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Resolution 5926 - Adopting Form of BNSF Railbanking AgreementRESOLUTION NO.5926 A RESOLUTION APPROVING THE FORM OF A RAIL -BANKING AGREEMENT BETWEEN THE CITY OF KALISPELL AND THE BURLINGTON NORTHERN SANTA FE RAILROAD AND GIVING THE CITY MANAGER THE AUTHORITY TO EXECUTE THE AGREEMENT ON BEHALF OF THE CITY WHEN NECESSARY CONTINGENCIES HAVE BEEN MET. WHEREAS, the CORE Area Redevelopment project and associated TIGER grant project that have been previously approved by the Kalispell City Council include the removal of the rail tracks and rail service accoutrements owned by Burlington Northern Santa Fe Railroad [BNSF] that traverse the City; and WHEREAS, the federal Surface Transportation Board [STB] issued a notice of interim trail use allowing BNSF and the City a period of time to negotiate for the acquisition of the railway corridor, subject to requirements of the STB; and WHEREAS, the City staff and BNSF agents and personnel have discussed the terms of the acquisition and now seek the City Council's approval of the form of the rail -banking agreement and authorization for the City Manager to execute the agreement when certain contingencies have been met; and WHEREAS, the rail -banking agreement that is proposed and attached hereto as Exhibit "A" sets out that (1) the City will acquire all of the ownership interests of BNSF in the rail corridor properties for the sum of $500,456.00 and BNSF will donate all additional value as determined by an appraisal obtained by the City and (2) the City agrees, pursuant to federal law, that the use of the property acquired will not impair the potential of any future restoration of rail service within property acquired and that the City shall be reimbursed its investment in that event, and (3) the execution date of the subject rail -banking agreement will be arranged at such time as the current rail service customers can move their operations from the current locations within the rail corridor to the Glacier Rail Park; and WHEREAS, the City Council hereby finds that the proposed rail -banking agreement attached hereto is in the best interests of the City, its residents and taxpayers. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. The City Manager is hereby authorized and directed to execute the Rail -Banking Agreement attached hereto as Exhibit "A" at such time or as soon as practical thereafter that the customers served with rail service have moved their operations from their current locations within the railway corridor to the Glacier Rail Park. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 17TH DAY OF JUNE, 2019. ATTEST: Aimlee Brunckhorst, CMC City Clerk ,I Mark Johnso Mgyor ............ v/0'/ii SEAS. � 1892 . ��NT'A�P . • BNSF RAILWAY COMPANY RAILBANKING AND SALE CONTRACT THIS RAILBANKING AND SALE CONTRACT (the "Contract") is entered into this day of , 20_ (the "Effective Date") by and between BNSF RAILWAY COMPANY, a Delaware corporation (hereafter, "BNSF"), and CITY OF KALISPELL, a municipality formed under the laws of the State of Montana (hereafter, "Buyer"). RECITALS A. Pursuant to 16 U.S.C. Section 1247(d) of the National Trails System Act, as amended, and the terms and conditions set forth herein, BNSF is willing to quitclaim to Buyer all of BNSF's right, title and interest, subject to any reservations set forth herein below, in a rail corridor situated between MP 1225.19 and MP 1226.75 at or near the City of Kalispell, Flathead County, State of Montana, as more particularly described on Exhibit A attached hereto and made a part hereof. B. Buyer is an organization entitled to receive charitable contributions under Section 170(c) of the Internal Revenue Code of 1986, as amended. Accordingly, BNSF is willing to quitclaim the Property (as defined below) to Buyer at a substantially reduced price. C. Buyer is willing to purchase the Property (as defined below) and BNSF is willing to quitclaim the Property on the terms and conditions set forth herein. AGREEMENTS NOW, THEREFORE, for and in consideration of the mutual covenants and conditions set forth herein, the parties hereby agree as follows: Section 1. Property to be Sold; Purchase Price. 1.1 Subject to and in accordance with the terms, covenants, conditions, restrictions and reservations contained in this Contract, and all existing interests, including but not limited to all reservations, rights -of -way, leases, easements and other encumbrances, of record or otherwise, BNSF agrees to quitclaim to Buyer, and Buyer agrees to accept from BNSF: 1.1.1 The real property shown on Exhibit A attached hereto and made a part hereof (the "Land"). 1.1.2 All trail -related structures (including bridges, culverts, ballast and earthwork) located on, or otherwise affixed to, the Land, together with all other objects located on or affixed to the Land as of the Closing Date (as defined below) and used in connection with the operation and maintenance of BNSF's rail corridor (collectively, all such items described in this Section 1.1.2 being referred to hereinafter as the "Personal Property"); provided that the Personal Property shall further include all rail, ties, spikes, tie plates, rail anchors, signaling and communications equipment, crossings and crossing equipment, signage, roundhouses, depots, and other support facilities, track materials and supplies, whether or not the same are deemed affixed to the Land. 1.1.3 Notwithstanding the foregoing or anything contained herein to the contrary, to the extent any Personal Property is owned by any third party (e.g., crossing equipment owned in whole or in part by a governmental authority), said interests shall not be conveyed unto Buyer. BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 1 Subject to the limitations and exclusions (if any) specifically described in Sections 1.1.1 — 1.1.3 above, all of the above described interests are collectively referred to herein as the "Property". 1.2 Subject to and in accordance with the terms, covenants, conditions, restrictions and reservations contained in this Contract, in consideration of the sale, quitclaim, assignment, transfer and delivery of BNSF's right, title and interest, if any, in and to the Property, Buyer agrees to pay to BNSF at Closing the purchase price of FIVE HUNDRED THOUSAND FOUR HUNDRED FIFTY-SIX and NO/100 Dollars ($500,456.00) ("Purchase Price") for the Property, less the Earnest Money (defined below). Buyer acknowledges that the Purchase Price to be paid by Buyer to BNSF for the Property is substantially less than the fair market value of the Property, and that BNSF is donating value (the "Discount") equivalent to the difference between the Purchase Price and the fair market value of the Property, as shown by the Appraisal (as hereinafter defined), to Buyer. The Property will be quitclaimed from BNSF to Buyer by quitclaim deed, in the form attached hereto as Exhibit B (the "Deed"), and by bill of sale in the form attached hereto as Exhibit C (the "Bill of Sale"). 1.3 The parties acknowledge that portions of the Property are or may be subject to leases (collectively, the "Leases"). Buyer accepts all of BNSF's right, title and interest in and to the Property subject to all of the terms and conditions of the Leases, and further covenants and agrees to assume all of BNSF's obligations as landlord under such Leases. Without limitation to Section 15 below, this Section 1.3 shall survive the Closing of the transaction contemplated under this Contract. Section 2. Interim Trails Use. This Contract and any conveyance pursuant to its terms shall be interpreted to conform to Section 8(d) of the National Trails System Act, 16 U.S.C. Section 1247(d), and the rules and regulations of the U.S. Surface Transportation Board ("STB") related thereto, all as may be amended from time to time. 2.1 BUYER SHALL ASSUME, INDEMNIFY, DEFEND AND HOLD HARMLESS BNSF FROM ALL FINANCIAL, MANAGERIAL AND LEGAL RESPONSIBILITY AND LIABILITY FOR THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY LIABILITIES AND RESPONSIBILITIES ASSUMED BY OR PLACED UPON BUYER PURSUANT TO AND IN ACCORDANCE WITH (1) THE NITU (AS HEREINAFTER DEFINED), (11) BUYER'S STATEMENT OF WILLINGNESS TO ASSUME FINANCIAL RESPONSIBILITY FILED BY BUYER WITH THE STB, AND (III) ANY APPLICABLE STB ORDERS RELATED TO THIS TRANSACTION OR THE PROPERTY. Buyer acknowledges that any interim trail use by Buyer or its assigns shall be subject to the possibility of future restoration of rail service pursuant to federal law and/or BNSF's retained interests. Buyer further agrees to take all steps necessary, at no expense to BNSF, to comply with any and all state and federal requirements relating to such interim trail use and/or restoration. 2.2 Buyer agrees that the use of the Property by Buyer (or its assignees) shall not impair future restoration of rail service, and BNSF reserves the right to reactivate and restore rail service on the Property pursuant to the National Trails System Act, as amended, or any equivalent or successor law. Should BNSF or any such assignee of BNSF exercise this right at any time, Buyer (or its assigns) shall allow reactivation of rail service on the terms and conditions herein. Buyer further acknowledges that the Property remains subject to the jurisdiction of the STB, whose powers include without limitation the power to reactivate rail service (including freight or passenger service), the power to impose alternative public use conditions, and the power to declare the Property abandoned. As an inducement to Buyer to enter into this Contract and in the event action by any party is taken to reactivate rail service on the Property, to impose alternative public use conditions, or to abandon the Property, Seller agrees to compensate Buyer, or assist Buyer as follows: 2.2.1 In the event the STB, or any other entity of the United States Government compels Seller, its successors or assigns, to reactivate rail service on the Property, to impose an alternative public use condition on the Property, or to abandon the Property, or in the event Seller, its successors or assigns, voluntarily takes any such actions by seeking to vacate the Notice of Interim Trail Use with respect to the Property (the "NITU"), and if the STB approves the vacation of the NITU requiring conveyance of the Property, in whole or in part, by the Buyer as Interim Trail BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 2 Manager to the Seller, then, in such event, Seller, its successors or assigns, shall pay to the Buyer a sum equivalent to the Purchase Price as adjusted by the same percentage of increase reflected in the "Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) specified for All Items - Mountain compiled by the Bureau of Labor Statistics of the United States Department of Labor" ("CPI"). The amount to be paid by Seller to the Buyer shall be calculated in accordance with the following: (Current Price Index*/Base Price Index**) X Purchase Price set forth in Section 1.2 above = Amount paid to Buyer *Effective average annual CPI for the most recent year ending prior to reactivation. **Effective average annual CPI for the year of Closing. 