Loading...
HomeMy WebLinkAbout1995-11-14; City Council; 13384; APPROVAL OF SECOND BUDGET AMENDMENT ENCINA FT 1995-96 CAPITAL IMPROVEMENT PROGRAM AUTHORIZATION FOR LAND ACQUISITIONII 9 0 PC e 3 z I- o 2 a 6 2 3 0 o nGEpn B’LL Y OF CARLSBAD - bJ APPROVAL OF SECOND BUDGLT AMENDMENT D ENCINA FY 1995-96 CAPITAL IMPROVEMENT PROGRAM c C i kcl(c AB # iq3 s? TITLE: 1 1/;;;/”95 MTG. DEPT. RECOMMENDED ACTION: . CSD AUTHORIZATION FOR LAND ACQUISITION 45-p”ce Adopt Resolution No. approving the second budget amendment to the Encin Authority (MA) Capital Improvement Program for land acquisition, appropriating ad1 for the land acquisition and authorizing staff to execute the Purchase and Sale Agreerr of the member agencies. ITEM EXPLANATION: On July 18, 1995, the City Council approved Resolution No. 95-21 2 approving the revisc authorizing the EWA to acquire land on behalf of the Encina member agencies. The 37 acre parcel is adjacent to and immediately south of the Encina Water Pollution Cc City of Carlsbad staff have been coordinating the purchase of the land and negotiating the property owner on behalf of the member agencies. A final price has been agrc approved by the EWA and staff is ready to proceed with the execution of the Purch Ag reement . The attached land purchase analysis indicates the City’s share of the land acquisit $1,113,090. The analysis also indicates the majority of the City’s share could be funde capital funds on account with the EWA. Approval of the amendment would require $3,092 from the City which is available in the Sanitation Enterprise Fund. FISCAL IMPACT: Approval of this amendment would require the appropriation of $3,092 from the Sanitat Fund Account No. 51 1-820-61 10-2494. EXHIBITS: 1. Resolution No. 9 5’ ‘3 2. EWA Land Purchase Analysis 3. Purchase and Sale Agreement and Escrow Instructions. - to be distribut 020 1 2 3 4 5 6 7 8 9 x0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I Q Q \ 4 RESOLUTION NO. 9 5 - 3 2 0 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A SECOND BUDGET AMENDMENTTO THE ENCINA WASTEWATER AUTHORITY FY 1995-96 CAPITAL IMPROVEMENT PROGRAM, APPROPRIATION OF ADDITIONAL FUNDS, AND AUTHORIZING THE EXECUTION OF THE PURCHASE AND SALE AGREEMENT FOR THE ENCINA WATER POLLUTION CONTROL FACILITY ACQUISITION OF THE 37-ACRE PARCEL ADJACENT TO THE WHEREAS, the City of Carlsbad is a member agency to the Encina J Agreement entered into on July 13, 1961, for the acquisition, construction, ownersh and maintenance of the Encina Joint Sewer System; and WHEREAS, the Encina Agreement requires approval for budget amend1 Encina Wastewater Authority (EWA) by the Member Agencies following the recomn the Joint Advisory Committee (JAC); and WHEREAS, the Encina Wastewater Authority (EWA) and the Encina Jc Committee (JAC) have recommended the City of Carlsbad be authorized to ac1 behalf of the member agencies; and WHEREAS, the Encina Wastewater Authority (EWA) and the Joint Adviso (JAC) have approved the purchase price of the 37-acre parcel adjacent to and immi of the Encina Water Pollution Control Facility. NOW, THEREFORE, BE IT RESOLVED by the City Council of the CQ California as follows: 1. The above recitations are true and correct. 2. Funds are available in the Sanitation Enterprise Fund Account Number 2494. 3. The City's share of $1,113,090 for the purchase of the parcel is availabl excess capital funds on account with the EWA plus the additional $3,092 a this action. Q 4. The City Manager shall be authorized to execute the Purchase and Salt for the purchase of the 37-acre parcel adjacent to and immediately south c Water Pollution Control Facilrty on behalf of the EWA member agencies. 5. This resolution shall be forwarded to the EWA immediately upon its exe PASSED, APPROVED AND ADOPTED by the City Council of the City of Cl 14th day of NOVEMBER , 1995, by the following AYES: Council Members Lewis, Nygaard, Kulchin, Hall NOES: None ABSENT: Council Member Finnila City Clerk t City Clerk i EX I e 0 c ENCINA WASTEW&TER AUTHORkN !.and PutChaS@ AndySlS Octaber 25.19% Basis of Allocatisn VVi Cans~aa e VallecR~s Lemacfia Emmm TB XISw~ cos una t 23,010,355 26.417,?19 B.6BB.770 21 S1.5n 21,656,0531 5,153,638 106.480.1 Land 31,477 43,m6 14,151 35,107 35,274 a3 m Total Unit I wd land 23,047.832 26.460745 e,m,szg 21 sme 21.683331 5.162.033 106,653,S Allomon Pemrtt 21.61 46 z4.ej % 8.1 6% 2024% 20.34% 484% 1oo.a llkat I weighted average) Alternative Land Acqwsnrm Costs (Ailacaton twsed upon Percent ill)bue) Altsmme 1 S9.520 9 113090 366.090 908.060 912.550 277,140 4W Excess Ca~$aal - Funds" 9-3o-Qs PPOWd wsg Carlsbaa 6- Vallecrtas Ceucawa- Emnitas TZ CMnpbSc PmJe ResrdUl 981,679 1 006.333 387.970 789 11 34 931 335 202542 427 ~ess RelacaPon Asstame SDGE (24,852) rn.532) (9,384) (23.276) (23,391) (S 566) (17 phase IV ** 29.838 65.677 35,934 65.942 74.nt e.wo xi OulMi - Unttd m!z@zL 66,520 13.2w 49 401 55.1 29 18033 ?J TOM 1 ,Q47,023 7 709,996 427 767 884.280 7 037.844 223.~9 47, Dehaency at 94.486M 0 13,092) D (23.7801 0 O( AequiStan cast .I N 34/95 unaudrtrsd amounts ptusmree moms merest TM~ is a pcE.$Ibil@ ~t a mall paman being ndewi f08p diso;~UpeB eo=& oi Phase IV AvBntda Enanas w~derrp~g .I" FJ 25-Qct--95..C.\723W\MISC\LANDPUR2.WK3 pg 1 1 i @ q PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS Seller: Sammis Carlsbad Associates, A California General Partnership Buyer: The City of Carlsbad A Municipal Corporation First American Title Insurance Company Escrow No. 1 124540-LG Escrow: AGG95026.F4 November 13,1995 1 1 e 0 TABLE OF CONTENTS ARTICLE 1 Definitions ............................................. 1.1 City ............................................. 1.2 Close of Escrow, Closing Date. ........................ 1.3 EffectiveDate.. .................................... 1.4 Environmental Laws. ................................ 1.5 Escrow Agent. ..................................... 1.6 Grant Deed. ....................................... 1.7 Hazardous Materials. ................................ 1.8 Permitted Exceptions ................................ 1.9 PR ............................................... 1.10 Property .......................................... 1.1 1 Purchase Price. .................................... 1.12 Title Insurer. ....................................... ARTICLE2 .................................................. 2.1 Purchase Agreement. ................................ 2.2 Purchase Price. .................................... ARTICLE3 .................................................. 