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HomeMy WebLinkAbout14 - Housing Assistance Agreement with the City ManagerCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 October 13, 2009 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Attorney's Office David Hunt, City Attorney 949/644 -3131 or dhunt@newportbeachca.gov SUBJECT: Implementation of Housing Assistance Agreement with the City Manager to Share Equity ISSUE: How should the City implement the City Manager's equity- sharing housing assistance program, as provided for in Resolution 2009 -61? RECOMMENDATION: Authorize the Mayor to execute the Housing Assistance Agreement to Share Equity for the City Manager in substantially the form attached. DISCUSSION: Resolution 2009 -61 enacted the City Manager's compensation program, as well as authorizing an equity sharing agreement with the City Manager to enable him to meet the City Charter's obligation to reside in Newport Beach. Section 501 of the City Charter reads as follows: Section 501. Residence. The City Manager need not be a resident of the City at the time of his appointment, but he shall establish his residence within the City within ninety days after his appointment, unless such period is extended by the City Council, and thereafter maintain his residence within the City during his tenure of office. The equity sharing agreement (as attached) would implement the equity sharing arrangement described within Resolution 2009 -61. Generally, the terms of the equity sharing are as follows: • The City would contribute $471,250.00 towards the property's purchase. Housing Assistance Agreement October 13, 2009 Page 2 Upon sale of the property or at a point not less than twelve (12) months after the City Managers employment ends with the City, the City is entitled to 50.4% of any equity resulting from the sale of the property. The City Manager is required to meet all other obligations of the property, including taxes, utilities, and his mortgage obligations; the obligation will be memorialized in a promissory note; and A Deed of Trust in favor of City for the amount of City's Equity Contribution (Second Deed of Trust) shall be recorded in the amount of the City's equity contribution. (The agreement will be revised to reflect the note and the deed of trust and that Mr. Kiff will cover all dosing costs.) Funding Issues. A budget amendment is not required for this action. The Administrative Services Department would record the payment as a receivable when the money is loaned. Because the item is a long -term receivable, Admin Services would reserve fund balance for the amount. Any gain or loss is recorded when the loan is repaid as revenue or expense, and the fund balance designation is then removed. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). ;eubmitted . 422TQL���� David Hunt City Attorney Attachments: Housing Assistance Agreement Agenda Report #14 October 13, 2009" HOUSING ASSISTANCE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND DAVID KIFF TO SHARE EQUITY FOR THE REAL PROPERTY LOCATED AT 378 23`d Street, Newport Beach, California (APN #119 - 333 -12) THIS HOUSING ASSISTANCE AGREEMENT ( "Agreement ") is entered into this 13�' Day of October 2009 by and between the City of Newport Beach, a California municipal corporation and Charter City ( "City') and David Kiff, an individual ( "Employee ") and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to cant' on its business as it is now being conducted under the statutes of the State of California and the City's Charter. B. On September 12, 2009, Employee entered into an Employment Agreement with City to serve as City's City Manager. C. Section 12 and Exhibit "A" of the Employment Agreement provide incentives to the Employee in the form of an equity contribution of up to Five Hundred and Fifty Thousand Dollars ($550,000) to allow Employee to re- locate within the incorporated boundaries of Newport Beach. D. Employee now desires to re- locate his personal residence into the City and exercise his rights to the equity contribution provided in the Employment Agreement by purchasing real property located at 378 23m Street, Assessor Parcel Number 119- 333-12 ( "Property"). E. City desires to provide Employee with an equity contribution to purchase the Property upon the terms and conditions contained in this Agreement. F. City and Employee acknowledge adequate consideration has been provided to induce both parties to enter into this Agreement. NOW, THEREFORE, the parties agree as follows: TERMS AND CONDITIONS 1. EQUITY CONTRIBUTION Pursuant to the August 18, 2009 Employment Agreement between the City and Employee, the City hereby agrees to provide Employee with Four Hundred Seventy - One Thousand Two Hundred Fifty Dollars ($471,250.00) to purchase the Property ( "Equity Contribution "). $471,250.00 is 50.4% of $935,000.00. The City and Employee will share in all appreciation /depreciation of the Property's value on a cost basis in proportion to the Equity Contribution's overall percentage of the total purchase price, as Housing Assistance Agreement Page 2 of 12 adjusted by any improvements that the Employee or his contractor makes to the Property in accordance with Section 2. At the time the property is sold, the payment made to the City reflective of its Equity Contribution ( "Final Equity Repayment ") shall be made in accordance with either of the below conditions, whichever is applicable: A. If the Property is not improved by the Employee further beyond ordinary maintenance of the Property, the Final Equity Repayment shall be calculated as follows: (Final Property Sale Price — Employee -Paid Closing Costs) X 50.4% = Final Equity Repayment B. If the Property is improved by the Employee or his contractor in accordance with Section 2, the Employee shall retain all invoices for materials and labor charges and has the burden of establishing the costs of all investments into the Property. Such improvements must be documented hard costs including materials and labor ( "Documented Hard Costs "), but shall not include soft costs such as personal efforts of Employee or other owners. In this case, the Final Equity Repayment shall be calculated as follows: (Final Property Sale Price — Employee -Paid Closing Costs — Documented Hard Costs) X 50.4% = Final Equity Repayment The Equity Contribution (as adjusted for appreciation/depreciation) shall be repaid by the Employee to City within twelve (12) months of the Employee's termination of employment or retirement, unless otherwise agreed to by the City in writing. 