Resolution - 2006-65RESOLUTION NO.2006-65
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST
COVINA, CALIFORNIA, APPROVING THE EXECUTION OF THE
AGREEMENT FOR PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS BY AND BETWEEN THE COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA
AND M&A GABAEE, LP, AND MAKING CERTAIN FINDINGS IN
CONNECTION THEREWITH
WHEREAS, the Community Development Commission of the City of West Covina (the
"CDC") is engaged in activities necessary to carry out and implement the Redevelopment Plan
for the West Covina Merged Redevelopment Project Area and the City Wide Project Area (the
"Project Areas"); and
WHEREAS, The CDC is the owner of certain real property consisting of approximately
4.9 acres located northeast of the intersection of Azusa Avenue and Amar Road, West Covina,
California known as Parcels 12 and 13 of Parcel Map 60193 (the "Property"); and
WHEREAS, in order to carry out and implement such Redevelopment Plan the CDC
proposes to enter into that certain Agreement For Purchase And Sale And Joint Escrow
Instructions (the "Agreement") with M & A Gabaee, L.P., (the "Developer") for the sale of the
Property to the Developer for the development of a commercial/retail/office project, all as
described in the Agreement (the "Project"); and
WHEREAS, the Developer and CDC are submitting to the CDC and the City Council of
the City of West Covina (the "City Council") copies of the Agreement in a form executed by the
Developer; and
WHEREAS, pursuant to the Agreement, the CDC desires to convey fee title to the
Property to the Developer in consideration for the Developer's purchase, construction and
operation of the Project on the Site; and
WHEREAS, pursuant to Section 33433 of the Community Redevelopment Law
(California Health and Safety Code Section 33000, et seq.), the CDC is authorized, with the
approval of the City Council after a duly noticed public hearing, to convey the Property for
development pursuant to the Redevelopment Plan upon a determination by the City Council that
the sale of the property will either assist in the elimination of blight or provide affordable
housing for low and moderate income persons, that the consideration for such sale is, not less
than either the fair market value or fair reuse value of the Property in accordance with the
covenants and conditions governing the sale and the development costs required thereof, and that
the sale is consistent with the implementation plan which has been adopted by the CDC for the
Project; and
WHEREAS, a joint public hearing of the CDC and City Council on the proposed
Agreement was duly noticed in accordance with the requirements of Health and Safety Code
Sections 33431 and 33433; and
WHEREAS, the proposed Agreement, and a Summary Report meeting the requirements
of Health and Safety Code Section 33433, were available for public inspection consistent with
the requirements of Health and Safety Code Section 33433; and
WHEREAS, on July 131h 2006, the CDC and City Council held a joint public hearing on
the proposed Agreement, at which time the City Council reviewed and evaluated all of the
information, testimony, and evidence presented during the joint public hearing; and
• WHEREAS, all actions required by all applicable law with respect to the proposed
Agreement have been taken in an appropriate and timely manner; and
WHEREAS, the City Council has reviewed the summary required pursuant to Health and
Safety Code Section 33433 and evaluated other information provided to it pertaining to the
findings required pursuant to Health and Safety Code Section 33433; and
WHEREAS, the City Council has previously determined, in its adoption of the resolution
adding the Property to the West Covina Merged Redevelopment Project Area, that the Property
was blighted; and
Resolution No. 2006-65
July 13, 2006
WHEREAS, the Agreement would remove such blighting conditions by developing an
underutilized parcel to relieve an economic burden upon the City, providing
commercial/retail/office facilities and opportunities to the residents of the Project Areas and the
City and eliminating environmental hazards; and
WHEREAS, the Agreement furthers the goals of the CDC set forth' in the
Implementation Plan as it will aid in developing an underutilized property, providing needed
. infrastructure, eliminating blight, mitigating hazardous materials, and protecting environmental
habitat; and
WHEREAS, the City Council has duly considered all terms and conditions of the
proposed Agreement and believes that the redevelopment of the Property pursuant thereto is in
the best interests of the City of West Covina and the health, safety, and welfare of its residents,
and in accord with the public purposes and provisions of applicable state and local laws and
requirements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West
Covina as follows:
SECTION t. The City Council finds and determines that, based upon substantial
evidence provided in the record before it, the consideration for the CDC's disposition of the
Property pursuant to the terms and conditions of the Agreement equals the fair market value of
the Property, and the consideration is not inconsistent with the fair reuse value of the Property
with the uses, conditions and development costs indicated for Property.
SECTION 2_ The City Council hereby finds and determines that the disposition of the
Property pursuant to the Agreement will eliminate blight within the Project Areas. The Property
is blighted because it is vacant underutilized land, which has been subjected to illegal grading,
hazardous materials migration, and various land use and environmental restrictions. These
blighting conditions will be removed by the development of the commercial/retail/office facilities
through remedial grading, hazardous materials removal and mitigation, hazardous materials
monitoring and.habitat restoration and monitoring.
SECTION 3- The City Council hereby finds and determines that the Agreement is
consistent with the provisions and goals of the Implementation Plan because the Development is .
a specifically identified project within the Implementation Plan. The commercial/retail/office
project will also aid in the elimination of inadequate water, sewer and storm drainage.systems.
The Project will assist with the cleanup and remediation of properties that are adversely affected
by contaminated soils and/or hazardous wastes.
SECTION 4. The City Council hereby approves the Summary Report and the
Agreement and authorizes and directs the Chairman of the CDC to execute the Agreement on
behalf of the CDC in substantially the form as presented in Exhibit A. A copy of the Agreement
when executed shall be placed on file in the office of the City Clerk.
SECTION 5_ The City Clerk shall certify to the adoption of this Resolution.
The foregoing Resolution is hereby approved this 13a' day of July 2006.
t
Mayor St a erfert
ATTEST
, . 4, al-"�
City Clerk Laurie Carrico
2
Resolution No. 2006-65
July 13, 2006
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I, LAURIE CARRICO, CITY CLERK of the City of West Covina, California, do hereby certify
that the foregoing resolution was duly adopted by the City Council of the City of West Covina,
California, at a special meeting thereof held on the 13th day of July 2006, by the following vote of
the City Council:
AYES:
Lane, Sanderson, Herfert
NOES:
Hernandez
ABSTAIN:
Touhey
ABSENT:
None
APPROVED AS TO FORM:
f -
611y Attorney ArnoAlvarez-Glasman
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2006-65 Exhibit A
EXHIBIT A
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
SELLER: COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF WEST COVINA
BUYER: M & A GABAEE, L.P.
July 2006
•
TABLE OF CONTENTS
1.
PURCHASE AND SALE................................................................................................1
2.
PURCHASE PRICE........................................................................................................1
3.
CONDITION OF TITLE TO PROPERTY..................................................................1
3.1
TITLE TRANSFER AT CLOSE OF ESCROW............................................................1
3.2
TITLE EXCEPTIONS....................................................................................................2
3.3
REVIEW OF TITLE.......................................................................................................2
3.4
TITLE INSURANCE.....................................................................................................2
4.
CONDITION OF PROPERTY AND CONTINGENCIES..........................................3
4.1
CONDITION OF PROPERTY.......................................................................................3
4.2
BUYERS CONTINGENCIES........................................................................................3
4.3
SPECIAL OBLIGATIONS OF BUYER........................................................................4
4.4
POWER OF TERMINATION.......................................................................................8
5.
EXCHANGE....................................................................................................................8
6.
REPRESENTATIONS AND WARRANTIES..............................................................9
6.1
SELLER'S WARRANTIES............................................................................................9
6.1.5
Brokers........................................................................................................................9
6.1.6
No Alterations.............................................................................................................9
6.1.7
Changed Conditions..................................................................................................10
6.2.
REPRESENTATIONS AND WARRANTIES BY BUYER.......................................10
6.2.1 Brokers......................................................................................................................11
7.
INDEMNIFICATION...................................................................................................11
8.
ASSUMPTION OF LIABILITIES................................................................................12
9.
LIQUIDATED DAMAGES..........................................................................................12
10.
BUYER'S WAIVER OF RIGHT TO COMPEL SPECIFIC PERFORMANCE....13
11.
ESCROW AND CLOSING...........................................................................................14
11.1
OPENING OF ESCROW.............................................................................................14
11.2
CLOSE OF ESCROW..................................................................................................14
11.3
SELLER DELIVERIES TO ESCROW........................................................................14
11.4
BUYER'S DELIVERIES TO ESCROW......................................................................15
11.5
COMPLETION OF ESCROW.....................................................................................15
11.6
COSTS OF ESCROW..................................................................................................15
12.
PRORATIONS...............................................................................................................16
13.
DAMAGE OR DESTRUCTION PRIOR TO CLOSE OF ESCROW . ....................
16
14.
EMINENT DOMAIN....................................................................................................17
15.
SURVIVAL OF CLOSE OF ESCROW......................................................................17
16.
NOTICES.......................................................................................................................17
17.
ENTIRE AGREEMENT...............................................................................................is
18.
BINDING EFFECT.......................................................................................................19
19.
WAIVER........................................................................................................................19
20.
CAPTIONS AND HEADINGS.....................................................................................19
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MAGabaeePumhaseAgrmtS EN7-11-06C1n
21.
COUNTERPARTS........................................................................................................19
22.
GOVERNING LAW......................................................................................................19
23.
ATTORNEYS FEES......................................................................................................19
24.
TIME OF ESSENCE.....................................................................................................19
25.
DATE OF AGREEMENT.............................................................................................20
26.
INVALIDITY OF ANY PROVISION.........................................................................20
27.
NO RECORDATION...................................................................................................20
28.
DRAFTING OF AGREEMENT...................................................................................20
29.
NO THIRD PARTY BENEFICIARY RIGHTS.........................................................20
30.
JOINT AND SEVERAL LIABILITY..........................................................................20
31.
INCORPORATION OF EXHIBITS............................................................................20
32.
NO JOINT VENTURE, PARTNERSHIP OR OTHER RELATIONSHIP
0
CREATED......................................................................................................................20
33. ASSIGNMENT...............................................................................................................20
34. DEFINITIONS...............................................................................................................20
SCHEDULE OF EXHIBITS
EXHIBIT A LEGAL DESCRIPTION................................................................................22
EXHIBIT "A-l" LEGAL DESCRIPTION........................................................................23
EXHIBIT "B" GRANT DEED............................................................................................24
EXHIBIT "C" SELLER RETAINED PORTION OF PARCEL 12...............................35
EXHIBIT "D" , MAP OF AREAS OF IMPROVEMENT.................................................36
MAGabaeePurchaseAgrm[SEN7-11-06CIn
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AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
(this "Agreement") is made as of July_, 2006 by and between the COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA, a public body corporate
and politic ("Seller"), and M & A GABAEE, L.P., a California limited partnership ('Buyer").
