HomeMy WebLinkAboutContracts & Agreements_229-2016 PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
DATED
November 1, 2016
BY AND BETWEEN
THE CITY OF REDLANDS ("SELLER"),
ASSELLER
AND
PATRICK OBRIEN AND/OR ASSIGNEE
AS BUYER
E �
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE......................................... ......................................................... 1
2. PURCHASE PRICE. ..........................................................................................................1
2.1 Deposits................................................................................................................. 1
2.2 Deposit of Balance................................................................................................ 2
3. ESCROW. ...........................................................................................................................2
3.1 Opening of Escrow................................................................................................2
3.2 Escrow Instructions............................................................................................... 3
3.3 Termination/Cancellation ......................................................................................3
4. ACTIONS PENDING CLOSING. .....................................................................................3
4.1 Due Diligence. ......................................................................................................3
4.2 Title. ......................................................................................................................7
4.3 Entitlements. ......................................................................................................... 8
5. DESCRIPTION OF PROPERTY....................................................................................... 8
5.1 The Real Property .................................................................................................8
5.2 The Intangible Property ........................................................................................8
6. CONDITIONS TO CLOSING. .......................................................................................... 9
6.1 Buyer's Closing Conditions ..................................................................................9
6.2 Seller's Closing Conditions ...................................................................................10
7. CLOSING. ............................................................ .. 10
7.1 Closing Date.......................................................................................................... 10
7.2 Deliveries by Seller............................................................................................... 10
7.3 Deliveries by Buyer............................................................................................ 11
7.4 Actions by Escrow Agent ................................................................................... 11
7.5 Prorations/Apportionment..............
7.6 Closing Costs ...................................................................................................... 14
7.7 Closing Statement ......................................... ..........................14
7.8 Deliveries Outside of Escrow .............................................. .............................14
8. SELLER'S REPRESENTATIONS AND WARRANTIES. ............................................15
8.1 Due Organization ................................................................................................15
8.2 Seller's Authority;Validity of Agreements............................................
8.3 No Third-Party Rights......................................................................................... 15
8.4 Litigation.....................................................................................I.............. ...15
8.5 Zoning and Condemnation...................................................................................15
8.6 No Violations of Environmental Laws ................................................................15
8.7 No Other Commitments.......................................................................................16
8.8 WeIls....................................................................................................................16
8.9 Landfill/Waste Disposal Site ...............................................................................16
8.10 Property Materials................................................................................................16
8.11 Permits and Approvals...........................
8.12 Williamson Act....................................................................................................16
8.13 Mechanics Liens...........................................................................16
8.14 Violations.......................................................•.......................... 16
8.15 Actual Knowledge ...............................................................................................16
8.16 Survival................................................................................................................18
9. BUYER'S REPRESENTATIONS AND WARRANTIES. ..............................................18
9.1 Due Organization.................................................................................................18
9.2 Buyer's Authority; Validity of Agreements.........................................................18
9.3 Survival................................................................................................................18
10. AS-IS .................................................................................................................................19
11. RISK OF LOSS. ................................................................................................................19
11.1 Condemnation......................................................................................................19
11.2 Casualty................................................................................................................20
12. REMEDIES. ......................................................................................................................20
12.1 Default by Seller..................................................................................................20
12.2 Default by Buyer..................................................................................................21
13. BROKERS.........................................................................................................................21
14. MISCELLANEOUS PROVISIONS..................................................................................21
14.1 Entire Agreement.................................................................................................21
14.2 Modification; Waiver...........................................................................................22
14.3 Notices .................................................................................................................22
14.4 Expenses ..............................................................................................................23
14.5 Severability....... ................................................................................ ...23
...............
14.6 Successors and Assigns........................................................................................23
14.7 Counterparts.........................................................................................................23
14.8 Governing Law; Jurisdiction; Waiver of Jury;Judicial Reference......................24
14.9 Headings ..............................................................................................................25
14.10 Time of Essence...................................................................................................25
14.11 Further Assurances...............................................................................................25
14.12 Construction.........................................................................................................25
14.13 Attorneys' Fees....................................................................................................25
14.14 Business Days......................................................................................................2b
14.I5 Legal review and edits................................................................... 26
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND, JOINT ESCROW
INSTRUCTIONS (this "Agreement ) is made and entered into as of November Ist 2016 (the
"Agreement Date"), by and between CITY OF REDLANDS, a poMical subdivi§ion of the
State of California ("Seller"), and PATRICK OBRIEN AND/OR ASSIGNEE
('Buyer"), for the purpose of setting forth the agreement of the Parties and to provide
instructions to Escrow Agent with respect to the transaction contemplated by this Agreement.
.Seller and Buyer shall also individually be referred to as a "Party" and collectively as the
„P,aes".
RECITALS
A. Seller is the owner of that certain real property located at 1615 Park Arse
Redlands, ("City"), San Bernardino County(the "County"), State of California, known as APN
Number 0292-192-19. The Land,together with the Improvements, the balance of the Real
Property, and.the Intangible Property (each as definediris Section,5)� are soiaaetvmes co).kectivety
referred to in this Agreement as the"Property".
B. Seller desires to sell the Property to Buyer, and Buyer desires to purchase the
Property from Seller, upon and subject to the terms and conditions set forth in thisAgrmnent.
AGREEMENT
In consideration of the mutual agreements contained in this Agreement and for other
,good and valuable consideration, the receipt:and .sufficiency of which are hereby acknowledged,
Buyer and Seller hereby agree, and instruct Escrow Agent, as follows:
1. PURCHASE AND SALE.
Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase and
acquire from Seller, the Property on all of the terms and conditions of this Agreement.
2. PURCHASE PRICE.
The purchase price for the Property (the "Purchase-Pricel') shall be two million three
hundred thousand dollars ($2,300,000). The Purchase Price shall be payable as follows:
21 Deposit. By 5:00 p.m. on .the fifth (5th) day after the "Opening of Escrow" (as
defined b6low), Buyer shall deposit into "Escrow" (as defined below) the sum of fifteen
Thousand Dollars ($15,004.00) (which amount, together with any and all interest earned thereon,
shall be referred to in this Agreement as the "Deposit"). The Deposit shall be fully refundable
through the Due Diligence Termination Date, as defined in 'Section 4.13. From and after the
Due Diligence Termination Date, provided Buyer does not elect to terminate this Agreement as
permitted pursuant to the terms of Section 4.1.3, the Deposit shall become non-refundable,
except as specifically provided otherwise in this Agreement, and shall be credited against the
Purchase Price at Closing.
2.1.1 Refund of Deposit. If Buyer delivers its Due Diligence Approval Notice
(as defined below), but subsequently elects to terminate this Agreement due to (a) a Seller
Default, as defined in Section 12.1) hereunder, (b) a failure of a Buyer's Condition to Closing, or
(c) the occurrence of any other event which by the terms of this Agreement gives rise to Buyer's
right to terminate this Agreement and receive a refund of the Deposit, then, subject to the terms
of Section 12.1, (i) the Deposit shall immediately be returned by Escrow Agent to Buyer, or to
the extent previously released to Seller, refunded to Buyer by Seller, (ii) this Agreement and the
Escrow shall terminate, and (iii) the Parties shall have no further obligation to one another with
respect to this Agreement, except with respect to such provisions which by their terms survive
the termination of this Agreement.
2.1.2 Interest. The Initial Deposit and any other cash held by Escrow Agent for
the benefit of Buyer shall be held in a federally insured interest bearing account, and the interest
shall accrue to Buyer's benefit.
2.1.3 Independent Consideration. Notwithstanding the terms of Section 2.1.1, a
portion of the Deposit in the amount of One Hundred Dollars ($100.00) (the "Independent
Consideration") shall be non-refimdable to Buyer as independent consideration for the rights
extended to Buyer under this Agreement, including the right to conduct the Due Diligence and
terminate this Agreement as provided in this Agreement. If Buyer elects to terminate this
Agreement for any reason other than Seller's Default (as defined in Section 4.1.3), Seller shall
retain the Independent Consideration. The Independent Consideration shall be applicable
towards the Purchase Price,
22 Deposit of Balance of Purchase Price. Buyer shall, at least one (1) business day
prior to Closing (as defined in Section 7.1), deposit into Escrow in the form of wire transfer, cash
or a certified or bank cashier's check for immediately available funds, the amount of the
Purchase Price less the Deposit, plus Buyer's closing costs and Buyer's share of any proration's
to be made in accordance with this Agreement.
