13-0319_ACCRETIVE REALTY INVESTMENTS, LLC_G2a_Agenda Report30
City of San Juan Capistrano
Agenda Report
TO: Honorable Mayor and City Council Members
FROM: Hans Van Ligten, City Attomee�,i, � 1
DATE: March 19, 2013
3/19/2013
Gla
SUBJECT: Consideration of a Purchase and Sale Agreement Relating to Lot 217
(Parcel No. 650-592-02)
RECOMMENDATION:
Consider the Purchase and Sale Agreement with Accretive Realty regarding the sale of
Lot 217 (Parcel No. 650-592-02) and, if approved, by motion, authorize the Mayor to
execute the Purchase and Sale Agreement.
EXECUTIVE SUMMARY:
The City Council has determined to dispose of Lot 217 so it may be put to productive
use. Based upon review of proposals from a number of interested parties, the Real
Property Subcommittee has recommended selecting Accretive Realty as the successful
proposer. Staff recommends the City Council consider the Purchase and Sale
Agreement (Attachment 1) and if found appropriate, authorize the Mayor to execute the
Agreement on the City's behalf.
DISCUSSION/ANALYSIS:
To ensure that the City received competitive proposals for the sale of Lot 217, the City
Council on August 21, 2012, selected CBRE, Inc. to market and represent the City for
the sale of the Lot 217 property.
CBRE received a number of offers to purchase the property as a result of their
marketing campaign, which were reviewed by staff and the City Council Real -Property
Subcommittee, consisting of Mayor John Taylor and City Council Member Larry Kramer
with the City Manager. After reviewing the offers and receiving direction on price and
terms, the City Attorney prepared a draft purchase and sale agreement that was
negotiated with Accretive Realty. Staff recommends that the City Council review and
authorize the execution of the Purchase and Sale Agreement.
FISCAL IMPACT:
If transaction is closed as described in the Purchase and Sale Agreement, the City will
receive net proceeds after cost of sale and other prior agreements have been satisfied.
City Council Agenda Report
March 19, 2013
Page 2 of 2
ENVIRONMENTAL IMPACT:
Not applicable.
PRIOR CITY COUNCIL REVIEW:
Not applicable.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable.
NOTIFICATION:
Not applicable.
ATTACHMENT(S):
Attachment 1 — Draft Purchase and Sale Agreement.
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS ("Agreement") is made and entered into as of March _, 2013 ("Effective
Date"), by and between CITY OF SAN JUAN CAPISTRANO, a California municipal
corporation ("City"), and ACCRETIVE REALTY INVESTMENTS, LLC, a California limited
liability company ("Buyer"). In consideration of the mutual agreements contained in this
Agreement and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, City desires to sell, and Buyer desires to purchase, the Property
described below, for the Purchase Price and upon the terms and conditions set forth below:
ARTICLE 1
CERTAIN DEFINITIONS AND FUNDAMENTAL PROVISIONS
This Article 1 sets forth certain definitions and fundamental provisions for purposes of
this Agreement.
1.1 "Buyer's Address" means:
Accretive Realty Investments, LLC
19752 MacArthur Blvd, Suite 240
Irvine, CA 92612
Attention: Thomas LeBeau
Telephone: (949) 856-1044
E -Mail: debeau@accretiverealty.com
Facsimile: (949) 856-1045
1.2 "City's Address" means:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California
Attention: Karen P. Brust, City Manager
Telephone: (949) 443-6314
E-mail: kbrust@sanjuancapistrano.org
Facsimile: (949) 493-1053
With copy to:
Newmeyer & Dillion LLP
895 Dove Street, 5`h Floor
Newport Beach, CA 92660
Attention: Jane M. Samson, Esq.
Telephone: (949) 271-72 09
E -Mail: jane.samson@ndlf.com
Facsimile: (949) 854-7099
With copy to:
Rutan & Tucker, LLP
611 Anton Boulevard, 14 Floor
Costa Mesa, CA 92626
Attention: Hans Van Ligten, Esq.
Telephone: (714) 641-5100
E-mail: hvanligten@rutan.com
Facsimile: (714) 546-9035
1.3 "Closing Date" means fifteen (15) business days following the expiration of the
Due Diligence Period. The terms the "Close of Escrow", and/or the "Closing" are used herein
to mean the time the Grant Deed is recorded in the Office of the County Recorder of Orange
County, California.
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ATTACHMENT 1
1.4 "Deposit" means: One Hundred Twenty Thousand Dollar ($120,000.00) earnest
money deposit made by Buyer in accordance with the terms of Section 2.2 below, together with
any interest earned thereon.
1.5 "Opening of Escrow" means: The date upon which Escrow Holder receives a
fully executed copy of this Agreement, which date shall be identified by Escrow Holder by
written notice delivered to City and Buyer. The Opening of Escrow shall take place within three
(3) business day of the execution of this Agreement by Buyer and City.
1.6 "Escrow Holder" means First American Title Company whose address is:
First American Title Company
5 First American Way
Santa Ana, CA 92707
Attn: Jeanne Gould, Senior Escrow Officer
Tel: (714) 250-5381
Email: iagouldOfirstam.com
Facsimile: (714) 913-6372
Escrow No.:
1.7 "Due Diligence Period" means the period commencing upon the Effective Date
and continuing for a period of one hundred twenty (120) days thereafter. The Due Diligence
Period may be extended pursuant to Section 10.2 below.
1.8 "Purchase Price" means Three Million Six Hundred Thousand Dollars
($3,600,000.00).
1.9 "Title Company" means First American Title Company, whose address is:
First American Title Company
1250 Corona Pointe Court, Ste. 201
Corona, CA 92879
Attn: Steven Clark, Senior Title Officer
Telephone: (951) 256-5878
email: sclark@firstam.com
Facsimile: (951) 280-9060
Title Order No.:
1.10 "Property" means that certain real property comprised of approximately 4.79
acres of vacant land, located in the City of San Juan Capistrano, County of Orange, more
particularly described on Exhibit "A" attached hereto, together with all right, title and interest
that City may have in and to all easements in or upon such land and all other rights, privileges
and appurtenances pertaining thereto.
ARTICLE 2
CONSIDERATION
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2.1 Purchase Price. The Purchase Price to be paid by Buyer to City for the sale and
conveyance of the Property is specified in Section 1.8, and shall be payable in cash to City at the
Closing, subject to proration and adjustments at the Closing Date as provided in this Agreement,
which funds must be delivered in a manner to permit Escrow Holder to deliver good funds to the
City or its designee on the Closing Date.
2.2 Deposit. Within one (1) business day of the Opening of Escrow, Buyer shall
deposit with Escrow Holder in "good funds" the Deposit, to be held in an interest bearing
account. The Deposit shall be fully refundable during the Due Diligence Period, except in the
case of a Buyer Default (defined in Section 7.1 below) under Section 10.1 of this Agreement
during the Due Diligence Period. Unless this Agreement has been terminated on or before the
expiration of the Due Diligence Period pursuant to Section 3.1.5 below, the Deposit shall be (i)
non-refundable from and after the expiration of the Due Diligence Period (except as otherwise
provided in this Agreement) and (ii) applicable to the Purchase Price at Closing.