1.1 Employee's Financing of Property. Employee shall secure financing from City National Bank or Bank of America ( "Bank ") and enter into Escrow to purchase the Property. Employee shall provide a deposit of five percent (5 %) of the Property's total purchase price. In addition, Employee shall obtain a conventional loan ( "Loan ") from Bank. 1.2. Delivery of Equity Contribution. City shall deposit the Equity Contribution in "good funds" according to the terms of Escrow between the Employee and Bank to purchase the Property. "Good funds" shall mean a wire transfer of funds, check drawn on or issued by the offices of a financial institution located in the State of California, or cash. Housing Assistance Agreement Page 3 of 12 2. EMPLOYEE'S IMPROVEMENTS TO THE PROPERTY With City's prior written consent, Employee may remodel or construct improvements on the Property. The City's written consent shall contain a dollar amount agreeable to both parties for the cost of the remodel or improvement(s). Notwithstanding any provision in this Agreement to the contrary, Employee shall be entitled to recover the cost of the remodel or improvement(s) from the sale or transfer of the Property before repayment of the City's Equity Contribution. 3. TAXES, MAINTENANCE AND ASSOCIATED EXPENSES Employee shall be one hundred percent (100 %) responsible for all debt service on the loan, maintenance, taxes, liability insurance and any liabilities occurring on or arising from the Property, and any and all expenses associated with the Property. The City has no obligation and assumes no liabilities with respect to the Property other than providing the Equity Contribution in Section 1 of this Agreement. Employee expressly assumes any and all liabilities arising from the Property as between he and the City. 4. ADDITIONAL DOCUMENTS REQUIRED FROM CITY AND EMPLOYEE 4.1 City. City agrees that on or before 1:00 p.m. on the business day preceding the Property's Escrow closing date, City will deposit with the escrow holder all additional documents (executed and acknowledged, if appropriate) which are necessary to comply with the terms of this Agreement, including, without limitation, items and instruments as may be necessary for escrow holder to effectuate the terms of this Agreement. 4.2 Employee. Employee agrees that on or before 1:00 p.m. on the business day preceding the Property's Escrow closing date, Employee will deposit with escrow holder such items and instruments (executed and acknowledged, if appropriate) as may be necessary for the escrow holder to comply with this Agreement. 5. PROMISSORY NOTE AND RECORDATION OF DEED OF TRUST Employee shall execute in a form substantially similar to Exhibit "A" attached hereto and incorporated by this reference, a Deed of Trust in favor of City for the amount of City's Equity Contribution ( "Second Deed of Trust "). Within ten (10) business days of the Property's close of Escrow and satisfaction or waiver of all conditions precedent, City shall cause the Second Deed of Trust to be recorded with the Orange County Recorder's Office with a copy to the City Clerk for the City of Newport Beach. Employee shall also execute in a form substantially similar to Exhibit "B" attached hereto and incorporated by this reference, a Promissory Note in favor of the City for the amount of the City's Equity Contribution secured by the Second Deed of Trust. This Agreement, the Promissory Note and the Second Deed of Trust shall act as a "second mortgage" on the property and secure the City's interest in the Property pursuant to this Agreement. This Agreement, the Promissory Note and the Second Deed of Trust shall Housing Assistance Agreement Page 4 of 12 be second to the mortgage secured by Bank but superior to all other liens and encumbrances that may attach to the Property in the future. 6. CONDITIONS PRECEDENT TO CLOSE OF ESCROW 6.1 Conditions to City's Obligations. The obligations of City under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by City of each of the following conditions precedent: (a) City has approved in writing the condition(s) of title. (b) Escrow holder holds and will deliver to City the instruments, if any, accruing to City pursuant to this Agreement. (c) The due performance by Employee of each and every undertaking and agreement to be performed by Employee hereunder, and representation by Employee of the truth of each representation and warranty made in this Agreement. For purposes of this subsection (c) only, a representation that is limited to Employee's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to Employee. (d) City's approval of any other conditions specified in this Agreement. In the event each of the conditions set forth above is not fulfilled or waived in writing by City prior to the Property's Escrow closing date, City may, at its option, terminate this Agreement, thereby releasing both parties from further obligations hereunder (except for those that by their terms survive the termination of this Agreement), and all funds shall be immediately returned by the Employee /escrow holder to City without notice or further action by either party. Nothing in this section shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement. 6.2 Conditions to Employee's Obligations. The obligations of Employee under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by Employee of each of the following conditions precedent: The due performance by City of each and every undertaking and agreement to be performed by City hereunder. 6.3 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by City or Employee, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a party, such approval shall be in such party's sole and absolute discretion. Housing Assistance Agreement Page 5 of 12 7. ADDITIONAL COVENANTS OF EMPLOYEE 7.1 Environmental Claims. Employee shall retain all liability under all Environmental Laws asserted at any time in .connection with any set of facts or conditions existing in, on or about or arising from the Employee's ownership /occupancy of the Property ( "Retained Environmental Liabilities'). For purposes of this Agreement, "Environmental Laws" shall mean all federal, state or local statutes, regulations, ordinances, codes or rules as such have been or may hereafter be enacted, adopted, amended or supplemented and all common law causes of action relating to the protection of human health or the environmental, including without limitations the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 at seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. Sections 7401, et seq.), the Toxic Substance Control Act, as amended (15 U.S.C. 2601, et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. Sections 300f, et seq.), the Federal Insecticide, Fungicide and Rodenticide Act, as amended (7 U.S.C. Sections 136, et seq.) and the Clean Air Act, as amended (42 U.S.C. 7401, et seq.), and private rights of action for nuisance or damages to property or persons. Notwithstanding any other provision of