PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (“Agreement”) is made as of this _________, 2024 (“Effective Date”), by and between Urban Villages San Marcos, LLC, a California limited liability company (“UVSM”), and City of San Marcos (“City”), with reference to the following facts:
RECITALS
WHEREAS, BOB MORELAND, a married man, as his sole and separate property, (“Seller”) was the fee owner of that certain approximately 0.31 acre real property and all improvements contained thereon commonly known as 318 E Barham Drive, San Marcos, CA 92078 (APN: 220-202-27-00), more particularly described in Exhibit A attached hereto (collectively, the "Seller Property"); WHEREAS, the Seller Property is needed to widen the Barham Drive right of way to accommodate vehicle travel lanes, pedestrian and bicycle circulation and parkway landscaping (collectively, “Barham Drive Improvements”), all in accordance with the standards established by University District Specific Plan (“UDSP”) and subject to a City obligation to convey the Seller Property to UVSM in accordance with the terms of this Agreement, the City acquired the Seller Property on July 10, 2024 (“Moreland Purchase”); WHEREAS, UVSM provided the City with the One Million Five Hundred Thousand dollars ($1,500,000.00) the City paid to Seller (the “Purchase Price”), as well as all transaction, title, legal, and any and all other fees and costs associated with the Moreland Purchase transaction, the parties are entering into this Agreement to accomplish the conveyance of the Seller Property to UVSM subject to an Irrevocable Offer of Dedication and Temporary Construction Easement for the Barham Drive Improvements.
NOW, THEREFORE, the parties hereby agree as follows:
AGREEMENT
Purchase and Sale of the Seller Property. On and subject to the terms and conditions of this Agreement, City hereby agrees, at the Closing, to convey the Seller Property to UVSM, and UVSM hereby agrees to purchase the Seller Property from City.
Purchase Price. In consideration for the foregoing, and on and subject to the terms and conditions of this Agreement, UVSM already paid items (a) and (b) below and will pay items (c) and (d) on or before the Closing (as defined below) (the “Consideration”): (a) an amount equal to the Purchase Price; (b) City's share of prorations and closing costs with respect to close of Escrow for the Moreland Purchase; (c) all closing costs and UVSM's share of prorations payable hereunder with respect to the Closing, and (d) all outstanding costs and expenses incurred by City with respect to the Escrow and the transaction contemplated hereunder.
Opening of Escrow. UVSM and City promptly shall cause the Escrow to be opened for the consummation of the acquisition by UVSM from City of the Seller Property by delivering a fully executed copy of this Agreement to the Escrow Holder, along with such other documents as may be required hereunder to consummate such transaction. This Agreement shall constitute instructions to the Escrow Holder with respect to such transaction. UVSM and City shall execute such additional escrow instructions as reasonably may be required to consummate the transactions contemplated by this Agreement and as UVSM and City may approve, which approval shall not be unreasonably withheld. To the extent such additional escrow instructions conflict with any provisions of this Agreement, the provisions of this Agreement shall control, unless such additional escrow instructions specifically state to the contrary and are executed by both parties.
Irrevocable Offer of Dedication, Temporary Construction Easement. In further consideration of the foregoing, and subject to City’s standard templates and provisions, UVSM hereby agrees to execute and deposit into Escrow an Irrevocable Offer of Dedication in the form attached hereto as Exhibit B for all applicable rights-of-way for roadway and appurtenant facilities, as well as a Temporary Construction Easement in the form attached hereto as Exhibit C, to facilitate the construction of the Barham Drive Improvements.
Closing. The close of Escrow for the Seller Property (the “Closing”) shall occur within ten (10) business days of satisfaction of the Conditions to Closing set forth in section 10, but in no event later than November 1, 2024 (“Outside Date”) unless UVSM, in its sole and absolute discretion, notifies the City and Escrow Holder that the Outside Date has been extended. Escrow Holder shall cause the Deed (as defined below), as well as the Irrevocable Offer of Dedication and Temporary Construction Easement referenced in section 4, above, and section 10.2.2 below, to be recorded in the Official Records of the County of San Diego (the “Official Records”) in the order listed (including filing a separate statement of documentary transfer taxes due so that such amount does not appear on the Deed or otherwise in the Official Records) on the date of the Closing.
Condition of Title and Deed. At the Closing, City shall convey fee simple title to the Seller Property, to UVSM by the Deed, subject only to the items identified in the Policy of Title Insurance (Policy No.: CA-FBSC-IMP-72472-1-24-00209518) dated July 10, 2024 (“Title Policy”), and sections 4, 7, and 10.2.2 of this Agreement.