3. ESCROW.
3.1 Opening of Escrow. Buyer and Seller shall cause an escrow ("Escrow") to be
opened with First American 3281 East Guasti Road, Suite 440, Ontario, CA 91761 Attention:
Kelley Kelly Simoneau ("Escrow Agent") by delivery to Escrow Agent of fully executed
copy of this Agreement. Escrow Agent shall promptly deliver to Buyer and Seller written
confirmation of the date of the "Opening of Escrow."As used in this Agreement, the term
"Opening of Escrow" means the day on which Escrow Agent receives a fully executed copy of
this Agreement and has notified each Party in writing of such receipt.
3.2 Escrow Instructions. This Agreement shall constitute escrow instructions to
Escrow Agent as well as the agreement of the Parties. If any other printed escrow instructions
are requested of the Parties and the terms thereof conflict or are inconsistent with any provision
of this Agreement or any deed, instrument, or document executed or delivered in connection
with the transaction contemplated hereby, the provisions of this Agreement, or such deed,
instrument, or document shall control. Escrow Agent is hereby appointed and designated to
act as Escrow
Agent and instructed to deliver, pursuant to the terms of this Agreement, the documents and
funds to be deposited into Escrow as provided this Agreement.
3.3 Termination/Cancellation. Upon any termination or cancellation (the terms being
used interchangeably in this Agreement) by either of the Parties as expressly allowed under this
Agreement(including,without limitation, any deemed termination or cancellation), (a) the
Deposit shall be delivered to the Party that this Agreement specifies is entitled to the sante; (b)
all documents, instruments, and funds delivered into Escrow shall be returned to the Party that
delivered the same into Escrow, and (c) the Parties shall thereafter be relieved from firrther
liability under this Agreement, except with respect to any obligations under this Agreement that
are expressly stated to survive any termination of this Agreement. A copy of any notice of
termination allowed under this Agreement shall be sent to Escrow Agent by the Party electing to
terminate. Upon a termination or cancellation by either of the Parties for any reason other than a
default by Seller, Buyer shall deliver to Seller copies of all third-party reports,plans, studies,
applications or any other matters obtained by or prepared for Buyer in connection with Buyer's
review of the Property and which relate to the physical condition of the Property, including,
without limitation, any physical inspection, engineering, and environmental reports completed
and/or obtained by Buyer in connection with Buyer's review of the Property (collectively,
"Property Condition Documents"), but excluding any documents that are subject to the attorney
client privilege or that contain proprietary or confidential information. Seller understands and
acknowledges that neither Buyer nor any of Buyer's representatives makes any representation or
warranty to Seller as to the accuracy or completeness of the Property Condition Documents and
that Buyer and Buyer's representatives have not made or will not make any attempt to verify the
data contained in the Property Condition Reports. Seller agrees that Buyer and Buyer's
representatives shall not have any liability to Seller as a result of Seller's use of the Property
Condition Documents.
4. ACTIONS PENDING CLOSING.
41 Due Diligence.
4.1.1 Proper Materials.
4.1.1.1 On or before 5:00 p.m. on the fifth (5th) day following the
Opening of Escrow, Seller shall, at Seller's sole cost and expense, to the extent within the
Seller's possession or control, provide to Buyer and Buyer's counsel true, correct, and
complete copies of all of the following documents (collectively, the "Property Materials"):
(a) Any and all surveys for the Property;
(b) All existing, proposed or draft site plans, maps, plats, landscaping plans,
construction plans and drawings, and development plans for the Property
(including, without limitation, with respect to offsite development related to the
Property);
(c) All existing environmental reports for the Property;
(d) All leases, occupancy agreements, operating agreements, and licenses that affect
the Property;
(e} All zoning stipulations, agreements, and requirements that affect or that are
proposed to affect the Property;
( All archaeological, biological, soil, geological, grading, drainage, and hydrology
reports, surveys, or assessments and any other engineering reports for the
Property;
(g) A Natural Hazards Disclosure Report in conformity with the California Natural
Hazards Disclosure Act;
(h) All records to the extent within Seller's possession or control relating to the use,
storage and disposal of all pesticides, fertilizers and other agricultural chemicals
which have been used on the Property or that Seller anticipates Seller, or its
agents or contractors, will use on the Property prior to the Close of Escrow.
(i) The contact information for all engineers, architects, draftspersons, and/or
consultants known to Seller to have information concerning the Property and/or
its development (each of whom Buyer shall be authorized to contact, discuss the
Property and/or its development with, and, if desired by Buyer, retain at Buyer's
expense);
(j) Articles of organization, bylaws, rules and regulations, budgets and resolutions of
board of directors for any owners' associations affecting the Property;
(k) All contracts with all third Parties who have provided services or supplied
materials to the Property (each of whom Buyer shall be authorized to contact,
discuss the Property and/or its development with);and
(1) Any other third-Party reports, contracts, and agreements of any kind in Seller's
possession or control pertaining to the Property.
(m) A schedule of all liens against the property, including federal and state tax liens as
well as mechanics' liens.
(n) Copies of any governmental permits, notices and approvals pertaining to
the Property.
(o) All information pertaining to any development of the Property.
(p) A list of all pending and past litigation with respect to the Property.
(q) Copies of current owner's policy of title insurance for the Property.
(r) A list of personal property owned or leased by Seller and used in connection with
the operation of the Property
41.12 Further, prior to the Due Diligence Termination Date (as defined
Seller, Seller shall make available to Buyer at Seller's offices, and Buyer shall have the right to
review, all other records in SeIler's possession or control relating to the Property.
4.1.13 Seller shall promptly ftimish to Buyer for its review (a) any of the
items described in Section 4.1.1.1 that may come into Seller's possession or control from and
after the date of this Agreement, and {b} any additional documents and information in the
possession or control of Seller reasonably requested in writing by Buyer. Except as provided in
Section 8.10, Buyer understands and acknowledges that neither Seller nor any of Seller's
representatives makes any representation or warranty to Buyer as to the accuracy or
completeness of the Property Materials and that Seller and Seller's representatives shall have not
made or will not make any attempt to verify the data contained therein.
4.1.2 Buyer's Diligence Tests.
4121 At all reasonable times from the date of this Agreement to the
Closing (or earlier termination of this Agreement), Buyer and its employees, agents, consultants,
and contractors shall be entitled, at Buyer's sole cost and expense, to: (a) enter onto the Property
to perform any inspections, investigations, studies, and tests of the Real Property (including,
without limitation, physical, engineering, soils, geotechnical, and environmental tests) that Buyer
deems reasonable; (b) review all Property Materials; and (c) investigate such other matters
pertaining to the Property as Buyer may desire. Notwithstanding the foregoing, Buyer shall not
conduct any invasive testing on the Real Property without the prior consent of Seller, which shall
not be unreasonably withheld, delayed (specifically, Seller shall respond to Buyer's request to
conduct such testing not more than twenty-four (24) hours after written notice by Buyer to
Seller), or conditioned. Any entry by Buyer onto the Real Property shall be subject to, and
conducted in accordance with, all applicable laws.
4.122 Buyer shall keep the Property free and clean of any mechanics'
liens and indemnify, protect, defend, and Bold Seller and Seller's partners, officers, directors,
shareholders, managers, members, agents, employees, and representatives (each an
"Indemnified Party" and collectively, the "Indemnified Parties") harmless from and against
any and all claims (including, without limitation, claims for mechanic's liens or material man's
liens), causes of action, demands, obligations, losses, damages, liabilities,judgments, costs, and
expenses (including, without limitation, reasonable attorneys' fees, charges, and disbursements)
(collectively, "Claims") in connection with or arising out of any inspections of the Property
carried on by or on behalf of Buyer pursuant to the terms of this Agreement, provided, however,
that Buyer shall have no responsibility or liability for (a) the negligence or willful misconduct of
any Indemnified Party; (b) any adverse condition or defect on or affecting the Property not
caused by Buyer or its employees, agents, consultants, or contractors but discovered or impacted
during their inspections including, without limitation, the pre-existing presence or discovery of
any matter (such as, but not limited to, any Hazardous Substance (as defined in this Agreement
defined)); and/or(c) the results or findings of any inspection.
