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HomeMy WebLinkAboutContracts & Agreements_109-2018PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS DATED JUNE 19, 2018 BY AND BETWEEN CITY OF REDLANDS, a municipal corporation AS SELLER, NEWLAND HOMES LLC, a California limited liability company, AS BUYER TABLE OF CONTENTS 1 PURCHASE AND SALE 2 PURCHASE PRICE 21 Deposits 22 Deposit of Balance 3 ESCROW 3 1 Opening of Escrow 32 Escrow Instructions 33 Termination/CanceIlation 4 ACTIONS PENDING CLOSING 41 Due Diligence 42 Title 43 Development Entitlement 5 DESCRIPTION OF PROPERTY 5 1 The Real Property 6 CONDITIONS TO CLOSING .... 6.1 Buyer's Closing Conditions 62 Seller's Closing Conditions 7 CLOSING 7 1 Closing Date ... 72 Deliveries by Seller 73 Deliveries by Buyer. 74 Actions by Escrow Agent 75 Prorations/Apportionment . 76 Closing Costs 77 Closing Statement 78 Deliveries Outside of Escrow 8 SELLER'S REPRESENTATIONS AND WARRANTIES 8 1 Due Organization 82 Seller's Authority, Validity of Agreements 8 3 No Third -Party Rights 1 6 Page 1 1 1 2 2 2 2 3 3 3 6 7 6 7 7 8 9 9 9 9 10 11 11 12 12 12 12 12 12 0 10 11 12 13 14 15 84 Litigation 8 5 Zoning and Condemnation 86 No Violations of Environmental Laws 87 No Other Commitments 8 8 Wells BUYER'S REPRESENTATIONS AND WARRANTIES 9 1 Due Organization .... 92 Buyer's Authority, Validity of Agreements SURVIVAL AS -IS RISK OF LOSS 121 Condemnation 122 Casualty REMEDIES 131 Default by Seller 132 Default by Buyer BROKERS MISCELLANEOUS PROVISIONS 151 Entire Agreement 152 Modification; Waiver 153 Notices . 154 Expenses 155 Severability 156 Successors and Assigns 157 Counterparts 158 Governing Law, Jurisdiction, 159 Headings 15 10 Time of Essence .... 15 11 Further Assurances 1512 Construction... 15 13 Attorneys' Fees 1514 Business Days 11 13 13 13 13 .. 13 14 14 14 14 14 15 15 15 16 16 16 17 17 17 17 18 19 19 19 19 19 19 20 20 20 20 ... 20 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this "Agreement") is made and entered this 19th day of June, 2018, (the "Effective Date"), by and between CITY OF REDLANDS, a municipal corporation ("Seller"), and NEWLAND HOMES LLC, a California limited Iiability company ('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 are sometimes individually referred to herein as a "Party" and, together, as the "Parties " RECITALS A Seller is the owner of an undivided fee simple interest in certain real property located in the City of Redlands ("City"), San Bernardino County ("County"), State of California, known as County of San Bernardino Assessor Parcel Number 0168-161-07, and as more particularly described on Exhibit "A" attached hereto (the "Land") The Land, together with any Improvements (as defined in Section 5), are referred to in this Agreement as the "Property " B Seller desires to sell, transfer, and convey the Property to Buyer, and Buyer desires to purchase and acquire the Property from Seller, upon and subject to the terms and conditions set forth in this Agreement NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Buyer and Seller hereby agree, and instruct Escrow Agent, as follows PURCHASE AND SALE Subject to and upon all of the terms and conditions of this Agreement, Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase and acquire from Seller, the Property 2 PURCHASE PRICE The purchase price of the Property (the "Purchase Price") shall be One Million Nine Hundred Thousand Dollars ($1,900,000 00) The Purchase Price shall be payable as follows 2 1 Deposits Within one (1) day following the "Opening of Escrow" (as hereinafter defined), Buyer shall deposit into "Escrow" (as hereinafter defined) the sum of Twenty Five Thousand Dollars ($25,000) (which amount, together with any and all interest earned thereon, shall hereinafter be referred to 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 or is deemed to have terminated this Agreement pursuant to the terms of Section 4 13, the Deposit shall become non-refundable, except as specifically provided otherwise herein, and shall be credited against the Purchase Price at Closing 2 1 1 Refund of Deposit In the event that Buyer delivers its Feasibility Notice, 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 be returned by Escrow Agent to Buyer, or to the extent previously released to Seller, and refunded to Buyer by Seller, (u) 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 Deposit and any other cash held by Escrow Agent for the benefit of Buyer shall be held in a federally insured account 22 Deposit of Balance 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 prorations 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 Title Insurance Company at 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612, Attention Ryan Hahn, Senior Escrow Officer ("Escrow Agent") by delivery to Escrow Agent of a fully executed copy of this Agreement Escrow Agent shall promptly deliver to Buyer and Seller written notice of the date of the "Opernng of Escrow " As used herein, 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 In the event that 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 herein provided 3 3 Termination/Cancellation Upon any termination or cancellation (the terms being used interchangeably herein) 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 thereto, (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 further liability hereunder, 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 2 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 engineering and environmental reports completed and/or obtained by Buyer in connection with Buyer's review of the Property ("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 therein 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 Property Materials 4 1 1 1 Within five (S) days 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 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, (f) All archaeological, biological, soil, geological, grading, drainage, and hydrology reports, surveys, or assessments and any other engineering reports for the Property; and (g) A Natural Hazards Disclosure Report in conformity with the California Natural Hazards Disclosure Act; 4 1 12 Further, prior to the Due Diligence Termination Date (as defined in Section 4 13), upon not less than twenty-four (24) hours prior written notice by Buyer to Seller, Seller shall make available to Buyer at Seller's offices, and Buyer shall have the right to review, all other records in Seller's possession or control relating to the Property 4 1 13 Seller shall promptly furnish 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 15, 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 Buyer agrees that Seller and Seller's representatives shall not have any liability to Buyer as a result of Buyer's use of the Property Materials 4 12 Buyer's Diligence ,Tests 4 12 1 For sixty (60) days from the Effective Date 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 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 Property without the prior written consent of Seller, which consent shall not be unreasonably withheld, delayed or conditioned Any entry by Buyer onto the Property shall be subject to, and conducted in accordance with, all applicable laws Further, Buyer acknowledges that the Property is in active agricultural operation and Buyer shall coordinate all Buyer inspection activities in advance with Seller to limit interference with Seller's farming operations 4 1 2 2 Buyer shall keep the Property free and clean of any mechanics' liens and indemnify, protect, defend, and hold 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 materialman'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 hereof, 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 hereinafter defined)), and/or (c) the results or findings of any inspection CI 4 1 2 3 Upon completion of Buyer's inspections, Buyer shall promptly repair any material damage to the Property caused by its entry thereon and restore the Property to substantially the same conditions as it existed prior to Buyer's entry under this Section 4 12 4 1 2 4 The provisions of this Section 4 12 shall survive the Closing or the earlier termination of this Agreement 4 13 Buyer's Termination Right Buyer shall have the right at any time on or before the date sixty (60) days following the Opening of Escrow (the "Due Diligence Termination Date") to terimziate 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 ("Feasibility Notice") to Seller and Escrow Agent on or prior to the Due Diligence ,.n Termination Date In the event Buyer fails to timely deliver a Feasibility Notice, then thisW„ A Bement and the Escrow shall be automatically deemed terminated In the event this Agreement is terminated in accordance with this Section, then the 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 Within two (2) Business Days after the Opening Escrow, Seller shall cause First American Title Insurance Company located at 3281 East Guasti Road, Suite 440, Ontario, California 91761 ("Title Insurer") to issue and deliver to Buyer (a) a current commitment for an CLTA standard coverage Owner's Policy of Title Insurance for the Property (the "Title Report") and (b) legible copies of all documents referenced therein (collectively with the Title Report, the "Title Documents") 4 2 2 Buyer's Review of Title Buyer shall have until the date thirty (30) days following the Opening of Escrow ("Title Review 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 Objection Letter") (provided, however, that if any such amendments or updates are received by Buyer aftei or within five (5) Business Days before the Title Review Date, Buyer shall have five (5) Business Days following Buyer's receipt of such amendment or update and copies of all documents referenced therein 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 be deemed to be "Permitted Exceptions " Seller shall cooperate, at no cost to Seller, with Buyer to eliminate matters objected to by Buyer, but, except as set forth in the last sentence 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 (5th) Business Day following Seller's receipt of Buyer's Objection Letter, Seller may elect, by delivering written notice of such E 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 Objection Letter If Seller falls 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 (5th) Business Day following Buyer's receipt of Seller's Response or (b) of no Seller's Response is received by Buyer, the fifth (5th) 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 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 In the event that 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 (z) Notwithstanding anything else stated herein, ;n 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 Closing hereunder (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 In furtherance thereof, 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 Close 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 Property by a duly executed and acknowledged grant deed in the form