HomeMy WebLinkAboutSuccessor Reso 03-2016 RESOLUTION NO. 03-2016
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF
THE CITY OF SOUTH SAN FRANCISCO,
STATE OF CALIFRNIA
A RESOLUTION APPROVING A PURCHASE AND SALE
AGREEMENT WITH MILLER CYPRESS SSF, LLC FOR 315
AIRPORT BLVD., 401-421 AIRPORT BLVD., 405 CYPRESS
AVE., AND 216 MILLER AVE.
WHEREAS, the Successor Agency to the Redevelopment Agency of the City of South
San Francisco ("Successor Agency") is the owner of certain real property located in the City of
South San Francisco ("City"), California, known as County Assessor's Parcel Number 012-317-
110 ("401 Airport Boulevard"), 012-317-100 ("411 Airport Boulevard"), 012-317-090 ("421
Airport Boulevard"), 012-314-100 ("405 Cypress Avenue"), 012-314-220 ("216 Miller
Avenue"), 012-318-080 ("315 Airport Boulevard") and collectively referred to as the "Agency
Property"; and,
WHEREAS, on June 29, 2011 the legislature of the State of California (the "State")
adopted Assembly Billy xl 26 ("AB 26"), which amended provisions of the Redevelopment
Law; and,
WHEREAS, pursuant to AB 26 and the California Supreme Court decision in California
Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with
AB 1484, the "Dissolution Law"), the former Redevelopment Agency of the City of South San
Francisco was dissolved on February 1, 2012; and,
WHEREAS, pursuant to the Dissolution Law, the Agency Property was transferred to the
Successor Agency; and,
WHEREAS, pursuant to the Dissolution Law, the Successor Agency prepared a Long
Range Property Management Plan ("LRPMP"), which has been approved by the Oversight
Board for the Successor Agency to the Redevelopment Agency of the City of South San
Francisco ("Oversight Board") and the California Department of Finance ("DOF"); and,
WHEREAS, the approved LRPMP includes the Agency Property and highlights the
potential development of the sites as residential, mixed use and/or transit-oriented projects
consistent with Downtown Station Area Plan adopted by the City; and,
WHEREAS, in August, 2014, the Successor Agency and Miller Cypress SSF,
LLC ("Developer") entered into an Exclusive Negotiation Rights Agreement ("ENRA") that
established a mutual understanding among the City, the Successor Agency, and the Developer
regarding the potential development of the Agency Properties; and,
WHEREAS, the ENRA was approved by the Oversight Board in August, 2014 and the
DOF on December 5, 2014; and,
WHEREAS, the Developer has proposed construction of a high-density residential
development, consisting of 260 residential apartments in Phase 1, 12 for-sale residential
townhomes in Phase 2, and 342 total vehicle parking spaces ("Project"), which is consistent with
both the LRPMP and the ENRA; and,
WHEREAS, the Successor Agency is interested in selling the Agency Property to
Developer, as contemplated in the LRPMP and ENRA, contingent upon approval of a
Development Agreement by the City, Developer securing all funding for the Project, and
obtaining all applicable land use entitlements from the City necessary to construct the Project on
the Agency Property; and,
WHEREAS, the Successor Agency and the Developer now all wish to enter into a
Purchase and Sale Agreement ("PSA"), attached hereto and incorporated herein as Exhibit A;
and,
WHEREAS, approval of the Developer's proposal is considered a "project" for purposes
of the California Environmental Quality Act, Pub. Resources Code § 21000, et seq. ("CEQA");
and,
WHEREAS, on January 28, 2015, the City Council certified an Environmental Impact
Report ("EIR") (State Clearinghouse number 2013102001) in accordance with the provisions of
the California Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA")
and CEQA Guidelines, which analyzed the potential environmental impacts of the development
of the Downtown Station Area Specific Plan; and,
WHEREAS, on January 28, 2015, the City Council also adopted a Statement of
Overriding Considerations ("SOC") in accordance with the provisions of the California
Environmental Quality Act (Public Resources Code, §§ 21000, et seq., "CEQA") and CEQA
Guidelines, which carefully considered each significant and unavoidable impact identified in the
EIR and found that the significant environmental impacts are acceptable in light of the project's
economic, legal, social, technological and other benefits; and,
WHEREAS, CEQA allows for limited environmental review of subsequent projects
under a program EIR when an agency finds that a project would not create any new
environmental effects beyond those previously analyzed under a program EIR and would not
require any new mitigation measures (CEQA Guidelines § 15168 (c)(2)); and,
WHEREAS, the City prepared an Environmental Consistency Analysis for the Project
and the City by Resolution No. 16-2016 and the Successor Agency by Resolution No. 02-2016
concluded that the Project would not result in any new significant environmental effects or a
substantial increase in the severity of any previously identified effects beyond those disclosed
and analyzed in the Downtown Station Area Specific Plan Program EIR certified by City
Council nor would any new mitigation measures be required.
NOW, THEREFORE, BE IT RESOLVED that the Board of the Successor Agency to the
Redevelopment Agency of the City of South San Francisco does hereby take the following
actions:
(1) Finds and determines that the recitals are true and correct;
(2) Approves the PSA in substantially the same form attached hereto as Exhibit A
and recommends that the Oversight Board approve the PSA;
(3) Subject to the approval by the Oversight Board of the PSA, as it pertains to the
disposition of the Agency Property, authorizes the Executive Director to enter into and execute
the PSA on behalf of the Successor Agency, in substantially the same form as attached hereto as
Exhibit A; to make any revisions, amendments, or modifications, subject to review and approval
of Successor Agency Counsel, deemed necessary to carry out the intent of this Resolution and
which do not materially alter or increase the Successor Agency's obligations thereunder.
I hereby certify that the foregoing Resolution was regularly introduced and adopted by the
Successor Agency to the former Redevelopment Agency of the City of South San Francisco at a
special meeting held on the 10th day of February, 2016 by the following vote:
AYES: Boardmembers Karel Matsumoto, Richard Garbarino, and Liza Normandy,
Vice Chairman Pradeep Gupta and Chairman Mark Addiego
NOES: None.
ABSTAIN: None.
ABSENT: None.
TTEST,
Clerk
EXHIBIT A
Purchase and Sale Agreement
2599220.1
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS ("this Agreement") is made and entered into as of 2016 (the "Date
of Agreement"), by and between the South San Francisco Successor Agency, a public agency
("Seller"or"Agency") and Miller Cypress SSF, LLC, ("Buyer"), which is the date this
Agreement was approved by the South San Francisco Oversight Board("Oversight Board").
Seller and Buyer are each individually referred to herein as a"Party" and, collectively, as the
"Parties."
RECITALS
A. WHEREAS, Seller is the owner of certain real property located in the City
of South San Francisco, County of San Mateo, California, known as County Assessor's Parcel
Numbers 012-317-110 (401 Airport Boulevard)("Parcel A.1"), 012-317-100 (411 Airport
Boulevard) ("Parcel A.2"), 012-317-090 (421 Airport Boulevard) ("Parcel A.3"), 012-318-030
(315 Airport Boulevard) ("Parcel D"), 012-314-100 (405 Cypress Avenue) "(Parcel B"), and
012-314-220 (216 Miller Avenue parking lot) ("Parcel C"), each as more particularly described
in Exhibit A attached hereto and incorporated herein by this reference. Parcel A.1, Parcel A.2
and Parcel A.3 are collectively, "Parcel A." Parcel A, Parcel B, Parcel C, and Parcel D are
collectively the"Property." The Buyer has also entered a separate and private purchase and sale
agreement to acquire a property located at 309 Airport Boulevard from an unrelated third party
adjacent to Parcel D ("Parcel D Prime").
B. WHEREAS, on June 29, 2011 the legislature of the State of California
(the "State") adopted Assembly Bill xl 26 ("AB 26"),which amended provisions of the
Redevelopment Law, which together with the California Supreme Court decision in California
Redevelopment Association, et al. v. Ana Matosantos, et al., which upheld AB 26 (together with
AB 1484,the "Dissolution Law"), the South San Francisco Redevelopment Agency was
dissolved on February 1, 2012.
C. WHEREAS, in August, 2014, the Agency and Buyer entered into an
Exclusive Negotiation Rights Agreement("ENRA")that established a mutual understanding
among the City, Agency, and the Buyer regarding the potential development of the Property.
D. WHEREAS,pursuant to the Dissolution Law, the Agency prepared a
Long Range Property Management Plan ("LRPMP"),which the Oversight Board to the Former
South San Francisco Redevelopment Agency ("Oversight Board") approved on November 19,
201_, and the Department of Finance ("DOF") approved on October 1, 2015.
E. WHEREAS, the LRPMP includes development plans for the Property,
which are consistent with this Agreement.
02/02/16
- 1 -
505
F. WHEREAS, consistent with the approved LRPMP, and subject to the
terms of this Agreement, Seller is interested in selling the Property to Buyer contingent upon
Buyer paying the Purchase Price required in Section 2.2 and obtaining land use entitlements
from the City of South San Francisco("City"), and if such entitlements are granted, and
requiring the Buyer to construct(a) 260 multi-family residential rental units on Parcel A, Parcel
D and Parcel D Prime, (b) 12 townhomes on Parcel C (or as Project maybe revised for Parcel C
as provided in this Agreement), and(c) 25 guest parking spaces on Parcel B ("Project").
G. WHEREAS, on January 28, 2015, the City Council (i) certified an
Environmental Impact Report("EIR") (State Clearinghouse number 2013102001) in accordance
with the provisions of the California Environmental Quality Act(Public Resources Code,
§§ 21000, et seq., "CEQA") and CEQA Guidelines, which analyzed the potential environmental
impacts of the development of the Downtown Station Area Specific Plan(the "DSASP"), and
(ii) approved the DSASP which includes the Property and Parcel D Prime.
H. WHEREAS, on January 28, 2015, the City Council also adopted a
Statement of Overriding Considerations ("SOC") in accordance with the provisions of CEQA
and CEQA Guidelines, which carefully considered each significant and unavoidable impact
identified in the EIR and found that the significant environmental impacts are acceptable in light
of the DSASP's economic, legal, social, technological and other benefits and City Council found
the Project consistent with the DSASP.
I. WHEREAS, on February 10, 2016 by Resolution Nos. and
, and the City Council(i) adopted an Environmental Consistency Analysis for the
Project prepared by the City and certified that the Project would not result in any new significant
environmental effects or a substantial increase in the severity of any previously identified effects
beyond those disclosed and analyzed in the DSASP ER certified by City Council, or require any
new mitigation measures ("Environmental Consistency Analysis"), (2) approved the following
entitlements for the Project Conditional Use Permit("UP") 15-0027, Design Review("DR") 15-
0032, Waiver and Modification ("WM") 15-0001, and Parking Exemption ("PE") 15-0004, and
(ii) introduced Ordinance No. approving a Development Agreement("DA") 15-0003
(collectively, the "Project Approvals"). On February 24, 2016,by City Council adopted
Ordinance No. approving the DA. .
J. WHEREAS, in compliance with Section 6.10 of the DA between the City and
Buyer, the Buyer has agreed to pay prevailing wages pursuant to Labor Code Section 1720 et
seq. for the Project. In addition, Buyer has stated in public its intent to use union labor for the
construction of the Project.
