All other
prorations, and adjustments to initial estimated prorations, shall be made by
the parties with due diligence and cooperation within 30 days following the Closing
Date, or such later time as may be required to obtain necessary information for
proration, by immediate cash payment to the party yielding a net credit from
such prorations from the other party.


 


Section 6.4            Other Closing Costs.


 


(a)           Seller
shall pay (i) any county documentary transfer or transaction taxes or fees due
on the transfer of the Property, (ii) fifty percent (50%) of any city
documentary transfer or transaction taxes or fees due on the transfer of the
Property, (iii) fifty percent (50%) of all escrow, recording or other fees or
costs charged by or reimbursable to Title Company, (iv) the CLTA portion of the
title insurance premium for the Title Policy (but only for a liability amount
equal to the Purchase Price), (v) all fees and expenses of its legal counsel
and other third party consultants engaged by or on behalf of Seller in
connection with this transaction and (vi) any prepayment fees or penalties, if
any, to pay off existing mortgages affecting the Property.


 


(b)           Buyer
shall pay (i) balance of the premium for the Title Policy (including costs of
endorsements, extended coverage and related survey costs), (ii) fifty percent
(50%) of all escrow, recording or other fees or costs charged by or
reimbursable to Title Company, (iii) any sales or use taxes determined to be
payable in connection with this transaction, (iv) fifty percent (50%) of any
city documentary transfer or transaction taxes or fees due on the transfer of
the Property, (v) the cost of the Survey, (vi) all fees and expenses of its
legal counsel and other third 


 


12





















 


party consultants engaged by or on behalf of
Buyer in connection with this transaction, and (vi) the balance of the premium
for the Title Policy (including costs of endorsements, extended coverage and
related survey costs.


 


(c)           Any
costs and expenses of closing that are not expressly identified in subparagraph
(a) or (b) above shall be allocated between the parties in accordance with
prevailing custom in San Diego County.


 


Section 6.5            Further Documentation.  At
or following the close of escrow, Buyer and Seller each shall execute any
certificate or other instruments required by law or local custom or otherwise
reasonably requested by the other party to effect the transaction contemplated
by this Agreement.


 


ARTICLE VII



MISCELLANEOUS


 


Section 7.1            Damage or Destruction.


 


(a)           Buyer
shall be bound to purchase the Property for the Purchase Price as required by
the terms of this Agreement without regard to the occurrence or effect of any
damage to or destruction of the improvements on the Real Property or
condemnation by right of eminent domain, provided that the occurrence of any
damage or destruction is (i) covered by insurance (excepting deductibles), or
(ii) if not covered by insurance, involves repair costs of $250,000 or
less.  If Buyer is so bound to purchase
notwithstanding the occurrence of damage, destruction or condemnation, upon the
close of escrow: (A) in the event of damage covered by insurance, Buyer shall
receive a credit against the Purchase Price in the amount (net of collection
costs) of any insurance proceeds or condemnation award collected and retained
by Seller as a result of any such damage or destruction or condemnation and
Seller shall assign to Buyer all rights to such insurance proceeds or
condemnation awards as shall not have been collected prior to the close of
escrow; and (B) in the event of damage not covered by insurance, Buyer shall
receive a credit (not to exceed $250,000) in the amount of the estimated cost
to repair the damage.


 


(b)           Buyer
or Seller may terminate this Agreement by written notice of election given
promptly to the other party following the event if there occurs damage or
destruction not covered by insurance which involves repair costs in excess of
$250,000.


