PURCHASE AND SALE AGREEMENT
between
THE CITY OF RICHMOND, Seller
and
CHEVRON U.S.A INC., Buyer
October __, 2004
Point Molate Property
Richmond, California
TABLE OF CONTENTS
Page
ARTICLE 1 Purchase and Sale 2
1.1 Purchase of Inland Property 2
1.2 Lease of Shoreline Property 2
1.3 Transfer of Remainder Property 2
1.4 Reservation of Western Drive Right of Way 3
1.5 Subdivision Processing 3
1.6 Exchange 3
ARTICLE 2 Purchase Price 4
2.1 Amount and Payment 4
2.2 Jobs Program Contribution 4
2.3 Maintenance Payments 4
ARTICLE 3 Completion of Sale 4
3.1 Place and Date 4
ARTICLE 4 Title to the Property 5
4.1 Delivery of Title 5
4.2 Permitted Exceptions 5
ARTICLE 5 Review of the Property 6
5.1 Access for Review 6
ARTICLE 6 Representations and Warranties 7
6.1 Seller 7
6.2 Buyer 7
ARTICLE 7 Property Covenants 8
7.1 Navy FOSET 8
7.2 State Lands Issues 8
7.3 Shoreline Park, Open Space and Historic Preservation 8
7.4 Seller’s Surplus Property 8
7.5 New Leases and Agreements 8
7.6 Property Sold As-Is 8
ARTICLE 8 Indemnities 11
8.1 Seller 11
8.2 Buyer. 11
ARTICLE 9 Conditions Precedent 11
9.1 Seller 11
9.2 Buyer 12
ARTICLE 10 Closing 12
10.1 Procedure 12
10.2 Possession 13
10.3 Closing Costs 13
ARTICLE 11 Remedies 13
11.1 Default of Seller 13
11.2 Default of Buyer 14
11.2 Liquidated Damages 14
ARTICLE 12 General 15
12.1 Notices 15
12.2 Attorneys’ Fees 15
12.3 Conflicts of Interest 16
12.4 Non-Liability of Officials, Employees and Agents 16
12.5 Provisions Not Merged with Deeds 16
12.6 Governing Law 16
12.7 Assignment 16
12.8 Construction 16
12.9 Terms Generally 16
12.10 Further Assurances 17
12.11 Partial Invalidity 17
12.12 Waivers 17
12.13 Miscellaneous 17
Exhibits
Exhibit A Site Map and Conceptual Plan of Land Uses
Exhibit B-1 Legal Description of Owned Land
Exhibit B-2 Legal Description of Remainder Land
-ii-
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made as of October __, 2004, by and THE CITY OF RICHMOND, CALIFORNIA (“Seller”), and CHEVRON U.S.A. INC., a Pennsylvania corporation (“Buyer”),
Recitals.
A. The United States of America, acting by and through the Department of the Navy (the “Navy”), recently quitclaimed to Seller approximately two hundred twenty (220) acres of upland and approximately one hundred thirty-four (134) acres of tidal and submerged real property described on Exhibit B-I (the “Owned Land”), together with all buildings, improvements, and related and other personal property located thereon, and all rights, tenements, hereditaments, and appurtenances belonging, or in any wise appertaining, including fixtures, structures, mineral rights, water rights, appurtenant easements, rail lines and utility lines, alleys, roads, streets ways, strips, gores or railroad rights of way upon the Owned Land, and any means of ingress and egress appurtenant thereto (collectively with the Owned Land, the “Owned Property”) which is a portion of the former Naval Fuel Depot Point Molate (“NFD Point Molate”), and the Navy is expected to quitclaim to Seller an additional approximately fifty-one (51) acres of upland property following the Navy’s completion of environmental remediation in accordance with that certain “Final Supplemental Baseline Environmental Survey” dated March 3, 2003, prepared by or on behalf of the Navy, which upland property is described on Exhibit B-2, which constitutes the remainder of NFD Point Molate (the “Remainder Land”), together with corresponding improvements and appurtenances thereto (collectively with the Remainder Land, the “Remainder Property”). The Owned Property and the Remainder Property, are referred to collectively as the “Property”. The portion of the Property designated as he Shoreline Trail on Exhibit A attached hereto and all of the property on the bayside of the Shoreline Trail is referred to as the “Shoreline Property” and the portion of the Property not included in the Shoreline Property is referred to as the “Inland Property”. Both the Shoreline Property and the Inland Property are comprised of both Owned Property and Remainder Property.
B. Seller desires to sell the Inland Property and lease the Shoreline Property to Buyer, and Buyer desires to purchase the Inland Property and lease the Shoreline Property from Seller, on and subject to the terms and conditions contained herein.
W I T N E S S E T H:
In consideration of the covenants in this Agreement, Seller and Buyer agree as follows:
ARTICLE 1Purchase and Sale
1.1 Purchase of Inland Property
. Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller, upon and subject to the terms and conditions of this Agreement, all of the Inland Property.