3.1 Opening of Escrow. ................................. 3.2 Escrow Instructions. ................................. 3.3 Close of Escrow. ............. L ..................... 3.4 Deliveries to Escrow. ................................ 3.5 Prorations. ........................................ 3.6 Escrow Charges. ................................... 3.7 Recordation of Documents. ........................... 3.8 Distribution of Funds. ................................ 3.9 Conformed Copies. ................................. 3.10 Tax Reporting. ..................................... 4.1 Title Report. ....................................... ARTlCLE4 .................................................. 4.2 Entitlements. ...................................... 4.3 Approval ......................................... 4.5 Title Insurance. .................................... 4.7 Grant Deed. ....................................... 4.6 Extended Title Coverage. ............................. AGG95026.F4 November 13,1995 1 I w e ARTICLE5 ................................................... 5.1 Condition of the Property .............................. 5.2 Buyer’s Representations and Warranties. .................. 5.3 Seller’s Representations and Warranties. .................. 5.4 Real Estate Commissions. ............................. 5.5 Survival of Warranties and Obligations. ................... 5.6 Limitation on Seller’s Liability ......................... , ARTICLE6 .................................................. 6.1 Buyer’s Access to Property. ........................... 6.2 Damage or Destruction. .............................. 6.3 Condemnation. . , . , . . , , . , , , . , , . , , . , , . . , . , , , , . . , , , . . , 6.4 Possession. ....................................... ARTICLE7 .................................................. 7.1 Assignment. ....................................... 7.2 Attorneys’ Fees. .................................... 7.3 Computation of Time Periods. ......................... 7.4 Conflict of Interest. ................................. 7.5 Construction. ...................................... 7.6 Counterparts. ...................................... 7.7 Entire Agreement. .................................. 7.8 Exhibits. 7.9 Further Assurances. ................................. 7.10 Gender, Number. ................................... 7.1 1 Governing Law. .................................... 7.12 Modification, Waiver. ................................ 7.13 Mutual Covenants. .................................. 7.14 No Other Inducement. ............................... 7.15 Notice. 7.16 Severability. ....................................... 7.17 Successors. ....................................... 7.18 Time. .................................... ........ 7.19 1031 Exchange ..................................... CONSENT OF ESCROW AGENT ................................. .......................................... ........................................... AGG95026.F4 November 13, 1995 > 4 0 0 PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement"), effective as of , 1995 ("Effective Date''), by a between SAMMIS CARLSBAD ASSOCIATES a California General Partnership ("Sel and the CITY OF CARLSBAD, a Municipal Corporation ("Buyer"), in trust for the member agencies of the Encina Wastewater Authority (City of Carlsbad, City of Encinitas, City of Vista, Buena Sanitation District, keucadia Water District, and Vallecitos Water District) constitutes an agreement to purchase and sell real prop€ and escrow instructions directed to the Escrow Agent identified herein. ARTICLE 1 Definitions For purposes of this Agreement, the following defined terms shall be indicated bb initial capital letters and shall have the meanings set forth below: 1.1 1.2 1.3 City The City of Carlsbad, California Close of Escrow, Closing Date. As defined in Section 3.3(a). Effective Date. The date first set forth above, which shall be the date this Agreement has been executed (a) by Buyer, pursuant to a resolution of th City Council authorizing such execution, and (b) by Seller. Buyer shall exe this Agreement within three (3) business days after adoption of the City Council's resolution of approval. Environmental Laws. Any law or regulation applicable to the physical condition of the Property, or the presence of any substance thereon, inch without limitation, the Comprehensive Environmental Response, Compensi and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), t! Resources Conservation and Recovery Act of 1976 (42 U.S.C. Sections 65 seq.) the Clean Water Act (33 U.S.C. Sections 466, et seq.), the Safe Drinkin Water Act (1 4 U.S.C. Sections 1401-1450), the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801, et seq.), the Toxic Substance Control Act (1 5 U.S.C. Sections 2601-2629), the California Hazardous Was Control Law (California Health and Safety Code Sections 251 00-25600), ar the Porter-Cologne Water Quality Control Act (California Health and Safety Code Sections 13000, et seq.), as any of the foregoing may be amended f time to time, and all regulations and publications implementing or promulc pursuant to the foregoing. 1.4 AGG95026.F4 November 13,1995 1 1 1 0 0 1.5 Escrow Agent. First American Title Insurance Company, Att: Lynn Graham, 41 1 Ivy Street, San Diego, California 92101, Box 808, San Diego, California 921 12, Telephone (800) 451 -1 776. Grant Deed. The Grant Deed conveying the Property to Buyer in the form c Exhibit "A" attached hereto, executed and acknowledged by Seller and Buy1 Hazardous Materials. Hazardous Materials shall include, but are not limite substances which are flammable, explosive, corrosive, radioactive, or toxic, any substances defined as hazardous substances, hazardous materials, to: substances or hazardous wastes in any of the Environmental Laws, and all amendments to the Environmental Laws. Hazardous Materials shall also include those asbestos-containing materials defined and described in Environmental Protection Agency Report No. 56/5-85-024 (June 1985) or ai related or successor report other applicable government regulations definir describing such materials. Permitted Exceptions. As defined in Section 4.3. PR. The preliminary title report identified in Section 4.1. Property. That certain real property described as that portion of Section : Township 12 South, Range 4 West, San Bernardino Base and Meridian, ir City of Carlsbad, County of San Diego, State of California, according to th official plat thereof and that portion of La Costa Downs Unit No. 1, in the r Carlsbad, County of San Diego, State of California, according to map the1 No. 2013, filed in the office of the County Recorder of San Diego County, 26, 1927. More fully described in Exhibit A. Purchase Price. The aggregate consideration to be paid by Buyer to Se the purchase of the Property, as set forth in Section 2.2. 