HomeMy WebLinkAboutRES. SA 2015-06 Purchase and Sale Agreement with Ku & Associates for 700 & 704 E. Foothill Blvd. RESOLUTION NO. SA 2015-6
A RESOLUTION OF THE CITY COUNCIL SITTING AS THE
SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT
AGENCY OF THE CITY OF POMONA APPROVING A PURCHASE
AND SALE FOR THE PURCHASE OF 700 & 704 E. FOOTHILL
BOULEVARD PROPERTIES (APN#s 8376-003-900 AND -901) IN THE
CITY OF POMONA
WHEREAS, the City of Pomona serves as the Successor Agency to the former
Redevelopment Agency of the City of Pomona pursuant to California Health and Safety Code
Sections 34171, 34173, 34175 and 34177 ("Successor Agency");
WHEREAS, the Successor Agency owns the vacant lots at 700 and 704 E. Foothill
Boulevard in Pomona, California with APNs 8376-003-900 and -901 (the "Foothill Properties");
WHEREAS, the Amended 2013 Long Range Property Management Plan (LRPMP) was
approved by the Successor Agency, the Oversight Board and the State Department of Finance
(DOF);
WHEREAS, a Purchase and Sale Agreement (PSA) between the Successor Agency and
Ku and Associates, Inc., was negotiated for the sale of the Foothill Properties at a purchase price
of $1,895,000, which is above appraised value based on an appraisal report prepared by
Boznanski and Company, dated February 1, 2015 (Exhibit B—Appraisal Report).
WHEREAS, selling the lots at 700 and 704 E. Foothill Boulevard to Ku and Associates,
Inc. is in accordance with the approved LRPMP.
NOW, THEREFORE, BE IT RESOVED by the Successor Agency of the
Redevelopment Agency of the City of Pomona as follows:
SECTION 1. The above recitals are true and correct and are a substantive part of this
Resolution.
SECTION 2. This Resolution is adopted pursuant to Health and Safety Code Section 34177.
SECTION 3. The Successor Agency hereby approves the Purchase and Sale Agreement
with Ku and Associates, Inc. for a purchase of the Foothill Properties for $1,895,000, in
substantially the form submitted and attached hereto as Exhibit A.
SECTION 4. The City Manager, serving as the Executive Director to the Successor
Agency, is authorized to transmit the proposed Purchase and Sale Agreement to the Oversight
Board for approval.
SECTION 5. After the Oversight Board and the Department of Finance approve the
Purchase and Sale Agreement, the City Manager, or her designee, is authorized to execute and cause
the recordation of all documents necessary to complete the sale on behalf of the Successor Agency.
Resolution No. SA 2015-6
November 2, 2015
Page 1 of 2
SECTION 6. The City Clerk in her capacity as the Clerk to the City Council, sitting as
the Successor Agency to the Redevelopment Agency, shall certify to the passage and adoption of
this Resolution and it shall thereupon take effect and be in full force.
APPROVED AND ADOPTED THIS 2ND DAY OF NOVEMBER 2015.
ATTEST: POMONA CITY COUNCIL SITTING
AS SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF POMONA, CALIFORNIA,
PURSUANT TO CALIFORNIA
HEALTH AND SAF.EqFy CODE
SECTIO 34173
Eva M. Buice, MMC, Clerk Elliott Rothman, ay
APPROVE AS F
Ard616 M. Alvarez- Tasman, Successor Agency Counsel
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF POMONA
1, EVA M. BUICE, MMC, CLERK of the CITY OF POMONA CITY COUNCIL sitting
as the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
POMONA, California, pursuant to California Health and Safety Code Section 34173 do hereby
certify that the foregoing Resolution was adopted at a regular meeting of the Successor Agency
held on the 2nd day of November 2015 by the following vote:
AYES: Nolte, Robledo, Carrizosa, Lantz, Escobar, Martin
NOES: None
ABSENT: Mayor Rothman
ABSTAIN: None
IN WITNESS WHEREOF, 1 have hereunto set my hand and affixed the official seal of the City
of Pomona, California,this 3'd day of November 2015.
S�1-WX4�--V
Eva M. Buice, MMC, Clerk
Resolution No. SA 2015-6
November 2, 2015
Page 2 of 2
EXHIBIT A
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
SELLER: THE CITY OF POMONA SUCCESSOR AGENCY
BUYER: KU & ASSOCIATES, INC.
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TABLE OF CONTENTS
1. PURCHASE AND SALE........................................................................................... 1
2. PURCHASE PRHCIE................................................................................................... 2
3. CONDITION OF TITLE TO PROPERTY. ............................................................. 2
3.1 TITLE TRANSFER AT CLOSE OF ESCROW........................................................ 2
3.2 TITLE EXCEPTIONS.............................................................................................. 2
3.3 REVIEW OF TITLE................................................................................................. 2
3.4 TITLEINSURANCE................................................... ............................................ 3
4. CONDITION OF PROPERTY AND CONTINGENCIES....................................... 3
4.1 CONDITION OF PROPERTY.................................................................................. 3
4.2 BUYERS CONTINGENCIES .................................................................................. 4
4.3 CONDITIONS PRECEDENT................................................................................... 6
4.4 RIGHT OF REPURCHASE...................................................................................... 7
5. EXCHANGE. ............................................................................................................. 8
6. REPRESENTATIONS AND WARRANTIES.......................................................... 8
6.1 SELLER'S WARRANTIES...................................................................................... 8
6.1.1 No Alterations ....................................................................................................... 9
6.1.2 Changed Conditions............................................................................................... 9
6.2. REPRESENTATIONS AND WARRANTIES BY BUYER.....................................10
6.2.1 Brokers.................................................................................................................10
7. IN DEMI®WWATION...............................................................................................10
8. ASSUMPTRON OF LIABILITIES...........................................................................11
9. MQU11DAT ED DAMAGES......................................................................................11
10. SP;ECRAL COND17LONS.........................................................................................12
fl 1. ESCROW AND CLOSING.......................................................................................12
11.1 OPENING OF ESCROW.........................................................................................12
11.2 CLOSE OF ESCROW..............................................................................•..............12
11.3 SELLER DELIVERIES TO ESCROW....................................................................13
11.4 BUYER'S DELIVERIES TO ESCROW..................................................................13
11.5 COMPLETION OF ESCROW.................................................................................13
11.6 COSTS OF ESCROW..............................................................................................14
12. PRORATIONS..........................................................................................................1146
13. DAMAGE OR DESTRUC71ON PRIOR TO CLOSE OF ESCROW....................15
14. IEM1NENT DOMAIN................................................................................................16
15. SURV1VAlL OF CLOSE OF ESCROW...................................................................16
16. INTENTIONALLY OM=ED...............................................................................16
17. NOTICES. .................................................................................................................16
11I. TENT ERE AGREEMENT...........................................................................................17
19. >1 END1NG EFFECT...................................................................................................18
20. WAIVER. ..................................................................................................................18
21. CAPTIONS AND HEADINGS.................................................................................18
22. COUNTERPARTS....................................................................................................1s
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23. GOVERNING LAW. ................................................................................................18
24. ATTORNEYS FEES.................................................................................................18
25. TIME OF ESSENCE.................................................................................................18
26. DATE OF AGREEMENT. .......................................................................................18
27. INVALIDITY OF ANY PROVISION......................................................................18
28. NO RECORDATION................................................................................................19
29. DRAFTING OF AGREEMENT...............................................................................19
30. NO THIRD PARTY BENEFICIARY RIGHTS......................................................19
31. JOINT AND SEVERAL LIABILITY......................................................................19
32. INCORPORATION OF EXHIBITS........................................................................19
33. NO OOINT V1ENT�JR1E, PARTNERSHIP OR OTHER RELATION'S1HIP
CREATED.................................................................................................................19
34. ASSIGNMENT..........................................................................................................19
35. RIESIi RVATION OF DISCRETION........................................................................20
SCHEDULE OF EXHIBITS
EXI- iBiT "A" Legal Description of the Propeirty..........................................................22
EXHIBIT "B" Depiction of the Property .......................................................................23
EXHEBET "C" Gmuit Deed..............................................................................................24
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AGREEMENT OF PURCHASE AND SALE AND JORNT ESCROW ]INSTRUCTRONS
This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
(this "Agreement") is made as of , by and between the CITY OF
POMONA ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF POMONA, a public body ("Successor Agency" or "Seller"),
pursuant to California Health and Safety Code Sections 34173 and 34175 and KU &
ASSOCIATES, INC., a California corporation("Buyer" or"Ku")
RECITALS
1. The property commonly known as 700 AND 704 East Foothill Blvd., Pomona, California
(APN 8367-003-900 and APN 8367-003-901), legally described on Exhibit "A" and depicted on
IExhiblt "B" attached hereto ("Property") was formerly owned by the Redevelopment Agency
of the City of Pomona("Agency").