this Agreement, the provisions of this section shall survive the termination of this Agreement. B. REPRESENTATIONS AND WARRANTIES 8.1 Representations and Warranties. Employee hereby makes the following representations and warranties to City, each of which (1) is material and relied upon by City in making its determination to enter into this Agreement; and (ii) to Employee's actual knowledge, is true in all respects as of the date hereof: (a) There are no pending or threatened litigation, allegations,. lawsuits or claims, whether for personal injury, property damage, 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 Employee's knowledge, threatened against Employee 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 Employee of any judgment, order, writ, injunction or decree issued against or imposed upon him. There is no action, suit, proceeding or investigation pending or threatened against Employee which would become a cloud on City's interest in the Property or 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 department, commission, board, bureau, agency or other governmental instrumentality. (b) There are no contracts or other agreements affecting the Property that would adversely affect City's rights with respect to the Property. Housing Assistance Agreement Page 6 of 12 (c) There are no contingent liabilities arising out of the ownership or operation of, or affecting, the Property or any part thereof which would be binding upon the City. (d) As of the Property's close of Escrow, the Property will not be subject to any leases, subleases, easements, or any other possessory interests. All representations and warranties made hereunder are in addition to any representations and warranties implied by law and in no event shall this section be construed to limit, diminish or reduce any obligation of disclosure implied upon Employee by law. All of the representations and warranties of Employee set forth in this Agreement shall survive the Property's close of Escrow and shall not be deemed to have merged in any document delivered at the closing. Employee shall indemnify City against and hold City harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys' fees, which City may reasonably incur or sustain in connection with (i) any breach of Employee's representations and /or warranties contained herein; (ii) the failure of Employee to fulfill any of its covenants or agreements under this Agreement; (iii) any and all liabilities, claims, demands or damages made or incurred by third- parties, whether direct, contingent or consequential, in any way related to or arising from the Employee's ownership, use, operation or, occupancy of the Property; or (iv) in any way relating to the Retained Environmental Liabilities set forth in this Agreement. City shall notify Employee of any prospective claim for breach of representation or warranty promptly after City has actual notice of a breach of the relevant representation or warranty. 8.2 Changed Circumstances. If Employee becomes aware of any fact or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by Employee under this Agreement, whether as of the date given or any time thereafter and whether or not such representation or warranty was based upon Employee's knowledge and /or belief as of a certain date, Employee will give immediate written notice of such changed fact or circumstance to City, but such notice shall not release Employee of his liabilities or obligations with respect thereto. 9. DEFAULTS; ENFORCEMENT 9.1 Defaults and Right to Cure. Failure or delay by either party to timely perform any covenant of this Agreement constitutes a default under this Agreement, but only if the party who so fails or delays does not commence to cure, correct or remedy such failure or delay within ten (10) calendar days after receipt of a written notice specifying such failure or delay, and does not thereafter prosecute such cure, correction or remedy with diligence to completion. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured parry. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until ten (10) calendar days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Housing Assistance Agreement Page 7 of 12 10. MISCELLANEOUS 10.1 Successors and Assigns. Employee shall not transfer, sell, hypothecate, or assign the Property without the prior written authorization of City. Any attempt to transfer, sell, hypothecate, or assign the Property without the City's express written authorization shall be null and void. This Agreement shall be binding upon the parties hereto and their respective heirs, representatives, transferees, successors and assigns. The transfer of all or any part of the interest of any party hereunder in the Property shall not release Employee of his obligations under this Agreement. 10.2 Indemnity. To the fullest extent permitted by law, Employee shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Employee's presence or activities conducted on the Property (including the negligent and /or willful acts, errors and/or omissions of Employee). Notwithstanding the foregoing, nothing herein shall be construed to require Employee to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Employee. 10.3 Time of Essence. Time is of the essence in this Agreement and with respect to each covenant and condition hereof. City and Employee 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. 10.4 Time Period Computations. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and California state or national holidays unless the reference is to business days, in which event such weekends and holidays shall be excluded in the computation of time and provide that if the last date to perform any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or California state or national holiday, such act or notice shall be deemed to have been timely performed or given on the next succeeding day which is not .a Saturday, Sunday or California state or national holiday. Housing Assistance Agreement Page 8 of 12 10.5 Authority. Each individual executing this Agreement on behalf of Employee and City represents that he or she is duly authorized to execute and deliver this Agreement on behalf of each respective party. Upon request of either party City and Employee agree to deliver such documents reasonably necessary to evidence the foregoing. 10.6 Interpretation; Venue; 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 at the time of the execution of this Agreement and any litigation shall be venued in the court of applicable jurisdiction in the County of Orange, California. 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. 