HomeMy WebLinkAboutAgreement A-18-592 with Fancher Creek Properties, LLC.pdfSALE AND PURCHASE AGREEMENT
AND ESCROW INSTRUCTIONS
(County of Fresno -Fancher Creek Properties)
Agreement No . 18-592
THIS SALE AND PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
("Agreement") is made effective this __filh_ day of October 2018 ("Effective Date"), by and
between the County of Fresno , a political subdivision of the State of California ("Buyer"), and
Fancher Creek Properties, LLC , a California limited liability company ("Seller"). Seller and
Buy er are sometimes collecti vely referred to herein as the "Parties" and singularly as a "Party."
RECITALS:
This Agreement is made and entered into with respect to the following facts and
circumstances:
A. Seller is the owner of that certain real property located at the southwest corner of
East Harvey A venue and North Armstrong A venue in the City of Fresno , State of
California, more particularly described in Exhibit A and depicted in Exhibit A-1 ,
both attached hereto and by this reference made a part hereof ( collectively, the
"Real Property").
B. Buyer desires to purchase the Real Property from Seller, and Seller desires to sell
the Real Property to Buyer, pursuant to the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of their mutual covenants herein contained , and
for other valuable consideration, the sufficiency and receipt of which are hereby acknowledged ,
Seller and Buyer hereby agree as follows:
ARTICLE I
AGREEMENTTOPURCHASETHEREALPROPERTY
1.01 The Real Property. Subject to all of the terms, covenants , conditions, and
provisions of this Agreement, and for the consideration herein set forth, Seller
agrees to sell the Real Property to Buyer and Buyer agrees to buy the Real
Property from Seller on the Closing Date (as defined in Section 7.05
hereinbelow).
1.02 Purchase Price. The "Purchase Price" shall be the combination of One Million
Fi ve Hundred Thousand and No/100 Dollars ($1 ,500 ,000 .00) for the Real
Property in "AS-IS " condition subject to Buyer's inspection rights as prov ided in
Section 3 .02 hereinbelow, the total amount of the Design and Soft Cost
Reimbursement described in Section 2.04 below, and the cash sum of Five
Hundred Thousand and Noll 00 Dollars ($500 ,000) for Lance-Kashian &
Company 's ("Lance-Kashian") internal administrative and office expenses in
{0036 1/00 10//541214 .DO C)
1
{00361/0010//541214.DOC}
2
connection with the Design Agreements and the Project for the period of March
2014 through the anticipated Closing Date (the “Lance-Kashian
Reimbursement”). Under no circumstances whatsoever shall the Purchase Price
exceed Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00).
1.03 Buyer’s Deposit. The Buyer, no later than three (3) days after the opening of
“Escrow” (as defined in Section 7.01 hereinbelow), shall make a good faith
refundable deposit of Twenty Five Thousand and No/100 Dollars ($25,000.00)
(“Deposit”) at Old Republic Title at its office at 7451 North Remington Avenue,
Suite 102, Fresno, California 93711, Attn: Donna Brown (“Escrow Holder”).
The Deposit shall be held in an interest bearing account for the benefit of the
Buyer. It is the intent of the Parties that the Deposit, together with interest
thereon, shall be applied to the Purchase Price of the Real Property at the close of
Escrow (as defined in Section 7.01 hereinbelow). In the event Buyer terminates
this Agreement for the purchase of the Real Property prior to the expiration of
Buyer’s Due Diligence Period (as defined in Section 3.02 hereinbelow), or, prior
to the Closing Date as provided herein this Agreement, (1) the entire Deposit plus
accrued interest shall be refunded to Buyer. In the event Buyer does not terminate
this Agreement at the expiration of the Due Diligence Period and except as
expressly provided otherwise herein this Agreement, the Deposit shall be
nonrefundable to Buyer except in the event of a default by Seller.
1.04 Payment of the Purchase Price. The Purchase Price for the Real Property shall be
paid by Buyer to Seller as follows:
Buyer shall deposit into Escrow with Escrow Holder at least two (2) business
days before the Closing Date (as defined in Section 7.05 hereinbelow),
immediately available cash funds equal to the entire Purchase Price, less the
amount of the Deposit and interest on the Deposit, plus Buyer’s share of closing
costs pursuant to this Agreement.
ARTICLE II
DESIGN AGREEMENTS/ASSIGNMENTS AT CLOSING
2.01 Design Agreements and Soft Costs. The Parties acknowledge that Seller has
entered into architectural, engineering and design agreements (the “Design
Agreements”) listed in Exhibit B under the heading “Architect” in connection
with the intended development of the Real Property as a sheriff substation project
(the “Project”). The Parties further acknowledge that Seller has expended “soft”
costs and expenses in connection with the Design Agreements and the Project (the
“Soft Costs”). A list of the Design Agreements and Soft Costs and costs incurred
by Seller under the Design Agreements and for Soft Costs through the date hereof
are attached hereto as Exhibit B.
{00361/0010//541214.DOC}
3
2.02 Status of Design Agreements. Buyer acknowledges and agrees that the work
currently completed under the Design Agreements does not constitute permit-
ready plans and specifications for the Project and that Seller has no further
obligation to incur costs or authorize further work under the Design Agreements.
During the Due Diligence Period, Buyer will satisfy itself as to the current status
of the work completed under Design Agreements and any additional work
required to obtain permit-ready plans and specifications for the Project, without
representation or warranty of any kind by Seller. Buyer further acknowledges and
agrees that, after the Close of Escrow, Buyer will be required to expend additional
costs and expenses to persons/entities that have created and developed the Design
Agreements and other parties to obtain permit-ready plans and specifications for
the Project.
