HomeMy WebLinkAboutR 2026-002
RESOLUTION NO. 2026-002
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE AUTHORIZING THE CITY MANAGER TO EXECUTE A RIGHT
OF WAY ACQUISITION AND REIMBURSEMENT AGREEMENT WITH
ARROYO GRANDE COMMUNITY HOSPITAL IN ITS EXISTING FORM
SUBJECT TO FINAL NEGOTIATIONS
WHEREAS, the City must acquire right of way (ROW) from three corners of the Halcyon
Road and Fair Oaks Avenue intersection to accommodate the roundabout as part of the
Halcyon Complete Streets Project (PW 2023-015); and
WHEREAS, the City needs to acquire 2,292 square feet from Arroyo Grande Community
Hospital (AGCH) to certify ROW needs have been met to stay incompliance with timely
use of funds restrictions and request allocation for construction funds as part of the SB1
grant funding Halcyon Complete Streets (PW 2023-015); and
WHEREAS, the City seeks to streamline project delivery by executing a reimbursement
agreement for costs associated with the City undergrounding utilities for AGCH to fulfill
AGCH’s 2017 Emergency Room Expansion Condition of Approval #68 requiring
undergrounding of existing and proposed utilities along Halcyon Road; and
WHEREAS, the City has prepared a Purchase and Sale Agreement (Exhibit A) to
facilitate the ROW acquisition and reimbursement agreement .
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby:
1. All recitals above are true and correct and incorporated herein.
2. The City Council authorizes the City Manager to execute a ROW acquisition
and reimbursement agreement with AGCH in its existing form subject to final
negotiations, as approved by the City Manager in consultation with the City
Attorney.
3. The City Council of Arroyo Grande finds that adopting a Resolution authorizing
the City Manager to execute a ROW acquisition and reimbursement agreement
with AGCH in its existing form subject to final negotiations, as approved by the
City Manager in consultation with the City Attorney , is not a project subject to
the California Environmental Quality Act (“CEQA”) because it has no potential
to result in either a direct, or reasonably foreseeable indirect, physical change
in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3),
15378.)
RESOLUTION NO. 2026-002
PAGE 2
On motion of Council Member Guthrie, seconded by Council Member Maraviglia, and on
the following roll call vote, to wit:
AYES: Council Members Guthrie, Maraviglia, Secrest, Loe, and Mayor Ray Russom
NOES: None
ABSENT: None
The foregoing Resolution was passed and adopted this 13th day of January, 2026.
CAREN RAY RUSSOM, MAYOR
ATTEST:
JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:
MATTHEW DOWNING, CITY MANAGER
APPROVED AS TO FORM:
ISAAC ROSEN, CITY ATTORNEY
RESOLUTION NO. 2026-002
PAGE 3
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EXHIBIT A
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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS – ROW ACQUISITION
This Purchase and Sale Agreement and Joint Escrow Instructions – ROW Acquisition (this
“Agreement”) is made as of , 2025, by and between DIGNITY HEALTH,
a California nonprofit public benefit corporation (“Seller”), and the CITY OF ARROYO
GRANDE, a California municipal corporation (“Buyer”). Buyer and Seller are sometimes
individually referred to herein as “Party” and collectively as “Parties.” This Agreement shall be
effective as of the date, this Agreement has been approved by Buyer’s governing body and signed
by all Parties (“Effective Date”).
RECITALS
A. Seller is the owner in fee of certain real property located within the City of Arroyo
Grande, County of San Luis Obispo, California, and more particularly described in Exhibit “A”
attached hereto and incorporated by reference (“Property”).
B. Portions of the Property are needed for construction of the Halcyon Complete
Streets Capital Improvement Project (PW-2023-15), which includes the installation of a
roundabout at the intersection of Halcyon Road and Fair Oaks Ave. (“Project”).
C. In connection with the Project, Buyer desires to:
(i) purchase a portion of Property in fee for right of way purposes (“ROW
Portion”) as is more particularly described in Exhibit “B” attached hereto, incorporated
hereto by reference,
(ii) obtain a temporary construction easement in a portion of the Property (“TCE”)
as described in Exhibit “C” and incorporated herein by reference, and
(iii) obtain a temporary access easement in a portion of the Property (“TAE”) as
described in Exhibit “D,” attached hereto and incorporated herein by reference.”
Reference herein to the ROW Portion shall include all of Seller’s right, title and interest in
and to any and all improvements, rights-of-way, utility rights, entitlements, claims or other benefits
in any way connected with the ROW Portion. Seller desires to sell the ROW Portion to Buyer,
and grant the TCE and TAE to Buyer, upon the terms and provisions set forth herein.
NOW, THEREFORE, in consideration of the above facts and for the covenants and agreements
contained herein, the Parties hereto agree as follows:
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TERMS
ARTICLE 1. PURCHASE AND SALE.
1.1 Property. Seller agrees to sell the ROW Portion to Buyer, and Buyer agrees to
purchase the ROW Portion from Seller, upon the terms and conditions set forth herein.
1.2 Purchase Price. The total purchase price for the ROW Portion, the TCE, and the
TAE is ONE HUNDRED FIVE THOUSAND FIVE HUNDRED EIGHTY-FOUR DOLLARS
AND 50/100 CENTS ($105,584.50) (the “Purchase Price”), calculated as follows:
1.2.1 The ROW Portion acquisition: $72,484.50;
1.2.2 The TCE and TAE: $33,180
1.2.3 The Purchase Price constitutes full and complete just compensation for all
property rights acquired by Buyer and for any and all claims of Seller against Buyer arising out of
or relating to the acquisition of the Property and the Project, including, without limitation, claims
for inverse condemnation, pre-condemnation damages, interest, attorneys’ fees, costs, and any
severance damages to any remainder.
ARTICLE 2. DUE DILIGENCE.
2.1 Due Diligence Period; Inspection and Access.
2.1.1 Due Diligence Period. The “Due Diligence Period” means the period
beginning on the Effective Date and ending at 5:00 p.m. on the date which is thirty (30) days
thereafter.
2.1.2 Access to Information and the ROW Portion. Buyer shall conduct its
investigation of the ROW Portion during the Due Diligence Period at no cost to Seller. This
investigation (“Due Diligence Investigation”) may include, at Buyer’s option: right of access and
a physical inspection of the ROW Portion and all improvements thereon, including soil, geological
and other tests, engineering evaluations of the mechanical, electrical, and other systems and review
of any plans; review of all governmental matters affecting the ROW Portion , including zoning,
environmental and building permit and occupancy matters; review and verification of all financial
and other information previously provided by Seller relating to the operation of the ROW Portion;
review of the condition of title to the ROW Portion , and review of such other matters pertaining
to an investment in the ROW Portion as Buyer deems advisable. In addition, Buyer and its
representatives shall have the right of access during reasonable business hours to all files, books
and records maintained by Seller or its agents (including, without limitation, all of the Additional
Documents to be made available to Buyer at the ROW Portion pursuant to Section 2.3) relating to
the ROW Portion, including the right to copy the same. Buyer and its representatives shall also
have the right of access to the ROW Portion during reasonable business hours to conduct its
investigation of the physical condition of the ROW Portion. Seller agrees that the rights granted
to Buyer herein and the results of its Due Diligence Investigation shall not relieve Seller of any
obligations Seller may have under any other provisions of this Agreement, or under other
documents entered into concurrently herewith, or implied by law, nor shall they constitute a waiver
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by Buyer of the right to enforce any of the same. Seller shall cooperate with Buyer in its due
diligence activities and provide access to the ROW Portion, its records, or provide information so
long as it is within Seller’s control.
2.2 Delivery of Preliminary Documents. Within 5 business days after the Effective
Date, Seller shall deliver to Buyer, at Seller’s expense, all of the documents described in the
remaining subsections of this Section 2.2 (collectively, the “Preliminary Documents”) in Seller’s
possession or control.
2.2.1 Title Report and Survey. Buyer has received a Condition of Title
Guarantee, Guarantee No. FSLC-512500721, dated December 1, 2025 (the “Title Guarantee”)
issued by Fidelity National Title Insurance (the “Title Company”), covering the ROW Portion.
Buyer, at Buyer’s sole cost, may obtain an as-built survey of the ROW Portion (the “Survey”)
prepared by a certified land surveyor in accordance with the most recent American Land Title
Association standards, certified by such surveyor to Buyer and the Title Company in a form
acceptable to the Title Company for the purpose of deleting any survey exception from the Title
Policy described in Section 3.1.3.
2.2.2 Additional Documents and Information. Within five(5) days of the
Effective Date Seller shall deliver or make available to Buyer (a) any soils reports on the ROW
Portion in Seller’s possession or control, including any reports on compliance with recommended
soils work; (b) any structural, mechanical, environmental, or geological reports in Seller’s
possession or control concerning the ROW Portion; (c) real property tax bills; (d) any licenses,
permits, or certificates required by governmental authorities in connection with the ROW Portion;
and (e) all written inspection or similar reports received by Seller within three (3) years prior to
the Effective Date from insurance companies, governmental agencies, or other persons or entities
requiring correction of any condition or modification or termination of any use of the ROW
Portion, together with Seller’s summary of any related oral reports and the present status of any
matters noted in such reports (collectively, the “Additional Documents”).
2.3 Approval/Disapproval of Due Diligence Investigations. Buyer shall approve or
disapprove the results of Buyer’s Due Diligence Investigation, in the exercise of Buyer’s sole
discretion, by written notice delivered to Seller no later than the expiration of the Due Diligence
Period. Buyer’s disapproval shall terminate this Agreement unless, at the time Buyer gives notice
of its disapproval, Buyer also notifies Seller of Buyer’s desire to enter into negotiations with Seller
for the purpose of reaching an accommodation concerning the disapproval. If Buyer so notifies
Seller and the parties have not reached a written agreement satisfactory to both of them regarding
the disapproval within 10 days after the date of the disapproval notice, Buyer, at its option, may
either (a) elect to terminate this Agreement by so notifying Seller and recover the amount of , or
(b) elect to proceed with the transactions contemplated by this Agreement notwithstanding its
earlier disapproval. If Buyer fails to deliver to Seller notice of its approval or disapproval of the
results of its Due Diligence Investigation, Buyer shall be deemed to have disapproved such results.
If Buyer elects to terminate the Agreement, Buyer shall return to Seller all of the Preliminary
Documents and Additional Documents previously delivered by Seller to Buyer within 5 business
days of such termination.
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2.4 Title Review.
2.4.1 Monetary Liens. At its expense, Seller shall remove all liens on the ROW
Portion at or prior to the Closing (collectively, “Monetary Liens”): (i) all delinquent taxes, bonds
and assessments and interest and penalties thereon (it being agreed that Seller shall not be required
to remove any non-delinquent taxes and assessments imposed by any governmental agency that
are paid with the property taxes for the ROW Portion); and (ii) all other monetary liens, including
without limitation all those shown on the Title Guarantee (including judgment and mechanics’
liens, whether or not liquidated, and mortgages and deeds of trust, with Seller being fully
responsible for any fees or penalties incurred in connection therewith).
