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HomeMy WebLinkAboutReso 43-2016 RESOLUTION NO. 43-2016 CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO, 'STATE OF CALIFORNIA A RESOLUTION APPROVING A PURCHASE AND SALE AGREEMENT WITH ROTARY PLAZA, INC FOR 300 MILLER AVENUE AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT. WHEREAS, the City of South San Francisco ("City") is the owner of certain property certain real property (the "Property") located in the City, known as County Assessor's Parcel Numbers 012-311-230(3 10 Miller Avenue),012-311-240(312 Miller Avenue),012-311-250(314 Miller Avenue and 012-311-260, and, 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; 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 South San Francisco Redevelopment Agency was dissolved on February 1, 2012; and, WHEREAS,pursuant to the Dissolution Law,the State of California Department of Finance ("DOF"), on August 31, 2012, approved transfer of certain properties to the City of South San Francisco in its capacity as the Successor Housing Agency; and, WHEREAS,in January of 2015,the City and Rotary Plaza,Inc("Developer")entered into an Exclusive Negotiation Rights Agreement ("ENRA") that established a mutual understanding among the City and the Developer regarding the potential development of the Property; and, WHEREAS, the Developer has proposed construction of a mixed-use residential development ("Project"), consisting. of 80 affordable senior housing units, 1 manager's unit and 1,993 square feet of community assembly space over.56 acres at the following addresses: 310 Miller Avenue,312 Miller Avenue,314 Miller Avenue and a municipal parking lot(collectively referred to as "300 Miller Avenue" or "Project Site") in the City; and, WHEREAS,the City is interested in selling the Property to the Developer as contemplated in the ENRA,contingent upon approval of a Purchase and Sale Agreement,an Affordable Housing Regulatory Agreement, a Performance Deed of Trust and a Development Agreement by the City Council,Developer securing all funding for the Project,and Developer obtaining all applicable land use entitlements from the City necessary to construct the Project on the Project Site; and, WHEREAS, the City and the Developer now wish to enter into a Purchase and Sale Agreement ("PSA"), attached hereto and incorporated herein as Exhibit A, and, 1 WHEREAS, approval of an Affordable Housing Regulatory Agreement, a Performance Deed of Trust and a Development Agreement are being undertaken in separate resolutions and an ordinance; and, WHEREAS,Developer seeks approval of a Conditional Use Pen-nit,Design Review,Waiver and Modification,Density Bonus and Parking Reduction for the Project("Land Use Entitlements") through a separate resolution; 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 ("DSASP"); 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,the Project is statutorily exempt from CEQA pursuant to Government Code§ 65457 as a residential development project that is undertaken to implement and is consistent with the DSASP and none of the conditions specified in CEQA § 21166 or CEQA Guidelines § 15162 have occurred; and WHEREAS, the Project is also categorically exempt from CEQA pursuant to CEQA Guidelines § 15332 as an infill development project and none of the exceptions to the exemption specified in CEQA Guidelines § 15300.2 have occurred; and WHEREAS, the City prepared an Environmental Consistency Analysis for the Project pursuant to CEQA Guidelines § 15168(c)(2)and concluded that in accordance with the requirements of CEQA Guidelines § 15162, as a result of the Project, no new effects could occur and no new mitigation would be required even if the Project was not exempt from CEQA. The Environmental Consistency Analysis demonstrates 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 EIR certified by City Council nor would any new mitigation measures be required; and, NOW, THEREFORE, BE IT RESOLVED that the City Council 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 (2) Approves the PSA in substantially the same form attached hereto as Exhibit A; and, (3) Authorizes the City Manager to enter into and execute the P'SA on behalf of the City, in substantially the same form as attached hereto as Exhibit A-, to make any revisions, amendments, or modifications,subject to review and approval of City Attorney,deemed necessary to carry out the intent of this Resolution and which do not materially alter or increase the City's obligations thereunder. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 13th day of April, 2016 by the following vote: AYES: Councilmcmbers Karyl Matsumoto, Richard A. Garbarino and Liza Normandy Vice Mayor Pradeep Gupta and Mayor,Mark N. Addicgo NOES: None ABSTAIN: None ABSENT- None ATTEST(.