4.123 Upon completion of Buyer's inspections, Buyer shall promptly
repair any material damage to the Property caused by its entry and restore the Property to
substantially the same conditions which existed prior to Buyer's entry under this Section4.1.2.
4124 The provisions of this Section 4.1.2 shall survive the Closing or
the earlier termination of this Agreement.
4.1.3 Buyer's Termination Right. Buyer shall have the right at any time on or
before 5:00 p.m. on the sixth (60th) day after the Opening of Escrow (the "Due Diligence
Termination Date") to terminate this Agreement by delivering a written notice of such termination
to Seller and Escrow Agent if Buyer determines, in its sole and absolute discretion, that the
Property is not acceptable to Buyer for any reason. Buyer shall indicate its satisfaction and/or
waiver of the Due Diligence condition described in this Section 4.1 by delivering written notice of
such satisfaction and/or waiver ("Due Diligence Approval Notice") to Seller and Escrow Agent on
or prior to the Due Diligence Termination Date. Buyer may extend the Due Diligence Termination
Date an additional two (2) times, each at sixty (60) day intervals by providing written notice
thereof, with or without cause. If Buyer fails to timely deliver a Due Diligence Approval Notice,
then this Agreement and the Escrow shall be automatically deemed terminated. If this Agreement
is terminated in accordance with this Section, then the Initial Deposit shall be immediately returned
to Buyer and the Parties shall thereafter be relieved from further liability hereunder, except with
respect to any obligations under this Agreement that are expressly stated to survive any termination
of this Agreement.
42 Title.
4.2.1 Deliveries by Seller. On or before 5:00 p.m. on the third (3rd) Business Days
after the Opening of Escrow, Seller shall cause First American Title Insurance Company ("Title
Insurer"), at its office located at 3281 East Guasti Road, Suite 440, Ontario, CA 91761 Attention
Erin West to issue and deliver to Buyer, at Buyer's sole cost and expense, (a) a current commitment
for an ALTA extended coverage Owner's Policy of Title Insurance for the Real Property (the "Title
Report") and (b) legible copies of all documents referenced as exceptions in the Title Report
(collectively with the Title Report, the "Title Documents").
4.2.2 Buyer's Review of Title. Buyer shall have until the Due Diligence
Termination Date to notify Seller in writing of any objection that Buyer may have to any matters
reported or shown in any survey or the Title Documents or any amendments or updates thereof(a
"Buyer's Title Objection Letter") (provided, however, that if any such amendments or updates are
received by Buyer after or within five (5) Business Days before the Due Diligence Termination
Date, Buyer shall have five (5) Business Days following Buyer's receipt of such amendment or
update and copies of all documents referenced in the Title Documents to notify Seller of objections
to matters shown on any such amendment or update that were not disclosed on the previously
delivered survey or Title Documents and the Closing Date shall automatically be extended as
necessary to facilitate such notice period and any subsequent periods for Seller's response and
Buyer's election as provided in subsections (i) and (ii), below). Matters shown as exceptions to
coverage in the Title Report (or any amendments or updates thereof) that are not timely objected to
by Buyer as provided above shall constitute "Permitted Exceptions". Seller shall cooperate, with
Buyer to eliminate matters objected to by Buyer, but, except as set forth of this Section 4.2.2,
Seller shall have no obligation to cure or correct any matter
objected to by Buyer. On or before the fifth (5`11) Business Day following Seller's receipt of
Buyer's Title Objection Letter, Seller may elect, by delivering written notice of such election to
Buyer and Escrow Agent ("Seller's Response"), to cause Title Insurer to remove or insure over any
matters objected to in Buyer's Title Objection Letter. If Seller fails to deliver Seller's Response
within the period set forth above, it shall be deemed an election by Seller not to cause Title Insurer
to so remove or insure over such objections. If Seller elects or is deemed to have elected not to
cause Title Insurer to so remove or insure, or if Buyer determines, in its sole discretion, that any
proposed endorsement for or insurance over an objected matter is unsatisfactory, then Buyer must
elect, by delivering written notice of such election to Seller and Escrow Agent on or before the
earlier to occur of(a) the fifth (5`h) Business Day following Buyer's receipt of Seller's Response or
(b) if no Seller's Response is received by Buyer, the fifth (5'1) Business Day following the date on
which Seller shall have been deemed to have responded, as provided above, to: (i) terminate this
Agreement, in which case the Initial Deposit, to the extent previously deposited in Escrow, shall be
immediately returned to Buyer; or (ii) proceed with this transaction, in which event those objected
to exceptions or matters that Seller has not elected to cause Title Insurer to so remove or insure
shall be deemed to be Permitted Exceptions. If Buyer fails to make such election on a timely basis,
then Buyer shall be deemed to have elected to terminate this Agreement in accordance with the
preceding clause (i). Notwithstanding anything else stated in this Agreement, in all events,
regardless of whether Buyer has given notice of objection as stated above, Seller shall be obligated
to satisfy and otherwise remove all monetary and financial liens and encumbrances in existence as
of the Agreement Date or incurred by Seller on or before the Closing Date (other than current taxes
not yet due) and any additional encumbrances incurred by Seller after the Agreement Date in
violation of any provision of this Agreement, and, except as may be otherwise specifically set forth
in this Agreement, terminate all leases, possessory agreements, licenses, and operating agreements
that affect the Property and Buyer need not object to any such matters. Seller agrees not to cause or
create any additional encumbrances or other matters affecting title to the Property to be incurred
following the Agreement Date that are not satisfied or otherwise removed on or before the Closing
Date as contemplated above.
4.2.3 Condition of Title at Closing. Upon the Closing, Seller shall sell, transfer,
and convey to Buyer fee simple title to the Real Property by a duly executed and acknowledged
grant deed, subject only to the Permitted Exceptions and the reservations and other matters, if any,
referenced or described in said Grant Deed and approved by the buyer.
43 Entitlements and Zoning. This purchase is contingent on the condition of the
general pian approval from the planning commission, and shall be determined at the
beginning of the buyers due diligence. Buyer shall have the right, during the term of this
Agreement, to pursue all property-specific entitlements in connection with Buyer's intended use
of the Property. The cost or expense of preparing for or filing for any such applications by Buyer
pursuant to this Section 4.3 shall be borne solely by Buyer.
5. DESCRIPTION OF PROPERTY.
5.1 The Real Property. As used in this Agreement, the term "Real Property" shall
mean, collectively, all of Seller's right, title, and interest in and to: (a) the Land; (b) all buildings
and related improvements on the Property (the "Improvements"); and (c) all of the rights,
privileges, appurtenances, hereditaments, easements, reversions, and remainders pertaining to or
used in connection with the Land and/or any of the Improvements, including, without limitation,
all (i) development rights and credits, air rights, water, water rights, and water stock relating to
the Land, (ii) strips and gores, streets, alleys, easements, rights-of-way, public ways, or other
rights appurtenant, adjacent, or connected to the Land, and (iii) minerals, oil, gas, and other
hydrocarbon substances in,under, or that may be produced from the Land.
5.2 The Intangible Pro er . As used in this Agreement, the term "Intangible
Property" shall mean all of Seller's right, title, and interest in and to that certain intangible
property owned by Seller or used by Seller in connection with all or any portion of the Real
Property, including, without Iimitation, all of Seller's right, title, and interest, if any, in and to:
(a) all plats, improvement plans, drawings and specifications (including, without limitation, CAD
files), and development rights and credits relating to the Property, (b) all books, records, reports,
test results, environmental assessments, if any, as-built plans, specifications, and other similar
documents and materials relating to the use, operation, maintenance, repair, construction, or
fabrication of all or any portion of the Real Property; (c) all transferable architectural, site,
landscaping or other permits, applications, approvals, authorizations, and other entitlements
affecting any portion of the Real Property; (d) all credits (including without limitation water
meter credits), reimbursements and refunds of any fees and/or deposits paid in connection with
the Real Property; and (e) all transferable guarantees, warranties, and utility contracts relating to
all or any portion of the Real Property.
