HomeMy WebLinkAbout2018 CON Protea National City LLC - Purchase and Sale Agreement - 130 East 8th Street - Amendment #1I
RATIFICATION OF AND FIRST AMENDMENT
TO
PURCHASE AND SALE AGREEMENT
(East 8th Street and B Avenue)
THIS RATIFICATION OF AND FIRST AMENDMENT TO PURCHASE AND SALE
AGREEMENT (East 8th Street and B Avenue) (this "Amendment") dated as of the 4th day of
September, 2018, by and between the City of National City ("Seller"), and Protea National City,
LLC, a California limited liability company ("Purchaser").
RECITALS
A. The Seller and Purchaser are all of the parties to that certain Purchase and Sale
Agreement, dated as of January 16, 2018 ("Agreement").
B. The Agreement by its terms required "Closing" to occur on or before September
1, 2018, which is prior to the date of this Amendment. The Seller and Purchaser desire for the
Agreement to continue in full force and effect and desire to amend the Agreement as set forth
herein. All terms not defined in this Amendment shall have the meanings set forth in the
Agreement. In the event of any conflict between the Agreement and this Amendment, the terms
of this Amendment shall control.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, Purchaser and Seller hereby amend the Agreement, and agree as follows:
1. Ratification and Revival of Agreement. Each of Seller and Purchaser hereby
ratifies the Agreement, agrees that the Agreement continues in full force and effect, and agrees to
continue to be bound by all terms and conditions set forth in this Agreement, notwithstanding the
September 1, 2018 deadline for the "Closing Date," set forth in in Section 2 of the Agreement.
2. Restatement of Definition of Closing Date. The definition of "Closing Date" set
forth in Section 2 of the Agreement is hereby amended and restated to provide as follows:
"Closing Date" means the close of Escrow as provided herein, which shall be one (1)
Business Day after the latest of: (i) the date all of the Conditions Precedent for the Benefit of the
Seller have been satisfied; and ((ii) the date all of the Conditions Precedent for the Benefit of the
Purchaser have been satisfied. The Closing shall occur on or before March 1, 2019. Purchaser, in
its sole and absolute discretion, shall have the right to accelerate the Closing Date prior to the
issuance of the building permits for the Project, provided the Conditions Precedent for the Benefit
of the Seller have been satisfied. In the event that Purchaser elects to accelerate the Closing Date,
the time period for commencement of construction of the Project pursuant to Section 11 (a) (1)
shall remain 180 days from March 1, 2019. Upon written request of Purchaser, the Deputy City
Manager or designee, on behalf of the Seller, may grant two (2) 90-day extensions of the Closing
Date.
3. Project Modification; Omnibus Amendment to Exhibit B. All references to Exhibit
B, wherever set forth in the Agreement shall mean Exhibit B, as modified by Exhibit B-1 attached
to this Amendment. Exhibit `B" and B-1" shall be read together and form one Exhibit and where
they conflict, and where they conflict, Exhibit "B-1" shall prevail over Exhibit `B".
4. General. Except as expressly amended hereby, the terms and conditions of the
Agreement shall remain unmodified and in full force and effect. This Amendment may be executed
in counterparts, all of which evidence only one agreement, binding on all parties, even though they
are not signatories to the same counterpart. If any term, covenant or condition of this Amendment
or its application to any person or circumstances shall be held to be invalid or unenforceable, the
remainder of this Amendment and the application of such term or provision to other persons or
circumstances shall not be affected, and each term hereof shall be valid and enforceable to the
fullest extent permitted by law. The terms of this Amendment are binding upon and shall inure to
the benefit of the parties and their respective legal representatives, successors and permitted
assigns. This Amendment shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.
SELLER:
PURCHASER:
CITY OF NATIONAL CITY PROTEA NATIONAL CITY, LLC
Leslie Deese, City Manager
APPROVED AS TO FORM:
Angil P. Morris -Jones
City Attorney
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Jeffrey ow, Manager
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EXHIBIT B-1
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8TH AND B
NATIONAL CITY. CA
Site Location
130 East 8th Street
National City, CA 91950
Development Team
Malick I011 Development
Protea Properties
Principal Contact
Andrew Mallck
E: andrew@makc51ohi8 com
T: 619 252 8465
Contact Address
3262 Holiday Ct. 8100
La Jolla. CA 92037
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RESOLUTION NO. 2018 — 150
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE
THE RATIFICATION OF AND FIRST AMENDMENT TO THE REAL
PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS PERTAINING TO THE SALE OF THE PROPERTY
LOCATED AT 130 EAST 8TH STREET IN NATIONAL CITY TO
PROTEA NATIONAL CITY, LLC, ADDING EXHIBIT "B-1" AND
EXTENDING THE CLOSE OF ESCROW FOR 6 MONTHS, EXPIRING
MARCH 1, 2019; AND AUTHORIZING THE CITY MANAGER TO
APPROVE AND EXECUTE UP TO TWO ADDITIONAL AMENDMENTS,
EACH EXTENDING THE TERM OF THE AGREEMENT BY 90-DAYS
WHEREAS, the City owns and desires to sale certain real property located at
130 East 8th Street in National City (the "Property") to Protea National City, LLC, ("Protea") who
was selected through the RFP process; and
WHEREAS, the City and the Protea entered into an Exclusive Negotiating
Agreement on June 20, 2017, and on January 16, 2018, the City entered into a Purchase and
Sales Agreement (the "Agreement") with the Protea to purchase the Property for the appraised
value of $520,000; and
WHEREAS, the close of escrow in the Purchase and Sales Agreement is
September 1, 2018, however, Portea needs more time to obtain building permit approvals,
which is a condition to close escrow; and'
WHEREAS, Exhibit "B-1" is added to the Agreement because modifications to
the design were necessary to maintain financial viability of the Project due to changes in market
conditions that increased construction costs.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the City Manager to execute the Ratification of and First
Amendment to the real property Purchase and Sale Agreement and Joint Escrow Instructions
for the sale of property located at 130 East 8th Street in National City to Protea National City,
LLC, extending the close of escrow for 6 months, expiring March 1, 2019, and adding Exhibit "B-
1" which shall be read together with Exhibit "B" of the Agreement to form one Exhibit, and where
they conflict, Exhibit "B-1" shall prevail over Exhibit "B".
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager
to approve and execute up to two additional amendments, each extending the term of the
Agreement by 90-days.
[Signature Page to Follow]
Resolution No. 2018 — 150
Page Two
PASSED and ADOPTED this 4th day of Sept er, 2018.
on Morrison, Mayor
ATTEST:
Michael R. Ila y Clerk
APPROVED TO FORM:
Angil P. Morris -Jones
City Attorney
Passed and adopted by the Council of the City of National City, California, on
September 4, 2018 by the following vote, to -wit:
Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
w 1 Je7�T r
By:
Mayor of the City of National City, California
City Clerk of the City of National City, California
44C-1,
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2018-150 of the City of National City, California, passed and
adopted by the Council of said City on September 4, 2018.