2.3 Disposition of Deposit Following Due Diligence Period. Notwithstanding
anything to the contrary set forth in this Agreement, in the event Buyer has delivered
unconditional written notice to Escrow Holder and City confirming completion of Buyer's due
diligence and its decision to close pursuant to Section 3.1.5 below, then (i) the Deposit shall be
retained by City as liquidated damages in the event the Closing fails to occur due to a Buyer
Default under this Agreement, and (ii) the Deposit shall be returned to Buyer in the event the
Closing fails to occur as a result of a City Default (defined in Section 7.1 below) under this
Agreement, or the failure of one of the condition to Buyer's obligation as provided in Section
4.12 below (except in the case of a failure of condition due solely to a Buyer Default in which
case the City shall retain the Deposit as liquidated damages) or the termination of this Agreement
pursuant to Section 9 below.
2.4 Termination of Agreement. Subject to Section 2.5 below, if Buyer does not
confirm in writing its completion of its due diligence and decision to proceed with the close prior
to expiration of the Due Diligence Period, this Agreement shall automatically terminate without
further notice and Escrow Holder shall return the Deposit to Buyer upon Buyer executing
cancellation escrow instructions confirming termination of this Agreement and termination of the
Escrow. Buyer's failure to confirm termination of this Agreement by executing cancellation
escrow instructions within five (5) business days following written notice to do so shall
constitute a material default under this Agreement.
2.5 Independent Contract Consideration. Notwithstanding anything to the
contrary set forth in this Agreement, City and Buyer agree that One Hundred Dollars ($100.00)
of the Deposit ("Independent Contract Consideration') has been bargained for as
consideration for City's execution and delivery of this Agreement and Buyer's right to approve
or disapprove any Buyer contingencies set forth in this Agreement. The Independent Contract
Consideration is in addition to and independent of any other consideration or payment provided
for in this Agreement and is non-refundable in all events.
ARTICLE 3
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CONDITIONS PRECEDENT: FEASIBILITY PERIOD AND TITLE
3.1 Due Diligence Period. During the Due Diligence Period specified in Section 1.7
and subject to compliance with the requirements of this Section 3. 1, Buyer shall have the right to
inspect the Property, to have the Property inspected by its engineers, to undertake environmental
surveys and assessments of the Property and to conduct such other due diligence, at Buyer's sole
cost and expense, all as Buyer deems appropriate, provided however that any invasive testing of
the Property shall be subject to City's prior written consent, which consent may be withheld or
provided, at City's sole discretion. Buyer shall use care and consideration in connection with all
of its inspections and testing and restore the Property to substantially its same physical condition
as existed prior to such testing and inspections.
3. 1.1 Prior to any entry on the Property by Buyer for any invasive testing, Buyer
shall secure and maintain: (a) a comprehensive general liability and property damage
policy in an amount of not less than Two Million Dollars ($2,000,000.00) which will
cover the activities of Buyer and its agents, employees, consultants and contractors on the
Property and shall name City as an additional insured thereunder, and (b) workers'
compensation and employer's liability insurance in accordance with the provisions of
California law. On request by City, Buyer shall provide a certificate of insurance
evidencing the insurance required in this Section.
3.1.2 Buyer shall conduct all inspections and studies at its sole cost and expense
and in accordance with all applicable laws.
3.1.3 Buyer shall defend, reimburse, indemnify and hold City harmless (with
counsel satisfactory to City) from all liability, damage, cost and expense (including
reasonable attorneys' fees) arising from the negligence or willful misconduct of Buyer,
Buyer's agents, contractors and/or subcontractors on the Property, and/or from any and
all investigation, assessment, testing, monitoring or inspection, or other activities
conducted upon the Property by Buyer, Buyer's agents, contractors and/or subcontractors
as contemplated herein. Buyer shall take all steps, including filing appropriate bonds if
necessary, to keep the Property free of mechanic's liens as a result of Buyer's activities
contemplated herein. The indemnity under this Section shall survive the Closing or the
termination of this Agreement for any reason.
3.1.4 Buyer shall deliver to City a copy of all third party reports, materials,
studies and investigations conducted by Buyer on or concerning the Property, excluding
those prepared by Buyer's counsel (collectively, `Buyer Reports") within three (3)
business days following the termination or deemed termination of this Agreement by
Buyer. True and complete copies of the Buyer Reports shall be delivered by Buyer to
City, at no cost to City and lien -free, but without any representation or warranty by Buyer
as to the quality, completeness or accuracy of the contents of the Buyer Reports.
3.1.5 During the Due Diligence Period, Buyer may, in its sole discretion for any
reason, terminate this Agreement; provided City and Escrow Holder are notified of such
termination in writing on or before expiration of the Due Diligence Period, whereupon
Buyer shall pay all reasonable escrow fees, Escrow Holder shall deliver the Deposit to
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Buyer pursuant to Section 2.2 above and neither party shall have any further liability to
the other, except for Buyer's indemnity of City under this Section 3.1, Buyer's delivery
to City of the "Buyer Reports" (as defined above) and any other obligations which
expressly survive the termination of this Agreement. If Buyer wishes to proceed with
this Agreement, it will deliver written notice to City and Escrow Holder prior to
expiration of the Due Diligence Period. Buyer's failure to provide an unconditional
written notice to Escrow Holder and City confirming completion of Buyer's due
diligence and its decision to close shall automatically terminate this Agreement.
3.1.6 During the Due Diligence Period, Buyer shall review the "Title
Documents" and inform the Escrow Holder and City in writing of whether Buyer will
accept title subject to the Permitted Exceptions (defined below) pursuant to Section 3.2
below.
3.1.7 Commencing upon the occurrence of the following: (i) the Opening of
Escrow and (ii) Buyer's delivery of the Deposit to Escrow Holder, and thereafter until the
Close of Escrow, City shall make available at City Hall , to Buyer for Buyer's review
(and copying at Buyer's expense, should Buyer so elect) copies of all other
environmental reports, surveys, maps, tests, plans, studies and other reports pertaining to
the physical condition of the Property, title to the Property and its improvement and
development which are in City's possession to the extent obtained by City as a result of
City's ownership of the Property and not in City's capacity as a regulatory agency
(collectively "City's Documents"). Buyer shall provide City with reasonable prior
notice of its election to review City's Documents. City's Documents shall exclude any
information which may be in the possession of a third party consultant, engineer or other
person, but which is not also in City's actual possession or control. City makes no
representation or warranty regarding the accuracy or completeness of any information
contained in City's Documents, all such information being made available on an "AS -IS"
basis. If Buyer elects to proceed with the purchase of the Property pursuant to
Section 3.1.5 above, Buyer shall be deemed to have acquired the Property subject to all
information and matters referenced in City's Documents and made available to Buyer as
provided above whether or not Buyer has elected to review City's Documents. If this
Agreement is terminated for any reason other than a City Default, Buyer shall, within five
(5) days following such termination, return to City all information, surveys, studies,
documents, reports and data obtained by Buyer hereunder, and Buyer shall thereafter
keep and hold all such information respecting the Property in strict confidence (and
Buyer's obligation to keep all such information confidential shall survive such
termination). Buyer acknowledges that City will deliver some or all of City's Documents
to Buyer during the Due Diligence Period, that such delivery shall be made as an
accommodation only, and that City's delivery of such informatiop shall in no way
constitute a representation or warranty by City that it is delivering all of City's
Documents, or any portion thereof. In such event, such information shall have been
provided on an "AS -IS" basis without representation or warranty, and Buyer
acknowledges that if Buyer desires to review the entirety of City's Documents, Buyer
must do so by reviewing such information at City's offices.
