Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11
PURCHASE AND SALE AGREEMENT
LMC-Millenia Investment Company, L.P.,
a California limited partnership
(Seller)
and
City of Chula Vista
(Buyer)
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 i Table of Contents
Section 1—Definitions.................................................................................................................... 1 Section 2—Sale and Purchase of Property ................................................................................... 65 Section 3—Payment of Purchase Price......................................................................................... 65 Section 4—Escrow.......................................................................................................................... 7 Section 5—Pre-Closing Conditions Precedent ............................................................................... 9 Section 6—The Closing ............................................................................................................ 1211 Section 7—Closing Costs, Prorations ........................................................................................... 13 Section 8—Representations, Warranties, and Covenants ............................................................. 14 Section 9—Possession .................................................................................................................. 19 Section 10—Buyer’s Option re Early Closing.............................................................................. 19 Section 11—Breach and Remedies. .............................................................................................. 20 Section 12—Condemnation .......................................................................................................... 21 Section 13—Casualty.................................................................................................................... 21 Section 14—Miscellaneous Provisions..................................................................................... 2221
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 1 Purchase and Sale Agreement
This Purchase and Sale Agreement ("this Agreement "), dated December __, 2022 , ("Effective Date" ), is execute d by LMC-Millenia Investment Co mpany, L.P ., a Cali fornia limited partnership ("Seller"), and City of Chula Vista ("Buyer").
Seller and Buyer hereby agree as follows:
Section 1—Definitions. The following terms shall have the following definitions in this Agreement:
Acceptance. As defined in the Project Development Agreement.
Accrued Soft Costs . The costs incurred by Seller prior to the Effective Date for design, engineering, entitlement, p ermit processing, and related cost s pertaining to the Improvements, the amount of which is $3,145,203.00. Seller and Buyer confirm the amount of the Accrued Soft Costs is an agreed amount to be paid that is not subject to adjustment.
Amenity Building. The single-story building having a total area of approximately 5,850 square feet to be constructed on the Land, as more particularly described in the Buildings Plans and Specifications.
Buildings. The Library Building and the Amenity Building. The Buildings shall be delivered in “warm shell” condition, as provided in the Buildings Plans and Specifications.
Building Costs. The allowed costs incurred by Se ller to construct t he Buildings pursuant to the terms of the Project Development Agreement.
Buildings Plans and Specifications. The plans and specifications for construction of the Buildings prepared by Gensler pursuant to the D esign Contract that have been submitted to and ap proved by the C ity of Chula Vista under permit appli cation number s B-17-0654 (Library Building) and B17-0656 (Amenity Building). The Buildings Plans and Specifications do not i nclude the plans and specificatio ns for the T enant Imp rovements or the Parking Structure.
Building Permits. The per mits to be issued by the City of Chula Vista to allow lawful commencement, prosecution, and completion of construction of the Buildings and the Six Level Structure (as defined in the Project Development Agreement).
Business Day(s) . Any day other than a Saturday, Sunday, or legal h oliday recognized in California.
Closing. The time and date when the Deed conveying f ee t itle t o the Real Property is recorded in the San Diego County Recorder's Office and the payments and deliveries required by the terms of this Agreement are made.
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 2 Closing Date. The date on which the Closing occurs.
Construction Schedule. T he schedule for completion of t he Improvements to be developed pursuant to the Project Development Agreement , as such schedule may be amended during the course of construction of the Improvements.
Completion. As defined in the Project Development Agreement.
Construction Supervision Fee . As defined in the Project Development Agreement.
Contractor. The general con tractor to be selected by Sell er and approved by Buyer pursuant to the Project Development Agreement to complete the Improvements.
Deed. The grant deed to be used to convey t itle to the Real Property to Buyer.
Such deed shall be in the form and content of Exhibit 3 attached hereto.
Design Contract . The con tact dated December 13, 2 016, between Sell er, as owner, and M. Arthur Gens ler Jr. & Associates, Inc., a California corporation d ba Gensler (“Gensler”), as architect, pertaining to the preparation of plans and specifications for the construction of the Buildings on the Real Property and all amendments to such contract.
Development Agreement. That certain Development Agreement between City of Chula Vista and McMillin Otay Ranch, LLC recorded October 27, 2009 as Document No. 2009- 0595116 of Official Records of the San Diego Co unty Recorde r, as ass igned f rom McMillin Otay Ranch, LLC to SLF IV – Millenia, LLC, a Delaware limited liability company, pursuant to that certain Assignm ent of Development Agreement; Memorandum of Assignment of Parks Agreement; a nd Confirmations Regardin g Pa rks Agre ement reco rded February 22, 2011 as Document No. 2011-0098720 of Official Records of t he San Diego Cou nty Recorder, as such Development Agreement may have been or may be amended from time to time.
Developer Fee. As defined in the Project Development Agreement.
Due Diligence Documents. The documents listed in Exhibit 2 attached hereto.
Due Dilig ence Period . The period commencing on the Effective Date an d continuing through March 1, 2023.
Early Work. As defined in the Project Development Agreement.
Effective Date. The date specified above.
Escrow Holder. First American Title Insurance Company.
Improvements. Collectively the Buildings, the Tenant Improvements, the Parking Structure, and the Site Work.
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Improvements Plans and Specifications. Collectively the Build ings Pla ns and Specifications, the Tenant Improvemen ts Plans and S pecifications, the Parking Structure Plans and Specifications, and the Site Work Plans and Specifications.
Intangible Property. All intangible property to the extent own ed or held by Seller in c onnection with the ownership and development of the Real P roperty, includi ng, withou t limitation, all plans, permits, entitlements, guaranties, and warranties.
Job Close Out Deliveries . The documents and tangible items required to be delivered by Seller to Buyer as a condition of Acceptance.
Land. That certain fee simple parcel of land located in Chula Vista, California, more particularly described in Exhibit 1 attached hereto.
Library Obligation. Seller’s obligation to construct a library, which obligation (1) is described in Section 4.3.1 and Exhibit D of the Development Agreement and (2) was assumed by Seller pursuant to that cer tain Agreement Regarding Consent to P artial Assignment a nd Transfer of Development Agreement recorded February 16, 2016, as Document N o. 2016- 0064898 of Official Records of San Diego County, California.
Library Building. The multi-story library building having a total area of approximately 169,000 square feet to be constructed on the Land, as more particularly described in the Buildings Plans and Specifications.
Option and Right of First Refusal. The option and right of first refusal in favor of SLF IV – Millenia, LLC, a Delaware limited liability company (“SLF IV”), a memorandum o f which was recorded February 16, 2016, as Document No. 2016-0064897 of Off icial Records of San Diego County, California (“the Memorandum of Option and Right of First Refusal”).
Parking Structure. As defined in the Project Development Agreement.
Parking Structure Costs. As defined in the Project Development Agreement.
Parking Structu re Plans and S pecifications. As defined in the Project Development Agreement.
Personal Property . All equipment, appliances, tools, machinery, supp lies, building materials and other personal property of every kind and character owned by S eller and attached to, appurte nant to, located in o r used in c onnection with the operation of the Improvements.
Prime Contract. The contract between Seller and Contractor by which Contractor will act as the general c ontractor to con struct the Improvem ents, which con tract shall be a guaranteed maximum price form of contract and otherwise subject to the terms and conditions described in the Project Development Agreement.
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Project. As defined in the Project Development Agreement.
Project Development Agreement. The Project Development Agreement between Seller and Buyer for the development and construction of the Improvements to be entered into concurrently herewith in form and content as Exhibit 11 attached hereto.
Permitted Encumbr ances. The encu mbrances to title to t he Real Property, as approved by Buyer and as provided below; however, the Permitted Encumbrances shall not include any deeds of trus t, mortgages, judgment liens, mechanic's liens, income ta x liens, o r other similar li ens securing mon etary obligations (exc luding nondelinquent real property taxes and assessments), all of which shall be pai d and/or otherwise d ischarged by Seller p rior to or concurrently with the Closing.
Property. The Real Property, the Personal Property, and the Intangible Property.
Property Expenses. All costs and expenses of any nature incurred or payable, or arising in connection with, the ownership, management, maintenance, construction, repair, replacement, restorat ion, or operation of the Project site or the Project, including, without limitation, any amounts paid for: (i) the cost of supplying any utilities, the cost of operating, maintaining, repairing, reno vating and managing any utility syst ems, mechanical syste ms, communications systems, sanitary and sto rm drainage systems, and the cost of supplies and equipment and maintenance and service contracts in connection the rewith; (ii) the cost of licenses, certificates, permits and inspections; (iii) the cost of any insurance carried or required to be carried by Developer pursuant to this Agreement with respect to the Project site or the Project; (iv) the cost of landscapin g, supplies, tools, equipment and materi als, and all fees, charges and other costs incurred in co nnection with the management, operation, rep air and maintenance of the Project site or the Project ; (v) payments under any easement, license, permit, operating agreement, declaration, or covenant or instrument pertaining to the Project site that exist as of the Effective Date or that are created or consented to by Developer; (vi) the cost of any improvements, capital repairs, capital alterations, or capital equipment, required by Laws or otherwise required under this Agreement ; and (vi i) real property ta xes and ins tallments of assessments payable pr ior to the Closing ; however Property Expenses shall not include (1) Developer’s general overhead, (2) any Property Expenses incurred prior to January 1, 2023, or (3) any costs or expenses that are otherwise paid by Buyer or to be reimbursed by Buyer under any other provision of this Agreement or the Project Development Agreement.
Purchase Price. The sum of the following:
Reimbursable Project Costs $76,268,188
Developer Fee* $3,300,000
Construction Supervision Fee* $2,700,000
TOTAL ESTIMATED REIMBURSABLE PROJECT
COSTS*
$82,268,188
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 5 Land Acquisition Costs $11,000,000
Previously Incurred Soft Costs $3,145,203
Estimate Total $96,413,391
*The amou nts shown above for Reimbursable Proje ct Costs , Developer Fee, and Construction Sup ervision Fee are estim ates and are subject to adj ustment pursuant to the Project Development Agreement.
Real Property. The Land and the Improvements.
Reimbursable Project Costs. As defined in the Project Development Agreement.
Site Work. As defined in the Project Development Agreement.
Site Work Costs. The allowed costs incurred by Seller to construct the Site Work, as provided in the Project Development Agreement.
Site Work Plans and Specifica tions. As defined in the Project Development Agreement.
Target Closing Date . Ten Business Days following the satisfaction of the conditions to Acceptance, as provided in the Project Development Agreement.
Tenant Improvements . The improvements to t he interior of the Bu ildings in excess of the “warm shell” specifications for the Buildings described in the Buildings P lans and Specifications.
Tenant Improvements Costs. The allowed costs incurred by Seller to construct the Tenant Improvements, as provided in the Project Development Agreement.
Tenant Improvements Plans and S pecifications. The p lans and specifications for the Tenant Improvements to be developed pursuant to the Project Development Agreement.
Title Company. First American Title Insurance Company.
