PURchase & sale agreement
between
dyer 18, LLC
Seller
and
THE CITY OF FULLERTON
Purchaser
Table of Contents
Page
1. Intentionally Omitted. 2
2. Subject of Sale. 2
3. Purchase Price. 3
4. Deposit Provisions. 3
5. “As-Is”. “Where-Is”. 5
6. Representations. 7
7. Ongoing Operations. 11
8. Title. 12
9. Closing. 13
10. Default. 17
11. Risk of Loss. 18
12. Purchaser's Review Period. 19
13. Miscellaneous. 20
Schedule A Description of the Land
Schedule B Due Diligence Deliverables
Exhibit 1 Form of Assignment and Assumption of the Lease Exhibit 2 Form of Bill of Sale and Assignment of Warranties Exhibit 3 Form of Grant Deed
THIS PURCHASE & SALE AGREEMENT (this “Contract”), dated as of May __, 2023, 2023 (the “Effective Date”), is made by and between Dyer 18 LLC, a Delaware limited liability company, having an address at 240 Newport Center Drive, Suite 200, Newport Beach, CA 92660 ("Seller") and The City of Fullerton, a California municipal corporation, having an address at 303 W. Commonwealth Ave, Fullerton, CA. 92832 ("Purchaser").
W I T N E S S E T H :
WHEREAS, upon the terms and conditions hereinafter set forth, Seller agrees to sell and convey the Property (as hereinafter defined) to Purchaser and Purchaser agrees to purchase the Property.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree as follows:
Subject of Sale.
Seller agrees to sell and convey to Purchaser and Purchaser agrees to purchase from Seller at the price and upon the terms, provisions and conditions set forth in this Agreement, all of Seller’s right, title and interest in the Property, free and clear of all liens, encumbrances, assessments, easements, and taxes, except for and subject to the Permitted Exceptions, the Existing Lease as defined in section 4.1 below, and the terms and conditions contained in this Contract.
This sale includes all right, title and interest of Seller, in and to the following (collectively, the “Property”):
that certain parcel of real property more particularly described on Schedule A attached hereto (the “Land”); all buildings and all other improvements together with all fixtures erected thereon; all rights-of-way, appurtenances, easements, sidewalks, alleys, gores, strips of land, streets, roads or avenues opened or proposed, adjoining, adjacent. subservient to, or used in connection with the Land as more specifically described in Schedule A, and to any award made or to be made in lieu thereof and in and to any unpaid award for damage to the Land by reason of change of grade of any street; and all personal property located on and used in connection with the Property, if any, consisting of but not limited to (a) all property documents (excluding Proprietary Information (as defined in Section 11.1); (b) all keys and combinations to all doors, cabinets, safes, enclosures and other locking items or areas on or about the Property in Seller’s possession; and (c) all tangible personal property, including, without limitation, all tools, supplies, electric switch gear, telephone systems, office equipment, safety gear and fire safety equipment fixtures, in each case to the extent owned by Seller, located on, and used exclusively in connection with the occupation or operation of, the Property (collectively, the “Personal Property”); and all warranties and/or guaranties, if any, which are transferable at no cost to Seller, to which Seller is a beneficiary, concerning the Property and/or the Personal Property (the “Warranties”).
Purchase Price.
The purchase price for the Property is NINE MILLION FIVE HUNDRED and EIGHTY THOUSAND and 00/100 DOLLARS ($9,580,000.00) (the “Purchase Price”) payable by Purchaser to Seller as follows:
Within three (3) Business Days (as hereinafter defined) following the Effective Date, the sum of FIFTY THOUSAND and 00/100 DOLLARS ($50,000.00) (the “Deposit”) shall be deposited by electronic wire transfer of immediately available funds to an escrow account designated by the Title Company (as hereinafter defined) (in such capacity, “Escrowee”); and The balance of the Purchase Price, subject to adjustment and proration as provided in this Contract, shall be deposited to Escrow no later than one day prior to Closing, subject to the satisfaction of all Purchaser’s conditions of Closing.
Upon the opening of escrow, Purchaser shall deposit with Escrowee and Escrowee shall immediately disburse to Seller without further instruction from Purchaser or Seller the amount of One Hundred and No/100 Dollars ($100.00) as independent consideration (the “Independent Contract Consideration”) for Seller’s execution of this Contract and agreement to sell the Property to Purchaser. The Independent Contract Consideration shall be applicable as a credit against the Purchase Price upon closing but shall be nonrefundable and retained by Seller in the event of any termination of this Contract.
Deposit Provisions.
Upon the Closing, Escrowee shall apply the Deposit and Independent Consideration to the Purchase Price, and disburse all remaining funds according to the settlement statement.
In the event Seller shall be entitled to the Deposit pursuant to Section 9.1, Escrowee shall pay the Deposit to Seller, who shall retain the Deposit in accordance with Section 9.1 below.
In the event this Contract is terminated by Purchaser pursuant to and in accordance with the terms of Section 5.2 or 7.1 or as a result of a default by Seller pursuant to Section 9.2, then Escrowee shall pay the Deposit to Purchaser.
Purchaser may instruct the Escrowee to invest the Deposit in such short term, high grade securities, interest bearing bank accounts, bank certificates of deposit or bank repurchase agreements as mutually agreed by Escrowee, Seller and Purchaser, and all interest and income thereon shall belong to Purchaser and shall be remitted to Purchaser as and when received, irrespective of the disposition of the Deposit itself.
Escrowee, by signing this Contract at the end hereof where indicated, signifies its agreement to hold the Deposit for the purposes as provided in this Contract. In the event of any dispute, Escrowee shall have the right to deposit the Deposit in court to await the resolution of such dispute. Except for liability resulting from the negligence or willful misconduct of Escrowee, Escrowee shall not incur any liability by reason of any action or nonaction taken by it in good faith or pursuant to the judgment or order of a court of competent jurisdiction. Escrowee shall have the right to reasonably rely upon the genuineness of all certificates, notices and instruments delivered to it pursuant hereto, and all the signatures thereto or to any other writing received by Escrowee purporting to be signed by any party hereto, and upon the truth of the contents thereof.
Except as otherwise provided for in Section 3.1, Escrowee shall not pay or deliver the Deposit to any party unless written demand is made therefor and a copy of such written demand is delivered to the other party. If Escrowee does not receive a written objection from the other party to the proposed payment or delivery within five (5) Business Days after such demand is served on such party, Escrowee is hereby authorized and directed to make such payment or delivery. If Escrowee does receive such written objection within such five (5) Business Day period or if for any other reason Escrowee in good faith shall elect not to make such payment or delivery, Escrowee shall forward a copy of the objections, if any, to the other party or parties, and continue to hold the Deposit unless otherwise directed by written instructions from the parties to this Contract or by a judgment of a court of competent jurisdiction. In any event, Escrowee shall have the right to refrain from taking any further action with respect to the subject matter of the escrow until it is reasonably satisfied that such dispute is resolved or action by Escrowee is required by an order or judgment of a court of competent jurisdiction. “As-Is”. “Where-Is”.
