02-06-2001 - Sales Agreement with Mr. Virgil Butler (2)TO: Daniel G. Hobbs, City Manager
and City Council
FROM: Thomas M. Mayer
Public Works Director/City Engineer
City of West Covina
r Memorandum
AGENDA
ITEM NO. C-8b
DATE February 6, 2001
SUBJECT: SALES AGREEMENT WITH MR VIRGIL BUTLER
SUMMARY: The City Council authorized staff to prepare a Sales Agreement to purchase a
1.44 acre vacant lot adjacent to the Maverick ball field from Mr. Virgil Butler.
That Sales Agreement is now ready for City Council approval.
BACKGROUND:
The City Council authorized staff to negotiate a Sales Agreement with Mr. Virgil Butler for his
vacant lot that is northerly of and adjacent to the Maverick ball field. That Sales Agreement is in
accordance with the terms previously presented to the City Council which includes a lump sum
payment of $248,000 and a sharing of the closing costs. This lot will be combined with the
adjacent 10 acres owned by Valencia Heights Water Company, which will then be subdivided
resulting in Valencia Heights Water Company having two lots (0.33 acre and 1.67 acres) totaling
2 acres with access and water line easements to them and the City having one lot with
approximately 9.4 acres as schematically indicated on the attached sketch. The City lot will
include the existing equestrian and baseball facilities.
DISCUSSION:
The acquisition of the 1.44 acre lot owned by Mr. Butler makes it possible for the City to provide
Valencia Heights Water Company with 2 acres of land while retaining sufficient remaining land to
continue the equestrian and baseball uses. As agreed with Mr. Butler, the City will pay him
$248,000 for a financially unencumbered ownership of his 1.44 acre parcel. In addition, the City
will pay for the title and environmental research since they are also necessary for the City's Parcel
Map to combine and resubdivide the Butler and Valencia parcels. The City will also pay for its
legal costs in pursuing this sale. The remainder of the closing costs will be shared by Mr. Butler
and the City. The purchase price is directly proportional to the agreed purchase price for the
Valencia Heights Water Company property.
The City's Parcel Map relative to these parcels has been conditionally approved by the City
Planning Commission. The final Parcel Map is being processed with City Council approval
anticipated in March 2001. Staff will attempt to expedite this process although it is primarily
controlled by the County Engineer. If the map is not finalized before the expiration on March 31,
2001 of the current lease extension, a final extension of the lease will be before the City Council
when a more accurate completion date is known.
OPTIONS:
If the City desires to retain the Maverick Field and Ridgeriders improvements, there is no option to
the purchase of the Butler property.
FISCAL IMPACT:
There is no identified restrictive source available to fund this purchase. Due to the long-term nature
of this acquisition, the use of General Fund Reserves (Account No. 110-300) is proposed. The
purchase price plus the other associated costs are not expected to exceed a total of $260,000. The
City Council has previously budgeted $220,000 for this purchase ($208,000 for land cost plus
$12,000 in associated costs) and an additional $40,000 is necessary to cover the increase in land
cost. The increased cost for the Butler properly is due to the increase in the agreed price of the
Valencia Heights Water Company property.
WUPITEMBLDE'S FILMAGENDA - 2001\Sales Agreement with Virgil Butler_Revised.doc2000-106a
11 t
Daniel G. Hobbs, City Manager
and City Council
Page 2 — February 6, 2001
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Approve the purchase of 1.44 acres from Virgil Butler for $248,000.
2. Authorize the Mayor and City Clerk to execute the Sales Agreement with Mr. Virgil
Butler.
3. Appropriate $40,000 from General Fund Reserves (Account No. 110-300) to
Account No. 110-320-3029-7700.
Thomas M. Mayer
Public Works Director/City Engineer
Reviewed and approved by:
Artie Fields
Acting Finance Director
Attachments: Sketch
Sales Agreement
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AGREEMENT FOR ACQUISITION OF REAL PROPERTY
AND ESCROW INSTRUCTIONS
THIS AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND ESCROW
INSTRUCTIONS (this "Agreement") is dated , 200I for reference purposes
only and is entered into by and between VIRGIL J. BUTLER and ROSEMARY I. BUTLER,
husband and wife (collectively "Seller"), and the CITY OF WEST COVINA a municipal
corporation ("Buyer").
RECITALS:
A. Seller is the owner of that certain real property consisting of approximately 1.44 acres
located in the City of West Covina, County of Los Angeles, State of California, more particularly
described on Exhibit "A" attached hereto and incorporated herein by reference (the "Land").
B. Seller wishes to sell.and Buyer wishes to purchase the Land, together with (i) all
improvements now or hereafter constructed thereon; (ii) all rights, privileges, easements, licenses
and interests appurtenant thereto, including, without limitation, all mineral, oil, gas, water and water
rights; and (iii) all intangible property owned or held by Seller in connection with the Land,
including, without limitation, any development rights, governmental approvals and land
entitlements. The Land and all of the foregoing (i) through (iii) are collectively referred to herein
as the "Property".