RECITALS
A. WHEREAS, Seller is the owner of certain land located in the City of West Covina,
County of Los Angeles, State of California, commonly known as Parcel 12 and Parcel 13 of
Parcel Map 60193, in the city of West Covina, The Property is located in a redevelopment project
area known as the Merged Redevelopment Project Area, and the Property is subject to the
Merged Project Area Redevelopment Plan (the 'Redevelopment Plan").
B. WHEREAS, Seller desires to sell a portion of Parcel 12, which is approximately 2.8 net
acres and all of Parcel 13, which is approximately 2.1 net acres as legally described on Exhibits
"A" and "A-1" attached hereto (the "Property") to Buyer, and Buyer desires to purchase the
Property from Seller, all on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements contained herein,
the parties hereto agree as follows:
1. PURCHASE AND SALE.
Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property
from Seller, on the terms and conditions hereinafter set forth in this Agreement.
2. PURCHASE PRICE.
The total purchase price ('Purchase Price") for the Property shall be One Million One
Hundred Eighty -Five Thousand Dollars ($1,185,000), payable by Buyer to Seller as follows:
(a) The cash sum of One Hundred Eighteen Thousand Five Hundred Dollars
($118,500) shall be deposited in Escrow upon the opening thereof, to be held in an
interest -bearing passbook account at a lending institution which is FDIC insured with interest
accruing to the credit of Seller. (b) The balance of the Purchase Price, shall be
deposited in Escrow by Buyer prior to Close of Escrow for delivery to Seller upon Close of
Escrow.
3. CONDITION OF TITLE TO PROPERTY.
3.1 TITLE TRANSFER AT CLOSE OF ESCROW
Title to the Property shall be conveyed to Buyer upon the Close of Escrow.
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MAGabaeePurchaseAgmtS EN7-11-06CIn
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3.2 TITLE EXCEPTIONS
Title to the Property shall be conveyed to Buyer by Grant Deed in the form attached
hereto as Exhibit "B", free and clear of all liens except for:
(a) Liens securing real property taxes and assessments (which constitute liens
not yet due and payable);
(b) The Redevelopment Plan:
(c) A Coastal Sage and Scrub Community Facilities District ("CFD")
(d) Such other exceptions and reservations shown on a Preliminary Title
Report ("Preliminary Report") issued by Chicago Title Company ("Title Company") which are
approved by Buyer. (All exceptions to title permitted pursuant to this Paragraph 3.2(b) are
referred to in this Agreement as "Permitted Exceptions.").
3.3 REVIEW OF TITLE
(a) Seller agrees to furnish Buyer with a copy of the Preliminary Report,
together with a copy of all recorded exceptions to title, within five days of the Opening of
Escrow.
(b) Buyer shall have ten (10) days after receipt of the Preliminary Report and
the recorded exceptions to title within which to notify Seller in writing of Buyer's disapproval,
for any or no reason, of any exceptions set forth in the Preliminary Report.
(c) In the event of Buyer's disapproval of the Preliminary Report, Seller, at its
sole election (to be exercised by written notice to Buyer within three (3) days after receipt of
Buyer's said notice of disapproval), shall have ten (10) days after Buyer's said disapproval within
which to remove or otherwise remedy the disapproved exceptions.
(d) If Seller cannot eliminate or otherwise remedy the disapproved exceptions
within said ten day time period, this Agreement shall thereupon terminate (unless Buyer waives
the disapproved exceptions) and all sums and documents deposited in Escrow shall be returned
to the parties who respectively deposited the same. Failure of Buyer to provide written
disapproval of the Preliminary Report within the above time period shall be deemed approval.
3.4 TITLE INSURANCE
Title to the Real Property shall be evidenced by the commitment of the Title Company to
issue a standard California Land Title Association policy of title insurance with liability in the
amount of the Purchase Price showing title to the Real Property vested in (or as designated by)
Buyer subject only to the Permitted Exceptions. If the Buyer desires to obtain an American Land
Title Association policy, buyer shall bear all costs of the policy and any required survey or other
added endorsements, in excess of the cost of the California Land Title Association policy.
MAGabaeePurchaseAgrmtS EN7-11-06CIn
• 4. CONDITION OF PROPERTY AND CONTINGENCIES.
•
4.1 CONDITION OF PROPERTY
(a) Except as provided in this Agreement, the Property shall be conveyed and
delivered to Buyer in an "as -is" physical condition. BUYER SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS
PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS AND THAT,
EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 6.1. BUYER IS NOT RELYING
ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS OR BROKER AS TO ANY
MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT LIMITATION:
(1) The quality, nature, adequacy and physical condition and aspects of the
Property, including, but not limited to, sewage, and utility systems, the square footage within the
Property.
(2) The quality, nature, adequacy, and physical condition of soils, geology and
any groundwater.
(3) The existence, quality, nature, adequacy and physical condition of utilities
serving the Property.
(4) The development potential of the Property, and the Property's use,
habitability, merchantability, or fitness, or the suitability, value or adequacy of the Property for
any particular purpose.
(5) The zoning or other legal status of the Property or any other public or
private restrictions on use of the Property.
(6) The compliance of the Property with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or
quasi -governmental, entity or of any other person or entity (including, without limitation, the
Americans with Disabilities Act).
(7) The presence of hazardous materials on, under or about the Property or the
adjoining or neighboring property.
(8) The quality of any labor and materials used in any Improvements.
(9) The economics of the operation of the Property.
(b) Seller is not in any way responsible for any demolition or physical site clearance
of said Property. Buyer is solely responsible for the relocation and extension of utilities and
easements and street improvements as necessary on any parcel within the Property.
4.2 BUYERS CONTINGENCIES
4.2.1 Buyer's obligation to purchase the Property is subject to the following
contingencies described in subparagraphs (a) through (b), below in this Paragraph 4.2.1
("Contingencies"). Each and all of the following Contingencies are for the sole benefit of Buyer
and may be waived or deemed satisfied by Buyer in Buyer's sole and absolute discretion, for any
or no reason.
(a) Buyer's review and approval of the Preliminary Report and all recorded
exceptions to title within the time allowed by Section 3.3 of this Agreement. If Buyer is
obtaining ALTA title insurance coverage, or if the Buyer otherwise requires a survey, Buyer shall
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MAGabaeePumha eAgrmtSEN7-11-06C1n
approve or disapprove the survey by written notice to Seller within ten (10) days of receipt of the
survey.
(b) Buyer's inspection and examination of the physical condition of the
Property. Buyer shall have access to the property at reasonable times and shall have the right to
conduct, at Buyer's expense, soil tests, engineering feasibility studies, environmental
investigations and such other studies with respect to the physical condition of the Property as
Buyer may desire. Buyer shall have thirty (30) days from the Opening of Escrow to conduct such
tests and studies, and to give written notice to Seller of any conditions unacceptable to Buyer.
Buyer shall hold and save Seller harmless from and against any and all loss, cost, damage,
liability, injury or expense, arising out of or in any way related to damage to property, injury to or
death of persons, or the assertion of lien claims caused by such entry, inspection and
implementation of soil tests, environmental investigations and other studies with respect to the
physical condition of the Property. If Buyer elects to terminate this Agreement for any reason or
no reason during the time frame set forth in this subparagraph (b), Buyer shall promptly upon
such election deliver to Seller all written reports, studies and information prepared by third
parties for Buyer which pertain to the physical condition of the Property. Buyer shall provide
certificates of general liability insurance naming the City, SELLER and their employees as
additionally insured with an acceptable A.M. Best Rating of A++ prior to accessing Property.
4.2.2. If Buyer disapproves of the satisfaction of any Contingency within the
applicable time period provided above, Buyer's sole remedy shall be to terminate this Agreement
and Seller shall have no obligation to remedy any Contingency, which Buyer disapproves. If this
Agreement terminates as a result of the failure of the satisfaction of any of the Contingencies, all
sums and documents deposited in Escrow shall be returned to the parties who respectively
deposited the same.
4.2.3. If Buyer fails to give written notice to Seller of its disapproval of any
Contingency within the respective applicable time limit set forth above in Paragraph 4.2, it shall
conclusively be deemed that Buyer has waived such Contingency and such Contingency shall
conclusively be deemed satisfied.
4.3 SPECIAL OBLIGATIONS OF BUYER
For purposes of this Agreement, the phrase "Buyer's Obligations" shall mean and include, but
not be limited to, the Buyer's obligations to perform the following actions when and as required
by this Agreement, each of which is more fully described hereinafter: -
(a) Within 90 days of the execution of this Agreement Buyer shall submit a Precise
Plan or appropriate land use entitlements / zoning applications to Seller and the Planning
Department of the City of West Covina for development of the Property as a quality
commercial/retail/office project (the "Project") in accordance with the uses and standards
specified in the Redevelopment Plan. Within 90 days of the execution of this Agreement, Buyer
shall also submit to the Seller for review and approval, which approval shall not be unreasonably
withheld, preliminary architectural plans for the development of the Property, including a plot
plan showing the general location of improvements, architectural design plans, building
• elevations, and a landscaping plan.
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MAGabaeePurchaseAgrmLSEN7-11-06CIn
(b) Upon sixty (60) days written notice from Seller, which may be extended for good
cause for an additional thirty (30) days by Seller, but in any event not later than three hundred
sixty (360) days after Close of Escrow, Buyer shall commence excavating and transporting the
excess soil from a portion of Parcel 11, and all of Parcels 12 and 13, as depicted on Exhibit "D",
to the top deck of the Class III landfill (currently estimated at 637,000 cubic yards) and complete
such excavation and transportation not later than one hundred eighty (180) days after
commencement of such work in order to create development pads on Parcels 12 and 13 with
adjacent slopes. Buyer has the option of commencing such works of excavation and
transportation at any sooner time after the Close of Escrow. The excavation and transportation of
excess soil shall be performed in accordance with the rough grading plans labeled "Bid Set -
January 12, 2004" for project No. GP04409 and more specifically described as Sheets 13, 14 and
15, specifications approved by the CDC Director and the City Public Works Director, and any
necessary permits from the City of West Covina. Buyer shall be solely responsible for the cost of
the excavation and transportation of excess soil.
(c) Buyer shall be responsible for the cost, installation and completion of all public
infrastructure (road, curb, gutter, sidewalk, sewer, storm drain, all utilities, including, but not
limited to, water, gas, electric, telephone, cable television etc.) for the proposed commercial
development of the 700 and 750 pads and the upsizing of such improvements as necessary to
support the proposed golf course and clubhouse from the "stub -out point" located at the
northeasterly edge of the proposed BLD Sports Park (Lot 10 of Parcel Map 60193) up to the 700
and 750 pad sites (the northerly lot boundary of Parcel 13 of Parcel Map 60193) within the
boundaries of Parcel C of Parcel Map 60193, all as shown on Exhibit "D" attached to this
Agreement. In addition, the Buyer is solely responsible for the abandonment, relocation, removal
and or decommissioning of gas probes, gas wells, ground water wells or other such monitoring
devices, which are located on the Property and related to the adjacent closed landfill operations.