2.4.2 Approval/Disapproval of Title Review. Buyer shall approve or disapprove
of the Title Guarantee, the Survey and any exceptions to title shown thereon (other than the
Monetary Liens) in the exercise of Buyer’s sole discretion, by the expiration of the Due Diligence
Period. If Buyer disapproves, Buyer may either (a) terminate this Agreement by giving Seller
written notice of termination or (b) give Seller a written notice (“Disapproval Notice”) identifying
the disapproved title matters (“Disapproved Title Matters”). With respect to any Disapproved
Title Matters, other than the Monetary Liens, Seller shall notify Buyer in writing within 5 days
after Seller’s receipt of the Disapproval Notice whether Seller will cause the Disapproved Title
Matters to be removed or cured at or prior to Closing. If Seller elects not to remove or cure all
Disapproved Title Matters, Buyer may, at its option: (i) subject to satisfaction of the other
conditions to Closing, close the purchase of the ROW Portion and take title subject to the
Disapproved Title Matters which Seller elects not to remove or cure; or (ii) terminate this
Agreement in accordance with Section 8.6.1.
2.4.3 Buyer’s Options. If any Disapproved Title Matters (including the Monetary
Liens) have not been removed at least 5 days prior to Closing or provision for their removal at the
Closing has not been made to Buyer’s satisfaction, Buyer may, at its option: (i) close the purchase
of the ROW Portion and take title subject to the Disapproved Title Matters which have not been
removed; (ii) close the purchase of the ROW Portion and cure or remove the Disapproved Title
Matters which have not been removed. Buyer may credit the costs of such cure or removal against
the Purchase Price by reducing the amount of cash payable by Buyer at the Closing, but only to
the extent such costs are expended to remove (A) Monetary Liens referred to in Section 2.5.1 or
(B) Disapproved Title Matters which Seller agreed to remove; or (iii) terminate this Agreement in
accordance with Section 8.6.1.
2.4.4 Failure to Disapprove. If Buyer fails to notify Seller of its approval or
disapproval of the Title Guarantee, the Survey or the exceptions shown thereon by the end of the
Due Diligence Period, then Buyer shall be deemed to have disapproved the same.
ARTICLE 3. CONDITIONS PRECEDENT.
3.1 Buyer’s Conditions. Buyer’s obligations under this Agreement are expressly
subject to the timely fulfillment of the conditions set forth in this Section 3.1 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole
or in part by Buyer by written notice to Seller.
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3.1.1 Due Diligence. Buyer having approved of the results of its Due Diligence
Investigation pursuant to Section 2.4;
3.1.2 Title Review. Buyer having approved of the results of its review of title
pursuant to Section 2.5.
3.1.3 Title Policy. Seller having caused the Title Company to deliver to Buyer
(a) an ALTA Standard Owner’s policy of title insurance, provided that Buyer may require an
ALTA Owner’s Policy if Buyer pays the incremental premium for ALTA Extended coverage
(“Title Policy”) (or at Buyer’s election a binder therefor) for the ROW Portion, or (b) the Title
Company’s irrevocable commitment to issue such policy of title insurance, (including such
coinsurance, reinsurance and endorsements as Buyer shall require), with liability equal to the
Purchase Price showing fee title to the ROW Portion vested in Buyer and subject only to: (i) the
matters and exceptions which were approved by Buyer pursuant to Section 3.5; and (ii) the
standard printed exceptions in the form of title policy called for (collectively, “Conditions of
Title”).
3.1.4 Performance of Covenants. Seller performing and complying in all material
respects with all of the terms of this Agreement to be performed and complied with by Seller prior
to or at the Closing.
3.1.5 Representations and Warranties. The representations and warranties of
Seller set forth in Article 4 being true and accurate on the Closing Date, as if made on such date.
3.1.6 Non-Foreign Certification. Seller having executed and delivered to Buyer
on or prior to the Closing Date a certification (the “Non-Foreign Certification”), substantially in
the form of Exhibit C.
3.1.7 California Certification. Seller having furnished the residency certification
required pursuant to Sections 18805 and 26131 of the California Revenue and Taxation Code
(“Form 593”) or having authorized Escrow Holder in writing to withhold from the Purchase Price
the amounts required to be withheld by such Sections.
3.2 Seller’s Conditions. Seller’s obligations under this Agreement are expressly
subject to the timely fulfillment of the conditions set forth in this Section 3.2 on or before the
Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole
or part by Seller by written notice to Buyer.
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3.2.1 Covenants. Buyer performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by Buyer prior to or at the
Closing.
3.2.2 Representations and Warranties. The representations of Buyer set forth in
Article 5 being true and accurate on the Closing Date, as if made on such date.
ARTICLE 4. SELLER’S REPRESENTATIONS AND WARRANTIES.
Subject to Buyer’s opportunity to conduct its Due Diligence Investigation of the
ROW Portion , Seller hereby makes the following representations and warranties to Buyer with
the understanding that each such representation and warranty is material and is being relied upon
by Buyer:
4.1 Compliance. The ROW Portion , and the operation thereof, are in compliance with
all applicable laws, ordinances, rules, regulations, judgments, orders, covenants, conditions,
restrictions, whether federal, state, local, foreign or private, and Seller has not received any notice
of any violation of the same. Seller has not received any request either formal or informal, oral or
written, that Seller modify or terminate any use of the ROW Portion . The zoning of the Property
permits the current use of the ROW Portion , and, there is no pending or to Seller’s knowledge,
contemplated rezoning. The ROW Portion complies with all applicable subdivision laws and all
local ordinances enacted thereunder and no subdivision or parcel map not already obtained is
required to transfer the Property to Buyer.
4.2 Documents. All of the Preliminary Documents and the Additional Documents
which have been delivered or made available to Buyer pursuant to Article 2, and all other
documents delivered to Buyer by or on behalf of Seller (a) are true, correct and complete copies
of what they purport to be, (b) represent truly the factual matters stated therein, (c) are in full force
and effect, (d) have not been modified, except as set forth therein and (e) do not omit any
information required to make the submission thereof accurate and complete in all material respects.
4.3 Taxes and Condemnation. There are no presently pending or, contemplated special
taxes or assessments which will affect the ROW Portion. There are no presently pending or, to
Seller’s knowledge, contemplated proceedings to condemn or demolish the ROW Portion or any
part of it.
4.4 Licenses. Seller has all required licenses, permits (including, without limitation,
all building permits and occupancy permits), easements and rights-of-way which are required in
order to continue the present use of the ROW Portion. Seller has no knowledge of any law or
regulation of any governmental authority having jurisdiction which might require the ROW
Portion to be improved beyond its present state or which might restrict the use and enjoyment of
the ROW Portion in the manner it is presently being used and enjoyed.
4.5 Contracts/Leases/Occupancy Rights. There are no agreements or obligations to
which Seller is party or, to Seller’s knowledge, by which it or the ROW Portion is bound which
may affect the current use of the Property, nor are there any current leases, occupancy or operating
agreements in force. No party has a right to occupancy, tenancy, or a license to use or enter the
ROW Portion.
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4.6 Litigation. There are no actions, suits, proceedings, judgments, orders, decrees or
governmental investigations pending or threatened against the ROW Portion or Seller which could
affect the ROW Portion or the purchase, use or enjoyment thereof by Buyer.
4.7 Agreements with Governmental Authorities. There are no agreements with
governmental authorities, agencies, utilities or quasi-governmental entities which affect the ROW
Portion except those agreements which are identified in the Title Guarantee and those matters
which are disclosed by the Survey.
4.8 Hazardous Materials.
4.8.1 Definitions. For purposes of this Agreement:
(a) “Environmental Law(s)” means the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et
seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 et. seq., the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq.,
[The Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. H&S Code Sections 25249.5-
25249.13), the Carpenter-Preseley-Tanner Hazardous Substance Account Act (Cal. H&S Code
Sections 25300 et seq.), and the California Water Code Sections 1300, et seq.], as said laws have
been supplemented or amended to date, the regulations promulgated pursuant to said laws and any
other federal, state or local law, statute, rule, regulation or ordinance which regulates or proscribes
the use, storage, disposal, presence, cleanup, transportation or Release or threatened Release into
the environment of Hazardous Material.
(b) “Hazardous Material” means any substance which is (i)
designated, defined, classified or regulated as a hazardous substance, hazardous material,
hazardous waste, pollutant or contaminant under any Environmental Law, as currently in effect or
as hereafter amended or enacted, (ii) a petroleum hydrocarbon, including crude oil or any fraction
thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) asbestos, (vi) flammable explosives,
(vii) infectious materials or (viii) radioactive materials.
(c) “Release” means any spilling, leaking, pumping, pouring, emitting,
discharging, injecting, escaping, leaching, dumping or disposing into the environment of any
Hazardous Material (including the abandonment or discarding of barrels, containers, and other
receptacles containing any Hazardous Material).
4.8.2 Representations. Except as otherwise disclosed in Schedule 4.10.2:
(a) The ROW Portion and all existing uses and conditions of the ROW
Portion are in compliance with all Environmental Laws, and Seller has not received any written
notice of violation issued pursuant to any Environmental Law with respect to the ROW Portion or
any use or condition thereof.
(b) Neither Seller nor any other present or former owner of the ROW
Portion has used, handled, stored, transported, released or disposed of any Hazardous Material on,
under or from the ROW Portion in violation of any Environmental Law.
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(c) There is no Release of any Hazardous Material existing on, beneath
or from or in the surface or ground water associated with the ROW Portion.
(d) All required permits, licenses and other authorizations required by
or issued pursuant to any Environmental Law for the ownership or operation of the ROW Portion
by Seller have been obtained and are presently maintained in full force and effect.
(e) There exists no writ, injunction, decree, order or judgment
outstanding, nor any lawsuit, claim, proceeding, citation, directive, summons or investigation
pending or, to Seller’s knowledge, threatened pursuant to any Environmental Law relating to (i)
the ownership, occupancy or use of any portion of the ROW Portion by Seller or occupant or user
of any portion of the ROW Portion or any former owner of any portion of the ROW Portion, (ii)
any alleged violation of any Environmental Law by Seller or occupant or user of any portion of
the Property or any former owner of any portion of the ROW Portion or (iii) the suspected
presence, Release or threatened Release of any Hazardous Material on, under, in or from any
portion of the ROW Portion.
(f) There are no above-ground or underground tanks located on the
ROW Portion used or formerly used for the purpose of storing any Hazardous Material.
