HomeMy WebLinkAbout2013 CON CDC HA - City of National City - WI-TOD Project - Purchase and Sale AgreementPURCHASE AND SALE AGREEMENT
(Westside TOD Affordable Site, National City, 91950)
(APNs: 559-124-05-00, 560-391-08-00, and 560-396-06-00)
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of the 20th day
of August, 2013 ("Effective Date") by and between City of National City ("Seller") and the
Community Development Commission -Housing Authority of the City of National City
("Purchaser").
RECITALS
A. The Seller owns the fee interest in that certain parcel of real property legally
described in Exhibit A-1 attached hereto ("Parcel 1") and the fee interest in that certain parcel of
real property legally described in Exhibit A-2 attached hereto ("Parcel 2"). Parcel 1 and Parcel
2, are defined hereinbelow, collectively as the "Real Property." The Real Property is generally
bounded by 19th Street, Harding Avenue, 22nd Street and Hoover Avenue in National City,
California.
B. The successor agency to the Community Development Commission as the
National City Redevelopment Agency ("Successor Agency") is subject to the enforceable
obligation commonly referred to as the Westside lnfill Transit Oriented Development (WI-TOD)
Disposition and Development Agreement ("DDA"), entered into June 21, 2011 with Paradise
Creek Housing Partners, LP. The DDA requires the Real Property to be acquired for and
developed into a 201 unit affordable housing project. The Purchaser's purchase of Parcel 1 and
Parcel 2 is being undertaken pursuant to the requirements of the DDA and as an enforceable
obligation of the Successor Agency. The Purchaser accepted the affordable housing functions of
the Community Development Commission of the City of National City as the Redevelopment
Agency of the City of National City pursuant to resolution number 2012-01. The value of the
consideration for the Real Property (i.e., the Parcel 1 Purchase Price for Parcel 1 and the Parcel 2
Purchase Price for Parcel 2), is not less than the appraised value of the Real Property. The
consideration being paid for Parcel 1 is the Parcel 1 Purchase Price of Three Million Eight
Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which equals the appraised
value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company
effective as of June 27, 2013, but dated June 30, 2013. The consideration being paid for Parcel
2 is the Parcel 2 Purchase Price of Three Million Two Hundred Twenty Thousand and No/100
Dollars ($3,220,000.00), which equals the appraised value of Parcel 2 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013. Provided the various conditions to Closing (as defined below) set forth in this
Agreement are satisfied, the Seller agrees to sell the Property (as defined below) to the Purchaser
and the Purchaser agrees to purchase the Property from the Seller as set forth in this Agreement.
C. The Purchaser is acquiring Parcel 1 in part utilizing United States Department of
Housing and Urban Development HOME funds. After Closing, the Seller will temporarily lease
the Property back from the Purchaser on a month -to -month basis for a total consideration of
$1.00 per month. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be
developed as the "Phase 1 Project," as defined in the DDA, which shall be an affordable rental
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housing project for persons and families of very low and low income. Construction and
operation of the Phase 1 Project shall be governed by all applicable United States Department of
Housing and Urban Development regulations and shall be consistent with the California
Community Redevelopment Law whether or not specifically referenced in this Agreement.
Failure of the Purchaser to cause Parcel 1 to be developed as an affordable rental housing project
for persons and families of very low and low income shall be a default hereunder. This
obligation shall not be merged into the Grant Deed and shall survive the Closing.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, the Seller and the Purchaser hereby agree as follows:
1. Purchase, Sale and Leaseback. In consideration of the mutual covenants set forth in this
Agreement, the Purchaser will acquire all of the Property, on the terms and conditions set forth
herein, provided the various conditions to Closing set forth in this Agreement are satisfied.
(a) Sale of the Property. The Seller agrees to sell the Property to the Purchaser, and
the Purchaser agrees to purchase the Property from Seller, on the terms and conditions set forth
herein. At Closing, the Seller shall convey the fee interest in the Real Property to the Purchaser
by recordation of the Grant Deed (as defined below). The Escrow Agent shall issue the Title
Policy (as defined below) to the Purchaser at Closing.
(b) Possession of the Property, Leaseback. The Seller shall deliver possession of the
Property to Purchaser at Closing, subject only to the Title Exceptions, all as defined hereinbelow.
Notwithstanding the foregoing, after Closing the Purchaser will allow the Seller to lease the
Property from the Purchaser on a month -to -month basis for a total consideration of $1.00 per
month, as set forth in the Lease.
2. Definitions. As used in this Agreement, the following terms shall have the following
meanings:
"Agreement" means this Purchase and Sale Agreement between the Seller and the
Purchaser.
"Applicable Environmental Law" means all laws applicable to the presence of any
Hazardous Materials (as defined below) on or within the Property, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601,
et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.); the Clean
Water Act (33 U.S.C. §2601, et seq.); the Safe Drinking Water Act (14 U.S.C. §300f, et seq.);
the Hazardous Materials Transportation Act (49 U.S.C. §5101, et seq.); the Toxic Substances
Control Act (15 U.S.C. §2601, et seq.); the Federal Water Pollution Control Act (33 U.S.C.
§1300, et seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136, et seq.);
the Atomic Energy Act (42 U.S.C. §2011, et seq.); the Nuclear Waste Policy Act (42 U.S.C.
§10101, et seq.); the Clean Air Act (42 U.S.C. §7401, et seq.); the California Hazardous Waste
Control Act (California Health and Safety Code §25100, et seq.); the Carpenter -Presley -Tanner
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Hazardous Substance Account Act (California Health and Safety Code §25300, et seq.); the Safe
Drinking Water and Toxic Enforcement Act ("Proposition 65") (California Health and Safety
Code §25249.5, et seq.); and the Porter -Cologne Water Quality Control Act (California Water
Code §13000, et seq.); and any similar federal, state or local laws, all regulations and
publications implementing or promulgated pursuant to the foregoing, as any of the foregoing
may be amended or supplemented from time to time.
"Business Day" means any day other than a Saturday, Sunday or any other day on which
Purchaser or Escrow Agent is not open for business. In the event any date, deadline or due date
set forth in this Agreement falls on a day that is not a Business Day, then such deadline or due
date shall automatically be extended to the next Business Day.
"Close" or "Closing" means the close of Escrow as provided herein.
"Closing Date" means the date on which the Closing occurs, which date shall be August
28, 2013.
"Conditions Precedent for the Benefit of the Seller" shall have the meaning set forth in
Section 5 of this Agreement.
"Conditions Precedent for the Benefit of the Purchaser" shall have the meaning set forth
in Section 6 of this Agreement.
"Deposit" shall have the meaning set forth in Section 3(b)(1) of this Agreement.
"Effective Date" is defined above.
"Escrow- means the escrow depository and disbursement services to be performed by
Escrow Agent pursuant to the provisions of this Agreement.
"Escrow Agent"" means Carla Burchard at Stewart Title Company, 5740 Fleet Street,
Suite 100, Carlsbad, California 92008.
"Grant Deed" means a duly executed and acknowledged grant deed conveying fee simple
title to the Real Property from the Seller to the Purchaser, in the form attached hereto as Exhibit
B.
"Hazardous Materials" means:
(1) Those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," "pollutant" or
"contaminant" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. §9601 et seq.); the Resource Conservation and Recovery
Act (42 U.S.C. §6901 et seq.); the Clean Water Act (33 U.S.C. §2601 et seq.); the Toxic
Substances Control Act (15 U.S.C. §9601 et seq.); the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et seq.); or under any other Environmental Laws.
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(2) Those substances included within the definitions of "Extremely Hazardous
Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under §§25115, 25117 or
25122.7 of the California Health and Safety Code, or is listed or identified pursuant to
§§25140 or 44321 of the California Health and Safety Code.
(3) Those substances included within the definitions of "Hazardous Material,"
"Hazardous Substance," "Hazardous Waste," "Toxic Air Contaminant" or "Medical
Waste" under §§25281, 25316, 25501, 25501.1. 25023.2 or 39655 of the California
Health and Safety Code.
(4) Those substances included within the definitions of "Oil" or a "Hazardous
Substance" listed or identified pursuant to §311 of the Federal Water Pollution Control
Act, 33 U.S.C. §1321, as well as any other hydrocarbonic substance or by-product.
(5) Those substances included within the definitions of "Hazardous Waste,"
Extremely Hazardous Waste" or an "Acutely Hazardous Waste" pursuant to Chapter 11
of Title 22 of the California Code of Regulations.
(6) Those substances listed by the State of California as a chemical known by the
State to cause cancer or reproductive toxicity pursuant to §25249.9(a) of the California
Health and Safety Code.
(7) Any material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures, damages or threatens to damage,
health, safety, or the environment, or is required by any law or public agency to be
remediated, including remediation which such law or public agency requires in order for
the property to be put to any lawful purpose.
(8) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field
Manual, whether or not the presence of such material resulted from a leaking
underground fuel tank.
(9) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. §136 et seq.
(10) Asbestos, PCBs, and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. §2601 et seq.
(11) Any radioactive material including, without limitation, any "source
material," "special nuclear material," "by-product material," "low-level wastes,"
"high-level radioactive waste," "spent nuclear fuel" or "transuranic waste" and any other
radioactive materials or radioactive wastes, however produced, regulated under the
Atomic Energy Act, 42 U.S.C. §§2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C.
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§§10101 et seq., or pursuant to the California Radiation Control Law, California Health
and Safety Code §§25800 et seq.
(12) Any material regulated under the Occupational Safety and Health Act, 29
U.S.C. §§651 et seq., or the California Occupational Safety and Health Act, California
Labor Code §§6300 et seq.
(13) Any material regulated under the Clean Air Act, 42 U.S.C. §§7401 et seq.
or pursuant to Division 26 of the California Health and Safety Code.
(14) Those substances listed in the United States Department of Transportation
Table (49 CFR Part 172.101), or by the Environmental Protection Agency, or any
successor agency, as hazardous substances (40 CFR Part 302).
(15) Other substances, materials, and wastes that are or become regulated or
classified as hazardous or toxic under federal, state or local laws or regulations.
(16) Any material, waste or substance that is a petroleum or refined petroleum
product, asbestos, polychlorinated biphenyl, designated as a hazardous substance
pursuant to 33 U.S.C. §1321 or listed pursuant to 33 U.S.C. §1317, a flammable
explosive or a radioactive material.
"Immediately Available Funds" means a bank wire transfer or a certified bank or
cashier's check.
"Improvements" means collectively: (i) any and all buildings, structures and
improvements, of any kind whatsoever, located at or affixed to the Real Property; (ii) all rights,
privileges and easements appurtenant to the Real Property, if any, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Real Property, if any;
and (iii) all development rights, air rights, and water rights if any, relating to the Real Property.
"Lease" means a lease in the form attached hereto as Exhibit C.
"Parcel 1" means that certain parcel of real property legally described in Exhibit A-1
attached hereto.
"Parcel 1 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel
1, which shall be Three Million Eight Hundred Fifteen Thousand and No/100 Dollars
($3,815,000.00), which amount equals the appraised value of Parcel 1 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013. A portion of the Parcel 1 Purchase Price only, is being paid by the Purchaser
utilizing Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United
States Department of Housing and Urban Development HOME funds. None of the United States
Department of Housing and Urban Development HOME funds are being used to acquire Parcel
2. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the
"Phase 1 Project," as defined in the DDA, which shall be an affordable rental housing project for
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persons and families of very low and low income. Construction and operation of the Phase 1
Project shall be governed by all applicable United States Department of Housing and Urban
Development regulations and shall be consistent with the California Community Redevelopment
Law whether or not specifically referenced in this Agreement. The Purchaser shall cause Parcel
1 to be restricted in accordance with the United States Depaitiuent of Housing and Urban
Development HOME regulations (24 CFR Part 92) and in accordance with the California
Community Redevelopment Law.
"Parcel 2" means that certain parcel of real property legally described in Exhibit A-2
attached hereto.
"Parcel 2 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel
2, which shall be Three Million Two Hundred Twenty Thousand and No/100 Dollars
($3,220,000.00), which amount equals the appraised value of Parcel 2 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013. After the Seller vacates the Property, the Purchaser shall cause Parcel 2 to be
developed as the "Phase 2 Project," as defined in the DDA, which shall be an affordable rental
housing project for persons and families of very low and low income. Construction and
operation of the Phase 1 Project shall be consistent with the California Community
Redevelopment Law whether or not specifically referenced in this Agreement. The Purchaser
shall cause Parcel 2 to be restricted in accordance with the California Community
Redevelopment Law.
"Permitted Exceptions" means collectively, the (i) the printed exceptions and exclusions
in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary
Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180-
50484; (iii) real property taxes and assessments which are a lien but not yet payable; and (iv) all
applicable building, zoning and use restrictions and/or regulations of any municipality, township,
county or state.
"Property" means collectively, the Real Property and the Improvements.
"Purchase Price" means collectively, the Parcel 1 Purchase Price and the Parcel 2
Purchase Price, which total Seven Million Thirty -Five Thousand and No/100 Dollars
($7,035,000.00).
"Purchaser" means the Community Development Commission -Housing Authority of the
City of National City; provided, however, if the Community Development Commission -Housing
Authority of the City of National City assigns its interest in this Agreement pursuant to Section
10 of this Agreement, then the term "Purchaser" shall mean such assignee.
"Real Property" means collectively, Parcel 1 and Parcel 2.
"Seller" means the City of National City.
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"Title Policy" means a CLTA Owner's Policy of Title Insurance in the amount of the
Purchase Price, insuring that title to the fee interest in the Property is vested in the Purchaser
subject only to the Permitted Exceptions, which Title Policy shall be obtained through Stewart
Title Company. Purchaser shall pay the cost of the CLTA Owner's Policy of Title Insurance and
any endorsements it desires.
3. Purchase Price.
(a) Purchase Price. The Seven Million Thirty -Five Thousand and No/100 Dollars
($7,035,000.00) Purchase Price shall be paid by Purchaser to Seller as follows:
(1) Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00)
of United States Department of Housing and Urban Development HOME funds shall be payable
at Closing, all of which is being paid by the Purchaser to acquire Parcel 1 only; and
(2) The Four Million Nine Hundred Forty -One Thousand and No/100 Dollars
($4,941,000.00) balance of the Purchase Price (constituting the remaining balance of the
purchase price for Parcel 1 in the total amount of $1,721,000 and the full purchase price for
Parcel 2 in the total amount of $3,220,000) shall be paid by the Purchaser to the Seller with
interest at the rate of zero percent (0.00%) in annual installments equal to the annual amount the
Purchaser receives from any ground leases Parcel 1 and Parcel 2 and from the residual receipts
loans that the Purchaser will be making to the affordable housing developers that will construct
affordable housing projects on each of Parcel 1 and Parcel 2 pursuant to the DDA. At Closing,
the Purchaser shall execute a promissory note in favor of Seller in a form acceptable to the Seller
and Purchaser.
(b) Deposit; Liquidated Damages.
(1) Deposit. Purchaser shall make a deposit ("Deposit") into Escrow of
Immediately Available Funds in the amount of One Thousand and No/100 Dollars ($1,000.00)
within three (3) Business Days of the Effective Date. The Deposit shall be credited against the
Purchase Price. If the Purchaser elects to terminate this Agreement prior to Closing, then the
Deposit shall be immediately returned by Escrow Agent to the Purchaser. At Closing, the
Deposit shall be released by Escrow Agent to the Seller. The Deposit, and any interest earned on
the Deposit, shall be credited in favor of the Purchaser against the Purchase Price as set forth in
Section 3(c), below.
(2) LIQUIDATED DAMAGES. THE DEPOSIT SHALL BE
REFUNDABLE TO THE PURCHASER AS MAY BE EXPRESSLY PROVIDED FOR IN
THIS AGREEMENT. IF ESCROW FAILS TO CLOSE AS A RESULT OF PURCHASER'S
DEFAULT HEREUNDER, THE SOLE REMEDY OF THE SELLER SHALL BE TO
TERMINATE THIS AGREEMENT BY GIVING WRITTEN NOTICE THEREOF TO
PURCHASER AND ESCROW AGENT, WHEREUPON THE SELLER SHALL RETAIN THE
DEPOSIT(S) ACTUALLY DEPOSITED BY PURCHASER INTO ESCROW AS
LIQUIDATED DAMAGES (AND THE SELLER WAIVES ANY RIGHT TO SPECIFICALLY
ENFORCE THIS AGREEMENT SET FORTH IN CALIFORNIA CIVIL CODE SECTION
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1680 OR 3389). THEREAFTER, NO PARTY HERETO SHALL HAVE ANY FURTHER
LIABILITY OR OBLIGATION TO ANY OTHER PARTY HERETO EXCEPT FOR: (i) THE
SELLER'S RIGHT TO RECEIVE AND RETAIN SUCH LIQUIDATED DAMAGES; AND (ii)
THE OBLIGATION OF THE PARTIES TO PAY AMOUNTS INTO ESCROW TO PAY A
PORTION OF THE FEES AND COSTS OF ESCROW AS SET FORTH IN SECTIONS 5 AND
6 BELOW. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE
SELLER'S ACTUAL DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT
HEREUNDER ARE UNCERTAIN IN AMOUNT AND DIFFICULT TO ASCERTAIN, AND
THAT SUCH AMOUNT OF LIQUIDATED DAMAGES IS REASONABLE UNDER THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ., CONSIDERING
ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE HEREOF INCLUDING,
WITHOUT LIMITATION, THE RELATIONSHIP OF SUCH AMOUNT TO THE RANGE OF
POTENTIAL HARM TO THE SELLER THAT CAN REASONABLY BE ANTICIPATED
AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES RESULTING FROM
SUCH DEFAULT WOULD BE COSTLY AND INCONVENIENT. IN PLACING ITS
INITIALS IN THE SPACE BELOW, EACH PARTY HERETO SPECIFICALLY CONFIRMS
THE ACCURACY OF THE FOREGOING AND THE FACT THAT SUCH PARTY HAS
BEEN REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION.
THE PROVISIONS OF THIS SECTION 3(B)(2) SHALL SURVIVE THE
TERMINON OF THIS AGREEME
ty AIL
Se er's Initials Pur' ser's Initials
(c) Delivery of Remainder of Purchase Price into Escrow. Not less than one (1)
Business Day prior to the Closing Date, the Purchaser shall cause hmmediately Available Funds
to be delivered to the Escrow Agent in an amount equal to $2,094,000.00 ($2,093,000.00 minus
the Deposit).
(d) Disbursement to the Seller. Immediately after the Closing, the Escrow Agent
shall disburse to the Seller the funds that the Seller is entitled to receive under this Agreement.
4. Due Diligence. The Purchaser has completed its due diligence with respect to the
Property.
5. Conditions Precedent for the Benefit of the Seller. The Seller's obligation to Close shall
be conditioned upon the satisfaction or emailed or written waiver by the Seller of all of the
conditions precedent ("Conditions Precedent for the Benefit of the Seller") set forth in this
Section 5. Any of the Conditions Precedent for the Benefit of the Seller may be waived by the
Seller unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any
such waiver shall be effective only if the same is expressly waived (i) by email from the Seller to
the Purchaser and Escrow Agent; or (ii) in a writing signed by the Seller and delivered to the
Purchaser and Escrow Agent. If the Conditions Precedent for the Benefit of the Seller are not
satisfied by the deadlines set forth in this Section 5 or expressly waived, the Seller (provided the
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Seller is not in default hereunder) may provide emailed or written notice of the Seller's
conditional termination of this Agreement to the Purchaser and Escrow Agent. After receipt of
such notice of conditional termination, the Purchaser shall have ten (10) Business Days to cure
any non -satisfaction of a condition or other default specified in the notice of conditional
termination; provided, however, the foregoing grace period shall be two (2) Business Days if the
unsatisfied condition is a failure by Purchaser to deliver funds required to close on the Closing
Date. If such matter remains unsatisfied or the default remains uncured after the expiration of
such ten (10) Business Day period, then this Agreement shall terminate at the close of business
on such tenth (10d') Business Day (or second (2nd) Business Day if the unsatisfied condition is a
failure by Purchaser to deliver funds required to close on the Closing Date). In the event of
termination of this Agreement (and by operation of law the Escrow) pursuant to this Section 5,
then: (x) as set forth in the liquidated damages provision of Section 3(b)(2) above, all rights and
liabilities of the Purchaser and the Seller with respect to this Agreement shall immediately
terminate, except those which specifically survive such termination; (y) Escrow Agent deliver
the Deposit to the Seller and shall return to the Seller all funds or other things deposited in
Escrow by the Seller; and (z) Escrow Agent shall return to the Purchaser all funds or other things
deposited in Escrow by the Purchaser, less the Deposit. Provided, however, all fees and costs
charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Purchaser. Notwithstanding clause (x) of this Section 5, in the event of termination of this
Agreement pursuant to this Section 5, the Purchaser and the Seller shall cooperate with one
another, execute all documents reasonably necessary and take all reasonable steps as may be
required by Escrow Agent in order to accomplish the purposes of this Section 5.
(a) Purchaser making the Deposit into Escrow, as set forth in Section 3(b)(1), above.
(b) The delivery by the Purchaser into Escrow at least one (1) Business Day prior to
Closing of Immediately Available Funds in the amount required by Section 3(c), above.
