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HomeMy WebLinkAbout14 - Agreement for Purchase and Sale and Escrow Instructions for the Purchase of Real Property at 301 East Balboa BoulevardQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report August 27, 2024 Agenda Item No. 14 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Seimone Jurjis, Assistant City Manager/Community Development Director - 949-644-3232, sjurjis@newportbeachca.gov PREPARED BY: Lauren Wooding Whitlinger, Real Property Administrator - 949-644- 3236, Iwooding@newportbeachca.gov TITLE: Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard ABSTRACT - The City of Newport Beach owns various properties on the Balboa Peninsula which provide opportunities for public parking and access to oceanfront beaches. Most of the properties, however, are concentrated toward the west end of the Peninsula. Public parking at the east end of the Peninsula is primarily provided at the Balboa Pier parking lot and through limited on -street parking, often not meeting the parking needs of the area. The property located at 301 Balboa Boulevard East was listed for sale and is ideally located to expand public parking along Balboa Boulevard at the eastern end of the Peninsula. For the City Council's consideration is an Agreement for Purchase and Sale of Real Property and Escrow Instructions (Agreement) (Attachment A) for the purchase of property located at 301 Balboa Boulevard East for a price of $2.6 million, utilizing FY 2023-24 year-end General Fund surplus funds. RECOMMENDATIONS: a) Determine this action exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and Section 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because this action will not result in a physical change to the environment, directly or indirectly; b) Authorize the City Manager and City Clerk to execute the Agreement for Purchase and Sale of Real Property and Escrow Instructions, and all associated documents necessary to complete the purchase transaction, with Bobby Hanada and Linda Hanada, to purchase the property at 301 East Balboa Boulevard, for a price of $2,600,000 in a form substantially similar to the agreement attached to the staff report; and 14-1 Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard August 27, 2024 Page 2 c) Approve Budget Amendment No. 25-013 (Attachment B) to record a budget transfer of $2,832,000 from the General Fund to the General Fund CIP Fund where it will be expensed from 01201925-911047-25F11. DISCUSSION: As is common in many beach communities in Southern California, public parking proximate to public beaches in Newport Beach is limited. The City owns several public parking lots along the Balboa Peninsula, with most located on the west end of the Peninsula. Public parking at the east end of the Peninsula is primarily provided at the Balboa Pier parking lot and in the Palm Street parking lot, along with limited on -street parking. This parking, especially during peak summertime demand, often does not meet the parking needs of the area, which can have a negative effect on local businesses and residents. While the City has generally sought options to provide more public parking in the east Balboa Peninsula area, opportunities to expand public parking arise infrequently and property acquisition costs in the area can be prohibitively expensive. City staff has had several discussions with AT&T, the property owner of the site at 311 Balboa Boulevard East (AT&T Site), one of the largest properties in the area, about acquiring all or a portion of the site for a public parking lot. The AT&T Site is ideally located to expand public parking along Balboa Boulevard near Balboa Village at the eastern end of the Peninsula. AT&T has been open to the discussions, however, the timeline for the company to downsize or relocate its operations from the property are unknown at this time. The adjacent site at 301 Balboa Boulevard East provides hard corner access to the nearest cross street — Coronado Street - and was listed for sale in November 2023. 301 East Balboa Boulevard — Property 301 East Balboa Boulevard (Property), located at the entrance to Balboa Village at the east end of the Balboa Peninsula (Attachment C), is a 2,399-square-foot (0.06-acre) site currently developed with an original 1,638-square-foot legal nonconforming residential triplex, zoned Two -Unit Residential (R2). The triplex consists of one studio unit and two, one -bedroom units. The triplex was constructed in 1921 and has been maintained in its original condition with minor system upgrades and tenant improvements completed since then. Two tenants currently occupy units at the site, including the studio unit and one of the one-bedroom/one-bathroom units. The Property is owned by Bobby and Linda Hanada, husband and wife as joint tenants (Seller), who acquired the site in 1989. Given the limited number of parcels suitable for public parking in the area, the proximity to the AT&T Site and the Balboa Village area, and the upward trend of real estate values in Newport Beach, staff proposes to purchase the Property for future redevelopment as public parking. 14-2 Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard August 27, 2024 Page 3 Interim Uses Staff reviewed the characteristics and location of the Property and determined it to be a viable option to temporarily locate Fire Station No. 1 staff and operations while the Balboa Fire Station and Library project is being redeveloped at the nearby 100 Balboa Boulevard East site. Although alternative temporary fire station locations exist at other City -owned sites in the area, these other sites are inferior to the Property as they do not provide direct access to Balboa Boulevard, do not provide direct access to utilities, and would increase the Fire Department's response times. Opening - Closing Escrow and Due Diligence Upon execution of the Agreement and opening of escrow, staff will proceed with a 60-day due diligence period to investigate the condition of the Property. Staff anticipates due diligence to cost approximately $45,000 and will likely include, but not be limited to, an appraisal, a survey of the property and improvements, a hazardous materials survey of the building, and preparation of a relocation plan. Under the terms of the Agreement, the seller will provide a Phase I environmental report to the City. Due diligence will be handled by professional consultants that specialize in property inspections. After due diligence is completed and staff is satisfied with the condition of the Property, the close of escrow will be scheduled for within 15 days after due diligence approval. The close of escrow is anticipated to occur before the end of calendar year 2024. Purchase Price and Closina Costs The City and the Seller have negotiated the terms of a Purchase and Sale Agreement. The negotiated purchase price is $2.6 million. Staff proposes to use the FY 2023-24 year-end General Fund surplus to fund the purchase price, and associated closing and relocation costs. In addition to the purchase price of the Property and due diligence costs, staff anticipates closing costs, the premium for an owner's policy of title insurance, and prorated property taxes of $10,000 or less. The prorated property taxes will be refunded to the City after closing by the County of Orange. Relocation Costs Under California Relocation Assistance law (Government Code §7260 et seq.), the City is required to provide relocation assistance when acquisition of property for a public project will displace existing residential occupants. Staff proposes to hire a relocation planning consultant to develop the required relocation plan, prepare the required formal notices, document and administer the relocation assistance payments, and facilitate vacation of the Property. The consultant fees are included in the due diligence costs outlined above. 14-3 Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard August 27, 2024 Page 4 Relocation payments to the existing tenants at the Property are not anticipated to exceed $90,000 per unit and are included in the budget amendment in Attachment B. Relocation payments include assistance with moving costs, and an amount that enables the tenant to lease or rent a comparable replacement dwelling for a period not to exceed 42 months. A formal relocation plan must be approved by the City Council prior to its implementation and will be submitted for Council's approval at a future meeting, before any payments are made. Proposed Agreement The City and Seller have negotiated terms of an Agreement for Purchase and Sale of Real Property and Escrow Instructions, for the City to purchase the Property from the Seller. The proposed terms of the sale are summarized below: 1. City will pay the Seller a purchase price of $2,600,000; 2. City will deposit $26,000 in initial earnest money, which money will become non- refundable after the expiration of the due diligence period; 3. City will have a 60-day due diligence period from the opening of escrow and receipt of all existing agreements and reports related to the Property, to inspect the Property and perform any tests to determine its condition; 4. City will deposit an additional $26,000 in earnest money, which money will become immediately non-refundable, after expiration of the due diligence period and City approval of the condition of the Property; 5. Escrow will close 15 days from the City's approval of due diligence; 6. City and Seller will each pay half of the closing costs; and 7. The Seller will pay for a standard owner's policy of title insurance for the City, with the cost of an upgraded policy and endorsements paid for by the City. The Agreement has been prepared by the City Attorney's Office and has been approved as to form. The Seller reviewed and approved the proposed Agreement, and their signatures are included on Attachment A. California Housing Crisis Act Senate Bill 330 (Chapter 654, Statues of 2019), the Housing Crisis Act (HCA) of 2019, was signed into law in 2019, updated in 2021 with Senate Bill 8 (Chapter 161, Statutes of 2021), and updated again in 2023, with Assembly Bill 1218 (Chapter 754, Statutes of 2023). The HCA includes provisions to protect existing housing inventory by prohibiting cities from approving a housing development project that results in a reduction of 14-4 Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard August 27, 2024 Page 5 housing units on a site. HCA does include a new provision applicable to nonresidential projects that states any existing units proposed for demolition that meet the definition of "protected" must be replaced, and displaced tenants must be provided relocation benefits. Protected units are units that are or were within the past 5 years that were either subject to an affordable housing covenant or occupied by low- or very low-income households. During the 60-day due diligence period, staff will be able to determine if the units are "protected". If it is determined the units to be "protected", staff believes that replacement units can be found prior to their demolition. Replacement units can be in a form of either accessory dwelling units or affordable housing units as part of a larger multifamily project. FISCAL IMPACT: Approval of this item will result in an increase in expenditures to the General Fund for the purchase of the Property, due diligence investigations, the City's share of closing costs and recording fees, an owner's policy of title insurance, payment of prorated property taxes, and tenant relocation costs. Upon purchase of the Property, the City will increase General Fund revenues and collect approximately $8,500 in rental income for approximately three months from existing tenants, during the relocation process. The Budget Amendment No. 25-013 (Attachment B) includes a transfer of $2,832,000 from the General Fund to the General Fund CIP Fund where it will be expensed from 01 201925-911047-25F1 1, and $8,500 in Fiscal Year 2024-25 revenue to be posted to the Rental of Property account in the Community Development Department — 01050505-551115. Funding for the purchase of this property will come from the anticipated General Fund Surplus for Fiscal Year 2023-24, which will be carried -over to fund the project. Based on the Third Quarter Budget Update, an unobligated budget surplus of approximately $5.8 million is projected for Fiscal Year 2023-24, which was presented to the City Council on May 28, 2024. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). 14-5 Agreement for Purchase and Sale and Escrow Instructions with Bobby Hanada and Linda Hanada, husband and wife as joint tenants for the Purchase of Real Property at 301 East Balboa Boulevard August 27, 2024 Page 6 ATTACHMENTS: Attachment A — Agreement for Purchase and Sale of Real Property and Escrow Instructions Attachment B — Budget Amendment No. 25-013 Attachment C — Maps 14-6 Attachment A Agreement for Purchase and Sale of Real Property and Escrow Instructions 14-7 AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS Escrow No. Date of Opening of Escrow: , 2024 To: Mariners Escrow Corporation ("Escrow Holder") 270 Newport Center Drive Suite 150 Newport Beach, California 92660 Attention: Rozelle Miyamoto Telephone: 949-721-6491 Email: rmiyamoto@marinersescrow.com THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS ("Agreement") is made this day of , 2024 ("Effective Date"), by and between Bobby and Linda Hanada, husband and wife as joint tenants ("Seller"), and City of Newport Beach, a California municipal corporation and charter city ("City"), City and Seller are sometimes hereinafter individually referred to as a "Party" and collectively as the "Parties" to this Agreement. RECITALS: The following Recitals are a substantive part of this Agreement and are incorporated herein: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Seller is the owner of that certain real property commonly known as 301 East Balboa Boulevard located in the City of Newport Beach, County of Orange, State of California, having County Assessor's Parcel Number 048-082-01, which, on the Effective Date, consists of a multifamily property containing approximately 1,638 rentable square feet upon an approximately 0.06 acre parcel, as more particularly described on Exhibit "A" and depicted on Exhibit "B" attached hereto and by this reference incorporated herein, together with all improvements now or hereafter constructed thereon, all easements, licenses and interests appurtenant thereto and all intangible property owned by Seller in connection with such real property, including without limitation, development rights, governmental approvals and land entitlements (collectively referred to herein as the "Property"). C. Seller desires to sell to City, and City desires to purchase from Seller, the Property, upon the terms and conditions set forth in this Agreement. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 1 14-8 NOW, THEREFORE, for good and valuable consideration as set forth herein, the receipt and sufficiency of which is acknowledged, the Parties agree as follows: TERMS AND CONDITIONS 1. PURCHASE AND SALE OF PROPERTY. City hereby agrees to purchase from Seller, and Seller agrees to sell to City, the Property, upon the terms and conditions hereinafter set forth. 2. PURCHASE PRICE. The total purchase price for the Property, which includes the value of the land and improvements is TWO MILLION SIX HUNDRED THOUSAND DOLLARS and 001100 ($2,600,000.00) ("Purchase Price"). 2.1 Payment of Purchase Price. (a) Not later than five (5) business days following the Opening of Escrow, as defined herein, City shall deposit in Escrow in good funds, the sum of TWENTY-SIX THOUSAND DOLLARS and 001100 ($26,000.00) ("Initial Deposit"), which Initial Deposit shall be applicable to the Purchase Price upon Closing unless (i) Seller is in default in any material respect under this Agreement and City, as its sole and exclusive remedy, elects to terminate this Agreement and have its Deposit returned within seven (7) days of such termination (provided, that City is not in Monetary Default independent of Seller's default as provided herein), (ii) this Agreement is terminated by City on or before the expiration of the Due Diligence Period, or (iii) this Agreement is terminated in accordance with either Section 8.1, 8.3 or 9.5, in which case, the Initial Deposit shall be returned to City within seven (7) days of such termination and neither City nor Seller shall have any further obligations to the other, except for those obligations (including each reimbursing one-half of title and escrow, companies' expenses incurred prior to termination), which as outlined in this Agreement, expressly survive termination. The Initial Deposit shall remain refundable until the City approves of the condition of the Property pursuant to the terms of Section 5.3. "Good funds" shall mean a wire transfer of immediately available funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California, or cash. (b) Not later than five (5) business days following the City's approval of the condition of the Property, pursuant to the terms of Section 5.3 below, City shall deposit in Escrow in good funds, an additional sum of TWENTY-SIX THOUSAND DOLLARS and 001100 ($26,000.00) ("Second Deposit"), which Second Deposit shall be immediately non-refundable and applicable to the Purchase Price upon Closing unless (i) Seller is in default in any material respect under this Agreement and City, elects to terminate this Agreement and have its Deposit returned within seven (7) days of such termination (provided that City is not in Monetary Default independent of Seller's default as provided herein), or (ii) this Agreement is terminated in accordance with either Section 8.1, 8.3 or 9.5, in which case, the Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 2 14-9 Second Deposit shall be returned to City within seven (7) days of such termination and neither party hereto shall have any further rights or obligations hereunder other than those that expressly survive the termination of this Agreement (but also including each reimbursing one-half of title and escrow companies' expenses incurred prior to termination). (c) On or before the Closing Date, hereinafter defined, City shall deposit the balance of the Purchase Price, subject to any other credits or debits hereunder, with Escrow Holder in good funds. (d) The Initial Deposit, Second Deposit, Due Diligence Extension Deposit, as defined in Section 5.7, and Extension Deposit, as defined in Section 6.2, shall collectively constitute the "Deposit." 2.2 Interest Bearing Account. If requested in writing to do so by City, Escrow Holder shall deposit and hold the Deposit funds specified in Section 2.1 above in an interest -bearing account. All interest earned on said funds shall be credited to the party receiving the Deposit pursuant to the terms of this Agreement. 3. ESCROW. 3.1 Opening Of Escrow. Within five (5) business days after the execution of this Agreement, the Parties shall open an escrow ("Escrow") with the Escrow Holder by causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow shall be deemed open on the date that Escrow Holder countersigns this Agreement. The Parties agree to perform all acts reasonably necessary to close Escrow if and when required hereby. 3.2 Escrow Holder is Authorized To And Shall: (a) Prior to disbursing any portion of the Purchase Price to Seller in connection with the Close of Escrow (as defined below), Escrow Holder shall pay and deduct from the Purchase Price any amount necessary to satisfy (1) any delinquent taxes on the Property together with penalties and interest thereon, and/or (ii) delinquent or non -delinquent assessments or bonds on the Property except those which title is to be taken subject to in accordance with the terms of this Agreement; (b) Prior to disbursing any portion of the Purchase Price to Seller in connection with the Close of Escrow, Escrow Holder shall pay and deduct from the Purchase Price, all amounts necessary to cause to be released and fully reconveyed any and all Monetary Liens (as defined below); (c) Pay and charge Seller for all recording fees incurred in this transaction related to payment of reconveyance fees and forwarding fees for partial or full reconveyances of deeds of trust or release of any mortgage by Seller; Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 3 14-10 (d) Pay and charge to Seller all premiums, fees, and charges for any CLTA owner's title policy and endorsements; (e) Pay and charge to City all premiums, fees, and charges for any extended coverage ALTA owner's title policy or additional endorsements that may be requested by the City, that the City may wish to purchase for the Property; (f) Pay and charge Seller and City for escrow fees, recording fees, charges, and costs payable under Section i, in accordance with Section 9.4 below, except as otherwise expressly provided in this Section; (g) Prorate, as between City and Seller, real estate taxes and assessments through the Close of Escrow, with City to be charged with and have the benefit of the Closing Date, as provided in Section 9.3 of this Agreement; and (h) Disburse the Purchase Price in accordance with this Agreement and record the Grant Deed in the Official Records of the County Recorder of Orange County, California. (i) Disburse the commission payable to Seller's Broker pursuant to Section 31 below. 4. ADDITIONAL FUNDS AND DOCUMENTS REQUIRED FROM CITY AND SELLER. 4.1 City. Subject to City's written approval of the condition of the Property as set forth in Section 5.3, City agrees that on or before 1:00 p.m. on the business day preceding the Closing Date, City will deposit with Escrow Holder all additional funds and any other items and/or documents (executed and acknowledged, if appropriate) as may be necessary to comply with the terms of this Agreement, including without limitation, the following: (a) The balance of the Purchase Price plus the sums necessary to pay City's share of closing costs and prorations; (b) A Preliminary Change of Ownership Statement completed in the manner required in Orange County; (c) Two duplicate originals of an Assignment of Leases by Seller to City in a form substantially similar to the form of Exhibit "D" attached hereto and incorporated herein by this reference ("Assignment of Leases"); (d) Two duplicate originals of an Assignment of Contracts in a form substantially similar to the form of Exhibit "E" attached hereto and incorporated herein by this reference ("Assignment of Contracts"), which Assignment of Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 4 14-11 Contracts will convey all assignable contracts, warranties and guaranties in effect, if any, with respect to the Property; and (e) Such funds and other items and instruments as may be reasonably necessary in order for Escrow Holder to comply with this Agreement. 4.2 Seller. Seller agrees that on or before 1:00 p.m. on the business day preceding the Closing Date, Seller will deposit with Escrow Holder items and/or documents (executed and acknowledged, if appropriate) as may be necessary to comply with the terms of this Agreement, including without limitation, the following: (a) A grant deed conveying the Property to City in a form substantially similar to the form of Exhibit "C" attached hereto and incorporated herein by this reference ("Grant Deed"); (b) A Bill of Sale in a form substantially similar to the form of Exhibit "F" attached hereto and incorporated herein by this reference ("Bill of Sale"); (c) Two duplicate originals of the Assignment of Leases; (d) Two duplicate originals of the Assignment of Contracts; (e) A Non -Foreign Affidavit on Escrow Holder's Standard form or a form substantially similar thereto ("Non -Foreign Affidavit"); and (f) Such funds and other items and instruments as may be reasonably necessary in order for Escrow Holder to comply with this Agreement. In the event City determines that an Assignment of Leases, an Assignment of Contracts, or a Bill of Sale is unnecessary, City shall advise Seller and Escrow Holder and such documents shall be waived as conditions to the Closing hereunder. 4.3 Assignment of Contracts and Leases. On or before five (5) business days following the Opening of Escrow Seller shall deliver to City copies of all contracts which affect or relate to the Property and are binding on Seller and which will be assigned to the City with the Property, including any and all (i) building service, management, supply and maintenance contracts ("Existing Contracts)"), and (ii) leases, licenses and occupancy agreements to which Seiler is a party or that affect or relate to the Property ("Leases"). City shall notify Seller on or before the expiration of the Due Diligence Period of City's approval or disapproval of each Existing Contract and Leases. City's failure to notify Seller within the time specified shall be considered disapproval. As to those Existing Contracts and Leases City elects to assume, Seller shall assign same in the Assignment of Contracts. As to those contracts City does not elect to assume, Seller shall terminate or otherwise remain responsible for same after Close of Escrow. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 5 14-12 4.4 Miscellaneous Documents. On or before five (5) business days following the Opening of Escrow, Seller shall deliver to City for City's review and approval the due diligence items identified on Exhibit °G° (the "Due Diligence Items"). City shall notify Seller on or before the expiration of the Due Diligence Period, detailed below, of City's approval or disapproval of each item. City's failure to notify Seller within the time specified shall be considered disapproval. If City does not acquire the Property, all said documents shall be promptly returned to Seller. In addition, within thirty (30) calendar days of the Effective Date, Seller shall deliver to City (or cause Escrow Holder to deliver to City), natural hazard disclosure reports covering the Property in such form as required by law, which shall be countersigned and returned to Seller and Escrow Holder. 4.5 Estoppel Certificate. In the event the Property will be subject to Leases as of the Closing (i.e., assuming the existing tenants hold over), at least ten (10) calendar days prior to the Closing Date, Seller shall have delivered to Escrow Holder an original estoppel certificate, and to City, copies thereof, dated within forty-five (45) calendar days of the Closing Date. Such estoppel certificates shall be substantially in the form a tenant is required to deliver under its Lease if the tenant refuses to execute the form attached hereto as Exhibit "H". Seller shall use its good faith efforts to obtain such estoppel certificates from the tenants under a Lease and Seller may provide a Seller's estoppel in order to meet the Estoppel Delivery Requirement in the event Seller is unable to obtain such estoppel certificate from the tenant under a Lease; City shall not be required to complete its purchase of the Property unless Seller satisfies the Estoppel Delivery Requirement. If an estoppel certificate contains any material and adverse deviations from the form of estoppel certificate a tenant is required to deliver under its Lease or the form attached hereto as Exhibit "H", as applicable (so long as such information was not previously Known by City prior to the expiration of the Due Diligence Period), then City shall have five (5) business days from Seller's delivery to City of such estoppel certificate to object to it; provided, that City's failure to object to an estoppel certificate within such five (5) business day period shall be deemed City's approval of such estoppel certificate. The failure of Seller to satisfy the Estoppel Delivery Requirement as set forth in this Section 4.5 shall not constitute a breach of this Agreement by Seller if such requirement is not satisfied despite Seller's good faith efforts, but shall entitle City to terminate this Agreement. 5. DUE DILIGENCE PERIOD. 5.1 Inspection Rights. At City's own cost and expense, it may make an independent investigation of the Property and all other aspects of this transaction, and may rely thereon and on the advice of its consultants in entering into and, if applicable, terminating this Agreement. City shall have the unqualified and unrestricted right to terminate its obligations under this Agreement on or before the expiration of the Due Diligence Period, hereinafter defined. 5.2 City Inspection. Commencing upon the Opening of Escrow and Seller's delivery of the City that the Due Diligence Items identified in Exhibit °G" and continuing Agreement for Purchase and Sale of Real Property and Escrow lnstructions Page B 14-13 thereafter for sixty (60) calendar days ("Due Diligence Period"), City, its agents, and employees shall have the right to: (a) examine and inspect the Property including the physical condition, quality, quantity and state of repair of the Property in all respects, subject to Section 5.4 below; (b) review all instruments, records and documents which City deems appropriate or advisable to review in connection with this transaction, including, but not by way of limitation, any and all plans, specifications, surveys, environmental assessments, existing leases, contracts, rent rolls, cash flows, maintenance reports and/or easement documents, reports, and title reports; and (c) review all applicable laws, ordinances, rules and governmental regulations (including those relating to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property. 