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135-22 - Roland & Roland - ContractREAL ESTATE PURCHASE AND SALE AGREEMENT This REAL ESTATE PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of the date of the last signature (the "Effective Date") by and between ROLAND & ROLAND, a Washington general partnership ("Seller") and the CITY OF PORT ORCHARD, a Washington municipality ("Buyer"). RECITALS: A. Seller owns certain real property located in Kitsap County, Washington, located at the southern end of Sherman Ave in the City of Port Orchard, Washington (Tax Parcel No. 022301-3- 109-2000, also known as Resultant Parcel 3 of Boundary Line Adjustment No. LU22-BLA-05, Kitsap County Recording No. 202212010101, and more particularly described on Exhibit A attached to this Agreement (the "Land"). B. Seller desires to sell and convey the Real Property to Buyer, and Buyer desires to purchase and acquire the Real Property from Seller, on the terms and conditions set forth in this Agreement. AGREEMENT NOW THEREFORE, in consideration of the respective agreements set forth below and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Seller and Buyer agree as follows: Property. 1.1 Sale of Real Property. For purposes of this Agreement, the term "Real Property" shall mean the Land and all improvements thereon, together with all of Seller's right, title and interest in and to all rights, licenses, privileges, reversions, easements, and appurtenances benefiting the Land including, without limitation, Seller's right, title and interest, if any, in (i) all minerals, water, oil, gas and other hydrocarbon substances in, on and under the Land; (ii) all development rights, zoning, excess floor area rights, air rights, water rights and water stock, wastewater, storm drainage and other utility rights, credits and capacities, permits and development agreements relating to the Land; (iii) rights in and to land lying in the bed of any alleys, highways, streets, roads or avenues and other public rights of way and rights of access thereto, open or proposed, in front of or adjoining any such parcel or any portion thereof, and all right, title and interest for damage to any such parcel and improvements or any portion thereof by reason of any change of grade of any street, and other rights pertaining to the Land; (iv) rights in and to strips and gores of land within or adjoining the Land; (v) rights to utility connections and hook ups and all rights under utility agreements with any applicable governmental or quasi -governmental entities or agencies and with adjoining land owners with respect to the provision of utility services to the Land; and (vi) any other easements, rights of way or other appurtenances, licenses, hereditaments and privileges used or connected with the beneficial use or enjoyment of the Land. Seller agrees to sell and convey the Real Property to Buyer and Buyer agrees to purchase the Real Property from Seller, subject to the terms and conditions set forth in this Agreement. 1.2 Other Property. In addition, Seller agrees to sell and convey to Buyer, -and Buyer agrees to purchase and acquire from Seller all of Seller's interest in any intangible property used or useful in connection with the Real Property, including, without limitation, REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 1 any warranties, guaranties, licenses, permits, entitlements, governmental approvals and certificates of occupancy that benefit the Real Property (the "Intangible Property"). As used in this Agreement, the term "Property" shall mean, collectively, the Real Property and the Intangible Property. The Property does not include any tangible personal property. 2. Purchase Price; Other consideration. 2.1 Purchase Price. The purchase price for the Property (the "Purchase Price") is $850,000 (Eight hundred and fifty thousand dollars). The Purchase Price shall be payable in cash through escrow at Closing. 2.2 [Intentionally Omitted] 2.3 [Intentionally Omitted] 2.4 Drainage Easement. In addition to the purchase price, the execution by the City of Port Orchard of the drainage easement in the form of Exhibit © to this Agreement to be recorded as part of Closing is material consideration for the Seller to sell the Property. 3. Title. 3.1 Conveyance. On the Closing Date, (a) Seller shall convey to Buyer fee simple title to the Real Property by a duly executed and acknowledged bargain and sale deed (the "Deed"), in the form attached to this Agreement as Exhibit B subject only to any liens or encumbrances ereatdd by Buyer and to those other exceptions that are approved or deemed approved pursuant to Section 3.2 below (collectively, the "Permitted Exceptions"). Non -delinquent ad valorem taxes and assessments are a Permitted Exception and shall be prorated at Closing. 3.2 Title Review. 3.2.1 Title Commitment. Parties acknowledge that a Second Title Commitment was issued by Title Company, with a commitment date of December 2, 2022, under the file number E2022-421156 (the "Title Commitment"), together with copies of documents referred to on Schedule B of the Title Commitment as exceptions to coverage (the "Title Documents"). Buyer has access to surveys of the Property and surrounding parcels as part of the boundary lot line adjustment application, as well as recorded surveys under recording number 200811040156 as corrected by the correction under recording number 20090109. 3.2.2 Approval of Exceptions. Buyer shall have the right to review the Title Commitment and all matters shown as exceptions on the Title Commitment ("Exceptions") in its sole discretion. On or before the day that is five (5) business days after the Effective Date Buyer may deliver written notice to Seller disapproving any Exceptions, other than a temporary construction easement granted to Washington State substantially similar to Exhibit C to this Agreement, shown in the title Commitment (the "Disapproved Exceptions"). Any Exceptions not disapproved in writing shall be deemed to be Permitted Exceptions. The Buyer agrees that a temporary easement granted to the State of Washington, substantially similar to Exhibit C, is a Permitted Exception. Within REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 2 five (5) days after receipt of the notice of Disapproved Exceptions, Seller shall notify Buyer which Disapproved Exceptions Seller has elected to cure or cause to be cured at or before Closing whereupon Seller will be obligated to remove such Disapproved Exceptions at its expense. If Seller does not give Buyer notice before the expiration of the five (5) day period, Seller will be deemed as of the last day of such period to have given notice that it has elected not to remove any Disapproved Exceptions other than Mandatory Removal Items (as defined below). If Seller does not elect to cure all of the Disapproved Exceptions and Buyer elects to waive its Due Diligence Contingency, all Disapproved Exceptions that Seller has not agreed to cure shall be deemed to have been approved by Buyer and will thereafter be Permitted Exceptions. 