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HomeMy WebLinkAboutAgreement - McCarthy Gilroy, LLC - Purchase of Well 9 - Signed: 7/29/254933-9261-0133.2 394826.00005 4909-5509-7155v7 MTOSCANO\04706273 PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement (“Agreement”) is made and entered into as of July ____, 2025 (the “Effective Date”), by and between MCCARTHY GILROY, LLC, a California limited liability company (“Seller”), and THE CITY OF GILROY, a California municipal corporation (“Buyer”). RECITALS A. Seller is the owner of certain real property located in the City of Gilroy, County of Santa Clara (the “County”), State of California, which real property is commonly known as 6601 Cameron Boulevard (Assessor’s Parcel Number: 841-84-009) and described as Parcel 9 of Parcel Map McCarthy Business Park, filed August 6, 2007 in Book 816 of Parcel Maps at Pages 48-52, Santa Clara County Records, File Number 19539696. The aforesaid real property presently consists of approximately 53,925 square feet and is more particularly described and depicted on Exhibit A attached hereto (the “Land”). B. The Property shall consist of all of the following: (i) the Land; (ii) all right, title and interest of Seller, if any, in and to all rights, privileges and easements appurtenant to the Land (all of which are collectively referred to as the “Appurtenances”) (the Land and any Appurtenances are collectively referred to herein as the “Real Property”); and (iii) all right, title and interest of Seller, if any, to the extent transferable, in all intangible property used exclusively in connection with the business of owning, operating, maintaining and/or managing the Real Property, including licenses, permits, entitlements and governmental approvals which benefit the Real Property (all of which are collectively referred to as the “Intangible Property”). C. Seller desires to sell the Property to Buyer and Buyer desires to purchase the Property from Seller, upon the terms and conditions contained in this Agreement, and all permits, licenses, consents, approvals and entitlements related to the Property described below. The parties agree as follows: 1. Agreement of Purchase and Sale. Seller hereby agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Property, which purchase and sale shall be upon and subject to all the terms and conditions hereinafter set forth. 2. Purchase Price. The purchase price (“Purchase Price”) for the Property shall be One Million One Hundred Eighty-Five Thousand Dollars ($1,185,000.00). 3. Escrow; Deposit; Independent Consideration. a. Opening of Escrow; Deposit. The transaction contemplated by this Agreement shall be consummated through an escrow (“Escrow”) with Old Republic Title located at 8060 Santa Teresa Boulevard, Suite 100, Gilroy, California 95020 (“Escrow Agent,” “Escrow Holder,” or “Title Company”), Attention: Chris Gonzalez, Escrow Officer. Promptly following the Effective Date, Seller and Buyer shall open Escrow with Escrow Agent. Buyer shall, by no later than five (5) business days after the Escrow has opened, deposit into Escrow One Hundred Eighteen Thousand Five Hundred Dollars ($118,500.00) (the “Deposit”). The Deposit (less the Independent Consideration (defined below)) shall be fully refundable to Buyer until Buyer delivers its Feasibility Approval Notice as described in Section 6(a) to Seller on or before the expiration of the Feasibility Period (as defined in Section 6(a) below). Buyer shall have the right for any reason or for no reason to terminate this Agreement by written notice given to Seller at any time prior to the expiration of the Feasibility Period and, in such event, the Deposit made by Buyer (together with the interest, if any, accrued thereon while in escrow) less the Independent Consideration shall be promptly refunded to Buyer. The Deposit shall be disbursed to Seller following Buyer’s delivery of Buyer’s Feasibility Approval Notice. Upon disbursement of any portion of the Deposit to Seller as described above, such portion of the Deposit so released shall become non-refundable (except in the event of Seller’s default under this Agreement or as otherwise expressly provided in this Agreement) and shall be applicable to the Purchase Price upon the Close of Escrow. Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 29 4933-9261-0133.2 394826.00005 -2- 4909-5509-7155v7 MTOSCANO\04706273 b. Investment and Reinvestment of Deposit. Any portion of the Deposit and all other funds deposited by Buyer and held by Escrow Agent will be invested and reinvested, in any demand deposit or savings account(s) of any California state or federal savings and loan association or California state bank or national banking association, as Buyer may instruct Escrow Agent in writing. All interest earned under such account(s) will accrue to Buyer. c. Independent Consideration. One Hundred Dollars ($100.00) of the Deposit shall serve as 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, the grant to Buyer of the right to conduct its due diligence investigation of the Property and the grant to Buyer of the right to terminate this Agreement on or before the expiration of the Feasibility Period in connection with such due diligence investigation and shall be independent of any other consideration or payment provided for in this Agreement and is non-refundable in all events (except in the event of a default by Seller hereunder). The Independent Consideration is not applicable to the Purchase Price and shall be retained by Seller in the event of the Close of Escrow or any termination of this Agreement. 4. Payment of Purchase Price. The Purchase Price less any Deposit disbursed to Seller will be payable in cash through Escrow at the Close of Escrow. 