6. CONDITIONS TO CLOSING.
61 Buyer's Closing Conditions. The obligation of Buyer to complete the transaction
contemplated by this Agreement is subject to the following conditions precedent (and conditions
concurrent, with respect to deliveries to be made by Seller at the Closing) (the "Buyer's Closing
Conditions"), which conditions may be waived, or the time for satisfaction of such conditions
extended,by Buyer only in a writing executed by Buyer:
6.1.1 Title. Title Insurer shall be irrevocably and unconditionally prepared and
committed to issue to Buyer (with an effective date not earlier than the Closing Date), an ALTA
extended coverage owner's policy of title insurance ("ALTA Extended Policy") in favor of Buyer
for the Real Property (a) showing fee title to the Real Property vested in Buyer, (b) with liability
coverage in an amount equal to the Purchase Price, (c) with those endorsements reasonably
requested by Buyer including, without limitation, a Mechanic's Lien Endorsement, and (d)
containing no exceptions other than the Permitted Exceptions and the reservations and other matters
referenced or described in the Grant Deed (the "Owner's Title Policy"). Buyer shall pay any
difference in the cost of the premium for a standard ALTA owner's policy of title insurance and the
ALTA Extended Policy. If a new or updated survey is required to enable the Title Company to
issue the ALTA Extended Policy, Buyer shall obtain the same, at its sole cost and expense, in a
timely manner so as to facilitate the issuance of the ALTA Extended Policy upon the Close of
Escrow.
6.1.2 Seller's Due Performance. All of the representations and warranties of Seller
set forth in Section 8 shall be true, correct, and complete in all material respects as of the Closing
Date, and Seller, on or prior to the Closing Date, shall have complied with and/or performed all of
the obligations, covenants, and agreements required on the part of Seller to be complied with or
performed pursuant to the terms of this Agreement on or prior to the Closing.
6.1.3 Physical Condition of Property. The physical condition of the Real Property
shall be substantially the same on the Closing Date as on the Agreement Date, except for reasonable
wear and tear and any damages due to any act of Buyer or Buyer's representatives.
6.1.4 No Moratorium. As of the Closing Date, there shall be no moratorium,
injunction, restraining order, or other limitation .imposed by any Applicable Authority, court,
administrative body, or private entity that precludes or prevents the issuance of building permits or
certificates of occupancy with respect to the Real Property and/or the construction of residences or
other improvements on the Real Property.
6.1.5 Bankruptcy. No action or proceeding shall have been commenced by or
against Seller under the federal bankruptcy code or any state law for the relief of debtors or for the
enforcement of the rights of creditors, and no attachment, execution, lien, or levy shall have
attached to or been issued with respect to Seller's interest in the Property or any portion thereof.
6.1.6 Posscssion/Removal of Personal-Property. Upon the Close of Escrow, Seller
shall deliver exclusive and vacant possession of the Property to Buyer. Prior to the Close of Escrow
Seller shall have the right to remove any or all improvements and Seller's equipment, trade fixtures
or other personal property. Any such salvage and removal shall be performed pursuant to all
required permits, in accordance with all laws, rules and regulations, and in such manner that the
Property is delivered upon the Close of Escrow without any safety issues on site, such as large
holes, partially razed structures, or any other similarly unsafe conditions. Any improvements or
personal property of Seller remaining on the Property after the Close of Escrow shall be
conclusively deemed abandoned by Seller (the "Abandoned Personal Property"). Seller waives
and relinquishes all rights, title, interest and claims in any such Abandoned Personal Property and
effective upon abandonment transfers, conveys and assigns all of its right, title and interest in such
Abandoned Personal Property to Buyer for disposition as determined by Buyer in Buyer's sole and
absolute discretion.
62 Seller's Closing Conditions. All of the representations and warranties of Buyer
set forth in Section 9 shall be true, correct, and complete in all material respects as of the Closing
Date, and Buyer, on or prior to the Closing Date, shall have complied with and/or performed all
of the obligations, covenants, and agreements required on the part of Buyer to be complied with
or performed pursuant to the terms of this Agreement on or prior to the Closing.
7. CLOSING.
7.1 Closing Date. Subject to the provisions of this Agreement, the Closing shall take
place on or before that date (the "Closing Date") which is the Fifteen days (15) days after the
final due diligence period has expired. As used in this Agreement, the "Closing" shall mean the
recordation of the Grant Deed in the Official Records.
72 Deliveries by Seller. On or before the Closing Date, Seller, at its sole cost and
expense, shall deliver or cause to be delivered into Escrow the following items, documents, and
instruments, each dated as of the Closing Date, fully executed and, if appropriate acknowledged,
and, if applicable, in proper form for recording:
7.2.1 Grant Deed. The Grant Deed conveying the Real Property to Buyer; in a
form mutually acceptable to Buyer and Seller
7.2.2 Non-Foreign Affidavit. A Non-Foreign Affidavit.
Affidavit"); 7.2.3 State Affidavit. A California Franchise Tax Board Foran 593-C (the"State
Property. 7.2.4 General Assignment. A general assignment to Buyer of the Intangible
7.2.5 Owner's Affidavit. An owner's affidavit or seller's certificate duly
executed by Seller in the form customarily required by title insurance companies in the county
in which the Property is located, in connection with the issuance of title insurance, to remove
standard exceptions for mechanics Iiens, the gap period from the latest title update of Buyer's
title insurance commitment and Parties in possession;
7.2.6 Proof of Authorijy. Such proof of Seller's authority and authorization to
enter into this Agreement and the transaction contemplated hereby, and such proof of the power
and authority of the individual(s) executing or delivering any instruments, documents, or
certificates on behalf of Seller to act for and bind Seller as may be reasonably required by Title
Insurer or Escrow Agent;and
7.2.7 Such other items, documents, and instruments as may be reasonably required
by Buyer, Title Insurer, Escrow Agent, or otherwise in order to effectuate the provisions of this
Agreement and the Closing and/or otherwise to fulfill the covenants and obligations to be
performed by Seller at the Closing pursuant to this Agreement.
7.2.8 Seller shall deliver to Title Insurer, a duly executed copy of the closing
statement previously prepared and delivered by Title Insurer to Seller and Buyer.
73 Deliveries by Buyer. On or before the Closing Date, Buyer, at its sole cost and
expense, shall deliver or cause to be delivered into Escrow the following funds and the following
items, documents, and instruments, each dated as of the Closing Date, fully executed and, if
appropriate acknowledged, and, if applicable, in proper form for recording:
7.3.1 Purchase Price. Cash or other immediately available funds in an amount
equal to the unpaid sum of the Purchase Price (less the Deposit) and all of Buyer's share of the
Closing Costs (as defined below) and otherwise sufficient to close the transaction contemplated in
this Agreement;
7.3.2 Proof of Authority. Such proof of Buyer's authority and authorization to
enter into this Agreement and the transaction contemplated hereby, and such proof of the power and
authority of the individual(s) executing or delivering any instruments, documents, or certificates on
behalf of Buyer to act for and bind Buyer as may be reasonably required by Title Insurer or Escrow
Agent;
7.3.3 Other. Such other items, documents, and instruments as may be reasonably
required by Seller, Title Insurer, Escrow Agent, or otherwise in order to effectuate the provisions of
this Agreement and the Closing and/or otherwise to fulfill the covenants and obligations to be
performed by Buyer at the Closing pursuant to this Agreement.
7.3.4 Buyer shall deliver to Title Insurer a duly executed copy of the closing
statement.