K. WHEREAS,pursuant to Health and Safety Code Section 34181(a)(1),the Seller
on February 10, 2016 and the Oversight Board on February 16, 2016 held duly noticed public
meetings to consider the sale of the Property to the Buyer pursuant to this Agreement.
02/02/16
- 2 -
506
L. WHEREAS,pursuant to Resolution No. dated February 10, 2016, the Seller
found that the sale of the Property is consistent with the disposition provisions of the LRPMP
and recommended that the Oversight Board approve this Agreement.
M. WHEREAS, pursuant to Resolution No. dated , 2016,the
Oversight Board found that(i)the sale of the Property is consistent with the disposition
provisions of the LRPMP and(ii)pursuant to Health and Safety Code Section 34179(h)(1)(D), as
a transfer of governmental property pursuant to the approved LRPMP, the Oversight Board is not
required to submit approval of this Agreement to DOF for approval and approved this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained in this Agreement, and other good and valuable consideration,the receipt
and adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as
follows:
1. INCORPORATION OF RECITALS AND EXHIBITS. The Recitals set
forth above and the Exhibits attached to this Agreement are each incorporated into the body of
this Agreement as if set forth in full.
2. PURCHASE AND SALE.
2.1 Agreement to Buy and Sell. Subject to the terms and conditions
set forth herein, Seller agrees to sell the Property to Buyer, and Buyer hereby agrees to acquire
the Property from Seller.
2.2 Purchase Price. The purchase price for the Property to be paid by
Buyer to Seller(the "Purchase Price") is Four Million and 00/100 Dollars ($4,000,000.00). The
Purchase Price shall be paid in cash at the Closing.
2.3 Supplemental Purchase Price for Parcel C. If the Buyer constructs
Parcel C (whether as (i) a 12 unit town home development consistent with the Project Approvals
("12 Unit Project')or(ii) as part of a revised development under the potential Land Assembly
Option defined in Section 5.6),the additional land value payable to the Seller for Parcel C will
be determined either by(X) a residual land value appraisal for Parcel C or, at Seller's discretion,
(Y) on a comparison sales based appraisal both of which will be prepared by a certified appraiser
mutually selected by the Seller and Buyer within sixty(60) days of the date Buyer provides
written notice of either its intent to pursue the Revised Parcel C Entitlements its intent to
abandon the Revised Parcel C Entitlements and proceed with construction of the 12 Unit Project
("Supplemental Purchase Price"). In the event that the parties do not agree on an appraiser,the
Seller shall identify three certified appraisers with experience appraising properties in San Mateo
County and each Party shall strike one appraiser and the remaining appraiser shall be retained to
conduct the appraisal. The costs of the appraisal shall be shared equally between the Seller and
Buyer. Buyer shall pay Seller the Supplemental Purchase Price prior to the earlier of ninety(90)
days after completion of the appraisal or issuance of the first building permit by the City for
02/02/16
- 3 -
507
Parcel C. This provision shall not apply if Buyer re-conveys Parcel C to Seller pursuant to
Section 5.6(e)(v).
3. ESCROW.
3.1 Escrow Account. Seller has opened an interest-bearing escrow
account(the "Escrow") maintained by First American Title Insurance Company at the address
noted in Section 13.8 (the"Escrow Holder"),with interest accruing to the benefit of Buyer.
Escrow Holder shall perform all escrow and title services in connection with this Agreement.
3.2 Opening of Escrow. Within ten(10)business days after the
Effective Date, the Parties will deposit into Escrow the fully executed Agreement, or executed
counterparts thereto. The date such fully executed Agreement is received by Escrow Holder will
be deemed the "Opening of Escrow."
3.3 Buyer's Deposit. Upon the Opening of Escrow, the Buyer shall
deposit two hundred thousand dollars ($200,000) in Escrow ("Buyer's Initial Deposit"). The
Buyer's Initial Deposit shall be non-refundable. Unless Buyer has delivered written notice to
Seller terminating this Agreement in accordance with Section 3.4 below, then upon expiration of
Buyer's Due Diligence Contingency Period, as set forth in Section 5.2 below, Buyer shall
deposit an additional two hundred thousand dollars in Escrow("Buyer's Second Deposit"). In
the event of a failure to Close based on any of the following Buyer's Conditions to Closing,the
Buyer shall be entitled to a refund of the Buyer's Second Deposit: 5.2(b), 5.2(c), 5.2(e), 5.2(1),
and 5.2(m).
3.4 Satisfaction of Due Diligence Contingency. Buyer shall have the
right, in its sole discretion,to terminate this Agreement if Buyer disapproves of its inspection of
and due diligence pertaining to the Property as set forth in Section 5.2 (a)prior to the expiration
of the Due Diligence Period(also as defined in Section 5.2(a)below). Buyer hereby agrees to
provide written notice to Seller prior to the expiration of the Due Diligence Period if Buyer
disapproves any due diligence items and identify with reasonable specificity such disapproval.
Upon provision of such notice to Seller, this Agreement shall terminate, and, except as provided
in Section 5.2(a), all amounts deposited by Buyer into escrow (except the expended ENRA
Deposit,the Buyer's Initial Deposit and the ENRA Extension Deposit as provided in Section 3.5
below),together with interest thereon, if any, will be returned to Buyer, and neither Party shall
have any further rights or obligations under this Agreement except those which expressly survive
the termination hereof. If Buyer fails to notify Seller in writing of the disapproval of any due
diligence items, it will be conclusively presumed that Buyer has approved all such items, matters
or documents and this Agreement shall continue in full force and effect.
3.5 Application of Prior ENRA Deposit. Pursuant to Section 5 of the
ENRA, Buyer has already submitted directly to Seller a deposit in the amount of Fifty Thousand
Dollars ($50,000) to cover the actual costs that the Seller has incurred and will incur in
furtherance of this Agreement ("ENRA Deposit"), and an additional Twenty Five Thousand
($25,000) Dollars related to the ENRA extension ("ENRA Extension Deposit"). Seller has
02/02/16
- 4 -
508
deposited the ENRA Deposit and the ENRA Extension Deposit in an interest bearing account
and any interest, when received by Seller, will become part of the ENRA Deposit. On or before
expiration of this Agreement,the Seller may, draw on the ENRA Deposit to reimburse the
Seller's cost for third-party assistance and staff time in the negotiations for and preparation of
this Agreement. Upon Closing, the Seller will apply any unused portion of the ENRA Deposit to
the Purchase Price. In the event that Buyer terminates this Agreement in accordance with
Section 3.4 above, Buyer shall only be entitled to the unused portion of the ENRA Deposit and
the Seller shall be entitled to the ENRA Extension Deposit.
3.6 Environmental Remediation Regulatory Approval Successor
Agency Assistance. At Closing,the Buyer agrees to take title of the Property in AS IS WHERE
IS condition with no environmental remediation work required by or indemnities from the Seller
or the City of South San Francisco. Seller, at Buyer's expense, agrees to cooperate with Buyer to
obtain regulatory approval of the necessary environmental work for the Property(including but
not limited to the California Land Reuse and Revitalization Act)to be suitable for unrestricted
residential use consistent with the uses proposed in the Project Approvals prior to and as a Buyer
condition to Closing. Buyer will then manage and complete the remediation work necessary to
make the Property suitable for unrestricted residential use consistent with the uses proposed in
the Project Approvals after Closing. After Closing, Seller shall have no further obligations with
respect to Environmental and/or Natural Hazards remediation costs (except in the event Parcel C
is re-conveyed to the Seller pursuant to the applicable provisions of Section 5.6.
4. PROPERTY DISCLOSURE REQUIREMENTS.
4.1 Condition of Title/Preliminary Title Report. Buyer hereby
approves the following exceptions which shall be referred to herein as the "Pre-Approved
Exceptions": (a)the lien of any non-delinquent property taxes and assessments(which, if any
exist, shall be prorated by the Title Company at Closing); (b)the Memorandum of Agreement,
(c)the covenants, conditions and restrictions set forth in the Grant Deed, (d) standard printed
exceptions in the Preliminary Report; and(e)the exceptions shown on Exhibit C attached hereto.
Within five(5)business days of Opening of Escrow, Escrow Holder will deliver an updated
Preliminary Title Report for the Property (the "Preliminary Report")to Buyer. Buyer will have
ten(10)business days from receipt to review the Preliminary Report and deliver to Seller a
written notice indicating any disapproved exceptions("Dis-Approved Exceptions"). The Pre-
Approved Exceptions and any other exceptions otherwise accepted by Buyer as provided herein
are hereinafter referred to as the "Condition of Title." Subject to the Seller's covenant in
Section 6.1(b)to neither cause nor voluntarily permit, any new lien, encumbrance or any other
matter that changes the condition of title to the Property, if any exceptions other than the Pre-
Approved Exceptions are reported by the Title Company,then any such new exception shall be
Disapproved Exceptions unless the new exceptions (i) arise from the acts or omissions of Buyer,
or(ii) are consented to or waived in writing by Buyer in its sole discretion. The Seller agrees
that the"Required Dis-Approved Exceptions" set forth on Exhibit C are critical to the Project
and agrees that if such Required Dis-Approved Exceptions are not removed by date that the
Seller's Conditions to Closing and Buyer's Conditions to Closing are otherwise satisfied (or
02/02/16
- 5 -
509
waived by Buyer),then the Buyer shall have the right, in its sole discretion, to terminate this
Agreement and the Buyer shall right to full refund of the Buyer's Second Deposit.
4.2 Environmental and Natural Hazards Disclosure. California Health
& Safety Code section 25359.7 requires owners of non-residential real property who know, or
have reasonable cause to believe, that any release of hazardous substances are located on or
beneath the real property to provide written notice of same to the buyer of real property. Other
applicable laws require Seller to provide certain disclosures regarding natural hazards affecting
the Property. Seller warrants that as of the Date of Agreement, it has provided to Buyer all
reports of potential hazardous substances located on or beneath the Property that Seller
possesses. Seller further agrees to make all necessary disclosures required by law.
5. CLOSING, PAYMENT OF PURCHASE PRICE AND POST CLOSING
OBLIGATIONS OF BUYER.
5.1 Closing. The closing(the "Closing"or"Close of Escrow")will
occur for the Property including Parcels A, B, C and D no later than the date set forth in Section
5.6(b), unless such date for Closing is extended by Force Majeure Delay or as provided on in
Sections 5.6.1, 5.6.2 or 5.6.3 herein("Closing Date"). In addition to the extensions of the
Closing Date in Section 5.6.1, 5.6.2 and 5.6.3, the Closing Date shall be extended where a
Party's Conditions to Closing under Section 5.2 (Buyer) and 5.3 (Seller)have not been satisfied
as a result of a Force Majeure Event.