City Clerk of the City of National City, California
By:
Deputy
CITY OF NATIONAL CITY, CALIFORNIA
COUNCIL AGENDA STATEMENT
MEETING DAit,: September 4, 2018
Cold' //
/R/-/-
AGENDA ITEM NO
i fEM TITLE:
Resolution of the City Council of the City of National City approving and authorizing the City Manager
to execute the Ratification of and First Amendment to a Real Property Purchase and Sale Agreement
and Joint Escrow Instructions pertaining to the sale of the property located at 130 East 8th Street in
National City to Protea National City, LLC, adding Exhibit "B-1" and extending the close of escrow for
6 months, expiring March 1, 2019; and authorizing the City Manager to approve and execute up to two
additional amendments, each extending the term of the Agreement by 90-days.
PREPARED BY: Greg Rose DEPARTMENT: Housing and Econ. Dev.
PHONE: 619-336-4266
EXPLANATION: APPROVED
The City owns certain real property ("Property") located at 130 East 8th Street in National City. The City
selected a proposal by Protea National City LLC ("Developer") through the RFP process and entered
into an Exclusive Negotiating Agreement with the Developer on June 20, 2017. The City entered into a
Purchase and Sales Agreement on January 16, 2018 with the Developer to purchase the Property for
the appraised value of $520,000 and construct the proposed project described in the Developer's
proposal. The close of escrow in the Purchase and Sales Agreement is September 1, 2018. The
Developer needs more time to obtain Building Permit approvals, which is a condition to close escrow.
Changes in market conditions and an increase in construction costs have necessitated modification to
the design to maintain financial viability of the project. These modifications are depicted in Exhibit "B-1 ".
FINANCIAL STATEMENT:
ACCOUNT NO.
APPROVED:
APPROVED:
1
finance
MIS
Subject to the execution of a Compensation Agreement with the Affected Taxing Entities (ATEs), net
proceeds from the sale of the property will be distributed among the ATEs as required by Health and
Safety Code Section 34188. The City will receive 18% of net proceeds from the distribution.
ENVIRONMENTAL REVIEW:
Approval of the property transfer is not a "Project" under section 15378 of the California Environmental
Quality Act ("CEQA") guidelines because the proposed action consists of an administrative activity that
will not result in direct or indirect h physical changes to the environment.
ORDINANCE: INTRODUCTION: 11 FINAL ADOPTION:
STAFF RECOMMENDATION:
Adopt the Resolution.
BOARD / COMMISSION RECOMMENDATION:
n/a
-TTACHMENTS:
1. First Amendment to the Purchase and Sale Agreement
2. Exhibit B-1
3. Purchase and Sales Agreement
4. Resolution
R,toa/id7 n'i 710. g-/3'a
Attachment No. 1
RATIFICATION OF AND FIRST AMENDMENT
TO
PURCHASE AND SALE AGREEMENT
(East 8th Street and B Avenue)
THIS RATIFICATION OF AND FIRST AMENDMENT TO PURCHASE AND SALE
AGREEMENT (East 8th Street and B Avenue) (this "Amendment") dated as of the 4th day of
September, 2018, by and between the City of National City ("Seller"), and Protea National City,
LLC, a California limited liability company ("Purchaser").
RECITALS
A. The Seller and Purchaser are all of the parties to that certain Purchase and Sale
Agreement, dated as of January 16, 2018 ("Agreement").
B. The Agreement by its terms required "Closing" to occur on or before September
1, 2018, which is prior to the date of this Amendment. The Seller and Purchaser desire for the
Agreement to continue in full force and effect and desire to amend the Agreement as set forth
herein. All terms not defined in this Amendment shall have the meanings set forth in the
Agreement. In the event of any conflict between the Agreement and this Amendment, the terms
of this Amendment shall control.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, Purchaser and Seller hereby amend the Agreement, and agree as follows:
1. Ratification and Revival of Agreement. Each of Seller and Purchaser hereby
ratifies the Agreement, agrees that the Agreement continues in full force and effect, and agrees to
continue to be bound by all terms and conditions set forth in this Agreement, notwithstanding the
September 1, 2018 deadline for the "Closing Date," set forth in in Section 2 of the Agreement.
2. Restatement of Definition of Closing Date. The definition of "Closing Date" set
forth in Section 2 of the Agreement is hereby amended and restated to provide as follows:
"Closing Date" means the close of Escrow as provided herein, which shall be one (1)
Business Day after the latest of: (i) the date all of the Conditions Precedent for the Benefit of the
Seller have been satisfied; and ((ii) the date all of the Conditions Precedent for the Benefit of the
Purchaser have been satisfied. The Closing shall occur on or before March 1, 2019. Purchaser, in
its sole and absolute discretion, shall have the right to accelerate the Closing Date prior to the
issuance of the building permit/s for the Project, provided the Conditions Precedent for the Benefit
of the Seller have been satisfied. In the event that Purchaser elects to accelerate the Closing Date,
the time period for commencement of construction of the Project pursuant to Section 11 (a) (1)
shall remain 180 days from March 1, 2019. Upon written request of Purchaser, the Deputy City
Manager or designee, on behalf of the Seller, may grant two (2) 90-day extensions of the Closing
Date.
Attachment No. 1
3. Project Modification; Omnibus Amendment to Exhibit B. All references to Exhibit
B, wherever set forth in the Agreement shall mean Exhibit B, as modified by Exhibit B-1 attached
to this Amendment. Exhibit `B" and "B-1" shall be read together and form one Exhibit and where
they conflict, and where they conflict, Exhibit `B-1" shall prevail over Exhibit `B".
4. General. Except as expressly amended hereby, the terms and conditions of the
Agreement shall remain unmodified and in full force and effect. This Amendment may be executed
in counterparts, all of which evidence only one agreement, binding on all parties, even though they
are not signatories to the same counterpart. If any term, covenant or condition of this Amendment
or its application to any person or circumstances shall be held to be invalid or unenforceable, the
remainder of this Amendment and the application of such term or provision to other persons or
circumstances shall not be affected, and each term hereof shall be valid and enforceable to the
fullest extent permitted by law. The terms of this Amendment are binding upon and shall inure to
the benefit of the parties and their respective legal representatives, successors and permitted
assigns. This Amendment shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written.