4.9 Title to the Property. Seller has good and marketable title to the ROW Portion,
subject to the Conditions of Title. There are no outstanding rights of first refusal or first look,
options to purchase, rights of reverter, or claim of right relating to the transfer or sale of the ROW
Portion or any interest therein. To Seller’s knowledge, there are no unrecorded or undisclosed
documents or other matters which affect title to the ROW Portion. No person holding a security
interest in the Property or any part thereof has the right to consent or deny consent to the sale of
the ROW Portion as contemplated herein, and Seller has the right to pay off such person and to
remove all such liens as of the Closing Date. Seller has enjoyed the continuous and uninterrupted
quiet possession, use and operation of the ROW Portion.
4.10 Seller’s Authority. Seller has the requisite power and authority to own the ROW
Portion. The execution, delivery and performance of this Agreement by Seller have been duly and
validly authorized by all necessary action and proceedings, and no further action or authorization
is necessary on the part of Seller (or its board of directors or shareholders) in order to consummate
the transactions contemplated herein. This Agreement and the other documents executed by Seller
in connection herewith are legal, valid and binding obligations of Seller, enforceable in accordance
with their respective terms. Neither the execution and delivery of this Agreement by Seller, nor
performance of any of its obligations hereunder, nor consummation of the transactions
contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the
terms and conditions of the organizational documents pursuant to which Seller was organized, or
any indenture, mortgage, deed of trust, agreement, undertaking, instrument or document to which
Seller or any affiliate thereof is a party or is bound, or any order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction over Seller.
4.11 Zoning. Seller has received no written notice from any governmental agency that
the ROW Portion is not in compliance with zoning requirements and laws.
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4.12 Foreign Person. Seller is not a “foreign person” within the meaning of Section
1445(f) of the Internal Revenue Code.
4.13 Inspections. Schedule 4.13 accurately describes (a) all inspections of the ROW
Portion by any governmental agency or insurance company occurring within three (3) years prior
to the Effective Date, (b) all matters which were noted by such governmental agency or insurance
company as requiring correction, requesting or recommending modifications or termination of
uses of the ROW Portion and (c) the present status of each such noted matter.
4.14 Misstatements and Omissions. Neither the representations and warranties made by
Seller in this Article 4 nor elsewhere in this Agreement contain any untrue statement or any
omission of a material fact. Seller has no documents in its possession, nor has any knowledge, that
omits material facts related to the property or which would contradict or negate any of its
representations contained in this Agreement.
ARTICLE 5. BUYER’S REPRESENTATIONS AND WARRANTIES.
Buyer makes the following representation and warranties to Seller with the
understanding that each such representation and warranty is material and is being relied upon by
Seller:
5.1 Buyer’s Authority. The execution, delivery and performance of this Agreement by
Buyer have been duly and validly authorized by all necessary action and proceedings, and no
further action or authorization is necessary on the part of Buyer in order to consummate the
transactions contemplated herein.
5.2 No Conflict. Neither the execution nor delivery of this Agreement by Buyer, nor
performance of any of its obligations hereunder, nor consummation of the transactions
contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the
terms and conditions of the organizational documents pursuant to which Buyer was organized, or
any agreement to which Buyer is a party or is bound, or any order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction over Buyer.
5.3 Disclaimer of Representations. Buyer has made no, and explicitly disclaims any,
representation or warranty, which are not explicitly set forth herein, including, without limitation,
with respect to the future use of the ROW Portion by or on behalf of Buyer. Seller acknowledges
and agrees, to the extent the Closing hereunder occurs, that Buyer shall have the right, in its sole
and absolute discretion to utilize, improve, dispose of, or develop the ROW Portion in the manner
in which Buyer deems appropriate. Seller further acknowledges that neither this Agreement nor
any other document contemplated hereby shall operate as a restriction on Buyer’s use of the ROW
Portion from and after the Closing.
ARTICLE 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
6.1 Survival of Warranties. Buyer and Seller agree that each representation and
warranty, covenant by the respective parties contained herein or made in writing pursuant to this
Agreement are intended to and shall be deemed made as of the date of this Agreement or such
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writing and again at the Closing, shall be deemed to be material, and unless expressly provided to
the contrary shall survive the execution and delivery of this Agreement, the Deed and the Closing.
6.2 Notice of Changed Circumstances. If either party becomes aware of any fact or
circumstances which would render false or misleading a representation or warranty made by such
party, then it shall immediately give notice of such fact or circumstance to the other party, but such
notice shall not relieve any party of any liabilities or obligations with respect to any representation
or warranty.
ARTICLE 7. SELLER’S PRECLOSING COVENANTS.
Seller shall comply with the covenants contained in this Article 7 from the Effective
Date through the Closing Date unless Buyer consents otherwise in writing. Buyer may grant or
withhold any such consent requested by Seller in Buyer’s sole discretion.
7.1 Contracts and Documents. Seller shall not, without Buyer’s approval, not to be
unreasonably withheld or delayed, (a) amend or waive any right under any Preliminary Document
or Additional Document, or (b) enter into any material agreement of any type affecting the ROW
Portion that would survive the Closing Date.
7.2 Insurance. Seller shall maintain or cause to be maintained in full force and effect
its present insurance policies for the ROW Portion .
7.3 Compliance with Obligations. Seller shall fully and timely comply with all
obligations to be performed by it under the Service Contracts, the other Preliminary Documents,
the Conditions of Title and all permits, licenses, approvals and laws, regulations and orders
applicable to the ROW Portion.
7.4 No Transfers. Seller shall not sell, encumber or otherwise transfer any interest in
all or any portion of the ROW Portion, or agree to do so.
7.5 Termination of Occupancy Rights. Seller hereby covenants, at its sole cost and
expense, to terminate any leases, licenses or occupancy rights such that Seller can deliver exclusive
use and possession of the ROW Portion to Buyer at Closing free of any lease, license or occupancy
rights including, without limitation, Seller.
7.6 Maintenance. At its sole cost and expense, Seller shall operate and maintain the
ROW Portion such that on the Closing Date the ROW Portion shall be in at least as good a
condition and repair as on the Effective Date, reasonable wear and tear excepted. Seller shall not
make any material alterations to the ROW Portion, without Buyer’s prior consent.
7.7 Best Efforts. Seller shall use its best efforts to cause the conditions set forth in
Section 3.1 to be satisfied by the Closing Date, and Seller shall not take or permit any action that
would result in any of the representations and warranties set forth in Article 5 becoming false or
incorrect.
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ARTICLE 8. CLOSING.
8.1 Time. Provided all conditions set forth in Article 3 have been either satisfied or
waived, the parties shall close this transaction (the “Closing”), on the date which is thirty (30) days
after the expiration of the Due Diligence Period (the “Closing Date”), as such date may be
extended by the provisions of Article 9.
8.2 Escrow. This Article 8, together with such additional instructions as [Insert escrow
information], Attention: (“Escrow Holder”), shall reasonably request and the
parties shall agree to, shall constitute the escrow instructions to Escrow Holder. If there is any
inconsistency between this Agreement and the Escrow Holder’s additional escrow instructions,
this Agreement shall control unless the intent to amend this Agreement is clearly stated in said
additional instructions. Buyer and Seller shall cause Escrow Holder to execute and deliver a
counterpart of this Agreement to each of them. If the Title Company does not serve as the Escrow
Holder, the Title Company shall provide a letter to Buyer, in form and content acceptable to Buyer,
pursuant to which the Title Company accepts responsibility and liability for the acts and omissions
of Escrow Holder in discharging Escrow Holder’s obligations hereunder, including, without
limitation, any acts or omissions of Escrow Holder relating to the Title Company’s commitment
to issue the Title Policy, the receipt, recordation or delivery of any documents placed into escrow,
and the receipt and disbursement of any funds placed into escrow.
8.3 Seller’s Deposit of Documents and Funds Into Escrow. Seller shall deposit into
escrow on or before Closing the following documents:
8.3.1 A duly executed and acknowledged TCE in the form attached as Exhibit
“F”;
8.3.2 A duly executed and acknowledged TAE in the form attached as Exhibit
“G”;
8.3.3 A duly executed and acknowledged grant deed, in the form acceptable to
Buyer, conveying the ROW Portion to Buyer (“Grant Deed”) in the form attached as Exhibit “E”;
8.3.4 An executed Reimbursement Agreement in the form attached as Exhibit
“H”
8.3.5 Seller’s Non-foreign Certification;
8.3.6 Such additional documents, including written escrow instructions
consistent with this Agreement, as may be necessary or desirable for conveyance of the ROW
Portion in accordance with this Agreement; and
8.3.7 Form 593.
8.4 Deliveries Outside of Escrow. Notwithstanding Section 8.3, Seller and Buyer may
elect to deliver the documents described in Section 8.3 outside of escrow (other than documents
which are to be recorded) by giving Escrow Holder a joint written notice of such election,
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specifying the documents which will be so delivered outside of escrow. Upon receipt of such
notice, Escrow Holder shall have no further obligation concerning such specified documents.
8.5 Buyer’s Deposit of Documents and Funds. Buyer shall deposit into escrow:
8.5.1 The Purchase Price in accordance with the provisions of Article 1, plus or
minus prorations as provided in Section 8.8, by electronic transfer of federal funds to Escrow
Holder, on or before the Closing Date;
8.5.2 An executed Reimbursement Agreement in the form attached as Exhibit
“H”
8.5.3 Certificate of Acceptance attached to the Grant Deed, TAE, and TCE; and
8.5.4 Such additional documents, including written escrow instructions
consistent with this Agreement, as may be necessary or desirable for conveyance of the ROW
Portion in accordance with this Agreement.
8.6 Default, Termination and Remedies.
8.6.1 Buyer’s Termination. This Agreement shall automatically terminate
without further notice or action by Buyer upon the occurrence of any of the following events,
provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing
contained in Section 3.1 has not been satisfied or waived by Buyer by the Closing Date; or (b)
Buyer having exercised its right to terminate this Agreement pursuant to Section 2.4 (disapproval
of Due Diligence Investigation), Section 2.5 (disapproval of title) or Article 9 (damage or
condemnation). In such event, the parties shall have no further obligation to each other except for
those obligations that specifically survive the termination of this Agreement. If this Agreement
terminates as a result of Seller’s material breach of this Agreement, Buyer shall have all remedies
it may have hereunder or at law as a result of such occurrence, including the remedy of specific
performance.
8.6.2 Seller’s Termination. Provided that Seller is not then in material breach of
this Agreement, this Agreement shall automatically terminate without further notice or action by
Seller if any condition to Closing contained in Section 3.2 has not been satisfied or waived by
Seller by the Closing Date.
8.6.3 Release from Escrow. Upon termination of this Agreement pursuant to
Section 8.6.1 or 8.6.2, Escrow Holder shall promptly return to Buyer and Seller, respectively, all
documents and monies deposited by them into escrow without prejudice to their rights and
remedies hereunder.