5.3 Approval or Disapproval of Property After Inspection. On or before the expiration of the Due Diligence Period, City may notify Escrow Holder, in writing, of its approval or disapproval of the condition of the Property. Should City fail to provide written notice of its approval or disapproval, City shall be deemed to have disapproved the condition of the Property. Upon City's delivery of written notice of its approval of the condition of the Property to Escrow Holder, the Initial Deposit shall remain applicable to the Purchase Price but shall become non-refundable except as otherwise expressly provided in this Agreement. City may, its sole discretion, elect to terminate this Agreement based on disapproval of the condition of the Property. Upon termination of this Agreement, neither City nor Seller shall have any further obligations to the other (also including each reimbursing one-half of title and escrow companies' expenses incurred prior to termination), except for those obligations, which as outlined in this Agreement, expressly survive termination, and the Initial Deposit shall be returned to City as provided in Section 2.1 above. 5.4 Entry for Investigation. Subject to the conditions hereafter stated and the rights of tenants in possession, Seller grants to City, its agents, employees, and consultants a limited license to enter upon any portion of the Property, at a time and manner reasonably approved by Seller and to minimize disruption or interference with any tenants, for the purpose of conducting engineering surveys, soil tests, investigations or other studies reasonably necessary to evaluate the condition of the Property, which studies, surveys, investigations and tests shall be done at City's sole cost and expense. City shall (a) notify Seller at least two (2) business days prior to each entry of the date and purpose of intended entry and provide to Seller the names and affiliations of the persons entering the Property; (b) conduct all studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Property during or after such investigation; (c) comply with all applicable laws and governmental regulations; (d) keep the Property free and clear of all materialmen's liens, [is pendens and other liens arising out of the entry and work performed under this paragraph; (e) Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 7 14-14 maintain or assure maintenance of workers' compensation insurance (or state approved self-insurance) on all persons entering the property in the amounts required by the State of California; (f) provide to Seller prior to initial entry a certificate of insurance evidencing that City has procured and paid premiums for an all-risk public liability insurance policy written on a per occurrence and not claims made basis in a combined single limit of not less than TWO MILLION DOLLARS ($2,000,000.00) which insurance names Seller as additional insured entitled to not less than thirty (30) days cancellation notice and is primary and non-contributing with insurance carried by Seller; and (g) return the Property to its original condition following City's entry. City agrees to indemnify, defend, protect and hold Seller and the Property free and harmless from any and all loss, liability, claims, damages and expenses (including but not limited to attorneys' fees and costs) arising directly or indirectly from the active negligence or willful misconduct by City in the exercise of said license, or from City's failure to comply with the conditions to City's entry onto the Property provided herein. Such undertaking of indemnity shall expire two (2) years from the Close of Escrow or the termination of this Agreement, whichever occurs later. The limited license herein granted shall be co -extensive with the term of this Agreement or any extension thereof. City agrees that Seller has no responsibility to obtain any Phase II environmental studies or soil testing, and Seller has no obligation to meet any of the conditions or recommendations in subsequent reports, all of which will be conducted at City's sole cost and expense, subject to first obtaining Seller's prior written consent to perform said investigations. 5.5 Documents and Inspections. Seller shall provide to City all available documents related to the Property. Such documents include, but are not limited to: surveys, easement documents, leases, studies, reports, analysis, and disclosures, if any. In addition, Seller shall procure and provide to City a Phase I Environmental Site Assessment of the Property within ten (10) calendar days after the Opening of Escrow. 5.6 Termination. City may, prior to the expiration of the Due Diligence Period, notify Seller of its desire to terminate the Agreement, at which time Escrow shall promptly return all Deposit(s) together with any interest thereon, to City. City may, after the expiration of the Due Diligence Period but prior to the Close of Escrow, notify Seller of its desire to terminate the Agreement and Escrow shall promptly return the Initial Deposit and Second Deposit, together with any interest thereon, to Seller. 5.7 Extension of Due Diligence Period; Due Diligence Extension Deposit. City shall have the right to extend the Due Diligence Period by thirty (30) calendar days, provided City has notified Seller and Escrow in writing of its intention to do so prior to the expiration of the initial Due Diligence Period pursuant to Section 5.2 above, and provided City delivers to Escrow Holder the sum of TWENTY-SIX THOUSAND AND 00/100 DOLLARS ($26,000.00) ("Due Diligence Extension Deposit"), which amount shall be immediately non-refundable and applicable to the Purchase Price and shall be deemed consideration for such extension of the Due Diligence Period. Notwithstanding the foregoing, the Due Diligence Extension Deposit shall be promptly returned to City if (i) Seller is in default in any material respect under this Agreement and City, as its sole and exclusive remedy, elects to terminate this Agreement and have its Deposit returned within Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 8 14-15 seven (7) days of such termination (provided, that City is not in Monetary Default independent of Seller's default as provided herein), or (ii) this Agreement is terminated in accordance with either Section 8.1, 8.3 or 9.5, in which case, the Due Diligence Extension Deposit shall be returned to City within seven (7) days of such termination and neither party hereto shall have any further rights or obligations hereunder other than those that expressly survive the termination of this Agreement, but also including each reimbursing one-half of title and escrow companies' expenses incurred prior to the termination. 6. CLOSING DATE. 6.1 Closing. Close of Escrow shall occur on or before fifteen (15) calendar days from the expiration of the Due Diligence Period ("Closing Period"). The terms the "Close of Escrow", "Closing Date" or "Closing" are used herein to mean the filing by Escrow Holder of Seller's Grant Deed for record in the Office of the County Recorder of Orange County, California. City and Seller each specifically agrees to strictly comply and perform its obligations herein in the time and manner specified and waives any and all rights to claim such compliance by mere substantial compliance with the terms of this Agreement. 6.2 rINTENTIONALLY DELETE 6.3 Distribution of Documents. Following Close of Escrow, Escrow Holder shall distribute the documents as follows: (a) To City: (i) One (1) certified conformed copy of the Grant Deed, the original to be mailed to City following recordation thereof; (ii) One (1) duplicate original each of the Bill of Sale, Assignment of Lease(s) (if any), the Assignment of Contracts, and the Non -Foreign Affidavit; (iii) One (1) original estoppel certificate of each tenant holding over under a Lease; and (iv) One (1) certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Seller pursuant to the terms hereof. (b) To Seller: (i) One (1) duplicate original each of the Bill of Sale, the Assignment of Lease(s) (if any), the Assignment of Contracts, and the Non - Foreign Affidavit; and Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 9 14-16 (ii) One (1) certified copy, conformed if recorded, of any other document delivered to Escrow Holder by City or Seller pursuant to the terms hereof. 6.4 Leasing and Maintenance Obligations Prior to Close of Escrow. Seller represents and warrants that two (2) units are vacant. Seller agrees not to enter into any new leases and/or shall ensure, prior to the Close of Escrow, that two (2) units shall be vacant. Seller agrees to maintain the Property in the same or substantially similar condition, free from unauthorized occupation, graffiti, and accumulation of debris or waste material, as it exists as of the Effective Date of this Agreement through the Close of Escrow (each, a "Changed Property Condition"), as it exists as of the Effective Date of this Agreement through the Close of Escrow consistent with Seller's past practices; provided, however, (i) Seller shall not be obligated to undertake any capital improvements or deferred maintenance repairs, and (ii) if any Changed Property Condition exists on the Closing Date and City has not waived such Changed Property Condition in writing, then Seller shall have the right to cure such and be entitled to extend the Closing Date for up to ten (10) days for purposes of such cure. Notwithstanding the foregoing, in addition to the City's rights under Section 13.1, if Seller fails or refuses to cure such Changed Property Condition, City shall have the right at its sole and exclusive discretion to terminate this Agreement and have its Deposit returned within seven (7) days of such termination. 6.5 Contracts. Subsequent to the expiration of the Due Diligence Period and assuming this Agreement has not been terminated, and assuming City has not delivered notice of its disapproval of the condition of the Property, Seller shall not enter into any new contracts or any amendments or modifications to the Existing Contracts, which new contracts or modifications shall survive Closing (collectively, "New Contracts") without City's prior written consent. Notwithstanding the foregoing, in the event Seller executes a New Contract without first seeking the City's prior written consent and which New Contract obligates the City to cover expenses or make payments after Closing, the City may at its option elect to deduct the amount of such expenses and payments from the Purchase Price or elect not to accept assignment of such New Contract and Seller shall remain responsible for same in accordance with Section 4.3. 6.6 Leases. Subsequent to the expiration of the Due Diligence Period and assuming this Agreement has not been terminated, and assuming City has not delivered notice of its disapproval of the condition of the Property, Seller will not enter into new Leases or any amendments or any extensions of existing Leases for a period that will survive Closing or otherwise affect the use, operation or enjoyment of the Property after Closing (collectively, "New Leases"). 6.7 Compliance with all Laws. Each party shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force including compliance with AB1482. Agreement for Purchase and Safe of Real Property and Escrow instructions Page 10 14-17 7. TITLE POLICY. 7.1 Approval of Title. Following execution of this Agreement but in no event later than five (5) business days following Opening of Escrow, Seller shall deliver to City a preliminary title report issued through, Commonwealth Title, Attn: Janine Hook, 801 North Brand Boulevard, Suite 320, Glendale, CA 91203, phone 800-390-2842, email Janine.Hook@fnf.com, ("Title Company"), describing the state of title of the Property ("Preliminary Title Report"), together with Schedule B exceptions. The Title review period shall run concurrently with the Due Diligence Period. City shall notify Seller in writing of City's approval or any objections City may have to title exceptions or other matters ("Disapproved Exceptions") contained in the Preliminary Title Report by the close of the Due Diligence Period ("City's Notice"). If City fails to deliver City's Notice prior to the expiration of the Due Diligence Period , City shall be conclusively deemed to have disapproved the Preliminary Title Report and all matters shown thereon. In the event City delivers City's Disapproved Exceptions within a notice ("City's Objection Notice") within said period, Seller shall have a period of ten (10) calendar days after receipt of City's Objection Notice in which to notify City of Seller's election to either (i) agree to remove any such Disapproved Exceptions prior to the Close of Escrow; or (ii) decline to remove any such Disapproved Exceptions ("Seller's Notice"). Seller shall only elect to decline to remove Disapproved Exceptions which Seiler in good faith believes Seller's reasonable efforts would not result in removal or as to which removal would result in cost or expense to Seller other than nominal administrative expense incurred in the process of removal. Seller's failure to deliver Seller's Notice within said ten (10) calendar day period shall be deemed Seller's election to decline to remove the Disapproved Exceptions. If Seller notifies City of its election to decline to remove the Disapproved Exceptions, if Seller is deemed to have elected to decline to remove the Disapproved Exceptions, or if Seller is unable to remove the Disapproved Exceptions, City may elect either to terminate this Agreement and the Escrow, or to accept title to the Property subject to the Disapproved Exception(s). City shall exercise such election by delivery of written notice to Seller and Escrow Holder within fifteen (15) calendar days following the earlier of (i) the date of written advise from Seller that such Disapproved Exception(s) cannot be removed; or (ii) the date Seller declines or is deemed to have declined to remove such Disapproved Exception(s). If City fails to deliver said written notice of termination of this Agreement and the Escrow within said fifteen (15) calendar day period, City's disapproval of the Disapproved Exception(s) shall be deemed waived and City shall be deemed to have agreed to accept title to the Property subject to the Disapproved Exception(s). It shall be incumbent upon City to obtain a "pro forma" or similar commitment for the Title Policy (the "Pro Forma") prior to the expiration of the Due Diligence Period. If City does not approve such Pro Forma prior to the expiration of the Due Diligence Period, City shall have the right to terminate this Agreement (in which case City shall be entitled to a return of the Deposit). If City fails to so terminate this Agreement, City shall be deemed to have approved such Pro Forma. City agrees that it will take title to the Property subject to the items set forth in the Pro Forma and any other Permitted Exceptions. Notwithstanding anything in this Agreement to the contrary, Seller shall remove from title of the Property, at or before the Close of Escrow, any (a) deeds of trust or mortgages securing loans made to Seller, and (b) other Monetary Liens or encumbrances encumbering the Property. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 11 14-18 Upon the issuance of any amendment or supplement to the Preliminary Title Report which adds additional exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement, provided, however, that City's initial period of review and approval or disapproval of any such additional exceptions shall be limited to ten (10) calendar days following receipt of notice of such additional exceptions along with a legible copy of the underlying document comprising the basis for each such additional exception. "Monetary Liens" shall mean all (i) liens secured by deeds of trust securing loans which are secured by an interest in the Property, (ii) federal tax liens due to failure to timely pay taxes which have been imposed on or secured by the Property, and (iii) mechanics' or materialmens' liens relating to work contracted for and performed at the Property and recorded against title to the Property. Such Monetary Lien amounts may be up to and including the total amount of unpaid principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all other amounts due and payable in accordance with the terms and conditions of said trust deed(s) or mortgage(s) or liens including late charges, if any. 7.2 Title Policy to be Issued to City. When Escrow Holder holds for City the Grant Deed in favor of City executed and acknowledged by Seller covering the Property, Escrow Holder shall cause to be issued and delivered to City and Seller as of the Closing a CLTA standard coverage policy of title insurance, or, upon City's request therefor, an ALTA standard coverage policy of title insurance ("Title Policy"), issued by Title Company, with liability in the amount of the Purchase Price, covering the Property and showing title vested in City free of all liens and encumbrances, except (collectively, "Permitted Exceptions"): (a) All nondelinquent general and special real property taxes and assessments for the current fiscal year; (b) Easements, encumbrances, covenants, conditions, restrictions, reservations, rights -of -way and other matters of record, as approved or deemed approved by City pursuant to Section 7.1 above; (c) The standard printed exceptions and exclusions contained in the CLTA or ALTA form policy; (d) Any exceptions created or consented to in writing by City, including without limitation, any exceptions resulting from City's possession of or entry on the Property; (e) if City fails to provide an ALTA survey for the Property acceptable to the Title Company for purposes of issuing the Title Policy, a general survey exception; and Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 12 14-19 (f) such other exceptions as Title Company shall commit to insure over, with City's prior written consent or approval of same, without any additional cost to City, whether such insurance is made available in consideration of payment, bonding, indemnity by Seller or otherwise. B. CONDITIONS PRECEDENT TO CLOSE OF ESCROW. 8.1 Conditions Precedent to City's Obligations. The obligations of City under this Agreement to proceed with Close of Escrow shall be subject to the satisfaction or written waiver, in whole or in part, by City of each of the following conditions precedent: (a) Seller is not in material default with the terms of this Agreement. (b) Seller has satisfied the Estoppel Delivery Requirement. (c) Subject to Section 10.3, all representations and warranties specified in Section 10.1 are true and correct in all material respects as if made on and as of the Closing Date except to the extent such representations and warranties expressly relate to an earlier date. (d) Seller shall have duly performed in all material respects every covenant of Seller required to be performed by Seller hereunder prior to the Close of Escrow. (e) Title Company has irrevocably committed to issue an ALTA Title Policy, consistent in all material respects with the Pro Forma, as required by Section 7 of this Agreement insuring title to the Property vested in City or other vestee designated by City for vesting purposes only, subject to payment of the Title Policy premium as provided herein. 8.2 Conditions Precedent to Seller's Obligations. The obligations of Seller under this Agreement to proceed with Close of Escrow shall be subject to the satisfaction or written waiver, in whole or in part, by Seller of the following condition precedent: (a) City is not in default in any material respect under the terms of this Agreement. (b) City shall have timely delivered the balance of the Purchase Price pursuant to the provisions of Section 2 above and all other items set forth in Section 4.1 above. (c) All representations and warranties specified in Section 10.4 are true and correct in all material respects as if made on and as of the Closing Date except to the extent such representations and warranties expressly relate to an earlier date. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 13 14-20 8.3 Return of Deposit; Seller Default. In the event Seller fails to satisfy any of the conditions specified in Section 8.1, above, and those conditions are not waived by City or cured within two (2) business days after Seller's receipt of a written notice from City specifying such default in writing prior to Closing, this Agreement shall terminate automatically without further action by any Party or Escrow Holder and Escrow Holder shall promptly return the Deposit together with any and all interest accrued thereon to City. 9. ESCROW PROVISIONS. 9.1 Escrow instructions. This Agreement, when signed by City and Seller, shall also constitute escrow instructions to Escrow Holder. Escrow Holder, to whom these instructions are delivered, is hereby authorized, directed, and empowered to act under and in strict accordance with this Agreement. If required by Escrow Holder, City and Seller agree to execute Escrow Holder's standard escrow instructions, provided that the same are consistent with and do not conflict with the provisions of this Agreement. In the event of any such conflict, the provisions of this Agreement shall prevail. 9.2 General Escrow Provisions. Escrow Holder shall cause the Grant Deed to be recorded (but in no event after the expiration of the Closing Period) when Title Company is in a position to issue the Title Policy in the form described in Section 7 above and Escrow Holder will hold for the account of Seller and City, respectively, the items described in Sections 4.1 and 4.2 above, to be delivered to Seller and City, respectively, through Escrow, less costs, expenses and disbursements chargeable to Seller and City, respectively, pursuant to the terms hereof. Escrow Holder shall deliver the Title Policy to the City and instruct the Orange County Recorder to mail the Grant Deed to City at the address set forth in Section 28 after recordation. All funds received in this Escrow shall be deposited in one or more general escrow accounts of the Escrow Holder with any bank doing business in Orange County, California, and may be disbursed to any other general escrow account or accounts. All disbursements shall be made by Escrow Holder's check or wire transfer. 9.3 Proration of Real Property Taxes; Rents. All nondelinquent general and special real property taxes applicable to the Property shall be prorated to the Close of Escrow on the basis of a thirty (30) day month and a three hundred sixty day (360) year. In the event that property taxes are assessed on a parcel of real property which includes land other than the Property, such proration shall include only taxes attributable to the Property, calculated in terms of total gross square feet of land assessed pursuant to the tax statement versus total gross square footage of the Property. Any supplemental tax bills received after Close of Escrow shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and by City, to the extent they relate to a period after Close of Escrow. If a supplemental tax bill covers a period commencing before and continuing after Close of Escrow, the Party named in the bill will pay the tax and the other Party shall reimburse the first Party its pro rata share of the portion of such supplemental tax bill that pertains to the Property within thirty (30) calendar days after receipt of a copy of the tax bill and evidence of the second Party's payment of same. The provisions of this Agreement for Purchase and Sale of Real Property and Escrow instructions Page 14 14-21 Section 9.3 shall survive Close of Escrow. If either Party fails to pay its pro rata share of taxes by the times herein provided, interest shall accrue on all unpaid amounts from when owing until paid at five percent (5%) over the Federal Discount Rate quoted by the Federal Reserve Bank of San Francisco on the 25th day of the month preceding the date interest commences to accrue. Rents of tenants under Leases, if any, shall be prorated to the Closing Date based on rents actually collected. Any such rents collected after the Closing Date by City which are attributable to the period prior to the Closing Date shall be paid to Seller upon collection. Rents collected after the Ciosing Date from tenants whose rent was delinquent at Closing and/or constituting reimbursements for operating expenses paid by Seller shall be deemed to first apply to costs of collecting such rents, second to the rental period in which closing occurred, third to rents which accrued after the Closing and fourth to rents accruing prior to the Closing Date. City shall have no obligation to commence litigation or to collect rents or to terminate the tenant's right to occupancy based upon tenant's failure to pay rentals which were delinquent at Closing and/or such reimbursements; however, City shall use reasonable efforts to collect such delinquent rents and shall reasonably and in good faith cooperate with Seller's attempts to collect such rents at no cost or expense to City. 9.4 Payment of Costs. Seller shall pay charges for drawing the Grant Deed, the entire title insurance premium for the CLTA Title Policy, and one-half (1/2) of the escrow fee. City shall pay charges for recording the Grant Deed, any additional premium or endorsements for ALTA coverage, and one-half (1/2) of the escrow fee. All other costs of Escrow not otherwise specifically allocated by this Agreement (including rent) shall be apportioned between the Parties in a manner consistent with the custom and usage of Escrow Holder, and shall be calculated as of the Closing Date. This transaction is exempt from payment of documentary transfer taxes. Seller and City each shall pay its respective attorney's fees. 9.5 Termination and Cancellation of Escrow; Remedies. Time is of the essence of this Agreement. If Close of Escrow fails to occur within the Closing Period, then Escrow shall terminate automatically without further action by Escrow Holder or any Party. Upon such termination, Escrow Holder is hereby instructed, without further notice or instructions from either Party to (i) disburse the Deposit and any interest earned on the Deposit, and all other funds then in Escrow, if any, to City if Closing did not occur because of Seller's uncured default or nonperformance or to Seller if Closing did not occur because of City's uncured default or nonperformance; and (ii) return all documents deposited into Escrow, if any, to the Party that deposited the same with Escrow Holder. Cancellation of Escrow, as provided herein, and return of such funds and documents shall be without prejudice to whatever legal rights City or Seller may have against each other arising from the Escrow or this Agreement. Should City terminate Escrow, City shall be responsible for all escrow fees incurred. 9.6 Information Report. The "Reporting Person" within the meaning of Treasury Regulation Section 1.6045-4(e)(5) with respect to the transactions contemplated by this Agreement shall be Escrow Holder. It is agreed that Escrow Holder is an eligible person under Section 1.6045-4(e)(5)(ii) of said Regulations. Escrow Holder hereby agrees to be Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 15 14-22 responsible for complying with the reporting and other requirements of Internal Revenue Code Section 6045(e) and the income tax regulations promulgated thereunder. Pursuant to said regulations, the address for the transferor and transferee are as set forth for Seller and City below, and the identifying information regarding the real estate transferred is the legal description for the Property set forth herein. Escrow Holder agrees to file the form required by said regulations between the end of the calendar year in which the Close of Escrow occurs and February 28 of the following calendar year. City and Seller agree (i) to cooperate with Escrow Holder and with each other in completing any report and/or other information required to be delivered to the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction contemplated by this Agreement, including without limitation, Internal Revenue Service Form 1099-S as such may be hereinafter modified or amended by the Internal Revenue Service, or as may be required pursuant to any regulation now or hereinafter promulgated by the Treasury Department with respect thereto; (ii) that City and Seller, their respective employees and attorneys, and Escrow Holder and its employees may disclose to the Internal Revenue Service, any information regarding this Agreement or the transaction contemplated herein as such Party reasonably deems to be required to be disclosed to the Internal Revenue Service by such Party pursuant to Internal Revenue Code Section 6045(e); (iii) that neither City nor Seller shall seek to hold any such Party liable for the disclosure to the Internal Revenue Service of any such information; and (iv) to retain this Agreement for at least four (4) years following the close of the calendar year in which the Close of Escrow occurs. 