1998-0407_BLUE SKY PROPERTIES, LTD_Purchase and Sale Agreementi
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made this"day of
Jr 1998, by and between the CITY OF SAN JUAN CAPISTRANO
(hereinafter referred to as either "Seller" or "City"), and BLUE SKY PROPERTIES,
LTD. (hereinafter referred to as "Buyer").
RECITALS:
WHEREAS, Seller is the fee owner of certain real property, commonly referred to
as Parcel Nos. 133.2, 133.4 and 133.8 (hereinafter the "Property"); and
WHEREAS, Seller is a municipal corporation lawfully existing under the law of
the State of California; and
WHEREAS, Buyer desires to purchase said parcels under the below -stated terms
and conditions for the purpose of development of a motor vehicle sales facility affiliated
with the existing Capistrano Ford dealership; and
WHEREAS, by this Agreement, Seller desires to sell the Property to Buyer;
NOW, THEREFORE, BE IT RESOLVED between Seller and Buyer as follows:
Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the
Property, more particularly described as Assessor's Parcel Nos. 133.2, 133.4 and 133.8,
upon the terms and conditions set forth in this Agreement.
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The purchase price for the Property shall be Seven Hundred Thirty -Five Thousand
Dollars ($735,000.00) (the "Purchase Price"). Buyer acknowledges that Seller will pay a
ten percent (10%) commission (i.e., Seventy -Three Thousand Five Hundred Dollars
[$73,500.001) which shall be the sole responsibility of Seller and may be paid by Seller to
the sales agent from escrow.
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SECTION III. PAYMENT OF PURCHASE PRICE.
The Purchase Price shall be payable as follows:
A. Upon the opening of Escrow, Buyer shall fund a refundable deposit (the
"Deposit") in the total sum of Twenty-five Thousand Dollars ($25,000) as follows: (i) by
deposit into Escrow of the sum of Fifteen Thousand Dollars ($15,000) in cash, and (ii) by
Seller's acknowledgment herein that the sum of Ten Thousand Dollars ($10,000.00) has
already been paid to Seller outside of Escrow. Seller's execution of this Agreement hereby
acknowledges that Seller has received said sum outside of Escrow from Buyer. Seller shall
insure that such funds of the Deposit are placed in an interest bearing account by Seller or
Escrow Holder. The Deposit, including all accrued interest, shall be refundable to Buyer
should any contingency or condition, as provided in Section VII, not be met, or should Seller
breach this Agreement. The Deposit shall become non-refundable and shall serve as
liquidated damages in the event Buyer fails to close escrow after accepting any contingency
or waiving any condition, except in the event of a breach of this Agreement by Seller. At the
Close of Escrow, the entire Deposit shall be applied and credited toward payment of the
Purchase Price.
Seller and Buyer agree that said "non-refundable" deposit, and interest thereon, if
any, constitute liquidated damages for the breach of Buyer's agreement to purchase the
property, in lieu of all other damages; that actual damages would be extremely difficult to
calculate; and that the foregoing represents the parties best estimate of the damages to be
suffered by Seller in the event of Buyer's breach of the Agreement to purchase the Property.
The parties here b initialing below expressl agree to this provision.
Buyer
B. On or before the Closing Date (as provided in Section VI.B below), Buyer shall
deposit into Escrow cash or cash equivalent in the amount of the balance of the Purchase
Price.
SECTION IV. ESCROW INSTRUCTIONS.
The terms of this Agreement shall serve as escrow instructions to the appointed
Escrow Holder.
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SECTION V. CONDITION OF TITLE.
At the Close of Escrow, Seller shall convey to Buyer marketable fee simple title to
the Property by the Grant Deed, subject only to the following matters ("Approved Title
Conditions"): (a) a lien for real property taxes, not then delinquent; (b) matters of title
respecting the Property approved by Buyer in accordance with Section VII below; and (c)
matters affecting the condition of title to the Property created by or with written consent of
Buyer.
