HomeMy WebLinkAboutReso 14-26 Approving Purchase and Sale Agreement for Morro Elementary - signed
RESOLUTION NO. 14-26
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF MORRO BAY, CALIFORNIA
APPROVING THE REAL ESTATE AGREEMENT FOR THE PURCHASE
OF THE FORMER MORRO ELEMENTARY SCHOOL PROPERTY
LOCATED AT 1130 AND 1330 NAPA AVENUE
IN MORRO BAY, CALIFORNIA
T H E C I T Y C O U N C I L
City of Morro Bay, California
WHEREAS, the San Luis Coastal Unified School District (District) owns the real property
located at 1130 and 1330 Napa Avenue, Morro Bay, California (APNs 066-280-045 and 066-044-
011); and
WHEREAS, the District and City have engaged in discussions regarding the District selling
the property to the City; and
WHEREAS, pursuant to Government Code section 37350, the City wishes to acquire 1130
and 1330 Napa Avenue, Morro Bay, California (APNs 066-280-045 and 066-044-011) for the
common benefit of its citizens; and
WHEREAS, the City has negotiated the attached Real Estate Agreement with the Seller
of the property for with a purchase price of $5,300,000; and
WHEREAS, the $500,000 deposit towards the purchase of the property must be added to
the Fiscal Year 2025-26 General Fund Expenditure Budget.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Morro Bay
does hereby:
1. Approve the Real Estate Purchase Agreement (Agreement) for the purchase of
1130 and 1330 Napa Avenue, Morro Bay, California (APNs 066-280-045 and 066-
044-011) in substantially the form attached, subject to review and approval by the
City Attorney; and authorize the City Manager to execute the Agreement and
related escrow documents, and to negotiate and execute non-substantive
amendments consistent with the terms approved by Council, subject to review and
approval by the City Attorney as to form and legal effect.;
2. Find the proposed purchase of the Property is not subject to CEQA (Public
Resources Code Section 21000 et seq.) pursuant to CEQA Guidelines (California
Code of Regulations, Title 14, Section 15000 et seq.), as the activity will not result
in a direct or reasonably foreseeable indirect physical change in the environment
and is consistent with CEQA Guidelines Section 15378(b)(5), as it constitutes
organizational or administrative actions of the City that do not result in direct or
indirect physical changes on the environment. Additionally or alternatively, find the
City’s action is exempt from CEQA under CEQA Guidelines Section 15061(b)(3)
as it can be seen with certainty that there is no possibility the activity in question
may have a significant effect on the environment because the proposed purchase
involves no physical changes to the environment and the City would assume
operation and maintenance of the structures consistent with current and historical
uses, and Section 15301 Class 1 categorical exemption for the operation of
existing facilities involving negligible or no expansion of existing or former use.
Further, none of the exceptions to exemptions, found in Section 15300.2 of the
State CEQA Guidelines would apply to invalidate the categorical exemptions
identified because (a) the site is not located in a sensitive environment; (b) the
acquisition would not create significant cumulative impacts by contributing to
impacts of successive acquisitions of the same type in the same place; (c) there is
no potential for the acquisition to result in a significant effect on the environment
due to unusual circumstances; (d) the acquisition would not result in damage to
scenic resource; (e) the site is not included on any list compiled pursuant to Section
65962.5 of the Government Code; and (f) the acquisition does not have the
potential to cause a substantial change to the significance of an historical resource.
Although a portion of the Property has been identified as a potential historical
resource, the City’s action does not contemplate any modification or expansion of
the current use and/or operation thereof at this time.
3. Approve the following Budget Amendment for $500,000.
Expenditure Budget Amendment
Fund Dept Acct Increase G/L
General Fund City Facilities Buildings and
Structures
$500,000 001-7210-7102
PASSED AND ADOPTED by the City Council, City of Morro Bay at a regular meeting
thereof held on the 10th day of March 2026 by the following vote:
AYES: Wixom, Eckles, Edwards, Landrum, Luffee
NOES: None
ABSENT: None
ABSTAIN: None
RECUSE: None
_______________________________
CARLA WIXOM, Mayor
ATTEST:
___________________________
DANA SWANSON, City Clerk
Carla Wixom (Mar 25, 2026 17:59:21 PDT)
Carla Wixom
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AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
AND JOINT ESCROW INSTRUCTIONS
BETWEEN
THE SAN LUIS COASTAL UNIFIED SCHOOL DISTRICT
AND
CITY OF MORRO BAY
This Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions
(“Agreement”) is entered into as of March ___, 2026 (“Effective Date”), by and between the
San Luis Coastal Unified School District, a public corporation (“Seller”), and City of Morro
Bay, a municipal corporation (“Buyer”). Seller and Buyer may also be referred to in this
Agreement singularly as a “Party” and collectively as the “Parties.”
RECITALS
A. Seller is the fee owner of +/- 9.70 acres of real property commonly known as the
former site of Morro Elementary School, located at 1130 Napa Avenue, Morro Bay, California,
93442, Assessor’s Parcel Numbers 066-044-011 and 066-280-045, and as more particularly
described in Exhibit A attached hereto and incorporated herein (the “Land”), together with any
and all Appurtenances, Improvements, Personal Property, Contracts, Leases, and Intangible
Property (all as defined in Section 1.1) (collectively, with the Land, the “Property”).
B. Seller provided Buyer with certain statutory notices pursuant to Education Code
sections 17464 and 17485, et seq., regarding the availability of the Property for purchase, and
Buyer expressed interest in purchasing the Property, leading to negotiation of this Agreement.
C. In accordance with the terms, provisions, and requirements of the California
Surplus Land Act, California Government Code sections 54220 et seq. (the “Act”), Seller’s
Governing Board adopted a resolution on December 17, 2024, declaring the Property to be
“exempt surplus land” for purposes of the Act, pursuant to section 54221, subdivision (b)(1), and
former section 54221, subdivision (f)(1)(L)(i) of the California Government Code. On October
28, 2025, Seller received a determination letter from the Department of Housing and Community
Development confirming that the Property qualifies as “exempt surplus land” within the meaning
of the Act.
D. Buyer wishes to purchase the Property from Seller, and Seller desires to sell the
Property to Buyer, on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby
incorporated into this Agreement as if set forth in full herein and deemed a contractual part
hereof, the mutual covenants and promises hereinafter set forth, and for other good and valuable
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consideration, the receipt and sufficiency of which are hereby acknowledged, each intending to
be legally bound, the Parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale of the Property. Subject to the terms and conditions that follow, Seller
shall sell to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and
interest in the Land, subject only to the Permitted Exceptions (as defined in Section 4.5)
below), and all of the following in respect of the Land:
(A) all rights, privileges, easements, appurtenances, and other estates pertaining or
appurtenant to the Land, including, without limitation, all easements, rights,
mineral rights, oil and gas rights, water, water rights, water and other utility
meters, air rights, off-site parking rights, and any rights-of-way and other
appurtenances used or connected with the beneficial use or enjoyment of the Land
and all of Seller’s right, title and interest, if any, in and to all roads and alleys
adjoining or servicing the Land (collectively, the “Appurtenances”);
(B) all existing buildings, improvements and fixtures, if any, located on the Land,
including, without limitation, heating, ventilation and air condition, electrical and
other utility systems and facilities, if any, serving the existing buildings
(collectively, the “Improvements” and together with the Land and
Appurtenances, the “Real Property”);
(C) all of Seller’s right, title and interest in any unaffixed personal property that (a)
the Parties agree shall remain on the Real Property or (b) the Seller leaves on the
Real Property after the Closing Date (collectively, the “Personal Property”);
(D) all contracts and agreements, if any, existing on the Effective Date, (collectively,
the “Contracts”), in each case to the extent (a) Buyer elects to receive assignment
of such Contract by written notice to Seller during the Due Diligence Period, (b)
such Contracts are assignable without consent or cost and (c) such Contracts
remain in effect subsequent to the Closing;
(E) all leases (including any guaranties thereof), rental agreements, license
agreements and other agreements for the occupancy of the Real Property, or other
possessory interests by third parties on the Property, if any, existing on the
Effective Date (collectively, the “Leases”), in each case to the extent such Leases
(a) remain in effect subsequent to the Closing, or (b) relate to a tenant who
remains in possession of any portion of the Real Property on the Closing Date (as
defined in Section 3.1); and
(F) all of Seller’s right, title and interest in any intangible property used and necessary
in connection with the Real Property to the extent assignable, including, without
limitation, all warranties, guaranties, development rights, entitlements,
governmental permits, licenses, certificates, other governmental approvals,
deposits, refund rights and credits with governmental, quasi-governmental or
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utility agency, if any, which benefit the Real Property and/or the Personal
Property, all surveys, reports, plans, specifications, drawings, appraisals, reports
and studies, and all applications, plans, drawings, designs, signs, logos, trade
names, trademarks, service marks, styles or similar intellectual property owned by
Seller and used exclusively with respect to the Property, all social media accounts
(if any) with respect to the Property, all marketing and merchandising materials
(including, but not limited to, signs, advertisements, brochures, project names,
logos, and all computer source disk materials for the foregoing items)
(collectively, the “Intangible Property”).
