Exhibit B - Staff Report — Rialto City Council, April 27, 2024

Council Chambers
150 S. Palm Ave.

Rialto, CA 92376
City of Rialto
Legislation Details (With Text)
File #: Version: 116-607 Name: TAB 7
Status:Type: Resolution Agenda Ready
File created: In control:8/23/2016 City Council
On agenda: Final action:9/13/2016
Title: Request City Council to Approve: 1) a Purchase and Sale Agreement between the County of San Bernardino and the City of Rialto, 2) a Purchase and Sale Agreement by and between the City of Rialto and Arrow United Investment LLC, and 3) Adopt Budget Resolution No. 7002 appropriating funds in the amount of $4,646,000 related to purchase and conveyance of County property (portions of APN 1119-241-01 and 02).
(ACTION)
Sponsors:

Indexes:

Code sections:

Attachments: Exhibit A - Map
Exhibit B - County-City PSA Agreement v2
Exhibit C - City-Arrow United PSA V2
Exhibit D - Budget Resolution
Action ByDate Action ResultVer.

For City Council Meeting [September 13, 2016]
TO: Honorable Mayor and City Council/Governing Board
APPROVAL: Michael Story, City Administrator
FROM: Robb R. Steel, Assistant CA/Development Services Director Request City Council to Approve: 1) a Purchase and Sale Agreement between the County of San Bernardino and the City of Rialto, 2) a Purchase and Sale Agreement by and between the City of Rialto and Arrow United Investment LLC, and 3) Adopt Budget Resolution No. 7002 appropriating funds in the amount of $4,646,000 related to purchase and conveyance of County property (portions of APN 1119-241-01 and 02).
(ACTION)
BACKGROUND:

The County of San Bernardino (“County”)owns certain real property adjacent to the Mid-Valley Landfill. The property consists of approximately 13.22 acres (portions of APN 1119-241-01 and 02) situated south of Casmalia Avenue and west of Alder Avenue illustrated in Exhibit A (“Property”).

The Property is improved with a groundwater treatment system that is monitored by the County under the oversight of the Santa Ana Region Regional Water Quality Control Board, but is otherwise vacant and suitable for development. SCE recently submitted an offer to purchase an easement for a portion of the Casmalia frontage, and the Buyer will consider the implications during the due diligence period.

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The County declared the Property surplus and offered it for sale at fair market value. Arrow United Investment (“Buyer”)offered to purchase the Property from the County to develop a heavy metal recycling facility. However, the County indicated that its disposition procedures require a competitive solicitation, unless purchased by a governmental agency. The Buyer requested that the City consider acquiring the Property and reselling it in a concurrent transaction, similar to what the City did in 2012 for Panattoni Development related to County parcels.

Buyer requests that the City purchase the entire Property from the County and convey the easterly

6.00 acres directly to the Buyer. A second buyer (“Buyer 2”) proposes to purchase the remaining

7.22 acres to develop a recreational vehicle outdoor storage facility.

ANALYSIS/DISCUSSION:

Purchase and Sale Agreements
The City proposes to enter into two separate Purchase and Sale Agreements: (1) under the first PSA (Exhibit B), the City acquires the 13.22-acre Property from the County for $4,600,000 and (2) under the second PSA (Exhibit C), the City conveys the 13.22 acres to two purchasers, Arrow United and Bruno Mancinelli (or his assignee) by a metes and bounds conveyance (in the absence of a parcel map).

The proposed terms of the overall transaction are:
· The City purchases the Property from the County for $4,600,000, and the Buyer concurrently purchases the Property from the City for $4,600,000.
· The Buyer must deposit 5% of the purchase price or $230,000 with Escrow. · The Buyer funds the purchase price and closing costs without the City contributing any funds. · Concurrent with the close of escrow, the City will subdivide the Property and create two parcels: 1) an approximately 6.0-acre parcel for the Buyer; and, 2) an approximately 7.22-acre parcel for Buyer 2 (Bruno Mancinelli).
· The Buyer and Buyer 2 shall enter into a separate purchase and sale agreement for Buyer 2 to purchase the 7.22-Acre Parcel from Buyer, also in a concurrent closing. · During the contingency period, the Buyer and Buyer 2 shall submit entitlement applications to the City for their respective developments.
· The Buyer will have 90 days to perform customary due diligence investigations, including title, environmental, and soils. At the end of the 90 day due diligence period, the Buyer must release 50% of the good faith deposit ($115,000) to the County. · The County PSA provides a 12-month entitlement period from the Opening of EscrowCity of Rialto Printed on 9/12/2016Page 2 of 4 powered by Legistar™
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· The County PSA provides a 12-month entitlement period from the Opening of Escrow (encompassing the 90 day due diligence period). At the end of the Entitlement period, the entire deposit shall be released and non-refundable (but applicable to the purchase price).

The Buyer may extend the closing by an additional 90 days at no cost but only in the event that the land use entitlements have been approved, but the statute of limitations for any challenge has not yet expired.
· The Buyer (City) may extend the Entitlement period for an additional 6 months, but must deposit and immediately release an additional $230,000 to the County (non-refundable but applicable to the purchase price).

The City does not intend to accept any financial risk in the proposed transaction. All costs of acquisition shall be borne by the Buyer.

Land Use Considerations
The Property is located within the Freeway Incubator land use designation of the Renaissance Rialto Specific Plan. As long as Arrow United Investment conducts all activities within a modern industrial building, its hazardous material recycling operation is a conditionally permitted use subject to approval by the Planning Commission. The goal is to create a facility that looks like a modern research and development campus.

However, the Freeway Incubator land use designation does not permit outdoor recreational vehicle storage uses. The proposed 7.22-acre parcel is oddly configured with a narrow depth that constrains traditional development and may warrant consideration of alternative uses. On August 17, 2016, the Economic Development Committee directed staff to develop options for permitting the storage uses on the westerly portions of the property due to its irregular shape and consequential development limitations.

ENVIRONMENTAL IMPACT:

The action to approve the Purchase and Sale Agreements is an administrative activity of the City Council and the California Environmental Quality Act (CEQA) does not define it as a Project.

Pursuant to Section 15378 of CEQA, a “Project”means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. A Project does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment, such as: (1) Government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, or (2) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

The development of each site requires various land use entitlements, which includes CEQA compliance. Neither Buyer has submitted any entitlement applications for the Site.

GENERAL PLAN CONSISTENCY:

The City of Rialto has identified several goals and objectives within the City’sadopted General Plan through which the City looks to improve the community.

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maintain a positive business climate.

Goal 3-3: Attract, expand, and retain commercial and industrial businesses to reduce blighted conditions and encourage job growth.

LEGAL REVIEW:

The City Attorney has reviewed and approved the staff report, Purchase and Sale Agreements, and Resolution.

FINANCIAL IMPACT:

The proposed actions should not have any financial impact upon the City other than staff time. The Buyer will reimburse the City for all costs to acquire the Property up to a maximum of $4,600,000 and transaction costs estimated at $46,000 (1% of purchase amount) - total of $4,646,000. The City will deposit funds related to the acquisition of the Property in Account No. 010-400-4255-7598 and invoices will be paid from Account No. 010-500-4255-3001.

RECOMMENDATION:

Staff recommends that the City Council:

1. Approve the Purchase and Sale Agreement by and between the City of Rialto and the County of San Bernardino related to purchase of County Property (portions of APN 1119-241-01 and 02) in substantially the form attached hereto, authorizing the City Administrator and the City Attorney to make any technical non-substantive changes.

2. Approve the Purchase and Sale Agreement by and between the City of Rialto and Arrow United Investment, LLC related to conveyance of County Property (portions of APN 1119-241-01 and 02), authorizing the City Administrator and the City Attorney to make any technical non- substantive changes.

3. Approve Budget Resolution (Exhibit D).

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EXHIBIT A

County Landfill

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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is entered into as of __________________ (“Effective Date”), by and between the COUNTY OF SAN BERNARDINO, a body corporat e and politic of the State of California (“Seller”), and the CITY OF RIALTO, a California municipal corporation (“Buyer”).

R E C I T A L S
A. Seller owns that certain real property improved with the Mid -Valley Landfill located at 2390 Alder Avenue in the City of Rialto, County of San Bernardino, State of California.

B. Buyer desires to acquire a portion of this property consisting of approximately 13.22 acres (portion of APN 1119-241-01, and 02) from the Seller for economic development purposes as more particularly described in the legal description attached hereto as Exhibit “A” (collectively, the “Property”).

C. Seller has determined that the Property is surplus to its needs, and is authorized t o sell all or a portion of the P roperty to Buyer for fair ma rket value in accordance with California Government Code Section 25365.

D. The Property is located adjacent and south of the Mid -Valley Landfill and is improved with a groundwater treatment system that is monitored by the Seller under the oversight of the Santa Ana Region Regional Water Quality Control Board (RWQCB ), Cleanup and Abatement Order No. 98-96 (CAO 98-96).

E. Seller and Buyer desire to enter into t his Agreement to provide for Seller to sell the Property to Buyer and Buyer to purchase the Property from Seller, on the terms and conditions set forth herein.

A G R E E M E N T
Based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknow ledged, Seller and Buyer agree as follows:

1. PURCHASE AND SALE OF THE PROPERTY.

Subject to all of the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, Seller agrees to sell to Buyer, and Buyer agrees to purchas e from Seller, the Property.

2. PURCHASE PRICE.

2.1 Amount of Purchase Price . The purchase price payable by Buyer to Seller for the Property is the total sum of Four Million Six Hundred Thousand Dollars ($4,600,000) (“Purchase Price”).

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2.2 Payment of Purchase Price . The Purchase Price for the Property shall be paid as follows:
(a) Deposit. Within five (5 ) business days following the Effective Date of this Agreement, Buyer shall deliver to Golden State Escrow, at its office located at 1421-1 East Cooley Drive, Colton, CA 92324 , Attn: Kellie Linderman (“Escrow Holder”) an executed copy of this Agreement and in Good Funds (as defined below) , the sum of Two Hundred Thirty Thousand Dollars ($ 230,000.00) (“ Deposit”). If requested by Buyer, t he Deposit shall be held by Escrow Holder in an interest bearing account , in which case a ll interest earned on the Deposit shall become a part of the Deposit, and Buyer shall be responsible for payment of all costs and fees imposed on the Deposit account. The Deposit and any interest accruing thereon shall be credited to the Purchase Price upon the Close of Escrow. If this Agreement has not terminated pursuant to Section 3.4 on or before the expiration of the Due Diligence Period (as that term is defined in Section 3.4), one-half (1/2) of the Deposit (being One Hundred Fifteen Thousand Dollars ($115,000) (“ Due Diligence Deposit”), shall become nonrefundable on the day following the expiration of the Due Diligence Period, subject only to Seller’s performance of its obligations hereunder an d the satisfaction of the Buyer Closing Conditions. If this Agreement has not terminated pursuant to the Section 6 on or before the expiration of the Entitlement Period (as that term is defined in Section 6), the remaining one-half (1/2) of the Deposit in the amount of One Hundred Fifteen Thousand Dollars ($115,0000) (“ Entitlement Period Deposit ”) shall become nonrefundable on the day following the expiration of the Entitlement Period, subject only to Seller’s performance of its obligations hereunder and the satisfaction of the Buyer Closing Conditions.

All funds deposited in Escrow shall be in “ Good Funds ” which means a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California.
(b) Balance of Purchase Price. On the date that is one (1) day prior to the scheduled Closing Date, or such other time as is reasonably required by Escrow Holder in order to close the Escrow on the schedule d Closing Date, Buyer shall deposit the balance of the Purchase Price with Escrow Holder in the Good Funds. (c) Independent Consideration. Within ten (10) days of the full execution of this Agreement, Buyer shall deliver to Seller the sum of One Hundred Dollars ($100) (“Independent Consideration”), as consideration for Buyer’s right to purchase the Property and to terminate this Agreement prior to the expiration of the Due Diligence Period and for Seller’s execution, delivery and performance of this Agreement. The Independent Consideration is in a ddition to and independent of any other consideration or payment provided for in this Agreement, is not applicable to the Purchase Price, is non -refundable and shall be retained by Seller notwithstanding any other provision of this Agreement.

3. DUE DILIGENCE REVIEW.

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tests and inspections of the Property, including surveys and architectural, engineering, geotechnical and environmental inspections and tests; provided, however, any intrusive or invasive investigations shall be subject to Seller’s prior written consent. The “Due Diligence Period” shall mean the ninety (90) days following the Effective Date. Within five (5) business days after the Effective Date, Seller shall provide to Buyer, copies of any studies, surveys, plans, reports , environmental reports, test results, approvals and other entitlements relating to the Property actually in Seller’s possession, if any.

Notwithstanding anything to the contrary contained herein, Seller shall have no obligation to deliver to Buyer any documents, reports, presentations or similar items prepared for internal use by Seller or that are protected by the attorney -client privilege or that are otherwise subject to a confidentiality agreement . All inspections shall be performed by Buyer at Buyer’s sole cost and expense. As a condition to any such entry, inspection or testing, Buyer shall comply, and cause Buyer’s Agents to comply, with the following: (a) coordinate its entries with Seller so as not to disturb the operation of any business on the Property , including notification to Seller of the proposed date and purpose of the intended entry and submittal to Seller of the names and/or affiliations of the persons t hat will be entering the Property; (b) conduct all studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property; (c) comply with all applicable laws and governmental regulations; (d) keep t he Property free and clear of all materialmen’s liens, lis pendens and other liens arising out of the entry and work performed by or on behalf of Buyer and Buyer’s Agents; (e) maintain or assure maintenance of workers’ compensation insurance on all persons entering the Property in the amounts required by the State of California, which shall include a waiver by the insurer of any right to subrogation against Seller and its members, officers, employees and volunteers; (f) promptly repair any and all damage to the Property caused by Buyer or Buyer’s Agents and return the Property to its original condition following Buyer’s entry; and (g) provide to Seller prior to initial entry a certificate of insurance or other evidence satisfactory to Seller that Buyer has in force adequate liability insurance in an amount not less than Two Million Dollars ($2,000,000) naming Seller as an additional insured, and a copy of such policy upon Seller’s request . Any insurance or self -insurance maintained by Seller shall be in exces s of this insurance and shall not contribute with it. The insurance policy shall be kept and maintained in force during the right of entry period and so long thereafter as necessary to cover any claims of damages suffered by persons or property resulting from any acts or omissions of Buyer and Buyer’s Agents.

