Purchase and Sale Agreement with VAI Resorts, LLC

City of Glendale — Regular Meeting (2025-05-27)

Extracted text (via pymupdf) 12454 characters

PURCHASE AND SALE AGREEMENT
FOR LONG-TERM STORAGE CREDITS

THIS PURCHASE AND SALE AGREEMENT FOR LONG-TERM STORAGE CREDITS
(this “Agreement”) is made this ___ day of

2025,
between
the
City
of
Glendale, an Arizona municipal corporation (“Seller”), and VAI Resorts, LLC, an Arizona limited
liability company (“Seller”).

RECITALS

A. Seller is the water and sewer service provider for most of the City of Glendale, and in this
capacity routinely provides water services to its customers. Seller from time-to-time stores
underground in permitted recharge facilities certain effluent (reclaimed water) resulting from the
City’s treatment of wastewater.

B. Buyer desires to purchase one effluent Long-Term Storage Credit held by Seller pursuant
to Arizona Revised Statutes Title 45, Chapter 3.1.

C. Seller is willing to sell and transfer one Long-Term Storage Credit in the amount, at the
delivery time and for the price specified in this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, and intending to be legally bound, the parties hereby agree as follows:

ARTICLE 1
DEFINITIONS

As used in this Agreement, the following terms, when capitalized, shall mean:

“ADWR” means the Arizona Department of Water Resources.

“Agreement” means this Purchase and Sale Agreement for Long-Term Storage Credits.

“Buyer” has the meaning given that term in the introductory paragraph of this Agreement.

“Buyer’s Long-Term Storage Account” means an account to be established by Buyer in
Buyer’s name pursuant to Arizona Revised Statutes § 45-852.01 for Long-Term Storage Credits
stored in the Phoenix Active Management Area.

“Long-Term Storage Credit” or “LTSC” has the meaning given that term in Arizona
Revised Statutes § 45-802.01(11).

“Seller” has the meaning given that term in the introductory paragraph of this Agreement.

“Seller’s Long-Term Storage Account” means an account established in Seller’s name
pursuant to Arizona Revised Statutes § 45-852.01 for Long-Term Storage Credits stored in the

Phoenix Active Management Area, ADWR Long Term Storage Account Number 70-
441149.0000.

“Transfer Form” means the form currently in use by ADWR to document the transfer of
LTSCs on the date that each transfer occurs pursuant to this Agreement.

ARTICLE 2
PURCHASE AND SALE
OF LONG-TERM STORAGE CREDITS

2.1 Sale and Purchase. Subject to the terms and conditions of this Agreement, Seller
agrees to sell, transfer, and assign and Buyer agrees to purchase, accept, and pay for one acre-
foot of LTSCs. Buyer agrees to purchase the one acre-foot of LTSCs by June 1, 2025.

2.2 Type of Water. Seller covenants that all the LTSCs sold pursuant to this Agreement
have been accrued through storage of water from effluent. The parties intend that all LTSCs
purchased and sold under this Agreement shall retain the identity of the source of water used to
generate such LTSCs.

2.3 Long-Term Storage Credits to be Transferred.

2.3.1 The LTSCs to be sold by Seller pursuant to this Agreement are from Seller’s
Long-Term Storage Account and shall represent credits accrued for water stored in the New
River-Agua Fria Underground Storage Project (NAUSP) located in the West Salt River Valley
Groundwater Sub-Basin of the Phoenix Active Management Area.

2.4 Purchase Price and Payment Calculation. The price per LTSC is $550.00 for a total
of Five Hundred Fifty Dollars ($550.00) (the “Purchase Price”) payable to Seller by check, wire,
or other good funds by June 1, 2025.

2.5 Seller’s Warranty of Title. Seller represents and warrants to Buyer that it will have
good and marketable title to the LTSCs that are the subject of this Agreement and agrees to
convey marketable title to such LTSCs free and clear of all liens, claims and encumbrances.

2.6 Term. The term of this Agreement shall commence on the date hereof and shall
terminate on December 31, 2025 or so long thereafter as is required for ADWR to complete the
transfer of the LTSCs from Seller to Buyer as contemplated in this Agreement.

ARTICLE 3
TRANSFER DOCUMENTATION

3.1 Transfer Form. To evidence the transfer of the Long-Term Storage Credits
contemplated by this Agreement, Buyer and Seller shall execute Transfer Form as specified in
Section 4.1.

3.2 Additional Actions and Documentation. The parties shall cooperate to take such
further actions and execute such further documents as may be determined by either party to be
reasonably necessary or advisable to complete the transfer of the LTSCs contemplated by this
Agreement.

ARTICLE 4
DELIVERY AND PAYMENT

4.1 Delivery. Within 10 business days of the date that payment for transfer of LTSCs is
received by Seller, Seller shall execute and deliver to Buyer a Transfer Form for the LTSCs
ordered at that time. Upon Buyer’s receipt of the executed Transfer Form, Buyer shall promptly
countersign the Transfer Form and file it with ADWR. Buyer shall be solely responsible for filing
the Transfer Forms with ADWR and shall pay any applicable filing and transfer fees in connection
therewith. Buyer and Seller shall cooperate with ADWR to facilitate completion of such transfer
by ADWR. For purposes of this Section 4.1, “delivery” shall mean delivery to the address and
in the manner specified in Article 6 below and “receipt” or “received” shall mean the date that the
overnight carrier delivers or attempts delivery to the address specified.