NOW, THEREFORE, incorporating the foregoing recitals and in consideration thereof, in
consideration of the mutual covenants and conditions contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
TERMS AND CONDITIONS
1. AGREEMENT TO SELL AND PURCHASE. Seller agrees to sell the Property to
Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and for the
consideration set forth in this Agreement.
2. PURCHASE PRICE. The total purchase price for the Property shall be the sum of
TWO HUNDRED FORTY EIGHT THOUSAND DOLLARS ($248,000.00) ("Purchase Price"). On or
before 1:00 p.m. on the business day preceding the Closing Date, Buyer shall transfer the Purchase
Price with the City of West Covina Financing Authority ("Financing Authority") in "Restricted
Funds." "Restricted Funds" shall mean funds that cannot be used for any other purpose other than
as set forth in this Agreement. The Restricted Funds shall be designated as the "Butler Fund."
Buyer shall cause the Financing Authority to issue a ten (10) year payable note (the "Note' secured
by the Butler Fund for the Purchase Price to Seller to be deposited with the -Escrow Holder (as
589830.v1
defined herein) with the appropriate instructions for delivery to Seller. The interest rate on the Note
shall be determined within five (5) days prior to the Closing Date (as defined herein) and shall be
the lowest interest rate quoted by at least three financing entities for a similar loan to ',a city
government. Buyer agrees to file the appropriate forms with the Internal Revenue Service to ensure
that seller will receive income tax exempt status for the interest on the Note. Buyer and Seller each
agree to execute and deliver to the Escrow Holder such documents as required by Escrow Holder
for the reporting of interest credited to each party.
3. OPENING OF ESCROW. Within three (3) business days after Buyer and Seller have
executed this Agreement, Buyer and Seller agree to open an escrow ("Escrow") with South H::ls
Escrow Corporation, 220 South Glendora Avenue, West Covina, California 91790, (626) 919-3464
("Escrow Holder"). Escrow shall be deemed opened upon execution by both parties "of this
Agreement and delivery of same to Escrow Holder ("Opening of Escrow"). Within ten (16) days
following the Opening of Escrow, Escrow Holder shall sign and deliver to Buyer and Seller the
acceptance of the Agreement and the Escrow set forth below and shall deliver to each of Buyer and
Seller written confirmation of the date of Opening of Escrow, the date for Buyer's initial review of
title under Paragraph 7, the Due Diligence Date under Paragraph 8(d) and the Closing Date under
Paragraph 4. This Agreement, together with such standard provisions as may be required by Escrow,
constitutes the joint Escrow Instructions of Buyer and Seller, and Escrow Holder is hereby
empowered to act under this Agreement. In the event of any conflict between the terms ";of this
Agreement and Escrow Holder's general conditions or other instructions, the provisions 'of this
Agreement shall prevail. The parties hereto agree to do all acts reasonably necessary to close the
Escrow.
4. CLOSING DATE. The term "Close of Escrow" shall mean the date the Grant Deed
(defined below) is recorded in the Official Records of Los Angeles County, California. Close of
Escrow shall occur on or before the Closing Date. The term "Closing Date" shall mean the date
which is sixty (60) days after Opening of Escrow, or such other date as may be agreed upon in
writing by the parties hereto. If the Closing Date shall fall on a Monday or fall on a weekend or
holiday, the Closing Date shall be the next business day.
5. CONVEYANCE OF TITLE. Seller agrees to convey to Buyer at Close of Escrow
by grant deed in form acceptable to Buyer ("Grant Deed") marketable fee simple title to the Property
free and clear of all recorded and unrecorded liens, encumbrances, assessments, easements,'; leases,
and taxes, subject only to the Permitted Exceptions (hereinafter defined).
6. TITLE INSURANCE POLICY. Escrow Holder shall, concurrently with the
recording of the Grant Deed to Buyer, provide Buyer with a CLTA Standard Coverage Policy of
Title Insurance in the amount of the Purchase Price issued by First American Title Insurance
Company ("Title Company"), showing the title to the Property vested in Buyer, subject only to the
Permitted Exceptions ("Title Policy"). Buyer may elect to obtain ALTA coverage at Buyer's
additional cost and expense.
7: COMMITMENT FOR TITLE INSURANCE.
