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HomeMy WebLinkAboutTDA TDPUD Real Property Purchase Agreement-v8 FinalAGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (10750 Bermgarten Road, Truckee, CA) THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS ("Agreement") is dated solely for reference purposes as of May , 2011, and constitutes an agreement between, a Truckee Donner Public Utility District, a California public utility district ("Seller"), and Tahoe Donner Association, a California nonprofit mutual benefit corporation ("Buyer"). The terms and conditions of this Agreement and the instructions to Placer Title Company located at 11429 Donner Pass Rd # 1 ("Escrow Holder") with regard to the escrow ("Escrow") created pursuant hereto are as follows: 1. Description of Prope,M. Seller is the fee owner of the following property interests: (a) that certain real property known as Assessor's Parcel Number 18-010-10 consisting of approximately one hundred sixty-one (161) net acres of land located in the Town of Truckee, County of Nevada (the "County"), State of California, more particularly described in Exhibit A attached hereto and by this reference incorporated herein (the "Land"); (b) all rights, privileges, easements, tenements, hereditaments, rights of way and appurtenances which belong to or appertain to the Land and/or are owned by Seller, including, without limitation, all improvements, rights to all minerals, oil, gas and other hydrocarbon substances on and under the Land, as well as all development rights, air rights, water, water rights and water stock, if any, relating to the Land (collectively, the "Appurtenances"); and (c) all intangible property owned or held by Seller in connection with the Land or with the use thereof including, without limitation, all permits, maps, surveys, plans, leases, licenses, rental contracts and agreements (collectively, the "Intangible Property"). The Land and the Appurtenances are sometimes herein referred to collectively as the "Real Property." The Real Property and the Intangible Property are hereinafter collectively referred to as the "Property." 2. Purchase and Sale. For valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and conditions herein set forth. 3. Purchase Price. The purchase price ("Purchase Price") for the Property shall be Seven Hundred Seventy Five Thousand Dollars ($775,000.00). Be 1123413.8 4. Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows: (a) Deposit. Within three (3) business days after the full execution and delivery to Buyer of this Agreement, Buyer shall deposit, or cause to be deposited with Escrow Holder, in cash or certified or bank cashier's check made payable to Escrow Holder, the sum of Fifty - Thousand Dollars ($50,000) (the "Deposit"). The Deposit shall be invested by Escrow Holder in an interest -bearing account with all interest accruing thereon to be credited to the Purchase Price upon the Close of Escrow (as hereinafter defined). Should Buyer timely elect to terminate this Escrow pursuant to the provisions of this Agreement, the Deposit plus any accrued interest thereon (less Buyer's share of escrow costs incurred) shall be returned by Escrow Holder to Buyer without the need for further instructions to do so, this Agreement and the Escrow created pursuant hereto shall be deemed terminated and neither party shall have any further rights or obligations hereunder. Upon the expiration of the Contingency Period (as defined in Section 8(a)(ii) below), provided Buyer has not elected to terminate this Agreement, the Deposit shall become nonrefundable to Buyer unless Seller defaults hereunder or a condition to Buyer's obligation to close hereunder fails to occur. (b) Balance of the Purchase Price. On or before the Close of Escrow, provided Buyer has not elected to terminate this Agreement and the Escrow created pursuant hereto in accordance with its rights to terminate contained in this Agreement, Buyer shall deposit or cause to be deposited with Escrow Holder, in cash or by a certified or bank cashier's check made payable to Escrow Holder or a confirmed wire transfer of funds, an amount equal to the Purchase Price (as determined pursuant to Section 3 above) together with Buyer's share of closing costs and prorations, less the sum of the Deposit and any interest accrued thereon. 5. Escrow. (a) Opening of Escrow. For purposes of this Agreement, the Escrow shall be deemed opened on the date Escrow Holder shall have received an executed counterpart of this Agreement from both Buyer and Seller. Escrow Holder shall notify Buyer and Seller, in writing, of the date Escrow is opened and the scheduled Closing Date, as defined in Section 5(b) below. In addition, Buyer and Seller agree to execute, deliver and be bound by any reasonable or customary supplemental escrow instructions of Escrow Holder or other instruments as may reasonably be required by Escrow Holder in order to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend or supersede any portions of this Agreement. If there is any inconsistency between such supplemental instructions and this Agreement, this Agreement shall control. (b) Close of Escrow. For purposes of this Agreement, the "Close of Escrow" shall be defined as the date that the grant deed conveying the Real Property to Buyer (in the form typically used by Escrow Holder) (the "Grant Deed"), is recorded in the Official Records of the County. This Escrow shall close on or before thirty (30) days after the end of the Contingency Period (the "Scheduled Closing Date"), unless extended by mutual agreement of the parties. IPA 1123413.8 6. Condition of Title. It shall be a condition to the Close of Escrow that title to the Real Property be conveyed to Buyer by Seller by the Grant Deed subject only to the following approved condition of title ("Approved Condition of Title"): (a) a lien to secure payment of real estate taxes, not delinquent; (b) the lien of supplemental taxes assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code ("Code"), but only to the extent that such supplemental taxes are attributable to the transaction contemplated by this Agreement. Seller shall be responsible for any supplemental taxes assessed pursuant to the Code which accrue prior to the Close of Escrow, to the extent that such taxes relate to events (including, without limitation, any changes in ownership and/or new construction) occurring prior to the Close of Escrow; (c) matters affecting the Approved Condition of Title created by or with the express written consent of Buyer; (d) the restrictions contained in the easement agreement set forth in Exhibit B, attached hereto and by this reference incorporated herein (the "Easement Agreement"); and (e) exceptions which are disclosed by the Report described in Section 8(a)(i) hereof and which are approved or deemed approved by Buyer in accordance with Section 8(a)(i) hereof. Seller covenants and agrees that during the term of this Escrow, it will not cause title to the Real Property to differ from the Approved Condition of Title described in this Section 6. Any liens, encumbrances, easements, restrictions, conditions, covenants, rights, rights of way or other matters affecting the Approved Condition of Title which may appear of record or be revealed after the date of the Report described in Section 8(a)(i) below (or any ALTA survey that Buyer may obtain) shall also be subject to Buyer's approval pursuant to Section 8 below and must be eliminated or ameliorated to Buyer's satisfaction by Seller prior to the Scheduled Closing Date as a condition to the Close of Escrow for Buyer's benefit. 