5.2 Buyer's Conditions to Closing. Buyer's obligation to purchase the
Property is subject to the satisfaction of each and all of the following conditions precedent
("Buyer Conditions Precedent") or Buyer's written waiver thereof(each in Buyer's sole
discretion)on or before the Closing Date:
(a) Due Diligence. Buyer has approved the condition of the Property
in Buyer's sole and absolute discretion. Consistent with Section 3.6 above Buyer acknowledges
the existence of Underground Storage Tanks on Parcels A and D and lead on Parcels B and C, as
evidenced in the Phase I Environmental Site Assessment, Airport Boulevard Properties, South
San Francisco, California dated January 2016 prepared by WEST Environmental Services and
Technology("Environmental Report")prepared for Buyer and Buyer agrees that the existence
of such conditions as described in the Environmental Report shall not be the sole grounds upon
which Buyer denies approval of the condition of the Property under Section 3.4 above. Buyer
will have forty-five (45) calendar days from Opening of Escrow(the"Due Diligence Period")to
complete physical inspections of the Property and due diligence related to the purchase of the
Property. Seller shall provide to Buyer copies of all reasonably available and known documents
relating to the ownership and operation of the Property, including but not limited to plans,
permits and reports (environmental, structural, mechanical, engineering and land surveys)that
Seller has in its possession not later than two(2)business days following the execution and
delivery of this Agreement. All physical access to the Property must be coordinated with
Seller's representative and subject to Section 13.16.
02/02/16
- 6 -
510
(b) No Default by Seller or City. Seller is not in default and has
performed all obligations to be performed by Seller pursuant to this Agreement, and the City is
not in default under the Development Agreement.
(c) Representations and Warranties. Seller's representations and
warranties herein are true and correct in all material respects as of the Closing Date.
(d) Title Policy. The Title Company shall, upon payment of Title
Company's regularly scheduled premium, be irrevocably committed to issue an ALTA Extended
Title Policy to Buyer upon recordation of the Grant Deed and effective as of the Closing Date,
insuring title to Buyer in the full amount of the Purchase Price and subject only to the Pre-
Approved Exceptions or the Condition of Title.
(e) Absence of Proceedings. There shall be an absence of any
condemnation, environmental or other pending governmental or any type of administrative or
legal proceedings with respect to the Property or this Agreement which would materially and
adversely affect Buyer's intended uses of the Property or the value of the Property.
(f) No Material Adverse Change. There shall not have occurred
between the Date of Agreement and the Closing a material adverse change to the physical
condition of the Property.
(g) Financing Commitments. Buyer shall have financing
commitments that are not materially different than Buyer's financing term sheet as of the Date of
this Agreement that is sufficient for the acquisition of the Property and construction of 260
residential rental units on Parcels A, Parcel D and Parcel D Prime for the Project and Buyer's
construction loan, if any, shall have closed or shall be ready to close concurrently with the
Closing.
(h) Project Approvals. The Project Approvals shall be final and non-
appealable, and if any appeals, legal challenges, requests for rehearing, or referenda have been
filed or instituted, such appeals, legal challenges, requests for rehearing, or referenda shall have
been fully and finally resolved in a manner acceptable to Buyer in its sole and absolute discretion
and such that no further appeals, legal challenges, requests for rehearing, or referenda are
possible.
(i) Permits. Subject to payment of the applicable fees, the City shall
be ready and willing to issue the ministerial demolition, grading, foundation permit and building
permit(s)necessary for the Buyer to meet its obligations in Section 5.6(b)(1) and Section
5.6(c)(i) and(c)(ii).
(j) No Leases or Parties in Possession. Seller shall have demonstrated
the ability to deliver fee title to the Property to Buyer free and clear of any tenants, lessees,
licensees or any third party occupants or parties in possession.
02/02/16
- 7 -
511
(k) Remediation Plan Approval. Buyer shall, in the Buyer's
reasonable business judgment, have obtained regulatory approval of the necessary environmental
work for the Property(including but not limited to the California Land Reuse and Revitalization
Act)to be suitable for unrestricted residential use consistent with the uses proposed in the Project
Approvals and that such regulatory approval would not cause or result in a material adverse
delay in the time to commence or construct the Project, a substantial increase (defined as an
increase of $100,000) in the costs assumptions for the Project in the pro forma previously
provided by Buyer related to environmental conditions as of the Date of Agreement, or a
material adverse impact to the Project or the use of the Project.
(1) Compliance with Dissolution Law. Seller shall have complied
with all requirements and obtained any and all approvals required under the Dissolution Law
with respect to Closing.
(m) Execution and Delivery of Documents by Seller. Seller shall have
executed and acknowledged the Grant Deed and Memorandum of Agreement, and Seller shall
have executed (and, where appropriate, acknowledged) and delivered into escrow all other
documents that Seller is required to deliver into escrow pursuant to Section 5.5(a).
5.3 Seller's Conditions to Closing. Seller's obligation to sell the
Property is subject to the satisfaction of each and all of the following conditions precedent
("Seller Conditions Precedent") or Seller's written waiver thereof(each in Seller's sole
discretion)on or before the Closing Date:
(a) No Default by Buyer or City. Seller is not in default and has
performed all obligations to be performed by Seller pursuant to this Agreement, and neither the
Buyer or City is in default under the Development Agreement.
(b) Development Agreement. The City Council approves a
Development Agreement with the Buyer in a form substantially similar to the Development
Agreement attached hereto as Exhibit D, and such Development Agreement is executed and will
be recorded concurrently with the Close of Escrow as provided in Section 5.5.
(c) Representations and Warranties. Buyer's representations and
warranties set forth herein are true and correct in all material respects as of the Closing Date.
(d) Buyer's Financing Commitments. Buyer has provided Seller
written confirmation, acceptable to Seller, which approval shall not be unreasonably withheld,
that Buyer has obtained financing commitments for the acquisition and construction financing
for the acquisition of the Property and the construction of 260 residential rental units on Parcel
A, Parcel D and Parcel D Prime.
(e) Permits. The Buyer shall have submitted applications to the City
pursuant to Section 5.6(a), and subject to payment of the applicable fees,the City shall be ready
02/02/16
- 8 -
512
and willing to issue the ministerial demolition, grading and foundation permit(s)necessary for
the Buyer to Commence of Construction as defined in Section 5.6(c)(i) and(ii).
(f) Compliance with Dissolution Law. Seller shall have complied
with all requirements and obtained any and all approvals required under the Dissolution Law
with respect to Closing.
(g) Execution and Delivery of Documents by Buyer. Buyer shall
have executed and acknowledged the Grant Deed and Memorandum of Agreement, and Buyer
shall have executed(and, where appropriate, acknowledged) and delivered into escrow all other
documents that Buyer is required to deliver into escrow pursuant to Section 5.5(b).
(h) Delivery of Funds. Buyer shall have delivered through escrow the
Purchase Price and such other funds, including escrow costs,recording fees and other closing
costs as are necessary to comply with Buyer's obligations under this Agreement.
5.4 Conveyance of Title. Seller will deliver marketable fee simple title
to Buyer at the Closing, subject only to the Condition of Title pursuant to Section 4.1. The
Property will be conveyed by Seller to Buyer in an "as is"condition,with no warranty, express
or implied,by Seller as to the physical condition including,but not limited to, the soil, its
geology, or the presence of known or unknown faults or Hazardous Materials or hazardous waste
(as defined by Section 12); provided, however,that the foregoing shall not relieve Seller from
disclosure of any such conditions of which Seller has actual knowledge or its obligation to
cooperate with Buyer pursuant to Section 2.6.
5.5 Closing.
5.5.1 Delivery of Documents and Closing Funds. At or prior to Closing,
Seller and Buyer shall each deposit such other instruments as are reasonably required by the Title
Company or otherwise required to close the escrow and consummate the conveyance of the
Property in accordance with the terms hereof, including but not limited to the following:
(a) Deliveries by Seller. At or before Closing, Seller shall deposit the
following into escrow:
A. one(1) original executed and acknowledged Grant Deed
substantially in the form attached hereto as Exhibit B ("Grant Deed");
B. one(1) original executed and acknowledged Memorandum
of Agreement, substantially in the form attached hereto as Exhibit D ("Memorandum of
Agreement");
C. one(1) duly executed non-foreign certification for the
Property in accordance with the requirements of Section 1445 of the Internal Revenue Code of
1986, as amended; and
D. one(1) duly executed California Form 593-W Certificate
for the Property or comparable non-foreign person affidavit to satisfy the requirements of
California Revenue and Taxation Code Section 18805(b) and 26131.
02/02/16
- 9 -
513
(b)Deliveries by Buyer. At or prior to Closing, Buyer shall deposit the
following into escrow:
A. immediately available funds in the amount,which together
with the Buyer's Deposit plus interest thereon, if any, is equal to an amount necessary to
consummate the Closing, including the Purchase Price, escrow and Title Policy costs set forth in
Section 5.5.5;
B. one(1) original executed and acknowledged Grant Deed;
C. one(1)original executed and acknowledged Memorandum
of Agreement; and
D. one(1) original executed Preliminary Change of
Ownership Report for the Property.
E. one(1) fully executed Development Agreement in a form
substantially similar to the Development Agreement attached hereto as Exhibit D.
5.5.2 Escrow Instructions. This Agreement constitutes the joint escrow
instructions of Seller and Buyer with respect to the conveyance of the Property to Buyer, and the
Escrow Agent to whom these instructions are delivered is hereby empowered to act under this
Agreement. The parties shall use reasonable good faith efforts to close the escrow for the
conveyance of the Property in the shortest possible time. Insurance policies for fire or casualty
are not to be transferred, and each Party will cancel its own policies, if any, as of the Closing.
All funds received in the escrow shall be deposited in interest-bearing accounts for the benefit of
the depositing Party in any state or national bank doing business in the State of California. All
disbursements shall be made by check or wire transfer from such accounts. If, in the opinion of
either Party, it is necessary or convenient in order to accomplish the Closing, such Party may
provide supplemental escrow instructions; provided that if there is any inconsistency between
this Agreement and the supplemental escrow instructions, then the provisions of this Agreement
shall control. The Closing shall take place as set forth in Section 5.5.4 below. Escrow Agent is
instructed to release Seller's and Buyer's escrow closing statements to the respective parties.
5.5.3 Authority of Escrow Agent. Escrow Agent is authorized to, and
shall:
(a) Pay and charge Buyer for the premium of the Title Policy,
including any endorsements requested by Buyer.
(b) Pay and charge Buyer for escrow fees, charges, and costs as
provided in Section 5.5.5.
(c) Disburse to Seller the Purchase Price, less Seller's share of any
escrow fees, costs and expenses, and record the Grant Deed when both the Buyer Conditions
Precedent and Seller Conditions Precedent have been fulfilled or waived in writing by Buyer and
Seller, as applicable. Immediately following recordation of the Grant Deed, Escrow Agent shall
record the Memorandum of Agreement, Development Agreement and all other recordable
documents delivered into escrow for the Closing.
(d) Do such other actions as necessary, including obtaining and
issuing the Title Policy,to fulfill its obligations under this Agreement.
02/02/16
- 10 -
514
(e) Direct Seller and Buyer to execute and deliver any instrument,
affidavit, and statement, and to perform any act, reasonably necessary to comply with the
provisions of FIRPTA, if applicable, and any similar state act and regulations promulgated
thereunder.
(f) Prepare and file with all appropriate governmental or taxing
authorities uniform settlement statements, closing statements, tax withholding forms including
IRS 1099-S forms, and be responsible for withholding taxes, if any such forms are provided for
or required by law.
5.5.4 Closing. The escrow for conveyance of the Property shall close
("Close of Escrow")within thirty (30)days after the satisfaction, or waiver by the appropriate
Party, of all of the Buyer Conditions Precedent and all of the Seller Conditions Precedent. For
purposes of this Agreement,the "Closing" shall mean the time and day the Grant Deed is
recorded with the San Mateo County recorder.