Disclaimer. Purchaser acknowledges and agrees that it has been provided the opportunity to thoroughly inspect, investigate and exercise due diligence, and the opportunity to fully and independently become familiar with, and fully satisfy itself regarding, any and all matters relating to the Property. Without limiting the foregoing, pursuant to that certain Standard Industrial/Commercial Single-Tenant Lease - Net dated as of February 27, 2020, by and between Seller, as lessor, and The Illumination Foundation, a California non-profit public benefit corporation (“Lessee”), as lessee (as the same has been amended from time to time, the “Existing Lease”), and that certain Guaranty of Lease, dated as of February 27, 2020, made by Purchaser for the benefit of Seller (the “Lease Guaranty”), Lessee has been the sole occupant of the entire Property since 2020 and has completed comprehensive tenant improvements in connection with its occupancy and use of the Property, and Purchaser has been the guarantor of certain obligations of Lessee under the Existing Lease. As such, Purchaser’s knowledge of the current condition of the Property exceeds that of Seller. EXCEPT FOR THE SPECIFIC COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS CONTRACT, PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR ITS CONDITION, INCLUDING, WITHOUT LIMITATION, (I) THE VALUE OF THE PROPERTY; (II) THE INCOME BEING, OR THAT MAY BE DERIVED FROM THE PROPERTY; (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON, INCLUDING, WITHOUT LIMITATION, THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (IV) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY (PURCHASER AFFIRMING THAT PURCHASER HAS NOT RELIED ON SELLER’S SKILL OR JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE) ; (V) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY INCLUDING, WITHOUT LIMITATION, ANY PATENT OR LATENT DEFECTS OR DEFICIENCIES WITH RESPECT TO THE PROPERTY ; (VI) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY OF OR BELOW THE SURFACE OF THE PROPERTY; (VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES ACT OR ANY SIMILAR STATE LAWS; (VIII) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS INCORPORATED INTO THE PROPERTY, INCLUDING ANY IMPROVEMENTS THERETO; (IX) COMPLIANCE WITH ANY ENVIRONMENTAL REQUIREMENTS (DEFINED BELOW), ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR OTHER REQUIREMENTS ; (X) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS (AS DEFINED BELOW) AT, ON, UNDER, OR ADJACENT TO THE PROPERTY; (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF ANY OF THE DUE DILIGENCE DELIVERIES; (XII) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO PURCHASER; (XIII) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS; (XIV) DEFICIENCY OF ANY UNDERSHORING; (XV) DEFICIENCY OF ANY DRAINAGE; (XVI) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE; (XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; (XVIII) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS, AND ELECTRICITY; (XIX) USAGES OF ANY ADJOINING PROPERTY; (XX) ACCESS TO, AND EASEMENTS AND RIGHTS OF WAY WHICH ARE A BURDEN UPON OR WHICH BENEFIT, THE PROPERTY OR ANY PORTION THEREOF; (XXI) ANY EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS, OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF; (XXII) THE EXISTENCE OR NON EXISTENCE OF UNDERGROUND STORAGE TANKS UPON OR BENEATH THE SURFACE OF THE PROPERTY; AND (XXIII) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY.
Certain Definitions.
For purposes of this Contract, “Hazardous Materials” shall mean any hazardous or toxic materials, substances, or wastes, including, without limitation, (A) substances defined as “hazardous substances,” “hazardous materials,” “hazardous waste,” “pollutant,” “infectious waste,” or “toxic substances,” or words of similar meaning or regulatory effect under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) (“CERCLA”), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) (“RCRA”), the Hazardous Materials Transportation Act (49 U.S.C. § 5101, et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.), the Clean Air Act (42 U. S. C. § 7401, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.), the Refuse Act (33 U.S.C. § 407), Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health and Safety Code §§ 25300, et seq., Hazardous Substance Cleanup Bond Act of 1984, California Health and Safety Code §§ 25385, et seq., and related statutes including sections 25356.1-25356.4 of the California Health and Safety Code, Porter-Cologne Water Quality Control Act, California Water Code §§ 13000 et seq., as any or all of such acts are amended from time to time; (B) those materials identified in §§ 66680 through 66685 and §§ 66693 through 66740 of Title 22 of the California Administrative Code, Division 4, Chapter 30, as amended from time to time; (C) any substance defined as a “hazardous substance”, “hazardous waste”, “extremely hazardous waste”, “RCRA hazardous waste”, “waste” or “hazardous material” in §§ 25115, 25117, 25122.7, 25120.2, 25124, 25281, 25316 or 25501 of the California Health and Safety Code, as amended, or listed pursuant to § 25140 of the California Health and Safety Code, as amended; (D) any chemical or other substance regulated by the California Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code § 25249.5, et seq., as amended; (E) any substance defined as a “waste” or “hazardous substance” in § 13050 of the California Water Code, as amended; (F) any substance listed in California Labor Code §§ 6501.7 or 9004, as amended; (G) any materials, substances, or wastes which are toxic, ignitable, corrosive, or reactive, and which are regulated by any local governmental authority, any agency of the State of California, or any agency of the United States of America; (H) any substance the presence of which at the Property causes, or threatens to cause, a nuisance and/or a trespass upon the Property, or to adjacent properties, or poses, or threatens to pose, a hazard to the health or safety of human beings; (I) asbestos (including, without limitation, asbestos containing materials), petroleum and petroleum based products, urea formaldehyde foam insulation, polychlorinated biphenyls (PCBs), Freon and other chlorofluorocarbons, flammable, explosive, infectious, carcinogenic, mutagenic, or radioactive materials, petroleum or any substance containing or consisting of petroleum hydrocarbons (including, without limitation, gasoline, diesel fuel, motor oil, waste oil, grease or any other fraction of crude oil), paints and solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonium compounds, polychlorinated biphenyls, radon and radon gas, and electromagnetic or magnetic materials, substances, or emissions; and (J) those substances defined as any of the foregoing in the regulations adopted and publications promulgated pursuant to each of the aforesaid laws.
For purposes of this Contract, the term “Environmental Requirements” shall mean all laws, ordinances, statutes, codes, rules, regulations, agreements, judgments, orders, and decrees, now or hereafter enacted, promulgated, or amended, of the United States, the states, the counties, the cities, or any other political subdivisions in which the Property is located, and any other political subdivision, agency or instrumentality exercising jurisdiction over the owner of the Property, the Property, or the use of the Property, relating to pollution, the protection or regulation of human health, natural resources, or the environment, or the emission, discharge, release or threatened release of pollutants, contaminants, chemicals, or industrial, toxic, or hazardous substances or waste or Hazardous Materials into the environment (including, without limitation, ambient air, surface water, ground water or land or soil). “As-Is”. Seller is not liable or bound in any manner by any oral or written statements, representations or information pertaining to the Property, or the operation thereof, furnished by any real estate broker, agent, employee, servant or other person. Purchaser further acknowledges and agrees that Purchaser will purchase and accept the Property in its condition as of Closing, and the Property is and shall be transferred by Seller to Purchaser, in an “AS IS, WHERE IS, WITH ALL FAULTS, LIABILITIES, DEFICIENCIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN” condition, whatever that condition may be, and that Seller has no obligations to make repairs, replacements or improvements, whether before or after the Closing. Purchaser represents, warrants and covenants to Seller that, Purchaser will solely rely upon Purchaser’s own investigation and knowledge of the Property and all other matters relating to the Property, and not on any information provided or to be provided by Seller or anyone acting on Seller’s behalf. Except as otherwise provided in this Contract, Purchaser further assumes all risk of loss, damage, expense, and liability whatsoever in connection with the Property (or any portion thereof) from and after the Closing, and Seller shall not be liable for any lack of repair, maintenance, or improvements to the Property.
Purchaser Indemnity. EXCEPT AS OTHERWISE PROVIDED HEREIN, PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND, SAVE, AND HOLD HARMLESS SELLER, AND EVERY ENTITY AFFILIATED WITH SELLER, AND ALL OF THEIR OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, ATTORNEYS, PARTICIPANTS, AND INDEPENDENT CONTRACTORS, AND THE SUCCESSOR OF EACH AND EVERY ONE OF THEM (COLLECTIVELY, THE “SELLER PARTIES”), FROM AND AGAINST ANY AND ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS, CAUSES OF ACTION, DAMAGES, LOSSES, FEES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES AND COURT COSTS) IN ANY WAY RELATING TO, OR IN CONNECTION WITH OR ARISING OUT OF PURCHASER’S INSPECTION OF THE PROPERTY AND ANY OTHER ACTIVITIES OF PURCHASER WITH RESPECT TO THE PROPERTY PRIOR TO THE CLOSING HEREUNDER (“LIABILITIES”). THIS INDEMNITY SHALL NOT APPLY TO ANY LIABILITIES ARISING OUT OF SELLER’S OR ITS MANAGER’S, AGENTS’ OR EMPLOYEES’ GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Waiver and Release.