2.2.2 In the event the CPI is converted to a different standard reference base or otherwise revised or changed, the calculation of the adjustment shall be made with the use of such conversion factor, formula or table for converting the CPI as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as reasonably determined by Seller and the Buyer. 2.2.3 For any partial reconveyance of the Property, the amount paid by Seller to the Buyer, as calculated above, shall be pro -rated according to acreage reconveyed; provided, however, that if the partial reconveyance divides the Trail into two or more non-contiguous segments, the Buyer may elect to reconvey the entire Property for the compensation provided by this Section 2.2. 2.3 Upon BNSF's notice of intent to restore rail service ("Reactivation Notice"), Buyer shall reconvey the Property to BNSF free and clear of any encumbrances or liens not in effect prior to Closing (or shall otherwise commit to clear such encumbrances and/or liens within a reasonable period of time) at no cost to BNSF (except to the extent expressly provided otherwise herein below). Buyer shall have the right to salvage any non -rail -related facilities or improvements on the Property, provided such salvage shall be completed within one hundred eighty (180) days of the Reactivation Notice, and any materials not salvaged within said time period shall be forfeited by Buyer absent written waiver by BNSF. If BNSF, or its successor, provides the Reactivation Notice, BNSF shall not be liable for any penalties or direct, indirect, or consequential damages or costs, losses, or expenses arising out of the reactivation and restoration of rail service on the Property. 2.4 In no event shall this Contract be construed to create a joint enterprise for the use or operation of the Property. 2.5 Without limitation to Section 15 below, the provisions of this Section 2 shall run with the land, be included in the Deed and shall be binding upon the successors and assigns of Buyer and inure to the benefit of BNSF and its successors and assigns. Section 3. Inspections. 3.1 Buyer acknowledges that the ultimate use of the Property shall be for public recreation and open space conservation. Buyer further acknowledges that: a) the historical use of the Property was for railroad and industrial operations and that the Property is being conveyed "As -Is With All Faults" as industrial use Property; b) non -industrial use of the Property may require the implementation of remedial or corrective actions to ensure the protection of human health or the environment; and c) Buyer plans to develop the Property for use as a recreational trail (the "Intended Use"). Buyer further acknowledges that Buyer is in the process of obtaining an environmental assessment on the Property at its expense to ensure that its Intended Use poses no threat to human health or the environment. The assessment is being, or will be, conducted through a separate Right of Entry Agreement entered into by the Buyer's contractor with the Seller pursuant to the requirements of Section 3.6 below. Buyer shall perform any and all assessment, BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 3 remediation, and/or monitoring on the Premises necessary for Buyer's Intended Use of the Property. Buyer shall coordinate its environmental investigation of the Premises with Seller's environmental representative, Doug F. McReynolds, PMP, Director Environmental Project Controls & Real Estate, BNSF Railway Company, 2500 Lou Menk Dr., AOB-3, Fort Worth, Texas 76131, tel. 817-352-3613, email Doug. Mcreynolds(a-)BNSF.com. Buyer agrees that it shall complete all environmental assessments within 160 days of the execution of this Contract. 3.2 Buyer acknowledges that Seller makes no guarantee, representation or warranty regarding the physical or environmental condition of the Property, and Seller expressly disclaims any and all obligations and liabilities to Buyer regarding any defects which may exist with respect to the condition of the Property. 3.3 Buyer shall be responsible for the remediation of the physical and environmental condition of the Property to a standard suitable for trail use as indicated by the environmental site assessment. Subject to all applicable laws, Buyer covenants not to sue Seller, and releases all rights or claims against Seller, arising from or relating to any physical or environmental condition or for any costs of investigation or remediation or cure of any physical or environmental condition of the Premises. 3.4 Subject to all applicable laws, Buyer shall indemnify, defend and hold harmless Seller, its present and future officers, directors, employees and successors, from and against any and all liabilities, penalties, fines, forfeitures, demands, claims, causes of action, suits, and costs and expenses incidental thereto (including cost of defense, settlement and reasonable attorneys' fees) which any or all of them may hereafter suffer, incur, be responsible for or pay out as a result of injury to any person or damage to any property (public or private), contamination of or adverse effects on the environment, or any violation or alleged violation of the deed restrictions or restrictive covenants provided for in statutes, ordinances, orders, rules or regulations of any governmental entity, department or agency, caused by or arising out of environmental conditions resulting from (i) tests and studies of the Property that aggravate or contribute to any environmental condition already in existence at the Effective Date, (ii) activities related to or in connection with Buyer's Intended Use, including without limitation Buyer's development and operation of the Trail on the Property or (iii) any failure by the Buyer to observe and adhere to all terms, conditions, and covenants of this Contract. 3.5 Seller acknowledges that City of Kalispell, being a political subdivision of the State of Montana, is governed by the provisions of the Montana Code Annotated Section Title 2, Chapter 9, Part I, for causes sounding in tort. 3.6 Buyer, or its designated representatives, shall have reasonable access to the Property and may conduct, at Buyer's sole cost and expense, such surveys, studies, tests, or inspections as it deems appropriate in accordance with the terms and provisions of the Right of Entry Agreement; provided, however, prior to the conduct of any intrusive "Phase II Level" environmental or other intrusive testing or any borings or sampling of any material or media, including soil, surface water, or ground water, Buyer agrees to enter into BNSF's standard agreement(s) for such testing, borings or sampling, which agreement(s) shall detail, without limitation, the specific scope of testing, borings, sampling or other work to be performed and the consultant or persons that will be performing such testing, borings, sampling or other work. Buyer shall promptly provide copies of all such reports to BNSF. 3.7 Prior to conducting any such surveys, studies, tests, or inspections on the Property, Buyer shall require all contractors doing any test or inspection of the Property to provide BNSF with a certificate of insurance evidencing Commercial General Liability insurance coverage of at least $1,000,000 with BNSF named as an additional insured and showing worker's compensation coverage with a waiver of subrogation rights against BNSF. 3.8 Buyer shall conduct all surveys, studies, tests, and inspections of the Property in a manner that will not interfere with the operations of BNSF thereon and will not harm or damage the Property or cause any claim adverse to BNSF, and immediately following such surveys, studies, tests, and inspections Buyer BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 4 shall restore the Property to the condition existing immediately prior to such activities. Buyer shall give BNSF reasonable prior notice of any such surveys, studies, tests, or inspections and BNSF shall have the right to be present during any such surveys, studies, tests, or inspections. Buyer shall not disclose the results of any such surveys, studies, tests, or inspections to any third parties except as required by applicable law or with written consent of BNSF. 3.9 If, prior to Closing, BNSF determines, in its sole and absolute discretion, to reactivate and restore rail service on the Property, BNSF may terminate this Contract upon written notice to Buyer (subject to survival of all rights, obligations, liabilities, and indemnities which arose or accrued prior to the termination). 3.10 If environmental contamination of the Property is revealed by the studies and tests conducted by Buyer pursuant to this Section, in an amount and/or concentration beyond the minimum acceptable levels for commercial or industrial property established by current applicable governmental authorities, or, if Buyer is unwilling to accept the environmental condition of the Property as a result of such tests or assessments, the sole and exclusive remedy of Buyer or Seller shall be to terminate this Contract. Under no circumstances shall Seller be required to correct, remedy or cure any condition or environmental contamination of the Property, which Buyer's tests and studies may reveal, as a condition to Closing or other performance hereunder. 3.11 In addition to and not in limitation of each party's right to terminate this Contract in accordance with Section 3.10 above, Buyer shall have thirty (30) days from the Effective Date to terminate this Contract on written notice to BNSF for any or for no reason, including without limitation the environmental condition of the Property. If Buyer does so terminate this Contract, the Earnest Money shall be refunded to Buyer and neither party shall have any further obligations hereunder except those that expressly survive termination. If this Contract is not so terminated, the parties shall proceed to Closing according to the remaining provisions of this Contract. Section 4. Conditions to Closing. The following shall be conditions to BNSF's obligation to consummate the transaction. If any of these conditions are not satisfied by the applicable date indicated below (or if no date is indicated below then by the date that is forty-five (45) days after the Effective Date), BNSF may in its sole discretion elect to extend such date or terminate this Contract by written notice to Buyer. If BNSF elects to proceed to Closing, the following terms and conditions, to the extent they remain unfulfilled, shall survive Closing. 