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Home My WebLink AboutR31-Economic Delopment Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ann Harris, Director SUBJECT: PUBLIC HEARING - DISPOSITION __~~Ig:_______:::_:;::~l;~:~:::::~~~_:_~~D~E~;~C i~'~JL______~~~~~~~~~~~_~~:~~:_~_~~___ SvnoDsis of Previous CommissionlCounciVCommittee Action(s): On July 12, 2001, the Redevelopment Committee voted to recommend to the Community Development Commission acceptance of the offer to buy the Public Enterprise Property received from Fallbrook Capital, LLC. On July 23, 2001, the Community Development Commission instructed staffto prepare a Disposition and Development Agreement and set a public hearing to consider the sale of the Public Enterprise Center to Fallbrook Capital, LLC. (SvnoDsis Continued to Next Paee...) ____*___._____________________________________________________________n__.._______________________________________.__.___________________________________._____________________nO Recommeuded Motion(s): OPEN PUBLIC HEARING CLOSE PUBLIC HEARING THE FOLLOWING ITEMS CONTINUED FROM SEPTEMBER 17,2001 JOINT PUBLIC HEARING (Communitv DeveloDment Commission) MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE REDEVELOPMENT AGENCY APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND F ALLBROOK CAPITAL, LLC., ON THE TERMS SET FORTH IN SUCH AGREEMENT (Mavor and Common Council) RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN MOTION B: BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK ___________________________~~Xr:~.!,,}=!e.~_____________________________._______________________________________________________________.____._____________________________ Contact Person(s): Gary Van Osdel/Ann Harris Proj ect Area( s) Northwest Phone: 663-1044 Six (6) Ward(s): Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter/Memo SIGNATURE: N/A N/A FUNDING REQUIREMENTS Amount: $ -0- Source: Ann Harris, Director Bus Retention, Recruitment & Revitalization --c.;m;;;issi;;;;jc;;~-;;ciIN;,t;s~-------------------------------------------------------.---------.--------------------------------------------------------------------- ~7(j::,1-49 __2!;Q!_:~~____________________________________________________________m_________________________________________________________ GVO:AH:lag: 11-19-0 I PEC New Hope COMMISSION MEETING AGENDA Meeting Date: 11/19/2001 Agenda Item Number: R,J Request for Commission/Council Action PEC-Disposition & Development Agreement November 7, 2001 Page Number -2- -------------------------------------------------------------------------------------------------------------------- Svnopsis of Previous Commission/CounciIlCommittee Action(s): On September 17, 2001 the Community Development Commission and City Council held a joint public hearing to consider the Disposition and Development Agreement between Fallbrook Capital, LLC, and the Redevelopment Agency, and voted to continue the public hearing to November 19, 2001. GVO:AH:lag:11-19-01 PEC New Hope COMMISSION MEETING AGENDA Meeting Date: 11/1912001 Agenda Item Number: R. 3J ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Disposition and Development Ae:reement - Public Enterprise Center Buildine: BACKGROUND In 1986, the Agency took possession of the Public Enterprise Center (the "PEC"), located at 1505 West Highland Avenue (the "PEC"). The PEC, consisting of a 28,650 square foot building on 3.14 acres of land, currently houses the Inghram Branch Library, the Westside Community Center and the Northwest Project Area Committee along with several small non-profit tenants. With many of the tenants paying rent well below market rate or no rent at all, the average amount of income derived from the PEC is substantially less than the cost to maintain said property. The income from the facility for fiscal year 2000/01 was $31,386.60, and Agency expenditures for upkeep, maintenance and security during that period totaled $171,907.53. Since taking possession of the PEC, the average annual income to the Agency has been approximately $36,003 while the annual cost to the Agency has averaged approximately $158,098. To date, the Agency has paid a total of $2,348,494.41 to maintain and secure the PEC. On June 22, 2001 Agency staff received an offer from Fallbrook Capital, LLC ("Fallbrook") to purchase the PEC Property for $470,000 in cash at close of escrow. For the eighteen months prior to receipt of this offer, staff had been attempting to negotiate the disposition of the PEC with YSP, LLC ("YSP"). YSP had offered to acquire the PEC for $300,000; $100,000 at close of escrow, $100,000 within 24 months of escrow closing and a final payment of $1 00,000 within 36 months of escrow closing. YSP's intended use of the PEC at that time was as a radio/TV audio/visual educational facility. At their meeting of July 12, 2001, during a closed session, the Redevelopment Committee was advised of the offer to purchase the PEC received from Fallbrook, as well as the status of negotiations with YSP. Following discussion, the Committee voted 2 to 1 to recommend to the full Commission that the offer from Fallbrook to purchase the PEC for $470,000.00 cash at close of escrow be accepted. Subsequently, on July 23, 2001, in closed session, the Community Development Commission was advised of the offer to purchase the PEC received from Fallbrook and the status of the negotiations with YSP. In light of the superior offer from Fallbrook, the Commission voted 6 to 1 to accept the offer of $470,000.00 from Fallbrook and directed staff to prepare a disposition and development agreement and to schedule a public hearing to consider same. On September 17, 2001 the City Council and Community Development Commission conducted a joint public hearing to consider the Disposition and Development Agreement (the "DDA") by and between Fallbrook and the Redevelopment Agency, based on Fallbrook's offer to purchase GVO:AH:lag: 11-19-01 PEe New Hope COMMISSION MEETING AGENDA Meeting Date: 11/19/2001 Agenda Item Nnmber: R. ~ I Economic Development Agency Staff Report PEC - New Hope November 8, 2001 Page Number -2- the PEC for $470,000.00 cash at close of escrow. Prior to the Joint Public Hearing, Fallbrook had deposited a $5,000.00 cashiers check as a good faith deposit with the Agency and had indicated their intent to continue to use the PEC to house the City's library as well as various non-profit and educational organizations, albeit at reasonable rent levels. During the Joint Public Hearing, representatives of several community organizations indicated that they were unaware of the Agency's intent to sell the PEC and expressed concern that the PEC would be lost as a resource to the Westside Community. In addition, representatives ofYSP questioned the fairness and legality with which staff had handled the selection and negotiation process. After being advised by Agency Special Counsel of the redevelopment law as it pertains to the disposition of real property by redevelopment agencies, the Community Development Commission and the City Council voted to continue the Joint Public Hearing to November 19, 2001. Staff was further instructed to prepare a letter to individuals, community groups, churches, and organizations that might be interested in purchasing the PEC, outlining the specific requirements for responding to the invitation for proposals and setting a deadline of November I, 2001 for submission of such proposals. On September 21, 200 I, staff prepared a letter to "interested parties" (see attached) requesting written proposals for acquiring the PEC and setting forth the minimum required contents of all proposals. From September 21 st through September 24th, an original copy of this letter, together with a copy of the Disposition and Development Agreement and a copy of the Agency's fiscal year 2000-01 expense report for maintaining, operating and securing the PEC, were either mailed or hand delivered by staff to the Westside PAC, the Samaritain Academy, the Dorothy Inghram Branch Library, the site office of the Park and Recreation Department, the Knotts Group, the Koinonia Charitable Foundation, the Peoples Choice, Jim Chovick, Temple Missionary Baptist Church, the New Hope Missionary Baptist Church, Fallbrook Capital LLC, Campfire USA and to Hardy Brown of the NAACP. In addition, packets were delivered by paid currier to YSP in care of Cliff Hackney at the Boys and Girls Club and to Attorney Luis Lopez at the law offices of Gilbert, Kelly, Crowley & Jennett, LLP. Extra packets were available to the public at the Economic Development Agency offices. CURRENT ISSUE On November 1, 2001 staffreceived proposals from the following three entities by the 5.00 p.m. deadline: Fallbrook Capital LLC, YSP, LLC and New Hope Missionary Baptist Church. Fallbrook, being party to the proposed DDA, reiterated their interest in acquiring and operating the PEC under the same terms and conditions of the DDA, but increased their offer to $475,000. As required by the letter requesting proposals, YSP and New Hope submitted the required $5,000 good faith deposit, acknowledged receipt of the Agency's 12 month summary of expenses, acknowledged that the Agency had been operating the PEC at a deficit, acknowledged the requirement to lease space to the City Library and described the terms and conditions under GVO:AH:lag:II-19-01 PEC New Hope COMMISSION MEETING AGENDA Meeting Date: 11/19/2001 Agenda Item Number: R3J Economic Development Agency Staff Report PEC - New Hope November 8, 2001 Page Number -3- which current tenants would be accommodated. In addition, both entities responded to specific issues related to financial capacity to acquire, manage and operate the PEC. YSP, LLC submitted a proposal (see attached) offering $505,000.00 cash at close of escrow. Although they expect to ultimately need the entire building to operate their state of the art recording studio, in the interim they intend to lease portions of the building to existing and/or new tenants and use some portions to house collaborative educational programs in conjunction with the San Bernardino Unified School District. YSP did not submit the required proof of financial ability to complete the purchase of the PEC, but stated that such proof would be available by the November 19, 2001 public hearing. New Hope Missionary Baptist Church submitted a proposal (see attached) offering $555,000.00 cash at close of escrow. They plan on using the building for various non-profit and community based organizations, will use part of the building for some of their community service programs and will allow existing tenants and the City Library to remain in the building at market rental rate. ENVIRONMENTAL Sale of an existing building involving negligible change in use is exempt from the provisions of CEQA. FISCAL IMPACT The sale of the PEC will generate at least $550,000 in cash to the Redevelopment Agency and save the Agency approximately $140,000 a year in security, upkeep and maintenance expense. RECOMMENDA nON Staff recommends that the sale of Public Enterprise Center be awarded to New Hope Missionary Baptist Church and that the resolutions and the Disposition and Development Agreement be modified to reflect the name of ''New Hope Missionary Baptist Church" and the other terms contained in their proposal. Ann B. Harris, Direc or Business Retention, Recruitment & Revitalization -----------------------------..-------------------------------------------------------------------------------------------------------------- GVO:AH:lag: 11-19-01 PEC New Hope COMMISSION MEETING AGENDA Meeting Date: 11/19/2001 Agenda Item Number: R.3J City of San Bernardino ECONOM~DEVELOPMENTAGENCY Redevelopment. Community Development. Housing. Business: Recruitment, Retention, Revitalization. Main Street, Inc. ~ September 21,2001 PUBLIC ENTERPRISE CENTER Dear Interested Party: This letter is to request a written proposal from you or your organization expressing any interest that you may have in acquiring the Public Enterprise Center (the "PEC") located at 1505 West Highland Avenue, San Bernardino, California. The PEC has been managed by the Economic Development Agency ofthe City of San Bernardino ("EDA") for approximately 15 years and is, currently, owned by the EDA. During this period of time, the EDA has spent in excess of$2,400,000 to maintain the PEC for use primarily by public groups and other community based organizations. The EDA staff was directed by action of the San Bernardino City Council, sitting as the Community Development Commission, to continue the public hearing previously scheduled for Monday, September 17, 2001, for the purpose of obtaining additional proposals for the purchase of the PEC. Proposals must be received by the undersigned not later than 5 :00 PM, Thursday, November 1, 2001, to be evaluated for potential presentation to the Community Development Commission for consideration at the continued public hearing on Monday, November 19, 2001, at 2:00PM. At the Monday, September 17, 2001, public hearing, the EDA staff recommended a Disposition and Development Agreement ("DDA") to the Community Development Commission that provides for a cash purchase price of$470,000 to be paid to the EDA at the close of escrow. The following information must be provided to the undersigned by the above set forth deadline, if yotr proposal is to be evaluated by EDA staff, prior to the November 19, 2001, continued public hearing date regarding the sale of the PEC: 1. The purchase price to be paid by you in cash at the close of escrow, recognizing that the EDA already has a proposal for all cash purchase price of$470,000. The EDA will consider other proposals for a combination of cash and other consideration, provided that the economics, considering the risks associated with any other forms of deferred consideration, are comparable to the current all cash offer of $470,000. 201 North E Street, Suite 301 . San Bernardino. California 92401-1507' (909) 663-1044 . Fax (909) 888.9413 2. Proof of your financial ability to complete the purchase of the PEC and a discussion of the funding sources, equity participation, lending sources and persons or entities that will be providing cash or personal guaranties. You must also submit commitment letters or letters of intent from banks or other lending institutions, issued less than sixty (60) days prior to the date of submission of your proposal to the EDA, must be furnished to the EDA as part of your proposal. 3. A good faith deposit in the amount of $5,000 in the form of a certified check or cashier=s check payable to the Redevelopment Agency of the City of San Bernardino. Such deposit check will be held by the EDA, until a final award is made by the Commission on any proposal received or the Commission rejects all proposals. The good faith deposit check for the successful proposal will be cashed immediately after the award to the successful proposal on November 19, 2001, or any later date, and will be applied to the purchase price at the close of escrow under the DDA or retained by the EDA, if the sale does not close for any reason. The good faith deposits accompanying the unsuccessful proposals will be returned, as soon as practicable, after an award is made to the successful proposal. 4. Evidence of your funding source(s) for ongoing capital expenditures, maintenance and operations of the PEC. 5. Describe your business plan for the property management and tenant leasing of the PEC. Provide names of individuals and companies that will be contracting with you to provide such services and a statement of their qualifications and prior experience in similar matters. 6. Attached for your review and consideration is a 12-month summary of expenses actually incurred by the EDA for the time period stated on the summary. You must acknowledge in your proposal that you are aware of the deficit operations of the PEC and the annual operating costs associated with its ownership. 7. A branch of the City of San Bernardino Public Library is presently located in thePEC. The Library does not pay rent for its occupancy of approximately 3,200 square feet of space in the PEC. It is proposed that the Library Board will enter into a Lease Agreement with any new owner of the PEC, as a condition precedent to the close of escrow under the DDA, for a 4 year term, with rent payable at $0.85 per square foot per month calculated upon 3,200 square feet on a gross lease basis. All landlord expenses will be absorbed by the owner ofthe PEC, within and not in addition to the monthly rental rate. Also, the Library will be allowed to terminate the Lease Agreement, prior to its expiration, if(l) a new public library building is constructed or (2) the library relocates to another public facility. 8. Various other persons and organizations occupy space within the PEC, under either formal for informal arrangements. A list of all known users of the PEC is attached to this letter for your information. Your proposal must describe the terms and conditions under which such persons and organizations may continue to be accommodated by you at the PEC. Provide information regarding lease rates and lease terms, if applicable. 9. Describe in detail your plan for the use of the PEC, whether for your own uses or for leasing and tenant uses. 10. Attached is a form of the DDA that the EDA anticipates using for any transaction involving the sale of the PEC. Please review the DDA form and provide a statement of your acceptance of the DDA form, with any specifically enumerated changes that you request. Although the EDA will evaluate any requested changes, there is no assurance that any requested changes will be recommended to the Commission or approved by the Commission. II. The DDA contains a provision that the PEC is sold in an "as-is" condition with all existing and potential defects, including, without limitation, mechanical, structural and environmental deficiencies, whether known or unknown. The EDA makes no representations or warranties regarding the condition of the PEC. Each prospective purchaser must undertake its own physical, financial and environmental due diligence inspections and reviews regarding acquisition ofthe PEC. 12. The DDA also requires the owner to refrain from leasing all or any portion of the PEC to governmental or other tax -exempt organizations, if such leasing diminishes the amount of property taxes to be paid regarding the PEC. An "in lieu tax" provision is included in the DDA that requires the owner of the building to pay the full amount of the property taxes or an "in lieu tax" payment to the EDA, if all or any portion ofthe PEC becomes exempt from the payment of property taxes. As stated above, the EDA staff will review all proposals received by 5:00 PM on Thursday, November 1, 2001, with the intent that a staff recommendation will be submitted to the Commission for consideration at the continued public hearing on Monday, November 19, 2001, at 2:00 PM. All parties seeking to submit a proposal should understand that the California Community Redevelopment Law allows any person to submit an offer, or to increase an offering amount above a previously submitted offer, at the time of the public hearing, regardless of their participation or lack of participation in this proposal process. No other form of public bidding is required for the sale of this EDA property. Each proposal received by the EDA will become a public document and each proposal will be available for inspection by other parties submitting proposals and any member of the general public seeking to review or obtain a copy of any proposal. Should you have any further questions regarding this letter, the items required to be submitted in your proposal or the process to be followed, please contact the undersigned, either in writing or bye-mail at gvosdel@sbrda.org, at the EDA offices. Sincerely, Gary Van Osdel, Executive Director . RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) 2001 , DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND 5B2001:22036.2 TABLE OF CONTENTS Page Section 1.01. PUlpose of Agreement .............................................. 1 Section 1.02. The Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 1.03. Parties to the Agreement ............................................ 1 Section 1.04. Benefit to Project Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II DISPOSITION OF THE PROPERTY. . . . . . . . . . . . . . . . . . . . . . 2 Section 2.01. Purchase and Sale of the Property ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Section 2.02. Deposit and Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 2.03. Opening and Closing of Escrow ......................................3 Section 2.04. Escrow Instructions ................................................ 3 Section 2.05. Conveyance of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Section 2.06. Additional Closing Obligations of Agency .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.07. Closing Obligations of Purchaser .....................................5 Section 2.08. Inspections and Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.09. Due Diligence Investigation of the Property By the Purchaser . . . . . . . . . . . . . . . 7 Section 2.10. Due Diligence Approval Certificate ...................................8 Section 2.11. Books and Records ................................................ 8 Section 2.12. Condition of the Property-Purchaser's Release. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 2.13. Review and Approval of Condition of Title by the Purchaser. . . . . . . . . . . . . . . 10 Section 2.14. Survey......................................................... II Section 2.15. Extension of Due Diligence Period ...................................11 Section 2.16. Purchaser's Conditions Precedent to Close Escrow. . . . . . . . . . . . . . . . . . . . . . . 11 Section 2.17. The Agency's Conditions Precedent to Close of Escrow . . . . . . . . . . . . . . . . . . . 12 Section 2.18. Distribution of Documents and Purchase Price After Closing Date by Escrow Holder ................................................... 13 Section 2.19. Satisfaction of Conditions .......................................... 13 Section 2.20. [RESERVED -- NO TEXT] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 2.21. Prorations, Closing Costs, Possession. .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 13 Section 2.22. BREACH OF ARTICLE II BY THE AGENCY; LIQUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER .......14 Section 2.23. BREACH BY THE PURCHASER OF ARTICLE II; LIQUIDATED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY ....... 15 Section 2.24. Damage, Destruction and Condemnation .............................. 15 " ARTICLEffi USE AND MAINTENANCE OF THE PROPERTY ............... 16 582001 :22036.2 -i- Section 3.01. Use of the Property ............................................... 16 Section 3.02. MaintenanceoftheProperty ........................................ 16 Section 3.03. Taxes and Assessments .............................,.............. 17 Section 3.04. Transfer of Property to Exempt Person ................................ 17 Section 3.05. Obligation to Refrain from Discrimination. . . . . , . . . . . . . . . . . . . . . . . . . . . . . 18 Section 3.06. Fonn of Nondiscrimination and Nonsegregation Clauses. . . . . . . . . . . . . . . . . . 18 ARTICLE IV DEFAULTS. REMEDIES AND TERMINATION. . . . . . . . . . . . . . . . 19 Section 4.01. Defaults - General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 4.02. Legal Actions .................................................... 20 Section 4.03. Rights and Remedies are Cumulative ................................. 20 Section 4.04. Damages........................................................ 20 Section 4.05. Specific Perfonnance Prior to Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . 20 ARTICLE V GENERAL PROVISIONS .........................21 Section 5.01. Notices, Demands and Communications Between the Parties ..............21 Section 5.02. Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 5.03. Warranty Against Payment of Consideration for Agreement ...............21 Section 5.04. Nonliability of Agency Officials and Employees ........................ 22 Section 5.05. Enforced Delay: Extension of Time ofPerfonnance . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.06. Inspection of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.07. Approvals ....................................................... 23 Section 5.08. Real Estate Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 5.09. Indemnification .................................................. 23 Section 5.10. Release of Purchaser from Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 5.11. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 5.12. Effect ........................................................... 23 ARTICLE VI ENTIRE AGREEMENT. WAIVERS AND AMENDMENT . . . . . . . . . . . . 24 Section 6.01. Entire Agreement .................................................24 , EXHIBIT "An EXHIBIT "Bn _ LEGAL DESCRIPTION AGENCY GRANT DEED S82oo1:22036.2 -ii- 2001 DISPOSITION AND DEVELOPMENT AGREEMENT ( ) THIS 2001 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of -,2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency"), and (in either event, the "Purchaser"). The Agency and the Purchaser hereby agree as follows: Section 1.01. Pumose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan for the Northwest Project Area (the "Project Area") by providing for the purchase, use and maintenance by the Purchaser of that certain real property located at 1505 W. Highland Avenue, San Bernardino, California, and more particularly described in Exhibit .'A" hereto, improved by an office building. The land and building which are subject to this Agreement are referred to herein as the "Property". As of the date ofthis Agreement, the Property is owned by the Agency. The purchase, use and maintenance of the Property pursuant to this Agreement is in the vital and best interests ofthe City of San Bernardino (the "City") and the health, safety and welfare of its residents, and is in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the purchase, use and maintenance of the Property contemplated by this Agreement is consistent with the Redevelopment Plan for the ,. Project Area. Section 1.02. The Property. The Property consists of an approximately 28,650 square foot office building commonly known as the Public Enterprise Center ("PEC") situated on three acres ofland, more or less. The Purchaser intends to lease offices in the PEC to community- based non-profit and/or educational organizations. Section 1.03. Parties to the Agreement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law ofthe State of California (Health and Safety Code Section 33020, et seq.) The principal office of~e Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The principal office and mailing address ofthe Purchaser for purposes of this Agreement is (c) The City of San Bernardino is not a party to this Agreement. SB2ool:22036.2 I Section 1.04. Benefitto Proiect Area. The Agencyhas determined thatthe purchase, use and maintenance of the Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Propertv. Subject to all of the terms, conditions and provisions of this Agreement, and for the consideration of the Purchase Price as herein set forth, the Agency hereby agrees to sell via grant deed to the Purchaser merchantable lien free title to the Property and the Purchaser hereby agrees to purchase the Property. The purchase price which the Agency agrees to accept from the Purchaser and which the Purchaser agrees to pay to the Agency for the Property is Four Hundred Seventy Thousand Dollars ($470,000.00) in United States currency (the "Purchase Price"). For all purposes of this Agreement, the legal description of the Property attached hereto as Exhibit "A" shall be definitive and controlling as to the location, size or other aspect of the Property. Section 2.02. Deposit and Pavrnent of Purchase Price. (a) Within five (5) calendar days following the execution of this Agreement by both parties, the Purchaser shall deliver to the Escrow Holder (as hereinafter defined) the sum of Five Thousand Dollars ($5,000.00) (the "Deposit"). Upon receipt of the Deposit and a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened, as provided in Section 2.03. The Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Purchaser. At the Close of Escrow (as hereinafter defined), the Deposit shall be applied as a credit to the Purchase Price. ' (b) Pavrnent of Balance of Purchase Price. The Purchase Price, less the Deposit, shall be tendered by the Purchaser to the Escrow Holder on the Closing Date (as hereinafter defined) for disbursement to the Agency at the Close of Escrow in cash or immediately available funds. .. (c) The Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Purchaser in the event that: (i) the Agency or the Purchaser terminates this Agreement pursuant to Section 2.13(a); or SB2oo1 :22036.2 2 (ii) the Purchaser does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(b) and this Agreement is terminated; or (iii) the Purchaser's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4) or (5) are not satisfied (unless satisfaction has been waived by the Purchaser) and this Agreement is terminated; or (iv) the Property is materiaIly damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with respect to the Property prior to the Close of Escrow, and the Purchaser elects to terminate this Agreement pursuant to Section 2.24. Section 2.03. Opening and Closing of Escrow. (a) The transfer and sale of the Property shaIl take place through an Escrow (the "Escrow") to be administered by First American Title Company Escrow Department or such other escrow or title insurance company mutuaIly agreed upon by the Purchaser and the Agency (the "Escrow Holder"). The Escrow shaIl be deemed open ("Opening of Escrow") upon the receipt by the Escrow Holder of a copy ofthis Agreement fully executed by both parties hereto and the Deposit. The Escrow Holder shaIl promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Purchaser has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within thirty (30) days from the Opening of Escrow for any reason, then in such event this Agreement shaIl terminate upon written notice to the Escrow Holder from either the Agency or the Purchaser, whereupon the Deposit shall be returned by the Escrow Holder to the Purchaser (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. ' (c) Provided that the Purchaser has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the Escrow shall occur within fifteen (IS) days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed (as hereinafter defined) for the Property to be recorded and the policy of title insurance for the Property to be delivered to the Purchaser. SB2001 :22036.2 3 Section 2.04. Escrow Instructions. This Agreement shall also constitute the escrow instructions of the parties to the Escrow Holder. Additionally, the Purchaser and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Purchaser shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder and the Escrow Holder shall forthwith return all monies (as provided in this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "B" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free right, title and interest in the Property to the Purchaser. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of the Recorder of the County of San Bernardino, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties, as set forth herein, and can obtain for the Purchaser an ALT A policy oftitle insurance ("Title Policy") issued by First American Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Purchase Price, together with such endorsements to the policy as may be reasonably requested by the Purchaser, insuring that the fee title to the Property vested in the Purchaser is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: (1) (2) (3) (4) (5) (6) (7) SB2001 :22036.2 non-delinquent real property taxes; non-monetary title exceptions approved by the Purchaser pursuant to Section 2.13 below; , applicable provisions of the parcel map/subdivision map for the Property; the effect of the Redevelopment Plan for the Project Area; the effect of any conditions imposed by the City in cormection with the proposed use of the Property; the provision of the Agency Grant Deed; the applicable provisions of this Agreement; and 4 (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agencv. On or before 12:00 noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Purchaser) copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) all soils, seismic, geologic, drainage, and envirorunental reports, and surveys, with respect to the Property, if any, which the Agency has in its possession and/or control to the extent that originals of such items have not been delivered previously by the Agency to the Purchaser pursuant to Section 2.08 below; (3) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (4) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (5) any other documents, instruments, funds and records required to be delivered to the Purchaser under the terms of this Agreement which have not been previously delivered. Section 2.07. Closing Obligations of Purchaser. On or before 12:00 noon on the business day preceding the Closing Date, the Purchaser shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance ofthe Agency Grant Deed, duly executed and acknowledged by the Purchaser. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Purchaser. (3) evidence of the existence, organization and authority ofthe Purchaser and of the authority of persons executing documents on behalf of the Purchaser reasonably satisfactory to the Escrow Holder and the Title Company. S82oo1:22036.2 5 (4) evidence of the ability of the Purchaser to obtain any required permits, licenses or approvals in connection with the Purchaser's use of the Property. (5) any other documents, instruments or funds required to be delivered by the Purchaser under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close Escrow which have not previously been delivered. Section 2.08. Inspections and Review. (a) Due Diligence Items. Within five (5) days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Purchaser: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys (including, but not limited to, any Property Environmental Site Assessments), surveys, relating to the Property ifany, in the possession or control of the Agency; (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control; (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency; (4) a copy of the Redevelopment Plan for the Project Area. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to .. occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRAn) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water 5B2oo1:22036.2 6 c. .. SB2001 :22036.2 Pollution Control Act ("FWPCA") [33 USC Section 1251 et eq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law , statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, 7 (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, or (6) a radioactive material. Section 2.09. Due Diligence Investigation of the Prooertv Bv the Purchaser. (a) Within thirty (30) days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Section 2.15, the Purchaser shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Purchaser and to obtain such approvals from the City in connection with the Purchaser's use of the Property, as the Purchaser may require in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permit the Purchaser, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Buyer deems prudent with respect to the physical condition ofthe Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on the Property may be conducted by the Purchaser and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Purchaser on the Property. Upon the Agency's request, the Purchaser will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Purchaser shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Property. (e) The Agency shall cooperate fully to allow the Purchaser to complete such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Purchaser during such investigations and/or inspections. The Pu~chaser shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation. Section 2.10. Due Diligence Aooroval Certificate. Within thirty (30) days following the Opening of Escrow, the Purchaser shall complete its Due Diligence investigation of the Property (subject to the extensions of time set forth in Section 2.15) and deliver a due diligence S82001:22036.2 8 approval certificate signed by the Purchaser (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Purchaser accepts the condition of the Property or; (ii) contains a description of the matters or exceptions relating to the condition ofthe Property which the Purchaser was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Purchaser's Due Diligence investigations during the Due Diligence Period, the Purchaser shall be afforded full opportunity by the Agency to examine all books and records in the possession of the Agency and/or the Agency's agents or employees, which relate to the Property including the reasonable right to make copies of such books and records at the expense of the Purchaser. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Purchaser with obtaining access to information relating to the Property which is in the possession or control of the Agency. Section 2.12. Condition of the Prooertv-Purchaser's Re'jease. The Purchaser acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period. Upon issuance to the Escrow Holder of a Due Diligence Approval Certificate under Section 2.10 which accepts the condition of the Property, the Purchaser shall, thereafter, accept delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Purchaser further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Purchaser shall have conducted and completed (or waived the completion) of all of its independent investigation of the condition of the Property which the Purchaser may believe to be indicated. The Purchaser hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Purchaser is not relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Purchaser with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City, the Agency makes no representation or warranty with respect to the accuracy, completeness, methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Purchaser, on behalf of itself and its successors and assigns, waives and releases the Agency and its successors and assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether 582001:22036.2 9 direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the use of the Property as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Purchaser expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, if known to such creditor, would materially affect a settlement. By execution of this Agreement, the Purchaser acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: , "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The undersigned, being aware of this code section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Purchaser: ' The provisions ofthis Section 2.12 shall survive the Close of Escrow, Section 2.13. Review and Aporoval of Condition of Title bv the Purchaser. (a) Within fifteen (15) days following the Opening of Escrow, the Agency shall cause to be delivered to the Purchaser a preliminary title report or title commitment for an AL T A policy of title insurance issued by the Title Company, describing the state ofthe title ofthe Property, together with copies of all exceptions specified therein and with all easements plotted, but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Purchaser shall notify the Agency in writing of any objections the Purchaser may have to the title exceptions contained in the Preliminary Title Report ("Purchaser's Title Objection Notice") prior to the expiration of the Due S8200] :22036.2 10 Diligence Period. The Agency shall have a period of five (5) days after receipt of the Purchaser's Title Objection Notice in which to deliver written notice to the Purchaser ("Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. Ifthe Agency notifies the Purchaser ofits election to terminate Escrow rather than remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within live (5) days after the Purchaser's receipt of the Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall take title to the Property at the Close of Escrow subject to such objectionable title items. (b) The Agency hereby covenants not to place any liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Purchaser following execution ofthis Agreement by the Agency. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions (including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined), the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Purchaser to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten (10) days from receipt of the amendment or supplement) and Escrow shall be deemed extended by the amount of time necessary to allow such review and approval in the time and manner set forth above. Section 2.14. Survev. The Purchaser may at its sole cost and separate expense obtain a survey ofthe Property prepared by a land surveyor duly licensed by the State of California and in compliance with ALTNASCM standards (the "Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without the addition of further exceptions, unless the same are acceptable to the Purchaser in its sole and absolute discretion. The Purchaser shall have until the end of the Due Diligence Period to complete and examine the Survey and to notifY the Agency in writing of any objections the Purchaser has to the Survey ("Purchaser's Survey Objection Notice"). The Agency shall have a period of five (5) days afterreceipt of the Purchaser's Survey Objection Notice in which to deliver written notice to the Purchaser ("Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Purchaser of its intention not to remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within ten (10) days after the Purchaser's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Close of Escrow, the Survey shall be recertified to the Purchaser, Title Company and the Purchaser's lender, if any. S82OO] :22036.2 11 Section 2.15. Extension of Due Dilieence Period. (a) In the event the Agency fails to provide the Purchaser with documents or other infonnation required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence Period regarding such infonnation shall be extended by one (1) day for each day of the delay by the Agency to pennit the Purchaser to perfonn an adequate due diligence review of such documents or infonnation (but shall not exceed a total of sixty (60) days). The Purchaser will use its best efforts to notifY the Agency of any documents or infonnation the Agency has failed to deliver to the Purchaser within the time periods provided in Sections 2.08 and 2.11. (b) In the event that the Executive Director makes a finding ihat the Purchaser has undertaken substantial work to complete its due diligence in connection with the Property, the Executive Director shall upon the written request of the Purchaser authorize an extension ofthe Due Diligence Period for up to an additional thirty (30) days. Section 2.16. Purchaser's Conditions Precedent to Close Escrow. The Purchaser's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (J) The Agency shall not have defaulted on any material tenn of this Agreement to be perfonned by the Agency, hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (I) only, a representation that is limited to the Agency's knowledge or notice shall be false, if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Purchaser's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; (3) the Purchaser's approval of the contents of all due diligence items, and the other investigations of the Property made by the Purchaser and/or its designees pursuant to Sections 2.08 and 2.09 herein, on or before the expiration of the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15. The Purchaser shall be deemed to have disapproved such due diligence items unless they are approved on or before 5 :00 p.m. on the day ending the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15 herein; and it, (4) the Title Company has committed to issue the Title Policy, in favor of the Purchaser in the fonn described in Section 2.05. SB2ool:22036.2 12 Section 2.17. The Agencys Conditions Precedent to Close of Escrow. The Agency's obligation to convey the Property to the Purchaser shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) the Purchaser has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in Section 2.10 of this Agreement; (2) the Purchaser has accepted the condition of title of the Property on or before the date set forth in Section 2.13; (3) the Purchaser shall not be in default of any material term of this Agreement to be performed by the Purchaser hereunder and each representation and warranty of the Purchaser made in this Agreement shall remain true and correct; and (4) the Purchaser shall have satisfied (or the Agency shall have waived satisfaction) of each of the conditions precedent set forth in Section 2.16 and the Escrow shall be in a condition to close within forty-five (45) days following the Opening of Escrow (subject to Section 2.15, if applicable). Section 2.18. Distribution of Documents and Purchase Price After Closing Date bv Escrow Holder. The Escrow Holder shall deliver to the Purchaser, within three (3) business days following the Closing Date, a conformed copy ofthe Agency Grant Deed, as recorded, and the policy of title insurance issued by the Title Company in favor ofthe Purchaser. The Escrow Holder shall deliver to the Agency the Purchase Price, less sums paid to discharge any liens, less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Putchaser or by the Agency, each party shall use its best efforts, in good faith, and at its own cost, to satisfy such conditions. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. ;. Eitherparty may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] SB2001:22036.2 13 Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty-five (365) day year. The Agency is responsible for (i) all taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. upon the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period" refers to the fiscal year ofthe applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which the Close of Escrow occurs do not become available until after the Close of Escrow, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Purchaser upon demand for any real or personal property taxes payable following the Close of Escrow applicable to any period of time prior to the Close of Escrow as a result of any change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Purchaser shall be entitled to exclusive possession of the Property immediately upon the Close of Escrow. (c) Subsequent to the Close of Escrow, the Purchaser shall pay, prior to delinquency, all real property taxes and assessments assessed and levied upon or against the Property. Nothing herein contained shall be deemed to prohibit the Purchaser from contesting the validity or amounts of any tax or assessment, nor to limit the remedies available to the Purchaser in respect thereto. (d) The Agency shall pay the cost of the premium for a CLTA policy of title insurance on the Property in the amount of the Purchase Price, together with all title charges (including endorsements reasonably requestedbythe Purchaser to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above). The Agency shall pay one-half (\I,) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay the additional cost of the premium for an ALTA policy of title insurance on the Property in the amount of the Purchase Price, together with all title changes and requested AL T A survey policy endorsements (to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above), plus the cost of recording the Agency Grant Deed, together with one- half (\I,) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Purchaser. SB2001 :22036.2 14 Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the proportion of one-half (Yz) payable by each party. No later than three (3) business days prior to the Close of Escrow, the Escrow Holder shall prepare a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property and prorations made pursuant to this Agreement for approval by the Purchaser and the Agency. The Purchaser and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. BREACH OF ARTICLE II BY THE AGENCY: LIOUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER. IN THE EVENT THAT THE AGENCY COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE PURCHASER WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERtAIN WHAT THE PURCHASER'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE AGENCY, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE PURCHASER IN THE EVENT OF SUCH DEFAULT BY THE AGENCY UPON THE TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE PURCHASER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE AGENCY. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE PURCHASER WAIVES ANY AND ALL RIGHTS WHICH THE PURCHASER OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE PURCHASER AND THE AGENCY ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Agency Initials of Purchaser Section 2.23. BREACH BY THE PURCHASER OF ARTICLE II: LIOUIDATED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY. IN THE EVENT THAT THE PURCHASER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE 5B2oo1 :22036.2 15 AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE PURCHASER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE PURCHASER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW ORIN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE PURCHASER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HA VEHAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE PURCHASER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Purchaser Initials of Agency Section 2.24. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession ofthe Property to Purchaser at the Close of Escrow, the risk ofloss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty, prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to Purchaser promptly after the occurrence of the casualty. Thereafter the Purchaser can elect to either: (i) accept the Property in its damaged condition or (ii) the Purchaser may terminate this Agreement and recover the Deposit, as set forth in Section 2.02. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency that the Property suffered material damages. In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or' similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereofto Purchaser, and Purchaser shall have the option either: (i) to elect not to acquire the Property, terminate the Agreement and recover the Deposit, as set forth in Section 2.02; or (ii) the Purchaser may complete the acquisition of the Property under this Agreement, in which case the Purchaser shall be entitled to all of the proceeds paid in compensation for such taking; provided, however, that the Agency agrees that it shall not se'tle or compromise the proceedings before the Close of Escrow without the Purchaser's prior written consent, which consent will not be unreasonably withheld or delayed. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) ofthe preceding sentence within thirty (30) days of its receipt of notice from the Agency of commencement of eminent domain proceedings against the Property. 5B2oo1:22036.2 16 ARTICLE ill USE AND MAINTENANCE OF THE PROPERTY Section 3.01. Use of the Prooertv. The Purchaser covenants and agrees for itself, its successors and assigns that the Property shall be used in conformity with all applicable laws. Section 3.02. Maintenance of the Prooertv. The Purchaser for itself, its successors and assigns hereby covenants and agrees that: (a) The areas of the Property which are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time within twenty (20) years following the date of recordation of the Agency Grant Deed there is an occurrence ofan adverse condition on any area of the Property which is subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notify the Purchaser in writing of the Maintenance Deficiency and give the Purchaser thirty (30) days from receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Purchaser fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereof to the Purchaser ten (10) days prior to the scheduled date of such public hearing in order to verify whether a Maintenance Deficiency exists and whether the Purchaser has failed to comply with the provisions of this Section 3.02(a). If upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, described above, thereafter the Agency shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or in equity which the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Property authorized by this Section 3.02(a) shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Purchaser, the Agency shall have the right to enforce the lien in the manner as provided in Section 3.02(c). ,~ (b) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of the building or any other structure on the Property which is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Purchaser by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within 72 hours following the time of such application, the Agency shall have the right to enter the Property and remove the graffiti without notice to the Purchaser. Any sum expended by the Agency for the removal of graffiti from the Property authorized by this Section 3.02(b) in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) 582001:22036.2 17 days after written demand to the Purchaser by the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 3.02(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 3.02 expressly include the power to establish and enforce a lien or other encumbrance against the Property, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Property to the maintenance standard required under Section 3.02(a) or Section 3.02(b), including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. The provisions of this Section 3.02 shall be a covenant running with the land for a tenn of twenty (20) years following the date of recordation of the Agency Grant Deed, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 3.02 shall be deemed to preclude the Purchaser from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City. Section 3.03. Transfer of Property to Exempt Person or Grant of Exemption from PaYment of Propertv Taxes. The Purchaser covenants and agrees that (i) in the event that the Property, or any portion thereof, shall within twenty (20) years from the date of recordation ofthe Agency Grant Deed be conveyed or transferred or sold by the Purchaser, its successors or assigns, to any entity or party that is partially or wholly exempt from the payment of ad valorem property taxes pertinent to the Property or any portion of the Property or (ii) in the event the Purchaser applies for and receives from the San Bernardino County Assessor an exemption from the payment of ad . valorem property taxes pertinent to the Property, either in whole or in part, within twenty (20) years from the date of recordation of the Agency Grant Deed, the Purchaser, its heirs or assigns shall pay the Agency a fee in lieu of payment of such taxes each year in an amount which is detennined by the Agency to be one percent (1.0%) of the full cash value of the Property, or portion thereof, as may be subject to such exemption from payments of ad valorem property taxes. Such detennination of "full cash value" for such in-lieu payment pUIposes under this Section 3.04 shall be established by the Agency each year, if necessary, by reference to the as valorem property tax valuation principles and practices as generally applicable to a county property tax assessor under Section 2 of Article XIIIA of the California Constitution. In the event that the Agency may hereafter detennine that an amount is payable by the Purchaser to the Agency as an in-lieu payment under this Section 3.04 in any tax year, then such amount shall be paid to the Agency for that tax year within ninety (90) days following transmittal of notice of invoice for payment of the in-lieu amount by the Agency to the Purphaser. The provisions of this covenant shall be referenced in the Agency Grant Deed. Section 3.04. Obligation to Refrain from Discrimination. The Purchaser covenants and agrees for itself, its successors, its assigns and every successor-in-interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Purchaser, itself or any person claiming under or through it, establish or pennit any such practice or S82OO1 :22036.2 18 practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The covenant of this Section 3.04 shall run with the land for the time period set forth in the Agency Grant Deed. Section 3.05. Form of Nondiscrimination and Nonseeregation Clauses. The Purchaser covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to the Property, or any part thereof, that the Purchaser, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (I) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (2) ... (3) S82ool:22036.2 In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment orthe premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sublessee, subtenants, or vendees in the premises herein leased." In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account ofrace, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or 19 occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 3.05 shall run with the land in perpetuity. ARTICLE IV DEFAULTS. REMEDIES AND TERMINATION Section 4.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 5.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice from the injured party specifying such default, and shall diligently and continuously prosecute such cure, correction orremedyto completion (and where anytime limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of their rights and/or remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 4.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the State of California in and for the County of San Bernardino in any other appropriate court within said County, or in the Federal District Court for the Central District of California. 582001:22036.2 20 (b) The laws of the State of California shall govern the interpretation and enforcement ofthis Agreement. (c) In the event that any legal action is commenced by the Purchaser against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair of the Community Development Commission, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Purchaser, service of process on the Purchaser shall be made by personal service on Richard Schindler, a member of the Purchaser, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 4.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the Close of Escrow are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 4.04. Dama~es. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of such notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for default), after the service of written notice of such a default. In the event that a default relates to a matter arising after the Close of Escrow, the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of the Agreement. Section 4.05. Soecific Performance Prior to Close of Escrow. Prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts set forth in Article II of this Agreement. ARTICLE V GENERAL PROVISIONS Section 5.01. Notices. Demands and Communications Between the Parties. 582001 :22036.2 21 (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Purchaser, as applicable, as designated in Section 1.04(a) and Section 1.04(b) hereof. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail, as heretofore provided. Either party may change its address for notices under this Agreement by giving notice to the other party, specifying that the purpose of the notice is to change the party's address. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Purchaser: . Attention: to the Agency: FAX: (909) 384-5135 Attention: Ann Harris with copy to: Lewis, D' Amato, Brisbois & Bisgaard LLP FAX: (909) 387-1138 Attention: Diane R. Holman, Esq. Section 5.02. Conflict ofInterest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Property shall participate in any decision relating to the Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 5.03. Warranty Against Pavment of Consideration for Agreement. The Purchaser warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered ne::essary by the Purchaser. Section 5.04. Nonliabilitvof AgencvOfficials and Emplovees. No member, official or employee of the Agency shall be personally liable to the Purchaser, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Purchaser or to its successor, or on any obligations under the tenns of this Agreement, except for gross negligence or willful acts of such member, officer or employee. SB2001:22036.2 22 Section 5.05. Enforced Delav: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shaH not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shaH not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension of time for any such force majeure cause shaH be for the period of the enforced delay and shaH commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of tl}em which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 5.06. Aporovals. (a) Approvals required of the Agency or the Purchaser, or any officers, agents or employees of either the Agency or the PurchaSer, shaH not be unreasonably withheld and approval or disapproval shaH be given within the time set forth in the Schedule of Performance or, ifno time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 5.07. Real Estate Commissions. The Agency shaH not be liable for any real estate commissions, brokerage fees or finder fees which may arise from or be related to this Agreement. The Purchaser shaH pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals. 582001:22036.2 23 Section 5.08. Indemnification. The Purchaser agrees to indemnify and hold the City and the Agency, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Purchaser in performing its obligations hereunder. The Agency agrees to indemnity and hold the Purchaser and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. Section 5.09. Release of Purchaser from Liabilitv. Notwithstanding any provision herein to the contrary, the Purchaser shall be relieved of any and all liability for the obligations of the Purchaser hereunder with regard to the Property on and as of that date which is the five-year anniversary of the Close of Escrow, other than any covenants and obligations provided by the grant deed by which the Property is conveyed to the Purchaser hereunder. Section 5.10. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to Section 4.02 hereof, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Purchaser and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section 4.02 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution of disputes as set forth in Section 4.02 hereof, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of this Section. Section 5.11. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. ARTICLE VI ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 6.01. Entire Al!reement. (a) This Agreement shall be executed in four ( 4) duplicate originals each ofwhich is 4~ed to be an original. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Property and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this S82ool:22036.2 24 Agreement shall continue in full force and effect before and after such conveyance until that date which is the five-year anniversary of the Close of Escrow, (d) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Purchaser. c' .. 5B2oo1 :22036.2 25 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Judith Valles Chair of the Community Development Commission Date: By: Gary Van Osdel Executive Director APPROVED AS TO FORM: Agency Special Counsel PURCHASER Date: By: Member Date: By: Member IAll Signatures Must Be Notarized] SB2001 :22036.2 26 c r '- ,,-. I '- 582001 :22036.2 . EXHffiIT "A" LEGAL DESCRIPTION OF THE PROPERTY Exh. "A" - 1 c c c EXHffiIT "B" AGENCY GRANT DEED 5B2oo1:22036,2 Exh. "B" - 1 LOS ANGELES OFfiCE 1200 WILSHIRE BOULEVARD LOS ANGELES, CALIFORNIA 90017.1908 (213) 580.7000 fAX, (213l 580.1100 GILBERT, KELLY, CROWLEY & JENNETT LLP LAWYERS 3801 UNIVERSITY AVENUE, SUITE 700 RIVERSIDE, CALIFORNIA 92501.3245 (909) 276.4000 FAX: (909) 276.4100 W. 1. GilBERT, JR. 1906-1972 JOHN O. ST. PIERRE 1930-1981 ORANGE OFFICE 3JJ CITY BOULEVARD WEST. SUITE 1600 ORANGE. CALIFORNIA 92868 (7141541.5000 FAX: (714) 541-0670 JAMES B. CROWLEY 1930-1998 WRITER'S DIRECT NUMBER, SAN DIEGO OFFICE 750"S" STREET, SUITE 2600 SAN DIEGO. CALIFORNIA 92101 (6191687.3000 fAX: 16191 687-3100 November I, 2001 (909) 276-4005 PLEASE REFER TO FILE: 97830-00001 LEL OOCUMENT 10: [Ltr.CDC] Community Development Commission City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 < Re: Public Enterprise Center YSP's Bid for $505,000.00 Honorable Commission: On behalfofYSP, LLC, and its principals Clifford Hackney and Larry Odum, I am submitting the following as a formal bid to purchase the Public Enterprise Center, located at 1505 West Highland Venue, San Bernardino, California ("PEC"). This bid is subject to the conditions and clarifications set forth below. YSP, LLC further reserves the right to amend this bid, should there be such a need at the public hearing of the San Bernardino Community Development Commission ("Commission") presently scheduled for November 19, 2001, at 2:00 p.m. 1. Purchase Price. YSP, LLC hereby offers to pay the total sum of $505,000.00 for the PEC. This sum is to be paid in cash at the close of escrow. Included in this purchase price is the $5,000.00 good faith deposit mentioned below. 2. Financing. The total of the purchase price shall be financed through Imperial Home Mortgage, ofEncino, California ("Lender"). At this time, YSP, LLC does not intend to enter into any equity participation with any other entity. The Lender has continuously provided a commitment letter, a copy of which has previously been given to Economic Development Agency of The City of San Bernardino ("EDA"). YSP has gone as far as to bring Mr. Morcel Johnson, a representative of the Lender to meet with City officials. A current commitment letter is expected prior to November 19, 2001. A reason for this delay are the recent events of the Commission's public hearing of September 17,2001. An updated November 1,2001 Page 2 appraisal, as required by the lender is in process. Just as the agency requires a commitment letter issued less than sixty days prior to the date of submission of our proposal, the lender is requiring updated information on the current value of the PEC. 3. Deposit. Enclosed find a cashier's check in the amount of$5,000.00, payable to the EDA. It is understood that said check shall be held by the EDA, until final award is made by the Commission. 4. Operating Costs. Since the purchase price will be paid in full at the time escrow closes, operating capital is not a relevant issue. However, it is expected that said sources will include, but will not be limited to rental income from portions of PEC to existing and future tenants. 5. Propertv Management. As stated above, since the City will be paid in full, these issues of managing the property are irrelevant. However, it is anticipated that YSP will manage the building. When needed, YSP will contract with local business to perform the day to day maintenance. 6. Monthlv Expenses. YSP hereby acknowledges receipt and its understanding of the 12-month summary of expenses and further acknowledges that the EDA has been operating the PEC at a deficit. 7. Public Librarv. YSP is aware that a branch of San Bernardino City Library ("library") is located in a portion of the PEC. YSP is also aware that the City and the library are very interested in keeping said library at its present locations and wish to enter into a four (4) year lease to guarantee the space. YSP will agree to lease said portion of the PEC to the City and the library, at a reasonable rate per square foot. YSP is willing to accommodate the needs ofthe library because YSP's principals also believe that having the library at the PEC will benefit the children who will attend classes at the PEC. YSP is willing to negotiate a termination clause in the event the library finds a new location. Allowing the library to terminate the lease agreement without some type of consideration would be fiscally irresponsible and therefore, ifthe library will stay at the PEC, the lease should have a negotiated termination clause. , , November 1,2001 Page 3 8. Other Existing Tenants. YSP's principals have discussed leasing arrangements with some of the tenants at the PEC and it has been established that all tenants will be obligated to pay rent if they wish to remain at the PEC. Another major occupant ofthe PEC is an office of the City's Parks and Recreation Department. YSP will also allow said office to remain there until the City decides to relocate said office. Rent for this portion of the space will also be at a reasonable rate, similar to the library's and/or other tenants. 9. Expected Use ofPEC" YSP expects to eventually need the entire building. In the meantime, YSP intends to lease portions ofthe PEe to existing and/or new tenants. YSP also plans to use the remainder portion of the building to house educational projects in collaboration with the SBUSD and other learning institutions. Please refer back to the original proposal submitted to the EDA, which included YSP's mission, vision, business plan and architectural drawings for improvements to the existing structures. A state of the arts recording studio. The studio is expected to promote musical education to our local youth, to promote local talent, and to create job training for entertainment related careers. YSP believes the youth of San Bernardino do not have the fundamental skills needed to pass the standardized test required by the State and recent test scores support this fact. The present test scores also indicate that the school system is failing more than half of the student because they can't pass the test. The problem will only escalate when the students have to take an exit exam. Our music program will help the youth with the fundamentals needed to improve in schooL It will also help form the foundation needed for them to become solid citizens by improving their behavior and attitude. The adult life of every student is enriched by the skills, knowledge and habits acquired in the study of music. The programs will create jobs and opportunities for the youth and give them valuable experience in the lucrative entertainment industry. The upscale building improvements will also add value to the local community. 10. Disposition and Development Al!reement. No significant changes. However, there is a need to clarifY the following: .. a) Property Taxes. YSP is willing to pay property taxes for as long as it owns the building. It will also agree to pay taxes based on the purchase price, until improvements are made and then YSP will pay taxes accordingly. b) Use and Maintenance. Pages 17-18 ofDDA mention covenants running with the land that will linger for 20 years. Unless there is a specific legal requirement to include this language, YSP will not agree to these terms. It is understood that, as an owner, YSP will be responsible for compliance with all local ordinances regarding blithe and graffiti. November I, 2001 Page 4 11. Condition ofPEC. YSP agrees to purchase the PEC "as is" and only subject to the conditions set by the DDA prior to the close of escrow. 12. Tax Exempt Status. YSP is a for profit entity, and it does not expect to request that any portion ofthe PEC become exempt from property taxes. YSP acknowledges that, as owner, YSP will be obligated to pay all property taxes on the PEC once it receives title. The above is also intended as a response to the issues raised by the EDA's letter dated September 21, 2001. While some issues are completely irrelevant, in some instances, YSP chose to provide information in order to not appear obtrusive and/or uncooperative. If the EDA has any questions and/or comments to this proposal, please inquire and/or respond to the undersigned. Again, it is YSP's intentions to fully cooperate and provide the necessary information for the Commission to make an informed decision. Very truly yours, GILBERT, KELL CROWLEY & JENNETT LLP LEL:cec cc: YSP San Bernardino Mayor City Council New Hope Missionary Baptist Church PliBLIC ENTERPRISE CENTER PROPOSAL Bm To Redevelopment Agency City of San Bernardino Economic Development Agency For Submission November 1st 2001 PUBLIC ENTERPRISE CENTER PROPOSAL Bm Acquisition / EDA ProDosal Bid New Hope Missionary Baptist Church respectfully submits its intent to purchase the Public Enterprise Building property located at 1505 West Highland Avenue, San Bernardino, CA 92411. Our formal proposal bid is for $555,000 dollars. New Hope Missionary Baptist Church is a fiscally solvent 501(C) 3 public benefit corporation whose mission and goals are to offer a myriad of services to meet the needs of our community. We have earned reputable honor as a fiscally astute church institution, with sound management and have long implemented for over 80 years faith based initiatives and community service programs. Under the leadership of our Pastor Dr. Robert Fairley, we provide essential community service, as a brokering agent in meeting everyday basic human needs. We have enjoyed tremendous community support; legislators, hospital administrators, and area clergy, salute our efforts to secure this facility. We are members of numerous county, state, and Westside community organizations. In support of our proposal we have scheduled meetings with IECAAC (Inland Empire Concerned African American Clergy) of which we are meeting host church and active members, and the San Bernardino NAACP Branch, San Bernardino City North West - PAC, Peoples Choice, all of which are current building tenants. We have received their blessings and await the opportunity to further strengthen our collaborative partnership relationships. HistoricallBackl!round New Hope Missionary Baptist Church was established in 1911 and has been a beacon and light in the San Bernardino Community ever since. Our annual budget exceeds 1.2 million annually and is host to 26 Auxiliary department ministries that meet the needs of the congregation and community. Annually providing over $150,000 dollars with its benevolent and community programs servicing families and persons with food, shelter, and financial assistance to meet urgent immediate life crises. The needs of children and families are paramount to our purpose and mission. Our twenty five year old annual summer youth employment program has reached a budget where by we were able to successfully employ 85 local youth at least minimal wage each summer. Child Care is available for parents who involve themselves in church program activities. Our daily community outreach programs include public health education programs such as Precious Babies Black Infant Health Project, Youth Corporate Officers Tobacco New Hope Missionary Baptist Cburcb I PUBLIC ENTERPRISE CENTER PROPOSAL BID Prevention Collaborative in conjunction with the African American Health Consortium Sweetheart Project Heart disease and exercise program. New Hope also supports numerous community health fairs sponsored by the Nurses Auxiliaries and the Desert Sierra Breast Cancer Awareness program, American Cancer Society, the Black Nurses Association and Prostate and Diabetes health events. Our Avant Garde ministry provides elderly and aged services, which includes recreational activities and Mission Department visitatiorL Our most recent program developments include a mental health substance abuse prevention program, which fulfills a substantial local need. God has richly blessed us and we are able to provide a wide variety ofprograrns. These services are offered without regard to person's nationality, ethnicity or faith. These outstanding New Hope Ministries will join the existing Public Enterprise Center (PEe) community services currently engaged at meeting the needs of this Westside community. Fiscal Capability We are an autonomous, self-governed organization whose tripartite governing structure consists of Deacon and Deaconess Board, Trustee Board and the Pastor. The Trustee Board has fiduciary responsibility. The church daily management and fiscal operations are conducted under the leadership of the Chairman of the Trustee Board and its respective commissioned work groups. Highlighted among the Trustee 10-work groups are various committees charged with implementation of church routine functions are the Budget and Financial Committee, The Property and Operations, Security, Personnel, Planning Committee and the Grants and Social Outreach, Insurance and Endowments. These committees in conjunction with the Pastor and church membership effectively govern church policy implementation. Our church annually assesses the needs of the community and diligently strives to meet whatever needs analysis warrants. We desire to service the spiritual, social and sustenance needs of individuals that will equip persons to, in turn, provide service to others. New Hope Missionary Baptist Church, in its self-governing operations, implements daily management through the board of deacons and deaconess, and the Board of Trustees. The governing board (Trustee Board) acting as custodian of the tithes and offering handles, all transactions and disbursement of funds. The building and grounds, planning, personnel and finance committees ensure austere responsibility for church managerial functions. Any business item agreed upon by the joint board has to be presented to the church body and voted on for final approval. Financial balance sheet and all check expenditures are shared with the congregation on a quarterly basis. New Hope operates on a budget that exceeds one million dollars annually. Our annual budget routinely includes a line item for maintenance and sustainability. Our monthly collection proceeds, provide excess and the rate of growth of church membership will allow sufficient leverage to comfortably proceed in this current endeavor. New Hope Missionary Baptist Cburcb 2 PUBLIC ENTERPRISE CENTER PROPOSAL BID Our church membership exceeds 5,000 Inland Empire residents and we are experiencing tremendous growth averaging thirty new members per month. The annual church budget is $1,260,000.00 dollars we can comfortably embrace an acquisition purchase and are capable of sustainability. We plan and project for future possibilities under the leadership of our Budget Finance Director and have an impressive investment portfolio. Our credit rating is outstanding and we will retire our present facility mortgage significantly early because of our abundance, astute management, and congregation prosperity. Inclusive in this proposal is an attachment letter ofbank authorization for a letter of credit to support this acquisition. Also attached is the requested $5,000.00 deposit check requested by EDA (Economic Development Agency), to verity genuine intent to secure the property. Facilitv Utilization Plan New Hope Missionary Baptist church envisions purchase and acquisition of the building for expansion and further development of programs to enhance community development. Upon immediate acquisition renovation and refurbishing of the structure will take place to restore it to its original splendor and aesthetic beauty. Blight elimination and Westside beautification are primary desires for The Public Enterprise Center. This building in addition to our New Hope edifice has always been viewed as visual assets for Westside community residents. Educational goals will be achieved through our student academy, college courses and cultural arts foundation, childcare and parenting classes. As well as seminars, forums, business development, vocational training though SBET A and TAD, (Transitional Assistance Department), job training programs and computer literacy development. Counseling mental health and substance abuse support groups are integral for our mission to assist in the rebuilding of families. We will host community social activities and desire to schedule banquet events such as our annual Scholarship banquet, wedding receptions, holiday celebrations and theatrical productions. In examination of the building schematic floor plan we have determined that in cooperation with tenants this facility will more than adequately meet our needs. In keeping with New Hope's mission and purpose it is our intent to provide at reasonable market rate continued space availability to tenants. A "good faith" effort will be extended ,. in negotiating all new lease agreements upon immediate acquisition of the property. All tenants will immediately be given the opportunity to sign a new lease. In most respects because of New Hope's treasured and long standing community commitment we have long enjoyed good relationships with a majority of the tenants and in many cases have supported or corroborated in the implementation many of their community projects. We are prepared to take corrective action and have legal counsel to implement appropriate eviction procedures. New Hope Missionary Baptist Cbnrrb 3 PUBLIC ENTERPRISE CENTER PROPOSAL Bm We are in full commitment of supporting the occupancy agreement with the Library Board and will honor their need to terminate their lease if relocation becomes possible. It will be a tremendous asset to our programming effort to have the library on the premJSe. The current tenants will enter into formal agreements to continue leases at a fair market value, which will allow our ownership to operate the building at a reasonable rate that will enable contribution towards the maintenance, utilities and sustainability of the facility. Collectively all tenants and occupants will display courteous and respectful usage of the building and honor the community multipurpose function for which the building was originally intended. Facilitv Manal!ement/ Operations New Hope Missionary Baptist Church had the good fortune of renovating our present structure in 1996, our building was totally gutted and our current two million dollar edifice was resurrected and rebuilt. We successfully maneuvered the construction process, city permits, building and safety codes under able leadership and will soon enjoy a completely debt free beautifully elegant facility. The daily management of the building will be under the auspices of the existing New Hope administrative protocol and procedural for management of our current structure and adjacent properties. We currently have tenants from community based programs such as ,. African American Health Consortium, Boy Scouts and Girls Scouts of America, the Black Nurses Association, Public Health Precious Babies Black Infant Health Program, and Reality Check ITP A program, who we host in our facilities and enjoy fruitful and excellent relationships. In addition monthly, we permit utilization of our facility for community use, seminars, forums, and organization meetings and have facility use agreements and eviction protocols in place. Our eminence as astute and capable property managers is evidenced by the excellent physical condition and aesthetics appeal of our 60,000 square foot total facility and adjacent Westside properties. The Chairman of the Trustee Board in his diligence oversees the commissioned Property Management and Personnel staff comprised of a contracted landscaping firm, onsite security firm, electronic alarm system, janitorial personnel and eight member administrative staff. David Ollis Landscaping and Maintenance Enterprises provide .. landscaping services. Security is provided by PSI security protection systems. For approximately six years they have provided excellent service and we are continually satisfied with their expertise. The combination of personnel and contractors successfully maintain all properties owned by New Hope and have the authority to make regular repairs and maintenance upkeep such as painting, plumbing, refurbishing, and replacement. We have an exceptional understanding of city building code and safety requirements, arbor, ADA (American Disabilities Act), stipulations and parking regulations. We operate a "Five Star" church and are a technologically equipped facility with expert staff that meets 21st century community needs. New Hope Missionary Baptist Church 4 PUBLIC ENTERPRISE CENTER PROPOSAL Bm Summary We hereby submit this proposal and have presented our desire and intent to acquire this facility .Our bid is competitive and in keeping with honoring the requested EDA Redevelopment Agency of the City of San Bernardino's requirements. We have communicated solidly our sound fiscal capacious exceptional management operations and superb reputation for sustainability and community dedication. Without a doubt, New Hope is the best selection to service Westside interest and should be permitted to acquire the property. The future of the building cannot be established by sheer profit to city nor can the community benefit by newly formed partnerships, which merely seek to take advantage of short-term opportunity. A purchase by an entity that has no established relationship with community represents imminent failure. W.encourage the city decision makers to explicitly weight entities who do not possess traal record or skill level to maintain and sustain the facility. This building is of significant historical, socio-political importance to this community and prudent and wise selection is necessary to continue its survivability and upkeep. We thank you for this opportunity to submit a bid and trust that you will make wise and balanced decisions for the long-term betterment of this community weighting all of the factors that will ensure viability of the building. We await the opportunity to expand our services in the Public Enterprise Center New Hope Missionary Baptist Cbnrcb 5 UTILITIES GAS REFUSE EDISON TELEPHONE WATER SUB-TOTAL REPAIRES & MAINTENANCE PROJECTED SUSTAINMENT COST PUBLIC ENTERPRISE CENTER UPON ACQUISITION ESTIMATED COST LOCK SERVICE PLUMBING/HEA TING/AIR TERMINIX GENERAL MAINTENANCE AND REPAIR LANDSCAPE MAINTENANCE JANITORIAUCUSTODIAL SERVICES PAINTING (TOUCH-UP) SUB-TOTAL SECURITY ALARM SERVICE SECURI1Y SUB-TOTAL GRAND TOTAL 4500 4800 42000 1500 8400 61200 900 10300 1500 3000 7200 32100 3500 58500 720 38736 39456 159156 PROJECTED SUSTAINMENT COST PUBLIC ENTERPRISE CENTER JUSTIFICATION UTILITIES GAS REFUSE EDISON TELEPHONE WATER REPAIRES & MAINTENANCE LOCK SERVICE PLUMBING/HEA TING/AIR TERMINEX GENERAL MAINTENANCE AND REPAIR LANDSCAPE MAINTENANCE JANITORIf-UCUSTODIAL SERVICES PAINTING (TOUCH-UP) SECURITY ALARM SERVICE SECURITY 375 PER MONTH X 12 MOS. 400 PER MONTH X 12 MOS. 3500 PER MONTH X 12 MOS 125 PER MONTH X 12 MOS. 700 PER MONTH X 12 MOS AS NEEDED AT 900 PER ANNUAL 858 PER MONTH X 12 MONTHS 125 PER MONTH X 12 MOS. 250 PER MONTH X 12 MOS 600 PER MONTH X 12 MOS. CONTRACT TO INCLUDE TREES 15 FULL TIME WAGES PLUS 22.50 OVERTIME (40 hrs) AS NEEDED AT 3500 PER ANNUAL 60 PER MONTH X 12 MOS. 18 FULL TIME X 27 OVERTIME (48 HOURS) NEW HOPE MISSIONARY BAPTIST CHURCH 1575 WEST 171h STREET SAN BERNARDINO, CALIFORNIA 92411 TELEPHONE (909) 887.2526. FAX (909) 887.5406 CHAIRMAN OF DEACONS Deacon Joseph Sharp Dr. Robert L Fairley, D.Min Pastor CHURCH CLERK Sis. Maxine Barnett CHAIRMAN OF TRUSTEES Bro. Breon Waters CHURCH SECRETARY Sis. Betty Luvert October 31, 200 I On October 3, 2001, at a regular scheduled Business meeting of New Hope Missionary Baptist Church, the Board of Trustees was authorized by the Church General to enter into the bidding process with the Economic Development Agency to purchase the property known as The Public Enterprise Center in the City of San Bernardino, California. The Board of Trustees further designated Breon Waters, and Andrew Williams as authorized persons to so commit the Church. kt. ''/-.' ~ ' /) )J;.U( :r.. , _ ~_v..-v-<g Dr. Robert L. Fairley - Pastor t:th"'~' ;$tf~"n- axine Barnett Church Clerk . 'VB VALLEY BANK l7'R VALLEY BANK MORENO VALLEY OFFICE October 29,2001 Economic Development Agency of The City of San Bernardino, California 290 North D Street, 6th Floor San Bernardino, California, CA 92415 RE: Loan Commitment to Purchase Real Property in San Bernardino, California. Gentlemen: Valley Bank is very pleased to inform you that it has provided to New Hope Missionary Baptist Church a Loan Commitment for up to $800,000.00 for the Purchase of Real Property in San Bernardino, California. Approval for this Loan Commitment was granted by the Valley Bank Directors' Loan Committee on Friday, October 26,2001. This Loan Commitment remains un-disbursed and fully available. Please call me if you have any questions concerning this matter. Thank you. r\",--- ~12j9f -/Va' ".(,'V\./ Mark A. Nugent Senior Vice President Senior Lending Officer." Sincerely, Robert W. McCullough Vice President Branch Manager , , 24010 SUNNYMEAD BL VD., CA 92553 . (909) 242.1174 . FAX (909) 242.1903 . P.O. BOX 188. MORENO VALLEY, CA 92556.0188 ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Ann Harris, Director SUBJECT: Bus Retention, Recruitment & Revitalization PUBLIC HEARING - DISPOSITION AND DEVELOPMENT AGREEMENT- PUBLIC ENTERPRISE CENTER DATE: September 11,2001 Svnopsis of Previous Commission/Council/Committee Actionls): On July 12, 2001, the Redevelopment Committee voted to recommend to the Community Development Commission acceptance of the offer to buy the Public Enterprise Property received from Fallbrook Capital, LLC. On July 23, 2001, the Community Development Commission instructed staff to prepare a Disposition and Development Agreement and set a public hearing to consider the sale of the Public Enterprise Center to Fallbrook Capital, LLC. Recommended Motionls): OPEN PUBLIC HEARING CLOSE PUBLIC HEARING ICommunitv Development Commission) MOTION A: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE REDEVELOPMENT AGENCY APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK CAPITAL, LLC., ON THE TERMS SET FORTH IN SUCH AGREEMENT lMavor and Common Council) RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THAT CERTAIN MOTION B: DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK ....m.mm.................<::~!'XI~!:,.~~<::............................................................._......._m.................................m...........m...................m. Contact Person( s): Gary Van Osdell Ann Harris Project Area(s) Northwest Phone: Ward(s): 663.1044 Six (6) Supporting Data Attached: Ii'! Staff Report Ii'! Resolution(s) Ii'! Agreement(s)/Contract(s) 0 Map(s) 0 Letter/Memo FUNDING REQUIREMENTS Amount: $ .0. Source: N/A SIGNATURE: N/A ^~~~ Bus Retention, Recruitment & Revitalization Commission/Conncil Notes: GVO:AH:lag:09-17-01 PEC DDA COMMISSION MEETING AGENDA Meeting Date: 09/17/2001 Agenda Item Number: ~5' ECONOMIC DEVELOPMENT AGENCY STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Disuosition and Develoument Al!reement - Pnblic Enterurise Center Buildinl! BACKGROUND In 1986, the Agency took possession of the Public Enterprise Center (the "PEC"), located at 1505 West Highland Avenue (the "PEC"). The PEC, consisting ofa 28,650 square foot building on 3.14 acres of land, currently houses the Inghram Branch Library, the Westside Community Center and the Northwest Project Area Committee along with several small non-profit tenants. With many of the tenants paying rent well below market rate or no rent at all, the average amount of income derived from the PEC is substantially less than the cost to maintain said property. The income from the facility for fiscal year 2000/01 was $31,386.60, and Agency expenditures for upkeep, maintenance and security during that period totaled $171,907.53. Since taking possession of the PEC, the average annual income to the Agency has been approximately $36,003 while the average annual cost to the Agency has averaged approximately $158,098. To date, the Agency has paid a total of $2,348,494.41 to maintain and secure the PEC. On June 22, 2001 Agency staff received an offer from Fallbrook Capital, LLC to purchase the PEC Property for $470,000 in cash at close of escrow. For the eighteen months prior to receipt of this offer, staff had been attempting to negotiate the disposition of the PEC with another group (YSP, LLC). YSP, LLC had offered to acquire the PEC for $300,000; $100,000 at close of escrow, $100,000 within 24 months of escrow closing and a final payment of$IOO,OOO within 36 months of escrow closing. The YSP ,LLC intended use of the PEC was as a radio/tv audio/visual educational facility. At their meeting of July 12, 2001, the Redevelopment Committee voted to recommend to the full Commission that the offer from Fallbrook Capital, LLC to acquire the PEC be accepted. Subsequently, on July 23, 2001 the Community Development Commission voted to accept the offer from Fallbrook Capital LLC and directed staff to prepare a disposition agreement and schedule a public hearing to consider same. CURRENT ISSUE Fallbrook Capital LLC understands that pursuant to Redevelopment Law, the Agency must hold a public hearing to consider their offer and the related Disposition and Development Agreement (DDA) in order to proceed with the buy/sale of the PEC. To indicate good faith, they have deposited a cashiers check in the amount of $5,000 with the Agency. It is the intent of Fallbrook Capital LLC to continue to use the PEC to house various non-profit and educational organizations, albeit at reasonable rent levels. -------------------------------------------------------------------------------------------------------------------------------------------- GVO:AH:lag:09.17.01 PEC DDA COMMISSION MEETING AGENDA Meeting Date: 09/17/2001 Agenda Item Number: P..d.S Economic Development Agency Staff Report DDA - Public Enterprise Center September 11,2001 Page Number -2- --------------------------------------------------------------------------------------------------------------------- ENVIRONMENTAL Sale of an existing building involving negligible change in use is exempt from the provisions of CEQA. FISCAL IMPACT The sale of the PEC will generate $470,000 in cash to the Redevelopment Agency and save the Agency approximately $140,000 a year in security, upkeep and maintenance expense. RECOMMENDATION That the Community Development Commission adopt the attached Resolutions. A':z:::.;;,,~ Business Retention, Recruitment & Revitalization -------------------~---------------------------------------------------------------------------------------------------.