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(a) Buyer shall have the right to obtain, at Buyer's expense, a Commitment for
Title Insurance issued by Title Company, together with copies of all documents referred to therein
(collectively, the "Commitment") and a map prepared by Title Company plotting all easements
shown therein. Buyer shall have thirty (30) calendar days following the later of (i) the date of
Opening of Escrow; or (ii) the date that Buyer has received the Commitment from Title Company
to accept any or all items ("Permitted Exceptions") or reject any item or items disclosed by the
Commitment ('Disapproved Exceptions"). If Buyer fails to notify Seller in writing of any
Disapproved Exceptions within said thirty (30) calendar day period, Buyer shall be deemed to have
approved and accepted the Commitment. If Buyer shall disapprove of any item in the Commitment,
Seller shall, wi►hin five (5) days following receipt of such disapproval, advise Buyer in writing
whether or not Seller shall cause to be eliminated any such Disapproved Exceptions. Seller's failure
to send such notice shall be deemed to constitute Seller's election not to eliminate such Disapproved
Exceptions as of the end of such five (5) day period. If Seller elects to eliminate such Disapproved
Exceptions, the Escrow shall remain open and Seller shall be obligated to convey the Property to
Buyer subject only to the Permitted Exceptions. If Seller elects, or is deemed to have elected, not
to eliminate any Disapproved Exceptions, Buyer shall have the right, within five (5) days following
such election or deemed election, to either agree in writing to accept the Property subject to the
Disapproved Exceptions which Seller has elected not to eliminate (in which event such Disapproved
Exceptions shall be deemed Permitted Exceptions), or to terminate this Agreement and the Escrow.
Buyer's failure to send such notice shall be deemed Buyer's election to terminate this Agreement
and the Escrow. Upon such termination, neither Buyer nor Seller shall have any further liability
hereunder, except that Buyer shall be entitled to the prompt return of any funds deposited by Buyer
with Escrow Holder less Buyer's share of Escrow costs to date of cancellation.
(b) Upon the issuance of any amendment or supplement to the Commitment
which adds additional exceptions, the foregoing right of review and approval shall also apply to said
amendment or supplement.
(c) Notwithstanding anything to the contrary herein, Buyer shall be deemed to
have automatically objected to all deeds of.trust, mortgages, judgment liens, mechanics' liens, federal
and state income tax liens, delinquent general and special real property taxes and assessments and
similar monetary encumbrances affecting the Property, and Seller shall discharge any such non -
permitted title matter of record prior to or concurrently with the Close of Escrow.
8. DUE DILIGENCE REVIEW.
(a) Within ten (10) days following the Opening of Escrow, Seller shall deliver
to Buyer all Due Diligence Items for Buyer's review. The term "Due Diligence Items" shall
collectively refer to all documents relating to the Property which Seller has in its possession or
control (or has reasonable access thereto and knowledge thereof), including without limitation (and
to the extent such items exist), copies of the by-laws and articles of incorporation for any owner's
association affecting the Property; all leases, contracts and agreements and all amendments and
modifications to any such leases, contracts and agreements; surveys (including any ALTA surveys);
insurance claims reports and copies of insurance policies; engineering reports, soils studies, soils
compaction reports; and environmental audits and reports, environmental remediation plans (and all
589830.v 1 3
correspondence and documents related thereto); copies of all building and operational permits, plans
and specifications, inspection reports and other items relating to the construction of improvements
and governmental approvals thereof.
(b) The foregoing recitation of documents shall not be construed to imply that
Seller has in its possession any such documents. Seller shall not be required to obtain documents
which are not presently in the possession of Seller, including without limitation, any documents on
file with any governmental agency and Buyer shall be responsible for obtaining any such documents,
provided that Seller will cooperate with Buyer's efforts in regard thereto.
(c) Buyer or Buyer's representatives may enter on the Property to make such
tests, surveys or other studies of the Property so long as Buyer pays for all such tests and studies and
keeps the Property free and clear of any liens, repairs or damage to the Property.
(d) The term "Due Diligence Date" shall mean the date which is forty-five (45)
days after the later of (i) the date of Opening of Escrow; or (ii) the date that Buyer has received all
Due Diligence Items from Seller. Buyer shall deliver written notice to Seller on or before the Due
Diligence Date as to Buyer's approval or disapproval of the Due Diligence Items and of Buyer's
inspection of the Property. In the event Buyer fails to deliver such notice, Buyer shall be deemed
to have disapproved the Due Diligence Items.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE ESCROW.
Buyer's obligation to acquire the Property is subject to the satisfaction of the following conditions
which are for Buyer's benefit only:
(a) Buyer has approved title to the Property as provided in Paragraph 7.
(b) On or before the Due Diligence Date, Buyer has received and approved (to
the extent Buyer elects to do so):
(i) the physical condition of the Property;
(ii) a Phase 1 environmental report;
(iii) an ALTA survey of the Property prepared by a licensed surveyor; and
(iv) all other Due Diligence Items delivered by Seller to Buyer or otherwise
obtained by Buyer.
(c) Title Company commits to issue the Title Policy dated as of the Close of
Escrow.