2.03 Assignment. At the Closing Date, Seller will assign its interest in the Design
Agreements to Buyer on an “as is” basis, without representation or warranty of
any kind and subject to the release provisions described in Section 3.05 below.
Buyer acknowledges that the assignment of some or all of the Design Agreements
may require the consent of the respective design professionals performing work
under the Design Agreements and that such consent may be conditioned on the
payment of additional charges and other terms. During the Due Diligence Period,
Buyer will make arrangements to obtain consent to the assignment of the Design
Agreements from the applicable design professionals on terms and conditions
acceptable to Buyer. Buyer’s completion of arrangements for obtaining consent to
the assignment of the Design Agreements by the design professionals is not a
condition to Buyer’s obligation under this Agreement: Buyer will complete such
arrangements to its satisfaction during the Due Diligence Period.
2.04 Design and Soft Cost Reimbursement. At the Closing and as a part of the
Purchase Price as provided in Section1.02, Buyer will reimburse Seller for (1) all
costs and expenses incurred by Seller in connection with the Design Agreements
and the Soft Costs (the “Design and Soft Cost Reimbursement”) and the Lance-
Kashian Reimbursement. Prior to the expiration of the Due Diligence Period,
Buyer and Seller will confirm the final total amount of the Design and Soft Cost
Reimbursement and provide written confirmation of such amount of Design and
Soft Cost Reimbursement to Escrow Holder. Seller acknowledges that Buyer
shall not be responsible for nor obligated to pay any costs or expenses for the
Design and Soft Cost Reimbursement exceeding the aforementioned written
confirmation of the final total amount provided to Escrow Holder prior to the
expiration of the Due Diligence Period. Under no circumstances whatsoever shall
the Design and Soft Cost Reimbursement exceed Five Hundred Thousand Dollars
($500,000).
{00361/0010//541214.DOC}
4
ARTICLE III
POSSESSION, PHYSICAL INSPECTION, AND
CONDITION OF THE REAL PROPERTY
3.01 Possession. Subject to Buyer paying the Purchase Price, and otherwise complying
with the terms and conditions of this Agreement which Buyer is required to
comply with up to the Closing Date, Buyer shall have the exclusive right to own
and possess the Real Property on and after the Closing Date.
3.02 Inspection of the Real Property. Buyer and Buyer’s agents, employees, and
representatives (collectively “Buyer’s Agents”) acknowledge that Buyer
commenced its inspection of the Real Property prior to Buyer’s execution of this
Agreement. Buyer shall have until forty-five (45) days after the date of execution
of this Agreement (ending date of the “Due Diligence Period”) to perform and
complete all remaining due diligence regarding the Real Property, including:
review of matters of title, inspection of the physical condition of the Real
Property, obtaining an acceptable appraisal of the Real Property, obtaining an
acceptable Phase I Environmental, termite report, and performing any other
inspections, reviewing any agreements relating to the Real Property, obtaining all
necessary approvals from the Board of Supervisors, approval of the Design
Agreements described in Section 2.01, completion of arrangements necessary to
obtain consent to assignment of the Design Agreements to Buyer from applicable
design professionals, and conducting other such due diligence as Buyer
determines appropriate. Buyer shall indemnify and defend Seller and its partners,
members, principals, representatives, affiliates, successors and assigns from any
claim, demand, loss, liability, cost or expense (including reasonable attorney’s
fees) and damages arising out of or resulting from Buyer’s or Buyer’s consultant’s
entry on the Real Property or the conduct of any testing or studies on the Real
Property, and Buyer shall repair any damage to the Real Property caused by such
entry or inspection. At any time during the Due Diligence Period, at Buyer’s sole
discretion, Buyer shall have the right to terminate this Agreement without cause
and to cancel said Escrow with no further obligation or offset on written notice to
Seller and Escrow Holder prior to the expiration of the Due Diligence Period.
Upon Buyer’s termination of this Agreement and cancellation of Escrow, the
Deposit plus any accrued interest thereon, shall be immediately refunded to Buyer
(less Buyer’s share, herein, of any required fees to Escrow Holder).
3.03 Documents and Materials. Within five (5) calendar days after the Effective Date,
Seller shall make available to Buyer copies of the current real property tax bill for
the Real Property, the Design Agreements, and any surveys, engineering studies,
plans, soil reports, maps, plans, zoning or other third-party reports or studies
relating to the Real Property, in each case to the extent they are in Seller’s
possession or Seller’s consultants’ possession (the “Documents and Materials”)
excluding however attorney-work product and any of Seller’s internal
organizational or operational materials. Seller may provide the Documents and
Materials in electronic form or via Dropbox. Seller makes no representation or
{00361/0010//541214.DOC}
5
warranty concerning the adequacy or accuracy of the Documents and Materials.
The Documents and Materials have been furnished as an accommodation to
Buyer solely for the purpose of assisting Buyer in conducting its due diligence, a
part of which is Buyer's independent determination as to the reliability and
completeness of the information contained therein, and Buyer's independent
determination of all other due diligence items relevant to Buyer.