of Exhibit "B" attached hereto (the "Grant Deed"), subject only to the Permitted Exceptions and the reservations and other matters, if any, referenced or described in said Grant Deed 43 Development Entitlement 4 3 1 Buyer's purpose for purchase of the Property Buyer intends to include the Property within a proposed tentative tract map [Tract No 20126] for a residential subdivision of Buyer -owned or controlled parcels generally located adjacent to the Property (the "Tentative Tract Map") Buyer's Tentative Tract Map is proposed to be conditioned by Seller to provide that, prior to approval of Buyer's final map for the Tentative Tract Map, the Property shall be annexed into Seller's Community Facilities District 2004-1, or a similar landscaping maintenance district Seller shall sign any applications and documents required for or related to the processing of the Tentative Tract Map and the related residential development project (the "Project") 4 3 2 Tentative Tract Man As a condition of approval of the Tentative Tract Map, Buyer shall incorporate the Property as open space in the Project's Tentative Tract Map 10 Seller, if requested by Buyer or the Project's future home owner's association, shall accept dedication of the Property or portion thereof 4 3 3 Easement for Agricultural Activities As a condition of and concurrent with the Close of Escrow for the Property, Buyer shall execute and deliver to Seller an easement deed substantially in the form attacked hereto as Exhibit "C," permitting Seller's continued agricultural use of the Property without interference by the Buyer 4 3 4 Expiration of Buyer's Tentative Tract Map If Buyer's approved Tentative Tract Map expires, subject to all time extensions, within twenty (20) business days thereof, Buyer shall deliver to Seller a duly executed and acknowledged grant deed, at no cost to Seller and in the form attached hereto as Exhibit "D," conveying fee simple title to the Property to Seller No refund of the Purchase Price for the Property shall be made to Buyer in connection with such conveyance Any costs, fees and damages incurred by Seller in connection with Seller's enforce of this section 4 3 4 shall be paid by Buyer to Seller DESCRIPTION OF PROPERTY 5 1 The Property As used in this Agreement, the term "Property" shall mean, collectively, all of Seller's right, title, and interest in and to (a) the Land, (b) all improvements thereon (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 6 CONDITIONS TO CLOSING 6 1 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 thereof 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), a CLIA standard coverage owner's policy of title insurance ("CLTA Standard Policy") in favor of Buyer for the Property (a) showing fee title to the 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 may, at its expense, obtain from the Title Company an ALTA extended coverage owner's policy provided the issuance of such ALTA form title policy shall not be a condition to Close of Escrow and shall cause no delay to the Close of h Escrow In the event Buyer elects to obtain an ALTA extended coverage policy, Buyer shall obtain an ALTA Survey, at its sole cost and expense, in a timely manner so as to facilitate the issuance of the ALTA extended coverage policy upon the Close of Escrow. 6 12 Seller's Due Performance All of the representations and warranties of Seller set forth in Section S 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 13 Physical Condition of Prope!ly The physical condition of the 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 14 No Moratorium There shall be no general, agency -wide moratorium, inunction, zoning change, restraining order, or similar restriction imposed by the City, County, or any other governmental authority, utility provider, court, or administrative body that precludes, restricts or prevents utility service, the issuance of building permits or certificates of occupancy with respect to the Property and/or the construction of residences on the Property 6 15 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 16 No Entitlement The "Final Approval" (defined below) of the Tentative Tract Map has occurred "Final Approval" shall be deemed to have occurred with respect to the Tentative Tract Map when (1) the Tentative Tract Map has been approved officially by the appropriate governmental agency through duly authorized resolution, ordinance or administrative determination (or similar action) and all applicable and legally valid periods for the filing of an administrative appeal, judicial challenge or request for reconsideration related thereto shall have expired 6 1 7 Possession/Removal of Personal Property Upon the Close of Escrow, Seller shall deliver exclusive 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 Notwithstanding the above, Seller shall have no right to remove the citrus trees on the 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 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 8 7 1 Closing Subject to the provisions of this Agreement, the Closing shall take place on or before December 31, 2018 ("Closing Date") As used herein, 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 Property to Buyer, 7 2 2 Non -Foreign Affidavit A Non -Foreign Affidavit in the form attached hereto as Exhibit "E" {the "Non -Foreign Affidavit"); 7 2 3 State Affidavit A California Franchise Tax Board Form 593-C (the "State Affidavit"), 7 2 4 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 liens, the gap period from the latest title update of Buyer's title insurance commitment and Parties in possession, 7 2 5 Proof of Authority 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 6 Other 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 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 hereinafter defined) (and otherwise sufficient to close the transaction contemplated herein), 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 9 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, and 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 74 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 fiends 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 hereof, Escrow Agent shall, in the order and manner herein below indicated, take the following actions 7 4 1 Recording Cause the Grant Deed and any other documents customarily recorded and/or that the Parties hereto may mutually direct to be recorded in the Official Records and obtain conformed copies thereof for distribution to Buyer and Seller 7 4 2 Funds. Disburse all fiends as follows 7 4 2 1 Pursuant to the Closing Statement (as hereinafter defined), 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 thereto the amount of any other Closing Costs, 7 4 2 2 Disburse to Seller an amount equal to the Purchase Price, less or plus the net debit or credit to Seller by reason of the prorations and allocations of Closing Costs provided for in this Agreement, and 7 4 2 3 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 (in) 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 10 7 4 4 Owner's Title Pohcv Cause Title Insurer to issue or be irrevocably and unconditionally prepared and committed to issue the Owner's Title Policy to Buyer 75 Prorations/Apportionment 7 5 1 Method of Proration Taxes and assessments affecting the Property shall be prorated between Buyer and Seller as of the Closing Date based on a 365 -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 thereto 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 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 thereto 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 7 5 2 Survival The obligations under this Section 7 5 shall survive the Closing and the delivery and recordation of the Grant Deed for the Property 76 Closing Costs Each Party shall pay its own costs and expenses arising in connection with the Closing (including, without Iimitation, 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 paid one-half by Seller and one-half by Buyer, 7 6 2 The cost of the Owner's Title Policy attributable to the standard coverage portion shall be paid by Buyer, 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, 7.6 5 Seller shall pay the cost of any documentary transfer taxes in connection with the recording of the Grant Deed, 7 6 6 Buyer shall pay all recording costs for recording the Grant Deed, and 11 7 6 7 All other closing fees and costs shall be charged to and paid by Seller and Buyer In accordance with customary practices in the County 77 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") 78 Deliveries Outside of Escrow Upon the Closing, Seller shall deliver 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, 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 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. 82 Seller's Authority, Validity of W 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 hereunder The individuals executing this Agreement and the instruments referenced herein on behalf of Sellei 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 usage rights to all or any part of the Property 84 Litigation Seller is not aware of (a) any actions, investigations, sults, or proceedings pending or threatened that affect the Property, the ownership or operation thereof, or 12 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 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 be deemed to include any wastes, materials, substances, pollutants, and other matters regulated by Environmental Laws 86 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, and Seller shall not make any such commitment or representation that would affect the Property or any portion thereof, without Buyei's written consent 87 Actual Knowledge For purposes hereof, "Seller is not aware" or "to Seller's knowledge," or like terms shall mean the current actual knowledge of Christopher Boatman, without implying any duty of investigation or inquiry In furtherance thereof, Seller hereby warrants and represents that Christopher Boatman is the Seller's representative most knowledgeable regarding the Property 88 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 true 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 13 be a failure of a condition pursuant to Section b 12 Notwithstanding the foregoing, if Buyer has actual knowledge of the incorrectness of any representation or warranty set forth in this Section S as of the Close of Escrow and Buyer has not elected to terminate this Agreement as provided herein, then Byer 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 Organization 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 92 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 herein on behalf of Buyer has/have the legal power, right, and actual authority to bind Buyer to the terms hereof and thereof 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 10 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 II 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) THE PROPERTY IS BEING SOLD TO BUYER IN 14 