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Home My WebLink AboutContracts & Agreements_32-2022PURCHASE AND SALE AGREEMENT AND IRREVOCABLE ESCROW INSTRUCTIONS by and between SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, a California municipal water district, as "Seller", and CITY OF REDLANDS, a California municipality, as "Buyer" TABLE OF CONTENTS ARTICLE I PURCHASE AND SALE 1 Section 1 1 Agreement of Purchase and Sale. 1 Section 1.2 Purchase Price. .2 Section 1.3 Payment of Purchase Price. .2 Section 1 4 Deposit. .2 Section 1.5 Deposit as Liquidated Damages. .2 ARTICLE II TITLE .3 Section 2.1 Delivery of Title Documents. .3 Section 2.2 Title Examination. .3 Section 2.3 Permitted Exceptions. 4 ARTICLE III ESCROW AND CLOSING .5 Section 3 1 Opening of Escrow .5 Section 3.2 Seller's Deposits. 5 Section 3.3 Buyer's Deposits 6 Section 3 4 Concurrent Conditions. 6 Section 3.5 Closing. 6 Section 3 6 Closing Procedure. 6 Section 3 7 Recording and Distribution of Documents. 7 Section 3 8 Conditions Precedent to Obligation of Buyer 7 Section 3.9 Conditions Precedent to Obligation of Seller 7 Section 3 10 Credits and Prorations 8 Section 3 11 Transaction Taxes and Closing Costs. .9 ARTICLE IV DUE DILIGENCE 10 Section 4 1 Section 4.2 Section 4.3 Due Diligence Inspection of Seller's Documents Physical Inspection. ARTICLE V REPRESENTATIONS AND WARRANTIES 10 10 11 12 Section 5 1 Representations and Warranties of Seller 12 Section 5.2 Disclaimer of Further Representations and Warranties. 13 Section 5.3 Release. 16 Section 5 4 Definitions 16 i Section 5 5 Representations and Warranties of Buyer 17 Section 5 6 Buyer's Investigations 18 Section 5 7 Buyer's Indemnity 18 Section 5 8 Procedure for Claims. 19 ARTICLE VI DEFAULT .20 Section 6 1 Default. .20 Section 6.2 Default by Buyer .20 Section 6.3 Default by Seller .20 ARTICLE VII CONDEMNATION .20 Section 7 1 Definition of Terms. .20 Section 7.2 Taking. .20 Section 7.3 Distribution of Award. .21 ARTICLE VIII BROKERAGE COMMISSIONS Section 8 1 Brokers. ARTICLE IX MISCELLANEOUS .21 .21 .21 Section 9 1 Incorporation of Recitals and Exhibits. .21 Section 9.2 Successors and Assigns .21 Section 9.3 Notices. .21 Section 9 4 Entire Agreement. .22 Section 9.5 Modifications. .22 Section 9 6 Further Assurances .22 Section 9 7 Counterparts. .23 Section 9 8 Electronic Signatures. .23 Section 9.9 Severability .23 Section 9 10 Applicable Law .23 Section 9 11 No Third Party Beneficiary .23 Section 9 12 Captions. .23 Section 9 13 Construction. .23 Section 9 14 Recordation. .23 Section 9 15 Date of Performance .23 Section 9 16 Attorneys' Fees. .23 Section 9 17 Time of Essence. .24 ii EXHIBIT "A" - LEGAL DESCRIPTION EXHIBIT "B" - GRANT DEED iii PURCHASE AND SALE AGREEMENT AND IRREVOCABLE ESCROW INSTRUCTIONS THIS PURCHASE AND SALE AGREEMENT AND IRREVOCABLE ESCROW INSTRUCTIONS ("Agreement") is made as of 15th day of March, 2022 ("Effective Date"), by and between San Bernardino Valley Municipal Water District, a California municipal water district organized and existing under the Municipal Water District Law of 1911 (Water Code §71000 et seq) ("Seller"), and City of Redlands, a California municipality and general law city ("Buyer") Seller and Buyer are sometimes referred to in this Agreement individually as a "Party" or collectively as the "Parties" RECITALS A. Seller is the owner of approximately 2,500 square feet of real property, including all improvements thereon and appurtenances thereto, generally located west of Wabash Avenue along the north line of San Bernardino Avenue in the city of Redlands, county of San Bernardino, State of California, more particularly identified as Assessor Parcel No 0168-091-07, and more particularly described in the legal description attached as Exhibit "A" hereto and incorporated herein by this reference ("Property") B Seller desires to sell the Property to Buyer and Buyer desires to purchase the Property from Seller on the terms and conditions set forth in this Agreement. OPERATIVE PROVISIONS NOW, THEREFORE, incorporating the foregoing Recitals, and in consideration of the mutual covenants and conditions contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows ARTICLE I PURCHASE AND SALE Section 1 1 Agreement of Purchase and Sale Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell and convey the Property to Buyer, and Buyer agrees to purchase the Property from Seller, on an AS -IS, WHERE -IS basis with all faults. It is specifically understood that Buyer, as of the Closing Date (as defined in Section 3.5), will have conducted its own due diligence in accordance with this Agreement to satisfy itself with respect to the condition of title of the Property, the physical and environmental condition of the Property, the current and future entitlements to the Property, as well as other conditions of the Property During Buyer's due diligence of the Property, Buyer shall not rely on any representations or warranties of Seller regarding the Property, except as expressly set forth in this Agreement. An escrow account for the purpose of consummating the transactions contemplated by this Agreement ("Escrow") shall be established at First American Title Insurance Company, Attn. Kelly Simoneau, Senior Commercial Escrow Officer, 3281 East Guasti Road, Suite 440, Ontario, California 91761, (909) 510-6200, ksimoneau@firstam.com ("Escrow Holder") Buyer and Seller will execute additional 1 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn instructions, documents, and forms provided by Escrow Holder that are reasonably necessary to close the Escrow, as directed by Escrow Holder, within seven (7) days after receipt of same. Section 1.2 Purchase Price The purchase price for the Property paid by Buyer to Seller will be Twenty -Two Thousand Five Hundred Dollars and Zero Cents ($22,500 00) ("Purchase Price") Section 1.3 Payment of Purchase Price The Purchase Price will be paid in full through Escrow at the Closing in cash or by wire transfer of immediately available funds to a bank account designated by Escrow Holder through written instructions provided to Buyer before the Closing. Section 1 4 Deposit. (a) Within two (2) business days after the Effective Date, Buyer shall deliver to the Escrow Holder the sum of One Thousand Dollars and Zero Cents ($1,000 00) ("Deposit"), which shall be held in Escrow pursuant to the terms of this Agreement. The Deposit shall be delivered to the Escrow Holder in good funds either by certified bank or cashier's check or by wire transfer The Escrow Holder shall place the Deposit in an interest -bearing account on Buyer's behalf. The Deposit shall be applied to the Purchase Price in accordance with this Agreement. The Deposit shall be fully refundable to Buyer during the Title Examination Period (as defined in Section 2.2(a)) and the Contingency Period (as defined in Section 4 1) Provided this Agreement is not terminated as provided in Section 2.2(a) or Section 4 1, then Escrow Holder shall promptly release to Seller the Deposit and the Deposit shall be non-refundable to Buyer, but applicable to the Purchase Price, except as otherwise provided in this Agreement. (b) Within five (5) business days after Escrow Holder's receipt of the Deposit, Escrow Holder shall release to Seller the amount of One Hundred Dollars and Zero Cents ($100 00) as and for independent consideration for Seller's execution of this Agreement and the granting of the Contingency Period to Buyer as herein provided. Such portion of the Deposit to be released to Seller shall be non-refundable to Buyer, but applicable to the Purchase Price. Section 1.5 Deposit as Liquidated Damages. THE DEPOSIT SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED IN THIS AGREEMENT IS NOT CONSUMMATED FOR ANY REASON, EXCEPT SELLER'S DEFAULT, AFTER THE EXPIRATION OF THE CONTINGENCY PERIOD THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT THAT THE SALE IS NOT SO CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY INITIALING THIS SECTION 1.5, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE CLOSING DOES NOT OCCUR AFTER THE EXPIRATION OF THE CONTINGENCY PERIOD FOR REASONS OTHER THAN SELLER'S DEFAULT BUYER AND SELLER AGREE TO EXECUTE ANY ADDITIONAL DOCUMENTS THAT MAY BE REQUIRED BY ESCROW HOLDER TO EFFECTUATE THE TERMS OF THIS SECTION 1.5. BY THEIR SEPARATELY INITIALING THIS SECTION 1.5, 2 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES O LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMEN WAS CUTED. BUYER'S INITIAL SELLER'S INITIALS AD ARTICLE II TITLE Section 2 1 Delivery of Title Documents Seller will contract with First American Title Insurance Company ("Title Company"), at Seller's expense, to cause Title Company to issue and deliver to Buyer within five business (5) days after the Effective Date, or a soon thereafter as may be commercially feasible (a) a current title commitment ("Title Report"), and (b) legible copies of all documents referred to in the Title Report ("Title Exception Documents"). The Title Report and the Title Exception Documents are collectively referred to in this Agreement as the "Title Documents" Section 2 2 Title Examination (a) Buyer shall notify Seller in writing ("Title Notice") no later than 5 00 p m (Pacific Time) on the date which is ten (10) business days after the Effective Date ("Title Examination Period") which exceptions to title (including survey matters), if any, will not be accepted by Buyer If Buyer fails to timely provide Seller with the Title Notice on or before the expiration date of the Title Examination Period, then Buyer shall be deemed to have elected not to proceed with the purchase of the Property If Buyer delivers the Title Notice to Seller objecting to any exceptions to title, then Seller shall have three (3) business days after receipt of the Title Notice to notify Buyer in writing