AS PART OF PURCHASER’S AGREEMENT TO PURCHASE AND ACCEPT THE PROPERTY ON AN “AS IS, WHERE IS, WITH ALL FAULTS, LIABILITIES, DEFICIENCIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN” BASIS, AND NOT AS A LIMITATION ON SUCH AGREEMENT, PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY AND ALL ACTUAL OR POTENTIAL RIGHTS PURCHASER MIGHT HAVE REGARDING ANY FORM OF WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY EXCEPT FOR THE SPECIFIC COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS CONTRACT. SUCH WAIVER IS ABSOLUTE, COMPLETE, TOTAL, AND UNLIMITED IN EVERY WAY. SUCH WAIVER INCLUDES, BUT IS NOT LIMITED TO, A WAIVER OF EXPRESS WARRANTIES, IMPLIED WARRANTIES, WARRANTIES OF FITNESS FOR A PARTICULAR USE OR PURPOSE, WARRANTIES OF MERCHANTABILITY, WARRANTIES OF HABITABILITY, STRICT LIABILITY RIGHTS, AND CLAIMS, LIABILITIES, DEMANDS, OR CAUSES OF ACTION OF EVERY KIND AND TYPE, WHETHER STATUTORY, CONTRACTUAL, OR UNDER TORT PRINCIPLES, AT LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO, CLAIMS REGARDING DEFECTS WHICH MIGHT HAVE BEEN DISCOVERABLE, CLAIMS REGARDING DEFECTS WHICH WERE NOT OR ARE NOT DISCOVERABLE, PRODUCT LIABILITY CLAIMS, PRODUCT LIABILITY TYPE CLAIMS, ALL OTHER EXTANT OR LATER CREATED OR CONCEIVED OF STRICT LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS.
EXCEPT FOR THE SPECIFIC COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS CONTRACT, PURCHASER HEREBY FULLY AND FOREVER RELEASES, ACQUITS AND DISCHARGES SELLER, SELLER’S AFFILIATES, THE PARTNERS, TRUSTEES, BENEFICIARIES, SHAREHOLDERS, MEMBERS, MANAGERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS AND REPRESENTATIVES OF EACH OF THEM, AND THEIR RESPECTIVE HEIRS, SUCCESSORS, PERSONAL REPRESENTATIVES AND ASSIGNS, OF AND FROM, AND HEREBY FULLY AND FOREVER WAIVES ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION, SUITS, PROCEEDINGS, DEMANDS, RIGHTS, DAMAGES, COSTS, EXPENSES OR OTHER COMPENSATION WHATSOEVER, WHETHER KNOWN OR UNKNOWN, DIRECT OR INDIRECT, FORESEEABLE OR UNFORESEEABLE, ABSOLUTE OR CONTINGENT, THAT PURCHASER NOW HAS OR MAY HAVE OR WHICH MAY ARISE IN THE FUTURE ARISING OUT OF, DIRECTLY OR INDIRECTLY, OR IN ANY WAY CONNECTED WITH THE PROPERTY OR ANY OTHER MATTERS RELATING TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION: (A) ANY CONDITION OF ENVIRONMENTAL CONTAMINATION OR POLLUTION AT THE PROPERTY, HOWEVER AND WHENEVER OCCURRING (INCLUDING, WITHOUT LIMITATION, THE CONTAMINATION OR POLLUTION OF ANY SOILS, SUBSOIL MEDIA, SURFACE WATERS OR GROUNDWATERS AT THE PROPERTY) INCLUDING, BUT NOT LIMITED TO, HAZARDOUS MATERIALS; (B) TO THE EXTENT NOT ALREADY INCLUDED IN (A) ABOVE, THE PRIOR, PRESENT OR FUTURE EXISTENCE, RELEASE OR DISCHARGE, OR THREATENED RELEASE, OF ANY HAZARDOUS MATERIALS AT THE PROPERTY, HOWEVER AND WHENEVER OCCURRING; (C) THE VIOLATION OF, OR NON-COMPLIANCE WITH, ANY APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, HOWEVER OR WHENEVER OCCURRING; (D) THE CONDITION OF THE SOIL AT THE PROPERTY; (E) THE CONDITION OF IMPROVEMENTS INCLUDING, WITHOUT LIMITATION, THE STRUCTURAL INTEGRITY AND SEISMIC COMPLIANCE OF SUCH IMPROVEMENTS; (F) THE INACCURACY, UNRELIABILITY, OR INCOMPLETENESS OF, OR ANY DEFECT OR MISTAKE IN, ANY DUE DILIGENCE DELIVERIES; (G) TO THE EXTENT NOT ALREADY COVERED BY ANY OF THE FOREGOING CLAUSES (A) THROUGH (F), ABOVE, THE USE, MAINTENANCE, DEVELOPMENT, CONSTRUCTION, CONVERSION OF USE, OWNERSHIP OR OPERATION OF THE PROPERTY BY SELLER OR ANY OF SELLER’S PREDECESSOR(S)-IN-INTEREST IN THE PROPERTY; (H) ANY MATTERS ARISING FROM OR RELATING TO ANY LEASES; OR (I) ANY MATTERS BASED ON SELLER’S ALLEGED SUPERIOR KNOWLEDGE OR FAILURE TO DISCLOSE.
AS PART OF THE PROVISIONS OF THIS SECTION, BUT NOT AS A LIMITATION THEREON, BUYER HEREBY AGREES, REPRESENTS, AND WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO MATTERS WHICH ARE KNOWN OR DISCLOSED, AND BUYER HEREBY WAIVES ANY AND ALL RIGHTS AND BENEFITS WHICH IT NOW HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE, OR LOCAL LAW, RULES, OR REGULATIONS, INCLUDING WITHOUT LIMITATION, SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA (“SECTION 1542”), WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” PURCHASER HEREBY ACKNOWLEDGES, AND REPRESENTS AND WARRANTS TO SELLER THAT IT HAS READ, IS FAMILIAR WITH, AND FULLY UNDERSTANDS THE PROVISIONS OF SECTION 1542.
IN ACCORDANCE WITH THE FOREGOING, AND TO THE MAXIMUM EXTENT PERMITTED BY LAW, BUYER HEREBY AGREES, REPRESENTS, AND WARRANTS THAT IT UNDERSTANDS THAT FACTUAL MATTERS NOW UNKNOWN TO PURCHASER MAY HAVE GIVEN, OR MAY HEREAFTER GIVE, RISE TO CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES, OR EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED, AND UNSUSPECTED, AND PURCHASER FURTHER AGREES, REPRESENTS, AND WARRANTS THAT THE WAIVERS AND RELEASES HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION, AND THAT PURCHASER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE, AND ACQUIT SELLER FROM ANY SUCH UNKNOWN CAUSES OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES, AND EXPENSES WHICH MIGHT IN ANY WAY BE INCLUDED IN THE WAIVERS AND MATTERS RELEASED AS SET FORTH IN THIS SECTION. THE PROVISIONS OF THIS SECTION ARE MATERIAL AND INCLUDED AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY PURCHASER IN EXCHANGE FOR SELLER’S PERFORMANCE HEREUNDER. SELLER HAS GIVEN BUYER MATERIAL CONCESSIONS REGARDING THIS TRANSACTION IN EXCHANGE FOR PURCHASER AGREEING TO THE PROVISIONS OF THIS SECTION. PURCHASER HAS INITIALED THIS SECTION TO FURTHER INDICATE ITS AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF. PURCHASER HEREBY WAIVES THE PROVISIONS OF SECTION 1542, AND OF ANY STATUTE, PRINCIPLE OF COMMON LAW OR CASE LAW WHICH WOULD LIMIT THE SCOPE OF THE FOREGOING WAIVER AND RELEASE, IN CONNECTION WITH MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVER AND RELEASE.
PURCHASER’S INITIALS: ___________
Survival. The provisions of this Section 4 shall survive the Closing or the earlier termination of this Contract.
Representations.
Seller’s Representations. Seller represents that as of the Effective Date:
Seller is, and at the Closing shall be, a limited liability company duly formed and in good standing under the laws of the State of Delaware, and is authorized to do business in and is in good standing in the State of California.