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3.2 Title Review and Survey. Title to the Property shall be conveyed by City to
Buyer at the Closing free and clear of all liens, restrictions, easements, encumbrances and title
objections, except for the Permitted Exceptions as defined below.
3.2.1 Substantially concurrent with the Opening of Escrow, Buyer and City
shall request that Escrow Holder (also referred to herein from time to time as "Title
Company") prepare and promptly deliver to Buyer a preliminary title report
("Preliminary Report") describing the state of title of the Property, together with copies
of all recorded instruments specified therein (collectively, the "Title Documents').
3.2.2 Buyer shall review the Title Documents, and within forty (40) days from
the Opening of Escrow deliver to City in writing its approvals and objections with regard
to anything contained or set forth therein. Any items not expressly objected to by Buyer
on or before such date, shall be deemed approved. All items so approved or deemed
approved by Buyer shall be referred to as "Permitted Exceptions". Notwithstanding
anything to the contrary set forth in this Section 3.2, at or prior to the Close of Escrow,
City shall cause to be removed any monetary liens imposed upon the Property other than
non -delinquent real property taxes and assessments (including any CFD or similar
assessments) and any matters caused or permitted by Buyer and such monetary liens shall
not constitute Permitted Exceptions.
3.2.3 If City is unable or unwilling, within three (3) business days after notice of
Buyer's objections, to cure such defects expressly objected to by Buyer pursuant to
Section 3.2.2 above, then Buyer, within an additional three (3) business days, may (a)
terminate this Agreement upon three (3) business days' written notice to City (in which
event Escrow Holder shall deliver the Deposit in accordance with Section 2.2 above), or
(b) notify City that Buyer will close subject to such uncured objections as Permitted
Exceptions. Buyer's failure to elect either alternative within the prescribed 3 business
day period shall be deemed an election to terminate this transaction in accordance with
Clause (a) above.
3.2.4 On or prior to the Closing, City shall use reasonable efforts to deliver to
the Title Company, any and all documentation reasonably required by the Title Company
to commit to issue to Buyer at Closing a CLTA standard coverage owner's title policy,
subject only to the Permitted Exceptions, in the amount of the Purchase Price showing
title vested in Buyer (the "Owner's Policy"). Buyer may elect to obtain an ALTA
extended coverage owner's policy of title insurance (provided Buyer shall be responsible
for any survey and policy costs associated therewith). The issuance of ALTA extended
coverage shall not be a condition precedent to Buyer's obligation to Closing, and Buyer
shall not object to the Closing based upon an inability to obtain, or any delays in
obtaining, such coverage.
3.2.5 Upon the issuance of any amendment or supplement to the Preliminary
Report which adds additional exceptions ("Additional Exceptions'), Buyer shall have
the right to review and approve such amendment or supplement within five (5) business
days of Buyer's receipt thereof. Any items not expressly objected to by Buyer within
said five (5) business day period shall be deemed approved. In the event Buyer
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disapproves of any Additional Exceptions within said five (5) business day period, Buyer
shall have the right to terminate this Agreement and obtain a return of its Deposit.
Notwithstanding the preceding sentence, Buyer shall allow City at least three (3) business
days following written notice of termination to either remove or commit in writing to
remove such disapproved title matter to Buyer's reasonable satisfaction. If City removes
such matters or commits in writing to do so within said three (3) business day period,
Buyer's termination notice shall be of no force or effect and Escrow Holder shall proceed
with the Closing as contemplated herein (provided that removal of such objectionable
item at or prior to the Closing shall be a condition precedent for Buyer's benefit). If City
does not either remove such matters or commit in writing to do so within said three (3)
business day period, the Deposit shall be returned to Buyer and this Agreement shall
terminate as provided for above.
ARTICLE 4
CLOSING
4.1 Closing Date. The Closing of the purchase and sale contemplated hereby shall be
held at the offices of Escrow Holder on the Closing Date. Notwithstanding anything to the
contrary set forth in this Agreement, in the event the Closing does not occur on or before
September 19, 2013 (the "Outside Closing Date"), then either Buyer or City may, in its sole and
absolute discretion and by delivery of written notice to the other, thereafter terminate this
Agreement. In the event of such termination, Buyer shall be entitled to the return of the Deposit,
and all interest accrued thereon, and Buyer and City shall be released from all further liability
and obligation hereunder (except for such obligations which expressly survive termination of this
Agreement).
4.2 City Deliveries. • At least one (1) business day prior to the Closing Date, City
shall execute and/or deliver (or cause to be delivered) to Escrow Holder the following:
4.2.1 One (1) original grant deed in the form of Exhibit "B" ("Grant Deed")
executed and acknowledged by City.
4.2.2 One (1) original California Form 593-C Real Estate Withholding
Exemption Certificate ("California Residency Affidavit").
4.3 City Costs and Expenses. At Closing, City shall pay the following costs and
expenses: (i) any documentary transfer taxes on the Grant Deed and any other conveyancing
instruments; (ii) the premium for the Owner's Policy; and (iii) one=half (1/2) of the customary
escrow charges.
4.4 Buyer Deliveries. At least one (1) business day prior to the Closing Date, Buyer
shall execute and/or deliver (or cause to be delivered) to Escrow Holder the following:
4.4.1 One (1) original Preliminary Change of Ownership Statement.
4.4.2 Such funds and other items and instruments as may be necessary in order
for Escrow Holder to comply with this Agreement.
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4.5 Buyer's Costs and Expenses. At Closing, Buyer shall pay the balance of the
Purchase Price, one-half (1/2) of the customary escrow charges, and the recording and filing fees
for the Grant Deed and any financing placed on the Property by Buyer, all title charges for any
extended coverage, ALTA survey, title endorsements or other title protections selected by Buyer.
4.6 Property Taxes. City is exempt from the payment of property taxes and will not
be required to pay any taxes for the Property. Buyer shall pay all property taxes and assessments
for the Property from and after the Closing Date.
4.7 Escrow Holder's Actions. Upon the Closing Date, when Escrow Holder holds
the items required to be deposited by City and Buyer as described above and Title Company is
prepared to issue and deliver to Buyer the applicable Owner's Policy, Escrow Holder is
instructed and authorized to (a) record the Grant Deed in the Office of the County Recorder of
the County of Orange; (b) pay any transfer taxes; (c) instruct the County Recorder to return the
original of the Grant Deed to Buyer; (d) disburse to City from the funds deposited into Escrow
by Buyer the Purchase Price less the Deposit and less City's escrow costs and expenses; (e)
disburse from funds deposited by Buyer amounts toward payment of all other items chargeable
to the account of Buyer hereunder, and disburse the balance of such funds, if any, to Buyer; (f)
deliver to Buyer one duplicate original of the California Residency Affidavit and the Owner's
Policy and (g) deliver to City one duplicate original of the California Residency Affidavit.