SELLER: PURCHASER:
CITY OF NATIONAL CITY PROTEA NATIONAL CITY, LLC
a California limited liability company
Leslie Deese, City Manager
APPROVED AS TO FORM:
Angil P. Morris -Jones
City Attorney
Andrew Malick, Manager
Jeffrey Essakow, Manager
Attachment N Exhibit B-1
CONCEPT VALIDATION SET
MAY 30 2018
8TH AND B
NATIONAL CITY, CA
Site Location
130 East 8th Street
National City, CA 9195(1
Development Team
Mahck Initll Development
Protea Properties
Principal Contact
Andrew Mallck
Et andrew@malickinf ll.con)
T: 619 252. 8465
Contact Address
3262 Holiday Ct. #100
La Jolla, CA 92037
MILLER
MALICK
,FILL DEVELOPMENT
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Attachment No. 3
PURCHASE AND SALE AGREEMENT
(East 8th Street and B Avenue)
THIS PURCHASE AND SALE AGREEMENT (East 8th Street and B Avenue) (this
"Agreement") dated as of the day of January, 2018, by and between the City of National
City ("Seller"), and Protea National City, LLC, a California limited liability company
("Purchaser").
RECITALS
A. Seller owns the fee interest in that certain real property generally located at East
8th Street and B Avenue, with an address of 130 East 8th Street in the City of National City,
County of San Diego, California, which is legally described on Exhibit A attached hereto and
made a part hereof (the "Property").
B. Seller and Purchaser desire: (i) for Seller to sell the Property to Purchaser at fair
market value, and for Purchaser to purchase the Property from Seller; and (ii) for Purchaser to
develop the Property by constructing the project substantially as described on Exhibit B attached
hereto and made a part hereof ("Project").
C. Seller agrees to sell the Property to Purchaser for an amount equal to its current
fair market value of Five Hundred Twenty Thousand and No/100 Dollars ($520,000.00) (the
"Purchase Price") (which is the fair market value of the Property as determined by that certain
appraisal dated October 6th, 2017, performed by Brad C. Woodall, MAI). The Purchase Price
shall be payable by Purchaser to Seller in cash at Closing.
D. Seller's sale of the Property to Purchaser and Purchaser's purchase of the Property
and construction of the Project on the Property pursuant to the terms of this Agreement, are in
the vital and best interest of the City of National City and the health, safety, morals and welfare
of its residents, and in accord with the public purposes and provisions of applicable state and
local laws and requirements under which the redevelopment of the Project has been undertaken.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which
are acknowledged, Purchaser and Seller hereby agree as follows:
1. Effectiveness of Agreement and Purchase and Sale.
(a) Effectiveness of Agreement. This Agreement shall be effective and binding upon
all parties hereto concurrently with the last to occur of the following (the "Effective Date"): (i)
this Agreement has been duly executed by Purchaser and delivered by Purchaser to Seller; (ii)
this Agreement has been formally approved by resolution of the Seller's board; and (iii) this
Agreement has been duly executed by Seller and delivered by Seller to Purchaser. Under no
circumstances will this Agreement be effective before all of the preceding have occurred.
Attachment No. 3
(b) Purchase and Sale of the Properly. In consideration of the mutual covenants set
forth in this Agreement, and on the terms and conditions set forth herein, Seller agrees to sell the
Property to Purchaser, and Purchaser agrees to purchase the Property from Seller on the terms
and conditions set forth herein. Purchaser is purchasing the Property "As -Is" and without
warranty. At Closing, Seller shall convey to Purchaser title to the Property by recordation of the
Grant Deed. The Escrow Agent shall issue the Title Policy (as defined below) to the Purchaser
at Closing.
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.
"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 occur on
the Closing Date.
"Closing Date" means the close of Escrow as provided herein, which shall be one (1)
Business Day after the latest of: (i) the date all of the Conditions Precedent for the Benefit of the
Seller have been satisfied; and (ii) the date all of the Conditions Precedent for the Benefit of the
Purchaser have been satisfied. The Closing shall occur on or before September 1st, 2018.
Purchaser, in its sole and absolute discretion, shall have the right to accelerate the Closing Date
prior to the issuance of the building permit/s for the Project, provided the Conditions Precedent
for the Benefit of the Seller have been satisfied, provided the Conditions Precedent for the
Benefit of the Seller have been satisfied.
"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(a) of this Agreement.
"Due Diligence Period" means the period of time commencing on the Effective Date and
ending at 5:00 p.m. Pacific time on March 1st, 2018.
"Effective Date" is as defined in Section 1(a) of this Agreement, which may or may not
be the date this Agreement was executed and delivered by the Seller or the Purchaser.
Attachment No. 3
"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, 7676 Hazard Center
Drive, Suite 1400, San Diego CA 92108.
"Grant Deed" means a duly executed and acknowledged grant deed conveying fee simple
title to the Property from Seller to Purchaser.
"Hazardous Materials" means any hazardous or toxic substance, material or waste which
is or becomes regulated by any local governmental authority, the State of California or the
United State Government. Provided, however, the term "Hazardous Materials" shall not include
substances typically used in the ordinary course of developing, operating and maintaining
apartment complexes in California or small amounts of chemicals, cleaning agents and the like
commonly employed in routine household uses in a manner typical of occupants in other similar
properties, provided that such substances are used in compliance with applicable laws.
"Immediately Available Funds" means a bank wire transfer or a certified bank or
cashier's check.
"Permitted Exceptions" means (i) the printed exceptions and exclusions in the Title
Policy; (ii) the exceptions to title set forth in Schedule B to the Title Report (as defined in
Section 4(c) below) which are approved by Purchaser in writing, or deemed approved by
Purchaser, as provided in Section 4(c) below; (iii) real property taxes and assessments which are
a lien but not yet payable; (iv) any title exceptions caused, consented to or preapproved by
Purchaser; and (v) all applicable building, zoning and use restrictions and/or regulations of any
municipality, township, county or state; (vii) defects that would be shown by an inspection or by
a survey of the Real Property; and (viii) any reserved oil, water and/or mineral rights.
"Project" means the development project described on Exhibit B attached hereto, which
the Purchaser intends to construct at the Property. Seller acknowledges and agrees that,
notwithstanding anything to the contrary contained in this Agreement, Purchaser shall have the
right, in its sole and absolute discretion, and at its sole cost and expense, to utilize the California
government code sections 65915-65918 and any cross referenced and chaptered bills for the
purposes of adapting the project to market conditions.
"Property" means that certain real property generally located at East 8th Street and B
Avenue, with an address of 130 East 8th Street in the City of National City, County of San Diego,
California, which is legally described on Exhibit A attached hereto and made a part hereof.
"Purchase Price" shall have the meaning set forth in Section 3 of this Agreement.
"Purchaser" means Protea National City, LLC, a California limited liability company.
"Seller" means the City of National City.
Attachment No. 3
"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 the
Escrow Agent. Seller shall pay the cost of the CLTA Owner's Policy of Title Insurance.
Purchaser shall pay the cost of any endorsements it desires. Purchaser may obtain an ALTA
Owner's Policy of Title Insurance in which event Purchaser shall pay the cost difference between
the cost of the ALTA Owner's Policy of Title Insurance and the cost of a CLTA Owner's Policy
of Title Insurance.
