Attachment 1 - LG Theater Donation Agreement
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DONATION AGREEMENT
This Donation Agreement (the “Agreement”) is entered into by and between the Town of Los Gatos
(“Donee” or “Town”), and Jim and Alicia Goetz (“Donors”).
R E C I T A L S
A. Donors are the owners of the Los Gatos Theater real property (APN 510-44-031) located in the
Town of Los Gatos California and described on Exhibit “A” attached hereto and incorporated
herein by reference. The real property, including improvements thereon, if any, are collectively referred to
herein as the “Donation Property.”
B. Donors desire to donate and Donee desires to accept the Los Gatos Theater Donation Property
described herein.
C. Donors desire that the Donee will maintain the Donation Property in the spirit of the Donor
proposal dated April 17, 2021, and described in Exhibit “B” attached hereto and incorporated herein by
reference.
A G R E E M E N T
NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as
follows:
1. Effective Date. This Agreement shall be effective on the date it is fully executed by the District
and the Donors (“Effective Date”).
2. Donation. In accordance with and subject to the terms and provisions of this Agreement, Donors
are willing to donate the Donation Property to the Town in its as-is condition. Other than as
expressly set forth in this Agreement, (a) the Donee acknowledges and agrees that Donee is
acquiring the Property in its “AS IS” condition, with all faults, if any, and without any warranty,
express or implied, and (b) neither Donors nor any agents, representatives, or employees of Donors
have made any representations or warranties to the Donee or the Donee’s Agents with respect to
the condition, fitness, use or zoning of the Donation Property upon which the Donee has relied
directly or indirectly for any purpose. The Donee acknowledges that it has been afforded the
opportunity to make such inspections (or have such inspections made by consultants) as it desires
of the Donation Property. The Donee acknowledges that its staff includes experienced property
professionals with experience and knowledge in the areas of property acquisition, property
zoning and development, and environmental and land use laws and regulations. The Donee is
relying
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solely on its own investigation as to the Donation Property and is assuming the risk that adverse
physical, economic or other conditions may not have been revealed by such investigation. The
Donee agrees that, except as expressly set forth in this Agreement, the Donation Property is to be
transferred to and accepted by the Donee, at Closing, in the condition it is in at the end of the
Feasibility Period “AS IS.”
Except for those terms and provisions which expressly survive the Close of Escrow, from and after
the Closing, the Donee hereby completely releases and forever discharges Donors, Donors’
employees, agents, or any other person acting on behalf of Donors, and Donors’ partners and
owners (collectively, the “Indemnitees”) from and against all claims, actions, causes of action,
demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known
or unknown, foreseen or unforeseen (collectively, “Claims”) arising from or in any way growing out
of or connected with the physical condition of the Donation Property or any law or regulation
applicable thereto (collectively, the “Released Matters”). In connection with such waiver and
relinquishment, the Donee acknowledges that it is aware that it hereafter may discover Claims or
facts in addition to or different from those which it now knows or believes to exist with respect to
the Released Matters, but that it is the Donee’s intention to fully, finally and forever to settle and
release all of the Released Matters in accordance with the provisions of this Section 2, and the
release set forth herein shall be and remain in effect as a full and complete release notwithstanding
the discovery or existence of any such additional or different Claims or facts. The foregoing release
of Claims shall be binding on the Donee and all subsequent owners, lessees and other transferees
of the Donation Property.
In connection with this Section 2, the Donee expressly waives the benefits of Section 1542 of the
California Civil Code which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO
HIM MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.”
Donee’s Initials
3. Conditions to Donee’s Performance. Donee’s obligation to perform under this Agreement is
subject to the following conditions:
3.1 Donors’ representations and warranties in this Agreement being correct as of the date of
this Agreement and as of Close of Escrow;
3.2 Donors’ performance of all obligations under this Agreement;
3.3 The vesting of title to the Donation Property in Donee by grant deed in fee simple
absolute, free and clear of all liens, encumbrances, assessments, leases (recorded and/or
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unrecorded), and taxes except the following “Approved Exception(s)” in the Preliminary
Report, dated , issued by Old Republic Title Company, attached hereto as Exhibit
“B”:
3.4 Old Republic Title Company being prepared to issue a title insurance policy to Donee, or at
Donee’s election, to Donee’s assignee, in the full appraised fair market value of the
Property, as determined by a qualified appraisal obtained by Donors (“Title Policy”).