10. REPRESENTATIONS AND WARRANTIES. 10.1. Representations and Warranties. Seller hereby makes the following representations and warranties to City, each of which (i) is material and relied upon by City in making its determination to enter into this Agreement; and (ii) is true in all material respects as of the date hereof and shall be true in all material respects on the date of Close of Escrow on the Property (except to the extent any such representation and warranty expressly relates to an earlier date); and (iii) is subject to disclosures by Seller and provided in writing to the City, contained in the Due Diligence Items transmitted to City pursuant to the documents outlined in Exhibit G, and matters of public record: (a) Seller has received no notice or has no actual knowledge or constructive knowledge as of the Agreement Date that any governmental authority or any employee or agent thereof considers any construction of the proposed improvements on the Property or the proposed operation, use or ownership of the Property to violate or have violated any ordinance, rule, law, regulation or order of any government or agency, body or subdivision thereof, (including, without limitation, environmental laws), or that any investigation has been commenced or is contemplated respecting such possible violations. (b) To the best of Seller's actual knowledge or constructive knowledge as of the Agreement Date, there are no pending or threatened litigation, allegations, lawsuits or claims, whether for personal injury, property damage, Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 16 14-23 landlord -tenant disputes, property taxes, contractual disputes or otherwise, which do or may affect the Property or the operation or value thereof, and there are no actions or proceedings pending or, to the best of Seller's actual knowledge or constructive knowledge as of the Agreement Date, threatened against Seller before any court or administrative agency in any way connected with the Property and neither the entering into of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction or decree issued against or imposed upon it. There is no action, suit, proceeding or investigation pending or threatened against Seller which would become a cloud on City's title to and have a material adverse impact upon the Property or any portion thereof or which questions the validity or enforceability of the transaction contemplated by this Agreement or any action taken pursuant hereto in any court or before or by any federal, district, county, or municipal agency, entity, department, commission, board, bureau, agency or other governmental instrumentality. (c) To the best of Seller's actual knowledge or constructive knowledge as of the Agreement Date, there are no contracts, leases, claims or rights affecting the Property and no agreements entered into by or under Seller shall survive the Close of Escrow that would be binding on the City or adversely affect City's rights with respect to the Property except as heretofore disclosed in writing by Seller to City or disclosed in the Preliminary Title Report. (d) Seller has the unimpeded power and authority to execute, deliver and perform this Agreement, the Seller's obligations under this Agreement, and the documents executed and delivered by Seller pursuant hereto. (e) Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended. (f) This Agreement is the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. (g) To the best of Seller's actual knowledge or constructive knowledge as of the Agreement Date, there is not present in, on, or under the Property and Seller has not used, stored or disposed of, on, under, or about the property or transported to or from the Property any "Hazardous Materials", which shall mean and include any hazardous substance, pollutant, contaminant, material, waste, by- product or constituent which is or becomes regulated by any local government authority, the State of California or the United States Government, including, without limitation, any substance, material, waste, or by-product regulated by any governmental laws. To Seller's actual knowledge, but without duty of investigation, Seller, as of the Effective Date, is not required by any applicable laws and/or governmental regulations to take any action to remediate any environmental condition affecting the Property. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 17 14-24 For purposes of this Section 10.1 and the Seller's obligation to notify the City of the representations and warranties as outlined in this Agreement, a breach of such shall be considered material when the associated cost, loss, expense, liability, and/or obligation is equivalent to or in an amount of at least five thousand dollars ($5,000) or more. All representations and warranties made hereunder are in addition to any representations and warranties implied by law and in no event shall this Section 10.1 be construed to limit, diminish, or reduce any obligation of disclosure implied upon Seller by law. The representations and warranties of Seller set forth in Section 10.1 hereof shall survive Closing for a period of one year. Seller shall have no liability to City for a breach of any representation or warranty unless written notice containing a description of the specific nature of such breach shall have been given by City to Seller prior to the expiration of said one year period and an action shall have been commenced by City against Seller within sixty (60) calendar days following the expiration of such one year period. 10.2 Disclaimer of Representations and Warranties. City acknowledges that as of Close of Escrow it will have had an adequate opportunity to inspect the Property and to investigate its physical characteristics and conditions. Upon the Close of Escrow, City shall be deemed to have waived any and all objections to the physical characteristics and conditions of the Property which would be disclosed by a reasonable and diligent inspection subject to City's right to rely upon Seller's express representations and warranties set forth in this Agreement and/or the other documents signed and delivered by Seller hereunder. City acknowledges that, except as specifically provided herein, neither Seller nor any of its employees, agents, or representatives has made any representations, warranties or agreements to or with City on behalf of Seller as to any matters concerning the Property, the present use thereof, or the suitability of City's intended use of the Property. The foregoing disclaimer includes, without limitation, topography, climate, air, water rights, utilities, present and future zoning, soil, subsoil, the acreage of the Property or square footage of buildings located thereon, the purpose to which the Property is suited, drainage, and access to public roads. City further acknowledges and agrees that the Property is to be purchased, conveyed, and accepted by City in its present condition, "AS -IS," and that no patent or latent physical condition of the Property, whether or not known or discovered, shall affect the rights of either Party hereto. City has investigated and has knowledge of operative or imposed governmental laws and regulations (including, but not limited to, zoning, environmental, including specifically the regulations of the Environmental Protection Agency, and land use laws and regulations) to which the Property may be subject, and is acquiring the Property on the basis of its review and determination of the application and effect of such laws and regulations. City has neither received nor relied upon any representations concerning such laws and regulations made by Seller, Seller's employees, agents, or any other person acting on behalf of Seller. Any agreements, warranties or representations not expressly contained in this Agreement shall in no way bind Seller. Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 18 14-25 10.3. Changed Circumstances. If Seller becomes aware of any fact or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by Seller under this Agreement, whether as of the date given or any time thereafter until the Close of Escrow and whether or not such representation or warranty was based upon Seller's knowledge and/or belief as of a certain date, Seller will give immediate written notice of such changed fact or circumstance to City, but such notice shall not release Seller of its liabilities or obligations with respect thereto. Seller shall issue a certificate as of the Close of Escrow stating that all the representations and warranties contained in Section 10.1 are true and correct as of said date, or setting forth in detail which of such matters are not true and correct. 10.4. City represents and warrants to Seller as of the Effective Date as follows: (a) California Constitution Article 11, Section 5, and Article 2 of the Newport Beach Charter authorize the City to execute, deliver and perform this Agreement. (b) Subject to City Council approval of this Agreement and compliance with applicable local, state, and federal laws, this Agreement is the legal, valid and binding obligation of City, enforceable against City in accordance with its terms. 11. INDEMNITY BY SELLER AND CITY. 11.1. Seller shall hold harmless, indemnify and defend City, and the Property from and against (i) any and all obligations, liabilities, claims, liens or encumbrances to the extent the same are within the scope of coverage under any title policy issued for the Property, whether direct, contingent or consequential, no matter how arising and in any way related to the Property and arising or accruing on or before the Effective Date; (ii) any and all obligations, liabilities, claims, liens or encumbrances (including those, if any, reflected by the Preliminary Title Report unless otherwise waived or approved by City pursuant to Section 7, above), whether or not covered under any title policy and whether the same are direct, contingent or consequential and no matter how arising and in any way related to the Property and arising or accruing from or after Seller's acquisition of the Property until the Effective Date, or in any way related to or arising from any act, conduct, omission, contract or commitment of Seller, including, without limitation, any contract disclosed pursuant to Section 10.1, above, which occurred or was entered into at any time or times on or before the date of the Close of Escrow, which in any way relates to the Property, including without limitation, any commitment or obligation of Seller, contractual or otherwise, to any third party, any damage to the Property, or injury to or death of any person, employees or agents of Seller, except for obligations, liabilities, claims, liens and encumbrances disclosed herein or which City specifically agrees by the terms of this Agreement to assume or take subject to, (iii) any loss or damage to City resulting from any material inaccuracy or material breach of any representation or warranty of Seiler or resulting from any breach or default by Seller under this Agreement, or any other agreements relating to this transaction; and (iv) all costs and expenses, Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 19 14-26 including attorneys' fees, relating to any actions, suits or judgments incident to any of the foregoing, all of which are collectively referred to as the "Indemnification Claims." 11.2. Asa condition to the Seller's obligation to provide indemnification under this Section 11, City will give written notice to Seller of any Indemnification Claim actually brought stating in reasonable detail the basis for which indemnification is being sought hereunder as soon as reasonably possible after City's knowledge thereof ("Indemnification Notice"); provided, however, City's failure to provide such Indemnification Notice to Seller will not relieve Seiler of or from any of its obligations hereunder unless and only to the extent that Seller suffers prejudice as a result of such failure. 11.3. Should Seller fail to discharge or undertake to defend City against an Indemnification Claim where City provides Indemnification Notice pursuant to this Section 11, then City may settle such Indemnification Claim and Seller's liability to City shall be conclusively established by such settlement, the amount of such liability to include both the settlement consideration and the reasonable expenses, including attorney's fees, incurred by City in effecting such settlement. Seller shall otherwise have the right to control and direct the investigation, preparation, defense, trial and settlement of each such Indemnification Claim and City shall reasonably cooperate in the defense of such claim and shall furnish such records, information and testimony and attend to such proceedings as may be reasonably requested in connection therewith, provided Seller has received City's prior written consent, which consent shall not be unreasonably withheld or delayed. Seller shall make no admission or settlement of any such Indemnification Claim which would give rise to liability on the part of City without its prior written consent, which consent shall not be unreasonably withheld or delayed. 12. SETTLEMENT OF CLAIMS. 