PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Joint Escrow Instructions (this "Agreement") is made as of September _ 2023 (the "Effective Date"), between Century Sierra, LLC, a California limited liability company ("Seller"), and the City of Fontana, a public agency organized and operated under the laws of the State of California ("Buyer"). Buyer and Seller may sometimes collectively be referred herein as the "parties," and hereby agree as follows:
ARTICLE 1. BACKGROUND
Buyer is a public municipal corporation. Buyer has expressed its desire to acquire the Property (as defined below) for public use.
1.2 Buyer intends to evaluate and purchase the Property for use of a site for future housing for the homeless community, which is a public purpose and use. Prior to the purchase of the Property, Buyer will complete its Due Diligence.
1.3 Pursuant to Buyer's police powers and statutory authority under California Code of Civil Procedure Section 1240.010 et al., Buyer has the authority to acquire real property by condemnation for any lawful public purposes. In lieu of condemnation, Buyer seeks to voluntarily purchase the Property from Seller, upon the terms and conditions set forth in this Agreement. Buyer acknowledges that Seller may avail itself of Section 1033 of the Internal Revenue Code. Seller acknowledges and agrees that neither Buyer nor any of Buyer's officers, employees, agents, or representatives has made any representation or warranty, and Buyer specifically disclaims any warranty, with respect to the tax treatment of the transactions contemplated herein and any tax benefits which may be available to Seller.
1.4 Buyer further confirms that if the transaction contemplated under this Agreement fails to close, Buyer will exercise its authority under California Code of Civil Procedure Section 1240.010 et al. and initiate an action in eminent domain to acquire the Property, subject to complying with any and all appropriate notices, hearings, and other procedural prerequisites, for the public purpose and use described in Sections 1.1 and 1.2, above.
ARTICLE 2. AGREEMENT OF SALE.
Subject to and on the terms and conditions of this Agreement, Seller shall sell to Buyer and Buyer shall purchase from Seller all of the following (collectively, the "Property"):
2.1 Land. That certain improved real property located at 17133 Valley Blvd. in the City of Fontana, San Bernardino County, California 92335 (APN 0194-351-15-0000), which is more particularly described in Exhibit A, together with (a) any privileges, rights, easements and appurtenances belonging to the real property, including without limitation all minerals, oil, gas and other hydrocarbon substances on and under the real property, (b) any development rights, air rights, water, water rights and water stock relating to the real property, and (c) any right, title and interest of Seller in and to any streets, alleys, passages, other easements and other rights-of-way or appurtenances included in, adjacent to or used in connection with such real property (collectively, the "Land"); {10841816.11)
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2.2 Improvements. Any and all structures, systems, facilities, fixtures, fences and parking areas located on the Land and any and all machinery, equipment, apparatus and appliances owned by Seller and used exclusively in connection with the operation or occupancy of the Land (such as heating and air conditioning systems and facilities used to provide utility services, refrigeration, ventilation, garbage disposa. or other amenities on the Land) and other certain improvements located upon the Land, including, but not limited to, the Hotel building commonly known as the "SureStay Hotel By Best Western Fontana" (collectively, the "Improvements").
The Land and the Improvements are sometimes collectively referred to in this Agreement as the "Property"
Personal Property. All of Seller's right, title and interest in and to the personal property owned by Seller and located within or used in connection with the Property as described in the Personal Property Inventory attached hereto as Exhibit B (collectively, the "Personal Property").
Service Contracts. Those Service Contracts (defined in Section 5.7) which Buyer has elected to assume in writing during the Due Diligence Period (defined below); and Other Assets. To the extent owned by Seller, all tangible and intangible assets of any nature relating to the Property or the Personal Property, including without limitation (a) any warranties upon the Improvements or Personal Property, to the full extent such warranties are assignable, (b) copies of any plans, specifications, engineering drawings and prints relating to the construction of the Improvements to the extent in Seller's actual possession, (c) any license agreements, copyrights, logos, designs, trademarks, trade names, service marks and all goodwill associated with the Property, provided that in no event shall Buyer have any right or claim to use any copyrights, logos, designs, trademarks, trade names, service marks and other similar rights of any franchisor of Seller; (d) all other intellectual or intangible property used by Seller in connection with the Property,; and (e) all claims and causes of action arising out of or in connection with the Property. Notwithstanding the foregoing, in no event shall the Property include (i) any appraisals or other economic evaluations of, or projections with respect to, all or any portion of the Property, including, without limitation, budgets prepared by or on behalf of Seller or any affiliate of Seller, (ii) any documents, materials or information which are subject to attorney/client, work product or similar privilege, which constitute attorney communications with respect to the Property and/or Seller, or which are subject to a confidentiality agreement, and (iii) any trade name, mark or other identifying material that includes the name of Seller or any derivative thereof.
ARTICLE 3. PURCHASE PRICE.
3.1 Amount. The purchase price (the "Purchase Price") for the Property shall be Fourteen Million Five Hundred Thousand and 00/100 Dollars ($14,500,000.00).
3.2 Deposit: Purchase Price: Opening of Escrow. Within three (3) days after the Opening of Escrow (defined below), Buyer shall deposit One Hundred Thousand and 00/100 Dollars ($100,000.00) into Escrow (as defined below) with First American Title Insurance Company, a California corporation, Attn: Sheri Keene, [email protected], (858) 410-1305 ("Escrow Holder") into an interest bearing account on behalf of Buyer (the "Initial Deposit"). Upon delivery to Seller of Buyer's Approval Notice (as defined in Section 4.3 herein), Buyer shall deposit an additional Four Hundred Thousand and 00/100 Dollars ($400,000.00) into Escrow with Escrow Holder into the same interest bearing account on behalf of Buyer (the "Additional Deposit). The Initial Deposit and Additional Deposit shall collectively be referred to as the "Deposit." Upon Buyer's delivery to Seller of Buyer's Approval Notice, Escrow shall immediately release the Deposit to Seller and the Deposit shall be deemed non-refundable to Buyer under all circumstances except in the event Escrow fails to close due to a Seller breach, and/or as otherwise expressly {10841816.11} 2
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provided in this Agreement. The failure of Buyer to make the Deposit within the time frames specified in this Section shall be deemed a material breach of this Agreement and Seller may terminate this Agreement as a result thereof. On or before the Closing Date, Buyer shall deposit into Escrow an amount equal to Fourteen Million and 00/100 Dollars [i.e., the Purchase Price less the amount of the Deposit] ("Closing Amount"), plus or minus any applicable prorations and allocation of closing costs described below. The Deposit and Purchase Price shall be made by wire transfer of federal funds, cashiers' check or in another immediately available form. As used herein, "Opening of Escrow" means the date on which executed counterparts of this Agreement have been delivered to Escrow Holder by Buyer and Seller.
3.3 Independent Consideration. Notwithstanding anything to the contrary contained in this Agreement, the amount of One Hundred and 00/100 Dollars ($100.00) of the Deposit shall be nonrefundable under all circumstances, and shall be retained by or delivered to Seller in addition to and independent of any other consideration or payment provided in this Agreement the "Independent Consideration"). The Independent Consideration shall be deemed consideration for Seller's grant to Buyer of Buyer's rights under this Agreement.
ARTICLE 4. DUE DILIGENCE.
4.1 Due Diligence Period; Inspection and Access
4.1.1 Due Diligence Period. The "Due Diligence Period" means the period beginning on the Opening of Escrow and ending at 5:00 p.m. (PST) on the date that is sixty (60) days following the Opening of Escrow.
4.1.2 Access to Information and the Property. Buyer shall conduct its investigation of the Property during the Due Diligence Period at no cost to Seller. This investigation ("Due Diligence Investigation"') may include, at Buyer's option: a non-invasive physical inspection of the Land and all Improvements thereon, including non-invasive soil, geological and other tests, engineering evaluations of the mechanical, electrical, HVAC and other systems in the Improvements and review of the Plans; review of all governmental matters affecting the Property, including zoning, environmental and building permit and occupancy matters; review and verification of all financial and other information previously provided by Seller relating to the operation of the Property; review of the condition of the Property, including the building, structural system and roof inspection; and review of such other matters pertaining to an investment in the Property as Buyer deems advisable. Notwithstanding anything to the contrary contained herein, in the event that (a) Buyer obtains a current Phase I Environmental Site Assessment ("Current Phase I Report"), (b) the Current Phase I Report identifies a recognized environmental condition, historical recognized environmental condition or controlled recognized environmental condition and (c) the Current Phase I Report recommends additional invasive testing, including (i) soil borings, test pits, and groundwater testing, (ii) indoor air quality sampling and analysis, (iii) biological sampling or analysis, whether of air quality samples or otherwise, or (iv) particulate analysis of an indoor air quality samples (collectively, "Phase II Testing"), Buyer shall be permitted in its sole and reasonable discretion to conduct such Phase Il Testing, subject, however to the terms and conditions of this Section 4.1.2. Prior to commencing the Phase II Testing, Buyer shall deliver to Seller for Seller's reasonable approval a written draft scope of services ("Scope") from a Phase II Testing consultant selected from Buyer's list of approved contractors, setting forth the proposed scope of the Phase II Testing, which Scope shall in all events be consistent with the recommendations set forth in the Current Phase I Report. Once approved in writing by Seller, Buyer shall not amend the Scope without first obtaining Seller's prior written approval of such amendment, which shall not be unreasonably withheld, conditioned, or delayed. The foregoing notwithstanding, to the extent that Buyer performs any Phase II Testing, Buyer agrees (and will require any and all of its employees, agents, consultants and contractors to agree) not to disclose the results of any such Phase II Testing to Seller or any other governmental agency with jurisdiction or any other person or entity without Seller's written {10841816.11) 3
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authorization, except as required by applicable laws (including Environmental Laws), provided that Buyer may disclose such results to its employees, members, investors, consultants, attorneys, lenders or other agents or contractors who have a reasonable "need to know" the results of such testing, without Seller's further consent. The inspections shall not damage the Property in any respect and shall be conducted in accordance with standards customarily employed in the industry and in compliance with all applicable governmental laws, rules and regulations. Buyer shall not permit any mechanic's or materialmen's liens or any other liens to attach to the Property by reason of the performance of any work or the purchase of any materials by Buyer or any of the other Buyer Parties in connection with any inspections or entry onto the Property. Buyer and its representatives shall have the right of access to the Property during reasonable business hours to conduct its investigation of the physical condition of the Property upon not less than twenty-four (24) hours prior notice to Seller. Seller shall cooperate in good faith with Buyer in its due diligence activities and provide access to the Property, its records, or provide information so long as it is within Seller's control.
