HomeMy WebLinkAbout2013/02/05 Item 05\~
OTY COUNCIL
AGENDA STATEMENT
. _* "A`'CHUTAVISTA
FEBRUARY 5, 2013, ItemrJ
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A PURCHASE AND SALE
AGREEMENT WITH PACIFICA LLC TO ACQUIRE 610
BAY BOULEVARD FOR $1.4 MILLION PLUS DUE
DILIGENCE AND CLOSING COSTS AND AUTHORIZE
THE CITY MANAGER TO ACCEPT ASSIGNMENT OF THE
LEASE AGREEMENT WITH PACIFIC TRUST BANK AND
APPROPRIATING FUNDS ACC INGLY.
SUBMITTED BY: ASSISTANT CITY MANAG EVELOPMENT SERVICES
DIRECTOR /~/ _
REVIEWED BY: CITY MANAGER ~~(!f ~ S
ASSISTANT CITY MANAGERcj
4/STHS VOTE: YES ^X NO
SUMMARY
Prior to the issuance of the first building pemut for residential development on the Chula
Vista Bayfront or receipt of a certificate of occupancy for the Resort and Conference Center
(RCC) a fire station is required to be canstructed, staffed and operational. The acquisition of
610 Bay Boulevard will, at a minimum, provide a location for a temporary fire station and
based on initial investigation has the potential to be the site of the new permanent location.
Staff is recommending the acquisition of 610 Bay Boulevazd.
ENVIRONMENTAL REVIEW
The Development Services Director has reviewed the proposed project for compliance
with the California Environmental Quality Act (CEQA) and has determined that the
project qualifies for a Class 32 categorical exemption pursuant to Section 15333 (In-Fill
Development Projects) of the State CEQA Guidelines, because: the project is consistent
with applicable general plan andzoning provisions;is less than 5 acres in area; does not
contain valuable habitat; would' not result in adverse environmental impacts; and can be
served by all required utilities. Thus, no further environmental review is required.
RECOMMENDATION
Approve the resolution.
5-1
FEBRUARY 5, 2013
Item
Page 2 of 3
BOARDS/COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
After the unanimous approval of the Chula Vista Bayfront Master Plan by the California
Coastal Commission, the staff of the San Diego Unified Port District (Port) and City have
been working on projects that will facilitate the development of the Chula Vista Bayfront.
One of the key projects that must be operational prior to either occupancy of the Resort
Conference Center or the issuance of the first residential building permit is a new fire
station.
610 Bay Boulevard:
The property located at 610 Bay Boulevard became available in_early October at an
asking price of approximately $2 million. However, in early December, the seller reduced
the asking price by almost $600,000 representing a thirty percent (30%) reduction from
the initial asking price, provided the buyer could close the purchase by December 31,
2012.
After learning of the .reduction in price staff immediately began working with the
Planning Division, Public Works Department, Finance Department, Building Division,
Attorney's Office and the Fire Department to determine the suitability of this location as
a temporary fire station. The initial feedback from all departments was that this site
would work for a temporary fire station location. However, after visually inspecting the
property with the various city departments on December 10, 2012 the site was also seen
as a viable location for the permanent new Fire Station #11. The property at 610 Bay
Boulevard is approximately 1000 feet north of the initially proposed location for Fire
Station #11 in the CVBMP. The site is more centrally located between the two access
points (J and H Street) to western Chula Vista and the existing structure is almost 4,000
square feet larger than the one originally proposed for Fire Station #11.
After the site visit and upon receiving direction from the City Council in closed session
on December 11, 2012 staff asked Pacifica Companies (Pacifica) to perform the
necessary due diligence and based on the results of the due diligence to proceed to
acquire the site in accordance with the timeline proposed by the seller. The result of the
due diligence investigations were positive and Pacifica closed on the property on
_ December 31, 2012 and also entered into a leaseback to the seller on a month to month
basis for $1 per leasable foot. Staff requested Pacifica to perform the due diligence and
purchase the site because of their ability to move more quickly and meet .the sellers
i demand to close by year's end.
Staff is recommending the City purchase the property from Pacifica Companies-for the
price paid plus due diligence expenses and closing costs. Pacifica has agreed to these
terms. Staff also recommends assuming the lease with Pacific Trust Bank and to use
these lease revenues and any other lease revenues derived from the site for use in
preparing the site for either a temporary or permanent fire station.
5-2
FEBRUARY 5, 2013
Item
Page 3 of 3
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property
holdings within 500 feet of the boundaries of the property which is the subject of this
action. Staff is not independently aware, nor has staff been informed by any City Council
member, of any other fact that may constitute a basis for a decision maker conflict of
interest in this matter.
CURRENT YEAR FISCAL IMPACT
Approval of the resolution will result in the appropriation of $1,430,000 for the purchase
of the 610 Bay Boulevard. The Non-Departmental Capital category will be amended to
reflect this appropriation from the available General Fund reserves. At this time, the
projected fiscal impact is $1.4 million to the General Fund reserves: -As of June 30, 2012
the available General Fund reserves totaled $11.9 million, this appropriation will reduce
available General Fund reserves to $10.5 million. The impact to reserves may be
mitigated by unanticipated one-time revenues, further information will be provided as
part of the Second Quarter Financial Report. Staff is also recommending that a new Non
CIP project totaling $27,600 be created in the Non Departmental budget that would be
used for future improvements to the building., This appropriation to the Non CIP project
category would be offset by unanticipated revenues. The current month to month lease
with Pacific Trust Bank is anticipated to generate $27,600 dollars in revenue as the tenant
estimates they will end their tenancy on March 30, 2013. Staff will pursue opportunities
to lease the building until it is needed as a Fire Station for the Chula Vista Bayfront
development
ONGOING FISCAL IMPACT
There will be on-going costs for utilities and general maintenance of the facility. It is
staffs intention to lease the structure while plans are prepared for the future fire station
and to use these revenues on the repurposing of the site for a fire station. It.is anticipated
that additional resources will be necessary but these are unknown at this time and will be
brought forward during the normal budget process for the FY 2013-14 budget.
All costs for planning and construction of a new fire station have been included in the
public improvement estimates included in the finance agreement with the Port and are
assumed to be eligible for reimbursement from development impact fees and ground
lease revenues generated from development on the Bayfront.
ATTACHMENTS
A. Purchase and Sale Agreement
B. Lease agreement
Prepared by: Eric Crockett, Assistant Director, Development Services Department
5-3
COUNCIL RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA. APPROVING A PURCHASE AND SALE
AGREEMENT WITH PACIFICA LLC TO ACQUIRE 610 BAY
BOULEVARD FOR $1.4 MILLION PLUS DUE DILIGENCE
AND CLOSING COSTS AND AUTHORIZE THE CITY
MANAGER TO ACCEPT ASSIGNMENT OF THE LEASE
AGREEMENT WITH PACIFIC TRUST BANK AND
APPROPRIATING FUNDS ACCORDINGLY
WHEREAS, the City of Chula Vista (City) and the S.an Diego Unified Port District
(District), in a collaborative effort with the community began working on a comprehensive Chula
Vista Bayfront Master Plan in 2002; and
WHEREAS, on May 18 2010 the District and City adopted the Final Environmental
Impact Report (UPD# 833-EIR-658; SCH No. 2005081077) for the Chula Vista Bayfront Master
Plan; and
WHEREAS, Phase I project level components will increase the demand for fire
protection services due to the change in land uses and in order to address this impact a fire
station must be constructed, staffed and operational prior to the issuance of any certificate of
occupancy for the Resort Conference Center (RCC) and prior to issuance of the first building
permit for the residential development on Parcels H-13 and H-14; and
WHEREAS, one of the site specific development projects that was analyzed at the project
1'evel of detail was the construction of a new fire station; and
WHEREAS, in order to ensure the public services are available commensurate with
development staff has identified 610 Bay Blvd as a feasible location for a temporary fire station
to service the Bayfront and has the potential to be the site of the new permanent fire station No.
11; and
WHEREAS, 610 Bay Boulevard became available in early October at an asking price of
approximately, $2 million; and
WHEREAS, in early December, the seller reduced the asking price by $600,000.
representing a thirty percent (30%) reduction from the initial asking price, provided a buyer
could close the purchaseby December 31, 2012; and
WHEREAS, after learning of the reduction in price staff immediately began working
with the Planning Division, Public Works Department, Finance Department, Building Division,
Attorney's Office and the Fire Department to determine the suitability of this location as a
temporary, and potentially permanent, fire station; and
5-4
Resolution No.
Page 2
WHEREAS, the initial feedback from all departments was that this site would work for a
temporary, and potentially permanent, fire station; and
WHEREAS, after the site visit and upon receiving direction from the City Council, staff
requested that Pacifica Companies (Pacifica) perform the necessary due diligence and based on
the results of the due diligence proceed to acquire the site in accordance with the timeline
proposed by the seller; and
WHEREAS, the result of the due diligence investigations were positive and Pacifica
closed on the property on December 31, 2012; and
WHEREAS, it is the City's desire to purchase the site from Pacifica for the price paid
plus due diligence expenses and closing costs~and it is Pacifica's desire to sell the site to the City
for the price paid plus due diligence expenses and closing costs.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula.
Vista, hereby approves the purchase and sale agreement with Pacifica LLC to acquire 610 Bay
Boulevard, in the form presented to the City Council, as may have been modified by the Council
prior to its approval, a copy of which is on file in the Office of the City Clerk, and authorizes the
City Manager to execute all required documents and to accept the assignment of the current lease
agreement with Pacific Trust Bank and authorizes the following appropriations to the Non-
. Departmental budget:
• $1,430,000 to the Capital expenses category from available General Fund
reserves,
• $27,600 to the Non CIP expense category for a newly created Non-CIP project
from unanticipated lease revenues.
Presented by
Gary Halbert, PE, AICP
Assistant City Manager/Development
Services Director
5-5
Approved as to form by
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY' S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
f~s ~ 3
Dated: !(
PURCHASE AND SALE CONTRACT
BETWEEN
SD SEAPORT TWO, LP AND
THE CITY OF CHULA VISTA
RELATING TO
610 BAY BLVD. CHULA VISTA, CA 91910
5-6
`~ City Attorney
Attachment A
PURCHASE AND SALE CONTRACT
BETWEEN
SD Seaport Two LP, a California limited partnership
AS SELLER
AND
City of Chula Vista, a Charter City and Municipal Corporation, or
assignee
AS PURCHASER
relating to
Office Building at 610 Bay Blvd., Chula Vista, CA 91910
5-7
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS ...................................................................... ...............................1
ARTICLE 2 PURCHASE AND SALE OF PROPERTY ................................ ........................:......4
ARTICLE 3 PURCHASE PRICE .................................................................... ...............................4
.ARTICLE 4 FEASIBILITY PERIOD .............................................................. ...............................4
ARTICLE 5 TITLE ...................................................................................:....... ...............................5
ARTICLE 6 CLOSING .................................................................................... ...............................7
ARTICLE 7 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND
PURCHASER ..................:........................................................ .............................10
ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING ...............:............ .............................14
ARTICLE 9 BROKERAGE ............................................................................. .............................15
ARTICLE 10 POSSESSION .....................................................................:~:.... .............................15
ARTICLE 11 DEFAULTS AND REMEDIES ................................................. .............................16
ARTICLE 12 RISK OF LOSS OR CASUALTY ............................................. ........................:....16
ARTICLE 13 EMINENT DOMAIN ................................................................ .............................17
ARTICLE 14 MISCELLANEOUS .................................................................. .............................17
i
5-8
PURCHASE AND SALE CONTRACT
THIS PURCHASEAND SALE CONTRACT ("Agreement") is entered into as of
January 17, 2013 (the "Effective Date") by and among SD Seaport Two LP, a California limited
partnership ("Seller") and City of Chula Vista, a Charter City and Municipal Corporation, or
assignee ("Purchaser").