� -�­, sta`14arti-n4li, City Clerk 3 EXHIBIT A. Purchase and Sale Agreement 2629606.1 4 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE.AGREEMENT AND JOINT ESCROW INSTRUCTIONS ("this Agreement") is entered into as of 2016 (die "Effective Date"), by and between the City of South San Francisco, a municipal corporation, ("Seller") and Rotary Plaza, Inc., ("Buyer"). Seller and Buyer are collectively referred to herein as the "Parties." RECITALS A. Seller is owner of certain real property located at 300 Miller Avenue, South San Francisco, California, also known as San Mateo Assessor's Parcel Number 012-311-230, 240, 250 and 260, as more particularly described in Exhibit A attached hereto and incorporated herein (the "Property"). B. Seller has agreed to sell the Property to Buyer, and Buyer has agreed to purchase the Property from the Seller for One Dollar ($1.00)-and to develop certain improvements on the Property. C. Buyer intends to construct, own and operate on the Property a multi-family residential building with eighty-one (81) dwelling units (the "Housing Project"). The Project will consist of thirty-nine (39) units restricted to very-low income households, forty-one (41) units restricted to moderatc-income households, and one (1) managers unit. All units in the Project, except for the managers unit, shall be restricted to senior households. Buyer also intends to construct 1,993 square feet of community space on the property (collectively with the Housing Project, the "Project"). D. On , 2016, Buyer and Seller also entered into that certain development agreement (the "DA"), pursuant to which the Parties have set forth the terms and conditions for development of the Project. E. The Property and the Housing Project are subject to that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement"), dated as of 2016, by and between Buyer and Seller. The performance of Se &s obligation-, under the Regulatory Agreement is secured by a Performance Deed of Trust, Assignment of Rents , Security Agreement and Fixture Filing (the "Deed of Trust"), dated as of ) 2016. F. City Council finds that the economic interests of City's residents and the public health, safety and welfare will be best served by entering into this Agreement and the Development Agreement. G. Buyer agrees to purchase the Property, and Seller agrees to sell the Property to Buyer, subject to the terms and conditions of 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 5 adequacy of which is hereby acknowledged by the parties, Seller and Buyer hereby agree as follows: I 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 One Dollar ($1.00). The Purchase Price shall be paid in cash at the Closing to the Seller. 3. ESCROW. 3.1 Escrow Account. Seller has opened an interest-bearing escrow account (the "Escrow") maintained by First America Title Company(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 Satisfaction of Due Diligence Contingency. Buyer shall have the right to determine the suitability of the Property for Buyer's needs,and may terminate this Agreement for any reason prior to the expiration of the Due Diligence Contingency Period (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 Contingency Period if Buyer disapproves any due diligence items. Upon provision of such notice to Seller, this Agreement shall terminate, and all amounts deposited by Buyer into escrow-together with interest thereon,if any,will be returned to Buyer, and neither party shall have any further rights or obligations hereunder 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. PROPERTY DISCLOSURE,REQUIREMENTS. 4.1 Condition of Title/Preliminary Title Report. Escrow Holder has delivered a Preliminary Title Report for the Property (the "Preliminary Report")to Buyer. Buyer has reviewed the Preliminary Report and approved all of the following exceptions to title, (the "Permitted Exceptions"): (a) standard printed exceptions in the Preliminary Report; (b) general and special real property taxes and assessments constituting a lien not yet due and payable; and (c)the "Permitted Exceptions" listed on Exhibit C attached hereto. 6 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 agrees to make all necessary disclosures required by law. 5. 'CLOSING AND PAYMENT OF PURCHASE PRICE. 5.1 Closinf-,,. The closing(the "Closing" or"Close of Escrow") will occur no later than sixty (60) calendar days after the Effective Date ("Closing Date") or such other date that the Parties agree in writing. 5.2 Buyer's Conditions to Closing. Buyer's obligation to purchase the Property is subject to the satisfaction of all of the following conditions or Buyer's written waiver thereof(in Buyer's sole discretion) on or before the Closing Date: (a) Buyer has approved the condition of the Property. Buyer will have forty-five (45) calendar days from Opening of Escrow (die "Due Diligence Contingency 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 inspections must be coordinated with Seller's representative. Buyer hereby agrees to indemnify and hold Seller harmless for any damage to the Property caused (but not merely revealed) by Buyer's inspections. (b) Seller has entered into an MO:U regarding community meeting space and a flexible policy Implementing its use. Such MOU shall ensure that Seller has reasonable access to the community meeting space. (c) Seller has performed all obligations to be performed by Seller pursuant to this Agreement. (d) Seller's representations and warranties herein are true and correct in all material respects as of the Closing Date. (e) The Title Company is irrevocably committed to issue a CLTA Tide Policy to Buyer, effective as of the Closing Date, insuring tide to Buyer in the full amount of the Purchase Price. (f) Seller has completed a lot merger, or its equivalent. (g) Seller, as current owner of the Property, has issued such relocation notices as may be necessary, appropriate and requested by Buyer. 