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HomeMy WebLinkAbout2010-04-13; City Council; 20188; Funding for Purchase of 2065 Camino Vida Roble APN 2130612800 Hawthorne Family TrustCITY OF CARLSBAD - AGENDA BILL AB# .20,1.88 MTG. 4/13/10 DEPT. CM AUTHORIZATION AND APPROPRIATION OF FUNDING FOR THE PURCHASE OF 2065 CAMINO VIDA ROBLE APN 213-061-28 FROM THE HAWTHORNE FAMILY TRUST DEPT. DIRECTOR CITY ATTORNEY CITY MANAGER RECOMMENDED ACTION: Approve Resolution No. 2010-076 . authorizing the appropriation of $2,560,000 from Community Facilities District No. 1 (CFD #1) for the acquisition of 2065 Camino Vida Roble, Carlsbad CA 92011, from the Hawthorne Family Trust, including all acquisition related expenses, such as legal, appraisals, inspections, studies, surveys, reports, and escrow fees; and authorizing the Mayor to execute all documents associated with the purchase of APN 213- 061-28. ITEM EXPLANATION: For many years the City has planned for construction of a Public Works Center which would bring together similar functions and departments into a central location and allow for the relocation and redevelopment of the Oak Street Yard. The Public Works Center project was identified in the City's Capital Improvement Program for development beginning in Fiscal Year 2013-14 with a total budget of approximately $28.1 million dollars. Since 1986, the City has owned 2075 Las Palmas Dr., located in the Palomar Airport Business Park. The property consists of over 22,000 square feet of office space, and adjacent parking. During the late 1980's and 1990's it was occupied by the City's Community Development Department, however in 2001, those City offices were relocated to the Faraday Center. At the time Community Development relocated its offices, it was determined that the facility should be retained by the City in the event it was needed for a future public purpose. The facility on Las Palmas Dr. was subsequently leased to a series of private companies. In late 2008, the commercial lease on Las Palmas expired, and the tenant moved out of the facility. The facility was marketed for lease immediately, however existing economic and market conditions have made leasing the facility very difficult and the building has remained vacant for over a year. In late 2009, the City was contacted by the adjacent property owner, Hawthorne Family Trust, owners of 2065 Camino Vida Roble. The property owner informed the City that they were going to be listing the property for sale. The Camino Vida Roble property, owned by Hawthorne Family Trust, consists of 3.08 gross acres of land with an existing 5,400 square foot industrial building. DEPARTMENT CONTACT: Cynthia Haas 760-434-2829 cynthia.haas@carlsbadca.gov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED DENIED CONTINUED WITHDRAWN AMENDED ¥ D D D CONTINUED TO DATE SPECIFIC CONTINUED TO DATE UNKNOWN RETURNED TO STAFF OTHER -SEE MINUTES D n n n Page 2 The site was previously used as a heavy equipment rental yard and repair facility. If combined with the City's Las Palmas facility, the total site is 5.8 gross acres and 28,000 square feet of office and industrial space. In early 2010, the City Council determined that if the Las Palmas and Hawthorne facilities were combined, it could provide the City with enough space to accommodate relocation of the Oak Street Yard, and bring together many of the public works oriented functions/divisions into a single facility at a significantly lower cost than had been anticipated with the earlier project. An independent appraisal was conducted of 2065 Camino Vida Roble and an offer equal to the appraised value was made to the Hawthorne Family Trust by the City. On February 23, 1010, the Hawthorne Family Trust accepted the City's offer to purchase the facility for a purchase price of $2,480,000. FISCAL IMPACT: Relocating the Oak Street Yard facility and creating a Public Works Center is possible by acquiring 2065 Camino Vida Roble. The purchase price of 2065 Camino Vida Roble is $2,480,000. However, staff requests a $2,560,000 appropriation to cover the costs of appraisals, inspections, surveys, legal fees, reports and other studies related to the acquisition of the property. At this time, funds are not being requested for improvements to the facilities. If the appropriation is approved, funds for the purchase will be allocated from CFD #1. CFD#1 was approved by voters in 1991 to provide funding for a variety of municipal facilities impacted by future development. There are two types of special taxes authorized by CFD#1; a special tax on vacant land levied annually and a one-time special tax on property when it develops. The special taxes are collected through CFD #1 and can only be used to fund facilities authorized by the CFD #1 formation documents. The Public Works Center is a CFD #1 authorized facility. According to the City's Fiscal Year 2009-10 Capital Improvement Program, this facility has a budget of approximately $28.1 million dollars and is programmed for Fiscal Year 2013-14. The City has been accumulating CFD #1 special taxes so a Public Works Center could be built in the years following Fiscal Year 2013- 14. As such, CFD #1 currently has sufficient funds to move a portion of the project forward and appropriate $2,560,000 for the acquisition related costs of 2065 Camino Vida Roble. If acquisition of this property is approved by the Council, staff will return to Council in the near future to further address the costs and savings associated with this proposed solution for a Public Works Center. ENVIRONMENTAL IMPACT: The Planning Director has determined that the project is exempt from the California Environmental Quality Act pursuant to Section 15061(b)(3) of the CEQA Guidelines. Section 15061(b)(3) exempts projects or activities where it can be seen with certainty that there is not a possibility that the activity may have a significant effect on the environment. Simple acquisition is such and activity. Page3 EXHIBITS: 1. Resolution No. 2010-076 2. Purchase and Sales Agreement with Hawthorne Family Trust 3. Parcel Map 1 2 3 4 WITH THE ACQUISITION OF THE PROPERTY. 5 6 7 8 WHEREAS, the City Council and Hawthorne Family Trust have agreed to a 10 purchase price of $2,480,000 for the subject property, not including the cost of appraisal, 11 studies, escrow fees and related expenses, or legal fees. 12 NOW, THEREFORE, BE IT RESOLVED by the City of Carlsbad, California, as 13 follows:14 15 16 18 19 20 21 22 23 24 25 26 // 27 28 RESOLUTION NO. 2010-076 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROPRIATING $2,560,000 FROM COMMUNITY FACILITIES DISTRICT NO. 1 FOR THE ACQUISITION OF APN 213-061-28; AND, AUTHORIZING THE MAYOR TO EXECUTE ALL DOCUMENTS ASSOCIATED WHEREAS, the City Council of the City of Carlsbad has determined that it is in the best interest of the City to acquire APN 213-061-28 and all improvements from the Hawthorne Family Trust, for a future Public Works Center; and 1. That the above recitations are true and correct. 2. That an appropriation of $2,560,000 is approved for acquisition of the 17 property, including the costs of appraisal, studies, escrow fees and related expenses, and legal fees. 3. That the City Council hereby makes the finding that acquisition of APN 213- 061-28 is consistent the General Plan of the City of Carlsbad, California. 4. That the Mayor is authorized to execute all documents associated with the acquisition and transfer of interest in APN 213-061-28 to the City of Carlsbad. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 13th day of April, 2010, by the following vote to wit: AYES: Council Members Lewis, Kulchin, Hall, Packard and Blackburn. NOES: None. ABSENT: None. ATTEST: ORR'AlNE/MJ/VOOD, City -^ -' PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS BY AND BETWEEN JAMES T. HAWTHORNE AND DOROTHY L. HAWTHORNE, Trustees of THE HAWTHORNE FAMILY TRUST DATED MARCH 10, 1989 (collectively as ASeller©) AND THE CITY OF CARLSBAD, a Municipal Corporation (as ABuyer®) PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS (AAgreement®) is made as of /Lpj^ji y3 2010 (AEffective Date®), by and between JAMES T. HAWTHORNE ANDDOROTHY L HAWTHORNE, TRUSTEES OF THE HAWTHORNE FAMILY TRUST DATED MARCH 10, 1989, (collectively, the ASeller®) and THE CITY OF CARLSBAD, a Municipal Corporation (ABuyer®), with reference to the facts set forth below and constitutes (i) a contract of purchase and sale between the parties, and (ii) escrow instructions to Escrow Agent (as hereinafter defined). RECITALS A. Seller is the owner of that certain real property situated in the City of Carlsbad, County of San Diego, State of California, commonly described as Assessors Parcel No. 213-061-28, and more particularly described in Exhibit AA@ attached hereto (the Ai_and@). B. Seller desires to sell all its right, title and interest in the Property (which, as defined in Section 2.1 of this Agreement, includes the Land and certain other rights and interests) to Buyer, and Buyer desires to purchase the Property from Seller, on the terms and conditions set forth in this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the Recitals set forth above, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree to the above Recitals and as follows: ARTICLE 1 DEFINED TERMS 1.1 Business Day. The term ABusiness Day® shall mean any day other than a Saturday or Sunday or legal holiday in the State of California. The term Aday@ shall mean every calendar day of the year. 1.2 Cash. The term ACash® shall mean (i) currency of the united States of America, (ii) cashier=s check(s) currently dated and payable to Escrow Agent or Seller, as required under this Agreement, drawn and paid through a California banking institution, tendered to Escrow Agent or Seller, as required under this Agreement at least one additional Business Day before funds are required to be available in Escrow or (iii) an amount credited by wire transfer into Escrow Agent=s or Seller=s bank account as required under this Agreement. 1.3 Close of Escrow. The term ACiose of Escrow® shall mean the date of the recordation of Seller=s Grant Deed (as hereinafter defined) in accordance with the terms and provisions of this Agreement. 1.4 Closing Date. The term ACiosing Date® shall mean the date which is twenty (20) days immediately following the expiration of the Feasibility Period. 1.5 Deposit. The term ADeposit® is defined in Section 4.2 of this Agreement. 1.6 Effective Date. The term AEffective Date® shall mean the date set forth above. 1.7 Escrow. The term AEscrow® shall mean the escrow opened by Escrow Agent pursuant to the terms of this Agreement. 1.8 Escrow Agent. The term AEscrow Agent® shall mean Chicago Title Company. 1.9 Feasibility Period. The term AFeasibmty Period® shall mean the period beginning on the date of Opening of Escrow and ending ninety (90) days thereafter (subject to extension pursuant to Section 5.1.1 of this Agreement). 1.10 Governmental Agencies. The term AGovernmental Agencies® shall mean any local, county, state and/or federal governmental or quasi-governmental agencies, authorities or regulatory bodies and any public or private utility companies having jurisdiction over the Property. 1.11 Hazardous Materials. The term AHazardous Materials® shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant or infectious or radioactive material, including but not limited to those substances, materials or wastes regulated now or in the future under any of the following statutes or regulations promulgated thereto: (a) any Ahazardous substance® within the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (ACERCLA®) 42 u.s.c. • 9601, et seq. or the California Hazardous Substance Account Act, Cal. Health and Safety Code • 25300 et seq. or the Porter-Cologne water Quality Act, Cal. Water Code • 13000 et seq. or the Hazardous Materials Transportation Act, 49 U.S.C. • 1801, et seq.; (b) any Ahazardous waste® within the meaning of the Resource Conservation and Recovery Act, 42 U.S.C. • • 6901 et seq.; (c) any Apesticide® or Aeconomic poison® as defined in California Food & Agricultural Code • 12753 and any regulations promulgated in connection therewith; or (d) any other substance, chemical, waste, toxicant, pollutant, pesticide or contaminate regulated by any federal, state or local law, statute, rule, regulation or ordinance for the protection of health or the environment, including, without limitation, any petroleum products or fractions thereof. 1.12 intangible Property. The term Aintangibie Property® shall mean all of Seller-s right, title and interest, if any, in and to all intangible personal property related to the Land and/or the improvements, including, without limitation, all of the following items, to the extent assignable: (i) licenses, easements, entitlements, rights, approvals, certificates, plans, specifications, drawings, reports and permits relating to the Land and/or the improvements, and (ii) if still in effect, guaranties and warranties received by Seller from any contractor, manufacturer or other person in connection with the construction or operation of the Land and/or the improvements. 1.13 land. The term ALand® shall mean the real property described in Exhibit AA@ attached hereto. 1.14 Opening of Escrow. The term AQpening of Escrow® shall mean the date Escrow Agent executes the Consent of Escrow which is attached hereto, which date shall be within two (2) Business Days after the Effective Date. 1.15 Property. The term AProperty® is defined in Section 2.1 below. 1.16 Property Documents. The term AProperty Documents® shall mean any and all permits, agreements, leases (and any amendments, guarantees, correspondence, notices, security agreements, subleases and other documents pertaining to such leases), maps, development agreements, surveys, studies (including, without limitation all soils and environmental studies), civil engineering, architectural and landscaping plans, reports, projections, and other documents relating to the Property and any documents described as part of the intangible Property. 1.17 Purchase Price. The term APurchase Price® shall mean the total consideration to be paid by Buyer to Seller for the purchase of the Property as set forth in Section 4.1 of this Agreement. 1.18 Title Company. The term ATitie Company® shall mean Chicago Title Company (attn: Lorraine Martin, Vice President/Escrow Officer, (760) 268-7382.) ARTICLE 2 SALE OF PROPERTY 2.1 Sale of Property, in consideration of the covenants herein contained, Seller agrees to sell to Buyer and Buyer agrees to buy from Seller, the following property (collectively, AProperty®): 2.1.1 Real Property. Fee simple interest in the Land, together with all rights, privileges, servitudes and appurtenances thereunto belonging or appertaining, including but not limited to all right, title and interest of Seller, if any, in and to the streets, alleys and rights-ofway adjacent to the Land (collectively, AReal Property®); 2.1.2 intangible Property. Except as otherwise provided herein, seller=s interests in and to the intangible Property, including, without limitation, application and rights under any licenses, permits, entitlements, approvals, plans and rights to develop, agreements with public agencies related to the Real Property, and civil engineering, architectural, landscape architectural, soils consultants and environmental reports and plans with respect to the Real Property and any prepaid fees, deposits (including water and sewer deposits), will serve letters, inspection fees, and agreements with any governmental agencies or local districts including any agreements with any school districts or water and utility companies, intangible Property shall not include Property Documents which Buyer and Seller agree in writing shall be excluded after Buyer shall have given notice of disapproval of same as provided in Section 5.1.1; and 2.1.3 improvements. The buildings, structures, fixtures and other improvements on the Land, including specifically, without limitation, those certain industrial buildings located thereon (collectively, the Approvements®). Seller makes no representations or warranties of any kind and Buyer acknowledges that it has not relied on and will not rely on any such representation or warranty regarding the size or condition of the improvements. 