Buyer shall indemnify, defend and hold harmless the Seller and its directors, officers, agents’ employees, affiliates and volunteers from and against any and all loss, cost, liability or expense (including reasonable attorneys’ fees) arising from the entries of Buyer and Buyer’s Agents upon the Property or from Buyer’s failure to comply with the conditions to Buyer’s entry onto the Property provided for herein. Such indemnity shall survive the Close of Escrow or the termination of this Agreement for any reason.

All documents, reports, studies, records, financial data, computer records, memoranda, notes, analysis, and the like, provided by Seller to Buyer or third party reports obtained by Buyer relating to the Property in the course of Buyer’s review, including, without limitation, any environmental assessment or audit (collectively, the “ Property Documents ”) shall be treated as confidential information by Buyer and Buyer shall instruct all of its emplo yees, agents, representatives and contractors as to the confidentiality of all such information. Buyer acknowledges that Seller has not ma de nor makes any warranty or representation regarding the

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truth, accuracy or completeness of the Property Documents or the source(s) thereof. Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of the Property Documents and any Property Documents it provides to Buyer are provided solel y as an accommodation to Buyer and it is B uyer’s responsibility to verify the accuracy and veracity of the Property Documents. Seller expressly disclaims any and all liability for representations or warranties, express or implied, statements of fact and other matters contained in such information, or for omissions from the Property Documents, or in any other written or oral communications transmitted or made available to Buyer. Buyer shall rely solely upon its own investigation with respect to the Property, including, without limitation, the Proper ty's physical, environmental and economic condition including the presence of Hazardous Materials, compliance or lack of compliance with any law, ordinance, order, permit or regulation or any other attribute or matter relating thereto.

3.2 Survey. Buyer may ob tain, at Buyer’s sole cost and expense, a survey of the Property (“Survey”).

3.3 Natural Hazard Disclosure . Buyer and Seller hereby instruct Escrow Holder to order a natural hazard disclosure report from an affiliate of the Title Company (“Natural Hazard Service”) to examine the maps and other information specifically made available to the public by government agencies for the purposes of providing a Natural Hazard Disclosure Report for the Property with mandated natural hazard property disclosures . The writte n report prepared by the Natural Hazard Service regarding the results of its examination fully and completely discharges Seller from its disclosure obligations referred to herein, and, for the purposes of this Agreement, the provisions of Civil Code Sectio n 1103.4 regarding the non -liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply.

3.4 Due Diligence Period; Termination Right. Buyer shall have through the last day of the Due Diligence Period in which to examine, inspect, and investigate the Property Documents and all matters relating to the Property and Buyer’s purchase thereof and, in Buyer’s sole and absolute judgment and discretion, determine whether the Property is acceptable to Buyer. If Buyer is not satisfied with any of the foregoing matters, Buyer may terminate this Agreement by giving wr itten notice of termination to Seller and Escrow Holder (“ Due Diligence Termination Notice”) on or before the last day of the Due Diligence Period. In the event that Buyer fails to deliver Buyer’s Due Diligence Termination Notice on or before the expiration of the Due Diligence Period, Buyer shall have conclusively been deemed to have approved its due diligence investigation of the Property and waived its right to ter minate this Agreement pursuant to this Section 3.4. If Buyer timely elect s to terminate this Agreement pursuant to this Section 3.4, the Deposit shall be returned to Buyer and the parties shall have no further obligations hereunder except for obligations t hat expressly survive the termination hereof.

3.5 Review of Title . No later than five (5) days following the Effective Date of this Agreement, Seller shall provide to Buyer a preliminary title r eport for the Property and the underlying title documents disclo sed therein (collectively, the “ Title Report ”), issued by First American Title Insurance Company (“Title Company”). On or before the date that is thirty (30) days after the Effective Date (“ Buyer’s Title Review Period”), Buyer shall notify Seller in writing (“Buyer’s Title Notice ”) of any objections Buyer may have to title exceptions or other matters contained in the Preliminary Title Report or Survey (“ Title Objections”). If Buyer does not give such notice by the expiration of Buyer’s Title Review Period, such failure shall conclusively be

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deemed to be Buyer’s approval of those matters. If Buyer does timely provide Buyer’s Title Notice with Title Objections, Seller shall have ten (10) business days after receipt thereof to notify Buyer that Seller (a) will endeavor to cause or (b) elects not to cause any or all of the Title Objections disclosed therein to be removed or insured over by the Title Company in a manner reasonably satisfactory to Buyer. Seller’s failure to notify Buyer within such ten (10) business day period as to any Title Objections that Seller is willing to endeavor to cure or cause to be insured over shall be deemed an election by Seller not to pursue such endeavor to remove or have the Title Company insure over such Title Objections. If Seller notifies or is deemed to have notified Buyer that Seller shall not endeavor to remove nor have the Title Company insure over any or all of the Title Objections, Buyer shall have twenty (20) business days after the expiration of Seller’s ten (10) business day period to respond to either (a) terminate this Agreement or (b) waive such Title Objections and proceed to Closing, without any reduction in the Purchase Price on account of such Title Objections. If Buyer does not give notice within said period, Buyer shall be deemed to have elected to waive the Title Objections pursuant to clause (b).

If Buyer receives any supplement to the Title Report disclosing any new materially adverse title matters not disclosed to Buyer prior to the expiration of the Buyer’s Title Review Period , the foregoing right of review and approval shall also apply to said new matter; provided, however, the period for Buyer to deliver Buyer’s Title Notice with respect to such new title matter shall be the later of (i) expiration of the Buyer’s Title Review Period, or (ii) ten (10) business days from receipt of the supplemental title report and the underlying document(s) referenced therein; provided, that Buyer shall not have the right under this paragraph to make any objections with respe ct to any matter which would be disclosed by an accurate survey of the Property since Buyer is to satisfy itself as to all matters which would be disclosed by an accurate survey prior to the expiration of the Buyer’s Title Review Period.

3.6 State of California Department of Transportation Right -of-Way Amendment.

The Buyer acknowledges that a Final Order of Condemnation to acquire a sixty-foot wide portion of property over APN 1119 -241-01 for drainage purposes was filed on or about October 18, 2007, in favor of the State of California Department of Transportation (Caltrans) and is attached hereto as Exhibit “B” (“FOC”). The FOC conveyed this sixty-foot wide portion of property in fee instead of an easement and the Seller agrees to continue to work with Caltran s to amend the FOC to correct the easement. Once corrected, the amendment to the FO C (“FOC Amendment”) will be recorded in the Official Records of San Bernardino County which will (i) convey the underlying fee portion of Property to the Buyer, and (ii) concurrently transfer a sixty-foot wide drainage easement to the City of Rialto for continued maintenance (“City Drainage Easement ”). The close of E scrow is contingent on the completion and recordation of the FOC Amendment and the City Drainage Easement.

4. SITE DEVELOPMENT DISCLOSURE.

4.1 Landfill. The Property is located just south of the Mid -Valley Landfill Sanitary (“Landfill”), immediately south of Casmalia Street in Rialto, California . The Seller is mandated by the RWQCB to comply with provisions of Ca lifornia Code of Regulations (CCR), Title 27, Chapter 3, Subchapter 3, Article 1, Sections 20380 and 20430. As a result, the Seller has installed a groundwater treatment system that extends on to the Property to mitigate volatile organic compound impacts in groundwater. Within the boundaries of the property, the Seller’s groundwater treatment system includes 9 groundwater reinjection wells that run in a generally east -west alignment near the

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northern portion of the property. Each reinjection well is housed within a 2.5’ x 4’ vault at the ground surface, and each well is connected to a second 2.5’ x 4’water -delivery control vault. The reinjection well vaults are approximately 200 feet apart, and the well housing vault and water - delivery control vaults are app roximately 15 feet apart from one another. The 18 vaults (total) are interconnected by water conveyance pipeline and electrical wire and conduit.

The Seller has also installed two groundwater monitoring wells on the property. Monitoring well N -16 A/B/C w as constructed near the southeastern limits of the property; well F -33A/B is located near the southwestern limits of the property. Each well is housed within an approximately 2’ x 2’ at grade cristy box.

4.2 Reservation of Easement. Buyer acknowledges and agrees t hat Seller will reserve a permanent easement (“Reservation of Easement”) for ingress, egress, construction, reconstruction, installation, replacement, operation, sampling, maintenance, and monitoring of extraction and reinjection wells and a pi peline conveyance system and appurtenances and incidents thereto, over, under and across the Property as set forth in the Grant Deed to allow Seller perpetual access to the groundwater system improvements for the purpose of complying with CAO 98 -96 and any subsequent orders, directives or other requirements issued by a court, regulatory agency or other governmental authority of competent jurisdiction.

4.3 Post-Closing Covenant. Subsequent to the Close of Escrow (as defined below) Buyer (and any subsequent transferee) shall provide to Seller, no less than nine (9) months prior to Buyer’s intended construction commencement date, Buyer’s development plans ( “Plans”) and a written request to Seller (“Request”) to re-profile the necessary groundwater extraction wells and ground water reinjection wells identified in the Reservation of Easement to match grade in conformance with Buyer’s development plans (“Work”). The Plans shall contain sufficient detail and data to enable Seller to perform the Work. Seller will complete the Work at its sole cost and expense within nine (9) months of receipt from Buyer of the Plans and the Request. This Section 4.3 shall survive the Close of Escrow (as defined below) and shall not merge with the Grant Deed recorded in connection with this transaction.

5. ESCROW.

5.1 Opening of Escrow; Closing Date . Closing of the sale of the Property shall take place through an escrow (“Escrow”) to be established with the Escrow Holder referred to in Section

2.2(a). Escrow shall be deemed open upon deliver y of a fully executed copy of this Agreement to Escrow Holder. Upon receipt of a fully executed copy of this Agreement, Escrow Holder shall execute the Escrow Holder’s acceptance attached hereto and notify Seller and Buyer of the escrow number it assigns to the Escrow. The Close of Escrow shall occur as soon as reasonably practicable following the expiration of the Due Diligence Period, but in no event later than the date that is thirty (30) days following (i) the expiration of the Entitlement Period, or (i i) the recordation of the FOC Amendment and the City Drainage Easement , whichever shall occur later (“Closing Date ”). The terms “Close of Escrow ” and/or the “ Closing” shall mean the consummation of the transactions contemplated by this Agreement to occur t hrough the Escrow including Seller’s conveyance of the Property to Buyer.

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5.2 Escrow Instructions . This Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of Buyer and Seller to Escrow Holder as well as an agreement between Buyer and Seller. In the event of any conflict between the provisions of this Agreement and Escrow Holder’s standard instructions, this Agreement shall prevail.

5.3 Deliveries by Seller. On or before 12:00 noon on the business day preceding the scheduled Closing Date, Seller shall deliver to Escrow Holder : (i) the Grant Deed in the fo rm attached hereto as Exhibit “C”, duly executed and acknowledged by Seller, (ii) a Certificate of Non- Foreign Status executed by Seller, (iii) an ori ginal of the Closing Statement described in Section

5.5, duly executed by Seller, (iv) Subdivision Documents (as defined in Section 6), if any; and (v) all other documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.

5.4 Deliveries by Buyer. On or before 12:00 noon on the business day preceding the scheduled Closing Date, Buyer shall deliver to Escrow Holder: (i) the balance of the Purchase Price, (ii) the escrow costs and prorations for which Buyer is responsible, (iii) an original of the Closing Statement described in Section 5 .5 duly executed by Buyer, (iv) the certificate of acceptance to be affixed to the Grant Deed executed by Buyer, (v) Subdivision Documents, if applicable; and (vi) all other sums and documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.

5.5 Closing Statement. No later than four (4) business days prior to the Closing Date, Escrow Holder shall prepare for approval by Buyer and Seller a closing statement (“ Closing Statement”) on Escrow Holder’s standard form indicating, among other things, Escrow Holder’s estimate of all closing costs and prorations made pursuant to this Agreement.

5.6 Closing, Recording and Disbursements . On the Closing Dat e, and provided all of the Seller Conditions to Closing and Buyer Conditions to Closing set forth in Sections 5.10.1 and

5.10.2 of this Agreement have been satisfied or waived in writing by the appropriate party, Escrow Holder shall take the following actions:
(a) Recording. Escrow Holder shall cause the Grant Deed together with other documents to be recorded under this Agreement, including , but not limited to, the FOC Amendment, City Drainage Easement, Subdivision Documents, etc. to be recorded in the Official Records of San Bernardino County, California.
(b) Delivery of Documents and Funds . Escrow Holder shall deliver to Buyer all of the items listed in Section 4.3 above which were delivered by Seller to Escrow, except that Escrow Holder shall be instructed to rec ord the original Grant Deed in the Official Records upon Close of Escrow. Escrow Holder shall deliver the Purchase Price, less Seller’s costs and expenses hereunder and the Deposit, to Seller by wire transfer as provided in written instructions to be furnished to Escrow Holder by Seller prior to the Close of Escrow, together with one duplicate original of all of the items listed in Section 5.4 above on the Close of Escrow and a conformed copy of the Grant Deed.

