CHVR-57135\2750811.3
REAL PROPERTY TRANSFER AGREEMENT AND JOINT ESCROW INSTRUCTIONS
BETWEEN
CHEVRON U.S.A. INC., A PENNSYLVANIA CORPORATION
AND
CITY OF SAN PABLO, A CALIFORNIA MUNICIPAL CORPORATION
City of San Pablo, County of Contra Costa, State of California
REAL PROPERTY TRANSFER AGREEMENT AND JOINT ESCROW INSTRUCTIONS
TABLE OF CONTENTS
Section Page
CHVR-57135\2750811.3 1
RECITALS .................................................................................................................................. 1 AGREEMENT ............................................................................................................................. 1
1. DEFINITIONS, INTERPRETATION, AND EXHIBITS. ..................................................... 1
2. SALE AND PURCHASE OF THE PROPERTY, PURCHASE PRICE AND PAYMENTS..................................................................................................................... 8
3. INSPECTIONS AND APPROVALS. ................................................................................ 8
4. TRANSFEROR’S OBLIGATIONS PRIOR TO CLOSING ............................................... 13
5. REPRESENTATIONS AND WARRANTIES. ................................................................. 13
6. PROPERTY CONDITION; AS-IS PURCHASE. ............................................................. 16
7. TRANSFEREE’S RELEASE AND INDEMNIFICATION. ................................................ 17
8. CONDITIONS PRECEDENT TO CLOSING. ................................................................. 20
9. COSTS AND PRORATIONS. ........................................................................................ 21
10. CLOSING AND ESCROW. ............................................................................................ 22
11. DAMAGE, DESTRUCTION AND CONDEMNATION. .................................................... 23
12. DEFAULT AND REMEDIES. ......................................................................................... 23
13. NOTICES. ..................................................................................................................... 25
14. GOVERNING LAW AND RESOLUTION OF DISPUTES. .............................................. 26
15. MISCELLANEOUS. ....................................................................................................... 27
16. ESCROW AGREEMENT ............................................................................................... 29
17. ADDITIONAL OBLIGATIONS. ....................................................................................... 29
18. GENERAL PROVISIONS. ............................................................................................. 29
EXHIBIT A – REAL PROPERTY DESCRIPTION
EXHIBIT B – DEED
EXHIBIT C – PROPERTY DOCUMENTS
1 REAL PROPERTY TRANSFER AGREEMENT AND JOINT ESCROW INSTRUCTIONS
This REAL PROPERTY TRANSFER AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (the “Agreement”), dated as of __________, 2023 for reference purposes only, is between CHEVRON U.S.A. INC., a Pennsylvania corporation (“Transferor”) and CITY OF SAN PABLO, a California municipal corporation (“Transferee”).
RECITALS
A. Transferor desires to transfer its interest in certain unimproved real property located in the City of San Pablo (the “City”), County of Contra Costa (“County”), State of California (“State”), and Transferee desires to accept said transfer, on the terms and conditions set out in this Agreement, which unimproved real property is referred to below as the “Property”.
The Property is commonly known as 2001 Rumrill Boulevard, San Pablo, California.
B. Transferee would like to own the Property for the benefit of its residents and the public in general, and Transferor would like to see such occur.
C. In consideration of the mutual promises set out in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the Parties agree to be bound by this Agreement.
AGREEMENT
1. DEFINITIONS, INTERPRETATION, AND EXHIBITS.
1.1 Definitions. In this Agreement, these capitalized words or expressions have the following meanings:
“Adjusted Purchase Price” means the Purchase Price required to be paid, if any, and all prorations, adjustments, and credits required to be made under the Agreement.
“Affiliate” means any legal entity which, directly or indirectly, controls, is controlled by, or is under common control with, another legal entity. An entity is deemed to control another if it owns directly or indirectly at least 50% of the shares or interests entitled to vote.
“Agreement” is defined in the introductory paragraph, including all exhibits, which are part of this Agreement.
“Applicable Law(s)” means any law, regulation, rule, statute, order, policy, license, registration, and any other standard or requirements having the effect of law that applies to the Agreement or the Parties, or interpretations imposed by any Government Entity that apply to this Agreement.
“Appurtenant Rights” means all easements, hereditaments, appurtenances, development rights, and other benefits, if any, pertaining to or affecting the Property.
2 “Business Day” means all days except for a Saturday, Sunday, or Legal Holiday. “City” means the City of San Pablo, the Transferee, as set forth in the Recitals. “Claim” means any claim, suit, proceeding, action, liability, loss, demand, damage, encumbrance, cause of action of any kind, order, subpoena, obligation, cost, royalty, fee, assessment, duty, requirement, charge, penalty, fine, judgment, interest, and award (including recoverable legal counsel fees and cost of litigation of the Person asserting the claim), whether arising by law, contract, tort, voluntary settlement, or in any other manner resulting from or in any way associated with:
(A) Acts or omissions of Transferee or Transferee Group with respect to, or occurring on, the Property;
(B) The ownership, control, use, possession, or operation of the Property; (C) The performance or non-performance of any obligation under this Agreement; or
(D) Any condition existing or occurring in, on, under or within the Property before, on, or after the Closing Date, including but not limited to:
(1) The death or injury of any person or persons, including without limitation, any member of the Transferee Group;
(2) The damage or destruction of the Property;
(E) The violation or alleged violation of any federal, state, local, or municipal law, rule, regulation, order, judgment, decree or other requirement, including without limitation, requirements under permits, licenses, consents and approvals related in any way to the Property; (F) The existence, assessment or remediation of Contamination upon, under, in or emanating from, the Property;
(G) Emissions, discharges, releases or threatened releases, or the presence, generation, manufacturing, processing, distribution, use, treatment, storage, disposal, transport, labeling, advertising, sale, display or handling, of Contamination;
(H) Any special, indirect or consequential damages, including, but not limited to, claims for loss of use, rents, anticipated profit or business opportunity, or business interruption, diminution in value, or mental or emotional distress or fear of injury, disease, or illness, or trespass, nuisance or otherwise related in any way to the Property;
(I) Any response costs that any member of Transferor Group or Transferee Group may incur with respect to the Property under any Environmental Law; or
3 (J) Any cause of action or theory of any kind as a result of, in connection with, or in any way related to, the ownership and operation of the Property.
“Closing” or “Close of Escrow” means the consummation of the transfer of the Property as provided in this Agreement.
“Closing Date” means the date which is fifteen (15) days after the expiration of the Due Diligence Period.
“Closing Documents” means all the documents and instruments described in Section 10.2 and Section 10.3 of this Agreement.
“Closing Instructions” means the respective letters of escrow closing instructions executed by Transferee and Transferor (or their respective counsel on behalf of Transferee and Transferor) containing such terms as described in this Agreement, which will supplement the instructions provided to the Title Company in this Agreement. Attorneys for each Party shall be authorized to execute Closing Instructions for the respective Party the attorney is representing. “Conditions Precedent” has the meaning given in Section 8.1. “Contamination” means any Hazardous Material or toxic material, substance, chemical or waste, contaminant, emission, discharge or pollutant or comparable material listed, identified or regulated pursuant to any federal, state or local law, ordinance or regulation which has as a purpose the protection of health, safety or the Environment Condition, including petroleum or petroleum products or wastes, or PFAS resulting from any cause, release, or source during Transferor’s ownership of the Property or from Transferor’s use of the Property. “County” means the County of Contra Costa as set forth in the Recitals. “Deed” means a grant deed conveying title of the Property to Transferee subject only to the Permitted Exceptions, in substantially the form of Exhibit B attached hereto and made a part hereof for all purposes.
“Dispute” means any claim, disagreement or controversy arising out of this Agreement, including a Claim under this Agreement and any dispute or controversy regarding the existence, construction, validity, interpretation, enforceability, termination, or breach of this Agreement, whether based in contract, tort, or in any other manner.
“Due Diligence Period” means a period of time commencing on the Effective Date and expiring at 5:00 p.m., Pacific time, on the sixtieth (60th) day following the Effective Date.
“Effective Date” means the first day upon which both Transferee and Transferor have signed this Agreement, and the same has been delivered to each Party. “Environmental Condition” means Contamination at, on, under or emanating to or from the Property or a condition or circumstance relating to the Property or
4 operation of the Property which is or is alleged to be not in compliance with Environmental Law.
“Environmental Law” means any Applicable Law relating to pollution; the protection of the environment; the release, emission, discharge or disposal of any material or chemical substance; human health or safety; Hazardous Materials; natural resource damage; product registration; hazard communication, each as from time to time has been or may be amended or adopted before or after the Effective Date, including, any of the following:
(A) The Occupational Safety and Health Act, 29 U.S.C.A. §651, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.A. §6901, et seq.; the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.A. §9601, et seq.; the Clean Water Act, 33 U.S.C.A. §1251 et seq.; the Clean Air Act, 42 U.S.C.A. §7401, et seq.; the Safe Drinking Water Act, 42 U.S.C.A. §3001, et seq.; the Toxic Substances Control Act, 15 U.S.C.A. §2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.A. §2701 et seq.
(B) The California Underground Storage of Hazardous Substances Act, H & S C §§ 25280, et seq.; the California Hazardous Substances Account Act, H & S C §§ 25300, et seq.; the California Hazardous Waste Control Act, H & S C §§ 25100, et seq.; the California Safe Drinking Water and Toxic Enforcement Act, H & S C §§ 24249.5, et seq.; and the Porter- Cologne Water Quality Act, Wat C §§ 13000, et seq.
“Exceptions” means, collectively, conditions, easements, encumbrances, restrictions, exceptions, rights-of-way, title defects, deeds of trust, mortgages, liens, taxes, assessments, charges, leases, rights of possession and other matters of record.
“Exhibit” means a document referred to in Section 1.3.1. “Government Entity” means any department, court, tribunal, exchange, authority, commission, board, instrumentality or agency of any municipal, local, state, federal or other governmental authority (including regulatory authorities and administrative bodies) and any subdivision of the foregoing or any Person owned or controlled by the government.
“Hazardous Materials” means any chemical substance, product, waste, or other material which is, or becomes identified, listed, published, regulated, or defined as, or which shows the characteristics of, a hazardous substance, hazardous waste, hazardous material, toxic substance, or other regulatory term, including oil, oil waste, by-products and components, NORM, hydrocarbons, and hydrocarbons waste, produced water, by-products and components, polychlorinated biphenyls, and asbestos, or which is otherwise regulated or restricted under any Environmental Law or by any Government Entity, or which may otherwise cause, contribute to, or result in an Environmental Condition. “Hazardous Materials” include the following: (A) a hazardous substance, as defined in Section 25281 or 25316 of the California Health and Safety Code; (B) a hazardous waste, as defined in Section 25117 of the California Health and
5 Safety Code; (C) a waste, as defined in Section 470 of the California Health and Safety Code or as defined in Section 13050 of the California Water Code; or (D) any substance or material that is defined or designated as a hazardous waste, material or substance by any other applicable Environmental Laws, including PFAS.
