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HomeMy WebLinkAboutContracts & Agreements_38-2004_CCv0001.pdf AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS BETWEEN THE SAN BERNARDINO COUNTY BOARD OF EDUCATION AND THE CITYOF REDLANDS TABLE OF CONTENTS Page RECITALS I ARTICLE I PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section l.l Sale and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Section 1.3 Payment of the Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARTICLE II ESCROW 2 Section 2.1 Escrow, Escrow Holder, and Opening of Escrow . . . . . . . . . . . . . . . . . . . 2 Section 2.2 Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Section 2.3 Preliminary and Supplemental Title Reports . . . . . . — . . . . . . . . . . . . . 3 Section 2.4 Review of Title Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Section 2.5 Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.6 Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.7 Obligations of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.8 Conditions Precedent to Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 2.9 Conditions Regarding Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.10 Taxes and Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.11 Payment of Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2.12 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2.13 Title Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2.14 Execution of Other Documents; Compliance with Regulations . . . . , . . . 7 Section 2.15 Recording of Documents and Delivery of Funds . . . . . . . . . . . . . 7 Section 2.16 Escrow Cancellation Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE III FEASIBILITY, DUE DILIGENCE AND INSPECTIONS . . . . . . . . . . . . . . . 7 Section 3.1 Feasibility, Due Diligence, and Inspections . . . . . . . . . . . . . . . . . . . . . . . 7 (a) General Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (b) Environmental Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (c) Inspection of Studies and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 3.2 Consequences of Feasibility and Due Diligence Inspections . . . . . . . . . . 9 Section 3.3 Right to Observe Inspections and Testing . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.4 Repair of the Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Section 3.5 License for Buyer Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 -ARTICLE IV SELLERS' REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 10 Section 4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 4.2 - - . - . . . . . . . . . . . . . . . . . . . . 12 ARTICLE V BUYER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . 12 Section 5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . . 12 Section 5,2 . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 5.3 Condition of the Property . . . . . . . . . . . . . 13 ARTICLE VI INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 6.1 Buyer Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 6,2 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 ARTICLE VII DISPUTES AND DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 7,1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Section 7.2 Venue for Resolving Disputes . . . . . . . . - - . . . . . . . . . . . . . . . . . . . . 14 Section 7.3 Interpretation of Agreement . . . . . . . I . . . . . . . . . . . . . . . . . . . . . . . Section 7.4 Mediation . . . — . . . . . . . . . . . . . . . . . . . . . . . . . - - . . . . . . . . . — 15 Section 7.5 Attorneys' Fees . . . . . . . . . . - - - . . . . . . . . . . . . . . . . . . _ _ . . . . . 15 Section 7.6 Default . - - . - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE VIII MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 16 Section 8.1 Entire Agreement . . . . . . . . . . . . . . . . . . . 16 Section 8.2 Waiver . . . - - - . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 8.3 Representation by Independent Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 8.4 Not for Benefit of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 8.5 Assignment . . . . . . — . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . 16 Section 8.6 Notices . - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Section 8.7 Incorporation of Recitals and Exhibits . . . . . . . . . . . . . . . — . . . . . . . 17 Section 8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - . . . . . . 17 Section 8.9 Counterparts . . . . I . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 EXHIBITS "A" [Legal Description of the Property] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 ttA-211 [Map of the Property] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2 4413" ACKNOWLEDGMENT OF ESCROW OFFICER . . . . . . . . . . . . . . . . . . . B-1 44C" [STANDARD ESCROW INSTRUCTIONS] . . . . . . . . . . . . . . . . . . . . . . C-1 "D" GRANT DEED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1 PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS BETWEEN THE SAN BERNARDINO COUNTY OFFICE OF EDUCATION AND CITY OF REDLANDS THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS BETWEEN THE SAN BERNARDINO COUNTY OFFICE OF EDUCATION AND CITY OF REL LANDS ("Agreement"), is made and entered into, effective as of this 17 day Of February, 2004 ("Effective Date")by and between the City of Redlands ("Sellers") and the San Bernardino County Office of Education ("Buyer"). Buyer and Sellers are hereinafter individually or collectively referred to as "Party" and"Parties." RECITALS A. Sellers are the owner of a parcel of property identified by the San Bernardino County Assessor's records as Assessors Parcel Number: 0168-121-04 ("Property"). as more particularly described in Exhibit A-1 and depicted on the map attached as Exhibit A-2 The Property is intended to be developed by Buyer as the Redlands Medical Therapy Unit ("Project"). The Property is located approximately 660 linear feet east of Pennsylvania Avenue and Judson Street, in the County of San Bernardino ("County"), State of California("State"). The Property consists of approximately 217,800 square feet or 5.0 acres of land. B. Buyer is a political subdivision of the State of California and is fully vested with the power to acquire property by negotiated purchase or by eminent domain. BAW&G/DMN1/94906 Redlands Medical Therapy Unit I-10-17,Q18 1-21,31/03 NOW THEREFORE. the Parties agree as follows: ARTICLEI PURCHASE AND SALE Section 1,1 Sale and Purchase. Subject to receipt of State Funding and approval by the California Department of Education ("CDE") on terms and conditions reasonably acceptable to Buyer and all of the terms, covenants and conditions contained in this Agreement, Sellers agree to sell the Property to Buyer, and Buyer agrees to buy the Property from Sellers. Section 1.2 Purchase Price. The purchase price for the Property ("Purchase Price") shall be Two Hundred Eighteen Thousand Dollars ($218,000). Z:� Section 1.3 Payment of the Purchase Price. Buyer shall pay the Purchase Price to Sellers in cash or immediately usable funds upon "Close of Escrow" as defined herein. ARTICLE H ESCROW Section 2.1 Escrow, Escrow Holder, and Opening of Escrow. As soon as practicable after execution of this Agreement, Buyer shall open an escrow to facilitate the transactions contemplated by this Agreement ("Escrow") with Chicago Title Company("Escrow Holder") at the address specified in Section 8.6. For purposes of this Agreement, delivery by Buyer to Escrow of a fully-executed original or counterpart original of this Agreement shall constitute the opening of Escrow("Opening of Escrow"). Immediately upon Opening of Escrow, Escrow Holder shall complete the Acknowledgment of Escrow attached hereto as Exhibit B and transmit copies thereof by facsimile transmission to Buyer, Sellers and their respective legal counsel, which shall serve as notice of the Opening of Escrow, This Agreement shall constitute escrow instructions ("Escrow Instructions") to Escrow Holder. The Pat-ties agree to execute such additional Escrow Instructions consistent with BAW&G/DMN4/94906 Redlands