 


Section 7.2            Brokerage Commissions and
Finder’s Fees.  Except for Lannie R. Allee of CB Richard
Ellis and Kent Moore of Grubb & Ellis/BRE, each party to this Agreement
warrants to the other that no person or entity can properly claim a right to a
real estate commission, real estate finder’s fee, real estate acquisition fee
or other real estate brokerage-type compensation (collectively, “Real Estate
Compensation”) based upon the acts of that party with respect to the
transaction contemplated by this Agreement. 
Each party hereby agrees to indemnify and defend the other against and
to hold the other harmless from any and all loss, cost, liability or expense
(including but not limited to attorneys’ fees and returned commissions)
resulting from any claim for Real Estate Compensation by any person or entity
based upon such 


 


13





















 


acts. 
Seller will be responsible for paying any Real Estate Compensation to CB
Richard Ellis and Grub & Ellis per separate agreement.


 


Section 7.3            Successors and Assigns. 
Buyer may not assign any of Buyer’s rights or duties hereunder without
the prior written consent of Seller, which consent will not be unreasonably
withheld; provided that Buyer may assign this Agreement (a) to an entity
affiliated with Buyer which has, in Seller’s reasonable judgment, the financial
capacity to perform the obligations of Buyer hereunder, or (b) to an entity
directly or indirectly owned by the principals of Buyer, which is controlled by
the principals of Buyer.  No assignment
by Buyer shall relieve Buyer of its obligations under this Agreement.  Subject to the limitations on assignment
expressed in this Section 7.3, this Agreement shall be binding upon, and inure
to the benefit of, Buyer and Seller and their respective successors and
assigns.


 


Section 7.4            Notices.  All
notices or other communications required or provided to be sent by either party
shall be in writing and shall be sent by United States Postal Service, postage
prepaid or certified mail, return receipt requested, by any nationally known
overnight delivery service, by courier, or in person.  All notices shall be deemed to have been
given forty-eight (48) hours following deposit in the United States Postal
Service or upon personal delivery if sent by overnight delivery service,
courier or personally delivered.  All
notices shall be addressed to the party at the address below:


 


	
   

  	
  To Seller:

  	
  Patricia Lowenstam

  
	
   

  	
   

  	
  VP Human Resources and
  Operations

  
	
   

  	
   

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  1896 Rutherford Road

  
	
   

  	
   

  	
  Carlsbad, CA 92008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  General Counsel

  
	
   

  	
   

  	
  Fax: 760-268-4922

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  To Buyer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  and with a copy to:

  	
  The Roth Law Firm

  
	
   

  	
   

  	
  A Professional Law
  Corporation

  
	
   

  	
   

  	
  11770 Bernardo Plaza Court

  
	
   

  	
   

  	
  Suite 315

  
	
   

  	
   

  	
  San Diego, CA 92128

  
	
   

  	
   

  	
  Fax: 858-451-3643

  



 


Any address or name
specified above may be changed by notice given to the addressee by the other
party in accordance with this Section 7.4. 
The inability to deliver because of a changed 


 


14





















 


address of which no notice
was given, or rejection or other refusal to accept any notice, shall be deemed
to be the receipt of the notice as of the date of such inability to deliver or
rejection or refusal to accept.  Any
notice to be given by any party hereto may be given by the counsel for such
party.


 


Section 7.5            Time.  Time
is of the essence of every provision contained in this Agreement.


 


Section 7.6            Possession.  The
rights of possession of the Property (subject to the Leases) shall be delivered
to Buyer on the Closing Date.


 


Section 7.7            Incorporation by Reference.  All
of the exhibits attached to this Agreement or referred to herein and all
documents in the nature of such exhibits, when executed, are by this reference
incorporated in and made a part of this Agreement.


 


Section 7.8            No Deductions or Off-Sets. 
Buyer acknowledges that the Purchase Price to be paid for the Property
pursuant to this Agreement is a net amount and shall not be subject to any
off-sets or deductions.


 


Section 7.9            Attorneys’ Fees.  In
the event any dispute between Buyer and Seller should result in litigation, the
prevailing party shall be reimbursed for all reasonable costs incurred in
connection with such litigation, including, without limitation, reasonable
attorneys’ fees.


 


Section 7.10         Construction.  The
parties acknowledge that each party and its counsel have reviewed and revised
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments or exhibits hereto.


