18-058 Carol Atwood, Purchase Agreement and Joint Escrow InstructionsPURCHASE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ("this
Agreement") is entered into as of February 16 , 2018 (the "Effective Date"), by and
between the City of Cupertino, a California municipal corporation ("City ") and Carol A.
Atwood , an individual ("Atwood"). City and Atwood are collectively referred to h.erein as
the "Parties."
RECITALS
A. Atwood and City entered into that certain agreement for housing
assistance dated -April 5, 1999 (the "Housing Agreement"), pursuant to which City
provided thirty percent (30%) of the down payment purchase price of a residence
purchased by Atwood (the "Residence") in exchange for a thirty percent (3 0%) equity
interest in the Residence (the "City Equity"). Atwood owns a 70% interest in the
Residence (the "Atwood Equity").
B. The Residence is located at 10849 Sycamore Ct., Cupertino, CA, known
as APN No . 342-57-028, as more particularly described in Exhibit A attached hereto and
incorporated herein by this reference.
C. Pursuant to the Housing Agreement , the City also provided Atwood with a
lo a n to finance the purchase of the Re siden ce (the "L oan ") that is evidenced by a
promissory note dated December 17, 1999 (the "City Note") a nd secured by a deed of
tru st (the "City Deed of Trust").
D. Pursuant to the formula set forth in the Hou sing Agreement, City and
Atwood have determined the market value of the Re sidence to be Two Million Nin e
Hundred Seven Thousand Five Hundred Dollars ($2,907 ,500.00).
E. City's equity share in the Residence is Eight Hundred Seventy Two
Thousand Two Hundred Fifty Doll a rs ($872,250.00) (t he "City Equity").
F. Pursuant to the Housing Agreement, Atwood has exercised he r option to
purchase City's equity intere st in the Re sidence on May 12 , 201 7 and under the
Housing Agreement the Parties have until May 23 , 2018 (th e "Deadline Date ") to
comp lete the purchase and sale of the City Equity.
G. Atwood d es ire s to purchase the City Equity, and City ag ree s to sel l the
City Equity, Eight Hundred Seventy Two Thou sand Two Hundred Fifty Dollars
($872 ,250.00), pursuant to th e terms and conditions of this Agreement.
H. A copy of the Hou sing Agreement is attached as Exh ibit B.
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NOW , THEREFORE, f o r a nd in co ns ide ration of th e mutu a l cove na nts an d
agreements contained in this Agreement , and other good and valu able consideration,
the receipt and adequacy of which i s here by acknowledged b y the Pa rti es, City and
Atwood he reby agree as follo ws:
1. INCORPORATION OF RECITALS AND EX HIBITS. The Recitals set forth
above and the Exh ibits attached to this Agreement are each incorporat ed into the body
of this Agreement as if set forth in full.
2. PURCHASE AND SALE; LOAN REPAYMENT.
2.1 Agreement to Buy a nd Sell. Subject to the t e rms and conditions
set forth herein , City agrees to sell the City Equity to Atwood, and Atwood hereby
agrees to acquire the City Equity fro m City.
2.2 Purchase Pri ce. The purchase pri ce for the City Equity to be paid
by Atwood to City (the "Purchase Price ") is Ei g ht Hundred Seventy T wo Thou sand Two
Hundred Fifty Dollars ($872,250 .00). Th e Purch ase Pri ce will be paid in immediately
available funds to City on the Closing Date (defined below) through Escrow b y the
Escrow Hold e r (as defined below).
2.3 Loan Re paym e nt. Purs uant t o the Housing Agreement, Atwood
will a lso re pay to City a ll principal a nd interest (incl uding · without limitation all deferred
intere st ) due a nd accru ing unde r th e Loan on th e Closing Dat e (the "Loan Payment")
co nc urre ntly with payment of the Purc hase Price, as se t forth in a demand from City th at
is d e posited into Escrow ("City Demand"). Th e Partie s ackn owledge and ag ree th at as
of Janu a ry 26 , 20 18 (taking into account th e payment due on that date), the Loan
Paym e nt was $436,878 .57, of w hi c h $379,280 .0 7 was unp a id principal and $57,598.49
was the deferred interest. If Atwood has not a lr ead y done so, Atwoo d will submit one or
more appli cation s with rep utable res id e nti a l lo a n brokers or lend e rs reg ul a rl y providing
lo ans in Santa Clara County to provid e financing for th e Purch ase Pri ce and Lo a n
Payment. Atwood will provide the C ity with reasonable updates re garding progress.
3. ESCROW .
3.1 Escrow Account. Wi t hin the tim e period specifi ed in Section 3.2
below, Atwoo d and C ity will ope n an escrow account (the "Escrow") w ith lender's
cu st o m ary Title Company, (the "Escrow Holder"), w ith interest, if a ny, acc ruing to th e
benefit of Atwood. Escrow Hol der s ha ll perform a ll escrow a nd title se rv ices in
co nn ecti o n with th is Agreement.
3.2 Opening of Escrow. Within seven (7) bus in ess days afte r Atwood
receives a letter lockin g in fin a n cing for the Purchase Pri ce a nd the Lo a n Payme nt from
a re putab le fin anc ia l in st ituti on ("Contingent Loan Lock Letter"), the Parties w ill
d e posit into Escrow the fully execut ed Ag reem e nt , o r executed counterpa rt s there to.