Medical Therapy Unit 171077Q18 1231/03 -2- the provisions of this Agreement that are mutually acceptable to the Parties or that may be required by Escrow Holder. Escrow Holder's general provisions ("Standard Escrow Instructions"), attached hereto as Exhibit C, shall also constitute Escrow Instructions for purposes of this Agreement. As between the Parties, Buyer and Sellers agree that if there is any conflict between the terms of this Agreement and the Standard Escrow Instructions, this Agreement shall control. Section 2.2 Close of Escrow. Subject to the conditions set forth in Section 2.8, Escrow shall close on the date that fee title to the Property is conveyed from Sellers to Buyer as contemplated by this Agreement and evidenced by the recording of a grant deed("Grant Deed") in the form of Exhibit D attached hereto ("Close of Escrow"). Unless otherwise extended pursuant to the terms of this Agreement, Close of Escrow shall occur within ninety (90) days after all conditions precedent to Close of Escrow have been satisfied or waived. Section 2.3 Preliminary and Supplemental Title Reports. Escrow Holder shall deliver to Buyer and its legal counsel, Bowie, Arneson.. Wiles & Giannone ("Legal Counsel"), within fifteen (15) calendar days after the opening of Escrow, a Preliminary Title Report covering the Property issued by Chicago Title Insurance Company, 560 E. Hospitality Lane, San Bernardino, California("Title Insurer"). This Preliminary Title Report shall be accompanied by complete copies of all underlying documents referred to in the Preliminary Title Report as evidencing exceptions to title, and a plot map plotting all such exceptions and casements disclosed in the Preliminary Title Report (collectively "PTR"), which are reasonably locatable and with the understanding that such plot map shall not be construed as a survey. Section 2.4 Review of Title Documents. Buyer shall have forty-five (45) calendar days following receipt of the PTR within which to notify Seller, in writing, of Buyer's disapproval of any exception to title disclosed in the PTR. In the event the PTR is supplemented ("Supplemental PTR") by the Title Insurer, Buyer shall have ten (W) calendar days after its receipt by Buyer and Legal Counsel of such Supplemental PTR, together with complete and legible copies of all additional documents described therein and a plotting thereof, within which to approve or disapprove any new matters disclosed in such Supplemental PTR, In the event BAW&G`DM M/94906Redlands Medical lhcrapy Unit 1710TQ18 1131,'03 -3- Buyer disapproves a matter disclosed in the Title Documents that Sellers decline to cure, and that Buyer declines to waive, the Escrow shall be cancelled with respect to the Property upon written notice by either Party to the Escrow Holder and the other Party. Upon any such cancellation of Escrow, each Party shall pay one-half of the Escrow cancellation charges. Section 2.5 Condition of Title. All matters contained in the Title Documents that are not disapproved by Buyer prior to the end of the period referred to in Section 2.4 shall be deemed to be permitted exceptions ("Permitted Exceptions"). Sellers shall convey the Property to Buyer in fee simple title, which, shall be, except for the Permitted Exceptions, free and clear of all mortgages, liens, charges, encumbrances, encroachments, easements, conditions, exceptions, assessments, taxes, or other defects in title. Section 2.6 Obligations ofBityer. Buyer's obligations provided for in this Agreement are subject to Buyer receiving funds from the State of California to fund the Purchase Price, Subject to the foregoing, in addition to performance by Buyer of all obligations of Buyer contained in this Agreement, on or before one (1)business day prior to Close of Escrow, Buyer shall have deposited into Escrow: (i) the balance of the Purchase Price for the Property; and (ii) all other sums and documents reasonably required of Buyer by Escrow Holder to carry out Close of Escrow. Section 2.7 Obligations of Sellers. In addition to fulfilling any other obligations of Sellers contained in this Agreement, on or before one (1) business day prior to Close of Escrow, Sellers shall deposit into Escrow: (i) a Grant Deed to the Property, substantially in the form of Exhibit C, properly executed by Sellers and recordable, and (ii) all other sums (including, but not limited to, sums necessary to cancel or pay taxes, special taxes, fees, charges, assessments, and other sums necessary to deliver free and clear title) and documents reasonably required of Sellers by Escrow Holder to carry out Close of Escrow. Section 2.8 Conditions Precedent to Close of Escrow. Sellers' obligation to convey the Property and Buyer's obligation to purchase the Property is subject to the satisfaction (or written waiver by the benefitting Party) of the following conditions precedent: BA W&GIDN4 M!94906 Redlands Medical Therapy Uinit 1'7107,Q18 12/31/03 -4- (a) Escrow has not been canceled and/or the Agreement has not been terminated pursuant to Sections 2.4, 2.9, 3.1, 3.2, 53 or 7.6; (b) Title Insurer is prepared to issue the policy of title insurance described in Section 2.13. (c) Buyer shall have received approval of the acquisition of the Property and use thereof for the proposed Project from CDE on conditions, if any,reasonably acceptable to Buyer. (d) The Buyer has received funds from the State of California to fund the Purchase Price. (e) Seller has obtained and recorded a Notice of Cancellation of all prior, current and future special taxes applicable to the Property. Section 2.9 Conditions Regarding Close of Escrow. Subject to the provisions of Section 7.6, CDE approval, and on terms acceptable to Buyer, in the event that any condition precedent to Close of Escrow referred to in Section 2.8 is neither satisfied nor waived in writing by the Party benefitting from the condition, such conditions shall be deemed to have failed and Escrow shall terminate with respect to the Property. If either Party is at fault for cancellation of Escrow pursuant to this Section, including because the Party failed to act when or in the manner required pursuant to this Agreement, or because the Party acted in any such manner that impeded satisfaction of any condition precedent specified in Section 2.8, that Party shall be responsible for paying all Escrow cancellation costs. If the Escrow is terminated pursuant to this Section for any reason that is not the fault of a Party, the Parties shall equally bear the Escrow cancellation costs. Section 2.10 Taxes and Assessments. Prior to or concurrent with Close of Escrow, Seller shall pay, cancel, or terminate, all prior, current taxes, including special taxes, assessments, and improvement fees or charges levied on or against the Property. Subsequent to BAW&GYMN1194906 Redlands Medical Therapy Unit 17107,Q 18 12;'31/03 -5- the Close of Escrow, the Property shall be tax-exempt. Any claims for a property-tax refund shall be the sole responsibility and sole property of Seller, and, at Seller's expense, Buyer will cooperate with Seller in processing any claim by Seller for a property tax refund after Close of Escrow. If, for any reason, the Property is not considered tax exempt following the Close of Escrow, Buyer shall be responsible for all property taxes that become due and payable following the Close of Escrow. Prior to Close of Escrow, a notice of cancellation shall be obtained by Seller at its cost and recorded prior to or concurrent with Close of Escrow as to all prior, current, and future special taxes, assessments, and improvement fees or charges as applicable to the Property. Section 2.11 Payment of Costs. The costs associated with this transaction shall be paid as follows: (a) Sellers shall pay an amount equal to the cost of obtaining a standard form CLIA title insurance policy covering the Property in the amount of the Purchase Price including the cost of the PTR, and Buyer shall pay any additional costs of obtaining an ALTA policy without regional exceptions, including all costs of surveys and any endorsements to the policy obtained by Buyer; (b) Sellers and Buyer shall share equally in all costs of Escrow., including the Escrow Holder's escrow fee, (c) Sellers shall pay the cost of documentary transfer taxes, if any, in connection with the recordation of the Grant Deed; and Section 2.12 Brokerage Fees. The Parties acknowledge that Sellers may retain a broker for this transaction, and that Buyer has not retained a broker. Accordingly, the Parties agree that Sellers are solely responsible for any fees and commissions relating to brokerage fees. Section 2.13 Title Policy. Escrow Holder shall deliver to Buyer, through Escrow, an ALTA owner's policy of title insurance without regional exceptions insuring Buyer as fee owner BAW&G,DMN1,194906 Redlands Medical rherapy(Jail 17107,Q18 12/31/03 -6- of the Property, subject only to the usual printed title company exceptions and the Permitted Exceptions, in amounts equal to the Purchase Price, issued by Title Insurer and dated as of Close of Escrow. Section 2.14 Execution of Other Documents; Compliance with Regulations. The Parties hereto will do such other things and will execute all documents which are reasonably necessary for Close of Escrow to occur. Furthermore, the Parties will comply at their own expense with all applicable laws and governmental regulations required for Close of Escrow to occur, including, but not limited to, any required filings with governmental authorities. Section 215 Recording of Documents and Delivery of Funds. Upon receipt of the funds and instruments described in this Article, and upon the satisfaction or waiver of the conditions precedent to Close of Escrow referred to in this Article, Escrow Holder shall cause the Grant Deed and other documents as specified in this Agreement to be recorded in the office of the County Recorder of the County of San Bernardino, California. Upon Close of Escrow, Escrow Holder shall deliver conformed copies of the Grant Deed and all other appropriate documents to Buyer, and copies thereof to Legal Counsel. Section 2.16 Escrow Cancellation Charges. 'Notwithstanding any other provision of this Agreement to the contrary, in the event that Close of Escrow fails to occur as a result of the default of a Party, the defaulting party ("Defaulting Party") shall be liable for all Escrow cancellation charges. In the event that Close of Escrow falls to occur for any other reason, Buyer and Sellers shall each be responsible for and shall pay one-half of all Escrow cancellation charges unless specified otherwise in this Agreement. ARTICLE III FEASIBILITY, DUE DILIGENCE AND INSPECTIONS Section 3.1 Feasibility, Due Diligence, and Inspections. Buyer shall have one hundred eighty (180) days from the date of this Agreement to complete its due diligence, including obtaining all feasibility and State and local approvals required for use of the Property L_ B A W&G,DIM NV94906 Redhands Medical Therapy Unit 1710TQ18 121/31/03 -7- ("Due Diligence Period"). The Parties acknowledge that DISC has provided the Buyer with a letter stating that no further action is required with respect to the Property. At all times prior to Close of Escrow, Sellers agree that they shall provide to Buyer, in writing, any information relating to the Property that reasonably may impact in any manner Buyer's use of the Property as a site for the construction of school facilities. After providing Sellers with at least twenty-four(24) hours written notice, Buyer and its consultants, agents, contractors, and employees ("Buyer's Agents") shall have the opportunity during the Due Diligence Period to enter the Property during regular business hours or as reasonably necessary to make inspections of the Property. After providing Sellers with at least twenty-four hours written notice, Buyer may conduct any such tests or inspections as Buyer may elect or deem necessary including,but not limited to, the following: (a) General Inspection. Buyer, at its sole cost and expense, shall review the feasibility of, and all factors relevant to, the use of the Property as a site for the construction of school facilities, and will conduct any and all inspections, reviews, examinations, and tests of the Property to determine the feasibility of such use. (h) Environmental Inspections. The Parties acknowledge that DTSC has issued a letter stating that no further action is required with respect to the Property. Therefore, Buyer does not anticipate conducting further environmental tests of the Property during the Due Diligence Period. However, in the unlikely event hazardous materials are identified on the Property, Buyer shall determine if it intends to complete the purchase of the Property. If Buyer desires to complete the purchase, Buyer shall determine what work, if any, shall be done to remediate such condition. If Sellers do not agree to remove or remediate, at their cost, any such hazardous materials, Buyer may cancel the Escrow and Sellers shall pay all Escrow cancellation costs. Should Buyer be advised of a serious or substantial adverse condition existing on the Property, Buyer shall promptly notify Sellers of its discovery. (c) Inspection of Studies and Reports. To assist in Buyer's due diligence investigations, if any, at the time of execution and delivery of this Agreement, Sellers shall deliver to Buyer copies of all surveys, soil tests, engineering studies, and any other test results or BAW&G'DMM/941)06 Redlands Medical Therapy Unit 17107,QI8 12/31/03 -8- reports in Sellers' possession or under Sellers' control concerning the Property ("Sellers' Reports"), If so requested by Buyer, Sellers shall instruct those who prepared the Sellers' Reports to divulge to Buyer any other information they may have about the Property. Section 3.2 Consequences of Feasibility and Due Diligence Inspections. If Buyer fails to disapprove, in writing, of the physical or environmental condition of the Property prior to the end of the Due Diligence Period, or any extension thereto, Buyer shall be deemed to have approved the physical and environmental condition of the Property. Buyer shall notify Sellers in writing if Buyer disapproves the physical or environmental condition of the Property as a result of any inspection, study, test, or review conducted pursuant to Section 3).1, or failure to obtain any approval specified in Section 2.1. In such event, within fifteen (15) calendar days after receipt of any such notification, Sellers may either: (1) cancel the Escrow with respect to the Property by delivering written notice to Buyer and Escrow Holder-, or(ii) give written notice to Buyer that Sellers intend to remove or abate the condition prior to Close of Escrow ("Abatement Option"), If Sellers elect to exercise the Abatement Option, Sellers shall do so at their own cost and expense prior to Close of Escrow, or after Close of Escrow pursuant to a separate written agreement with Buyer. Section 3.3 Right to Observe Inspections and Testing. Sellers and Sellers' consultants may be present and may observe any Inspections, studies or tests conducted by Buyer or Buyer's consultants; however, Sellers and/or their consultants shall not interfere with, or in any manner impede, any such inspection, study or test, and Buyer shall in no way be responsible for the safety of, or liable for, Sellers and/or their consultants during any such inspection, study or test. Section 3.4 Repair of the Property. If Escrow is cancelled with respect to the Property, Buyer shall promptly repair any damage it has caused to the Property. Section 3.5 License for Butner Inspections. As consideration to Buyer, Sellers hereby grant a non-exclusive license to Buyer to enable Buyer to conduct Buyer's Due Diligence activities as to its proposed use of the Property for educational purposes ("Buyer License"). The BAW&G,VNIM/94900 Redlands Medical Therapy Unit 1'71077.Q18 12/31,03 -9- Buyer License shall include, but is not limited to, allowing Buyer to enter, cross over, on, along, through and across the Property and to make environmental and geological tests and borings. The Buyer License is granted subject to any covenants, restrictions, reservations, rights-of-way and encumbrances of record. Buyer shall enter the Property only from a public right-of-way, if such public right-of-way is available. ARTICLE IV SELLERS'REPRESENTATIOM AND WARRANTIES Section 4.1 In addition to any other representations and warrantees made by Sellers pursuant to this Agreement, Sellers warrant and represent that the following facts are true and correct as of the date Sellers execute this Agreement, and that the truth and accuracy of such representations and warranties shall constitute a condition to Close of Escrow. As used in this Agreement, the phrase "to Sellers' knowledge" shall be limited to the actual knowledge of the signatories to this Agreement and any and all Sellers' representatives with supervisorial or managerial responsibilities related to the Property and any constructive knowledge imparted to any of them as a result of any report, study or other documentation in Sellers' possession. (a) To Sellers' knowledge, there are no actions, suits, material claims, legal proceedings, or any other proceedings pending or threatened before any court or governmental agency that could have a material, adverse effect on Buyer's purchase, ownership, or intended use of the Property. (b) To Sellers' knowledge, there are no liens or encumbrances on, or claims to, or covenants, conditions and restrictions, leases, easements, rights-of-way or other matters affecting the Property, except as indicated in the Title Document or disclosed in Writing to Buyer and approved by Buyer. (c) To Sellers' knowledge, neither this Agreement, nor any action required hereunder, violates or shall violate any contract, agreement, or instrument to which Sellers are a party or which affects the Property, or any portion thereof No other person or entity is required BAW&GIDNIM/94906 Redlands Medical Therapy Ulfit 17107,Q 18 121.3 UO3 -to- to consent to, acknowledge, or execute this Agreement in order to validate its execution by Sellers or to permit the consummation of the transactions contemplated herein. (d) To Sellers' knowledge, neither Sellers, nor any other party to Sellers' knowledge, are in default with respect to any obligations or liabilities pertaining to the Property, nor are there any existing state of facts or circumstances, or any condition or event,that would constitute or result in any such default upon the giving of notice or the passage of time or both. Sellers have not received written notice or otherwise learned of any default or impending default by Sellers or any other party of any obligations or agreements that could have a material and adverse effect upon the Property. (e) To Sellers' knowledge, Sellers have not: (i) made a general assignment for the benefit of creditors; (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by Sellers' creditors; (iii) suffered the appointment of a receiver to take possession of all or substantially all of Sellers' assets; (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Sellers' assets; (v) admitted in writing their inability to pay their debts as they come due; or(vi) made an offer of settlement, extension or composition to their creditors generally. (f) To Sellers' knowledge, Sellers have delivered to Buyer any and all information then in Sellers' possession pertaining to any known defect or condition of the Property that may make it unsuitable for Buyer's intended use, and Sellers warrant that it shall continue thereafter to deliver to Buyer any and all such information thereafter obtained or discovered by Sellers. (g) To Sellers' knowledge, Sellers have not received any notice regarding any presence of hazardous wastes, toxic substances or related materials ("Hazardous Materials") on the Property requiring removal or mitigation under applicable laws. To Sellers' knowledge, the Property is not in violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or the environmental conditions of, under, or in the vicinity of the Property, including, without limitation, soil and groundwater conditions. To Sellers' knowledge, no BAW&G/DNIM/94906 Redlands Medical Therapy Unit 1-7107.Q18 12131/03 -11- hazardous materials exist on, under, or in the vicinity of the Property: or have been transported to or from the Property; or have been used, generated, stored, or disposed of on, under, or in the vicinity of the Property. (h) Sellers have the full right and authority to enter into this Agreement and consummate the transactions contemplated herein, and each person signing this Agreement on behalf of Sellers is authorized to do so. Section 4.2 Except as otherwise expressly provided in this Agreement, Sellers hereby disclaim all warranties of any kind or nature whatsoever(including warranties of habitability and fitness for particular purpose), whether expressed or implied, including but not limited to warranties with respect to either of the Property, or its condition or suitability for Buyer's intended use. ARTICLE V BUVER'SREPRESE,,VTAT[O!VSA.VD 1"RRANHES Section 5.1 In addition to any other representations and warranties made by Buyer pursuant to this Agreement, Buyer warrants and represents that the following facts are true and correct as of the date Buyer executes this Agreement, and the truth and accuracy of such representations and warranties shall constitute a condition to Close of Escrow. As used in this Agreement, the phrase "to Buyer's knowledge" shall be limited to the actual knowledge of the signatories to this Agreement on behalf of Buyer and any constructive knowledge imparted to them as a result of any report, study or other documentation in Buyer's possession, (a) To 9 Buyer's knowledge, neither this Agreement, nor any action required 1 hereunder, violates or shall violate any contract, agreement or instrument to which Buyer is a party. No other person or entity is required to consent to, acknowledge, or execute this Agreement in order to validate its execution by Buyer or to permit the consummation of the transactions contemplated herein. BAW&GIDNIN1,94906 Redlands kledical Therapy Unit 1710T 13 12/31/03 (b) To Buyer's knowledge, Buyer, subject to the provisions of this Agreement, has the full right and authority to enter into this Agreement and consummate the transactions contemplated herein, and each person signing this Agreement on behalf of Buyer is authorized to do so. (c) To Buyer's knowledge, except as set forth in this Agreement, there is no existing state of facts or circumstances, or any condition or event, that would preclude Buyer from fulfilling its obligations under this Agreement. Section 5.2 Buyer hereby covenants and agrees that: (a) except as expressly set forth in this Agreement, Sellers make no representations or warranties of any kind whatsoever, express or implied, in connection with this Agreement, the purchase of the Property by Buyer, the condition of the Property, or whether the Property is appropriate for Buyer's intended use; (b) Buyer has or prior to Close of Escrow will have fully investigated the Property and all matters pertaining thereto; and (c) Buyer has. or prior to Close of Escrow will have, diligently investigated all zoning and land use regulations, other governmental requirements, site and physical conditions, and other matters affecting the use and condition of the Property. Section 5.3 Condition of the Property. Sellers warrant that, to their actual knowledge without independent investigation, there are no hazardous chemicals or toxic substances located on, in or under the Property. The provisions of this Section shall not relieve Buyer of the duty to conduct a thorough environmental inspection, if any, pursuant to Article 111. ARTICLE VI INSURANCE AND INDEMNIFICA TION Section 6.1 Buyer Insurance. Buyer shall obtain and maintain during the Escrow period a policy of commercial general liability insurance providing coverage in the face amount of one million dollars ($1,000,000) for all activities conducted by Buyer related to, or connected ,-with, Buyer's due diligence inspections, tests and studies ("Buyer Policy"), The Buyer Policy shall contain a cross-liability endorsement and a waiver of the insured's rights of