Title Insurance. On or before the Closing, Chicago Title Company (“Title Company”) shall have issued to UVSM or committed in writing to UVSM's reasonable satisfaction to issue to UVSM the Title Policy with the addition of the IOD and TCE as permitted exceptions, Representations and Warranties of UVSM. UVSM hereby represents and warrants to City as of the Effective Date and as of the date of the Closing, as follows:
Organization, Power and Qualification. UVSM is a limited liability company duly organized, existing and in good standing under the laws of the State of California. UVSM has all requisite power and authority to enter into this Agreement and all of the other documents necessary to consummate the transaction contemplated hereby, and such actions have been and will be authorized by all requisite actions of UVSM.
Due Execution, Binding. This Agreement has been duly executed and delivered by UVSM, and assuming the due execution and delivery of this Agreement by City, constitutes the legal, valid and binding obligation of UVSM, enforceable against UVSM in accordance with its terms.
No Violation. The execution and delivery of this Agreement and the performance of the transactions contemplated hereby does not and will not constitute a violation of nor be a default under or conflict with UVSM's organizational documents, the terms of any contract, lease, indenture, agreement, order, judgment or decree to which UVSM is a party or by which it is bound, and does not and will not, to UVSM's actual knowledge, violate or constitute a default under any statute, rule, regulation, order, decree, judgment or ordinance of any governmental, judicial or arbitral body, whether federal, state local or otherwise (collectively, “Laws”).
Bankruptcy. UVSM is not insolvent or unable to pay its debts as they become due and has no present intent to file any voluntary petition in bankruptcy or to seek relief, protection, reorganization, liquidation, dissolution or similar relief for debtors under any federal or state law, or in equity.
Consents. No approval or consent not previously obtained by any person or entity is necessary in connection with the execution of this Agreement by UVSM or the performance of its obligations under this Agreement. “AS-IS” SALE. TENANCY CONDITION UVSM WILL ACCEPT THE SELLER PROPERTY AT THE CLOSING "AS IS, "WHERE IS," AND "WITH ALL FAULTS" IN ITS EXISTING CONDITION AS OF THE CLOSING WITHOUT ANY REPRESENTATION OR WARRANTY REGARDING ITS CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, OR COMPLIANCE WITH GOVERNMENTAL LAWS, ORDINANCES OR REGULATIONS.
Due Diligence Matters. As of the City’s acquisition of the Seller Property on July 10, 2024, UVSM had conducted and approved its examinations, inspections, testing, studies and investigations (collectively, the “Due Diligence”) of the Seller Property, information regarding the Seller Property, and such documents applicable to the Seller Property. No material change of those conditions shall have occurred at or prior to the Closing.
Representations and Warranties of City. City hereby represents and warrants to UVSM as of the Effective Date as of the date of the Closing, as follows:
Due Execution, Binding. This Agreement has been duly executed and delivered by City, and assuming the due execution and delivery of this Agreement by UVSM, constitutes the legal, valid and binding obligation of City, enforceable against City in accordance with its terms.
No Violation. The execution and delivery of this Agreement and the performance of the transactions contemplated hereby does not and will not constitute a violation of nor be a default under or conflict with City's charter, the terms of any contract, lease, indenture, agreement, order, judgment or decree to which City is a party or by which it is bound, and does not and will not, to the best of City's knowledge, violate or constitute a default under any Laws.
Consents. No approval or consent not previously obtained by any person or entity is necessary in connection with the execution of this Agreement by City or the performance of its obligations under this Agreement.
Conditions to Closing
Conditions of UVSM to Closing. The obligation of UVSM to consummate the Closing shall be subject to the timely satisfaction of, or its waiver of, the following conditions precedent:
Purchase Agreements. City shall have duly executed and delivered into Escrow this Agreement.
Deeds. City shall have executed, notarized and delivered into Escrow a grant deed in the form customarily used by the Title Company for similar transactions granting fee simple title to the Seller Property (the “Deeds”), subject only to the items permitted under this Agreement.
Closing Documents. City shall have duly executed and delivered into Escrow such other agreements or documents reasonably requested by UVSM or Escrow Holder necessary for the consummation of the transactions contemplated by this Agreement for the Closing.
Representations and Warranties. City's representations and warranties set forth in section 9 hereof and elsewhere in this Agreement shall be true and correct in all material respects, as of the Closing.