1.12 Title Insurer. First American Title Insurance Company, Attn: Skip Santy, Officer, 41 1 Ivy Street, San Diego, California 921 12. Telephone (800) 451- ARTICLE 2 1.6 1 .? 1.8 1.9 1.10 1.1 1 Purchase Agreement; Purchase Price 2.1 Purchase Agreement. Seller agrees to sell the Property to Buyer and B agrees to purchase the Property from Seller, on the terms and condition forth herein. Purchase Price. Buyer agrees to pay to Seller the amount of Four Milk 2.2 AGG95026.F4 November 13, 1995 2 1 0 0 Hundred Fifty-Six Thousand Four Hundred Fifty Dollars ($4,456,450). Deposit. Buyer shall deposit the sum of One Hundred Thousand ($lOO,OOC Dollars into escrow within three (3) business days of the opening of escrow be applied towards the purchase price upon close of escrow. The balance the Purchase Price shall be payable in cash and shall be delivered to Escr Agent, in the form of a cashier's or certified check drawn on a California ba payable to Escrow Agent or funds by federal wire, a sufficient time in advar of the scheduled closing date to permit disbursement of such funds on the Closing Date under applicable law and Escrow Agent's standard practice. ARTICLE 3 2.3 Escrow 3.1 Opening of Escrow. An escrow ("Escrow") shall be opened with Escrow A First American Title Insurance Company, to consummate the sale of the Property pursuant to this Agreement, identified as Escrow No.112540-LG. Within three (3) business days after the Effective Date, Seller and Buyer sh cause a fully executed copy of this Agreement to be deposited with Escroi Agent. The date Escrow Agent has received an executed copy of this Agreement is referred to herein as the "Opening of Escrow." Escrow Agent acknowledge the Opening of Escrow and its agreement to act as the Escrc Agent hereunder by: (a) executing the Consent of Escrow Agent attached hereto; and (b) promptly delivering a copy of the executed Consent to Sell and Buyer. Escrow Instructions. This Agreement shall constitute initial escrow instruc to Escrow Agent. Escrow Agent's general provisions are attached hereto a Exhibit "B" and made a part hereof, to the extent they are consistent with tt provisions of this Agreement. The parties shall execute any additional instructions reasonably required by Escrow Agent to consummate the transaction provided for herein; provided, however, such additional Escrow Instructions shall not modify the provisions of this Agreement, unless such instructions (a) state the modification in full and (b) are signed by both pa 3.2 3.3 Close of Escrow. (a) Closina Date. "Close of Escrow" or "Closing Date" means the date tl Grant Deed is recorded in the Official Records of San Diego Count) California and the Purchase Price is paid to Seller. The Close of Esc shall occur on December 15, 1995 or within ten (10) days of final bi approval by all member agencies of the Encina Wastewater Author? that occurs sooner than December 15, 1995. AGG95026.F4 November 13, 1995 3 1 0 0 (b) Material Term. Buyer will endeavor to make a good faith effort to expedite member agency approvals. If escrow does not close on th Closing Date, and the Closing Date is not extended by mutual instructions of the parties, the closing shall occur as soon after the Closing Date as it is in a condition to close unless a party not then ii default under this Contract notifies the other party and Escrow Ageni writing that unless the closing occurs within five business days follov the date of the notice, the escrow and this Contract shall be deemec terminated. If the closing has not occurred during the five day perio this Contract and escrow shall be deemed terminated and Escrow A shall return all monies and documents to the party depositing them. Deliveries to Escrow. Prior to the Closing Date, each party shall timely del to Escrow all funds and documents required to complete the Closing pursu to this Agreement, including, but not limited to, prorated amounts and othel payments required under Sections 3.5 and 3.6. Failure to make any such delivery shall constitute a material default hereunder. Prorations. Escrow Agent shall prorate all real property taxes and installme of assessments payable prior to the Closing Date (collectively, "taxes") whic are a lien upon the Property, based on the most recent official information available from the appropriate City or County office; provided, however, tha Seller shall pay all penalties and interest resulting from late payment of sucl taxes and assessments. All prorations shall be made to the Closing Date bi upon a thirty (30) day month. If actual tax bills for the Property for the currei tax year are not available as of the Close of Escrow, Buyer and Seller shall reprorate said taxes outside of Escrow following Close of Escrow upon rece of said tax bills by either Buyer or Seller. It shall be the responsibility of the Seller to obtain a refund of any taxes prepaid by Seller which are refundablc upon close of escrow due to the tax exempt status of Buyer. 3.4 3.5 3.6 Escrow Charges. (a) Seller's Payments. Seller shall pay: (1) one-half of Escrow Agent's fec cancellation charge; (2) the cost of a standard ALTA owner's title insurance policy and preliminary title report; (3) the documentary trar tax which Escrow Agent determines is required by law; and (4) other charges and expenses customarily charged by Escrow Agent to sell€ Buver's Pavments. Buyer shall pay: (1) one-half of Escrow Agent's fec cancellation charge; (2) the additional cost for extended ALTA title insurance coverage; (3) the cost of recording the Grant Deed; and (4: other charges and expenses customarily charged by Escrow Agent tc buyers. (b) AGG95026.F4 November 13, 1995 4 I 1 0 0 (c) Default. Notwithstanding the foregoing, in the event of a default by Bi or Seller hereunder, all cancellation and other escrow charges shall b paid by the defaulting party. 