1.2 Condition of Property. Upon the Close of Escrow, Buyer shall acquire the Property in its
“AS-IS” condition by a fully executed Grant Deed as set forth in the form attached as
Exhibit B (“Grant Deed”). Except as expressly set forth in this Agreement or any other
documents delivered by Seller in connection with the sale of the Property, Seller makes
no representation or warranty concerning the physical, environmental, geotechnical, or
other condition of the Property, the suitability of the Property for the Buyer’s use, or the
present use of the Property, and specifically disclaims all representations or warranties of
any nature concerning the Property made by Seller and its employees, agents and
representatives. The foregoing disclaimer includes, without limitation, topography,
climate, air, water rights, utilities, present and future zoning, soil, subsoil, existence of
Hazardous Materials or similar substances, the purpose for which the Property is suited,
or drainage. Seller makes no representation or warranty concerning the compaction of
soil upon the Property, nor the suitability of the soil for construction. Buyer
acknowledges and agrees that it will have, as of the Closing Date, fully inspected the
Property and that Seller the Property will be sold to Buyer in an “as is” condition, with all
existing defects, whether patent or latent, including, without limitation, the exact area and
size of the Property, the physical environmental, and geotechnical condition of the
Property, and the existence of any contamination, Hazardous Materials (as defined
below), debris, or other structures located on, under or about the Property.
1.3 Purchase Price.
(A) Except as otherwise provided herein, the purchase price of the Property shall be
Five Million Three Hundred Thousand Dollars ($5,300,000.00) (“Purchase
Price”), which shall be paid through Escrow, as defined below.
(B) Within three (3) business days of Effective Date, Buyer shall deposit into Escrow
with the Title Company cash in the amount of Five Hundred Thousand Dollars
($500,000.00) (“Deposit”).
(C) Buyer will pay the Purchase Price to Seller through Escrow. Escrow shall be
opened at Chicago Title Company (“Escrow Holder” or “Title Company”) at
the address specified in Article 5 below.
1.4 Deposit. Upon the expiration of the Feasibility Period, the Deposit shall become non-
refundable to Buyer except in the event of a default by Seller, a failure of Seller to deliver
title to the Property as provided in Section 4.5, or as otherwise provided in this
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Agreement. The Deposit shall be applied to the Purchase Price due at Closing (as defined
below).
1.5 Due Diligence and Feasibility. Buyer shall have the period commencing on the Effective
Date and ending on August 31, 2026 (“Feasibility Period”), to review the condition of
the Property and conduct any and all appropriate environmental, geological, engineering,
safety and other inspections it determines necessary, in Buyer’s sole and absolute
discretion, or any such inspections as required by state and local law so as to ensure that
the Property complies with all state and local requirements applicable to Buyer’s
proposed use of the Property (collectively, “Buyer’s Inspections”). Buyer’s obligation
to purchase the Property is conditioned upon the following: (i) Buyer’s approval of and
satisfaction with the physical condition of the Property, and all tests, inspections, and
studies to be conducted by Buyer, including, without limitation, any environmental
assessments; and (ii) Buyer’s determination that the Property is suitable for Buyer’s
intended use.
(A) Prior to the end of the Feasibility Period, Buyer shall provide written notice to
Seller of either its satisfaction with the condition of the Property (or its waiver
thereof) or its determination that the Property does not meet the above stated
conditions, in which case this Agreement shall terminate, the Escrow shall be
cancelled (with the costs of Escrow to be paid by Buyer) and the Deposit shall be
returned to Buyer. Buyer’s failure to provide written notice to Seller within the
Feasibility Period shall be deemed Buyer’s disapproval of the condition of the
Property.
(B) Within ten (10) days after the Effective Date, Seller shall deliver to Buyer for
Buyer’s review copies of the following, to the extent such items are in Seller’s
possession or control: all reports related to Hazardous Materials on or under the
Property, all soil tests, geological and environmental reports, plans, surveys,
engineering studies or other technical reports relating to the Property
(collectively, the “Purchase Documents”).
(C) During the Feasibility Period, Seller shall permit Buyer and its authorized agents
(“Buyer’s Agents”) to enter onto the Property, at reasonable times and upon
reasonable notice, for the purpose of performing Buyer’s Inspections. Buyer shall
conduct any such Buyer’s Inspections so as not to unreasonably interfere with
Seller’s operation of the Property and otherwise in a manner reasonably
acceptable to Seller. In addition, Buyer shall notify Seller, in writing, if it intends
to conduct any invasive testing on the Property. In the event Buyer performs
invasive testing or destructive investigation of the Property and the sale is not
consummated between the Parties, Buyer shall be responsible for returning the
Property to the substantially the same condition existing prior to Buyer’s invasive
testing or destructive investigation of the Property.
(D) In the event that Buyer discovers the presence of Hazardous Materials, as defined
below, on, under or about the Property, in a material amount during the Feasibility
Period, which Hazardous Materials were not the result of Buyer’s activities on the
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Property, Buyer shall notify Seller of such discovery within seventy-two (72)
hours thereof. If the Parties are unable to agree upon a plan for the remediation of
the Hazardous Materials or if Seller is unwilling to perform the remediation or
pay Buyer to perform the remediation, including the costs to obtain government
approvals of the remediation plan and remediation work performed, then Buyer
may terminate this Agreement upon written notice to Seller. The Deposit shall be
returned to Buyer and the Parties shall equally share to cost of escrow.
(E) Buyer shall indemnify, defend, and hold the Real Property and Seller, its
governing board, employees, representatives, and agents harmless from and
against any and all third-party damages, demands, claims, losses, liabilities,
injuries, penalties, fines, liens, judgments, suits, actions, investigations,
proceedings, costs or expenses whatsoever (including, without limitation,
reasonable attorneys and experts fees and costs and, in the event of any release of
Hazardous Materials caused by Buyer, investigation and remediation costs)
arising out of or relating to any physical harm, physical damage, or personal
injury or death caused by entry on the Property by Buyer or its agents, employees
or contractors in the course of performing the Buyer Inspections, but excluding
the mere discovery of a pre-existing condition not exacerbated by Buyer, and
except to the extent caused by Seller or any of its employees, representatives or
agents. Without limiting the generality of the foregoing indemnity, Buyer shall
promptly remove any mechanic’s or other lien which may be recorded against the
Property by any party providing labor, materials or services at the request of
Buyer. The foregoing indemnity shall survive beyond the Close of Escrow, or, if
the sale is not consummated, beyond the termination of this Agreement.
(F) Buyer and its contractors shall maintain commercial general liability insurance
insuring Buyer and its contractors against any liability arising out of or in
connection with any entry or inspection of the Property and all areas appurtenant
thereto. Such insurance shall be in the amount of One Million Dollars
($1,000,000.00) combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss of
use) in an occurrence, with a general aggregate of Two Million Dollars
($2,000,000.00). Any such policy shall insure the contractual liability of Buyer
covering the indemnities herein and shall (a) name Seller as an additional insured,
(b) contain a cross-liability provision, and (c) contain a provision that “the
insurance provided by Buyer hereunder shall be primary and noncontributing with
any other insurance available to Seller.” Buyer shall be required to provide Seller
with written evidence of such insurance coverage prior to any entry or inspection
of the Property.
1.6 Independent Consideration. Concurrently with the execution of this Agreement, Buyer
shall pay and deliver to Seller the sum of One Hundred Dollars ($100.00) as separate and
independent consideration (“Independent Consideration”) for Seller’s execution of this
Agreement and agreement to sell the Property to Buyer on and subject to the terms and
conditions of this Agreement, including, without limitation, Buyer’s right to terminate
this Agreement prior to the expiration of the Feasibility Period in connection with its
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investigations. The Independent Consideration shall not be applicable to the Purchase
Price and is non-refundable to the Buyer in the event this Agreement terminates prior to
the Close of Escrow under any and all circumstances.