Th e date such fully executed Ag reement is rece ived by Escrow Holde r w ill be deemed
t h e "Opening of Escrow" and Escrow Ho lder wi ll g ive written notice to t he Parti es of
s uch occurrence.
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3.3 Consequences of Certain Events.
(a) In the event that Atwood (i) is not able to obtain a
satisfactory Loan Lo ck Letter to finance the Purchase Price and Loan Payment by the
date which is 45 days from the Effective Date of this Agreement (the "Financing
Termination Date"), or (ii ) timely obtains a satisfactory Contingent Loan Lock Letter but
is unable to fund the loan and close the purchase of the City Equity within ninety (90)
days after the opening of Escrow (the "E scrow Termination Date "), Atwood shall
promptly commence the necessary steps to sell the entire Residence to a third party
buyer as provided in the Housing Agreement and this Section 3.3 as soon as
reasonably possible. The City, as the owner of the City Equity, will cooperate
reasonably with Atwood's efforts, and if sold the proceeds will be divided as provided in
the Housing Agreement.
(b) The City recognizes that, in the event that the Residence
needs to be sold to a third party buyer, time will be needed to prepare the Residenc e for
sale at a maximum possible market rate. Therefore , the Parties hereby agree that
Atwood will have a reasonable amount of time, not to exceed ninety (90) days from the
Financing Termination Date or Escrow Termination Date, as applicable, to prepare the
Residence for sale. The City will pay (or reimburse from its share of the sale proceeds)
30% of the reasonable costs to prepare the Residence for sale. For purposes of this
Agreement "reasonabl e cost s to prepare the Residence for sale" in clude minor it ems
such as w ind ow repairs for leaky sea ls and moi sture, dam aged glass , new paint an d
carpet, tune-up for overg rown la nd scaping, minor handyman repairs such as leaky
f aucets, gutter repairs, cau lking and stu cco, termite repairs, etc., the total cost of which
sha ll not exceed $75,000 without the City's written consent.
(c) In th e eve nt of a third party sale, the Atwood, as majority
equ ity ow ner, agrees to promptly engage a lic ensed re a l estate broker (t he finally
se lected broker, "Broker") t o market the Re side nce under a standa rd brokerage
agreement for residences in th e City. Marketing efforts shall start as soo n as possible
o nce the Residence is prepared for sa le (ideally within seve n days), a nd should not
con tinue for more than thirty (30) days ("Marketing Period ") unless both Parties agree
to an ex ten sion. The broker must diligently market th e Res id ence, includin g li st ing it on
the MLS and oth er c ustomary so urces, and hold open houses on at l east two
consec uti ve weekends . The listing price for the Residence will be Two Mill io n Nin e
Hundred Seven Thou sand Five Hundred Dollars ($2,907,500 .00 ), unless the Broker
re commends a diff eren t price and eac h Party agrees in it s re asonab le discretion.
(d) The Parties will rev iew and co ns ide r a ll bona fid e off ers
rece iv ed during the Marketing Period, make mutually agreed counter-offers (if
appli cab le ), jointly agree on the ove ra ll best offer (tak ing into acco unt price,
co nting encies or lack th ereof, qualifications of buyer, etc.), and accept the best offer ;
provided t hat neith er Party sha ll be required to accept an offer which entit les the buyer
to c lose more than sixty (60) days after the off er is full y executed by all parties.
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(e) The Parties agree that notwithstanding the provisions of the
Housing Agreement regarding the timing of the City's option to purchase Atwood's
interest in the Residence , a sale of the Residence to a third party as described in this
Section is likely to be more beneficial to both Parties than the City's exercise of its
purchase option. Therefore , the Parties agree that the City's 30-day option to purchase
Atwood's interest in the Residence shal l not begin until the City provides written notice
thereof to Atwood ("City Exercise Notice "), and that th e City may not give a City
Exercise Notice before the earlie st of the following dates:
(i) Ninety (90) days after the Financing Termination Date
or Escrow Termination Date, as applicable, if the Residence is not prepared for sale by
that date;
(ii ) One Hundred Twenty (120) days after the Financing
Termination Date or Escrow Termination Date, as app li cable, if the Parties have not
accepted a bona fide offer to purchase the Residence by that date; and
(iii) Sixty (60) days after execution of a bona fide offer to
purchase the Residence, if the purchase has not closed by that date .
(f) If City is sues a City Exercise Notice the Parties agree that
the amount payable by City for buyout of the Atwood Equity sha ll be based on the
agreed upon market value of the Residence of Two Mi lli on Nin e Hundred Seven
Thou sand Five Hundred Dollars ($2,907 ,500.00 )
(g) If the City does not issu e a City Exerc ise Notice, the Parties
wi ll continue marketing the residence to a third party buye r as provided in this Section
unti l so ld.
(h) The Parties hereby agree to exte nd the Deadline Dat e of the
Hou s ing Agre ement to accommodate the time s periods in this Section, and agree that
the H ousing Agreement is hereby amended to acco mmodate such extension. In
addition , Atwood and her family wil l have th e right to con tinue to reside in the Residence
until either a third party sa le is comp leted or the City issues a City Exercise Notice and
comp letes its purchase of Atwood's interest in the Residence, and Atwood w ill continue
to make payments under the Loan and the Parties w ill continue to comply with their
other obligations under the Housing Agreement unti l suc h sale or purchase is
co mpleted. However, subje ct on ly to the terms of a purchase agreement with a
prospective buyer of th e Re sidence , nothing in thi s Agreement shall li mit any right of the
City to (i) require timely payment of the Loan as requir ed in the City Note, (ii) elect to
purchase the non-City Equity portions of the Residence from Atwood as provided in the
Hou sing Agreement and amended by this Agreement, or (i ii ) exercise any other City
right under the Housing Agreement or Loan.
