HomeMy WebLinkAboutReso 113-2022 (22-564) DRAFT 7-5-22
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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (“this Agreement”) is entered into as of ______________, 2019 (the
“Effective Date”) by and between the City of South San Francisco, a California charter
city (“City”) and [Rick Arenas and Alejandra Gonzalez, individuals] as the buyers
(together, the “Buyer”). City and Buyer are each referred to as a “Party” and
collectively referred to herein as the “Parties.”
RECITALS
A. City is the owner of certain property located at 109 Longford Drive, City of
South San Francisco known as County Assessor’s Parcel Numbers 010-071-050 (the
“Property”), as more particularly described in Exhibit A attached hereto.
B. The City purchased the Property in 1998.
C. City hired a broker to assist with the sale of the Property.
D. Buyer provided an offer to the City to purchase the property on June 2,
2022.
E. Following discussion with the Buyer, City desires to sell the Property to
Buyer and Buyer desires to purchase the Property in its “as-is” condition for the
purchase price of Eight Hundred Fifty Thousand Dollars ($850,000) (the “Purchase
Price”), 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 adequacy of which is hereby acknowledged by the Parties, City 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, City agrees to sell the Property to Buyer, and Buyer hereby
agrees to acquire the Property from City.
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2.2 Purchase Price. The purchase price to be paid by Buyer to
City for the Property is Eight Hundred Fifty Thousand Dollars and No/100 Cents
($850,000) (the “Purchase Price”).
2.3 Payment of Purchase Price. The Purchase Price will be paid
in immediately available funds to Buyer at Closing (defined in Section 5 below).
3. ESCROW .
3.1 Escrow Account. City has opened an escrow account (the
“Escrow”) maintained by _____________ Title Company as Escrow No. __________,
located at _________________, Attn: _________ (the “Escrow Holder”), with interest,
if any 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 five (5) 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 Opening of Escrow, the Buyer shall
deposit Twenty-Five Thousand Five Hundred Dollars and No/100 Cents ($25,500.00)
into Escrow (the “Deposit”). The Deposit is non-refundable after the Due Diligence
Contingency Period has expired but applicable to the Purchase Price at Closing. In the
event Buyer does not approve Due Diligence on or before the expiration of the Due
Diligence Contingency Period, or does not approve the Financing Contingency (defined
below) Buyer’s deposit shall be immediately returned to Buyer.
4. DUE DILIGENCE AND PROPERTY DISCLOSURE
REQUIREMENTS.
4.1 Condition of Title/Preliminary Title Report. Within fourteen
days of Opening of Escrow, Escrow Holder will deliver a Preliminary Title Report for the
Property (the “Preliminary Report”) to Buyer and City. Buyer will review the
Preliminary Report and approve 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 ;
(c) any exceptions approved in writing by Buyer.
4.2 Due Diligence Contingency Period. Buyer will have ten (10)
days from the Effective Date (the “Due Diligence Contingency Period”) to complete
physical inspections of the Property and due diligence related to the purchase of the
Property. Buyer may extend the Due Diligence Contingency Period by twenty (20) days
upon written notice to City not less than two (2) days prior to the end of the Due
Diligence Contingency Period. City 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 agreements, plans, permits and reports (environmental,
structural, mechanical, engineering and land surveys) that City has in its possession not
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later than five (5) days following the Effective Date. Buyer hereby acknowledges that it
has received that certain Geotechnical Evaluation dated June 24, 2022 from the City
prepared by Ninyo and Moore. All physical inspections must be coordinated with City’s
representative. Buyer hereby agrees to indemnify and hold City harmless for any
damage to the Property caused (but not merely revealed) by Buyer’s inspections.
4.3 Satisfaction of Due Diligence Contingency. Buyer shall have
the right, in its sole discretion, to terminate this Agreement for any reason prior to the
expiration of the Due Diligence Contingency Period and receive a refund of Buyer’s
Deposit. Buyer hereby agrees to provide written notice to City prior to the expiration of
the Due Diligence Contingency Period if Buyer disapproves any due diligence items.
Upon provision of such notice to City, this Agreement will terminate, and all amounts
deposited by Buyer into escrow, together with interest thereon, if any, will be returned to
Buyer, and neither Party will have any further rights or obligations hereunder except
those which expressly survive the termination of this Agreement. If Buyer fails to notify
City in writing of its approval of its due diligence on or before the expiration of the Due
Diligence Contingency Period, it will be conclusively presumed that Buyer has approved
due diligence and will Close on the Property.
4.4 Financing Contingency. Buyer will have fourteen (14) days
from the Effective Date (the “Financing Contingency Period”) to obtain financing for
the purchase of the Property.
4.5 Satisfaction of Financing Contingency. Buyer shall have the
right, in its sole discretion, to terminate this Agreement for any reason prior to the
expiration of the Financing Contingency Period and receive a refund of Buyer’s Deposit.
Buyer hereby agrees to provide written notice to City prior to the expiration of the
Financing Contingency Period if Buyer is unable to obtain financing for the purchase of
the Property. Upon provision of such notice to City, this Agreement will terminate, and
all amounts deposited by Buyer into escrow, together with interest thereon, if any, will
be returned to Buyer, and neither Party will have any further rights or obligations
hereunder except those which expressly survive the termination of this Agreement. If
Buyer fails to notify City in writing removal of the Financing Contingency, it will be
conclusively presumed that Buyer has received financing.
5. CLOSING AND PAYMENT OF PURCHASE PRICE.
5.1 Closing. The closing (the “Closing” or “Close of Escrow”)
will occur no later than thirty (30) days from the expiration of the Due Diligence
Contingency Period and any extended periods (“Closing Date”) and the satisfaction of
all of City’s Conditions to Closing and Buyers Conditions to Closing, 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:
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(a) Buyer has approved the condition of the Property.
(b) City has performed all obligations to be performed by City
pursuant to this Agreement.
(c) City's representations and warranties herein are true and
correct in all material respects as of the Closing Date.
(d) The Title Company is irrevocably committed to issue a CLTA
Title Policy to Buyer, effective as of the Closing Date, insuring title to Buyer in the full
amount of the Purchase Price.
5.3 City’s Conditions to Closing. The Close of Escrow and City's
obligation to sell and convey the Property to Buyer are subject to the satisfaction of the
following conditions or City's written waiver (in City’s sole discretion) of such conditions
on or before the Closing Date:
(a) Buyer has performed all obligations to be performed by
Buyer pursuant to this Agreement before the Closing Date.
(b) 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. City will deliver marketable fee simple
title to Buyer at the Closing, subject only to the Permitted Exceptions. The Property will
be conveyed by City to Buyer in an “as is” condition, with no warranty, express or
implied, by City 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 state and federal law); provided, however, that the
foregoing shall not relieve City from disclosure of any such conditions of which City has
actual knowledge.
5.5 Deposits into Escrow.
(a) Deliveries by City. City shall deposit into the Escrow
for delivery to Buyer at Closing: (i) a 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”); and (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 together with the Deposit plus interest thereon, if any, is
equal to: (i) the Purchase Price as adjusted by any prorations between the Parties;
(ii) all escrow fees and recording fees and Closing Costs (defined below); and (iii) the
cost of the Title Policy.
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(c) Closing. Upon Closing, Escrow Holder shall:
(i) record the grant deed; (ii) disburse to City the Purchase Price; (iii) deliver to Buyer
the Non-Foreign Affidavit, the California Certificate and the original recorded grant deed;
(iv) deliver to Buyer and City signed counterparts of the assignment of Lease; (v) pay
any commissions and other expenses payable through escrow; (vi) distribute to itself
the payment of escrow fees and expenses required hereunder; and deliver the title
policy to the Buyer.
(d) Closing Costs. Each party will pay one-half of escrow
fees and recording fees. Buyer will pay title insurance and title report costs and City will
pay all governmental conveyance fees and all transfer taxes (collectively, the “Closing
Costs”). Buyer and City will pay all Broker Fees, if any.
(e) Pro-Rations. At the Close of Escrow, the Escrow
Holder shall make the following prorations: (i) property taxes will be pro rated as of the
close of escrow, including any property taxes which may be assessed after the close of
escrow but which pertain to the period prior to the transfer of tit le to the Property to
Buyer, regardless of when or to whom notice thereof is delivered; (ii) any bond or
assessment that constitutes a lien on the Property at the close of escrow will be
assumed by Buyer. City does not pay ad valorem property taxes.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1 City’s Representations, Warranties and Covenants. In
addition to the representations, warranties and covenants of City contained in other
sections of this Agreement, City 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 City’s actual knowledge any such statement becomes
untrue prior to Closing, City 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.
a. Authority. City is a municipal corporation, lawfully
formed, in existence and in good standing under the laws of the State of California. City
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 City, and upon delivery to
and execution by Buyer is a valid and binding agreement of City.
b. Encumbrances. City 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. City 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.