Title Policy. The Title Polic y shall be a Cal ifornia Land Title Ass ociation ("CLTA") owner's stand ard coverage p olicy o f title insurance; ho wever, subject to Buyer's (1) payment of the additional premium and (2) compliance with all of Title Company's additional requirements, including obtaining an AL TA survey at Buyer's c ost, Buyer may elect that the Title Policy shall be an ALTA owner's extended coverage policy of title insurance.
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 6 Section 2—Sale and Purchase of Property . S eller hereby agrees to sell the Property to Buyer and Buyer hereby agrees to purchase the Property from Seller a t the price and o n the terms, covenants, and conditions set forth in this Agreement.
Section 3—Payment of Purchase Price. Buyer shall pay to Seller the Purchase Price as follows:
3.1 Initial Deposit . As used her ein, “the Initial Deposit ” means the sum of $9,145,203.00, which shall be delivered by Buyer to Escrow Holder and released by Escrow Holder to Seller, as follows:
3.1.1 First Release. Within t wo Business Da ys foll owing satisfaction or Buyer’s waiver of the pre -Closing c ondition precedent in Section 5.1.1 (Title Documents), Buyer shall deposit with Escrow Holder $500,000.00 of the Initial Deposit (“the First Release”).
Within two Business Days following Escrow Hold er’s receipt of (1) the First Rele ase, (2) Seller’s wire transfer instruc tions, and ( 3) such escrow i nstructions signed by Seller and Buyer as Escr ow Holder may rea sonably require t o release the First Release , Es crow Holder shall r elease to Seller First Re lease. The First Release shall (1) constitute ind ependent consideration for Seller ’s execution of this Agree ment and allow ing Buyer to disapprove or approve Buyer’s pre-Closing conditions in Section 5.1 in Buyer’s sole and unfettered discretion, (2) not be refundable to Buyer for any reason other than Sell er’s breach of this Agreement, and (3) be applicable to t he P urchase Price together with the balance of the Initial Deposit.
Notwithstanding the foregoing, if the Land is encumbered by a deed of trust as of the Effective Date, t hen, as a further condition to Esc row H older’s release to Seller of the First Release, Escrow Holder must be in possession of (1) a demand for payment from the beneficiary of such deed of trust, (2) a request for full reconveyance of such deed of trust from the beneficiar y of such deed of trust, (3) an instruction fro m Buyer that allows E scrow Holder t o pay such beneficiary’s dem and fo r payment from the First Release, and (4) if the amount owed to such beneficiary exceeds the amount of the First Release, immediately available funds from Seller in an amount to pay t he balance owed to such b eneficiary in excess of the First Release and an instruction from Seller to use such funds to pay the remaining balance of the demand.
3.1.2 Second R elease. Within t wo Business Days following (1) Escrow Holder’s confirmation of recording of the Memoran dum of Agreeme nt (defined below) and the Performance Deed of T rust (defined below) and (2) satisfaction or Buyer’s waiver of the pre- Closing conditions precedent for Buyer’s benefit in Section 5.1 below, Buyer shall deposit with Escrow Holder $5,500,000.00 of the Initia l Deposit (“the Second Release”). Within two Business Days following Escrow Holder ’s receipt of (1) the Second Release, (2) Seller’s wire transfer instruc tions, and (3) such escrow in structions signed by Seller and Buyer as Escr ow Holder may reasonably require t o release the Second Release , Escrow Holder shall release to Seller the S econd Release. The Second Release shall be (1) applicable to th e P urchase Price together with the First Release and balance of t he Initial Deposit and (2) refundable if th is Agreement is terminated under Section 5.4 or because of Seller’s breach.
3.1.3 Third Release . Within two Business Days following the date (1) Buyer has approved and Seller has executed the Prime Contrac t, as provided in the Project
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 7 Development Agreement , (2) Seller (and/or Prime Contractor) has obtained the insurance policies, payment bond (s), and performance bond(s), all in forms sa tisfactory to the City, required under the Project Development Agreement , and (3) Seller has delivered to Escrow Holder conditional assignments of the Prime Contrac t and all othe r assign ment agreements required by this Agreement or the Project Development Agreement, all in forms satisfactory to the City , Buyer shall deposit with Escrow Holder the $3,145,203.00 balance of t he In itial Deposit (“the Third Release”). Within two Business Days following Escrow Holder’s receipt of (1) the Third Release, (2) Seller’s wire transfer instruc tions, and (3) such escrow instructions signed by Seller and Bu yer as Escr ow Hol der may rea sonably require t o release the Third Release, Escrow Holder shall release to Seller the balance the Third Release. The Third Release shall be (1) applicable to the Purchase Price together with the First Release and Second Release and (2) refundable if this Agreement terminated under Section 5.4 or because of Seller’s breach.
3.2 Project Development Agreement Payments. At such times that payments are due under the Project Deve lopment Agreement to Seller or Contractor, subject to any retention provisions, Buyer shall pay such amounts. The amounts paid by Buyer to Seller or Contractor under this section shall be credited to the Purchase Price.
3.3 Balance of Purchase Pri ce. The balance of the Purchase Pr ice shall be paid in immediately available certified funds at the Closing.
Section 4 —Escrow. Escrow Holder shall act as esc row under this Ag reement. An executed copy of this Agreement shall be delivered to Escrow Holder by both parties within two Business Days follo wing the dat e both parties sign this Ag reement, and the parties hereby instruct Escrow Holder to act in accordance with the terms of this Agreement. Buyer and Seller shall execute such further escrow instru ctions as may be required by Escrow Holder to consummate the transactions contemplated by this Agreement, but in the event of any conflict between the provisions of such escrow i nstructions and this A greement, the provisions of this Agreement shall control.
4.1 Buyer's Deliveries . In add ition to the Initial Deposit, Buyer sha ll make the following deliveries to Escrow Holder:
4.1.1 Closing Payment and Costs. No later than 10:00 a. m. on the Target Closing Date, Buyer shall deliver to Escrow Holder immediately available funds in an amoun t equal to the sum of (1) the unpaid balance of the Purchase Price and (2) Buyer's costs, fees and prorations.
4.1.2 Buyer’s Closing Documents. No later than 3:0 0 p.m. of th e last regular Business Day before th e Target Clos ing Date , Buyer shall del iver to Escrow Holder (1) an agreement (“the Library Assumption Agreement”) in form and conte nt as Exhibit 8 attached hereto by which Buyer assumes the Libr ary Obligatio n signed by B uyer’s du ly authorized representative before a notary public and (2) such documents, if any, required by Title Company to release the Memorandum of Agreement and the Performance Deed of Trust.
4.2 Seller's Deliveries. Seller shall make the following deliveries:
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4.2.1 Closing Deliveries to Escrow. No later than 3:00 p. m. of the last regular Business Day before the Target Closing Date, Seller shall deliver to Escrow Holder:
4.2.1.1 The Seller's Grant Deed. The Deed conveying the Real Property to Buyer, signed by S eller before a not ary public, to gether with such addi tional documents as Title Company requires to issue the Title Policy, including, if applicable an owner's affidavit and a gap indemnity agreement.
4.2.1.2 General Assignment. A General Assignment in substantially the form and of content as Exhibit 4 signed by Seller.
4.2.1.3 Bill of S ale. A Bill of Sale in form and of conte nt as Exhibit 5 signed by Seller.
4.2.1.4 Discharge of Encumbrance s, Seller's Charges . If the fun ds deposited with Escrow Holder by Buyer are insuffic ient to (1) discharge all encumbrances other than the Permitted En cumbrances and (2) pay the charges to Seller's p rorations, fees and co sts, Seller shall deliver to Escrow Holder sufficient funds and instruments to discharge and pay such encumbrances and charges.
4.2.1.5 Affidavit of Non -Foreign Status . Declarations bearing Selle r's signature pursua nt to (1) Internal Revenue Code sect ion 1445, confirming that Seller is not a foreign person an d (2) California Revenue and Taxation Code section 18662, con firming whether this trans action is s ubject to California at -source w ithholding. The declaration un der Internal Revenue Code section 14 45 shall be substantially in form a nd of content as Exhibit 6 attached hereto. If t his transaction is subject to withho lding under Internal Reven ue Code section 1445, California Revenue and Taxation Code section 18662, or other appl icable law requiring at -source withholding with respect to the Purchase Price paya ble to Seller, Seller authorizes Escrow Holder to comply with such laws and withhold fr om Seller the portion of the Purchase Price required to be withheld to comply with such laws. If the cash proceeds otherwise payable to Seller a t the Closing are insuff icient to satisfy the amo unt required to be withheld, then, on or before 3:00 p.m. on the Business Day preceding the Target Closing Date, Seller shall deposit with Escrow Holder immediately available funds in an amount such that, wi th the other cash funds payable to Seller at the Closing, Escrow Holder shall have sufficient funds to satisfy the withholding requirement.
4.2.1.6 Reconfirmation of Representations. A written statement signed by Sel ler that confirms that, during the period from the Effectiv e Date to the Closing Dat e, nothing has occurred (and Seller has not become aware of an y f acts) th at, to Seller's actual knowledge, causes any of the Seller's representations and warranties contained in this Agreement to be material ly untrue and that, to S eller's actual knowledge, all of the representations and warranties contained in this Agreement remain true and are reconfirmed as of the Closing Date; however, Seller's written statement may excep t any occurrences or facts as to wh ich Seller has, prior to the Cl osing, delivered t o Bu yer written notice and, as provi ded below, Buyer has,
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 9 nevertheless, elected to proceed with the Closing. The written statement shall be substantially in form and content as Exhibit 7 attached hereto.
4.2.1.7 Library Ass umption Agre ement. A counte rpart of the L ibrary Assumption Agreement signed by Seller’s duly authorized representative.
4.2.2 Additional Deliveries.
4.2.2.1 Due Diligence Documents . Within two Business Days following the Effective Date, Seller shall deliver to Buyer or Buyer 's agent the Due Diligence Documents .
Such delivery may be ac complished by online access to one or more digital folders that contain copies of the Due Dil igence D ocuments. Buyer reserves the right to require production of original versions of Due Diligence documents where reasonably available.
4.2.2.2 Memorandum o f Agre ement. Within three Business Days following (1) satisfaction or Buyer ’s w aiver of the pre -Closing conditio ns precedent in Section 5.1 below and (2) satisfaction of the pre -Closing cond ition precedent in Section 5.3 below, Seller shall d eliver to E scrow Holder (i) a Memorandum of Agreement in form an d content as Exhibit 9 attached hereto (“the Memorandum of Agr eement”) signed by Seller ’s duly authorized represent ative before a notary public and (ii) instructions to Escrow Holder to record the Memorandum of Agreement.
4.2.2.3 Performance Deed of Tr ust. Within three Business Da ys following (1) satisfaction or Buyer ’s w aiver of t he pre -Closing conditions precede nt in Section 5.1 below and (2) satisfaction of the pre -Closing condition precedent in Section 5.3 below, Seller shall deliver to Escrow Holder (i) a Deed of Trus t in form and content as Exhibit 10 attached hereto (“the Performance Deed of Trust ”) signed b y Seller ’s duly authorized representative before a notary public and (ii) instructions to Escrow Holder to record the Performance Deed of Trust.