-------------------. GYO:AH:lag:09-17-01 PEe DDA COMMISSION MEETING AGENDA Meeting Date: 09/17/2001 Agenda Item Nnmber: RJ.5 .r '- 2 3 4 5 6 7 8 c RESOLUTION NO. A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK CAPITAL, LLC, ON THE TERMS SET FORTH IN SUCH AGREEMENT WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") owns or has a beneficial interest in certain real property situated within the Northwest Project Area and commonly known as the Public Enterprise Center located at 1505 W. Highland Avenue, San Bernardino, 9 California (the "Property"); and 10 WHEREAS, the Agency staffhas prepared a draft of a Disposition and Development Agreement II (the "Agreement") for the disposition of the Property to Fallbrook Capital, LLC, a Nevada limited 12 liability company, or its assign (in either case, the "Purchaser"), together with a report which 13 summarizes the key terms ofthe Agreement and describes the manner in which the proposed disposition 14 of the Property to the Purchaser will assist in the elimination of blight (the "33433 Report") in 15 accordance with Health and Safety Code Section 33433; and 16 WHEREAS, it is appropriate for the Commission to take action with respect to the disposition 17 of the Property to the Purchaser and approve the Agreement as set forth in this Resolution. 18 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING ON 19 BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DOES 20 HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 21 Section 1. On September 17, 2001, the Commission conducted a full and fair joint public 22 hearing with the Mayor and Common Council of the City of San Bernardino relating to the disposition 23 of the Property by the Agency to the Purchaser pursuant to the terms and conditions of the Agreement. 24 The minutes of the Agency Secretary for the September 17, 200 I, meeting of the Commission shall 25 include a record of all communication and testimony submitted to the Commission by interested persons 26 relating to the joint public hearing, the 33433 Report and the approval of the Agreement. --- 27 i "-' 28 SB2001:2J914,1 1 C I 2 3 4 Section 2. A copy of the Agreement in the form submitted at the joint public hearing is on file with the Agency Secretary. The Commission hereby finds and determines as follows: (i) the disposition of the Property by the Agency to the Purchaser in accordance with the Agreement is consistent with the Redevelopment Plan and the current Agency Implementation Plan for 5 the Northwest Project Area; 6 (ii) the terms and conditions of the Agreement contain assurances that the Property will be 7 used and maintained as contemplated under the Redevelopment Plan; 8 (iii) the purchase price for the Property payable by the Purchaser to the Agency, subject to th c 9 satisfaction of the terms and conditions of the Agreement, is an amount which the Commission 10 determines to be fair, just and reasonable, and the disposition of the Property on the terms set forth in 11 the Agreement shall materially benefit and sustain the implementation of the Redevelopment Plan and 12 assist the community to alleviate blighting conditions; and 13 (iv) the consideration payable by the Purchaser to the Agency for the disposition of the 14 Property ($470,000.00, in cash) is not less than the fairreuse value at the use and with the covenants and 15 conditions and development costs authorized by the Agreement. Section 3. The Commission hereby finds and determines that the activity to take place on 16 17 the Property under the terms of the Agreement involves negligible or no expansion of use beyond that 18 previously existing on the Property and is exempt from the provisions of the California Environmental 19 Quality Act ("CEQA") pursuant to Section 21084 of the California Public Resources Code and Article 20 19 (Section 15301) of the State CEQA Guidelines developed thereunder. 21 Section 4. The Commission hereby approves, receives and files the 33433 Report and the ,-.. "-' 22 Agreement in the forms as submitted at the joint public hearing. 23 Section 5. The Commission hereby approves the disposition ofthe Property to the Purchaser 24 on the terms set forth in the Agreement. The Chair of Commission and the Executive Director are 25 hereby authorized and directed to execute the Agreement on behalf of the Agency together with such 26 technical and conforming changes as may be recommended by the Executive Director and approved by 27 28 SB2001:239!4.! 2 r I '- 2 3 4 5 .r" I '- r '- the Chair of the Commission. The signatures of the Chair ofthe Commission and the Executive Director on the Agreement shall be conclusive evidence that the Agreement has taken effect. In the event that the Agreement may not be fully executed by the parties for any reason within thirty (30) days following the date of adoption of this Resolution, the authorization granted to the Chair of the Commission and the Executive Director to execute the Agreement on behalf of the Agency shall be of no further force 6 and effect. 7 Section 6. Provided that the Agreement has been fully executed by the parties within the 8 period of time set forth in Section 5 of this Resolution, the Executive Director of the Agency is hereby 9 authorized and directed to take all actions set forth in the Agreement on behalf of the Agency to close 10 the escrow transaction described therein. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB2001:23914.! 3 10 11 Commission ESTRADA 12 LIEN MCGINNIS 13 SCHNETZ ,...., SUAREZ L 14 ANDERSON McCAMMACK 15 16 17 18 19 20 21 22 23 By: 24 25 26 ,"-' 27 ........... 28 SB2ool:23914.1 r I "-' 2 3 4 5 6 7 8 9 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK CAPITAL, LLC, ON THE TERMS SET FORTH IN SUCH AGREEMENT Section 7. This Resolution shall become effective immediately upon its adoption. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community Development Commission of the City of San Bernardino at a meeting thereof, held on the day of ,2001, by the following vote, to wit: AYES NAYS ABSTAIN ABSENT Secretary The foregoing Resolution is hereby approved this _ day of ,2001. Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 4 r I '- 2 3 4 5 6 7 8 9 10 11 c - '- STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) !, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of Community Development Commission of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Community Development Commission of the City of San Bernardino this day of 2001. Secretary of the Community Development Commission of the City of San Bernardino 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB2ool,23914.1 5 ~ I ""'" 2 3 4 5 6 7 9 10 II 12 13 r- 14 L 15 16 ~ "- RESOLUTION NO. A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND F ALLBROOK CAPITAL, LLC WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") owns or has a beneficial interest in certain real property situated within the Northwest Project Area and commonly known as the Public Enterprise Center located at 1505 W. Highland Avenue, San Bernardino, 8 California (the "Property"); and WHEREAS, the Agency staffhas prepared a draft ofa Disposition and Development Agreement (the "Agreement") for the disposition of the Property to Fallbrook Capital, LLC, a Nevada limited liability company, or its assign (in either case, the "Purchaser"), together with a report which summarizes the key terms ofthe Agreement and describes the manner in which the proposed disposition of the Property to the Purchaser will assist in the elimination of blight (the "33433 Report") in accordance with Health and Safety Code Section 33433; and WHEREAS, it is appropriate for the Mayor and Common Council to take action with respect to the disposition ofthe Property to the Purchaser and the Agreement in accordance with Health and Safety 17 Code Section 33433 (a) (1). 18 NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE 19 MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 20 Section 1. On September 17,2001, the Mayor and Common Council conducted a full and 21 fair joint public hearing with the Community Development Commission ofthe City of San Bernardino 22 relating to the disposition of the Property by the Agency to the Purchaser pursuant to the terms and 23 conditions of the Agreement. The minutes of the City Clerk for the September 17, 200 I, meeting ofthe 24 Mayor and Common Council shall include a record of all communication and testimony submitted to 25 the Mayor and Common Council by interested persons relating to the joint public hearing, the 33433 26 Report and the approval of the Agreement. 27 28 S82001:24092.1 1 r-. I '- 2 3 4 Section 2. This Resolution is adopted in order to satisfY the provisions of Health and Safety Code Section 33433 relating to the disposition and sale of the Property by the Agency to the Purchaser on the terms and conditions set forth in the Agreement. A copy of the Agreement in the form submitted at the joint public hearing is on file with the Agency Secretary. The Mayor and Common Council hereby 5 find and determine as follows: 6 (i) the disposition of the Property by the Agency to the Purchaser in accordance with the 7 Agreement is consistent with the Redevelopment Plan and the current Agency Implementation Plan for 8 the Northwest Project Area; 9 (ii) the terms and conditions of the Agreement contain assurances that the Property will be lOused and maintained as contemplated under the Redevelopment Plan; 11 (iii) the purchase price for the Property payable by the Purchaser to the Agency, subject to th c 12 satisfaction of the terms and conditions of the Agreement, is an amount which the Mayor and Common 13 Council determine to be fair, just and reasonable, and the disposition of the Property on the terms set 14 forth in the Agreement shall materially benefit and sustain the implementation of the Redevelopment 15 Plan and assist the community to alleviate blighting conditions; and 16 (iv) the consideration payable by the Purchaser to the Agency for the disposition of the 17 Property ($470,000.00, in cash) is not less than the fair reuse value at the use and with the covenants and 18 conditions and development costs authorized by the Agreement. 19 Section 3. The Mayor and Common Council hereby find and determine that the activity to 20 take place on the Property under the terms of the Agreement involves negligible or no expansion of use 21 beyond that previously existing on the Property and is exempt from the provisions of the California 22 Environmental Quality Act ("CEQA") pursuant to Section 21084 of the California Public Resources 23 Code and Article 19 (Section 15301) of the State CEQA Guidelines developed thereunder. 24 Section 4. The Mayor and Common Council hereby approve, receive and file the 33433 25 Report and the Agreement in the forms as submitted at the joint public hearing. r "-' 26 27 28 S82ool:24092.1 2 C I 2 3 4 5 ,.-- '- r' ........... Section 5. The Mayor and Common Council hereby approve the disposition of the Property to the Purchaser on the terms set forth in the Agreement. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB2ooU4092.! 3 18 19 20 21 22 23 24 25 26 -- 27 ,-. 28 SB200U4092, I - f "-' "..-. L I A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SA'" BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THAT 2 CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK 3 CAPITAL, LLC 4 Section 6. This Resolution shall take effect upon the date of its adoption. 5 6 7 8 9 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the day of ,2001, by the following vote, to wit: Council: 10 ESTRADA LIEN 11 MCGINNIS SCHNETZ 12 SUAREZ ANDERSON 13 McCAMMACK 14 15 AYES NAYS ABSTAIN ABSENT City Clerk 16 17 The foregoing resolution is hereby approved this _ day of ,2001. Judith Valles, Mayor City of San Bernardino 4 ,.-- 1 "- I STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) 2 CITY OF SAN BERNARDINO ) 3 ss I, City Clerk ofthe City of San Bernardino, DO HEREBY 4 CERTIFY that the foregoing and attached copy of Mayor and Common Council of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this 5 office. 6 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Mayor and Common Council of the City of San Bernardino this day of , 200 I. 7 8 9 10 11 12 13 .r- 14 '- City Clerk City of San Bernardino 15 16 17 18 19 20 21 22 23 24 25 26 - 27 '-' 28 SB200U4092.1 5 c r "- ,r- .......... RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) 2001 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND F ALLBROOK CAPITAL, LLC 582001 :22036.2 ,"-' ~ c - '-" TABLE OF CONTENTS Page Section 1.01. Purpose of Agreement .............................................. I Section 1.02. The Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Section 1.03. Parties to the Agreement ............................................ I Section 1.04. Benefit to Project Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I ARTICLE II DISPOSITION OF THE PROPERTY . . . . . . . . . . . . . . . . . . . . . . 2 Section 2.01. Purchase and Sale of the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Section 2.02. Deposit and Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Section 2.03. Opening and Closing of Escrow ......................................3 Section 2.04. Escrow Instructions ................................................ 3 Section 2.05. Conveyance of TitIe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.06. Additional Closing Obligations of Agency .............................. 4 Section 2.07. Closing Obligations of Purchaser .....................................5 Section 2.08. Inspections and Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.09. Due Diligence Investigation of the Property By the Purchaser ............... 7 Section 2.10. Due Diligence Approval Certificate ................................... 8 Section 2.11. Books and Records ................................................ 8 Section 2.12. Condition of the Property-Purchaser's Release. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 2.13. Review and Approval of Condition of Title by the Purchaser. . . . . . . . . . . . . . . 10 Section 2.14. Survey ......................................................... II Section 2.15. Extension of Due Diligence Period ................................... II Section 2.16. Purchaser's Conditions Precedent to Close Escrow. . . . . . . . . . . . . . . . . . . . . . . II Section 2.17. The Agency's Conditions Precedent to Close of Escrow . . .. . .. ... . .. .. ... . 12 Section 2.18. Distribution of Documents and Purchase Price After Closing Date by Escrow Holder .................................................. 13 Section 2.19. Satisfaction of Conditions .......................................... 13 Section 2.20. [RESERVED -- NO TEXT] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 2.21. Prorations, Closing Costs, Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 2.22. BREACH OF ARTICLE II BY THE AGENCY; LIQUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER. . . . . . . 14 Section 2.23. BREACH BY THE PURCHASER OF ARTICLE II; LIQUIDATED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY ....... 15 Section 2.24. Damage, Destruction and Condemnation .............................. 15 ARTICLE ill USE AND MAINTENANCE OF THE PROPERTY ............... 16 SB2001 :22036,2 -I- c r '- /~ '-' Section 3.01. Use of the Property ............................................... 16 Section 3.02. Maintenance of the Property ........................................ 16 Section 3.03. Taxes and Assessments ............................................ 17 Section 3.04. Transfer of Property to Exempt Person .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 3.05. Obligation to Refrain from Discrimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 3.06. Form of Nondiscrimination and Nonsegregation Clauses. . . . . . . . . . . . . . . . . . 18 ARTICLE IV DEFAULTS. REMEDIES AND TERMINATION................ 19 Section 4.01. Defaults - General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 4.02. Legal Actions .................................................... 20 Section 4.03. Rights and Remedies are Cumulative ................................. 20 Section 4.04. Damages........................................................ 20 Section 4.05. Specific Performance Prior to Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . .20 ARTICLE V GENERAL PROVISIONS ......................... 21 Section 5.01. Notices, Demands and Communications Between the Parties ..............21 Section 5.02. Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Section 5.03. Warranty Against Payment of Consideration for Agreement ...............21 Section 5.04. Nonliability of Agency Officials and Employees ........................ 22 Section 5.05. Enforced Delay: Extension of Time of Performance . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.06. Inspection of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.07. Approvals ....................................................... 23 Section 5.08. Real Estate Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Section 5.09. Indemnification ..................................................23 Section 5.10. Release of Purchaser from Liability. ... ... ... . ... ... . ... . .. . . . . .. ... ..23 Section 5.11. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Section 5.12. Effect.......................................................... 23 ARTICLE VI ENTIRE AGREEMENT. WAIVERS AND AMENDMENT . . . . . . . . . . . . 24 Section 6.01. Entire Agreement .................................................24 EXHffiIT "A" EXHffiIT "B" - LEGAL DESCRIPTION AGENCY GRANT DEED SB200 U2036.2 -11- r '-' c ;-- ,-. 2001 DISPOSITION AND DEVELOPMENT AGREEMENT (Fallbrook Capital, LLC) THIS 2001 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of ,2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency"), and Fallbrook Capital, LLC, a Nevada limited liability company or its successor and assign (in either event, the "Purchaser"). The Agency and the Purchaser hereby agree as follows: Section 1.01. Puroose of Al!reement. The purpose of this Agreement is to implement the Redevelopment Plan for the Northwest Project Area (the "Project Area") by providing for the purchase, use and maintenance by the Purchaser ofthat certain real property located at 1505 W. Highland Avenue, San Bernardino, California, and more particularly described in Exhibit "A" hereto, improved by an office building. The land and building which are subject to this Agreement are referred to herein as the "Property". As of the date of this Agreement, the Property is owned by the Agency. The purchase, use and maintenance of the Property pursuant to this Agreement is in the vital and best interests of the City of San Bernardino (the "City") and the health, safety and welfare of its residents, and is in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the purchase, use and maintenance of the Property contemplated by this Agreement is consistent with the Redevelopment Plan for the Project Area. Section 1.02. The Prooertv. The Property consists of an approximately 28,650 square foot office building commonly known as the Public Enterprise Center ("PEC") situated on three acres ofland, more or less. The Purchaser intends to lease offices in the PEC to community- based non-profit and/or educational organizations. Section 1.03. Parties to the Al!reement. (a) The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 ofthe Community Redevelopment Law ofthe State of California (Health and Safety Code Section 33020, et sea.) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The principal office and mailing address of the Purchaser for purposes of this Agreement is 7750 Palm Avenue, Suite J, Highland, California 92346. (c) The City of San Bernardino is not a party to this Agreement. SB2oo1 :22036.2 I c Section 1.04. Benefit to Proiect Area. The Agency has determined that the purchase, use and maintenance of the Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Prooertv. Subject to all of the terms, conditions and provisions of this Agreement, and for the consideration of the Purchase Price as herein set forth, the Agency hereby agrees to sell via grant deed to the Purchaser merchantable lien free title to the Property and the Purchaser hereby agrees to purchase the Property. The purchase price which the Agency agrees to accept from the Purchaser and which the Purchaser agrees to pay to the Agency for the Property is Four Hundred Seventy Thousand Dollars ($470,000.00) in United States currency (the "Purchase Price"). For all purposes of this Agreement, the legal description of the Property attached hereto as Exhibit "A" shall be definitive and controlling as to the location, size or other aspect of the Property. r \...... (a) Within five (5) calendar days following the execution of this Agreement by both parties, the Purchaser shall deliver to the Escrow Holder (as hereinafter defined) the sum of Five Thousand Dollars ($5,000.00) (the "Deposit"). Upon receipt of the Deposit and a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened, as provided in Section 2.03. The Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Purchaser. Section 2.02. Deoosit and Payment of Purchase Price. At the Close of Escrow (as hereinafter defined), the Deposit shall be applied as a credit to the Purchase Price. (b) Payment of Balance ofPurchlise Price. The Purchase Price, less the Deposit, shall be tendered by the Purchaser to the Escrow Holder on the Closing Date (as hereinafter defined) for disbursement to the Agency at the Close of Escrow in cash or immediately available funds. (c) The Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Purchaser in the event that: (i) the Agency or the Purchaser terminates this Agreement pursuant to Section 2.13( a); or - '- SB200 I :22036.2 2 c r '- ~ '- (ii) the Purchaser does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(b) and this Agreement is terminated; or (iii) the Purchaser's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4) or (5) are not satisfied (unless satisfaction has been waived by the Purchaser) and this Agreement is terminated; or (iv) the Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a governmental entity with respect to the Property prior to the Close of Escrow , and the Purchaser elects to terminate this Agreement pursuant to Section 2.24. Section 2.03. Ooening and Closing of Escrow. (a) The transfer and sale of the Property shall take place through an Escrow (the "Escrow") to be administered by First American Title Company Escrow Department or such other escrow or title insurance company mutually agreed upon by the Purchaser and the Agency (the "Escrow Holder"). The Escrow shall be deemed open ("Opening of Escrow") upon the receipt by the Escrow Holder of a copy of this Agreement fully executed by both parties hereto and the Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Purchaser has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within thirty (30) days from the Opening of Escrow for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Purchaser, whereupon the Deposit shall be returned by the Escrow Holder to the Purchaser (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. (c) Provided that the Purchaser has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the Escrow shall occur within fifteen (15) days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed (as hereinafter defined) for the Property to be recorded and the policy of title insurance for the Property to be delivered to the Purchaser. SB2001 :22036.2 3 r-- '"- r- L r--- "- Section 2.04. Escrow Instructions. This Agreement shall also constitute the escrow instructions of the parties to the Escrow Holder. Additionally, the Purchaser and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Purchaser shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder and the Escrow Holder shall forthwith return all monies (as provided in this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "B" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free right, title and interest in the Property to the Purchaser. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records of the Recorder ofthe County of San Bernardino, California, if and when Escrow Holder holds the various instruments and funds for the accounts of the parties, as set forth herein, and can obtain for the Purchaser an ALT A policy of title insurance ("Title Policy") issued by First American Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Purchase Price, together with such endorsements to the policy as may be reasonably requested by the Purchaser, insuring that the fee title to the Property vested in the Purchaser is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: (1) non-delinquent real property taxes; (2) non-monetary title exceptions approved by the Purchaser pursuant to Section 2.13 below; (3) applicable provisions of the parcel map/subdivision map for the Property; (4) the effect of the Redevelopment Plan for the Project Area; (5) the effect of any conditions imposed by the City in connection with the proposed use of the Property; (6) the provision of the Agency Grant Deed; (7) the applicable provisions of this Agreement; and SB2001 :22036.2 4 c r '- ~ '- (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agencv. On or before 12:00 noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Purchaser) copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) all soils, seismic, geologic, drainage, and environmental reports, and surveys, with respect to the Property, if any, which the Agency has in its possession and/or control to the extent that originals of such items have not been delivered previously by the Agency to the Purchaser pursuant to Section 2.08 below; (3) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (4) evidence of the existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (5) any other documents, instruments, funds and records required to be delivered to the Purchaser under the terms of this Agreement which have not been previously delivered. Section 2.07. Closing Obligations of Purchaser. On or before 12:00 noon on the business day preceding the Closing Date, the Purchaser shall deliver to the Escrow Holder copies of the following documents and other items: (I) an acknowledgment and acceptance ofthe Agency Grant Deed, duly executed and acknowledged by the Purchaser. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Purchaser. (3) evidence of the existence, organization and authority of the Purchaser and of the authority of persons executing documents on behalf of the Purchaser reasonably satisfactory to the Escrow Holder and the Title Company. 5B2001 :22036,2 5 r- '-' c .~ '- '. (4) evidence of the ability of the Purchaser to obtain any required permits, licenses or approvals in connection with the Purchaser's use of the Property. (5) any other documents, instruments or funds required to be delivered by the Purchaser under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close Escrow which have not previously been delivered. Section 2.08. Insoections and Review. (a) Due Diligence Items. Within five (5) days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals ofthe following documents and items (collectively, "Due Diligence Items") to the Purchaser: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys (including, but not limited to, any Property Environmental Site Assessments), surveys, relating to the Property if any, in the possession or control of the Agency; (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control; (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency; (4) a copy of the Redevelopment Plan for the Project Area. (b) Certain Definitions. For the purpose of this Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water SB200 1:22036.2 6 c c ,,-. '- SB2001022036.2 Pollution Control Act ("FWPCA") [33 USC Section 1251 et eq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law , statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.1 01], or by the EP A, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, 7 ,....... , '-' (4) designated as a hazardous substance pursuant to 33 use Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, or (6) a radioactive material. Section 2.09. Due Diligence Investigation of the Propertv Bv the Purchaser. (a) Within thirty (30) days from and after the Opening of Escrow, and subject to the extensions of time set forth below in Section 2.15, the Purchaser shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Purchaser and to obtain such approvals from the City in connection with the Purchaser's use of the Property, as the Purchaser may require in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permit the Purchaser, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Buyer deems prudent with respect to the physical condition of the Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous r substances, if any. '- (c) Any such investigation work on the Property may be conducted by the Purchaser and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Purchaser on the Property. Upon the Agency's request, the Purchaser will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Purchaser shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Property. (e) The Agency shall cooperate fully to allow the Purchaser to complete such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Purchaser during such investigations and/or inspections. The Purchaser shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation. Section 2.10. Due Diligence Approval Certificate. Within thirty (30) days following the Opening of Escrow, the Purchaser shall complete its Due Diligence investigation of the Property (subject to the extensions of time set forth in Section 2.15) and deliver a due diligence ,-. '--- SB2001 :22036.2 8 ,..... ~ c ,-.. '- approval certificate signed by the Purchaser (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Purchaser accepts the condition of the Property or; (ii) contains a description of the matters or exceptions relating to the condition of the Property which the Purchaser was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Purchaser's Due Diligence investigations during the Due Diligence Period, the Purchaser shall be afforded full opportunity by the Agency to examine all books and records in the possession of the Agency and/or the Agency's agents or employees, which relate to the Property including the reasonable right to make copies of such books and records at the expense of the Purchaser. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Purchaser with obtaining access to information relating to the Property which is in the possession or control of the Agency. Section 2.12. Condition of the Propertv-Purchaser's Release. The Purchaser acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period. Upon issuance to the Escrow Holder of a Due Diligence Approval Certificate under Section 2.10 which accepts the condition of the Property, the Purchaser shall, thereafter, accept delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL FAULTS" condition. The Purchaser further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Purchaser shall have conducted and completed (or waived the completion) of all of its independent investigation of the condition of the Property which the Purchaser may believe to be indicated. The Purchaser hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Purchaser is riot relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Purchaser with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City, the Agency makes no representation or warranty with respect to the accuracy, completeness, methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Purchaser, on behalf of itself and its successors and assigns, waives and releases the Agency and its successors and assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether SB2oo1,22036.2 9 c ,r' '- ,- "-' direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the use of the Property as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Purchaser expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, ifknown to such creditor, would materially affect a settlement. By execution ofthis Agreement, the Purchaser acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality of the foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MA TERlALL Y AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The undersigned, being aware of this code section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Purchaser: The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. Review and Aoproval of Condition of Title bv the Purchaser. (a) Within fifteen (15) days following the Opening of Escrow, the Agency shall cause to be delivered to the Purchaser a preliminary title report or title commitment for an AL T A policy of title insurance issued by the Title Company, describing the state of the title of the Property, together with copies of all exceptions specified therein and with all easements plotted, but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Purchaser shall notifY the Agency in writing of any objections the Purchaser may have to the title exceptions contained in the Preliminary Title Report ("Purchaser's Title Objection Notice") prior to the expiration of the Due SB200 1:22036.2 10 c r '"- - "-' Diligence Period. The Agency shall have a period of five (5) days after receipt of the Purchaser's Title Objection Notice in which to deliver written notice to the Purchaser ("Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. Ifthe Agency notifies the Purchaser of its election to terminate Escrow rather than remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within five (5) days after the Purchaser's receipt of the Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall take title to the Property at the Close of Escrow subject to such objectionable title items. (b) The Agency hereby covenants not to place any liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Purchaser following execution of this Agreement by the Agency. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions (including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined), the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Purchaser to review such amendment or supplement shall be the later of the expiration of the Due Diligence Period or ten (10) days from receipt of the amendment or supplement) and Escrow shall be deemed extended by the amount oftime necessary to allow such review and approval in the time and manner set forth above. Section 2.14. Survev. The Purchaser may at its sole cost and separate expense obtain a survey ofthe Property prepared by a land surveyor duly licensed by the State of California and in compliance with ALTAlASCM standards (the "Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without the addition of further exceptions, unless the same are acceptable to the Purchaser in its sole and absolute discretion. The Purchaser shall have until the end of the Due Diligence Period to complete and examine the Survey and to notify the Agency in writing of any objections the Purchaser has to the Survey ("Purchaser's Survey Objection Notice"). The Agency shall have a period offive (5) days after receipt of the Purchaser's Survey Objection Notice in which to deliver written notice to the Purchaser ("Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Purchaser of its intention not to remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within ten (10) days after the Purchaser's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Close of Escrow, the Survey shall be recertified to the Purchaser, Title Company and the Purchaser's lender, if any. SB200 I :22036.2 11 !~ \..,., ,"'-- '- ,- "- Section 2.15. Extension of Due Diligence Period. (a) In the event the Agency fails to provide the Purchaser with documents or other information required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence Period regarding such information shall be extended by one (I) day for each day of the delay by the Agency to permit the Purchaser to perform an adequate due diligence review of such documents or information (but shall not exceed a total of sixty (60) days). The Purchaser will use its best efforts to notify the Agency of any documents or information the Agency has failed to deliver to the Purchaser within the time periods provided in Sections 2.08 and 2.11. (b) In the event that the Executive Director makes a finding that the Purchaser has undertaken substantial work to complete its due diligence in connection with the Property, the Executive Director shall upon the written request of the Purchaser authorize an extension of the Due Diligence Period for up to an additional thirty (30) days. Section 2.16. Purchaser's Conditions Precedentto Close Escrow. The Purchaser's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (I) The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency, hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (I) only, a representation that is limited to the Agency's knowledge or notice shall be false, if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; (2) the Purchaser's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; (3) the Purchaser's approval of the contents of all due diligence items, and the other investigations of the Property made by the Purchaser and/or its designees pursuant to Sections 2.08 and 2.09 herein, on or before the expiration of the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15. The Purchaser shall be deemed to have disapproved such due diligence items unless they are approved on or before 5 :00 p.m. on the day ending the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15 herein; and (4) the Title Company has committed to issue the Title Policy, in favor of the Purchaser in the form described in Section 2.05. SB200 I :22036.2 12 r--- '-' c - '- Section 2.17. The Agency's Conditions Precedent to Close of Escrow. The Agency's obligation to convey the Property to the Purchaser shall be conditioned upon the fulfillment ofthe following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (I) the Purchaser has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in Section 2.10 of this Agreement; (2) the Purchaser has accepted the condition of title of the Property on or before the date set forth in Section 2.13; (3) the Purchaser shall not be in default of any material term of this Agreement to be performed by the Purchaser hereunder and each representation and warranty of the Purchaser made in this Agreement shall remain true and correct; and (4) the Purchaser shall have satisfied (or the Agency shall have waived satisfaction) of each of the conditions precedent set forth in Section 2.16 and the Escrow shall be in a condition to close within forty-five (45) days following the Opening of Escrow (subject to Section 2.15, if applicable). Section 2.18. Distribution of Documents and Purchase Price After Closing Date bv Escrow Holder. The Escrow Holder shall deliver to the Purchaser, within three (3) business days following the Closing Date, a conformed copy of the Agency Grant Deed, as recorded, and the policy of title insurance issued by the Title Company in favor of the Purchaser. The Escrow Holder shall deliver to the Agency the Purchase Price, less sums paid to discharge any liens, less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by the Purchaser or by the Agency, each party shall use its best efforts, in good faith, and at its own cost, to satisfY such conditions. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] SB2oo1 :22036.2 13 ,I"""'" """'" c /~ '- Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty-five (365) day year. The Agency is responsible for (i) all taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 11 :59 p.m. upon the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which the Close of Escrow occurs do not become available until after the Close of Escrow, then the rates and assessed values ofthe previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Purchaser upon demand for any real or personal property taxes payable following the Close of Escrow applicable to any period of time prior to the Close of Escrow as a result of any change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Purchaser shall be entitled to exclusive possession of the Property immediately upon the Close of Escrow. (c) Subsequent to the Close of Escrow, the Purchaser shall pay, prior to delinquency, all real property taxes and assessments assessed and levied upon or against the Property. Nothing herein contained shall be deemed to prohibit the Purchaser from contesting the validity or amounts of any tax or assessment, nor to limit the remedies available to the Purchaser in respect thereto. (d) The Agency shall pay the cost of the premium for a CLTA policy of title insurance on the Property in the amount of the Purchase Price, together with all title charges (including endorsements reasonably requested by the Purchaser to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above). The Agency shall pay one-half (Y2) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay the additional cost of the premium for an AL T A policy of title insurance on the Property in the amount of the Purchase Price, together with all title changes and requested AL T A survey policy endorsements (to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above), plus the cost of recording the Agency Grant Deed, together with one- half (Yo) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Purchaser. 582001,22036.2 14 c c .- "-' Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the proportion of one-half (II,) payable by each party. No later than three (3) business days prior to the Close of Escrow , the Escrow Holder shall prepare a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property and prorations made pursuant to this Agreement for approval by the Purchaser and the Agency. The Purchaser and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. BREACH OF ARTICLE II BY THE AGENCY: LIOUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER. IN THE EVENT THAT THE AGENCY COMMITS A MATERIAL BREACH OFITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE PURCHASER WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE PURCHASER'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE AGENCY, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE PURCHASER IN THE EVENT OF SUCH DEFAULT BY THE AGENCY UPON THE TERMINATION OF THIS AGREEMENT AND CANCELLATION OFTHE ESCROW, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE PURCHASER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE AGENCY. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE PURCHASER WAIVES ANY AND ALL RIGHTS WHICH THE PURCHASER OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE PURCHASER AND THE AGENCY ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Agency Initials of Purchaser Section 2.23. BREACH BY THE PURCHASER OF ARTICLE II: LIOUIDA TED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY. IN THE EVENT THAT THE PURCHASER COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE SB200 U2036.2 15 ,r-- ~ I"""" \- I""'""' '-" AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEF AUL T BY THE PURCHASER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEF AUL T BY THE PURCHASER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW ORIN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE PURCHASER. WITHOUT LIMITING THE FOREGOING PROVISIONS OFTHIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE PURCHASER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Purchaser Initials of Agency Section 224. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession of the Property to Purchaser at the Close of Escrow , the risk ofloss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty, prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to Purchaser promptly after the occurrence of the casualty. Thereafter the Purchaser can elect to either: (i) accept the Property in its damaged condition or (ii) the Purchaser may terminate this Agreement and recover the Deposit, as set forth in Section 2.02. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency that the Property suffered material damages. In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereof to Purchaser, and Purchaser shall have the option either: (i) to elect not to acquire the Property, terminate the Agreement and recover the Deposit, as set forth in Section 2.02; or (ii) the Purchaser may complete the acquisition of the Property under this Agreement, in which case the Purchaser shall be entitled to all of the proceeds paid in compensation for such taking; provided, however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow without the Purchaser's prior written consent, which consent will not be unreasonably withheld or delayed. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency of commencement of eminent domain proceedings against the Property. SB200J ,22036.2 16 ,,- 1 '-" ,,- \...... r- ---. ARTICLE III USE AND MAINTENANCE OF THE PROPERTY Section 3.0 I. Use of the Prooertv. The Purchaser covenants and agrees for itself, its successors and assigns that the Property shall be used in conformity with all applicable laws. Section 3.02. Maintenance of the Prooertv. The Purchaser for itself, its successors and assigns hereby covenants and agrees that: (a) The areas of the Property which are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time within twenty (20) years following the date of recordation of the Agency Grant Deed there is an occurrence of an adverse condition on any area of the Property which is subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notifY the Purchaser in writing of the Maintenance Deficiency and give the Purchaser thirty (30) days from receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Purchaser fails to cure or commence to cure the Maintenance Deficiency within the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereof to the Purchaser ten (10) days prior to the scheduled date of such public hearing in order to verifY whether a Maintenance Deficiency exists and whether the Purchaser has failed to comply with the provisions of this Section 3.02(a). If upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, described above, thereafter the Agency shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or in equity which the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Property authorized by this Section 3.02(a) shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Purchaser, the Agency shall have the right to enforce the lien in the manner as provided in Section 3.02(c). (b) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of the building or any other structure on the Property which is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Purchaser by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within 72 hours following the time of such application, the Agency shall have the right to enter the Property and remove the graffiti without notice to the Purchaser. Any sum expended by the Agency for the removal of graffiti from the Property authorized by this Section 3.02(b) in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) SB200 1,22036.2 17 ,-. .~ r \....- .-. ---- '. days after written demand to the Purchaser by the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 3.02(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 3.02 expressly include the power to establish and enforce a lien or other encumbrance against the Property, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Property to the maintenance standard required under Section 3.02(a) or Section 3.02(b), including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. The provisions of this Section 3.02 shall be a covenant running with the land for a term of twenty (20) years following the date of recordation of the Agency Grant Deed, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 3.02 shall be deemed to preclude the Purchaser from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City. Section 3.03. Transfer ofProoertv to Exempt Person or Grant of Exemotion from PaYment of Prooertv Taxes. The Purchaser covenants and agrees that (i) in the event that the Property, or any portion thereof, shall within twenty (20) years from the date of recordation of the Agency Grant Deed be conveyed or transferred or sold by the Purchaser, its successors or assigns, to any entity or party that is partially or wholly exempt from the payment of ad valorem property taxes pertinent to the Property or any portion of the Property or (ii) in the event the Purchaser applies for and receives from the San Bernardino County Assessor an exemption from the payment of ad valorem property taxes pertinent to the Property, either in whole or in part, within twenty (20) years from the date of recordation of the Agency Grant Deed, the Purchaser, its heirs or assigns shall pay the Agency a fee in lieu of payment of such taxes each year in an amount which is determined by the Agency to be one percent (1.0%) ofthe full cash value of the Property, or portion thereof, as may be subject to such exemption from payments of ad valorem property taxes. Such determination of "full cash value" for such in-lieu payment purposes under this Section 3.04 shall be established by the Agency each year, if necessary, by reference to the as valorem property tax valuation principles and practices as generally applicable to a county property tax assessor under Section 2 of Article XIIlA of the California Constitution. In the event that the Agency may hereafter determine that an amount is payable by the Purchaser to the Agency as an in-lieu payment under this Section 3.04 in any tax year, then such amount shall be paid to the Agency for that tax year within ninety (90) days following transmittal of notice of invoice for payment of the in-lieu amount by the Agency to the Purchaser. The provisions of this covenant shall be referenced in the Agency Grant Deed. Section 3.04. Obligation to Refrain from Discrimination. The Purchaser covenants and agrees for itself, its successors, its assigns and every successor-in-interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Purchaser, itself or any person claiming under or through it, establish or permit any such practice or SB2oo1 :22036.2 18 c I"""" \.- .- " .---. practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees ofthe Property. The covenant of this Section 3.04 shall run with the land for the time period set forth in the Agency Grant Deed. Section 3.05. Form of Nondiscrimination and Nonsel!regation Clauses. The Purchaser covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to the Property, or any part thereof, that the Purchaser, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (I) In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, oftenants lessees, sublessee, subtenants, or vendees in the premises herein leased." (3) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or SB2001 :22036.2 19 r' '- c - ,-. occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 3.05 shall run with the land in perpetuity. ARTICLE IV DEFAULTS. REMEDIES AND TERMINA nON Section 4.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II of this Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 5.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default commences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice from the injured party specifying such default, and shall diligently and continuously prosecute such cure, correction orremedyto completion (and where anytime limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of their rights and/or remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 4.02. Leeal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court of the State of California in and for the County of San Bernardino in any other appropriate court within said County, or in the Federal District Court for the Central District of California. SB200L22036.2 20 r-. \..-. r '- ~, '-' (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is commenced by the Purchaser against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair ofthe Community Development Commission, or in such other manner as may be provided by law. (d) In the event that any legal action is commenced by the Agency against the Purchaser, service of process on the Purchaser shall be made by personal service on Richard Schindler, a member of the Purchaser, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 4.03. Rig:hts and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies of the parties as set forth in this Article V following the Close of Escrow are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 4.04. Damal!es. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently commence to cure such default after service of such notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for default), after the service of written notice of such a default. In the event that a default relates to a matter arising after the Close of Escrow, the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of the Agreement. Section 4.05. Soecific Performance Prior to Close of Escrow. Prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies ofthe parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts set forth in Article II of this Agreement. ARTICLE V GENERAL PROVISIONS Section 5.01. Notices. Demands and Communications Between the Parties. SB200 1:22036.2 21 c r- \- /~ '- (a) Any and all notices, demands or communications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for immediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Purchaser, as applicable, as designated in Section 1.04(a) and Section 1.04(b) hereof. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail, as heretofore provided. Either party may change its address for notices under this Agreement by giving notice to the other party, specifying that the purpose of the notice is to change the party's address. (b) In addition to the submission of notices, demands or communications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Purchaser: Fallbrook Capital, LLC FAX: (909) 425-2097 Attention: Richard Schindler to the Agency: FAX: (909) 384-5135 Attention: Ann Harris with copy to: Lewis, D' Amato, Brisbois & Bisgaard LLP FAX: (909)387-1138 Attention: Diane R. Holman, Esq. Section 5.02. Conflict of Interest. No member, official or employee of the Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Property shall participate in any decision relating to the Agreement. The parties represent and warrant that they do not have knowledge of i1I1Y such conflict of interest. Section 5.03. Warrantv Against PaYment of Consideration for Al!reement. The Purchaser warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Purchaser. Section 5.04. NonliabilitvofAgencvOfficials and Emolovees. No member, official or employee of the Agency shall be personally liable to the Purchaser, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Purchaser or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee. SB2oo1 :22036.2 22 c c ,~ '-' Section 5.05. Enforced Delav: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or govemmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension of time for any such force majeure cause shall be for the period of the enforced delay and shall commence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence of the delay within ten (10) days of the commencement of such occurrence of delay. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 5.06. Approvals. (a) Approvals required of the Agency or the Purchaser, or any officers, agents or employees of either the Agency or the Purchaser, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, ifno time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are of routine or technical nature, including minor adjustments to the Schedule of Performance. Section 5.07. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise from or be related to this Agreement. The Purchaser shall pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals. SB2001 :220362 23 c Section 5.08. Indemnification. The Purchaser agrees to indemnifY and hold the City and the Agency, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Purchaser in performing its obligations hereunder. The Agency agrees to indemnify and hold the Purchaser and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. Section 5.09. Release of Purchaser from Liabilitv. Notwithstanding any provision herein to the contrary, the Purchaser shall be relieved of any and all liability for the obligations of the Purchaser hereunder with regard to the Property on and as of that date which is the five-year anniversary ofthe Close of Escrow, other than any covenants and obligations provided by the grant deed by which the Property is conveyed to the Purchaser hereunder. Section 5.10. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to Section 4.02 hereof, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Purchaser and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section 4.02 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution of disputes as set forth in Section 4.02 hereof, in such action or proceeding or in a separate action ,r or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City \..- Attorney and members of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of this Section. Section 5.11. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. ARTICLE VI ENTIRE AGREEMENT. WAIVERS AND AMENDMENT Section 6.01. Entire Al!reement. (a) This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Property and the development thereof. .r '- (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this SB2oo1 :22036.2 24 r '-' ~ , '- ,- '''''-" Agreement shall continue in full force and effect before and after such conveyance until that date which is the five-year anniversary of the Close of Escrow, (d) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Purchaser. 5B2ool,22036.2 25 r '- ,,- \..- -- '~ IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Judith Valles Chair of the Community Development Commission Date: By: Gary Van Osdel Executive Director APPROVED AS TO FORM: Agency Special Counsel PURCHASER F ALLBROOK CAPITAL, LLC, a Nevada limited liability company Date: By: Member Date: By: Member [All Signatures Must Be Notarized] SB200U2036.2 26 ,"'" \- c -- '- EXHffiIT "A" LEGAL DESCRIPTION OF THE PROPERTY SB200 1:22036.2 Exh. "A" - I c .- \.- .-. ~ EXHffiIT "B" AGENCY GRANT DEED 58200 I :22036.2 Exh. "B" - I ,.- '- r \.- ,'- '\.- AGENCY GRANT DEED RECORDING REQUESTED BY AND ) AFTER RECORDING MAIL TO: ) ) Fallbrook Capital, LLC ) 7750 Palm Avenue, Suite J ) Highland, CA 92346 ) (Space Above for Recorder's Use) For valuable consideration, the receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic of the State of California ("Grantor") hereby grants to Fallbrook Capital, LLC, a Nevada limited liability company ("Grantee") the real property legally described in Exhibit "A" and by this reference incorporated herein ("Property"). I. The Property is conveyed subject to that certain Disposition and Development Agreement dated as of ,2001 ("Agreement"). The provisions of the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set forth at length herein. 2. The Grantee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property. All deeds, leases or contracts made relative to the Property shall contain the following nondiscrimination clauses: (a) In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, SB2ooL23846,l 1 c r '- - / '- number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agency Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the Agreement; provided, however, that any successor of Grantee to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 4. The covenants set forth in Article III of the Agreement shall remain in effect for a period of five (5) years from the date hereof, except that the covenant regarding payments of a fee in lieu of taxes upon the transfer ofthe Property to an exempt person or following a grant of exemption from the payment of property taxes set forth in Section 3.03 of Article III of the Agreement shall remain in effect for twenty (20) years from the date of recordation of this Agency Grant Deed and the covenants against discrimination set forth in Section 3.04 and Section 3.05 of Article III of the Agreement and in this Agency Grant Deed shall remain in effect in perpetuity. 