2. As part of the 2011-12 State budget bill, the California Legislature enacted, and the
Governor signed AB X1 26 ("AB 26") requiring that each redevelopment agency be dissolved.
On June 27, 2012 the State Legislature adopted Assembly Bill 1484 ("Ali 1484") amending the
provisions of AB 26.
3. In accordance with the requirements of AB 26 and AB 1484, the City Council of the City
of Pomona("City") on January 9, 2012, adopted City Council Resolution No. 2012-8 electing to
become the Successor Agency to the former Redevelopment Agency of the City of Pomona
pursuant to California Health and Safety Code Sections 341710) and 34173.
4. Pursuant to California Health and Safety Code Sections 34173 and 34175(b) and City
Council Resolution No. 2012-8 all of the assets and properties of the former Redevelopment
Agency ofthe City of Pomona were transferred to the Successor Agency by operation of law.
5. The Successor Agency is the current legal owner of the Property as the successor in
interest to the former Redevelopment Agency of the City of Pomona.
6. Seller desires to sell the Property to Buyer, and Buyer desires to purchase the Property
from Seller, all on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereto agree as follows:
I. PURCHASE AND SALE.
Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property
from Seller, on the terms and conditions hereinafter set forth in this Agreement.
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2. PURCHASE PRICE.
The total purchase price("Purchase Price") for the Property shall be One Million Eight
Hundred Ninety-Five Thousand Dollars and No Cents ($1,895,000), payable by Buyer to Seller
as follows:
(a) The cash sum of Twenty-Five Thousand Dollars($25,000.00) shall be deposited
in Escrow upon the opening thereof, to be held in an interest-bearing passbook account at a
lending institution which is FDIC insured, with interest accruing to the credit of Buyer("Buyer
Deposit"). The deposit shall be credited toward the Purchase Price at Close of Escrow.
(b) If the Close of Escrow is extended pursuant to Paragraph 11.2 of this Agreement,
the Buyer Deposit shall be increased to a total of One Hundred Eighty Nine Thousand Five
Hundred Dollars ($189,500).
(c) The balance of the Purchase Price, One Million Eight Hundred Seventy Thousand
Dollars ($1,870,000), or in case the Close of Escrow is extended and the Buyer Deposit
increased, the balance of One Million Seven Hundred Five Thousand Five Hundred Dollars
($1,705,500) shall be deposited in Escrow by Buyer prior to Close of Escrow for delivery to
Seller upon Close of Escrow.
3. CONDITION OF TITLE TO PROPERTY.
3.1 TITLE TRANSFER AT CLOSE OF ESCROW
Title to the Property shall be conveyed to Buyer upon the Close of Escrow.
3.2 TITLE EXCEPTIONS
Title to the Property shall be conveyed to Buyer by Grant Deed in the form attached
hereto as Exhibit "C", free and clear of all liens except for:
(a) Liens securing real property taxes and assessments (which constitute liens
not yet due and payable);
(b) Such other exceptions and reservations shown on a Preliminary Title
Report ("Preliminary Report")issued by ("Title Company")
which are approved by Buyer. (All exceptions to title permitted pursuant to this Paragraph
3.2(b) are referred to in this Agreement as "Permitted Exceptions").
3.3 REVIEW OF TITLE
(a) Seller agrees to furnish Buyer with a copy of the Preliminary Report,
together with a copy of all recorded exceptions to title, within five(5) days of the Opening of
Escrow. Seller shall provide Buyer a property survey if Seller has previously performed or had
performed a property survey, and the survey is still in the possession of Seller.
(b) Buyer shall have twenty-five(25) days after receipt of the later of 1)the
Preliminary Report, 2) copies of all recorded exceptions to title, or 3) an ALTA survey for the
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Property, which shall be procured by Buyer at its expense, within which to notify Seller in
writing of Buyer's disapproval, in its sole and absolute discretion, of any exceptions set forth in
the Preliminary Report.
(c) In the event of Buyer's disapproval of the Preliminary Report, Seller, at its
sole election(to be exercised by written notice to Buyer within five(5)days after receipt of
Buyer's said notice of disapproval), shall have thirty(30)days after Buyer's said disapproval
within which to remove or otherwise remedy the disapproved exceptions.
(d) If Seller cannot eliminate or otherwise remedy the disapproved exceptions
within said twenty(20)day time period, then Seller shall provide Buyer with written notice of
the same, and Buyer shall have ten(10) days after receipt of Seller's notice to elect to waive its
prior objections to such matters or to terminate this Agreement. If Buyer does not timely provide
Seller with written notice of its election to waive its prior objections, then this Agreement shall
thereupon terminate and all sums and documents deposited in Escrow shall be returned to the
parties who respectively deposited the same, and Buyer and Seller shall each pay one-half(1/2)
of the Escrow costs.
3.4 TITLE INSURANCE
Title to the Real Property shall be evidenced by a standard American Land Title
Association policy of title insurance with liability in the amount of the Purchase Price showing
title to the Real Property vested in(or as designated by)Buyer subject only to the Permitted
Exceptions. If the Buyer desires to obtain an extended coverage American Land Title
Association policy, Buyer shall bear all costs of the policy and any required survey, in excess of
the cost of the standard American Land Title Association policy. Seller shall select Title
Company at Seller's discretion prior to opening of escrow and Buyer shall have the option to
accept or reject Title Company within five(5)business days prior to opening of escrow.
4. CONDET90N OF PROPERTY AND CONTINGENCRES.
4.1 CONDITION OF PROPERTY
(a) Except as provided in this Agreement, the Property shall be conveyed and
delivered to Buyer in an "as-is" physical condition. BUYER SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT SELLER IS SELLING AND BUYER IS
PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS AND THAT,
EXCEPT AS EXPRESSLY SET FORTH IN PARAGRAPH 4.3, 6.1 OR OTHERWISE IN
THIS AGREEMENT, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER,
ITS AGENTS OR BROKER AS TO ANY MATTERS CONCERNING THE PROPERTY,
INCLUDING WITHOUT LIMITATION:
(1) The quality, nature, adequacy and physical condition and aspects of the
Property, including, but not limited to, sewage, and utility systems, the square footage within the
Property.
(2) The quality, nature, adequacy, and physical condition of soils, geology and
any groundwater.
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(3) The existence, quality, nature, adequacy and physical condition of utilities
serving the Property.
(4) The development potential of the Property, and the Property's use,
habitability, merchantability, or fitness, or the suitability, value or adequacy of the Property for
any particular purpose.
(S) The zoning or other legal status of the Property or any other public or
private restrictions on use of the Property.
(6) The compliance of the Property with any applicable codes, laws,
regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or
quasi-governmental, entity or of any other person or entity (including, without limitation, the
Americans with Disabilities Act).
(7) The presence of hazardous materials on, under or about the Property or the
adjoining or neighboring property.
(8) The quality of any labor and materials used in any Improvements.
(9) The economics of the operation of the Property.
(b) Seller is not in any way responsible for any demolition or physical site clearance
of said Property. Buyer is solely responsible for the relocation of utilities and easements as
necessary on any parcel within the Property.
4.2 BUYERS CONTINGENCIES
4.2.1 Buyer's obligation to purchase the Property is subject to the following
contingencies described in subparagraphs (a)through(c) below in this Paragraph 4.2.1
("Contingencies"). Each and all of the following Contingencies are for the sole benefit of Buyer
and may be waived or deemed satisfied by Buyer for any or no reason in Buyer's sole and
absolute discretion by written notice to Escrow on or before the date that is ninety(90) days from
the Opening of Escrow and receipt by Buyer of all documents, ]cases, contracts and records
affecting the Property that are in Seller's possession or control, the("Contingency Removal
Date"). Seller shall, within ten (10) days of Opening of Escrow as defined in Paragraph 11.1,
provide to Buyer all documents, leases, contracts,surveys and records that are in Sellers
possession or control including, without limitation, those records referenced in Paragraphs 6.1(e)
and 6.1(g).
(a) Buyer's review and approval of the Preliminary Report and all recorded
exceptions to title in accordance with Paragraph 3.3 of this Agreement. Upon the Close of
Escrow, the Title Company shall be irrevocably committed to issue the Title Policy insuring fee
title to the Property as being vested in Buyer subject to only the Permitted Exceptions and
otherwise in a condition approved by Buyer.