NOW, THEREFORE WITNESSETH: That for and in consideration of mutual covenants
and agreements herein after set forth, Seller and Purchaser hereby agree as follows:
RECITALS
R-1. Seller holds legal title to that certain real property upon which is constructed an office
building located at 610 Bay Blvd., Chula Vista, CA 91910 and more particularly described on
the legal description attached hereto as Exhibit A; - -
R-2. Purchaser desires to purchase and Seller has agreed to sell such land, improvements and
certain associated property, defined below as the "Property" on the terms and conditions set forth
below;
R-3. Purchaser has agreed to pay to Seller the Purchase Price (as defined herein) for the
Property, and Seller has agreed to sell the Property to Purchaser on the terms and conditions set
forth below.
NOW, THEREFORE, for valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINED TERMS
1.1. Defined Temts. Terms with initial capital letters in this Agreement shall have the
meanings set forth in this Article 1 below.
1.1. L "Assignment", shall have the meaning ascribed thereto in Section 6.2.1.3.
1.1.2. "Bill of Sale" shall have the meaning ascribed thereto in Section 6.2.1.2.
1.1.3. "Broker" shall have the meaning ascribed thereto in Section 9.1.
1.1.4. "Business Day" means any day other than a Saturday or Sunday or Federal
holiday or legal holiday in San Diego County, California.
1.1.5. "Closing" means the consummation of the purchase and sale and related
transactions contemplated by this Agreement in accordance with the terms and
.conditions of this Agreement.
1.1.6. "Closing Date" means any business day mutually acceptable to Purchaser and
Seller but no later than February 17, 2013.
1
5-9
1.1.7. "Closing Statement" shall have the meaning ascribed thereto in Section 6.2.1.4.
1.1.8.. "Consultants" shall have the meaning ascribed thereto in Section 4.1.
1.1.9. "Deed" shall have the meaning ascribed thereto in Section 6.2.1.1.
1.1.10. Reserved.
1.1.11. "Escrow Agent" shall mean North American Title and Escrow, 2100 Main Street
#450 Irvine, CA 92614, (949) 419-9400, Jo Anne Reed, Escrow Officer
1.1.12. "Excluded Permits" means those Permits which, under applicable law, are
nontransferable and such other Permits as may be designated as Excluded Permits
on Exhibit 1.1.12, if any, attached hereto.
1.1.13. "Execution Date" means the date this Agreement is executed by the last party to
execute this Agreement.
1.1..14. "Feasibility Period" shall have the meaning ascribed thereto in Section 4.1.
1.1.15. "Fixtures and Tangible Personal Property" means all fixtures, furniture,
furnishings, fittings, equipment, machinery, apparatus, appliances, inventory,
automobiles and other articles of personal property which are owned by Seller now
located on the Land or in the Improvements as of the date of this Agreement and
used or usable in connection with any present or future occupation or operation of
all or any part of the Property. The term ``Fixxtures and Tangible Personal Property"
does not include (i) equipment leased by Seller and the interest of Seller in any
equipment provided to the Property for use, but not owned by Seller, or (ii) property
owned or leased by Tenants and guests, management companies, employees or
other persons famishing goods or services to the Property or (iii) property and
equipment owned by Seller, which in the ordinary course of business of the Property
is not used exclusively for the business, operation or management of the Property or
(iv) the property and equipment, if any, expressly identified in Exhibit 1.1.15.
1.1.16. "Lease(s)" means the interest of Seller in and to any and all leases, subleases and
other occupancy agreements, whether or not of record, which provide for the use or
occupancy of space or facilities on or relating to the Property and which are in force
as of the Effective Date, except as designated on Exhibit 1.1.1616 attached hereto.
1.1.17. "Like Kind Exchange" and "Like Kind Exchange Property" shall have the
meaning ascribed thereto in Section 14.18.
1.1.18. "Miscellaneous Property Assets" means all contract rights, leases, concessions,
warranties, plans, drawings and other items of intangible personal property relating
to the ownership or operation of the Property owned by Seller and assignable
without consent of any third party required for transfer, excludinu, however, (i)
receivables, (ii) Property Contracts, (iii) Leases, (iv) Permits, (v) cash or other
funds, whether in petty cash or house ``banks," or on deposit in bank accounts or in
2
5-10
transit for deposit, (vi) refunds, rebates or other claims, or any interest thereon, fox
periods or events occurring prior to the Closing Date, (vii) utility and similar
deposits, (viii) insurance or other prepaid Items, or (ix) books and records except to
the extent that Seller receives a credit on the Closing Statement for any such item.
1.1.19. "Notice" shall have the meaning ascribed thereto in Section 14.5.
1.20. "Permits" means all licenses and permits granted by governmental authorities
having jurisdiction over the Property in respect of the matter to which the applicable
license or permit applies and owned by Seller or used in or relating to the
ownership, occupancy or operation of the Property or any part thereof not subject to
a Lease.
1.1.21. "Permitted Exceptions" means those exceptions or conditions permitted to
encumber the title to the Property in accordance with the provisions of Section 5.2.
1.22. "Property" means that certain real property upon which is constructed an office
building located at 610 Bay Blvd., Chula Vista, CA 91910 and more particularly
described on the legal description attached hereto as Exhibit A, including without
limitation, any rights, title and interest of Seller, if any, in and to all of the common
areas, easements, rights, privileges, and appurtenances belonging or in any way
appertaining to the Units; together with all Fixtures and Tangible Personal Property,
the right, if any and only to the extent transferable, of Seller issued to Property
Contracts and Leases, Permits other than Excluded Permits and the Miscellaneous
Property Assets.
1.23. "Property Contracts" means all purchase orders, maintenance, service, or utility
contracts and similar contracts, which relate to the ownership, maintenance,
construction or repair and/or operation of the Property and which are not cancelable
on thirty (30) days' or shorter Notice, except Leases, and except those described on
Exhibit 1.1.23.
1.1.24. "Proration Period" shall have the meaning ascribed thereto in Section 6.1.4.
1:1.25. "Agreement" means this Purchase and Sale Contract by and between Seller and
Purchaser.
].1.26. "Purchase Price" means the total consideration to be paid by Purchaser to Seller
for the purchase of the Property as described in Section 3.1.
1.1.27. "Tenant" means any person or entity entitled to occupy any portion of the
Property under a Lease.
1.1.28. "Title Commitment" or "Title Commitments" shall have the meaning ascribed
thereto in Section 5.1.
1.1.29. "Title Company" shall mean North American Title and Escrow, 2100 Main
Street #450 Irvine, CA 92614, (949) 419-9400, Jo Anne Reed, Escrow Officer.
3
5-11
1.30. "Title Policy" shall mean that policy of title insurance described and required
under ARTICLE 5.
ARTICLE 2
PURCHASE AND SALE OF PROPERTY
2.1. Purchase and Sale. Seller agrees to sell and convey the Property to Purchaser and
Purchaser agrees to purchase the Property from Seller, in accordance with the terms
and conditions set forth in this Agreement.
ARTICLE 3
PURCHASE PRICE
3.1. Purchase Price. The total purchase price ("Purchase Price") for the Property shall be
One Million Four Hundred Eleven Thousand Two Hundred and Eighty One and
No/100 Dollars ($1,411,281.00), which shall be paid by Purchaser, as follows:
3.1.1. Balance of Purchase Price. The Purchase Price shall be paid by wire transfer by
Purchaser at the Closing. .
ARTICLE 4
FEASIBILITY PERIOD
4.1. Feasibility Period. Purchaser shall have until 5:00 p.m. PST on February 14, 2013
(the "Feasibility Period") to fully satisfy itself as to all aspects of the purchase.
During the Feasibility Period, Purchaser shall be entitled to enter upon the Property
and conduct such inspections, tests and other review as Purchaser shall deem
appropriate in order to fully satisfy itself as to all matters relating to the physical
condition of the Property. Seller shall reasonably cooperate with all requests by
Purchaser for access to the Property, provided that Purchaser shall conduct its
physical inspections and all tests in such a manner as to minimize the impact on
existing tenants, occupants and guests on the Property. Should the results of
Purchaser's investigation of the Property appear satisfactory to Purchaser in its sole
and absolute discretion, then Purchaser may deliver to Seller and Escrow Agent
written notice of its acceptance of the Property and its election to proceed to the
Closing ("Election Notice"), at which point Purchaser shall have no further legal
basis to cancel this Agreement except as set forth in Sections 12.1 and 13.1 or as a
result of default by Seller or failure of conditions precedent to Purchaser's obligations
hereunder. If Purchaser fails to give an Election Notice in a timely manner or gives
written notice of its dissatisfaction as to any aspect of the Property, then this
Agreement shall be deemed canceled and the Deposit shall be returned to Purchaser.
4.2. Seller's Deliveries to Purchaser. Within three (3) days after the Effective Date, Seller
shall deliver to Purchaser all of the materials relating to the Property which are
described on the Due Diligence Checklist attached hereto as Exhibit 4.2.
4.3. Indemnity: Insurance. Purchaser shall indemnify, defend (with attorneys selected by
Seller) and hold Seller harmless from any and all claims, damages, costs and liability
4
5-12
which may azise due to actions taken by Purchaser and the Consultants on the
Property prior to the Closing including surveys, tests, investigations and the like.
Seller shall have the right, without limitation, to disapprove any and all entries,
surveys, tests, investigations and the like that in their reasonable judgment could
result in any injury to the Property or breach of any agreement, or expose Seller to
any liability, costs, liens or violations of applicable law, or otherwise adversely affect
the Property or Seller's interest therein. No consent by the Seller to any such activity
shall be deemed to constitute a waiver by Seller or assumption of liability or risk by
Seller. Purchaser hereby agrees to restore the Property to the same condition existing
immediately prior to Purchaser's exercise of its rights pursuant to this ARTICLE 4 at
Purchaser's sole cost and expense. Purchaser shall maintain casualty insurance and
comprehensive public liability insurance with broad form contractual and personal
injury liability endorsements with respect to the Property and Purchaser's activities
carried on therein, in amounts (including deductible amounts) and with such
insurance carriers as shall be approved by Seller and namirig Seller and its affiliates
as loss payees or additional insureds (at the option of Seller), with endorsements
acceptable to Seller, including a waiver of defenses of the insurer based on the actions
or inaction of Purchaser. The provisions of this Section shall survive the Closing or
termination of this Agreement.
4.4. No Liens: Information. Purchaser shall not permit any mechanic's or materialman's
liens or any other liens to attach to the Property by reason of the performance of any
work or the purchase of any materials by Purchaser or any other party in connection
with any studies or tests conducted by or for Purchaser. Purchaser shall give written
notice to Seller a reasonable time prior to entry onto the Property and shall permit
Seller to have a representative present during all investigations. and inspections
conducted with respect to the Property. Purchaser shall take all reasonable actions
and implement all protections necessary to ensure that all actions taken in connection
with the investigations and inspections of the Property, and all equipment, materials
and substances generated, used or brought onto the Property pose no material threat to
the safety of persons or the environment and cause no damage to the Property or other
property of Seller or other persons. All information made available by Seller to
Purchaser in accordance with this Agreement or obtained by Purchaser in the course
of its investigations shall be treated as confidential information by Purchaser, and,
prior to the purchase of the Property by Purchaser, Purchaser shall use its best efforts
to prevent its agents and employees from divulging such information to any unrelated
third parties except as reasonably necessary to third parties engaged by Purchaser for
the limited purpose of analyzing and investigating such information for the purpose of
consummating the transaction contemplated by this Agreement, including Purchaser's
attorneys and representatives, prospective lenders and engineers.