Not later than one hundred eighty (180) days after the commencement of grading and excavation
by Buyer, Buyer shall commence such installation and extension of all public improvements and
complete such installation and extension of all public improvements not later than one hundred
twenty (120) days after commencement of such work. The installation and extension of all public
improvements shall be performed in accordance with rough grading, storm drain and utility
relocation plans labeled "Bid Set - January 12, 2004" for project No. GP04409, any other plans
and specifications approved by the Executive Director of the Community Development
Commission and the City Engineer and any necessary permits from the City of West Covina.
Buyer shall complete excavation and transportation of excess soil and all public infrastructure not
later than ten months after the commencement of grading and excavation by Buyer.
(d) Buyer acknowledges that Suburban Water Systems ("SWS") is the water purveyor
for the Property. Buyer shall pay the cost of the water system and coordinate installation of such
improvements with SWS including, but not limited to pipes, pump stations, water tanks and
grading for 700 and 880 zones, which are necessary to provide water service to the Buyer's
proposed commercial office development. This work shall also include upsizing such
improvements, as necessary, to support the proposed golf course and clubhouse and is subject to
the review and approval of the City Public Works Director and CDC Director.
(e) The portion of Parcel 12 retained by Seller as described in Exhibit "C" will be
used by SWS for the construction of water tanks and water pipes to serve the Property and other
• properties in the area. It will be necessary for Buyer to grant certain water pipeline and access
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MAGabaeePurchaseAgrmtS EN7-11-06CIn
. easements to SWS for the operation of the water facilities on the portion of Parcel 12 retained by
Seller. Buyer shall cooperate in good faith with SWS to grant the necessary easements to SWS
across, under and along the Property, provided such easements do not materially interfere with
the development of the Project.
(f) Buyer shall pay for, operate, comply with and maintain (a) all mitigation
measures associated with the use of the Property (i.e. methane gas recovery systems, onsite storm
drainage and slope landscaping) specifically set forth in the "EIR" and/or "SEIR" (as set forth in
the previously approved EIR and or SEIR dated October 2000 and November 2003, respectively
and hereinafter referred to as the "Mitigation Measures"), or (b) imposed by the City as a
condition to the issuance of the discretionary entitlements required by Buyer for the Project (the
"Discretionary Entitlements"); As used in this Agreement, the term "EIR" shall mean the BKK
Class III Landfill Closure, Postclosure Development Environmental Impact Report" (October
2000), and the term "SEIR" shall mean "Final Supplemental Environmental Impact Report" for
"Big League Dreams City Park, Sports Complex and Commercial Retail Center," dated November
13, 2003, which accompanies the "Draft Supplemental Environmental Impact Report" for the
same project title (State Clearinghouse Number 2002081092), dated May 2003.
(g) Buyer acknowledges that the Property is subject to environmental mitigation
measures for the preservation of habitat for the California gnatcatcher and that Coastal Sage
Scrub ("CSS") habitat is located on a portion of Parcel 11, which is adjacent to the 700 and 750
pads ( Parcels 12 and 13) and would be impacted by the proposed Project. Buyer shall perform
all mitigation measures and habitat restoration required for a portion of Parcel 1 l,and all of
Parcels 12 and 13. Buyer shall pay for the costs to re -vegetate, establish and monitor CSS habitat
in accordance with the approved U.S. Fish and Wildlife Service Biological Opinion dated June 5,
2003 and Conceptual Coastal Sage Scrub Conservation and Monitoring Plan dated May 22,
2003. Upon mutual agreement of the parties, the Buyer may pay the initial costs to have CDC
install, maintain and monitor the re -vegetated coastal sage scrub for a monitoring period of five
years as set forth in the Conceptual Coastal Sage Scrub Conservation and Monitoring Plan dated
May 22, 2003.
(h) Buyer and all subsequent purchasers of the Site, shall participate in a Coastal Sage
and Scrub Community Facilities District ("CFD") formed by the Seller for maintenance of the
gnatcatcher habitat and established in accordance with applicable requirements of the United
States Fish and Wildlife Service ("USFWS").
(i) Buyer shall satisfy all conditions to the City's approved Parcel Map 60193 (the
"Parcel Map") for parcels twelve (12) and thirteen (13).
0) Buyer shall pay for all City development fees.
(k) Buyer shall comply with all applicable local, state and federal laws.
(1) Buyer shall comply with all conditions of approval and mitigation measures and
any costs associated with such conditions and mitigation measures.
(m) Within twenty-four (24) months after the execution of this Agreement Buyer shall
commence construction of the buildings for the Project in accordance with plans, specifications
and permits approved by the City of West Covina. The Seller may extend the 24-month time
period at the request of Buyer and upon a showing of reasonable good cause. Buyer shall
complete construction of the Project not later than fourteen (14) months after commencement of
such work.
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• (n) Prior to the commencement or continuation of any construction on the Property
pursuant to Buyer's Obligations under Sections 4.3 of this Agreement (the "Construction Work"),
•
the Buyer shall add to its general liability insurance policy and maintain such policy in effect
until the completion of all of the Construction Work (as reasonably determined by the Seller)
coverage for bodily injury and property damage in the minimum amount of Two Million Dollars
($2,000,000.00) per occurrence. The policy shall name, as additionally assureds, the Seller, the
City of West Covina and their officers and employees in their official capacity and while acting
within the scope of their duties, against all claims, suits, or other actions of any nature brought
for or on account of any deaths, injuries, damage or loss, arising out of or connected with the
work of Construction Work under this Agreement.
(1) Insurance coverage furnished by Buyer, pursuant to this Section 4.3(n),
may be submitted as one or more policies or part of a blanket policy, but coverage shall conform
to this Section 4.3(n) and shall pertain to all activities on the Property and shall require
commercially reasonable approval by the Seller.
(2) Buyer shall furnish Seller a certificate of insurance from its insurer
evidencing compliance with this Section 4.3(h) with the provision that the insurer shall endeavor
not to cancel or modify the policy without thirty (30) days written notice to Seller. Buyer shall
give Seller prompt and timely notice of any claim made or suit instituted. Seller and City, and
their officers and employees, in their official capacity and while acting within the scope of their
duties, shall also be named as additionally insured in any policies of Buyer's contractors covering
work under this Agreement; and such policies shall comply with this Section 4.3(h). Coverage
shall be primary and not contributing with any policy or coverage maintained by or obtained by
the Seller, and shall include an appropriate endorsement and waiver of subrogation.
(3) Buyer shall comply with all of the provisions of the Workers'
Compensation Insurance and Safety Acts of the State of California, the applicable provisions of
Division 4 and 5 of the California Labor Code, and all amendments thereto, and all similar State
or Federal acts or laws applicable, and arising thereunder. Buyer shall furnish to Seller a
certificate of Worker's Compensation insurance providing that the insurer shall endeavor not to
cancel or modify the policy without thirty (30) days prior written notice to Seller. As an
alternative, Buyer may show proof of a certificate of consent to self -insure issued by the Director
of Industrial Relations, pursuant to California Labor Code §3800.
(4) Buyer agrees to and shall indemnify, defend and hold harmless the Seller
and the City from and against all claims, demands, liabilities, losses, damages, costs, mechanics'
liens, or expenses (including reasonable attorneys' fees and court costs) arising from or relating
to the death of any person or any accident, injury, loss, or damage whatsoever to person or
property which shall arise out of the Construction Work and which shall be directly or indirectly
caused by any acts, errors or omissions of Buyer or its agents, servants, employees, tenants, or
contractors. Buyer shall not be responsible for, and this indemnity shall not apply to, such
matters to the extent caused by any acts, errors, or omissions of the Seller or the City or their
respective agents, servants, employees, or contractors.
(o) Buyer warrants that the minimum assessed valuation of the Project shall be
$10,000,000 or more upon the completion of the construction of the Project, and Buyer shall not
file an appeal to lower the assessed valuation of the project below the ten million ($10,000,000)
threshold.
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MAGabaeePurchaseAgrmtSEN7-11-06CIn
• (p) Buyer acknowledges that the Property is located adjacent to a now closed landfill
site (the "BKK Landfill Site"). At Close of Escrow, Buyer shall take title subject to all
mitigation measures required by the EIR and subject to the conditions of all Discretionary
Entitlements. Additionally, Buyer shall be responsible to implement, at Buyer's cost, unless
otherwise relieved of such costs by agreement or order, environmental remedies or other actions
required to be performed by the owner of the Property following the Close of Escrow under the
EPA Agreement, the DTSC Agreement, the BKK Agreement, the EIR, the SEIR, and any other
agreements related to the development or improvement of the Property that are the obligation of
the Property.
(q) The provisions of this Section 4.3 shall be covenants running with the land or
equitable servitudes and shall be binding upon and inure to the benefit of the heirs. successors,
transferees and assigns of Buyer and Seller. The provisions of this Section 4.3 shall survive the
transfer of the Property from Seller to Buyer and shall be contained in the Grant Deed
transferring the Property from Seller to Buyer.
4.4 POWER OF TERMINATION
(a) If Buyer fails to perform any of the obligations specified in Section 4.3 of this
Agreement in a timely manner, then Seller shall have a power of termination in accordance with
California Civil Code Section 885.010 to re-enter the Property and revest fee simple title in
Seller. The power of termination shall be exercised by Seller in the following manner:
(1) Seller shall give written notice to Buyer of any failure of Buyer to timely
perform Buyer's obligations pursuant to Section 4.3 of this Agreement.
(2) If Buyer fails to commence corrective action within 30 days of mailing of
the notice by Seller to Buyer, and diligently and in good faith complete the corrective action
within an additional 60 days, or a longer period agreed upon in writing by the parties reasonably
necessary to complete the corrections, then Seller may give written notice to Buyer of Seller's
exercise of the power of termination revesting fee simple title to the Property in Seller.
(3) Upon receipt by Buyer of the notice of Seller's exercise of the power of
termination, Buyer shall sign a grant deed conveying fee simple title to the Property to Seller.
(4) Upon payment of the original Purchase Price of $1,185,000 plus Buyers
actual documented hard costs for constructing any improvements, from Seller to Buyer, Buyer
shall deliver the signed grant deed to Seller. "Actual documented hard costs for constructing any
improvements" means documented costs for labor, materials and supplies actually used to
construct the improvements to the Property. It does not include any soft costs such as overhead,
administration or insurance.
(5) If Buyer fails to deliver the grant deed to the Property to Seller, then Seller
can commence legal action to enforce the power of termination. Seller shall recover all of its
costs, fees, expenses, expert fees, and attorney fees of such legal action to enforce the power of
termination.