7. Title Policy. Title shall be evidenced by the willingness of the Title Company to issue its CLTA Owner's Form Policy of Title Insurance, or, if requested by Buyer, its ALTA Extended Coverage Owner's Form Policy of Title Insurance ("Title Policy") in the amount of the Purchase Price showing title to the Property vested in Buyer subject only to the Approved Condition of Title. 8. Conditions to Close of Escrow. (a) Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions for Buyer's benefit on or prior to the dates designated below for the satisfaction of such conditions: -3- 1123413.8 (i) Title. Buyer shall have approved the legal description of the Land attached hereto as Exhibit A and any matters of title as disclosed by the following documents (collectively, the "Title Documents") to be delivered to Buyer by Seller: (A) a standard preliminary title report (the "Report") dated April 5, 2011 issued by Escrow Holder's Title Insurer Underwriter (the "Title Company") with respect to the Property; (B) if requested by Buyer, an "extended coverage" supplemental title report ("ALTA Report") issued by the Title Company with respect to the Real Property; (C) legible copies of all documents, whether recorded or unrecorded, referred to in the Report and/or the ALTA Report (if any); and (D) a color -coded map plotting all easements disclosed by the Report, and the ALTA Report (if any). Seller shall direct the Title Company to deliver the Title Documents to Buyer within three (3) days after the opening of Escrow. Buyer shall have until the date that is thirty (30) days after Buyer's receipt of the Title Documents (the "Title Approval Date") to give Seller and Escrow Holder written notice ("Buyer's Title Notice") of Buyer's disapproval or conditional approval of the legal description or any matters shown in the Title Documents. The failure of Buyer to give Buyer's Title Notice on or before the Title Approval Date shall be deemed to constitute Buyer's approval of the legal description and all Title Documents. If Buyer disapproves or conditionally approves the legal description and/or any matters of title shown in the Title Documents, Seller may, within five (5) business days after its receipt of Buyer's Title Notice, elect to eliminate or ameliorate to Buyer's satisfaction the disapproved or conditionally approved title matters. Seller shall give Buyer written notice ("Seller's Title Notice") of those disapproved or conditionally approved title matters, if any, which Seller agrees to either eliminate from the Title Policy as exceptions to title to the Real Property or to ameliorate to Buyer's satisfaction by the Scheduled Closing Date as a condition to the Close of Escrow for Buyer's benefit. If Seller does not elect to eliminate or ameliorate to Buyer's satisfaction any disapproved or conditionally approved title matters, or if Buyer disapproves of Seller's Title Notice, or if, despite its best efforts, Seller is unable to eliminate or ameliorate to Buyer's satisfaction all such disapproved matters prior to the Scheduled Closing Date, then Buyer shall have the right, by a writing delivered within five (5) business days thereof to Seller and Escrow Holder, to: (A) waive its prior disapproval, in which event said disapproved matters shall be deemed approved; or (B) terminate this Agreement and the Escrow created pursuant hereto, in which event Buyer shall be entitled to the return of the Deposits, plus any interest accrued thereon (less Buyer's share of costs incurred), and this Agreement, the Escrow and the rights and obligations of the parties hereunder shall terminate. Notwithstanding anything to the contrary contained in this Section 8(a)(i), Buyer hereby objects to all leases and liens evidencing monetary encumbrances (other than liens for non -delinquent property taxes) and Seller agrees to cause all such liens to be eliminated at Seller's sole cost and expense (including all prepayment penalties and charges) prior to the Close of Escrow. (ii) Review and Approval of Documents and Materials. Within five (5) days after the opening of Escrow, Seller shall deliver to Buyer, at Seller's sole cost and expense, for Buyer's review and approval, the documents and materials respecting the Property set forth in subsection (A) through (I) below (the "Documents and Materials"). For a period of thirty (30) days following Buyer's receipt of all of the Documents and Materials from Seller (the "Contingency Period"), Buyer shall have the right to review and approve or disapprove in its IN 1123413.8 sole and subjective discretion any or all of the Documents and Materials. The failure of Buyer to disapprove any of the Documents and Materials on or before the expiration of the Contingency Period shall be deemed to constitute Buyer's approval thereof. (A) Licenses. Any and all licenses, permits and agreements affecting or relating to the ownership, subdivision, possession or development of the Real Property in the possession or control of Seller, its agents or representatives; (B) Governmental Correspondence. Copies of all applications and correspondence or other written communications to or from any governmental entity, department or agency regarding any permit, approval, consent or authorization with respect to the development of the Real Property which are in the possession or control of Seller, its agents or representatives, if any; (C) Surveys. Copies of the most recent surveys, if any, pertaining to the Property or any portion thereof which are in the possession or control of Seller, its agents or representatives; (D) Maps. Any and all tentative, parcel and/or final maps, development plans, site plans, building permits, certificates or occupancy, specifications or any other governmentally approved or processes documents relating to the subdivision or development of the Real Property which are in the possession or control of Seller, its agents or representatives; (E) Reports. Any and all reports, projections, studies or other documents or written information pertaining to the Property including, without