Section 5—Pre-Closing Conditions Precedent.
5.1 Buyer’s Conditions Precedent. Buyer's obliga tions un der this Agreeme nt (including the obligation to deliver to Escrow Holder the Purchase Price) are subject to each of the following conditions precedent for Buyer’s benefit:
5.1.1 Title Documents. O n or before the Title Rev iew Date, Buyer shall have reviewed and approved a preliminary report issued by the Title Company pertaining to the Real Property with a copy of all instruments described in the preliminary report evidencing exceptions to t itle thereto (the pr eliminary rep ort and copies of exceptions are refe rred to h erein as the "Title Report"). As used herein, the t erm "Title Revie w Date" shall mean December 13, 2022. If, on or prior to the Title Review Date, Buyer delivers to Seller written notice of Buyer's disapproval of any of the encumbrances disclose d by the Title Report, then, within five Business Days fo llowing Seller' s receipt of s uch notice, Se ller shall prov ide to Buyer wr itten notice of whether Seller shall eliminate such disapproved encumbrance(s) prior to or concurrently with the Closing. If Seller's responding notice states that all encumbrances disapproved by Buyer shall be
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 10 eliminated prior to or concur rently with the Closing, then (1) the condition under this paragraph shall be deemed satisfied and waived and (2) Seller shall, as a condition to the Closing, cause the disapproved encu mbrance(s) to be e liminated. If Seller's responding not ice states that one or more of the disapproved encumbrances shall not b e eliminated prior to or concurrently with the Closing, then, for a period of ten Business Days following Buyer's receipt of Seller's responding notice, Bu yer may elect to (1) waive the disapproval of the encumbranc e(s) and acc ept the encumbrance(s) as par t of th e Per mitted Encumbrances or (2) terminate this Agreement as provided in Section 5.4 below. The excepti ons t o the Title R eport approved by B uyer shall constitute "Permitted Encumbrances" for all purposes of this Agreement. If Title Company subsequently issues a supplement to the Title Report, Buyer shall have until the later of the Title Review Date or ten Business Days following B uyer's receipt of the supplement to review and approve or disapp rove the matter disclosed i n the sup plement. If the mat ter dis closed in the supplement is not timely approved, then either party may termina te this Agreement, as provided in Section 5.4 below. If the matter disclosed in the s upplement is t imely disapproved, then it shall be subject to the same procedure described above for an item disclosed i n the Title Report as to which Bu yer has delivered timely written notice of disapproval; however, Buyer shal l not be obligated to disapprove any matter disclosed in a supplement that is a lien or other monetary encumbrance.
5.1.2 Buyer's Feasibility. On or before expiration of the Due Diligence Period, Buyer shall have reviewe d and approved Buyer's feasibili ty an alysis of B uyer's propos ed purchase and development o f the Pro perty, including B uyer's re view and approval of the Du e Diligence Documents, the physical condition of the Property, feasibility of Buyer's proposed development, and existing permits and approvals. From and after the Effective Date, Buyer and its agents, employees, and contractors shall be afforded reasonable access to the Property du ring normal business hours upon reasonable notice t o Sell er for the purpose of ma king such investigations as Buyer deems pru dent with res pect to the ph ysical conditio n of the Proper ty.
Buyer shall indemnify and hold harmless Seller and the Property from a ll claims, liens, losses, damages, fines, and liabi lities (including court c osts and attorney's fees) a rising from Buyer's entry upon the Property; how ever, Bu yer sha ll not be oblig ated to inde mnify Sel ler for the negligence or willful misconduct of Seller and/or Seller’s agents, employees, or contractors.
5.1.3 Waiver of Optio n. O n or b efore expiration of the Due Diligence Period , Escrow Holder shall have received (1) a written agreement signed by SLF IV’s duly authorized representative before a no tary public by which SLF IV agrees to rescind any and a ll rights SLF IV may have to purchase the Real Property pursuant to the Option and Right of First Refusal and (2) such other docum ents as Tit le Company may requir e to iss ue the Title Policy without the Memorandum of Option and Right of First Refusal as an exception to coverage.
5.1.4 Confirmation o f State Funding Availability. On or b efore expiration of the Due Diligence Period, Buyer shall have entered into contracts with the State of California on terms acce ptable to Buyer in its sole discretion , prov iding for no less than $30,000,000.00 in funding that can used , in a timely mann er, for Buyer’s acquisition and development of the Library Building, or Buyer’s payments towards other cost components of the Purchase Price.
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5.1.5 Lease Agreement with SDSU . On or before expiration of the Due Diligence Period , Buyer shall hav e entered into a l ease agreement with San Di ego St ate University (“SDSU”) for SDS U’s occupancy of at lea st 50,000 gross square feet of the Library Building on substantially the terms set for th in that certain Memorandum of Understanding [SDSU Film and TV Productio n Studios Project Chula Vista ] between Buyer and SDSU, dated effective September 2, 2022.
5.1.6 Early Work. Developer shall perform complete the Early Work in a manner that allows the City of Chula Vista, in its re gulatory capacity (not as Bu yer under this Agreement) to have inspected and approved the Early Work on or before February 28, 2023.
5.2 Satisfaction/Waiver. Buyer may unilaterally disapprove or waive any pre-Closing condition described in Section 5.1 above in Buyer's sole and unfette red discretion. Sa tisfaction or waiver of a pre-Closing condition shall be ef fective only if the satisfaction or waiver is ( 1) in writing and (2) delivered to Seller.
5.3 Seller’s Condition Preceden t--Waiver of Option . Seller’s obligations under this Agreement are subjec t t o the condi tion precedent for Seller ’s b enefit that, o n or b efore January 31, 2023, Escrow Ho lder shall have re ceived (1) a w ritten agreement signed by SLF IV’s duly authorized representative before a notary public by which SLF IV agrees to rescind any and all rights SLF IV may have to purchase the Real Property pursuant to the Option and Right of First Refusal and (2) such other documents as Tit le Company may require to issue the Title Policy without the Memorandum of Option and Right of First Refu sal as an exception to coverage.
5.4 Termination of this Agree ment. In the event any of the pre-Closing conditions precedent described in Sections 5.1 an d 5.3 above is not timely satisfied or waived within the time period s pr ovided above, either par ty may terminate this A greement by delivering to the other party a n otice of termination; however, if Seller delivers to Bu yer a notice of termination with respect to one or more of the conditions precedent in Section 5.1 above, then Seller's notice of termination sha ll not be e ffective if, within 20 Business Days following Seller's delivery to Buyer of the notice of terminati on, Buyer d elivers to Seller Buyer's written waiv er of the condition(s) that, as o f the date of de livery of Seller's notice of termination, had not previously been timely satisfied or w aived. If this Agreement is terminated as provided in the preceding sentence, then (1) all costs incurred by Escrow Holder shall be borne by the party responsible for such costs as provided h erein, (2) if the Memorandum of Agr eement has been recorded, Buyer shall cause to be recorded a release of the Memorandum o f Agreement, (3) if the Performance Deed of Trust has been recorded, Buyer shall cause to be recorded a release of th e Performance Deed of Trust, (4) Seller shall retai n the First R elease, ( 5) if E scrow Holder has delivered to Seller the Second Release, then Seller sh all refund to Buyer the Second Releas e, (6) Escrow Holder shall refund to Buyer the remaining balance, if any, of the Initial Deposit held by Escrow Holder (including the amount designa ted for the S econd Release if Escrow Holder did not deliver to Seller t he Second Release) , (7) Buyer shall r eimburse Seller for the costs i ncurred by Seller to perform the Early Work, and (8) thereafter, no party shall have any further rights or obligations under this Agree ment other than Buye r's in demnity obligation in Section 5.1.2 above.
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Section 6—The Closing. The parties further agree:
6.1 Conditions to Closing. Escrow Holder shall accomplish the Closing on the Target Closing Date by (1) filing for record the Deed (and such other documents as may be necessary to procure the Title P olicy) and (2) delivering funds and documents to the p arties when all of the following conditions have been satisfied:
6.1.1 Deliveries. All funds and documents required to be delivered to Escrow Holder have been delivered to Escrow Holder.
6.1.2 Pre-Closing Conditions. All of t he co nditions precedent set forth in Section 5.1 and Section 5.3 have been, or upon Closin g shall be, satisfied or waived in the manner specified in said sections.
6.1.3 Owner’s Title Po licy. Escrow H older can procure f rom Ti tle Company the Title Policy with liability in the amount of the Purchas e Price, insuring that fee title to the Real Property vests in Buyer subject only to:
6.1.3.1 General and special real estate taxes and asse ssments that are, as of the Closing, not delinquent.
6.1.3.2 Supplemental taxes, if any, purs uant to Califor nia Revenue and Taxation Code section 75, et s eq., that a re assessed and pertain to the period of time aft er the Closing.
6.1.3.3 The Permitted Encumbrances.
6.1.3.4 All encumbrances volunt arily imposed b y Bu yer, inc luding the Library Assumption Agreement.
6.1.4 Acceptance of Improvements. Provided Buyer has not delivered an Early Closing Notice (defined below), Acceptance shall have occurr ed, as provided under the terms of the Project Development Agreement.
6.1.5 Performance. Seller and Buyer sh all ha ve per formed any and all other material obligations to be performed prior to the Closing by Seller and Buyer, respectively, under the terms of this Agreement.
6.2 Delayed Closing. If t he Closing has not occurred prior to t he Ta rget Clo sing Date, then a party not in breach may deliver to the ot her party written notice ("a Termination Notice") to terminate this Agreement. If (1) a party d elivers a Termination Notice and (2) the Closing does not occur within ten Business Days following delivery of the Termination Notice, then the following shall apply:
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6.2.1 If the Closing f ails to occur as a consequence of a material breach by the party receivi ng the Ter mination Noti ce, then this A greement shall termina te, and the non- breaching party shall have the remedies in Section 11 below.
6.2.2 If the Closing fail s to occur as a consequence of a failure of a condit ion precedent and neither party is in default, then this Agreement shall terminate; however, the party receiving the Termination Notice may postpone termination of this Agreemen t for ten additional Business Days if s uch receiving par ty delivers to the sending party a written notice (“a Postponement Notice”) electing to postpo ne termination of this Agreement. A Postponement Notice must be delivered by the receiving party to the sending party withing ten Business Days following the rec eiving party's recei pt of the Termination Notice. If the cond itions to Closing are satisfied within such addit ional ten B usiness Days, then the Cl osing shall occur. If the conditions to Closing are not satisfied within such a dditional ten Business Days, then this Agreement shall terminate. If this Agreement termina ted under this section, then (1) Buyer shall deliver to Seller such documents as may be required to release the Memorandum of Agreement and Performance Deed of Trust , (2) Buyer shal l pay all Reimbursable Project Costs accrued through the termination date, and (3) if amount of the Second Release e xceeds t he total Reimbursable Project C osts incurred pri or to th e termination date , then Seller shall refund to Buyer the amount of such excess.