5. The covenants contained in this Agency Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor of the SB2ool,23846.1 2 c c /'~ \.- Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successor. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of ,2001. Grantor: REDEVELOPMENT AGENCY OF TIIE CITY OF SAN BERNARDINO By: Chairperson By: Secretary APPROVED AS TO FORM: Lewis, D' Amato, Brisbois & Bisgaard, LLP By: Agency Special Counsel THE PROVISIONS OF THIS AGENCY GRANT DEED ARE HEREBY APPROVED AND ACCEPTED. Grantee: FALLBROOK CAPITAL, LLC, a Nevada limited liability company By: Member SB2oo1,23846.1 3 ,r- \...... c r \-. 582001023846.1 4 By: Member ,."..... ......... c ,,,..- '- EXHIBIT "A" LEGAL DESCRIPTION 5B2ool:23846.1 5 c SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 IN CONNECTION WITH THE SALE OF CERTAIN PROPERTY 1. INTRODUCTION This Summary Report has been prepared by the Redevelopment Agency of the City of San Bernardino (the "Agency)) pursuant to Section 33433 of the California Health and Safety Code. This Summary Report sets forth certain details of the proposed sale by the Agency of real property with approximately one (3.14) acres ofland, described as Assessor Parcel Number 0143-012-72,73 with an approximate 28,650 square foot building thereon located at 1505 West Highland Ave., San Bernardino, California, The building will be sold to Fallbrook LLC. The Agency received The Public Enterprise Building through foreclosure in 1987. The property is currently being utilized by non-profit organizations, the City Library and Parks and Recreation. The new owner has agreed to keep the Library as a tenant and will give all the current tenants the opportunity to stay as tenants if they so desire. c The cost to the Agency to maintain and secure the property to date is $2,837,494.41. The average annual income derived from the property is $36,003.23. The average annual cost to the agency to maintain the property has been $158,098.93. 11: COST OF THE TRANSACTION TO THE AGENCY Pursuant to the Disposition and Development Agreement the buyer has deposited $5,000.00 as a good faith deposit. following the public hearing, and on closing of escrow pay the remaining balance of$465,000,0Q in cash. The Agency is responsible for the standard owner sale costs, Specifically at closing of escrow the Agency shall pay: (i) County and City transfer tax, (ii) costs of the an Owner's Policy of Title Insurance (iii) one-half of escrow fees and a standard sales commission, Based upon the foregoing it is estimated that closing costs to the Agency will be approximately $ 2,000.00. 111 : VALUE OF THE INTEREST BEING CONVEYED BY THE AGENCY r- '- I. Highest and Best Use Service, non-profits and office users represent the highest and best use of the property. c Page 2 Summary Report IV. REASON SALE WILL ASSIST IN THE ELIMINATION OF BLIGHT The reuse of this property will help eliminate blighting conditions in the Northwest Project Area, will put the property back on the tax roles, eliminate an annual expense to the agency, increase property values and will result in creation of additional employment opportunities. V. CONFORMANCE WITH IMPLEMENTATION PLAN The Five-Year Implementation Plan adopted by the Agency contains several broad goals and objectives. The proposed sale of the property will assist the Agency in meeting some of the objectives and goals of its implementation plan in the following ways. I, The sale encourages a reinvestment and revitalization in the geographical area, c 2. The provision of the building and it occupancy by non-profit and commercial tenants will increase employment in the project area, providing a catalyst for additional reinvestment by private enterprise in the surround area. 3, The building will help to create additional job opportunities in the community. VI. ATTACHMENTS I. Approving resolutions 2. DDA ABH r- \- I RESOLUTION NO. 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE 3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT 4 AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF TilE CITY OF SAN BERNARDINO AND FALLBROOK CAPITAL, LLC, ON 5 THE TERMS SET FORTH IN SUCH AGREEMENT 6 WHERli;AS, the Redevelopment Agency of the City of San Bernardino (the "Agency") owns or 7 has a beneficial Interest in certain real property situated within the Northwest Project Area and 8 commonly known as the Public Enterprise Centerlocated at 1505 W. Highland Avenue, San Bernardino, 9 California (the "Property"); and 10 WHEREAS, the Agency staffhas prepared a draft of a Disposition and Development Agreement 11 (the "Agreement") for the disposition of the Property to Fallbrook Capital, LLC, a Nevada limited 12 liability company, or its assign (in either case, the "Purchaser"), together with a report which 13 summarizes the key terms ofthe Agreement and describes the manner in which the proposed disposition 14 of the Property to the Purchaser will assist in the elimination of blight (the "33433 Report") in 15 accordance with Health and Safety Code Section 33433; and 16 WHEREAS, it is appropriate for the Commission to take action with respect to the disposition 17 of the Property to the Purchaser and approve the Agreement as set forth in this Resolution. 18 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING ON 19 BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO DOES 20 HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 21 Section 1. On September 17,2001, the Commission conducted a full and fair joint public 22 hearing with the Mayor and Common Council of the City of San Bernardino relating to the disposition 23 of the Property by the Agency to the Purchaser pursuant to the terms and conditions of the Agreement. 24 The minutes of the Agency Secretary for the September 17, 2001, meeting of the Commission shall 25 include a record of all communication and testimony submitted to the Commission by interested persons 26 relating to the joint public hearing, the 33433 Report and the approval of the Agreement. 27 28 SB200\:23914.\ 1 1 Section 2. A copy of the Agreement in the form submitted at the joint public hearing is on 2 file with the Agency Secretary. The Commission hereby finds and determines as follows: 3 "" (i) the disposition of the Property by the Agency to the Purchaser in accordance with the " 4 Agreem~t is consistent with the Redevelopment Plan and the current Agency Implementation Plan for " 5 the Northwest Project Area; 6 (ii) . tfu:,terms and conditions of the Agreement contain assurances that the Property will be 7 used and maintained'as contemplated under the Redevelopment Plan; 8 (iii) " the purch~.e price for the Property payable by the Purchaser to the Agency, subject to th 9 satisfaction of the terms aild conditions of the Agreement, is an amount which the Commission 10 determines to be fair, just and reasonable, and the disposition ofthe Property on the terms set forth in 11 the Agreement shall materially benefit and sustain the implementation of the Redevelopment Plan and 12 assist the community to alleviate blighting conditions; and 13 (iv) the consideration payable by the Purchaser to the Agency for the disposition of the 14 Property ($470,000.00, in cash) is not less than the fairreuse value at the use and with the covenants and 15 conditions and development costs authorized by the Agreement. 16 Section 3. The Commission hereby finds and determines that the activity to take place on 17 the Property under the terms of the Agreement involves negligible or no expansion of use beyond that 18 previously existing on the Property and is exempt from the provisions ofthe California Environmental 19 Quality Act ("CEQA") pursuant to Section 21084 of the California Public Resources Code and Article 20 19 (Section 15301) of the State CEQA Guidelines developed thereunder. 21 Section 4. The Commission hereby approves, receives and files the 33433 Report and the 22 Agreement in the forms as submitted at the joint public hearing. 23 Section 5. The Commission hereby approves the disposition of the Property to the Purchaser 24 on the terms set forth in the Agreement. The Chair of Commission and the Executive Director are 25 hereby authorized and directed to execute the Agreement on behalf of the Agency together with such 26 technical and conforming changes as may be recommended by the Executive Director and approved by 27 28 S82oo1:23914.1 2 I the Chair of the Commission. The signatures of the Chair of the Commission and the Executive Director 2 on the Agreement shall be conclusive evidence that the Agreement has taken effect. In the event that 3 the .Agreement may not be fully executed by the parties for any reason within thirty (30) days following 4 the date of adoption of this Resolution, the authorization granted to the Chair of the Commission and 5 the Executive Director to execute the Agreement on behalf of the Agency shall be of no further force 6 and effect. 7 Section 6. Provided that the Agreement has been fully executed by the parties within the 8 period of time set forth in Section 5 of this Resolution, the Executive Director of the Agency is hereby 9 authorized and directed to take all actions set forth in the Agreement on behalf of the Agency to close 10 the escrow transaction described therein. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SB2001:23914.1 3 1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AS THE GOVERNING BODY OF THE REDEVELOPMENT 2 AGENCY OF THE CITY OF SAN BERNARDINO, APPROVING THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE 3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK CAPITAL, LLC, ON THE TERMS SET FORTH IN SUCH AGREEMENT 4 5 6 Section 7. This Resolution shall become effective immediately upon its adoption. 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission of the City of San Bernardino at a meeting thereof, held on the 9 10 day of ,2001, by the following vote, to wit: 11 Commission ESTRADA 12 LIEN MCGINNIS 13 SCHNETZ SUAREZ 14 ANDERSON McCAMMACK AYES NAYS ABSTAIN ABSENT 15 16 17 18 19 20 21 22 23 By: A 24 25 26 27 28 SB2001:2J914,1 Secretary The foregoing Resolution is hereby approved this _ day of ,2001. Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 4 1 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss 2 CITY OF SAN BERNARDINO ) 3 I, Secretary of the Community Development Commission of the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of 4 Community Development Commission of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this office. 5 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of 6 the Community Development Commission of the City of San Bernardino this day of 2001. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Secretary of the Community Development Commission ofthe City of San Bernardino 28 SB200\:23914.\ 5 I RESOLUTION NO. 2 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT 3 RELATING TO THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF 4 THE CITY OF SAN BERNARDINO AND F ALLBROOK CAPITAL, LLC 5 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") owns 6 or has a beneficial interest in certain real property situated within the Northwest Project Area and 7 commonly known as the Public Enterprise Centerlocated at 1505 W. Highland Avenue, San Bernardino, 8 California (the "Property"); and 9 WHEREAS, the Agency staffhas prepared a draft of a Disposition and Development Agreement 10 (the "Agreement") for the disposition of the Property to Fallbrook Capital, LLC, a Nevada limited II liability company, or its assign (in either case, the "Purchaser"), together with a report which 12 summarizes the key terms ofthe Agreement and describes the manner in which the proposed disposition 13 of the Property to the Purchaser will assist in the elimination of blight (the "33433 Report") in 14 accordance with Health and Safety Code Section 33433; and IS WHEREAS, it is appropriate for the Mayor and Common Council to take action with respect to 16 the disposition of the Property to the Purchaser and the Agreement in accordance with Health and Safety 17 Code Section 33433 (a) (I). 18 NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE 19 MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 20 Section 1. On September 17, 200 I, the Mayor and Common Council conducted a full and 21 fair joint public hearing with the Community Development Commission ofthe City of San Bernardino 22 relating to the disposition of the Property by the Agency to the Purchaser pursuant to the terms and 23 conditions ofthe Agreement. The minutes of the City Clerk for the September 17,2001, meeting ofthe 24 Mayor and Common Council shall include a record of all communication and testimony submitted to 25 the Mayor and Common Council by interested persons relating to the joint public hearing, the 33433 26 Report and the approval of the Agreement. 27 28 88200],24092.1 1 1 Section 2. This Resolution is adopted in order to satisfY the provisions ofHeaIth and Safety 2 Code Section 33433 relating to the disposition and sale ofthe Property by the Agency to the Purchaser \ 3 on the terms and conditions set forth in the Agreement. A copy of the Agreement in the form submitted 4 at the joint public hearing is on file with the Agency Secretary. The Mayor and Common Council hereby 5 find and determine as follows: 6 (i) the disposition of the Property by the Agency to the Purchaser in accordance with the 7 Agreement is consistent with the Redevelopment Plan and the current Agency Implementation Plan for 8 the Northwest Project Area; 9 (ii) the terms and conditions of the Agreement contain assurances that the Property will be lOused and maintained as contemplated under the Redevelopment Plan; 11 (iii) the purchase price for the Property payable by the Purchaser to the Agency, subject to th 12 satisfaction ofthe terms and conditions of the Agreement, is an amount which the Mayor and Common 13 Council determine to be fair, just and reasonable, and the disposition of the Property on the terms set 14 forth in the Agreement shall materially benefit and sustain the implementation ofthe Redevelopment 15 Plan and assist the community to alleviate blighting conditions; and 16 (iv) the consideration payable by the Purchaser to the Agency for the disposition of the 17 Property ($470,000.00, in cash) is not less than the fairreuse value at the use and with the covenants and 18 conditions and development costs authorized by the Agreement. 19 Section 3. The Mayor and Common Council hereby find and determine that the activity to 20 take place on the Property under the terms of the Agreement involves negligible or no expansion of use 21 beyond that previously existing on the Property and is exempt from the provisions of the California 22 Environmental Quality Act ("CEQA") pursuant to Section 21084 of the California Public Resources 23 Code and Article 19 (Section 15301) ofthe State CEQA Guidelines developed thereunder. 24 Section 4. The Mayor and Common Council hereby approve, receive and file the 33433 25 Report and the Agreement in the forms as submitted at the joint public hearing. 26 27 28 SB200124092.1 2 I Section 5. The Mayor and Common Council hereby approve the disposition of the Property 2 to the Purchaser on the terms set forth in the Agreement. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 58200124092.1 3 I A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACKNOWLEDGING RECEIPT OF A REPORT RELATING TO THAT 2 CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND FALLBROOK 3 CAPITAL, LLC \ 4 Section 6. This Resolution shall take effect upon the date of its adoption. 5 6 7 8 9 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a meeting thereof, held on the day of ,2001, by the following vote, to wit: Council: 10 ESTRADA LIEN 11 MCGINNIS SCHNETZ 12 SUAREZ ANDERSON 13 McCAMMACK 14 15 AYES NAYS ABSTAIN ABSENT City Clerk 16 17 18 19 20 21 22 23 24 25 26 27 The foregoing resolution is hereby approved this _ day of ,2001. Judith Valles, Mayor City of San Bernardino 28 SB200!:24092.! 4 1 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss 2 CITY OF SAN BERNARDINO ) 3 I, City Clerk ofthe City of San Bernardino, DO HEREBY 4 CERTIFY that the foregoing and attached copy of Mayor and Common Council of the City of San Bernardino Resolution No. is a full, true and correct copy of that now on file in this 5 office. 6 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the Mayor and Common Council ofthe City of San Bernardino this day of ,2001. 7 8 9 10 11 12 13 14 City Clerk City of San Bernardino 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5B2oo1 :24092.1 5 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 North "E" Street Suite 301 San Bernardino, California 92401 (Space Above Line for Use By Recorder) 2001 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND F ALLBROOK CAPITAL, LLC SB2001 :22036.2 TABLE OF CONTENTS Page Section 1.01. Purpose of Agreement .............................................. 1 Section 1.02. The Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Section 1.03. Parties to the Agreement ............................................ 1 Section 1.04. Benefit to Project Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II DISPOSITION OF THE PROPERTY . . . . . . . . . . . . . . . . . . . . . . 2 Section 2.01. Purchase and Sale of the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Section 2.02. Deposit and Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 2.03. Opening and Closing of Escrow ...................................... 3 Section 2.04. Escrow Instructions ................................................ 3 Section 2.05. Conveyance of TitIe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Section 2.06. Additional Closing Obligations of Agency .............................. 4 Section 2.07. Closing Obligations of Purchaser ..................................... 5 Section 2.08. Inspections and Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.09. Due Diligence Investigation of the Property By the Purchaser ...............7 Section 2.10. Due Diligence Approval Certificate ................................... 8 Section 2.11. Books and Records ................................................ 8 Section 2.12. Condition ofthe Property-Purchaser's Release. . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 2.13. Review and Approval of Condition of TitIe by the Purchaser. ... .. .. .. . .. ..10 Section 2.14. Survey ......................................................... II Section 2.15. Extension of Due Diligence Period ...................................11 Section 2.16. Purchaser's Conditions Precedent to Close Escrow. . . . . . . . . . . . . . . . . . . . . . . II Section 2.17. The Agency's Conditions Precedent to Close of Escrow . . . . . . . . . . . . . . . . . . . 12 Section 2.18. Distribution of Documents and Purchase Price After Closing Date by Escrow Holder .................................................. 13 Section 2.19. Satisfaction of Conditions .......................................... 13 Section 2.20. [RESERVED -- NO TEXT] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 2.21. Prorations, Closing Costs, Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 2.22. BREACH OF ARTICLE II BY THE AGENCY; LIQUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER .......14 Section 2.23. BREACH BY THE PURCHASER OF ARTICLE II; LIQUIDATED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY ....... 15 Section 2.24. Damage, Destruction and Condemnation .............................. 15 ARTICLE ill USE AND MAINTENANCE OF THE PROPERTY. . . . . . . . . . . . . . . 16 SB200 I :22036.2 -1- Section 3.01. Use ofthe Property ............................................... 16 Section 3.02. Maintenance of the Property ........................................ 16 Section 3.03. Taxes and Assessments ............................................ 17 Section 3.04. Transfer of Property to Exempt Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 3.05. Obligation to Refrain from Discrimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 3.06. Form of Nondiscrimination and Nonsegregation Clauses. . . . . . . . . . . . . . . . . . 18 ARTICLE N DEFAULTS. REMEDIES AND TERMINATION................ 19 Section 4.01. Defaults - General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 4.02. Legal Actions .................................................... 20 Section 4.03. Rights and Remedies are Cumulative .................................20 Section 4.04. Damages........................................................ 20 Section 4.05. Specific Performance Prior to Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . .20 ARTICLE V GENERAL PROVISIONS ......................... 21 Section 5.01. Notices, Demands and Communications Between the Parties ..............21 Section 5.02. Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 5.03. Warranty Against Payment of Consideration for Agreement ...............21 Section 5.04. Nonliability of Agency Officials and Employees ........................ 22 Section 5.05. Enforced Delay: Extension of Time of Performance . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.06. Inspection of Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.07. Approvals ....................................................... 23 Section 5.08. Real Estate Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Section 5.09. Indemnification ..................................................23 Section 5.10. Release of Purchaser from Liability. .. . .. . .. . .. . .. . .. . .. .. .. . .. .. ... ..23 Section 5.11. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Section 5.12. Effect .......................................................... 23 ARTICLE VI ENTIRE AGREEMENT. WAIVERS AND AMENDMENT . . . . . . . . . . . . 24 Section 6.01. Entire Agreement .................................................24 EXHffin "A" EXHIBIT "B" - LEGAL DESCRIPTION AGENCY GRANT DEED 8B2001 :22036,2 -ii- 2001 DISPOSITION AND DEVELOPMENT AGREEMENT (Fallbrook Capital, LLC) THIS 2001 DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of --' 2001, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body corporate and politic (the "Agency"), and Fallbrook Capital, LLC, a Nevada limited liability company or its successor and assign (in either event, the "Purchaser"). The Agency and the Purchaser hereby agree as follows: Section 1.01. Pumose of Agreement. The purpose of this Agreement is to implement the Redevelopment Plan for the Northwest Project Area (the "Project Area") by providing for the purchase, use and maintenance by the Purchaser of that certain real property located at 1505 W. Highland Avenue, San Bernardino, California, and more particularly described in Exhibit "A" hereto, improved by an office building. The land and building which are subject to this Agreement are referred to herein as the "Property". As of the date of this Agreement, the Property is owned by the Agency. The purchase, use and maintenance of the Property pursuant to this Agreement is in the vital and best interests of the City of San Bernardino (the "City") and the health, safety and welfare of its residents, and is in accord with the public purposes and provisions of applicable state and local laws. The Agency has determined that the purchase, use and maintenance of the Property contemplated by this Agreement is consistent with the Redevelopment Plan for the Project Area. Section 1.02. The ProDertv. The Property consists of an approximately 28,650 square foot office building commonly known as the Public Enterprise Center ("PEC") situated on three acres of land, more or less. The Purchaser intends to lease offices in the PEC to community- based non-profit and/or educational organizations. Section 1.03. Parties to the Al!reement. (a) The Agency is a public body, corporate and politic, exercising govemmental functions and powers and organized and existing under Chapter 2 ofthe Community Redevelopment Law of the State of California (Health and Safety Code Section 33020, et sea.) The principal office of the Agency is located at 201 North "E" Street, Suite 301, San Bernardino, California 92401. (b) The principal office and mailing address ofthe Purchaser for purposes ofthis Agreement is 7750 Palm Avenue, Suite J, Highland, California 92346. (c) The City of San Bernardino is not a party to this Agreement. S8200 1:22036.2 1 Section 1.04. Benefit to Proiect Area. The Agency has determined that the purchase, use and maintenance of the Property in accordance with this Agreement will materially assist in the elimination of blight and the implementation of the Redevelopment Plan for the Project Area. ARTICLE II DISPOSITION OF THE PROPERTY Section 2.01. Purchase and Sale of the Prooertv. Subject to all of the terms, conditions and provisions of this Agreement, and for the consideration of the Purchase Price as herein set forth, the Agency hereby agrees to sell via grant deed to the Purchaser merchantable lien free title to the Property and the Purchaser hereby agrees to purchase the Property. The purchase price which the Agency agrees to accept from the Purchaser and which the Purchaser agrees to pay to the Agency for the Property is Four Hundred Seventy Thousand Dollars ($470,000.00) in United States currency (the "Purchase Price"). For all purposes of this Agreement, the legal description of the Property attached hereto as Exhibit "A" shall be definitive and controlling as to the location, size or other aspect of the Property. Section 2.02. Deoosit and Payment of Purchase Price. (a) Within five (5) calendar days following the execution ofthis Agreement by both parties, the Purchaser shall deliver to the Escrow Holder (as hereinafter defined) the sum of Five Thousand Dollars ($5,000.00) (the "Deposit"). Upon receipt of the Deposit and a fully executed copy of this Agreement, the Escrow Holder shall cause the Escrow (as hereinafter defined) to be opened, as provided in Section 2.03. The Escrow Holder shall place the Deposit into an interest-bearing escrow account with the interest thereon to accrue to the benefit of the Purchaser. At the Close of Escrow (as hereinafter defined), the Deposit shall be applied as a credit to the Purchase Price. (b) Payment of Balance of Purchase Price. The Purchase Price, less the Deposit, shall be tendered by the Purchaser to the Escrow Holder on the Closing Date (as hereinafter defined) for disbursement to the Agency at the Close of Escrow in cash or immediately available funds. (c) The Deposit (less an amount equal to the customary and reasonable escrow cancellation charges of the Escrow Holder) shall be returned to the Purchaser in the event that: (i) the Agency or the Purchaser terminates this Agreement pursuant to Section 2.13(a); or S82001 :22036.2 2 (ii) the Purchaser does not deliver its Due Diligence Approval Certificate (as hereinafter defined) to the Escrow Holder pursuant to Section 2.03(b) and this Agreement is terminated; or (iii) the Purchaser's conditions precedent to the Close of Escrow described in Section 2.16(1), (2), (3), (4) or (5) are not satisfied (unless satisfaction has been waived by the Purchaser) and this Agreement is terminated; or (iv) the Property is materially damaged prior to the Close of Escrow, or an action of eminent domain is commenced by a goverrunental entity with respect to the Property prior to the Close of Escrow, and the Purchaser elects to terminate this Agreement pursuant to Section 2.24. Section 2.03. Ooening and Closing of Escrow. (a) The transfer and sale of the Property shall take place through an Escrow (the "Escrow") to be administered by First American Title Company Escrow Department or such other escrow or title insurance company mutually agreed upon by the Purchaser and the Agency (the "Escrow Holder"). The Escrow shall be deemed open ("Opening of Escrow") upon the receipt by the Escrow Holder of a copy of this Agreement fully executed by both parties hereto and the Deposit. The Escrow Holder shall promptly confirm to the parties the escrow number and the title insurance order number assigned to the Escrow. (b) In the event that the Purchaser has not delivered its Due Diligence Approval Certificate to the Agency and the Escrow Holder within thirty (30) days from the Opening of Escrow for any reason, then in such event this Agreement shall terminate upon written notice to the Escrow Holder from either the Agency or the Purchaser, whereupon the Deposit shall be returned by the Escrow Holder to the Purchaser (less an amount equal to the customary and reasonable escrow cancellation charges payable to the Escrow Holder) without further or separate instruction to the Escrow Holder, and the parties shall each be relieved and discharged from all further responsibility or liability under this Agreement. (c) Provided that the Purchaser has delivered its Due Diligence Approval Certificate within the period of time authorized in Section 2.03(b), then the Closing Date of the Escrow shall occur within fifteen (15) days thereafter, subject to the provisions of Section 2.16 and Section 2.17. The words "Close of Escrow," "Closing Date" and "Closing" shall mean and refer to the date when the Escrow Holder is in receipt of the Purchase Price and the related Escrow documents of the parties and the Escrow Holder is in a position to comply with the final written escrow closing instructions of the parties and cause the Agency Grant Deed (as hereinafter defined) for the Property to be recorded and the policy oftitle insurance for the Property to be delivered to the Purchaser. S82001 :22036.2 3 Section 2.04. Escrow Instructions. This Agreement shall also constitute the escrow instructions of the parties to the Escrow Holder. Additionally, the Purchaser and the Agency each agree to execute the customary supplemental escrow instructions of the Escrow Holder in the form provided by the Escrow Holder to its clients in real property escrow transactions administered by it. In the event of a conflict between the additional terms of such customary supplemental escrow instructions of the Escrow Holder and the provisions of this Agreement, this Agreement shall supersede and be controlling. Upon any termination of this Agreement or cancellation of the Escrow, the Purchaser shall be solely responsible for the payment of the escrow cancellation costs of the Escrow Holder and the Escrow Holder shall forthwith return all monies (as provided in this Agreement) and documents, less only the Escrow Holder's customary and reasonable escrow cancellation fees and expenses, as set forth herein. Section 2.05. Convevance of Title. On or before 12:00 noon on the business day preceding the Closing Date, the Agency shall deliver to the Escrow Holder a grant deed in the form attached hereto as Exhibit "B" (the "Agency Grant Deed") duly executed and acknowledged by the Agency, which Agency Grant Deed shall convey all of its merchantable lien free right, title and interest in the Property to the Purchaser. The Escrow Holder shall be instructed to record the Agency Grant Deed