HomeMy WebLinkAboutDYER 18 LLC (3)INSURANCE NOT REQUIRED
WORK MAY PROCEED
CITY CLERK
A-2023-119
D'Mo JUL 13 2023
): CA�:.)(3I-N) -e�-
PURCHASE AND SALE AGREEMENT
between
DYER 18 LLC
Seller
and
THE CITY OF SANTA ANA
Purchaser
5489135.2
THIS PURCHASE AND SALE AGREEMENT (this "Contract"), dated as of June 27, 2023
(the "Effective Date"), is made by and between DYER 18 LLC, a Delaware limited liability company,
having an address at 240 Newport Center Drive, Suite 200, Newport Beach, CA 92660 ("Seller") and
THE CITY OF SANTA ANA, a California municipal corporation, having an address at 20 Civic
Center Plaza, Santa Ana, California 92701 ("Purchaser").
WITNESSETH:
WHEREAS, concurrently herewith, Seller and Purchaser have entered into that certain
Settlement Agreement with Mutual Releases (the "Settlement Agreement");
WHEREAS, capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Settlement Agreement;
WHEREAS, pursuant to the Settlement Agreement, Seller has agreed to sell and Purchaser
has agreed to purchase the "Property" (as hereinafter defined) upon the terms and conditions set forth
herein;
NOW, THEREFORE, intending to be legally bound hereby, the parties agree as follows:
1. Intentionally Omitted.
2. Subject of Sale.
2.1. Seller agrees to sell and convey to Purchaser the Property and Purchaser agrees to purchase
from Seller the Property subject to the terms and conditions contained in this Contract.
2.2. This sale includes all right, title and interest of Seller, in and to the following (collectively,
the "Property"):
a) The "Real Property" collectively consisting of the following:
i) that certain parcel of land, as the same is more particularly described on
Exhibit A attached hereto (the "Land");
ii) the buildings and other improvements (together with all fixtures) erected on
the Land (collectively, the "Improvements", and together with the Land, the
"Premises");
iii) any land lying in the bed of any street, road or avenue opened or proposed,
adjacent to the Land, to the center line thereof, and all right, title and interest
of Seller in and to any award made or to be made in lieu thereof and in and to
any unpaid award for damage to the Property by reason of change of grade of
any street;
iv) rights of way, appurtenances, easements, sidewalks, alleys, gores, or strips of
land adjoining or appurtenant to the Land and used in connection therewith;
5489135.2 2
v) all minerals, oil, gas and other hydrocarbon substances on and under the real
property and all rights related thereto; and
vi) all development rights, air rights, water, water rights, riparian rights and water
stock relating to the real property.
b) (i) that certain personal property located on and used in connection with the Real
Property, if any, consisting of (a) all keys and combinations to all doors, cabinets,
safes, enclosures and other locking items or areas on or about the Real Property in
Seller's possession; and (b) all tangible personal property, including, without
limitation, all tools, supplies, electric switch gear, telephone systems, office
equipment, safety gear and fire safety equipment fixtures, in each case to the extent
owned by Seller, located on the Real Property and used exclusively in connection
with the occupation or operation of the Real Property and (ii) all construction
contracts, design contracts, labor contracts, proposals, as -built plans and
specifications (the "Construction Documents"), and indemnities and warranties
related to the Work as defined in the Lease Agreement (collectively, the "Personal
Property").
2.3. At Closing, Purchaser shall succeed to Seller's interest in, and shall otherwise assume and
take title to the Property.
3. Purchase Price.
3.1. The purchase price (the "Purchase Price") for the Property is the sum of Twelve Million
Seven Hundred Fifty Thousand and 00/100 Dollars ($12,750,000.00), payable by Purchaser
to Seller as follows:
3.2. Within no later than one (1) Business Day (as hereinafter defined) following the Open Date
, TIME BEING OF THE ESSENCE, the sum of Six Hundred Thousand and 00/100 Dollars
($600,000.00) (the "Deposit") to be paid by electronic wire transfer of immediately
available funds to an account designated by the Title Company (as hereinafter defined) (in
such capacity, "Escrowee"); and
3.3. The balance of the Purchase Price, subject to adjustment and proration as provided in this
Contract, at Closing by wire transfer of immediately available funds to Escrowee for
payment to Seller upon Closing.
3.4. Upon the payment of the Deposit by Purchaser, such amount shall be non-refundable under
any circumstances except in the case that both (A) Seller is in default of its obligation to
close the purchase and sale of the Property in accordance with this Contract, and (B)
Purchaser is not in default under the Settlement Agreement or this Contract.
4. Deposit Provisions.
4.1. Upon delivery of the Deposit to Escrowee in accordance with Section 3.2, Escrowee shall
disburse (and in all events within five (5) Business Days) the entire Deposit to Seller in
accordance with wiring instructions provided by Seller without any further action by, or
approval of, Purchaser. The Deposit shall be retained by Seller in all circumstances except
as provided in Section 3.4, but the Deposit shall be applied to the Purchase Price at Closing.
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4.2. In the event Seller shall be entitled to the Deposit pursuant to Section 10.1, Escrowee shall
pay the Deposit to Seller, and Seller shall retain the Deposit in accordance with Section 10.1
below.
4.3. In the event this Contract is terminated by Purchaser as a result of a default by Seller
pursuant to Section 10.2, then, and only then, shall Escrowee (if it is holding the Deposit)
pay the Deposit to Purchaser within three (3) Business Days. If Escrowee has delivered the
Deposit to Seller in accordance with Section 4.1, in the event of such termination Seller shall.
pay the Deposit to Purchaser within three (3) Business Days.
4.4. Purchaser may instruct the Escrowee to invest the Deposit in such short term, high grade
securities, interest bearing bank accounts, bank certificates of deposit or bank repurchase
agreements as mutually agreed by Escrowee, Seller and Purchaser, and all interest and
income thereon shall belong to Purchaser and shall be remitted to Purchaser as and when
received, irrespective of the disposition of the Deposit itself.
4.5. Escrowee, by signing this Contract where indicated, signifies its agreement to hold and
disburse the Deposit for the purposes as provided in this Contract. Except for liability
resulting from the negligence or willful misconduct of Escrowee, Escrowee shall not incur
any liability by reason of any action or non -action taken by it in good faith or pursuant to
the judgment or order of a court of competent jurisdiction. Escrowee shall have the right to
reasonably rely upon the genuineness of all certificates, notices and instruments delivered
to it pursuant hereto, and all the signatures thereto or to any other writing received by
Escrowee purporting to be signed by any party hereto, and upon the truth of the contents
thereof.
4.6. Except as otherwise provided for in Section 4.1, Escrowee shall not pay or deliver the
Deposit to any party.
4.7. Escrowee shall be entitled to consult with counsel in connection with its duties hereunder.
Seller and Purchaser, jointly and severally, agree to reimburse Escrowee, upon demand, for
the reasonable out of pocket costs and expenses including attorneys' fees incurred by
Escrowee in connection with its acting in its capacity as Escrowee. In the event of litigation
relating to the subject matter of the escrow, whichever of Seller or Purchaser is not the
prevailing party shall reimburse the prevailing party for any costs and fees paid by the
prevailing party or paid from the escrowed funds to Escrowee.
4.8. To the extent required to consummate the transactions contemplated hereby, each party
agrees to execute and deliver to Escrowee closing escrow instructions to implement and
coordinate the Closing in accordance with the terms of this Contract.
5. "As -Is". "Where -Is".