5. Buyer’s Title Approval Rights. Buyer shall, within fifteen (15) days following Buyer’s receipt of the Documents (defined in Section 7(a) below) and the Title Report (as defined in Section 7(c) below), notify Seller in writing (“Buyer Objection Notice”) of any objection (which objection may be issued or withheld in Buyer’s sole and absolute discretion) that Buyer has to the title exceptions reflected in the Title Report or the matters shown on a Survey (as defined in Section 6(b) below). Buyer’s failure to timely deliver to Seller the Buyer Objection Notice shall be deemed to constitute Buyer’s disapproval of the Title Report and the Survey. Seller shall have a period of five (5) business days after receipt of the Buyer Objection Notice in which to deliver written notice to Buyer (“Seller Response Notice”) of Seller’s election to either (i) agree to attempt to remove, at Seller’s sole cost and expense, the objectionable items on or before the Closing Date (in which event Buyer shall be deemed to have waived its objection to the title exceptions and survey matters (if applicable) in question), or (ii) decline to attempt to remove the objectionable items. Seller’s failure to timely deliver to Buyer the Seller Response Notice shall be deemed to constitute Seller’s election not to attempt to remove the objectionable items. If Seller elects in the Seller Response Notice to attempt to remove the objectionable items, such removal shall be a condition precedent to Closing (as herein defined) for the benefit of Buyer, but not a covenant of Seller and except for the disapproved items, the condition of the title as shown on the Title Report shall otherwise be deemed approved. If Seller elects (or is deemed to have elected) not to remove the objectionable items, then Buyer shall have the right, by written notice to Seller (“Buyer Election Notice”) delivered within five (5) days after Buyer’s receipt of the Seller Response Notice (or, if Seller has failed to timely deliver to Buyer the Seller Response Notice, within five (5) days after the expiration of said five (5) day period), to either (i) immediately terminate this Agreement, whereupon Escrow Agent shall promptly release and return the Deposit (less the Independent Consideration) to Buyer, and all of the rights and obligations of Buyer and Seller hereunder shall cease, except that the parties shall equally be responsible for payment of the expenses of canceling Escrow (i.e., 50/50), or (ii) waive its objection to the title exceptions and survey matters (if applicable) in question. Buyer’s failure to timely deliver to Seller the Buyer Election Notice shall be deemed to constitute Buyer’s election to terminate this Agreement. Notwithstanding any other provision contained herein to the contrary, Seller shall, on or before the Closing Date, remove or cause to be removed all monetary liens and encumbrances against the Property, excluding real property taxes and assessments not yet due and payable (collectively, “Monetary Liens”). 6. Feasibility Period; Inspections and Studies. a. Feasibility Period. Buyer shall have thirty (30) days following the Effective Date (the “Feasibility Period”) to conduct any feasibility, economic, political, title, physical, or engineering studies of the Property as Buyer may desire, in its sole and absolute discretion, including, but not limited to, Buyer’s review and approval of the matters described in (b) and (c) below, the terms and balances of any assessment district affecting the Property, the conditions of zoning, and verification of the availability of utility connections and Buyer’s evaluation of the feasibility of the Property for Buyer’s intended use and to conduct the Inspections and Studies as described in (b) below. If Buyer elects to proceed with the purchase of the Property after conducting such investigations, Buyer will give written notice to Seller and Escrow Agent of such fact before the expiration of the Feasibility Period (the Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -3- 4909-5509-7155v7 MTOSCANO\04706273 “Feasibility Approval Notice”). Buyer’s failure to give the Feasibility Approval Notice before the expiration of the Feasibility Period will be deemed as Buyer’s election not to proceed with the purchase of the Property, whereupon the Deposit (less the Independent Consideration) held by Escrow Holder will be immediately released to Buyer and this Agreement shall automatically terminate with neither party having any further liability or obligation hereunder except as to any indemnities obligations that, by their terms, survive termination; provided, however, Seller shall not be released hereunder until the full amount of the Deposit held by Escrow Holder has been returned to Buyer. b. Inspections and Studies. During the Feasibility Period, Buyer may, at its sole cost and expense, perform such physical inspections, surveys (including, without limitation, a Phase 1 Environmental Study and an ALTA survey of the Property (“Survey”)), tests and studies, and review such other matters related to the Property, as Buyer deems necessary or appropriate for its review of the Property (collectively, “Inspections and Studies”). In connection with the foregoing, Buyer and its employees, agents, representatives, consultants and contractors (collectively, “Buyer Representatives”) shall have the right to enter upon the Property during normal business hours for the purpose of conducting such Inspections and Studies and/or performing the Survey. After any such entry, Buyer shall promptly restore the Property to its prior condition, if its condition was changed by such entry. Buyer shall indemnify, defend and hold Seller harmless from any actions, suits, liens, claims, damages, expenses, losses and liabilities (including reasonable attorneys’ fees and expenses) to the extent caused by Buyer’s or the Buyer Representatives’ entry upon the Property, and the performance of the Inspections and Studies; provided, however, that Buyer shall have no responsibility or liability for any act or omission of Seller or its employees, agents, representatives or contractors and/or for any condition or defect on, under or affecting the Property not caused by Buyer or the Buyer’s Representatives but discovered during such Inspections and Studies. If Buyer does not acquire the Property for any reason whatsoever, Buyer shall deliver