Material Covenants. City shall have timely performed, satisfied and complied with all material covenants, agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing.
Approval of City Council, California HCD. City shall have obtained approval of this Agreement by the City Council of the City of San Marcos, and approval of the transfer to UVSM contemplated herein from the California Department of Housing and Community Development.
The foregoing conditions are solely for the benefit of UVSM and may be waived only by UVSM. UVSM shall at all times have the right to waive any condition, which waiver or waivers must be in writing to be effective. Notwithstanding anything to the contrary contained in this Agreement, in the event there is a failure of a condition precedent to the Closing in favor of UVSM which UVSM does not elect to waive, this Agreement shall be of no further force or effect, the rights and obligations of UVSM and City hereunder shall terminate and Escrow Holder shall immediately record a first priority deed of trust in favor of UVSM against the Seller Property in an amount of at least One Million Five Hundred Thousand Dollars ($1,500,000) plus such other funds that the parties agree UVSM expended related to the City’s acquisition of the Seller Property (“Deed of Trust”) and return to the applicable party any funds and documents deposited into Escrow by such party.
Conditions of City to Closing. The obligation of City to consummate the Closing shall be subject to the timely satisfaction of, or its waiver of, the following conditions precedent:
Purchase Agreement. UVSM shall have duly executed and delivered into Escrow this Agreement.
Irrevocable Offer of Dedication, Temporary Construction Easement. UVSM shall have duly executed and delivered into Escrow the Irrevocable Offer of Dedication in the form attached hereto as Exhibit B, and the Temporary Construction Easement in the form attached hereto as Exhibit C.
Closing Documents. UVSM shall have duly executed and delivered into Escrow such other agreements or documents reasonably requested by City necessary for the consummation of the transactions contemplated by this Agreement for the Closing.
Representations and Warranties. UVSM's representations and warranties set forth in section 8 hereof and elsewhere in this Agreement shall be true and correct in all material respects.
Material Covenants. UVSM shall have timely performed, satisfied and complied with all material covenants, agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing.
Consideration. UVSM shall have delivered into Escrow funds sufficient to satisfy the Consideration, as well as any and all transactional, legal, and associated Closing Costs arising from the transactions contemplated herein, as described in section 2 above..
Due Authorization. UVSM shall have delivered into Escrow written evidence reasonably satisfactory to City and Escrow Holder that the person who executed this Agreement on behalf of UVSM and any person who executes documents at or for the Closing on behalf of UVSM was and will be duly authorized to do so, and UVSM was and will be bound by UVSM's or their actions.
Approval of City Council, California HCD. City shall have obtained approval of this Agreement by the City Council of the City of San Marcos, and approval of the transfer to UVSM from the California Department of Housing and Community Development.
The foregoing conditions are solely for the benefit of City and may be waived only by City. City shall at all times have the right to waive any condition, which waiver or waivers must be in writing to be effective. Notwithstanding anything to the contrary contained in this Agreement, in the event there is a failure of a condition precedent to the Closing in favor of City which City does not elect to waive, this Agreement shall be of no further force or effect, the rights and obligations of UVSM and City hereunder shall terminate, and Escrow Holder shall immediately record the Deed of Trust against the Seller Property and return to the applicable party any funds and documents deposited into the Escrow by such party.
Disbursements and Other Actions by Escrow Holder. Upon the Closing, Escrow Holder promptly shall undertake all of the following, as applicable:
Recordation. Cause the Deed and any other documents which the parties may mutually direct to be recorded in the Official Records and deliver to each of UVSM and City conformed copies of such recorded documents.
Deliver Agreements. Deliver to each of UVSM and City two executed copies of this Agreement and any other agreements executed by the parties in connection with the transaction contemplated hereby.
Deliver UVSM's Proof of Authority. Deliver to City the proof of authority deposited into Escrow by UVSM pursuant to section 10.2.7 above.