5.7 Taxes. Real property taxes will not be prorated between Seller and Buyer in Escrow.

If current taxes have not yet been paid as of the Closing Date, then at Closing Seller shall pay

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through Escrow or out of Seller’s proceeds, the installment applicable to the period in which Closing occurs. Seller shal l be entitled to a refund of any excess payment made to the taxing authority on account of the Property, including any taxes paid by Seller and applicable to any period from and after the Closing Date. The taxing authority will notify Seller of any refund due Seller resulting from the subject acquisition after a review and any subsequent proration of the property tax assessment by the County Assessor. Seller retains the right, following close of escrow, to apply to the County Tax Collector for refund pursuant to Revenue and Taxation Code Section 5096.7.

5.8 Payment of Costs . Buyer shall pay for t he premium for the ALTA non -extended owner’s title policy Title Policy referred to in Section 5 .10.2(b), with the cost of any endorsements or extended coverage to be as set forth therein. Any recording fees for the documents to be recorded under this Agreement and th e escrow fee of Escrow Holder shall be shared equally by Seller and Buyer; provided, however, that if the Close of Escrow has not occurred by the Closing Date by reason of a default hereunder, the defaulting party shall bear all Escrow cancellation charges. All other costs and expenses of Escrow not specifically allocated in this Agreement shall be allocated between Buyer and Seller in accordance with customary practice in the county in which the Property is located. Seller and Buyer shall each be responsible for their respective attorneys’ fees and costs.

5.9 Information Report . Escrow Holder shall file and Seller and Buyer agree to cooperate with Escrow Holder and with each other in completing any report (“ Information Report”) and/or other information required to be delivered to the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction contemplated by this Agreement, including, without limitation, Internal Revenue Service Form 1099 -B as such may be hereinafter modified or amended by the Internal Revenue Service, or as may be required pursuant to any regulation now or hereinafter promulgated by the Trea sury Department with respect thereto. Seller and Buyer also agree that Seller and Buyer, their respective employees and attorneys, and Escrow Holder and its employees may disclose to the Internal Revenue Service, whether pursuant to such Information Report or otherwise, any information regarding this Agreement or the transaction contemplated herein as such party reasonably deems to be required to be disclosed to the Internal Revenue Service by such party pursuant to Internal Revenue Code Section 6045(e), an d further agree that neither Seller nor Buyer shall seek to hold any such party liable for the disclosure to the Internal Revenue Service of any such information.

5.10 Conditions to Close of Escrow.

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(b) Representations and Warranties . All representations and warranties made by Buyer in this Agreement are true and correct in all material respects as of the Closing as though made at that time.
(c) No Default. Buyer shall not be in material default of any of its obligations under this Agreement and no event shall have occurred that would constitute a default with the giving of notice or the passage of time.

5.10.2 Conditions to Buyer’s Obligations . In addition to any other condition se t forth in this Agreement in favor of Buyer, Buyer shall have the right to condition its obligation to purchase the Property and close the Escrow upon the satisfaction, or written waiver by Buyer, of each of the following conditions precedent on the Closin g Date or such earlier time as provided for herein (collectively, the “Buyer Conditions to Closing”):
(a) Delivery of Documents . Seller shall have executed and deposi ted into Escrow the Grant Deed and any other escrow and closing documents required to be submitted by Seller in order to accomplish the close of Escrow for the Property. (b) Title Policy . The Title Company is unconditionally and irrevocably committed to issue to Buyer at Closing a n ALTA non-extended coverage owner’s title policy, or, upon Buyer’s request, an ALTA extended coverage owner’s policy of title insurance (provided Buyer shall be responsible for any survey costs associated therewith and Buyer must deliver an ALTA survey acceptable to the Title Company for the issuance of such extended coverage at least ten (10) business days prior to the Closing Date and Buyer shall be responsible for the additional cost of the extended coverage ), insuring Buyer’s title to the Property in the amount of the Purchase Price, subject only to the following (col lectively, the “Approved Title Exceptions ”): (i) the standard exceptions and exclusions from coverage contained in such form of the policy; (ii) real estate taxes not yet due and payable ; (iii) matters created by, through or under Buyer; (iv) items disclos ed by the Survey and Title Report (including any supplements) and approved or deemed approved by Buyer pursuant to the title review provisions in Section 3.5, or, if Buyer fails to obtain the Survey, items which would be disclosed by an accurate, updated s urvey of the Property or a physical inspection of the Property; (v) the Reservation of Easement; (vi) the FOC Amendment and the City Drainage Easement; and (vii) any Title Objections that neither Seller nor the Title Company has agreed to remove from title or insure over (“Title Policy”). Notwithstanding the foregoing, Buyer may request the Title Company to issue a binder policy with any additional cost for such binder to be paid by Buyer. The issuance of an ALTA extended coverage policy shall not be a cond ition precedent to Buyer’s obligation to close the Escrow, and Buyer shall not object to the Closing based upon an inability to obtain, or any delays in obtaining, such coverage. In addition, and without limiting the foregoing, the issuance of any particul ar title endorsements requested by Buyer, at Buyer’s sole cost and expense, shall not be a condition precedent to Buyer’s obligation to close this Escrow and Buyer acknowledges that Buyer is solely responsible for ascertaining the availability of any such endorsements prior to the end of the Due Diligence Period. If endorsements are required to cure defects in title and Seller has agreed to provide such endorsements as a means of curing such title defects, then Seller shall pay for such endorsements

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(c) Condition. At Close of Escrow, possession of the Property shall be delivered to Buyer with a ll tenants of the Property having vacated their leased spaces clear of all furniture, trash and debris.
(d) Representations and Warranties . All representations and warr anties made by Seller in this Agreement are true and correct in all material respects as of the Clos ing as though made at that time.
(e) No Default. Seller shall not be in material default of any of its obligations under this Agreement (and shall not have received notice of a default hereu nder which has not been cured).

5.10.3 Satisfaction of Conditions . Where satisfaction of any of the foregoing conditions requires action by Buyer or Seller, each party shall use its diligent efforts, in good faith, and at its own cost, to satisfy such condition.

5.10.4 Waiver. Seller may at any time or times, at its election, waive any of the Seller Conditions to Closing set forth in Section 4.10.1 above to its obligations hereunder, but any such waiver shall be effective only if contai ned in writing signed by Seller and delivered to Buyer.

Buyer may at any time or times, at its election, waive any of the Buyer Conditions to Closing set forth in Section 5.10.2 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by Buyer and delivered to Seller.

5.10.5 Termination. In the event each of the Seller Conditions to Closing set forth in Section 5.10.1 is not fulfilled on the Closing Date or such earlier time period as provided for herein or waived by Seller pursuant to Section 5.10.4, and provided Seller is not in default of this Agreement, Seller may at its option terminate this Agreement and the Escrow opened hereunder. In the event that each of the Buyer Conditions to Closing set forth in Section 5.10.2 is not fulfilled on the Closing Date or such earlier time period as provided for herein or waived by Buyer pursuant to Section 5.10.4, and provided Buyer is not in default of this Agreement, Buyer may at its option terminate this Agreement a nd the Escrow opened hereunder or to pursue all available remedies including but not limited to an action for specific performance . No termination under this Agreement shall release either party then in default from liability for such default except to the extent of the liquidated damage provision in Section 9 .2. In the event this Agreement is terminated, all documents and funds delivered by Seller to Buyer or Escrow Holder shall be returned immediately to Seller and, subject to Seller’s retention of the De posit in accordance with Section

9.2 in the event of a Buyer default, all documents and funds delivered by Buyer to Seller or Escrow Holder shall be returned immediately to Buyer.

6. PROCESSING OF ENTITLEMENTS.

6.1 Entitlements. Seller covenants and agrees that Seller will reasonably cooperate with Buyer in connection with the processing by Buyer of the Entitlements (defined below) deemed necessary by Buyer for the development of the Property during Escrow. Seller acknowledges that such cooperation shall include whatever actions may be reasonably necessary or helpful to enable Buyer to p rocess its Entitlements. Such E ntitlements to be processed by Buyer may include, without limitation, the processing of an amendment to the general plan covering the Property, zone change, a tentative subdivision map, a final subdivision map, an environmental impact report,

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associated development permits and related permits, agreements and approvals requested from the City of Rialto or any other governmental agency having jurisdiction over the Property as Buyer may determine to be necessary or helpful to enable Buyer to develop the Property in accordance with its development plans and in a manner permitting construction and operation on the Property consistent with Buyer’s developmen t and use plans (collectively " Entitlements"). Such cooperation shall include facilitating Buyer in entering into development agreements, investigating public financing and forming special improvement districts, executing, as may be requested by the City o f Rialto or any other governmental agency having jurisdiction over the Property, applications, permits or approvals required for the submittal of the Entitlements and, if applicable, executing the final map, if requested by Buyer, and providing Buyer and B uyer's agents, employees and independent contractors access to the Property to perform any investigations or tests necessary for the processing of such Entitlements. The parties acknowledge that the intent of this provision is that Seller will cooperate with Buyer and participate in such meetings if the City of Rialto or other governmental agencies require the owner of the Property to be in attendance at such meetings. To the extent such attendance is required, Buyer will use reasonable efforts to provide Seller with advance notice and to schedule such meetings at a time which is reasonably acceptable to Seller. Upon submittal of any such applications, permits, deeds or maps to Seller, Seller shall, no later than seven (7) days after delivery of such docume nts, deliver the same to Buyer. Any subdivision documents finalized as an Entitlement shall be recorded concurrently with Close of Escrow (“Subdivision Documents”).

6.2 Entitlement Period. Buyer shall in good faith diligently make all reasonable efforts to obtain Entitlements within the twelve (12) month period following the Opening of Escrow, as such period may be extended for an additional six (6) months by Buyer pursuant to Section 6.3 (“Entitlement Period”). Notwithstanding any other provision of this Agreement, if at the end of the 18th month following the Opening of Escrow, the Entitlements have been issued but the statute of limitations for challenge of any of such Entitlements has not run, the “Entitlement Period” shall, at the written election of the B uyer, be extended for an additional ninety (90) days. If Buyer is not otherwise in default or in breach of this Agreement, if Buyer should fail to obtain such Entitlements within the Entitlement Period for any reason or if such Entitlements are issued but are not final by the end of such Entitlement Period, Buyer, at its option, may: (i) cancel Escrow and receive a full refund of Entitlement Period Deposit together with any accrued interest thereon, or (ii) extend the Entitlement Period in accordance with Section 6.3 below.

6.3 Extension of Entitlement Period. The Buyer may extend the Entitlement Period for an additional six (6) month period after the initial twelve month period (to a date that is eighteen months (18) months following the Opening of Escrow) in e xchange for the Buyer’s one -time payment of Two Hundred Thirty Thousand Dollars ($230,000) (“ Entitlement Extension Deposit”) which amount will be paid directly to Seller and shall be deemed added to the Deposit in the Escrow. If Buyer elects to extend the Entitlement Period for the additional six (6) month period, Buyer shall deliver written notice of the exercise of the extension (“ Extension Exercise Notice ”) together with the Entitlement Extension Deposit paid directly to Seller (with a copy of the Extension Exercise Notice to Escrow Holder) prior to the last day of original 12 -month Entitlement Period and such Extension Exercise Deposit will be non -refundable, but shall be applied toward the Purchase Price.

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7. REPRESENTATIONS AND WARRANTIES.

7.1 Seller’s Repr esentations and Warranties . Seller hereby makes the following representations and warranties to Buyer, each of which is material and relied upon by Buyer in making its determination to enter into this Agreement:
(a) Seller’s execution, delivery and performance of its oblig ations under this Agreement does not constitute a default or a breach under any contract, agreement or order to which Seller is a party or by which it is bound.
(b) To the best of Seller’s actual knowledge without any duty of investigation or inquiry, there are no pending, actions, suits, writs, injunctions, decrees, legal proceedings or governmental investigations against the Property.
(c) Except as disclosed herein, Seller has not received any notices and has no actual knowledge, without any duty if investigation or inquiry, of any violation of any laws, ordinances, rules, regulations or requirements of any governmental agency, body or subdivision affecting or relating to the Property.

7.2 Buyer’s Representations and Warranties . Buyer hereby makes the fol lowing representations and warranties to Seller, each of which is material and relied upon by Seller in making its determination to enter into this Agreement:
(a) Buyer has the full right, power and lawful authority to purchase and accept the Property and unde rtake all obligations as provided herein. The execution, performance and delivery of this Agreement by Buyer has been fully authorized by all requisite actions on the part of Buyer.
(b) Buyer’s execution, delivery and performance of its oblig ations under this Agreement does not constitute a default or a breach under any contract, agreement or order to which Buyer is a party or by which it is bound.
(c) Buyer is not the subject of a current or pending bankruptcy proceeding.

8. AS-IS SALE; RELEASE OF SELLER AS TO PROPERTY CONDITION.

Buyer acknowledges that it will be given an adequate op portunity to review and inspect all aspects of the Property during the Due Diligence Period. Seller makes no representation or warranty of any kind as to the physical or environmental con dition of the Property or in connection with any matter, report or information relating to the condition of the Property, its value, fitness, use, zoning, entitlements, the existence of Hazardous Materials thereon, moratoriums, economic feasibility, developability or any other matter relating to Buyer’s proposed use or development of the Property.

Buyer shall, upon the Close of Escrow, be deemed to have disclaimed and waived any and all objections to the physical and environmental characteristics and condit ions of the Property, including, without limitation, any Hazardous Materials located thereon and the condition of title thereto, whether or not such conditions would be disclosed by reasonable and diligent inspection.

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entitlements. The foregoing disclaimers and waivers include, without limitation, topography, climate, air, water rights, utilities, present and future zoning, governmental restrictions, entitlement rights and obligations, and governmental conditions or development, soil, subsoil, environmental contamination, the purpose to which the property is suited, drainage, access to public roads, proposed routes or roads or extensions thereof or the availability of governmental permits or approvals of any kind. Buyer agrees that Seller shall have no responsibility for any patent or latent defect or physical or environmental condition of the Property, whether or not known or discovered, and Buyer accepts all such responsibility. The Property is being transferred and sold “AS -IS,” “WHERE-IS,” “WITH ALL FAULTS” without representation or warranty expressed or implied by Seller, by operation of law, or otherwise except as otherwise expressly provided in this Agreement.