ARTICLE 5
TITLE
5.1. Title Review. Within three (3) business days after the Effective Date, Seller shall
deliver to Purchaser a preliminary title report issued by Title Company describing the
state of title of the Property, together with copies of all exceptions specified therein
5
5-13
(tbe "Preliminary Title Report"). Purchaser shall notify Seller in writing
. ("Purchaser's Title Objection Notice") of any. objections Purchaser may have to title
exceptions contained in the Preliminary Title Report prior to the expiration of the
Feasibility Period. Any and all exceptions to title that are capable of being removed
as exceptions by payment of a fixed and liquidated sum of money shall be
automatically deemed objected to by Purchaser. Seller shall have a period of three
(3) business days after receipt of Purchaser's Title Objection Notice in which to
deliver written notice to Purchaser ("Seller's Title Notice") of Seller's election to
either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii)
decline to remove any such title exceptions. If Seller notifies Purchaser of its election
to terminate Escrow rather than remove the objectionable items, Purchaser shall have
the right, by written notice delivered to Seller within five (5) business days after
Purchaser's receipt of Seller's Title Notice, to elect between either, (iii) accepting the
cancellation of escrow, in which event the entire Deposit shall be immediately
released to Purchaser; or (iv) to agree to accept the Property subj ect to the
objectionable items, in which event Seller's election to terminate the Escrow shall be
of no effect, and Purchaser shall take title at the Close of Escrow subject to such
objectionable items. Upon the issuance of any amendment or supplement to the
Preliminary Title Report which adds additional exceptions, the foregoing right of
review and approval shall also apply to said amendment or supplement (provided that
the period for Purchaser to review such amendment or supplement shall be the later of
the expiration of the Feasibility Period or three (3) business days from receipt of the
amendment or supplement) and Escrow shall be deemed extended by the amount of
time necessary to allow such review and approval in the time and manner set forth
above; provided, however, that in no event shall the Close of Escrow be extended as a
result of such delay for more than thirty (30) days.
5.2. Permitted Exceptions. Purchaser agrees to accept title to the Property and agrees that
conveyance by the Deed (as defined herein) shall be subject to the following, all of
which shall be deemed "Permitted Exceptions," and Purchaser agrees to accept the
Deed and title to the Property subject thereto:
5.2.1. All exceptions shown in the Preliminary Report other than items to which
Purchaser made timely objection provided, however, that notwithstanding the
foregoing, Seller shall remove, cure or obtain affirmative coverage over any
voluntary or involuntary monetary liens (such as mechanic's or materialmen's liens,
judgment liens, mortgages and financing statements) created by Seller and recorded
against the Property prior to the Closing that are reasonably susceptible of such
removal, cure or affirmative coverage;
5.2.2. All Leases and any other occupancy, residency, lease, tenancy and similar
agreements entered into in the ordinary course of business which are not excluded
pursuant to Section l . L 16 including, by way of example and not by limitation, that
certain Lease Agreement between Seller and Pacific Trust Bank dated
December 31, 2012.
6
5-14
5.2.3. All Property Contracts and any other existing contracts created in the ordinary
course of business by Seller which are not excluded pursuant to Section 1.1.23; and
5.2.4. Real estate and property taxes to the extent not due and payable.
5.3. Property Taxes to be Paid at Closing. Unpaid liens for any and all taxes, charges and
regular and special assessments shall not be objections to title, but shall be prorated
between Seller and Purchaser as of the Closing Date, subject to the provisions for
apportionment of taxes contained herein.
5.4. Franchise Taxes to be Paid at Closing. Unpaid franchise or business corporation
taxes of any corporations in the chain of title shall not be an objection to title,
provided that the Title Company agrees to insure against collection out of the
Property or otherwise against Purchaser or its affiliates.
5.5. Financing Statements to be Released at Closing. If on the Closing Date there are
conditional bills of sale or Uniform Commercial Code financing statements that were
filed on a day more than six (6) years prior to such Closing, and such financing
statements have not been extended by the filing of UCC-2 continuation statements
within the past six (6) years prior to such Closing, such financing statements shall not
be deemed to be an objection to title.
5.6. Title at Closing. If on the Closing Date, the state of title is other than in accordance
with the requirements set forth in this Agreement or if any condition to be fulfilled by
Seller shall not be satisfied, Purchaser shall provide Seller with Notice thereof at such
time, or such title objection or unfulfilled condition shall be deemed waived by
Purchaser in which case Purchaser and Seller shall proceed to consummate the
Closing on the Closing Date.
5.6.1. If Purchaser timely gives Seller such Notice, Seller shall have ten (10) days to
cure such objection or unfulfilled condition.
5.7. No Additional Liens. Seller covenants that it will not voluntarily create or cause any
lien or encumbrance (including Leases and/or Property Contracts with a term greater
than thirty (30) days) to attach to the Property between the date of this Agreement and
the Closing Date; any such monetary lien or encumbrance so attaching by voluntary
act of Seller shall be discharged by the Seller at or prior to Closing on the Closing
Date or any postponed Closing Date.
5.8. No Objections to Permitted Encumbrances. Anything to the contrary
notwithstanding, Purchaser shall not have any right to terminate this Agreement or
object to any lien, encumbrance, exception or other matter that is a Permitted
Exception or that has been waived or deemed to have been waived by Purchaser.
ARTICLE 6
CLOSING
7
5-15
6.1. Dates, Places Of Closing, Closing Costs, Prorations, and Delinquent Rent.
6.1.1. Place; Closing Date. The Closing shall take place in the offices of Escrow Agent
at Escrow Agent's office in San Diego, California, or such other place as the parties
shall mutually agree upon on or before the Closing Date. Seller and Purchaser agree
that either party may deliver documents by overnight air courier or other means so
that such party need not be physically present at the Closing.
6.1.2. Closing Costs. Seller shall pay the costs of the standard coverage "owner's" Title
Policy. Purchaser shall pay the costs of "extended coverage" and any special
endorsements which Purchaser requires. Seller shall pay the costs of the transfer
taxes to be paid with reference to the Deed and all other stamps, intangible,
documentary, recording, sales tax and surtax imposed by law with reference to any
other documents delivered in connection with this Agreement. Purchaser shall pay
the closing costs with reference to any loan which Purchaser obtains. Purchaser and
Seller shall equally share the Escrow Agent's escrow fees. All other closing costs
shall be allocated in accordance with custom in Los Angeles, California.
6.1.3. Prorations. At Closing, the Escrow Agent shall make appropriate prorations,
credits, debits and adjustments in accordance Exhibit 6.1 as of the Closing Date,
with Seller generally being entitled to or charged for, as the case may be, revenues
and expenses relating to the Property attributable to the period up to the Closing
Date (and further credited for any amounts paid by Seller attributable to the period
on or after the Closing Date), and Purchaser being entitled to or responsible for, as
the case may be, all of same attributable to the period on and after the Closing Date.
The proration shall be final and unadjustable except as provided in the following
paragraph, and the provisions of this Section 6.1 shall apply during the Proration
Period (as defined below):
6.1.4. Proration Period. If any of the items subject to proration hereunder cannot be
prorated at the Closing because the information necessary to compute such proration
is unavailable, or if any errors or omissions in computing prorations at the Closing
are discovered subsequent to the Closing, then such item shall be reapportioned and
such errors and omissions corrected as soon as practicable after the Closing Date
and the proper party reimbursed, which obligation shall survive the Closing for a
period (the "Proration Period").from the Closing Date until three (3) months after
the Closing Date. Neither party hereto shall have the right to require a
recomputation of a Closing proration or a correction of an error or omission in a
Closing proration unless within the Proration Period one of the parties hereto (i) has
obtained the previously unavailable information or has discovered the error or
omission, and (ii) has given Notice thereof to the other party together with a copy of
its good faith recomputation of the proration and copies of all substantiating
information used in such recomputation. The failure of a party to obtain any
previously unavailable information or discover an error or omission with respect to
an item subject to proration hereunder and to give Notice thereof as provided above
within the Proration Period shall be deemed a waiver of its right to cause a
recomputation or a correction of an error or omission with respect to such item after
8
5-16
the Closing Date. Any Rents that have accrued, but have not yet been paid shall be
prorated in accordance with estimates based upon the prior years' information (or
reasonable estimates of Seller if no such prior years' information is available), and
shall be subsequently. readjusted and reapportioned upon receipt. Purchaser shall
pay Seller for rents and other receivables and revenues that have accrued, but are
not yet due and payable, at Closing.
6.2. Items To Be Delivered Prior To Or At Closing.
6.2.1. Seller. At Closing, Seller shall deliver to Purchaser, each of the following items,
as applicable:
6.2.1.1. Deed. A Warranty Deed ("Deed") in the form attached as Exhibit 6.2.1.1
to Purchaser.
6.2.1.2. Bill of Sale. A "Bill of Sale" without recourse or warranty in the form
attached as Exhibit 6?.1.2 covering all Permits (other than Excluded Permits)
and Fixtures and Tangible Personal Property. Purchaser shall execute the Bill
of Sale so as to effect an assumption by Purchaser, including, without
limitation, of Seller's obligations thereunder.
6.2.1.3. Assignment An assignment and assumption agreement ("Assignment") in
the form attached as Exhibit 6.2.1.3, transferring without recourse or warranty
all of Seller's right, title and interest in and to the Property Contracts, Leases,
Miscellaneous Property Assets to Purchaser, subject to any consents of third
parties required for transfer.
6.2.1.4. Closing Statement. A closing settlement statement executed by Seller
("Closing Statement").
6.2.1.5. Seller's Title Affidavit. An affidavit in customary. form reasonably
acceptable to Seller to enable Title Company to delete the standard exceptions
relating to mechanics liens and parties in possession from the title insurance
policy to be issued at Closing, provided that such affidavit does not subject
Seller to any greater liability or impose any additional obligations on Seller,
other than as set forth in this Agreement.
6.2.1.6. Non-Foreign Certificate. A certification of Seller's non-foreign status
pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.
6.2.1.7. Tenanev Agreement. A tenancy agreement under Section 10.1, if
applicable.
6.2.1.8. Delivery of Other Items. Except for the items expressly listed above to be
delivered at Closing, delivery of any other required items shall be deemed
made by Seller to Purchaser, if Seller leaves such documents at the Property in
their customary place of storage or in the custody of Purchaser's
representatives.
9
5-17
6.2.2. Purchaser. At Closing, Purchaser shall deliver to Seller the following items with
respect to each Property being conveyed or transferred by merger at such Closing:
6.2.2.1. Purchase Price. The full Purchase Price as required by Section 3.1 hereof
plus or minus the adjustments or prorations required by this Agreement. If at
Closing there are any liens or encumbrances on the Property that Seller is
obligated or elects to pay and discharge, Seller may use any portion of the
Purchase Price to satisfy the same, provided that Seller shall have delivered to
Purchaser, or to Purchaser's designee, on such Closing instruments in
recordable form sufficient to satisfy such liens and encumbrances of record (or,
as to any mortgages or deeds of trust, appropriate payoff letters, acceptable to
the Title Company), together with the cost of recording or filing such
instruments. Purchaser, if request is made within a reasonable time prior to
Closing, agrees to provide at Closing separate certified or cashier's checks as
requested, aggregating not more than the amount of-the balance of the portion
of Purchase Price, to facilitate the satisfaction of any such liens or
encumbrances. The existence of any such liens or encumbrances shall not be
deemed objections to title if .Seller shall comply with the foregoing
requirements.
6.2.2.2. Closing Statement. The Closing Statement executed by Purchaser.
6.2.2.3. Bill of Sale. An executed counterpart of the Bill of Sale.
6.2.2.4. Assigmnent. An executed counterpart of the Assignment.
6.2.2.5. Tenancy Agreement. A tenancy agreement under Section 10.1, if
applicable.