Closing Costs. In connection with the Closing, UVSM agrees that it shall pay all reasonable attorneys' fees incurred by the City in connection with this Agreement, escrow fees, documentary transfer taxes, recording fees, and all other costs customarily payable in connection with a real property closing in the County of San Diego (collectively, “Closing Costs”). Except in the event the Closing does not occur due to the actions or inaction of the City, in which case City shall be responsible, UVSM shall be responsible for the payment of the cancellation and other charges required to be paid by and to the Escrow Holder. [INTENTIONALLY OMITTED]
Default. If either party fails to perform any act required to be performed by it pursuant to this Agreement, fails to observe any term, covenant, agreement or condition herein contained on that party's part to be observed and performed, or if any representation or warranty made by that party is breached as of the Effective Date or the Closing (each an event of “Default”), then the non-defaulting party shall deliver written notice to the defaulting party of such Default. The defaulting party shall have five (5) business days to cure such Default or, if such cure cannot reasonably be completed within such period, to commence and diligently pursue such cure to completion, but in no event shall such Default remain uncured for a period of ten (10) business days after notice. Subject to the terms of sections 10.1 and 10.2 regarding failure of a condition precedent to the Closing, should such Default remain uncured for more than ten (10) business days after notice, the non-defaulting party shall be entitled to all remedies at law or in equity, including the right to cancel this Agreement and seek damages caused by such Default, or seek specific performance of this Agreement.
UVSM Indemnity of City. Except to the extent arising out of the City’s active negligence, breach of this Agreement or willful misconduct, UVSM agrees to defend, indemnify, hold harmless and protect City, by and through City’s counsel, against any and all claims, demands, liabilities, obligations, damages, causes of action, judgments, losses, costs and expenses whatsoever (including, without limitation, relocation and/or goodwill claims, reasonable attorneys' and witness fees) which City may incur or suffer by reason of, or which arise from, are related to and/or are in connection with: (a) the City’s participation in the Moreland Purchase as part of a so-called deferred exchange pursuant to Section 1031 or Section 1033 of the Internal Revenue Code of 1986, as amended, (b) the transactions contemplated by and under the Moreland Purchase and this Agreement; (c) any hazardous materials being released, generated, used, stored, or located on the Seller Property; provided that such claim, demand, liability, obligation, damage, cause of action, judgment, loss, cost and/or expense (including, without limitation, reasonable attorneys' and witness fees) is incurred or suffered by the City as a result of the City’s ownership of the Seller Property pursuant to its acquisition thereof under the Moreland Purchase and subsequent conveyance of the Seller Property pursuant to this Agreement, or (d) as a result of UVSM's default of its obligations under this Agreement beyond any applicable cure period. UVSM’s obligations under this section 15 shall survive the Closing.
Miscellaneous.
Waiver. Any term or provision of this Agreement may be waived by the party which is entitled to the benefits thereof. Any waiver hereunder must be signed by the party against whom enforcement of the waiver is sought. No waiver by any party of any condition, or the breach of any term, covenant, agreement, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be a further or continuing waiver of any such condition or breach of any other term, covenant, agreement, representation or warranty contained in this Agreement. Delay or failure to exercise any right or remedy shall not be deemed a waiver thereof. The rights and remedies in respect to any breach of representations or warranties by any party shall not be affected by any investigation made, or to be made, by or on behalf of any party, or by any party rescinding, or failure to rescind this Agreement or by any other event or matter whatsoever, except by specific and duly authorized written waiver or release.
Intentionally Omitted.
Enforcement and Attorneys’ Fees. If a dispute arises concerning the performance, meaning, or interpretation of any provision of this Agreement or any document executed in connection with this Agreement, the prevailing party in such dispute, shall be awarded any and all costs and expenses incurred by such prevailing party in enforcing, defending, or establishing its rights under this Agreement or such document including without limitation court costs and expert witnesses’ and attorneys’ fees. In addition to the foregoing award of costs and fees, such prevailing party shall also be entitled to recover its court costs and expert witnesses’ and attorneys’ fees incurred in any post judgment proceedings to collect or enforce any judgment. This provision is separate and several and shall survive the merger of this Agreement or any such other document into any judgment on this Agreement or such document.
Binding Effect; Assignment. This Agreement is binding upon and will inure to the benefit of the parties and their respective permitted successors and assigns. Nothing in this Agreement, express or implied, is intended to or will confer on any person other than the parties and their permitted successors and assigns, any rights, remedies or claims under or by reason of this Agreement. This Agreement may not be assigned by City without the express written permission of UVSM, which may be withheld in UVSM's reasonable discretion.
Further Assurances. From time to time, without further consideration, each party shall execute and deliver to the other such other instruments and documents and shall take such other actions as the other party reasonably may request in order more effectively to carry out the intent and accomplish the purposes of this Agreement.