5.1. Disclaimer. Purchaser acknowledges and agrees that it has been provided the opportunity
to thoroughly inspect, investigate and exercise due diligence, and the opportunity to fully
and independently become familiar with, and fully satisfy itself regarding, any and all
matters relating to the Property. Without limiting the foregoing, pursuant to that certain
Standard Industrial/Commercial Single -Tenant Lease - Net dated as of July 13, 2020, by
and between Seller, as lessor, and The Illumination Foundation, a California nonprofit
public benefit corporation ("Previous Lessee"), as lessee (the "Previous Lease"), that
5489135.2
certain Guaranty of Lease, dated as of July 13, 2020, made by Purchaser for the benefit of
Seller (the "Lease Guaranty") with respect to Previous Lessee's obligations under the
Previous Lease, and that certain Standard Industrial/Commercial Single -Tenant Lease - Net
dated as of March 1, 2021, by and between Seller, as lessor, and Purchaser, as lessee (the
"Existing Lease"), Purchaser has been in possession or control of the entire Property since
the date of the Previous Lease and comprehensive improvements in connection with its
occupancy and use of the Property have been completed in accordance with the terms and
conditions of the Existing Lease and have been approved by Purchaser. As such, Purchaser's
knowledge of the current condition of the Property exceeds that of Seller. PURCHASER
ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY AND ALL
REPRESENTATIONS, WARRANTIES, PROMISES,. COVENANTS, AGREEMENTS
OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS
TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR ITS CONDITION,
INCLUDING, WITHOUT LIMITATION, (I) THE VALUE OF THE PROPERTY;
(II) THE INCOME BEING, OR THAT MAY BE DERIVED FROM THE PROPERTY;
(III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES WHICH PURCHASER MAY CONDUCT THEREON, INCLUDING, WITHOUT
LIMITATION, THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE
PROPERTY; (IV) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY
(PURCHASER AFFIRMING THAT PURCHASER HAS NOT RELIED ON SELLER'S
SKILL OR JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY
PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE
PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE); (V) THE MANNER,
QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY
INCLUDING, WITHOUT LIMITATION, ANY PATENT OR LATENT DEFECTS OR
DEFICIENCIES WITH RESPECT TO THE PROPERTY; (VI) THE NATURE, QUALITY
OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
WATER, SOIL AND GEOLOGY OF OR BELOW THE SURFACE OF THE PROPERTY;
(VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH
ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE
GOVERNMENTAL AUTHORITY OR BODY INCLUDING, WITHOUT LIMITATION,
THE AMERICANS WITH DISABILITIES ACT OR ANY SIMILAR STATE LAWS;
(VIII) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS
INCORPORATED INTO THE PROPERTY, INCLUDING ANY IMPROVEMENTS
THERETO AND THE WORK (AS DEFINED IN THE SETTLEMENT AGREEMENT)
PERFORMED THEREON AND/OR THERETO; (IX) COMPLIANCE WITH ANY
ENVIRONMENTAL REQUIREMENTS (DEFINED BELOW), ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS,
ORDERS OR OTHER REQUIREMENTS; (X) THE PRESENCE OR ABSENCE OF
HAZARDOUS MATERIALS (AS DEFINED BELOW) AT, ON, UNDER, OR
ADJACENT TO THE PROPERTY; (XI) THE CONTENT, COMPLETENESS OR
ACCURACY OF ANY OF THE DUE DILIGENCE DELIVERIES; (XII) THE
CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS
FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT
MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER; (XIII) THE
CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE
5489135.2 5
APPLICABLE. ZONING OR BUILDING REQUIREMENTS; ,(XIV) DEFICIENCY OF
ANY UNDERSHORING; (XV) DEFICIENCY OF ANY DRAINAGE; (XVI) THE FACT'
THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR
AN EARTHQUAKE FAULT LINE; (XVII) THE EXISTENCE OF VESTED LAND USE,
ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; (XVIII)
THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION
THEREOF, INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS, AND
ELECTRICITY; (XIX) USAGES OF ANY ADJOINING PROPERTY; (XX) ACCESS TO,
AND EASEMENTS AND RIGHTS OF WAY WHICH ARE A BURDEN UPON OR
WHICH BENEFIT, THE PROPERTY OR ANY PORTION THEREOF; (XXI) ANY
EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS, OR CLAIMS ON OR
AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF;
(XXII) THE EXISTENCE OR NON EXISTENCE OF UNDERGROUND STORAGE
TANKS UPON OR BENEATH THE SURFACE OF THE PROPERTY; (XXIII) ANY
MATTERS ARISING FROM OR RELATING TO SELLER'S ALLEGED SUPERIOR
KNOWLEDGE OR BREACH OF ANY DUTY TO DISCLOSE; AND (XXM ANY
OTHER MATTER WITH RESPECT TO THE PROPERTY.
5.1.1. Certain Definitions.
a) For purposes of this Contract, "Hazardous Materials" shall meanany hazardous or
toxic materials, substances, or wastes, including, without limitation, (A) substances
defined as "hazardous substances," "hazardous materials,", "hazardous waste,"
"pollutant," "infectious waste," or "toxic substances," or words of similar meaning
or regulatory effect under the Comprehensive: Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) ("CERCLA"),
the Resource Conservation and Recovery Act of 1976: (42 U.S.C. § 6901 et seq.)
c
("RCRA"), the Hazardous Materials Transportation Act (49. U.S.C. § 1801, et seq),
the Federal Water Pollution Control Act (33 U.S.C. § 1.251, et seq.), the Clean Air
Act (42 U. S. C. § 740 1, et seq.), the Toxic Substances Control Act (15 U.S.C. §
2601, et seq.), the Refuse Act (33 U.S.C. § 407), , Carpenter -Presley -Tanner
Hazardous Substance Account Act, California Health and Safety Code §§ 25300, et
seq., Hazardous Substance Cleanup Bond Act of 1984, California Health and Safety
Code §§ 25385, et seq., and related statutes including sections 25356.1-25356.4 of
the California Health and Safety Code, Porter -Cologne Water Quality Control Act,
California Water Code §§ 13000 et seq., as any or all of such acts are amended from
time to time; (B) those materials identified in §§ 66680 through 66685 and §§ 66693
through 66740 of Title 22 of the California Administrative Code, Division 4, Chapter
_.
30, as amended from time to time; (C) any substance- defined as a "hazardous
substance", ."hazardous waste", "extremely hazardous.;waste", "RCRA hazardous
_
waste", "waste" -or "hazardous material" in §§i 25115; 25117, 25122.7, 25120.2,
_ .:.
25124, 25281, 25316 or 25501 of the California Health arid Safety Code, as amended,
or listed pursuant to § 25140 of the California Health and Safety Code, as amended;
(D) any chemical or other substance regulated by the California Safe Drinking Water
and Toxic Enforcement Act of 1986, California Health and Safety Code § 25249.5,
et seq., as amended; (E) any substance defined as a "waste" or "hazardous substance"
in § 13050 of the California Water Code, as amended; (F) any substance listed in
California Labor Code §§ 6501.7 or 9004, as amended; (Cr) any;materials, substances,
;.•e i
or wastes which are toxic, ignitable, corrosive, or reactiue;;and which are. regulated
5489135.2
6 "•d 1.