4.8 Escrow Cancellation Charges. If the Closing does not occur due to a default by
one of the parties, the defaulting party shall bear all Escrow Cancellation Charges. If the Closing
does not occur for any reason other than the default of a party, then Buyer and City shall each
pay one-half (%2) of any Escrow Cancellation Charges. As used herein, "Escrow Cancellation
Charges" means all fees, charges and expenses incurred by Escrow Holder or third parties
engaged by Escrow Holder, as well as all expenses related to the services of the Title Company
in connection with the issuance of the Preliminary Report and other title matters.
4.9 Possession Upon Closing. Upon Closing, City shall deliver possession of the
Property to Buyer.
4.10 City Conditions: The following conditions are conditions precedent to City's
obligation to close the purchase of the Property:
4.10.1 There shall exist no pending or threatened actions, suits, arbitrations,
claims, attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, against the Buyer that would materially
and adversely affect the Buyer's ability to unconditionally perform its obligations under
this Agreement.
4.10.2 All of Buyer's representations and warranties in this Agreement shall be
true and correct in all material respects.
4.10.3 Buyer shall have delivered the funds required hereunder and all of the
documents to be executed by Buyer set forth in Section 4.4 and shall not be in default
under this Agreement.
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In the event any of the foregoing conditions are not either satisfied on or before
the date specified for satisfaction of each respective condition, or expressly waived by
City in writing, City shall have the right to terminate this Agreement in accordance with
Section 4.12.
4.11 Buyer Conditions. The following conditions are conditions precedent to Buyer's
obligation to close the purchase of the Property:
4.11.1 City shall have delivered all of the documents and other items required
pursuant to Section 4.2 and not be in default under this Agreement;
4.11.2 All of City's representations and warranties set forth in Section 6.5 shall
be true and correct in all material respects.
4.11.3 The Title Company has irrevocably committed to issue the Owner's Policy
as required by Section 3.2.4.
In the event any of the foregoing conditions are not either satisfied on or before
the date specified for satisfaction of each respective condition, or expressly waived by
Buyer in writing, Buyer shall have the right to terminate this Agreement in accordance
with Section 4.12.
4.12 Failure of Conditions. In the event any condition to the obligation of Buyer or
City to purchase the Property has not been satisfied on or before the dates specified therein or, if
no date has been specified, on or before the Closing Date, Buyer (if such condition is for the
benefit of Buyer) or City (if such condition is for the benefit of City) shall have the right to
terminate this Agreement and the Escrow by delivery of written notice to the other party and to
Escrow Holder. In the event of such termination, the Deposit shall be returned to Buyer along
with all interest earned thereon while held in Escrow (except in the case of a failure of condition
due solely to a Buyer Default in which case City shall retain the Deposit as liquidated damages
pursuant to Section 7.2). In the event of such termination, neither party shall thereafter have any
obligations to, or rights against, the other under this Agreement, except for the indemnity
obligations of Buyer under Section 3.1.3 above and any other obligations that expressly survive
the termination of this Agreement. Notwithstanding anything to the contrary in the foregoing,
this Section 4:12 shall not apply in the event of the Closing failing to occur due to a City Default
or a Buyer Default, in which event the provisions of Article 7 shall instead apply.
ARTICLE 5
NATURAL HAZARD DISCLOSURE
5.1 Natural Hazard Disclosure. Buyer and City acknowledge that City is required
to disclose if the Property lies within the following natural hazard areas or zones: (a) a special
flood hazard area designated by the Federal Emergency Management Agency; (b) an area of
potential flooding; (c) a very high fire hazard severity zone; (d) a wild land area that may contain
substantial forest fire risks and hazards; (e) an earthquake fault or special studies zone; or (f) a
seismic hazard zone. Buyer and City hereby instruct Escrow Holder, or an affiliate thereof (who,
in such capacity, is herein called the "Natural Hazard Expert") to examine the maps and other
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information specifically made available to the public by government agencies for the purposes of
enabling City to fulfill its disclosure obligations with respect to the natural hazards referred to
above and to report the results of its examination to Buyer and City in writing. Escrow Holder
shall provide a written report prepared by the Natural Hazard Expert regarding the results of its
examination no later than twenty (20) days prior to the expiration of the Due Diligence Period.
The written report prepared by the Natural Hazard Expert regarding the results of its examination
fully and completely discharges City from its disclosure obligations referred to herein, and, for
the purposes of this Agreement, the provisions of Civil Code Section 1103.4 regarding the non -
liability of City for errors and/or omissions not within its personal knowledge shall be deemed to
apply, and the Natural Hazard Expert shall be deemed to be an expert dealing with matters
within the scope of its expertise with respect to the examination and written report regarding the
natural hazards referred to above.
ARTICLE 6
REPRESENTATIONS. DISCLAIMERS. RELEASE AND INDEMNITY.
6.1 Buyer Representations. Buyer hereby represents and warrants to City that the
following statements are true and correct now and as of the date of the Closing, and shall
thereafter expire and be of no further force or effect:
6.1.1 Buyer is duly organized and existing in good standing under the laws of
the state in which is it organized. Buyer has the power to own property and to carry on
its business as now being conducted and is duly qualified to do business and is in good
standing in every jurisdiction in which the nature of its business makes such qualification
necessary. Buyer is duly and legally authorized to enter into this Agreement and carry
out and perform all covenants to be performed by it hereunder and its right to execute this
Agreement is not limited by the existence of any other contracts or agreements
whatsoever.
6.1.2 Buyer represents and wan -ants that, except for City's express
representations and warranties set forth in Section 6.5 below, neither City, nor any of
them, or their employees, agents or representatives have made any representations,
warranties or agreements to or with Buyer as to any matters concerning the Property, the
present use thereof, or the suitability of Buyer's intended or contemplated use of the
Property, or the availability of government permits or approvals of any kind. Buyer
further represents and warrants to City that it and its representatives and employees have
made or will make their own independent inspection and investigation of the Property
and further acknowledge and agree the Property shall be purchased, conveyed and
accepted by Buyer in its present condition, ASIS, and that no patent or latent physical
condition of the Property, whether or not known or discovered shall affect the rights of
either party hereto.