The execution, delivery and performance of this Contract in accordance with its terms, does not violate the operating agreement of Seller, or, to Seller’s knowledge, any organizational document of Seller, or any contract, agreement, commitment, order, judgment or decree to which Seller is a party or by which it is bound.
Seller has the right, power and authority to make and perform its obligations under this Contract.
This Contract is a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms.
Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
Except for matters of record, as disclosed in the Due Diligence Deliveries, or as permitted under this Contract, Seller has not entered into any service, supply, maintenance, or other similar agreements (or any amendments, modifications, extensions or supplements thereto) to which Seller is a party or which affect the Property or the operation of any part thereof and which would be binding upon the Property or Purchaser after Closing.
To Seller’s knowledge, Seller has not received written notice of any pending or threatened condemnation proceeding against the Premises or any portion thereof.
As of the Effective Date, to Seller’s knowledge, Seller has not received written notice of any material litigation, claim, action or proceeding pending or threatened before or by any court, public board or body or governmental or administrative agency or instrumentality by any person or entity in any manner affecting the Property that has not been disclosed in writing by Seller. For purposes of this paragraph, “material litigation, claim, action or proceeding” shall refer to any litigation, claim, action or proceeding in any manner affecting the Property with respect to which the value of the damages or other redress sought exceeds $25,000.00.
To the actual knowledge of Seller, Seller has not placed any hazardous waste, toxic substances, or related materials (“Hazardous Materials”) on, under, in, or about the Property in any material quantity, or transported any Hazardous Materials in any material quantity to or from the Property.
Update and Survival; Knowledge. The representations set forth in Section 5.1 constitute representations and warranties by Seller which are now and (subject to matters contained in any notice given pursuant to the next succeeding sentence) shall, in all material respects, be true and correct at the Closing. If Seller, after the execution of this Contract, learns of, or has a reason to believe that any of the representations and warranties contained in Section 5.1 may cease to be true, Seller shall give prompt notice to Purchaser (which notice shall include copies of the instrument, correspondence, or document, if any, upon which Seller’s notice is based). Upon receiving such notice, Purchaser shall have the right to accept such revised representation and warranty and proceed with the Closing or to terminate this Contract on the same basis that Purchaser may have terminated this Contract in accordance with Section 9.2 below. As used in Section 5.1, the phrase “to Seller’s knowledge” shall mean the actual, current knowledge of Jeremy Ogulnick, without the duty to make investigation or inquiry and of which there shall be no imputed knowledge. There shall be no duty imposed or implied to investigate, inspect, or audit any such matters, and there shall be no personal liability on the part of any of such individual. The representations made in Section 5.1 and any update of such representations shall survive the Closing for a six (6) month period (the “Survival Period”). Following the Closing, no claim for a breach of any representation or warranty of Seller shall be actionable or payable (a) if the breach in question results from or is based on a condition, state of facts or other matter which was known to Purchaser prior to Closing, (b) unless the valid claims for all such breaches collectively aggregate more than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) (the “Floor”), in which event the amount of such claims exceeding the Floor shall be actionable, and (c) unless written notice containing a description of the specific nature of such breach shall have been given by Purchaser to Seller prior to the expiration of the Survival Period and an action for such breach shall have been commenced by Purchaser against Seller within the Survival Period.
Liability for Misrepresentations. If any representation of Seller shall fail to be true in any material and adverse respect and Purchaser shall have knowledge of such untrue representation prior to Closing, Purchaser’s sole remedy shall be to terminate this Contract, and receive the return of the Deposit and upon the receipt of same, this Contract shall be null and void and of no further force or effect and, except for those provisions expressly stated to survive the termination of this Contract, neither party shall have any rights or obligations against or to the other. Seller shall have the option, but not the obligation, to rescind Purchaser’s termination of this Contract in order to provide Seller with the opportunity to make such representation true, provided that in no event will such cure period result in an extension of the Closing Date. If the Closing shall take place without Purchaser making an objection to an untrue representation of which Purchaser shall have knowledge, Purchaser shall be deemed to have waived all liability of Seller by reason of such untrue representation. For purposes of this Section 5.3, ‘knowledge’ is deemed to include, without limitation, any and all matters contained in the Due Diligence Deliveries (as hereinafter defined) delivered to or made available for inspection by Purchaser. The provisions of this Section 5.3 shall survive the Closing or termination of this Contract.
Purchaser’s Representations. Purchaser represents that as of the Effective Date and as of the Closing:
The execution, delivery and performance of this Contract in accordance with its terms, do not violate the operating agreement of Purchaser, or any organizational document of Purchaser, or any contract, agreement, commitment, order, judgment or decree to which Purchaser is a party or by which it is bound; Purchaser has the right, power and authority to make and perform its obligations under this Contract; Purchaser is a California municipal corporation duly formed, validly existing and in good standing under the laws of the State of California; and This Contract is a valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.
Escrow
Opening Escrow. The parties agree to open an escrow with Escrowee in accordance with this Contract. This Contract constitutes the joint escrow instructions of Purchaser and Seller, and the escrow agent to whom these instructions are delivered (“Escrow Agent”) is hereby empowered to act under this Contract.
Following the mutual execution of this Contract by Seller, Purchaser will have thirty-five (35) calendar days from the date of execution to take the Contract before the Fullerton City Council (“City Council”) for final approval. Seller’s offer to sell, at the price and on the terms contained in this Agreement, may not be revoked during this thirty (30) day period. Upon acceptance by the City Council, this Agreement shall be irrevocably binding upon both parties in accordance with the terms contained herein. If this Agreement is not accepted by the City Council during such thirty-five (35) day period, Purchaser shall immediately notify Seller and this Agreement shall immediately terminate without any further action by either party. Thereupon, the Deposit shall be returned to Purchaser and the parties shall thereafter have no further obligations to one another hereunder other than those that expressly survive the termination of this Agreement.
Grant Deed. Seller shall execute a Grant Deed in the form of Exhibit “3” attached hereto (the “Deed”) and deliver the same to Escrow Agent to be held and released in accordance with this Contract. As soon as possible after opening of escrow, Purchaser will deposit the executed Deed with Escrow Agent on Seller’s behalf.
Additional Instruments. Purchaser and Seller agree to deposit with Escrow Agent any additional instruments as may be necessary to complete the transaction contemplated by this Contract.
Insurance. Insurance policies for fire or casualty are not to be transferred, and Seller will cancel its own policies concurrently with the Closing.
Title.
Title Commitment. Promptly following the Effective Date, Seller shall request to be issued and delivered to Purchaser a title commitment for the Property (the “Title Commitment”) issued by Commonwealth Land Title Company (the “Title Company”), whose address is set forth in Section 12.4 below, accompanied by a copy of all recorded documents affecting the Property listed as exceptions in Schedule B of the Title Commitment and all documents referenced in Schedule A thereof. Seller shall deliver to Purchaser a copy of the most recent survey of the Property in Seller’s possession, if any (as updated by Purchaser subsequent to the Effective Date, the “Survey”). Within ten (10) days following Purchaser’s receipt of the Title Commitment but in no event later than twenty-one (21) days prior to the originally scheduled Closing Date (the “Title Objection Date”), Purchaser shall furnish Seller with notice of any objection Purchaser has to the Title Commitment which are not Permitted Exceptions; provided, however, Seller shall have no obligation to cure any such objections. Any matters reflected on the Title Commitment (as it may be revised from time to time) as of the Title Objection Date to which Purchaser does not object, shall be deemed Permitted Exceptions. Following the Title Objection Date, Purchaser shall notify Seller within five (5) Business Days of becoming aware of any other defects, encumbrances, encroachments or other objections to title that are not Permitted Exceptions and were not previously disclosed on the Title Commitment or Survey, of any objection thereto. Any defects, encumbrances, encroachments or other objections to title that are reflected on the Title Commitment and Survey and that are not timely objected to in accordance with this Section 7.1 shall be deemed Permitted Exceptions. Seller shall notify Purchaser in writing within five (5) Business Days after receipt of a timely delivered notice from Purchaser (“Seller’s Notice Period”) as to whether or not Seller elects to remove or cure such objections. If Seller notifies Purchaser that Seller has determined not to remove any objections or fails to state that Seller has determined to remove any objections, Purchaser shall have the right to elect, within three (3) Business Days after receipt of such notice from Seller or lapse of Seller’s Notice Period, as applicable, but in no event later than the expiration of the Purchaser’s Review Period, either (i) to accept such title as Seller is able to convey, without any reduction of the Purchase Price or any credit or allowance on account thereof or any other claim against Seller, in which case all objections shall be deemed Permitted Exceptions, or (ii) to terminate this Contract, in which event the Deposit shall be returned to Purchaser, this Contract shall terminate, and Purchaser and Seller shall have no further rights or obligations under this Contract except with respect to the provisions hereof which by their terms expressly survive the termination of this Contract. If Purchaser does not notify Seller of its election within such three (3) Business Day period (or, if earlier, on or before the expiration of Purchaser’s Review Period) then Purchaser shall be deemed to have elected (i) above.
