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HomeMy WebLinkAboutAdopt Resolution 2004-53 & RDA Resolution 349 The Strand Pro RECORDING REOUES"rE �I 9 0,5- b.®Y - FIRST AMERICANTITLE COIk' T / This DocumeAt as electronicallyrecorded b NATIONWCOMMERCIAL SE S Y COMMERCIAIJINDUSTRIALDi-;.JN American Title Recorded in Official Records,Orange County Tom Daly,Clerk-Recorder WHEN RECORDED MAIL TO: II I II II I II I II I Redevelopment Agency of the City of IIIIIIIIII+IIIIIIII�IIIIIIII+IIiIIIIII�IIIIIIIIIIIIIIItIIIIIIIIII 6.00 Huntington Beach 103 2004000787126 08:00am 08/31/04 0.0 c/o Dept. of Economic Development 18 R01 1 P P 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 Main Street Huntington Beach,CA. 92648 Attn: Gus Duran SPACE ABOVE FOR RECORDER'USE /0 2l — JCiFrV s7-, Escrow No. /✓agE02� /��'—•3f'� Recon No. Loan No. 40896-1 FULL RECONVEYANCE CALIFORNIA BANK& TRUST, formerly known as Eldorado Bank, duly appointed Trustee under the following described deed of trust: Dated: July 7, 1988 TRUSTOR: Redevelopment Agency of the City of Huntington Beach,California, a Public Agency Recorded: July 28, 1988 as Document#88-367220 of Official Records in the Office of the Recorder of Orange County, State of California said deed of trust describes the following property: As per recorded deed of trust APN#024-147-34 having been requested in writing, by the holder of the obligation secured by said subordinate deed of trust, to reconvey the estate granted to trustee under said deed of trust,DOES HEREBY RECONVEY to the person or persons legally entitled thereto, without warranty,all the estate,title, and interest acquired by trustee under said deed of trust. CALIFORNIA BANK&TRUST flea Eldorado Bank Date August 12,2004 ie Swopes Manager State of California County of D ra n c' On 1240 before me, d 'v ,/ Notary Public,personally appeared j_ea.0iiie Je.v OM-S personally known to me to be the person whos name is subscribed to the within instrument and acknowledged to me that hekhL xecuted the same in hisFieylauthorized capacity, and that by hi e Aignature on the instrument the person or the entity upon behalf of which the person actecTexecuted the instrument. Witness my hand and official seal. JUDYC.FUJII Commission#1360286 .m Notary Public-Calitomia Notary Pu is Orange County My Comm.Expires Jul 3.2006 S , ROE Z F lr �� J ` Cit of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF ECONOMIC DEVELOPMENT Director _ 714/536-5582 Redevelopment 714/536-5582 FAX 714/375-5087 Housing 714/536-5542 August 18, 2004 Ann Condict West Coast Escrow 2121 East Coast Highway#120 Corona Del Mar, CA 92625 Dear Ms. Condict: Re: APN#024-147-34 Vacant Property First American Title Preliminary Report Issued July 30, 2004 Item#7 of Schedule B— Eldorado Bank Loan Attached please find a Full Reconveyance for the loan listed on item #7 of the preliminary title report issued by First American Title Report on July 30, 2004. This Reconveyance is for the property located on the second block of Fifth Street and owned by the Redevelopment Agency of the City of Huntington Beach. Apparently, the Reconveyance was never recorded upon payment of the loan to Eldorado Bank. Since that time, Eldorado Bank was acquired by California Bank and Trust. Thus, the Reconveyance is from said bank. Please record this Reconveyance prior to the closing of escrow for the property. Your assistance on this matter is sincerely appreciated. Should you have any questions, please feel free to contact me at (714) 374-1529. Since , i ustavo A. uran Housing and Redevelopment Manager Attachment: Full Reconveyance c: David C. Biggs, Director of Economic Development Keith Bohr, Consultant Curt Stalder, Lee &Associates 1 r Recording Requested By: WHEN RECORDED MAIL TO: Redevelopment Agency of the City of Huntington Beach c/o Dept. of Economic Development 2000 Main Street Huntington Beach,CA. 92648 Attn: Gus Duran SPACE ABOVE FOR RECORDER'USE Escrow No. Recon No. Loan No. 40896-1 FULL RECONVEYANCE CALIFORNIA BANK& TRUST, formerly known as Eldorado Bank,duly appointed Trustee under the following described deed of trust: Dated: July 7, 1988 TRUSTOR: Redevelopment Agency of the City of Huntington Beach,California, a Public Agency Recorded: July 28, 1988 as Document#88-367220 of Official Records in the Office of the Recorder of Orange County, State of California said deed of trust describes the following property: As per recorded deed of trust APN#024-147-34 having been requested in writing,by the holder of the obligation secured by said subordinate deed of trust,to reconvey the estate granted to trustee under said deed of trust,DOES HEREBY RECONVEY to the person or persons legally entitled thereto,without warranty,all the estate,title,and interest acquired by trustee under said deed of trust. CALIFORNIA BANK&TRUST fka Eldorado Bank Date August 12, 2004. ie Swopes &Manager State of California County of 0 ra h3fi On F)12-loy before me, of u r Notary Public,personally appeared tTea. i7 e Jc-J OAeS ,personally known to me to be the person whos ame is subscribed to the within instrument and acknowledged to me that he xecuted the same in hisriepl uthorized capacity,and that by hi ie ignature on the instrument the person or the entity upon behalf of which the person actec, executed the instrument. Witness my hand and official seal. JUDYC.FUJII CommMlon#1360286 (� Le Notary Pnge - unty Notary Pu is Orangemla CountyMy Comm.Explres Jul 3,2006 STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR.Commercial Real Estate Association May 11, 2004 (Date for Reference Purposes) 1. Buyer. 71 Ko,'+ 1.1 Robert7!�� ("Buyer") hereby offers to purchase the real property, hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or individually,a"Party"), through an escrow("Escrow")to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder") whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 , Phone No. (949) 644-9390 Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that is the subject of this offer consists of(insert a brief physical description) an approximate 5, 300 square foot vacant parcel of land. is located in the City of Huntington Beach County of Orange State of California , is commonly known by the street address of 214 Fifth Street and is legally described as: to be provided through escrow (APN: 024-147-34 ). 2.2 If the legal description of the Property is not complete or is inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical t distribution systems (power panel, bus ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air conditioning equipment ("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings; and N/A (collectively,the"Improvements"). 2.4 The fire sprinkler monitor:❑ is owned by Seller and included in the Purchase Price,or❑ is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided in Paragraph 2.3,the Purchase Price does not include Seller's personal property,furniture and furnishings,and N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be$8 95, 000.00 payable as follows: (a) Cash down payment, including the Deposit as defined in paragraph 4.3(or if an all cash �)©`� ? f transaction,the Purchase Price): so (Strike if not applicable) $ (G) 13uyeF shall take title to the PFOpeFty subjeet to the following existing deed(s)of fri .iAn Existing Note(""Hirst Note")with an aid pFiAGipal hnla...a, of the - - Glesing of aPpreximately; $ 2--aid rirs.Note is payable e.Q (Strike if ee! including int, �`�.�-at the Fate Of % nW....•a i....ai....tie _ apfiGab ei entire unpaid balain.,,.e is due en -- - - -- An Existing Note("SeGond Note")with an unpaid PF*nG*Pal balanre as of t Glesing of afire;imately; $ - Sai 2-sGand Note is payable ate peF Fnenth, neluding inteMtat-the Fate of 9annum 4 P8F until paid i ..pie.the _ erltire unpaid~a w,anrcis due on � (StFike if not (d) IBUYeF shall give SelleF a deed Of tFust("PurGhase Money Deed efTFUSt")ant ("PuFGhase Money Note")in the amount ef: �j $ tI,047, -7a0- 00 Total Purchase Price: 3..2 If Buyer is taking title to the Property subject to, or assuming, an Existing Deed of Trust and such deed of trust permits the beneficiary t C� PAGE 1 OF 8 App UED AS TO FORM i INITIALS Z R MrH,City Attorney INITIALS ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION nie Mulvihill 513110(04 FORM OFA-4-8/OOE Deputy City Attorney demand payment of fees including, but not lip. .-d to, points, processing fees, and appraisal fees a:. _ condition to the transfer of the Property, Buyer agrees to pay such fees up to a maximum of 1.5%of the unpaid principal balance of the applicable Existing Note. 4. Deposits. 4.1 ❑ Buyer has delivered to Broker a check in the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, or LEI Buyer shall deliver to � Escrow Holder a check in the sum of$20, 000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited into the Escrow's trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check or funds shall, upon request by Buyer, be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement, Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through (k) are approved or waived, Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit"),in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction.The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is . NOTE: Such C=) interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. 5. a sum equal to at least 6.1 This 049F as rentingent upon 13UYBF obtaining ftom an*RSUFanGe rempany,finanGial Institution oF otheF IendSF, a GeFnFn*tFASAt tG lend to Buye Of the PUFGharse PFOGS,at teFFnS Feasenably aGGeptable to BUYSF. Surh loan("Now Loan")shall be seGuFed by USt GF Fnedgage on the Prapedy. if this AgMeMent PFGV*des fQF S8118F tO GaFFy baGk juniGF finaAroi%then RAIIAF shall have the Fight 110 appFGV8 the teFFnS of the Now Loan. Selle-r shall have 7- days fF9FA FeGeipt of the iserAmillment setling faFth the PFOposed terms of the N&AF Loan tG aPPFGV8 OF dusappFGY8 of sush PFGpesed t8FFnS. If 68118F 414IS tG notify ESGFOW HeldeF, iA Wdting, of the dmsappFGval within said 7 days it 6hall be- 6.2 13UYSF heFeby agFees to diligently puFsue obtaining the New Loan. it BUY8F shall fall to notify Its Br-ek8F, rmsGrow HoldeF and SelleF, In WFItIng within days following the Date of Agreement,that the Now Loan has not been obtained, it shall be isenclusively presumed that BUYeF has elther-obtained said New 6oan or has w-alved this New Lean GentingenGy- 5.3 if,afteF due diligenGe, 13UYeF shall notify its BFakeF, ESMI.A.0 HA-ld-Aff alRd-S-A-118F. in Witing,within the time speGified on paFagFaph 6.2 hereof,that BUYSF has AGt obtained raid New Lean, this AgFeement shall be teFFAinated, and BUYeF shall be entitled to the PFOFnpt retUFA Of the Deposit, plus any q RteFest eaFned theFeGA,less GAIY ESGFOW WGIdeF and Title GempaRy GanG811ation fees and GGStS,whiGh BUY8F shall pay. 6. 6.1 The PUFGhase Money Note shall provide for inteFeSt on unpaid PFInGiPAI at the Fate of 0 interest paid as fella The PUFGhase Money Note aAd PUF&a6e Money Dead of T-Fust shall be- e--n the GUFFent feFn;s Gemmenly used by Esr.Few HeldeF, and be junenr gnel subGFdinate enly to the Existing Note(s)andiGF!he New 6ean SXPFessly Galled fGF by this AgMement. 6.2 The RUFGhase Money Plate aAd!GF the PUFGhase Money [Deed Of TFUSt shall Gentain pmvisiens FegaFd*i;g the following (see also paFagFaph (a) Pmpaymeni.PFinGipal Fnay be pFepaid an whole eF on paFt at any time without penalty,at the eptien of the BuyeF- 0 shall be payable With F86PBGt te any payment 9f PF*nGipal, *AtWeSt, OF etheF GhaFg86, A9t FRade within 10 days aft6F *a due. (G) Due On Sals. In the event the SuyeF Sells OF tFaAsfeF6 tit'S tG Ills PFGPeFty OF any peFtlon theF90f,then the SeIISF may,at 68118F'r.eption, F8qU*FG the entiF8 unpaid balanGe of said Note to be paid in full. 99118F's behalf a request fOF notire of default and!OF sale With FBgaFd to earh medgage aF dead of tFus!tG WhiGh it will be subeFdfAate. 64 WARNINC3- C--Ai-IFt-3RhIIA LAW 13069 NOT ALLOW DEFICIENCY JIUDGEMENTS ON SELLER FINANCING. IF 0-11-1)(SR ULTIMATELY —.DEFAULTS ON THE LOAN,,SELLER'S ER'S SO E RrMrm I DY IS TO FORECLOSE ON T LIC C PDADDTV ....ter 7. Real Estate Brokers. 7.1 The following real estate broker(s) ("Brokers") and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): 0 Lee & Associates—Newport Beach, Inc. represents Seller exclusively("Sellers Broker"); 0 Team Real Estate Development (Keith Bohr) represents Buyer exclusively("Buyers Broker");or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement. See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyers Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein, other than the Brokers named in paragraph 7.1, and no broker or other person, firm or entity, other than said Brokers is/are entitled to any commission or finders fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify,defend,protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller, this Agreement, including any counter-offers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder may, however, include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers, in writing, of the date ascertained. 8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement,applicable law and custom and practice of the community in which Escrow Holder is located, including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow(the "Closing") by recording a general warranty deed(a grant deed in California)and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement. PAGE 2 OF 8 APP ED AS TO FORM J LM gl�F2A'::�,City Attorney INl IALS � r INITIAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION )3y u)v 7�Z0�04 FORM OFA4-8/OOE Deputy City Attorney 8.5 Buyer and Seller shall each pay oi,_ ,ialf of the Escrow Holder's charges and Seller sha.. ,,ay the usual recording fees and any required documentary transfer taxes.Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs(b), (c), (d), (e), (g), (i), (n),and(o),9.4, 9.5. 12, 13, 14, 16, 18, 20,21, 22, and 24 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement, except to the extent of a breach of any affirmative covenant or warranty in this Agreement. In the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing; provided,however,that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Seller's breach or default, then at Seller's request, and as a condition to the return of Buyer's deposit, Buyer shall within 5 days after written request deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property. Provided, however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (1) the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided. (a)Disclosure. Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association ("AIR")standard form entitled "Seller's Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 eF---days following the Date of Agreement. Buyer has 30 deye from the Date of Agreement 10 days#em the FeGeipt Of said d*SG'Gr.UFeS to approve or disapprove the matters disclosed. (b) Physical Inspection. Buyer has40aF 30 days from the FeGeipt ef the PFOPeFty Information Sheet OF the Date of Agreement, whor.hever is late ,to satisfy itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report. Buyer has 30 OF days from the FeGeipt of the PF9P8Fty 109FFnation Sheet OF the Date of Agreement, to satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture, disposal or effect, render it subject to Federal, state or local regulation, investigation, remediation or removal as potentially injurious to public health or welfare. A "Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection. Buyer has 30 eF—days from the Date of Agreement,whisheveF�s later;to satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (e) Governmental Approvals. Buyer has 30 OF days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning,building and safety,fire,police, handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (f) Conditions of Title. Escrow Holder shall cause a current commitment for title insurance ("Title Commitment") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10 of days following the Date of Agreement. Buyer has 49 30 days from the Date of Agreement receipt of the title Commkment and Underlying IDersum—ent-A to satisfy itself with regard to the condition of title. The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation, at Seller's expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer has 30 OF days from the Date of Agreement FeGeipt of the Title GemmitMent and UndWlyiAg D991 IMARtS to satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA") standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy, in which event Buyer shall pay any additional premium attributable thereto. (h) Existing Leases and Tenancy Statements. Seller shall within 10 OF days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collectively, "Existing Leases") affecting the Property, and with a tenancy statement ("Estoppel Certificate") in the latest form or equivalent to that published by the AIR, executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 3040 days from the Date of Agreement to satisfy itself with regard to the Existing Leases and any other tenancy issues. (i) Other Agreements. Seller shall within 10 OF days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 30 4-0 days from the Date of Agreement to satisfy itself with regard to such Agreements. Q) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency. (k)Existing Notes. if P8FagFaph 3.1(r.)has not been stFirken,Se"OF shall within 10 OF days of the Date of AgFeement PFGvide Buye with legible Gepies of the Existing Notes, Existing Deeds of T-Fust and F81ated agF vel)�1_111 eban Documents")to wh!Gh the PropeFty will - -. ubjeGt aft8F the Closing. Er.GFGW HaldeF shall PFGFnptly FeqUeSt fFG thA haldArg a the Existing Neter. a b8A8fiGiaFy statement ("Benefirlary Statement") GGnfiFrning; (1) the arne-unt of the unpaid pdneipal balanre, the GUFFBAt inteFeSt Fate, a-Ad the d-ate to whiGh inteFes! Is paid, and (2) the natUFe and aFneunt of any impounds held by the benefir.*aFy On Gannertion with surh loan. BuyeF her. 10 OF days fFGFn the FBG80pt of the Locam DOGUMents and BeneficiaFy Statements to satisfy itself with FBgaFd to suGh finandng.Buyegs obligation to Giese or.GOAditiened UPGA BUYSF being able to (1) Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has 10 eF 30 days from the Date of Agreement to satisfy itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 eF—days of the Date of Agreement. (m)Destruction, Damage or Loss.There shall not have occurred prior to the Closing, a destruction of, or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure. If the cost of repair or cure is$10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option,within 10 days after receipt of written notice of a to os ing PAGE 3 OF 8 ApPR. .NIBn AS TO FORM ITIALS j 1 mi C TH,City Attorney I IAL ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION —� FORM OFA-4-8/00E Bylm6aie Mulv&ll y City Attors�r5lyD 10L, more than$10,000.00 to repair or cure,to eiti— terminate this transaction or to purchase the Propei., .,otwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure is more than$10,000.00, and Buyer does not elect to terminate this transaction, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use, occupancy,tenants, or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q) Brokerage Fee. Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller.and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of, and may be waived by, Buyer, and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election").Seller's failure to give to Buyer within such period,written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. If Seller elects,either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the election, within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item, or to terminate this transaction. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item without deduGtiGA OF offset shall constitute Buyer's election to terminate this transaction. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of: (a)the applicable contingency period(s), (b)the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and agrees that until such time as all Buyer's Contingencies have been satisfied or waived, Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers. The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (e)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents,the Purchase Money Deed of Trust being in recordable form,together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate tax service contract(at Buyer's expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage(or ALTA extended, if elected pursuant to 9.1(g))owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing Notes, utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s), n i the APP VED AS 1. i-ORM PAGE 4 OF 8 AX_ TH#Car Attorne, INI IALS 571a INI IAL ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Y FORM OFA-4-8/OOE event that a Beneficiary Statement as to the _pplicable Existing Note(s) discloses that the unpaiL �.incipal balance of such Existing Note(s) at the Closing will be more or less than the amount set forth in paragraph 3.1(c) hereof("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true, material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in its present condition, ordinary wear and tear excepted. The HVAC, plumbing, elevators, loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank. (d) Compliance. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes or covenants, conditions or restrictions, or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediation, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materialmens'lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency, arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seller prior to the Closing. 0)No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k)No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy,insolvency or probate proceeding. (1) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will,by the time called for herein,make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in,and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law, have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness, and/or validity of said documents,all of which Buyer relies on at its own risk. Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work, including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct. All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnity, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabilities,losses,expenses(including reasonable attorneys'fees),damages, including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each, diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding (including arbitration) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder,the Prevailing Party(as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys'fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be,whether by compromise, settlement,judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys'fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Brokers Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer is the defaulting party, payment of said Brokerage Fee is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice, demand, request, approval, disapproval or other communication,each such communication shall be in writing and shall be delivered personally, by messenger or by mail, postage prepaid,to the address set forth in this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered. Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier. Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice in writing, designate a different address to which, or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 AP OVFD AS TO FORM PER Mua GRATH,City Mom'. INITIA S©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-4-8/OOE ,Mlt"0161 Attorney 50016'i 20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 it shall be deemed automatically revoked. 20.2 The acceptance of this offer, or of any subsequent counteroffer hereto, that creates an agreement between the Parties as described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20, 000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Buyer Initials Seller Initials 22.1 ANY GONT-DON'IE'RSY 'A'S TO �'A"IHF=T'HE'R- SPI I ER IS; FIN'[TIT' ED TO THE LIQUIDATED DAMAGES ANIDiOR BUYER Is ENTAT FED TO THE 14E'TURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND I INDFIR THE G-C-AAAERGI.A.1- RI-11-FES OF THE AMERICAN.' ARRIT-RATION ASSOCIATION ("COMMERGIAL RULES"). ARBITRATION HEARINGS S-M.A.1-1- BE HELD IN THP GGIIIN1724�AIHPIRF=THE PROPERTY IS I-C)CATF17) AISI�4 SUCH QQNTROVERSY SHALL BE ARBITRATED BY 3 AR-011TRATO-IRSS %A.11=10 SHALL RF= IMPARTIAl RFAI FSTATF BROKERS �AIITH AT I EAST 5 YFAIRS OF Fill I TIMP S-'-'-R-'F-GT-QF=THIS AC_;R.F_FA.4F_=NIT. THEY S-HALL BE APPOINTED UNDER THE COMMERCIAL RULES. THE ARBITRATORS SHAL=L AC EXPRESSED IN THIS AC_REEAAENT AND AAIV Ah4I=AIDI�AENTC THF=RETrI AND I IDrIAI T4-IE EVIDENCE DRG[)I ICED AT AN ARBITRATION HEARING PIRR AR RATION i;-[" Rill RE; OR ST4TF= I P TO 'A*R'RIT ;EEDINGS. THE AWARD SHALL BE EXECUTED BY AT I PAST HE 3 ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER THE GONGLUSIGN OF THE HEARING, AND MAY 1NIG-1 I IDE ATTORNIFYS' F=I=-F=2 AND COSTS TO THE PRF=VAILING PARTY PER PARAGRAPH 16 HEREOF IIIDGMFISIT MAY RF= F=NITF=RF=D N OTIFICD OF TI-IC ARRITRATION HEARING TO ADDFEAR TH CRCAT 2_22.2 BUYER'S RESORT TO OR PARTIGIPAT-1QN IN SUGH ARBITRATION PRQGEEI)l�jGs 'SHALL �jQT- BAR -1 I'T IN, A ENT jURISDICTION WRY THE 8161YEIR FOR DAMAGES ANDIOR SPECIFIC PERFORMANCE IJNL=F=SS; AND LLAITII THE ARRITRATION RESULTS TC IN] AN' AWARD TO TUC SELLER OP LIQUIDATED DAMAGES, IN WHICH EVENT CI IC AWARD SHALL AGT-AS A BAR AGA4ISIS_T.A.1NIYA6iIC,)_NI R-Y R''I"IYE FOR DAMAGES ANDIGIR SPECIFIC PERFORMANGE. Z!._3 NOTICE; 13Y INITIALING IN' T-HF= SP4C_F= RE 0141 YOU A E AGREEING TO HAVE ANY DISPUTEARISINIC; OUT OF THF= MATTERS INGLUDED IN THE "ARBITRATION OP DISPUTES" PROVISION DECIDED RV A I I ICTDAI ARRITRATIr1Al AC PROVIDCr+ BY r-A.1-IFORNII.A. I-A.I.A.1 AND 440W ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE ITF= I IT-lr_AT_F=r) IN' A YOU REFUSE TO 91_I_R,h.4IT TQ ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE GOMPELL'IED TO AR-RITRATF UNDER THE AUTHORITY OF THE GALIFORNIA CODE OF GI%/11 PROGFIDI RE. �401.11R AGREEMENT TO THIS VVE HAVE READ AND UNDERSTAND THE PGREGOING AND AGREE TO SUBMIT [DISPUTES ARISING OUT OF THE MATTERS ING I IDED IN THE"ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL-,aR61T-RAT-loPl. Buyer Initials Seller Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located. 23.3 Time of Essence. Time is of the essence of this Agreement: 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.5-Waiuerof jury-Trial. THE PARTIES H€R€Bv WAIVE ter.. -zit/C Tub REST0 OR PROCEED_ING INVOLVING T44E PROPERTY 0R ARISING Ill IT OF THIS AGREEMENT 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or.handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s) shall be governed by the principles set forth in the applicable sections of the California Civil Code, as summarized in paragraph 24.2. 24.2 When entering into a discussion with a real estate agent regarding a real estate transaction, a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction,as follows: (a)Seller's Agent.A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations: (1) To the Seller:A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (b) Buyer's Agent. A selling agent can,with a Buyer's consent, agree to act as agent for the Buyer only. In these situations,the a e s not PAGE 6 OF 8 APP VED AS TO FORM INITI LS RI,McG1TH,CityA#tosg+ I TI LS ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION U-� � 1�//�—�— FORM OFA-4-8/00E iY t3' �Yu Deputy City A the Seller's agent, even if by agreement the �ent may receive compensation for services rendere sither in full or in part from the Seller. An agent acting only for a Buyer has the following affirmative obligations. (1) To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seiler: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c) Agent Representing Both Seller and Buyer. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer. (1)in a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer, b. Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2. (2) In representing both Seller and Buyer,the agent may not without the express permission of the respective Party, disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3) The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting in the transaction. Buyer and Seller should each read its contents each time it is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure. Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability (including court costs and attorneys' fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to identify to Brokers as"Confidential"any communication or information given Brokers that is considered by such Party to be confidential. 25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days. This Agreement shall not be construed as if prepared by one of the parties,but rather according to its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer, if any,are as follows or are attached hereto by an addendum consisting of paragraphs 27 through 28 . (If there are no additional provisions write"NONE".) 27. Mineral Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelopment Plan. b) Covenant as to non-discrimination and non-segregation, c) Maintenance Covenant. Breach of any of these Covenants shall cause the property to revert to Seller. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO RICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: 4Ot\2 Team Real Estate Development RoJaert Attn:Keith Bohr By: Title: Date: Address: 221 Main Street, Suite 5 Name Printed: Huntington Beach, CA 92648 Title: Telephone:(714)536-5888 Telephone:(_) Facsimile:(714) 536-5889 Facsimile:(_) Federal ID No. By: Date: Name Printed: Title: Address: Telephone:(_) Facsimile:(_) Federal ID No. PAGE 7 OF 8 VED AS TO FORM N MT TH,City Attorney INITI S IN IAL ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION ]3y j,,11e M j,,;],iij 57N 104 FORM OFA-4-8/OOE Deputy City Attorney 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement. In consideration of real estate brokerage service rendered by Brokers, Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 % of the Purchase Price divided in such shares as said Brokers shall direct in writing. This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seiler at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates—Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn:Curt Stalder/Jim Snyder By: Title: Senior Vice Presidents Date: T_ 4�k6 Address: 3991 MacArthur Blvd. , Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(949) 724-1000 Telephone:( / ) 53 Facsimile:(949) 833-0608 Facsimile:(_) Federal ID No. By: Date: Name Printe . V AW rl-- /v Z t`/ Title: CA,'C L SJt Address: 2000 Main Street r Huntington Beach, CA 92648 Telephone:( / ) Facsimile:(_) Federal ID No: These forms are often modified to meet changing requirements of law and needs of the industry.Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213) 687-8777. ©Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced in any form without permission in writing. STALDER/KHOURY-PURCHASE AGR PAGE 8 OF 8 AP ED I TO FORM 4 � ER MfATH,Coy AkfomW INITI iS INITIA ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION C, 51A 10L1 FORM OFA-4-8100E PROOF OF PUBLICATION e STATE OF CALIFORNIA) . ) SS. County of Orange _ the sale) I am a Citizen of the United States and a C�OF estimated,val ee of' the HUNTINGTON BEACH interest to be conveyed resident of the County aforesaid; I am REDEVELOPMENTAGENCY as determined at the OF THE CITY OF highest and best uses over-the-ace of eil?hteen ears and nOt a permitted under the b-- ti -y , _,HUNTINGTON BEACH, redevelopmPnt,pjan,_the party to or interested in the below NOTICEOFA^` estim`ated value of the PUBLIC HEARING interest to be conveyed entitled matter. I am a principal clerk of and the purchase price P P ON THE SALE OF AGENCY e s e d04P,e70 000. Inter- the ns HUNTINGTON BEACH INDEPENDENT, a OWNED PROPERTY inspect and, upon,pay- 214 FIFTH STREET ment of the costs of newspa er of general circulation, printed NOTICE IS HEREBY reproduction, obtain GIVEN that the City, copies of the 33433 and pu fished in the City of Huntington Council and the Rede Report and sale docu- velopment Agency of the I ments. The Redevelop- Beach, County of Orange, State of City of Huntington Beach) ment Agency intends to ("Agency") will hold a. determine that its California, and that attached Notice IS a joint public hearing on actions are exempt from Monday, July 19, 2004 the requirements of the at 7:00 p.m. or soon i California Environmental true and complete copy as was printed thereafter in the City, Quality Act and appli- Council Chambers 10-1 cable guidelines. and published in the Huntington Beach cated at 2000 Main At any time not later Street, Huntingtoni than the hour set forth and Fountain Valley issues of said Beach, California, tol above for the hearing, consider the sale of 214 comments on the pro- newspaper to wit the issue(s) of: Fifth Street, a 5,300 posed sale may be square foot vacant submitted in writing-to parcel, (APN# -24-147- the Agency Clerk. 34)to Robert Koury.The;` Joan Flynn, property is located in Agency Clerk the Huntington Beach I'•O.Box 190 July 1 , 2004 .2000.MainStreet, Redevelopment Project 2nd Floor Area, specifically in the July 8 , 2004 Main-Pier sub-area. Huntington Beach, As required by Cali- CA 92648 fornia- Redevelopment Published Huntington Law (Section 33433), a Beach Independent July report on the sale is 1,8,2004 071-707 available for public inspection in the, City I declare under Clerk's Office and-in the penalty of perjury, that Department of Economic Development.The report the foregoing is true and correct. 1 summarizes the costs of Executed on Judy s , 2004 at Costa Mesa, California. Signature PROOF OF PUBLICATION STATE OF CALIFORNIA) . ) SS. County of Orange ) CItYOF '[the sale agreement, thel e of the I am a Citizen of the United States and a HUNTINGTONBEACH ;i Interest to beu conveyed , REDEVELOPMENT AGENCY ,as Bete and ebestt uses resident of the County aforesaid; I am OF THE CITY OF permitted under the over the age of eighteen years and not a HUNTINGTON BEACH redevelopment plan, the - _NOTICEOFA estimated value of the -interest-to-be conveyed----- — party - to or interested - in the below -- - - PusuCHEAaINc and the purchase price ON THE SALE OF AGENCY 'of $1,047;700.00. Inter- entitled matter. I am a principal clerk of ested persons may OWNED PROPERTY inspect and, upon pay- the HUNTINGTON BEACH INDEPENDENT, a 214 FIFTH STREET ment of the casts of NOTICE IS HEREBY reproduction, obtain newspa er of general circulation, printed TEN that the City copies of the 33433 Council and the Rede Report and sale docu- and pu lished in the City of Huntington velopment Agency of the. merits. The Redevelop- City of Huntington Beach ment Agency intends to Beach County of Orange State of ('Agency") will hold a determine that its i joint public hearing on' actions are exempt from Monday, July 19, 2004 the requirements of the California, and that attached Notice is a i at day,7:00 Julyp.m 9 soon California Environmental j thereafter in the City, Quality Act and appli- true and complete copy as was printed cable guidelines. i Council Chambers to-' ' At any time not later cated at 2000 Main than the hour set forth and published in the Huntington Beach Street, Huntington, above for the hearing, Beach, California.,, to',.comments on the pro- and Fountain Valley issues of said consider the sale of 214 posed sale may be j Fifth Street, a 5,3W submitted in writing to newspaper to wit the issue(s) of: square foot vacant; the Agency Clerk. parcel, (APN# -24-147-; Joan Flynn, 34)to Robert Koury.The I Agency Clerk property is located inl :A p O:Box 190 the Huntington Beach; 2000`fNainStreet, July 1 , 2004 Redevelopment Project, 2ndFloor Area, specifically in the i Huntington Beach, Main-Pier sub-area. CA 92648 July 8 , 2004 As required by Cali-i Published Huntington fornia Redevelopmenti Beach.Independent July Law (Section 33433), al 1,8,2004 071-707 report on the sale is! available for public; inspection in the City Clerk's Office and in the I declare, under penalty of perjury, that Department of Economic' ( Development.The report l the foregoing is true and correct. summarizes th_e costs of Executed on July s , 2004 at Costa Mesa, California. Signature Council/Agency Meeting Held: 7 0 19104 Deferred/Continued to: (W-V Approved ❑ Conditionally Approved ❑ Denied Ity I 's Si ture Council Meeting Date: July 19, 2004 Departure Number: ED 04-14 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND CITY COUNCIL MEMBERS/REDEVELOPMENT AGENCY MEMBPEikS SUBMITTED BY: PENNY CULBRETH- RAFT, ty Administrato xe utive Director PREPARED BY: DAVID BIGGS, Economic Development Director/Deputy Executive Director CLAY MARTIN, Director of Administrative Services SUBJECT: Conduct Joint Public Hearing and Approve Sale of Property at , 1G 214 Fifth Street (�� . �3 p, a WA - S3 A-'Q_0s 0 0, 3� 1 Statement of issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: On June 21, 2004, the Redevelopment Agency directed that best and final offers be solicited from two bidders for the property at 214 Fifth Street and the City Council and Redevelopment Agency are requested to approve the sale of the property to Robert Koury for $1,047,700.00 Funding Source: Costs associated with concluding the sale will be funded from sales proceeds through escrow. The net proceeds of the sale will be revenue to the Redevelopment Agency. c Recommended Action: Motion to: . 1. Open, Conduct, and Close the Joint Public Hearing; and T ,. U A City Council C11 r- 3b. 1. Adopt Resolution No. 2004- Approving the Sale of P rope rt-y--Located Within the Huntington Beach Redevelopment Project Area. Redevelopment Agency i 1. Adopt Resolution No. 349, Approving the Sale of Property Located within t Huntington Beach Redevelopment Project Area. — REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: July 19, 2004 DEPARTMENT ID NUMBER: ED 04-14 Alternative Action(s): Do not approve the sale and direct Staff to discontinue efforts to sell or market the property for sale until after the Strand project is completed. On June 21, 2004, the Redevelopment Agency directed that the two possible purchasers for 214 Fifth Street submit best and final offers for the purchase of 214 Fifth Street by 5:00 pm on Wednesday, June 23, 2004. Staff was also directed to notice a public hearing for July 19, 2004, to consider approval of the sale to the highest bidder. Both bidders submitted sealed bids by the deadline. The flowing bids were received: Robert Koury $1,047,700.00 LGB Investments $ 985,002.00 As such, the subject public hearing was noticed for a sale to Robert Koury for $1,047,700. The subject property was purchased by the Redevelopment Agency at a point in time when it was anticipated that the area in which this parcel is located would be a larger redevelopment site. However, the pattern of land use and private redevelopment activities, including the rehabilitation of existing buildings in the area, has precluded this option. As such, it is appropriate to sell the property. Since the property was purchased by the Redevelopment Agency with tax increment funds for the purposes of redevelopment, the property must be sold in conformance with the provisions of the State Health & Safety Code which governs redevelopment agencies. There is a public hearing requirement for the lease or sale of property by a Redevelopment Agency. The notice of this public hearing was published in the Independent on July 1st and 8th, which meets the requirement for publication for not less than once a week for two weeks prior to the hearing. In addition, Staff has prepared a Summary Report on the proposed sale pursuant to Health & Safety Code Section 33433 that is attached and has been available to the public as of the date on which the legal notice first appeared. The property is being sold for $1,047,700, which is above the 2004 Preliminary Opinion of Value of $530,000, and is considered to be the fair market value given the offers to purchase received. For this transaction, a Standard Offer, Agreement and Escrow Instructions form is proposed as the form of contract that will govern the transaction. The Redevelopment Agency's special provisions regarding requirements that the property be used in conformance with the Redevelopment Plan and the legally required on-going covenants are set forth in the Grant Deed which will be used to convey the property to the purchaser. Under the terms of the Standard Offer, Agreement and Escrow Instructions, the purchaser will have 30 days to undertake its due diligence, after which time the purchasers $20,000 deposit will become non-refundable. Escrow on the transaction must close within 60 days after the end of the due diligence period. The property is being sold as-is, with the Redevelopment Agency making no warranties as to the condition of the property. G:\David\RCAS\214fifthpublichearing-1.doc -2- 6/28/200410:26 AM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: July 19, 2004 . DEPARTMENT ID NUMBER: ED 04-14 Environmental Status: Sale of the property is Categorically Exempt and a Notice of Exemption for sale of 214 Fifth Street has been prepared and will be filed with the Orange County Clerk Recorder's Office. Attachment(s): City Clerk's • - Number No. Description 1. City Council Resolution No. 00 A-S 3 2. Redevelopment Agency Resolution No. 3AC\ 3. Standard Offer, Agreement and Escrow Instructions. 4. Grant Deed. 5. 33433 Summary Report. 