limitation, any reports or documents related to any hazardous waste or toxic substances contained on or related to the Property, or any portion there, which are in the possession or control of Seller, its agents or representatives; (F) Tax Statements. Any and all property tax statements pertaining to the Property which are in the possession or control of Seller, its agents or representatives; (G) Soils and Engineering Studies. Any and all soils reports, engineering data and other data or studies pertaining to the Real Property or any portion thereof which are in the possession or control of Seller, its agents or representatives; (H) Leases. Copies of any and all existing leases and amendments thereto of the Real Property or any portion thereof, if any ("Leases"); and (I) Agreements. Any and all reciprocal easement agreements, if any, and any other contracts or agreements affecting or relating to the ownership or development of the Real Property. -5- 1123413.8 (iii) Inspections and Studies. On or before the expiration of the Contingency Period, Buyer shall have approved the results of any and all surveys, inspections, investigations, tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies and soils, seismic and geologic reports) with respect to the Real Property as Buyer may elect to make or obtain. The failure of Buyer to approve said results on or prior to the expiration of the Contingency Period shall be deemed to constitute Buyer's approval of the results. The cost of any such inspections, tests and studies, including the cost of obtaining an ALTA survey of the Real Property (if any), shall be borne by Buyer. During the term of this Escrow, Buyer, its agents, contractors and subcontractors shall have the right to enter upon the Land, at reasonable times during ordinary business hours to make any and all inspections and tests as may be necessary or desirable in Buyer's sole judgment and discretion. Buyer shall give Seller, at no cost, complete copies of all investigation reports obtained by Buyer prior to closing. In the event this Agreement is canceled and escrow fails to close, this obligation shall survive termination of this Agreement. Buyer shall use care and consideration in connection with any of its inspections. Buyer shall indemnify and hold Seller and the Property harmless from any and all liability, claim or damage directly arising out of or resulting from Buyer's investigations, including the entry and/or activities of Buyer, its agents, contractors and subcontractors upon the Land. Buyer's indemnity obligations shall survive the termination of this Agreement. (iv) Representations, Warranties and Covenants of Seller. Seller shall have duly authorized and performed each and every agreement to be performed by Seller hereunder and Seller's representations, warranties and covenants set forth in Section 14 shall be true and correct as of the Closing Date. (v) No Material Changes. At the Closing Date, there shall have been no material adverse changes in the title or physical condition of the Real Property. (vi) Moratorium. At the Closing Date, there shall be no reassessment, reclassification, rezoning or other statute, law, judicial or administrative decision, proceeding, ordinance or regulation (including amendments and modifications of any of the foregoing) pending or proposed to be imposed by any governmental or quasi -governmental bodies or agencies having jurisdiction over the Real Property or any public or private utility having jurisdiction over the Real Property which would adversely affect, in Buyer's reasonable judgment, the acquisition, development, sale or use of the Real Property. (b) Conditions to Seller's Obli_at�. For the benefit of Seller, the Close of Escrow shall be conditioned upon the occurrence and/or satisfaction of each of the following conditions (or Seller's waiver thereof, it being agreed that Seller may waive any or all of such conditions): (i) Buyer's Obligations. Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer; and -6- 1123413.8 (ii) Buyer's Representations. All representations and warranties made by Buyer to Seller in this Agreement shall be true and correct as of the Close of Escrow. 9. Deposits by Seller. At least one (1) business day prior to the Scheduled Closing Date, Seller shall deposit or cause to be deposited with Escrow Holder the following documents and instruments: (a) Grant Deed. The Grant Deed, duly executed by Seller, acknowledged and in a recordable form typically used by Escrow Holder in the County. (b) Bill of Sale. A bill of sale, assignment document, or other appropriate instrument (depending on the precise nature of the Intangible Property) reasonably acceptable to Buyer (the "Bill of Sale"), whereby Seller conveys all rights to the Intangible Property. (c) Proof of Authority. Such proof of Seller's authority and authorization to enter into this Agreement and the transactions contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or delivering any instruments, documents or certificates on behalf of Seller to act for and bind Seller as may be reasonably required by the Title Company and/or Buyer. 10. Deposits by Buyer. Buyer shall deposit or cause to be deposited with Escrow Holder the funds which are to be applied towards the payment of the Purchase Price in the amounts and at the times designated in Section 4 above (as adjusted by the prorations and credits hereinafter provided). In addition, at least one (1) day prior to the Scheduled Closing Date, Buyer shall deposit with Escrow Holder the Easement Agreement, duly executed by Buyer, acknowledged and in recordable form, together with such proof of Buyer's authority and authorization to enter into this Agreement and the transactions contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or delivering any instruments, documents or certificates on behalf of Buyer to act for and bind Buyer as reasonably may be required by Title Company. 11. Costs and Expenses. The cost and expense of the Title Policy attributable to CLTA coverage shall be shared equally by Seller and Buyer and the incremental amount attributable to ALTA coverage, if any, shall be paid by Buyer. The escrow fee of Escrow Holder shall be shared equally by Seller and Buyer. Seller shall pay all documentary transfer taxes payable in connection with the recordation of the Grant Deed. The amount of such transfer taxes shall not be posted on the Grant Deed but shall be supplied by separate affidavit. Buyer and Seller shall pay, respectively, the Escrow Holder's customary charges to buyers and sellers for document drafting, recording and miscellaneous charges. If, as a result of no fault of Buyer or Seller, Escrow fails to close, Buyer and Seller shall share equally all of Escrow Holder's fees and charges. 