Note Purchase

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NOTE PURCHASE AGREEMENT

THIS NOTE PURCHASE AGREEMENT (the "Agreement") is made as of


the ___ day of ________, ________, by and between
_________________, a California corporation ("Lender"), and
_______________ ("Purchaser") with reference to the following:

A. Lender and ___________, a California Limited Partnership


("Borrower"), executed a Promissory Note Secured by Deed of Trust
in favor of Lender, dated as of __________, in the original
principal amount of __________ ($__________) (the "Note"), and,
in connection therewith, entered into a Security Agreement dated
as of __________, (the "Security Agreement"), a Business Loan
Agreement dated as of __________ ("Loan Agreement"), a Deed of
Trust on certain real property as described on Exhibit A,
attached hereto and incorporated herein by this reference (the
"Property"), dated as of __________, and recorded in the official
Records of Los Angeles, California on __________ as document
number __________ ("Deed of Trust");

B. Purchaser, among others, executed that certain Continuing


Guaranty and Agreement, dated as of __________, (the "Guaranty"),
pursuant to which Purchaser guaranteed the obligations of
Borrower to Lender under the Loan Agreement, Note and related
loan documents;

C. Borrower is currently in default under the Borrower Loan


Agreement and Borrower Note and the outstanding principal amount
due under the Note as of __________ is __________ ($__________)
with interest accruing on such amount after __________ at the
rate of __________ ($__________) per day.

D. Lender desires to sell, and Purchaser desires to purchase,


the Borrower Note and an assignment of the corresponding Deed of
Trust, Business Loan Agreement, Security Agreement and Guaranty
in exchange for payment from Purchaser in the amount of
__________ ($__________) which amount shall be increased by an
amount of __________ ($__________) for each day subsequent to
__________, on which a sale of the Borrower Note has not been
completed as contemplated herein ("Purchase Price");

E. The closing of this transaction is to be contingent upon the


finalization of related contemporaneous transactions, including
but not limited to the following: (i) the release into escrow by
Lender of the deposit made by __________ (collectively,
"Guarantors") as guarantors of the Borrower Note; and (ii) the
loan by Lender to ___________, a California corporation ("XYZ
Co."), of an amount equal to __________ ($__________) (the "XYZ
Co. Loan"), secured by a first Deed of Trust on the Property
(collectively, the "Related Transactions");

F. The parties wish to consummate both the transactions


contemplated by this Agreement and the Related Transactions
simultaneously and through one escrow (the "Escrow") using
Chicago Title Company as escrow agent ("Escrow Agent");

G. Guarantors and _____________ wish to provide Lender with a


guaranty of XYZ Co.'s obligations under the XYZ Co. Loan (the
"XYZ Co. Guaranty").

NOW, THEREFORE, in consideration of the mutual covenants and


agreements contained herein and for other good and valuable
consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

I.. Purchase and Sale.

1.1 Sale and Issuance of Note. Subject to the terms and


conditions of this Agreement, Purchaser agrees to purchase
at the Closing, and Lender agrees to sell to Purchaser at
the Closing, the Note along with an assignment of Lender's
rights under the Deed of Trust, Security Agreement, Business
Loan Agreement and Guaranty (collectively, together with the
Note, the "Borrower Loan Documents").

1.2 NO WARRANTIES. PURCHASER IS PURCHASING AND ACCEPTING


AN ASSIGNMENT OF THE BORROWER LOAN DOCUMENTS "AS IS" AND
WITHOUT RECOURSE OR ANY REPRESENTATIONS OR WARRANTIES OF ANY
KIND EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 3.3 HEREOF.

1.3 Purchase Price. As consideration for the sale of the


Borrower Loan Documents by Lender, Purchaser shall pay to
Lender through the Escrow the Purchase Price payable by
Purchaser by wire transfer, or if permitted by Lender, by
bank or cashier's check for immediately available funds.

2. Closing.

2.1 The Closing. The consummation of the transactions

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contemplated hereby (the "Closing") shall take place at the
Escrow Agent's offices no later than __________, at 10:00
a.m. Los Angeles time Pacific, unless Lender, Guarantors,
Purchaser and XYZ Co. agree in writing to an extension of
such date.

2.2 Deliveries by Purchaser. On or before the Closing,


Purchaser shall deliver to the Escrow Agent: (i) the
Purchase Price by wire transfer, or if permitted by Lender,
by bank or cashier's check for immediately available funds;
and (ii) an additional amount of cash, if necessary, to
satisfy Purchaser's share of closing costs and prorations;
and (vi) any additional documents required by Lender in
connection with the transactions contemplated hereby.