If Donee determines that any of these conditions have not been met, Donee shall have the right to
terminate this Agreement by delivering written notice to Donors, and, if applicable, to the Escrow
agent.
4. Taxes and Assessments. Non-delinquent real property taxes and assessments and utility and other
charges (to the extent such utility or other accounts cannot be transferred in the name of Donee
as of the close of Escrow) shall be prorated between Donors and Donee as of the Close of Escrow.
All prorations shall be made on a per-diem basis using a thirty (30) day month and a three hundred
sixty-five (365) day year. To the extent any apportionment cannot reasonably be completed by the
Close of Escrow, the parties shall make such necessary proration in a commercially reasonable
manner and pay such amounts to the party entitled hereto within a period of thirty (30) days after
the Close of Escrow. Notwithstanding anything to the contrary herein, the provisions of this
section shall survive Close of Escrow to the extent necessary to fully allocate such amounts.
Notwithstanding anything to the contrary herein, Donors reserve the right to keep, collect and
retain any refunds, rate or price reductions or other sums, including, without limitation, any
property tax refund, reductions or rebate, which relate to the periods prior to the Close of Escrow
whether or not such sums are collected after the Close of Escrow, and Donee shall promptly return
to Donors any such sums received by Donee.
5. Escrow. By this Agreement, Donee and Donors establish an escrow
(“Escrow”)___________________________________________________. Donors hereby
authorize Donee to prepare and file escrow instructions with said Title Company, on behalf of
Donors, in accordance with this Agreement. This includes authorization of the Title Company to
withhold pro rata taxes, liens and assessments on the Donor Property conveyed.
5.1 Fees and Title Insurance. Donee shall pay the Closing Agent’s Escrow Fee, transfer tax and
recording fees, if applicable, and the premium for title insurance if desired by Donee.
Donors shall be responsible for any and all reconveyance or transfer fees for any deeds of
trust, full release of mortgage, payment of liens, discharge of judgments, or any legal,
administrative or other costs or expenses Donor may incur in delivering marketable title to
Donee. All costs related to satisfying any “due diligence” requirements or requests that a
party deems necessary to perform its obligations under this Agreement shall be the sole
obligation of such party. All current property taxes on the Property shall be handled in
accordance with Section 4986 of the Revenue and Taxation Code of the State of California
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and updates thereof. Any other costs or expenses not otherwise provided for in this
Agreement shall be paid by the requesting party.
5.2 Property Review. Donee shall keep the Property lien free and shall immediately discharge
and remove any liens placed thereon based upon the actions of Donee or any party acting
under or on behalf of Donee.
5.3 Donors’ Deposit into Escrow. On or before Close of Escrow, Donors will deliver into Escrow
with the Title Company the following documents:
A. A grant deed, in recordable form and properly executed on behalf of the Donee,
in a form approved by Donee (“Grant Deed”) conveying to Donee the Property in fee
simple absolute, subject only to the Approved Exception(s).
B. Copies of any effective leases, rental agreements or any other agreements, if any,
which Donee has agreed in writing, are to remain in effect after Donee takes title.
C. Donors’ affidavit of nonforeign status as contemplated by Section 1445 of the
Internal Revenue Code of 1986, as amended (“FIRPTA Affidavit”); and
D. Grantor’s affidavit as contemplated by the Revenue and Taxation Code Section
18662 (“Withholding Affidavit”).