6.2 Disclaimer. It is understood and agreed that, except for City's express
representations and warranties set forth in Section 6.5 below, City has not at any time made and
is not now making, and City specifically disclaims, any warranties or representations of any kind
or character, express or implied, with respect to the Property, or any improvements thereon,
2202/0284284M
3028827.6 x03/13/13 -10-
including, but not limited to, warranties or representations as to (a) matters of title,
(b) environmental matters relating to the Property or any portion thereof, including, without
limitation, the existence or lack thereof of Hazardous Materials (as defined below) in, on, under
or in the vicinity of the Property, or migrating to or from the Property, either in soil, vapors or
surface water or groundwater, (c) geological conditions, including, without limitation,
subsidence, subsurface conditions, water table, underground water reservoirs, limitations
regarding the withdrawal of water, and geologic faults and the resulting damage of past and/or
future faulting, (d) whether, and to the extent to which the Property or any portion thereof is
affected by any stream (surface or underground), body of water, wetlands, flood prone area,
flood plain, floodway or special flood hazard, (e) drainage, (f) soil conditions, including the
existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility
to landslides, or the sufficiency of any undershoring, (g) the presence of endangered species or
any environmentally sensitive or protected areas, (h) zoning or building entitlements to which the
Property or any portion thereof may be subject, (i) the availability of any utilities to the Property
or any portion thereof including, without limitation, water, sewage, gas and electric, 0) the
permitted uses and restrictions on uses on the Property, (k) usages of adjoining property,
(1) access to the Property or any portion thereof, (m) the value, compliance with the plans and
speciflcations, size, location, age, use, design, quality, description, suitability, structural integrity,
operation, title to, or physical or financial condition of the Property or any portion thereof, or any
income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to
the Property or any part thereof, (n) the condition or use of the Property or compliance of the
Property with any or all past, present or future federal, state or local ordinances, rules,
regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (o) the
existence or non-existence of underground storage tanks, surface impoundments, or landfills,
(p) the merchantability of the Property or fitness of the Property for any particular purpose,
(q) tax consequences, or (r) any other matter or thing with respect to the Property.
6.3 Sale "AS IS WHERE IS. WITH ALL FAULTS." Buyer acknowledges and
agrees that City is selling and conveying to Buyer, the Property, "AS IS, WHERE IS, WITH
ALL FAULTS," and that, except for City's express representations and warranties set forth in
Section 6.5 below, Buyer has not relied on and will not rely on, and City has not made and is not
liable for or bound by, any express or implied warranties, guarantees, statements, representations
or information pertaining to the Property or relating thereto, made or furnished by City or any
real estate broker, agent or third party representing or purporting to represent City, to whomever
made or given, directly or indirectly, orally or in writing. Buyer represents that it is a
knowledgeable, experienced and sophisticated purchaser of real estate and that, Buyer is relying
solely on its own expertise and that of Buyer's consultants and representatives in purchasing the
Property, and shall make an independent verification of the accuracy of any documents and
information provided by City. Buyer will conduct such inspections and investigations of the
Property as Buyer deems necessary, including, but not limited to, the physical and environmental
conditions thereof, and shall rely solely upon the same. By failing to terminate this Agreement
prior to the expiration of the Due Diligence Period, Buyer acknowledges that City has afforded
Buyer a full opportunity to conduct all such investigations of the Property as Buyer deemed
necessary to satisfy itself as to the condition of the Property and the existence or non-existence or
removal or remediation action to be taken with respect to any Hazardous Materials in, on, within
or migrating to or from the Property, and that Buyer will rely solely upon the same and not upon
any information provided by or on behalf of City or its agents or employees with respect thereto.
2202/02842&0002 -11-
1028827.6 a03/13/13
Upon Closing, Buyer shall assume the risk that adverse matters, including, but not limited to,
adverse physical or construction defects, or adverse environmental or health and safety
conditions, may not have been re ealed by Buyer's inspections, assessments, investigations,
and/or testing.
BUYER'S INITIALS: L
6.4 Release. By failing to terminate this Agreement prior to the expiration of
the Due Diligence Period, Buyer hereby acknowledges that it will have had full opportunity to
investigate, assess, test, and inspect the Property during the Due Diligence Period, and that
during such period, to observe the physical and environmental characteristics and existing
conditions, including but not limited to, the opportunity to conduct such investigation,
assessment, testing, monitoring and study on and of the Property and of adjacent areas, as Buyer
deems necessary, in accordance with law. Except with respect to City's indemnification
obligations set forth in Section 8.1 of this Agreement and City's express representations and
warranties set forth in Section 6.5 below, Buyer, therefore, individually and collectively, for
itself and its members, partners, officers, directors, employees, agents, successors, assigns, and
all entities related to any of the foregoing, and on behalf of all persons claiming any interest in
the Property or this Agreement, including but not limited to any and all future owners, lessees,
and/or operators, of the Property and their successors, and effective upon the Closing Date,
hereby expressly waives, releases, discharges and forever relinquishes any and all claims, rights
of action, causes of action, rights and/or remedies Buyer has or hereafter may have, whether
known or unknown, fixed or contingent, against City and City's affiliates, directors, officers,
attorneys, employees, partners, members, shareholders and agents (a) regarding any matters
affecting the Property and any condition of the Property whatsoever; and (b) regarding: (i) the
existence or potential existence of any Hazardous Materials in, on, under, within or migrating to
or from the Property, either in soil, vapor, surface water or groundwater, and (ii) any violations
or alleged violations of any Environmental Laws regarding the Property.
BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTION 1542 ("SECTION 1542'1, WHICH IS SET FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR."
BUYER ACKNOWLEDGES AND AGREES THAT IT MAY HEREAFTER
DISCOVER FACTS OR LAW DIFFERENT FROM OR IN ADDITION TO
THOSE WHICH IT NOW BELIEVES TO BE TRUE WITH RESPECT TO THE
RELEASE OF CLAIMS. BUYER ACKNOWLEDGES AND AGREES THAT
THE RELEASE IT IS PROVIDING SHALL REMAIN EFFECTIVE IN ALL
RESPECTS NOTWITHSTANDING SUCH DIFFERENT OR ADDITIONAL
FACTS OR LAW OR ANY PARTIES' DISCOVERY THEREOF. BUYER
220=8423-M -12-
5028827.6 &03113/13
SHALL NOT BE ENTITLED TO ANY RELIEF IN CONNECTION
THEREWITH, INCLUDING BUT NOT LIMITED TO ANY DAMAGES OR
ANY RIGHT OR CLAIM TO SET ASIDE OR RESCIND THIS AGREEMENT.
BY INITIALING BELOW, BUYER HEREBY WAIVES AND RELEASES
ANY AND ALL RIGHTS PROVIDED UNDER THE PROVISIONS OF
SECTION 1542 AND ALL SIMILAR OR RELATED STATUTES THERETO,
IN CONNECTION WITH THESE MATTERS WHICH ARE THE SUBJECT
OF THE FOREGOING WAIVERS AND RELEASES:
BUYER'S INITIALS:
6.5 City's Representations. Except with respect to matters discovered by Buyer
during the Due Diligence Period, City represents and warrants to Buyer that to City's "actual
knowledge", there is no litigation pending or threatened against the City that arises out of the
ownership of the Property or that might materially and detrimentally affect the ability of City to
perform its obligations under this Agreement. The representations set forth in this Section 6.5
shall be accurate as of the execution of this Agreement and shall survive the Closing for a period
of six (6) months, and shall thereafter expire and be of no further force or effect. For purposes
of this Section 6.5, the term City's "actual knowledge" shall mean the current actual knowledge
of Karen P. Brust only, acting in her capacity as City Manager of the City, without independent
investigation or inquiry of any kind, and without the obligation to undertake any such
investigations or inquiry, and shall expressly exclude any imputed or constructive knowledge of
any other party or person.
6.6 Integral Part of Agreement. Buyer acknowledges and agrees that the disclaimers,
waivers and releases along with the other agreements set forth in this Section 6, are all an
integral part of this Agreement, and City would not have agreed to enter into this Agreement
without such terms, and that all such terms shall survive the Close of Escrow.