1.7 Leases; Operation of the Property Prior to the Closing.
(A) Seller shall not enter into, amend, or terminate any Lease(s) without obtaining
Buyer’s prior written consent, which shall be subject to Buyer’s sole and absolute
discretion. In the event that Seller enters into an amendment of any Lease(s),
Seller shall require tenant to execute an estoppel certificate in a commercially
reasonable form or in a form provided under the Lease. Notwithstanding the
foregoing, in no event shall Buyer’s consent be required for Seller to terminate
any Lease(s) if a tenant has materially breached the controlling lease agreement
between tenant and Seller, provided, however, Seller shall consult with Buyer
prior to termination of any Lease.
(B) With regard to any Lease(s) disclosed by Seller, Buyer may elect either to (a)
require Seller to terminate such Lease(s) prior to Close of Escrow, or (b) have
Seller assign the Lease(s) to Buyer at the Close of Escrow that Seller is able to
assign. Buyer shall communicate its election by written notice given prior to
expiration of the Due Diligence period. In the event Buyer elects for assignment
of any Lease, Seller shall cooperate with Buyer to obtain an estoppel certificate
executed by the tenant, which shall be in a commercially reasonable form or in a
form provided under the Lease. However, obtaining such estoppel certificate
shall not be a Condition of Closing.
(C) Between the Effective Date and the Closing Date, Seller shall continue to operate
and maintain the Property in the usual and ordinary course of business in a
manner substantially consistent with the operation and maintenance in place on
the Effective Date, unless otherwise agreed-to by the Parties in writing. Seller
shall take no action that would materially and adversely alter or affect the
condition of the Property.
(D) Seller shall terminate, effective prior to the Closing, any Contracts not being
assigned to Buyer at the Closing. Seller shall not enter into or amend any contract
that is not reasonably necessary for the normal operation of the Property and that
cannot be terminated on thirty (30) or fewer days’ notice, or waive, compromise
or settle any rights of Seller under any contract or other agreement affecting the
Property without, in each case, obtaining Buyer’s prior written consent, which
shall be subject to Buyer’s sole and absolute discretion.
(E) Seller shall keep in full force and effect all of the existing insurance policies
maintained by Seller respecting the Property or policies providing similar
coverage to the existing insurance policies.
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(F) Notwithstanding the foregoing, nothing in this Section 1.7 is intended to limit any
rights by third parties to exercise their right to terminate any Contract or Lease
with the Seller.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Seller’s Representations and Warranties. Seller represents and warrants the following to
Buyer:
(A) No Commitments or Agreements
Except as specifically disclosed to Buyer in writing, Seller has made no written
commitments or agreements materially and adversely affecting the Property, or
any part thereof, or any interest therein, which will survive the Close of Escrow.
(B) Liens
Except as set forth on the Preliminary Title Report, to the best knowledge of
Seller, there are no mechanics’, materialmen’s or similar claims or liens presently
claimed or which will be claimed against the Property for work performed or
commenced for Seller or on Seller’s behalf.
(C) Rights of Possession
Except as specifically disclosed to Buyer in writing, to the best knowledge of
Seller, there are not as of the date of this Agreement, nor will there be as of the
Close of Escrow, any written or oral leases or contractual right or option to lease,
purchase, or otherwise enjoy possession, rights or interest of any nature in and to
the Property and no persons shall have any right of possession to the Property as
of the Close of Escrow or at any time thereof.
(D) Ownership and Encumbrances
Seller has not and shall not, prior to Close of Escrow without the prior written
consent of Buyer, which consent may be given or denied in Buyer’s absolute
discretion, enter into any lien, encumbrance, easement or license agreement, or
any other agreement permitting others to use the Property, or any portion thereof,
or convey any part of the Property.
(E) Full Power and Authority
Neither this Agreement nor anything provided to be done hereunder including the
transfer of title to the Property to Buyer violates or shall violate any contract,
agreement or instrument to which Seller is a party. Seller has the full power and
authority to enter into this Agreement and consummate the transaction
contemplated hereby. The execution, delivery and performance of this
Agreement has been duly and validly authorized by the Seller’s Governing Board,
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and no other action by Seller is requisite to the valid and binding execution,
delivery, and performance of this Agreement by Seller.
(F) Litigation
Except as otherwise specifically disclosed to Buyer in writing, to the best
knowledge of Seller, there are no claims, proceedings, initiatives, referenda,
moratoria, resolutions, governmental investigations or litigations pending or, to
the best of Seller’s knowledge, threatened against Seller, which could materially
adversely affect Seller’s ability to consummate this transaction and convey the
Property to Buyer in accordance with the terms of this Agreement.
(G) Reports
To the best knowledge of Seller, Seller has made, or before the expiration of the
Feasibility Period will make, available to the Buyer all third-party professional
reports within its possession concerning the Property.
(H) Environmental Laws/Hazardous Materials
Except as disclosed in writing by Seller, to the best knowledge of Seller: (i) there
has been no production, storage or disposal on the Property of any Hazardous
Material (as defined below) by Seller or, to the best of Seller’s knowledge, by any
previous owner or tenant of the Property; (ii) Hazardous Materials have not been
dumped, buried, leaked, or otherwise released upon, in or under Property or
allowed to pass on, under or through the Property at any time during or prior to
Seller’s ownership of the Property; (iii) Seller has complied with all laws,
regulations, and ordinances (“Environmental Laws”) relating to the use of all
Hazardous Materials used on the Property; (iv) there is no proceeding or inquiry
by any federal, state or local governmental agency with respect to the use,
production, storage, release or migration of Hazardous Materials on, through or
across the Property; and (v) there is no contamination of Hazardous Materials on,
at, about, or within the Property, except as has been identified through Buyer’s
environmental Property assessment work. “Hazardous Material” means any
hazardous or toxic substance, material or waste that is: (i) regulated by any
governmental authority, the State of California or the United States; (ii) defined as
an “acutely hazardous waste,” “extremely hazardous waste,” “hazardous waste,”
or “waste” under Sections 25110.02, 25115, 25117, or 25124 of the California
Health and Safety Code, or listed pursuant to Sections 25141 and 25141.5 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste
Control); (iii) defined as a “hazardous material,” “hazardous substance,” or
“hazardous waste” under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory); (iv) defined as a “hazardous substance” under Section 25281 of the
California Health and Safety Code Division 20 Chapter 6.7 (Underground Storage
of Hazardous Substances); (v) petroleum; (vi) asbestos; (vii) listed under Chapter
10 Division 4.5 of Title 22 or defined as hazardous or extremely hazardous
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pursuant to Division 21.5 of Title 26 of the California Code of Regulations; (viii)
designated as a “hazardous waste” pursuant to Section 6903 of the Federal
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (ix)
defined as a “hazardous substance” pursuant to Section 9601 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq.; (x) any flammable substances or explosives; or (xi)
any radioactive material.
(I) Notices
To the best knowledge of Seller, Seller has made all disclosures and provided all
notices to Buyer which are required by Section 25359.7 of the California Health
and Safety Code.
(J) To the best knowledge of Seller, Seller is not in default of any of its obligations or
liabilities pertaining to the Property, nor are there any existing facts,
circumstances, conditions, or events that would constitute or result in any default
on the giving of notice, the passage of time, or both.
(K) Seller has not received written notice from any governmental agency that the
Property is in violation of any statute or regulation.
(L) Best Knowledge
For purposes of this Section 2.1, the phrase “best knowledge of Seller” means the
actual knowledge of Ryan Pinkerton, Assistant Superintendent of Business
Services, in his representative capacity, on behalf of, and for, the Seller only,
without any independent investigation having been made, and not based on any
implied, imputed or constructive knowledge of Seller, including all of its officers
and governing board members.
(M) If between the Effective Date and the Close of Escrow, Seller or Buyer becomes
aware of facts or circumstances which would make any of Seller’s representations
or warranties hereunder materially incorrect, such fact or circumstance shall not
be construed as a breach by Seller of such applicable representation or warranty
but Buyer shall have the right to either: (i) terminate this Agreement if such fact
or circumstance would have a material and adverse impact on the Property or
Buyer’s intended development or use thereof, or (ii) waive such condition and
proceed to Close of Escrow in accordance with this Agreement in which case the
representations and warranties of Seller hereunder shall be deemed modified and
remade to incorporate such fact or circumstance as an exception thereto. In the
event that Buyer exercises its right to terminate this Agreement, Seller shall return
the Deposit to Buyer.
2.2 Buyer’s Representations and Warranties. Buyer represents and warrants the following to
Seller:
(A) Ownership and Encumbrances
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Buyer shall not, prior to Close of Escrow without the prior written consent of
Seller, which consent may be given or denied in Seller’s absolute discretion, enter
into any lien, encumbrance, easement or license agreement, or any agreement
permitting others to use the Property, or any portion thereof, except as expressly
authorized by Section 1.5, above, or convey any part of the Property.
(B) Full Power and Authority
Neither this Agreement nor anything provided to be done hereunder including the
transfer of title to the Property to Buyer, violates or shall violate any contract,
agreement or instrument to which Buyer is a party. Buyer has the full power and
authority to enter into this Agreement and consummate the transaction
contemplated hereby. The execution, delivery and performance of this
Agreement has been duly and validly authorized by the City Council and no other
action by Buyer is requisite to the valid and binding execution, delivery, and
performance of this Agreement by Buyer.
(C) Litigation
Except as specifically disclosed to Seller in writing, or otherwise known to the
best knowledge of Seller, there are no actions, suits, claims, or legal or other
proceedings pending or threatened against Buyer, which does or will materially
adversely affect Buyer’s ability to consummate this transaction and to acquire the
Property from the Seller.
(D) Change of Representation or Warranty
In the event Buyer acquires knowledge that any such representation or warranty is
no longer accurate, Buyer shall advise Seller of same prior to Close of Escrow.
(E) Buyer has not:
(1) Made a general assignment for the benefit of creditors;
(2) Filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition by its creditors;
(3) Suffered the appointment of a receiver to take possession of all or
substantially all of its assets;
(4) Suffered the attachment or other judicial seizure of all, or substantially all,
of its assets;
(5) Admitted in writing its inability to pay its debts as they come due; or
(6) Made an offer of settlement, extension, or composition to its creditors
generally.
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(F) Environmental Laws and/or Hazardous Materials Release
Buyer, upon the Close of Escrow, will have been afforded the opportunity to conduct
appropriate environmental tests of the Property. Buyer hereby waives any claim against
Seller for any prohibited condition existing on the Property or violation of the
Environmental Laws unless the Seller intentionally and knowingly misrepresented any
material condition of the Property.
ARTICLE 3
CONDITIONS PRECEDENT AND SUBSEQUENT
3.1 Seller’s Conditions Precedent to Closing of Escrow. The obligation of Seller to complete
this transaction pursuant to this Agreement is subject to the satisfaction, at or before the
Close of Escrow, of the following conditions precedent (each a “Condition to Closing”):
(A) Buyer must pay the Purchase Price to the Seller by depositing sufficient funds
with the Escrow Holder in advance of the time necessary to close escrow pursuant
to Section 4.3 of this Agreement;
(B) Prior to the “Closing Date” (as hereinafter defined), Buyer will deposit with the
Escrow Holder the title insurance and escrow closing costs for which it is
responsible. The Escrow Holder will place all sums deposited into an Escrow
account;
(C) Escrow must not have been canceled or this Agreement terminated;
(D) Buyer’s covenants, representations, and warranties shown above are true as of the
Close of Escrow; and,
(E) Buyer must not be in breach or default of any of its obligations under this
Agreement.
The foregoing conditions precedent are for the benefit of Seller and may only be waived
in a writing signed by Seller. If any one of the conditions precedent set forth in this
Section is not satisfied or waived in writing prior to the Close of Escrow, Seller shall
have the right to terminate this Agreement and, absent Seller’s material default, except as
otherwise provided herein, retain the Deposit as liquidated damages.
3.2 Buyer’s Conditions Precedent to Closing of Escrow. The obligation of Buyer to
complete this transaction pursuant to this Agreement is subject to the satisfaction, at or
before the Close of Escrow, of the following conditions precedent (each, a “Condition to
Closing”):
(A) The Title Company will be committed to issue the “Title Policy” (as hereinafter
defined) in the name of the Buyer for marketable title, free of restrictions, liens,
and encumbrances except for those restrictions, liens, and encumbrances
specifically allowed by Section 4.4 below, the standard printed exceptions and
exclusions contained in the form of the Title Policy commonly used by the
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Escrow Holder, title exceptions resulting from documents being recorded or
delivered through Escrow pursuant to this Agreement, or otherwise approved in
writing by the Buyer;
(B) Escrow must not have been canceled or this Agreement terminated;
(C) Seller’s covenants, representations, and warranties shown above are true as of the
Close of Escrow;
(D) Seller must not be in breach or default of any of its obligations under this
Agreement, including, but not limited to, the delivery of the Grant Deed to
Escrow; and,
(E) Buyer shall have provided written notice to Seller of its satisfaction with the
condition of the Property or waived the conditions listed in Section 1.5.
The foregoing conditions precedent are for the benefit of Buyer and may only be waived
in a writing signed by Buyer. If any one of the conditions precedent set forth in this
Section is not satisfied or waived in writing prior to the Close of Escrow, Buyer shall
have the right either to: (i) terminate this Agreement, in which case Buyer shall be
entitled to a refund of its Deposit, unless the failure of a condition precedent is caused by
Buyer’s material default, or (ii) proceed and consummate the transaction.
3.3 Cooperation. Buyer and Seller agree that each will, in good faith, endeavor to remove all
said contingencies and conditions that are within its control.
ARTICLE 4
ESCROW PROVISIONS
4.1 Escrow, Escrow Holder, and Opening of Escrow. Buyer’s delivery to Escrow Holder of
a fully executed original of this Agreement constitutes the opening of Escrow.
4.2 Escrow Instructions. The Parties shall provide a copy of this Agreement and
supplemental escrow instructions, signed by both Parties, and any other document
necessary to consummate the sale/purchase of the Property and to the Close of Escrow as
contemplated by this Agreement to the Escrow Holder. Without limiting the effect of the
foregoing, Escrow Holder’s general conditions will be binding on Seller and Buyer. In
the event of any conflict between the provisions of this Agreement and the Escrow
Holder’s general conditions, this Agreement shall prevail.
4.3 Close of Escrow. Escrow for the Property shall close on or before October 31, 2026,
upon the recordation of the Grant Deed in accordance with the terms and conditions
hereof and Escrow Holder’s performance of all other tasks identified herein (“Close of
Escrow” or “Closing Date” or “Closing”). Any extension of the Close of Escrow shall
not be effective unless and until a fully executed (by Buyer and Seller) original of any
such written extension is provided to the Escrow Holder. In any event, the Close of
Escrow shall only occur after all conditions set forth in this Agreement have been
satisfied or waived.
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4.4 Preliminary and Supplemental Title Reports. Within five (5) days of the Effective Date,
Seller must instruct Escrow Holder to obtain and provide Buyer with a preliminary title
report with respect to the Property (“Preliminary Title Report”), together with copies of
the instruments underlying all exceptions that are referred to in the Preliminary Title
Report (collectively, the “Title Documents”). Buyer shall have thirty (30) days from
receipt of the Preliminary Title Report to review and approve the Preliminary Title
Report and the Title Documents. If Buyer fails to disapprove any item in the Preliminary
Title Report by a writing delivered to Seller and Escrow Holder within thirty sixty (60)
days of receipt, then Buyer will be conclusively considered to have approved the item. If
Buyer disapproves any item, Seller shall have a period of thirty (30) days after receipt of
Buyer’s notice of disapproval in which to deliver written notice to Buyer of Seller’s
election either to: (i) agree to remove or cure the objectionable items prior to the Close
of Escrow, or (ii) decline to remove or cure any such title exceptions. If Seller declines
to remove or cure any such disapproved title exceptions, Buyer shall, prior to expiration
of the Feasibility Period, provide written notice to Seller of its election to: (i) accept the
Property subject to the objectionable items, or (ii) cancel the Escrow and terminate this
Agreement. If Buyer fails to provide such written notice to Seller of its election prior to
the expiration of the Feasibility Period, then Buyer shall be conclusively considered to
have agreed to accept the Property subject to the objectionable items. If Buyer cancels
the Escrow and terminates this Agreement, then the Deposit shall be returned to Buyer.
4.5 Condition of Title. At the expiration of the Feasibility Period, all matters contained in the
Title Documents that Buyer has approved, or is considered to have approved, are
“Permitted Exceptions.” Seller must convey the Property to Buyer in fee simple title,
which must be, except for the Permitted Exceptions, free and clear of all known
mortgages, liens, charges, encumbrances, encroachments, easements, conditions,
exceptions, assessments, taxes, or other defects in title.
4.6 Escrow Closing Costs. Escrow and closing costs shall be paid by Buyer and Seller as
follows.
(A) Except as otherwise provided herein, Buyer shall pay the costs associated with
this transaction as follows:
(1) One-half the cost of obtaining a standard title coverage policy.
(2) The entire cost of obtaining any extended ALTA (American Land Title
Association) coverage title policy, survey, or endorsements, if Buyer
elects to incur such costs.
(3) One-half of the escrow charges related to this transaction.
(B) Except as otherwise provided herein, Seller shall pay the costs associated with
this transaction as follows:
(1) One-half of the cost of obtaining a standard title coverage policy.