7.4 Actions by Escrow Agent. Provided that Escrow Agent shall not have received
written notice from Buyer or Seller of the failure of any condition to the Closing or of the
termination of the Escrow and this Agreement, when Buyer and Seller have deposited into
Escrow the documents and funds required by this Agreement and Title Insurer is irrevocably and
unconditionally prepared and committed to issue the Owner's Title Policy in accordance with the
terms of this Agreement, Escrow Agent shall, in the order and manner indicated in this
Agreement below, take the following actions:
7.4.1 Recording. Cause the Grant Deed and any other documents customarily
obtain conformed copies of such items for distribution to Buyer and Seller.
7.4.2 Funds. Disburse all funds as follows:
7.4.2.1 Pursuant to the Closing Statement (as defined below), retain for
Escrow Agent's own account all escrow fees and costs, disburse to Title Insurer the fees and
expenses incurred in connection with the issuance of the Owner's Title Policy, and disburse to
any other persons or entities entitled to receive such fees and costs the amount of any other
Closing Costs;
7.422 Disburse to Seller an amount equal to the Purchase Price, less or
plus the net debit or credit to Seller by reason of the proration's and allocations of Closing Costs
provided for in this Agreement;and
7.423 Disburse to the Party who deposited the same any remaining
funds in the possession of Escrow Agent after the payments pursuant to Sections 7.4.2.1 and
7.4.2.2 above have been completed.
7.4.3 Delivery of Documents. Deliver: (a) to Seller (i) one original of all
documents deposited into Escrow (other than the Grant Deed, the other documents recorded
pursuant to the terms of this Agreement, the Non-Foreign Affidavit, the State Affidavit and the
General Assignment), (ii) one copy of the Non-Foreign Affidavit, the State Affidavit and the
General Assignment, and (iii) one conformed copy of each document recorded pursuant to the
terms of this Agreement; and (b) to Buyer, (i) one original of all documents deposited into Escrow
(other than the Grant Deed and the other documents recorded pursuant to the terms of this
Agreement, but including, without limitation, the Non-Foreign Affidavit and the State Affidavit),
and (ii) the one conformed copy of each document recorded pursuant to the terms of this
Agreement. Originals of any documents recorded at Closing shall be delivered after such recording
as indicated thereon.
7.4.4 Owner's Title Policy. Cause Title Insurer to issue or be irrevocably and
unconditionally prepared and committed to issue the Owner's Title Policy to Buyer.
7.5 Proration's/Apportionment.
75.1 Method of Proration. Taxes and assessments affecting the Real Property
shall be prorated between Buyer and Seller as of the Closing Date based on a 360-day year. All
non-delinquent real estate taxes and assessments on the Property shall be prorated based on the
actual current tax bill, but if such tax bill has not yet been received by Seller by the Closing Date or
if supplemental taxes are assessed after the Closing for the period prior to the Closing, the Parties
shall make any necessary adjustment after the Closing by cash payment to the Party entitled to the
same so that Seller shall have borne all real property taxes, including all supplemental taxes,
allocable to the period prior to the Closing and Buyer shall bear all real property taxes, including all
supplemental taxes, allocable to the period from and after the Closing. If any real property taxes or
assessments or any expenses attributable to the Real Property and allocable to the period prior to the
Closing are discovered or billed after the Closing, the Parties shall make any necessary adjustment
after the Closing by cash payment to the Party entitled to the same within five (5) Business Days
following the discovery thereof or the receipt by any Party of the bill therefor, as the case may be,
so that Seller shall have borne all real property taxes, assessments and expenses allocable to the
period prior to the Closing and Buyer shall bear all real property taxes, assessments and expenses
allocable to the period from and after the Closing.
752 Survival. The obligations under this Section 7.5 shall survive the Closing
and the delivery and recordation of the Grant Deed for theProperty.
7.6 Closing Costs. Each Party shall pay its own costs and expenses arising in
connection with the Closing (including, without limitation, its own attorneys' and advisors' fees,
charges, and disbursements), except the following costs (the "Closing Costs"), which shall be
allocated between the Parties as follows:
7.6.1 Escrow Agent's escrow fees and costs shall be shared equally by Buyer and
Seller;
7.62 The cost of the Owner's Title Policy attributable to the standard coverage
portion shall be paid by Seller;
7.6.3 The cost of the Owner's Title Policy attributable to the extended coverage
portion shall be paid by Buyer;
7.6.4 The cost of any items required to be provided by Seller pursuant to Section
4.2.2, shall be paid by Seller, and the costs of any other endorsements to the Owner's Title Policy
shall be paid by Buyer;
7.65 Seller shall pay the cost of any documentary transfer taxes in connection with
the recording of the Grant Deed;
7.6.6 Seller shall pay all recording costs for recording the Grant Deed;and
7.6.7 All other closing fees and costs shall be charged to and paid by party
incurring the same.
7.7 Closing Statement. Three (3) Business Days prior to the Closing Date, Escrow
Agent shall deliver to each of the Parties for their review and approval a preliminary closing
statement (the "Preliminary Closing Statement") setting forth: (a) the proration amounts
allocable to each of the Parties pursuant to Section. 7.5; and (b) the Closing Costs allocable to
each of the Parties pursuant to Section 7.6. Based on each of the Party's comments, if any,
regarding the Preliminary Closing Statement, Escrow Agent shall revise the Preliminary
Closing Statement and deliver a final, signed version of a closing statement to each of the
Parties at the Closing(the "Closing Statement").
7.8 -Deliveries Outside of Escrow. Upon the Closing, Seller shall deli er vacant, sole,
and exclusive possession of the Property to Buyer, subject only to the Permitted Exceptions.
Further, Seller hereby covenants and agrees to deliver to Buyer, on or prior to the Closing, the
Intangible Property, including, without limitation, the original Property Materials to the extent
within Seller's possession or control. Effective immediately upon the Closing, any personal
property remaining on the Land shall be deemed abandoned and may be removed and disposed
of by Buyer at its sole cost and expense. This Section 7.8 shall survive the Closing.
8. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES.
Seller represents, and warrants to and agrees with Buyer, as of the Agreement Date and
as of the Closing Date, as follows:
8.1 Due Organization. Seller is a municipal corporation duly formed under the laws
of the State of California.
8.2 Seller's Authority; Validity of Agreements. Seller has full right, power, and
authority to sell the Property to Buyer as provided in this Agreement and to carry out its
obligations under this Agreement. The individual(s) executing this Agreement and the
instruments referenced in this Agreement on behalf of Seller has/have the legal power, right, and
actual authority to bind Seller to the terms hereof and thereof. This Agreement is, and all other
instruments, documents and agreements to be executed, and delivered by Seller in connection
with this Agreement shall be, duly authorized, executed, and delivered by Seller and the valid,
binding, and enforceable obligations of Seller (except as enforcement may be limited by
bankruptcy, insolvency, or similar laws) and do not, and as of the Closing Date will not result in
any violation of, or conflict with, or constitute a default under, any provisions of any agreement
of Seller or any mortgage, deed of trust, indenture, lease, security agreement, or other instrument,
covenant, obligation, or agreement to which Seller or the Property is subject, or any judgment,
law, statute, ordinance, writ, decree, order, injunction, rule, ordinance, or governmental
regulation or requirement affecting Seller or the Property.
83 No Third-Party Rights. Except as disclosed in the Title Report, Seller is not
aware of any leases or occupancy agreements that grant third-Parties any possessory or rights to
use all or any part of the Property.
8.4 Litigation, Seller is not aware of (a) any actions, investigations, suits, or
proceedings pending or threatened that affect the Property, the ownership or operation thereof, or
the ability of Seller to perform its obligations under this Agreement, and (b) there are no
judgments, orders, awards, or decrees currently in effect against Seller with respect to the
ownership or operation of the Property that have not been fully discharged prior to the
Agreement Date.
85 Zoning and Condemnation. Except as disclosed in the Property Materials, Seller
is not aware of any planned or pending proceedings to alter or restrict the zoning or other use
restrictions applicable to the Property, to condemn all or any portion of the Property by eminent
domain proceedings or otherwise, or to institute a moratorium or similar restriction on building
on or issuing certificates of occupancy for construction on the Property.