6.2.3 Notwithstanding th e foregoing, i f (1) Seller delivers to Buye r a Termination Notice or (2) Buyer could deliver to Seller a Termination Notice, but elects not to do so , then (i) Buyer may waive any of Closing conditions in Section 6.1 and complete the Closing and (ii) if a party is in breach of such party's obligations under this Agreement, then the other party shall retain all remedies and the consequences of such breach shall be resolved after the Closing.
Section 7 —Closing Costs, Pr orations. Expenses in connecti on with the transactions contemplated by this Agreement shall be paid as follows:
7.1 Seller's Costs. Seller shall pay for the following:
7.1.1 Customary seller's recording and filing fees.
7.1.2 The documentary transfer tax, if any, due on the co nveyance and sale of the Property to Buyer.
7.1.3 The portion of the cost o f the Title Policy attributable to a CLTA owner's standard coverage policy of title insurance without endorsements.
7.1.4 The cos t to o btain a n atural hazards discl osure repor t (e.g., flood plain, earthquake, etc.) from a reputable company selected by Seller.
7.1.5 One-half of Escrow Holder's fees.
7.2 Buyer's Costs. Buyer shall pay for the following:
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7.2.1 Customary buyer's recording and filing fees.
7.2.2 The portion of the cost of the Title Policy in excess of th e cost to be paid by Seller, as provided above.
7.2.3 One-half of Escrow Holder's fees.
7.3 Prorations. All non -delinquent real property ta xes and other items of expens e pertaining to the Property shall be prorated between Seller and Buyer as of the Closing Date.
7.3.1 Time of P rorations. Prorations shall be made as of 12:01 a.m. on the Closing Date, with Bu yer to be charged for all expen ses for such day. A ll prorations shall be final, except as otherwise provided herein.
7.3.2 Unknown Amounts. If the amount of an y prorated item is not known at Closing, the parties agree that such item shall be (1) prorated at Closing upon the basis o f the best information available and (2) adjusted when the actual amount of such it em is known, with appropriate charges and credits to b e made . If su bsequent to th e Clos ing any adjustment pursuant to this section i s required, then either party hereto entitled to payment sha ll invoice the other party fo r such amou nt as may be owing, and such amount shall be paid w ithin 10 days following receipt of the invoice. The provisions of this section shall survive the Closing.
7.3.4 Dispute re Purchase Price . If a s of the Target C losing Dat e t he exact amount of the Reimbursable Project Costs cannot be d etermined with certainty because of a dispute or otherwise, then (1) the Closing shall not be delayed, (2) Buyer may withhold from the Closing deposit of the balance of the P urchase Price an amount reasonably estimated to be the uncertain or disputed amount, and (3) Seller and Buyer shall resolve the un certainty or dispu te after the Closing.
7.3.5 Property Expenses. Pendi ng the C losing Date, Seller shall pay Property Expenses and Buyer shall reimburse Seller for Property Expenses within 30 days following Buyer’s receipt from Seller of an invoice there for along with su ch evidence reasonably required by B uyer of th e nature a nd amount of the Property Expenses for which Seller seeks to be reimbursed. Buyer’s reimbursement of Property Expense shall not be applicable to the Purchase Price.
Section 8—Representations, Warranties, and Covenants. Buyer and Seller further agree as follows:
8.1 Disclaimer of Warranties. Except as provided in this Agreement, or in the Project Development Agreement, Buyer acknowledges and agre es that Seller h as not made, does not make, and spe cifically negates a nd discla ims any representations, war ranties, promi ses, covenants, agreements or guarantie s of an y kind o r character whatsoeve r, whe ther express or implied, o ral or written, past, presen t, or future, of , as to, concernin g, or with respec t to the Property.
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8.2 Seller's Representations and Warranties. Seller hereby represents and warrants to Buyer as of the Effective Date:
8.2.1 Authority and Organization. Seller has all requisite power and authority to execute this Agreement and con summate th e transactions contemplate d by this Agree ment.
Seller is a limited partnership duly organized, validly existing, and in good standing under the laws of California, is duly authorized to do business in and in goo d standing in Cal ifornia, and has all requisite power and authority to own the property that Seller now owns.
8.2.2 Litigation. To the bes t of Seller's knowledge, after reasonable inquiry, no actions, suits or proceedings are pending or threatened agai nst or affecting Seller or the Property in a ny court at law or in equi ty or before or by a ny gove rnmental department, co mmission, board, bureau, agenc y or instrumentality, an adve rse decision in which might materially affect the Property or Seller's ability to perform Seller's obligations under this Agreement.
8.2.3 No Violation of Restrictions. Seller has not received written notice of any violation of any zoning or subdivisio n ordi nances or regulations, building codes, regulation s, restrictive covenants or other restrictions to which the Property is subject.
8.2.4 Rights of Others . Other than the Option and Right of First Refusal , no person or entity has any option or righ t of first refusal that is s till effective to acquire a ll or any portion of the Property.
8.2.5 Payment of Cost for Labor and Materials. All sums payable by Seller by reason of any labor or materials heretofore furni shed with respect to the Property have been, or, subject to Buyer ’s payment of the Purchase Price, prior to Closi ng shall be, paid; however, if a dispute exists in connection with such sums so payable that results in a recorded lien against the Property, Seller shall record a lien release bo nd under Civil Code section 8424 with re spect to any recorded claim of lien encumbering the Pr operty and, upon recording such bond , Seller ’s representation in this section shall be deemed to be accurate.
8.2.6 Creditors. Seller has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary p etition in bankruptcy or suffered the fi ling of an involuntary petition by Seller's creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Seller's assets, (iv) suffered attachment or other judicial seiz ure of all, or substantially all, of Sel ler's assets, or (v) admitted in writ ing Seller's inability to pay Sel ler's debts as they become due.
8.2.7 Seller Not a Foreign Person. Seller is n ot a forei gn person within the meaning of S ection 1445(f)(3) of the Internal Revenue Cod e of 1954, as am ended, and Seller shall furnish to Buyer, prior to Closing, an affidavit confirming the same.
8.2.8 Due Diligence Documents. To the best of Seller's actual knowledge, the Due Diligence Documents delivered by Sell er to Buyer are complete copies of the o riginals of
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 16 such doc uments. Furthe r, such documents contain no materia l misstatements or omissions of fact known by Seller with respect to the Property to the best of Seller’s actual knowledge.
8.2.9 Hazardous Materials. To the best of Seller's actual knowledge except as disclosed in the Due Diligence Documents, there are and have not been any Hazardous Materials on, under or about the Property in vi olation o f any federal, state , or l ocal law, ordina nce or regulation promu lgated thereunder relating to H azardous M aterials, including soil and groundwater condi tions. As used her ein, the te rm "Hazardous Material s" shall mean (a) "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste," as defined in Chapter 6.5 of Division 20 (Section 25100, et seq.) of the California Health and Safety Cod e, as amended, or a ny successo r statut e, (b) "hazardous substance," as de fined in the Comprehensive E nvironmental Response, Compensation and Li ability Act (42 U.S.C. section 9601, et seq.), as amended, or any su ccessor statute, (c) "hazardous material," as defined in the Hazardous Materials Transportation Act (49 U.S.C. section 1801, et seq.), as amended, or any successor statute, (d) "hazardous waste," "solid waste," "sludge," "used oil," "recycled oi l," "lubricating oil," and "re-refined oil," as defined in the Resource Conservation and Recovery Act of 1976 (42 U.S.C. section 6901, et seq.), as amended, or any successor statute, (e) "hazardous substance," as defined i n the Carpen ter-Presley-Tanner Haz ardous Subs tance Ac count Act , Chapter 6.8 of Division 20 (Section 25300, et seq.) of the California Health and Safety Code, as amended, or any su ccessor s tatute, (f) "hazardous substance," as defined in Chapter 6.7 of Division 20 (Section 25280, et seq.) o f the Calif ornia Health and Safety Code, as amended, or any successor statute, (g) "hazardous material," "hazardous substance," or "hazardous waste," as defined in Chapte r 6.95 of Division 20 (Sectio n 25501, et seq.) of th e California Health and Safety Cod e, as amend ed, or a ny succes sor sta tute, (h) "hazardous substance," as defi ned in Clean Water Act (33 U.S.C. section 1251, et seq.), as amended, or any successor statute, (i) asbestos or products con taining asbestos or (j) any substan ces, materials or wast es listed i n (1) the United States Department of Transpo rtation Hazardous M aterials Ta ble (49 C.F.R. section 172.101), as a mended, (2) the Enviro nmental P rotection Agency List (40 C.F.R.
Part 302), as amended, or (3) the list published in Title 26 of the California Administrative Code, as amended.
8.2.10 Physical Condition of the Property. To the best of Sel ler's ac tual knowledge, except as disclosed in the Due Diligence Documents, Seller represents that there are no material defect s in the physical con dition of t he Land that would prevent or inhibit the development of the Land with the Improvements.
8.3 Survival of Covenants, Representations and Warranties; Seller's Knowledge.
8.3.1 Survival. All of the covenants, representations and warranties of Seller set forth in Section 8.2 shall survive the Closing and the delivery of the Deed; however, if, after the Closing, Buyer disco vers a brea ch of an y represen tation o r warranty in Section 8.2, then an y action by Buyer fo r br each of such representation o r warranty under Section 8.2 must be commenced within two (2) years after the Closing.
8.3.2 Pre-Closing Rem edies. If either party discovers (1) any material misrepresentation of S eller or any m aterial b reach of Se ller's repres entations or warran ties
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 17 hereunder or (2) a c hange in circumst ances occurs that ca uses one or more of Seller's representations above to be mat erially untrue , then, the par ty making such discovery shal l promptly provide to the other party notice of such discovery. If after the Effective Date and prior to the Closing Buyer discovers (by notice from Seller o r otherwi se) (1) any material misrepresentation of Se ller or any mate rial b reach of Seller's repre sentations or warran ties hereunder or (2) a change in cir cumstances occurs that ca uses on e or more of Seller's representations above to be materially untrue, then the following shall apply:
8.3.2.1 Termination for M isrepresentation. If Buyer dis covers a material misrepresentation or material breach of Seller's representations or warranties (i.e., not a change of circumstances), by receipt of a n otice from Seller, or otherwise, then for a period of 45 days following Buyer's discovery of the material misrepresentation, Buyer shall have the right to t erminate this Agre ement by deliveri ng to Selle r written notice of Buyer 's el ection t o terminate, and, if Buyer elects to terminate this Agreement , then, subject to the waiver of consequential da mages below, Buyer shall have all rights and remedies arisi ng out of such misrepresentation. Buyer's failure to d eliver w ritten noti ce to ter minate or, in the alternative , some other form of resolution while rese rving Buyer’s right to terminate, prior to the expiration of such 45-day period shall be deemed to be Buyer's election not to terminate this Agreement. If, notwithstanding Buyer's discovery of a misrepresentation by Seller, Buyer e lects to not to terminate this Agreement, unless the parties otherwise agree in writing, such election shall, upon the Closing, c onstitute a waiver by Buyer of any and all cla ims rela ting to such misrepresentation.