ITS PRESENT "AS IS" CONDITION SUBJECT TO THE EXPRESS REPRESENTATIONS SUBJECT TO THE EXPRESS REPRESENTATIONS AND THE TERMS HEREOF, 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, 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 THE DEBTOR " 12 RISK OF LOSS 121 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 (n) 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 122 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, Buyei shall have the option to terminate this Agreement upon written notice to Seller given 15 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 amount 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 this Agreement 13 1 Default by Seller If Seller shall breach any of the terms or provisions of this Agreement or otherwise fail to perforin 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 Buyei 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 13 2 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 (BUT WITHOUT LIMITING SELLER'S RIGHT TO RECOVER ATTORNEYS' FEES PURSUANT TO SECTION 1413 BELOW), 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 10 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 Seller's I ials Buyer's Initials — d A 14 BROKERS Neither Party has been represented in this transaction by a broker Each of Buyer and Seller hereby represents and warrants to and agrees with each other that it has not had, and shall not have, any dealings with any third Party to whom the payment of any broker's fee, finder's fee, commission, or other similar compensation shall or may become due or payable in connection with the transaction contemplated hereby. Seller shall indemnify, defend, protect, and hold Buyer harmless for, from, and against any and all Claims incurred by Buyer by reason of any breach or inaccuracy of the representation, warranty, and agreement of Seller contained in this Section Buyer shall indemnify, defend, protect, and hold Seller harmless from and against any and all Claims incurred by Seller by reason of any breach or inaccuracy of the representation, warranty, and agreement of Buyer contained in this Section The provisions of this Section shall survive the Closing or earlier termination of this Agreement 15 MISCELLANEOUS PROVISIONS 151 Entire Agreement This Agreement, including the exhibits attached hereto, 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 herein or in the documents delivered pursuant hereto or in connection herewith 15 2 Modification, Waiver No supplement, modification, waiver, or termination of this Agreement shall be binding unless executed in writing by the Parry 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 17 153 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 electronic mail, by courier, or by Federal Express (or other reputable overnight delivery service) for overnight delivery, as follows To Buyer Newland Homes LLC 3121 Michelson Drive, Suite 110 Irvine, California 92612 Attention J Robert Meserve Telephone 949-344-2701 Fax 949-344-2702 Email rmeserve@newlanddev corn To Seller. City of Redlands P O Box 3005 Redlands, California 92373 Attention City Clerk Telephone (909) 798-7531 Email jdonaldson@cityofredlands org With A Copy To City Attorney City of Redlands Attention Daniel J McHugh Telephone (909) 798-7595 Email dmchugh@cityofredlands org To Escrow Agent First American Title Insurance Company 18500 Von Karman Avenue, Suite 600 Irvine, CA 92612 Attention Ryan Hahn Telephone 949-885-2472 Email rhan@firstam corn 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 hereto may be given by legal counsel for such Party Telephone numbers are provided herein for convenience only and shall not alter the manner of giving Notice set forth in this Section 15 3 18 154 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 155 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 156 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 157 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 15 8 Governing Law, Jurisdiction 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 under this Agreement 159 Headings 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 15 10 Time of Essence Time shall be of the essence with respect to all matters contemplated by this Agreement 15 11 Further Assurances In addition to the actions recited herein and contemplated to be performed, executed, and/or delivered by Seller and Buyer, during the term of this Agreement 19 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 feasibility 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 15 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 full 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 were stricken. 15 13 Attorneys' Fees In the event that either Party hereto 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 ajudgment 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 addition to 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 15 14 Business Days As used herein, the term "Business Day" shall mean a day that is not a Saturday, Sunday, or legal holiday In the event 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, in the event 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 20 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written SELLER CITY OF REDLANDS, a municipal corporation B ul W Foster, Mayor ATTEST: e Donaldson, City Clerk NEWLAND HOMES LLC, a California limited liability company Byc Ian Harvey, Mana r ESCROW AGENT. The undersigned Escrow Agent hereby accepts the foregoing Purchase and Sale Agreement and Joint Escrow Instructions, agrees to act as Escrow Agent under this Agreement in strict accordance with its terms, agrees to insert as the "Agreement Date" on page I hereof, if not otherwise dated, the latest date this Agreement was signed by Seller and Buyer and delivered to Escrow Agent, and agrees to comply with the applicable provisions of the Internal Revenue Code with respect to the transactions contemplated hereby FIRST AMERICAN TITLE INSURANCE COMPANY Date By Name- Ryan Hahn Title Senior Escrow Officer 21 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written SELLER CITY OF REDLANDS, a municipal corporation _ By C�� Paul W Foster, Mayor ATTEST S)�� Lz<, J e Donaldson, City Clerk NEWLAND HOMES LLC, a California limited liability company B -- Ian Harvey, Manage �- ESCROW AGENT The undersigned Escrow Agent hereby accepts the foregoing Purchase and Sale Agreement and Joint Escrow Instructions, agrees to act as Escrow Agent under this Agreement in strict accordance with its terms, agrees to insert as the "Agreement Date" on page 1 hereof, if not otherwise dated, the latest date this Agreement was signed by Seller and Buyer and delivered to Escrow Agent, and agrees to comply with the applicable provisions of the Internal Revenue Code with respect to the transactions contemplated hereby FIRST AMERICAN TITLE INSURANCE COMPANY Date 1 ai- Zy 20 , S By - N e Ry Hahn itle Seni Escrow Officer 21 LIST OF EXHIBITS EXHIBIT "A" LEGAL DESCRIPTION EXHIBIT "B" GRANT DEED EXHIBIT "C" FARMING EASEMENT EXHIBIT "D" GRANT DEED EXHIBIT "E" NON -FOREIGN AFFIDAVIT 0' KRU613#1111"., DESCRIPTION OF THE PROPERTY The land referred to in this Agreement is situated in the City of Redlands, County of San Bernardino, State of California, and is described as follows. THE EAST HALF OF THE WEST HALF OF THE SOUTHWEST QUARTER OF THE NORTHWEST QUARTER OF SECTION 24, TOWNSHIP 1 SOUTH, RANGE 3 WEST, SAN BERNARDINO MERIDIAN, IN THE CITY OF REDLANDS, ACCORDING TO GOVERNMENT SURVEY EXCEPT THOSE PORTIONS AS CONVEYED TO THE CITY OF REDLANDS BY DEED RECORDED MAY 24, 1988 AS INSTRUMENT NOS 163128, 163129, 163130, 163131 APN. 0168-161-07 RECORDING REQUESTED BY WHEN RECORDED MAIL TO [0X`._1 r 'IT-11,112to014W11 GRANT DEED (Space Above for Recorder's Use) The undersigned Grantor declares that Documentary Transfer Tax is not shown pursuant to Section 11932 of the California Revenue and Taxation Code, as amended FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, CITY OF REDLANDS, a municipal corporation ("Grantor"), hereby grants to NEWLAND HOMES LLC, a California limited liability company ("Grantee"), the real property in the City of Redlands, County of San Bernardino, State of California, described in Exhibit "A" attached hereto and incorporated herein by this reference THIS GRANT AND CONVEYANCE IS MADE AND ACCEPTED SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, RIGHTS OF WAY AND EASEMENTS NOW OF RECORD AND ANY OBLIGATIONS AND COVENANTS SET FORTH IN SECTION 4 3 4 OF THAT CERTAIN PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS DATED JUNE 19, 2018 BY AND BETWEEN GRANTOR AND GRANTEE (ON FILE WITH THE GRANTOR) [signature page follows] MAIL TAX STATEMENTS TO IN WITNESS WHEREOF, the Grantor has executed this grant deed as of .2018 C i. _s_ O B.11 CITY OF REDLANDS, a municipal corporation Paul W Foster, Mayor ATTEST Jeanne Donaldson, City Clerk A notary public or other officer completing this certificate verified only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA ss COUNTY OF On , 2018, before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they/executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal Notary Public In and For Said County and State EXHIBIT "A" LEGAL DESCRIPTION Document No Recorded .2018 STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION NOT BE MADE A PART OF THE PERMANENT RECORD IN THE OFFICE OF THE COUNTY RECORDER (PURSUANT TO SECTION 11932 REVENUE AND TAXATION CODE) TO Recorder County of San Bernardino Request is hereby made in accordance with the provisions of the Documentary Transfer Tax Act that the amount of the tax due not be shown on the original document which names Grantor CITY OF REDLANDS, a municipal corporation Grantee NEWLAND HOMES LLC, a California limited liability company The property described in the accompanying document is located in the City of Redlands, County of San Bernardino The amount of tax due on the accompanying document is $ , computed on the full value of the property conveyed (Signature of Grantor or Agent) ATTEST Jeanne Donaldson, City Clerk CITY OF REDLANDS, a municipal corporation M Paul W Foster, Mayor Note After the permanent record is made, this form will be affixed to the conveying document and returned with it EXHIBIT "C" FARMING EASEMENT FORM WHEN RECORDED, RETURN TO City of Redlands P O Box 3005 Redlands, California 92373 Attention City Clerk ACCESS AND AGRICULTURAL PRODUCTION CONSERVATION EASEMENT This Access and Agricultural Production Conservation Easement (the "Easement") is executed as of this day of , 2018 by and between. ("Grantor'), and CITY OF REDLANDS, a municipal corporation ("Grantee") RECITALS A Grantor owns certain real property located in the City of Redlands (the "C"), San Bernardino County, California and legally described in Exhibit "A" attached hereto (the "Prouerty") B Grantee has been producing agriculture on the Property for many years. C Grantee desires to acquire from Grantor, and Grantor desires to grant to Grantee, a perpetual, non-exclusive easement and right-of-way