3.2.3 Updates. If any updates of the Title Commitment are received by Buyer after Buyer has delivered its initial notice of Disapproved Exceptions (each an "Update"), the same procedures shall be followed except that (a) Buyer shall have five (5) business days after receipt of the Update and copies of all documents identified in any new Exception to send its notice of Disapproved Exceptions, and (b) if Seller elects not to cure any Disapproved Exceptions in any Update, Buyer will have ten (10) days from the date of Seller's notice to notify Seller of Buyer's election either to proceed with the purchase and take the Property subject to those Disapproved Exceptions, or to terminate this Agreement. If Buyer fails to give notice within that ten (10) day period, Buyer shall be deemed to have elected to terminate this Agreement, and this Agreement shall terminate without further notice. 3.2.4 Exceptions Not Permitted. Seller shall be required to remove at Closing and Buyer shall not be required to provide any disapproval notice with respect to (a) any monetary encumbrances created or suffered by Seller, such as mortgages, deeds of trust, construction liens not caused by Buyer and judgments not caused by Buyer, (b) any encumbrance that Seller creates in breach of the terms of this Agreement, (c) any Exception relating to due authorization and delivery of this Agreement and the Closing documents, (d) any Exception relating to claims by any creditor of Seller or any of its current or prior officers, directors or shareholders, and (e) any Exception relating to the corporate history of Seller, including any claim relating to the failure of Seller to be a corporation in good standing at any time during its period of ownership of the Property (collectively, "Mandatory Removal Items"). 3.2.5 Termination Rights. If prior to the Due Diligence Deadline Buyer elects to terminate this Agreement under this Article, (a) the escrow established under this Agreement will be terminated; (b) Buyer shall pay the cancellation charges of Escrow Holder, if any, and (c) Buyer shall execute such documentation as may be necessary; thereafter neither party will have any further rights or obligations under this Agreement except as otherwise provided in this Agreement. 3.3 Title Policy. Buyer shall cause Title Company to deliver to Buyer and Seller at Closing an ALTA standard owner's policy of title insurance insuring Buyer's title to the Real Property subject only to the Permitted Exceptions with such endorsements as Buyer may reasonably request ("Buyer's Title Policy"). Buyer's Title Policy may not contain any exception for any REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 3 Mandatory Removal Items. Buyer's Title Policy shall be in the full amount of the Purchase Price and dated the date of Closing. Buyer's Title Policy shall insure Buyer's fee title to the Real Property free and clear of all rights of tenants or other parties in possession and subject to no exceptions other than the standard printed exceptions for an ALTA standard owner's coverage policy (as modified after Seller delivery of an ALTA Owner's Affidavit) and the Permitted Exceptions. Seller shall execute and deliver any -other documents required by Title Company reasonably necessary to close the transaction described herein and for the title Company to issue the Buyer's Title Policy in the form required hereunder (including a standard form of ALTA Owner's Affidavit sufficient for removal of general exceptions, except as to general exceptions (B), (G), (H), (I) and (J)) or which are otherwise required by this Agreement. 4. Buyer's Conditions to Closing. 4.1 Buyer's Due Diligence Contingency. Buyer's obligation to purchase the Property is contingent on Buyer's determination in Buyer's sole and absolute discretion that the Property is suitable for Buyer's intended purposes ("Buyer's Due Diligence Contingency"). Buyer's Due Diligence Contingency must be satisfied or waived on or before five business (5) days after the Effective Date ("Due Diligence Deadline"). Buyer's review may include any matters relating to the Property, including, without limitation, the physical, legal, structural, electrical, mechanical, soil, drainage, environmental, economic, and land use and zoning. Buyer may conduct such due diligence investigations of the Property as it deems necessary or appropriate and may examine and investigate to its full satisfaction all facts, circumstances, and matters relating to the Property provided that Buyer shall not unreasonably interfere with the normal operation of the Property. If Buyer provides written notice to Seller on or before the Due Diligence Deadline that the Property is acceptable to Buyer for Buyer's intended purposes, then Buyer's Due Diligence Contingency shall be deemed satisfied or waived, and this Agreement shall continue in full force and effect on the terms and conditions set forth herein. If Buyer provides written notice to Seller prior to Due Diligence Deadline that it will not move forward with the purchase, this Agreement shall automatically terminate. If Buyer does not provide such notice prior to the Due Diligence Deadline, Buyer shall be deemed to have determined that the Property is acceptable to Buyer. 4.1.1 Due Diligence Materials. Promptly after the Effective Date (to the extent not provided prior to the Effective Date) Seller shall make available to Buyer for inspection and copying all information in the possession or control of Seller or any of its owners or agents regarding the Property including but not limited to tax statements and correspondence with taxing authorities, leases and service contracts currently in effect, wetlands reports, engineering reports, environmental studies, soils studies, plans, specifications, maps, surveys, unrecorded easements, restrictive covenants, licenses and occupancy agreements and any other relevant materials relating to the Property (collectively, the "Due Diligence Materials"). 