6. Sealed Bid Submittal Forms. RCA Author: D. Biggs, ext. 5909 G:\David\RCAS\214fifthpublichearing-1.doc -3- 6/28/2004 4:27 PM City Council Resolution ATTACHMENT # 1 RESOLUTION NO. 2004-53 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE SALE OF PROPERTY LOCATED WITHIN THE HUNTINGTON BEACH REDEVELOPMENT PROJECT AREA WHEREAS,the Redevelopment Agency of the City of Huntington Beach(the"Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Merged Redevelopment Project Areas of the City of Huntington Beach (collectively the "Redevelopment Plan"); and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33000 et seq.), the Agency acquired real property located at 214 Fifth Street, Huntington Beach, which is located in the Redevelopment Project Area, Main-Pier sub area; and The real property consists of a 5,300 square foot vacant parcel, and is legally described as Assessor's Parcel Number 24-147-34 (hereafter,the "Property"); and The Agency purchased the Property in anticipation of acquiring adjacent parcels for a larger redevelopment site. However, as a result of the pattern of land use and private redevelopment activities, including the rehabilitation of.esisting businesses in the vicinity, the Agency.has determined that acquiring adjacent parcels is no longer feasible; and In order to carry out and implement the Redevelopment Plan, the Agency proposes to enter into a Sale Agreement (the "Agreement") for the Property; and Pursuant to the California Community.Redevelopment Law(California Health and Safety Code, Section 33433) the Agency and the City Council held a joint public hearing on the Agreement, having duly published notice of such public hearing and having made copies of the proposed Agreement and other reports and documents (including the Summary Report required by Section 33433) available for public inspection and copying; and The Agency has duly considered all terms and conditions of the proposed transaction and believes that it.is consistent with the.Redevelopment Plan,will assist in eliminating blight in the Redevelopment Project area, is in the best interests of the Redevelopment Project area,the City and the health, safety, morals and welfare of its residents, and is in accord with the public purposes and provisions of applicable State and local law and requirements. NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: SECTION 1. The City Council hereby finds and determines that the consideration to be paid for the purchase of the Property conveyed to it by the Redevelopment Agency is not less than the fair reuse value at the uses and with the covenants and conditions and development authorized by the sale. g/04reso/cc sale/6/3/04 I olution No. 2004-53 SECTION 2. The City Council hereby finds and determines that the sale of the Property within the Project area pursuant to the Agreement will assist in the elimination of blight. SECTION 3. The City Council hereby finds and determines that the sale of the Property pursuant to the Agreement is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code. SECTION 4. The Sale Agreement is hereby approved in substantially the form presented at this meeting, with such minor changes as may be approved by the Executive Director of the Agency with the approval as to form by the City Attorney. SECTION 5. The Summary Report prepared pursuant to Section 33433 is hereby adopted. SECTION 6. Pursuant to California Environmental Quality Act Guidelines Section 15300 et seq., the sale of the Property has been determined to be categorically exempt from the provisions of the California Environmental Quality Act. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 19th day of July , 2004. r ATTEST: APPROVED AS TO FORM: e. dv� ry� R, ity Clerk �4rityAtto ey REVIEWED AND APPROVED: TED AND APPROVED: C, -& City Adnqinistrator Director of Economic Development g/04reso/cc sale/6/3/04 2 Res. No. 2004-53 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on the 19th day of July, 2004 by the following vote: AYES: Sullivan, Coerper, Hardy, Green, Boardman, Cook, Houchen NOES: None ABSENT: None ABSTAIN: None C Clerk and ex-offici lerk of the City Council of the City of Huntington Beach, California Redevelopment Agency Resolution No. ATTACHMENT #2 RESOLUTION NO. 349 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE SALE OF PROPERTY LOCATED WITHIN THE HUNTINGTON BEACH REDEVELOPMENT PROJECT AREA WHEREAS,the Redevelopment Agency of the City of Huntington Beach(the"Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Merged Redevelopment Project Areas of the City of Huntington Beach (collectively the "Redevelopment Plan"); and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33000 et seq.), the Agency acquired real property located at 214 Fifth Street, Huntington Beach, which is located in the Redevelopment Project Area, Main-Pier sub area; and The real property consists of a 5,300 square foot vacant parcel and is legally described as Assessor's Parcel Number 24-147-34 (hereafter, the"Property"); and The Agency purchased the Property in anticipation of acquiring adjacent parcels for a larger redevelopment site. However, as a result of the pattern of land use and private redevelopment activities, including the rehabilitation of existing businesses in the vicinity, the Agency has determined that acquiring adjacent parcels is no longer feasible; and In order to carry out and implement the Redevelopment Plan, the Agency proposes to enter into a Sale Agreement(the "Agreement") for the Property; and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33433)the Agency and the City Council held a joint public hearing on the Agreement, having duly published notice of such public hearing and having made copies of the proposed Agreement and other reports and documents(including the Summary Report required by Section 33433) available for public inspection and copying; and The Agency has duly considered all terms and conditions of the proposed transaction and believes that it is consistent with the.Redevelopment Plan, will assist in.eliminating blight in the Redevelopment Project area, is in the best interests of the Redevelopment Project area,the City and the health, safety, morals and welfare of its residents,and is in accord with the public purposes and provisions of applicable State and local law and requirements. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of Huntington Beach as follows: SECTION 1. The Agency hereby finds and determines that the consideration to be paid for the purchase of the Property conveyed to it by the Agency is not less than the fair reuse value at the uses and with the covenants and conditions and development authorized by the sale. g/04reso/rda sale2/6/3/04 l Re ution No. 349 SECTION 2. The Agency hereby finds and determines that the sale of the Property within the Project area pursuant to the Agreement will assist in the elimination of blight. SECTION 3. The Agency hereby finds and determines that the sale of the Property pursuant to the Agreement is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code. SECTION 4. The Sale Agreement is hereby approved in substantially the form presented at this meeting, with such minor changes as may be approved by the Executive Director of the Agency with the approval as to form by the Agency General Counsel. SECTION 5. The Summary Report prepared pursuant to Section 33433 is hereby adopted. SECTION 6. The Chairman of the Agency and the Agency Clerk are hereby authorized to execute and alter the Agreement on behalf of the Agency as may be approved by the City Attorney. A copy of the Agreement when executed by the Agency shall be placed on file in the Office of the Agency Clerk. SECTION 7. The Executive Director of the Agency and the Agency Clerk are hereby authorized, on behalf of the Agency,to sign all documents necessary and appropriate to carry out and implement the Agreement, and to administer the Agency's obligations, responsibilities and duties to.be performed thereunder. The Chairman of the Agency and the Agency Clerk shall execute the Grant Deed. SECTION 8. Pursuant to California Environmental Quality Act Guidelines Section 15300 et seq., the sale of the Property has been determined to be categorically exempt from the provisions of the California Environmental Quality Act. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on the 19th day of July , 2004. C an ATTEST: APPROVED AS TO FORM: —0gency C erk . l �J Age cy General Co Ll( Q�I REVIEWED AND APPROVED: INITIATED AND APPROVED: 1txecutiveVDirector Director of Economic Development g/04reso/rda sale2/6/3/04 2 Res. No. 349 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, JOAN FLYNN, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on the 19th day of July 2004 and that it was so adopted by the following vote: AYES: Sullivan, Coerper, Hardy, Green, Boardman, Cook, Houchen NOES: None ABSENT: None ABSTAIN: None Verk of the Iledevelopoent Agency of the City of Huntington Beach, CA Standard Offer, Agreement & Escrow Instructions ATTACHMENT #3 k� STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR Commercial Real Estate Association May 11, 2004 (Date for Reference Purposes) 1. Buyer. 1.1 Robert-14400my ,("Buyer") hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or individually,a"Party"), through an escrow("Escrow")to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder") whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 ,Phone No. (949) 644-9390 ,Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder,but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined In paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement In writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that is the subject of this offer consists of(insert a brief physical description) an approximate 5,300 square foot vacant parcel of land. is located in the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 214 Fifth Street and Is legally described as: to be provided through escrow (APN:024-147-34 ). 2.2 If the legal description of the Property is not complete or is inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall Issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent Improvements thereon, Including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property:electrical distribution systems(power panel,,bus ducting,conduits,disconnects,lighting fixtures);telephone distribution systems(lines,jacks and connections only);space heaters; heating,ventilating,air conditioning equipment("HVAC"); air lines;fire sprinkler systems;security and fire detection systems; carpets;window coverings;wall coverings;and N/A (collectively,the"Improvements"). 2.4 The Ore sprinkler monitor.0 Is owned by Seller and included in the Purchase Price,or 0 is leased by Seller,and Buyer will need to negotiate a new lease with the Ore monitoring company. 2.5 Except as provided in Paragraph 2.3,the Purchase Price does not Include Seller's personal property,furniture and furnishings,and N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be$8 95,000.00 payable as follows: (a) Cash down payment,including the Deposit as defined in paragraph 4.3(or if an all cash 1rerdb'C•.'�77 0y /-7 00- transaction,the Purchase Price): $it (Stoke if not applicable) $ Closing of appraximately. $ Said CI...1 N016 I pay-tile a!Q OF MGAIII, appt/eable) AntlF8 WAPald balan^ dueon - 6leeing of approximately: $ n including interaet at!heaats of °' POF anRuFn uRtil paid,^^,I,..F Me ^r erNiro unpaid balaase is due on �S�e if net (d) QUYSF shall give 881leF a dead Of tFUS!("PUFGhase Money Deed Of TFUSV)On 1118 11047 7.0 .DO Total Purchase Price: $99r✓r-0�.'&� 3.2 If Buyer is taking title to the Property subject to,or assuming,an Existing Deed of Trust and such deed of trust permits the bensfic'ery to PAGE 1 OF 8 App UED AS TO FORM R M H,City Attorney INITIALS INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION M. 51�(0 t� FORM OFA-4.8100E Deputy City Attornsy demand payment of fees including,but not limited to,point, cessing fees,and appraisal fees as a condition to the transfer L Property,Buyer agrees to pay such fees up to a maximum of 1.5%of the unpaid principal balance of the applicable Existing Note. 4. Deposits. 4.1❑ Buyer has delivered to Broker a check in the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,4r 0 Buyer shall deliver to Escrow Holder a check In the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited into the Escrows trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer,be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit'),in a Slate or Federally chartered bank In an Interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction.The Interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or interest forfeitures if the applicable Instrument Is redeemed prior to its specified maturity. Buyers Federal Tax Identification Number is .NOTE:Such l:u Interest bearing account cannot be opened until Buyers Federal Tax Identification Number is provided. S. a surA equal to a!leas! %Of 1h8 PUFGhaSe P068,all 18FM6 MaGenably,aGG8plable to BUYSF.SuGh loan("New Loan")she'!be 60GUFed by a Ars!deed Of INS!OF W1049898 OR 1148 Propeity.it 11his AgFeemen!PFOVides$OF 68118F 18 GaFFy baGkjUAiGF AnanGing,than ROOF Shall hw.pe the Fight to appFGVS!he leFFR6 of!he New 6eaA.SelleF shall have 7.days fmm Fessip!a!!he Gommitment selling faFth the piteposed leFrA6 Of!he Now LGaR 10 8ppF0V8 OF disapprove of 6uoh pFoposed terms. If SGI18F falls 10 AOtdfy SSGFOW HoldGF, iA wriling, of the disapproval within said 7 days 01 shall he 5.2 13uyeF hereby agFees to diligently PUFSUG Obtaining 11he Now LaaA. If BUYOF shall fall to n9tify Its BFok9F,666FOW WeldeF and Seller,in wF!tlng within days following the Date of Agreement,that the New'--an has not been obtained,It shall be stvely psesamed that BUYGF has elthOF obtained sold Now Loan OF has waived this Now Loan GOAtIngORGY 6.3 1!,aflOF due diligence,13UYBF shall nalify 116 @FokGF,666FOW HGIdSF and Sells;,'A WFitiAg,within the time sperified in PaFagFaph 5.2 haFeel,!hat BUYeF has not obtained said NAI.A.0 1_08R,!his AgF88FAen!Shall be 1OFFRinailed,and BUYeF shall be eAtitled!a!he PFGFApt FGIUFn a!!he Deposit.plus any 'RtAFARt AAFRed thereon,lose only lignFaiM WGIGIAF and Title Campany GaRGOliation leas and seats,whieh BUYSF shall pay, 8. 6.1 The PUFshass Money Note shall PFOVide fQF In1aFe6l OA unpaid PFIRripal 81!he Fate Of 504 POF annum,With PFORGipal and 'AtOF86t paid as Ilallows; The P-0-hage Money Note and Pe I At TF1.161 shall he AA the AUFFARI(OFMA nommenly,used by 66GFOW Hold8F,end be j nIAF and 6.2 The PUFGhass Money Nate AAd1`GF the PUFGha6e Maney Dead Of TFUSI shall Gentain PFOY'SiORS Fegarding!he lallew'Ag(see also PaFagFaph (a) PFOPS)MOR1.PFinalpal Fnay be PF8paid iA who's CIF in paFt a!any time without penalty.a!!he option of the Buys; (b) Late GhaFgs.A late GhaFgS of 6*4 shall be payable with FGSPBGt 10 aAy payment of pFlnGipal,IRtSF861,OF eIheF GhaFg86,no!made within (G) _91FA On 121-110.IR the SYSAI the BWYSF sells OF IFAA08FA IIIIA In the PFOPSAY OF any peFlien thOF801,then!he 98118F May,81 S81184 Option, FOqUIFe!he 0AIlFG unpaid balaAce of said Note to be paid In Ili-*11 2811896 behalf 8 FOqU861!eF netiGe of default andleF sale with F8gaFd is 8aGh MQFI9ag8 OF dead of!Fuel-In whinh'I ypll'hA A'JhAFdlnAtA. A-4 WARNING,CA'IFORAIIA 6AW DOES NOT Al101.111 DEFICIENCY 10. Ir BUYER ULTIMATSL 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): m Lee & Associates—Newport Beach, Inc. represents Seller exclusively("Settees Broker"); 0 Team Real Estate Development (Keith Bohr) represents Buyer exclusively('Buyers Broker");or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyers Broker exclusively In connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/shefit has had no dealings with any person, firm, broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1, and no broker or other person,firm or entity,other than said Brokers is/are entitled to any commission or finders fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to Indemnify,defend,protect and hold the other harmless from and against any costs,expenses or liability for.compensation,commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,Including any counter-offers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seller,but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow Instructions restating or amending the Agreement unless specifically so Instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow In accordance with this Agreement,applicable law and custom and practice of the community in which Escrow Holder is located,including any reporting requirements of the Intemal Revenue Code.In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder Is located,the law of the state where the Property Is located shell prevail. 8.4 Subject to satisfaction of the contingencies herein described,Escrow Holder shall close this escrow(the"Closing")by recording a general warranty deed(a grant deed in California)and the other documents required to be recorded,and by disbursing the funds and documents in accordance with this Agreement. PAGE 2 OF 8 APPRaVED AS TO FORM j c MAT I,City Att-m� INITIALS It 7Ir/ INITIAL ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By M,,IW U 2`0 64 FORM OFA4-8/OOE Deputy City Attorney 8.5 Buyer and Seller shall each pay one-half of the E_ .w Holder's charges and Seller shall pay the usual recording fee_- A any required documentary transfer taxes.Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs(b),(c),(d),(a),(g),(1),(n),and(o),9.4,9.5,12,13,14,16,18,20,21,22,and 24 are,however,matters of agreement between the Parties only and are not Instructions to Escrow Holder. 8.7 If this transaction Is terminated for non-satisfaction and non-waiver of a Buyer's Contingency,as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of anyaffirmative covenant or warranty in this Agreement. In the event of such termination.Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing;provided,however,that If the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,in writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or Instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred In the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 if this Escrow is terminated for any reason other than Seller's breach or default,then at Sellers request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports, maps,master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT. Buyers conditional approval shall constitute disapproval,unless provision Is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement,whichever is later,for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days is Inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association("AIR")standard form entitled"Sellers Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property,duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 er--- days following the Date of Agreement.Buyer has 30 days from the Date of Agreement said diasleauree to approve or disapprove the matters disclosed. (b)Physical Inspection. Buyer has 40 es 30 days from the Date of Agreement, whichever is later,to satisfy Itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report.Buyer has 30 9; days from the Date of Agreement,whishever-is-later;to satisfy Itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties.Any such report shall be paid for by Buyer.A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence,use,manufacture, disposal or effect,render It subject to Federal,state or local regulation,Investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 eF—days from the Date of Agreement,wpieheve:is lacer,to satisfy Itself with regard to the condition of the soils on the Property.Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a)Governmental Approvals. Buyer has 30 eF- days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or. desirable In connection with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (I)Conditions of Title.Escrow Holder shall cause a current commitment for title insurance("Title Commitment")concerning the Property Issued by the Title Company,as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10 eF----days following the Date of Agreement. Buyer has 48 30 days from the Date of Agreement receipt-Of Me Title to satisfy Itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Seller shall have the obligation,at Sellers expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30 OF days from the Date of Agreement to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements,poles,structures and things located within 10 feet of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10 OF days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy.Buyer has 3040 days from the Date of Agreement to satisfy itself with regard to the Existing Leases and any other tenancy issues. (1) Other Agreements. Seller shall within 10 OF days of the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements")known to Seller that will affect the Property after Closing.Buyer has 3040 days from the Date of Agreement to satisfy itself with regard to such Agreements. Q)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. with legible Goples a(!he Existing Noles,Swisling Deeds 01 TWO and F81aled *I—"' D WhiGh!he PFOPOFtY StatemenV)684FMIRgi(4)Me 8FAQUAI Of the Unpaid pFlAripal balanre,!he GUFFBAt Interest FaIS,and the dale in vihinh intSF86t'a paid,and(2)!he nature and aFROURI Of Any ii:npsunds he'd by!he bansfisiaFy in rensei;tiap with rush loan.BuyeF her,10 eF days 49fo the Feselp!of!he 6san D—OnAntA aAd 88AGAGWy SlatSFA912116 19 Satisfy Itself with FSgaFd!a suGh PRORGiAg.13uyege obligaliaA le Giese me GA being able to (I)Personal Property.In the event that any personal property is included in the Purchase Price,Buyer has 10 a 30 days from the Date of Agreement to satisfy itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that It is aware of within 10 OF�days of the Date of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less,Seller shall repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a to o ing PAGE 3 OF 8 ApPR �1, AS TO FORM INITIALS J J1` i�G TF�,CityAttomsy I IAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION I►/pl�� FORM OFA-4-8/00E �aie Mums City,.y5lwloi,i more than$10,000.00 to repair or cure,to either terminate ti.. ..ansactlon or to purchase the Property notwithstanding such loss,._ .ithout deduction or offset against the Purchase Price.If the cost to repair or cure Is more than$10,000.00,and Buyer does not elect to terminate this transaction.Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use,occupancy,tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing.Unless otherwise notified in writing,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless.notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee.Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller.and Brokers('Brokerage Fee").It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement Insofar as the Brokerage Fee is concerned,and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"),Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Sellers Election").Seller's failure to give to Buyer within such period,written notice of Sellers commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election, within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyers failure to notify Seller in writing of Buyers election to accept title to the Property subject to the Disapproved Item shall constitute Buyers election to terminate this transaction. Unless eXpFeGGly PFGV;ded GIIM18*68 hff&l. $811896 Fight W GUF8 Shall no! apply - - Unless the Parties mutually instruct otherwise,if the time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item, or(c) If Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever Is later. 9.4 Buyer understands and agrees that until such time as all Buyers Contingencies have been satisfied or waived,Seller and/or its agents may solicit,entertain end/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the Investigation and remediation of Hazardous Substances. The determination of the existence of a Hazardous Substance Condition and the evaluation of the Impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties,and Buyer and Seller are not relying upon any Investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c)If applicable,the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessors Interest In Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f)If the Property Is located in California,an affidavit executed by Seller to the effect that Seller Is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in forth reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h) If the Seller Is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being in recordable form,together with evidence of fire insurance on the Improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate tax service contract(at Buyers expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e)If applicable,a written assumption duty executed by Buyer of the loan documents with respect to Existing Notes. (f)If the Buyer Is a corporation,a duty executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owners form policy of title Insurance effective as of the Closing,issued by the Title Company In the full amount of the Purchase Price,insuring title to the Property vested in Buyer,subject only to the exceptions approved by Buyer.In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title Insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable reel property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any Insurance which Seiler maintained will terminate on the Closing. Buyer is advised to obtain appropriate Insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,Interest on Existing Notes,utilities,and operating expenses shell be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s), n i the PAGE 4 OF 8 APE VED Au 1. i JRM &M RATH,CRY Attoms, INITIALS S�za�o INI IAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION 1.,Mn�� Y FORM OFA-4-8100E putt' . et' event that a Beneficiary Statement as to the applicable E. d Note(s)discloses that the unpaid principal balance of such E. g Note(s)at the Closing will be more or less than the amount set forth in paragraph 3.1(c)hereof("Existing Note Variation"),then the Purchase Money Note(s)shall be reduced or increased by an amount equal to such Existing Note Variation.If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations In New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller. Seller is the owner of the Property and/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Sellers obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided In paragraph 9.1(m)hereof,Seller shall maintain the Property until the Closing In its present condition,ordinary wear and tear excepted.The HVAC,plumbing,elevators,loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer in writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty Insurance company requiring any Investigation,remediation, repair, maintenance or Improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing,Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyers written approval,which approval will not be unreasonably withheld. (f)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise In writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or matedalmens'lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (i)Notice of Changes.Seller will promptly notify Buyer and Brokers in writing of any Material Change(see paragraph 9.1(n))affecting the Property that becomes known to Seller prior to the Closing. 6)No Tenant Bankruptcy Proceedings.Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or Insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller Is not the subject of a bankruptcy,insolvency or probate proceeding. (1)Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise In writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated In this Agreement,Buyer is purchasing the Property in its existing condition and will,by the time called for herein,make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest In,and its contemplated use of,the Property.The Parties acknowledge that,except as otherwise stated in this Agreement•no representations,inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and In that event.Buyer waives any right that it may have to bring an action or proceeding against Seiler or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Sellers representatives,have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period, Buyer,and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however,without Sellers prior approval which shall not be unreasonably withheld. Following any such entry or work,unless otherwise directed in writing by Seller,Buyer shall return the Property to the condition it was in prior to such entry or work,Including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such Inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,including those for injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer,Its agents or employees in connection therewith. 16. Further Documents and Assurances. The Parties shall each,diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding(including arbitration)involving the Property whether founded in tort,contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)in any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys'fees.Such fees may be awarded in the same suit or recovered In a separate suit,whether or not such action or proceeding is pursued to decision or judgment.The term"Prevailing Party"shall include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense. The attorneys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer Is the defaulting party,payment of said Brokerage Fee Is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth in this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt(confirmation report from fax machine is sufficient),provided a copy Is also delivered via delivery or mail.If such communication is received on a Saturday,Sunday or legal holiday,it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice In writing,designate a different address to which,or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 APPROVE.)VED AS TO FORM PER MOQRATK Oily'Attormr INITIALS A INITIA ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION u�vilta� FORM OFA-4-8100E "+m•.�tv(MIS,A►temey 50610'1 20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 It shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duty executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Buyer Initials Seller Initials AR,R-IT RAT'-0 N -0 r-D-1 r-.I1-1T-r-S (Ai6 4 Abibra tion of Disputes paragmp h is applicable Gn4,it inigale d by�both paf#96.) EXPERGIS112r, IN ROTH T14r-- ARr-A �AgWr-Rr- TWR PRCIPFR4:9 IS-4,C)CAT-r-0 AND � - TYPE OF RRAI rSTATR TWAT. IS: THE- WE RI-11-68- OR STAT5 I AW APPI'CAR'R TO ARBITRATION PRQr-r-r-DINCZR T.Wr- AWARD RWAI I Rr r-Xr-C-Tr-D Ry AT.I PAST 2 OF TWE 2 ARBITRATORS,13r-.Rr--NIDr-Rr-M WITWIN 30 DAYS AFTER T-Wr-GONG-1 I SIGN Or T-WE WE RING,AND MAY INGLUDE EA 2-2.2 ISIOTIC-6-BY INITIALING IN'TWR SPACR Pral QlAg YQI ARE AGREEING TO WAVE ANY MISPI ITS ARISING 01 IT. r Twr. CnI Buyer Initials Seller Initials 23. Miscellaneous. 23.1 Binding Effect This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.Paragraphs 21 and 22 are each incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by,and paragraph 22.3 is amended to refer to,the laws of the state in which the Property is located. 23.3 Time of Essence.Time is of the essence of this Agreement: 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are Identical except for the signatures,is authorized and instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 Conflict Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized in paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers In this transaction,as follows: (a)Seller's Agent.A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations:(1)To the Seller:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller.(2) To the Buyer and the Seller: a.Diligent exercise of reasonable skills and rare In performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent Is not obligated to reveal to either Party any confidential information obtained from the other Party which does not Involve the affirmative duties set forth above. (b)Buyers Agent.A selling agent can,with a Buyer's consent,agree to act as agent for the Buyer only.In these situations,the a e snot PAGE 8 OF 8 APPRQVED AS TO PORM INITIALS SRIM.GIF." City02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION M CIS 104 FORM OFA-4-8/OOE D.puty C tq Attoeasy 7 the Seller's agent,even if by agreement the agent may rea ompensation for services rendered,either In full or in part from, aller.An agent acting only for a Buyer has the following affirmative obligations. (1) To the Buyer.A fiduciary duty of utmost care,Integrity,honesty, and loyalty in dealings with the Buyer.(2)To the Buyer and the Seller:a.Diligent exercise of reasonable skills and care In performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer:a.A fiduciary duty of utmost care,Integrity, honesty and loyalty in the dealings with either Seller or the Buyer.b. Other duties to the Seiler and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2.(2)In representing both Seiler and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own Interests.Buyer and Seiler should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent Is a person qualified to advise about real estate.If legal or tax advice Is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting in the transaction.Buyer and Seller should each read its contents each time It is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability(including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement;provided,however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or information given Brokers that Is considered by such Party to be confidential. 25. Construction of Agreement.In construing this Agreement,all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall Include the plural and vice versa. Unless otherwise specifically Indicated to the contrary,the word"days"as used In this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as If prepared by one of the parties,but rather according to Its fair meaning as a whole,as If both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,If any,are as follows or are attached hereto by an addendum consisting of paragraphs 27 through 28 (if there are no additional provisions write"NONE".) 27. Mineral Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelo ment Plan. b) Covenant as to non—discrimination and non—segregation, c) Maintenance Covenant. Breach of any of these Covenants shall cause the operty to revert to Seller. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. ARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: 7sOV,rZ Team Real Estate Develbpment R rt Attn:Keith Bohr By: Title: Date: Address:221 Main Street, Suite 5 Name Printed: Huntington Beach, CA 92648 Title: Telephone:(714)536-5888 Telephone:(_) Facsimile:(714)536-5889 Facsimile:(_) Federal ID No. By: Date: Name Printed: Title: Address: Telephone:(_) Facsimile:(_) Federal ID No. PAGE 7 OF 8 VED AS TO FORM INITIALS N Mo((3jtATH,City Attorney I�AL_ IN AL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION $i j, 1e jvjall �(oy FORM OFA4-8/OOE Deputy City Attorney 27. Acceptance, 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee In a sum equal to 6 %of the Purchase Price divided in such shares as said Brokers shall direct In writing.This Agreement shall serve as an Irrevocable Instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates—Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn:Curt Stalder/Jim Snyder By: Title:Senior Vice Presidents Date: Address:3991 MacArthur Blvd., Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(99 9)72 A-1000 Telephone:(_) Facslmile:(99 9)833-0608 Facsimile:(—) Federal lD No. By: Date: Name Printed: Title: Address:2000 Main Street Huntington Beach, CA 92648 Telephone:(_) Facsimile:(—) Federal ID No: These forms are often modified to meet changing requirements of law and needs of the Industry.Always write or call to make sure you are utilizing the most current form:AIR Commercial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017. (213) 687-8777. ®Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. STALDER/KHOURY-FURCHABE AGR A PED AS TO FORM PAGE 8 OF 8 R McC3�ATEI,Ciy Altam4 INITIALS tl/nf^l_ INITIA 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Ty e 51A IOil FORM 0FA-4-8100E Grant Deed ATTACHMENT #4 Recording Requested by: FREE RECORDING REQUESTED (Government Code Sections 6103, 27383) Redevelopment Agency of the City of Huntington Beach When Recorded Return to and Mail to: Agency Clerk Redeve*tg kgency of the Cityton Beach 2000 in t Huntington Beach, CA 92683 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Agency," acting under the Community Redevelopment Law(California Health and Safety Code §§ 33000, et seq.) of the State of California, hereby grants to_ ,herein called "Grantee," the real property, hereinafter referred to as the"Property,"whose legal description and map are set forth in Exhibit "A," which is incorporated herein. 1. Agency excepts and reserves from the conveyance herein described any existing street, proposed street, or portion of any street or proposed street lying outside the boundaries of the Property, which might otherwise pass with a conveyance of the Property. Agency excepts and reserves from the conveyance herein described all interest of Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the Property or other lands, but without, however, any right to use either the surface of the Property or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Property in such a manner as to create a disturbance to the use or enjoyment of the Property. 2. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 3343 of the Council of the City of Huntington Beach (the "City") on December 16, 1996, as amended, and the General Plan of the City approved by Council of City on May 13, 1996,by Resolution No. 96-36, as amended. Copies of the Redevelopment Plan and General Plan are on file with the City Clerk of the City of Huntington Beach at its offices as a public record and which are incorporated herein by reference. Page 1 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc 3. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that the Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan,the City's General Plan, the City Municipal Code and this Grant Deed, whichever document is more restrictive. 4. Grantee hereby covenants and agrees for itself, its successors,transferees, assignees and every successor in interest to the Property that: (a) Solely at Grantee's expense, Grantee or Grantee's successor in interest shall reasonably maintain the improvements on the Property in good condition and appearance. Grantee shall keep the Property reasonably free from any accumulation of graffiti, debris and/or waste materials; (b) Grantee shall also maintain the landscaping on the Property in a reasonably healthy condition; and (c) If, at any time, Grantee fails to maintain the Property as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from Agency, either Agency or the City may perform the necessary landscape or other maintenance, or other actions and Grantee shall pay all costs incurred for such maintenance. 5. From ten (10) years from the date of recording of this deed, Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall not apply to the City for any land use entitlement or building permit for the Property without first applying to and obtaining a certificate of compliance from the Executive Director of the Agency or his designee that the proposed land use or building permit is consistent with the Redevelopment Plan. Agency shall not unreasonably withhold issuance of the certificate of compliance. Agency has the right, at its election, to reenter and take possession of the Property, with all improvements thereon, and terminate and revest in Agency the Property if Grantee (or its successors, transferees or assignees) shall obtain any land use entitlement or building permit for the Property without obtaining prior approval from the Agency Executive Director that the proposed use or building permit complies with the Redevelopment Plan. 6. Agency makes no warranty as to the presence or absence of any Environmental Contamination of the Property. Grantee takes the Property "as is." Grantee is responsible for determining the extent of any Environmental Contamination to the Property, and shall comply with all Environmental Laws in remediating and disposing of any Environmental Contamination of the Property. The term "Environmental Contamination" means contaminants or other toxic or hazardous substances, materials, constituents or wastes, including without limitation, all the following: any hazardous,toxic, corrosive, reactive, ignitable, carcinogenic or reproductive toxic substance, material, product, compound, chemical or waste (including, without limitation, petroleum, including crude oil or any fraction thereof, asbestos or asbestos-containing materials, flammable explosives,radioactive materials, and polychlorinated biphenyls) as defined in or Page 2 of 9 G:\Mulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc regulated by any Environmental Laws. "Environmental Laws"mean the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) and any other Federal, state or local statutes or the regulations regarding Environmental Contamination. 7. Grantee shall furnish or cause to be furnished to the Agency the following certificates of insurance in connection with any work of improvement to the Property pursuant to issuance of a certificate of compliance: (a) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability, Fire Legal Liability, BusinessAutomobile Bodily Injury and Property Damage Liability extending to owned, non-owned and hired vehicles of Grantee or the General Contractor used in performance of any Grantee's obligations hereunder, amended as necessary to comply with governmental requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Property, including construction and staging areas, or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the issuance of any certificate of compliance. Such policy shall have an initial minimum coverage limit per occurrence of not less than $3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e., combined single limit), and carry a deductible per occurrence of not more than $25,000. (b) Worker's Compensation Insurance. Worker's compensation insurance,to be carried by Grantee or the Grantee's General Contractor, in an amount and form sufficient to meet all applicable governmental requirements, and employer's liability coverage to a limit of not less than $1,000,000, with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Grantee and the general contractor, and all risks to such persons arising out of construction,use or occupancy of the Property. 