2.2 Closing Date. Escrow shall close on the Closing Date, if such date falls on a day which is not a Business Day, the Closing Date shall be the next Business Day. ARTICLE 3 PRE-ESCROW OBLIGATIONS; DELIVERIES TO ESCROW AGENT 3.1 Opening of Escrow. Upon the Effective Date, Buyer and Seller shall open Escrow by depositing with Escrow Agent a fully executed original of this Agreement for use as escrow instructions, and Escrow Agent shall execute the Consent of Escrow Agent which appears at the end of this Agreement and deliver a fully executed consent to Buyer and Seller, if Escrow Agent requires additional instructions, the parties agree to make any deletions, substitutions and additions as the parties shall mutually approve and which do not materially alter the terms of this Agreement. 3.2 Sellers Deliveries. Seller shall deliver or cause to be delivered all of the following instruments to Escrow at least one (1) Business Day prior to the Closing Date: 3.2.1 Grant Deed. An original grant deed in Title Company=s standard form as approved by Buyer and Seller (AGrant Deed®) conveying the Real Property to Buyer, executed and acknowledged by Seller. 3.2.2 Assignment. Two original counterparts of the Assignment in the form attached hereto as Exhibit AB@ (the AAssignment®), executed by Seller. 3.2.3 FIRPTA Affidavit. A Certificate of Non-Foreign Status, pursuant to Section 1445(0)(2) of the Internal Revenue Code certifying that Seller is a non-foreign person, in the form attached hereto as Exhibit AC@, and a properly executed California Form 593 certifying that Seller is a California resident, both executed by Seller (collectively, the ANon-Foreign Certifications®). 3.3 Buyer=s Deliveries. Buyer shall deliver to Escrow the Deposit required under Article 4 at the times therein stated. In addition, Buyer shall deliver all of the following instruments to Escrow at least one (1) Business Day prior to the Closing Date: 3.3.1 Assignment. Two original counterparts of the Assignment, executed by Buyer. 3.3.2 Acceptance of Deed. A Certificate of Acceptance of Deed executed by Buyer. 3.4 Additional Seller Closing Obligations, in addition to the obligations of Seller set forth in Section 3.2 above, Seller shall cause the Title Company to issue the Title Policy in the form described in Section 5.1.3 subject only to the Permitted Exceptions (defined in Section 5.1.3). 3.5 Sellers Failure to Deliver, in the event Seller fails to deliver any items pursuant to Section 3.2 or 3.4, Seller shall be deemed in default of this Agreement. 3.6 Buver=s Failure to Deliver, in the event Buyer fails to deliver any items pursuant to Section 3.3, Buyer shall be deemed in default of this Agreement. ARTICLE 4 PURCHASE PRICE 4.1 Purchase Price. The Purchase Price for the Property shall be Two Million Four Hundred and Eighty Thousand Dollars and NO/100 ($2,480,000.00). ARTICLE 5 CONDITIONS PRECEDENT TO CLOSE OF ESCROW 5.1 Conditions Precedent. This Agreement and the obligations of the parties hereunder shall be subject to satisfaction or waiver by Buyer of all the conditions precedent contained in this Article 5. 5.1.1 Feasibility Studies. During the Feasibility Period, Buyer shall have the right to analyze and determine, in Buyer=s sole and absolute discretion, that the Property is suitable for Buyer. Within five (5) days after the Effective Date, Seller shall deliver to Buyer all Property Documents in Sellers possession or control, and provide access to Buyer for the review of all of Seller=s files relating to the Property. Additionally, Buyer may specifically request any additional Property Documents which it believes may be within Seller=s possession and control and Seller shall provide such additional Property Documents if such are within Seller=s possession and control or notify Buyer that it does not have the requested documents within two (2) days after receipt of Buyer-s request. During the Feasibility Period, Buyer shall have the right to review all of Seller=s files relating to the Property, and contact all of Sellers contractors, subcontractors and consultants for whatever information Buyer deems relevant concerning the Property. During the term of this Agreement, Buyer shall have the right to enter onto the Land to conduct tests, investigations and inspections deemed necessary by Buyer, including, without limitation, those relating to planning, engineering, soils and marketing, subject to the rights of Sellers tenants. Buyer agrees to give Seller at least one (1) Business Days= prior written notice of its desire to enter into any portion of the Property. Such written notice shall also describe with particularity the nature and extent of all proposed testing, investigation and inspections. Furthermore, seller may either personally or through its representative be present at all inspections and to control the performance of such tests, studies or inspections at Sellers election. Buyer 10 shall use care and consideration in connection with any of its inspections or tests, and shall not disturb seller=s tenants. Following such inspections or tests, Buyer shall restore the Property to the condition it was in prior to such inspections or tests. Buyer shall not cause any mechanic=s or materialmen=s liens to be filed against the Land and shall indemnify, protect, defend and hold Seller harmless from and against any and all costs and losses as a result of any claims, damages, liabilities, actions or causes of actions, penalties, demands, mechanics liens and materialmen=s liens (including attorney=s fees and costs) arising from or attributable to Buyer-s or Buyer=s agents, contractors, or subcontractors entry onto or activities on the Property. The indemnity obligations of Buyer set forth in this paragraph shall survive any termination of this Agreement or the Close of Escrow as provided herein. During the term of this Agreement, Buyer shall also have the right to process governmental approvals relating to Buyer-s proposed development of the Property. The Parties understand that Buyer will be determining the feasibility of significant development and that such development may necessitate zoning changes and/or a general plan amendment. Buyer may make applications or requests for such zoning changes and/or general plan amendment, however if such changes and/or amendments are anticipated to be approved prior to the Close of Escrow, Buyer must obtain Seller=s prior consent to the proposed change and/or amendment prior to submission, which consent shall be deemed given if seller does not deliver to Buyer a written notice of its disapproval, stating the reasons therefor, within five (5) days of request for approval of such proposed change and/or amendment. Seller agrees to not unreasonably withhold, condition or delay its consent to such changes and/or amendments. If Buyer approves of its feasibility investigation during the Feasibility Period, Buyer shall deliver, prior to the 11 expiration of the Feasibility Period, written notice to Escrow Agent and Seller indicating that Buyer has approved its feasibility investigation (ANotice of Approval®). Buyer shall also have the right to deliver notice to Seller of any Intangible Property that Buyer does not desire to have assigned to Buyer at the Close of Escrow, if Buyer elects within the Feasibility Period, for any reason within Buyer=s sole and absolute discretion, not to purchase the Property, Buyer may terminate this Agreement and cancel Escrow by delivering written notice of cancellation (ANotice of Cancellation®) to Escrow Agent and Seller on or before the expiration date of the Feasibility Period. The failure of Buyer to deliver a timely Notice of Cancellation or Notice of Approval shall constitute Buyer=s approval of feasibility studies, if Buyer terminates this Agreement under this Section, Buyer shall return all Property Documents that Buyer has received from Seller and Escrow Agent shall promptly return the Deposit and any interest earned thereon to Buyer. Notwithstanding anything to the contrary in this Section, the Feasibility Period shall be extended for any delay encountered by Buyer in its investigation of the Property as a result of delays in obtaining the Property Documents or the Preliminary Report, or other matters beyond the reasonable control of Buyer, provided that such extension shall not exceed ten (10) days beyond the initial Feasibility Period. 