(d) All representations and warranties of Seller specified in Paragraph 12(a) or
otherwise in this Agreement are true and correct as of Close of Escrow.
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0 •
(e) Escrow Holder holds and will deliver to Buyer as of Close of Escrow the
instruments accruing to Buyer pursuant to this Agreement.
If Buyer has not delivered written notice of approval of the above conditions to Seller by the
times provided, or if no time is provided, on or before the Close of Escrow, each such condition shall
automatically and conclusively be deemed to have been disapproved by Buyer, and Buyer shall have
the right to terminate this Agreement and the Escrow. Upon such termination, thereafter neither
Buyer nor Seller shall have any further liability hereunder, except that Buyer shall be entitled to the
prompt return of any funds deposited by Buyer with Escrow Holder less Buyer's share of Escrow
costs to date of cancellation.
10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
ESCROW. Seller's obligation to perform this Agreement is subject to the satisfaction of the
following conditions which are for Seller's benefit only:
(a) Escrow Holder holds and will deliver to Seller as of Close of Escrow the Note
and instruments accruing to Seller pursuant to this Agreement.
.. 11:. CLOSING DOCUMENTS.
(a) On or before 1:00 p.m. on the business day preceding the Closing Date, Seller
will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Grant Deed; (ii)
an original Non -Foreign Affidavit on Escrow Holder's form; (iii). an original California Form
590-RE Real Estate Withholding Exemption Certificate; and (iv) if requested by Buyer, a Closing
Certification as defined in Paragraph 12(c).
(b) On or before 1:00 p.m. on the business day preceding the Closing Date, Buyer
will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Note; and (ii) if
elected by Buyer, a preliminary change of ownership statement.
(c) Both parties shall execute and deliver through Escrow any other documents
or instruments which are reasonable necessary in order to consummate the purchase and sale of the
Property.
(d) Escrow Holder shall confirm that any documents signed in counterpart are the
matching documents and shall combine the signature pages thereof so as to create fully executed
documents. Escrow Holder will cause the Grant Deed to be recorded when it can issue the Title
Policy in the form described in Paragraph 6, and holds for the account of Buyer and Seller,
respectively, the funds and items described above to be delivered to Buyer and Seller, respectively,
through Escrow, less costs, expenses and disbursements chargeable to Seller pursuant to the terms
hereof. Promptly following Close of Escrow, Escrow Holder shall date all undated documents as
of Close of Escrow and shall distribute to each of Buyer and Seller Escrow Holder's closing
statement and an original of each closing document deposited by the other party in Escrow and
copies (conformed if recorded) of any other documents deposited in Escrow.
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12. REPRESENTATIONS OF SELLER.
(a) Seller hereby makes the following representations and warranties to Buyer,
each of which is material and relied upon by Buyer in making its determination to enter into this
Agreement, is true in all respects as of the date hereof and shall be true in all respects on the date of
Close of Escrow on the Property, and shall survive the Close of Escrow of the purchase and sale of
the Property -as well as any future transfer of the Property to Buyer or any transferee, successor or
assignee of Buyer:
(i) Seller is the owner of and has full right, power and authority to sell, convey
and transfer the Property to Buyer as provided herein and to carry out Seller's obligations hereunder.
Seller has obtained, or will obtain before the Close of Escrow, all required consents, releases and
permissions in order to vest good and marketable title in Buyer subject to no other possessory,
ownership or leasehold interests.
(ii) Seller will have received no notices, orders or directives as of Close of
Escrow from any applicable governmental authority of zoning, building, environmental protection,
clean air, pollution, fire or health code violations with respect to the Property.
(iii) As used herein, "Hazardous Substances" means any substance, material or
waste defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or
toxic substance, or other similar term, including, without limitation, petroleum products or
byproducts, or asbestos containing products, which is or becomes regulated by any federal, state or
local governmental authority, statute, regulation or ordinance, including, but not limited to, any
substance defined as such or regulated by any "Superfund" or "Superlien" law, or any other federal,
state or local law, statute, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards of conduct concerning Hazardous Materials and/or oil wells and/or
underground storage tanks and/or pipelines, as now, or at any time hereafter, in effect. To the best
of Seller's knowledge, (i) there exist no Hazardous Substances on, under or around the Property,
groundwater, or otherwise; (ii) Seller has received no written notice from any third parties, prior
owners of the Property, or any federal, state or local govern -mental agency, indicating that any
additional hazardous waste remedial or clean-up work will be required; (iii) there are not any on -site
spills, releases, discharges or disposal of Hazardous Substances which have occurred or are presently
occurring on any of the Property; (iv) no spills or disposal of Hazardous Substances have occurred
or are presently occurring off the Property as a result of any activities on the Property; and (v) there
exist no underground gasoline or other storage tanks on, under or about the Property. Nothing in the
foregoing shall diminish any obligations of Seller under applicable federal, state or local law.