to Seller (i) all reports, documents and other materials (including, without limitation, the Documents) previously obtained by Buyer from Seller, and (ii) to the extent permitted pursuant to agreements with parties preparing the same, copies of all reports, documents and other materials pertaining to the Property as Buyer has prepared or caused to be prepared (specifically excluding any internal documents of Buyer containing proprietary or privileged information, appraisals, marketing studies, and plans and specifications of improvements). The delivery of such items shall be without representation or warranty as to the completeness or accuracy thereof. c. Buyer’s approval of the items referenced in subparagraphs (a) and/or (b) above shall be manifested by Buyer’s delivery of the Feasibility Approval Notice. All of the above approvals may be granted or withheld by Buyer in its sole and absolute discretion. If Buyer fails to give the Feasibility Approval Notice, then such failure shall, without further notice, constitute a termination of this Agreement by Buyer. If Buyer so terminates this Agreement, then, on such date, Escrow Agent shall promptly release and return the Deposit (less the Independent Consideration) to Buyer, and all of the rights and obligations of Buyer and Seller hereunder shall cease, except that the parties shall equally be responsible for payment of the expenses of canceling Escrow (i.e., 50/50). 7. Documents and Preliminary Title Report. a. Delivery of Documents. Seller shall as soon as practicable after the mutual execution of this Agreement, but in no event later than the date that is three (3) business days after the Effective Date, deliver or cause to be delivered to Buyer for Buyer’s review a standard disclosure package of documents and materials in Seller’s possession which relate directly to the Property, including, without limitation, maps, conditions of approval, plans, development agreements, specific plans, title reports, toxic studies reports, Mello-Roos information or documents, school fee information or documents, surveys, and environmental reports (collectively the “Documents”). b. Return of Documents. Buyer shall return all of the Documents, any and all copies Buyer has made of the Documents on the earlier to occur of (i) such time as Buyer determines that it shall not acquire the Property, or (ii) such time as this Agreement is terminated for any reason. c. Delivery of Preliminary Title Report. Seller shall within three (3) business days after the Effective Date of this Agreement deliver or cause to be delivered to Buyer for Buyer’s review and approval, a preliminary title report (and copies of all documents or items referenced therein as exceptions) issued by Title Company in respect of the Seller’s Real Property (collectively, “Title Report”). Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -4- 4909-5509-7155v7 MTOSCANO\04706273 8. Representations of Seller. Seller makes the following representations and warranties to Buyer, all of which representations and warranties are true in all respects as of the Effective Date and shall be true in all respects at the Close of Escrow. a. Authority. The individual(s) signing this Agreement on behalf of Seller has/have the power, right and authority to (i) enter into this Agreement, (ii) bind Seller hereto and (iii) consummate the transaction contemplated hereby, without the consent or joinder of any other party or order or approval of any court. b. No Commitments. Except as expressly identified in this Agreement or as otherwise previously disclosed by Seller to Buyer (including, without limitation, that certain Declaration and Establishment of Covenants, Conditions and Restrictions and Grant of Easements), Seller has not entered into any material commitments or agreements with any third parties (including, without limitation, governmental authorities or agencies) affecting the Property that are not a matter of public record, including, without limitation, purchase agreements, rights of first refusals, options, leases or easements. c. No Pending Litigation. To Seller’s actual knowledge, no pending litigation exists against Seller relating to or arising out of Seller’s interest in the Property, and Seller has not received any written notice that any proceedings are contemplated and likely to be commenced during the term of this Agreement. d. No Violation of Laws. To Seller’s actual knowledge, in the past three (3) years Seller has not received any written notice or other written communication of any violation of any federal, state, regional or local law, ordinance or other governmental rule or regulation pertaining to the Property, including without limitation, subdivision, and environmental laws affecting the Property. e. No Condemnation Proceedings. To Seller’s actual knowledge, there are currently no condemnation or eminent domain proceedings threatened in writing or actively pending against the Property or any part thereof nor has any written request been received by Seller to engage in any transfer or transaction in lieu thereof. f. IRS Information. For purposes of Section 1445 of the United States Internal Revenue Code, as amended (the “Code”): (i) Seller is not a foreign corporation (as such term is defined in the Code and applicable federal income tax regulations); (ii) Seller’s Social Security Number (or equivalent) will be supplied to Escrow Holder at Closing; (iii) Seller’s correct address is as set forth in the FIRPTA (as defined below) and any other tax documentation related to this transaction; and (iv) the withholding of tax is not required by the Code upon the transfer of the Property in accordance with this Agreement. This certification may be disclosed by Buyer to the Internal Revenue Service. g. Hazardous Substances. Except as otherwise disclosed to Buyer in writing or otherwise included in the Documents, to Seller’s actual knowledge, the Property is not currently under investigation for violation (or in violation) of any federal, state or local law, ordinance or regulation relating