4873-9004-1714 v4
ASSIGNMENT, ASSUMPTION, AND AMENDMENT AGREEMENT
THIS ASSIGNMENT, ASSUMPTION, AND AMENDMENT AGREEMENT (this “Agreement”) is made as of this 26th day of July 2023, by and between JOURNEY HOSPITALITY, INC., a California corporation ("Seller") and NOVIN DEVELOPMENT CORP., a California corporation ("Novin").
WHEREAS, Seller and Novin entered into a Purchase and Sale Agreement dated May 23, 2023 and attached hereto as Exhibit A (the “PSA”), pursuant to which Seller agreed to sell, and Novin agreed to purchase, the property located at 425 24th Street in the City of Richmond, as further described in the PSA (the “Property”);
WHEREAS, Novin has requested, but Seller has rejected, a reduction to the purchase price set forth in the PSA;
WHEREAS, pursuant to Government Code Section 7267.2, the City has delivered to Seller an offer to purchase the Property for a sum not less than the appraised value as set forth in an appraisal prepared by Valbridge Property Advisors and dated June 21, 2023, and updated July 13, 2023, a summary of which has been delivered to Seller;
WHEREAS, City staff have advised Seller that if the purchase and sale of the Property does not go forward pursuant to the PSA as modified by this Agreement, City staff intend to request the adoption of a resolution of necessity that, if adopted, would allow the City to condemn the Property; and
WHEREAS, contingent upon approval by the City Council of the City of Richmond (“City Council”), the City of Richmond, a municipal corporation (“City”) has agreed to assume the obligations of Novin under the PSA as modified pursuant to this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Novin agree as follows:
1. Incorporation of Recitals; Definitions. The parties acknowledge the truth of the foregoing recitals which by this reference are incorporated into this Agreement. Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the PSA.
2. Assignment of Purchase and Sale Agreement. Provided that the City Council provides authorization for such action, Novin shall assign to City, and City shall assume, the rights and obligations of Novin under the PSA as modified by this Agreement. By their execution of this Agreement, Novin and Seller each consent to such assignment and assumption. If the City Council does provide such authorization, the City shall execute this Agreement, and effective as of the date of such execution, Novin shall assign, and City shall assume, the rights and obligations of Novin under the PSA as modified by this Agreement. If the City Council has not DocuSign Envelope ID: 729D47BA-0659-4871-A637-54CEDC0DB689 4873-9004-1714 v4
provided such authorization by September 12, 2023, this Agreement shall be null and void, and the PSA as unmodified will remain in effect; provided however, the parties agree that notwithstanding the foregoing, the Due Diligence Period as set forth in the PSA shall be extended to September 15, 2023.
3. Purchase Price. Section 2 of the PSA is hereby amended and restated in its entirety to read as follows:
Purchase Price. The purchase price for the Property (the “Purchase Price”) shall be Six Million Two Hundred Twenty Thousand Dollars ($6,220,000). In addition, if approved by the City Council, at Closing, the City shall waive collection of outstanding Transient Occupancy Taxes (TOT) and late fees owed by Seller for the Property from the date of the signing of the addendum through Closing Date. As of the date of this Agreement, the amount of outstanding TOT taxes and late fees is One Hundred Seventy-Seven Thousand, One Hundred and Eighty-Four and 59/100 Dollars ($177,184.59). Pursuant to Resolution No. 62- 23, adopted by the City Council on June 20, 2023, the City agrees that if the City purchases the Property, and if transfer taxes apply to such transaction, the City will waive all transfer taxes applicable.
4. Deposits. Seller and Novin acknowledge that Novin has previously deposited the Initial Deposit into escrow as described in Section 3(b) of the PSA. The Initial Deposit and any interest earned thereon shall be credited toward the Purchase Price at Closing. If the Closing does not occur by March 12, 2024, the Initial Deposit shall be returned to Novin. In consideration for the waiver of TOT taxes and late fees, no additional deposits or extension fees shall be required if the City assumes Novin’s right to acquire the Property pursuant to the PSA.
5. Title to the Property; Termination of Franchise Agreement. Seller acknowledges that at Closing, all property taxes and assessments (including without limitation waste collection service charges) shall be paid current by Seller, and the Property will be delivered free and clear of all outstanding deeds of trust and other monetary liens. Novin and City expressly disapprove all such items appearing on the Preliminary Report or otherwise affecting title to the Property.