6.7 Definitions.
6.7.1 As used in this Agreement, the term "Hazardous Material(s)" includes,
without limitation, any hazardous or toxic material, substance, irritant, chemical, or
waste, including without limitation (a) any material defined, classified, designated, listed
or otherwise considered under any Environmental Law, including, without limitation, as
defined in California Health & Safety Code Section 25260, as a "hazardous waste,"
"hazardous substance, hazardous material, extremely hazardous waste, acutely
hazardous waste," "radioactive waste," "biohazardous waste," "pollutant," "toxic
pollutant," "contaminant," "restricted hazardous waste," "infectious waste," "toxic
substance," or any other term or expression intended to define, list, regulate or classify
substances by reason of properties harmful to health, safety or the indoor or outdoor
environment, (b) any material, substance or waste which is toxic, ignitable, corrosive,
reactive, explosive, flammable, infectious, radioactive, carcinogenic or mutagenic, and
which is or becomes regulated by any local governmental authority, any agency of the
State of California or any agency of the United States Government, (c) asbestos, and
asbestos containing material, (d) oil, petroleum, petroleum based products and petroleum
=2102e428 -M -13-
5028827.6 03113113
additives and derived substances, (e) urea formaldehyde foam insulation,
(f) polychlorinated biphenyls (PCBs), (g) freon and other chlorofluorocarbons, (h) any
drilling fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources, (i) mold,
fungi, viruses or bacterial matter, and 0) lead-based paint.
6.7.2 For the purposes of this Agreement, the term "Environmental Laws"
means any and all federal, state and local laws, statutes, ordinances, orders, rules,
regulations, guidance documents, judgments, governmental authorizations, or any other
requirements of governmental authorities, as may presently exist, or as may be amended
or supplemented, or hereafter enacted, relating to the presence, release, generation, use,
handling, assessment, investigation, study, monitoring, removal, remediation, cleanup,
treatment, storage, transportation or disposal of Hazardous Materials, or the protection of
the environment or human, plant or animal health, including, without limitation, the
following statutes and their underlying regulations, as they have been amended from time
to time, and the following referenced common laws: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 gi Mg.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et 1N.), the Federal Water Pollution Control Act (33
U.S.C. § 1251 et s„ e�C .), the Clean Air Act (42 U.S.C. § 7401 et seMc .), the Toxic
Substances Control Act (15 U.S.C. § 2601 et §M.), the Oil Pollution Act (33 U.S.C.
§ 2701 et Mg.), the Emergency Planning and Community Right -to -Know Act (42 U.S.C.
§ 11001 et s„ eq.), the Porter -Cologne Water Quality Control Act (Cal. Wat. Code § 13000
se
et .), the Toxic Mold Protection Act (Cal. Health & Safety Code § 26100, et Ng.), the
Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65 — Cal. Health
& Safety Code § 25249.5 et sec .), the California Hazardous Waste Control Law (Cal.
Health & Safety Code § 25100 et seg.), the Hazardous Materials Release Response Plans
& Inventory Act (Cal. Health & Safety Code § 25500 et g -), the Carpenter -Presley -
Tanner Hazardous Substances Account Act (California Health and Safety Code,
Section 25300 et §M.), the California Underground Storage of Hazardous Substances
Laws (Chapter 6.7 of Division 20 of the Cal. Health and Safety Code, §25280 et §M-) and
the California common laws of nuisance, trespass, waste and ultra -hazardous activity.
ARTICLE 7
DEFAULT; REMEDIES.
7.1 Default. The term "City Default" shall mean: (a) the failure of City to perform
in any material respect, any material act to be performed by City, or to refrain from performing
in any material respect any material act prohibited hereby, if such failure has not been remedied
by City within five (5) business days following receipt of written notice from Buyer to City and
Escrow Holder identifying such failure. The term "Buyer Default" shall mean the failure of
Buyer to perform in any material respect any material act to be performed by Buyer if such
failure has not been remedied by Buyer within five (5) business days following receipt of written
notice from City identifying such failure.
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5028827.6 x03/UM
7.2 Liquidated Damages.
7.2.1 Default of City• Waiver of Damages, Specific Performance. IN THE
EVENT THE CLOSE OF ESCROW AND THE CONSUMMATION OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT DO NOT OCCUR
BY REASON OF A "CITY DEFAULT" AS DEFINED IN SECTION 7.1 ABOVE,
BUYER, AS ITS SOLE AND EXCLUSIVE REMEDY WILL BE ENTITLED TO,
AT BUYER'S SOLE OPTION, (I) A RETURN OF ITS DEPOSIT, TOGETHER
WITH ANY INTEREST EARNED THEREON WHILE HELD BY ESCROW
HOLDER, AND (II) AN ACTION FOR SPECIFIC PERFORMANCE OF THIS
AGREEMENT. BUYER HEREBY WAIVES ANY RIGHT TO PURSUE AN
ACTION OR CLAIM- FOR DAMAGES RESULTING FROM SUCH CITY
DEFAULT, AND IN NO EVENT SHALL CITY BE LIABLE FOR DAMAGES
FOR A BREACH OF CITY'S OBLIGATION TO SELL THE PROPERTY TO
BUYER, ALL OF WHICH RIGHTS ARE HEREBY WAIVED AND
RELINQUISHED BY BUYER. BUYER AGREES THAT THE FOREGOING
LIMITATION ON ITS REMEDIES AND MEASURE OF DAMAGES IS
REASONABLE UNDER ALL OF THE CIRCUMSTANCES OF THIS
AGREEMENT, AND IS MATERIAL CONSIDERATION FOR CITY ENTERING
INTO THIS AGREEMENT, WITHOUT WHICH CITY WOULD NOT HAVE
ENTERED INTO THIS AGREEMENT. NOTWITHSTANDING THE
FOREGOING, THE FOREGOING SHALL NOT APPLY TO OR OTHERWISE
LIMIT ANY RECOVERY BY BUYER UNDER ANY INDEMNITIES MADE BY
CITY UNDER SECTION 8.1 HEREIN OR WITH RESPECT TO CITY'S
EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 6.5 BELOW OR TO ANY ATTO/REYS' FEES OR COSTS
RECOVERABLE BY BUYER HEREUNDER. ////
INITIALS: CITY BUYER:
7.2.2 BUYER'S DEFAULT. IN THE EVENT THE CLOSE OF ESCROW
AND THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY
THIS AGREEMENT DO NOT OCCUR BY REASON OF A "BUYER DEFAULT"
AS DEFINED IN SECTION 7.1 ABOVE, THE DEPOSIT AND ANY ACCRUED
INTEREST SHALL BE PAID TO CITY AS LIQUIDATED DAMAGES. THE
PARTIES AGREE THAT (a) PAYMENT OF THE DEPOSIT TO CITY IS
INTENDED TO COMPENSATE CITY FOR DAMAGES IT WILL SUFFER AS A
RESULT OF BUYER'S BREACH HEREOF AND NOT AS A PENALTY OR
FORFEITURE; (b) CITY'S DAMAGES IN THE EVENT OF A BUYER'S
DEFAULT ARE IMPOSSIBLE * OR EXTREMELY DIFFICULT TO
ACCURATELY ASCERTAIN AND THAT PROOF OF SUCH AMOUNT
WOULD BE COSTLY, TIME-CONSUMING AND INCONVENIENT; (c) THE
AMOUNT OF THE DEPOSIT IS FAIR AND REASONABLE IN LIGHT OF ALL
OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT AND AT THE TIME OF PAYMENT, INCLUDING THE
RELATIONSHIP OF SUCH AMOUNT TO THE RANGE OF HARM TO CITY
THAT REASONABLY COULD BE ANTICIPATED; (d) THIS CLAUSE HAS
2207!028428.0002 -15-
5028827,6 a03/13113
BEEN THE SUBJECT OF SPECIFIC NEGOTIATION; (e) EACH PARTY HAS
HAD THE OPPORTUNITY TO HAVE COUNSEL FULLY EXPLAIN THE
CONSEQUENCES OF THE CLAUSE; (f) EACH PARTY FULLY
UNDERSTANDS THE CONSEQUENCES OF THIS CLAUSE; AND (g) SUCH
LIQUIDATED DAMAGES SHALL BE CITY'S SOLE AND EXCLUSIVE
REMEDY FOR BUYER'S DEFAULT AND BUYER SHALL HAVE NO OTHER
OR FURTHER OBLIGATION OR LIABILITY UNDER THIS AGREEMENT TO
CITY ON ACCOUNT OF SUCH DEFAULT OR BREACH.