4.1.2 Right of Entry. Commencing on the Effective Date and until Closing, Buyer and its authorized agents and representatives may enter upon the Real Property and into the improvements thereon to inspect the physical condition of the Property at the expense of Buyer. Buyer agrees to provide Seller with forty-eight (48) hours' prior notice of the need for it or its consultants to enter into any improvements on the Real Property. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 4 4.1.3 Due Diligence Indemnity. Buyer shall not cause any material damage to the Real Property in the course of its review and shall repair any damage to the Real Property that results from Buyer's entry, at Buyer's cost. Buyer shall defend, indemnify and save Seller harmless from all liability, cost, damage and expense (including, but not limited to, reasonable attorneys' fees) in connection with all claims, suits and actions made or brought against Seller by any person or entity arising out of actual or alleged injuries or damages to persons, entities or property received or sustained in connection with, or as a result of, the acts or omissions of Buyer, its agents or employees, in exercising its rights of entry granted herein; provided, however, that Buyer shall not indemnify Seller for any claim, suit or action caused by the negligence or willful misconduct of Seller or any occupant of the Property (or any of their agents or employees), or any physical condition or hazardous substances or other regulated materials, or the discovery of any physical condition or hazardous substances or other regulated materials, existing on, under, in or around the Real Property before Buyer's entry onto the Real Property. Without limiting the generality of the foregoing, Buyer assumes all liability for actions brought by its employees to the extent those actions lie within the scope of the foregoing indemnity, and waives any immunity that it may have under industrial insurance laws (Title 51, RCW, as amended) to the extent necessary to give effect to the foregoing indemnity. If any lien is placed on the Real Property as a result of with Buyer's exercise of the rights of entry, Buyer shall cause the lien to be removed within twenty (20) days of Buyer's receipt of written notice from Seller. Notwithstanding anything to the contrary in this Agreement, the obligations set forth in this Section 4.1.3 will survive the termination of this Agreement. 4.1.4 Insurance. Buyer shall cant' a commercial general liability insurance policy for claims arising from bodily injury and/or property damage, written on an "occurrence" basis, in the minimum amount of One million dollars ($1,000,000.00) in connection with its entry onto the Real Property and shall name Seller as an additional insured. A certificate of insurance evidencing the same shall be provided to Seller by Buyer upon request by Seller. 4.2 Buyer's Right to Waive. Each of the foregoing contingencies is for the sole benefit of Buyer and Buyer may at any time elect by written notice to waive such contingencies and to close under Section 6 below. 4.3 Termination. If prior to the Due Diligence Deadline Buyer terminates this Agreement pursuant to any provision this Article 4, (a) escrow shall terminate, and (b) Buyer shall pay the fees associated with terminating escrow. Thereafter, neither party will have any further rights or obligations under this Agreement, except as otherwise provided in this Agreement. Upon termination, Buyer and Seller shall execute such documentation as Escrow Holder may require. 5. Sale As Is. Buyer acknowledges and agrees that, as of the time it satisfies or waives Buyer's Due Diligence Contingency, it will have had a full opportunity to inspect and investigate every aspect of the Real Property, including all matters related to legal status or requirements, physical condition, title, leasing, contracts and other matters of significance. The Real Property is being sold by Seller, and Buyer agrees to accept the Real Property, "AS -IS, WHERE -IS" in its condition as of the Closing Date, with all faults and defects, known and unknown. Except to the REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 5 extent expressly set forth in Section 8.1 below, Seller makes no representations or warranties whatsoever as to the condition of the Real Property, whether express or implied, including but not limited to any warranties or representations as to the merchantability, condition, fitness or habitability of the Real Property, or as to its use for a particular purpose, or its compliance with governmental requirements or environmental laws, or as to the physical or environmental condition of the Real Property, including but not limited to the condition of the soil, subsoil, groundwater or surface water, and including the structural condition of improvements in, on or to the Real Property, or as to the presence, use, discharge, spill, storage, generation, migration, handling, recycling, processing, treatment, disposal, release or threat of release of any hazardous substances or other regulated materials at the Real Property, or as to any zoning laws, codes, permits, or other laws, or the availability or existence of any water, sewer or other utilities (public or private). 6. Closing. 6.1 Opening Escrow. Upon execution of this Agreement, the parties shall each deposit an executed counterpart of this Agreement with the Escrow Holder and this Agreement shall serve as escrow instructions for consummation of the purchase and sale contemplated hereby. Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Escrow Holder to comply with the terms of this Agreement; provided, however, that if there is any conflict between the provisions of this Agreement and any such supplementary escrow instructions, the terms of this Agreement shall control. Escrow.Holder's execution below is solely for the purpose of agreeing to act as escrow holder in accordance with the terms of this Agreement. 6.2 Closing Date; Time and Place of Closing. This transaction will be closed in escrow by Title Company acting in its capacity as Escrow Holder. The closing ("Closing") will be held at the offices of Escrow Holder on a business day mutually acceptable to Buyer and Seller within ten (10) days after the Due diligence Period has expired but not later than December 30, 2022 (the "Closing Date"). Buyer and Seller shall deposit in escrow with Escrow Holder all instruments and documents necessary to complete the transaction in accordance with this Agreement. As used herein, "Closing" or "date of Closing" or "Closing Date" means the first date on which all appropriate documents have been recorded and the proceeds of sale are available for disbursement to Seller. 