(b) Buyer's inspection and examination of the physical condition of the
Property. Buyer shall have access to the property at reasonable times and shall have the right to
conduct, at Buyer's expense, soil tests, engineering feasibility studies, environmental
investigations and such other studies with respect to the physical condition of the Property as
Buyer may desire. Buyer shall have until the Contingency Removal Date to conduct such tests
and studies, and to give written notice to Seller of any conditions unacceptable to Buyer. Buyer
shall hold and save Seller harmless from and against any and all loss, cost, damage, liability,
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injury or expense, arising out of or directly related to damage to property, injury to or death of
persons, or the assertion of lien claims caused by such entry, inspection and implementation of
soil tests, environmental investigations and other studies with respect to the physical condition of
the Property. If Buyer elects to terminate this Agreement by reason of failure of the Contingency
set forth in this subparagraph (b), Buyer shall promptly upon such election deliver to Seller all
written reports, studies and information prepared by third parties for Buyer which pertain to the
physical condition of the Property, provided that Buyer has the legal right, power and authority
to provide such third party reports, studies and information to Seller.
If Buyer discovers any pre-existing Hazardous Materials on the Property
prior to the Contingency Removal Date (that Buyer did not place or release), then Seller shall
have the option, but not the obligation, at Seller's sole and absolute discretion, to remediate such
Hazardous Materials. if Seller declines to so remediate, then Buyer shall have the option to
terminate this Agreement and receive its Deposit. As use herein, the term "Hazardous
Material(s) includes, without limitation, any hazardous or toxic material, substance, irritant,
chemical or waste, which is(A)defined, classified, designated, listed or otherwise considered
under any Environmental Law as a"hazardous waste," "hazardous substance,""hazardous
material," extremely hazardous waste," "acutely hazardous waste," "radioactive waste,"
"biohazardous material," "pollutant," "toxic pollutant," contaminant," "restricted hazardous
waste," "infectious waste," "toxic substance," or any other terms or expression intended to
define, list, regulate or classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment, (B)toxic, ignitable, corrosive, reactive, explosive, flammable,
infectious, radioactive, carcinogenic or mutagenic, and which is or becomes regulated by an
local, state or federal governmental authority, (C) asbestos, (D) an oil, petroleum, petroleum
based product or petroleum additive, derived substance or breakdown product, €urea
formaldehyde foam insulation, (f)polychlorinated biphenyls (PCBs), (G) Freon and other
chlorofluorocarbons, (H) any drilling fluids, produced waters and other wastes associated with
exploration, development or production of crude oil, natural gas or geothermal resources, and (1)
lead-based paint.
(c) Buyer's review and approval of all leases, service contracts and other
documents affecting the Property, if any.
4.2.2 Prior to the Close of Escrow, Buyer shall have secured all governmental
approvals, licenses, entitlements and permits, conditional use permits, site plan approvals,
subdivision maps, storm water drainage permits and utility connections, using commercially
reasonable efforts, which Buyer determines are necessary for Buyer's proposed development and
use of the Property(collectively, "Entitlements"), including without limitation, environmental
approvals (including, without limitation, compliance with CEQA including certification of an
environmental analysis and report- conditional use permits; and design development approval.
Buyer shall be deemed to have secured an Entitlement only when (i) it has obtained certification
(e.g., an ordinance approving an Entitlement or other similar confirmation), and (ii) it is deemed
to be "Final" in accordance with the following terms. The date that all of the Entitlements are
deemed to be Final is referred to herein as the "Entitlement Date". An Entitlement shall be
deemed "Final" only when it does not contain any term, condition, restriction, impact fees or
monetary exaction which is unacceptable to Buyer in Buyer's sole and absolute discretion, and
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Entitlements shall not be deemed Final unless such Entitlements are fully vested rights
benefitting Buyer and all governmental and quasi-governmental authorities having jurisdiction
over any aspect of the matter, have unconditionally and finally approved the same, and the time
period within which any party may appeal or otherwise contest each such approval by
administrative or judicial proceeding, referendum, petition for rehearing or otherwise has expired
without objection, appeal or contest,or if an appeal or contest has been filed or pursued, such
appeal or contest has been fully and favorably resolved, as determined in Buyer's sole and
absolute discretion, and the time period for any further appeal or contest to such resolution by
any party has expired.
4.2.3. 1f Buyer disapproves any Contingency within the applicable time period
provided above, Buyer's sole remedy shall be to terminate this Agreement and Seller shall have
no obligation to remedy any Contingency which Buyer disapproves. If this Agreement
terminates as a result of the failure of the satisfaction of any of the Contingencies, all sums and
documents deposited in Escrow shall be immediately returned to the parties who respectively
deposited the same without further instruction, and Buyer and Seller shall each pay one- half
(1/2)ofthe Escrow costs.
4.2.4. If Buyer fails to give written notice to Seller of its disapproval of any
Contingency within the respective applicable time limit set forth above in Paragraph 4.1, it shall
conclusively be deemed that Buyer has disapprover) such Contingency.
4.2.5. If Buyer defaults under this Agreement and fails to close Escrow for the
purchase of the property through no fault of Seller, then in addition to liquidated damages
pursuant to Paragraph 9 Buyer shall pay all costs of escrow.
4.3 CONDITIONS PRECEDENT.
The following "Conditions Precedent" shall be satisfied and true as of the Close of
Escrow.
4.3.1 Seller has represented to Buyer in writing that Seller has no knowledge of
any Leases or Other Contracts affecting the Property other than those Seller shall have delivered
to Buyer under Paragraph 4.2.1 of this Agreement.
4.3.2 Buyer's receipt, review and approval, in its reasonable discretion, of a
tenant estoppel certificate(if applicable)affirming, among other things, that any lease agreement
is in full force and effect,there are no defaults under such lease, and the amount of any security
deposit currently on file with Seller. All such tenant estoppel certificates shall be provided by
Seller to Buyer within twenty(20)days of Opening of Escrow as defined in Paragraph 11.
4.3.3 All representations and warranties of Seller in this Agreement shall be true
on and as of the applicable Closing as though made at that time. All covenants of Seller with
respect to the Site which are required to be performed prior to the Closing shall have been
performed by such date.
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4.3.4 The Pomona Oversight Board shall have approved this Agreement after
notice of a public meeting in accordance with California Health and Safety Code Section
34181(f).
4.3.5 The California Department of Finance shall have approved this Agreement
in accordance with California Health and Safety Code Sections 34179(h) and 34181(f).
In the event any Condition Precedent shall not be satisfied and true as of the Close of Escrow,
then in such event Buyer, in its sole and absolute discretion may 1) terminate this Agreement and
all sums and documents deposited in Escrow shall be immediately returned to the parties who
respectively deposited the same without further instruction, and Buyer and Seller shall each pay
one- half(112 ) of the Escrow costs, 2) waive any Condition Precedent, except 4.3.4 and 4.3.5,
at the sole and absolute discretion of the Buyer and close Escrow on or prior to the Close of
Escrow, or 3) in the event Seller is unable to obtain the approvals required under Paragraphs
4.3.4 and 4.3.5,this Agreement shall automatically terminate with each party responsible for
their own cost or expenses incurred pursuant to this Agreement, each party shall pay % of the
Escrow fees and City shall pay all title fees.
4.4 RIGHT OF REPURCHASE
(a) If the Buyer fails to obtain building permits and initiate construction on the
Property within 3-years from close of escrow, then Seller shall have an option ("Repurchase
Option") to re-acquire fee simple title in the Property in the following manner:
(1) Seller shall give written notice to Buyer of its failure to initiate
construction pursuant to Paragraph 4.4(a)of this Agreement.
(2) Provided Buyer shall fail to commence construction within thirty (30)-
days of receipt of such notice, (or a longer period agreed upon in writing by the parties), then
Seller may give written notice to Buyer of Seller's intent to exercise the Repurchase Option to
obtain fee simple title to the Property.
(3) Within fifteen days of Buyer's receipt of the notice of exercise of the
Repurchase Option, Buyer and Seller shall open a "Repurchase Escrow" for the repurchase of the
Property. The "Repurchase Option Price" shall be One Million Eight Hundred Ninety Five
Thousand Dollars ($1,895,000).
(4) On or before the close of the Repurchase Escrow, Buyer shall deliver to
escrow holder (for the benefit of Seller) a signed grant deed to the Property in favor of Seller-
Title to the Property shall be transferred in materially the same condition as was originally vested
in Seller prior to Buyer's acquisition of the Property as described under this Agreement, (i.e. free
and clear of any encumbrances, liens or title impediments created by Buyer). Upon payment by
Seller of the Repurchase Option Price into escrow and compliance with the title delivery
conditions as described herein, the Repurchase Escrow shall close.
(5) Buyer and Seller shall each pay one-half of the Repurchase Escrow fee.
Other closing costs shall be paid by the parties as customary in Los Angeles County.
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5. EXCHANGE.