5. EXCHANGE.
5.1 Buyer and Seller acknowledge that Buyer shall have the right to cause this
Agreement to be modified so that Buyer may have the transaction qualify as an exchange under
• Section 1031 of the Internal Revenue Code of 1954, and the California Revenue and Taxation
Code. Buyer shall exercise its right to modify this Agreement by giving Seller written notice by
8
MAGabaeePurchaseAg=tSEN7-11-06CIn
• July 28, 2006, setting forth in such notice all of the conditions relating to such exchange. Seller
agrees to fully cooperate with Buyer to modify this Agreement as is necessary. Seller shall bear
no additional cost, expense or liability (whether actual or contingent) as a result of the exchange
transaction. If the parties to this Agreement are unable to agree as to the terms of the
modification of this Agreement to allow Buyer to exchange the Property by July 28, 2006, the
Close of Escrow shall take place as if the Seller had not exercised its right to exchange the
property.
LJ
6. REPRESENTATIONS AND WARRANTIES
6.1 SELLER'S WARRANTIES
Seller makes the representations and warranties in this Paragraph 6.1, each and all of
which shall survive any and all inquiries and investigations made by Buyer and shall survive the
Close of Escrow and recordation of the Grant Deed.
(a) The Community Development Commission of the City of West Covina is
a public body, corporate and politic, duly organized, validly existing and good standing under the
laws of the State of California, and has the power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. Seller, and the specific individual parties
signing this Agreement on behalf of Seller represent and warrant that the parties signing this .
Agreement on behalf of the Seller have the full legal power, authority and right to execute and
deliver this Agreement.
(b) Neither the entering into this Agreement nor the performance of any of
Seller's obligations under this Agreement will violate the terms of any contract, agreement or
instrument to which Seller is a party.
(c) Seller to its actual knowledge is unaware that any of the easements,
covenants, conditions, restrictions or agreements to which the Real Property is subject interferes
with or is breached by the use or operation of the Real Property as presently used and operated as
a vacant parcel.
(d) Seller is not involved with, and to its actual knowledge is unaware of any
litigation, and no arbitration proceedings have been commenced, which do or will affect any
aspect of the Property or Seller's ability to perform its obligations under this Agreement.
6.1.5 Brokers
Seller has neither engaged nor dealt with any broker or finder in connection with
the sale contemplated by this Agreement. Seller shall pay, and shall hold Buyer harmless from
and against, any commission or finder's fee payable to any party who represents or claims to
represent Seller.
6.1.6 No Alterations
Seller will not alter the physical condition of the Property from and after the date
of this Agreement, reasonable wear and tear excepted. If, through no fault of Seller, the physical
condition of the Property is different on the date scheduled for the Close of Escrow than as of the
date of this Agreement, the terms and conditions of Paragraph 6.1.7, below shall apply.
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MAGabaeePurchaseAgtrntSEN7-11-06CIn
6.1.7 Changed Conditions
If, prior to the Close of Escrow, new events have occurred which were beyond the
control of Seller and which render any previously true representation or warranty untrue, Seller
shall, within five (5) days thereafter, disclose those matters by written notice to Buyer. Buyer
shall have ten (10) days after the earlier of (i) such disclosure; or (ii) Buyer's independent
discovery that such representation or warranty has become untrue, to elect, in its sole and
absolute discretion, and as its sole remedy, by written notice to Seller within said ten (10) day
period, whether (i) to purchase the Property or (ii) terminate this Agreement. If Buyer elects to
terminate this Agreement pursuant to this Paragraph 6.1.7, Escrow shall immediately terminate
upon Seller's receipt of Buyer's notice of election to terminate this Agreement and all sums and
documents deposited in Escrow shall be returned to the parties who deposited the same and
Seller and Buyer shall each pay one-half (1/2) of Escrow costs. If Buyer fails to notify Seller and
Escrow Holder of its election to terminate this Agreement within said ten (10) day time period
provided above, Buyer shall be deemed to have accepted the modified representations and
warranties and elected to purchase the Property.
6.1.8 Other than those express representations and warranties contained in this
Agreement, Seller makes no warranty or representation, express or implied, including but not
limited to, implied warranties of merchantability and fitness for a particular purpose.
6.1.9 Except to the extent Seller has made a specific representation and warranty
with respect thereto, no document or information provided by Seller to Buyer shall constitute a
representation as to the completeness or accuracy of such documents or information.
6.2. REPRESENTATIONS AND WARRANTIES BY BUYER.
Buyer makes the following representations and warranties in this Section 6.2 each and all
of which shall survive any and all inquiries and investigations made by Seller and shall survive
the Close of Escrow and recordation of the Grant Deed.
(a) Each and all of the information and any financial references delivered by
Buyer to Seller is true and correct.
(b) M & A Gabaee is a California limited partnership duly organized, validly
existing and good standing under the laws of the State of California which has the power and
authority to enter into this Agreement and to consummate the transactions contemplated hereby.
The Buyer, and the specific, individual parties signing this Agreement on behalf of Buyer
represent and warrant that the parties signing this Agreement on behalf of the Buyer have the full
legal power, authority and right to execute and deliver this Agreement.
(c) Buyer has or will make its own investigation concerning the physical
condition of the Property, condition of title or any other matter pertaining to the Property, and,
other than the specific representations and warranties made by Seller pursuant to this Agreement,
Buyer is not relying on any representations, warranties or inducements of Seller or Seller's broker
with respect to the physical condition of the Property, condition of title to the Property, or any
other matter pertaining to the Property. Accordingly, except for those specific representations and
warranties of Seller set forth in this Agreement, Buyer is purchasing the Property and each and
every aspect thereof in an "as -is" condition, and Seller makes no express or implied
• representation concerning (i) the status of title to the Property; (ii) any Leases; (iii) the current or
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MAGabaeePurchaseAgrmtSEN7-11-06CIn
• future real estate tax liability, assessment or valuation of the Property; (iv) the compliance of the
Property in its current or future state with applicable laws or any violations thereof, including
without limitation, those relating to access for the handicapped, environmental or zoning matters,
or the ability to obtain a change in the zoning of the Property; (v) the nature and extent of any
right-of-way, lease, lien, encumbrance, license or reservation; (vi) the availability of any
financing for the purchase, alteration or operation of the Property from any source, including,
without limitation, any governmental authority or lender; (vii) the current or future use of the
Property; (viii) the viability or financial condition of any tenant; and (ix) the actual or projected
income or operation expenses of the Property.
0
6.2.1 Brokers
Buyer has neither engaged nor dealt with any broker or finder in connection with
the sale contemplated by this Agreement. Buyer shall pay, and shall hold Seller harmless from
and against, any commission or finder's fee payable to any party who represents or claims to
represent Buyer.
7. INDEMNIFICATION.
7.1 Subject to any other provisions of this Agreement to the contrary, each party
agrees to indemnify ("hndemnitor") and hold the other party ("Indemnitee") harmless from and
against any claim, loss, damage or expense, including any reasonable attorneys fees (including
attorneys fees on appeal), asserted against or suffered by the Indemnitee resulting from:
(a) Any breach by the Indemnitor of this Agreement;
(b) Any liability of the Indemnitor with respect to the Property, or otherwise,
as provided in Paragraph 8, below; or
(c) The inaccuracy or breach of any of the representations, warranties or
covenants made by the Indemnitor.
7.2 Indemnitee shall submit any claim for indemnification under this Agreement to
the Indemnitor in writing within a reasonable time after Indemnitee determines that an event has
occurred which has given rise to a right of indemnification under this Paragraph 7 and shall give
Indemnitor a reasonable opportunity to investigate and cure any default of Indemnitor under this
Agreement and eliminate or remove any claim by a third party. Notwithstanding the foregoing, if
the nature of Indemnitor's default or the third party claim is such that it would be impractical or
unreasonable to give Indemnitor an opportunity to investigate and cure such default and remove
such claim, Indemnitee need not give Indemnitor such opportunity.
7.3 If such claim for indemnification relates to a claim or demand presented in writing
by a third party against Indemnitee, Indemnitor shall have the right to employ counsel reasonably
acceptable to Indemnitee to defend any such claim or demand, and Indemnitee shall make
available to Indemnitor, or its representatives, all records and other materials in its possession or
under its control reasonably required by Indemnitor for its use in contesting such liability. If
hndemnitor does not elect to defend any such claim or demand, Indemnitee may do so at its
option, but shall not have any obligation to do so.
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MAGabaeePurchaseAgrmtSEN7-11-06CIn
. 7.4 Buyer shall indemnify, hold harmless and defend the Seller, its agents, officers,
and employees from any claim, action, proceeding or damages against the Seller, its agents,
officers, or employees to attack, set aside, void, or annul the approval by the Seller of this
Agreement or any of the development entitlements for the Property or the Project. Further, the
Buyer shall indemnify, hold harmless and defend the Seller, its agents, officers, and employees
from any claim, action, proceeding or damages against the Seller, its agents, officers, or
employees arising out of the action, inaction or negligence of the Buyer, its employees, officers,
agents, contractors, subcontractors, successors or assigns in planning, engineering, constructing
or in any manner carrying out this Agreement or the development entitlements or improvements
for the Property or the Project.
Further, Buyer shall defend at its sole expense any action brought against the Seller, its
agents, officers, or employees, because of the approval of this Agreement or any of the
development entitlements or improvements for the Property or the Project, or in the alternative,
to relinquish such approval. The Buyer shall reimburse the Seller, its agents, officers, or
employees, for any Court costs and attorney's fees which the Seller, its agents, officers, or
employees may be required by a court to pay as a result of such action. The Seller may, at its
sole discretion, participate at its own expense in the defense of any such action but such
participation shall not relieve Buyer of its obligations under this Indemnity Agreement.
In the case of any such defense by Buyer, Seller shall cooperate in the choice of defense
counsel, but in the case of disagreement, Seller shall have the choice of choosing independent
defense counsel at the cost of Buyer, or in the alternative to defend itself, at the cost of Buyer.
8. ASSUMPTION OF LIABILITIES.
8.1 Effective as of the Close of Escrow, Buyer shall be deemed to have assumed all
obligations and liabilities of Seller pertaining to the Property. Except as specifically provided in
this Agreement, all obligations and liabilities with respect to the Property which arise prior to the
Close of Escrow or which arise as a result of events which occur prior to the Close of Escrow
shall be the responsibility of Seller.