NOTWITHSTANDING THE FOREGOING, THE FOREGOING SHALL NOT
APPLY TO OR OTHERWISE LIMIT ANY RECOVERY BY. CITY BASED
UPON BUYER'S BREACH OF SECTIONS 3.1 OR 8.1 OF THIS AGREEMENT,
BUYER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH
IN THIS AGREEMENT AND/OR ANY POST -CLOSING OBLIGATIONS OF
BUYER PURSUANT TO THIS AGREEMENT AND/OR ANY ATTORNEYS'
FEES OR COSTS RECOVERABLE BY CITY HEREUNDER. THE PAYMENT
AND RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF
CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO CITY PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671,167fi AND 1677.
INITIALS: CITY BUYER:
ARTICLE 8
COMMISSION
8.1 Buyer is represented by Madison Street Partners ("Buyer's Broker") and City is
represented by CBRE, Inc. ("City's Broker") in connection with the sale contemplated in this
Agreement and City shall be responsible for and shall pay a commission to (i) City's Broker
pursuant to separate written agreement between City and City's Broker and (ii) upon the.Close of
Escrow, Buyer's Broker in an amount equal to two percent (2%) of the Purchase Price, the total
amount of (i) and (ii) shall not exceed five (5%). Buyer and City represent and warrant to each
other that other than City's Broker and Buyer's Broker, they have not dealt with any other real
estate or business broker, agent, finder, or other person that may be entitled to a finder's fee or
commission for this transaction. City and Buyer each agrees to pay and protect, indemnify,
defend and hold harmless the other from and against all liability, damages, attorneys' fees, court
costs and expenses from causes of action, suits, claims, demands and judgments of any nature
whatsoever arising out of or in any way connected with its dealings with any other real estate
brokers or others pertaining to this transaction (other than City's Broker and Buyer's Broker).
This Section 8.1 shall survive the Closing.
ARTICLE 9
220210284280002 -16-
5028827.6 u03AUD
RISK OF LOSS.
9.1 Condemnation. If, at any time on or before the Closing, any action or
proceeding is filed or threatened under which the Property or any portion thereof may be taken
pursuant to any law, ordinance or regulation or by condemnation, the right of eminent domain or
by deed -in -lieu, then at the sole option of Buyer (a) this Agreement shall be null and void and the
Deposit shall be promptly returned to Buyer by Escrow Holder, or (b) this Agreement shall
remain in full force and effect and City, at the time of Closing hereunder, shall transfer and
assign all of City's rights, title and interests in and to any proceeds received or which may be
received by reason of such taking, or a sale in lieu thereof, which option shall be exercisable by
Buyer by delivering to City written notice on or before the fifth business day following the date
on which Buyer receives notice that such suit has been filed or is threatened. If such five -
business -day period extends beyond the date of Closing, as herein provided, Buyer shall have the
right to extend the date of Closing, to allow Buyer the full five business days in which to
exercise his options hereunder. Buyer's failure to respond in such five (5) business day period
shall conclusively constitute Buyer's election of the option described in clause (b) above in this
Section 9.1.
9.2 CasualtL With respect to any casualty that occurs to the Property after the date
hereof, and either (i) the casualty is an uninsured casualty and City, in its sole and absolute
discretion, does not elect (within thirty (30) days after such casualty) to cause the damage to be
repaired or restored or give Buyer a credit at Closing for such repair or restoration, or (ii) the
portion of the Property that is damaged or destroyed has a cost of repair that is in excess of
$100,000, as reasonably determined by Buyer and City, this Agreement shall automatically
terminate. If this Agreement is terminated pursuant to this Section 9.2, the Deposit shall be
returned to Buyer and, thereafter, this Agreement shall terminate and neither party to this
Agreement shall have any further rights or obligations hereunder other than any arising under
any section herein which expressly provides that it shall survive the termination of this
Agreement. City shall promptly give notice to Buyer of the occurrence of any such casualty.
ARTICLE 10
ADDITIONAL BUSINESS TERMS
10.1 Boer's Application for Governmental Approvals. During the Due Diligence
Period, Buyer intends to submit Buyer's site plan and elevations for approval by the City's
Planning Commission and if applicable, approval by the City Council (collectively, the
"Governmental Applications") in connection with Buyer's planned development of a single
structure medical building on the Property. For purposes of this Agreement, the Governmental
Applications shall be deemed approved upon the occurrence of the following (the "Government
Approval"): (i) the City's Planning Commission and if applicable, the City Council has
approved the Governmental Applications subject to terms and conditions acceptable to Buyer
and (ii) the period in which to appeal such Government Application approvals has expired
without any appeal having been filed. Buyer hereby covenants to use its commercially
reasonably good faith efforts to seek, at Buyer's sole cost and expense, the Governmental
Approvals within the initial Due Diligence Period set forth in Section 1.7 above which
commences on the Effective Date and expires one hundred and twenty (120) days following the
2202/028428-0002 -17-
So28827.6 x03/13/13
Effective Date (the "Application Period'). Buyer shall be deemed to have used its
commercially reasonably good faith efforts to seek such Governmental Approvals pursuant to
this Section 10.1 if Buyer submits its Governmental Applications to the City (for approval by the
City's Planning Commission and if applicable, approval by the City Council) within sixty (60)
days after the Effective Date, and Buyer thereafter continues to use commercially reasonable
good faith efforts to seek such Governmental Approvals within the Application Period.