10.7 No Waiver. No delay or omission by any 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 succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 10.8 Modifications. Any alteration, change or modification of or to this Agreement, 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. 10.9 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 instrument, or the application of 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. 10.10 Merger of Prior Agreements and Understandings. This Agreement and other documents incorporated herein by reference contain the entire understanding between the parties relating to the transaction contemplated hereby and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. 10.11 Execution in Counterpart. This Agreement may be executed in duplicate counterparts, each of which shall be deemed an original and all of which shall constitute an agreement to be effective as of the date of signing. Further, signatures transmitted and memorialized by facsimile shall be deemed to have the same weight Housing Assistance Agreement Page 9 of 12 and effect as an original signature. The parties may agree that an original signature will be substituted at some later time for any facsimile signature. 10.12 Notices. Any notice which either party is required to provide under this Agreement or may desire to give to the other party must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty -four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and 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 parties hereto: To Employee: David Kiff At the home address then shown in Employer's files To City: City Clerk City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 (949) 644 -3020 and City Attorney City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 (949) 644 -3139 [SIGNATURES ON FOLLOWING PAGE] Housing Assistance Agreement Page 10 of 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. EMPLOYEE By: David Kiff APPROVED AS TO FORM: By: Attorney for David Kiff THE CITY OF NEWPORT BEACH, a Charter City and Municipal Corporation By: Ed Selich, Mayor CITY OF NEWPORT BEACH ATTEST: M APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY By L) David R. Hunt, City Atto ey CITY OF NEWPORT BEACH Leilani I. Brown, City Clerk CITY OF NEWPORT BEACH [END OF SIGNATURES] RECORDING REQUESTED BY: AND WHEN RECORDED MAILTO: City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, California 92658-8915 Attn: City Clerk SPACE ABOVE THIS LINE IS FOR RECORDERS USE A•P•N•: Order No.: Escrow No.: DEED OF TRUST WITH ASSIGNMENT OF RENTS (SHORT FORM) This DEED OF TRUST, made on this _ day of 2009, between David Kiff, an individual herein called TRUSTOR, whose address is 378 23" Street, Newport Beach, California 92660 -3609 (APN# 119 - 333 -12), FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called TRUSTEE, and the City of Newport Beach, a California municipal corporation and Charter City, herein called BENEFICIARY, VVITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Newport Beach, County of Orange, State of California, described as: 378 23"d Street, Newport Beach, California 92660 -3609 (APN# 119-333 -12) together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of $471,250.00 with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2) the performance of each agreement of Trustor incorporated by reference or contained herein and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. To protect the security of this Dead of Trust, and with respect to the property above described. Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18, 1964, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, namely: COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1288 556 Kings 858 713 Placer 1028 379 Siena 38 187 Alpine 3 13031 Lake 437 110 Plumes 166 1307 Stskiyou 506 762 Amcor 133 438 Lassen 192 367 Riverside 3778 347 Selaao 1287 621 Butte 1330 513 Los Angeles T3878 874 Sacramento 5039 124 Sonoma 2067 427 calavems 185 338 Madera 911 136 San Benito 300 405 Stadslaus 1970 56 Colusa 323 391 Madn 1849 122 San Bernardino 6213 768 Sutter 655 585 Contra Costa 4684 1 Mariposa 90 453 San Francisco A-804 596 Tehama 457 183 Del Norte 101 549 Mendocino 667 99 San Joaquin 2855 283 Trinity 108 595 Ell Dorado 704 635 Merced 1660 753 San Luis Obispo 1311 137 Tulare 2530 1D8 Fresno 5052 623 Modoc 191 93 San Mateo 4778 175 Tuolumne 177 160 Glenn 469 76 Mono 69 302 Santa Barbara 2065 881 Verdure 2607 237 Humboldt 801 93 Monterey 357 239 Saida Clara 6626 664 Yob 769 16 ImperW 1169 701 Napa 704 742 Santo Cna 1638 607 Yuba 39B 893 Inyo 165 672 Nevada 363 94 Shasta 800 633 Kim 3756 690 Orange 7182 18 San Diego SERIFS 5 Body 1984, Page 149774 shall inure to and bind the parties hereto, with respect to the property above described. Said agreements, terms and provisions contained in said subdivisions A and B, (identical in all counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated herein and made a part of this Deed of Trust for all purposes as fully as H set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, requests that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Dated: ,2009 STATE OF CALIFORNIA COUNTY OF ORANGE )SS David Kiff Trustor On before me, Notary Public, personally appeared personally known to me (or 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 Trustor that he/she/they executed the same in his/heritheir authorized capacity(ies), and that by histherftheir signature(s) on the Instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the Instrument. Trustor WITNESS my hand and official seal. Signature Trustor (This area for official notarial seal) DO NOT RECORD The following is a copy of Subdivisions A and 8 of the fictitious Deed of Trust recorded in each county in California as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or Improvements to be made thereon, not to commit or permit waste thereof, not to commit, suffer or permit any ac upon said property in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Truster. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees In a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. 4) To pay; at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Truster fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may; make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such proposes; wear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from dale of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed: 1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such mordes received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after Its due date. Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, arid without affecting the personal liability of any person for payment of the Indebtedness secured hereby, Trustee may: reconvey any part of said property, consent to the making of any map or plat thereof; join In granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall recenvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto ". 