of the following (i) that Seller will remove the objectionable exceptions from title on or before the Closing, or (it) that Seller elects not to cause the exceptions to be removed If Seller fails to notify Buyer in writing of its election within the three (3) day period, Seller will be deemed to have elected not to cause the exceptions to be cured The procurement by Seller of a commitment for the issuance of the Title Policy (as defined in Section 3 6) or an endorsement thereto satisfactory to Buyer in its reasonable discretion and insuring Buyer against any title exception which was disapproved pursuant to this Section 2 2 shall be deemed a cure by Seller of Buyer's disapproval If Seller gives Buyer notice under clause (n) above or fails to notify Buyer of its election, then Buyer shall have two (2) business days within which to notify Seller in writing that Buyer will nevertheless proceed with the purchase and take title to the Property subject to such exceptions, or that Buyer will terminate this Agreement ("Buyer Written Title Election") If Buyer fails to provide Seller with a Buyer Written Title Election before the expiration of the two (2) day period referenced in the preceding sentence, then Buyer shall be deemed to have elected not to proceed with the purchase of the Property If this Agreement is terminated pursuant to the foregoing provisions of this Section, then neither Party shall have any further rights or obligations under this Agreement (except for any indemnity obligations of Seller and Buyer pursuant to the other provisions of this Agreement), the Deposit and all interest thereon less escrow cancellation fees shall be returned to Buyer, and each Party shall bear its own costs incurred concerning this Agreement 3 L \ca\dim \ Agreements \SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn (b) If the Title Company issues an updated Title Report prior to the Closing identifying exceptions that were not included within the original Title Report ("Additional Exceptions"), Buyer shall notify Seller and Escrow Holder in writing (the "Additional Title Notice") no later than five (5) days immediately following Buyer's receipt of the updated Title Report ("Additional Title Examination Period"), which Additional Exceptions to title, if any, will not be accepted by Buyer If Buyer fails to timely provide Seller with the Additional Title Notice on or before the expiration of the Additional Title Examination Period, then Buyer shall be deemed to have elected not to proceed with the purchase of the Property If Buyer delivers the Additional Title Notice to Seller and Escrow Holder objecting to any material Additional Exceptions to title, then Seller shall have three (3) business days after receipt of the Additional Title Notice to notify Buyer and Escrow Holder in writing of the following: (i) that Seller will remove such objectionable Additional Exceptions from title on or before the Closing; or (ii) that Seller elects not to cause such Additional Exceptions to be removed. If Seller fails to notify Buyer and Escrow Holder in writing of its election within said three (3) day period, Seller shall be deemed to have elected not to cause such Additional Exceptions to be cured. The procurement by Seller of a commitment for the issuance of the Title Policy (as defined in Section 3 6 below) or an endorsement thereto satisfactory to Buyer in its reasonable discretion and insuring Buyer against any material Additional Exception that was disapproved pursuant to this Section 2.2(b) shall be deemed a cure by Seller of such disapproval. If Seller gives Buyer notice under clause (ii) above or fails to notify Buyer and Escrow Holder in writing of its election, then Buyer shall have two (2) business days within which to notify Seller and Escrow Holder in writing that Buyer will nevertheless proceed with the purchase and take title to the Property subject to such exceptions, or that Buyer will terminate this Agreement ("Additional Title Election") If Buyer fails to provide Seller with an Additional Title Election prior to the expiration of the two (2) day period referenced in the preceding sentence, then Buyer shall be deemed to have elected not to proceed with the purchase of the Property If this Agreement is terminated pursuant to the foregoing provisions of this paragraph, then neither Party shall have any further rights or obligations hereunder (except for any terms which expressly survive termination, including, but not limited to, the indemnity obligations of Seller and Buyer pursuant to the other provisions of this Agreement and except for any escrow fee owed to Escrow Holder which shall be divided equally between the Parties), the Deposit and all interest accrued thereon less escrow cancellation fees shall be returned to Buyer, and each Party shall bear its own costs incurred hereunder Section 2.3 Permitted Exceptions The Property shall be conveyed subject to the following matters, which are hereinafter referred to as the "Permitted Exceptions" (a) Those matters shown on Title Report that either are not objected to in writing or deemed objected to within the time periods provided in Section 2.2 above, or if objected to in writing by the Buyer, are those which Seller has elected not to remove or cure, or has been unable to remove or cure, and subject to which Buyer has elected in writing to accept the conveyance of the Property; (b) The lien of all ad valorem real estate taxes, special taxes, and assessments not yet due and payable as of the Closing Date, subject to adjustment as herein provided, but specifically excluding any escape assessments or supplemental assessments relating to the period before the Closing; 4 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn (c) Local, state, and federal laws, ordinances, or governmental regulations, including, but not limited to, building and zoning laws, ordinances, and regulations, now or hereafter in effect relating to the Property; and (d) Seller shall satisfy and discharge any liens attributable to Seller on the Property prior to or at Closing. ARTICLE III ESCROW AND CLOSING Section 3 1 Opening of Escrow Within two (2) business days after the Effective Date, Buyer and Seller shall deposit a fully executed copy of this Agreement with Escrow Holder Upon the Opening of Escrow, Buyer shall deliver the Deposit to the Escrow Holder as provided in Section 1 4 above. If the Deposit has not been delivered as required hereunder, this Agreement shall be null and void and of no further force and effect. For purposes of this Agreement, the "Opening of Escrow" shall be the date on which such executed copy of this Agreement is deposited with Escrow Holder This Agreement shall also constitute instructions to Escrow Holder If there is any conflict between the provisions of this Agreement and the terms of any general escrow provisions agreed upon by Buyer and Seller, the provisions of this Agreement shall control. Section 3.2 Seller's Deposits No later than the business day immediately preceding the Closing, Seller shall deliver to Escrow Holder the following: (a) A duly executed and notarized grant deed ("Deed") substantially in the form attached hereto as Exhibit "B" and by this reference made a part hereof; (b) Such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Seller; (c) Such documents as the Title Company may reasonably require to issue an ALTA Extended Coverage Owner's Policy of Title (as described in Section 3 6(d) below), provided, however, that Seller's delivery of such documents to Escrow Holder shall not be a condition to Buyer's obligation to close Escrow, and Seller's failure to deliver such documents to Escrow Holder shall not constitute a breach of Seller's obligations hereunder, if such documents are not reasonably available to Seller and the Title Company is prepared to issue an ALTA Standard Coverage Owner's Policy of Title Insurance (as described in Section 3 6(d) below), (d) An executed closing statement reasonably acceptable to Seller, (e) A Certification of Non -Foreign Status certifying, pursuant to Internal Revenue Code Section 1445, that Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as these terms are defined in the Internal Revenue Code and U S Department of Treasury Regulations), (f) A California Real Estate Withholding Exemption Certificate, signed by Seller pursuant to Revenue and Taxation Code Sections 18662 and 18668 or any successor statutes, and 5 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn (g) Such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement. Section 3.3 Buyer's Deposits No later than the business day immediately preceding the Closing, Buyer shall deliver to Escrow Holder the following: (a) The full amount of the Purchase Price, less the Deposit and interest accrued thereon applicable to the Purchase Price, (b) An executed preliminary change of ownership report in the form prescribed by the San Bernardino County Recorder ("PCOR"), (c) Such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Buyer, (d) An executed closing statement reasonably acceptable to Buyer; and (e) Such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement. Section 3 4 Concurrent Conditions. The obligations set forth in Section 3.2 and Section 3.3 above shall be concurrent conditions for Seller and Buyer respectively to close the transaction contemplated by this Agreement. Section 3.5 Closing. The closing of the transaction contemplated hereby ("Closing") shall be held in escrow through Escrow Holder within five (5) business days after expiration of the Contingency Period (as defined in Section 4 1 below) ("Closing Date") Notwithstanding anything contained herein to the contrary, in the event that the Closing has not occurred on or before April 26, 2022, ("Outside Closing Date"), this Agreement shall automatically terminate in all respects, in which case Seller shall be entitled to the Deposit, with accrued interest, from Escrow Holder, unless all contingencies to Closing set forth herein have been satisfied and the failure of Closing to occur is the result of Seller's default, in which case Buyer's remedies shall be as set forth in Section 6.3 Section 3 6 Closing Procedure When each of the items described in Section 3.2 and Section 3.3 above has been deposited into Escrow and Title Company is prepared to issue the Title Policy, Escrow Holder shall on the Closing Date perform the following. (a) Record the Deed in the Office of the San Bernardino County Recorder in the order described in Section 3 7 below; (b) File the PCOR with the San Bernardino County Recorder thereafter, (c) Deliver to Seller all amounts deposited by Buyer in payment of the Purchase Price, less Seller's share of closing costs and prorations as provided hereafter, and (d) Issue and deliver to Buyer an American Land Title Association ("ALTA") Standard Coverage Owner's Policy of Title Insurance with liability in the amount of the Purchase 6 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.doex.jn Price ("Title Policy") insuring title to the Property vested in Buyer subject only to the Permitted Exceptions Buyer may elect to obtain an ALTA Extended Coverage Owner's Policy and/or any endorsements to the Title Policy provided that Buyer pays the additional premium for the extended coverage, the cost of any required survey, and the cost of any endorsements. The ability or willingness of the Title Company to issue such extended coverage policy and/or any endorsements shall not be a condition to Buyer's obligation to close Escrow Section 3 7 Recording and Distribution of Documents Escrow Holder shall cause documents to be recorded concurrently and in the following order (a) the Deed, and (b) any deeds of trust or other documents to be recorded through Escrow at Buyer's instruction. All documents delivered for recordation by Escrow Holder shall provide that they are to be returned after recordation to Escrow Holder When originals of such recorded documents are returned to Escrow Holder, Escrow Holder shall deliver (i) the original recorded Deed to Buyer with a copy (showing all recording information) to Seller; and (ii) any deeds of trust to the beneficiaries under such documents, with copies (showing all recording information) to Buyer and Seller Section 3.8 Conditions Precedent to Obligation of Buyer The obligation of Buyer to consummate the transaction under this Agreement shall be subject to the fulfillment on or before the Closing Date of all of the following conditions, any or all of which may be waived by Buyer in its sole discretion. (a) On the Closing Date, the Title Company shall be prepared and committed to issue to Buyer a Title Policy with coverage in the amount of the Purchase Price, showing fee title vested in Buyer, subject only to the Permitted Exceptions, and provided that Buyer may elect to obtain any additional endorsements to the Title Policy at Buyer's election and at its sole expense (unless such additional endorsement is being provided by Seller to cure a title or survey objection which Seller has elected to cure), provided, however, that the availability of any such endorsements shall not constitute a condition to Buyer's obligation to proceed with the Closing (unless such endorsement is being provided by Seller to cure a title or survey objection which Seller has elected to cure), (b) Seller shall have delivered to Escrow Holder all of the items required to be delivered to Escrow Holder pursuant to the terms of this Agreement, including, but not limited to, those provided for in Section 3.2, (c) All of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date, (d) Seller shall have performed and observed in all material respects all covenants and agreements of this Agreement to be performed and observed by Seller as of the Closing Date, and (e) No material physical change shall have occurred to the Property from the Effective Date up to the Closing Date, with the exception of reasonable wear and tear and any changes to the Property caused by Buyer Section 3.9 Conditions Precedent to Obligation of Seller The obligation of Seller to consummate the transaction hereunder shall be subject to the fulfillment on or before the Closing 7 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn Date of all of the following conditions, any or all of which may be waived by Seller in its sole discretion. (a) Seller shall have received the Purchase Price, as adjusted and payable in the manner provided for in this Agreement; (b) Buyer shall have delivered to Escrow Holder all of the items required to be delivered to Escrow Holder pursuant to the terms of this Agreement, including, but not limited to, those provided for in Section 3.3, (c) All of the representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the Closing Date, and (d) Buyer shall have performed and observed in all material respects all covenants and agreements of this Agreement to be performed and observed by Buyer as of the Closing Date Section 3 10 Credits and Prorations (a) All income and expenses of the Property shall be apportioned on the basis of a 30-day month as of 12 01 a.m. (Pacific Time) on the Closing Date as if Buyer were vested with title to the Property during the entire day upon which Closing occurs. Such prorated items include, without limitation, the following. (i) Taxes and assessments levied against the Property; (ii) Payments on bond and assessments against the Property; (iii) Any owner's association dues and fees, common area expenses or other expenses related to the Property; and (iv) Any other expenses or other items pertaining to the Property which are customarily prorated between a buyer and a seller in San Bernardino County, California. (b) Notwithstanding anything contained in Section 3 10(a), any taxes paid at or before Closing shall be prorated based upon the amounts actually paid. If taxes and assessments due and payable during the year of Closing have not been paid before Closing, Seller shall be charged at Closing an amount equal to that portion of such taxes and assessments which relates to the period before Closing (as well as any taxes and assessments for any year before the year of the Closing), and Buyer shall pay the taxes and assessments before their becoming delinquent subsequent to the Closing Date Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed shall be based upon the tax rate and/or assessed valuation fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at Closing, the Parties shall make all necessary adjustments by appropriate payments between themselves within thirty (30) days after such amounts are determined following Closing. Buyer shall pay all supplemental taxes resulting from the change in ownership and reassessment occurring as of and after the Closing Date 8 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docxjn (c) The provisions of this Section 3 10 shall survive Closing. Section 3 11 Transaction Taxes and Closing Costs (a) Seller and Buyer shall execute such returns, questionnaires and other documents as shall be required with regard to all applicable real property transaction taxes imposed by applicable federal, state, or local law or ordinance (b) Seller shall pay the following costs and expenses. (i) The fees of any counsel representing Seller in connection with this transaction, except as otherwise provided in this Agreement; (ii) The premium for the Title Policy and the fee for any endorsements to the Title Policy obtained by Seller or at Seller's direction to insure against any title objections of Buyer which Seller has agreed to cure, (iii) One-half of the escrow fee, if any, which may be charged by the Escrow Holder or Title Company; (iv) All recording fees incurred in connection with the transfer of the Property; (v) Any documentary transfer taxes, including city and county transfer taxes, or similar taxes that become payable by reason of the transfer of the Property; and (vi) Such other closing costs, if any, not expressly provided for herein that are customarily charged to sellers of commercial real property for the county in which the Property is located. (c) Buyer shall pay the following costs and expenses (i) The fees of any counsel representing Buyer in connection with this transaction, except as otherwise provided in this Agreement; (ii) The fee for any extended coverage policy and/or endorsements to the Title Policy (except for any endorsements obtained by Seller to cure or remove a title obj ection), (iii) One-half of the escrow fee, if any, which may be charged by the Escrow Holder or Title Company; and (iv) Such other closing costs, if any, not expressly provided for herein, that are customarily charged to buyers of commercial real property for the county in which the Property is located. (d) All costs and expenses incident to this transaction and the Closing that are not specifically described above, shall be paid by the Party incurring the same. 9 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn (e) The provisions of this Section 3 11 shall survive the Closing. ARTICLE IV DUE DILIGENCE Section 4 1 Due Diligence. (a) Buyer shall have until 5.00 p.m. on the thirtieth (30th) day after the Effective Date ("Contingency Period Expiration Date") to conduct its due diligence regarding the Property in accordance with this Article IV ("Contingency Period") (b) Buyer may, in Buyer's sole discretion, approve the condition of the Property during the Contingency Period by providing written notice to Seller ("Approval Notice") on or before the Contingency Period Expiration Date If Buyer does not provide a timely Approval Notice to Seller, this Agreement and Escrow shall