3. Purchase Price. The purchase price for the Property shall be Five Hundred Twenty
Thousand and No/100 Dollars ($520,000.00). Provided, however, if the Purchaser for whatever
reason, does not to construct the alley closure and pocket park substantially as described on
Exhibit B, hereto, then the Purchaser, in its reasonable discretion, shall allocate an amount not to
exceed One Hundred Thousand and No/100 Dollars ($100,000.00) and use these monies for the
enhancement of the public realm between the bounds of the Property and behind the limits of the
curb face of 8th Street, B Street, and 9th Street respectively (the `Enhancement"). The
Enhancement may include, but not be limited to providing street furniture, parklets, public art,
awnings or street lighting. The Municipal review process for approving how the Enhancement
funds are apportioned shall be separate and independent from the review process for the Project
and shall in no way delay the forward progression of the Project development within the bounds
of the Property.
(a) Deposit. Purchaser shall make a deposit into Escrow of Immediately Available
Funds in the amount of Five Thousand and No/100 Dollars ($5,000.00) (the "Deposit") within
three (3) Business Days of the Effective Date. The Deposit shall be refundable until the
expiration of the Due Diligence Period. If the Purchaser elects to terminate this Agreement prior
to expiration of the Due Diligence Period, as set forth in Section 4, below, then upon receipt of
written notice from the Seller and the Purchaser, the Escrow Agent shall return the Deposit to the
Purchaser, plus any interest earned thereon. 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.
(b) 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) AND ALL INTEREST
THEREON AS LIQUIDATED DAMAGES (AND, THE SELLER WAIVES ANY RIGHT TO
SPECIFICALLY ENFORCE THIS AGREEMENT SET FORTH IN CALIFORNIA CIVIL
CODE SECTION 1680 OR 3389); PROVIDED, HOWEVER THAT ANY AMOUNTS
DEPOSITED BY THE PURCHASER INTO ESCROW WHICH EXCEED THE DEPOSIT,
SHALL BE RETURNED BY THE ESCROW AGENT TO THE PURCHASER (EXCEPT TO
THE EXTENT NECESSARY TO PAY THE PURCHASER'S SHARE OF ANY ESCROW
FEES AND COSTS). 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; (ii) THE
Attachment No. 3
OBLIGATION OF THE PURCHASER TO PAY AMOUNTS INTO ESCROW TO PAY THE
FEES AND COSTS OF ESCROW; (iii) THE INDEMNITIES SET FORTH IN THIS
AGREEMENT; AND (iv) ATTORNEYS' FEES. 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. 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) SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
(c) Purchaser's Remedies. If the Closing and the consummation of the transactions
herein contemplated do not occur by reason of any default by Seller under this Agreement, or if
prior to Closing any one or more of Seller's representations or warranties are breached in any
material respect and Purchaser was not aware of such breach of such representations and
warranties prior to the end of the Due Diligence Period, then, Purchaser shall elect, as its sole
remedy, to:
(i) waive said failure or breach and proceed to the Closing; or
(ii) terminate this Agreement by giving Seller written notice of such election
prior to the Closing Date and recover from: (A) Escrow Agent and/or Seller, the entire Deposit
and interest then held by Escrow Agent and/or Seller; and (B) Seller, Purchaser's Third -Party
Expenses (as defined below), not to exceed $5,000.00; or
(iii) enforce specific performance; provided, however, as conditions precedent
to Purchaser's right to enforce specific performance against Seller (including the filing of a lis
pendens or other claim or lien against the Property), all of the following must first have occurred:
(A) a suit for specific performance must be filed by Purchaser in a proper court in the county in
which the Property is located by the 15th day following the scheduled Closing Date;
(B) Purchaser must have either deposited with Escrow Agent the Purchase Price, or provided
Seller with clear documentary evidence that Purchaser has immediately available liquid funds in
an amount sufficient to fund the Purchase Price; and (C) Purchaser must have fully performed all
of its material obligations under this Agreement necessary to permit the Closing to occur in
accordance with the terms of this Agreement and waived all closing conditions for Purchaser's
benefit. Purchaser hereby waives any and all rights Purchaser may have to obtain specific
performance and to file a lis pendens or any other claim or lien against the Property unless and
Attachment No. 3
until the express conditions precedent set forth above in this clause (iii) have been satisfied.
For purposes hereof, "Purchaser's Third Party Expenses" shall mean the actual out-of-
pocket expenses incurred by Purchaser and paid to (1) Purchaser's attorneys in connection with
the negotiation of this Agreement, (2) unrelated and unaffiliated third party consultants in
connection with the performance of examinations, inspections and/or investigations pursuant to
Section 4, and/or (3) potential lenders as non-refundable commitment fees and other amounts in
connection with acquisition financing for the Property.
IN NO EVENT SHALL (X) SELLER HAVE ANY LIABILITY FOR ANY
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES FOR ANY CLAIM, CAUSE OF
ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON
LAW, STATUTE, EQUITY OR OTHERWISE, AND/OR (Y) SELLER'S DIRECT OR
INDIRECT PARTNERS, SHAREHOLDERS, MEMBERS, OWNERS OR AFFILIATES, ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY
AFFILIATE OR CONTROLLING PERSON THEREOF (COLLECTIVELY, THE "SELLER
PARTIES") HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER
LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY
OR OTHERWISE.
(d) 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 the Purchase Price, minus the Deposit
and any interest earned on the Deposit, and plus or minus any adjustments for prorations and
expenses required under this Agreement.
(e) 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 hereunder.
4. Due Diligence.
(a) Due Diligence Period. At any time during the Due Diligence Period, the
Purchaser may determine in the Purchaser's sole and absolute discretion, whether to proceed
with the purchase of the Property. During the Due Diligence Period, the Purchaser may
terminate this Agreement for any reason or for no reason at all by delivering written notice of
such termination to the Seller and Escrow Agent on or before the last day of the Due Diligence
Period. After expiration of the Due Diligence Period, the Purchaser's right to terminate this
Agreement for any reason, or for no reason at all, shall expire and the Deposit shall become
nonrefundable. If this Agreement is terminated during the Due Diligence Period, then: (i) all
rights and liabilities of the Purchaser and the Seller with respect to this Agreement shall
immediately terminate, except for rights and liabilities that specifically survive such termination;
(ii) Escrow Agent shall return to the Purchaser all funds or other things deposited in Escrow by
the Purchaser, less any fees and costs charged by the Escrow Agent for which Purchaser is liable
under this Agreement; and (iii) Escrow Agent shall return to the Seller all funds or other things
Attachment No. 3
deposited in Escrow by the Seller. On or prior to the Effective Date, Seller shall deliver to
Purchaser (or made available to Purchaser electronically via website drop box or other account)
and copies of those documents listed on Exhibit C attached hereto ("Property Information"). All
of such Property Information delivered to, made available to, copied and/or reviewed by
Purchaser pursuant to this Section 4(a) shall sometimes be referred to herein as the "Property
Documents".
