HomeMy WebLinkAbout25A - AGMT - SALE 2129 N MAIN STREQUEST 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)
CI NAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on lb' Reading
❑ Ordinance on 2"' Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO Q&t& . ceCY7
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.
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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.
25A -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
Hassan Hagha i, AI
Executive Director
Planning and Building Agency
HH:MM:rb
RB \Reports \Purchase Agmt Net Devel 2129 N Main
APPROVED AS TO FUNDS AND ACCOUNT:
X
fq/ Francisco Gutierrez Ee
Executive Director
Finance and Management Services Agency
Exhibits: 1. Proposed Conceptual Hotel Renderings
2. Purchase and Sale Agreement
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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."
RECITALS
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 -I 13 -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 Hampton Inn, or equivalent, or higher rated
hotel and an associated digital freeway billboard sign limited to advertising of occupants of the
Property and community services within the City at the request of the City, subject to City
approval under proper permits (the "Project ").
THEREFORE, Seller and Buyer agree as follows:
Purchase and Sale; Purchase Price.
1.1 Purchase and Sale. Seller shall sell the Property to Buyer and Buyer
shall purchase the Property from Seller subject to the terns and conditions set forth in this
Agreement.
1.2 Purchase Price. The purchase price of the Property is TWO MILLION
SEVENTY -FIVE THOUSAND DOLLARS ($2,075,000.00), which amount was established as
the fair 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 Attn: April Palmer
( "Escrow Holler') for the purchase and sale of the Property. The "Opening of Escrow" shall
mean the date on which a fully executed copy of this Agreement has been delivered to Escrow
Holder. Escrow Holder shall confinn the Opening of Escrow to the Parties in writing. This
Agreement constitutes joint escrow instructions to Escrow Holder. The Parties agree to execute
such additional instructions consistent with the provisions of this Agreement 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
W1:IWkvr
25A -11
Holder, the terms 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? Payment of Purchase Price. The Purchase Price for the Property shall be
payable as follows:
2.2.1 Deposit. Buyer has made an Initial Deposit (as defined in the
ENA) of NINETY THOUSAND DOLLARS ($90,000:00) pursuant to the 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 Rinds 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 bearing account
with interest accruing for the benefit of Buyer.
2.2.2 Feasibility Consideration. Notwithstanding any other provision
of this Agreement to the contrary, One Hundred Dollars ($100) of the Deposit ( "Retained
Amount ") shall, upon-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 holding the Property off the market during the Feasibility Period and granting Buyer
the right to acquire the Property in accordance with this Agreement, if Buyer approves the
Property during the Feasibility Period. The, Retained Amount 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 Retained
Amount, except in the event of a default. by .Seller.
2.2.3 Payment at Closing. If Seller has deposited' into Escrow all
documents and amounts 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
Agreement, then on or before the "Closing Date" (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 statement furnished by Escrow Holder as provided below.
2.3 Close of Escrow. Subject to Sections 2.3.1 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 kind 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 (24) months of the Effective Date of this Agreement. Any
request for an extension of this timeframe must go to the Santa Ana City Council for
2%
25A -12
consideration. As used in this Agreement, "Close of Escrow" shall mean the date on which the
"Grant 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
may, 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 in 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
documents 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.
(5) 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 fiom obtaining building permits, sewer pennits, water
permits, certificates of occupancy or other development or occupancy entitlements for the
Project to be constructed on the Properly ( "Public Development Limitation "); provided that
the Buyer's inability to obtain approval of the Entitlements for reasons other than the
occurence of a Public Development Limitation, shall not be viewed as a failure of this
condition.
(6) 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.
2.3 .2 Conditions Precedent to Seller 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 any such condition is not satisfied or waived by Seller prior to the
Close of Escrow for any reason other than a default by Seller, 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.
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(1) Representations and Warranties. Each of Buyer's
-representations and warranties set forth in this Agreement are materially true and accurate as of
the Close of Escrow.
(2) Buyer's Obligations. Buyer is not in material 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 due to Seller's
default and this Agreement is terminated, Seller shall pay all Escrow cancellation charges.