to the environmental conditions in, at, on, under or about the Property including, but not limited to, soil and groundwater conditions (collectively, “Environmental Laws”). To Seller’s actual knowledge, there are no underground storage tanks located on the Real Property. h. Actual Knowledge. Whenever phrases such as "Seller knows", "to Seller's knowledge" or "Seller has no knowledge" or similar phrases are used in this Agreement with regard to the "knowledge" of Seller, they will be deemed to refer exclusively to matters within the current actual (as opposed to constructive) knowledge of Joseph A. McCarthy Jr. ("Seller's Representative"). No duty of inquiry or investigation on the part of Seller or Seller's Representative will be required or implied by the making of any representation or statement which is so limited to matters within Seller's knowledge, and in no event shall Seller's Representative have any personal liability therefor. 9. Buyer’s Representations and Warranties. Buyer hereby makes the following representations and warranties: Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -5- 4909-5509-7155v7 MTOSCANO\04706273 a. The individual(s) signing this Agreement on behalf of Buyer has/have the power, right and authority to (i) enter into this Agreement, (ii) bind Buyer hereto and (iii) consummate the transaction contemplated hereby, without the consent or joinder of any other party or order or approval of any court. b. Buyer has the requisite right, legal capacity and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transaction contemplated hereby. c. This Agreement and all other agreements, documents and instruments to be executed in connection herewith have been effectively authorized by all necessary action on the part of Buyer, which authorizations remain in full force and effect, have been duly executed and delivered by Buyer, and no other proceedings on the part of Buyer are required to authorize this Agreement and the transactions contemplated hereby. 10. Seller’s Covenants. a. During the term of this Agreement, Seller shall: i. Maintain Condition of Title. Neither cause nor voluntarily permit, any lien, encumbrance or any matter to cause the condition of title to be changed from that as stated in the Title Report, without Buyer’s prior written consent. Without limitation, Seller shall not encumber the Property with any Monetary Lien, including a deed of trust or other instrument in connection with any other loan or financing obtained by Seller. ii. Enter into No Agreements. Not enter into any agreements with the County, governmental agency (other than with Buyer in connection with this Agreement), utility company or any person or entity regarding the Property, which would remain in effect after the Close of Escrow, without obtaining Buyer’s prior written consent, which Buyer shall not withhold unreasonably. Without limitation, Buyer may withhold its consent to any agreement that would, in Buyer’s opinion, have any significant, detrimental impact on Buyer’s intended use for the Property. 11. Liquidated Damages. IF BUYER DEFAULTS UNDER THIS AGREEMENT BY FAILING TO CLOSE ESCROW ACCORDING TO THE TERMS OF THIS AGREEMENT AND SUCH DEFAULT IS NOT CURED BY BUYER WITHIN TWO (2) BUSINESS DAYS OF THE INITIAL SPECIFIED CLOSING DATE, THE PARTIES AGREE THAT SELLER SHALL BE RELEASED FROM SELLER’S OBLIGATION TO SELL THE PROPERTY TO BUYER. IN SUCH EVENT, SELLER SHALL RETAIN ANY PORTION OF THE DEPOSIT WHICH HAS BEEN DISBURSED TO SELLER AS LIQUIDATED DAMAGES, WHICH THE PARTIES AGREE IS A REASONABLE SUM CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE, INCLUDING THE DIFFICULTY OR IMPRACTICALITY OF DETERMINING THE ACTUAL DAMAGES TO SELLER. SUCH LIQUIDATED DAMAGES SHALL BE SELLER’S EXCLUSIVE REMEDY FOR SUCH DEFAULT, AND SELLER SHALL ACCEPT SAID LIQUIDATED DAMAGES IN PLACE OF ANY OTHER RIGHTS OR REMEDIES IT MAY HAVE AGAINST BUYER INCLUDING, BUT NOT LIMITED TO, ANY RIGHT TO SPECIFIC PERFORMANCE OR TO RECOVER DAMAGES. SELLER’S RETENTION OF THE DEPOSIT AS PROVIDED ABOVE AS LIQUIDATED DAMAGES HEREUNDER IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. Seller’s Initials Buyer’s Initials 12. Closing Conditions. a. Buyer’s Conditions Precedent. Buyer’s obligation to purchase the Property is conditioned upon fulfillment or waiver by Buyer, in Buyer's reasonable discretion, of each of the following conditions (“Buyer’s Closing Condition(s)”) at or prior to closing, which are for Buyer’s benefit only, and may be waived in part or in whole by Buyer (and then only in writing): Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -6- 4909-5509-7155v7 MTOSCANO\04706273 i. Seller Performed All Obligations. Seller shall have performed each and every of Seller’s material obligations set forth in this Agreement. ii. Seller’s Representations and Warranties Are True. All the warranties and representations of Seller set forth in this Agreement shall be true and correct in all material respects at the time when made and at the Close of Escrow. iii. Title Company Able to Issue Title Policy. The Title Company shall be irrevocably committed to issue in favor of Buyer, as the named insured, at Close of Escrow an ALTA standard owner’s policy of title insurance with coverage in an amount equal to the Purchase Price showing title to the Land vested in Buyer as of the Closing Date, subject to the title exceptions approved or waived by Buyer (the “Title Policy”), and Seller shall be ready, willing and able to transfer good and marketable fee title to the Property to Buyer at the Close of Escrow, subject only to the title exceptions approved or waived by Buyer. iv. Seller’s Deliveries. Seller shall have delivered to Escrow Agent the documents described in Section 13(c) below. v. Possession at Closing. Delivery of possession of the Real Property to Buyer at the Close of Escrow, free from any rights or claims of rights of possession of any person or entity. If Buyer’s Closing Conditions are not satisfied or waived in writing by the Closing Date, the Closing Date may, at Buyer’s election and without any