(iv) There are no pending or threatened litigation, allegations, lawsuits or claims,
whether for personal injury, property damage, landlord -tenant disputes, property taxes, contractual
disputes or otherwise, which do or may affect the Property or the operation or value thereof, and
there are no actions or proceedings pending or, to the best of Seller's knowledge, threatened against
Seller before any court or administrative agency in any way connected with the Property and neither
the entering into of this Agreement nor the consummation of the transactions contemplated hereby
will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction or
589830M 6
decree issued against or imposed upon it, nor constitute or result in any default or event that with the
notice or lapse of time, or both, would be a default, breach or violation of any lease, mortgage, deed
of trust or other agreement, instrument or arrangement by which Seller or the Property are bound.
(v) There are no contracts, leases, claims or rights affecting the Property and
no contracts .or agreements have been entered into by or under Seller, oral or written, which
shall survive the Close of Escrow.
(vi) All Due Diligence Items provided by Seller to Buyer are true, accurate and
complete copies of same and, to the best knowledge of Seller, all information contained in the Due
Diligence Items is true, accurate and complete.
(vii) Seller is not a "foreign person" within the meaning of Section 1445 of the
Internal Revenue Code of 1986, as amended, or California Revenue and Tax Code Section 1880, as
amended.
(b) Within five (5) days following the Opening of Escrow, Seller shall
deliver to Buyer any and all disclosures as required by applicable law in connection with the
proposed transfer of ownership of real property.
(c) If Seller becomes aware of any act or circumstance which would change or
render incorrect, in whole or in part, any representation or warranty made by Seller under this
Agreement, whether as of the date given or any time thereafter through the Closing Date and whether
or not such representation or warranty was based upon Seller's knowledge and/or belief as of a
certain date, Seller will give immediate written notice of such changed fact or circum-stance to
Buyer, but such notice shall not release Seller of its liabilities or obligations with respect thereto.
If requested by Buyer, Seller shall issue a certificate regarding representations and warranties in
form reasonably satisfactory to Buyer and Seller for delivery to Buyer through Escrow at the Close
of Escrow ("Closing Certification"), stating that all the representations and warranties contained in
Paragraph 12(a) are true and correct as of said date, or setting forth in detail which of such matters
are not true and correct.
13. Indemnity. Seller shall indemnify Buyer against and hold Buyer harmless from any
and all loss, damage, liability or expense, including court costs and reason -able attorneys' fees, which.
Buyer may reasonably incur or sustain either prior to or following the Close of Escrow by reason
of or in connection with (i) any misrepresentation made by or on behalf of Seller contained in any
certificate or other instrument furnished or to be furnished by Seller, or at its request hereunder; (ii)
any breach of Seller's representations and/or warranties contained herein; (iii) the failure of Seller
to fulfill any of its covenants or agreements under this Agreement; (iv) any and all obligations,
liabilities, claims, accounts, demands, liens or encumbrances, whether direct, contingent or
consequential, and no matter how arising, in any way related to or arising from any act, conduct,
omission, contract, agreement or commitment of Seller or in any way relating to or arising from the
construction, completion, sale, use or occupancy of the Property prior to -the Close of Escrow; or (v)
in any way relating to the generation, treatment, storage or disposal of Hazardous Materials or
Substances prior to the Close of Escrow. Buyer shall notify Seller within ten (10) days in the event
589830M
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any claim is made against it for which Seller shall have agreed to indemnify Buyer as set forth in this
Agreement, and Seller shall thereupon undertake to defend and hold Buyer free and harmless
therefrom. Should Seller fail to discharge or undertake- to defend against any such liability, then
Buyer may settle the same, and Seller's liability to Buyer shall be conclusively established by such
settlement, the amount of such liability shall include both the settlement consideration and the
reasonable costs, attorneys' fees and expenses necessarily incurred by the Buyer in effecting such
settlement.
14. PRORATIONS AND EXPENSES.
(a) All non -delinquent general and special real property taxes and assessments
shall be pro -rated to the Close of Escrow. Any supplemental tax bills received after Close of Escrow
shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and by Buyer
to the extent they relate to a period after Close of Escrow.
(b) Buyer and Seller shall cause any and all utilities which are in the name of
Seller to be transferred to the name of Buyer as of the Close of Escrow or as soon thereafter as
practicable.
(c) In the event final amounts with respect to any proration are not available as
of Close of Escrow, the proration shall be done on an estimated basis and the parties shall prepare
a final proration within sixty (60) days following Close of Escrow. Any party who is obligated to
pay net amounts based on said final proration shall reimburse the other party said amount within
thirty (30) days after completion of the final proration.