9. LIQUIDATED DAMAGES.
(a) IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS
HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, IT IS AGREED THAT
THE DEPOSIT ACTUALLY MADE PURSUANT TO PARAGRAPH 2(a) OF THIS
AGREEMENT SHALL BE NON- REFUNDABLE AND SELLER SHALL BE ENTITLED TO
SUCH DEPOSITS, WHICH AMOUNTS SHALL BE ACCEPTED BY SELLER AS
LIQUIDATED DAMAGES AND NOT AS A PENALTY AND AS SELLER'S SOLE AND
EXCLUSIVE REMEDY. IT IS AGREED THAT SAID AMOUNT CONSTITUTES A
REASONABLE ESTIMATE OF THE DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ. BUYER AND SELLER AGREE THAT
IT WOULD BE IMPRACTICAL OR IMPOSSIBLE TO PRESENTLY PREDICT WHAT
MONETARY DAMAGES SELLER WOULD SUFFER UPON BUYER'S FAILURE TO
• COMPLETE ITS PURCHASE OF THE PROPERTY. BUYER DESIRES TO LIMIT THE
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MAGabaeePurchmeAgrmtSEN7-11-06CIn
• MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE HEREUNDER AND BUYER
AND SELLER DESIRE TO AVOID THE COSTS AND DELAYS THEY WOULD INCUR IF
A LAWSUIT WERE COMMENCED TO RECOVER DAMAGES OR OTHERWISE
ENFORCE SELLER'S RIGHTS. IF FURTHER INSTRUCTIONS ARE REQUIRED BY
ESCROW HOLDER TO EFFECTUATE THE TERMS OF THIS PARAGRAPH 9, BUYER
AND SELLER AGREE TO EXECUTE THE SAME. THE PARTIES ACKNOWLEDGE THIS
PROVISION BY PLACING THEIR INITIALS BELOW: (S
BUYER: SELLER:
(b) IF BUYER FAILS TO PERFORM ITS OBLIGATIONS PURSUANT TO
SUBSECTIONS 4.3(a), (b) or (c) OF THIS AGREEMENT, IT IS AGREED THAT BUYER
SHALL PAY TO SELLER THE SUM OF $2,000 PER DAY FOR EACH DAY THE FAILURE
TO COMPLETE SUCH OBLIGATIONS IS NOT CORRECTED. SUCH AMOUNTS SHALL
BE ACCEPTED BY SELLER AS LIQUIDATED DAMAGES AND NOT AS A PENALTY. IT
IS AGREED THAT SAID AMOUNT CONSTITUTES A REASONABLE ESTIMATE OF THE
DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ET
SEQ. BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL OR
IMPOSSIBLE TO PRESENTLY PREDICT WHAT MONETARY DAMAGES SELLER
WOULD SUFFER UPON BUYER'S FAILURE TO PERFORM THE OBLIGATIONS.
BUYER DESIRES TO LIMIT THE MONETARY DAMAGES FOR WHICH IT MIGHT BE
LIABLE HEREUNDER AND BUYER AND SELLER DESIRE TO AVOID THE COSTS AND
DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCED TO RECOVER
DAMAGES OR OTHERWISE ENFORCE SELLER'S RIGHTS. THE PARTIES
ACKNOWLEDGE THIS PROVISION BY PLACING THEIR INITIALS BELOW:
BUYER: SELLER:
10. BUYER'S WAIVER OF RIGHT TO COMPEL SPECIFIC PERFORMANCE.
(a) As an inducement to Seller to enter into this Agreement, Buyer specifically agrees
that it shall not have, and hereby forever relinquishes and waives, any right to compel Seller to
specifically perform this agreement or otherwise compel Seller to sell the Property to Buyer.
Buyer further acknowledges and agrees that the Property is not unique; that the Property is not
being purchased for speculative, investment purposes; that Buyer will not suffer irreparable harm
if Seller fails to convey title; and that money damages will be an adequate remedy to compensate
Buyer for Seller's failure to sell the Property to Buyer. Buyer hereby agrees that it will not, and
waives any right to, file any lis pendens against the Property (or any portion thereof) and Buyer
further waives any right to seek specific performance under California Civil Code Sections 3384,
et seq.
(b) IF SELLER FAILS TO COMPLETE THE SALE OF THE PROPERTY AS
HEREIN PROVIDED BY REASON OF ANY DEFAULT OF SELLER, IT IS AGREED THAT
THE BUYER SHALL BE ENTITLED TO THE AMOUNT OF $50,000, WHICH AMOUNT
SHALL BE ACCEPTED BY BUYER AS LIQUIDATED DAMAGES AND NOT AS A
13
MAGabaeePunhaseAgrmt5EN7-11-06CIn
• PENALTY AND AS BUYER'S SOLE AND EXCLUSIVE REMEDY. IT IS AGREED THAT
SAID AMOUNT CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES TO
BUYER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ. BUYER
AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL OR IMPOSSIBLE TO
PRESENTLY PREDICT WHAT MONETARY DAMAGES BUYER WOULD SUFFER UPON
SELLER'S FAILURE TO COMPLETE ITS SALE OF THE PROPERTY. SELLER DESIRES
TO LIMIT THE MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE
HEREUNDER AND BUYER AND SELLER DESIRE TO AVOID THE COSTS AND
DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCED TO RECOVER
DAMAGES OR OTHERWISE ENFORCE BUYER'S RIGHTS. IF FURTHER
•
INSTRUCTIONS ARE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE TERMS
OF THIS PARAGRAPH 10, BUYER AND SELLER AGREE TO EXECUTE THE SAME.
THE PARTIES ACKNOWLEDGE THIS PROVISION BY PLACING THEIR INITIALS
BELOW:
BUYER: SELLER:
11. ESCROW AND CLOSING.
11.1 OPENING OF ESCROW
Within three (3) days after the full execution of this Agreement, Buyer and Seller shall
open an escrow, (the "Opening of Escrow") for the purpose of consummating the purchase and
sale contemplated by this Agreement ("Escrow") by depositing an executed copy of this
Agreement with Company, at California ("Escrow
Holder"). This Agreement shall constitute escrow instructions to Escrow Holder. Seller and
Buyer shall, promptly upon request by Escrow Holder, execute such additional escrow
instructions as may be reasonably required by Escrow Holder, including Escrow Holder's
standard printed conditions and stipulations with respect to escrows concerning the purchase and
sale of real property; provided, however, that if there is any conflict between the provisions of
this Agreement and the provisions of any such additional instructions, the provisions of this
Agreement shall prevail. Upon delivery to Escrow of a fully executed copy of this Agreement by
both parties, Escrow shall be deemed opened on the terms and conditions set forth in this
Agreement.
11.2 CLOSE OF ESCROW
Escrow shall close, and the Grant Deed shall be recorded in the Office of the County
Recorder of Los Angeles County, California not later than thirty (30) days after the Opening of
Escrow ("Close of Escrow").
11.3 SELLER DELIVERIES TO ESCROW
Within the time set forth below, or if none is specified, prior to the Close of Escrow,
Seller shall deliver to Escrow Holder, or if so indicated, to Buyer, the following documents and
items:
14
MAGabaeePurchaseAgrmtSEN7-11-06CIn
• (a) At least one (1) day prior to the Close of Escrow, the duly executed and
acknowledged Grant Deed.
(b) At least one (1) day prior to Close of Escrow, Seller shall deliver such
certifications, declarations or other documents as may be required under Internal Revenue Code
Sec. 1445 and California Revenue and Tax Code Sec. 18662, together with any and all other
documents required by law pertaining to foreign or out-of-state sellers.
lr
u
11.4 BUYER'S DELIVERIES TO ESCROW
Buyer shall deliver to Escrow Holder prior to the Close of Escrow the balance of the cash
portion of the Purchase Price set forth in Paragraph 2, as adjusted pursuant to this Agreement,
together with an additional sum sufficient to cover Buyer's closing costs as set forth in Paragraph
11.7.2, below.
11.5 COMPLETION OF ESCROW
(a) On the Close of Escrow, the Escrow Holder shall record the Grant Deed and shall
deliver the monies and instruments to which each party is entitled pursuant to this Agreement,
only when the Title Company is in a position to issue its CLTA [or, if applicable, ALTA] policy
of title insurance subject only (i) to the Permitted Exceptions; and (ii) Title Company's standard
pre-printed exceptions, with liability in the amount of the purchase price, showing title to the
Real Property vested in Buyer (or as designated by Buyer) ("Title Policy").
(b) Upon Close of Escrow, possession of the Property shall be delivered to Buyer
subject to the Permitted Exceptions and the following items, documents and monies shall be
delivered to the parties by Escrow Holder as set forth below:
(1) To Seller: the cash portion of the Purchase Price as set forth in
Paragraph 2 as adjusted pursuant to this Agreement and reduced by the amount of Seller's closing
costs as set forth in Paragraph 13.7.1, below.
(2) To Buyer: the Title Policy.
11.6 COSTS OF ESCROW
Upon Close of Escrow, Escrow and title charges shall be paid in the manner provided below.
11.7.1 Seller shall pay:
(a) The cost of the CLTA portion of the Title Policy.
(b) The cost of any and all documentary transfer tax or stamps or other sales
tax.
(c) One-half (1/2 ) of the Escrow fees.
11.7.2
Buyer shall pay:
(a)
All recording fees.
(b)
One-half ( 1/2 ) of the Escrow fees.
(c)
All costs of additional title insurance, endorsements or surveys beyond the
CLTA policy provided by Seller.
15
MAGabaeePurcha eAgmtSEN7-11-06C1n
• 11.7.3 Escrow Holder is authorized and instructed to debit Seller and Buyer for
closing costs as set forth in Paragraphs 11.7.1 and 11.7.2 above and as otherwise provided in this
Agreement.
11.7.4 If Escrow fails to close as a result of the default of this Agreement by a
party, the defaulting party shall pay all title and escrow charges; provided, however, that nothing
in this Paragraph 11 shall be deemed to limit, and the provisions of this Paragraph 11 shall be in
addition to, all other rights and remedies of the non -defaulting party.
12. PRORATIONS.
12.1 Proration shall be made as of the Close of Escrow. All prorations shall be made
on the basis of a thirty (30) day month and shall be paid in cash to Seller if it is entitled thereto,
or shall be credited against the cash portion of the Purchase Price if Buyer is entitled thereto.
Such prorations shall be made by Escrow Holder on the basis of a statement(s) approved by
Buyer and Seller and deposited into the Escrow prior to the Close of Escrow. The date used for
prorations is hereinafter referred to as the "Proration Date."
(a) All real estate taxes and all personal property taxes due and owing as of the
Proration Date, and all penalties and interest thereon, shall be paid by Seller. Current real estate
taxes, special assessments and personal property taxes which are not yet due and owing shall be
prorated based upon the most recent tax bill, so that the portion of current taxes allocable to the
period from the beginning of such tax year through the Proration Date shall be charged to and
paid by Seller and the portion of the current taxes allocable to the portion of such tax year from
the Proration Date to the end of such tax year shall be charged to and paid by Buyer. Proration of
taxes and assessments shall be final as of the Proration Date, regardless of the amount of taxes or
assessments that actually are, or subsequently become, due.
(b) Expenses of operating the Property (other than insurance premiums, taxes
and utility charges) which were prepaid by Seller for a period beyond the Proration Date shall be
credited to Seller.
12.2 Buyer shall be responsible for obtaining and paying for utility services from and
after Close of Escrow.