in, on, over, under, and across those portions of the Property for the benefit of the Grantee Property and for (i) ingress, egress, and access for agricultural production and conservation purposes, and (ii) planting, installation, construction, inspection, maintenance, harvesting, repair, operation, replacement, and removal from time to time of any agriculture and related farming improvements NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows I Agricultural Improvements and Access Easement Grantor hereby grants and conveys to Grantee and Grantee's agents, employees, contractors, and subcontractors, a perpetual, non-exclusive easement in, on, over, under, and across the Property for the benefit of the Grantee Property for ((i) ingress, egress, and access for agricultural production purposes, and (ii) planting, installation, construction, inspection, maintenance, harvesting, repair, operation, replacement, and removal from time to time of any agriculture and related farming improvements, including, but not limited to, trees, plants, irrigation lines, well, generators and any other farming equipment All work and materials relating to the construction of any agricultural improvements within the Property by Grantee shall be paid for by Grantee Grantee will be responsible, at Grantee's sole cost and expense for all costs of installation, construction, inspection, maintenance, modification, repair, operation, or replacement of any agricultural improvements constructed on the Property by Grantee 2 Grant of Profits Grantee shall retain any agricultural products and related profit produced by Grantee on the Property 3 Indemnification Grantee shall indemnify, defend, and hold Grantor harmless from and against any claims, damages, liability, judgments, loss, cost, or expense, including, reasonable attorney's fees, arising from or related to injuries to person or property caused by any entry by Grantee or its agents, employees, licensees, contractors, or subcontractors onto the Property This indemnification shall not apply to any claims or damages arising from the negligent acts or omissions or willful misconduct of Grantor or any employees, agents, consultants, contractors, or subcontractors of Grantor 4 No Assignment. The rights in this Easement are personal to the Grantee Grantee shall not assign its rights under this Easement 5 Not a Public Dedication Nothing contained in this Easement shall be deemed to be a conveyance or dedication of any portion of the Property to the general public or for any public purpose whatsoever 6 Miscellaneous (a) No modification of this Easement shall be effective unless it is in writing and is signed by the then owner(s) of the Property and Grantee (b) If any term, provision, or covenant contained in this Easement shall be held invalid or unenforceable, the remainder of this Easement shall not be affected thereby, and each term, provision, and condition hereof shall be valid and enforceable to the fullest extent permitted by law (c) Grantor and Grantee agree to perform, execute, and/or deliver any and all such further acts, instruments and assurances as may be reasonably required to effect the provisions of this Easement (d) This Easement may be executed in multiple counterparts, each of which shall be deemed an original and all of which, together, shall constitute one and the same instrument [Remainder of this page intentionally left blank Signature page(s) follow ] 4 IN WITNESS WHEREOF, the parties have executed this Easement as of the date first set forth above GRANTOR A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA ) ) SS COUNTY OF ORANGE ) On , before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal Signature This area for official notarial seal GRANTEE CITY OF REDLANDS, a municipal corporation Paul W Foster, Mayor ATTEST Jeanne Donaldson, City Clerk A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA } ) SS COUNTY OF SAN BERNARDINO ) On , before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal Signature This area far official notarial seal EXHIBIT "A" Legal Description of Property RECORDING REQUESTED BY WHEN RECORDED MAIL TO EXHIBIT "D" GRANT DEED (Space Above for Recorder's Use) The undersigned Grantor declares that Documentary Transfer Tax is not shown pursuant to Section 11932 of the California Revenue and Taxation Code, as amended FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, NEWLAND HOMES LLC, a California limited liability company (the "Grantor"), hereby grants to CITY OF REDLANDS, a municipal corporation, the real property in the City of Redlands, County of San Bernardino, State of California, described in Exhibit "A" attached hereto and incorporated herein by this reference THIS GRANT AND CONVEYANCE IS MADE AND ACCEPTED SUBJECT TO COVENANTS, CONDITIONS, RESTRICTIONS, RESERVATIONS, RIGHTS OF WAY AND EASEMENTS NOW OF RECORD IN WITNESS WHEREOF, the Grantor has executed this grant deed as of ,201 GRANTOR A notary public or other officer completing this certificate verified only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA ss COUNTY OF On , 201before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they/executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal Notary Public In and For Said County and State EXHIBIT "E" NON -FOREIGN AFFIDAVIT STATE OF } } ss County of } The undersigned, as authorized agent of CITY OF REDLANDS, a municipal corporation ("Transferor"), after being duly sworn upon his oath deposes and says that Section 1445 of the Internal Revenue Code provides that a transferee of a U S real property interest must withhold tax if the transferor is a foreign person To rnform NEWLAND HOMES, LLC, a California limited liability company ("Transferee"), that withholding of tax is not required upon the disposition of Transferor's interest in a U S real property interest, the undersigned hereby certifies the following 1 Transferor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust, foreign estate, or other foreign person within the meaning of § 1445 and § 7701 of the Internal Revenue Code and the treasury regulations promulgated thereunder, 2 Transferor is not a disregarded entity as defined in Treas. Reg § 1 1445-2(b)(2)(ir1), 3 Transferor's U S taxpayer identification number is 4 Transferor's business address is Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both Under penalties of penury Transferor declares that it has examined this certification and to the best of its knowledge and belief this certification is true, correct, and complete The undersigned agent declares that he has the authority to sign this document on behalf of Transferor TRANSFEROR CITY OF REDLANDS, a municipal corporation Paul W Foster, Mayor ATTEST: Jeanne Donaldson, City Clerk A notary public or other officer completing this certificate verified only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document STATE OF CALIFORNIA ss COUNTY OF On , 2018, before me, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they/executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official seal Notary Public In and For Said County and State TAXABLE YEAR ® CALIFORNIA FORM 2018 Real Estate Withholding Certificate 593-C Part I — Seller/Transferor Information Return this form to your escrow company. Name SSN or ITIN Cily of Redlands Spouse's/RDP's name (if jointly owned) Spouse's/RDP's SSN or ITIN (if jointly owned) Address (apt./ste., room, PO Box, or PMB no ❑ FEIN ❑ CA Corp no ❑ CA SOS file no A" CityClerk P O Box 300S City (If you have a foreign address, see instructions) State ZIP Code Ownership Percentage Redlands CA 92373 1000/0 Property address (if no street address, provide parcel number and county) Vacant, Redlands, CA 92374, San Bernardino County APN 0168 161-07 0000 To certify that you qualify for a full or partial withholding exemption, check all boxes that apply to the property being sold or transferred (See instructions) Part II — Certifications which fully exempt the sale from withholding 1. ❑ The property qualifies as the seller's/transferor's (or decedent's, if sold by the decedent's estate or trust) principal residence within the meaning of Internal Revenue Code (IRC) Section 121 2. ❑ The seller/transferor (or decedent, if sold by the decedent's estate or trust) last used the property as the seller's/transferor's(decedent's) principal residence within the meaning of TRC Section 121 without regard to the two year time period 3 ❑ The seller/transferor has a loss or zero gain for California income tax purposes on this sale To check this box you must complete Form 593 E, Real Estate Withholding Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16 4 ❑ The property is being compulsorily or involuntarily converted and the seller/transferor intends to acquire property that is similar or related in service or use to qualify for nonrecognition of gain for California income tax purposes under IRC Section 1033 S. ❑ The transfer qualifies for nonrecognition treatment under IRC Section 351 (transfer to a corporation controlled by the transferor) or IRC Section 721 (contribution to a partnership in exchange for a partnership interest) 6 ❑ The seller/transferor is a corporation (or a limited liability company (LLC) classified as a corporation for federal and California income tax purposes) that is either qualified through the California Secretary of State (SOS) or has a permanent place of business in California 7 ❑ The seller/transferor is a California partnership or a partnership qualified to do business in California (or an LLC that is classified as a partnership for federal and California income tax purposes and is not a single member LLC that is disregarded for federal and California income tax purposes) 8 The seller/transferor is a tax-exempt entity under California or federal law 9 The seller/transferor is an insurance company, individual retirement account, qualified pension/profit sharing plan, or charitable remainder trust Part III — Certifications that may partially or fully exempt the sale from withholding - Real Estate Escrow Person (REEP). See instructions for amounts to withhold 10 ❑ The transfer qualifies as a simultaneous like kind exchange within the meaning of IRC Section 1031 11. ❑ The transfer qualifies as a deferred like kind exchange within the meaning of IRC Section 1031 12 ❑ The transfer of this property is an installment sale where the buyer/transferee is required to withhold on the principal portion of each installment payment Copies of Form 593 I Real Estate Withholding Installment Sale Acknowledgement and the promissory note are attached Seiler/Transferor Signature To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb ca gov/forms and search for 1131 To request this notice by mail, call 800 852.5711 Under penalties of penury, I declare that I have examined the information on this form, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete I further declare under penalties of perjury that if the facts upon which this form are based change, I will promptly notify the REEP Seller's/Transferor's