Without limiting the generality of the foregoing, Seller will cause all title exceptions pertaining to the Pinnacle Bank financing appearing on the Preliminary Report to be removed. Prior to Closing, at Seller’s expense, Seller shall cause the Motel 6 franchise agreement pertaining to the Property to be terminated, and Seller shall deliver evidence that such agreement has terminated to Novin and City.
6. Due Diligence Period. Notwithstanding any contrary provision of the PSA, the Due Diligence Period shall extend through March 12, 2024, or, if earlier, the date upon which the California Department of Housing and Community Development (“HCD”) first disburses HomeKey funds for the acquisition of the Property. Promptly following execution of this Agreement, Novin and/or Seller shall provide copies to City of all Due Diligence Documents (described in Section 5(b) of the PSA) and all Service Contracts (described in Section 11(g) of the PSA) affecting the Property.
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7. Closing Date. Notwithstanding any contrary provision of the PSA, the Closing Date shall be not later than March 12, 2024, or, if earlier, the date which is ten (10) business days following the date upon which HCD disburses HomeKey funds for the acquisition of the Property. Buyer shall strive to prove 60 days’ notice to Seller prior to Closing Date.
8. Contingent Upon Award of Homekey Funds. Pursuant to Section 6 (b)(vii) of the PSA, the parties acknowledge that Novin’s (and, if applicable, City’s) obligation to purchase the Property is contingent upon HCD’s award of Homekey funds for the acquisition, improvement, and operation of the Property in an amount not less than fourteen million five hundred twelve thousand six hundred and sixty Dollars ($14,512,660).
9. Relocation. Seller agrees to cooperate with City in connection with compliance with all applicable State and federal relocation laws and regulations, including without limitation, the delivery of any required notices to existing or prospective residents of the Property.
10. Judicial Reference. Section 17(s) (Judicial Reference) is hereby deleted from the PSA.
11. 1033 Exchange. The parties agree to cooperate in the event that Seller wishes to participate in an exchange pursuant to 26 U.S.C. section 1033 (“1033 Exchange”). If this occurs, Seller shall bear all costs of such exchange, and neither Novin nor City shall have any liability for damages to Seller or to any other party, including, without limitation, any other exchanging party, in the event that the sale is delayed and/or that the sale otherwise fails to qualify as a 1033 Exchange.
12. Brokers’ Fees. Notwithstanding any contrary provision of the PSA, the parties agree that City shall have no obligation to pay any real estate commission, brokerage fee, finder’s fee, or similar fee or compensation in connection with the purchase and sale of the Property, and payment of any such fee shall be the sole responsibility of Seller and/or Novin.
13. Notices. The City shall be added as a notice party under section 17(d) of the PSA. The address for notices to the City is:
City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
Attention: City Manager
14. Ratification. Except as expressly amended and modified by this Agreement, the PSA is hereby ratified and confirmed, and all other terms of the PSA shall remain in full force and effect, unaltered and unchanged by this Agreement.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. The parties agree that venue for any dispute arising under the PSA as modified by this Agreement shall be in State or federal courts with jurisdiction in Contra Costa County, California.
DocuSign Envelope ID: 729D47BA-0659-4871-A637-54CEDC0DB689 4873-9004-1714 v4
16. Entire Agreement. This Agreement, together with the PSA, constitutes the entire agreement among Seller, Novin, and the City pertaining to the purchase and sale of the Property, and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, of Seller, Novin and/or the City.
IN WITNESS WHEREOF, Seller and Novin have executed this Agreement by their duly authorized representatives.
SELLER:
Journey Hospitality, Inc., a California
corporation
By: Rocky Patel,
President
Date: 7/28/2023
NOVIN:
Novin Development Corp., a California
corporation
By: Iman Novin,
President and CEO
Date: 7/28/2023
To be executed following City Council authorization:
The undersigned hereby certifies that by Resolution No. ____ adopted September 12, 2023, the City Council of the City of Richmond authorized the City to execute the foregoing Agreement and to assume the obligations of Novin Development Corp. as the Buyer under the PSA as modified by the foregoing Agreement. By signature of its duly authorized representative, the City hereby executes the Agreement effective as of September ___, 2023.
City of Richmond, a municipal corporation
By:_________________________
Print Name:___________________
Title:________________________
Approved as to form:
___________________________
City Attorney
DocuSign Envelope ID: 729D47BA-0659-4871-A637-54CEDC0DB689
4873-9004-1714 v4
Exhibit A
PURCHASE AND SALE AGREEMENT
(Attach copy of executed PSA.)
DocuSign Envelope ID: 729D47BA-0659-4871-A637-54CEDC0DB689