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HomeMy WebLinkAbout25C - AGMT - SALE 2129 N MAIN STHAMPTON INN PROPERTY REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MAY 2, 2017 TITLE: PURCHASE AND SALE AGREEMENT WITH NET DEVELOPMENT CO. FOR THE SALE OF CITY -OWNED REAL PROPERTY AT 2129 NORTH MAIN STREET (STRATEGIC PLAN NO. 3,3C) r X CITYCMANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: F-11=2602191 ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute a purchase and sale agreement with Net Development Co., for the sale of City -owned property located at 2129 North Main Street in the amount of $2,075,000, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION On September 20, 2016, the City Council authorized the negotiation for the sale of City -owned real property at 2129 North Main Street and entered into an exclusive negotiation agreement (ENA) with Net Development Co. for the purpose of developing a hotel on the property. Santa Ana Municipal Code (SAMC) Section 2 -709 allows for the direct negotiation and sale of City - owned property without the need for a public auction or competitive bidding, upon a 2/3 vote of the City Council. The ENA required obligations of the developer to be satisfied before the City moves forward with selling the property for development of the hotel. These obligations were: a) A complete development application with payment of fees (Completed and currently being reviewed by Planning) b) Proposed zoning changes (Not applicable) c) A good faith deposit of $90,000. These funds will be moved to escrow during the sale process. (Completed and held in a City account) d) A written commitment from a recognized hotel chain (Completed) e) Proposed financing plan (All private funding) f) A preliminary financial analysis (Completed) Proposed Conceptual hotel renderings are attached as Exhibit 1. 25C -1 Purchase and Sale Agreement — 2129 North Main Street May 2, 2017 Page 2 The next step in the process is to enter into a Purchase and Sale Agreement with Net Development Co. (Exhibit 2) to develop the hotel. The appraised value for the parcel is $2,075,000 which Net Development Co. has agreed to. The purchase and sale agreement has been drafted to ensure a high quality hotel is developed in a timely manner. Tourism remains an important industry sector that Santa Ana needs to continue to invest resources into. The proposed hotel's proximity to the 1 -5 freeway, the Bowers Museum, MainPlace Mall, and the Discovery Science Cube make it a premium location to enhance the future growth of these city amenities and the tourism industry in Santa Ana. The development of a hotel at this location will also add a public benefit through the increase of Hotel Visitor Taxes (HVT). This increase will help fund local services such as infrastructure improvements, new public parks, environmental preservation, and increases in public safety for residents of Santa Ana. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 Economic Development, Objective #5, (Leverage private investment that results in tax base expansion and job creation citywide), Strategy A (Identify and market underutilized properties [city and non -city owned] for new development that will create new jobs and expand the City's tax base). FISCAL IMPACT The purchase price of the City -owned property located at 2129 North Main Street is $2,075,000. Pursuant to the Execution of the Purchase and Sales Agreement, Net Development Co. will pay the City a total amount of $1,985,000 which will be deposited into account no. 01102002- 57071. In addition, the "good faith" deposit amount of $90,000 currently in account no. 01101001 -21671 which Net Development Co. paid to the City when the Exclusive Negotiation Agreement (ENA) was executed, will be reclassified and recorded into account no. 01102002 - 57071. The Sale and Purchase of said property will be completed and funds will be reclassified and recorded upon the close of the extended escrow which requires all entitlements to be completed and the date which the Grant Deed conveying title to the Property to Net Development is recorded. This project will require an Environmental Review process which may take up to 18 months. Therefore Net Development anticipates the extended escrow to close no later than fiscal year 2018/19. 25C -2 Purchase and Sale Agreement — 2129 North Main Street May 2, 2017 Page 3 Transactions Amount Account No. Reclassified From Account No. Recorded To Fiscal Year Reclassified and Recorded Purchase and Sales $1,985,000 N/A 01102002 -57071 2018 -19 Good Faith Deposit $ 90,000 01101001 -21671 01102002 -57071 2018 -19 TOTAL: $2,075,000 'tea Hassan Hagha i, Al Executive Director Planning and Building Agency HH:MM:rb WReports \Purchase Agmt Net Devel 2129 N Main APPROVED AS TO FUNDS AND ACCOUNT: ft/ Francisco Gutierrez eG Executive Director Finance and Management Services Agency Exhibits: 1. Proposed Conceptual Hotel Renderings 2. Purchase and Sale Agreement 25C -3 25C -4 zcLLJ Z< CE �VVV z < l J U w F-- z w r Q 04� �c z Q N a C'` W PYYi YPY' 4.a L: LrL L•WWWL j4 W4 b4 .d .1 . P F F F F T EXHIBIT 1 25C -5 Gaosoxe O OAH R� 6 {x (si a 9a s g4 ktx2 g( #s�x �Q{Q n n v tl5lsi9 S IPA S� FFp i1's 4 �3s,ar g �x� fgd� gg6° it 9sx� F AH Fie &{ v d pE kh F$6359 E5 Y1 3�9d' xa F5 �6� d ; E qq p6 g s � ! N 3 aYa a s3 3 i" `!e 4g PF ptl ai fls Is :aia c il pppp 9 � s � Ad q�s d p5A fly gg. Y9.3ie 9 5 �� ?# ? �1 is 555.:tPd xF Piipg4F liE° ; g E,jsl3xs; ;u's li ' ;4 x , Iq�i� iiE gip[ fi 5j3 F1 po is l 1px ° � S , s3je �phpi � h S ii fi ?j? ! t e ! 5s!! il tl i[P9i lIINN i f ( {s S x vF d� t " xs➢ f s a a6 i g yy ppt � 4� A3 St {ag gg� Si 9 5 !a ? E a Itx s "s 5 @d Y ! �1M�Ij 5 da�,i1jle�! Af '3;�ii1�� 5as: 5 xFiS iii °iA Yi i`8i.4 ; 7i7 i[P9i �'� y[ it q lfil lil!{{ yyilFl S3 25 Ip �,. 5Ayi5 8 Cis d f 3 1 B xAs Y : F �i 11p 51 ef.9ylli i ti3 I� is ti�s`" yy 1ja py�tPs ¢iiP Ch9lpryry �ai 9 � 9 �q 1 53 { allx ;�t � [� yq fi( sf 7iigi tlxfFjx� Al( u i j(s� sllti FI EniE 1� �i;i 4 i' 25C -6 e4 n 5F9 \ § §�/ log 13RAiS NIVN 25C-7 IIIs, I I I FIRSHFIE EfFEU9ED ARM m 01 1 M 13RAiS NIVN 25C-7 IIIs, I I I FIRSHFIE EfFEU9ED ARM m 25C-8 O pJ �t ,0 n ?R 25C-9 i - -a) 'n 25C -10 SALE AGREEMENT AND ESCROW INSTRUCTIONS This Sale Agreement and Escrow Instructions ("Agreement ") is entered into on May 2, 2017 ( "Effective Date") by THE CITY OF SANTA ANA, a California charter city and municipal corporation { "Seller "), and NET DEVELOPMENT CO., INC., a California corporation ( "Buyer "), Buyer and Seller are hereinafter individually referred to as a "Party" and collectively as the "Parties." RC:CITALS A. Seller is the owner of real property in the City of Santa Ana ( "City "), County of Orange ( "County ") State of California, located at 2129 N. Main Street (APNs 003 - 11.3 - 80 & 003 - 113 -81) and described and /or depicted in Exhibit "A" ( "Property "). Seller and Buyer have entered into an Exclusive Negotiate Agreement dated September 20, 2016 concerning the Property (the "ENA "). B. Seller desires to sell the Property to Buyer, and Buyer desires to purchase the Property from Seller in accordance with the provisions of this Agreement at fair market value for the development of a hotel project consisting of a I- lampton Inn, or equivalent, or higher rated hotel and an associated digital freeway billboard sign limited to advertising of occupants of the Property sand community services within the City at the request of the City, subject to City approval tinder proper permits (the "Project "). THEREFORE, Seller and Buyer agree as follows: Purchase and Sale; Purchase Price. 1.1 Purchase and Stele. Seller shall sell the Property to Buyer and Buyer shall purchase the Property from Seller subject to the teens and conditions set forth in this Agreement. 1.2 Purchase Price. The purchase price ofthe Property is TWO MILLION SEVENTY -FIVE THOUSAND DOLLARS ($2,075,000.00), which amount was established as the fain market value pursuant to an appraisal procured by Seller. 2. Escrow. 