8.3.2.2 Change of Circumstances. If (1) after the Effective Date a change of circumstance s occurs that causes one of Seller’s representation to become materially untrue and (2) such c hange of circumst ances does not aris e out of S eller’s negligence, wi llful misconduct, or breach of this Agreement, then this Agreement shall remain in full effect and the parties’ obligations shall remain unchanged (i.e., Buyer shall no t have a ri ght to te rminate this Agreement or ad justment to the Purchase Price following such change of circumstances). If (1) after the Effective D ate a change of circumstances oc curs t hat caus es o ne of Seller’s representation to become materially unt rue and (2) such change of circumstance s arises out of Seller’s negligence, willful misconduct, or breach of this Agreement , then Buyer shall have the same rights under Section 8.3.2.1 as if such change of circumstances were a m aterial misrepresentation by Seller.
8.3.3 Seller's Kn owledge. For purpose s of thi s Agreement, the terms " to the best of Seller's actual knowle dge" and similar terms or phrases s hall mean the actual, present knowledge of Lee M. Ch esnut, Susan Gu erra, and Mary Ka y Jordan (each a "Seller's Knowledge Party") following in vestigation of files in Seller's possession or control, but shall not include any duty of ad ditional investiga tion. Seller represents and warran ts tha t Seller's Knowledge Parties are the representatives on behalf of Seller who have the best involvement and responsibility for the Property so as to have such knowledge. Notwithstanding the foregoing, in no event is any personal liability to be asser ted against or i n any ma nner assumed by a Seller's Knowledge Party, who is acting solely as Seller's representative.
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8.4 Seller's Pre-Closing Covenants. Seller hereby covenants and agrees with Buyer that, pending the Closing or termination of this Agreement:
8.4.1 No Granting of Interes t in Property . Except as may be reasonabl y required to c omplete the Impro vements (e.g., utility easements) and subject to Buyer’s prior written consent, which consent shall not be unreasonably withheld, Seller shall no t grant to or purport to create any i nterest in the Property to any third party or any entity holding title to the Property. Notwithstanding the foregoing, without Bu yer’s prior written consent, which consent may be w ithheld i n Buyer’s s ole and unfetter ed discretion, Selle r shall not encumbe r the Property with any mortgage, deed of trust, or other lien to secure any loan(s) made to Seller.
8.4.2 Notice of Assessment /Violation. Promptly after Sel ler becomes awar e thereof, Seller shall notify Buyer in writing of (1) any levy or threatened levy of any pre-Closing governmental assessment affecting the Property and /or ( 2) any alleged violation o f any law, regulation, ordinance, order or othe r requirement of any gover nmental authority (including but not limited to the City) affecting any of the Property.
8.4.3 Access to Books and R ecords. Upon rea sonable notice, Buyer shall be afforded access during normal business hours to all boo ks and record s in Seller's custody or control that relate to the Property , including any and all d ocuments related to construction of the Improvements. Notwithstanding the foregoing, Seller shall not be obligated to give Buyer access to Seller's tax return s, Seller's internal appraisals of va lue of th e Property, if any, or do cuments that pertain to Seller's internal manageme nt of Seller 's corporate, partnership or limite d liability company affairs.
8.4.4 Project Developm ent Agreement; Completion of the Improvements.
Seller shall (1) perform Seller ’s obligations und er the Project Development Agreement and (2) following (i) issuance of the Building Permi t and (ii) release to Seller of the Initial D eposit, use commercially reasonable e fforts t o cause Contra ctor to complete the Improvements in accordance with the Improvements Plans and S pecifications and within the t ime peri ods specified in the Construction Schedule.
8.4.5 Insurance and Bonds. Commencing on the date Contr actor commen ces construction of th e Imp rovements, Seller shall maint ain in force (and cause Contrac tor to maintain in force) the policies of insu rance and bonds described in the Project Development Agreement.
8.5 Buyer’s Pre-Closing Covenants. Buyer hereby covenants and agrees with Seller that, pending the Clos ing or termination of this Agreemen t, Buyer shall (1) perform Buyer’s obligations under the Project Development Agreement and ( 2) use com mercially reasonable efforts to tim ely resp ond to Seller ’s a nd C ontractor’s requ ests for information and approvals related to the Improvements.
8.6 Mutual Indemnity.
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8.6.1 Seller’s Indemnity . Seller shall defe nd, indemnify and hold harmless Buyer and Buyer’s Parties from and against any and all claims, losses, liabilities, fines, penalties and damages (including reasonable attorney's fee s and other costs of defense) arising out of or relating to (1) Seller's ownership of the Property prior to the Closing Date or (2) Seller’s breach of Seller’s obligations under this Agreement; however, nothing contained in this section shall be construed to limit or ot herwise affect (1) Seller’s warranty o bligations under the Pr oject Development Agreement or (2) Seller’s express representations contained in this Agreement that survive the Closing. As used her ein, “Buyer’s Parties” means Buyer’s elected and appointed officers and officials, agents, employees, and representatives.
8.6.2 Buyer’s Indemn ity. Buyer shall defend , ind emnify and hold harmles s Seller and Seller’s Parties from and against any and all claims, losses, liabi lities, fines, penalties and damages (including reason able attorney's fees and other costs of defense) arising out of or relating to (1) Buyer's ownership of the Property after the Closing Date or (2) Buyer’s breach of Buyer’s obligations under this Agreemen t; however, nothing contained in this section shall be construed to limit or ot herwise affect (1) Seller’s warranty o bligations under the Project Development Agreement or (2) Seller’s express representations contained in this Agreement that survive the Clo sing. As used her ein, “Seller’s Parties” means Buye r’s agents, em ployees, partners, managers, and officers.
Section 9 —Possession. Subject to t he ri ghts of parties having the benefit of any Permitted Encumbrances that create possessory interests, if any, Seller shall deliver possession of the Property as required under the Project Development Agreement; however, Buyer's authorized representatives shall have reasonable access to the Property for the purposes of (1) satisfaction of any conditions precedent to the Closing contained herein and (2) Buyer's becoming familiar with the physical condition of the Property and inspecting the Improvements during construction thereof.
Section 10—Buyer’s Option re Early Closing. Buyer shall have the opt ion, at any t ime and without c ause, to complete the Closing prior to the Tar get Closing Date. To exe rcise such option, Buyer shall deliver to Seller a written notice (an “Early Closing N otice") that s tates (1) Buyer elects to complete the Closing prior to the Target C losing Date and (2) the date on which Buyer wants to complete t he Closing, which date sh all be not less than three weeks following the date Seller received the E arly Closing Notice and not more than six weeks following the date Seller received the Early Closing Notice. If Buyer delivers an Early Closing Notice, then the following shall apply:
10.1 Target Closing Date. The Target Closing Date shall be the date specified by Buyer in the Early Closing Notice.
10.2 Assignment of Contracts ; Continued Per formance. On the Closing Date, Seller shall assign to Buyer and Buyer shall assume Seller ’s rights and obligations under the Prime Contract, the Design Contract, and all other contracts executed by Seller relating to the Improvements to the extent that all obligatio ns under su ch contracts have not been fu lly performed as o f t he Closing Date (the Prime Contract , the Design Contract , and such other contracts are h erein collectively referred to as “the Executory Contracts”). Without limiting
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 20 the generality of the for egoing, Buyer shall assume Seller ’s rights and obligations under the Executory Contracts to pay all amounts that (1) are accrued, but un paid, as of the Closing Date and (2) accrue on and after the Closing Date. Pending the Closing Date, Seller shall continue to perform Seller’s ob ligations under the Executory Contracts and this Agreement. Buyer sh all indemnify and hold harmless Seller from all obligations that arise under the Executory Contracts on and after the Closing Date and Seller shall defend, indemnify, and hold harmless Buyer from all obligations that were required to be performed by Seller or liabilities that arose as a result of Seller’s negligence or willful misconduct prior to the Closing Date. On the Closing Date, Seller shall also (1) assign to Buyer all rights Seller may have under the performance bond described in the Project Development Agreement and (2) deliver to Buyer a written list and description of all claims, in any, that may then be pending or threatened in co nnection with construction of the Improvements.
10.3 Purchase Price. To calc ulate the Purchase Price , the amounts related to the Buildings Cost, Tenant Improvements Cost (if any), Parking Structure Cost, and Site Work Cost components shall be the amounts paid by Buye r under t he terms o f the Project Development Agreement with respect to such components prior to the Closing Date.
10.4 Delivery of Documents. On the Closing Date ( or as soon as practicable thereafter), Seller shall de liver to Bu yer all docum ents in Seller ’s possession re lated to construction of the Improvements. To the extent p racticable, Seller shall deliver to Buyer the Job Close-Out Deliveries for Improvements completed up to the Closing Date; however, Seller shall not be obligated to deliver any Job Close -Out Deliver ies that are not due or other wise available as of the revised Target Closing Date (e.g., Seller shall not be obligated t o deliver to Buyer a lien release from Contractor for the final payment or Improvements not yet constructed and paid for under the terms of the Project Development Agreement).
10.5 Developer/Construction Supe rvision Fee s. On the Closing Date, Buyer shall pay to Seller the amount, if a ny, of accrued, but unpaid, Construction Supervision Fee and Developer Fee under the P roject Development Agreement, however, if such amount cannot be accurately calcula ted as of t he Closing Date , the n such amo unt shall be esti mated as of the Closing Date a nd a reconciliation shall be completed promptly following the Closing Date.
Seller shall not be entitled to any Construction Supervision Fee or Developer Fee with respect to the cost to complete the Improvements that accrues after the Closing Date.
10.6 Effect of Exercise of Option on Buyer’s Remedies for Seller ’s Breach. If Seller breaches Seller's ob ligations under this Agreemen t, B uyer may exercise Buyer ’s option under this section without impairing Buyer’s remedies against Seller arising out of such breach.
Section 11—Breach and Remedies.
11.1 Breach. A party sh all be in breach under this Agreement if (1) such party is in breach of such party’s obli gations under the Project Developm ent Agreement or ( 2) such party fails to perform such party's obligations under this Ag reement and such failure continues for ten Business D ays following such party ’s r eceipt from the other part y of w ritten notice of such failure; ho wever, if such failure cannot reasonably be cured within such ten Business Day
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 21 period, such party s hall not be in breach if such party commences to cure within suc h ten Business Day period and thereafter diligently proceeds to cure such failure.
11.2 Seller’s Remedies. If Buyer is in breach of Buyer’s obligations under the Project Development Agreement, then Seller shall have Seller’s remedies provided in the Project Development Agreement. If Buyer is in breach of Buyer’s obligations under this Agreement, then, su bject to the w aiver below, Seller shall hav e a ll r ights and remedies allo wed und er applicable law.
11.3 Buyer’s Remedies. If Seller is in breach of Seller’s obligations und er the Project Develo pment Ag reement, then Buyer shall have Buyer’s remedies provided in the Project Development Agreement. If Seller is in breach of Seller’s obligations under this Agreement, then, subject to the w aiver below, Buyer shall have all r ights and remedies allowed under applicable la w, including specific performance and/or for eclosure of the Pe rformance Deed of Trust.