A. Opening of Escrow. An escrow account ("Escrow") shall be opened by Buyer
with First American Title Company of Santa Ana or other title escrow holder mutually
acceptable to the parties ("Escrow Holder") not later than fifteen (15) days after full
execution and approval of this Agreement. Escrow Holder shall notify Buyer and Seller in
writing that the Escrow has been opened as soon as reasonably practicable.
B. Close of Escrow. The close of Escrow ("Close of Escrow") shall occur
within sixty (60) days after the full completion of all conditions required pursuant to Section
VII. A., below, (the "Closing Date"). The parties may either accelerate or extend this Closing
Date by providing the Escrow Holder with five (5) days' advance written notice of the
parties' mutual desire to alter the Closing Date.
C. Escrow Instructions. This Agreement shall serve as escrow instructions.
Buyer and Seller hereby authorize their respective attorneys to execute and deliver to Escrow
Holder any additional or supplementary instructions as Escrow Holder may reasonably
request and/or which may be necessary or convenient to implement the terns of this
Agreement and close the transaction contemplated hereby. In the event of any conflict or
inconsistency between said additional or supplementary instructions and this Agreement,
including any printed or typed form prepared by Escrow Holder, no instruction shall be
deemed to change the terms, provisions or conditions of this Agreement unless the parties
expressly so state and provide in writing. In addition, in the event of any conflict or
inconsistency between the provisions of. this Agreement constituting escrow instructions to
Escrow Holder (including the provisions of this Paragraph C) and the provisions of this
Agreement constituting the Agreement of the parties to purchase and sell the Property, the
latter provisions shall control.
D. Indemnification. The parties agree to hold Escrow Holder joint and
severally free and harmless from any loss or expense, including attorney's fees, that may be
suffered by it by reason thereof, excepting that the foregoing shall not release Escrow Holder
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from any liability for its negligence or misconduct or its breach of any of the provisions of
the escrow instructions.
E. Nonliability of Escrow Holder. Escrow Holder shall not be liable for the
sufficiency or correctness as to form, manner, or validity of this Agreement, or any
amendments or supplements added into Escrow at a later point in time.
NDITIONS TO THE CLOSE OF ESCROW.
A. Conditions Precedent to Buyer's Obligations. The Close of Escrow and
Buyer's obligations with respect to the transaction contemplated by this Agreement are
subject to the satisfaction of the following conditions, and the obligations of the parties with
respect to such conditions are as follows:
1. Tills. Buyer shall have approved the legal description of the Property
and any matters of title respecting the Property, including those matters disclosed by the
following documents and instruments ("Title Documents"):
a. A preliminary title report for an ALTA Extended Policy (the
"Title Policy") dated as of the date of this Agreement issued by Escrow Holder with respect
to the Property; and
b. Copies of all documents, whether recorded or unrecorded,
referred to in the preliminary title report for the Property.
Seller shall cause Escrow Holder to deliver the Title Documents to Buyer
within fifteen (15) days after the opening of Escrow. Buyer shall have at least thirty (30)
days to disapprove of the Title Documents. Seller shall, within fifteen (15) days of Buyer's
disapproval, give Buyer written notice that Seller intends to eliminate from the Title Policy
those exceptions to title to the Property objected to by Buyer. Seller shall then eliminate by
the Closing Date those disapproved matters set forth in Seller's title notice from the Title
Policy and as exceptions to title to the Property. If Seller does not elect to eliminate any
matter disapproved by Buyer or if Buyer disapproves Seller's title notice, then this condition
shall be deemed to have failed, unless subsequently waived by Buyer in writing.
2. Review and Approval of Documents. Within fifteen (15) days of
Escrow opening, Seller shall deliver to Buyer for Buyer's review and approval the following
documents and materials:
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a. Contracts. A list and copies of all contracts relative to the
Property.
b. Records and Plans. A list and copies of all records and plans in
Seller's possession or control.
C. Seller's Statement. A written statement executed by Seller
providing that, to the best of Seller's knowledge, there are no material defects in and no
material adverse facts concerning the Property, except as otherwise disclosed in such
statement.
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Remediation.
a. Before the Closing Date, Buyer shall have approved the results
of any and all inspections, investigations, tests and studies (including, without limitation,
investigations with regard to zoning, building codes, lot line adjustments, engineering tests,
utilities' connections, soils, seismic and geologic reports), if any, or otherwise initiated by
Buyer.