3.04 “AS-IS” PURCHASE. SUBJECT ONLY TO THOSE REPRESENTATIONS
AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN
SECTION 5.01 HEREIN, BUYER SHALL TAKE TITLE TO THE REAL
PROPERTY, IN ITS PRESENT PHYSICAL CONDITION AND ON AN
“AS IS” AND “WHERE IS” BASIS, WITH ALL FAULTS, DEFECTS AND
DEFICIENCIES, WHETHER KNOWN OR UNKNOWN, IT BEING
UNDERSTOOD THAT SELLER IS NOT MAKING ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER TO BUYER
AS TO ANY MATTER RELATING TO THE DESIGN AGREEMENTS,
INCLUDING, WITHOUT LIMITATION, THE STATUS OF WORK
COMPLETED UNDER THE DESIGN AGREEMENTS AND/OR
ADDITIONAL DESIGN WORK WHICH MAY BE REQUIRED FOR THE
DEVELOPMENT OF THE PROJECT, THE CONTENTS OF THE
DOCUMENTS AND MATERIALS, TO THE EXTENT NOT PREPARED
BY SELLER, THE PHYSICAL CONDITION OF THE REAL PROPERTY,
INCLUDING WITHOUT LIMITATION, THE STRUCTURAL
SOUNDNESS THEREOF, HABITABILITY, MERCHANTABILITY, OR
FITNESS OF THE REAL PROPERTY, OR ANY PORTION THEREOF,
FOR ANY PARTICULAR USE OR PURPOSE BY BUYER, WHETHER
OR NOT SUCH PROPOSED USE OR PURPOSE HAS BEEN
COMMUNICATED TO SELLER OR IS DESIRED BY SELLER, NOR IS
SELLER MAKING ANY REPRESENTATION OR WARRANTY
WHATSOEVER AS TO THE PRESENCE, ABSENCE OR PROXIMITY
ON, UNDER, IN, OR NEAR THE REAL PROPERTY OF ANY
HAZARDOUS, TOXIC, CARCINOGENIC OR OTHERWISE HARMFUL
SUBSTANCES, OR SEISMIC FAULTS OR FLOOD HAZARDS, NOR IS
SELLER MAKING ANY REPRESENTATION OR WARRANTY
WHATSOEVER AS TO WHETHER OR NOT SUCH PROPERTY
COMPLIES OR DOES NOT COMPLY WITH ANY LAWS,
REGULATIONS, ORDINANCES, RELATED TO THE CONDITION,
USES OR OCCUPANCY THEREOF, NOR IS SELLER MAKING ANY
REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE
DESIGN AGREEMENTS OR THE DOCUMENTS AND MATERIALS.
SELLER SHALL NOT BE LIABLE FOR ANY LOSS, DAMAGE
(INCLUDING CONSEQUENTIAL DAMAGE) OR DIMINUTION OF
VALUE OF ANY KIND OR NATURE CAUSED TO THE REAL
PROPERTY, DIRECTLY OR INDIRECTLY, WHETHER OR NOT SUCH
LOSS, DAMAGE (INCLUDING CONSEQUENTIAL DAMAGE) OR
DIMINUTION OF VALUE WAS DI SC OVERED BEFORE OR AFTER
THE CLOSING DATE.
BUYER A CKNOWLEDGES THAT B UYE R HAS SPECIFICALLY READ
AND UNDERSTOOD, AND A GREES TO ALL OF THE PRO VI SIONS OF
TIDS SECTION 3.04:
3 .05 Release. E ffective as of the Closing Date and excluding only Seller 's express
representations and warranties hereunder, Buyer fully and forever waives ,
releases, acquits and discharges Seller from (a) any and all claims , actions, causes
of action , demands , rights, suits or legal or administrative proceedings, whether
direct or indirect, known or unknown, foreseeable or unforeseeable, which Buyer
now has or that may arise in the future related to or associated with the Design
Agreements, including, without limitation, the current status of work performed
under the Design Agreements and/or additional design work which may be
required for the development of the Project, (b) the contents of the Documents
and Materials, to the extent such Documents and Materials were not prepared by
Seller, and ( c) the matters described in Section 3 .04 above.
The releases contained herein are applicable to Seller 's partners , members ,
representatives , officers, directors, shareholders, employees, representatives ,
consultants, agents , attorneys , successors , assigns and affiliates.
B ials
ARTICLE IV
CONDITION OF TITLE TO THE REAL PROPERTY
4.01 Condition of Title to the Real Property. Seller shall convey to the Buyer fee title
to the Real Property, subject only to (i) the terms and conditions of this
Agreement, and (ii) the following exceptions (the "Permitted Exceptions"):
(a) The easements and right-of-way for public roads , public utilities and
underground pipelines that are of record.
(b) The lien for property taxes , assessments , fees and charges that are a sse ssed
but not yet delinquent, provided that all such tax es , assessments, fees and
charges accrued as of the Closing Date shall be apportioned to and borne
by Seller.
( c) All other ex ceptions to title reflected on the Preliminary Title Report
attached hereto as Exhibit C (the "Preliminary Title Report"), pursuant
{00361/00 10//5412 14 .DOC}
6
{00361/0010//541214.DOC}
7
to Section 4.02(a) hereinbelow and which exceptions Buyer accepts
pursuant to the terms of such Section 4.02(a).
4.02 Title Insurance.
(a) Buyer acknowledges its receipt of the Preliminary Title Report. Buyer
shall notify Seller in writing within twenty (20) days after the Effective
Date of this Agreement of any objections to the Preliminary Title Report.