(b) Access to the Property. During the Due Diligence Period and during normal
business hours, upon not less than twenty-four (24) hours advance notice to the Seller, Purchaser
and its representatives, consultants and attorneys shall have access to the Property solely for the
purpose of conducting visual, non-invasive inspections of the Property. Purchaser shall cause
each of its contractors entering the Property to maintain not less than One Million Dollars
($1,000,000.00) commercial liability insurance coverage covering such entry, shall provide
evidence of such insurance to Seller upon request, and defend and shall indemnify the Seller and
the Seller's agents and employees and the Property from and against, and shall hold the Seller,
the Seller's agents and employees and the Property harmless from, any actions, losses, costs,
damages, claims and/or liabilities, including but not limited to, mechanics' and materialmen's
liens and attorney fees, proximately caused by the actions of Purchaser and/or its contractors or
agents upon the Property. The Purchaser shall repair any damage caused to the Property by the
Purchaser or its agents, employees or contractors. The Purchaser shall not permit any
mechanic's, materialman's, contractor's, subcontractor's or other lien arising from any work
done by the Purchaser or its agents pursuant to this Agreement to stand against the Property. If
any such lien shall be filed against the Property, the Purchaser shall cause the same to be
discharged or bonded by payment, deposit, bond or otherwise, within ten (10) days after actual
notice of such filing. The Purchaser's obligations under this Section 4(b) shall survive the
termination or expiration of this Agreement. Notwithstanding anything to the contrary contained
in this Section 4(b), if Purchaser desires to do any invasive testing at the Property, the Purchaser
may do so only after obtaining Seller's prior written consent to the same, which consent may be
withheld or granted on conditions in Seller's sole and absolute discretion. . The Purchaser shall
promptly restore the Property to the condition the Property was in immediately prior to any such
tests, at the Purchaser's sole cost and expense. Prior to any invasive testing, the Purchaser shall
provide the Seller with a complete set of plans, drawings and specifications ("Invasive Testing
Plans") that define to the sole satisfaction of the Seller the invasive testing to be performed on
the Property and the names of all environmental and other consultants, contractors and
subcontractors who will be performing such invasive testing (collectively "Purchaser's
Consultants"). The Purchaser shall deliver the names of the Purchaser's Consultants and the
Invasive Testing Plans to the Seller concurrently with its request to the Seller that the Purchaser
desires to perform invasive testing.
(c) Title. Purchaser's obligation to purchase the Property is contingent upon
Purchaser's approval of all matters affecting title to or use of the Real Property (collectively,
"Title Matters"). The intent of this Section 4(c) is to allow the parties to have certainty regarding
the condition of title and the Title Matters which are acceptable to the Purchaser. The procedure
set forth in this Section 4(c) shall not affect or otherwise limit the Purchaser's right to terminate
this Agreement for any reason or no reason at all as set forth in Section 4, above. Seller shall use
commercially reasonable efforts to cause the Title Company to deliver to Purchaser within three
Attachment No. 3
(3) Business Days of the Effective Date, a current preliminary title report for the Real Property
and, to the extent possible, legible copies of all documents referred to therein ("Title Report").
Purchaser shall have ten (10) Business Days thereafter, to approve or object to any items
disclosed by the Title Report. If Purchaser does not give written notice to Seller of Purchaser's
approval or disapproval of any items disclosed by the Title Report within said time period, then
Purchaser shall be deemed to have approved the items disclosed by the Title Report. If
Purchaser gives written notice to Seller of Purchaser's disapproval of any items disclosed by the
Title Report within said time period and Seller does not give written notice to Purchaser within
five (5) Business Days thereafter of either: (i) Seller's elimination of or agreement to eliminate
those disapproved matters prior to the close of Escrow; or (ii) Seller's agreement to provide at
Seller's sole expense such title insurance endorsements relating thereto as are acceptable to
Purchaser in Purchaser's sole discretion prior to the close of Escrow (each, a "Cure Notice"),
then this Agreement shall terminate immediately, unless Purchaser affirmatively agrees in
writing within five (5) Business Days thereafter that this Agreement will remain in full force and
effect and that the previously disapproved items disclosed by the Title Report are approved by
Purchaser. If the Title Company issues a supplemental title report prior to the close of Escrow
showing additional exceptions to title ("Title Supplement"), Purchaser shall have five (5)
Business Days from the date of receipt of the Title Supplement and a copy of each document
referred to in the Title Supplement in which to give Seller written notice of disapproval as to any
additional exceptions; provided, however, Purchaser may not disapprove any exceptions that
were contained in the original Title Report or are otherwise Permitted Exceptions. Purchaser's
failure to deliver any such written notice of disapproval of the Title Supplement within such five
(5) Business Day period shall be deemed to mean that Purchaser has approved all such additional
exceptions. If Purchaser disapproves any additional exception shown in the Title Supplement,
then Purchaser and Seller will have the same rights and obligations set forth above in this Section
regarding Purchaser's original review and approval of the Title Report. Notwithstanding the
foregoing, Seller shall cause all Title Matters which are mechanics' liens or deeds of trust to be
eliminated as exceptions to title on the Title Policy at Seller's sole expense prior to the close of
Escrow, and shall not record any documents against the Property from and after the Effective
Date without Purchaser's prior written consent.
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 by Seller by either: (i) 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 set forth in this Section 5 are not satisfied by the deadlines 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. If such matter remains unsatisfied or the default remains uncured after the
expiration of such ten (10) Business Day period, then this Agreement Instructions shall terminate
Attachment No. 3
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 5, then: (w) as set forth
in the liquidated damages provision of Section 3(b), 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; (x) Escrow Agent shall deliver the Deposit and all
interest thereon to the Seller and shall return to the Seller all funds or other things deposited in
Escrow by the Seller; (y) Escrow Agent shall return to the Purchaser all funds or other things
deposited in Escrow by the Purchaser, less the Deposit and all interest thereon, and less all fees
and costs charged by the Escrow Agent. Notwithstanding the preceding clause (w) of this
Section 5, in the event of termination of this Agreement pursuant to this Section 5, the Seller and
the Purchaser 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. The Conditions Precedent for the Benefit of the Seller are:
(a) Purchaser making the Deposit into Escrow, as set forth in Section 3(a), above.
(b) The delivery by the Purchaser into Escrow, at least one (1) Business Day prior to
Closing of Immediately Available Funds equal to the Purchase Price (less the Deposit and plus
or minus expenses and prorations) as required by Section 3(c) above.
(c) The delivery by the Purchaser into Escrow at least one (1) Business Day prior to
Closing of all other documents and instruments required by this Agreement or reasonably
required by Escrow to complete the 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, and all of the
Purchaser's representations and warranties under this Agreement being true and correct as of the
Closing Date.
(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) Seller, using its best commercially reasonable efforts, having entered into a
"compensation agreement" binding upon all taxing authorities having an interest in the Property,
which is acceptable to the Seller in its sole discretion, by not later than February 15, 2018.