13. DAMAGE OR DESTRUCTION PRIOR TO CLOSE OF ESCROW.
If the Property, or any portion thereof, is damaged or destroyed prior to the Close of
Escrow from any cause whatsoever, whether an insured risk or not, including but not limited to,
fire, flood, accident or other casualty which, according to the Buyer's and Seller's best estimate,
would cost more than Five Thousand Dollars ($5,000) to repair, Buyer shall have the option,
upon written notice to Seller, to either (i) terminate this Agreement, or (ii) purchase the Property.
If Buyer elects to terminate this Agreement, Escrow shall immediately terminate upon Seller's
receipt of Buyer's notice of election to terminate and Escrow Holder shall thereupon promptly
return all documents, items and monies in its possession to the party who shall have deposited
same with Escrow Holder. In the event of such termination, each party shall pay one-half ( 1/2 )
of the Escrow fees. If Buyer elects to purchase the Property, Buyer shall be entitled to, and Seller
shall assign to Buyer, all insurance proceeds covering such damage or destruction and, in
• addition, Seller shall pay Buyer the amount of any deductible (which can be paid by Seller by
16
MAGabaeePurchaseAgrmtSEN7-11-06CIn
• means of a credit against the Purchase Price). In the event that Buyer's and Seller's best estimate
of the cost of repair is Five Thousand Dollars ($5,000) or less, Buyer shall purchase the Property
and be entitled to, and Seller shall assign to Buyer, all insurance proceeds covering such damage
or destruction. In addition, the difference between the amount of insurance proceeds available
and the cost of repair shall be deducted from the cash portion of the Purchase Price. Should any
damage or destruction occur prior to the Close of Escrow, the date scheduled for the Close of
Escrow shall be extended for a period of time not to exceed thirty (30) days, for the purpose of
allowing Buyer and Seller sufficient time to estimate the cost of repair. If Buyer fails to notify
Seller of its election under this Paragraph 13, Buyer shall be deemed to have elected to purchase
the Property.
14. EMINENT DOMAIN.
14.1 The words "condemnation" or "condemned" as used in this Paragraph 14 shall
mean the exercise of, or intent to exercise, the power of eminent domain expressed in writing, as
well as the filing of any action or proceeding for such purpose, by any person, entity, body,
agency or authority having the right or power of eminent domain (the "condemning authority").
14.2 If Seller receives written notice from a condemning authority advising of a
condemnation of all or any portion of the Property ("Condemnation Notice"), Seller shall
immediately advise Buyer of same in writing and deliver therewith a copy of the Condemnation
Notice. Within ten (10) days after Buyer's receipt of the Condemnation Notice, Buyer shall notify
Seller of its election to either (i) terminate this Agreement and the Escrow or (ii) purchase the
Property. If Buyer elects to terminate this Agreement, Escrow shall immediately terminate upon
Seller's receipt of Buyer's notice of election to terminate this Agreement and Escrow Holder shall
thereupon promptly return all documents, items and monies in its possession to the party who
shall have deposited same with Escrow Holder. In the event of such termination, each party shall
pay one-half ( 1/2 ) of the Escrow fees. If Buyer elects to purchase the Property, Seller shall
transfer to Buyer at the Close of Escrow all proceeds from condemnation or Seller's right to
receive all such proceeds. If Buyer fails to notify Seller of its election under this Paragraph 14,
Buyer shall be deemed to have elected to purchase the Property.
15. SURVIVAL OF CLOSE OF ESCROW.
All representations, warranties, covenants, conditions, agreements and obligations
contained in or relating to this Agreement shall survive the Close of Escrow and the recordation
of the Grant Deed and shall not merge therein unless specifically stated otherwise in this
Agreement.
16. NOTICES.
All notices to be given pursuant to this Agreement shall be either (i) personally delivered;
(ii) sent via certified or registered mail, postage prepaid; (iii) overnight courier (such as Federal
Express, DHL, etc.); or (iv) by telecopy transmittal. If sent via certified or registered mail, receipt
shall be deemed effective forty-eight (48) hours after being deposited in the United States mail. If
sent via telecopy transmission, a confirming copy shall be sent to the sender, and receipt of the
telecopy transmittal shall be deemed made twenty-four (24) hours after the sending thereof. If
sent via overnight courier, receipt shall be deemed effective twenty-four (24) hours after the
17
MAGabaeePurchaseAgrmISEN7-11-06CIn
sending thereof. All notices to be given pursuant to this Agreement shall be given to the parties at
the following respective address.
to Buyer:
M & A Gabaee, L.P.
1888 Century Park East, Suite 450
Los Angeles, CA 90067
Attention: Arman Gabaee
Telecopier No.: (310) 247-1525
with a copy to:
to Seller.
Telecopier No.:
Community Development Commission of the City of West Covina
1444 West Garvey Avenue
West Covina, CA 91793
Attention: Executive Director
Telecopier No.: (626) 939-8665
with a copy to:
Arnold M. Alvarez-Glasman, Esq.
Alvarez-Glasman & Colvin
100 North Barranca Avenue, Suite 1050
West Covina, CA 91791
Telecopier No.: (626) 858-2779
to Escrow Holder:
Telecopier No.:
17. ENTIRE AGREEMENT.
This Agreement, and the Exhibits attached hereto, represent the entire Agreement
between the parties in connection with the transactions contemplated hereby and the subject
matter hereof and this Agreement supersedes and replaces any and all prior and contemporaneous
. agreements, understandings and communications between the parties, whether oral or written,
18
MAGabamPurchaseAgrmtSEN/-11-06CIn
. with regard to the subject matter hereof. There are no oral or written agreements, representations
or inducements of any kind existing between the parties relating to this transaction, which are not
expressly set forth herein. This Agreement may not be modified except by a written agreement
signed by both Buyer and Seller. Without limiting the foregoing, Buyer and Seller expressly
acknowledge and agree that they have not relied on any written or oral statements made by the
other party's real estate broker in entering into this Agreement.
18. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, legal representatives, administrators, successors in interest and assigns.
•
19. WAIVER.
No waiver by any party at any time of any breach of any provision of this Agreement shall
be deemed a waiver or a breach of any other provision herein or a consent to any subsequent
breach of the same or another provision. If any action by any party shall require the consent or
approval of another party, such consent or approval of such action on any one occasion shall not
be deemed a consent to or approval of such action on any subsequent occasion or a consent to or
approval of any other action.
20. CAPTIONS AND HEADINGS. ,
The captions and paragraphs numbers appearing in this Agreement are inserted only as a
matter of convenience and do not define, limit, construe, or describe the scope or intent of this
Agreement.
21. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be considered an
original and all of which taken together shall constitute one and the same instrument.
22. GOVERNING LAW.
This Agreement has been prepared, negotiated and executed in, and shall be construed in
accordance with, the laws of the State of California. Any action or proceeding relating to or
arising out of this Agreement shall be filed, if a State action, in the Superior Court of the State of
California for the County of Los Angeles, or if a Federal action, in the United States District
Court for the Central District of California.
23. ATTORNEYS FEES.
If either party named herein brings an action or proceeding to enforce the terms hereof or
declare rights hereunder, the prevailing party in any such action (or proceeding), on trial or
appeal, shall be entitled to its.reasonable attorneys' fees to be paid by the losing party as fixed by
the Court (or if applicable, the arbitrator).
24. TIME OF ESSENCE.
Time is of the essence with respect to all matters contained in this Agreement.
19
MAGabaeePurcha eAgrmtSEN7-11-06C1n
. 25. DATE OF AGREEMENT.
All references in this Agreement to "the date of this Agreement" or "the date hereof' shall
be deemed to refer to the date set forth in the first paragraph of this Agreement.
26. INVALIDITY OF ANY PROVISION.
If any provision (or any portion of any provision) of this Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term of this
Agreement, the legality, validity, and enforceability of the remaining provisions (or the balance
of such provision) shall not be affected thereby.
27. NO RECORDATION.
Buyer shall not record this Agreement, any memorandum of this Agreement, any
assignment of this Agreement, or any other document which would cause a cloud on the title to
the Property.
28. DRAFTING OF AGREEMENT.
Buyer and Seller acknowledge that this Agreement has been negotiated at arm's length,
that each party has been represented by independent counsel and that this Agreement has been
drafted by both parties and no one party shall be construed as the draftsperson.
29. NO THIRD PARTY BENEFICIARY RIGHTS.
This Agreement is entered into for the sole benefit of Buyer and Seller and no other
parties are intended to be direct or incidental beneficiaries of this Agreement and no third party
shall have any right in, under or to this Agreement.
30. JOINT AND SEVERAL LIABILITY.
If either the Buyer or the Seller (separately) is comprised of more than one party, each
party constituting the Seller or Buyer, respectively, is jointly and severally liable for the
performance of this Agreement.
31. INCORPORATION OF EXHIBITS.
Each and all of the exhibits attached to this Agreement are incorporated herein as if set
forth in full in this Agreement.
32. NO JOINT VENTURE, PARTNERSHIP OR OTHER RELATIONSHIP
CREATED.
The relationship between Buyer and Seller is that solely of a seller and buyer and no joint
venture, partnership or other relationship is created or implied by this Agreement.
33. ASSIGNMENT
This Agreement may not be assigned by either party without the express written consent
of the other party, which consent shall not be unreasonably withheld.
34. DEFINITIONS
(a) As used in this Agreement, the term `BKK Agreement" means the Agreement of
Purchase and Sale and Joint Escrow Instructions between BKK Corporation (`BK1C) and CDC
20
MAGabaeePurchaseAgmtSEN7-11-06CIn
• (formerly known as the Redevelopment Agency of West Covina) dated June 27, 2002, as
amended by Amendments dated November 7, 2002, December 6, 2002, January 27, 2003, April
28, 2003, May 22, 2003 and July 15, 2003.
(b) As used in this Agreement, the term "DTSC Agreement' shall mean the
Prospective Purchase Agreement between California Environmental Protection Agency,
Department of Toxic Substances Control ("DTSC") and the City of West Covina dated July 9,
2003.
(c) As used in this Agreement, the term "EPA Agreement" shall mean the Agreement
and Covenant Not to Sue the City of West Covina, California between the United States on
behalf of the Environmental Protection Agency ("EPA") and the City of West Covina dated May
22, 2003.
(d)) As used in this Agreement, the term "EIR" shall mean the BKK Class IN Landfill
Closure, Postclosure Development Environmental Impact Report" (October 2000), and the term
"SEIR" shall mean "Final Supplemental Environmental Impact Report" for "Big League Dreams
City Park, Sports Complex and Commercial Retail Center," dated November 13, 2003, which
accompanies the 'Draft Supplemental Environmental Impact Report" for the same project title
(State Clearinghouse Number 2002081092), dated May 2003.
(e) As used in this Agreement the term 'Discretionary Entitlements" means any land
use or zoning approvals which have been granted for use of the Property or which may be
granted by the city of West Covina for the development of the Project.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set
forth in the first paragraph of this Agreement.