(c) The delivery by the Purchaser into Escrow of all other documents and instruments
required by this Agreement or reasonably required by Seller and/or Escrow Agent to complete
the Closing, at least one (1) Business Day prior to Closing.
(d) Purchaser not being in default of any of its representations or warranties under
this Agreement, or any other material terms or conditions related to Purchaser.
(e) As of the Closing Date, the Purchaser has not made an assignment for the benefit
of creditors, filed a bankruptcy petition, been adjudicated insolvent or bankrupt, petitioned a
court for the appointment of any receiver of, or trustee for, the Purchaser, or commenced any
proceeding relating to the Purchaser under any reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or later in effect.
(f) This Agreement has been formally approved by resolution of the City of National
City.
6. Conditions Precedent for the Benefit of the Purchaser. The Purchaser's obligation to
Close shall be conditioned upon the satisfaction or emailed or written waiver by the Purchaser of
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all of the conditions precedent ("Conditions Precedent for the Benefit of the Purchaser") set forth
in this Section 6. Any of the Conditions Precedent for the Benefit of the Purchaser may be
waived by the Purchaser unilaterally; and if so waived, such conditions shall be of no further
effect hereunder. Any such waiver shall be effective only if the same is expressly waived (i) by
email from the Purchaser to the Seller and Escrow Agent; or (ii) in a writing signed by the
Purchaser and delivered to the Seller and Escrow Agent. If the Conditions Precedent for the
Benefit of the Purchaser are not satisfied by the deadlines set forth in this Section 6 or expressly
waived, the Purchaser (provided the Purchaser is not in default hereunder) may provide emailed
or written notice of the Purchaser's conditional termination of this Agreement to the Seller and
Escrow Agent. After receipt of such notice of conditional termination, the Seller shall have ten
(10) Business Days to cure any non -satisfaction of a condition or other default specified in the
notice of conditional termination. If such matter remains unsatisfied or the default remains
uncured after the expiration of such ten (10) Business Day period, then this Agreement shall
terminate at the close of business on such tenth (10th) Business Day. In the event of termination
of this Agreement (and by operation of law the Escrow) pursuant to this Section 6, then: (x)
except to subparagraph (f) below, the same shall be a default by the Seller (y) Escrow Agent
shall return to the Purchaser all funds or other things deposited in Escrow by the Purchaser,
including without limitation, the Deposit; and (z) Escrow Agent shall return to the Seller all
funds or other things deposited in Escrow by the Seller. Purchaser is not waiving any default by
the Seller and nothing contained in this Section 6, including, without limitation, the immediately
foregoing sentence shall be a waiver of any right of Purchaser to recover damages from the
Seller for failure of any Conditions Precedent for the Benefit of the Purchaser. Provided,
however, all fees and costs charged by the Escrow Agent shall be paid one-half (1/2) by the
Seller and one-half (1/2) by the Purchaser.
(a) The deposit into Escrow by the Seller of the Grant Deed, duly executed and
acknowledged, conveying fee simple title to the Property to the Purchaser at least one (1)
Business Day prior to Closing.
(b) The deposit by the Seller into Escrow of a duly executed affidavit that it is not a
foreign person and is a "United States Person" as such term is defined in Section 7761(a)(30) of
the Internal Revenue Code of 1986, as amended, at least one (1) Business Days prior to Closing.
The affidavit shall be in the form prescribed by federal regulations, if any.
(c) The deposit by the Seller into Escrow of a duly executed California Form 593(c)
or other evidence that withholding of any portion of the Purchase Price is not required by the
Revenue and Taxation Code of California, at least one (1) Business Day prior to Closing.
(d) The deposit by the Seller into Escrow of all additional documents and instruments
as are reasonably required by the Purchaser and/or Escrow Agent to complete the Closing, at
least one (1) Business Day prior to Closing.
(e) The Escrow Agent is prepared and obligated to issue the Title Policy in
Purchaser's favor upon the recordation of the Grant Deed and there are no exceptions to the Title
Policy, except for Permitted Exceptions.
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(f) Seller not being in default of any of its representations or warranties under this
Agreement, or any other material terms or conditions related to Seller.
(g) As of the Closing Date, there exists no lease, tenancy or occupancy agreement
affecting the Property, except for the lease of the property from the Purchaser back to the Seller,
as described in Section 1(b), above.
(h) As of the Closing Date there is not pending, or threatened to be pending, any
action or proceeding by any person or before any government authority, the outcome of which
could prohibit the use of the Property as intended by the Purchaser.
(i) This Agreement has been formally approved by resolution of the Community
Development Commission -Housing Authority of the City of National City.
7. Representations and Warranties; Waivers and Releases. When making the
representations and warranties set forth in this Section 7, each party making a representation
and/or warranty represents that the same are true, correct and complete as of the date hereof and
shall be and are true, correct and complete as of the Closing Date. The representations and
warranties shall survive the Closing.
(a) Representations and Warranties Regarding Authority. The Seller and the
Purchaser each hereby represents and warrants to the other that this Agreement and all
documents or instruments executed by them which are to be delivered at or prior to the Closing
are, or on the Closing Date will be, duly authorized, executed and delivered by the Seller or the
Purchaser, as applicable.
(b) Representations and Warranties Regarding Enforceability of Agreement. The
Seller and the Purchaser each hereby represents and warrants to the other that this Agreement
and all documents required hereby to be executed by them shall be valid, legally binding
obligations of, and enforceable against, the Seller or the Purchaser, as applicable, in accordance
with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally and general principles of equity
(whether enforcement is sought in equity or at law).
(c) Seller Representations and Warranties Pertaining to Legal Matters. The Seller
hereby represents and warrants to the Purchaser that:
(1) As of the Effective Date and the Closing Date, the Seller is the sole owner
of the fee title interest to the Property.
(2) There is no pending or threatened proceeding in eminent domain or
otherwise, which would affect the Property, or any portions thereof, nor any facts which
might give rise to such action or proceeding.
11
(d) Seller Representations and Warranties Pertaining to Options. The Seller hereby
represents and warrants to the Purchaser that no person has any option or right of first refusal to
purchase the Property or any parts thereof
(e) Material Adverse Changes. If Seller receives any notice or knowledge of
anything materially adversely affecting Seller's representations or warranties after the date of
this Agreement, then Seller shall immediately notify Purchaser in writing of such fact or
circumstance. If Purchaser receives written notice from Seller pursuant to the immediately
preceding sentence, and Seller in such notice does not agree to cure the same at or prior to
Closing to Purchaser's reasonable satisfaction, then, Purchaser shall have the right to bring an
action against Seller on the breach of such representation or warranty.
(f) Seller Representation and Warranty Pertaining to Tenants. The Seller hereby
represents and warrants to the Purchaser that no person has any lease or other right to occupy the
Property or any parts thereof, except for the Seller's right to lease the Property from the Seller as
described in Section 1(b), above.
(g) Seller Representation and Warranty Regarding Operation of the Property. The
Seller hereby represents and warrants to the Purchaser that there are no oral or written
agreements or understandings concerning the Property by which the Purchaser would be hound
following the Closing.
(h) AS IS CONDITION. PURCHASER HEREBY ACKNOWLEDGES,
REPRESENTS, WARRANTS, COVENANTS AND AGREES THAT AS A MATERIAL
INDUCEMENT TO SELLER TO EXECUTE AND ACCEPT THIS AGREEMENT AND IN
CONSIDERATION OF THE PERFORMANCE BY SELLER OF ITS DUTIES AND
OBLIGATIONS UNDER THIS AGREEMENT THAT, EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER'S EXPRESS
REPRESENTATIONS AND WARRANTIES SET FORTH 1N SECTION 7 OF THIS
AGREEMENT, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE
ON AN "AS IS, WHERE IS" BASIS, SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR
OTHERWISE, OF, AS TO, CONCERNING OR WITH RESPECT TO: (1) THE EXISTENCE
OF HAZARDOUS MATERIALS OR MOLD UPON THE PROPERTY OR ANY PORTION
THEREOF; (2) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND
WATER RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF WATER
AND FAULTING; (3) WHETHER OR NOT AND TO THE EXTENT TO WHICH THE
PROPERTY OR ANY PORTION THEREOF 1S AFFECTED BY ANY STREAM (SURFACE
OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN,
FLOODWAY OR SPECIAL FLOOD HAZARD; (4) DRAINAGE; (5) 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; (6) USES OF ADJOINING
12
PROPERTIES; (7) THE VALUE, COMPLIANCE WITH THE PLANS AND
SPECIFICATIONS, SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTION,
DURABILITY, STRUCTURAL INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR
FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY
RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR
ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, WHETHER OR NOT THE
IMPROVEMENTS COMPLY WITH THE REQUIREMENTS OF TITLE III OF THE
AMERICANS WITH DISABILITIES ACT OF 1990, 42 U.S.C. §§ 12181-12183, 12186(B) —
12189 AND RELATED REGULATIONS; (8) THE PRESENCE OF HAZARDOUS
MATERIALS IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY; (9) THE
SQUARE FOOTAGE OF THE PROPERTY OR THE IMPROVEMENTS THEREON; (10)
IMPROVEMENTS AND INFRASTRUCTURE, INCLUDING, WITHOUT LIMITATION,
THE CONDITION OF THE ROOF, FOUNDATION, FIXTURES, AND PERSONAL
PROPERTY, IF ANY; (11) DEVELOPMENT RIGHTS AND EXTRACTIONS; (12) WATER
OR WATER RIGHTS; (13) THE DEVELOPMENT POTENTIAL FOR THE PROPERTY; (14)
THE ABILITY OF PURCHASER TO REZONE THE PROPERTY OR CHANGE THE USE
OF THE PROPERTY; (15) THE ABILITY OF PURCHASER TO ACQUIRE ADJACENT
PROPERTIES; (16) THE EXISTENCE AND POSSIBLE LOCATION OF ANY
UNDERGROUND UTILITIES; (17) THE EXISTENCE AND POSSIBLE LOCATION OF
ANY ENCROACHMENTS; (18) WHETHER THE IMPROVEMENTS ON THE PROPERTY
WERE BUILT, IN WHOLE OR 1N PART, IN COMPLIANCE WITH APPLICABLE
BUILDING CODES; (19) THE STATUS OF ANY LIFE -SAFETY SYSTEMS IN THE
IMPROVEMENTS ON THE PROPERTY; (20) THE CHARACTER OF THE
NEIGHBORHOOD IN WHICH THE PROPERTY IS SITUATED; (21) 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; (22) THE MERCHANTABILITY OF THE PROPERTY OR
FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (PURCHASER
AFFIRMING THAT PURCHASER HAS NOT RELIED ON SELLER'S SKILL OR
JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR
PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT
FOR ANY PARTICULAR PURPOSE); AND/OR (23) ANY OTHER MATTER
CONCERNING THE PROPERTY. NOTWITHSTANDING THE FOREGOING OR
ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, SELLER IS NOT
RELEASED FROM ANY LIABILITY TO PURCHASER FOR FRAUD OR BREACH OF
ANY COVENANT, REPRESENTATION OR WARRANTY SET FORTH IN THIS
AGREEMENT. Notwithstanding anything to the contrary set forth in this Agreement, including
without limitation, this Section 7(h), any right waived by Purchaser and any release by
Purchaser, shall only release or waive the Purchaser's right to enforce any judgment (including
without limitation, damages, attorneys' fees, costs, expenses or any other compensation of any
type whatsoever) personally against only the Seller and Seller's successors, assigns, officers,
directors, shareholders, participants, partners, affiliates, employees, representatives, invitees and
agents (collectively, the "Seller Parties") or any of them. Purchaser is not waiving any right to
bring any action against any of the "Non -Released Parties" (defined below) or waiving recovery
against or otherwise releasing or agreeing to forego Purchaser's rights with respect to any
13
insurance policy, or any other person (other than the right to enforce a judgment personally
against any of the Seller Parties), including without limitation persons obligated to the Seller
Parties, by right of subrogation or otherwise, prior owners or occupants of the Property, the
tenants, persons performing work at the Property and/or any insurance policies held by any or all
such persons (collectively, the "Non -Released Parties").
PURCHASER ACKNOWLEDGES THAT PURCHASER SHALL HAS COMPLETED
ALL PHYSICAL AND FINANCIAL EXAMINATIONS RELATING TO THE ACQUISITION
OF THE PROPERTY HEREUNDER (IT BEING ACKNOWLEDGED AND AGREED THAT
PURCHASER SHALL BE DEEMED TO HAVE INSPECTED THE PROPERTY) AND WILL
ACQUIRE THE SAME SOLELY ON THE BASIS OF SUCH EXAMINATIONS AND THE
TITLE INSURANCE PROTECTION FOR THE PROPERTY AFFORDED BY THE TITLE
POLICY, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT AND
SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN SECTION 7 OF THIS AGREEMENT. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE
PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY
OF SOURCES AND THAT THE SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO
REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT AND
SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN SECTION 7 OF THIS AGREEMENT. SELLER SHALL NOT BE LIABLE FOR
ANY NEGLIGENT MISREPRESENTATION OR FAILURE TO INVESTIGATE THE
PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR
WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL
ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE
PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER, OR ANY REAL
ESTATE BROKER, AGENT, REPRESENTATIVE, EMPLOYEE, SERVANT OR OTHER
PERSON ACTING ON SELLER'S BEHALF EXCEPT FOR REPRESENTATIONS AND
WARRANTIES EXPRESSLY PROVIDED IN SECTION 7 OF THIS AGREEMENT. IT IS
ACKNOWLEDGED AND AGREED THAT THE PROPERTY IS SOLD BY SELLER AND
PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. NOTWITHSTANDING
THE FOREGOING OR ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT, SELLER IS NOT RELEASED FROM ANY LIABILITY TO PURCHASER
FOR FRAUD OR BREACH OF ANY COVENANT, REPRESENTATION OR WARRANTY
SET FORTH IN THIS AGREEMENT.
PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT PURCHASER IS
FULLY AWARE OF THE AGE OF THE PROPERTY, THAT OVER TIME VARIOUS
EVENTS MAY HAVE OCCURRED ON THE PROPERTY WHICH EVENTS MAY BE
TYPICAL AND(OR) ATYPICAL OF EVENTS OCCURRING TO OTHER PROPERTIES OF
SIMILAR AGE TO THE PROPERTY AND SIMILARLY LOCATED IN THE CITY OF
NATIONAL CITY AND (OR) THE COUNTY OF SAN DIEGO, CALIFORNIA, AND THAT
SUCH EVENTS MAY INCLUDE, WITHOUT LIMITATION, SLAB LEAKS, MOLD, FIRE,
SHIFTING, AND VIOLATIONS OF LAWS, ORDINANCES, RULES, REGULATIONS,
14
PERMITS, APPROVALS, LICENSES AND(OR) ORDERS OF GOVERNMENTAL
AGENCIES WITH JURISDICTION OVER THE PROPERTY.
THE CLOSING OF THE PURCHASE OF THE PROPERTY BY PURCHASER
HEREUNDER SHALL BE CONCLUSIVE EVIDENCE THAT: (A) PURCHASER HAS
FULLY AND COMPLETELY INSPECTED (OR HAS CAUSED TO BE FULLY AND
COMPLETELY INSPECTED) THE PROPERTY; AND (B) PURCHASER ACCEPTS THE
PROPERTY AS BEING IN GOOD AND SATISFACTORY CONDITION AND SUITABLE
FOR PURCHASER'S PURPOSES.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR
RELIANCE ON REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN
SECTION 7 OF THIS AGREEMENT, PURCHASER SHALL PERFORM AND RELY
SOLELY UPON ITS OWN INVESTIGATION CONCERNING ITS INTENDED USE OF THE
PROPERTY, AND THE PROPERTY'S FITNESS THEREFOR. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT SELLER'S COOPERATION WITH PURCHASER
WHETHER BY PROVIDING DOCUMENTS RELATING TO THE PROPERTY OR
PERMITTING INSPECTION OF THE PROPERTY, SHALL NOT BE CONSTRUED AS ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF ANY KIND WITH
RESPECT TO THE PROPERTY, OR WITH RESPECT TO THE ACCURACY,
COMPLETENESS, OR RELEVANCE OF THE DOCUMENTS PROVIDED TO
PURCHASER BY SELLER IN RELATION TO THE PROPERTY, PROVIDED THAT THE
FOREGOING SHALL NOT BE A LIMITATION OR MODIFICATION OF THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED FOR IN SECTION 7
OF THIS AQ EEMENT.
LLER'S INITIALS PCSE'S INITIALS
(i) Indemnity and Release.
(1) Indemnity. For the purposes of this Section 7(i), the term "Claims" shall
mean any and all claims, obligations, liabilities, causes of action, suits, debts, liens, damages,
judgments, losses, demands, orders, penalties, settlements, costs and expenses (including,
without limitation, attorneys' fees and costs and any and all costs and expenses related to,
whether directly or indirectly, any and all clean-up, remediation, investigations, monitoring,
abatement, mitigation measures, fines or removal with respect to Hazardous Materials) of any
kind or nature whatsoever. The definition of "Claims" shall include, without limitation, Claims
under contract law or tort law. Purchaser acknowledges that but for Purchaser's agreement to
each and every provision of this Section 7(i), Seller would not have entered into the Agreement.
Purchaser, on behalf of itself, its successors, assigns and successors -in -interest ("Successors"),
shall indemnify, defend, protect and hold Seller and Seller's successors, assigns, partners,
affiliates and members and all their respective officers, directors, shareholders, participants,
partners, affiliates, employees, representatives, invitees and agents (collectively, "Seller Parties")
harmless from and against any and all Claims resulting from, related to, or based upon, whether
directly or indirectly: (i) the breach by Purchaser of any representation, warranty, covenant or
15
obligation contained in the Agreement, or in any other agreement, document, exhibit or
instrument related hereto or referenced herein; (ii) any Claim or Claims, if the basis of such
Claim or Claims arose on or after the Closing, except as noted in subparagraph (iv) below, and if
the basis of such Claim or Claims arose from, is based upon, relates to or pertains to, whether
directly or indirectly, the operation, management and use of the Property; (iii) any Claim or
Claims which Claim or Claims (or the basis for which) arose from, is based upon, relates to or
pertains to, whether directly or indirectly, any act or omission of Purchaser or any of its
employees, agents or representatives; and (iv) (A) any Claim or Claims that relate to the
condition of the Property on or after the Close of Escrow, including any judgment, order or
settlement under or otherwise pursuant to a lawsuit, and (B) any Claim or Claims that relate to
defects in the Property (including, without limitation, patent and latent construction defects),
regardless of whether said defects or the cause of the same arose either before or after the Close
of Escrow, including any judgment, order or settlement under or otherwise pursuant to the
lawsuit. Any defense of any or all of the Seller Parties referenced in this Section 7(i)(1), shall be
at the Purchaser's sole cost and expense and by counsel selected by the Purchaser, subject to the
reasonable approval of the indemnified person, which counsel may, without limiting the rights of
any of the Seller Parties pursuant to the next succeeding sentence of this Section 7(i)(1), also
represent the Purchaser in such investigation, action or proceeding. If any of the Seller Parties
that is being indemnified determines reasonably and in good faith that its defense by the
Purchaser is reasonably likely to cause a conflict of interest or is being conducted in a manner
which is prejudicial to such persons interests, such indemnified person may elect to conduct its
own defense through counsel of its own choosing, subject to the reasonable approval of the
Purchaser, and at the expense of the Purchaser.
(2) Release and , 1542 Waiver. Notwithstanding the following or anything to
the contrary set forth in this Agreement, the Seller is not released from any liability to the
Purchaser for fraud or breach of any covenant or warranty set forth in this Agreement. Subject to
the immediately preceding sentence and the Purchaser's right to rely on the Seller's express
representations and warranties set forth in Section 7 hereof, Purchaser for itself and on behalf of
each of its successors and/or assigns (collectively, the "Releasors") by this general release of
known and unknown claims (this "Release") hereby irrevocably and unconditionally release and
forever discharge Seller and each of the Seller Parties (collectively, the "Releasees") or any of
them, from and against any and all Claims of any kind or nature whatsoever, WHETHER
KNOWN OR UNKNOWN, suspected or unsuspected, fixed or contingent, liquidated or
unliquidated which any of the Releasors now have, own, hold, or claim to have had, owned, or
held, against any of the Releasees arising from, based upon or related to, whether directly or
indirectly any facts, matters, circumstances, conditions or defects (whether patent or latent) of all
or any kinds, related to, arising from, or based upon, whether directly or indirectly, the Property,
including without limitation, (i) the physical condition, quality and state of repair of the Property
conveyed, (ii) any latent or patent defect affecting the Property conveyed, and (iii) the presence
of Hazardous Materials in, on, about or under the Property or which have migrated from adjacent
lands to the Property or from the Property to adjacent lands.