(2) One-half of the escrow charges related to this transaction.
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(C) Current non-delinquent real estate taxes, if any, shall be prorated between Buyer
and Seller as of the Close of Escrow. All other escrow and closing costs shall be
paid per the custom of the County of San Luis Obispo, as determined by Title
Company.
4.7 Obligations of Buyer. If all of the conditions precedent have been met or waived, then by
Close of Escrow, Buyer must deposit with Escrow Holder, in immediately available
funds, the Purchase Price (less the amount of the Deposit), plus all other amounts for
which Buyer is responsible. Buyer must also deposit the following documents:
(A) A Preliminary Change of Ownership Statement, if required;
(B) All other sums and documents required by Escrow Holder to carry out and close
the Escrow pursuant to this Agreement, including Buyer’s portion of prorations, if
any;
(C) A Certificate of Acceptance of Grant Deed, duly executed and acknowledged by
Buyer; and,
(D) In the event that Buyer elects to have any Lease(s) assigned to Buyer, then an
assignment and assumption agreement that assumes all of Seller’s rights, title,
obligations, and interests under the lease with such tenant(s) from Seller, in a
form mutually agreed-to by the Parties.
4.8 Obligations of Seller. In addition to fulfilling any other obligations of Seller contained in
this Agreement, by Close of Escrow, Seller must deposit into Escrow:
(A) The Grant Deed in recordable form and duly signed and acknowledged by Seller;
(B) All sums for which Seller is responsible, including, but not limited to, any sums
necessary to cancel or pay taxes, special taxes, fees, charges, assessments, and
other sums necessary to deliver free and clear title subject only to the Permitted
Exceptions. Upon written authorization of Seller, such sums may be paid out of
the Purchase Price;
(C) Documents reasonably required of Seller by Escrow Holder to carry out Close of
Escrow. By the Close of Escrow, Seller must sign and deposit with Escrow
Holder an original California Form 593-C and Certification of Non-Foreign Status
(FIRPTA Certificate);
(D) Such proof of Seller’s authority and authorization to enter into this transaction as
the Title Company may reasonably require in order to issue the Title Policy; and,
(E) In the event that Buyer elects to have any Lease(s) assigned to Buyer, then an
assignment and assumption agreement that assigns all of Seller’s rights, title, and
interests under the lease with such tenant(s) to Buyer, in a form mutually agreed-
to by the Parties.
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4.9 Pro Forma Title Report & Estimated Closing Statement. The Escrow Holder must
request from the Title Company a “Pro Forma Title Policy” at least five (5) days before
the Close of Escrow and must deliver it to Buyer for Buyer’s approval before the Close of
Escrow. The Buyer will be considered to have approved the Pro Forma Title Policy if it
contains only the Permitted Exceptions. The Escrow Holder must deliver to the Buyer
and Seller an estimate of Closing Costs at least five (5) days before the Close of Escrow.
4.10 Title Policy. Escrow Holder must deliver to Buyer, through Escrow, an ALTA owner’s
standard policy of title insurance (or extended policy, if requested by Buyer), insuring
Buyer as fee owner of the Property, subject only to the usual printed title company
exceptions and the Permitted Exceptions, in an amount equal to the Purchase Price,
issued by Title Company and dated as of the Close of Escrow.
4.11 Signing of Other Documents; Compliance with Regulations. The Parties will do all
things and sign all documents that are reasonably necessary for Close of Escrow to occur.
Furthermore, the Parties will comply at their own expense with all applicable laws and
governmental regulations required for Close of Escrow to occur, including, but not
limited to, any required filings with governmental authorities.
4.12 Recording of Documents and Delivery of Funds. On receipt of the funds and instruments
described in this Article 4, and on the satisfaction or waiver of the conditions precedent to
Close of Escrow, Escrow Holder must:
(A) Disburse to Seller the Purchase Price, less any Closing Costs owed by Seller
under this Agreement;
(B) Cause the Grant Deed and other documents as specified in this Agreement to be
recorded in the Office of the County Recorder of the County of San Luis Obispo,
California;
(C) Deliver conformed copies of the Grant Deed and all other appropriate documents
to Buyer and Seller on Close of Escrow; and
(D) Deliver an original of the FIRPTA Certificate to Buyer and Seller on Close of
Escrow.
4.13 Escrow Cancellation Charges. If Escrow fails to close because of the default of either
Party, the defaulting Party shall be liable for all Escrow cancellation charges. If Escrow
fails to close for any other reason, the Parties will equally share payment of all Escrow
cancellation charges.
4.14 Prorations. Unless otherwise agreed in writing, the following items shall be paid current;
then, subject to the provisions of this Section 4.14, each of the items listed in this Section
4.14 (the "Proration Items") shall be apportioned in respect of the Property as of 11:59
p.m. on the Closing Date. Seller will be charged and credited for the amounts of all of
the Proration Items relating to the period up to and including the Closing Date, and Buyer
will be charged and credited for all of the Proration Items relating to the period after the
Closing Date.
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(A) Taxes and Assessments. Real estate taxes, if any, and assessments imposed by
any governmental authority (“Taxes”), if any, with respect to the Property for the
relevant tax year in which the Property is being sold and that are not yet due and
payable or that have not yet been paid shall be prorated as of the Close of Escrow
based upon the most recent ascertainable assessed values and tax rates and based
upon the number of days Buyer and Seller will have owned the Property during
such relevant tax year. Seller shall receive a credit for any Taxes paid by Seller
and applicable to any period after the Close of Escrow. To the best of Seller’s
knowledge, Seller is not subject to any Taxes.
(B) Owner Deposits. Seller shall receive a credit at the Close of Escrow for all bonds,
deposits, letters of credit, set aside letters or other similar items, if any, that are
outstanding with respect to the Property that have been provided by Seller or any
of its affiliates to any governmental agency, public utility, or similar entity
(collectively, “Owner Deposits”) to the extent assignable to Buyer.
(C) Final Adjustment After Closing. If final prorations cannot be made at the Close
of Escrow for any item being prorated under this Section 4.14, then, provided
Buyer or Seller identify any such proration (“Post Closing Proration”) in writing
before the Close of Escrow, Buyer and Seller agree to allocate such items on a fair
and equitable basis as soon as invoices or bills are available, with final adjustment
to be made as soon as reasonably possible after the Close of Escrow (but in no
event later than eight (8) months after the Close of Escrow). Payments in
connection with the final adjustment shall be due no later than forty-five (45) days
after such amount is known and provided to the owing party. Seller shall have
reasonable access to, and the right to inspect and audit, Buyer’s books to confirm
the final prorations for a period of eight (8) months after the Close of Escrow.
Notwithstanding anything to the contrary stated in this Section 4.14, except for
any Post Closing Prorations, all prorations made under this Section 4.14 shall be
final as of the Close of Escrow and shall not be subject to further adjustment
(whether due to an error or for any other reason) after the Close of Escrow.
ARTICLE 5
NOTICES
5.1 Notices. All notices under this Agreement must be in writing. All notices must be sent
with postage fully prepaid and be addressed to the respective Parties as set forth below or
to other addresses and persons as the Parties may designate by written notice to the other
Parties. The Notices will be effective:
(A) When personally delivered by the other Party or messenger or courier of the other
Party;
(B) Three (3)-business days after deposit in the United States mail, registered or
certified;
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(C) Twenty four (24) hours after deposit before the daily deadline time with a
reputable overnight courier or service; or
(D) On receipt of an email transmission, if a hard copy of the transmission is
thereafter delivered in one of the methods described in (A) through (C) above.
TO THE SELLER:
San Luis Coastal Unified School District
Attn: Assistant Superintendent, Business Services
1500 Lizzie Street
San Luis Obispo, CA 93401
Phone: (805) 549-1200
Email: rpinkerton@slcusd.org
With a copy to:
Lozano Smith, LLP
Attn: Harold Freiman & Kelly Bedell
733 Marsh Street, Suite 200
San Luis Obispo, CA 93401
Email: hfreiman@lozanosmith.com; kbedell@lozanosmith.com
TO THE BUYER:
City of Morro Bay
595 Harbor Street
Morro Bay, CA 93442
Attention: City Manager
Email: jcraig@morrobayca.gov
With a copy to:
City of Morro Bay
595 Harbor Street
Morro Bay, CA 93442
Attention: City Attorney
Email: bstack@morrobayca.gov
TO THE ESCROW HOLDER:
Chicago Title Company
Attn: Tammy Brown
780 Monterey Ave, Suite 101
Morro Bay, CA 93442
Email: Tammy.Brown@ctt.com
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ARTICLE 6
DEFAULT AND DAMAGES
6.1 DEFAULT BY BUYER; TERMINATION BY BUYER. BUYER AND SELLER
HEREBY ACKNOWLEDGE AND AGREE THAT, IN THE EVENT THE CLOSE OF
ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT, OR THE CLOSE OF
ESCROW FAILS TO OCCUR BECAUSE BUYER ISSUES A TERMINATION
NOTICE AFTER EXPIRATION OF THE DUE DILIGENCE PERIOD, SELLER WILL
SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL
NATURE OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT
AND THE SPECIAL NATURE OF THE NEGOTIATIONS WHICH PRECEDED THIS
AGREEMENT, BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ASCERTAIN.