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by any local governmental authority, any agency of the State of California, or any
agency of the United States of America; (H) any substance the presence of which at
the Property causes, or threatens to cause, a nuisance' and/or a trespass upon the
Property, or to adjacent properties, or poses, or threatens to pose, a hazard to the
health or safety of human beings; (I) asbestos (including, without limitation, asbestos
containing materials), petroleum and petroleum based products, urea formaldehyde
foam insulation, polychlorinated biphenyls (PCBs), Freon and other
chlorofluorocarbons, flammable, explosive, infectious,.carcinogenic, mutagenic, or
radioactive materials, petroleum or any substance containing or consisting ` of
petroleum hydrocarbons (including, without limitation; gasoline,. diesel fuel, motor
oil',waste oil, grease or any other fraction of crude oil),' -paints and solvents,•lead;
cyanide,' DDT, printing inks, acids, pesticides, i : ammonium .'•compounds,' k
polychlorinated biphenyls, radon and radon gas, and;eledtromagnetic or magnetic':
materials, substances, or emissions; and (.I) those substances" defined as any�of the
`
foregoing in the regulations adopted and publications ptomul'gated pursuant to each-
of the aforesaid laws.
to
b) For purposes of this Contract, the term "Environmental Requirements" shall mean
all laws, ordinances, statutes, codes, rules, regulations, agreements;_ jddgnrents,:. .
orders, and decrees, now or hereafter enacted, promulgated, or amended, of the
United States; the -states; the counties, the cities, or any other politieal.subdivisions in
whitIrAe>'Property is located, and any other political subdivision; agency -or,'
+'
instidffidntality'exereising jurisdiction over the owner of the Property; the'Property;•
=
or the'uSe of the Property, relating to pollution, the protection or regulation' of human
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heaalt1f, natural resources, or the environment, or the emission;'discharge; release'or
s"r
threateried release of pollutants, contaminants, chemicals, 6r'industrialq�toxic; or
Act o;
hazardous substances or waste or Hazardous Materials ihitd'the!!,environment;'
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(including; Without limitation, ambient air, surface water, groundwater=br land'or`
soil).(.
5.2. "As-Is".•Seller:is notifiable-or.bound in any manner by any oral' lot.., written:.statements;.:`
representations:ocinformatiou pertaining to the Property, or the operation thereof; furnished,.,
by any real estate broker;;agent employee, servant or other person.. Purchaser. further•
1 _a I U;N
acknowledges and agrees that. -Purchaser will purchase and accept the;-Property.in its
condition as -of Closing ,:and the Property is and shall be transferred:by Sellecto Purchaser„
in an "AS IS, WHERE. IS, WITH ALL FAULTS. LLABILITIES: 'DEFICH:NCIES, • °
: -+; .
AND DEFECTS; PATENT, LATENT OR OTHERWISE, KNOWN OR UNKNOWN"
condition,-whatever•that•cortdition may be, and that Seller has no:obligations;to_make.-
• ..E-.: ; iii
repairs, replacements or improvements, whether before or after the, Closing. Purchaser,
>. to '.isn:
represents; warrants and covenants to Seller that, Purchaser will solelyrelyupon Purchaser's.:
own investigation and' knowledge of the Property and all other matters relating to the.:'
_:•,ra: ,n,
Property; .and.not on -any information provided or to be provided by Seller,oh'ahyoneacting .:
n - .' Llk�
on Seller's behalf. -Except as otherwise provided in this Contract, Purchaser further assurnes '
• ., ,,; ri:r
all risk of loss, damage, expense, and liability whatsoever in connection twith,theProperty
(or any portion thereof) from and after the Closing, and Seller shall not be` liable for•any lack
of repair, maintenance, or improvements to the Property.
5.3. Purchaser Indemnity. EXCEPT AS OTHERWISE PROVIDED HEREIN,PURCHASER
HEREBY: AGREES TO INDEMNIFY, PROTECT, DEFEND, ,SAVE, ,.AND HOLD„
5489135.2
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9
HARMLESS SELLER, AND, ITS PAST, PRESENT, AND FUTURE DIRECT AND
INDIRECT PARENTS, SUBSIDIARIES, AND AFFILIATES AND EACH OF THEIR
RESPECTIVE DIRECT AND INDIRECT SHAREHOLDERS, PARTNERS, MEMBERS,
AND LEGAL AND. BENEFICIAL OWNERS, AND EACH OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, PRINCIPALS, MANAGERS, MEMBERS, CONTRACTORS,
EMPLOYEES (INCLUDING, WITHOUT LIMITATION, INDIVIDUALLY, RYAN
OGULNICK, JEREMEY OGULNICK, RACHEL OGULNICK, CHRIS LEE, RAY
WIRTA, AND DUROSS O'BRIAN), TRUSTS, TRUSTEES, AGENTS,
REPRESENTATIVES, HEIRS, BENEFICIARIES, ALTER EGOS, ATTORNEYS,
INSURERS, AND UNDERWRITERS AND THE PREDECESSORS, SUCCESSORS
AND ASSIGNS OF THE FOREGOING AND EACH OF THEM, AND ALL PERSONS
ACTING BY, THROUGH, UNDER OR IN CONCERT WITH SUCH PERSONS
(COLLECTIVELY, THE "'SELLER PARTIES"), FROM AND AGAINST ANY AND
ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS,
CAUSES OF ACTION, DAMAGES, LOSSES, FEES AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS' FEES AND EXPENSES AND COURT
COSTS) IN ANY WAY ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH, PURCHASER'S INSPECTION, ACQUISITION, OWNERSHIP, LEASING, USE,
OPERATION; MANAGEMENT, AND/OR MAINTENANCE OF THE PROPERTY AT
ANY TIME, °AND ANY OTHER MATTERS WITH RESPECT TO THE PROPERTY;
INCLUDING, WITHOUT LIMITATION, THOSE ARISING OUT OF ANY SELLER
PARTY'S OWN ACTS OR'OMISSIONS, WHETHER NEGLIGENT OR INTENTIONAL
("LIABILITIES").
5.4. Waiver and Release.
5.4.1. • AS .PART- OF , PURCHASER'S AGREEMENT TO PURCHASE AND
ACCEPT THE PROPERTY: ON AN "AS IS, WHERE IS, WITH ALL FAULTS,
LIABILITIES, DEFICIENCIES, AND DEFECTS, PATENT, LATENT OR
OTHERWISE, KNOWN OR UNKNOWN" BASIS, AND NOT AS A
LIMITATION ON.+.: SUCH AGREEMENT, PURCHASER HEREBY
UNCONDITIONALLY, AND IRREVOCABLY WAIVES ANY AND ALL ACTUAL
OR POTENTIAL -RIGHTS PURCHASER MIGHT HAVE REGARDING ANY
FORM OF WARRANTY,. EXPRESS OR IMPLIED, OF ANY KIND OR TYPE,
RELATING TO THE PROPERTY. SUCH WAIVER IS ABSOLUTE, COMPLETE,
TOTAL, AND UNLIMITED IN EVERY WAY. SUCH WAIVER INCLUDES, BUT
IS NOT LIMITED TO; A ° WAIVER OF EXPRESS WARRANTIES, IMPLIED
WARRANTIES,.WARRANTIES OF FITNESS FOR A PARTICULAR USE OR.
PURPOSE, WARRANTIES OF MERCHANTABILITY,. WARRANTIES OF
HABITABILITY, STRICT -LIABILITY RIGHTS, AND CLAIMS, LIABILITIES,
DEMANDS, OR CAUSES OF ACTION OF EVERY KIND AND TYPE; WHETHER
STATUTORY, ; CONTRACTUAL, ADMINISTRATIVE,. OR UNDER TORT
PRINCIPLES, AT LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO,
CLAIMS REGARDING', DEFECTS WHICH MIGHT HAVE BEEN
DISCOVERABLE, CLAIMS REGARDING DEFECTS WHICH WERE NOT OR
ARE NOT DISCOVERABLE, PRODUCT LIABILITY CLAIMS, PRODUCT
LIABILITY TYPE CLAIMS, ALL OTHER EXTANT OR LATER CREATED OR
CONCEIVED OF STRICT. LIABILITY OR STRICT LIABILITY TYPE CLAIMS
FZ1-11109 i
AND RIGHTS, AND ANY AND ALL CLAIMS UNDER CERCLA AND RCRA OR
ANY OTHER ENVIRONMENTAL REQUIREMENT.