8.6 No Violations of Environmental Laws. To Seller's knowledge and except as
disclosed in the Property Materials: (a) the Property is not in, nor has it been or is it currently
under investigation for violation of any federal, state, or local law, ordinance, or regulation
relating to industrial hygiene, worker health and safety, or to the environmental conditions in, at,
on, under, or about the Property, including, but not limited to, soil and groundwater conditions
("Environmental Laws"); (b) the Property has not been subject to a deposit of any Hazardous
Substance; (c) neither Seller nor any third Party has used, generated, manufactured, stored, or
disposed in, at, on, or under the Property any Hazardous Substance; and (d) there is not now in,
on, or under the Property any underground or above ground storage tanks or surface
impoundments, any asbestos containing materials, or any polychlorinated biphenyls used in
hydraulic oils, electrical transformers, or other equipment. Seller hereby assigns to Buyer as of
the Closing all claims, counterclaims, defenses, and actions, whether at common law or pursuant
to any other applicable federal, state or other laws that Seller may have against any third Party or
Parties relating to the existence or presence of any Hazardous Substance in, at, on, under, or
about the Property. For purpose of this Agreement, the term "Hazardous Substance" shall
include any wastes, materials, substances, pollutants, and other matters regulated by
Environmental Laws.
8.7 No Other Commitments. Except as may be disclosed in the Title Report, Seller
has not made any commitment or representation to any governmental authority, or any adjoining
or surrounding property owner, that would in any way be binding on Buyer or would interfere
with Buyer's ability to develop and improve the Property for residential, commercial, or retail
purposes, and Seller shall not make any such commitment or representation that would affect all
or any portion of the Property without Buyer's written consent.
8.8 Wells. Except as disclosed in the Property Materials, Seller is not aware of wells,
drilling holes or wellheads located on or under theProperty.
8.9 Landfill/Waste Disposal Site. Seller has not used the Property and, except as
disclosed in the Property Materials, Seller is not aware that the Property has ever been used as a
landfill, waste disposal site, or burial site.
8.10 Property.Materials. Seller is not aware of any material defects, deficiencies, or
inaccuracies in any of the Property Materials.
8.11 Permits and Approvals. To Seller's knowledge, all work performed on the
Property by or at the request of Seller including, without limitation, brush removal, has been
performed in material compliance with all applicable laws, rules and regulations and pursuant to
all required permits and approvals.
8.12 Williamson Act. Seller represents that no land conservation contract pursuant to
the Williamson Act, as defined in Chapter 7 of Division 1 of Title 5 (Sections 51200, et seq.) of
the California Government Code, as amended, or any successor statute thereto ("Williamson Act
Contract"), currently affects the Property. If a Williamson Act Contract is in effect with respect
to the Property, Seller agrees that Seller shall be responsible, at its sole cost and expense, to
cause the termination of the Williamson Act Contract on or before the Close of Escrow such that
Buyer shall acquire title to the Property free and clear of the Williamson ActContract.
8.13 Mechanics Liens. To Seller's knowledge, all bills and claims for labor performed
or materials furnished to or for the benefit of the Property for all periods of time prior to the
Effective Date or the closing, as applicable, have been paid in full and there are no mechanics' or
material men's liens (whether or not perfected) on or affecting the Property.
8.14 Violations. Seller has not received written notice of any uncured violation of any
federal, state or local law relating to the condition, use, or operation of the Property which would
materially, adversely affect the intended development of the Property.
8.15 Actual Knowledge. For purposes hereof, "Seller is not aware" or "to Seller's
knowledge", or like tenns shall mean the actual knowledge of the party that is most
knowlegeable, with duty of investigation or inquiry. In furtherance thereof, Seller hereby
warrants and represents that Mr. Troyer is the Seller's representative most knowledgeable
regarding the Property.
8.16 Survival. All of the representations, warranties, and agreements of Seller set forth
in this Agreement shall be true upon the Agreement Date, shall be deemed to be repeated at and
as of the Closing Date, and shall survive the delivery of the Grant Deed and the Closing for a
period of one (1) year. Prior to a termination of this Agreement, Seller shall not take any action,
fail to take any required action, or willfully allow or consent to any action that would cause any
of Seller's representations or warranties to become untrue. If any representation or warranty of
Seller was tate as of the date of this Agreement, but is not true as of the Closing Date, then Seller
shall disclose this changed fact to Buyer in writing. So long as Seller makes the foregoing
disclosure and the change of circumstances regarding the representation or warranty did not arise
due to the fault of Seller, then Seller shall not be in breach of this Agreement due to the fact that
the representation or warranty has become untrue as of the Closing Date; provided, however, the
fact that any representation or warranty under this Section 8 is untrue as of the Closing Date shall
still be a failure of a condition pursuant to Section 6.1.2. and Buyer may terminate this
Agreement as a result of said failure and shall be entitled to a refund of its deposit.
Notwithstanding the foregoing, if Buyer has actual knowledge of the incorrectness of any
representation or warranty set forth in this Section 8 as of the Close of Escrow and Buyer has
not elected to terminate this Agreement as provided in this Agreement, then Buyer will be
deemed to have waived any claim against Seller for the incorrectness of such representation or
warranty.
9. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to Seller, as of the Agreement Date and as of the Closing
Date, as follows:
91 Due Or-anization. Buyer is a limited liability company duly organized, validly
existing, and in good standing under the laws of the State of California and is authorized to do
business in the State of California.
9.2 Buyer's Authority; Validity of Agreements. Buyer has full right, power, and
authority to purchase and acquire the Property from Seller as provided in this Agreement and to
carry out its obligations hereunder. The individual(s) executing this Agreement and the
instruments referenced in this Agreement on behalf of Buyer has/have the legal power, right, and
actual authority to bind Buyer to the terms of this Agreement and such instruments and
documents. This Agreement is, and all other instruments, documents, and agreements to be
executed and delivered by Buyer in connection with this Agreement shall be, duly authorized,
executed, and delivered by Buyer and the valid, binding, and enforceable obligations of Buyer
(except as enforcement may be limited by bankruptcy, insolvency, or similar laws) and do not,
and as of the Closing Date will not, violate any provision of any law, statute, ordinance, rule,
regulation, agreement or judicial order to which Buyer is a Party or to which Buyer is subject.
93 Survival. All of the representations, warranties, and agreements of Buyer set
forth in this Agreement shall be true upon the Agreement Date, shall be deemed to be repeated at
and as of the Closing Date and shall survive the delivery of the Grant Deed and the Closing for a
period of one (1) year. Prior to a termination of this Agreement, Buyer shall not take any action,
fail to take any required action, or willfully allow or consent to any action that would cause any
of Buyer's representations or warranties to become untrue.
10. AS-IS.
THE PARTIES HEREBY ACKNOWLEDGE AND AGREE AS FOLLOWS: (A)
BUYER IS A SOPHISTICATED BUYER WHO IS FAMILIAR WITH THIS TYPE OF
PROPERTY; (B) EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS
AGREEMENT, THE DEED, AND/OR ANY OTHER DOCUMENT OR INSTRUMENT
DELIVERED BY SELLER AT CLOSING (THE "EXPRESS REPRESENTATIONS"),
NEITHER SELLER NOR ANY OF ITS AGENTS, REPRESENTATIVES, BROKERS,
OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, OR EMPLOYEES HAS MADE
OR WILL MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY; AND (C) EXCEPT AS MAY BE SPECIFICALLY SET
FORTH IN THIS AGREEMENT (INCLUDING SECTION 8.6 AS IT RELATES TO THE
LAND AND IMPROVEMENTS), THE PROPERTY IS BEING SOLD TO BUYER IN ITS
PRESENT "AS IS" CONDITION SUBJECT TO THE EXPRESS REPRESENTATIONS.