“IDW” has the meaning given in Section 3.2.1(B).
“Improvements” includes any buildings, equipment, or fixtures located on the Land.
“Inspections” means physical and environmental inspections of the Property. “Legal Holiday” means any local or federal holiday on which post offices are closed in the County or State.
“Loss” means all claims, suits, proceedings, actions, demands, liabilities, obligations, damages, penalties, fines, costs and expenses, including fees and disbursements, incurred in connection with any Claim, by and for attorneys, experts and consultants.
“Monetary Lien” means and is limited to deeds of trust, mortgages, and tax liens for delinquent Property Taxes whether the same arise before or after the Due Diligence Period; provided, however, Monetary Liens shall not include non- delinquent Property Taxes, or monetary liens, encumbrances, or obligations caused by Transferee or any of Transferee’s agents, employees, contractors or subcontractors.
“Owner’s Policy of Title Insurance” means an ALTA Owner’s policy of title insurance in the amount of the Purchase Price, issued by Title Insurer to Transferee at the Closing pursuant to the Title Commitment. The Owner’s Policy of Title Insurance will be dated no earlier than the date of recordation of the Deed from Transferor to Transferee, will name Transferee as the insured, and will insure Transferee’s fee simple title to the Property, subject only to standard printed exceptions and the Permitted Exceptions. However, in no event will the Owner’s Policy of Title Insurance include survey modification coverage unless Transferee obtains the Survey and delivers a copy to Transferor and Title Insurer before the deadline by which Transferee must deliver the Title Objection Letter.
At its expense, Transferee may obtain such endorsements to the Owner’s Policy of Title Insurance as Transferee deems appropriate, but in no event shall the receipt of any such endorsements be deemed to be a condition of Closing for Transferee’s benefit and/or part of the Owner’s Policy of Title Insurance for such purposes.
“Party” means each of Transferor and Transferee and “Parties” means both. “Permitted Exceptions” means each of the enumerated Exceptions to Transferee’s title to the Property set forth in Section 3.4.3 and/or any other Exceptions explicitly stated as such elsewhere in the Agreement.
6 “Person” means an individual, corporation, company, association, partnership, state, statutory corporation, Government Entity or any other legal entity. “PFAS” means any perfluoroalkyl or polyfluoroalkyl substances, whether or not currently regulated by any Government Entity.
“Property” means, collectively, (i) land as described in Exhibit A (the “Land”), (ii) Appurtenant Rights to such Land, and (iii) all Improvements (if any) on the Land. “P roperty Documents” means the Property information materials in the possession of Transferor relating to the Property set forth in Exhibit C attached hereto and any other documents provided to Transferee by Transferor prior to Closing.
“Property Taxes” means all real property, personal property, ad valorem taxes, and any other similar taxes, as well as all special and general assessments of any kind imposed, levied or assessed on or against the Property. “Purchase Price” means the amount payable by Transferee to Title Company for disbursement to Transferor under Section 2.3.
“Released Matters” has the meaning given in Section 7.1. “Settlement Statement” means a closing statement prepared by the Title Company.
“Survey” means a new ALTA survey, if any, obtained by Transferee and made by a licensed surveyor, bearing a legal description, showing the area, dimensions and location of the Property to the nearest monuments, streets, alleys on all sides, the topography, the location of all available utilities in adjoining streets, alleys or property, the location of all improvements and encroachments, and the location of all recorded easements against or appurtenant to the Property, and certified to Transferee and Title Insurer.
“Title Commitment” means a commitment for title insurance describing the status of title to the Property and all Exceptions which would appear in an Owner’s Policy of Title Insurance.
“Title Company” means First American Title Company, whose principal office is located at 6232 LaSalle Ave. Oakland, California 94611, Attention: Andrea Steiner [Telephone: (510) 285-2302 /Email: [email protected]], and who is acting as the escrow agent for this Agreement.
“Title Insurer” means First American Title Insurance Company, whose principal office is located at 18500 Von Karman Avenue, Suite 600, California 92612, Attention: Jeff Paschal [Telephone: (949) 885-2481 /Email:
[email protected]]. Title Insurer will issue the Title Commitment and, at Closing, the Owner’s Policy of Title Insurance.
“Title Objection Letter” will have the meaning set forth in Section 3.4.1 of this Agreement.
7 “Transferee Group” means Transferee and its parent, subsidiaries, and affiliated companies and corporations, and their respective directors, officers, managers, members, employees, representatives, independent contractors, consultants, servants and agents, and their respective predecessors and successors in interest and assigns, excluding Transferor Group.
“Transferor Group” means Transferor, its parent, and Affiliates, whether wholly owned, partially owned, directly or indirectly, together with their respective directors, officers, managers, members, employees, contractors, representatives and agents, and their respective predecessors and successors in interest and assigns, excluding Transferee Group.
“US$” means United States Dollars.
1.2 Interpretation. Unless the context expressly requires an interpretation to the contrary, all of the following apply to the interpretation of this Agreement:
1.2.1 The plural and singular words each include the other.
1.2.2 The masculine, feminine, and neutral genders each include the others.
1.2.3 The word “or” is not exclusive, the words “includes” and “including” are not illustrative, limiting.
1.2.4 References to the Parties include their respective successors and permitted assignees.
1.2.5 References to matters “arising” (or which “arise” or “arises”) “out of this Agreement” include matters which arise in connection with this Agreement or have a causal connection with or which flow from this Agreement or which would not have arisen or occurred but for the entering into this Agreement or the performance of or failure to perform obligations under this Agreement.
1.2.6 The headings in this Agreement are included for convenience and do not affect the construction or interpretation of any provision of, or the rights or obligations of a Party under, this Agreement.
1.2.7 A capitalized derivative or other variation of a defined term has a corresponding meaning and must be construed accordingly.
1.2.8 If a conflict exists between any provisions of this Agreement as they apply to a Party, the provision that imposes the more stringent obligation on that Party prevails to the extent of the conflict.
1.2.9 Where provision is made for agreement or the giving of notice, approval or consent by any Party, unless otherwise specified, the agreement, notice, approval, or consent must be in writing.
1.3 Exhibits and Schedules.
8 1.3.1 All of the Exhibits that are attached to the body of this Agreement are an integral part of, and are incorporated by reference into, this Agreement, and consist of:
(A) Exhibit A – Legal Description of the Land
(B) Exhibit B – Deed
(C) Exhibit C – Property Documents
1.3.2 If a conflict exists between the body of this Agreement and the Exhibits or Schedule(s), the body prevails to the extent of the conflict.
2. SALE AND PURCHASE OF THE PROPERTY, PURCHASE PRICE AND PAYMENTS.
2.1 Purchase and Transfer. Subject to the terms and conditions of this Agreement, and for the consideration required in this Agreement, Transferor agrees to sell, assign and convey, and Transferee agrees to purchase, acquire and accept, all of Transferor’s right, title and interest, if any, in and to the Property.
2.2 M
ethod of Conveyance . Transferor’s interest in the Property will be conveyed to Transferee on the Closing Date by way of the Deed, to be executed and delivered by Transferor, and which will be subject to the Permitted Exceptions affecting or encumbering the Property.
2.3 P urchase Price. The Purchase Price for the Property (the “Purchase Price”) is One U.S. Dollar (US$1). Notwithstanding the above, Transferor may elect in its sole and absolute discretion not to require the payment of said sum to it at Closing.
2.4 P ayment . Transferee will deposit with Title Company the Adjusted Purchase Price, at least one (1) Business Day prior to the Closing Date as specified more fully below.
Upon Closing, Title Company shall wire the Purchase Price in immediately available funds to such bank account(s) as Transferor may designate. The Purchase Price will also be subject to further adjustments for prorations and credits required to be made in accordance with Section 9 below.
3. INSPECTIONS AND APPROVALS.
3.1 Inspections. Transferee may conduct the inspections and studies described in this Section 3 during the Due Diligence Period.
3.2 Access to the Property and Indemnification by Transferee.
3.2.1 Access.
(A) During the Due Diligence Period, Transferor will permit Transferee and Transferee’s agents and representatives reasonable access to the Property for the purpose of conducting such Inspections as Transferee will deem necessary to determine the feasibility of the Property for Transferee’s intended use, subject to the conditions set forth in this Section 3.2.
Before Transferee enters the Property to perform Inspections, Transferee will give Transferor five (5) Business Days’ notice and, at Transferor’s option, a representative of Transferor may accompany Transferee and/or Transferee’s representative. Transferee will be solely responsible
9 for the conduct of Transferee’s representatives on and adjacent to the Property and will assume and pay for all expenses incurred in connection with the Inspections. Transferee will not allow, and Transferee’s representatives will not conduct, any physically invasive testing of, on, or under the Property without first obtaining Transferor’s written consent, which may be granted or withheld in Transferor’s sole discretion.
(B) Transferee will return the Property to substantially the same condition existing before entry by Transferee’s representatives. Transferee shall be solely responsible for the proper removal and prompt disposal of waste generated during its Inspections (“Investigation Derived Waste” or "IDW"). All manifests for IDW will identify Transferee as the generator, and Transferee will indemnify Transferor against any Claim associated with Transferee having disposed of such IDW. Transferee agrees to select a licensed disposal facility that meets federal, state, and local laws and requirements with respect to the disposal of IDW.
(C) To the extent allowed by Applicable Law, Transferee will keep confidential the information resulting from the Inspections and will deliver to Transferor copies of all reports, surveys and studies generated by the Inspections promptly after receipt. Transferee may disclose this confidential information to Transferee’s representatives to the extent each needs to know the confidential information for the sole purpose of evaluating the Property, provided Transferee takes all reasonable measures to assure that, to the extent allowed by Applicable Law, Transferee’s representatives keep such information confidential. For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, Transferee will not contact any Government Entity regarding the results of any testing performed on the Property unless required by Applicable Law and only after Transferee has given Transferor not less than seven (7) days’ written notice prior to any such contact. At Transferor's sole option and to the extent allowed by Environmental Law, if Transferee does not purchase the Property in accordance with the terms and conditions in this Agreement, Transferee will either destroy all reports, surveys, and studies generated by the Inspections, or deliver all such documents to Transferor. Additionally, within five (5) Business Days after the receipt thereof, Transferee will provide Transferor with a copy of each and every final report, survey or study prepared by or for Transferee with respect to its investigation and due diligence of the Property during the Due Diligence Period, which will be provided without any warranty by Transferee as to the completeness or accuracy of the information contained therein. (D) Transferee will indemnify, defend, and hold Transferor harmless from any loss, injury, liability, damage, or expense, including reasonable attorneys' fees and costs which Transferor may incur as a result of (1) any act or omission of Transferee or its agents or representatives arising in connection with any tests or inspections conducted by Transferee or its agents or representatives or (2) the failure of Transferee to restore the Property in accordance with this Section.