Buyer’s failure to provide written notice of its objections to title to Seller
within said twenty (20)-day period shall conclusively be deemed Buyer’s
approval of the Preliminary Title Report. Seller shall have ten (10) days
after Buyer’s notice (if any) to provide Buyer with written notice of its
election to cure or not cure such objections. Seller’s failure to provide
written notice to Buyer within ten (10) days shall be deemed Seller’s
election not to cure Buyer’s objections. In the event Seller notifies (or is
deemed to have notified) Buyer that Seller is unable or unwilling to cure
such objections within said ten (10)-day period, then Buyer shall have ten
(10) days thereafter to elect to either (i) waive Buyer’s objections and
proceed with the transaction contemplated under this Agreement, or
(ii) terminate this Agreement. In the event Buyer elects to terminate this
Agreement, both Parties will be relieved of all obligations and duties
whatsoever hereunder without liability (excluding Buyer’s indemnity
obligations under Section 3.02), and Buyer will be entitled to the refund of
the Deposit plus any accrued interest thereon less one half of the escrow
cancellation fees.
(b) At the Closing Date and as a condition to Buyer’s obligation to purchase
the Real Property, Escrow Holder shall issue and deliver to Buyer, its
standard coverage ALTA Owner’s Policy of Title Insurance insuring title
to the Real Property subject to the Permitted Exceptions and with liability
in the amount of the Purchase Price applicable to the Real Property (the
“Title Policy”). Buyer shall bear the cost of the ALTA policy premium
over and above the cost of a standard CLTA Owner’s policy, including the
cost of an ALTA survey necessary to issue the ALTA Extended Owner’s
policy.
(c) Buyer shall cause Escrow Holder to issue a Final Title Report, with only
Permitted Exceptions, dated as of the Closing Date.
ARTICLE V
COVENANTS, WARRANTIES, AND REPRESENTATIONS
5.01 Covenants, Warranties and Representations of Seller. Seller hereby makes the
following covenants, representations and warranties and acknowledges that
Buyer’s execution of this Agreement has been made and Buyer’s acquisition of
{00361/0010//541214.DOC}
8
the Real Property will be made in material reliance by Buyer on these covenants,
representations and warranties:
(a) Authority. As to Seller, no authorization, approval, filing, consent,
qualification, registration, or other order of the State of California or
authority or agency thereof, or other state or federal governmental
authority or agency, or of any parent company, or affiliate company, is
required for the valid authorization, execution, delivery and performance
of this Agreement. Further, each individual executing this Agreement on
behalf of Seller represents and warrants that he or she is duly authorized to
execute this Agreement on behalf of Seller.
(b) No Violation. Neither this Agreement nor anything provided to be done
hereunder violates or will violate any contract, agreement or instrument
whatsoever, including without limitation any laws, regulations, or policies
relating to any financing, grant or award agreement or instrument, to
which Seller is a party, bound or obligated thereto.
(c) Governmental Violations. To the best of Seller’s knowledge, Seller has
received no written notice of any pending, threatened or unresolved
violations of City of Fresno, County, State, or Federal building, zoning,
fire, or health codes or ordinances, or any other governmental law,
regulation, rule or policy affecting Seller and concerning the Real
Property.
(d) Eminent Domain. To the best of Seller’s knowledge, Seller has no actual,
current knowledge of any pending or threatened proceedings in eminent
domain or otherwise that would affect the Real Property.
(e) Litigation. To the best of Seller’s knowledge, Seller has no actual, current
knowledge of any actions, suits, claims, legal proceedings pending or
threatened against Seller involving or affecting the sale of the Real
Property to Buyer, at law or in equity, before any court, administrative
forum or governmental agency.
(f) Encumbrances. Seller has not entered into any agreement with any third
parties regarding the sale, lease, management, repair, improvement, or any
other matter affecting the Real Property, other than the Design
Agreements, that would be binding on Buyer or the Real Property.
(g) Performance. Seller shall timely perform and comply with all of Seller’s
covenants and agreements contained herein, and shall satisfy all conditions
contained herein, that Seller is required to perform, comply with or satisfy
under this Agreement.
{00361/0010//541214.DOC}
9
(h) Known Inaccurate Representations. If Buyer becomes aware that any of
the representations contained in this Section 5.01 are not true and correct
as of the Closing Date (“Known Inaccurate Representations”), then
Buyer may, at its option, (i) waive such misrepresentations and close this
transaction, or (ii) unless Seller cures such misrepresentation to Buyer’s
reasonable satisfaction prior to the scheduled Closing Date, terminate this
Agreement by written notice thereof to Seller and to Escrow Holder in
which event the Deposit plus accumulated interest shall be returned to
Buyer and the Parties shall have no further right or obligation whatsoever
hereunder. The Parties intend that Buyer’s right to terminate as stated
herein this section 5.01 (h) shall supersede anything to the contrary
whatsoever in this Agreement. Buyer hereby acknowledges and agrees
that, upon the Closing of Escrow, any claim of Buyer relating to any
Known Inaccurate Representations shall be automatically waived in full
by Buyer.
(i) Person By Which Knowledge is Measured. For purposes of
Section 5.01(a)-(h), where knowledge of the Seller is referenced, it shall
mean the actual present knowledge of Mr. Edward M. Kashian, Mr. Sal
Gonzales and Mr. Thomas G. Richards, without independent investigation.