Except for Claims for Seller's fraud or the breach of any representations and warranties
of the Seller expressly provided for in Section 7 of this Agreement, Releasors hereby further
agree as follows:
16
(i) Releasors acknowledge that there is a risk that subsequent to the execution
of this Agreement, Releasors may discover, incur, or suffer from Claims which were unknown or
unanticipated at the time this Release is executed, including, without limitation, unknown or
unanticipated Claims which, if known by Releasors on the date this Release is being executed,
may have materially affected Releasors' decision to execute this Agreement. Releasors
acknowledge that Releasors are assuming the risk of such unknown and unanticipated Claims
and agree that this Release applies thereto. Releasors expressly waive the benefits of Section
1542 of the California Civil Code, which reads as follows:
"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."
(ii) Releasors represent and warrant that Releasors have been represented by
independent counsel of Releasors' own choosing in connection with the preparation and review
of the Release set forth herein, that Releasors have specifically discussed with such counsel the
meaning and effect of this Release and that Releasors have carefully read and understand the
scope and effect of each provision contained herein. Releasors further represent and warrant that
Releasors do not rely and have not relied upon any representation or statement made by any of
the Releasees or any of their representatives, agents, employees, attorneys or officers with regard
to the subject matter, basis or effect of this Release.
(iii) Releasors represent and warrant to Releasees that Releasors have not and
shall not assign or transfer or purport to assign or transfer any Claim or Claims or any portion
thereof or any interest therein, and shall indemnify, defend, protect and hold the Releasees
harmless from and against any Claim or Claims based on or arising out of, whether directly or
indirectly, any suc signment or transfer, or purported assignment or transfer.
LE INITIALS PI RCASER'S INITIALS
It is specifically intended that each of the Seller Parties shall be third party beneficiaries
of this Section 7(i).
(3) Survival. The provisions of this Section 7(i) shall survive the Closing and,
as applicable, the termination of this Agreement.
(j) Waiver of Subrogation; Survival. Purchaser hereby waives any right of
subrogation as to Seller or the Seller Parties. Each and every provision of this Section 7 shall,
except as may be expressly limited in this Section 7, survive the Closing and, as applicable, the
termination of this Agreement, and, but for Purchaser's agreement to each and every provision of
this Section 7, Seller would not have executed this Agreement.
17
8. Condemnation of the Property.
(a) If between the Effective Date and the Closing Date, any condemnation or eminent
domain proceeding is commenced that will result in the taking of any part of the Property,
Purchaser may, at Purchaser's election, either:
(1) Terminate this Agreement by giving written or emailed notice to the Seller
and the Escrow Agent (in which event all remaining funds or other things deposited in Escrow
by Purchaser, including without limitation, the Deposit, shall be returned to the Purchaser
immediately from Escrow, together with any interest earned thereon and all fees and costs
charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Purchaser; or
(2) Proceed with the Closing with no reduction in the Purchase Price, in
which event the Seller shall assign to the Purchaser all of the Seller's rights, titles and interests to
any award made for the condemnation or eminent domain action.
(b) Notice. If the Seller obtains notice of the commencement of or the threatened
commencement of eminent domain or condemnation proceedings with respect to all of any
portion of the Property, the Seller shall notify the Purchaser in writing.
9. Broker's Commission. The Purchaser and Seller each hereby represents and warrants to
the other that it has not engaged the services of any real estate agent or broker with respect to the
transaction that is the subject of this Agreement. The Purchaser and the Seller each agree that, to
the extent any real estate commission, brokerage commission or finder's fee shall be earned or
claimed in connection with this Agreement or the Closing, the payment of such fee or
commission, and the defense of any action in connection therewith, shall be the sole and
exclusive obligation of the party who requested (or is alleged to have requested) the services of
the broker or finder. In the event that any claim, demand or cause of action for any such
commission or finder's fee is asserted against the party to this Agreement who did not request
such services (or is not alleged to have requested such services), the party through whom the
broker or finder is making the claim shall indemnify, defend (with an attorney of the
indemnitee's choice), protect and hold harmless the other from and against any and all such
claims, demands and causes of action and expenses related thereto, including, without limitation,
attorneys' fees and costs. The provisions of this Section 9 shall survive the Closing or
termination of this Agreement.
10. Assignment. The Purchaser shall not assign any of its rights or delegate any of its duties
under this Agreement without the prior written consent of the Seller, which consent may be
withheld or granted in Seller's sole and absolute discretion; provided, however, the Purchaser
may assign this Agreement to an entity in which the Purchaser has a controlling or majority
interest without the prior written consent of the Seller provided Purchaser and such assignee
execute an assignment agreement in form and substance reasonably acceptable to Seller.
11. Notices. All notices under this Agreement shall be in writing and sent (a) by certified or
registered mail, return receipt requested, in which case notice shall be deemed delivered three (3)
18
Business Days after deposit, postage prepaid in the United States Mail, (b) overnight by a
nationally recognized overnight courier such as UPS Overnight, or FedEx, in which case notice
shall be deemed delivered one (1) Business Day after deposit with that courier, (c) by personal
delivery, in which case notice shall be deemed delivered upon the actual date of delivery, or (d)
by email, in which case notice shall be deemed delivered upon the actual date of delivery. All
notices shall be delivered to the following addresses:
If to Purchaser:
If to Seller:
Copy to:
Community Development Commission -Housing Authority
of the City of National City
Attn: Alfredo Ybarra
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: alfredoy@nationalcityca.gov
City of National City
Attn: Brad Raulston
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: baulston@nationalcityca.gov
Christensen & Spath LLP
Attention: Walter F. Spath III
550 West C Street, Suite 1660
San Diego, CA 92101
Facsimile No. (619) 236-8307
Email: wfs@candslaw.net
The addresses above may be changed by written notice to the other party; provided
however, that no notice of a change of address shall be effective until actual receipt of the notice.
12. Risk of Loss.
(a) Damage or Destruction. Subject to the provisions of this Section 12(a), the risk of
loss or damage to the Property until the close of Escrow will be borne by Seller. Upon the
occurrence of any damage to or destruction of the Property, Seller shall within thirty (30) days
after the occurrence of such damage or destruction give written notice to Purchaser ("Damage
Notice") specifying the estimated cost to repair or restore the Property and an estimate of the
insurance proceeds, if any, that will be available with respect to such damage or destruction. The
close of Escrow shall be appropriately delayed to provide adequate time for Seller to give the
Damage Notice and Purchaser to make its election provided for below.
(b) Damage in Excess of $100,000. If prior to the close of Escrow there is damage to
or destruction of the Property that will cost in excess of One Hundred Thousand Dollars
($100,000) to repair or restore, Purchaser shall have the right by written notice given to Seller
19
within ten (10) days of Purchaser receiving the Damage Notice, to elect to: (i) close Escrow in
such damaged condition, in which event the Purchase Price shall not be reduced (but the Seller
shall be obligated to pay the deductibles under the applicable insurance policy or policies) and
Seller shall not be obligated to repair or restore the Property and all insurance proceeds shall be
assigned and payable to Purchaser, and if Seller receives any such insurance proceeds, they shall
be immediately remitted by Seller to Purchaser at Closing or, if received by Seller after Closing,
promptly after receipt; (ii) terminate this Agreement, in which event the Deposit and all interest
accrued thereon shall be immediately returned to Purchaser, and neither party shall have any
further rights or obligations to the other party, except neither party shall be relieved of any
obligations provided for in this Agreement which expressly survives its termination.
(c) Damage of $100,000 or Less. If prior to the close of Escrow there is damage to or
destruction of the Property that will cost One Hundred Thousand Dollars ($100,000) or less to
repair or restore, Purchaser shall nevertheless close Escrow with the Property in such damaged
condition, the Purchase Price shall not be reduced (but the Seller shall be obligated to pay the
deductibles under the applicable insurance policy or policies) and Seller shall not be obligated to
repair or restore the Property, and all insurance proceeds shall be assigned and payable to
Purchaser, and if Seller should receive any such insurance proceeds, they shall be immediately
remitted to Purchaser.
13. Prorations. Real property taxes and assessments and utility costs, and other expenses of
operating the Property (provided, however, no proration shall be made with regard to any capital
improvements) shall be prorated as of the close of Escrow. Seller shall pay all documentary
transfer taxes. Seller shall pay all real property taxes and assessments applicable to the period
prior to the close of Escrow, and if any such taxes are unpaid after the close of Escrow, then
Seller shall pay them promptly and in any event within ten (10) days after Purchaser's request
(which shall include a copy of the relevant tax bill).
14. General Provisions.
(a) Governing Law. This Agreement shall be interpreted and construed in
accordance with California law, without regard to any choice of law principles.
(b) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
(c) Captions. The captions in this Agreement are inserted for convenience of
reference and in no way define, describe or limit the scope or intent of this Agreement or any of
the provisions of this Agreement.
(d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective legal representatives, successors, heirs and permitted assigns.
20
(e) Modifications; Waiver. No waiver, modification, amendment, discharge or
change of this Agreement shall be valid unless it is in writing and signed by the party against
which the enforcement of the modification, waiver, amendment, discharge or change is sought.
(f) Entire Agreement. This Agreement contains the entire agreement between the
parties relating to Purchaser's acquisition of the Property from the Seller and all prior or
contemporaneous agreements, understandings, representations or statements, oral or written, are
superseded.
(g) Partial Invalidity. Any provision of this Agreement which is unenforceable,
invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of
this Agreement shall have no effect, but all the remaining provisions of this Agreement shall
remain in full effect.
(h) Survival. Provisions of this Section 19 shall survive the Closing or the
termination of this Agreement.
(i) No Third -Party Rights. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties to this Agreement and their respective
successors and assigns, any rights or remedies.
(j) Time of Essence. Time is of the essence in this Agreement.
(k) Attorneys' Fees. The parties agree that the prevailing party in litigation for the
breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled
to their expert witness fees, if any, as part of their costs of suit, and attorneys' fees as may be
awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5
and any other applicable provisions of California law, including, without limitation, the
provisions of CCP Section 998. All claims, disputes, causes of action or controversies shall be
subject solely to the jurisdiction of the San Diego Superior Court, Downtown Branch.
(1) Relationship. Nothing contained in this Agreement shall be deemed or construed
by the parties or by any third person to create a relationship of principal and agent or partnership
or a joint venture between the Purchaser and the Seller or between any of them and any third
party.
(m) Recording. Neither this Agreement nor a memorandum hereof shall be recorded.
(n) Purchaser Approval. Where this Agreement refers to an action or approval of the
Purchaser, it shall mean the approval of the Community Development Executive Director of the
Purchaser, or designee, unless otherwise provided. Where this Agreement refers to an action or
approval of the Seller, it shall mean the approval of the City Manager, or designee, unless
otherwise provided.
(o) Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are
hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits
21
are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated
in this Agreement by this reference.
(p) Independent Counsel. Seller and Purchaser each acknowledge that: (a) they have
been given the opportunity to be represented by independent counsel in connection with this
Agreement; (b) they have executed this Agreement with the advice of such counsel, if such
counsel was retained; and (c) this Agreement is the result of negotiations between the parties
hereto and the advice and assistance of their respective counsel, if such counsel was retained.
The fact that this Agreement was prepared or negotiated by Purchaser's or Seller's counsel as a
matter of convenience shall have no import or significance. Any uncertainty or ambiguity in this
Agreement shall not be construed against either party due to the fact that Purchaser's or Seller's
counsel prepared or negotiated this Agreement in its final form.
(q) Tolling of Deadlines. Any periods of time, deadlines or time or day limitations
set forth in this Agreement, the deadline for Closing, the deadline for making the Deposit, shall
all be automatically extended by one (1) Business Day for each Business Day that the Seller fails
to timely provide any notice, report, materials, studies, documentation or other information
required by this Agreement.
(r) Capacity and Authority. All individuals signing this Agreement for a party which
is a corporation, limited liability company, partnership or other legal entity, or signing under a
power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, represent
and warrant that they have the necessary capacity and authority to act for, sign and bind the
respective entity or principal on whose behalf they are signing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
PURCHASER:
Community D -lopment Commission -Housing Authority of the City of National City
Bv:
orrison, Chairma
Ap u r i Led as to Form:
By:
C s'dia G. ua Silva
General C 1
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
22
SELLER:
City of National City
By:
Ro orrison, Mayor
Approved as to Form:
By:
C1 Zi7i'a GacIva
City Attome
23
EXHIBIT "A-1"
PARCEL 1 LEGAL DESCRIPTION
Real property in the City of National City, County of San Diego, State of California, described as
follows:
Lots 1 to 22 inclusive of Block 107; and Lots 1 to 22 inclusive of Block 108 of National City, in
the City of National City, County of San Diego, State of California according to map thereof no.
348 filed in the Office of the County Recorder of San Diego County October 2, 1882;
Together with that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 St
Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of
Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April
8, 1963 as file no. 59590 of Official Records;
And those portions of the Unnamed Alley lying within Blocks 107 and 108 of said map no. 348
as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City
of National City) recorded May 12, 1969 as file no. 82961 of Official Records
24
Exhibit "A-1"
PARCEL 1 LEGAL DESCRIPTION
Real property in the City of National City, County of San Diego, State of California, described as
follows:
Parcel 2:
Lots 7 to 16 inclusive of Block 85 of National City, in the City of National City, County of San
Diego, State of California according to map thereof no. 348 filed in the Office of the County
Recorder of San Diego County October 2, 1882, excepting therefrom that portion of land as set
forth in that certain Corporation Grant Deed recorded November 20, 1964 as file no. 211364 of
Official Records.
In addition, that portion of Coolidge Avenue between 20th Street and 22 Street, and 21 st Street
between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation
(Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as
file no. 59590 of Official Records;
And those portions of the Unnamed Alley lying within Block 85 of said map no. 348 as set forth
in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National
City) recorded May 12, 1969 as file no. 82961 of Official Records.
Parcel 3:
Lots 1 to 22 inclusive of Block 86 of National City, in the City of National City, County of San
Diego, State of California according to map thereof no. 348 filed in the Office of the County
Recorder of San Diego County October 2, 1882.
In addition, that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 st
Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of
Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April
8, 1963 as file no. 59590 of Official Records;
And the Unnamed Alley lying within Block 86 of said map no. 348 as set forth in the certain
Order of Vacation (Resolution No. 9816 of the City Council of the City of National City)
recorded May 12, 1969 as file no. 82961 of Official Records
25
Exhibit "B"
GRANT DEED
26
Exhibit "C"
LEASE
27
JOINT ESCROW INSTRUCTIONS
(Westside TOD Affordable Site, National City, 91950)
August 22, 2013
TO: Carla Burchard
Julie Albers
Stewart Title Commercial Escrow Team
5740 Fleet Street, Suite 100
Carlsbad, CA 92008
Your Order No. 01180-50484
1. Opening of Escrow. The Community Development Commission -Housing Authority of the
City of National City ("Purchaser") and City of National City ("Seller") have opened the above -
referenced escrow ("Escrow") with you ("Escrow Agent") and hereby authorize and instruct Escrow
Agent as set forth herein, with respect to that certain real property ("Property") described in
Preliminary Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No.
01180-50484. In the event any date, deadline or due date set forth in these Joint Escrow Instructions
or the Purchase and Sale Agreement, as defined below, falls on a day that is not a "business day,"
then such deadline or due date shall automatically be extended to the next business day. Any
capitalized term that is not defined in these Joint Escrow Instructions shall have the meaning set
forth in the Purchase and Sale Agreement. In the event of a conflict between any term or provision
of the Purchase and Sale Agreement and any term or provision of these Joint Escrow Instructions, the
term or provision of these Joint Escrow Instructions shall control.
2. Deposit of Documents.
(a) Deliveries Now. Enclosed herewith is a copy of the fully -executed Purchase and Sale
Agreement dated as of August 20, 2013 ("Purchase and Sale Agreement"), between the Seller and
Purchaser.
(b) Deliveries Prior to Closing. In the event all conditions to Closing are satisfied, then
not less than one (1) business day prior to Closing, the Seller and Purchaser shall deliver to Escrow
Agent, the fully -executed, original grant deed conveying the Property in fee simple from Seller to the
Purchaser.
3. Deposit and Funding. The total aggregate purchase price to be paid by the Purchaser for all
of the Property is Seven Million Thirty -Five Thousand and No/100 Dollars (S7,035,000.00)
("Purchase Price"). The Purchase Price shall be payable by Purchaser, as set forth in this Section 3.
(a) Concurrently with the delivery of these Joint Escrow Instructions to you, the
Purchaser is depositing into Escrow the amount of One Thousand and No/100 Dollars ($1,000.00)
("Deposit"), which amount is being used to pay a portion of the purchase price for Parcel 1 only.
1
(b) In the event all conditions to Closing set forth in Sections 5 and 6 of the Purchase and
Sale Agreement are satisfied, then not less than one (1) business day prior to the Closing Date, the
Purchaser shall cause Two Million Ninety -Three Thousand and No/100 Dollars ($2,093,000.00) to
be wired to the Escrow Agent, which amount is being used to pay a portion of the purchase price for
Parcel 1 only. The remainder of the Purchase Price is being paid with an unsecured seller carry -back
promissory note, which is being handled outside of Escrow.
4. Conditions to Closing. Escrow Agent may close the Escrow as set forth in Section 6 of these
Joint Escrow Instructions, when, and only when all conditions to Closing set forth in Sections 5 and
6 of the Purchase and Sale Agreement are satisfied, and:
(a) Escrow Agent has delivered to the Seller and Purchaser true and complete copies of
all of the escrow instructions that Escrow Agent has received all other parties to the above -referenced
escrow, including any amendments or supplemental instructions, and any assignments or demands
that have been deposited with or delivered to Escrow Agent in connection with the escrow.
(b) Escrow Agent is prepared and obligated to issue in Purchaser's favor, upon the
recordation of the Grant Deed, a standard form ALTA Owner's Policy of Title Insurance with
liability equal to the amount of the Purchase Price ($7,035,000.00) showing title to the Property
vested in the Purchaser, subject and subordinate only to the (i) the printed exceptions and exclusions
in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary Report
dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180-50484; (iii)
real property taxes and assessments which are a lien but not yet payable; and (iv) all applicable
building, zoning and use restrictions and/or regulations of any municipality, township, county or
state.
5. Prorations and Apportionments.
(a) No Prorations. Escrow Agent shall not make any prorations with respect to the
Property.
(b) Title Insurance and Related Costs. Escrow Agent shall provide the ALTA Owner's
Policy of Title Insurance described in Section 4(b), above, to the Purchaser. The Seller shall pay the
cost of the ALTA Owner's Policy of Title Insurance.
(c) Payment of Taxes. The Seller shall pay all taxes, including, but not limited to, sales
tax or transfer tax imposed upon the conveyance of the Property to Purchaser, if any. Purchaser and
Seller anticipate that no documentary or other local transfer tax will be imposed upon the sale of the
Property to Purchaser, because such a sale to Purchaser is exempt from transfer tax, however,
Purchaser makes no representation to Seller that such exemption will be obtained. Purchaser shall
use its best efforts to assist Seller in achieving that result. If there is a transfer tax, the Seller shall
pay the same.
(d) Escrow Fees and Costs Paid by Seller. All Escrow fees and costs charged by the
Escrow Agent for escrow services shall be paid by the Seller.
2
(e) Legal and Related Fees. Each party shall pay its own legal fees.
6. Procedure for Closing. Once all of the conditions set forth in Section 4, above, have been
satisfied, Escrow Agent shall close the Escrow as set forth in this Section 6, by:
(a) Recording the Grant Deed.
(b) Issuing the ALTA Owner's Policy of Title Insurance described in Section 4(b), above,
to the Purchaser.
(c) Disbursing to the Seller the cash portion of the Purchase Price ($2,094,000.00), less
any applicable fees and costs.
(d) Preparing and delivering to the Seller and the Purchaser signed copies of all Escrow
Agent's closing statements showing all receipts and disbursements of the Escrow.
7. Delivery of instruments and Documents.
(a) To Seller. All instruments and documents that are to be delivered by Escrow Agent to
the Seller shall be personally delivered or mailed to the Seller at:
c/o Christensen & Spath LLP
550 West C Street, Suite 1660
San Diego, CA 92101
Attn.: Walter F. Spath III
(b) To Purchaser. All instruments and documents that are to be delivered by Escrow
Agent to Purchaser shall be personally delivered or mailed to Purchaser at:
c/o Christensen & Spath LLP
550 West C Street, Suite 1660
San Diego, CA 92101
Attn.: Walter F. Spath III
8. Sole Instructions; Amendment. These Joint Escrow Instructions constitute the complete and
only escrow instructions of the Seller and the Purchaser and shall revoke and supersede any prior oral
or written instructions Escrow Agent may have received from the Seller or the Purchaser. The Seller
and the Purchaser may revoke, cancel, waive, amend, supplement or permit deviations from, any
term or condition of these Joint Escrow Instructions in writing or by email, provided that the Seller
and the Purchaser consent to the same. Any purported oral revocation, cancellation, waiver,
amendment, supplement or deviation of these Joint Escrow Instructions, shall be ineffective and
invalid.