4.1.3 Insurance. Buyer, its engineers, architects, employees, contractors, consultants, lenders, representatives and agents (collectively, the "Buyer Parties") shall maintain commercial liability insurance policies (in an amount not less than $1,000,000 per occurrence and $2,000,000 in the aggregate) insuring against claims arising as a result of the inspection of the Property, including against personal injury and property damage, with insurance companies authorized to issue insurance in the state in which the Real Property is located. Prior to entry onto the Property, Buyer shall deliver to Seller a certificate of insurance evidencing the existence of the aforesaid policies and naming Seller and Seller's management company as additional insureds. Seller acknowledges Buyer is a public agency and agrees Buyer may satisfy its insurance requirements via self-insurance or a risk pool, which Buyer represents to Seller is currently in place and sufficient to satisfy the insurance requirements set forth in this Section 4.1.3. Based on the foregoing representation, Seller shall accept Buyer's qualified self-insurance in lieu of the insurance policies set forth in this Section 4.1.3.
Indemnity. Buyer, at its sole cost and expense, and to the fullest extent permitted by law, hereby agrees to and shall indemnify, defend, protect and hold harmless Seller and Seller's officers, members, managers, agents and employees (collectively, "Seller Parties") from and against any and all costs, damages, liabilities, losses, expenses, liens or claims of any kind whatsoever (including, without limitation, reasonable attorneys' fees and costs) arising out of or relating to (i) a breach of Section 4.1.2 of this Agreement, and/or (ii) the inspections or any other entry onto the Property by Buyer or any of the other Buyer Parties or anyone purporting to act on behalf of any of the foregoing (including, without limitation, mechanics' liens, damage to the Property, or injury to persons or property resulting from such activities in connection therewith); provided, however, in no event shall Buyer indemnify Seller from any of the foregoing arising due to the gross negligence or willful misconduct of Seller or its employees, agents, affiliates or any other Seller Parties, or for existing conditions that are merely discovered by Buyer or any of the other Buyer Parties and are not exacerbated thereby. The foregoing indemnity shall survive Closing or any termination of this Agreement.
Delivery of Property Documents. Within 5 business days after the Effective Date, Seller shall deliver to Buyer, at Seller's expense, the documents described in the remaining subsections of this Section 4.2 (collectively, the "Property Documents") to the extent in Seller's actual possession and control. Notwithstanding anything to the contrary set forth herein, Buyer acknowledges and agrees that it shall have no right to review or inspect any of following: (a) reports prepared by or for Seller, its property manager or any of their respective affiliates in connection with the proposed sale of the Property, (b) communications between Seller, its property manager or any of their respective affiliates and their attorneys and accountants, (c) appraisals, financial assessments or other financial evaluations of the Property prepared by or for Seller, its property manager or any of their respective affiliates, (d) other correspondence, memoranda and documents prepared or intended solely for internal use of Seller, its property manager or {10841816.11} 4
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any of their respective affiliates, (e) any documents, reports or other information that is subject to any confidentiality agreement or contractual or legal restriction on disclosure, and (f) any information that was derived prior to the date that Seller acquired the Property. The Property Materials shall not be used by Buyer or the other Buyer Parties (as hereinafter defined) for any purpose except for Buyer's diligence in connection with the proposed acquisition of the Property. Upon any termination of this Agreement, Buyer shall (y) immediately return all Property Materials (and all reproductions thereof) to Seller, and (z) destroy all information that Buyer or Buyer Parties obtain through reviewing the Property Documents.
4.2.1 Plans. Copies of any as-built plans and specifications for the Improvements, including without limitation the plans and specifications for and a complete description of all existing renovations and improvements to the Property and all rentable space therein, and as-built drawings for all underground utilities (collectively, the "Plans");
4.2.2 Soils Report. Any soils report on the Land prepared at Seller's request or in the possession or control of Seller, including (if available) a report on compliance with any soils work recommended to be done prior to construction of the Improvements;
4.2.3 Engineers' Reports. Any structural, mechanical, environmental or geological reports concerning the Property which have been prepared at Seller's request or which are within Seller's possession or control;
4.2.4 Operating Statements: Tax Bills. Copies of operating statements for the Property certified by Seller including an itemization of income and expenses and copies of all real property tax bills for the Property for such periods;
4.2.5 Licenses. Etc. Copies of any licenses, permits or certificates required by governmental authorities in connection with construction or occupancy of the Improvements, including, without limitation, building permits, certificates of completion, certificates of occupancy and environmental permits and licenses;
4.2.6 Inspection Reports. Copies of any written reports received by Seller within three (3) years prior to the Effective Date from Seller's insurance companies, any governmental agency or any other person or entity, which requires or demands correction of any condition, or requests modification in or termination of any uses of the Property.
4.2.7 Warranties/Roof Inspections/HVAC Inspections. Copies of any and all guarantees or warranties and other rights given to Seller in connection with the construction, maintenance, repair or remodeling of the Improvements, periodic inspections, or the purchase of any of the Personal Property.
4.2.8 Insurance Certificates. Copies of certificates evidencing the insurance carried by Seller of the Property.
4.2.9 Other Material Documents. Any material agreements, waivers, notices, and applications with respect to the Property relating to transactions with taxing authorities, governmental agencies, utilities, vendors and others with whom Buyer may be dealing from and after the Closing Date.
4.2.10 Natural Hazards Disclosure Report. Section 1103, et seq. of the California Civil Code provides that certain sellers should make certain disclosures if a property lies within the following latural hazard areas or zones: (i) a special flood hazard area designated by the Federal Emergenci Management Agency; (ii) an area of potential flooding; (iii) a very high fire hazard severity zone; (iv) a {10841816.11) 5
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wild land area that may contain substantial forest fire risks and hazards; (v) an earthquake fault or special studies zone; or (vi) a seismic hazard zone. If the Real Property lies within the natural hazard zone, Escrow Holder may employ the services of a disclosure source ("Natural Hazard Expert") to examine the maps and other information specifically made available to the public by government agencies and to report the results of its examination to Buyer in writing as a condition to be satisfied during the Due Diligence Period.
Buyer hereby waives the requirements of Section 1103, et seq. of the California Civil Code if and to the extent that said requirements apply to Seller, and acknowledges and agrees that the written report prepared by the Natural Hazard Expert regarding the results of its examination will fully and completely discharge Seller from any disclosure obligations with respect to said provisions if and to the extent they apply to Seller. Furthermore, Buyer acknowledges and agrees that Section 1103.4 of the California Civil Code regarding the non-liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply, and the Natural Hazard Expert shall be deemed to be an expert dealing with matters within the scope of its expertise with respect to the examination and written report regarding the natural hazards referred to above.
4.3 Approval/Disapproval of Due Diligence Investigations. Buyer shall approve or disapprove the results of Buyer's Due Diligence Investigation, in the exercise of Buyer's sole discretion, by written notice delivered to Seller no later than the expiration of the Due Diligence Period, time being of the essence.
If Buyer disapproves of the Due Diligence Investigation and delivers notice thereof to Seller on or before the expiration of the Due Diligence Period ("Buyer's Disapproval Notice"), this Agreement shall terminate. If Buyer elects to approve the Due Diligence Investigations and delivers notice thereof to Seller on or before the expiration of the Due Diligence Period ("Buyer's Approval Notice"), Buyer shall be deemed to have approved the Property and elected to proceed with the transactions contemplated by this Agreement. If Buyer fails to deliver either Buyer's Disapproval Notice or Buyer's Approval Notice on or before the expiration of the Due Diligence Period, Buyer shall be deemed to have elected to terminate this Agreement. If Buyer elects to terminate this Agreement by delivering Buyer's Disapproval Notice or is otherwise deemed to have elected to terminate this Agreement, the Deposit (less the Independent Consideration) shall be returned to Buyer, Buyer shall return to Seller all of the Property Documents previously delivered by Seller to Buyer within 5 business days of such termination and neither party shall thereafter have any further obligations or liabilities under this Agreement except for those obligations and liabilities expressly intended to survive.
4.4 Title Review.
4.4.1 Title Report and Survey. Following the Opening of Escrow, Buyer shall cause to be ordered a preliminary title report or commitment for title insurance (the "Preliminary Title Report"), dated no earlier than ten (10) days before the Effective Date, covering the Property and issued by [First American Title Insurance Company] (the "Title Company"), together with a legible copy of (or hyperlink to) each document, map and survey referred to in the Preliminary Title Report. Buyer, at Buyer's sole cost, may obtain an as-built survey of the Property (the "Survey") prepared by a certified land surveyor in accordance with the most recent American Land Title Association standards, certified by such surveyor to Buyer and the Title Company in a form acceptable to the Title Company for the purpose of deleting any survey exception from the Title Policy described in Section 4.1.3.
4.4.2 Monetary Liens. At its expense, Seller shall cause to be removed all of the following liens encumbering the Property at or prior to the Closing (collectively, "Monetary Liens"): (i) all delinquent taxes, bonds and assessments and interest and penalties thereon (it being agreed that Seller shall not be required to remove any non-delinquent taxes and assessments imposed by any governmental agency that are paid with the property taxes for the Property; and (ii) all other monetary liens caused by or through the acts of Seller, including, without limitation, judgment and mechanics' liens, whether or not (10841816.11) 6
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liquidated, and mortgages and deeds of trust, with Seller being fully responsible for any fees or penalties incurred in connection therewith.
4.4.3 Approval/Disapproval of Title Review. Buyer shall approve or disapprove of the Preliminary Title Report, the Survey and any exceptions to title shown thereon (other than the Monetary Liens) in the exercise of Buyer's sole discretion, within thirty (30) days following receipt of the Preliminary Title Report ("Title Review Period"). If Buyer disapproves, Buyer may either (a) terminate this Agreement by delivering to Seller Buyer's Disapproval Notice on or before the expiration of the Title Review Period or (b) deliver to Seller a written notice ("Title Disapproval Notice") identifying the disapproved title matters ("Disapproved Title Matters") on or before the expiration of the Title Review Period, time being of the essence. If Buyer fails to deliver to Seller Buyer's Disapproval Notice or a Title Disapproval Notice before the expiration of the Title Review Period, Buyer shall be deemed to have approved the Preliminary Title Report and the condition of title with respect to the Property. With respect to any Disapproved Title Matters set forth in any timely delivered Title Disapproval Notice, other than the Monetary Liens, Seller shall notify Buyer in writing ("Seller's Title Notice") within 5 days after Seller's receipt of the Title Disapproval Notice whether Seller will cause the Disapproved Title Matters to be removed or cured at or prior to Closing, it being understood that Seller shall have no obligation to remove or cure any Disapproved Title Matters (other than Monetary Liens). Seller's failure to deliver to Buyer Seller's Title Notice within the above 5-day period shall be deemed to be Seller's election to not remove or cure the Disapproved Title Matters. If Seller delivers to Buyer Seller's Title Notice electing not to remove or cure all Disapproved Title Matters, or if Seller is otherwise deemed to have elected to not remove or cure the Disapproved Title Matters, Buyer may, at its option: (i) subject to satisfaction of the other conditions to Closing, close the purchase of the Property and take title subject to the Disapproved Title Matters which Seller elects not to remove or cure; or (il) terminate this Agreement by delivering Buyer's Disapproval Notice on or before the expiration of the Due Diligence Period and recover the Deposit in accordance with Section 9.6.1.