5.02 Covenants, Warranties and Representations of Buyer. Buyer hereby makes the
following covenants, representations and warranties and acknowledges that
Sellers’ execution of this Agreement has been made and Sellers’ sale of the Real
Property will be made in material reliance by Sellers on these covenants,
representations and warranties:
(a) Authority. The person(s) executing this Agreement on behalf of Buyer has
been duly authorized by the County of Fresno Board of Supervisors to
enter into and bind Buyer to the terms and conditions of this Agreement.
(b) Litigation. To the best of Buyer’s knowledge, Buyer has no actual, current
knowledge of any actions, suits, claims, legal proceedings pending or
threatened in writing against Buyer involving the purchase of the Real
Property from Seller, at law or in equity, before any court, administrative
forum or governmental agency.
(c) No Prospective Violations. To the best of Buyer’s knowledge, Buyer has
no current, actual knowledge, that the execution and delivery of this
Agreement violates or will violate any contract, agreement or instrument,
or loans or financing agreements to which Buyer is a party or bound.
(d) Performance. Buyer shall timely perform and comply with all covenants
and agreements herein, and shall satisfy all conditions, that Buyer is
required to perform, comply with or satisfy under this Agreement.
{00361/0010//541214.DOC}
10
5.03 Survival. The representations and warranties of the Parties shall survive the close
of Escrow and shall not be merged into the Grant Deed.
ARTICLE VI
CONDITIONS PRECEDENT
6.01 Conditions Precedent to Seller’s Obligation to Perform. Seller’s obligation to
perform as set forth herein is hereby expressly conditioned on satisfaction of each
and every one of the following conditions precedent:
(a) Buyer shall have timely and fully performed each of the acts to be
performed by it hereunder, including without limitation depositing the
Purchase Price, and Buyer’s share of the Closing Costs (as defined in
Section 7.04 hereinbelow) into Escrow (as defined in Section 7.01
hereinbelow) with Escrow Holder prior to Buyer’s respective deadlines
provided in Section 1.04 and Section 7.02(b) herein.
(b) Each of Buyer’s representations and warranties set forth in Section 5.02
herein shall be true at the time of executing this Agreement, and as of the
Closing Date, as if affirmatively made at that time.
The foregoing conditions are solely for the benefit of Seller, any or all of which
may be waived in writing by Seller in Seller’s sole discretion.
6.02 Conditions Precedent to Buyer’s Obligations to Perform. Buyer’s obligation to
perform as set forth herein is expressly conditioned on the satisfaction of each and
every one of the following conditions precedent:
(a) Seller shall have timely and fully performed every act to be performed by
it hereunder, including without limitation, deposit into Escrow with
Escrow Holder the Grant Deed in a form acceptable to Buyer.
(b) Each of the representations and warranties of Seller contained in
Section 5.01 and in any provision herein shall be true at the time of
executing this Agreement, and as of the Closing Date, as if affirmatively
made at that time.
(c) Escrow Holder shall issue the Title Policy as set forth in Section 4.02(b)
herein in the condition described in Sections 4.01 and 4.02 hereinabove.
(d) Buyer did not terminate Escrow, in its sole discretion, prior to the
expiration of the Due Diligence Period as provided in Section 3.02.
The foregoing conditions are solely for the benefit of Buyer, any or all of which
may be waived in writing by Buyer in Buyer’s sole discretion.
{00361/0010//541214.DOC}
11
6.03 Failure or Waiver of Conditions Precedent. In the event that any of the conditions
set forth above in Sections 6.01 and 6.02 herein are not fulfilled or waived in
writing by the applicable Party on or before the Closing Date, this Agreement
shall terminate and all rights and obligations hereunder of each Party shall be at
an end, provided however, Seller and Buyer shall be obligated to pay their
respective shares of any Escrow cancellation fees. Seller or Buyer may elect, at
any time or times prior to the Closing Date, to waive in writing the benefit of any
of their respective conditions set forth in Sections 6.01 and 6.02 above, as
applicable. In any event, the Parties' consent as provided in this Section 6.03 up
to the Closing Date shall waive any remaining unfulfilled conditions up to the
Closing Date, provided however, such waiver shall not be deemed to waive any
subsequently discovered breach of any representation, warranty, or covenant
made by either Party to this Agreement.
ARTICLE VII
ESCROW
7.01 Establishment of Escrow. Upon the Effective Date of this Agreement, the Parties
shall promptly open escrow (the “Escrow”) with Escrow Holder to provide for
Seller’s conveyance of the Real Property to Buyer as provided herein. Prior to the
Closing Date, a duplicate of this fully-executed Agreement (or Counterparts
thereof) shall be deposited with Escrow Holder and shall constitute escrow
instructions to Escrow Holder concerning this transaction. Escrow Holder shall
notify the Buyer and Seller, in writing, of the date of “Opening of Escrow.”
7.02 Deposits Into Escrow. The Parties shall make the following deposits into Escrow
with Escrow Holder:
(a) Seller’s Deposits. Seller shall deposit into Escrow with Escrow Holder
two business days prior to the Closing Date: (i) an executed and
acknowledged original grant deed (the “Grant Deed”) for the Real
Property to be drawn by Escrow Holder prior to closing and in the form
attached hereto as Exhibit D; (ii) Seller’s assignment of the Design
Agreements; and (iii) as necessary, Seller’s share of the Closing Costs (as
that term is defined in Section 7.04 herein.