3.7 Recordation of Documents. Escrow Agent is authorized to record any instrument delivered through Escrow if necessary or proper for issuance of 1 Title Policy described in Section 4.3. At Close of Escrow, Escrow Agent sha submit the Grant Deed to the County Recorder for recordation and instruct t County Recorder to return the original Grant Deed to Buyer and a conforme copy of the Grant Deed to Seller. At Seller’s or Buyer’s request, the documentary transfer tax shall be set forth in a statement separate from the Grant Deed and shall not be reflected in any recorded documents. Distribution of Funds. Upon Close of Escrow, Escrow Agent shall distribut pursuant to unilateral instructions provided to Escrow Agent by the recipien (a) to Seller, or order, the Purchase Price, adjusted for prorations, charges i other credits and debits provided for herein; and (b) to Buyer or order, any excess funds delivered by Buyer to Escrow Agent. Conformed Copies. Upon Close of Escrow, Escrow Agent shall deliver to Seller and Buyer: (a) an accounting and final closing statement for this transaction; and (b) copies of all recorded documents, conformed to show recording date and file number. 3.10 Tax Reporting. Any returns, statements or reports required to be filed undc Section 6045(e) of the Internal Revenue Code of 1986 and Sections 18805 26131 of the California Revenue and Taxation Code (and any similar report required by federal, state or local law) relating to the Property shall be filed Escrow Agent. In no event shall this Agreement be construed so as to reqL that such returns, reports or statements be filed by Buyer, Buyer’s counsel, Seller or Seller’s counsel. Within five (5) days after Escrow Agent’s receipt < written request from Seller and/or Buyer, Escrow Agent shall provide evider to Seller and/or Buyer of its compliance with the provisions of this Section : 3.8 3.9 ARTICLE 4 Conditions Precedent 4.1 Title Report. (a) Approval: Buyer’s written approval of a preliminary title report to bc issued by First American Title Insurance Company, as well as the underlying documents referred to therein, within ten (10) days of the receipt, shall be a condition precedent to consummation of this sale AGG95026.F4 November 13, 1995 5 1 0 0 4.2 Entitlements. Seller shall provide Buyer with copies of all governmental permits, approvals other entitlements issued in connection with the subdivision, development or improvement of the Property and the terms and conditions thereof, excludinc those issued by the City of Carlsbad, for approval by Buyer. Approval . If Buyer shall fail to approve or disapprove the matters referred tc Paragraph 4.1 and 4.2 hereof, in writing, ten (10) days after receipt thereof, it shall be conclusively presumed that Buyer has approved said matters. If Bu shall disapprove or conditionally approve the PR, or any part thereof, or any the items referred to in Paragraphs 4.1 or 4.2 hereof, then for a period of ten (10) days after written notice by Buyer to Seller of said disapproval or conditional approval, Seller shall have the right to cure said disapproval or conditionally approved items, prior to the close of escrow, or elect not to CUI said disapproved items. Notice of Seller's written election shall be given to Buyer. If Seller shall elect not to cure all of said items, then for a period of tf days after said written notice to Buyer, Buyer shall have the right to either accept title to the Property subject to said items or to terminate this transact Buyer shall give written notice to Seller of Buyer's election within ten days ai the expiration of the time in which Seller shall have been required to responl to Buyer's notice of disapproval or conditional approval. If Buyer shall fail tc give Seller such written notice of Buyer's election within the time specified, i shall be conclusively presumed that Buyer has elected to terminate this transaction. If Buyer elects to terminate this transaction, thereafter neither Buyer nor Seller shall have any further liability hereunder, (except for any liabilities of Buyer pursuant to Section 6.1) and Buyer shall be entitled to tht prompt return of all funds deposited by Buyer with Escrow Holder, less onb share of escrow cancellation fees and costs and title company charges Board Approval. Consummation of this sale is contingent upon final budgt approval by all member agencies of the Encina Wastewater Authority. If thi condition is not satisfied as to each and every member agency, Buyer may terminate this transaction by giving Seller written notice and Buyer shall be entitled to the prompt return of all funds deposited by Buyer with Escrow Holder, less only its share of escrow cancellation fees and costs and title com pany charges. Title Insurance. As of Close of Escrow, First American Title Insurance Company shall issue, or be committed to issue, at Seller's sole cost, a standard form ALTA owner's title insurance policy ("Title Policy"), insuring Buyer's title to the Property in the amount of the Purchase Price. (a) 4.3 4.4 4.5 Buyer and Seller agree that monetary encumbrances are disapprovt AGG95026.F4 November 13,1995 6 I m 0 and that Seller shall have the obligation, at Seller's expense, to satis and remove monetary encumbrances at or before closing date. Seller warrants that, except as disclosed in the Preliminary Title Repc delivered to Buyer, to Seller's "Actual Knowledge", as defined below, property is not within any special assessment districts. At Closing, Seller agrees to convey good and marketable title by grz deed free and clear of all liens and encumbrances of record or know Seller other than current property taxes not yet due and exceptions contained in the PR not objected to by Buyer ("Permitted Exceptions Extended Title Coverage. Buyer has elected to obtain ALTA extended title insurance coverage, subject to the following conditions: Buyer shall, in a timely manner, (1) order any required survey, (2) deliver tl- survey to the Title Insurer for review, (3) order an inspection of the Proper& the Title Insurer, (4) order the Title Insurer to update the PR if necessary to identify additional exceptions (if any) resulting from Title Insurer's review of survey and inspection, and (5) review and approve any such additional exceptions prior to the Closing Date described in Section 3.3. Grant Deed. Prior to Close of Escrow, Seller shall execute, acknowledge a deliver the Grant Deed to Escrow. (b) (c) 4.6 4.7 ARTICLE 5 Representations, Warranties 5.1 Condition of the Property (a) Buver's Due Diliaence Review. Buyer acknowledges that, prior to thc Effective Date, Buyer has reviewed and approved the following aspe sf the Property, after such examination, inspection, investigation and review as Buyer considered it appropriate to undertake, at Buyer's si expense. (1) All