4.4.4 Buyer's Options. If any Disapproved Title Matters (including the Monetary Liens) have not been removed at least 5 days prior to Closing or provision for their removal at the Closing has not been made to Buyer's satisfaction, Buyer may, at its option: (i) close the purchase of the Property and take title subject to the Disapproved Title Matters which have not been removed; (ii) close the purchase of the Property and cure or remove the Disapproved Title Matters which have not been removed. Buyer may credit the costs of such cure or removal against the Purchase Price by reducing the amount of cash payable by Buyer at the Closing, but only to the extent such costs are expended to remove (A) Monetary Liens referred to in Section 3.5.1 or (B) Disapproved Title Matters which Seller agreed to remove; or (iii) terminate this Agreement and recover the Deposit in accordance with Section 10.6.1.
4.4.5 Acceptance of Title Policy. Buyer agrees that its acceptance of the Title Policy shall be in full satisfaction of any express or implied warranty of Seller as to the condition of title to the Property, and in the event there are any title exceptions or defects, including, without limitation, liens, encumbrances, covenants, conditions, reservations, restrictions, rights, rights of way, or easements, which, in Buyer's opinion, constitute a defect in title not shown or revealed in the Preliminary Title Report, the Title Policy, or otherwise contemplated in Section 4.4 of this Agreement above, Buyer shall look solely to the Title Company and the remedies available to Buyer under the Title Policy, and Seller shall have no responsibility or liability therefor.
ARTICLE 5. CONDITIONS PRECEDENT.
5.1 Buyer's Conditions. Buyer's obligations under this Agreement are expressly subject to the timely fulfillment of the conditions set forth in this Section 4.1 on or before the Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole or in part by Buyer by written notice to Seller.
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5.1.1 Due Diligence. Buyer having approved of the results of its Due Diligence Investigation pursuant to Section 4.3;
5.1.2 Title Review. Buyer having approved of the results of its review of title pursuant to Section 4.4.3.
5.1.3 Title Policy. Title Company shall be irrevocably committed to issue to Buyer a CLTA Standard Coverage Owner's Policy of Title Insurance ["Title Policy"](including such coinsurance, reinsurance and endorsements as Buyer shall require), with liability equal to the Purchase Price showing fee title to the Property vested in Buyer and subject only to: (i) the matters and exceptions which were approved or deemed approved by Buyer pursuant to Section 4.4.3; and (i) the standard printed exceptions in the form of the Title Policy. Buyer may elect to obtain an ALTA Extended Coverage Owner's Policy of Title Insurance, provided that (a) Buyer shall be solely responsible at Buyer's sole cost and expense for obtaining any Survey required for the issuance of such extended coverage, (b) Buyer shall be solely responsible for the incremental increase in premium for such extended ALTA coverage and (c) in no event shal Buyer's election to obstin extended coverage dilay the Closing, or otherwise consite a condition to
5.1.4 Performance of Covenants. Seller performing and complying in all material respects with all of the terms of this Agreement to be performed and complied with by Seller prior to or at the Closing.
• Representations and Warranties. The representations and warranties of Seller set forth in Article 6 being true and accurate in all material respect on the Closing Date, as if made on such
5.2 Seller's Conditions. Seller's obligations under this Agreement are expressly subject to the timely fulfillment of the conditions set forth in this Section 4.2 on or before the Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole or part by Seller by written notice to Buyer.
5.2.1 Covenants. Buyer performing and complying in all material respects with all of the terms of this Agreement to be performed and complied with by Buyer prior to or at the Closing.
5.2.2 Representations and Warranties. The representations of Buyer set forth in Article 7 being true and accurate in all material respects on the Closing Date, as if made on such date.
ARTICLE 6. SELLER'S REPRESENTATIONS AND WARRANTIES.
Subject to Buyer's opportunity to conduct its Due Diligence Investigation of the Property, Seller hereby makes the following representations and warranties to Buyer with the understanding that each such representation and warranty is material and is being relied upon by Buyer:
6.1 Defects. To Seller's actual knowledge, the Improvements and Personal Property are in good condition, subject to normal wear and tear, and there is no actual or threatened settlement, earth movement, termite infestation or damage affecting the Property.
Compliance. Seller has not received any notice from any governmental body or agency with jurisdiction over the Property (i) that the Property and/or Improvements located thereon are in violation of any applicable law, code or ordinance or (ii) to terminate any use of the Property. {10841816.11) 8
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6.3 Documents. To Seller's actual knowledge, all of the Property Documents which have been delivered or made available to Buyer pursuant to Article 3, and all other documents delivered to Buyer by or on behalf of Seller are complete copies.
6.4 Taxes and Condemnation. To Seller's actual knowledge, there are no presently pending or, contemplated special taxes or assessments which will affect the Property. Except for Buyer's threat of condemnation on the Property, there are no presently pending or, to Seller's knowledge, contemplated proceedings to condemn or demolish the Property or any part of it.
6.5 Utilities. To Seller's actual knowledge, all water, sewer, gas, electric, telephone and drainage facilities required by law or for the normal operation of the Property, are (a) installed to the property lines of the Property, (b) connected to the Property, (c) adequate to service the Property for its present use and (d) in good working order and repair. To Seller's actual knowledge and subject to confirmation by Buyer during the Title Review Period, all such utilities and storm and sanitary sewers required for the operation of the Property enter the Land through adjoining public streets or through adjoining private land in accordance with valid public or private easements that will inure to the benefit of Buyer.
6.6 Licenses. To Seller's actual knowledge, Seller has all required licenses, permits including, without limitation, all building permits and occupancy permits), easements and rights-of-way which are required in order to continue the present use of the Property. To Seller's actual knowledge, Seller is not aware of any law or regulation of any governmental authority having jurisdiction which will require the Property to be improved beyond its present state or which will restrict the use of the Property in the manner it is presently being used.
6.7 Contracts/Leases/Occupancy Rights. Exhibit I contains a description of all contracts entered into by Seller or its property manager or leasing agent relating to the management, maintenance, leasing or operation of the Property ("Service Contracts"). As of the Closing Date, no party will have a right of occupancy, tenancy, or a license to use or enter the Property except as set forth in the Public Storage Agreement (defined below).
Litigation. There are no actions, suits, proceedings, judgments, orders, decrees or governmental investigations pending or, to Seller's actual knowledge, threatened against the Property or Seller which could affect the Property or the purchase, use or enjoyment thereof by Buyer, except for the threat of Seller's Condemnation.
6.9 Hazardous Materials.
6.9.1 Definitions. For purposes of this Agreement:
"Environmental Laws)" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et. seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq., [The Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. H&S Code Sections 25249.5-25249.13), the Carpenter-Preseley-Tanner Hazardous Substance Account Act (Cal. H&S Code Sections 25300 et seq.), and the California Water Code Sections 1300, et seq.], as said laws have been supplemented or amended to date, the regulations promulgated pursuant to said laws and any other federal, state or local law, statute, rule, regulation or ordinance which regulates or proscribes the use, storage, disposal, presence, cleanup, transportation or Release or threatened Release into the environment of Hazardous Material.
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(b) "Hazardous Material" means any substance which is (i) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any Environmental Law, as currently in effect or as hereafter amended or enacted, (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof and all petroleum products, (iii) PCBs, (iV) lead, (V) asbestos, (Vi) flammable explosives, (vii) infectious materials or (viii) radioactive materials. "Release" means any spilling, leaking, pumping, pouring, emitting, discharging, injecting, escaping, leaching, dumping or disposing into the environment of any Hazardous Material (including the abandonment or discarding of barrels, containers, and other receptacles containing any Hazardous Material).
(d) "Existing Phase I Reports" collectively mean (i) Phase I Environmental Site Assessment Report dated May 22, 2013 and prepared by Partner Engineering and Science, Inc. and (i) Phase I Environmental Site Assessment Report dated November 2, 2021 and prepared by Orswell & Kasman, Inc.
6.9.2 Representations. Except as otherwise disclosed to Buyer by Seller in writing:
(a) Seller has not received any notice from any governmental body or agency with jurisdiction over the Property that the Property is in violation of any applicable Environmental Laws.
To Seller's actual knowledge, neither Seller nor (based solely on the Existing Phase I Reports) any former owner of the Property has used, handled, stored, transported, released or disposed of any Hazardous Material on, under or from the Property in violation of any Environmental Law.
To Seller's actual knowledge and based solely on the Existing Phase I Reports, there is no Release of any Hazardous Material existing on, beneath or from or in the surface or ground water associated with the Property.
To Seller's actual knowledge and to the extent applicable, all required permits, licenses and other authorizations required by or issued pursuant to any Environmental Law for the ownership or operation of the Property by Seller, if any, have been obtained and are presently maintained in full force and effect.
(e) To Seller's actual knowledge and based solely on the Existing Phase I Reports, there exists no current or existing writ, injunction, decree, order or judgment outstanding, nor any lawsuit, claim, proceeding, citation, directive, summons or investigation pending or, to Seller's knowledge, threatened pursuant to any Environmental Law relating to (i) the ownership, occupancy or use of any portion of the Property by Seller or occupant or user of any portion of the Property or any former owner of any portion of the Property, (i) any alleged violation of any Environmental Law by Seller or occupant or user of any portion of the Property or any former owner of any portion of the Property or (iii) the suspected presence, Release or threatened Release of any Hazardous Material on, under, in or from any portion of the Property.
To Seller's actual knowledge and based solely on the Existing Phase I Reports, there are no above-ground or underground tanks located on the Property used or formerly used for the purpose of storing any Hazardous Material.
To Seller's actual knowledge and based solely on the Existing Phase I Reports, no asbestos abatement or remediation work has been performed on the Property. {10841816.11) 10
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(h) To Seller's actual knowledge and based solely on the Existing Phase I Reports, there is no PCB-containing equipment or PCB-containing material located on or in the Property.
6.10 Title to the Property. Seller is the current fee owner of the Property. To Seller's actual knowledge, there are no outstanding rights of first refusal or first look, options to purchase, rights of reverter, or claim of right relating to the transfer or sale of the Property or any interest therein. To Seller's actual knowledge, no person holding a security interest in the Property or any part thereof has the right to consent or deny consent to the sale of the Property as contemplated herein, and Seller has the right to pay off such person and to remove all such liens as of the Closing Date.