6.3 Closing Costs. 6.3.1 At Closing, Seller shall pay real estate excise taxes. 6.3.2 At Closing, Buyer shall pay all Closing costs, except those specified in Section 6.3.1, including (i) the premium and related tax for standard coverage policy of title insurance for the Buyer's Title Policy; (ii) the costs of removing any title exceptions that Seller is obligated by this Agreement to remove; (ii) costs to record the Deed, (iii) the cost of the premium for the Buyer's Title Policy, (iv) the costs of any title insurance endorsements required by Buyer, and (v) Escrow Holder's escrow fees and charges. 6.3.3 Each party shall be responsible for its own legal, accounting and consultant fees. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 6 6.4 Prorations 6.4.1 All real property taxes, assessments and other income and expenses in connection with the operation of the Property shall be apportioned as of 12:01 a.m. on the date of Closing, as if Buyer were vested with title to the Property during the entire date of Closing, such that Buyer shall have the benefit of the income and the burden of expenses for the date of Closing. Any income and other revenue and expenses of the Property shall be prorated based upon the income and expenses actually collected or paid for the month in which Closing occurs. 6.4.2 All gas, electric, sewer, stormwater and other utility charges will be prorated by the parties outside of Closing as of the Closing Date. The parties expressly waive their right under RCW 60.80 to require Escrow Holder to satisfy unpaid utility charges out of funds deposited into escrow. 6.4.3 If full and final information necessary to complete such prorations is not available at the time of Closing, the prorations at Closing shall be made on the basis of estimates and the obligation to complete such prorations shall survive Closing provided that the full and final prorations shall be completed outside of escrow no later than six (6) months after Closing. 6.5 Foreign Investment in Real Property Tax Act ("FIRPTA"). The parties agree to comply in all respects with Section 1445 of the United States Internal Revenue Code of 1986, as amended (the "Code") and the regulations issued thereunder (the "Regulations"). Seller shall deliver to Buyer through escrow at Closing a nonforeign affidavit as prescribed by the Regulations, properly executed. 6.6 Seller's Escrow Deposits. On or before the Closing Date, Seller shall deposit into escrow the following: 6.6.1 the Bargain and Sale Deed, the form as Exhibit B to this Agreement, executed by Seller and notarized; 6.6.2 a completed Real Estate Excise Tax Affidavit executed by Seller; 6.6.3 a nonforeign affidavit pursuant to Section 1445 of the Code executed by Seller, if applicable; and 6.6.4 a standard form of ALTA Owner's Affidavit sufficient for removal or modification of general preprinted title exceptions. 6.7 Buyer's Escrow Deposits. On or before the Closing Date, Buyer shall deposit into escrow the following: 6.7.1 cash in an amount sufficient to pay the balance of the Purchase Price and Closing costs; and 6.7.2 a duly executed and notarized drainage easement in form of Exhibit D to this Agreement. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 7 6.7.3 a duly executed and completed Real Estate Excise Tax Affidavit. 6.8 Additional Instruments and Documentation. Seller and Buyer shall each deposit any other instruments and documents that are reasonably required by Escrow Holder or otherwise required to close the escrow and consummate the purchase and sale of the Property in accordance with this Agreement. Upon Closing, Seller shall deliver to Buyer outside of escrow all keys to the Real Property in Seller's possession. 7. Seller's Covenants Pending Closing. From the Effective Date until Closing or termination of this Agreement, Seller shall: (i) maintain the existing insurance on the Property, (ii) maintain the Property in accordance with Seller's past practices, (iii) not lease, rent or otherwise permit any person or persons to occupy or use any portion of the Property for any period extending beyond the Closing Date, (iv) work cooperatively with Buyer throughout the entitlement process (including allowing Buyer to post notices on the Property) (v) remove the Property from the market, cease all discussions with other prospective purchasers and not solicit or accept offers regarding the Property; (vi) not enter into or allow any contracts nor cause or allow any new Exceptions that will be binding on the Property beyond the Closing Date; and (vii) deliver to Buyer all information, notices, correspondence or other materials that come into its possession relating to the Property. Prior to the Closing Date, Seller shall terminate all leases, licenses and occupancy agreements affecting all or any part of the Property and shall provide such evidence as Title Company may require to issue Buyer's Title Policy with no exception for rights of tenants in possession. 8. Representations and Warranties 8.1 Seller's Representations and Warranties. Seller represents and warrants to Buyer that: 8.1.1 Authority of Seller. Seller is a general partnership duly organized and validly existing and in good standing under the laws of the State of Washington. Seller owns the Real Property in fee simple. Seller has full right, title, authority, and capacity to execute and perform this Agreement and to consummate all of the transactions contemplated herein and each Seller signatory hereto is duly authorized to execute and deliver this Agreement on behalf of Seller. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (a) conflict with or result in a breach of any law, regulation, writ, injunction or decree of any court or governmental instrumentality applicable to Seller; or (b) constitute a breach of any agreement to which Seller is a party or by which Seller is bound. 8.1.2 Litigation. There is no claim, litigation, proceeding or governmental investigation pending or to Seller's knowledge threatened against or relating to Seller, the Property, or the transactions contemplated by this Agreement or that could result in any lien or lis pendens against the Property. 8.1.3 No Bankruptcy or Insolvency Proceedings. There are no attachments, executions, assignments for the benefit of creditors, receiverships, conservatorships, or voluntary or involuntary proceedings in bankruptcy or pursuant to any other debtor relief laws contemplated or filed by Seller and, to the knowledge of Seller, Seller has received no written notice of any of the same pending or threatened against Seller. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 8 8.1.4 Leases. There are no leases, occupancy agreements, rental contracts or other agreements in effect giving any party the right to use or occupy any portion of the Property after the Closing Date; 8.1.5 Service Contracts. There are no service contacts, maintenance agreements, management agreements, leasing or brokerage agreements or similar agreements affecting the Property that will continue after or survive Closing; 8.1.6 No Tangible Personal Property. The Property contains no tangible personal property owned by the Seller and Seller shall cause any tenant to remove all of the tenant's tangible personal property from the Property prior to Closing. 8.1.7 Due Diligence Materials. Seller provided to Buyer true, correct and complete copies of all environmental reports in connection with the Property and other Due Diligence Materials in the possession or control of Seller or its agents or owners. 8.1.8 Anti -Terrorism and Money Laundering Representation and Indemnification. Seller certifies to Buyer that: (i) neither it nor its managers, members, or controlling owners are acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order, the United States Department of Justice, or the United States Treasury Department as a terrorist, "Specially Designated National or Blocked Person," or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by the Office of Foreign Assets Control ("SDN"); (ii) neither it nor its managers, members, or controlling owners are engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation; and (iii) neither it nor its managers, members, or controlling owners are in violation of Presidential Executive Order 13224, the USA Patriot Act, the Bank Secrecy Act, the Money Laundering Control Act or any regulations promulgated pursuant thereto. Seller hereby agrees to defend, indemnify, and hold harmless Buyer from and against any and all claims, damages, losses, risks, liabilities and expenses (including reasonable attorneys' fees and costs) arising from or related to any breach of the foregoing certification. Should Seller, prior to Closing, be designated an SDN, Buyer may, at its sole option, terminate this Agreement. 8.1.9 Hazardous Substances. Upon request (i) Seller shall provide to Buyer (A) all information in Seller's possession relating to liability or property insurance policies in effect at any time relating to all or any part of the Property, including policies purchased by tenants, prior tenants and prior owners, and (B) all expired leases in Seller's possession (if any) with any tenant that operated at the Property and any guaranties related to such leases, and (ii) will cooperate reasonably with Buyer's efforts to pursue coverage or contribution from potentially responsible parties and their insurers if remediation of any hazardous substances is required after Closing. Except to the extent of Seller's representations and warranties in Section 8 of this Agreement, Seller has not REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 9 made, does not make, and specifically negates and disclaims any representations, warranties, promises, covenants, contracts or guarantees of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning, or with respect to the value, nature, quality, or condition of the Property (collectively "Condition of the Property"), including, without limitation: (a) The water, soil and geology; (b) The income to be derived from the Property; (c) The suitability of the Property for any and all activities and uses that Buyer or anyone else may conduct thereon; (d) The compliance or noncompliance of or by the Property or its operation with any laws, rules, ordinances, regulations or decrees of any applicable governmental authority or body or the zoning or land use designation for the Property; (e) The habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property; (f) The manner or quality of the construction or materials, if any, incorporated into the Property and the existence, nonexistence or condition of utilities serving the Property; (g) The actual, threatened or alleged existence, release, use, storage, generation, manufacture, transport, deposit, leak, seepage, spill, migration, escape, disposal or other handling of any Hazardous Substances in, on, under or emanating from or into the Property, and the compliance or noncompliance of or by the Property or its operation with applicable federal, state, county and local laws and regulations, including, without limitation, Environmental Laws and regulations and seismic/building codes, laws and regulations. For purposes of this Agreement, the teen "Environmental Law" shall mean: any federal, state or local statute, regulation, code, rule, ordinance, order, judgment, decree, injunction or common law pertaining in any way to the protection of human health, safety, or the environment, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9602 et. seq. ("CERCLA"); the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. ("RCRA"); the Washington State Model Toxics Control Act, RCW ch. 70A.305 ("MTCA"); the Washington Hazardous Waste Management Act, RCW ch. 70A.300; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Washington Water Pollution Control Act, RCW ch. 90.48, and any laws concerning above ground or underground storage tanks. For the purposes of this Agreement, the term "Hazardous Substance" shall mean: any waste, pollutant, contaminant, or other material that now or in the future becomes regulated or defined under any Environmental Law; or (h) Any other matter with respect to the Property. 8.1.9 Option to Acquire Property. No person or entity other than Buyer has any right or option to acquire any ownership interest in the Property. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 10 8.1.10 Condemnation. No condemnation proceedings relating to the Property or its access to or from public streets or utilities are pending or, to Seller's knowledge, have been threatened. 8.1.11 Fee Simple Title. Seller is the owner in fee simple of the Property. 8.1.12 Representations Survive Closing. Seller covenants that its representations and covenants contained in this Section shall be true and complete at Closing and shall survive Closing. 8.2 Buyer's Representations and Warranties. Buyer represents and warrants to Seller that: 8.2.1 Authority of Buyer. Buyer has the power and authority to enter into this Agreement, and each Buyer signatory hereto is duly authorized to execute and deliver this Agreement on behalf of Buyer. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (a) conflict with or result in a breach of any law, regulation, writ, injunction or decree of any court or governmental instrumentality applicable to Buyer; or (b) constitute a breach of any agreement to which Seller is a party or by which Buyer is bound. 8.2.2 Litigation. There is no claim, litigation, proceeding or governmental investigation pending or to Buyer's knowledge threatened against or relating to Buyer, the Property, or the transactions contemplated by this Agreement which, if successful, would impair Buyer's ability to perform its obligations set forth in this Agreement. 8.2.3 Drainage Easement. Buyer shall cause a fully executed and notarized Drainage Easement, in the form of Exhibit D to this Agreement, be recorded concomitant with, or immediately after, the recording of the fully executed Bargain and Sale Deed. 8.2.4 Temporary Easement. Prior to Closing, the Seller shall execute a temporary easement, similar in form to Exhibit C to this Agreement, affecting the Property that has been requested by the State of Washington. Notwithstanding any other provision in this Agreement, the execution by Seller of a temporary easement, substantially in the form of Exhibit C, after the Effective Date shall not constitute an event of default. 8.2.5 Representations Survive Closing. Buyer covenants that its representations and covenants contained in this Section shall be true and complete at Closing and shall survive Closing. 9. Real Property Disclosure. To the maximum extent permitted by RCW ch. 64.06, Buyer expressly waives its right to receive from Seller a seller disclosure statement ("Seller Disclosure Statement") and to rescind this Agreement, both as provided for in RCW ch. 64.06. Seller and Buyer acknowledge and agree that Buyer cannot waive its right to receive the section of the Seller Disclosure Statement entitled "Environmental" if the answer to any of the questions in that section would be "yes." Nothing in any Seller Disclosure Statement delivered by Seller creates a REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 11 representation or warranty by the Seller, nor does it create any rights or obligations in the Parties except as set fortli in RCW ch. 64.06. Buyer is advised to use its due diligence to inspect the Property as allowed for by this Agreement, and that Seller may not have knowledge of defects that careful inspection might reveal. Buyer specifically acknowledges and agrees that any Seller Disclosure Statement delivered by Seller is not part of this Agreement, and Seller has no duties to Buyer other than those set forth in this Agreement. 10. Casualty Loss. No casualty affecting the Real Property shall cause this Agreement to terminate or give either party any right to terminate this Agreement. In the event of any casualty affecting the Real Property, Seller shall have no obligation to repair or replace any damage or destruction, and the Purchase Price shall not be reduced, but Buyer shall receive an assignment of or a credit at Closing for the amount of the proceeds of any casualty insurance otherwise payable to Seller. 11. Eminent Domain. If at any time after the Effective Date and before Closing Seller receives any notice of the commencement of any condemnation proceedings, or other proceedings in the nature of eminent domain, that are threatened or commenced with respect to the Real Property, it will promptly send a copy of such notice to Buyer. If Seller receives such a notice, and if portion of the Real Property to be taken would in Buyer's opinion adversely affect Buyer's development plans, then Buyer will have the right to terminate this Agreement by giving written notice of termination to Seller and Escrow Holder. Upon receipt of such termination election, this Agreement will terminate, and Seller and Buyer will be released from all further obligation or liability hereunder, except as otherwise specified by this Agreement. If all or any portion of the Real Property has been or is hereafter condemned or taken by eminent domain and this Agreement is not terminated by Buyer pursuant to the foregoing, then Seller will assign to Buyer at Closing Seller's rights to and interest in the entire awards in condemnation or eminent domain, or damages of any kind, to which Seller may have become entitled or may thereafter be entitled by reason of any exercise of the power of condemnation or eminent domain with respect to the Real Property or any portion thereof or shall credit to Buyer at Closing the full amount of proceeds paid to Seller. 12. Possession. Seller shall deliver exclusive possession of the Property to Buyer on the Closing Date free and clear of all tenancies and subject only to the Permitted Encumbrances. 13. Events of Default. 13.1 Notice and Opportunity to Cure. Except for any failure to close by the date specified in this Agreement which shall be deemed to be a non -curable default, neither party shall be deemed to be in default of this Agreement unless and until the other party shall have given the defaulting party written notice describing the nature of the default and the defaulting party shall have failed to cure the default within ten (10) days. 13.2 By Seller. In the event of any default under this Agreement by Seller, Buyer will be entitled to (a) seek specific performance of Seller's obligations under this Agreement, (b) recover Buyer's actual damages from such default but limited to those that occur subsequent to the Effective Date, and (c) pursue any other remedy available at law or in equity. If Buyer elects not to seek specific performance or if specific performance is not available, the Seller shall reimburse Buyer for all costs incurred by Buyer in connection with the acquisition of the Property that occurred subsequent to the Effective Date. The duty to pay such sums shall be a lien on the Property and the Buyer shall have no obligation to release such lien until all such sums have been paid in full. The duty to pay such sums shall be a covenant running with the land and shall bind Seller's successors and assigns. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 12 13.3 By Buyer. The Buyer agrees that in the event Buyer fails, without legal excuse, to complete the purchase of the Property after the conclusion of the Due Diligence Contingency, Seller damages would be difficult to estimate and therefore in such an event of default, Buyer shall pay to Seller fifty thousand dollars ($50,000.00), which is a reasonable estimate of the loss likely to be suffered by Seller in the event of Buyer's default is a just measure of damages for the harm caused to Seller by Buyer's breach and is not a penalty. In the event of any default under this Agreement by Buyer other than a failure to close, Seller will be entitled to (a) seek specific performance of Buyer's obligations under this Agreement, (b) recover Seller's actual damages from such default, and (c) pursue any other remedy available at law or in equity. 