3
SELLER:
City of National City
By:
Ro Morrison, yor
Approved as to Form:
By:
Claud : Gacitu.: ilva
City Attorney
PURCHASER:
Community Development Commission -Housing Authority of the City of National City
Bv:
on Morrison, Chairman
Approved as to Form:
By:
citua Silva
General ' nsel
4
PROMISSORY NOTE
(Westside TOD Affordable Site)
("Note")
National City, California August 30 , 2013
1. Principal; No Interest. For value received and in consideration of the Purchase and Sale
Agreement (Westside TOD Affordable Site) dated as of August 20, 2013 ("Agreement"), by and
between the City of National City ("Seller") and Community Development Commission -
Housing Authority of the City of National City ("Maker"), Maker promises to pay to Seller, or
order, at 1243 National City Boulevard, National City, California 91950-4397, or such other
place as the holder may from time to time designate by written notice to Maker, the principal
sum of Four Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00).
This Note shall not bear interest. The principal amount of this Note represents the remaining
balance of the purchase price for Maker's purchase of Parcel 1 (as defined in the Agreement)
from Seller and the full purchase price for Maker's purchase of Parcel 2 (as defined in the
Agreement) from Seller, pursuant to the Agreement. All capitalized terms which are not defined
herein shall have the meaning ascribed to them in the Agreement.
2. Term of Loan, Due Date and Right of Prepayment. Payments shall be due and payable as
follows:
(a) The Maker intends to ground lease Parcel 1 and Parcel 2, as such terms are
defined in the Agreement, and make one or more residual receipts loans to the developers of
Parcel 1 and Parcel 2, for the development of a 201 unit affordable housing project pursuant to
that certain Disposition and Development Agreement ("DDA") entered into June 21, 2011 by
and between Paradise Creek Housing Partners, L.P. and the Community Development
Commission of the City of National City in its capacity as the Redevelopment Agency of the
City of National City. Those ground leases may or may not require annual ground rent payments
to be made to the Maker. Those residual receipts loans will require the developers of Parcel 1
and Parcel 2 to make annual payments to the Maker based on the residual receipts generated by
the operations on Parcel 1 and Parcel 2, if any. The Maker shall pay to the Seller an amount
equal to the amount received from the developers of Parcel 1 and Parcel 2 (whether from ground
rent or residual receipts payments) within ten (10) business days of Maker's receipt of the same.
The Maker shall have no obligation to make any payments to Seller hereunder, unless and until
the Maker receives funds from the developers of Parcel 1 and Parcel 2, except that as set forth in
Section 2(b), below.
(b) Notwithstanding the provisions of Section 2(a), above, if all amounts otherwise
payable hereunder are not paid in full within sixty-five (65) years from the date first set forth
above, all principal shall be due and payable.
(c) This Note shall be payable in full upon acceleration of this Note pursuant to the
provisions of Paragraph 4 of this Note.
1
(d) This Note shall be payable in full upon the conveyance of all or any part of the fee
interest in Parcel 1 or Parcel 2.
(e) This Note may be prepaid in whole or in part at any time and, from time to time,
without notice or penalty. Any prepayment shall be allocated first to unpaid interest, if any, and
then to principal.
3. Unsecured Note. This Note shall be unsecured.
4. Acceleration Upon Default. Notwithstanding Section 2, above, or anything contained
herein to the contrary, in the event of: (i) any default in the performance of any of the terms,
covenants and conditions contained in this Note or the Agreement, in each case after the
expiration of applicable cure periods, or (ii) in the event of the filing of a bankruptcy proceeding
by or against Maker which is not dismissed within ninety (90) days thereafter, then all sums
owing by Maker to the Seller shall at the option of the Seller immediately become due and
payable. These remedies shall be in addition to any and all other rights and remedies available to
the Seller, either at law or in equity.
5. Costs Paid by Maker. Maker agrees to pay the following costs and expenses incurred by
the holder of this Note, or adjudged by a court: (a) reasonable costs, expenses and attorneys' fees
paid or incurred in connection with the collection or enforcement of this Note, whether or not
suit is filed; and (b) costs of suit and such sum as the court may adjudge as reasonable attorneys'
fees in any action to enforce payment of this Note or any part of it.
6. Payment and Interest Calculation. Payments shall be applied to interest first, if any, and
then to any unpaid principal balance.
7. Recourse Note. In any action brought to enforce the obligations of Maker under this
Note, the judgment or decree shall be enforceable against Maker.
8. Late Charge. If any installment due hereunder is not paid within fifteen (15) days from
the date due, Maker promises to pay a "late charge" of $100.00 to defray the expense incident to
handling any such delinquent payment or payments.
9. Severability. If any provision of this Note is determined to be void by court of competent
jurisdiction, such determination shall not affect any other provisions of this Note, and such other
provisions shall remain in full force and effect.
10. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall
constitute a waiver by the holder of its right to subsequently demand such performance or to
exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of
any of the Seller's rights and remedies hereunder must be in a writing signed by the Seller.
Further waiver by the Seller of any right hereunder shall not constitute a waiver of any other
right, including but not limited to the right to exercise any and all remedies for a different or
subsequent event of default.
2
Maker:
Community Development Commission -Housing Authority of the City of National City
By:
Ro orrison, Chairman
Approv.a as to Form:
By:
C
General el
Silva
3
--- Revised ---
RESOLUTION NO. 2013 — 18
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING
AUTHORITY OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO
EXECUTE A PURCHASE AND SALE AGREEMENT WITH THE CITY OF NATIONAL CITY
FOR THE PURCHASE OF TWO PARCELS TOTALING 6.299 ACRES, GENERALLY
BOUNDED BY 19TH STREET, HARDING AVENUE, 22ND STREET, AND HOOVER AVENUE,
IN THE CITY OF NATIONAL CITY FOR THE DEVELOPMENT OF 201 AFFORDABLE
HOUSING UNITS AS PHASE I AND II OF THE WESTSIDE INFILL TRANSIT ORIENTED
DEVELOPMENT PROJECT, ACCEPTING A HOME ALLOCATION OF $2,095,492 FROM THE
CITY OF NATIONAL CITY, AUTHORIZING THE USE OF THE HOME ALLOCATION FOR THE
PARTIAL PAYMENT OF THE PROPERTY PURCHASE, AUTHORIZING THE EXECUTIVE
DIRECTOR OR DESIGNEE TO EXECUTE A PROMISSORY NOTE FOR $4,941,000
PAYABLE TO THE CITY OF NATIONAL CITY TO COMPLETE SAID PURCHASE, AND
APPROVING A MONTH -TO -MONTH LEASEBACK TO THE CITY OF NATIONAL CITY OF
SAID PROPERTY
WHEREAS, the City is the owner of that certain real property (the "Property") in the
City of National City, State of California consisting of two legal parcels ("Parcel 1 and Parcel 2")
totaling 6.299 acres, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover
Avenue; and
WHEREAS, the Successor Agency to the Community Development Commission
as the National City Redevelopment Agency (Successor Agency) is subject to the enforceable
obligation commonly referred to as the Westside Infill Transit Oriented Development (WI-TOD)
Development and Disposition Agreement (DDA), entered into June 21, 2011 with Paradise Creek
Housing Partners, LP (Developer); and
WHEREAS, the DDA requires the Property to be acquired for and developed into a
201 unit affordable housing project (the Project), as described in the DDA; and
WHEREAS, the purchase of Parcel 1 and Parcel 2 is being undertaken pursuant to
the requirements of the DDA, as an enforceable obligation of the SA; and
WHEREAS, in accordance with California Health and Safety Code section 34176,
the CDC -HA has accepted the affordable housing functions of the former redevelopment agency
pursuant to resolution number 2012-01; and
WHEREAS, the value of the consideration for the Property, pursuant to proposed
Purchase and Sale Agreement (Agreement) will not be less than the appraised value; and
WHEREAS, appraisals completed within the last 60 days indicate a value of $3.815
million for Parcel I and $3.22 million for Parcel 2, for a total appraised value of the Property of
$7,035,000; and
WHEREAS, the CDC -HA will use $2,095,492 in HOME funds to acquire Parcel I
and the CDC -HA has requested a loan in the amount of $4,941,000 from the City in order to
provide full consideration for the remaining balance of the appraised value of Parcel 1 in the
amount of $1,721,000, and the full appraised value of Parcel 2 in the amount of $3,220,000; and
WHEREAS, the CDC -HA would repay the loan with ground lease income and loan
repayments made by the developer of the Project; and
--- Revised ---
Resolution No. 2013 — 18
Page Two
WHEREAS, the Property will continue to be temporarily occupied by City Public
Works and the CDC -HA will provide a month -to -month lease agreement for $1.00 per month until
the operation is relocated to another site; and
WHEREAS, the sale of the Property pursuant to the proposed Agreement will
improve the quality of life of the residents of National City and its visitors through the elimination
of blight and the development of a quality Project in the area by providing for the reuse and
redevelopment of a brownfield site; and
WHEREAS, all actions required by all applicable law with respect to the
proposed Agreement have been taken in an appropriate and timely manner; and
WHEREAS, the CDC -HA has duly considered all terms and conditions of the
proposed Agreement and believes that the purchase of the Property, the allocation and
expenditure HOME funds, the loan, and the month to month lease, are all in the best interests
of the CDC -HA and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of applicable state and local law requirements.
NOW, THEREFORE, BE IT RESOLVED that the CDC -HA accepts a HOME Grant
from the City of National City to be used for the acquisition and development of Parcel 1 of the
Property and authorizes the Executive Director or her designee to execute any grant related
documents.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the Chairman to
execute the Purchase and Sale Agreement between the City of National City and the Community
Development Commission -Housing Authority of the City of National City for the purchase of 6.299
acres of land for a total purchase price of $7,035,000. Said Purchase and Sale Agreement is on
file with the City Clerk.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the partial payment of
the purchase price from the use of HOME Grant funds in the amount of $2,095,492.
BE IT FURTHER RESOLVED that the CDC -HA authorizes its Executive Director or
her designee to execute any and all loan documents, including a promissory note, necessary for
an unsecured loan of $4,941,000 to the CDC -HA for consideration of value owed ion the purchase
price, and as necessary to fulfill the terms of the Purchase and Sale Agreement, including escrow
documents. Said loan documents, including a promissory note, is on file in the Office of the City
Clerk.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the Chairman to
execute a Month -to -Month Lease Agreement for the Property until City Public Works operations
are relocated. Said Lease Agreement is on file in the Office of the City Clerk.
BE IT FURTHER RESOLVED that the CDC -HA determines that the WI-TOD
project was previously addressed in the Final Environmental Impact Report for the Westside
Specific Plan (State Clearinghouse No. 2008071092) which was certified by the City Council on
March 16, 2010, thus satisfying CEQA.
--- Revised ---
Resolution No. 2013 — 18
Page Three
PASSED and ADOPTED this 20th day of Augu5t- O)3.
Ron Morrison, Chairman
ATTEST:
ese, Secretary
eese, Secretary
OVED AS TO FORM:
CI!t*. is Ga ' Silva
General C.'-I
Passed and adopted by the Community Development Commission — Housing Authority
of the City of National City, California, on August 20, 2013 by the following vote, to -wit:
Ayes: Boardmembers Cano, Morrison, Natividad, Rios, Sotelo-Solis.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Chairman, Housing Authority
Secretary Housing Authority
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2013-18 of the Community Development Commission — Housing
Authority of the City of National City, California, passed and adopted on August 20,
2013.
Secretary, Housing Authority
By:
Deputy
COMMUNITY DEVELOPMENT COMMISSION- C
HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY
MEETING DATE: August 20, 2013
AGENDA ITEM NO. 25
ITEM TITLE:
Resolution of the Community Development Commission -Housing Authority of the City of National City Authorizing the
Chairman to execute a Purchase and Sale Agreement with the City of National City for the purchase of two parcels totaling
6.299 acres, generally bounded by 19th Street, Harding Avenue, 22nd street, and Hoover Avenue, in the City of National
City for the development of 201 affordable housing units as Phase I and II of the Westside In -fill Transit Oriented
Development Project, accepting a Home allocation of $2,095,492 from the City of National City, authorizing the use of the
Home allocation for the partial payment of the property purchase, authorizing the executive director or designee to execute
a Promissory Note for $4,941,000 payable to the City of National City to complete said purchase, and approving a Month -
to -Month Leaseback to the City of National City of said property
PREPARED BY:
Carlos Aguirre, Comm. Dev. Spec. II
PHONE: 619.336.4391
EXPLANATION:
Please see attached background report and explanation.
DEPARTMENT: Housing, Grants,&
Asset Management
APPROVED 1,e_c).__`
FINANCIAL STATEMENT:
ACCOUNT NO.
APPROVED: 12'
APPROVED:
Finance
MIS
CDC -HA will be reallocated $2,095,492 in HOME funds of which $2,094,000 will be used in the
acquisition. The City will carry back a loan of $4,941,000.
ENVIRONMENTAL REVIEW:
The Certified Environmental Impact Report for the Westside Specific Plan analyzed a transit oriented
development for this site. Authority to Use Grant Funds was issued by the U.S. Dept. of HUD.
ORDINANCE: INTRODUCTION:
FINAL ADOPTION:
STAFF RECOMMENDATION:
Adopt the Resolution
BOARD / COMMISSION RECOMMENDATION:
The Planning Commission approved the Tentative Parcel Map and Variance on June 5, 2012 and approved a Parcel Map
Waiver on May 20, 2013 that included findings of consistency with the General Plan for the WITOD Project.
ATTACHMENTS:
1. Background Report and Explanation
2. Purchase and Sale Agreement
3. Promissory Note and Grant Deed
4. Month -to -Month Lease
�4GN', moo.
Attachment No. 1
Background Report and Explanation
The Westside Infill Transit Oriented Development (WI-TOD), also known as the Paradise
Creek Affordable Housing Project, is a proposed 201-unit affordable housing
development on the east side of Paradise Creek, and the expansion of Paradise Creek
Educational Park on the west side of the creek. The proposed project is based on a
concept that was developed through a neighborhood and stakeholder design participation
process and incorporated into the Westside Specific Plan, which was adopted in 2010.
The current proposed project design was developed with continuing public input and
participation through stakeholder and community meetings.
Development Agreement. After adoption of the Westside Specific Plan, a request for
proposals was issued, and the applicant was selected to develop the site. The applicant
entered into a Disposition and Development Agreement with the Community
Development Commission to develop the project. The agreement is an enforceable
obligation of the Successor Agency to the Community Development Commission (SA).
The entire site is owned by the City; however, the housing portion of the site will be
transferred to the Housing Authority. Pursuant to the Disposition and Development
Agreement, the developer will be required to enter into a long-term ground lease for the
housing site and will manage and operate the housing development, including resident
services and programs. The Community Development Commission -Housing Authority
will retain ownership of the housing site.
Housing Development. The housing development side of the project would consist of two
phases on the east side of Paradise Creek. The first phase would be built on
approximately four acres on the southern portion of the site and would include 109 units
within two buildings and a separate residential services building. The second phase
would be built on approximately two acres on the northern portion of the site and would
include 92 units within two buildings. The anticipated unit mix would include studios, one -
bedroom, two -bedroom, and three -bedroom units on three to four levels within the four
residential buildings. The residential buildings would generally be oriented along 22nd
Street and Hoover Avenue and set back from Paradise Creek with open space along the
creek boundary.
Park Development. The park development side of the project would add nearly four acres
to Paradise Creek Educational Park on the west side of the creek. Paradise Creek
Housing Partners is required to construct the park improvements pursuant to the
Disposition and Development Agreement. The proposed improvements would include a
naturalized planting buffer along Paradise Creek, a lawn area, a community garden, a
playground, a plaza, picnic tables, a pedestrian/bicycle path along the length of the creek,
and tree and shrub plantings along the western edge of the park. Park ownership would
be maintained by the City.
Certificate of Compliance. Consistent with the Parcel Map Waiver approved by the
National City Planning Commission on May 20, 2013 for the WITOD Project, the City of
National City can file a Certificate of Compliance that creates new legal parcels for the
1
Attachment No. 1
development. The entire project site consisted of nine parcels and portions of adjacent
rights -of -way; the Certificate of Compliance divides seven of the parcels into four parcels
to allow the development of the housing on the east side of Paradise Creek and the park
on the west side of the creek. The parcel map consists of 10.27 acres. Parcel 1 is 4.14
acres and would be developed with 109 units and the residential services building as
Phase I of the housing project. Parcel 2 is 2.16 acres and would be developed with 92
units in Phase II. Parcel 3 is 1.33 acres and would be developed with park improvements.
Proposed Parcel 4 is 2.60 acres and would delineate Paradise Creek and Paradise Creek
Educational Park. The Certificate of Compliance creates developable parcels that are
configured based on the proposed phasing of the WITOD project and to allow the leasing
of the parcels pursuant to the Disposition and Development Agreement.
Reallocation of HOME Funds. The City of National City is a Project Jurisdiction that
receives an annual entitlement grant allocation of HOME Investment Partnership (HOME)
Program funds from the U.S. Department of Housing and Urban Development for the
preservation and development of affordable housing in National City. The City allocated
$95,492 of HOME funds in Fiscal Year 2011 and $2,000,000 in Fiscal Year 2013 to
Community HousingWorks on behalf of Paradise Creek Housing Partners, L.P. to fund
predevelopment activities related to the development of 109 affordable housing units
included in Phase I of the Westside In -fill Transit Oriented Development Project.
Community HousingWorks has consented to the reallocation of said HOME funds to the
Community Development Commission -Housing Authority ("CDC -HA") for the purpose of
acquiring the 4.14 acre parcel (Parcel 1) of land designated for 109 newly constructed
affordable rental units at the corner of 22nd and Hoover Avenue. The CDC -HA has
submitted an application to the City of National City for the reallocation of a total of
$2,095,492 in HOME funds for the acquisition of land and development activities eligible
under the HOME program.
Acquisition of Parcels 1 and 2 by the CDC- Housing Authority. The City is the current
owner of Parcel 1 and 2 totaling 6.3 acres, generally bounded by 19th Street, Harding
Avenue, 22nd Street, and Hoover Avenue at WITOD development site. The Successor
Agency to the Community Development Commission as the National City Redevelopment
Agency (SA) is subject to the enforceable obligation commonly referred to as the Westside
Infill Transit Oriented Development Development and Disposition Agreement (DDA),
entered into June 21, 2011 with Paradise Creek Housing Partners, LP (Developer). The
sale of Parcel 1 and 2 to the CDC -HA is being undertaken so that the SA can fulfill its
enforceable obligations pursuant to the requirements of the WITOD DDA. The CDC -HA has
accepted the affordable housing functions of the former redevelopment agency. Appraisals
completed within the last 60 days indicated a value of $3.815 million for Parcel I and $3.22
million for Parcel 2 for a total value of the Property of $7.035 million. The CDC -HA intends
to use $2,094,000 in HOME funds to acquire Parcel I and the CDC -HA has also requested
a loan in the amount of $4,941,000 from the City in order to provide full consideration for the
market value of Parcel 1 and 2.
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Attachment No. 1
Leaseback of Public Works Yard to the City. Parcel 1 and Parcel 2 will continue to be
occupied by the National City Public Works Department, and the CDC -HA will provide a
month -to -month lease agreement for $1.00 per month until the operation is relocated to
allow for environmental remediation and the development of affordable housing on the site.
Relocation of Public Works Yard and the Purchase of 1726 Wilson Avenue. As part of
the WI-TOD DDA, National City Public Works ("PW') operations at 2100 Hoover Avenue
will need to relocate to other sites in order for the Successor Agency to complete
environmental remediation and develop 201 affordable housing units on Parcel 1 and
Parcel 2. The City's relocation plans for PW have accommodated for a substantial part of
PW operations within existing City facilities. The City still needs to secure a facility that can
house the following PW functions: streets/sewer, vehicle maintenance and storage, and
office space. The City reviewed options for relocation but alternatives that have been
considered are not readily available or do not fully satisfy PW's operational requirements
and do not fall within the timeline for implementing the WI-TOD development. The City
entered into a letter of intent to purchase a 1.17 acre site which fits the needs of PW and
provides 6430 sq. ft. of useable building area including office space and a repair shop
with two large entry bays. The property is commonly known as 1726 Wilson Avenue in
National City. The owners of the 1726 Wilson Avenue site are willing to sell their property
have accepted an offer by the City to purchase the property at a negotiated price of
$1,650,000.
Attachment No. 2
PURCHASE AND SALE AGREEMENT
(Westside TOD Affordable Site, National City, 91950)
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of the 20th day
of August, 2013 ("Effective Date") by and between City of National City ("Seller") and the
Community Development Commission -Housing Authority of the City of National City
("Purchaser").
RECITALS
A. The Seller owns the fee interest in that certain parcel of real property legally
described in Exhibit A attached hereto ("Parcel 1") and the fee interest in that certain parcel of
real property legally described in Exhibit B attached hereto ("Parcel 2"). Parcel 1 and Parcel 2,
are defined hereinbelow, collectively as the "Real Property." The Real Property is generally
bounded by 19t Street, Harding Avenue, 22nd Street and Hoover Avenue in National City,
California.