8. Each Insurance Policy required under Section 7 shall: (a) Be in form and substance as is then standard in California for policies of like coverage; (b) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less Page 3 of 9 GAMu1vihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc than "A X" according to A.M. Best's Insurance Reports Key Rating Guide (unless such rating is not commercially available at a reasonable cost, as reasonably determined by the Director) or if such rating system shall cease, then of recognized financial responsibility approved by the Agency in writing; (c) Provide coverage on an occurrence basis; (d) Contain a waiver by the insurer of the right of subrogation against Agency, the City and their respective board members, officers, employees, agents and representatives. (e) Include the following endorsements: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30) days written notice is given to the City and the Agency." (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach,their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." 9. Grantee covenants that, for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall protect, defend, indemnify and hold harmless .City, Agency, and their officers, employees and agents from and against any and all claims, damages, losses, expenses,judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind), arising out of the Property, including, but not limited to any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation Page 4 of 9 GAMu1vihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc (including arbitration) of every nature or liability of any kind), arising out of, resulting from, or in connection with, directly or indirectly, any and all Environmental Contamination. 10. Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, it agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Grantee or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. 11. Grantee covenants by and for itself and any successors, transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. Grantee shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assignees, and all persons claiming under or through them,that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry Page 5 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc I in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 12. All conditions, covenants and restrictions contained in this Grand Deed shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Agency, its successors, transferees, and assignees, and the City and its successors,transferees and assigns, against Grantee, its successors, transferees and assignees, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of the Property or portion thereof. 13. All of the terms, covenants and conditions of this Grant Deed shall be binding upon Grantee and its permitted successors, transferees and assignees. Whenever the term "Grantee" is used in this Agreement, such term shall include any permitted successors, transferees and assignees. Notwithstanding anything to the contrary in this Grant Deed including, without limitation, any reference in this Grant Deed to "successors," "transferees" or "assignees" or any reference herein to any covenants, conditions and restrictions running with the land. Every other covenant and condition and restriction of this Grant Deed shall remain in effect until the end of the Redevelopment Plan. The covenants against discrimination set forth in paragraph (5) of this Grant Deed shall remain in perpetuity. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. 14. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of Page 6 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. Agency shall have the right, if the covenants are breached,to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Redevelopment Plan Project Area, or any person or entity having any interest in any other such realty. 15. No violation or breach of the covenants, conditions, restrictions,provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair or change any mortgage or deed of trust or security interest placed on the property; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise, and further that if the Agency exercise its rights to re-enter and take possession of the property, it shall do so subject to any mortgage, deed of trust or security interest. 16. Both Agency, its successors, transferees and assignees, and Grantee, and the successors,transferees and assignees of Grantee in and to all or any part of the fee title to the Property shall have the right with the mutual consent of Agency to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee,trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. However, Grantee and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. [SIGNATURES ON THE FOLLOWING PAGE] Page 7 of 9 G:\Ivlulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc IN WITNESS WHEREOF, Agency and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this day of , Agency-Agency: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic DATED: Chairperson ATTEST: DATED: Agency Clerk APPROVED AS TO FORM: DATED: Agency General Counsel Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. Grantee Name By: DATED: Name, Title Page 8 of 9 GAMulvihill\Ivlisc\Redevelopment Agency\Grant Deed-Form.doc 1 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 9 of 9 GAMulvihill\Ivlisc\Redevelopment Agency\Grant Deed-Form.doc Covenant as to Use Consistent with Redevelopment Plan. Buyer covenants and agrees for itself, its successors,transferees, assignees, and every successor in interest to the Property or any part thereof,that the Property shall be used for the purposes designated in the Redevelopment Plan. All uses conducted on the Site, including, without limitation, all activities on the Property undertaken by Buyer, its successors,transferees, assignees, and every successor in interest to the Property or any part thereof shall conform to the Redevelopment Plan. Covenant as to Nondiscrimination and Nonsegregation. Buyer covenants by and for itself and any successors, transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed,religion, sex, marital status, national origin or ancestry in the sale, lease, sublease transfer, use, occupancy, tenure or enjoyment of the Property, nor shall each Buyer its or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number,use occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenant shall run with the land. Buyer shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantial the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assignees, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed,religion, sex,marital status, national origin or ancestry in the sale, lease, sublease,transfer, u occupancy,tenure or enjoyment of the land herein conveyed,nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions". "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing,transferring,use, occupancy,tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number,use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex,marital status, national CSF:\Brochures\Stalder\Covenants.doc origin, or ancestry, in the sale, lease, sublease,transfer, use, occupancy,tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference or the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." Covenant as to Maintenance. Commencing at the time Buyer acquires title to the Property, Buyer or Buyer's successor in interest shall reasonably maintain the improvements thereon in good condition and appearance. Buyer or Buyer's successor in interest shall keep the Property reasonably free from any accumulation of graffiti, debris or waste materials. Buyer or Buyer's successor in interest shall also maintain the landscaping on the Property in a reasonably healthy condition. If, at any time, Buyer or Buyer's successor fails to maintain the Property as required by this covenant, and such failure is not corrected within thirty (30) days after the date of written notice from the Seller, either the Seller or the City of Huntington Beach may perform the necessary landscape or other maintenance, or other actions and the Buyer or Buyer's successor in interest shall pay all costs incurred for such maintenance. Violation of Covenants. Seller is deemed the beneficiary of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether Agency has been,remains, or is an owner of any land or interest therein in the Property. The breach of any of the covenants herein contained shall cause the Property revert to the Agency. CSF:\Brochures\Stalder\Covenants.doc 33433 Summary Report ATTACHMENT #5 SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON THE SALE OF 214 FIFTH STREET, HUNTINGTON BEACH BY THE REDEVELOMENT AGENCY OF THE CITY OF HUNTINGTON BEACH TO ROBERT KOURY The summary report has been prepared for the Huntington Beach Redevelopment Agency ("AGENCY")pursuant to Section 33433 of the California Health and Safety Code. This report sets for the certain details of the proposed Sale Agreement ("Agreement")between the Agency and Robert Koury("BUYER") for the sale of a 5,300 square foot vacant parcel located at 214 Fifth Street, Huntington Beach (APN# 024-147-34). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main- Pier sub-area. This report describes and specifies the following: (i)The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency,plus the expected interest on any loans or bonds to finance the agreements. (ii) The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the plan. (iii) The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale. If the sale price is less than the fair market value of the interest to be conveyed, determined at the highest and best use consistent with the redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference. (iv) An explanation of why the sale or lease of the property will assist in the elimination of blight, with reference to all supporting facts and materials relied upon in making this explanation. (v) The report shall be made available to the public no later than the time of publication of the first notice of the hearing mandated by this section. A. SALIENT POINTS OF THE AGREEMENT Under the terms of the proposed Agreement the BUYER will purchase in fee title from the Agency for$1,047,700 with the requirement that the BUYER will conform to: 214 Fifth Street 1 33433 Report,6/28/2004 1. The BUYER shall utilize the property in a manner, which meets the requirements of the City's Downtown Specific Plan and all applicable City codes,plus the Redevelopment Plan for the Huntington Beach Redevelopment Project. 2. The BUYER is responsible for securing all entitlements and approvals for the redevelopment of the property. 3. The AGENCY is providing no warranties or other certification regarding the property, as it is being sold"as is." 4. The AGENCY will provide a grant deed with certain condition, covenants and restrictions with the AGENCY as the beneficiary as required by the State Redevelopment Law (Health & Safety Code). B. COSTS OF AGREEMENT TO THE AGENCY Agency Acquisition Cost $318,800 Purchased in 1988 C. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED TO THE BUYER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The AGENCY will convey the property in fee to the BUYER in an "as is" condition. Preliminary opinion of value (January 2004): . $500,000 -- $530,000 D. PURCASE PRICE PAID BY BUYER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN The Buyer will be paying $1,047,700, which is more than the 2004 value noted above, and based upon the purchase offers received, is deemed to be the Fair Market Value. 214 Fifth Street 2 33433 Report,6/28/2004 Sealed Bid Submittal Forms ATTACH''..ME N T #6 •�JOO WV01•Ul "0DU• YU U01'1 VUUC- U Redevelopment Agency of the City of Huntington Beach Sealed Bid Submittal Form Best and !Final Offer for the Purchase of 214 Fifth Street Sealed Bids are due to the Department of Economic Development, Fifth Floor, City of Huntington Beach, 2000 Main Street, Huntington Beach, by no later than 5:00 pm, Wednesday, June 23, 2004. Submitted By: ���� YJ0 #A Date: & 3� D This Sealed Bid of$ O t(? 700 • 00 (minimum bid amount is$950,000) hereby modifies the Purchase Price in the previously submitted Standard Offer, Agreement and Escrow Instructions for the Purchase of Real Estate dated May 11, 2004. In event of a tie for the Best and Final Offer, and only in the event of a tie, the Purchase Price is increased by$ 1 _ -79'0 • 00 for a total Purchase Price of$_l DSq. g8.O 0 . Broker: Buyer: RECEIVE® JUN 2 3 2004 DEPART MEN T Or ECONOMIC DEVIE'r C:1DOCLIME-11CURTS-1,NEWILOCALS-11Temp'sealedbid form.doc Redevelopment Agency of the City of Huntington Beach Sealed Bid Submittal Form Best and Final Offer for the Purchase of 214 Fifth Street Sealed Bids are due to the Department of Economic Development, Fifth Floor, City of Huntington Beach, 2000 Main Street, Huntington Beach, by no later than 5*00 pm, Wednesday, June 23, 2004. Submitted By: L, &13 !�/1����mcr�� Date: e 1 a z/O y This Sealed Bid of$ 9 T _(minimum bid amount is $950,000) hereby modifies the Purchase Price in the previously submitted Standard Offer, Agreement and Escrow Instructions for the Purchase of Real Estate dated May 11, 2004. In event of a tie for the Best and Final Offer, and only in the event of a tie, th& gimrhase Price is increased by for a total Purchase Price of s, qqy. 00a Broker: Buyer: #� va', 11 A2z;1 1��l RECEIVED JUN 2.3 2004 DEPAR T'MEW!'- ECONOMIC V0-:. C.IDOCUMEi-11CURTS—I.NEWILOCALS-11Temp\sealedbid form.doc Z 'd E601 'ON Wd91 :0l HE, 'ZZ 'NAr �� ��S � � � ��\/S � � �� RCA ROUTING-ISHEET INITIATING DEPARTMENT: Economic Develo ment/Admin Services SUBJECT: CONDUCT PUBLIC HEARING AND APPROVE SALE OF PROPERTY AT 214 FIFTH STREET COUNCIL MEETING DATE: July 19, 2004 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attorne ) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FOR RDED Administrative Staff Assistant City Administrator (Initial) City Administrator (Initial) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Only)(Below Space For City Clerk's Use RCA Author: D. Biggs, ext. 5909 i CITY OF HUNTINGTON BEACH Interoffice Communication Economic Development Department TO: Honorable Mayor and City Council Members FROM: Penelope Culbreth-Graft, City Administrator PREPARED BY: David C. Biggs, Director of Economic Development 60 DATE: July 19, 2004 SUBJECT: Late Communication for Agenda Item D-1 Please accept this late communication of the PowerPoint Presentation that will be shown for Agenda Item D-1: Public Hearing for the Sale of 214 Fifth Street. Thank You. DCB:ls Attachment: Power Point Presentation C= C o Z -= ---i L Z C 0-y fit' � �� _ m©M� > S, D Sale of 214 Fifth E . � Street July 19, 2004 Agenda Item D-1 July 21 , 2004 Redevelopment Agency directed that two possible purchasers submit best and final offers. * Offers due on Wednesday, July 23, 2004 by 5:00 PM. Fla- Two Best & Final Offers Received Q) Robert J. Koury $1 , 047,700 a LGB Investments 985,002 Steps That Followed * Public Hearing noticed For Sale to Robert Koury for $1 ,047,000; * Publication dates were July 1st & July 8tn; * Section 33433 Summary Report provided. 2 Recommended Actions • Open, conduct and close public hearing; • Adopt City Council Resolution No. 2004-53; • Adopt Redevelopment Agency Resolution No. 349. s_ T - 4. 3 = The End 3 CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH NOTICE OF A PUBLIC HEARING ON THE SALE OF AGENCY OWNED PROPERTY 214 FIFTH STREET NOTICE IS HEREBY GIVEN that the City Council and the Redevelopment Agency of the City of Huntington Beach ("Agency") will hold a joint public hearing on Monday, July19, 2004 at 7:00 p.m. or soon thereafter in the City Council Chambers located at 2000 Main Street, Huntington Beach, California, to consider the sale of 214 Fifth Street, a 5,300 square foot vacant parcel, (APN# -24-147-34) to Robert Koury. The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main-Pier sub-area. As required by California Redevelopment Law (Section 33433), a report on the sale is available for public inspection in the City Clerk's Office and in the Department of Economic Development. The report summarizes the costs of the sale agreement, the estimated value of the interest to be conveyed as determined at the highest and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed and the purchase price of $1,047,700.00. Interested persons may inspect and, upon payment of the costs of reproduction, obtain copies of the 33433 Report and sale documents. The Redevelopment Agency intends to determine that its actions are exempt from the requirements of the California Environmental Quality Act and applicable guidelines. At any time not later than the hour set forth above for the hearing, comments on the proposed sale may be submitted in writing to the Agency Clerk. Joan Flynn,Agency Clerk P.O. Box 190 2000 Main Street, 2"d Floor Huntington Beach, CA 92648 Publication Dates: July 1 & 8, 2004. SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON THE SALE OF 214 FIFTH STREET, HUNTINGTON BEACH BY THE REDEVELOMENT AGENCY OF THE CITY OF HUNTINGTON BEACH TO ROBERT KOURY The summary report has been prepared for the Huntington Beach Redevelopment Agency ("AGENCY")pursuant to Section 33433 of the California Health and Safety Code. This report sets for the certain details of the proposed Sale Agreement ("Agreement")between the Agency and Robert Koury(`BUYER") for the sale of a 5,300 square foot vacant parcel located at 214 Fifth Street, Huntington Beach (APN# 024-147-34). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main- Pier sub-area. This report describes and specifies the following: (i) The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency,plus the expected interest on any loans or bonds to finance the agreements. (ii) The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the plan. (iii)The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale. If the sale price is less than the fair market value of the interest to be conveyed, determined at the highest and best use consistent with the redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference. (iv)An explanation of why the sale or lease of the property will assist in the elimination of blight,with reference to all supporting facts and materials relied upon in making this explanation. (v)The report shall be made available to the public no later than the time of publication of the first notice of the hearing mandated by this section. A. SALIENT POINTS OF THE AGREEMENT Under the terms of the proposed Agreement the BUYER will purchase in fed title from the Agency for$1,047,700 with the requirement that the BUYER will conform to: 214 Fifth Street 1 33433 Report,6/28/2004 1. The BUYER shall utilize the property in a manner,which meets the requirements of the City's Downtown Specific Plan and all applicable City codes,plus the Redevelopment Plan for the Huntington Beach Redevelopment Project. 2. The BUYER is responsible for securing all entitlements and approvals for the redevelopment of the property. 3. The AGENCY is providing no warranties or other certification regarding the property, as it is being sold"as is." 4. The AGENCY will provide a grant deed with certain condition, covenants and restrictions with the AGENCY as the beneficiary as required by the State Redevelopment Law (Health & Safety Code). B. COSTS OF AGREEMENT TO THE AGENCY Agency Acquisition Cost $318,800 Purchased in 1988 C. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED TO THE BUYER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The AGENCY will convey the property in fee to the BUYER in an "as is" condition. Preliminary opinion of value (January 2004): $500,000 -- $530,000 D. PURCASE PRICE PAID BY BUYER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN The Buyer will be paying $1,047,700, which is more than the 2004 value noted above, and based upon the purchase offers received, is deemed to be the Fair Market Value. 214 Fifth Street 2 33433 Report,6/28/2004 t STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR Commercial Real Estate Association May 11, 2004 (Dale for Reference Purposes) 1. Buyer. 1.1 Robert-ghetFs y ,("Buyer") hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or individually,a"Party"), through an escrow("Escrow")to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder") whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 ,Phone No. (949) 644-9390 Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder,but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement In writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that is the subject of this offer consists of(Insert a brief physical description) an approximate 5,300 square foot vacant parcel of land. is located in the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 214 Fifth Street and is legally described as: to be provided through escrow (APN:024-147-34 ). 2.2 If the legal description of the Property is not complete or is Inaccurate,this Agreement shall not be Invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall Issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent Improvements thereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any,owned by Seller and at present located on the Property:electrical distribution systems(power panel,bus ducting,conduits,disconnects,lighting fixtures);telephone distribution systems(lines,jacks and connections only);space healers;heating,ventilating,air conditioning equipment("HVAC): air lines;fire sprinkler systems;security and fire detection systems; carpets;window coverings;wall coverings;and N/A (collectively,the"Improvements'). 2.4 The fire sprinkler monitor.❑is owned by Seller and Included in the Purchase Price,or❑is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided in Paragraph 2.3,the Purchase Price does not include Setters personal property,furniture and furnishings,and N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seiler for the Property shall be$6 95,000.00 payable as follows: (a) Cash down payment,Including the Deposit as defined in paragraph 4.3(or if an all cash A t,OH 700•O transaction,the Purchase Price): E83t9d -ft (Strike If not applicable) $ (9) IIUYSF shall lake Vile to 11he PFepeFty subjeW te 1118 fa"GW;Ag existing deed(S)Of INS! 61esing a;appFaximately; S —Said riFel Note is payable a!a -•� appfiGa ilel entire-WIDOW balanee is-due-en- (if) An Plate("Sesend Nete2)with an unpaid I;FinGlpal balanse as ef!he Closing of appreaima18Iy'Said Seeend Nate me payable a!i including interesF at the rate unit!paid(and'(andi8F lhS entire unpaid balanse is due on (Strike if no! (d) BUY8F shall give S8110F a deed Of INS!("Pumhase Money Deed ell:rFuW)on!he ("Purchase Money Note")in the amaunl ef: �1,OM7, 700.00 Total Purchase Price: Et395,GCG.AA• 3.2 If Buyer Is taking title to the Property subject to,or assuming,an Existing Deed of Trust and such deed of trust permits the benefi ary to PAGE 1 OF 8 APP WED AS TO PORM J cCI�ATH,CityAttomaq INITIALS M IVnV�-- INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By Mul.ill 51)"Of04 FORM OFA 4-8100E Deputy City Attomey demand payment of fees Including,but not limited to,points, :essing fees,and appraisal fees as a condition to the transfer or Jroperty,Buyer agrees to pay such fees up to a maximum of 1.5%of the unpaid principal balance of the applicable Existing Note. 4. Deposits. 4.10 Buyer has delivered to Broker a check in the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,210 Buyer shall deliver to M Escrow Holder a check in the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited Into the Escrows trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer,be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit'),In a State or Federally chartered bank In an Interest bearing account whose tens is appropriate and consistent with the timing requirements of this transaction.The Interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or Interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is .NOTE:Such t Interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. 5. 6.4 ThIG G#eF IS GGAlingen!upon 8 UYSF GbtaiAIA9 49m an Ina uFanGe Gempany,finanGlal Institution a F elheF lendGF,a Gomm ilmen!to lend to 8 Uye a surA equal to a!leas! Of the PUFshase PFiG8,a!!eF;ns Feasenably asreptable to BUYSF.Surh loan("Plow Loan!)shall be GOGUFad by BPPFGYS the tOFFnA Of the NAMP LGAA. 68118F shall have;days!Fem resells!of!he Gommitmen!set4iAg leFth 11he PFOP961361 1OFFM-1 the NWAO Lean IG aPPFGY9 OF disappFave of such PFGpesed le;me. if 58118F falls 10 notify rBsGFew Hold8F, In wAting, of!he disapprove'within sold 7 days it shall he 6.2 BUYSF haFeby 8OF886 to diligently puFaue obtaining!he New Loan. 11 BUYOF shall fall to AGtIfY Its Waker,666FOW WeldOF and Seller,in Writing within_days following the Data of AgMement,that the Neiv Lean has no'been obtained,it shall be conclusively pFesumed that Buyer has althOF obtained said New Loan oF has waived this Now Le BUYGF has not obtained said Nev.o l-ean,!his AgFeemen!she'!be laFminated,and BuyeF shall be entitled to!he PFOMPt FeluFn of!he Deposit,plus any 'ntAFAAI A-Mad!hereon,1866 GAly 66GFew WaIdOF and:Pile Gempany GanGellation fees and Goals,whish BUYOF Shall Pay 6. 0 Interest paid as 1e14v.4v The P-imhase Money Plate and PUFShase MQAeY Dead of TFust shall he en 4hA GIIFFAAI(OFFAS 60mmenly used by 6GGF0 OF ORd ily to!he Existing NGts(r)anEYOF the New Loan expressly Galled!OF by this AqFeemenl� 6.2 The PUFrhaGe Money Note andii)F the PUF9ha68 Money Deed of T-Fus!shall GOnlain PF01. following(see oleo paFagFaph 40-3(b)k (b) Late Gha;ye.A late rh8FgS of 604 shall be payable with Raises!10 ORY POYFReAl Of PFIRSOPal,intOF061,OF Gl1hGF ehaFges,no!made%vilhin (G) Due On Sale.in Me even!!he B40F sells GF!FaASfSFS 11RIO is!he PFGPSFIY OF any PGFtiGR th8F8Gf,thOR!he S8118F may,a!Sallegs GPI'GA, FSqU'FG 1118 GRIIFG unpaid balanre a!said Note is be paid in 14411, 6.3 11!he PUFrhase Money Deed of TFUS!'a to be eutieFdInate to GIh13F Ananring,SOGFOW HeldeF shall,at Buyegs expense pFspaFe aAd FeGerd on Salle0a behalf a request 19F no!*Ge of clefau"ARd.10F ASIA with Fegard to sash Fnedgage OF dead Of tFURI 10 MAIGh KV411 he a_-heFdinA1A_ 64 I.A.I.A.RNINGo CALIFORNIA LAW DOSS NOT ALLOW DrerIGIENCY jUDGr5MENTS 0 NIQ_ Ir BUYER 1-11-TIMATSILY 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): 0 Lee & Associates—Newport Beach, Inc. represents Seller exclusively("selleesBroker); 0 Team Real Estate Development (Keith Bohr) represents Buyer exclusively("BuyeesBroker");or 13 represents both Seiler and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyers Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/shefrt has had no dealings with any person, firm,broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1.and no broker or other person,firm or entity,other than said Brokers Is/are entitled to any commission or finders fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to Indemnify,defend,protect and hold the other harmless from and against any costa,expenses or liability for compensation,commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,Including any counter-offers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seller,but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so Instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include Its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined In paragraphs 1.2 and 20.2 and advise the Parties and Brokers,In writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow in accordance with this Agreement,applicable law and custom and practice of the community in which Escrow Holder is located,including any reporting requirements of the Internal Revenue Code.In the event of a conflict between the law of the state where the Property Is located and the law of the state where the Escrow Holder is located,the law of the state where the Property Is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described,Escrow Holder shall close this escrow(the"Closing")by recording a general warranty deed(a grant dead in California)and the other documents required to be recorded,and by disbursing the funds and documents in accordance with this Agreement. PAGE 2 OF 8 APP D AS TO FORM j M AT:-I,City Att�.,+N INITIALS INITIAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By Muhrlhill ����ON FORM OFA a 6100E Deputy City Attomay 8.5 Buyer and Seller shall each pay one-half of the Ea_ _a Holder's charges and Seller shall pay the usual recording feeb ..,any required documentary transfer taxes.Seller shall pay the premium for a standard coverage owner's orjoint protection policy of title Insurance. 8.6 Escrow Holder shall verify that all of Buyers contingencies have been satisfied or waived prior to Closing. The matters contained In paragraphs 9.1 subparagraphs(b),(c),(d),(e),(g),().(n),and(o),9.4,9.5,12,13,14,16,18,20,21,22,and 24 are,however,matters of agreement between the Parties only and are not Instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyers Contingency,as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of anyaffirmative covenant or warranty in this Agreement.In the event of such termination,Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyers obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow Is in condition for Closing;provided,however,that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual Instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,in writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or Instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holders fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Sellers breach or default,then at Sellers request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports, maps,master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered Into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing, 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER,IN WRITING,OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT.Buyers conditional approval shall constitute disapproval,unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement,whichever Is later,for the satisfaction of the condition imposed by the Buyer.Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days Is Inserted In the spaces provided: (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association("AIR")standard form entitled"Sellers Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ("Property Information Sheet')concerning the Property,duly executed by or on behalf of Seller In the current form or equivalent to that published by the AIR within 10 op—days following the Date of Agreement.Buyer has 30 daye from the Date ofAgreement said diasleswee to approve or disapprove the matters disclosed. (b)Physical Inspection. Buyer has 49 err 30 days from the Date of Agreement, whicheveNs laces,to satisfy itself with regard to the physical aspects and size of the Property. . (c)Hazardous Substance Conditions Report.Buyer has 30 eF—days from the F8680PI Of lhO PFGPBFIY 149FIT1869A Sheol OF the Date of Agreement,wkisgeveNs later,to satisfy itself with regard to the environmental aspects of the Property.Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties.Any such report shall be paid for by Buyer.A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence,use,manufacture, disposal or effect,render It subject to Federal,state or local regulation,investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on,under or relevantly adjacent to the Property of a Hazardous Substance that would require remedlation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 eF--days from the Date of Agreement,whchever Is laterT to satisfy Itself with regard to the condition of the soils on the Property.Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a)Govemmental Approvals. Buyer has 30 OF-days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable In connection with its intended use of the Property, including, but not limited to,permits and approvals required with respect to zoning, planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (f)Conditions of Title. Escrow Holder shall cause a current commitment for title insurance('Title Commitment')concerning the Property Issued by the Title Company,as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents')to be delivered to Buyer within 10 OF days following the Date of Agreement.Buyer has 40 30 days from the Date of Agreement receipt Of the Tolle Commitment eumenis to satisfy itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Seller shall have the obligation,at Seller's expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30 OF days from the Date of Agreement to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association("ALTA")standards for an owners policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements,poles,structures and things located within 10 feet of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10 OF—days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement("Estoppel Certificate')in the latest forth or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property.Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate.If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy.Buyer has 3040 days from the Date of Agreement to satisfy Itself with regard to the Existing Leases and any other tenancy issues. () Other Agreements. Seller shall within 10 err--days of the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements")known to Seiler that will affect the Property after Closing.Buyer has.5040 days from the Pate of Agreement to satisfy itself with regard to such Agreements. Q)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. (k)946ting Nalsa,It PaFagFaph 3.4(G)has net been stricken,981'eF shall vA!hln 40 OF days of the Dais of AgF88FReR1I provide Buys with legible saplas a!Me Smisling Notes.Exisling Deeds of Trust and F81aled agF88FRenle,(sell8stive 1_-1 — .3")la whiGh!he PFopeFty will 3118118MOAV)894FFAIAgi(4)!he aMOUR11 Of!he unpaid PF'FiGipal balance,!he WHOM IF11AFG61 Fale,and 11he dale!a whiGh interest*6 paid,and(2)!he AMUFA And aFROUR11 Of GIRY IFTIPGUA b0aFy in GeAnei;llon with suGh'GaA,Buys;has 10 OF days kem!he F8G8iPI of We Loan PFQP8FIy without ass the leFFne a!any Existing Notes or GhaF@86 le BLIVOF eXGSPI as 01hOPS0613 PFOVideel R this (1)Personal Property.In the event that any personal property is Included in the Purchase Price,Buyer has 40 es 30 days from the Date of Agreement to satisfy itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 eF—days of the Date of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less,Seller shall repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a to o ng PAGE 3 OF ApP" ��n AS TO FORM INITIALS I �l r�`J 'C'tyAtt0=9y I AL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Il il� FORM OFA4-8100E more than$10,000.00 to repair or cure,to either terminate th.-. nsaction or to purchase the Property notwithstanding such loss,b-- .shout deduction or offset against the Purchase Price.If the cost to repair or cure is more than$10,000.00,and Buyer does not elect to terminate this transaction,Buyer shall be entitled to any Insurance proceeds applicable to such loss. Unless otherwise notified In writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use,occupancy,tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing.Unless otherwise notified in writing,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless.notified to the contrary in writing by any Party prior to the Closing. (q)'Brokerage Fee.Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller.and Brokers("Brokerage Fee").It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement Insofar as the Brokerage Fee is concerned,and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as'Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"),Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election).Seller's failure to give to Buyer within such period,written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election, within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyers failure to notify Seller in writing of Buyers election to accept title to the Property subject to the Disapproved Item shall constitute Buyers election to terminate this transaction. Unless the Parties mutually instruct otherwise,lithe time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item, or(c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever Is later. 9.4 Buyer understands and agrees that until such time as all Buyers Contingencies have been satisfied or waived,Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the Investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the Impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties,and Buyer and Seller are not relying upon any Investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder In time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Nole(s). (c) If applicable,the Existing Leases and Other Agreements together with duly executed assignments thereof by Seiler and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessors Interest In Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes.If Seiler does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f)If the Property is located in California,an affidavit executed by Seiler to the effect that Seller is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h)If the Seller Is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow. (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being In recordable forth,together with evidence of fire insurance on the Improvements In the amount of the full replacement coat naming Seiler as a mortgage less payee,and a real estate tax service contract(at Buyers expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest In Lease form specified in paragraph 10.2(c)above,duty executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (a)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (0 If the Buyer Is a corporation,a duty executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be issued to Buyer i standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owners form policy of title Insurance effective as of the Closing,Issued by the Title Company In the full amount of the Purchase Price,Insuring title to the Property vested in Buyer,subject only to the exceptions approved by Buyer.In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title Insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD.BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Proration and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly In cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING:Any Insurance which Seller maintained will terminate on the Closing. Buyer Is advised to obtain appropriate Insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,Interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any Item to be prorated that Is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer:is purchasing the Property subject to an Existing Deed of Trust(s), i the P AP VED Au L AGE 4 OF 8 i JRM R M RATH,Ctla Attome, INITIALS 0 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Mnl.li,+� Y FORM OFA-"100E event that a Beneficiary Statement as to the applicable Ex. a Note(s)discloses that the unpaid principal balance of such Ea. .g Note(s)at the Closing will be more or less than the amount set forth in paragraph 3.1(c)hereof("Existing Note VariaUon"),then the Purchase Money Note(s)shall be reduced or Increased by an amount equal to such Existing Note Variation.If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations In New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 1.2. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller. Seller is the owner of the Property and/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Sellers obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided in paragraph 9.1(m)hereof,Seiler shall maintain the Property until the Closing in its present condition,ordinary wear and tear excepted.The HVAC,plumbing,elevators,loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous SubstanceslStorage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer in writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty Insurance company requiring any investigation,remediation,repair, maintenance or improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing,Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise In writing to Buyer. (g)Mechanics'Llens.There are no unsatisfied mechanics'or matedalmens'lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (q Notice of Changes.Seller will promptly notify Buyer and Brokers in writing of any Material Change(see paragraph 9.1(n))affecting the Property that becomes known to Seller prior to the Closing. 0)No Tenant Bankruptcy Proceedings.Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or Insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller Is not the subject of a bankruptcy,Insolvency or probate proceeding. (1) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included In the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise In writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated in this Agreement,Buyer is purchasing the Property in Its existing condition and will,by the time called for herein,make or have waived all Inspections of the Property Buyer believes are necessary to protect its own interest In,and its contemplated use of,the Property.The Parties acknowledge that,except as otherwise stated in this Agreement,no representations, inducements, promises, agreements,assurances,oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Parry hereto. 