7 5.3 Seller's Conditions to Closing. The Close of Escrow and Seller's obligation to sell and convey the Property to Buyer are subject to the satisfaction of the following conditions or Seller's written waiver (in Sellers sole discretion) of such conditions on or before the Closing Date. (a) Buyer has executed the DA, the Regulatory Agreement and the Deed of Trust;, (b) Buyer has entered into an MOU regarding community meeting space and a flexible policy implementing its use.-.,Such MOU shall ensure that Seller has reasonable access to the community meeting space. (c) CEQA has been completed for the Project3-. (d) Buyer has performed all obligations to be performed by Buyer pursuant to this Agreement before Closing Date. (c) Buyer's representations and warranties set forth herein are true and correct in all material respects as of the Closing Date. 5.4 Conveyance of Title. Seller will deliver marketable fee simple title to Buyer at the Closing, subject only to the Permitted Exceptions. 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. 5.5 Deliveries at Closing. (a) Deliveries by Seller. Seller shall deposit into the Escrow for delivery to Buyer at Closing: (i) a grant deed, substantially in the form attached hereto as Exhibit B ("Grant Deed"); (ii) an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the "Non-Foreign Affidavit"); (iii) a California Franchise Tax Board form 590 to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131. (b) Deliveries by Buyer. No less than one (1) business day prior to the close of escrow, Buyer shall deposit into escrow immediately available funds in the amount, which-is equal to: (i) the Purchase Price as adjusted by any prorations between the Parties; (ii) the escrow fees and recording fees; and (iii) the cost of the Title Policy. (c) Closin . Upon Closing, Escrow Holder shall: (i) record the Grant Deed; (ii) disburse to Seller the Purchase Price, less Seller's share of any escrow fees, costs and expenses; (iii) deliver to Buyer the Non-Foreign Affidavit, the California Certificate and the original recorded Grant Deed; (iv) pay any commissions and other expenses payable 8 through escrow; and (vi) distribute to itself the payment of escrow fees and expenses required hereunder, (d) 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. (e) Pro-Rations. At the close of escrow, the Escrow Agent shall make the following prorations: (i) property taxes 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 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 Relocation Obligations. Buyer shall be responsible for all relocation costs of existing tenants of the Property. In the event the Closing does not occur by the Closing Date, as such date may be extended by the parties, Seller shall reimburse Buyer for such relocation costs within thrity(30) business days of the termination of this Agreement. Seller shall not be required to reimburse Buyer for relocation costs pursuant to this Section 5.6 in the event that the Closing does not occur due to Buyer's failure to comply with any of its obligations or Closing conditions pursuant to this Agreement, 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. (a) Authority. Seller is a municipal corporation, 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. Seller has good and marketable title to the Property, and 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 will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force. 9 I (c) There are no agreements affecting the Property except those which have been disclosed by Seller. There are no agreements which will be binding on the Buyer or the Property after the Close of Escrow. 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 survive the expiration, termination, or close of escrow of this Agreement and shall not be deemed merged into the deed upon closing. 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 in this Section 6.2 are each true as of the Effective Date, 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. (a) Buyer is a nonprofit corporation, lawfully formed, in existence and in good standing under the laws of the State of California. 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) 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 an covenants of Buyer contained in this Agreement are conditions precedent to Seller's obligation to proceed with the Closing hereunder. 7. DEFAULT, REMEDIES, TERMINATION. Either Party shall be in default of this Agreement ("Default") if such Party fails to keep, observe or perform any of its covenants, duties or obligations under this Agreement, and the default continues for a period of thirty(30) days, unless a different time period is specified herein, after written notice thereof from the non-defaulting Party to the defaulting Party, or in the case of a Default that cannot with due diligence be cured within thirty(30) days or other time specified for herein, the defaulting Party fails to prosecute the curing of such Default with due diligence and in good faith to completion. Either Party shall have the right to terminate this Agreement upon a Default and expiration of any applicable cure period, and in accordance with the terms of this Agreement, in addition to pursuing all remedies available under law or equity. Except as otherwise provided herein, the rights and remedies of the Parties shall be cumulative; provided, however, that neither Party shall have a right to recover consequential or punitive damages. 