(d) Buyer shall pay the premium for the standard ALTA policy of title insurance
and the cost of ALTA coverage if Buyer elects to obtain such ALTA coverage. Buyer and Seller
shall each pay one-half of the Escrow fees. Seller shall pay the recording fees and any required
documentary transfer taxes. All other costs of Escrow not otherwise specifically allo-cated by this
Agree-ment shall be apportioned between the parties in a manner consistent with the custom and
usage of Escrow Holder.
15. INFORMATION REPORT. The "Reporting Person" within the meaning of Treasury
Regulation Section 1.6045-4(e)(5) with respect to the transactions contemplated by this Agreement
shall be Escrow Holder. The name and address of Escrow Holder are set forth in Paragraph 3 of this
Agreement. It is agreed that Escrow Holder is an eligible person under Section 1.60454(e)(5)(ii)
of said Regulations. Escrow Holder hereby agrees to be responsible for complying with the
reporting and other requirements of Internal Revenue Code Section 6045(e) and the income tax
regulation promulgated thereunder. Pursuant to said regulation, the address for the transferor and
transferee are as set forth for Seller and Buyer set forth in Paragraph 25 below and the identifying
information regarding the real estate transferred is the legal description for the Property set forth on
Exhibit "A" attached hereto. Escrow Holder agrees to file the form required by said regulations
between the end of the calendar year in which the Close of Escrow occurs and February 28 of the
following calendar year. Buyer and Seller agree (i) to cooperate with Escrow Holder and with each
other in completing any report and/or other information required to be delivered to the Internal
589830.v 1 8
0 . 9
Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales
transaction contemplated by this Agreement, including, without limitation, Internal Revenue Service
Form 1099-S as such may be hereafter modified or amended by the Internal Revenue Service or as
may be required pursuant to any regulation now or hereafter promulgated by the Treasury
Department with respect thereto; (ii) that Buyer and Seller, their respective employees and attorneys,
and Escrow Holder and its employees may disclose to the Internal Revenue Service, any information
regarding this Agreement or the transaction contemplated herein as such party reasonably deems to
be required to be disclosed to the Internal Revenue Service by such party pursuant .to Internal
Revenue Code Section 6045(e); (iii) that neither Buyer nor Seller shall seek to hold any such party
liable for the disclosure to the Internal Revcuue Service of any such information; and (iv) to retain
this Agreement for at least four (4) years following the close of the calendar year in which the Close
of Escrow occurs.
16. RISK OF PHYSICAL LOSS. Risk of physical loss to the Property shall be bome by
Seller prior to the Close of Escrow and by Buyer thereafter. In the event that the Property shall be
damaged by fire, flood, earthquake or other casualty, Seller shall deliver prompt written notice
thereof to Buyer, in which event, Buyer shall have the option to terminate this Agreement, provided
notice of such termination is delivered to Seller within twenty (20) days following the date Buyer
receives Seller's notice of the occurrence of such casualty. If Buyer fails to terminate this Agreement
pursuant to the foregoing sentence within said twenty (20) day period, Buyer shall complete the
acquisition of the Property, in which case Seller shall assign to Buyer the interest of Seller in all
insurance proceeds relating to such damage (subject to the rights of tenants under leases of the
Property). Seller shall consult with Buyer regarding any proposed settlement with the insurer and
Buyer shall have the reasonable right of approval thereof. Seller shall hold such proceeds until the
Close of Escrow. In the event this Agreement is terminated for any reason, Buyer shall have no right
to any insurance proceeds.
17. PRE -CLOSING OBLIGATIONS. Prior to Close of Escrow, Seller agrees not to
enter into any new lease or contract affecting the Property without Buyer's prior written consent,
which consent may be withheld in Buyer's sole and absolute discretion. Seller shall maintain the
Property in good condition and repair at Seller's sole cost and expense.
18. POSSESSION. Possession of the Property shall be delivered to Buyer at Close of
Escrow. In the event any personal property remains on the Property following the Close of Escrow,
it shall automatically become the property of Buyer.
19. INTEGRATION. This Agreement and other documents expressly incorporated
herein by reference contain the entire and exclusive under -standing and agreement between the
parties relating to the matters contemplated hereby and all prior or contemporaneous negotiations,
agreements, understandings, representations and statements, oral or written, are merged herein and
shall be of no further force or effect.
.20. BROKERAGE COMMISSION. Buyer and Seller represent and warrant to each
other that no broker's commission or finder's fee is payable with regard to this transaction and each
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• will indemnify, defend and hold the other harmless with respect to any claim or any broker's fee
claimed as a result of a breach of this warranty.
21. SURVIVAL. All "warranties and covenants stated in this Agreement shall survive
Close of Escrow and the delivery of the Grant Deed.