B. The successor agency to the Community Development Commission as the
National City Redevelopment Agency ("Successor Agency") is subject to the enforceable
obligation commonly referred to as the Westside lnfill Transit Oriented Development (WI-TOD)
Development and Disposition Agreement ("DDA"), entered into June 21, 2011 with Paradise
Creek Housing Partners, LP. The DDA requires the Real Property to be acquired for and
developed into a 201 unit affordable housing project. The Purchaser's purchase of Parcel 1 and
Parcel 2 is being undertaken pursuant to the requirements of the DDA and as an enforceable
obligation of the Successor Agency. The Purchaser accepted the affordable housing functions of
the former redevelopment agency pursuant to resolution number 2012-01. The value of the
consideration for the Real Property (i.e., the Parcel 1 Purchase Price for Parcel 1 and the Parcel 2
Purchase Price for Parcel 2), is not less than the appraised value of the Real Property. The
consideration being paid for Parcel 1 is the Parcel 1 Purchase Price of Three Million Eight
Hundred Fifteen Thousand and No/100 Dollars ($3,815,000.00), which equals the appraised
value of Parcel 1 as determined by that certain Land Appraisal performed by Lea & Company
effective as of June 27, 2013, but dated June 30, 2013. The consideration being paid for Parcel
2 is the Parcel 2 Purchase Price of Three Million Two Hundred Twenty Thousand and No/100
Dollars ($3,220,000.00), which equals the appraised value of Parcel 2 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013. Provided the various conditions to Closing (as defined below) set forth in this
Agreement are satisfied, the Seller agrees to sell the Property (as defined below) to the Purchaser
and the Purchaser agrees to purchase the Property from the Seller as set forth in this Agreement.
C. The Purchaser is acquiring Parcel 1 in part utilizing United States Department of
Housing and Urban Development HOME funds. After Closing, the Seller will temporarily lease
the Property back from the Purchaser on a month -to -month basis for a total consideration of
$1.00 per month. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be
developed as the "Phase 1 Project," as defined in the DDA, which shall be an affordable rental
housing project for persons and families of very low and low income. Construction and
operation of the Phase 1 Project shall be governed by all applicable United States Department of
1
Attachment No. 2
Housing and Urban Development regulations whether or not specifically referenced in this
Agreement. Failure of the Purchaser to cause Parcel 1 to be developed as an affordable rental
housing project for persons and families of very low and low income shall be a default
hereunder. This obligation shall not be merged into the Grant Deed and shall survive the
Closing.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, the Seller and the Purchaser hereby agree as follows:
1. Purchase, Sale and Leaseback. In consideration of the mutual covenants set forth in this
Agreement, the Purchaser will acquire all of the Property, on the terms and conditions set forth
herein, provided the various conditions to Closing set forth in this Agreement are satisfied.
(a) Sale of the Property. The Seller agrees to sell the Property to the Purchaser, and
the Purchaser agrees to purchase the Property from Seller, on the terms and conditions set forth
herein. At Closing, the Seller shall convey the fee interest in the Real Property to the Purchaser
by recordation of the Grant Deed (as defined below). The Escrow Agent shall issue the Title
Policy (as defined below) to the Purchaser at Closing.
(b) Possession of the Property, Leaseback. The Seller shall deliver possession of the
Property to Purchaser at Closing, subject only to the Title Exceptions, all as defined hereinbelow.
Notwithstanding the foregoing, after Closing the Purchaser will allow the Seller to lease the
Property from the Purchaser on a month -to -month basis for a total consideration of $1.00 per
month, as set forth in the Lease.
2. Definitions. As used in this Agreement, the following terms shall have the following
meanings:
"Agreement" means this Purchase and Sale Agreement between the Seller and the
Purchaser.
"Applicable Environmental Law" means all laws applicable to the presence of any
Hazardous Materials (as defined below) on or within the Property, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601,
et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq.); the Clean
Water Act (33 U.S.C. §2601, et seq.); the Safe Drinking Water Act (14 U.S.C. §300f, et seq.);
the Hazardous Materials Transportation Act (49 U.S.C. §5101, et seq.); the Toxic Substances
Control Act (15 U.S.C. §2601, et seq.); the Federal Water Pollution Control Act (33 U.S.C.
§1300, et seq.); the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136, et seq.);
the Atomic Energy Act (42 U.S.C. §2011, et seq.); the Nuclear Waste Policy Act (42 U.S.C.
§10101, et seq.); the Clean Air Act (42 U.S.C. §7401, et seq.); the California Hazardous Waste
Control Act (California Health and Safety Code §25100, et seq.); the Carpenter -Presley -Tanner
Hazardous Substance Account Act (California Health and Safety Code §25300, et seq.); the Safe
Drinking Water and Toxic Enforcement Act ("Proposition 65") (California Health and Safety
2
Attachment No. 2
Code §25249.5, et seq.); and the Porter -Cologne Water Quality Control Act (California Water
Code §13000, et seq.); and any similar federal, state or local laws, all regulations and
publications implementing or promulgated pursuant to the foregoing, as any of the foregoing
may be amended or supplemented from time to time.
"Business Day" means any day other than a Saturday, Sunday or any other day on which
Purchaser or Escrow Agent is not open for business. In the event any date, deadline or due date
set forth in this Agreement falls on a day that is not a Business Day, then such deadline or due
date shall automatically be extended to the next Business Day.
"Close" or "Closing" means the close of Escrow as provided herein, which shall not be
later than the last day of the Due Diligence Period.
"Closing Date" means the date on which the Closing occurs, which date shall be August
28, 2013.
"Conditions Precedent for the Benefit of the Seller" shall have the meaning set forth in
Section 5 of this Agreement.
"Conditions Precedent for the Benefit of the Purchaser" shall have the meaning set forth
in Section 6 of this Agreement.
"Deposit" shall have the meaning set forth in Section 3(b)(1) of this Agreement.
"Due Diligence Period" means the period of time commencing on the Effective Date and
ending on July 15, 2013.
"Effective Date" is defined above.
"Escrow' means the escrow depository and disbursement services to be performed by
Escrow Agent pursuant to the provisions of this Agreement.
"Escrow Agent" means Carla Burchard at Stewart Title Company, 5740 Fleet Street,
Suite 100, Carlsbad, California 92008.
"Grant Deed" means a duly executed and acknowledged grant deed conveying fee simple
title to the Real Property from the Seller to the Purchaser, in the form attached hereto as Exhibit
B.
"Hazardous Materials" means:
(1) Those substances included within the definitions of "hazardous substance,"
"hazardous waste," "hazardous material," "toxic substance," "solid waste," "pollutant" or
"contaminant" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. §9601 et seq.); the Resource Conservation and Recovery
Act (42 U.S.C. §6901 et seq.); the Clean Water Act (33 U.S.C. §2601 et seq.); the Toxic
3
Attachment No. 2
Substances Control Act (15 U.S.C. §9601 et seq.); the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et seq.); or under any other Environmental Laws.
(2) Those substances included within the definitions of "Extremely Hazardous
Waste," "Hazardous Waste," or "Restricted Hazardous Waste," under §§25115, 25117 or
25122.7 of the California Health and Safety Code, or is listed or identified pursuant to
§§25140 or 44321 of the California Health and Safety Code.
(3) Those substances included within the definitions of "Hazardous Material,"
"Hazardous Substance," "Hazardous Waste," "Toxic Air Contaminant" or "Medical
Waste" under §§25281, 25316, 25501, 25501.1, 25023.2 or 39655 of the California
Health and Safety Code.
(4) Those substances included within the definitions of "Oil" or a "Hazardous
Substance" listed or identified pursuant to §311 of the Federal Water Pollution Control
Act, 33 U.S.C. §1321, as well as any other hydrocarbonic substance or by-product.
(5) Those substances included within the definitions of "Hazardous Waste,"
Extremely Hazardous Waste" or an "Acutely Hazardous Waste" pursuant to Chapter 11
of Title 22 of the California Code of Regulations.
(6) Those substances listed by the State of California as a chemical known by the
State to cause cancer or reproductive toxicity pursuant to §25249.9(a) of the California
Health and Safety Code.
(7) Any material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures, damages or threatens to damage,
health, safety, or the environment, or is required by any law or public agency to be
remediated, including remediation which such law or public agency requires in order for
the property to be put to any lawful purpose.
(8) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank Field
Manual, whether or not the presence of such material resulted from a leaking
underground fuel tank.
(9) Pesticides regulated under the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. §136 et seq.
(10) Asbestos, PCBs, and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. §2601 et seq.
(11) Any radioactive material including, without limitation, any "source
material," "special nuclear material," "by-product material," "low-level wastes,"
"high-level radioactive waste," "spent nuclear fuel" or "transuranic waste" and any other
radioactive materials or radioactive wastes, however produced, regulated under the
4
Attachment No. 2
Atomic Energy Act, 42 U.S.C. §§2011 et seq., the Nuclear Waste Policy Act, 42 U.S.C.
§§10101 et seq., or pursuant to the California Radiation Control Law, California Health
and Safety Code §§25800 et seq.
(12) Any material regulated under the Occupational Safety and Health Act, 29
U.S.C. §§651 et seq., or the California Occupational Safety and Health Act, California
Labor Code §§6300 et seq.
(13) Any material regulated under the Clean Air Act, 42 U.S.C. §§7401 et seq.
or pursuant to Division 26 of the California Health and Safety Code.
(14) Those substances listed in the United States Department of Transportation
Table (49 CFR Part 172.101), or by the Environmental Protection Agency, or any
successor agency, as hazardous substances (40 CFR Part 302).
(15) Other substances, materials, and wastes that are or become regulated or
classified as hazardous or toxic under federal, state or local laws or regulations.
(16) Any material, waste or substance that is a petroleum or refined petroleum
product, asbestos, polychlorinated biphenyl, designated as a hazardous substance
pursuant to 33 U.S.C. §1321 or listed pursuant to 33 U.S.C. §1317, a flammable
explosive or a radioactive material.
"Immediately Available Funds" means a bank wire transfer or a certified bank or
cashier's check.
"Improvements" means collectively: (i) any and all buildings, structures and
improvements, of any kind whatsoever, located at or affixed to the Real Property; (ii) all rights,
privileges and easements appurtenant to the Real Property, if any, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and under the Real Property, if any;
and (iii) all development rights, air rights, and water rights if any, relating to the Real Property.
"Lease" means a lease in the form attached hereto as Exhibit C.
"Parcel 1" means that certain parcel of real property legally described in Exhibit A
attached hereto.
"Parcel 1 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel
1, which shall be Three Million Eight Hundred Fifteen Thousand and No/100 Dollars
($3,815,000.00), which amount equals the appraised value of Parcel 1 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013. A portion of the Parcel 1 Purchase Price only, is being paid by the Purchaser
utilizing Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00) of United
States Department of Housing and Urban Development HOME funds. None of the United States
Department of Housing and Urban Development HOME funds are being used to acquire Parcel
2. After the Seller vacates the Property, the Purchaser shall cause Parcel 1 to be developed as the
5
Attachment No. 2
"Phase 1 Project," as defined in the DDA, which shall be an affordable rental housing project for
persons and families of very low and low income. Construction and operation of the Phase 1
Project shall be governed by all applicable United States Department of Housing and Urban
Development regulations whether or not specifically referenced in this Agreement. The
Purchaser shall cause Parcel 1 to be restricted in accordance with the United States Department
of Housing and Urban Development HOME regulations (24 CFR Part 92).
"Parcel 2" means that certain parcel of real property legally described in Exhibit B
attached hereto.
"Parcel 2 Purchase Price" means the purchase price to be paid by the Purchaser for Parcel
2, which shall be Three Million Two Hundred Twenty Thousand and No/100 Dollars
($3,220,000.00), which amount equals the appraised value of Parcel 2 as determined by that
certain Land Appraisal performed by Lea & Company effective as of June 27, 2013, but dated
June 30, 2013.
"Permitted Exceptions" means collectively, the (i) the printed exceptions and exclusions
in the Title Policy; (ii) the exceptions shown as items A-E and 1-9 on that certain Preliminary
Report dated as of June 12, 2013, issued by Stewart Title of California, Inc., Order No. 01180-
50484; (iii) real property taxes and assessments which are a lien but not yet payable; and (iv) all
applicable building, zoning and use restrictions and/or regulations of any municipality, township,
county or state.
"Property" means collectively, the Real Property and the Improvements.
"Purchase Price" means collectively, the Parcel 1 Purchase Price and the Parcel 2
Purchase Price, which total Seven Million Thirty -Five Thousand and No/100 Dollars
($7,035,000.00).
"Purchaser" means the Community Development Commission -Housing Authority of the
City of National City; provided, however, if the Community Development Commission -Housing
Authority of the City of National City assigns its interest in this Agreement pursuant to Section
10 of this Agreement, then the term "Purchaser" shall mean such assignee.
"Real Property" means collectively, Parcel 1 and Parcel 2.
"Seller" means the City of National City.
"Title Policy" means a CLTA Owner's Policy of Title Insurance in the amount of the
Purchase Price, insuring that title to the fee interest in the Property is vested in the Purchaser
subject only to the Permitted Exceptions, which Title Policy shall be obtained through Stewart
Title Company. Purchaser shall pay the cost of the CLTA Owner's Policy of Title Insurance and
any endorsements it desires.
6
Attachment No. 2
3. Purchase Price.
(a) Purchase Price. The Seven Million Thirty -Five Thousand and No/100 Dollars
($7,035,000.00) Purchase Price shall be paid as follows:
(1) Two Million Ninety -Four Thousand and No/100 Dollars ($2,094,000.00)
of United States Department of Housing and Urban Development HOME funds shall be payable
at Closing, all of which is being paid by the Purchaser to acquire Parcel 1 only; and
(2) The Four Million Nine Hundred Forty -One Thousand and No/100 Dollars
($4,941,000.00) balance of the Purchase Price shall be paid by the Purchaser to the Seller with
interest at the rate of zero percent (0.00%) in annual installments equal to the annual amount the
Purchaser receives from any ground leases Parcel 1 and Parcel 2 and from the residual receipts
loans that the Purchaser is making to the affordable housing developers that will construct
affordable housing projects on each of Parcel 1 and Parcel 2. At Closing, the Purchaser shall
execute a promissory note in favor of Seller in a form acceptable to the Seller and Purchaser.
(b) Deposit; Liquidated Damages.
(1) Deposit. Purchaser shall make a deposit ("Deposit") into Escrow of
Immediately Available Funds in the amount of One Thousand and No/100 Dollars ($1,000.00)
within three (3) Business Days of the Effective Date. The Deposit shall be credited against the
Purchase Price. If the Purchaser elects to terminate this Agreement prior to Closing, then the
Deposit shall be immediately returned by Escrow Agent to the Purchaser. At Closing, the
Deposit shall be released by Escrow Agent to the Seller. The Deposit, and any interest earned on
the Deposit, shall be credited in favor of the Purchaser against the Purchase Price as set forth in
Section 3(c), below.
(2) LIQUIDATED DAMAGES. THE DEPOSIT SHALL BE
REFUNDABLE TO THE PURCHASER AS MAY BE EXPRESSLY PROVIDED FOR IN
THIS AGREEMENT. IF ESCROW FAILS TO CLOSE AS A RESULT OF PURCHASER'S
DEFAULT HEREUNDER, THE SOLE REMEDY OF THE SELLER SHALL BE TO
TERMINATE THIS AGREEMENT BY GIVING WRITTEN NOTICE THEREOF TO
PURCHASER AND ESCROW AGENT, WHEREUPON THE SELLER SHALL RETAIN THE
DEPOSIT(S) ACTUALLY DEPOSITED BY PURCHASER INTO ESCROW AS
LIQUIDATED DAMAGES (AND THE SELLER WAIVES ANY RIGHT TO SPECIFICALLY
ENFORCE THIS AGREEMENT SET FORTH IN CALIFORNIA CIVIL CODE SECTION
1680 OR 3389). THEREAFTER, NO PARTY HERETO SHALL HAVE ANY FURTHER
LIABILITY OR OBLIGATION TO ANY OTHER PARTY HERETO EXCEPT FOR: (i) THE
SELLER'S RIGHT TO RECEIVE AND RETAIN SUCH LIQUIDATED DAMAGES; AND (ii)
THE OBLIGATION OF THE PARTIES TO PAY AMOUNTS INTO ESCROW TO PAY A
PORTION OF THE FEES AND COSTS OF ESCROW AS SET FORTH IN SECTIONS 5 AND
6 BELOW. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE
SELLER'S ACTUAL DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT
HEREUNDER ARE UNCERTAIN IN AMOUNT AND DIFFICULT TO ASCERTAIN, AND
7
Attachment No. 2
THAT SUCH AMOUNT OF LIQUIDATED DAMAGES IS REASONABLE UNDER THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ., CONSIDERING
ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE HEREOF INCLUDING,
WITHOUT LIMITATION, THE RELATIONSHIP OF SUCH AMOUNT TO THE RANGE OF
POTENTIAL HARM TO THE SELLER THAT CAN REASONABLY BE ANTICIPATED
AND THE ANTICIPATION THAT PROOF OF ACTUAL DAMAGES RESULTING FROM
SUCH DEFAULT WOULD BE COSTLY AND INCONVENIENT. IN PLACING ITS
INITIALS IN THE SPACE BELOW, EACH PARTY HERETO SPECIFICALLY CONFIRMS
THE ACCURACY OF THE FOREGOING AND THE FACT THAT SUCH PARTY HAS
BEEN REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION.
THE PROVISIONS OF THIS SECTION 3(B)(2) SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
Seller's Initials Purchaser's Initials
(c) Delivery of Remainder of Purchase Price into Escrow. Not less than one (1)
Business Day prior to the Closing Date, the Purchaser shall cause Immediately Available Funds
to be delivered to the Escrow Agent in an amount equal to $2,094,000.00 ($2,093,000.00 minus
the Deposit).
(d) Disbursement to the Seller. Immediately after the Closing, the Escrow Agent
shall disburse to the Seller the funds that the Seller is entitled to receive under this Agreement.
4. Due Diligence. The Purchaser has completed its due diligence with respect to the
Property.
5. Conditions Precedent for the Benefit of the Seller. The Seller's obligation to Close shall
be conditioned upon the satisfaction or emailed or written waiver by the Seller of all of the
conditions precedent ("Conditions Precedent for the Benefit of the Seller") set forth in this
Section 5. Any of the Conditions Precedent for the Benefit of the Seller may be waived by the
Seller unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any
such waiver shall be effective only if the same is expressly waived (i) by email from the Seller to
the Purchaser and Escrow Agent; or (ii) in a writing signed by the Seller and delivered to the
Purchaser and Escrow Agent. If the Conditions Precedent for the Benefit of the Seller are not
satisfied by the deadlines set forth in this Section 5 or expressly waived, the Seller (provided the
Seller is not in default hereunder) may provide emailed or written notice of the Seller's
conditional termination of this Agreement to the Purchaser and Escrow Agent. After receipt of
such notice of conditional termination, the Purchaser shall have ten (10) Business Days to cure
any non -satisfaction of a condition or other default specified in the notice of conditional
termination; provided, however, the foregoing grace period shall be two (2) Business Days if the
unsatisfied condition is a failure by Purchaser to deliver funds required to close on the Closing
Date. If such matter remains unsatisfied or the default remains uncured after the expiration of
such ten (10) Business Day period, then this Agreement shall terminate at the close of business
8
Attachment No. 2
on such tenth (10th) Business Day (or second (2"d) Business Day if the unsatisfied condition is a
failure by Purchaser to deliver funds required to close on the Closing Date). In the event of
termination of this Agreement (and by operation of law the Escrow) pursuant to this Section 5,
then: (x) as set forth in the liquidated damages provision of Section 3(b)(2) above, all rights and
liabilities of the Purchaser and the Seller with respect to this Agreement shall immediately
terminate, except those which specifically survive such termination; (y) Escrow Agent deliver
the Deposit to the Seller and shall return to the Seller all funds or other things deposited in
Escrow by the Seller; and (z) Escrow Agent shall return to the Purchaser all funds or other things
deposited in Escrow by the Purchaser, less the Deposit. Provided, however, all fees and costs
charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Purchaser. Notwithstanding clause (x) of this Section 5, in the event of termination of this
Agreement pursuant to this Section 5, the Purchaser and the Seller shall cooperate with one
another, execute all documents reasonably necessary and take all reasonable steps as may be
required by Escrow Agent in order to accomplish the purposes of this Section 5.
(a) Purchaser making the Deposit into Escrow, as set forth in Section 3(b)(1), above.
(b) The delivery by the Purchaser into Escrow at least one (1) Business Day prior to
Closing of Immediately Available Funds in the amount required by Section 3(c), above.
(c) The delivery by the Purchaser into Escrow of all other documents and instruments
required by this Agreement or reasonably required by Seller and/or Escrow Agent to complete
the Closing, at least one (1) Business Day prior to Closing.
(d) Purchaser not being in default of any of its representations or warranties under
this Agreement, or any other material ternls or conditions related to Purchaser.
(e) As of the Closing Date, the Purchaser has not made an assignment for the benefit
of creditors, filed a bankruptcy petition, been adjudicated insolvent or bankrupt, petitioned a
court for the appointment of any receiver of, or trustee for, the Purchaser, or commenced any
proceeding relating to the Purchaser under any reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or later in effect.
(f) This Agreement has been formally approved by resolution of the City of National
City.