5.5.5 Closing Costs. Buyer will pay all escrow fees (including the costs of
preparing documents and instruments), and recording fees. Buyer will also pay title insurance,
title report costs and all transfer taxes. Seller will pay all governmental conveyance fees, where
applicable.
5.5.6 Pro-Rations. At the Close of Escrow,the Escrow Agent shall make
the following prorations: (i)property taxes and assessments will be prorated as of the close of
escrow based upon the most recent tax bill available, including any property taxes which may be
assessed after the close of escrow but which pertain to the period prior to the transfer of title to
the Property to Buyer, regardless of when or to whom notice thereof is delivered; and (ii) any
bond or assessment(other than assessments allocable to the period of time prior to Close of
Escrow)that constitutes a lien on the Property at the close of escrow will be assumed by Buyer.
Seller does not pay ad valorem taxes.
5.6 Buyer's Post Closing Obligations, Subject to Force Majeure Delay
as set forth in Section 7.4 and the extensions provided in Sections 5.6.1, 5.6.2, and 5.6.3, as
applicable, Buyer shall complete the following in the time set forth below.
Deadline Buyer Post-Closing Obligation
Prior to June 30, 5.6 (a) Buyer shall prepare and submit complete construction documents
2016 including building permit submittal documents which satisfy all
submission requirements for 260 multi-family residential rental units
approved as in the Project Approvals. Seller's exclusive remedies for a
Buyer Default for this Section 5.6(a)are(1)termination of the
Agreement under Section 7.3 and(2) liquidated damages under Section
7.2.2.
Prior to December 5.6 (b) Buyer shall:
31,2016
(i) Obtain demolition and foundation permits for Parcels A, B and D
02/02/16
- 11 -
515
Deadline Buyer Post-Closing Obligation
and D Prime, as applicable consistent with the Project Approvals.
(ii)Close escrow on Parcels A, B, C and D pursuant to Section 5.1.
(iii) Buyer to either(A)prepare and submit to the City Manager
Buyer's land assembly and proposed development options for
Buyer's potential acquisition of some or all properties on the north
side of Miller Avenue between Parcels B and C ("Land Assembly
Option"), or(B) submit written notice of intent not to proceed with
the Land Assembly Option.
Seller's exclusive remedies for a Buyer Default for Section 5.6(b)(i)
and(ii) are(1)termination of the Agreement under Section 7.3 and
(2)liquidated damages under Section 7.2.2. Buyer shall not be in
Default under Section 5.6(b)(iii),but Seller shall withhold
conveyance of Parcel C from Closing if Buyer either does not submit
a timely written notice to proceed with the Land Assembly Option or
if Buyer submits a notice of intent not to proceed with the Land
Assembly Option. If Parcel C is not conveyed to Seller, Buyer shall
also assign all of its rights in the land use entitlements, the
development, engineering, construction and building plans ("Parcel
C Plans")to the Seller, or Seller's designee, and shall deliver a
complete set of the Parcel C Plans to the Seller, or designated
recipient within South San Francisco.
Prior to March 31, 5.6(c)The Buyer shall:
2017
(i) Commence and complete demolition of existing structures on the
Parcel A, Parcel D and Parcel D Prime. The existing parking lot on
Parcel B is intended to be used for construction staging so will not be
subject to demolition and commencement of construction of the
replacement parking lot until near completion of construction on
Parcel A, Parcel D and Parcel D Prime.
(ii) Commence Construction of 260 multi-family residential rental
units approved as part of City issued permits consistent with the
Project Approvals on Parcels A, B and D and Parcel D Prime.
"Commence Construction" shall be deemed to have occurred when
Buyer has obtained grading and foundation permits and has
commenced work on the grading and foundations for Parcels A and
D.
(iii) If Buyer has submitted a notice to proceed with the Land
02/02/16
- 12 -
516
Deadline Buyer Post-Closing Obligation
Assembly Option then either(i) file complete application,pursuant to
City of South San Francisco land use application requirements, for
revised land use entitlements for Parcel C including adjacent land
provided that Buyer has acquired or has an enforceable option to
acquire all properties adjacent to the north side of Miller Avenue that
are located between Parcels B and C ("Revised Parcel C
Entitlements Application"), or(ii) submit written notice of intent not
to proceed with the Revised Parcel C Entitlements Application. The
Revised Parcel C Entitlements Application shall be subject to any
applicable CEQA requirements and all applicable City land use
entitlement processes.
Seller's exclusive remedies for a Buyer Default for Section 5.6(c)(i)
and(ii) is specific performance under this Agreement.
Buyer shall not be in Default under Section 5.6(c)(iii),but Seller has
the right to cause the Buyer to re-convey of Parcel C if Buyer either
does not submit a timely written notice to proceed with the Revised
Parcel C Entitlements Application or if Buyer submits a notice of
intent not to proceed with the Revised Parcel C Entitlements
Application. If Parcel C is re-conveyed to Seller, Buyer shall also
assign all of its rights in the Parcel C Plans to the Seller, or Seller's
designee, and shall deliver a complete set of the Parcel C Plans to the
Seller, or designated recipient within South San Francisco. In the
event Buyer submits a notice of intent not to proceed, Seller and Buyer
agree to take all actions necessary to re-convey Parcel C to the Seller
and Seller shall accept re-conveyance of Parcel C and the Parcel C
Plans.
Prior to March 31, 5.6 (d)
2018
(i) If Buyer has submitted a notice to proceed with the Land Assembly
Option and a notice to proceed with the Revised Parcel C Entitlements
Application, then the Buyer shall either(A)provide written
confirmation to the Seller that Buyer has acquired or has an
enforceable option to acquire, on terms that are acceptable to Buyer in
in sole discretion the property subject to the Land Assembly Option
(the written confirmation shall include either a copy of the purchase or
option agreement or written confirmation from the sellers of the
properties that Buyer has an enforceable option to acquire the
properties), or(B)provide written notice of intent to abandon its Land
Assembly Option.
(ii) If the Buyer has not delivered a notice of intent to abandon its
02/02/16
- 13 -
517
Deadline Buyer Post-Closing Obligation
Land Assembly Option,then Buyer shall diligently pursue and take all
actions necessary for the City to conduct all required public hearings
and consider the Revised Parcel C Entitlements.
Buyer shall not be in Default under Section 5.6(d)(i) and (i), but Seller
has the right to cause the Buyer to re-convey of Parcel C if Buyer
either does proceed as provided under Section 5.6(d)(i)or(ii). If
Parcel C is re-conveyed to Seller, Buyer shall also assign all of its
rights in the Parcel C Plans to the Seller, or Seller's designee, and shall
deliver a complete set of the Parcel C Plans to the Seller, or designated
recipient within South San Francisco. In the event Buyer submits a
notice of intent not to proceed, Seller and Buyer agree to take all
actions necessary to re-convey Parcel C to the Seller and Seller shall
accept re-conveyance of Parcel C and the Parcel C Plans.
Prior to March 31, 5.6 (e) The Buyer shall:
2019
(i) Substantially Complete development of the 260 multi-family
residential rental properties on Parcel A, Parcel D and Parcel D Prime.
As used herein "Substantially Complete"or"Substantial
Completion" shall be deemed to have occurred when(i) Buyer has
provided written evidence to the City Manager that eighty five(85)
percent of the contract price for the construction of the 260 multi-
family residential rental units(including all change orders and all
amounts due and payable to the contractor under the construction
contract for work performed but being held as retention by Buyer
under the terms of the construction contract)has been expended, (ii)
all exterior building improvements and all interior building
improvements are complete with the exception of finish work defined
as flooring, counters, countertops, appliances, finish mechanical,
electrical,plumbing, and carpentry,paint, landscaping, and interior of
elevators, and(iii)the City Manager determines, in his or her
reasonable discretion that the life safety systems, including but not
limited to all required sprinkler systems, within the applicable portion
have been installed and are fully functional.
(ii)open a leasing center for the 260 multi-family residential rental
units on the Property or within the Downtown Station Area Specific
Plan Area.
(iii)Complete construction and obtain a certificate of occupancy for
the parking lot improvements required for Parcel B, provided that if
Buyer has obtained Revised Parcel C Entitlements and those land use
entitlements modify development on Parcel B, then Buyer shall
02/02/16
- 14 -
518
Deadline Buyer Post-Closing Obligation
develop Parcel B pursuant to the Revised Parcel C Entitlements.
(iv)Commence construction of development of twelve townhomes
approved consistent with the Project Approvals,or if Revised Parcel C
Entitlements have been approved by the City then Commence
Construction of the project approved as part of the Revised Parcel C
Entitlements. "Commence Construction" shall be deemed to have
occurred when Buyer has obtained grading and foundation permits and
has commenced work on the grading and foundations.
(v) If Buyer has not commenced construction as required in
subsection(iv)above, and if Buyer has obtained Revised Parcel C
Entitlements and has provided written confirmation that Buyer has
acquired or has an enforceable option to acquire the property as set
forth in Section 5.6(d)(i)above, Buyer upon payment of$100,000 to
the Seller prior to the Commence Construction deadline may extend
the deadline to Commence Construction on Parcel C for one year.
Seller's exclusive remedies for a Buyer Default for Section 5.6(e)(i),
(ii) and(iii) is specific performance under this Agreement. Buyer shall
not be in Default under Section 5.6(e)(v),but Seller has the right to
cause the Buyer to re-convey Parcel C if Buyer either does not submit
a timely written notice to proceed with the Revised Parcel C
Entitlements Application or if Buyer submits a notice of intent not to
proceed with the Revised Parcel C Entitlements Application. If Parcel
C is re-conveyed to Seller, Buyer shall also assign all of its rights in
the Parcel C Plans to the Seller, or Seller's designee, and shall deliver
a complete set of the Parcel C Plans to the Seller, or designated
recipient within South San Francisco. In the event Buyer submits a
notice of intent not to proceed, Seller and Buyer agree to take all
actions necessary to re-convey Parcel C to the Seller and Seller shall
accept re-conveyance of Parcel C and the Parcel C Plans.
5.6.1 Seller's Extension: The deadlines set forth in Section 5.6, subsections (a)through
(e) shall each be subject to a ninety(90) day extension,provided(I)that the Buyer submits a
written request for an extension prior to the deadline which shall include the rationale for the
request and summary of the actions Buyer has taken to satisfy the obligation prior to the deadline
and(2) the extension request is approved by the Executive Director or South San Francisco City
Manager, which such approval shall not be unreasonably withheld.
5.6.2 Buyer's Extension. The deadlines set forth in Section 5.6 (a)be subject to a
maximum of two extensions of 30 days (no more than 60 days for 5.6(a)) and a maximum of
02/02/16
- 15 -
519
four extensions of 30 days(no more than 120 days for 5.6(b)upon written notice to Seller and
Buyer's payment to Seller of$25,000 for each such 30-day extension.
5.6.3 City Review: This deadlines set forth in Section 5.6, subsections (b), (c) and(e)(iv)
are each contingent upon the City reviewing and providing comments or approving the grading
and building plans submitted by Buyer within twenty one(21)days of submission of complete
grading or building plans. This 21 day period shall commence anew each time that Buyer
submits revised plans in response to City comments on the prior version of the grading or
building plans. Buyer shall be solely responsible for submitting complete grading or building
plans that satisfy all code and City requirements. Buyer shall be responsible for payment of all
required City building permit fees including costs for City to retain contract plan check services.