5.4.2. PURCHASER HEREBY FULLY AND FOREVER RELEASES, ACQUITS
AND DISCHARGES SELLER AND EACH OF THE SELLER PARTIES, OF AND
FROM, AND HEREBY FULLY AND FOREVER WAIVES ANY AND ALL
CLAIMS, ADMINISTRATIVE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DISPUTES, OBLIGATIONS, JUDGMENTS, VERDICTS, DAMAGES,
LIABILITIES, FEES (INCLUDING ATTORNEYS' FEES), COSTS, EXPENSES,
COMPENSATION, DUES, AND DEBTS, IN EACH CASE, WHETHER ACTUAL
OR POTENTIAL, WHETHER KNOWN OR UNKNOWN, DIRECT OR INDIRECT,
FORESEEABLE OR UNFORESEEABLE, ABSOLUTE OR CONTINGENT, THAT
PURCHASER NOW HAS OR MAY HAVE OR WHICH MAY ARISE IN THE
FUTURE ARISING OUT OF, DIRECTLY OR INDIRECTLY, OR IN ANY WAY
CONNECTED WITH THE PROPERTY OR ANY OTHER MATTERS RELATING
TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION: (A) ANY
CONDITION OF ENVIRONMENTAL CONTAMINATION OR POLLUTION AT
THE PROPERTY, HOWEVER AND WHENEVER OCCURRING (INCLUDING,
WITHOUT LIMITATION, THE CONTAMINATION OR POLLUTION OF ANY
SOILS, SUBSOIL MEDIA, SURFACE WATERS OR GROUNDWATERS AT THE
PROPERTY) INCLUDING, BUT NOT LIMITED TO, HAZARDOUS MATERIALS;
(B) TO THE EXTENT NOT ALREADY INCLUDED IN (A) ABOVE, THE PRIOR,
PRESENT OR FUTURE EXISTENCE, RELEASE OR DISCHARGE, OR
THREATENED RELEASE, OF ANY HAZARDOUS MATERIALS AT THE
PROPERTY, HOWEVER AND WHENEVER OCCURRING; (C) THE VIOLATION
OF, OR NON—COMPLIANCE WITH, ANY APPLICABLE LAW NOW OR
HEREAFTER IN EFFECT, HOWEVER OR WHENEVER OCCURRING; (D) THE
CONDITION OF THE SOIL AT THE PROPERTY; (E) THE CONDITION OF
HAPROVEMENTS INCLUDING, WITHOUT LIMITATION, THE STRUCTURAL
INTEGRITY AND SEISMIC COMPLIANCE OF SUCH IMPROVEMENTS AND
ALL "WORK" PERFORMED TO THE PROPERTY' (AS DEFINED IN THE
EXISTING LEASE); (F) THE INACCURACY, UNRELIABILITY, OR
INCOMPLETENESS OF, OR ANY DEFECT OR MISTAKE IN, ANY DELIVERIES
MADE BY SELLER IN cCONNECTION WITH THIS CONTRACT OR THE
SETTLEMENT AGREEMENT; (G) TO THE EXTENT NOT ALREADY COVERED
BY ANY OF THE FOREGOING CLAUSES (A) THROUGH (F), ABOVE, THE USE,
MAINTENANCE, DEVELOPMENT, CONSTRUCTION (INCLUDING WITHOUT
LIMITATION ANY AND ALL DEFECTS, PATENT, LATENT OR OTHERWISE,
KNOWN OR UNKNOWN), CONVERSION OF USE, OWNERSHIP OR
OPERATION OF THE PROPERTY BY SELLER OR ANY OF SELLER'S
PREDECESSOR(S)—IN—INTEREST IN THE PROPERTY; (H) ANY MATTERS
ARISING FROM OR RELATING TO ANY LEASES (INCLUDING WITHOUT
LIMITATION, CLAIMS, DAMAGES, LIABILITIES, OR OTHERWISE
ASSERTED BY ANY THIRD PARTIES); OR (I) ANY MATTERS BASED ON
SELLER'S ALLEGED SUPERIOR KNOWLEDGE OR FAILURE TO DISCLOSE.
AS PART OF THE PROVISIONS OF THIS SECTION 5.4.2, BUT NOT AS A
LIMITATION THEREON, PURCHASER HEREBY AGREES, REPRESENTS, AND
WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED
5489135.2 9
TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND PURCHASER
HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH IT NOW
HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON IT, BY VIRTUE OF
THE PROVISIONS OF FEDERAL, STATE, OR LOCAL LAW, RULES, OR
REGULATIONS, INCLUDING WITHOUT LIMITATION, SECTION 1542 OF THE
CIVIL CODE OF THE STATE OF CALIFORNIA ("SECTION 1542"), WHICH
PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS THAT THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT, IF KNOWN BY HIM OR
..HER, WOULD HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR OR
RELEASED PARTY."
PURCHASER HEREBY ACKNOWLEDGES, AND REPRESENTS AND
WARRANTS TO SELLER THAT IT HAS READ, IS FAMILIAR WITH, AND
FULLY UNDERSTANDS THE PROVISIONS OF SECTION 1542.
IN ACCORDANCE WITH THE FOREGOING, AND TO THE MAXIMUM EXTENT
PERMITTED BY LAW, PURCHASER HEREBY AGREES, REPRESENTS, AND
WARRANTS THAT IT UNDERSTANDS THAT FACTUAL MATTERS NOW
UNKNOWN TO PURCHASER MAY HAVE GIVEN, OR MAY HEREAFTER GIVE,
RISE TO CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS,
CONTROVERSIES, DAMAGES, COSTS, LOSSES, OR EXPENSES WHICH ARE
PRESENTLY UNKNOWN, UNANTICIPATED, AND UNSUSPECTED, AND
PURCHASER FURTHER AGREES, REPRESENTS, AND WARRANTS THAT THE
WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED
UPON IN LIGHT OF THAT REALIZATION, AND THAT PURCHASER
NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE, AND
ACQUIT .SELLER FROM ANY SUCH UNKNOWN CAUSES OF ACTION,
CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES,.
AND EXPENSES WHICH MIGHT IN ANY WAY BE INCLUDED IN THE
WAIVERS AND MATTERS RELEASED AS SET FORTH IN THIS SECTION 5.4.2.
THE PROVISIONS OF THIS SECTION 5.4.2 ARE MATERIAL AND INCLUDED
AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY
PURCHASER -IN EXCHANGE FOR SELLER'S PERFORMANCE HEREUNDER
AND THE:SETTLEMENT AGREEMENT. SELLER HAS GIVEN PURCHASER
MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE
FOR PURCHASER AGREEING TO THE PROVISIONS OF THIS SECTION 5.4.2.
PURCHASER HAS INITIALED THIS SECTION 5.4.2 TO FURTHER INDICATE
ITS AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION
HEREOF. PURCHASER HEREBY WAIVES THE PROVISIONS OF SECTION
1542, AND•OF ANY STATUTE, PRINCIPLE OF COMMON LAW OR CASE LAW
WHICH WOULD LIMIT THE SCOPE OF THE FOREGOING WAIVER AND
RELEASE, IN CONNECTION WITH MATTERS WHICH ARE THE SUBJECT OF
THE FOREGOING WAIVER AND RELEASE.
5489135.2 10
PURCHASER'S INITIALS:
5.5. Survival. The provisions of this Section 5 shall survive the Closing.
6. Purchaser's Representations. Purchaser represents that as of the Effective Date and as of the
Closing:
a) The execution, delivery and performance of this Contract in accordance with its
terms; do not violate any organizational document of Purchaser, or any contract,
agreement, commitment, order, judgment or decree to which Purchaser is a party or
by which it is bound;
b) Purchaser has the right, power and authority to make and perform its obligations
under this Contract;
c) Purchaser is a municipal corporation duly formed under the laws of the State of
California; and
d) This Contract is a valid and binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms.