Seller expressly disclaims, which Buyer hereby acknowledges and accepts, any implied warranty of condition, habitability, merchantability, or fitness for a particular purpose or use.

Except for claims for a breach of the representations and warranties of Seller provided in this Agreement, Buyer for itself and on behalf of each of its successors (collectively, the “Releasors”) by this general release of known and unknown claims (this “ Release”) hereby irrevocably and unconditionally release and forever discharge Seller and its officers, officials , employees, agents, and representatives (collectively, the “ Releasees”) or any of them, from and against any and all claims, damages, losses, costs, liabilities, fees or expenses, of any kind or nature whatsoever, whether known or unknown, suspected or unsuspected, f ixed or contingent, liquidated or unliquidated, which any of the Releasors now have, own, hold, or claim to have had, owned, or held, against any of the Releasees arising from, based upon or related to, whether directly or indirectly any facts, matters, circumstances, conditions or defects (whether patent or latent) of all or any kinds, related to, arising from, or based upon, whether directly or indirectly, the Property, including without limitation, the physical condition and quality of t he Property or th e presence of Hazardous Materials in, on, about or under the Property. Buyer acknowledges that it is assuming the risk of such unknown and unanticipated claims and agree s that this release applies thereto, and expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT

TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE

MATERIALLY AFFECTE D HIS SETTLEMENT WITH THE
DEBTOR.”
Buyer’s Initials: _________________
As used in this Agreement, the following terms shall have the meaning ascribed below:
“Environmental Law ” shall mean all applicable past, present or future federal, state and local statutes, regulations, directives, ordinances, and rules, which pertain to environmental matters, contamination of any type whatsoever, or health and safety matters, as such have been amended, modified or supplemented from time to time (including any present a nd future amendments thereto and re-authorizations thereof), including, without limitation, those relating to: (a) the manufacture, processing, distribution, presence, release, generation, use, handling, assessment, investigation, study, monitoring, remova l, remediation, cleanup, treatment, storage, transportation or disposal of

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Hazardous Materials; (b) air, soil, surface, subsurface, surface water and groundwater; (c) the operation and closure of underground storage tanks; (d) health and safety of employee s and other persons; and (e) notification and record keeping requirements relating to the foregoing. Without limiting the above, Environmental Laws also include the following: (a) the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), as amended (“CERCLA”); (b) the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. §§6901 et seq.), as amended (“RCRA”); (c) the Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. §§ 11001 et seq.), as amended; (iv) the Clean Air Act (42 U.S.C. §§ 7401 et seq.), as amended; (d) the Clean Water Act (33 U.S.C. §§1251 et seq.), as amended; (e) the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), as amended; (f) the Hazardous Materials Transportation Act (49 U.S.C. §§ 1801 et seq.), as amended; (g) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §§ 136 et seq.), as amended; (h) the Federal Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.), as amend ed; (i) the Federal Radon and Indoor Air Quality Research Act (42 U.S.C. §§ 7401 et seq.); (j) the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), as amended; and (k) any state, county, municipal or local statutes, laws or ordinances similar or analogous to (including counterparts of) any of the statutes listed above.
“Hazardous Material(s) ” includes, without limitation, any hazardous or toxic material, substance, irritant, chemical, or waste, including without limitation (a) any material de fined, classified, designated, listed or otherwise considered under any Environmental Law, including, without limitation, as defined in California Health & Safety Code Section 25260, as a “hazardous waste,” “hazardous substance,” “hazardous material,” “ext remely hazardous waste,” “acutely hazardous waste,” “radioactive waste,” “biohazardous waste,” “pollutant,” “toxic pollutant,” “contaminant,” “restricted hazardous waste,” “infectious waste,” “toxic substance,” or any other term or expression intended to d efine, list, regulate or classify substances by reason of properties harmful to health, safety or the indoor or outdoor environment, (b) any material, substance or waste which is toxic, ignitable, corrosive, reactive, explosive, flammable, infectious, radi oactive, carcinogenic or mutagenic, and which is or becomes regulated by any local governmental authority, any agency of the State of California or any agency of the United States Government, (c) asbestos, and asbestos containing material, (d) oil, petrole um, petroleum based products and petroleum additives and derived substances, (e) urea formaldehyde foam insulation, (f) polychlorinated biphenyls (PCBs), (g) freon and other chlorofluorocarbons, (h) any drilling fluids, produced waters and other wastes ass ociated with the exploration, development or production of crude oil, natural gas or geothermal resources, (i) mold, fungi, viruses or bacterial matter, and (j) lead-based paint.

9. DEFAULTS.

9.1 Institution of Legal Actions. In addition to any other rights or re medies and subject to the restrictions set forth in this Agreement, either party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any default, to recover damages for any def ault (subject to the restriction on Buyer’s rights to recover monetary damages against Seller set forth in the final clause of this sentence and subject to the restriction on Seller’s rights to recover monetary damages against Buyer set forth in Section 9.2), or to obtain any other remedy consistent with the purpose of this Agreement; provided, however, that notwithstanding anything in the foregoing to the contrary, in no event shall Buyer be entitled to obtain monetary damages of any kind from Seller, including but not limited to , economic loss, lost profits, or any other economic or consequential damages of any kind.

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9.2 Deposit; Liquidated Damages Remedy. The Deposit delivered to Seller by Buyer in accordance with Section 2.2 of this Agreement shall constitu te security for the performance of the obligations of Buyer to be performed pursuant to this Agreement and its retention by Seller as liquidated damages in accordance with this Section 9.2 in the event Escrow does not close as a result of a default by Buyer under this Agreement.

LIQUIDATED DAMAGES. IF THE CLOSE OF ESCROW FOR THE PROPERTY DOES

NOT OCCUR BECAUSE OF A DEFAULT OF BUYER UNDER THIS AGREEMENT,

THEN AND IN SUCH EVENT, BUYER AND SELLER AGREE THAT SELLER WILL

INCUR DAMAGES BY REASON OF SUCH DEFAULT BY BUYER, WHICH DAMAGES

SHALL BE IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. BUYER AND SELLER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT SELLER’S DAMAGES WOULD BE IN THE EVENT OF SUCH DEFAULT BY

BUYER, HAVE AGREED BY PLACING THEIR INITIALS BELOW THAT THE DUE

DILIGENCE PERIOD DEPOSIT, TOGETHER WITH ANY INTEREST THEREON, (PLUS THE ENTITLEMENT EXTENSION DEPOSIT (IF APPLICABLE) (“FORFEITABLE DEPOSIT”) SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER’S DAMAGES. IN THE EVENT OF AND FOR SUCH DEFAULT BY BUYER,

SELLER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AND TO

RETAIN THE FORFEITABLE DEPOSIT PLUS ALL INTEREST THEREON AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AGAINST BUYER;

PROVIDED, HOWEVER, THE FOREGOING SHAL L NOT APPLY TO NOR LIMIT SELLER’S RECOVERY AGAINST BUYER WITH RESPECT TO (A) BUYER’S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, (B) SELLER’S RIGHT TO RECOVER ATTORNEYS’ FEES AND COSTS AS PROVIDED FOR IN THIS

AGREEMENT AND/OR ( C) IN THE EVENT THAT BUYER WRONGFULLY REFUSES

TO CAUSE ESCROW HOLDER TO CANCEL THE ESCROW, IN WHICH INSTANCE

SELLER SHALL ALSO BE ENTITLED TO ALL COSTS AND EXPENSES, INCLUDING ACTUAL ATTORNEY’S FEES INCURRED BY SELLER WITH RESPECT TO THOSE

DAMAGES, IF ANY, WHICH MAY BE INCURRED BY SELLER BY REASON OF THE CLOUD ON TITLE TO THE PROPERTY WHICH MAY RESULT FROM BUYER’S WRONGFUL FAILURE TO CANCEL THE ESCROW AND THIS AGREEMENT.

SELLER AND BUYER HAVE BOTH PLACED THEIR INITIALS IN THE SPACES

BELOW TO INDICATE THAT THEY HAVE READ, UNDERSTAND, AN D AGREE TO THIS LIQUIDATED DAMAGES PROVISION.

Buyer’s Initials: ______

Seller’s Initials: ______

9.3 Rights and Remedies are Cumulative . Except as otherwise expressly provided in this Agreement, the rights and remedies of the parties are cumu lative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

9.4 Inaction Not a Waiver of Default . Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default

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or of any such rights or remedies, or deprive either such party of its right to inst itute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

10. MISCELLANEOUS.

10.1 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be delivered by either (a) personal delivery, (b) reliable courier service that provides a receipt showing date and time of delivery , including federal express , or (c) registered or certified U.S. Mail, postage prepaid, retur n receipt requested. Notices shall be addressed to the respective parties as set forth below or to such other address and to such other persons as the parties may hereafter designate by written notice to the other party hereto:

To Seller: County of San Bernardino
Real Estate Services Department
385 N. Arrowhead Avenue, 3rd Floor
San Bernardino, CA 92415

Copy to: County of San Bernardino
Department of Public Works
Solid Waste Management Division
222 W. Hospitality Lane, Second Floor
San Bernardino, CA 92415-0017

To Buyer: City of Rialto
150 S. Palm Avenue
Rialto, CA 92376
Attention: City Manager
With Copy to: City of Rialto
150 S. Palm Avenue
Rialto, CA 92376
Attention: City Attorney
Each notice shall be deemed delivered on the date delivered if by per sonal delivery or by overnight courier service, or on the date of receipt as disclosed on the return receip t if by mail. By giving to the other parties written notice as provided above, the parties to this Agreement and their respective successors and assigns shall have the right from time to time, and at any time during the term of this Agreement, to change their respective addresses.

10.2 Relationship Between Seller and Buyer. It is hereby acknowledged that the relationship between Seller and Buyer is not that of a partnership or joint venture and that Seller and Buyer shall not be deemed or construed for any purpose to be the agent of the other.

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third party legal action against a party hereto and payable under Section 3 .1 (“Inspections”) and Section 10.10 (“Real Estate Brokerage Commission”).

10.4 Successors and Assigns; Assignment. This Agreement shall bind and inure to the benefit of Seller and Buyer and their respective successors and permitted assigns. Buyer may assign Buyer’s rights under this Agreement without the prior written consent of Seller . Buyer shall not be released and discharged from any liability or obligations under this Agreement on account of such assignment.

10.5 Entire Agreement, Waivers, and Amendments . This Agreement i ncorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements between the parties with respect to all or part of the subject matter hereof.

All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the party to be charged. Any amendment or modification to this Agreement must be in writing and executed by Seller and Buyer.

10.6 Prohibited Persons and Transactions . Buyer represents to Seller that it is not a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“ OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially D esignated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governm ental action and is not and will not engage in any dealings or transactions or be otherwise associated with such persons or entities.

10.7 Computation of Time. In the event that the day on which a party is required to take any action under the terms of this Agr eement is a holiday, Saturday or Sunday, such action shall be taken on the next succeeding business day. The term “holiday” shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code.

10.8 Interpretation; Governing Law . This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. This Agreement shall be construed in accordance with the laws of the State of California, without regard to conflict of interest principles.

10.9 Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions a re not rendered impractical to perform taking into consideration the purposes of this Agreement.

10.10 Real Estate Brokerage Commission. Each party represents and warrants that, neither party has retained any brokers or finders to represent its interests in conn ection with this transaction. Except as provided above, each party agrees to indemnify and hold the other harmless from and against all liabilities, costs, damages and expenses, including, without limitation, reasonable attorneys’ fees, resulting from any claims or fees or commissions, based upon agreements by it, if any, to pay any additional broker’s commission and/or finder’s fee.

10.11 Confidentiality Obligations. As both Buyer and Seller are public entities, confidentiality obligations under this Agreement are limited and subject to applicable laws including those regarding public records.

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10.12 Execution in Counterpart . This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on both parties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart.

10.13 Exhibits. Exhibits “A ”, “B” and “ C” attached to this Agreement are incorporated herein by this reference and made a part hereof. Said Attachments are identified as follows:

Exhibit “A” Legal Description of Property
Exhibit “B” Final Order of Condemnation
Exhibit “C” Grand Deed

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IN WITNESS WHEREOF, Seller and Buyer have entered into this Agreement as of the date first set forth above.

REMINDER: SECTIONS 8 AND 9.2 NEED TO BE INITIALED.

SELLER: BUYER:

COUNTY OF SAN BERNARDINO,
a body politic and corporate

By:

James Ramos, Chairman
Board of Supervisors

Date: _____________, 2016

SIGNED AND CERTIFIED THAT A

COPY OF THIS DOCUMENT HAS BEEN

DELIVERED TO THE CHAIR OF

THE BOARD
LAURA H. WELCH,
Clerk of the Board of Supervisors

By:

Deputy

Date: _____________, 2016

APPROVED AS TO LEGAL FORM:

JEAN-RENE BASLE, County Counsel
San Bernardino County, California

By:

Robert F. Messinger,
Deputy County Counsel

Date: _________________, 2016

CITY OF RIALTO,
a California municipal corporation

By: ________________________
Deborah Robertson, Mayor

Dated: ___________, 2016

ATTEST:

________________________
Barbara McGee, City Clerk

APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLC

By: _____________________
Fred Galante, City Attorney

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ACCEPTANCE BY ESCROW HOLDER

The undersigned hereby acknowledges that it has received a fully executed copy of the foregoing Purchase and Sale Agreement and Joint Escrow Instructions and agrees to act as Escrow Holder thereunder and to be bound by and perform the terms thereof as such terms apply to Escrow Holder. The escrow number assigned for this Agreement is: _________________

GOLDEN STATE ESCROW COMPANY,
a California corporation
BOC License No. ____________

____ , 2016 By: ___

Name:

Title:

01180.0020/311715.1
EXHIBIT “A”
Legal Description of Property

01180.0020/311715.1
EXHIBIT “B”
Final Order of Condemnation

01180.0020/311715.1
EXHIBIT “C”
Grant Deed

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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is entered into as of _______________, 2016 (“Agreement Date”), by and between the CITY OF RIALTO , a California municipal corporation (“Seller”), and ARROW UNITED INVESTMENTS, LLC, a California limited liability company (“Buyer”).