additional deposits, be extended for up to ten (10) days after the original Closing Date; provided, however, if an unsatisfied condition is also a default by Seller, then Section 12(b) below shall apply. Buyer may also elect to terminate this Agreement in the event any Buyer Closing Condition is not satisfied on the Closing Date. Upon such termination, the Deposit paid by Buyer, together with any interest which has accrued thereon while held by Escrow Agent, shall be returned to Buyer (whether or not the same has been released to Seller) and the parties shall have no further obligations under this Agreement except as to any indemnities obligations that, by their terms, survive termination and provided that Seller shall not be released hereunder until the full amount of the Deposit has been returned to Buyer. b. Buyer’s Remedies. If escrow fails to close on the Closing Date because of a default by Seller, then Buyer shall, in addition to any other rights or remedies specified in this Agreement or provided by law, have the following rights: i. Buyer may extend the Closing Date (without any additional deposits) for such period as may be determined by Buyer to provide Seller an opportunity to cure the subject default. In the event Seller does not cure by the extended date established by Buyer, then Buyer may thereupon avail itself of the other rights and remedies set forth in this Section 12(b); ii. Buyer may terminate this Agreement, whereupon the Deposit shall be returned to Buyer (whether or not the same has been released to Seller) (together with all interest accrued thereon, if any); or iii. Buyer may initiate an action for specific performance compelling Seller to perform its obligations under this Agreement, including, without limitation, conveying the Property to Buyer in the condition required under this Agreement. Seller hereby acknowledges the following: (A) this Agreement provides to Seller adequate consideration and that such consideration, including, without limitation, the Purchase Price, is just and reasonable, (B) Buyer will be considered to have fully and fairly performed its obligations under this Agreement if Buyer’s representations under Section 9 are accurate as of the scheduled Closing Date, and Buyer has indicated that it is prepared to deposit, or cause to be deposited, in Escrow any remaining balance of the Purchase Price and Buyer’s share of closing costs, and (C) Seller may be compelled to specifically perform its obligations hereunder to and for the benefit of Buyer. Any award of specific performance shall in no way preclude or limit any right of Buyer to recover attorneys’ fees and costs as provided in this Agreement. Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -7- 4909-5509-7155v7 MTOSCANO\04706273 c. Seller’s Conditions Precedent. Seller’s obligation to sell the Property is conditioned upon fulfillment of each of the following conditions (“Seller’s Closing Condition(s)”) at or prior to closing, which are for Seller’s benefit only, and may be waived in part or in whole by Seller (and then only in writing): i. Buyer Performed All Obligations. Buyer shall have performed each and every of Buyer’s material pre-closing obligations set forth in this Agreement. ii. Buyer’s Representations and Warranties Are True. All the warranties and representations of Buyer set forth in this Agreement shall be true and correct in all material respects at the time when made and at the Close of Escrow. iii. Buyer’s Deliveries. Buyer shall have delivered to Escrow Agent the documents described in Section 13(d) below. If Seller’s Closing Conditions are not satisfied or waived in writing by the Closing Date, the Closing Date may, at Seller’s election, be extended for up to ten (10) days after the original Closing Date; provided, however, if an unsatisfied condition is also an uncured default by Buyer, then Section 11 above regarding Liquidated Damages shall apply. 13. Escrow Closing. a. Closing of Escrow. Subject to the satisfaction or waiver by Buyer of all Buyers’ Closing Conditions described above, the Close of Escrow shall occur on the date five (5) business days following the expiration of the Feasibility Period (the “Outside Closing Date”). The Close of Escrow shall be the date on which the Grant Deed (as defined below) to the Property is recorded in the Official Records of the County (the “Close of Escrow” or the “Closing”). The date on which the Closing occurs is referred to herein as the “Closing Date”). b. Grant Deed. Title to the Property shall be conveyed by a grant deed in the form attached hereto as Exhibit B (the “Grant Deed”), without any exceptions except the title exceptions approved or waived by Buyer. c. Seller’s Deposits into Escrow. Seller shall deposit or cause to be deposited into Escrow prior to the Close of Escrow the following: i. The executed and acknowledged Grant Deed; ii. An executed Federal Non-Foreign Investor Affidavit in the form attached hereto as Exhibit C (the “FIRPTA Affidavit”); iii. An executed Withholding Exemption Certificate (California Form 593) as required under the California Revenue and Taxation Code; iv. One original of the estimated closing statement prepared by the Escrow Holder; and v. Such other documents as may be reasonably required by the Escrow Holder to consummate this transaction. d. Buyer’s Deposits into Escrow. Buyer shall deposit into Escrow prior to the Close of Escrow the following: i. The Purchase Price (less the Deposit) in immediately available funds (“Closing Funds”). ii. One original of an estimated closing statement prepared by Escrow Holder; Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -8- 4909-5509-7155v7 MTOSCANO\04706273 iii. Such additional funds as may be required to pay Buyer’s share of closing costs and prorations as provided herein; and iv. Such other documents as may be reasonably required to consummate this transaction. e. Expenses of Escrow. Seller shall pay (A) all County documentary transfer taxes, (B) the premium for Buyer’s Title Policy allocable to an ALTA standard owner’s policy