In the event that City review exceeds 21 days, the deadline set forth herein shall be extended one
day for each day the City review exceeds 21 days.
5.6.4 Community Enhancements Payments. In the event that Buyer fails to pay the City
when due any portion of the Community Enhancements Payment as set forth in Section 2.4 of
Exhibit E to the DA between Buyer and City, Buyer shall,upon written notice from Seller and
upon completion of a thirty(30) day cure period,pay Seller the amount payable under Section
2.4 of the DA not previously paid by the Buyer.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1 Seller's Representations, Warranties and Covenants. In addition to
the representations,warranties and covenants of Seller contained in other sections of this
Agreement, Seller hereby represents, warrants and covenants to Buyer that the statements below
in this Section 6.1 are each true and correct as of the Closing Date provided however, if to
Seller's actual knowledge any such statement becomes untrue prior to Closing, Seller will notify
Buyer in writing and Buyer will have three(3)business days thereafter to determine if Buyer
wishes to proceed with Closing. If Buyer determines it does not wish to proceed,then the terms
of Section 7.2 will apply.
(a) Authority. Seller is a public agency, lawfully formed, in
existence and in good standing under the laws of the State of California. Seller has the full right,
capacity,power and authority to enter into and carry out the terms of this Agreement. This
Agreement has been duly executed by Seller, and upon delivery to and execution by Buyer is a
valid and binding agreement of Seller.
(b) Encumbrances. Other than the Mural License Agreement
related to the mural "Transporting Oneself' located at 415 Airport Boulevard and the exceptions
set forth in the Preliminary Title Report, Seller has not alienated, encumbered, transferred,
mortgaged, assigned,pledged, or otherwise conveyed its interest in the Property or any portion
thereof,nor entered into any agreement to do so, and there are no liens, encumbrances,
mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting
the Property, except as disclosed in the Preliminary Report. Seller shall not, directly or
indirectly, alienate, encumber, transfer, mortgage, assign,pledge, or otherwise convey its interest
02/02/16
- 16 -
520
prior to the Close of Escrow, as long as this Agreement is in force. Seller shall cooperate with
Buyer, at no out of pocket cost to the Seller, to comply with the requirements of the Project
Approvals Planning Condition of Approval No. 9 that the Parties acknowledge is required to be
satisfied prior to the issuance of a demolition or building permit for the Project.
(c) No Right of Possession. Other than the Mural License
Agreement related to the mural "Transporting Oneself' located at 415 Airport Boulevard,there
are no agreements, including any leases, licenses and occupancy agreements, affecting the
Property. There are no agreements which will be binding on the Buyer or the Property after the
Close of Escrow. Other than the utility easements set forth on the Preliminary Title Report, no
person or entity other than Seller has the right to use, occupy, or possess the Property or any
portion thereof. Seller will not enter into any lease or other agreement affecting the Property or
any portion thereof without the written consent of Buyer.
(d) No Conflict. Seller's execution, delivery and performance
of its obligations under this Agreement will not constitute a default or a breach under any
contract, agreement or order to which Seller is a party or by which Seller is bound.
(e) No Litigation or Other Proceeding. To Seller's current
actual knowledge, no litigation or other proceeding(whether administrative or otherwise) is
outstanding or has been threatened which would prevent, hinder or delay the ability of Seller to
perform its obligations under this Agreement, or that would adversely affect the Property.
(f) No Seller Bankruptcy. Seller is not the subject of any
bankruptcy proceeding, and no general assignment or general arrangement for the benefit of
creditors or the appointment of a trustee or receiver to take possession of all or substantially all
of Seller's assets has been made.
(g) Condition of Property. Seller has no notice of any pending
or threatened action or proceeding arising out of the condition of the Property or any alleged
violation of any Environmental Laws. Except as otherwise disclosed by City and provided in
Section 3.6, to Seller's actual current knowledge,the Property is in compliance with all
Environmental Laws. The Seller will not make or allow any material adverse change to the
condition of the Property.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Seller contained in this Agreement are conditions precedent to
Buyer's obligation to proceed with the Closing hereunder. The foregoing representations and
warranties shall not be deemed merged into the deed upon closing and shall survive the Close of
Escrow until the satisfaction of the Buyer's Post-Closing Obligations under Section 5.6 and shall
survive any earlier expiration or termination of this Agreement for a period of twelve(12)
months.
6.2 Buyer's Representations and Warranties. In addition to the
representations, warranties and covenants of Buyer contained in other sections of this
Agreement, Buyer hereby represents, warrants and covenants to Seller that the statements below
02/02/16
- 17 -
521
in this Section 6.2 are each true as of the Date of Agreement, and, if to Buyer's actual knowledge
any such statement becomes untrue prior to Closing, Buyer shall so notify Seller in writing and
Seller shall have at least three(3)business days thereafter to determine if Seller wishes to
proceed with Closing. If Seller determines it does not wish to proceed, then the terms of Section
7.2 will apply.
(a) Authority. Buyer is a limited liability company. Buyer has the
full right, capacity, power and authority to enter into and carry out the terms of this Agreement.
This Agreement has been duly executed by Buyer, and upon delivery to and execution by Seller
shall be a valid and binding agreement of Buyer.
(b) No Bankruptcy. Buyer is not bankrupt or insolvent under any
applicable federal or state standard, has not filed for protection or relief under any applicable
bankruptcy or creditor protection statute, and has not been threatened by creditors with an
involuntary application of any applicable bankruptcy or creditor protection statute.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Buyer contained in this Agreement are conditions precedent to
Seller's obligation to proceed with the Closing hereunder. The foregoing representations and
warranties shall survive the Closing and continue until issuance of a satisfaction of the Buyer's
Post-Closing Obligations under Section 5.6.
7. DEFAULT, REMEDIES, TERMINATION.
7.1 Default Remedies - General. Failure by either Party to perform any action
or covenant required by this Agreement within sixty(60) days following receipt of written
Notice from the other Party specifying the failure shall constitute a"Default"under this
Agreement; provided,however, that if the failure to perform cannot be reasonably cured within
such sixty(60) day period, a Party shall be allowed additional time as is reasonably necessary to
cure the failure so long as such Party commences to cure the failure within the sixty(60)day
period and thereafter diligently prosecutes the cure to completion. Subject to the limitations of
Section 7.2 below, any default by the Buyer under the Development Agreement which is not
cured following notice and expiration of any applicable cure periods thereunder shall also
constitute a Default under this Agreement, and upon occurrence of such Default and without any
right to further notice or additional cure period, the Seller shall have all remedies available to it
under this Agreement, including the right to terminate this Agreement as set forth in Section 7.3
below.
7.2 Legal Actions.
7.2.1 Institution of Legal Actions and Remedies. Upon the occurrence
of a Default under this Agreement, the non-defaulting Party shall have the right to institute any
action at law or in equity to cure, correct,prevent or remedy such Default, subject to the express
limitations on remedies provided in this Section 7.2.1. Neither Party shall have the right to
recover any punitive, consequential, or special damages. Such legal actions must be instituted in
02/02/16
- 18 -
522
the Superior Court of the County of San Mateo, State of California, or in the Federal District
Court for the Northern District of the State of California.
7.2.1.1 Default by Buyer; Seller's Remedies. The Seller's
remedies shall be expressly limited as follows:
a. Pre-Closing. Upon the occurrence of a Default by Buyer that
occurs before Closing under Section 5.2, Section 5.5, Section 5.6(a), 5.6 (b)(1) and (b)(ii), and
Section 6.2,the Seller's remedies shall be limited to (i) liquidated damages pursuant to Section
7.2.2 and (ii)termination of this Agreement pursuant to Section 7.3.
b. Post-Closing. Upon the occurrence of a Default by Buyer that
occurs after Closing under Section 5.6 (b), 5.6(c), 5.6(d) and 5.6(e),the Seller's remedies shall
be limited to the remedies expressly provided with respect to each obligation set forth in Sections
under each of Section 5.6 (b), 5.6(c), 5.6(d) and 5.6(e), as applicable.
7.2.1.2 Default by Seller; Buyer's Remedies. Upon the
occurrence of a Default by Seller under this Agreement, Buyer's remedies shall be limited to
obtaining specific performance or injunctive relief, or terminating this Agreement.
7.2.2 Liquidated Damages. SUBJECT TO NOTICE AND EXPIRATION
OF APPLICABLE CURE PERIODS AND ANY PERMITTED EXTENSIONS OF TIME AS
PROVIDED IN THIS AGREEMENT, IF IN THE EVENT OF A BUYER DEFAULT AS SET
FORTH IN 7.2.1.1, THE SELLER WILL SUFFER DAMAGES AND THAT IT IS
IMPRACTICABLE AND INFEASIBLE TO FIX THE ACTUAL AMOUNT OF SUCH
DAMAGES. THEREFORE, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON
THE DATE OF THIS AGREEMENT, IN THE EVENT OF A CLOSING DEFAULT, BUYER,
WITHIN THIRTY(30) DAYS FOLLOWING SELLER'S WRITTEN DEMAND THEREFOR,
SHALL TURN OVER ALL REPORTS AND PLANS IN THE BUYER'S ACTUAL OR
CONSTRUCTIVE POSSESSION THAT HAVE BEEN PREPARED BY AND FOR BUYER
RELATED TO THE PROJECT AND THE PROPERTY (WITH THE EXCEPTION OF
BUYER'S INTELLECTUAL PROPERTY, CONFIDENTIAL FINANCIAL INFORMATION,
AND ANY INFORMATION SUBJECT TO LEGAL PRIVILEGE) (THE "MATERIALS.")
THE BUYER'S INITIAL DEPOSIT,AND WHERE APPLICABLE UNDER THIS
AGREEMENT, BUYER'S SECOND DEPOSIT, AND MATERIALS SHALL SERVE AS
LIQUIDATED DAMAGES TO THE SELLER FOR A DEFAULT SPECIFIED IN SECTION
7.2.1.1(a). THE VALUE OF THE BUYER'S INITIAL DEPOSIT, AND WHERE
APPLICABLE BUYER'S SECOND DEPOSIT, AND MATERIALS CONSTITUTES A
REASONABLE ESTIMATE OF THE DAMAGES THAT THE SELLER WOULD INCUR IN
THE EVENT OF A CLOSING DEFAULT. RETENTION OF THE BUYER'S INITIAL
DEPOSIT, AND WHERE APPLICABLE BUYER'S SECOND DEPOSIT, AND MATERIALS
SHALL BE THE SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER IN THE
EVENT OF A DEFAULT A DEFAULT SPECIFIED IN SECTION 7.2.1.1(a), AND THE
SELLER WAIVES ANY AND ALL RIGHT TO SEEK OTHER RIGHTS OR REMEDIES
AGAINST BUYER, INCLUDING WITHOUT LIMITATION, SPECIFIC PERFORMANCE.