R E C I T A L S
A. The County of San Bernardino (“ County”) owns that that certain real property improved with the Mid-Valley Landfill located at 2390 Alder Avenue in the City of Rialto, County of San Bernardino, State of California (“County Property”).

B. Seller has entered into a purchase and sale agreement (“ County PSA”) to acquire a portion of the County Property consisting of approximately 13.22 acres (portion of APN 1119 -241- 01, and 02) from the County as more particularly described in the legal description attached hereto as Exhibit “A” (collectively, the “Property”).

C. The Property is located adjacent and south of the Mid -Valley Landfill an d is improved with a groundwater treatment system that is monitored by the Seller under the oversi ght of the Santa Ana Region Regional Water Quality Control Board (RWQCB ), Cleanup and Abatement Order No. 98-96 (CAO 98-96).

D. Seller has entered into the County PSA primarily as an accommodation to Buyer and in reliance upon Buyer’s covenants and indemnities set forth in this Agreement.

E. Seller and Buyer desire to enter into t his Agreement to provide for Seller to sell the Property to Buyer and Buyer to pur chase the Property from Seller, on the terms and conditions set forth herein including, but not limited to, the concurrent closing of the County PSA.

1. PURCHASE AND SALE OF THE PROPERTY; EFFECTIVE DATE.

1.1 Purchase and Sale of the Property . Subject to all of the terms, conditio ns, and provisions of this Agreement, and for the consideration herein set forth, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Property.

1.2 Effective Date. This Agreement shall be deemed effective three (3) days after the later to occur of (i) execution of the County PSA by both the County and Seller and delivery of same to Seller , and (ii) the opening of the escrow under the County PSA (“ County Escrow ”).

Seller shall provide Buyer with a copy of the executed County PSA and no tify Buyer of the date of the opening of the County Escrow.

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1.3 Buyer’s Cooperation Covenant & Indemnity . As additional consideration for accommodating Buyer’s acquisition of the Property including, but not limited to, the Seller’s execution of the County PSA, Buyer covenants and agrees to fully cooperate as needed or requested by Seller in order to facilitate all the requirements under the County PSA. This covenant shall supersede any conflicting provisions in this Agreement (including any timing issues betwee n this Agreement and the County PSA) . Buyer agrees to indemnify, defend and hold harmless the Seller and its directors, officers, agents’ employees, affiliates and volunteers from and against any and all loss, cost, liability or expense (including reasonab le attorneys’ fees) arising from the County PSA and County Escrow unless solely caused by the gross negligence or willful misconduct of Seller. This indemnity shall survive termination of this Agreement.

2. AGREEMENT CONSIDERATION; PAYMENT OF CONSIDERATION.

2.1 Agreement Consideration. Buyer shall pay the following amounts as consideration for this Agreement (“Agreement Consideration”):
a. Purchase Price. The purchase price payable by Buyer to Seller for the Property is the total sum of Four Million Six Hundred Thousand Dollars ($4,600,000) (“Purchase Price”).
b. Expense Reimbursement. In addition to the Purchase Price as consideration for this Agreement, Buyer shall fully reimburse Seller for all costs incurred by Seller under the County PSA including, but not limited t o, closing the County Escrow and all attorney fees incurred by Seller in connection with the County PSA and this Agreement (“Expense Reimbursement”).

2.2 Payment of Agreement Consideration . The Agreement Consideration shall be paid as follows:
(a) Deposit. Within two (2) business days following the Effective Date of this Agreement, Buyer shall deliver to Golden State Escrow, at its office located at 1421 -1 East Cooley Drive, Colton, CA 92324, Attn: Kellie Linderman (“Escrow Holder”) an executed copy of this Agreeme nt and in Good Funds (as defined below) , the sum of Two Hundred Thirty Thousand Dollars ($230,000) (“ Deposit”). Upon Buyer’s written request to Seller, Seller shall direct the deposit amount under the County PSA and County Escrow to be invested in interest bearing account in accordance with the County PSA with any interest earned thereon credited to Buyer under this Agreement.

If this Agreement has not terminated pursuant to Section 3.4 on or before the expiration of the Due Diligence Period (as that term is defined in Section 3.4), one-half (1/2) of the Deposit (being One Hundred Fifteen Thousand Dollars ($115,000) (“ Due Diligence Deposit”), shall become nonrefundable on the day following the expiration of the Due Diligence Period, subject only to Seller’s performance of its obligations hereunder and the satisfaction of the Buyer Closing Conditions. If this Agreement has not terminated pursuant to the Section 6 on or before the expiration of the Entitlement Period (as that term is defined in Section 6), the remaining one-half (1/2) of the Deposit in the amount of One Hundred Fifteen Thousand Dollars ($115,0000) (“ Entitlement Period Deposit ”) shall become

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nonrefundable on the day following the expiration of the Entitlement Period, subject only to Seller’s performance of its obligations hereunder and the satisfaction of the Buyer Closing Conditions.

All funds deposited in Escrow shall be in “ Good Funds ” which means a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a fin ancial institution located in the State of California.
(b) Release of Deposit into County Escrow . Escrow Holder is specifically directed to promptly release the Deposit to be deposited into the County Escrow for the credit of Seller as the buyer under the Cou nty PSA. If the County PSA is terminated for any reason whereby Seller is entitled to the return of the Deposit (including any interest) from the County Escrow, such funds shall be redeposited into this Escrow and returned to Buyer pursuant to the terms of this Agreement.
(c) Credit at Closing. The Deposit shall be credited to the Agreement Consideration upon the Close of Escrow. If this Agreement has not terminated pursuant to Section 3.4 on or before the expiration of the Due Diligence Period (as that term is defined in Section 3.4), the Deposit shall become nonrefundable on the day following the expiration of the Due Diligence Period, subject only to Seller’s performance of its obligations hereunder and the satisfaction of the Buyer Closing Conditions. (d) Balance of Agreement Consideration. On the date that is two (2) days prior to the scheduled Closing Date, or such other time as is reasonably required (i) to facilitate the concurrent closing of the County Escrow, or (ii) by Escrow Holder in order to close the Escrow on the scheduled Closing Date, Buyer shall deposit the balance of the Agreement Consideration with Escrow Holder in Good Funds.
(e) Independent Consideration . Within five (5) days of the Effective Date, Buyer shall deliver to Seller the sum of One Hundr ed Dollars ($100) (“ Independent Consideration”), as consideration for Buyer’s right to purchase the Property and to terminate this Agreement prior to the expiration of the Due Diligence Period and for Seller’s execution, delivery and performance of this Agreement. The Independent Consideration is in addition to and independent of any other consideration or payment provided for in this Agreement, is not applicable to the Agreement Consideration, is non-refundable and shall be retained by Seller notwithstanding any other provision of this Agreement.

2.3 Buyer’s Right to Enter into Sale Agreement for Remainder Parcel. Buyer may enter into a purchase and sale agreement for the Remainder Property (as defined in Section 3.8) which may close concurrently with the Clos e of this Escrow (“ Remainder Parcel PSA ”). The Remainder Parcel shall be used for a recreational outdoor storage facility. Buyer shall remain solely responsible under this Agreement. However, at no cost or expense to Seller, Seller shall reasonably cooperate to facilitate the concurrent closing under the Remainder Parcel PSA with this Escrow.

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3. DUE DILIGENCE REVIEW.

3.1 Inspections. Buyer and its agents, contractors, consultants, employees, representatives, engineers, and designees (collectively, " Buyer’s Agents ”) shall have reasonable access to the Property at all reasonable times until the expiration of the Due Diligence Period and the Entitlement Period (or earlier termination of this Agreement), during normal business hours, for the purpose of conducting tests and inspections of the Property, including surveys and architectural, engineering, geotechnical and environmental inspections and tests; provided, however, any intrusive or invasive investigations shall be subject to Seller’s prior written consent.

The “Due Diligence Period ” shall mean the sooner of (i) eleven (11) month period following the Effective Date ; or (ii) ten (10) business days shorter than the Due Diligence Period under the County PSA.

Within five (5) business days after receipt by Seller of the documents from the County under the due diligence obligations in the County PSA, Seller shall provide to Buyer, copies of any studies, surveys, plans, reports, environmental reports, test results, approvals and other entitlements relating to the Property actually in Seller’s possession from County , if any. Notwithstanding anything to the contrary contained herein, Seller shall have no obligation to deliver to Buyer any documents, reports, presentations or similar items prepared for internal use by Seller o r that are protected by the attorney -client privilege or that are otherwise subject to a confidentiality agreement.

All inspections of the Property shall be performed by Buyer at Buyer’s sole cost and expense. As a condition to any such entry, inspection or testing, Buyer shall comply, and cause Buyer’s Agents to comply, with the following in accordance with the County PSA : (a) coordinate its entries with Seller and the County so as not to disturb the operation of any business on the Property, including no tification to Seller and County of the proposed date and purpose of the intended entry and submittal to Seller and County of the names and/or affiliations of the persons that will be entering the Property; (b) conduct all studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property; (c) comply with all applicable laws and governmental regulations; (d) keep the Property free and clear of all materialmen’s liens, lis pendens and other liens ar ising out of the entry and work performed by or on behalf of Buyer and Buyer’s Agents; (e) maintain or assure maintenance of workers’ compensation insurance on all persons entering the Property in the amounts required by the State of California, which shall include a waiver by the insurer of any right to subrogation against Seller and County and their respective members, officers, employees and volunteers; (f) promptly repair any and all damage to the Property caused by Buyer or Buyer’s Agents and return th e Property to its original condition following Buyer’s entry; and (g) provide to Seller and County prior to initial entry a certificate of insurance or other evidence satisfactory to Seller and County that Buyer has in force adequate liability insurance in an amount not less than Two Million Dollars ($2,000,000.00) naming Seller and County as an additional insured, and a copy of such policy upon Seller’s request .

Any insurance or self -insurance maintained by Seller and County shall be in excess of this insurance and shall not contribute with it. The insurance policy shall be kept and maintained in force during the right of entry period and so long thereafter as necessary to cover any claims of damages suffered by persons or property resulting from any acts o r omissions of Buyer and Buyer’s Agents.

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Buyer agrees to indemnify, defend and hold harmless the Seller and County and their respective directors, officers, agents’ employees, affiliates and volunteers from and against any and all loss, cost, liability or expense (including reasonable attorneys’ fees) arising from the entries of Buyer and Buyer’s Agents upon the Property or from Buyer’s failure to comply with the conditions to Buyer’s entry onto the Property provided for herein. Such indemnity shall surviv e the Close of Escrow or the termination of this Agreement for any reason. County shall be a third party beneficiary of this indemnity obligation.

All documents, reports, studies, records, financial data, computer records, memoranda, notes, analysis, and the like, provided by or through Seller to Buyer or third party reports obtained by Buyer relating to the Property in the course of Buyer’s review, including, without limitation, any environmental assessment or audit (collectively, the “ Property Documents ”) shall be treated as confidential information by Buyer and Buyer shall instruct all of its employees, agents, representatives and contractors as to the confidentiality of all such information. Buyer acknowledges that neither Seller nor County has not ma de nor makes any warranty or representation regarding the truth, accuracy or completeness of the Property Documents or the source(s) thereof. Neither Seller nor County has undertaken any independent investigation as to the truth, accuracy or completeness of the Property Documents and any Property Documents it provides to Buyer are provided solel y as an accommodation to Buyer and it is Buyer’s responsibility to verify the accuracy and veracity of the Property Documents. Seller expressly disclaims any and all liability for representations or warranties, express or implied, statements of fact and other matters contained in such information, or for omissions from the Property Documents, or in any other written or oral communications transmitted or made available to Buyer. Buyer shall rely solely upon its own investigation with respect to the Property, including, without limitation, the Property's physical, environmental and economic condition including the presence of Hazardous Materials, compliance or lack of comp liance with any law, ordinance, order, permit or regulation or any other attribute or matter relating thereto.

3.2 Survey. Buyer may obtain, at Buyer’s sole cost and expense, a survey of the Property (“Survey”). Buyer shall deliver same to Seller as soon as po ssible in order for Seller to submit same under the County PSA. Buyer shall deliver the Survey to the Title Company within forty-five (45) days of the Effective Date if Buyer wants to approve any additional title exceptions resulting from the Survey.

3.3 Natural Hazard Disclosure . Buyer and Seller hereby instruct Escrow Holder to order a natural hazard disclosure report from an affiliate of the Title Company (“Natural Hazard Service”) to examine the maps and other information specifically made available to the public by government agencies for the purposes of providing a Natural Hazard Disclosure Report for the Property with mandated natural hazard property disclosures . The written report prepared by the Natural Hazard Service regarding the results of its exami nation fully and completely discharges Seller from its disclosure obligations referred to herein, and, for the purposes of this Agreement, the provisions of Civil Code Section 1103.4 regarding the non -liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply.

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absolute judgment and discretion, determine whether the Property is acceptable to Buyer. If Buyer is not satisfied with any of the foregoing matters, Buyer may terminate this Agreement by giving written notice of termination to Seller and Escrow Holder (“Due Diligence Termination Notice”) on or before the last day of the Due Diligence Period. In the event that Buyer fails to deliver Buyer’s Due Diligence Termination Notice on or before the expiration of the Due Diligence Period, Buyer shall have conclusively been deemed to have approved its due diligence investigation of the Property and waived its right to terminate this Agreement pursuant to this Section 3.4. If Buyer timely elect s to terminate this Agreement pursuant to this Section 3.4, then upon the concurrent termination of the County PSA and County Escrow and the release of the Deposit from the County Escrow, the Deposit shall be returned to Buyer and the parties shall have no further obligations hereunder except for obligations that expressly s urvive the termination hereof.