IN ADDITION, BUYER WISHES TO HAVE A LIMITATION PLACED UPON THE
POTENTIAL LIABILITY OF BUYER TO SELLER IN THE EVENT THE CLOSE OF
ESCROW FAILS TO OCCUR DUE TO A BUYER DEFAULT, AND WISHES TO
INDUCE SELLER TO WAIVE OTHER REMEDIES WHICH SELLER MAY HAVE
IN THE EVENT OF A BUYER DEFAULT. BUYER AND SELLER, AFTER DUE
NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT
OF THE DEPOSIT REPRESENTS A REASONABLE ESTIMATE OF THE
DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH BUYER
DEFAULT. BUYER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE
EVENT THE CLOSE OF ESCROW FAILS TO OCCUR DUE TO A BUYER
DEFAULT, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO BUYER
AND ESCROW HOLDER, CANCEL THE ESCROW AND RECEIVE OR RETAIN (IF
SELLER ALREADY HOLDS THE DEPOSIT) THE DEPOSIT AS LIQUIDATED
DAMAGES AND ESCROW HOLDER SHALL IMMEDIATELY DELIVER (UNLESS
IT HAS ALREADY DONE SO) THE DEPOSIT TO SELLER. SUCH RETENTION OF
THE DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE
CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A
FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR
SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR
PROVISION.
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS SECTION 6.1 AND BY THEIR
INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
Seller’s Initials:
Buyer’s Initials:
6.2 Default by Seller. If Seller defaults in its obligations to sell and convey the Property to
Buyer pursuant to this Agreement (all of the conditions to Seller’s obligations to close
having been satisfied or waived), Buyer’s sole and exclusive remedy shall be to elect one
of the following: (a) to terminate this Agreement and recover the Deposit in full or (b) to
bring a suit for specific performance of Seller’s obligations to proceed to Closing.
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In the event Buyer elects to pursue option (b) set forth above, but specific performance is
not available due to Seller’s transfer of the Property to a third party, then Buyer’s remedy
is limited to recovery of: (i) the Deposit, and any other funds deposited into Escrow (ii)
Buyer’s actually incurred out-of-pocket third party costs for Buyer’s Inspections, not to
exceed the amount of Five Hundred Thousand Dollars ($500,000.00). Seller
acknowledges the unique and special character of the Property and its utility to Buyer and
agrees that specific performance is an appropriate remedy for Seller’s default under this
Agreement.
6.3. Notwithstanding the foregoing Sections 6.1 and 6.2, if either Party acts with malice,
willful misconduct, or fraud, the other Party shall be entitled to pursue all remedies
available in law or equity.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 General Terms.
(A) This Agreement supersedes all negotiations and previous agreements between the
Parties related to the purchase and sale of the Property, including but not limited
to that certain Property Access License between the San Luis Coastal Unified
School District and City of Morro Bay dated January 29, 2026. 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 both Parties.
(B) Exhibits attached to this Agreement are incorporated into this Agreement by
reference. The Recitals shown are considered true, are incorporated into this
Agreement as though set forth fully herein, and are binding on Seller and Buyer.
(C) This Agreement confers no rights on any party except the signatories to the
Agreement. This Agreement is binding on the Parties hereto and their respective
heirs or representatives, and their permitted transferees, successors, and assigns.
Neither Party shall have the right to transfer or assign any of its rights or
obligations under this Agreement without the prior written consent of the other
Party.
(D) All actions to be performed, or permitted to be performed, at a time after the
Close of Escrow, whether specifically referred to as surviving the Close of
Escrow or not, and all covenants, representations and warranties of the Parties,
will survive the Close of Escrow.
(E) Time is of the essence in this Agreement.
(F) This Agreement must be construed according to its fair meaning and as if
prepared by both Buyer and Seller. This Agreement must be construed in
accordance with the laws of the State of California in effect on the Effective Date.
Any action or proceeding seeking any relief under or with respect to this
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Agreement shall be brought solely in the Superior Court of the State of California
for the County of San Luis Obispo.
(G) Unless stated otherwise in this Agreement, the rights and remedies of the Parties
are cumulative. A Party’s exercise of any of its rights or remedies will not
preclude its exercise, at the same or at different times, of any other rights or
remedies for the same, or any other default.
(H) Buyer and Seller acknowledge that it may be necessary to execute documents
other than those specifically referred to herein in order to complete the acquisition
of the Property or to accomplish the objectives and requirements that are set out in
this Agreement. Both Buyer and Seller hereby agree to cooperate with each other
by executing such other documents or taking such other actions as may be
reasonably necessary to complete this transaction in accordance with the intent of
the Parties as evidence in this Agreement and the Exhibits attached hereto.
7.2 No Brokers.
Each Party represents and warrants that neither Party has retained any brokers or finders
to represent its interests in connection with this transaction. 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.
7.3 Attorney’s Fees and Costs
In the event of any legal proceeding arising out of or relating to this Agreement, each
Party shall be responsible to bear its own attorneys' fees and expenses (including expert
witness fees) arising from the proceeding, regardless of which Party prevails in the
proceeding.
7.4 Severability
If any provision of this Agreement is held invalid, void, or unenforceable by a court of
competent jurisdiction, but the remainder of the Agreement can be enforced without
failure of material consideration to any Party, then this Agreement shall not be affected
and it shall remain in full force and effect, unless amended or modified by mutual consent
of the Parties; provided, however, that if the invalidity or unenforceability of any
provision of this Agreement results in a material failure of consideration, then the Party
adversely affected thereby shall have the right in its sole discretion to terminate this
Agreement upon providing written notice of such termination of the other Party. In such
event of termination, Seller shall retain any portion of the Deposit released to Seller as of
the date of termination unless otherwise provided by this Agreement.
7.5 Damage and Condemnation
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If before Close of Escrow, the Property or any portion thereof is destroyed or damaged,
the Seller shall apply all proceeds of any insurance policy applicable to the loss to the
restoration of the Property. If, before Close of Escrow, the Property becomes subject to a
taking by virtue of eminent domain by any entity that is not the Buyer, the Buyer shall
have a right to contest the taking of the Property as the highest and best use of the
property, or shall have the right to terminate this Agreement and the Deposit shall be
returned to Buyer.
7.6 Force Majeure
No Party shall be deemed to be in default where failure or delay in the performance of
any of its obligations under this Agreement is caused by floods, earthquakes, other acts of
nature, fires, wars, terrorism, riots or similar hostilities, strikes and other labor difficulties
beyond a Party’s control, shortage of materials (exclusive of prefab/modular building
products), prohibitory court actions (such as restraining orders or injunctions) or other
causes beyond a Party’s control. If any such events shall occur, the time for performance
by any Party of its obligations hereunder shall be extended for the period of time that
such events prevented such performance.
7.7 Electronic Signatures and Execution in Counterpart
Signatures delivered electronically shall be as binding as originals upon the Parties so
signing and delivering. This Agreement may be executed in counterparts, each of which
shall constitute an original of the Agreement.
7.8 Authority to Sign
Each person executing this Agreement on behalf of either Party does hereby personally
represent and warrant that he or she had the authority to execute the Agreement on behalf of and
to fully bind such Party.
[Signatures on the following page]
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IN WITNESS WHEREOF, the Parties have executed this Agreement for Purchase and
Sale of Real Property and Joint Escrow Instructions as of the Effective Date first set forth above:
SELLER:
By:
Name:
Its:
BUYER:
By:
Name:
Its:
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ACKNOWLEDGMENT AND ACCEPTANCE BY ESCROW OFFICER
We acknowledge receipt of an original of the foregoing Escrow Instructions and the
enclosures listed, and we agree to act as Escrow Holder under the terms and conditions of the
instructions.
By: _______________________________ Dated ________________, 20__
Its: Authorized Officer
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Morro Bay, County of San Luis Obispo, State of California,
described as follows:
PARCEL A: (A.P.N.: 066-044-011)
Lot 5 and that portion of Lot 4 in Block 50 of Tract No. 2, in the City of Morro Bay, County of
San Luis Obispo, State of California, according to map recorded April 18, 1931 in Book 5, Page
20 of Maps, described as follows:
Beginning at the Northeast corner of said Lot 4; thence South 0° 55’ East along the Easterly line
of said Lot, 22 feet; thence leaving said Easterly line South 89° 05’ West and parallel with the
Northerly line of said Lot, 88 feet to a point in the Easterly line of the property conveyed to R. L.
Sowell, et ux., in deed dated July 9, 1946 and recorded July 25, 1946 in Book 413, Page 320 of
Official Records; thence North 0° 55’ West along the Easterly line of the property so conveyed,
22 feet to a point in the Northerly line of said Lot; thence North 83° 05’ East along said
Northerly line, 88 feet to the Point of Beginning.
PARCEL B: (A.P.N.: 066-280-045)
(Notice of Merger and Certificate of Compliance – 2016-062007)
PARCEL 1:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Beginning at the point of intersection of the Southwesterly line of said Lot 10 with the West line
of C Street as shown on the map of Tract No. 53, recorded February 24, 1950 in Book 5, Page 74
of Maps; thence North 27° 27’ East along the Southeasterly boundary line of Tract No. 53, 450
feet to the true point of beginning, said point also being the most Northerly corner of the land
described in the deed to the Morro Union School District of San Luis Obispo County recorded
June 20, 1936 in Book 197, Page 120 of Official Records; thence South 62° 33’ East along the
Northeasterly line of the land described in said deed 208.71 feet; thence North 27° 27’ East
parallel with the Southeasterly boundary line of Tract No. 53, 208.71 feet; thence North 62° 33’
West, 208.71 feet to a point on the Southeasterly boundary line of said Tract No. 53; thence
South 27° 27’ West along said Southeasterly boundary line 208.71 feet to the true point of
beginning.
Together with
PARCEL 2:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Beginning at the point of intersection of the Southwesterly line of said Lot 10 with the East line
of D Street as shown on map of Tract No. 2, recorded in Book 5, Page 20 of Maps, in the office
of the County Recorder of said County, said point of intersection being the Northwest corner of
Lot 5 in Block 51 of said Tract No. 2; thence along the South line of said Lot 10 and the North
line of said Lot 5 in Block 51 South 62° 33’ East the recorded bearing of the North line of said
Tract No. 2 being South 60° 43’ East, 21.91 feet to a 4” X 4” stake, the true point of beginning;
thence from said true point of beginning North 62° 33’ West along the Southerly line of said Lot
10, being also the Northerly line of said Tract No. 2, 500 feet to a 4” X 4” stake; thence North
27° 27’ East 450 feet to a 4” X 4” stake; thence South 62° 33’ East, 500 feet to a 4” X 4” stake;
thence South 27° 27’ West, 450 feet to the point of beginning.
EXCEPTING THEREFROM that portion of said land conveyed to the County of San Luis
Obispo by the Deed and Resolution of Acceptance recorded July 8, 1938 in Book 241, Page 431
of Official Records.
ALSO EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay
by the Deed and Resolution of Acceptance recorded December 29, 1966 in Book 1420, Page 596
of Official Records.
Together with
PARCEL 3:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Commencing at the point of intersection of the Southwesterly line of said Lot 10 with the East
line of D Street as shown on map of Tract No. 2, recorded in Book 5, Page 20 of Maps, in the
office of the County Recorder of said County, said point of intersection being the Northwest
corner of Lot 5 in Block 51 of said Tract No. 2; thence along the South line of said Lot 10 and
the North line of said Lot 5 in Block 51 South 62° 33’ East, the recorded bearing of the North
line of said Tract No. 2 being South 60° 43’ East, 21.91 feet to a 3” X 4” stake the true point of
commencement, said true point of commencement being the Southeast corner of that certain tract
of land conveyed by Refugia Herrera to the Morro Union School District in deed recorded June
20, 1936 in Book 197, Page 120 of Official Records; thence running from said true point of
commencement South 62° 33’ East along the Northerly line of said Tract No. 2 and along the
Southerly line of said Lot 10, a distance of 484.00 feet to a 3” X 4” stake; thence North 27° 27’
East, 450.00 feet to a 3” X 4” stake; thence North 62° 33’ West, 484.00 feet to the Northeast
corner of the aforementioned conveyed tract; thence South 27° 27’ West, 450.00 feet along the
Southeasterly line of said conveyed tract to the point of commencement.
EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay in the
Deed and Resolution of Acceptance recorded March 28, 1965 in Book 1348, Page 82 of Official
Records.
ALSO EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay
in Deed and Resolution of Acceptances recorded March 31, 1987 in Book 2971, Page 51 of
Official Records and recorded April 5, 1988 in Book 3126, Page 902 of Official Records.
Together with
PARCEL 4:
That property per document number 2016-057646, recorded on November 2, 2016 in the office
of the County Recorder, in the County of San Luis Obispo, State of California and repeated here
for convenience:
That portion of Lot 10 of Rancho San Bernardo as shown on map recorded in Book 1 of Maps, at
Page 6 in the office of the County Recorder, County of San Luis Obispo, State of California,
more particularly described as follows:
Commencing at the southeasterly most corner of Lot 8, Block 50 as shown on map recorded in
Book A of Maps, at Page 35 in the office of the County Recorder of said County; Thence along
the easterly line of said Lot 8, North 0°30’00” West, a distance of 53.52 feet, to the southerly line
of Lot 10 of Rancho San Bernardo as shown on map recorded in Book 1 of Maps, at Page 6 in
the office of the County Recorder of said County, Thence continuing along a prolongation of the
easterly line of said Lot 8, North 0°30’00” West, a distance of 24.35 feet; Thence North
69°29’28” West, a distance of 100.25 feet, to the beginning of a tangent curve, concave southerly
and having a radius of 33.00 feet; thence westerly along said curve through a central angle of
36°18’10”, an arc distance of 20.91 feet, to a point on the southerly line of said Lot 10, also
being the True Point of Beginning; Thence continuing along said curve through a central angle
of 34°06’22”, an arc distance of 19.64 feet, to the northerly prolongation of the westerly line of
said Lot 8; Thence along the westerly prolongation of said Lot 8, North 0°22’46” West, a
distance of 19.11 feet, to the southerly line of said Lot 10; thence along the southerly line of said
Lot 10, South 62°14’49” East, a distance of 18.53 feet to the True Point of Beginning.
APN: 066-044-011 and 066-280-045
EXHIBIT B
FORM OF GRANT DEED
[Continued on next page]
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Morro Bay
Attn: City Clerk
595 Harbor Street
Morro Bay, CA 93442
MAIL TAX STATEMENTS TO:
Same as above
RECORDER: Exempt:
This instrument is for the benefit of a
municipality of the State of California and is
entitled to be recorded without fee subject to
Govt. Code 27383 and 6103 Recorder’s Use Only
No Documentary Transfer Tax is due on this document pursuant to Revenue and Taxation
Code Section 11922.
GRANT DEED
Assessor’s Parcel Numbers: 066-044-011 and 066-280-045
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
undersigned, the San Luis Coastal Unified School District, a public corporation (“Grantor”),
hereby grants to the City of Morro Bay, a municipal corporation (“Grantee”), that certain real
property in the County of San Luis Obispo, State of California described in Exhibit “1” to Grant
Deed, attached hereto and incorporated herein, together with all buildings and improvements
located thereon, subject to any covenants, conditions, restrictions, easements, and other matters
of record (the “Property”).
In witness whereof, Grantor has caused this Grant Deed to be executed as of the _____
day of _________________, 20__.
GRANTOR: SAN LUIS COASTAL UNIFIED SCHOOL DISTRICT
_______________________________________
By: _________________________________
Its: _________________________________
“Exhibit 1” to Grant Deed
Legal Description of Property
Real property in the City of Morro Bay, County of San Luis Obispo, State of California,
described as follows:
PARCEL A: (A.P.N.: 066-044-011)
Lot 5 and that portion of Lot 4 in Block 50 of Tract No. 2, in the City of Morro Bay, County of
San Luis Obispo, State of California, according to map recorded April 18, 1931 in Book 5, Page
20 of Maps, described as follows:
Beginning at the Northeast corner of said Lot 4; thence South 0° 55’ East along the Easterly line
of said Lot, 22 feet; thence leaving said Easterly line South 89° 05’ West and parallel with the
Northerly line of said Lot, 88 feet to a point in the Easterly line of the property conveyed to R. L.
Sowell, et ux., in deed dated July 9, 1946 and recorded July 25, 1946 in Book 413, Page 320 of
Official Records; thence North 0° 55’ West along the Easterly line of the property so conveyed,
22 feet to a point in the Northerly line of said Lot; thence North 83° 05’ East along said
Northerly line, 88 feet to the Point of Beginning.
PARCEL B: (A.P.N.: 066-280-045)
(Notice of Merger and Certificate of Compliance – 2016-062007)
PARCEL 1:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Beginning at the point of intersection of the Southwesterly line of said Lot 10 with the West line
of C Street as shown on the map of Tract No. 53, recorded February 24, 1950 in Book 5, Page 74
of Maps; thence North 27° 27’ East along the Southeasterly boundary line of Tract No. 53, 450
feet to the true point of beginning, said point also being the most Northerly corner of the land
described in the deed to the Morro Union School District of San Luis Obispo County recorded
June 20, 1936 in Book 197, Page 120 of Official Records; thence South 62° 33’ East along the
Northeasterly line of the land described in said deed 208.71 feet; thence North 27° 27’ East
parallel with the Southeasterly boundary line of Tract No. 53, 208.71 feet; thence North 62° 33’
West, 208.71 feet to a point on the Southeasterly boundary line of said Tract No. 53; thence
South 27° 27’ West along said Southeasterly boundary line 208.71 feet to the true point of
beginning.
Together with
PARCEL 2:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Beginning at the point of intersection of the Southwesterly line of said Lot 10 with the East line
of D Street as shown on map of Tract No. 2, recorded in Book 5, Page 20 of Maps, in the office
of the County Recorder of said County, said point of intersection being the Northwest corner of
Lot 5 in Block 51 of said Tract No. 2; thence along the South line of said Lot 10 and the North
line of said Lot 5 in Block 51 South 62° 33’ East the recorded bearing of the North line of said
Tract No. 2 being South 60° 43’ East, 21.91 feet to a 4” X 4” stake, the true point of beginning;
thence from said true point of beginning North 62° 33’ West along the Southerly line of said Lot
10, being also the Northerly line of said Tract No. 2, 500 feet to a 4” X 4” stake; thence North
27° 27’ East 450 feet to a 4” X 4” stake; thence South 62° 33’ East, 500 feet to a 4” X 4” stake;
thence South 27° 27’ West, 450 feet to the point of beginning.
EXCEPTING THEREFROM that portion of said land conveyed to the County of San Luis
Obispo by the Deed and Resolution of Acceptance recorded July 8, 1938 in Book 241, Page 431
of Official Records.
ALSO EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay
by the Deed and Resolution of Acceptance recorded December 29, 1966 in Book 1420, Page 596
of Official Records.
Together with
PARCEL 3:
That portion of Lot 10 of the subdivision of a part of the Rancho San Bernardo, in the County of
San Luis Obispo, State of California, according to map recorded January 5, 1907 in Book 1, Page
6 of Maps, in the office of the County Recorder of said County, described as follows:
Commencing at the point of intersection of the Southwesterly line of said Lot 10 with the East
line of D Street as shown on map of Tract No. 2, recorded in Book 5, Page 20 of Maps, in the
office of the County Recorder of said County, said point of intersection being the Northwest
corner of Lot 5 in Block 51 of said Tract No. 2; thence along the South line of said Lot 10 and
the North line of said Lot 5 in Block 51 South 62° 33’ East, the recorded bearing of the North
line of said Tract No. 2 being South 60° 43’ East, 21.91 feet to a 3” X 4” stake the true point of
commencement, said true point of commencement being the Southeast corner of that certain tract
of land conveyed by Refugia Herrera to the Morro Union School District in deed recorded June
20, 1936 in Book 197, Page 120 of Official Records; thence running from said true point of
commencement South 62° 33’ East along the Northerly line of said Tract No. 2 and along the
Southerly line of said Lot 10, a distance of 484.00 feet to a 3” X 4” stake; thence North 27° 27’
East, 450.00 feet to a 3” X 4” stake; thence North 62° 33’ West, 484.00 feet to the Northeast
corner of the aforementioned conveyed tract; thence South 27° 27’ West, 450.00 feet along the
Southeasterly line of said conveyed tract to the point of commencement.
EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay in the
Deed and Resolution of Acceptance recorded March 28, 1965 in Book 1348, Page 82 of Official
Records.
ALSO EXCEPTING THEREFROM that portion of said land conveyed to the City of Morro Bay
in Deed and Resolution of Acceptances recorded March 31, 1987 in Book 2971, Page 51 of
Official Records and recorded April 5, 1988 in Book 3126, Page 902 of Official Records.
Together with
PARCEL 4:
That property per document number 2016-057646, recorded on November 2, 2016 in the office
of the County Recorder, in the County of San Luis Obispo, State of California and repeated here
for convenience:
That portion of Lot 10 of Rancho San Bernardo as shown on map recorded in Book 1 of Maps, at
Page 6 in the office of the County Recorder, County of San Luis Obispo, State of California,
more particularly described as follows:
Commencing at the southeasterly most corner of Lot 8, Block 50 as shown on map recorded in
Book A of Maps, at Page 35 in the office of the County Recorder of said County; Thence along
the easterly line of said Lot 8, North 0°30’00” West, a distance of 53.52 feet, to the southerly line
of Lot 10 of Rancho San Bernardo as shown on map recorded in Book 1 of Maps, at Page 6 in
the office of the County Recorder of said County, Thence continuing along a prolongation of the
easterly line of said Lot 8, North 0°30’00” West, a distance of 24.35 feet; Thence North
69°29’28” West, a distance of 100.25 feet, to the beginning of a tangent curve, concave southerly
and having a radius of 33.00 feet; thence westerly along said curve through a central angle of
36°18’10”, an arc distance of 20.91 feet, to a point on the southerly line of said Lot 10, also
being the True Point of Beginning; Thence continuing along said curve through a central angle
of 34°06’22”, an arc distance of 19.64 feet, to the northerly prolongation of the westerly line of
said Lot 8; Thence along the westerly prolongation of said Lot 8, North 0°22’46” West, a
distance of 19.11 feet, to the southerly line of said Lot 10; thence along the southerly line of said
Lot 10, South 62°14’49” East, a distance of 18.53 feet to the True Point of Beginning.
APN: 066-044-011 and 066-280-045
Notary Acknowledgement
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
)
County of SAN LUIS OBISPO )
On ___________________, 20___, before me, _____________________, Notary Public,
personally appeared ___________________________, who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and
that by his/her/their signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: (Seal)
CERTIFICATE OF ACCEPTANCE OF GRANT DEED
Pursuant to Government Code Section 27281 this is to certify that the interest in real
property conveyed by SAN LUIS COASTAL UNIFIED SCHOOL DISTRICT, by Grant Deed to
the CITY OF MORRO BAY is hereby accepted by the undersigned officer and agent of the CITY
OF MORRO BAY pursuant to the authority conferred by the City Council of the CITY OF
MORRO BAY on ______________________, 2026, and that the CITY OF MORRO BAY
consents to the recording of the Grant Deed.
Executed in Morro Bay, California on _______________, 2026.
“GRANTEE”
CITY OF MORRO BAY
By: __________________________
City Manager
Reso 14-26 Approving Purchase and Sale
Agreement for Morro Elementary
Final Audit Report 2026-03-26
Created:2026-03-26
By:Heather Goodwin (hgoodwin@morrobayca.gov)
Status:Signed
Transaction ID:CBJCHBCAABAAkAD_KKCmVuG_EopiMZdepy0kmxRIOdvo
"Reso 14-26 Approving Purchase and Sale Agreement for Morro
Elementary" History
Document created by Heather Goodwin (hgoodwin@morrobayca.gov)
2026-03-26 - 0:55:21 AM GMT
Document emailed to cwixom@morrobayca.gov for signature
2026-03-26 - 0:57:44 AM GMT
Email viewed by cwixom@morrobayca.gov
2026-03-26 - 0:58:46 AM GMT
Signer cwixom@morrobayca.gov entered name at signing as Carla Wixom
2026-03-26 - 0:59:19 AM GMT
Document e-signed by Carla Wixom (cwixom@morrobayca.gov)
Signature Date: 2026-03-26 - 0:59:21 AM GMT - Time Source: server
Document emailed to Dana Swanson (dswanson@morrobayca.gov) for signature
2026-03-26 - 0:59:23 AM GMT
Email viewed by Dana Swanson (dswanson@morrobayca.gov)
2026-03-26 - 3:07:43 PM GMT
Document e-signed by Dana Swanson (dswanson@morrobayca.gov)
Signature Date: 2026-03-26 - 3:08:08 PM GMT - Time Source: server
Agreement completed.
2026-03-26 - 3:08:08 PM GMT