applicable zoning, subdivision, land use, environmental, building and other governmental laws, ordinances, rules, regulations and requirements applicable to the Property. The physical and environmental conditions of the Property, including hydrology, soils, geotechnical and hazardous mater conditions; and (2) AGGQ5026.F4 November 13,1995 7 f I 0 e (3) All matters relating to the condition, value, fitness, or suitability for its intended use. (b) Disclaimers. Except as expressly provided in Section 5.3: (1) Seller makes no representation or warranty as to any operative proposed governmental laws, regulations and requirements (including but not limited to zoning, environmental and land us1 laws, regulations and requirements) to which the Property may subject. Buyer acknowledges that the purchase of the Property will be ( the basis of Buyer's own investigation of: (i) the physical conditions of the Property, including the soils, subsurface and environmental conditions thereof; (ii) the operative or proposec governmental laws, regulations and requirements affecting or applicable to the Property and the terms and conditions of all applicable governmental permits and approvals; and (iii) the economic value, marketability, merchantability, feasibility, suitability or use of the Property. Except for matters arising from or attributable to a material fin1 of which Seller has Actual Knowledge and not disclosed to Bt and subject to satisfaction or waiver of the conditions precede to Close of Escrow, Buyer will acquire the Property in an "AS condition. Buyer assumes the risk that adverse physical conditions or the applicability and effect of such government2 laws, regulations and requirements may not have been reveal by Buyer's investigation. As used herein, "material" shall meal substantive findings that would influence or tend to influence Buyer's decision to acquire the Property. Seller shall have no obligation to correct any conditions or al defects discovered by Buyer during the course of its investig or thereafter. If Buyer discovers, subsequent to the Effective hereof but prior to Close of Escrow, a material defect in the Property which could not have been discovered by a reason and diligent investigation undertaken by Buyer prior to the Effective Date hereof, then Buyer shall have the right to term this Agreement and the Escrow by delivering written notice 1 Seller and Escrow Agent, unless Seller agrees in writing to c such default. In the event of such termination, neither party : have any further rights or obligations hereunder (except for i liabilities of Buyer pursuant to Section 6.1). (2) (3) (4) AGG9502CF4 November 13, 1995 8 l 0 e (c) Hazardous Materials. If Buyer should discover during its investigation 4 the Property any Hazardous Material or other environmental condition subject to legal requirements for corrective or remedial action, Buyer shall, within a reasonable time, notify Seller in writing of the same. If such discovery is made after the Close of Escrow, Seller shall have nr liability to Buyer arising out of such discovery unless Buyer can estab that Seller had Actual Knowledge that Hazardous Material was preser on the Property prior to the Close of Escrow, and that Seller failed to disclose the existence of such Hazardous Material to Buyer. Acknowledaements The term "Actual Knowledge" of Seller, or similai phrases as used in this Agreement, means the actual present knowle of Joseph Sweeney, Investment Manager of Developmental Properti# Account and William J. Thormahlen, General Partner of Avenida Enci Associates, without any duty of investigation or inquiry of any kind 01 nature whatsoever other than to obtain: (i) the Preliminary Site Assessment dated March 21 , 1994, prepared by GeoCon Environmc Consultants, Inc. ("GeoCon"), (ii) the Limited Soils Sampling Report dated May 9, 1995 prepared by GeoCon, and (iii) the Risk Assessm Report dated April 21. 1995 prepared by GeoCon (collectively, the "Environmental Reports"). Seller acknowledges Actual Knowledge of above referenced reports and Buyer acknowledges receipt of above referenced reports. Buyer's Representations and Warranties. Buyer agrees, represents and warrants, as of the date of execution of this Agreement and as of Close 01 Escrow, as follows: (a) (d) 5.2 Buyer is a municipal corporation, duly formed, existing and in gooc standing under the laws of the State of California; Buyer has full legal right, power and authority to execute and fully perform its obligations under this Agreement pursuant to its goverr instruments and state and local laws, with prior final budget appro' all member agencies of the Encina Wastewater Authority. Buyer acknowledges that one of the general partners of Seller is lu England Mutual Life Insurance Company, a Massachusetts corpor on behalf of its Developmental Properties Account ("DPA'), the as: which have been deemed to be "plan assets", as that term is defir under ERISA. Buyer hereby represents and warrants for the benefi Seller that Buyer is familiar with ERISA and that Buyer is not a "pa interest" as defined in ERISA, in respect to any relevant plan. Buy1 indemnify Seller against all claims, demands, liabilities, costs and (b) (c) AGG95026.F4 November 13.1995 9 1 0 0 expenses incurred by Seller if this transaction is determined to be a "prohibited transaction" under ERISA as a result of Buyer being a part in interest in respect to any plan. 5.3 Seller's Representations and Warranties. Seller agrees, represents and warrants, as of the date of execution of this Agreement and as of Close of Escrow, as follows: (a) Authoritv. Seller is a California General Partnership duly formed, existi and in good standing under the laws of the State of California; Seller full legal right, power and authority to execute and fully perform its obligations under this Agreement pursuant to its governing instrumer without the need for any further action; and the persons executing th Agreement and other documents required hereunder on behalf of Se are the duly designated agents of Seller and are authorized to do so Non-Foreign Affidavit- Seller is not a foreign person and is a United States person as defined in Section 7701 (a)(30) of the Internal Revet Code, as amended ("Code"). Prior to Close of Escrow, Seller shall deliver to Escrow (with a copy to Buyer) an affidavit, executed and sworn to under penalty of perjury, substantially in the form attached hereto as Exhibit "C". Seller is a General Partnership qualified to do business