4.1 The STB shall have issued a Notice of Interim Trail Use ("NITU") in STB Docket No. AB-6- 495X, BNSF Railway Company — Abandonment Exemption in Flathead County, Montana, in accordance with 16 U.S.C. Section 1247(d), the STB's rules and regulations pertaining to interim trails use, and other applicable authorities, and the NITU shall remain in effect on the Closing Date. The terms hereof shall be governed by and construed in accordance with the issuance of the NITU in the referenced STB docket as requested by Buyer and acceded to by BNSF. Prior to Closing, contingent upon authority of the STB, BNSF will have discontinued service on the Property and canceled applicable common carrier rates and service. In lieu of notice of consummation of abandonment, if required by STB's rules and regulations, BNSF and Buyer jointly shall provide notice to STB of consummation and implementation of this Contract. 4.2 Buyer shall execute and deliver to BNSF (i) the Donee Acknowledgment Section of the Internal Revenue Service Form 8283, attached as Exhibit E to this Contract and (ii) a Charitable Contribution Receipt, attached as Exhibit F to this Contract. Additionally, Buyer shall provide a copy of Buyer's letter from the Internal Revenue Service stating that Buyer is a tax exempt entity that is qualified to receive tax deductible donations. Buyer shall further take all actions and execute and deliver such other documents that are necessary or advisable to allow BNSF to take a tax deduction with regard to the donation of the Discount described in this Contract. 4.3 If the approval of any federal, state or local governmental agency is required for the sale of the Property, it is understood and agreed that the consummation of this Contract is conditioned upon BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 5 obtaining such approval and that both parties shall use their best efforts to obtain such approval. If any governmental agency shall impose additional material terms or conditions upon the conveyance contemplated herein or revoke the authority to enter into such agreement, either party may terminate this Contract upon written notice to the other party without liability to the other party, regardless of whether the transaction has closed. In such event, Buyer shall not be entitled to any reimbursement for payment of any fees or costs of the transaction. 4.4 After the Effective Date, Buyer shall, at Buyer's sole cost and expense, cause to be prepared a survey of the Property certified to BNSF, Buyer and such other parties as Buyer may choose showing the boundaries of the Property and any improvements located thereon (the "Survey"). Said Survey shall be delivered to BNSF no later than twenty (20) days prior to the Closing Date. BNSF shall have the right to review and require necessary changes to the Survey to more accurately describe the Property and any Easements located thereon. If BNSF does not agree that the description of the Property contained on the Survey is the Property BNSF wishes to sell or otherwise objects to the Survey then BNSF may terminate this Contract by written notice to Buyer in which case the Earnest Money shall be refunded to Buyer and neither party shall have any further obligation hereunder except those that expressly survive termination. If BNSF agrees in writing that the Survey description is accurate then the description thereon shall be the definition of the Property for all purposes under this Contract. In the event a city, county, or other governing authority where the Property is located (a "Municipality") requires a survey or plat to convey the Property (a "Plat"), the Buyer shall obtain, at Buyer's sole cost and expense, such Plat and the approval of such Municipality. BNSF's obligations hereunder are conditioned upon BNSF's approval of the Plat approved by the Municipality. Buyer shall provide the proposed Plat to BNSF prior to submission to the Municipality. 4.5 Buyer shall pay the Purchase Price, less the Earnest Money, to BNSF in cash, by certified check made payable to the Bank of New York Mellon or by wire transfer to BNSF's account, as designated by BNSF. 4.6 Buyer shall have filed a Statement of Willingness to Assume Financial Responsibility with the STB. 4.7 Buyer shall have performed each of Buyer's obligations under this Contract. 4.8 Buyer, at Buyer's sole cost and expense, shall provide to BNSF an MAI appraisal report from an appraiser approved by BNSF in its reasonable discretion ("Appraisal") that provides a fair market value estimate of the Property, such Appraisal to be performed within sixty (60) days prior to the Closing Date. Buyer shall promptly provide, or cause to be provided, a copy of the Appraisal to BNSF. Section 5. Closing. 5.1 Upon satisfaction of the conditions to Closing set forth in Section 4 above, the consummation of the sale by delivery of the Closing Documents (the "Closing") shall occur as follows: 5.1.1 BNSF will forward to Buyer (i) a sufficient number of unexecuted originals of the Deed to enable Buyer to file an original in each county in which the Property is located, (ii) two unexecuted originals of the Bill of Sale transferring the Personal Property, and (iii) if there are any Leases affecting the Property that will be assigned to Buyer, two unexecuted originals of an Assignment and Assumption of the Leases, in form and substance acceptable to BNSF (the "Lease Assignment"). The Deed, Bill of Sale and Lease Assignment, as applicable, may be collectively referred to in this Section 5 as the "Closing Documents". Buyer shall fully execute each of the originals of the Closing Documents, and shall return to BNSF via overnight mail. Upon BNSF's receipt of all originals of the Closing Documents executed by Buyer, BNSF shall execute all originals of the Closing Documents. The Closing shall occur via mail or overnight delivery, and BNSF shall deliver to Buyer the appropriate number of fully -executed original counterparts of the Closing BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 6 Documents. The date of Closing (the "Closing Date") shall be deemed to be the date BNSF executes the Closing Documents. 5.1.2 Following the Closing, Buyer, at its expense, shall record a fully -executed original of the Deed in the public records of each county in which the Property is located; provided further that Buyer will promptly forward a copy of such recorded Deed(s) to BNSF with proof of recording. In addition to and not in limitation of the foregoing, Buyer, at its expense, shall (i) execute and deliver to BNSF such documents, instruments, certificates, assignments and other writings to evidence the quitclaim of the Property from BNSF to Buyer as BNSF or its successors and assigns may reasonably require from time to time; and (ii) do and execute such further lawful and reasonable acts, conveyances, and assurances for the better and more effective carrying out of the intents and purposes of this Contract, as BNSF or its successors or assigns may reasonably request from time to time. 5.2 In addition to payment of the Purchase Price, Buyer shall pay all costs of Closing (except BNSF's costs of preparation of documents to be delivered at Closing). This includes, but is not limited to any transaction fees, transfer taxes, escrow and service fees, wire service fees, recording fees and sales taxes associated with this Contract or any of the conveyances and assignments governed by this Contract. Section 6. No Pro -rations. The parties acknowledge that, except as otherwise stated in this Contract, no pro -rations of revenues, costs or expenses will be made at Closing. 6.1 All outstanding tax liabilities and assessments due and payable prior to the Closing shall be paid by BNSF and any such tax liabilities and assessments due and payable after the Closing shall be paid by Buyer. No pro -rations will be made. Buyer acknowledges that the Property is not separately assessed. The parties shall cooperate, at no cost to BNSF, to cause the Property to be separately assessed as soon as possible after Closing and until such time the parties will equitably apportion the taxes attributable to the Property. 6.2 All rents under the Leases collected by BNSF prior to Closing, regardless of whether any portion of such rents is prepaid but unearned at the date of Closing, shall be and remain the property of BNSF, and Buyer shall not have any rights in or to such rents. All rents collected by Buyer after Closing shall be and remain the property of Buyer, and BNSF shall not have any rights in or to such rents. 6.3 Buyer agrees to purchase, affix and cancel any and all documentary stamps in the amount prescribed by statute, and to pay any and all required transfer taxes, excise taxes and any and all fees incidental to recordation of the Deed and Bill of Sale. BUYER SHALL BE LIABLE AND SHALL INDEMNIFY BNSF FOR ALL COSTS, EXPENSES AND JUDGMENTS TO OR AGAINST BNSF, INCLUDING ALL OF BNSF'S LEGAL FEES AND EXPENSES, ARISING OUT OF BUYER'S FAILURE TO COMPLY WITH THE REQUIREMENTS OF THIS SECTION AND THE SAME SHALL CONSTITUTE A LIEN AGAINST THE PROPERTY UNTIL PAID BY BUYER. 6.4 Any judgment against BNSF which may appear of record as a lien against the Property shall be settled and satisfied by BNSF if and when it is judicially determined to be valid, and BNSF shall indemnify the Buyerfor all loss arising out of BNSF's failure to have ajudgment lien so settled and satisfied. 