2.1 Escrow Instructions. Within seven (7) days following the execution of this Agreement by the Parties, the Parties will open an escrow ("Escrow ") with Fidelity National Title Insurance Company, 1300 Dove Street, Suite 310, Newport Beach, CA Attu: April Palmer ( "Escrow Holder ") for the purchase and sale of the Property. The "Opening of Escrow" shall mean the date on which a hilly executed copy of this Agreement has been delivered to Escrow holder. Escrow Holder shall confirm the Opening of Escrow to the Patties in writing. This Agreement constitutes joint escrow instructions to Escrow Bolder. The Parties agree to execute such additional instructions consistent with the provisions of this Agneetnent which may be required by Escrow Holder. As between the Parties, Buyer and Seller agree that, if there is any conflict between the terms of this Agreement: and any Escrow instructions required by Escrow EXHIBIT 2 25C -11 Holder, the terans of this Agreement shall control. Buyer and Seller shall each furnish Escrow Holder with their respective Federal Tax Identification Numbers and such other information as is reasonably required by Escrow Holder. 2.2 Payment of Purchase Price. The Purchase Price for the Property shall be payable as follows: 2.2.1 Deposic Buyer has made an Initial Deposit (as defined in the ENA) of NINETY THOUSAND DOLLARS ($90,000:00) pursuant to tine ENA. Within ten (10) business days following the execution of this Agreement by the Parties, Seller shall deliver to Escrow Holder, by wire transfer or other immediately available funds the remainder of such amount after debiting such amount pursuant to the ENA: 'The balance shall be referred to herein as the "Deposit", The Deposit shall be placed by Escrow Holder in an interest beating account with interest accruing for the benefit of Buyer. 2.12 Feasibility Consideration. Notwithstanding any other provision of this Agreement to the contrary, One Hundred Dollars ($100) of the Deposit ("Retained Amount ") shall, Moon delivery to Escrow Holder, be non- refundable to Buyer for any reason other than a default under this Agreement by the Seller. The Retained Amount is consideration to Seller for holing the Property off the market doming the Feasibility Period aiad granting Buyer the right to acquire the Property in accordance with this Agreement, if Buyer approves the Property diuing the Feasibility Period. The Retained Aniount shall be released to Seller upon the opening of Escrow. Notwithstanding anything to the contrary in this Agreement, any provision of this Agreement entitling Buyer to a refund of the Deposit shall not include the Detained Amount, except in the event of a default by Seller, 2.23 Payment at Closing. If Seller has deposited into Escrow all documents and arnouuts required of Seller to close Escrow, including without limitation, the "Grant Deed " (as defined below) and complied with all of Seller's other obligations under this Agreeaiient, then on or before the "Closing Dante" (as defined below) so as not to delay the "Close of Escrow'° (as defined below), Buyer shall deposit into Escrow the following in Acceptable Funds: (a) the balance of the Purchase Price (Purchase Price less the Deposit and any other credits to Buyer tinder this Agreement) and (b) the Escrow closing costs pursuant to the preliminary Escrow closing staternnent furnished by Escrow Holder as provided below. 2.3 Close of Escrow. Subject to Sections 23,1 and 2,3,2; Escrow for the sale of the Property shall close on the date ( "Closing Date ") which is thirty (30) days after Buyer provides Seller with written notice that Buyer has submitted applications for and obtained approval from all applicable governmental authorities of the following: a general plan amendment; zone change; environmental; building permits; site plan approvals; streets, alleyways and rights of way vacations; and all other entitlements and/or discretionary approvals of any ]rind necessary to develop the Property for the Project (the "Entitlements"), and that all applicable appeal and challenge periods with respect to the Entitlements have expired with no appeal or challenge having been filed, or if filed any such appeal or challenge shall have been finally resolved in favor of the original approval of the Entitlements. Buyer shall obtain said Entitlements within twenty -four (29) months of the Effective Date of this Agreement. Any request for tun extension of this timeframe must go to the Santa Ana City Council for 2_ 25C -12 consideration. As used in this Agreement, "Close of Escrow" shalt mcan the date on which the "Gratrt Deed" (as defined below) conveying title to the Property to Buyer is recorded. 23.1 Conditions Precedent to Buyer Obligation to Close. Buyer's obligation to close Escrow and purchase the Property is expressly conditioned on the satisfaction of the conditions listed in this Section 2.3.1. If any such condition is not satisfied or waived by Buyer at or prior to the Close of Escrow, for any reason other than a default by Buyer, Buyer Wray, in its sole discretion and without limiting any of Buyer's legal remedies or remedies under this Agreement, terminate this Agreement by written notice to Seller, in which case the Deposit shall be immediately refunded to Buyer. (1) Title Policy, Escrow Holder has issued or committed to issue Buyer the ""Title Policy" (as defined below) showing title vested in Buyer subject only to "Permitted Exceptions" (as defined below). (2) Representations and Warranties. Each of Seller's representations and warranties in this Agreement are materially true and accurate as of the Close of Escrow. (3) Seller Obligations. Seller is not material default under this Agreement and each material obligation of Seller to be performed prior to the Close of Escrow, has been performed as required, including, without limitation the delivery of all document's required of Seller under this Agreement, (4) Possession. Seller is able, at the Close of Escrow to deliver possession of the Property to Buyer in accordance with this Agreement and does so. (`a) Moratoria, There shall be no action taken by any city, county or other public authority or agency ("Governmental Authority ") or any vote of the citizens of the local jurisdiction (;including without limitation any moratoria) that would preclude, prevent, or delay Buyer from obtaining building permits, sewer permits, water Permits, certificates of occupancy or other development or occupancy entitlements for the Project to he constructed on the Property ( "Public Development Limitation"); provided that the Buyer's inability to obtain approval of the hntitlements for reasons other than the occurrence of a. Public Development Limitation" shall not be viewed as a failure of this condition. (G) Legal Subdivision. The Property shall be a legal parcel or parcels under the California Subdivision Map Act that can be transferred by Seller to Buyer. (7�) Entitlements. The Entitlements have been obtained. 23.2 Conditions Precedent to Seiler Obligation to Close. Seller's obligation to close Escrow and sell the Property is expressly conditioned upon the satisfaction of the conditions listed below. if ally such condition is not satisfied or waived by Seller prior to the Close of Escrow for any reason other than a default by Seiler, Seller may, in its sole discretion and without limiting any of Seller's legal remedies or remedies under this Agreement, terminate this Agreement by written notice to Buyer. 25C -13 (l) Representations and Warranties. Each of Buyer's representations and warranties set forth in this Agreement are materially trite and accurate as of the Close of Escrow. (2) Buyer's Obligations. Buyer is not in materiall default under this Agreement, and each material obligation of Buyer to be performed prior to the Close Of Escrow hereunder has been performed as required. (3) The Project and the development of the Property must conform to all City, and other applicable governmental development, land use and architectural regulations and standards. Drawings, plans and specifications for the Project shall be subject to the approval of the City through the standard development application process for acquiring the real estate and entitlements within the Project. Nothing in this Agreement shall be considered approval of any plans or specifications for the Project or of the Project itself by'the City. 2.4 Escrow Cancellation. 