(b) Buyer’s Deposits. Buyer shall deposit the following into Escrow with
Escrow Holder, prior to their respective deadlines provided herein:
(i) A Preliminary Change in Ownership Report; and
(ii) Buyer’s share of the Closing Costs (as that term is defined in
Section 7.04 herein), at the same time that Buyer is required to
deposit the funds for the Purchase Price into Escrow with Escrow
Holder, pursuant to Section 1.04 hereinabove.
{00361/0010//541214.DOC}
12
(c) Title Report (Buyer’s Deposit). Buyer shall cause the Escrow Holder to
deposit the Final Title Report, dated as of the Closing Date, into Escrow,
according to the requirements of this Agreement.
7.03 Title Insurance. At the Closing Date, Escrow Holder shall issue, effective as of
that date, the Title Policy as set forth in Section 4.02 herein.
7.04 Costs and Expenses. The Parties agree that any and all of the Closing costs
(collectively, the “Closing Costs”) shall be borne by Sellers and Buyer as
follows:
(a) Sellers shall bear the base cost of the CLTA Preliminary Title Report.
(b) Buyer shall pay the premium costs for an ALTA policy and any
endorsements which Buyer elects, in its discretion.
(c) Recording fees, transfer taxes, and Escrow Holder’s document preparation
fees shall be paid by Seller (100%).
(d) Escrow fees and any and all other costs necessary to achieve a successful
closing of Escrow, including the cost of the Final Title Report, shall be
paid 50% by Seller and 50% by Buyer.
(e) All property taxes, assessments, fees and other real property charges
accrued as of the Closing Date shall be prorated as of the Closing Date.
The basis for proration of taxes shall be the last known actual taxes and
assessments payable unless the current year tax amounts are known, and
shall be based on the assessed value as shown on the assessor’s record at
the time of settlement. Buyer and Seller agree to adjust the tax proration
post-Closing once the final tax bill for the tax year of Closing has been
received. This Section shall survive the Closing. Prorations shall be
calculated based on a thirty (30) day month and three hundred sixty (360)
day year
Each Party shall bear its own legal and accounting fees and costs.
7.05 Condition of Close; Closing Date. For valuable consideration, the sufficiency of
which is hereby acknowledged, and notwithstanding anything to the contrary
herein, or otherwise, the Parties acknowledge and agree that:
(a) Not later than forty-five (45) days after the execution of this Agreement
(“Outside Date”) if the Escrow has not been cancelled or terminated as
otherwise provided in this Agreement, the Buyer and Seller shall jointly
instruct the Escrow Holder that the conditions of the Closing Date have
been fulfilled in every respect (except as stated in this Section 7.05,
below) (generally referred to as the “Condition of Close Joint Escrow
Instructions”); and
{00361/0010//541214.DOC}
13
(b) Immediately upon issuing the Condition of Close Joint Escrow
Instructions the purchase and sale of the Real Property shall be deemed to
be in a condition of close, where Buyer and Seller shall be obligated,
whatsoever, to consummate the purchase and sale of the Real Property and
there shall be no further conditions on either part, except the Buyer and
Seller shall complete those actions stated in Sections 7.02, 7.03 and 7.04,
above. This subsection (b) is expressly made subject to section 6.03
herein.
Unless otherwise mutually extended by the Parties in writing, the Closing of
Escrow shall be fifteen (15) days following the expiration of the Due Diligence
Period (the “Closing Date”).
7.06 Closing Date. Unless otherwise mutually extended by the Parties in writing, this
transaction shall be consummated by the recordation of the Grant Deed in the
Official Records of the Fresno County Recorder’s Office (“Official Records”)
and disbursement of the Purchase Price (the “Close of Escrow”) on the date that
is not more than fifteen (15) days following the expiration of the Due Diligence
Period (the "Closing Date").
7.07 Conditions Precedent to the Close of Escrow. The Close of Escrow is hereby
expressly conditioned on the satisfaction or waiver in writing by the Party whose
performance is conditional thereon, of each of the conditions precedent contained
in Article VI herein.
7.08 Procedure for Closing of Escrow. Escrow Holder shall close the Escrow by doing
all of the following:
(a) Pay from funds deposited by Buyer and Seller, the Closing Costs to
Escrow Holder;
(b) After payment of the Closing Costs to Escrow Holder, pay the balance of
funds deposited by Buyer to the Seller. In its sole discretion, Seller may
elect to instruct Escrow Holder to pay a portion of the Purchase Price
identified as the Lance-Kashian Reimbursement directly to Lance-Kashian
or otherwise as instructed by Seller;
(c) Deliver a copy of Buyer’s and Seller’s closing statements for the Escrow
to the respective Parties, subject to Section 7.04 herein;
(d) Deliver to Buyer the original and two (2) copies of the Title Policy in the
form set forth in Section 4.02(b) herein, at the Closing of Escrow; and
(e) Deliver to Buyer the original of Seller’s assignment of the Design
Agreements.
(f) Deliver the Natural Hazard Disclosure Statement for the Real Property if
required by law.