7. Seller's Representations. Seller represents that as of the Effective Date and as of the Closing:
a) The execution, delivery and performance of this Contract in accordance with its terms
do not violate or any organizational document of Seller, or any contract, agreement,
commitment, order, judgment or decree to which Seller is a party or by which it is
bound;
b) Seller has.the right, power and authority to make and perform its obligations under
this Contract; and
c) This Contract is a valid and binding obligation of Seller enforceable against
Seller in accordance with its terms;
d) Seller is not a foreign person, nonresident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate, as those terms are defined in the Internal
Revenue Code and the Income Tax Regulations promulgated thereunder;
e) Seller is not, and shall not become, a person or entity with whom Purchaser is
restricted from doing business under, without limitation, Executive Order No. 13224
(Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism), the list of Specially Designated and Blocked
Persons promulgated by the Department of Treasury Office of Foreign Assets Control
or any other similar laws, orders, regulations or other directive.
54891352 11
8. Title.
8.1. Title Commitment. Promptly following the Effective Date, Seller shall request to be issued
and delivered to Purchaser a title commitment for a CLTA standard coverage owner's policy
of title insurance for the Property (the "Title Commitment") issued by Commonwealth
Land Title Company (the "Title Company"), whose address is set forth in Section 13.4
below. Within ten (10) days following Purchaser's receipt of the Title Commitment but in
no event later than thirty (30) days prior to Closing Date (the "Title Objection Date"),
Purchaser shall furnish Seller with notice of any objection Purchaser has to the Title
Commitment which are not Permitted Exceptions; provided, however, Seller shall have no
obligation to cure any such objections except for Required Cure Items. Any matters
reflected on the Title Commitment (as it may be revised from time to time) as of the Title
Objection Date to which Purchaser does not object, shall be deemed Permitted Exceptions.
Following the Title Objection Date, Purchaser shall notify Seller within five (5) Business
Days of becoming aware of any other defects, encumbrances, encroachments or other
objections to title that are not Permitted Exceptions and were not previously disclosed on
the Title Commitment, of any objection thereto. Any defects, encumbrances,
encroachments or other objections to title that are reflected on the Title Commitment or that
would be disclosed by an accurate land title survey of the Property and that are not timely
objected to in accordance with this Section 8.1 shall be deemed Permitted Exceptions. Seller
shall notify Purchaser in writing within five (5) Business Days after receipt of a timely
delivered notice from Purchaser ("Seller's Notice Period") as to whether or not Seller elects
to remove or cure such matters to which Purchaser has timely objected and which do not
constitute Permitted Exceptions. If Seller notifies Purchaser that Seller has determined not
to remove any such matters or fails to state that Seller has determined to remove any such
matters, Purchaser shall have the right to elect, within three (3) Business Days after receipt
of such notice from Seller or lapse of Seller's Notice Period, as applicable, but in no event
later than thirty (30) days prior to Closing Date , either (i) to accept such title as Seller is
able to convey, without any reduction of the Purchase Price or any credit or allowance on
account thereof or any other claim against Seller, in which case all objections shall be
deemed Permitted Exceptions, or (ii) to terminate this Contract, whereupon Purchaser and
Seller shall have no further rights or obligations under this Contract except with respect to
the provisions hereof which by their terms expressly survive the termination of this Contract.
If Purchaser does not notify Seller of its election within such three (3) Business Day period
(or, if earlier, on or before thirty (30) days prior to Closing Date) then Purchaser shall be
deemed to have elected (i) above.
8.2. Status of Title. Purchaser shall accept title to the Premises and consummate the transaction
contemplated by this Contract subject to (a) all defects, exceptions, restrictions, easements,
rights of way and encumbrances that are of record, or which would otherwise be disclosed
in an accurate land title survey of the Property other than, in each case, Required Cure Items;
(b) encumbrances for water charges, sewer rates, assessments and other governmental
charges; (c) statutory liens for taxes; (d) mechanics', carriers', workers', or repairers' liens,
and similar encumbrances other than Required Cure Items; (e) zoning ordinances, building
codes, entitlements and other land use regulations promulgated by any governmental or
quasi -governmental authority, including Environmental Requirements, or any
nonconformity or violation of the Property therewith or thereof; (f) all defects, irregularities,
exceptions, restrictions, easements, rights of way and encumbrances of title created by or
5489135.2 12
through Purchaser or Previous Lessee or any of their respective affiliates, subsidiaries,
agencies, departments or instrumentalities, or any employee, agent, representative, officer
director, contractor, member, or manager of any of the foregoing; (g) all matters disclosed
by any existing title insurance policies or title reports, copies of which have been made
available to Purchaser; and (h) all matters shown as printed exceptions in the standard form
of owners policy of title insurance to be obtained by Purchaser upon the Closing (the title
exceptions whether liens, encumbrances, defects, encroachments or other objections
described in clauses (a) through (h), inclusive, of this sentence, collectively, "Permitted
Exceptions"). Notwithstanding anything in this Contract to the contrary, Seller shall be
obligated to discharge, on or prior to Closing, any of the following to the extent created by
or through Seller: (i) any mortgages and deeds of trust encumbering the Property or any
monetary encumbrance of title which was created or placed of record by or through the acts
or omissions of Seller (but expressly excluding, without limitation, any encumbrance of title
which was created or placed of record by or through the acts or omissions of Purchaser or
Previous Lessee), and (ii) any mechanics, materialman's and similar liens arising from any
of the Work as defined in the Existing Lease ("Required Cure Items").
9. Closing.
9.1. Closing Date. The closing of the transaction contemplated hereby (the "Closing") shall
occur by no later than the 90'h day after the Effective Date, or on such earlier date as mutually
agreed upon by the parties hereto (the "Closing Date").
9.2. Closing Expenses.
a) Seller's Expenses. Seller shall pay (i) one-half (1/2) of any escrow or closing charge
of the Title Company; (ii) one-half (1/2) of the cost of the standard CLTA coverage
portion of the title premium for the Title Policy in the amount of the Purchase Price;
(iii) one-half (1/2) of the cost of recording the Deed (as herein defined); (iv) one-half
(1/2) of any city or county documentary or transfer taxes payable on account of the
conveyance of the Property; and (v) all costs in connection with curing any Required
Cure Items, although Seller shall not be responsible or pay for any mechanics,
materialman's and similar liens arising from anything other than the Work as defined
in the Existing Lease.
b) Purchaser's Expenses. Purchaser shall pay (i) one-half (1/2) of any escrow or closing
charge of the Title Company; (ii) one-half (1/2) of the cost of the standard CLTA
coverage portion of the title premium for the Title Policy in the amount of the Purchase
Price; (iii) the cost of the premium for extended coverage portion of the Title Policy
along with the costs of any endorsements; (iv) one-half (1/2) of the cost of recording
the Deed; - (v) one-half (1/2) of any city or county documentary or transfer taxes
payable on account of the conveyance of the Property; and (vi) all costs in connection
with curing any mechanics, materialman's and similar liens arising from anything other
than the Work as defined in the Existing Lease.
c) The provisions of this Section 9.2 shall survive the Closing or earlier termination of
this Contract.
9.3. Closing Deliveries.
5489135.2 13
a) On or before the Business Day preceding the Closing Date, Seller shall deliver to
Escrowee (unless otherwise provided below):
i) the Grant Deed (the "Deed") executed by Seller being a California statutory
grant deed in the form of Exhibit 3 attached;
ii) the Assignment and Assumption of the Existing Lease executed by Seller in the
form annexed hereto as Exhibit 1;
iii) duly executed certificate of Seller in the applicable form set forth in Treasury
Regulations §1.1445-2(b)(2) and California Form 593;
iv) the General Assignment and Bill of Sale, executed by Seller in the form of
. Exhibit 2 annexed hereto;
v) keys, combinations and codes to all locks and security devices to the Premises
in Seller's possession (which may be -left at the Premises or available for
pickup at Seller's offices), to the extent in the possession of Seller;
vi) any other documents, affidavits and other deliveries required by applicable
law or local custom in order to close the transactions; contemplated herein
which do not create any further liability or obligations on the part of Seller.
b) On or before the Business Day preceding the Closing Date (unless otherwise provided
below), Purchaser shall deliver to Title Company, as the case may be: ,
i), the balance of the Purchase Price as provided in Section 3 hereof, delivered
to=Title Company.by wire transfer of immediately available funds no later
than 11:00 a.m. Pacific Time on the Closing Date;
ii) the Assignment and Assumption of the Existing Lease executed by Purchaser
In the form annexed hereto as Exhibit 1;
iii) if required, evidence of Purchaser's authority to consummate the transaction,
reasonably satisfactory to Escrowee; and
iv) Any and all documents, affidavits and other deliveries required by applicable
law or local custom in order to effectuate this transaction..