12.3 In the event that Buyer teams that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and In that event,Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives,have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period,Buyer, and its agents and representatives,shall have the right at reasonable times and subject to rights of tenants,to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted,however,without Settees prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed In writing by Seller,Buyer shall return the Property to the condition it was In prior to such entry or work,Including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such Inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,including those for Injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer,its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each,diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding(Including arbitration)Involving the Property whether founded in tort,contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)In any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys'fees.Such fees may be awarded in the same suit or recovered in a separate suit,whether or not such action or proceeding Is pursued to decision or judgment.The term"Prevailing Party"shall include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense. The attorneys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18, Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer is the defaulting party,payment of said Brokerage Fee is In addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth in this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt If personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United Stales Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt(confirmation report from fax machine is sufficient),provided a copy is also delivered via delivery or mail.If such communication Is received on a Saturday.Sunday or legal holiday,It shall be deemed received on the next business day. 19.3 Any Parry or Broker hereto may from time to time, by notice In writing,designate a different address to which,or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 APP VFD AS TO FORM FE ;61RAMCflyAttornc. INITIALS I f INITIA ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION taluibi� FORM OFA-4-8100E '+m.,tv e+,ti,A►tomey 51v,1.4 20, Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 it shall be deemed automatically revoked, 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX,PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Buyer Initials Seller initials Ila- RY 2 ARBITRATORS WWO RWAI I Rr- IMPARTIAI RRAI PS: OATH AT- I-RARX 5 YEARS Or F-Ul I TIME Rr-I GIAXY0111 ARE AGREEING TO HAVE ANY DISPUTE ARISING Of 9 Gr:046- WE WAVE READ AND UNDERSTAND T-WE rG 'Rr=F-TO SUBMIT DISPUTES ARISING OUT Gr-T-W9 MATTERS Buyer Initials Seller Initials 23. Miscellaneous. 23.1 Binding Effect This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.Paragraphs 21 and 22 are each Incorporated Into this Agreement only If Initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by,and paragraph 22.3 Is amended to refer to,the laws of the state in which the Property is located. 23.3 Time of Essence.Time is of the essence of this Agreement: 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are Identical except for the signatures,is authorized and Instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 Waiver e(juFy Trial. THS PART-163 12115mRSBY WAW R R5SP6CT-IVG RIGHTS TO TRIAL MY jURY IN ANY ACTION OR 23.6 Conflict Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized in paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction,as follows: (a)Seller's Agent.A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations:(1)To the Seller:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller.(2) To the Buyer and the Seller: a.Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith, C.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent Is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not Involve the affirmative duties set forth above. (b)Buyers Agent.A selling agent can,with a Buyer's consent,agree to act as agent for the Buyer only.In these situations,the e e not PAGE 6 OF 8 APP VED AS TO FORM INITIALS R�Md3 I LS ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-4-8100E duty City Attom ys(to boy the Sellers agent,even if by agreement the agent may rea impensation for services rendered,either in full or in part from aller.An agent acting only for a Buyer has the following affirmative obligations.(1) To the Buyer.A fiduciary duty of utmost care,Integrity,honesty,and loyalty In dealings with the Buyer.(2)To the Buyer and the Seller:a.Diligent exercise of reasonable skills and care In performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.Art agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve'the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer In a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer.a.A fiducary duty of utmost care,integrity, honesty and loyalty In the dealings with either Seller or the Buyer.b.Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2.(2)in representing both Seller and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.(3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests.Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent Is a person qualified to advise about real estate.If legal or tax advice is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting in the transaction.Buyer and Seller should each read its contents each time it is presented,considering the relationship between them and the real estate agent In this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability(Including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement;provided,however,that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Conlldentlallntonnatlon:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or information given Brokers that Is considered by such Party to be confidential. 25. Construction of Agreement In construing this Agreement,all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement.Whenever required by the context, the singular shall Include the plural and vice versa. Unless otherwise specifically indicated to the contrary,the word"days'as used In this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to Its fair meaning as a whole,as If both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,If any,are as follows or are attached hereto by an addendum consisting of paragraph$ 27 through 28 (If there are no additional provisions write"NONE".) 27. Mineral Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelopment Plan. b) Covenant as to non—discrimination and non—segregation, c) Maintenance Covenant. Br... of any of these Covenants shall cause the pr Nrty to revert to Seller. TTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2, RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY, SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: Team Real Estate Development R 'rt � Attn:Keith Bohr By: Title: Dale: Address:221 Main Street, Suite 5 Name Printed: Huntington Beach, CA 92648 Title: Teiephone:(714)5 3 6—5 8 8 8 Telephone:(_) FacaImIIa:(714)536— 889 Facsimile:(_) Federal ID No. By: Dale: Name Printed: Title. Address: Telephone:() Facsimile:(_) Federal ID No. PAGE 7 OF a VED AS TO FORM INITIALS I�AL. N MoS3jiAT cm H,City AHoy IN AL 02000•AIR COMMERCIAL REAL ESTATE ASSOCIATION Ey Le,,6 M ' ' �R30104 FORM OFA44/OOE Deputy City Attomey 27. Acceptance, 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 . %of the Purchase Price divided in such shares as said Brokers shall direct In writing.This Agreement shall serve as an Irrevocable Instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at. the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates-Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn Curt Stalder/Jim Snyder By: Title:Senior Vice Presidents Date: Address:3991 MacArthur Blvd., Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(94 9)724-1000 Telephone:(_) Facsimlle:(94 9)833-0608 Facsimile:(— Federal ID No. By: Date: Name Printed: Title: Address:2000 Main Street Huntington Beach, CA 92648 Telephone:(_) Facsimile:(_) Federal ID No: These forms are often modified to meet changing requirements of law and needs of the Industry.Always write or call to make sure you are utilizing the most current form:AIR Commercial Real Estate Association,700.South Flower Street,Suite 600,Los Angeles,CA 90017. (213) 687-6777. ®Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any forth without permission In writing. STALDER/KHOURY-PURCHASE AGR APPROYED AS TO FORM PAGE 8 OF 6 R McCi, �ATF1,Gb7ALfMW INITIALS IV(A/� INITIA 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Bty CitylA FORM OFA-4-8100E Recording Requested by: FREE RECORDING REQUESTED (Government Code Sections 6103, 27383) Redevelopment Agency of the City of Huntington Beach When Recorded Return to and Mail to: Agency Clerk Redevelgency of the City, !g1on Beach 2000 n Street Huntington Beach, CA 92683 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Agency," acting under the Community Redevelopment Law(California Health and Safety Code §§ 33000, et seq.) of the State of California, hereby grants to_ ,herein called"Grantee,"the real property, hereinafter referred to as the"Property,"whose legal description and map are set forth in Exhibit"A," which is incorporated herein. 1. Agency excepts and reserves from the conveyance herein described any existing street, proposed street, or portion of any street or proposed street lying outside the boundaries of the Property, which might otherwise pass with a conveyance of the Property. Agency excepts and reserves from the conveyance herein described all interest of Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500)feet below the surface,together with the right to drill into,through, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas,hydrocarbon substances or minerals from the Property or other lands, but without, however, any right to use either the surface of the Property or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Property in such a manner as to create a disturbance to the use or enjoyment of the Property. 2. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 3343 of the Council of the City of Huntington Beach(the "City") on December 16, 1996, as amended, and the General Plan of the City approved by Council of City on May 13, 1996,by Resolution No. 96-36, as amended. Copies of the Redevelopment Plan and General Plan are on file with the City Clerk of the City of Huntington Beach at its offices as a public record and which are incorporated herein by reference. Page 1 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc 3. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that the Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan,the City's General Plan, the City Municipal Code and this Grant Deed, whichever document is more restrictive. 4. Grantee hereby covenants and agrees for itself, its successors,transferees, assignees and every successor in interest to the Property that: (a) Solely at Grantee's expense, Grantee or Grantee's successor in interest shall reasonably maintain the improvements on the Property in good condition and appearance. Grantee shall keep the Property reasonably free from any accumulation of graffiti, debris and/or waste materials; (b) Grantee shall also maintain the landscaping on the Property in a reasonably healthy condition; and (c) If, at any time, Grantee fails to maintain the Property as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from Agency, either Agency or the City may perform the necessary landscape or other maintenance, or other actions and Grantee shall pay all costs incurred for such maintenance. 5. From ten(10) years from the date of recording of this deed, Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall not apply to the City for any land use entitlement or building permit for the Property without first applying to and obtaining a certificate of compliance from the Executive Director of the Agency or his designee that the proposed land use or building permit is consistent with the Redevelopment Plan. Agency shall not unreasonably withhold issuance of the certificate of compliance. Agency has the right, at its election, to reenter and take possession of the Property,with all improvements thereon, and terminate and revest in Agency the Property if Grantee (or its successors, transferees or assignees) shall obtain any land use entitlement or building permit for the Property without obtaining prior approval from the Agency Executive Director that the proposed use or building permit complies with the Redevelopment Plan. 6. Agency makes no warranty as to the presence or absence of any Environmental Contamination of the Property. Grantee takes the Property "as is." Grantee is responsible for determining the extent of any Environmental Contamination to the Property, and shall comply with all Environmental Laws in remediating and disposing of any Environmental Contamination of the Property. The term "Environmental Contamination" means contaminants or other toxic or hazardous substances, materials, constituents or wastes, including without limitation, all the following: any hazardous,toxic, corrosive, reactive,ignitable, carcinogenic or reproductive toxic substance, material, product, compound, chemical or waste (including, without limitation, petroleum, including crude oil or any fraction thereof, asbestos or asbestos-containing materials, flammable explosives,radioactive materials, and polychlorinated biphenyls) as defined in or Page 2 of 9 GAMulvihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc regulated by any Environmental Laws. "Environmental Laws"mean the Comprehensive Environmental Response, Compensation and Liability Act(42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) and any other Federal, state or local statutes or the regulations regarding Environmental Contamination. 7. Grantee shall furnish or cause to be furnished to the Agency the following certificates of insurance in connection with any work of improvement to the Property pursuant to issuance of a certificate of compliance: (a) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability, Fire Legal Liability, Business Automobile Bodily Injury and Property Damage Liability extending to owned, non-owned and hired vehicles of Grantee or the General Contractor used in performance of any Grantee's obligations hereunder, amended as necessary to comply with governmental requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Property, including construction and staging areas,or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the issuance of any certificate of compliance. Such policy shall have an initial minimum coverage limit per occurrence of not less than $3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e., combined single limit), and carry a deductible per occurrence of not more than $25,000. (b) Worker's Compensation Insurance. Worker's compensation insurance, to be carried by Grantee or the Grantee's General Contractor, in an amount and form sufficient to meet all applicable governmental requirements, and employer's liability coverage to a limit of not less than$1,000,000, with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Grantee and the general contractor, and all risks to such persons arising out of construction,use or occupancy of the Property. 8. Each Insurance Policy required under Section 7 shall: (a) Be in form and substance as is then standard in California for policies of like coverage; (b) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less Page 3 of 9 G:\Mulvihill\Nlisc\Redevelopment Agency\Grant Deed-Form.doc than "A V according to A.M. Best's Insurance Reports Key Rating Guide (unless such rating is not commercially available at a reasonable cost, as reasonably determined by the Director) or if such rating system shall cease,then of recognized financial responsibility approved by the Agency in writing; (c) Provide coverage on an occurrence basis; (d) Contain a waiver by the insurer of the right of subrogation against Agency, the City and their respective board members, officers, employees, agents and representatives. (e) Include the following endorsements: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30) days written notice is given to the City and the Agency." (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." 9. Grantee covenants that, for itself and its successors,its assigns and every successor in interest to the Property, Grantee shall protect, defend, indemnify and hold harmless City, Agency, and their officers, employees and agents from and against any and all claims, damages, losses, expenses,judgments, demands and defense costs (including,without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind), arising out of the Property, including, but not limited to any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation Page 4 of 9 GAMu1vihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc (including arbitration) of every nature or liability of any kind), arising out of, resulting from, or in connection with, directly or indirectly, any and all Environmental Contamination. 10. Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, it agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses(including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Grantee or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. 11. Grantee covenants by and for itself and any successors,transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed,religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,transfer,use, occupancy,tenure or enjoyment of the Property, nor shall Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. Grantee shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assignees, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,tenure or enjoyment of the land herein conveyed,nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself,his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed,religion, sex,marital status,national origin, or ancestry Page 5 of 9 GAMuMhM\Misc\Redeve{opment Agency\Grant Deed-FOrm.doc in the leasing, subleasing,transferring,use,occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number,use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy,tenure or enjoyment of the premises,nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 12. All conditions, covenants and restrictions contained in this Grand Deed shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity,binding for the benefit and in favor of, and enforceable by Agency, its successors, transferees, and assignees, and the City and its successors,transferees and assigns, against Grantee, its successors, transferees and assignees, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of the Property or portion thereof. 13. All of the terms, covenants and conditions of this Grant Deed shall be binding upon Grantee and its permitted successors, transferees and assignees. Whenever the term "Grantee" is used in this Agreement, such term shall include any permitted successors, transferees and assignees. Notwithstanding anything to the contrary in this Grant Deed including,without limitation, any reference in this Grant Deed to"successors," "transferees" or "assignees"or any reference herein to any covenants, conditions and restrictions running with the land. Every other covenant and condition and restriction of this Grant Deed shall remain in effect until the end of the Redevelopment Plan. The covenants against discrimination set forth in paragraph (5) of this Grant Deed shall remain in perpetuity. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been,remains, or is an owner of any land or interest therein in the Property. 14. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land,for and in its own right and for the purposes of Page 6 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been,remains,or is an owner of any land or interest therein in the Property. Agency shall have the right, if the covenants are breached,to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Redevelopment Plan Project Area, or any person or entity having any interest in any other such realty. 15. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair or change any mortgage or deed of trust or security interest placed on the property; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise, and further that if the Agency exercise its rights to re-enter and take possession of the property, it shall do so subject to any mortgage, deed of trust or security interest. 16. Both Agency, its successors,transferees and assignees, and Grantee, and the successors, transferees and assignees of Grantee in and to all or any part of the fee title to the Property shall have the right with the mutual consent of Agency to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee,trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. However, Grantee and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. [SIGNATURES ON THE FOLLOWING PAGE] Page 7 of 9 GAMu1vihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc IN WITNESS WHEREOF,Agency and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this day of , Agency-Agency: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic DATED: Chairperson ATTEST: DATED: Agency Clerk APPROVED AS TO FORM: DATED: Agency General Counsel Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. Grantee Name By: DATED: Name, Title Page 8 of 9 G:\Mulvihill\Ivlisc\Redevelopment Agency\Grant Deed-Form.doc r STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared ,personally known to me(or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 9 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc Covenant as to Use Consistent with Redevelopment Plan.Buyer covenants and agrees for itself, its successors,transferees, assignees, and every successor in interest to the Property or any part thereof,that the Property shall be used for the purposes designated in the Redevelopment Plan. All uses conducted on the Site, including, without limitation, all activities on the Property undertaken by Buyer, its successors,transferees, assignees, and every successor in interest to the Property or any part thereof shall conform to the Redevelopment Plan. Covenant as to Nondiscrimination and Nonsegregation. Buyer covenants by and for itself and any successors,transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race,color,creed,religion, sex, marital status, national origin or ancestry in the sale, lease, sublease transfer, use, occupancy, tenure or enjoyment of the Property,nor shall each Buyer its or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location,number,use occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenant shall run with the land. Buyer shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color,religion, sex,marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantial the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself,his or her heirs, executors, administrators and assignees, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex,marital status,national origin or ancestry in the sale, lease, sublease, transfer,u occupancy,tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions". "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed,religion, sex,marital status,national origin, or ancestry in the leasing, subleasing,transferring, use, occupancy,tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself,or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection,location,number,use,or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person,or group of persons on account of race, color, creed,religion, sex,marital status,national CSF:16rochures\,Stalder\Covenants.doc Y to c' origin, or ancestry,in the sale, lease, sublease,transfer,use, occupancy,tenure or enjoyment of the premises,nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference or the selection, location,number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." Covenant as to Maintenance. Commencing at the time Buyer acquires title to the Property, Buyer or Buyer's successor in interest shall reasonably maintain the improvements thereon in . good condition and appearance. Buyer or Buyer's successor in interest shall keep the Property reasonably free from any accumulation of graffiti, debris or waste materials. Buyer or Buyer's successor in interest shall also maintain the landscaping on the Property in a reasonably healthy condition. If, at any time, Buyer or Buyer's successor fails to maintain the Property as required by this covenant, and such failure is not corrected within thirty (30) days after the date of written notice from the Seller, either the Seller or the City of Huntington Beach may perform the necessary landscape or other maintenance, or other actions and the Buyer or Buyer's successor in interest shall pay all costs incurred for such maintenance. Violation of Covenants. Seller is deemed the beneficiary of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided,without regard to whether Agency has been,remains, or is an owner of any land or interest therein in the Property. The breach of any of the covenants herein contained shall cause the Property revert to the Agency. CSF:\Brock ures\Staider\Covenants.doc H UNTINGTON B EACI-.INDEP.E.N-DENT F'0 1 ffl � HUNTINGTON BEACH REDEVELOPMENT AGENCY HE CITY OF' Client Reference # OF GTON HUNTINGTON REACH NOTICE OF A i Huntington Beach Independent Reference # PUBIlC HEARING (�`( — `r(C� ON THE SALE OF AGENCY OWNED PROPERTY 214 FIFTH STREET NOTICE 'IS HEREBY GIVEN that the City Council and the Rede- velopment Agency of the City of Huntington Beach ("Agency") -will. hold a 1 joint public hearing on r I Monday, July 19, 2004 at 7:00. p.m:. 'or soon thereafter in the City Council Chambers lo- Dear advertiser. Sated -at 2000 Main ' Sfreetv.,Huntingto'n Beach; California, to consider the sale of'214 Fifth Street, a 5,300 square .foot] vacant parcel, (APN# -24-147- 34)to Robert Koury.The ` Enclosed is a clipping of your ad from the first publication, beginning on property,is located in I v4 and expiring on . 1 O O q , the Huntington 'Beach Redevelopment Project Area, specifically in the, Main-Pier sub-area. As required by Cali- fornia Redevelopment, If you need to make any changes or corrections, please call me at your Law (Section 33433), a f report on the sale is earliest convenience. available for public inspection in the City Clerk's Office and in the Department of Economic + The cost of this ad is ;Development.The report summarizes the costs of the 'sale agreement, the r estimated value of the Thanks for your cooperation and patronage. interest to be conveyed v as determined at the ' highest. and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed Sincerely, and the purchase price , of $1,047,700.00. Inter- ested persons may ` inspect and, upon pay- ment of the costs of reproduction, obtain copies of the 33433 Report and sale docu- Michael Sletten ments. The Redevelop- merit Agency intends to Legal Advertising determine that its actions are exempt from. I the requirements of the California Environmental Quality Act and appli- cable guidelines. At any'time not later than the hour 'set forth above for the hearing, comments on the pro- posed sale may be submitted in writing to the Agency Clerk. Joan Flynn,, Agency Clerk P.O.Box 190 2000 Main Street, 2nd Floor 18682 Beach Blvd.,Ste.160,Huntin�}on Beach, California 92646 Huntington Beach, b` CA 92648 (714)965-3030 Fax(714)965-7174 Published Huntington Beach Independent July 1,8;2004 071-707 A Publication of Times Community News •A Division of the L:os Angeles (Times 6S C--C o•v Council/Agency-Meeting Held: 6Z,22JI 0 Deferred/Continued to: )(ApprQved ❑ ConditiQnally Approved ❑ Denied City C16rkA Sig tfure Council Meeting Date: June 21, 2004 Department ID Number: ED 04-13 //VV/T,/ !� S s•oo .irl. o�u b d3 0 - lnl-ovlmtAm a : ysa,coo.oo CITY OF HUNTINGTON BEACH S REQUEST FOR REDEVELOPMENT AGENCY ACTION ` + SUBMITTED TO: CHAIRMAN AND REDEVELOPMENT AGENCY MEMBEv' SUBMITTED BY: PENELOPE CULBRETH-GRAFT, Exe utive Director C C PREPARED BY: DAVID C. BIGGS, Deputy Executive Director C fi CLAY MARTIN, Director of Administrative Services _ -C SUBJECT: SELECT BUYER FOR SALE OF PROPERTY AT 214 F TH.STREET- Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attacfiment(s)` Statement of Issue: The Redevelopment Agency recently offered 214 Fifth Street for sale to the highest bidder. Two qualified purchase offers have been received and the Redevelopment Agency is requested to select one of the two possible purchasers. Funding Source: Costs associated with concluding the sale will be funded from sales proceeds through escrow. The net proceeds of the sale will be revenue to the Redevelopment Agency. Recommended Action: Motion to: Select LGB Investments LLC as the Buyer for 214 Fifth and direct staff to notice a public hearing for July 19, 2004, to consider approval of the sale. Alternative Action(s): 1. Reject the recommended buyer and select Robert J. Koury as the alternative buyer; or 2. Reject all offers and direct Staff to discontinue efforts to sell or market the property for sale until after the Strand project is completed. Analysis: On December 15, 2003, the Redevelopment Agency authorized the marketing of 214 Fifth Street for sale using a commercial real estate broker in the sale of the property. Staff solicited proposals from commercial real estate firms and Lee & Associates was selected to market the property for sale. Lee & Associates began marketing the property in January 2004. REQUEST r OR REDEVELOPMENT AGOCY ACTION MEETING DATE: June 21, 2004 DEPARTMENT ID NUMBER: ED 04-13 The first offers to purchase were received in February and early March 2004. Staff reviewed eight purchase offers with purchase prices of between $500,000 and $850,000 with the Council's Economic Development Committee on March 8, 2004. Four of the possible purchasers were identified for follow-up and provided with the opportunity to respond to confirm their willingness to acquire the property on terms and conditions agreeable to the Redevelopment Agency. During this period, two additional offers of $850,000 were received and were provided with the same opportunity to confirm their offers. Ultimately, three possible purchasers submitted revised offers. These possible buyers and offer prices were: LGB Investments LLC $895,000 Robert J. Koury $877,500 Liz & Peter McKinley $800,000 These three offers were reviewed with the Council's Economic Development Committee on May 10, 2004. The offer from the McKinley's had additional terms associated with their plan to move their existing sales tax producing business to the property from another city after it was developed and linking their purchase offer to a sales tax rebate in addition to a lower sales price. The Council's Economic Development Committee expressed a desire to secure the highest sales price for the property and staff was directed to offer each of the three possible purchasers an opportunity to execute a form of sales contract acceptable to the Redevelopment Agency matching the highest offer price. Two of the three possible purchasers, LGB Investments LLC and Robert J. Koury, have signed the Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate with a purchase price of $895,000. These competing contracts are attached. Since both possible purchasers have executed Agency's form of contract and have the same sales price, staff has reviewed the qualifications of the possible purchasers as a possible basis to determine which possible buyer to select. LGB Investments LLC purchased 438 Main Street from the Redevelopment Agency last year and has completed a substantial rehabilitation of the building. As such, the Redevelopment Agency has had a successful experience in selling property to this possible buyer in the recent past. Mr. Koury was the Redevelopment Agency's partner in the development of the Main Promenade building and Mr. Koury continues to own and operate the commercial space in the building. In addition, Mr. Koury has recently undertaken the development of a new building on a formerly vacant parcel adjacent to 438 Main Street. Both buyers have submitted evidence of the financial capability to acquire and develop the subject parcel. Given the overall generally comparable qualifications of both possible purchasers to acquire and develop a parcel of this size, staff is recommending that the Redevelopment Agency select LGB Investments as the buyer since they made the initial highest offer and have continued to raise their offer to establish the highest offer price to which other possible purchasers have responded throughout the process. Environmental Status: Not applicable for selection of a buyer. GADavid\RCAS\214fifthse1ect.doc -2- 6/2/2004 1:43 PM REQUEST rOR REDEVELOPMENT AGENCY ACTION MEETING DATE: June 21, 2004 DEPARTMENT ID NUMBER: ED 04-13 Attachment(s): City Clerk's • . . - Number No. Description 1 Standard Offer, Agreement and Escrow Instructions - LGB Investments 2 Standard Offer, Agreement and Escrow Instructions - Koury RCA Author: D. Biggs, ext. 5909 G:\David\RCAS\214fifthse1ect.doc -3- 6/2/2004 1:43 PM (9) June 21, 2004 - Council/Agency Agenda - Page 9 E. CONSENT CALENDAR All matters listed on the Consent Calendar are considered by the City Council and Redevelopment Agency to be routine and will be enacted by one motion in the form listed. Recommended Action: Approve all items on the Consent Calendar by affirmative roll call vote. E-1. (City Council/Redevelopment Agency) Minutes (120.65) -Approve and adopt the minutes of the City Council/Redevelopment Agency Regular Meetings of May 3, 2004 and Special Meetings of May 12, 2004 as written and on file in the Office of the City Clerk. Submitted by the City Clerk. Approved and Adopted 7—0 E-2. (Redevelopment Agency) Select LGB Investments, LLC as the Buyer for Property at 214 Fifth Street and Direct Staff to Notice a Public Hearing for July 19, 2004 to Consider Approval of the Sale (650.70)— Select ' GB !Rve6tments ' ' G as Buyer of 214 Fifth Street and direct staff to notice a Public Hearing for July 19, 2004 to consider approval of the sale. Submitted by the Administrative Services Director and the Deputy Executive Director. Funding Source: Costs associated with concluding the sale will be funded from sales proceeds through escrow. The net proceeds of the sale will be revenue to the Redevelopment Agency. Councilmember Houchen requested Economic Development Director David Biggs report on the process to receive clarification. He stated Robert Koury as the more qualified buyer. Amended to direct staff to invite sealed bids by Wednesday, 6123104 at 5:00 p.m. at no less than $950,000.00. Approved 7— 0 E-3. (City Council) Adopt Resolution No. 2004-48 to Submit a Proposal to the Board of Corrections for a Vandalism Accountability Program and Authorize the Chief of Police to Sign and Approve if Grant is Awarded (340.80) —Adopt Resolution No. 2004-48— "A Resolution of the City Council of the City of Huntington Beach Supporting the Submission of a Grant Application to the Board of Corrections for a Vandalism Accountability Program." Submitted by the Police Chief. Funding Source: A 10% match of$3,300 is required, which has been included in the 2003-2004 Police Department's budget under the General Investigations General Fund. Adopted 7— 0 E-4. (City Council) Approve 2004-2005 Proposed Budget—West Orange County Water Board (WOCWB) (320.80)—Approve the Fiscal Year 2004/2005 proposed West Orange County Water Board Budget in the amount of$298,200. Submitted by the Public Works Director. Funding Source: Funds are proposed in the Fiscal Year 2004- 2005 Budget in the Water Operations Fund Account. The net contribution for Fiscal Year 2004/2005 for the City of Huntington Beach will be $135,101. Approved 7— 0 Standard Offer, Agreement & Escrow Instructions - LGB Investments LGB Investments 17892 Gothard Street Huntington Beach, CA. 92647 5/21/04 To Whom It May Concern: I am very interested with the positive development of 51h Street and Huntington Beach in general. I am a long-standing resident and business-owner as well as real estate owner in this city. I take a very personal interest in seeing this city continuously improve its environment and infrastructure. I believe I have contributed in my own small way towards this imperative by my various improvements on real estate as well as employing almost 30 people in my business ventures. As such I believe that the interests of the city for 51h Street dovetail with mine. The city's view of the development of this parcel in particular is also commensurate with mine. I have rehabbed 438 Main Street and am in the process of rehabbing 526 main Streets. The work I have done and am doing real estate wise in downtown has received kudos from many individuals and business owners. It is my sincere hope that my bid for 212 5`h Street will be looked at with my track record in mind as a developer, business owner and long standing citizen (since 1979) of Huntington Beach. ThankOgge and considerati , �Gil CManag LGB Investments LP PACIFIC LIBERTY BANK D00:01' www.PacificLiberty.com Coo* - �k'NED Bc Board of Directors JU Coen Chairman of the Board adoption Ettorney March 26, 2004 Haydee V.9tiBotson Tice Chairwoman/Board Mottos Megrim Rick Canulin President B CEO Pacific Liborty Banc Hen Bourgaignon To Whom It May Concern: Chairmaq Dothen Cogineering Clare Marie Einsmann Executive Tice President RE: Gilis Aouizerat/LGB Investments LP United Bgribnciaess League Ea Laird CEO Mr. Aouizerat is a customer of Pacific Liberty Bank and maintains both business Coatings Resource and personal accounts with us. We have also provided financing for four Hugh a Moran commercial properties where he owns and operates his locally owned business Certified Public Bcromtant and a commercial property in downtown Huntington Beach. In addition Mr. John Rich Aouizerat handles his bankingrelationship in business like manor and is a Retired genera!Comsel ons P a very BID Space Systems good customer of the bank. Ron Shealtman Senior Tice PDisidentosal We have been supplied with information regarding the property located on 214 5te Rainbow Disposal Pp � g g P P Y Dr.Caleb B.Zia,Ph.D. Street in Huntington Beach. Mr. Aouizerat is qualified to obtain financing for this President property. The Cbesmrfield Corporation Executive Management If you have any questions please call me at 714 429-4107. Cathy M.Williams Encntive Vice President Chief financial Officer Sincerely, Diane Heyden Locative Tice Resident EBB Lending hank 1.lbrd PACIFIC LIBERTY BANK Exemfive Tice Resident Cheif Credit officer i Frank J. F d Executive Vice President, CCO MEMSER rnic 1121a Beach Office at Beach & Hdams: 19950 Beach Blvd,Huntington Beach,C192648 -Tel:714.429.2100 - Fax 714.378.0842 LENDER Marina Office at Springdale and Edinger: 16001 Springdale St.,Huntington Beach,C192649 -Tel:714.500.3900 • Fax:714.500.3858 ti iLGB Properties d LGB Properties - 17912 Gothard Street - Huntington Beach, California - 92647 - 714.374.3070 ,BEFORE i Properties a) 4 n.- Im (' l N�724-1000 �.j'iy ��� -LUNf STAIDFA - 31 5 , =7mgrtDEq k g@■���pq �OTiT 000 x , �r i ark,.rya t ..,,r�$-7 ..w i' t T'. t gk v` 7� a P� k � i a STANDARD-OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR Commercial Real Estate Association May 11, 2004 (Dale for Reference Purposes) 1. Buyer. 1.1 LGB Investments LLC ("Buyer") hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or Individually,a"Party"). through an escrow("Escrow')to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder') whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 ,Phone No. (949) 644-9390 Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement'). Buyer shall have the right to assign Buyer's rights hereunder,but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined In paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property')that Is the subject of this offer consists of(Insert a brief physical description) an approximate 5,300 square foot vacant parcel of land. Is located in the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 214 Fifth Street and is legally described as: to be provided through escrow (APN:024-147-34 ). 2.2 If the legal description of the Property Is not complete or is Inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company'),which shall issue the title policy hereinafter described. 2.3 The Property Includes, at no additional cost to Buyer, the permanent Improvements thereon, Including those Items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property:electrical distribution systems(power panel, bus ducting,conduits,disconnects,lighting fixtures);telephone distribution systems(lines,jacks and connections only);apace heaters;heating,ventilating, air conditioning equipment("HVAC");air lines;fire sprinkler systems;security and fire detection systems; carpets;window coverings;wall coverings;and N/A . (collectively,the"Improvements'). 2.4 The fire sprinkler monitor:❑is owned by Seller and Included in the Purchase Price,or❑is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided In Paragraph 2.3,the Purchase Price does not Include Seller's personal property,furniture and furnishings.and. N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Price')to be paid by Buyer to Seller for the Property shall be$8 95,000.00 payable as follows: (a) Cash down payment.Including the Deposit as defined in paragraph 4.3(or If an all cash transaction,the Purchase Price): $268,500.00 (Strike if not applicable) (b) Amount of"New Loan"as defined In paragraph 5.1.If any: $626,500.00 (G) guys;shall lake!!!!a to Ihe Property subjes!11a 11he(Q110WIAg existing deed(s)Of 11FUst (1) AR C..Ir II„a Note("First Note") Closing of approximately-- Said Fire,Nell 1^payable a tom^ epstisable) entire UApald ba:,^nse me due on }, An Existing Note(28eeond NOW)With all uApald PF'Arlpal balance as of the 6lasing of approximatsly; $ Said,Seoend Plate is payable a!$ neF month, laal.d sn1'"8 paid balance'a duean � (Strike If not (d) BUYOF shall give SelleF a deed Of 1FUS!("PUFOhase Money Deed of st')an the - ("PUFGhase Money Note")in!he amount of; $ Total Purchase Price: $8 95,000.00 3.2 If Buyer is taking title to the Property subject to,or assuming,an Existing Deed of Trust and such deed of trust permits the beneficto PAGE 1 OF 8 APPROVED AS TO FORM INITIALS PF MoQ TH GtyAteomq INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-4-8/OOE lLOloti ity Attomay demand payment of fees Including,b limited to,points,processing fees,and appraisal fees as a co to the transfer of the Property,Buyer agrees to pay such fees up to a maxin, if 1.5%of the unpaid principal balance of the applicable Existing. 4. Deposits. 4.1❑ Buyer has delivered to Broker a check In the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,Qr 0 Buyer shall deliver to Escrow Holder a check in the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited into the Escrows trust scount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer,be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Dale of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit"),in a Slate or Federally chartered bank In an Interest bearing account whose term Is appropriate and consistent with the timing requirements of this transaction.The Interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or interest forfeitures if the applicable Instrument is redeemed prior to Its specified maturity. Buyer's Federal Tax Identification Number Is .NOTE:Such Interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. S. Financing Contingency.