6.2.2.6. Other Items. Such other instruments, documents of certificates as are
required to be delivered by Purchaser to Seller in accordance with any of the
other provisions of this Agreement.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND
PURCHASER
7.1. Representations. Warranties and Covenants Of Seller. For the purpose of inducing
Purchaser to enter into this Agreement and to consummate the sale and purchase of
the Property in accordance herev<~ith, Seller represents and warrants to Purchaser the
following as of the Effective Date and as of the Closing Date:
7.1.1. Seller is a lawfully and duly organized limited partnership, in good standing under
the laws of the state of California; and has or at Closing shall have the power and
authority to sell and convey the Property and to execute the documents to be
executed by Seller and prior to Closing will have taken as applicable, all corporate,
partnership, limited liability company or equivalent entity actions required for the
execution and delivery of this Agreement and the consummation of the transactions
10
5-18
contemplated by this Agreement. The compliance with or fulfillment of the terms
and conditions hereof will not conflict with, or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any Agreement to which
Seller is a party or by which Seller is otherwise bound. Seller has not made any
other Agreement for the sale of, or given any other person the right to purchase, all
or any part of any of the Property;
7.1.2. Seller owns fee title to the Property, subject only to the Permitted Exceptions;
7.1.3. No pending or, to the knowledge of Seller, threatened litigation exists which if
determined adversely would restrain the consummation of the transactions
contemplated by this Agreement or would declare illegal, invalid or non-binding
any of Seller's obligations or covenants to Purchaser;
7.1.4. Seller has received no notice that the Property or any portion thereof is in
violation of any state, federal or local law or ordinance, including, without
limitation, those governing the use, storage or release of Hazardous Materials.
7.1.5. Seller is duly authorized to execute and deliver, acting through its duly
empowered and authorized officers and members, respectively, and perform this
Agreement and all documents and instruments and transactions contemplated
hereby or incidental hereto, and such execution, delivery and performance by Seller
does not (i) violate any provision of any law, governmental rule or regulation
currently in effect, (ii) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect that names or is specifically directed at
Seller or its property, and (iii) require the consent, approval, order or authorization
of, or any filing with or notice to, any court or other governmental authority;
7.1.6. There are no adverse or other parties in possession of the Property, except for
occupants, guests and Tenants or as set forth in Exhibit 1.1.16;
7.1.7. The joinder of no person or entity other than Seller is necessary to convey the
Property fully and completely to Purchaser at Closing, or to fulfill Seller's
obligations hereunder, and Seller has all necessary right and authority to convey and
assign to Purchaser all contract rights and warranties required to be conveyed and
assigned to Purchaser hereunder; and
7.1.8. Purchaser has no duty to collect withholding taxes for Seller pursuant to the
Foreign Investors Real Property Tax Act of 1980, as amended.
7.1.9. From and after the expiration of the Feasibility Period, Seller shall refrain from
'entering into any long-term leases (greater than month-to-month), contracts or
modifications to the same that affect the Property.
7.2. AS IS PURCHASE. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH ABOVE IN SECTION 7.1, THE
PROPERTY IS EXPRESSLY PURCHASED AND SOLD "AS IS," "WHERE
IS," AND "WITH ALL FAULTS." THE PURCHASE PRICE AND THE
11
5-19
TERMS AND CONDITIONS SET FORTH HEREIN ARE THE RESULT OF
ARM'S-LENGTH BARGAINING BETR'EEN ENTITIES FAMILIAR WITH
TRANSACTIONS OF THIS KIND, AND SAID PRICE, TERMS AND
CONDITIONS REFLECT THE FACT THAT PURCHASER SHALL HAVE
THE BENEFIT OF, AND IS RELYING UPON, NO INFORMATION
PROVIDED BY SELLER, AND PURCHASER IS NOT RELYING ON ANY
STATEMENTS, REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, MADE BY OR ENFORCEABLE DIRECTLY AGAINST SELLER,
INCLUDING, WITHOUT LIMITATION, ANY RELATING TO THE VALUE
OF THE PROPERTY, THE PHYSICAL OR ENVIRONMENTAL
CONDITION OF THE PROPERTY, THE STATE, FEDERAL, COUNTY OR
LOCAL LAW, ORDINANCE, ORDER, PERMIT OR SUITABILITY,
COMPLIANCE OR LACK OF COMPLIANCE OF THE PROPERTY WITH
ANY REGULATION, OR ANY OTHER ATTRIBUTE OR MATTER OF OR
RELATING TO THE PROPERTY (OTHER THAN ANY COVENANTS OF
TITLE CONTAINED IN THE DEEDS CONVEYING THE PROPERTY AND
THE REPRESENTATIONS SET FORTH ABOVE). PURCHASER
REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF AND
AS OF THE CLOSING DATE, IT HAS AND SHALL HAVE REVIEWED AND
CONDUCTED SUCH INDEPENDENT ANALYSES, STUDIES, REPORTS,
INVESTIGATIONS AND INSPECTIONS AS IT DEEMS APPROPRIATE IN
CONNECTION WITH THE PROPERTY. IF SELLER PROVIllES OR HAS
PROVIDED ANY DOCUMENTS, OPINIONS OR WORK PRODUCT OF
CONSULTANTS, SURVEYORS, ARCHITECTS, ENGINEERS, TITLE
COMPANIES, GOVERNMENTAL AUTHORITIES OR ANY OTHER
PERSON OR ENTITY WITH RESPECT TO THE PROPERTY, PURCHASER
AND SELLER AGREE THAT SELLER HAS DONE SO OR SHALL DO SO
ONLY FOR THE CONVENIENCE OF BOTH PARTIES, PURCHASER
SHALL NOT RELY THEREON AND THE RELIANCE BY PURCHASER
UPON ANY SUCH DOCUMENTS, OPINIONS OR WORK PRODUCT
SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR
AGAINST SELLER, SELLER'S PARTNERS OR AFFILIATES OR ANY OF
THEIR RESPECTIVE PARTNERS, OFFICERS, DIRECTORS,
PARTICIPANTS, EMPLOYEES, CONTRACTORS, ATTORNEYS,
CONSULTANTS, REPRESENTATIVES, AGENTS, SUCCESSORS, ASSIGNS
ORPREDECESSORS-IN-INTEREST. PURCHASER SHALL RELY ONLY
UPON ANY TITLE INSURANCE OBTAINED BY PURCHASER WITH
RESPECT TO TITLE TO THE PROPERTY. PURCHASER
ACKNOWLEDGES AND AGREES THAT NO REPRESENTATION HAS
BEEN MADE AND NO RESPONSIBILITY IS ASSUMED BY SELLER WITH
RESPECT TO CURRENT AND FUTURE APPLICABLE ZONING OR
BUILDING CODE REQUIREMENTS OR THE COMPLIANCE OE THE
PROPERTY WITH ANY OTHER LAWS, RULES, ORDINANCES OR
REGULATIONS, THE FINANCIAL EARNING CAPACITY OR EXPENSE
HISTORY OF THE PROPERTY, THE CONTINUATION OF CONTRACTS,
CONTINUED OCCUPANCY LEVELS OF THE PROPERTY, OR ANY PART
12
5-20
THEREOF, OR THE CONTINUED OCCUPANCY BY TENANTS OR, .
WITHOUT LIMITING ANY OF THE FOREGOING, OCCUPANCY AT
CLOSING. PRIOR TO CLOSING, SELLER SHALL HAVE THE RIGHT,
BUT NOT THE OBLIGATION, TO ENFORCE ITS RIGHTS AGAINST ANY
AND ALL PROPERTY OCCUPANTS, GUESTS OR TENANTS.
PURCHASER AGREES THAT THE DEPARTURE OR REMOVAL, PRIOR
TO CLOSING, OF ANY OF SUCH GUESTS, OCCUPANTS OR TENANTS
SHALL NOT BE THE BASIS FOR, NOR SHALL IT GIVE RISE TO, ANY
CLAIM ON THE PART OF PURCHASER, NOR SHALL IT AFFECT THE
OBLIGATIONS OF PURCHASER UNDER THIS AGREEMENT IN ANY
MANNER WHATSOEVER; AND PURCHASER SHALL CLOSE THE
TRANSACTION DESCRIBED HEREIN AND ACCEPT DELIVERY OF THE
DEED WITH OR WITHOUT SUCH TENANTS IN POSSESSION AND
WITHOUT ANY ALLOWANCE OR REllUCTION IN THE PURCHASE
PRICE. PURCHASER HEREBY RELEASES SELLER FROM ANY AND
ALL CLAIMS AND LIABILITIES RELATING TO THE FOREGOING
MATTERS, EXCEPT AS PROVIDED IN SECTION 7.3 BELOW.
73. Survival. Seller and Purchaser agree that those representations contained in Section
7.1 shall survive Closing for a period of six (6) months (that is, any proceeding based
on the breach of a representation contained in Section 7.1 that survives Closing must
be commenced within six (6) months subsequent to the date of such representation).
7.4. Definition of "Knowledge". Representations and warranties above made to the
knowledge of Seller shall not be deemed to imply any duty of inquiry. For purposes
of this Agreement, the term Seller's "knowledge" shall mean and refer to only actual
knowledge of the Designated Representative (as hereinafter defined) of the Seller acid
shall not be construed to refer to the knowledge of any other partner, officer, director,
agent, employee or representative of the Seller, or any affiliate of the Seller, or to
impose upon such Designated Representative any duty to investigate the matter to
which such actual knowledge or the absence thereof pertains, or to impose upon such
Designated Representative any individual personal liability. As used herein, the term
"Designated Representative" shall refer to Deepak Israni.
7.5. Representations And Warranties Of Purchaser. For the purpose of inducing
Seller to enter into this Agreement and to consummate the sale and purchase of the
Property in accordance herewith, Purchaser represents and warrants to Seller the
following as of the Effective Date and as of the Closing Date, and such
representations and warranties shall survive Closing:
7.5.1. Purchaser is a lawfully and duly organized Charter City and Municipal
Corporation, authorized to do business and in good standing under the laws of the
state of California; and has or at Closing shall have the power and authority to
purchase the Property and to execute the documents to be executed by Purchaser
and prior to Closing will have taken as applicable, all limited liability company
actions required for the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement. The
13
5-21
compliance with or fulfillment of the terms and conditions hereof will not conflict
with, or result in a breach of, the terms, conditions or provisions of, or constitute a
default under, any contract to which Purchaser is a party or by which Purchaser is
otherwise bound.
7.5.2. Purchaser has all necessary power and authority to own and use its properties and
to transact the business in which it is engaged, and has full power and authority to
enter into this Agreement, to execute and deliver the documents and instruments
required of Purchaser herein, and to perform its obligations hereunder; and no
consent of any of Purchaser's officers or members are required to so empower or
authorize Purchaser.
7.5.3. No pending or, to the knowledge of Purchaser, threatened litigation exists which
if determined adversely would restrain the consummation of the transactions
contemplated by this Agreement or would declare illegal, invalid or non-binding
any of Purchaser's obligations or covenants to Seller.
7.5.4. Purchaser is duly authorized to execute and deliver, acting through its duly
empowered and authorized officers and members, respectively, and perform this
Agreement and all documents and instruments and transactions contemplated
hereby or incidental hereto, and such execution, delivery and performance by
.Purchaser does not (i) violate any provision of any law, .governmental rule or
regulation currently in effect, (ii) violate any judgment, decree, writ, injunction,
award, determination or order currently in effect that names or is specifically
directed at Purchaser or its property, and (iii) require the consent, approval, order or
authorization of, or any filing with or notice to, any court or other governmental
authority.
7.5.5. The joinder of no person or entity other than Purchaser is necessary to
consummate the transactions to be performed by Purchaser and Purchaser has all
necessary right and authority to perform such acts as are required' and contemplated
by this Agreement.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
8.1. Purchaser's Conditions. Purchaser's obligation to close under this Agreement shall
be subject to and conditioned upon the fulfillment of each of the following conditions
precedent:
8.1.1. Documents delivered. All of the documents required to be delivered by Seller to
Purchaser at the Closing pursuant to the terms and conditions hereof shall have been
delivered and shall be in form and substance reasonably satisfactory to Purchaser.
8.1.2. Representations and Warranties. Each of the representations and warranties of
Seller contained herein shall be true in all material respects as of the Closing Date.
14
5-22
8.1.3. Covenants. Seller shall have complied with, fulfilled and performed in all
material respects each of the covenants, terms and conditions to be complied with,
fulfilled or performed by Seller hereunder.