3.5 Review of Title . Within five (5) business days after Seller’s receipt of the preliminary title report for the Property under the County PSA (“ County Title Report ”), Seller shall provide to Buyer the copy of the County Title Report and the underlying title documents disclosed therein (collectively, the “ Title Report ”), issued by First American Title Insurance Company (“Title Company”). On or before the date that is twenty (20) days after receipt of the Title Report (“Buyer’s Title Review Period”), Buyer shall notify Seller in writing (“Buyer’s Title Notice”) of any objections Buyer may have to title exceptions or other matters contained in the Preliminary Title Report (“Title Objections”). If Buyer does not give such notice by the expiration of Buyer’s Title Review Period, such failure shall conclusively be deemed to be Buyer’s approval of those matters. If Buyer does timely provide Buyer’s Title Notice with Title Obje ctions, Seller shall have thirty (30) days after receipt thereof to notify Buyer that Seller (a) will endeavor to cause or (b) elects not to cause any or all of the Title Objections disclosed therein to be removed or insured over by the Title Company in a manner reasonably satisfactory to Buyer. Seller’s failure to notify Buyer within such thirty (30) day period as to any Title Objections that Seller is willing to endeavor to cure or cause to be insured over shall be deemed an election by Seller not to pursue such endeavor to remove or have the Title Company insure over such Title Objections. If Seller notifies or is deemed to have notified Buyer that Seller shall not endeavor to remove nor have the Title Company insure over any or all of the Title Objection s, Buyer shall have five (5) days after the expiration of Seller’s ten (10) day period to respond to either (a) terminate this Agreement or (b) waive such Title Objections and proceed to Closing, without any reduction in the Purchase Price on account of su ch Title Objections. If Buyer does not give notice within said period, Buyer shall be deemed to have elected to waive the Title Objections pursuant to clause (b).

If Buyer receives any supplement to the Title Report disclosing any new materially adverse title matters not disclosed to Buyer prior to the expiration of the Buyer’s Title Review Period , the foregoing right of review and approval shall also apply to said new matter; provided, however, the period for Buyer to deliver Buyer’s Title Notice with res pect to such new title matter shall be the later of (i) expiration of the Buyer’s Title Review Period, or (ii) five (5) days from receipt of the supplemental title report and the underlying document(s) referenced therein; provided, that Buyer shall not hav e the right under this paragraph to make any objections with respect to any matter which would be disclosed by an accurate survey of the Property since Buyer is to satisfy itself as to all matters which would be disclosed by the Survey being delivered to the Title Company within the time period specified in Section 3.2.

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Notwithstanding any of the foregoing time periods, the parties shall cooperate so that timely responses can be provided by Seller to the County under the County PSA.

3.6 State of California Department of Transportation Right -of-Way Amendment.

Buyer acknowledges that the County PSA provides that there is a Final Order of Condemnation to acquire a sixty-foot wide portion of property over APN 1119 -241-01 for drainage purposes was filed on or about October 18, 2007, in favor of the State of California Department of Transportation (Caltrans) and is attached hereto as Exhibit “B” (“FOC”). The FOC conveyed this sixty-foot wide portion of property in fee instead of an easement and the Seller agrees to co ntinue to work with Caltrans to amend the FOC to correct the easement . Once corrected, the amendment to the FO C (“FOC Amendment ”) will be recorded in the Official Re cords of San Bernardino County which will (i) convey the underlying fee portion of this Property to Buyer, and (ii) a sixty- foot wide drainage easement will immediately thereafter be conveyed to the City of Rialto for continued maintenance (“City Drainage Easement ”). The Close of E scrow is contingent on the completion and recordation of the FOC Amendment followed by the City Drainage Easement.

4. SITE DEVELOPMENT DISCLOSURE. Buyer acknowledges that it is aware of the following disclosure as set forth in the County PSA:
(a) Landfill. The Property is located just south of the Mid -Valley Landfill Sanitary (“Landfill”), immediately south of Casmalia Street in Rialto, California . The County is mandated by the RWQCB to comply with provisions of California Code of Regulations (CCR), Title 27, Chapter 3, Subchapter 3, Article 1, Sections 20380 and 20430.

As a result, the County has installed a groundwater treatment system that extends on to the Property to mitigate volatile organic compound impacts in groundwater. Within the boundaries of the property, the County’s groundwater treatment system includes 9 groundwater reinjection wells that run in a generally east -west alignment ne ar the northern portion of the Property. Each reinjection well is housed within a 2.5’ x 4’ vault at the ground surface, and each well is connected to a second 2.5’ x 4’water -delivery control vault. The reinjection well vaults are approximately 200 feet apart, and the well housing vault and water-delivery control vaults are approximately 15 feet apart from one another. The 18 vaults (total) are interconnected by water conveyance pipeli ne and electrical wire and conduit.

County has also installed two groun dwater monitoring wells on the P roperty.

Monitoring well N -16 A/B/C was constructed near the southeastern limits of the property; well F-33A/B is located near the southwestern limits of the P roperty. Each well is housed within an approximately 2’ x 2’ at grade cristy box.
(b) Reservation of Easement. Buyer acknowledges and agrees that, under the County PSA, County will reserve a permanent easement (“Reservation of Easement”) for ingress, egress, construction, reconstruction, installation, replacement, operation, sampling, maintenance, and monitoring of extraction and reinjection wells and a pipeline conveyance system and appurtenances and incidents thereto over, under and across the Prop erty as set forth in the Grant Deed under the County PSA (“ County Grant Deed ”) to allow County perpetual access to the groundwater system improvements for the purpose of complying

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with CAO 98 -96 and any subsequent orders, directives or other requirements i ssued by a court, regulatory agency or other governmental authority of competent jurisdiction. (c) Post-Closing Covenant . Subsequent to the Close of the County Escrow , Buyer agrees to provide to County, no less than nine (9) months prior to Buyer’s intended construction commencement date, Buyer’s development plans ( “Plans”) and a written request to Seller (“Request”) to re-profile the necessary groundwater extraction wells and ground water reinjection wells identified in the Reservation of Easement to match gra de in conformance with Buyer’s development plans (“Work”). The Plans shall contain sufficient detail and data to enable Seller to perform the Work. Seller will complete the Work at its sole cost and expense within nine (9) months of receipt from Buyer of t he Plans and the Request. This Section 4.3 shall survive the Close of Escrow (as defined below) and shall not merge with the County Grant Deed recorded in connection with this transaction.

5. ESCROW.

5.1 Opening of Escrow; Closing Date . Closing of the sale of the Property shall take place through an escrow (“ Escrow”) to be established with the Escrow Holder referred to in Section 2.2(a). Escrow shall be deemed open upon delivery of a fully executed copy of this Agreement to Escrow Holder. Upon receipt of a fully e xecuted copy of this Agreement, Escrow Holder shall execute the Escrow Holder’s acceptance attached hereto and notify Seller and Buyer of the escrow number it assigns to the Escrow. The Close of Escrow shall occur as soon as reasonably practicable followin g the expiration of the Due Diligence Period, but in no event later than the date that is thirty (30) days following (i) the expiration of the Entitlement Period (as defined in Section 6), (ii) the recordation of the FOC Amendment and the City Drainage Easement, and (iii) the concurrent closing of the County Escrow, whichever shall occur last (“Closing Date”).

The terms “Close of Escrow ” and/or the “ Closing” shall mean the consummation of the transactions contemplated by this Agreement to occur through the Escrow including Seller’s conveyance of the Property to Buyer.

5.3 Deliveries by Seller. On or before 12:00 noon on the second (2 nd) business da y preceding the scheduled Closing Date, Seller shall deliver to Escrow Holder : (i) the Grant Deed in the fo rm attached hereto as Exhibit “ C”, duly executed and acknowledged by Seller, (ii) a Certificate of Non -Foreign Status executed by Seller, (iii) an or iginal of the Closing Statement described in Section 5 .5, duly executed by Seller, (iv) Subdivision Documents (as defined in Section 6) , if applicable; and (v) all other documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.

5.4 Deliveries by Buyer. On or before 12:00 noon on the second (2 nd) business day preceding the scheduled Closing Date, Buyer shall deliver to Escrow Holder: (i) the balance of the Agreement Consideration, (ii) the escrow costs and prorations for which Buyer is responsible, (iii)

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an original of the Closing Statement described in Section 5 .5, duly executed by Buyer, and (iv) all other sums and documents reasonably required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement.

5.5 Closing Statement. No later than three (3) business days prior to the Closing Date, Escrow Holder shall prepare for approval by Buyer and Seller a closing statement (“ Closing Statement”) on Escrow Holder’s standard form indicating, among other things, Escrow Holder’s estimate of all closing costs and prorations made pursuant to this Agreement. Escrow shall obtain a copy of the closing statement for the County Escrow and charge all costs allocated to Seller as buyer thereunder which shall be charged to Buyer under this Escrow.

5.6 Closing, Recording and Disbursements. On the Closing Date, and provided all of the Seller Conditions to Closing and Buyer Conditions to Closing set forth in Sections 5.10.1 and

4.10.2 of this Agreement have been satisfied o r waived in writing by the appropriate party, Escrow Holder shall take the following actions:
(a) Recording. Escrow Holder shall cause the Grant Deed together with other documents to be recorded under this Agreement, including but not limited to, the FOC Amendment, the City Drainage Easement, Subdivision Documents, etc. to be recorded in the Official Records of San Bernardino County, California immediately following the recordation of the County Grant Deed.
(b) Delivery of Documents and Funds. Escrow Holder shall deliver to Buyer all of the items listed in Section 4.3 above which were delivered by Seller to Escrow, except that Escrow Holder shall be instructed t o record the original Grant Deed in the Official Records upon Close of Escrow and concurrent closing of th e County Escrow . Escrow Holder shall deliver the Purchase Price into the County Escrow, less the Deposit which has already been delivered to into the County Escrow. After Close of Escrow, Escrow Holder shall deliver to Seller with one (1) duplicate original of all of the items listed in Section 5.4 above on the Close of Escrow and a conformed copy of the Grant Deed.

5.7 Taxes. Real property taxes will be prorated between Seller and Buyer in Escrow to the same extent as proration occurs in the County Escrow with Buyer responsible for the payment of any amounts due or assessed against Seller in the County PSA. If current taxes have not yet been paid as of the Closing Date, then at Closing the County shall have paid same in the County Escrow and County is entitled to a refund under the County PSA, Buyer shall cooperate to ensure such amount is paid to County. Buyer understands and agrees that, under the County PSA, the County has retained the right, following close of escrow, to apply to the County Tax Collector fo r refund pursuant to Revenue and Taxation Code Section 5096.7.

5.8 Payment of Costs. Buyer shall pay for the premium for the an ALTA non-extended owner’s title policy referred to in Section 5.10.2(b), with the cost of any endorsements or extended coverage to be as set forth therein. Any recording fees for the documents to be recorded under this Agreement and th e escrow fee of Escrow Holder shall be paid by Buyer. All other costs and expenses of Escrow of any kind shall be paid by Buyer . Buyer shall also be resp onsible to reimburse Seller for its attorneys’ fees and costs as part of the Expense Reimbursement specified in Section 2.1.b.

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5.9 Information Report . Escrow Holder shall file and Seller and Buyer agree to cooperate with Escrow Holder and with each other in co mpleting any report (“ Information Report”) and/or other information required to be delivered to the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction contemplated by this Agreement, inclu ding, without limitation, Internal Revenue Service Form 1099-B as such may be hereinafter modified or amended by the Internal Revenue Service, or as may be required pursuant to any regulation now or hereinafter promulgated by the Treasury Department with respect thereto. Seller and Buyer also agree that Seller and Buyer, their respective employees and attorneys, and Escrow Holder and its employees may disclose to the Internal Revenue Service, whether pursuant to such Information Report or otherwise, any inf ormation regarding this Agreement or the transaction contemplated herein as such party reasonably deems to be required to be disclosed to the Internal Revenue Service by such party pursuant to Internal Revenue Code Section 6045(e), and further agree that n either Seller nor Buyer shall seek to hold any such party liable for the disclosure to the Internal Revenue Service of any such information.

5.10 Conditions to Close of Escrow.

5.10.1 Conditions to Seller’s Obligations . In addition to any other condition set forth in this Agreement in favor of Seller, Seller shall have the right to condition its obligation to convey the Property to Buyer and close the Escrow upon the satisfaction, or written waiver by Seller, of each of the following conditions precedent on the Closing Date or such earlier time as provided for herein ( collectively, the “ Seller Conditions to Closing”):
(a) Delivery of Document and Funds . Buyer shall have timely executed and deposited into Escrow all escrow and closing documents required to be submitte d by Buyer in order to accomplish the close of Escrow for the Property. Buyer shall have deposited with Escrow Holder the Agreement Consideration and all escrow and closing costs for this Agreement and all such amounts required to be paid by Seller as buye r under the County PSA and County Escrow.
(b) Representations and Warranties . All representations and warranties made by Buyer in this Agreement are true and corr ect in all material respects as of the Closing as though made at that time.
(c) No Default . Buyer sha ll not be in material default of any of its obligations under this Agreement and no event shall have occurred that would constitute a default with the giving of notice or the passage of time. (d) Concurrent Closing of the County Escrow. The County Escrow must close concurrently with this Agreement with all documents to be recorded under the County Escrow to be recorded immediately preceding the recording of documents under this Escrow.