(Strike If not applicable) 5.1 This offer Is contingent upon Buyer obtaining from an Insurance company,financial Institution or other lender,a commitment to lend to Buyer a sum equal to at least 70 %of the Purchase Price,at terms reasonably acceptable to Buyer.Such loan("New Loan")shall be secured by a first deed of trust or mortgage on the Property.If this Agreement provides for Seller to carry back junior financing,then Seller shall have the right to approve the terms of the New Loan.Seller shall have 7 days from receipt of the commitment setting forth the proposed terms of the New Loan to approve or disapprove of such proposed terms. If Seller fails to notify Escrow Holder, in writing, of the disapproval within said 7 days It shall be conclusively presumed that Seller has approved the terms of the New Loan. 5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan. If Buyer shall fall to notify Its Broker,Escrow Holder and Seller,In writing within 30 days following the Date of Agreement,that the New Loan has not been obtained,It shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan contingency. 5.3 If,after due diligence,Buyer shall notify its Broker,Escrow Holder and Seller.In writing,within the time specified In paragraph 5.2 hereof,that Buyer has not obtained said New Loan,this Agreement shall be terminated,and Buyer shall be entitled to the prompt return of the Deposit,plus any Interest earned thereon,less only Escrow Holder and Title Company cancellation fees and costs,which Buyer shall pay. 8. d IntoFOS!paid as follows; The PUFGhase MOAey Nets aAd PWFGh86e Money Deed of T-FLIS!shall be eA!he WHOM fGFFAS 60FAFAGAly used by reSSFOW HoIdeF,8Ad b A.3 The PuFGhass Money Note anrIlAF the PUFAhase Meney Deed of T-Fus!shall GonlaiA PFOY'SionS F8gaFdiFig the following(see also paFagFaph (b) Late Q4arge.A late shaF98 of �-f#H 0 shall be payable with F86POO!is any payment Of PFIAsipal,inIMS!,OF alheF GhaFgeS,Flat FRAGIA Mfith'A 10 days after-itis due (r) Due On Sale.In Ills SYSAI 1116 13UYSF 66116 OF UaMfeffi lot's 10 Ilhe PFGPSFIY OF MY PoFtion 11hemol,lheA 1118 S8118F may,a!8911806 Option, require!he eA1IF8 uApald baIaAGe of said Note to be paid IR fg. ]If a Faques!1`0F Rallies of default andiGF sale with F89ard to eaGh FAGFtg8gS OF deed of 1RAI In vihlah;I%A411 hA A,_,haFdI.RatA. 8� 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): 0 Lee & Associates—Newport Beach, Inc. represents Seller exclusively("Setters Broker"); m Lifestyle Homes represents Buyer exclusively("Buyer's Broker");or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder In connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1, and no broker or other person,firm or entity,other than said Brokers is/are entitled to any commission or finders fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to Indemnify,defend,protect and hold the other harmless from and against any costs,expenses or liability for compensation,commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,Including any counter-offers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seiler,but also Instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow Instructions restating or emending the Agreement unless specifically so Instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow in accordance with this Agreement,applicable law and custom and practice of the community In which Escrow Holder is located,including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located,the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described,Escrow Holder shall close this escrow(the"Closing")by recording a general warranty deed(a grant deed In California)and the other documents required to be recorded,and by disbursing the funds and documents in accordance with this Agreement. APP VED TO FORM Iq PAGE 2 OF 8 City Attorney INITIALS I�1n� INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION �u 'e M vi 5tW/O4 FORM OFA-4-8100E ty City Attorney 8.5 Buyer and Seller shall eaO one-half of the Escrow Holder's charges and Seller shall pay' zual recording fees and any required documentary transfer taxes.Seller sh: the premium for a standard coverage owner's or joint protectior. I of title Insurance. 8.6 Escrow Holder shall verity that all of Buyer's contingencies have been satisfied or waived prior to Closing. The matters contained In paragraphs 9.1 subparagraphs(b),(c),(d),(a),(g),(I),(n),and(o),9.4,9.5.12.13,14,16.18.20,21,22,and 24 are,however,matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency,as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty In this Agreement.In the event of such termination,Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is In condition for Closing;provided,however,that If the Closing does not occur by the Expected Closing Dale and said Date is not extended by mutual instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,In writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or Instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Seller's breach or default,then at Setter's request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports, maps,master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered Into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT. Buyers conditional approval shall constitute disapproval,unless provision Is made by the Seller within the time specified therefore by the Buyer In such conditional approval or by this Agreement,whichever is later,for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days is Inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association("AIR")standard form entitled"Setters Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property,duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 OF daysfollowing the Date of Agreement.Buyer has 30 deye from the Date afAgreement said disnlasures to approve or disapprove the matters disclosed. (b)Physical Inspection. Buyer has Der 30 days from the Date of Agreement, whiGhAVAF IS In'sF,to satisfy Itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report.Buyer has 30 OF days from the Date of Agreement,whichever-IS-laISF,to satisfy Itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties.Any such report shall be paid for by Buyer.A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use,manufacture, disposal or effect,render it subject to Federal,state or local regulation,investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 OF daysfrom the Date of Agreement,wkls111eveN6 lateF to satisfy itself with regard to the condition of the soils on the Property.Seller recommends that Buyer obtain a soil lest report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a)Governmental Approvals. Buyer has 30 OF days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with Its Intended use of the Property, Including, but not limited to, permits and approvals required with respect to zoning, planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (0 Conditions of Title.Escrow Holder shall cause a current commitment for title Insurance('Title Commitment")concerning the Property Issued by the Title Company,as well as legible copies of all documents referred to In the Title Commitment("Underlying Documents")to be delivered to Buyer within 10 er days following the Date of Agreement. Buyer has 40 30 days from the Pate of Agreement reselpt at the Title to satisfy itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Setter shall have the obligation,at Sellers expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30 OF days from the Date of Agreement to satisfy itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements,pales,structures and things located within 10 feet of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10 eF days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement("Estoppel Certificate")In the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property.Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy.Buyer has 3040 days from the 04te of Agreement to satisfy itself with regard to the Existing Leases and any other tenancy Issues. (1) Other Agreements. Seller shall within 10 OF—days of the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements")known to Seller that will affect the Property after Closing.Buyer has 30 40 days from the Date of Agreement to satisfy Itself with regard to such Agreements. 0)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. (to&Istinq Alates.It PaFagFaPh 34(r)has no!been stOrken,SelleF rhall within 10 eF days of the Date of A91POSIPASM PFOVIde BUYSF with-lagible GGP;86 ef the Existing Notes,Existing Deeds 0 T411611 and Felaled agF8eFReF1I6(G Loan Documents")to whiGh!he PFGPSFty F8FAAlA SU Ste RAIWFA aFid amount Of aAY Impaunds held by the bensfisiairy in GenneGUOA with suoh loan.BUyeF h86 40 OF_ days from the Ferelp!of the I-nan (1)Personal Property.In the event that any personal property Is Included in the Purchase Price,Buyer has Q er 30 days from the Date of Agreement to satisfy Itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 aF —days of the Dale of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less,Seller shalt repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a lose osting PAGE 3 OF 8 AP& ( VED AS TO FORM INITIALS PE °Qr ,City Attorney INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION 0,1 FORM OFA-4-8100E By�Deputy City Attorney 5114 I more than$10,000.00 to repair or cur rther terminate this transaction or to purchase the Property notv iding such loss,but without deduction or offset against the Purchase Price. ;oat to repair or cure is more than$10,000.00,and Buyer does i ct to terminate this transaction,Buyer shall be entitled to any Insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use,occupancy,tenants,or condition of the Property that occurs after the dale of this offer and prior to the Closing.Unless otherwise notified in writing,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee.Payment at the Closing of such brokerage fee as is specified In this Agreement or later written Instructions to Escrow Holder executed by Seller and Brokers("Brokerage Fee").It Is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement Insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified In this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified In subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein In a timely manner ("Disapproved Item").Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election").Seller's failure to give to Buyer within such period,written notice of Sellers commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election, within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyer's failure to notify Seller In writing of Buyers election to accept title to the Property subject to the Disapproved Item I.A.41110 A CIACILIG160A OF 80681 shall constitute Buyers election to terminate this transaction. Unless the Parties mutually instruct otherwise,if the time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and agrees that until such time as all Buyers Contingencies have been satisfied or waived,Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,stele and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediatlon of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties,and Buyer and Seller are not relying upon any Investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the Impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duty executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c)If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer.The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessors Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes.if Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (p If the Property Is located in California,an affidavit executed by Seller to the effect that Seller is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any Included personal property to Buyer. (h)If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as Immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being In recordable form,together with evidence of fire Insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a reel estate tax service contract(al Buyers expense),assuring Seller of notice of the status of payment of real properly taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest in Lease form specified In paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (a)11 applicable,a written assumption duty executed by Buyer of the loan documents with respect to Existing Notes. (I)If the Buyer Is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be Issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owners form policy of title Insurance effective as of the Closing,Issued by the Title Company in the full amount of the Purchase Price,Insuring title to the Property vested In Buyer,subject only to the exceptions approved by Buyer.In the event there Is a Purchase Money Deed of Trust In this transaction, the policy of title insurance shall be a joint protection policy Insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Proratlons and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any Insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any item to be prorated that Is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations In Existing Note Balances. In the event that Buyer Is purchasing the Property subject to an Existing Deed of Trust(s)),and in the PAGE 4 OF B APP OVED AS TO FORM INITIALS AUCityAttorney INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION GR ByI.raoois Mulvitiil� _ FORM OFA-4-8/OOE D"ty City Af:t-ney 564IOLA event that a Beneficiary Statement a to applicable Existing Note(s)discloses that the unpaid princif 'once of such Existing Note(s)at the Closing will be more or less than the, it set forth In paragraph 3.1(c)hereof("Existing Note Varlatlo an the Purchase Money Note(s)shall be reduced or Increased by an amount equal to such Existing Note Variation.If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or Increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller. Seiler is the owner of the Property and/or has the full right, power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided In paragraph 9.1(m)hereof,Seller shall maintain the Property until the Closing In its present condition,ordinary wear and tear excepted.The HVAC,plumbing,elevators,loading doors and electrical systems shall be In good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer In writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediation, repair, maintenance or Improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing,Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f)Possessory Rights. Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materialmens'lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (i)Notice of Changes.Seiler will promptly notify Buyer and Brokers In writing of any Material Change(see paragraph 9.1(n))affecting the Property that becomes known to Seller prior to the Closing. 0)No Tenant Bankruptcy Proceedings.Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or Insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller Is not the subject of a bankruptcy,insolvency or probate proceeding. (1)Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property Included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated In this Agreement,Buyer is purchasing the Property in Its existing condition and will,by the time called for herein,make or have waived all Inspections of the Property Buyer believes are necessary to protect Its own Interest in,and its contemplated use of,the Property.The Parties acknowledge that,except as otherwise staled in this Agreement, no representations,Inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and in that event,Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Setter's representatives,have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyers Entry. At any time during the Escrow period, Buyer, and Its agents and representatives,shall have the right at reasonable limes and subject to rights of tenants, to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however,without Setter's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller.Buyer shall return the Property to the condition it was in prior to such entry or work,Including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall Indemnify,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,including those for Injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees In connection therewith. 15. Further Documents and Assurances. The Parties shall each,diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further Information,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding(including arbitration)involving the Property whether founded In tort, contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)in any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys'fees.Such fees may be awarded in the same suit or recovered in a separate suit,whether or not such action or proceeding is pursued to decision or judgment.The term"Prevailing Party"shall Include,without limitation, a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense. The attorneys'fees award shall not be computed In accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably Incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only If made In writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer is the defaulting party,payment of said Brokerage Fee Is In addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be In writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth In this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt If personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient),provided a copy is also delivered via delivery or mall.If such communication is received on a Saturday,Sunday or legal holiday.It shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice In writing,designate a different address to which, or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 ntfZ0'J Attomey INITIALS INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-4-8/00E Deputy City Atso-w 20. Duration of Offer. 20.1 If this offer Is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 It shall be deemed automatically revoked. 20.2 The acceptance of this offer, or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. dv�ier Initials Seller Initials 23 ARB SISITTA-SP TO TWr--RETURN Or-DEPOSITA.40NEY,SHALL Bra D-6-T-SRA-41NED BY BINDING ARBITRATION BY,AND UISIDPIR TWr_ BY 3 ARBITRATORS WHO SHALL BE IMPARTIA6 REA6 ESTIA.T-E BROKERS WITH AT 61FAST S YEARS OF F-1-11-1- TIMS ri h4A4ZPr-RS 11SICI 1 1DRD'A'THS"ARBITRATION OF DISPUTES"PROVISIGN DECIDED BY NE-1 ITRAI ARBITRATION AS PROVIDED __R AGREEMENT TO TWIS er Initials Seller Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are Initialed by both of the Parties.Paragraphs 21 and 22 are each Incorporated Into this Agreement only If Initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by,and paragraph 22.3 Is amended to refer to,the taws of the state In which the Property is located. 23.3 Time of Essence.Time Is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are Identical except for the signatures,is authorized and Instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 Waive;efjuFyTFIaI, TWS P,A,R"TIES WSR"ERY I,Af,A"A,�E T116111 RSSPSGTIVS RIGHTS TO TRAL MY _11-IRY IN ANY ACTION OR PRAGfiS9RJ s INVA6NJA1-TH 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s) shall be governed by the principles set forth In the applicable sections of the California Civil Code,as summarized In paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation It has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers In this transaction,as follows: (a)Seller's Agent.A Salters agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations:(1)To the Seller:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller.(2) To the Buyer and the Seller: a.Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duly to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not Involve the affirmative duties set forth above. (b)Buyer's Agent.A selling agent can,with,a Buyers consent,agree to act as agent for the Buyer only.In these situations,the agen of PAGE 8 OF 8 AP V D AS TO FORM moo& H,City Attorney INITIALS INITIALS IVA`/ 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By L,eon;e Mulvia 5(1 p 104 FORM OFA-4-8100E Deputy City Attorney the Seller's agent,even if by agreerr a agent may receive compensation for services rendered,eithe II or in part from the Seller.An agent acting only for a Buyer has the folio ifflrmative obligations. (1) To the Buyer.A fiduciary duty of ut. :are, integrity, honesty,and loyalty in dealings with the Buyer.(2)To the Buyer and the Seller:a.Diligent exercise of reasonable skills and care m performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer:a.A fiduciary duty of utmost care,integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duties to the Seller and the Buyer as slated above in their respective sections(a)or(b)of this paragraph 24.2.(2)In representing both Seller and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.(3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own Interests.Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent is a person qualified to advise about real estate.If legal or lax advice is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting In the transaction.Buyer and Seller should each read Its contents each time it is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability(Including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or Information given Brokers that Is considered by such Party to be confidential. 25. Construction of Agreement.In construing this Agreement,all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall Include the plural and vice versa. Unless otherwise specifically indicated to the contrary,the word"days"as used In this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,if any,are as follows or are attached hereto by an addendum consisting of paragraphs 27 through 28 . (If there are no additional provisions write"NONE".) 27. Mineral Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelopment Plan. b) Covenant as to non—discrimination and non—segregation, c) Maintenance Covenant. Breach of any of these Covenants shall cause the property to revert to Seller. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO RICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: Lifestyle Homes LGB Investments LLC Attn:Margaret Van Herk By: Title: Date: Address:16912 Bolsa Chica Street, Suite 201 Name Printed:Gilles Aouizerat Huntington Beach, CA 92649 Title: Telephone:(714)969-1516 Telephone: — 10 — Facsimile:(_) Facsimile:( 7) ?�y.—cf1 r Federal ID No. By: Date: Name Printed: Title: Address:17912 Gothard Street Huntington Beach, CA 92647 Telephone:(714)274-3070 x 104 Facsimlle:(714)274-4213 Federal lD No. PAGE 7 OF 8 j1VfD AST FORMINITIALS �CityAttorney INITIALS ®2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Mulvi� ��� Ou FORM OFA�-6100E Deputy City Attorney 1 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 %of the Purchase Price divided In such shares as said Brokers shall direct in writing.This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliverka signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates-Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn:Curt Stalder/Jim Snyder By: Title:Senior Vice Presidents Date: Address:3991 MacArthur Blvd., Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(949)724-1000 Telephone:(_) f Facsimile:(949)833-0608 Facsimile:(_) Federal ID No. By: Dale: Name Printed: Title: Address:2000 Main Street Huntington Beach, CA 92648 Telephone:(_) Facsimile:(_) Federal ID No: These forms are often modified to meet changing requirements of law and needs of the industry.Always write or call to make sure you are utilizing the most current form:AIR Commercial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017. (213) f` 687-8777. ©Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission in writing. STALDER&GB-PURCHASE AGR VED AS TO FORM PAGE 8 OF 8 McG H,City Attorney INITIALS INITIALS ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By Leone Mulvihill �`r ! FORM OFA- Deputy City Attorney O I�� 48/OOE TAkM EA REAL- ESTATE _ DEVELOPMENT a� s V May 26, 2004 MAY 2 7 2004 r�FDEP'•,t - Lee & Associates Mr. Curt Stalder 3991 MacArthur Blvd., Suite 100 Newport Beach, CA 92660 Subject: Offer to Purchase 214 5th Street, Huntington Beach, CA 92648 (Owned by the City of Huntington Beach Redevelopment Agency) Dear Mr. Sta/der: Enclosed for your transmittal to the City of Huntington Beach Redevelopment Agency is a Standard Offer, Agreement and Escrow Instructions For Purchase Of Real Estate executed without revision by my client Mr. Robert J. Koury (Robert Koury Properties). Should the other two previous bidders also submit an executed Purchase Agreement without revision, it is my understanding that the Agency will then make a determination of who is the most qualified candidate to purchase the property based on their financial capabilities and development experience. I respectfully submit that by these measures, Mr. Koury is by far the most capable candidate to purchase and develop the subject property. If selected Mr. Koury will immediately begin the six month entitlement process leading to the commencement of construction in January of 2005. Not even the expected increases in interest rates, nor the recent surge of cost of raw materials (refer to attached news article) will deter Mr. Koury from commencing development immediately. Mr. Koury is a well financed long-term investor that buys, builds and holds for the sole purpose of creating and enhancing his income producing property portfolio. His portfolio is predominantly debt free with a debt to value ratio of approximately 10% loan to value. Suffice to say he does not participate in highly leveraged real estate speculative development. Please refer to the attached letter from Pacific Western Bank outlining Mr. Koury's financing source. Buyer's Experience Mr. Koury is an excellent candidate to purchase and develop the subject property as he early on recognized the value of investing in Huntington Beach. Mr. Koury has been buying, developing and holding property in downtown Huntington Beach since 1980. He currently owns twelve separate properties, five of which 221 MAIN STREET SUITE S HUNTINGTON BEACH, CA 92648 PHONE 714 . 536 . 5888 FAX 714 ■ 536 ■ 5889 are on Main Street, the largest being the 32,000 s.f. retail center located at 200 Main Street, known as Main Promenade, also home to Robert Koury Properties' offices. Mr. Koury is presently completing the final touches on a newly constructed two story 8,500 s.f. retail/office building located at 438 Main Street. Proposed Development/Schedule Should his offer be accepted, Mr. Koury would build a very similar two-story structure on the 5th Street site as the above described 438 Main Street, with retail on the ground floor and office above. If selected, we would like to open and close escrow as fast as the City/Agency can act. We would then immediately commence the entitlement process, with hopes to obtain necessary approvals before year's end. Once approved, construction would begin with hopes of being completed in time for the retail tenants to take advantage of summer crowds of 2005. Contingencies There are no contingencies to this offer. We will of course take the given 30 days time to perform our due diligence reviewing a Phase One and/or Phase Two report, as city documents indicate the site was at one time utilized for "automobile repair". In addition, both Lee & Associates and city staff have indicated that the property is "grandfathered" as it relates to parking indicating that 5,000 s.f. of retail and 3,000 s.f. of office can be developed without any requirements to provide on or off-site parking, nor to pay any in-lieu parking fees. The purchase price offered is directly based on the premise that there is "no parking requirement" as stated. We thank you in advance for your consideration of this offer, please call me directly should you have any questions at 714-536-5888 or my cell at 714-315- 2143. Sincerely, Keith Bohr, Broker TEAM Real Estate Enclosures: Pacific Western Bank Reference Letter dated May 12, 2004 LA Times Article Dated May 9, 2004 CC: Mr. Robert J. Koury May 12 04 10: 51a Robert Koury (714) 969-9284 p• 1 05-12-2004 4 T-016 P.001J001 P-362 a Dn0ICIL VY IF IS P tSA1\1K new) 1 _LjWr Mr. uavia Biggs Director of Economic Development City of Huntington Beach 2000 Main Street 51h Floor Huntington Beach.LA 91648 Dear Mr. Bions. I have been renjuested N-%,i Rcbert tlnllnf •,. a,lifl-1 . tme ' r_L-c+ -,_---..,.� .... I.vu+r .� Lsat]IiGt]lC i{1 UCld11 out long-standing and valued relationship, i know Mr. Koury has been involved in real estate development in yvf.:r vi,lt 1vr iliuny yuar3. 0,Ur relat:on„hlp with RU-belt Koury dates back to the mid-seventies. We have extended to Mr. Koury numerous leans both on a secured and unsecured basis which have all been paid as agreed. These loans have totaled millions of dollars over the years. We currently have available for Mr. Koury a credit facility in excess of$1 million. He has the option of drawing on the credit facility at any time he wishes. We consider Mr. Koury valued clients of the bank. He maintains a deposit relationship commensurate with the- magnitude of credit we have extended him. We would certainly be willing to lend him substantially larger sums of money should there hp an to nt rPrn Iirinq rho f11n41n, Ane]in _ ,.... .� , - . y let me emphasize our long-standing relationship with a valued client, who has always met his obligations in a timely anti fnrthrinht rmannar ifVol] shwAd have en y q, eshone nlnecn roll —0 + M14M nno n.+nw __ y...........,v. L.rwav vau ILI ql kJ+uf Ltu-4 Wit Of C-Illtlil file 81 LsaLn@pacifiewestlrnbank.com or fax me at(310)531-7294. Sin ety/� AlAV-_ Aa7es W. Saiin ���cutive Vice President vi5q Wilmaru OIVd.,Oevaly}iitli,CA 90212 www.paci(ieweelernbank.com M/1\!_ ^_1-rlfwf._/1 I.ICr'i .11'A•^�'JI'1M TI"i.TC/ M nnr.r. A ..,Hikes Inc is of materl,,- ls hitti ng like . a ton . bricks .of Rising prices for lumber, Random Lengths,a market-and $10 a sheet;nowit's$20." price-reporting service that Big lumberyard companies, steel and other supplies tracks lumber prices. such as Stock Building Supply 4 are adding to the bill for' Steel scrap prices are up (formerly Terry Lumber Co.), 100% from last year, making are used to fluctuations in wood home-building projects. steel studs,reinforcing bar,nails products,but this time is differ- and other products more expen- ent,they say.The price run-ups By DIANE WEDNER sive, according to the National have been lightning swift,result- nmes Staff writer Assn.of Home Builders. ing in comparison shopping In California,the steep price among contractors, who typi- First the run-up in gasoline increases could add about$8,000 cally stick to one supplier. and milk prices.Now lumber and to the cost of building a 2,100- "I look at this market and steel. square-foot house, said Michael cringe,"said Stock Building Sup- Homeowners planning to add Carliner, economist for the ply salesman David Johnson, a second story or a deck or, builders'trade group. whose clientele is about 90%con- heaven forbid,build a new house Some "weekend warriors" — tractors. "We're pushing too are in for some serious sticker homeowners who do their own much lumber here to have to re- shock, experts say, as soaring home improvements—may put quote deals after contractors `I prices of construction materials off some projects,such as deck- compare prices" at discount — from plywood to plumbing building. Retail prices for pre- stores. products—force contractors to mium redwood,for example,are Additionally, copper and raise prices along with the roofs. up 23%from a.ye'ar ago—$2.57 stainless-steel prices, as well as Record demand for construc-. per board foot, compared with drywall, have shown steady tion supplies amid shortages is $2.10 per board foot,lumber ven- gains this year. Because of creating a pricing nightmare, . dors report. China's building boom—it uses just as home building ap- Contractors,especially those more than one-third of the proaches peak season. who remodel homes,are feeling world's supply of steel and ce- The price of framing lumber is the pinch. ment steel prices have gone up up 58%from a year ago.Oriented "I've never seen anything like significantly and cement short- strand board — the plywood this," said Jeff Birch, a Dana ages have been reported. substitute used for walls, floors Point builder_in business for 27 Some smaller contractors,to and roofs — costs 158% more years. "I looked at plywood two protect their bottom lines be- than a year ago, according to to three months ago and it was [See Materials,Page K4] K4 SUNDAY, MAY 9, 2004 LOS ANGELES TIMES pinch Con r t actors eeas costs rise [Materials,from Page KI] that period, Birch is free to re- that in 1978 he could build an en- tween contract signings and the negotiate the price. tire house for $3,500 worth of beginning of construction — `j looked at plywood La Caiada Flintridge con- lumber. Today, a second-story often three months — routinely tractor Bob Rhody, reacting to addition alone requires $10,000 include a 5%cushion in the con- two to three months the high cost of raw building ma- in lumber. tracts, and others are adding terials, raised his price $2 a Some Southern California "escalation clauses"to allow for ago and it was$10 a square foot to $91 per square buyers may have a problem get- sudden increases In costs,espe- Sheet' now 2t'S$20. foot in January, when prices ting accurate appraisals on cially of lumber. , started climbing, and will raise newly built homes. Lags in up-. Dana Point contractor Birch —JEFF BIRCH them again this month for new dated sales prices reflecting paid a steep price two weeks ago contracts, allowing him a small higher building costs could shut for not using such a clause. He cushion against price increases. out some buyers. ' agreed to a remodeling quote he want to renege on his original A decade ago he charged $60 a Contractors worry that if in- gave a customer, who.was slow bid,had to absorb the expense. square foot. terest rates continue to rise as to sign his contract.By the time . "Now we put in a warning that "We don't usually need a expected, customers will seek Birch locked in the lumber prices the price of lumber in the con- cushion,but costs have gone up more bids than usual, resulting with his supplier, after the con- tract is good for seven to 10 days 50% in the last 10 years or so," in builders having to get more tract was signed,the prices had only,"Birch said.If the customer Rhody said. quotes for building materials to gone.up$6,000.Birch,who didn't doesn't sign the contract within More dramatic, he added, is stay competitive. .Standard Offer, Agreement & Escrow Instructions - Koury ATT J STANDARD,OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR Commercial Real Estate Association May 11, 2004 (Date for Reference Purposes) 1. Buyer. 1.1 Robert—if40—y 1 ,("Buyer") hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or individually,a"Party"), through an escrow("Escrow")to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder") whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 ,Phone No. (949) 644-9390 Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement"). Buyer shall have the right to assign Buyers rights hereunder,but any such assignment shall not relieve Buyer of Buyers obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined In paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that Is the subject of this offer consists of(insert a brief physical description) an approximate 5,300 square foot vacant parcel of land. is located In the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 214 Fifth Street and is legally described as: to be provided through escrow (APN:024-147-34 ). 2.2 If the legal description of the Property is not complete or Is inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall Issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, Including those items which pursuant to applicable law are a part of the property, as well as the following Items, If any,owned by Seller and at present located on the Property:electrical distribution systems(power panel,bus ducting,conduits,disconnects,lighting fixtures);telephone distribution systems(lines,jacks and connections only);space heaters;heating,ventilating, air conditioning equipment("HVAC");air lines;fire sprinkler systems;security and fire detection systems; carpets;window coverings;wall coverings;and N/A (collectively,the"Improvements"). 2.4 The fire sprinkler monitor:❑Is owned by Seller and included in the Purchase Price,or❑is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided In Paragraph 2.3,the Purchase Price does not include Sellers personal property,furniture and furnishings,and N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be$8 95,000.00 payable as follows: (a) Cash down payment,including the Deposit as defined in paragraph 4.3(or if an all cash transaction,the Purchase Price): $895,000.00 (Strike if not applicable) $ (G) BUYSF Shall take WIS 10!he PFGPOFIY subjeGt to the following existing deed(s)of tFusl An Existing Plate("First Note")with an unpaid pFinelpal balance as of the - 6losim9 of approximately $ Said FiAll Alois is payable a!$ -OF FROA114, applicable' entire unpaid ba anre'a due a (11) An Existing Nate("SOCORd Note")with an unpaid PFIR61pal balanGe as of Me 6196ing of approximately; $ So'lcOA::ote Is payable at$ , Including-)n:eresia;-Ih8F31e-s1 o, until paid(aAdioF the enliro Unpaid, alanse*6 dU8 GA (Sk&e 9 not (d) BUY8F Shall 9W S8118F a deed Of 1FUSt("PUFoha6a Money Deed of T.USV)GA the ("PUFGha6a M0n0 4Gte")in the amount of: $ Total Purchase Price: $895,000.00 3.2 If Buyer is taking title to the Property subject to,or assuming,an Existing Deed of Trust and such deed of trust permits the beneficiary to PAGE 1 OF 8 AFp VED AS TO FORM J Mr R.City Attorney INITIALS INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Mulvihill r'ya1o,( FORM OFA-4-8100E Deputy City Attorney demand payment of fees including, 1 limited to,points,processing fees,and appraisal fees as a cr 1 to the transfer of the Property,Buyer agrees to pay such fees up to a max,. .,of 1.5%of the unpaid principal balance of the applicable Existing J. 4. Deposits. 4.1❑ Buyer has delivered to Broker a check in the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,gr® Buyer shall deliver to Escrow Holder a check In the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited into the Escrows trust scount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter Into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer,be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with It by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit"),In a State or Federally chartered bank In an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction.The interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or interest forfeitures if the applicable Instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is .NOTE:Such interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. 5. FA This 048F IS GGAtIA98ni upon 13UYGF obtaining WFA an IRSUFanGe GempaAy,finaAGial institution OF GIheF ISFIdeF.a GGFAFnitmeFiI to IsAd to Buyer a sum equal la al;leas! -%of lhe-12umlimse PF'G8,81 ISMS MGGAably aGGeplable to BuyaF.gush loan("Now Loan")she"be 68GUFad by a AFSt dead Of 41:161 OF FAGAgage GA 11he PFOpeFty.it!h1s AgFeemem PFevidss f0F 88118F is GaRy back jUnk)F finanGing,then S-11-F shall have!he Fight 10 appFGVB 11he IeFms-4 the N&Ao Loan. SO IeF she"have 7 days from FeGelpt of!he Gemmitment setting feFth the PFOpeeed IeFfAs of the New I=GaA40 8PPFOYS OF disappFOY8 Of SUGh PFOposed 1AFFAS. If SAIIAF falls to nelify r566F0W HoldeF, iR WFIIiRg, of 11he disappFeval within said 7-days I!shall be 6-2 13UYBF hliFeby agFees to Mligenlly puFsue obtaining the Plow Loan It BUYeF Shall fall to notify its BFGk8F,EOGFOW WeldOF and 98118F,in Willing within days following the Date of AgFeement,that the Neiv Loan hag not been obtained,it Shall be ConGIUSIVOly pFeSUMed that B A.3 If.AftA.F d 18 dlligOAGe,13UYeF shall notify Us BFekeF,r56GFOW 14oldOF and 86118F,IR Writing,within the time sperified In paFagFaph 6.2 hereelf,!hat no!obtained said New Loan,!his AgFOSMSAt Shall be lewninaled,and 13uyeF shall be 8Atilled 10 the PFGFRpt FSIUFR of the DOP064,PIUS 8A 1AISF861 eaFAed lheFOGA,1866 GAIY raGGFOW HGIdGF and Title GefnpaAy GaAG8I1aIi0A fees aAd Gests,whish 13UYSF she"pay. 8. G4 The P--Fnhase Money Note shall PFGY!de feF inleFe6l on UApaid PFineipal a!the Fate of % PeF aAnufn.with PFIRGipal and interest paid as fellows: The PUFGhase MGAey Note and PUFGhase Money Deed at Tpjsl shall be on the GUFFOA!(OFIVIS Gammanly used by r56GFGW Holdw,and be junklF 64) The P 1F-h866 Money Note and!GF lhO PUFGha68 MOASY Used Of TFUSI shall GOntain PFOV'Slonfi Fe@aFdiF;g the following(see also paFagFaph (a) PMP8YM9n!.PFinolpal may 138 PFSpa;d in whole OF'A pak a!any lime without penalty,a!the eption of the Buyek (b) Late Ghs.,99�A late ehaF98 Of 6,14 shall be payable with FSSPSGt t8 8AY P8YFA8AI Of PFIAG'Pal,inteF0611,OF GthOF ohaFges,not made wit 40 days after iNsdae. ( ) - - - ' I 'he even!!he BUYeF 69116 OF lFaA6(8F6 1*118 10 the PFGPeFly OF BRY PGAIGA theF80f,then the S81'eF may,at Ssl!aF!s option, FeqUiF8 1he 8AII;8 UAPaid balanGe of said Note!a be paid in full. 9811806 behalf a Fequest(OF notiG8 of default andiGF sale with FBgaFd to sash FnGFlgag8 OF ClAAd Of'F'-'At 1, A'�h' will be subeFdinate, 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): m Lee & Associates-Newport Beach, Inc. represents Seller exclusively("Seller's Broker"); 0 Team Real Estate Development (Keith Bohr) represents Buyer exclusively("Buyer's Broker");or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, fine, broker or finder In connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1,and no broker or other person,firm or entity,other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to indemnify,defend,protect and hold the other harmless from and against any costs,expenses or liability for compensation,commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,Including any counter-offers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seller,but also Instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow Instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include Its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow in accordance with this Agreement,applicable law and custom and practice of the community in which Escrow Holder is located,including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the stale where the Property is located and the law of the state where the Escrow Holder is located,the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described,Escrow Holder shall close this escrow(the"Closing")by recording a general warranty deed(a grant deed in California)and the other documents required to be recorded,and by disbursing the funds and documents in accordance with this Agreement. PAGE 2 OF 8 APP30YED AS TO FORM c I9 RAT.1,City Attrtt INITIALS J � INITIAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION M.1 VVVVIIII���. �'�I0� FORM OFA 4 B/OOE Deputy City Attorney 8.5 Buyer and Seller shall as y one-half of the Escrow Holders charges and Seller shall pal isual recording fees and any required documentary transfer taxes.Seller shy...Nay the premium for a standard coverage owners or joint protection,..ucy of title insurance. 