Status of Title. Purchaser shall accept title to the Premises and consummate the transaction contemplated by this Contract subject to (a) title exceptions created or suffered by Purchaser, (b) the title exceptions deemed Permitted Exceptions under Section 7.1 above, and (c) non-delinquent real estate taxes not yet due (the title exceptions whether liens, encumbrances, defects, encroachments or other objections described in (a), (b), and (c) herein sometimes referred to collectively as “Permitted Exceptions”). Notwithstanding anything in this Contract to the contrary, Seller shall be obligated to discharge on or prior to Closing, any deeds of trust, mortgages or other liens in monetary amounts affecting the Property which are not Permitted Exceptions.
Closing.
Closing Date. The closing of the transaction contemplated hereby (the “Closing”) shall occur on the tenth (10th) day after the approval of this Contract by the Fullerton City Council, or on such date as mutually agreed upon by the parties hereto (the “Closing Date”).
Closing Expenses.
Seller’s Expenses. Seller shall pay (i) one-half (1/2) of any escrow or closing charge of the Title Company; (ii) the cost of the standard CLTA coverage portion of the title premium for the Title Policy in the amount of the Purchase Price; and (iii) all costs, including without limitation, those costs relating to the payoff of existing encumbrances and other expenses, in connection with curing any liens or defects required to be cured by Seller under this Contract.
Purchaser’s Expenses. Purchaser shall pay (i) one-half (1/2) of any escrow or closing charge of the Title Company; (ii) the cost of the premium for extended coverage portion of the Title Policy along with the costs of any endorsements; (iii) the cost of recording the Deed; (iv) if, and to the extent that the transfer of the Property to Purchaser is not exempt therefrom, any city or county documentary or transfer taxes payable on account of the conveyance of the Property; and (v) outstanding obligations of Purchaser as Guarantor under the Lease Guaranty for the payment of certain costs incurred by Seller and payable by Lessee under the Existing Lease in the amount of $147,464.89 in the event Lessee does not agree to remit payment of these obligations.
The provisions of this Section shall survive the Closing or earlier termination of this Contract.
Closing Deliveries.
On or before the Business Day preceding the Closing Date, Seller shall deliver to Title Company (unless otherwise provided below):
the Grant Deed (the “Deed”) executed by Seller being a California statutory grant deed in the form of Exhibit 3 attached; the Assignment and Assumption of the Lease executed by Seller in the form annexed hereto as Exhibit 1; duly executed certificate of Seller in the applicable form set forth in Treasury Regulations §1.1445-2(b)(2) and California Form 593-C; the Bill of Sale and Assignment of Warranties, executed by Seller in the form of Exhibit 2 annexed hereto; keys, combinations and codes to all locks and security devices to the Premises in Seller’s possession (which may be left at the Premises or available for pickup at Seller’s offices); any other documents, affidavits and other deliveries required by applicable law or local custom in order to close the transactions contemplated herein and any other documents, affidavits and other deliveries reasonably required by Title Company which do not create any further liability or obligations on the part of Seller.
On or before the Business Day preceding the Closing Date (unless otherwise provided below), Purchaser shall deliver to Title Company, as the case may be:
the balance of the Purchase Price as provided in Section 3 hereof, delivered to Title Company by wire transfer of immediately available funds no later than 11:00 a.m. Pacific Time on the Closing Date; the Assignment and Assumption of the Lease executed by Purchaser in the form annexed hereto as Exhibit 1; evidence of Purchaser’s organizational authority, reasonably satisfactory to Title Company; and Any and all documents, affidavits and other deliveries required by applicable law or local custom in order to effectuate this transaction and any other documents, affidavits and other deliveries reasonably required which do not create any further liability or obligations on the part of Purchaser.
Adjustments and Costs. The following items shall be credited, debited and otherwise adjusted as of the date of Closing, and the resulting calculation shall be an adjustment to the Purchase Price payable at Closing pursuant to this Contract (where appropriate, such adjustments shall be made on the basis of an actual year of 365/366 days, Seller to have the last day (i.e. with Seller to have revenues and to be responsible for expenses through and including the day prior to the date of Closing, and Purchaser to have the revenues and to be responsible for expenses on and after the date of Closing), unless otherwise provided):
Rents and other amounts payable by the tenant under the Existing Lease. Purchaser shall pay to Seller any rents, fees or other amounts actually due and which are attributable to any period prior to the Closing Date. Seller retains the right after Closing to collect all delinquent rent and other charges owing to Seller by any lawful means. The provisions of this paragraph shall survive the Closing.
Seller and Purchaser acknowledge that Lessee is responsible for the payment of real and personal property taxes, water, electricity, and other utility services, pursuant to the terms of the Existing Lease. Accordingly, at Closing, there shall be no adjustment or apportionment with respect to any such obligations.
In the event, on the date of Closing, the precise figures necessary for any of the foregoing adjustments are not capable of determination, the adjustments shall be made on the basis of the good faith estimates of Purchaser and Seller (using currently available information), which shall be final and binding on the parties.
Conditions to Closing.
Notwithstanding anything to the contrary contained in this Contract, the obligation of Purchaser to close and pay the Purchase Price in accordance with the terms of this Contract is expressly conditioned upon the fulfillment by and as of the time of the Closing of each of the conditions listed below, provided that Purchaser, at its election, evidenced by written notice delivered to Seller at or prior to the Closing, may waive all or any of such conditions:
Seller’s representations and warranties contained in Section 5.1 of this Contract shall be true and correct in all material respects as of the Closing Date, as further provided in Section 5.2; The Title Company shall have issued, or shall have irrevocably committed to issue, a standard coverage ALTA Owner’s Policy of Title Insurance insuring the title and interest of Purchaser in and to the Premises in the amount of the Purchase Price (the “Title Policy”), without endorsement, upon receipt of payment of the premium therefor payable by Purchaser, subject only to the Permitted Exceptions; Seller shall have complied in all material respects with all of its material obligations under this Contract; provided, however, that if the Closing does not occur solely by reason of Seller’s default under this Contract, Seller shall have the right, within five (5) Business Days following written notice of such default from Purchaser, to cure the applicable default, and the scheduled Closing Date shall be automatically extended to allow for the passage of such five (5) Business Day period.
Notwithstanding anything to the contrary contained in this Contract, the obligation of Seller to close in accordance with this Contract is expressly conditioned upon Purchaser’s representations and warranties contained in Section 5.4 of this Contract being true and correct in all material respects and Purchaser shall have complied in all material respects with all of its material obligations under the Contract.
Default.