22. TIME. Time is of the essence in this Agreement.
23. ATTORNEYS' FEES. In the event of any dispute between the par -ties hereto arising
out of the subject matter of this Agreement or the Escrow; or in connection with the Property, the
prevailing party in such action shall be entitled to have and to recover from the other party its
reasonable attorneys' fees and other reasonable expenses in connection with such action or
proceeding in addition to its recoverable court costs.
24. MODIFICATIONS. Any alteration, change or modification of or to this -Agreement,
in order to become effective, shall be made by written instrument or endorsement thereon and in
such instance executed on behalf of each party hereto.
25. NOTICES. Any notice which either party may desire to give to the other party or to
the Escrow Holder must be in writing and shall be effective (i) when personally delivered by the
other party or messenger or courier thereof; (ii) three (3) business days after deposit in the United
States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline
time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax
transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the
methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed
to the respective parties as set forth below or to such other address and to such other persons as the
parties may here -after designate by written notice to the other parties hereto.
To Seller: Virgil I Butler
P.O. Box 4102
Covina, CA 91723
Facsimile:
To Buyer: City of West Covina
1444 West Garvey Ave. South
West Covina, CA 91790
Attn: Thomas M. Mayer
Facsimile: (626) 813-8660
Copy to: Fulbright & Jaworski L.L.P.
865 S. Figueroa
Suite 2900
Los Angeles, CA 90017
Attn: Colin Lennard, Esq.
Facsimile: (213) 680-4518
589830.v 1 10
26• SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal representatives,
successors and assigns.
27. EXECUTION IN COUNTERPART. This Agreement and any modifications,
amendments or supplements thereto may be executed in several counterparts; and all so executed
shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not
signatories to the original or the same counterpart.
[end - signature page follows]
589830M 11
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement for Acquisition
of Real Property and Escrow Instructions as of the date and year first above written.
"SELLER":
"U
VIRGIL J. BUTLER
ROSEMARY I. B LER
"BUYER":
CITY OF WEST COVINA,
a municipal corporation
By:
Its:
ATTEST:
City Clerk
JANET BERRY
APPROVED AS TO FORM:
City Attorney
ARNOLD M. ALVAREZ-GLASMAN
AGREED AND ACCEPTED
AS OF
589830.0 12
•
SOUTH HILLS ESCROW CORPORATION
"ESCROW HOLDER"
589830.v 1 13
•
�1:
LEGAL_ DEg�R1P��N OF LA1yD
The Land is that certain real property, located in the City of West Covina, County of Los
Angeles, State of California, more particularly described as follows:
PARCEL 1:
THAT PORTION OF LOT 72 OF TRACT 930, IN THE CITY OF WEST COVINA. AS PER
MAP RECORDED IN 800K 17 PAGE 38 OF MAPS, IN THR OFFICE OF THE COUNTY
RECORDER OF SAID COUNTYLYING SOUTHERLY OF A LINE PARALLEL OR
,
CONCENTRIC WITH 32.00 FEET SOUTHERLY,
MEASURED AT RIGHT ANGL
RADIALLY. FROM THE FOLLOVWNG DESCRIBED LINE.
OR
COMMENCING AT A POINT IN THE CENTER LINE OF CITRUS STREET DISTANT
SOUTH 0 2T 05' WEST 582.6 FEET- ALONG SAID CENTER LINE FROM THE
EASTERLY PROLONGATION OF THE SOUTHERLY LINE OF TRACT 196M AS SAID
CENTER LINE AND SAID PROLONGATION ARE SHOWN ON MAP OF =0 TRACT
19682 RECORDED IN BOOK 498 PAGES 18,19,
COUNTY RECORDER OF SAID COUNTY, SAID POINT BEING IN A CURVE COFFICE NCH E
TO THE NORTH AND HAVING A RADIUS OF 1629 FEET, A RADIAL LINE OF SAID
CURVET10
SAID CURRVE SAID POINT BEARS SOUTH 2° 01' W EAST, THENCE EASTERLY ALONG
164.14 FEET; THENCE TANGENT TO SAID CURVE NORTH Sr 11, 42'
EAST. 200.30 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE
NORTH AND hAVING A RADIUS OF 970 FEET, THENCE EASTERLY AND
NORTHEASTERLY ALONG SAID CURVE 550 6B FEET.
E=EPT THAT PORTION OF SAID LOT LYING SOUTHEASTERLY OF A STRAIGHT
LINE EXTENDING FROM THE SOUTHWEST CORNER OF SAID LOT TO A POINT IN
THE EAST LINE OF SAID LOT DISTANT NORTHERLY THEREON 330.00 FEET FROM
THE SOUTHEAST CORNER OF SAID LOT
EXCEPT THEREFROM THE -PRECIOUS METALS AND ORES THEREOF- AS
EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND, SR., AND WILLIAM
WORKMAN, IN THE PARTITION DEED RECORD® IN BOOK 10 PAGE 39, OF DEEDS.