Name and Title Paul W Foster, Mayor Sell er's/Transferor's SignatuK[J;0,Date 7 Z V� Spouse's/RDP's Name Spouse's/RDP's Signature Date Seller/ If you checked any box in Part II , you are exempt from real estate withholding Transferor If you checked any box in Part III, you may qualify for a partial or complete withholding exemption Except as to an installment sale, if the seller/transferor did not check any box in Part II or Part III of Form 593 C, the withholding will be 3 113% ( 0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593, Real Estate Withholding Tax Statement If the seller/transferor does not return the completed Form 593 and Form S93 -C by the close of escrow, the withholding will be 3 1/3% ( 0333) of the total sales price, unless the type of transaction is an installment sale If the transaction is an installment sale, the withholding will be 3 1/3% ( 0333) of the down payment If you are withheld upon, the REEP should give you one copy of Form 593 Attach a copy to the lower front of your California income tax return and make a copy for your records —, 7131183 1 Form 593 C C2 2018 Real Estate Withholding Certificate References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC) General Information If the seller/transferor is an individual, enter the social security number SSN dd In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2015 However there are continuing differences between California and federal law When California conforms to federal tax law changes, we do not always adapt all of the changes made at the federal level For more information, go to ftb ca gov and search for conformity Additional information can be found in FTB Pub 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540 or 540NR), and the Business Entity tax booklets Like -Kind Exchanges— For taxable years beginning on or after January 1, 2014, California requires taxpayers who exchange property located in California for like kind property located outside of California, and meet all of the requirements of the IRC Section 1031, to file an annual information return with the Franchise Tax Board (FTB) For more information, get form FTB 3840 California Like Kind Exchanges, or go to ftb ca gov and search for like kind Purpose Use Form 593 C, Real Estate Withholding Certificate, to certify that you qualify for a full or partial withholding exemption Qualifying for an exemption from withholding or being withheld upon does not relieve you of your obligation to file a California income tax return and pay any tax due on the sale of California real estate You may be assessed penalties if • You do not file a tax return • You file your tax return late • The amount of withholding does not satisfy your tax liability The se[ler/transferor must submit this form before the close of the real estate transaction to prevent withholding on the transaction After the real estate transaction has closed, amounts withheld may be recovered only by claiming the withholding as a credit on the appropriate year's tax return How to Claim the Withholding To claim the withholding credit, you must file a California tax return Report the sale or transfer as required, and enter the amount from line 5, Amount Withheld from this Se[ler/Transferor, of Form 593 Real Estate Withholding Tax Statement, on your California tax returns as withholding from Form(s) 592 B or 593 If your filing status changed after escrow closed and before filing your California tax return, call the Withholding Services and Compliance phone service at 888 792.4900 or 916.845 4900 for instructions on how to claim your withholding credit Claim your withholding credit on one of the following • Form 540, California Resident Income Tax Return • Form 540NR Long, California Nonresident or Part -Year Resident Income Tax Return • Form 541, California Fiduciary Income Tax Return • Form 100 Califorma Corporation Franchise or Income Tax Return • Form 100S, California S Corporation Franchise or Income Tax Return • Form 100W, California Corporation Franchise or Income Tax Return — Water's Edge Filers • Form 109, California Exempt Organization Business Income Tax Return • Form 565, Partnership Return of Income • Form 568, Limited Liability Company Return of Income Specific Instructions Private Mad Box PMB -- Include t." (PMB) he PMB in the address field Write "PMB" first, then the box number Example 111 Main Street PMB 123 Foreign Address -- Follow the country's practice for entering the city, county, province, state, country, and postal code, as applicable, in the appropriate boxes Do not abbreviate the country name Part I — Seller/Transferor Information Enter the name, tax identification number, and address of the seller/transferor If the seller/transferor does not provide a tax identification number, then Form 593 C is void, and withholding is required Note If you choose to provide a copy of Form 593 C to the buyer/transferee, delete the seller's/transferor's tax identification number on the buyer's/transferee's copy { ) or iniv€ual taxpayer €dentificat€on number (ITIN) If the sellers/transferors are spouses/registered domestic partners (RDPs) and plan to file a joint return, enter the name and SSN or ?TIN for each spouse/RDP Otherwise do not enter information for more than one seller/transferor Instead, complete a separate Form 593 C for each seller/transferor If you do not have an SSN because you are a nonresident or a resident ahei for federal tax purposes, and the Internal Revenue Service (IRS) issued you an ITIN, enter the ITIN In the space provided for the SSN An MN is a tax processing number issued by the IRS to individuals who have a federal tax filing requirement and do not qualify for an SSN It is a nine digit number that always starts with the number 9 If the seller/transferor is a business, enter the business name in the name field along with the federal employer identification number (FEIN), CA Corporation number (CA Corp no ), or CA Secretary of State (CA SOS) file number If the seller/transferor is a grantor trust, enter the grantor's individual name and SSN For tax purposes, the grantor trust is disregarded and the individual seller/transferor must report the sale and claim the withholding of their individual tax return If the trust was a grantor trust that became irrevocable upon the grantor's death, enter the name of the trust and the trust's FEIN Do not enter the decedent's or trustee's name or SSN If the seller/transferor is a non -grantor trust, enter the name of the trust and the trust's FEIN Do not enter trustee information If the seller/transferor is a single member limited liability company (SMLLC), enter the name and tax identification number of the single member For all other non individual sellers/transferors, enter the FEIN, CA Corp no , or CA SOS file number Ownership Percentage Enter your ownership percentage rounded to two decimal places (e.g 66 67%) If you are on the title for incidental purposes and you have no financial ownership, enter 0 00 and skip to Seller/Transferor Signature You will not be withheld upon Examples of sellers/transferors who are on title for incidental purposes are • Co signers on title (e.g , parents co signed to help their child qualify for the loan) • Family members on title to receive property upon the owner's death Property Address Enter the address (or parcel number and county) of the CA real property transferred Part II — Certifications Which Fully Exempt Withholding Line 1 through Line 9 Check all boxes that apply to the property being sold or transferred Line i — Principal Residence To qualify as your principal residence under IRC Section 121 you (or the decedent) generally must have owned and lived in the property as your main home for at least two years during the five-year period ending on the date of sale Military and Foreign Service get FTB Pub 1032, Tax Information for Military Personnel You can have only one main home at a time If you have two homes and live in both of them, the main home is the one you lived in most of the time There are exceptions to the two year rule if the primary reason you are selling the home is for a change in the place of employment, health, or unforeseen circumstances such as death, divorce or termination of registered domestic partnership, or loss of lob, etc For more information about what qualifies as your principal residence or exceptions to the two year rule, get federal Publication 523, Selling Your Home To get federal publications, go to irs.gov, or call 800 829 3676 If only a portion of the property qualifies as your principal residence a second Form 593 C will need to be completed to cerbfy an exemption on the portion not used as a principal residence The allocation method should be the same as the seller/transferor used to determine depreciation Real Estate W/H Forms Booklet 201 Y Line 2 Property last used as your principal residence When completing Form 593 C as the single member of a disregarded LLC, I€ the property was last used as the seller's/transferors, or decedent's write on the bottom of the form that the information on the form is for the principal residence within the meaning of IRC Section 121 without regard to single member of the LLC so the Real Estate Escrow Person (REEP) will the two year time period, no withholding is required If the last use of the understand why it is different from the recorded title holder property was as a vacation home, second home, or rental, you do not qualify for the exemption You must have lived in the property as your main If the single member is Complete Farm 593-C using - home If you have two homes and live in both of them, the main home is the one you lived in most of the time Line 3 - Loss or Zero Gain You have a loss or zero gain for California income tax purposes when the amount realized is less than or equal to your adjusted basis You must complete Form 593-E, Real Estate Withholding Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16 to certify that the transaction is fully exempt from withholding You may not certify that you have a net loss or zero gain just because you do not receive any proceeds from the sale or because you feel you are selling the property for less than what it is worth Line 4 - Involuntary Conversion The property is being involuntarily or compulsorily converted when both of the following apply • The California real property is transferred because it was (or threatened to be) seized destroyed or condemned within the meaning of TRC Section 1033 • The seller/transferor intends to acquire property that is similar or related in service or use in order to be eligible for nonrecognition of gain for California income tax purposes Get federal Publication 544, Sales and Other Dispositions of Assets, for more information about involuntary conversions Line 5 Non recognition Under IRC Section 351 or 721 The transfer must qualify for nonrecognition treatment under IRC Section 351 (transferring to a corporation controlled by transferor) or IRC Sect€on 721 (contributing to a partnership in exchange for a partnership