Seller acknowledges and agrees that, notwithstanding anything to the contrary contained in this
Agreement, Purchaser shall have the right, in its sole and absolute discretion, and at its sole cost
and expense, to utilize California government code sections 65915-65918 and any cross
referenced and chaptered bills for the purposes of adapting the project to market conditions.
Attachment No. 3
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 by
email from the Purchaser to the Seller and Escrow Agent or in 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 (10t) Business Day. In the event of termination of this
Agreement (and by operation of law the Escrow) pursuant to this Section 6, then: (w) the same
shall be a default by the Seller; (x) Escrow Agent shall return to the Seller all funds or other
things deposited in Escrow by the Seller; (y) Escrow Agent shall upon receipt of unilateral notice
from the Purchaser, return to the Purchaser all funds or other things deposited in Escrow by the
Purchaser; and (z) all fees and costs charged by the Escrow Agent shall be paid 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 any default by Seller hereunder.
Notwithstanding the foregoing clause (w) of this Section 6, in the event of termination of this
Agreement pursuant to this Section 6, 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 6. The Conditions
Precedent for the Benefit of Purchase are:
(a) The deposit by the Seller into Escrow at least one (1) Business Day prior to
Closing of the Grant Deed, duly executed and acknowledged, conveying fee simple title to the
Property to the Purchaser.
(b) The deposit by the Seller into Escrow at least one (1) Business Day prior to
Closing of the Assignment, duly executed, conveying title to the Personal Property to the
Purchaser.
(c) The deposit by Seller into Escrow at least one (1) Business Day prior to Closing
of a duly executed affidavit in the form prescribed by federal regulations that Seller 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.
(d) The deposit by Seller into Escrow at least one (1) Business Day prior to Closing
of a duly executed California Form 593(c) or other evidence that withholding of any portion of
Attachment No. 3
the Purchase Price is not required by the Revenue and Taxation Code of California with respect
to Seller.
(e) The deposit by the Seller into Escrow at least one (1) Business Day prior to
Closing of all additional documents and instruments as are reasonably required by the Escrow
Agent to complete the Closing.
(f) 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 the Permitted Exceptions.
(g) 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, and all of Seller's
representations and warranties under this Agreement being true and correct as of the Closing
Date.
(h) Seller acknowledges that as at date of this Agreement, the Project has passed the
Seller's third -party conformance review, attached here as Exhibit C, and Seller anticipates that
the Project as currently described on Exhibit B will not be subject to discretionary review,
provided, however, a final determination cannot be made until the project plans are submitted to
the Seller's building department. Nothing contained herein shall be construed to be a waiver by
the Seller of its right to review the Project's building plans for the purposes of conformance with
California Building Code requirements.
7. Representations, Warranties and Covenants; 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 for a period of three (3) months.
(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.
(c) Representations and Warranties Pertaining to Legal Matters. The Seller hereby
represents and warrants to the Purchaser that:
(1) The Seller is the sole owner of the fee title interest to the Real Property.
Attachment No. 3
(2) To the current actual knowledge of Seller, there is no pending or
threatened proceeding in eminent domain or otherwise involving the Property, which
would materially adversely affect the Property, or any portions thereof.
(d) Seller Representations and Warranties Pertaining to Options. As of the Effective
Date, Seller hereby represents and warrants to the Purchaser that no person has any option or
right of first refusal to purchase Seller's interest in the Property or any parts thereof.
(e) Knowledge of Seller. For purposes of this Section 5, Seller's "knowledge" shall
mean only the actual personal knowledge of Brad Raulston and City of National City Property
Agent Greg Rose as of the Effective Date, and Seller's "written notice" shall only mean notices
sent to the attention of Brad Raulston and City of National City Property Agent Greg Rose. The
foregoing does not imply and shall not be deemed to require Seller's independent investigation.
Without limiting the generality of the foregoing, Purchaser shall be solely responsible for
determining the condition of the Property and all aspects regarding the fees, charges and
assessments relating to the Property.
(f) Seller Representations and Warranties Regarding Discovery of New Information.
The Seller hereby represents and warrants to the Purchaser that if the Seller discovers any
information or facts prior to Closing that would materially change any of the foregoing
representations and warranties or cause any of the foregoing representations and warranties to be
untrue or misleading in any respect, the Seller will promptly give the Purchaser notice of those
facts and information.
(g) 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 FOR 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 THE PROPERTY,
INCLUDING BUT NOT LIMITED 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 IS 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,
Attachment No. 3
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
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; AND/OR (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). 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 EXPRESS COVENANT, REPRESENTATION OR WARRANTY SET FORTH IN THIS
AGREEMENT.
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
HEREUNDER (IT BEING ACKNOWLEDGED AND AGREED THAT PURCHASER SHALL
BE DEEMED TO HAVE INSPECTED EACH APARTMENT UNIT WITHIN THE
Attachment No. 3
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. 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 THE REPRESENTATIONS AND WARRANTIES SET
FORTH 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.
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 SAN
DIEGO 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
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 THE REPRESENTATIONS AND WARRANTIES SET FORTH IN 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
Attachment No. 3
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
SET FORTH IN THIS AGREEMENT.
(h) Indemnity and Release.
(1) Indemnity. For the purposes of this Section 7(h), 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, reasonable 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. Each and every provision of this Section 7(h)
shall survive the Closing. Purchaser acknowledges that but for Purchaser's agreement to each
and every provision of this Section 7(h), Seller would not have entered into the Agreement.
Purchaser, on behalf of itself, its successors, assigns and successors -in -interest ("Successors"),
hereby agrees to indemnify, defend and hold Seller and Seller's successors, assigns, officers,
directors, shareholders, participants, members, managers, partners, affiliates, employees,
representatives, invitees and agents (collectively, "Seller Parties") harmless from 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 clause (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 negligent act or omission
of Purchaser; 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, patent 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(h)(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(h)(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
Attachment No. 3
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. Purchaser hereby waives any right of subrogation as to Seller or the Seller Parties.
Each and every provision of this Section 7 shall survive the Closing and but for Purchaser's
agreement to each and every provision of this Section 7, Seller would not have executed the
Agreement. Purchaser's indemnification obligations under this Section are in addition to
Purchaser's representations, waivers, releases and covenants under this Section 7, and shall in no
way be deemed to limit same.
(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 set forth in this Agreement or any breach of
Seller's representations and warranties set forth in this Section 7. Subject to the immediately
preceding sentence and the Purchaser's right to rely on the Seller's representations and
warranties set forth in this Section 7, Purchaser for itself and on behalf of each of its successors
(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, or (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 covenants provided in this
Agreement or any breach of Seller's representations and warranties set forth in this Section 7,
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
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."
Attachment No. 3
(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, 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.