4. PROPERTY DISCLOSURE REQUIREMENT S.
4.1 Cond iti on of T itle/Pre liminary Titl e Report. Escrow Holder shall
de li ver a Preliminary Title Report for the Residence (th e "Preliminary Report") to
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Atwood and the City within fift ee n (15) days after the Opening of Es crow. Each of th e
Parti es shall have two weeks to review and app ro ve th e condition of title to the
Residence. Atwood agrees to t ake title to the C ity Equit y subject to the following
"Permitted Exceptions": (a) standard printed exce ptions in th e Preliminary Report ;
(b) general and s peci al real property taxes an d assessments constituting a li en not yet
due and payable ; (c) all li ens, c laim s and encumbrances (o ther than the City Deed of
Trust) (i) created by or through Atwood, (ii) previously consen ted to by Atwood, or (ii i)
w hich also encumber the Atwood Equit y, (c) the Schedule B exceptions approved in
writing at Closing ; and (d) s uch add itional matters as Atwood shall approve.
4.2 City De e d of Tru st. City hereby agrees to reconvey the City Deed
of Trust record ed against t he Prop erty at Closing upon payment of the Loan Payment.
5. CLOSING AND PAYMENT O F PURCHASE PRICE AND LOAN
PAYMENT.
5 .1 Closing. Except as otherwise provided in this Agreement , the
closing (the "Closing" or "Close of Escrow ") w ill occur on a mutually agreeable date no
later than ninety (90) days after the Opening of Escrow (the "C losing Date"). In the
event that the Closing Dat e is later than De adline Date through no fault of Atwood,
Atwood has the right to re main in the Re s idence and will co ntinue to make the Loan
payments due to the City until th e Closing.
5.2 Atwood's Cond iti ons to Closing. Atwood's obligation t o purchase
the City Equity is su bject to th e following:
(a) Receipt of sat i sf actory fin anci n g from a repu t able lende r in
an amo unt suffi c ient to pay for th e Purc h ase Pri ce of the City Equity a nd the Loan
Payment.
(b) City h as perform ed a ll obligations t o be performed by City
pursuant to this Agre ement.
(c) City's represe ntations and warra nties h erein are tru e and
co rr ect in a ll mate ri a l respe ct s as of th e Clo s ing Date.
(d) The T itl e Compa ny is irrevocab ly comm itted to iss ue an
AL TA T itl e Policy t o Atwood, effective as of the Closing Date , in suring title to Atwood in
the full amo unt of th e Purcha se Price s ubject on ly t o the Permitted Exce ptions.
5.3 City 's Cond itions to Clo sing. The Close of Escrow and C it y's
obli gati on to se ll and convey the Cit y Equity to Atwood a re subject t o th e satisfaction of
th e fo ll owing co ndi tio n s or Ci t y's written waiver (in C it y's so le discretion) of suc h
cond iti o ns on or befo re t h e C losing Date:
(a) Atwood has performed all ob ligat ions to be performed by
Atwood pursu a nt t o thi s Agreement before C losing Date.
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(b) Atwood's representations and warranties set forth herein are
tru e and correct in a ll material respects as of the Closing Date .
(c) Atwood is able to and does pay the entire Purchas e Price
and Equity Loan (less prorations and costs as provided in this Agreement).
5.4 Conveyance of Title. City will deliver marketable fee simple titl e
of th e City Equity to Atwood at the Closing, subject only to the Permitted Exce ptions .
The City Equity will be conveyed by City to Atwood in an "as is" condition, with no
warranty, express or implied , by City as to the physical condition including , but not
limited to , the so il , its geology, or the presence of known or unknown faults or
Hazardous Materials or haza rdous waste (as defined by state and federal law), and
subject to all matters of title or of record or any matters that would be discl osed by a n
accurate s urvey; pro v id ed, howeve r, that the foregoing shall not relie ve City from
di sc losure of any such conditions of which City has actual knowledge to the extent
req uired by law. As this transaction is (i) between co-owners of the Residence and (ii)
is a transaction from a governmental entity , it is (per Cal. Civil Code sections 1102.2(e)
and 1102.2(j)) exempt from the customary residential transfer disclosure requirem ents
(including without limitation delivery of a real estate disclosure statement) of Cal. Civil
Code sectio n 1102 et seq.
5.5 De liveries at Closing.
(a) De li ve ri es by City. Cit y s hall depos it into the Escrow for
delivery to Atwood at Closin g: (i) a grant deed; (ii) reco nveya nce of the City Deed of
Trust; (i ii ) th e City Demand, id entif y ing the a mount due under th e Loan; (iv) an affidavit
or qualifying st ate men t w hich satisf ies the requirements of paragraph 1445 of the
Int erna l Revenue Code of 1986 , as ame nd ed , a ny regul ation s thereunder (the "Non-
Foreign Affidavit "); and (v) a Ca liforni a Franc hi se Tax Board Form 590 t o satisfy th e
requirements of Californi a Revenue and Taxation Code Sect ion 18805(b) and 2613 1
(the "California Certificate ").