6.11 Seller's Authority. Seller has the requisite power and authority to own and operate the Property and conduct its business where the same is now owned or operated. The execution, delivery and performance of this Agreement by Seller have been duly and validly authorized by all necessary action and proceedings, and no further action or authorization is necessary on the part of Seller (or its board of directors or shareholders) in order to consummate the transactions contemplated herein. This Agreement and the other documents executed by Seller in connection herewith are legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms. Neither the execution and delivery of this Agreement by Seller, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Seller was organized, or any indenture, mortgage, deed of trust, agreement, undertaking, instrument or document to which Seller or any affiliate thereof is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Seller.
6.12 Foreign Person. Seller is not a "foreign person" within the meaning of Section 1445(f) of the Internal Revenue Code.
6.13 No Employees. On or before Closing, Seller shall terminate any employees at the Property and any residence or occupancy thereof and Buyer shall have no obligation to employ or continue to employ any individual employed by Seller or its affiliates in connection with the Property.
6.14 ADA Dismissal Work. Seller confirms that in connection with that certain Notice of Voluntary Dismissal with Prejudice relating to Case No. 5:23-cv-810 (Brooke v. Century Sierra LLC) filed in the United States District Court - Central District of California on June 14, 2023 ("ADA Dismissal"), Seller agreed to designate a hotel passenger loading zone with disability access aisle as described in the ADA Dismissal ("Loading Zone and Access Aisle Work"). Seller agrees to cause the Loading Zone and Access Aisle Work to be completed at Seller's sole cost and expense on or before the Closing Date.
For purposes of this Agreement, the terms "to Seller's actual knowledge", and similar terms and phrases regarding the knowledge of Seller, shall be limited to the current actual knowledge of Vishal Patel without investigation, review or inquiry (the "Seller Knowledge Party"). The parties hereby agree that recourse under this Agreement is limited to Seller and no claim will be made against the Seller Knowledge Party nor shall the Seller Knowledge Party have any personal liability for any breach of any of the foregoing representations and warranties.
ARTICLE 7. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer makes the following representation and warranties to Seller with the understanding that each such representation and warranty is material and is being relied upon by Seller:
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7.1 Buyer's Authority. The execution, delivery and performance of this Agreement by Buyer have been duly and validly authorized by all necessary action and proceedings, and no further action or authorization is necessary on the part of Buyer in order to consummate the transactions contemplated herein. This Agreement and the other documents executed by Buyer in connection herewith are legal, valid and binding obligations of Buyer, enforceable in accordance with their respective terms. Neither the execution and delivery of this Agreement by Buyer, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Buyer was organized, or any indenture, mortgage, deed of trust, agreement, undertaking, instrument or document to which Buyer or any affiliate thereof is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Buyer.
7.2 No Conflict. Neither the execution nor delivery of this Agreement by Buyer, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Buyer was organized, or any agreement to which Buyer is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Buyer.
7.3 Condemnation. Buyer is (i) a governmental or quasi-governmental entity as the terms are used in Internal Revenue Code section 1033, (ii) a public entity as the term is used in California Revenue and Taxation Code section 68, (ili) an entity described in United States Internal Revenue Code section 170(c)(1) (i.e., a state, a possession of the United States, or any political subdivision of any of the foregoing), (Iv) pursuant to Buyer's police powers and statutory authority under Code of Civil Procedure section 1240.010, Buyer may acquire the Property by condemnation for any lawful public purpose, (v) Buyer intends to purchase the Property for the purposes of providing housing for the homeless community, which is for a public purpose and use and (Vi) if the transaction contemplated under this Agreement fails tc close, Buyer will initiate an action in eminent domain to acquire the Property for the public purpose described in clause (v), above.
ARTICLE 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION.
Survival of Warranties. Buyer and Seller agree that each representation and warranty, covenant by the respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall be deemed made as of the date of this Agreement or such writing and again at the Closing, shall be deemed to be material, and unless expressly provided to the contrary shall survive the execution and delivery of this Agreement, the Deed and the Closing for a period of twelve (12) months following the Closing Date.
8.2 Notice of Changed Circumstances. If either party becomes aware of any fact or it shall immediately give notice of such fact or circumstance to the other party, but such notice shall not relieve any party of any liabilities or obligations with respect to any representation or warranty and (i) if the party elects to proceed with Closing with the knowledge that such other party's representation or warranty may be false or misleading, such party shall be deemed to have waived any claims it may have against the other party for making any false or misleading representation and warranty under this Agreement.
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ARTICLE 9. SELLER'S PRECLOSING COVENANTS.
Seller shall comply with the covenants contained in this Article 9 from the Effective Date through the Closing Date unless Buyer consents otherwise in writing. Buyer may grant or withhold any such consent requested by Seller in Buyer's sole discretion.
Contracts and Documents. Seller shall not, without Buyer's approval, not to be unreasonably withheld or delayed, (a) amend or waive any right under any Service Contract or Property Document, or (b) enter into any material agreement of any type affecting the Property that would survive the Closing Date.
9.2 Insurance. Seller shall maintain or cause to be maintained in full force and effect its present insurance policies for the Property.
9.3 Compliance with Obligations. Seller shall fully and timely comply with all obligations to be performed by it under the Service Contracts, the Property Documents and all permits, licenses, approvals and laws, regulations and orders applicable to the Property.
9.4 No Transfers. Seller shall not sell, encumber or otherwise transfer any interest in all or any portion of the Property, or agree to do so.
9.5 Termination of Contracts. Seller at its sole cost and expense shall terminate all of the Service Contracts described in Section 6.7 at or before the Closing Date, except for those contracts which Buyer expressly agrees to assume and which are actually assumed by Buyer pursuant to Section 10.3.3 during the Due Diligence Period.
Maintenance. At its sole cost and expense, Seller shall operate and maintain the Property consistent with its prior practice, such that on the Closing Date the Property shall be in at least as good a condition and repair as on the Effective Date, reasonable wear and tear excepted.
ARTICLE 10. CLOSING.
Time. Provided all conditions set forth in Article 5 have been either satisfied or waived, the parties shall close this transaction (the "Closing"), on the date which is the later of the following dates ("Closing Date"): (a) thirty (30) days after the expiration of the Due Diligence Period and (b) January 10, Escrow. This Article 10, together with such additional instructions as Escrow Holder shall reasonably request and the parties shall agree to, shall constitute the escrow instructions to Escrow Holder.
If there is any inconsistency between this Agreement and the Escrow Holder's additional escrow instructions, this Agreement shall control. Buyer and Seller shall cause Escrow Holder to execute and deliver a counterpart of this Agreement to each of them.
10.3 Seller's Deposit of Documents and Funds Into Escrow. Seller shall deposit into Escrow on or before the Closing Date the following documents:
10.3.1 A duly executed and acknowledged grant deed conveying the Property to Buyer ("Grant Deed") in substantially the form attached as Exhibit E;
10.3.2 A duly executed bill of sale, in substantially the form of Exhibit D, conveying the Personal Property to Buyer ("Bill of Sale");
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10.3.3 A duly executed assignment, in substantially the form of Exhibit E, assigning to Buyer all of Seller's interest, to the extent assignable, (a) in any Plans, (b) in any warranties of which Seller is the beneficiary with respect to the Property, (c) in any intangible assets of the Property, and (d) in any Service Contracts which Buyer has elected to assume (the "General Assignment");
10.3.4 A duly executed ROFR Memo (defined below), in substantially the same form as Exhibit G;
10.3.5 Complete copies of the Service Contracts Buyer has elected to assume, if any. At Buyer's request, Seller shall request estoppel certificates from the other parties to such Service Contracts in form and substance reasonably satisfactory to Buyer, provided that (i) Seller's sole obligation with respect to such estoppel certificate shall be to request the same, (ii) in no event shall the receipt of any such estoppel certificates constitute a condition to Closing or otherwise modify or affect either party's obligations under this Agreement and (iii) in no event shall Seller be deemed to be in default under this Agreement if the estoppel certificates are not returned by the other parties to the Service Contracts;
10.3.6 Seller's share of Closing costs, including, but not limited to, the premium for the standard coverage portion of the Title Policy, recording fees (if any), transfer taxes (if any) and fees, one-half of the escrow fees, sales tax and any other costs of Closing customarily paid by sellers of real property in California, plus or minus prorations as provided in Section 10.8; provided that, subject to Section 9.6, Buyer and Seller shall bear their own attorneys' fees and costs in connection with the negotiation and preparation of this Agreement and the transactions completed by this Agreement;
10.3.7 A duly executed certification (the "Non-Foreign Certification"), substantially in the form of Exhibit C;
10.3.8 A California Form 593 (or its equivalent), and any such other transfer or other tax forms required under state or federal law required in connection with the transfer of the Property, executed and acknowledged (where applicable) by Seller; and
10.3.9 Such additional documents as may be required by Title Company and/or Escrow Holder for conveyance of the Property in accordance with this Agreement.
10.4 Deliveries Outside of Escrow. Notwithstanding Section 9.3, Seller and Buyer may elect to deliver the documents described in Section 9.3 outside of escrow (other than documents which are to be recorded) by giving Escrow Holder a joint written notice of such election, specifying the documents which will be so delivered outside of escrow. Upon receipt of such notice, Escrow Holder shall have no further obligation concerning such specified documents.
10.5 Buyer's Deposit of Documents and Funds. Buyer shall deposit into Escrow on or before the Closing Date the following documents:
10.5.1L A duly executed General Assignment;
10.5.2 A duly executed ROFR Memo in substantially the form attached hereto as Exhibit G;
10.5.3 Buyer's share of Closing costs, including, but not limited to, the premium for the extended coverage portion of the Title Policy to the extent Buyer elects to obtain an extended coverage policy of title insurance, the cost of all title endorsements requested by Tenant, title search fees, one-half of the escrow fees, the Closing Amount by electronic transfer of federal funds to Escrow Holder, and any {10841816.11) 14
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other reasonable costs of Closing customarily paid by buyers of real property in California, plus or minus prorations as provided in Section 10.8; and
10.5.4 Such additional documents, including written escrow instructions consistent with this Agreement, as may be required by Title Company and/or Escrow Holder for conveyance of the Property in accordance with this Agreement.
10.6 Default, Termination and Remedies.
10.6.1 Buyer's Termination. This Agreement shall automatically terminate without Turther notice or action by Buyer upon the occurrence of any of the following events, provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing contained in Section 5.1 has not been satisfied or waived by Buyer by the Closing Date; or (b) Buyer having exercised its right to terminate this Agreement pursuant to Section 4.3 (disapproval of Due Diligence Investigation), Section
4.4.3 (disapproval of title) or Article 11 (damage or condemnation). In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.
10.6.2 Seller's Termination. Provided that Seller is not then in material breach of this Agreement, this Agreement shall automatically terminate without further notice or action by Seller if any condition to Closing contained in Section 4.2 has not been satisfied or waived by Seller by the Closing Date. In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.
10.6.3 Release from Escrow. Upon termination of this Agreement pursuant to Section
10.6.1 or 10.6.2, Escrow Holder shall promptly return to Buyer and Seller, respectively, all documents and monies deposited by them into escrow without prejudice to their rights and remedies hereunder.