2.4.1 Charges. ('1) Seller's Default. if Escrow fails to close clue to Seller's default and this Agreement is terminated, Seller shall pay all Escrow cancellation changes. "Escrow cancellation charges" rueans all fees, charges and expenses charged or passed on to the Parties by Escrow Holder, including all title expenses. (2) Buyer's Default. If Escrow fails to close care to Buyer's default and this .Agreement is terminated, Buyer shall pay all Escrow cancellation charges, (3) No Default, If Escrow fails to close and this Agreement is terminated for any reason tither than a default by one of the Parties, Buyer shrill pay any Escrow cancellation charges. The foregoing shall not be deemed a limitation of remedies or limit any remedies available to either Party. 2,4.2 Deposit. If Escrow fails to Close and this Agreement is terminated due to Seller's default or arty reason other than a default by Buyer, the Deposit shall immediately be returned to Buyer; provided, however, than the foregoing shall not constitute an exclusive remedy of Buyer, If Escrow fails to close due to 'Buyer's default and this Agreement is terminated, Seller shall retain the ,Deposit pursuant to Section 6 below. 2,5 Permitted Exceptions to Title. As soon as reasonably possible after the Opening of Escrow, Escrow Holder shall cause Fidelity National Title Insurance Company, in its capacity as title Insurer ("Title Company "), to deliver to Buyer and Seller a current preliminary title report ( "Title Report ") together with legible copies of all underlying documents referenced therein (together with the Title Report, the "Title Documents"), The term "Permitted Exceptions" as used in this Agreement shall mean all of the following: (a) the Grant )Iced, including a restriction that the Property be used and developed as the Project, as deernod _4_ 25C -14 permissible by the C "ity" (b) non-delinquent real property taxes and assessments: (c) items and exceptions created by or with the written consent of Buyer, including documents to be recorded pursuant to this Agreement and (d) the title exceptions shown on the Title Report but excluding any (i) "Disapproved Exceptions" as defined below that Seller, in its sole discretion, agrees to remove prior to the Close of Escrow as provided 'below and (ii) all monetary liens and monetary encumbrances on the Property, other than non - delinquent real property taxes and assessments which will be removed (meaning removal from title and not the issuance of all endorsement in connection therewith by the Title Company) from title by Seller at its sole cost and expense prior to the Close of Escrow, If Buyer objects to any material title exceptions ( "Disapproved Exceptions ") Buyer shall deliver written notice ("Objection Notice "') of same to Seller within ten (10) business Clays of delivery ofthe initial Title Report to Buyer. Both parties shall act in good faith and reasonably to resolve any material title exception issues, if Buyer fails to deliver an Objection Notice but delivers a "Notice of Approval" Buyer shall be deemed to have approved tittle to the Property subject to the Permitted Exceptions If Buyer delivers an Objection Notice regarding a material title exception and Seller, by delivery of written notice to Buyer within live (5) business days following receipt of the Objection Notice elects not to remove a material Disapproved Exception (Seller's failure to respond to a Buyer Objection Notice shall be deemed such an election) Buyer's sole remedies shall be with respect to the delivery of a 'Notice of Approval or delivery or deemed delivery of a Notice of Termination and refund of all of the Deposit delivered into Escrow and all interest accrued thereon. 2.6 Title insurance. Seller shill cause the 'Title Company to commit to issue to Buyer at the Close of Escrow a standard coverage ALTA Owner's policy of title insurance with mechanics lien endorsement (Seller shall provide, any indemnity or other agreement required by the Title Company as a condition to the issuance of the mechanics lien endorsement) (` ° "Citle Policy ") insuring fee title to the Property vested in Buyer subject only to the Permitted Exceptions, with coverage in an amount equal to the Purchase Price. if Buyer requires an extended coverage ALTA Owners policy of title insurance Buyer shall pay the difference in cost between the standard and extended coverage and the cost of any endorsements (other than a mechanics lien endorsement issued in connection with the standard coverage Title Policy which shall be at the cost of Seller) (`Buyer Title Costs "'), Seller shall only be responsible for that portion of the cost of the Title Policy equal to the cost of standard coverage title policy ( "Seller Title Costs "). 17 Posscssion. Seller shall deliver possession of the Property to Buyer at the Close of Escrow subject only to the Permitted Exceptions and free of any tenancies and/or third Party claims of use or ownership, 2,8 Taxes, Assessments and Pro rations. 18,1 Taxes. All current general and special taxes auxl assessments on the Properly shall be prorated by Escrow Holder based upon the latest available information as shown in the tax statements provided to Escrow Holder by Seller, using customary escrow procedures it Orange County. Seller shall provide Buyer with written evidence of the payment or satisfaction of such taxes. Should the Property be part of a larger tax parcel ( "Assessment Parcel") which as of the Close of Escrow remains unsegregated on the County Tax Assessor's Roll for the ensuing fiscal year, Escrow Holder shall charge Buyer and credit Seller for taxes and -5.. 25C -15 assessments allocated to the Property (based on unimproved value) based on the percentage of the total acreage of the Assessment Parcel located on the Property; which acreage figures for allocation purposes shall be fairly and equitably determined and supplied to Escrow Holder by Buyer and Seller. Buyer and Seller shall cooperate in good faith to cause the Property to be separately assessed and segregated in Buyer's name oil the current 'tax roll. Any real property taxes or assessments levied tinder the Supplemental Tax Roll as a result of the sale of the Property to Buyer, shall be the responsibility of Buyer. Any real property taxes or assessments levied under the Supplemental Tax Roll as a result of transfers. improvements or other occurrences before the Close of Escrow shall be the responsibility of Seller. 2.8.2 General. All pro rations provided for herein shall be on am "actual day" 'basis and a three hundred sixty -five (365) day year. The provisions of this Section shall survive dose of Escrow, If either Party fails to pay its pro rata share of taxes or other expenses by the times herein provided, interest shall aaccrue on all unpaid amounts from when awing until paid at the maximum rate allowed by Law. Any errors or omissions made in calculating adjustments and prorations shall be corrected promptly upon, the discovery thereof. If any estimations are made at the Close or Escrow regarding adjustments or proration, the Parties shall snake the appropriate eoincedOrl promptly when accurate information becomes available. Any corrected adjustment or proration shall be paid to the Party entitled thereto within thirty (10) days after written request therefor and if not so paid interest shall accrue and be payable on satire at the nnaxhmmrr rate allowed by Law. 19 Closing Costs, Buyer shall pay the cost of the Title Policy, the Escrow Pees and all documentary transfer fees and recording fees, as may be applicable; and all other costs and expenses incurred related to the purchase of the Property by Buyer. If applicable, Buyer shall also pay for the appraisal cost of the Property (collectively, "Closing Costs "), As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver a copy of the Final Escrow closing statement to .Buyer and Seller. 