(b) Deliveries by Atwood. No less t han one (1) business day
prior to th e close of escrow, Atwood sh all deposit into escrow imm ed iate ly ava il ab le
fund s in the amo unt, w hi c h is eq u al to: (i) th e Purchase Pri ce as adju s t ed by any
prorat ion s b etween th e Parties; (ii) Atwood 's portion of th e escrow fe es, recording fees ,
and title f ees; (iii) t h e Lo an Payment, as se t forth in a demand payment from C it y to
Atwood and depos ited into Escrow ; and (iv) a demand from Atwood for any amounts
owed t o Atwood from City und er th e Hou sing Agreement or und er this Agreement, if
any.
(c) Closing. Upon C lo s ing, Escrow Hold er shal l: (i) re co rd th e
grant deed ; (i i) di sb urse to City th e amo unt of the Purchase Price and the Lo a n
Paymen t, less Cit y's sh are of any escrow fees, cost s and ex pen ses, and prorati ons;
(i ii) deli ve r to Atwood the Non -Foreign Affidavit , the Ca liforni a Cert ifi ca t e and th e original
OA K #484 2 -8292 -38 65 v7 6
recorded grant deed; (iv) pay any other expenses payable through escrow; and
(v) distribute to itself the payment of escrow fees and expenses required hereunder.
(d) Closing Costs. Escrow fees, re cording fees and title fees will
be split between Atwood and City as is customary in Santa Clara County.
(e) Pro-Rations. Paid or unpaid (as applicable) property taxes
and earthquake insurance costs will be prorated as of t h e Closing Date, based on the
most rece nt bills. Atwood will pay all property taxes and earthquake insurance for
periods after Closing Date.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1 City's Representations, Warranties a nd Covenants. In addition to
the representations, warranties and covenants of City contained in other sections of this
Agreement, City hereby represents, warrants and cove nants to Atwood that the
statements below in this Section 6 .1 are each tru e and correct as of the Closing Date
provided however, if to City's actual knowledge any such statement becomes untrue
prior to Closing , City will notify Atwood in w riting and Atwood will have three (3)
business days thereafter to determine if Atwood desires to proceed with Closing.
(a) Authority. City is a municipal corporation, lawfully formed , in
exist e nce and in good standing unde r the laws of the State of California. City has the
full right , capacity, powe r a nd authority t o e nter into and carry o ut th e term s of thi s
Agreement. This Agreement has b ee n duly executed by C it y , a nd upon delivery t o an d
executi o n by A twood is a valid and binding agreement of C it y.
(b) En c umbrances. City has n ot a lienated, encumbered,
transferred , mortg aged, assign ed, pledged, or otherwise co nveyed its int erest in the C ity
Equity o r any portion thereof, n or e ntered into any Agreement t o do so, and the re are no
li e n s, e n c umbrances, mortgages, cove nant s, cond ition s, reservations , restrictions,
easeme nts or other matters aff ecting th e City Equity , except as d i sclosed in th e
Pre limin ary Report.
(c) Except as provid ed in the Ho u sing Agreement (in cludin g
wi thout limitati o n the City Deed of T ru st) or th e Preliminary Report, th e re are n o
ag reements affecting th e C ity Eq uity except th e Hou s ing Agreement. To the C ity's
actual kn owledge, other than any Atwood ag ree ment for ea rthqua ke insura nce (to the
exte nt the C ity is a lso a party th ereto ), th e C ity is not a party to any agreement binding
on th e City Equity that will be binding on Atwood or th e Residence afte r t he C lose of
Escrow.
The truth and acc uracy of each of the represe ntati o n s a nd warranties, a nd th e
performa nc e of a ll cove n a nts of City co nta in ed in t hi s Agreeme nt are co n d itions
precedent to Atwood's ob li gati o n to proceed w ith the Closing hereun der. The foregoing
representations a nd warra nti es s ha ll survive t h e expirati on , termination, o r close of
escrow of t hi s Agreeme nt for a period of six month s th ereaft er.
OAK #4842 -8 292-38 65 v7 7
6.2 Atwood 's Representations and Warranties. In addition to the
representations, warranties and covenants of Atwood contained in other sections of this
Agreement, Atwood hereby represents , warrants and covenants to City that the
statements below in this Section 6.2 are each true as of the Effective Date , and, if to
Atwood's actual knowledge any such statement becomes untrue prior to Closing,
Atwood shall so notify City in writing and City shall have at least three (3) business days
thereafter to determine if City desires to proceed with Closing.
(a) Atwood is a married individual. Subject to execution of the
attached Spousal Consent by Atwood 's spouse, Atwood has the full right, capacity,
power and authority to enter into and carry out the terms of this Agreement. This
Agreement has been duly executed by Atwood and her spouse, and upon delivery to
and execution by City shall be a valid and binding agreement of Atwood.
(b) Atwood is not bankrupt or insolvent under any applicable
federal or state standard, has not filed for protection or relief under any applicable
bankruptcy or creditor protection statute, and has not been threatened by creditors with
an involuntary application of any applicable bankruptcy or creditor protection statute.
The truth and accuracy of each of the representations and warranties, and the
performance of all covenants of Atwood contained in this Agreement are conditions
precedent to City's obligation to proceed with the Closing hereunder.