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waiver by Buyer, of each of the following conditions precedent on the Closing Date or such earlier time as provided for herein (collectively, the “Buyer Conditions to Closing”):
(a) Delivery of Documents. Seller shall have executed and deposited into Escrow the Grant Deed and any other escrow and closing documents required to be submitted by Seller in order to accomplish the close of Escrow for the Property. (b) Title Policy . The Title Company is unconditionally and irrevocably committed to issue to Buyer at Closing a n ALTA non extended coverage owner’s title policy, or, upon Buyer’s r equest, an ALTA extended coverage owner’s policy of title insurance (provided Buyer shall be responsible for any survey costs associated therewith and Buyer must deliver an ALTA survey acceptable to the Title Company for the issuance of such extended coverage at least seven (7) business days prior to the Closing Date and Buyer shall be responsible for the additional cost of the extended coverage ), insuring Buyer’s title to the Property in the amount of the Purchase Price, subject only to the following (collectively, the “Approved Title Exceptions”): (i) the standard exceptions and exclusions from coverage contained in such form of the policy; (ii) real estate taxes not yet due and payable; (iii) matters created by, through or under Buyer; (iv) items disclosed by the Survey and Title Report (including any supplements) and approved or deemed approved by Buyer pursuant to the title review provisions in Section 3.5, or, if Buyer fails to obtain the Survey, items which would be disclosed by an accurate, updated survey of the Property or a physical inspection of the Property; (v) Reservation of Easement; (vi) the FOC Amendment and City Drainage Easement; and (vii) any Title Objections that neither Seller nor the Title Company has agreed to remove from title or insur e over (“ Title Policy”). The issuance of an ALTA extended coverage policy shall not be a condition precedent to Buyer’s obligation to close the Escrow, and Buyer shall not object to the Closing based upon an inability to obtain, or any delays in obtaining, such coverage. In addition, and without limiting the foregoing, the issuance of any particular title endorsements requested by Buyer, at Buyer’s sole cost and expense, shall not be a condition precedent to Buyer’s obligation to close this Escrow and Buyer acknowledges that Buyer is solely responsible for ascertaining the availability of any such endorsements prior to the end of the Due Diligence Period. If endorsements are required to cure defects in title and Buyer has requested such endorsements as a mea ns of curing such title defects, then Buyer shall pay for such endorsements (c) Condition. At Close of Escrow, possession of the Property shall be delivered to Buyer with all tenants of the Property having vacated their leased spaces clear of all furniture, trash and debris.
(d) Representations and Warranties . All representations and warranties made by Seller in this Agreement are true and correct in all material respects as of the Closing as though made at that time.
(e) No Default . Seller shall not be in material de fault of any of its obligations under this Agreement (and shall not have received notice of a default hereunder which has not been cured).

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5.10.3. Satisfaction of Conditions . Where satisfaction of any of the foregoing conditions requires action by Buyer or Seller, each party shall use its diligent efforts, in good faith, and at its own cost, to satisfy such condition.

5.10.4. Waiver. Seller may at any time or times, at its election, waive any of the Seller Conditions to Closing set forth in Section 5.10.1 above to its obli gations hereunder, but any such waiver shall be effective only if contained in writing signed by Seller and delivered to Buyer. Buyer may at any time or times, at its election, waive any of the Buyer Conditions to Closing set forth in Section 5.10.2 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by Buyer and delivered to Seller.

5.10.5. Termination. In the event each of the Seller Conditions to Closing set forth in Section 5.10.1 is not fulfilled on the Closing Date or such earlier time period as provided for herein or waived by Seller pursuant to Section 5.10.4, and provided Seller is not in default of this Agreement, Seller may at its option terminate this Agreement and the Escrow opened hereunder. In the event that each of the Buyer Conditions to Closing set forth in Section 5.10.2 is not fulfilled on the Closing Date or such earlier time period as provided for herein or waived by Buyer pursuant to Section 5.10.4, and provided Buyer is not in defau lt of this Agreement, Buyer may at its option terminate this Agreement and the Escrow opened hereunder or to pursue all available remedies including but not limited to an action for specific performance. No termination under this Agreement shall release ei ther party then in default from liability for such default except to the extent of the liquidated damage provision in Section 9.2. In the event this Agreement is terminated, all documents and funds delivered by Seller to Buyer or Escrow Holder shall be ret urned immediately to Seller and, subject to Seller’s retention of the Deposit in accordance with Section 9.2 in the event of a Buyer default, all documents and funds delivered by Buyer to Seller or Escrow Holder shall be returned immediately to Buyer.

6. PROCESSING OF ENTITLEMENTS.

6.1. Buyer’s Obligation to Process Entitlements. During Entitlement Period (as defined below), Buyer shall promptly submit and diligently prosecute entitlement applications to the City for its development of a heavy metal recycling cen ter. If Buyer breaches this obligation, Seller shall have the right, but not the obligation, to terminate this Agreement upon written notice to Buyer.

6.2. Entitlements. Seller covenants and agrees that Seller will reasonably cooperate with Buyer in connection with the processing by Buyer of the Entitlements (defined below) deemed necessary by Buyer for the development of the Property during Escrow. Seller acknowledges that such cooperation shall include whatever actions may be reasonably necessary or helpful t o enable Buyer to p rocess its Entitlements. Such E ntitlements to be processed by Buyer shall include as applicable, without limitation, the processing of an amendment to the general plan covering the Property, zone change, a tentative subdivision map, a f inal subdivision map, an environmental impact report, associated development permits and related permits, agreements and approvals requested from the City of Rialto or any other governmental agency having jurisdiction over the Property as Buyer may determine to be necessary or helpful to enable Buyer to develop the Property

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in accordance with its development plans and in a manner permitting construction and operation on the Property consistent with Buyer’s development and use plans (collectively "Entitlements"). Such cooperation shall include facilitating Buyer in entering into development agreements, investigating public financing and forming special improvement districts, executing, as may be requested by the City of Rialto or any other governmental agency having jurisdiction over the Property, applications, permits or approvals required for the submittal of the Entitlements and, if applicable, executing the final map, if requested by Buyer, and providing Buyer and Buyer's agents, employees and independent contractors access to the Property to perform any investigations or tests necessary for the processing of such Entitlements. The parties acknowledge that the intent of this provision is that Seller will cooperate with Buyer and participate in such meetings if the City of Rialto or other governmental agencies require the owner of the Property to be in attendance at such meetings. However, notwithstanding any to the contrary in this Agreement, Seller which is the City is not in any way waiving its discretion ary authority. To the extent such attendance is required, Buyer will use reasonable efforts to provide Seller with advance notice and to schedule such meetings at a time which is reasonably acceptable to Seller. Upon submittal of any such applications, per mits, deeds or maps to Seller, Seller shall, no later than fifteen (15) days after delivery of such documents, deliver the same to Buyer. Any subdivision docume nts finalized as an Entitlement shall be recorded concurrently with Close of Escrow (“Subdivision Documents”).

6.3. Entitlement Period. Buyer shall in good faith diligently make all reasonable efforts to obtain Entitlements within the eleven (11) month period following the Opening of Escrow, as such period may be extended for an additional six (6) months by Buyer pursuant to Section 6.4 (“Entitlement Period”). Notwithstanding any other provision of this Agreement, if at the end of the 17th month following the Opening of Escrow, the Entitlements have been issued but the statute of limitations for challenge of any of such Entitlements has not run, the “Entitlement Period” shall, at the written election of the Buyer, be extended for an additional ninety (90) days. If Buyer is not otherwise in default or in breach of this Agreement, if Buyer should fail to obt ain such Entitlements within the Entitlement Period for any reason or if such Entitlements are issued but are not final by the end of such Entitlement Period, Buyer, at its option, may: (i) cancel Escrow and receive a full refund of Entitlement Period Depo sit together with any accrued interest thereon, or (ii) extend the Entitlement Period in accordance with Section 6.4 below.

6.4. Extension of Entitlement Period. The Buyer may extend the Entitlement Period for an additional six (6) month period after the initia l twelve month period (to a date that is eighteen months (18) months following the Opening of Escrow) in exchange for the Buyer’s one -time payment of Two Hundred Thirty Thousand Dollars ($230,000) (“ Entitlement Extension Deposit”) which amount will be paid directly to Seller and shall be deemed added to the Deposit in the Escrow. If Buyer elects to extend the Entitlement Period for the additional six (6) month period, Buyer shall deliver written notice of the exercise of the extension (“ Extension Exercise N otice”) together with the Entitlement Extension Deposit paid directly to Seller (with a copy of the Extension Exercise Notice to Escrow Holder) prior to the last day of original 11-month Entitlement Period and such Extension Exercise Deposit will be non -refundable, but shall be applied toward the Purchase Price.

6.5. Subdivision of Property. During the Entitlement Period, Buyer shall commence and Seller shall cooperate with the process to subdivide the Property into two (2) legal parcels: (i) the easterly 6 a cres as a parcel (“ Primary Parcel”); and (ii) the remaining 7.22 acres as a parcel

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(“Remainder Parcel ”). Documents evidencing the subdivision shall be recorded at Close of Escrow (“ Subdivision Documents ”). Buyer shall cooperate with Seller with respect to the subdivision as well as any required amendment to this Agreement and the documents to be recorded at the Closing. Buyer shall reimburse Seller for the costs of the subdivision including any amounts required to be paid by Seller to the County for same under the County PSA.

7. REPRESENTATIONS AND WARRANTIES.

7.1 Seller’s Representations and Warranties . Seller hereby makes the following representations and warranties to Buyer, each of which is material and relied upon by Buyer in making its determination to enter into this Agreement:
(a) Seller’s execution, delivery and performance of its oblig ations under this Agreement does not constitute a default or a breach under any contract, agreement or order to which Seller is a party or by which it is bound.
(b) To the best of Seller’s actual knowledge without any duty of investigation or inquiry, and solely based on the information provided by County under the County PSA, there are no pending, actions, suits, writs, injunctions, decrees, legal proceedings or governmental investigations against the Property.
(c) Except as disclosed to Seller in accordance with the County PSA , Seller has not received any notices and has no actual knowledge, without any duty if investigation or inquiry and solely based on the information provided by Cou nty under the County PSA , of any violation of any laws, ordinances, rules, regulations or requirements of any governmental agency, body or subdivision affecting or relating to the Property.

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8. AS-IS SALE; RELEASE OF SELLER AS TO PROPERTY CONDITION.

Buyer acknowledges that it will be given an adequate op portunity to review and inspect all aspects of the Property during the Due Diligence Period . Since Seller is only acting as an accommodator to Buyer’s acquisition of the Property, Seller makes no representation or warranty of any kind as to the physical or environmental condition of the Property or in connection with an y matter, report or information relating to the condition of the Property, its value, fitness, use, zoning, entitlements, the existence of Hazardous Materials thereon, moratoriums, economic feasibility, developability or any other matter relating to Buyer’s proposed use or development of the Property.

Buyer shall, upon the Close of Escrow, be deemed to have disclaimed and waived any and all objections to the physical and environmental characteristics and conditions of the Property, including, without limita tion, any Hazardous Materials located thereon and the condition of title thereto, whether or not such conditions would be disclosed by reasonable and diligent inspection.

Buyer acknowledges and agrees that the purchase of the Property will be on the basis of Buyer’s own investigation of the physical and environmental condition of the Property, including subsurface conditions, and Buyer’s investigation of the status of zoning, maps and all other matters relating to entitlements. The foregoing disclaimers and waivers include, without limitation, topography, climate, air, water rights, utilities, present and future zoning, governmental restrictions, entitlement rights and obligations, and governmental conditions or development, soil, subsoil, environmental contamination, the purpose to which the property is suited, drainage, access to public roads, proposed routes or roads or extensions thereof or the availability of governmental permits or approvals of any kind. Buyer agrees that Seller shall have no responsibi lity for any patent or latent defect or physical or environmental condition of the Property, whether or not known or discovered, and Buyer accepts all such responsibility. The Property is being transferred and sold “AS -IS,” “WHERE-IS,” “WITH ALL FAULTS” wi thout representation or warranty expressed or implied by Seller, by operation of law, or otherwise except as otherwise expressly provided in this Agreement.

Seller expressly disclaims, which Buyer hereby acknowledges and accepts, any implied warranty of condition, habitability, merchantability, or fitness for a particular purpose or use.