of title insurance, (C) the cost of recording the Grant Deed, and (D) one-half (1/2) of all escrow fees. Buyer shall pay (i) the cost of Buyer’s endorsements, if any, and the excess cost of an ALTA extended owner’s policy of title insurance if Buyer elects to obtain an ALTA extended coverage Title Policy, (ii) the cost of an ALTA survey, if Buyer elects to obtain the same, (iii) one-half (1/2) of all escrow fees, and (iv) all other reasonable and customary expenses, fees and costs incurred in connection with the consummation of the Escrow. Buyer and Seller shall each bear their own respective attorneys’ fees and accounting costs incurred in connection with this transaction. f. Prorations; Taxes. All real and personal property taxes and assessments, including, without limitation, supplemental taxes, if any; water, sewer and utility charges (calculated on the basis of the period covered), and any other expenses normal to the operation and maintenance of the Property, shall all be prorated as of the Closing, on the basis of a 365-day year. g. Possession. Seller shall deliver possession of the Property to Buyer at the Close of Escrow. 14. Condemnation. If, prior to the initial date for Close of Escrow, all or any portion of the Property is subject to an actual taking by a public authority, by the power of eminent domain or otherwise (a “taking”), Seller shall immediately advise Buyer of the same in writing and Buyer shall have the right, exercisable by giving written notice to Seller within ten (10) days after Buyer’s receipt of written notice of such taking from Seller, either to (A) terminate this Agreement (whereupon the Deposit shall be immediately returned to Buyer and neither party shall have any further liability or obligation hereunder; provided, however, Seller shall not be released hereunder until the full amount of the Deposit has been returned to Buyer), or (B) to accept that applicable portion of the Property subject to such taking and to receive (i) a ratable reduction in the Purchase Price (calculated on a square foot basis) based on the square footage of the Property that is subject to the taking in question, and (ii) an assignment of all of Seller’s rights to any condemnation award payable by reason of such taking, to the extent such award exceeds the reduction in the Purchase Price described in subsection (i) above. If Buyer elects to proceed under clause (B) above, Seller shall not compromise, settle or adjust any claims to such award without Buyer’s prior written consent. 15. Broker’s Commission. Buyer and Seller each represent and covenant to the other that, except as herein provided, they have not entered into any agreement, incurred any obligation or know of any facts which might result in an obligation for any party to pay a sales or brokerage commission or finder’s fee for this transaction. Buyer and Seller each agree to indemnify and hold the other harmless from any loss, liability, cost or expense, including reasonable attorneys’ fees, arising from a breach of this representation and warranty. The foregoing indemnity and hold harmless obligations of the parties shall survive the Close of Escrow or any sooner termination of this Agreement. 16. Preliminary Escrow Instructions; Further Documents. This Agreement shall serve as preliminary escrow instructions to Escrow Agent. Each party will, whenever and as often as it shall be requested by the other party or Escrow Agent, execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such further instruments and documents as may be reasonably necessary in order to complete the sale, conveyance and transfer provided for herein, including, without limitation, such escrow instructions as may be required by Escrow Agent and will do any and all other acts and will execute, acknowledge and deliver any and all documents as may be reasonably required in order to carry out the intent and purpose of this Agreement. If there is a conflict between this Agreement and any escrow instructions, this Agreement shall control. 17. Miscellaneous Provisions. Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -9- 4909-5509-7155v7 MTOSCANO\04706273 a. Attorneys’ Fees. If it shall be necessary for either Buyer or Seller to employ an attorney to enforce or defend its rights under this Agreement, the non-prevailing party shall reimburse the prevailing party for its actual attorneys’ fees and costs of suit. b. Notices. Any approval, disapproval, demand, document or other notice (“notice”) which any party may desire to give to any other party shall be in writing and shall be delivered by hand delivery, by overnight courier, by e-mail, by electronic facsimile transmission or by U.S. certified or registered mail (postage prepaid) and shall be deemed received when receipted for at the addressee’s place of business (in the case of hand delivery), on the date of delivery confirmed by the overnight courier service (in the case of overnight courier delivery), on the day sent (in the case of e-mail), when the recipient’s facsimile machine acknowledges to the transmitting party receipt of all pages (in the case of facsimile transmission), and two (2) days after being posted with the U.S. mail (in the case of certified or registered mail delivery). All such notices shall be delivered to the following addresses (or at any other address as a party may later designate): If to Buyer: The City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 Attention: Jimmy Forbis, City Administrator E-mail: CityClerk@CityofGilroy.org Tel. No.: (408) 846-0202 with a copy to: Berliner Cohen, LLP Attention: Andy Faber, Esq. 10 Almaden Blvd., 11th Floor San Jose, CA 95113 E-mail: andy.faber@berliner.com Tel. No.: (408) 286-5800 Fax No.: (408) 998-5388 If to Seller: McCarthy Gilroy, LLC Attention: Joseph A. McCarthy Jr. 210 Almendra Avenue Los Gatos, California 95030 E-mail: joeym@mccarthy.us Tel. No.: (408) 358-5058 Fax No.: (408) 356-2338 with a copy to: Allen Matkins Leck Gamble Mallory & Natsis LLP Three Embarcadero Center, Suite 1200 San Francisco, California 94111 