8.6 Escrow Holder shall verity that all of Buyers contingencies have been satisfied or waived prior to Closing. The matters contained in .paragraphs 9.1 subparagraphs(b),(c),(d),(a),(g),(I),(n),and(o),9.4,9.5,12,13,14,16,18,20.21,22,and 24 are,however,matters of agreement between the Parties only and are not Instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyers Contingency,as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty In this Agreement.In the event of such termination,Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyers obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow Is in condition for Closing;provided,however,that If the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,In writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holders fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Sellers breach or default,then at Sellers request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports, maps,master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT. Buyers conditional approval shall constitute disapproval,unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement,whichever is later,for the satisfaction of the condition imposed by the Buyer.Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association("AIR")standard form entitled"Setters Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property,duly executed by or on behalf of Seiler In the current form or equivalent to that published by the AIR within 10 op--days following the Date of Agreement.Buyer has 30 deye from the Date ofAgreement Bald disclosures to approve or disapprove the matters disclosed. (b)Physical Inspection. Buyer has 10 er 30 days from the Date of Agreement, whichever-is later,to satisfy itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report.Buyer has 30 er days from the Date of Agreement,wbispeve+_46IateF to satisfy Itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties.Any such report shall be paid for by Buyer.A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence,use,manufacture, disposal or effect,render it subject to Federal,state or local regulation,investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 er-days from the Date of Agreement,whicheveFis later-,to satisfy itself with regard to the condition of the soils on the Property.Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a)Governmental Approvals. Buyer has 30 eF--days from the Dale of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable In connection with its intended use of the Property, Including, but not limited to, permits and approvals required with respect to zoning, planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (f)Conditions of Title.Escrow Holder shall cause a current commitment for title insurance('Title Commitment")concerning the Property Issued by the Title Company,as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10 of days following the Date of Agreement. Buyer has 40 30 days from the Date of Atireement receipt Of the Title to satisfy Itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Seiler shall have the obligation,at Sellers expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30 eF days from the Date ofAgreement to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association("ALTA")standards for an owners policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements,poles,structures and things located within 10 feel of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10 OF days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property.Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy.Buyer has 3040 days from the Dote ofA#reament to satisfy itself with regard to the Existing Leases and any other tenancy Issues. (1) Other Agreements. Seller shall within 10 eF-days of the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements")known to Seller that will affect the Property after Closing.Buyer has 3040 days from the Data ofAbireement to satisfy itself with regard to such Agreements. 0)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. (k)&isting Notes.If PaFagFaPh 3.4(a)has nG!been SlFiGken,138"OF shall within 40 OF days of the Date of AgFOORFIBA!PFGvlde Buye with legible aeples of 1he E*Isilng Notes,Existing Deeds At T41161 And FAIRI a whiGh 1he PFopeFty wig AAh_FA and amount of any lFripaundt;he'd by the beneflolaFy In seAnei;tlon with 6uGh loan.Buy8F has 10 OF days(Forn!he FOGGip!of 1he 6oan GaGuments aAd BeRefiGlaFy Slatefflenis!a satisfy 111681!With FOgaFd!a Guoh fiRaAGOAU.BUY806 Gbligalk]A to 01060 16 G� being able la (1)Personal Property.In the event that any personal property is included in the Purchase Price,Buyer has 10 er 30 days from the Date ofAgreement to satisfy Itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 OF--days of the Dale of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less,Seller shall repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a to Fd,ping PAGE 3 OF 8 APPR 1/fln AS TO FORM INITIALS J �1 ''ti:rjTH,City Attomay I IAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION I(/I�� FORM OFA-4-8/OOE ale Mujvibill DDep*City Atta w5tn IDLI more than$10,000.00 to repair or c either terminate this transaction or to purchase the Property no ending such loss,but without deduction or offset against the Purchase Price. ..a cost to repair or cure is more than$10,000.00,and Buyer does elect to terminate this transaction,Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use,occupancy,tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing.Unless otherwise notified in writing,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee.Payment at the Closing of such brokerage fee as Is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers("Brokerage Fee").It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned,and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyers Contingency or any other matter subject to Buyers approval is disapproved as provided for herein in a timely manner ("Disapproved Item"),Seller shall have the right within 10 days following the receipt of notice of Buyers disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election").Sellers failure to give to Buyer within such period,written notice of Sellers commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election, within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyers failure to notify Seller in writing of Buyers election to accept title to the Property subject to the Disapproved Item shall constitute Buyers election to terminate this transaction. Unless the Parties mutually instruct otherwise,if the time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Dale,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item, or(c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and agrees that until such time as all Buyers Contingencies have been satisfied or waived,Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the Impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties,and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c)If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessors Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f)If the Property is located In California,an affidavit executed by Seller to the effect that Seller is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as Is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h)If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being in recordable form,together with evidence of fire Insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate lax service contract(at Buyers expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest In Lease form specified In paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (a)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f)If the Buyer is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owners form policy of title Insurance effective as of the Closing,issued by the Title Company In the full amount of the Purchase Price,insuring title to the Property vested In Buyer,subject only to the exceptions approved by Buyer.In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title Insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Proratlons and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly In cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any Insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate Insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s), n i the PAGE 4 OF 8 APP VEID AS, i JRM R M BATHD,Cig Attoma, INITIALS 54a1 INI IAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION ZIML FORM OFA-4-8/OOE event that a Beneficiary Stalemen the applicable Existing Note(s)discloses that the unpaid prir valance of such Existing Note(s)at the Closing will be more or less than tho_..,ount set forth in paragraph 3.1(c)hereof("Existing Note Varian. „then the Purchase Money Note(s)shall be reduced or Increased by an amount equal to such Existing Note Variation.if there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller. Seiler is the owner of the Property end/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided In paragraph 9.1(m)hereof,Seller shall maintain the Property until the Closing in its present condition,ordinary wear and tear excepted.The HVAC,plumbing,elevators,loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous SubstancesyStorage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer in writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casually Insurance company requiring any investigation, remediation, repair, maintenance or Improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing.Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materialmens'lien rights concerning the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (1)Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change(see paragraph 9.1(n))affecting the Property that becomes known to Seller prior to the Closing. 0)No Tenant Bankruptcy Proceedings.Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or Insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seiler Is not the subject of a bankruptcy,insolvency or probate proceeding. (1) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property Included In the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated In this Agreement,Buyer Is purchasing the Property in its existing condition and will,by the time called for herein,make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in,and its contemplated use of,the Property.The Parties acknowledge that,except as otherwise stated in this Agreement, no representations, inducements, promises, agreements,assurances,oral or written,concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and in that event,Buyer waives any right that It may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives,have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and Investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period, Buyer, and its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making Inspections and tests specified in this Agreement. No destructive testing shall be conducted, however,without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller,Buyer shall return the Property to the condition it was in prior to such entry or work,Including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such Inspections and tests and any other work conducted or materials fumished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall Indemnify,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,including those for Injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer, its agents or employees in connection therewith. 16. Further Documents and Assurances. The Parties shall each,diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 10. Attorneys'Fees. If any Party or Broker brings an action or proceeding(including arbitration)Involving the Property whether founded in tort,contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)In any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys'fees.Such fees may be awarded in the same suit or recovered in a separate suit,whether or not such action or proceeding is pursued to decision or judgment.The term"Prevailing Party"shall include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Parry or Broker of its claim or defense. The attorneys'fees award shall not be computed In accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale Is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer is the defaulting party,payment of said Brokerage Fee is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth in this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United Stales Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient),provided a copy is also delivered via delivery or mail.If such communication is received on a Saturday,Sunday or legal holiday,it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time, by notice in writing,designate a different address to which,or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 ApPROVED AS TO FORM INITIALS F&R Mo, RATS, 9Om`• INITIA 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION (fit FORM OFA-4-8/00E ".,r,,h,r+ip.,Attnensy 5Ob 10y 20. Duradon of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 It shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described In paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Buyer Initials Seller Initials 22. A.RR,TR.A.TIGNGFDISPUT-rmS (This 4Fb#mWn of Disputes paragraph is app#oable on4,if initialed by both PaWea.) .....LED T-G THE RETURN Or DEPOSIT MGNEY, RE DETERM NED W4-BINDING ARBITRATION RY,AND WNIDER THE RGIAL RUI ER Or TWR AMERIGAls' ARBITRATION ASSOCIATION ("COMMERCIAL RULSS"). ARBITRATION 14 RING WEAR AND DETERMINE SAID CONTROVERRY IN' ACCORDANCF WITH APPLIGA1366 LAW,THE INTENTIGNI OF T-Wr-PARTIES OF THE 3 ARBITRATORS,Bra RENDS-RED 0.41THIN 20 DAYS AFZER THS CONIC'1 ISIGN OF TWS HEARING,AND MAY INGLUIDE ON TWE AWARE) IN' ANY COURT OF: COMPRTENT 111RISMICTIGN ISIG:PNITHSTA NDING T-WE rA 11 I'Rr- OF A PARTY Dill 22.2 BUYER'S RESORT TO OR PARTICIPATIOIS 4ROITRAXION PROGIE-mi- SHALL NGT- 13AR SUIT IN UNTIL T-Wra ARBIT-R.ATION RRSU 11 T-2 IN' AN' AWARD TO T-14R Sri I r. Or 61QUIDAT91) DAMAGES, IN IA4W'CW EVENT. 5:1 IGW WE HAV9 READAND UNDERSTAND THE PGREGGING AND AGREN T SUBMIT DISPUTES ARISING OUT OF.TWr=MATT-a Buyer Initials Seller Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.Paragraphs 21 and 22 are each incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by,and paragraph 22.3 Is amended to refer to,the laws of the state in which the Property Is located. 23.3 Time of Essence.Time is of the essence of this Agreement: 23.4 Counterparts. This Agreement may be executed by Buyer and Seller In counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures,is authorized and instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 WAIVGF Of j"Fy TFIAI_ THIE PARTMA Mr-RSBY I.N.A.A.Ar TI'SIR RESPiCTIVE RIGHTS TO TRIAL BY _'URY IN ANY ACTION OR 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized In paragraph 24.2. 24.2 When entering into a discussion with a real estate agent regarding a real estate transaction, a Buyer or Seller should from the outset understand what type of agency relationship or representation It has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction,as follows: (a)Sellers Agent.A Sellers agent under a listing agreement with the Seller acts as the agent for the Seller only.A Setter's agent or subagent has the following affirmative obligations:(1)To the Seller:A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller.(2) To the Buyer and the Seller: a.Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith. C.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not Involve the affirmative duties set forth above. (b)Buyers Agent.A selling agent can,with a Buyer's consent,agree to act as agent for the Buyer only.In these situations,the a e s not PAGE 6 OF 8 App VED AS TO FORM R MaC3 TH,City Aktaamy INITIALS I,� I TI LS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION i:L �� C/�I04 FORM OFA-4-8100E D.paty City AN:oety 7l the Seller's agent,even if by agree the agent may receive compensation for services rendered,ei' full or in part from the Seller.An agent acting only for a Buyer has the foe,_ .,g affirmative obligations. (1) To the Buyer.A fiduciary duty of L at care, integrity, honesty, and loyalty in dealings with the Buyer.(2)To the Buyer and the Seller:a.Diligent exercise of reasonable skills and care in performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer In a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer:a.A fiduciary duty of utmost care,integrity, honesty and loyalty in the dealings with either Seller or the Buyer.b.Other duties to the Seller and the Buyer as stated above In their respective sections(a)or(b)of this paragraph 24.2.(2)In representing both Seller and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests.Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent is a person qualified to advise about real estate.If legal or tax advice is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting in the transaction.Buyer and Seller should each read its contents each time it is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party. The liability(including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or Information given Brokers that is considered by such Party to be confidential. 25. Construction of Agreement.In construing this Agreement,all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary,the word"days"as used in this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,If any,are as follows or are attached hereto by an addendum consisting of paragraphs 27 through 28 . (If there are no additional provisions write"NONE".) 27. Mineral_Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelopment Plan. b) Covenant as to non—discrimination and non-segregation, c) Maintenance Covenant. Breach of any of these Covenants shall cause the property to revert to Seller. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO RICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. ARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: <Ov.1 Team Real Estate Development R rt Aj Attn:Keith Bohr By: Title: Date: Address:221 Main Street, Suite 5 Name Printed: Huntington Beach, CA 92648 Title: Telephone:(714)536-5888 Telephone:(_) Facsimile:(714)536-5889 Facsimile:(_) Federal ID No. By: Dale: Name Printed: Title: Address: Telephone:(_) Facsimile:(_) Al Federal ID No. PAGE 7 OF 8 VBD AS TO FORM N Mo(ii)tA'"'CttyAttomay INITIALS I�AI� IN IAL 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By lwonie Mu)vibi)) 51301e4 FORM OFA-4-8/OOE Deputy City Attorney 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee In a sum equal to 6 %of the Purchase Price divided in such shares as said Brokers shall direct in writing.This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates—Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn:Curt Stalder/Jim Snyder By: Title:Senior Vice Presidents Date: Address:3991 MacArthur Blvd., Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(9 9 9)7 2 9—1000 Telephone:(_) Facsimlle:(949)833-0608 Facsimile:(—) Federal ID No. By: Date: Name Printed: Title: Address:2000 Main Street Huntington Beach, CA 92648 Telephone:(_) Facsimile:(_) Federal lD No: These forms are often modified to meet changing requirements of law and needs of the Industry.Always write or call to make sure you are utilizing the most current form:AIR Commercial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017. (213) 687-8777. ®Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any torn without permission in writing. STALDER/KHOURY-PURCHASE AGR APDROYED AS TO FORM PAGE 8 OF 8 4WOTH,l:lblAltazw INITIALS INITIA 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Doh IV�0il FORM OFA-4-8100E Recording Requested by: FREE RECORDING REQUESTED (Government Code Sections 6103, 27383) Redevelopment Agency of the City of Huntington Beach When Recorded Return to and Mail to: Agency Clerk Redeve gency of the City gton Beach 2000 in Street Huntington Beach, CA 92683 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Agency," acting under the Community Redevelopment Law(California Health and Safety Code §§ 33000, et seq.) of the State of California, hereby grants to_ , herein called "Grantee,"the real property, hereinafter referred to as the "Property,"whose legal description and map are set forth in Exhibit "A," which is incorporated herein. 1. Agency excepts and reserves from the conveyance herein described any existing street,proposed street, or portion of any street or proposed street lying outside the boundaries of the Property, which might otherwise pass with a conveyance of the Property. Agency excepts and reserves from the conveyance herein described all interest of Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500)feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Property lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the Property or other lands, but without, however, any right to use either the surface of the Property or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Property in such a manner as to create a disturbance to the use or enjoyment of the Property. 2. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 3343 of the Council of the City of Huntington Beach (the "City") on December 16, 1996, as amended, and the General Plan of the City approved by Council of City on May 13, 1996, by Resolution No. 96-36, as amended. Copies of the Redevelopment Plan and General Plan are on file with the City Clerk of the City of Huntington Beach at its offices as a public record and which are incorporated herein by reference. Page 1 of 9 G:\MulvihillVvtisc\Redevelopment Agency\Grant Deed-Form.doc 3. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that the Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan, the City's General Plan, the City Municipal Code and this Grant Deed, whichever document is more restrictive. 4. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that: (a) Solely at Grantee's expense, Grantee or Grantee's successor in interest shall reasonably maintain the improvements on the Property in good condition and appearance. Grantee shall keep the Property reasonably free from any accumulation of graffiti, debris and/or waste materials; (b) Grantee shall also maintain the landscaping on the Property in a reasonably healthy condition; and (c) If, at any time, Grantee fails to maintain the Property as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from Agency, either Agency or the City may perform the necessary landscape or other maintenance, or other actions and Grantee shall pay all costs incurred for such maintenance. 5. From ten (10) years from the date of recording of this deed, Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall not apply to the City for any land use entitlement or building permit for the Property without first applying to and obtaining a certificate of compliance from the Executive Director of the Agency or his designee that the proposed land use or building permit is consistent with the Redevelopment Plan. Agency shall not unreasonably withhold issuance of the certificate of compliance. Agency has the right, at its election, to reenter and take possession of the Property, with all improvements thereon, and terminate and revest in Agency the Property if Grantee (or its successors, transferees or assignees) shall obtain any land use entitlement or building permit for the Property without obtaining prior approval from the Agency Executive Director that the proposed use or building permit complies with the Redevelopment Plan. 6. Agency makes no warranty as to the presence or absence of any Environmental Contamination of the Property. Grantee takes the Property "as is." Grantee is responsible for determining the extent of any Environmental Contamination to the Property, and shall comply with all Environmental Laws in remediating and disposing of any Environmental Contamination of the Property. The term "Environmental Contamination" means contaminants or other toxic or hazardous substances, materials, constituents or wastes, including without limitation, all the following: any hazardous, toxic, corrosive, reactive, ignitable, carcinogenic or reproductive toxic substance, material, product, compound, chemical or waste (including, without limitation, petroleum, including crude oil or any fraction thereof, asbestos or asbestos-containing materials, flammable explosives, radioactive materials, and polychlorinated biphenyls) as defined in or Page 2 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc regulated by any Environmental Laws. "Environmental Laws"mean the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) and any other Federal, state or local statutes or the regulations regarding Environmental Contamination. 7. Grantee shall furnish or cause to be furnished to the Agency the following certificates of insurance in connection with any work of improvement to the Property pursuant to issuance of a certificate of compliance: (a) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability, Fire Legal Liability, Business Automobile Bodily Injury and Property Damage Liability extending to owned, non-owned and hired vehicles of Grantee or the General Contractor used in performance of any Grantee's obligations hereunder, amended as necessary to comply with governmental requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Property, including construction and staging areas, or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the issuance of any certificate of compliance. Such policy shall have an initial minimum coverage limit per occurrence of not less than $3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e., combined single limit), and carry a deductible per occurrence of not more than $25,000. (b) Worker's Compensation Insurance. Worker's compensation insurance, to be carried by Grantee or the Grantee's General Contractor, in an amount and form sufficient to meet all applicable governmental requirements, and employer's liability coverage to a limit of not less than $1,000,000, with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Grantee and the general contractor, and all risks to such persons arising out of construction, use or occupancy of the Property. 8. Each Insurance Policy required under Section 7 shall: (a) Be in form and substance as is then standard in California for policies of like coverage; (b) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less Page 3 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc than "A V according to A.M. Best's Insurance Reports Key Rating Guide (unless such rating is not commercially available at a reasonable cost, as reasonably determined by the Director) or if such rating system shall cease, then of recognized financial responsibility approved by the Agency in writing; (c) Provide coverage on an occurrence basis; (d) Contain a waiver by the insurer of the right of subrogation against Agency, the City and their respective board members, officers, employees, agents and representatives. (e) Include the following endorsements: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30) days written notice is given to the City and the Agency." (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach,their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." 9. Grantee covenants that, for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall protect, defend, indemnify and hold harmless City, Agency, and their officers, employees and agents from and against any and all claims, damages, losses, expenses,judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind), arising out of the Property, including, but not limited to any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation Page 4 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc (including arbitration) of every nature or liability of any kind), arising out of, resulting from, or in connection with, directly or indirectly, any and all Environmental Contamination. 10. Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, it agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Grantee or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. 11. Grantee covenants by and for itself and any successors, transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. Grantee shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assignees, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself,his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex,marital status, national origin, or ancestry Page 5 of 9 GAMulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 12. All conditions, covenants and restrictions contained in this Grand Deed shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Agency, its successors, transferees, and assignees, and the City and its successors, transferees and assigns, against Grantee, its successors, transferees and assignees, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of the Property or portion thereof. 13. All of the terms, covenants and conditions of this Grant Deed shall be binding upon Grantee and its permitted successors, transferees and assignees. Whenever the term "Grantee" is used in this Agreement, such term shall include any permitted successors, transferees and assignees. Notwithstanding anything to the contrary in this Grant Deed including, without limitation, any reference in this Grant Deed to "successors," "transferees" or "assignees" or any reference herein to any covenants, conditions and restrictions running with the land. Every other covenant and condition and restriction of this Grant Deed shall remain in effect until the end of the Redevelopment Plan. The covenants against discrimination set forth in paragraph (5) of this Grant Deed shall remain in perpetuity. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. 14. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of Page 6 of 9 GAMuMhill\Misc\Redevelopment Agency\Grant Deed-Form.doc protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. Agency shall have the right, if the covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches. The covenants contained in this Grant Deed,without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Redevelopment Plan Project Area, or any person or entity having any interest in any other such realty. 15. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair or change any mortgage or deed of trust or security interest placed on the property; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure,trustee's sale or otherwise, and further that if the Agency exercise its rights to re-enter and take possession of the property, it shall do so subject to any mortgage, deed of trust or security interest. 16. Both Agency, its successors, transferees and assignees, and Grantee, and the successors,transferees and assignees of Grantee in and to all or any part of the fee title to the Property shall have the right with the mutual consent of Agency to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee,trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. However, Grantee and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. [SIGNATURES ON THE FOLLOWING PAGE] Page 7 of 9 GAMulvihiII\Misc\Redevelopment Agency\Grant Deed-Form.doc IN WITNESS WHEREOF, Agency and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this day of , Agency-Agency: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic DATED: Chairperson ATTEST: DATED: Agency Clerk APPROVED AS TO FORM: DATED: Agency General Counsel Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. Grantee Name By: DATED: Name, Title Page 8 of 9 G:\Mulvihi11\Misc\Redeve1opment Agency\Grant Deed-Form.doc i STATE OF CALIFORNIA ) ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 9 of 9 G:\Mulvihill\Misc\Redevelopment Agency\Grant Deed-Form.doc .0 Covenant as to Use Consistent with Redevelopment Plan. Buyer covenants and agrees for itself, its successors, transferees, assignees, and every successor in interest to the Property or any part thereof, that the Property shall be used for the purposes designated in the Redevelopment Plan. All uses conducted on the Site, including, without limitation, all activities on the Property undertaken by Buyer, its successors, transferees, assignees, and every successor in interest to the Property or any part thereof shall conform to the Redevelopment Plan. Covenant as to Nondiscrimination and Nonsegregation. Buyer covenants by and for itself and any successors,transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease transfer, use, occupancy, tenure or enjoyment of the Property, nor shall each Buyer its or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenant shall run with the land. Buyer shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantial the following nondiscrimination or nonsegregation clauses: a. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assignees, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease,transfer, u occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." b. In leases: "The lessee herein covenants by and for himself herself, his or her heirs, executors, administrators, and assignees, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions". "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex,marital status, national origin, or ancestry in the leasing, subleasing,transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." C. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status,national CSF:\Brochures\Stolder\Covenants.doc / •, origin, or ancestry, in the sale, lease, sublease,transfer, use, occupancy,tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference or the selection, location,number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." Covenant as to Maintenance. Commencing at the time Buyer acquires title to the Property, Buyer or Buyer's successor in interest shall reasonably maintain the improvements thereon in good condition and appearance. Buyer or Buyer's successor in interest shall keep the Property reasonably free from any accumulation of graffiti, debris or waste materials. Buyer or Buyer's successor in interest shall also maintain the landscaping on the Property in a reasonably healthy condition. If, at any time, Buyer or Buyer's successor fails to maintain the Property as required by this covenant, and such failure is not corrected within thirty (30) days after the date of written notice from the Seller, either the Seller or the City of Huntington Beach may perform the necessary landscape or other maintenance, or other actions and the Buyer or Buyer's successor in interest shall pay all costs incurred for such maintenance. Violation of Covenants. Seller is deemed the beneficiary of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. The breach of any of the covenants herein contained shall cause the Property revert to the Agency. CSF:\Brochures\StaldeACovenants.doc RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Develo ment/Admin Services SUBJECT: SELECT BUYER FOR SALE OF PROPERTY AT 214 FIFTH STREET COUNCIL MEETING DATE: June 21 , 2004 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Attached Subleases, Third Party Agreements, etc. (Approved as to form by City Attome Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) - Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FO RDED Administrative Staff Assistant City Administrator Initial City Administrator Initial 4-- City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: Only)(Below Space For City Clerk's Use RCA Author: D. Biggs, ext. 5909 t; STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) AIR Commercial Real Estate Association May 11, 2004 (Date for Reference Purposes) 1. Buyer. 1.1 LGB Investments LLC ("Buyer") hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller")(collectively,the"Parties"or individually,a"Party.), through an escrow("Escrow")to close on or before the sixtieth (60th) day from the Date of Agreement ("Expected Closing Date")to be held by West Coast Escrow ("Escrow Holder") whose address is 2121 E. Coast Highway, #120B, Corona del Mar, CA 92625 ,Phone No. (949) 644-9390 ,Facsimile No. (949) 644-2825 upon the terms and conditions set forth in this agreement("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder,but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement In writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that Is the subject of this offer consists of(Insert a brief physical description) an approximate 5,300 square foot vacant parcel of land. Is located in the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 214 Fifth Street and is legally described as: to be provided through escrow (APN:024-147-34 ). 2.2 If the legal description of the Property is not complete or Is Inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, Including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seiler and at present located on the Property:electrical distribution systems(power panel,bus ducting,conduits,disconnects,lighting fixtures);telephone distribution systems(lines,jacks and connections only);space heaters;heating,ventilating, air conditioning equipment("HVAC");air lines;fire sprinkler systems;security and fire detection systems; carpets;window coverings;wall coverings;and N/A (collectively,the"Improvements"). 2.4 The fire sprinkler monitor:[]is owned by Seller and Included in the Purchase Price,or[]is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided in Paragraph 2.3.the Purchase Price does not Include Seller's personal property,furniture and furnishings,and. N/A all of which shall be removed by Seller prior to Closing. 3. Purchase Price. 3.1 The purchase price("Purchase Prlce'l to be paid by Buyer to Seller for the Property shall be$8 95,000.00 payable as follows: (a) Cash down payment,including the Deposit as defined in paragraph 4.3(or if an all cash transaction,the Purchase Price): $268,500.00 (Strike if not applicable) (b) Amount of"New Loan"as defined In paragraph 5.1,if any: $626,500.00 (26xisting Doodle) PFOR106601y9 ); Closing a!approximately $ appWable) entire unpaid belance in dues }. An Existing Nole("ReGond Note")with an unpand pFinGlpal balanno as of the Gleaing Of appreximatal)r• $ Said SeGOAd Plate'a payable a!$ -OF monih, insludinginlerest at the Fete at °' ^''^^'a'-^a'^•118 - enliro unpaid balance is due on (Sl4ko if nG1 (d) 13UYBF Shall give 6 1 Pur-haae Money Dead a!TFUSF)OR the me.�.-.,.Ghao R",ORGY NOW")'A the AFROL',,.of $ Total Purchase Price: $895,000.00 3.2 If Buyer Is taking title to the Property subject to,or assuming,an Existing Deed of Trust and such deed of trust permits the beneficiary to PAGE 1 OF 8 11/J�c�L/q'/� APPROVED AS TO FORM INITIALS F Mad TFi,City AttnmV INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION . FORM OFA4-8100E By Leonia Mulvii S(LD luLj Deputy City Attomey demand payment of fees Including,i limited to,points,processing fees,and appraisal fees as a co i to the transfer of the Property,Buyer agrees to pay such fees up to a maxi, of 1.5%of the unpaid principal balance of the applicable Existing 4. Deposits. 4.1❑ Buyer has delivered to Broker a check in the sum of$ N/A payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,2r m Buyer shall deliver to Escrow Holder a check in the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited Into the Escrow's trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyers check or funds shall,upon request by Buyer,be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed In paragraph 9.1 (a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit"),in a Slate or Federally chartered bank in an Interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction.The Interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or interest forfeitures If the applicable Instrument Is redeemed prior to its specified maturity. Buyers Federal Tax identification Number Is .NOTE:Such interest bearing account cannot be opened until Buyers Federal Tax Identification Number is provided. 5. Financing Contingency.(Strike if not applicable) 5.1 This offer Is contingent upon Buyer obtaining from an Insurance company,financial institution or other lender,a commitment to lend to Buyer a sum equal to at least 70 %of the Purchase Price,at terms reasonably acceptable to Buyer.Such loan("New Loan")shall be secured by a first deed of trust or mortgage on the Property.If this Agreement provides for Seller to carry back junior financing,then Seller shall have the right to approve the terms of the New Loan.Seller shall have 7 days from receipt of the commitment setting forth the proposed terms of the New Loan to approve or disapprove of such proposed terms. If Seller falls to notify Escrow Holder, In writing, of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan. 5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan. If Buyer shall fall to notify Its Broker,Escrow Holder and Seller,In writing within 30 days following the Date of Agreement,that the New Loan has not been obtained,It shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan contingency. 