10.6.4 Remedies.
(a) Buyer's Remedies. If this Agreement terminates as a result of Seller's breach of this Agreement, Buyer shall elect as its sole and exclusive remedy, at law or in equity, to either (i) terminate this Agreement by giving Seller and Escrow Holder timely written notice of such election prior to or at the Closing Date, and upon return to Seller of the Property Documents, recover the Deposit and all accrued interest, if any, thereon less the Independent Consideration, plus reimbursement for all third- party, out-of-pocket costs actually incurred by Buyer in connection with the transaction contemplated by this Agreement, not to exceed Twenty-Five Thousand and 00/100 Dollars ($25,000.00), (ii) enforce specific performance of this Agreement, in which case, in addition to pursuing specific performance, Buyer shall be entitled to reimbursement for all third-party, out-of-pocket costs actually incurred by Buyer in connection with the transaction contemplated by this Agreement and/or such specific performance action, not to exceed Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or (iii) waive said failure and/or breach. In the event Buyer elects to terminate this Agreement pursuant to the terms of this Paragraph 10.6.1, neither party shall have any further liability or obligation to the other hereunder, except for provisions of this Agreement that expressly state that they shall survive the termination of this Agreement.
Notwithstanding anything herein to the contrary, Buyer shall be deemed to have elected to terminate this Agreement pursuant to clause (i), above, if Buyer fails to either waive such failure and/or breach or to deliver to Seller written notice of its intent to file a claim or assert a cause of action for specific performance against Seller on or before thirty (30) days following the scheduled Closing Date or, having given such notice, fails to file a lawsuit asserting such claim or cause of action in the county in which the Property is located within sixty (60) days following the scheduled Closing Date. Except as otherwise expressly set forth in this Section 10.6.1 and except in the case of Seller's fraud and/or constructive fraud, Buyer hereby {10841816.11) 15
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waives any right to pursue any other remedy at law or in equity for such failure and/or breach of Seller, including, without limitation, any right to seek, claim or obtain punitive damages or consequential damages.
Seller's Remedies/Liquidated Damages. IF AFTER EXPIRATION OF
THE DUE DILIGENCE PERIOD BUT BEFORE THE CLOSE OF ESCROW BUYER FAILS TO
COMPLY WITH OR PERFORM BUYER'S OBLIGATIONS UNDER THIS AGREEMENT AND DOES NOT CURE SUCH FAILURE WITHIN THE EARLIER OF TEN (10) BUSINESS DAYS AFTER
SELLER'S WRITTEN NOTICE OF SUCH FAILURE AND THE CLOSING DATE (EXCEPT NO
NOTICE OR CURE PERIOD SHALL APPLY IF BUYER FAILS TO CONSUMMATE THE PURCHASE OF THE PROPERTY HEREUNDER), THEN SELLER MAY THEREAFTER: (1) TERMINATE THIS AGREEMENT; (II) RECEIVE AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES; AND (III) EXERCISE THE OTHER RIGHTS AND REMEDIES RESERVED BY SELLER AS PROVIDED IN THIS PARAGRAPH. IN THE EVENT SELLER TERMINATES THIS
AGREEMENT BY REASON OF BUYER'S DEFAULT, BUYER AND SELLER SHALL BE
RELIEVED OF ANY FURTHER OBLIGATION TO EACH OTHER WITH RESPECT TO THIS
AGREEMENT AND THE PROPERTY EXCEPT FOR ANY OBLIGATIONS WHICH EXPRESSLY SURVIVE. IT IS EXPRESSLY UNDERSTOOD AND AGREED BY BUYER AND SELLER: THAT
SELLER WILL INCUR SUBSTANTIAL DAMAGES AS A RESULT OF ANY FAILURE BY BUYER TO COMPLY WITH OR PERFORM BUYER'S OBLIGATIONS UNDER THIS AGREEMENT; THAT
IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO CALCULATE AND ASCERTAIN AS OF
THE EFFECTIVE DATE OF THIS AGREEMENT THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED IN SUCH EVENT BY SELLER; AND THAT THE DEPOSIT IS A REASONABLE
ESTIMATE OF THE EXTENT TO WHICH SELLER MAY BE DAMAGED BY BUYER'S DEFAULT
IN LIGHT OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER'S ACTUAL DAMAGES AS A RESULT OF SUCH DEFAULT BY BUYER. THE PAYMENT OF THE DEPOSIT TO SELLER AS LIQUIDATED DAMAGES AS SET FORTH IN THIS SECTION 3.5 IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369 BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.
SELLER'S INITIALS BUYER'S INITIALS
(c) Waiver of Specific Performance. SELLER HEREBY WAIVES THE
RIGHT TO MAINTAIN AN ACTION FOR SPECIFIC PERFORMANCE OF BUYER'S OBLIGATION
TO PURCHASE THE PROPERTY AND SELLER AGREES THAT SELLER CAN BE ADEQUATELY
COMPENSATED IN MONEY DAMAGES IF BUYER FAILS TO PURCHASE THE PROPERTY IN BREACH OF THIS AGREEMENT. SELLER ACKNOWLEDGES THAT THE PROVISIONS OF THIS
PARAGRAPH ARE A MATERIAL PART OF THE CONSIDERATION BEING GIVEN TO BUYER
FOR ENTERING INTO THIS AGREEMENT AND THAT BUYER WOULD BE UNWILLING TO
ENTER INTO THIS AGREEMENT IN THE ABSENCE OF THE PROVISIONS OF THIS
PARAGRAPH
SELLER'S INITIALS BUYER'S INITIALS
Closing. When Escrow Holder has received all documents and funds identified in Sections
10.3 and 10.5, has received notification from Buyer and Seller that all conditions to Closing to be satisfied outside of escrow have been satisfied or waived and Title Company is irrevocably committed to issue the Title Policy, then, and only then, Escrow Holder shall:
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10.7.1 Record the Grant Deed;
10.7.2 Cause the Title Company to issue the Title Policy to Buyer;
10.7.3 To the extent not otherwise delivered to Buyer outside of escrow, deliver to Buyer:
(a) a conformed copy (showing all recording information thereon) of the Grant Deed; (b) fully executed original counterparts of the Bill of Sale, the General Assignment; and (c) the Seller's Certificate, the Service Contracts referred to in Section 9.3.6, the Non-foreign Certification;
10.7.4 Deliver the Purchase Price (as adjusted pursuant to Section 9.8) to Seller.
Escrow Holder shall prepare and sign closing statements showing all receipts and disbursements and deliver copies to Buyer and Seller and, if applicable, shall file with the Internal Revenue Service (with copies to Buyer and Seller) the reporting statement required under Section 6045(e) of the Internal Revenue Code.
10.8 Prorations: Costs. Subject to the other provisions of this Section 10.8, all receipts and disbursements of the Property will be prorated as of 11:59 p.m. on the day immediately preceding the Closing Date. Prior to the Closing, Seller shall submit to Buyer for its approval a tentative prorations schedule showing the categories and amounts of all prorations proposed. The parties shall agree on a final prorations schedule prior to the Closing and shall deliver the same to Escrow Holder. If following the Closing either party discovers an error in the prorations statement, it shall notify the other party and the parties shall promptly make any adjustment required
10.8.1 Property Taxes. All real and personal property ad valorem taxes and special assessments, if any, whether payable in installments or not, including without limitation, all supplemental taxes attributable to the period prior to the Closing Date for the calendar year in which the Closing occurs, shall be prorated to the Closing Date, based on the latest available tax rate and assessed valuation.
Notwithstanding the foregoing, Buyer is a tax exempt entity, not subject to ad valorum taxes within its jurisdiction, prorated or not, and shall not prepay or reimburse any portion of real estate taxes to Seller if Seller has prepaid any installment of such real estate taxes within Buyer's jurisdiction. Buyer shall cooperate, at no cost to Buyer, in any refund request Seller submits to the tax assessor.
10.8.2 Utility Charges. All utility charges shall be prorated as of the Closing Date and Seller shall obtain a final billing therefor. All utility security deposits, if any, shall be retained by Seller. and Public Storage ("Public Storage Agreement"), which among other things, sets forth certain terms and conditions relating to Public Storage's plans to develop property located adjacent to the Property.
Notwithstanding anything to the contrary contained in the Public Storage Agreement or this Agreement and the transfer of fee title of the Property to Buyer, Buyer confirms and agrees that (i) Buyer shall not amend the Public Storage Agreement in any manner that would affect the terms of the payment of the Fee, including the amount of the Fee, the timing of payment of the Fee and Seller's right to receive the same, without first obtaining the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion and (ii) the "Fee" described in Section 6 of the Public Storage Agreement shall remain the sole and exclusive property of Seller. In connection with the foregoing Fee, Buyer shall assign any and all rights it may have to any such Fee to Seller as further set forth in the General Assignment.
Notwithstanding the assignment of Buyer's rights (if any) to the Fee to Seller as provided above, if Public Storage delivers the Fee to Buyer, Buyer agrees to promptly deliver the same to Seller upon receipt (or if (10841816.11} 17
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such Fee has been paid by check made payable to Buyer, Buyer shall deliver to Seller a check in the amount of the Fee. Buyer and Seller agree to execute such additional documents as may be reasonably requested by the other party to the extent reasonably required to effect the intent of this Section 10.8.3. Buyer and Seller's rights and obligations under this Section 10.8.3 shall survive the Closing.
10.9 Possession. Seller shall deliver exclusive right of possession of the Property to Buyer on the Closing Date.
ARTICLE 11. DAMAGE, DESTRUCTION AND CONDEMNATION.
This Agreement shall be governed by the Uniform Vendor and Purchaser Risk Act as set forth in Section 1662 of the California Civil Code as supplemented and modified by this Article 11. Seller shall promptly notify Buyer in writing of any material damage to the Property and of any taking or threatened taking of all or any portion of the Property. Within a reasonable period of time after receipt of such notice, Buyer shall determine whether a material part of the Property has been damaged or whether such taking or threatened taking has affected or will affect a material part of the Property. As used herein, (a) the destruction of a "material part" of the Property shall be deemed to mean an insured or uninsured casualty to the Property having an estimated cost of repair which in the reasonable judgment of Buyer equals or exceeds Two Hundred Thousand and 00/100 Dollars ($200,000) and (b) a taking by eminent domain of a portion of the Property shall be deemed to affect a "material part" of the Property if in the reasonable judgment of Buyer the estimated value of the portion of the Property taken exceeds Two Hundred Thousand and 00/100 Dollars ($200,000). Upon making its determination, Buyer shall notify Seller in writing of the results of such determination. Buyer may elect, by written notice delivered to Seller within 30 days after giving Seller notice of such determination, to terminate this Agreement in accordance with Section 10.6.1 if a material part of the Property has been damaged or if such taking has affected or will affect a material part of the Property. If Buyer does not so terminate, (i) in the case of damage to a material part of the Property, Seller shall assign to Buyer at the Closing its right to recover under any insurance policies covering such damage and shall pay Buyer at the Closing the amount of the deductible, if any, and (ii) in the case of a threatened or actual taking of a material part of the Property, Seller shall assign to Buyer at the Closing Seller's entire right, title and interest in the proceeds thereof. If between the Effective Date and the Closing Date the Property suffers damage which is not material, Seller shall repair such damage at its expense prior to the Closing, and the Closing Date shall be extended for a reasonable period of time not to exceed 30 days to allow for completion of such repairs. The Closing Date shall be extended as necessary to permit Buyer to exercise its rights under this Article 11.