12. Prorations. The following prorations shall be made between Seller and Buyer on the Close of Escrow, computed as of the Close of Escrow: -7- 1123413.8 (a) Taxes, Assessments and Other Amounts. Real property taxes, special taxes, assessments, utility fees and/or deposits, and personal property taxes shall be prorated as of the Close of Escrow. Prorations of taxes and assessment with respect to the Real Property shall be based upon the latest available tax information such that Seller shall be responsible for all such taxes and assessments levied against the Property to and including the day prior to the Close of Escrow and Buyer shall be responsible for all taxes, special taxes and assessments levied against the Real Property from and after the day prior to the Close of Escrow. (b) Adjustments. If any errors or omissions are made regarding adjustments and prorations as aforesaid, the parties shall make the appropriate corrections promptly upon the discovery thereof. If any estimations are made at the Close of Escrow regarding adjustments or prorations, the parties shall make the appropriate correction promptly when accurate information becomes available. Any corrected adjustment or proration shall be paid in cash to the party entitled thereto. 13. Disbursements and Other Actions by Escrow Holder. Upon the Close of Escrow, the Escrow Holder shall promptly undertake all of the following in the manner indicated: (a) Prorations. Prorate all matters referenced in Section 12 based upon a closing statement for the escrow consistent with this Agreement (the "Closing Statement") delivered into Escrow signed by the parties; (b) Recording. Cause the Grant Deed, the Easement Agreement and any other documents which the parties hereto may mutually direct, to be recorded in the Official Records of the County. Escrow Holder is instructed not to affix the amount of documentary transfer tax on the face of the Deed, but to supply same by separate affidavit; (c) Funds. Disburse the funds deposited by Buyer with Escrow Holder as follows: deliver to Seller the amount due Seller as shown on the Closing Statement, pay all items chargeable to the account of Buyer pursuant to the Closing Statement, and refund the balance of such funds, if any, to Buyer; and (d) Title Policy. Direct the Title Company to issue the Title Policy to Buyer. (e) Bill of Sale. Deliver the Bill of Sale to Buyer. 14. Seller's Representations and Warranties. In consideration of Buyer's entering into this Agreement and as an inducement to Buyer to purchase the Property, Seller makes the following representations and warranties, each of which is material and is being relied upon by Buyer (and the continued truth and accuracy of which shall constitute a condition precedent to Buyer's obligations hereunder). As used in this Agreement, Seller's "knowledge" and "awareness" shall be limited to the actual knowledge of Michael D. Holley, General Manager/Water Division Manager and/or Kathleen Neus, Technical Programs -8- 1123413.8 Administrator/Property Coordinator. Notwithstanding the foregoing, neither Michael Holley nor Kathy Neus shall have personal liability to Buyer hereunder. (a) Authority. Seller has the full power and authority to sell the Property. This Agreement has been duly and validly authorized, executed and delivered by Seller and no other authorization is requisite to the valid and binding execution, delivery and performance of this Agreement by Seller; (b) Proceedings. Seller is not aware of any actions, suits, proceedings or governmental investigations pending or threatened against or affecting the Property, in law or equity; (c) Third Party Consents. No consents or waivers of or by any third party are necessary to permit the consummation by Seller of the transactions contemplated pursuant to this Agreement; (d) Compliance With Laws. Seller has received no notice and has no knowledge of any violation of applicable law, ordinance, rule, regulation or requirement of any governmental agency, body or subdivision affecting or relating to the Real Property, including, without limitation, any subdivision, building, use or environmental law, ordinance, rule, requirement or regulation; (e) Condemnation. Seller is not aware of any pending or threatened proceedings in eminent domain or otherwise, which would affect the Real Property, or any portion thereof; (f) Governmental Notices. Seller shall deliver to Buyer each and every notice or communication Seller receives from any governmental body upon Seller's receipt of the same; (g) Material Information. Seller shall notify Buyer of any material information concerning the Property about which Seller learns during the course of the Escrow promptly upon Seller's obtaining knowledge of same; (h) Leases. There are no leases or other agreements (whether oral or written) affecting or relating to the right of any party with respect to the possession of the Real Property, or any portion thereof; (i) Documents. All documents delivered to Buyer by Seller pursuant to this Agreement are or will be true and correct copies of originals and any and all information supplied to Buyer by Seller in accordance with Section 8(a)(ii) hereof is true and accurate, to Seller's knowledge; 0) Defects. Seller is not aware of any significant defects in the Real Property, except as expressly disclosed in the Documents and Materials. Also, if Seller becomes aware of any significant defects in the Real Property during the term of the Escrow, Seller shall promptly give Buyer written notice thereof; -9- 1123413.8 (k) Assessments. Seller is not aware of any intended public improvements which will result in any charge being levied or assessed against the Real Property or any delinquent taxes, assessments (special, general or otherwise), or bonds of any nature affecting the Property, or any portion thereof; (1) Future Action. From and after the date hereof, without the prior written consent of buyer, Seller shall not execute nor consent to the execution of any lease or terminate any existing lease of any portion of the Real Property or any other instrument which may result in an alteration of the Approved Condition of Title; (m) Truthfulness in Closing. Except as expressly herein otherwise provided, the representations and warranties of Seller set forth in this Agreement shall be true on and as of the Close of Escrow as if those representations and warranties were made on and as of such time; (n) Hazardous Waste. To the best of Seller's knowledge there is no contamination, hazardous waste or toxic substance in existence on or below the surface of the Real Property or in any building located upon the Real Property, including, without limitation, contamination of the soil, subsoil or ground water, which constitutes a violation of any law, rule or regulation of any government entity having jurisdiction thereof or which exposes Buyer to liability to