Survival. All representations and warranties contained in this Agreement or in any certificate or other instrument delivered by or on behalf of the parties hereto are given as of the Effective Date and shall survive the execution of this Agreement, the Closing of Escrow and the delivery of any documents pursuant to this Agreement. All covenants contained in this Agreement or in any certificate or other instrument delivered by or on behalf of the parties hereto shall be continuous and survive the execution of this Agreement, the Closing and the delivery of any documents pursuant to this Agreement.
Captions. The captions to Sections of this Agreement have been inserted for identification and reference purposes and shall not be used to determine the construction or interpretation of this Agreement.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into and wholly to be performed within California by California residents.
Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
Brokers. Each party represents to the other that it has not had any contact, dealings or communications with a broker or finder in connection with the transaction contemplated by this Agreement or any other person who can claim a right to a commission or finder's fee. If any broker, finder or other person makes a claim for commissions or finder's fee based upon any contract, dealing or communication with a party, then such party shall indemnify, defend and hold the other party harmless from and against all damages, claims, losses and expenses, including attorneys' fees, arising out of the broker's, finder's or other person's claim.
Relationship between the Parties. UVSM and City agree that (a) the relationship between them is, is intended to be and shall at all times remain, in connection with the transactions contemplated by this Agreement, that of seller and purchaser and (b) neither party is, is intended to be or shall be construed as a partner, joint venturer, alter ego, manager, controlling person or other business associate or participant of any kind of the other party or any of its affiliates and neither party intends to ever assume such status.
Third Parties Not Benefited. This Agreement is made for the purpose of defining and setting forth certain rights and obligations of UVSM and City. It is made for the sole protection of UVSM and City, and UVSM's and City's heirs, executors, administrators, successors and assigns. No other person or entity shall have any rights of any nature under or by reason of this Agreement.
Entire Agreement. This Agreement constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof.
Amendment. This Agreement may be amended only by a written instrument signed by all the parties.
Jurisdiction. Any lawsuits arising out of or in connection with this Agreement shall be brought in the Superior Court of San Diego County, California or the Federal District Court of the Southern District of California in San Diego. The parties hereby consent to the exclusive jurisdiction and venue of the Superior Court of San Diego County, California and the Federal District Court of the Southern District of California in San Diego. Each party agrees that service of process may be made in the manner provided for notices in this Agreement.
Neither Party Deemed Drafter. Each party has thoroughly reviewed and revised this Agreement and has had the advice of counsel prior to the execution hereof, and the parties agree that neither party shall be deemed to be the drafter of this Agreement.
Notices. Any notice which a party is required or may desire to give the other shall be in writing and may be sent by (i) facsimile transmission, (ii) personal delivery, (iii) email with a copy sent by United States registered or certified mail, return receipt requested, postage prepaid, or (iv) Federal Express or similar generally recognized overnight carrier regularly providing proof of delivery, addressed as follows (subject to the right of a party to designate a different address for itself by notice similarly given):
To UVSM: Urban Villages San Marcos, LLC
5550 Carmel Mountain Road, Suite 204
San Diego, CA 92130
Attn: Gary Levitt
Telephone: (858) 361-8555
email: [email protected]
To City: The City of San Marcos
1 Civic Center Drive
San Marcos, CA 92069
Attn: Michelle Bender, City Manager
Telephone: (760) 744-1050, ext. 3115
Fax: (760) 744-7543
With a copy to: City of San Marcos
Lounsbery Ferguson Altona & Peak
960 Canterbury Place, Suite 300
Escondido, CA 92025
Attn: Helen Holmes Peak, City Attorney
Telephone: (760) 743-1226, ext. 108
Fax: (760) 743-9926
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. [SIGNATURE PAGE ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
URBAN VILLAGES SAN MARCOS, LLC,
a California limited liability company
By: Noble Canyon, LLC,
a California limited liability company,
Its: Manager
By:
Name:
Its:
CITY OF SAN MARCOS
By:
Name: Michelle Bender, City Manager
APPROVED AS TO FORM
By: |
Name: Helen Holmes Peak, City Attorney
Accepted this ____ day of _____________ 20__, by:
CHICAGO TITLE COMPANY
By:
Name:
Its:
EXHIBIT “A”
SELLER PROPERTY
[Title Company to Attach]
Error! Unknown document property name.
-8-
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SMRH:4834-4112-3754.1
-13-
UVSM / [SELLER] / PSA 2
101719
20JC-305864
SMRH:4834-4112-3754.1
-1-
UVSM / [SELLER] / PSA 2
101719
20JC-305864
DRAFT as of 09-04-2024