Except for claims for a breach of the representations and warranties of Seller provided in this Agreement, Buyer for itself and on behalf of each of its successors (collec tively, the “Releasors”) by this general release of known and unknown claims (this “ Release”) hereby irrevocably and unconditionally release and forever discharge Seller, County and their respective officers, officials, employees, agents, and representativ es (collectively, the “ Releasees”) or any of them, from and against any and all claims, damages, losses, costs, liabilities, fees or expenses, of any kind or nature whatsoever, whether known or unknown, suspected or unsuspected, fixed or contingent, liquidated or unliquidated, which any of the Releasors now have, own, hold, or claim to have had, owned, or held, against any of the Releasees arising from, based upon or related to, whether directly or indirectly any facts, matters, circumstances, conditions or defects (whether patent or latent) of all or any kinds, related to, arising from, or based upon, whether directly or indirectly, the Property, including without limitation, the physical condition and quality of t he Property or the presence of Hazardous M aterials in, on, about or under the Property. Buyer acknowledges that it is assuming the risk of such unknown and unanticipated claims and agree s that this release applies thereto, and expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows:

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“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT

TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE

MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
Buyer’s Initials: ____________
As used in this Agreement, the following terms shall have the meaning ascribed below:
“Environmental Law ” shall mean all applicable past, present or future federal, state and local statutes, regulations, directives, ordinances, and rules, which pertain to environmental matters, contamination of any type whatsoever, or health and safety matters, as such have been amended, modified or supplemented from time to time (including any present and future amendments thereto and re-authorizations thereof), including, without limitation, those relating to: (a) the manufacture, processing, distribution, presence, release, generation, use, handling, assessment, investigation, study, monitoring, removal, remediation, cleanup, treat ment, storage, transportation or disposal of Hazardous Materials; (b) air, soil, surface, subsurface, surface water and groundwater; (c) the operation and closure of underground storage tanks; (d) health and safety of employees and other persons; and (e) n otification and record keeping requirements relating to the foregoing. Without limiting the above, Environmental Laws also include the following: (a) the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), as amended (“CERCLA”); (b) the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. §§6901 et seq.), as amended (“RCRA”); (c) the Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. §§ 11001 et seq.), as amended; (iv) the Clean Air Act (42 U.S.C. §§ 7401 et seq.), as amended; (d) the Clean Water Act (33 U.S.C. §§1251 et seq.), as amended; (e) the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), as amended; (f) the Hazardous Materials Transport ation Act (49 U.S.C. §§ 1801 et seq.), as amended; (g) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §§ 136 et seq.), as amended; (h) the Federal Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.), as amended; (i) the Federal Radon and Indoor Air Quality Research Act (42 U.S.C. §§ 7401 et seq.); (j) the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), as amended; and (k) any state, county, municipal or local statutes, laws or ordinances similar or analogous to (including co unterparts of) any of the statutes listed above.
“Hazardous Material(s) ” includes, without limitation, any hazardous or toxic material, substance, irritant, chemical, or waste, including without limitation (a) any material defined, classified, designated, listed or otherwise considered under any Environmental Law, including, without limitation, as defined in California Health & Safety Code Section 25260, as a “hazardous waste,” “hazardous substance,” “hazardous material,” “extremely hazardous waste,” “acut ely hazardous waste,” “radioactive waste,” “biohazardous waste,” “pollutant,” “toxic pollutant,” “contaminant,” “restricted hazardous waste,” “infectious waste,” “toxic substance,” or any other term or expression intended to define, list, regulate or class ify substances by reason of properties harmful to health, safety or the indoor or outdoor environment, (b) any material, substance or waste which is toxic, ignitable, corrosive, reactive, explosive, flammable, infectious, radioactive, carcinogenic or mutagenic, and which is or becomes regulated by any local governmental authority,

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any agency of the State of California or any agency of the United States Government, (c) asbestos, and asbestos containing material, (d) oil, petroleum, petroleum based products a nd petroleum additives and derived substances, (e) urea formaldehyde foam insulation, (f) polychlorinated biphenyls (PCBs), (g) freon and other chlorofluorocarbons, (h) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources, (i) mold, fungi, viruses or bacterial matter, and (j) lead-based paint.

9. DEFAULTS.

9.2), or to obtain any other rem edy consistent with the purpose of this Agreement; provided, however, that notwithstanding anything in the foregoing to the contrary, in no event shall Buyer be entitled to obtain monetary damages of any kind from Seller, including but not limited to for economic loss, lost profits, or any other economic or consequential damages of any kind.

9.2 Deposit; Liquidated Damages Remedy. The Deposit delivered to Seller by Buyer in accordance with Section 2.2 of this Agreement shall constitute security for the perform ance of the obligations of Buyer to be performed pursuant to this Agreement and its retention by Seller as liquidated damages in accordance with this Section 9.2 in the event Escrow does not close as a result of a default by Buyer under this Agreement.

LIQUIDATED DAMAGES. IF THE CLOSE OF ESCROW FOR THE PROPERTY DOES

NOT OCCUR BECAUSE OF A DEFAULT OF BUYER UNDER THIS AGREEMENT,

THEN AND IN SUCH EVENT, BUYER AND SELLER AGREE THAT SELLER WILL

INCUR DAMAGES BY REASON OF SUCH DEFAULT BY BUYER, WHICH DAMAGES

SHALL BE IMPRACTICAL AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN. BUYER AND SELLER, IN A REASONABLE EFFORT TO ASCERTAIN WHAT SELLER’S DAMAGES WOULD BE IN THE EVENT OF SUCH DEFAULT BY

BUYER, HAVE AGREED BY PLACING THEIR INITIALS BELOW THAT THE DUE

DILIGENCE PERIOD DEPOSIT, TOGETHER WITH ANY INTEREST THEREON, (PLUS THE ENTITLEMENT EXTENSION DEPOSIT (IF APPLICABLE)) (“FORFEITABLE DEPOSIT”) SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER’S DAMAGES. IN THE EVENT OF AND FOR SUCH DEFAULT BY BUYER,

SELLER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AND TO

RETAIN THE FORFEITABLE DEPOSIT PLUS A NY INTEREST THEREON AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AGAINST BUYER;

PROVIDED, HOWEVER, THE FOREGOING SHALL NOT APPLY TO NOR LIMIT SELLER’S RECOVERY AGAINST BUYER WITH RESPECT TO (A) ALL OF BUYER’S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, (B) SELLER’S RIGHT TO RECOVER ATTORNEYS’ FEES AND COSTS AS PROVIDED FOR IN THIS

AGREEMENT AND/OR ( C) IN THE EVENT THAT BUYER WRONGFULLY REFUSES

TO CAUSE ESCROW HOLDER TO CANCEL THE ESCROW, IN WHICH INSTANCE

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SELLER SHALL ALSO BE ENTITLED TO ALL COSTS AND EXPENSES, INCLUDING ACTUAL ATTORNEY’S FEES INCURRED BY SELLER WITH RESPECT TO THOSE

DAMAGES, IF ANY, WHICH MAY BE INCURRED BY SELLER BY REASON OF TH E CLOUD ON TITLE TO THE PROPERTY WHICH MAY RESULT FROM BUYER’S WRONGFUL FAILURE TO CANCEL THE ESCROW AND THIS AGREEMENT.

SELLER AND BUYER HAVE BOTH PLACED THEIR INITIALS IN THE SPACES

BELOW TO INDICATE THAT THEY HAVE READ, UNDERSTAND, AND AGREE TO THIS LIQUIDATED DAMAGES PROVISION.

Buyer’s Initials: ______

Seller’s Initials: ______

9.3 Rights and Remedies are Cumulative . Except as otherwise expressly provided in this Agreement, the rights and remedies of the parties are cumulative, and the exe rcise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

9.4 Inaction Not a Waiver of De fault. Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

10. MISCELLANEOUS.

10.1 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writin g and shall be delivered by either (a) personal delivery, (b) reliable courier service that provides a receipt showing date and time of delivery , including federal express , or (c) registered or certified U.S. Mail, postage prepaid, return receipt requested. Notices shall be addressed to the respective parties as set forth below or to such other address and to such other persons as the parties may hereafter designate by written notice to the other party hereto:

To Buyer:

Arrow United Investment, LLC.
18472 E. Colima Road Suite 205
Rowland Heights, CA 91748
Attn: ________________

To Seller: City of Rialto
150 S. Palm Avenue
Rialto, CA 92376
Attention: City Manager

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With Copy to: City of Rialto
150 S. Palm Avenue
Rialto, CA 92376
Attention: City Attorney
Each notice shall be deemed delivered on the date delivered if by personal delivery or by overnight courier service, or on the date of receipt as disclosed on the return receip t if by mail. By giving to the other parties written notice as provided above, th e parties to this Agreement and their respective successors and assigns shall have the right from time to time, and at any time during the term of this Agreement, to change their respective addresses.

10.2 Relationship Between Seller and Buyer. It is hereby ack nowledged that the relationship between Seller and Buyer is not that of a partnership or joint venture and that Seller and Buyer shall not be deemed or construed for any purpose to be the agent of the other.

10.3 Attorneys’ Fees. If any legal action is institu ted to enforce or declare any party’s rights hereunder, each party, including the prevailing party, must bear its own costs and attorneys’ fees. This subsection shall not apply to those costs and attorneys’ fees directly arising from any third party legal action against a party hereto and payable under Section 3 .1 (“Inspections”) and Section 10 .10 (“Real Estate Brokerage Commission”) as well as the obligation to reimburse Seller under Section 1.3.

10.4 Successors and Assigns; Assignment. This Agreement shall bin d and inure to the benefit of Seller and Buyer and their respective successors and permitted assigns. Buyer may assign Buyer’s rights under this Agreement to a Buyer Affiliate without the prior written consent of Seller; provided, however, that Buyer must provide written notice to Seller and Escrow Holder five (5) business days prior to Closing. In the event Buyer assigns its rights under this Agreement to a Buyer Affiliate as provided in this Section 10.4, Buyer and such assignee shall execute and deliver an assignment of this Agreement in a form approved by Seller. Any subsequent assignment may be made only with the prior written consent of Seller. Any assignment of this Agreement in violation of the foregoing provisions shall be null and void. For purpose s of this Agreement, “Buyer Affiliate” means any entity that is controlled by Buyer (as a manager, member, general partner, or other similar capacity) and in which Buyer owns a substantial economic interest. Buyer shall not be released and discharged from any liability or obligations under this Agreement on account of such assignment.

10.5 Entire Agreement, Waivers, and Amendments . This Agreement incorporates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements between the parties with respect to all or part of the subject matter hereof.

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Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not engage in any dealings or transactions or be otherwise associated with such persons or entities.

10.7 Computation of Time. In the event that the day on which a party is required to take any action under the terms of this Agreement is a holiday, Saturday or Sunday, such action shall be taken on the next succeeding business day. The term “holiday” shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code.

10.8 Interpretation; Governing Law . This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto but also in accordance with the intent specified in Section 1.3 that Seller is acting only as an accommodator for the sale of the Property to Buyer and should not be liable for any costs or expenses involved with the acquisition of the Property under the County PSA. This Agreement shall be construed in accordance with the laws of the State of California, without regard to conflict of interest principles.

10.9 Severability. If any term, provision, covenant, or condition of this Agreement is held by a court of competent juris diction to be invalid, void, or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement.

10.10 Real Esta te Brokerage Commission. Each party represents and warrants that, neither party has retained any brokers or finders to represent its interests in connection with this transaction. Except as provided above, each party agrees to indemnify and hold the other harmless from and against all liabilities, costs, damages and expenses, including, without limitation, reasonable attorneys’ fees, resulting from any claims or fees or commissions, based upon agreements by it, if any, to pay any additional broker’s commission and/or finder’s fee.

10.11 Authority. Buyer represents that each individual executing this Agreement on behalf of Buyer is duly authorized to execute and deliver this Agreement on behalf of Buyer, in accordance with a duly adopted resolution in accordance w ith its formation documents, and that this Agreement is binding upon Buyer in accordance with its terms.

10.12 Execution in Counterpart . This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on both p arties hereto, notwithstanding that both parties are not signatories to the original or the same counterpart.

10.13 Exhibits. Exhibits “A”, “B” and “C” attached to this Agreement are incorporated herein by this reference and made a part hereof. Said Attachments are identified as follows:

Exhibit “A” Legal Description of Property
Exhibit “B” Final Order of Condemnation (FOC)
Exhibit “C” Grand Deed

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IN WITNESS WHEREOF, Seller and Buyer have entered into this Agreement as of the date first set forth above.

REMINDER: SECTIONS 8 AND 9.2 NEED TO BE INITIALED.

BUYER: SELLER:

ARROW UNITED INVESTMENTS, LLC,
a California limited liability company

By: _________________________

Its: _______________________

By: _________________________

Its: ______________________

CITY OF RIALTO,
a California municipal corporation

By: ________________________
Deborah Robertson, Mayor

Dated: ___________, 2016

ATTEST:

________________________
Barbara McGee, City Clerk

APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLC

By: _____________________
Fred Galante, City Attorney

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01180.0020/311713.1

ACCEPTANCE BY ESCROW HOLDER

GOLDEN STATE ESCROW COMPANY,
a California corporation
BOC License Number: __________

, 2016 By:

Name:

Title:

01180.0020/311713.1
EXHIBIT “A”
Legal Description of Property

01180.0020/311713.1
EXHIBIT “B”
Final Order of Condemnation

01180.0020/311713.1
EXHIBIT “C”
Grant Deed

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RESOLUTION NO._____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RIALTO, CALIFORNIA, AMENDING ITS 201 6-2017 FISCAL

BUDGET RELATED TO PURCHASE AND SALE AGREEMENTS

BETWEEN THE COUNTY OF SAN BERNARDINO AND THE

CITY AND BETWEEN ARROW UNITED INVESTMENT LLC

RELATED TO CONVEYANCE OF COUNTY PARCELS
(PORTIONS OF APN 1119-241-01 AND 02).

WHEREAS, the budget for fiscal year 2016-2017 of the City of Rialto has been adopted by this Council in its original form, and said budget will need to be amended at times to f ulfill the goals of the City; and
WHEREAS, the City departments may not exceed their appropriations by character of expense, with character of expense being defined as personnel services, services and supplies, capital outlay, debt service and transfers, without the consent of the City Administrator; and WHEREAS, the City Administrator may transfer appropriations, between departments and within their respective funds, as long as those appropriations do not exceed their fund total unless approved by Council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RIALTO DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

Section 1: Authorize an appropriation in the General Fund, Account No. 010-500-4255-3001 in the amount of $4,646,000.

Section 2: Authorize an increase in estimated revenues in the General Fund, Account No. 010-400-4255-7589 in the amount of $4,646,000.

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PASSED APPROVED AND ADOPTED this _____ day of ____________, 2016.

_______________________________
Deborah Robertson, Mayor

ATTEST:

______________________________
BARBARA McGEE, City Clerk

APPROVED AS TO FORM:

______________________________
FRED GALANTE, City Attorney

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STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF RIALTO )

I, Barbara McGee, City Clerk of the City of Rialto, do hereby certify that the foregoing Resolution No.____ was duly passed and adopted at a regular meeting of the City Council of the City of Rialto held on the ____ day of ______________, 2016.

Upon motion of Council Member ____________, seconded by Council Member ____________, the foregoing Resolution No. ____ was duly passed and adopted.

Vote on the motion:

AYES:

NOES:

ABSENT:

IN WITNESS WHEREOF, I have hereunto set my hand and the Official Seal of the City of Rialto this _____ day of _________________, 2016.

____________________________________
BARBARA McGEE, CITY CLERK

Rialto City CouncilApril 27, 2024

Rialto City Council
April 27, 2024