5.1.2 Review of Preliminary Report. Buyer shall cause the Title Company to issue to Buyer a Preliminary Title Report describing title to the Real Property, together with legible copies of all recorded documents described in the Preliminary Title Report and plotted easements (collectively, the APreiiminary Report®). During the Feasibility Period, Buyer shall deliver notice of approval or disapproval of matters disclosed in the Preliminary Report, which approval or disapproval shall be in Buyer=s sole and absolute discretion. The failure of Buyer to deliver a timely notice of disapproval shall be deemed to be Buyer=s approval thereof. If Buyer delivers notice of 12 disapproval, seller may elect to remove or otherwise cure to Buyer=s satisfaction any disapproved item(s) prior to Close of Escrow by giving Buyer written notice of its election to cure, within five (5) Business Days of the delivery of Buyer=s notice, if there are any changes to the Preliminary Report, the Title company shall deliver to Buyer a supplemental report together with legible copies of all recorded documents described therein that were not included in the Preliminary Report (collectively, the ASuppiementai Report®). Buyer shall have the right to review and approve any new items appearing on the Supplemental Report which did not appear in the Preliminary Report. Within five (5) Business Days after the delivery of the Supplemental Report, Buyer shall deliver notice of approval or disapproval thereof to Seller and Escrow Agent. The failure of Buyer to deliver notice of disapproval shall be deemed to be Buyer=s approval thereof. If Buyer delivers notice of disapproval of any item(s) disclosed on the Supplemental Report, Seller may elect to remove or otherwise cure to Buyer=s satisfaction any disapproved item(s) prior to Close of Escrow by giving Buyer written notice of its election to cure, within three (3) Business Days of the delivery of Buyer=s notice. If Seller does not elect to cure any items timely disapproved by Buyer, then Buyer shall have five (5) Business Days from the date Sellers election to cure is due to either waive its prior disapproval or terminate this Agreement. The failure of Buyer to deliver notice of its election to terminate this Agreement or waive its prior disapproval, shall be deemed to be Buyer=s election to waive its prior disapproval. Notwithstanding the foregoing, Seller shall be required to remove any monetary liens (other than the lien of non-delinquent taxes) on or before the Close of Escrow, if Buyer delivers notice of its election to terminate this Agreement, Escrow Agent shall immediately return the Deposit together with any interest earned thereon to Buyer. 13 5.1.3 Title Policy. Escrow Agent shall be unconditionally committed to procure from the Title Company, (a) the Title Company=s standard CLTA Owner-s Policy of Title insurance (or ALTA Extended Coverage Owner=s Policy, if elected by Buyer), with a liability limit in the amount of the Purchase Price and insuring fee title to the Land vested in Buyer, (b) subject only to the Permitted Exceptions, and (c) including such endorsements as Buyer may reasonably reduest (the AEndorsements®) (collectively, the ATitle Policy®). Buyer shall take title to the Real Property subject to (i) the items approved by Buyer pursuant to Section 5.1.2 of this Agreement and (ii) any items caused or permitted to be placed of record by Buyer (collectively, the AFermitted Exceptions®). Buyer shall pay all costs of a standard CLTA Owner=s Policy, and shall pay any additional premium attributable to an ALTA Extended Coverage Owner-s Policy and the Endorsements. 5.1.4 No Material Adverse Change in Property. There shall not have occurred any material change with respect to the Property or any information heretofore or hereafter furnished to Buyer with respect to the Property, including specifically, but without limitation, any changes to the Property Documents or any change which would make any portion of this Agreement, including, without limitation, the representations, warranties, covenants and agreements contained in Article 7, untrue or materially misleading. 5.1.5 Approval of City Council. Notwithstanding anything to the contrary contained in this Agreement, Buyer=s obligations to consummate the acduisition of the Property pursuant to the terms of this Agreement are subject to and conditioned on Buyer obtaining approval of this Agreement by the City Council for the City of Carlsbad. This condition precedent shall be satisfied, in Buyer=s sole discretion, or waived by Buyer in writing on or before expiration of the Feasibility Period. 14 5.2 Failure of Conditions Precedent, if any or all of the conditions precedent in this Article are neither satisfied nor waived by Buyer in the manner provided above, Buyer may terminate the Escrow by giving a written notice of termination to seller and Escrow Agent, in such event, Escrow Agent shall promptly return the Deposit to Buyer and shall return all other funds (except as otherwise provided herein), less applicable Escrow cancellation charges, and documents to the parties who deposited them, Escrow shall terminate and all the parties shall be released from their obligations hereunder. ARTICLE 6 COVENANTS AND AGREEMENTS 6.1 No Concern. Escrow Agent shall have no concern with, and liability or responsibility for, this Article. 6.2 indemnity by Seller. Seller hereby agrees to indemnify, protect, defend and hold harmless Buyer and Buyer=s shareholders, partners, agents and employees from and against any damage to person or property, actions, liabilities, costs or expenses, including reasonable attorneys fees, arising from or attributable to any act or omission relating to Sellers ownership of the Property prior to the Close of Escrow, except to the extent directly caused by the negligence or misconduct of Buyer or its agents, employees or contractors. 6.3 Assignment of Entitlement Documents, in the event that Buyer fails to complete the purchase of the Property, Buyer shall deliver copies of and assign all legal title to Seller, of all the documents relating to its investigations and studies concerning the Property, including but not limited to, all reports, studies, correspondence, notes, and written materials supplied by Buyer=s consultants as well as all entitlements, maps, site plans, architectural plans, landscape plans, environmental studies, engineering plans, reports, permits or approvals, if any (AEntitiement Documents®), processed by Buyer with the City or 15 any other Governmental Agency; provided, however, in agreeing to such assignment, Buyer makes no representations or warranties of any kind whatsoever, either express or implied, with respect to the assignability, accuracy, truthfulness or completeness of such documents and that Seller will be accepting such assignment on an AAS is, Where is® basis. Buyer further agrees to pay all contractors, engineers and consultants as agreed for preparation of said reports. This Section shall survive the termination of this Agreement and the Escrow hereunder. 6.4 No Marketing. Seller shall not market the Property for sale unless this Agreement has been terminated pursuant to its terms. 