subrogation. The Buyer Policy shall name Sellers as additional insureds and shall include coverage for the BAW&G','DMM,'94906 Redlands'MedicalTherapy Unit 1710 Q18 12/31/03 -13- contractual liability set forth in Section 6.2. Prior to entering the Property, Buyer shall furnish Sellers with a copy of the Buyer Policy and a Certificate of Insurance stating that such insurance is in full force and effect. The Certificate of Insurance shall state that the insurer may not cancel, terminate, or allow the Buyer Policy to expire without first providing thirty (30) day prior ior written notice to Sellers. A policy of self-insurance may satisfy the foregoing obligation of Buyer to obtain and maintain the Buyer Policy. Section 6.2 Indemnification by Buyer. Buyer agrees to indemnify, defend and hold harmless Sellers and their agents, employees and contractors ("Sellers' Agents") from any loss of or damage to the Property, or injury or death of any person whomsoever, including attorneys' fees and costs, arising from the activities caused in whole or in part by any intentional or negligent act of Buyer or Buyer's Agents, or by any act or omission of Buyer or Buyer's Agents in the exercise of rights pursuant to the Buyer License, or from all mechanic liens, materialmen liens, and other liens resulting from the use of the Buyer License; provided, however, that Buyer shall not be liable in such instances that a loss, damage or injury is caused by Sellers and/or Sellers' Agents, employees or contractors, or by any act or omission for which Sellers and/or Sellers' Agents, employees or contractors are liable without fault of Buyer. ARTICLE VII DISPUTES AND DEFAULT Section 7.1 Governing Law. This Agreement shall be construed in accordance with California law. Section 7.2 Venue for Resolving Disputes. Any arbitration, mediation, litigation or other proceeding arising out of, or connected with, this Agreement shall be conducted only in the County of San Bernardino. Section 73 Interpretation of Agreement. The headings set forth in this Agreement -are for purposes of reference only and shall not limit or define the meaning of the provisions contained herein. BAW&G,DMM/94906 Redlands Medical Therapy Unit 17107,,Q18 12/31/03 -14- Section 7, 4 11ediation. The Parties desire to quickly and cost-effectively resolve any disputes related to the interpretation or enforcement of this Agreement. Therefore, each Party shall make its best efforts to resolve informally any such disputes. If, thirty , (30) calendar days after first making informal attempts to resolve any such dispute, the attempts have been unsuccessful, either Party may request that the dispute be submitted to mediation with a mutually acceptable mediator, and the Parties shall use their best efforts to resolve the dispute in mediation. The Parties shall equally bear the cost of any such mediation. Section 7.5 Attorneys'Fees. In any action between Buyer and Sellers seeking, enforcement or interpretation of any provision of this Agreement or in connection with the purchase of the Property, the prevailing Party in such action shall be awarded its reasonable costs and expenses, including, but not limited to, reasonable attorneys' fees, disbursements, and court costs, in addition to any damages, injunctive, or other relief awarded., and, without limitation, attorneys' fees, disbursements, and court costs, incurred in any post judgment proceedings to collect or enforce any judgment. I I Section 7.6 Default. Time is of the essence in this Agreement, and if either Party defaults on its obligations hereunder, then the other Party ("Non-Defaulting Party") may initiate termination of this Agreement by notice in writing to the Defaulting Party and Escrow Holder. If 1 Z7 the Defaulting Party has not fully cured the default within thirty (30) days after receipt of such written notice, the Non-Defaulting Party may instruct Escrow Holder to cancel the Escrow, and the Non-Defaulting Party shall thereupon be released from its obligations under this Agreement. In no event will termination of this Agreement relieve Sellers from any obligation to provide the Property to Buyer. Notwithstanding any other provision of this Agreement, in lieu of canceling the Escrow and terminating this Agreement, or in lieu of any other action or forbearance, after the foregoing thirty (30) day period, the Non-Defaulting Party may file an action in any court of proper jurisdiction for injunctive or other equitable relief, including specific performance. BAW&G/DNIM/94906 Redlands Medical Therapy Unit 17107,Q18 12/31103 -15- ARTICLE VIII AIISCELLA VL,'O LTS PRO VISIOAS Section 8.1 Entire Agreement. This Agreement fully and completely expresses the entire agreement between the Parties hereto with respect to the subject matter hereof Section 8.2 Waiver. The failure of either Party at any time to require a performance by the other Party of any provision hereof shall not affect in any way the full right to require such performance at any time thereafter. The waiver of any breach of any provision of this Agreement by Buyer or Sellers shall not be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement. Section 8.3 Representation byIizdcpetidentCounsel Buyer and Sellers agree and acknowledge that they have been represented by independent legal counsel of their own choice throughout all negotiations preceding the execution of this Agreement, and that they have I executed this Agreement with the consent of, and upon the advice of, their own legal counsel.. oSection 8.4 Not for Benefit of Third Parties. This Agreement and every provision hereof is for the exclusive benefit of the Parties to this Agreement and not for the benefit of any third party. Section 8.5 Assignment. This Agreement shall be binding upon the Parties hereto and their respective heirs, successors or representatives or assigns. Section 8.6 Notices. All notices, demands and other communications given or required to be given pursuant to this Agreement shall be in writing, duly addressed as indicated below, and given by personal delivery, registered or certified mail (postage prepaid and return receipt requested), Federal Express or other reliable private express delivery, or by facsimile transmission(with original to follow via first-class U.S. Mail). Such notices, demands or other -communications shall be deemed received: (i) immediately upon delivery if personally delivered or sent by facsimile transmission; or(ii) after three business days if given or sent by any other approved method specified above, Any Party specified below may, for purposes of this BAW&G.11AAW94906 '�dlands Medical Therapy Unit 17107QI8 12/31.103 -16- Agreement, change its name, address, facsimile number, or person to whom attention should be directed by giving notice in the manner specified in this Section. A copy of any notice, demand or communication sent to Buyer should also be sent to Buyer's legal counsel, and a copy of any notice, demand, or communication sent to Sellers should also be sent to Sellers' legal counsel. Notices, demands and communications shall be duly addressed as follows: To Buyer: To Sellers: San Bernardino County Board of Education City of Redlands 1040 E. Cooley Drive P.O. Box 3005 Colton, CA 92324 Redlands, CA 92373 Attn: Superintendent To Buyer's Legal Counsel: To Sellers' Anent: Bowie, Arneson,Wiles & Giannone 4920 Campus Drive Newport Beach, CA 92660 Attn: Alex Bowie, Esq. To Escrow Holder: Chicago Title Company 560 E. Hospitality Lane San Bernardino, CA 92408 Section 8.7 Incorporation of Recitals and Exhibits. All recitals and Exhibits attached hereto and referred to herein are incorporated into and are an effective part of this Agreement. Section 8.8 Severability. If any article, section, subsection, paragraph, sentence, clause or phrase contained in this Agreement shall become illegal, null or void or against public policy, for any reason, or shall be held by a court of competent jurisdiction to be illegal, null or void or against public policy, the remaining articles, sections, subsections, paragraphs, sentences, clauses or phrases contained in this Agreement shall not be affected thereby. BAW&G/DMM'"94906 Redlands Medical Therapy Unit 1710TQ18 12/31/03 -17- Section 8.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which shall constitute one and the same instrument. IN WITNESS OF THE FOREGOING, the undersigned execute this Agreement on behalf of Buyer and Sellers. SAN BEIM ARDINO COUNTY BOARD OF EDUCATI N Date: By: er ert SWintendcnt Approved as to Form By: Bowie, Arneson, Wiles & Giannone Legal Counsel for Buyer City of Redlands Date: February 17.,_ 2004 Title: /M/avor Attest: Lorre Poyze City, Clerk 5/0- BAW&G171dIM/94906 Rcdiands Medical Therapy Unit 1-107.Q 18 12/3 Uo-k is EXHIBIT A-1 LEGAL DESCRIPTION APN 168-121-04 The South 1/2 of the West 1/2 of the East 1/2 of the Northwest 1/4 of the Northwest 1/4 of Section 24,Township I South,Range 3 West, San Bernardino Base and Meridian, in the City of Redlands, County of San Bernardino, State of California,according to the Official Plat of said land filed in the District Land Office, February 24, 1869,being also described as Lot 40 of Tolles Lugonia Drawing of April 27, 1887. f EISSM., RaNALD C.MUTTER — 28129 l' Ronald C. Mutter exCjV1j 31 L ENWMNG ' OF EXHIBIT A-2 ....s � _ [Map of the Property] 4 co D OAdC OHO 'O ft CS "rt +Cori/'! O i7 d 1 cc i f 1 < N of Q9 1 ac tn ti't1f (tel ._»....__ _.._.._................. � .. ...._..... j tr't y � Cn ►— 1 cv ! 1 � 1 ! T _ x i„ 1 i y4 t3R�i�� 29 EXHIBIT B ACKNOWLEDGMENT OF ESCROW OFFICER The undersigned Escrow Holder is in receipt of that certain Purchase Agreement and Escrow Instructions between the San Bernardino County Board of Education and City of Redlands ("Agreement"), dated as of this_day of , 2004, and, in accordance therewith states that , 2004, is the date of the opening of the Escrow. The undersigned Escrow Holder agrees, to act as Escrow Holder pursuant to the terms of the Agreement. Chicago Title Company By: Escrow Officer BAW&G/D*,,I\'j'94906 Redlands IMIcclical Therapy Unit 17107,QIS 12/31/03 B-1 EXHIBIT C [STANDARD ESCROW INSTRUCTIONS] BAW&G/DMM/94906 Redlands Medical Therapy Unit 1710TQ18 12 31103 C-1 RECORDING REQUESTED BY AND WHEN RECORDED MAIL THIS GRANT DEED AND ALL TAX STATEMENTS TO: San Bernardino County Board of Education 1040 E. Cooley Drive Colton, CA 92324 Attn: Superintendent APN: 168-121-04 GRANT DEED FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged,THE CITY OF REDLANDS("Grantors"),hereby grant to the SAN BERNARDINO COUNTY BOARD OF EDUCATION ("Grantee"), a public school district organized and existing pursuant to California law,that certain real property located in the City of Redlands, County of San Bernardino, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. IN WITNESS WHEREOF, this instrument is executed this 17 day of February.-- 2004. By W-6-oll n Peppler, Mayof Attest: ,./Lorric Po'!q , City Clerk ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO SS CITY OF REDLANDS By the authority granted under Chapter 4, Article 3, Section 1181, of the California Civil Code, and Chapter 2, Division 3, Section 40814, of the California Government Code, on February 17, 2004, before me, Beatrice Sanchez, Deputy City Clerk, on behalf of Lorrie Poyzer, City Clerk of the City of Redlands, California, personally appeared Susan Peppier and Lorrie Poyzer I Xj personally known to me - or - I I proved to me on the basis of satisfactory evidence to be the persons whose names) are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. 0 ........... r'0 LORRIE POYZER, CITY CLERK % By: ALIFO� Beatrice Sanchez, Deputy City Clerk WO (909)798-7531 CAPACITY CLAIMED BY SIGNER(S) Individual(s) signing for oneself/themselves Corporate Officer(s) Title(s) Company Partner(s) Partnership Attorney-In-Fact Principal(s) Trustee(s) Trust x Other Title(s): Mayor and City Clerk Entity Represented: City of Redlands, a municipal corporation THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW: Title or Type of Document: Grant Deed Date of Document: February 17, 2004 Signer(s) Other Than Named Above: None Z7 EXHIBIT A-I LEGAL DESCRIPTION APN 168-121-04 The South 1/2 of the West 1/2 of the East 1/2 of the Northwest 1/4 of the Northwest 1/4 of Section 24, Township I South, Range 3 West, San Bernardino Base and Meridian, in the City of Redlands, County of San Bernardino, State of California, according to the Official Plat of said land filed in the District Land Office,February 24, 1869,being also described as Lot 40 of Tolles Lugonia Drawing of April 27, 1887. VRoFESS/ el RONALD C.MUTTER AA- 28129 Ronald C. Mutter exe 6.11-040 CIVIL ENWMNO .0 OF TO: CHICAGO TITLE COMPANY, licensed by the California Department of Insurance 560 EAST HOSPITALITY LANE, SAN BERNARDINO, CALIFORNIA 92408 (909)384-7858 Fax(909)384-7855 Escrow No. 42025087-K40 Escrow Officer CINDY PARSELL Date February 25,2004 1. On or before the TIME LIMIT DATE of as set forth below 2. I CHICAGO TITLE COMPANY IS IN RECEIPT OF THAT CERTAIN AGREEMENT FOR PURCHASE AND SALE OF REAL 4. PROPERTY AND ESCROW INSTRUCTIONS (HEREINAFTER REFERRED TO AS AGREEMENT), DATED FEBRUARY 5. 17, 2004, BY AND BETWEEN THE CITY OF REDLANDS, (HEREINAFTER REFERRED TO AS SELLER),AND SAN 6. BERNARDINO CNTY BOARD OF EDUCATION (HEREINAFTER REFERRED TO AS BUYER),AND HEREBY AGREES 7. TO ACCEPT THE HEREINABOVE REFERENCED AGREEMENT UNDER ESCROW NO.42025087-K40. 8. 9. Said Agreement is construed to be your escrow instructions, and you are authorized and instructed to act hereunder 10. insofar as closing your escrow is concerned. However,you are only to be concerned with those items an escrow 11. agent would normally be concerned with in the processing of this escrow. All other items of said Agreement are 12, matters between the parties which are to be handled outside of escrow.Any amendments of, or supplements to, any 13, instructions affecting this escrow must be in writing. 14. 15. We will hand you funds for disbursement as required by the above described Agreement and, prior to close of 16. escrow,will hand you all instruments required which you are instructed to record and/or deliver when you are able to 17. obtain the policy of title insurance described in the Agreement. The authorization for payment of funds prior to close 18. of escrow as set out in the agreement, if any, is given you without liability or recourse upon escrow holder for the 19. return of said funds regardless of the outcome of this escrow. 20. 21. Escrow holder is only to be concerned with the following paragraphs of said Agreement: Paragraphs 1, 2,3 and 8. 22. 23. For purposes of clarification only,the following items are added to these instructions: 24. 25. In accordance with Section 2.1,the opening of escrow shall be February 24, 2004. 26. 27. The Due Diligence referenced in Section 3.1, shall expire on August 15,2004, unless extended as provided for in the 28. Agreement. 29. 30. The close of esrow referenced in Section 2.2 shall be on or before November 13, 2004, unless extended as provided 31. for in the Agreement. 32. 33. Escrow holder shall not be placed in a position of determining default on the part of either party to this escrow. 34. 35. THE GENERAL INSTRUCTIONS/PROVISIONS OF YOUR COMPANY WHICH ARE ATTACHED HERETO, HAVE 36, BEEN READ AND ARE UNDERSTOOD BY EACH OF THE UNDERSIGNED,AND IS MADE A PART HEREOF BY THIS 37. REFERENCE INSOFAR AS SAME IS NOT IN DIRECT CONFLICT WITH THE AGREEMENT. 38, 39. The escrow fee payable in connection with this transaction shall be paid one-half by buyer in the amount of$468.00 40. and one-half by the seller in the amount of$468.00. 41. 42, 43. 44. 45. 46, 47. 48. 