5) That as additional security, Truster hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said properly or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attomeys fees, upon any Indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or Invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any.irdebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Truster, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the tnMfidness thereof. Arty person, Including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. After deducting all costs, fees and expenses of Trustee and of this Trust, Including costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums expended under the terns hereof, not then repaid, with accrued interest at the amount allowed by law in effect at the date hereof; all other sums then seared hereby; and the remainder, fi any, to the parson or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any indebtedness seared hereby, may from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instiumenl executed by the Beneficiary and duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title, estate, lights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed is recorded and the name and address of the new Trustee. 8) That this Deed applies to, Inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note seared hereby, whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine andfor neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by law. Trustee is not obligated to notify any parry hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor. Beneficiary or Trustee shall be a party unless brought by Trustee. DO NOT RECORD TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE: REQUEST FOR FULL RECONVEYANCE The undersigned is the legal owner and holder of the note or notes, and of all other indebtedness secured by the foregoing Deed of Trust Said note or notes, together with all other Indebtedness secured by said Deed of Trust, have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terns of said Deed of Trust to cancel said note or notes above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, ail the estate now held by you under the same. Dated: Please mail Deed of Trust, Note and Reconveyance to: City of Newport Beach 3300 Newport Blvd P.O. Box 1768 Newport Beach, California 92658 -8915 Attn: City Clerk Mayor, City of Newport Beach City Attorney, City of Newport Beach Do Not lose or destroy this Deed of Trust OR THE NOTE which it secures, Both must be delivered to the Trustee for cancellation before reconveyance will be made. DEED OF TRUST WITH POWER OF SALE First American Title Insurance Company TRUSTEE PROMISSORY NOTE SECURED BY DEED OF TRUST Principal Loan Amount: $471,250.00 Note Date: October 2009 FOR VALUE RECEIVED, the undersigned ( "Maker") hereby promises to pay to the order of the THE CITY OF NEWPORT BEACH, a California municipal corporation and Charter City ( "Holder"), at a place designated by Holder, the principal sum of FOUR HUNDRED AND SEVENTY -ONE THOUSAND TWO- HUNDRED AND FIFTY DOLLARS ($471,250.00) or so much thereof as is disbursed for the account of Maker. The obligation of Maker to Holder hereunder shall be secured by a deed of trust ( "Second Deed of Trust ") made by Maker encumbering its ownership interest in the real property located at 378 23rd Street, Newport Beach, California with an APN# 119- 333-12 ( "Property "). The obligation of Maker set forth in this Promissory Note is subject to acceleration as set forth in Second Deed of Trust. Unless expressly defined herein, all capitalized terms used herein shall have the meaning ascribed to them in that certain Housing Assistance Agreement Between the City of Newport Beach and David Kiff to Share Equity for the Real Property Located at 378 23rd Street, Newport Beach, CA ( "Housing Agreement ") entered into by and between Maker and Holder. 1. City Loan. This Promissory Note evidences the obligation of Maker to Holder for the repayment of funds loaned to Maker by Holder ( "Equity Contribution ") to finance the purchase of the Property pursuant to the Housing Agreement. Except as otherwise permitted in the Housing Agreement, Maker shall not make any sale, assignment or conveyance, or transfer in any other form, of Maker's ownership interest in the Property, or any part thereof, or interest therein without the express written consent of Holder. 2. Additional Terms. (a) Term. The term of this Promissory Note shall be from the date indicated above and until the Property is sold or transferred by Maker and Holder is re- paid its portion of the Equity Contribution pursuant to the Housing Agreement. (b) Repayment. The Holder and Maker will share in all appreciation /depreciation of the Property's value on a cost basis in proportion to the Equity Contribution's overall percentage of the total purchase price. The Property's total purchase price is Nine Hundred and Thirty -Five Thousand dollars ($935,000.00); thus, the Holder is entitled to fifty point four percent (50.4°/x) of the Property's value (i.e., the Equity Contribution's percentage of the total purchase price) at the time the Property is transferred or sold. Notwithstanding the transfer or sale requirements provided in this section, the Equity Contribution (as adjusted for appreciation /depreciation) shall be repaid by the Maker to Holder within twelve (12) months of the Maker's termination of employment or retirement, unless otherwise agreed to by the Holder in writing. At the end of the term of this Promissory Note and discharge of this Promissory Note as set forth above, Holder shall mark this Promissory Note "PAID IN FULL" and shall then deliver this Promissory Note to the trustee of the Second Deed of Trust that secures this Promissory Note for the trustee's delivery to Maker in conjunction with the reconveyance of the Second Deed of Trust. (c) Disbursement of the City Loan. Holder shall disburse the Equity Contribution to Maker as set forth in the Housing Agreement. 3. Prepayment. This Promissory Note may be prepaid in whole or in part at any time without the payment of any prepayment penalty. 4. Acceleration of Obligation. Upon the occurrence of an uncured event of default of Maker under this Promissory Note, the Second Deed of Trust or the Housing Agreement, and the expiration of any notice and cure period provided therein or herein, and upon thirty (30) days prior written notice to Maker, Holder may, at its option, declare this Promissory Note and the entire outstanding indebtedness hereby evidenced to be immediately due and payable and collectible then or thereafter as Holder may elect, regardless of the date of maturity. 