terminate, neither Party shall have any further rights or obligations under this Agreement (except for any indemnity obligations of Seller and Buyer pursuant to the other provisions of this Agreement), the Deposit and all interest thereon less escrow cancellation fees shall be returned to Buyer, and each Party shall bear its own costs incurred concerning this Agreement. If Buyer does provide a timely Approval Notice, the Deposit shall be released to Seller and become non-refundable, but applicable to the Purchase Price. Section 4.2 Inspection of Seller's Documents. Within five (5) days after the Effective Date, Seller shall make available to Buyer copies of all of the following documents in the possession or control of Seller or any affiliate of Seller in connection with the Property, if any• environmental reports as to the environmental condition of the Property; environmental permits, applications or correspondence between Seller and any governmental entity in connection with any Hazardous Material (as defined in Section 5 4(b)) located in, on, or under the Property; soils reports, seismic reports, surveys, maps, tests, plans, licenses, permits (including building permits), governmental regulation documents, zoning entitlements, land use documents, availability of utilities studies, CC&Rs, easements, contracts, leases, plan studies, reports, building plans, maintenance reports, and property inspection reports, if any, that bind the Property or that will affect the use of the Property after the Close of Escrow; and other studies, reports, documents, and information pertaining to the Property, but excluding any privileged or confidential documents of Seller (collectively, "Seller's Documents") Seller's Documents do not include any information which may be in the possession of a third party consultant, engineer, or other person that is not also in Seller's actual physical possession, provided, however, if Buyer determines that a relevant document may exist but is in the possession of a third party, Seller shall cooperate with Buyer in good faith to obtain a copy of such document. Seller makes no representation or warranty regarding the accuracy or completeness of any information contained in Seller's Documents, all such information being made available on an "AS -IS" basis. Seller makes no representation or warranty regarding its knowledge of third party consultants and Seller shall have no liability for failure to disclose any third party which may have knowledge regarding the Property, it being understood that Buyer shall conduct its own independent due diligence of the Property during the Contingency Period to determine the suitability of the Property for Buyer's intended purposes and whether the Seller's Documents are acceptable to Buyer, in Buyer's sole and absolute discretion. Provided Seller has provided Seller's Documents to Buyer as contemplated above, Buyer shall be deemed to have acquired the Property subject to all information and matters referenced in Seller's 10 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn Documents whether or not Buyer has elected to review Seller's Documents. If this Agreement is terminated for any reason, Buyer shall, within five (5) business days following such termination, deliver to Seller all information, surveys, studies, documents, reports, and data obtained by Buyer relating to the Property, return to Seller all of Seller's Documents, and destroy all electronic or other copies of the Seller's Documents which cannot be returned to Seller Buyer shall thereafter continue to keep and hold all information concerning the Property in strict confidence. Buyer's obligation to keep all such information confidential shall survive the termination of this Agreement. Section 4.3 Physical Inspection. During the Contingency Period, Buyer may enter upon the Property and conduct, at its sole expense, such inspections, surveys, tests, studies and investigations as Buyer deems necessary to determine if the physical and environmental condition of any portion of the Property, including the improvements on the Property, are acceptable to Buyer, including, without limitation, a Phase I and/or Phase II Environmental Site Survey ("Investigations") The Investigations may not include intrusive physical testing (such as soil borings, water samplings, and the like), except as provided below Before performing any Investigation, Buyer shall (a) provide Seller with no less than two (2) business days' prior written notice of its intended entry onto the Property; (b) if Buyer desires to conduct invasive or destructive testing, provide a written description of same to Seller and receive written approval from Seller before conducting the invasive or destructive testing, which approval may be granted or withheld in Seller's sole discretion, and (c) with respect to any entry onto the Property, including for invasive or destructive testing, provide to Seller proof of self-insurance or proof of insurance evidencing that Buyer or its contractor has procured and paid premiums for a comprehensive general liability insurance policy written on a per occurrence and not claims made basis with minimum limits of not less than One Million Dollars and Zero Cents ($1,000,000 00) per occurrence with Two Million Dollars and Zero Cents ($2,000,000 00) aggregate, naming Seller as an additional insured, including endorsements evidencing that Seller is actually insured under the policy In performing any Investigation, Buyer shall (i) not disrupt the ongoing activities at the Property; (ii) conduct its activities in a diligent, reasonably quiet, expeditious, and safe manner and not allow any dangerous or hazardous conditions to occur on the Property; and (iii) comply with all applicable laws. Following any entry upon the Property to perform any Investigation, Buyer shall restore the Property to the condition in which it existed before Buyer's entry Buyer shall keep the Property free and clear of any mechanic's liens or materialmen's liens arising out of Buyer's entry onto the Property Seller, at any time and from time to time, may, but will not be obligated to, post on the Property and record in the Office of the County Recorder, a notice or notices of non -responsibility regarding the Investigations. Prior to the Closing, (A) Buyer shall confer with Seller prior to any meetings or discussions with any governmental agencies in order to establish an appropriate agenda and coordinate any presentations or questions, and (B) Buyer shall use reasonable efforts to schedule such meetings and discussions after consulting with Seller to ensure Seller's availability to attend such meetings or discussions. Under no circumstances shall Buyer propose or file any application requesting changes to or raise any issues with any of the existing development approvals without Seller's 11 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn prior written consent, such consent to be granted or withheld in Seller's sole discretion. Buyer shall not submit any written recommendations or reports regarding its Investigations or the Property to any governmental agencies or provide them to third parties, other than Buyer's attorneys, consultants, lenders, and prospective lenders who have a need to know directly in connection with the transaction contemplated under this Agreement, without the prior written consent of Seller unless required by applicable law or court or administrative order If Buyer submits such unauthorized reports or studies, Buyer shall indemnify, defend and hold Seller and the Property harmless from any costs, claims, damages, liabilities or expenses (including reasonable attorneys' fees) associated with or arising from any submitted written recommendations or reports not approved by Seller in writing, including any remedial action required of Seller as a result thereof. A copy of all reports prepared by or for the benefit of Buyer in connection with its Investigations ("Buyer Reports") shall be made available to Seller, at no additional cost to Seller, upon request. Buyer shall not be deemed to have made any warranty as to the accuracy, completeness, or usefulness of any Buyer Report. Buyer hereby agrees to indemnify, defend and hold the Property, Seller, and Seller's directors, officers, shareholders, employees, affiliates, members, agents, contractors, consultants, representatives, predecessors, heirs, successors, and assigns (collectively, "Seller Indemnitees") free and harmless from and against any and all losses, damages, liens, liabilities, claims, causes of action, or liabilities (including, without limitation, reasonable attorneys' fees, expert witness fees and all other costs of litigation) (collectively, "Damages") arising out of or relating to Buyer's (or its employees', consultants', contractors', agents' or representatives') entry upon, or actions with respect to, the Property, including, without limitation, (1) any loss, damage or liability arising from any liens placed upon the Property because of acts or omission to act by Buyer (or its employees, consultants, contractors, agents or representatives) in connection with Buyer's Investigations, (2) any personal injury or death or property damage caused by Buyer (or its employees, consultants, contractors, agents or representatives) while conducting its Investigations, and (3) any liability incurred by Seller based upon Buyer's breach of this Section 4.3, including liabilities arising from the submission of unauthorized recommendations or reports by Buyer The foregoing indemnity obligation shall not apply to Buyer's mere discovery of any preexisting condition on the Property or the results of such discovery, unless caused by Buyer's negligence or willful misconduct. This provision shall survive termination of this Agreement or the Closing. ARTICLE