02/02/16
- 19 -
523
THE LIQUIDATED DAMAGES PROVIDED FOR HEREIN IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTIONS 3275 OR 3369 OF
THE CALIFORNIA CIVIL CODE, BUT IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO THE SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE
CALIFORNIA CIVIL CODE. SELLER WAIVES THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 3389. BY PLACING ITS INITIALS BELOW, BUYER AND
SELLER SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
ABOVE, THE REASONABLENESS OF THE AMOUNT OF LIQUIDATED DAMAGES
AGREED UPON, AND THE FACT THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE
CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS:
SELLER BUYER
7.2.3 Acceptance of Service of Process. In the event that any legal action
is commenced by Buyer against Seller, service of process on Seller shall be made by personal
service upon the Executive Director at the address provided in Section 13.8 or in such other
manner as may be provided by law. In the event that any legal action is commenced by Seller
against Buyer, service of process on Buyer shall be made by personal service upon W-K
Ventures, Inc., a California corporation, Buyer's registered agent for service of process in
California, at 901 Mariner's Island Boulevard, 7th Floor, San Mateo, CA 94404 or in such other
manner as may be provided by law.
7.3 Termination. In addition to termination upon satisfaction of all material
terms of this Agreement, this Agreement may be terminated by the Party for whom a condition is
intended to benefit: (i) if there is an uncured Default, after Notice from the Party not in default
and expiration of all cure periods, (ii)if there is a failure of an express Buyer Condition
Precedent or Seller Condition Precedent(which is not waived by the Party whom the condition
benefits)by timely Notice from the Party whom the condition benefits, (iii) a representation or
warranty of a Party becomes untrue prior to Closing under Section 6.1 or 6.2 (which is not
waived by the Party whom the condition benefits), (iv)upon mutual written consent of the
Parties, each in its sole discretion. Upon termination, the Parties will also cooperate to record a
notice of termination.
7.4 Force Majeure Delay. All obligations in this Agreement shall not be
deemed to be in default, all performance and other dates specified in those sections shall be
extended,where delays are due to: war; insurrection; strikes and labor disputes; lockouts; riots;
floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; litigation and arbitration, including court delays; legal
challenges to this Agreement, legal challenges to the Project Approvals, or legal challenges to
any other approval required from any public agency other than the City for the Project, or any
initiatives or referenda regarding the same; environmental conditions,pre-existing or discovered,
delaying the construction or development of the Property or any portion thereof; unusually
severe weather but only to the extent that such weather or its effects(including, without
02/02/16
- 20 -
524
limitation, dry out time)result in delays that cumulatively exceed thirty(30) days for every
winter season occurring after commencement of construction of the Project; acts or omissions of
the other Party; or acts or failures to act of any public or governmental agency or entity(except
that acts or failures to act of Seller shall not excuse performance by Seller); moratorium; any
delay caused by compliance with the requirements of Project Approval Planning Condition of
Approval 9 or the termination of the Mural License Agreement related to the mural
"Transporting Oneself' located at 415 Airport Boulevard, so long as the Buyer is acting
diligently and in good faith; or a Severe Economic Recession (each a"Force Majeure Delay").
An extension of time for any such cause shall be for the period of the enforced delay and shall
commence to run from the time of the commencement of the cause, if Notice by the Party
claiming such extension is sent to the other Party within sixty(60) days of the commencement of
the cause. If Notice is sent after such sixty(60) day period, then the extension shall commence
to run no sooner than sixty(60) days prior to the giving of such Notice. Buyer's inability or
failure to obtain financing or otherwise timely satisfy shall not be deemed to be a cause outside
the reasonable control of the Buyer and shall not be the basis for an excused delay unless such
inability, failure or delay is a direct result of a Severe Economic Recession. "Severe Economic
Recession"means a decline in the monetary value of all finished goods and services produced in
the United States, as measured by initial quarterly estimates of US Gross Domestic Project
("GDP") published by the US Department of Commerce Bureau of Economic Analysis (and not
BEA's subsequent monthly revisions), lasting more than four(4) consecutive calendar quarters.
Any quarter of flat or positive GDP growth shall end the period of such Severe Economic
Recession.
8. BROKERS. Seller represents that no real estate broker has been retained
by Seller in the sale of the Property or the negotiation of this Agreement. With the exception of
a broker agreement with Roger Stuhlmuller, Buyer represents that no real estate broker has been
retained by Buyer in the procurement of the Property or negotiation of this Agreement. Buyer
shall be solely responsible for payment of any broker fee to Roger Stuhlmuller. Buyer and Seller
shall indemnify,hold harmless and defend the other Party from any and all claims, actions and
liability for any breach of the preceding sentence, and any commission, finder's fee, or similar
charges arising out the other Party's conduct.
9. ASSIGNMENT. Prior to satisfactory completion of the Buyer's Post
Closing Obligations under Section 5.6, neither Seller nor Buyer may assign its rights or delegate
its duties under this Agreement, except for Buyer Permitted Transfers as defined below,without
(i)the express written consent of the other Party, which consent may be will not be unreasonably
withheld or delayed and (ii) an concurrent assignment of the Development Agreement in
accordance with Section 8.1 of the Development Agreement. If Buyer proposes an assignment,
Buyer will seek Seller's prior written consent to any transfer, which consent will not be
unreasonably withheld or delayed. Seller may refuse to give consent only if, in light of the
proposed transferee's reputation and financial resources, such transferee would not, in Seller's
reasonable opinion,be able to perform the obligations proposed to be assumed by such
transferee. Such determination will be made by the Executive Director of the Agency and will
be appealable by Buyer to the Board of the Successor Agency. Notwithstanding any other
02/02/16
- 21 -
525
provision of this Agreement to the contrary, each of following transfers are permitted and shall
not require Seller consent under this Section 9 (each a"Buyer Permitted Transfer"):
(a) Any transfer for financing purposes to secure the funds necessary for
construction and/or permanent financing of the Project;
(b) An assignment of this Agreement to an Affiliate of Buyer;
(c) The sale of one or more of the completed residential units to an occupant
thereof;
(d) Transfers of common area to a homeowners or property owners
association; or
(e) Dedications and grants of easements and rights of way required in
accordance with the Project Approvals.
For the purposes of this Section 9, "Affiliate of Buyer"means an entity or person that is directly
or indirectly controlling, controlled by, or under common control with Buyer. For the purposes
of this definition, "control"means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of an entity or a person, whether through the
ownership of voting securities, by contract, or otherwise, and the terms"controlling" and
"controlled" have the meanings correlative to the foregoing. No permitted assignment of any of
the rights or obligations under this Agreement shall result in a novation or in any other way
release the assignor from its obligations under this Agreement unless a release is provided in the
form of assignment and assumption agreement approved by the reviewing Party.
10. ENVIRONMENTAL INDEMNITY. Effective upon Close of Escrow,
and subject to Section 3.6, to the fullest extent allowed by law, Buyer agrees to unconditionally
and fully indemnify,protect, defend(with counsel satisfactory to Buyer in Buyer's sole
discretion), and hold Seller and the City, and their respective elected and appointed officers,
officials, employees, and agents, ("Seller Indemnified Parties")harmless from and against any
and all claims (including without limitation third party claims for personal injury, real or
personal property damage, or damages to natural resources), actions, administrative proceedings
(including without limitation both formal and informal proceedings),judgments, damages,
punitive damages, penalties, fines, costs (including without limitation any and all costs relating
to investigation, assessment, analysis or clean-up of the Property), liabilities (including without
limitation sums paid in settlements of claims), interest, or losses, including reasonable attorneys'
and paralegals' fees and expenses (including without limitation any such fees and expenses
incurred in enforcing this Agreement or collecting any sums due hereunder), together with all
other costs and expenses of any kind or nature (collectively, the "Claims") that arise directly or
indirectly from or in connection with the presence, suspected presence, release, or suspected
release, of any Hazardous Materials in, on or under the Property or to the extent emanating from
the Property, in or into the air, soil, soil gas, groundwater, or surface water at, on, about, around,
above,under or within the Property, or any portion thereof that are existing as of the Close of
Escrow or are caused to exist during the period of ownership of the Property by Buyer, except
02/02/16
- 22 -
526
those Costs that arise solely as a result of actions by Seller, the City(including their consultants
and contractors) or Seller Indemnified Parties. Upon receipt of any Claim, the Seller
Indemnified Parties shall promptly notify and tender such Claim to the Buyer. Any failure to
timely tender such Claim to Buyer to allow Buyer to defend such Claim shall be deemed a
waiver of such Seller Indemnified Party's rights under this Section 10. Buyer shall resolve such
Claim in its sole and absolute discretion so long as the Seller Indemnified Party is not subject to
any costs or liability. The indemnification provided pursuant to this Section shall specifically
apply to and include claims or actions brought by or on behalf of employees of Buyer or any of
its predecessors in interest and Buyer hereby expressly waives any immunity to which Buyer
may otherwise be entitled under any industrial or worker's compensation laws. The
indemnification provided pursuant to this Section shall include, without limitation, all loss or
damage sustained by the Seller due to any Hazardous Materials: (a)that are present or suspected
by a governmental agency having jurisdiction to be present in the Property or in the air, soil, soil
gas, groundwater, or surface water at, on, about, above,under, or within the Property(or any
portion thereof) or to have emanated from the Property, or(b) to the extent emanating from the
Property that migrate, flow,percolate, diffuse, or in any way move onto, into, or under the air,
soil, soil gas, groundwater, or surface water at, on, about, around, above,under, or within the
Property (or any portion thereof) after the date of this Agreement as a result of Seller's activities
on the Property prior to Close of Escrow. The obligations of this Section 10 shall not apply to
Parcel C if Parcel C is re-conveyed to the City pursuant to Section 5.6(c), except to the extent
that Hazardous Materials have been placed on Parcel C by Buyer or its agents, contractors or
consultants. The provisions of this Section 10 shall survive the termination of this Agreement
and the Close of Escrow. If Buyer purchases an environmental pollution legal liability policy for
the Property, the policy shall include the City and Agency as additional insureds.
11. RELEASE BY BUYER. Effective upon the Close of Escrow, Buyer
waives, releases, remises, acquits and forever discharges Seller and the City, and its officers,
directors, board members, managers, employees and agents, and any other person acting on
behalf of Seller from any and all claims, actions, causes of action, demands, rights, damages,
costs, expenses and compensation whatsoever, direct or indirect, known or unknown, foreseen or
unforeseen, which Buyer now has or which may arise in the future on account of or in any way
arising from or in connection with the physical condition of the Property or any law or regulation
applicable thereto including, without limiting the generality of the foregoing, any federal, state or
local law, ordinance or regulation pertaining to Hazardous Materials. This Section 11 shall not
apply to the City for any portion of the Property that is, after Closing, dedicated for public use
(e.g. public sidewalks) and is under the direct management and maintenance of the City. This
Section 11 shall survive the termination of this Agreement and the Close of Escrow.
BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITH SECTION 1542 OF THE
CALIFORNIA CIVIL CODE,WHICH PROVIDES AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
02/02/16
- 23 -
527
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
BY INITIALING BELOW, BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542
OF THE CALIFORNIA CIVIL CODE WITH RESPECT TO THE FOREGOING RELEASE:
Buyer's initials:
12. HAZARDOUS MATERIALS; DEFINITIONS.
12.1 Hazardous Materials. As used in this Agreement, "Hazardous
Materials" means any chemical, compound, material, mixture, or substance that is now or may
in the future be defined or listed in, or otherwise classified pursuant to any Environmental Laws
(defined below) as a "hazardous substance", "hazardous material", "hazardous waste",
"extremely hazardous waste", infectious waste", toxic substance", toxic pollutant", or any other
formulation intended to define, list or classify substances by reason of deleterious properties such
as ignitability, corrosivity, reactivity, carcinogenicity, or toxicity. The term "Hazardous
Materials" shall also include asbestos or asbestos-containing materials, radon, chrome and/or
chromium, polychlorinated biphenyls, petroleum, petroleum products or by-products, petroleum
components, oil, mineral spirits, natural gas, natural gas liquids, liquefied natural gas, and
synthetic gas usable as fuel, perchlorate, and methyl tert butyl ether, whether or not defined as a
hazardous waste or hazardous substance in the Environmental Laws.
12.2 Environmental Laws. As used in this Agreement, "Environmental
Laws" means any and all federal, state and local statutes, ordinances, orders, rules, regulations,
guidance documents, judgments, governmental authorizations or directives, or any other
requirements of governmental authorities, as may presently exist, or as may be amended or
supplemented, or hereafter enacted, relating to the presence, release, generation, use, handling,
treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the
environment or human, plant or animal health, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. § 2601 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Porter-Cologne
Water Quality Control Act (Cal. Water Code § 13000 et seq.), the Toxic Mold Protection Act
(Cal. Health & Safety Code § 26100, et seq.), the Safe Drinking Water and Toxic Enforcement
Act of 1986 (Cal. Health & Safety Code § 25249.5 et seq.), the Hazardous Waste Control Act
(Cal. Health& Safety Code § 25100 et seq.), the Hazardous Materials Release Response Plans &
Inventory Act (Cal. Health & Safety Code § 25500 et seq.), and the Carpenter-Presley-Tanner
Hazardous Substances Account Act(Cal. Health and Safety Code, Section 25300 et seq.).
02/02/16
- 24 -
528
13. MISCELLANEOUS.
13.1 Attorneys' Fees. If any Party employs counsel to enforce or
interpret this Agreement, including the commencement of any legal proceeding whatsoever
(including insolvency,bankruptcy, arbitration, mediation, declaratory relief or other litigation),
the prevailing Party shall be entitled to recover its reasonable attorneys' fees and court costs
(including the service of process, filing fees, court and court reporter costs, investigative fees,
expert witness fees, and the costs of any bonds, whether taxable or not) and shall include the
right to recover such fees and costs incurred in any appeal or efforts to collect or otherwise
enforce any judgment in its favor in addition to any other remedy it may obtain or be awarded.
Any judgment or final order issued in any legal proceeding shall include reimbursement for all
such attorneys' fees and costs. In any legal proceeding,the "prevailing party" shall mean the
Party determined by the court to most nearly prevail and not necessarily the Party in whose favor
a judgment is rendered.
13.2 Interpretation. This Agreement has been negotiated at arm's
length and each party has been represented by independent legal counsel in this transaction and
this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly,
each Party hereby waives any benefit under any rule of law (including Section 1654 of the
California Civil Code) or legal decision that would require interpretation of any ambiguities in
this Agreement against the drafting Party.
13.3 Survival. All indemnities, covenants, representations and
warranties contained in Section 6.1, Section 6.2, Section 10, and Section 11 of this Agreement
shall survive Close of Escrow as expressly provided in each such section.
13.4 Successors. Except as provided to the contrary in this Agreement,
this Agreement shall be binding on and inure to the benefit of the Parties and their successors
and assigns.
13.5 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California.
13.6 Integrated Agreement; Modifications. This Agreement contains all
the agreements of the Parties concerning the subject hereof any cannot be amended or modified
except by a written instrument executed and delivered by the parties. There are no
representations, agreements, arrangements or understandings, either oral or written, between or
among the parties hereto relating to the subject matter of this Agreement that are not fully
expressed herein. In addition there are no representations, agreements, arrangements or
understandings, either oral or written,between or among the Parties upon which any Party is
relying upon in entering this Agreement that are not fully expressed herein.
13.7 Severability. If any term or provision of this Agreement is
determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal,
unenforceable, or invalid provisions or part thereof shall be stricken from this Agreement, any
02/02/16
- 25 -
529
such provision shall not be affected by the legality, enforceability, or validity of the remainder of
this Agreement. If any provision or part thereof of this Agreement is stricken in accordance with
the provisions of this Section, then the stricken provision shall be replaced, to the extent possible,
with a legal, enforceable and valid provision this is in keeping with the intent of the Parties as
expressed herein.
13.8 Notices. Any delivery of this Agreement, notice, modification of
this Agreement, collateral or additional agreement, demand, disclosure, request, consent,
approval,waiver, declaration or other communication that either Party desires or is required to
give to the other Party or any other person shall be in writing. Any such communication may be
served personally, or by nationally recognized overnight delivery service(i.e., Federal Express)
which provides a receipt of delivery, or sent by prepaid, first class mail,return receipt requested
to the Party's address as set forth below:
To Buyer: Sares-Regis Group of Northern California
901 Mariner's Island Boulevard, 7th Floor
San Mateo, CA 94404
Attention: Ken Busch and Mark Kroll
Telephone: (650) 377-5805
Email: kbusch @srgnc.com
with a copy to: Holland&Knight LLP
50 California Street, Suite 2500
San Francisco, CA 94109
Attn: Tamsen Plume
Telephone: (415) 743-6900
Fax: (415) 743-6910
Email: tamsen.plume @hklaw.com
To Seller: South San Francisco Successor Agency
400 Grand Avenue
South San Francisco, CA 94080
Attn: Executive Director
Tel (650) 877-8501
Fax (650) 829-6609
Email: Mike.Futrell @ssf.net
with a copy to:Meyers Nave
575 Market Street, Suite 2080
San Francisco, CA 94105
Attn: Jason Rosenberg
Tel (415)421-3711
Fax (415)421-3767
02/02/16
- 26 -
530
If to Escrow Holder: First American Title Insurance Company
1737 North First St., Suite 500
San Jose, CA 95112
Attn: Carol Herrera
Tel: Tel: (408)451-7829
Fax: (408)451-7836
Email: CMHerrera @firstam.com
Any such communication shall be deemed effective upon personal delivery or on
the date of first refusal to accept delivery as reflected on the receipt of delivery or return receipt,
as applicable. Any Party may change its address by notice to the other Party. Each Party shall
make an ordinary, good faith effort to ensure that it will accept or receive notices that are given
in accordance with this section and that any person to be given notice actually receives such
notice.
13.9 Time. Time is of the essence to the performance of each and every
obligation under this Agreement.
13.10 Days of Week. If any date for exercise of any right, giving of any
notice, or performance of any provision of this Agreement falls on a Saturday, Sunday or
holiday, the time for performance will be extended to 5:00 p.m. on the next business day.
13.11 Reasonable Consent and Approval. Except as otherwise provided
in this Agreement,whenever a Party is required or permitted to give its consent or approval
under this Agreement, such consent or approval shall not be unreasonably withheld or delayed.
If a Party is required or permitted to give its consent or approval in its sole and absolute
discretion or if such consent or approval may be unreasonably withheld, such consent or
approval may be unreasonably withheld but shall not be unreasonably delayed.
13.12 Cooperation and Further Assurances. Each Party agrees to
cooperate with the other in this transaction and, in that regard, shall at their own cost and
expense execute and deliver such further documents and instruments and shall take such other
actions as may be reasonably required or appropriate to carry out the intent and purposes of this
Agreement.
13.13 Waivers. Any waiver by any Party shall be in writing and shall not
be construed as a continuing waiver. No waiver will be implied from any delay or failure to take
action on account of any default by any Party. Consent by any Party to any act or omission by
another Party shall not be construed to be consent to any other subsequent act or omission or to
waive the requirement for consent to be obtained in any future or other instance.
13.14 Signatures/Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,but all of which together shall
constitute one and the same instrument. Any one of such completely executed counterparts shall
be sufficient proof of this Agreement.
02/02/16
- 27 -
531
13.15 Date and Delivery of Agreement. Notwithstanding anything to the
contrary contained in this Agreement, the parties intend that this Agreement shall be deemed
effective, and delivered for all purposes under this Agreement, and for the calculation of any
statutory time periods based on the date an agreement between parties is effective, executed, or
delivered, as of the Effective Date.
13.16 Representation on Authority of Parties. Each person signing this
Agreement represents and warrants that he or she is duly authorized and has legal capacity to
execute and deliver this Agreement. Each Party represents and warrants to the other that the
execution and delivery of the Agreement and the performance of such Party's obligations
hereunder have been duly authorized and that the Agreement is a valid and legal agreement
binding on such Party and enforceable in accordance with its terms.
13.16 Access to Property. Prior to the Closing, Seller shall cooperate to
enable representatives of Buyer to obtain the right of access to all portions of the Property for the
purposes of implementing this Agreement. Buyer agrees to provide written Notice to Seller at
least twenty four(24)hours prior to undertaking any studies or work upon the Property. Buyer
shall indemnify, defend, protect and hold Seller and Seller Parties harmless from any Claims
arising out of the acts, omissions, negligence or willful misconduct of Buyer or its employees,
agents, contractors, subcontractors or representatives (each a"Buyer Party" and, collectively,
the"Buyer Parties") in connection with such studies and investigations, except for Claims
arising from or related to any pre-existing condition on or of the Property or Claims to the extent
caused by the active negligence or willful misconduct of Seller or its employees, agents,
contractors or representatives. In addition, in the event Buyer or any Buyer Party causes any
damage to any portion of the Property, Buyer shall promptly restore the Property as nearly as
possible to the physical condition existing immediately prior to Buyer's entry onto the Property.
13.17 Memorandum of Agreement. A Memorandum of Agreement in
substantially the form of Exhibit E attached hereto and incorporated herein by this reference shall
be executed and recorded against the Property immediately following recordation of the Grant
Deed.
13.18 Relationship Between Seller and Buyer. It is hereby
acknowledged that the relationship between Seller and Buyer is not that of a partnership or joint
venture and that Seller and Buyer shall not be deemed or construed for any purpose to be the
agent of the other. Accordingly, except as expressly provided herein or in the exhibits hereto,
Seller shall have no rights,powers, duties or obligations with respect to the development,
operation, maintenance or management of the Project.
13.19 Seller Approvals and Actions. Whenever a reference is made
herein to an action or approval to be undertaken by Seller, the Executive Officer of the Agency
or his or her designee is authorized to act on behalf of Seller.
13.20 Estoppel Certificates. A Party may, at any time during the term of
this Agreement, and from time to time, deliver written notice to another Party requesting such
02/02/16
- 28 -
532
Party to certify in writing that, to the knowledge of the certifying Party, (i) this Agreement is in
full force and effect and a binding obligation of the Parties, (ii)this Agreement has not been
amended or modified either orally or in writing, or if amended; identifying the amendments, (iii)
the requesting Party is not in default in the performance of its obligations under this Agreement,
or if in default, to describe therein the nature and amount of any such defaults, and(iv) any other
information reasonably requested. The requesting Party shall be responsible for all reasonable
costs incurred by the Party from which such certification is requested and shall reimburse such
costs within thirty(30) days of receiving the certifying Party's request for reimbursement. The
Party receiving a request hereunder shall execute and return such certificate or give a written,
detailed response explaining why it will not do so within twenty(20) days following the receipt
thereof. The failure of either Party to provide the requested certificate within such twenty(20)
day period shall constitute a confirmation that this Agreement is in full force and effect and no
modification or default exists. Seller acknowledges that a certificate hereunder may be relied
upon by transferees and Mortgagees.