5.4 Close of Escrow. Escrow shall close on or before that certain date which is sixty (60) days
after the Effective Date, provided in no event shall Close of Escrow occur later than
December 31, 2021, upon the conveyance of the Donation Property to Donee (“Close of
Escrow”). On the Close of Escrow date, the Title Company shall close Escrow as follows:
A. Record the Deed, marked for return to Donee in care of Los Gatos Town Manager
for Donee (which shall be deemed delivery to Donee), and shall obtain at recording
conformed copies of the Deed and deliver a copy thereof to Donors and Donee
immediately after the Close of Escrow;
B. Issue the Title Policy;
C. Prorate taxes, assessments, rents and other charges as provided by this Agreement;
and
D. Prepare and deliver to Donee and to Donors one signed copy of the Title Company’s
closing statement showing all receipts and disbursements of the Escrow.
If the Title Company is unable to simultaneously perform all of the instructions set forth above, the
Title Company shall notify Donors and Donee and retain all funds and documents pending receipt
of further instructions from Donors and Donee. Either party may waive any and all objections to
any condition precedent to its performance and proceed with this Agreement by giving written
notice thereof to the other party and the Title Company.
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6. Representations and Warranties. Donee warrants that this Agreement constitutes a binding
obligation of Donee.
7. Other Agreements. Donee agrees to cooperate with Donors’ determination of the fair market
value by an appraisal to be commissioned by and performed solely for Donors’ purposes. Donee is
under no obligation to confirm or agree upon any value derived from an appraisal conducted by
Donors. Donors will obtain independent tax counsel and are solely responsible for compliance
with the gift substantiation requirements of the tax code. Donee’s obligation will be to
acknowledge receipt of a donation of the Property by executing IRS Form 8283 before Close of
Escrow. Donee acknowledges that it has not provided Donors with anything of value in exchange
for the Property.
8. Termination of Agreement. Donors and Donee mutually agree that this Agreement shall be
effective through December 31, 2021, unless further extended in writing by Donors and Donee.
The parties to this agreement mutually agree that if Close of Escrow does not occur on or
before December 31, 2021, and if this Agreement is not extended by Donors and Donee, this
Agreement shall terminate at midnight on December 31, 2021.
9. Survival. All of the terms, provisions, representations, warranties and covenants of the parties
under this Agreement shall survive the assignment, expiration or termination of this Agreement
and shall not merge in the deed or other documents following the delivery and recordation of said
deed or other documents.
10. Possession of the Property. Possession of the Property shall be delivered to Donee at the Close of
Escrow.
11. Attorneys’ Fees. Should either party institute any action or proceeding to enforce any provision
of this Agreement or for damages by reason of an alleged breach of any provision hereof, the
prevailing party shall be entitled to receive all costs and expenses, including reasonable attorneys’,
consultants and expert witness fees incurred by such prevailing party in connection with such
action or proceeding, at trial and on any appeal.
12. Assignment and Successors. This Agreement shall inure to the benefit of and shall be binding upon
the parties to this Agreement and their respective heirs, successors, and assigns.
13. Notices. All notices (including requests, demands, approvals or other communications) under this
Agreement shall be in writing. The place for delivery of all notices given under this Agreement
shall be as follows:
Donors:
Donee:
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or to such other addresses as Donors and Donee may respectively designate by written notice to
the other.
14. Entire Agreement. The parties have herein set forth the whole of their agreement. The
performance of this agreement constitutes the entire consideration for said document and shall
relieve Donee of all further obligation or claims. Donors have no other right or claim to
compensation arising out of or connected with the acquisition of the Property by Donee.
15. Construction. The section headings and captions of this Agreement are, and the arrangement of
this instrument is, for the sole convenience of the parties to this Agreement. The section headings,
captions and arrangement of this instrument do not in any way affect, limit, amplify or modify the
terms and provisions of this Agreement. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if both parties had prepared it. The parties to this
Agreement and their counsel have read and reviewed this Agreement and agree that any rule of
construction to the effect that ambiguities are to be resolved against the drafting party shall not
apply to the interpretation of this Agreement. The Recitals are and shall be enforceable as a part
of this Agreement.