2.3 Deliveries by Lender. On or before the Closing, Lender


shall deliver to the Escrow Agent: (i) the original Note,
duly endorsed by allonge endorsement in the form attached
hereto as Exhibit B; (ii) the original Deed of Trust,
Security Agreement, Business Loan Agreement and Guaranty;
(iii) executed assignment(s) of the Deed of Trust, Security
Agreement and Business Loan Agreement and Guaranty; and
(iv) assignment of UCC-1 Financing Statement(s) filed in
connection with the Borrower Loan Documents, if any.
Notwithstanding the above, the parties acknowledge and agree
that Lender shall not be obligated to make any deposit
hereunder unless and until all of Purchaser, Guarantors and
XYZ Co. have made all deposits required of them under the
Escrow Instructions, attached hereto as Exhibit C and
incorporated herein by this reference, to the satisfaction
of Lender in its sole discretion.

3. Representations and Warranties of Lender. Lender


hereby represents and warrants to Purchaser that:

3.1 Incorporation. Lender is a corporation validly


existing and in good standing under the laws of the State of
California.

3.2 Authorization. All corporate action on the part of


Lender necessary for the authorization, issuance and
delivery by Lender of the Borrower Loan Documents being sold
hereunder has been taken or will be taken prior to the
Closing. This Agreement, when executed and delivered, will
constitute a duly authorized, valid and legally binding

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obligation of Lender.

3.3 Title and Third Party Claims. Lender represents and


warrants that: (i) it has title in and to the Borrower Loan
Documents; (ii) as of the date hereof there are no third
party claims against the Note; and (iii) the Deed of Trust
and Assignment of Rents With Request for Notice, dated as of
May 3, 1990, by and between Guarantors, _________,
__________ and __________ and Borrower, as Trustor, Chicago
Title Insurance Company as Trustee and Assignor as
Beneficiary, was recorded in the official records of Los
Angeles County, California __________ as document number
__________ ("Borrower Deed of Trust") and Lender has
recorded no releases or reconveyances of the Borrower Deed
of Trust.

4. Representations and Warranties of Purchaser. Purchaser


hereby represents and warrants to Lender that:

4.1 Valid and Binding Agreement. This Agreement has been


duly and validly executed and delivered by Purchaser and is
binding on Purchaser in accordance with its terms.

4.2 No Violation of Law or Agreements With Third Parties.


The execution, delivery and performance of this Agreement
and any related agreements and the transactions contemplated
herein will not: (i) breach or constitute grounds for the
occurrence or declaration of a default under or allow
another party a right to terminate any material agreement,
undertaking or other instrument to which Purchaser is a
party or by which it may be bound or affected; or (ii)
violate any provision of law or any regulation or any order,
judgment or decree of any court or any agency of government,
the violation of which could reasonably be expected to have
a material adverse effect on the transactions contemplated
herein and in any related documents.

5. Conditions to Lender's Obligations at the Closing. The


obligations of Lender hereunder are subject to the fulfillment at
or prior to the Closing of each of the following conditions (or
the written waiver thereof by Lender):

5.1 Representations and Warranties. The representations


and warranties of Purchaser contained in Section 4 hereof
will be true on and as of the Closing.

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5.2 Performance. Purchaser will have performed and
complied with all agreements and conditions contained herein
required to be performed or complied with on or before the
Closing.

5.3 Proceedings and Documents. All documents and


instruments incident to the transactions hereunder will be
reasonably satisfactory in form and substance to Lender and
its counsel.

6. Conditions to Purchaser's Obligations at the Closing.


The obligations of Purchaser hereunder are subject to the
fulfillment at or prior to the Closing of each of the following
conditions (or the written waiver thereof by Purchaser):

6.1 Representations and Warranties. The representations


and warranties of Lender contained in Section 3 hereof will
be true on and as of the Closing.

6.2 Proceedings and Documents. All documents and


instruments incident to such transactions, will be
reasonably satisfactory in form and substance to Purchaser
and their counsel.

7. Covenants of Purchaser.

7.1 XYZ Co. Guaranty. Purchaser agrees to execute and


deliver into Escrow the XYZ Co. Guaranty.

7.2 Efforts. Purchaser agrees to use its best efforts to


take all actions and do all things necessary or advisable to
consummate the transactions contemplated hereby.

8. Termination. This Agreement may be terminated by


either party hereto if the conditions to such party's obligations
to close the transaction have not been satisfied as required
hereunder. Lender shall have the right, exercisable in its sole
discretion, to terminate this Agreement in the event that any of
the conditions to closing found in the attached Escrow
Instructions are not fulfilled to the satisfaction of Lender or
its counsel. Any such termination shall have no effect on any
claim available to any party for failure to perform hereunder.