14. Notices. All notices, demands, requests, consents and approvals which may, or are required to, be given by any party to any other party hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by a nationally recognized overnight delivery service, (c) electronically transmitted (including email or facsimile if an email address or facsimile number is indicated below) with a confirmation copy sent by regular United States mail, or (d) mailed or deposited in the United States mail and sent by registered or certified mail, return receipt requested, postage prepaid to the addresses set forth below. Seller: Roland and Roland General Partnership 11061 Arroyo Beach Place SW Seattle, WA. 98146 Email: kendallhmoore@gmail.com Buyer: City of Port Orchard c/o Robert Putaansuu, Mayor 216 Prospect Street Port Orchard, WA 98366 Email: rutaansuu@portorchardwa.gov With a copy to: Charlotte A. Archer Inslee Best Skyline Tower, Suite 1500 10900 NE 4th Street Bellevue, WA 98004 Email: carcher@insleebest.com Escrow Holder: LAND TITLE COMPANY OF KITSAP COUNTY c/o Sabre Massey 600 Kitsap Street Suite 201 Port Orchard, WA 98366 360-876-0450/360-876-0574(fax) Email: sabrem@landtitleco.net Either party hereto may by proper notice made by the other party designate a different address for giving of notices. All notices shall be deemed given on the day such notice is delivered (or if refused, the date of such refusal), on the date of transmission if sent by email or facsimile, or on the third business day following the date such notice is mailed in accordance with this Section. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 13 15. Brokers and Finders. Each party represents and warrants to the other that no broker or finder has been involved in this transaction. 16. Miscellaneous Provisions. 16.1 Amendments. This Agreement may be amended or modified only by a written instrument executed by Seller and Buyer. 16.2 Governing Law. This Agreement and the legal relations between the parties hereto will be governed by, construed and enforced in accordance with the laws of the state of Washington without regard to its principles of conflicts of laws. 16.3 Entire Agreement. This Agreement and the exhibits and schedules attached hereto constitute the entire agreement between the parties with respect to the purchase and sale of the Property, and supersede all prior agreements and understandings between the parties relating to the subject matter of this Agreement. There are no verbal or other agreements, including but not limited to any representations or warranties, which modify or affect this Agreement. 16.4 Attorneys' Fees. In case either party shall employ an attorney to enforce any provision of this Agreement that is breached by the other, or to recover damages for such a breach, then the prevailing party shall be entitled to its reasonable attorneys' fees and all costs and expenses expended or incurred in connection with its claim, including those fees, costs and expenses on appeal at all levels. Venue for any legal action shall be in Kitsap County, Washington. 16.5 Time of the Essence. Time is of the essence of this Agreement. 16.6 Waiver. Any waiver must be in writing signed by the party making the waiver. Neither Seller's nor Buyer's waiver of the breach of any covenant under this Agreement will be construed as a waiver of the breach of any other covenants or as a waiver of a subsequent breach of the same covenant. 16.7 Survival. The terms and provisions of this Agreement, including, without limitation, all representations, warranties, confidentiality, indemnification and release obligations, will not merge in, but will survive, the Closing of the transaction contemplated under this Agreement or any termination of this Agreement. 16.8 Assignment. Buyer may not assign this Agreement without Seller's prior written consent. No such assignment shall release Buyer from any of its obligations under this Agreement. 16.9 Negotiation and Construction. This Agreement and each of its terms and provisions are deemed to have been explicitly negotiated between the parties, and the language in all parts of this Agreement will, in all cases, be construed according to its fair meaning and not strictly for or against either party. For purposes of calculating any time periods specified in this Agreement, the day of the triggering event shall not be counted and the final day shall end at 5:00 p.m. Port Orchard time. If the time period would expire on a Saturday, Sunday or holiday, then the time period shall be extended to 5:00 p.m. on the next day that is not a Saturday, Sunday or holiday. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 14 16.10 Counterparts. This Agreement may be executed in a number of identical counterparts. Each of the counterparts will be deemed an original for all purposes and all counterparts will collectively constitute one Agreement. Furthermore, the parties agree that transmission of this Agreement via email in a ".pdf' or other electronic format shall be deemed transmission of the original Agreement for all purposes. 16.11 Exhibits. The following exhibits are attached to and made a part of this Agreement by this reference. Exhibit A — Legal Description Exhibit B — Bargain and Sale Deed Exhibit C - Temporary Easement granted to the State of Washington Exhibit D - Drainage Easement 16.12 Expenses. Except as otherwise provided above, whether or not the transactions contemplated by this Agreement shall be consummated, all fees and expenses incurred by any party hereto in connection with this Agreement shall be borne by such party, including but not limited to consultants' and attorneys' fees. 16.13 Successors and Assigns; Third Parties. All of the rights, duties, benefits, liabilities and obligations of the parties shall inure to the benefit of, and be binding upon, their respective successors and assigns. Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties hereto and their successors or assigns, any rights or remedies under or by reasop of this Agreement. 