6. Conditions Precedent for the Benefit of the Purchaser. The Purchaser's obligation to
Close shall be conditioned upon the satisfaction or emailed or written waiver by the Purchaser of
all of the conditions precedent ("Conditions Precedent for the Benefit of the Purchaser") set forth
in this Section 6. Any of the Conditions Precedent for the Benefit of the Purchaser may be
waived by the Purchaser unilaterally; and if so waived, such conditions shall be of no further
effect hereunder. Any such waiver shall be effective only if the same is expressly waived (i) by
email from the Purchaser to the Seller and Escrow Agent; or (ii) in a writing signed by the
Purchaser and delivered to the Seller and Escrow Agent. If the Conditions Precedent for the
Benefit of the Purchaser are not satisfied by the deadlines set forth in this Section 6 or expressly
waived, the Purchaser (provided the Purchaser is not in default hereunder) may provide emailed
9
Attachment No. 2
or written notice of the Purchaser's conditional termination of this Agreement to the Seller and
Escrow Agent. After receipt of such notice of conditional termination, the Seller shall have ten
(10) Business Days to cure any non -satisfaction of a condition or other default specified in the
notice of conditional termination. If such matter remains unsatisfied or the default remains
uncured after the expiration of such ten (10) Business Day period, then this Agreement shall
terminate at the close of business on such tenth (loth) Business Day. In the event of teluunation
of this Agreement (and by operation of law the Escrow) pursuant to this Section 6, then: (x)
except to subparagraph (f) below, the same shall be a default by the Seller (y) Escrow Agent
shall return to the Purchaser all funds or other things deposited in Escrow by the Purchaser,
including without limitation, the Deposit; and (z) Escrow Agent shall return to the Seller all
funds or other things deposited in Escrow by the Seller. Purchaser is not waiving any default by
the Seller and nothing contained in this Section 6, including, without limitation, the immediately
foregoing sentence shall be a waiver of any right of Purchaser to recover damages from the
Seller for failure of any Conditions Precedent for the Benefit of the Purchaser. Provided,
however, all fees and costs charged by the Escrow Agent shall be paid one-half (1/2) by the
Seller and one-half (1/2) by the Purchaser.
(a) The deposit into Escrow by the Seller of the Grant Deed, duly executed and
acknowledged, conveying fee simple title to the Property to the Purchaser at least one (1)
Business Day prior to Closing.
(b) The deposit by the Seller into Escrow of a duly executed affidavit that it is not a
foreign person and is a "United States Person" as such term is defined in Section 7761(a)(30) of
the Internal Revenue Code of 1986, as amended, at least one (1) Business Days prior to Closing.
The affidavit shall be in the form prescribed by federal regulations, if any.
(c) The deposit by the Seller into Escrow of a duly executed California Form 593(c)
or other evidence that withholding of any portion of the Purchase Price is not required by the
Revenue and Taxation Code of California, at least one (1) Business Day prior to Closing.
(d) The deposit by the Seller into Escrow of all additional documents and instruments
as are reasonably required by the Purchaser and/or Escrow Agent to complete the Closing, at
least one (1) Business Day prior to Closing.
(e) The Escrow Agent is prepared and obligated to issue the Title Policy in
Purchaser's favor upon the recordation of the Grant Deed and there are no exceptions to the Title
Policy, except for Permitted Exceptions.
(f) Seller not being in default of any of its representations or warranties under this
Agreement, or any other material terms or conditions related to Seller.
(g) As of the Closing Date, there exists no lease, tenancy or occupancy agreement
affecting the Property, except for the lease of the property from the Purchaser back to the Seller,
as described in Section 1(b), above.
10
Attachment No. 2
(h) As of the Closing Date there is not pending, or threatened to be pending, any
action or proceeding by any person or before any government authority, the outcome of which
could prohibit the use of the Property as intended by the Purchaser.
(i) This Agreement has been formally approved by resolution of the Community
Development Commission -Housing Authority of the City of National City.
7. Representations and Warranties; Waivers and Releases. When making the
representations and warranties set forth in this Section 7, each party making a representation
and/or warranty represents that the same are true, correct and complete as of the date hereof and
shall be and are true, correct and complete as of the Closing Date. The representations and
warranties shall survive the Closing.
(a) Representations and Warranties Regarding Authority. The Seller and the
Purchaser each hereby represents and warrants to the other that this Agreement and all
documents or instruments executed by them which are to be delivered at or prior to the Closing
are, or on the Closing Date will be, duly authorized, executed and delivered by the Seller or the
Purchaser, as applicable.
(b) Representations and Warranties Regarding Enforceability of Agreement. The
Seller and the Purchaser each hereby represents and warrants to the other that this Agreement
and all documents required hereby to be executed by them shall be valid, legally binding
obligations of, and enforceable against, the Seller or the Purchaser, as applicable, in accordance
with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights of creditors generally and general principles of equity
(whether enforcement is sought in equity or at law).
(c) Seller Representations and Warranties Pertaining to Legal Matters. The Seller
hereby represents and warrants to the Purchaser that:
(1) As of the Effective Date and the Closing Date, the Seller is the sole owner
of the fee title interest to the Property.
(2) There is no pending or threatened proceeding in eminent domain or
otherwise, which would affect the Property, or any portions thereof, nor any facts which
might give rise to such action or proceeding.
(d) Seller Representations and Warranties Pertaining to Options. The Seller hereby
represents and warrants to the Purchaser that no person has any option or right of first refusal to
purchase the Property or any parts thereof.
(e) Material Adverse Changes. If Seller receives any notice or knowledge of
anything materially adversely affecting Seller's representations or warranties after the date of
this Agreement, then Seller shall immediately notify Purchaser in writing of such fact or
circumstance. If Purchaser receives written notice from Seller pursuant to the immediately
preceding sentence, and Seller in such notice does not agree to cure the same at or prior to
11
Attachment No. 2
Closing to Purchaser's reasonable satisfaction, then, Purchaser shall have the right to bring an
action against Seller on the breach of such representation or warranty.
(f) Seller Representation and Warranty Pertaining to Tenants. The Seller hereby
represents and warrants to the Purchaser that no person has any lease or other right to occupy the
Property or any parts thereof, except for the Seller's right to lease the Property from the Seller as
described in Section 1(b), above.
(g) Seller Representation and Warranty Regarding Operation of the Property. The
Seller hereby represents and warrants to the Purchaser that there are no oral or written
agreements or understandings concerning the Property by which the Purchaser would be bound
following the Closing.
(h) AS 1S CONDITION. PURCHASER HEREBY ACKNOWLEDGES,
REPRESENTS, WARRANTS, COVENANTS AND AGREES THAT AS A MATERIAL
INDUCEMENT TO SELLER TO EXECUTE AND ACCEPT THIS AGREEMENT AND IN
CONSIDERATION OF THE PERFORMANCE BY SELLER OF ITS DUTIES AND
OBLIGATIONS UNDER THIS AGREEMENT THAT, EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER'S EXPRESS
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 7 OF THIS
AGREEMENT, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE
ON AN "AS IS, WHERE IS" BASIS, SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, FUTURE OR
OTHERWISE, OF, AS TO, CONCERNING OR WITH RESPECT TO: (1) THE EXISTENCE
OF HAZARDOUS MATERIALS OR MOLD UPON THE PROPERTY OR ANY PORTION
THEREOF; (2) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION,
SUBSIDENCE, SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND
WATER RESERVOIRS, LIMITATIONS REGARDING THE WITHDRAWAL OF WATER
AND FAULTING; (3) WHETHER OR NOT AND TO THE EXTENT TO WHICH THE
PROPERTY OR ANY PORTION THEREOF 1S AFFECTED BY ANY STREAM (SURFACE
OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN,
FLOODWAY OR SPECIAL FLOOD HAZARD; (4) DRAINAGE; (5) 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; (6) USES OF ADJOINING
PROPERTIES; (7) THE VALUE, COMPLIANCE WITH THE PLANS AND
SPECIFICATIONS, SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTION,
DURABILITY, STRUCTURAL INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR
FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY
RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR
ANY PART THEREOF, INCLUDING, WITHOUT LIMITATION, WHETHER OR NOT THE
IMPROVEMENTS COMPLY WITH THE REQUIREMENTS OF TITLE III OF THE
AMERICANS WITH DISABILITIES ACT OF 1990, 42 U.S.C. §§ 12181-12183, 12186(B) —
12189 AND RELATED REGULATIONS; (8) THE PRESENCE OF HAZARDOUS
12
Attachment No. 2
MATERIALS IN OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY; (9) THE
SQUARE FOOTAGE OF THE PROPERTY OR THE IMPROVEMENTS THEREON; (10)
IMPROVEMENTS AND INFRASTRUCTURE, INCLUDING, WITHOUT LIMITATION,
THE CONDITION OF THE ROOF, FOUNDATION, FIXTURES, AND PERSONAL
PROPERTY, IF ANY; (11) DEVELOPMENT RIGHTS AND EXTRACTIONS; (12) WATER
OR WATER RIGHTS; (13) THE DEVELOPMENT POTENTIAL FOR THE PROPERTY; (14)
THE ABILITY OF PURCHASER TO REZONE THE PROPERTY OR CHANGE THE USE
OF THE PROPERTY; (15) THE ABILITY OF PURCHASER TO ACQUIRE ADJACENT
PROPERTIES; (16) THE EXISTENCE AND POSSIBLE LOCATION OF ANY
UNDERGROUND UTILITIES; (17) THE EXISTENCE AND POSSIBLE LOCATION OF
ANY ENCROACHMENTS; (18) WHETHER THE IMPROVEMENTS ON THE PROPERTY
WERE BUILT, IN WHOLE OR IN PART, IN COMPLIANCE WITH APPLICABLE
BUILDING CODES; (19) THE STATUS OF ANY LIFE -SAFETY SYSTEMS IN THE
IMPROVEMENTS ON THE PROPERTY; (20) THE CHARACTER OF THE
NEIGHBORHOOD IN WHICH THE PROPERTY IS SITUATED; (21) 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; (22) THE MERCHANTABILITY OF THE PROPERTY OR
FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (PURCHASER
AFFIRMING THAT PURCHASER HAS NOT RELIED ON SELLER'S SKILL OR
JUDGMENT TO SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR
PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE PROPERTY IS FIT
FOR ANY PARTICULAR PURPOSE); AND/OR (23) ANY OTHER MATTER
CONCERNING THE PROPERTY. NOTWITHSTANDING THE FOREGOING OR
ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT, SELLER IS NOT
RELEASED FROM ANY LIABILITY TO PURCHASER FOR FRAUD OR BREACH OF
ANY COVENANT, REPRESENTATION OR WARRANTY SET FORTH IN THIS
AGREEMENT. Notwithstanding anything to the contrary set forth in this Agreement, including
without limitation, this Section 7(h), any right waived by Purchaser and any release by
Purchaser, shall only release or waive the Purchaser's right to enforce any judgment (including
without limitation, damages, attorneys' fees, costs, expenses or any other compensation of any
type whatsoever) personally against only the Seller and Seller's successors, assigns, officers,
directors, shareholders, participants, partners, affiliates, employees, representatives, invitees and
agents (collectively, the "Seller Parties") or any of them. Purchaser is not waiving any right to
bring any action against any of the "Non -Released Parties" (defined below) or waiving recovery
against or otherwise releasing or agreeing to forego Purchaser's rights with respect to any
insurance policy, or any other person (other than the right to enforce a judgment personally
against any of the Seller Parties), including without limitation persons obligated to the Seller
Parties, by right of subrogation or otherwise, prior owners or occupants of the Property, the
tenants, persons performing work at the Property and/or any insurance policies held by any or all
such persons (collectively, the "Non -Released Parties").
PURCHASER ACKNOWLEDGES THAT AS OF THE EXPIRATION OF THE DUE
DILIGENCE PERIOD, PURCHASER SHALL HAVE COMPLETED ALL PHYSICAL AND
FINANCIAL EXAMINATIONS RELATING TO THE ACQUISITION OF THE PROPERTY
13
Attachment No. 2
HEREUNDER (IT BEING ACKNOWLEDGED AND AGREED THAT PURCHASER SHALL
BE DEEMED TO HAVE INSPECTED EACH APARTMENT UNIT WITHIN THE
PROPERTY) AND WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF SUCH
EXAMINATIONS AND THE TITLE INSURANCE PROTECTION FOR THE PROPERTY
AFFORDED BY THE TITLE POLICY, EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT AND SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 7 OF THIS AGREEMENT. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED
OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A
VARIETY OF SOURCES AND THAT THE SELLER HAS NOT MADE ANY
INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND
MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF
SUCH INFORMATION, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT
AND SUBJECT TO SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES SET
FORTH IN SECTION 7 OF THIS AGREEMENT. SELLER SHALL NOT BE LIABLE FOR
ANY NEGLIGENT MISREPRESENTATION OR FAILURE TO INVESTIGATE THE
PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR
WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL
ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE
PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER, OR ANY REAL
ESTATE BROKER, AGENT, REPRESENTATIVE, EMPLOYEE, SERVANT OR OTHER
PERSON ACTING ON SELLER'S BEHALF EXCEPT FOR REPRESENTATIONS AND
WARRANTIES EXPRESSLY PROVIDED IN SECTION 7 OF THIS AGREEMENT. IT IS
ACKNOWLEDGED AND AGREED THAT THE PROPERTY IS SOLD BY SELLER AND
PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. NOTWITHSTANDING
THE FOREGOING OR ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT, SELLER IS NOT RELEASED FROM ANY LIABILITY TO PURCHASER
FOR FRAUD OR BREACH OF ANY COVENANT, REPRESENTATION OR WARRANTY
SET FORTH IN THIS AGREEMENT.
PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT PURCHASER IS
FULLY AWARE OF THE AGE OF THE PROPERTY, THAT OVER TIME VARIOUS
EVENTS MAY HAVE OCCURRED ON THE PROPERTY WHICH EVENTS MAY BE
TYPICAL AND(OR) ATYPICAL OF EVENTS OCCURRING TO OTHER PROPERTIES OF
SIMILAR AGE TO THE PROPERTY AND SIMILARLY LOCATED IN THE CITY OF
NATIONAL CITY AND (OR) THE COUNTY OF SAN DIEGO, CALIFORNIA, AND THAT
SUCH EVENTS MAY INCLUDE, WITHOUT LIMITATION, SLAB LEAKS, MOLD, FIRE,
SHIFTING, AND VIOLATIONS OF LAWS, ORDINANCES, RULES, REGULATIONS,
PERMITS, APPROVALS, LICENSES AND(OR) ORDERS OF GOVERNMENTAL
AGENCIES WITH JURISDICTION OVER THE PROPERTY.
THE CLOSING OF THE PURCHASE OF THE PROPERTY BY PURCHASER
HEREUNDER SHALL BE CONCLUSIVE EVIDENCE THAT: (A) PURCHASER HAS
FULLY AND COMPLETELY INSPECTED (OR HAS CAUSED TO BE FULLY AND
COMPLETELY INSPECTED) THE PROPERTY; AND (B) PURCHASER ACCEPTS THE
14
Attachment No. 2
PROPERTY AS BEING IN GOOD AND SATISFACTORY CONDITION AND SUITABLE
FOR PURCHASER'S PURPOSES.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR
RELIANCE ON REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED IN
SECTION 7 OF THIS AGREEMENT, PURCHASER SHALL PERFORM AND RELY
SOLELY UPON ITS OWN INVESTIGATION CONCERNING ITS INTENDED USE OF THE
PROPERTY, AND THE PROPERTY'S FITNESS THEREFOR. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT SELLER'S COOPERATION WITH PURCHASER
WHETHER BY PROVIDING DOCUMENTS RELATING TO THE PROPERTY OR
PERMITTING INSPECTION OF THE PROPERTY, SHALL NOT BE CONSTRUED AS ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF ANY KIND WITH
RESPECT TO THE PROPERTY, OR WITH RESPECT TO THE ACCURACY,
COMPLETENESS, OR RELEVANCE OF THE DOCUMENTS PROVIDED TO
PURCHASER BY SELLER IN RELATION TO THE PROPERTY, PROVIDED THAT THE
FOREGOING SHALL NOT BE A LIMITATION OR MODIFICATION OF THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY PROVIDED FOR IN SECTION 7
OF THIS AGREEMENT.
SELLER'S INITIALS PURCHASER'S INITIALS
(i) Indemnity and Release.
(1) Indemnity. For the purposes of this Section 7(i), the term "Claims" shall
mean any and all claims, obligations, liabilities, causes of action, suits, debts, liens, damages,
judgments, losses, demands, orders, penalties, settlements, costs and expenses (including,
without limitation, attorneys' fees and costs and any and all costs and expenses related to,
whether directly or indirectly, any and all clean-up, remediation, investigations, monitoring,
abatement, mitigation measures, fines or removal with respect to Hazardous Materials) of any
kind or nature whatsoever. The definition of "Claims" shall include, without limitation, Claims
under contract law or tort law. Purchaser acknowledges that but for Purchaser's agreement to
each and every provision of this Section 7(i), Seller would not have entered into the Agreement.
Purchaser, on behalf of itself, its successors, assigns and successors -in -interest ("Successors"),
shall indemnify, defend, protect and hold Seller and Seller's successors, assigns, partners,
affiliates and members and all their respective officers, directors, shareholders, participants,
partners, affiliates, employees, representatives, invitees and agents (collectively, "Seller Parties")
harmless from and against any and all Claims resulting from, related to, or based upon, whether
directly or indirectly: (i) the breach by Purchaser of any representation, warranty, covenant or
obligation contained in the Agreement, or in any other agreement, document, exhibit or
instrument related hereto or referenced herein; (ii) any Claim or Claims, if the basis of such
Claim or Claims arose on or after the Closing, except as noted in subparagraph (iv) below, and if
the basis of such Claim or Claims arose from, is based upon, relates to or pertains to, whether
directly or indirectly, the operation, management and use of the Property; (iii) any Claim or
Claims which Claim or Claims (or the basis for which) arose from, is based upon, relates to or
pertains to, whether directly or indirectly, any act or omission of Purchaser or any of its
15
Attachment No. 2
employees, agents or representatives; and (iv) (A) any Claim or Claims that relate to the
condition of the Property on or after the Close of Escrow, including any judgment, order or
settlement under or otherwise pursuant to a lawsuit, and (B) any Claim or Claims that relate to
defects in the Property (including, without limitation, patent and latent construction defects),
regardless of whether said defects or the cause of the same arose either before or after the Close
of Escrow, including any judgment, order or settlement under or otherwise pursuant to the
lawsuit. Any defense of any or all of the Seller Parties referenced in this Section 7(i)(1), shall be
at the Purchaser's sole cost and expense and by counsel selected by the Purchaser, subject to the
reasonable approval of the indemnified person, which counsel may, without limiting the rights of
any of the Seller Parties pursuant to the next succeeding sentence of this Section 7(i)(1), also
represent the Purchaser in such investigation, action or proceeding. If any of the Seller Parties
that is being indemnified determines reasonably and in good faith that its defense by the
Purchaser is reasonably likely to cause a conflict of interest or is being conducted in a manner
which is prejudicial to such persons interests, such indemnified person may elect to conduct its
own defense through counsel of its own choosing, subject to the reasonable approval of the
Purchaser, and at the expense of the Purchaser.
(2) Release and 1542 Waiver. Notwithstanding the following or anything to
the contrary set forth in this Agreement, the Seller is not released from any liability to the
Purchaser for fraud or breach of any covenant or warranty set forth in this Agreement. Subject to
the immediately preceding sentence and the Purchaser's right to rely on the Seller's express
representations and warranties set forth in Section 7 hereof, Purchaser for itself and on behalf of
each of its successors and/or assigns (collectively, the "Releasors") by this general release of
known and unknown claims (this "Release") hereby irrevocably and unconditionally release and
forever discharge Seller and each of the Seller Parties (collectively, the "Releasees") or any of
them, from and against any and all Claims of any kind or nature whatsoever, WHETHER
KNOWN OR UNKNOWN, suspected or unsuspected, fixed or contingent, liquidated or
unliquidated which any of the Releasors now have, own, hold, or claim to have had, owned, or
held, against any of the Releasees arising from, based upon or related to, whether directly or
indirectly any facts, matters, circumstances, conditions or defects (whether patent or latent) of all
or any kinds, related to, arising from, or based upon, whether directly or indirectly, the Property,
including without limitation, (i) the physical condition, quality and state of repair of the Property
conveyed, (ii) any latent or patent defect affecting the Property conveyed, and (iii) the presence
of Hazardous Materials in, on, about or under the Property or which have migrated from adjacent
lands to the Property or from the Property to adjacent lands.
Except for Claims for Seller's fraud or the breach of any representations and warranties
of the Seller expressly provided for in Section 7 of this Agreement, Releasors hereby further
agree as follows:
(i) Releasors acknowledge that there is a risk that subsequent to the execution
of this Agreement, Releasors may discover, incur, or suffer from Claims which were unknown or
unanticipated at the time this Release is executed, including, without limitation, unknown or
unanticipated Claims which, if known by Releasors on the date this Release is being executed,
may have materially affected Releasors' decision to execute this Agreement. Releasors
acknowledge that Releasors are assuming the risk of such unknown and unanticipated Claims
16
Attachment No. 2
and agree that this Release applies thereto. Releasors expressly waive the benefits of Section
1542 of the California Civil Code, which reads as follows:
"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."