9.4. Adjustments and Costs. The following items shall -be credited,, debited and otherwise
:r,. adjusted as of.the date of Closing, and the resulting calculation shall bean adjustment to the . .
Purchase Price payable at Closing pursuant to this Contract (where appropriate, such
adjustments shall be made on the basis of an actual year of 365/366 days, Seller to have the
last day (i.e. with Seller to have revenues and to be responsible for expenses through and
including the day prior to the date of Closing, and Purchaser to have the revenues and to be
responsible for expenses on and after the date of Closing), unless otherwise provided):
a) Rents and other amounts payable by the tenant under the Existing Lease. Purchaser
5489135.2 14
shall pay to Seller any rents, fees or other amounts actually due and which are
attributable to any period prior to the Closing Date.
b) Seller and Purchaser acknowledge that Purchaser is responsible for the payment of
real and personal property taxes, water, electricity, and other utility services, pursuant
to the terms of the Existing Lease. Accordingly, at Closing, there shall be no
adjustment or apportionment with respect to any such obligations.
c) In the event, on the date of Closing, the precise figures necessary for any of the
foregoing adjustments are not capable of determination, the adjustments shall be
made on the basis of the good faith estimates of Purchaser and Seller (using currently
available information), which shall be final and binding on the parties.
d) The provisions of this Section 9.4 shall survive the Closing.
9.5. Conditions to Closing.
a) Notwithstanding anything to the contrary contained in this Contract, the obligation
of Purchaser to close and pay the Purchase Price in accordance with the terms of this
Contract is expressly conditioned upon the fulfillment by and as of the time of the
Closing of each of the conditions listed below, provided that Purchaser, at its election,
evidenced by written notice delivered to Seller at or prior to the Closing, may waive
all or any of such conditions:
i) The Title Company shall have issued, or shall have irrevocably committed to
issue, a standard coverage CLTA Owner's Policy of Title Insurance insuring
the title and interest of Purchaser in and to the Premises in the amount of the
Purchase Price (the "Title Policy"), without endorsement, upon receipt of
payment of the premium therefor, subject only to the Permitted Exceptions;
ii) The representations and warranties of Seller contained in this Agreement shall
be true and correct in all material respects as of the Closing; and
iii) Seller shall not be in default in any material respect of any of its material
obligations under this Contract; provided, however, that if the Closing does
not occur solely by reason of Seller's default under this Contract, Seller shall
have the right, within five (5) Business Days following written notice of such
default from Purchaser, to cure the applicable default, and the scheduled
Closing Date shall be automatically extended to allow for the passage of such
five (5) Business Day period.
b) Notwithstanding anything to the contrary contained in this Contract, the obligation
of Seller to close in accordance with this Contract is expressly conditioned upon
Purchaser's representations and warranties contained in Section 6 of this Contract
being true and correct in all material respects and Purchaser shall have complied in
all material respects with all of its material obligations under the Contract.
10. Default.
5489135.2 15
10.1. Purchaser's Default. If Purchaser should default on any of its obligations under this
Contract and Purchaser fails to cure such default within five (5) Business Days following
receipt of written notice from Seller (with the Closing Date being extended for a like period
if required to effectuate such cure), the same shall constitute a material default hereunder
and under the Settlement Agreement. The parties hereto agree that while the Deposit may
be applied against the Purchase Price at Closing, such Deposit constitutes a partial payment
of Purchaser's total obligations under the Settlement Agreement and shall be retained by
Seller under all circumstances except as set forth in Section 3.4. As such, the Seller and
Purchaser acknowledge and agree that Deposit will not be deemed either a a penalty or
liquidated damages with respect to Purchaser's breach or default hereunder.
10.2. Seller's Default. If the transactions contemplated by this Contract shall not be closed
solely by reason of Seller's default of any of its material obligations under this Contract
and Seller fails to cure such default within five (5) Business Days following receipt of
written notice from Purchaser (with the Closing Date being extended for a like period if
required to effectuate such cure), the same shall constitute a material default hereunder and
under the Settlement Agreement.
11. Purchaser's Obligations. Notwithstanding anything to the contrary set forth in in this Contract,
Purchaser's right to terminate the Contract shall be limited to the failure of a condition precedent
for the benefit of Purchaser in accordance with Section 9.5(a), or as a result of a default by Seller
pursuant to Section 10.2. Except for the foregoing, Purchaser shall have no contingencies to its
obligations at Closing, including, with out limitation, any financing contingency or any
contingency based on the grant, allocation, distribution, assignment or appropriation of public or
private funds.
12. Time of the Essence. Time shall be of the essence with respect to each and every provision of
this Contract.
13. Casualty or Condemnation. If, prior to the Closing, all or any material portion of the
Property is damaged as the result of fire or other casualty or there is a loss or threatened loss of
all or any portion of the Property by condemnation (a "Casualty"), Seller shall promptly notify
Purchaser in writing of such event. Upon the occurrence of a Casualty, Purchaser, in its sole
discretion, shall have the option to (i) accept title to the Property without any abatement of the
Purchase Price, in which event at the Closing all of the insurance proceeds or condemnation
awards shall be assigned by Seller to Purchaser and any monies theretofore received by Seller
in connection with such Casualty shall be paid over to Purchaser; or (ii) terminate this
Agreement and thereafter neither party shall have any further liability to the other. Purchaser's
election to terminate this Agreement in connection with a Casualty pursuant to this Section 13
shall constitute Purchaser's absolute and irrevocable waiver of any right or option of any kind
or nature to purchase the Property under the Existing Lease or otherwise, and all such rights
and options shall forever terminate and be of no further force or effect upon Purchaser's
termination of this Agreement pursuant to this Section 13.
14. Miscellaneous.
14.1. Broker. Seller and Purchaser represent to each other that neither party has dealt with
any broker or real estate consultant in connection with the transaction contemplated by
this Contract. Seller and Purchaser shall indemnify, defend and hold the other free and
harmless from and against any liabilities, damages, costs or expenses (including, but
5489135.2 16
not limited to, reasonable attorneys' fees- and disbursements) suffered by .the
indemnified party arising from a misrepresentation or a breach of any covenant made
by the indemnifying party pursuant to this Section. The provisions of this Section shall
survive the Closing or termination of this Contract.
14.2. Assignment of this Contract. This Contract may not be assigned by Seller without
the consent of Purchaser, which consent may be withheld in Purchaser's sole and
absolute discretion, except to effectuate a tax -deferred like -kind exchange (in which
case Purchaser's consent shall not be required). Except as provided in this Section or
Section 14.20 hereinbelow, Purchaser may not assign this Contract and/or its rights
hereunder without the written consent of Seller, which consent may be withheld in
Seller's sole and absolute discretion. No assignment of this Contract by Purchaser,
whether or not approved by Seller shall relieve the entity named as Purchaser herein
from its obligations hereunder.
14.3. Attorneys' Fees. If either party institutes a legal proceeding against the other party in
connection with this Contract, the losing party in such proceeding shall reimburse the
prevailing party all reasonable attorneys' fees paid by the prevailing party in connection
with such proceeding. The provisions of this Section shall survive the Closing or
termination of this Contract.