8.1.4. Title Policy. Title Company shall be unconditionally and irrevocably obligated to
issue the Title Policy with liability in the amount of the Purchase Price showing title
to the Property vested in Purchaser and subject only to the Permitted Exceptions.
8.1.5. No Other Conditions. Notwithstanding anything to the contrary, there are no
other conditions on Purchaser's obligation to close the transaction described herein
except as expressly set forth above.
8.2. Seller's Conditions. Without limiting any of the rights of Seller elsewhere provided
for in this Agreement Seller's obligation to close the transaction described herein
shall be subject to and conditioned upon the fulfillmen_t,of each and all of the
following conditions precedent:
8.2.1. Representations and Warranties. Purchaser's representations and warranties set
forth in this Agreement shall have been true and correct in all material respects
when made, and shall be true and correct in all material respects on the Closing Date
and as of the Effective Date as though such representations and warranties were
made at and as of such date and time.
8.2.2. Covenants. Purchaser shall have fully performed and complied with all
covenants, conditions, and other obligations in this Agreement to be performed or
complied with by it at or prior to Closing including, without limitation, payment in
full of the Purchase Price.
8.2.3. Liti ag tion. There shall not be pending or, to the knowledge of either Purchaser or
Seller, any litigation or threatened litigation which, if determined adversely, would
restrain the consummation of the transactions contemplated by this Agreement or
declare illegal, invalid or non-binding any of the covenants or obligations of the
Purchaser.
ARTICLE 9
BROKERAGE
9.1. Broker. Seller and Purchaser each represents and warrants to the other that it has not
dealt with or utilized the services of any other real estate broker, sales person or
finder in connection with this Agreement, and each party agrees to indemnify the
other party from and against all claims for brokerage commissions and finder's fees
arising from or attributable to the misrepresentations, acts or omissions of the
indemnifying party.
ARTICLE 10
POSSESSION
15
5-23
10.1. Possession. Possession of the Property subject to the Permitted Exceptions shall be
delivered to Purchaser at the Closing, subject to Purchaser's right of entry for
inspection as set forth in ARTICLE 4 provided, however, that during the Feasibility
Period the parties shall negotiate in good faith for ashort-term, month-to-month
tenancy agreement under which Seller may be entitled to remain in possession of the
premises and, if the terms of such an agreement are agreed-upon, the execution and
delivery of such tenancy agreement shall be a condition to closing for both Purchaser
and Seller.
ARTICLE 11
DEFAULTS AND REMEDIES
I1.1. Purchaser's Remedies. Provided that Purchaser has not terminated this Agreement
and is not otherwise in default hereunder, if the Closing does not occur as a result of
Seller's default hereunder, Purchaser's sole remedy shall-be to elect to either, 1)
terminate this Agreement and receive reimbursement of the Deposit (or so much
thereof as has been received by Escrow Agent), or 2) bring an action for specific
performance to compel Seller to perform under this Agreement, including the usual
accounting incidental to an award of specific performance.
ARTICLE 12
RISK OF LOSS OR CASUALTY
12.1. Risk of Loss. Purchaser shall be obligated to acquire the Property pursuant to this
Agreement, notwithstanding that the Property is damaged by fire or other casualty
prior to the Closing Date, provided that (i) the repair, in the reasonable judgment of
Purchaser, can be completed for a cost not to exceed ONE HUNDRED THOUSAND
DOLLARS ($100,000.00), (ii) the cost to repair such damage is covered by insurance
maintained by or for Seller, (iii) any rental loss under Leases is covered by rental loss
insurance for the period necessary to complete the repairs, (iv) Seller assigns to
Purchaser all insurance proceeds and/or rights to receive insurance proceeds by
reason of such damage through Escrow on the Close of Escrow, other than proceeds
expended in restoration and repair by Seller and for rental loss proceeds applied to
rentals accruing through the Close of Escrow, and (v) Seller credits to the account of
Purchaser in Escrow, the amount of any deductible under Seller's insurance (not to
exceed the cost of repair). Any such casualty is hereinafter referred to as a "non-
material insured casualty". In the event of casualty damage to the Property, other
than anon-material insured casualty, Purchaser may, at its option, either terminate
this Agreement by giving written notice of such termination to Seller within twenty
(20) days of Purchaser's receipt of written notice of such casualty from Seller, or
elect to proceed with its purchase of the Property, in which event Seller shall transfer
and assign to Purchaser all insurance proceeds and all rights to receive insurance
proceeds by reason of such damage through Escrow at its Close, other than proceeds
expended in restoration and repair by Seller and rental loss proceeds applied to rents
accruing through the Close of Escrow and shall credit Purchaser's account in Escrow
the amount of any deductible under Seller's insurance (not to exceed the cost of
repair). If the right to receive any such insurance proceeds to be assigned to
16
5-24
Purchaser is not assignable by Seller to Purchaser, Purchaser may nevertheless elect
to close the Escrow, in which event Seller shall promptly deliver to Purchaser the
proceeds of any such insurance received by it following the Close of Escrow, except
to the extent such proceeds are in reimbursement for restoration and repair costs
incurred or to be incurred by Seller prior to the Close of Escrow and/or rental loss
proceeds for rents accruing prior to the Close of Escrow. In the event that such
damage shall occur and Purchaser elects not to purchase the Property, then Purchaser
shall have no rights in the insurance proceeds and this Agreement shall be terminated
immediately.
ARTICLE 13
EMINENT DOMAIN
13.1. Eminent Domain. In the event that at the time of Closing all or any part of the
Property is (or has previously been) acquired, or is about to-be acquired, by authority
of any governmental agency in purchase in lieu thereof. (or in the event that at such
time there is any notice of any such acquisition by any such governmental agency),
Purchaser shall have the right, at Purchaser's option, to terminate this Agreement by
giving Notice within fifteen (15) days of the occurrence of such event and recover the
Deposit hereunder, or to settle in accordance with the terms of this Agreement for the
full Purchase Price and receive the full benefit or any condemnation awazd. It is
expressly agreed. between the parties hereto that this paragraph shall in no way apply
to customary dedications for public purposes which may be necessary for the
development of the Property.
ARTICLE 14
MISCELLANEOUS
14.1. Exhibits And Schedules. All exhibits and schedules annexed hereto are a part of this
Agreement for all purposes.
14.2. Assignability. This Agreement is not assignable without first obtaining the prior
written approval of the non-assigning party; provided however that Purchaser may
assign its interest in this Agreement to any entity controlled by or under common
control with Purchaser pursuant to a written assumption agreement, signed by the
assignor and the assignee and pursuant to which the named Purchaser shall remain
liable jointly and severally with such assignee as Purchaser for all obligations of
Purchaser under this Agreement.
14.3. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
Seller and Purchaser, and their respective successors, heirs and permitted assigns.
14.4. Captions. The captions, headings, and arrangements used in this Agreement are for
convenience only and do not in any way affect, limit, amplify, or modify the terms
and provisions hereof.
]7
5-25
14.5. Number And Gender Of Words. Whenever herein the singular number is used,'the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
14.6. Notices. All notices or other communications required or permitted hereunder shall
be in writing and addressed as set forth below and either personally delivered, sent by
overnight mail (Federal Express or the like), or sent by registered or certified mail,
postage prepaid, return receipt requested, or sent by telecopy or electronic mail.
Notice hereunder shall be deemed to have been properly given or served for all
purposes and shall be deemed received upon the earlier of (i) if personally delivered,
the date of delivery to the address of the person to receive such notice if delivered
during ordinary business hours; (ii) if sent by overnight mail, the business day
following its deposit in such overnight mail facility; (iii) if mailed, on the third
business day following the date of posting by the United States post office; or (iv) if
given by telecopy or electronic mail, when the sender receives a confirmation of
receipt generated by the sending machine, if sent during ordinary business hours.
Any notice, request, demand, direction, or other communication sent by telecopy or
electronic mail must be confirmed within forty-eight (48) hours by letter mailed or
delivered in accordance with the foregoing.
If to Purchaser:
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Eric Crockett, Asst. Dir. Dev
Serv.
Phone: (619) 476-5341
E-Mail: erockett@chulavistaca.gov
If to Seller:
SD Seaport Two LP
1775 Hancock Street, Suite 200
San Diego, CA 92110
Attn: Deepak Israni
Phone: (619)296-9000
Fax: (619) 296-9090
E-Mail: Disrani(c~oacificacompanies.com
and
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Glen R. Googins, City
Attorney
Phone: (619)691-5037
E-Mail: ggoogins@chulavistaca.gov
and
Thomas P. Sayer, Jr., Esq.
9974 Scripps Ranch Blvd., #284
San Diego, CA 92131
Phone: (858)335-9590
Fax: (800) 796-4203
E-Mail: tsayerl@san.rr.com
]n each case with a copy to Escrow Agent
18
5-26
Any of the parties may designate a change of address by Notice to the other parties.
Whenever in this Agreement the giving of Notice is required, the giving of such Notice may
be waived in writing by the person or persons entitled to receive such Notice.
14.7. Governin¢ Law And Venue. The laws of the State of California shall govern the
validity, construction, enforcement, and interpretation of this Agreement, unless
otherwise specified herein except for the conflict of laws provisions thereof. All
claims, disputes and other matters in question arising out of or relating to this
Agreement, or the breach thereof, shall be decided by proceedings instituted and
litigated in the appropriate court in the County of San Diego, State of California, and
the parties hereto expressly consent to such venue.
14.8. Entirety And Amendments. This Agreement embodies the entire agreement between
the parties and supersedes all prior Agreements and understandings, if any, relating to
the Property, and may be amended or supplemented only byan instrument in writing
executed by the party against whom enforcement is sought.
14.9. Severability. If any of the provisions of this Agreement is held to be illegal, invalid,
or unenforceable under present or future laws, such provision shall be fully severable.
The Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision or by its severance
from this Agreement. In lieu of such illegal, invalid, or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as similaz
in teens to such illegal, invalid, or unenforceable provision as may be possible to
make such provision legal, valid, and enforceable.
14.10. Multiple Counterparts. This Agreement may be executed in a number of identical
counterparts. If so executed, each of such counterparts is to be deemed an original for
all purposes and all such counterparts shall, collectively, constitute one Agreement.
In making proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterparts.
14.11. Further Acts. In addition to the acts and deeds recited herein and contemplated and
performed, executed and/or delivered by Seller and Purchaser, Seller and Purchaser
agree to perform, execute and/or deliver or cause to be performed, executed and/or
delivered any and all such further acts, deeds, and assurances as may be necessary to
consummate the transactions contemplated hereby.
14.12. Construction. No provision of this Agreement shall be construed in favor of, or
against, any particular party by reason of any presumption with respect to the drafting
of this Agreement; both parties, being represented by counsel, have fully participated
in the negotiation of this instrument.
14.13. Confidentiality. Purchaser shall not disclose the terms and conditions contained in
this Agreement, shall keep the same confidential, provided that Purchaser may
19
5-27
disclose the terms and conditions of this Agreement (i) as required by law, (ii) to
consummate the terms of this Agreement, or any financing relating thereto, or (iii) to
Purchaser's or Seller's lenders, attorneys and accountants. Any information provided
by Seller to Purchaser under the terms of this Agreement is for informational
purposes only. [n providing such information to Purchaser, Seller makes no
representation or warranty, express, written, oral, statutory, or implied, and all such
representations and warranties are hereby expressly excluded. Purchaser shall not in
any way be entitled to rely upon the accuracy of such information. Such information
is also confidential and Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal representatives,
without Seller's prior written authorization, which may be granted or denied in
Seller's sole discretion.
14.14. Time Of The Essence. It is expressly agreed by the parties hereto that time is of the
essence with respect to this Agreement. - -
14.15. Waiver. Except as otherwise provided herein, no delay or omission to exercise any
right or power accruing upon any default, omission, or failure of performance
hereunder shall impair any right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as may
be deemed expedient. No waiver, amendment, release, or modification of this
Agreement shall be established by conduct, custom, or course of dealing.