7. BROKERS. City and Atwood both represent that no real estate broker
has been retained by either Party in the sale of the City Equity or the negotiation of this
Agreement.
8. ASSIGNMENT. Absent an express signed written agreement between the
Parties to the contrary, neith e r City nor Atwood may assign its right s or delegate its
duties under this Agreement without the express written consent of the other, which
consent may be withheld for any rea s·on. Howeve r, nothing herein will limit any City
assignment right under th e Housing Agreement, City Note or City Deed of Tru st.
9. MISCELLANEOUS.
9.1 City's Actual Knowledge. For the purpose of thi s Agreement,
without creating any perso nal liability on behalf of such individual, usage of "to the City's
actual knowledge," or words to s uc h effect, sh all mean the present, actual knowl edge of
David Brandt, excluding constructive knowledge or duty of inquiry , existing as of the
Effective Date.
9.2 Attorneys' Fe es. If a ny Party employs counsel to enforce or
interpret this Agreement , including th e commencement of any legal proceeding
whatsoever (including insolve ncy , bankruptcy , arbitration , mediation , declaratory reli ef
or other litig ation ), the prevailing Party sha ll be entitled to re cover its re asonable
attorneys' fees a nd court costs (including the se rvice of process, filing fees , court and
court reporter costs, inve stigative f ees, expert witness fee s, and the costs of any bonds,
whether t axable or n ot) and sha ll in clud e th e right to recove r such f ees and cost s
OAK #4842-8292 -38 65 v7 8
incurre d in a ny appeal or efforts to collect or otherwise enforce any judgm e nt in its
favor in addition to any other remedy it may obtain or b e awa rd e d . Any judgment or
final order issued in any legal proceeding shall include reimburs e ment fo r all such
a ttorneys ' fees and costs. In a ny legal proceeding, the "prevai ling Party" s hall mean th e
Party determined by the court to most nearly prevail and not ne cessaril y the Party in
whose favor a judgment is rendered.
9.3 Interpretation. Thi s Agreement has been negotiated at arm 's
length and each Party has been represe nted by independent legal counsel in this
transaction and this Agreement has been reviewed and revised by counsel to each of
the Pa rtie s. Accordingly, each Party hereby waives any benefit unde r a ny rule of law
(including Section 1654 of the California Civil Code) or legal decision that wo uld require
interpretation of any a mbiguities in this Agreement against the drafting Party.
9.4 Survival. Subject to last paragraph of Section 6.1, all indemnities ,
covenants, repre se ntations and warranties contained in thi s Agreement shall survive
Close of Escrow.
9.5 Successors. Except as provided to the co ntra ry in t his
Agreement , this Agreement shall be binding on and inure to the benefit of th e Parti es
and their successors and assigns.
9.6 Governing Law. This Agreement s ha ll be construed and
interp rete d in acco rd a nce with the laws of th e St at e of Californi a.
9.7 Integrated Agreement; Modifications. Except for th e Hou sin g
Agreement, C ity Not e a nd City Deed of Trust, thi s Agreement contains a ll th e
ag reement s of th e Parti es concerning th e subj ect hereof and ca nn ot be ame nded or
modified except by a w ritt e n in strument executed a nd delivered by th e P a rti es. Th e re
are no re presentation s, agreeme nts , arrangements o r understan dings, e ith er oral o r
w ritt en, between o r a m o ng th e Parties he reto rel ating to th e su bj ect m atter of thi s
Agreement th at are not fully expressed here in . In addi ti o n there are no re present ation s,
agree m en t s, a rr angements or understandings, either oral or written, between or amo n g
th e Parties upo n which any Party is relying upon in e nte ring thi s Agreement that a re not
full y expressed h e re in.
9.8 Seve rabi lity. If a ny term o r prov1s1on of thi s Agreement is
determined t o be ill egal, un enfo rceable, or in valid in whole or in part fo r a ny reason,
s uch ill egal, un e nforceable, o r inva lid provisions or p a rt thereof s ha ll be stricken from
t hi s Agreement, any su c h provision shall not b e affected by th e leg a lit y, enforceabi lity ,
or va lidity of the remainder o f thi s Agreement. If a ny provision or part thereof of this
Agreement i s stri cken in acco rd ance w ith th e provisions of thi s Section, then th e
stricken provi sio n s ha ll be rep laced, to the exte nt possible , with a legal, enforceable and
va lid provision thi s is in keeping w ith th e inte nt of th e Partie s as expressed he re in .
9.9 N ot ices. Any delivery of thi s Agree ment, notice, modification of
thi s Agreement, co ll at e ra l or a d d iti o n a l agreement , demand , d isc losure , req uest,
OA K 114842-8292-3865 v7 9
consent, approva l, wa iv er, declaration or other communication that either Party desires
or is required to give to the other Party or any other person shall be in writing. Any such
communication may be served personally, or by nationa ll y recognized overnight delivery
service (i.e., Federal Express) which provides a receipt of delivery, or sent by prepaid,
certified or registered first c lass mail, return receipt requested to the Party 's address as
set forth below:
To Atwood:
T o City:
To Escrow Holder:
Carol A. Atwood
10849 Sycamore Ct.,
Cupertino, CA 95014
City of Cupertino
10300 Torre Avenue
Cupertino, CA 950 14
Attn: City Manager and Deputy City Manager
Attn: -------
Any such communication shall be deemed effective upon personal delivery or on
the date of first refusal to accept delivery as reflected on the receipt of delivery or return
receipt, as appli cab le. Any Party may change its address by notice to the other Party.