14.4. Notices. All notices hereunder to Seller, Purchaser, Escrowee or the Title Company
shall be in writing and sent by certified or registered mail, return receipt requested, or
may be sent by Federal Express or other overnight courier which obtains a signature
upon delivery, or may be sent via email, or may be delivered by hand delivery
addressed to such party at the address of such party set forth below or at such other
address as such party shall designate from time to time by notice:
SELLER:
Dyer 18 LLC
240 Newport Center Drive Suite #200
Newport Beach, CA. 92660
Attn: Chris Lee
Email: Chris@arrimus.com
with a copy to:
Wolf, Rifkin, Shapiro, Shulman & Rabkin, LLP
11400 W. Olympic Blvd., 9`' Floor
Los Angeles, California 90064
Attn: Chris Muno
Email: cmuno@wrslawyers.com
Attn: Elsa Horowitz
Email: eorowitz@wrslawyers.com
PURCHASER:
City of Santa Ana
20 Civic Center Plaza
5489135.2 17 .. f (,
Santa Ana, CA 92702
Attn: City Clerk
With a copy at the same address to:
John M. Funk, Chief Assistant City Attorney
Email: jfunk@santa-ana.org
ESCROWEE/ TITLE COMPANY
Commonwealth Land Title Company
4100 Newport Place Drive, Suite 120
Newport Beach, CA 92660
Attn: Kelly Ralph
Email: kelly.ralph@cltic.com / kjunit@cltic.com
Notices shall be deemed given, in the case of mailing, three (3) Business Days after
deposited in the United States mail, or, in the case of overnight courier, one (1) Business
Day after deposited with the overnight courier (for next Business Day delivery) or, in
the case of hand delivery, the date actually delivered to or rejected by the intended
recipient, or, in the case of email, upon the transmission of such email. Notices on
behalf of the respective parties may be given by their attorneys and such notices shall
have the same effect as if in fact subscribed by the party on whose behalf it is given.
Notwithstanding the foregoing provisions of this Section, (a) notices served by hand
delivery shall be deemed served on the date of delivery if delivered at or prior to 5:00
P.M. Pacific Time on a Business Day and on the next Business Day if delivered after
5:00 P.M. Pacific Time on a Business Day or at any time on a non -Business Day and
(b) notices served by email shall be deemed served on the date of transmission if sent
at or prior to 5:00 P.M. Pacific Time on a Business Day and on the next Business Day
if sent after 5:00 P.M. Pacific Time on a Business Day or at any time on a non -Business
Day.
14.5. Further Assurances. The parties each agree to do such other and further acts and
things, and to execute and deliver such instruments and documents (not creating any
obligations or liabilities additional to those otherwise imposed by this Contract), as
either may reasonably request from time to time, whether at or after the Closing, in
furtherance of the purposes of this Contract. The provisions of this Section shall
survive the Closing for six (6) months.
14.6. Survival and Merger. The acceptance of the Deed by Purchaser shall be deemed to
be a full performance and discharge of every agreement and obligation on the part of
the Seller to.be performed pursuant to the provisions of this Contract, except those
which are herein specifically stated to survive the Closing, and Seller shall have no
further liability with respect to any such agreement or obligation of Seller.
14.7. Recording. Purchaser shall not record this Contract or any memorandum thereof and
any such recording shall be null and void and shall constitute a default hereunder.
14.8. Successors and Assigns. This Contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors, administrators,
5489135.2 18
successors and permitted assigns.
14.9. Entire Agreement. This Contract and the Schedules and Exhibits annexed hereto
constitute the entire agreement between the parties hereto with respect to the subject
matter hereof, and all understandings and agreements heretofore or simultaneously had
between the parties hereto are merged in and are contained in this Contract and said
Schedules and Exhibits.
14.10. Waiver and Modifications. The provisions of this Contract may not be waived,
changed, modified or discharged orally, but only by an agreement in writing signed by
the party against which any waiver, change, modification or discharge is sought.
14.11. Captions and Titles. The captions or section titles contained in this Contract and the
Index, if any, are for convenience and reference only and shall not be deemed a part of
the text of this Contract.
14.12. Construction. The terns "hereof," "herein," and "hereunder," and words of similar
import, shall be construed to refer to this Contract as a whole, and not to any particular
article or provision, unless expressly so stated. All words or terms used in this Contract,
regardless of the number or gender in which they are used, shall be deemed to include
any other number and any other gender as the context may require.
14.13. Non -Business Days. The term "Business Day" shall mean a day that is not a Saturday,
Sunday or national holiday. If a party is required to perform an act or give a notice on
a date that is not a Business Day, the date such performance or notice is due shall be
deemed to be the next Business Day.
14.14. Governing Law and Jurisdiction; Waiver of Jury Trial. This Contract is to be
governed and construed in accordance with the laws of the State of California, without
regard to its conflicts of law rules. Purchaser and Seller hereby irrevocably submit to
the exclusive jurisdiction of the State and United States District courts located within
the County in which the Property is located in respect of any suit or other proceeding
brought in connection with or arising out of this Contract, and waive all objections to
jurisdiction and venue of such courts. PURCHASER AND SELLER HEREBY
WAIVE ANY RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDINGS
OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE
OTHER IN CONNECTION WITH ANY MATTER WHATSOEVER ARISING OUT
OF OR IN ANY WAY CONNECTED WITH THIS CONTRACT, INCLUDING,
WITHOUT LIMITATION, THE RELATIONSHIP OF PURCHASER AND SELLER
OR ANY CLAIM OF INJURY OR DAMAGE RELATING TO THE FOREGOING
OR THE ENFORCEMENT OF ANY REMEDY HEREUNDER. The provisions of
this subsection shall survive the Closing or earlier termination of this Contract.
14.15. Counterparts; Electronic Signature. This Contract may be executed in two or more
counterparts and each of such counterparts, for all purposes, shall be deemed to be an
original but all of such counterparts together shall constitute but one and the same
instrument, binding upon all parties hereto, notwithstanding that all of such parties may
not have executed the same counterpart. The execution of this Contract may be effected
by hand written signatures delivered via facsimile, electronic mail or other electronic
means (including pdf), and any signatures so delivered shall be deemed to have been
5489135.2 19
duly and validly delivered and be valid and effective for all purposes. With respect to
any signatures delivered via facsimile or other electronic means, each party shall
deliver their original ink signatures to the other party promptly following request
therefor, provided that failure to deliver such original ink signatures shall not affect the
validity of the electronic signatures that were delivered.
14.16. No Third Party Benefits. This Contract is made for the sole benefit of Seller and
Purchaser and their respective successors and assigns and no other person shall have
any right, remedy or legal interest of any kind by reason of this Contract.
14.17. Submission not an Offer. The submission of this Contract to any party by Seller shall
not be construed as an offer, nor shall Purchaser have any rights with respect thereto,
unless and until Seller shall execute a copy of this Contract and deliver the same to
Purchaser.
14.18. Severability. If any provision of this Contract is determined by a court of competent
jurisdiction to be invalid or unenforceable, such determination will not affect the
remaining provisions of this Contract, all of which will remain in full force and effect.
14.19. Insurance. Purchaser acknowledges that Seller's insurance policies will not be
transferred to Purchaser.
14.20. Proposed Tax Free Exchange. Either Purchaser or Seller may desire to close this
transaction as a part of a transaction that would qualify under Section-1031 of the
Internal Revenue Code for non -recognition treatment (the "Exchange"). Such
Exchange may take the form of a "forward exchange" or a "reverse exchange," as such
"reverse exchange" is permitted pursuant to Internal Revenue Service Revenue
Procedure 2000-37. At the other party's request, Purchaser or Seller shall execute such
documents and take such other action as may reasonably be requested for the purpose
of the Exchange. Such cooperation shall not entail any liability to such party beyond
its existing obligations under this Contract and neither party will be required to take
title to or contract for the purchase of any other property, nor shall the Closing be
delayed as the result of any such exchange.