8. Condemnation of the Property.
(a) Condemnation. If between the Effective Date and the Closing Date, any
condemnation or eminent domain proceedings are commenced that will result in the taking of
any material 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 and have Seller assign to Purchaser all of
Seller's right, title and interest to any award made for the condemnation or eminent domain
action.
(b) Notice. If Seller obtains notice of the commencement of or the threatened
commencement of eminent domain or condemnation proceedings with respect to the Property,
Seller shall notify the Purchaser in writing.
9. Broker's Commission. Seller and Purchaser each hereby represents and warrants to one
another that neither of them has engaged the services of any real estate agent or broker. Seller
and Purchaser each agree that, to the extent any real estate commission or brokerage and/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 the services of the broker and/or
finder. In the event that any claim, demand or cause of action or brokerage and/or finder's fee is
asserted against the party to this Agreement who did not request such services, the party through
whom the broker or finder is making the claim shall indemnify, defend (with an attorney of the
Attachment No. 3
indemnitee's choice) 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.
10. No Assignment by Purchaser. The qualifications and identity of Purchaser are of
particular concern to the Seller. It is because of those qualifications and identity that Seller has
entered into this Agreement with Purchaser. During the period commencing upon the Effective
Date and until Certificates of Occupancy are issued for all of the Project, the Purchaser may
assign this Agreement to an entity in which the Purchaser has at least a fifty percent (50%)
interest without the prior written consent of the Seller. Except as otherwise set forth in the
immediately preceding sentence, during the period commencing upon the date of this Agreement
and until Certificates of Occupancy are issued for all of the Project, no voluntary or involuntary
successor in interest of Purchaser shall acquire any rights or powers under this Agreement, nor
shall Purchaser make any total or partial sale, transfer, conveyance, assignment, subdivision,
refinancing or lease of the whole or any part of the Property or the Project without prior written
approval of the Seller, which approval shall not be unreasonably withheld or delayed. Any
proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease
of the whole or any part of the Property or the Project, during the period commencing upon date
of this Agreement and until Certificates of Occupancy for all of the Project, without the prior
approval of Seller, will entitle Seller to its right of reentry and revesting as set forth in Section 11
hereof. For the reasons cited above, Purchaser represents and agrees for itself, each member of
Purchaser and any successor in interest of Purchaser that prior to issuance by the City of National
City of Certificates of Occupancy for all of the Project and without the prior written approval of
Seller (which shall not unreasonably be withheld conditioned or delayed), there shall be no
change in the membership, management, control, or ownership or in the relative proportions
thereof, or with respect to the identity of the parties in control of Purchaser or the degree thereof,
by any method or means other than such changes occasioned by the death or incapacity of any
individual prior to issuance of Certificates of Occupancy for all of the Project. Purchaser shall
promptly notify Seller of any and all such changes whatsoever. In such event, this Agreement
may be terminated by Seller, entitling Seller to its right of reentry and revesting as set forth in
Section 11 hereof.
11. Reentry and Revesting of Title in Seller After Closing.
(a) Conditions to Reentry and Revesting. Seller has the right, at its election, to
reenter and take possession of the Property, with all improvements thereon, and terminate this
Agreement and vest the Property in the Seller if after the Closing and prior to the issuance of the
Certificates of Occupancy for all of the Project, any of the following occurs, without the prior
written approval of Seller:
(1) Purchaser fails to commence construction of the Project within one
hundred eighty (180) days after Closing.
(2) Purchaser abandons or substantially suspends construction of the Project
required by this Agreement for a period of ninety (90) days after written notice thereof from
Seller. This provision shall not apply if the Project is suspended and the business of Purchaser is
Attachment No. 3
temporarily interrupted due to strikes, fire, or similar extraordinary causes beyond Purchaser's
control; provided, however, Purchaser shall use its reasonable best efforts to eliminate the cause
for such interruption and return to normal Project operations as expeditiously as is reasonably
possible.
(3) Purchaser, without Seller's prior written approval (which approval shall
not unreasonably be withheld conditioned or delayed), alters the Project in a manner that varies
materially from the design of the same at the time of Closing, including without limitation
alterations to the use of the Property as a residential project, the number of dwelling units,
number or size of parking spaces, type of dwelling units, architecture, appearance, facades or
landscaping. Seller acknowledges and agrees that, notwithstanding anything to the contrary
contained in this Agreement, Purchaser shall have the right, in its sole and absolute discretion,
and at its sole cost and expense, to utilize the State density bonus in order to expand and/or
change the scale of the Project.
(4) Except as otherwise set forth in Section 10, above, Purchaser conveys or
transfers or suffers any involuntary conveyance or transfer of the Property prior to issuance by
the City of National City of Certificates of Occupancy for all of the Project.
(5)
with creditors.
Purchaser files for bankruptcy or enters into an insolvency arrangement
(6) Purchaser fails to obtain Certificates of Occupancy for all of the Project on
or before three (3) years of the Closing Date. This provision shall not apply if the Project is
suspended and the business of Purchaser is interrupted due to strikes, fire, or similar
extraordinary causes beyond Purchaser's control; provided, however, Purchaser shall use its
reasonable best efforts to eliminate the cause for such interruption and return to normal Project
operations as expeditiously as is reasonably possible.
(7) Except as otherwise set forth in Section 10, above, there is a change
(voluntary or involuntary) in the membership, management, control, or ownership of Purchaser
or in the relative proportions thereof, or with respect to the identity of the parties in control of
Purchaser or the degree thereof, by any method or means, other than such changes occasioned by
the death or incapacity of any individual prior to issuance of Certificates of Occupancy for all of
the Project, which was not approved in writing by Seller prior to such event (which approval
shall not unreasonably be withheld conditioned or delayed).
(b) Limitations on Right of Reentry. Seller's right to reenter, terminate and revert the
Property shall be subject to Seller providing Purchaser with written notice and be limited by and
shall not defeat, render invalid or limit any mortgage or deed of trust consented to by Seller in a
writing recorded against the Property.
(c) Resale By Seller After Revesting. Upon the revesting in Seller of title to the
Property as provided in this Section 11, Seller shall, pursuant to its responsibilities under state
law, use its reasonable efforts to resell the Property as soon and in such manner as Seller shall
find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it
Attachment No. 3
exists or may be amended, to a qualified and responsible party or parties (as determined by Seller
in its sole and absolute discretion) who will assume the obligation of making or completing the
Project, or such improvements in their stead as shall be satisfactory to Seller in its sole and
absolute discretion and in accordance with the uses specified for the Property or part thereof in
the Redevelopment Plan. Seller may resell the Property to such persons, for such amounts and
on such terms and conditions as reasonably determined by Seller, provided that any sale of the
Property for an amount insufficient to pay-off all mortgages or deed of trust recorded against the
Property which were consented to by Seller in writing, shall be subject to the approval of the
beneficiaries of such deeds of trust.