11.4 Waiver. Notwiths tanding anything in this Agreement to the contrary, in no event shall either party be entitled to recover from the other party any punitive, consequential, or speculative damages.
Section 1 2—Condemnation. In the event of co mmencement of a condemnation proceeding relating to th e Property, Buyer may terminate this Agreemen t if Buyer rea sonably determines that such condemnation will adversely affect Buyer's intended use of, or access t o, the Propert y. Buye r's option to termina te this Agreement as a consequ ence of such condemnation must be ex ercised by Buyer's delivery to Seller of written notice wit hin 120 days following the date Buyer first receives notice of the condemnation. If Buy er timely terminates this Agreement as a c onsequence of such condemnation, Buyer and Seller may ea ch assert all claims against the cond emning authority arising out of s uch condemnation. If Buyer does not terminate this Agreement, Buyer and Seller shall co mplete the Closing in accordance with this Agreement, all rights to conde mnation proceeds otherwise payable to Seller on account of such condemnation shall be assigned to Buyer at Closing, and, pending Closing, Seller shall not settle such matters with the condemnor without Buy er's co nsent; h owever, i f such condemna tion impairs Seller’s performance of Seller’s obligations under the Project Development Agreement, such condemn ation s hall be a For ce Majeure Ev ent (as defined in the Project Development Agreement).
Section 13—Casualty.
If (1) prior to the Closing Date the Im provements are damaged by fire or other casualty and (2) Buyer does not el ect to de liver an Early Closing Notice, then ( i) this Agreement shall remain in ef fect (i.e., neither pa rty shall have the right to terminate this Agreement as a consequence of such casualty), (ii) an equitable adjustment shall be made to the Reimbursable Project C osts and Cons truction S chedule, as provided in the Pro ject De velopment Agreement following a Force Majeure Event (as defined in the Project Developm ent Agreement), and (iii) all insurance proceeds payable as a cons equence of the casualt y shall be applied to the cost to r epair, res tore, and complete the Improv ements. If (1) prior to t he Closing Date th e
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 22 Improvements are damaged by fire or other cas ualty and (2) Buyer elects to del iver an Early Closing Notice, then (i) the Closing shall occur on the amended Target Closing Date specified in the Early Closing Not ice and ( ii) pending the C losing Date, Buyer shall hav e the right to (a) direct continuation of the work to complete the Improvements, including repair of the damage caused by the casualty , ( b) direct t hat work to com plete the Improvements be suspended, (c) negotiate with the insur ance carrier (s) th at issued the casualty insu rance policy(ies), a nd (d) direct the use of all insurance proceeds payable with respect to the casualty.
Section 14—Miscellaneous Provisions.
14.1 Time Is of the Essence. Time is hereby expressly declared to be of the essence of this Agreement.
14.2 No Waiver. Any failure to insist upon strict performance of any of the term s and provisions of this Agreement shall not constitute or be deemed to be a waiver of any such term or provision or constitute an a mendment or wai ver of any such term or pro vision by course of performance, and each party, notwithstanding any failure to in sist upon strict performance, shall have the right th ereafter to i nsist upon t he strict performance of any and all of the terms and provisions of this Agreement.
14.3 Survival of Terms. Except as provided he rein, all of the agreements, representations, warranties and obligations of the parties set forth in this Agreement shall survive the Closing and th e con veyance of the Property t o Buye r and s hall continue thereafter to be binding upon and inure to the bene fit of the partie s he reto an d their respective permitted successors and permitted assigns.
14.4 Brokerage. Se ller and Buy er represent that no bro kers are involved in the transaction described in this Agreement and that no br okerage commissions or finder's fees are or shall be payable hereunder. If any claim is made by any third party for the payment of any commission or fee, then the party whose acts gave rise (or are alleged to have given rise) to such claim shall indemnify, defend and save harmless the other party for the full amount of such claim and all other claims, demands, actions, losses, damages, liabilities, costs and expenses (including reasonable attorney's fees) filed against or incurred by such other party as a result of such claim.
14.5 California Law/Venue . This Agreement shall be governed by a nd construe d under the laws of California. Any action commenced to enforce or interpret this Agreement shall be filed in San Diego County only.
14.6 Attorneys' Fees. If an action is commenced by either party to enforce or interpret this A greement, then the prevailing part y shall be entitled to recover fro m the othe r p arty reasonable attorney's fees in addition to any other relief that may be awarded in such action.
14.7 Interpretation of Contract. The parties acknowledge that both parties have caused this Agreement to be reviewed and approved by legal counsel of their own choice.
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 23
14.8 No Other Agreements. This Agreement, along with the agreements referenced herein and attached her eto, are the sole agreements between the parties related to the subject matter hereof. Any and all prior oral or written representations, correspondence, letters of intent and agreements are merged into and superseded by this Agreement and shall be of no force or effect. Any modifications of this Agreement must be in writing and signed by the parties hereto.
14.9 Tax-Deferred Exchan ge. Seller may desire to effect a tax-deferred exchange under Internal R evenue Code s ection 1031 in connect ion with the sa le or pu rchase o f the Property. In c onnection therewith, Buyer agrees to execute such documents as are reas onably necessary or appropriate and to otherwise cooperate with t he other to effectuate such excha nge, provided Buyer and Buyer ’s representatives shall have a reasonable opportunity to review such documents prior to Closing and Seller shall bear any and all escrow or other costs arising directly or indirectly from such exchange tr ansaction. Seller hereby indem nifies and h olds f ree and harmless Buyer from any liabili ty (includi ng the tax ramification to t he party effecting the exchange) arising by reason of performing the acts required hereby to effectuate such exchange, except insofar as any such liability is attributable to Buyer’s failure party to perform as required hereunder. Buyer shall not be requi red to take title t o or ot herwise assu me any lia bility with respect to the property to be exchanged with the Property.
14.10 Partial Invalidity. If any provision hereof is held invalid or not enforceable to its fullest extent, such provision shall be enforced to the extent permitted by law, and the validity of the remaining provisions hereof shall not be affected thereby.
14.11 Nominee/Assignee of Buyer. Buyer shall have the right to as sign all of Buyer's right, title, and in terest under this Agreement to any entity or entities, whereupon such assignee or assignees sh all succee d t o all of Bu yer's rights an d obligations he reunder; however, Selle r shall not be required to bear any additional cost and expense or incur any additio nal liability or obligation or otherwise suffer any adverse effect as a co nsequence of such as signment in excess of the costs, expenses, liabilities, obligations and other effects that would have been applicable if the Property were acquir ed by Buyer. Suc h assignment shall not rel ieve Buye r of any obligations u nder this Agreeme nt. To accommodate timely and efficient exe cution and preparation of the d ocuments to be delivere d a t the Clo sing, Buyer shall deliver to Sel ler and Escrow Holder, at least five Bus iness Da ys prior to the Target Clos ing Date , the nam e and signature block for the assignee.
14.12 Exhibits. All exhibits, if any, to this Ag reement are incorporated here in by reference.
14.13 Notices. All notic es, request s, demands or documents that are requ ired or permitted to be giv en or serv ed here under shall be in writ ing a nd delivered by (1) personal delivery, (2) Federal Exp ress (or o ther similar overnight delive ry service f urnishing pr oof of delivery), (3) registered or certified mail, postage prepaid, or (4) email, addressed as follows:
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 24
To Seller at: Lee M. Chesnut
1155 Camino Del Mar, PMB 525
Del Mar, California 92014
Telephone: 858-523-0694
Email: [email protected]
With Copy to: F. Sigmund Luther, Esq.
5333 Mission Center Road, Suite 360
San Diego, California 92108
Telephone: 619-239-0755
Email: [email protected]
To Buyer at: Attn: City Manager
City of Chula Vista
276 Fourth Avenue, Building A
Chula Vista, CA 91910
Telephone: (619) 691-5031
Email: [email protected]
With Copy to: City Attorney
City of Chula Vista
276 Fourth Avenue, Building A
Chula Vista, CA 91910
Emails:[email protected]
[email protected]
Such addresses m ay b e changed fro m time to time by the add ressee by serving no tice as heretofore provided. Service of such notice or demand shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the th ird day after the date of mailing (whether or not actually received by the ad dressee), whichever is earli er in time. Notices delivered by email shall be deemed to have been given at the time of transmissi on; however, notices sent after 5: 00 p.m., Pacific Time, shall be de emed received on the next following Business Day.
14.14 Headings of Se ctions. The hea dings of sect ions and subsections herein are inserted only for convenience and ref erence and shall i n no way de fine, lim it or describe the scope or intent of any provision of this Agreement.
14.15 Date of Performance . If the date of perf ormance of any o bligation or the expiration of any time period provided herein falls on a day other than a Business Day, then such obligation shall be due and owing and such time perio d shall expire on the first Business Day thereafter. Except as may othe rwise be set for th herein, an y performance pr ovided for herei n shall be tim ely made if completed n ot later than 5:00 p.m. on t he day of performance. If a provision of this Agreement specifies a time of day by wh ich an act shall be performed, s uch
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 25 time of day shall be determined by reference to Pacific Standard Time or Pacific Daylight Time, as may then be applicable.
14.16 Counterparts; El ectronic Si gnatures. This A greement may be e xecuted in any number of identical counterparts, any or all of which may contain the signatures of fewer than all of the parties, and all of which shall be construed together as but a single instrument. Signatures to this Agreement accomplished electronically (e.g., Docusign) and/ or transmitted by electronic transmission (e.g., fax or email) shall be valid and effective to bind the parties so signing and/or transmitting.
14.17 Conflict. If a conflict exists between the terms of this Agreement and the terms of the Project Development Agreement, then the terms of the Project Development Agreement shall prevail.
Signature Page Follows
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V11 26 Signature Page to Purchase and Sale Agreement
Seller:
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Buyer:
City of Chula Vista
By
Mary Casillas Salas, Mayor
Approved as to Form:
Glen R. Googins, City Attorney
Schedule of Exhibits
Exhibit 1 Legal Description
Exhibit 2 List of Due Diligence Documents
Exhibit 3 Grant Deed
Exhibit 4 General Assignment
Exhibit 5 Bill of Sale
Exhibit 6 Declaration under Internal Revenue Code section 1445 Exhibit 7 Reconfirmation of Representations
Exhibit 8 Library Assumption Agreement
Exhibit 9 Memorandum of Agreement
Exhibit 10 Performance Deed of Trust
Exhibit 11 Project Development Agreement
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 1
Exhibit 1
Legal Description
Real property in the City of Chula Vista, County of San Diego, State of Calif ornia, described as follows:
LOT 7 OF CHULA VISTA TRACT NO. 09-03, O TAY RANCH MILLEN IA PHAS E 2 (EASTERN URB AN CENTER), IN THE CITY O F CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO M AP THEREOF NO. 16081 , F ILED
IN THE OFFICE OF THE COU NTY RECORDER OF S AN DIEGO COUNTY, DECEMBER 28, 2015.