and maintains an office in the State of California. Seller will instruct Escrow Agent to disburse any proceeds due to Seller upon Close of Escrow to an address outside the boundaries of the Unitec' States, and will not use a financial intermediary as defined in Califor Revenue and Taxation Code Section 18805(d) for the receipt of proceeds from this transaction. Hazardous Materials. Seller has no Actual Knowledge] except as otherwise disclosed to Buyer in writing, of any release of any Hazar Materials onto the Property. To Seller's Actual Knowledge, no sumr citation, directive, order or other communication has been issued tc Seller arising out of or relating to the presence of Hazardous Materi on the Property. Bankruptcy. Seller has not: (1) made a general assignment for the benefit of creditors; (2) filed any voluntary petition in bankruptcy or subject to the filing of an involuntary petition by Seller's creditors; ' had a receiver appointed to take possession of all or substantially Seller's assets; (4) suffered the attachment or other judicial seizure or substantially all of Seller's assets; (5) admitted in writing its inat pay its debts as they come due; or (6) made an offer of settlemen extension or composition to its creditors generally. (b) (c) (d) AGG95026.F4 November 13, 1995 10 a e 5.4 Real Estate Commissions. Seller agrees to pay any and all commissions dl to brokers that have been employed by Seller or are entitled to a commissio or compensation in connection with this transaction as a result of the action agreement of the Seller. Seller agrees to indemnify, hold harmless, protect a defend the Buyer from and against any obligation or liability to pay any suck commission or compensation arising from the act or agreement of the Sellei Buyer is not represented by a broker in this transaction. Survival of Warranties and Obligations. The representations and warrantie given by Buyer and Seller in this Article 5, and all obligations under this Agreement to be performed after Close of Escrow, shall survive the Close o Escrow and delivery of the Grant Deed to Buyer. Limitation on Seller’s Liability. Buyer agrees that any recovery against Sel for the breach for Seller’s obligations hereunder shall be strictly limited to tt Purchase Price received by Seller from the sale of the Property, and such recovery shall further be limited to Buyer’s actual damages. In no event shc Buyer be entitled to seek or obtain any other damages of any kind, includir without limitation, consequential, indirect, or punitive damages. Subject to i limitations set forth in this Section 5.6, Buyer shall be entitled to seek or attempt to obtain any recovery or judgment against the Seller’s assets or against any of the assets of Seller’s partners, provided, that, to the extent t New England Mutual Life Insurance Company, a partner of Seller, shall hai any liability under this Agreement, such liability shall be satisfied solely fro1 the assets and properties of its Development Properties Account, a separa investment account established and maintained by New England Mutual L Insurance Company under applicable law, and in no event shall recourse I had to any assets or properties held by New England Mutual Life lnsuranc Company in its general investment or in any of its other separate investme accounts, or to any officers, directors, policyholders or employees of New England Mutual Life Insurance Company or its affiliates. 5.5 5.6 ARTICLE 6 Additional 0 bl ig at i ons 6.1 Buyer’s Access to Property. (a) Terms of Entrv. Seller has allowed prior to the Effective Date, and 1 shall continue to allow between the Effective Date and the Close 0’ Escrow or earlier termination of this Agreement, reasonable acces! the Property by Buyer (and its employees, agents, representatives contractors) , during normal business hours, upon reasonable notic Seller, in order to inspect, conduct reasonable soils tests, environr AGG95026.F4 November 13, I995 11 0 e assessment work, engineering studies and surveys and other investigation required by Buyer, at Buyer’s sole cost. In connection wi any such entry, Buyer: (1) shall perform all work in a safe manner; (2) shall not permit any hazardous condition to remain on the Property; ( shall repair any damage or disturbance to the Property; (4) shall keer the Property free and clear of all mechanics’ or materialmen’s liens arising out of Buyer’s activities; and (5) shall comply with all Environmental Laws, all other governmental laws, ordinances and requirements, and the conditions of all permits applicable to such wo Invasive Testing Notwithstanding the foregoing, if Buyer wishes to engage in a Phase II environmental study or any other environmental other testing or sampling of any kind with respect to soils or groundwater or other studies which would require test boring of or 01 intrusions into the Property or which testing would otherwise damage disturb any portion of the Property, Buyer shall obtain Seller’s prior consent thereto, which consent may be withheld in Seller’s sole discretion. To the extent Seller approves any such testing, Buyer shz be responsible for, and shall dispose of, all such test samples in accordance with applicable law at no cost or liability to Seller. (See attached letter submitted by Seller to Buyer dated November 1 , 1995 and the reply submitted by Buyer to Seller dated November 2, 1995 Indemnitv. Buyer shall indemnify protect, hold harmless and defend Seller (and its partners, officers, directors, shareholders, employees, agents, contractors, successors and assigns) and Seller’s property f and against any and all liabilities, liens, claims, damages, costs, expenses, suits or judgments (including attorneys’ fees and court cc for labor or services performed or materials furnished to or for Buye for personal injury, death or property damage, arising out of entry u the Property, or any adjacent land owned by any affiliate of Seller, I: Buyer or its employees, agents, representatives or contractors, or ai breach of the provisions of this Section 6.1 by Buyer. (b) (c) 6.2 Damage or Destruction. If, prior to the Closing Date any part of the Prop damaged or destroyed by fire or other casualty, Seller shall promptly give notice thereof to Buyer, If such casualty materially, adversely affects the vt of the Property or its suitability for Buyer’s intended purpose, as reasonab determined by Buyer, Buyer may elect, by delivering written notice to Sell( within ten (10) days after receipt of Seller’s notice, to