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c. There are no agreements affecting the Property
except those which have been disclosed by City. 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 City contained in this Agreement are conditions
precedent to Buyer’s obligation to proceed with the Closing hereunder. The foregoing
representations and warranties shall survive Close of Escrow or the expiration or
termination 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 City 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 City in writing and City shall have at least three (3) business days
thereafter to determine if City wishes to proceed with Closing.
(a) 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 City 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 all covenants of Buyer contained in this Agreement are conditions
precedent to City’s obligation to proceed with the Closing hereunder.
7. REMEDIES In the event of a breach or default under this
Agreement by City, if such breach or default occurs prior to Close of Escrow, Buyer
reserves the right to either (a) seek specific performance from City or (b) to do any of
the following: (i) to waive the breach or default and proceed to close as provided
herein; (ii) to extend the time for performance and the Closing Date until City is able to
perform; or (iii) to terminate this Agreement upon written not ice to City, whereupon City
shall cause Escrow Holder to send Deposit to City and return to Buyer any other sums
placed into the Escrow by Buyer, and except for the rights and obligations expressly
provided to survive termination of this Agreement, neither Party shall have any further
obligations or liabilities hereunder.
IN THE EVENT OF A BREACH OR DEFAULT HEREUNDER BY BUYER AND THE
CLOSING DOES NOT OCCUR DUE TO SUCH DEFAULT, SELLER’S SOLE REMEDY
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SHALL BE TO RETAIN THE DEPOSITS AS LIQUIDATED DAMAGES. THE PARTIES
AGREE THAT IN SUCH INSTANCE, THE DEPOSITS REPRESENT A REASONABLE
APPROXIMATION OF SELLER’S DAMAGES AND ARE NOT INTENDED AS A
FORFEITURE OR PENALTY BUT RATHER AN ENFORCEABLE LIQUIDATED
DAMAGES PROVISION PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671,
ET SEQ. IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO LOST PROFITS
OR CONSEQUENTIAL DAMAGES AS A RESULT OF THE OTHER PARTY’S
BREACH OF THIS AGREEMENT.
__________ _________
Buyer’s Initials Seller’s Initials
8. BROKERS. Buyer represents that it has hired Alexander Lam from
Compass Realty to represent Buyer in the purchase of the Property and City represents
that it has hired Michael Soon from Compass Realty to represent City in the sale of the
Property. Buyer acknowledges that it is solely responsible for payment of brokerage
fees for the purchase and sale of the Property. Buyer shall indemnify, hold harmless
and defend City 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 of
Buyers conduct.
9. ASSIGNMENT. Absent an express signed written agreement
between the Parties to the contrary, neither City nor Buyer may assign its rights or
delegate its duties under this Agreement without the exp ress written consent of the
other, which consent may be withheld for any reason. 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.
10. MISCELLANEOUS.
10.1 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 awa rded. 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 n ot necessarily the party in
whose favor a judgment is rendered.
10.2 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
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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 Party drafting it.
10.3 Survival. All indemnities, covenants, representations and
warranties contained in this Agreement shall survive Close of Escrow.
10.4 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.
10.5 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California.
10.6 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, arran gements 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 understandin gs, 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.
10.7 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.
10.8 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: _________________
_________________
_________________
_________________
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To City: City of South San Francisco
_______________
________________
________________
Attn: City Manager
If to Escrow Holder: ___________________
____________________
____________________
Attn: ______________
Any such communication shall be deemed effective upon personal deliver
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.
10.9 Time. Time is of the essence to the performance of each
and every obligation under this Agreement.
10.10 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 ne xt
business day.
10.11 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.
10.12 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.
10.13 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 a consent to any other
subsequent act or omission or to waive the requirement for consent to be obtained in
any future or other instance.
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10.14 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.
10.15 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.
10.16 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 Agreeme nt 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.
10.17 Confidentiality. The Parties hereto shall not disclose any of
the terms of this Agreement (except to the extent as may be required by law or as
required by the Title Company or to the officers, directors, partners and employees of
the Parties hereto in the ordinary course of business) without the prio r written consent of
the other Party. The Parties shall request that the documentary transfers taxes be
affixed to the Deed after recordation of the Deed as provided in Section 11932 of the
California Revenue and Taxation Code.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, this Agreement is executed t o be effective as of
the date first set forth above.
City: City of South San Francisco
By: ____________________________
City Manager
Attest:
___________________________________
City Clerk
Approved as to Form:
___________________________________
City Attorney
Buyer: Rick Arenas and Alejandra Gonzalez,
husband and wife
By:
Its:
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LIST OF EXHIBITS
Exhibit A Legal Description
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