5.1 Buyer and Seller acknowledge that Buyer shall have the right to cause this
Agreement to be modified so that Buyer may have the transaction qualify as an exchange under
the Internal Revenue Code of 1954, and the California Revenue and Taxation Code. Buyer shall
exercise its right to modify this Agreement by giving Seller written notice at least sixty(60) days
prior to Close of Escrow, setting forth in such notice all of the conditions relating to such
exchange. Seller agrees to fully cooperate with Buyer to modify this Agreement as is necessary.
Seller shall bear no additional cost, expense or liability(whether actual or contingent) as a result
of the exchange transaction. .
6. REPRESENTATIONS AND WARRANTIES
6.1 SELLER'S WARRANTIES
Seller makes the representations and warranties in this Paragraph 6, each and all of which
shall survive any and all inquiries and investigations made by Buyer and shall survive the Close
of Escrow and recordation of the Grant Deed.
(a) The Successor Agency is a public entity duly formed and existing
pursuant to California Health and Safety Code Sections 34173 and 34175.
(b) Neither the entering into this Agreement nor the performance of any of
Seller's obligations under this Agreement will violate the terms of any contract, agreement or
instrument to which Seller is a party.
(c) Seller has not actually received any formal written notice that any of the
easements, covenants, conditions, restrictions or agreements to which the Property is subject
interferes with or is breached by the use or operation of the Property as presently used and
operated as a vacant parcel.
(d) Seller has not been served (by means of formal, legal service of process as
required by law) (and has no knowledge oo with any litigation, and no arbitration proceedings
have been commenced, which do or will affect any aspect of the Property or Seller's ability to
perform its obligations under this Agreement.
(e) Seller has delivered to Buyer all leases, service contracts, and other
agreements affecting the Property and represents and warrants that there are not any written
commitments to, or written agreements with, any governmental or quasi-governmental authority
or agency materially affecting the Property which have not been heretofore disclosed by Seller to
Buyer in writing.
(5 Covenants. Seller hereby agrees, through and including the Close of
Escrow and at the Seller's sole cost and expense, to operate the Property in the same manner as
Seller has been operating the Property in the past
Ku Associates Purchase Agnnt Sen Rev 10-2i-I5 Cln.dac -8-
(g) Seller has delivered to Buyer all documents related to the physical
condition of the Property in Seller's possession or control including, without limitation, surveys,
environmental reports, Phase I reports, Phase II reports, soil reports, and geotechnical reports.
6.1.1 No Alterations
Seller will not intentionally alter the physical condition of the Property from and
after the date of this Agreement, reasonable wear and tear excepted. If,through no fault of
Seller, the physical condition of the Property is different on the date scheduled for the Close of
Escrow than as of the date of this Agreement, then, except as provided in Section 13 of this
Agreement, in such event Buyer may terminate this Agreement. If Buyer elects to terminate this
Agreement by written notice to Seller and Escrow Holder given within ten(10 days of discovery
of the altered condition, Escrow shall immediately terminate upon Seller's receipt of Buyer's
notice of election to terminate this Agreement and all sums and documents deposited in Escrow
shall be immediately returned without further instruction to the parties who deposited the same
and Seller and Buyer shall each pay one-half(1/2) of Escrow costs. If Buyer fails to notify Seller
and Escrow Holder of its election to terminate this Agreement within said ten (10)day time
period provided above, Buyer shall be deemed to have accepted the modified condition of the
Property and elected to purchase the Property.
6.1.2 Changed Conditions
If, prior to the Close of Escrow, new events have occurred which were beyond the
control of Seller and which render any previously true representation or warranty untrue, Seller
shall, within five (5) business days thereafter, disclose those matters by written notice to Buyer.
Buyer shall have ten (10)days after the earlier of(i) such disclosure; or(ii) Buyer's independent
discovery that such representation or warranty has become untrue, to elect, in its sole and
absolute discretion, and as its sole remedy, by written notice to Seller within said ten (10) day
period, whether(i) to purchase the Property or(ii) terminate this Agreement by written notice to
Seller and Escrow and Escrow shall immediately terminate upon Seller's receipt of Buyer's
notice of election to terminate this Agreement and all sums and documents deposited in Escrow
shall be immediately returned to the parties who deposited the same without further instruction
and Seller and Buyer shall each pay one-half(112) of Escrow costs. If Buyer fails to notify Seller
and Escrow Holder of its election to terminate this Agreement within said ten (10) day time
period provided above, Buyer shall be deemed to have accepted the modified representations and
warranties and elected to purchase the Property.
6.1.3 Other than those express representations and warranties contained in this
Agreement, Seller makes no warranty or representation, express or implied, including but not
limited to, implied warranties of merchantability and fitness for a particular purpose.
6.1.4 Except to the extent Seller has made a specific representation and
warranty with respect thereto, no document or information provided by Seller to Buyer shall
constitute a representation as to the completeness or accuracy of such documents or information.
Ku Associates Purchase Agrmt Sen Rev 10.21-15 On.doc -9-
6.2. REPRESENTATIONS AND WARRANTIES BY BUYER.
Buyer makes the following representations and warranties in this Paragraph 6.2, each and
all of which shall survive any and all inquiries and investigations made by Seller and shall
survive the Close of Escrow and recordation of the Grant Deed.
(a) Each and all of the information and any financial statement delivered by
Buyer to Seller are true and correct.
(b) Buyer is a corporation, duly organized, validly existing and in good
standing under the laws of the State of California which has the power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The Buyer, and the
specific, individual parties signing this Agreement on behalf of Buyer represent and warrant that
the parties signing this Agreement on behalf of the Buyer have the full legal power, authority and
right to execute and deliver this Agreement.
(c) Buyer has or will make its own investigation concerning the physical
condition of the Property, condition of title or any other matter pertaining to the Property, and,
other than the specific representations and warranties made by Seller pursuant to this Agreement,
Buyer is not relying on any representations, warranties or inducements of Seller or Seller's
broker with respect to the physical condition of the Property, condition of title to the Property, or
any other matter pertaining to the Property. Accordingly, except for those specific
representations and warranties of Seller set forth in this Agreement, Buyer is purchasing the
Property and each and every aspect thereof in an "as-is" condition, and Seller makes no express
or implied representation concerning (i) the status of title to the Property; (ii) any leases; (iii) the
current or fixture real estate tax liability, assessment or valuation of the Property; (iv) the
compliance of the Property in its current or future state with applicable laws or any violations
thereof, including without limitation, those relating to access for the handicapped, environmental
or zoning matters, or the ability to obtain a change in the zoning of the Property; (v) the nature
and extent of any right-of-way, lease, lien, encumbrance, license or reservation; (vi) the
availability of any financing for the purchase, alteration or operation of the Property from any
source, including, without limitation, any governmental authority or lender; (vii)the current or
future use of the Property; (viii) the viability or financial condition of any tenant; and (ix) the
actual or projected income or operation expenses of the Property.
6.2.1 Brokers
Neither Buyer nor Seller has engaged or dealt with any broker or finder in
connection with the sale contemplated by this Agreement. Buyer shall pay, and shall hold Seller
harmless from and against, any commission or finder's fee payable to any party who represents
or claims to represent Buyer. Seller shall pay, and shall hold Buyer harmless from and against,
any commission or finder's fee payable to any party who represents or claims to represent Seller
7. INDEMNIFICATION.
7.1 Subject to any other provisions of this Agreement to the contrary, each party
agrees to indemnify("Indemnitor") and hold the other party("Indemnitee") harmless from and
Ku Associates Purchase Agrmt Sen Rev 10.21-IS Cin.doc _10-
against any claim, loss, damage or expense, including any reasonable attorney's fees (including
attorney's fees on appeal), asserted against or suffered by the Indemnitee resulting from:
(a) Any breach by the Indemnitor of this Agreement;
(b) The inaccuracy or breach of any of the representations, warranties or
covenants made by the Indemnitor.
7.2 Indemnitee shall submit any claim for indemnification under this Agreement to
the Indemnitor in writing within a reasonable time after Indemnitee determines that an event has
occurred which has given rise to a right of indemnification under this Paragraph 7 and shall give
Indemnitor a reasonable opportunity to investigate and cure any default of Indemnitor under this
Agreement and eliminate or remove any claim by a third party. Notwithstanding the foregoing, if
the nature of Indemnitor's default or the third party claim is such that it would be impractical or
unreasonable to give Indemnitor an opportunity to investigate and cure such default and remove
such claim, Indemnitee need not give Indemnitor such opportunity.
7.3 If such claim for indemnification relates to a claim or demand presented in
writing by a third party against Indemnitee, Indemnitor shall have the right to employ counsel
reasonably acceptable to Indemnitee to defend any such claim or demand, and Indemnitee shall
make available to Indemnitor, or its representatives, all records and other materials in its
possession or under its control reasonably required by Indemnitor for its use in contesting such
liability. If Indemnitor does not elect to defend any such claim or demand, Indemnitee may do so
at its option, but shall not have any obligation to do so.