"SELLER" 'BUYER"
Community Development Commission of the City M & A Gabaee, L.P., a California Limited
of West Covina
am
Andrew G. Pasmant, Executive Director
ATTEST
Partnership
By:
Its:
By:
Laurie Carrico, CDC Secretary Its:
Approved as to form:
Arnold M. Alvarez-Glasman, CDC General
Counsel
21
M AGabaeePurchaseAgrmtSEN7-11-06CIn
•
•
. EXHIBIT A
Legal Description
Real property in the City of West, Covina, County of Los Angeles, State of
California, described as follows:
That certain parcel of land situated in the City of West Covina, County of Los Angeles, State of
California, being that portion of Parcel 12 of Parcel Map No. 60193 as shown on the map thereof
filed in Book 336, Pages 93 through 100, of Parcel Maps, in the Office of the County Recorder
of said County of Los Angeles, lying westerly of the following described line:
COMMENCING at the most southerly corner of said Parcel 12, said corner also being a point
on a curve for the southeasterly line of said parcel and concave southeasterly and having a radius
of 860.00 feet, a radial of said curve from said point bears South 54041'22" East; thence along
said curve and southeasterly line northeasterly 209.45 feet through a central angle of 13°57'16"
to the TRUE POINT OF BEGINNING; thence non -tangent from said curve North 10°38'25"
West 441.38 feet to a point in the northerly line of said Parcel 12, said point being North
84010'12" East 39.78 feet from the westerly terminus of that certain course shown as being
"North 84° 10' 12" East 99,22 feet" in said northerly line on said map.
MAGabaeePurchaseAgnntS EN7.11-06C1n
PA
•
•
EXHIBIT t'A-1"
Legal Description
PARCEL 13 OF PARCEL MAP 60193, IN THE CITY OF WEST COVINA, AS PER MAP FILED IN
BOOK 336, PAGES 93 THROUGH 100 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
MAGabaeePurchmeAgrmtSEN7-11-06CIn
23
E
WHEN RECORDED RETURN TO
MAIL TAX STATEMENTS TO:
EXHIBIT 'B"
Grant Deed
THE AREA ABOVE IS RESERVED FOR RECORDER'S USE
No recording fee required; this document exempt
from fee pursuant to Section 6103 of the
California Government Code
GRANT DEED
For a valuable consideration, receipt of which is hereby acknowledged.
THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST
COVINA, a public body, corporate and politic ("Grantor" or "Seller"), hereby grants to M & A
Gabaee, a California Limited Partnership ("Grantee" or 'Buyer"), that certain real property
described in Exhibits "A" and "A-1" attached hereto and incorporated herein by this reference
('Property").
1. The Grantee covenants and agrees to use, occupy and maintain the Property only
for the construction and operation of uses permitted by the Redevelopment Plan, the applicable
zoning of the City of West Covina, and related on- and off -site improvements.
2. The Grantee covenants by and for itself and any successors in interest that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee
itself or any person claiming under or through it establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use of
occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property.
All deeds, leases or contracts made relative to the Property, the improvements thereon or
any part thereof, shall contain or be subject to substantially the following nondiscrimination
• clauses:
24
MAGabaeePurchaseAg{mtS EN7-11-06CIn
• a. In deeds: "The Grantee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns and all persons claiming under or through
them, that there shall be no discrimination against or segregation of any person or group of
persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein
conveyed, nor shall the Grantee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the land herein conveyed. The forgoing covenants shall run with the
land."
b. In leases: "The Lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators and assigns, and all persons claiming under or through him
or her, and this lease made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or group
of persons on account of race, color, creed, religion, sex, marital status, national origin or
ancestry in the leasing, subleasing, transferring, use of occupancy, tenure or enjoyments of the
land herein leased, nor shall the lessee himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices if discrimination or
segregation with reference to the selection, location, number, use of occupancy of tenants,
lessees, sublessees, subtenants or vendees in the land herein leased."
C. In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land, nor shall the transferee himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection location, number, use or occupancy of tenants, lessees,
sublessees, subtenants or vendees in the land."
3. Grantee/Buyer covenants, warrants and agrees to perform the following "Buyers
Obligations" as described in the AGREEMENT OF PURCHASE AND SALE AND JOINT
ESCROW INSTRUCTIONS ("Agreement") between Grantee and Grantor dated , 2006:
(a) Within 90 days of the execution of this Agreement Buyer shall submit a Precise
Plan or appropriate land use entitlements / zoning applications to Seller and the Planning
Department of the City of West Covina for development of the Property as a quality
commercial/retail/office project (the "Project') in accordance with the uses and standards
specified in the Redevelopment Plan. Within 90 days of the execution of this Agreement, Buyer
shall also submit to the Seller for review and approval, which approval shall not be unreasonably
withheld, preliminary architectural plans for the development of the Property, including a plot
plan showing the general location of improvements, architectural design plans, building
elevations, and a landscaping plan.
(b) Upon sixty (60) days written notice from Seller, which may be extended for good
cause for an additional thirty (30) days by Seller, but in any event not later than three hundred
. sixty (360) days after Close of Escrow, Buyer shall commence excavating and transporting the
25
MAGabaeePurchaseAg=tSEN7-11-06CIn
•
excess soil from a portion of Parcel 11, and all of Parcels 12 and 13 to the top deck of the Class III
landfill (currently estimated at 637,000 cubic yards) and complete such excavation and
transportation not later than one hundred eighty (180) days after commencement of such work in
order to create development pads on Parcels 12 and 13 with adjacent slopes. The excavation and
transportation of excess soil shall be performed in accordance with the rough grading plans
labeled "Bid Set - January 12, 2004" for project No. GP04409 and more specifically described as
Sheets 13, 14 and 15, specifications approved by the CDC Director and the City Public Works
Director, and any necessary permits from the City of West Covina. Buyer shall be solely
responsible for the cost of the excavation and transportation of excess soil.
(c) Buyer shall be responsible for the cost, installation and completion of all public
infrastructure (road, curb, gutter, sidewalk, sewer, storm drain, all utilities, including, but not
limited to, water, gas, electric, telephone, cable television etc.) for the proposed commercial
development of the 700 and 750 pads and the upsizing of such improvements as necessary to
support the proposed golf course and clubhouse from the "stub -out point" located at the
northeasterly edge of the proposed BLD Sports Park (Lot 10 of Parcel Map 60193) up to the 700
and 750 pad sites (the northerly lot boundary of Parcel 13 of Parcel Map 60193) within the
boundaries of Parcel C of Parcel Map 60193, all as shown on Exhibit "D" attached to this
Agreement. In addition, the Buyer is solely responsible for the abandonment, relocation, removal
and or decommissioning of gas probes, gas wells, ground water wells or other such monitoring
devices, which are located on the Property and related to the adjacent closed landfill operations.
Not later than one hundred eighty (180) days after the commencement of grading and excavation
by Buyer, Buyer shall commence such installation and extension of all public improvements and
complete such installation and extension of all public improvements not later than one hundred
twenty (120) days after commencement of such work. The installation and extension of all public
improvements shall be performed in accordance with rough grading, storm drain and utility
relocation plans labeled "Bid Set - January 12, 2004" for project No. GP04409, any other plans
and specifications approved by the Executive Director of the Community Development
Commission and the City Engineer and any necessary permits from the City of West Covina.
Buyer shall complete excavation and transportation of excess soil and all public infrastructure not
later than ten months after the commencement of grading and excavation by Buyer.
(d) Buyer acknowledges that Suburban Water Systems ("SWS") is the water purveyor
for the Property. Buyer shall pay the cost of the water system and coordinate installation of such
improvements with SWS including, but not limited to pipes, pump stations, water tanks and
grading for 700 and 880 zones, which are necessary to provide water service to the Buyer's
proposed commercial office development. This work shall also include upsizing such
improvements, as necessary, to support the proposed golf course and clubhouse and is subject to
the review and approval of the City Public Works Director and CDC Director.
(e) The portion of Parcel 12 retained by Seller as described in Exhibit "C" will be
used by SWS for the construction of water tanks and water pipes to serve the Property and other
properties in the area. It will be necessary for Buyer to grant certain water pipeline and access
easements to SWS for the operation of the water facilities on the portion of Parcel 12 retained by
Seller. Buyer shall cooperate in good faith with SWS to grant the necessary easements to SWS
across, under and along the Property, provided such easements do not materially interfere with
the development of the Project.
26
MAGabaeePurcha eAgrmtSEN7-11-06C1n
• (l) Buyer shall pay for, operate, comply with and maintain (a) all mitigation measures
associated with the use of the Property (i.e. methane gas recovery systems, onsite storm drainage
and slope landscaping) specifically set forth in the "EIR" and/or "SEIR" (as set forth in the
previously approved EIR and or SEIR dated October 2000 and November 2003, respectively and
hereinafter referred to as the "Mitigation Measures"), or (b) imposed by the City as a condition to
the issuance of the discretionary entitlements required by Buyer for the Project (the "Discretionary
Entitlements"); As used in this Agreement, the term "EIR" shall mean the BKK Class III Landfill
Closure, Postclosure Development Environmental Impact Report" (October 2000), and the term
"SEIR" shall mean "Final Supplemental Environmental Impact Report" for "Big League Dreams
City Park, Sports Complex and Commercial Retail Center," dated November 13, 2003, which
accompanies the "Draft Supplemental Environmental Impact Report" for the same project title
(State Clearinghouse Number 2002081092), dated May 2003.
(g) Buyer acknowledges that the Property is subject to environmental mitigation
measures for the preservation of habitat for the California gnatcatcher and that Coastal Sage
Scrub ("CSS") habitat is located on a portion of Parcel 11, which is adjacent to the 700•and 750
pads ( Parcels 12 and 13) and would be impacted by the proposed Project.. Buyer shall perform
all mitigation measures and habitat restoration required for a portion of Parcel 1l,and all of
Parcels 12 and 13. Upon mutual agreement of the parties, the Buyer may pay the initial costs to
have CDC install, maintain and monitor the re -vegetated coastal sage scrub for a monitoring
period of five years as set forth in the Conceptual Coastal Sage Scrub Conservation and
Monitoring Plan dated May 22, 2003.
(h) Buyer and all subsequent purchasers of the Site, shall participate in a Coastal Sage
and Scrub Community Facilities District ("CFD") formed by the Seller for maintenance of the
gnatcatcher habitat and established in accordance with applicable requirements of the United
States Fish and Wildlife Service ("USFWS").
(i) Buyer shall satisfy all conditions to the City's approved Parcel Map 60193 (the
"Parcel Map") for parcels twelve (12) and thirteen (13).
0) Buyer shall pay for all City development fees.
(k) Buyer shall comply with all applicable local, state and federal laws.
(1) Buyer shall comply with all conditions of approval and mitigation measures and
any costs associated with such conditions and mitigation measures.
(m) Within twenty-four (24) months after the execution of this Agreement Buyer shall
commence construction of the buildings for the Project in accordance with plans, specifications
and permits approved by the City of West Covina. The Seller may extend the 24-month time
period at the request of Buyer and upon a showing of reasonable good cause. Buyer shall
complete construction of the Project not later than fourteen (14) months after commencement of
such work.