1.2 Lease of Shoreline Property
. Upon and subject to the terms and conditions of this Agreement, Seller agrees to lease to Buyer or its Permitted Assignee (“Tenant”) and Buyer (itself or through its Permitted Assignee) agrees to lease from Seller, in accordance with this Agreement, all of the Shoreline Property for the maximum term permitted by law, currently not less than 50 years (the “Shoreline Lease”), and grant the Tenant a permanent easement for ingress and egress over and non-exclusive use, consistent with the provisions of section 7.1 below, of the Shoreline Property commencing upon the expiration of the Shoreline Lease. The Shoreline Lease shall: (i) provide for rent of $1 per year, (ii) provide Seller or another appropriate governmental or non-profit entity with permanent conservation easements, or another mechanism acceptable to Seller or such other appropriate entity to assure permanent open space status and public access to the open space and public access portions of the Shoreline Property (“Open Space Rights”), (iii) provide that the Tenant will repair and maintain shoreline rip rap for erosion control and (iv) contain such other reasonable or customary provisions as Seller and the Tenant may reasonably agree upon. The Tenant and the City Manager of Seller (if there is no City Manager of Seller at any time, the term “City Manager” shall mean the acting City Manager or Assistant City Manager) shall negotiate in good faith and agree on the form of the Shoreline Lease within twelve months after the date hereof. In lieu of leasing the Shoreline Property to Buyer or its assignee, Seller shall have the right, at its option, to grant Buyer or its assignee such other interest (including fee title) in the Shoreline Property as may be legally permitted and is agreeable to Seller and Buyer or its assignee, provided that such grant shall not require additional compensation from Buyer or its assignee and shall reserve the Open Space Rights.
1.3 Transfer of Remainder Property
. Seller’s agreement to sell the portion of the Inland Property and lease the portion of the Shoreline Property which is included in the Remainder Property to Buyer is contingent upon the Navy’s transfer of the Remainder Property to Seller. Provided the conditions set forth in section 9.2 have been satisfied, if such transfer of the Remainder Property to Seller has not occurred prior to the Closing, Buyer shall proceed with the Closing of the Owned Property and Seller and Buyer shall negotiate in good faith as to a reduction in the Purchase Price, if warranted, to reflect the exclusion of any portion of the Inland Property which is included in the Remainder Property. Following the Closing on the purchase and lease of the Owned Property, (I) Buyer may continue with efforts to obtain the conveyance of the Remainder Property by the Navy after Closing, (ii) Seller shall cooperate with and assist Buyer in such efforts (at no material cost to Seller), (iii) if the Remainder Property or any portion thereof is subsequently conveyed to Seller, Seller shall, upon direction from Buyer, promptly sell or lease, as appropriate, such Remainder Property to Buyer or its designees, and (iv) if, as and when any portion of the Remainder Property which is Inland Property is conveyed to Buyer or its designees, any portions of the Purchase Price which the parties agreed to reduce shall be paid to Seller (or an appropriate portion thereof if less than all of the Inland Property which is included in the Remainder Property is so conveyed). Prior to Closing, Seller and the Navy shall negotiate and execute a transfer agreement (the “Navy Transfer Agreement”) pertaining to the responsibilities of the Navy respecting Hazardous Materials and the process for transferring the Remainder Property to Seller. Seller shall consult with Buyer as to the terms of the Navy Transfer Agreement. At the Closing, Seller shall assign to Buyer, by assignment in form and substance reasonably acceptable to Buyer and Seller (the “Navy Rights Assignment”), all of Seller’s rights against Navy pertaining to the Property, including without limitation rights under the Navy Transfer Agreement and all indemnity and other payment rights relating to Hazardous Materials or the environmental condition of the Property.
1.4 Reservation of Western Drive Right of Way
. Land reasonably determined by Seller, after consultation with Buyer, to be sufficient for the right of way for Western Drive shall be excluded from the Property, provided, that such land so excluded from the Property shall be no less than the currently existing right of way for Western Drive.
1.5 Subdivision Processing
. Prior to Closing, Seller shall prepare and process through Seller’s normal procedures for Seller-owned property all appropriate subdivision or parcel maps necessary to create separate legal parcels for the Owned Property, the Remainder Property and the Shoreline Property, and to exclude the Western Drive right of way. Buyer shall provide all maps, surveys and other documentation required for processing of such maps.