Attn: Timothy Kelly Esq. E-mail: tkelly@allenmatkins.com Tel. No.: (415) 273-7450 If to Escrow Agent: Old Republic Title Attention: Leticia Colon 8060 Santa Teresa Boulevard, Suite 100 Gilroy, CA 95020 E-mail: Lcolon@ORTC.com Tel. No.: (408) 557-8400 c. Governing Law. The laws of the State of California shall govern the validity, enforcement, and interpretation of this Agreement. d. Integration; Modification; Waiver. This Agreement constitutes the complete and final expression of the agreement of the parties relating to the Property and supersedes all previous contracts, agreements, Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -10- 4909-5509-7155v7 MTOSCANO\04706273 and understandings of the parties, either oral or written, relating to the Property. This Agreement cannot be modified, or any of the terms hereof waived, except by an instrument in writing (referring specifically to this Agreement) executed by the party against whom enforcement of the modification or waiver is sought. e. Counterpart Execution; Electronic Signatures. This Agreement may be executed in several counterparts, each of which shall be fully effective as an original and all of which together shall constitute one and the same instrument. In order to expedite the transaction contemplated herein, .pdf or DocuSign signatures sent via e- mail may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the emailed document, are aware that the other parties will rely on the e-mailed signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature. f. Headings; Constructions. The headings which have been used throughout this Agreement have been inserted for convenience of reference only and do not constitute matters to be construed in interpreting this Agreement. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. The words “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” when used in this Agreement shall refer to the entire Agreement and not to any particular provision or section. The agreement contained herein shall not be construed in favor of or against either Seller or Buyer, but shall be construed as if both parties prepared this Agreement. g. Time of the Essence. Time is of the essence of this Agreement and of the obligations of the parties to purchase and sell the Property, it being acknowledged and agreed by and between the parties that any delay in effecting a closing pursuant to this Agreement may result in loss or damage to the party in full compliance with its obligations hereunder. Notwithstanding any period for performance of any party’s obligations as contained in any additional instructions required by Escrow Agent (as referenced in Section 16 above) the rights of the parties hereunder shall be governed by the dates and times set forth in this Agreement. h. Invalid Provisions. If any one or more of the provisions of this Agreement, or the applicability of any such provision to a specific situation, shall be held invalid or unenforceable, such provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of this Agreement and all other applications of any such provision shall not be affected thereby. i. Binding Effect. Subject to the provisions of Section 17(n) below, this Agreement shall be binding upon and inure to the benefit of Seller and Buyer, and their permitted successors and assigns. j. Further Acts. In addition to the acts recited in this Agreement to be performed by Seller and Buyer, Seller and Buyer agree to perform or cause to be performed at the Closing or after the Closing any and all such further acts as may be reasonably necessary to consummate the transactions contemplated hereby. k. Exhibits. All attached Exhibits and all items delivered into Escrow are incorporated herein. l. Survival. All covenants and agreements contained herein to be performed after the Closing Date and, except as otherwise set forth herein, all representations, warranties and indemnities shall survive the delivery and recordation of the Grant Deed and the closing of the purchase and sale of the Property for a period of twelve (12) months, and a party shall only be liable to the other party for a breach of a representation or warranty made by it with respect to which a claim is made by a party against the other party before the end of such twelve (12) month period. m. Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate either Seller or Buyer, to any person or entity other than each other. n. Assignment. Buyer reserves the right to assign this Agreement or take title to the Property in the name of a nominee or assignee; provided that Buyer provide written notice within ten (10) days of the Closing Date of such assignment. Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -11- 4909-5509-7155v7 MTOSCANO\04706273 o. Computation of Time. The time in which any act under this Agreement is to be done shall be computed by excluding the first day and including the last day. If the last day of any time period stated herein shall fall on a Saturday, Sunday or legal holiday, then the duration of such time period shall be extended so that it shall end on the next succeeding day which is not a Saturday, Sunday or legal holiday. Unless preceded by the word “business”, the word “day” shall mean a calendar day. The phrase “business day” or “business days” shall mean those days on which the Superior Court of the county in which the Property is located is open for business. p. 1031 Exchange. Seller may consummate the sale of the Property through a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code (the “Exchange”). If Seller elects to undertake an Exchange, the following terms shall apply: i. Seller, at its option, may assign its rights in this Agreement, as well as transfer its interest in the Property, to an exchange accommodator selected by Seller. Subject to the terms and conditions set forth in this Section 17(p), Buyer agrees to reasonably cooperate with Seller in connection with the Exchange. Buyer shall in no way be obligated to pay any fees, costs or other expenses (including, without limitation, any escrow