(E) During the Due Diligence Period and before entering the Property for any purpose, Transferee will procure and maintain, at its own expense, during the performance of the Inspections, policies of insurance provided by insurance companies admitted to do business in the State of California with A.M. Best & Company ratings of at least A- / VIII and which are reasonably acceptable to Transferor, which policies are primary as to any other existing, valid and collectible insurance insuring Transferee against loss or liability caused by or with the performance of this Agreement by Transferee, or its agents, consultants, contractors, or subcontractors, in amounts not less than:
10 (1) Commercial General Liability Insurance with a minimum combined single limit of liability of at least US$1,000,000 and a general aggregate limit of at least US$2,000,000.
(2) Comprehensive Automobile Liability Insurance or Business Auto Policy covering all owned, hired or otherwise operated non-owned vehicles, with a minimum combined single limit of at least US$1,000,000) each occurrence for Bodily Injury and Property Damage.
(3) Workers’ Compensation Insurance as required by applicable Law, and Employers’ Liability Insurance with a minimum limit of at least US$1,000,000 per employee and at least US$1,000,000 each occurrence.
(F) The insurance coverage required may be provided by one or more policies of insurance issued to Transferee or its agents, consultants, contractors or subcontractors, provided, however, that in order for such insurance to be acceptable, Transferee will contractually require such agents, consultants, contractors or subcontractors to indemnify, defend, and hold harmless Transferor Group from and against Claims and Losses to the extent of Transferee’s obligations provided for in this Agreement, with Transferor Group named as an additional insured to such agreements, and such insurance policies will meet the requirements of this Section.
(G) The policies of insurance will name Transferor Group as an additional insured and will not exclude or restrict coverage based upon alleged or actual negligence of an additional insured. Such insurance will provide coverage for Claims and Losses arising out of the actions of Transferee or its agents, consultants, contractors or subcontractors on or about the Property while the policy is in force, regardless of whether the Claim or Loss arises after the policy is expired. Prior to its entry on the Property during the Due Diligence Period, Transferee will deliver to Transferor a certificate of insurance and additional insured endorsements evidencing the existence of the policies and further evidencing that coverage will not be canceled or materially changed prior to thirty (30) days’ advance written notice to Transferor.
Subrogation against Transferor and the Transferor Group will be waived as respects all of the insurance policies required above (including policies of any subcontractor). The insurance required in no way limits or restricts any indemnity by Transferee or its agents, consultants, contractors, or subcontractors under this Agreement nor by any limitation placed on the indemnity as a matter of Applicable Law.
(H) Notwithstanding anything to the contrary contained herein, Transferor, in its sole discretion, has the right to suspend or terminate any Transferee’s or Transferee Group member’s access at any time for any violation of this Section or any action or omission by Transferee personnel that may create a risk of harm of any type; provided, that if Transferee cures any such action, omission, or violation of this Section within five (5) days after receiving written notice of such action, omission, or violation from Transferor, then Transferee’s rights hereunder shall not be suspended or terminated.
3.2.2 The provisions of this Section 3.2 will survive termination of this Agreement or the Closing, as applicable.
11 3.3 Inspection of Property Documents. Within seven (7) Business Days after the Effective Date, if such has not already occurred, Transferor will deliver or otherwise make available the Property Documents to Transferee or its representative for inspection and copying.
Transferee acknowledges, understands and agrees that the Property Documents may have been prepared by parties other than Transferor and that Transferor makes no representation or warranty whatsoever, express or implied, as to the completeness, content or accuracy of the Property Documents. The provisions of this Section 3.3 will survive Closing, or the early termination of this Agreement. To the extent allowed by Applicable Law, Property Documents will be kept confidential in accordance with Section 15.10.
3.4 Title Review.
3.4.1 Within the time periods set forth below, Transferee shall have approved or disapproved of the Title Commitment and the Survey (if any). Promptly after the Effective Date, unless Transferee elects not to obtain the Survey, Transferee shall order the Survey at its cost.
Promptly upon completion of the Survey, Transferee shall provide a true and correct copy thereof to Transferor and Title Insurer. Immediately following the Effective Date, Title Company shall order the Title Commitment with legible copies of all Exceptions to title set forth on such commitment, which Title Commitment and Exceptions, Title Company shall deliver to Transferee with a copy to Transferor. The Survey, Title Commitment and copies of all Exceptions to title set forth on the Title Commitment are collectively referred to below as the “Title Documents”. Within fifty ( 50) days after the Effective Date, should Transferee have objections to any Exceptions shown on the Title Documents, Transferee will deliver to Transferor, in writing, a letter (the “Title Objection Letter”) setting forth the objections to any matters shown on the Title Documents.
Transferee’s failure to timely object to any such Exceptions will be deemed to constitute Transferee’s approval thereof. Within five (5) calendar days after its receipt of the Title Objection Letter (the “Transferor’s Response Period”), with respect to each objection set forth in the Title Objection Letter, Transferor shall notify Transferee whether Transferor is (i) willing to cure or eliminate from title on or prior to Closing said Exception(s) or (ii) unwilling or unable to cure or have eliminated from title to the Property on or prior to Closing said Exception(s); provided in no event shall Transferor’s Response Period extend beyond the Due Diligence Period hereunder.
Transferor’s failure to respond to the Title Objection Letter or any objections referenced therein shall be deemed Transferor’s unwillingness to cure or eliminate said Exception(s) from title to the Property. Transferor shall under no circumstances have any obligation to remove any Exception to title from the Property, except for such Exception, if any, as Transferor in its sole and absolute discretion agrees in writing to remove. If Transferor is unable or unwilling to remove an objection to an Exception set forth in the Title Objection Letter, then Transferee shall have until the date that is five (5) days following expiration of Transferor’s Response Period (the “ Transferee’s Response Period”), but in no event beyond the Due Diligence Period, to notify Transferor that either (A) Transferee is willing to purchase the Property subject to such Exception or Exceptions, as applicable, upon the satisfaction of the remaining conditions to the Closing or (B) Transferee elects to terminate this Agreement pursuant to this Section 3.4.1. Further, if Transferor elects to cure any objection(s) set forth in the Title Objection Letter, but fails to do so on or before the Closing Date, Transferee shall have the right to terminate this Agreement by giving written notice thereof to Transferor, in which case, this Agreement shall be terminated, which termination shall have the same effect as a termination pursuant to Section 3.5 . Failure of Transferee to deliver written notice to Transferor, prior to expiration of the Transferee’s Response Period, of Transferee’s election to take either one of the actions described in clause (A) or (B) above shall be deemed to be Transferee’s election to take the action described in clause (B). Any Exception that Transferee has elected, or deemed to have elected, to take title to the Property subject to shall constitute a Permitted Exception. Notwithstanding the above, all Monetary Liens recorded
12 against the Property shall be deemed to be included in the Title Objection Letter regardless of whether the same arise before or after the Due Diligence Period, and Transferor shall remove the same from title to the Property prior to Closing.
3.4.2 Transferee may, at or prior to Closing, notify Transferor in writing (the “Gap Notice”) of any objections it may have to any Exceptions to title that Transferee reasonably determines will adversely and materially affect Transferee’s intended use or development of the Property and which were (a) raised by the Title Insurer between the expiration of the Due Diligence Period and the Closing and (b) not disclosed by the Title Insurer or otherwise actually disclosed in writing to Transferee prior to the expiration of the Due Diligence Period (each, an “Intervening Lien”). Transferee must notify Transferor of such objection to title within ten (10) days after Transferee’s receipt of written notice of such Intervening Lien. If Transferee sends a Gap Notice to Transferor regarding any Intervening Lien, then Transferee and Transferor shall have the same rights and obligations with respect to such notice as apply to an objection under Section 3.4.1 above (except that the references to the Due Diligence Period as an outside date for a response or decision shall not be applicable).
Any termination of this Agreement as a result of any Intervening Lien shall have the same effect as a termination of this Agreement pursuant to Section 3.4.1.
3.4.3 Notwithstanding anything set forth herein to the contrary, Transferee will accept title to the Property at Closing, subject to the following “Permitted Exceptions”:
(A) Those Exceptions for the Property: (1) which are of record on the date of the Title Commitment or as shown on the Survey, and which were not objected to by Transferee; (2) which were objected to or deemed objected to by Transferee, but for which (i) Transferor has completed the cure thereof, or (ii) Transferee has waived or been deemed to have waived the cure thereof or (iii) Transferor has elected to cure and such Exception will be cured by the payment of money at Closing; or (3) which Transferee has otherwise approved in writing or which was caused by Transferee or any employee, agent or contractor thereof. (B) The lien of non-delinquent Property Taxes and other usual and customary charges assessed against the owners of real property in the state in which the Property is located.
(C) All matters disclosed by the Property Documents made available to Transferee and not otherwise objected to by Transferee. (D) All building and zoning laws, codes, and regulations affecting the Property, including all proffers, special exceptions, conditions, site plan approvals, and other similar matters, if any, relating to the zoning of the Property.
3.5 Transferee’s Acceptance or Rejection prior to the Expiration of the Due Diligence Period. On or before the expiration of the Due Diligence Period, if Transferee, after conducting its Inspections as described in this Section 3, desires to purchase the Property, Transferee will give Transferor written notice of its acceptance and desire to proceed with its purchase of the Property under this Agreement (“notice of acceptance”). If the Due Diligence Period expires without a notice of acceptance being received by Transferor, then Transferee will be deemed to have elected to terminate this Agreement. If Transferee gives Transferor a notice of termination or is deemed to have elected to terminate this Agreement on or before the expiration of the Due Diligence Period, then this Agreement will automatically terminate, Transferee shall undertake the immediate return of all copies of all Property Documents to
13 Transferor, and thereupon neither Party will have any further obligation or liability to the other Party hereunder, except as otherwise expressly provided herein.