interest) Line 6 - Corporation A corporation has a permanent place of business in this California when it is organized and existing under the laws of California or it has qualified through the CA SOS to transact intrastate business A corporation not qualified to transact intrastate business (such as a corporation engaged exclusively in interstate commerce) will be considered as having a permanent place of business in California only if it maintains an office in California that is permanently staffed by its employees after the sale S. corporations must withhold on nonresident S corporation shareholders Get FTB Pub 1017, Resident and Nonresident Withholding Guidelines, for more information Line 7 - Partnership or Limited Liability Company (LLC) Partnerships and LI -Cs are required to withhold on nonresident partners and members For more information, get FTB Pub 1017 Withholding is not required if the title to the property transferred is recorded in the name of a California partnership or it is qualified to do business in California Withholding is not required if the title to the property transferred is in the name of an LLC, and the LLC meets both of the following • It is classified as a partnership for federal and California income tax purposes • It is not a SMLLC that is disregarded for federal and California income tax purposes If the LLC meets these conditions, the LLC must still withhold on nonresident members Get FTB Pub 1017 for more information If the SMLLC Is classified as a corporation for federal and California income tax purposes, then the seller/transferor is considered a corporation for withholding purposes Refer to Line 6 If the LLC is an SMLLC that is disregarded for federal and California income tax purposes, then that single member is considered the seller/transferor and title to the property is considered to be in the name of the single member for withholding purposes An individual individual's The information A corporation The corporation's information A partnership The partnership's information An LLC The single member's information Line 8 - Tax Exempt Entity Withholding is not required if the seller/transferor is tax exempt under either California or federal law (e.g , religious, charitable, educational, not for profit organizations, etc ) Line 9 - Insurance Company, Individual Retirement Account, Qualified Pension or Profit -Sharing Plan, or Charitable Remainder Trust Withholding is not required when the seller/transferor is an insurance company, individual retirement account, qualified pension or profit sharing plan, or a charitable remainder trust Part III - Certifications That May Partially or Fully Exempt the Sale From Withholding Complete Part III only if you did not meet any of the exemptions in Part II Line 10 - Simultaneous Exchange If the California real property is part of a simultaneous like kind exchange within the meaning of TRC Section 1031, the transfer is exempt from withholding However, if the seller/transferor receives money or other property (in addition to property that is a part of the like kind exchange) exceeding $1,500 from the sale, the REEP must withhold Line 11- Deferred Exchange If the California real property is part of a deferred like kind exchange within the meaning of IRC Section 1.031, the sale is exempt from withholding at the time of the initial transfer However, if the seller/transferor receives money or other property (in addition to property that is a part of the like kind exchange) exceeding $1,500 from the sale, the qualified intermediary must withhold If the exchange does not take place or if the exchange does not qualify for nonrecognition treatment, the intermediary or accommodator must withhold 3 1/3% ( 0333) of the total sales price Line 12 Installment Sale The REEP reports the sale or transfer as an installment sale if there will be at least one payment made after the tax year of the sale The withholding 3 1/3% ( 0333) of the down payment during escrow Buyers/Transferees are required to withhold on the principal portion of all payments made following the dose of the real estate transaction unless an approval letter for the elect out method is received When the withholding amount on the down payment is sent to the FTB, the FTB must also receive a completed Form 593 I, Real Estate Withholding Installment Sale Acknowledgement, a completed Form 593, and a copy of the promissory note Seller/Transferor Sionature You must sign this form and return it to your REEP by the close of the real estate transaction for it to be valid Otherwise, the REEP must withhold the full 3 1/3% ( 0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593 that is certified by the seller/transferor only for the optional gain on sale election Penalty - Any seller/transferor who, for the purpose of avoiding the withholding requirements, knowingly executes a false certificate is liable for a penalty of $1,000 or 20% of the required withholding amount, whichever is greater Real Estate W/H Forms Booklet 201€ TAXABLE YEAR Real Estate Withholding - 2015 Computation of Estimated Gain or Loss CALIFORNIA FORD 593-E (You are required to complete this form if you claim an exemption due to a loss or zero gain or if you elect an optional gain on sale withholding amount.) Part I — Seller/Transferor Information Name SSN or ITIN Ci of Redlands Spouse's/RDP's name (if jointly owned) Spouse's/RDP's SSN or ITIN (if jointly owned) Address (apt./ste , room, PO Box, or PMB no El FEIN ❑ CA Corp no ❑ CA SOS file no Attn Ci ClerkP O Box 3005 City (If you have a foreign address see instructions) State ZIP Code Redlands CA 92373 Property address (if no street address, provide parcel number and county) Vacant,_ Redlands, CA 92374, San Bernardino Countv APN 0168 161 07 0000 Part II -- Computation I Selling price 1 2 Selling expenses 2 3 Amount realized Subtract line 2 from line 1 3 4 Enter the price you paid to purchase the property (If you acquired the property other than by purchase, see instructions, How to Figure Your Basis) 4 5 Seller/Transferor-paid points 5 6 Depreciation 6 7 Other decreases to basis 7 8 Total decreases to basis Add line 5 through line 7 8 9 Subtract line 8 from line 4 g 10 Cost of additions and improvements 10 11 Other increases to basis. 11 12 Total increases to basis Add line 10 and line 11 12 13 Adjusted basis Add line 9 and line 12 13 14 Enter any suspended passive activity losses from this property 14 15 Add line 13 and line 14 1s 16 Estimated gain or loss on sale Subtract line 15 from line 3 and enter the amount here If you have a loss or zero gain skip lines 17 and 18 Complete the Seller/Transferor Signature area below and check the box on Form 593 C, Real Estate Withholding Certificate Part II line 3 If you have a gain, go to line 17 16 17 Optional gain on sale withholding amount Check the applicable box for the filing type ❑ Individual 12 3% ❑ Corporation 8.84% ❑ Bank and Financial Corporation 10.84% ❑ Non California Partnership 12 3% ❑ S Corporation 13 8% ❑ Financial S Corporation 15 8% Multiply the amount on line 16 by the tax rate for the filing type selected above and enter the result on line 17 This is the optional gain on sale withholding amount If you elect the optional gain on sale withholding amount on line 17 get Form 593, Real Estate Withholding Tax Statement, and check the appropriate box on line 4 (Boxes B G) for the Optional Gain on Sale Election, and transfer the amount on line 17 to Form 593, line 5 Sign Form 593 to certify the election 17 18 Total sales price withholding amount Multiply the selling price on line 1 by 3%% ( 0333) and enter the amount on line 18 This is the total sales price withholding amount If you select the total sales price withholding amount on line 18, check Box A '3'/ °/a (.0333) x Total Sales Price" on line 4 of Form 593, and transfer the amount on line 18 to Farm 593, line 5 18 Seller/Transferor Signature Title and escrow persons and exchange accommodators are not authorized to provide legal or accounting advice for purposes of determining withholding amounts Transferors are strongly encoura4ed to consult with a cOmoetent tax Drofessional fnr thio nirnrm, To learn about your privacy rights how we may use your information, and the consequences for not providing the requested information, go to ftb ca gov/forms and search for 1131 To request this notice by mail, call 800 852 5711 Under penalties of penury, I declare that I have examined the information on this form, including accompanying schedules and statements, and to the best of m) knowledge and belief, it is true, correct, and complete I further declare under penalties of perjury that if the facts upon which this form are based change, I will promptly notify the Real Estate Escrow Person (REEP) Seller's/Transferor's Name Paul W Foster, Mayor Sellers/Transferor's Signat e Date It is unlawful to forge Spouse's/RDP's Name (if jointly owned) a Spouse's/RDP s signature Spouse's/RDP's Signature (if jointly owned) 7151173 r— Date Form 593 E C2 2018 Real Estate Withholding - Computation of Estimated Gain or Loss References in these instructions are to the Internal Revenue Code (IRC) as of january 1, 2015, and to the California Revenue and Taxation Code R&TC General Information as a first or second mortgage or promissory notes you gave the In general, for taxable years beginning on or after January 1, 2015, California law conforms to the Internal Revenue Code (TRC) as of January 1, 2015 However, there are continuing differences between California and federal law When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level For more information, go to ftb.ca.gov and search for conformity Additional information can be found in FTB Pub 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540 or 540NR), and the Business Entity tax booklets Purpose Use Form 593 E, Real Estate Withholding Computation of Estimated Gain or Loss, to estimate the amount of the seller's/transferors loss or zero gain for withholding purposes and to calculate an optional gain on sale withholding amount The seller/transferor completes this form for sales closing in 2018 Optional Gain on Sale Withholding Amount is calculated when the optional gain on sale election has been made by the seller/transferor The withholding amount is calculated by multiplying the seller's/transferor's applicable tax rate by the estimated gain determined on Form 593 E You may use estimates when you complete this form, but the estimates must not result in the calculation of a loss when you actually have a gain Any seller/transferor who, for the purpose of avoiding the withholding requirements, knowingly executes a false certificate is liable for a penalty of $1,000 or 20% of the required withholding amount, whichever is greater This form is signed under penalty of perjury The seller/transferor must keep this form for five years and provide it to the Franchise Tax Board (FTB) upon request However, the seller/transferor is not required to provide this form to the REEP or buyer/transferee Specific Instructions Private Mad