8. ASSUMPTION OF LIABILITIES.
8.1 Effective as of the Close of Escrow, Buyer shall be deemed to have assumed all
obligations and liabilities of Seller that constitute covenants running with the land to the extent
both pertaining to the Property, and first accruing after the Close of Escrow and expressly
excluding all obligations and liabilities with respect thereto which arise prior to the Close of
Escrow or which arise as a result of events which occur prior to the Close of Escrow.
Except for the foregoing assumption of obligations and liabilities by Buyer, Buyer does not
assume and shall not be liable for any of the obligations or liabilities of Seller of any kind or
nature affecting or otherwise relating to Seiler, the Property, or otherwise.
8.2 Seller shall, prior to the Close of Escrow, timely perform and discharge all
obligations and liabilities of every kind whatsoever to be discharged prior to the Close of Escrow
and arising from or relating to(i) the Property, including, but not limited to,the use and
ownership of the Property; and (ii) the operation of the Property.
9. LIQUIDATED DAMAGES.
IF BUYER FAILS TO COMPLETE. THE PURCHASE OF THE PROPERTY AS
HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, IT IS AGREED THAT
THE DEPOSIT ACTUALLY MADE PURSUANT TO PARAGRAPH 2(a) OF THIS
AGREEMENT, FOR THE INITIAL ESCROW PERIOD OR THE EXTENDED ESCROW
PERIOD AS APPLICABLE, AND SUBJECT TO THE PROVISIONS OF PARAGRAPH
Ku Associates Purchase Agrmt Sen Rcv 10-21-15 Chdoc -1 I-
11.20 OF THIS AGREEMENT, SHALL BE NON- REFUNDABLE AND SELLER SHALL
BE ENTITLED TO SUCH DEPOSITS, WHICH AMOUNTS SHALL BE ACCEPTED BY
SELLER AS LIQUIDATED DAMAGES AND NOT AS A PENALTY AND AS SELLER'S
SOLE AND EXCLUSIVE REMEDY. IT IS AGREED THAT SAID AMOUNT
CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER
PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671 ET SEQ. BUYER AND
SELLER AGREE THAT IT WOULD BE IMPRACTICAL OR IMPOSSIBLE TO
PRESENTLY PREDICT WHAT MONETARY DAMAGES SELLER WOULD SUFFER
UPON BUYER'S FAILURE TO COMPLETE ITS PURCHASE OF THE PROPERTY. BUYER
DESIRES TO LIMIT THE MONETARY DAMAGES FOR WHICH IT MIGHT BE LIABLE
HEREUNDER AND BUYER AND SELLER DESIRE TO AVOID THE COSTS AND
DELAYS THEY WOULD INCUR IF A LAWSUIT WERE COMMENCED TO RECOVER
DAMAGES OR OTHERWISE ENFORCE SELLER'S RIGHTS. IF FURTHER
INSTRUCTIONS ARE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE
TERMS OF THIS PARAGRAPH 9, BUYER AND SELLER AGREE TO EXECUTE THE
SAME. THE PARTIES ACKNOWLEDGE THIS PROVISION BY PLACING THEIR
INITIALS BELOW: _
BUYER: /� ' SELLER:
10. SPECIAL CONDITIONS.
There are no special conditions.
11. ESCROW AND CLOSING.
11.1 OPENING OF ESCROW
As soon as possible after the full execution of this Agreement, however not earlier than
the selection of the Title Company as provided in Paragraph 3.4, Buyer and Seller shall open an
escrow (the "Opening of Escrow") for the purpose of consummating the purchase and sale
contemplated by this Agreement ("Escrow")by depositing an executed copy of this Agreement
with , at , California("Escrow Holder"). This
Agreement shall constitute escrow instructions to Escrow Holder. Seller and Buyer shall,
promptly upon request by Escrow Holder, execute such additional escrow instructions as may be
reasonably required by Escrow Holder, including Escrow Holder's standard printed conditions
and stipulations with respect to escrows concerning the purchase and sale of real property;
provided, however, that if there is any conflict between the provisions of this Agreement and the
provisions of any such additional instructions, the provisions of this Agreement shall prevail.
Upon delivery to Escrow of a fully executed copy of this Agreement by both parties, and the
selection of the Title Company as provided in Paragraph 3.4, Escrow shall be deemed opened on
the terms and conditions set forth in this Agreement.
11.2 CLOSE OF ESCROW
Subject to the provisions of Paragraph 4.3, Escrow shall close, and the Grant Deed shall
be recorded in the Office of the County Recorder of Los Angeles County, California("Close of
Escrow") not later than six (6) months after the Contingency Removal Date. The failure of any
Ku Associates Purchase Agrmt Sen Rev 10-21-15 Cln.doc -12-
condition precedent or performance of due diligence by Buyer shall not extend the Close of
Escrow. Buyer has the option to extend the Close of Escrow by a period of ninety(90) days
upon a written request by Buyer which will be approved by the City Manager provided all of the
following conditions have been met:
(a) Buyer increases the Buyer Deposit to a total of$189,500.
(b) Entitlement application for a 100-plus room hotel project on the Property
("Project") is submitted to the Seller by Buyer and accepted by the Planning Division.
(c) The Project has been approved by the Planning Commission or the project has
been deemed allowed under the Corridor Specific Plan, but may be subject to further review on
appeal by the City or a third party.
(d) Buyer is not in default of any other provisions of this Agreement.
(e) Buyer shall assume all costs of on-site maintenance, including dumping and trash
removal and weed abatement if extension of escrow is granted.
(f) If Buyer fails to close Escrow during the 90 day extension period through no fault
of Seller, then Buyer shall receive as liquidated damages one-half(112) of the total Buyer
Deposit which will be the sum of$94,750, and Buyer shall pay all costs of Escrow and title
insurance fees.
11.3 SELLER DELIVERIES TO ESCROW
Within the time set forth below, or if none is specified, prior to the Close of Escrow,
Seller shall deliver to Escrow Holder, or if so indicated,to Buyer, the following documents and
items:
(a) At least one(l)day prior to the Close of Escrow, the duly executed and
acknowledged Grant Deed.
(b) At least one(1) day prior to Close of Escrow, Seller shall deliver such
certifications, declarations or other documents as may be required under Internal Revenue Code
Sec. 1445 and California Revenue and Tax Code See. 18662, together with any and all other
documents required by law pertaining to foreign or out-of-state sellers.
11.4 BUYER'S DELIVERIES TO ESCROW
Buyer shall deliver to Escrow Holder prior to the Close of Escrow the balance of the cash
portion of the Purchase Price set forth in Paragraph 2, as adjusted pursuant to this Agreement,
together with an additional sum sufficient to cover Buyer's closing costs as set forth in Paragraph
13.7.2, below.
11.5 COMPLETION OF ESCROW
(a) On the Close of Escrow, the Escrow Holder shall record the Grant Deed and shall
deliver the monies and instruments to which each party is entitled pursuant to this Agreement,
only when the Title Company is in a position to issue its ALTA policy of title insurance subject
Ku AssoctalesPurchase Agrml Sen Rev 10-21-15 Cln.doc -13-
only(i) to the Permitted Exceptions; and (ii) Title Company's standard pre-printed exclusions,
with liability in the amount of the purchasc price, showing title to the Property vested in Buyer
(or as designated by Buyer) ("Title Policy").
(b) Upon Close of Escrow, possession of the Property shall be delivered to Buyer
subject to the Permitted Exceptions and all rights of tenants under the Leases, and the following
items, documents and monies shall be delivered to the parties by Escrow Holder as set forth
below:
(1) To Seller: the cash portion of the Purchase Price as set forth in
Paragraph 2 as adjusted pursuant to this Agreement and reduced by the amount of Seller's
closing costs as set forth in Paragraph 11.6.1, below.
(2) To Buyer: the Title Policy and Grant Deed after recordation.
11.6 COSTS OF ESCROW
Upon Close of Escrow, Escrow and title charges shall be paid in the manner provided below.
11.6.1 Seller shall pay:
(a) The cost of the ALTA standard coverage portion of the Title Policy.
(b) The cost of any and all documentary transfer tax or stamps or other sales
tax.
(c) One-half(1/2) of the Escrow fees.
11.6.2 Buyer shall pay:
(a) All recording fees.
(b) One-half(112) of the Escrow fees.
(c) The cost of the Title Policy in excess of standard ALTA coverage.
11.6.3 Escrow Holder is authorized and instructed to debit Seller and Buyer for closing
costs as set forth in Paragraphs 11.6.1 and 11.6.2 above and as otherwise provided in this
Agreement.