14.16. Litigation Expenses. In the event either party hereto commences litigation against the
other to enforce its rights hereunder, the prevailing party in such litigation shall be
entitled to recover from the other party its reasonable attorneys' fees and expenses
incidental to such litigation.
14.17. Time Periods. Should the last day of a time period fall on a weekend or legal holiday,
the next Business Day thereafter shall be considered the end of the time period.
14.18. Exchange. Either party may structure the sale of the Property to Purchaser as a "Like
Kind Exchange" under Internal Revenue Code Section 1031. Each party shall
cooperate fully and promptly with the other's conduct of the Like Kind Exchange,
provided that all costs and expenses generated in connection with the Like Kind
Exchange shall be borne solely by the exchanging party, and neither party shall be
required to take title to or contract for the purchase of any other property. If either
party uses a qualified intermediary to effectuate the exchange, any assignment of the
rights or obligations of such party hereunder shall not relieve, release or absolve such
party of its obligations to the other party. In no event shall the Closing Date be
delayed by the Like Kind Exchange. Each exchanging party shall indemnify and hold
harmless the other party from and against any and all liability arising from and out of
the exchanging party's Like Kind Exchange.
20
5-28
NOW WHEREFORE, the parties hereto have executed this Agreement as of the date first set
forth above.
Seller
SD Scaport Two LP,
a California limited partnership
Purchaser
City of Chula Vista, a Charter City and
Municipal Corporation
By: SD Seaport Two LLC, a California
limited liability company, its General Partner
Deepak Israni, General Manager
By:
Jim Sandoval, City Manager
Attest:
By:
Donna Norris, City Clerk
Approved as to Form:
By:
Glen R. Googins, City Attorney
2l
5-29
EXHIB [TS
Exhibit 1.1.12 Excluded Permits
Exhibit 1.1.1 ~ Excluded Fixtures and Tangible Personal Property
Exhibit A Legal Description of Land
Exhibit 1.1.16 Excluded Leases
Exhibit 1.1.23 Excluded Property Contracts
Exhibit 4.2 Due Diligence Checklist
Exhibit 6.1 Prorations
Exhibit 6.2.1.1 Grant Deed
Exhibit 6.2.1.2 Bill of Sale
Exhibit 6.2.1.3 Assignment and Assumption Agreement
22
5-30
EXHIBIT 1.1.12
EXCLUDED PERMITS
To be completed during Feasibility Period.
23
5-31
EXHIBIT 1.1.15
EXCLUllED FIXTURES AND TANGIBLE PERSONAL PROPERTY
To be completed during Feasibility Period.
24
5-32
EXHIBIT A
LEGAL DESCRIPTION OF LAND
To be provided by Title Company.
25
5-33
EXHIBIT 1.1.16
EXCLUDED LEASES
To be completed during Feasibility Period.
26
5-34
EXHIBIT 1.1.23
EXCLUDED PROPERTY CONTRACTS
To be completed during Feasibility Period.
27
5-35
EXHIBIT 4.2
DUE DILIGENCE CHECKLIST
[Attach]
28
5-36
EXHIBIT 6.1
PROBATIONS
The following items shall be prorated between Seller and Purchaser as of the Closing
Date. Where appropriate, such adjustments shall be made on the basis of actual days elapsed
over the relevant billing period, unless otherwise provided:
(a) Fuel, electricity, water, sewer, gas, electric, telephone and other utility charges and
rents (except such metered utility charges which Seller shall cause to be read on the
Closing Date and billed to Seller). Purchaser shall be responsible for opening its own
utility accounts and for paying its own utility deposits, if any are required. Any and
all utility deposits made by Seller shall belong to Seller.
(b) Rents; deposits; amounts prepaid, accrued but unpaid, past due and/or delinquent
under the Contracts; equipment leases and/or conditional sale contracts assumed by
Purchaser (if any). '
(b) Rent (other than Delinquent Rent) under the Leases and refundable security deposits
and interest thereon if required by law (which will be assigned to and assumed by
Purchaser and credited to Purchaser at Closing).
(c) Delinquent Rents. If, as of the Closing Date, basic rent is in arrears ("Delinquent
Rent") then rents collected by Purchaser shall first be applied to current rent and then
to Delinquent Rent. Purchaser shall deliver Seller's pro rata share within 10 days of
Purchaser's receipt of that Delinquent Rent. This subparagraph of this Agreement
shall survive the Closing and the delivery and recording of the Deed. In no event
shall Seller be entitled, after the Closing, to bring any eviction action to collect
Delinquent Rent.
(d) If applicable, General property taxes, special taxes, special assessments and personal
property taxes payable, arising or accruing through the Closing Date.
(e) If applicable, any real estate ad valorem or similar taxes for the Property, or any
installment of assessments payable in installments which installment is payable in the
year of Closing, shall be prorated to the Closing Date based upon actual days
involved. The proration of real property taxes or installments of assessments shall be
based upon the assessed valuation and tax rate figures for the year in which the
Closing occurs to the extent the same are available; provided, that in the event that
actual figures (whether for the assessed value of the Property or for the tax rate) for
the year of Closing are not available at the Closing Date, the proration shall be made
using figures from the preceding year. Purchaser shall be solely responsible for any
and all supplemental taxes attributable to reassessment of the Property resulting from
this transaction.
29
5-37
EXHIBIT 6.2.1.1
WARRANTY DEED
[To Be Provided By Title Company]
30
5-38
EXHIBIT 6.2.1.2
BILL OF SALE
THIS BILL OF SALE ("Bill of Sale") is made as of , 2013, by SD Seaport Two
LP, a California limited partnership ("Transferor").
FOR VALUABLE CONSIDERATION, as set forth in that certain Agreement (the
"A~reement") dated as of , 2013, between Transferor and City of Chula Vista, a
Charter City and Municipal Corporation (``Transferee"), Transferor hereby sells, transfers,
assigns and delivers to Transferee all of Transferor's right, title and interest in and to the Permits
(other than Excluded Permits) and Fixtures and Tangible Personal Property, all as defined in the
Agreement (collectively, the "Personal Property"), which Personal Property is presently located
on that certain real property described in the Agreement.
TO HAVE AND TO HOLD the Personal Property unto Transferee and Transferee's
heirs, legal representatives,successors and assigns.
The Personal Property is being sold, transferred, assigned and delivered to Transferee
"AS IS", "WHERE IS" and "WITH ALL FAULTS", without any representation or warranty
whatsoever as to its condition, fitness for any particular purpose, merchantability or any other
warranty, express or implied. Transferee is hereby acquiring the Personal Property based solely
upon its own independent investigation and inspection of same and not in reliance on any
information provided by Transferor or Transferor's property manager or agents.
IN WITNESS WHEREOF, Transferor has executed this Bill of Sale as of the day and
year first above written.
Transferor:
SD Seaport Two LP,
a California limited partnership
Transferee:
City of Chula Vista, a Charter City and
Municipal Corporation
By: SD Seaport Two LLC; a California By:
limited liability company, its General Partner
Deepak Israni, General Manager
Jim Sandoval, City Manager
Attest:
By:
Donna Norris, City Clerk
31
5-39
Approved as to Form:
By:
Glen R. Googins, City Attorney
32
5-40
EXHIBIT 6.2.1.3
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assigmnent") is made as of
2013, by and between SD Seaport Two LP, a California limited partnership
("Assignor"), and City of Chula Vista, a Charter City and Municipal Corporation ("Assignee"),
with reference to the facts set forth below.
WHEREAS, Assignee has of even date herewith, pursuant to that certain
Agreement (the "Agreement") dated as of , 2013, between the parties hereto,
acquired title to that certain real property and any improvements situated thereon more
particularly described in the Agreement which is incorporated herein by this reference (the
"Property"); and
WHEREAS, in connection with the conveyance of the Property from Assignor to
Assignee, Assignor and Assignee intend and agree that Assignor's interest in all Property
Contracts, Leases and Miscellaneous Property Assets (as such terms are defined in the
Agreement) which relate to the ownership, maintenance, construction or repair and/or operation
of the Property (collectively, the "Property Contracts"), shall, to the extent assignable, inure to
the benefit of and be assigned and transferred to and assumed by Assignee.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Assignor and Assignee agree as follows:
Assignor hereby assigns and transfers to Assignee the Property Contracts, to the
extent assignable, together with any rights of Assignor (other than amounts
payable to Assignor with respect to the period prior to the date hereof) relating
thereto; provided, however, that Assignor expressly reserves the right to make its
own independent claims under, or to directly enforce, any warranties or guaranties
contained in the Property Contracts, whether such claims are instituted, or such
enforcement is sought, by Assignor before or after the date hereof. Assignor
indemnifies and holds harmless Assignee from and against any and all liabilities,
claims, damages, costs and expenses (including reasonable attorneys' fees and
court costs) arising under the Property Contracts as a result of obligations and
duties of Assignor which arose or accrued prior to the date hereof.
Assignee hereby accepts the assignment of the Property Contracts and assumes
and agrees to keep, perform and fulfill all of the duties, covenants, provisions,
conditions and obligations arising under the Property Contracts from and after the
date hereof. Assignee indemnifies and holds harmless Assignor from and against
any and all liabilities, claims, damages, costs and expenses (including reasonable
attorneys' fees and court costs) arising under the Property Contracts as a result of
obligations and duties thereunder arising from and after the date hereof.
This Assignment shall be binding upon and inure to the benefit of the parties
hereto and their successors and assigns.
33
5-41
4. Each of the parties signing this Assignment hereby warrants and represents that it
has the full legal power, authority and right to execute, deliver and 'p'erform the
obligations under this Assignment, that this Assignment has been duly authorized
by all requisite actions on the part of such warranting party, and that no remaining
action or third party action is required to make this Assignment binding upon such
per,
5. In the event a party defaults under this Assignment, such party will pay the
reasonable attorneys' fees and court costs incurred by the other party to enforce
its rights regarding such default.
6. This Assignment may be executed in any number of counterparts, each of which,
when so executed and when delivered, shall be an original, but such counterparts
shall together constitute but one and the same instrument:-
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Assumption Agreement as of the day and year first set forth above.
Assignor:
SD Seaport Two LP,
a California limited partnership
By: SD Seaport Two LLC, a California
limited liability company, its General Partner
Assignee:
City of Chula Vista, a Charter City and
Municipal Corporation
Jim Sandoval, City Manager
By:
Attest:
By:
Deepak Israni, General Manager
By:
Donna Norris, City Clerk
Approved as to Form:
By:
Glen R. Googins, City Attorney
.i4
5-42
3~
5-43
_...... _ _..-_ __ _ - ATTACHMENT B
Lease Agreement
This Lease is entered into by and between SD Seaport Two LP, a California limited
partnership, or assignee (hereinafter "Landlord"), and Pacific Tmst Bank (hereinafter "Tenant")
with regard to the following facts and circumstances:
1. PARTIES, PRENII5ES AND TERbI
1.1. Landlord: SD Seaport Two LP, a California limited partnership, 1775 Hancock Street,
Suite 200, San Diego, CA 92110, (619) 296-9090 (fax)
1.2. Tenant: Pacific Trust Bank ,Federal Savings Bank, 18500 Von Kalman Avende, Suite
1100, Irvine, CA 92612, (949) 236-5360
1.3. Premises: that certain real property upon which is constructed an office building located
at 610 Bay Blvd., Chula Vista, CA 91910 and more particulazly described on the legal
-- _-...- -.description.attached.hereto as Exhibit A._..--------... -_- --- __...-..._._ ---......._.__- ...__. -- --_.__ _ _ .-- -. -
1.4.Base Term. The term of this Lease shall commence on December 31, 2012 (hereinafter
sometimes "Commencement Date") and shall continue on a month-to-month basis until
terminated by either Landlord or Tenant by giving 30-days written notice of temunation.