16.14 Interpretation. The section headings of this Agreement are for convenience of reference only and shall not be deemed to modify, explain, restrict, alter or affect the meaning or interpretation of any provision hereof. Whenever the singular number is used, and when required by the context, the same includes the plural, and the masculine gender includes the feminine and neuter genders. 16.15 Confidentiality. The parties shall keep the terms of this Agreement confidential and shall not disclose the terms to any third parties except that each party may disclose the terms hereof to its stockholders, partners, members, investors, employees, advisors, consultants, accountants, lawyers and lenders who need to know the terms in the course of their work for that party. Any party to whom this Agreement is disclosed shall be directed to maintain the confidentiality hereof Nothing herein shall prevent Buyer from disclosing the existence of this Agreement in the course of its due diligence investigations. (signature page follows; remainder of page intentionally blank) REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 15 Seller: ROLAND AND ROLAND GENERAL PARTNERSHIP Roland Family Investments LLC By: Kendall H. Moore Its: Manager Date: Buyer: CITY OF PORT ORCHARD, WASHINGTON RoHmd-Pffr n—ers LLC By: Alexander W. Roland Its: Manager Date: /Z 9- 2-2 By: City of Port Orchard, a Washington municipality Its: Mayor By: _ Rob Putaan Date: I 'M Z t ZZ_ REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 16 Seller: ROLAND AND ROLAND GENERAL PARTNERSHIP )&(A d(, Ro rid Fam ]v Investments LLC Bv: Kendall H. Moore Its: Manager Date: Buyer: CITY OF PORT ORCHARD, WASHINGTON Roland Partners LLC Bv: Alexander W. Roland Its: Manager Date: By: City of Port Orchard, a Washington municipality Its: Mayor By: Rob Putaansuu Date REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 16 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Resultant Parcel 3 of Boundary Line Adjustment No. LU22-BLA-05, Kitsap County Recording No. 202212010101 (Kitsap Tax Parcel #022301-3-109-2000) THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 2, AND OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 11, ALL IN TOWNSHIP 23 NORTH, RANGE 1 EAST, W.M., BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTH QUARTER CORNER OF SECTION 11; THENCE SOUTH 02019'34" WEST ALONG THE NORTH -SOUTH CENTERLINE OF SAID SECTION 11, A DISTANCE OF 71.29 FEET, TO THE NORTHERLY RIGHT-OF-WAY LINE OF SOUTHEAST SEDGEWICK ROAD (ALSO KNOWN AS STATE ROUTE 160) AND A POINT OF CURVATURE; THENCE SOUTHWESTERLY ALONG THE ARC OF A NON -TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 622.72 FEET, THE RADIUS POINT OF WHICH BEARS SOUTH 32°05'00" EAST, THROUGH A CENTRAL ANGLE OF 10-46-19", AN ARC DISTANCE OF 117.08 FEET; THENCE CONTINUING ALONG SAID NORTHERLY RIGHT-OF-WAY LINE, SOUTH 81 °07'49" WEST, A DISTANCE OF 67.34 FEET; THENCE LEAVING SAID NORTHERLY RIGHT-OF-WAY LINE, NORTH 53°58'41" WEST, A DISTANCE OF 240.45 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 36012'36" WEST, A DISTANCE OF 185.44 FEET; THENCE SOUTH 49049'15" WEST, A DISTANCE OF 333.35 FEET TO A POINT OF CURVATURE; THENCE NORTHWESTERLY ALONG THE ARC OF A NON -TANGENT CURVE TO THE LEFT, HAVING A RADIUS OF 210.00 FEET, THE RADIUS POINT OF WHICH BEARS SOUTH 49°12'25" WEST, THROUGH A CENTRAL ANGLE OF 11-13,23", AN ARC DISTANCE OF 41.13 FEET TO A POINT OF TANGENCY; THENCE NORTH 52000'58" WEST, A DISTANCE OF 36.87 FEET; THENCE SOUTH 86025'56" WEST, A DISTANCE OF 133.49 FEET; THENCE SOUTH 30050'30" WEST, A DISTANCE OF 61.22 FEET; THENCE SOUTH 64009'40" WEST, A DISTANCE OF 41.94 FEET; THENCE SOUTH 09044'01" WEST, A DISTANCE OF 56.00 FEET; THENCE SOUTH 22045'08" EAST, A DISTANCE OF 53.95 FEET; THENCE SOUTH 36054'19" EAST, A DISTANCE OF 100.29 FEET; THENCE SOUTH 19036'30" WEST, A DISTANCE OF 42.79 FEET TO THE NORTHEASTERLY RIGHT-OF-WAY LINE OF SR 16, AS DEPICTED ON OLYMPIC DRIVE TO TREMONT STREET RIGHT OF WAY AND LIMITED ACCESS PLAN SHEET 16 OF 21 ON FILE WITH THE DIRECTOR OF TRANSPORTATION IN OLYMPIA, WASHINGTON; THENCE ALONG SAID NORTHEASTERLY RIGHT-OF-WAY THE FOLLOWING THREE COURSES; NORTH 38055'06" WEST, A DISTANCE OF 202.38 FEET; NORTH 33034'48" WEST, A DISTANCE OF 294.55 FEET; NORTH 20044'50" WEST, A DISTANCE OF 289.77 FEET TO THE WEST LINE OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION 2; THENCE LEAVING SAID NORTHEASTERLY RIGHT-OF-WAY LINE AND ALONG SAID WEST LINE, NORTH 02°31'50" EAST, A DISTANCE OF 1,301.63 FEET TO THE NORTHWEST CORNER OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION 2; THENCE ALONG THE NORTH LINE OF SAID SOUTHEAST QUARTER, SOUTH REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 17 89°02'25" EAST, A DISTANCE OF 660.74 FEET; THENCE SOUTH 02035'28" WEST, A DISTANCE OF 866.58 FEET; THENCE SOUTH 89002'28" EAST, A DISTANCE OF 171.79 FEET; THENCE SOUTH 14022'38" WEST, A DISTANCE OF 141.90 FEET; THENCE SOUTH 40009'29" EAST, A DISTANCE OF 244.77 FEET; THENCE SOUTH 04042'13" WEST, A DISTANCE OF 152.26 FEET TO THE TRUE POINT OF BEGINNING. CONTAINING 29.06 ACRES, MORE OR LESS. REAL ESTATE PURCHASE AND SALE AGREEMENT PAGE 18 * OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY COMMITMENT FOR TITLE INSURANCE Transaction Identification Data for reference only. - Issuing Office: Land Title Company of Kitsap County I E2022-421156 Property Address: Vacant Land, Port Orchard, WA 98366 EXHIBIT A APN(s) located on Assessor's Map: 022301-3-109-2000 The Land is described as follows: RESULTANT PARCEL D OF BOUNDARY LINE ADJUSTMENT RECORDED UNDER AUDITOR'S FILE NO. 200811040156, AND AS CORRECTED BY AFFIDAVIT OF MINOR CORRECTION RECORDED UNDER AUDITOR'S FILE NO. 200901090032, BEING A PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER, SECTION 2 AND OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 11, ALL IN TOWNSHIP 23 NORTH, RANGE 1 EAST, W.M., IN KITSAP COUNTY, WASHINGTON. This page is only a part of a 2016 ALTA@ Commitment for Title Insurance Issued by Old Republic National Title Insurance Company. This Commitment is not valid without the Notice; the Commitment to Issue Policy; the Commitment Conditions; Schedule A; Schedule B, Part I - Requirements; and Schedule B, Part ll - Exceptions; and a counter -signature by the Company or its issuing agent that may be in electronic form. Copyright 2006 - 2016 American Land Title Association. All rights reserved. AIM LAN.0 rIILE The use of this Form (or any derivative thereof) Is restricted to ALTA licensees and ALTA members in good standing as of ASSOC WAIN the date of use. All other uses are prohibited. Reprinted under license from the American Land Title Association. ALTA Commitment for Title Insurance (08-01-16) E2022-421156 Exhibit A