3.6 Natural Hazard Disclosure/Disclosure Statement. Subject to the remainder of this Section 3.6, on or prior to the twentieth (20th) day after the Effective Date, Transferor shall provide to Transferee a disclosure statement (paid for by Transferor) pursuant to Natural Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4, and 51183.5, California Public Resources Code Sections 2621.9, 2694, and 4136, and California Civil Code Section 1102.6c(d) and any successor statutes or Applicable Laws (the “Disclosure Statements”). Transferor makes no representation or warranty, express or implied, as to the accuracy or completeness of any Disclosure Statements provided pursuant to the above, which Transferee understands will be prepared by third parties. If Transferee receives the Disclosure Statements on or prior to the twentieth (20th) day after the Effective Date as contemplated herein, Transferee may terminate the Agreement based on the results of the Disclosure Statements on or before expiration of the Due Diligence Period. If Transferee receives the Disclosure Statements after expiration of the Due Diligence Period but prior to Closing, then Transferee may terminate this Agreement at any time based on the results of the Disclosure Statements prior to Closing. In either event, termination under this Section shall have the same effect as a termination pursuant to Section 3.5. Transferee hereby knowingly, voluntarily and intentionally waives its right to terminate this Agreement as a result of the Disclosure Statements, or any one of them, except as set forth above. This waiver is a material inducement to Transferor’s decision to enter into this Agreement and the calculation of the Purchase Price, and Transferee acknowledges that Transferor would not have entered in this Agreement but for this waiver.
4. TRANSFEROR’S OBLIGATIONS PRIOR TO CLOSING
Until Closing, Transferor or Transferor’s agents or representatives will provide to Transferee, promptly upon the receipt, copies of any written notices relating to the Property received by Transferor or its agents or representatives from any Government Entity, insurance company or vendor, which notices are of a type not normally received in the ordinary course of Transferor’s business, or which may have a material effect upon the Property or result in a material change in a representation or warranty made by Transferor hereunder.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Non-Survival. All representations and warranties of Transferor and Transferee set forth in this Section 5 are made as of the Effective Date and as of the Closing Date but will not survive the Closing notwithstanding any provision in this Agreement to the contrary.
5.2 T ransferor Representations and Warranties. Transferor represents and warrants to Transferee that as of the Effective Date and continuing through Closing, the following statements are accurate:
5.2.1 For
mation. Transferor is a corporation or company (as the case may be) duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization and is duly qualified to do business in California.
5.2.2 A
uthorization . Transferor has (1) full corporate or company power and authority to enter into and perform this Agreement and to consummate the transaction contemplated by this Agreement, and (2) taken all actions necessary to authorize execution,
14 delivery, and performance of this Agreement and the transaction contemplated by this Agreement.
5.2.3 Valid and Binding Obligation. This Agreement constitutes Transferor’s legal, valid, and binding obligation enforceable in accordance with its terms and conditions.
5.2.4 N o Conflict with Articles of Incorporation and Other Governing Documents of Transferor. Neither this Agreement nor the performance of this Agreement constitutes a default, violation, or conflict with the articles of incorporation, by-laws, or governing documents of Transferor.
5.2.5 N o Litigation or Arbitration Proceedings . Transferor is not a party to any litigation, arbitration, or administrative proceedings in relation to the Property that might reasonably be expected to delay, prevent, or materially hinder the consummation of the transaction contemplated by this Agreement or materially adversely affect the title to or value of any of the Property.
5.2.6 FI
RPTA . Transferor is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury, as last updated prior to (or as amended after) the Effective Date of this Agreement. Transferor is in compliance with the terms of the USA Patriot Act of 2001, as amended, the regulations promulgated under the foregoing law, Executive Order No. 13224 on Terrorist Financing, all sanctions programs administrated by the U.S. Department of Treasury’s Office of Foreign Asset Control or Financial Crimes Enforcement Network, and all other Applicable Laws or government programs designed to combat terrorism or money laundering, or the effect of any of the foregoing Applicable Laws or programs, if applicable, on the transaction contemplated by this Agreement.
5.2.7 No
n -Foreign Status . Transferor is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
5.2.8 N o Notice of Violation of Environmental Law . To the actual knowledge of Transferor, Transferor is not aware of any written notice from any Government Entity that the Property is in violation of Environmental Law.
As used above, the phase to “the actual knowledge of Transferor” means without any imputed or c
onstructive knowledge from any Person or duty of further inquiry or investigation by Transferor.
No employee of Transferor shall have any personal liability whatsoever arising under this Agreement or otherwise in connection with the above. Additionally, notwithstanding anything to the contrary in this Agreement, Transferor shall have no liability, and Transferee shall make no claim against Transferor, for a breach of any representation or warranty under this Agreement (including for this purpose any matter that constitutes a breach of Transferor’s representations and warranties when made on the Closing Date) if the breach in question constitutes or results from a condition, state of facts or other matter that was actually known to Transferee prior to Closing and Transferee proceeds with the Closing. Under such circumstances where Transferee is aware of any such breach on or prior to the Closing Date, then Transferee sole remedy shall be terminate this Agreement pursuant to Section 12.2.
5.3 Transferee Representations and Warranties. Transferee represents, warrants and covenants to Transferor that, as of the Effective Date and continuing through Closing, the following statements are accurate:
15 5.3.1 Formation. Transferee is a municipal corporation of the State of California, duly organized, validly existing, and in good standing under the laws of the State of California.
5.3.2 A uthorization . Transferee (1) has the full corporate power and authority to enter into and perform this Agreement, and (2) has taken all actions necessary to authorize execution, delivery and performance of this Agreement and the transaction contemplated by this Agreement.
5.3.3 V alid and Binding Obligation . This Agreement constitutes Transferee’s legal, valid, and binding obligation enforceable in accordance with its terms and conditions.
5.3.4 N o Conflict with Articles of Incorporation and Other Governing Documents of Transferee. Neither this Agreement nor the performance of this Agreement constitutes a default, violation, or conflict with the articles of incorporation, by-laws, or governing documents of Transferee, or any material provision of any agreement or instrument to which Transferee is a party and will not violate or be in conflict with any judgment, decree, order, statute, rule, or regulation.
5.3.5 N
o Litigation or Arbitration Proceedings . Transferee is not a party to any litigation, arbitration or administrative proceedings that might reasonably be expected to delay, prevent or materially hinder the consummation of the transaction contemplated by this Agreement.
5.3.6 C
onsents. Transferee has taken all requisite action and obtained all requisite consents, releases, and permissions required for entering into this Agreement, and the instruments and documents referenced in this Agreement or required under any covenant, agreement, encumbrance, law, or regulation with respect to the obligations required under this Agreement, and no consent of any other party is required for the performance by Transferee of its obligations under this Agreement.
5.3.7 B
reach. To the best of Transferee’s knowledge, without any duty to investigate, neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement does now constitute or will result in a breach of, or a default under, any agreement, document, instrument or other obligation to which Transferee is a party or by which Transferee may be bound, or any law, statute, ordinance, rule, governmental regulation or any writ, injunction, order, or decree of any court or governmental body, applicable to Transferee or to the Property.
5.3.8 B ankruptcy. No petition in bankruptcy (voluntary or otherwise), assignment for the benefit of creditors, or petition seeking reorganization or arrangement or other action under Federal or state bankruptcy law is pending against or, to the best of Transferee’s knowledge, contemplated by Transferee.
5.3.9 FI
RPTA . Transferee is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury, as last updated prior to (or as amended after) the Effective Date of this Agreement. Transferee is in compliance with the terms of the USA Patriot Act of 2001, as amended, the regulations promulgated under the foregoing law, Executive Order No. 13224 on Terrorist Financing, all sanctions programs administrated by the U.S. Department of Treasury’s Office of Foreign Asset Control or Financial Crimes Enforcement Network, and all other Applicable Laws or government
16 programs designed to combat terrorism or money laundering, or the effect of any of the foregoing Applicable Laws or programs, if applicable, on the transactions contemplated by this Agreement.
5.3.10 Non-Foreign Status . Transferee is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
5.3.11 Pr e -Agreement Violations and Reporting . Transferee represents and warrants that no event has occurred prior to the Effective Date, which if it had occurred after the Effective Date, would be a violation of Section 17.1. Transferee shall immediately notify Transferor of any violation of Section 17.1 or the occurrence of any event prior to the Effective Date which, if it had occurred after the Effective Date, would constitute a violation of Section 17.1.
5.3.12 Transferee's Experience. Transferee represents all of the following concerning its experience:
(A) Transferee has knowledge and experience in financial and business matters that enable it to evaluate the merits and risks of the transaction contemplated by this Agreement.
(B) Transferee is not in a significantly disparate bargaining position.
5.3.13 Evidence of Capacity. Transferee is not undergoing any insolvency or receivership proceedings, and no material events have occurred since Transferee’s last financial statements that would adversely affect Transferee’s financial ability to perform Transferee’s obligations under this Agreement.
5.4 B roker . Transferor and Transferee each represents to the other that it has had no dealings, negotiations, or consultations with any broker, representative, employee, agent or other intermediary in connection with the sale of the Property. Transferor and Transferee agree that each will indemnify, defend and hold the other free and harmless from the Claims of any broker(s), representative(s), employee(s), agent(s) or other intermediary(ies) claiming to have represented Transferor or Transferee, respectively, or otherwise to be entitled to compensation in connection with this Agreement or in connection with the sale of the Property. This mutual indemnity will survive Closing and any termination of this Agreement.
6. PROPERTY CONDITION; AS-IS PURCHASE.
6.1 Disclaimer. Transferee acknowledges and agrees that the Property is to be conveyed to and accepted by Transferee "AS IS, WHERE IS," with all faults, if any, including, the Environmental Condition of the Property, and Transferor disclaims all warranties, and makes no representations or warranties, express or implied, of any kind to Transferee including, warranties relating to: (A) the physical condition of the Property, improvements, if any, and any personal property; (B) the suitability, habitability, merchantability, or design of the Property for a particular purpose; (C) the Environmental Condition of the Property and the presence or absence of or contamination by Hazardous Materials; (D) the compliance of the Property with laws and regulations, including Environmental Law; and (E) the soil conditions, drainage, flooding characteristics, utilities, or other conditions existing in, on, or under the Property.
Transferee acknowledges that Transferor makes no, and expressly disclaims any,
17 warranties or representations concerning the accuracy or completeness of any of the Property Documents.
6.1.1 Acknowledgment of Inspection. Transferee covenants, represents, and warrants that: (A) Transferee has inspected or will inspect the Property and all matters relating to the Property which Transferee desires; (B) neither Transferor nor anyone on Transferor's behalf has made, or is making, any warranties or representations respecting the Property other than those expressly identified in this Agreement, if any; and (C) in evaluating the transaction contemplated by this Agreement, Transferee is relying solely on Transferee's own investigation of the Property and all matters pertaining to it, including the Environmental Condition of the Property.
6.1.2 O
bligation to Make Repair s. Transferee acknowledges and agrees that:
(a) any reports, repairs or work required by Transferee are the sole responsibility of Transferee; (b) Transferor has no obligation to make any changes, alterations, or repairs to the Property, or to cure any violations of Applicable Law or to comply with the requirements of any insurer; and (c) Transferee is solely responsible for obtaining any certificate of occupancy or any other approval or permit necessary for transfer or occupancy of the Property, and for any repairs or alterations necessary to obtain such certificate, approval, or permit, all at Transferee's sole cost and expense.