10.2 Extension of Due Diligence Period. Provided that a Buyer Default does not exist
and Buyer has submitted the Governmental Applications to the City Planning Commission, and
if applicable, to the City Council before the expiration of the Application Period, Buyer may
extend the Due Diligence Period solely for the purposes of obtaining the Government Approval,
by providing City with written notice thereof prior to the expiration of the initial Due Diligence
Period. Notwithstanding the foregoing, in no event shall the extension of the Due Diligence
Period pursuant to this Section 10.2 extend the Outside Closing Date and the Goverment
Approval shall not be a condition precedent to the Closing. In the event Buyer does not obtain
the Government Approval on or before the expiration of the Due Diligence Period, Buyer has the
right to terminate this Agreement on or before the expiration of the Due Diligence Period as
provided for in Section 3.1.5 (in which event Section 2.2 will be applicable).
10.3 Reservation of Discretion. Buyer is aware, understands, and acknowledges that
the City is by law required to exercise its sole unfettered discretion in approving or denying
certain land use, development or permit approvals required for the Property. Neither this
Agreement nor any other agreement with Buyer obligates the City to approve, disapprove or
consider any such land use, development or permit approvals for the Property in any particular
manner.
ARTICLE 11
MISCELLANEOUS
11.1 Non -Liability of Officials and Employees of City. No officer, official,
member, employee, agent, representative, or volunteer of City shall be personally liable to Buyer
or any successor in interest, in the event of any City Default or for any amount which may
become due to Buyer or its successors, or on any obligations, in each case, under the terms of
this Agreement.
11.2 Relationship Between City and Buyer. It is hereby acknowledged that the
relationship between City and Buyer is not that of a partnership or joint venture and that City and
Buyer shall not be deemed or construed for any purpose to be the agent of the other.
11.3 City Approvals and Actions. This Agreement shall be administered by the City
Manager, or his designated representative, following approval of this Agreement by City. The
City Manager or his authorized representative shall have the authority to issue interpretations,
waive provisions and enter into amendments of this Agreement on behalf of City.
11.4 Further Assurances. Each of the Parties shall execute and deliver any and all
additional papers and documents, as may be reasonably necessary and required by Escrow
Holder to comply with this Agreement.
2202ro28428-=2 -18-
$028827.6 .03113113
11.5 Beneficiaries. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, legal representatives, successors and
assigns.
11.6 Applicable Laws. This Agreement shall be governed by the laws of the state in
which the Property is located.
11.7 Assignment Of Agreement. Buyer shall have no right to assign their rights and
obligations under this Agreement except to a limited liability company or corporation controlled
by Buyer or in which Buyer has a controlling interest, and only if City is promptly notified in
writing thereof prior to the assignment and the assignee assumes Buyer's obligations under this
Agreement in writing. Subject to the foregoing limitations, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors, heirs,
administrators and assigns. Notwithstanding the foregoing, no assignment shall relieve the
assigning party from its liability under this Agreement.
11.8 Time Of Essence. Time is of the essence in the performance of all obligations
hereunder.
11.9 Counterparts. This Agreement may be executed in counterparts each of which
shall constitute an original and all of which together shall have the same full and binding effect
as a single executed copy. Photocopy, facsimile, electronic, or other copies shall have the same
effect for all purposes as an ink -signed original.
11.10 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and must be delivered either by personal service or by first-class
mail, registered or certified, postage prepaid, return receipt requested, or by such expedited
courier service where receipt by addressee can be confirmed by said courier service in writing
(Federal Express, Express Mail, telecopy, etc.), and properly addressed specified in Section 1.1
and Section 1.2. Notices shall be deemed received by the addressee upon the earlier to occur of
(i) actual receipt; (ii) two (2) business days after mailing by registered or certified mail; (iii) one
(1) business day after sending by overnight courier for next business day delivery; or (iv) the
same day if sent by telecopy, all in accordance with the terms of this paragraph. Either party
may change its address for notice purposes by giving written notice of such new address to the
other party.
11.11 Validity; Waiver. The invalidity of any provision of this Agreement shall not
affect the validity of the remainder of this Agreement. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver or be binding unless executed in
writing by the waiving party.
11.12 Construction. Each party and its counsel have reviewed and revised this
Agreement. The normal rule of construction that ambiguities are resolved against the drafting
party shall not be employed in interpreting this Agreement or any amendments or exhibits
thereto.
2202/028428-0002 -19-
5028827.6 003AUD
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.
Attest:
Maria Morris, City Clerk
Approved as to form:
Hans Van Ligten, City Attorney
CITY:
CITY OF SAN JUAN CAPISTRANO
a municipal corporation
0
John Taylor, Mayor
BUYER:
ACCRETIVE
a California l:
By:_
Name:
Title:
(L VESTMENTS, LLC,
' ity company
2202!028428 M signature page - 1
5028827.6 43/13/13 p g
ACCEPTANCE BY ESCROW HOLDER
The undersigned hereby acknowledges and agrees to act as Escrow Holder thereunder
and to be bound by and perform the terms thereof as such terms apply to Escrow Holder.
Dated: .2013
FIRST AMERICAN TITLE COMPANY
M-
Jeanne Gould, Escrow Holder
2202M2842"M signature page - 2
5028827.6 a03113113p g
LIST OF EXHIBITS
Exhibit A - Legal Description
Exhibit B - Grant Deed
22021028428.0002
5028827.6 a03113113
EXHIBIT "A"
LEGAL DESCRIPTION
All that certain real property situated in the County of Orange, State of California, described as
follows:
(INSERT LEGAL DESCRIPTION PRIOR TO OPENING OF ESCROW)
APN: 650-592-01 and 650-592-02
EXHIBIT "A"
PURCHASE AND SALE AGREEMENT AND
o2U2�$e0o�na JOINT ESCROW INSTRUCTIONS
EXHIBIT "B"
GRANT DEED
[see attachedl
EXHIBIT "B"
PURCHASE AND SAGE AGREEMENT AND
22O2M28428-0002
$028827.6 a00}!1313/131 13 JOINT ESCROW INSTRUCTIONS
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Attn:
AND ALL TAX STATEMENTS TO:
SAME AS ABOVE
DOCUMENTARY TRANSFER TAX IS NOT OF PUBLIC RECORD SPACE ABOVE THIS LINE
AND 1S SHOWN ON A SEPARATE SHEET ATTACHED TO THIS DEED FOR RECORDER'S USE
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, CITY
OF SAN JUAN CAPISTRANO, a California municipal corporation ("Grantor"), hereby grants
to ("Grantee"), the real property located in the City of San Juan
Capistrano, County of Orange, State of California, described on Exhibit 1 attached hereto and
made a part hereof (the "Real Property").
CITY OF SAN JUAN CAPISTRANO,
a California municipal corporation
0
John Taylor, Mayor
EXHIBIT `B"
PURCHASE AND SALE AGREEMENT AND
°�786a031113113 JOINT ESCROW INSTRUCTIONS
State of California }
County of )
On , before me, . Notary Public,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that helshe/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
State of California }
County of )
On , before me, , Notary Public,
(here insert name and title of the officer)
personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
EXHIBIT `B"
PURCHASE AND SALE AGREEMENT AND
002
5028827003/13
6 /13 JOINT ESCROW INSTRUCTIONS
Exhibit 1 to Grant Deed
Legal Description
Real property in the City of San Juan Capistrano, County of Orange, State of California,
described as follows:
220210284280002
3028827.6 403/13113