5. Collection Costs: Attorneys' Fees. If any attorney is engaged by Holder or Maker because of any uncured event of default under this Promissory Note or the Second Deed of Trust or to enforce any provisions of either instrument, whether or not suit is filed hereon, Holder and Maker shall bear their own attorney's fees and costs. 6. Severability. The unenforceability or invalidity of any provision or provisions of this Promissory Note as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 7. Modifications. Neither this Promissory Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective unless by an instrument in writing signed by Maker and Holder. 8. Usury. Notwithstanding any provision in this Promissory Note, Second Deed of Trust or other loan document, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 9. Governing Law. This Promissory Note has been executed and delivered by Maker in the State of California and is to be governed and construed in accordance with the laws thereof. Venue in Orange County, California. [SIGNATURES ON FOLLOWING PAGE] IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the date and year first above written. Zl Erlmt7 By: David Kiff APPROVED AS TO FORM: By: Attorney for David Kill RECORDED AT THE REQUEST OF AND WHEN RECORDED, RETURN TO: City of Newport Beach 3000 Newport Beach Blvd. P.O. Box 1768 Newport Beach, California 92658 -8915 Attn: City Clerk (Recording Fees Exempt Pursuant to Government Code §§ 6103 and 27383) (SPACE ABOVE THIS LINE FOR RECORDER'S USE) APN: (119- 333 -12) HOUSING ASSISTANCE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND DAVID KIFF TO SHARE EQUITY FOR THE REAL PROPERTY LOCATED AT 378 23'" Street, Newport Beach, CA THIS HOUSING ASSISTANCE AGREEMENT ( "Agreement") is entered into this 13 I Day of October 2009 by and between the City of Newport Beach, a California municipal corporation and Charter City ( "City ") and David Kiff, an individual ( "Employee ") and is made with reference to the following: RECITALS 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 City's Charter. B. On September 12, 2009, Employee entered into an Employment Agreement with City to serve as City's City Manager. C. Section 12 and Exhibit "A" of the Employment Agreement provide incentives to the Employee in the form of an equity contribution of up to Five Hundred and Fifty Thousand Dollars ($550,000) to allow Employee to re- locate within the incorporated boundaries of Newport Beach. D. Employee now desires to re- locate his personal residence into the City and exercise his rights to the equity contribution�rovided in the Employment Agreement by purchasing real property located at 378 23` Street, Assessor Parcel Number 119- 333-12 ( "Property"). E. City desires to provide Employee with an equity contribution to purchase the Property upon the terms and conditions contained in this Agreement. Housing Assistance Agreement Page 2 of 10 F. City and Employee acknowledge adequate consideration has been provided to induce both parties to enter into this Agreement. NOW, THEREFORE, the parties agree as follows: TERMS AND CONDITIONS 1. EQUITY CONTRIBUTION Pursuant to the August 18, 2009 Employment Agreement between the City and Employee, the City hereby agrees to provide Employee with four hundred seventy -one thousand two hundred fifty dollars ($471,250.00) to purchase the Property ( "Equity Contribution"). The City and Employee will share in all appreciation /depreciation of the Property's value on a cost basis in proportion to the Equity Contribution's overall percentage of the total purchase price. The Property's total purchase price is nine hundred thirty -five thousand dollars ($935,000.00); thus, the City is entitled to fifty point four percent (50.4) of the Property's value (i.e., the Equity Contribution's percentage of the total purchase price) at the time the Property is transferred or sold. Notwithstanding the transfer or sale requirements provided in this section, the Equity Contribution (as adjusted for appreciation /depreciation) shall be repaid by the Employee to City within twelve (12) months of the Employee's termination of employment or retirement, unless otherwise agreed to by the City in writing. 1.1 Employee's Financing of Property. Employee shall secure financing from (Enter Name of Bank) and enter into Escrow to purchase the Property. Employee shall provide a deposit of five percent (5 %) of the Property's total purchase price. In addition, Employee shall obtain a conventional loan from (Enter Name of Bank) (the "Loan "). 1.2. Delivery of Equity Contribution. City shall deposit the Equity Contribution in "good funds" according to the terms of Escrow between the Employee and (Enter Name of Bank) to purchase the Property. "Good funds" shall mean a wire transfer of funds, check drawn on or issued by the offices of a financial institution located in the State of California, or cash. 2. EMPLOYEE'S IMPROVEMENTS TO THE PROPERTY With City's prior written consent, Employee may remodel or construct improvements on the Property. The City's written consent shall contain a dollar amount agreeable to both parties for the cost of the remodel or improvement($). Notwithstanding any provision in this Agreement to the contrary, Employee shall be entitled to recover the cost of the remodel or improvement(s) from the sale or transfer of the Property before repayment of the City's Equity Contribution. Housing Assistance Agreement Page 3 of 10 3. TAXES, MAINTENANCE AND ASSOCIATED EXPENSES Employee shall be one hundred percent (100°/x) responsible for all debt service on the loan, maintenance, taxes, liability insurance and any liabilities occurring on or arising from the Property, and any and all expenses associated with the Property. The City has no obligation and assumes no liabilities with respect to the Property other than providing the Equity Contribution in Section 1 of this Agreement. Employee expressly assumes any and all liabilities arising from the Property as between he and the City. 4. ADDITIONAL DOCUMENTS REQUIRED FROM CITY AND EMPLOYEE 4.1 City. City agrees that on or before 1:00 p.m. on the business day preceding the Property's Escrow closing date, City will deposit with the escrow holder all additional documents (executed and acknowledged, if appropriate) which are necessary to comply with the terms of this Agreement, including, without limitation, items and instruments as may be necessary for escrow holder to effectuate the terms of this Agreement. 4.2 Employee. Employee agrees that on or before 1:00 p.m. on the business day preceding the Property's Escrow closing date, Employee will deposit with escrow holder such items and instruments (executed and acknowledged, if appropriate) as may be necessary for the escrow holder to comply with this Agreement. 