4. Title Insurance. As of the Close of Escrow, Escrow Holder shall
have issued the Title Policy (as provided in Section X) to Buyer.
5. Land Use Approvals. Buyer shall have received necessary final
land use approvals from City for a motor vehicle sale operation on the Site.
6. City Financial Assistance. Seller acknowledges that Buyer is acquiring
two adjacent parcels of land from third -party owners in addition to the Property (altogether
the "Site") to assemble an adequate development pad for Buyer's intended use. Seller further
acknowledges that such assembly and the cost of improving the entire Site will result in
extraordinary costs to Buyer. Seller, therefore, shall provide necessary assistance to Buyer
to develop a useable pad for the intended use, as follows:
a. The parties hereto shall enter into a Sales Tax Guarantee and
Right -of -Way Improvement Reimbursement Agreement, in substantially the form attached
hereto as Exhibit A and made a part herein by reference.
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B. Conditions Precedent to Seller's Obligations. The Close of Escrow and
Seller's obligations with respect to the transactions contemplated by this Agreement are
subject to the satisfaction, by the dates specified below, of the following conditions:
1. Buyer's Purchase Price. On or before the Closing Date, Buyer shall
have delivered to Escrow Holder for disbursement as provided herein, the Purchase Price and
any required backup documents.
C. Failure of Conditions to Close Escrow. hi the event any of the conditions set
forth in this section are not timely satisfied or waived, for any reason other than the default
of Buyer or Seller under this Agreement:
1. This Agreement, the Escrow and the rights and obligations of Buyer and
Sellers shall terminate, except as otherwise provided herein; provided, however, no such
termination shall occur until the party for whose benefit such condition exists (a) has had the
opportunity to waive such conditions within three (3) business days after receipt of written
notice from the other party, and (b) does not elect to waive such condition; and
2. Seller, Buyer and Escrow Holder shall promptly return all documents
and funds which are held by them on the date of said termination to the party who delivered
or deposited them hereunder, including return by Seller of the Deposit and interest thereon
to Buyer.
D. Cancellation of Fees and Expenses. In the event Escrow terminates
because of the nonsatisfaction of any condition for a reason other than the default of Buyer
or Seller under this Agreement, the cancellation charges required to be paid by and to
Escrow Holder shall be borne one-half ('/z) by Seller and one-half ('/z) by Buyer and all other
charges shall be borne by the party incurring same.
A. By Seller. Seller hereby covenants and agrees to deliver or cause to be
delivered to Escrow Holder on or prior to the Closing Date the following instruments and
documents, the delivery of each of which shall be a condition to the performance by Buyer
of its obligations under the terms of this Agreement.
1. Grant Deed. The Grant Deed, duly executed and acknowledged in
recordable form by Seller, conveying the Property to Buyer subject only to the Approved
Title Conditions.
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2. Non -Foreign Certification. A certification duly executed by
Seller under penalty of perjury in the form of, and upon the terms set forth in, the
Transferor's Certificate of Non -Foreign Status ("FIRPTA Certificate"), setting forth Seller's
office address and federal tax identification number and certifying that Seller is a "United
States Person" and that Seller is not a "foreign person" in accordance with and/or for the
purpose of the provisions of Sections 7701 and 1445 (as may be amended) of the Internal
Revenue Code of 1954, as amended, and any regulations promulgated thereunder.
3. Proof of Authority. Such proof of Seller's authority and authorization
to enter into this Agreement and consummate the transactions contemplated hereby, and such
proof of the power and authority of the individuals 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 Escrow Holder and/or Buyer.
4. Lien Affidavits. Any lien affidavits or mechanic's lien
indemnifications as may be reasonably requested by Escrow Holder in order to issue the
Title Policy.
B. ByBuyer. Buyer hereby covenants and agrees to deliver or cause to be
delivered to Escrow Holder on or prior to the Closing Date the following instruments and
documents, the delivery of each of which shall be a condition to the Close of Escrow.