APN: 643-060-57-00
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 2
Exhibit 2
List of Due Diligence Documents
The Due Diligence Documents consist of the documents that can be accessed by the following link as of the Effective Date:
https://www.dropbox.com/sh/b95jrmxfion7f9a/AABETnSoZOH18MFmEvnft_HPa?dl=0
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 3
Exhibit 3
Grant Deed
RECORDING REQUESTED BY:
WHEN RECORDED RETURN AND
MAIL TAX STATEMENTS TO:
Assessor's Parcel No. 643-060-57-00
Title Order No. _____________
The undersigned declares:
Documentary Transfer Tax is $__________
Computed on full value of property conveyed, or
Computed on full value less value of liens or encumbrances remaining at time of sale.
Unincorporated area X City of Chula Vista
Grant Deed
For valua ble consideration, the receipt of which is hereb y acknowledged, LMC-Millenia Investment Company, L.P., a California limited partnership, hereby grants to City of Chula Vista all of that certain real property located in Chula Vista, San Diego County, California, and legally described in Exhibit A, attached hereto and incorporated herein by this reference.
Dated: _________, 20__
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 3
Exhibit A
Legal Description of the Property
Real property in the City of Chula Vista, County of San Diego, State of California, described as follows:
LOT 7 OF C HULA VISTA TRACT NO. 09 -03, O TAY RANCH MILLENIA PHASE 2 (EASTERN URB AN CENTE R), IN THE CITY OF C HULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFO RNIA, ACCOR DING TO MAP THEREOF NO. 16081, F ILED
IN THE OF FICE OF THE COUNTY RE CORDER OF SAN DI EGO COUNTY, DECEMBER 28, 2015.
APN: 643-060-57-00
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 3
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 San Diego
On , 20__, before me, , a not ary
public, personally appeared Lee M. Chesnut, who proved to me o n the basis of sa tisfactory evidence to be the person wh ose name is subscribed to the within instrument and acknowledged to me that he execute d the sam e in his authorized capacity, and that by his signature on the instrument the person, o r the entit y upon behalf of which t he perso n ac ted, execu ted the instrument.
I ce rtify under PENALTY O F 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)
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 4
Exhibit 4
General Assignment
This G eneral Assignment ("Assignment") dated __________, 20__, is executed by LMC-Millenia In vestment Company, L .P., a Ca lifornia limited pa rtnership ("Assignor"), in favor of City of Chula Vista ("Assignee").
Assignor is the owner of that certain land legally described as:
LOT 7 OF CHULA VISTA TRA CT NO. 09-03, OTAY RANCH MILLENIA PHASE 2 (EASTERN URBAN CENTER), IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP T HEREOF NO. 16081,
FILED IN THE OFF ICE OF THE COUNTY RECOR DER OF SAN DIEGO COUNTY, DECEMBER 28, 2015. (APN: 643-060-57-00)
Such la nd has been im proved with buildings a nd other im provements (co llectively “the Real Property”). The Real Property is concurrently being c onveyed by As signor to Assi gnee pursuant to a grant deed .
For good and valu able consideration, the receipt and suffi ciency of whic h are hereby acknowledged, Assignor h ereby grants, assigns, transfers, conveys and d elivers to Assignee, without warranty, all of Assignor's right, tit le, interest, benefits and privileges, if any, in and to the following:
1. All government al enti tlements, permissions, environmental cle arances, rights, licenses and permits that relate to all or any of the Real Property.
2. All general i ntangibles relating to the de velopment or use of the Real Proper ty, including a ll gua ranties and warranti es related to improvements con structed on the Real Property.
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 5
Exhibit 5
Bill of Sale
This Bill of Sale dated __________, is executed by LMC-Millenia Investment Company, L.P., a California limited partnership("Seller"), in favor of City of Chula Vista ("Buyer").
A. Seller and Buyer entered into that certain Purchase and Sale Agreement dated as of __________ ("the Pur chase Agreement "), respectin g the sale of the re al property that includes the land legally described as follows:
LOT 7 OF CHULA VISTA TRACT NO. 09 -03, OTAY RANCH MILLENIA PHASE 2 (EASTERN URBAN CENTER), IN THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP T HEREOF NO. 1 6081,
FILED IN THE OFF ICE OF THE COUNTY RECOR DER OF SAN DIEGO COUNTY, DECEMBER 28, 2015. (APN: 643-060-57-00)
B. Under the Purchase Agreement, Seller is obligated to transfer to Buyer any and all of Seller's right, title and interest in and to all equip ment, appliances, tools, machinery, supplies, building materials and other personal property of eve ry kind and character owned by Seller and attached t o, appurtenan t to, located in o r u sed in c onnection with the operation of the Improvements (as defined in the Purchase Agreement), if any (collectively, "the Person al Property").
For good and valuable c onsideration, the receipt and s ufficiency o f w hich a re hereby acknowledged, Sel ler does hereby absolutely and unconditionally give, gran t, bargain, sell, transfer, set ov er, assign, convey, release, confirm and deliv er to Buyer, without warranty express or implied, all of the Personal Property.
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 6
Exhibit 6
Declaration under Internal Revenue Code Section 1445
The undersigned hereby declares:
1. LMC-Millenia Investment Company, L.P. is a limited partnership organized and in good standing under the laws of California.
2. The taxpayer identification number for LMC-Millenia Investment Company, L.P. is 81-0762246.
3. LMC-Millenia Investment Company, L. P. is not a foreign person, as defined in Internal Revenue Code of the United States.
4. LMC-Millenia Investment Company, L.P. is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii) of the Internal Revenue Code of the United States.
5. The office addre ss o f LMC-Millenia Inves tment Company, L.P. is 1155 Camino Del Mar, PMB 525, Del Mar, California 92014.
I declare und er pe nalty o f perjury tha t the foregoing is tr ue and c orrect a nd tha t t his declaration is executed ____________, 20__, at San Diego, California.
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 7
Exhibit 7
Reconfirmation of Representations
This Reconfirmation, d ated _____________, 20__, is ex ecuted b y LMC-Millenia Investment Company, L.P., a California limited partnership ("Seller"), for the benefit of City of Chula Vista ("Buyer"). Pu rsuant to that certain Purchase and Sale Agreement ("the Purchase Agreement") between B uyer and Seller d ated _________, 2022, Seller hereby confirms tha t during the period from the Eff ective Date to the Closing Date, nothing has occurred and Seller has not become aware of any facts that, to Se ller's actual knowledge, cause any of the Seller's representations and warranties contained in the Purchase Agreement to be materially untrue, and, to Seller's actual knowledge, all of the representations and wa rranties contained in the Purchase Agreement remain true and are reconfirmed as of the Closing Date except __________. Defined (capitalized) terms used in thi s Reconfirmation shall have the same meanings as defined in the Purchase Agreement.
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 8
Exhibit 8
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
LMC-Millenia Investment Company, L.P.
1155 Camino Del Mar, PMB 525
Del Mar, California 92014
Order No.:
_____________________________________________________________________________
Agreement Regarding Assumption of Obligation to Construct Library
This Agreement, dated __________, 20__, is executed by City of Chula Vista ("City"), and LMC-Millenia Investment Company, L.P., a California limited partnership ("LMC"), with reference to the following facts:
A. McMILLIN OTAY RANCH, LLC, a Delawa re limited liability company (“McMillin”) and City entered into the “Development Agreement by and between the City of Chula Vista and McMillin Otay Ranch LLC,” recorded October 27, 2009 as Document No. 2009-0595116 of Official Records of the San Diego Coun ty Recorder (the “Development Agreement”). Th e Development Agreement relates to what was then called the “EUC” project and is now known as “Millenia.”
B. By an assignment, memorandum and confirmations recorded February 22, 2011 as Document No. 2011-0098720 of Off icial Records of the San Diego Count y Recorder, McMillin assigned its rights and transferred its obligations under t he Development Agreemen t to SLF IV/McMILLIN MILLENIA JV, LLC, a Delaware limited liability company (“SLFMM”). SLFMM changed its name to SLF IV – Millenia, LLC (“SLF IV”) by a mendments filed in Delaware on March 4, 2015, and in California on March 9, 2015.
C. Section 4.3.1 and Exhibit D of the Developmen t Agreement impose c ertain obligations on Principal Master Developer relating t o a librar y in EUC (the “ Library Obligations”).
D. By that certain Agreement Regarding Consent to Partial Assignment and Transfer of Development Agreement recorded February 16, 2016, as Document No. 2016-0064898 of Official Records of San Diego County, California, LMC assumed the Library Obligations.
E. LMC wishes to sell to a City the real property described in Exhibit A attached hereto (“Lot 7”), which property is subject to the Library Obligations.
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 8
F. Section 10.2.2 of the Development Agreement a llows, on certain conditions, the assignment of rights and interests and the transfer or delegation of “some or all” of the obligations of “Master Developer” thereunder to another “Master Developer.” This Agreement is intended to accomplish that assignment and transfer/delegation as to Lot 7 and the Library Obligations.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Assumption. City hereby accepts all of Principal Master Developer’s rights and assumes all of SLF IV’s duties pursuant to the Deve lopment Agreement as (an d only as) those rights and duties relate to LMC’s obligations with respect to Lot 7 and the Library Obligations. City shall fulfill the role of the “M aster Developer” under the Development Agreement with regard to Lot 7 and the Library Obligations.
2. Release. City hereb y rel eases LMC from all of LMC’s duties pursuant to t he Development Agreement as (and only as) those duties relate to Lot 7 and the Library Obligations.
3. Status. Solely as to Lot 7, City is hereby designated the “Master Developer” under the Development Agreement.
4. Interpretation. Except as separate ly defined herein, all defined terms used in this Consent shall have the same meanings as in the Development Agreement. This Consent effectuates the Development Agreement and thus does not constitute, and shall not be deemed to constitute, an amendment thereto.
Signature Page Follows
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 8
Signature Page to Agreement Regarding Assumption of Obligation to Construct Library
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
City of Chula Vista
By
Print Name:
Title:
Schedule of Exhibits
Exhibit A—Legal Description
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 8
Exhibit A
Legal Description of the Property
Real property in the City of Chula Vist a, County of San Diego, State of California, described as follows:
LOT 7 OF CHUL A VISTA TRACT NO. 09 -03, OTAY RANCH MILLENIA PH ASE 2 (EASTERN URBAN CENT ER), I N THE CITY OF CHULA VISTA , COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 16081, FILED
IN THE OFF ICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 28, 2015.
APN: 643-060-57-00
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 9 Exhibit 9
RECORDING REQUESTED BY:
Chicago Title Company
WHEN RECORDED RETURN TO:
City Attorney
City of Chula Vista
276 Fourth Avenue, Building A
Chula Vista, CA 91910
Assessor's Parcel No. APN: 643-060-57-00
Title Order No.__________________
The undersigned declares:
Documentary Transfer Tax is $0.00—This documen t is recorded solely to impart constructive notice; no transfer is made by the recording of this document.
X Computed on full value of property conveyed, or
Computed on full valu e less value of liens or encumbrances remaining at time of sale.