SUBJECT TO THE EXPRESS REPRESENTATIONS AND THE TERMS OF THIS
AGREEMENT, BUYER WILL BE AFFORDED THE OPPORTUNITY TO MAKE ANY AND
ALL INSPECTIONS OF THE PROPERTY AND SUCH RELATED MATTERS AS BUYER
MAY REASONABLY DESIRE AND, ACCORDINGLY, SUBJECT TO THE EXPRESS
REPRESENTATIONS, BUYER WILL RELY SOLELY ON ITS OWN DUE DILIGENCE
AND INVESTIGATIONS IN PURCHASING THE PROPERTY. IN CONNECTION WITH
THE FOREGOING (EXCEPT AS TO SECTION 8.6 WITH RESPECT TO THE LAND AND
IMPROVEMENTS), BUYER EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS
WHICH BUYER MAY HAVE UNDER 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 SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THEDEBTOR."
11. RISK OF LOSS.
11.1 Condemnation. If, prior to any Closing, all or any portion of the Property is taken
by condemnation or eminent domain (or is the subject of a pending or contemplated taking
which has not been consummated), Seller shall immediately notify Buyer in writing of such fact.
In such event, Buyer shall have the option to terminate this Agreement upon written notice to
Seller given within ten (10) Business Days after receipt of such notice from Seller, in which
event the Deposit shall be returned to Buyer. Notwithstanding the foregoing, Buyer's failure to
provide written notice of Buyer's election to terminate within such ten (10) Business Day period
shall be deemed Buyer's election to terminate this Agreement. Prior to any termination or
deemed termination of this Agreement, Buyer shall have the right to participate in any
proceedings and negotiations with respect to the taking and any transfer in lieu of taking (and
Seller shall not consummate any transfer in lieu of taking without Buyer's prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed). If Buyer waives the
right to terminate this Agreement and elects to proceed with the Closing, then (a) Seller, at, and
as a condition precedent to Buyer's obligation to proceed with, the Closing, must: (i) pay to
Buyer (or direct Escrow Agent to credit Buyer against the Purchase Price for) the amount of all
awards for the taking (and any consideration for any transfer in lieu of taking) actually received
by Seller; and (ii) assign to Buyer by written instrument reasonably satisfactory to Buyer all
rights or claims to any future awards for the taking (and any consideration for any transfer in lieu
of taking); and (b) the Parties shall proceed to the Closing pursuant to the terms hereof without
further modification of the terms of this Agreement.
11.2 Casualty. Prior to the Closing and notwithstanding the pendency of this
Agreement, the entire risk of loss or damage by earthquake, hurricane, tornado, flood, landslide,
fire, sinkhole, contamination by hazardous materials or other casualty shall be borne and
assumed by Seller. If, prior to the Closing, any portion of the Property is damaged as a result of
any earthquake, hurricane, tornado, flood, sinkhole, landslide, fire, contamination by hazardous
materials or other casualty, Seller shall immediately notify Buyer in writing of such fact. In such
event, Buyer shall have the option to terminate this Agreement upon written notice to Seller
given within ten (10) Business Days after receipt of any such notice from Seller, in which event
the Deposit shall be returned to Buyer. Notwithstanding the foregoing, Buyer's failure to provide
written notice of Buyer's election to terminate within such ten (10) Business Day period shall be
deemed Buyer's election to terminate this Agreement. Prior to any termination or deemed
termination of this Agreement, Buyer shall have the right to participate in any adjustment of the
insurance claim. If Buyer waives the right to terminate this Agreement and elects to proceed
with the Closing, then (a) Seller, at, and as a condition precedent to Buyer's obligation to
proceed with, the Closing, must either: (i) pay to Buyer (or direct Escrow Agent to credit Buyer
against the Purchase Price for) the antount of any insurance proceeds actually received by Seller
plus the amount of any deductible under Seller's insurance; or (ii) if no insurance proceeds have
been received by Seller, assign to Buyer by written instrument reasonably satisfactory to Buyer
all rights or claims to the insurance proceeds and credit Buyer against the Purchase Price for any
deductible payable under Seller's insurance policy; and (b) the Parties shall proceed to the
Closing pursuant to the terms hereof without further modification of the terms of thisAgreement.
12. REMEDIES.
12.1 Default by Seller. If Seller shall breach any of the terms or provisions of this
Agreement or otherwise fail to perform any of Seller's obligations under this Agreement at or
prior to Closing, and if such failure continues without cure by Seller for five (5) Business Days
after Buyer provides Seller and Escrow Agent with written notice thereof(a "Seller Default"),
and provided Buyer is not then in default, then Buyer may, as Buyer's sole remedies for such
failure, but without limiting Buyer's right to recover attorneys' fees pursuant to Section 14.13
below: (a) waive the effect of such matter and proceed to consummate this transaction; (b) cancel
this Agreement and receive a full refund of the Deposit and recover from Seller the reasonable
out-of-pocket expenses incurred by Buyer related to the Property and this transaction, which
amounts shall be payable by Seller to Buyer within five (5) Business Days following receipt by
Seller of written request therefor from Buyer together with copies of invoices evidencing such
expenses; or (c) proceed with any remedies available to Buyer at law or in equity, which may,
without limitation, include the bringing of an action against Seller for specific performance
and/or recovery of the Deposit and any other damages suffered or incurred by Buyer as a result
of any breach or failure by Seller to perform any of Seller's obligations under this Agreement.
122 Default by Buyer. IF BUYER SHALL BREACH ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR OTHERWISE FAIL TO PERFORM ANY OF
BUYER'S OBLIGATIONS UNDER THIS AGREEMENT AND IF SUCH FAILURE
CONTINUES WITHOUT CURE BY BUYER FOR FIVE (5) BUSINESS DAYS AFTER
SELLER PROVIDES BUYER AND ESCROW AGENT WITH WRITTEN NOTICE
THEREOF, AND PROVIDED SELLER IS NOT THEN IN DEFAULT, THEN SELLER MAY
WAIVE SUCH BREACH AND PROCEED TO CONSUMMATE THIS TRANSACTION IN
ACCORDANCE WITH THE TERMS HEREOF, OR SELLER MAY, AS ITS EXCLUSIVE
REMEDY, CANCEL THIS AGREEMENT AND RETAIN THE DEPOSIT AS
LIQUIDATED DAMAGES AND AS CONSIDERATION FOR THE ACCEPTANCE OF
THIS AGREEMENT AND FOR TAKING THE PROPERTY OFF THE MARKET, AND
NOT AS A PENALTY. BUYER AND SELLER HAVE DETERMINED AND HEREBY
AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT, IF
NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY
THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER IF BUYER
FAILS TO PERFORM ANY OF ITS OBLIGATIONS IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT, AND THE PARTIES AGREE THAT A
REASONABLE ESTIMATE OF SUCH DAMAGES UNDER THE CIRCUMSTANCES IS AN
AMOUNT EQUAL TO THE DEPOSIT. ACCORDINGLY, BUYER AND SELLER AGREE
THAT IF BUYER BREACHES ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT
OR OTHERWISE DEFAULTS HEREUNDER, SELLER MAY RETAIN THE DEPOSIT AS
LIQUIDATED DAMAGES. THE PAYMENT AND RETENTION OF THE DEPOSIT AS
LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT
IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO
CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.
Se 's ' lals Buyer's Initials
13. BROKERS.
The Parties acknowledge that Buyer is solely being represented by real estate broker,
Debra Hanna, BRE #01473392 with respect to this transaction. Both Parties agree that Buyer
shall owe real estate brokerage commissions in the amount of four percent (4%) to said
broker payable at close of escrow. Each Party shall indemnify the other and the broker Debra
Hanna for any and all claims for brokerage commissions or finder's fees from any third party
that may arise or be alleged to arise out of the acts of that Party.
14. MISCELLANEOUS PROVISIONS.
141 Entire Agreement. This Agreement, constitutes the entire agreement between
Buyer and Seller pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, letters of intent, term sheets, negotiations, and discussions, whether oral or
written, of the Parties, and there are no warranties, representations, or other agreements, express
or implied, made to either Party by the other Party in connection with the subject matter hereof
except as specifically set forth in this Agreement or in the documents delivered pursuant hereto
or in connection herewith.