 


Section 7.11         Governing Law.  This
Agreement shall be construed and interpreted in accordance with and shall be
governed and enforced in all respects according to the laws of the State of
California.


 


Section 7.12         Damages. 
Buyer agrees that any liability of Seller under any claim brought prior
to the Closing Date pursuant to this Agreement or any document or instrument
delivered simultaneously or in connection with, or pursuant to this Agreement,
shall be limited solely to its interest in the Property, and no other assets of
Seller shall be subject to levy or execution. 
With respect to any such claim brought following the Closing Date, any
liability of Seller shall be limited to Seller’s assets and to the amount set
forth in clause (ii) of Section 4.4 above. 
In no event shall Buyer seek satisfaction for any such obligation from
any of Seller’s members or from any members, shareholders, officers, directors,
trustees, beneficiaries, employees, agents, legal representatives, successors
or assigns of such members, nor shall any such person or entity have any
personal liability for any such obligations of Seller.


 


Section 7.13         Confidentiality.  Each
Party hereby acknowledges and agrees that the existence of this Agreement, and
the terms and conditions set forth herein, are to be kept strictly
confidential.  Accordingly, except as may
be required by law or court order, each Party shall not, 


 


15





















 


without the prior written consent of the
other Party, release, publish or otherwise distribute (and shall not authorize
or permit any other person or entity to release, publish or otherwise distribute)
any information concerning this Agreement or the transaction contemplated
herein to any person or entity other than Buyer’s prospective lenders and each
Party’s respective legal and financial advisors, each of whom shall agree to
hold such information strictly confidential as if such persons were bound by
the provisions of this Section 7.13.  The
obligations of this Section 7.13 will not apply to information that the
receiving party can establish by written records (a) was known by it prior to
the receipt of the confidential information from the disclosing Party; (b) was
disclosed to the receiving Party by a third party having the right to do so;
(c) was, or subsequently became, in the public domain through no fault of the
receiving Party, its officers, directors, employees or agents; (d) was
disclosed on a confidential basis to such Party’s accountants, attorneys and
other professional advisors in connection with the transactions contemplated by
this Agreement; or (e) was disclosed by the receiving Party pursuant to any
judicial, governmental or stock exchange request, requirement or order, so long
as the receiving party provides the disclosing party with sufficient prior
notice in order to allow the disclosing party to contest such request,
requirement or order


 


Section 7.14         Counterparts.  This
Agreement may be executed in one or more counterparts.  All counterparts so executed shall constitute
one contract, binding on all parties, even though all parties are not signatory
to the same counterpart.


 


Section 7.15         Tax Deferred Exchange.  Upon the request of either party (the “Requesting Party”) to this
Agreement, the other party (the “Non-Requesting Party”) at no cost or expense
to the Non-Requesting Party agrees to reasonably cooperate with the Requesting
Party in consummating the sale of the Property as part of a simultaneous or
non-simultaneous tax-deferred exchange (the “Exchange”) pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended, provided that (i) the Non-Requesting
Party shall not be required to take title to any property other than the
Property, and (ii) the Closing Date shall not be delayed or extended
thereby.  The Requesting Party shall have
the right to assign its rights and obligations hereunder to an accommodation
entity (the “Intermediary”), who will cause the Closing to occur on the
Requesting Party’s behalf.  All of the
Requesting Party’s liabilities, representations and warranties under this
Agreement shall remain those of the Requesting Party and the Non-Requesting
Party shall not seek recourse against the Intermediary with respect to such
liabilities or for the breach of any such representations or warranties.  Performance by an Intermediary in
effectuating an exchange will be treated as if such performance were made by the
Requesting Party, and the Requesting Party shall remain the primary obligor for
the full and timely performance of all obligations of the Requesting Party
under this Agreement.  In the event of
any breach of such representations, warranties, covenants, or other
obligations, the Non-Requesting Party shall proceed directly against the
Requesting Party.  The Non-Requesting
Party shall not be required to assume any liabilities as a result of the
exchange transaction that are in addition to those which would exist if the
transaction were effectuated as a sale by the Requesting Party and not
effectuated as an exchange.  The
Requesting Party hereby agrees to indemnify, defend (with counsel reasonably
satisfactory to the Non-Requesting Party) and hold harmless the Non-Requesting
Party from and against any and all claims, loss, cost, damage, or expense
(including, without limitation, reasonable attorneys’ fees) incurred by the
Non-Requesting Party and arising out of or relating to the Non-Requesting
Party’s participation in the Exchange.