Each Party shal l make an ordinary, good faith effort to en s ure that it wil l accept or
receive notices that are given in accordance w ith this section and that any person to be
given notice actual ly receives such notice.
9.10 T ime. Time is of the essence to the performance of each and
every ob li gation under this Agreement.
9.11 Days of Week. If any date for exercise of any right, g iving of any
notice, or performance of any provision of this Agreement falls on a Saturday, Sunday
or holiday, the t im e for performance wil l be extended to 5:00 p.m. on the next business
day.
9.12 Reasonable Consent and Approval. Except as otherwise
provided in this Agreement, wheneve r a Party is required or permitted to give its
consent or approval under this Agreement , such con sent or approval shal l not be
unreasonably withhe ld or delayed. If a Party is required or permitted to give its consent
or approva l in its so le and absolute discretion or if such consent or approva l may be
unreasonably withhe ld , such cons ent or approval may be unreasonab ly withhe ld but
shall not be unreasonably delayed.
9 .13 Further Assurances. The Partie s s hall at their own cost and
expense execute and deliver such further docum ents and instruments and s ha ll take
OA K 114842-8292-3865 v7 10
such other actions as mi'l.y be reaso nabl y required o r appropriate to carry out the intent
and purposes of thi s Agreement.
9.14 Waivers. Any wa ive r by any P arty s hall be in writing and shall not
be construed as a continuing waiver. No waiver will be implied from any delay or failure
to take action on account of any default by any Party . Consent by any Party to any act
or omis sio n by another Part y sha ll not be construed to be a consent to any other
subsequent act or omission or to waive th e req uirement for consent to be obtained in
any future or other instance.
9.15 Sign atures/Cou nterparts. This Agreement may be executed in
two or more counterparts , each of which shall be deemed an original, but all of which
together shall constitute one and th e same instrument. An y one of such completely
executed counterparts shall be sufficient proof of this Agreement.
9.16 Dat e and Deli ve ry of Agreement. Notwithstanding anything to the
contrary contained in thi s Agreem ent , th e Parties intend that this Agreement shall be
deemed effective , and delivered for all purposes under this Agreement, and for the
calculation of any statutory time pe riod s based on the date an agreement between
Parties is effective, exec uted , or delivered , as of the Effective Date.
9.17 Represent ation on Authority of Parties . Each person signing this
Agreement represents an d warrants th at he or she is du ly a uthori ze d and has legal
capacity t o exec ut e and deliver this Agreeme nt. Eac h Party repre se nt s and warrants to
th e oth er th at th e execution an d delivery of th e Agreement a nd th e perfo rman ce of s uch
Pa rt y's ob lig at ions he re un de r have been duly au thori ze d and th at the Agreement is a
valid an d lega l ag reement binding on such Party and e nf orceab le in acco rdan ce with its
t erm s.
9.1 8 A pprova ls. Whenever thi s Agreement ca ll s for City appro va l,
co nse nt , exte nsion or waiver, the written approva l, consent, o r wa ive r of th e City's City
Manager or hi s or her designee(s) sha ll co nstitut e the approval, consent, exte nsion or
waiver of th e Cit y, w ith ou t furth er authorizat ion required fro m the City Council. Th e City
hereby authori zes th e City Ma nager and his or her designee(s) to deliver any such
approva ls, conse nts, o r exte nsio ns or waivers as are re quired by this Agreeme nt or that
do not otherwise reduce City 's rights under thi s Agreement, a nd to waive requirem en ts
und e r this Agreement, on behalf of t he Cit y .
SIGNATURES ON FOLLOWING PAGE
OAK #4842-8292 -3865 v7 11
IN WITNESS WHEREOF, this Agreement is executed by Atwood and City as ·of
the Effective Date .
City:
Attest:
~~.::_ (Z,1 Grace Schmidt, ClCierk
Revi~
Randolph S. Hom, City Attorney
Atwood:
Spousal Consent
The undersigned, being the spouse of Carol
A. Atwood, hereby acknowledges and
approves the foregoing Agreement, and
agrees to sign all documents reasonably
required to execute its terms :
U~n-JtJJ
Richard T. Atwood
OAK #4842-8292-3865 v7 12
By:
David Brandt, City Manager
By : {}u{M{2,~
Name: Carol A. Atwood
EXHIBIT A
LEGAL DESCRIPTION
REAL PROPERTY in the City of Cupert ino, County of Santa Cla ra, State of California, des cribed as
follows:
Lo t 7, of Tract No. 9078, Unit 5, which Map was filed for record in the office of the Recorder of the County
of Santa Clara, State of California on July 9, 1998, in Book 705 of Maps pag e(s) 44-51.
APN : 342-57-028
O A K #484 2-8292-3865 v7 Exh ibi t A
EXHIBIT B
HOUSING AGREEMENT
AGREEMENT BETWEEN THE CITY OF
CUPERTINO AND CAROL A . ATWOOD
REGARDING HOUSING ASSISTANCE
This Agreement is ex ecuted this ~ day of April , 19 _J2__, by and
bet»7e en th e City of Cupe1tino, a municipal corporation, hereinafter refened to a s
"Cjty" and CAROL A. ATWOOD, w ho has been employed as Director of
Adminis trative S e rvices by City , h er einafter referred to as "Atwood."
Recita ls
Whereas , City has empl oyed A two od , as it s Director of Administrative Services ;
and
Where as, City, pursuant to city c o uncil Resolut ion No. 99-070, encourages
department heads to res ide within Cupertino corporate limits to ensure their
ready availability and familiarity with the community; and
Whereas, the c o sts o f h ou s in g w ithin th e c ity limits are s ubsta ntially gre ater tha n
s unounding areas ; and
Wherea s, C ity and A twood have met fil1d discus sed compensation and realize that
due to extreme ly hi g h cos t s o f h o u s ing within C upe rtino, City must ass ist
Atwoo d in ob tainin g s ui tabl e h o u sing in C upe1tino; and
Whereas, Atwood c ont emp lates Lh c purchase of a sing le-family residence w ithin
C upertino, h e rei naft er r efe rre d to a s "the res idence ."
N OW, THEREFORE, IT IS AGREE D A S F OLLOWS:
1.
2 .
Purp o se
The purpose of thi s A g re em ent is to set forth tho se unders tandings r e a ch e d
by th e C ity and Atwoo d r egarding hous ing assistance.
Terms of E mpl oym e nt
Nothin g cont ain e d here in s h a ll be c o n strue d to p rov ide A t woo d a contract
of employ m ent w ith th e Ci ty . C ity, th r oug h it s C ity M an ager , continues t o
m a intain its sol e autho r i t y to r e t a in o r di s miss its Director of Admini strative
Services, fr o m e mploy m e nt. Th e e x e r ci se o f suc h a uth o rity b y C ity s h a ll
n ot es tabl is h in /\tw o o d a caus e o f action for m o ney damage s due to a loss
of h o us in g ass i s tan ce prov id e d h e r e in. Nothin g h e re in is intend e d t o c r e a te
OA K #4 842 -8292-3865 v7 Ex hib it B-1
any obligation to provide housing assistance for any person or persons
except Atwood herself.
3. Terms of Housing Assistance
A. Loan
Atwood ·may obtain, upon request, a loan by City to Atwood not to
exceed 5 times her gross salary to be used for the purchase of a
residence of Atwood's choosing within the City of Cupertino; provided
that s aid loan not exceed 90% of the purchase price.
Said loan shall be evidenced by a promissory note in favor of City
secured by a first deed of trust encumbering the residence. Said
promissory note shall be for a term of 40 years and shall bear a fixed
rate of interest, where the interest rate shall be the 11th District cost of
funds prevailing immediately prior to making of the loan.
Said residence shall be occupied by Atwood as her primary residence
and shall not be occupied as a residence by other persons not in her
family without written consent of City.
B. At any time during the term of the loan, commercial or other financing
becomes available at or below the interest rate applicable to the city
loan, Atwood shall refinance and retire the city loan.
C. Atwood elects a 2% (200 basis point) defetTal from the 1 1th District
cost of funds rate for a period of fi ve years from the date of th e
inception of the loan. At the conclusion of the 5 years, the interest rate
,vi!J revert to that originally set forth in the note, or the inter est rate
then prevailing under the program for fixed rate lo ans, (11th District
cost of funds) whichever is lower. When the Joan becomes due, or is
otherwise r etired, the value of the defe1Tal described above, shall be
paid off at that same time. The value of said deferral shall earn no
interest.
D. Atwood may prepay at any time all, or a portion, of this loan without
penalty.
E. Atwood s hall repay said loan in equ a l monthly in stallments of principal
and interest and s h a ll aut ho r ize City to make automatic payroll
deduction to cover payments with respect lo the City 's loan . Such
payroll d e duction shall have priority over all othe r d e du ctions except
01\K 1148-12 -8292 -'.\865 v7 Exh ibit 13-2
those r equired by law. City will provide Atwood a year-end st at ement
showing th e amount allocated paid to principal and th e amount paid as
interest.
F . Notwithstanding any provision to the contrary, th e promis sory note shall
become immediately due and payable upon sale or transfer ( except for a
transfer into a li v ing trus t or other probate or tax mechani sm where
Atwo od and her spous e remain primary beneficia ries.)
G. Equity Sharing
1) In addition to said loan above de sc rib ed, City shall contribute a
sum of not to exceed 30% of the bona fide purchase price to be used
to purchase the re s idence. Payment of this su m shall entitle City to a
proportionate share in the equity of the res idence as provid e d herein .
Title to the re si dence will b e held by City and Richard T. and Carol
A. Atwood, (in community prop erty), as te nants in common.
2) Atwood s hall be responsibl e for taking out and maintaining, at
her so le cos t, fire , cas ualty, and liability in surance on the res id ence
with coverage and terms, and in an a mount, which are satisfactory to
city and nam in g the Ci ty, as additional in sured there und er, as
beneficiaries in proportion t o the City's equit y interest. In the event
th at the p arti es agree that earthquake insurance is appro p r iat e and
ava ilable, the pai1i es s hall bear the cost of said in surance based up on
th eir respective interests in the eq uit y.