V REPRESENTATIONS AND WARRANTIES Section 5 1 Representations and Warranties of Seller Seller hereby makes the following representations and warranties to Buyer as of the Effective Date, which representations and warranties shall continue to be true and correct as of the Closing, as a condition to closing; provided, however, that to the extent any representation or warranty made by Seller is actually known by Buyer or any of Buyer's employees or agents before the Contingency Period Expiration Date to be materially untrue or inaccurate and Buyer nevertheless fails to terminate this Agreement, Buyer shall have no right under this Agreement, by reason of that particular untruth or inaccuracy, to thereafter terminate this Agreement; and provided, further, that to the extent any representation or warranty made by Seller is actually known by Buyer or any of Buyer's employees or agents, before the Closing, to be materially untrue or inaccurate and Buyer nevertheless 12 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn proceeds with that Closing, Buyer shall be deemed to have waived such representation or warranty and shall have no further rights against Seller with respect thereto (a) Seller is a California municipal water district and is organized and validly existing and in good standing under the laws of the State of California. Seller has the full right and authority to enter into this Agreement and to consummate or cause to be consummated the transaction contemplated by this Agreement. The persons signing this Agreement on behalf of Seller are authorized to do so by Seller, (b) By the Closing Date, this Agreement and all documents to be executed by Seller hereunder will have been, duly authorized, executed, and delivered by Seller, and will constitute the valid and binding obligations of Seller enforceable against it in accordance with their respective terms, and (c) The execution and delivery of this Agreement, and all other documents to be executed by Seller hereunder, will not to Seller's knowledge result in. (i) a breach or violation of (A) any governmental requirement applicable to Seller or the Property now in effect; (B) the organizational documents of Seller, (C) any judgment, order or decree of any governmental authority binding upon Seller; or (D) any agreement or instrument to which Seller is a party or by which it is bound, (ii) the acceleration of any obligation of Seller, or (iii) the creation of any lien, encumbrance, or other matter affecting title (other than the Permitted Exceptions) to the Property Section 5.2 Disclaimer of Further Representations and Warranties. Buyer acknowledges that as of the Closing Date, it will have had an adequate opportunity to inspect the Property, and all aspects thereof, and to investigate the Property's physical characteristics and conditions and all other matters related or relevant to the Property Upon the Closing, and except as otherwise expressly provided in this Agreement, Buyer shall be deemed to have waived any and all objections to the physical characteristics and conditions of the Property and all other matters related or relevant to the Property, including, without limitation. (a) The habitability, merchantability, marketability, profitability, or fitness for a particular purpose of the Property, including, without limitation, Buyer's intended use of the Property; (b) The nature, quality, or condition of the Property, including, without limitation, with respect to water conditions, soil, geological, or geotechnical conditions (including, without limitation, soil expansiveness, corrosivity, or stability or seismic, hydrological, geological, and topographical conditions and configurations, including, without limitation, any opinions or conclusions of any soils engineer(s) retained to perform geotechnical and/or soils studies or to oversee any soils engineering aspects of developing the Property), (c) The fact that all or a portion of the Property may be located on or near an earthquake fault line or in or near an earthquake or seismic hazard zone, (d) Climate, air, water rights, utilities, present and future zoning, the state of current entitlements or the ability to obtain future entitlements, soil, subsoil, grading, compaction, the square footage of the Property or the size, configuration, and location of the Property, any applicable parcel maps or any conditions or obligations imposed in connection therewith, the 13 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn purpose to which the Property is suited, drainage, the existence or effect of any governmentally regulated or protected wetlands, endangered species, flora, fauna, or other natural habitat and the effect of same upon the development of the Property (including the need to obtain any governmental permits or approvals for development of the Property based upon the existence of such wetlands, habitat or other natural conditions), (e) Any opinions or conclusions of any civil engineer retained in connection with the Property; (f) Any opinions or conclusions of any environmental engineer or consultant retained to perform environmental or hazardous materials studies or to oversee any environmental related aspects of developing the Property; (g) Zoning or land use requirements, or the availability of any land use entitlements, including, without limitation, sewer, water, or building permits for the Property; (h) The compliance of the Property or its operation with any codes, laws, rules, ordinances, or regulations of any applicable governmental authority or body, including, without limitation, compliance with any environmental protection, pollution, or land use laws, rules, regulations, orders, codes, or requirements, including, but not limited to, the Americans with Disabilities Act of 1990, California Health & Safety Codes, the Federal Water Pollution Control Act, the Federal Resource Conservation and Recovery Act, the U S Environmental Protection Agency regulations at 40 CFR, Part 261, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U S C.A. § 9601 et seq ), as the same may be further amended or replaced by any similar law, rule, or regulation, the Resource Conservation and Recovery Act of 1976, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, the Toxic Substance Control Act, and regulations promulgated under any of the foregoing; (i) on the Property; The existence of any historical, paleontological, or archeological deposits (j) Any assurance, opinion, or conclusion of the availability of any zoning, development, construction, or other land use variances, including, without limitation, any variance from side, rear, or front of lot setback requirements, and (k) Any other matter relating to the Property or to the development or operation of the Property, including, but not limited to, legal requirements, valuations, feasibility, cost, governmental permissions or entitlements, claims and obligations, licenses and other use rights and claims, any matters that would be disclosed or apparent by a survey of the Property, and the future use and operation of the Property Seller and its agents, contractors, consultants, attorneys, and representatives shall not be liable for any relief, including damages, rescission, reformation, allowance, or adjustments based on the failure of the Property, including, but not limited to, amount of acreage, square footage, and zoning condition, to conform to any specific standard or expectation or any third party documents or information. 14 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn Buyer further acknowledges that Seller shall have no obligation to undertake the construction or completion of any on -site or off -site improvements of any kind or nature Buyer further acknowledges and agrees that, except for Seller's express representations and warranties set forth in this Agreement, the Property is being purchased, conveyed, and accepted by Buyer in its present condition, "AS -IS," "WHERE -IS", and "WITH ALL FAULTS," and that Buyer accepts the Property subject to all patent and/or latent physical conditions of the Property, whether or not known or discovered. Buyer acknowledges and agrees that Seller shall have no obligations whatsoever to undertake or construct any improvements or facilities to, upon, or about the Property, or any portion thereof, or on any adjacent or other property, or to process any entitlements in any way affecting the Property, or any other property, after the Closing. Buyer has investigated and has knowledge of all operative or imposed governmental laws and regulations (including, but not limited to, zoning and environmental laws and regulations, including specifically, but without limitation, the regulations of the Environmental Protection Agency, the U S Army Corps of Engineers, the U S Fish & Wildlife Service, the California Department of Fish and Wildlife, and the California Regional Water Quality Control Board, and all applicable land use laws and regulations) to which the Property may be subject, and is acquiring the Property on the basis of its review and determination of the application and effect of such laws and regulations Buyer acknowledges that, after the Closing, it is Buyer's responsibility as the owner of the Property to comply with any such laws and regulations, including any environmental and/or biological mitigation requirements. Buyer has neither received nor relied upon any representations concerning such laws and regulations made by Seller, Seller's employees, Seller's agents, or any other person acting on behalf of Seller Any agreements, warranties, or representations not expressly contained in this Agreement shall in no way bind Seller Without limiting the generality of the foregoing, Buyer understands and agrees that it takes the Property without any representations or