1.6 Exchange
. If requested by Buyer, Seller shall cooperate in reasonable ways with Buyer to acquire the Property through an exchange pursuant to section1031 of the Internal Revenue Code and the Income Tax Regulations. Buyer shall be solely responsible for preparing and furnishing to Seller all agreements, escrow instructions and other documents related to the exchange. Seller agrees to enter into agreements to consummate the exchange but Seller shall not be required to take title to any exchange property. All documents to be executed by Seller in connection with any exchange shall be subject to the prior written approval of Seller, which approval Seller shall not unreasonably withhold. Seller shall not be required to assume or incur any additional obligation or liability in connection with any exchange. Any exchange shall not delay or postpone the Closing Date. Seller shall have no liability to Buyer if any exchange fails to qualify for no recognition treatment under the income tax laws, and Buyer shall not be released from its obligations under this Agreement to buy the Property if any exchange fails for any reason. Buyer shall reimburse Seller at the Closing on the Closing Date for all additional costs and expenses, including reasonable attorneys’ fees and disbursements, incurred by Seller in connection with any exchange, whether or not any exchange is completed. Buyer shall indemnify and defend Seller against and hold Seller harmless from all claims, demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, arising from or related to any participation by Seller in any exchange, whether or not any exchange is completed.
ARTICLE 2Purchase Price, Contributions and Post Closing Obligations
2.1 Amount and Payment of Purchase Price
. The total purchase price for the Inland Property (the “Purchase Price”) shall be fifty million dollars ($50,000,000). At the Closing (as hereinafter defined) on the Closing Date (as hereinafter defined), Buyer shall pay the total Purchase Price to Seller in cash in immediately available funds.
2.2 Jobs Program Contribution
. Within ten (10) days after this Agreement has been fully executed and delivered, Buyer shall contribute to Seller, in addition to the Purchase Price, the sum of five million dollars ($5,000,000) (the “Jobs Program Contribution”) in cash in immediately available funds. The Jobs Program Contribution shall be used by Seller in its sole discretion to fund job training, creation and implementation within the City of Richmond. The Jobs Program Contribution shall not be refundable to Buyer, except that, if the purchase and sale of the Property is not completed and this Agreement terminates due to a material default by Seller under or a material breach by Seller of this Agreement, then the Jobs Program Contribution shall be returned to Buyer on demand.
2.3 Post Closing Maintenance Obligations
. Following the Closing, Buyer shall pay Seller, separate and apart from the Purchase Price, the sum of twenty-five million dollars ($25,000,000), payable in twenty-five (25) equal annual installments of one million dollars ($1,000,000) each (the “Maintenance Payments”) commencing on the first anniversary of the Closing Date and on each subsequent anniversary until paid in full. The Maintenance Payments shall be paid to a reserve account maintained by Seller for the purpose of funding infrastructure maintenance costs for various public improvements relating to the Property and designated by Seller.
ARTICLE 3Completion of Sale
3.1 Place and Date
. The purchase and sale of the Property shall be completed in accordance with Article9 hereof (the “Closing”). The Closing shall occur through an escrow with Fidelity National Title Company (the “Title Company”) at 3220 Blume Street, Suite 215, Richmond, California 94806, on the later of (a) December 6, 2004, or (b) a date selected by Buyer and Seller that is within fifteen (15) days after satisfaction of the conditions precedent set forth in Article 9 below (the “Closing Date”), or at such other place or on such other date as Seller and Buyer agree in writing. Notwithstanding the foregoing, if the Closing has not occurred by October 5, 2005, then either party (unless such party is in material breach of this Agreement) may terminate this Agreement by written notice to the other party. Prior to the Closing Date, Seller and Buyer each shall give appropriate written escrow instructions, consistent with this Agreement, to the Title Company for the Closing in accordance with this Agreement.
ARTICLE 4Title to the Property
4.1 Delivery of Title
. At the Closing, Seller shall convey title to the Inland Property to Buyer, by a duly executed and acknowledged Quitclaim Deed (the “Deed”), and shall convey leasehold title to the Shoreline Property to Tenant pursuant to the Shoreline Lease, in each case free and clear of all liens, encumbrances, leases, easements, restrictions, rights, covenants and conditions of any kind or nature whatsoever, except the “Permitted Exceptions”, as that term is defined in section 4.2 hereof. By acceptance of the Deed and the Shoreline Lease and the Closing of the purchase and sale and lease of the Property, (i) Buyer agrees it is assuming for the benefit of Seller all of the obligations of Seller with respect to the Permitted Exceptions from and after the Closing, and (ii) Buyer agrees that Seller shall have conclusively satisfied its obligations with respect to title to the Property. The provisions of this Section shall survive the Closing. Delivery of title in accordance with the foregoing shall be evidenced by the issuance by the Title Company, at Closing, its Owner’s/Leasehold ALTA Policy of Title Insurance in the amount of the Purchase Price showing (i) fee title to the Inland Property which is Owned Land and, if appropriate, the Remainder Land vested in Buyer, and (ii) a leasehold estate in the Shoreline Property which is Owned Land, and if appropriate, the Remainder Land, vested in Buyer, all subject only to the Permitted Exceptions (the “Title Policy”). Buyer shall prepare, at Buyer’s cost, any survey of the Inland Property necessary to support the issuance of the Title Policy. Buyer shall provide Seller with a copy of such survey at no cost to Seller.