 


16





















 


[Remainder of Page Intentionally Left Blank]


 


17





















 


Section
7.16         Entire Agreement.  This
Agreement and the attached exhibits, which are by this reference incorporated
herein, and all documents in the nature of such exhibits, when executed,
contain the entire understanding of the parties and supersede any and all other
written or oral understanding.


 


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


 


	
  SELLER:

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  B. Lynne Parshall

  	
   

  
	
   

  	
   

  	
  B. Lynne Parshall

  
	
   

  	
   

  	
  Executive Vice President,
  CFO & Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BUYER:

  	
  ELECTRO
  SURFACE TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Hiroo Kirpalani

  	
   

  
	
   

  	
   

  	
  Name: Hiroo Kirpalani

  
	
   

  	
   

  	
  Title: President

  



 


1





















 


EXHIBIT A


 


DISCLOSURE STATEMENT


 


None


 





















 


EXHIBIT B


 


PROPERTY DESCRIPTION


 





















 


EXHIBIT D


 


LIST OF SERVICE AND EQUIPMENT CONTRACTS


 


[To
be provided by Isis prior to execution of Agreement]


 





















 


EXHIBIT E


 


DEED


 


Assessor’s Parcel No.


 


RECORDING REQUESTED BY


AND WHEN RECORDED RETURN TO:


 


 


MAIL TAX STATEMENTS TO:


 


 


The undersigned grantor
declares:


 


Documentary transfer tax is:


 


o            computed on full value of property conveyed,
or


o            computed on full value less value of liens
and encumbrances.


 


GRANT DEED


 


FOR VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby acknowledged, ISIS
PHARMACEUTICALS, INC., a Delaware Corporation, HEREBY GRANTS to Electro Surface
Technology, Inc., a California Corporation, all that real property in San Diego
County, California, described as follows:


 


SEE APPENIX “A” ATTACHED
HERETO AND BY THIS REFERENCE INCORPORATED HEREIN.


 


This conveyance is made
subject to all liens and encumbrances of record.


 


	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   B. Lynne Parshall

  
	
   

  	
   

  	
   Executive Vice
  President, CFO & Director

  



 


Date:  September     , 2005


 


MAIL
TAX STATEMENTS AS DIRECTED ABOVE


 





















 


	
  STATE OF CALIFORNIA

  	
  )

  	
   

  	
  CAPACITY CLAIMED BY SIGNER

  
	
   

  	
  ) ss.

  	
   

  	
  Though statute does not
  require the Notary 

  
	
  COUNTY OF                                     

  	
  )

  	
   

  	
  to fill in the data below,
  doing so may 

  
	
   

  	
   

  	
   

  	
  prove invaluable to
  persons relying on the 

  
	
   

  	
   

  	
   

  	
  document.

  
	
   

  	
   

  	
   

  	
   

  
	
  On                                     
  , before me,                               
  ,

  	
   

  	
  o

  	
  Individual

  
	
  Personally appeared                                 
  (name of witness),

  	
   

  	
  o

  	
  Corporate Officer(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  personally known to me

  	
   

  	
  o

  	
  Partner(s)

  	
  o

  	
  Limited

  
	
   

  	
  -or-

  	
   

  	
   

  	
   

  	
  o

  	
  General

  
	
  o

  	
  proved to me on the basis
  of satisfactory evidence 

  	
   

  	
  o

  	
  Attorney-in-Fact

  
	
   

  	
  to be the person whose
  name(s) is/are subscribed to the within instrument and acknowledged to me
  that he/she/they executed the same in his/her/their authorized capacity, and
  that by his/her/their signature(s) on the instrument the person(s) or the
  entity upon behalf of which the person(s) acted, executed the instrument.