warranties by Seller, or by any member, official, employee, or agent of Seller, regarding the existence, use, generation, manufacture, storage, transportation, release, or disposal of Hazardous Material and/or oil wells and/or underground storage tanks and/or pipelines on, under, or about the Property, or that the Property is or may be in violation of any federal, state, or local law, ordinance or regulation relating to Hazardous Material and/or oil wells and/or underground storage tanks and/or pipelines on, under or about the Property including, without limitation, soil and ground water conditions. Buyer acknowledges and understands that it must perform its own "due diligence" with respect to all environmental matters relating to the Property, inclusive of any environmental audits or assessments, and that Buyer is not relying on any environmental audits or assessments performed by or on behalf of Seller Buyer further understands and agrees that in the event Buyer incurs any loss or liability concerning Hazardous Material and/or oil wells and/or underground storage tanks and/or pipelines and/or other conditions relative to the Property attributable to conduct or conditions occurring or existing before Buyer's acquisition of the Property, then Buyer may look to prior owners or lessees of the Property or adjacent property, but under no circumstances shall Buyer look to Seller for any liability, contribution, or indemnification regarding Hazardous Material and/or oil wells and/or underground storage tanks and/or pipelines and/or other conditions relative to the Property Buyer further understands and agrees that in the event it acquires the Property or any portion thereof pursuant to this Agreement, such acquisition will be done without any representations or warranties by Seller regarding responsibility for loss or liability incurred with respect to the use, 15 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn generation, manufacture, storage, transportation, release, or disposal of any Hazardous Material and/or oil wells and/or underground storage tanks and/or pipelines and/or other conditions relative to the Property Notwithstanding anything to the contrary in this Agreement, Seller understands and agrees that (i) a prior owner of a property containing Hazardous Material may be sued as a liable party under Environmental Law (as defined in Section 5 4(a)) for potential remediation costs as required by an applicable governmental entity, and (n) in the event that any governmental entity or a third party asserts a claim against Seller, as the prior owner of the Property, as a result of the presence of Hazardous Material under the Property, which was present on the Property before the Closing Date, but only during such time of Seller's ownership of the Property (collectively "Seller Third Party Environmental Claims"), no Seller Third Party Environmental Claims shall create or give rise in any manner to any obligation of Buyer to indemnify, defend, and hold harmless Seller from any Seller Third Party Environmental Claims Section 5 3 Release At such time as Buyer takes title to the Property and at all times thereafter, Buyer releases Seller from all liability relating to the Property, including, without limitation, any claims, losses, or damages that Buyer may have against Seller with respect to the Property Buyer expressly waives any and all rights which it may have under California Civil Code section 1542, which provides "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY " BUYER AND SELLER ACKNOWLEDGE AND AGREE THAT THE FOREGOING PROVISIONS OF SECTION 5 2 AND SECTION 5.3 HAVE BEEN FREELY BARGAINED FOR BY THE PARTIES AND CONSTITUTE A MATERIAL CONSIDERATION TO SELLER FOR THE S ; OF THE PROPERTY AND BUT FOR THIS PROVISION SELLER WOULD " THE PROPERTY TO BUYER • BUYER'S INITIAL SELLER'S INITIALS AD - The release set forth immediately above does not extend to the obligations of Seller under this Agreement or the breach thereof by Seller Section 5 4 Definitions For purposes of this Article V, the following terms shall have the following meanings (a) "Environmental Law" means any federal, state, or local statute, ordinance, rule, regulation, order, consent decree, judgment, or common-law doctrine, and provisions and conditions of permits, licenses, and other operating authorizations relating to (i) pollution or protection of the environment, including natural resources, (n) exposure of persons, including employees, to Hazardous Materials or other products, raw materials, chemicals, or other substances, (iii) protection of the public health or welfare from the effects of by-products, wastes, 16 L \ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn emissions, discharges, or releases of chemical substances from industrial or commercial activities, or (iv) regulation of the manufacture, use, or introduction into commerce of chemical substances, including, without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage, and disposal. (b) "Hazardous Material" is defined to include any chemical or hazardous or toxic substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government. The term "Hazardous Material" includes, without limitation, any material or substance which is. (i) petroleum or oil or gas or any direct or derivative product or byproduct thereof; (ii) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Sections 25115, 25117, or 25122 7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (iii) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6 8 (Carpenter - Presley -Tanner Hazardous Substance Account Act), (iv) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6 95 (Hazardous Materials Release Response Plans and Inventory), (v) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6 7 (Underground Storage of Hazardous Substances), (vi) "used oil" as defined under Section 25250 1 of the California Health and Safety Code, (vii) asbestos, (viii) listed under Chapter 11 of Division 4.5 of Title 22 of the California Code of Regulations or defined as hazardous or extremely hazardous pursuant to Chapter 10 of Division 4 5 of Title 22 of the California Code of Regulations, (ix) defined as waste or a hazardous substance pursuant to the Porter -Cologne Act, Section 13050 of the California Water Code, (x) designated as a "toxic pollutant" pursuant to the Federal Water Pollution Control Act, 33 U S C § 1317, (xi) defined as a "hazardous waste" pursuant to the Federal Resource Conservation and Recovery Act, 42 U.S C § 6901 et seq , (xii) defined as a "hazardous substance" pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U S C § 9601 et seq , (xiii) defined as "Hazardous Material" pursuant to the Hazardous Materials Transportation Act, 49 U S C § 5101 et seq , (xiv) defined as such or regulated by any "Superfund" or "Superlien" law, or any other federal, state or local law, statute, ordinance, code, rule, regulation, order, or decree regulating, relating to, or imposing liability or standards of conduct concerning Hazardous Materials and/or oil wells and/or underground storage tanks and/or pipelines, as now, or at any time hereafter, in effect; and/or (xv) substances known by the State of California to cause cancer and/or reproductive toxicity Section 5.5 Representations and Warranties of Buyer Buyer hereby makes the following representations and warranties to Seller as of the Effective Date, which representations and warranties shall continue to be true and correct as of the Closing, as a condition to closing: (a) Buyer is a California municipality and is organized and validly existing and in good standing under the laws of the State of California. Buyer has the full right and authority to enter into this Agreement and to consummate or cause to be consummated the transaction contemplated by this Agreement. The person signing this Agreement on behalf of Buyer is authorized to do so, 17 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn (b) The execution and delivery of this Agreement does not, and the performance by Buyer of its obligations under this Agreement will not, to Buyer's knowledge, conflict with any provision of any law or regulation to which Buyer is subject or conflict with or result in a material breach of or constitute a material default under any of the terms, conditions, or provisions of any enforceable agreement or instrument to which Buyer is a party, or result in the creation or imposition of any lien on any of its assets or property which could materially and adversely affect the ability of Buyer to discharge its obligations hereunder and complete the transactions contemplated by this Agreement; and (c) Buyer is a sophisticated investor and Buyer's offer and decision to purchase the Property is and will be based upon its own independent expert evaluation of the Property and any other matters deemed relevant by Buyer and its agents and advisors. Buyer has not relied upon any oral or written information from Seller, or any of Seller's employees, affiliates, brokers, agents, legal counselors, or other representatives. Buyer further acknowledges that except for express representations and warranties contained in this Agreement, no employee, agent, broker, legal counsel, or other representative of Seller has been authorized to make, and that Buyer has not relied upon, any statements or representations. Section 5 6 Buyer's Investigations. By entering into this Agreement, and except for Seller's express representations and warranties set forth in this Agreement, Buyer has agreed to perform a thorough and its own independent investigation and evaluation of the Property and all other aspects of the transactions contemplated by this Agreement, and Buyer agrees that Buyer shall be charged with knowledge of all information which is acquired by Buyer as a result of such an investigation and evaluation or which would or should have been acquired by Buyer as a result of such investigation and evaluation. Before the Contingency Period Expiration Date, and except for Seller's express representations and warranties set forth in this Agreement, Buyer will have determined solely in reliance upon Buyer's independent investigation and evaluation of the Property, including all soil and geological conditions of the Property, that the physical condition of the Property is either acceptable or is not acceptable to Buyer and whether all present and future entitlements, zoning regulations, and other governmental requirements, site and physical conditions, title matters, and all other matters affecting the use, occupancy, value, and condition of the Property are acceptable or not acceptable to Buyer Except for Seller's express representations and warranties set forth in this Agreement, Buyer specifically acknowledges that Buyer is not relying on Seller to indicate the relative importance or materiality of any of the instruments, records, documents, or other information made available to Buyer for review, that Buyer shall make its own determination as to the level of scrutiny it applies to such instruments, records, and documents made available to Buyer, and that Buyer will act solely in reliance upon its own investigation and evaluation of such matters. Section 5 7 Buyer's Indemnity In addition to and without limiting Buyer's obligations set forth above, Buyer shall indemnify, defend, and hold harmless the Seller Indemnitees (including Seller) from and against any Damages arising out of or relating to events concerning the Property occurring on and after the Closing Date, including, without limitation, any liabilities relating to Hazardous Material, the presence of which first occurred on the Property on or after the Closing Date, and liabilities arising from or relating to any construction, marketing, sale, or use of any commercial or retail use of the Property, including, without limitation, the transaction contemplated herein or other improvements constructed on the Property (collectively, 18 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn "Liabilities"), including, without limitation bodily injury and/or property damage claims from third parties for construction defects, errors and omissions by Buyer and/or its contractors or subcontractors, and/or its professional soils, civil, geological, surveying, and engineering firms, soils -related issues, including, without limitation, land subsidence, slope failures, sinking, slippage, drainage, mudslide, landslide, over -watering, floods, changes to underground water resources or aquifers, or damages as a result of earthquakes or other acts of God, and/or any environmental health issues, provided, however, that the Liabilities indemnified and Buyer's indemnification hereunder shall not apply to any liability, cause of action, loss, cost, expense, claim, or damages arising solely from the negligence or willful misconduct of Seller, its agents, employees or contractors. Further, as set forth in Section 5.2, no Seller Third Party Environmental Claims shall create or give rise in any manner to any obligation of Buyer to indemnify, defend, and hold harmless Seller from any Seller Third Party Environmental Claims. The provisions of this Section 5 7 shall survive the Closing. Section 5 8 Procedure for Claims. In the case of any claim asserted by a third party against a party entitled to indemnification under this Agreement ("Indemnified Party"), notice shall be given by the Indemnified Party to the Party required to provide indemnification ("Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnified Party shall permit the Indemnifying Party (at the expense of such Indemnifying Party) to assume the defense of any claim or any litigation resulting therefrom, provided, that (i) the Indemnifying Party acknowledges its obligation to indemnify the Indemnified Party in writing, (ii) the counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to the Indemnified Party, and (iii) the omission by any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement, except to the extent that such omission results in a failure of actual notice to the Indemnifying Party and such Indemnifying Party is materially prejudiced as a result of such failure to give notice Except with the prior written consent of the Indemnified Party, no Indemnifying Party, in the defense of any such claim or litigation, shall consent to entry of any judgment or enter into any settlement that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation. In the event that the Indemnified Party shall in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by the Indemnifying Party might be expected to affect adversely the Indemnified Party's tax liability or that the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect of such claim or any litigation relating thereto, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations, or litigation relating to any such claim at the sole cost of the Indemnifying Party In the event that the Indemnifying Party does not accept the defense of any matter as above provided, the Indemnified Party shall have the full right to defend, at the Indemnifying Party's cost, against any such claim or demand and shall be entitled to settle or agree to pay in full such claim or demand. The Indemnifying Party and the Indemnified Party shall cooperate in the defense of any claim or litigation subject to this Section 5 8 The provisions of this Section 5 8 shall survive the Closing. 19 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn ARTICLE VI DEFAULT Section 6 1 Default. A Party shall be deemed to be in default under this Agreement if it fails to meet, comply with, or perform any material covenant, agreement, or obligation on its part required under this Agreement. Section 6.2 Default by Buyer If the sale of the Property as contemplated hereunder is not consummated due to Buyer's default hereunder, Seller shall be entitled, as its sole remedy, to terminate this Agreement and receive liquidated damages pursuant to Section 1.5 hereof plus any attorneys' fees to which it is entitled under Section 9 16 (subject to any indemnification obligations which expressly survive termination of this Agreement) Section 6.3 Default by Seller If the sale of the Property as contemplated hereunder is not consummated due to Seller's default hereunder, Buyer's sole remedy shall be to either (a) terminate this Agreement and receive a refund of the Deposit and all interest accrued thereon, or (b) seek specific performance of Seller's obligations under this Agreement plus any attorneys' fees to which it is entitled under Section 9 16 (subject to any indemnification obligations which expressly survive termination of this Agreement) ARTICLE VII CONDEMNATION Section 7 1 Definition of Terms. The following terms used in this Article VII shall have the meanings ascribed to them below. (a) "Condemnation" or "Condemned" shall mean the exercise of, or intent to exercise, the power of eminent domain expressed in writing, or the filing of any action or proceeding for such purpose by any person, entity, body, agency or authority having the right or power of eminent domain (the "Condemning Authority" herein), and shall include a voluntary sale by Seller to any such Condemning Authority, either under the threat of condemnation or while condemnation proceedings are pending, and the Condemnation shall be deemed to occur upon the actual physical taking of possession pursuant to the exercise of said power of eminent domain. (b) "Minor Taking" shall mean that only a portion of the Property is Condemned and that such taking does not materially adversely affect Buyer's plan for the Property, all as determined by Buyer in its sole and absolute discretion. In the event of a Minor Taking (as determined in Buyer's sole and absolute discretion), this Agreement shall continue in full force and effect as to the remainder of the Property, the Condemnation proceeds shall be paid to Seller and the Purchase Price shall be reduced by an amount equal to such proceeds. Section 7.2 Taking. If there is a taking before the Closing and only a portion of the Property is Condemned, but Buyer determines in its sole and absolute discretion that such taking is not a Minor Taking, Buyer shall have the right to terminate this Agreement by written notice to Seller for a period of fifteen (15) business days following receipt of written notice from Seller of such taking and upon the date in which Buyer provides such written notice of termination, this Agreement and Escrow shall terminate and neither Party shall have any further rights or obligations hereunder (except for any indemnity obligations of Seller and Buyer pursuant to the 20 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn other provisions of this Agreement), the Deposit and all interest thereon less escrow cancellation fees shall be returned to Buyer, and each Party shall bear its own costs incurred hereunder Section 7.3 Distribution of Award. If the Property or any portion thereof is condemned (other than through a Minor Taking) before the Closing and Buyer does not terminate this Agreement, the award from the Condemning Authority up to the amount of the Purchase Price (adjusted for prorations and closing costs as set forth herein) shall be paid to Seller, the Purchase Price shall be reduced by the amount so paid to Seller and Buyer shall acquire the remaining portions of the Property at the Closing as set forth herein. If all of the Property is taken through Condemnation before the Closing, this Agreement shall terminate, the Deposit and accrued interest less escrow cancellation fees shall be immediately returned to Buyer and neither Party shall have any further obligation hereunder (except for only indemnity obligations of Seller and Buyer pursuant to the other provisions of this Agreement) ARTICLE VIII BROKERAGE COMMISSIONS Section 8 1 Brokers Unless otherwise stated herein, Buyer and Seller each represents to the other that it has not employed, dealt with or incurred any obligation to any broker, agent or finder in connection with the Property, and that it has not incurred any obligation to pay any other real estate brokerage or other commission or fee in connection with the conveyance of the Property to Buyer Each Party agrees that if any person or entity makes a claim for brokerage commissions or finder's fees related to the sale of the Property by Seller to Buyer, and such claim is made by, through or on account of any acts or alleged acts of said Party or its representatives, that Party will protect, indemnify, defend, and hold harmless the other Party from and against any and all Damages in connection therewith. The provisions of this Section 8 1 shall survive Closing or any termination of this Agreement. ARTICLE IX MISCELLANEOUS Section 9 1 Incorporation of Recitals and Exhibits. The Recitals set forth above and all exhibits attached to this Agreement are incorporated herein by reference Section 9.2 Successors and Assigns. The terms and provisions of this Agreement are to apply to and bind the heirs, executors, administrators, successors, and assigns of the Parties Buyer may assign its rights under this Agreement without the written consent of Seller Section 9.3 Notices. Any notice pursuant to this Agreement shall be given in writing by• (a) personal delivery; (b) reputable overnight delivery service with proof of delivery; (c) United States Mail, postage prepaid, registered or certified mail, return receipt requested, or (d) electronic mail transmission, sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as a Party may designate by written notice sent in accordance with this Section. Notices sent in accordance with this Section shall be deemed to have been given upon receipt or refusal to accept delivery, or, in the case of electronic mail transmission, as of the date of the electronic mail transmission provided that an original of such transmission is 21 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn also sent to the intended addressee by means described in clauses (a), (b) or (c) above. Unless changed, the addresses for notices given pursuant to this Agreement are as follows If to Seller with a copy to If to Buyer San Bernardino Valley Municipal Water District Attn. Heather Dyer 380 East Vanderbilt Way San Bernardino, California 92408 Telephone No (909) 387-9200 E-Mail heatherd@sbvmwd.com Varner & Brandt LLP Attn. Scott R. Heil 3750 University Avenue, 6th Floor Riverside, California 92501 Telephone No (951) 274-7777 E-mail scott.heil@varnerbrandt.com City of Redlands Attn. City Clerk 35 Cajon Street, Suite 4 Redlands, California 92373 Telephone No (909) 798-7531 E-mail jdonaldson@cityofredlands.org If to Escrow Holder First American Title Insurance Company Attn. Kelly Simoneau, Senior Commercial Escrow Officer 3281 East Guasti Road, Suite 440 Ontario, California 91761 Telephone No (909) 510-6200 E-Mail ksimoneau@firstam.com Section 9 4 Entire Agreement. This Agreement, including the exhibits and schedules hereto, contains the entire agreement between the Parties pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the Parties pertaining to such subject matter, other than any confidentiality agreement executed in connection with the Property Section 9.5 Modifications. This Agreement cannot be changed orally, and no executory agreement shall be effective to waive, change, modify, or discharge it in whole or in part unless such executory agreement is in writing and is signed by the Parties against whom enforcement of any waiver, change, modification, or discharge is sought. Section 9 6 Further Assurances Each Party agrees that it will execute and deliver such other documents and take such other action, whether before or after the Closing, as may be reasonably requested by the other Party to consummate the transaction contemplated by this Agreement. The provisions of this Section 9 6 shall survive the Closing. 22 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn Section 9 7 Counterparts This Agreement may be executed in counterparts, all such executed counterparts shall constitute the same agreement, and the signature of any Party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. Section 9 8 Electronic Signatures In order to expedite the transaction contemplated by this Agreement, signatures may be delivered by electronic means. Seller and Buyer hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature. Documents which are to be recorded with the San Bernardino County Recorder, however, must bear original signatures. Section 9.9 Severability If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect; provided that the invalidity or unenforceability of such provision does not materially adversely affect the benefits accruing to any Party Section 9 10 Applicable Law This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding any choice of laws provisions. The exclusive venue for any legal action arising out of this Agreement shall be in San Bernardino County, California. Buyer and Seller agree that the provisions of this Section 9 10 shall survive the Closing or any termination of this Agreement. Section 9 11 No Third Party Beneficiary The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Buyer only and are not for the benefit of any third party; and, accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. Section 9 12 Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection of this Agreement. Section 9 13 Construction. The Parties acknowledge that the Parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to take effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any exhibits. Section 9 14 Recordation. This Agreement may not be recorded by any Party without the prior written consent of the other Party The provisions of this Section 9 14 shall survive the Closing or any termination of this Agreement. Section 9 15 Date of Performance If the date on which any performance required hereunder is other than a business day, then such performance shall be required as of the next following business day Section 9 16 Attorneys' Fees. If either Party fails to perform any of its obligations under this Agreement or if any dispute arises between the Parties concerning the meaning or interpretation of any provision of this Agreement, then the defaulting Party or the Party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred 23 L:\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn by the other Party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees, including fees for a Party's use of in-house counsel, and disbursements. Any such attorneys' fees and other expenses incurred by either Party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment. Section 9 17 Time of Essence. Time is of the essence regarding each and every term, condition, obligation, and provision of this Agreement. [Signature Page Follows] 24 L.\ca\djm\Agreements\SBVMWD Purchase and Sale Agreement -Sport Park.docx.jn IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date BUYER CITY OF REDLANDS, a California municipality By rD Paul T Barich, Mayor ATTEST By nne Donaldson, City Clerk SELLER SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, a California municipal water district By Heather P Dyer, C 0/General Manager [Signature Page for Purchase and Sale Agreement] 25 ACKNOWLEDGED Escrow Holder executes this Agreement below for the purpose of acknowledging that it agrees to be bound by the provisions hereof. ESCROW HOLDER. FIRST AMERICAN TITLE INSURANCE COMPANY By• Name Its [Signature Page for Purchase and Sale Agreement] 26 EXHIBIT "A" LEGAL DESCRIPTION [To Be Inserted by Escrow Cerny] RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO• First American Title Insurance Company Attn. Kelly Simoneau 3281 East Guasti Road, Suite 440 Ontario, California 91761 MAIL TAX STATEMENTS TO• City of Redlands Attn. Charles M. Duggan, Jr., City Manager 35 Cajon Street, Suite 200 Redlands, California 92373 APN 0168-091-07 SPACE ABOVE LINE FOR RECORDER'S USE NO FEE PER GOVERNMENT CODE SECTIONS 6103, 27383 EXHIBIT "B" GRANT DEED The undersigned Grantor(s) declare(s): Documentary Transfer Tax $ , City Transfer Tax $ [ ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale, [ ] unincorporated area, [ X ] City of Redlands EXEMPT FROM TRANSFER TAXES PER REVENUE & TAXATION CODE SECTION 11922 FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, a California municipal water district organized and existing under the Municipal Water District Law of 1911 (Water Code § 71000 et seq ), does hereby GRANT to CITY OF REDLANDS, a California municipality, the following described real property located in the County of San Bernardino, State of California. See Exhibit "1" SAID PROPERTY IS CONVEYED SUBJECT TO all liens, encumbrances, easements, covenants, conditions and restrictions of record, and all matters that would be disclosed or apparent by a survey and/or an inspection of the Property Dated. , 2022. SAN BERNARDINO VALLEY MUNICIPAL WATER DISTRICT [Exhibit purposes only not for execution] By. Heather P Dyer CEO/General Manager EXHIBIT "1" TO GRANT DEED LEGAL DESCRIPTION [To Be Inserted by Escrow Company' ACKNOWLEDGMENT 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 ) COUNTY OF SAN BERNARDINO ) On before me, , Notary Public, personally appeared HEATHER P DYER, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person 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. [Exhibit purposes only• not for execution] Notary Public (Seal)