6. RECORDATION OF AGREEMENT AND DEED OF TRUST Employee shall execute in a form substantially similar to Exhibit A attached hereto and incorporated by this reference, a Deed of Trust in favor of City for the amount of City's Equity Contribution (Second Deed of Trust). Within ten (10) business days of the Property's close of Escrow and satisfaction or waiver of all conditions precedent, City shall cause this Agreement and Second Deed of Trust to be recorded with the Orange County Recorder's Office with a copy to the City Clerk for the City of Newport Beach. This Agreement and Second Deed of Trust shall act as a "second mortgage" on the property and secure the City's interest in the property pursuant to this Agreement. The Agreement and Second Deed of Trust shall be second to the mortgage secured by (Enter Name of Bank) but superior to all other liens and encumbrances that may attach to the Property in the future. 6. CONDITIONS PRECEDENT TO CLOSE OF ESCROW 6.1 Conditions to City's Obligations. The obligations of City under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by City of each of the following conditions precedent: (a) City has approved in writing the condition(s) of title. (b) Escrow holder holds and will deliver to City the instruments, if any, accruing to City pursuant to this Agreement. Housing Assistance Agreement Page 4 of 10 (c) The due performance by Employee of each and every undertaking and agreement to be performed by Employee hereunder, and representation by Employee of the truth of each representation and warranty made in this Agreement. For purposes of this subsection (c) only, a representation that is limited to Employee's knowledge or notice shall be false if the factual matter that is subject to the representation is false, notwithstanding any lack of knowledge or notice to Employee. (d) City's approval of any other conditions specked in this Agreement. In the event each of the conditions set forth above is not fulfilled or waived in writing by City prior to the Property's Escrow closing date, City may, at its option, terminate this Agreement, thereby releasing both parties from further obligations hereunder (except for those that by their terms survive the termination of this Agreement), and all funds shall be immediately returned by the Employee /escrow holder to City without notice or further action by either party. Nothing in this section shall be construed as releasing any party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement. 6.2 Conditions to Employee's Obligations. The obligations of Employee under this Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by Employee of each of the following conditions precedent: The due performance by City of each and every undertaking and agreement to be performed by City hereunder. 6.3 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by City or Employee, each party shall use its diligent best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a parry, such approval shall be in such party's sole and absolute discretion. 7. ADDITIONAL COVENANTS OF EMPLOYEE 7.1 Environmental Claims. Employee shall retain all liability under all Environmental Laws asserted at any time in connection with any set of facts or conditions existing in, on or about or arising from the Employee's ownership /occupancy of the Property ( "Retained Environmental Liabilities "). For purposes of this Agreement, "Environmental Laws" shall mean all federal, state or local statutes, regulations, ordinances, codes or rules as such have been or may hereafter be enacted, adopted, amended or supplemented and all common law causes of action relating to the protection of human health or the environmental, including without limitations the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Housing Assistance Agreement Page 5 of 10 Act, as amended (33 U.S.C. Sections 7401, et seq.), the Toxic Substance Control Act, as amended (15 U.S.C. 2601, et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. Sections 300f, at seq.), the Federal Insecticide, Fungicide and Rodenticide Act, as amended (7 U.S.C. Sections 136, et seq.) and the Clean Air Act, as amended (42 U.S.C. 7401, et seq.), and private rights of action for nuisance or damages to property or persons. Notwithstanding any other provision of this Agreement, the provisions of this section shall survive the termination of this Agreement. 8. REPRESENTATIONS AND WARRANTIES 81 Representations and Warranties. Employee 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 (fi) to Employee's actual knowledge, is true in all respects as of the date hereof: (a) There are no pending or threatened litigation, allegations, lawsuits or claims, whether for personal injury, property damage, 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 Employee's knowledge, threatened against Employee 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 Employee of any judgment, order, writ, injunction or decree issued against or imposed upon him. There is no action, suit, proceeding or investigation pending or threatened against Employee which would become a cloud on City's interest in the Property or 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 department, commission, board, bureau, agency or other governmental instrumentality. (b) There are no contracts or other agreements affecting the Property that would adversely affect City's rights with respect to the Property. (c) There are no contingent liabilities arising out of the ownership or operation of, or affecting, the Property or any part thereof which would be binding upon the City. (d) As of the Property's close of Escrow, the Property will not be subject to any leases, subleases, easements, or any other possessory interests. All representations and warranties made hereunder are in addition to any representations and warranties implied by law and in no event shall this section be construed to limit, diminish or reduce any obligation of disclosure implied upon Employee by law. Alf of the representations and warranties of Employee set forth in this Agreement shall survive the Property's close of Escrow and shall not be deemed to have merged in any document delivered at the closing. Employee shall Indemnify City Housing Assistance Agreement Page 6 of 10 against and hold City harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys' fees, which City may reasonably incur or sustain in connection with (i) any breach of Employee's representations and/or warranties contained herein; (ii) the failure of Employee to full any of its covenants or agreements under this Agreement; (iii) any and all liabilities, claims, demands or damages made or incurred by third - parties, whether direct, contingent or consequential, in any way related to or arising from the Employee's ownership, use, operation or occupancy of the Property; or (iv) in any way relating to the Retained Environmental Liabilities set forth in this Agreement. City shall notify Employee of any prospective claim for breach of representation or warranty promptly after City has actual notice of a breach of the relevant representation or warranty. 