4.2 Payment. Buyer shall pay Seller the purchase price then due in accordance with
Section 2.4 in full by wire, check, or other good funds.

ARTICLE 5
REJECTION OF TRANSFER

Buyer shall be solely responsible for verifying that it is eligible to receive the LTSCs to be
purchased pursuant to this Agreement. Buyer acknowledges that it is assuming the risk that
Arizona law or ADWR’s policies regarding eligibility may change between the date of this
Agreement and the filing of the Transfer Form and Buyer assumes all risks of any such change
in law or policies. If ADWR notifies Buyer that Buyer or Buyer’s designated transferee is
ineligible to hold the LTSCs, Seller and Buyer will cooperate to adjust the designee so that the
LTSCs can be held by a new Buyer designee, but Buyer will remain responsible to pay any
ADWR fees for the transfer. Seller shall take no action to impair or impede the transfer of LTSCs
and in the event that Seller’s action or inaction, or Seller’s inability to deliver good and marketable
title to the LTSCs at the time of the transfer prevents the transfer from occurring, Seller shall be
responsible to immediately refund the purchase price to Buyer.

ARTICLE 6
NOTICES

All notices requests, consents, waivers or other communications required or permitted to
be given under this Agreement to a party must be in writing and must be personally delivered to
the intended recipient or sent to the intended recipient via a nationally recognized overnight
courier such as Federal Express or UPS, shipping charges paid by sender, addressed as follows:

If to Seller:

City of Glendale
Attn: City Attorney, City Manager
5850 W. Glendale Ave.
Glendale, AZ 85301

If to Buyer:

VAI Resorts, LLC
Attn: General Counsel
9601 W. Cardinals Way
Glendale, AZ 85305

ARTICLE 7
MISCELLANEOUS PROVISIONS

7.1
Right to Repurchase. Buyer agrees to not resell the Long Term Storage Credits
purchased under this Agreement without first offering in writing to Seller to sell the Long Term
Storage Credits back to Seller at the Purchase Price. If Seller does not repurchase the Long
Term Storage Credits within 60 days after Seller receives Buyer’s written notice of the
repurchase option, then Buyer may resell the Long Term Storage Credits to a third party.

7.2
Choice of Law; Jurisdiction; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona, without regard to conflicts of law
principles. The parties agree that any action, suit, or proceeding arising out of or relating to this
Agreement shall be initiated and prosecuted in a state or federal court of competent jurisdiction
located in Maricopa County, Arizona, and the parties irrevocably submit to the jurisdiction of any
such court.

7.3 Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any dispute arising out of or relating to
this Agreement.

7.4 Amendment. No amendment, modification or change to this Agreement shall be
enforceable unless set forth in writing and executed by both parties.

7.5 Assignability. Neither party hereto may assign its rights or obligations under this
Agreement without the written consent of the other party, which consent will not be unreasonably
withheld.

7.6 Time of the Essence. Time is of the essence in the performance of this Agreement.

7.7 Specific Performance. The parties agree that if a party fails to perform its obligations
under this Agreement, other remedies will be insufficient and the parties agree that, in addition
to other available remedies, the remedy of specific performance shall be available to the
aggrieved party.

7.8 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and it will not be necessary in making proof of this Agreement
or the terms of this Agreement to produce or account for more than one of such counterparts;
provided that the counterpart produced bares the signature of the party sought to be bound.

7.9 Entire Agreement. This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof and thereof and supersedes any and all prior

negotiations, undertakings, understandings, agreements and business term sheets between the
parties with respect to the subject matter hereof and thereof. No party will be bound by or
deemed to have made in connection herewith any representations, warranties, commitments or
undertakings, except those contained herein or therein.

7.10 Waiver. No delay in exercising any right or remedy shall constitute a waiver unless
such right or remedy is waived in writing signed by the waiving party. A waiver by any party of
any right or remedy hereunder shall not be construed as a waiver of any other right or remedy,
whether pursuant to the same or a different term, condition or covenant.

7.11 Rules, Regulations and Amendment or Successor Statutes. All references in this
Agreement to the Arizona Revised Statutes include all rules and regulations promulgated by
ADWR under such statutes and all amendment statutes and successor statutes, rules, and
regulations to such statutes, rules, and regulations.

7.12 Severability. The provisions of this Agreement shall be deemed severable, and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of the
other provisions hereof.

7.13 Attorneys' Fees. In the event it becomes necessary for either Buyer or Seller to
employ legal counsel or to bring an action at law or other proceeding to enforce any of the terms,
covenants or conditions of this Agreement, the prevailing party in any such action and
proceeding shall be entitled to recover its costs and expenses incurred in such action from the
other party, including, without limitation, reasonable attorneys' fees.

7.14 Enforcement Rights. Only Seller and Buyer may enforce this Agreement. Seller and
Buyer do not intend through this Agreement to confer enforceable rights on any non-party and
do not intend to create any third-party beneficiaries to this Agreement.

IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
as of the date first set forth above.

(Signatures on following page)

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CITY OF GLENDALE, an Arizona municipal
corporation
By: ________________________________
Kevin R. Phelps
Interim City Manager
ATTEST:
APPROVED AS TO FORM:
____________________________
Julie K. Bower
(SEAL)
City Clerk

__________________________________
Michael D. Bailey
City Attorney

VAi RESORTS, LLC, an Arizona limited liability
company
By:_ ----
lts: Pre.Sid% t-
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