Purchase Price. The Purchase Price in accordance with Sections
II and III of this Agreement.
2. Prorations. The amount due Seller, if any, after the proration are
computed in accordance with Section XII below.
SECTION D{. DELIVERIES TO BUYER UPON CLOSE OF ESCROW. Seller
hereby covenants and agrees to deliver to Buyer, on the Closing Date, exclusive possession
of the Property and the following items, the delivery of which shall be a condition to the
performance by Buyer of its obligations under the terms of this Agreement:
A. Original Documents. Originals of all contracts specifically approved by
Buyer herein, and all licenses, permits, or other related documents affecting the Property.
B. Termination Agreements. Executed termination agreements or other evidence
reasonably satisfactory to Buyer that all contracts, if any, respecting the Property
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which have been disapproved by Buyer have been terminated effective upon the Close of
Escrow at no cost to Buyer or the Property.
SECTION X. TITLE INSURANCE. At the Close of Escrow, Seller shall cause
the Escrow Holder to issue or commit to issue to Buyer an ALTA Extended Form Owner's
Policy of Title Insurance with any title endorsements reasonably requested by Buyer showing
fee title to the Property vested in Buyer subject only to the Approved Title Conditions. The
Title Policy shall be issued with liability in an amount equal to the Purchase Price.
SECTION XI. COSTS AND EXPENSES. All costs and expenses associated
with the Escrow shall be shared equally between Buyer and Seller. Seller shall bear the cost
of the ALTA Extended Form Owner's Policy of Title Insurance.
A. General. Subject to the provisions of Section X111 below, all expenses, if
any, affecting the Property shall be paid or shall be prorated as of 11:59 p.m. on the Closing
Date. For purposes of calculating prorations, Seller shall be deemed to be in title to the
Property, and therefore responsible for the expenses for the entire day upon which the Close
of Escrow occurs. Any apportionments and prorations which are not expressly
provided for herein shall be made in accordance with customary practice in Orange County.
Such adjustments, if and to the extent known and agreed upon as of the Close of Escrow,
shall be paid by Buyer to Seller (if the prorations result in a net credit to Seller) or by Seller
to Buyer (if the proration result in a net credit to Buyer), by increasing or reducing the cash
or cash equivalent to be paid by Buyer at the Close of Escrow. Any such adjustments not
determined or not agreed upon as of the Close of Escrow shall be paid by Buyer to Seller,
or by Seller to Buyer, as the case may be, in cash or cash equivalent as soon as practicable
following the Close of Escrow.
B. Taxes and Assessments. All non -delinquent real estate taxes and
assessments on the Property shall be prorated based upon the actual current tax and
assessment bills; provided, however, if the real estate tax bill has not yet been received by
Seller by the Closing Date, then current year's real estate taxes shall be deemed to be One
Hundred Two Percent (102%) of the amount of the previous year's tax bill. If, after the Close
of Escrow, any supplemental real estate taxes are assessed against the Property pursuant to
Revenue and Taxation Code section 75-75.80, inclusive, by reason. of any event occurring
prior to the Close of Escrow, Seller shall pay such taxes to Buyer within ten (10) days after
demand by Buyer therefor. All liens, all delinquent taxes and all delinquent installments of
assessments on the Property shall be paid for by Seller at the Close of Escrow from funds
accruing to Seller without contribution or proration from Buyer.
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SECTION XIII. DISBURSEMENTS AND OTHER ACTIONS BY ESCROW
HOLDER. At the Close of Escrow, Escrow Holder shall promptly undertake all of the
following in the manner hereinbelow indicated:
A. Funds. Disburse all funds deposited with Escrow Holder by Buyer in
payment of the Purchase Price as follows:
Deduct and pay all items chargeable to the account of Seller;
2. If, as the result of the proration and credits, amounts are to be charged
to account of Seller, deduct and/or pay the total amount of such charges;
Disburse the balance of the Purchase Price to Seller promptly upon the
Close of Escrow;
4. Disburse the remaining balance of the funds, if any, to Buyer or other
third parties as directed by the terms of this Agreement.