6.5 Without limitation to Section 15 below, the provisions of this Section 6 shall survive the Closing and shall not merge into the Deed or Bill of Sale. Section 7. Nature of Sale. 7.1 Subject to the provisions of Section 3 above, Buyer has or will be allowed to make an inspection of the Property. Buyer also represents and warrants that Buyer has knowledge as to the past use of the Property. Based upon this inspection and knowledge, and as a material consideration for BNSF's BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 7 willingness to enter into this transaction, Buyer is aware of the condition of the Property and BUYER SPECIFICALLY ACKNOWLEDGES THAT THE PROPERTY IS BEING QUITCLAIMED ON AN "AS -IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM BNSF AS TO ANY MATTERS CONCERNING THE PROPERTY, including, without limitation, the physical condition of the Property; zoning status; tax consequences of this transaction; utilities; operating history or projections or valuation; compliance by the Property with Environmental Laws (defined below) or other laws, statutes, ordinances, decrees, regulations and other requirements applicable to the Property; the presence of any Hazardous Substances (defined below), wetlands, asbestos, lead, lead -based paint or other lead containing structures, urea formaldehyde, or other environmentally sensitive building materials in, on, under, or in proximity to the Property; the condition or existence of any of the above ground or underground structures or improvements, including tanks and transformers in, on or under the Property; the condition of title to the Property; and any leases, easements, reservations, permits, orders, licenses, or other rights or agreements, affecting the Property. BNSF EXPRESSLY DISCLAIMS ANY WARRANTIES FOR THE PROPERTY OR APPURTENANCES THERETO, INCLUDING, WITHOUT LIMITATION, WARRANTIES AS TO TITLE, MERCHANTABILITY, HABITABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR CONFORMITY OF THE PROPERTY TO ITS INTENDED USE. 7.2 Buyer further acknowledges that a material consideration for this conveyance, without which it would not be made, is the agreement by Buyer, for itself and its successors and assigns, that BNSF, its predecessors, successors, and assigns shall be in no manner responsible to Buyer, any subsequent owner, purchaser, or any person for any claims, demands, damages, causes of action, including loss of access, or suits regarding the quiet and peaceable possession of the Property, title thereto, or the condition thereof. Buyer acknowledges and affirms that BNSF may not hold fee simple title or any other particular interest in the Property, and that BNSF's interest in the Property, if any, may rise only to the level of an easement for railroad purposes. BUYER IS WILLING TO ACCEPT BNSF'S TITLE TO THE PROPERTY, IF ANY, ON THIS BASIS AND EXPRESSLY RELEASES BNSF, ITS SUCCESSORS AND ASSIGNS FROM ANY CLAIMS THAT BUYER OR ITS SUCCESSORS MAY HAVE AS A RESULT OF THE CONVEYANCE TO BE MADE AT CLOSING. IN LIGHT OF BNSF'S DISCLOSURE THAT IT MAY NOT HOLD FEE SIMPLE TITLE OR ANY OTHER INTEREST IN THE PROPERTY, BUYER SHALL INDEMNIFY, DEFEND AND HOLD BNSF HARMLESS FROM ANY SUIT OR CLAIM FOR DAMAGES, PUNITIVE OR OTHERWISE, EXPENSES, ATTORNEYS' FEES, OR CIVIL PENALTIES THAT MAY BE IMPOSED ON BNSF AS THE RESULT OF ANY PERSON OR ENTITY CLAIMING AN INTEREST IN THE PROPERTY OR CLAIMING THAT BNSF DID NOT HAVE THE RIGHT TO TRANSFER THE PROPERTY TO BUYER. 7.3 Buyer acknowledges that, according to BNSF's records, BNSF's interest in the Property may be subject to reversion upon abandonment of use for railroad purposes or cessation of interim trail use, and that the Deed releases and quitclaims only BNSF's interest, if any, that BNSF may have in the Property. 7.4 Without limitation to Section 15 below, the provisions of Sections 7.1, 7.2 and 7.3 above shall run with the land, be included in the Deed and shall be binding upon the successors and assigns of Buyer and inure to the benefit of BNSF and its successors and assigns. 7.5 In addition to and not in limitation of the provisions of Section 7.1 above, as a material consideration of BNSF's willingness to enter into this transaction, Buyer acknowledges and agrees that BNSF has made no representations or warranties respecting the nature or condition of the Personal Property. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE PERSONAL PROPERTY, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE PERSONAL PROPERTY, THE CONFORMITY OF THE PERSONAL PROPERTY TO ITS INTENDED USES OR THE QUALITY OF THE TITLE TO THE BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 8 PERSONAL PROPERTY. BNSF SHALL NOT BE LIABLE TO BUYER FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE PERSONAL PROPERTY OR THE CONFORMITY OF THE PERSONAL PROPERTY TO ITS INTENDED USES. BUYER ACCEPTS THE PERSONAL PROPERTY IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION, AND SUBJECT TO ALL LIMITATIONS ON BNSF'S RIGHTS, INTEREST, AND TITLE TO THE PROPERTY COMPRISING THE PERSONAL PROPERTY. The provisions of this Section 7.5 shall be included in the Bill of Sale and shall be binding upon the successors and assigns of Buyer and inure to the benefit of BNSF and its successors and assigns. Section 8. Environmental. 8.1 Buyer acknowledges and represents to BNSF that Buyer is aware of the risk that Hazardous Substances may be present on, under, in or about the Property and that Buyer has conducted, or will conduct prior to Closing, such investigations of the Property, including but not limited to, the physical and environmental conditions thereof, as Buyer deems necessary to satisfy itself as to the condition of the Property and will rely solely upon same and not upon any information provided by or on behalf of BNSF or its agents or employees with respect thereto. BUYER ASSUMES THE RISK THAT ADVERSE MATTERS MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER SHALL INDEMNIFY, HOLD HARMLESS AND HEREBY WAIVES, RELEASES AND DISCHARGES FOREVER BNSF (AND BNSF'S AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, LICENSEES AND INVITEES) FROM ANY AND ALL PRESENT OR FUTURE, KNOWN OR UNKNOWN, CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING, BUT NOT LIMITED TO, THOSE IN CONTRACT, TORT AND STRICT LIABILITY), DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL AND PUNITIVE), LOSSES (HEREIN DEFINED), INJURIES, LIABILITIES, COSTS (INCLUDING, BUT NOT LIMITED TO, FINES, PENALTIES, COURT COSTS AND ATTORNEYS' FEES) ARISING FROM OR IN ANY WAY RELATED TO (1) ANY LATENT OR PATENT CONDITIONS OF THE PROPERTY, (11) ANY BODILY INJURY OR DEATH OR LOSS OR DAMAGE TO THE PROPERTY OF ANY PERSON OR PERSONS WHOMEVER, INCLUDING THE PARTIES HERETO, IN ANY MANNER ARISING FROM OR GROWING OUT OF THE ACTS OR OMISSIONS, NEGLIGENT OR OTHERWISE, OF BUYER OR ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, LICENSEES AND INVITEES IN CONNECTION WITH THE ENTRY UPON, OCCUPATION OR USE OF THE PROPERTY, AND/OR (III) ANY ALLEGED OR ACTUAL PRESENCE, USE, STORAGE, GENERATION, MANUFACTURE, TRANSPORT, RELEASE, LEAK, SPILL, DISPOSAL OR OTHER HANDLING OF ANY HAZARDOUS SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY. As used in this Section, the term "Losses" shall include without limitation (a) the cost of any investigation, removal, remedial or other response action that is required by any Environmental Law, that is required by judicial order or by order of or agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause BNSF's remaining property or the operations or business of BNSF on its remaining property to be in compliance with the requirements of any Environmental Law, and (c) costs imposed under any Environmental Law enacted after Closing. As used in this Contract, the term "Environmental Law" means 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, occupational safety, natural resources, plant or animal life or the environment, including without limitation, principles of common law and equity, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law. As used in this Contract, the term "Hazardous Substance" means any hazardous, toxic, radioactive or infectious substance, material, contaminant or waste as defined, listed or regulated under any Environmental Law, and includes without limitation, petroleum, oil and any of its fractions. The rights of BNSF under this Section 8.1 shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this Contract or otherwise. This indemnity specifically includes the obligation of Buyer to remove, close, remediate, reimburse or take other actions requested or required by any governmental agency concerning any Hazardous Substances or contaminants on the Property. BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 9 8.2 Without limitation to Section 15 below, the provisions of Section 8.1 shall run with the land, be included in the Deed and shall be binding upon the successors and assigns of Buyer and inure to the benefit of BNSF and its successors and assigns. Section 9. Indemnifications. 9.1 TO THE FULLEST EXTENT PERMITTED BY LAW, BUYER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS BNSF AND BNSF'S AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE "INDEMNITEES") FOR, FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, LIENS, FINES, PENALTIES, COSTS, CAUSES OF ACTION, SUITS, JUDGMENTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, CLAIMS AND LIABILITIES RELATING TO PERSONAL INJURY, BODILY INJURY OR PROPERTY DAMAGE) (COLLECTIVELY, THE "CLAIMS") OF ANY PERSON OR ENTITY WHOMSOEVER, DIRECTLY OR INDIRECTLY ARISING OUT OF, RESULTING FROM OR RELATED TO (IN WHOLE OR IN PART) (1) ANY ACTION OF ANY PERSON OR FIRM ENTERING THE PROPERTY ON BUYER'S BEHALF TO PERFORM THE INSPECTION CONTEMPLATED UNDER SECTION 3 OR OTHERWISE; (11) BUYER'S OWNERSHIP OR USE OF THE PROPERTY; (III) ANY BREACH BY BUYER OF ANY OF ITS REPRESENTATIONS OR WARRANTIES SET FORTH HEREIN, OR ANY FAILURE BY BUYER TO PERFORM ANY OF ITS OBLIGATIONS UNDER THIS CONTRACT; (IV) ANY CLAIMS OF THIRD PARTIES CAUSED BY BUYER'S NONPERFORMANCE OR PERFORMANCE AFTER CLOSING UNDER ANY CONTRACT, LEASE, PERMIT, LICENSE, EASEMENT OR COMMITMENT RELATING TO THE PROPERTY; (V) BNSF'S ABANDONMENT OR DISCONTINUANCE OF ANY LINE OF RAIL RUNNING OVER OR ADJACENT TO THE PROPERTY OR (VI) ANY ACT OR OMISSION, INCLUDING NEGLIGENCE, OF BUYER, ITS EMPLOYEES, INDEPENDENT CONTRACTORS, SUBCONTRACTORS, LESSEES, LICENSEES, PERMITTEES, INVITEES, OR ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY OR UNDER THE CONTROL OF ANY OF THEM, EVEN IF SUCH CLAIMS ARISE IN WHOLE OR IN PART FROM ANY NEGLIGENCE OF ANY INDEMNITEE. THE ONLY CLAIMS WITH RESPECT TO WHICH BUYER'S OBLIGATION TO INDEMNIFY THE INDEMNITEES DOES NOT APPLY ARE CLAIMS TO THE EXTENT FINALLY ADJUDICATED TO HAVE BEEN PROXIMATELY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE. 9.2 BUYER SHALL PROMPTLY ADVISE BNSF IN WRITING OF ANY ACTION, ADMINISTRATIVE OR LEGAL PROCEEDING OR INVESTIGATION AS TO WHICH THIS INDEMNIFICATION MAY APPLY, AND BUYER, AT BUYER'S EXPENSE, SHALL ASSUME ON BEHALF OF BNSF (AND THE OTHER INDEMNITEES), AND CONDUCT WITH DUE DILIGENCE AND IN GOOD FAITH THE DEFENSE THEREOF WITH COUNSEL SELECTED BY BUYER WHO IS REASONABLY SATISFACTORY TO