terminate this Agree1 and the Escrow, unless Seller agrees, within five (5) days after Seller’s rec of such termination notice, to cure the damage on or before the Closing 1 In the event of such termination, neither party shall have any further rights obligations hereunder (except for any liabilities of Buyer pursuant to Sectil AGG95026.F4 November 13, 1995 12 I 0 a 6.1). If Buyer does not deliver written notice of termination within said 1 0-da period, then the parties shall continue performance under this Agreement a the Escrow, without modification of any of its terms and without any reducti in the Purchase Price. Seller shall have no obligation to repair or restore thc Property and no liabilities or obligations to Buyer, and Buyer shall have no claims for damages or other remedies against Seller, as a result of such damage or destruction of the Property. Condemnation. If, prior to the Closing Date, Seller receives actual notice tt- condemnation or eminent domain action is filed against the Property or an) part thereof (or that a taking is pending or contemplated), but excluding ar condemnation or taking by Buyer, Seller shall promptly give notice thereof Buyer. If such taking is of all or a significant portion of the Property, Buyer elect, by delivering written notice to Seller within ten (10) days after receipt Seller's notice, to terminate this Agreement and the Escrow. In the event ol such termination, neither party shall have any further rights or obligations hereunder (except for any liabilities of Buyer pursuant to Section 6.1). For purposes of this Section 6.4, the taking of a "significant portion" means a ti such that the value of the Property is materially impaired or reduced. If Bu) does not deliver written notice of termination within said IO-day period, or i other than a significant portion of the Property as described above is taker then: (a) the parties shall continue performance under this Agreement and Escrow, without modification of any of its terms and without any reduction the Purchase Price; and (b) Seller shall assign and deliver to Buyer, subjec and effective upon the Closing Date, all of Seller's interest in the award for such taking. Buyer shall have no other remedies against Seller as a result such condemnation except as set forth in this Section. Possession. Possession of the Property shall be delivered by Seller to Bu on the Closing Date after recordation of the Grant Deed. All risk of loss an' damage to the Property from whatever source shall be the sole responsibi Seller prior to Close of Escrow. 6.3 6.4 ARTICLE 7 General Provisions 7.1 Assignment. (a) E~J Buver. Prior to the Close of Escrow, Buyer may assign its rights delegate its duties hereunder to the Encina Wastewater Authority or of its member agencies with the prior written consent of Seller, whic consent may not be unreasonably withheld. Any permitted assignef shall specifically assume all obligations, representations and warrar AGG95026.F4 November 13, 1995 13 0 e of Buyer under this Agreement and under any additional escrow instructions executed pursuant hereto, shall be bound by all approval: previously given (or deemed given) by Buyer hereunder, and shall provide a warranty of authority comparable to Section 5.2. Subject to foregoing, the terms, covenants and conditions herein contained shal be binding upon and inure to the benefit of the successors and assig of Seller and Buyer. 7.2 Attorneys’ Fees. If either party commences legal proceedings for any relief against the other party arising out of this Agreement, the losing party shall F the prevailing party’s legal costs and expenses, including, but not limited to reasonable attorneys’ fees and costs as determined by the court. Computation of Time Periods. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and state or national holida unless the period of time specifies business days. The term “business days means days other than Saturdays, Sundays and state or national holidays. the date or last date to pelform any act or give any notice or approval shall on a Saturday, Sunday or state or national holiday such act or notice shall deemed to have been timely performed or given if performed or given on tt next business day. Conflict of Interest. Conflicts of interest relating to this Agreement are stric prohibited. Except as otherwise expressly provided herein, neither Buyer nc any director, employee or agent of Buyer shall give to or receive from any director, employee or agent of Seller any gift, entertainment or other favor ( significant value, or any commission, fee or rebate. Likewise, neither Buyer any director, employee or agent of Buyer shall enter into any business relationship with any director, employee or agent of Seller (or of any affiliat Seller), unless such person is acting for and on behalf of Seller, without pr written notification thereof to Seller. Construction. The captions and paragraph headings used in this Agreemc are inserted for convenience of reference only and are not intended to defi limit or affect the construction or interpretation of any term or provision hei This Agreement shall not be construed as if it had been prepared by only Buyer or Seller, but rather as if both Buyer and Seller had prepared the sa Counterparts. This Agreement or any escrow instructions pursuant to this Agreement may be executed in multiple copies, each of which shall be deemed an original, but all of which shall constitute one Agreement after ( party has signed such a counterpart. Entire Agreement. This Agreement, together with all exhibits attached he 7.3 7.4 7.5 7.6 7.7 AGG95026.F4 November 13,1995 14 e e and other agreements expressly referred to herein, constitutes the entire agreement between the parties with respect to the purchase and sale of the Property. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of either pa shall be of any effect unless it is in writing and executed by the party to be bound thereby. This Agreement supersedes the offer to purchase submittec Buyer to Seller dated September 1, 1995 and the counteroffer submitted by Seller to Buyer dated September 12, 1995. Exhibits. All exhibits referred to herein are attached hereto and incorporate( herein by reference. Further Assurances. The parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement E the intentions of the parties. 7.10 Gender, Number. As used herein, the singular shall include the plural and masculine shall include the feminine, wherever the context so requires. Governing Law. This Agreement shall be governed, interpreted, construed enforced in accordance with the laws of the State of California. 