9. Indemnification: Purchaser. Purchaser shall indemnify,

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defend and hold Lender, its officers, directors, shareholders,
employees and affiliated entities harmless from and against any
and all claims, losses, damages, liabilities, expenses and costs,
including, without limitation, attorneys' fees and costs,
incurred or suffered by such person or entity in connection with
or as a result of: (i) Purchaser's misrepresentation, breach of
warranty or breach of covenant, agreement or obligation contained
herein or in any other agreement or document contemplated hereby;
and/or (ii) any and all claims made by any third parties with
respect to or in connection with the Borrower Loan Documents or
the Property after the date hereof. The provisions of this
Section shall survive the Closing.

10. Indemnification: Lender. Lender shall indemnify,


defend and hold Purchaser harmless from and against any and all
claims, losses, damages, liabilities, expenses and costs,
including, without limitation, reasonable attorneys' fees and
costs, incurred or suffered by Purchaser in connection with or as
a result of claims arising before the date hereof from Lender's
right, title and interest in and to the Borrower Loan Documents.

11. Claims. Whenever any claim shall arise for


indemnification hereunder, the indemnified party or parties shall
promptly notify the party or parties from whom indemnification is
being sought (the "Indemnifying Party") of the claim and, when
known, the facts constituting the basis for such claim. Such
notice shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. Failure to provide
such notice shall not relieve the Indemnifying Party of its
obligations hereunder; provided, however that the rights of the
Indemnifying Party are not materially prejudiced by such failure.

12. Additional Relief. An indemnified party's right to


indemnification hereunder shall not preclude such party from
seeking any other legal or equitable relief available under
applicable law or otherwise available hereunder. Such rights and
remedies shall be cumulative and no waiver of any right to
indemnification hereunder shall be considered a waiver of any
future right to indemnification.

13. Miscellaneous.

13.1 Titles and Subtitles. The titles of the paragraphs


and subparagraphs of this Agreement are for convenience of
reference only and are not to be considered in construing

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this Agreement.

13.2 Entire Agreement. This Agreement constitutes the


entire understanding among the parties with regard to the
subject hereof and supersedes any and all written agreements
and understandings among them, and may be amended only in
writing signed by the parties to this Agreement.

13.3 Successors and Assigns. This Agreement shall inure to


the benefit of, and be binding upon, the successors, heirs,
executors, administrators, and permitted assigns of the
parties to this Agreement. Neither party may assign its
rights and obligations under this Agreement without the
prior written consent of the other party.

13.4 Counterparts. This Agreement may be executed in any


number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.

13.5 Further Instruments. From time to time, each party


hereto shall execute and deliver such instruments as may be
reasonably necessary to carry out the purposes and intent of
this Agreement.

13.6 Governing Law. This Agreement shall be governed by,


and construed in accordance with, the laws of the State of
California.

13.7 Notice. Whenever notice is to be served hereunder,


service shall be made personally, by facsimile transmission,
by overnight carrier or by registered or certified mail,
return receipt requested. All postage and other delivery
charges shall be prepaid by the party sending the notice.
Notice shall be effective only upon receipt by the party
being served, except notice shall be deemed received three
(3) days after posting by the United States Post Office, by
method described above. Confirmation of receipt of any
facsimile sent must be received in order to presume that the
transmission was received. All notices shall be sent to the
addresses described below unless changed by written notice
pursuant to the terms of this Section:

To Lender:

To Purchaser:

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13.8 Severability. If any provision hereof is deemed
illegal or unenforceable, that provision shall be severed
from this Agreement and the remainder shall be enforced in
accordance with the intentions of the parties as expressed
in this Agreement.

13.9 Attorneys' Fees. In the event of any action at law,


suit in equity, or arbitration proceeding in relation to
this Agreement, the prevailing party or parties shall be
entitled to recover from the other party or parties its
reasonable attorneys' fees and expenses.

13.10 Arbitration. Any controversy or claim arising out of


or relating to this Agreement, or the breach thereof, shall
be settled by binding arbitration, with venue in the County
of Los Angeles, California, in accordance with the rules of
the American Arbitration Association, and judgment upon the
award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Within ten (10) days
after the initiation of arbitration, the parties shall
select a single neutral arbitrator to preside over the
arbitration proceeding. If the parties fail to select an
arbitrator within such ten (10) day period, such arbitrator
shall be chosen by a district court of competent
jurisdiction. In addition to the powers conferred by the
American Arbitration Association rules, the arbitrator shall
have authority to order such other discovery as he or she
deems appropriate for a full and fair hearing of the case.
A determination on the merits shall be rendered in
accordance with the law of the State of California to the
same extent as if the dispute were pending before a superior
court of that State.

IN WITNESS WHEREOF, the undersigned have executed this


Agreement as of the date first above written.

"LENDER" [Name]

By:

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Its:

"PURCHASER" ________________________________________

GUARANTORS ________________________________________

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