6.5 Condemnation or Relocation costs. Seller acknowledges that the Purchase Price paid hereunder, fully compensates Seller for not only the purchase of the Property (as defined herein), but also for all relocation and other costs or compensation that Seller, or its affiliates, successors and assigns may incur or be entitled to receive in connection with or as a result of this Agreement, the transfer of title to the Property pursuant to this Agreement, termination of any leases, subleases, licenses or other agreements pertaining to or in connection with the Property, or having to vacate the Property, or in anyway connected with any City of Carlsbad project involving the Property. Accordingly, Seller agrees to the following: 6.5.1. Effective as of the Close of Escrow, Seller hereby releases Buyer and its ageTTts, employees, representatives, administrators and affiliates from all liabilities, obligations, claims, rights and causes of action of every nature, known or unknown, arising from or related to the value of any and all real property rights, value of the Real Property and improvements, pre- condemnation or inverse condemnation damages, severance damages, loss of goodwill, relocation claims and other costs or compensation that Seller, or its affiliates, successors and assigns may incur or be entitled 16 to receive in connection with or as a result of this Agreement, the transfer of title to the Property pursuant to this Agreement, termination of any leases, subleases, licenses or other agreements pertaining to or in connection with the Property, or having to vacate the Property or in anyway connected with any City of Carlsbad project involving the Property. With respect to such release, Seller acknowledges that it has been advised by legal counsel and is familiar with the provisions of California Civil code section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.SELLER, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ALL RIGHTS IT MAY HAVE THEREUNDER, AS WELL AS ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT PERTAINING TO THE RELEASE SET FORTH ABOVE. SELLERS INITIALS * 6.6 Possession. Seller, at its sole cost and expense, shall deliver to Buyer, possession of the Property, on the Closing Date. ARTICLE 7 ACKNOWLEDGMENTS, REPRESENTATIONS AND WARRANTIES 7.1 Representations and warranties of Buyer. Buyer represents and warrants as to the items set forth below as of the date of this Agreement, which representations and warranties shall be true and correct as of the Close of Escrow and shall survive the Close of Escrow. 7.1.1 Authority. Subject to approval of this Agreement by City Council for the City of Carlsbad, Buyer has full power and authority to enter into this Agreement, and own the Property, and no other authorizations or approvals, whether of governmental bodies or otherwise, will be 17 necessary in order to enable Buyer to enter into or to comply with the terms of this Agreement. 7.1.2 Binding Effect of Documents. This Agreement and the other documents to be executed by Buyer hereunder, upon execution and delivery thereof by Buyer, will have been duly entered into by Buyer, and will constitute legal, valid and binding obligations of Buyer. Neither this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement or instrument to which Buyer is a party or by which it is bound. 7.2 Representations and Warranties of Seller. Seller represents and warrants as to the items set forth below as of the date of this Agreement, which representations and warranties shall be true and correct as of the Close of Escrow and shall survive the Close of Escrow. 7.2.1 Authority. Seller has full power and authority to enter into this Agreement and sell the Property, and no other authorization or approvals will be necessary in order to enable the Seller to enter into or comply with the terms of this Agreement. 7.2.2 Binding Effect of Documents. This Agreement and the other documents to be executed by Seller hereunder, upon execution and delivery thereof by Seller, will have been duly entered into by Seller, and will constitute legal, valid and binding obligations of Seller. Neither this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement or instrument to which Seller is a party or by which it is bound. 7.2.3 Property Documents. To Seller=s knowledge, the 18 Property Documents delivered by Seller to Buyer are true and correct copies and, to seller=s knowledge, there are no other documents or instruments which would constitute Property Documents that have not been delivered by Seller. To Sellers knowledge, the Property Documents contain information which is material to the ownership and development of the Property. 7.2.4 Agreements: No Default. To Seller=s knowledge, there are no agreements, contracts, leases or subleases relating to the Property. Seller is not in default under any contracts, leases, agreements, easements or any other documents or instruments relating to or affecting the Property. 7.2.5 Pending Transactions, Suits or Proceedings. To Sellers knowledge, there are no transactions, suits, proceedings, litigation (including zoning or other land use regulation proceedings), condemnation, or investigations pending or threatened against or affecting seller or the Property which would prevent Seller from meeting any of its obligations under this Agreement or which would result in a material adverse change in the condition or operation of the Property. 7.2.6 Seller=s Use Conforming. To Sellers knowledge, there are no alleged violations of any governmental law, regulation, ordinance or code applicable to the Property. 7.2.7 Preliminary Report. To Sellers knowledge, there are no liens, encumbrances, or any other defects in title to the Property which are not shown on the Preliminary Report. 7.2.8 Defects. To Seller=s knowledge, there are no latent or other defects or conditions, including, without limitation any material adverse environmental conditions or endangered species on or about the Property which would cause injury or damage to persons or property. 7.2.9 No Rights to Acquire Property. To Seller=s knowledge, no person, firm or entity other than Buyer has any rights in or right to acquire the Property or any part thereof, and as long as this Agreement remains in force, Seller will not, without Buyer=s prior written consent, lease, transfer, option, mortgage, pledge, or convey its interest in the Property or any portion thereof nor any right therein, nor shall Seller enter into any agreement granting to any person or entity any option to purchase or other rights with respect to the property or any part thereof. 7.2.lOHazardous Materials. Seller has not stored or caused to be stored upon the Property any Hazardous Materials (other than de minimis amounts customarily and properly used in connection with the maintenance of the Property) and, to sell.er=s knowledge (a) no Hazardous Materials now exist in, on or under the Property, (b) no underground tanks exist on the Property, (c) no use by Seller or any prior owner of the Property or any other person has occurred which use has been alleged by any party to cause a violation of any applicable Environmental Law, and (d) the Property is not on any ASuperfund@ list under any applicable Environmental Law or is subject to any lien relating to any environmental matters. Except as set forth herein, Buyer acknowledges that Seller makes no representations or warranties regarding the presence of any Hazardous Materials (as defined below) in, on or under the Property. By proceeding with this transaction following the expiration of the Feasibility Period, Buyer will be deemed to have made its own independent investigation of the Property with regard to the presence of Hazardous Materials as Buyer deems appropriate. Accordingly, Buyer hereby expressly waives and relinquishes any and all rights and remedies Buyer 20 7.4 Seller=s Knowledge. The term ASeller=s Knowledge,® or variations thereof and all of Seller=s representations, shall be limited to the actual, personal, present knowledge of Seller, without any duty of inquiry or investigation. 