16. Further Assurances. Whenever requested to do so by the other party, each party shall execute,
acknowledge and deliver all further conveyances, assignments, confirmations, satisfactions,
releases, powers of attorney, instruments of further assurance, approvals, consents and all further
instruments and documents as may be necessary, expedient, or proper in order to complete all
conveyances, transfers, sales, and assignments under this Agreement, and do all other acts and to
execute, acknowledge, and deliver all documents as requested in order to carry out the intent and
purpose of this Agreement.
17. Property Studies and Records. Donors shall deliver to Donee, within ten (10) calendar days after
execution of this Agreement by all Parties, complete, accurate and legible (hard and electronic)
copies of all documents concerning the Property that are in Donors’ possession or control or are
readily available to Donors, including, but not limited to, title reports, specifications, maps,
drawings, surveys, engineering, soils, environmental, and geotechnical studies and reports, leases,
estoppels, topographic surveys, grading plans, feasibility, marketing or other studies,
investigations or reports, permits, approvals, right of way and easement agreements, zoning and
master plans, bonds, specific plans, initial studies, mitigated negative declarations and/or
environmental impact reports, Phase I and II environmental assessments, entitlement documents;
property tax bills; estoppels from tenants; and notices of any violation of any federal, state or local
statutes, ordinances, affordable housing or inclusionary housing agreements, rules or regulations.
18. Waiver. A waiver or breach of any covenant or provision in this Agreement shall not be deemed a
waiver of any other covenant or provision in this Agreement, and no waiver shall be valid unless in
writing and executed by the waiving party.
19. Severability. If any term or provision of this Agreement shall, to any extent, be held invalid or
unenforceable, the remainder of this Agreement shall not be affected.
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20. Counterparts. This Agreement and any amendments hereto may be executed in any number of
counterparts and by each party in separate counterparts, each of which when so executed and
delivered shall be deemed an original and all of which taken together shall constitute one and the
same instrument.
21. Costs, Expenses and Fees. Donee and Donors each agree to pay their own costs and expenses,
including fees of attorneys, accountants and consultants, incurred in the preparation of and
carrying out of this Agreement.
22. Right To Enter Property.
22.1 Access to Property. Commencing with execution of this Agreement, Donee or Donee's
representatives, after written request(s) and approval(s), shall be allowed access to the
Property prior to the Close of Escrow, at all reasonable times for the purpose of obtaining
data and making surveys, tests, inspections and other studies at Donee's sole expense,
necessary to carry out this Agreement or as required by local and California state
regulatory agencies.
22.2 Donee shall procure and maintain (and require any of its representatives entering the
Property to procure and maintain): (i) workers’ compensation insurance required by the
laws of the State of California; (ii) commercial general liability insurance in the amount of
at least Two Million Dollars ($2,000,000) combined single limit, naming Donors as
additional insureds and containing a cross liability endorsement or severability of interests
clause; and (iii) with respect to any contractor or consultant conducting environmental,
soils or geological tests, commercial general liability insurance, in the amount of at least
One Million Dollars ($1,000,000) combined single limit. Donee shall, prior to any entry by
Donee and/or its representatives, furnish certificates of such insurance coverage to Donors.
Such certificates shall contain a clause providing for thirty (30) days’ advance notice of
cancellation or material change in coverage.
22.3 Restoration of Property. Donee shall, upon completion of data gathering, and making
surveys, tests, inspections and other studies, restore the Property to the extent reasonably
possible to its condition prior to such data gathering, surveys, tests, inspections and other
studies.
22.4 Indemnification Resulting From Access. Donee shall indemnify and hold harmless Donors
of and from any and all mechanic's liens, claims, actions, liabilities, costs, expenses,
including attorneys' fees, and damages of any type or nature arising out of or in any way
related to any such use of or entry onto the Property by Donee or by any other person or
entity on behalf of, or at the request of, Donee, excluding any losses or damages, including
but not limited to a reduction in the value of the property, resulting from any finding or
results of any surveys, tests, inspections or other studies, whether or not negligent.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates below written.
DONEE DONORS
By:
Name:
Its:
Date:
By:
Name:
Its:
Date: