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05 - Termination of Housing Assistance Agt with City Mgr
NEWPORT City Council Staff Report Agenda Item No. 5 November 1 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Attorney's Office Aaron C. Harp, City Attorney 949 - 644 -3131, aharp @newportbeachca.gov PREPARED BY: Michael Torres, Acting Assistant City Attorney APPROVED: L � NIJ TITLE: Termination of Housing Assistance Agreement with the City Manager, and Release of Associated Promissory Note and Deed of Trust ABSTRACT: Prior to its repeal by the voters in 2010, Section 501 of the City of Newport Beach's ( "City ") Charter required the City Manager to reside within the City. To implement this requirement, the City Council adopted Resolution No. 2009 -61, authorizing an equity sharing agreement to enable the City Manager to purchase a home within the City. On October 13, 2009, the City and the City Manager entered into a Housing Assistance Agreement ( "Housing Agreement ") providing the City Manager with a loan of $471,250.00 to purchase a home within the City. The City Manager used the loan from the City to purchase a home located at 378 23rd Street, Newport Beach, California, Assessor Parcel No. 119 - 333 -12 ( "Property "). The City Manager has since sold his home, based upon the re- payment formula provided in the Housing Agreement, the City Manager owes the City $457,623. However, the City Manager has re -paid the City $471,250.00, the full loan amount, which is $13,627 more than the City Manager was obligated to pay under the terms of the Housing Agreement. RECOMMENDATION: (1) Authorize the Mayor to execute the attached agreement terminating the Housing Agreement between the City and the City Manager. (2) Acknowledge the promissory note recorded against the Property is discharged and direct the City Clerk to mark the promissory note as "PAID IN FULL." (3) Authorize the Mayor, City Clerk and City Attorney to take all required actions, including executing the attached Request for Full Reconveyance and transmit the same Termination of Housing Assistance Agreement with the City Manager, and Release of Associated Promissory Note and Deed of Trust November 13, 2012 Page 2 to First American Title Insurance Company, to release the second deed of trust against the Property. FUNDING REQUIREMENTS: On September 26, 2012, the City received a wire transfer from West Coast Escrow, on the City Manager's behalf, in the amount of $471,250.00. There are no expenses associated with this item. DISCUSSION: Mr. David Kiff has served as the City Manager since September 12, 2009. Charter Section 501, now repealed, previously required the City Manager to reside within the City. To assist with the purchase of a residence in the City, the City Council adopted Resolution No. 2009 -61 providing the City Manager up to $550,000.00 for the purchase of a home. The City Manager borrowed $471,250.00 from the City to purchase the Property. The City's loan to the City Manager was secured by a recorded second deed of trust and promissory note. The $471,250.00 represented 50.4% of the $935,000.00 purchase price of the Property. The City Manager recently sold the Property for $995,000.00. Pursuant to the terms of the Housing Agreement, the City and the City Manager were to share in all appreciation /depreciation of the Property's value on a cost basis in proportion to the amount loaned to the City Manager by the City, as adjusted by any improvements made to the Property by the City Manager. As the Property was improved by the City Manager, at the time of the Property's sale, the City Manager is required to reimburse the City according to the following formula: (Final Property Sale Price - Employee -Paid Closing Costs - Documented Hard Costs [e.g., improvements]) X 50.4% _ Final Equity Repayment Based upon this formula, the City Manager owes the City approximately $457,623 (e.g., $995,000.00 - $58,323.00 — $28,714.00 x 50.4% _ $457,623). A breakdown of the various amounts is provided below: Termination of Housing Assistance Agreement with the City Manager, and Release of Associated Promissory Note and Deed of Trust November 13, 2012 Page 3 Reconciliation of Housing Assistance Agreement I Item I Column 1 I Column .2 11! Notes I Price $ 471, 2501, wire - transferred back to City on 9-26-12 �' Equity from West Coast Escrow 0 1 'wty Share( %) 5040,b CityEg _.40 ( _. Difference Paid by Homeowner $ 463,750 Sale Price (September 2012) _- ^ _ (... + $ 995,000 �Closing Costs Paid bySeller i - See Attachment 3A West Coast Escrow i iowners title policy $ 2,319.00 �Doctransfertax $ 1094.00 ! 19 Listing commission 24,875.00 � Iselling commission _ $ 24 875 00 Escrow fees $ 1940 00 - , .` - Additional_ settlement fees - e '$ 3,220.00; -_ Subtotal closing costs $ 58,323 lPOrt100 of Remodeling Costs 65ee Attachment 3B iDeslgn Costs - Miter Craft Supply � - Matt White Custom Homes $ 7467.69 ' Materials/Labor i I _� - Sepulveda Building Materials - _$ 138.00 - Newport Custom woodworking $14,870.00 t - TradingPostFanCo $ 978.59 ^ _ - Miter Craft Supply -_ _ $ 1,021.710. - -^ -, Miter Craft Supply $ 795.97 - Miter Craft Supply $ 1,312.59 _ - Newport Glass Company a $ 2,428.96 1 Subtotal, Portion of Remodeling Costs I $ 28,714 j Formula in Housing Assistance Agreement - Final Property Sale Price _— $ 995,000; mployee -Paid Closing Costs _ -_ - _ $ 58,323 - Documented Hard Costs ryI $ 28,714 Subtotall $ 907,963 is -` 457,623 Final Equity Payment Due City Subtotaix50 4 %j. Amount Waived - $ 13,627 On September 26, 2012, the City received a wire transfer sent by West Coast Escrow, on the City Manager's behalf, in the amount of $471,250.00. This wire transfer Termination of Housing Assistance Agreement with the City Manager, and Release of Associated Promissory Note and Deed of Trust November 13, 2012 Page 4 represented the full loan amount received by the City Manager and did not include the offsets the City Manager was entitled to under the Housing Agreement for the improvements made to the Property. Thus, the City Manager paid the City $13,627 more than the City was legally entitled to under the Housing Agreement. In light of this payment, City staff recommends the City Council terminate the Housing Agreement and release the second deed of trust and promissory note. 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). Submitted by: C.w Aaron Harp, City Attorney City Attorney's Office Attachments: (1) Agreement to Terminate Housing Agreement (2) Request for Full Reconveyance (3A, 3B) Supporting records, invoices provided by Kiff r �� TERMINATION OF 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 Termination of Housing Assistance Agreement is entered into this _ day of November 2012 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: A. Charter Section 501 required Employee to reside within the City. B. On October 13, 2009, City and Employee entered into a Housing Assistance Agreement ( "Housing Agreement') for the purchase of a home located at 378 23`d Street, Newport Beach, California (APN #119 - 333 -12) ( "Property'). C. Under the terms of the Housing Agreement the City loaned the Employee $471,250.00 to purchase the Property. D. Charter Section 501 was repealed by the City's residents at the 2010 General Election. E. Employee sold the Property and repaid the City $471,250.00, which represents the total amount of money loaned to Employee under the Housing Agreement. NOW, THEREFORE, City and Employee acknowledge adequate consideration has been provided to induce both parties to enter into this agreement and the parties agree as follows: 1. Termination of Housing Agreement. The October 13, 2009 Housing Assistance Agreement entered into between the City and Employee for the purchase of a home located at 378 23rd Street, Newport Beach, California (APN #119- 333 -12) is hereby terminated and of-no further effect. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date set forth above. EMPLOYEE, an Individual By: D�via Kiff THE CITY OF NEWPORT BEACH, a Charter City and Municipal Corporation an Nancy Gardner, Mayor CITY OF NEWPORT BEACH ATTEST: APPROVED AS TO FORM: THE CITY A EY'S OFFICE By: J& efl Aaron . ar , City Atto ey CITY OF NEWPORT BEACH Leilani I. Brown, City Clerk CITY OF NEWPORT BEACH LAI�li'LA'TM.j;R�I ANI 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: Citv Clerk REQUEST FOR FULL TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE: The undersigned is the legal owner and holder of the Promissory Note Secured by Deed of Trust dated October 22, 2009 ( "Promissory Note "), and of all other indebtedness secured by the foregoing deed of trust entered into on October 22, 2009, ( "Deed of Trust ") between David Kiff, an individual ( "Trustor"), whose address was 378 23rd Street, Newport Beach, California 92660 -3609 (APN # 119 - 333 -122), First American Title Insurance Company, a California Corporation ( "Trustee "), and the City of Newport Beach, a California municipal corporation and Charter City ('Beneficiary"). Said Promissory Note, 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 terms of said Deed of Trust, to cancel said Promissory Note 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, all the estate now held by you under the same. Dated: APPROVED AS TO FORM: THE CITY ORNEY'S OFFICE By: I- Aaron C. Harp, City Attorney Attachments: (1) Deed of Trust (2) Promissory Note THE CITY OF NEWPORT BEACH, a Charter City and Municipal Corporation M Nancy Gardner, Mayor ATTEST: By: Leilani I. Brown, City Clerk RCCOROWG REOUE61Fa en /w0wroan RECOROEUI ULM City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beady, California 92858-8915 Mr. CRY Clerk SPACE ABOVE THIS t rvc is FOR RECO1W8t'61AE This DEED. OF TRUST, made on tlas.22 day of w� 2009, between David Kff and Leslie Thomas Lochner (domestic paflners as joint tenants), - individuals herein caged TRUSTOR, whose address Is 378 236 Sheel,.Newport Beach, California 926603609 (APN8119433-12). FIRST.ANIERRICAN TfRE INSURANCE COMPANY, a CalifomW corporation,. herein caged TRUSTEE, and the City of Newport Beach, a (aldomla municipal corporation and Mader City, herein called SENMCIARY; WITNESSETN: That Truster grants to Tnrstee In h ist with power of sale, that properly In the City of Newport Beach, County . ofOlange, State of California, descdbed as: ' 378 2e Sheet, Newport Beady, Cafdomla szai.- 609 (APNC 11933312) - .. 'toge8rer w9th 81e rags, Issues and prafds thereof sdb)ecf however, to ft right; power end oudlhariy hereinafter given to and; mnfba w Won Beneficiary to coiled and apply such,mnis, Issues aM Profits for the purpose, of scowtv,(1) payrnent of the surn of $471 = 00 w@h Interest thereon accoaff g to the terms of a..promtssery riots or rotes of ever, date Iherewb h made by Trusior, parable to order of Beneficiary: and Mda stony or renewal thereof (2) the ped6mhance of each egncanent o(Tnator htwrpomted by rc$amiloe or ooida'ured herohh and (3) payment Of additional 'sums and Interest dwea n'wihich may hereafter be barred to Truster, or his successors or assigns, When evidenced by a promissory .note "notes ieaTigthed Vey ere sectored bytNs Deed ofTasL . To protect the security of M Deed OfTnst. and with rasped to the property above described. Yntsla WVesdy me sm each and ail otlhe agreements. and adopts ehd agrees to peifam and be band by each and all of iheturrs and pmvistas set fm9h In srrbdMston A. and It Is muha0y agreed that each and all of the hats eM provisions ad foNh In subdivision B.of the ficliSo s deed of bust recorded in Orange: County ALVud 17. 1964.aid In ail pew coanbas August 18. 1964. N the book and et the trap of Official Records In 0- o.ofke of the musty remrtlaofft county where said property is located. toted below opposite the tame o(Mxdh many, amaty:, _ COUNTY BOOK PAGE COUNTY 8001! ,PAGE .COUNTY BOOK, 'PAGE tOUMY BOOK PAGE' AU102I 1289 659 K%r, 858 719 RIM 1@e .' 979 Skma. 99 1" ' - Attie 3 19051 lake eT7 110 Rana me% 1907 ,SWgah 606 'Tat AOe10r' 133 0.Y L=eI IN - 307 . aheiika 9rm W, Bdaho. 119, '821 Butt 1330 611 - .L*s.NGla 'Tdere .ell '6aawre�b' . =9' IN Socan. 2447. is '. Cffi 1% M.- Marten.. ell tie Gm BaYm 1101 l05 SbidrLxe'. IM -W . cok 329 SBt Mob 1819 . 1;2' San BenmSho 9213 ITS SAkr 955, :585 .. Cah9a ows 1881 1 Mariposa 'W 453 'awn Fro WbW' . Mu Bee' Tdaaa .4#'.. .10. Otl Nm 191 519 &ftwogvn. 667 W sanJwakn. 2865' M '1Y* IN ,Too oDoWo M us rsrm4 1897 T53 Ssit a9lsp0 tail 137 At- 2510 As Fmsn 6052 fin MSm9 191 91 sa;Man 4279 125 TialBavq 1N ,.I66. ... G1an ws9 7e 1Aw,9` a9 am � 'soda ezinm. 29,9 -' °BBi =. Neimmw' 26d1 '237 . .temmda 001 80 rwrt9!h'' SST 6enta Clay✓ .�' gat �t Tgtt6 AND 'My W 110 7a NO- Toe Ia2. semaaa lass GJWC;F48M TO B7 iy�W 165 arz NavaOa aBkr s.� kl v. C1` CABYOyFy�i57?iB�O TNAL "GRO 0 within reference thereto, Incorporated � herein and made a part ofthls Deed of Trust for all purposes as fupy as If set forth at lertgtlr herein, and Beneficiary may charge a statement regarding the obligation secured hereby, provded the charge therefor does not exceed the maximum allowed by law. The undersigned Trustor, re Gueshs that a copy of any notice of default and any notice of sale hereunder be mated to him at h's address hereinbefore set foM. Dated 22 . 2090 STATE ;OF.CALIFORNIA COUNTY OF ORANGE ),SS On *tjnbefore meUfjh*Ll y P0Ec. Personalty wvewed Person* k mm to me (or Proved tome an gw basis of satisfactory ev[demx) to be ero person(s) wtroya ramie(s) Isfere walzcrlbed to the Mt9dn Insins nerd and of mMedged to me 6d bekhwfty exemded the same in hisA entreir aimmbed rap=400s), and dud by'tdsthentheir sfgnabre(s) on ft bctument the peam(s) or the entity upon behalf of which the person(s) acted, emartaA tre trrstnnnerd. 0 + CMAIMI MILUM." u r. 'LI +J �P3:r -ra rxr� i-i 6- David 10 ctL��G� c lends 7lcnms lodmm • Trustar Tr,Mar TIntor (T* area forNr,U,m nctuW soap CERTIFIED TO EE A TRUE AND'. EXACT COPY OF THEORIOINAL •COAST CITIES ESCROW ?r,3y^"m .... Te"�r.,- a�''"'"'[ -c ei •'�4r', '.vx:a.P4 -2 tf :. .. -.� r - r.e..: -2r. i.. :_ w_>. rir,3. yt - .- v:.a.,� -•.Na CALIFORNIA ALL.-PURPOSE CERTMCATE OF ACKNOWLEDGMENT State of California Couaty of personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) islare subscribed to the within' instrument and acknowledged tome that helAtehhey executed the same in hisPoerhhoir.authotized capacWxes),'and that by bis/herhheir signature(s) on the instrnment the persou(sl or the entity upon behalf of which the person(s) acted, exeevted.the.mshvmeat. . I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is hvo and correct. S my hand and official seal. �vnuv<nM� CQIRZ awes 1708630 ttw�O+e00a e e l DaB2310 ADDITIONAL OPTIONAL INFORMATION - MSTRUMONS FOR COMPLETING 7WS FORM i)ESCRTn0N.0FnMATfACFMD DOCUhfW 4 1 Trv4 (fbemdm� mmcbWdo� . (]fileoebrarym¢are�mrbW dacmnrm - NumLerofPsges 5 DocfmmtDate CF*) ❑. 7tmtee(s) ' O Omer dy �em6k*r smarter P Q.Vr . yw o„mm, .oaf --&* m ems dox m pb aomtyn. w a•.a?f�,rmv ee . Fvpvy ewyJUSd md' m � Aormaa rbe tidy G jr. d,nava tr m be..mfGAavaea dO3ymNa bsh6umrm�mydauimtrs yn.to�n'v¢wa6n mmghphal Mrarti da+mar,m lmg mtlr ??t(!@edw eef rrgim�e6emmir r^do ro•ctM¢tlnrtr@rp+ff avmyh • Sme atl 0.6t, %.ti= bran Stl add Corny wbft 8e doomm . cex3(r) p.=1jb'!P068W hrPmeae -Wy parr b**Wkp .. nWeofrmmpAbe ae dve6maeol�e(a)0�0'49�aid� m� aim ba 6e iame date ps arlanvl W gmrw u m4�1 . • Iheeo�u7 pobB?'o°atP� Vu w7zr aeme.m a eppwf wiWfn.6b orvhcr ' ®tcaoa�eEMew®mA9+�Y�'eao(mmr pvNie} . • Aipl (ha mme(•YaEeosmo� dgvete) w5o pV(b; mtffitl'the ame at 0 DONOTRECORD The following Is a copyalS"Naimns Amid B of Mefi A -Daef ofTnnstromed m each wetlym.WfaMa as stated In Me foegolg Deed of Trent oral Incorporated by reference In WW Deed ofTrutas being a pad Owed "lad"at length thensh A. To prated the security of Use Deed of Test. Tmew agrees: 1) Ta keep uU pmperty m 000d .conSdbn wd repok. w b renew «danogsh arty buWhV ece ; m mrWide m resmm PUT4%y are m good and wedmm Wien mamieray Griping Mrich nay be constructed, damaged or destroyed thereon argil to pay when due erg dams for labor perfomWd and mamdak fumbhed therefor. to eo ri y vAth gig tire: axaetleg sap popery «repu"V pay affemthorls.m trnprowarests to be made thereon, not to cwmt «fremil waste thereof not m emnng, suffer «perMl any act upon sap pripady G N.dation of low. to cultivate. mhgafe, ferNitee, henIgate: Mass and do ab dhr ads which from tlo dmnxier anise of said prepeery may be masmsbynecessary. Ito. specific oftu nemHom heleln not eodudmg the general. _ .•,r ........................., r,...r ,.oar .,,,.a.a.. -...,r .... o,.....r w•.,, .,.a .,,,.,.o,,,w.......,,.,, ,.F...r .......,. ,..,...,...........,.,...r.._., ................. daplon Digerefidafad heineuderadsnmbecfed adman pumaufmaybe notice. mTw'mr. -Such appfraMonaraolmse alma rattrap «wales omy dafadt «3) T oppearl haewaerm rya coon oryad darepmgmrdm such the m pay Bit 3costs •. nde' , mdurGgy� of oMdo��of IPoepeand aabmanreyo lose re ss mn rights Day � awn prong wldc Bextday «T Ire may Mee«: and h aaysdluougd by Bervaidaym mnodoze ft Deed. . 4) To pay, d least ran stiys ba deque p_ ry erg bras gird _ oHedilg Wald erml.w• Ixtuea ear assessments to be pdw on Mpdamdwakr pods when due, a0 emmmmnms, chagss and firs, with unmast on sap PaoPml' a anY Daft therad, WtdCll appear to tit pbr «stpavJr Ireiato; eq cosh. fns omdege SWdth§fiust $hC11N TmDiOr fag to mole ea7 paymed or W do eery od as haa6i provided, than Bere53ary or Trustee. led wtlhad abOgaBOn w ado eM . ,stem m closer my pecan necessary to protect the security hereof. Beneficiary «True ee bring euthcabed to gird« upon eDidpmpM W Seale Imposes; appear In and defew any advon or p000eding puryod'm to Died tie security hereof m the rights « povep of fioek ay «Tapsme: pay; pndylsd, amlasl«'waMfoNse my enamlkance, charge or ben MnWn In the Judgment of either appears to be prior or superior Wells; mid; In exercising my sit . poae(S; Wiaeoessarieeponses, empfoycounW ate pay his reasonable fees. . 6) To pay lmmediably and wideut demand m sins so etpentled by Benefsay«Tiisfee, with 6dered bran dam ofaMendmne dite enoum_ " allowed bit' law In plied at the dam based, and to pay for ony statemam provided for by lox In ePect at Use dam based repardup the ob§gaSon waned hereby mya ourldenNMed by the Bondndary not to evened the nve&mmn olovel by law at the tare when satdammned Is demanded. B. M h mlmaby ogreea' . 1) -Thal snit' award of damage n ce nnecson YA airy caWemnatiari for pubfm use of or War to paid ppPedy d any pad thereof Is hater assigned and Wall be Paid to Bene64mry ho away apply or release such mmdas reoehwd by hhn In the same mamef Did With tie same elect W above . paovWed b2) That blon dptinif pa nerd «aBarlmemim. zf � er egg wmreddam oum cemoatl haaeby Dot 3s duo dam, fdenefidvydoas nalwalw his dgMegherm aequSa pmnplpaymua . . when dim pep atdmyles seemed orb to Uams'dithout bbMyfaam Pay. . 3) Thddarwulo apron tlromtimt.wBha46s pera mforasp of aA aoGq upon when not ft dBaofdvyeemed hergay, Tpjs s.. . Deed eommy, note ad oMwscww� and asentt, fen nW ft persaml t,oripldory Person far paymadd the heed thwoo eepoedhe hereby, tnWw m�< mom sr.mrypad of cam paopob; rare^., to, Ce nWAg dam anmp or plot tlured; lap m gmrdtag,onY easemed Boren, «)o'vn b any eAemlan . en.. nna,e,n..v�.n„an�rx. � .� a,.� 4 Tiush, held a Mm mamderof M Deed and"nom m named as BmwEdmym lln� Dead. wharmwer the mnbvd so requires. , the n=cufine gendar NWWes.IN (emWne urWm reufer, and @ro Is trot ob[q) T a TnrsteO acmpb tM1kTRetMan M Deed. duty emtiAsd and edM W pd..ti made o Public MeDrd m PMMW bylaw. Trustee IsnteeNvtl d ate' any peryhnMO ofpenft wla vide, any odar Deed of Trust prof anyedfan orlmucea g,IdwNch TnrsOV..BeneNdary or Imly wdms brought byTn stee. DO NOT RECORD I,tEOUESrFOR FULL RECONVEYANCE TO FIRSTAMERMN T[RE INSURANCE COMPANY, TRUSTEE The midW*rred btlro svrnar and IroNer al tln mtoorndm, and ofd offmindeMeditma- seared byflrefomft DmdofTry# Said nde'or natal. 10gatlrer wM Otl COW IVIdSIAACI a oewred by aid Dead ofTnmL have been fully Paid and aat65ed;'and you 'O a hereby requestBd and dhecfed, on Paymard td.YOa Of anyaure mIng to YOU lender &a burns Of said Deed or Tw( to cancer saw rule br notes above mm fDmd, and as OthereNdenres Orbulebladness aecmdbyaM Deed of TrustdeNered to you herewill, togWWWfth Bro Safe Deed of Trust, and May". Gtyof Nrww BOefi .. cty. Please mail' Deed ofTnml, Note and Reconveyance to: cvromay, CJp• afNewyoM1 Brafi City of Newport Beady 3300 Newport StVd . P.O. Box 1768 Newport beady California 9285UM Attn: City Clerk - .Do Not lose or desh»y this Deed of Tr rst OR THE NOTE which R, secures. ,Both roust be delivered to the Trustee for cancellation before reoonveyance will be made. .. DEED OF TRUST W" POWER OF SALE First Amefican Trtle .Insurance Company TRUSTEE . cHRTwmT> TO BF. A TROE AND c 5 x uv TR� Js cx.J sx c. 2, •C z_ A PROMISSORY NOTE SECURED BY DEED OF TRUST Principal Loan Amount $471,250.00 Note Date: October ZZ. mq" FOR VALUE RECEIVED; the undersigned (Maker") hereby pforrdses to pay to the order of the THE cnY-6F NEWPORT BEACH. a California munIcIpal"oorporation and Charter City (Holder); at a place designated by Holder, the pdricipal sum of FOUR HUNDRED AND SEVENTY-ONE THOUSAND TWO4iUNDRED 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 2e Street, Newport Beach, California with an APNO I to- 333-12 (Property"). 'The obligation of Maker set forth in this ' Promissory Note Is subject to acceleration as set forth 16 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 N6wport Beach and David' MIT to Share Equity for the Real Property Located at 378 2e Street.- Newport Beach, CA CHousing AgreemanC) entered Into by and between Maker and Haider 1. M Loan. This Promissory Note evidences the. obligation of Makbr 1c) Holderfor the repayment of funds loaned to Maker by Holder ('Equity Contil6uilopw-) 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; pssignment or conveyance, or transfer In any other form, of Makers' ownership Interest In the Property, or any part Meted, or Interest therein without the express written consent of Holder. 2. Additional Terms. (a) Jem. The term of this. Promissory Note, shall; be from the date'• . indicated above and until the Property Is `sold of tran4e�red by Maker and HoMerls re, paid Its portion of the Equity Contribution pursuant to the Housing Agreement (b) Repayment The Holder and Maker '.will! share In. all aPPreclation/depreclation of the PropejVs value on a cost basis In proportion to tire' Equity Contribution's overall, percentage of the total purchase price.' 'rhe PropWs total- purchase price Is Nine Hundred. and Thirty-Five Thousand dollars ($935,000.00); hus. the Holddr'ls entitled to fffty,polrd four Oeiroent (50.4%) of the Piq>eftYs,Va1W EqUlty*00*11>L&r's percentage Of.the total purchase price) at the time the. 0 Is transferred or sold. Notwithstanding the'transfer or sale i, quIrar1rt0ntd *vId=i . section; the Equity Contribution (as adjusted for' appreclation1depn6ciiitigh) shall 'be repaid lb; the ,Maker to Holler within twelvia (12) months of the Makers td-milhawn of employment or retirement unless otherwise agreed to: bythe H6Ider1Inwftng.T At the end of the term of this Promissory Nofe'and dischargei.of this Prorniss6ry Note as set forth above, Holder shall mark this Promissory Note. iP�. MAIO 4andIlE AND. EXACT COPY.OF THE ORIGINAL A Z ESCROW aY! 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., reconveyannoe 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. P.reoayment. This Promissory Note may be prepaid -in whole or In part at . any time without the payment of any prepayment penalty. . 4.. Acceleration ofobil atiom Upon the occurrence of,an uncured evont of .. default of Maker under this Promissory Note, the Second Deed of Trust:or the Housing Agreement, and the 4poratlon of any notice and cure period provided therein or hereln, and upon thirty (30) days prior written notice to Maker, Holder.may, at koption,'declare thjs 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 Uds Promissory Note or the Second Deed of Trust or to enforce any provisions of either instrument, %teeter or ' not suit Is filed, hereon, Holder and Maker shall bear their own attorney's fees and costs., 6.. ' Severabil tv. The unenforceabillty or" invafrdlty, of any provision or' provisions of this Promissory Note as to any persons-or circumstances shall rtot,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. Modfications. Nelther,this Promissory Note nor any teen hereof may . be waived, amended, discharged, modified, changed or terminated drallf. nor shall arty waiver of any.providlon hereof be effective unless by'an inst urneiit Ili writing signed by . Maker and Holder. 6. YpM. Notwithstanding 'any provision In this Promissory Note, Second . -Deed of Trust or other loan document, the total 6abrT,dyfor payment In the nature of Interest shall not ekceed the limit now Imposed':by applicable laws of the Slate of•. California., - ' 9, GoveminaLaw. This Promissory Note, has. been -executed arid' 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; Calrfomla. (SIGNATURES ON FOLLOWING PAGE] CERTIFIED TO BE A TRUE AND . . . EXACTCOPY,OF THE ORIGINAL _. , „ i• 0%0A,,s,TA:rr,RF�S, E'JSCR{O'�W,' .. PA 01-3N ST -04253 As o 6/2012 3:06:48 PM Page I Seller's Final Settlement Statement Property: 378 23rd Street Closed Date: 9/5/2012 Newport Beach, CA 92660 $580.00 West Coast Escrow Escrow Number: ST- 04253 -JM WEST CQ_A,.,cj?' 140 Newport Center Drive #100 Newport Beach CA 92660 VIII I III nI III III II IaII� II Ip�;l� ESCROW Phone: (949) 721 -5000 INI ammPmp4' PbJIH$mY! Fax: (949) 721 -5010 ST- 04253 -JM $2,319.00 Escrow Officer: Julie McMillan $1,094.50 Seller's Final Settlement Statement Property: 378 23rd Street Closed Date: 9/5/2012 Newport Beach, CA 92660 $580.00 Seller: David A. Kiff and Leslie Thomas Lochner Escrow Number: ST- 04253 -JM Application Fee Debits Credits Purchase Price Contract Sales Price $995,000.00 Receipts $51,935.67 Seller Paid Closing Costs- Owners Title Policy $2,319.00 Seller Paid Closing Costs - Documentary Transfer Tax $1,094.50 Payoff Principal to BANK OF AMERICA $394,385.51 Daily interest charges to 9/6/2012 to BANK OF AMERICA $1,943.61 Borrowers protection plan to BANK OF AMERICA $198.61 Statement Fee to BANK OF AMERICA $60.00 Reconveyance Fee to BANK OF AMERICA $45.00 Recording Fee to BANK OF AMERICA $9.00 Payoff 2 Principal to CITY OF NEWPORT BEACH $471,250.00 Sales Commission Listing Commission to COLDWELL BANKER - LIDO ISLE $24,875.00 Selling Commission to TELES PROPERTIES $24,875.00 Prorations County Taxes (Unpaid) 4926.3800/6 mos 07/01/12 to 09/05/12 $1,751.60 Escrow Fees Escrow Fee $1,891.00 Archival Fee $39.00 Overnight Mail $10.00 Title Charges Wire Fee $35.00 Sub - Escrow Fee $62.50 Additional Settlement Fees Pest inspection to ANTIMITE TERMITE AND PEST CONTROL $2,365.00 Home Warranty to FIRST AMERICAN HOME BUYERS PROTECTION $580.00 Zone Disclosure to PROPERTY ID $114.00 Application Fee $161.00 Proceeds or Balance Due Seller Proceeds $15,000.00 Seller Proceeds $51,935.67 Balance Due $0.00 Totals: $995,000.00 $995,000.00 purposes. -� -„ � � -, ®� � � ®� � � j III 'i� i�l X36 r, I ATTIWHITE CUSTOM HOMES May 6, 2010 Dr. Tom Lochner David Kiff 496 Old Newport Blvd, Suite 4 Newport Beach, CA 92663 Re: 378 23rd Street Dr. Lochner & Mr. Kiff, Enclosed please find for your review the funding request package for the above referenced property. Please make check payable to Matt White Custom Homes for the following: Fund Date: 5/15/2010 Reimbursement Amount: $ 6,232.77 WCH Management Fee (15 %): 934.92 Total Current Funding: $ 7.167.69 Deposit - Payment : $ (2,000.00) Total Funding Due: Please feel free to call me at (949) 274 -3152 should you require further assistance. Sincerely, Jennifer Plukarski Controller 3090 PULLMAN STREET • COSTA MESA, CALIFORNIA 92626 • TEL (714 ) 557 -1325 • FAX (714) 557 -1838 .,ALITY" 040,:N0� : Aq Gc�,% .`_,. EkttTERED Bl , - 28092 FORBES RD., LAGUNA NIGUEL, CA 92677 19491 347 -2100 FAX: 19491 347 -2102 ryL-1i•S�Y 7p�,�W' TOM LOCHNER 359 E. GA G CA 90248 (3101436.1400 FAX: 13101 436.1402 1818660 QUAN- TIT : HARRY OLIVER 32.605 HARRY OIVEP TRAIL, THOUSAND PALMS, CA 92276 IL, THOUSAND 178D1 404.1500 FAX: (760) 409.1502 UIM 1485 S. WATERMAN AVE., SAN BERNARDINO. CA 92408 84.275 CABA20N RD. INDIO, CA 92201 (9091 915 -1800 FAX: (909) 915.1802 17601 393 -5300 FAX: (760) 3935302 BUILDING MA T E R I A L S WEBSITE: WWW.SEPULVEDA.COM EMAIL: INFO @SEPULVEDA.COM "Service that Delivers" CELEBRATING 50 YEARS OF SERVICE BRICK . TILE . BLOCK . SAND . GRAVEL . CEMENT . STEEL . STONE. LANDSCAPE SUPPLIES . PRECAST FIREWOOD . BBQ'S . GRAFFITI PROTECTION PRODUCTS . WATEPROOFING & DECK SYSTEMS . TOOLS SOLD TO: LOCHNER, TOM 378 23RD ST. NEWPORT BEACH CALIFORNIA 92663,- * * * ** CASH SALE * * * ** SHIP TO: 92663 S'AtIES 10/08/10 LN ACCT- t ' 040,:N0� : .w GQsl, FER 0. -, 9ACT . .`_,. EkttTERED Bl , JOB 00 *.. 145367 TOM LOCHNER ANIBAL 949.395.7999 1818660 QUAN- TIT : ,ITEM, NO /pESCFiiPTION LIST, ' UIM O NET EXTENSION 00xxxxxx SFCSR2 LB SANTA FE COP 2" SQ'S /RECT'S.(EURO) 0.423 LB 0 0.423 126.90 THIS MATERIAL IS 2" THICK +- 1 /21, AND SIZE RANGE FROM 811 X 8" UP TO 18" X 18" Natural Products including stone and slate may vary is size thickness, texture and color. They may flake, rust or even chanle color after installation. Many factors including size of pieces thickness, density, joint size and water make it very difficult t accurately estimate square foot coverage. Any discussion a itaff member has had with you or any coverage guides we have supp ied a e to be used as a guideline only. As the consumer, you are fu -.1y responsible for your project needs. We will deli er the qua tit and type of material ordered with no warrant of cove age, or th t tie goods shall be fit for any particular purpose. WARNING: This Product May Contain Chemicals Knowr To The State f California To Cause Cancer, Or Birth Defects Or Other Repro uct'v Harm. ADVERTENCIA: Este producto puede contiene compon me qumicoE co o ido en el Estado de California como causante de cnce , defectos de y otros daos al sistema reproductor. XXXXXXXX Inacimiento XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXX XXX X XXXXXXXXX XXXXXXXXX THANKS TO EVERYONE THAT HELPED MAKE THIS YEAR'S GOLF NOTE gC1° TOURNAMENT A RESOUNDING SUCCESS! SEE YOU NEXT YEAR! SUBTOTAL 126.90 TAKEN BY MAP REF. DELIVERY DAY I EST. TIME I LOADED BYIDELIVERED BY: TRUCK N0. I LOAD STOP 8.75% TAX 11.10 Spec. Inst.Thank you for your business. $138.00 Amt. Tendered: $138.00 Change: $0.00 TOM M/C 5466 $138.00 EXD: 02/29/12 AM AM X I I s PM I PM I 13:27:33 08 Oct 2010 40TICE OF NON- LIABILfi4TVW! E &% I'O iLiggEMATERIALS IS NOT RESPORNE'E FOR ANY INJURYI OR RCG &T TO PERSON OR VEHICLE'6VLLE ON PREMISES. CUSTOMER'S VEHICLE LOADED AT YOUR OWN RISK. JO RETURNS ACCEPTED AFTER 3D DAYS. ALL RETURNS MUST BE ACCOMPANIED BY A SALES INVOICE. ABSOLUTELY NO RETURNS ON NATURAL OR MANUFACTURED STONE, SEALERS, CLEANERS, CONCRETE, ,EMENT, AND ALL OTHER SACKED PRODUCTS. ALL RETURNABLE MERCHANDISE IS SUBJECTTO A 25% RESTOCKING CHARGE. SEE REVERSE SIDE FOR THE COMPLETE RETURN POLICY. ANY QUESTIONS IEGARDING ACCEPTABILITY OF THESE PRODUCTS MUST BE RESOLVED PRIOR TO INSTALLATION. NO ADJUSTMENTS WILL BE MADE AFTER INSTALLATION. PLEASE CONTACT OUR COMPANY MANAGEMENT STAFF IFYOU OR YOUR :CLIENT HAVE QUESTIONS OR CONCERNS ABOUT ANY ASPECT OF THE PRODUCT BEFORE ANY INSTALLATION TAKES PLACE THE PURCHASER AGREES TO THE TERMS AND CONDITIONS HEREON. INCLUDING THE REVERSE SIDE, WD ACKNOWLEDGES THAT HEISHE HAS READ AND RECEIVED A COPY HEREOF. NEW�r— OR�T� Cl_JXMOM' l IOODWORKNGj� * * *INVpICE * ** Sept. 22, 2010 Invoice to: Don Niebuhr dY nbuildcrCQgmail.corn Invoice for: Tom Lochner 378 23`d Street Newport Beach, CA Proposal for built -in, unfinished cabinets with melamine and pre - finished plywood interiors, Adobe doors, soft close bottom. mount slides for the following locations: Kitchen left of fridge ........... ............................... $870.00 Master bath pullman .......... ............................... $2,575.00 Secondary bath pullman ................ ......................$2,125.00 Living room stereo and TV ..... ............................... $3,580.00 Finish for living room ......... ............................... $1,175.00 Mantel ...................... ............................... $425.00 Laundry .............................. .....................$3,140.00 Bookcase .................... ............................... $980.00 Total....................... ..............................$ Paid on account ........................................ <3 /K� ..(�. 4 565.00 ZR)!E Balance ............................. .....................$10,305.00 This invoice ........................... .....................$8,000.00 7�ef� 15351AlAITTIER5 UNIT C -10 - COSTA MESA 9CA32627 0 949/631 -6397 I FAQ eOMPAN Y TRADING POST FAN COMPANY Narner Avenue r Goldenwes' FOR 30 YEARS IN A ROW... --el CASABLANCA STORE IN AMERICA! ntington Beach, CA 92647 148 -4353 o Fax: (714) 848 -4353 w GREG PRICE SHIP TO: " •�`� gprice @tradingpostfanco.com S,L 6952 WARNER AT GOLDENWEST HUNTINGTON 714/848-4353 - 2647 Fax: 714 848 8 93 SHIPMENT DATE: 05/24/11 SALESPERSON: Greg Price SHIPPING AGENT: PHONE: (714) 848 -4353 ; SHIPPING SERVICE: E -MAIL: gprice @tradingpo5lia TOTAL �. $978.59 ACC UP: 4 /4 API DI NRI9EI CARDIIEMBER ACKHOHLENEq RECEIPT OF 60ODS AIID /OR SERVICES III THE AHOUHT OF THE TOTAL SHOW HERE011 AND AGREES TO PERFORM THE OBLIGATIONS SET FORTH BY THE CARDNEINGER'S AGREEMEIIT WIN THE ISSUER THANKS FOR USING VISA' CUSTOMER COPY INVOICE 05/24/11 4:19:11 Phi FR,d 11111116' 11111111111111111IIIhIII 'Fllii?II�I!11'li INVOICE NO.:' ORDER NO.: .. POSTING DATE: -. SHIP ID: El RECEIVED QUANTITY THIS I-V ORDERED INVOICE 3 3 Emerson ENii352WW Blades Std 21 Appliance White Emerson EMSW405 4 -Speed Wall Control RCFP Rcvr White Ivory or Light Almond Battery included TOTAL QTY.: 3 3 3 3 9 9 TOTAL ORIGINAL ORDER (SO- 544862(: PAYMENT HISTORY 05/24/11 VISA REF: 5175/8658 REGULAR SALE PRICE PRICE 439 95 359 95 7-9:- 9359:95 89.95 79-95 TRADING POST SPECIAL TOTAL PRICE PRICE Ui 299.95 899.85 . 978.59 NET AMOUNT: 978.59 8.75% SALES TAX: INCLUDE FREE! 0.00 .. ar E .7 899.* r 78.74 TOTAL: 978.59 DEPOSIT APPLIED: - 978.59 THANK NK Y ®A � TOTAL PAID: 978.59 BALANCE DUE: 0.00 9 9�Yi�1l �A D! CJ TOTAL ORIGINAL ORDER BALANCE DUE: 0.00 PAID IN FULL ORDER COMPLETE MN �g"`7� KK %990` =C RE 4MLfiWff9 OwA MESA gA �9 m ,(R2 4?), 55'6 600' ©ue ohl�re�cel`p_i !ltemhC:dd_e� ,iSliip,Tta, IltM /2v(1fQ Thunk, �ynurforaall_ o. N, ing¢ NGter< GcaffSupplj; stfiet gPgmtunit3�toStserwicel '�},om- „matiltliri Cn tls, _ `Dale _ maAi>xo�ro X251 & j "T ER CBAPY SUPPLY 2990 -C RED HILL OVEHUE COSIP MESA, co 92626 (719) 556 -2660 Sale Merchant ID: 542929804193153 term ID: LUMS2 19:0U:42 11/16/10 Bntch��: 000145 5' trr Method�H $ VISA Sea,q; DD08 Appr Code: 0;% total; $ 1,021,11 APPROVED Customer CoPY 406- al 039 56 Sales Tax''(8;715 %a)', *AZ10 I _ _ I NVINT I, R,, CUM, � ALF To "SNUMP, IFL, W 4 r g S 6 Orp�-Fry 1; nivaill'C"e --- Invoice -- # Number l Tems Number l Tems Vial Protect /I 873, Ll ow ;iLL"CAL&, liem Code Description] ftanitity, PdcelEVch, Arffoffrit rs3mm T-JT8 4, 1, 8$(75 84.75jT SCME)s! R al �E lLQ/AMBR,[Y_Gr!'ISOL Qo 961001 9,6400P PREP.PED� &SGLE1BbRD�RIGHT'HAND' 1' 1, 8605 34-5j00Tl SCmObs, IGUK%,,M/ %6/8- DGE S-OWD(CRE I 92.25 921.257F" L&rF,10 D" w - 1 ', BRIO, GO i! S- -Jf',flbN 0A 11 110785'- 60 oJ237" 5/0Iu Tw, 3 jVP-R _314 FlJ, 'ITAMT,A1,R 1'.5), 18A-'4h �Olql T BPFOLO fDf58QolPM,@,N, -tlC-AMB�RJIYGP I Ail 42,4�&'3i 4 44 • OFSTF WR� f IP°ANEL , S W -0 AD it R'Q Q V, E C& BEAD 40 @ 92 - 1091 X 't8 3/ 1 V MMU,V 7=11/4 FAJ JW:KIIIPAUR, IA5? 24;'9,61 37-34T.- f**PAIID bEP_QSlfFt$656;00 -VISA W%54-7j*f* SA—F§ Tax l(,W7,5P./d), pp Thank youuforvalt6WW ng,MiterICtiftqu(PP lyft 4epp your MQ9jd-ipg ,ftec-ds. T A 01 L I C' MAML or 009IA A; :CA 9xIMS (714;); -55'6 MO FA (7449)5'5,K,4300 8i11'To Ship T6 Inii F%Goice tplbi Number 9/2d20,1_0 244:56 tplbi Number Teem - Rep fEihip Uia Project Dy'ue�onreceipt' I I 9/- 2.ffOI_O VOL L�CALi� e em Code Descei,ption, Quantity. r PncejEech �Anount - - - r13phD,WIN - �B'A54Q$iIO2 - PR1U� %= tCLA`SSIC'KNOB &JR9SE••TfE - 31; 62:150'( 118x7;'50)1' BALDWIN $BA'- 54,0_5: 1103%; 26Q;= IERIUn- il7LA`SS]CKNOB}'B;,�ROS &TTB 21ti 62504 125.00T' {SPL7T`iFINISI 1021ENTERIQR+ 2601NTERIOR i rBALDWGN IB�A1033eI O23 5X3;5 ©:R.Bt SQiCURNER H1NEE:- 9! 23 ,12533! 208:13T kORB(E°t>"CH)7 �6AIUZWIN �BA171035.2GOt3 �5X3t3 'CWRQME� SQ CORiNBR iFLINvE- 67 23 R 53'3! 13 &7M �©RB(EH`CIi) iBALUVZ'w ih66 -5 fO2 EDGEPQLL - 1,', 1t0.OQ' COOT BALI MMI ;BA046`- 5}260, FDGE PULL, lu 10,00 I O WT' �22'Rf �R UNDr�FI'[+3SH',RULL (2� I%8 )�- >L©�R�B /1i015� 3i ],0'501 III IMF x2211411 �Rb,1rJNLT�I'UUSHIRI[ IL +(2 ,L� /8 4)c- fQ13R©ME'/US25 2' 110;G0? 29EOOTI 11FREIGHT 'SRMPING HANDLINC,CHARGE C IOr55' ID's55T ;Su64otal $,7$11.931 Sales X6;1:0,} �Tfiulk,. ynusfomallawing{ Nt iter' C4• aftSupplyntheloppoeluniryto ,services;yowmoulding,neelds: i r� - $g9597' � t �;�a,l 407 30TH STREET NEWPORT BEACH, CA 92663 (949) 673 -1811 FAX (949) 673 -1897 NAME P ADDRESS W_2 p SOLD,BY CASH - . . HARC- ON ACC _DSE.RETD.. PAIGO 7 AVAWAV CITY. DESCRIPTION PRICE AMOUNT f Z c30 N PA Iz S L D WC- DQQA C. SR` ILLS G l✓tomn Aj('D-v 3� 8 232 a- NQ (I 5 ___ z10 S T Cb. l0-Z0 —/O TAX RECEIVED BY TOT �1 ALL CLAIMS AND RETURNED GOODS IN®° 037375 MUST BE ACCOMPANIED BY THIS BILL. GP -153 -2 Q(� � PRINTED IN U.S.A. ogQpj(/`�,iQLU pL' eig��:� C!�irfV ARM 91 1'IUEi'V71 P:... i.ITE i.ULL„6WV�.�. Q C La�LV. HOUSING ASSISTANCE AGREEMENT BETWEEN THE CITY OF NEWPORT BEACH AND DAVID KIFF TO SHARE EQUITY FOR THE REAL PROPERTY LOCATED AT 37823 Id Street, Newport Beach, California (APN #119 - 333 -12) THIS HOUSING ASSISTANCE AGREEMENT ( "Agreement ") is entered into this 13 °' Day of October 2009 by and behveen 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 provided in the Employment Agreement by purchasing real property located at 378 23d 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 Employees 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 Recorders 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 Cily 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 it 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 et 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 parsons. Notwithstanding any other provision of this Agreement, the provisions of this section shall survive the termination of this Agreement. 8. REPRESENTATIONS AND WARRANTIES 8.1 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 (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 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. 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 Stale of California in effect at the time of the execution oi 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 lava. 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) 641 -3139 [SIGNATURES ON FOLLOWING PAGE] Housing Assistance Agreemeni Page 10 of 12 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. EMPLOYEE By: David/ iff APPROVED AS TO FORM: Q IA By: Attorney for David Kiff THE �TY OF NEWPORT BEACH, a arte� City and r> unioipal Corporation ca aeucn, mayor CITY OF NEWPORT BEACH ATTEST: l By:� Leilani I. Brown, City /Clerk CITY OF NEWPO.R�T_BEACH APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY o� By David R. Hunt, City Attorney CITY OF NEWPORT BEACH [END OF SIGNATURES] Housing Assistance Agreement Page 11 of 12 Exhibit "A" Second Deed of Trust RECORDING REQUESTED 9Y: AND WHEN RECORDFO WILTO' City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, California 92652 -6915 Attn: City Clerk SPACE ABOVE THIS LINE IS FOR RECORDER'S 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 2V 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, WITNESSETH: 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" 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 aulhomy hereinafter given to and conferred upon Beneficiary to collect and apply such rentss• issues and profits for the purpose of securing (1) payment of the sum of 5471,250.00 with interest thereon arcordina to the 'arms of a promissory node or notes of even date herewith made by Trustor, payable to order of Beneficiary, and e:Gensions or renewals thereof, (2) the performance of each agreement of Trustor incorporated by reference or axtained heroin and (3) payment of additional sums and interest thereon •n., hich may hereafter be loaned to Trustor, or his successors of assgrs, 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 he property above described,'rrustor expressly makes each and all of the agreements, and adopts and agrees to pedoml 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 O:ange 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 COUNTr BOOK PAGL COUNTY BOOK PAGE COUNTY BOOK PAGE Alameda 1280 556 Kings 858 713 Placer 1028 379 Serra 38 187 Alpine 3 130 -31 Lake 437 110 Palmas 166 1307 Sskiyou 'OG 762 Ame4or 733 438 Lassen 192 367 RI cmide 3778 347 Solana 1287 E21 Butte 1330 513 Les Angeles T -3870" 874 Sacramento 5039 124 Soremn 2367 427 Cala,,eras 195 338 Madera 911 136 Sao Benilc 300 405 sr.^; Iau: 1970 56" Col•:sa 323 321 Mare 1849 121, S..n Bern :di.a 6213 768 S_ter 655 555 Contra Costa 4684 1 Manevao go 453 San Francisco AF.04 5966 Temarns 457 16 "s Del Norte 1M 540 Men^alo 657 99 San Joaquin 2845 263 T iri:y 108 595 El Coineo 7e4 635 Mercer'. 11360 753 San Los Cassa 1311 137 Tulare 2530 1g3 Fres+w 5052 623 Modoc lg1 93 San'W'leo 4778 175 1uotumna 177 169 G1urm 469 76 Morro ce 302 8anla ea=ra 2065 651 vemum 2007 237 I imboldl Vol 83 Monterey 357 239 Ssr,1a claa 3626 664 Yob 769 16 Imponhl 1189 101 Napa 7U4 742 Santa Cruz 1338 607 Yuta 338 693 hye 135 072 Nirrada 363 94 Shasta we 633 Kwn 3756 69D Orange 7182 16 San Diego SERIES 5 Bart 1964, 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 if set forth at length herein, and Beneficiary may charge for a statement regarding the obligation secured hereby, provided the charge therofc:r does not exceed the maxinnum allo:ved bylaw. The undersigned PUstor, request's that a copy of any notice of default and any notice of sale hereunder be mailed to him at his address hereinbefore set forth. Dnhd: _, 2009 STATE OF CALIFORNIA COUNTY OF ORANGE )SS On before me, , Motary Public, personally appearml , personally known to me (or proved to me on tha basis of satisfactory evidw=) to be he person(s) whose names) is /are subscribed to he within instrument and ackper.Medged to me that helshefihey executed the same in hisrhedheir authorized capacity(ies), and it',at by hislherltheir signatures) on the instrument the Person(s) or the entity uvon behalf of which the parson(s) acted, executed the instrument. WITNESS my hand and official seal. Signature David Kiff Trustor Trustor TrJsLor Trustor (TWs area for of,itlal miadol sea)) DO NOT RECORD The following is a copy of Subdivisions A and B of the foatious Deed at Trust recorded in each county in Cahlomia as stated to the fore _ge:ng Deec of Trust and incorporated by raorence in said Deed of Trust as bell in a part thereat as if s tit forth at length therein. A. To pvotecl ho secudly of this Deed of Trust, Truslor agrees 1) To keep said property in good condition and repair, tot to remare or deniolsh arty building thereon, to complolc or roalore eternally and in Good and vvcrw;hantke manner any building which may be constructed. damaged or destroyed Linereon arid to pay when due alt claims for Iabar perkrtned and materials ':meshed therefor, to comply with all laws affecting slid property or iegizinig any alterations or tmprovameds to be made fiherecin. not !o commit or nennit :waste thereof; not to commit, srffa_r a permit any act upon said pmperiy in vtdation of few. to cultivate, irrigate, fertt!ize, fumigate. prune and do aft other acts willch from the characler or use of sand properi may be reasonably necessary, tine specific enumerations herein not oxducing Lie general. 2) To provide, maintain and deliver to Beneficiary fee intitxance sauslactory to and •rite less payable to Beneficiary. The aM:ount co" acted Udar any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Bencficrsry may oelermme• or at opson of Beneficiary the enure amount so oo!lacted er airy part hereof may no released to Tn,stcr. Suds ao;frcattoh or release stall no' core or verve any detour or notice of default narsinder or invafcate any act done pursuant to such notice. 3) To appear In are defend any action or mmoceeding purporting to affect the security hereof or Vie itehs or pourers of Berieficarf, or Trustee; and to pay all costs and expenses, inchMing cost of ev&rice of atle and attorney's fees In a reasonable sum. in any such acthlm or proceeding in which Beneficiary or Tn :stee may appear, anc in any strl brought by Beneficiary m foredose this Deed 41 To pay: it least ten days before de;ihcuers y all mires and assessments affe_d:rr said pnhperty, indutung assessments cn appuhenant water stock, vdten due. all encumbrances, charges aria bens, wilh interest, on satd property or any parr hereof• e:tdch anPear to be utter pr suptim, hereto; all costs, fees and imponses of Iles Trust. Shout Truslor fail to make any payment or to doh any act as herrvn provided, then Beneficiary or Trustee. but without cb!xhalwn so to do and vigour notice, in or demand upon Truslor and without neleasing Truster from any obligation hereof, may, make or do the some to such roamer and to such ti .tend as rather may deran necesssry to protect the security hereof. Brnefidary or Trustee being aulthori+ed to enter upon said property far such purpcsa; appear in an defend any action or procecai.•g purpo.•ting to affect the security hereof or the rights or payers at Beneficiary or Trustee; pay, purhase. contest or compromise any onc.nnbrance, charge or lien v.thlch in he judgment of either appears to be prior or supenor ho alof 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 amended by Beneficiary or Trustee. with interest hero date of exponditure at the amount allowed by L.:v in 0lect at the date hereof, and to pay hr any statement provided for by law.' in effeu at the dale hrrecf regarding the obligation secured hereby any amount demanded by the Beneffuitafy not to exceed the maximum agrn:rd by law at the Urno when said statement is demared. B. It is mutually agreed: 1) Thal any armro of damages in connection with may condemnation for public use of or injury to said property or any part thereof is hereby assirned and shall be paid to Beneficiary who may apply or release such Monies received by him in the same manner and W th the same effect as above provided for disposition of pmcceds of fire or other insurance. 2). That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his tight either to require prompt payment when due of all outer sums so secured or to declare default for failure so to pay. 3) Thal 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• and without affecting he personal liability of any person for payment of (tic indebtedness secured hereby. Trustee may: ieconvey any part of said property; consent to the making of any map or plat thereof; join in granting any easem(xrt lheroon, 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 pald, and upon surr_!Mer of Geis Deed and said note to T rustoo for cancol!alon and mterron or other disposition as Trustee in its sole discretion may choose and upon payment el is fees, Trustee shall reconvay vvitlmut warranty, the property then held hereunder. 11ho recitals in such reccnveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Graniee in such reconveyance may be described as "the person or persons legally entitled thereto". 5) That as additional security. Truster hereby givr_ to and cpnfers Upon. Beneficiary the right, pourer and auilhority, during the c onunuanee of "hose Trusts. to collect Lie rents, issues and profits of said property, reserving unto Tms it the right, pdor to any default by Truster In payment of any indebtedness secured hereby or in performance of any agreement hereunder, to cRlact and retain such revs. issues and profits is 1 hay becxne, due and payabe. Upon any such default. Beneficiary may at any lime hwthout notice• either in parson, ty agent. or by a receiver to be appointed by a court• and without regard to me adequacy of any secmty fu the Indebtedness hereby secmol. ante; upon and taka pos ses=_Icn of said property a any pant thereof, in his own name sue tort or otherwise collect such rents. Issues, and profits, including dwse past due and unpaid, and apply the same• less co5s and expenses of operation and oo9eclln, including reasonable ahomeys fees, uponarry indebtedness secured hereby, and is such order as Beneficiary may dcturmme. The entering upon and talcum, possession of said property. the collection of such rents, issues and profits and he aupgoafion Lbareof as aforesaid, stall nor cure or vane any delacft of notice of default hereunder er ir•.alidate any au done purr-7uani try such notice. B) That upon default by Tnrsar in payment! of any indebtedness secured hereby or in pedo;man ce of any aereernent heicurrder, Beneficial may declare all sums secured hereby immeeiaely due and payable by delivery to Trustee of wrihen declaration of default and demand to: sale and of t-4 "wn notice of default and of elea}on to cause to be scAd said property, which notice Trustee shag cause to be filed for record Benefidary also shall de;.ssi: viki Trusieli Ihb Deed, said ndre and ag clainuments evidencing expenditures secured hereby. Alter U:e lapse of such time as may then be required bylaw lotbwinp the recordation of said notice of default, and notice of sale haying been given as thcro rrqu Pod by law. Trustee, without demand on Taislor. shall seg said preperay at the u•ne and place fixed by h In saxi notice of sale, eiher as a whole or In separate parcels. and in such order as it may determine. at public auction to the nighest t>;✓-der for cash in lawful money rof he United States, payable at aide of sale. Trustee_ may postpone sale of all or any podien o! said property by public announcement at sure time and place of safe. and from time to time thereafter may postpone such sale by public arawuncemunt m the time fixed by the preceding postponement. Trustee shall deriver to such purchaser its deed conveying Via property so sold. but vvimouf any covenant or wananfy, express or implied. The recitals In such deed of any matters or facts shall be conclusive proof of the truthfulness hereof. Any person, indud;rQ Tnh51o:: 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 evidencee of Wo in connection with sale. Trustee shall apply the proceeds of sale to payment of: all sums expended uruler he terms herect. not then repair, with accueti Interest at the amount allowed by law m effect at the date hereof: all other sums then scarred hereby: and he remainder. if any, to the person or persons legally entitled thereto. 7) Beneficiary, or any successor in ownership of any mdeblecLhess secured hereby, may from Ume to bme, by instrument in vr"ng, substitute a successor or successors to any Trustee named herein or acting hereunder, which Instrument, executed by the Beneficiary and duly acknoWedged and recorded in the office of the recorder of the county or =infies where said property is situated shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyance tram the Trustee predecessor, succeed to all its title, estate, rights, powers and duties. Said instrument must contain the name of the original Tmstor, Trustee and Beneficiary hereunder, Vie book and page where this Deed is receded and the name and address of the new Trustee. 8) That this Deed applies to, inures to the benefit of, :md 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 secured hereby, whether or not named as Bencliriary horem. In this Deed. whenever the ocnled sc requues, the masculine gender includes the bomimnc and(of neuter, and one sing::lar number includes the plural. 9) That Trustee .accepts ;hls Trust:: #ten ens Dead, du)' execuaefl and ad.novdedxd. Is made a public record as protdded by law. Trustee is not ob igeted to notify any party hereto of pending sale ur;dcv any other Do, d of Trust or of any action or procoedimj In wiich T. rustor, Beneficiary or Trustee shut be a part' unless brought by Trustee. DO NOT RECORD TO FIRST AMERICAN TITLE INSURANCE COMPANY, TRUSTEE: REQUEST FOR FULL RECONVEYANICE The undersigned is ;ire legal ovner and to!der of he nata or rote;, and of all wher indebtedness secured by the toregoirig Deed of Trust. Said note or rm:es, together wth a Ghee 1.idebte,; r s sucu ed by said Deed of Tn_,L have been fu':1y paid and sausredl and you are hereby requested and directed, on payment to you of any sums ovAng to you under the terms of sale Deed of Trust, to cancel satd note N notes above mentronod. arv: all outer drdonces of lnebtedness secured by said Devil of Twsi c rvemd to you heremh. together Ath the satd Deed of Trust• and to ieeom'ey, wihout::aramy. to the pasties designated by the, lams of S&,' Dees! of Trusl. all the estata nw., held by you undor the same. Dated Pdaycr, E,ty of Newport Beaen City Attorney, City of Nec.7od Beach z 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 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 Housing Assistance Agreement Page 12 of 12 Exhibit "B" Promissory Note 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 23`d 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 %) 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 Makers 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. Nohvithstanding 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. MAKER By: David Kiff APPROVED AS TO FORM: By: Attorney for David Kiff c 11 CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT g3cllB Agenda Item No. 11 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? Is 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: o The City would contribute $471,250.00 towards the property's purchase. ® 4ousing Assistance Agreement October 13, 2009 Page 2 o ' �Uporr 01V of the property or at a point not less than twelve (12) months after the City Manager's employment ends with the City, the City is entitled to 50.4% of any equity resulting from the sale of the property. o 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 Q 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 closing costs.) Fundinq 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). Submitted by: David Hunt City Attorney Attachments: Housing Assistance Agreement JJ 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 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 2P Street, Newport Beach, CA THIS HOUSING ASSISTANCE AGREEMENT ( "Agreement ") is entered into this 1311" Day of October 2009 by and between the City of Newport Beach, a California municipal corporation and Charter City ( "City") and David Kill, 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 contributioVrovided 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 Agr9ment Page 2 of 10 r� 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 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(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. 11 Housing Assistance Agreement Page 3 of 10 3. TAXES, MAINTENANCE ARID 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. RECORDATION OF AGREEMENT ARID 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 Propertys 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 Sank) but superior to all other liens and encumbrances that may attach to the Property in the future. 6. CONDITIONS PRECEDENT TO CLOSE OF ESCRO{ib 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 Agrment 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 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 Employeelescrow 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. 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 Agr® ent Page 5 of 10 Is 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. 8. REPRESENTATIONS AND WARRANTIES 8.1 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 (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. (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 Housing Assistance Agryment 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 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 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 Agreee ent 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 attorneys 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 terns of this Agreement. 10.8 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 AgrMent 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. 10.9 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 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 Agr0ment 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 tiles To City: City Clerk City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 (949) 6443020 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] Ak Housing Assistance Agrent 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 s Wo I qyjkyj •�: 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: By: Leilani I. Brown, City Clerk CITY OF NEWPORT BEACH [END SIGNATURES] 1 `�,1