7.5 indemnification. Buyer and Seller agree to indemnify, protect, defend (with legal counsel acceptable to the other party) and hold harmless the other party and the other party=s employees, partners, members, directors, officers, affiliates, subsidiaries, agents and representatives from and against any and all losses, claims, demands, damages, costs and expenses of whatever nature (including, without limitation, attorneys^ fees) relating to or arising out of a breach of such party^s representations and warranties set forth in this Agreement. The covenants contained in this Article 7 shall survive the Close of Escrow. 22 ARTICLE 8 THE CLOSE OF ESCROW 8.1 Close of Escrow. Escrow Agent shall close the Escrow on the Closing Date by (i) recording the Grant Deed and (ii) delivering funds and documents as set forth in Article 10 entitled ARecordation and Distribution of Funds and Documents® WHEN AND ONLY WHEN each of the conditions set forth below has been satisfied. 8.1.1 Funds and instruments. All funds and instruments required pursuant to Sections 3.2, 3.3 and 4.3 have been delivered to Escrow Agent. 8.1.2 Satisfaction of Conditions Precedent. Each of the conditions precedent set forth in Article 5 have been satisfied or waived as provided for in Article 5. 8.2 Recordation. Escrow Agent shall record the Grant Deed in the Office of the County Recorder for the county where the Real Property is located. 8.3 Termination Based on Failure to Close by the Closing Date. Time is of the essence of each and every provision and each obligation of this Agreement. If Escrow fails to close by the Closing Date for any reason other than Buyers or Seller=s default, then, the respective rights, duties and obligations of Buyer and Seller under this Agreement shall forthwith terminate without further liability unless the parties mutually agree to extend the Closing Date. The parties shall immediately thereafter sign such instructions and other instruments as may be necessary to effect the cancellation of this Escrow, and each party shall pay its respective share of Escrow cancellation charges (if any), upon cancellation, due to no fault of either Seller or Buyer, Escrow Agent shall immediately return the Deposit to Buyer less applicable cancellation charges, and documents to the parties that furnished them. 23 ARTICLE 9 PRORATION, FEES AND COSTS 9.1 Prorations. Escrow Agent shall prorate between the parties, to the Close of Escrow, based on the latest information available to Escrow Agent, county taxes for the Property. If, after the Close of Escrow, either party receives a bill for any taxes, including, without limitation, supplemental taxes (collectively, AOther Taxes®), owed by the other party, the parties agree that (a) such other Taxes shall be prorated between the parties to the Close of Escrow and (b) the party receiving the bill for the Other Taxes shall notify the party responsible for paying the Other Taxes in writing of the amount of such Other Taxes and the party owing the Other Taxes shall promptly pay its prorated share of such other Taxes within thirty (30) days of demand therefor. 9.2 Thirty-Day Month. All prorations and/or adjustments called for in this Agreement are to be made on the basis of a thirty (30) day month, unless otherwise specifically instructed in writing. 9.3 seller=s Fees and Costs. Seller shall pay the fees of any counsel representing it in connection with this transaction. 9.4 Buyer=s Fees and Costs. Buyer shall pay (i) the fees of any counsel representing it in connection with this transaction; (ii) the premium for the Title Policy, including without limitation, the costs of any ALTA extended coverage and Endorsements; (iii) for the cost of any new survey; (iv) the Escrow Agent=s escrow fee; (v) any transfer tax, documentary stamp tax or similar tax which becomes payable by reason of the transfer of the Property; and (vi) recording charges. 9.5 Escrow Cancellation Charges Due to a Default. Notwithstanding the foregoing: if Escrow fails to close due to Seller=s default, Seller shall pay all Escrow cancellation charges; if Escrow fails to close due to Buyer-s default, Buyer shall pay all Escrow cancellation charges; and if Escrow fails to close for any reason 24 other than the foregoing, Buyer and Seller shall each pay one- half (1/2) of any Escrow cancellation charges. AEscrow cancellation charges® means all fees, charges and expenses incurred by Escrow Agent, including all expenses incurred in connection with issuance of the Preliminary Report and other title matters. ARTICLE 10 RECORDATION AND DISTRIBUTION OF FUNDS AND DOCUMENTS 10.1 Disbursements. All disbursements by Escrow Agent shall be made by wire transfer in accordance with instructions provided to Escrow Agent. 10.2 Recorded Documents. Escrow Agent shall cause the County Recorder of the county in which the Property is located to mail the recorded Grant Deed to Buyer. 10.3 Unrecorded Documents. Escrow Agent shall, at the Close of the Escrow, deliver by certified mail, overnight courier or united States mail (or will hold for personal pickup, if requested): one (1) counterpart original of the Assignment of intangible Property and the Non-Foreign Certifications to each of Buyer and Seller, and one (1) copy of each other non-recorded document received hereunder by Escrow Agent to the payee or person (i) acquiring rights under said document or (ii) for whose benefit said document was acquired. 10.4 Copies of all Documents. Escrow Agent shall deliver copies of all documents deposited into Escrow to the parties herein. 10.5 Payment of Funds at Close of Escrow. Escrow Agent shall deliver, at the Close of Escrow, to seller, or order, all amounts to which Seller is entitled and shall deliver any excess amount to Buyer. 10.6 Conformed Copies. Escrow Agent shall, at the Close of Escrow, deliver to Seller and Buyer a copy of the Grant Deed 25 (conformed to show recording date) and conformed copies of each document recorded to place title in the condition required by this Agreement. ARTICLE 11 REMEDIES 11.1 Seller Default, in the event of any default hereunder by the Seller prior to the Close of Escrow, and Buyer provides written notice of default to Seller and Seller fails to cure the default within ten (10) days, the Buyer shall have the right to cancel this Agreement and/or to pursue any legal remedy at law or equity, including without limitation, an action for specific performance and/or damages in order to enforce Buyer=s rights hereunder. ARTICLE 12 ASSIGNMENT 12.1 Assignment by Buyer. Except as provided herein, Buyer may not assign its rights under this Agreement without seller=s written consent. Any assignment approved by Seller shall specifically provide that Buyers assignee agrees to be bound by the provisions of this Agreement and any action taken by Buyer pursuant to this Agreement as of the date of such assignment. 12.2 Assignment by Seller. Seller may not, without obtaining Buyer=s written consent, which consent may be withheld in Buyer=s sole discretion, voluntarily or by operation of law, assign or otherwise transfer any of its rights or obligations under this Agreement. Any permitted transfer or assignment shall specifically provide that Seller=s assignee agrees to be bound by the provisions of this Agreement and any action taken by Seller pursuant to this Agreement as of the date of such transfer and assignment. ARTICLE 13 GENERAL PROVISIONS 26 13.1 Eminent Domain. In the event that all or a substantial portion of the Real Property is taken or appropriated by any public or quasi-public authority under the power of eminent domain or there is a notice of or threat of taking or appropriation by any public or quasipublic authority under the power of eminent domain (Aiaking®) so as to render the remaining Real Property unsuitable for Buyer=s development of the Real Property as determined by Buyer, in Buyer=s sole and absolute discretion, then Buyer may terminate this Agreement without further liability hereunder and, notwithstanding anything to the contrary set forth on this Agreement, the Deposit shall be returned to Buyer and all monies paid by Buyer pursuant to the terms of the Agreement shall be refunded to Buyer, in the event of a partial Taking of some of the Real Property which does not render the Real Property unsuitable for Buyer=s development, as determined by Buyer in Buyer=s sole and absolute discretion, then Buyer may elect to (a) terminate this Agreement without further liability hereunder and, notwithstanding anything to the contrary set forth on this Agreement, the Deposit shall be returned to Buyer and all monies paid by Buyer pursuant to the terms of the Agreement shall be refunded to Buyer, or (b) purchase the Property at the Purchase Price specified in Section 4.1, in which case Buyer shall be entitled to retain all compensation for any Taking, whether such compensation is received before or after Close of Escrow. 