8.6.4 Remedies.
(a) Buyer’s Remedies. If Seller breaches this Agreement, Buyer shall
be entitled to pursue all remedies permitted herein and by law, including the remedy of specific
performance. No termination of the escrow by Buyer following a breach by Seller shall be deemed
to waive such breach or any remedy otherwise available to Buyer.
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(b) Seller’s Remedies/Liquidated Damages. IF BEFORE THE CLOSE
OF ESCROW BUYER FAILS TO COMPLY WITH OR PERFORM BUYER’S OBLIGATIONS
UNDER THIS AGREEMENT AND (EXCEPT AS OTHERWISE PROVIDED IN
PARAGRAPH 9.6) DOES NOT CURE SUCH FAILURE WITHIN TEN BUSINESS DAYS
AFTER SELLER’S WRITTEN NOTICE OF SUCH FAILURE, THEN SELLER MAY
THEREAFTER: (I) TERMINATE THIS AGREEMENT; (II) RECEIVE AND RETAIN $2,500
AS LIQUIDATED DAMAGES IF SUCH DEFAULT OCCURS AFTER BUYER’S APPROVAL
PERIOD; AND (III) EXERCISE THE OTHER RIGHTS AND REMEDIES RESERVED BY
SELLER AS PROVIDED IN THIS PARAGRAPH. IN THE EVENT SELLER TERMINATES
THIS AGREEMENT BY REASON OF BUYER’S DEFAULT, BUYER AND SELLER SHALL
BE RELIEVED OF ANY FURTHER OBLIGATION TO EACH OTHER WITH RESPECT TO
THIS AGREEMENT AND THE PROPERTY EXCEPT FOR ANY OBLIGATIONS WHICH
EXPRESSLY SURVIVE. IT IS EXPRESSLY UNDERSTOOD AND AGREED BY BUYER
AND SELLER: THAT SELLER WILL INCUR SUBSTANTIAL DAMAGES AS A RESULT
OF ANY FAILURE BY BUYER TO COMPLY WITH OR PERFORM BUYER’S
OBLIGATIONS UNDER THIS AGREEMENT; THAT IT IS EXTREMELY DIFFICULT AND
IMPRACTICAL TO CALCULATE AND ASCERTAIN AS OF THE EFFECTIVE DATE OF
THIS AGREEMENT THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED IN SUCH
EVENT BY SELLER; AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE
EXTENT TO WHICH SELLER MAY BE DAMAGED BY BUYER’S DEFAULT IN LIGHT
OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER’S
ACTUAL DAMAGES AS A RESULT OF SUCH DEFAULT BY BUYER.
_________________ _________________
SELLER’S INITIALS BUYER’S INITIALS
(c) Waiver of Specific Performance. SELLER HEREBY WAIVES
THE RIGHT TO MAINTAIN AN ACTION FOR SPECIFIC PERFORMANCE OF BUYER’S
OBLIGATION TO PURCHASE THE PROPERTY AND SELLER AGREES THAT SELLER
CAN BE ADEQUATELY COMPENSATED IN MONEY DAMAGES IF BUYER FAILS TO
PURCHASE THE PROPERTY IN BREACH OF THIS AGREEMENT. SELLER
ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL
PART OF THE CONSIDERATION BEING GIVEN TO BUYER FOR ENTERING INTO THIS
AGREEMENT AND THAT BUYER WOULD BE UNWILLING TO ENTER INTO THIS
AGREEMENT IN THE ABSENCE OF THE PROVISIONS OF THIS PARAGRAPH.
_________________ _________________
SELLER’S INITIALS BUYER’S INITIALS
8.7 Closing.
8.7.1 When Escrow Holder has received all documents and funds identified in
Sections 8.3 and 8.5, has received notification from Buyer and Seller that all conditions to Closing
to be satisfied outside of escrow have been satisfied or waived and Title Company is irrevocably
committed to issue the Title Policy, then, and only then, Escrow Holder shall:
(a) Record the Grant Deed;
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(b) Record the TAE;
(c) Record the TCE;
(d) Cause the Title Company to issue the Title Policy to Buyer;
(e) To the extent not otherwise delivered to Buyer outside of escrow,
deliver to Buyer: (a) a conformed copy (showing all recording information thereon) of the Grant
Deed; (b)
(f) The Non-foreign Certification;
(g) Deliver the Purchase Price (as adjusted pursuant to Section 8.8) to
Seller;
8.7.2 Escrow Holder shall prepare and sign closing statements showing all
receipts and disbursements and deliver copies to Buyer and Seller and, if applicable, shall file with
the Internal Revenue Service (with copies to Buyer and Seller) the reporting statement required
under Section 6045(e) of the Internal Revenue Code.
8.8 Prorations. Subject to the other provisions of this Section 8.8, all receipts and
disbursements of the ROW Portion will be prorated as of 11:59 p.m. on the day immediately
preceding the Closing Date. Not less than five business days prior to the Closing, Seller shall
submit to Buyer for its approval a tentative prorations schedule showing the categories and
amounts of all prorations proposed, including all rents and operating expenses. Security deposits
shall be credited to Buyer from Seller proceeds. The parties shall agree on a final prorations
schedule prior to the Closing and shall deliver the same to Escrow Holder. If following the Closing
either party discovers an error in the prorations statement, it shall notify the other party and the
parties shall promptly make any adjustment required. The parties agree that any trailing bills that
pertain to the ROW Portion operations before the Closing Date, which are not available as of
Closing, may be presented to Buyer for proration and reimbursement up to forty five (45) days
after Closing. Failure to provide any bills by such date shall be a waiver by Seller of such
reimbursement and Buyer shall have no further obligation for any such bills and ROW Portion
expenses. This section 8.8 shall survive closing.
8.8.1 Property Taxes. General real estate taxes, personal property taxes, or any
other governmental tax or charge levied or assessed against the ROW Portion (collectively, the
“Taxes”), relating to the ROW Portion and payable during the year in which Closing occurs shall
not be prorated between Seller and Buyer in Escrow. Upon recordation of the Grant Deed, Buyer
will request cancellation of the real property taxes for the ROW Portion pursuant to California
Revenue and Taxation Code Section 4986. If current taxes have not yet been paid as of the Closing
Date, then at Closing Seller shall pay through Escrow or out of Seller’s proceeds, the full amount
of the installment applicable for the period in which Closing occurs. Seller shall be entitled to a
refund of any excess payment made to the taxing authority on account of the ROW Portion,
including any taxes paid by Seller and applicable to any period from and after the Closing Date.
The taxing authority will notify Seller of any refund due Seller resulting from the subject
acquisition after a review and any subsequent proration of the property tax assessment by the
county assessor. Seller retains the right, following close of escrow, to apply to the appropriate
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governmental authority/ies for refund of real property taxes pursuant to Revenue and Taxation
Code Section 5096.7 (or such other applicable law), and Buyer shall reasonably cooperate with
Seller’s efforts to obtain said refund.
8.9 Possession. Seller shall deliver exclusive right of way of the ROW Portion to Buyer
on the Closing Date, subject only to the Conditions of Title.
ARTICLE 9. DAMAGE, DESTRUCTION AND CONDEMNATION.
This Agreement shall be governed by the Uniform Vendor and Purchaser Risk Act
as set forth in Section 1662 of the California Civil Code as supplemented and modified by this
Article 9. Seller shall promptly notify Buyer in writing of any material damage to the ROW
Portion and of any taking or threatened taking of all or any portion of the ROW Portion. Within a
reasonable period of time after receipt of such notice, Buyer shall determine whether a material
part of the ROW Portion has been damaged or whether such taking or threatened taking has
affected or will affect a material part of the ROW Portion. As used herein, (a) the destruction of a
“material part” of the ROW Portion shall be deemed to mean an insured or uninsured casualty to
the Property having an estimated cost of repair which in the reasonable judgment of Buyer equals
or exceeds $200,000 and (b) a taking by eminent domain of a portion of the ROW Portion shall be
deemed to affect a “material part” of the ROW Portion if in the reasonable judgment of Buyer
the estimated value of the portion of the ROW Portion taken exceeds $200,000. Upon making its
determination, Buyer shall notify Seller in writing of the results of such determination. Buyer may
elect, by written notice delivered to Seller within 30 days after giving Seller notice of such
determination, to terminate this Agreement in accordance with Section 8.6.1 if a material part of
the Property has been damaged or if such taking has affected or will affect a material part of the
Property. If Buyer does not so terminate, (i) in the case of damage to a material part of the Property,
Seller shall assign to Buyer at the Closing its right to recover under any insurance policies covering
such damage and shall pay Buyer at the Closing the amount of the deductible, if any, and (ii) in
the case of a threatened or actual taking of a material part of the ROW Portion, Seller shall assign
to Buyer at the Closing Seller’s entire right, title and interest in the proceeds thereof. If between
the Effective Date and the Closing Date the ROW Portion suffers damage which is not material,
Seller shall repair such damage at its expense prior to the Closing, and the Closing Date shall be
extended for a reasonable period of time not to exceed 30 days to allow for completion of such
repairs. The Closing Date shall be extended as necessary to permit Buyer to exercise its rights
under this Article 9.
ARTICLE 10. REIMBURSEMENT AGREEMENT
10.1 Reimbursement Agreement. Concurrently with the consummation of this
transaction, Seller and Buyer shall enter into that certain Reimbursement Agreement dated as of
even date herewith (the “Reimbursement Agreement”), a copy of which is attached hereto as
Exhibit “H” and incorporated herein by this reference. The parties acknowledge and agree that the
Reimbursement Agreement sets forth the parties’ respective rights and obligations with respect to
Seller’s reimbursement of costs for certain underground utilities associated with the expansion of
Seller’s improvements located on the Property, and in connection with the Project. In the event of
any conflict between the terms of this Agreement and the Reimbursement Agreement, the terms
of this Agreement shall control with respect to the conveyance of the ROW Portion and the Parties’
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rights and obligations relating thereto, and the terms of the Reimbursement Agreement shall
control with respect to reimbursement matters.
ARTICLE 11. GENERAL.
11.1 Notices. All notices, demands, approvals, and other communications provided for
in this Agreement shall be in writing and shall be effective (a) when personally delivered to the
recipient at the recipient’s address set forth below; (b) five business days after deposit in a sealed
envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt
requested, addressed to the recipient as set forth below; or (c) one business day after deposit with
a recognized overnight courier or delivery service, addressed to the recipient as set forth below,
whichever is earlier. If the date on which any notice to be given hereunder falls on a Saturday,
Sunday or legal holiday, then such date shall automatically be extended to the next business day
immediately following such Saturday, Sunday or legal holiday. Email notices may be used for
convenience only, unless otherwise agreed by the parties in writing, and shall be deemed delivered
one (1) business day after delivery if sent after 5 pm, or received the same day if sent on a business
day between 8 am and 5 pm, and a duplicate shall be sent via USPS on the same day as the email.
The addresses for notice are:
SELLER: DIGNITY HEALTH
Attn: Ken Dalebout, Administrator
345 S Halcyon Road
Arroyo Grande, CA 93420
Phone:
Email: kenneth.dalebout@commonspirit.org
BUYER: CITY OF ARROYO GRANDE
Attn: Brian Pedrotti, Community Development Director
300 E. Branch Street
Arroyo Grande, CA 93420
Phone: (805) 473-5400
Email: bpedrotti@arroyogrande.org
With a copy to: Best Best & Krieger LLP
Attn: Isaac Rosen
300 S. Grand Avenue, 25th Floor
Los Angeles, CA
Telephone: (213) 787-2564
E-mail: isaac.rosen@bbklaw.com
Either party may change its address by written notice to the other given in the manner set forth
above.
11.2 Entire Agreement. This Agreement and the Schedules and Exhibits hereto contain
the entire agreement and understanding between Buyer and Seller concerning the subject matter
of this Agreement and supersede all prior agreements, including any previous letter of intent or
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terms, understandings, conditions, representations and warranties, whether written or oral, made
by Buyer or Seller concerning the ROW Portion or the other matters which are the subject of this
Agreement.
11.3 Amendments and Waivers. No addition to or modification of this Agreement shall
be effective unless set forth in writing and signed by the party against whom the addition or
modification is sought to be enforced. The party benefited by any condition or obligation may
waive the same, but such waiver shall not be enforceable by another party unless made in writing
and signed by the waiving party.
11.4 Invalidity of Provision. If any provision of this Agreement as applied to either party
or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or
unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible
by law) any other provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the court, or the validity or enforceability of this
Agreement as a whole.
11.5 References. Unless otherwise indicated, (a) all Article, Section, Schedule and
Exhibit references are to the articles, sections, schedules and exhibits of this Agreement, and (b)
all references to days are to calendar days. All the Schedules and Exhibits attached hereto are
incorporated herein by this reference. Whenever under the terms of this Agreement the time for
performance of a covenant or condition falls upon a Saturday, Sunday or California state holiday,
such time for performance shall be extended to the next business day. The headings used in this
Agreement are provided for convenience only and this Agreement shall be interpreted without
reference to any headings. The masculine, feminine or neuter gender and the singular or plural
number shall be deemed to include the others whenever the context so indicates or requires.
11.6 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts made and to be performed in
California.
11.7 Confidentiality and Publicity. Buyer is a public entity and as such, this Agreement,
upon its presentation for approval by City of Arroyo Grande’s City council at a duly called and
agendized public meeting, shall be subject to the Public Records Act and the Freedom of
Information Act. No press release or other public disclosure may be made by Seller or any of its
agents regarding Buyer’s intent for this ROW Portion this transaction without the prior consent of
Buyer.
11.8 Time. Time is of the essence in the performance of the parties’ respective
obligations under this Agreement.
11.9 Attorneys’ Fees. In the event of any legal or equitable proceeding to enforce any
of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or
misrepresentations in connection with any provision of this Agreement, the prevailing party in
such proceeding shall be entitled to recover its reasonable costs and expenses, including, without
limitation, reasonable attorneys’ fees and costs of defense paid or incurred in good faith.
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11.10 Assignment. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. However, Seller shall not have the right
to assign all or any portion of its interest in this Agreement without Buyer’s prior written consent.
Buyer shall have the right to assign all or any portion of its interest in this Agreement, or substitute
for itself a nominee, upon notice to Seller not later than three days prior to the Closing Date.
11.11 Further Assurances. Seller, at any time before or after Closing, shall, at its own
expense, execute, acknowledge and deliver any further deeds, assignments, conveyances and other
assurances, documents and instruments of transfer reasonably requested by Buyer and shall take
any other action consistent with the terms of this Agreement that may reasonably be requested by
Buyer for the purpose of transferring and confirming to Buyer, or reducing to Buyer’s possession,
any or all of the ROW Portion or otherwise carrying out the terms of this Agreement.
11.12 Purchase in Lieu of Eminent Domain. Buyer is a California municipal corporation
and has the powers of eminent domain pursuant to California Constitution Article 1, Section 19
and California Code of Civil Procedure 1230.010. Buyer has previously notified Seller in writing
of Buyer’s desire, and approval by Buyer’s governing body for Buyer, to acquire the ROW Portion
in connection with a contemplated public use. Buyer and Seller acknowledge that this Agreement
constitutes an acquisition of the ROW Portion by Buyer in lieu of eminent domain, and that Seller
is selling the ROW Portion to Buyer hereunder under threat of eminent domain within the meaning
of Section 1033 of the Internal Revenue Code and California Board of Equalization Property Tax
Rule 462.500. Seller acknowledges that execution of this Agreement does not constitute a waiver
of Buyer’s constitutional and statutory right to commence and maintain an eminent domain
proceeding in Superior Court: (1) to acquire the ROW Portion to address a defect in Seller’s ability
to convey clear and unencumbered title to Buyer; (2) to clear any additional recorded or unrecorded
encumbrances that may affect Buyer’s ability to own and possess the ROW Portion free of any
encumbrance, license, easement, property right and/or lien; or (3) in the event Seller refuses to
convey clear and unencumbered title to Buyer.
11.13 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement on any person other
than the parties to it and their respective permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge any obligation of any third person to any party hereto
or give any third person any right of subrogation or action over against any party to this Agreement.
11.14 Remedies Cumulative. The remedies set forth in this Agreement are cumulative
and not exclusive to any other legal or equitable remedy available to a party.
11.15 Commissions, Indemnity, Disclosure. Each party represents to the other party that
there is no broker representing such party in the current transaction, and that the representing party
has incurred no liability for any brokerage commission or finder’s fee arising from or relating to
the transactions contemplated by this Agreement. Seller shall be responsible for any broker
commission associated with this purchase. Each party hereby indemnifies and agrees to protect,
defend and hold harmless the other party from and against all liability, cost, damage or expense
(including without limitation attorneys’ fees and costs incurred in connection therewith) on
account of any brokerage commission or finder’s fee which the indemnifying party has agreed to
pay or which is claimed to be due as a result of the actions of the indemnifying party. This Section
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11.15 is intended to be solely for the benefit of the parties hereto and is not intended to benefit,
nor may it be relied upon by, any person or entity not a party to this Agreement.
11.16 Mutual Negotiations. This Agreement and the other documents contemplated by
this transaction are the product of mutual negotiations by the parties thereto and their counsel, and
no party shall be deemed the draftsperson of this Agreement or any other document or any
provision hereof or thereof or to have provided the same. Accordingly, in the event of any
inconsistency or ambiguity of any provision of this Agreement or any other document
contemplated by this Agreement, such inconsistency or ambiguity shall not be interpreted against
any party because of such party’s involvement in the drafting thereof.
11.17 Counterparts/Facsimile/PDF Signatures. This Agreement may be executed in
counterparts and when so executed by the parties, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument that shall be binding upon the
parties, notwithstanding that the parties may not be signatories to the same counterpart or
counterparts. The parties may integrate their respective counterparts by attaching the signature
pages of each separate counterpart to a single counterpart. In order to expedite the transaction
contemplated herein, facsimile or .pdf signatures may be used in place of original signatures on
this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or .pdf
document, are aware that the other party will rely on the facsimile or .pdf signatures, and hereby
waive any defenses to the enforcement of the terms of this Agreement based on the form of
signature.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
BUYER:
CITY OF ARROYO, a California municipal
corporation
Matthew Downing, City Manager
ATTEST:
By:
Jessica Matson, City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
Isaac Rosen, City Attorney
SELLER:
DIGNITY HEALTH,
a California nonprofit public benefit corporation
By
Name:
Its
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Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the
instructions contained therein.
Dated: ______________, 20___
By:
Name:
Title:
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EXHIBIT A
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Exhibit A-1
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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Exhibit B-1
EXHIBIT B
LEGAL DESCRIPTION AND DEPICTION OF FEE INTERESTS
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Exhibit B-2
65501.00115\44467391.3
EXHIBIT A
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Exhibit C-1
EXHIBIT C
LEGAL DESCRIPTION OF TCE INTEREST
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Exhibit C-2
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Exhibit D-1
EXHIBIT D
LEGAL DESCRIPTION OF TAE INTEREST
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Exhibit D-2
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Exhibit E-1
EXHIBIT E
FORM OF GRANT DEED
RECORDING REQUESTED BY
First American Title Company
AND WHEN RECORDED MAIL TO, AND
MAIL TAX STATEMENTS TO:
City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
ATTN: City Clerk
EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 006-391-046 (portion)
Grant Deed
The undersigned Grantor(s) declare(s): City of Arroyo Grande is exempt from property taxes
Documentary transfer tax is $0.00
Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.
Unincorporated area City of Arroyo Grande and
[The undersigned declares that this Grant Deed is exempt from Recording Fees pursuant to California Government Code Section 27383. The
undersigned declares that this Grant Deed is exempt from Documentary Transfer Tax pursuant to Revenue and Taxation Code Section 11922.]
FOR VALUE RECEIVED, DIGNITY HEALTH, a California nonprofit public benefit corporation
(“Grantor”), hereby grants to CITY OF ARROYO GRANDE, a California municipal corporation
(“Grantee”), a perpetual right-of-way in that certain real property situated in the City of Arroyo
Grande, County of San Luis Obispo, State of California, as described in Exhibit A, and depicted
on Exhibit B, attached hereto and incorporated herein by reference (“Property”).
IN WITNESS WHEREOF, Grantor has executed this Grant Deed as of ______________.
GRANTOR:
DIGNITY HEALTH,
a California nonprofit public benefit corporation
By:
Name:
Its:
65501.00115\44467391.3
Exhibit E-2
ACKNOWLEDGMENT
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF )
On _____________, 2025 before me,_________________________, Notary Public, personally
appeared________________________, who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
(seal)
65501.00115\44467391.3
Exhibit E-3
EXHIBIT “A”
TO
GRANT DEED
Legal Description
65501.00115\44467391.3
Exhibit E-4
65501.00115\44467391.3
Exhibit E-5
65501.00115\44467391.3
Exhibit E-6
CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the GRANT DEED dated
, 2025, from DIGNITY HEALTH, a California nonprofit public benefit corporation,
as Grantor thereunder, to the CITY OF ARROYO GRANDE a California municipal corporation,
as Grantee thereunder, is hereby accepted by the undersigned on behalf of the CITY OF ARROYO
GRANDE, pursuant to the authority conferred by Resolution No. _______, adopted by the CITY
OF ARROYO GRANDE City Council on ______________, and the Grantee consents to
recordation thereof by its duly authorized officer.
Dated: CITY OF ARROYO GRANDE, a California
municipal corporation
By:
Name: Matthew Downing
Its: City Manager
65501.00115\44467391.3
Exhibit F-1
EXHIBIT F
FORM OF TEMPORARY CONSTRUCTION EASEMENT
RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
ATTN: City Clerk
EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
APN: 006-391-046 (portion of) SPACE ABOVE THIS LINE FOR RECORDER'S USE
TEMPORARY CONSTRUCTION EASEMENT
For valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
DIGNITY HEALTH, a California nonprofit public benefit corporation (“Grantor”) hereby grants
to the CITY OF ARROYO GRANDE, a California municipal corporation (“Grantee”), its
employees, agents, contractors, subcontractors, successors, and assigns, a temporary, non-
exclusive construction easement (“TCE”) over, across, upon, under, and through a portion of
Grantor’s real property described in Exhibit A and depicted in Exhibit B (together, the “Easement
Area”), for the purpose of performing all work and activities necessary, incidental, or convenient
to the Halcyon Complete Streets Capital Improvement Project (the “Project”). Such work
includes, without limitation, the construction of a roundabout at the intersection of Halcyon Road
and Fair Oaks Avenue (the “Improvements”).
1. Term of Easement; Termination; Quitclaim. The TCE shall commence on the date
this instrument is recorded in the Official Records of the County of San Luis Obispo and shall
remain in effect until the completion of the Project, which is estimated to be thirty-six (36) months
from the recordation of this TCE, unless earlier terminated or extended by written agreement of
the Parties. Grantee may, in its sole discretion, extend the term of this TCE by written notice to
Grantor if Grantee determines that additional time is reasonably necessary to complete the Project.
Upon termination of this TCE, Grantee shall, upon Owner’s written request, execute and deliver a
notice of abandonment, quitclaim or similar instrument suitable for recordation to release the TCE.
2. Scope of Easement Rights. Grantee, and its employees, agents, consultants,
contractors, and subcontractors, shall have the right to enter upon and use the Easement Area for
all activities reasonably necessary, incidental, or convenient to the construction of the
Improvements in connection with the Project. Such activities include, without limitation:
i. temporary construction access;
ii. construction, installation, operation, and maintenance of temporary facilities,
staging and laydown areas, equipment, and material storage;
65501.00115\44467391.3
Exhibit F-2
iii. grading, excavation, shoring, compaction, backfilling, and installation of
utilities and appurtenances;
iv. installation and maintenance of temporary fencing, signage, barricades, and
traffic control measures; and
v. any other activities reasonably necessary to support the Project within or
adjacent to the Easement Area.
3. Limitations on Use by Grantor. Grantor hereby covenants and agrees, by and for
itself, and its successors and assigns, that Grantor shall keep the Easement Area clear from
buildings, structures, fences, explosives, excessive tree growth and shrubs, and other materials or
growths, whether permanent or temporary, and any other obstruction interfering or which may
interfere with the Easement Area and right-of-way by Grantee (each, a “Prohibited
Encroachment”). Grantee shall have the right to remove, at Grantor’s cost and expense, any
Prohibited Encroachment the Grantee deems, in Grantee’s sole discretion, is interfering or may
interfere with the use of the Easement Area or as Grantee deems necessary, in Grantee’s sole
discretion, to comply with applicable local, state, or federal laws and regulations. In the event
Grantee removes any Prohibited Encroachment as permitted in this Paragraph, Grantor shall pay
the cost thereof to Grantee, plus an administrative charge within thirty (30) days of Grantee’s
invoice therefor. As a condition of this grant of Easement and the Easement Area, Grantor’s use
and enjoyment of the Easement Area shall not hinder, conflict, or interfere with the exercise of the
Grantee’s rights hereunder. Grantor is expressly prohibited from adding, installing, or constructing
to the surface or subsurface of the Easement Area any improvement that will impede the Project
and Improvements.
4. Relocation. Grantor shall not relocate the Easement Area or any of the
Improvements located thereon without Grantee’s consent, which may be withheld in Grantee’s
sole discretion.
5. Binding Effect; Covenants Running with the Land. This TCE shall run with the
land and shall be binding upon and inure to the benefit of Grantor and Grantee, and their respective
successors and assigns.
6. Assignment. Grantee may assign or delegate its rights or obligations under this
TCE, in whole or in part, to any contractor, consultant, or service provider engaged by the Grantee
in connection with the Project, without notice to or consent of Grantor.
7. Execution in Counterparts. This TCE may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument. Signatures may be delivered electronically or by PDF and shall be deemed effective
as originals.
8. No Waiver. No waiver of any provision of this TCE shall be effective unless in
writing and signed by the waiving party. A party’s failure to enforce any provision shall not be
deemed a waiver of the right to enforce it later.
65501.00115\44467391.3
Exhibit F-3
9. No Possessory Interest; Not a Lease. This TCE does not grant Grantee any
possessory interest in the Easement Area or constitute a lease, license, or transfer of fee title.
Grantee’s rights are limited to the temporary construction easement expressly granted herein, and
such rights shall terminate automatically upon expiration or earlier termination of this Agreement.
10. Owner. Grantor covenants that it is the owner of the above-described Easement
Area and has full right, power, and authority to grant this TCE, and that the Easement Area is free
and clear of encumbrances and liens of whatsoever character except those recorded against the
Easement Area.
[SIGNATURES ON FOLLOWING PAGES]
65501.00115\44467391.3
Exhibit F-4
IN WITNESS WHEREOF, the undersigned have executed this Temporary Construction
Easement as of the date last written below.
GRANTOR:
DIGNITY HEALTH,
a California nonprofit public benefit corporation
Dated: _____________________
By: _______________________________________
Name: ____________________________________
Its: ______________________________________
65501.00115\44467391.3
Exhibit F-5
65501.00115\44467391.3
Exhibit F-6
EXHIBIT A
Legal Description of Temporary Construction Easement
65501.00115\44467391.3
Exhibit F-7
65501.00115\44467391.3
Exhibit F-8
EXHIBIT B
Depiction of Temporary Construction Easement
65501.00115\44467391.3
Exhibit F-9
CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the TEMPORARY
CONSTRUCTION EASEMENT dated , from DIGNITY HEALTH, a California
nonprofit public benefit corporation, as Grantor thereunder, to the CITY OF ARROYO GRANDE
a California municipal corporation, as Grantee thereunder, is hereby accepted by the undersigned
on behalf of the CITY OF ARROYO GRANDE, pursuant to the authority conferred by Resolution
No. _______, adopted by the CITY OF ARROYO GRANDE City Council on ______________,
and the Grantee consents to recordation thereof by its duly authorized officer.
Dated: CITY OF ARROYO GRANDE, a California
municipal corporation
By:
Matthew Downing
City Manager
65501.00115\44467391.3
Exhibit G-1
EXHIBIT G
FORM OF TEMPORARY ACCESS EASEMENT
RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
ATTN: City Clerk
EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
APN: 006-391-046 (portion)
SPACE ABOVE THIS LINE FOR RECORDER'S USE
TEMPORARY ACCESS EASEMENT
For valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
DIGNITY HEALTH, a California nonprofit public benefit corporation (“Grantor”) hereby grants
to the CITY OF ARROYO GRANDE, a California municipal corporation (“Grantee”), its
employees, agents, contractors, subcontractors, successors, and assigns, a temporary, non-
exclusive access easement (“TAE”) over, across, upon, under, and through a portion of Grantor’s
real property described in Exhibit A and depicted in Exhibit B (together, the “Easement Area”),
for the purpose of performing all work and activities necessary, incidental, or convenient to the
Halcyon Complete Streets Capital Improvement Project (the “Project”). Such work includes,
without limitation, the construction of a roundabout at the intersection of Halcyon Road and Fair
Oaks Avenue (the “Improvements”).
1. Term of Easement; Termination; Quitclaim. The TAE shall commence on the date
this instrument is recorded in the Official Records of the County of San Luis Obispo and shall
remain in effect until the completion of the Project, which is estimated to be thirty-six (36) months
from the recordation of this TCE, unless earlier terminated or extended by written agreement of
the Parties. Grantee may, in its sole discretion, extend the term of this TCE by written notice to
Grantor if Grantee determines that additional time is reasonably necessary to complete the Project.
Upon termination of this TCE, Grantee shall, upon Owner’s written request, execute and deliver a
notice of abandonment, quitclaim or similar instrument suitable for recordation to release the TCE.
2. Scope of Easement Rights. Grantor hereby grants to Grantee a temporary, non-
exclusive access easement for ingress and egress over the Easement Area to conduct activities
reasonably necessary, incidental, or convenient to the construction of the Improvements in
connection with the Project.
3. Limitations on Use by Grantor. Grantor hereby covenants and agrees, by and for
itself, and its successors and assigns, that Grantor shall keep the Easement Area clear from
buildings, structures, fences, explosives, excessive tree growth and shrubs, and other materials or
growths, whether permanent or temporary, and any other obstruction interfering or which may
65501.00115\44467391.3
Exhibit G-2
interfere with the Easement Area and right-of-way by Grantee (each, a “Prohibited
Encroachment”). Grantee shall have the right to remove, at Grantor’s cost and expense, any
Prohibited Encroachment the Grantee deems, in Grantee’s sole discretion, is interfering or may
interfere with the use of the Easement Area or as Grantee deems necessary, in Grantee’s sole
discretion, to comply with applicable local, state, or federal laws and regulations. In the event
Grantee removes any Prohibited Encroachment as permitted in this Paragraph, Grantor shall pay
the cost thereof to Grantee, plus an administrative charge within thirty (30) days of Grantee’s
invoice therefor. As a condition of this grant of Easement and the Easement Area, Grantor’s use
and enjoyment of the Easement Area shall not hinder, conflict, or interfere with the exercise of the
Grantee’s rights hereunder. Grantor is expressly prohibited from adding, installing, or constructing
to the surface or subsurface of the Easement Area any improvement that will impede the Project
and Improvements.
4. Relocation. Grantor shall not relocate the Easement Area or any of the
Improvements located thereon without Grantee’s consent, which may be withheld in Grantee’s
sole discretion.
5. Binding Effect; Covenants Running with the Land. This TAE shall run with the
land and shall be binding upon and inure to the benefit of Grantor and Grantee, and their respective
successors and assigns.
6. Assignment. Grantee may assign or delegate its rights or obligations under this
TAE, in whole or in part, to any contractor, consultant, or service provider engaged by the Grantee
in connection with the Project, without notice to or consent of Grantor.
7. Execution in Counterparts. This TAE may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument. Signatures may be delivered electronically or by PDF and shall be deemed effective
as originals.
8. No Waiver. No waiver of any provision of this TAE shall be effective unless in
writing and signed by the waiving party. A party’s failure to enforce any provision shall not be
deemed a waiver of the right to enforce it later.
9. No Possessory Interest; Not a Lease. This TAE does not grant Grantee any
possessory interest in the Easement Area or constitute a lease, license, or transfer of fee title.
Grantee’s rights are limited to the temporary construction easement expressly granted herein, and
such rights shall terminate automatically upon expiration or earlier termination of this Agreement.
10. Owner. Grantor covenants that it is the owner of the above-described Easement
Area and has full right, power, and authority to grant this TCE, and that the Easement Area is free
and clear of encumbrances and liens of whatsoever character except those recorded against the
Easement Area.
IN WITNESS WHEREOF, the undersigned have executed this Temporary Construction
Easement as of the date last written below.
65501.00115\44467391.3
Exhibit G-3
GRANTOR:
DIGNITY HEALTH
a California nonprofit public benefit corporation
Dated: _____________________
By: _______________________________________
Name: ____________________________________
Its: ______________________________________
65501.00115\44467391.3
Exhibit G-4
65501.00115\44467391.3
Exhibit G-5
EXHIBIT A
Legal Description of Temporary Construction Easement
65501.00115\44467391.3
Exhibit G-6
65501.00115\44467391.3
Exhibit G-7
EXHIBIT B
Depiction of Temporary Access Easement
65501.00115\44467391.3
Exhibit G-8
CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the TEMPORARY ACCESS
EASEMENT dated , from DIGNITY HEALTH, a California nonprofit public benefit
corporation, as Grantor thereunder, to the CITY OF ARROYO GRANDE a California municipal
corporation, as Grantee thereunder, is hereby accepted by the undersigned on behalf of the CITY
OF ARROYO GRANDE, pursuant to the authority conferred by Resolution No. _______, adopted
by the CITY OF ARROYO GRANDE City Council on ______________, and the Grantee
consents to recordation thereof by its duly authorized officer.
Dated: CITY OF ARROYO GRANDE, a California
municipal corporation
By:
Matthew Downing
City Manager
65501.00115\44467391.3
Exhibit H-1
EXHIBIT H
FORM OF REIMBURSEMENT AGREEMENT
CITY OF ARROYO GRANDE
REIMBURSEMENT AND INDEMNIFICATION AGREEMENT
FOR DEVELOPMENT PROJECT
(HALCYON COMPLETE STREETS CAPITAL IMPROVEMENT PROJECT)
1. PARTIES AND DATE.
This Reimbursement and Indemnification Agreement ("Agreement") is made this
_______ day of ___________________, ____________, by and between the City of Arroyo
Grande, a California municipal corporation ("City"), and DIGNITY HEALTH, a California
nonprofit public benefit corporation (“Applicant”). City and Applicant are sometimes
individually referred to as “Party” and collectively as “Parties” in this Agreement.
2. RECITALS.
2.1 The Applicant is the owner of that certain real property located within the City of
Arroyo Grande, County of San Luis Obispo, California, and more particularly described in Exhibit
“A” attached hereto and incorporated herein by reference (“Property”).
2.2 The Applicant is contemplating the development of the Property with an expansion
of its emergency department and related on-site improvements (“Project”). In connection with
the Project, the Applicant has submitted or covenants to submit applications for such discretionary
land use approvals, permits, and conditions of approval as may be required for the Project, together
with all related environmental review pursuant to the California Environmental Quality Act
(“CEQA”) and other applicable laws, rules, and regulations.
2.3 Certain frontage and utility undergrounding improvements required in connection
with the Project (the “Reimbursable Improvements”) are proposed to be designed and
constructed by the City as part of the City’s “Halcyon Complete Streets Capital Improvement
Project (PW 2023-15)” (the “City Project”), with the Applicant reimbursing the City for the costs
reasonably allocable to the Reimbursable Improvements, as set forth in this Agreement.
2.4 Judicial challenges of projects requiring discretionary approvals, including, but not
limited to, CEQA determinations, are costly and time consuming. Additionally, project opponents
often seek an award of attorneys’ fees in such challenges.
2.5 Since applicants are the primary beneficiaries of such approvals, it is appropriate
that such owners bear the expense of defending against any such judicial challenge, and bear the
responsibility of any costs, attorneys’ fees and damages which may be awarded to a successful
challenger.
2.6 In the event a judicial challenge is commenced against the Project, the City has
requested and the Applicant has agreed to defend, indemnify and hold harmless the City, its agents,
officers, or employees from any claim, action or proceeding against the City, its agents, officers,
65501.00115\44467391.3
Exhibit H-2
or employees to attack, set aside, void or annul any approval of the City, its advisory agencies,
appeal boards, or legislative body concerning the Project or its associated environmental
documentation, including but not limited to challenges brought under CEQA, Public Resources
Code section 5097.98, AB 52, and other applicable laws, rules, and regulations (“Litigation”).
2.7 To provide the City with the needed expertise and information necessary for the
City's review process concerning the Reimbursable Improvements, it is or may become necessary
for the City to access the services of certain outside legal, environmental, planning and other
experts for the Project ("Consultants").
2.8 As a condition to the City's completion of the Project review process, the Applicant
has agreed to reimburse the City for the Consultants’ costs and expenses related to the City's
Project review process, as well as any other out-of-pocket expenses incurred by the City, in the
manner and amounts set forth in this Agreement. The Applicant's reimbursement of City under
this Agreement will ensure that the City has the necessary resources to diligently and efficiently
process the Applicant's Project.
2.9 This Agreement is entered into by the City and the Applicant to establish specific
terms concerning Applicant’s reimbursement and indemnification obligations for the Project.
3. TERMS.
3.1 Incorporation of Recitals. The Parties agree that the Recitals constitute the factual
basis upon which the City and the Applicant have entered into this Agreement. The City and the
Applicant each acknowledge the accuracy of the Recitals and agree that the Recitals are
incorporated into this Agreement as though fully set forth at length.
3.2 City Construction of Reimbursable Improvements. The City agrees to include the
Reimbursable Improvements within the scope of the City Project, to bid and award a public works
construction contract for the City Project in accordance with applicable law, and to cause the
Reimbursable Improvements to be constructed as part of the City Project. The City shall retain full
and exclusive control over the design, bidding, award, administration, and inspection of the City
Project, including the Reimbursable Improvements, but shall use reasonable good faith efforts to
coordinate the design of the Reimbursable Improvements with the Applicant so that they satisfy
the conditions of approval for the Applicant’s Project. Nothing in this Agreement shall be
construed to require the City to approve, fund, bid, or construct the City Project or any portion
thereof, or to proceed with the City Project on any particular schedule.
3.3 City Selection of Consultants. As a necessary and indispensable part of its fact
finding process relating to the review of the Applicant's proposed Project and uses of the Property,
the City shall retain the services of Consultants to provide advice to the City, as the City may deem
necessary in its reasonable and sole discretion. The City has thus far retained or is prepared to
retain (either directly or as subconsultants) certain Consultants which Applicant may request
disclosure of, but City shall have the right to retain any additional consultants or sub-consultants
pursuant to this Agreement as are necessary for the City to exercise its independent judgment over
the Applicant’s Project. The contemplated general scope of work of the Consultants for the Project
may be disclosed upon request by Applicant, but the City reserves the right, in its reasonable and
65501.00115\44467391.3
Exhibit H-3
sole discretion, to amend the scope of work as it deems necessary and appropriate to the City's
proper review and consideration of the Applicant's Project.
The Applicant agrees that, notwithstanding the Applicant's reimbursement obligations
under this Agreement, Consultants shall be the contractors exclusively of the City and not of the
Applicant. Except for those disclosures required by law, including, without limitation, the Public
Records Act, all conversations, notes, memoranda, correspondence and other forms of
communication by and between the City and its Consultants shall be, to the extent permissible by
law, privileged and confidential and not subject to disclosure to the Applicant. The Applicant
agrees that it shall have no claim to, nor shall it assert any right in any reports, correspondence,
plans, maps, drawings, news releases or any and all other documents or work product produced by
the Consultants.
3.4 Applicant to Cooperate with Consultants. The Applicant agrees to cooperate in
good faith with the Consultants. The Applicant agrees that it will instruct its agents, employees,
consultants, contractors and attorneys to reasonably cooperate with the Consultants and to provide
all necessary documents or information reasonably requested of them by the City and/or the
Consultants; provided, however, that the foregoing shall not require the disclosure of any
documents or information of the Applicant which by law is privileged, proprietary, confidential,
and exempt from disclosure under the Public Records Act.
3.5 Applicant's Reimbursement of Costs and Expenditures. The Applicant shall
reimburse the City for one hundred percent (100%) of the actual fees, costs and other expenditures
incurred by the City relative to the Reimbursable Costs, as well as any other out-of-pocket
expenses incurred by the City ("Costs"). The City has preliminarily reviewed the scope of work
required for the Reimbursable Improvements and has estimated the aggregate costs for all
Reimbursable Costs to be approximately $100,000.00 ("Estimated Costs"). Within ten (10)
calendar days of the execution of this Agreement, the Applicant shall submit a deposit in the
amount of $100,000.00 ("Deposit Account"). City shall draw upon the Deposit Account for all
fees, costs and expenses incurred unless and until the Deposit Account is depleted, in which case
City shall then invoice Applicant for all additional fees, costs and expenses incurred and Applicant
shall pay such invoice in full within thirty (30) days after receipt.
City shall not materially exceed the Estimated Costs without consulting with Applicant
regarding the need for additional services which cause the Costs to exceed the Estimated Costs
("Excess Costs"). The City shall use reasonable good faith efforts to consult with the Applicant
prior to amending any scope of services to be provided by the Consultants and incurring Excess
Costs. The Applicant's obligation to reimburse the City for Excess Costs shall be contingent upon
the City providing Applicant with written notice of the amendment of the scope of services to be
performed by any Consultant and the estimated cost thereof prior to the commencement of work.
Once the City provides such notice, Applicant shall be obligated to pay the Excess Costs in the
same manner as the Estimated Costs provided above, including, but not limited to, replenishing
the Deposit Account.
For purposes of this Section 3.5, the City shall be deemed to have consulted with the
Applicant when the City has provided written notice to the Applicant that the City reasonably
anticipates that it will incur, or has incurred, Excess Costs. If, after consultation, the Applicant
65501.00115\44467391.3
Exhibit H-4
disagrees with the City's incurring of Excess Costs, then the Applicant's sole and exclusive remedy
will be to terminate this Agreement pursuant to Section 3.10 of this Agreement, subject to the
Applicant's obligation to reimburse the City for all Costs incurred by the City prior to the date of
termination, whether or not yet paid by the City to any Consultants.
The City shall maintain accurate records of invoices received from, and payments made to,
the Consultants resulting from the Reimbursable Improvements, and will provide a payment
summary to Applicant within a reasonable time upon request. In the event that excess funds remain
in the Deposit Account upon conclusion of the Reimbursable Improvements and after all final
payments to the Consultants have been made, the City agrees to refund that excess amount, if any,
to Applicant within fifteen (15) days of final payment to the Consultants. Alternatively, if the Costs
of the services of the Consultants exceed the Estimated Costs and Excess Costs, if any, then
Applicant shall remain obligated to pay for all such Costs. Applicant shall pay any such amount
within ten (10) calendar days of demand for payment by City.