5.3 If,after due diligence,Buyer shall notify Its Broker,Escrow Holder and Seller,in writing,within the time specified in paragraph 5.2 hereof,that Buyer has not obtained said New Loan,this Agreement shall be terminated,and Buyer shall be entitled to the prompt return of the Deposit,plus any Interest earned thereon,less only Escrow Holder and Title Company cancellation fees and costs,which Buyer shall pay. 8. Sell 61 The PUFGhase Money Note shall PFOVIde(OF iAtSF861 GA unpaid PFIAGIPal a'the We At % POF annum.with pFinelpal and ;AISFOSt paid OR(9110M.FS' The PUFGha68 MGABY Plate and PUFrhase M0AeY Deed of Twat shall he an the WNW'fWAS nommonly used by ESGFOW Walelff,and 6.2 The PUFGhaSS Money NAIA MACYOF the P-Onhase Money Deed Of TFUSt Shall WAWA PFGVIS*GRS F89aFifing the(0110WIFIg(Sao 8160 PaFagF8ph 10.3(b# (a) PFOP"eni.PF'AG'pal Fnay be PFepald n whole OF iR paF1 at any IffiFne without penalty,at the option of!he BUY8F. (b) hale GhaFge.A late rhaFge of 6%shall be payable with respect to any payment of PFIAG'Pal,IAIeF86I,OF oth(IF GhaFgOG,no!Made within 10 days aAAr it is due (G) Due On Sale,in the even!the BUYSF 158119 GF IFAAAfAFA 1410'A IhS PFGPSFIY OF aRy PGAiGA lheF89f,then!he 98118F May,a!Selle0s optloR, MqUiffi the 8A48 unpaid balance of said Plate to be paid'A full. and-fe6erd-en rAIIA9A hAh8lf 8 F8qU661(OF notice of defaul,and.fAF Role with FOgaFd 10 GaGh modgage OF deed of IR-ist in%vhinh.Of i.A411 hA 61_1hAFdlA.AtA. 6_4 WARNING6 CALIrORNIA L.A.I.A.9 D0158 NOT A.1-1-CAN DErICIENCY JUDGEMENTS ON'SELLER FINANCING Ir BUYER AA.AT66 9 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): m Lee & Associates-Newport Beach, Inc. represents Seller exclusively("Sellers Broker"); m Lifestyle Homes represents Buyer exclusively("Buyers Broker');or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyers Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker or finder In connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1, and no broker or other person,firm or entity,other than said Brokers Is/are entitled to any commission or finders fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to Indemnify,defend,protect and hold the other harmless from and against any costs,expenses or liability for compensation,commission or charges which may be claimed by any broker,finder or other similar party,other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seiler,this Agreement,Including any counter-offers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seller,but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow Instructions restating or amending the Agreement unless specifically so Instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined In paragraphs 1.2 and 20.2 and advise the Parties and Brokers,In writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and Instructed to conduct the Escrow In accordance with this Agreement,applicable law and custom and practice of the community In which Escrow Holder is located,including any reporting requirements of the Internal Revenue Code.In the event of a conflict between the law of the stale where the Property is located and the law of the state where the Escrow Holder is located,the law of the state where the Property Is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described,Escrow Holder shall close this escrow(the"Closing")by recording a general warranty deed(a grant deed in California)and the other documents required to be recorded,and by disbursing the funds and documents in accordance with this Agreement. AppPAGE 2 OF 8 H VBD o TOP Cif) gA�H,City Attorney INITIALS IV INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By °M'� 51W104 FORM OFA-4-8/OOE Deputy City Attomey 8.5 Buyer and Seller shall ear one-half of the Escrow Holder's charges and Seller shall pay sual recording fees and any required documentary transfer taxes.Seller sh. y the premium for a standard coverage owner's or joint protectio. y of title insurance. 8.6 Escrow Holder shall verify that all of Buyers contingencies have been satisfied or waived prior to Closing. The matters contained in paragraphs 9.1 subparagraphs(b),(c),(d),(a),(g),(i),(n),and(o),9.4,9.5,12,13,14,16,18,20,21,22,and 24 are,however,matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction Is terminated for non-satisfaction and non-waiver of a Buyers Contingency,as defined in paragraph 9.2.then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty In this Agreement.In the event of such termination,Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyers obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing;provided,however,that If the Closing does not occur by the Expected Closing Date and said Dale is not extended by mutual Instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,in writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or Instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holders fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Sellers breach or default,then at Sellers request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports, maps,master plans,feasibility studies and other similar Items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report If the written contract which Buyer entered Into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT. Buyers conditional approval shall constitute disapproval,unless provision is made by the Seller within the time specified therefore by the Buyer In such conditional approval or by this Agreement,whichever Is later,for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days Is Inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See AIR Commercial Real Estate Association("AIR")standard form entitled"Sellers Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ('Property Information Sheet")concerning the Property,duly executed by or on behalf of Seller In the current form or equivalent to that published by the AIR within 10 OF--days following the Dale of Agreement.Buyer has 30 doye from the Data ofAgreament 10 days from the F81364" RAW dlssloeures to approve or disapprove the matters disclosed. (b)Physical Inspection. Buyer has 10 er 30 days from the Dale of Agreement, whiogevAF me later,to satisfy itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report.Buyer has 30 OF days from the Date of Agreement,Ito satisfy Itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties.Any such report shall be paid for by Buyer.A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence,use,manufacture, disposal or effect,render it subject to Federal,state or local regulation,investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 or--days from the Date of Agreement,wkiGheveNs IateF;to satisfy Itself with regard to the condition of the sells on the Property.Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a) Governmental Approvals. Buyer has 30 OF -days from the Date of Agreement to satisfy Itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its Intended use of the Property, Including, but not limited to, permits and approvals required with respect to zoning, planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (0 Conditions of Title. Escrow Holder shall cause a current commitment for title insurance('Title Commitment")concerning the Property issued by the Title Company,as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10 eF days following the Date of Agreement.Buyer has 48 30 days from the Date of Agreement rese{pt of Me Title to satisfy itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Seller shall have the obligation,at Sellers expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30 OF days from the Date of Agreement to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association("ALTA")standards for an owners policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements,poles,structures and things located within 10 feet of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10 or--days of the Dale of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property.Seller shall use Its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy.Buyer has 3040 days from the Date of Agreement to satisfy itself with regard to the Existing Leases and any other tenancy issues. (1) Other Agreements. Seller shall within 10 eF--days of the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements")known to Seller that will affect the Property after Closing.Buyer has 3040 days from the Date of Agreement to satisfy Itself with regard to such Agreements. 0)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. (k)Exialing Notes.it paragraph 3.1(G)has no!be8A SIFIGI(SA,Boller shall wilhill 10 OF days of 1he Date of Agreement provide Buys with-1 F8MaIA subjeG!after the Closing r5arFew Holder Shall PFOMPIPY request 48M IhA IhAWAFA Af this rKisfing Plate&a bOASAGICIFY 611218FASAI("Bansfilsia Statement")GGAfiFM'Rg;(1)the OFFIGUn!Of!he unpaid pringipal balanos,11AIS GUFFen!inteF861 rate,and the dais la whiGh interest'a paid,aA(2)the of-Ihe 6eafl DOGUMISAIS arid GiOnSfiGiary SlatoFFISAIS to sallsfy Hsolif wilh regard 10 6UGh IiAandng.9U. being able io ed an thin AgF88M8A1 or approved by 1361yeF,provided,however,Buyer Shall pay the transfer(as referred to in paragraph 3.2 hereof. (1)Personal Property.In the event that any personal property is included in the Purchase Price,Buyer has 10 0 30 days from the Date of Agreement to satisfy Itself with regard to the title condition of such personal property.Seller recommends that Buyer obtain a UCC-1 report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any liens or encumbrances affecting such personal property that it is aware of within 10 or---days of the Date of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10,000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less,Seller shall repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a toss costing PAGE 3 OF 8 tF VBD AS TO FORMINITIALS BR a(3R�TH,CityAttorney INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-4-8100E ia viU S�LO I0,1 Deputy City Attorney more than$10,000.00 to repair or cur either terminate this transaction or to purchase the Property nosy riding such loss,but without deduction or offset against the Purchase Price. :ost to repair or cure is more than$10,000.00,and Buyer does ,ct to terminate this transaction,Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use,occupancy,tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing.Unless otherwise notified in writing,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shell assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee.Payment at the Closing of such brokerage fee as Is specified In this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers("Brokerage Fee").It Is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement Insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified In this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by.Buyer,and may be elsewhere herein referred to as"Buyer Contingencles." 9.3 If any Buyer's Contingency or any other matter subject to Buyers approval Is disapproved as provided for herein In a timely manner ("Disapproved Item"),Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election").Seller's failure to give to Buyer within such period,written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election, within 10 days after Setter's Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyer's failure to notify Seller In writing of Buyers election to accept title to the Property subject to the Disapproved Item without dedurlion oF offset shall constitute Buyer's election to terminate this transaction. Unless the Parties mutually instruct otherwise,If the time periods for the satisfaction of contingencies or for Sellers and Buyers said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transaction,whichever Is later. 9.4 Buyer understands and agrees that until such time as all Buyers Contingencies have been satisfied or waived,Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the Impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties,and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the Impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c)11 applicable,the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer.The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessors Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (0 If the Property is located In California,an affidavit executed by Seller to the effect that Seller Is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as Is required by such statute. (g)If applicable,a bill of sale,duty executed,conveying title to any included personal property to Buyer. (h) If the Seller is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Dale. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being in recordable form,together with evidence of fire Insurance on the improvements In the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate tax service contract(at Buyers expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (a)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f)If the Buyer is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be Issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owners form policy of title Insurance effective as of the Closing,issued by the Title Company In the full amount of the Purchase Price,Insuring title to the Property vested in Buyer,subject only to the exceptions approved by Buyer.In the event there Is a Purchase Money Deed of Trust In this transaction, the policy of title insurance shall be a joint protection policy Insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Proratlons and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING: Any Insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate Insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,Interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 11.4 Security Deposit.Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s),and In the PAGE 4 OF 8 APp OVED AS TO FORM INITIALS fi �Vrl CttyAttomey INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By l.waio Mulvia FORM OFA-4-8100E Dq-ty City Anomey 5(ya lob event that a Beneficiary Statement: he applicable Existing Note(s)discloses that the unpaid print' lance of such Existing Note(s)at the Closing will be more or less than the_ int set forth In paragraph 3.1(c)hereof("Existing Note Variatio. ien the Purchase Money Note(s)shall be reduced or Increased by an amount equal to such Existing Note Variation.If there Is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations In New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers In all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided In paragraph 9.1(m)hereof,Seller shall maintain the Property until the Closing in its present condition,ordinary wear and tear excepted.The HVAC,plumbing,elevators,loading doors and electrical systems shall be In good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer in writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any Investigation, remedlation, repair, maintenance or improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing,Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyers written approval,which approval will not be unreasonably withheld. (I)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materlaimens'lien rights conceming the Property. (h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission,board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (i)Notice of Changes.Seller will promptly notify Buyer and Brokers in writing of any Material Change(see paragraph 9.1(n))affecting the Property that becomes known to Seller prior to the Closing. Q)No Tenant Bankruptcy Proceedings.Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller is not the subject of a bankruptcy,Insolvency or probate proceeding. (1)Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property Included In the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated In this Agreement,Buyer Is purchasing the Property in its existing condition and will,by the time called for herein,make or have waived all Inspections of the Property Buyer believes are necessary to protect its own interest in,and Its contemplated use of,the Property.The Parties acknowledge that,except as otherwise staled In this Agreement, no representations, inducements, promises, agreements,assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and in that event,Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Sellers representatives,have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyers Entry. At any time during the Escrow period, Buyer, and Its agents and representatives, shall have the right at reasonable times and subject to rights of tenants, to enter upon the Property for the purpose of making Inspections and tests specified in this Agreement. No destructive testing shall be conducted, however,without Sellers prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller,Buyer shall return the Property to the condition it was in prior to such entry or work,including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such Inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall Indemnify,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,Including those for Injury to person or property, arising out of or relating to any such work or materials or the acts or omissions of Buyer,its agents or employees In connection therewith. 15. Further Documents and Assurances. The Parties shall each,diligently and In good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company. 15. Attorneys'Fees. If any Party or Broker brings an action or proceeding(Including arbitration)Involving the Property whether founded In tort,contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)In any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys'fees.Such fees may be awarded In the same suit or recovered in a separate suit,whether or not such action or proceeding is pursued to decision or judgment.The term"Prevailing Party"shall Include,without limitation, a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of Its claim or defense. The attorneys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably Incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Brokers Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer is the defaulting party,payment of said Brokerage Fee is In addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth In this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed.Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the some to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine Is sufficient),provided a copy is also delivered vie delivery or mail.If such communication is received on a Saturday,Sunday or legal holiday,it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time,by notice in writing,designate a different address to which, or a different person or additional persons to whom,all communications are thereafter to be made. PAGE 5 OF 8 Ail. OVED AS TO FORM IF McOTT71,City Attorney INITIALS INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION By L.eonie M.6" Sryp'U'l FORM OFA-4-8/00E Deputy CHy Attorney -20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach on the date of June 10, 2004 it shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Patties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$ 20,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. 42 - er Initials Seller Initials GISITITI ED TO TWr-RETURN Or DEPOSIT MONISaY, SHALL BE DETSIRA-411SI-RD-MY BINDING ARS-IT-RAITION BY,AND UNDER THE Ais YOU R.rri-IRE, TO SUBMIT TO ARR-IT-RATION AFTER AGREEING TO THIS PROVISION, YoU _16ral) TO filbyefinitials Seller Initials 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.Paragraphs 21 and 22 are each Incorporated Into this Agreement only If initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to,the laws of the state In which the Property Is located. 23.3 Time of Essence.Time is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller In counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are Identical except for the signatures,is authorized and instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. RROC§691INIG INVOWING THIS 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth In the applicable sections of the California Civil Code,as summarized in paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction, a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers In this transaction,as follows: (a)Sellers Agent.A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations:(1)To the Seiler:A fiduciary duty of utmost care,Integrity,honesty,and loyalty in dealings with the Seller.(2) To the Buyer and the Seller: a.Diligent exercise of reasonable skills and care In performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent Is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (b)Buyers Agent.A selling agent can,with.a Buyer's consent,agree to act as agent for the Buyer only.In these situations,the agent' not PAGE 6 OF 8 MVkAS TO FORM H,City Attorney INITIALS IV//l/ INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION BY Leonia MulviU 15(10 104 FORM OFA-4-8/00E Deputy City Attorney • y the Seller's agent,even if by agreer �e agent may receive compensation for services rendered,eith 'ull or In part from the Setter.An agent acting only for a Buyer has the f0IIL affirmative obligations.(1) To the Buyer.A fiduciary duty of u, care,Integrity, honesty, and loyalty In dealings with the Buyer.(2)To the Buyer and the Seller:a.Diligent exercise of reasonable skills and care in performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent Is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not Involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer:a.A fiduciary duty of utmost care,integrity, honesty and loyalty In the dealings with either Seller or the Buyer, b.Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2.(2)In representing both Seller and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own Interests.Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent is a person qualified to advise about real estate.If legal or lax advice Is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting In the transaction.Buyer and Seller should each read Its contents each time it is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party.The liability(Including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement:provided, however,that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Conridentlal Information:Buyer and Seller agree to identify to Brokers as"Confidential"any communication or information given Brokers that Is considered by such Party to be confidential. 25. Construction of Agreement.In construing this Agreement,all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall Include the plural and vice versa. Unless otherwise specifically Indicated to the contrary,the word"days"as used In this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,If any,are as follows or are attached hereto by an addendum consisting of paragraphs 27 through 28 . (If there are no additional provisions write"NONE".) 27. Mineral Rights: Any oil, mineral rights etc. shall be retained by Seller. 28. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: a) Covenant requiring use of property to be consistent with purposes designated in Redevelopment Plan, b) Covenant as to non—discrimination and non—segregation, c) Maintenance Covenant. Breach of any of these Covenants shall cause the property to revert to Seller. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: Lifestyle Homes LGB Investments LLC Attn:Margaret Van Herk By: Title: Date: Address:16912 Bolsa Chica Street, Suite 201 Name Printed:Gilles Aouizerat Huntington Beach, CA 92649 Title: Telephone:(714)969-1516 Telephone: )- _ Facsimile:( Facsimile:( ) 3C/ Federal ID No. By: Dale: Name Printed: Title: Address:17912 Gothard Street Huntington Beach, CA 92647 Telephone:(714)274-3070 x 104 Facsimile:(714)274-4213 Federal ID No. PAGE 7 OF 8 fAPV D AS TO FORMty AttorneyINITIALS MT Ci INITIALS ©2000-AIR COMMERCIAL REAL ESTATE ASSOCIATION Mulvihill rl 0� FORM OFA-4.8100E Deputy City Attomey 7l • b, 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Propel,y to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth In this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 h of the Purchase Price divided In such shares as said Brokers shall direct in writing.This Agreement shall serve as an Irrevocable Instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates—Newport Beach, Inc. Redevelopment Agency of the City of Huntington Beach Attn:Curt Stalder/Jim Snyder By: Title:Senior Vice Presidents Date: Address:3991 MacArthur Blvd., Suite 100 Name Printed: Newport Beach, CA 92660 Title: Telephone:(949)724-1000 Telephone:(_) Facslmile:(949)833-0608 Facsimile:(_) Federal ID No. By: Date: Name Printed: Title: Address:2000 Main Street Huntington Beach, CA 92698 Telephone:(_) Facsimile:(_) Federal ID No: These forms are often modified to meet changing requirements of law and needs of the Industry.Always write or call to make sure you are utilizing the most current form:AIR Commercial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017. (213) 687-8777. ®Copyright 2000 By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. STALDER&GO-PURCHASE AGR APIR�IVBD AS TO FORM PAGE 8 OF 8 McCi City Attorney INITIALS INITIALS 02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION B7 leonae Mu rII 5(L010� FORM OFA4-8100E Deputy City Attorney �Id3�0,Ill :. •4�OOd9 31 1i83`10 l ll i jHi ON11331M IIONno0 T& . 3H11d OdG - Hi=10 lNVddV 3 3A 303d REAL- ESTATE DEVELOPMENT AND RECt=.. f" .644y RT OF THE RECORD ING OF AT THE _r- `OF THE CITY CLERK June 21, 2004 C`" ,�jRArq CITY CLERK Chairperson and Redevelopment Agency Members C/O The Honorable City Clerk 2000 Main Street, Huntington Beach, CA 926486 Subject: Agenda Item E-2 - "Select Buyer for Sale of Property at 214 Fifth Street"- Robert J. Koury Revised Offer to Purchase 214 5th Street, for $950,000. Dear Chairperson and Redevelopment Agency Members: On behalf of my client Mr. Robert Koury (Robert Koury Properties), please consider this letter as a formal revision to our previously submitted written offer to purchase 214 Fifth Street, dated May 11, 2004 (Attachment #2 to Agenda Item E-2). The singular revision is that of the purchase price which instead of the previously offered $895,000, the revised offer is now $950,000. During the last round of negotiations it was communicated to us by the Agency's broker Curt Stalder at Lee & Associates that the Agency would be sending to the top three previous bidders a completely filled out "Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate"with the Purchase Price filled in at $895,000 for the bidder's consideration and option to execute as is, not execute or to revise and execute. I specifically asked (and I am paraphrasing) "so you are not looking for the bidders to re-bid allowing one last chance for the highest bidder to "win" the purchase contract?" "No, if one or more persons execute the purchase contract as presented without any revisions then we will analyze each based on their experience and financial capabilities and make a recommendation accordingly." Hence, we executed the Purchase Contract "as is" and submitted a detailed transmittal letter outlining Mr. Koury's long history as an investor in real estate in Southern California including twelve properties in downtown Huntington Beach. We also included a letter from Pacific Western Bank illustrating Mr. Koury's excellent financial standing, stating he has an existing on-going line of credit in excess of $1,000,000 that is available for him to draw upon anytime he wishes. With no disrespect at all to the other bidder we feel Mr. Koury is eminently more qualified and therefore recluest that the Agency consider approving staff Alternative Action No. 1. 221 MAIN STREET - SUITE S HUNTINGTON BEACH, CA 92648 PHONE 714 . 536 . 5888 FAX 714 - 536 - 5889 Page 2 — Letter to R development Agency dated June ci, 2004 Agenda Item E-2 - "Select Buyer for Sale of Property at 214 Fifth Street"- Robert J. Koury Revised Offer to Purchase 214 5th Street for $950,000. We thank you in advance for your consideration of this revised offer. Sincerely, Keith Bohr, Broker Buyer Authorization. TEAM Real Estate Mr. Robert Ko ALLEY I 60.00' ---------- ----------- ---------- UP' DEDICATION I � �---- OFFICE 1 RETAIL I I I -- RECEIVED FRO AND MADE A PART OF TH RECORD AT THEO I COUNCIL MEETING OF //tom OFFICE i OFFICE OF THE CITY CLERK RETAIL 1 , T eeNNtEeRGQKWAY,,-CITY CLERK I 0 ' �^ I 0 ' 1 I } OFF ICE ' RETAIL RETAIL 3 �C IL CK I ,1 I 'II I I E , E orcr% I UP -------- ------- ------- ------- SECOND LEVEL FIRST LEVEL FLOOR PLAN II FLOOR PLAN J _ RETAIL OFFICE. 6TH STREET m SNS NLNMWM WAar CAU Omar All Su.,. ity Contracts Checklist for Submittal to City Clerk's Office Hun[ o'Ikach• (Please transmit this form when your contract is ready to be filed in the City Clerk's office) To: Connie Brockway, City Clerk x5404 1. Name of Contractor: Lee &Associates 2. Purpose of Contract: Listing Agreement-to find buyers for property located at 214 -51h St. on behalf of the Redevelopment Agency Ge; 3. Expiration Date: 07/31/04 - - - r-ri c C-, 4. Amount of Contract:, Commission based r; A. Is the attached contract RELATED to a PREVIOUSLY SUBMITTED contract(renewaVamendment/etc)? .8 YEb' ® NO B. Did you attach the LIST OF CONSULTANTS from whom proposals were requested—pursuant to HBMC 3.03.100? ®YES❑NIA OR Is the attached contract a SOLE SOURCE? []YES ®NIA C. Did you attach a COPY of the insurance certificate/waiver and send the ORIGINAL to Risk Management? ®YES PLEASE INCLUDE: CITY CLERK'S OFFICE USE ONLY: Cato, c a M .Data En z n �. „� 3. . - Alpha�lyumenc� David Biggs- ext. 5909 00 t Pendiri ;;,„ 6 �10, '�`�l� h'�aYa�„�#.�h,tF.� r ,. , :'`,yyr � r ' '£•^ e u T Economic Development k February 3, 2004 4 t aik \ b RECORDS L)N Check Cdy Clerk's Database for Existing Ftle;;, ❑,DONE,, g:/forms/city clerk contract checklist.doc INSURANCE AND INDEMNIFICATION WAIVER -� MODIFICATION REQUEST 1. Requested by: David Biggs 2. Date: February 2, 2004 3. Name of contra ctor/pe rm ittee: Lee & Associates 4. Description of work to be performed: Listing agreement - to find buyers for property located at 214 Fifth Street on behalf of the Redevelopment Agency 5. Value and length of contract: Commission based/expires 7/31/04 6. Waiver/modification request: Indemnify in the event of Agency's failure to disclose 7. Reason for request and why it should be granted: Necessary to effectuate listing agreement 8. Identify the risks to the City in approving this waiver/modification: Low in that Agency will indemnify only in the event of its failure to provide full disclosures required by law. ��z1oy Department Head Signature Date: w APPROVALS is Approvals must be obtained m'ttie order 6stetl on this form Two approvals are requded ; for a request to tie granted Approval from the City Atlmiriistrator's Office s onlyrequired if 45e Risk Management and the City AttomeVs Office disagree 1. Risk Management f Approved ❑ Denied Signature Date 2. City Attorney's Office Approved ❑ Denied 2 f2_ V 7f761 Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approvetl;.t he-co ted waver/modifcation request is to be subrmitted t"o the City Attorneys Office along with the contract for approval Once the contracf has been approved; ;this formls to be filed with the Risk ManagementDivision of Administrative Services Document2 2/2/04 9:24 AM STANDARD OWNER-AGENCY AGREEMENT FOR SALE OR LEASE OF REAL PROPERTY (Non-Residential) AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 1. BASIC PROVISIONS("BASIC PROVISIONS"). 1.1 Parties: This Owner-Agency Agreement("Agreement"),dated for reference purposes only January 20 , 2004 , Is made by and between Redevelopment Agency of the City of Huntington Beach whose address is 2000 Main Street, Huntington Beach, CA 92648 telephone number (714) 536-5909 Fax No. (714) 374-5365 ("Owner"),and Lee & Associates - Newport Beach, Inc. whose address is 3991 MacArthur Boulevard, Suite 100, Newport Beach, CA 92660 telephone number (949) 724-1000 Fax No. (949) 833-0608 , ("Agent"). 1.2 Property/Premises: The real property,or a portion thereof, which is the subject of this Agreement is commonly known by the street address of 214 Fifth Street located in the City of Huntington Beach County of Orange State of California and generally described as(describe briefly the nature of the property): a vacant parcel of land of approximately 5,300 square feet ("Property"). (See also Paragraph 3). 1.3 Term of Agreement: The term of this Agreement shall commence on February 1, 2004 and expire at 5:00 p.m.on July 31, 2004 except as it may be extended("Term"). (See also paragraph 4) 1.4 Transaction: The nature of the transaction concerning the Property for which Agent is employed("Transaction")is (check the appropriate box(es)): (a) El A sale for the following sale price and terms: at terms and conditions as acceptable to Owner and other additional standard terms reasonably similar to those contained in the"STANDARD OFFER,AGREEMENT AND ESCROW INSTRUCTIONS FOR THE PURCHASE OF REAL ESTATE"published by the American Industrial Real Estate Association ("AIR"),or for such other price and terms agreeable to Owner; (b) ❑ A lease or other tenancy for the following rent and terms: and other additional standard terms reasonably similar to those contained in the appropriate AIR lease form or for such other rent and terms agreeable to Owner. 2. EXCLUSIVE EMPLOYMENT AND RIGHTS. 2.1 Owner hereby employs Agent as Owner's sole and exclusive agent to represent Owner in the Transaction and to find buyers or lessees/tenants ("lessees"),as the case may be,for the Property.Agent shall use reasonably diligent efforts to find such buyers or lessees. All negotiations and discussions for a Transaction shall be conducted by Agent on behalf of Owner. Owner shall promptly disclose and refer to Agent all written or oral inquiries or contacts received by Owner from any source regarding a possible Transaction. 2,2 Owner authorizes Agent to: (a) Place advertising signs on the Property; (b) Place a lock box on the Property if vacant; (c) Accept deposits from potential buyers or lessees;and (d) Distribute information regarding the Property to participants in THE MULTIPLE ("MULTIPLE") of the AIR and/or any other appropriate local commercial multiple listing service,to other brokers,and to potential buyers or lessees of the Property. Owner shall identify as"confidential"any information provided to Agent that Owner considers confidential and does not want disclosed. All other information provided by Owner may be disclosed as Agent may deem appropriate or necessary. After consummation of a Transaction,Agent may publicize the terms of such Transaction. 2.3 Agent shall comply with the Rules of Professional Conduct of the AIR, if a member or if not, the Rules of Professional Conduct of the Society of Industrial and Office Realtors,and shall submit the Property to the MULTIPLE. Agent shall cooperate with participants in the MULTIPLE and may,at Agent's election, cooperate with other real estate brokers (collectively "Cooperating Broker"). A Cooperating Broker may, as a third-party beneficiary hereof, enforce the terms of this Agreement against Owner or Agent. 2.4 If the Transaction is a sale and Agent finds a prospective buyer for the Property, or if the Transaction is a lease and Agent finds a prospective lessee for the Property, Owner hereby authorizes Agent also to represent and act as the agent for such buyer or lessee, and Owner consents to such dual agency. If a Cooperating Broker finds such a buyer or lessee,then Agent shall act as agent for Owner only,the Cooperating Broker shall act as agent for the buyer or lessee only, and the Cooperating Broker shall not be Owner's agent, even though the Cooperating Broker may share in the commission paid by Owner to Agent. A Cooperating Broker shall not be an agent or subagent of Owner or Agent. 2.5 Owner agrees that Agent may, during the ordinary and normal course of marketing the Property, respond to inquiries on the Property by showing and providing information on the Property,as well as on other competing properties,to prospective buyers and lessees and that such activities may result in the payment of a commission to Agent by a third party. 3. PROPERTY. 3.1 The term"Property"shall include all of the following which are currently located on the Property and owned by Owner: permanent improvements, electrical distribution systems (power panels, buss ducting, conduits, disconnects, lighting fixtures, etc.), telephone distribution systems (lines, jacks and connections), space heaters, air conditioning equipment,air tines,carpets,window coverings,wall coverings, partitions,doors, suspended ceilings, built-ins such as cabinets,and (if there are no additional items write"NONE"). If the Transaction is a sale, the term "Property"shall additionally include, to the extent owned by Owner, oil and mineral rights,leases and other agreements which will continue in effect after Owner's transfer of title to the Property. 3.2 Within five business days after the commencement of the Term hereof,Owner shall provide Agent with the following: (a) A duly completed and fully executed Property Information Sheet on the most current form published by the AIR; (b) Copies of all leases,subleases, rental agreements,option rights, rights of first refusal, rights of first offer,or other documents containing any nAl Initials Initials ©1997-American Industrial Real Estate Association Page 1 of 3 FORM OA-1-6/97E REVISED other limitations on Owner's right,ability and car to consummate a Transaction,and (c) If available to Owner, copies of building plans, and if the Transaction is a sale, title reports, boundary surveys, and existing notes and trust deeds which will continue to affect the Property after consummation of a sale. 3.3 Agent shall have no responsibility for maintenance, repair, replacement, operation, or security of the Property, all of which shall be Owner's sole responsibility. Unless caused by Agent's gross negligence,Agent shall not be liable for any loss,damage,or injury to the person or property of Owner,any lessees of the Property, any buyer, prospective buyer, lessee, or prospective lessee, including, but not limited to, those which may occur as a result of Agent's use of a lock box. 4. EXTENSION OF TERM. If the Transaction is a sale, and a sale is not consummated for any reason after Owner accepts an offer to purchase the Property("Sale Agreement"),then the expiration date of the Term of this Agreement shall be extended by the number of days that elapsed between the date Owner entered into the Sale Agreement and the later of the date on which the Sale Agreement is terminated or the date Owner is able to convey title to a new buyer free and clear of any claims by the prior buyer of the Property;provided,however,in no event shall the Term be so extended beyond one year from the date the Term would have otherwise expired. 5. COMMISSION. 5.1 Owner shall pay Agent a commission ❑ in the amount of 0 in accordance with the commission schedule attached hereto("Agreed Commission"),for a Transaction,whether such Transaction is consummated as a result of the efforts of Agent,Owner,or some other person or entity. Such Agreed Commission is payable: (a) If the Transaction is a sale, (1)a buyer is procured who is ready, willing and able to buy the Property at the price and on the terms stated herein,or on any other price and terms agreeable to Owner; (11)Owner breaches or repudiates any Sale Agreement,escrow instructions or other documents executed by Owner regarding the sale of the Property; (III) the Property or any Interest therein is voluntarily or involuntarily sold, conveyed, contributed or transferred; (iv)the Property or any interest therein is taken under the power of Eminent Domain or sold under threat of condemnation, or(v) if Owner is a partnership,joint venture, limited liability company, corporation, trust or other entity, and any interest in Owner is voluntarily or involuntarily sold,contributed, conveyed or transferred to another person or entity that,as of the date hereof,does not have any ownership interest in Owner; (b) If the Transaction is a lease, (i)a lease of the Property,or a portion thereof is executed; or(ii)a lessee is procured who is ready,willing and able to lease the Property on the terms stated herein,or on any other rent and/or terms agreeable to Owner;or (c) If Owner(i)removes or withdraws the Property from a Transaction or the market;(ii)acts as if the Property is not available for a Transaction; (iii) treats the Property as not available for a Transaction; (iv) breaches, terminates, cancels or repudiates this Agreement; (v) renders the Property unmarketable;or(vi)changes the status of the Property's title,leases,agreements,physical condition or other aspects thereof,which such change adversely impacts the value;use,desirability or marketability of the Property. 5.2 If the Transaction is a sale, the purchase agreement and/or escrow instructions to be entered into by and between Owner and a buyer of the Property shall provide that: (a) Owner irrevocably instructs the escrow holder to pay from Owner's proceeds accruing to the account of Owner at the close of escrow the Agreed Commission to Agent; (b) A contingency to the consummation of the sale shall be the payment of the Agreed Commission to Agent at or prior to close of the escrow; and (c) No change shall be made by Owner or buyer with respect to the time of,amount of,or the conditions to payment of the Agreed Commission, without Agent's written consent. 6. ALTERNATIVE TRANSACTION. If the Transaction changes to any other transaction,including,but not limited to,a sale,exchange,option to buy,right of first refusal,ground lease, lease,sublease or assignment of lease(collectively"Alternative Transaction"),then Agent shall automatically be Owner's sole and exclusive Agent for such Alternative Transaction and represent Owner in such Alternative Transaction,under the terms and conditions of this Agreement. If,during the Term hereof,an Alternative Transaction is entered into,then Owner shall pay Agent the Agreed Commission. 7. EXCLUDED AND REGISTERED PERSONS. 