11.6.4 If Escrow fails to close as a result of the default of this Agreement by a party, the
defaulting party shall pay all title and escrow charges; provided, however, that nothing in this
Paragraph I 1 shall be deemed to limit, and the provisions of this Paragraph 11 shall be in
addition to, all other rights and remedies of the non-defaulting party.
12. PRORATIONS.
12.1 Prorations shall be made as of the Close of Escrow. All prorations shall be made
on the basis of a thirty(30) day month and shall be paid in cash to Seller if it is entitled thereto,
or shall be credited against the cash portion of the Purchase Price if Buyer is entitled thereto.
Ku AysaciaiesPurchase Agmi Sen Rev IQ-21-15 Chdoc -14-
Such prorations shall be made by Escrow Holder on the basis of a statement(s) approved by
Buyer and Seller and deposited into the Escrow prior to the Close of Escrow. The date used for
prorations is hereinafter referred to as the "Proration Date."
(a) All real estate taxes, assessments and all personal property taxes due and
owing as of the Proration Date, and all penalties and interest thereon, shall be paid by Seller.
Current real estate taxes, special assessments and personal property taxes which are not yet due
and owing shall be prorated based upon the most recent tax bill, so that the portion of current
taxes allocable to the period from the beginning of such tax year through the Proration Date shall
be charged to and paid by Seller and the portion of the current taxes allocable to the portion of
such tax year from the Proration Date to the end of such tax year shall be charged to and paid by
Buyer. Proration of taxes and assessments shall be final as of the Proration Date, regardless of
the amount of taxes or assessments that actually are, or subsequently become, due.
(b) Expenses of operating the Property(other than insurance premiums, taxes
and utility charges) which were prepaid by Seller for a period beyond the Proration Date shall be
credited to Seller.
12.2 Buyer shall be responsible for obtaining and paying for utility services from and
after Close of Escrow.
13. DAMAGE OR DESTRUCTION PRIOR TO CLOSE OF ESCROW.
If the Property, or any portion thereof, is damaged or destroyed prior to the Close of
Escrow from any cause whatsoever, whether an insured risk or not, including but not limited to,
fire, flood, accident or other casualty which, according to the Buyer's and Seller's best estimate,
would cost more than Fifty Thousand Dollars ($50,000) to repair, Buyer shall have the option,
upon written notice to Seller, to either(i) terminate this Agreement, or(ii) purchase the Property.
If Buyer elects to terminate this Agreement, Escrow shall immediately terminate upon Seller's
receipt of Buyer's notice of election to terminate and Escrow Holder shall thereupon promptly
return all documents, items and monies in its possession to the party who shall have deposited
same with Escrow Holder without further instruction. In the event of such termination, each
party shall pay one-half(112) of the Escrow fees. If Buyer elects to purchase the Property, Buyer
shall be entitled to, and Seller shall assign to Buyer, all insurance proceeds covering such
damage or destruction and, in addition, Seller shall pay Buyer the amount of any deductible
(which can be paid by Seller by means of a credit against the Purchase Price). In the event that
Buyer's and Seller's best estimate of the cost of repair is Fifty Thousand Dollars ($50,000)or
less, Buyer shall purchase the Property and be entitled to, and Seller shall assign to Buyer, all
insurance proceeds covering such damage or destruction. In addition, the difference between the
amount of insurance proceeds available and the cost of repair shall be deducted from the cash
portion of the Purchase Price. Should any damage or destruction occur prior to the Close of
Escrow, the date scheduled for the Close of Escrow shall be extended for a period of time not to
exceed thirty(30) days, for the purpose of allowing Buyer and Seller sufficient time to estimate
the cost of repair. If Buyer fails to notify Seller of its election under this Paragraph 13, Buyer
shall be deemed to have elected to purchase the Property.
Ku Associates Purchase Agrmt Sen Rev 10-21-15 Cln.dec A5-
14. EMINENT ®OMAaN.
14.1 The words "condemnation" or"condemned" as used in this Paragraph 14 shall
mean the exercise of, or intent to exercise, the power of eminent domain expressed in writing, as
well as the filing of any action or proceeding for such purpose, by any person, entity, body,
agency or authority having the right or power of eminent domain (the "condemning authority").
14.2 If Seller receives written notice from a condemning authority advising of a
condemnation of all or any portion of the Property("Condemnation Notice"), Seller shall
immediately advise Buyer of same in writing and deliver therewith a copy of the Condemnation
Notice. Within ten(10) days after Buyer's receipt of the Condemnation Notice, Buyer shall
notify Seller of its election to either(i)terminate this Agreement and the Escrow or(ii) purchase
the Property. If Buyer elects to terminate this Agreement, Escrow shall immediately terminate
upon Seller's receipt of Buyer's notice of election to terminate this Agreement and Escrow
Holder shall thereupon promptly return all documents, items and monies in its possession to the
party who shall have deposited same with Escrow Holder without further instruction. In the
event of such termination, each party shall pay one-half(1/2) of the Escrow fees. If Buyer elects
to purchase the Property, Seiler shall transfer to Buyer at the Close of Escrow all proceeds from
condemnation or Seller's right to receive all such proceeds. If Buyer fails to notify Seller of its
election under this Paragraph 14, Buyer shall be deemed to have elected to purchase the
Property.
15. SURVIVAL, OF CLOSE OF ESCROW.
All representations, warranties, covenants, conditions, agreements and obligations
contained in or relating to this Agreement shall survive the Close of Escrow and the recordation
of the Grant Deed and shall not merge therein unless specifically stated otherwise in this
Agreement.
16. INTENTIONALLY OICVIrTEID
17. NOTICES.
All notices to be given pursuant to this Agreement shall be either(i) personally delivered;
(ii) sent via certified or registered mail, postage prepaid; (iii)overnight courier(such as Federal
Express, DHL, etc.);or(iv)by telecopy transmittal. If sent via certified or registered mail,
receipt shall be deemed effective forty-eight(48)hours after being deposited in the United States
mail. If sent via telecopy transmission, a confirming copy shall be sent to the sender, and receipt
of the telecopy transmittal shall be deemed made twenty-four(24)hours after the sending
thereof. If sent via overnight courier, receipt shall be deemed effective twenty-four(24)hours
after the sending thereof. All notices to be given pursuant to this Agreement shall be given to the
parties at the following respective address.
to Buyer: Ku&Associates, Inc.
Attn: Danny Ku
650 Camino de Gloria
Walnut, CA 989 917 b9
FAX: 909-869-5827
Ku Associates Purchase Awmt Sen Rev 10-21-15 C1n.doc -16-
Phone: 909-869-5828
Email: danny ku@kuassociates.com, dannvcku P-mail.com. &
dancku@yahoo.com
with a copy to:
Chang &Cote, LLP
Attn: Antony Chen, Esq.
19138 E. Walnut Dr. N., Suite 100
Rowland Heights, CA 91748
Phone: 626-854-2112
Fax: 626-854-2120
Email: achen@changcote.com
to Seller:
City of Pomona
505 South Garey Avenue
Pomona, California 91766
Phone: (909) 620-2410
Fax: (909) 620-3703
With a copy to:
Alvarez-Glasman &Colvin
13181 Crossroads Parkway North
Suite 400, West Tower
Industry, CA 91746
Phone: (562) 699-5500
Fax: (562) 692-2244
Email: snichols@agelawftrm.com
to Escrow Holder:
Telecopier No.:
18. ENTIRE AGREEMENT.
This Agreement, and the Exhibits attached hereto, represent the entire Agreement
between the parties in connection with the transactions contemplated hereby and the subject
matter hereof and this Agreement supersedes and replaces any and all prior and
contemporaneous agreements, understandings and communications between the parties, whether
oral or written, with regard to the subject matter hereof. There are no oral or written agreements,
representations or inducements of any kind existing between the parties relating to this
transaction which are not expressly set forth herein. This Agreement may not be modified except
by a written agreement signed by both Buyer and Seller. Without limiting the foregoing, Buyer
and Seller expressly acknowledge and agree that they have not relied on any written or oral
statements made by the other party's real estate broker in entering into this Agreement.
Ku Associates Purchase Agrmt Sen Rev W-21-15 Clmdoe -17-
19. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, legal representatives, administrators, successors in interest and assigns.
20. WAIVER.
No waiver by any party at any time of any breach of any provision of this Agreement
shall be deemed a waiver or a breach of any other provision herein or a consent to any
subsequent breach of the same or another provision. if any action by any party shall require the
consent or approval of another party, such consent or approval of such action on any one
occasion shall not be deemed a consent to or approval of such action on any subsequent occasion
or a consent to or approval of any other action.
21. CAP'T'IONS AND HEADINGS.
The captions and paragraphs numbers appearing in this Agreement are inserted only as a
matter of convenience and do not define, limit, construe,or describe the scope or intent of this
Agreement.
22. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be considered an
original and all of which taken together shall constitute one and the same instrument.
23. GOVERNING LAW.
This Agreement has been prepared, negotiated and executed in, and shall be construed in
accordance with, the laws of the State of California. Any action or proceeding relating to or
arising out of this Agreement shall be filed, if a State action, in the Superior Court of the State of
California for the County of Los Angeles, or if a Federal action, in the United States District
Court for the Central District of California.
24. ATTORNEYS FEES.
If either party named herein brings an action or proceeding to enforce the terms hereof or
declare rights hereunder, the prevailing party in any such action (or proceeding), on trial or
appeal, shall be entitled to its reasonable attorneys' fees to be paid by the losing party as fixed by
the Court (or if applicable, the arbitrator).
25. TIME OF ESSENCE.
Time is of the essence with respect to all matters contained in this Agreement.
26. DATE OF AGREEMENT.
All references in this Agreement to "the date of this Agreement" or"the date hereof" shall
be deemed to refer to the date set forth in the fust paragraph of this Agreement.
27. INVALIDITY OF ANY PROVISION.
If any provision(or any portion of any provision) of this Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term of this
Ka Associates Purchase Agnm Sen Rev 10-21-15 C1n.doc -18-
Agreement, the legality, validity, and enforceability of the remaining provisions (or the balance
of such provision) shall not be affected thereby.
28. NO RECORDATION.
Buyer shall not record this Agreement, any memorandum of this Agreement, any
assignment of this Agreement, or any other document which would cause a cloud on the title to
the Property.
29. DRAFTING OF AGREEMENT.
Buyer and Seller acknowledge that this Agreement has been negotiated at arm's length,
that each party has been represented by independent counsel and that this Agreement has been
drafted by both parties and no one party shall be construed as the draftsperson.
30. NO THIRD PARTY BENEFICIARY RIGHTS.
This Agreement is entered into for the sole benefit of Buyer and Seller and no other
parties are intended to be direct or incidental beneficiaries of this Agreement and no third party
shall have any right in, under or to this Agreement.
31. JOINT AND SEVERAL LIABILITY.
If either the Buyer or the Seller(separately) is comprised of more than one party, each
party constituting the Seller or Buyer, respectively, is jointly and severally liable for the
performance of this Agreement.
32. INCORPORATION OF EXHIBITS.
Each and all of the exhibits attached to this Agreement are incorporated herein as if set
forth in full in this Agreement.
33. NO JOINT VENTURE, PARTNERSHIP OR OTHER RELATIONSHIP
CREATED.
The relationship between Buyer and Seller is that solely of a seller and buyer and no joint
venture, partnership or other relationship is created or implied by this Agreement.
34. ASSIGNMENT
This Agreement may not be assigned by either party without the express written consent
of the other party, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, Buyer shall have the right to assign this Agreement or the Property, or any rights
therein, to a limited liability company or any other entity which is controlled and owned by a
majority interest by Buyer. Buyer shall not be able to concurrently enter into a separate purchase
and sale agreement to sell the Property to any third party without Seller's consent, which consent
shall not be unreasonably withheld and provided further such sale(i) closes concurrently with or
within ten (10) days of the Close of Escrow contemplated in this Agreement, and (ii) shall be
expressly subject to all obligations under this Agreement, including, without limitation, the
repurchase rights in Paragraph 4.4.
Ku Associates Purchase Agrmt Sen Rev 10-21-I5 Cln.doc -19-
35. RESERVA` EON OF DISCRETION
(1) The Parties agree and acknowledge that nothing in this Agreement in any respect
does or shall be construed to affect or prejudge the exercise of the City or Authority's discretion
concerning consideration of any submittal by the Buyer or any other party. Further, nothing in
this Agreement in any respect does or shall be construed to affect or prejudge the City or
Authority's discretion to consider, negotiate, approve or disapprove any development or any
required approvals necessary by the laws, rules, and regulations governing the development of
property.
(2) By its execution of this Agreement, the City and/or Authority are not committing
themselves to or agreeing to undertake any other acts or activities requiring the subsequent
independent exercise of discretion by the Authority, the City or any Agency or department
thereof, Except as specifically provided in this Agreement, the Authority and/or the City shall
not be responsible for any costs or expenses incurred by the Buyer pursuant to this Agreement,
nor shall the Agency be responsible for any potential lost profits of the Buyer.
(3) Buyer is aware, understands, and acknowledges that Authority and City are by
law required to exercise their sole unfettered discretion in approving or denying any land use,
development or building permit approvals required by the Buyer. Neither this Agreement nor
any other agreement with Buyer obligates Authority or City to approve, disapprove or consider
any development entitlements for any project in a particular manner
(SIGNATURES APPEAR ON NEXT PAGE)
Ku Associates Purchase Agent Sen Rev](I-2f-15 Clmdoc -20-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set
forth in the first paragraph of this Agreement.
"Seller" THE CITY OF POMONA ACTING AS THE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF
POMONA, a public body, pursuant to California
Health and Safety Code Sections 34173 and 34175
By:
Name:
Title:
APPROVED A5 TO FORM:
ALVAREZ-GLASMAN & COLVIN
By:
Attorneys for Seller
"Buyer" KU &ASSOCIATES, INC, a California
corporation
By:
Manager.,,, P.-c—tZ r i
KU Si /NC .
Ku Associates Purchase Agrm(Sen Rev 10-21-15 Cin,doc -21-
EXHIBIT "A"
Legal Description of the Property
APN:
Ku Associates Purchwc Aggmt Sen Rev 10-21-15 Cln.doc -22-
w
EXHIBIT "B"
Depiction of the Property
Ku Associates Purchase Agrmt Sen Rev 10-21-15 Cln.cloc -23-
EXHIBIT "C"
Grant Deed
WHEN RECORDED RETURN TO
MAIL TAX STATEMENTS TO:
THE AREA ABOVE IS RESERVED FOR RECORDER'S USE
This document exempt from recording fee pursuant to
Section 27383 of the California Government Code
GRANT DEED
RECITALS:
1. The property commonly known as 700 and 704 East Foothill Blvd., Pomona, California
(APN 8367-003-900 and APN 8367-003-901) and legally described on Exhibit "A" attached
hereto ("Property") was formerly owned by the Redevelopment Agency of the City of Pomona
("Agency").
2. As part of the 2011-12 State budget bill, the California Legislature enacted, and the
Governor signed AB X1 26 ("AB 26") requiring that each redevelopment agency be dissolved.
On June 27, 2012 the State Legislature adopted Assembly Bill 1484 ("AB 1484") amending the
provisions of AB 26.
3. In accordance with the requirements of AB 26 and AB 1484, the City Council of the City
of Pomona ("City") on January 9, 2012, adopted City Council Resolution No. 2012-8 electing to
become the Successor Agency ("Successor Agency") to the former Redevelopment Agency of
the City of Pomona pursuant to California Health and Safety Code Sections 341710) and 34173.
4. Pursuant to California Health and Safety Code Sections 34173 and 34175(b) and City
Council Resolution No. 2012-8 all of the assets and properties of the former Redevelopment
Agency of the City of Pomona were transferred to the Successor Agency by operation of law.
5. The Successor Agency is the current legal owner of the Property as the successor in
interest to the former Redevelopment Agency of the City of Pomona.
Ku Associates Purchase AgW Sen Rev 10-21-15 Clu.doc -24-
6. This disposition of the Property is made by the Successor Agency and approved by
Resolution of the Pomona Oversight Board after notice of a public meeting in accordance with
California Health and Safety Code Section 34181(f).
7. The Property is conveyed by Grantor in accordance with the Long Range Property
Management Plan (item #_ } approved on by the Oversight Board
of the Successor Agency to the Redevelopment Agency of the City of Pomona pursuant to
Resolution No. OB- _, and subsequently approved by the California Department of
Finance as evidenced by that certain letter dated , a copy of which is
attached hereto as Exhibit "B" and incorporated herein by reference("DOF Approval").
For a valuable consideration, receipt of which is hereby acknowledged,
THE CITY OF POMONA ACTING AS THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF POMONA, a public body pursuant to
California Health and Safety Code Sections 34173 and 34175 ("Successor Agency" or
"Grantor"), hereby grants to KU & ASSOCIATES, INC., a California corporation ("Grantee"),
that certain real property described in Exhibit "A" attached hereto and incorporated herein by this
reference("Property").
This Grant Deed is subject to an option to repurchase the Property("Repurchase Option")
held by Seller pursuant to an Agreement of Purchase and Sale and Joint Escrow Instruction dated
, 2015 which provides as follows:
4.4 RIGHT OF REPURCHASE
(a) If the Buyer fails to obtain building permits and initiate construction on the
Property within 3-years from close of escrow, then Seller shall have an option ("Repurchase
Option") to re-acquire fee simple title in the Property in the following manner:
(1) Seller shall give written notice to Buyer of its failure to initiate
construction pursuant to Paragraph 4.4(a)of this Agreement.