in the Official Records ofthe Recorder of the County of San Bernardino, California, if and when Escrow Holder holds the various instruments and funds for the accounts ofthe parties, as set forth herein, and can obtain for the Purchaser an AL T A policy of title insurance ("Title Policy") issued by First American Title Insurance Company or such other title insurance company mutually agreed upon by the parties ("Title Company") with liability in an amount equal to the Purchase Price, together with such endorsements to the policy as may be reasonably requested by the Purchaser, insuring that the fee title to the Property vested in the Purchaser is free and clear of options, rights of first refusal or other purchase rights, leases or other possessory interests, lis pendens and monetary liens and/or encumbrances and subject only to: (I) (2) (3) (4) (5) (6) (7) S82001 :220362 non-delinquent real property taxes; non-monetary title exceptions approved by the Purchaser pursuant to Section 2.13 below; applicable provisions of the parcel map/subdivision map for the Property; the effect of the Redevelopment Plan for the Project Area; the effect of any conditions imposed by the City in connection with the proposed use of the Property; the provision of the Agency Grant Deed; the applicable provisions of this Agreement; and 4 (8) such other title exceptions, if any, resulting from documents being recorded or delivered through Escrow. Section 2.06. Additional Closing Obligations of Agency. On or before 12:00 noon on the business day preceding the Closing Date (unless indicated otherwise), the Agency shall deliver to the Escrow Holder (unless indicated to be delivered directly to the Purchaser) copies of the following documents and other items: (1) a certificate of non-foreign status (the "Non-Foreign Affidavit") executed by the Agency, in the customary form provided by the Escrow Holder, and a California Franchise Tax Board Form 590-RE executed by the Agency; (2) all soils, seismic, geologic, drainage, and environmental reports, and surveys, with respect to the Property, if any, which the Agency has in its possession and/or control to the extent that originals of such items have not been delivered previously by the Agency to the Purchaser pursuant to Section 2.08 below; (3) two (2) duplicate original copies of the Closing Statement described in Section 2.21, duly executed by the Agency; (4) evidence ofthe existence, organization and authority of the Agency and of the authority of persons executing documents on behalf of the Agency reasonably satisfactory to the Escrow Holder and Title Company; and (5) any other documents, instruments, funds and records required to be delivered to the Purchaser under the terms of this Agreement which have not been previously delivered. Section 2.07. Closing Obligations of Purchaser. On or before 12:00 noon on the business day preceding the Closing Date, the Purchaser shall deliver to the Escrow Holder copies of the following documents and other items: (1) an acknowledgment and acceptance of the Agency Grant Deed, duly executed and acknowledged by the Purchaser. (2) two (2) duplicate original copies of the Closing Statement, duly executed by the Purchaser. (3) evidence of the existence, organization and authority ofthe Purchaser and of the authority of persons executing documents on behalf of the Purchaser reasonably satisfactory to the Escrow Holder and the Title Company. SB200 I :22036.2 5 (4) evidence of the ability of the Purchaser to obtain any required permits, licenses or approvals in connection with the Purchaser's use of the Property. (5) any other documents, instruments or funds required to be delivered by the Purchaser under the terms of this Agreement or as otherwise required by Escrow Holder or Title Company in order to close Escrow which have not previously been delivered. Section 2.08. Inspections and Review. (a) Due Diligence Items. Within five (5) days after the execution of this Agreement, the Agency shall deliver true, correct and complete copies or originals of the following documents and items (collectively, "Due Diligence Items") to the Purchaser: (1) copies of all soils, seismic, geologic, drainage, engineering, environmental and similar type reports and surveys (including, but not limited to, any Property Environmental Site Assessments), surveys, relating to the Property if any, in the possession or control of the Agency; (2) notices of violations, including, but not limited to, zoning ordinances, development or building codes affecting the Property within the Agency's possession or control; (3) disclosure of any legal matters affecting the use or condition of the Property within the knowledge of the Agency; (4) a copy of the Redevelopment Plan for the Project Area. (b) Certain Definitions. For the purpose ofthis Agreement, the terms set forth below shall have the following meaning: (i) "environmental laws" means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property), occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 ("RCRA") [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water 582001:22036.2 6 SB200 I :22036.2 Pollution Control Act ("FWPCA") [33 USC Section 1251 et eq.]; the Toxic Substances Control Act ("TSCA") [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ("HMTA") [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 1100 I et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [H & S C Section 25288 et seq.]; the California Hazardous Substances Account Act [H & S C Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [H & S C Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use. (ii) "hazardous substances" includes without limitation: those substances included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," ''toxic substance," "solid waste," or "pollutant or contaminate" in CERCLA, RCRA, TSCA, HMT A, or under any other environmental law; and those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor agency, as hazardous substances [40 CFR Part 302]; and other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local laws or regulations; and any material, waste, or substance that is: (I) a petroleum or refined petroleum product, (2) asbestos, (3) polychlorinated biphenyl, 7 (4) designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317, (5) a flammable explosive, or (6) a radioactive material. Section 2.09. Due Diligence Investigation of the Propertv Bv the Purchaser. (a) Within thirty (30) days from and after the Opening of Escrow, and subject to the extensions oftime set forth below in Section 2.15, the Purchaser shall have the right to examine, inspect and investigate the Property (the "Due Diligence Period") to determine whether the condition of the Property is acceptable to the Purchaser and to obtain such approvals from the City in connection with the Purchaser's use of the Property, as the Purchaser may require in its sole and absolute discretion. (b) During the Due Diligence Period, the Agency shall permit the Purchaser, its engineers, analysts, contractors and agents to conduct such physical inspections and testing of the Property as the Buyer deems prudent with respect to the physical condition ofthe Property, including the inspection or investigation of soil and subsurface soil geotechnical condition, drainage, seismic and other geological and topographical matters, surveys the potential presence of any hazardous substances, if any. (c) Any such investigation work on the Property may be conducted by the Purchaser and/or its agents during any normal business hours upon seventy-two (72) hours prior notice to the Agency, which notice will include a description of any investigation work or tests to be conducted by the Purchaser on the Property. Upon the Agency's request, the Purchaser will provide the Agency with copies of any test results. (d) During the Due Diligence Period, the Purchaser shall also have the right to investigate all matters relating to the zoning, use and compliance with other applicable laws which relate to the use and development and improvement of the Property. (e) The Agency shall cooperate fully to allow the Purchaser to complete such inspections and investigations of the condition of the Property. The Agency shall have the right, but not the obligation, to accompany the Purchaser during such investigations and/or inspections. The Purchaser shall pay for all costs and expenses associated with the conduct of all such Due Diligence investigation. Section 2.10. Due Diligence Approval Certificate. Within thirty (30) days following the Opening of Escrow, the Purchaser shall complete its Due Diligence investigation of the Property (subject to the extensions oftime set forth in Section 2.15) and deliver a due diligence S82001 :22036,2 8 approval certificate signed by the Purchaser (the "Due Diligence Approval Certificate") to the Escrow Holder which either: (i) indicates that the Purchaser accepts the condition ofthe Property or; (ii) contains a description of the matters or exceptions relating to the condition ofthe Property which the Purchaser was not able to accept or resolve to its satisfaction during the Due Diligence Period. Section 2.11. Books and Records. As part of the Purchaser's Due Diligence investigations during the Due Diligence Period, the Purchaser shall be afforded full opportunity by the Agency to examine all books and records in the possession of the Agency and/or the Agency's agents or employees, which relate to the Property including the reasonable right to make copies of such books and records at the expense of the Purchaser. During the Due Diligence Period, the Agency will make sufficient staff available to assist the Purchaser with obtaining access to information relating to the Property which is in the possession or control of the Agency. Section 2.12. Condition of the Prooertv-Purchaser's Release. The Purchaser acknowledges and agrees that it shall be given a full opportunity under this Agreement to inspect and investigate every aspect of the Property during the Due Diligence Period. Upon issuance to the Escrow Holder of a Due Diligence Approval Certificate under Section 2.10 which accepts the condition of the Property, the Purchaser shall, thereafter, accept delivery of possession to the Property on the Close of Escrow in an "AS IS," "WHERE IS" and "SUBJECT TO ALL F AUL TS" condition. The Purchaser further agrees and represents to the Agency that by a date no later than the end of the Due Diligence Period, the Purchaser shall have conducted and completed (or waived the completion) of all of its independent investigation of the condition of the Property which the Purchaser may believe to be indicated. The Purchaser hereby acknowledges that it shall rely solely upon its own investigation of the Property and its own review of such information and documentation as it deems appropriate for the purpose of accepting the condition and possession of the Property. The Purchaser is not relying on any statement or representation by the Agency relating to the condition of the Property unless such statement or representation is specifically contained in this Agreement. Without limiting the foregoing, the Agency makes no representations or warranties as to whether the Property presently complies with environmental laws or whether the Property contains any hazardous substance, as these terms are defined in Section 2.08(b) hereof. Furthermore, to the extent that the Agency has provided the Purchaser with information relating to the condition of the Property, including information and reports prepared by or on behalf of the City, the Agency makes no representation or warranty with respect to the accuracy, completeness, methodology or content of such reports or information. Without limiting the above, except to the extent covered by an express representation or warranty of the Agency set forth in this Agreement, the Purchaser, on behalf of itself and its successors and assigns, waives and releases the Agency and its successors and assigns from any and all costs or expenses whatsoever (including, without limitation, attorneys' fees and costs), whether SB2001 :22036.2 9 direct or indirect, known or unknown, foreseen or unforeseen, arising from or relating to the physical condition of the Property, the condition of the soils, the suitability of the soils for the use of the Property as proposed, or any law or regulation applicable thereto, including the presence or alleged presence or harmful or hazardous substances in, under or about the Property including, without limitation, any claims under or on account of (i) CERCLA and similar statutes and any regulations promulgated thereunder or (ii) any other environmental laws. The Purchaser expressly waives any rights or benefits available to it with respect to the foregoing release under any provision of applicable law which generally provides that a general release does not extend to claims which the creditor does not know of suspect to exist in his or her favor at the time the release is agreed to, which, ifknown to such creditor, would materially affect a settlement. By execution of this Agreement, the Purchaser acknowledges that it fully understands the foregoing, and with this understanding, nonetheless elects to and does assume all risk for claims known or unknown, described in this Section 2.12 without limiting the generality ofthe foregoing: The undersigned acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." The undersigned, being aware of this code section, hereby expressly waives any rights it may have thereunder, as well as under any other statutes or common law principles of similar effect. Initials of Purchaser: The provisions of this Section 2.12 shall survive the Close of Escrow. Section 2.13. Review and Aooroval of Condition of Title bv the Purchaser. (a) Within fifteen (15) days following the Opening of Escrow, the Agency shall cause to be delivered to the Purchaser a preliminary title report or title commitment for an ALTA policy oftitle insurance issued by the Title Company, describing the state of the title of the Property, together with copies of all exceptions specified therein and with all easements plotted, but excluding matters disclosed on a survey (the "Preliminary Title Report"). The Purchaser shall notifY the Agency in writing of any objections the Purchaser may have to the title exceptions contained in the Preliminary Title Report ("Purchaser's Title Objection Notice") prior to the expiration of the Due SB2001 :22036.2 10 Diligence Period. The Agency shall have a period of five (5) days after receipt of the Purchaser's Title Objection Notice in which to deliver written notice to the Purchaser ("Agency's Title Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow, or (ii) decline to remove any such title exceptions; provided, however, that the Agency shall be required to remove all monetary liens and encumbrances created by or as a result of the Agency's activities. If the Agencynotifies the Purchaser of its election to terminate Escrow rather than remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within five (5) days after the Purchaser's receipt ofthe Agency's Title Notice, to agree to accept the Property subject to the objectionable items, in which event the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall take title to the Property at the Close of Escrow subject to such objectionable title items. (b) The Agency hereby covenants not to place any liens or encumbrances on the Property, including, but not limited to, covenants, conditions, restrictions, easements, liens, options to purchase, options to lease, leases, tenancies, or other possessory interests without the prior written consent of the Purchaser following execution of this Agreement by the Agency. Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions (including, but not limited to, adding additional exceptions for matters shown on the Survey as hereinafter defined), the foregoing right of review and approval shall also apply to said amendment or supplement (provided that the period for the Purchaser to review such amendment or supplement shall be the later ofthe expiration of the Due Diligence Period or ten (10) days from receipt of the amendment or supplement) and Escrow shall be deemed extended by the amount oftime necessary to allow such review and approval in the time and manner set forth above. Section 2.14. Survev. The Purchaser may at its sole cost and separate expense obtain a survey of the Property prepared by a land surveyor duly licensed by the State of California and in compliance with ALTA/ASCM standards (the "Survey"). The Survey shall be in a form acceptable to the Title Company for the deletion of the standard survey exception in the Title Policy relating to boundaries, without the addition of further exceptions, unless the same are acceptable to the Purchaser in its sole and absolute discretion. The Purchaser shall have until the end of the Due Diligence Period to complete and examine the Survey and to notifY the Agency in writing of any objections the Purchaser has to the Survey ("Purchaser's Survey Objection Notice"). The Agency shall have a period offive (5) days after receipt ofthe Purchaser's Survey Objection Notice in which to deliver written notice to the Purchaser ("Agency's Survey Notice") of the Agency's election to either (i) agree to remove the objectionable items prior to the Close of Escrow or (ii) decline to remove such items. If the Agency notifies the Purchaser of its intention not to remove the objectionable items, the Purchaser shall have the right, by written notice delivered to the Agency within ten (10) days after the Purchaser's receipt of Agency's Survey Notice, to agree to accept the Property subject to the objectionable items, in which event, the Agency's election to terminate the Escrow shall be of no effect, and the Purchaser shall accept the Property at the Close of Escrow subject to such objectionable items. Prior to the Close of Escrow, the Survey shall be recertified to the Purchaser, Title Company and the Purchaser's lender, if any. S82001 :22036.2 11 Section 2.15. Extension of Due Diligence Period. (a) In the event the Agency fails to provide the Purchaser with documents or other information required by Sections 2.08 and 2.11 by the date(s) set forth therein, the Due Diligence Period regarding such information shall be extended by one (1) day for each day of the delay by the Agency to permit the Purchaser to perform an adequate due diligence review of such documents or information (but shall not exceed a total of sixty (60) days). The Purchaser will use its best efforts to notify the Agency of any documents or information the Agency has failed to deliver to the Purchaser within the time periods provided in Sections 2.08 and 2.11. (b) In the event that the Executive Director makes a finding that the Purchaser has undertaken substantial work to complete its due diligence in connection with the Property, the Executive Director shall upon the written request ofthe Purchaser authorize an extension ofthe Due Diligence Period for up to an additional thirty (30) days. Section 2.16. Purchaser's Conditions Precedent to Close Escrow. The Purchaser's obligation to complete the purchase of the Property and Close the Escrow shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (1) (2) (3) (4) SB200 I :22036.2 The Agency shall not have defaulted on any material term of this Agreement to be performed by the Agency, hereunder, and each representation and warranty made by the Agency in this Agreement shall remain true and correct. For purposes of this subsection (I) only, a representation that is limited to the Agency's knowledge or notice shall be false, if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to the Agency; the Purchaser's approval of the Preliminary Title Report and the Survey, if applicable, within the time periods specified in Sections 2.13 and 2.14; the Purchaser's approval of the contents of all due diligence items, and the other investigations of the Property made by the Purchaser and/or its designees pursuant to Sections 2.08 and 2.09 herein, on or before the expiration of the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15. The Purchaser shall be deemed to have disapproved such due diligence items unless they are approved on or before 5 :00 p.m. on the day ending the Due Diligence Period, or such later date, if the Due Diligence Period is extended pursuant to Section 2.15 herein; and the Title Company has committed to issue the Title Policy, in favor of the Purchaser in the form described in Section 2.05. 12 Section 2.17. The Agency's Conditions Precedent to Close of Escrow. The Agency's obligation to convey the Property to the Purchaser shall be conditioned upon the fulfillment of the following conditions precedent, all of which shall be satisfied (or waived in writing pursuant to Section 2.19) prior to the Close of Escrow: (I) the Purchaser has accepted the condition of the Property and submitted its Due Diligence Approval Certification to the Escrow Holder on or before the date set forth in Section 2.10 of this Agreement; (2) the Purchaser has accepted the condition oftitle of the Property on or before the date set forth in Section 2.13; (3) the Purchaser shall not be in default of any material term of this Agreement to be performed by the Purchaser hereunder and each representation and warranty of the Purchaser made in this Agreement shall remain true and correct; and (4) the Purchaser shall have satisfied (or the Agency shall have waived satisfaction) of each ofthe conditions precedent set forth in Section 2.16 and the Escrow shall be in a condition to close within forty-five (45) days following the Opening of Escrow (subject to Section 2.15, if applicable). Section 2.18. Distribution of Documents and Purchase Price After Closing Date bv Escrow Holder. The Escrow Holder shall deliver to the Purchaser, within three (3) business days following the Closing Date, a conformed copy of the Agency Grant Deed, as recorded, and the policy of title insurance issued by the Title Company in favor of the Purchaser. The Escrow Holder shall deliver to the Agency the Purchase Price, less sums paid to discharge any liens, less Escrow costs, expenses and the various prorations chargeable to the Agency hereunder. Section 2.19. Satisfaction of Conditions. Where satisfaction of any ofthe foregoing conditions requires action by the Purchaser or by the Agency, each party shall use its best efforts, in good faith, and at its own cost, to satisfy such conditions. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Either party may waive any of the conditions set forth in this Agreement, but any such waiver shall be effective only if contained in a writing signed by the applicable party and delivered to the Escrow Holder. Section 2.20. [RESERVED -- NO TEXT] 58200 1 :22036.2 13 Section 2.21. Prorations. Closing Costs. Possession. (a) Real and personal property taxes for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty- five (365) day year. The Agency is responsible for (i) all taxes (if any) for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to II :59 p.m. upon the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which the Close of Escrow occurs do not become available until after the Close of Escrow, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. The Agency shall be responsible for and shall payor reimburse the Purchaser upon demand for any real or personal property taxes payable following the Close of Escrow applicable to any period of time prior to the Close of Escrow as a result of any change in the tax assessment by reason of reassessment, changes in use of the Property, changes in ownership, errors by the Assessor or otherwise. (b) The Purchaser shall be entitled to exclusive possession of the Property immediately upon the Close of Escrow. (c) Subsequent to the Close of Escrow, the Purchaser shall pay, prior to delinquency, all real property taxes and assessments assessed and levied upon or against the Property. Nothing herein contained shall be deemed to prohibit the Purchaser from contesting the validity or amounts of any tax or assessment, nor to limit the remedies available to the Purchaser in respect thereto. (d) The Agency shall pay the cost of the premium for a CLTA policy of title insurance on the Property in the amount of the Purchase Price, together with all title charges (including endorsements reasonably requested by the Purchaser to remove disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above). The Agency shall pay one-half (\I,) of the customary and reasonable escrow fees which may be charged by the Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay the additional cost of the premium for an ALTA policy of title insurance on the Property in the amount of the Purchase Price, together with all title changes and requested ALTA survey policy endorsements (to the extent such endorsements are unrelated to removal of any disapproved items shown on the Preliminary Title Report or Survey pursuant to Sections 2.13 and 2.14 above), plus the cost of recording the Agency Grant Deed, together with one- half (\I,) of the cost of the customary and reasonable escrow fees charged by Escrow Holder in connection with the Close of Escrow. The Purchaser shall pay any documentary or other transfer taxes payable on account of the conveyance of the Property to the Purchaser. S8200122036.2 14 Any other Escrow-related transaction expenses or escrow closing costs incurred by the Escrow Holder in connection with this transaction shall be apportioned and paid for by the parties to this Agreement in the proportion of one-half (Y2) payable by each party. No later than three (3) business days prior to the Close of Escrow, the Escrow Holder shall prepare a closing statement ("Closing Statement") on the Escrow Holder's standard form indicating, among other things, the Escrow Holder's estimate of all closing costs, pay-off amounts for the release and reconveyance of all liens secured by the Property and prorations made pursuant to this Agreement for approval by the Purchaser and the Agency. The Purchaser and the Agency shall assist the Escrow Holder in determining the amount of all prorations. Section 2.22. BREACH OF ARTICLE 11 BY THE AGENCY: LIOUIDATED DAMAGES PAYABLE BY THE AGENCY TO THE PURCHASER. IN THE EVENT THAT THE AGENCY COMMITS A MATERIAL BREACH OF ITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE PURCHASER WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE PURCHASER'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE AGENCY, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE PURCHASER IN THE EVENT OF SUCH DEFAULT BY THE AGENCY UPON THE TERMINATION OF THIS AGREEMENT AND CANCELLATION OF THE ESCROW, AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE PURCHASER'S SOLE AND EXCLUSIVE REMEDY AT LAW OR IN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE AGENCY. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE PURCHASER WAIVES ANY AND ALL RIGHTS WHICH THE PURCHASER OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE PURCHASER AND THE AGENCY ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Agency Initials of Purchaser Section 2.23. BREACH BY THE PURCHASER OF ARTICLE 11: LIOUIDATED DAMAGES PAYABLE BY THE PURCHASER TO THE AGENCY. IN THE EVENT THAT THE PURCHASER COMMITS A MATERIAL BREACH OFITS OBLIGATIONS UNDER THIS ARTICLE II PRIOR TO THE CLOSE OF ESCROW, THE DAMAGES THAT THE AGENCY WILL INCUR BY REASON THEREOF ARE AND WILL BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH. THE PURCHASER AND THE S82001 :220362 15 AGENCY, IN A REASONABLE EFFORT TO ASCERTAIN WHAT THE AGENCY'S DAMAGES WOULD BE IN THE EVENT OF SUCH A DEFAULT BY THE PURCHASER, HAVE AGREED THAT SUCH DAMAGES SHALL BE IN AN AMOUNT EQUAL TO THE SUM OF ONE THOUSAND DOLLARS ($1,000.00) AS LIQUIDATED DAMAGES. SUCH SUM SHALL BE PAID TO THE AGENCY IN THE EVENT OF SUCH DEFAULT BY THE PURCHASER AS LIQUIDATED DAMAGES, WHICH DAMAGES SHALL BE THE AGENCY'S SOLE AND EXCLUSIVE REMEDY AT LAW ORIN EQUITY IN THE EVENT OF AND FOR SUCH DEFAULT BY THE PURCHASER. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS PARAGRAPH, THE AGENCY WAIVES ANY AND ALL RIGHTS WHICH THE AGENCY OTHERWISE WOULD HAVE HAD UNDER CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. THE AGENCY AND THE PURCHASER ACKNOWLEDGE AND AGREE THAT EACH OF THEM HAS READ AND UNDERSTANDS THE PROVISIONS OF THIS SECTION AND EACH AGREES TO BE BOUND BY ITS TERMS. Initials of Purchaser Initials of Agency Section 2.24. Damage. Destruction and Condemnation. Prior to the Agency's delivery of possession ofthe Property to Purchaser at the Close of Escrow, the risk ofloss or damage to the Property shall remain upon the Agency. If the Property suffers damages as a result of any casualty, prior to the Close of Escrow, which may materially diminish its value, then the Agency shall give written notice thereof to Purchaser promptly after the occurrence of the casualty. Thereafter the Purchaser can elect to either: (i) accept the Property in its damaged condition or (ii) the Purchaser may terminate this Agreement and recover the Deposit, as set forth in Section 2.02. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) of the preceding sentence within thirty (30) days of its receipt of notice from the Agency that the Property suffered material damages. In the event that, prior to the Close of Escrow, any governmental entity shall commence any actions of eminent domain or similar type proceedings to take any portion of the Property, the Agency shall give prompt written notice thereofto Purchaser, and Purchaser shall have the option either: (i) to elect not to acquire the Property, terminate the Agreement and recover the Deposit, as set forth in Section 2.02; or (ii) the Purchaser may complete the acquisition of the Property under this Agreement, in which case the Purchaser shall be entitled to all of the proceeds paid in compensation for such taking; provided, however, that the Agency agrees that it shall not settle or compromise the proceedings before the Close of Escrow without the Purchaser's prior written consent, which consent will not be unreasonably withheld or delayed. The Purchaser shall confirm the exercise of its election under subparagraph (i) or (ii) ofthe preceding sentence within thirty (30) days of its receipt of notice from the Agency of commencement of eminent domain proceedings against the Property. SB2001 :22036.2 16 ARTICLE ill USE AND MAINTENANCE OF THE PROPERTY Section 3.01. Use ofthe Prooertv. The Purchaser covenants and agrees for itself, its successors and assigns that the Property shall be used in conformity with all applicable laws. Section 3.02. Maintenance of the Prooertv. The Purchaser for itself, its successors and assigns hereby covenants and agrees that: (a) The areas of the Property which are subject to public view (including all existing improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. In the event that at any time within twenty (20) years following the date of recordation ofthe Agency Grant Deed there is an occurrence of an adverse condition on any area of the Property which is subject to public view in contravention of the general maintenance standard described above, (a "Maintenance Deficiency") then the Agency shall notifY the Purchaser in writing of the Maintenance Deficiency and give the Purchaser thirty (30) days from receipt of such notice to cure the Maintenance Deficiency as identified in the notice. In the event the Purchaser fails to cure or cornmence to cure the Maintenance Deficiency within the time allowed, the Agency may conduct a public hearing following transmittal of written notice thereofto the Purchaser ten (10) days prior to the scheduled date of such public hearing in order to verifY whether a Maintenance Deficiency exists and whether the Purchaser has failed to comply with the provisions ofthis Section 3.02(a). If upon the conclusion of a public hearing, the Agency makes a finding that a Maintenance Deficiency exists and that there appears to be non-compliance with the general maintenance standard, described above, thereafter the Agency shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take other action at law or in equity which the Agency may then have to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Agency for the abatement of a Maintenance Deficiency on the Property authorized by this Section 3.02(a) shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand for payment by the Agency to the Purchaser, the Agency shall have the right to enforce the lien in the manner as provided in Section 3.02(c). (b) Graffiti, as this term is defined in Government Code Section 38772, which has been applied to any exterior surface of the building or any other structure on the Property which is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Purchaser by either painting over the evidence of such vandalism with a paint which has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water as appropriate. In the event that such graffiti may become visible from an adjacent or contiguous public right-of-way but is not removed within 72 hours following the time of such application, the Agency shall have the right to enter the Property and remove the graffiti without notice to the Purchaser. Any sum expended by the Agency for the removal of graffiti from the Property authorized by this Section 3.02(b) in an amount not to exceed $250.00 per entry by the Agency, shall become a lien on the Property. If the amount of the lien is not paid within thirty (30) SB2001 ;22036.2 17 days after written demand to the Purchaser by the Agency, the Agency shall have the right to enforce its lien in the manner provided in Section 3.02(c). (c) The parties hereto further mutually understand and agree that the rights conferred upon the Agency under this Section 3.02 expressly include the power to establish and enforce a lien or other encumbrance against the Property, or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c in an amount reasonably necessary to restore the Property to the maintenance standard required under Section 3.02(a) or Section 3.02(b), including the reasonable attorneys' fees and costs of the Agency associated with the abatement of the Maintenance Deficiency or removal of graffiti. The provisions of this Section 3.02 shall be a covenant running with the land for a term of twenty (20) years following the date of recordation of the Agency Grant Deed, and shall be enforceable by the Agency. Nothing in the foregoing provisions of this Section 3.02 shall be deemed to preclude the Purchaser from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City. Section 3.03. Transfer ofProoertv to Exempt Person or Grant of Exemotion from Payment of Prooertv Taxes. The Purchaser covenants and agrees that (i) in the event that the Property, or any portion thereof, shall within twenty (20) years from the date of recordation of the Agency Grant Deed be conveyed or transferred or sold by the Purchaser, its successors or assigns, to any entity or party that is partially or wholly exempt from the payment of ad valorem property taxes pertinent to the Property or any portion of the Property or (ii) in the event the Purchaser applies for and receives from the San Bernardino County Assessor an exemption from the payment of ad valorem property taxes pertinent to the Property, either in whole or in part, within twenty (20) years from the date of recordation of the Agency Grant Deed, the Purchaser, its heirs or assigns shall pay the Agency a fee in lieu of payment of such taxes each year in an amount which is determined by the Agency to be one percent (1.0%) of the full cash value of the Property, or portion thereof, as may be subject to such exemption from payments of ad valorem property taxes. Such determination of "full cash value" for such in-lieu payment purposes under this Section 3.04 shall be established by the Agency each year, if necessary, by reference to the as valorem property tax valuation principles and practices as generally applicable to a county property tax assessor under Section 2 of Article XIIIA ofthe California Constitution. In the event that the Agency may hereafter determine that an amount is payable by the Purchaser to the Agency as an in-lieu payment under this Section 3.04 in any tax year, then such amount shall be paid to the Agency for that tax year within ninety (90) days following transmittal of notice of invoice for payment of the in-lieu amount by the Agency to the Purchaser. The provisions ofthis covenant shall be referenced in the Agency Grant Deed. Section 3.04. Obligation to Refrain from Discrimination. The Purchaser covenants and agrees for itself, its successors, its assigns and every successor-in-interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property; nor shall the Purchaser, itself or any person claiming under or through it, establish or permit any such practice or SB2001 ;22036.2 18 practices of discrimination or segregation with reference to the selection, location, number, use or occupancy oftenants, lessees, subtenants, sublessees or vendees of the Property. The covenant of this Section 3.04 shall run with the land for the time period set forth in the Agency Grant Deed. Section 3.05. Form of Nondiscrimination and Nonsegregation Clauses. The Purchaser covenants and agrees for itself, its successors, its assigns, and every successor-in-interest to the Property, or any part thereof, that the Purchaser, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any part thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining thereto shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (1) (2) (3) SB2001 ;22036.2 In deeds: "The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy oftenants, lessees, subtenants, sublessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." In leases: "The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment ofthe premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, oftenants lessees, sublessee, subtenants, or vendees in the premises herein leased." In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or 19 occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the premises herein transferred." The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. The covenant of this Section 3.05 shall run with the land in perpetuity. ARTICLE N DEFAULTS. REMEDlliS AND TERMINATION Section 4.01. Defaults - General. (a) In the event that a breach or default may occur prior to the Close of Escrow, the remedies of the parties shall be as set forth in Article II ofthis Agreement. (b) From and after the Close of Escrow and subject to the extensions of time set forth in Section 5.05 hereof, failure or delay by either party to perform any term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if a party otherwise in default cornmences to cure, correct or remedy such default within thirty (30) calendar days after receipt of written notice from the injured party specifYing such default, and shall diligently and continuously prosecute such cure, correctionorremedyto completion (and where anytime limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such party shall not be deemed to be in default hereunder. (c) The injured party shall give written notice of default to the party in default, specifying the default complained of by the nondefaulting party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (d) Any failure or delays by either party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of their rights and/or remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 4.02. Legal Actions. (a) In addition to any other rights or remedies, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal actions must be instituted in the Superior Court ofthe State of California in and for the County of San Bernardino in any other appropriate court within said County, or in the Federal District Court for the Central District of California. SB2001 ;22036.2 20 (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement. (c) In the event that any legal action is cornmenced by the Purchaser against the Agency, service of process on the Agency shall be made by personal service upon the Executive Director or Chair of the Community Development Cornmission, or in such other manner as may be provided by law. (d) In the event that any legal action is cornmenced by the Agency against the Purchaser, service of process on the Purchaser shall be made by personal service on Richard Schindler, a member of the Purchaser, or in such other manner as may be provided by law, and shall be valid whether made within or without the State of California. Section 4.03. Rights and Remedies are Cumulative. Except with respect to any rights and remedies expressly declared to be exclusive in Article II of this Agreement as relates to a default or breach occurring before the Close of Escrow, the rights and remedies ofthe parties as set forth in this Article V following the Close of Escrow are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 4.04. Damages. If either party defaults with regard to any provision of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the defaulting party does not diligently cornmence to cure such default after service of such notice of default and promptly complete the cure of such default within a reasonable time, not to exceed ninety (90) calendar days (or such shorter period as may otherwise be specified in this Agreement for default), after the service of written notice of such a default. In the event that a default relates to a matter arising after the Close of Escrow , the defaulting party shall be liable to the other party for damages caused by such default. In the event that a default relates to a matter arising before the Close of Escrow, the remedies of the parties shall be limited to the liquidated damage sums as set forth in Article II of the Agreement. Section 4.05. Soecific Performance Prior to Close of Escrow. Prior to the Close of Escrow neither party shall have or assert the equitable remedy of specific performance in the event of a default or breach, and the remedies of the parties with respect to such a breach or default prior to the Close of Escrow shall be limited to the termination rights and liquidated damage amounts set forth in Article II of this Agreement. ARTICLE V GENERAL PROVISIONS Section 5.01. Notices. Demands and Cornmunications Between the Parties. SB2001 ;22036.2 21 (a) Any and all notices, demands or cornmunications submitted by any party to another party pursuant to or as required by this Agreement shall be proper if in writing and dispatched by messenger for irnmediate personal delivery, or by registered or certified United States mail, postage prepaid, return receipt requested, to the principal office of the Agency and the Purchaser, as applicable, as designated in Section 1.04(a) and Section 1.04(b) hereof. Any such notice, demand or cornmunication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is dispatched by messenger for immediate personal delivery, or two (2) calendar days after it is placed in the United States mail, as heretofore provided. Either party may change its address for notices under this Agreement by giving notice to the other party, specifYing that the purpose of the notice is to change the party's address. (b) In addition to the submission of notices, demands or cornmunications to the parties as set forth above, copies of all notices shall also be delivered by facsimile as follows: to the Purchaser: Fallbrook Capital, LLC FAX: (909) 425-2097 Attention: Richard Schindler to the Agency: FAX: (909) 384-5135 Attention: Ann Harris with copy to: Lewis, D' Amato, Brisbois & Bisgaard LLP FAX: (909)387-1138 Attention: Diane R. Holman, Esq. Section 5.02. Conflict of Interest. No member, official or employee ofthe Agency having any conflict of interest, direct or indirect, related to this Agreement and the development of the Property shall participate in any decision relating to the Agreement. The parties represent and warrant that they do not have knowledge of any such conflict of interest. Section 5.03. Warranty Against Payment of Consideration for Agreement. The Purchaser warrants that it has not paid or given, and will not payor give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section, shall not include persons to whom fees are paid for professional services if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Purchaser. Section 5.04. Nonliabilitv ofAgencv Officials and Emolovees. No member, official or employee of the Agency shall be personally liable to the Purchaser, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Purchaser or to its successor, or on any obligations under the terms of this Agreement, except for gross negligence or willful acts of such member, officer or employee.t SB2001 ;22036.2 22 Section 5.05. Enforced Delav: Extension of Time of Performance. In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, or considered to be a default, where delays or defaults are due to the force majeure events of war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes or lack of transportation, weather-caused delays, inability to secure necessary labor, materials or tools, delays of any contractors, subcontractor or supplier, which are not attributable to the fault of the party claiming an extension of time to prepare or acts or failure to act of any public or governmental agency or entity (provided that acts or failure to act of the City or Agency shall not extend the time for the Agency to act hereunder except for delays associated with lawsuit or injunction including but without limitation to lawsuits pertaining to the approval of the Agreement, and the like). An extension oftime for any such force majeure cause shall be for the period ofthe enforced delay and shall cornmence to run from the date of occurrence of the delay; provided however, that the party which claims the existence of the delay has first provided the other party with written notice of the occurrence ofthe delay within ten (10) days ofthe cornmencement of such occurrence of delay. The parties hereto expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of any of them which may have provided a basis for entering into this Agreement and which occur at any time after the execution of this Agreement, are not force majeure events and do not provide any party with grounds for asserting the existence of a delay in the performance of any covenant or undertaking which may arise under this Agreement. Each party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such party under this Agreement, but that such inconvenience or hardship is not a force majeure event and does not excuse the performance by such party of its obligations under this Agreement. Section 5.06. Aoorovals. (a) Approvals required of the Agency or the Purchaser, or any officers, agents or employees of either the Agency or the Purchaser, shall not be unreasonably withheld and approval or disapproval shall be given within the time set forth in the Schedule of Performance or, ifno time is given, within a reasonable time. (b) The Executive Director of the Agency is authorized to sign on his or her own authority amendments to this Agreement which are ofroutine or technical nature, including minor adjustments to the Schedule of Performance. Section 5.07. Real Estate Commissions. The Agency shall not be liable for any real estate commissions, brokerage fees or finder fees which may arise from or be related to this Agreement. The Purchaser shall pay any fees or cornmissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals. SB2001;22036.2 23 Section 5 .08. Indemnification. The Purchaser agrees to indemnifY and hold the City and the Agency, and their officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Purchaser in performing its obligations hereunder. The Agency agrees to indemnifY and hold the Purchaser and its officers, employees and agents, harmless from and against all damages, judgments, costs, expenses and fees arising from or related to any act or omission of the Agency in performing its obligations hereunder. Section 5.09. Release of Purchaser from Liabilitv. Notwithstanding any provision herein to the contrary, the Purchaser shall be relieved of any and all liability for the obligations of the Purchaser hereunder with regard to the Property on and as of that date which is the five-year anniversary of the Close of Escrow , other than any covenants and obligations provided by the grant deed by which the Property is conveyed to the Purchaser hereunder. Section 5.10. Attornevs' Fees. If either party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, seeks the resolution of disputes pursuant to Section 4.02 hereof, or is made a party to any action or proceeding brought by the Escrow Agent, then as between the Purchaser and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit or resolution of disputes pursuant to Section 4.02 hereof, and not as damages, its reasonable attorneys' fees as fixed by the Court or other forum for resolution of disputes as set forth in Section 4.02 hereof, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement shall be considered as "attorneys' fees" for purposes of this Section. Section 5.11. Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. ARTICLE VI ENTIRE AGREEMENT. W ANERS AND AMENDMENT Section 6.01. Entire Agreement. (a) This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. (b) This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all or any portion of the Property and the development thereof. (c) None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with the grant deed conveying title to the Property, and this SB2001 ;22036.2 24 Agreement shall continue in full force and effect before and after such conveyance until that date which is the five-year anniversary of the Close of Escrow, (d) All waivers of the provisions of this Agreement and all amendments hereto must be in writing and signed by the appropriate authorities of the Agency and the Purchaser. SB200 I ;22036.2 25 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the dates set forth below. AGENCY Redevelopment Agency of the City of San Bernardino Date: By: Judith Valles Chair of the Cornmunity Development Cornmission Date: By: Gary Van Osdel Executive Director APPROVED AS TO FORM: Agency Special Counsel PURCHASER FALLBROOK CAPITAL, LLC, a Nevada limited liability company Date: By: Member Date: By: Member [All Signatures Must Be Notarized] SB2001:22036.2 26 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY SB2001 ;22036.2 Exh. "A" - 1 EXHIBIT "B" AGENCY GRANT DEED SB2001 ;22036.2 Exh. "B" - I AGENCY GRANT DEED RECORDING REQUESTED BY AND ) AFTER RECORDING MAIL TO: ) ) Fallbrook Capital, LLC ) 7750 Palm Avenue, Suite J ) Highland, CA 92346 ) (Space Above for Recorder's Use) For valuable consideration, the receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic of the State of California ("Grantor") hereby grants to Fallbrook Capital, LLC, a Nevada limited liability company ("Grantee") the real property legally described in Exhibit "A" and by this reference incorporated herein ("Property"). I. The Property is conveyed subject to that certain Disposition and Development Agreement dated as of ,2001 ("Agreement"). The provisions of the Agreement are incorporated herein by this reference and shall be deemed to be a part hereof as if set forth at length herein. 2. The Grantee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe Property, nor shall the Grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property. All deeds, leases or contracts made relative to the Property shall contain the following nondiscrimination clauses: (a) In deeds: "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment ofthe land herein conveyed, nor shall the grantee, or any person claiming under or through the grantee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, locations, SB2001;23846.1 1 number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment ofthe land herein leased, nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, subtenants, sublessees or vendees in the land herein leased. " (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land." 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agency Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument permitted by the Agreement; provided, however, that any successor of Grantee to the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such successor's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 4. The covenants set forth in Article ill of the Agreement shall remain in effect for a period of five (5) years from the date hereof, except that the covenant regarding payments of a fee in lieu of taxes upon the transfer of the Property to an exempt person or following a grant of exemption from the payment of property taxes set forth in Section 3.03 of Article ill of the Agreement shall remain in effect for twenty (20) years from the date of recordation of this Agency Grant Deed and the covenants against discrimination set forth in Section 3.04 and Section 3.05 of Article ill of the Agreement and in this Agency Grant Deed shall remain in effect in perpetuity. 5. The covenants contained in this Agency Grant Deed shall be binding for the benefit of the Grantor and its successors and assigns, and such covenants shall run in favor ofthe 8B2001;23846.1 2 Grantor for the entire period during which such covenants shall be in full force and effect, without regard to whether the Grantor is or remains an owner of any land or interest herein to which such covenants relate. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach as provided in the Agreement or by law. The covenants contained in this Agency Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successor. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized this _ day of ,2001. Grantor: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Chairperson By: Secretary APPROVED AS TO FORM: Lewis, D' Amato, Brisbois & Bisgaard, LLP By: Agency Special Counsel THE PROVISIONS OF THIS AGENCY GRANT DEED ARE HEREBY APPROVED AND ACCEPTED. Grantee: FALLBROOK CAPITAL, LLC, a Nevada limited liability company By: Member 8B2001;23846.1 3 8B2001 ;23846.1 4 By: Member EXHIBIT "A" LEGAL DESCRIPTION SB2001;23846.1 5 SUMMARY REPORT PURSUANT TO BEALm AND SAFETY CODE SECTION 33433 IN CONNECTION WIm mE SALE OF CERTAIN PROPERTY 1. INTRODUCTION This Summary Report has been prepared by the Redevelopment Agency of the City of San Bernardino (the "Agency)) pursuant to Section 33433 of the California Health and Safety Code. This Surnmary Report sets forth certain details of the proposed sale by the Agency of real property with approximately one (3.14) acres of land, described as Assessor Parcel Number 0143-012-72,73 with an approximate 28,650 square foot building thereon located at 1505 West Highland Ave., San Bernardino, California. The building will be sold to Fallbrook LLC. The Agency received The Public Enterprise Building through foreclosure in 1987. The property is currently being utilized by non-profit organizations, the City Library and Parks and Recreation. The new owner has agreed to keep the Library as a tenant and will give all the current tenants the opportunity to stay as tenants if they so desire. The cost to the Agency to maintain and secure the property to date is $2,837,494.41. The average annual income derived from the property is $36,003.23. The average annual cost to the agency to maintain the property has been $158,098.93. 11: COST OF THE TRANSACTION TO THE AGENCY Pursuant to the Disposition and Development Agreement the buyer has deposited $5,000.00 as a good faith deposit. following the public hearing, and on closing of escrow pay the remaining balance 0[$465,000.00 in cash. The Agency is responsible for the standard owner sale costs. Specifically at closing of escrow the Agency shall pay: (i) County and City transfer tax, (ii) costs of the an Owner's Policy of Title Insurance (iii) one-half of escrow fees and a standard sales commission. Based upon the foregoing it is estimated that closing costs to the Agency will be approximately $ 2,000.00. Ill: VALUE OF THE INTEREST BEING CONVEYED BY THE AGENCY 1. Highest and Best Use Service, non-profits and office users represent the highest and best use of the property. Page 2 Summary Report IV. REASON SALE WILL ASSIST IN mE ELIMINATION OF BLIGHT The reuse of this property will help eliminate blighting conditions in the Northwest Project Area, will put the property back on the tax roles, eliminate an annual expense to the agency, increase property values and will result in creation of additional employment opportunities. V. CONFORMANCE WIm IMPLEMENTATION PLAN The Five-Year Implementation Plan adopted by the Agency contains several broad goals and objectives. The proposed sale of the property will assist the Agency in meeting some of the objectives and goals of its implementation plan in the following ways. 1. The sale encourages a reinvestment and revitalization in the geographical area. 2. The provision of the building and it occupancy by non-profit and commercial tenants will increase employment in the project area, providing a catalyst for additional reinvestment by private enterprise in the surround area. 3. The building will help to create additional job opportunities in the community. VI. ATTAC~ENTS 1. Approving resolutions 2. DDA ABH CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: November 27,2001 TO: Lisa Gomez, Staff Assistant FROM: Michelle Taylor, Senior Secretary RE: Transmitting Documents for Signature - Resolution CDC/200l-49 At the Mayor and Cornmon Council/Cornmunity Development Cornmission meeting of November 19, 2001, the City of San Bernardino adopted Resolution CDC/2001-49 - Resolution of the Community Development Commission of the City of San Bernardino, as the governing body of the Redevelopment Agency of the City of San Bernardino, approving that certain Disposition and Development Agreement by and between the Redevelopment Agency of the City of San Bernardino and New Hope Missionary Baptist Church, on the terms set forth in such agreement. Please obtain signatures in the appropriate locations and return the original agreement to the City Clerk's Office as soon as possible, to my attention. Please be advised that the resolution and agreement will be null and void if not executed with 30 days, or by December 19, 2001. If you have any questions, please do not hesitate to contact me at ext. 3206. Thank you. Michelle Taylor Senior Secretary CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: December 10,2001 TO: Lisa Gomez, Staff Assistant FROM: Michelle Taylor, Senior Secretary RE: Resolution CDC/2001-49 - Disposition and Development Agreement, New Hope Missionary Baptist Church Our office has not received the above-referenced DDA by and between the Redevelopment Agency of the City of San Bernardino and New Hope Missionary Baptist Church, which was approved at the Mayor and Cornmon Council meeting held on November 19, 2001. Please forward the executed agreements to the City Clerk's office, to my attention; otherwise, please submit a memo detailing their status. Note: The resolution and agreement will be null and void if not executed by December 19, 2001. If you have any questions, please call me at ext. 3206. ** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** RESOLUTION AGENDA ITEM TRACKING FORM Meeting Date (Date Adopted): ~ Item # e-3 \ !3 Vote: Ayes \,2, '1,S, l') Nays 3 Abstain Change to motion to amend original documents: Resolution #2 C:fJ (- 32 --Er Absent ~ - ~~-- ~.'F ---lOc-J'zm' ~ L) c:; Reso. # On Attachments: ~ Contract term: .- Note on Resolution of Attachment stored separately: =--- Direct City Clerk to (circle I): PUBLISH. POST. RECORD \\'/(OliNTY NullNoid After: ~ _._---_._._._-~~-_._._~~-- By: _.,,:=.____ Date Sent to Mayor: l\ \2\ I () 1 Date of Mayor's Signature: ~_ Date of Clerk/CDC Signature: ,\ h., 1 D I Reso. L.og Updated ....-- Seal Impressed: ___ .......--~__. Date Si nature: See Attached: See Attached: Date Returned: 60 Day Reminder Letter Sent on 30th day: 90 Day Reminder Letter Sent on 45th day: Request for Council Action & Staff Report Attached: Updated Prior Resolutions (Other Than Below): Updated CITV Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634): Updated CDC Personnel Folders (5557): Updated Traffic Folders (3985, 8234,655,92-389): Ves .......-- No By Ves No ,,/ By Ves No~ By Ves No ,/ By Ves NO~ By Copies Distributed to: City Attorney ,/' Parks & Rec. Code Compliance Dev. Services EDA"/ Finance Police Public Services Water Others: MIS Notes: BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.) Ready to File: ~ Date: ~ Revised 01/12/01 ** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT ** RESOLUTION AGENDA ITEM TRACKING FORM Meeting Date (Date Adopted): \ \ \ '''I. \ 0 , Item # Vote: Ayes\2\"I\SJ'I Nays ~ Change to motion to amend original documents: '-- \2.-3/ A Resolution # C()c./7N1\ --'\'1 Abstain -& Absent ~ ~~ 7('1(',1-&").~ Reso. # On Attachments: L-- Contract term: - Note on Resolution of Attachment stored separately: -===- Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY NullNoid After: 3001+1::' / 12-)<:]-0 f I By: - Date Sent to Mayor:l'i , '" 1'2' I Cl \ Dale of Mayor's Signature: l\ h.t \ 01 Date ofClerk/CDC Signature: ~lz., \0 \ Reso. Log Updated:/ Seal Impressed: .,/ Date Memo/Letter Sent for Signature: 60 Day Reminder Letter Sent on 30th day: 90 Day Reminder Letter Sent on 45th day: 1\I~o\ \-;} -\<YO \ See Attached: / Date Returned: 12--z.t;-a \ See Attached: <./ See Attached: Request for Council Action & StatT Report Attached: Updated Prior Resolutions (Other Than Below): Updated CITY Personnel Folders (6413, 6429, 6433,10584,10585,12634): Updated CDC Personnel Folders (5557): Updated Traffic Folders (3985, 8234,655,92-389): Yes ,/ No By Yes No V By Yes No ~ By Yes No ~ By Yes No _ By Copies Distributed to: City Attorney _ Code Compliance Dev. Services EDA ,/ Finance MIS Parks & Rec. Police Public Services Water Others: Notes: BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (ContractTerm, etc.) Ready to File: -1Itr:- Date: 0-7\ -0 I Revised 01112/01