7.1 Owner shall,within five business days after the date hereof, provide Agent, in writing,with the names of those persons or entities registered with Owner by any other broker under any prior agreement concerning the Property("Excluded Persons",see paragraph 7.5). Owner shall also specify for each Excluded Person the type of transaction the consummation of which during the Term of this Agreement entitles such other broker to any compensation ("Excluded Transaction"). If Owner timely provides Agent with the names of the Excluded Persons and specifies the Excluded Transaction for each Excluded Person,then the Agreed Commission paid to Agent with respect to consummation of such an Excluded Transaction with an Excluded Person shall be limited as follows: if such Excluded Transaction is concluded within the first thirty days of the commencement of the Term hereof,then Agent shall be paid a commission equal to the reasonable out-of-pocket expenses incurred by Agent in the marketing of the Property during said thirty days;or if such Excluded Transaction is concluded during the remainder of the Term hereof,then Agent shall be entitled to a commission equal to one-half of the Agreed Commission. If the specified information concerning Excluded Persons and Transactions is not provided as set forth herein,then it shall be conclusively deemed that there are no Excluded Persons. 7.2 Agent shall,within five business days after the expiration of the Term hereof,provide Owner,in writing,with the name of those persons or entities with whom Agent either directly or through another broker had negotiated during the Term hereof("Registered Persons",see paragraph 7.5), and specify the type of transaction of the Property for which such negotiations were conducted ("Registered Transaction"). Those persons or entities who submitted written offers or letters of intent shall, however,automatically be deemed to be Registered Persons for the type of transaction which was the subject of such offer or letter of Intent. If Agent fails to timely notify Owner of the existence of any other Registered Persons,then it shall be conclusively deemed that there are no other Registered Persons. A person or entity shall not be a Registered Person if Agent fails to timely specify a Registered Transaction for such person or entity. If Agent wishes to register the client of a Cooperating Broker,Agent must obtain and submit to Owner written approval of such registration signed by such Cooperating Broker. The parties are aware that the registration of certain individuals and/or entities might create a Dual Agency,and Owner hereby consents to any such Dual Agency. 7.3 If,within one hundred eighty days after the expiration of the Term hereof,Owner enters Into a contract with a Registered Person for consummation of a Registered Transaction, then Owner shall, upon consummation of such Registered Transaction, pay Agent the Agreed Commission for the Registered Transaction. 7.4 If, within one hundred eighty days after the expiration of the Term hereof, Owner enters into another owner-agency or listing agreement with a broker other than Agent for any transaction concerning the Property, then Owner shall provide to Owner's new broker the names of the Registered Persons and the Registered Transaction for each Registered Person,and provide in such new agreement that the new broker shall not be entitled to receive any of the compensation payable to Agent hereunder for consummation of a Registered Transaction with a Registered Person. 7.5 In order to qualify to be an Excluded Person or a Registered Person the individual or entity must have:toured the Property,submitted a letter of interest or intent,and/or made an offer to buy or lease the Property. In addition, Excluded Persons may only be registered by a broker who previously had a valid listing agreement covering the Property,and such broker may only register individuals and entities actually procured by such listing broker. 8. OWNER'S REPRESENTATIONS. 8.1 Owner represents and warrants that: (a) Each person executing this Agreement on behalf of Owner has the full right,power and authority to execute this Agreement as or on behalf of Owner; (b) Owner owns the Property and/or has the full right, power and authority to execute this Agreement and to consummate a Transaction as provided herein,and to perform Owner's obligations hereunder; (c) Neither Owner nor the Property is the subject of a bankruptcy,insolvency,probate or conservatorship proceeding; (d) Owner has no notice or knowledge that any lessee or sublessee of the Property, if any, is the subject of a bankruptcy or insolvency proceeding; (e) There are no effective, valid or enforceable option rights, rights of first refusal, rights of first offer or any other restrictions, impediments or limitations on Owner's right, ability and capacity to consummate a Transaction, except as disclosed in writing pursuant to Paragraph 3.2(b) or on the Property/nformet/on Sheet(P/S). 9. OWNER'S ACKNOWLEDGMENTS. Owner acknowledges that it has been advised by Agent to consult and retain experts to advise and represent it concerning the legal and tax effects of this Agreement and consummation of a Transaction or Alternative Transaction,as well as the condition and/or legality of the Property, including, but not limited to, the Property's improvements, equipment,soil, tenancies,title and environmental aspects. Agent shall have no obligation to investigate any such matters unless expressly otherwise agreed to in writing by Owner and Agent. Owner further acknowledges that in determining the financial soundness of any prospective buyer, lessee or security offered, Owner will rely solely upon Owner's own investigation, Initials Initials ©1997-American Industrial Real Estate Association Page 2 of 3 FORM OA-1-6/97E REVISED notwithstanding Agent's assistance in gathering information. 10. MISCELLANEOUS. 10.1 This Agreement shall not be construed either for or against Owner or Agent,but shall be interpreted,construed and enforced in accordance with the mutual intent of the parties ascertainable from the language of this Agreement. 10.2 All payments by Owner to Agent shall be made in lawful United States currency. If Owner fails to pay to Agent any amount when due under this Agreement,then such amount shall bear interest at the rate of 15%per annum or the maximum rate allowed by law,whichever is less. arses of the PmpeFty, 9F any Gf them, adsing undeF or Felati;;g te this AgFeement eF the PFepeFty, the pFeyalling paFty shall be paid Its aWFney's feer.and Gests by the IesiR@ paFty. The t9FFn,"PFeya.linq PaFty"shall*AG'ude,witheut limitatien,one vAe substantially obtains OF&08A116 the MliefSgUght,ar,the rase Fnay be,Wh6th6F by G.GFAPFQFAi68,settlement,judgment,eF the-R-b:;nd-Q-AMeRt by the ether paFty Of itS Gla!F;;GF d-A-fA--A-RA-. The attGFReys fees award shall not be 10.4 Owner agrees to indemnify,defend(with counsel reasonably acceptable to Agent),and hold Agent harmless from and against any claim or liability asserted against Agent as a result of the failure of Owner to make a full and complete disclosure pursuant to law and paragraph 3.2(a)or as a result of the fact that any of the representations made by Owner(see paragraph 8)were not true at the time that this Agreement was signed. 10.5 Owner hereby releases and relieves Agent, and waives Owner's entire right of recovery against Agent,for direct or consequential loss or damage arising out of or incident to the perils covered by insurance carried by Owner,whether or not due to the negligence of Agent. 10.6 In the event that the Transaction is not an outright sale, Owner agrees that if Agent is not paid the Agreed Commission provided for herein within thirty days of the date due,that Agent shall have a lien in the amount of such commission,and may record a notice of such lien,against the Property. CLIA1 1 RC LICI Il IA'THE CQI IAITV WHERE T4C PROPF-DTV 12 1 OCATED INGLIJI)ED IN' THr= "ARRITRATIGNI OF DIRRIT-r-92 PROVISION IF V011 REWIRE TO 8110MIT TO ARRITRATIGNI AFTER AQRGEING TO THIS gNrner's Initials Agent's'Aitials 41.4 THE PROVISIONS OF THE Al3QV9 ARIBIT-RAT.10-NI Gl-A.I-ISE R-H.A.1-1- NOT -RF-= -BINDING GN F=ITHER PARTY I-INII=F=88 13OT-H PARTIES HAVE QI AG90 T-H9IR 1NITIAI Q I I1SIDER QARA.GRAPH I 9 12. Additional Provisions:Additional provisions of this Agreement are set forth in the following blank lines or in an addendum attached hereto and made a part hereof consisting of paragraphs 13 through 13 (if there are no additional provisions write"NONE"): 13. Owner hereby authorizes Agent to notify all multiple listing services as to changes In listing expiration data, asking rental or sales prices,or any other changes In terms or availability agreed to by Owner and communicated orally or In writing to Agent. "OWNER" "AGENT" Redevelopment Agency Lee & Associates - Newport Beach, Inc. of the City of Huntington Beach By: By: Lt��� Name Prin ed: j Title: /T By: Date: Date: ICYC� y APPROVED AS TO FORM 197�PLMU,SL Attmw `� NOTICE: These forms are often modified to meet changing requirements of law and Industry needs. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association, 700 So. Flower St.,Ste 600, Los Angeles, CA 90017. Telephone No. (213)687-8777. Fax No.:(213)687-8616. 5TALDER/CI1Y OF HB-OWNER AGENCY Initials Initials ©1997-American Industrial Real Estate Association Page 3 of 3 FORM OA-1-6/97E REVISED Lee L COMMERCIAL REAL ESTATE SERVICES SCHEDULE OF COMMISSIONS A.SALES, EXCHANGES,AND OTHER TRANSFERS 1. Unimproved Property (substantially lacking amenities necessary for urban development, such as roads, utilities or zoning): 6% of the gross sales price. 2. Improved Property: 6%of the gross sales price. 3. Exchange: Each party to the exchange shall pay a full sales commission based on the type of property in accordance with this Schedule. 4. Joint Venture: If a joint venture is effected in lieu of a sale, a full sales commission shall be paid on the basis of the value of the property as determined for purposes of the joint venture agreement and the percentage interest thereof which is being conveyed to the joint venture or the joint venturers. 5. Business Opportunity: 10%of the gross sales price. B. LEASES GROSS LEASE NET LEASE (in which tenant pays all real property taxes) 7%of the rent for the first year; 7%of the rent for the first year; 6%of the rent for the second year; 7%of the rent for the second year; 5%of the rent for the third year; 6%of the rent for the third year; 4%of the rent for the fourth year; 5%of the rent for the fourth year; 4%of the rent for the fifth year; 5%of the rent for the fifth year; 3%of the rent for the next five years; 4%of the rent for the next five years; 2%of the rent for the balance of the term 3%of the rent for the balance of the term 1. Term of More Than 30 Years: Including Ground Leases, if the initial lease term is in excess of 30 years, then the commission shall be calculated only upon the rental to be paid during the first 30 years of the term of the lease. 2. Sublease or Assignment: 6%of the rent payable under the assignment or subleasing of a gross lease during the balance of the term,or 7% in the case of a net lease. If a cash bonus or lump sum is paid by the successor tenant, a sales commission shall also be paid in accordance with this Schedule. 3. Month-to-Month Tenancy: The commission shall be 50% of the first month's rent but in no event less than $400. In the event a month-to-month tenant subsequently executes a lease, either direct with Owner or through Broker,within 24 months from the date of occupancy of the month-to-month tenant,then Broker shall receive a leasing commission in accordance with the provisions of this Schedule. 4. Extension of Lease or Additional Space Taken: Should the term of the lease be extended or the tenant occupy additional space, then a leasing commission shall be paid when said term is extended or said additional space is occupied.The leasing commission shall be computed in accordance with the provisions of this Schedule and by using the rates applicable as if the initial term of the lease had included said extension period or the premises initially demised had included said additional space. 5. Purchase of Property by Tenant: Should tenant, his successors, or assignees purchase the subject property during the term of the lease or any extension thereof or within 180 days after expiration thereof, then a sales commission shall be paid when the purchase is effected. Said sales commission shall be computed in accordance with the provisions of this Schedule, less the amount of paid lease commissions related to that portion of the lease term extending beyond the effective date of said purchase. C. PAYMENT OF EARNED COMMISSIONS 1. Commissions shall be paid through escrow upon the closing of sales and exchange transactions; absent an escrow; commissions shall be paid upon recordation of a deed or upon delivery of such deed or other conveyance if recordation is deferred more than one month thereafter. In the event of a contract or agreement of sales,joint venture agreement, business opportunity or other transaction not involving the delivery of a deed,commissions shall be paid upon execution and delivery of the instrument of conveyance or establishment of the entitlement of ownership. 2. Leasing and subleasing commissions shall be paid upon execution and delivery of a lease by Owner and tenant. 3. Broker is hereby authorized to deduct its commission pursuant to this Schedule from funds held in its trust account; Owner shall promptly pay any difference in cash in accordance herewith. D.MISCELLANEOUS 1. If Owner fails to make any payment at the time required herein, the delinquent sum(s) shall bear interest at the maximum rate permitted by law or 15%,whichever is less. 2.This Schedule and the Agreement to which it is attached are binding on Broker only when executed by both parties without modification of the printed terms; provided that any such unauthorized modifications will be enforceable by Broker at its option, provided further that any officer of Broker is authorized to modify such terms by executing such Agreement or by initialing such modifications. - --3: This Schedule.shall be used only for transactions in which Lee-&Associates—Newport Beach, Inc. is involved-and-shall not-be distributed to- any other party. The undersigned hereby acknowledges receipt of a copy of this schedule and agrees to pay a commission(s)as provided herein. Dated: 7- /7-/ Dated OWNER/LESSOR OR SUBLESSOR: BROKER:Lee&Associates—Newport Beach,Inc. -Redevelopment Age nc of the Cityyof H ntington Beach ,�L By: C By: C�t/V'a mwv-,) " Address: 2000 Main Street Address: 3991 MacArthur Blvd.,Suite 100 Huntington Beach,CA 92648 Newport Beach,CA 92660 Telephone (�714)536-5445 Telephone (949)724-1000 APPROVED ASTITF JKIV. FPER Ma nlll,City Attorney kk By Leonia m.1V ll '24�Ab CSF:ILEE-DATAIStalderlAGREEMEMSchedule of Commissions-City ofHB.doc Deputy City Attorney AMSCAN INDUSTRIAL REAL ESTA?.- ASSOCIATION PROPERTY INFORMATION SHEET (Non-Residential) PREFACE: Purpose: This Statement is NOT a warranty as to the actual condition of the Property/Premises. The purpose is, instead, to provide the brokers and the potential buyer/lessee with important information about the Property/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose. Actual Knowledge: For purposes of this Statement the phrase'actual knowledge'means:the awareness of a fact,or the awareness of sufficient information and circumstances so as to cause one to believe that a certain situation or condition probably exists. TO WHOM IT MAY CONCERN: Redevelopment Agency of the City of Huntington Beach ("Owner'-), owns the Property/Premises commonly known by the street address of 214 Fifth Street located in the City of Huntington Beach County of, Orange State of California and generally described as(describe briefly the nature of the premises or property)a vacant parcel of land of approximately 5,300 square feet (herein after"Property"),and certifies that: 1. Material Physical Defects. Owner has no actual knowledge of any material physical defects in the Property or any improvements and structures thereon,including,but not limited to the roof,except(if there are no exceptions write"NONE"y None 2. Equipment. A. Owner has no actual knowledge that the heating,ventilating,air conditioning,plumbing,loading doors,electrical and lighting systems,life safety systems, security systems and mechanical equipment existing on the Property as of the date hereof, if any, are not in good operating order and condition, except(if there are no exceptions write"NONE"): None B. Owner has no actual knowledge of any leases, financing agreements, liens or other agreements affecting any equipment which is being included with the Property,except(if there are no exceptions write"NONE'-): None 3. Soil Conditions. Owner has no actual knowledge that the Property has any slipping, sliding, settling, flooding, ponding or any other grading, drainage or soil problems,except(if there are no exceptions write"NONE"y None 4. Utilities. Owner represents and warrants that the Property is served by the following utilities(check the appropriate boxes)❑ public sewer system and the cost of installation thereof has been fully paid❑private septic system,❑electricity,❑natural gas, ❑domestic water,❑telephone,and❑other: Vacant parcel - all utilities available in the adjacent public right of way 5. Natural Hazard Zone. Owner has no actual knowledge that the Property is located within a delineated flood, earthquake, or other natural hazard zone,except(if there are no exceptions write"NONE"): earthquake Zone 6. Compliance With Laws. Owner has no actual knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations,codes,or covenants,conditions or restrictions,or of improvements or alterations made to the Property without a permit where one was required, or of any unfulfilled order or directive of any applicable government agency or of any casualty insurance company that any work of investigation, remediation, repair,maintenance or improvement is to be performed on the Property,except(if there are no exceptions write"NONE"): None 7. Hazardous Substances. A. Owner has no actual knowledge of the Property ever having been used as a waste dump,of the past or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCB's or any hazardous, toxic or Infectious substance whose nature and/or quantity of existence,use,manufacture or effect,render it subject to Federal,state or local regulation,investigation, remediation or removal as potentially injurious to public health or welfare,except(if there are no exceptions write"NONE"): None B. Owner represents and warrants that it is not currently, and never has been engaged in the business of hauling waste, and never stored hazardous substances on the Property,except(if there are no exceptions write"NONE"): None Page 1 of 2 ©2000-American Industrial Real Estate Association REVISED FORM PI-3-8/OOE 8. Fire Damage, Owner has no actual knowle )f any structure on the Property having suffered rr it fire damage, except(if there are no exceptions write"NONE"): None 9. Actions, Suits or Proceedings. Owner has no actual knowledge that any actions, suits or proceedings are pending or threatened before any court, arbitration tribunal,governmental department, commission,board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey,occupy or utilize the Property,except(if there are no exceptions write"NONE"): None 10. Governmental Proceedings. Owner has no actual knowledge of any existing or contemplated condemnation, environmental, zoning, redevelopment agency plan or other land use regulation proceedings which could detrimentally affect the value, use and operation of the Property,except(if there are no exceptions write"NONE" None 11. Unrecorded Title Matters. Owner has no actual knowledge of any encumbrances,covenants,conditions, restrictions,easements,licenses, liens, charges or other matters which affect the title of the Property that are not recorded in the official records of the county recorder where the Property is located, except(if there are no exceptions write"NONE'): NnnP Pxre t the propertW wi 11 hP Gol d wi th RPdPVPI inmPnt conditions, covenants, and restrictions 12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecting the Property, except (if there are no exceptions write"NONE"): None 13. Options. Owner has no actual knowledge of any options to purchase,rights of first refusal, rights of first offer or other similar agreements affecting the Property,except(if there are no exceptions write"NONE"): None 14. Other. (It will be presumed that there are no additional items which warrant disclosure unless they are set forth herein): The statements herein will be relied upon by brokers,buyers,lessees,lenders and others. Therefore,Owner and/or the Owner's Property Manager has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modifications are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent investigation of the Property. Owner agrees to promptly notify, in writing,all appropriate parties of any material changes which may occur In the statements contained herein from the date this statement is signed until title to the Property is transferred,or the lease is executed. Date: 20& "OWNER" Fill in date of execution) Redevelopment Agency of the City of Huntington Beach By: Name rinted: 0AV1.4 / Title: ®K�V ,r��'�Gll>`L./}° �l rec?$Y- Buyer/lessee hereby acknowledges receipt of a copy of this Propery Information Sheet on By: Name Printed: Title: RO ED AS TO FORM MOG TH,City Attorney Depitsty Cis NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form:American Industrial Real Estate Association,700 South Flower Street,Suite 600, Los Angeles, CA 90017,Telephone No.:(213)687-8777 Fax No.:(213)687-8616. 5TALDER/CITY OF HB-PROPERTY INFO Page 2 of 2 ©2000-American Industrial Real Estate Association REVISED FORM PI-3-8/OOE .r. AMPAC Commercial Inc Charles Dunn Company Inc Daum Commercial Real Estate Svcs 8071 Slater Ave#100 18101 Von Karman Ave#100 4675 MacArthur Court#220 Huntington Beach CA 92647 Irvine CA 92612 Newport Beach CA 92660 Attn:David Cornell Attn:Lawrence Scher Attn:Steven M.Pearson Julian J.Studley Inc Sperry Van Ness CB Richard Ellis 10960 Wilshire Blvd#1500 18881 Von Karman#800 2125 E.Katella Ave#100 Los Angeles CA 90024 Irvine CA 92612 Anaheim CA 92806-5938 Attn:Bruce Schuman Attn:Reza Etedali Attn:Steven Case CB Richard Ellis Trammell Crow Co Voit Commercial Brokerage 3501 Jamboree Rd#100 3 Park Plaza#1600 3500 W Orangewood Ave Newport Beach CA 92660 Irvine CA 92614 Orange CA 92868 Attn: Sherry Bower Attn:Robert Ruth Attn:John Owen Grubb&Ellis Co Voit Commercial Brokerage Cushman&Wakefield of California Inc 4695 MacArthur Court#600 18500 Von Karman Ave#150 1920 Main St#600 Newport Beach CA 92660 Irvine CA 92612 Irvine CA 92614-7224 Attn:Bob Osbrink Attn:John D.Pierce Attn;Chuck Hurt Perry Van Ness Marcus&Millichap Real Estate Investment 18881 Von Karman Ave#800 Brokerage Co Irvine CA 92612 19800 MacArthur Blvd#150 Attn:Larry Thompson Irvine CA 92612-2420 Attn: John Przybyla Lee&Associates Colliers Seeley Colliers Seeley 3991 MacArthur Blvd#100 2400 E Katella Ave#950 1 Park Plaza#100 Newport Beach CA 92660 Anaheim CA 92806-5964 Irvine CA 92614-5910 Attn:Steve Jehorek Attn:Clyde Stauff Attn:Tim Joyce The Saywitz Co Professional Real Estate Services Inc Lee&Associates 4740 Von Karman Ave#100 1201 Dove St#100 701 S.Parker St#1000 Newport Beach CA 92660 Newport Beach CA 92660 Orange CA 92868 Attn:Barry Saywitz Attn:Bradley W. Schroth Attn:Chuck Noble Providence Realty Group Inc Grubb&Ellis Co Lee&Associates 30131 Town Center Dr#242 500 N. State College Blvd#100 15615 Alton Parkway#150 Laguna Niguel CA 92677 Orange CA 92868 Irvine CA 92618-3307 Attn: Lindall A. Stinson Attn:Kurt Strasmann Attn:Bart Pitzer Julien J. Studley Inc Ashwill Associates Inc Collins Commerical Corp 2 Park Plaza#1075 2029 W Orangewood Ave 2391 Morse Ave Irvine CA 92614 Orange CA 92868 Irvine CA 92614 Attn:Royce Sharf Attn:Dave Cox Attn:Michael Collins Daum Commercial Real Estate Service Medical Realty Advisors Prudential RB Allen Commercial Real 2300 E Katella Ave#100 4675 MacArthur Court#470 Estate Services Anaheim CA 92806 Newport Beach CA 92660 1851 E first St#900 Attn:Russell Johnson Attn:Garth E.Hogan Santa Ana CA 92705 Attn:Rex B.Allen Council/Agency Meeting Held: Deferred/Continued to: XAp roved ❑ ConditionalI A proved ❑ Denied .be U7y City CIA's nature Council Meeting Date: December 15, 2003 Department ID Number: ED 03-33 / OMAJ TC V%.S-rPoNE Ec/S/O.v - A414AZ i-µ CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT ?BEN Y ACTION /'�onorJ To /as R�du.c�r��t P�oAosAic�eR 4 -Esr»y�- t/cita!>rso.J daj*o i SS/O4 7o so" A"Awory.K Jee v 44 Am-UB9.6 . .4944ta 6 _ SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS w SUBMITTED BY: CATHY GREEN, Redevelopment Agency Chairperson on behR o o -< the Economic Development Committee �-<r PREPARED BY: DAVID C. BIGGS, Deputy Executive Director9W , = " N =" SUBJECT: Authorize the Proposed Sale of 214 Fifth Street cr Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The Redevelopment Agency owns a parcel of property at 214 Fifth Street. Should the parcel be offered for sale in order to facilitate its development? Funding Source: N/A Recommended Action: Motion to: Authorize the marketing of the property at 214 Fifth Street for sale on a limited basis to entities which would be owner/occupants of the ground floor retail space after development of the property. 111A&, , A issot— Alternative Action(s): 1. Continue to hold the property for sale after the completion of the Strand project; or 2. Authorize the marketing of the property for sale on a different basis. Analysis: When the Redevelopment Agency/City Council last reviewed the list of possible surplus properties, the policy direction provided in regard to the parcel at 214 Fifth Street was to hold it for sale until after the Strand project had been completed in order to maximize the value of the parcel. A map of the parcel is attached. The Redevelopment Agency was recently approached by the purchaser of the Shed Restaurant who expressed an interest in acquiring the Agency-owned parcel at 214 Fifth Street in order to develop it as a mixed-use building with a ground floor restaurant and residential units above to compliment the remodel of the Shed into a retail project. On October 13, 2003, this proposal was discussed at the Council's Economic Development Committee meeting. \ I REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: December 15, 2003 DEPARTMENT ID NUMBER: ED 03-33 An illustrative rendering and site plan of the proposal shared with the Economic Development Committee is attached. The EDC requested that staff do some additional research on the issues associated with the parcel and the range of options to facilitate its sale if that was the policy direction deemed desirable. On November 18, 2003, the EDC met again and reviewed the information provided by staff. One issue associated with the development of the parcel is the need to dis-encumber the parcel from 11 parking spaces designated for the site as part of the Downtown Parking Master Plan. A strategy has been developed to address this as outlined in the attached memorandum from the Economic Development Director to the Planning Director dated October 23, 2003. A second memorandum dated November 17, 2003, was reviewed with the EDC that outlined optional approaches for the sale of the property if that were the policy direction pursued. Following discussion, the Council Economic Development Committee voted to recommend the Redevelopment Agency approve the recommended action outlined in this Request for Redevelopment Agency Action. Mayor Green and Councilmember Sullivan were in attendance and supported this motion. If the Redevelopment Agency approves the recommended action, staff will solicit and have an appraisal made of the parcel. Following the receipt of the appraisal, the property will be marketed by staff to the highest bidder who proposes to develop the property as an owner/occupant for the ground floor space. The solicitation of bids for the property will specify that the Redevelopment Agency reserves the right to accept the bid from the best- qualified and/or highest bidder or reject all offers. This.more flexible ability to accept or reject all bids is due to this being a Redevelopment Agency owned parcel, as such the parcel will not be sold through the more restrictive City surplus property procedures. Environmental Status: N/A Attachment(s): NumberCity Clerk's Page • Description 1. Parcel Map. 2. Illustrative Rendering & Site Plan. 3. Memorandum dated October 23, 2003. 4. Memorandum dated November 17, 2003. 5. 1 EDC Meeting Notes of November 19, 2003. RCA Author: D. Biggs, ext. 5909 G:\David\RCAS\214fifth.doc -2- 11/25/2003 3:39 PM (6) December 15, 2003 -Co.—ocil/Agency Agenda - Page 6 C-1. Council Committee/Council Liaison Reports C-1a. (City Council) Approve City Council Liaison Appointments for Citizen Boards, Commissions, Committees, and Task Forces for the Year 2004 ( . ) Communication from Mayor Cathy Green transmitting the listing of Council Liaison and Council Committee Member assignments titled City of Huntington Beach Citizen Boards, Commissions, Committees, and Task Forces (Citizen Members Appointed to Four Year Terms). Recommended Action: Motion to: Approve the listing of Council Liaison and Committee assignments as designated in the attached list titled 2004 City of Huntington Beach Citizen Boards, Commissions, Committees, and Task Forces (Citizen Members Appointed to Four Year Terms). Continued to January 5, 2004 6-0-1 (Houchen out of room) C-1 b. (Redevelopment Agency) Authorize the Proposed Sale of Surplus Property (Parcel at 214 Fifth Street -Ground Floor Retail Space— The Strand Project) (bjo Mayor Cathy Green on behalf of the Economic Development Committee transmitted the following Statement of Issue: The Redevelopment Agency owns a parcel of property at 214 Fifth Street. Should the parcel be offered for sale in order to facilitate its development? Recommended Action: Motion to: Authorize the marketing of property at 214 Fifth Street for sale on a limited basis to entities which would be owner/occupants of the ground floor retail space after development of the property. Motion to postpone decision Failed 3-4(Hardy, Boardman, Cook, Houchen - No) Motion to: Issue a Request for Proposals for a real estate broker solicitation and also negotiate the commission to sell the property as soon as possible. Passed 6-1 (Green-No) C-2. City Administrator's Report C-3. City Treasurer's Report C-3a. (City Council) Review and Accept Shari Freidenrich, City Treasurer's October 2003 Report Titled City of Huntington Beach Summary of City Investment Portfolio, Bond Proceeds, and Deferred Compensation Activity (310.20) Communication from City Treasurer Shari Freidenrich transmitting the Monthly Investment Report for October 2003. Recommended Action: Motion to: Review and accept the monthly report. Following review of the report, by motion of Council, accept the Monthly Investment Report Summary of Investment Portfolio, Bond Proceeds, and Deferred Compensation Activity for October 2003, pursuant to Section 17.0 of the Investment Policy of the City of Huntington Beach. 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I� —+� R--.--�%r � _./.' �>.�.�..^«apt, �6� _�: I ,K�. .� 1�_ a m. �T Ig IROM2AA-f 0 Memo dated 10/23/03 ATTACHM ENT #3 CITY OF HUNTINGTON BEACH Z-1� InterOffice Communication Economic Development Department TO: Howard Zelefsky, Director of Planning � a FROM: David C. Biggs, Director of Economic Development y ,f0 DATE: October 23, 2003 SUBJECT: PARKING ENCUMBRANCE ON 214 FIFTH STREET The Redevelopment Agency owns a vacant parcel at 214 Fifth Street which was encumbered by 11 parking spaces as part of the temporary parking plan for the Ocean View Promenade project. While these 11 spaces were not ever constructed, they were listed as part of the parking inventory in the Downtown Parking Master Plan. The approval of the Conditional Use Permit for the proposed Strand project on Blocks 104/105 provides the permanent parking for the Ocean View Promenade project. As such, the 11 spaces designated on 214 Fifth Street are no longer needed to meet any requirements related to Ocean View Promenade. However, we have recently been exploring the possible sale of this parcel. This includes a review of a potential project on the site at the Council's Economic Development Committee meeting on October 13, 2003. We now understand that while these 11 spaces are no longer required to meet any obligations associated with Ocean View Promenade, they are still shown as part of the general inventory of spaces in the most recent annual update of the Downtown Parking Master Plan. As such, these 11 spaces represent a continuing encumbrance on the Redevelopment Agency's parcel. Part of the direction provided at the Council's Economic Development Committee meeting on October 13`h, was for staff to identify a means by which this encumbrance could be removed in order to effectuate the eventual sale of this parcel. In order to remove this encumbrance, it is proposed that the next annual update of the Downtown Parking Master Plan show no parking spaces on 214 Fifth Street. This would necessitate 11 alternative spaces being identified in order to keep the Downtown Parking Master Plan in balance. It is proposed that 11 of the anticipated 100 additional parking spaces being constructed by the Redevelopment Agency as part of the Strand project be designated as the replacement spaces. Initially, all of the additional spaces in the Strand project were anticipated to be in-lieu parking spaces. Of the estimated $1.5 million in cost for these additional spaces, $500,000 is being funded with accumulated parking in-lieu space fees, with the remaining $1,000,000 being funded by the Redevelopment Agency. As such, since the Redevelopment Agency is funding 2/3rds of the cost of these additional spaces, it is equitable that 11 out of the anticipated 100 spaces be used to disencumber the Redevelopment Agency owned parcel from the 11 space parking encumbrance. This will assist the Redevelopment Agency in eventually obtaining the highest possible sales price for its parcel. This will also still provide for a net of 89 spaces to be counted towards the number being provided under the parking in-lieu fee program. Should this suggested approach be agreeable, please ensure that the next annual update of the Downtown Parking Master Plan incorporates these changes. DCB xc: Ray Silver, City Administrator Herb Fauland, Principal Planner Gus Duran, Housing & Redevelopment Manager Memo dated 11/17/03 ATTACH M.-ENT #4 CITY OF HUNTINGTON BEACH Interoffice Communication Economic Development Department TO: Council Economic Development Committee ,�,� VIA: Ray Silver, City Administrator FROM: David Biggs, Economic Development Director COPr✓pfi✓ DATE: November 17, 2003 SUBJECT: Sale Options for Redevelopment Agency-Owned Properties The Redevelopment Agency was approached recently by a party interested in acquiring the Agency-owned property at 214 Fifth Street. At the October Council Economic Development Committee meeting, staff was asked to outline what processes are available to effectuate a sale if that is the policy direction the Council wishes to take. Background Redevelopment Agencies typically acquire property to effectuate either a development project or a capital improvement project. Many property acquisitions by Redevelopment Agencies are part of a site assembly effort. In these instances, the Agency is actively seeking to facilitate a certain type of project or scope of development. This is what occurred with Blocks 104/105 with the pending development of The Strand project. The Redevelopment Agency also acquired additional parcels where there is no site assembly being pursued or where site assembly is no longer an option. This is the case of 438 Main Street and 214 Fifth Street. However, to the extent the property was acquired with Redevelopment property tax increment, it must be sold to effectuate the redevelopment plan. As such, property sales by a Redevelopment Agency must comply with Redevelopment Law, which is very different from the typical public surplus property sales procedure. Sales Process Options A. Open RFP/RFQ — The Redevelopment Agency solicits proposals or qualifications from developers interested in developing an Agency-owned or controlled site. A type or minimum scope of development is specified. The responses are evaluated and the most responsive and best-qualified respondent is selected. Typically, the Agency then negotiates a Disposition and Development Agreement or Owner Participation Agreement for the project. In most instances, this type of approach also involves a land write-down or other public financial participation to make the development feasible. B. Limited RFP/RFQ — This process is the same as above, except proposals are only solicited from a limited number of entities or people, such as owners of property in the site or adjacent to the site. C. Fair-Market Value Sale (Broker Cooperation) — The property is offered for sale by the City's Real Estate Services division with there being broker cooperation in the event a commercial real estate broker brings a buyer to the City. In this instance, the City undertakes its own outreach and marketing effort. The property is typically sold to highest bidder. A more streamlined sales contract and sales process is used and there are very limited redevelopment requirements imposed as part of the sale. D. Fair Market Value Sale (Broker Listed) — As above, except the City retains a commercial real estate broker to list and market the property with full commissions paid. This is the process that was used for 438 Main Street. If you have further questions regarding those options, please let me know. DCB:Is GADavid\MEMOS\.Sale Options-214 5th.doc EDC Meeting Notes ATTAC H M E N T #5 ED C Meeting Notes Economic Development Committee November 19, 2003 3:00 PM 4m Floor Conference Room #2 ID R4pr In Attendance: Mayor Pro Tem Cathy Green, Council Member Dave Sullivan Absent: Mayor Connie Boardman and Council Member Debbie Cook City Staff: David Biggs, Gus Duran,Jim Lamb Guests: Mike Adams&John Morris representing Mum's Restaurant Mayor Pro Tern Cathy Green called the meeting to order at 3:05 PM. ProposalI Public Comments— None. 2. • David Biggs At the previous EDC meeting in October, staff was asked to report back on two things related to this topic: • Plan to disencumber the property from the 11 spaces that are listed as being there in the DT Parking Master Plan. Biggs distributed a memo that outlines how Planning and Economic Development have agreed to do that as part of the next Downtown Parking Master Plan annual update.In effect,we're going to count some of the 100 extra spaces that the Redevelopment Agency is paying for in The Strand Garage towards those 11 spaces in this project in order to disencumber the Agency's property in the event that it's decided to sell this property. • Also outlined in another memo,Biggs went over three or four options to sell the property if Council is interested, sooner rather than later. Originally, Council had looked at surplus properties and made a policy decision to hold onto this parcel until after CIM's project(The Strand)was completed and then market it for sale. After a lengthy discussion,Green motioned and Sullivan seconded to recommend that the Council change its policy and that we have staff internally market the property for sale to prospective buyers who would be owner- occupants of at least the ground floor commercial space. There was quite a bit of discussion of the desire to see the property not be developed on a speculative basis,but rather being able to attract a user. This is in response,in part, to John Morris' proposal to acquire The Shed and actually now develop his Mum's Restaurant concept on this parcel. Based upon the EDC motion, staff will be preparing an action item for EDC committee members to author to be presented to the full Council at its meeting on December 15th seeking Council's concurrence as to that approach. Development-% OR 4. Economic D. T • Lowe's—Was recently approved; a timeframe for potential construction was discussed. • Huntington Center/"Bella Terra"—On December 15'h, Council will be asked to approve the issuance of$25 million in Community Facility District Bonds. The developer will close the Bonds and their construction loan in January of 2005 and intends to commence full construction after that. Sears is still looking to sell its property. • "Pacific City"—Environmental Impact Report is in circulation and at the first EIR public meeting was this week at the Public Library. • "The Strand"-The developer is doing the oil well re-abandonment; we're looking to convey the site to them in January and they'll start their utility relocation soon. Global settlement was reached with Papa Joe's (tenant on the site)that has been relocated. • Edinger Corridor—The Redraft of the Specific Plan is finally in the hands of the planning consultant and we expect to have that back in December. Public meetings are intended for January and back to the Planning Commission in March 2004. Also discussed was a proposal in the planning process from Calvary Chapel to relocate into the former Burlington Coat Factory building. Business Development Activities—Jim Lamb reported: • Kohl's—Is interested in developing a second store in Huntington Beach at the Beachmont Center at Brookhurst and Adams. Across the street at the SW corner of Brookhurst&Adams, Target has submitted a proposal to tear down its existing store and building a new store. • Annual Economic Development Conference-co-hosted by the City and Chamber is scheduled for Tuesday, December 16'h at the Waterfront Hilton. Dan Walters will be the Luncheon Keynote Speaker. • Surf City Credit Card—Inserts are going out in the water bills this month. • Downtown Business Improvement District—Moving forward with the Downtown merchants. • Kids R Us—are closing all its stores, including the one store in Huntington Beach. • Customer Service—Staff from Public Works,Planning,Building and Economic Development are meeting to discuss how to improve the development services process to provide the best customer service. The meeting adjourned at 4:50 PM. c: Mayor and City Council Members, Executive Team and City staff in attendance. ti RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: PROPOSED SALE OF 214 FIFTH STREET COUNCIL MEETING DATE: December 15, 2003 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable 'Tract Map, Location Map and/or other Exhibits Attached Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorne ) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORVY4P. PED Administrative Staff ) Assistant City Administrator (Initial) City Administrator (Initial) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: (BelowOnly) RCA Author: D. Biggs. Ext.-5909