third parties. No hazardous waste or toxic substances are or have been stored on or below the surface of the Real Property or in any building or other structure located on the Real Property by Seller or any tenant of the Real Property during Seller's ownership thereof, and Seller is not aware that any such hazardous waste or toxic substances have been so stored on or below the surface of the Land or in any buildings or other improvements thereon by any other person or entity. No pollutants, hazardous waste or toxic substances have ever been discharged by Seller or any tenant of any portion of the Real Property during Seller's ownership thereof into any body of water other than a sanitary sewer system established for that purpose, no such pollutants, hazardous waste or toxic substances have ever been disposed of by Seller or any such tenant on the Real Property, including, without limitation, by underground injection, and Seller is not aware of any such pollutants, hazardous waste or toxic substances having been so discharged or disposed of by any other person or entity. No portion of the Land has ever been used by Seller or any tenant of any portion of the Land during Seller's ownership thereof as a waste storage or disposal site and Seller is not aware of any such prior use. Seller and all tenants of the Real Property during Seller's ownership thereof have fully complied with all applicable laws and regulations in connection with handling, using, storing and/or disposing of hazardous wastes and toxic substances, including, without limitation, the maintenance of all required permits and approvals. Without limiting the other provisions of this Agreement, Seller shall cooperate with Buyer's investigation of matters relating to the foregoing provisions of this Section and to provide access to and copies of any data and/or documents dealing with potentially hazardous substances used at the Real Property and any disposal practices followed. Seller agrees that Buyer may make inquiries of governmental agencies regarding such matters, without liability to Seller for the outcome of such discussions; Notwithstanding the foregoing, Seller is aware of the following, but has made no investigation into the potential existence of hazardous waste or toxic substances related thereto: (1) the use/production of charcoal on the Property; (2) the existence of -10- 1123413.8 an old pipeline on the Property; and (3) the occasional deposit by Seller of asphalt, base rock, sand and dirt upon the Property. With respect to the representations and warranties contained in this Section 14(n), Seller makes no warranties relating to the matters covered under items (1) through (3) in the immediately preceding sentence nor any matters disclosed in the Phase I environmental report commissioned by Buyer. (o) Contracts. There are no contracts or agreements relating to the operation, maintenance, service, repair, development, improvements, management or ownership of the Real Property, or any portion thereof; (p) Agreement Not Constituting Breach or Violation. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereunder will: (i) constitute a breach of any agreement which affects the Property or any part thereof; (ii) conflict with or result in a breach of any writ, injunction or decree of any court or governmental instrumentality; (iii) violate any federal, state or local law, ordinance or regulation applicable to the Property; or (iv) accelerate the maturity of any obligation secured by or otherwise affecting the Property or any part thereof; (q) Litigation. There are no actions, suits, proceedings or claims pending or, to the best of Seller's knowledge, threatened or contemplated, in connection with the Property, and Seller has no knowledge of any action or inaction which may result in such an action, suit, proceeding or claim, and there are no actions, suits, proceedings or claims pending or, to the best of Seller's knowledge threatened or contemplated, against Seller which would materially affect Seller's ability to perform its obligations under this Agreement or any other document or instrument delivered by Seller to Buyer hereunder, and, Seller has no knowledge or any action or inaction which may result in such an action, suit, proceeding or claim; (r) No Conflicting Rights . No other party has any right to purchase the Property, nor are there any rights of first refusal or other options to purchase the Property, and Seller shall not grant any such rights or solicit any other offers to purchase the Property so long as this Agreement is in effect; and (s) Representation and Warranties at Closing. Each of the representations and warranties of Seller in this Agreement may be relied upon by Buyer as true as of the Close of Escrow, and each such representation and warranty shall be deemed to have been repeated at that time. 31e 1123413.8 15. Buyer's Representations and Warranties. In consideration of Seller entering into this Agreement and as an inducement to Seller to sell the Property to Buyer, Buyer makes the following representations and warranties, each of which is material and is being relied upon by Seller (the continued truth and accuracy of which shall constitute a condition precedent to Seller's obligations hereunder): (a) Buyer has the legal right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement have been duly authorized and no other action by Buyer is requisite to the valid and binding execution, delivery and performance of this Agreement, except as otherwise expressly set forth herein; (b) Buyer intends to use the Property primarily for recreational purposes and is willing to consider granting an easement, upon due consideration, for a future Donner Lake Rim Trail; and (c) The representations and warranties of Buyer set forth in this Agreement shall be true on and as of the Close of Escrow as if those representations and warranties were made on and as of such time. 16. LIQUIDATED DAMAGES. FOLLOWING BUYER'S APPROVAL OF THE MATTERS SET FORTH IN SECTION 8 ABOVE, IF BUYER COMMITS A MATERIAL DEFAULT UNDER THIS AGREEMENT AND THE CLOSE OF ESCROW FAILS TO OCCUR BY REASON OF SUCH DEFAULT, THEN IN ANY SUCH EVENT, THE ESCROW HOLDER MAY BE INSTRUCTED BY SELLER TO CANCEL THE ESCROW, BUYER SHALL RETURN ALL DOCUMENTS AND MATERIALS TO SELLER. AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON THE CIRCUMSTANCES NOW EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH SELLER'S DAMAGE BY REASON OF BUYER'S DEFAULT. ACCORDINGLY, BUYER AND SELLER AGREE THAT IT WOULD BE REASONABLE AT SUCH TIME TO AWARD SELLER "LIQUIDATED DAMAGES" EQUAL TO THE TOTAL OF THE ENTIRE AMOUNT OF THE DEPOSITS PLACED INTO ESCROW BY BUYER PURSUANT TO SECTION 4 HEREOF, TOGETHER WITH ANY INTEREST ACCRUED THEREON. SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT THE APPLICABLE FOREGOING AMOUNTS OF LIQUIDATED DAMAGES ARE REASONABLE AS LIQUIDATED DAMAGES AND SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY IN LIEU OF ANY OTHER RELIEF, RIGHT OR REMEDY, AT LAW OR IN EQUITY, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED BY REASON OF BUYER'S DEFAULT. WITHOUT LIMITING THE FOREGOING PROVISIONS OF THIS SECTION, SELLER WAIVES ANY AND ALL RIGHTS WHICH SELLER OTHERWISE WOULD 3VA 1123413.8 HAVE HAD UNDER CALIFORNIA CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS AGREEMENT. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION 16 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS. Seller's Initials Buyer's Initials 17. Damage or Condemnation Prior to Closing. Seller shall promptly notify Buyer of any casualty to the Real Property or any condemnation proceeding commenced prior to the Close of Escrow. If any such damage or proceeding relates to or may result in the loss of any material portion of the Real Property, Seller or Buyer may, at their option, elect either to: (i) terminate this Agreement, in which event all funds deposited into Escrow by Buyer (less Buyer's share of escrow costs incurred) shall be returned to Buyer and neither party shall have any further rights or obligations hereunder, or (ii) continue the Agreement in effect, in which event upon the Close of Escrow, Buyer shall be entitled to any compensation, awards, or other payments or relief resulting from such casualty or condemnation proceeding. 18. Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or sent by registered or certified mail, postage prepaid, return receipt requested, or sent by telecopy, and shall be deemed received upon the earlier of (i) if personally delivered, the date of delivery to the address of the person to receive such notice, (ii) if mailed, four (4) business days after the date of posting by the United States post office, or (iii) if given by fax, when sent provided Sender has receipt confirming completed transmission. Any notice, request, demand, direction or other communication sent by telecopy must be confirmed within forty-eight (48) hours by letter mailed or delivered in accordance with the foregoing. To Buyer: Tahoe Donner Association 11509 Northwoods Blvd. Truckee, CA 96161 Attention: Robb Etnyre, General Manager With a copy to: Downey Brand LLP 621 Capitol Mall, 18th Floor Sacramento, CA 95814 Attention: Christopher A. Delfino To Seller: Truckee Donner Public Utility District PO Box 309 (11570 Donner Pass Road) -13- 1123413.8 Truckee, CA 96160 Attention: Michael Holley, General Manager With a copy to: Cristina L. Wooley, Attorney at Law PO Box 8145 Truckee, CA 96162 To Escrow Holder: Placer Title Company 11429 Donner Pass Rd # 1 Truckee, CA 96161 Attention: Terry Lindroth Notice of change of address shall be given by written notice in the manner detailed in this Section. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request or communication sent. 19. Brokers. Each party represents and warrants to the other party that it has not utilized the services of a Broker with respect to the sale of the Property. 20. Le _ ate. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants or agreements or any inaccuracies in any of the representations and warranties on the part of the other party arising out of this Agreement, then in that event, the prevailing party in such action or dispute, whether by final judgment, or out of court settlement shall be entitled to have and recover of and from the other party all costs and expenses of suit, including actual attorneys' fees. 21. Assignment. Neither party may assign, transfer or convey its rights or obligations under this Agreement without the prior written consent of the other party, and then only if the party's assignee assumes in writing all of its obligations hereunder; provided, however, the party shall in no event be released from its obligations hereunder by reason of such assignment. 22. Miscellaneous. (a) Survival of Covenants. The covenants, representations and warranties of both Buyer and Seller set forth in this Agreement shall survive the recordation of the Grant Deed and the Close of Escrow. (b) Required Actions of Buyer and Seller. Buyer and Seller agree to execute such instruments and documents and to diligently undertake such actions as may be required in order to consummate the purchase and sale herein contemplated and shall use their best efforts to accomplish the Close of Escrow in accordance with the provisions hereof. -14- 1123413.8 (c) Time of Essence. Time is of the essence of each and every term, condition, obligation and provision hereof. (d) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. (e) Captions. Any captions to, or headings of, the Sections or subsections of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. (f) No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties thereto, to any person or entity other than the parties hereto. (g) Exhibits. The Exhibits attached hereto are hereby incorporated herein by this reference. (h) Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto. (i) Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 0) Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. (k) Fees and Other Expenses. Except as otherwise provided herein, each of the parties shall pay its own fees and expenses in connection with this Agreement. (1) Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between Buyer and Seller as to the subject matter hereof. No subsequent agreement, representation, or promise made by either party hereto, or by or to an employee, officer, agent or representative of either party shall be of any effect unless it is in writing and executed by the party to be bound thereby. (m) Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. -15- 1123413.8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BUYER: SELLER: TAHOE DONNER ASSOCIATION, a TRUCKEE DONNER PUBLIC UTILITY California nonprofit mutual benefit corporation DISTRICT, a California public utility district, By: By: Its: Its: By: By: Its: Its: Acceptance by Escrow Holder: Placer Title Company hereby acknowledges that it has received a fully executed counterpart of the foregoing Agreement of Purchase and Sale 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. Dated: PLACER TITLE COMPANY Its: -16- 1123413.8 EXHIBIT A TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS LEGAL DESCRIPTION THE LAND DESCRIBED HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF NEVADA, CITY OF TRUCKEE, AND IS DESCRIBED AS FOLLOWS: PARCEL ONE: THE NORTH HALF OF THE SOUTHWEST QUARTER AND THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 8, TOWNSHIP 17 NORTH, RANGE 16 EAST. PARCEL TWO: THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 8, TOWNSHIP 17 NORTH, RANGE 16 EAST. EXCEPTING THEREFROM ALL THAT PORTION OF THE SOUTH ONE-HALF OF SECTION 8, TOWNSHIP 17 NORTH, RANGE 