7.09 LIQUIDATED DAMAGES. IF THE ESCROW FAILS TO CLOSE BY
THE SCHEDULED CLOSING DATE SET FORTH IN SECTION 7.05
SOLELY AS A RESULT OF BUYER'S DEFAULT FOLLOWING THE
ENDING DATE OF THE DUE DILIGENCE PERIOD IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT,
THE DEPOSIT SHALL BE RETAINED BY SELLER AS LIQUIDATED
DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AGAINST
BUYER, AT LAW OR IN EQUITY OR OTHERWISE. RETENTION OF
SUCH FUNDS BY SELLER AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENAL TY WITHIN THE
MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369,
BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND
1677 OF THE CALIFORNIA CIVIL CODE. BECAUSE OF THE
SPECIAL NATURE OF THE NEGOTIATIONS THAT PRECEDED
ACCEPTANCE BY SELLER OF BUYER'S OFFER TO ACQUIRE THE
REAL PROPERTY AND UNIQUE CHARACTER OF THE REAL
PROPERTY, THE PARTIES ACKNOWLEDGE THAT THE ACTUAL
DAMAGE THAT WOULD RESULT TO SELLER AS A RESULT OF
SUCH FAILURE WOULD BE EXTREMELY DIFFICULT TO
ESTABLISH. IN ADDITION, BUYER DESIRES TO LIMIT ITS
POTENTIAL LIABILITY TO SELLER IN THE EVENT THAT THIS
TRANSACTION SHALL FAIL TO CLOSE. THEREFORE, IN ORDER
TO INDUCE SELLER TO ACCEPT BUYER'S OFFER AND IN ORDER
TO INDUCE SELLER TOW AIVE ALL OTHER REMEDIES IT MAY
HA VE IN THE EVENT OF BREACH BY BUYER OF ITS OBLIGATIONS
HEREUNDER, BUYER HAS PROPOSED AND SELLER HAS
ACCEPTED THE CONCEPT OF LIQUIDATED DAMAGES AS SET
FORTH HEREIN, WITH THE AMOUNT OF THE PAYMENT TO
SELLER AND THE TIMING OF SUCH PAYMENT HAVING BEEN THE
SUBJECT OF CONSIDERABLE NEGOTIATIONS BETWEEN THE
PARTIES. BY SEPARATELY INITIALING BELOW, THE PARTIES
HEREBY ACKNOWLEDGE THEIR AGREEMENT CONCERNING
LIQUIDATED DAMAGES.
BUYER:~ SELLER: ~ll-l
7 .10 Seller's Default. If Seller is in default under this Agreement, other than as a result
of a default by Buyer, and such default is not cured within five (5) business days
of notice from Buyer specifying the default, then Buyer shall have the election to
undertake any of the following: (i) waive such default and proceed with the
Closing without adjustment in the Purchase Price or extension of the Closing
Date , (ii) commence an action for specific performance within sixty (60) days
following the event of such default by Seller, or (iii) terminate this Agreement by
written notice to Seller and recover the Deposit plus accrued interest thereon. In
no event shall Buyer have any right to maintain an action for consequential or
special damages for Seller's breach or default under this Agreement.
{00361/00 I 0//54 1214 .DOC }
14
{00361/0010//541214.DOC}
15
ARTICLE VIII
MISCELLANEOUS
8.01 Survival and Indemnity. Notwithstanding the Closing of Escrow, delivery of
instruments, conveyances of the Real Property, and payment of consideration
therefor, the Parties agree that the respective representations, warranties,
covenants, indemnities, and agreements made by each such Party pursuant to this
Agreement, shall survive the Closing of Escrow, and each Party agrees to
indemnify, defend, and hold the other harmless from and against any and all
claims, demands, losses, obligations, damages, liabilities, causes of action, costs,
and expenses (including, without limitation, attorney's, paralegals' and other
professionals' fees and costs) arising out of or in connection with a breach by the
indemnifying Party of any such representation, warranty, covenant, or agreement.\
8.02 No Brokers. Each Party represents to the other that it has not dealt with any
broker in such a manner as to incur any liability for any commission, fee or
compensation whatsoever in connection with this transaction, and each shall
indemnify the other against any loss, cost or expense resulting from any such
claim and shall hold the other harmless from any liability in connection with such
claim as may result from their dealing with brokers.
8.03 Notices. All notices under this Agreement shall be in writing, and be either
personally served, sent by (i) United States Postal Service, with postage prepaid,
or (ii) a nationally recognized overnight courier service, and addressed to the
respective Parties as follows:
To Buyer: COUNTY OF FRESNO
Internal Services Department (Van Ness Bldg.)
333 West Pontiac Way
Clovis, California 93612
Attn: Robert W. Bash, Director of
Internal Services/Chief Information Officer
Telephone: (559) 600-5800
To Seller: Fancher Creek Properties, LLC
Attn: Edward M. Kashian
265 East River Park Circle, Suite 150
Fresno, California 93720
Telephone: (559) 438-4800
or to such person or at such other place as either Party may from time to time
designate by written notice to the other Party.
Notice given in the foregoing manner shall be deemed sufficiently given for all
purposes hereunder on the date such notice was (i) personally delivered, deposited
{00361/0010//541214.DOC}
16
and postmarked with the United States Postal Service, or (ii) sent by a nationally
recognized overnight courier service, and such Party shall otherwise comply with
this Section 8.03 concerning the giving of notice in such manner, provided further
that, in any event, notices of changes of address or termination of this Agreement
shall not be effective until actual receipt.
Notices given hereunder shall not be amendments or modifications to this
Agreement.
8.04 Entire Agreement. This Agreement, including all exhibits hereto, and all related
documents referred to in this Agreement or in the related documents, and the
rights and obligations of the Parties hereto, constitutes the entire agreement
between Buyer and Seller with respect to the subject matter hereof and supersedes
all other Agreement negotiations, proposals, commitments, oral statements,
writings, advertisements, publications, and understandings of any nature
whatsoever unless expressly included in this Agreement.