(2) Provided Buyer shall fail to commence construction within thirty (30)-
days of receipt of such notice, (or a longer period agreed upon in writing by the parties), then
Seller may give written notice to Buyer of Seller's intent to exercise the Repurchase Option to
obtain fee simple title to the Property.
(3) Within fifteen days of Buyer's receipt of the notice of exercise of the
Repurchase Option Buyer and Seller shall open a "Repurchase Escrow" for the repurchase of the
Property. The "Repurchase Option Price" shall be One Million, Eight Hundred Ninety-Five
Thousand Dollars ($1,895,000).
(4) On or before the close of the Repurchase Escrow, Buyer shall deliver to
escrow holder (for the benefit of Seller) a signed grant deed to the Property in favor of Seller.
Title to the Property shall be transferred in materially the same condition as was originally vested
Ku Associates Purchase Agr t Sen Rev I0-21-15 Cln.doc -25-
in Seller prior to buyer's acquisition of the Property as described under this Agreement (i.e., free
and clear of any encumbrances, liens or title impediments created by Buyer). Upon payment by
Seller of the Repurchase Option Price into escrow and compliance with the title delivery
conditions as described herein, the Repurchase Escrow shall close.
(5) Buyer and Seller shall each pay one-half of the Escrow fee. Other closing
costs shall be paid by the parties as customary in Los Angeles County.
Executed on , 20_, in , California.
THE CITY OF POMONA ACTING AS THE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF
POMONA, a public body, pursuant to California
Health and Safety Code Sections 341710), 34173
and34175.
By:
Name:
Title:
ATTEST: APPROVED AS TO FORM:
Secretary Agency Counsel
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached,and not the truthfulness,accuracy,or validity of that document
State of California )
County of )
On before me, (here insert name and title of the
officer),personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s)is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies),and that by his/her/their signature(s)on the instrument the person(s),or the entity upon behalf of
which the person(s)acted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
Ku Associates Purchase Agmt Sea Rev 10-21-15 Cln.doe -26-
MI
Exhibit `A" to Grant Deed
LEGAL IIDIESCRIPTMN
Ku Associales Purchase Agmt Sen Rev 10-21-15 Cln.doc -27-
EXHIBIT B
BOZNANSKI&COMPANY
Property Valuation&Consultation
283 North Rampart Street Suite A
Orange,California 92868-1,850
CARL W.BOZNANSKI TELEPHONE:
LINDA L.BOZNANSKI (714)634-3813
DYANA R.MURRAY FAX: (714)634-4026
BLAKE E. BOZNANSKI curl@boznanskiappraisal.com
valuation Consultants www.boznanskiapproisal.com
RICHARD B.NICHOLSON
DENISE M.RLEBE
February 1, 2015
Mr. Raymond M. Fong Re: Appraisal Report—
Deputy City Manager Commercial Land
Redevelopment Director 700& 704 East Foothill Boulevard
City of Pomona Pomona, California
505 Garey Avenue
Pomona, California
File No. 2956
Dear Mr, Fong,
In accordance with the written authorization we have received, Carl W. Boznanski
of
Boznanski & Company, a real property appraisal firm, has prepared this Appraisal Report
N of a vacant commercially oriented parcel. Our date of value is effective as of February 1,
2015.
The subject property is identified as follows:
Successor Redevelopment Agency of the City of Pomona
APN: 8367-003-900 and-901
This irregularly shaped, but near rectangular, parcel located on the south side of Foothill
Boulevard to the west of Towne Avenue is comprised of two Assessor Parcel Nos., to be
considered as one, encompassing a gross area of 155,870 + sf or 2.66 ± acres (gross).
This parcel is vacant and undeveloped but is otherwise fully finished and ready for
development. The overall site is zoned C4 (Highway Commercial) by the City of
I Pomona.
used on the investigation and Zu4iys6s outlined In the accompanying report and
I subject to the certification and limiting coanditio¢ns atizehed to this report, we
i conclude that the subject vacant property would have a unit value of$15.00 Psff of
land. Thus, the l 15,870 + sff Pomona Successor Redevelopment Agency property at
700 & 704 East Foothill Boulevard, PoMlona, CRleforunua as of February 1, 2015
would have a vaEue o;f:
$1,/38,000
ONE MLLRON SEVERN HUNDRED '11`Mllt TY IE][GHT THOUSAND DOLLARS
Redevelopment Agency City of Pomona -2- February 1, 2015
In arriving at our valuation conclusion of this property, we employed the Market Data
Approach to Land since there are no existent site or building improvements at this
location.
This self-contained appraisal report is intended to comply with the reporting requirements
set forth under Standard Rules 2-2 of the Uniform Standards of Professional Appraisal
Practice (USPAP). This report is not considered to depart from the specific guidelines of
USPAP. As such, this report describes the data, reasoning and analysis that we used in
the appraisal process to develop the appraiser's opinion of value.
Any significant changes to the site size or configuration, or any other material
information supplied to us in this analysis, as further identified herein, could affect our
valuation conclusion and would require a re-evaluation of our analysis.
Following this letter is a self-contained appraisal report which describes the subject area
and the conditions of this appraisal, identifies the subject property and its characteristics
and then specifically enumerates the methodology used in valuing the property.
We retain a copy of this report, together with worksheets, documents and other data upon
which our conclusions and opinion of value are based.
We certify that we have no past, present or contemplated future interest in this property
and that we have acted in accordance with accepted ethics and standards in our
profession.
Thank you for this opportunity to provide appraisal services.
Respectfully submitted,
O Fki ----
Principal
Y
o Apprai
President
Certified General Appraiser
CWB/drm CA# AGO10837
SUMMARY OF SALIENT FACTS AND VONC'LUSIONS
NA.M1E: City of Pomona Successor Redevelopment
Agency Property
PROPERTY ADDRESS: 700& 704 East Foothill Boulevard, Pomona
DATE OF VALUE: February 1, 201
INTERESTS APPRAISED: Fee Simple
ASSESSED OWNER/
APPRAISED OWNER: City of Pomona Successor Redevelopment
Agency
PROPERTY:
i ASSESSOR'S PARCEL NOS.: 8367-003-900 and -901
I
SITE SIZE: 155,870+ sf or 2.66 + acres (gross)
ZONE: C4(Highway Commercial); City of Pomona
EUSE TYPE: Vacant Land
HIGHEST AND BEST USE:
"As Though Vacant Land": Commercial/Office
VALUE INDICATIONS:
Cost Approach: NIA
Market Approach—Land: $1,738,000
Market Approach—Improved: NIA
Income Approach: NIA
VALUE CONCLUSION: 51,739,000
CERTIFICATION AND RESTRICTION UPON DISCLOSURE AND USE
The undersigned does hereby certify that, except as otherwise noted in this appraisal report:
1. The statements offact contained in this report are true and correct.
2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions
and limiting conditions and are my personal, impartial and unbiased professional analyses,
opinions, and conclusions.
3. 1 have no present or prospective interest in the property that is the subject of this report and 1
have no personal interest with respect to the parties involved.
4. 1 have performed no appraisal or other services regarding the property that is the subject of this
report within the three-year period immediate preceding acceptance of this assignment.
5. 1 have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
6. My engagement and the compensation received for this assignment are not contingent upon the
development or reporting of a predetermined value or direction in value that favors the cause of
the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence
of a subsequent event directly related to the intended use of this appraisal.
7. My analyses, opinions, and conclusions were developed and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
8. 1 have made a personal inspection of the property that is the subject of this report.
9. No one other than the undersigned provided significant professional assistance in the preparation
of the analyses, conclusions and opinions, concerning the real estate noted herein, as set forth in
this appraisal report.
10. The appraiser acted in an independent capacity and this appraisal assignment was not based on a
requested minimum valuation, a specific valuation or the approval of a loan.
11. The appraiser by means of education and previous appraisal experience is competent to complete
this report.
12. To the best of my knowledge and belief the statements of fact contained in this appraisal report,
upon which the analyses, opinions and conclusions expressed herein are based, are true and
correct.
13. Disclosure of the contents of this appraisal report is governed by the agreement between the
appraiser and the client for this assignment.
14. Neither all nor any part of the contents of this report(especially any conclusions as to value, the
identify of the appraiser or the firm with which he is associated) shall be disseminated to the
public through advertising media, public relations media, news media, sales media or any other
public means of communication without the prior written consent and approval of the
undersigned.
arl W.Bomanski
CA#AG Oi0837
February 1,2015