14.21. INDEPENDENT COUNSEL. EACH PARTY TO THIS CONTRACT ADMITS,
ACKNOWLEDGES AND REPRESENTS THAT IT _ HAS HAD THE
OPPORTUNITY TO CONSULT WITH AND BE REPRESENTED BY
INDEPENDENT COUNSEL OF SUCH PARTY'S CHOICE IN CONNECTION
WITH THE NEGOTIATION AND EXECUTION OF THIS CONTRACT. EACH
PARTY FURTHER ADMITS, ACKNOWLEDGES AND REPRESENTS THAT IT
HAS NOT RELIED ON ANY REPRESENTATION OR STATEMENT MADE BY
ANY OF THE ATTORNEYS OR REPRESENTATIVES OE'THE OTHER PARTY
WITH REGARD TO THE. SUBJECT MATTER, BASIS, OR EFFECT OF THIS
CONTRACT.
14.22. Confidentiality. Purchaser and Seller at all times shall keep the terms and conditions
of this Contract, and all documents and information received or obtained in connection
with the transaction contemplated hereby, confidential, except to the extent necessary
to (a) comply with applicable laws and regulations, (b) discuss the same with such
parry's consultants, advisors, lenders and investors, and (c) carry out the obligations set
5489135.2 20
forth herein. Any disclosure to consultants, advisors, lenders or investors pursuant to
clause (b) of the preceding sentence shall indicate that the information is confidential
and shall require it to be so treated by the recipient. Notwithstanding the foregoing,
the restrictions set forth in this Section shall not apply to any information that is or
becomes generally known or available to the public other than as a result of a disclosure
by a party in violation of this Section. The provisions of this Section shall survive the
Closing or earlier termination of this Contract.
[signature page follows]
5489135.2 21
q_2023-119
IN WITNESS WHEREOF, the parties hereto have duly executed this Contract as of the date
set forth below such party's signature.
SELLER:
DYER 18 LLC,
a Delaware limited liability company
G 1_
By: t
Name: Lti2- � L -e
Title: M AN Ay- 5 Men. `x�t
Date: -7 - b - 2 3
PURCHASER:
THE CITY OF SANTA ANA
a California municipal corporation
By:
Name: K iS+iru, R;deje.
Title: C' iiy/N�gE -
Date: _� A -A- J 2 o z Q0�
54891352 ? 1
ACCEPTANCE BY ESCROW HOLDER
The undersigned hereby acknowledges that it has received executed counterparts or a fully executed
copy of the foregoing Contract of Sale and agrees to act as Escrowee thereunder and to be bound by
and perform the terms thereof as such terms apply to Escrowee.
Dated: 2023
COMMONWEALTH LAND TITLE COMPANY
By:
Name:
Title:
5489135.2
SCHEDULE A
DESCRIPTION OF LAND
The Land referred to herein is situated in the State of California, County of Orange, City of Santa
Ana, and described as follows:
LOT 12 OF TRACT NO. 5771, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE
OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 210, PAGES 39,40 AND 41,
OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA.
APN: 430-021-02
5489135.2
EXHIBIT 1
FORM OF ASSIGNMENT AND ASSUMPTION OF LEASE
KNOW ALL MEN that a , having an address at
(the "Assignor") inconsideration of Ten and 00/100 ($10.00) Dollars and other good
and valuable consideration, received from , a , having an address at
("Assignee"), does hereby assign, transfer and deliver unto Assignee, all of its right, title and interest
in and to that Standard Industrial/Commercial Single -Tenant Lease —Net, dated as of March 1, 2021,
by and between Dyer 18 LLC, as lessor, and the City of Santa Ana, as lessee (the "Lease") at the
premises known as 1815 East Carnegie Avenue, Santa Ana, California 92705 (the "Premises")
together with all rents payable under the Lease, and all benefits and advantages to be derived
therefrom, to hold and receive them unto Assignee, and together with all rights against guarantors, if
any, of the obligations of the tenant under the Lease.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
forever, from and after the date hereof, subject to the terms, covenants, conditions and provisions of
the Lease and subject as aforesaid.
AND Assignee does hereby acknowledge receipt of the Lease, and does hereby (a)
accept the within assignment and (b) assume the performance of all the terms, covenants and
conditions of the Lease on the part of the lessor which are to be performed under the Lease and which
arise from and after the date hereof.
This Assignment and Assumption of Lease (this "Assi nment") is made without
warranty or representation by Assignor and without recourse to Assignor in any manner whatsoever,
express or implied, all as more fully set forth in the Purchase and Sale Agreement dated June , 2023
(the "Purchase Contract"). Nothing in this Assignment shall be construed to modify or limit any
provisions in the Purchase Contract and in the event of any inconsistency between this Assignment
and the Purchase Contract, the latter shall govem and control.
This Assignment shall inure to the benefit of Assignee and Assignor and their
respective successors and assigns, and shall be governed by the laws of the State of California, without
regard to its conflicts of law rules. This Assignment may not be modified, altered or amended, or its
terms waived, except by an instrument in writing signed by the parties hereto.
None of the provisions of this instrument are intended to be, nor shall they be construed
to be, for the benefit of any third party.
[SIGNATURES ON FOLLOWING PAGE]
5489135.2
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
this r day of j 1, which Assignment is effective as of the date that Assignee
acquires fee simple interest in and to the Premises.
ASSIGNOR:
Un
Name:
Title:
ASSIGNEE:
Title:
5489135.2
EXHIBIT 2
FORM OF GENERAL ASSIGNMENT AND BILL OF SALE
("Seller") in in connection with its conveyance this day of
Real Property located at _ , and for and in consideration of
the sum of TEN DOLLARS ($10.00) and other good and valuable consideration to it paid by
, having an address at ("Purchaser"), the receipt and sufficiency of
which are hereby acknowledged, does hereby grant, bargain, sell, transfer, assign and deliver unto
Purchaser all of Seller's right, title and interest in and to the Personal Property, including, but not
limited to, the Construction Documents, indemnities and warranties relating to the Work.
1. This General Assignment and Bill of Sale is made without warranties, express or
implied. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms
in the Contract of Sale, dated as of _, 202, by and between Seller and Purchaser.
2. TO HAVE AND TO HOLD the Personal Property and Warranties unto Purchaser, its
successors and assigns, to its own use and benefit forever.
3. IN WITNESS WHEREOF, the said Seller has hereunto set its hand and seal as of the
day of 202_.
SELLER:
5489135.2
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
[ASSIGNEE]
MAIL TAX STATEMENTS TO:
EXHIBIT 3
Space above this line for Recorder's Use
DOCUMENTARY TRANSFER TAX $
Computed on the consideration or value of property conveyed;
OR
..Computed on the consideration or value less liens or
encumbrances remaining at time of sale.
Signature of Declarant or Agent determining tax — Firm Name
Order No.
Escrow No.
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, a
, hereby grants to a ("Grantee'), the real property in the City
of Santa Ana, County of Orange, State of California, described on Exhibit "A" attached hereto and
incorporated herein by reference (the "Property").
The Property conveyed hereby is subject to (a) all defects, exceptions, restrictions, easements, rights
of way and encumbrances that are of record; (b) encumbrances for water charges, sewer rates,
assessments and other governmental charges; (c) statutory liens for taxes; (d) zoning ordinances,
building codes, entitlements and other land use regulations promulgated by any governmental or quasi -
governmental authority, or any nonconformity or violation of the Property therewith or thereof; (e) all
defects, irregularities, exceptions, restrictions, easements, rights of way and encumbrances of title
created by or through Grantee or The Illumination Foundation, a California non-profit public benefit
corporation, or any of their respective affiliates, subsidiaries, agencies, departments or
instrumentalities, or any employee, agent, representative, officer director, contractor, member, or
manager of any of the foregoing; and (f) all matters that would be disclosed or apparent by a survey
and/or inspection of the Property.
Dated:
Name:
5489135.2
A Notary Public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
County of
On before me,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) 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(ies), 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.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
U,I.&I KM