Box (PMB) - Include the PMB in the address field Write "PMB" first, then the box number Example 111 Main Street PMB 123 Foreign Address Follow the country's practice for entering the city, county, province, state, country and postal code, as applicable, in the appropriate boxes Do not abbreviate the country name Part I- Seller/ Transferor Information Enter the name, tax identification number, and address of the seller/transferor If the seller/transferor is an individual, enter the social security number (SSN) or individual taxpayer identification number (ITIN) If the sellers/transferors are spouses/registered domestic partners (RDPs) and plan to file a joint return, enter the name and SSN or ITIN for each spouse/RDP Otherwise, do not enter information for more than one seller/transferor Part II - Computation Line 1 Selling Price The selling price is the total amount you will receive for your property It includes money, as well as, all notes, mortgages, or other debts assumed by the buyer/transferee as part of the sale, plus the fair market value of any other property or any services you receive Line 2 - Selling Expenses Selling expenses include commissions, advertising fees, legal fees, and loan charges that will be paid by the seller/transferor, such as loan placement fees or points Line 3 - Amount Realized seller/transferor in payment for the property If you acquired the property b gift, inheritance exchange, or any way other than purchase, see How to Figure Your Basis Line 5 - Selier/Transferor-Paid Points Points are charges paid to obtain a loan They may also be called loan origination fees, maximum loan charges, loan discount, or discount points If the seller/transferor paid points for you when you acquired the property, enter the amount paid by the seller/transferor on your behalf on line 5, unless you already subtracted this item to arrive at the amount for line 4 Line 6 - Depreciation Enter the amount of depreciation you deducted, or could have deducted, on your California income tax return for business or investment use of the property under the method of depreciation you chose If you took less depreciation on your tax return than you could have under the method chosen, you must enter the amount you could have taken under that method If you did not take a depreciation deduction, enter the full amount of depreciation you could have taken Get federal Publication 946, How to Depreciate Property, for more information If you do not know how much depreciation you deducted or were allowed, you can make an estimate of the amount of depreciation (for withholding purposes only) To estimate the depreciation, divide the purchase price plus the cost of additions and improvements by 27 5 and multiply that by the number of years you used the property for business use (up to 27 5 years) Example Mary bought a house 20 years ago for $150,000 and has used it as a rental property for the last 18 years Prior to renting the house, she added a pool which cost her $25,000 Mary's depreciation is estimated as follows Cost $150,000 Plus additions 25,000 Total 175,000 Divided by 27 5 = 6,364 Multiply by 18 years = $114,552 Mary's estimated depreciation to enter on line 6 is $114,552 Line 7 Other Decreases to Basis Include any other amounts that decrease your basis, such as • Casualty or theft loss deductions and insurance reimbursements • Energy credits claimed for the cost of energy improvements added to you basis • Payments received for granting an easement or right of -way Line 10 Additions and Improvements These add to the value of your property, prolong its useful life or adapt it to new uses Examples include room additions, landscaping, new roof, insulation, new furnace or air conditioner, remodeling, restoration project, etc The cost of repairs are not included Do not include any additions or improvements on line 10 that were included on line 4 Line 11 Other Increases to Basis Include the amounts paid for any other items that increase the basis of the property, such as • Settlement fees and closing costs you incurred when you bought the property • The amount you paid for special assessments for items such as water connections, paving roads, and building ditches • The cost of restoring damaged property from a casualty loss, or cost of extending utility service lines to the property The amount realized is the selling price minus the selling expenses Line 14 - Passive Activity Losses You may only use suspended passive activity losses that directly relate to the Line 4 -Purchase Price property sold Other losses such as net operating losses, capital loss carry If you acquired this property by purchase, enter your purchase price Your forwards, stock losses, and passive activity losses from other properties purchase price includes the down payment and any debt you incurred, such cannot be used Real Estate W/H Forms Booklet 201 Line 16 --- Estimated Gain or Loss on Sale withholding amount on the total sales price shown online 18 If you If you have a zero gain or loss, check the box on line 3 of Form 593 C, elect the optional gain on sale withholding amount on line 17, check the Real Estate Withholding Certificate Complete and sign Form 593 C and appropriate box on Ane 4 (Boxes B G) for the Optional Gain on Sale give it to your RESP You will not be subject to withholding on this sale Election, on Form 593, Real Estate Withholding Tax Statement then Note A loss or zero gain can only be claimed on Form 593 C if the transfer the amount on line 17 to Form 593, line 5 taxpayer has a tax identification number Keep Form 593 E for five years Trusts (Grantor and Non -grantor)' Check box 46 on Part III of Farr to document your calculations and provide to the FTB upon request 593 and use the trust's highest tax rate of 12 3% If you have a gain, this is your estimated amount of gain on the sale of Sign Form 593 to certify the election Keep Form 593-E for five years to your California property Go to line 17 document your calculations and provide to the FTB upon request Line 17 — Optional Gain on Sale Withholding Amount Line 18 — Total Sales Price Withholding Amount Multiply the amount on line 16 by the tax rate for the filing type selected Multiply the selling price on line 1 by 3 1/3% ( 0333) and enter the and enter the amount on line 17 Compare this amount to the amount on line 18 If you select the standard withholding amount on You owned the property line 18, check Box A on line 4 of Form 593, and transfer the amount on (as community property) with line 18 to Form 593, line 5 How to Figure Your Basis The cost or purchase price of property is usually its basis for figuring gain or loss from its sale or other disposition However, if you acquired the property by gift, inheritance, exchange, or in some way other than purchase, you must use a basis other than its cost The following instructions only reflect the general rules Exceptions may apply Get federal Publication 551, Basis of Assets, for more information Sellers/Transferors are strongly encouraged to consult with a tax professional for this purpose who died How Property was Received How to Figure Your Basis Property was received as a gift Usually, your basis is the donor's adjusted basis at the time of the gift Enter the donor's adjusted basis on line 4 Then complete the rest of the form (except line 5) with your information after you received the property If the fair market value (FMV) of the property at the time of the gift was less than the donor's adjusted basis, get federal Publication 551 to determine your basis Property was inherited from Usually, your basis is the FMV at the date of the individual's death You can get that valuation from the someone other than your probate documents, or if there was no probate, use the appraised value at the date of death Enter the spouse/RDP FMV on line,4 Then complete the rest of the form (except line 5) with your information after you received the property If you or your spouse/RDP originally gave the property to the decedent within one year of the decedent's death, get federal Publication 551 to determine your basis You owned the property Your basis is the FMV of the total property at the date of your spouse's/RDP's death Enter the FMV on (as community property) with line 4 Then complete the rest of the form (except line 5) with your information after the date of death your spouse/RDP who died You owned the property (in point Your basis is the sum of 1) the FMV of your spouse's/RDP's half of the property at the date or your tenancy) with your spouse/RDP spouse's/RDP's death, and, 2) the existing basis of your half of the property at the date of your who died spouse's/RDP's death Enter the sum on line 4 Then complete the rest of the form (except line 5) with your information after the date of death Property received from your Usually, your basis is the same as it would have been without this transfer Complete Form 593-E as if spouse/RDP in connection to your you had been the only owner before and after the transfer divorce/termination of registered domestic partnership If your spouse/RDP transferred the property to you before 3uly 18, 1984, get federal Publication 551 to determine your basis Property received in exchange Your basis will depend on whether you received the property in a nontaxable, taxable, or partially taxable for other property exchange Get federal Publication 551 to determine your basis Enter your basis on line 4 Then complete the rest of the form However do not include any amounts on line 5 through line 10 that you included on line 4 You built the house Add the purchase price of the land and the cost of the building Enter the total on line 4 and complete (or other improvements) the rest of the form on the property being sold If you deferred the gain from a previous home to this property, get federal Publication 551 You received the property in a Enter your basis in the property after the foreclosure on line 4 (You may need to get a tax professional foreclosure to help you with this calculation) Then complete the rest of the form (except for line 5) with your information after the foreclosure Real Estate W/H Forms Booklet 2018 SELLER'S CERTIFICATION OF NON -FOREIGN STATUS UNDER FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA") (26 U.S.C. 1445) File No NCS -855797 -SAI For purposes of this form the following definitions shall apply 1 Seller - the person(s) or entity(ies) that hold(s) the legal title to a U S real property interest under local law 2 Transferor - the person(s) or entity(ies) that is/are the party(ies) treated as the transferor(s) under 26 USC 1445 (IRC Section 1445) The Seller may or may not be deemed to be the Transferor for purposes of withholding under FIRPTA This form must be completed by each Seller or Transferor All Sellers or Transferors providing this certification must have a taxpayer identification number ("'TIN"). A TIN is not an indication that the Seller or Transferor is a resident alien or a U S citizen Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U S real property interest