(ii) Releasors represent and warrant that Releasors have been represented by
independent counsel of Releasors' own choosing in connection with the preparation and review
of the Release set forth herein, that Releasors have specifically discussed with such counsel the
meaning and effect of this Release and that Releasors have carefully read and understand the
scope and effect of each provision contained herein. Releasors further represent and warrant that
Releasors do not rely and have not relied upon any representation or statement made by any of
the Releasees or any of their representatives, agents, employees, attorneys or officers with regard
to the subject matter, basis or effect of this Release.
(iii) Releasors represent and warrant to Releasees that Releasors have not and
shall not assign or transfer or purport to assign or transfer any Claim or Claims or any portion
thereof or any interest therein, and shall indemnify, defend, protect and hold the Releasees
harmless from and against any Claim or Claims based on or arising out of, whether directly or
indirectly, any such assignment or transfer, or purported assignment or transfer.
SELLER'S INITIALS PURCHASER'S INITIALS
It is specifically intended that each of the Seller Parties shall be third party beneficiaries
of this Section 7(i).
(3)
as applicable, the termination of this Agreement.
(j) Waiver of Subrogation; Survival. Purchaser hereby waives any right of
subrogation as to Seller or the Seller Parties. Each and every provision of this Section 7 shall,
except as may be expressly limited in this Section 7, survive the Closing and, as applicable, the
termination of this Agreement, and, but for Purchaser's agreement to each and every provision of
this Section 7, Seller would not have executed this Agreement.
Survival. The provisions of this Section 7(i) shall survive the Closing and,
8. Condemnation of the Property.
(a) If between the Effective Date and the Closing Date, any condemnation or eminent
domain proceeding is commenced that will result in the taking of any part of the Property,
Purchaser may, at Purchaser's election, either:
(1) Terminate this Agreement by giving written or emailed notice to the Seller
and the Escrow Agent (in which event all remaining funds or other things deposited in Escrow
17
Attachment No. 2
by Purchaser, including without limitation, the Deposit, shall be returned to the Purchaser
immediately from Escrow, together with any interest earned thereon and all fees and costs
charged by the Escrow Agent shall be paid one-half (1/2) by the Seller and one-half (1/2) by the
Purchaser; or
(2) Proceed with the Closing with no reduction in the Purchase Price, in
which event the Seller shall assign to the Purchaser all of the Seller's rights, titles and interests to
any award made for the condemnation or eminent domain action.
(b) Notice. If the Seller obtains notice of the commencement of or the threatened
commencement of eminent domain or condemnation proceedings with respect to all of any
portion of the Property, the Seller shall notify the Purchaser in writing.
9. Broker's Commission. The Purchaser and Seller each hereby represents and warrants to
the other that it has not engaged the services of any real estate agent or broker with respect to the
transaction that is the subject of this Agreement. The Purchaser and the Seller each agree that, to
the extent any real estate commission, brokerage commission or finder's fee shall be earned or
claimed in connection with this Agreement or the Closing, the payment of such fee or
commission, and the defense of any action in connection therewith, shall be the sole and
exclusive obligation of the party who requested (or is alleged to have requested) the services of
the broker or finder. In the event that any claim, demand or cause of action for any such
commission or finder's fee is asserted against the party to this Agreement who did not request
such services (or is not alleged to have requested such services), the party through whom the
broker or finder is making the claim shall indemnify, defend (with an attorney of the
indemnitee's choice). protect and hold harmless the other from and against any and all such
claims, demands and causes of action and expenses related thereto, including, without limitation,
attorneys' fees and costs. The provisions of this Section 9 shall survive the Closing or
termination of this Agreement.
10. Assignment. The Purchaser shall not assign any of its rights or delegate any of its duties
under this Agreement without the prior written consent of the Seller, which consent may be
withheld or granted in Seller's sole and absolute discretion; provided, however, the Purchaser
may assign this Agreement to an entity in which the Purchaser has a controlling or majority
interest without the prior written consent of the Seller provided Purchaser and such assignee
execute an assignment agreement in form and substance reasonably acceptable to Seller.
11. Notices. All notices under this Agreement shall be in writing and sent (a) by certified or
registered mail, return receipt requested, in which.case notice shall be deemed delivered three (3)
Business Days after deposit, postage prepaid in the United States Mail, (b) overnight by a
nationally recognized overnight courier such as UPS Overnight, or FedEx, in which case notice
shall be deemed delivered one (1) Business Day after deposit with that courier, (c) by personal
delivery, in which case notice shall be deemed delivered upon the actual date of delivery, or (d)
by email, in which case notice shall be deemed delivered upon the actual date of delivery. All
notices shall be delivered to the following addresses:
18
If to Purchaser:
If to Seller:
Copy to:
Attachment No. 2
Community Development Commission -Housing Authority
of the City of National City
Attn: Alfredo Ybarra
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: alfredoy@nationalcityca.gov
City of National City
Attn: Brad Raulston
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: baulston@nationalcityca.gov
Christensen & Spath LLP
Attention: Walter F. Spath III
550 West C Street, Suite 1660
San Diego, CA 92101
Facsimile No. (619) 236-8307
Email: wfs@candslaw.net
The addresses above may be changed by written notice to the other party; provided
however, that no notice of a change of address shall be effective until actual receipt of the notice.
12. Risk of Loss.
(a) Damage or Destruction. Subject to the provisions of this Section 12(a), the risk of
loss or damage to the Property until the close of Escrow will be borne by Seller. Upon the
occurrence of any damage to or destruction of the Property, Seller shall within thirty (30) days
after the occurrence of such damage or destruction give written notice to Purchaser ("Damage
Notice") specifying the estimated cost to repair or restore the Property and an estimate of the
insurance proceeds, if any, that will be available with respect to such damage or destruction. The
close of Escrow shall be appropriately delayed to provide adequate time for Seller to give the
Damage Notice and Purchaser to make its election provided for below.
(b) Damage in Excess of $100,000. If prior to the close of Escrow there is damage to
or destruction of the Property that will cost in excess of One Hundred Thousand Dollars
($100,000) to repair or restore, Purchaser shall have the right by written notice given to Seller
within ten (10) days of Purchaser receiving the Damage Notice, to elect to: (i) close Escrow in
such damaged condition, in which event the Purchase Price shall not be reduced (but the Seller
shall be obligated to pay the deductibles under the applicable insurance policy or policies) and
Seller shall not be obligated to repair or restore the Property and all insurance proceeds shall be
assigned and payable to Purchaser, and if Seller receives any such insurance proceeds, they shall
be immediately remitted by Seller to Purchaser at Closing or, if received by Seller after Closing,
promptly after receipt; (ii) terminate this Agreement, in which event the Deposit and all interest
19
Attachment No. 2
accrued thereon shall be immediately returned to Purchaser, and neither party shall have any
further rights or obligations to the other party, except neither party shall be relieved of any
obligations provided for in this Agreement which expressly survives its termination.
(c) Damage of $100,000 or Less. If prior to the close of Escrow there is damage to or
destruction of the Property that will cost One Hundred Thousand Dollars ($100,000) or less to
repair or restore, Purchaser shall nevertheless close Escrow with the Property in such damaged
condition, the Purchase Price shall not be reduced (but the Seller shall be obligated to pay the
deductibles under the applicable insurance policy or policies) and Seller shall not be obligated to
repair or restore the Property, and all insurance proceeds shall be assigned and payable to
Purchaser, and if Seller should receive any such insurance proceeds, they shall be immediately
remitted to Purchaser.
13. Proration. Real property taxes and assessments and utility costs, and other expenses of
operating the Property (provided, however, no proration shall be made with regard to any capital
improvements) shall be prorated as of the close of Escrow. Seller shall pay all documentary
transfer taxes. Seller shall pay all real property taxes and assessments applicable to the period
prior to the close of Escrow, and if any such taxes are unpaid after the close of Escrow, then
Seller shall pay them promptly and in any event within ten (10) days after Purchaser's request
(which shall include a copy of the relevant tax bill).
14. General Provisions.
(a) Governing Law. This Agreement shall be interpreted and construed in
accordance with California law, without regard to any choice of law principles.
(b) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
(c) Captions. The captions in this Agreement are inserted for convenience of
reference and in no way define, describe or limit the scope or intent of this Agreement or any of
the provisions of this Agreement.
(d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective legal representatives, successors, heirs and permitted assigns.
(e) Modifications; Waiver. No waiver; modification, amendment, discharge or
change of this Agreement shall be valid unless it is in writing and signed by the party against
which the enforcement of the modification, waiver, amendment, discharge or change is sought.
(f) Entire Agreement. This Agreement contains the entire agreement between the
parties relating to Purchaser's acquisition of the Property from the Seller and all prior or
contemporaneous agreements, understandings, representations or statements, oral or written, are
superseded.
20
Attachment No. 2
(g) Partial Invalidity. Any provision of this Agreement which is unenforceable,
invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of
this Agreement shall have no effect, but all the remaining provisions of this Agreement shall
remain in full effect.
(h) Survival. Provisions of this Section 19 shall survive the Closing or the
termination of this Agreement.
(i) No Third -Party Rights. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties to this Agreement and their respective
successors and assigns, any rights or remedies.
(j) Time of Essence. Time is of the essence in this Agreement.
(k) Attorneys' Fees. The parties agree that the prevailing party in litigation for the
breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled
to their expert witness fees, if any, as part of their costs of suit, and attorneys' fees as may be
awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5
and any other applicable provisions of California law, including, without limitation, the
provisions of CCP Section 998. All claims, disputes, causes of action or controversies shall be
subject solely to the jurisdiction of the San Diego Superior Court, Downtown Branch.
(1) Relationship. Nothing contained in this Agreement shall be deemed or construed
by the parties or by any third person to create a relationship of principal and agent or partnership
or a joint venture between the Purchaser and the Seller or between any of them and any third
party.
(m)
Recording. Neither this Agreement nor a memorandum hereof shall be recorded.
(n) Purchaser Approval. Where this Agreement refers to an action or approval of the
Purchaser, it shall mean the approval of the Community Development Executive Director of the
Purchaser, or designee, unless otherwise provided.
(o) Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are
hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits
are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated
in this Agreement by this reference.
(p) Independent Counsel. Seller and Purchaser each acknowledge that: (a) they have
been given the opportunity to be represented by independent counsel in connection with this
Agreement; (b) they have executed this Agreement with the advice of such counsel, if such
counsel was retained; and (c) this Agreement is the result of negotiations between the parties
hereto and the advice and assistance of their respective counsel, if such counsel was retained.
The fact that this Agreement was prepared or negotiated by Purchaser's or Seller's counsel as a
matter of convenience shall have no import or significance. Any uncertainty or ambiguity in this
21
Attachment No. 2
Agreement shall not be construed against either party due to the fact that Purchaser's or Seller's
counsel prepared or negotiated this Agreement in its final form.
(q) Tolling of Deadlines. Any periods of time, deadlines or time or day limitations
set forth in this Agreement, including without limitation, the Due Diligence Period, the deadline
for Closing, the deadline for making the Deposit, shall all be automatically extended by one (1)
Business Day for each Business Day that the Seller fails to timely provide any notice, report,
materials, studies, documentation or other information required by this Agreement.
(r) Capacity and Authority. All individuals signing this Agreement for a party which
is a corporation, limited liability company, partnership or other legal entity, or signing under a
power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, represent
and warrant that they have the necessary capacity and authority to act for, sign and bind the
respective entity or principal on whose behalf they are signing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
PURCHASER:
Community Development Commission -Housing Authority of the City of National City
By:
Leslie Deese, Executive Director
Approved as to Form:
By:
Claudia Gacitua Silva
General Counsel
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
22
SELLER:
City of National City
By:
Ron Morrison, Chairman
Approved as to Form:
By:
Claudia Gacitua Silva
City Attorney
23
Attachment No. 2
Attachment No. 2
EXHIBIT "A"
PROPERTY LEGAL DESCRIPTION
Real property in the City of National City, County of San Diego, State of California, described as
follows:
Parcel 1:
Lots 1 to 22 inclusive of Block 107; and Lots 1 to 22 inclusive of Block 108 of National City, in
the City of National City, County of San Diego, State of California according to map thereof no.
348 filed in the Office of the County Recorder of San Diego County October 2, 1882;
Together with that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21St
Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of
Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April
8, 1963 as file no. 59590 of Official Records;
And those portions of the Unnamed Alley lying within Blocks 107 and 108 of said map no. 348
as set forth in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City
of National City) recorded May 12, 1969 as file no. 82961 of Official Records
Parcel 2:
Lots 7 to 16 inclusive of Block 85 of National City, in the City of National City, County of San
Diego, State of California according to map thereof no. 348 filed in the Office of the County
Recorder of San Diego County October 2, 1882, excepting therefrom that portion of land as set
forth in that certain Corporation Grant Deed recorded November 20, 1964 as file no. 211364 of
Official Records.
In addition, that portion of Coolidge Avenue between 20th Street and 22 Street, and 21 st Street
between Harding Avenue and Hoover Avenue as set forth in that certain Order of Vacation
(Resolution No. 8338 of the City Council of the City of National City) recorded April 8, 1963 as
file no. 59590 of Official Records;
And those portions of the Unnamed Alley lying within Block 85 of said map no. 348 as set forth
in the certain Order of Vacation (Resolution No. 9816 of the City Council of the City of National
City) recorded May 12, 1969 as file no. 82961 of Official Records.
Parcel 3:
Lots 1 to 22 inclusive of Block 86 of National City, in the City of National City, County of San
Diego, State of California according to map thereof no. 348 filed in the Office of the County
Recorder of San Diego County October 2, 1882.
In addition, that portion of Coolidge Avenue between 20th Street and 22nd Street, and 21 st
Street between Harding Avenue and Hoover Avenue as set forth in that certain Order of
24
Attachment No. 2
Vacation (Resolution No. 8338 of the City Council of the City of National City) recorded April
8, 1963 as file no. 59590 of Official Records;
And the Unnamed Alley lying within Block 86 of said map no. 348 as set forth in the certain
Order of Vacation (Resolution No. 9816 of the City Council of the City of National City)
recorded May 12, 1969 as file no. 82961 of Official Records
APN: 559-124-05-00, 560-391-08-00, and 560-396-06-00
25
Attachment No. 2
Exhibit "B"
GRANT DEED
26
Attachment No. 2
Exhibit "C"
LEASE
27
Attachment No. 3
PROMISSORY NOTE
(Westside TOD Affordable Site)
("Note")
National City, California August , 2013
1. Principal; No Interest. For value received and in consideration of the Purchase and Sale
Agreement (Westside TOD Affordable Site) dated as of August 20, 2013 ("Agreement"), by and
between the City of National City ("Seller") and Community Development Commission -Housing
Authority of the City of National City ("Maker"), Maker promises to pay to Seller, or order, at
1243 National City Boulevard, National City, California 91950-4397, or such other place as the
holder may from time to time designate by written notice to Maker, the principal sum of Four
Million Nine Hundred Forty -One Thousand and No/100 Dollars ($4,941,000.00). This Note shall
not bear interest. All capitalized terms which are not defined herein shall have the meaning
ascribed to them in the Agreement.
2. Term of Loan, Due Date and Right of Prepayment. Payments shall be due and payable as
follows:
(a) The Maker intends to ground lease Parcel 1 and Parcel 2, as such terms are defined
in the Agreement, and make one or more residual receipts loans to the developers of Parcel 1 and
Parcel 2. Those ground leases may or may not require annual ground rent payments to be made to
the Maker. Those residual receipts loans will require the developers of Parcel 1 and Parcel 2 to
make annual payments to the Maker based on the residual receipts generated by the operations on
Parcel 1 and Parcel 2, if any. The Maker shall pay to the Seller an amount equal to the amount
received from the developers of Parcel 1 and Parcel 2 (whether from ground rent or residual
receipts payments) within ten (10) business days of Maker's receipt of the same. The Maker shall
have no obligation to make any payments to Seller hereunder, unless and until the Maker receives
funds from the developers of Parcel 1 and Parcel 2.
(b) If all amounts otherwise payable hereunder are not paid in full within sixty-five
(65) years from the date first set forth above, all principal shall be due and payable.
(c) This Note shall be payable in full upon acceleration of this Note pursuant to the
provisions of Paragraph 4 of this Note.
(d) This Note shall be payable in full upon the conveyance of all or any part of the fee
interest in Parcel 1 or Parcel 2.
(e) This Note may be prepaid in whole or in part at any time and, from time to time,
without notice or penalty. Any prepayment shall be allocated first to unpaid interest, if any, and
then to principal.
3. Unsecured Note. This Note shall be unsecured.
1
Attaclunent No. 3
4. Acceleration Upon Default. Notwithstanding Section 2, above, or anything contained
herein to the contrary, in the event of: (i) any default in the performance of any of the terms,
covenants and conditions contained in this Note or the Agreement, in each case after the expiration
of applicable cure periods, or (ii) in the event of the filing of a bankruptcy proceeding by or against
Maker which is not dismissed within ninety (90) days thereafter, then all sums owing by Maker to
the Seller shall at the option of the Seller immediately become due and payable. These remedies
shall be in addition to any and all other rights and remedies available to the Seller, either at law or
in equity.
5. Costs Paid by Maker. Maker agrees to pay the following costs and expenses incurred by
the holder of this Note, or adjudged by a court: (a) reasonable costs, expenses and attorneys' fees
paid or incurred in connection with the collection or enforcement of this Note, whether or not suit
is filed; and (b) costs of suit and such sum as the court may adjudge as attorneys' fees in any action
to enforce payment of this Note or any part of it.
6. Payment and Interest Calculation. Payments shall be applied to interest first, if any, and
then to any unpaid principal balance.
7. Recourse Note. In any action brought to enforce the obligations of Maker under this Note,
the judgment or decree shall be enforceable against Maker.
8. Late Charge. If any installment due hereunder is not paid within fifteen (15) days from the
date due. Maker promises to pay a "late charge" of $100.00 to defray the expense incident to
handling any such delinquent payment or payments.
9. Severability. If any provision of this Note is determined to be void by court of competent
jurisdiction, such determination shall not affect any other provisions of this Note, and such other
provisions shall remain in full force and effect.
10. Non -Waiver. No delay in demanding or failure to demand performance hereunder shall
constitute a waiver by the holder of its right to subsequently demand such performance or to
exercise any remedies for any default hereunder. Further, in order to be effective, any waiver of
any of the Seller's rights and remedies hereunder must be in a writing signed by the Seller. Further
waiver by the Seller of any right hereunder shall not constitute a waiver of any other right,
including but not limited to the right to exercise any and all remedies for a different or subsequent
event of default.
Maker:
Community Development Commission -Housing Authority of the City of National City
By:
Print Name:
Its:
2
Attachment No. 3
Recording Requested By And When
Recorded Mail To And Mail Tax
Statements To:
City of National City
1243 National City Boulevard
National City, CA 91950
This document is exempt from payment of a recording fee
pursuant to Government Code Section 6103.
GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
City of National City
hereby grant to
Community Development Commission -Housing Authority of the City of National
City
the real property in the County of San Diego, State of California, described on Exhibit "A"
attached hereto and incorporated herein. This grant deed is recorded to pursuant to the authority
granted by the City of National City, as referenced within City of National City board report
, and City of National City Resolution No. , adopted on
August 20, 2013.
City of National City
By: Dated: August _, 2013
Ron Morrison, Mayor
Approved as to Form:
By:
Claudia Gacitua Silva
City Attorney
1
ACKNOWLEDGMENT
State of California
County of San Diego
Attachment No. 3
On , 2013, before me, , notary public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his authorized capacity, and that by his
signature on the instrument the person, or the entity on behalf of which the person acted,
executed the instrument.
1 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)
2
Attachment No. 3
ACCEPTANCE
This is to certify that the interest(s) in real property conveyed by this instrument to the
Community Development Commission -Housing Authority of the City of National City are
hereby accepted by the undersigned officer on behalf of the Community Development
Commission -Housing Authority of the City of National City, pursuant to the authority conferred
by City of National City Resolution No. on August 20, 2013, and the grantee
consents to recordation thereof by its duly authorized officer.