6.1.3 I
ntentionally Omitted.
6.1.4 Survival. The acknowledgements and agreements of Transferee in Section 6 will survive the Closing and will not be deemed merged into any instrument or conveyance delivered at the Closing.
7. TRANSFEREE’S RELEASE AND INDEMNIFICATION.
7.1 Transferee’s Release. Subject to Transferor's representations and warranties under Section 5 and except as set forth in Section 7.2, by accepting title to the Property, Transferee, for itself and Transferee Group members release Transferor Group members from any Claim or Loss (including reasonable outside attorneys' fees), whether known or unknown, liquidated or contingent, asserted against or incurred by any Transferee Group member, and that arises from, is in connection with, or is related in any manner to the following (collectively, the "Released Matters"):
7.1.1 Acts or omissions of Transferee or Transferee Group with respect to, or occurring on, the Property whether before or after the Closing Date.
7.1.2 The ownership, control, use, possession, or operation of the Property.
7.1.3 Any condition existing or occurring in, on, under, or within the Property, including the following:
(A) The death or injury of any Person, including any Transferee Group member;
(B) The damage or destruction of the Property;
18 (C) The violation or alleged violation of any federal, state, local, or municipal law, rule, regulation, order, judgment, decree or other requirement, including requirements under permits, licenses, consents and approvals;
(D) The existence, assessment or remediation of Contamination, if any so exists, upon, under, in or emanating to or from the Property; (E) Emissions, discharges, releases or threatened releases, or the presence, generation, manufacturing, processing, distribution, use, treatment, storage, disposal, transport, labeling, advertising, sale, display or handling, of Contamination, if any so exists; (F) Any response costs any Transferor Group or the Transferee Group member may incur with respect to the Property, under any Environmental Law; (G) Any cause of action or theory of any kind because of, in connection with or related to, the ownership, operation, or use of the Property; (H) Environmental Conditions, whether the Environmental Conditions existed before or after the Closing;
7.1.4 Any historical or other uses prior to Closing at, on or in the vicinity of the Property by any Transferor Group member, as well any other historical uses of the Property or any adjacent land;
7.1.5 Any special, indirect, or consequential damages by Transferee, Transferee Group, or any third party, including Claims or Losses for loss of use, rents, anticipated profit, or business opportunity, or business interruption, construction delays, diminution in value, loss of goodwill by Transferee, or mental or emotional distress, or fear of injury, disease or illness, or trespass, nuisance, or otherwise;
7.1.6 Transferee's or its agent's, contractor's, or employee's activities and inspections regarding the Property;
7.1.7 Transferee's or Transferee Group's construction or development activities on the Property;
7.1.8 Transferee's performance or failure to perform any due diligence reviews and surveys of the Property, including human health risk assessments or similar studies.
7.1.9 Any environmental investigations, environmental claims, cleanup costs, or any Claims or action attributable or arising from subsurface excavation, soil movement, or special handling, treatment, or disposal of soil or groundwater, vapor intrusion protections, or engineered controls; and/or
7.1.10 Any information contained in, or that should have been contained in, the Property Documents.
7.2 Released Matters do not extend to matters determined by final non- appealable judgment to have been caused by the gross negligence or willful misconduct of a Transferor Group member, except that negligence of any type occurring prior to Closing with respect to matters described in Section 7.1.5 and/or any provision of Section 7.1 concerning or
19 relating to the Hazardous Materials, Condemnation or the Environmental Condition of the Property Transferee’s release is not excluded from the definition of Released Matters.
Additionally, notwithstanding any provision of this Agreement to the contrary, Released Matters shall not include Claims by third parties for personal injury, wrongful death or property damage that occurred prior to Closing and that would customarily be covered by a commercial general liability insurance policy (which Transferee acknowledges will not include any Claims arising out of Hazardous Materials, Contamination, or the Environmental Condition of the Property).
7.3 Transferee recognizes that there is a risk that, after Closing, Transferee may suffer a Loss or Claim that is in some way caused by the Released Matters, and Transferee agrees that all members of Transferee Group assume this risk and that this release shall apply to any and all such unknown or unanticipated Loss or Claim. In the event this release is judicially determined to exceed that permitted by applicable Law, then such release shall be construed so as to preserve the maximum release permitted thereby.
7.4 Transferee specifically acknowledges that it has read, understands, and knowingly waives any rights it (or any member of the Transferee Group) may have pursuant to the provisions of Section 1542 of the California Civil Code, which states:
“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.”
Transferee’s Initials: __________
7.5 No Actions or Proceedings. In no event will Transferee or any Person that is part of the Transferee Group file or pursue any legal action, proceeding or arbitration against Transferor or any Transferor Group member with respect to any of the Released Matters.
7.6 I
ntentionally Omitted .
7.7 Binding on Successors. The release provisions set forth under Section 7 will, to the extent legally permissible, be covenants running with the land and will be binding on all future owners of the Property. Any conveyance, transfer, or assignment of all or part of the Property by Transferee, its successors or assigns, in which the grantee, transferee, or assignee fails to expressly assume the obligations of Transferee under Section 7 will be deemed null and void, ab initio. Transferee further agrees to cause the provisions of this Section to be included in all subsequent sales or transfers of any interest in the Property, and to cause all Transferees or transferees of the Property to expressly acknowledge and assume all of Transferee's obligations.
7.8 No
L imitation on Transferee’s Indemnity and Defense Obligations. Nothing set forth in this Section 7 will be construed to limit or narrow in any manner any indemnity and defense obligations or covenants of Transferee which are set forth elsewhere in this Agreement.
7.9 S urvival . The obligations of Transferee under this Section 7 will survive the Closing and will not be deemed merged into any instrument or conveyance delivered at the Closing unless these obligations are expressly set out in the Deed or other Closing Documents.
20 8. CONDITIONS PRECEDENT TO CLOSING.
8.1 Conditions Precedent to Transferor’s Obligation to Sell. The following are the conditions precedent to Transferor’s obligation to sell the Property to Transferee pursuant to this Agreement, any of which may be waived (in whole or in part) by Transferor. Such conditions and those set forth in Section 8.2 are referred to herein as the “Conditions Precedent”:
8.1.1 Transferee has performed and complied in all material respects with the terms and conditions of this Agreement required to be performed or complied with by Transferee at or prior to Closing.
8.1.2 No action or proceeding by or before any Government Entity has been instituted or threatened (and not subsequently dismissed, settled, or otherwise terminated) which might restrain, prohibit, or invalidate the transaction contemplated by this Agreement, other than an action or proceeding instituted or threatened by Transferor or any of its Affiliates.
8.1.3 Transferee representations and warranties in Section 5.3 are true and correct in all material respects on the Effective Date and Closing Date.
8.1.4 The receipt of all material approvals or the execution of any necessary agreement or document (on terms reasonably satisfactory and agreed to by the Parties), if any, which are required under Applicable Law or by a Government Entity prior to the transfer of the Property to Transferee.
8.2 C onditions Precedent to Transferee’s Obligation to Purchase. The following are the Conditions Precedent to Transferee’s obligation to purchase the Property from Transferor pursuant to this Agreement, unless waived by Transferee:
8.2.1 Transferor has performed and complied in all material respects with the terms and conditions of this Agreement required to be performed or complied with by Transferor at or prior to Closing.
8.2.2 No action or proceeding by or before any Government Entity has been instituted or threatened (and not subsequently dismissed, settled, or otherwise terminated) which might restrain, prohibit, or invalidate the transaction contemplated by this Agreement, other than an action or proceeding instituted or threatened by Transferee or any of its Affiliates.
8.2.3 Transferor’s representations and warranties in Section 5.2 are true and correct in all material respects on the Closing Date.
8.2.4 Title Insurer shall issue to Transferee or be irrevocably committed to issue to Transferee the Owner’s Policy of Title Insurance.
8.3 Fulfillment of Conditions Precedent.
8.3.1 Each Party (including each Parties’ Affiliates) will use reasonable efforts to satisfy the Conditions Precedent to each Parties’ obligation to consummate the Closing, including the execution of all documents, acts, and things as may be reasonably required to satisfy the Conditions Precedent.
21 8.3.2 Each Party will promptly provide to the other Party all information and documentation concerning a Party as may be necessary to enable the other Party to prepare and submit all necessary filings required by any Government Entity in connection with the transaction contemplated by this Agreement and otherwise to satisfy the Conditions Precedent.
8.4 Right to Terminate for Failure to Satisfy Conditions Precedent.
8.4.1 If Transferee has not satisfied all of the Conditions Precedent set forth in Section 8.1 by the Closing Date and said failure continues for two (2) Business Days thereafter, and Transferor has not waived any unsatisfied Conditions Precedent, then Transferor may terminate this Agreement. Notwithstanding anything to the contrary set forth above, in the event of a failure of any condition precedent specified in Section 8.1 that is caused by a breach or default hereunder on the part of Transferee, then in lieu of terminating this Agreement and escrow pursuant to this Section 8.4.1, Transferor shall be entitled to exercise its rights pursuant to the provisions of Section 12.1.
8.4.2 If Transferor has not satisfied all of the Conditions Precedent set forth in Section 8.2 by the Closing Date and said failure continues for two (2) Business Days thereafter, Transferee has not waived such unsatisfied conditions precedent, and Transferee has not breached any representation, warranty, covenant or agreement under this Agreement, then Transferee may terminate this Agreement. Notwithstanding anything to the contrary set forth above, if such condition fails due to a breach or default of Transferor hereunder following the expiration of all applicable notice and cure periods set forth in Section 12.2, Transferee may also exercise such rights and remedies set forth in Section 12.2.
8.4.3 A Party may terminate this Agreement under this Section 8.4 by giving notice to the other Party.
9. COSTS AND PRORATIONS.
9.1 Closing Costs. Transferee shall pay (i) all the Title Company’s fees and costs, (ii) any and all transfer costs owed as result of this transaction, (iii) the premium for Owner’s Policy of Title Insurance and of any endorsements, and (iv) the cost of the Survey, if obtained by Transferee. Unless specified elsewhere in this Agreement, any and all other closing costs related to the transaction shall be paid by the Parties in the manner consistent with customary practice for the County in which the Property is located as reasonably determined by Title Company. Each Party shall pay for its own attorneys’ fees and costs incurred in connection with the preparation of this Agreement. Title Company shall notify Transferee and Transferor in writing of their respective shares of such costs at least three (3) Business Days prior to the Closing Date.
9.2 T
axes . Property Taxes relating to the Property payable during the year in which Closing occurs will be prorated with respect to the Property as of the Closing Date, with Transferor being responsible for Property Taxes accruing prior to Closing and Transferee being responsible for Property Taxes attributable to the period from and after the Closing Date.