8.05 Amendment. No provisions of this Agreement may be amended or modified in
any manner whatsoever except by an agreement in writing by duly authorized
representatives of both Parties.
8.06 Successors. The terms, covenants, and conditions of this Agreement shall be
binding upon and shall inure to the benefit of the heirs, executors, administrators,
and assignees of the respective Parties.
8.07 Attorney’s Fees and Costs. If any action or arbitration is filed to enforce or
interpret this Agreement (or to specifically enforce this Agreement as provided in
Section 7.10) then the prevailing party in such action shall be entitled to recovery
their attorneys’ fees and costs from the non-prevailing party.
8.08 Assignment.
(a) Buyer may not assign this Agreement, or transfer any of its rights or
obligations under this Agreement, or delegate any of its obligations under
this Agreement, without the prior express written consent of Seller.
(b) Any such assignment or attempted assignment, transfer or attempted
transfer, delegation or attempted delegation (in any such event whether
voluntary or by operation of law) and any conveyance or attempted
conveyance of, grant of rights in or attempted grant of rights in, transfer of
or attempted transfer (in any such event(s) whether voluntary or by
operation of law) of the Real Property, or any portion thereof, or title
thereto, or estate, ownership, or interest or right therein (by way of
example, but not limited to, a security interest, lien, encumbrance or deed
of trust) by Buyer (or anyone claiming by or through Buyer), without such
consent shall be null and void.
{00361/0010//541214.DOC}
17
(c) Tax-Deferred Exchange.
(i) If this transaction is consummated as an exchange by Seller, Buyer
agrees, upon request by Seller, to execute and deliver to Seller
such further documents and instruments in writing related only to
the Real Property which may be prepared by Seller and be
reasonably required to accomplish an Internal Revenue Code of
1986, as amended (“Code”), Section 1031 tax deferred exchange.
(ii) Buyer shall not be liable for the payment of Seller’s income taxes
or for the tax consequences, if any, to Seller as a result of the
exchange of the Real Property for Exchange Property. Under no
circumstances shall Buyer be required to (a) receive title to, or any
interest in, the property to be exchanged (the “Exchange
Property”), (b) execute any note or deed of trust or assume any
liability with respect to the Exchange Property, or (c) make any
warranty in regard to the Exchange Property.
(iii) In the event of an exchange as provided in (i) above (“Exchange”),
Buyer shall incur no additional costs, expenses or liabilities in this
transaction as a result of or connected with the Exchange, and
provided further that Buyer shall not be required to provide any
representations, covenants, or warranties to any third parties,
including the qualified intermediary or the Internal Revenue
Service in connection with the Exchange. Seller agrees to
indemnify, defend and hold Buyer harmless from any liability,
damages or costs, including reasonable attorney’s fees that may
arise from Seller’s (or the qualified intermediary’s) or Buyer’s
activities in connection with the Exchange, and, notwithstanding
anything to the contrary in this Agreement, this subsection
(iii) shall survive the termination of this Agreement. In no event
shall Seller’s election to engage in an Exchange affect or otherwise
result in a delay of the Closing of Escrow or of the Closing Date as
set forth in this Agreement nor shall any such Exchange relieve a
Party of any of its duties or obligations under this Agreement
(iv) If an Exchange is not concluded, and Buyer is not in default, Seller
will sell and Buyer will purchase the Real Property on the Closing
Date in accordance with all provisions of this Agreement.
8.09 Governing Law. This Agreement, including all exhibits hereto, and the rights and
obligations of the Parties hereto, shall be governed in all respects, including
validity, interpretation, and effect, by the laws of the state of California. For
purposes of venue, the performance of this Agreement shall be deemed to be in
Fresno County, California. In the event of any litigation between the Parties
{00361/0010//541214.DOC}
18
arising out of or related to this Agreement, venue for such litigation shall only be
Fresno County, California.
8.10 Headings. The subject headings of the paragraphs of this Agreement are included
for purposes of convenience only and shall not affect the construction or
interpretation of any of the provisions herein.
8.11 Counterparts. This Agreement may be executed by the Parties in different
counterparts, all of which together shall constitute one agreement, even though all
Parties may not have signed the same document.
8.12 Time. Time is of the essence of this Agreement.
8.13 No Third-Party Beneficiaries. Notwithstanding anything stated to the contrary
herein, there shall not be any intended third-party beneficiaries of this Agreement
whatsoever.
8.14 Partial Invalidity. If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way, unless it would be unreasonable to do so in light of the
object of this Agreement as a whole.
[Signature Page Immediately Follows]
IN WITNESS WHEREOF , the Parties have executed this Agreement as of the date first
written above.
FANCHER CREEK PROPERTIES, LLC, a
California limited liability company
By: Kashian Enterprises, A Limited
Partnership
Its: Member
By: Lance-Kashian & Company, a
COUNTY OF FRESNO , a political subdivision
of the State of California
California corporation ATTEST:
Its: General Partner Bernice E. Seidel
~-_ _Qi""' _ & I/,,,. I_ ,.... At. • Clerk of the Board of Supervisors
B~. ~ County of Fresno, State of California
Edward M . Kashian By: ~~ ~
Its: Chief Executive Officer
By: Africa! Development, L.P., a California
limited partnership
Its: Member
Thomas G. Richar s, a · rust e of
the Thomas G. Richards Living Trust
dated September 7, 2005
Its: General Partner
{00361/00 10//541 2 14 .DO C}
19