Unincorporated area X City of Chula Vista
Memorandum of Agreement
By recording this Memorandum, LMC-Millenia Investment Company, L.P., a C alifornia limited partnership (“Seller”), being the owner of the real property (“the Property”) in the City of Chula Vista, County of San Diego, State of California, legally described in Exhibit A attached hereto, provides constructive notice that Seller and City of Chula Vista (“Buyer”), have entered into a written agreement pursuant to the terms and subject to the conditions thereof Seller agrees to sell and Buyer agrees to buy the Property.
Dated: _____________, 2023
LMC-Millenia Investment Company, L.P.
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 9 Exhibit A
Legal Description of the Property
LOT 7 OF CHULA VISTA TRAC T NO. 09 -03, OTAY RANCH MILLENIA PHASE 2 (EASTERN URBAN CENTER), IN THE CITY OF CHULA V ISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP T HEREOF NO. 16 081,
FILED IN THE OFF ICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 28, 2015. (APN: 643-060-57-00)
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 9
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 San Diego
On , 20__, before me, , a notary public, perso nally appeared , wh o proved t o me on the basis o f satisfactory evidence to be the pers on(s) whose name(s) is/ are subscribed to the wit hin instrument an d acknowledged to me that he/she/they ex ecuted the same in his/her/their authorized cap acity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon b ehalf of which the person(s) acted, executed the instrument.
I c ertify under PENALTY OF PERJURY under th e laws o f the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
Exhibit 10
Performance Deed of Trust
RECORDING REQUESTED BY:
Chicago Title Company
WHEN RECORDED RETURN TO:
City Attorney
City of Chula Vista
276 Fourth Avenue, Building A
Chula Vista, CA 91910
Assessor's Parcel No. APN: 643-060-57-00
Title Order No.__________________
_____________________________________________________________________________
Deed of Trust
This Deed of Trust is made __________, 2023, by LMC-Millenia Investment Company, L.P., a California limited partnersh ip, herein called T RUSTOR, whose address is 1155 Camino D el Mar, PMB 525, Del Mar, California 92014, Chicago Title Company, herein called TRUSTEE, and City of Chula Vista, herein called BENEFICIARY.
Witnesseth that T rustor IRREVOCABLY GRANTS, TRANSFERS AN D AS SIGNS TO TRUSTEE IN TRUST, WITH POWER OF SALE, that property ("the Property") in the City of Chula Vista, County of San Diego, State of California, legally described in Exhibit A attached hereto.
TOGETHER WITH the rents, issues and profit s thereof, S UBJECT, HOWEVER, to the r ight, power and authority given to and conferred upon Beneficiary by Paragraph (10) of the provisions incorporated herein by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing:
1. Performance of each agreement of Trustor herein contained.
2. Performance of Trustor’s o bligations that certain Purchase and S ale Agreem ent dated ________________, 2022 (“the Purchase Agreement”), between Trustor, as S eller, and Beneficiary, as Buyer , by which, among other things, Seller agreed to sell and Buyer agreed to buy the Property.
To Protect the Security of This Deed of Trust, Trustor Agrees:
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
(1) To keep the Property in good condition and repair, and to pay when due all claims for labor pe rformed and materials furnished there for, to comply with all laws aff ecting the Property or re quiring any alterations or improvements to be ma de there on, not to com mit or permit waste thereo f, not to commit, suffer or permit any act upon the Property in vi olation of law.
(2) To provide main tain and deliver to Beneficiary the bonds and in surance policies required to be delivered under the Purchase Agreement.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights o r po wers of Beneficiary o r Trustee and to pay all costs a nd expenses including cost of evidence of title a nd attorney's fees in a reasonable sum in any such action or proceeding in which Beneficiary or Trustee may appear and in any suit brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and assessments affecting the Property, in cluding assessments on appurtenant water stock, when due, all encumbrance s, charges and liens, with interest, on the Property or any part thereof, whic h appear to be prior or superior hereto, all costs, fees and expenses of this Tru st. If Trustor fails to make any payment or do any act as herein provided, then Beneficiary, without the obligation to do so, without notice to or demand upon Trustor, and without releasing Trustor from any obligation hereof, may make such payment or do s uch act in such manner a nd to such extent as e ither may deem necessary t o protect the security he reof, Be neficiary is authorized to en ter upon the Pro perty for such purposes, to appear in and def end any acti on or proceeding purporting to affect the securit y hereof or the rights o r powers of Beneficiar y, to pay, purchase, conte st or compromise any encumbrance, charge or lien that in Beneficiary's judgment appears to be prior or superior hereto, and, i n exercis ing any such pow ers, to p ay necessary expenses, e mploy counsel and pay reasonable fees incurred by Beneficiary.
(5) To pay immediately and witho ut demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maxi mum allowed by law at the time when said statement is demanded.
(6) That any proceeds of casualty insur ance or award of damages in connection with any condemnation for public use of or injury to the Property or any part thereof shall be used and applied as provided in the Purchase Agreement.
(7) That by accepting payment of any sum secured hereby after it s due date, Beneficiary does not waive Beneficiary's rights either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
(8) That at any time or fr om t ime to time, without liab ility therefor and with out notice, upon written request of Beneficiary and presentation of this Deed for endorsement and without affecting the person al liability of any person for payment of the indebtedness secur ed
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
hereby, Trustee may reconvey any part of the Property, consent to the making of any map or plot thereof, join i n granting any easement t hereon, o r j oin in an y ext ension agreemen t or any agreement subordinating the lien or charge hereof.
(9) That upon written r equest of Beneficiary stating that all obligations secured hereby have been fully performed and upon surr ender of this Deed to Trustee for cancellation and retention and u pon payment of i ts fees, Trustee shal l reconvey, without warranty, th e property then held hereunder. The recitals in such reconveyance o f any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "The person or persons legally entitled thereto."
(10) That Trustor hereby gives to and confers upon Beneficiary the right , power and authority, during the continuance of thes e Trusts, to collect the rents, issues and profits of the Property, r eserving unto Trustor the right, p rior to any default by Trustor i n payment o f any indebtedness secured hereby or in performance of an y agreement hereunder, to collect and retain such ren ts, issues and profits as they bec ome due and payable. Upon any s uch default, Beneficiary may at any t ime without notice, either in pe rson, by ag ent, or by a r eceiver to be appointed by a court, and wit hout regard to the adequacy of any security for the i ndebtedness hereby secure d, enter upon a nd tak e possession of the Property or any part thereof, in Beneficiary's ow n name s ue for or ot herwise col lect such rent s, issues and profits, including those past due and unpaid, and apply the same, less costs and e xpenses of operation and collection, including reasonable attorney's fees, upo n an y indebtedness secure d hereby, an d in such o rder as B eneficiary may d etermine. The entering upon and taking possession o f t he Property, the collection of such rents, issues and profits and the appli cation thereof as aforesaid, shall not cu re or waive any default or notice of default here under or invalidate any act don e pursuant to such notice.
(11) That upon default by Trustor in the performance of any obligation secured hereby, Beneficiary may cause Truste e t o e xercise the power of sale contained he rein by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold the Property, which notice Trustee shall cause to be filed fo r record. B eneficiary also shal l deposit w ith T rustee this Deed, and all documents evide ncing expenditures secured h ereby. After the lapse of such time as may then be requi red by law following the recordation of said not ice of default and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in said notice of sale, either as a w hole or in separate parcels and in such order as it may determine at publ ic au ction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trus tee may postpone sale of all or any portion of the Property by public ann ouncement at such time and place of sale, and fr om time to time thereafte r may postpone such s ale by public announ cement at t he ti me fixed by the preceding postponement Trustee shall deliver to such purchaser its deed conveying the property so sold, but wi thout any covenant or warranty, express or impli ed. The recitals in such deed of any matters or facts shall be co nclusive pr oof o f the truthfuln ess th ereof. Any person, including Tr ustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof,
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
not then repa id, with accrued interest at the amount allowed by law in effect at the d ate hereof, all other sums then secured h ereby, and the remainder, if an y, to the person or person s legally entitled thereto.
(12) Beneficiary may from time to time, by instrument i n writing, substitute a successor or successors to any Tru stee named here in or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where the Property is situated, s hall be conclusive proof of proper substitution of such succes sor T rustee or Trustees, who shall, witho ut conveyanc e fr om the Trustee predecessor, succeed to al l i ts title, estate, rights, powers and duties. Said instrument must contain the nam e of the or iginal Trustor, Trustee and Beneficia ry hereunder, the book an d page where this Deed is recorded and the name and address of the new Trustee.
(13) That this D eed applies to, inures to th e benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, s uccessors and assigns. Whenever the context so requires, the masculine gender includes the femin ine and/or neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other De ed of Trust or of any action or proce eding in which Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
(15) If at any time without Beneficiary's written consent, which consent may be withheld in Beneficiary's sole discretion without a standard of reasonableness, (1) the Property, any part of the Property, or any undivided interest in the Property (i) is sold, transferred or otherwise conveyed by Trustor either voluntarily or by operation of law or (ii) becomes the subject of a con tract or a grant of option for the sale, transfer or conveyance thereof (other than the Purchase Agreement) or (2) the Property is o r becomes the subject of a lease creating a lea sehold interest in a ll of the Property without the lessee under such lease ta king physi cal possession of the Prope rty, then Beneficiary will have the option to declare, without giving notice or making a demand of any kind, that the entire indebtedness secured by this Deed of Trust is immediately due.
(16) The undersigned Trustor requests that a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to Trustor at Trustor's address hereinbefore set forth.
(17) If a conflic t e xists b etween the provisions of th is Dee d of Trust and the provisions of the Purchase Agreement, t he provisions of the P urchase Agreement shall prevail.
Signature Page Follows
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
Signature Page to Deed of Trust
LMC-Millenia Investment Company, L.P.,
a California limited partnership
By LMC-Millenia GP, LLC
a Delaware limited liability company
By
Lee M. Chesnut, Manager
Schedule of Exhibits
Exhibit A—Legal Description
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
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 San Diego
On , 2023, before me, , a notar y public, personally appeared Lee M. Ches nut, who pro ved 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 aut horized capacity(ies), and that by his/her/their signature(s) on the instrumen t the person(s), or the entity u pon behalf of wh ich the p erson(s) acted, executed the instrument.
I c ertify under PENALTY OF PERJURY under the laws of t he State of California th at the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 10
Exhibit A—Legal Description
Real property in the City of Chula Vista, County of San Diego, State of Calif ornia, described as follows:
LOT 7 OF CHULA VISTA TRACT NO. 09 -03, OTAY RANC H MILLENIA P HASE 2 (EASTERN URB AN CEN TER), IN THE CIT Y OF CH ULA VISTA , COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO M AP THEREOF NO. 16081, F ILED
IN THE OFFICE OF THE COU NTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 28, 2015.
APN: 643-060-57-00
Chesnut\Millenia Lot 7 Sale 2022\Purchase Agreement V10 Exhibit 11 Exhibit 11
Project Development Agreement