(n) Prior to the commencement or continuation of any construction on the Property
pursuant to Buyer's Obligations under Sections 4.3 of this Agreement (the "Construction Work"),
the Buyer shall add to its general liability insurance policy and maintain such policy in effect
until the completion of all of the Construction Work (as reasonably determined by the Seller)
coverage for bodily injury and property damage in the minimum amount of Two Million Dollars
($2,000,000.00) per occurrence. The policy shall name, as additionally assureds, the Seller, the
City of West Covina and their officers and employees in their official capacity and while acting
. within the scope of their duties, against all claims, suits, or other actions of any nature brought
27
MAGabaeePurchaseAgmtSEN7-11-06CIn
• for or on account of any deaths, injuries, damage or loss, arising out of or connected with the
work of Construction Work under this Agreement.
(1) Insurance coverage furnished by Buyer, pursuant to this Section 4.3(n),
may be submitted as one or more policies or part of a blanket policy, but coverage shall conform
to this Section 4.3(n) and shall pertain to all activities on the Property and shall require
commercially reasonable approval by the Seller.
(2) Buyer shall furnish Seller a certificate of insurance from its insurer
evidencing compliance with this Section 4.3(h) with the provision that the insurer shall endeavor
not to cancel or modify the policy without thirty (30) days written notice to Seller. Buyer shall
give Seller prompt and timely notice of any claim made or suit instituted. Seller and City, and
their officers and employees, in their official capacity and while acting within the scope of their
duties, shall also be named as additionally insured in any policies of Buyer's contractors covering
work under this Agreement; and such policies shall comply with this Section 4.3(h). Coverage
shall be primary and not contributing with any policy or coverage maintained by or obtained by
the Seller, and shall include an appropriate endorsement and waiver of subrogation.
(3) Buyer shall comply with all of the provisions of the Workers'
Compensation Insurance and Safety Acts of the State of California, the applicable provisions of
Division 4 and 5 of the California Labor Code, and all amendments thereto, and all similar State
or Federal acts or laws applicable, and arising thereunder. Buyer shall furnish to Seller a
certificate of Worker's Compensation insurance providing that the insurer shall endeavor not to
cancel or modify the policy without thirty (30) days prior written notice to Seller. As an
alternative, Buyer may show proof of a certificate of consent to self -insure issued by the Director
of Industrial Relations, pursuant to California Labor Code §3800.
(4) Buyer agrees to and shall indemnify, defend and hold harmless the Seller
and the City from and against all claims, demands, liabilities, losses, damages, costs, mechanics'
liens, or expenses (including reasonable attorneys' fees and court costs) arising from or relating
to the death of any person or any accident, injury, loss, or damage whatsoever to person or
property which shall arise out of the Construction Work and which shall be directly or indirectly
caused by any acts, errors or omissions of Buyer or its agents, servants, employees, tenants, or
contractors. Buyer shall not be responsible for, and this indemnity shall not apply to, such
matters to the extent caused by any acts, errors, or omissions of the Seller or the City or their
respective agents, servants, employees, or contractors.
(o) Buyer warrants that the minimum assessed valuation of the Project shall be
$10,000,000 or more upon the completion of the construction of the Project, and Buyer shall not
file an appeal to lower the assessed valuation of the project below the ten million ($10,000,000)
threshold.
(p) Buyer acknowledges that the Property is located adjacent to a now closed landfill
site (the `BKK Landfill Site"). At Close of Escrow, Buyer shall take title subject to all
mitigation measures required by the EIR and subject to the conditions of all Discretionary
Entitlements. Additionally, Buyer shall be responsible to implement, at Buyer's cost, unless
otherwise relieved of such costs by agreement or order, environmental remedies or other actions
required to be performed by the owner of the Property following the Close of Escrow under the
EPA Agreement, the DTSC Agreement, the BKK Agreement, the EIR, the SEIR, and any other
agreements related to the development or improvement of the Property that are the obligation of
the Property.
28
MAGabaeePurchaseAgrmtSEN7- I 1-06CIn
• (q) The provisions of this Section 4.3 shall be covenants running with the land or
equitable servitudes and shall be binding upon and inure to the benefit of the heirs. successors,
transferees and assigns of Buyer and Seller. The provisions of this Section 4.3 shall survive the
transfer of the Property from Seller to Buyer and shall be contained in the Grant Deed
transferring the Property from Seller to Buyer.
4. POWER OF TERMINATION (REVERTER)
(a) If Buyer fails to perform any of the Buyer's Obligations specified in Paragraph 4
of this Grant Deed in a timely manner, then Seller shall have a power of termination in
accordance with California Civil Code Section 885.010 to re-enter the Property and revest fee
simple title in Seller. The power of termination shall be exercised by Seller in the following
manner:
(1) Seller shall give written notice to Buyer of any failure of Buyer to timely
perform Buyer's Obligations pursuant to Paragraph 4 of this Grant Deed.
(2) If Buyer fails to commence corrective action within 30 days of mailing of
the notice by Seller to Buyer, and diligently and in good faith complete the corrective action
within an additional 60 days, or a longer period agreed upon in writing by the parties reasonably
necessary to complete the corrections, then Seller may give written notice to Buyer of Seller's
exercise of the power of termination revesting fee simple title to the Property in Seller.
(3) Upon receipt by Buyer of the notice of Seller's exercise of the power of
termination, Buyer shall sign a grant deed conveying fee simple title to the Property to Seller.
(4) Upon payment of the original Purchase Price of $1,185,000 plus Buyers
actual documented hard costs for constructing any improvements, from Seller to Buyer, Buyer
shall deliver the signed grant deed to Seller. "Actual documented hard costs for constructing any
improvements" means documented costs for labor, materials and supplies actually used to
construct the improvements to the Property. It does not include any soft costs such as overhead,
administration or insurance.
(5) If Buyer fails to deliver the grant deed to the Property to Seller, then Seller
can commence legal action to enforce the power of termination. Seller shall recover all of its
costs, fees, expenses, expert fees, and attorney fees of such legal action to enforce the.power of
termination.
5. No violation or breach of the covenants, conditions, restrictions, provisions or
limitation contained in this Grant Deed shall defeat or render invalid or in any way impair the
lien or charge of any mortgage, deed of trust or other financing or security instrument; provided,
however, that any successor of Grantee to the Property shall be bound by such remaining
covenants, conditions, restrictions, limitations and provisions, whether such successor's title was
acquired by foreclosure, deed. in lieu of foreclosure, trustee's sale or otherwise.
6. The covenants contained in Paragraph 2 this Grant Deed shall remain in effect in
perpetuity or, if the state law requiring such covenants changes such that those covenants are not
required to remain in effect in perpetuity, those covenants shall terminate at such earlier date as
may be permitted by state law.
7. The covenants and warrantees in this Grant Deed shall be binding for the benefit
• of the Grantor, its successors and assigns, the City of West Covina and any successor in interest
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MAGabaeePurchaseAgrmtSEN7-11-06C1n
. to said parties. Such covenants shall run in favor of the Grantor and such aforementioned parties
for the entire period during which such covenants shall be in force and effect, without regard to
whether the Grantor is or remains an owner of any land or interest therein to which such
covenants relate. The Grantor and such aforementioned parties, in the event of any breach of any
such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any
actions at law or suits in equity or contained in this Grant Deed.
•
8. No amendment to the Redevelopment Plan, which changes the use or
development permitted on the Property or changes the restrictions or controls that apply to the
Property or otherwise affects the Property, shall become effective as to the Property without the
written consent of the Grantee.
9. The Covenants and Conditions of this Grant Deed shall be deemed to be
covenants running with the land or equitable servitudes and shall bind future purchasers,
encumbrances and transferees and assigns of Grantor and Grantee.
Executed on July _, 2006, in , California.
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF WEST COVINA
IM
ATTEST:
Secretary
APPROVED AS TO FORM:
CDC Counsel
30
MAGabaeePurchaseAgrmLSEN7-11-06CIn
Executive Director
•
State of California
•
County of
On before me,
and title of the officer), personally appeared
insert name
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature
State of California
County of
On before me,
and title of the officer), personally appeared
(Seal)
insert name
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument,
WITNESS my hand and official seal.
Signature
31
MAGabaeePurchaseAgmnSEN7-11-06CIn
(Seal)
•
GRANTEE'S ACCEPTANCE OF CONDITIONS, COVENANTS AND RESTRICTIONS
The provisions of this Grant Deed are hereby approved and accepted.
`BUYER„
By:
Date:
By:
Date:
State of California
County of
On before me,
and title of the officer), personally appeared
insert name
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature
State of California
County of
On before me,
and title of the officer), personally appeared
(Seal)
insert name
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature
MAGabaeePurchaseAgrmiSEN7-11-06C1n
32
(Seal)
•
0
Exhibit "A" to Grant Deed
LEGAL DESCRIPTION
Real property in the City of West Covina, County of Los Angeles, State of
California, described as follows:
Q
a
N
Q
ZW
That certain parcel of land situated in the City of West Covina, County of Los Angeles, State of
California, being that portion of Parcel 12 of Parcel Map No. 60193 as shown on the map thereof
filed in Book 336, Pages 93 through 100, of Parcel Maps, in the Office of the County Recorder
of said County of Los Angeles, lying westerly of the following described line:
COMMENCING at the most southerly comer of said Parcel 12, said comer also being a point
on a curve for the southeasterly line of said parcel and concave southeasterly and having a radius
of 860.00 feet, a radial of said curve from said point bears South 54°41'22" East; thence along
said curve and southeasterly line northeasterly 209.45 feet through a central angle of 13°57'16"
to the TRUE POINT OF BEGINNING; thence non -tangent from said curve North 10°38'25"
West 441.38 feet to a point in the northerly line of said Parcel 12, said point being North
84*10'12" East 39.78 feet from the westerly terminus of that certain course shown as being
"North 84° 10' 12" East 99.22 feet" in said northerly line on said map.
•
a
N
•
Exhibit "A-1" to Grant Deed
LEGAL DESCRIPTION
PARCEL 13 OF PARCEL MAP 60193, IN THE CITY OF WEST COVINA, AS PER MAP FILED IN
BOOK 336, PAGES 93 THROUGH 100 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF LOS ANGELES COUNTY.
MAGabaeePurchaseAgrmtSEN7-11-06C1n
34
•
•
EXHIBIT "C"
Seller Retained Portion of Parcel 12
P Rar-L
Y 3..
MAGabaeePurchaseAgrtM5EN7-11-06CIn
PARCEL 1 j
RIM
A644'70'12 T 99.22
(PER PM M7.0193)
iA .
PARCEL 1.1
•
C.
MAGabaeePurchaseAgrmtsEN7-11-06CIn
EXHIBIT "D"
Map of Areas of Improvement
WO