ARTICLE 12. CONDITION OF PROPERTY; AS-IS TRANSACTION.
Buyer agrees that (a) except as expressly set forth in Article 6 of this Agreement, the sale of the Property to Buyer is concluded without warranties, representations or guarantees, express or implied, made by Seller; (b) the Property is purchased by Buyer on an "AS IS" basis with respect to the physical condition of the Property and all components thereof, including, without limitation, the environmental condition of the Property and the surrounding property, and all facilities, improvements, structures and equipment thereon and soil and groundwater thereunder, and all zoning and other ordinances of the City of Fontana concerning permitted uses for the Property; (c) any information, reports, statements, and documents regarding the Property or the condition thereof are delivered by Seller to Buyer only as an accommodation to Buyer, without representation or warranty, and not with the intent that these documents be relied on by Buyer, except to the extent that Seller has independently confirmed in writing to Buyer the validity of those documents and the information contained in them; and (d) Buyer's decision to purchase the Property is based only on the investigation, study and analysis of all aspects of the Property as made by Buyer and/or Buyer's agents, employees, representatives and/or independent contractors (collectively, "Buyer's Investigation"). Until the expiration of the Due Diligence Period, and subject to the terms and conditions {10841816.11) 18
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of this Agreement, including Section 4.1.2, Buyer shall have the right at its own expense to conduct a "phase l" environmental assessment of the Property. Buyer shall not have the right to conduct a "phase 2" or other intrusive environmental or soils testing subject to the terms and conditions set forth in Section 4.1.2 of this Agreement. Upon reasonable prior notice, Seller shall have the right to meet with Buyer's consultants, to all data generated by any assessments of the Property and to receive concurrently with Buyer, at no cost to Buyer, copies of all reports provided by Buyer's consultants. Buyer acknowledges that Seller makes no expressed representations or warranties regarding the environmental condition of the Property or the Property's compliance with any federal, state or local environmental, health or safety statutes, laws or regulations. Except as otherwise specifically provided in this Agreement, it is expressly understood by Buyer and Seller that all statements and representations made by Seller and Seller's agents and independent contractors (x) are intended by Buyer and Seller to be made only as an accommodation to Buyer and Buyer's Investigation and not in lieu of Buyer's Investigation, and (y) are not to be relied and acted on by Buyer.
In connection with the foregoing, except for any claims brought by Buyer that arise out of Seller's fraud or constructive fraud, Buyer hereby waives, releases, discharges and holds Seller and the Seller Parties (collectively referred to in this Article 12 as the "Indemnified Parties") harmless from any and all suits, causes of action, legal or administrative proceedings, liabilities, claims, damages, losses, costs and expenses of whatever kind, known or unknown, including any action under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601 et seq., as amended, and the provisions of California Health & Safety Code 25100 et seq., as amended, which Buyer had, has or may have, based upon the condition of the Property (including, without limitation, the presence, discharge, treatment, recycling, use, migration, storage, generation, release, disposal or transportation to or from the Property of any Hazardous Materials or the environmental condition of the Property). The term "Hazardous Materials" as defined in Section 6.7 shall also include any hazardous or toxic waste, substance, material, or constituent as defined in and restricted or otherwise regulated in any manner or degree by any applicable federal, state matters which are known, disclosed or foreseeable, and Buyer hereby waives any and all rights and benefits which it now has, or in the future may have, conferred upon Buyer by virtue of the provisions of Section 1542 of the California Civil Code, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." S1.
Buyer's Initials Seller's Initials
Buyer warrants that it is familiar with, has read, understands, and has consulted legal counsel of its choosing with respect to California Civil Code Section 1542 and Buyer realizes and acknowledges that factual matters now unknown to it may have given, or may hereinafter give, rise to actions, legal or administrative proceedings, claims, demands, debts, controversies, damages, costs, losses, liabilities and expenses which are presently unknown, unanticipated and unsuspected and Buyer further agrees, represents and warrants that the provisions of this Paragraph have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release, discharge and acquit the Indemnified Parties from any such unknown causes of action, legal or administrative proceedings, claims, demands, debts, controversies, damages, costs, losses, liabilities and expenses which are in any way related (10841816.11) 19
16498.10024141483966.6
to the Agreement, this Addendum or the Property. Buyer's obligations under this Article 12 shall survive the Closing.
ARTICLE 13. RIGHT TO BUY PROPERTY
13.1 If after Closing, Buyer desires to market the Property for sale to the general public, subject to Buyer's obligation to comply with the Surplus Land Act, Buyer shall notify Seller and provide Seller with an opportunity to submit a bid to Buyer for the purchase of the Property. If Buyer does not sell or otherwise dispose of the Property pursuant to the Surplus Land Act, Buyer shall offer the Property to Seller by delivering written notice thereof to Seller ("ROFR Notice"). Seller's right of first refusal shall last for a period of five (5) years after the Buyer's acquisition of the Property. Seller shall have the right to purchase the Property on the terms set forth in the ROFR Notice ("ROFR") by delivering to Buyer written notice of its election to exercise the ROFR on the terms set forth in the ROR Notice ("ROFR Exercise Notice") within ten (10) business days after receipt of the ROF Notice. If Seller delivers to Buyer the ROFR Exercise Notice within the above 10 business-day period, Buyer and Seller shall enter into a purchase and sale agreement incorporating the terms set forth in the ROF Notice and otherwise in substantially the same form as this Agreement and Buyer and Seller shall proceed to close escrow on the Property. As part of the closing documents for the Closing, Buyer and Seller shall execute a Memorandum of Right of First Refusal in the form attached hereto as Exhibit G ("ROFR Memo"), which ROFR Memo shall be recorded against the Property at Closing.
ARTICLE 14. LIMITATION ON LIABILITY; GENERAL PROVISIONS.
14.1 Limitation on Liability. Notwithstanding anything to the contrary contained herein, the aggregate liability of Seller arising pursuant to or in connection with the breach of any representations, warranties, indemnifications, covenants or other obligations (whether express or implied) of Seller under the Agreement (or any document executed or delivered in connection herewith, including any amendments) (collectively, "Contract Liabilities") shall not exceed an amount equal to One Million Fifteen Thousand and 00/100 Dollars ($1,015,000.00). Any claims made by Buyer for a breach of a Seller representation, warranty, indemnification or warranty shall be made on or before the date that is twelve (12) months after the Closing and shall only be effective if Buyer files an action in a court of competent jurisdiction within such twelve (12) month period, and any representation and warranty not specified in such action shall expire. No trustee of any trust that holds title to the Property shall have any personal liability, directly or indirectly, under or in connection with the Agreement or any agreement made or entered into under or pursuant to the provisions of the Agreement, or any amendment to any of the foregoing made at any time or times, heretofore or hereafter, and Buyer and its successors and assigns and, without limitation, all other persons and entities, shall look solely to the assets of Seller for the payment of any claim or for any performance, subject to the limitations set forth herein, and Buyer, on behalf of itself and its successors and assigns, hereby waives any right to seek any such personal liability as it relates to Seller. Notwithstanding the foregoing, this Section and said Contract Liabilities shall not be applicable in the event any claims brought by Buyer arise out of Seller's fraud or constructive fraud.
14.2 Notices. All notices, demands, approvals, and other communications provided for in this Agreement shall be in writing and shall be effective (a) when personally delivered to the recipient at the recipient's address set forth below; (b) five business days after deposit in a sealed envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to the recipient as set forth below; or (c) one business day after deposit with a recognized overnight courier or delivery service, addressed to the recipient as set forth below, whichever is earlier. If the date on which any notice to be given hereunder falls on a Saturday, Sunday or legal holiday, then such date shall automatically be extended to the next business day immediately following such Saturday, Sunday or legal holiday.
{10841816.11) 20
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The addresses for notice are:
SELLER: Century Sierra, LLC
Attn: Sunit Patel and Viren Patel
12680 Stanton Avenue
Tustin, California 92782
Phone: 909.800.9052
Email: [email protected] and [email protected] With a copy to: Garrett Stiepel Ryder LLP
Attn: Daniel H. Cho
3200 Bristol Street, Suite 850
Costa Mesa, California 92626
Phone: 714.384.4305
Email: [email protected]
BUYER: City of Fontana
Attn: Phillip Burum
8353 Sierra Ave.
Fontana, CA 92335
Phone: (909) 350-6727
Email [email protected]
With a copy to: Jessica Lomakin
Best Best & Krieger LLP
2855 E. Guasti Rd.
Suite 400
Ontario, CA 91761
Phone: (909) 483-6643
Email: [email protected]
Either party may change its address by written notice to the other given in the manner set forth above.
14.3 Entire Agreement. This Agreement and the Schedules and Exhibits hereto contain the Angie gne me supersede al ding atre Bs, in indig an openin the become or i, understandings, conditions, representations and warranties, whether written or oral, made by Buyer or Seller concerning the Property or the other matters which are the subject of this Agreement.
14.4 Amendments and Waivers. No addition to or modification of this Agreement shall be effective unless set forth in writing and signed by the party against whom the addition or modification is sought to be enforced. The party benefited by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless made in writing and signed by the waiving party.
14.5 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole. {10841816.11) 21
16498.10024\41483966.6
References. Unless otherwise indicated, (a) all Article, Section, Schedule and Exhibit references are to the articles, sections, schedules and exhibits of this Agreement, and (b) all references to days are to calendar days. All the Schedules and Exhibits attached hereto are incorporated herein by this reference. Whenever under the terms of this Agreement the time for performance of a covenant or condition falls upon a Saturday, Sunday or California state holiday, such time for performance shall be extended to the next business day. The headings used in this Agreement are provided for convenience only and this Agreement shall be interpreted without reference to any headings. The masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so indicates or requires.
14.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in California.
14.8 Confidentiality and Publicity. Buyer is a public entity and as such, this Agreement, upon its presentation for approval at Buyer's City Council at a duly called and agendized public meeting, shall be subject to the Public Records Act and the Freedom of Information Act. No press release or other public disclosure may be made by Seller or any of its agents regarding Buyer's intent for this Property this transaction without the prior consent of Buyer.