must withhold tax if the transferor is a foreign person THIS SECTION FOR INDIVIDUAL SELLER(S) WHO IS/ARE ALSO THE TRANSFEROR(S)- EACH SELLE_RITRANSFEROR MUST COMPLETE AND SIGN A SEPARATE FORM MAKE COPIES FOR EACHSELLER/TRANSFEROR TO COMPLETE: To inform the transferee (buyer) that withholding of tax is not required upon my disposition of a U S. real property interest, the undersigned Seller/Transferor hereby certifies the following 1 I am NOT a nonresident alien for purposes of U S income taxation, 2. My U S Taxpayer Identification (Social Security) Number is and 3 My home address is I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete Signature Date II. THIS SECTION FOR ENTITY SELLERS: For U S tax purposes (including Section 1445), the owner of a disregarded entity (which has legal titie to a U S real property interest under local law) will be the Transferor of the property and not the disregarded entity A FOR ENTITY SELLERS THAT ARE NOT DISREGARDED ENTITIES' To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by Seller, the undersigned Seller/Transferor hereby certifies 1 Seller IS NOT a disregarded entity, 2 Seller/Transferor is NOT a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations), 3 Seller's/Transferor's Taxpayer Identification Number is 95-6000766, and 4. Seller's/Transferor's office address is 35 Cajon Street, Redlands, CA 92373 Seller/Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Seller/Transferor Seller/Transferor w AD/Is Uame. Paul W. Foster Its Mayor Date B. FOR ENTITY SELLERS THAT ARE DISREGARDED ENTITIES To inform the transferee that withholding of tax is not required upon the disposition of a U S real property interest by Seller, the undersigned Transferor hereby certifies - 1. Seller, [insert name of Seller entity] IS a disregarded entity as defined in 26 CFR 1 1445-2(b)(2)(iii), thus Seller's owner, [insert owner name], is therefore the Transferor; 2 Transferor is NOT a foreign corporation, foreign partnership, foreign trust, or foreign estate, nor a non-resident alien for purposes of U S income taxation (as those terms are defined in the Internal Revenue Code and Income Tax Regulations), 3 Transferor's U S Taxpayer Identification number is , and 4 Transferor's address is [please complete address below] [Insert home address if Transferor is an individual] [Insert office address if Transferor is an entity Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Transferor Signature Date First American Title Insurance Company NATIONAL COMMERCIAL SERVICES RE Escrow No NCS -855797 -SAI 18500 Von Karman Ave, Suite 600 Irvine, CA 92612 Date 07/03/2018 Officer Ryan Hahn Property Vacant, San Bernardino County APN 0168 161 07 0000 Redlands, CA 92374 LOAN / OWNER'S ASSOCIATION INFORMATION REQUEST In order for us to obtain statements of account from your existing lender(s) or Owner's association, please provide us with the following information on your accounts We must have accurate and complete information on your accounts, as some take up to 30 days to return our request Please fill out and return this form as soon as possible Federal Regulation 545-132D requires authorization in writing from you before a lender can release any payoff information to an escrow holder A delay in returning this signed and completed form could delay the close of this escrow FIRST TRUST DEED Lender Name N/A Address Loan Number Phone Number Fax Number SS#/TIN SECOND TRUST DEED Lender name Address Loan Number Phone Number Fax Number SS#/TIN OWNER'S ASSOCIATION (if applicable) Association Name Management Co Address Account Number Phone Number Fax Number SS#/TIN Our signatures below are to be considered Instructions for obtaining statements, to comply with the instructions of the above named companies, and our authorization to pay from funds due us at the close of escrow said companies' fees, including, but not limited to Statement Fees, Transfer Fees, Late Fees, Prepayment Penalties, Impound Account Shortages without our further approval Please Provide Your Forwarding Address below, so funds or documents may be sent to you after close of escrow Effective Date First American Title Insurance Company National Commercial Services 18500 Von Karman Ave, Suite 600 Irvine, CA 92612 SELLER(S)- City of Redlands, a municipal corporation 35 Cajon Street Redlands, CA 92373 City of Redlands, a municipal corporation Name Pau _W. Foster Title _ _ Mayor File No NCS -855797 -SAI (RH) Date 06/22/2018 FIRST AMERICAN T'IT'LE INSURANCE COMPANY STATEMENT REQUIRED FOR THE ISSUANCE OF ALTA OWNERS AND10R LOAN POLICIES Commitment No 855787 Date 0t( 5 To the best knowledge and belief of the undersigned, the following is hereby certified with respect to the land described in the above commitment That, except as noted at the end of this paragraph, within the last six (6) months (a) no labor service or materials have been furnished to improve the land, or to rehabilitate repair, refurbish, or remodel the buildrng(s) situated on the land (b) nor have any goods, chattels machinery apparatus or equipment been attached to the building(s) thereon, as fixtures, (c) nor have any contracts been let for the furnishing of labor service, materials, machinery apparatus or equipment which are to be completed subsequent to the date hereof, (d) nor have any notices of lien been received, except the following, if any NIA 2 That there are no unrecorded contracts or options to purchase the land, except the following, if any NIA 3 That there are no unrecorded leases, easements or other servitudes to which the land or building or portions thereof, are subject except the following, if any NIA 4 That the undersigned is authorized to execute this affidavit, has the ability to execute all instruments necessary to mortgage or convey the Land pursuant to authority, and that the owner was properly created and is in good standing in its state of origin and is properly authorized to do business in the state where the Land is located 5 That the undersigned has not received any written notice of violation of any covenants conditions or restrictions, if any, affecting the Land 6 In order to induce First American Title Insurance Company (the Company") to issue its pohcy(ies) of title insurance with full knowledge that the Company will rely upon the accuracy of same the undersigned hereby agrees as follows (a) The undersigned does hereby agree 10 indemnify and hold the Company harmless of and from any and all loss cost damage and expense of every kind including attorneys fees, which the Company shall or may suffer or incur or become liable for under its said policy or policies directly or indirectly due to its reliance on the accuracy of the foregoing statements or in connection with its enforcement of its rights under this statement (b) The undersigned does hereby agree to indemnify and hold the Company harmless during the gap period between the last title examination of the Land that was conducted by, for and/or on behalf of the Company and the time when the deed assignments and any other documents creating priority of title are recorded in connection with the sale andlor transfer of the Land Seller I Owner (aul ?Watoks-ter Mayor City of Redlands ATTEST Jea onaldson City Clerk 18500 Von Karrnan Ave, Suite 600 Fimf American Irvine, CA 92612 Tide lasumnce Company rgATi4;NAt CWAME�CIAt SERVICES COMMISSION INFORMATION SHEET Gate, July 03, 2018 Escrow, NCS -855797 -SAI Property Vacant, San Bernardino County APN 0168-161-07-0000, Redlands, CA 92374 In order that escrow may more efficiently process your transaction, we require the following information Real Estate Company N/A Street Address City, State, Zip Phone Number Fax Number Agent Email Address Commission Amount or Percentage Real Estate Company Street Address City, State, Zip Phone Number Fax Number Agent Email Address Commission Amount or Percentage Upon receipt of the above information, Escrow Holder will draw commission instructions for you to execute 18500 Von Karman Ave, Suite 600 Irvine CA 92612 .First .A.ncrxcar� '= T'xtic Insurance Compavy NATIONAL COMMERCIAL SERVICES PROCEEDS DISBURSEMENT Dated- 07/09/2018 City of Redlands, a municipal corporation Attn• City Clerk P 0 Box 3005 Redlands, CA 92373 Order Number, NCS -855797 -SAI Property Address Vacant, Redlands, CA 92374, San Bernardino County APN 0168-161-07-0000 Buyer/Borrower(s) Newland Homes LLC Seller(s), City of Redlands, a municipal corporation The undersigned seller(s) or borrower(s) request that the proceeds from the sale or refinance of the above captioned property be sent in the following manner Please select one and complete if necessary. 1 _ Pick-up at First American Title Insurance Company National Commercial Services, 18500 Von Karman Ave, Sui Irvine, CA 92612 2. _ Mail to the following address 3 Overnight via express mail service to the following address 4 X Wire proceeds to Union Bank, 400 California Street, San Francisco, CA 94101 Bank Name & Address 122000496 2740026189 Bank ABA Routing Number Bank Account Number _City of Redlands Bank Account Name 5 _ Other Seller(s) Page 1 of 2 City of Redlands, a municipal corporation By Name Paul W. Foster Title Mayor Date--L—ID/20 IS ATTEST J&he Donaldson City Clerk Page 2 of 2 First American Title Insurance Company National Commercial. Services 18500 Von Karman Ave, Suite 600 Irvine, CA 92612 Office Phone (949)885 2400 Office Fax Seller's Estrrnated Settlement Statement File No NCS -855797 SA1 Escrow Officer Ryan Hahn/MM Estimated Settlement Date 12/31/2018 Disbursement Date Property APN 0168-161 07-0-000, Redlands, CA 92374 Buyer Newland Homes LLC 3121 Michelson Drive, Suite 110, Irvine, CA 92612 Seller City of Redlands, a municipal corporation 35 Cajon Street Redlands, CA 92373 Lender Description Consideration Total Consideration Seller Charge Seller Credit �� 1,900 000 00 Title/Escrow Charges Closing Escrow Fee to First American Title Insurance Company National Commercial Services 1,350 00 i ___ _____ Documentary Transfer Tax -County to San Bernardino County Recorder 2,090 00 Cash (X To) ( Froin) Seller 1 896 560 00 Totals i 1,900,000 00 i 1,900,000 00 PLEASE NOTE A modification of money -transfer or disbursement instructions can be a red flag for Online Banking Fraud and could be a trap for the unwary Should we knowingly receive such a modification, in the interest of prudence, we may consider it suspect and call a known and trusted phone number to verify its authenticity and accuracy Your awareness and cooperation in taking appropriate steps to prevent fraud is greatly appreciated Notice — This Estimated Settlement Statement is subject to changes, corrections or additions at the time of final computation of Escrow Settlement Statement See Attached Signatures Settlement Statement Page 1 of Print Date 0712412018, 10 24 AN Seller's Estimated Settlement Statement Settlement Date File No NCS-855797-SA1 Officer Ryan Hahn/MM SELLER(S) City of Redlands, a municipal corporation By Name aul W Foster Title Mayor ATTEST ne Donaldson ity Clerk Signature Page 1 of Print Date 0712412018, 10 24 AN