"Escrow cancellation charges" means 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 dire 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 other than a default by one of the Parties, Buyer shall 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 any reason other than a default by Buyer, the Deposit shall immediately
be -returned to Buyer; provided, however, that 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 Deed,
including a restriction that the Property be used and developed as the Project, as deemed
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25A-14
permissible by the City, (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 an 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 days of delivery of the 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 title 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 five (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 shall 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)
( "Title 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 a standard coverage title policy ( "Seller
Title Costs ").
2.7 Possession. 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.
2.8.1 Taxes. All current general and special taxes and assessments on
the Property 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 in 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
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25A -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 on the current tax roll. Any real property
taxes or assessments levied under 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 an "actual
day" basis and a three hundred sixty -five (365) day year. The provisions of this Section shall
survive Close of Escrow. if either Party fails to pay its pro rata share of taxes or other expenses
by the times herein provided, interest shall accrue on all unpaid amounts from when owing 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 of Escrow regarding adjustments or prorations, the Parties
shall make the appropriate correction promptly when accurate information becomes available.
Any corrected adjustment or proration shall be paid to the Party entitled thereto . within thirty (30)
days after written request therefor and if not so paid interest shall accrue and be payable on same
at the maximum rate allowed by Law.
2.9 Closing Costs. Buyer shall pay the cost of the Title Policy, the Escrow
Fees 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 Documents. 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 the
following order and delivered as provided below):
2.10.1 Grant Deed. One (1) filly executed and acknowledged copy of
the grant deed on Title Company's standard form conveying time Property to- Buyer ( "Grant
Deed "). The Grant 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.
2.10.2 Withholding Exemption Certificates. One (1) completed and
executed copy of the following: Non - foreign Transferor Declaration; Preliminary Change in
Ownership Report, Internal Revenue Service Form 1099 -S, and California Franchise Tax Board
Form 593 and any other applicable state tax witlmholding forms, as applicable.
As soon as reasonably possible following the Close of Escrow, Escrow Holder shall
deliver copies of all closing documents, including, without limitation, those listed above, the
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Title Policy, any additional escrow instructions and the final Escrow closing statement, to
Seller's counsel and Buyer's counsel.
2.11 Seller's Proceeds. 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 wider
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 shall execute and deliver to
Escrow any other documents reasonably required by Escrow Holder including, without
limitation, Seller's affidavits or statements regarding mechanics liens and7or 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 as of the Close of Escrow.
3. Real Estate Brokerage Commission. Buyer and Seller each represent and
Warrant to each other that they have not employed, dealt with 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' fees 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 arising 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
indennifying 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 copies 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 Seller (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
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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 ($1,000,000) with Seller reflected as an
additional insured. Buyer shall comply with all applicable laws and governmental regulations in
performing activities on the Property. Buyer shall indemnify, defend and hold Seller and the
Property free 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',
mateiialmen's and other liens resulting from 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 willfiil 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 diminution in value of the Property.
5. Additional Agreements.
5A Buyer's Investigation. Buyer shall be entitled to conduct such
independent investigations as Buyer deems necessary or appropriate concerning (i) 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 all improvements located
thereon; (iii) applicable laws, statutes, rules, regulations, ordinances, limitations, restrictions or
requirements concerting the use, density, location or suitability of the Property or any existing or
proposed development or condition thereof, including but not limited to zoning, subdivision and
other regulations (collectively, the "Regulations "); (iv) the necessity or availability of any
specific plan or general amendments, 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 connection 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 to Buyer to purchase the Property from Seller, Seller 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 Buyer. For all
purposes of this Agreement, including Seller's representations and warranties contained in this
Section 5.2.1, the phrase "to the best 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
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material untruth, incompleteness or inaccuracy existing on the Effective Date, that was known of
or should have been known of by Seller), Buyer may give Seller written notice of same and
Seller shall have seven (7) days from the date of receipt of Buyer's notice (and the Closing Date
shall be extended to permit the running of such seven (7) day period) ( "Seller Cure Period") to
correct any fact or circumstance that makes such representation or warranty materially untrue or
inaccurate to Buyer's reasonable satisfaction. If Seller fails to make such correction within the
Seller Cure Period, then Buyer by written notice to Seller within three (3) days after the
expiration of the Seller Cure Period (and the Closing Date shall be extended to penuit the
running of such three (3) day period) shall be entitled (a) to terminate this Agreement and obtain
a full reftmd of the Deposit or (b) continue this Agreement in Rill 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 rights 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 all 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 perform this Agreement on behalf of Seller.