13.2 Agreement Survives Close of Escrow. All representations, warranties, and covenants, and all obligations referred to or required to be performed at a time or times after the Close of Escrow, shall survive the Close of Escrow and the recording of the Grant Deed. 13.3 Attorney=s Fees, if any action is instituted between Seller and Buyer in connection with this Agreement, the party prevailing in such action shall be entitled to recover from the other party all of 27 its costs of action, including, without limitation, attorneys= fees and costs as fixed by the court therein, in addition, if either party incurs attorneys= fees or costs in successfully enforcing any rights of indemnification set forth in this Agreement, such attorneys= fees and costs shall be recoverable from the other party hereto. 13.4 Captions. The captions used herein are for convenience only and are not a part of this Agreement and do not in any way limit or amplify the terms and provisions hereof. 13.5 Construction of Agreement. The agreements contained herein shall not be construed in favor of or against either party, but shall be construed as if both parties prepared this Agreement. 13.6 Counterparts. This Agreement may be executed in counterparts, each of which, when taken together shall constitute fully executed originals. 13.7 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and all prior and contemporaneous agreements, representations, negotiations and understandings of the parties hereto, oral or written, are hereby superseded and merged herein. The foregoing sentence shall in no way affect the validity of any instruments executed by the parties in the form of the exhibits attached to this Agreement. 13.8 Exhibits and schedules. All Exhibits and Schedules attached hereto are incorporated herein by reference. 13.9 Gender and Number. The use herein of (i) the neuter gender includes the masculine and the feminine and (ii) the singular number includes the plural, whenever the context so requires. 13.10 Governing Law. This Agreement and the documents in the forms attached as exhibits hereto shall be governed by and 28 construed under the internal laws of the State of California. 13.11 Joint and Several Liability. If any party consists of more than one person or entity, the liability of each such person or entity signing this Agreement shall be joint and several. 13.12 Modification. No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge or change is or may be sought. 13.13 No Real Estate Brokerage Commission. Seller and Buyer shall not pay any real estate, brokerage or other commission or fee in connection with the grant of rights contained in this Agreement. Each party warrants to the other that the warranting party has incurred no obligation by reason of this Agreement or the transactions contemplated by this Agreement for a real estate or mortgage brokerage commission or finders fee for which the other party would be liable. Each party hereby indemnifies, protects, defends (with legal counsel reasonably acceptable to the other party) and holds harmless the other party free and from and against any and all costs and liabilities, including, without limitation, reasonable attorneys= fees and costs, for causes of action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of such party in connection with this transaction. 13.14 Notice and Payments. Any notice to be given, and except as otherwise herein provided, any payment to be made, and any other document to be delivered by any party to the other or others hereunder, may be delivered in person to a party or an officer or partner of any party, or may be deposited in the united States mail, duly certified or registered, return receipt requested, with postage prepaid, or by Federal Express or other similar overnight delivery service marked for next Business Day delivery or by facsimile with confirmation delivered by 29 U.S. Mail, as follows: To Seller: With a copy to: Hawthorne Family Trust c/o James T. Hawthorne 16945 Camino San Bernardo San Diego, California 92127-2403 Facsimile: To Buyer: with copies to: City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, California 92008-1949 Attn: Deputy City Manager Cynthia Haas Facsimile: (760) 720-9461 Asaro Keagy Freeland & McKinley Attention: Richard R. Freeland 3170 Fourth Avenue, Fourth Floor San Diego, California 92103 Facsimile: (619) 299-4268 City of Carlsbad Attn: Assistant City Attorney Jane Mobaldi 1200 Carlsbad Village Drive Carlsbad, California 92008-1949 Facsimile: (760) 720-9461 TO Escrow Agent:Chicago Title Company 701 Palomar Airport Road, Suite 260 Carlsbad, California 92011 Attn: Lorraine Martin Escrow NO.: 7508-LM Facsimile: (760) 268-0966 30 Any party hereto may from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified, unless otherwise specifically provided for herein, all notices, payments, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given and received (i) upon personal delivery, (ii) as of the third business day after mailing by United States registered or certified mail, return receipt requested, postage prepaid, addressed as set forth above, (iii) the immediately succeeding Business Day after deposit with Federal Express or other similar overnight delivery system marked for next Business Day delivery or (iv) upon receipt of delivery by facsimile so long as there is confirmation of receipt and follow-up delivery by U.S. post-marked or overnight delivery as of the same day as the facsimile delivery. The addition of any entity to the notice provisions of this Agreement shall not give such entity any right or interest in this Agreement to demand the performance of any obligation or duty imposed on any party hereto. 13.15 Remedies Cumulative. Except as specifically set forth herein, all rights and remedies of Buyer and Seller contained in this Agreement shall be construed and held to be cumulative. 13.16 Severability. in the event that any phrase, clause, sentence, paragraph, section, article or other portion of this Agreement shall become illegal, null or void or against public policy, for any reason, or shall be held by any court of competent jurisdiction to be illegal, null or void or against public policy, the remaining portions of this Agreement shall not be affected thereby and shall remain in force and effect to the fullest extent permissible by law. 13.17 Successors and Assigns. Subject to limitations expressed elsewhere, each and all of the covenants and conditions of this Agreement shall inure to the benefit of and shall be binding upon the successors-in-interest, assigns, and representatives of the parties hereto. As used in the foregoing, Asuccessors® shall refer to the parties^ interest in the Property and to the successors to all or substantially all of their assets and to their successors by merger or consolidation. 31 13.18 Time of the Essence. Time is of the essence of each and every provision of this Agreement. 