142 Modification; Waiver. No supplement, modification, waiver, or termination of
this Agreement shall be binding unless executed in writing by the Party to be bound thereby. No
waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
143 Notices. All notices, consents, requests, reports, demands or other
communications hereunder (collectively, "Notices") shall be in writing and may be given
personally, by registered or certified mail, by facsimile transmission, electronic mail, by courier,
or by Federal Express (or other reputable overnight delivery service) for overnight delivery, as
follows:
To Buyer. PatricI: Obrien and/or Assignee
1040 S. Mt Vernon Ave. 9G-285
Colton, CA 92324
Email: pobrienl@me.com
To Seller: City of Redlands
P.O. Box 3005
Redlands, California 92373
Attention:
Telephone:
Email:
With A Copy To: City Attorney
City of Redlands
Attention:
Telephone:
Email:
To Escrow Agent: First American Escrow andTitle
3281 East Guasti Road, Suite 440,
Ontario, CA 91761
Direct: 909-510-6206
Attention: Kelly Simoneau
Email: KSimoneau(@,firstam.com
To Broker: Debra Hanna
PO BOX 365 Lorna Linda, CA 92354
909-528-2512
realestatep,debbiehanna.com
or to such other address or such other person as the addressee Party shall have last designated by
Notice to the other Party and Escrow Agent. All Notices shall be deemed to have been given
three (3) days following deposit in the United States Postal Service (postage prepaid) or, upon
receipt, if sent by overnight delivery service, courier, facsimile transmission (so long as
confirmed by the appropriate automatic confirmation page), electronic mail (so long as receipt is
acknowledged or otherwise confirmed), or personally delivered. Notice to a Party shall not be
effective unless and until each required copy of such Notice is given. The inability to deliver a
Notice because of a changed address of which no Notice was given or an inoperative facsimile
number for which no Notice was given of a substitute number, or any rejection or other refusal to
accept any Notice, shall be deemed to be the receipt of the Notice as of the date of such inability
to deliver or rejection or refusal to accept. Any Notice to be given by any Party may be given by
legal counsel for such Party. Telephone numbers are provided in this Agreement for
convenience only and shall not alter the manner of giving Notice set forth in this Section 14.4.
144 Expenses. Subject to the provision for payment of the Closing Costs in
accordance with the terms of Section 7.6 of this Agreement and of any other provision of this
Agreement, whether or not the transaction contemplated by this Agreement shall be
consummated, all fees and expenses incurred by any Party hereto in connection with this
Agreement shall be borne by such Party.
145 Severability. Any provision or part of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall, as to such situation and such jurisdiction,
be ineffective only to the extent of such invalidity and shall not affect the enforceability of the
remaining provisions hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction.
14.6 Successors and Assigns. Neither Seller nor Buyer shall assign its rights under this
Agreement without the consent of the other Party, which consent shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, either Party shall have the right, without
the consent of the other, to assign its rights under this Agreement to an affiliate entity directly or
indirectly controlling, controlled by or under common control with the assigning Party or an
entity in which such assigning Party or such an affiliate directly or indirectly owns a financial
and voting interest and directly or indirectly is responsible for day to day management of the
entity provided such assignee assumes such Party's obligations hereunder pursuant to a written
agreement, a copy of which shall be provided to the other Party by the assigning Party.
Notwithstanding any such assignment, no assignment shall relieve the assignor of any
obligations or liability under this Agreement. Subject to the foregoing, all of the Parties' rights,
duties, benefits, liabilities, and obligations under this Agreement shall inure to the benefit of, and
be binding upon, their respective successors and assigns.
147 Counterparts, This Agreement may be executed in as many counterparts as may
be deemed necessary and convenient, and by the different Parties hereto on separate
counterparts, each of which, when so executed, including, without limitation, by .pdf scanned
counterparts of any initialed or executed pages delivered via electronic mail, shall be deemed an
original, but all such counterparts shall constitute one and the same instrument.
14.8 Governing Law Jurisdiction.;... Waiver of Ju • Judicial Reference. This
Agreement shall be governed by and construed under the laws of the State of California without
regard to conflicts-of-laws principles that would require the application of any other law. Each
Party hereby consents to the exclusive jurisdiction of any court of competent jurisdiction in San
Bernardino County in any action related to or arising binder this Agreement.
149 Headi 7gu. The Section headings of this Agreement are for convenience of
reference only and shall not be deemed to modify, explain, restrict, alter, or affect the meaning or
interpretation of any provision hereof.
1410 Time of Essence. Time shall be of the essence with respect to all matters
contemplated by this Agreement.
14.11 Further Assurances. In addition to the actions recited in this Agreement and
contemplated to be performed, executed, and/or delivered by Seller and Buyer, daring the term
of this Agreement and after the Closing, Seller and Buyer agree to perform, execute, and/or
deliver or cause to be performed, executed, and/or delivered any and all such further acts,
instruments, deeds, and assurances as may be reasonably required to consummate the transaction
contemplated hereby. In furtherance of the foregoing, so long as Buyer is not in default under
the terms of this Agreement, Seller will cooperate, as reasonably needed, and at no cost to Seller,
in Buyer's due diligence review process, which shall include but not be limited to Seller's consent
to Buyer's unrestricted access to agencies, representatives, tenants, consultants and other parties
familiar with the Property and the execution and delivery of such applications or other
documents as reasonably requested by Buyer.
14.12 Construction. As used in this Agreement, the masculine, feminine, and neuter
gender and the singular or plural shall each be construed to include the other whenever the
context so requires. This Agreement shall be construed as a whole and in accordance with its
fair meaning, without regard to any presumption or rule of construction causing this Agreement
or any part of it to be construed against the Party causing the Agreement to be written. The
Parties acknowledge that each has had a frill and fair opportunity to review the Agreement and to
have it reviewed by counsel. If any words or phrases in this Agreement have been stricken,
whether- or not replaced by other words or phrases, this Agreement shall be construed (if
otherwise clear and unambiguous) as if the stricken matter never appeared and no inference shall
be drawn from the former presence of the stricken matters in this Agreement or from the fact that
such matters werestricken.
14.13 Attorneys' Fees. If either Party brings an action or proceeding against the other
Party to enforce or interpret any of the covenants, conditions, agreements, or provisions of this
Agreement, the prevailing Party in such action or proceeding shall be awarded all costs and
expenses of such action or proceeding, including, without limitation, attorneys' fees (including
fees for a Party's use of in-house counsel), charges, disbursements, and the fees and costs of
expert witnesses. If any Party secures a judgment in any such action or proceeding, then any
costs and expenses (including, but not limited to, attorneys' fees and costs) incurred by the
prevailing Party in enforcing such judgment, or any costs and expenses (including, but not
limited to, attorneys' fees and costs) incurred by the prevailing Party in any appeal from such
judgment in connection with such appeal shall be recoverable separately from and in additionto
any other amount included in such judgment. The preceding sentence is intended to be severable
from the other provisions of this Agreement, and shall survive and not be merged into any such
judgment. This Section shall survive Closing and any earlier termination of this Agreement.
IA14 Business Days. As used in this Agreement, the term "Business Day" shall mean
a day that is not a Saturday, Sunday, or legal holiday. If that the date for the performance of
any covenant or obligation under this Agreement shall fall on a Saturday, Sunday, or legal
holiday, the date for performance thereof shall be extended to the next Business Day.
Similarly, if that the day for the performance of any covenant or obligation under this
Agreement involving Escrow Agent shall fall on a Business Day on which Escrow Agent is
closed for business to the public, the date for performance thereof shall be extended to the
next Business Day on which Escrow Agent is open for business to the public.
14.1.5 Legal Review and Edits. This purchase agreement is subject to Buyer's legal
council providing full legal review and edits to this contract.
The Parties have executed this Agreement as of the day and year first written above.
SELLER:
CITY OF REDLANDS, a municipal
corporation
Byle
Paul Foster,Mayor
ATTEST:
Sam Irwin, City Clerk
BUYER:
Patrick Obrien
By: Patrick Obrien and/or Assignee
) - 11 1 1 11 " ,,, j",
d