13.21 Mortgagee Protection. After Close of Escrow, no violation or
breach of the covenants, conditions, restrictions, provisions or limitations contained in this
Agreement 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 Buyer to the Property shall be bound by such remaining covenants, conditions,
restrictions, limitations and provisions, of this Agreement whether such successor's title was
acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
13.22 Effective Date. This Agreement shall be deemed effective upon
the last to occur of all of the following: (i) this Agreement is signed by the Parties, and(ii)the
Project Approvals shall have been approved by the City and shall be effective, (iii)the applicable
statute of limitations period under CEQA for all of the Project Approvals shall have concluded
with no challenge having been filed or, if any legal challenges is filed or instituted, legal
challenge shall have been fully and finally resolved in a manner acceptable to the Parties, each in
its reasonable discretion, and such that no further legal challenge under CEQA is possible.
SIGNATURES ON FOLLOWING PAGES
02/02/16
- 29 -
533
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
SELLER:
SOUTH SAN FRANCISCO
SUCCESSOR AGENCY
By:
Mike Futrell
Executive Director
ATTEST:
By:
Agency Clerk
APPROVED AS TO FORM:
By:
Jason Rosenberg
Agency Counsel
02/02/16
- 30 -
534
BUYER:
MILLER CYPRESS SSF,LLC
a Delaware limited liability company
By: SRGNC Miller Cypress SSF, LLC,
a Delaware limited liability company,
By: SRGNC MF, LLC,
a Delaware limited liability company,
By:
Name: Mark R. Kroll
Title: President
APPROVED AS TO FORM:
By:
Tamsen Plume, Holland&Knight
Counsel for Buyer
02/02/16
- 31 -
535
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B Form of Grant Deed
Exhibit C Pre-Approved Exceptions
Exhibit D Form of Development Agreement
Exhibit E Form of Memorandum of Agreement
02/02/16
- 32 -
536
LIST OF EXHIBITS
Exhibit A Legal Description
Exhibit B Form of Grant Deed
Exhibit C Pre-Approved Exceptions
Exhibit D Form of Development Agreement
Exhibit E Form of Memorandum of Agreement
02/02/16
- 32 -
536
Exhibit A
LEGAL DESCRIPTION
02/02/16
- 33 -
537
Exhibit B
FORM OF GRANT DEED
Recording Requested by
and when Recorded,return to:
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE§§6103,27383
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE)
GRANT DEED
For valuable consideration, receipt of which is hereby acknowledged, South San
Francisco Successor Agency, a public agency, (the "Grantor")hereby grants to Miller Cypress
SSF, LLC, (the "Grantee") all that real property located in the City of South San Francisco,
County of San Mateo, State of California at , designated as San Mateo
County Assessor's Parcel Nos. and more particularly described in Exhibit A attached
hereto and incorporated in this grant deed ("Grant Deed")by this reference.
1. Development Agreement. The Property is conveyed subject to the LRPMP and
that certain Development Agreement dated as of , entered into by and
between Grantee and the City of South San Francisco, a public body, corporate and politic,
acting to carry out the LRPMP (the "Development Agreement").
2. Use Restrictions. The Grantee hereby covenants and agrees, for itself and its
successors and assigns,that the Property shall be used and developed solely for purposes
consistent with the requirements of the City of South San Francisco General Plan, as it presently
exists or may be amended.
3. Nondiscrimination. Grantee shall not restrict the rental, sale, lease, sublease,
transfer,use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis
of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or
national origin of any person. Grantee covenants for itself and all persons claiming under or
through it, and this Grant Deed is made and accepted upon and subject to the condition that there
shall be no discrimination against or segregation of any person or group of persons on account of
any basis listed in subdivision(a) or(d) of Section 12955 of the Government Code, as those
bases are defined in Sections 12926, 12926.1, subdivision(m) and paragraph(1) of subdivision
(p)of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property or part thereof,nor shall Grantee or
any person claiming under or through Grantee establish or permit any such practice or practices
02/02/16
- 34 -
538
of discrimination or segregation with reference to the selection, location, number,use or
occupancy of tenants, lessees, subtenants, sub lessees or vendees in, of, or for the Property or
part thereof.
All deeds, leases or contracts made or entered into by Grantee, its successors or
assigns, as to any portion of the Property or the Improvements shall contain the following
language:
(a) In Deeds,the following language shall appear:
"(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons
claiming under or through it,that there shall be no discrimination against or segregation of a
person or of a group of persons on account of any basis listed in subdivision(a) or(d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision(m) and paragraph(1)of subdivision(p) of Section 12955, and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer,use, occupancy, tenure or enjoyment
of the property herein conveyed nor shall the grantee or any person claiming under or through
the grantee 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, sub lessees or vendees in the property herein conveyed. The foregoing covenant
shall run with the land.
"(2) Notwithstanding paragraph(1), with respect to familial status,paragraph(1) shall
not be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status,nothing in paragraph(1) shall be construed to
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions(n), (o), and(p) of Section 12955 of the Government Code shall apply to paragraph
(1)
(b) In Leases, the following language shall appear:
"(1) The lessee herein covenants by and for the lessee and lessee's heirs, personal
representatives and assigns, and all persons claiming under the lessee or through the lessee, that
this lease is made subject to the condition that there shall be no discrimination against or
segregation of any person or of a group of persons on account of race, color, creed, religion, sex,
sexual orientation,marital status, national origin, ancestry or disability in the leasing, subleasing,
transferring,use, occupancy,tenure or enjoyment of the property herein leased nor shall the
lessee or any person claiming under or through the lessee establish or permit any such practice or
practices of discrimination of segregation with reference to the selection, location,number, use
or occupancy of tenants, lessees, sub lessees, subtenants, or vendees in the property herein
leased.
"(2)Notwithstanding paragraph (1),with respect to familial status,paragraph(1) shall
not be construed to apply to housing for older persons, as defined in Section 12955.9 of the
Government Code. With respect to familial status,nothing in paragraph(1) shall be construed to
02/02/16
- 35 -
539
affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for
senior citizens. Subdivision(d)of Section 51 and Section 1360 of the Civil Code and
subdivisions(n), (o), and(p)of Section 12955 of the Government Code shall apply to paragraph
(1)."
(c) In Contracts,the following language shall appear:
"There shall be no discrimination against or segregation of any person or group of
persons on account of any basis listed in subdivision(a)or(d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision(m) and
paragraph(1) of subdivision(p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee establish or permit
any such practice or practices of discrimination or segregation with reference to selection,
location,number,use or occupancy of tenants, lessee, subtenants, sub lessees or vendees of the
land."
4. Term of Restrictions. The covenants contained in Section 1 and Section 2
regarding use of the Property shall remain in effect until the date which is the expiration date of
the Development Agreement. The covenants against discrimination contained in Sections 3
shall remain in effect in perpetuity.
5. Mortgagee Protection. No violation or breach of the covenants, conditions,
restrictions,provisions or limitations 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 permitted by the Development Agreement; 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. Binding On Successors. The covenants contained in Sections 2 and 3 of this Grant
Deed,without regard to technical or legal classification or designation specified in this Grant
Deed or otherwise, shall to the fullest extent permitted by law and equity,be binding upon
Grantee and any successor in interest to the Property or any part thereof, for the benefit of
Grantor, and its successors and assigns, for such period of time of applicable ownership, and
such covenants shall run in favor of and be enforceable by the Grantor and its successors and
assigns 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. In the event of any breach of any of such covenants,the Grantor and its
successors and assigns shall have the right to exercise all rights and remedies available under law
or in equity to enforce the curing of such breach.
7. Enforcement. The Grantor shall have the right to institute such actions or
proceedings as it may deem desirable to enforce the provisions set forth herein. Any delay by
the Grantor in instituting or prosecuting any such actions or proceedings or otherwise asserting
its rights hereunder shall not operate as a waiver of or limitation on such rights, nor operate to
02/02/16
- 36 -
540
deprive Grantor of such rights, nor shall any waiver made by the Grantor with respect to any
specific default by the Grantee, its successors and assigns,be considered or treated as a waiver of
Grantor's rights with respect to any other default by the Grantee, its successors and assigns, or
with respect to the particular default except to the extent specifically waived.
8. Amendment. Only the Grantor, its successors and assigns, and the Grantee and
the successors and assigns of the Grantee in and to all or any part of the fee title to the Property
shall have the right to consent and agree to changes or to eliminate in whole or in part any of the
covenants contained in this Grant Deed. For purposes of this Section, successors and assigns of
the Grantee shall be defined to include only those parties who hold all or any part of the Property
in fee title, and not to include a tenant, lessee, easement holder, licensee, mortgagee,trustee,
beneficiary under deed of trust, or any other person or entity having an interest less than a fee in
the Property and Improvements.
9. Conflict. In the event there is a conflict between the provisions of this Grant
Deed and the Agreement, it is the intent of the parties that the Agreement shall control.
10. Counterparts. This Grant Deed may be executed in counterparts, each of which
shall be an original and all of which taken together shall constitute one and the same instrument.
SIGNATURES ON FOLLOWING PAGES.
02/02/16
- 37 -
541
IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of
, 2016.
GRANTOR
SOUTH SAN FRANCISCO
SUCCESSOR AGENCY
By:
Mike Futrell
Executive Director
ATTEST:
By:
Clerk
APPROVED AS TO FORM:
By:
Jason Rosenberg
Agency Counsel
GRANTEE: FORM—DO NOT SIGN
MILLER CYPRESS SSF,LLC
By:
APPROVED AS TO FORM:
By:
Tamsen Plume, Holland&Knight, Counsel for Buyer
02/02/16
- 38 -
542
SIGNATURES MUST BE NOTARIZED
02/02/16
- 39 -
543
EXHIBIT A to Grant Deed
(Attach legal description)
02/02/16
- 40 -
544
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss.
County of San Mateo )
On , 20 before me, , a Notary Public, in
and for said State and County, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
NOTARY PUBLIC
02/02/16
- 41 -
545
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
) ss.
County of San Mateo )
On , 20 before me, , a Notary Public, in
and for said State and County, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
NOTARY PUBLIC
02/02/16
- 42 -
546
Exhibit C
PRE-APPROVED EXCEPTIONS
First American Title Company Preliminary Title Report dated May 19, 2015 Order
Number NCS-677875-SC
Exceptions Nos: 1, 2,3,26,31 and 32
Mural License Agreement referenced in Section 6.1
REQUIRED DIS-APPROVED EXCEPTIONS
First American Title Company Preliminary Title Report dated May 19,2015 Order
Number NCS-677875-SC:
Exceptions Nos: 4 through 15, 17 through 25,and 27 through 30.
02/02/16
- 43 -
547
Exhibit D
DEVELOPMENT AGREEMENT
02/02/16
- 44 -
548
EXHIBIT E
FORM OF MEMORANDUM OF AGREEMENT
2599486.1
02/02/16
- 45 -
549