J) Atwood shall be respons ibl e fo r makin g all necessary repairs and
mainte nanc e to th e r eside nce, provided, however , that with respect to
any spec ific repair or proj ec t (e .g., roof, painting, fencing) whose
cost js greater than $2,500, t he p arti es shall share the cos t of s aid
repair in proportion to t heir respecti ve equity interes ts at the tim e the
repairs are made. Prior to commencin g any r epairs costing $2,5 00 or
mo re, Atwood wi ll confer with City to obtain agreement ns to said
repair.
4) No remodelin g of, or im provements to , the residence may be
made w ith o ut w ritt en conse nt of th e Ci ty.
At any time, Atwood ma y provide to the city manager a written
requ est li st in g proposed spec ific improvements s he in tends to make
OA K #4842 ·8292-3865 v7 Exh ihit 13 -3
to the residence. With respect to each specific improvement, the city
manager may:
a) Approve the improvement and agree that the City shall
contri bute to the cost of the improvement based upon its equity
share.
b) Approve the improv ement, but refuse to contribute to the
cost of the improvement. In t hat event, the cost will be borne solely
by Atwood and said cost will be added to her share of the equity.
c) Not approve the improvement with the exercise of
rea so nable di scretion.
5) TI1e parties will s hare real property taxes and assessments on the
same basis as their respec ti ve equity interests in the residence.
H. Closing Costs
City shall pay or reimburse Atwood for 50% of her closing costs as
the purchaser of the residence.
4. Sale or Transfer of the Residence
A) Atvvood, at her so le option, may sell the residence at any time based
upon a market price which is mutually agreeab le to the parties.
B) Upon sale, the proceeds shall be di stributed as follows:
l) Necessary co s ts of sa le.
2) The parties will share the balance on the same basis as the ir
resp ect ive equity interests in the res iden ce, as adjusted for the value
of any improvements described in Paragraph 3G4 above.
3) From Atwood's s hare, the balance of the city loan described
in Paragraph 3A shall be repaid out of escrow and prior to d isbursal
of funds.
5. Termination of Agreement
A . A twood acknm,v ledges and agrees that this housing assistance
agreemen t is not assumable by an.y subsequent buyer or transferee of the
residence in that it was spec ific ally negotiated as part of the terms and
conditions of Atwood's employment with C ity, that the payroll deductions
provisions act as security to the b enefit of the City, and t hat the various
OA K 114842-8292 -386.5 v7 Ex hi bit B-4
aspects of the City's housing program indicate that the assistance is
fashioned for Atwood alone.
B. It is further agreed that upon termination of Ahvood's employment, for
any r eason , or upon her no longer using the property as her permanent
res idence, the residence shall be sold pursuant to the provisions of this
Agreement.
C. Upon the occurrence of any event described in subparagraph SB above,
Atwood, or her executor or administrator, shall be granted the option of
purchasing City's interest in the residence within two years of the date of
the occurrence. During any such option period, Atwood, or her executor or
administrator, shall continue to make all payments with respect to the
residence that Atwood would otherwise be required to make regardless of
whether any option described herein is actually exercised.
D. In the event that Atwood or her executor or administrator does not
exercise her option, then City shall have the option to purchase Ahvood's
interest in the residence within 30 days after expiration of Atwood's interest
in the residence.
E. Any options described above shall be for the purchase of the r es idence
at a price established as follows:
Unless the parties otherwise agree as to the price, each party shall
appoint an M.A.I. appraiser and their decisions as to the market v alu e of the
residence shall be averaged and shall be final, unless they differ by 5% or
more, in which case a third M.A.I. appraiser s hall be selected by the other
two appraisers. The third appraisal s hall be averaged with 1he closest other
appraisal. The amount so averaged shall be final. Cost of all appraisa l shall
be sp li t eq uaJl y by the parties.
6. Miscellaneous
A. Ne ither A twood no r her executor or administrator s hall sell , lease, rent, or
encumber the res idence in any way without the wri tten consent of City in advance.
B. It is understood that incorporated into thi s agreement are th e provisions
contained in Ci ty Council .Reso l ution No. 99-070. In the case of any conflict
betwe en th e provisions of that Resolution and the provisions of this agreement, lhc
provisions of City Counci l Resolution 99-070 s hall prevail.
O A K #4 842 -!\292 -3865 v7 Exhibit B -5
C. Binding Effect
This Agreement binds the parties, their successors, and p e rs onal representatives,
and is not assignable by either party without t he e xpress written consent of the
other party.
D. Invalidity
In the event this Agreement or any part thereof should be held invalid, City
and Atwood agree to discuss alternatives, however, Atwood has no vested right to
alternative compensation.
E. Spousal Agreement
This Agreement shall become effe ctive only upon t he consent and
agre ement thereto by Rjchard T . Atwood, and shall become null and void if he
shall refuse to execute any or all other documents d e emed necessary by City to
initially consummate this transaction in its entirety . Richard T. Atwood also
agrees to execute all documents necessary to carry out this Agreement at all times
during its term.
F. Authority
The City Manager is hereby a uthori z ed and directed to execute all
documents n ece ssar y to c arry o ut this Agree m ent.
Dated: CITY OF CUPE RTINO
A T TE ST
K~_,--J?~~
C ity Clerk (/ '
OA K #4 842-829 2-3865 v7 Ex hi bit B -6
I agree and consent to
each of the provi sions of
this Agreement.
Richard T. Atwood
OAK #4 84 2-8292 -38 65 v7 Exhibit B -7
APPROVED AS TO FORM
~ harles T. Kilian