49. DISH (Fuge 1) a. r TO: CHICAGO TITLE COMPANY Escrow No. 42025087 - K40 Date February 25, 2004 1. Time is of the essence of these instructions. if this escrow is not in a condition to close by the TIME OMIT DATE as provided for herein and written demand for cancellation is received by you from any principal to this escrow after said date,you shall act in accordance with paragraph 7 of the General Provisions. If no conflicting instruction or demand for cancellation is made,you will proceed to close this escrow when the principals have complied with the escrow instructions. in the event one or more of the General Provisions are held to be invalid, those remaining will continue to be operative.Any amendments of or supplements to any instructions affecting escrow must be in writing.You are authorized to order demands for,and pay at the close of escrow any encumbrances of record necessary to place title in the condition called for without further authorization.You are further authorized, prior to the close of escrow,to pay from funds on deposit any fees necessary to obtain any demand and/or report as may be required in this escrow and at the close of escrow charge the parties as appropriate. The principals will hand you any funds and instruments required from each respectively to complete this escrow. Interest on any new financing may begin to accrue on the date loan funds/proceeds are disbursed by the new lender,and borrower agrees to pay same in accordance with lender's instructions. 2. You are instructed to deliver and/or record all documents and disburse all funds when you can comply with these instructions and issue any title insurance policy as called for herein. These instructions, together with any amendments and/or supplements, may be executed in counterparts and together shall constitute one and the same document. If these instructions relate to a sale,and if there is no other written agreement between the parties pertaining thereto, buyer agrees to buy and seller agrees to sell upon the terms and conditions hereof. All documents, balances and statements due the undersigned are to be mailed to the respective addresses shown herein, unless otherwise directed. in the event that any party to this escrow utilizes facsimile transmitted signed documents, all parties hereby agree to accept and hereby instruct the escrow holder to rely upon such documents as if they bore original signatures.Buyer and seller further acknowledge that any documents to be recorded bearing non original(facsimile)signatures will not be accepted for recording by the county recorder. 3. The phrase"close of escrow"(or COE)as used in this escrow means the date on which documents are recorded,unless otherwise specified. 4. Assume a 30 day month in any proration herein provided, and unless otherwise instructed,you are to use the information contained in the latest available tax statement, including any supplemental taxes of record, rental statement as provided by seller and beneficiary's or association statements delivered into escrow for proration purposes. 5. Upon close of escrow you are instructed to charge our respective accounts the costs attributable to each,including but not limited to costs as provided for herein and/or in accordance with our respective estimated statements attached hereto and made a part hereof. 6. Recordation of any instruments delivered through this escrow,if necessary or proper for the issuance of the policy of title insurance called for, is authorized.No examination or insurance as to the amount or payment of personal property taxes is required unless specifically requested. 7. If demand to cancel is submitted after the Time Limit Date,any principal so requesting you to cancel this escrow shall file notice of demand to cancel in your office in writing.You shall within three (3)working days thereafter mail by certified mail one copy of such notice to each of the other principals at the address stated in this escrow. Unless written objection thereto is filed in your office by a principal within fifteen (15) calendar days after the date of such mailing,you are instructed to cancel this escrow. If this is a sale escrow, you may return the lender's papers and/or funds upon lender's demand. 8. In the event that this escrow is canceled,any fees or charges due Chicago Title Company including cancellation fees and any expenditures incurred or authorized shall be paid from funds on deposit unless otherwise specifically agreed to or determined by a court of competent jurisdiction. Upon payment thereof,return documents and monies to the respective parties depositing same,or as ordered by the court,and void any executed instruments. 9. If there is no written activity by a principal to this escrow within any six-month period after the Time Umit Date set forth herein,Chicago Title Company may,at its option,terminate its agency obligation and cancel this escrow,returning all documents,monies or other items held,to the respective parties entitled thereto,less any fees and charges as provided herein. 10. If,for any reason,funds are retained or remain in escrow after the closing date,you may deduct therefrom a reasonable charge as custodian, of not less than$25.00 per month,unless otherwise specified. (Continued) BEIGP i SH-1 W23,'98-Irc TO: CHICAGO TTl-[E COMPANY EmcnmvNo. 42025087 - K40 Date February 25, 2004 11. Inthe event that you should receive o,become aware ovconflicting demands or claims with respect mthis escrow,orthe rights of any of the parties hereto,or any money or property deposited herein,you shall have the absolute right at your option to discontinue any or all further acts until such conflict isresolved myour satisfaction. 12. In the event that any Offer to Purchase,Deposit Receipt,or any other form of Purchase Agreement is deposited in this escrow,you,as escrow holder,are not tobmconcerned with the terms of such document and are relieved of all responsibility in connection therewith.The foregoing is not oppUrob!m in any transaction in which Chicago Title has opeoihos||y agreed to oore;t on Offer to Punohawy,Deposit Receipt orother form n| Purchase Agreement as escrow instructions. In any event,you are not to be concerned or liable for items designated as"memoranda"in these escrow instructions nor with any other agreement nrcontract between thopamien. 13. The parties hereto,by execution of these instructions acknowledge that the escrow holder assumes no responsibility or liability whatsoever for the supervision pfany act o,the performance ofany condition which iomcondition subsequent tothe closing of this escrow. 14. In the absence of instructions mthe contrary, you are hereby authorized m utilize wire aemiceo, ovemighu, next day, orother expedited delivery services(as opposed x,the regular U.8.Mail)and tocharge the respective party's account accordingly. 15� Concerning any rnm| property involved in this transaction you are released from and souU have no Uubi|i1Y, obligation or responsibility with respect to (a)withholding nffunds pursuant toSection 1o«aof the Internal Revenue Code cd1eeOaaamended, and mSections 1eOGuand 18668 of the California Revenue and Taxation Code, (z) advising the parties as to the requirements of said Gocnoo 14*5. (c) determining whether the transferor is a foreign person or a non-resident under such Section, nor (d) obtaining a non foreign affidavit or other exemption from withholding under said Sections nor otherwise making any inquiry concerning compliance with such Sections uyany party tothe transaction. 16. If you pay demand to pay in h/||a revolving line of veuu or equityline loon,you are hereby instructed on mybehalf and for mybenefit,«, request that the lender issuing said demand cancel said revolving line oreqoityUnmofcredit. 17. You are authorized vofurnish many affiliate of Chicago Title Cvmpany,any attorney, broker n,lender identified with this transaction or any one acting on behalf of such lender any information,instructions,amendments,statements,or notices of cancellation given in connection with this escrow. Ifany check submitted to escrow is dishonored when presented for payment,you are authorized to notify all principals and/or their respective agents ofsuch non payment, 18, All notices, change u/instructions, communications and documents are tobedelivered inwriting mthe office ofChicago Title Company,ao set forth herein. 