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
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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.
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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.
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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
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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).
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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
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Attachment A
Agreement for Purchase and Sale of Real Property and Escrow Instructions
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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
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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
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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
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(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
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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
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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
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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)
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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
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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
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(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.
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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.
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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
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(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.
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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
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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
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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,
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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.
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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
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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
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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
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