14.9 Time. Time is of the essence in the performance of the parties' respective obligations under this Agreement.
14.10 Attorneys' Fees. In the event of any legal or equitable proceeding to enforce any of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding shall be entitled to recover its reasonable costs and expenses, including, without limitation, reasonable attorneys' fees and costs of defense paid or incurred in good faith.
14.11 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. However, Seller shall not have the right to assign all or any portion of its interest in this Agreement without Buyer's prior written consent. Buyer shall have the right to assign all or any portion of its interest in this Agreement to a related or affiliated entity or governmental agency, or substitute for itself a nominee, upon notice to Seller not later than five (5) business days prior to the Closing Date.
14.12 Further Assurances. Seller, at any time before or after Closing, shall, at its own expense, execute, acknowledge and deliver any further deeds, assignments, conveyances and other assurances, documents and instruments of transfer reasonably requested by Buyer and shall take any other action consistent with the terms of this Agreement that may reasonably be requested by Buyer for the purpose of transferring and confirming to Buyer, or reducing to Buyer's possession, any or all of the Property or otherwise carrying out the terms of this Agreement.
14.13 Cooperation With Exchange. Each party agrees to reasonably cooperate with the other if such party intends to accomplish a tax-deferred exchange pursuant to Section 1031 or Section 1033 of the Internal Revenue Code of 1986. Buyer and/or Seller may assign this Agreement to an exchange intermediary for the purpose of facilitating such an exchange by the assigning party. Buyer's duty to cooperate shall be limited to the transfer of money to Seller or Seller's designee in exchange for the Property, and in no event shall Buyer act as purchaser or acquirer of any exchange property. Seller's duty to cooperate shall be limited to the transfer of the Property to Buyer or Buyer's designee and in no event will Seller exchange the Property for any exchange property designated by Buyer. The requesting party (10841816.11) 22
16498.10024\41483966.6
shall indemnity and defend and hold the other party harmless from any claims, loss, damages or liability arising out of participation in an exchange.
14.14 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to this Agreement.
14.15 Remedies Cumulative. The remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party.
14.16 Commissions, Indemnity, Disclosure. Each party represents to the other party that there is no broker representing such party in the current transaction, and that the representing party has incurred no liability for any brokerage commission or finder's fee arising from or relating to the transactions contemplated by this Agreement. Seller shall be responsible for any broker commission associated with this purchase. Each party hereby indemnifies and agrees to protect, defend and hold harmless the other party from and against all liability, cost, damage or expense (including without limitation attorneys' fees and costs incurred in connection therewith) on account of any brokerage commission or finder's fee which the indemnifying party has agreed to pay or which is claimed to be due as a result of the actions of the indemnifying party. This Section 14.16 is intended to be solely for the benefit of the parties hereto and is not intended to benefit, nor may it be relied upon by, any person or entity not a party to this Agreement.
14.17 Counterparts/Facsimile/PDF Signatures. This Agreement may be executed in counterparts and when so executed by the parties, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument that shall be binding upon the parties, notwithstanding that the parties may not be signatories to the same counterpart or counterparts. The parties may integrate their respective counterparts by attaching the signature pages of each separate counterpart to a single counterpart.
In order to expedite the transaction contemplated herein, facsimile or pdf signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or pdf document, are aware that the other party will rely on the facsimile or pdf signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.
[Signatures on following page]
(10841816.11) 23
16498.10024\41483966.6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
BUYER:
City of Fontana, a California public agency
By
Its City Mohager
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
City Attorney
SELLER:
Century Sierra, LLC, a California limited tatority
MANAGING MEmBER
{10841816.11) 24
16498. 10024 41483966.6
Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions contained therein.
Dated: September _ 2023 First American Title Insurance Company By:
Name:_
Title:
10841816.11 25
16498 10024\41483966 f
EXHIBIT A
LAND DESCRIPTION
PARCEL A:
PARCEL 3 OF PARCEL MAP NO. 13653, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP ON FILE IN BOOK 167 OF PARCEL MAPS, PAGES 27 THROUGH 29 NCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THE SOUTH 166.67 FEET OF SAID PARCEL 3.
PARCEL B:
THOSE CERTAIN NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ROADWAY AND UTILITIES OVER AND ACROSS A PORTION OF PARCELS 1, 4 AND 5 OF PARCEL MAP NO. 13653, AS PER PLAT RECORDED IN BOOK 167 OF PARCEL MAPS, PAGES 27 THROUGH 29, INCLUSIVE, RECORDS OF SAN BERNARDINO COUNTY,
STATE OF CALIFORNIA, AS SET FORTH IN THAT CERTAIN RECIPROCAL ROADWAY EASEMENT, EXECUTED BY MERVYN'S, A CALIFORNIA CORPORATION ET AL, RECORDED SEPTEMBER 1, 1992 AS INSTRUMENT NO.
More commonly known as: 17133 Valley Blvd, Fontana, CA 92335 (10841816.11) Exhibit "A"
6498.10024\41483966.6
EXHIBIT B
PERSONAL PROPERTY INVENTORY
Room Mix (60 rooms)
1. 141 King beds
2. 3 Queen Beds (ADA Room)
3. 392 Queen beds
4. 2 King 1 bed Suites
5. 2 Queen 2 bed Suites
In Room
1. 16 King mattress sets and associated bedding
85 Queen mattress sets and associated bedding
3. 101 Bed frames
101 Headboards
5. 120 Nightstands
6. 60 Microwaves
7. 60 Mini Fridges
8. 60 PTAC Units
9. 60 Tv's
10. 60 Irons
11. 60 ironing boards
12. 60 Telephones
13. 60 Coffee machines
14. 66 Tables
15. 66 Chairs
16. 174 Lamps
17.58 Room Art
18. All other FFE and anything present in rooms
Front office
1. All Wi-FI/Telephone/Security Camera equipment
2. 1 Brother Printer
1 Kaba Lock key machine (reader/writer)
2 ID scanners
5. 2 TV (used for security cameras
6. 1 PTAC Unit
Miscellaneous equipment and supplies in front office (pens, keys paper, etc.
Managers Office
1. 1 Table
2. 1 Chair
3. 2 Cabinets
In Lobby
1. 1 TV
2. 1 loveseat and 2 chairs
3. 1 Table with chairs
4. 1 PTAC Unit
(10841816.11) Exhibit "B"
16498.10024\41483966.6
In Storage Room
Various operating supplies (toilet paper, soaps, ice buckets, plates etc.) *Exact count fluctuates per operations.
2. 1 Refrigerator
3. 1 PTAC Unit
4. All storage racks.
In Maintenance room
1.2 Water Heaters
2. Various contents of maintenance room (tools, ladders, etc) In Laundry Room
1. 360lb commercial dryers
2. 2 601b commercial washers
3. Various operating supplies (Towels, bedding, blankets, soap, gloves, etc.) *Exact count fluctuates per operations.
Guest Laundry
1. 1 Coin operated laundry machine
2. 1 Coin operated dryer
Breakfast Room
1. Ice machine
2. Waffle Maker
3. Juice Machine
4. Coffee Machine
5. 3 Tables and associated chairs
6. 1 PTAC Unit
Other
1. 38 Security Cameras throughout hotel building
THE FOLLOWING ARE SPECIFICALLY EXCLUDED FROM THE SALE:
1. Vending machines in breakfast room (owned by Ultraserv). No contract, can be removed anytime.
Hotel currently receives a commission check.
2. Personal property in Manager's apartment (Tv's, tables, couches, mattresses, refrigerators, microwaves, etc.).
Computers (including computer in Managers office, which is a personal computer owned by management.)
(10841816.11) EXHIBIT "B"
16498.10024\41483966.6
EXHIBIT C
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the CITY OF FONTANA, a California public agency (the "Transferee"), that withholding of tax under Section 1445 of the Code will not be required upon the transfer of a U.S. real property interest to the Transteree by CENTURY SIERRA, LLC, a California limited liability company (the "Transferor"), the undersigned hereby certifies the following on behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);
2. The Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);
3. The Transferor's U.S. tax identification number is _ and The Transferor's mailing address is
The Transferor understands that this Certificate may be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, Under penalty of perjury I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Transferor.
DATED: , 2023
Century Sierra, LLC, a California limited liability
company
By:.
Name:
Title:
{10841816.11} Exhibit "C"
16498.10024 41482066 6
EXHIBIT D
BILL OF SALE
This Bill of Sale (the "Bill of Sale") is made as of 2023, by Century Sierra, LLC, a California limited liability company ("Transferor").
FOR VALUABLE CONSIDERATION, as set forth in that certain Purchase and Sale Agreement dated _ 2023 (the "Agreement"):
1. Transferor hereby sells, transfers, assigns and delivers to the CITY OF FONTANA, a California public agency ("Transferee"), the personal property described in the Personal Property Inventory attached hereto as Schedule 1 (the "Personal Property") to the extent (i) transferable and owned by Transferor, and (b) located within or used in connection with that certain improved real property commonly known as 17133 Valley Blvd., Fontana, CA 92335 (the "Real Property").
To the extent assignable, Transferor hereby assigns all warranties, guarantees and indemnities (it any), whether those warranties are express or implied, and all similar rights which Transferor may have (if any) against any other manufacturer or supplier of the Personal property or any portion thereof or against any seller, engineer, contractor or builder, in respect of the Personal Property.
The Personal Property and all rights relating thereto are being assigned and transferred to Transferee on an AS-IS basis, without any representation or warranty by Transferor, whether express or implied, and with all faults and defects, if any.
Transferor at any time at or after the date of this Bill of Sale shall execute, acknowledge and deliver any commercially reasonable assignments, conveyances and other assurances, documents and instruments of transfer reasonably requested by Transferee, and shall take any other action consistent with the terms of this Bill of Sale that may reasonably be requested by Transferee for the purpose of granting and confirming to Transferee, or reducing to Transferee's possession, any or all of the Personal Property.
4. This Bill of Sale shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. [Signatures on following page]
{10841816.11) Exhibit "D"
16498.10024\41483966.6
DATED: - 2023
TRANSFEROR:
Century Sierra, LLC, a California limited liability
company
By_
Its
10841816.11} EXHIBIT "B"
16498. 100241414839666
SCHEDULE 1
PERSONAL PROPERTY INVENTORY
[To Be Inserted]
{10841816.11) SCHEDULE 1
16498.10024\41483966.6
EXHIBIT E
GENERAL ASSIGNMENT
This General Assignment (the "Assignment"') is made as of _ by and between Century Sierra, LLC, a California limited liability company ("Century Sierra") and the City of Fontana, a California public agency ("City").
A. Century Sierra, as "Seller", and City, as "Buyer" are parties to that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated _ 2023 (the "Agreement") pursuant to which Century Sierra agreed to sell, and City agreed to purchase, certain improved real property located in Fontana, California and more particularly described in the Agreement ("Real Property").