12.1 Release of Claims by Seller. In exchange for the promises contained in this Agreement, and except as to the obligations provided for in this Agreement, Seller hereby waives, releases and forever discharges, and agrees to the extent permitted by law that it will not in any manner institute, prosecute or pursue, any and all complaints, charges, claims for relief, demands, damages, suits, actions or causes of action, of any kind, whether in law or in equity, which it asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state or local, or on any grounds whatsoever, against the City and/or any of its current or former officers, council members, agents, representatives, employees, successors and assigns with respect to any event, matter, claim, damage or injury, of any kind related to the Property as of the Effective Date and/or the Closing Date. 12.2 Release of Claims by City. In exchange for the promises contained in this Agreement, and except as to the obligations, representations, and warranties expressly made by Seller contained in this Agreement, and/or in the other documents, instruments, and agreements signed and delivered by Seller in connection with the transaction in this Agreement, and as otherwise expressly set forth herein that survive the Close of Escrow, Agreement for Purchase and Sale of Real Property and Escrow lnstructions Page 20 14-27 effective upon Close of Escrow, City hereby waives, releases and forever discharges, and agrees to the extent permitted by law that it will not in any manner institute, prosecute or pursue, any and all complaints, charges, claims for relief, demands, damages, suits, actions or causes of action, of any kind, whether in law or in equity, which it asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state or local, or on any grounds whatsoever, against Seller and/or any of its or their current or former owners, trusts, trustees, officers, directors, shareholders, affiliates, agents, representatives, employees, attorneys, successors, predecessors, insurers, and assigns with respect to any event, matter, claim, damage or injury of any kind related to the Property as of the Effective Date and/or the Closing Date. 12.3 Waiver of Unknown Claims. With respect to the subject matter of this Agreement, including, but not limited to the Property, it is agreed and understood that the releases being provided by each of the Parties above apply to all injuries and damages, whether now known or unknown, and whether now existing or which may result in the future due to the actions or omissions of the Parties on or before the Effective Date. With respect to the subject matter of this Agreement, the Parties acknowledge that they have each been fully advised of and understand the provisions of Section 1542 of the California Civil Code which reads: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." In further consideration of the promises and payments pursuant to this Agreement, each Party agrees to, and does hereby, waive and relinquish all rights afforded to it under California Civil Code Section 1542, or any similar law of any State or territory of the United States or other jurisdiction with respect to the matters of this Agreement. Notwithstanding the above, nothing in this Agreement shall be deemed to waive or release either Party as to (i) any of its obligations or rights under this Agreement and/or any other documents, instruments, or agreements signed and delivered by City or Seller pursuant to the terms of this Agreement, or (ii) any claims arising from such Party's own actual or alleged fraud, gross negligence, or wrongful conduct of the other Party, or (iii) claims for personal injury or property damage occurring on the Property during that Party's ownership of the Property, or claims against a Party based on a breach of contract by that Party concerning the Property and/or its own property and occurring during such Party's ownership of the Property. The foregoing provisions shall survive the Close of Escrow. SELLER'S INITIALS CITY'S INITIALS Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 21 14-28 effective upon Close of Escrow, City hereby waives, releases and forever discharges, and agrees to the extent permitted by law that it will not in any manner institute, prosecute or pursue, any and all complaints, charges, claims for relief, demands, damages, suits, actions or causes of action, of any kind, whether in law or in equity, which it asserts or could assert, at common law or under any statute, rule, regulation, order or law, whether federal, state or local, or on any grounds whatsoever, against Seller and/or any of its or their current or former owners, trusts, trustees, officers, directors, shareholders, affiliates, agents, representatives, employees, attorneys, successors, predecessors, insurers, and assigns with respect to any event, matter, claim, damage or injury of any kind related to the Property as of the Effective Date and/or the Closing Date. 12.3 Waiver of Unknown Claims. With respect to the subject matter of this Agreement, including, but not limited to the Property, it is agreed and understood that the releases being provided by each of the Parties above apply to all injuries and damages, whether now known or unknown, and whether now existing or which may result in the future due to the actions or omissions of the Parties on or before the Effective Date. With respect to the subject matter of this Agreement, the Parties acknowledge that they have each been fully advised of and understand the provisions of Section 1542 of the California Civil Code which reads: "A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party." In further consideration of the promises and payments pursuant to this Agreement, each Party agrees to, and does hereby, waive and relinquish all rights afforded to it under Caiifornia Civil Code Section 1542, or any similar law of any State or territory of the United States or other jurisdiction with respect to the matters of this Agreement. Notwithstanding the above, nothing in this Agreement shall be deemed to waive or release either Party as to (i) any of its obligations or rights under this Agreement and/or any other documents, instruments, or agreements signed and delivered by City or Selier pursuant to the terms of this Agreement, or (H) any claims arising from such Party's own actual or alleged fraud, gross negligence, or wrongful conduct of the other Party, or (iii) claims far personal injury or property damage occurring on the Property during that Party's ownership of the Property, or claims against a Party based on a breach of contract by that Party concerning the Property and/or its own property and occurring during such Party's ownership of the Property. The foregoing provisions shall survive the Close of Escrow, kLl���.� SELLER' INI ALS CITY'S INITIALS Agreement for Purchase and Sale of Rea Property and Escrow Instructions Page 21 14-29 13. DAMAGE DESTRUCTION AND CONDEMNATION. 13.1. Risk of Physical Loss. Risk of physical loss to the Property shall be borne by Seller prior to the Close of Escrow and by City thereafter. In the event the Property shall be damaged by fire, flood, earthquake or other casualty, and the estimated cost to repair same exceeds ONE MILLION DOLLARS and 00/100 ($1,000,000.00), City may, at its option, elect not to acquire the Property. If City does not so elect or the estimated cost to repair the damage is less than ONE MILLION DOLLARS and 00/100 ($1,000,000.00), City shall complete the acquisition of the Property, and Seller shall assign to City the interest of Seller in all insurance proceeds relating to such damage. Seller shall maintain property insurance against all risks of loss (including earthquake). In the event that such damage occurs and City elects not to purchase the Property as above provided, then this Agreement shall be terminated and City shall be entitled to the return of all funds and documents (including the entirety of the Deposit) that City deposited into the Escrow hereunder. 13.2. Condemnation. In the event that, prior to the Close of Escrow, any governmental entity (other than City or any agencies that City controls) shall commence any actions of eminent domain or similar type proceedings to take any materiai portion of the Property, or if any other governmental entity (other than City or any agencies that City controls) shall commence any efforts toward a conveyance in lieu of a condemnation action as to a material portion of the Property, City shall have the option either to (i) elect not to acquire the Property, or (ii) complete the acquisition of the Property, in which case City shall be entitled to all the proceeds of such taking. In the event that City elects not to purchase the Property as above provided, then this Agreement shall be terminated and City shall be entitled to the return of all funds and documents (including the entirety of the Deposit) that City deposited into the Escrow hereunder. In the event that either (x) a taking is not for a material portion of the Property or (y) City elects to purchase the Property as above provided, then City shall complete the acquisition of the Property, in which case City shall be entitled to all the proceeds of such taking. 14. RESERVED. 15. POSSESSION. Possession of the Property shali be delivered to City as of Close of Escrow. In the event any personal property remains on the Property following the Close of Escrow, it shall automatically become the property of City. 16. ENVIRONMENTAL CONDITION. To Seller's actual or constructive knowledge as defined in Section 10.1(g) above, but without duty of investigation, Seller, as of the Effective Date, is not required by any applicable laws and governmental regulations to take any action to remediate any environmental condition affecting the Property. 17. ASSIGNMENT. City shall not have the right to assign this Agreement or any interest or right hereunder or under the Escrow or to nominate another party to take title to the Property without the prior written consent of Seller, which Seller may withhold in Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 22 14-30 Seller's sole discretion. In no event shall City be released of liability in the event of an assignment or nomination. 18. RESERVED. 19. COOPERATION. City and Seller agree to cooperate with one another, at no cost or expense to the cooperating Party, in satisfying the conditions precedent to Close of Escrow. City shall be responsible for proceeding with diligence and in good faith to satisfy the conditions to City's performance set forth in Section 8.1 and Seller shall be responsible for proceeding with diligence and in good faith to satisfy the conditions to Seller's performance set forth in Section 8.2. 20. QUALIFICATION; AUTHORITY. Each Party represents and warrants that it is duly formed, is authorized to do business in the state in which the Property is located and that it has been duly authorized to enter into and perform this Agreement. 21. NO ATTORNEYS' FEES. In any action between the Parties hereto seeking enforcement of any of the terms and provisions of this Agreement or the Escrow, or in connection with the Property, the prevailing Party in such action shall not be entitled to have and to recover from the other Party its reasonable attorneys' fees and other expenses and costs in connection with such action or proceeding. 22. INTERPRETATION; GOVERNING LAW. This Agreement shall be construed according to its fair meaning and as if prepared by both Parties hereto. This Agreement shall be construed in accordance with the laws of the State of California in effect on the Effective Date of this Agreement. Titles and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 23. NO WAIVER. No delay or omission by either Party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other Party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either Party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other Party shall not be construed as a waiver of any contemporaneous or succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 24. MODIFICATIONS. Any alteration, change or modification of or to this Agreement, or any time limits contained herein, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each Party hereto. 25. SEVERABILITY. If any term, provision, condition or covenant of this Agreement or the application thereof to any Party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement, or the application of Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 23 14-31 such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 26. COVENANTS TO SURVIVE ESCROW. The covenants and agreements contained herein shall survive the Close of Escrow and, subject to the limitations on assignment contained in Section 17 above, shall be binding upon and inure to the benefit of the Parties hereto and their representatives, heirs, successors and assigns. Without limitation of the foregoing, all indemnity obligations set forth herein shall survive the Close of Escrow or termination of this Agreement with respect to the claims that have accrued thereunder prior to such Close of Escrow or termination, as applicable. 27. NO WITHHOLDING BECAUSE NON -FOREIGN SELLER. Seller represents and warrants to City that Seller is not, and as of the Close of Escrow will not be, a foreign person within the meaning of Internal Revenue Code Section 1445 and that it will deliver to City on or before the Close of Escrow the Non -Foreign Affidavit as described hereinabove, pursuant to internal Revenue Code Section 1445(b)(2) and the Regulations promulgated thereunder. 28. TIME iS OF THE ESSENCE. Time is hereby expressly made of the essence of this Agreement. 29. EXECUTION IN COUNTERPART. This Agreement may be executed in several counterparts, and all so executed shall constitute one (1) agreement binding on all Parties hereto, notwithstanding that all Parties are not signatories to the original or the same counterpart. 30. NOTICES. Any notice which either Party may desire to give to the other Party or to the Escrow Holder must be in writing and shall be effective upon delivery if sent via overnight mail with tracking; upon delivery, if delivered by confirmed facsimile or email (with a backup sent by first class mail); when personally delivered, if sent by messenger service; or when delivered if sent postage prepaid by registered or certified mail, return receipt requested; three (3) business days after deposit in the United States mail, registered, certified, postage fully prepaid; and in each case addressed to the respective Parties as set forth below or to such other address and to such other persons as the Parties may hereafter designate by written notice to the other Party hereto and Escrow Holder: To Seller: Bobby and Linda Hanada 1134 N. Lombard Drive Anaheim, CA 92801 With Copies to: Marcus & Millichap Attn: Joseph R. Berkson 19800 MacArthur Blvd, Suite 150 Agreement for Purchase and Sale of Real Property and Escrow instructions Page 24 14-32 Irvine, CA 92612 To City: City of Newport Beach Attn. Real Property Administrator 100 Civic Center Drive Newport Beach, CA 92660 With Copies to: City of Newport Beach Attn: City Attorney 100 Civic Center Drive Newport Beach, CA 92660 31. NO BROKERS. City represents to Seller that licensed California real estate brokers Lauren Wooding Whitlinger (License No. 01943711) and Seimone Jurjis (License No. 01876897) employed by the City, have been involved with the transaction provided in this Agreement. However, no broker commissions shall be paid to City or the aforementioned individuals. Seller represents and warrants to City that it has used Marcus & Millichap ("Seller's Broker") in connection with this transaction, and that Seller's Broker is entitled to payment from the Seller's proceeds from this transaction in the amount of One Hundred Thirty Thousand Dollars and No1100 ($130,000.00) in full satisfaction of all brokerage commissions or finder's fees and claims payable to Seller's Broker in connection with the sale of the Property. City and Seller agree to indemnify one another against any claims, suits, damages, and costs incurred or arising or resulting from the claims of any person for any commission, fee, or other remuneration that such person claims is owed in respect with this transaction pursuant to a written agreement made with said claimant. Buyer and Seller do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder, or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto. 32. CONTINGENCY. It is understood and agreed between the Parties hereto that the completion of this purchase and sale transaction provided for herein, and Close of Escrow created hereby, is contingent upon the specific acceptance and approval of City and Seller. The execution of this Agreement and the other documents required for Closing, and the delivery of same to Escrow Holder constitute said acceptance and approval. 