Purchaser’s Default. If Purchaser should default on any of its material obligations under this Contract and Purchaser fails to cure such default within seven (7) Business Days (but in no event shall the Closing be extended to allow Purchaser to cure such default) following receipt of written notice from Seller, Seller may elect to cancel this Contract by giving notice to Purchaser and Escrowee. The parties hereto agree that the damages that Seller will sustain as a result of such default will be substantial but will be difficult to ascertain. Accordingly, the parties agree that in the event that Seller shall elect to terminate this Contract as a result of such default, Escrowee is hereby directed to pay the Deposit to Seller, who shall retain the Deposit as and for its liquidated damages and sole and exclusive remedy hereunder, and not as a penalty, in which event this Contract shall be null and void and of no further force or effect except for those provisions expressly stated to survive the termination of this Contract. THE PARTIES ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING THIS SECTION BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES AND AS SELLER’S EXCLUSIVE REMEDY AGAINST PURCHASER IN THE EVENT THE CLOSING DOES NOT OCCUR AND AS SELLER’S SOLE AND EXCLUSIVE REMEDY AGAINST PURCHASER ARISING FROM SUCH FAILURE OF THE SALE TO CLOSE. BY THEIR SEPARATELY EXECUTING THIS SECTION 10.1 BELOW, PURCHASER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS CONTRACT WAS EXECUTED. NOTWITHSTANDING THE FOREGOING, THE FOREGOING SHALL NOT LIMIT SELLER’S RIGHT TO RECOVER FROM PURCHASER, IN ADDITION TO THE FOREGOING LIQUIDATED DAMAGES, ANY AMOUNTS TO WHICH IT MAY BE ENTITLED PURSUANT TO THE INDEMNITY PROVISIONS OF THIS CONTRACT. THE PARTIES FURTHER ACKNOWLEDGE AND AGREE THAT, NOTWITHSTANDING ANYTHING CONTAINED IN THIS CONTRACT TO THE CONTRARY, THE DEPOSIT SHALL BE RETURNED TO PURCHASER IN THE EVENT: (I) PURCHASER IS NOT THEN IN DEFAULT AND TERMINATES THIS CONTRACT PURSUANT TO ANY OF ITS RIGHTS TO DO SO EXPRESSLY CONTAINED IN THIS CONTRACT; OR (II) SELLER TERMINATES THIS CONTRACT FOR ANY REASON OTHER THAN PURCHASER’S DEFAULT. _________________ ______________
Purchaser’s Initials Seller’s Initials
Seller’s Default. If the transactions contemplated by this Contract shall not be closed solely by reason of Seller’s default of any of its material obligations under this Contract and Seller fails to cure such default within seven (7) Business Days following receipt of written notice from Purchaser (with the Closing Date being extended for a like period if required to effectuate such cure), Purchaser’s sole remedy for Seller’s default shall be to elect either to cause the refund of the Deposit to Purchaser and upon the making of such refund, this Contract shall be null and void and of no further force or effect except for those provisions expressly stated to survive the termination of this Contract. In the event Purchaser terminates this Contract pursuant to clause (i) of this Section 9.2, Seller shall reimburse to Purchaser, all actual, documented, out of pocket costs incurred by Purchaser for title examinations, title insurance commitments, reasonable attorneys’ fees, surveys, soil tests, architectural services, engineering services, site plans, reports, environmental reports and studies, and other diligence activities related in any way to Purchaser’s assessment of the Property accrued through the date of such termination, such reimbursement not to exceed Twenty-Five Thousand and 00/100 Dollars ($25,000.00) in the aggregate. Notwithstanding anything contained herein to the contrary, Seller’s covenant to pay such Purchaser’s costs and expenses shall survive the termination of this Contract and the return of the Deposit. Purchaser hereby waives all other rights and remedies that it might have, including but not limited to, the right to sue for damages, arising from Seller's default, the right to file a lis pendens or other similar notice against the Property.
Purchaser’s Obligations. Notwithstanding anything to the contrary set forth in in this Contract, Purchaser’s right to terminate the Contract shall be limited to Purchaser’s dissatisfaction with title in accordance with Section 7.1, the failure of a condition precedent for the benefit of Purchaser in accordance with Section 8.5(a), or as a result of a default by Seller pursuant to Section 9.2. Except for the foregoing, Purchaser shall have no contingencies to its obligations at Closing, including, without limitation, any financing contingency or any contingency based on the grant, allocation, distribution, assignment or appropriation of public or private funds.
Due Diligence Deliveries.
Seller has, prior to the date hereof, delivered to Purchaser or made available for Purchaser’s review copies of all documents related to the Property listed on Schedule B attached hereto, to the extent in Seller’s possession (the “Seller Due Diligence Deliveries”). Seller shall use commercially reasonable efforts to cause Lessee to deliver all non-confidential and non-proprietary information with respect to the Property in Lessee’s possession or control, but without representation or warranty of any kind from Seller (the “Lessee Due Diligence Deliveries”; and, together with the Seller Due Diligence Deliveries, collectively, the “Due Diligence Deliveries”). Seller has not made an independent investigation to determine the truth or accuracy of any such documents and materials and shall have no liability to Purchaser for any inaccuracy, misrepresentation or omission in such documents or materials. Notwithstanding anything to the contrary contained herein, Seller shall have no obligation to deliver to Purchaser (i) those documents, reports, presentations, summaries and the like prepared for any of Seller’s partners or investors in connection with its consideration of the acquisition or sale of the Property, (ii) Seller’s attorney-client privileged materials, (iii) appraisals, or (iv) any information which is subject to a confidentiality agreement between Seller and a third party (collectively, “Proprietary Information”). Upon the Closing hereunder, Purchaser shall be deemed to have acquired the Property subject to all information, matters and requirements referenced in Due Diligence Deliveries whether or not Purchaser has elected to review same.
Time shall be of the essence with respect to each and every provision of this Contract.
Miscellaneous.
Broker. Seller and Purchaser represent to each other that neither party has dealt with any broker or real estate consultant in connection with the transaction contemplated by this Contract. Seller and Purchaser shall indemnify, defend and hold the other free and harmless from and against any liabilities, damages, costs or expenses (including, but not limited to, reasonable attorneys’ fees and disbursements) suffered by the indemnified party arising from a misrepresentation or a breach of any covenant made by the indemnifying party pursuant to this Section. The provisions of this Section shall survive the Closing or termination of this Contract.
Assignment of this Contract. This Contract may not be assigned by Seller without the consent of Purchaser, except to effectuate a tax-deferred like-kind exchange. Except as provided in this Section or Section 12.21, Purchaser may not assign this Contract and/or its rights hereunder without the written consent of Seller, which consent may be withheld in Seller’s sole and absolute discretion. Purchaser shall be permitted, however, to assign this Contract and the right to purchase the Property to a Purchaser Affiliate without the consent or approval of Seller. For purposes of this Contract, “Purchaser Affiliate” means any entity, agency, instrumentality, department, subsidiary, or subdivision that controls, is controlled by, or is under common control with Purchaser. No assignment of this Contract by Purchaser shall relieve the entity named as Purchaser herein from its obligations hereunder.
Attorneys’ Fees. If either party institutes a legal proceeding against the other party in connection with this Contract, the losing party in such proceeding shall reimburse the prevailing party all reasonable attorneys’ fees paid by the prevailing party in connection with such proceeding. The provisions of this Section shall survive the Closing or termination of this Contract.
Notices. All notices hereunder to Seller, Purchaser, Escrowee or the Title Company shall be in writing and sent by certified or registered mail, return receipt requested, or may be sent by Federal Express or other overnight courier which obtains a signature upon delivery, or may be sent via email, or may be delivered by hand delivery addressed to such party at the address of such party set forth below or at such other address as such party shall designate from time to time by notice:
SELLER:
Dyer 18 LLC
c/o Arrimus Capital
240 Newport Center Drive Suite #200
Newport Beach, CA. 92660
Attn: Ryan Ogulnick
Email: [email protected]
with a copy to:
Wolf, Rifkin, Shapiro, Shulman & Rabkin, LLP
11400 W. Olympic Blvd., 9th Floor
Los Angeles, California 90064
Attn: Christopher L. Muno
Email: [email protected]
PURCHASER:
Attn:
Email:
ESCROWEE/ TITLE COMPANY
Commonwealth Land Title Company
4100 Newport Place Drive, Suite 120
Newport Beach, CA 92660
Attn: Kelly Ralph
Email: [email protected] / [email protected]
Notices shall be deemed given, in the case of mailing, three (3) Business Days after deposited in the United States mail, or, in the case of overnight courier, one (1) Business Day after deposited with the overnight courier (for next Business Day delivery) or, in the case of hand delivery, the date actually delivered to or rejected by the intended recipient, or, in the case of email, upon the transmission of such email. Notices on behalf of the respective parties may be given by their attorneys and such notices shall have the same effect as if in fact subscribed by the party on whose behalf it is given. Notwithstanding the foregoing provisions of this Section, (a) notices served by hand delivery shall be deemed served on the date of delivery if delivered at or prior to 5:00 P.M. Pacific Time on a Business Day and on the next Business Day if delivered after 5:00 P.M. Pacific Time on a Business Day or at any time on a non-Business Day and (b) notices served by email shall be deemed served on the date of transmission if sent at or prior to 5:00 P.M. Pacific Time on a Business Day and on the next Business Day if sent after 5:00 P.M. Pacific Time on a Business Day or at any time on a non-Business Day.