16 EAST, NEVADA COUNTY, CALIFORNIA AS SET FORTH IN QUITCLAIM DEED RECORDED APRIL 18, 1986 INSTRUMENT NO. 1986-08456, OFFICIAL RECORDS, LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE: BEGINNING AT A POINT SITUATE ON THE SOUTHERLY LINE OF TAHOE DONNER UNIT 5 AS FILED IN BOOK 4 OF SUBDIVISIONS, AT PAGE 36, NEVADA COUNTY RECORDS, FROM WHICH A B.L.M. BRASS CAP MARKING THE WEST ONE -QUARTER CORNER OF SAID SECTION 8 BEARS NORTH 00 DEGREES 22' 31" EAST 60.65 FEET; THENCE ALONG SAID SOUTHERLY LINE OF TAHOE DONNER UNIT 5 NORTH 88 DEGREES 34' 32" EAST 131.44 FEET TO A 1" PIPE TAGGED R.C.E. 13309 FEET; THENCE SOUTH 89 DEGREES 42' 29" EAST 3950 FEET MORE OR LESS TO THE WESTERLY LINE OF THE EAST ONE-HALF OF THE SOUTHEAST ONE -QUARTER OF SAID SECTION 8. APN: 18-010-10 EXHIBIT B TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS Recording requested by and when recorded mail to: Truckee Donner Public Utility District Attn: Michael Holley, General Manager 11570 Donner Pass Road Truckee, CA 96160 Cristina L. Wooley, Esq. P.O. Box 8145 Truckee, CA 96162 APN: 18-010-10 EASEMENT DEED Space above this line reserved for Recorder's use This Easement Deed, dated , 2011, is entered into by and between Tahoe Donner Association ("TDA"), a California non-profit mutual benefit corporation ("Grantor"), and the Truckee Donner Public Utility District ("TDPUD"), a local public agency of the State of California ("Grantee"), with reference to the following facts: RECITALS A. Concurrently herewith, Grantor has acquired from Grantee that certain real property known as Assessor's Parcel Number 18-010-10, consisting of approximately 161 acres of land north of Interstate 80 and South of Tahoe Donner in Nevada County, California, which is more particularly described in Exhibit A (the "Property"). B. As partial consideration for Grantee's sale of the Property to Grantor, Grantor agreed to refrain from developing the Property for residential purposes, to preserve the natural condition of specified features (more fully described below), and to manage the forested condition of the Property, subject to the development rights set forth below. C. Grantee intends to use the Property for primarily recreational purposes. The grant of this Easement will serve the governmental conservation policies of Section 815 of the California Civil Code. GRANT OF EASEMENT Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Grantor grants and Grantee accepts, a perpetual easement meeting the definition set forth in Section 815.1 of the California Civil Code, in, on, over, and across the Property ("Easement") in favor of Grantee as holder of the Easement granting to Grantee the rights specifically set out below, and restricting in perpetuity certain uses that may be made of the Property, subject to the following terms and conditions: 1. Purposes and Limitations. The purposes of this Easement are to limit the potential development of the Property, to allow active management and development of the Property consistent with Paragraph four below, and maintain the current access to and preservation of the specified features in a fashion similar to their existing use and condition, and to predominantly allow the Property to remain in its natural, forested condition. (a) No single or multiple family residences, mobile homes, or transient rental units will be constructed on the Property. (b) Existing cedar groves, charcoal kilns, spring and riparian zones are special features located on the Property. For informational purposes only, the location of the special features is generally depicted in Exhibit B ("Features"), attached to and made a part of this Easement. Grantor may continue to access the Features, but shall not substantially disturb the natural condition of the Features, subject to the existing use and responsible forest management practices. (c) In maintaining the Property in its predominately natural, forested condition, Grantor shall rely upon responsible forest management practices and standards, subject to Grantor's reserved rights, as set for the below. 2. Initial Contact Information. Grantee: Truckee Donner Public Utility District Attention: Michael Holley, General Manager PO Box 309 11570 Donner Pass Road Truckee, CA 96160 Phone: Fax: Grantor: Tahoe Donner Association Attn: Robb Etnyre, General Manager 11509 Northwoods Blvd. Truckee, CA 96161 Phone: (530) 587-9400 Fax: (530) 587-9419 3. Grantor's Responsibilities. Grantor shall be solely responsible for payment of property taxes and for the upkeep and maintenance of the Property. In view of Grantee's negative rights, limited access to the land, and lack of active involvement in the day-to-day management activities on the Property, Grantor shall be solely liable for injury or the death of any person, or physical damage to any property, or any other costs or liabilities resulting from any act, omission, condition, or other matter related to or occurring on or about the Property. No provision of this Easement is to be construed as impairing the ability of Grantor to use the Property as collateral for any loan, provided that any lien created thereby shall be subordinate to this Easement. Page 12 4. Rights Reserved to Grantor. Grantor reserves to itself, and its successors and assigns, all rights accruing from its ownership of the Property, including the right to engage in or to permit or invite others to engage in all uses of the Property that are not expressly prohibited or limited by, and are consistent with the purposes of, this Easement. These ownership rights include, but are not limited to, the right to sell, lease, grant additional easements or otherwise transfer the Property, as well as the right to privacy, the right to exclude any member of the public from trespassing on the Property, and any other rights consistent with the Purpose of this Easement. Provided the Features are not substantially disturbed and the forested nature of the Property is not significantly impaired, and subject to the terms of this Easement, Grantor may undertake construction, erection, installation, or placement of trails, sports fields, buildings, structures, or other non-residential improvements for Tahoe Donner Association's purposes on the Property, in compliance with the then -applicable Town of Truckee General Plan and Development Code standards. Nothing contained herein shall be construed as a grant to the general public of any right to enter upon any part of the Property. Nothing in this Easement relieves the Landowner of any obligation or restriction on the use of the Property imposed by law. Nothing in this Easement shall constitute governmental approval of any improvements, construction or other activities that may be permitted under this Easement. 