1.5. Base Rent. Tenant shall payLandlord as Base Rent, for the possession and use of the
Premises, an amount equal to Thirteen Thousand Eight Hundred and No/100 Dollars
($13,800.00) per month payable in advance on the fast day of each month commencing
on Sanuary 1, 2013. All sums other than Base Rent that Tenant is obligated to pay under
this Lease will be deemed to be additional rent due, regardless of whether those sums are
designated as additional rent. The term Rent means the Base Rent and all additional rent
payable under this Lease.
2. COMMON AREA MAINTENANCE CHARGES
2. L Tenant shall not be responsible for nor chargeable for any Common Area Maintenance
charges.
3. USE OF THE PREIVIISES
3.1. Use and Reshictions on Use. The Premises shall be used for the sole purpose of
operating a bank and related office uses. Tenant shall not use or allow the Premises to be
used for a purpose or in a manner that is unlawful, illegal, or likely to cause damage to
the Premises, to adjoining property, or in a manner which would constitute a hazard to
the public or any adjoining property, or would cause a nuisance to any members of the
public.
Page 1 of 10
5-44
4. 7 TENANT IMPROVEMENTS
4.1. Tenant Improvements. Tenant accepts the Premises "as is", and Landlord is not required
to undertake, maintain, or construct any tenant improvements to the Premises prior to the
Commencement Date.
5. UTILITIES
5.1. Utilities. Landlord shall not be required to provide any utility service to the premises.
6. TAXES
6.1. Real Property Taxes. Landlord shall pay all real property taxes on the Premises.
6.2. Personal Property Taxes. Tenant shall pay all personal property taxes for personal
ptopertly located an the Premises.
-----7,--P-ARICING-RIGHTS- --- ---- ----... ._..-- ----._._._...._.._...__._.
7.1. Parking Rights. Tenant may utilize the parking spaces located on the Premises.
8. CLEANING AND JANTTORIAL
5.1. Cleaning and Janitorial. Landlord is not responsible for providing any janitorial,
cleaning or trash removal services whatsoever to the leased Premises.
9. ALTERATIONS BX TENANT
9.1. Alterations. Tenant shall not make any alterations, additions or modifications to.the
10. INSURANCE .
10.1. Tenant's Obligations. Tenant will, at Tenant's expense, obtain and keep in force at
all times the following insurance:
10.1.1. Workers' Compensation and Employer's Liability Insurance. Workers'
compensation insurance having limits not less than those required by state statute,
and covering all persons employed by Tenant in the conduct of Tenant's operations
on the Premises.
10.1.2. Property Insurance. Properly insurance covering against loss or damage by fire
and against loss or damage by other risks and hazards covered by a standard
extended coverage insurance policy including, without limitation, riot and civil
commotion, vandalism, malicious mischief, burglary and then, and, iPnot covered
Page 2 of 10
5-45
by the standard extended coverage insurance policy, insurance against loss or
damage by earthquake, to the extent available at commercially reasonable rates.
Such insurance shall be in an amount equal to the then full replacement cost of the
Premises, without deducfion for physical depreciation.
10.1.3. General LiabIlity Insurance. A policy of commercial general liability insurance
(occurrence form) having a combined single limit of not less than $1,000,000 per
occurrence providing coverage for, among other things, blanket conhactual liability,
premises, products and completed operations.
10.1.4. Tenant may also carry any other insurance that Tenant deems prudent or
advisable, including, without limitation, casualty insurance for Tenant's personal
property and liability insurance in any amounts and on any temLS acceptable to
Tenant, at Tenant's sole expense.
10.2. General Insurance Provisions:
i..- ._. .-- -.__.....-- --- - ~ ..__. __.-.
--IOi2:1: Insurance Companies: Insurance required to be inairitained by Teiiant-wilibe " "
written by companies licensed to do business in the State of California.
10.2.2, Certificates of Insurance. Tenant will deliver to Landlord certificates of insurance
for all insurance required to be maintained by Tenant no later than the
Commencement Date. Tenant will, at least thirty (30) days prior to expiration of the
policy, funush Landlord with certificates of renewal or binders. If Tenant fails to
maintain any insurance required in this Lease, Tenant will be liable for all losses and
costs resulting fi•om that failure; Landlord will have the right, but not the obligation,
to obtain insurance on behalf of Tenant, and Tenant will immediately on demand
pay Landlord the premiums on the insurance; and Landlord may declare a default
10.23. Primary Coverage. All insurance to be maintained by Tenant must, except for
workers' compensation and employer's liability insurance, be primary, without right
of conhibution from insurance of Landlord. All general liability policies shall name
Landlord as additional insureds. The limits of insurance maintained by Tenant will
not limit Tenant's liability under this Lease.
10.2.4. Use of Proceeds. Any proceeds from casualty insurance will inure to the sofa and
exclusive benefit of Landlord, and shall be used by Landlord to restore the Premises
to their pre-casualty condition.
11. INDEMNIFICATION
11.1. Indemnification of Landlord. Landlord will not be liable for any loss or damage to
person or property caused by theft, fue, acts of God, acts of a public enemy, riot, strike,
Page 3 of 10
5-46
insurrection, war, court order, requisition, or order of government body or authority,
unless caused by the acts of Landlord. Tenant will indemnify and defend Landlord, by
counsel acceptable to Landlord, against any liabilities, including reasonable attorney fees
and court costs, arising out of or relating to the following:,
11.1.1. claims of injury to or death of persons or damage to property occurring or
resulting duectly or indirectly from the use or occupancy of the Premises, or from
activities of Tenant, Tenant's invitees, or anyone about the Premises, or from any
other cause, except to the extent caused by Landlord's negligence or willful .
misconduct;
1 ] .1.2. claims for work or labor performed, or for materials or supplies furnished to or at
the request of Tenant in connection with performance of any work done for the
account of Tenant within the Premises; and
11.1.3. claims arising from any breach or default on the part of Tenant in the performance
of any covenant contained in this Lease. The provisions of this Section will survive
the expiration or ternunation of this Lease with respect to any claims or liability
occurring prior to the expiration or termination.
12. HAZARDOUS MATERIALS
12.1. Definitions. As used in this Section, Hazardous Material means any
chemical, substance or material, that is or may be hazardous to human health or to the
safety of the environment, that are now or become in the future listed, defined, or
regulated in any manner by any Environmental Law, whether such law is regulatory or
statutory, and is local, state of federal, and from time to time adopted.
Y2 2:L~se of-[-Iazardousjblaterials: Tenantwii{ztotzrse-oratlmv thezrse-afthed~remises
in a manner that may cause Hazardous Materials to be released or to become present oii,
under, or about the Premises or other properties in the vicinity of the Premises, except in
the ordinary course of the operation of a Spa.
123. Tenant's Indemnification of Landlord. Tenant will indemnify, protect, defend, and
hold harmless Landlord from all claims, judgments, causes of action, damages, penalties,
fines, tales, and expenses arising (duectly or indirectly) as a result of or in connection
with Tenant's or Tenant's Pazties' breach of any prohibition or provision of this Section,
including but not limited to claims for bodily injury, damages to the Premises or any
portion thereof and its loss of value.
13. DEFAULT
13.1. Events of Default. The occurrence of any of the following events will, at
Landlord's option, constitute an event of default (Event of Default):
Page 4 of 10
5-47
13.1.1, In the event Rent is late as defined hereunder, failure to pay Rent within three (3)
days following written demand to pay Rent by Landlord;
]3.1.2. vacation or abandonment of the Premises for a period of thirty (30) consecutive
days;
13.1.3. failure to perform Tenant's covenants under this Lease (except default in the
payment of Rent); provided that if this default is susceptible of cure and Tenant has
promptly commenced the cure of this default and is diligently prosecuting the cure
to completion, then the default must remain uncured for thirty (30) days after written
notice from Landlord;
13.1.4. the making of a general assignment by Tenant for the benefit of creditors, the
filing of a voluntarypetition by Tenant, or the filing of an involuntary petiflon by
any of Tenant's creditors seeking the rehabilitation, liquidafion, or reorganization of
Tenant under any law relating to bankruptcy, insolvency, or other relief of debtors
and, in the case of an involuntary action, the failure to remove or discharge the
petition within sixty (60) days of the filing.
13.2. Remedies. In the event of any default by Tenant under this Lease, Landlord shall
have the following remedies:
13.2,1. Termination. In the event of the occturence of any Event of Default, Landlord will
have the right to give a written tetminafion notice to Tenant and, on the date
specified in that notice, this Lease will terminate unless on or before that date all
arrears of Rent and all other sums payable by Tenant under this Lease and all costs
and expenses incurred by or on behalf of Landlord have been paid by Tenant and all
other Events of Default at the time existing have been fully cured to the satisfaction
13.2.2. Repossession. Following temunation, without prejudice to other remedies
Landlord may have, Landlord may (A) peaceably re-enter the Premises on voluntary
surrender by Tenant (B) remove Tenant and any other persons occupying the
Premises, using any legal proceedings that maybe available; (C) repossess the
Premises or relet the Premises or any part of them for any term (which maybe for a
term extending beyond the Tetm), at any rental and on any other terms and
conditions that Landlord in Landlord's sole discretion may determine, with the tight
to make reasonable alterations and repairs to the Premises; and (D) remove all
personal property.
13.2.3. Unpaid Rent. Landlord will have all the tights and remedies of a landlord
provided by applicable law, including the right to recover from Tenant (A) the
worth, at the time of award of the unpaid Rent that had been earned at the time of
termination; (B) the worth, at the time of award, of the amount by which the unpaid
Page 5 of 10
5-48
Rent that would have been earned after the date of tetmination until the time of
award exceeds the amount of loss of rent that Tenant proves could have been
reasonably avoided; (C) the worth, at the time of award, of the amount by which the
unpaid Rent for the balance of the Tenn aRer the time of award exceeds the amount
of the loss of rent that Tenant proves could have been reasonably avoided; and (D)
any other amount, and court costs, necessary to compensate Landlord for all
detriment proximately caused by Tenant's default.
13.2.4. Confinuation. Even though an Event of Default may have occurred, this Lease will
continue in effect for so long as Landlord does not tetminate Tenant's eight to
possession. Also, Landlord may enforce all of Landlord's rights and remedies under
this Lease, including the right to recover Rent as it becomes due, and Landlord,
without terminating this Lease, may, during the period Tenant is in default, enter the
Premises and relet them, or any portion of them, to third parties for Tenant's
account. Tenant will be liable to Landlord for all costs Landlord incurs in reletting
the Premises, including, without Iimitation, brokers' commissions, expenses of
_ _ ....._.. _ .. ........ .. . .. remodeling the Premises,_and similar costs. Reletting maybe fora period.shorter. o~ . _. ___ _.. _._.. _ ..
longer than the remaining Tenn. Tenant will continue to pay the Rent on the date
that it is due. No act by Landlord under this Lease, including acts of maintenance,
preservation, or efforts to lease the Premises or the appointment of a receiver on
application of Landlord to protect Landlord's interest under this Lease, will
temuuate this Lease unless Landlord notifies Tenant that Landlord elects to
terminate this Lease. In the event that Landlord elects to relet the Premises, the rent
that Landlord receives from reletting will be applied to pay the following in the
order listed:
13.2.4.1. any indebtedness from Tenant to Landlord other than Base Rent, Real
_ Property Taxes and other amounts owing_t~Lar?dlordstttder this Lease;
13.2.4.2. all costs, including maintenance, incurred by Landlord in reletting; and
13.2.4.3. Base Rent, Personal Property Taxes, and other amounts owing to Landlord
under this Lease. After deducting the payments refersed to above, any sum
remaining from the rental Landlord receives from reletting will be held by
Landlord and applied in payment of future Rent as Rent becomes due under
this Lease. In no event will Tenant be entitled to any excess rent received by
Landlord. So long as this Lease is not terminated, Landlord will have the right
to remedy any default of Tenant, to maintain or improve the Premises, to catuse
a reoeiver to be appointed to administer the Premises and new or existing
subleases, and to add to the Rent all of Landlord's reasonable costs in so doing,
with interest at the Applicable Interest Rate from the date of the expenditwe.