Further Assurances. The parties each agree to do such other and further acts and things, and to execute and deliver such instruments and documents (not creating any obligations or liabilities additional to those otherwise imposed by this Contract), as either may reasonably request from time to time, whether at or after the Closing, in furtherance of the purposes of this Contract. The provisions of this Section shall survive the Closing for three (3) months.
Survival and Merger. The acceptance of the Deed by Purchaser shall be deemed to be a full performance and discharge of every agreement and obligation on the part of the Seller to be performed pursuant to the provisions of this Contract, except those which are herein specifically stated to survive the Closing, and Seller shall have no further liability with respect to any such agreement or obligation of Seller.
Recording. Purchaser shall not record this Contract or any memorandum thereof and any such recording shall be null and void and shall constitute a default hereunder.
Successors and Assigns. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
Entire Agreement. This Contract and the Schedules and Exhibits annexed hereto constitute the entire agreement between the parties hereto with respect to the subject matter hereof, and all understandings and agreements heretofore or simultaneously had between the parties hereto are merged in and are contained in this Contract and said Schedules and Exhibits.
Waiver and Modifications. The provisions of this Contract may not be waived, changed, modified or discharged orally, but only by an agreement in writing signed by the party against which any waiver, change, modification or discharge is sought.
Captions and Titles. The captions or section titles contained in this Contract and the Index, if any, are for convenience and reference only and shall not be deemed a part of the text of this Contract.
Construction. The terms “hereof,” “herein,” and “hereunder,” and words of similar import, shall be construed to refer to this Contract as a whole, and not to any particular article or provision, unless expressly so stated. All words or terms used in this Contract, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require.
Non-Business Days. The term “Business Day” shall mean a day that is not a Saturday, Sunday or national holiday. If a party is required to perform an act or give a notice on a date that is not a Business Day, the date such performance or notice is due shall be deemed to be the next Business Day.
Governing Law and Jurisdiction; Waiver of Jury Trial. This Contract is to be governed and construed in accordance with the laws of the State of California, without regard to its conflicts of law rules. Purchaser and Seller hereby irrevocably submit to the exclusive jurisdiction of the State and United States District courts located within the County in which the Property is located in respect of any suit or other proceeding brought in connection with or arising out of this Contract, and waive all objections to jurisdiction and venue of such courts. PURCHASER and Seller hereby waive any rights to trial by jury in any action, proceedings or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this CONTRACT, including, without limitation, the relationship of PURCHASER and Seller or any claim of injury or damage relating to the foregoing or the enforcement of any remedy hereunder. The provisions of this subsection shall survive the Closing or earlier termination of this Contract.
Counterparts; Electronic Signature. This Contract may be executed in two or more counterparts and each of such counterparts, for all purposes, shall be deemed to be an original but all of such counterparts together shall constitute but one and the same instrument, binding upon all parties hereto, notwithstanding that all of such parties may not have executed the same counterpart. The execution of this Contract may be effected by hand written signatures delivered via facsimile, electronic mail or other electronic means (including pdf), and any signatures so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. With respect to any signatures delivered via facsimile or other electronic means, each party shall deliver their original ink signatures to the other party promptly following request therefor, provided that failure to deliver such original ink signatures shall not affect the validity of the electronic signatures that were delivered.
No Third Party Benefits. This Contract is made for the sole benefit of Seller and Purchaser and their respective successors and assigns and no other person shall have any right, remedy or legal interest of any kind by reason of this Contract.
Submission not an Offer. The submission of this Contract to any party by Seller shall not be construed as an offer, nor shall Purchaser have any rights with respect thereto, unless and until Seller shall execute a copy of this Contract and deliver the same to Purchaser.
Severability. If any provision of this Contract is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination will not affect the remaining provisions of this Contract, all of which will remain in full force and effect.
Insurance. Purchaser acknowledges that Seller’s insurance policies will not be transferred to Purchaser.
Proposed Tax Free Exchange. Either Purchaser or Seller may desire to close this transaction as a part of a transaction that would qualify under Section 1031 of the Internal Revenue Code for non-recognition treatment (the “Exchange”). Such Exchange may take the form of a “forward exchange” or a “reverse exchange,” as such “reverse exchange” is permitted pursuant to Internal Revenue Service Revenue Procedure 2000-37. At the other party’s request, Purchaser or Seller shall execute such documents and take such other action as may reasonably be requested for the purpose of the Exchange. Such cooperation shall not entail any liability to such party beyond its existing obligations under this Contract and neither party will be required to take title to or contract for the purchase of any other property, nor shall the Closing be delayed as the result of any such exchange.
INDEPENDENT COUNSEL. EACH PARTY TO THIS CONTRACT ADMITS, ACKNOWLEDGES AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO CONSULT WITH AND BE REPRESENTED BY INDEPENDENT COUNSEL OF SUCH PARTY’S CHOICE IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF THIS CONTRACT. EACH PARTY FURTHER ADMITS, ACKNOWLEDGES AND REPRESENTS THAT IT HAS NOT RELIED ON ANY REPRESENTATION OR STATEMENT MADE BY ANY OF THE ATTORNEYS OR REPRESENTATIVES OF THE OTHER PARTY WITH REGARD TO THE SUBJECT MATTER, BASIS, OR EFFECT OF THIS CONTRACT.
Confidentiality. Purchaser and Seller at all times shall keep the terms and conditions of this Contract, and all documents and information received or obtained in connection with the transaction contemplated hereby, confidential, except to the extent necessary to (a) comply with applicable laws and regulations, (b) discuss the same with such party’s consultants, advisors, lenders and investors, and (c) carry out the obligations set forth herein. Any disclosure to consultants, advisors, lenders or investors pursuant to clause (b) of the preceding sentence shall indicate that the information is confidential and shall require it to be so treated by the recipient. Notwithstanding the foregoing, the restrictions set forth in this Section shall not apply to any information that is or becomes generally known or available to the public other than as a result of a disclosure by a party in violation of this Section. The provisions of this Section shall survive the Closing or earlier termination of this Contract.
Purchaser’s Delivery of Work Product. In the event this Contract is terminated for any reason prior to the Closing, Purchaser shall, promptly deliver and assign to Seller, at no cost to Seller but without any representation or warranty by Purchaser, copies of all surveys, environmental reports and other physical condition reports generated by or for Purchaser with respect to the Property.
Limited Liability. The obligations of Seller under this Contract and under all of the documents referenced herein are intended to be binding only on the Property and shall not be personally binding upon, nor shall any resort be had to, any other properties of Seller or the private properties of any member of Seller or any trustee, partner, member, manager, officer, director, employee or affiliate of Seller.
Seller’s Maximum Aggregate Liability; Minimum Claim. Notwithstanding any provision to the contrary contained in this Contract or any documents executed by Seller pursuant hereto or in connection herewith, the maximum aggregate liability of Seller in connection with the Property and/or the sale thereof to Purchaser, including, without limitation, for Seller’s breaches of any representations, warranties or covenants in this Contract or in any documents executed by Seller pursuant hereto or in connection herewith shall not exceed One Hundred Thousand and 00/100 Dollars ($100,000.00) in the aggregate. Notwithstanding the foregoing or anything to the contrary contained in this Contract, if the Closing occurs, Purchaser hereby expressly waives, relinquishes and releases any right or remedy available to it at law, in equity or under this Contract to make a claim against Seller for damages that Purchaser may incur, or to rescind this Contract and the transaction, as the result of any of Seller’s representations or warranties being untrue, inaccurate or incorrect if (a) Purchaser knew that such representation or warranty was untrue, inaccurate or incorrect at the time of the Closing, or (b) Purchaser’s damages as a result of Seller’s breach of any representations, warranties or covenants in this Contract or in any documents executed by Seller pursuant hereto or in connection herewith are reasonably estimated to aggregate less than the Floor, in which event the amount of such claims exceeding the Floor shall be actionable. The provisions of this Section shall survive the Closing. [signature page follows]
IN WITNESS WHEREOF, the parties hereto have duly executed this Contract as of the date set forth below such party’s signature.