ALSO EXCEPT
HYDROCAARSON SUBSTANC�sEREFROM - OIL, GAS, PETROLEUM AND OTHER
SURFACE ENTRY, AS RESERVED N THE D� FROM ANG D MINERALS, BUT WITHOUT RIGHT COUNTY
F1000 CONTROL, DISTRICT' IN DEED RECORDED MARCH 10, 1964 AS
INSTRUMENT NO.4916.
(CONTINUED)
0
PARCEL 2:
THAT PORTION OF LOT 72 OF TRACT 930, IN THE CITY OF WEST COVINA. AS PER
MAP RECORDED IN BOOK 17 PAGE 38 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY. DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 72; THENCE NORTH 49°
25' Or EAST ALONG THE SOUTHEASTERLY LINE OF THE LAND DESCRIBED AS
PARCEL NO. 535 IN A FINAL JUDGMENT HAD IN . SUPERIOR COURT CASE NO
766503, A CERTIFIED COPY OF WHICH IS RECORDED IN BOOK 01505 PAGE 575,
OFFICIAL RECORDS, A DISTANCE OF 127.07 FEET; THENCE SOUTH 3r OS WEST 112.02 FEET TO A POINT IN THE SOUTHERLY LINE OF SAID LOT 72; THENCE
NORTH 896 34, ST WEST ZZ.g6 FEETTO THE POINT OF BEGINNING.
EXCEPT THEREFROM THE -PRECiOUS METALS AND ORES THEREOF" AS
EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND, SR. AND VtgLL AM
WORKMAN' IN THE PARTITION DEED RECORDED IN BOOK 10 PAGE 39, OF DEEDS.
PARCEL 3:
AN EASEMENT FOR INGRESS AND EGRESS OVER THE SOUTHERLY 15 00 FEET OF
THE NORTHERLY 40 FEET OF THAT PORTION OF LOT 71, OF TRACT 9309. IN THE
CITY OF WEST COVINA, AS PER MAP RECORDED IN BOOK 17 PAGE 38 OF MAPS.
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. LYING
SOUTHERLY OF A LINE THAT IS PARALLEL WITH AND DISTANT 32.00 FEET
SOUTHERLY, MEASURED AT RIGHT ANGLES OR RADIALLY FROM THE FOLLOWING
DESCRIBED UNE
BEGINNING AT A POINT IN THE CENTER UNE OF CITRUS STREET, SAID POINT
BEING DISTANT SOUTH 00 25' 05" WEST 5BM FEET ALONG SAID CENTER LINE OF
TRACT 19682, AS SAID CENTER LINE AND SAID PROLONGATION ARE SHOWN ON
MAP OF SAID TRACT 1968Z RECORDED IN BOOK 406 PAGES 18 TO 20 INCLUSIVE
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. SAID
POINT BEING IN A CURVE CONCAVE TO THE NORTH AND HAVING A RADIUS OF
1629 FEET, A RADIAL LINE OF SAID CURVE TO SAID POINT BEARS SOUTH r 01' W
EAST; THENCE EASTERLY ALONG SAID CURVE, 164.14 FEET; THENCE TANGENT
TO SAID CURVE. NORTH 8Z° 11' 42' EAST 200.30 FEET TO THE BEGINNING OF A
TANGENT CURVE CONCAVE TO THE NORTH AND HAVING A RADIUS OF S70 FEET:
THENCE EASTERLY AND NORTHEASTERLY ALONG SAID CURVE 550.68 FEET
EXCEPT THEREFROM THAT PORTION OF SAID LOT 71; COMPRISING PARCELS 502
AND 471 OF THE FINAL ORDER OF CONDEMNATION ENTERED IN SUPERIOR
COURT CASE NO. 766503 OF THE SUPERIOR COURT OF SAID COUNTY. A
CERTIFIED COPY OF WHICH WAS RECORDED APRIL 11. 1962 IN BOOK D1577
PAGE 65, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, SAID LAND DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE ABOVE DESCRIBED PARALLEL LINE
WITH THE WESTERLY LINE OF SAID LOT 7; THENCE ALONG SAIO WESTERLY LINE,
SOUTH 00 25' Or WEST 70.35 FEET: THENCE SOUTH 8V w Sr EAST 10.00 FEET
TO A LINE PARALLEL WITH AND 10.00 FEET EASTERLY, MEASURED AT RIGHT
ANGLES, FROM SAID WESTERLY LINE; THENCE ALONG SAID LAST MENTIONED
PARALLEL. LINE, NORTH 00 ZT Or EAST 49.00 FEET; THENCE NORTH 250 OS EAST
49.14 FEET TO SAID FIRST MENTIONED PARALLEL. LINE; THENCE WESTERLY
ALONG SAID FIRST MENTIONED PARALLEL LINE TO THE POINT OF BEGINNING.