B. Regordine. Cause the Grant Deed (with documentary transfer tax
information to be affixed after recording, and any other documents which the parties hereto
may mutually direct to be recorded in the Official Records, and obtain conformed copies
thereof for distribution to Buyer and Seller.
C. Title Policy. Direct Escrow Holder to issue the Title Policy to Buyer.
D. Disbursement of Documents to Buyer. Disburse to Buyer all documents
deposited into Escrow by Seller pursuant hereto, including the FIRPTA certificate, executed
by Seller.
E. Disbursement of Documents to Seller. Disburse to Seller all documents
deposited into Escrow by Buyer pursuant hereto.
SECTION XIV. SELLEWS REPRESENTATIONSAND WARRANTIES.
In addition to any express agreements of Seller contained herein, the following
constitute representations and warranties of Seller to Buyer:
A. Power and Authority. Seller has the legal power, right and authority to
enter into this Agreement and the instruments referenced herein, and to consummate the
transactions contemplated hereby. The individuals executing this Agreement and the
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instruments referenced herein on behalf of Seller have the legal power, right and actual
authority to bind Seller to the terms and conditions hereof and thereof.
B. Requisite Action. All requisite action (corporate, trust, partnership, or
otherwise) has been taken by Seller in connection with entering into this Agreement, the
instruments referenced herein, and the consummation of the transactions contemplated
hereby.
C. Validity. This Agreement and all documents required hereby to be
executed by Seller are and shall be valid, legally binding obligations of and enforceable
against Seller in accordance with their terms. Neither the execution and delivery of this
Agreement and documents referenced herein, nor the consummation of the transactions
contemplated herein, conflict with or result in the breach of any terms or provisions of any
contract, understanding or agreement to which Seller is a party or affecting the Property. All
consents, approvals and authorizations necessary for the execution of this Agreement and the
consummation of the transactions contemplated herein by Seller have been obtained. Seller
has not sold, conveyed or entered into any contract for the sale of all or any portion of the
Property or any rights incidental thereto, nor do there exist any rights of first refusals or
options to purchase the Property or any rights incidental thereto, except as provided for in
this Agreement.
D. Lawsuits and Claims. There are, and at the Close of Escrow there will
be, no pending actions, lawsuits, claims or judicial, municipal or administrative proceedings
affecting all or any portion of the Property or in which Seller is or will be a party by reason
of Seller's ownership of the Property. To the best of Seller's knowledge, there are no
threatened or contemplated actions, lawsuits, claims or proceedings, nor the existence of any
facts which might give rise to such actions, lawsuits, claims or proceedings. Seller will not
commence or defend an action with respect to the Property except upon such terms as are
mutually acceptable to Seller and Buyer.
E. Taxes and Assessments. Other than the amounts disclosed by the tax bills
delivered to Buyer and Seller, no other real property taxes have been or will be assessed
against the Property for the current tax year. To the best of Seller's knowledge, no special
assessments or charges have been or will be levied against the Property for any existing
public improvements or otherwise or will result from work, activities, or improvements done
to the Property by Seller.
F. Hazardous Materials. Seller hereby represents and warrants that, to the
best of Seller's knowledge, and except as otherwise disclosed by those certain environmental
reports prepared for Seller with respect to the Property, copies of which are in possession of
Seller and Buyer, that no hazardous materials are located on or under the Property; that there
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has been no release, storage, treatment, generation or disposal of any hazardous materials on,
under, or from the Property; and that no hazardous materials have been transported from the
Property.
G. Leases and Contracts. There are, and prior to the Close of Escrow, will
be, no oral or written leases, subleases, licenses, occupancies or tenancies in effect pertaining
to the Property, and no persons or entities occupy or have the right to occupy or use all or
any portion of the Property. There are no service or maintenance contracts, warranties,
guarantees, bonds, insurance policies or other agreements (whether oral or written) which
will affect or be obligations of the Buyer or the Property following the Close of Escrow,
other than the contracts and Title Documents approved herein. At the Close of Escrow, Seller
shall deliver possession of the Property to Buyer free of actual occupancy and any right of
occupancy by any party, and, except as otherwise provided in this Agreement, all contracts
and Title Documents disapproved by Buyer will be terminated by Seller, at Seller's sole cost
and expense, at or prior to the Close of Escrow.