(d) Seller Entitled to All Resale Proceeds. Upon such resale of the Property by
Seller, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering
the Property which is permitted by this Agreement, shall be solely the property of the Seller.
(e) Rights and Remedies are Cumulative. The rights established in this Section 11
are not intended to be exclusive of any other right, power or remedy, but each and every such
right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy authorized herein or now or hereafter existing at law or in equity. The
rights are to be interpreted in light of the fact that Seller will have conveyed the Property to
Purchaser for redevelopment purposes, particularly for development of the Project and not for
speculation.
(fj Inaction Not a Waiver of Default. Any failures or delays by Seller in asserting
any of its rights and remedies under this Section 11 shall not operate as a waiver of any default
by Purchaser or of any such rights or remedies, or deprive Seller of its right to institute and
maintain any actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies shall govern the interpretation and enforcement of this Agreement.
(g) Agreement Affecting Real Property. At Closing, the Seller and Purchaser shall
cause an agreement affecting real property, in a form reasonably acceptable to both the Seller
and the Purchaser, against the Property securing the conditions of this Section 11. The Seller
shall subordinate such agreement affecting real property to the Purchaser's financing security
instruments.
12. 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 (unless changed by written notice to the
other persons given in accordance with this Section 11:
To Seller:
Copy to:
To Purchaser:
Copy to:
13. General Provisions.
City of National City
1243 National City Boulevard
National City, California 91950
Attn: Brad Raulston
Email: braulston@nationalcityca.gov
Office of the City Attorney
1243 National City Boulevard
National City, California 91950
Attn: Roberto M. Contreras
Email: rcontreras@nationalcityca.gov
Christensen & Spath LLP
550 West C Street, Suite 1660
San Diego, California 92101
Attn. Walter F. Spath, Esq.
Email: wfs(aicandslaw.net
Protea National City, LLC
2358 University Avenue, #1765
San Diego, California 92104
Attn: Andrew Malick
Email: andrew@malickinfill.com
Protea Properties, LLC
3262 Holiday Court, Suite 100
La Jolla, California 92037
Email: Jeffrey Essakow
Email: jessakow@proteaproperties.com
Attachment No. 3
(a) Governing Law. This Agreement shall be interpreted and construed in
accordance with California law.
(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.
Attachment No. 3
(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.
(0 Entire Agreement. This Agreement contains the entire agreement between the
parties relating to Purchaser's acquisition of the Property from Seller and development of the
Property 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; No Merger. This Agreement, including without limitation, all
representations, warranties, covenants, agreements, indetnnities and other obligations of Seller
and Purchaser in this Agreement, shall survive the Closing of this transaction and will not be
merged into the Grant Deed or any other document.
(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 reasonable 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 Purchaser and Seller or between either or both of them and any third
party.
(m) Recording. This Agreement shall not be recorded by one party without the
consent of the other party.
(n) Seller Approval. Where this Agreement refers to an action or approval of the
Seller, it shall mean the approval of the Executive. Director of the Seller, or designee, unless
otherwise provided.
Attachment No. 3
(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: (i) they have
been given the opportunity to be represented by independent counsel in connection with this
Agreement; (ii) they have executed this Agreement with the advice of such counsel, if such
counsel was retained; and (iii) 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) 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 to the other party 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.
SELLER:
City of National City
By:
Leslie Deese, City Manager
APPROVED AS TO FORM:
Angil P. Morris -Jones, City Attorney
By:
Roberto M, Contreras
Deputy City Attorney
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
Attachment No. 3
PURCHASER:
Protea National City, LLC, a California li liability company
By: Protea N . ' . . al City, LL_/
MOW Af
41414n
��1er
By:
By:
A
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/
Jeffrey Essakow 1 anager
24
Attachment No. 3
Exhibit A
Legal Description of the Property
All that certain real property situated in the City of National City, County of San Diego, State of
California, described as follows:
Attachment No. 3
Exhibit B
Description of the Project
Attachment No. 3
Exhibit C
Property Information
Attachment No. 1
Exhibit B-1
Project Modifications
RESOLUTION NO. 2018 —
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE
THE RATIFICATION OF AND FIRST AMENDMENT TO THE REAL
PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS PERTAINING TO THE SALE OF THE PROPERTY
LOCATED AT 130 EAST 8TH STREET IN NATIONAL CITY TO
PROTEA NATIONAL CITY, LLC, ADDING EXHIBIT "B-1" AND
EXTENDING THE CLOSE OF ESCROW FOR 6 MONTHS, EXPIRING
MARCH 1, 2019; AND AUTHORIZING THE CITY MANAGER TO
APPROVE AND EXECUTE UP TO TWO ADDITIONAL AMENDMENTS,
EACH EXTENDING THE TERM OF THE AGREEMENT BY 90-DAYS
WHEREAS, the City owns and desires to sale certain real property located at
130 East 8th Street in National City (the "Property") to Protea National City, LLC, ("Protea") who
was selected through the RFP process; and
WHEREAS, the City and the Protea entered into an Exclusive Negotiating
Agreement on June 20, 2017, and on January 16, 2018, the City entered into a Purchase and
Sales Agreement (the "Agreement") with the Protea to purchase the Property for the appraised
value of $520,000; and
WHEREAS, the close of escrow in the Purchase and Sales Agreement is
September 1, 2018, however, Portea needs more time to obtain building permit approvals,
which is a condition to close escrow; and'
WHEREAS, Exhibit "B-1" is added to the Agreement because modifications to
the design were necessary to maintain financial viability of the Project due to changes in market
conditions that increased construction costs.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the City Manager to execute the Ratification of and First
Amendment to the real property Purchase and Sale Agreement and Joint Escrow Instructions
for the sale of property located at 130 East 8th Street in National City to Protea National City,
LLC, extending the close of escrow for 6 months, expiring March 1, 2019, and adding Exhibit "B-
1" which shall be read together with Exhibit "B" of the Agreement to form one Exhibit, and where
they conflict, Exhibit "B-1" shall prevail over Exhibit "B".
BE IT FURTHER RESOLVED that the City Council authorizes the City Manager
to approve and execute up to two additional amendments, each extending the term of the
Agreement by 90-days.
[Signature Page to Follow]
Resolution No. 2018 —
Page Two
PASSED and ADOPTED this 4th day of September, 2018.
Ron Morrison, Mayor
ATTEST:
Michael R. Dalla, City Clerk
APPROVED AS TO FORM:
Angil P. Morris -Jones
City Attorney
CITY OF NATIONAL CITY
Office of the City Clerk
1243 National City Blvd., National City, California 91950-4397
619-336-4228
Michael R. Dalla, CMC - City Clerk
PROTEA NATIONAL CITY
REAL PROPERTY PURCHASE AND SALE AGREEMENT
130 E. 8TH STREET
Ratification of and First Amendment
Greg Rose (Housing & Economic Development) forwarded a fully executed
duplicate original Agreement to Protea National City.