Notwithstanding anything in this Section 9.2 to the contrary, in no event will Transferor be responsible for any Property Taxes relating to any period in which Transferor did not own the Property. Subject to the immediately preceding sentence, if Closing will occur before the actual Property Taxes payable during such year are known, the apportionment of Property Taxes will be upon the basis of Property Taxes for the Property payable during the immediately preceding year. If, as the result of an appeal of the assessed valuation of the Property for any Property
22 Tax year prior to (or including) the Closing, there is issued after Closing an administrative ruling, judicial decision or settlement by which the assessed value of the Property for such Property Tax year is reduced, and a Property Tax refund or credit issued, Transferor will be entitled to all such Property Taxes refunds relating to the period prior to Closing. No post-closing re- prorations will occur. The provisions of this Section 9.2 will expressly survive the Closing.
9.3 In General. Any other costs or charges of Closing this transaction not specifically mentioned in this Agreement will be paid and adjusted in accordance with local custom or ordinance in the jurisdiction in which the Property is located.
10. CLOSING AND ESCROW.
10.1 Closing. The purchase and transfer of the Property will be consummated through an escrow with Title Company. Closing will occur on the Closing Date during the morning of the Closing Date, Pacific time or as soon thereafter as possible on the Closing Date as set forth in Section 10.5 at the offices of the Title Company, or at such other time and place as may be agreed to in writing by Transferor and Transferee.
10.2 T ransferor’s Deliverables. Transferor will deliver at the Closing the following original documents, each executed and, if required, acknowledged:
10.2.1 The Deed;
10.2.2 An affidavit pursuant to the Foreign Investment and Real Property Tax Act;
10.2.3 Appropriate evidence of authority, capacity and status of Transferor as reasonably required by Title Company;
10.2.4 An “owner’s affidavit”, in a form reasonably acceptable to Transferor and the Title Company and sufficient for the Title Company to delete any exceptions for (1) mechanics’ or materialmen’s liens arising from work at the Property, which is the responsibility of Transferor hereunder, (2) parties in possession, other than tenants as tenants only, and (3) matters not shown in the public records;
10.2.5 The Settlement Statement; and
10.2.6 Any other documents, certificates and other instruments as may be reasonably required to consummate the transaction contemplated by this Agreement.
10.3 Transferee’s Deliverables. At the Closing, Transferee will (a) pay Transferor the Purchase Price as required by, and in the manner described in, Section 3 hereof, and (b) execute and deliver the following original documents, each executed and, if required, acknowledged:
10.3.1 The Deed;
10.3.2 Evidence of Transferee’s authority, and the authority of the Person executing any documents at Closing on behalf of Transferee, acceptable to Transferor and the Title Company, to enter into the transactions contemplated by this Agreement;
23 10.3.3 The Settlement Statement;
10.3.4 One (1) preliminary change of ownership report (“PCOR”);
10.3.5 Any other documents, certificates and other instruments as may be reasonably required to consummate the transaction contemplated by this Agreement.
10.4 Possession. Transferee will be entitled to possession of the Property at the conclusion of the Closing.
10.5 E scrow Closing . Transferee and Transferor (or their respective counsel on behalf of Transferee and Transferor) will execute Closing Instructions consistent herewith which will provide that, on the Closing Date: (A) Transferor and Transferee will each deposit the Closing Documents with the Title Company; and (B) Transferee will deposit with the Title Company the Adjusted Purchase Price by the Business Day before the Closing Date, which will be determined as set forth herein and set forth on a Settlement Statement executed by both Transferee and Transferor at Closing. Upon receipt of the Adjusted Purchase Price, and the satisfaction of all other conditions in the Closing Instructions, the Title Company will be authorized and directed to disburse the Adjusted Purchase Price to Transferor or its designee(s), record the Deed in the official records of the County, and release the remaining Closing Documents to the appropriate Parties, all in strict accordance with the Closing Instructions and this Agreement. In the event of any conflict between the Closing Instructions and this Agreement, this Agreement will prevail.
11. DAMAGE, DESTRUCTION AND CONDEMNATION.
11.1 Casualty. If at any time on or prior to the conclusion of Closing any portion of the Property is destroyed or damaged as a result of fire or any other cause and the estimated cost to repair the damage or destruction exceeds US$50,000 as reasonably estimated by Transferor or Transferee, Transferee and Transferor will each have the right to terminate this Agreement by written notice to the other within fifteen (15) days after the occurrence of the casualty. If necessary, the Closing Date shall be extended to allow for either Party to have the benefit of the full 30-day period referenced above. If neither Transferee nor Transferor elects to terminate this Agreement within the 30-day period, or if the cost of repair is equal to or less than US$50,000, this Agreement will remain in full force and effect and the Parties will proceed to Closing with no change in the Purchase Price. In such event, Transferee shall be entitled to any insurance proceeds paid to Transferor as a result of the casualty.
11.2 C
ondemnation . In the event, at any time on or prior to the Closing Date, any action or proceeding is filed, under which the Property, or any portion thereof, may be taken pursuant to any Applicable Law or the right of eminent domain, Transferee will have the right to terminate this Agreement by written notice to Transferor within ten (10) days following its receipt of notice of any such action or proceeding. If Transferee does not elect to so terminate this Agreement within said ten (10) day period, this Agreement will remain in full force and effect and the Parties will proceed to closing without any reduction or adjustment in the Purchase Price, except that all condemnation proceeds will be assigned to Transferee.
12. DEFAULT AND REMEDIES.
12.1 Transferee Default.
24 12.1.1 If Transferee is in default of one or more of Transferee’s obligations under this Agreement other than a failure to timely close (for which there will be no notice and cure period), then Transferor may give notice to Transferee (with a copy to Title Company) specifying the nature of the default. Transferee will have five (5) days after receiving that notice, but in no event beyond the Closing Date, within which to cure that default. If Transferee fails to cure that default within that period, then Transferor’s sole and exclusive remedy for such default will be to terminate this Agreement by giving notice of such termination to Transferee. After such termination, neither Party will have any further rights, duties or obligations under this Agreement except as otherwise expressly provided herein to the contrary as stated in Section 12.4.
12.1.2 TRANSFEROR HEREBY WAIVES AND RELEASES ANY RIGHT
TRANSFEROR OTHERWISE POSSESSES TO RECOVER OR SEEK TO RECOVER ANY
DAMAGES ARISING OUT OF THIS AGREEMENT AND/OR ESCROW, INCLUDING,
WITHOUT LIMITATION, ANY CONSEQUENTIAL (INCLUDING LOST PROFITS), SPECIAL OR
GENERAL DAMAGES OF ANY NATURE OR KIND (EVEN IF TRANSFEROR HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), OR FOR ANY PUNITIVE DAMAGES
UNDER ANY CIRCUMSTANCES, AND ALL SUCH DAMAGES CLAIMS ARE HEREBY WAIVED BY TRANSFEROR TO THE FULLEST EXTENT PERMITTED BY LAW.
TRANSFEROR ALSO HEREBY WAIVES ANY AND ALL RIGHTS (I) TO FILE OR RECORD
ANY LIEN OR ENCUMBRANCE AGAINST THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, ANY LIS PENDENS AND (II) TO SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT AND/OR ANY INCIDENTAL DAMAGES WITH RESPECT THERETO.
12.2 Transferor Default.
12.2.1 In the event Transferor does any of the following: (a) fails to sell, transfer and assign the Property to Transferee in violation of the terms of this Agreement or fails to perform any other material obligation of Transferor hereunder after Transferor has been given five (5) days’ notice and opportunity to cure or (b) breaches any representation or warranty made or granted by Transferor under this Agreement, which breach is material and not cured by the Closing Date, Transferee will as its sole and exclusive remedy, be entitled to (1) terminate this Agreement, or (2) proceed to Closing by waiving the default or breach in question. If a termination occurs pursuant to the above, neither Party will have any further rights, duties or obligations under this Agreement except as otherwise expressly provided herein to the contrary as stated in Section 12.4.
12.2.2 TRANSFEREE HEREBY WAIVES AND RELEASES ANY RIGHT
TRANSFEREE OTHERWISE POSSESSES TO RECOVER OR SEEK TO RECOVER ANY
DAMAGES ARISING OUT OF THIS AGREEMENT AND/OR ESCROW, INCLUDING,
WITHOUT LIMITATION, ANY CONSEQUENTIAL (INCLUDING LOST PROFITS), SPECIAL OR
GENERAL DAMAGES OF ANY NATURE OR KIND (EVEN IF TRANSFEREE HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), OR FOR ANY PUNITIVE DAMAGES
UNDER ANY CIRCUMSTANCES, AND ALL SUCH DAMAGES CLAIMS ARE HEREBY WAIVED BY TRANSFEREE TO THE FULLEST EXTENT PERMITTED BY LAW.
TRANSFEREE ALSO HEREBY WAIVES ANY AND ALL RIGHT (I) TO FILE OR RECORD ANY
LIEN OR ENCUMBRANCE AGAINST THE PROPERTY, INCLUDING, WITHOUT LIMITATION,
ANY LIS PENDENS AND (II) TO SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT AND/OR ANY INCIDENTAL DAMAGES WITH RESPECT THERETO.
12.2.3 Notwithstanding anything to the contrary in this Agreement, the Parties agree that, in no event, will Section 12.1.1, Section 12.1.2, and Section 12.2.2 limit Transferor’s
25 or Transferee’s rights or recourse with respect to any indemnity and defense provisions of this Agreement for Transferor’s or Transferee’s benefit, except in no event shall Transferor or Transferee be entitled to recover any consequential or special damages suffered by Transferor or Transferee as a result of any default or breach by such Party of any such indemnity and defense provisions.
12.2.4 Waiver of Default. If Transferee does notify Transferor of any pre- Closing Transferor’s default, or does not give Transferor a notice of termination hereunder prior to Closing, then (i) the default will be treated as waived by Transferee and (ii) at Closing, Transferee will accept the Property subject to the default without any reduction in the Purchase Price and without any Claims against Transferor on account of the default.
12.3 S
urvival . This Section 12 shall survive the termination or expiration of this Agreement.
12.4 T ermination . Upon any termination of this Agreement pursuant to any right of a Party to terminate under this Section 12, (A) the settlement fees and charges of the Title Company (including escrow charges) due in connection with the transaction will be paid by the defaulting Party; (B) all documents deposited by Transferee and Transferor into escrow will be returned by the escrow agent to the Party depositing them, and (C) copies of all Property Documents provided to Transferee by Transferor and all third party reports relating to the Inspections and studies obtained by Transferee will be delivered to Transferor, and the Parties will have no continuing liability to each other except as otherwise expressly stated in this Agreement.