13.3. Cumulative. Each right and remedy ofLandlord provided for in this Lease or now
or later existing at law, in equity, by statute, or otherwise, will be cumulative and will not
Page 6 of 10
5-49
preclude Landlord from exercising any other rights or remedies provided for in this
Lease or now or later existing at law or in equity, by statute, or otherwise. No payment
by Tenant of a lesser amount than the Rent, or any endorsement on any check or letter
accompanying any check or payment as Rent, will be deemed an accord and satisfaction
of full payment of Rent. However, Landlord may accept this payment withoutprejudice
to Landlord's right to recover the balance of Rent or to pursue other remedies.
I4. ASSIGNMENT AND SUBLETTING
14.1. Prohibifion.'fenant may not assign or sublet, whether voluntarily or involuntarIly
or by operation of law, the Premises or any part of the Premises. Landlord may assign
this Lease at any time and, byway o£ example and not by limitation, anficipatas the sale
and transfer of the Premises to the City of Chula Vista and Tenant hereby specifically
consents to such assignment.
15. ESTOPPEL CERTIFICATES
151: ~EstoppelCei{ifioatis:Withinteri 10)days er"request yL"an or oiTanant; -
Landlord or Tenant, as the case will be, will deliver an estoppel certificate duly executed
(and acknowledged, if required by anylender), to any proposed mortgagee, or purchaser.
Tenant's failure to deliver this statement in that time period will be an Event of Default
under this Lease and it will be conclusive on Landlord or Tenant that:
15.1.1. this Lease is in full force and effect, without modiScation except as maybe
represented by Landlord or Tenant;
15.1.2. except for the failure to provide an estoppel certificate, there are no uncured
defaults in Landlord's or Tenant's performance; and
15.1.3. no rent payments are in arrears.
16.ATTORNMENT
16.1. Attomment. In the event of a foreclosure proceeding, the exercise of the power of
sale under any mortgage or deed of trust or the termination of a ground lease, Tenant
will, if requested, attorn to the purchaser and recognize that purchaser as Landlord under
this Lease. However, Tenant's obligafion to attorn to the purchaser will be conditioned
on Tenant's receipt of anon-disturbance agreement.
17. SUBORDINATION
17.1. Subordination to Liens. This Lease is subject and subordinate to the lien of all
mortgages and deeds of trust currently affecting the Real Property or Landlord's interest,
without the necessity of Tenant's executing fitrther instruments to effect the
subordination.
Page7of10
5-50
18. ENTRY
18.1. Entry. Landlord reserves the right to enter the Premises upon reasonable notice to
Tenant (except in case of an emergency, in which case no notice would be required) to
inspect the Premises or the performance by Tenant of the terms and conditions of this
Lease, and, during the last six (~ months of the Term, show the Premises to prospective
Tenants,
19. LATE CHARGES AND INTEREST
19.1. Late Charges. The late payment of any Rent will cause Landlord to incur
additional costs, including administration and collection costs, processing and
accounting expenses, and increased debt service. If Landlord has not received any
installment of Rent within fifteen (15) days after that amount is due, Tenant must pay
five percent (5%) of the delinquent amount, which is agreed to represent a reasonable
estimate of the cost incurred by Landlord. In addition, all delinquent amounts will bear
_ interest from the date the amount was due until paid in full at a rate per annum of the
highest rate allowed in the State of for unsecured debt.
20. MISCELLANEOUS PROVISIONS
20.1, Entire Agreement. This Lease sets forth all the agreements between Lazrdlord and
Tenant concerning the Premises, and there are no other agreements, either oral or
written, other than as set forth in this Lease.
20.2. Time. Time is of the essence in this Lease.
20.3. Attorney's Fees. In any action that either parry brings to enforce its rights under
ti~s~cas~tlte pr~vailingparty-shall-be-entttlod-taali-ofifssosts-plus-reasonable-attome~-
fees to be fixed by the court. Those costs and attorney fees will be considered a part of
the judgment in that action.
20.4. Severable. If any provision of this Lease or the application of any provision is held
by a court of competentjurisdiction to be invalid, void, or unenforceable to any extent,
the remaining provisions of this Lease and the applica[ion of it will remain in full force
and will not be affected, impaired, or invalidated
20.5. Governing Law. This Lease will be construed and enforced in accordance with the
laws of the state of California.
20.6. Successors. This Lease will be binding on and inure to the benefit of the
successors and assigns of Landlord and Tenant, their heirs and court appointed
representative.
20.7. Third Party Beneficiaries. Nothing in this Lease is intended to create any third-
Page S of 10
5-51
pazty benefit.
20.8. Memorandum of Lease. Neither Landlord nor Tenant may record this Lease or any
memorandum of this Lease.
20.9. No Agency, Etc. Nothing contained in this Lease will be deemed or construed by
[he parties, or by any third party, as creating the relationship of principal and agent,
partnership, or joint venture by the parties.lt is understood and agreed that no provision
contained in this Lease or any acts of the parties will be deemed to create any
relationship other than the relationship of landlord and Tenant.
20.10. No Merger. The voluntary or other surrender of this Lease by Tenant or.a mutual
cancellation of the Lease or a termination by Landlord will not work a merger and will,
at the option of Landlord, terminate all of any existing subtenancies or may, at Ure option
of Landlord, operate as an assignment to Landlord of any subtenancies.
20.11. No Waiver. No waiver of any default or breach under this Lease will be implied
froiri any omission to take action on account of this Tease; i~egaidlass of'aiiy custom and - -
practice or cotuse of dealing. No waiver will affect any default other than the default
specified in the waiver, and then the waiver will be operative only for the time and to the
extent stated in Ure Lease. Waivers of any covenant wlll not be construed as a waiver of
any subsequent breach of the same covenant. No waiver by either party of any provision
Linder this Lease will be effective unless in waiting and signed by that party.
20.12. Notices. All notices to be given under this Lease will be in writing and mailed,
postage prepaid, by certified or registered mail, return receipt requested, or delivered by
personal or courier delivery, or sent by facsimile (immediately followed by one of the
preceding methods), to Landlord's Address and Tenant's Address, or to any other place
at-L~ndlo~r oi' Ienax-t may desi a m ti en no ice grven he er pa
Notices will be deemed served on the earher of receipt (including receipt evidenced by
facsimile transmission confirmation) or three (3) days after the date of mailing. Notices
to Landlord shall be sent to 1785 Hancock Street, Suite 100, San Diego, CA 92110.
Notices to Tenant shall be sent to the Premises.
20.13. Authorization. Each individual executing Uus Lease on behalf of Landlord and
Tenant represents and wan•ants that she or he is duly authorized to execute and deliver
this Lease on behalf of Landlord and Tenant and Utzt the execution is binding upon
Landlord and Tenant.
20.14. Holding Over. If Tenant fails to surrender possession of the Premises or any part
of the Premises after expiration of the Tenn, the holding over will constitute amonth-to-
- month tenancy, at a rent equal to the Base Rent in effect itmnediately prior to the holding
over plus twenty five percent (25%) of the Rent. This paragraph will not be construed as
Landlord's permission for Tenant to hold over. Acceptance of Rent by Landlord
Page 9 of 10
5-52
I following expiration or termination shall not constitute a renewal of this Lease.
20.15. Upon the terminafion of this Lease or Tenant's right to possession of the Premises,
Tenant will surrender the Premises to Landlord.
20,16. Counterparts. This Agreement maybe executed simultaneously is one or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Lease is executed on this ~a day of 9¢cg.~ t5c2 , 2012, in the City of Chula Vista,
County of San Diego, Stzte of California.
i
LANDLORD: TENANT:
SD Seaport Two LP, Pacific Trust Bank
a California limited partnership _ _.....Federal_Sauings.Bank .. -..-... -- - -
1 ----- __.........__...----.. _. ..--- - -_ ...- --- --_...
By: SD Seaport Two LLC, a California limited
liability cpmpany, i,~s General Partner
By:
Richard Herrin, Executive Vice President
Chris
Page 10 of 10
5-53
,~%',i~ Se~~ 2~5~
~~s~
COUNCIL RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING A PURCHASE AND SALE
AGREEMENT WITH PACIFICA LLC TO ACQUIRE 610 BAY
BOULEVARD FOR $1.4 MILLION PLUS DUE DILIGENCE
AND CLOSING COSTS AND AUTHORIZE THE CITY
MANAGER TO ACCEPT ASSIGNMENT OF THE LEASE
AGREEMENT WITH PACIFIC TRUST BANK AND
APPROPRIATING FUNDS ACCORDINGLY
WHEREAS, the City of Chula Vista (City) and the San Diego Unified Port District
(District), in a collaborative effort with the community began working on a comprehensive Chula
Vista Bayfront Master Plan in 2002; and
WHEREAS, on May 18 2010 the District and City adopted the Final Environmental
Impact Report (UPD# 833-EIR-658; SCH No. 2005081077) for the Chula Vista Bayfront Master
Plan; and
WHEREAS, Phase I project level components will increase the demand for fire
protection services due to the change in land uses and in order to address this impact a fire
station must be constructed, staffed and operational prior to the issuance of any certificate of
occupancy for the Resort Conference Center (RCC) and prior to issuance of the first building
permit for the residential development on Parcels H-13 and H-14; and
WHEREAS, one of the site specific development projects that was analyzed at the project
level of detail was the construction of a new fire station; and
WHEREAS, in order to ensure the public services are available commensurate with
development staff has identified 610 Bay Blvd as a feasible location for a temporary fire station
to service the bayfront and has the potential to be the site of the new permanent fire station No.
11; and
WHEREAS, 610 Bay Boulevard became available in early October at an asking price of
approximately $2 million; and
WHEREAS, in early December, the seller reduced the asking price by $600,000
representing a thirty percent (30%) reduction from the initial asking price, provided a buyer
could close the purchase by December 31, 2012; and
WHEREAS, after learning of the reduction in price staff immediately began working
with the Planning Division, Public Works Department, Finance Department, Building Division,
Attorney's Office and the Fire Department to determine the suitability of this location as a
temporary, and potentially permanent, fire station; and
Resolution No.
Page 2
WHEREAS, the initial feedback from all departments was that this site would work for a
temporary, and potentially permanent, fire station; and
WHEREAS, after the site visit and upon receiving direction from the City Council, staff
requested that Pacifica Companies (Pacifica) perform the necessary due diligence and based on
the results of the due diligence proceed to acquire the site in accordance with the timeline
proposed by the seller; and
WHEREAS, the result of the due diligence investigations were positive and Pacifica
closed on the property on December 31, 2012; and
WHEREAS, it is the City's desire to purchase the site from Pacifica for the price paid
plus due diligence expenses and closing costs and it is Pacifica's desire to sell the site to the City
for the price paid plus due diligence expenses and closing costs; and
WHEREAS, the City anticipates that this property will be used for an interim and
potentially permanent fire station and the General Fund will be reimbursed for the cost of the
property through revenues generated from the bayfront as identified in the Bayfront Financing
Agreement.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista, hereby approves the purchase and sale agreement with Pacifica LLC to acquire 610 Bay
Boulevard, in the form presented to the City Council, as may have been modified by the Council
prior to its approval, a copy of which is on file in the Office of the City Clerk, and authorizes the
City Manager to execute all required documents and to accept the assignment of the current lease
agreement with Pacific Trust Bank and authorizes the following appropriations to the Non-
Departmental budget:
• $1,430,000 to the Capital expenses category from available General Fund
reserves,
• $27,600 to the Non CIP expense category for a newly created Non-CIP project
from unanticipated lease revenues.
Presented by
Gary Halbert, PE, AICP
Assistant City Manager/Development
Services Director
Approved as to form by
Glen ~ o ' ---~
~ty Attorney