BNSF; PROVIDED, HOWEVER, THAT BNSF SHALL HAVE THE RIGHT, AT ITS OPTION, TO BE REPRESENTED THEREIN BY ADVISORY COUNSEL OF ITS OWN SELECTION AND AT ITS OWN EXPENSE. IN THE EVENT OF FAILURE BY BUYER TO FULLY PERFORM IN ACCORDANCE WITH THIS INDEMNIFICATION, BNSF, AT ITS OPTION, AND WITHOUT RELIEVING BUYER OF ITS OBLIGATIONS HEREUNDER, MAY SO PERFORM, BUT ALL COSTS AND EXPENSES SO INCURRED BY BNSF IN THAT EVENT SHALL BE REIMBURSED BY BUYER TO BNSF, TOGETHER WITH INTEREST ON THE SAME FROM THE DATE ANY SUCH EXPENSE WAS PAID BY BNSF UNTIL REIMBURSED BY BUYER, AT THE RATE OF INTEREST PROVIDED TO BE PAID ON JUDGMENTS BY THE LAW OF THE JURISDICTION TO WHICH INTERPRETATION OF THIS CONTRACT IS SUBJECT. THIS INDEMNIFICATION SHALL NOT BE LIMITED TO DAMAGES, COMPENSATION OR BENEFITS PAYABLE UNDER INSURANCE POLICIES, WORKERS' COMPENSATION ACTS, DISABILITY BENEFIT ACTS, OR OTHER EMPLOYEES' BENEFIT ACTS. 9.3 TO THE FULLEST EXTENT PERMITTED BY LAW, BUYER FURTHER AGREES, REGARDLESS OF ANY NEGLIGENCE OR ALLEGED NEGLIGENCE OF ANY INDEMNITEE, TO INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST AND SHALL ASSUME THE DEFENSE OF ANY LIABILITIES ASSERTED AGAINST OR SUFFERED BY ANY INDEMNITEE UNDER OR RELATED TO THE FEDERAL EMPLOYERS' LIABILITY ACT ("FELA") WHENEVER EMPLOYEES BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 10 OF BUYER OR ANY OF ITS AGENTS, INVITEES, CONTRACTORS OR SUBCONTRACTORS CLAIM OR ALLEGE THAT THEY ARE EMPLOYEES OF ANY INDEMNITEE OR OTHERWISE. THIS INDEMNITY SHALL ALSO EXTEND, ON THE SAME BASIS, TO FELA CLAIMS BASED ON ACTUAL OR ALLEGED VIOLATIONS OF ANY FEDERAL, STATE OR LOCAL LAWS OR REGULATIONS, INCLUDING BUT NOT LIMITED TO THE SAFETY APPLIANCE ACT, THE LOCOMOTIVE INSPECTION ACT, THE OCCUPATIONAL SAFETY AND HEALTH ACT, THE RESOURCE CONSERVATION AND RECOVERY ACT, AND ANY SIMILAR STATE OR FEDERAL STATUTE. Section 10. Reservations. Without limitation to Section 15 below, the obligations in this Section 10 shall be binding upon Buyer and its heirs, successors and assigns, shall be included in the Deed, and shall be covenants running with the land benefiting BNSF and BNSF's successors and assigns. 10.1 Buyer's interest shall be subject to a reservation to BNSF of all coal, oil, gas, casing -head gas, and all ores and minerals of every kind and nature including sand and gravel underlying the surface of the Property, together with the full right, privilege, and license at any and all times to explore, or drill for and to protect, conserve, mine, take, remove, and market any and all such products in any manner which will not damage structures on the surface of the Property, together with the right of access at all times to exercise said rights; provided, however, BNSF's exercise of this reservation shall not permanently damage improvements placed on the Property by Buyer or its successors and shall not unduly burden the use of the Property as a recreational trail. In no event will BNSF have the right to conduct strip mining activities on the Property. Section 11. Default/Remedies. If either party breaches any of its obligations hereunder or under the Right of Entry Agreement and such breach is not cured within five (5) business days after written notice thereof from the non -breaching party, the non -breaching party may, at its election and without prejudice, terminate this Contract. If such breach and resulting termination occurs prior to Closing, the non -breaching party shall be entitled to stipulated damages in the amount of $5,000.00 from the breaching party, and the parties shall have no further obligation hereunder except for those that expressly survive termination. The parties acknowledge and agree that actual damages are difficult to ascertain and that such sum represents a reasonable estimate of a party's actual damages in the event of such breach. Nothing contained in the foregoing shall be deemed to limit any liability, obligation or remedy related to (i) Buyer's indemnification obligations set forth herein or in the Right of Entry Agreement or (ii) any breach of this Contract occurring after Closing. Section 12. Liens of BNSF's Mortgages. BNSF shall use commercially reasonable efforts to deliver to Buyer, who shall place of record, good and sufficient releases of the liens of BNSF's mortgages, where required under the terms of any mortgage on the Property that secures debt for which BNSF is liable, within a reasonable period of time after Closing. If BNSF shall be unable to obtain said releases for any reason within two (2) years from the date of Closing, BNSF shall have the right to terminate this Contract upon serving written notice of termination upon Buyer within thirty (30) days thereafter, and both parties shall thereupon be released and discharged from all liabilities and obligations hereunder, except liabilities and indemnity for loss and damage which arose or accrued prior to the termination. In such event, in exchange for a refund of the Purchase Price, Buyer shall reconvey title to the Property to BNSF free and clear of defects or objections to the same extent as if no conveyance had been made to Buyer hereunder. Buyer expressly acknowledges and agrees that BNSF's termination of this Contract pursuant to BNSF's failure to obtain and deliver good and sufficient releases of the liens of BNSF's mortgages, and the subsequent reconveyance of the Property and BNSF's repayment of the Purchase Price for same under this Section 12 shall not in any event obligate BNSF to repurchase the Property back at fair market value as would be the case if BNSF gave the Reactivation Notice that it intended to reactivate and restore rail service on the Property pursuant the National Trails System Act, as amended, or any equivalent or successor law. Section 13. Authority. Buyer warrants and affirms that it has the necessary authority to enter into this Contract and that all of the obligations hereunder are enforceable and legally binding on Buyer and its successors. Buyer represents and warrants to BNSF that it is a municipality formed under the laws of the State of Montana, validly existing and in good standing under applicable law. The person executing this BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 11 Contract on behalf of the Buyer warrants and affirms that he or she is fully authorized to do so for and on behalf of Buyer. Section 14. Notices. 14.1 All notices and other communications under this Contract shall be in writing and deemed properly served if delivered by hand to the party addressed or, if mailed, when received by the United States Postal Service in registered or certified mail, postage prepaid, return receipt required, or, if sent by a national overnight service, when received by the carrier service in a prepaid mailer, addressed as follows: BNSF: BNSF Railway Company 2301 Lou Menk Drive, GOB 3-W Fort Worth, TX 76131-2830 Attn: General Director— Land Revenue Management With copy to: Jones Lang LaSalle Brokerage, Inc. 4200 Buckingham Road, Suite 110 Fort Worth, TX 76155 Attn: Director Portfolio Management Buyer: City of Kalispell 201 First Ave E Kalispell, MT 59901 Attn: City Manager 14.2 Either party hereto may change the address or addressee to which notices are to be given by providing written notice of the change to the other party without need of amendment to this Contract. Section 15. Survival of Rights and Obligations; Term. This Contract and the rights and obligations hereunder shall survive Closing, shall not be merged into the Deed or the Bill of Sale and shall be continuing in nature. Unless earlier terminated pursuant to the terms of this Contract, this Contract shall survive Closing and shall continue in force and effect during the pendency of interim trail use. Buyer's indemnification obligations set forth in this Contract shall survive termination of this Contract. Section 16. Real Estate Commissions. If any real estate broker or agent can establish a valid claim for commission or other compensation as a result of Buyer having used their services in connection with the grant of the Property, all such commission or other compensation shall be borne by Buyer. BNSF shall not be liable for any real estate commissions or finder's fees to any party with respect to the sale of the Property, except amounts due to Jones Lang LaSalle Brokerage, Inc. ("Broker") pursuant to a separate agreement. Buyer acknowledges that Broker has advised, and hereby advises, Buyer that Broker is acting as such on behalf of BNSF, with the duty to represent BNSF's interest, and Broker is not the agent of Buyer. If a policy of title insurance is to be obtained, Buyer should obtain a commitment for title insurance which should be examined prior to closing by an attorney of Buyer's choice. Prior to the execution of this Contract, Broker has advised and hereby advises the principals of this transaction, that this Contract is binding on them, and the principals hereby acknowledge that they have been so advised. Broker has no authority to execute any document on behalf of BNSF, make representations on behalf of BNSF or bind BNSF in any manner. Section 17. Successors and Assigns. Wherever referred to herein, the term Buyer shall imply, mean and apply to Buyer, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. Wherever referred to herein, the term BNSF shall imply, mean and apply to BNSF, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder. Section 18. Tax Deferred Exchange; Earnest Money. BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 12 18.1 BNSF may assign its rights (but not its obligations) under this Contract to Goldfinch Exchange Company LLC ("Goldfinch"), an exchange intermediary, in orderfor BNSF to effect an exchange under Section 1031 of the Internal Revenue Code. In such event, BNSF shall provide Buyer with a Notice of Assignment, in the form attached hereto as Exhibit D, and Buyer shall execute an acknowledgement of receipt of such notice. Buyer may also assign its rights (but not its obligations) under this Contract to an exchange intermediary in order for Buyer to effect an exchange under Section 1031 of the Internal Revenue Code. 18.2 Upon submission by Buyer to BNSF of this Contract signed by Buyer, Buyer shall deposit $11,770.00 ("Earnest Money") made payable to the Bank of New York Mellon with Goldfinch as escrow agent. Goldfinch shall hold the Earnest Money in escrow pursuant to the terms and conditions of this Contract. The Earnest Money shall be refunded to Buyer if this Contract is not executed and delivered by BNSF within forty five (45) days after the date Buyer delivers this Contract