(2) Conflicting Agreements. Neither the execution or
delivery of this Agreement, nor the consummation of the transaction contemplated herein, wilt
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 would result in any such defaulL 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 the Property in the manner disclosed by Buyer to Seller. To the best of
Seller's knowledge, there are no condemnation or eminent domain proceedings pending or
threatened with respect to the Property.
(4) Binding Agreement. 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,
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insolvency, moratorium and other principles relating to or limiting the rights of contracting
parties generally.
(5) Violations of Law. On the Effective Date and Close of
Escrow neither this Agreement nor the Property shall be in violation of any law, ordinance,
rule 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). To the best of Seller'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, on 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 on the Property have occurred which use or operation has violated any applicable
enviromnental law; and.(e) the Property is not on any "Superfund" list under any applicable
environmental 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 other requirements, of Governmental Authorities relating to the
environment to any "hazardous materials" (as defined below) (including without limitation the
Comprehensive Environmental 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 mean any (a) chemical, compound, material, mixture or substance that is now defined or
listed in, or otherwise classified pursuant to any environmental law as, a "hazardous
substance," "hazardous material," "hazardous waste," "ci;tremely hazardous waste,"
"infectious waste," "toxic waste," "toxic pollutant" or any other formulation intended to
define, list or classify substances by reason of deleterious properties or effect and (b)
petroleum, petroleum by- product's, 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.
(8) Endangered Species. To the best of Seller's knowledge,
(a) there are no endangered or threatened species of animals, plants or insects on the Property
and (b) there are no envirormiental or biological characteristics of the Property or adjacent
property which under 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.
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25A-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 and 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.
(11) 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 parry, 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 Escrow, without Buyer's written consent.
(I 2) Access. There is frill 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" means (a) the making by a person of a general assignment 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 attaclmient, execution or other judicial seizure of ally property
interest which remains in effect. or (d) the failure to have taken or submission to any 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
proposes 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 Seller's 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 known of by Buyer), Seller may give Buyer written notice of same and
Buyer shall have seven (7) days from the date of receipt of Seller's notice (and the Closing Date
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25A-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 Cure Period, then Seller by written notice to Buyer within three (3) days after the
expiration of the Buyer Cure Period (and the Closing Date shall 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 Rill force and effect with no 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 any of Seller's rights or remedies for any material untruth, incompleteness or
inaccuracy in a representation or warranty of Buyer of which Seller obtains knowledge after the
Close of Escrow.
(1) Authorization. Buyer is a corporation duly formed and
validly existing corder 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 on
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 enforcement may be limited 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 construct and develop the hotel
component of the Project on the Property. The proposed construction and development of the
hotel component of the Project on the Property is critical to the Seller's decision to sell tire
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 Property.
(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, environmental laws, safety laws and federal and state
wage laws.
5.2.3 Natural Hazard Zone Disclosure. No later than seven (7)
business days 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.
5.3 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
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25A-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 a 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 al 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 on the Buyer or tlue
Property subsequent to the Close of Escrow; (c) 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 fill 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 would 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 Propeiy or Buyer's processing of the
Entitlements; (e) will promptly give Buiyer 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 any 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 any applicable law or which would
prevent the Title Company from issuing the Title Policy 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 PURCHASE 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 BUYER
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
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TO CLOSE DUE TO A DEFAULT OR BREACH OF THIS 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 THE 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, IF 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 THE PROVISIONS OF CALIFORNIA CIVIL CODE
SECTIONS 3384, 3387 AND 3389. THE FOREGOING LIQUIDATED DAMAGES CLAUSE
APPLIES ONLY IN CONNECTION WITH THE BUYER'S DEFAULT IN ITS OBLIGATION
TO CLOSE ESCROW AND SHALL 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 THIS SECTION 6.1.
6.2 Right to Cure. Buyer shall be deemed to be in default under this
Agreement if Buyer fails, for any reason other than Seller's default under this Agreement, to
meet, comply with, or perform any material covenant, agreement, or obligation required on its
pail, including the deposit or delivery of any funds, within the time limits and in the manner
required in this Agreement; provided 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 accomplished within such seven
(7) business day period in which case the Buyer shall commence to cure such default within such
seven (7) business day period and diligently pursues same to completion within a reasonable
amount of time).