13.19 waiver. No waiver by Buyer or Seller of a breach of any of the terms, covenants or conditions of this Agreement by the other party shall be construed or held to be a waiver of any succeeding or preceding breach of the same or any other term, covenant or condition herein contained. No waiver of any default by Buyer or Seller hereunder shall be implied from any omission by the other party to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect a default other than as specified in such waiver. The consent or approval by Buyer or Seller to or of any act by the other party requiring the consent or approval of the first party shall not be deemed to waive or render unnecessary such party=s consent or approval to or of any subsequent similar acts by the other party. 13.20 Review by legal Counsel. Seller acknowledges that it has been advised to obtain the advice of legal counsel and Seller will not deny the enforceability of this Agreement as a result of the failure of Seller to obtain the advice of legal counsel. [SIGNATURES ON FOLLOWING PAGE] 32 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above-written. SELLER:JAMES T. HAWTHORNE AND DOROTHY L. HAWTHORNE, TRUSTEES OF THE HAWTHORNE FAMILY TRUST DATED MARCH 10, 1989 . yjames T. Hawthorn —^ ^i *&fr.y*A > xjaitftf,By: DorotnyA. Hawthorne BUYER:cm al Corporation Laude A. Lewis! of Carlsbad, a municipal corporation of the state of California CONSENT OF ESCROW AGENT The undersigned Escrow Agent hereby acknowledges that is has received a fully executed original or original executed counterparts of the foregoing Agreement and agrees to act as Escrow Agent thereunder and to be bound by and perform the terms thereof as such terms apply to Escrow Agent. Dated:(the AOpening of Escrow®) Escrow Agent: 33 By: Name: Title: 34 EXHIBIT AA@ Legal Description LOT 4 OF CARLSBAD TRACT NO. 80-33. IN THE CITY OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON APRIL 15, 1981 AS INSTRUMENT NO. 81: 115129 OF OFFICIAL RECORDS. EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF CARLSBAD BY DEED RECORDED DECEMBER 5, 2000 AS INSTRUMENT NO. 2000-0661459 AND RECORDED JULY 16, 2003 AS INSTRUMENT NO. 2003-848484 OF OFFICIAL RECORDS. ASSESSORS PARCEL NUMBER: 213-061028 35 EXHIBIT AB@ Assignment Agreement [attached] 36 ASSIGNMENT AGREEMENT This Assignment Agreement (AAgreement®) is entered into as of 2010 (the AEffective Date®), by and between JAMES T. HAWTHORNE AND DOROTHY L. HAWTHORNE, TRUSTEES OF THE HAWTHORNE FAMILY TRUST DATED MARCH 10, 1989, (collectively, the AAssignor®) and THE CITY OF CARLSBAD, a Public Agency (AAssignee®), with reference to the facts set forth below: RECITALS A. Assignor and Assignee have entered into that certain Purchase Agreement and Escrow instructions dated as of ftn^jiJt /3 , 2010 (APurchase Agreement®), whereby Assignor is selling to Assignee that certain real property situated in Carlsbad, California, and more particularly described on Exhibit AA@ attached hereto and incorporated herein (AProperty®). B. Concurrently with the conveyance of the Property from Assignor to Assignee pursuant to the terms and conditions of the Purchase Agreement, Assignor is assigning to Assignee all of Assignors interest in any licenses, permits, entitlements, approvals, plans, rights to develop, agreements with public agencies related to the Property (including, but not limited to, sewer and water agreements), school fee and/or mitigation agreements, and on and off -site improvements agreements (except those agreed in writing, by Buyer and Seller, to be excluded), any rights or privileges arising out of cash deposits, prepaid fees, development fee credits, sanitary sewer credits, water fee credits, utility fee credits, park fee credits, inspection fees, bonds or otherwise, any rights of reimbursements, agreements with adjacent property owners, or any other rights of reimbursement or development with respect to the Property, and civil engineering, architectural, landscape architectural, soils consultants and environmental reports and plans with respect to the Property (collectively, APermits®). NOW, THEREFORE, in consideration of the recitals set forth above, 37 and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as set forth below. 1. Assignor hereby assigns, transfers, grants and conveys to Assignee all of Assignors right, title and interest in and to the Permits. The assignment set forth in this Agreement is of all of the rights and benefits relating to the Permits. 2. Assignor covenants, warrants and represents that: 2.1 NO rights in or under the Permits have been assigned or transferred to any other person or entity other than as set forth in this Agreement. 2.2 Assignor has not done any act or omitted to do any act, nor will do or omit to do any act, which might prevent Assignee from, or limit Assignee in, realizing any of the benefits of any of the Permits. 2.3 Assignor is not prohibited under any agreement with any other person or any judgment or decree from executing and delivering this Agreement. 3. The provisions of this Agreement shall bind and benefit the legal representatives, successors and assigns of Assignor and Assignee. 4. The invalidity or unenforceability of any one or more provisions of this Agreement will not affect the validity or enforceability of any other provision. 5. No provision of this Agreement can be waived or modified, nor can any party be released from its obligations hereunder, except by writing executed by Assignee. 6. in the event any action shall be instituted between Assignor and Assignee in connection with this Agreement, the party prevailing in such action shall be entitled to recover from the 38 7. other party all of its costs of action, including, without limitation, attorneys^ fees and costs as fixed by the court therein. This Agreement may be executed in counterparts, each of which when taken together, shall constitute fully executed originals. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. ASSIGNOR: \ s f Tfeytfr' City of Carlsbad, a municipal corporation of tbe state of California 39 EXHIBIT AA@ TO EXHIBIT AB@ LEGAL DESCRIPTION LOT 4 OF CARLSBAD TRACT NO. 80^3, IN THE CITY OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON APRIL 15, 1981 AS INSTRUMENT NO. 81h 115129 OF OFFICIAL RECORDS. EXCEPTING THEREFROM THAT PORTION CONVEYED TO THE CITY OF CARLSBAD BY DEED RECORDED DECEMBER 5, 2000 AS INSTRUMENT NO. 2000-0661459 AND RECORDED JULY 16, 2003 AS INSTRUMENT NO. 2005-848484 OF OFFICIAL RECORDS. ASSESSOR=S PARCEL NUMBER: 215-061-28 40 EXHIBIT AC® FIRPTA [attached! 41 FIRPTA Affidavit Certificate of Non-Foreign Status (U.S. Transferor) CERTIFICATE OF TRANSFEROR OTHER THAN AN INDIVIDUAL (FIRPTA Affidavit) Section 1445 of the internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not reuired upon the disposition of a U.S. real property interest by (ATransferor®), the undersigned hereby certifies the following on behalf of Transferor: 1. Transferor is not a foreign person, foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and income Tax Regulations); 2. Transferors U.S. social security or tax indentification number is ; and 3. Transferors address is £*, Transferor understands that this certificate may be disclosed to the internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury, I declare that I have examined this certificate and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have the authority to sign this document on behalf of Transferor. Dated: . 42 NOTICE TO TRANSFEREE: You are required by law to retain this Certificate until the end of the fifth taxable year following the taxable year in which the transfer takes place and to make it available to the Internal Revenue Service if requested during that period. 43 Exhibits 09 THIS MAP WAS PffPMfD FOR ASSESSMENT PURPOSES ONLY. NO LKBUTY IS ASSl*e> fOB THE ACORACY OF THE DATA SHOWN. ASSESSOR 5 PARCELS WAY NOT COMPLY WITH LOCAL SUBOWSDN OB BUILDI* OHDMANCE5. 4.40 AC X^^-^^rS 213-06 r-aoo1 7/06/04 JGRO CHANGES BLK Ojbl OLD 3 *fzi aa &{» 20 25 NEW /-2(7 2//22 23 ^<ay^ss 27428 29-34 YR Bi 67 97 S&i 95 01 05 CUT 3i 170} /Sit </&&• <vs& 't$%. 99 cc 1* NO ACCESS 2065 Camino Vida Roble APN 213-061-28 / 3.08 Gross Acres SAN DIEGO COUNTY ASSESSOR'S MAP BOOK 213 PAGE 06 MAP 14829-CARLSBAD TCT NO CT 03-08 SHT. 2 MAPI0062-CARLSBAD TRACT NO 80-34 MAP I0061-CARLSBAD TRACT NO. 80-33 ROS I4523