fully executed by Buyer and deposits the Earnest Money. Buyer shall not be entitled to any interest on the Earnest Money held by Goldfinch pursuant to this Contract. Buyer acknowledges that receipt by Goldfinch of the Earnest Money shall not constitute acceptance of this Contract or Buyer's offer provided, however, that Goldfinch shall return the Earnest Money to Buyer if BNSF does not execute and deliver this Contract within forty-five (45) days after Buyer deposits the Earnest Money. Goldfinch shall deliver the Earnest Money to the party entitled thereto pursuant to this Contract, provided, however if there is a dispute between Buyer and BNSF as to who is so entitled, Goldfinch may deposit the Earnest Money with a court of competent jurisdiction pending resolution of such dispute. Section 19. Governing Law. This Contract shall be governed by and construed in accordance with the internal laws of the State in which the majority of the Property is located and applicable federal laws pertaining to NITUs, without reference to the conflicts of laws or choice of law provisions thereof. Seller acknowledges that Buyer is a governmental entity that is subject to the laws of the State of Montana and particularly to the Montana Constitution Article II, Part II Section 9 regarding the Public's Right to Know. 20.1 IF AT ANY TIME A QUESTION OR CONTROVERSY SHALL ARISE BETWEEN THE PARTIES HERETO IN CONNECTION WITH THIS CONTRACT UPON WHICH THE PARTIES CANNOT AGREE, SUCH QUESTION OR CONTROVERSY SHALL BE SUBMITTED TO AND SETTLED BY BINDING ARBITRATION. UNLESS OTHER PROCEDURES ARE AGREED TO BY THE PARTIES IN WRITING, ARBITRATION BETWEEN THE PARTIES PURSUANT TO THIS SECTION 20 SHALL BE GOVERNED BY THE RULES AND PROCEDURES SET FORTH IN THIS SECTION 20. 20.2 IF THE PARTIES TO THE DISPUTE ARE ABLE TO AGREE UPON A SINGLE COMPETENT AND DISINTERESTED ARBITRATOR WITHIN TWENTY (20) DAYS AFTER WRITTEN NOTICE BY ONE PARTY OF ITS DESIRE FOR ARBITRATION TO THE OTHER PARTY, THEN THE QUESTION OR CONTROVERSY SHALL BE SUBMITTED TO AND SETTLED BY THAT SINGLE ARBITRATOR. OTHERWISE, ANY PARTY (THE "NOTIFYING PARTY") MAY NOTIFY THE OTHER PARTY (THE "NOTICED PARTY") IN WRITING OF ITS REQUEST FOR ARBITRATION AND NOMINATING ONE ARBITRATOR. WITHIN TWENTY (20) DAYS AFTER RECEIPT OF SAID NOTICE, THE NOTICED PARTY SHALL APPOINT AN ARBITRATOR AND NOTIFY THE NOTIFYING PARTY IN WRITING OF SUCH APPOINTMENT. SHOULD THE NOTICED PARTY FAIL WITHIN TWENTY (20) DAYS AFTER RECEIPT OF SAID NOTICE TO NAME ITS ARBITRATOR, SAID ARBITRATOR MAY BE APPOINTED BY THE AMERICAN ARBITRATION ASSOCIATION ("AAA") UPON APPLICATION BY EITHER PARTY AFTER TEN (10) DAYS' WRITTEN NOTICE TO THE OTHER PARTY. THE TWO ARBITRATORS SO CHOSEN SHALL SELECT ONE ADDITIONAL ARBITRATOR TO COMPLETE THE BOARD. IF THE ARBITRATORS SO CHOSEN FAIL TO AGREE UPON AN ADDITIONAL ARBITRATOR, THE SAME SHALL, UPON APPLICATION OF A PARTY, BE APPOINTED BY SAID AAA IN THE MANNER HERETOFORE STATED. BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 13 20.3 UPON SELECTION OF THE ARBITRATOR(S), SAID ARBITRATOR(S) SHALL, WITH REASONABLE DILIGENCE, DETERMINE THE QUESTIONS AS DISCLOSED IN SAID NOTICE OF ARBITRATION, SHALL GIVE THE PARTIES REASONABLE NOTICE OF THE TIME AND PLACE (OF WHICH THE ARBITRATOR(S) SHALL BE THE JUDGE) OF HEARING EVIDENCE AND ARGUMENT, MAY TAKE SUCH EVIDENCE AS THE ARBITRATOR(S) SHALL DEEM REASONABLE OR AS EITHER PARTY MAY SUBMIT WITH WITNESSES REQUIRED TO BE SWORN, AND HEAR ARGUMENTS OF COUNSEL OR OTHERS. IF AN ARBITRATOR DECLINES OR FAILS TO ACT, THE PARTY (OR PARTIES IN THE CASE OF A SINGLE ARBITRATOR) BY WHOM THE ARBITRATOR WAS CHOSEN OR THE AAA SHALL APPOINT ANOTHER TO ACT IN THE ARBITRATOR'S PLACE. 20.4 AFTER CONSIDERING ALL EVIDENCE, TESTIMONY AND ARGUMENTS, SAID SINGLE ARBITRATOR OR THE MAJORITY OF SAID BOARD OF ARBITRATORS SHALL PROMPTLY STATE SUCH DECISION OR AWARD AND THE REASONING FOR SUCH DECISION OR AWARD IN WRITING WHICH SHALL BE FINAL, BINDING, AND CONCLUSIVE ON ALL PARTIES TO THE ARBITRATION WHEN DELIVERED TO THEM. THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED AS A JUDGMENT IN ANY COURT HAVING JURISDICTION THEREOF AND ENFORCED AS BETWEEN THE PARTIES WITHOUT FURTHER EVIDENTIARY PROCEEDING, THE SAME AS ENTERED BY THE COURT AT THE CONCLUSION OF A JUDICIAL PROCEEDING IN WHICH NO APPEAL WAS TAKEN. UNTIL THE ARBITRATOR(S) SHALL ISSUE THE FIRST DECISION OR AWARD UPON ANY QUESTION SUBMITTED FOR ARBITRATION, PERFORMANCE UNDER THIS CONTRACT SHALL CONTINUE IN THE MANNER AND FORM EXISTING PRIOR TO THE RISE OF SUCH QUESTION. AFTER DELIVERY OF SAID FIRST DECISION OR AWARD, EACH PARTY SHALL FORTHWITH COMPLY WITH SAID FIRST DECISION OR AWARD IMMEDIATELY AFTER RECEIVING IT. 20.5 EACH PARTY TO THE ARBITRATION SHALL PAY ALL COMPENSATION, COSTS, AND EXPENSES OF THE ARBITRATOR APPOINTED ON ITS BEHALF AND ALL FEES AND EXPENSES OF ITS OWN WITNESSES, EXHIBITS, AND COUNSEL. THE COMPENSATION, COST, AND EXPENSES OF THE SINGLE ARBITRATOR OR THE ADDITIONAL ARBITRATOR IN THE BOARD OF ARBITRATORS SHALL BE PAID EQUALLY BY BNSF AND BUYER. 20.6 THE PARTIES MAY OBTAIN DISCOVERY AND OFFER EVIDENCE IN ACCORDANCE WITH THE FEDERAL RULES OF CIVIL PROCEDURE RULES 26 - 37, AND FEDERAL RULES OF EVIDENCE, AS EACH MAY BE AMENDED FROM TIME TO TIME. 20.7 INTEREST COMPUTED ANNUALLY, AT A RATE EQUAL TO THE PRIME RATE PLUS TWO (2) PERCENTAGE POINTS, SHALL BE APPLIED TO ANY AND ALL ARBITRATOR'S AWARDS REQUIRING THE PAYMENT OF MONEY AND SHALL BE CALCULATED FROM THIRTY (30) DAYS FOLLOWING THE DATE OF THE APPLICABLE ARBITRATION DECISION. THE TERM "PRIME RATE" SHALL MEAN THE MINIMUM COMMERCIAL LENDING RATE CHARGED BY BANKS TO THEIR MOST CREDIT -WORTHY CUSTOMERS FOR SHORT-TERM LOANS, AS PUBLISHED DAILY IN THE WALL STREET JOURNAL. Section 21. Section Headings. The titles of sections and subsections herein have been inserted as a matter of convenience of reference only and shall not control or affect the meaning or construction of any of the terms or provisions herein. Section 22. Effect of Waiver. Any waiver by BNSF or failure of BNSF to insist upon full and complete performance of Buyer's obligations set forth herein shall not constitute a waiver or release of BNSF's right to insist upon full and complete performance of any other obligations herein, or a waiver or release of BNSF's right to insist upon full and complete performance of the obligations that were waived or not enforced for periods prior to, or following, the waiver or failure to insist upon full and complete performance. BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 14 Section 23. Amendments. No amendment to, or waiver of any provision of, this Contract shall be binding on any of the parties hereto unless such amendment or waiver is in writing and, if an amendment, is executed by both parties, and if a waiver, is executed by the party against whom enforcement of such waiver is sought. Section 24. Time of Essence. Time is of the essence in the performance of this Contract. Section 25. Attorneys' Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Contract, the prevailing party shall be entitled to recover all costs and expenses incurred by it in connection therewith, including its reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. Section 26. Construction. BNSF AND BUYER ACKNOWLEDGE THAT EACH PARTY AND, IF IT SO CHOOSES, ITS COUNSEL, HAVE REVIEWED AND REVISED THIS CONTRACT AND THAT THE NORMAL RULE OF CONSTRUCTION TO THE EFFECT THAT ANY AMBIGUITIES ARE TO BE RESOLVED AGAINST THE DRAFTING PARTY WILL NOT BE EMPLOYED IN THE INTERPRETATION OF THIS CONTRACT OR ANY AMENDMENTS OR EXHIBITS HERETO. Section 27. Severability. If any provision of this Contract is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable and this Contract shall be construed and enforced as if such illegal, invalid or unenforceable provision is not a part hereof, and the remaining provisions hereof shall remain in full force and effect. In lieu of any illegal, invalid or unenforceable provision herein, there shall be added automatically as a part of this Contract a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. Section 28. Disclosures for Tax Reporting. Notwithstanding any provision to the contrary herein, any party (and each employee, representative, or other agent of such party) may disclose to any and all persons, without limitation of any kind, such party's U.S. federal income tax treatment and the U.S. federal income tax structure of the transactions contemplated by this Contract and any other agreement related thereto and all materials of any kind (including opinions or other tax analyses) that are provided to the taxpayer relating to such treatment and tax structure. Section 29. Rule Against Perpetuities. If any of the terms under this Contract shall be unlawful or void for violation of (a) the rule against perpetuities or some analogous statutory provision, or (b) any other statutory or common law rules imposing like or similar time limits, then such terms shall continue only for the period of twenty-one (21) years after the death of the last survivor of the lineal descendants of Elizabeth II, Queen of England, living as of the date hereof. Section 30. Entire Agreement. This Contract contains the entire agreement of the parties hereto with respect to the Property and any other prior understandings or agreements are merged herein and no representations, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein or incorporated herein by reference shall be of any force or effect. Section 31. Counterparts. To facilitate execution, this Contract may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature or acknowledgement of, or on behalf of, each party, or that the signature of all persons required to bind any party or the acknowledgment of such party, appear on each counterpart. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making proof of this Contract to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, and the respective acknowledgments of, each of the parties hereto. Any signature or acknowledgment page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures or acknowledgments thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature or acknowledgment pages. Section 32. Processing Fee. Buyer acknowledges that a material consideration for this Contract, without which it would not be made, is the agreement between Buyer and BNSF, that Buyer shall pay upon BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 15 return of this Contract signed by Buyer to BNSF's Broker a processing fee in the amount of $2,000.00 over and above the agreed upon Purchase Price and in addition to the Earnest Money. Said fee shall be made payable to BNSF Railway Company by a separate check. [Signature page follows] BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 16 Accepted and agreed to by the parties as of the Effective Date. BNSF: BNSF RAILWAY COMPANY, a Delaware corporation By: Print Name: Title: BUYER: CITY OF KALISPELL, a municipality formed under the laws of the State of Montana By: Print Name: Title: Attachments: Exhibit A - Description of Property Exhibit B - Quitclaim Deed Exhibit C — Bill of Sale Exhibit D — Notice of Assignment Exhibit E — IRS Form 8283 Exhibit F — Charitable Contribution Receipt BNSF - Railbanking and Sale Contract City of Kalispell, MT Page 17 EXHIBIT A DESCRIPTION OF PROPERTY [To be attached] Railbanking and Sale Contract Exhibit A EXHIBIT B QUITCLAIM DEED THIS QUITCLAIM DEED ("Deed"), made this day of 20_, by and between BNSF RAILWAY COMPANY, a Delaware corporation ("BNSF"), and a(n) , with its principal office at ("Grantee"). WITNESSETH: That BNSF, for TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, to it in hand paid, the receipt of which is hereby acknowledged, does hereby REMISE, RELEASE and FOREVER QUITCLAIM, without any covenants of warranty whatsoever and without recourse to BNSF, its successors and assigns, unto Grantee, its successors and assigns, all of its right, title and interest, if any, in real estate and its rights under any leases related to such real estate, if any, subject however to all existing interests, including but not limited to all reservations, rights -of -way, leases, easements and other encumbrances, of record or otherwise, located in the County of State of , more particularly described on the attached Exhibit A which is fully incorporated herein by reference (the "Property"). SUBJECT, to the terms of that certain Railbanking and Sale Contract, dated 20_ ("Contract"), which terms are incorporated herein by this reference, this conveyance is dependent upon and pursuant to the issuance of a Notice of Interim Trail Use ("NITU") in Surface Transportation Board ("STB") Docket No. (Sub -No. ), BNSF Railway Company — Abandonment Exemption in County, , in accordance with 16 U.S.C. Section 1247(d), the STB's rules and regulations pertaining to interim trails use, and other applicable authorities, all as amended from time to time; SUBJECT, to interpretation pursuant to and in conformity with Section 8(d) of the National Trails System Act, 16 U.S.C. Section 1247(d), and the rules and regulations of the STB related thereto, all as may be amended from time to time. GRANTEE SHALL ASSUME, INDEMNIFY, DEFEND AND HOLD HARMLESS BNSF FROM ALL FINANCIAL, MANAGERIAL AND LEGAL RESPONSIBILITY AND LIABILITY FOR THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY LIABILITIES AND RESPONSIBILITIES ASSUMED BY OR PLACED UPON GRANTEE PURSUANT TO AND IN ACCORDANCE WITH (1) THE NITU, (11) GRANTEE'S STATEMENT OF WILLINGNESS TO ASSUME FINANCIAL RESPONSIBILITY FILED BY GRANTEE WITH THE STB, AND (III) ANY APPLICABLE STB ORDERS RELATED TO THIS TRANSACTION OR THE PROPERTY. Grantee acknowledges that any interim trail use by Grantee or its assigns shall be subject to the possibility of future restoration of rail service pursuant to federal law and/or BNSF's retained interests pursuant to the Contract. Grantee shall take all steps necessary, at no expense to BNSF, to comply with any and all state and federal requirements relating to such interim trail use and/or restoration. SUBJECT, to Grantee's agreement that the use of the Property by Grantee (or its assignees) shall not impair future restoration of rail service pursuant to the National Trails System Act, as amended. RESERVING, unto BNSF, the right to reactivate and restore rail service on the Property pursuant to the National Trails System Act, as amended, or any equivalent or successor law. Should BNSF or any such assignee of BNSF exercise this right at any time, Grantee (or its assigns) shall allow reactivation of rail service on the terms and conditions herein and in the Contract. Upon BNSF's notice of intent to restore rail service ("Reactivation Notice"), Grantee shall reconvey the Property to BNSF free and clear of any encumbrances or liens not in effect prior to the date of this Deed (or shall otherwise commit to clear such encumbrances and/or liens within a reasonable period of time) at no cost to BNSF (except to the extent expressly provided otherwise herein below). Grantee shall have the right to salvage any non -rail -related facilities or improvements on the Property, provided such salvage shall be completed within one hundred eighty (180) days of the Reactivation Notice, and any materials not salvaged within said time period shall be forfeited by Grantee absent written waiver by BNSF. If BNSF, or its successor, provides the Reactivation Notice, (i) any reconveyance of the Property shall be at fair market value, which shall be determined by a Railbanking and Sale Contract Exhibit B — Page 1 neutral appraisal process agreed upon between the parties, with the costs thereof to be shared equally, and (ii) BNSF shall not be liable for any penalties or direct, indirect, or consequential damages or costs, losses, or expenses arising out of the reactivation and restoration of rail service on the Property. If any dispute arises between the parties as to the fair market value determination or process for determination, such disputes shall be finally resolved pursuant to the dispute resolution procedures set forth in the Contract. ALSO RESERVING, unto BNSF, all coal, oil, gas, casing -head gas, and all ores and minerals of every kind and nature including sand and gravel underlying the surface of the Property, together with the full right, privilege, and license at any and all times to explore, or drill for and to protect, conserve, mine, take, remove, and market any and all such products in any manner which will not damage structures on the surface of the Property, together with the right of access at all times to exercise said rights; provided, however, BNSF's exercise of this reservation shall not permanently damage improvements placed on the Property by Grantee or its successors and shall not unduly burden the use of the Property as a recreational trail. In no event will BNSF have the right to conduct strip mining activities on the Property. Grantee has been allowed to make an inspection of the Property and has knowledge as to the past use of the Property. Based upon this inspection and knowledge, Grantee is aware of the condition of the Property and GRANTEE SPECIFICALLY ACKNOWLEDGES THAT THE PROPERTY IS BEING QUITCLAIMED ON AN "AS -IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND THAT GRANTEE IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM BNSF AS TO ANY MATTERS CONCERNING THE PROPERTY, including, without limitation, the physical condition of the Property; zoning status; tax consequences of this transaction; utilities; operating history or projections or valuation; compliance by the Property with Environmental Laws (defined below) or other laws, statutes, ordinances, decrees, regulations and other requirements applicable to the Property; the presence of any Hazardous Substances (defined below), wetlands, asbestos, lead, lead -based paint or other lead containing structures, urea formaldehyde, or other environmentally sensitive building materials in, on, under, or in proximity to the Property; the condition or existence of any of the above ground or underground structures or improvements, including tanks and transformers in, on or under the Property; the condition of title to the Property; and any leases, easements, reservations, permits, orders, licenses, or other rights or agreements, affecting the Property. BNSF EXPRESSLY DISCLAIMS ANY WARRANTIES FOR THE PROPERTY OR APPURTENANCES THERETO, INCLUDING, WITHOUT LIMITATION, WARRANTIES AS TO TITLE, MERCHANTABILITY, HABITABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR CONFORMITY OF THE PROPERTY TO ITS INTENDED USE. Grantee acknowledges and represents to BNSF that Grantee is aware of the risk that Hazardous Substances may be present on, under, in or about the Property and that Grantee has conducted such investigations of the Property, including but not limited to, the physical and environmental conditions thereof, as Grantee deemed necessary to satisfy itself as to the condition of the Property, and Grantee is relying and will rely solely upon same and not upon any information provided by or on behalf of BNSF or its agents or employees with respect thereto. GRANTEE ASSUMES THE RISK THAT ADVERSE MATTERS MAY NOT HAVE BEEN REVEALED BY GRANTEE'S INVESTIGATIONS, AND GRANTEE SHALL INDEMNIFY, HOLD HARMLESS AND HEREBY WAIVES, RELEASES AND DISCHARGES FOREVER BNSF (AND BNSF'S AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, LICENSEES AND INVITEES) FROM ANY AND ALL PRESENT OR FUTURE, KNOWN OR UNKNOWN, CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING, BUT NOT LIMITED TO, THOSE IN CONTRACT, TORT AND STRICT LIABILITY), DAMAGES (INCLUDING, WITHOUT LIMITATION, CONSEQUENTIAL AND PUNITIVE), LOSSES (HEREIN DEFINED), INJURIES, LIABILITIES, COSTS (INCLUDING, BUT NOT LIMITED TO, FINES, PENALTIES, COURT COSTS AND ATTORNEYS' FEES) ARISING FROM OR IN ANY WAY RELATED TO (1) ANY LATENT OR PATENT CONDITIONS OF THE PROPERTY, (11) ANY BODILY INJURY OR DEATH OR LOSS OR DAMAGE TO THE PROPERTY OF ANY PERSON OR PERSONS WHOMEVER, INCLUDING THE PARTIES HERETO, IN ANY MANNER ARISING FROM OR GROWING OUT OF THE ACTS OR OMISSIONS, NEGLIGENT OR OTHERWISE, OF GRANTEE OR ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, Railbanking and Sale Contract Exhibit B — Page 2 AGENTS, LICENSEES AND INVITEES IN CONNECTION WITH THE ENTRY UPON, OCCUPATION OR USE OF THE PROPERTY, AND/OR (III) ANY ALLEGED OR ACTUAL PRESENCE, USE, STORAGE, GENERATION, MANUFACTURE, TRANSPORT, RELEASE, LEAK, SPILL, DISPOSAL OR OTHER HANDLING OF ANY HAZARDOUS SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY. As used in this paragraph, the term "Losses" shall include without limitation (a) the cost of any investigation, removal, remedial or other response action that is required by any Environmental Law, that is required by judicial order or by order of or agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause BNSF's remaining property or the operations or business of BNSF on its remaining property to be in compliance with the requirements of any Environmental Law, and (c) costs imposed under any Environmental Law enacted after the date of this Deed. As used herein, the term "Environmental