Century Sierra is party to that certain Letter Agreement dated December 28, 2020 between Century Sierra, as successor-in-interest to Lord Shiva LLC, and Public Storage and its affiliates and/or predecessors-in-interest Shurgard Storage Centers, Inc. and Shurgard Capital Management Corporation (collectively, "Public Storage") regarding the Real Property, which among other things, sets forth certain terms and conditions relating to Public Storage's plans to develop property located adjacent to the Real Property, including the payment of the Fee by Public Storage to the Real Property owner (as described in the Public Storage Agreement).
C. In connection with the Agreement and Closing, (i) Century Sierra has agreed to assign and transfer to City, to the extent assignable and without warranty, certain Contracts, Approvals, Improvements, Personal Property, Plans and Warranties (as such terms are defined below) and (ii) City has agreed to assign and transfer to Century Sierra, to the extent assignable and without warranty, all rights that City may have to the Fee payable under the Public Storage Agreement.
Now therefore, for valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Century Sierra and City hereby agree to the foregoing:
1. Assignment to City. Effective as of the Closing Date (defined in the Agreement), Century Sierra hereby assigns and transfers to City, to the extent assignable and without warranty, the following:
The equipment leases, service and/or maintenance agreements and contracts relating to the Real Property (collectively, the "Contracts")[, as more particularly described in Schedule 1 attached hereto];
B. The permits, licenses, consents, registrations and other similar approvals applicable to the Real Property (collectively, the "Approvals")L, which Approvals are more particularly described in Schedule 2 attached hereto];
C.
improvements used in connection with the operation or occupancy of the Real Property or located upon the Real Property (the "Improvements"); and (3) any and all personal property owned by Century Sierra located within or used in connection with the operation of the Real Property and Improvements (the "Personal Property") (collectively, the "Plans"); and
{10841816.11} Exhibit "E"
16498.10024\41483966.6
D. Any warranties of which Century Sierra is the beneficiary (the "Warranties") with respect to the Improvements.
Assignment to Century Sierra. Effective as of the Closing Date, City hereby assigns and transfers to Century Sierra, to the extent assignable and without warranty, all of City's rights, title and interest to the Fee under the Public Storage Agreement, as successor-in-interest to Century Sierra thereunder, and further confirms that Public Storage may rely upon this Assignment for delivery of the Fee directly to Century Sierra as and when required under the Public Storage Agreement in satisfaction of its obligations thereunder with regard to the payment of the Fee.
Miscellaneous. This Assignment shall not supersede the Agreement and, in the event of conflict between this Assignment and the Agreement, the Agreement shall control. This Assignment shall be binding upon and inure to the benefit of Century Sierra and City and their respective heirs, executors, administrators, successors and assigns. Century Sierra and City agree to execute such additional documents as may be reasonably requested by the other party to the extent reasonably required to effect the intent of this Assignment.
[SIGNATURES ON FOLLOWING PAGE]
{10841816.11} Exhibit "E"
16498.10024\41483966.6
IN WITNESS WHEREOF, Century Sierra and City have executed this Assignment as of the date first above written.
CENTURY SIERRA:
Century Sierra, LLC,
a California limited liability company
By.
Its_
CITY:
City of Fontana, a California public agency
By-
Its
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
City Attorney
{10841816.11) Exhibit "E"
16498.10024\41483966.6
SCHEDULE 1
Note to drafter: List all equipment leases, service and/or maintenance agreements and contracts relating to the Real Property - if none known, delete this schedule and bracketed phrase but leave general assignment of unspecified contracts. Leases should have a separate assignment, so do not assign seller's interest in leases in this document.
(10841816.11) Exhibit "E"
16498.10024\41483966.6
SCHEDULE 2
Note to drafter: List all permits, licenses, consents, registrations and other similar approvals applicable to the Real Property- if none known, delete this schedule and bracketed phrase but leave general assignment of unspecified contracts
(10841816.11) Exhibit "E"
16498.10024\41483966.6
EXHIBIT F
GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
City of Fontana
Attn: Phillip Burum
8353 Sierra Ave.
Fontana, CA 92335
EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 0194-351-15-0-000
Grant Deed
The undersigned Grantor(s) declare(s): City of Fontana is exempt from property taxes X Computed on full value of property conveyed, or
] Computed on full value less value of liens and encumbrances remaining at time of sale. • Unincorporated area X City of Fontana and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, CENTURY SIERRA, LLC, a California limited liability company hereby GRANTS) to
CITY OF FONTANA, a California public agency
the following described real property in the City of Fontana, County of San Bernardino, State of California ("Property"):
SEE ATTACHED EXHIBIT A
THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO:
(a) All liens, encumbrances, easements, covenants, conditions and restrictions of record; (b) All matters which would be revealed or disclosed by an accurate ALTA survey of the Property; (c) A lien not yet delinquent for taxes for real property, and any non-delinquent general or special assessments against the Property; and
(d) Zoning ordinances and regulations and any other laws, ordinances and governmental regulations and restrictions regulating the use, occupancy or enjoyment of the Property (10841816.11) Exhibit "F"
16498.10024\41483966.6
Dated: _ 2023
By: _
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
STATE OF CALIFORNIA
COUNTY OF
→, 2023 before me, _
appeared _ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacityies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:_ - (seal
(10841816.11} Exhibit "F"
16498 10024 41482066 6
EXHIBIT G
[INTENTIONALLY OMITTED]
(10841816.11) Exhibit "G"
16498.10024\41483966.6
EXHIBIT H
ROFR MEMO
RECORDING REQUESTED BY:
First American Title Insurance Company
WHEN RECORDED RETURN TO:
12680 Stanton Avenue
Tustin, California 92782
Attn: Sunit Patel
THE AREA ABOVE IS RESERVED FOR RECORDER'S USE
MEMORANDUM OF RIGHT OF FIRST REFUSAL
THIS MEMORANDUM OF RIGHT OF FIRST REFUSAL (this "Memorandum") is made as of , 2024 between CENTURY SIERRA, LLC, a California limited liability company"Seller"), and CITY OF FONTANA, a public agency organized and operated under the laws of the State of California ("'City").
Seller and City entered into that certain Purchase and Sale Agreement and Joint Escrow Instruction dated › 2023 (as amended from time to time, "Purchase Agreement") pursuant to which the City acquired certain property from Seller located in the City of Fontana and more particularly described in Exhibit A attached hereto ("ROFR Property").
Pursuant to and on the terms set forth in the Purchase Agreement, the City granted to Seller the right of first refusal to purchase the ROFR Property ("ROFR) subject to the City's obligation to comply with the Surplus Land Act as explained in the Purchase Agreement. The ROFR expires sixty (60) months following the date of this Memorandum.
This Memorandum is intended to be recorded in the Official Records of San Bernardino County, California solely for the purpose of evidencing of record the existence of the ROFR. This Memorandum does not modify any of the agreements of Seller and the City contained in the Purchase Agreement, which alone fully expresses the agreements of Seller and the City with respect to the subject matter of the Purchase Agreement. If there shall exist any conflict between the provisions of the Purchase Agreement and those of this Memorandum, the terms of the Purchase Agreement shall govern. [SIGNATURE PAGE FOLLOWS]
{10841816.11) Exhibit "H"
16498.10024\41483966.6
IN WITNESS WHEREOF, Seller and the City have caused this Memorandum to be duly executed as of the day and year first above written.
SELLER:
CENTURY SIERRA, LLC,
a California limited liability company
By:
Name:
Title:
CITY:
CITY OF FONTANA, a California public agency
By: _
Its:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
City Attorney
(10841816.11) Exhibit "F"
16498.10024\41483966.6
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 }
}ss
COUNTY OF }
_ before me, _ _ Notary
Public, personally appeared who proved to me on the basis of atisfactory evidence to be the person whose name is subscribed to the within instrument and knowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and tha by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
{10841816.11} Exhibit "F"
16498 10024 41483966 6
4 notary public or other officer completing this certificate verifies only the identity of the individual who signer he document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that documen STATE OF CALIFORNIA }
} ss
COUNTY OF }
→ 20_, before me, _ Notary
Public, personally appeared → who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
{10841816.11) Exhibit "F"
16498.10024\41483966.6
EXHIBIT A
ROFR PROPERTY
PARCEL A:
PARCEL 3 OF PARCEL MAP NO. 13653, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP ON FILE IN BOOK 167 OF PARCEL MAPS, PAGES 27 THROUGH 29 INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THE SOUTH 166.67 FEET OF SAID PARCEL 3.
PARCEL B:
THOSE CERTAIN NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ROADWAY AND UTILITIES OVER AND ACROSS A PORTION OF PARCELS 1, 4 AND S OF PARCEL MAP NO. 13653, AS PER PLAT RECORDED IN OOK 167 OF PARCEL. MAPS, PAGES 27 THROUGH 29, INCLUSIVE, RECORDS OF SAN BERNARDINO COUNTY,
STATE OF CALIFORNIA, AS SET FORTH IN THAT CERTAIN RECIPROCAL ROADWAY EASEMENT, EXECUTEI Y MERVYN'S, A CALIFORNIA CORPORATION ET AL, RECORDED SEPTEMBER 1, 1992 AS INSTRUMENT NO 2-364457, OFFICIAL RECORDS OF SAID COUNTY
More commonly known as: 17133 Valley Blvd., Fontani, CA 92335 {10841816.11} Exhibit "F"
16408 10024\41483966.6
EXHIBIT I
LIST OF SERVICE CONTRACTS
List of Service/Other Contracts:
1. SureStay Inc. - Franchise Agreement for Hotel
2. Spectrum Enterprise -Tv/Internet/Phone
3. California Choice - Employee Benefits Administrator
4. DormaKabba Lock- Hotel RFID Lock repair/installation
5. Morales Pool Service - Pool/Spa Maintenance.
6. Victors Landscaping - Gardening/Landscaping.
7. Werner Enterprises - Preferred Rate Agreement
8. Corporate Lodging Consultants - Negotiated Rate Contract
9. Old Dominion Freight Line, Inc. - Direct Bill Agreement
10. Visual Matrix - Hotel PMS
11. RumbleFish Pest Control - Pest Control
12. Hidden Eye Security - Fire Alarm Monitor
13. UltraServ Vending - vending machines owned by UltraServ, hotel receives commission check from UltraServ.
Note: Some of the above agreements are month to month. All of the above agreements will be terminated by Seller prior to Close of Escrow.
(10841816.11) Exhibit "P"
16498.10024\41483966.6
CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the Grant Deed dated _ 2023, from Century Sierra, LLC, a California limited liability company, to the City of latap a mut copal corpore acepicy bothe d the City ofFontana olf of the City off _and the Grantee consents to recordation thereof by its duly authorized officer.
Dated: _ 2023 CITY OF FONTANA
By
150881812244839666