19. All funds received in this escrow shall be deposited with other escrow funds in one or more non-interestbearing demand accounts ofChicago Title Company in any state or federal bank or any state or federal savings and loan association ("the depository institutions') and mo�ua transferred toany other such accounts. The parties to this escrow acknowledge that while these accounts do not boar interest,because of these and other banking relationships with the depository institutions, Chicago Title Company and its u#iUmteo may receive from some of the depository institutions on array of banking oemiuwn,accommodations or other hmns§oa.Chicago Tide Company and its affiliates also may elect um,ente/into other business transactions with orobtain loans for investment or other purposes from some of the depository institutions.All of such services,accommodations and other benefits shall accrue, directly or Indirectly, to Chicago Tide Company and its affiliates and they shall have no obligation to account uothe parties mthis escrow for the value of such services, accommodations or other benefits. All disbursements shall be made by Chicago Title Company check,unless otherwise instructed. Chicago Title Company uMa|| not be responsible for any delay in dmdog if funds received by escrow are not available for immediate withdrawal. Chicago Title Company may, at its option, require concurrent instructions from all principals prior to release of any funds on deposit inthis escrow. 20. You are authorized to destroy o, otherwise dispose of any and all documents, papsm, instructiooa, correspondence and other material pertaining*othis escrow mthe expiration cdsix (6)years from the close o(escrow o,cancellation thereof,without liability and without further notice. (Continued) (Continued) TO: CHICAGO TITLE COMPANY Escrow No. 42025087 - K40 Date February 25, 2004 IMPORTANT NOTICE Except for wire transfers, funds remitted to this escrow are subject to availability requirements imposed by Section 12413.1 of the California Insurance Code. CASHIER'S, CERTIFIED or TELLER'S checks, payable to CHICAGO TITLE COMPANY are generally available for disbursement on the next business day following the date of deposit. Other forms of payment may cause extended delays in the closing of your transaction pursuant to the requirements imposed by State Law. (Wire transfer information available upon request) ALL PARTIES TO THIS ESCROW ACKNOWLEDGE THAT CHICAGO TITLE COMPANY DOES NOT PROVIDE LEGAL ADVICE NOR HAS IT MADE ANY INVESTIGATION, REPRESENTATIONS OR ASSURANCES WHATSOEVER REGARDING THE LEGAL ASPECTS OR COMPLIANCE OF THIS TRANSACTION WITH ANY TAX, SECURITIES OR ANY OTHER STATE OR FEDERAL LAWS. IT IS RECOMMENDED THAT THE PARTIES OBTAIN INDEPENDENT LEGAL COUNSEL AS TO SUCH MATTERS. THE FOREGOING ESCROW INSTRUCTIONS AND GENERAL PROVISIONS HAVE BEEN READ AND ARE UNDERSTOOD AND AGREED TO BY EACH OF THE UNDERSIGNED. CITY OF REDLANDS SAN BERNARDINO CNTY BOARD OF EDUCATION BY VJ�44'ir- BY BY SUSAN PEPPLER, MAYOR BY Attest: BY LO� IE POYOI,—)CITY—CLERK Current Address: Current Address: P.O. BOX 3005 1040 E. COOLEY DRIVE REDLANDS, CALIFORNIA 92373 COLTON, CALIFORNIA 92324 Telephone: Telephone: 9EIGP3SH-10123/98-Irc EXHIBIT B ACKNOWLEDGMENT OF ESCROW OFFICER The undersigned Escrow Holder is in receipt of that certain Purchase Agreement and Escrow Instructions between the San Bernardino County Board of Education and City of Redlands ("Agreement") dated as of this��day of 2004, and, in accordance Z--y therewith states that 4—e— - 1'4 , 2004, is the date of the opening of the Escrow. The undersigned Escrow Holder agrees to act as Escrow Holder pursuant to the terms of the Agreement. Chicago Title Company By: Escrofficer 7 107,QIS 12!3 1iO3 B-1 �HCAGQ�TITLE COMPANY CHICAGO TITLE COMPANY �1 _ _a1l 1000010000 560 EAST HOSPITALITY LANE,SAN BERNARDINO,CALIFORNIA 92408 CHICAGO HOSPITALITY LANE,SAN BERNARDINO,CALIFORNIA 92408 (909)884-0448 Fax(909)384,7855 (909)884-0448 Fax(909)384-7855 iscrowNO. 42025087 - K40 Escrow Officer CINDY PARSELL Date March 4, 2004 Escrow No. 04202509-7 Escrow Officer CINDY PARSELL Date March 4, 2004 NOTICE OF TAX WITHHOLDING REQUIREMENTS NOTICE OF TAX WITHHOLDING REQUIREMENTS (Continued) In accordance with Sections 18662 and 18668 of the California Revenue and Taxation Code,a buyer may be required to withhold an amount equal to THREE AND ONE-THIRD percent (3-1/3%) of the sales price In the case of a The escrow holder will not undertake to withhold or remit funds to any taxing authority, unless specifically instructed in disposition of California real property Interest by either: writing to do so.In the event escrow is so requested,appropriate mutual Instructions will be required_ 1. A setter who Is an Individual or when the disbursement Instructions authorize the proceeds be sent to a DUE TO THE COMPLEXITY OF THESE TAX LAWS, AND THE PENALTY PROVISIONS FOR 'financial Intermediary*of the sailer,OR FAILURE TO WITHHOLD, IT IS RECOMMENDED THAT THE PARTIES TO THIS TRANSACTION 2. A corporate sailor that has no permanent place of business In California. SHOULD SEEK THE PROFESSIONAL ADVICE AND COUNSEL OF AN ATTORNEY, ACCOUNTANT OR FINANCIAL ADVISOR CONCERNING THE EFFECT OF THESE LAWS ON THIS The buyer may become subject to penalty for(allure to withhold In an amount equal to the greater of Ten percent(10%) TRANSACTION AND SHOULD NOT ACT ON ANY STATEMENTS MADE OR OMITTED BY THE of the amount required to be withhold or five hundred dollars($500). ESCROW OR CLOSING OFFICER. However, notwithstanding any other provision Included In the California statutes referenced above,no buyer will be required to withhold any amount or be subject to penalty for failure to withhold If: 1. The sales price of the California real property conveyed does NOT exceed one hundred thousand dollars($100,000),OR 2, The setter executes a written certificate, under the penalty of perjury, certifying that the seller is a CITY QF REDLANDS SAN BERNARDINO CNTY BOARD OF EDUCATION corporation with a permanent place of business In California,OR 3. The seller,who Is an Individual,executes a written coniftcals,under the penalty of perjury,of any of the SUS uSo PEPPLER, MA)16# A. That the California real property being conveyed Is the Settees principal residence ATTEST: (within the meaning of Section 121 of the internal Revenue Code). B. That the California real property being conveyed Is or will be exchanged for property of like kind(within the meaning of Section 1031 of the Internal Revenue Code),but only to the extent of the amount of gain not required to be recognized for California income tax ��K purposes under Section 1031 of the Internal Revenue Code. LRIE POY ITY CLERK C. That the California real property has been compulsorily or Involuntarily converted (within the meaning of Section 1033 of the Internal Revenue Code)and that the seller Intends to acquire property similar or related In service or use so as to be eligible for nonrecognition of gain for California Income tax purposes under Section 1033 of the Internal Revenue Code. M That the California real property transaction will result In a loss for California Income tax purposes. The sailer Is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding requirement. The California statutes referenced above Include provisions which authorize the Franchise Tax Board to grant reduced withholding and waivers from withholding on a case-by-case basis for corporations or other entities. Additionally,under the federal"Foreign Investment In Real Property Tax Act"(FIRPTA)as amended and related laws,a buyer may be required to withhold,and could be liable for,an additional tax equal to TEN percent(10%)of the sales price of the real property being conveyed,In the case of a seller who may be classified as a*foreign person'under Section 1446 of the Internal Revenue Code of 1986. IRS Regulations state that a foreign seller lacking an Individual Taxpayer Identification Number(ITIN) will automatically be subject to withholding upon the transfer of real property.A seller may apply for an ITIN,however,It must be obtained prior to the time of transfer. The Federal statute referenced above includes provisions that authorize the IRS to grant reduced withholding and waivers from withholding on a case-by-case basis.The parties herein may wish to Investigate these options with their own legal or financial advisors or the Internal Revenue Service.