33. CEQA. By its execution of this Agreement, the City is not committing itself or agreeing to undertake any activity requiring the subsequent exercise of discretion by the City or any department thereof, including, but not limited to, the approval of any CEQA documents, the approval of any development project or land use regulation governing the Property, or any other act or approval. The City reserves the right to exercise in good faith its discretion as to all matters which it is, by law, entitled or required to exercise its discretion, including, but not limited to, the consideration of CEQA documents, the consideration of any and all plans, permits, licenses, or regulatory approvals, or any other Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 25 14-33 acts or activities requiring the subsequent independent exercise of discretion by the City or any agency or department thereof. The City may in good faith, in its sole and absolute discretion, certify or not certify a CEQA document and approve, approve with modifications, or not approve, or consider other alternatives, including those presented in the CEQA documents. 34. ENTIRE AGREEMENT, WAIVER AND MODIFICATION. This Agreement is the entire Agreement between the Parties with respect to the subject matter of this Agreement. It supersedes all prior agreements and understanding, whether oral or written, between the Parties with respect to the matters contained in this Agreement. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or on behalf of the Party to be bound thereby. [SIGNATURES ON NEXT PAGE] Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 26 14-34 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement for Purchase and Sale of Real Property and Escrow Instructions as of the date set forth above. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron . Harp City A orney ATTEST: Leilani 1. Brown City Clerk SELLER: Bobby Hanada and Linda Hanada, husband and wife as joint tenants 2024 Date Bobby Hanada _, 2024 Date Linda Hanada CITY: CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date Grace K. Leung City Manager Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 27 14-35 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement for Purchase and Sale of Real Property and Escrow Instructions as of the date set fortis above. SELLER: Bobby Hanada and Linda Hanada, husband and wife as joint tenants 21 c-0� / -�__, 2g24 Date T APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron . Harp City A orney ATTEST: Leilani I. Brown City Clerk Babb Hanada _, 2024 Date Jcq -�l A e, a a a ` CITY: CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date Grace K. Leung City Manager Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 27 14-36 JOINDER BY ESCROW HOLDER Escrow Holder hereby acknowledges that it has received this Agreement executed by the Seller and City and accepts the obligations of and instructions for the Escrow Holder set forth herein. Escrow Holder agrees to disburse and/or handle the Deposit, the Purchase Price and all closing documents in accordance with this Agreement. Dated: 2024 Mariner's Escrow Corporation ATTACHMENTS: Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H By: _ Name: Title: [END OF SIGNATURES] Property Legal Description Property Depiction Form of Grant Deed Form of Assignment of Leases Form of Assignment of Contracts Form of Bill of Sale Due Diligence Items Form of Estoppel Certificate Agreement for Purchase and Sale of Real Property and Escrow Instructions Page 28 14-37 EXHIBIT "A" PROPERTY LEGAL DESCRIPTION The land referred to herein below in is situated in the State of California, County of Orange, City of Newport Beach, and is described as follows: Lot 18 in Block 2 of Newport Bay Tract, as per map recorded in Book 4 Page 16 of Miscellaneous Maps, in the office of the county recorder of said county. 1_1: ►stillBSIRY011l Agreement for Purchase and Sale of Real Property and Escrow Instructions Page A-1 14-38 EXHIBIT "B" PROPERTY DEPICTION 00119010-4 Agreement for Purchase and Sale of Real Property and Escrow Instructions Page B-1 14-39 NEG91S Disclaimer: N EWPORT BEACH Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of a�evvpy� Newport Beach and its employees and agents o� e 0 100 200 disclaim any and all responsibility from or relating to i any results obtained in its use. u x Feet 4/29/2024 14-40 EXHIBIT "C" FORM OF GRANT DEED RECORDING REQUESTED BY: CITY OF NEWPORT BEACH AND WHEN RECORDED MAIL TO: Attn: City Clerk City of Newport Beach 100 Civic Center Drive Newport Beach, CA 92660 ORDER: ESCROW NO.: Exempt from recording fee per Government Code §§ 6103 and 27383 (Space Above This Line For Recorder's Use Only) Parcel No: 048-082-01 GRANT DEED THE UNDERSIGNED GRANTOR(S) DECLARE(s): ❑ City of Newport Beach Documentary Transfer Tax is $0.00 a unincorporated area City Transfer Tax is $0.00 ❑computed on full value of interest or property conveyed, or ❑ full value less value of liens or encumbrances remaining at the time of sale FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Bobby Hanada and Linda Hanada, husband and wife as joint tenants ("Grantors'), hereby GRANTS in fee simple interest to the City of Newport Beach, a municipal corporation and charter city ("Grantee"), all of that certain real property located at 301 East Balboa Boulevard in the City of Newport Beach, County of Orange, State of California ("Land") as more particularly described in EXHIBIT "A" and depicted on EXHIBIT "B," which exhibits are attached hereto and incorporated herein by reference and are made a part of this Grant Deed, all of Grantor's right, title and interest in and to the rights, benefits, privileges, easements, tenements, hereditaments, and appurtenances to the extent belonging or appertaining to the Land with any and all structures, improvements and fixtures, together with equipment and personal property, if any, located on or under the Land (collectively the "Property"). This conveyance is made and accepted subject to all real property taxes and assessments that are not yet delinquent, rights of tenants, as tenants only, under unrecorded leases, all matters of record, all matters that would be reflected on an accurate survey or shown by a physical inspection of the Property, and all scheduled exceptions waived by the City to the title policy issued to City at Closing, as of the date hereof. [END OF DOCUMENT. SIGNATURES ON NEXT PAGE.] Agreement for Purchase and Sale of Real Property and Escrow Instructions Page C-1 14-41 IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of . 2024. GRANTOR: Bobby Hanada and Linda Hanada, husband and wife as joint tenants ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of I ss. On , 20 before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) Agreement for Purchase and Sale of Real Property and Escrow Instructions Page C-2 14-42 EXHIBIT "A" PROPERTY LEGAL DESCRIPTION The land referred to herein below in is situated in the State of California, County of Orange, City of Newport Beach, and is described as follows: Lot 18 in Block 2 of Newport Bay Tract, as per map recorded in Book 4 Page 16 of Miscellaneous Maps, in the office of the county recorder of said county. APN: 048-082-01 Agreement for Purchase and Saie of Real Property and Escrow Instructions Page C-3 14-43 EXHIBIT "B" PROPERTY DEPICTION Agreement for Purchase and Sale of Real Property and Escrow Instructions Page C-4 14-44 o OC Jo ¢6 Z ryIV Q4VCV G, o ` 2 ,rV - CV E pN ry � _ CP ♦� `varyCD$ �► „ Oct a r.1 NEGS Disclaimer: N E W P o R T B E A C H Every reasonable effort has been made to assure the accuracy of the data provided, however, The City of aEvuvo Newport Beach and its employees and agents o� 0 SOD 200 disclaim any and all responsibility from or relating to any results obtained in its use. c) x Feet �<rFORN�r n,00iono 14-45 CERTIFICATE OF ACCEPTANCE This CERTIFICATE OF ACCEPTANCE is to certify that the interest in real property set forth in that certain Grant Deed by and between the City of Newport Beach, a California municipal corporation and charter city, as Grantee, and Bobby Hanada and Linda Hanada, husband and wife as joint tenants as Grantor, for property located at 301 East Balboa Boulevard [APN: 048-082-011, located in the City of Newport Beach is hereby accepted on , 2024, by the undersigned officer on behalf of the City of Newport Beach pursuant to authority conferred by Resolution No. 1992-82 of the City Council adopted on July 27, 1992. The City of Newport Beach consents to the recordation of said document in the Office of the Recorder of Orange County, State of California. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date: By: Aaron C. Harp City Attorney ATTEST: Date: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation and charter city Date: Bv: Grace K. Leung City Manager RECOMMENDED FOR ACCEPTANCE: COMMUNITY DEVELOPMENT DEPARTMENT Date: Seimone Jurjis Assistant City Manager/ Community Development Director Agreement for Purchase and Safe of Real Property and Escrow Instructions Page C-5 14-46 ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California ) County of ORANGE ) On before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity(ies), and that by his signature on the instrument the person, or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Agreement for Purchase and Sale of Real Property and Escrow Instructions Page C-6 14-47 EXHIBIT "D" FORM OF ASSIGNMENT OF LEASES ASSIGNMENT OF LEASES THIS ASSIGNMENT OF LEASES ("Assignment") is made this day of 2024 ("Assignment Date") by and between Bobby Hanada and Linda Hanada, husband and wife as joint tenants (" Assignor"), and City of Newport Beach, a California municipal corporation and charter city ("Assignee"). Assignor and Assignee are sometimes hereinafter individually referred to as a "Party" and collectively as the "Parties" to this Assignment. WITNESSETH: A. Assignor and Assignee entered into that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions, dated as of , 2024 (as amended, collectively, the "Agreement"), respecting the sale of the Property (as defined in the Agreement). Concurrently with the delivery of this Assignment, Assignor has conveyed to Assignee all of Assignor's interest in the real Property. Capitalized terms used herein and not separately defined have the meanings ascribed to them in the Agreement. B. Under the Agreement, Assignor is obligated to assign to Assignee all of Assignor's right, title and interest in and to the Leases for which Assignee has agreed to assume, which are listed on Exhibit "A" attached hereto. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Assignment of Contracts. Effective as of the Assignment Date, Assignor hereby assigns, sells, transfers, conveys, sets over and delivers unto Assignee all of Assignor's estate, right, title and interest in and to the Leases and Assignee hereby accepts such assignment. Notwithstanding the foregoing or anything to the contrary contained herein, Assignor shall retain all rights, title and interest in and to all rentals and other amounts payable by tenants under the Leases, and other rights and claims against any parties under the Leases, for the period of time prior to the Assignment Date. 2. Assumption. Assignee hereby accepts the foregoing assignment of the Leases included on Exhibit "A" and assumes the Leases and agrees to timely keep, perform and discharge all of the terms, covenants and conditions imposed upon Assignor as landlord under the Leases accruing or arising on or after the Assignment Date. 3. Assignment Date. The Assignment Date of this Assignment shall be the date that Assignee acquires the Property, as evidenced by the recordation of a grant deed to Assignee. Agreement for Purchase and Sale of Real Property and Escrow instructions Page D-1 14-48 4. No Attorney's Fees. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other party arising out of this Assignment, then in that event the prevailing party shall not be entitled to have and recover of and from the other party any costs and expenses of the action or suit, nor attorneys' fees. 5. Counterparts. This Assignment may be executed in counterparts (including facsimile and electronic copies), each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. 6. Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of all the respective parties hereto. 7. Governing Law. This Assignment shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California. 8. Severability. If any terms or provisions of this Assignment is, to any extent, held to be invalid or unenforceable, the remainder of this Assignment will not be affected, and each term or provision of this Assignment will be valid and be enforced to the fullest extent permitted by law. 9. The provisions of Sections 10.2 of the Agreement are incorporated by reference into this Assignment as if fully set forth herein. [SIGNATURES 4N NEXT PAGE] Agreement for Purchase and Sale of Real Property and Escrow Instructions Page D-2 14-49 IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of the day and year hereinabove written. ASSIGNOR: Bobby Hanada and Linda Hanada, husband and wife as joint tenants By: Name: Title: By: Name: Title: ASSIGNEE: CITY OF NEWPORT BEACH, a California municipal corporation and charter city By: Name: Title: ATTEST: Leilani I. Brown, City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp, City Attorney Agreement for Purchase and Sale of Real Property and Escrow Instructions Page D-3 14-50 Exhibit "A" LIST OF ASSIGNED LEASES Agreement for Purchase and Sale of Real Property and Escrow Instructions Page D-4 14-51 EXHIBIT "E" FORM OF ASSIGNMENT OF CONTRACTS ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT This Assignment of Contracts and Assumption Agreement (the "Assignment") is made and entered into as of this day of , 2024 ("Assignment Date"), by and between Bobby Hanada and Linda Hanada, husband and wife as joint tenants ("Assig_n_or_"), and City of Newport Beach, a California municipal corporation and charter city ("Assignee"), with reference to the following facts. Assignor and Assignee are sometimes hereinafter individually referred to as a "Party" and collectively as the "Parties" to this Assignment. RECITALS: A. Assignor and Assignee are parties to that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions, made and entered into as of , 2024 (the "Purchase Agreement"), pursuant to which Assignor agreed to sell to Assignee, and Assignee agreed to purchase from Assignor, the Property (as defined in the Purchase Agreement). Concurrently with the delivery of this Assignment, Assignor has conveyed to Assignee all of Assignor's interest in the real Property. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement. B. Assignee has acquired fee title to the Real Property from Assignor on the Assignment Date. Assignor now desires to assign and transfer to Assignee all of Assignor's rights and interests in, to and under the Approved Contracts, as hereinafter defined. NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 1. Assignment and Assumption. Effective as of the Assignment Date, Assignor hereby grants, transfers, conveys, assigns and delegates to Assignee all of its rights, obligations and interests in, to and under the contracts that are set forth in Schedule 1 attached hereto and made a part hereof (the "Approved Contracts"); provided, however, such assignment, transfer and sale shall not include any rights or claims arising prior to the Assignment Date that Assignor may have against any party to the Approved Contracts. Assignee hereby accepts such assignment and delegation by Assignor and agrees to fully perform and hereby assumes all the obligations of Assignor under the Approved Contracts first arising from and after the Assignment Date. 2, No Warranties. Assignee does hereby covenant with Assignor, and represents and warrants to Assignor, that Assignor is transferring each of the Approved Contracts to Assignee (to the extent the terms of any of the Approved Contracts do not limit or restrict such right) without any warranty of any kind or nature. This Assignment shall not be construed as a representation orwarranty by Assignor as to the transferability Agreement for Purchase and Sale of Real Property and Escrow instructions Page E-1 14-52 or enforceability of the Approved Contracts, and Assignor shall have no liability to Assignee in the event that any or all of the Approved Contracts (a) are not transferable to Assignee or (b) are canceled or terminated by reason of this Assignment or any acts of Assignee. 3. Dispute Costs. In the event of any dispute between Assignor and Assignee arising out of the obligations of the parties under this Assignment or concerning the meaning or interpretation of any provision contained herein, each party shall pay its own costs and expenses of such dispute, including, without limitation, its own attorneys' fees and costs. 4. Counterparts. This Assignment may be executed in counterparts (including facsimile and electronic copies), each of which shall be deemed an original, and all of which shall taken together be deemed one document. 5. Survival. This Assignment and the provisions hereof shall inure to the benefit of and be binding upon the parties to this Assignment and their respective successors, heirs and permitted assigns. 6. No Third -Party Beneficiaries. Except as otherwise expressly set forth herein, Assignor and Assignee do not intend, and this Assignment shall not be construed, to create a third -party beneficiary status or interest in, nor give any third -party beneficiary rights or remedies to, any other person or entity not a party to this Assignment. 7. Governing Law. This Assignment shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California. 8. Severability. If any terms or provisions of this Assignment is, to any extent, held to be invalid or unenforceable, the remainder of this Assignment will not be affected, and each term or provision of this Assignment will be valid and be enforced to the fullest extent permitted by law. 9. Limitation. The provisions of Sections 10.2 of the Purchase Agreement are incorporated by reference into this Assignment as if fully set forth herein. (SIGNATURES ON NEXT PAGE] Agreement for Purchase and Sale of Real Property and Escrow Instructions Page E-2 14-53 IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the Assignment Date. ASSIGNOR: Bobby Hanada and Linda Hanada, husband and wife as joint tenants By: Name: Title: By: Name: Title: ASSIGNEE: CITY OF NEWPORT BEACH, a California municipal corporation and charter city By: Name: Title: ATTEST: Leilani I. Brown, City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp, City Attorney Agreement for Purchase and Sale of Real Property and Escrow Instructions Page E-3 14-54 SCHEDULE 1 TO ASSIGNMENT OF CONTRACTS LIST OF APPROVED CONTRACTS Agreement for Purchase and Sale of Real Property and Escrow Instructions Page E-4 14-55 EXHIBIT "F" FORM OF BILL OF SALE BILL OF SALE For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Bobby Hanada and Linda Hanada, husband and wife as joint tenants ("Seller"), does hereby GRANT, SELL, CONVEY, TRANSFER AND DELIVER to CITY OF NEWPORT BEACH, a California municipal corporation and charter city (`Buyer"), without any warranty of any kind, all of Seller's rights, title and interest in and to the personal property described on Exhibit "A" attached hereto and incorporated herein (the "Personal Property") owned by Seller and used exclusively in the operation of the real property at 301 E. Balboa Boulevard, located in the City of Newport Beach, County of Orange, State of California; provided, however, such transfer, assignment and sale shall not include any rights or claims arising prior to the date hereof which Seller may have against any person with respect to such personal property. From and after the date of this Bill of Sale, it is intended by the parties that Buyer and its successors and assigns shall have the right to use, have, hold and own the Personal Property forever. This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, and all of which shall taken together be deemed one document. Seller and Buyer agree that the delivery of an executed copy of this Bill of Sale by electronic mail shall be legal and binding and shall have the same full force and effect as if an original executed copy of this Bill of Sale had been delivered. Seller does hereby covenant to Buyer that Seller is the lawful owner of such Personal Property, that such Personal Property is owned and not leased by Seller and that Seller has good right to sell the same, and that such Personal Property is free of liens and that Seller will warrant and defend the title thereto unto Buyer, its successors and assigns, against the claims and demands thereon. Buyer hereby acknowledges, covenants, represents and warrants that Seller has made absolutely no representations or warranties (express, implied, or statutory) concerning the Personal Property including, without limitation, any warranty of merchantability or condition, or warranty of fitness for a particular purpose. This Assignment shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California. The provisions of Sections 10.2 of that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions, made and entered into as of 20247 by and between Seller and Buyer are incorporated by reference into this Bill of Sale as if fully set forth herein. (SIGNATURES ON NEXT PAGE] Agreement for Purchase and Sale of Real Property and Escrow Instructions Page F-1 14-56 IN WITNESS WHEREOF, this Bill of Sale has been executed as of this day of , 2024. SELLER: Bobby Hanada and Linda Hanada, husband and wife as joint tenants By: Name: Title: By: Name: Title: CITY OF NEWPORT BEACH, a California municipal corporation and charter city By: Name: Title: ATTEST: Leilani 1. Brown, City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C. Harp, City Attorney Attachment: Exhibit "A" — List of Personal Property Agreement for Purchase and Sale of Real Property and Escrow Instructions Page F-2 14-57 EXHIBIT A TO BILL OF SALE LIST OF PERSONAL PROPERTY TO BE DELIVERED TO BUYER Laundry Equipment: 1 washer and 1 dryer 5 Boogie Boards • 5 Beach chairs • 2 Hoses • 1 Trash can • Front Unit - 2 Bedroom • Stove • Wood • Car mats • Bathroom Pictures • Unit #1 • Stove • Couch • TV • Refrigerator • Unit #2 • Stove • TV mount • Beach chair • Utensil tray • A baster • Unit #3 Nothing Agreement for Purchase and Sale of Real Property and Escrow Instructions Page F-3 14-58 EXHIBIT "G" DUE DILIGENCE ITEMS DUE DILIGENCE ITEMS TO BE DELIVERED TO BUYER: • Rental Agreements: Unit #1 and Unit #3 • Rent Roll • Copies of all recent utility bills • Copy of recent trash bill • Property Insurance: most recent statement and a loss run report • Latest property tax bill • Natural Hazards Disclosure Report DUE DILIGENCE ITEMS NOT AVAILABLE TO BE DELIVERED TO BUYER: Operating statements DISCLOSURES: • Lead Paint: No constructive knowledge • Mold or other toxic environmental substances: No constructive knowledge • Pending litigation related to the property and its tenants: None pending • Code Violations: No code violations have been received by Seller to the best of Seller's knowledge • Foundation: The foundation at the front portion of the property is settling • Laundry Room: Not permitted • Electrical: May not have been permitted Agreement for Purchase and Sale of Real Property and Escrow Instructions Page G-1 14-59 EXHIBIT "H" FORM OF ESTOPPEL CERTIFICATE TENANT ESTOPPEL CERTIFICATE TO: RE: [ 1 (the "Premises") The undersigned (the "Tenant") hereby certifies to CITY OF NEWPORT BEACH, a California municipal corporation and charter city, and its successors and assigns (the "Buyer"}, Buyer's lender(s) and to , a (the "Landlord"), the following information with respect to that certain lease agreement, dated I , [list any other lease documents, including any amendments, modifications or side letters, etc.] (collectively, the "Lease"), and Tenant agrees that Landlord, Buyer and Buyer's lender may rely upon the same: 1. The Tenant is the tenant under the Lease covering the Premises. A description of the Lease, with all amendments, is attached hereto as Exhibit A. The Lease is in full force and effect and has not been assigned, modified, supplemented or amended except as shown on Exhibit A. 2. The Tenant has accepted possession and now occupies the Premises and is currently open for business. 3. The Tenant asserts no claim of default or offset or defense against the payment of rent or other charges payable by the Tenant and asserts no claim against the Landlord under the Lease in regard to the Premises. To the best of Tenant's knowledge and belief, there is no default by Landlord under the Lease. 4. All fixed base rental has been paid to the end of the current calendar month, which is , and no rent under the Lease has been paid more than one month in advance of its due date except for any security deposits referenced herein. Current monthly fixed base rental for the Premises is $ 5. The Lease term began on , and the current Lease term expires on The Lease provides for an option to renew the Lease term as follows: . The Lease contains no first right of refusal to lease or purchase, option to expand, option to terminate, or option to purchase, except as follows: Agreement for Purchase and Sale of Real Property and Escrow Instructions Page H-1 14-60 6. Landlord is presently holding a [security deposit][letter of credit] in the amount of $ 7. There are no unfinished tenant improvements required to be completed by Landlord as of the date hereof or any outstanding and unpaid tenant improvement allowances owing to Tenant as of the date hereof except: 8. The Tenant is not in default under the Lease. The Tenant is current in the payment of any taxes, utilities, common area maintenance payments, or other charges required to be paid by the undersigned. 9. The Tenant has not entered into any sublease, assignment or any other agreement transferring any of its interest in the Lease or the Premises leased by the Tenant under the Lease. 10. No actions, whether voluntary or otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state thereof. Tenant has not, at the Premises, generated, stored, handled or otherwise dealt with any hazardous or toxic waste or material, or other contaminants which are prohibited, regulated or penalized by any local, state or federal agency, authority or government unit except as expressly permitted in the Lease . 11. The Tenant recognizes and acknowledges it is executing this Tenant Estoppel Certificate with the intent that Landlord, the Buyer and Buyer's lender(s) may rely hereon. Dated: .2024 Very truly yours, a By: Its: Agreement for Purchase and Sale of Real Property and Escrow Instructions Page H-2 14-61 Attachment B Budget Amendment No. 2025-013 14-62 City of Newport Beach 13UDGET AMENDMENT 2024-25 BA#: 25-013 Department: Community Developmen ONETIME: [ Yes (—]No Requestor: Lauren Wooding Approvals ❑ CITY MANAGER'S APPROVAL ONLY '',1 A Finance Director: C/�Yw 6c� IRAr w Date 0 COUNCIL APPROVAL REQUIRED City Clerk: Date EXPLANATION FOR REQUEST: To transfer budget from the General Fund (010) to General Fund CIP (012) for the purchase of real property at 301 E Balboa Blvd. ❑ from existing budget appropriations Estimated costs include the purchase, title/escrow closing costs, due diligence, and relocation costs. Additional estimated revenues 0 from additional estimated revenues from rental of property are expected. 0 tram unappropriated fund balance REVENUES Fund # Org Object Project Description Increase or (Decrease) $ 01299 691010 INTERFUND TRANSFERS -TRANSFER IN GENERAL FUND 2,832,000.00 rl 01050505 551115 REAL PROPERTY GEN FUND - RENTAL OF PROPERTY 8,500.00 Subtotall $ 2,840,500.00 EXPENDITURES Fund # Org Object Project Description Increase or (Decrease) $ 010 01099 991012 GENERAL FUND INTERFUND TRANSFR - TRANSFER OUT CIP FUND 2,832,000.00 012 01201925 911047 25F11 FACILITIES - CAPITAL PROJECT 2,832,000.00 Subtotal I $ 5,664,000.00 FUND BALANCE Fund # Object Description Increase or (Decrease) $ 010 300000 GENERAL FUND - FUND BALANCE CONTROL (2,823,500.00) 012 300000 GENERAL FUND CAPITAL PROJECTS - FUND BALANCE CONTROL Subtotal $ (2,823,500.00) Fund Balance Change Required 14-63 Attachment C Maps 14-64 M � • r11 �' .fry , � � •r � .. ,; -N ry- a . 306 - I �. _ - ►-� � fir. _ 37pr rj + 2�p ry _ �� N � o7 Ar 3'r GCE =1 N e..4 . 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