fees, brokerage commissions, title charges, survey costs, recording costs or documentary transfer taxes) in connection with Seller’s replacement property in the Exchange. ii. The Closing shall not be contingent upon or subject to the consummation of the Exchange. Escrow shall timely close in accordance with the terms of this Agreement notwithstanding any failure, for any reason, of the consummation of the Exchange. Buyer shall have no responsibility or liability on account of the Exchange to Seller or any third party involved in the Exchange. Buyer shall not be required to make any representations or warranties, nor assume any obligations, nor incur any costs, expenses or liabilities in connection with the Exchange. All representations, warranties, covenants and indemnification obligations of Seller to Buyer whether set forth in this Agreement or otherwise existing at law or in equity, shall inure to the benefit of Buyer, notwithstanding the Exchange. Buyer shall not be obligated to hold title to any replacement property in the Exchange. Seller shall indemnify, defend and hold Buyer harmless from and against any and all claims, demands, actions, suits, liens, obligations, liabilities, losses, damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) arising from or related to the Exchange. [Signatures Appear on the Following Page] Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 -12- 4909-5509-7155v7 MTOSCANO\04706273 IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the dates set forth below. SELLER: BUYER: MCCARTHY GILROY, LLC, a California limited liability company By: McManagement Services, Inc., a California corporation Title: Manager By:_________________________ Name: Joseph McCarthy Jr. Title: Vice President Date: July ___, 2025 THE CITY OF GILROY, a California municipal corporation By:_________________________ Name: ______________________ Title: _________________________ Date: July ___, 2025 Approved to Form By:_________________________ City Attorney ATTEST By:_________________________ City Clerk Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71 7/24/2025 Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A Andy Faber City Administrator Jimmy Forbis 29 Kim Mancera 4933-9261-0133.2 394826.00005 EXHIBIT A -1- 4909-5509-7155v7 MTOSCANO\04706273 EXHIBIT A Description of Land Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT A -2- 4909-5509-7155v7 MTOSCANO\04706273 Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT A -3- 4909-5509-7155v7 MTOSCANO\04706273 Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT A -4- 4909-5509-7155v7 MTOSCANO\04706273 Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT A -5- 4909-5509-7155v7 MTOSCANO\04706273 Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT B -1- 4909-5509-7155v7 MTOSCANO\04706273 EXHIBIT B Grant Deed RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: ____________ ____________ _______, CA _____ Attn: _____________ Mail All Tax Statements To: GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, MCCARTHY GILROY, LLC, a California limited liability company (“Grantor”), hereby grants, transfers and assigns to THE CITY OF GILROY, a California municipal corporation (“Grantee”) all that certain real property located in the City of Gilroy, County of Santa Clara, State of California (“Property”), which Property is more particularly described in Exhibit A attached hereto and incorporated herein by this reference. IN WITNESS WHEREOF, this Grant Deed has been executed this ____ day of ________, 2025. GRANTOR: MCCARTHY GILROY, LLC, a California limited liability company By: McManagement Services, Inc., a California corporation Title: Manager By:_________________________ Name: Joseph McCarthy Jr. Title: Vice President Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT B -2- 4909-5509-7155v7 MTOSCANO\04706273 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 ) ) ss. COUNTY OF ______________ ) On _______________, 2025, before me, ______________________, a Notary Public, personally appeared ________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) 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) Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT B -3- 4909-5509-7155v7 MTOSCANO\04706273 Exhibit A TO GRANT DEED Legal Description of Property Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT B -4- 4909-5509-7155v7 MTOSCANO\04706273 Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A 4933-9261-0133.2 394826.00005 EXHIBIT C -1- 4909-5509-7155v7 MTOSCANO\04706273 EXHIBIT C FIRPTA Affidavit CERTIFICATE OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code of 1986, as amended (“Code”), provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. Sections 18805 and 26131 of the California Revenue and Taxation Code provide that a transferee (buyer) of a California real property interest must withhold tax if withholding is required by Section 1445 of the United States Internal Revenue Code. To inform , a (“Transferee”), that withholding of tax under Section 1445 of the Code is not required upon disposition of certain real property to the Transferee by , a (“Transferor”), the Transferor hereby warrants, represents and certifies the following on behalf of the Transferor: 1. The Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations), but rather is a partnership formed under the laws of one of the United States. 2. The Transferor’s U.S. employer identification number is . 3. The Transferor’s office address is . 4. The Transferor understands that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury the Transferor declares that the undersigned has examined this certification and to the best of its knowledge and belief it is true, correct, and complete. TRANSFEROR: MCCARTHY GILROY, LLC, a California limited liability company By: McManagement Services, Inc., a California corporation Title: Manager By:_________________________ Name: Joseph McCarthy Jr. Title: Vice President Docusign Envelope ID: 235AF354-BD00-47FA-857E-274C6456BF71Docusign Envelope ID: 5B8E51BA-5E40-4448-95F3-E2F8B2A66C3A