7. Notices. Any notice to be given hereunder to either Patty or to Escrow Holder
shall be in writing and shall be given either by personal delivery, facsimile, federal express (or
similar 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
FaxNm; (714)97')-1461
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With Copy to: Office of the City Attorney
City Attorney
20 Civic Center Plaza (M 729)
P.O. Box 1988
Santa Ana, California 92702
Phone No.: (714) 647 -5201
Fax No.: (714) 647 -6515
BUYER: NET DEVELOPMENT CO., INC.
3130 Airway Avenue
Costa Mesa, CA 92626
Attention: Kevin Coleman
Phone No.: (7 14) 754 -4454
Fax No.: '(714) 754 70198
With copy to: Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Attention: Kim D. Thompson
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
Attn: April Palmer
Phone No.:(949) 221 -4770
Fax No:: (949) 477 -6820
Either Party 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) hours following the deposit of such notice
in the United 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 shall bring any action or
proceeding for any relief against the other; declaratory or otherwise, in any way arising out of or
in -connection ection this Agreement and/or the Property, the losing Party shall pay to the prevailing
Patty a reasonable sum for attorneys' fees and costs (including without limitation expert witness
fees) incurred in bringing or defending such action or proceeding or enforcing any judgment
granted therein, all of which shall be deemed to have accrued upon the commencement of such
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25A-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) bankruptcy litigation.
9. Miscellaneous.
9.1 No Modifications. 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 Patty; but shall be construed as if both Parties prepared
this Agreement.
93 Headings. The Section headings of this Agreement are only for
convenience and shall not be deemed to•limit the subject of such Sections or to be considered in
their construction.
9.4 Governing Law. The laws 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 Patties 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 or 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 Party.
9.8 Severability. if any portion of this Agreement is field by any court of
competent 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 full extent
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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.
9.9 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 Parties in the form of the exhibits attached to this Agreement.
9.11 Survival. All covenants, agreements, representations, warranties and
indemnities contained in this Agreement shall survive the execution and delivery of this
Agreement and the Close of Escrow 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 mean 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 given 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 Hall 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.
9.14 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 the
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 tights or obligations under this
Agreement without the prior written consent of Seller, which consent may be witlnlneld 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
254 -27
company of which Buyer or an affiliate entity is the managing member and which Buyer of an
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 conforms to the
foregoing). Buyer shall provide Seller with written notice of any such assignment.
9.17 No Third Party 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, whether under a third =party beneficiary
theory, laws relating to transferee liabilities or otherwise. Except as. provided otherwise in this
Agreement, Buyer shall not assume and shall not be obligated 'to discharge or be liable for any
debts, liabilities or obligations of Seller including, but not limited to, any (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
unknown by Seller or Buyer. Except as provided otherwise in this Agreement. Buyer shall have
no duty whatsoever to take any action or receive or make 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 limited to, any matters relating to cost reports, collections,
audits, hearings, or legal action arising therefrom.
[SIGNATURES ON FOLLOWING PAGE]
_lg_
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[SIGNATURE 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: By:
City Manager Its:.
AS TO FORM:
VALHO, City Attorney
Attorney
Ana
RECOMMENDED FOR APPROVAL:
HASSAN HAGHANI
Executive Director
Planning and Building Agency
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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:
2129 North Main Street. Santa Ana, California
LEGAL DESCRIPTION:
Portion of Dots 3. { hrough 6, and '9 through 12, Phelp's Subdivision of a portion of
the Dericot Tract, per snap 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.
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CORRESPONDENCE
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East End Realty F
129 West Wilson Stre
Costa Mesa, CA
April 27, 2017
RE: Proposed Hotel Project
Honorable Mayor & City Council,
I am writing this letter in support of the proposed ho
it's a good project for the City and will add much nee
As a major stakeholder in the Downtown area most %
outside of the area, or in many cases, in competing n
they stay and spend their money in Santa Ana. In ad
term construction jobs and permanent jobs once ope
will generate approximately one million dollars in an
find many uses for. All and all seems like a positive p
City needs more of.