Community Development Commission -Housing Authority of the City of National City
By: Dated: August _, 2013
Leslie Deese, Executive Director
Approved as to Form:
By:
Claudia Gacitua Silva
General Counsel
ACKNOWLEDGMENT
State of California
County of San Diego
On , 2013, before me, , notary public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his authorized capacity, and that by his
signature on the instrument the person, or the entity on behalf of which the person 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)
3
Attachment No. 3
EXHIBIT "A"
The land referred to herein is situated in the State of California, County of San Diego, City of
National City and described as follows:
PARCEL 1:
THAT CERTAIN PARCEL OF LAND SITUATE IN THE CITY OF NATIONAL CITY, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, BEING A PORTION OF LOTS 1 TO 10, INCLUSIVE, IN
BLOCK 175 OF NATIONAL CITY ACCORDING TO MAP THEREOF NO, 348 FILED OCTOBER 2,
1882, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AND A
PORTION OF THE SOUTHEASTERLY HALF OF THE CLOSED PORTION OF 17TH STREET
ABUTTING UPON SAID LOT 1, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST EASTERLY CORNER OF SAID LOT 10 IN BLOCK 175, SAID
CORNER BEING IN THE NORTHWESTERLY LINE OF 18TH STREET AS SHOWN ON SAID
MAP; THENCE SOUTHWESTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LOT 10, A
DISTANCE OF 42.00 FEET TO A LINE PARALLEL WITH AND DISTANT 17.00 FEET
NORTHEASTERLY, MEASURED AT RIGHT ANGLES, FROM THE CENTER LINE OF SAN
DIEGO & ARIZONA EASTERN RAILWAY COMPANY'S MAIN TRACT (SAN DIEGO-SAN
YSIDRO); THENCE NORTHWESTERLY ALONG SAID PARALLEL LINE. 290.00 FEET TO THE
CENTER LINE OF SAID 17TH STREET; THENCE NORTHEASTERLY ALONG SAID CENTER
LINE, 48.00 FEET TO THE NORTHWESTERLY PROLONGATION OF THE NORTHEASTERLY
LINE OF SAID LOT I IN BLOCK 175; THENCE SOUTHEASTERLY ALONG SAID
PROLONGATION AND THE NORTHEASTERLY LINE OF SAID LOTS 1 TO 10, A DISTANCE OF
290.00 FEET TO THE POINT OF BEGINNING.
TOGETHER WITH THAT PORTION OF THE SOUTHWESTERLY 1/2 OF THE ALLEY
ADJOINING SAID LOTS 6 THROUGH 10 ON THE NORTHEAST AS VACATED AND CLOSED
TO PUBLIC USE.
EXCEPT THAT PORTION OF SAID LAND LYING BELOW A DEPTH OF 500.00 FEET,
MEASURED VERTICALLY, FROM THE CONTOUR OF THE SURFACE OF SAID PROPERTY;
IIOWEVER, GRANTOR. OR ITS SUCCESSORS AND ASSIGNS, SHALL NOT HAVE THE RIGHT
FOR ANY PURPOSE WHATSOEVER TO ENTER UPON, INTO OR THROUGH THE SURFACE OF
SAID PROPERTY OR ANY PART THEREOF LYING BETWEEN SAID SURFACE AND 500.00
FEET BELOW SAID SURFACE, AS EXCEPTED IN THE DEED RECORDED FEBRUARY 7, 1980.
AS FILE NO. 80-044143.
PARCEL 2:
LOTS 13, 14, 15, 16 AND 17 IN BLOCK 115 OF NATIONAL CITY, IN THE CITY OF NATIONAL
CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF
NO. 348, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
OCTOBER 2, 1882.
EXCEPTING FROM SAID LOT 13, THE SOUTHERLY 20 FEET THEREOF, TOGETHER WITH
THAT PORTION OF THE NORTHEASTERLY 1/2 OF THE ALLEY ADJOINING SAID LOTS 14
THROUGH 17 AND THE REMAINDER PORTION OF LOT 13 ON THE SOUTHWEST AS
VACATED AND CLOSED TO PUBLIC USE.
4
Attachment No. 3
PARCEL 3:
LOTS 18 AND 19 IN BLOCK 175 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF NO.
348, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY.
APN: 559-086-13-00, 559-086-12-00, 559-086-05-00, and 559-086-03-00
5
Attachment No. 4
MONTH -TO -MONTH LEASE
(Public Works Yard-Westside TOD Affordable Site, National City, 91950)
THIS MONTH -TO -MONTH LEASE ("Lease") is dated as of the 30th day of August, 2013,
by and between the Community Development Commission -Housing Authority of the City of
National City ("Landlord"), and the City of National City ("Tenant").
1. Definitions.
"Commencement Date" means August 30, 2013.
"Landlord" means the Community Development Commission -Housing Authority of the
City of National City.
"Premises" means the approximately 6.29 acres of real property in the City of National
City, bounded by 19t Street, Harding Avenue, 22nd Street and Hoover Avenue.
"Rent Commencement Date" means August 30, 2013.
"Tenant" means the City of National City.
"Term" shall have that meaning ascribed to it in Section 3 of this Lease.
2. Lease of the Premises; "As -Is" Condition. Landlord leases to Tenant and Tenant leases
from Landlord the Premises on a triple net basis. Tenant hereby agrees and acknowledges that
Tenant is leasing the Premises "As -Is" from Landlord, without relying on any communications not
set forth herein that may have been made by Landlord, or any of Landlord's agents or employees,
with respect to the Premises or Tenant's intended use thereof. Without limiting the generality of
the foregoing, Tenant shall be solely responsible for determining the condition of the Premises.
Landlord shall have no obligation to improve the Premises.
3. Month -to -Month Lease. This Lease shall commence on the Commencement Date and shall
continue on a month -to -month basis and shall terminate on the earlier of: (i) thirty (30) days written
notice from Landlord to Tenant; (ii) thirty (30) days written notice from Tenant to Landlord; or
(iii) a date mutually agreed upon by Landlord and Tenant ("Term").
4. Rent.
(a) Monthly Rent. Tenant agrees to pay Landlord rent in the amount of $1.00 per
month each and every month during the Term commencing upon the Rent Commencement Date.
(b) Utilities; Maintenance Costs. This Lease is a triple net lease. Tenant shall be
responsible for the payment of all utilities, taxes, assessments, maintenance costs, trash collection
and all other costs of any kind whatsoever with respect to, arising out of or otherwise associated
with the Premises.
Attachment No. 4
5. Alterations. Neither the Landlord, nor Tenant shall make alterations or other changes to
the Premises.
6. Use.
(a) Continued Use. The Landlord purchased the Premises from the Tenant. The Tenant
may continue to use the Premises in the manner used by the Tenant immediately prior to the sale
of the Premises to the Landlord. Tenant shall keep the Premises in a neat, clean and orderly
condition at all times during the Term, and shall not permit rubbish, waste or garbage, to
accumulate at any time. Tenant shall not commit or permit any waste of the Premises or any acts
to be done in violation of any laws or ordinances. Tenant shall not use or permit the use of the
Premises for any illegal purposes.
(b) Inspection of Premises. Landlord shall have the right to enter upon the Premises at
all reasonable times without abatement of rent. Tenant hereby waives any claim for damages for
any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby. Any entry to the Premises
or portions thereof by Landlord shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive,
of Tenant from the Premises, or any portion thereof. Any such entries upon the Premises by the
Landlord shall be performed with as little disturbance and inconvenience to Tenant as reasonably
possible.
7. Waiver of Subrogation. If either party sustains loss or damage to the Premises or the
fixtures, goods, wares, merchandise or any other property located thereon, from which it is
protected by an insurance policy, then, to the extent that such party is so protected, it waives any
right of recovery from the other party.
8. Assignment and Sublease. Tenant shall not directly or indirectly, voluntarily or by
operation of law, sublease, sell, assign, encumber, pledge or otherwise transfer or hypothecate all
or any part of the Premises or this Lease, without the written consent of Landlord, which may be
withheld by Landlord in its sole and absolute discretion.
9. Attorneys' Fees. If any action shall be instituted by either Landlord or Tenant for the
enforcement or interpretation of any of its rights or remedies in or under this Lease, the prevailing
party shall be entitled to recover from the losing party all costs incurred by the prevailing party in
said action and any appeal therefrom, including reasonable attorneys' fees and court costs to be
fixed by the court therein.
10. Default.
(a) Tenant's Default. The occurrence of any one or more of the following shall
constitute a default hereunder by Tenant:
(1) Tenant abandons the Premises or vacates the Premises for a period of ten
(10) or more consecutive days;
Attachment No. 4
(2) Tenant fails to pay any rent or other charges required to be paid by Tenant
under this Lease and such failure continues for five (5) days after it is due;
(3) Tenant fails to promptly and fully perform any other covenant, condition or
agreement contained in this Lease and such failure continues for ten (10) days (or such shorter
time provided herein) after written notice thereof from Landlord. Such ten (10) day notice shall
be in lieu of and not in addition to any notice required under California Code of Civil Procedure
Section 1161;
(4) A trustee, disbursing agent or receiver is appointed to take possession of all
or substantially all of Tenant's assets or of Tenant's interest in this Lease and Tenant does not
regain possession within ten (10) days after such appointment; Tenant makes an assignment for
the benefit of creditors; or all or substantially all of Tenant's assets in, on or about the Premises or
Tenant's interest in this Lease are attached or levied upon under execution (and Tenant does not
discharge the same within ten (10) days thereafter);
(5) A petition in bankruptcy, insolvency or for reorganization or arrangement
is filed by or against Tenant pursuant to any federal or state statute and, with respect to any such
petition filed against it, Tenant fails to secure a stay or discharge thereof within ten (10) days after
the filing of the same;
(6) Immediately, in the event of any assignment, subletting or other transfer for
which the prior written consent of the Landlord has not been obtained;
(7) immediately, in the event Tenant admits in writing its inability to pay its
debts as they mature; or
(8) Immediately, upon the suspension of Tenant's right to conduct its business,
caused by the order, judgment, decree, decision or other act of any court or governmental agency.
(b) Landlord's Remedies. Upon the occurrence of a default by Tenant that is not cured
by Tenant within any applicable grace period, Landlord shall have the following rights and
remedies in addition to all other rights and remedies available to Landlord at law or in equity:
(1)
with applicable law;
(2) The right and power to enter the Premises and remove therefrom all persons
and property, to store such property in a public warehouse or elsewhere at the cost of and for the
account of Tenant. Before retaking of any such property from storage, Tenant shall pay to
Landlord, upon demand, all expenses incurred in such removal and all storage charges against such
property. Any such property of Tenant not so retaken from storage by Tenant within thirty (30)
days after such property is removed from the Premises shall be deemed abandoned and may be
either disposed of by Landlord pursuant to Section 1988 of the California Civil Code or retained
by Landlord as its own property;
The right to terminate this Lease by giving notice to Tenant in accordance
Attachment No. 4
(3) The right to have a receiver appointed for Tenant, upon application by
Landlord, to take possession of the Premises and to apply any rental collected from the Premises
and to exercise all other rights and remedies granted to Landlord for Tenant pursuant to this Section
10; and
(4) The rights and remedies provided by California Civil Code Section 1951.2
to recover from Tenant upon termination of this Lease;
11. Quiet Enjoyment. Upon payment by Tenant of the rents herein provided, and upon the
observance and performance of all the covenants, terms and conditions on Tenant's part to be
observed and performed, Tenant shall peaceably and quietly hold and enjoy the Premises for the
term hereby demised without hindrance or interruption by Landlord or any other person or persons
lawfully or equitably claiming by, through or under Landlord, subject, nevertheless, to the terms
and conditions of this Lease.
12. Notices. Any notices required or permitted hereunder shall be in writing and delivered in
person to the other party or by a nationally recognized overnight courier such as FedEx, or United
States Certified Mail, Return Receipt Requested, postage fully prepaid, to the addresses set forth
below or to such other address as either party may designate in writing and deliver as provided in
this Section.
Landlord:
Community Development Commission -Housing Authority
of the City of National City
Attn: Alfredo Ybarra
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: alfredoy@nationalcityca.gov
Tenant: City of National City
Attn: Brad Raulston
1243 National City Boulevard
National City, CA 91950
Facsimile No. (619) 336-4286
Email: braulston(anationalcityca.gov
13. Brokers. Landlord and Tenant covenant, warrant and represent that no broker has been
involved in the negotiation or consummation of this Lease. Tenant and Landlord each agree to
indemnify, defend (with an attorney of the indemnitee's choice) and hold the other harmless from
and against all claims, demands, causes of action and liabilities, including (without limitation)
attorneys' fees and costs, arising out of a claim for a commission by any broker purporting to have
acted on behalf of the indemnifying party.
14. Force Majeure. Neither party shall be required to perform any term, covenant or condition
of this Lease so long as such performance is delayed or prevented by force majeure, which shall
Attachment No. 4
mean any acts of God, material restriction by any governmental authority, civil riot, and any other
cause not reasonably within the control of such party and which by the exercise of due diligence
such party is unable, wholly or in part, to prevent or overcome.
15. General Conditions.
(a) Counterparts. This Lease may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
(b) Captions. The captions in this Lease are inserted for convenience of reference and
in no way define, describe or limit the scope or intent of this Lease or any of the provisions of this
Lease.
(c) Partial Invalidity. Any provision of this Lease which is unenforceable, invalid, or
the inclusion of which would adversely affect the validity, legality, or enforcement of this Lease
shall have no effect, but all the remaining provisions of this Lease shall remain in full effect.
(d) No Third -Party Rights. Nothing in this Lease, express or implied, is intended to
confer upon any person, other than the parties to this Lease and their respective successors and
assigns, any rights or remedies.
(e) Time Of Essence. Time is of the essence in this Lease.
(f) Relationship. Nothing contained in this Lease shall be deemed or construed by the
parties or by any third person to create a relationship of principal and agent or partnership or a
joint venture between Landlord and Tenant or between either or both of them and any third party.
(g) Approval. Where this Lease refers to an action or approval of the Landlord, it shall
mean the approval of the Executive Director of the Community Development Commission -
Housing Authority of the City of National City, or designee, unless otherwise provided. Where
this Lease refers to an action or approval of the Tenant, it shall mean the approval of the City
Manager of the City of National City, or designee, unless otherwise provided.
(h) Further Assurances. Landlord and Tenant agree to execute all such instruments and
documents and to take all actions which are reasonably necessary to carry out this Lease or
accomplish its intent.
(i) Incorporation of Prior Agreements. This Lease contains all agreements of Landlord
and Tenant with respect to any matter mentioned, or dealt with, herein. No prior agreement or
understanding pertaining to any such matter shall be binding upon Landlord or Tenant.
(j) Amendment. This Lease may only be amended by written agreement signed by
Landlord and by Tenant.
Attachment No. 4
(k) No Waiver. No waiver by either party of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach of the same or any other
provision. Landlord's consent to or approval of any act shall not be deemed to render unnecessary
obtaining such Landlord's consent to or approval of any subsequent act. No waiver by either party
shall be effective unless it is in writing, executed on behalf of such party.
(1) Consents. All consents to be given by either party shall be reasonably and timely
given.
(m) No Leasehold Mortgages. Tenant shall not encumber its leasehold interest in the
Premises, without the prior written approval of the Landlord.
(n) Nondiscrimination. There shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin or ancestry in the leasing, subleasing, renting, transferring, use,
occupancy, tenure or enjoyment of the Premises, nor shall Tenant itself, or any person claiming
under or through it, establish or permit such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants or vendees in the Premises.
(o) Signature Authority. All individuals signing this Lease for a party which is a
corporation, limited liability company, partnership or other legal entity, or signing under a power
of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the
each other party hereto that they have the necessary capacity and authority to act for, sign and bind
the respective entity or principal on whose behalf they are signing.
IN WITNESS WHEREOF, the parties have executed this Lease.
TENANT:
City of National City
By:
Ron Morrison, Mayor
Approved as to Form:
By:
Claudia Gacitua Silva
City Attorney
LANDLORD:
Community Development Commission -Housing Authority of the City of National City
Attachment No. 4
By:
Leslie Deese, Executive Director
Approved as to Form:
By:
Claudia Gacitua Silva
General Counsel
RESOLUTION NO. 2013-
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING
AUTHORITY OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO
EXECUTE A PURCHASE AND SALE AGREEMENT WITH THE CITY OF NATIONAL CITY
FOR THE PURCHASE OF TWO PARCELS TOTALING 6.299 ACRES, GENERALLY
BOUNDED BY 19TH STREET, HARDING AVENUE, 22ND STREET, AND HOOVER AVENUE,
IN THE CITY OF NATIONAL CITY FOR THE DEVELOPMENT OF 201 AFFORDABLE
HOUSING UNITS AS PHASE I AND II OF THE WESTSIDE INFILL TRANSIT ORIENTED
DEVELOPMENT PROJECT, ACCEPTING A HOME ALLOCATION OF $2,095,492 FROM
THE CITY OF NATIONAL CITY, AUTHORIZING THE USE OF THE HOME ALLOCATION FOR
THE PARTIAL PAYMENT OF THE PROPERTY PURCHASE, AUTHORIZING THE
EXECUTIVE DIRECTOR OR DESIGNEE TO EXECUTE A PROMISSORY NOTE FOR
$4,941,000 PAYABLE TO THE CITY OF NATIONAL CITY TO COMPLETE SAID PURCHASE,
AND APPROVING A MONTH -TO -MONTH LEASEBACK TO THE CITY OF NATIONAL CITY
OF SAID PROPERTY
WHEREAS, the City is the owner of that certain real property (the "Property") in the City of
National City, State of California consisting of two legal parcels ("Parcel 1 and Parcel 2") totaling 6.299
acres, generally bounded by 19th Street, Harding Avenue, 22nd Street, and Hoover Avenue; and
WHEREAS, the Successor Agency to the Community Development Commission as the
National City Redevelopment Agency (Successor Agency) is subject to the enforceable obligation
commonly referred to as the Westside Infill Transit Oriented Development (VVI-TOD) Development and
Disposition Agreement (DDA), entered into June 21, 2011 with Paradise Creek Housing Partners, LP
(Developer); and
WHEREAS, the DDA requires the Property to be acquired for and developed into a 201
unit affordable housing project (the Project), as described in the DDA; and
WHEREAS, the purchase of Parcel 1 and Parcel 2 is being undertaken pursuant to the
requirements of the DDA, as an enforceable obligation of the SA; and
WHEREAS, in accordance with California Health and Safety Code section 34176, the
CDC -HA has accepted the affordable housing functions of the former redevelopment agency pursuant to
resolution number 2012-01; and
WHEREAS, the value of the consideration for the Property, pursuant to proposed
Purchase and Sale Agreement (Agreement) will not be less than the appraised value; and
WHEREAS, appraisals completed within the last 60 days indicate a value of $3,815
million for Parcel I and $3.22 million for Parcel 2, for a total appraised value of the Property of $7,035,000;
and
WHEREAS, the CDC -HA will use $2,095,492 in HOME funds to acquire Parcel I and
the CDC -HA has requested a loan in the amount of $4,941,000 from the City in order to provide full
consideration for the remaining balance of the appraised value of Parcel 1 in the amount of $3,815,000 and
the full appraised value of Parcel 2 in the amount of $3,220,000; and
WHEREAS, the CDC -HA would repay the loan with ground lease income and loan
repayments made by the developer of the Project; and
Resolution No. 2013 —
Page Two
WHEREAS, the Property will continue to be temporarily occupied by City Public Works and
the CDC -HA will provide a month -to -month lease agreement for $1.00 per month until the operation is
relocated to another site; and
WHEREAS, the sale of the Property pursuant to the proposed Agreement will improve
the quality of life of the residents of National City and its visitors through the elimination of blight and the
development of a quality Project in the area by providing for the reuse and redevelopment of a
brownfield site; and
WHEREAS, all actions required by all applicable law with respect to the proposed
Agreement have been taken in an appropriate and timely manner; and
WHEREAS, the CDC -HA has duly considered all terms and conditions of the proposed
Agreement and believes that the purchase of the Property, the allocation and expenditure HOME funds,
the loan, and the month to month lease, are all in the best interests of the CDC -HA and the health,
safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable
state and local law requirements.
NOW, THEREFORE, BE IT RESOLVED that the CDC -HA accepts a HOME Grant
from the City of National City to be used for the acquisition and development of Parcel 1 of the Property and
authorizes the Executive Director or her designee to execute any grant related documents.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the Chairman to execute the
Purchase and Sale Agreement between the City of National City and the Community Development
Commission -Housing Authority of the City of National City for the purchase of 6.299 acres of land for a total
purchase price of $7,035,000. Said Purchase and Sale Agreement is on file with the City Clerk.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the partial payment of the
purchase price from the use of HOME Grant funds in the amount of $2,095,492.
BE IT FURTHER RESOLVED that the CDC -HA authorizes its Executive Director or her
designee to execute any and all loan documents, including a promissory note, necessary for an unsecured
loan of $4,941,000 to the CDC -HA for consideration of value owed ion the purchase price, and as
necessary to fulfill the terms of the Purchase and Sale Agreement, including escrow documents. Said loan
documents, including a promissory note, is on file in the Office of the City Clerk.
BE IT FURTHER RESOLVED that the CDC -HA authorizes the Chairman to execute a
Month -to -Month Lease Agreement for the Property until City Public Works operations are relocated. Said
Lease Agreement is on file in the Office of the City Clerk.
BE IT FURTHER RESOLVED that the CDC -HA determines that the WI-TOD project
was previously addressed in the Final Environmental Impact Report for the Westside Specific Plan (State
Clearinghouse No. 2008071092) which was certified by the City Council on March 16, 2010, thus
satisfying CEQA.
Resolution No. 2013 —
Page Three
PASSED and ADOPTED this 20th day of August, 2013.
Ron Morrison, Chairman
ATTEST: APPROVED AS TO FORM:
Leslie Deese, Secretary Claudia Gacitua Silva
General Counsel