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. 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 indemnify,hold harmless and defend Seller from any 10 and all claims, actions and liability for any breach of the preceding sentence, and any commission, finder's fee, or similar charges arising out of Buyer's conduct. 9. ASSIGNMENT. Absent an express signed written agreement between the Parties to the contrary, neither Seller nor Buyer may assign its rights or delegate its duties under this Agreement without the express written consent of the other, which consent may be withheld for any reason; provided, however, that Buyer shall be permitted to assign this Agreement to a limited liability company of which Buyer is a member and holds not less than a 49% ownership interest ("Buyer LLC") or a limited partnership of which the Buyer or Buyer LLC is a partner without additional consent. Other than transfers permitted by this section, no 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. 10, ENVIRONMENTAL INDEMNITY. To the fullest extent allowed by law, Buyer agrees to unconditionally and fully indemnify, protect, defend (with counsel satisfactory to Seller), and hold Seller, and its respective elected and appointed officers, officials, employees, agents, consultants and contractors 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 "Costs")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 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, except those Costs that arise solely as a result of actions by Seller. 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. In the event the Seller suffers or incurs any Costs, Buyer shall pay to Seller the total of all such Costs suffered or incurred by the Seller upon demand therefore by Seller. 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) 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 or its predecessors' activities on the Property. The provisions of this Section 10 shall survive the termination of this Agreement and the Close of Escrow. 11. RELEASE BY BUYER. Effective upon the Close of Escrow,Buyer waives releases, remises, acquits and forever discharges Seller, and its officers, directors, board members, 11 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 survive the termination of this Agreement and the Close of Escrow. BUYER ACKNOWLEDGES THAT BUYER IS FAMILIAR WITI I SECTION 1542 OF'rHE. CALIFORNIA CIVIL CODE,WHICI I PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. By INITIALING BELOW,BUYER EXPRESSLY W DIVES 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 12 Amendments and Reauthorization Act of 1986 (42 U.S.C. § 9601), the Hazardous Materials Transportation Act (49 U.S.C. 5 1.801 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 el seq.), the Clean Air Act(42 U.S.C. § 7401 etseq.),the`Toxic Substances Control Act(15 U.S.C. §2601 etseq.),the Oil Pollution Act (33 U.S.C. § 2701 el 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, etseq.), the Safe Drinking Water-and Toxic Enforcement Act of 1986 (Cal. Health &Safety Code § 25249.5 el seq.), the Hazardous Waste Control Act (Cal. Health & Safety Code 5 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.). 13. MISCELLANEOUS. 13.1 Attorneys' pees, 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 this Agreement shall survive Close of Escrow. 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 13 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 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: Rotary Plaza, Inc. c/o Beacon Development Group 6120 Stoneridge Mall Road, Suite 300 Pleasanton, CA 94588 Attn: Ancel Romero To Seller: City of South San Francisco 400 Grand Avenue South San Francisco, CA 94080 Attn: City Manager Fax (650) 829-6609 If to Escrow Holder: First American Title Company I I 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. 14 13.1 0 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 Further Assurances. The Parties 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 SigLiatures/CounteMarts. 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. 13,15 Date and Delivpa 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 par-ties 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. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. 15 SELLER: CI'T'Y OF SOUTH SAN FRANCISCO Icy: Mike Futrell City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: By: Jason Rosenberg City attorney BUYER: ROTARY PLAZA, INC. By: Title: APPROVED AS TO FOR1& By: Counsel for Buyer 16 LIST OF EXHIBITS Exhibit A Legal Description Exhibit B Grant Deed Exhibit C Permitted Exceptions Exhibit D Regulatory Agreement 17 Exhibit A LEGAL DESCRIPTION 18 Exhibit B GRANT DEED 19 Exhibit C PERMITTED EXCEPTIONS 20 Exhibit D REGULATORY AGREEMENT 21