Thanks for your consideration
Sincerely,
Ryan Chase
25A
ers
uite I
[011 APR 27 PIA 2: 43
CLERK �F C0 1+CIL
at 2129 N Main St. I believe
quality visitor serving hotel rooms.
rs have no choice but to stay
boring cities. Would much rather
n,� the project will create short
id my understanding is the hotel
TOT tax which sure they City could
ctlfor the City and an amenity the
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Mitre - Ramirez, Norma
From:
Kristi Love <klove @netdevco.com>
Sent:
Wednesday, May 10, 2017 2:11 PM
To:
eComment
Cc:
Kevin Coleman; PJ Jahangiri<pjahangiri @advantage - reo.com>; Morley, Marc
Subject:
Main St. -hotel project, letter of support
Attachments:
20170428145258294.pdf
Please see the attached letter of support for the hotel project. Please make sure it is made part of the packet
for the city council meeting schedule for next Tuesday 5/16.
Thank you.
tristi Love Whitacre
Executive Assistant to
Net Development Co.
3130 Airway Avenue
Kevin A. Coleman
Costa Mesa, CA 92626
714-754-4454/ fax: 714-754-0198
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Palm C®u--rt Partite -rs
April 28, 2017
Re: Development of Hampton Hotel
To whom it may concern:
Palm Court Partners consist of the five contiguous parcels
immediately south of the proposed Hampton Hotel site on the east side of north
Main street in Santa Ana..
Palm Court Partners is in favor of the development proposed and is
prepared to work with the city and the development company to see that it is
completed in a way that best serves the parties involved and the city of Santa
Ana.
ECA:nv
With kindest regards,
C. ANDRES
2041 North Main Street a Santa Ana, CA 5706
1714) 55b "7 75 o F.A 1: (7141 560 -J=':0
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Mitre - Ramirez, Norma
From: Lesley Ann Hamilton <LAHamilton @bowers.org>
Sent: Wednesday, May 10, 2017 3A1 PM
To: eComment
Cc: klove @netdevco.com; kcoleman @netdevco.com
Subject: Support for Hampton Inn Hotel Project
Attachments: Hampton Inn. Letter of Support to City Council. May 10, 2017.pdf
Dear Sana Ana City Council,
Attached please find our letter of support for the Hampton Inn Main Street Hotel Project at 2129 North Main
Street. The original letter was sent to you by mail.
Thank you,
Lesley
Lesley Ann Hamilton
Assistant to the President
2002 North Main Street
Santa Ana, CA 92706
T: 714.567.3602 F: 714.567.3603
LAHamilton@bowers.org
BOWERS MUSEUM
FRIDA KAHLO: HER PHOTOS Now Open!
REEL ART: MOVIE POSTERS FROM GHANA
GEMSTONE CARVINGS: MASTERWORKS BY HAROLD VAN PELT Opening April 22nd!
CALIFORNIA BOUNTY: IMAGE AND IDENTITY, 1850 -1930
The information in this e-mail message maybe privileged, confidential and protected from disclosure. If you are not the intended recipient, any dissemination,
distribution or copying is strictly prohibited. If you think that you have received this e-mail in error, please a -mail the sender and delete all copies.
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BOWERS
MUSEUM
OFFICE
OF
THE
PRESIDENT
May 10, 2017
City of Santa Ana
Clerk of the Council Office
20 Civic Center Plaza
Santa Ana, CA 92701
Re: Hampton Inn Main Street Hotel Project
To whom it may concern:
Please consider this my letter of support for the Main Street Hotel
Project (the Hampton Inn) to be located at 2129 North Main Street.
virtually across the road from the Bowers Museum.
There are no upscale hotels located within a few miles of the
museum so we have to place VIP guests at hotels in surrounding
cities which results in logistical challenges with their transportation
to and from the museum. We host VIPs from all over the world on
a regular basis and having a hotel across the street would be most
advantageous.
My staff and I were delighted to learn of the Hampton Inn Main
Street Hotel Project and we hope it moves forward quickly.
Please feel free to contact the if you have any questions, my direct
number is 714.567.3601 or my email is pkelleria)bo«ers.ore.
I j
Peter C. Keller. Ph.D.
President
2002 North Main Street, Santa Ana, California 92706
bowers.org I Tel 714.567.3600 1 Fax 714.567.3603
Ar[red,WhytnaAmrnun
54AX" '4-
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