H. Chanties. Seller shall promptly notify Buyer of any change in any condition
with respect to the Property or of any event or circumstance which makes any representation
or warranty of Seller under this Agreement untrue, misleading, or any covenant of Buyer
under this Agreement incapable or less likely of being performed, it being understood that
the Seller's obligation to provide notice to Buyer shall in no way relieve Seller of any
liability for a breach by Seller of any its representations, warranties, or covenants under this
Agreement.
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In addition to any express agreements of Buyer contained herein, the following
representations and warranties of Buyer and Seller:
A. Power and Authority. Buyer has the right, power, and authority to enter
into this Agreement and the instruments referenced herein, and to consummate the
transactions contemplated hereby. The individuals executing this Agreement and the
instruments referenced herein on behalf of Buyer have the legal power, right and actual
authority to bind Buyer to the terms and conditions hereof and thereof.
B. Validity. This Agreement and all documents required hereby to be
executed by Buyer are and shall be valid, legally binding obligations of and enforceable
against Buyer in accordance with their terms. All consents, approvals and authorizations
necessary for the execution of this Agreement and the consummation of the transactions
contemplated herein by Buyer will have been obtained at the time of City Council approval
of this Agreement.
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SECTION XVI. NOTICES. All notices required under this Agreement shall be
personally delivered, or mailed by first class mail, postage prepaid, as follows:
SELLER:
CITY OF SAN JUAN CAPISTRANO
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attn: City Manager
C
BLUE SKY PROPERTIES
11404 E. Imperial Hwy
Norwalk, CA 90650
Attn: Orval Paul or Steve Paul
SECTION XVII. BROKERS. a broker's commission shall be paid from Seller's sale
proceeds as follows:
To: Overland Resources
Amount: Ten percent (10%) of the Purchase Price.
SECTION XVIII.NE TRY. Buyer, or its agents, shall have the right, at reasonable
times and upon reasonable notice to Seller to enter upon the Property, for any purpose in
connection with its proposed purchase, including but not limited to, inspection of all books,
records and files of Seller relating to the Property. In this regard, Buyer hereby indemnifies
Seller from any and all liabilities and losses relating to property damage or personal injury
arising out of Buyer's, or its agents', inspection of the Property.
SECTION XIX. DISPUTES. In the event of a dispute between the parties, each agrees
to first formally meet and confer regarding the matter. If the dispute cannot be resolved
through a meet and confer session, the matter will then be referred to non-binding mediation.
If non-binding mediation is not successful, the parties shall determine in writing whether
binding arbitration is appropriate. Thereafter, judicial remedies shall be available to resolve
the dispute.
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A. Waivers. No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any
other covenant, or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance of any other
obligation or act.
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B. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the heirs, successors, and assigns of each parry to this Agreement.
C. Entire Agreement. This Agreement is the final expression of, and contains
the entire Agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not be
modified, changed, supplemented or terminated, nor may any obligations hereunder be
waived, except by written instrument signed by the party to be charged or by its agent duly
authorized in writing or as otherwise expressly permitted herein. The parties do not intend
to confer any benefit hereunder on any person, firm or corporation other than the patties
hereto.
D. Time of Essence. Time is strictly of the essence to this Agreement.
E. Governing Law. The laws of the State of California shall govern the
construction and enforcement of this Agreement.
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F. Negotiated Transaction. The provisions of this Agreement were negotiated,
drafted and prepared by all the parties hereto and no party shall be deemed to have been the
author of any particular term or conditions contained herein.
IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale
Agreement as of the date and year hereinabove written.
ATTEST:
By:
Cheryl Jo so , City Clerk
APPROVED AS TO FORM:
By:
Jo I
Shaw, City Attorney
SELLER:
CITY OF SAN JUAN CAPISTRANO
City Manager
BUYER:
BLUE SKY PROPERTIES, LTD.
By: QiQ �
Orval A. faul
Managing Partner
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