3.6 Discretionary Approvals. Applicant and the City understand and agree that
Applicant’s application to the City concerning the Property are subject to the approval, conditional
approval or disapproval of the Planning Commission and/or City Council of the City. Further,
Applicant and the City understand and agree that some or all of the applications may require
findings (including, without limitation, environmental determinations under CEQA) to be made
by those legislative bodies, in some instances following duly noticed public hearings. Nothing set
forth in this Agreement shall be deemed to require approval or conditional approval of any or all
of such land use and other applications by those legislative bodies, notwithstanding Applicant’s
undertaking and completion of its obligations under this Agreement.
3.7 Indemnification.
3.7.1 Indemnification. Applicant, at its own expense, shall defend, indemnify
and hold harmless the City, its agents, officers, and employees from and against any claim, action
or proceeding brought against the City, its agents, officers, and employees to attack, set aside, void
or annul any approval of the Reimbursable Improvements including any associated costs,
attorneys’ fees, damages, and expenses including, but not limited to, costs associated with Public
Records Act requests submitted to the City related to the Reimbursable Improvements and an
award of attorneys’ fees and costs incurred or arising out of the above-referenced claim, action or
proceeding brought against the City (“Indemnification Obligation”). Applicant’s obligations
under this Section 3.6 shall survive the termination or expiration of this Agreement.
3.7.2 Defense Cooperation. Applicant and the City shall reasonably cooperate
in all aspects of the Litigation. Nothing contained in this Agreement, however, shall be construed
to limit the discretion of the City, in the interest of the public welfare, to settle, defend, appeal or
to decline to settle or to terminate or forego defense or appeal of the Litigation. It is also
understood and agreed that all litigation pleadings are subject to review, revision and approval by
the City Attorney.
3.7.3 Representation and Payment for Legal Services Rendered. The City
shall have the absolute right to approve any and all counsel retained to defend the City in the
Litigation. The Applicant shall pay the attorneys’ fees and costs of the legal firm retained by the
65501.00115\44467391.3
Exhibit H-5
City to represent the City and/or Applicant in the Litigation. Failure by the Applicant to pay such
attorneys’ fees and costs may be treated as an abandonment of the Project and as a default of
Applicant’s obligations under this Agreement.
3.7.4 Payment for City Litigation Costs. Payment for the City’s costs related
to the Litigation shall be made on a deposit basis. Litigation costs include any associated costs,
fees, damages, and expenses as further described herein as an Indemnification Obligation. Within
thirty (30) days of receipt of notice from the City that Litigation has been initiated against the
Project, Applicant shall initially deposit with the City’s Community Development Department the
total amount of One Hundred and Twenty Thousand Dollars ($120,000.00). Applicant shall
deposit with the City such additional amounts as the City reasonably and in good faith determines,
from time to time, are necessary to cover costs and expenses incurred by the City associated with
the Litigation. Within ten (10) days of written notice from the City, Applicant shall make such
additional deposits. Collectively, the initial deposit and additional deposits shall be referred to
herein as the “Deposit.”
3.7.5 Return of Deposit. The City shall return to Applicant any funds remaining
on deposit after ninety (90) days have passed since final adjudication of the Litigation.
3.8 Survival of Indemnification. The Parties agree that this Agreement shall constitute
a separate agreement from any Project approval, and if the Project, in part or in whole, is
invalidated, rendered null or set aside by a court of competent jurisdiction, the Parties agree to be
bound by the terms of this Agreement, which shall survive such invalidation, nullification or
setting aside.
3.9 Term. The term of this Agreement shall commence on the date that this Agreement
is fully executed by the Parties, and shall terminate when all services required for the Applicant’s
Project by Consultants have been completed to the City's reasonable satisfaction and the Applicant
has satisfied all of its obligations under this Agreement including its obligations to reimburse the
City for Reimbursable Costs. For purposes of this section, Applicant's obligations shall include,
but shall not be limited to, its obligation to reimburse the City for Estimated Costs and Excess
Costs, whether or not paid by the City to Consultants prior to the date of termination. The
Applicant's obligation to reimburse the City as provided in this Agreement shall survive the natural
expiration of this Agreement pursuant to this section, as well as the termination of this Agreement
pursuant to Section 3.10.
3.10 Early Termination.
3.10.1 By City. The City may, in its reasonable and sole discretion, terminate this
Agreement prior to the term set forth in Section 3.9 above, without cost or liability to the City,
upon thirty (30) days prior written notice to the Applicant in the event that Applicant either: (1)
fails to satisfy any obligation of this Agreement; or (2) fails to reasonably prosecute its
application(s) for the Project.
3.10.2 By Applicant. The Applicant may, in its reasonable and sole discretion,
terminate this Agreement prior to the end of the term set forth in Section 3.9 above, upon thirty
(30) days' prior written notice to the City; provided, however, that Applicant's right to so terminate
65501.00115\44467391.3
Exhibit H-6
this Agreement is expressly contingent upon Applicant satisfying both of the following: (1)
Applicant shall give City written notice withdrawing its application(s) for the Project; and (2)
Applicant shall satisfy all of its obligations under this Agreement up through the proposed effective
date of termination. For purposes of this section, Applicant's obligations shall include, but shall
not be limited to, its obligation to reimburse the City for Estimated Costs and Excess Costs, and
Reimbursable Costs, whether or not paid by the City to Consultants prior to the date of termination.
3.10.3 Notice to Consultants. Within two (2) working days following either the
City's decision to terminate this Agreement or the City's receipt of written notice indicating the
Applicant's decision to terminate this Agreement, the City shall notify all Consultants and instruct
them to cease work on the Project. Consultants shall also be instructed to bill the City for any
services completed prior to the date of termination.
3.11 Assignability. This Agreement may not be assigned by either Party without the
prior and express written consent of the other Party, which consent shall not be unreasonably
withheld. In determining whether to approve a request by the Applicant to assign this Agreement,
the City may consider, among other things, the proposed assignee's financial status and
commitment to the Project. Any attempted assignment of this Agreement not in compliance with
the terms of this Agreement shall be null and void and shall confer no rights or benefits upon the
assignee.
3.12 No Oral Modifications. This Agreement represents the entire understanding of the
City and the Applicant and supersedes all other prior or contemporaneous written or oral
agreements pertaining to the subject matter of this Agreement. This Agreement may be modified,
only by a writing signed by both the authorized representatives of both the City and the Applicant.
All modifications to this Agreement must be approved by the City Council.
3.13 Binding Upon Successors. This Agreement and each of its terms shall be binding
upon the City, the Applicant and their respective officers, elected officials, employees, agents,
contractors, and permitted successors and assigns.
3.14 Attorneys' Fees. In the event that any action or proceeding, including arbitration,
is commenced by either the City or the Applicant against the other to establish the validity of this
Agreement or to enforce any one or more of its terms, the prevailing Party in any such action or
proceeding shall be entitled to recover from the other, in addition to all other legal and equitable
remedies available to it, its actual attorneys' fees and costs of litigation, including, without
limitation, filing fees, service fees, deposition costs, arbitration costs and expert witness fees,
including actual costs and attorneys' fees on appeal.
3.15 Jurisdiction and Venue. This Agreement is executed and is to be performed in the
City of Arroyo Grande, San Luis Obispo County, California, and any action or proceeding brought
relative to this Agreement shall be heard in the appropriate court in the County of San Bernardino,
California. The City and the Applicant each consent to the personal jurisdiction of the court in
any such action or proceeding.
3.16 Severability. If any term or provision of this Agreement is found to be invalid or
unenforceable, the City and the Applicant both agree that they would have executed this
65501.00115\44467391.3
Exhibit H-7
Agreement notwithstanding the invalidity of such term or provision. The invalid term or provision
may be severed from the Agreement and the remainder of the Agreement may be enforced in its
entirety.
3.17 Headings. The headings of each Section of this Agreement are for the purposes of
convenience only and shall not be construed to either expand or limit the express terms and
language of each Section.
Representations of Authority. Each Party signing this Agreement on behalf of a Party
which is not a natural person hereby represents and warrants to the other Party that all necessary
legal prerequisites to that Party's execution of this Agreement have been satisfied and that he or
she has been authorized to sign this Agreement and bind the Party on whose behalf he or she signs.
3.18 Notices. Notices required under this Agreement shall be sent to the following:
City: City of Arroyo Grande
300 E. Branch Street
Arroyo Grande, CA 93420
Attn: Matthew Downing, City Manager
mdowning@arroyogrande.org
Applicant: Dignity Health
Notices given pursuant to this Agreement shall be deemed received as follows: (1) if sent
by United States Mail, five (5) calendar days after deposit into the United States Mail, first class
postage prepaid; (2) if sent by facsimile, upon transmission and actual receipt by the receiving
Party; (3) if by express courier service or hand delivery, on the date of receipt by the receiving
Party; or (4) if by e-mail, upon transmission and actual receipt by the receiving Party. The
addresses for notices set forth in this Section may be changed upon written notice of such change
to either the City or the Applicant, as appropriate.
[SIGNATURES ON NEXT TWO PAGES]
65501.00115\44467391.3
Exhibit H-8
CITY’S SIGNATURE PAGE FOR
CITY OF ARROYO GRANDE
REIMBURSEMENT AGREEMENT FOR DEVELOPMENT PROJECT
(HALCYON COMPLETE STREETS CAPITAL IMPROVEMENT PROJECT)
CITY OF ARROYO GRANDE, a California municipal corporation
By: _________________________
Matthew Downing
City Manager
Attest:
_________________________
Jessica Matson, CMC
Director/City Clerk
Approved as to Form:
_________________________
Isaac Rosen
City Attorney
65501.00115\44467391.3
Exhibit H-9
APPLICANT’S SIGNATURE PAGE FOR
CITY OF ARROYO GRANDE
REIMBURSEMENT AGREEMENT FOR DEVELOPMENT PROJECT
(HALCYON COMPLETE STREETS CAPITAL IMPROVEMENT PROJECT)
DIGNITY HEALTH,
a California nonprofit public benefit corporation
By: _________________________
Signature
_________________________
Name (Print)
_________________________
Title (Print)
OFFICIAL CERTIFICATION
I, JESSICA MATSON, City Clerk of the City of Arroyo Grande, County of San Luis
Obispo, State of California, do hereby certify under penalty of perjury, that the
attached Resolution No. 2026-002 was passed and adopted at a regular
meeting of the City Council of the City of Arroyo Grande on the 13th day of January,
2026.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 16th day
of January, 2026.
JESSICA MATSON, CITY CLERK