SELLER:
DYER 18 LLC,
a Delaware limited liability company
By: _____________________
Name:
Title:
Date: _____________________
PURCHASER:
THE CITY OF FULLERTON
a California municipal corporation
By: _____________________
Name:
Title:
Date: _____________________
ACCEPTANCE BY ESCROW HOLDER
The undersigned hereby acknowledges that it has received executed counterparts or a fully executed copy of the foregoing Contract of Sale and agrees to act as Escrowee thereunder and to be bound by and perform the terms thereof as such terms apply to Escrowee.
Dated: ___________________, 2023
COMMONWEALTH LAND TITLE COMPANY
By:
Name:
Title:
SCHEDULE A
DESCRIPTION OF LAND
Address
3535 W. Commonwealth Avenue, Fullerton, CA 92833
Assessor Parcel No.
030-040-15
Legal Description
The Land referred to herein below is situated in the City of Fullerton, in the County of Orange, State of California, and is described as follows:
Parcel A:
Parcel 2, in the City of Fullerton, County of Orange, State of California, as per map recorded in Book 63, Page 15 of Parcel Maps, in the Office of the County Recorder of said County.
Parcel B:
A Non-Exclusive easement for Joint Access, Pedestrian and Vehicular Traffic over that portion of Parcel 3, in the City of Fullerton, County of Orange, State of California, as Per Map Recorded in Book 63, Page 15 of Parcel Maps, in the Office of the County Recorder of said County, which portion is delineated on a Map Marked Exhibit “1” attached to that certain instrument entitled “Termination of Reservation of Joint Access and Reciprocal Easement Agreement and Replacement Easement Agreement” recorded April 22, 2002, as Instrument No. 20020334465 Official Records of said Orange County, California.
Site Area
33,356+/- square feet or 0.766+/- acres
EXHIBIT 1
FORM OF ASSIGNMENT AND ASSUMPTION OF THE LEASE
KNOW ALL MEN that __________ a __________, having an address at _____________ (the "Assignor") in consideration of Ten and 00/100 ($10.00) Dollars and other good and valuable consideration, received from __________, a ________, having an address at _________ ("Assignee"), does hereby assign, transfer and deliver unto Assignee, all of its right, title and interest in and to that certain lease, dated _______, between ______ and ______ (the “Lease”) at the premises known as ______________________ (the “Premises”) together with all rents payable under the Lease, and all benefits and advantages to be derived therefrom, to hold and receive them unto Assignee, and together with all rights against guarantors, if any, of the obligations of the tenant under the Lease.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns, forever, from and after the date hereof, subject to the terms, covenants, conditions and provisions of the Lease and subject as aforesaid.
AND Assignee does hereby acknowledge receipt of the Lease, and does hereby (a) accept the within assignment and (b) assume the performance of all the terms, covenants and conditions of the Lease on the part of the lessor which are to be performed under the Lease and which arise from and after the date hereof.
This Assignment and Assumption of the Lease (this “Assignment”) is made without warranty or representation by Assignor and without recourse to Assignor in any manner whatsoever, express or implied except as expressly set forth in the Contract of Sale dated _______________, 2019 (the “Purchase Contract”)[, which Purchase Contract has been assigned by the purchaser thereunder to Assignee]. Nothing in this Assignment shall be construed to modify or limit any provisions in the Purchase Contract and in the event of any inconsistency between this Assignment and the Purchase Contract, the latter shall govern and control.
This Assignment shall inure to the benefit of Assignee and Assignor and their respective successors and assigns, and shall be governed by the laws of the State of California, without regard to its conflicts of law rules. This Assignment may not be modified, altered or amended, or its terms waived, except by an instrument in writing signed by the parties hereto.
Notwithstanding anything to the contrary in this Assignment, to the extent that Assignor continues to have liability after the date hereof with respect to the Premises, Assignor reserves and retains such benefits under the Lease as are necessary or desirable for Assignor to defend or protect itself with respect to or to assert any rights relating to any matter for which Assignor may continue to have liability from and after the date hereof; provided, however, said benefits reserved and retained by Assignor pursuant to this Section shall exist jointly with Assignee’s benefits under the Lease, and such benefits may be enforceable by each of Assignor and Assignee to the extent of their respective liability or damages for any matters relating thereto. Assignee and Assignor agree to cooperate with the reasonable requests of the other party in enforcing their respective benefits under the Lease to the extent such benefits are reserved by Assignor pursuant to the terms of this paragraph.
At any time or from time to time after the date hereof, at the request of Assignor or Assignee and without further consideration, each party hereto and its respective successors or assigns, shall execute and deliver, or shall cause to be executed and delivered, such other instruments of assumption and take such other actions as the other party hereto may reasonably request to effect the assignment to and assumption by Assignee of the Lease as contemplated hereby.
None of the provisions of this instrument are intended to be, nor shall they be construed to be, for the benefit of any third party. [SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment this [_____] day of [___________], which Assignment is effective as of the date that Assignee acquires fee simple interest in and to the Premises.
ASSIGNOR:
By: ________________
Name:______________
Title:______________
ASSIGNEE:
By: ________________
Name:______________
Title:______________
EXHIBIT 2
FORM OF bill of sale AND ASSIGNMENT OF WARRANTIES
_____________________("Seller") in in connection with its conveyance this day of Real Property located at _____________________________, , and for and in consideration of the sum of ONE HUNDRED DOLLARS ($100.00) and other good and valuable consideration to it paid by _______________, having an address at _________(“Buyer”), the receipt and sufficiency of which are hereby acknowledged, does hereby grant, bargain, sell, transfer, assign and deliver unto Buyer all of Seller's right, title and interest in and to the Personal Property and the Warranties.
This Bill of Sale and Assignment of Warranties is made without warranties, express or implied. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Contract of Sale, dated as of __________ ___, 202_, by and between Seller and Buyer[, which Contract of Sale has been assigned by the original buyer thereunder to Buyer].
TO HAVE AND TO HOLD the Personal Property and Warranties unto Buyer, its successors and assigns, to its own use and benefit forever.
IN WITNESS WHEREOF, the said Seller has hereunto set its hand and seal as of the ___ day of _________, 202_.
SELLER:
EXHIBIT 3
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
[ASSIGNEE]
Space above this line for Recorder’s Use
MAIL TAX STATEMENTS TO:
DOCUMENTARY TRANSFER TAX $
…. Computed on the consideration or value of property conveyed; OR …. Computed on the consideration or value less liens or encumbrances remaining at time of sale.
Signature of Declarant or Agent determining tax – Firm Name
Order No.
Escrow No.
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, ____ ___________________________, hereby grants to _______________________, the real property in the City of _________, County of ____________, State of California, described on Exhibit “A” attached hereto and incorporated herein by reference (the “Property”).
The Property conveyed hereby is subject to (i) non-delinquent general and special real property taxes; (ii) matters of record; and (iii) all matters that would be disclosed or apparent by a survey and/or inspection of the Property.
Dated: ___________________
By:
Name:
Title:
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
SCHEDULE B
DUE DILIGENCE DELIVERIES
Seller will deliver to City any reports, test results or other data in Seller’s possession or control that was acquired by Seller in connection with its investigation and remediation of any environmental condition of the Property, including any reports relating to the condition of the Property which are delivered to or received from any governmental City or third party, together with any other non-proprietary information whatsoever in its possession or control pertaining to the environmental condition of the Property 5465020.1
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