12.5 A
ttorneys’ Fees . If any legal action or proceeding, including arbitration, is brought for the enforcement or a declaration of any rights and duties under this Agreement, or because of an alleged dispute, breach, or default of any provisions of this Agreement, all arbitration fees and court costs will be paid equally, regardless of which Party prevails, and each Party will bear its own costs of legal representation and witness expenses.
13. NOTICES.
13.1 All notices under this Agreement must be in writing and delivered by certified mail (postage prepaid), email, or by a reputable courier service, such as Federal Express, and may be given by a Party or its attorney to the appropriate Party’s address set out in the signature page of this Agreement or in each case to such other address as either Party may from time to time designate by giving notice in writing pursuant to this Section 13 to the other Party. Email notices must clearly state that it is a notice given under the Agreement; provided, however, that notice given under Section 14 must be delivered by mail or by a recognized courier service, not by email. Notices are deemed given upon receipt or refusal to accept delivery.
13.2 Each Party may change its representative or contact information by giving notice to the other Party. The new representative or contact information set out in the notice replaces the representative or contact information in the signature page of this Agreement.
13.3 Notices which do not comply with the requirements of this Agreement are ineffective, and do not impart actual or any other kind of notice.
26 14. GOVERNING LAW AND RESOLUTION OF DISPUTES.
14.1 Governing Laws. THIS AGREEMENT AND ITS SUBJECT MATTER, AND
THE CONTRACTUAL AND NON-CONTRACTUAL RIGHTS AND OBLIGATIONS OF THE
PARTIES ARISING OUT OF OR IN CONNECTION WITH THE FOREGOING, ARE
GOVERNED BY AND INTERPRETED UNDER THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO ITS CHOICE OF LAW RULES, EXCEPT THAT THE RULES OF THE FEDERAL ARBITRATION ACT, 9 U.S.C. §§ 1-16 GOVERN (THE “ACT”) THIS SECTION.
THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, 1980 (KNOWN AS “THE VIENNA SALES CONVENTION”) DOES NOT APPLY TO THE AGREEMENT.
14.2 R
esolution of Disputes . THE PARTIES WILL EXCLUSIVELY AND FINALLY
RESOLVE ANY DISPUTE BETWEEN THEM USING DIRECT NEGOTIATIONS, MEDIATION, AND THEN ARBITRATION AS SET OUT IN SECTION 14.4. IF ANY DISPUTE ARISES OUT
OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY QUESTION
REGARDING ITS EXISTENCE, VALIDITY, OR TERMINATION, EITHER PARTY MAY
INITIATE THE DISPUTE RESOLUTION PROCESS BY GIVING NOTICE TO THE OTHER
PARTY SETTING OUT, IN WRITING AND IN DETAIL, THE ISSUES IN DISPUTE AND THE VALUE OF THE CLAIM.
14.3 M
ediation . IF THE DISPUTE CANNOT BE RESOLVED BY DIRECT
NEGOTIATIONS WITHIN THIRTY (30) DAYS FROM THE DATE OF WRITTEN NOTICE
INITIATING THE DISPUTE RESOLUTION PROCESS, EITHER PARTY MAY INITIATE MEDIATION BY GIVING NOTICE TO THE OTHER PARTY. MEDIATION MUST BE
ATTENDED BY A REPRESENTATIVE FROM EACH PARTY WITH DECISION-MAKING AUTHORITY. THE PLACE OF MEDIATION WILL BE IN CONTRA COSTA COUNTY, CALIFORNIA.
14.4 A rbitration of Disputes. IF THE PARTIES FAIL TO RESOLVE THE DISPUTE WITHIN SIXTY (60) DAYS FROM THE DATE OF THE NOTICE OF MEDIATION, THEN THE
DISPUTE MUST BE FINALLY RESOLVED BY BINDING ARBITRATION AND EITHER PARTY MAY INITIATE ARBITRATION BY GIVING NOTICE TO THE OTHER PARTY. ONE
ARBITRATOR (OR THREE ARBITRATORS IF THE MONETARY VALUE OF THE DISPUTE IS MORE THAN US$5,000,000) WILL CONDUCT THE PROCEEDINGS IN ACCORDANCE
WITH THE INTERNATIONAL INSTITUTE FOR CONFLICT PREVENTION AND RESOLUTION (“CPR”) RULES FOR ADMINISTERED ARBITRATION WHICH ARE DEEMED TO BE INCORPORATED BY REFERENCE INTO THIS SECTION. TO THE EXTENT OF ANY
CONFLICTS BETWEEN THE ACT OR CPR RULES AND THE PROVISIONS OF THIS CONTRACT, THE PROVISIONS OF THIS CONTRACT PREVAIL. THE CPR IS THE APPOINTING AUTHORITY FOR THE ARBITRATOR(S). THE SEAT OF ARBITRATION WILL BE IN CONTRA COSTA COUNTY, CALIFORNIA. ALL ARBITRATION FEES AND COSTS WILL BE PAID EQUALLY, REGARDLESS OF WHICH PARTY PREVAILS. THE
ARBITRATION AWARD IS FINAL AND BINDING, AND THE ARBITRATORS SHOULD USE THEIR BEST EFFORTS TO ISSUE THE AWARD WITHIN 90 DAYS FROM COMPLETION OF THE ARBITRATION HEARING. ANY COMMUNICATIONS AND DOCUMENTS RELATED TO
THE DISPUTE WILL BE CONFIDENTIAL AND MAY NOT BE DISCLOSED TO ANY THIRD
PARTY OR USED FOR ANY OTHER PURPOSES, EXCEPT TO THE EXTENT THAT
DISCLOSURE IS NECESSARY TO FULFILL A LEGAL OBLIGATION OR TO PROTECT A LEGAL RIGHT. REGARDLESS OF THE REQUIREMENT TO ARBITRATE, THE
FOLLOWING PROCEEDINGS MAY BE BROUGHT IN ANY COURT HAVING JURISDICTION
27 OVER THE PERSON OR ASSETS OF THE NON-PREVAILING PARTY: PROCEEDINGS TO (A) PRESERVE PROPERTY PENDING DETERMINATION BY THE ARBITRATOR(S), (B)
ENFORCE THE CONFIDENTIALITY OR DATA PROTECTION OBLIGATIONS UNDER THE
CONTRACT, THE FAILURE OF WHICH TO ENFORCE THE PARTIES AGREE WOULD
CAUSE IRREPARABLE HARM, OR (C) ENFORCE A JUDGMENT ENTERED ON AN ARBITRATION AWARD.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE
SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND
APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.
TRANSFEREE’S INITIALS: _______ TRANSFEROR’S INITIALS: _______
15. MISCELLANEOUS.
15.1 Successors Bound. This Agreement will be binding upon and inure to the benefit of Transferee and Transferor and their respective successors and permitted assigns.
15.2 P ublic Announcements .
15.2.1 Transferee will not make any use of Transferor Group’s names, images, logos, or trademarks without obtaining Transferor’s prior written consent.
15.2.2 Each Party shall submit proposed notices, announcements, or press releases regarding the execution of this Agreement or the consummation of the transaction to the other Party for prior review and approval. Except as required by any mandatory notice or announcement, the release of reserve estimates in any announcement is expressly prohibited.
15.2.3 If a Party is required to make any mandatory notice or announcement required under Applicable Law, by the stock exchange upon which a Party’s or Affiliate of such Party’s shares are quoted or any similar regulatory body of any other jurisdiction, then prior approval by the other Party is not required, but the Party shall use its reasonable efforts to allow the other Party reasonable time to comment on such notice or announcement in advance of its issuance.
15.3 Captions. The captions in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Agreement or the scope or content of any of its provisions. Unless the context expressly indicates otherwise, all references to “Section” are to sections of this Agreement.
28 15.4 No Partnership. Nothing contained in this Agreement will be construed to create a partnership or joint venture between the Parties or their successors in interest or permitted assigns.
15.5 Ti me of Essence. Time is of the essence with respect to each and every term, condition, obligation, and provision of this Agreement. Failure to timely perform any of the terms, conditions, obligations, or provisions by either Party will constitute a breach of and a default under this Agreement by the Party failing to perform. In calculating any period provided for in this Agreement, the number of days allowed will refer to calendar and not Business Days, unless otherwise specified.
15.6 B
usiness Days. If any date for the performance of any obligations by Transferor or Transferee or for the delivery of any instrument or notice should fall on a Saturday, Sunday, or Legal Holiday, then compliance with such obligations or delivery will be deemed acceptable on the next Business Day following a Saturday, Sunday, or Legal Holiday.
15.7 R ecordation . Transferee and Transferor agree not to record this Agreement or any memorandum of this Agreement.
15.8 P roper Authority and Execution . Each of the Parties and their officers represent and warrant that they are authorized to enter into this Agreement and execute the same without further authority. This Agreement will have no binding force and effect on either Party unless and until both Transferee and Transferor will have executed and delivered this Agreement.
15.9 W
aiver . No waiver by either Party of this Agreement’s terms, provisions, or conditions is effective unless specifically evidenced in writing and signed by or on behalf of the Party granting such waiver. A Party’s failure to pursue remedies for breach of this Agreement does not constitute a waiver by a Party of any breach of this Agreement or raise any defense against Claims against a Party for breach of this Agreement. The waiver or failure to require the performance of any covenant or obligation contained in this Agreement or to pursue remedies for breach of this Agreement does not waive a later breach of that covenant or obligation.
15.10 C
onfidentiality . Until Closing, Transferee and its partners, attorneys, agents, employees, and consultants will treat the information disclosed to it by Transferor as confidential, giving it the same care as Transferee’s own confidential information, and make no use of any Transferor disclosed information not independently known to Transferee except with the transactions contemplated by this Agreement. If this Agreement is terminated, Transferee will promptly return copies of all Transferor’s confidential information to Transferor.
15.11 Fur
ther Assurance. Whenever requested to do so by the other Party, each Party shall execute, acknowledge, and deliver any further conveyances, assignments, confirmations, satisfactions, releases, powers of attorney, instruments of further assurance, approvals, consents, and any further instruments or documents that are necessary, expedient, or proper to complete any conveyances, grants, transfers, sales, and other agreements expressly contemplated by this Agreement. Without limiting the above, Transferee understands and agrees that Transferor may elect to claim a charitable deduction on its income tax filings with respect to its donation and transfer of the Property to Transferee and will cooperate with Transferor’s efforts in that regard, including by documenting the donation of the Property in a manner to support such deduction.
29 16. ESCROW AGREEMENT.
By its acknowledgment below, Title Company agrees to be bound by and perform the terms of this Agreement as and to the extent the Agreement terms apply to Title Company.