8.2 Changed Circumstances. if Employee becomes aware of any fact or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by Employee under this Agreement, whether as of the date given or any time thereafter and whether or not such representation or warranty was based upon Employee's knowledge and /or belief as of a certain date, Employee will give immediate written notice of such changed fact or circumstance to City, but such notice shall not release Employee of his liabilities or obligations with respect thereto. 9. DEFAULTS; ENFORCEMENT 9.1 Defaults and Right to Cure. Failure or delay by either party to timely perform any covenant of this Agreement constitutes a default under this Agreement, but only if the party who so fails or delays does not commence to cure, correct or remedy such failure or delay within ten (10) calendar days after receipt of a written notice specifying such failure or delay, and does not thereafter prosecute such cure, correction or remedy with diligence to completion. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until ten (10) calendar days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. 10. MISCELLANEOUS 10.1 Successors and Assigns. Employee shall not transfer, sell, hypothecate, or assign the Property without the prior written authorization of City. Any attempt to transfer, sell, hypothecate, or assign the Property without the City's express written authorization shall be null and void. This Agreement shall be binding upon the parties hereto and their respective heirs, representatives, transferees, successors and assigns. The transfer of all or any part of the interest of any party hereunder in the Property shall not release Employee of his obligations under this Agreement. 10.2 Indemnity. To the fullest extent permitted by law, Employee shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "Indemnified Parties') from Housing Assistance Agreement Page 7 of 10 and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any work performed or services provided under this Agreement including, without limitation, defects in workmanship or materials or Employee's presence or activities conducted on the Property (including the negligent and /or willful acts, errors and/or omissions of Employee). Notwithstanding the foregoing, nothing herein shall be construed to require Employee to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Employee. 10.3 Time of Essence. Time is of the essence in this Agreement and with respect to each covenant and condition hereof. City and Employee each specifically agrees to strictly comply and perform its obligations herein in the time and manner specked and waives any and all rights to claim such compliance by mere substantial compliance with the terms of this Agreement. 10.4 Time Period Computations. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and California state or national holidays unless the reference is to business days, in which event such weekends and holidays shall be excluded in the computation of time and provide that if the last date to perform any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or California state or national holiday, such act or notice shall be deemed to have been timely performed or given on the next succeeding day which is not a Saturday, Sunday or California state or national holiday. 10.5 Authority. Each individual executing this Agreement on behalf of Employee and City represents that he or she is duly authorized to execute and deliver this Agreement on behalf of each respective party. Upon request of either party City and Employee agree to deliver such documents reasonably necessary to evidence the foregoing. 10.6 Interpretation; Venue; 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 at the time of the execution of this Agreement and any litigation shall be venued in the court of applicable jurisdiction in the County of Orange, California. 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 Housing Assistance Agreement Page 8 of 10 plural number shall each be deemed to include the others wherever and whenever the context so dictates. 10.7 No Waiver. No delay or omission by any 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 succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 10.8 Modifications. Any alteration, change or modification of or to this Agreement, 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. 10.8 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 instrument, or the application of 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. 10.10 Merger of Prior Agreements and Understandings. This Agreement and other documents incorporated herein by reference contain the entire understanding between the parties relating to the transaction contemplated hereby and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. 10.11 Execution in Counterpart. This Agreement may be executed in duplicate counterparts, each of which shall be deemed an original and all of which shall constitute an agreement to be effective as of the date of signing. Further, signatures transmitted and memorialized by facsimile shall be deemed to have the same weight and effect as an original signature. The parties may agree that an original signature will be substituted at some later time for any facsimile signature. 10.12 Notices. Any notice which either party is required to provide under this Agreement or may desire to give to the other party must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty -four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective parties as set forth below or to such other Housing Assistance Agreement Page 9 of 10 address and to such other persons as the parties may hereafter designate by written notice to the other parties hereto: To Employee: David Kiff At the home address then shown in Employer's files To City: City Clerk City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 (949) 644 -3020 and City Attomey City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 (949) 644 -3139 [SIGNATURES ON FOLLOWING PAGE] Housing Assistance Agreement Page 10 of 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY B , David R. Hunt, City Attorney CITY OF NEWPORT BEACH EMPLOYEE By: David Kiff APPROVED AS TO FORM: By: Attorney for David Kiff THE CITY OF NEWPORT BEACH, a Charter City and Municipal Corporation By: Ed Selich, Mayor CITY OF NEWPORT BEACH ATTEST: 02 Leilani I. Brown, City Clerk CITY OF NEWPORT BEACH [END SIGNATURES]