2.10 Recordation and Delivery of Docuanents. No later than 12:00 p.m. on the business day immediately prior to the Closing Date, Buyer and Seller" as applicable, will deposit into Escrow the following documents (with the documents that are to be recorded in tine following order and delivered as provided below): 110.1 Grant Deed. One (1) fully executed and acknowledged copy of the grant deed on Title Company's standard forth conveying the Property to Buyer ("Grant Deed "), The Errant Deed shall contain a restriction that the Property be restricted to the operation and development of the Project, as deemed permissible by the City. Conformed copies of the recorded Grant Deed shall be returned to Buyer and Seller as soon as possible. 2.70.2 Withholding Exemption Certificates. One (1) completed and executed copy of the following: Morn- forcign Transferor Declaration; Preliminary Change in Ownership Report, Internal Revenue Service Form 1099 -5, and California Franchise Tax Board 1`01111593 and any other applicable state tax withholding forms, as applicable. As soon as reasonably possible following the Close of Escrow, Escrow Holder shall deliver copies of all closing docurrients, including, without limitation, those listed above, the _6. 25C -16 Title Policy, any additional escrow instructions and the final Escrow closing statement, to Seller's counsel and Buyer's counsel. 2.11 Seller's Procceds. At the Close of Escrow, subject to Section 2.13 below, Escrow Holder is directed to wire funds representing Seller's cash proceeds through Escrow to Seller's account as directed in separate written instructions to be provided by Seller. 2.12 Cal- FIRPTA Withholding. Unless this transaction is exempt under California Revenue and Taxation Code Sections 18805 and 26131, Escrow Holder shall be the "withholding agent" and withhold from proceeds due Seller any amounts required under the above code sections to be withheld by Buyer and pay same to the California Franchise Tax Board or Internal Revenue Service in accordance with applicable law. 2.13 Additional Documents. Seller and Buyer shrill execute and deliver to Escrow any other documents reasonably required by Escrow Holder including, without liMitation, Seller's affidavits or statements regarding mechanics liens and/or tenants or parties in possession. 2.14 Termination of Property Contracts. Seller shall terminate any service contracts or similar agreement relating to the Property which the Buyer does not elect in writing to assume which termination shall be effective us of the Close of Escrow. 3, Real Estate Brokerage Commission. Buyer and Seller each represent and warrant to each other that they have not ennployed, dealt witli or incurred any obligation to any broker, agent or finder in connection with the Property, and that they have not incurred any obligation to pay any other real estate brokerage or other commission or fee in connection with the conveyance of the Property to Buyer. Buyer and Seller agree to indemnify, defend and hold each other ;free and harmless from and against all costs and liabilities, including without limitation reasonable attorneys' 'foes and the costs and expenses of litigation, for causes of action or proceedings in any way related to or resulting from a breach of the foregoing representation and warranty or wising out of any action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party, respectively, in connection with this transaction_ 4, investigation by Buyer. 4.1 Feasibility, Within five (5) business days following the execution of this Agreement by Buyer and Seller, Seller shall deliver to Buyer collies of all maps, permits, applications, contracts, correspondence, studies, reports, appraisals and all other documents, materials or information of any kind that relate to the Property, whether in the possession of Seller or any agent or consultant of Staler (collectively, the "Property documents"). Seller will immediately furnish Buyer with copies of any revisions or supplements to the Property Documents and will immediately (furnish Escrow Holder and Buyer with copies of any revisions or supplements to the Property Documents. Seller shall deliver original versions of the Property Documents (to the extent available) to Buyer at the Close of Escrow. 4.2 License. Seller ]Hereby grants to Buyer and its agents a nonexclusive license to enter the Property during the term of the Escrow for the purpose of conducting _7_ 25C -17 feasibility studies, environmental studies and other physical examinations of the Property; provided that Buyer shall not be entitled to interfere with the activities of Seller with respect to the Property. Prior to any such entry by Buyer on the Property, Buyer shall deliver a certificate of insurance to Seller indicating that Buyer maintains general liability insurance coverage in the amount of not less than ONE MILLION DOLLARS (:61,000,.000) with Seller reflected as an additional insured. Buyer shall comply with all applicable laws and govertunental regulations in performing activities on the Property. Buyer shall indemnify, defend and hold Seller and the Property tree and harmless from all loss, damage or liability (including without limitation reasonable attorneys' fees and costs of litigation) arising from the negligence or willful misconduct of Buyer, its agents and employees, on the Property, and from all mechanics', nnaterialmeni's and other liens resulting frown any such conduct; provided that the foregoing indemnity shall not apply to any loss, damage or liability (a) to the extent caused by the negligence or willful misconduct of Seller or its agents or representatives or (b) caused solely by the discovery by Buyer of a condition or substance (but not Buyer's deposit of same on the Property) including without limitation dinninution in value of the Property. Additional Agreements. 5.1 Buyer's Investigation. Buyer shall be entitled to conduct such independent investigations as Buyer deems n:ccessttly or appropriate concerning (n) Buyer's proposed use, sale, development or suitability for development of the Property; (ii) the condition and all other attributes of the Property, including, without limitation 91I improvements located thercon, (iii) applicable laws, statutes, rules, regulations, ordinances, limitations, restrictions or requirements concerning the use, density, location or suitability of the Property or any existing or Proposed development or condition thereof, including but not linnited to zoning, subdivision and other regulations (collectively; the "Regulations"); (iv) the necessity or availability of any specific plan or general aunen?dments, rezoning, zone variances, conditional use permits, building permits, environmental impact reports, subdivision maps, public reports issued by the California. Bureau of Real Estate (" BRE ") and all other governmental permits, approvals or acts (collectively, the "Permits "); (v) the necessity and existence of all dedications, fees, charges, costs or assessments which may be imposed by any Governmental Authority in cormection with the proposed development of the Property; (vi) the value of the Property; (vii) the availability or adequacy of access to the Property, or of water, sewage, gas, electrical or other utilities serving. the Property and (viii) the presence or (adequacy of infrastructure or other improvements on, near or concerning the Property. 5.2 Warranties. 5.2.1 Seller's Warranties. In consideration of Buyer entering into this Agreement and as an inducement txi Buyer to purchase the Property from Seller, Seller nnaltes'the following representations and warranties wlrch shall be true and correct as of the Effective Date and the Close of Escrow and each of which is material and being relied upon by Buyer. For all purposes of this Agreement, including Seller's representations and warranties contained in this Section 52.1, the phrase "to the hest of Seller's knowledge" shall mean the current actual knowledge of Seller. if prior to the Close of Escrow Buyer determines that any representation or warranty of Seller is untrue, inaccurate or incomplete in any material respect (and without waiving any of Buyer's rights or remedies' hereunder at law or in equity with respect to any _g_ 25C -18 material untruth, incompleteness or inaccuracy existing on the Effective hate, that was known of or should have been !mown of by Seller), Buyer may give Seller written notice of same and Seller shall have seven (7) clays from the date of receipt of Buyer's notice (,,fact the Closing Date shall be extended to permit the running of such seven (7) day period) ( "Seller Clare Perio(") to correct any fact or circumstance that makes such representation or warranty materially untrue or inaccurate to Buyer's reasonable satisfaction. If Seller foils to matte such correction within the Seller Cure Period, then Buyer by written notice to Seller within three (3) clays after the expiration of the Seller Cure Period (and the Closing Date shall be extended to permit the running of such three (3) day ,period) shall be emitled (a) to terminate this Agreement and obtain a full refund of the Deposit or (b) continue this Agreement in fill force and effect with no change in terms, but without waiving any legal, equitable or other remedies it may have against Seller. The foregoing is not a waiver or release of any of Buyer's tights or remedies for any material untruth, incompleteness or inaccuracy in a representation or warranty of Seller of which Buyer obtains knowledge after the Close of Escrow, ('1) Authorization. Seller has full power and authority to enter into this Agreement and to perform all its obligations hereunder, and has taken 4111 action required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement by Seller. Each individual or entity who has executed this Agreement on behalf of Seller has the right, power, legal capacity and authority to execute, deliver and per°forni this Agrecinent on behalf of Seller. (2) Conflicting Agreements. Neither the execution or delivery of this Agreement, nor the consummation of the transaction contemplated herein, will conflict with, or result in a breach of, any contract, license or undertaking to which Seller is a party or by which Seller or any of the Property is bound, or constitute a default thereunder. In addition, with respect to any agreements which affect the Property, neither Seller nor any other party or parties to such agreements are in default thereunder nor are there any facts that currently exist which with the passage of time wound result in any such default. To the best of Seller's knowledge, the Property is not subject to any prescriptive easements, claims of adverse possession, encroachments or similar rights or claims, In addition, except as otherwise disclosed in this Agreement, the Property is not subject to any leases, options or other similar rights or claims in favor of any third parties, The Property is not subject to a Williamson Act contract or any similar agricultural agreement. (3) Proceedings, To the best of Seller's knowledge, nO legal or administrative proceeding is pending or threatened against Seller or the Property nor are there any Other facts or circumstances which would adversely affect (i) Seller's right to convey title to the Property to Buyer as contemplated in this Agreement or (ii) Buyer's ability to own, develop and /or market die Property in the manner disclosed by Buyer to Seller. To the best of Seller's knowledge, there are no condemnation or ernincnt domain proceedings pending or threatened with respect to the Property, (4) Binding Agreonaent. This Agreement constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, _9_ 25C -19 insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. (S) Violations of Law. On the Effective Date and Close of Escrow neither this Agreement nor the Properly shall be in violation of any law, ordinance, ruse regulation, or administrative or judicial order, (6) Hazardous Materials. Seller has not stored or released, caused to be stored or released or approved the storage or release on the Property; of any " hazardous materials" (as defined below). '1'o the best of Sel'ler's knowledge, no prior owner of the Property has stored or caused to be stored any hazardous materials on the Property, (b) no hazardous materials now exist in, an or under the Property in violation of any "environmental law" (as defined below), (c) there are no underground tanks on the Property nor have there ever been any underground storage tanks on the Property, (d) no use of or operations ou the Property have occurred which use or operation has violated any applicable envirounnental law; and (e) the Property is not on any "Superfund" list under any applicable environ nncatal law. As used herein, "environmental law" shall mean any and all present federal, state or local laws (whether common law, statute, rule, regulation or otherwise), permits, orders and any rather requirements of Govermnental Authorities relating to the environment to any "hazardous materials" (as defined below) (including without limitation the Comprehensive Ftnviromnental Response, Compensation and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) as amended from time to time and the applicable provisions of the California Health and Safety Code and California Water Code). As used herein, "hazardous materials„ shall tinean any (a) chemical, compound, material, mixture or substance that is now de-fined or listed in, of otherwise classified pursuant to any environmental law as a "hazardous substance;" "hazardous material," "hazardous waste," "extremely hazardous waste," "infections waste,,, "toxic waste," "toxic pollutant" or any other formulation intended to define, list or classify snbstarnces by reason of deleterious properties or effect and (b) petroleum, petroleum by- products, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas in such synthetic gas), ash, municipal solid waste steam, drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal resources. (7) Assumed Obligations. With the exception of obligations or responsibilities of Seller that are expressly assumed by Buyer in this Agreement, there are no obligations or responsibilities of Seller with respect to the Property or otherwise of any kind that are assumed by Buyer. (S) Endangered Species. To the best of Seder's knowledge, (a) 'there are no endangered or threatened species of animals, plants or insects on the Property and (b) there are no environmental or biological characteristics of the Property or adjacent property which eider existing law will adversely affect Buyer's ability to own, develop and /or market the Property or the cost thereof. (9) Ownership of Property- Seller is the sole and only party that owns or holds any interest in the Property. -10- 25C-20 (10) Property /Documents. To the best of Seller's knowledge, the Property Documents and all other documents and information provided by Seller or its agents or consultants to Buyer are complete, true and accurate kind do not omit any material fact and there are no other documents, materials, studies, surveys or other information in the possession or control of Seller that would have a material and adverse effect on Buyer's ability to own, develop and/or market the Property, (1 l) (Other Agreements. Except as set forth in the Property Documents and this .Agreement, Seller has not made any commitment or representation to or entered into any agreement of any kind with any government authority, or any adjoining or surrounding property owner, group or other third party, which would in any way be binding on. Buyer or all or any portion of the Property or would interfere in any way with Buyer's ability to own, develop, improve and /or market the Property, and will not make any such representations or warranties or enter into any such agreements Which would affect the Property or any portion thereof prior to the Close of }..screw, without Buyer's written consent. (12) Access. '['here is :full and unobstructed direct access to the Property from public streets, highways or roads which are adjacent to the Property. (13) Bankruptcy. No "Bankruptcy Event" (as defined below) has occurred with respect to Seller nor any member or manager of Seller. There is not pending or threatened any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or re- composition of Seller or any member or manager of Seller or seeking appointment of a receiver, trustee, custodian or similar official for Seller or any member or manager of Seller for all or any substantial part of its or their assets, "Bankruptcy Event" nneans (a) the making by a person of a general assignnnent for the benefit of such person's creditors, (b) the admission in writing by a person of its inability to pay its or their debts as they mature, (c) an attachwnetxt, execution or other judicial seizure of any property interest which remains in effect, or (d) the failure to have taken or submission to tiny action indicating a general inability by a person to meet its financial obligations as they accrue. (14) Material Change, Seller shall promptly notify Buyer if Seller obtains information that would .make any of the representations or warranties contained in this Section 5.2.1 materially inaccurate or misleading. 5.2.2 Buyer's Warranties. In consideration of Seller entering into this Agreement and as an inducement to Seller to sell the Property to .Buyer, Buyer makes the following representations and warranties which shall be true and correct as of the Effective Date and the Close of Escrow and each of which is material and being relied upon by Seller. For all purposes of this Agreement, including Buyer's representations and warranties contained in this Section 5.2.2, the phrase "to the best of Buyer's knowledge" shall mean the current actual knowledge of Buyer. If prior to the Close of Escrow Seller determines that any representation or warranty of Buyer is untrue, inaccurate or incomplete in any material respect (and without waiving any of Sellers rights or remedies hereunder at law or in equity with respect to any material untruth, incompleteness or inaccuracy existing on the Effective Date, that was known of or should have been Innown of by Buyer), Seller may give Buyer written notice of sarne and Buyer shall have seven (7) days from the elate of receipt of Seller's notice (and the Closing Date -11- 25C-21 shall be extended to permit the running of such seven (7) day period) ("Buyer Cure Period") to correct any fact or circumstance that makes such representation or warranty materially untrue or inaccurate to Seller's reasonable satisfaction. If Buyer fails to make such correction within the Buyer Care Period, then Seller by written notice to Buyer Within three (3) days after the expiration of the Buyer Cure Period (and the Closing Date sliall be extended to permit the running of such three (3) day period) shall be entitled (a) to terminate this Agreement or (b) continue this Agreement in fall three and effect with an change in terms, but Without Waiving any legal, equitable or other remedies it may have against Buyer. The foregoing is not a waiver or release of my or Seller's rights or remedies for any material untruth, incompleteness or inaccuracy in t representation or warranty of Buyer of which Seller obtains knowledge after the Close of Fserow. (1) Authorization. Buyer is a corporation duly formed and validly existing under the laws of the State of California and is qualified to transact business in the State of California. Buyer has full power and authority to enter into this Agreement and to perform all of its obligations hereunder, and has taken all action required by law, its governing instruments or otherwise to authorize the execution, delivery and performance of this Agreement. Each individual who has executed this Agreement on behalf of Buyer has the right, power, legal capacity and authority to execute, deliver and perform this Agreement oil behalf of Buyer. (2) Binding Agreement. This Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except to the extent that such eril:76reement may be thrilted by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally, (3) Hotel Commitment. Buyer hereby represents and guarantees that, subject to obtaining the Entitlements, it Will COuStRict and develop the hotel component of the .Project oil the Property. The proposed construction and development of the hotel component of the Project oil the Property is critical to the Seller's decision to sell the Property to Buyer. No use of the Property other than as the Project and City approved ancillary uses will be considered an appropriate use of the Propctty- (4) Compliance with Law. Buyer is required to carry out the development of the Project in conformity with all applicable laws, including all applicable building, planning and zoning laws, enviroculiental laws safety laws and federal and state wage laws. 5,23 Natural Hazard Zone Disclosure. No later than seven (7) business clays prior to the Property Approval Date, the Seller will, at its sole cost and expense, provide Buyer with a Natural Hazard Zone Disclosure required by applicable law. 53 Buyer and Seller Cooperation. During the term of Escrow, Buyer shall submit plans for the ProJect to Seller, and Seller, in its capacity as the City within which the Project is located, will make the determination as to the required entitlements based upon Buyer's proposed plans. Buyer may then process and obtain the Entitlements deemed necessary -12- 25C-22 in connection with its plan for development of the Property through Seller in its capacity as the City within which the Project is located. Seller makes no representations nor warranties with respect to granting Entitlements and nothing in this Agreement shall be deemed to be a prejudgment or commitment with respect to exercise of governmental discretion with regard to such items nor a guarantee that such approvals or permits will be granted at all or within any particular time or with or without any particular conditions. 5.4 Seller's Additional Covenants, Seller hereby covenants and agrees that, Seller (a) will not promote, advertise, market, transfer, lease or convey any of the Property or enter into any agreement to promote, advertise, market, transfer, lease or convey any of the Property or modify or amend any lease other than to terminate any leases as to the Property, (b) will not enter into any agreement; that will be or purport to be binding oil the Buyer or the Property subsequent to the Close of Escrow; (e) shall, at its sole cost and expense, maintain the Property and all improvements thereon in a reasonable condition and in a manner that complies with all applicable laws and shall continue in full force and effect all property and liability insurance with respect to the Property which is in effect 30 days before the Effective Date; (d) will not take, approve or consent to any action or omission that world change the zoning, use, permits or Entitlement of or for the Property or that would otherwise adversely affect the Property or Buyer's plan for development of the Property or Buyer's ,processing of the Entitlements; (e) will promptly give Buyer written notice of any notice or information Seller receives regarding zoning uses, permits, licenses or other Entitlements which would have an adverse impact on the ability of Buyer to develop the Property for its anticipated use; (f) shall not record or cooperate in the recording against the Property or any portion thereof, of army lien, encumbrance, agreement, easement, right of way or other matter without Buyer's written consent; and (g) will not engage in any act or omission which would ,result in the Property not being in compliance with the provisions of this Agreement or arty applicable law or which would prevent the Title Company from issuing [lie Title Paticy in accordance with this Agreement. 6. Default by )buyer. 6.1 Liquidated Damages. IF ESCROW FAILS TO CLOSE SOLELY DUE TO A DEFAULT OR BREACH OF THIS AGREEMENT BY BUYER, SELLER WILL BE, DAMAGED AND WILL, BE ENTITLED TO COMPENSATION FOR THOSE DAMAGES, BUT SUCH DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN FOR THE FOLLOWING REASONS: (1) THE DAMAGES TO WHICH SELLER WOULD BE ENTITLED IN A COURT OF LAW WILL BE BASED IN PART ON THE DIFFERENCE BETWEEN THE ACTUAL VALUE OF THE PROPERTY AT THE TIME SET FOR THE CLOSE OF ESCROW AND THE PIJRC14ASE PRICE FOR THE PROPERTY AS SET FORTH IN THIS AGREEMENT; PROOF OF THE AMOUNT OF SUCH DAMAGES WILL, BE BASED ON OPINIONS OF VALUE OF THE PROPERTY, WHICH CAN VARY IN SIGNIFICANT AMOUNTS; AND (2) IT IS IMPOSSIBLE TO PREDICT AS OF THE EFFECTIVE DATE WHETHER THE VALUE OF THE PROPERTY WILL INCREASE OR DECREASE AS OF THE CLOSE OF ESCROW. BUYER. DESIRES TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH BUYER MIGHT BE LIABLE SHOULD 13UYER BREACH THIS AGREEMENT. BUYER AND SELLER WISH TO AVOID THE COSTS AND LENGTHY DELAYS WHICH WOULD RESULT IF SELLER FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT. IF ESCROW FAILS -13- 25C-23 TO CLOSE DUE TO A DEFAULT Olt }BREACH OF `FILLS AGREEMENT BY BUYER, THEN BUYER'S DEPOSIT ACTUALLY DELIVERED INTO ESCROW BY BUYER SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER'S DAMAGES UNDER THE PROVISIONS OF SECTION 1671 OF TIIE CALIFORNIA CIVIL CODE, SELLER'S SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF THE FAILURE OF ESCROW TO CLOSE AS A RESULTING OF BUYER'S DEFAULT SHALL BE LIMITED TO COLLECTION OF SUCH LIQUIDATED DAMAGES AND ATTORNEYS FEES AND COSTS OF COLLECTION IN CONNECTION THEREWITH, II' ANY. THE LIQUIDATED DAMAGES ARE NOT INTENDED AS A PENALTY OR A FORFEITURE UNDER CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, EXCEPT AS PROVIDED IN THE FOLLOWING SENTENCE SELLER HEREBY WAIVES ALL OTHER CLAIMS, DAMAGES AND OTHER REMEDIES INCLUDING TIIE PROVISIONS OF CALIFORNIA CIVIL CODE SECTIONS 3384, 3357 AND 3389, THE FOREGOING LIQUIDATED DAMAGES CLAUSE APPLIES ONLY IN CONNECTION WITH THE BUYER'S DEFAULT IN ITS OBLIGATION 'TO CLOSE ESCROW AND 81IALL NOT APPLY TO (A) BUYER'S LIABILITY TO SELLER UNDER THE INDEMNIFICATION PROVISIONS OF SECTION 4.3 AND (B) SELLER'S ATTORNEYS' FEES INCURRED IN ENFORCING ITS RIGHTS UNDER SECTION 4.3 AND /OR TILLS SECTION 6.1. 6,2 Right to Cure. Bayer shall be cleaned to be in default under this Agreement if Buyer fails, for any reason other than Seller's default tinder this Agreement, to meet, comply with,, or perform my material covenant, agreement, or obligation required on its part, including the deposit or delivery of any fands, within the time limits and in the manner required in this Agreement; provider] that no such default shall be deemed to have occurred unless and until Seller has given Buyer written notice describing the nature of the default, and Buyer has failed to cure such default within seven (7) business days after the receipt of such notice (unless the curing of such default cannot reasonably be accornplished within such seven (7) business clay Period in which case the Buyer shall commence to cure such default within such seven (7) business clay period and diligently Pursues saute to completion within a reasonable amount of time), 7. Notices. Any notice to be given hereunder to either Party or to Escrow Holder shall be in writing and shall be given either by personal delivery, fhcsirnile, federal express (or simihu overnight delivery service), overnight courier or by depositing such notice in the United States first class mail, certified, with return receipt requested, postage prepaid and addressed as follows: SELLER: The City of Santa. Ana Hassan Haghani Executive Director Planning and Building Agency 20 Civic Center Plaza (M -20) P.O. Box 1988 Santa Ana, California. 92702 Phone No.: (714) 667 -2706 Fax No:: (714) 973 -14461 -14- 25C -24 With Copy to: Office of the City Attorney City Attorney 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 Phone No.: (714) 647-5201 Fax No.: (71.4) 647 -6515 BUYER: NET DEVELOPMEN'r CO„ INC, 3130 Airway Avenue Costa Mesa, CA 92626 Attention: Kevin Coleman Phone No.: (714.) 754 -4454 Fax No.: (714) 754 -0198 With copy to: Rutan & Tucker„ LL'P 611 Anton Blvd., Suite '1400 Costa Mesa, CA 92626 Attention: Kim D, Thonapson Phone No.: (714) 641 -3449 Fax No.: (714) 546 -9035 Escrow Holder: Fidelity National Title Insurance Company 1300 Dove Street, Suite 310 Newport Beach, CA92660 Attu: April Palmer Phone No.:(949) 221 -4770 Fax No.: (949) 477 -6820 Either Peaty and Escrow Holder may, by written notice to the other and to Escrow Holder, designate a different address which shall be substituted for the one specified above. If any notice or other document shall be sent by certified mail as set forth above, it shall be deemed to have been effectively served or delivered seventy -two (72) bonus following the deposit of such notice in the tiruted States mail in the manner set forth above. If any notice or other document shall be sent by facsimile, it shall be deemed to have been served or delivered upon electronic confirmation of transmission; provided that it is confirmed by a follow -up notice using approved methods hereunder within seventy -two (72) hours and provided further that subject to the Foregoing if such transmission occurs on a weekend or holiday or after 5:00 p.m, on a weekday, it shall be deemed to have been received at 8 :00 a.m. on the immediately following business day, 8. Attorneys' Fees. If any Party to this Agreement shrill bring any action or proceeding for any relief against the other, declaratory or otherwise, in any way arising out of or in connection this Agreement and /or the Property, the losing Party shall pay to the prevailing Party a reasonable sum for attorneys` ,Pees and costs (including without limitation expert witness fees) incurred in bringing or defending such action or proceeding or enforcing tiny Judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such -15- 25C-25 action or proceeding and shall be paid whether or not such action or proceeding is prosecuted to final ;judgment. Any judgment or order entered in such action or proceeding shall contain a specific provision providing for the recovery of attorneys' fees and costs, separate from the judgment, incurred in enforcing such judgment. The prevailing Party shall be determined by the trier of fact based upon an assessment of which Party's major arguments or positions taken in the proceedings could fairly be said to have prevailed over the other Party's major arguments or positions on major disputed issues. For the purposes of this Section, attorneys' fees shall include, without limitation, fees incurred in the following: (1) post - judgment motions, (2) contempt proceedings; (3) garnishment, levy and debtor and third party examinations, (4) discovery; and (5) banldruptey litigation. 9. Miscellaneous. 9.1 No Modification& No addition to or modification of any term or provision of this Agreement is effective unless in writing and signed by the Parties. 9,2 Construction of Agreement. The provisions of this Agreement shall not be construed in favor of or against either Party, but shall be construed as if both Parties prepared dris Agr ocraern. 93 headings. The Section headings of this Agreement are only for convenience and shall not be deemed to limit the suliiect of such Sections or to be considered in their construction. 9A Governing Law, The laves of the State of California shall govern this Agreement 9.5 Time of the Essence. Time is of the essence of each and every provision of this Agreement, 9,6 Further Assurances. Each of the Parties shall execute and deliver all additional papers, documents and other assurances, and shall do all acts and 'things reasonably necessary in connection with the performance of their obligations under this Agreement to carry out the intent of this Agreement. 9.7 No Waiver. No waiver by a Party of a breach of any of the terms, covenants, or conditions of this Agreement by the other shall be construed or held to be a waiver of any succeeding or preceding Breach of the same or any other term, covenant or condition contained 'herein. No waiver of any default by a Party shall be implied from any omission by the other Party to take any action on account of such default if such default persists al• is repeated and no express waiver shall affect a default other than as specified in such waiver. The consent or approval by either Party to or of any act by the other requiring the first Party's consent or approval shall not be deemed to waive or render unnecessary the consenting Party's consent or approval to or of any subsequent similar acts by the other Patty. 9.8 Severability. If any portion of this Agreement is held by any coma of contpetent jurisdiction to be .illegal; null, void or against public policy, the remaining portions of this Agreement shall not be affected thereby and shall remain in force and effect to the fill extent -16- 25C-26 permissible by law, but only to the extent that performance of such remaining ,provisions would not be inconsistent with the intent and purposes of this Agreement. 99 Gender and Number. As used in this Agreement (]unless the context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural include one another. 9.10 Entire Agreement. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and all prior and contemporaneous agreements, representations, negotiations and understandings of the Parties, oral or written„ (including, without limitation any letters of intent or understanding) are hereby superseded and merged herein. The preceding sentence shall not affect the validity of any instrument executed by the Parties in the forth of the exhibits attached to this Agreement, 9.11 Survival. All covenants, agreements, representations, warranties and indemnities contained in this Agreement shall survive the exccrition and delivery of this Agreement and the Close of Lscrow and the delivery and recordation of all documents or instruments in connection therewith. 9.12 Time References. Unless otherwise expressly provided in this Agreement, any reference in this Agreement to time for performance of obligations or to elapsed . time shall mean. Pacific Standard Time and time periods shall paean consecutive calendar days, months or years, as applicable. If the date ( "Performance Date ") on which any action is to be taken, any obligation is to be performed, or any notice is to be givens under this Agreement falls on a Saturday, Sunday, day in which the Santa Ana City Hall is closed or federal holiday, such Performance Date shall be automatically extended to the next business day. As used in this Agreement, "business day ", means any calendar day that is not a Saturday, Sunday, day in which the Santa Ana City Ball is closed or federal holiday. The time for performance on any Performance Date shall be no later than 5:00 p.m., unless otherwise provided in this Agreement. 9.13 Incorporation of Exhibits. Except as intentionally omitted, all exhibits attached hereto and referred to herein are incorporated into the Agreement as though fully set forth herein. 9.11 Venue. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be the Superior Court of Orange County and Mile Parties hereby agree to and do hereby submit to the jurisdiction of such court. 9,15 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be construed as one instrument 9.16 Assignment. Buyer may not assign its rights or obligations under this Agreement without the prior written consent of Seller, which consent may be withheld in the sole discretion of Seller, Buyer shall provide Seller with thirty (30) day written notice of any such proposed assignment. Notwithstanding the foregoing, Buyer, without Seller's consent shall be entitled to assign its rights and obligations under this Agreement to (a) a partnership of which Buyer, Kevin A. Coleman or an affiliate entity is the general partner, (b) a limited liability _1y.. 25C -27 company_ of which, Bayer or an affiliate entity is the managing member and which Buyer or air affiliate entity directly or indirectly holds an ownership interest and any other entity in which Buyer directly or indirectly has an ownership interest and is responsible for managing the day to day activities of such entity or (c) SA Hotel One LP, a California limited partnership ('which entity has been formed by Buyer to acquire and develop the Property and confoms to the foregoing). Buyer shall provide Seller with written notice of any such assignment. 9.17 No 'Third Parry Beneficiaries. Notwithstanding any provision contained in this Agreement to the contrary, this Agreement is intended as and shall be deemed to be an agreement for the sale of assets and none of the provisions hereof shall be deemed to create any obligation or liability of any person that is not a Party, whedrer under a third-party beneficiary theory„ laws relating to transferee liabilities or otherwise. Except as provided otherwise in this Agreement, Buyer shall not ascunnc and shall not be obligated to discharge or be liable for any debts, liabilities or obligations of Seller including, but not limited to, espy (a) liabilities or obligations of Seller to its creditors, shareholders, members, partners, managers, or owners, (b) liabilities or obligations of Seller with respect to any acts, events or transactions occurring prior to, on or after the Close of Escrow, (c) 'liabilities or obligations of Seller for any federal, state, county or local taxes, or (d) any contingent liabilities or obligations of Seller, whether known or nnicnown by Seller or Buyer. Except as provided otherwise in this Agreement, Buyer shall have no duty whatsoever to take any action or receive or mare any payment or credit arising from or related to any services provided or costs incurred in connection with the Property prior to the Close of Escrow, including, but not lirtiited to, any matters relating to cost reports, collections, . audits, hearings, or legal action arising therefrom. [SIGNATURES ON FOLI,OPVING PAGE] -lb- 25C-28 ISIGNATURE PAGE TO SALE AGREEMENT AND ESCROW INSTRUCTIONS) Buyer and Seller have executed this Agreement as of the Effective Date. THE CITY OF SANTA ANA NET DEVELOPMENT" CO., INC. a public body corporate and politic a California corporation By: City Manager AS TO FORM: VALHO, City Attorney Ana City Attorney RECOMMENDED FOR APPROVAL: HASSAN HAGHANI Executive Director Planning and Building Agency 0 _lg_ 25C -29 EXHIBIT "A "" DESCRIPTION/DEPICTION OF PROPERTY The Property is the real property in the City of Santa Ana, County of Orange, State of California, described as follows: APN: 003-113-80 and 003- 113 -81 PROPERTY ADDRESS: 9129 North Main Street, Santa Aria, California LEGAL DESCRIPTION: Portion of Lots 3 through 6, and 9 through 12, Phelps Subdivision of a portion Of the Dericot Tract, per inap recorded in Book 1, Page 95 of Miscellaneous Maps, in the office of the County Recorder, County of Orange, California, plus portion of adjacent vacated public alley. 25C-30 East End Realty Par 129 West Wilson Street Costa Mesa, C/\g; April I7'2017 RE: Proposed Hotel Project Honorable Mayor & City Council, !arn writing this letter in support nf the proposed h( it's a good project f*rthe[ityandvvi|laddmUChoei Asa major stakeho|derinth8DnvvMtOvvm8renonost outside uf the area, orin many cases, in competing | they stay and spend their money in Santa Ana. |M@( term construction jobs and permanent jobs once np will generate approximately one million dollars inar find many uses for. All and all seems like $ positive � City needs more of. Thanks for your consideration Sincerely, Ryan Chase ��v� ����� � ��� n� �&� IKyS�/ ,`� � rn/ � |erS� ~ \)r�°~ Uke108 at%l2QN Main St. |bekeve ( visitor serving hotel rooms. sitars have no choice but to stay �ighboring cities. Would much rather lition, the project will create short n and noy understanding is the hotel ma! TOT � tax which sure they City could ject for the City and ao amenity the