Upon written notification from Transferor or Transferee in accordance with the terms of this Agreement, Title Company will release the funds in accordance with the written instructions. In the event of a Dispute between any of the Parties sufficient in the sole discretion of Title Company to justify its doing so, Title Company will be entitled to tender unto the registry or custody of any court of competent jurisdiction all money or property in its hands held under the terms of this Agreement, together with such legal pleading as it deems appropriate, and at that point be discharged. For purposes of complying with Internal Revenue Code Section 6045(e), as amended effective January 1, 1991, Title Company is hereby designated as the “person responsible for closing the transaction” and also as the “reporting person,” for purposes of filing any information returns with the Internal Revenue Service concerning this transaction, as required by Applicable Law.
17. ADDITIONAL OBLIGATIONS.
17.1 Conflict of Interest. No Transferee Group will in connection with the Agreement: (A) enter into any business arrangement with any director, employee, or agent of Transferor, or any of its Affiliates (other than as a representative of Transferor or any Affiliate of Transferor) without Transferor’s prior written consent or (B) give to or receive from any director, employee, or agent of Transferor or any of its Affiliates anything that is more than a nominal cost or value. Transferee shall ensure that Transferee Group members comply with this Section
17.1. 17.2 Termination. Prior to Closing, Transferor may, at its sole option, terminate this Agreement with immediate effect for any violation of Section 17.1(A) or 17.1(B) or breach of Section 5.3.11.
17.3 Records and Inspections. For twenty-four (24) months from the end of the calendar year or the Closing Date in which the Agreement is completed or terminated, (A) Transferee shall ensure that Transferee Group members retain all records related to the Agreement (or until expiry of the statute of limitations for taxes) and (B) Transferor (or its representative) may inspect, at no cost to Transferor and at any time, all records to confirm compliance with the Agreement.
18. GENERAL PROVISIONS.
18.1 Prior Agreements. THIS AGREEMENT SUPERSEDES ALL PRIOR OR
CONTEMPORANEOUS REPRESENTATIONS, AGREEMENTS, UNDERSTANDINGS, AND
COMMITMENTS BETWEEN THE PARTIES CONCERNING THE SUBJECT MATTER AND COMPRISES THE COMPLETE AND EXCLUSIVE AGREEMENT BETWEEN THE PARTIES.
TRANSFEROR AND TRANSFEREE EACH ACKNOWLEDGE THAT THEY HAVE READ THIS
AGREEMENT IN ITS ENTIRETY AND AGREE TO BE BOUND BY THE TERMS AND
PROVISIONS OF THIS AGREEMENT, AND THAT EACH HAVE HAD THE OPPORTUNITY TO
BE REPRESENTED BY LEGAL COUNSEL OF THEIR CHOICE IN THE NEGOTIATION OF THIS AGREEMENT. NOTWITHSTANDING THE ABOVE, NOTHING IN THIS AGREEMENT
SHALL BE DEEMED TO HAVE SUPERSEDED OR MODIFIED THE LEASE UNTIL AND UNLESS THE CLOSING OCCURS.
30 18.2 Amendment. No amendment to this Agreement is effective unless made in writing and signed by authorized representatives of both of the relevant Parties, expressly identified as an amendment to this Agreement and delivered to both Parties.
18.3 A ssignments . This Agreement is binding on and inures for the benefit of the rightful successors and permitted assigns of the Parties, but the rights, duties, and obligations of Transferee under this Agreement may not be assigned, in whole or in part, without Transferor’s prior consent to the assignment, which consent, in the event of an assignment by Transferee to an Affiliate, will not be unreasonably delayed or withheld provided that if an Affiliate ceases to be an Affiliate of Transferee, it will promptly assign this Agreement back to Transferee.
Notwithstanding any contrary provision of this Agreement, Transferee will remain responsible to Transferor for all obligations, indemnities and liabilities due to Transferor under this Agreement, unless and until expressly released in writing by Transferor in Transferor’s sole discretion.
18.4 T
hird Party Rights. Except as otherwise stated in this Agreement, no third party has any rights under this Agreement or may enforce any provision in this Agreement.
18.5 S everability . Each provision of this Agreement is severable and if any provision is determined to be invalid, unenforceable, or illegal under any existing or future law by a court or arbitrator of competent jurisdiction or by operation of any Applicable Law, this invalidity, unenforceability, or illegality does not impair the operation of or affect those portions of this Agreement that are valid, enforceable, and legal so long as the economic or legal substance of the transaction contemplated by this Agreement is not affected in any manner adverse to any Party. Upon a determination that any term or other provision or part of this Agreement is invalid, illegal, or unenforceable, the Parties will negotiate in good faith to modify this Agreement as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transaction contemplated by this Agreement is fulfilled to the extent possible.
18.6 S
urvival of Certain Obligations . Despite termination of this Agreement for any reason, all provisions in this Agreement containing waivers, disclaimers, releases, defense obligations and indemnities, and all provisions relating to remedies, audit, records retention, confidentiality, taxes, conflicts of interest, improper payment, insurance, limitations of liability, ownership or use or return of information subject to confidentiality obligations under this Agreement, Dispute resolution and governing law, and all causes of action survive indefinitely until, by their respective terms, they are no longer operative or are otherwise limited by an applicable statute of limitations. Each of the obligations and undertakings set out in this Agreement which are not fully performed at Closing continues in force after Closing.
18.7 D rafting. Each Party has participated in the preparation of this Agreement and has had the opportunity to consult with legal counsel and any other advisors of its choice to its satisfaction regarding the terms and conditions of this Agreement. As a result, the rule of construction that an agreement be construed against the drafter will not be asserted or applied to this Agreement.
18.8 C
osts and Expenses . Each Party will pay its own costs and expenses in relation to the preparation, negotiation, and execution of this Agreement and the documents contemplated or executed pursuant to this Agreement.
18.9 C
ounterparts; Methods of Exchange. The exchange of counterpart signature pages between the Parties constitutes execution and delivery of this Agreement. No Party will be bound to this Agreement unless and until all Parties have executed and delivered a
31 counterpart. Execution may be accomplished using an electronically verifiable method including through DocuSign. Executed signature pages sent by email scan or otherwise by photocopy are valid means of delivery. For purposes of assembling all counterparts into one document, Transferor is authorized to detach the signature page from one or more counterparts and, after signature by the respective Party, attach each signed signature page to a counterpart.
18.10 PDF Signatures. In order to expedite the transaction contemplated by this Agreement, PDF signatures may be used in place of original signatures on this Agreement.
Transferor and Transferee intend to be bound by the signatures on the PDF document, are aware that the other Party will rely on the PDF signatures, and each waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.
The remainder of this page is intentionally left blank.
32 IMPORTANT NOTICE: THIS AGREEMENT CONTAINS PROVISIONS REGARDING
INDEMNITIES AND WARRANTIES THAT EXPRESS THE AGREEMENT OF THE PARTIES CONCERNING CLAIMS ARISING OUT OF THIS AGREEMENT.
33 The Parties have executed this Agreement as evidenced by the following signatures of authorized representatives of the Parties:
“TRANSFEREE” CITY OF SAN PABLO, a California municipal
corporation
By: _____________________________
Name: _____________________________
Dated: _______________
ADDRESS FOR NOTICES (TRANSFEREE)
City of San Pablo
[insert address]
Attn: City Manager
Email: ______________
With a copy to:
City of San Pablo
[insert address]
Attn: City Attorney
Email: ______________
“TRANSFEROR” CHEVRON U.S.A. INC., a Pennsylvania
corporation
By: _____________________________
Name: _____________________________
Its: _____________________________
Dated: _______________
ADDRESS FOR NOTICES (TRANSFEROR)
Chevron U.S.A. Inc.
c/o Chevron Business and Real Estate Services
6001 Bollinger Canyon Road
San Ramon, CA 94583
Attn: _____________
Email: __________
34 With a copy to:
__________________
__________________
__________________
__________________
Attn: _____________
Email: __________
*With an additional copy to:
Miller Starr Regalia
1331 N. California Blvd., 6th Floor
Walnut Creek, CA 94596
Attn: Michael Di Geronimo
Email: [email protected]
*Notice is only required to be given to MSR if sent on or before the Closing.
CHVR-57135\2750811.3 1
ACKNOWLEDGMENT OF TITLE COMPANY
The undersigned hereby acknowledges receipt of this Agreement and agrees to be bound by and perform all terms thereof as and to the extent such terms apply to Title Company.
Date:_______________ First American Title Insurance Company By:
Name:
Title:
CHVR-57135\2750811.3 Exhibit A
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
All that certain real property in the City of San Pablo in the County of Contra Costa, State of California, described as follows:
Assessor's Parcel Number: ___________
CHVR-57135\2750811.3 Exhibit B
EXHIBIT B
FORM OF GRANT DEED
Recording Requested By
And When Recorded Mail To:
City of San Pablo
[insert address]
Attn: City Attorney
Mail tax statements (if applicable) to:
Assessor’s Parcel No. ___________
____________________________________________________________________________ (Space Above for Recorder’s Use)
Exempt from fee per GC 27388.1(a)(2); recorded in
connection
with a transfer subject to the imposition of documentary transfer tax
The Undersigned Grantor(s) Declare(s):
CITY TRANSFER TAX $0
DOCUMENTARY TRANSFER TAX
SURVEY MONUMENT FEE $ N/A
[ X ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale
GRANT DEED
The undersigned Grantor declares the DOCUMENTARY TRANSFER TAX is $_________________________ computed on full value of property conveyed.
FOR VALUABLE CONSIDERATION, receipt of which is acknowledged, CHEVRON U.S.A. INC., a Pennsylvania corporation (“Grantor”) hereby grants to THE CITY OF SAN PABLO, a California municipal corporation (“Grantee”) all of that certain real property in the City of San Pablo, County of Contra Costa, State of California, as more particularly described in Schedule 1 attached hereto and by this reference incorporated herein, together with all improvements and appurtenances thereto (the “Property”). THIS PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO ALL
MATTERS OR RECORD AND ANY MATTERS THAT WOULD
CHVR-57135\2750811.3 Exhibit B
BE REVEALED BY A SURVEY OF THE PROPERTY.
Dated: ______________, 202__ GRANTOR:
CHEVRON U.S.A. INC.,
a Pennsylvania corporation
By: _____________________________
Name: _____________________________
Its: _____________________________
CHVR-57135\2750811.3 Exhibit B
ACKNOWLEDGMENT FORMS
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, ____________________________, a 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
CHVR-57135\2750811.3 Schedule 1 to Exhibit B
SCHEDULE 1 TO GRANT DEED
Legal Description
All that certain real property in the City of San Pablo in the County of Contra Costa, State of California, described as follows:
Assessor's Parcel Number: ________
EXHIBIT C
PROPERTY DOCUMENTS