Law" means 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, occupational safety, natural resources, plant or animal life or the environment, including without limitation, principles of common law and equity, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law. As used herein, the term "Hazardous Substance" means any hazardous, toxic, radioactive or infectious substance, material, contaminant or waste as defined, listed or regulated under any Environmental Law, and includes without limitation, petroleum, oil and any of its fractions. The rights of BNSF under this paragraph shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this Deed, the Contract or otherwise. This indemnity specifically includes the obligation of Grantee to remove, close, remediate, reimburse or take other actions requested or required by any governmental agency concerning any Hazardous Substances or contaminants on the Property. Grantee acknowledges and agrees that in no event shall this Deed or the Contract be construed to create a joint enterprise for the use or operation of the Property. Grantee further acknowledges that a material consideration for this conveyance, without which it would not be made, is the agreement by Grantee, for itself and for its successors and assigns, that BNSF, its predecessors, successors, and assigns shall be in no manner responsible to Grantee, any subsequent owner, purchaser, or any person for any claims, demands, damages, causes of action, including loss of access, or suits regarding the quiet and peaceable possession of the Property, title thereto, or condition thereof. Grantee acknowledges and affirms that BNSF may not hold fee simple title or any other particular interest in the Property, and that BNSF's interest in the Property, if any, may rise only to the level of an easement for railroad purposes. GRANTEE IS WILLING TO ACCEPT BNSF'S TITLE TO THE PROPERTY, IF ANY, ON THIS BASIS AND EXPRESSLY RELEASES BNSF, ITS SUCCESSORS AND ASSIGNS FROM ANY CLAIMS THAT GRANTEE OR ITS SUCCESSORS MAY HAVE AS A RESULT OF THE CONVEYANCE TO BE MADE PURSUANT TO THIS DEED. IN LIGHT OF BNSF'S DISCLOSURE THAT IT MAY NOT HOLD FEE SIMPLE TITLE OR ANY OTHER INTEREST IN THE PROPERTY, GRANTEE SHALL INDEMNIFY, DEFEND AND HOLD BNSF HARMLESS FROM ANY SUIT OR CLAIM FOR DAMAGES, PUNITIVE OR OTHERWISE, EXPENSES, ATTORNEYS' FEES, OR CIVIL PENALTIES THAT MAY BE IMPOSED ON BNSF AS THE RESULT OF ANY PERSON OR ENTITY CLAIMING AN INTEREST IN THE PROPERTY OR CLAIMING THAT BNSF DID NOT HAVE THE RIGHT TO TRANSFER THE PROPERTY TO GRANTEE. Grantee further acknowledges that, according to BNSF's records, BNSF's interest in the Property may be subject to reversion upon abandonment of use for railroad purposes or cessation of interim trail use, and that this Deed releases and quitclaims only BNSF's interest, if any, that BNSF may have in the Property. If any of the terms under this Deed shall be unlawful or void for violation of (a) the rule against perpetuities or some analogous statutory provision, or (b) any other statutory or common law rules imposing like or similar time limits, then such terms shall continue only for the period of twenty-one (21) years after the death of the last survivor of the lineal descendants of Elizabeth II, Queen of England, living as of the date hereof. Railbanking and Sale Contract Exhibit B — Page 3 The covenants and agreements set forth herein above, shall be binding upon Grantee and its heirs, successors and assigns, and shall be covenants running with the land benefitting BNSF and its heirs, successors and assigns. TO HAVE AND TO HOLD the Property unto the said Grantee, its successors and assigns, forever. [Signature pages below] Railbanking and Sale Contract Exhibit B — Page 4 BNSF'S SIGNATURE PAGE IN WITNESS WHEREOF, BNSF has caused this instrument to be signed by its authorized representative, attested by its Assistant Secretary, and its corporate seal to be affixed hereto on the day and year first above written. BNSF: BNSF RAILWAY COMPANY, a Delaware corporation By: Print Name: Title: STATE OF TEXAS ) ) SS. COUNTY OF TARRANT ) On this day of , 20_ before me appeared to me personally known, who being by me duly sworn, did say that he or she is of BNSF RAILWAY COMPANY, a Delaware corporation, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors and said acknowledged said instrument to be the free act and deed of said corporation. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written. Notary Public My Commission Expires: Railbanking and Sale Contract Exhibit B — Page 5 STATE OF COUNTY OF On this she is State of GRANTEE'S SIGNATURE PAGE Accepted: GRANTEE: a(n) By: Print Name: Title: ) SS. day of 1 20_ before me appeared to me personally known, who being by me duly sworn, did say that he or of , a of the and that said instrument was signed in behalf of said by authority of its or other applicable governing body and said acknowledged said instrument to be the duly authorized free act and deed of said IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written. Notary Public My Commission Expires: Railbanking and Sale Contract Exhibit B — Page 6 EXHIBIT C BILL OF SALE BNSF RAILWAY COMPANY, a Delaware corporation ("BNSF"), with an address of 2301 Lou Menk Drive, GOB 3-W, Fort Worth, Texas 76131, in consideration of Ten Dollars ($10.00) and other good and valuable consideration to it paid by , a(n) ("Grantee"), with an address of , receipt whereof is hereby acknowledged, has quitclaimed, assigned, transferred and delivered and by these presents does hereby quitclaim, sell, assign, transfer and deliver unto the Grantee, without any covenants of warranty whatsoever and without recourse to BNSF, all of its right, title and interest, if any, in and to all trail -related structures (including bridges, culverts, ballast and earthworks) located on, or otherwise affixed to, the Real Property (as defined below), together with all other objects located on or affixed to the Real Property (such trail -related structures and other objects being referred to collectively as the "Personal Property"), presently used in the operation and maintenance of the rail corridor located on or along the real property between and at or near in the County of , State of , such real property being quitclaimed to Grantee pursuant to that certain Quitclaim Deed of even date herewith and more particularly described in Exhibit A attached hereto ("Real Property"); provided that the Personal Property shall further include any rail, ties, spikes, tie plates, rail anchors, signaling and communications equipment, crossings and crossing equipment, signage, roundhouses, depots, and other support facilities, track materials and supplies, whether or not same are deemed affixed to the Real Property. Notwithstanding the foregoing or anything contained herein to the contrary, however, to the extent any items of Personal Property remaining on the Real Property are owned by any third party (e.g., crossing equipment owned in whole or in part by a governmental authority), said interests shall not be conveyed unto Grantee. Grantee has fully examined and inspected the Personal Property, and has in all respects accepted and approved the same and all parts and appurtenances thereof. Grantee acknowledges and agrees that BNSF has made no representations or warranties respecting the nature or condition of the Personal Property. BNSF HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF THE PERSONAL PROPERTY, ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE PERSONAL PROPERTY, THE CONFORMITY OF THE PERSONAL PROPERTY TO ITS INTENDED USES OR THE QUALITY OF THE TITLE TO THE PERSONAL PROPERTY. BNSF SHALL NOT BE LIABLE TO GRANTEE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT) WITH RESPECT TO THE DESIGN, CONDITION, QUALITY, SAFETY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OF THE PERSONAL PROPERTY OR THE CONFORMITY OF THE PERSONAL PROPERTY TO ITS INTENDED USES. GRANTEE ACCEPTS THE PERSONAL PROPERTY IN "AS IS, WHERE IS" AND "WITH ALL FAULTS" CONDITION, AND SUBJECT TO ALL LIMITATIONS ON BNSF'S RIGHTS, INTEREST, AND TITLE TO THE PROPERTY COMPRISING THE PERSONAL PROPERTY. TO HAVE AND TO HOLD, together with all appurtenances thereunto belonging to the Grantee, its successors and assigns, forever. Railbanking and Sale Contract Exhibit C — Page 1 IN WITNESS WHEREOF, BNSF has caused this Bill of Sale to be signed by its duly authorized officers this day of , 20_ BNSF: BNSF Railway Company, a Delaware Corporation By: Print Name: Title: Accepted: GRANTEE: a(n) By: Print Name: Title: [Exhibit A to be attached prior to execution by the parties] Railbanking and Sale Contract Exhibit C — Page 2 TO: EXHIBIT D NOTICE OF ASSIGNMENT Goldfinch Exchange Company LLC A Delaware Irmited Irabilrty company 2001 Western Avenue, Suite 330 Seattle, WA 98121 425-646-4020 206-728-0935 fax NOTICE OF ASSIGNMENT and any assignees or exchange intermediaries of Buyer You and BNSF Railway Company ("BNSF") have entered into that certain Railbanking and Sale Contract, dated , 20 for the sale of the real property described therein. You are hereby notified that BNSF has assigned its rights as seller, but not its obligations, to Goldfinch Exchange Company LLC for the purpose of effecting a tax deferred exchange under Internal Revenue Code Section 1031. This is an assignment of rights only and BNSF will deed the property directly to you. ACKNOWLEDGED: Print Name: Title: Railbanking and Sale Contract Exhibit E EXHIBIT E IRS FORM 8283 [see attached] Railbanking and Sale Contract Exhibit E EXHIBIT F CHARITABLE CONTRIBUTION RECEIPT Substantiation for Charitable Donations of $250 or More Internal Revenue Code Section 170(f)(8) requires that the recipient (Grantee) of any single charitable gift of $250 or more give the donor written confirmation of the receipt of such a gift, including a description and a good faith estimate of the value of any goods and services provided by the recipient (Grantee) in exchange for the donor making the gift. In order to comply with this Code Section, hereby certifies that we received the following contribution from The BNSF Railway Company: Cash or check in the amount of $ Or Property consisting of - Date contribution received: Were any goods and/or services provided to The BNSF Railway Company in return for this contribution? Yes No If yes, a description of those goods and services is provided below with a statement of monetary value: Value: $ Organization Name: Address: Telephone/Fax: Organization Tax ID#: Signature: Name: Railbanking and Sale Contract Exhibit F Date: Title: