{CW116567.4} Purchase & Sale Agreement
PURCHASE AND SALE AGREEMENT FOR REAL PROPERTY
WITH ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT FOR REAL PROPERTY
(“Agreement”) is entered by and between Eastern Marney, LLC, a California Limited Liability Company (“Seller”) and the City of Patterson, a California municipal corporation (“Buyer” or “City”). Seller and Buyer may be referred to herein as a “Party” or collectively as the “Parties”.
There are no other parties to this Agreement.
RECITALS
A. Seller owns a parcel of real property located at 33 South Del Puerto Avenue located in the City of Patterson, California (APN: 131-015-005) (the “Property”). The Property is further described in the legal description attached hereto as Exhibit A.
B. City currently leases the Property from Seller for City’s police department operations.
C. City requires ownership of the Property to obtain a permanent location for its police department or such other municipal offices that City may require, making the Property a public use for which City has the authority to exercise the power of eminent domain. City is compelled to acquire the Property, and Grantor is compelled to sell the Property under threat of eminent domain. Both Seller and City recognize the expense, time, effort, and risk to both Parties in commencing condemnation proceedings for City to acquire the Property. The Parties acknowledge that the agreed-upon purchase price for the Property is based on the fair market value of the Property.
D. Seller therefore desires to sell the Property to City, subject to the terms and conditions of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. Sale of Property. Seller agrees to convey the Property to Buyer, and Buyer agrees to purchase the Property from Seller, subject to the terms and conditions set forth herein. The Property conveyance includes any and all of Seller’s right, title, and interest in any and all rights and interests appurtenant to the Property, including but not limited to, all water rights, mineral rights, easements, and other property rights related exclusively to the Property. {CW116567.4} Purchase & Sale Agreement
2. Effective Date; City Council Approval. The “Effective Date” of this Agreement will be the date on which both Parties have executed this Agreement and the Patterson City Council (“City Council”) has approved this Agreement. This Agreement will not be effective unless the City Council by resolution has approved this Agreement and has authorized the City Manager to execute this Agreement.
3. Purchase Price. The purchase price for the Property will be Seven Hundred Fifty Thousand Dollars ($750,000.00) (“Purchase Price”).
4. Existing Lease. The Parties acknowledge that Buyer currently possesses the Property under an existing lease. All terms and conditions of the lease will continue to apply until Closing. At the time of Closing (defined in Section 5 below), the lease will terminate and no longer have any force or effect, except for such terms that are intended to survive termination.
5. Escrow and Closing.
(a) Escrow Agent. This transaction will be completed through an escrow agent.
Promptly after the Effective Date, Seller and Buyer will open an escrow with _________________________________ to carry out the terms of this Agreement (the “Escrow Agent”), whose address is as follows:
Escrow Agent / Title Company:
Address:
Primary Contact:
The Parties will promptly deposit all funds and documents as required by Escrow Agent to complete this transaction, including fully executed counterpart originals of this Agreement. The Parties agree to be bound by Escrow Agent’s standard forms or general provisions. This Agreement will control in the event of any inconsistency between this Agreement and Escrow Agent’s standard forms, general provisions, or any other documentation required by Escrow Agent.
(b) Deposit. Within five (5) days after the Effective Date, Buyer will deposit Twenty Two Thousand Five Hundred Dollars ($22,500.00) with Escrow Agent (“Deposit”). The Deposit will become non-refundable if Buyer elects to terminate this Agreement after expiration of the Due Diligence Period (defined in Section 8 below). Upon Closing, the Escrow Deposit will be credited toward the Purchase Price.
(c) Closing. Transfer of the Property will occur twenty-one (21) days from the Effective Date (the “Closing”). Escrow Agent may cause the Closing to occur on an earlier date with the consent of both Seller and Buyer.
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(d) Conditions Precedent to Closing. The following conditions must be met in order for Closing to occur (the “Conditions Precedent”): (i) the Property must be in substantially the same condition at Closing as on the Effective Date; (ii) all liens, encumbrances, and other charges against the Property not assumed by Buyer must be paid and discharged by Seller prior to Closing; (iii) no uncured material, adverse change to the title to the Property will have occurred since the Effective Date; (iv) Seller will deliver exclusive possession of the Property to Buyer; and (v) Buyer and Seller will have complied with and otherwise performed their respective obligations set forth in this Agreement. Buyer and Seller may, by mutual agreement, extend the Closing as long as necessary to satisfy or waive the applicable Conditions Precedent and proceed with Closing.
(e) Seller’s Delivery Obligations. Prior to Closing, Seller will deliver to Escrow Agent the following: (1) a Grant Deed in the form provided by Escrow Agent (“Deed”), subject to any minor modifications satisfactory to the City Attorney and Seller; (2) All documents, releases and cancellations as necessary in order to discharge all existing liens and encumbrances of record against the Property in accordance with this Agreement; and (3) All other documents and funds as required by Escrow Agent to complete this transaction.
(f) Buyer’s Delivery Obligations. Prior to Closing, Buyer will deliver to Escrow Agent the following: (1) the balance of the Purchase Price; (2) All other documents and funds as required by Escrow Agent to complete this transaction. After Closing, City will provide the Stanislaus County Assessor and Auditor a copy of the Deed vesting title of the Property in City, and will request cancellation of property taxes on the Property from and after the date of apportionment, in accordance with Revenue and Taxation Code section 5082.1. (g) Escrow Agent Duties. At Closing, Escrow Agent will effect the transfer of Property by doing the following: (1) Recording the Deed; (2) Providing a closing statement setting forth the Purchase Price, the allocation of Closing Costs, and all prorations and adjustments as provided in this Agreement; (3) Paying all Closing Costs (defined in Section 6 below); (4) Delivering the Title Policy (defined in Section 7 below) to Buyer; (5) Delivering the Purchase Price to Seller, plus or minus any closing adjustments and prorations; (6) Recording all documents as may be necessary to clear title in accordance with the terms of this Agreement.
6. Closing Costs and Prorations.
(a) Closing Costs. The following costs related to Closing (“Closing Costs”) will be paid as follows: (i) the Parties will split equally all fees and charges of Escrow Agent; (ii) Buyer will pay all documentary and other transfer taxes; (iii) Buyer will pay for the cost of the Title Report (defined in Section 7 below); (iv) Buyer will pay for any Title Policy (defined in Section 7 below) or insurance policy purchased for the Property; (v) Buyer will pay all recording {CW116567.4} Purchase & Sale Agreement
costs associated with completing the transaction. Buyer and Seller will each pay for their own respective legal, accounting and other consultant fees, charges and costs incurred related to this Agreement.
(b) Prorations and Adjustments. Any ad valorem taxes, general and special taxes, and assessments on the Property will be prorated as of the Closing date. All supplemental taxes (regardless of whether a bill for such taxes is received after the Closing by Buyer or Seller), future assessments, special taxes or encumbrances levied on the Property after the Closing will be paid by Buyer.
7. Title to the Property.
(a) Title Report. Within five (5) business days after the opening of Escrow, Escrow Agent, at Buyer’s sole cost and expense, will deliver to Seller and Buyer a preliminary title report for the Property, together with legible copies of all documents referenced therein as exceptions to title (the “Title Report”). The Title Report will be issued by Escrow Agent and dated no earlier than thirty (30) days prior to the Execution Date. (b) Permitted Exceptions. At Closing, Seller will convey fee title to the Property to Buyer free and clear of all liens and encumbrances, excepting only the exceptions to title set forth in the Title Report which have been approved by Buyer (collectively, the “Permitted Exceptions”).
(c) Objections by Buyer. Buyer will notify Seller in writing within ten (10) days after receipt of the Title Report of Buyer's disapproval of any exception contained therein (“Buyer Objection Notice”). Buyer’s failure to timely deliver to Seller the Buyer Objection Notice will be deemed to constitute Buyer’s approval of the Title Report and all liens and encumbrances contained therein. Seller will have five (5) days after receipt of the Buyer Objection Notice to advise Buyer of any disapproved exceptions which will not be removed by Seller prior to the Closing (“Seller Response Notice”). If Seller indicates that it will not correct any of the disapproved exceptions, within seven (7) days of receipt of the Seller Response Notice, Buyer may elect to: (i) terminate this Agreement without liability on the part of either Party and receive a full refund of the Purchase Price, or (ii) consummate the purchase of the Property subject to such exceptions without any liability on Seller's part relative to the title to the Property. (d) Title Policy. At Closing, Escrow Agent will issue to Buyer, at Buyer’s sole cost and expense, a title insurance policy as approved by Buyer, showing title to the Property vested in Buyer, and containing no exceptions to title other than the Permitted Exceptions (the “Title Policy”).
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8. Inspection of the Property.
(a) Due Diligence Period. If Buyer, in its sole discretion, for any reason or no reason at all, decides not to proceed with Closing, Buyer will have the right at any time within forty-five (45) days after the Effective Date to terminate this Agreement by providing written notice to Seller (“Due Diligence Period”). Upon such termination, the Purchase Price (including the Deposit) will be returned to Buyer and Buyer will be responsible for any and all outstanding Escrow costs or any other costs incurred as a result of entering into this Agreement. (b) Tests. Buyer and Buyer’s authorized agents, contractors, employees and designees (“Buyer’s Agents”) will have the right during the Due Diligence Period to go upon the Property for the purpose of making such surveys, soil, engineering, geological, environmental and other tests, inspections and measurements (the “Tests”), provided they are done without cost to Seller and such activities do not unreasonably interfere with Seller’s operations at the Property.
Buyer will give reasonable written, telephonic, or email advance notice to Seller of any Tests that Buyer or Buyer’s agents will perform. The notice will specify the nature of the Tests to be performed, the approximate date and time the Tests will be performed, and the person or entity performing the Tests. Buyer will repair any damage to the Property caused by Buyer’s inspection activities.
(c) Property Documents. During the Due Diligence Period, Seller will make available to Buyer for Buyer’s inspection, within five (5) days after Buyer’s written request, all documents and information in Seller’s possession or control pertaining to the Property, including but not limited to, any and all leases, liens, tentative and final maps, surveys, plats, title reports, soil reports, assessment or property tax documentation, environmental studies, entitlement documents, or land or building improvements made during Seller’s time on the Property (collectively the “Property Documents”). Seller will not be obligated to disclose to Buyer any appraisal or opinions of the value of the Property, any of Seller’s internal financial analyses, or materials relating to Seller’s cost to acquire the Property. Buyer acknowledges that the Property Documents are furnished to Buyer solely as a courtesy and Seller is not responsible for verifying the accuracy of any statements or other information contained in those documents. Inspection of the Property Documents will be performed at a location agreeable to Seller and Buyer. Seller will retain and collect all originals or copies of the Property Documents.
9. Representations and Warranties.
(a) Seller Representations. The following representations are made as to the best of Seller’s knowledge. Buyer is advised to conduct appropriate inspections as to the condition of the Property. Seller makes the following representations and warranties:
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(i) Seller has the right, power and authority to enter into this Agreement and sell the Property in accordance with these terms; each of the persons executing this Agreement on behalf of Seller is authorized to do so; and this Agreement constitutes a valid and legally binding obligation of the Seller, enforceable in accordance with its terms. (ii) Buyer is advised that this transaction constitutes an “AS-IS” sale of the Property in its current condition and does not include any warranty as to the suitability of the Property for Buyer’s intended use.
(iii) Seller has good and marketable, fee simple title to the Property, free and clear of any and all liens, encumbrances or other restrictions, whether existing of record or otherwise, other than the Permitted Exceptions. Seller has no actual knowledge of any unrecorded or undisclosed legal or equitable interest in the Property owned or claimed by anyone other than Seller.
(iv) During Seller’s ownership, no contracts have been granted to others to purchase or to lease any interest in the Property or any part thereof or which will survive Closing or otherwise impose an obligation on Buyer, and Seller otherwise has the exclusive right of possession to the Property.
(v) Seller has not filed, or not been the subject of any bankruptcy or insolvency proceeding which affect Seller’s ability to convey the Property to Buyer. (vi) Seller has no actual knowledge of any violation of governmental laws, regulations or orders relating to the Property.
(vii) There are no Hazardous Materials in, on, under or affecting the Property. For purposes of this Agreement, the term “Hazardous Materials” will mean any toxic or hazardous materials or any other substance which constitutes, or is regulated as, a hazardous, extremely hazardous, toxic, extremely toxic or similarly dangerous material, substance or waste under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.A. § 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.A. § 6901 et seq., or the California Health & Safety Code, Division 20. (viii) The representations and warranties of Seller set forth in this Agreement and the materials delivered by Seller to Buyer do not contain any untrue statements of material fact. Seller has not knowingly omitted any material fact that would thereby cause its representations and warranties to be misleading.
(b) Buyer’s Representations. The following representations are made as to the best of Buyer’s knowledge. Buyer makes the following representations and warranties:
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(i) Buyer has the right, power and authority to enter into this Agreement and to purchase the Property in accordance with the expressed terms and conditions hereof. (ii) Each of the persons executing this Agreement on behalf of Buyer is authorized to do so.
(iii) This Agreement constitutes a valid and legally binding obligation of Buyer, enforceable in accordance with its terms.
The above representations and warranties are made by each Party with the knowledge and expectation that the other Party is placing complete reliance thereon, and such warranties will survive Closing. Each Party will not cause or permit any action to be taken which, to the best of that Party’s knowledge, will cause any of its representations or warranties to be untrue in any material respects upon Closing. Each Party agrees to indemnify, defend and hold the other Party harmless from all liabilities, claims, losses, damages, costs and expenses (including reasonable attorneys' fees and costs) in connection with a breach of these representations and warranties. This indemnification obligation will survive the Closing.
10. Default and Remedies. If, prior to Closing, either Party is in default of its covenants or obligations under this Agreement, and such defaulting Party fails to cure such default within ten (10) days after receipt of written notice of the default, the non-defaulting Party may elect to terminate this Agreement by sending written notice of termination to the defaulting Party.
If the Agreement is terminated due to default, the defaulting Party will be liable for all Escrow costs. If Buyer fails to complete this purchase after conclusion of the Due Diligence Period, then Seller may retain the Deposit amount and Buyer will have no other remedies against Seller.
11. Survival. Any obligations, representations and warranties contained in this Agreement that are in nature and effect intended to last after Closing will survive the Closing and remain binding and for the benefit of the Parties until fully performed (collectively, the “Survival Obligations”). Upon Closing, neither Party will have any further obligations under the Agreement except for the Survival Obligations.
12. Notices. Any notice or communication required hereunder between Buyer and Seller must be in writing, and may be given either personally, by registered or certified mail, or by Federal Express, UPS or other similar couriers providing overnight delivery, or by email. If personally delivered, a notice will be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication will be deemed to have been received on the first to occur of (a) actual receipt by any of the addressees specified below, or (b) three (3) days after a registered or certified letter containing such notice, {CW116567.4} Purchase & Sale Agreement
properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication will be deemed to have been received on the date delivered as shown on a receipt issued by the courier. If given by email, such notice or communication will be deemed to have been received based on the date delivered as shown on the sent email. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address to which such notice or communication will be given. Notices or communications will be given to the Parties at their addresses set forth below:
If to Buyer: City of Patterson
1 Plaza Circle
Patterson, CA 95363
Attn: City Manager
Email: [email protected]
with copy to: White Brenner LLP
1414 K Street, 3rd Floor
Sacramento, CA 95814
Attn: Nubia I. Goldstein
Email: [email protected]
If to Seller: Eastern Marney, LLC
Address
Email
If to Escrow Agent: Name
Address
Email
13. General Provisions.
(a) Recitals. The Recitals set forth above and hereby incorporated by this reference and part of this Agreement. In the event of any conflict between the recitals and Sections 1 through 13, Sections 1 through 13 will control.
(b) Exhibits. All attached Exhibits are hereby incorporated by this reference and made part of this Agreement.
(c) Amendment. No amendments to this Agreement will be effective unless such amendment is made in writing, signed by both Parties. {CW116567.4} Purchase & Sale Agreement
(d) Waiver. Waiver by any Party of a breach of any provision of this Agreement will be in writing and will not operate or be construed as a waiver of any other or subsequent breach hereof, unless specifically stated in writing.
(e) Assignment. This Agreement may not be assigned by Buyer without Seller’s written consent, which may be withheld, conditioned, or delayed in Seller’s sole discretion.
(f) Counterparts. This Agreement may be executed simultaneously and in several identical counterparts, each of which will be deemed an original, but which together will constitute one and the same instrument.
(g) Time is of the Essence. Time is of the essence with respect to the payments and undertakings required of the Parties.
(h) Entire Agreement. This Agreement supersedes any prior agreements, negotiations, and communications, oral or written, and contains the entire agreement between Buyer and Seller as to the subject matter hereof.
(i) Law and Venue. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of California, and any action brought to interpret or enforce this Agreement will be in the County of Stanislaus. (j) Calendar Days. Unless otherwise specified, all “days” referred to in this Agreement are calendar days.
(k) Attorney’s Fees. In the event any legal action or demand for arbitration (if applicable) is filed in relation to this Agreement, the unsuccessful Party in that proceeding will be liable to the successful Party for reasonable attorney’s fees. (l) Further Acts. Parties agree that they will cooperate in good faith to accomplish the objectives of this Agreement and to that end, agree to execute and deliver such other instruments or documents as may be necessary and convenient to fulfill the purposes and intentions of this Agreement.
(m) Joint Preparation. All Parties to this Agreement have negotiated it at length and have had the opportunity to consult with and be represented by their own competent counsel.
Each provision of this Agreement will be construed as though all Parties participated equally in the drafting of the same. Consequently, the Parties acknowledge and agree that any rule of construction that a document is to be construed against the drafting party will not be applicable to this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the dates set forth below.
SELLER:
Eastern Marney, LLC,
a California limited liability company
By: __________________________
Print: __________________________
Title: __________________________
Date: __________________________
BUYER:
City of Patterson,
a California municipal corporation
By: ____________________________
Ken Irwin, City Manager
Date: __________________________
ATTEST:
By: ____________________________
Aracely Alegre, City Clerk
Date: __________________________
APPROVED AS TO FORM:
By: ________________________________
Nubia I. Goldstein, City Attorney
ACCEPTANCE BY ESCROW AGENT:
___________________________ hereby acknowledges that it has received originally executed counterparts or a fully executed original of the foregoing Purchase and Sale Agreement of Real Property With Escrow Instructions and agrees to act as Escrow Agent thereunder and to be bound by and perform the terms thereof as such terms apply to Escrow Agent. [NAME OF ESCROW COMPANY]
By:
Name:
Its: Authorized Agent
Date:
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EXHIBIT A
Legal Description of Property