  	
   

  	
  o

  	
  Trustee(s)

  
	
   

  	
  o

  	
  Guardian/Conservator

  
	
   

  	
  o

  	
  Other:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Witness my hand and
  official seal.

  	
   

  	
  SIGNER IS REPRESENTING:

  
	
   

  	
   

  	
   

  	
  Name of person(s) or
  entity(ies)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature of the Notary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  This certificate must be
  attached to the

  	
  Title or Type of Document:

  	
   

  	
   

  
	
  document described at
  right:

  	
  Number of Pages:

  	
   

  	
            Date
  of Document:

  	
   

  	
   

  
	
   

  	
  Signer other than named
  above:

  	
   

  	
   

  
															



 





















 


EXHIBIT F


 


BILL OF SALE


 


FOR
VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby expressly acknowledged, ISIS
PHARMACEUTICALS, INC., a Delaware corporation (“Seller”), hereby assigns,
transfers and conveys to Electro Surface Technology, Inc. (“Buyer”), WITHOUT WARRANTY, EXPRESS OR IMPLIED, all
of Seller’s right, title and interest in and to that certain personal property
described in the attached Schedule 1
(the “Personal Property”).  The foregoing
conveyance is made pursuant to, and is subject to the terms and conditions of,
that certain Agreement for Purchase and Sale of 2280 Faraday Avenue, San Diego,
CA dated as of June 28, 2005, by and between Seller and Buyer.


 


IN WITNESS
WHEREOF, Seller has
executed this Bill of Sale as of                               ,
20    .


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   B. Lynne Parshall

  
	
   

  	
   

  	
   Executive Vice
  President, CFO & Director

  



 





















 


SCHEDULE 1


 


(Attach
list of personal property)


 





















 


APPENDIX A


 


[Attach
legal description of real property]


 





















 


EXHIBIT G


 


ASSIGNMENT OF INTANGIBLE PROPERTY


 


FOR
VALUABLE CONSIDERATION,
the receipt and sufficiency of which are hereby expressly acknowledged, ISIS
PHARMACEUTICALS, INC., a Delaware corporation (“Assignor”), hereby
assigns, transfers and conveys to Electro Surface Technology, Inc., a
California corporation (“Assignee”), all of Assignor’s right, title and
interest in and to the Intangible Property, as those terms are defined in that
certain Agreement for Purchase and Sale of 2280 Faraday Avenue, Carlsbad, CA
dated June28, 2005 (the “Agreement”), entered into by and between Assignor, as
“Seller,” and Assignee, as “Buyer.”


 


In accordance with the
Agreement, Assignee hereby assumes all obligations of owner of the Intangible
Property arising on or after the date of this Assignment (collectively, the
“Assigned Obligations”).


 


IN WITNESS
WHEREOF, Assignor and
Assignee have executed this Assignment of Intangible Property as of September     ,
2005


 


	
  ASSIGNOR:

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   B.
  Lynne Parshall

  
	
   

  	
   

  	
   Executive Vice
  President, CFO & Director

  
	
   

  	
   

  
	
  ASSIGNEES:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Its:

  
					



 





















 


SCHEDULE 2.3(A)


 


ANALYTICAL METHODS FOR CORE TEST


 


EPA 8015M for
Non-Halogenated Organics


EPA 8260B for Volatile
Organic Compounds (VOC’s)


EPA 8270C for Semi-Volatile
Organic Compounds


 





















 


SCHEDULE 4.2(C)


 


PARKING SPACES SUBJECT TO EASEMENT