5. Enforcement. Grantee may take all actions that it deems necessary to ensure compliance with the development restrictions set forth in this Easement. If Grantee finds what it believes is a violation or potential violation, it may at its discretion take appropriate legal action to ensure compliance with the terms, conditions, covenants, and purposes of this Easement and shall have the right to correct violations and prevent the threat of violations. Except when an ongoing or imminent violation could irreversibly diminish or impair the purposes of this Easement, Grantee shall give Grantor written notice of the violation or potential violation, and thirty (30) days to correct it, before filing any legal action. Grantee shall have any and all remedies available at law or equity. Such remedies shall be cumulative and shall include temporary and/or permanent injunctive relief and monetary damages. If the violation will, in a party's reasonable opinion, cause irreparable harm to the Property within such thirty (30) day period, the complaining party may demand that the breaching party take immediate action. If the breaching party fails to take immediate action in such a situation, the complaining party may remedy the violation and the breaching party shall be responsible for reasonable costs of the remediation. Failure or refusal to exercise any rights under the terms of this Easement by Grantee in the event of a violation of any term herein shall not constitute a waiver or forfeiture of Grantee's right to enforce any term, condition, covenant, or purpose of this Easement. 6. Subsequent Transfers of Property. The terms, conditions, restrictions, and purposes of this Easement, or a clearly incorporated reference thereto, will be inserted in any subsequent deed, lease, or other instrument by which Grantor conveys or transfers title to, or any leasehold, possessory, or other interest in the Property. Grantor shall (i) notify Grantee of any transfer at least thirty (30) days in advance of its occurrence; and (ii) provide a true and complete copy of this Easement, as recorded, to each transferee. No failure by a Grantor shall, however, affect the validity or enforceability of the Easement. Pursuant to California Civil Code section 815.1, this Easement shall run with the land in perpetuity. Every provision of this Easement that applies to Page 13 Grantor or Grantee shall also apply to their respective agents, heirs, executors, administrators, assigns, and all other successors as their interests may appear. 7. Miscellaneous Provisions. If any provision of this Easement, or the application thereof to any person(s) or circumstance(s), shall to any extent be held invalid, illegal, or unenforceable (i) neither the remainder of this Easement, nor the application of such provision to any other person(s) or circumstance(s) shall be affected thereby; (ii) this Easement shall be construed as though such invalid, illegal or unenforceable provision had never existed; and (iii) this Easement shall be valid and enforceable to the fullest extent permitted by applicable laws. The parties acknowledge that each party and its counsel have reviewed and approved this Easement. The terms of this Easement are intended as a final expression of their agreement as to the subject matter hereof, and may not be contradicted by any prior or contemporaneous agreement or any extrinsic evidence. All exhibits attached and referred to in this Easement are incorporated as if fully set out herein. No remedy or election given by this Easement shall be deemed exclusive unless so indicated, and each remedy or election shall, when possible, be cumulative with all other remedies at law or in equity. The parties shall execute such additional documents as may be reasonable and necessary to carry out this Easement. This Easement shall be construed in accordance with the laws of the State of California. Time is of the essence in performance of the obligations of the parties, but no failure of a party to this Easement to insist upon the timely performance of any obligation by another party shall constitute a waiver of the right to require timely performance, or act as a waiver of the right to require performance of any other obligation. Grantee is authorized to record or file any notices or instruments that may be appropriate to ensure the perpetual enforceability of this Easement, including re-recording this document, and Grantor shall execute, acknowledge, and/or deliver notices or instruments upon reasonable request from Grantee. 8. Assignment. During TDA's ownership of the Property, TDPUD agrees not to assign or transfer this Easement without TDA's prior written consent. Notwithstanding the foregoing, in the event of TDPUD's dissolution, TDPUD's successor in interest will automatically become the Grantee hereunder. Should TDA transfer the Property, this Easement may be assigned or transferred by Grantee to any public agency or other organization entitled to hold the easement under Section 815.3 of the California Civil Code. All transfers shall be in writing and shall be duly recorded. 9. Amendment. This Easement may be amended by the written agreement of the parties. Any such amendment shall be consistent with the purposes of this Easement and California law and shall not affect its perpetual duration. Further, any amendment shall be in writing, shall refer to this Easement by reference to its recordation date, and shall be recorded in the official public records of the jurisdiction where the Property is located. 10. No Third Party Beneficiaries. This Easement is solely for the benefit of the Grantor and Grantee and shall create no rights of any nature in any person or entity not a party hereto. Page 14 11. Termination of Rights and Obligations. A party's personal rights and obligations under this Easement terminate upon transfer of the party's interest in the Easement or Property, except that liability for acts or omissions occurring prior to transfer shall survive transfer. 12. Acts Beyond Grantor's Control. Nothing contained in this Easement shall be construed to entitle Grantee to bring any action against Grantor for any injury to or change in the Property resulting from (i) any natural cause beyond Grantor's control, including, without limitation, fire not caused by Grantor, flood, storm, terrorist acts, criminal acts and earth movement, or any prudent action taken by Grantor under emergency conditions to prevent, abate, or mitigate significant injury to the Property or surrounding properties resulting from such causes; or (ii) acts by Grantee or its employees. In witness whereof, the parties execute this Easement Deed, effective as of the date first above written. Grantor: Tahoe Donner Association a California mutual benefit corporation LI-A (signature) Print Name: Title: Grantee: The Truckee Donner Public Utility District, a California public utility district Print Name: Title: (signature) Page 15