7.1 2 Modification, Waiver. No modification, waiver, amendment or discharge c Agreement shall be valid unless the same is in writing and signed by both Buyer and Seller. The escrow instructions shall be considered a part of thi! Agreement, and no provision in said escrow instructions shall supersede c contradict the provisions of this Agreement, unless the parties agree in wri, to such change. The exercise of any remedy provided by the provisions 01 Agreement or at law or in equity shall not exclude any other remedy, unle: is expressly excluded. 7.13 Mutual Covenants. In consideration of the mutual promises of the parties hereto, and of the execution of this Agreement by the parties, each party hereby agrees in good faith to utilize commercially reasonable efforts in connection with the performance of all obligations and satisfaction of conditions hereunder, and in connection with the taking of any and all act necessary with respect to any investigation, review, or other procedure re( in order to enable such party to grant or withhold its consent or approval provided for herein, it being the intention of each party that such covenan good faith and utilization of commercially reasonable efforts shall be deen sufficient and valid consideration for the promises of each party hereunde 7.8 7.9 7.1 1 AGG9502%.F4 November 13, 1995 15 e 0 Absent an express statement to the contrary, wherever any consent or apprl of a party is required hereunder, such party shall not unreasonably withhold delay such consent or approval. 7.14 No Other Inducement. The making, execution and delivery of this Agreemf by the parties hereto has been induced by no representations, statements, warranties or agreements other than those expressed herein. 7.15 Notice. Notice to either party shall be in writing and either personally delivc or sent by an overnight courier service such as Airborne, Federal Express c Purolator, or by first-class mail, registered or certified mail, postage prepaid return receipt requested, addressed to the party to be notified at the addre! specified herein, Any such notice shall be deemed received on the date of receipt if personally delivered or sent by overnight courier to the party (or s party’s authorized representative) or three (3) business days after deposit ir U.S. Mail, as the case may be. SELLER: Sammis Carlsbad Associates, a California General Partnership Attention: Joe Sweeney 399 Boylston Street Boston, Massachusetts 021 16 With a copy to: Bill Thormahlen 18802 Bardeen Avenue Irvine, CA 92714 Allen, Matkins, Gamble & Mallory Attorneys at Law Orange County Office Attention: Richard E. Stineharl 18400 Von Karman, Fourth Floor Irvine, CA 9271 5-1 597 BUYER: The City of Carlsbad Attn: Frank Mannen, Assistant City Manager 1200 Carlsbad Village Drive Carlsbad CA 92008 Either party may change its address for notice by delivering written notice to the party as provided herein. Buyer and Seller, and their respective counsel, hereby AGG95026.F4 November 13, 1995 16 0 4 that notices from Buyer or Seller may be given by their respective counsel and tha for the purpose of giving such notice, either party's counsel may communicate directly with the other party. 7.16 Severability. If any term, provision, covenant or condition of this Agreemen held to be invalid, void or otherwise unenforceable, to any extent, by any cc of competent jurisdiction, the remainder of this Agreement shall not be affe thereby, and each term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 7.17 Successors. Subject to the restriction on assignment contained herein, all terms of this Agreement shall be binding upon, inure to the benefit of, and enforceable by the parties hereto and their respective heirs, legal representatives, successors, and assigns. 7.18 Time. Time is of the essence of each provision of this Agreement includins without limitation all time deadlines for satisfying conditions and Close of Escrow. 7.19 1031 Exchange. Buyer acknowledges that Seller or certain partners of Sel (each such person or entity hereinafter referred to as an "Exchanging Partr may engage in a tax deferred exchange ("Exchange") pursuant to the Sect 1031 of the Internal Revenue Code. To effect an Exchange, Seller may distribute undivided interests in the Property to an Exchanging Party, and/( the Exchanging Partner may assign its rights in, and delegate its duties ur this Agreement, so long as it remains obligated under this Agreement, as as transfer its interests in the Property to any exchange accommodator selected by the Exchanging Party. As an accommodation to the Exchang Party, Buyer agrees to cooperate with Exchanging Party in connection wit! Exchange, including the execution of documents therefor, provided that th following terms and conditions are satisfied: (a) There shall be no liability to Buyer, Buyer shall have no oblig to take title to any property in connection with the Exchange- Buyer shall in no way be obligated to pay any escrow costs, brokerage commissions, title charges, survey costs, recordir costs or other charges incurred with respect to any exchang property and/or an Exchange; In no way shall the Close of Escrow be contingent or otherw be subject to the consummation to the Exchange, Escrow sf timely close in connection with the terms of this Agreement notwithstanding any failure, for any reason, of the parties to (b) (c) AGG95026.F4 November 13,1995 17 0 Exchange to effect the same; and Buyer shall not be required to make any representation or warranties nor assume any obligations, or spend any sum or incur any personal liability whatsoever in connection with an Exchange. (d) [Remainder of this Page Intentionally Left Blank.] AGG95026.F4 November 13, 1995 18 I 0 e CONSENT OF ESCROW AGENT SELLER: Sam m i s Carls bad Associates A California General Partnership BUYER: The City of Carlsbad A Municipal Corporation ESCROW NO.: 1 124540-LG The undersigned ("Escrow Agent") hereby: (1) acknowledges delivery of a Purcha and Sale Agreement and Escrow Instructions ("Agreement") dated , 1995 between the Seller and Buyer identified above, on 3 which shall constitute the "Opening of Escrow" pursuant to Section 3.1 of the Agreement; and (2) agrees to act as the Escrow Agent in accordance with the provisions of the Agreement. ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMF By: Escrow Officer AGG95026.F4 November 13, 1995 20