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02-06-2001 - Sales Agreement with Mr. Virgil Butler (2)TO: Daniel G. Hobbs, City Manager and City Council FROM: Thomas M. Mayer Public Works Director/City Engineer City of West Covina r Memorandum AGENDA ITEM NO. C-8b DATE February 6, 2001 SUBJECT: SALES AGREEMENT WITH MR VIRGIL BUTLER SUMMARY: The City Council authorized staff to prepare a Sales Agreement to purchase a 1.44 acre vacant lot adjacent to the Maverick ball field from Mr. Virgil Butler. That Sales Agreement is now ready for City Council approval. BACKGROUND: The City Council authorized staff to negotiate a Sales Agreement with Mr. Virgil Butler for his vacant lot that is northerly of and adjacent to the Maverick ball field. That Sales Agreement is in accordance with the terms previously presented to the City Council which includes a lump sum payment of $248,000 and a sharing of the closing costs. This lot will be combined with the adjacent 10 acres owned by Valencia Heights Water Company, which will then be subdivided resulting in Valencia Heights Water Company having two lots (0.33 acre and 1.67 acres) totaling 2 acres with access and water line easements to them and the City having one lot with approximately 9.4 acres as schematically indicated on the attached sketch. The City lot will include the existing equestrian and baseball facilities. DISCUSSION: The acquisition of the 1.44 acre lot owned by Mr. Butler makes it possible for the City to provide Valencia Heights Water Company with 2 acres of land while retaining sufficient remaining land to continue the equestrian and baseball uses. As agreed with Mr. Butler, the City will pay him $248,000 for a financially unencumbered ownership of his 1.44 acre parcel. In addition, the City will pay for the title and environmental research since they are also necessary for the City's Parcel Map to combine and resubdivide the Butler and Valencia parcels. The City will also pay for its legal costs in pursuing this sale. The remainder of the closing costs will be shared by Mr. Butler and the City. The purchase price is directly proportional to the agreed purchase price for the Valencia Heights Water Company property. The City's Parcel Map relative to these parcels has been conditionally approved by the City Planning Commission. The final Parcel Map is being processed with City Council approval anticipated in March 2001. Staff will attempt to expedite this process although it is primarily controlled by the County Engineer. If the map is not finalized before the expiration on March 31, 2001 of the current lease extension, a final extension of the lease will be before the City Council when a more accurate completion date is known. OPTIONS: If the City desires to retain the Maverick Field and Ridgeriders improvements, there is no option to the purchase of the Butler property. FISCAL IMPACT: There is no identified restrictive source available to fund this purchase. Due to the long-term nature of this acquisition, the use of General Fund Reserves (Account No. 110-300) is proposed. The purchase price plus the other associated costs are not expected to exceed a total of $260,000. The City Council has previously budgeted $220,000 for this purchase ($208,000 for land cost plus $12,000 in associated costs) and an additional $40,000 is necessary to cover the increase in land cost. The increased cost for the Butler properly is due to the increase in the agreed price of the Valencia Heights Water Company property. WUPITEMBLDE'S FILMAGENDA - 2001\Sales Agreement with Virgil Butler_Revised.doc2000-106a 11 t Daniel G. Hobbs, City Manager and City Council Page 2 — February 6, 2001 RECOMMENDATION: It is recommended that the City Council take the following actions: 1. Approve the purchase of 1.44 acres from Virgil Butler for $248,000. 2. Authorize the Mayor and City Clerk to execute the Sales Agreement with Mr. Virgil Butler. 3. Appropriate $40,000 from General Fund Reserves (Account No. 110-300) to Account No. 110-320-3029-7700. Thomas M. Mayer Public Works Director/City Engineer Reviewed and approved by: Artie Fields Acting Finance Director Attachments: Sketch Sales Agreement \\JUPITER\BLDE'S FILES\AGENDA - 2001\Sales Agreement with Virgil Butler Revised.doc: 2000-106ct �. zo, I II per --- .so &-go to Pro AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND ESCROW INSTRUCTIONS THIS AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND ESCROW INSTRUCTIONS (this "Agreement") is dated , 200I for reference purposes only and is entered into by and between VIRGIL J. BUTLER and ROSEMARY I. BUTLER, husband and wife (collectively "Seller"), and the CITY OF WEST COVINA a municipal corporation ("Buyer"). RECITALS: A. Seller is the owner of that certain real property consisting of approximately 1.44 acres located in the City of West Covina, County of Los Angeles, State of California, more particularly described on Exhibit "A" attached hereto and incorporated herein by reference (the "Land"). B. Seller wishes to sell.and Buyer wishes to purchase the Land, together with (i) all improvements now or hereafter constructed thereon; (ii) all rights, privileges, easements, licenses and interests appurtenant thereto, including, without limitation, all mineral, oil, gas, water and water rights; and (iii) all intangible property owned or held by Seller in connection with the Land, including, without limitation, any development rights, governmental approvals and land entitlements. The Land and all of the foregoing (i) through (iii) are collectively referred to herein as the "Property". NOW, THEREFORE, incorporating the foregoing recitals and in consideration thereof, in consideration of the mutual covenants and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: TERMS AND CONDITIONS 1. AGREEMENT TO SELL AND PURCHASE. Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and for the consideration set forth in this Agreement. 2. PURCHASE PRICE. The total purchase price for the Property shall be the sum of TWO HUNDRED FORTY EIGHT THOUSAND DOLLARS ($248,000.00) ("Purchase Price"). On or before 1:00 p.m. on the business day preceding the Closing Date, Buyer shall transfer the Purchase Price with the City of West Covina Financing Authority ("Financing Authority") in "Restricted Funds." "Restricted Funds" shall mean funds that cannot be used for any other purpose other than as set forth in this Agreement. The Restricted Funds shall be designated as the "Butler Fund." Buyer shall cause the Financing Authority to issue a ten (10) year payable note (the "Note' secured by the Butler Fund for the Purchase Price to Seller to be deposited with the -Escrow Holder (as 589830.v1 defined herein) with the appropriate instructions for delivery to Seller. The interest rate on the Note shall be determined within five (5) days prior to the Closing Date (as defined herein) and shall be the lowest interest rate quoted by at least three financing entities for a similar loan to ',a city government. Buyer agrees to file the appropriate forms with the Internal Revenue Service to ensure that seller will receive income tax exempt status for the interest on the Note. Buyer and Seller each agree to execute and deliver to the Escrow Holder such documents as required by Escrow Holder for the reporting of interest credited to each party. 3. OPENING OF ESCROW. Within three (3) business days after Buyer and Seller have executed this Agreement, Buyer and Seller agree to open an escrow ("Escrow") with South H::ls Escrow Corporation, 220 South Glendora Avenue, West Covina, California 91790, (626) 919-3464 ("Escrow Holder"). Escrow shall be deemed opened upon execution by both parties "of this Agreement and delivery of same to Escrow Holder ("Opening of Escrow"). Within ten (16) days following the Opening of Escrow, Escrow Holder shall sign and deliver to Buyer and Seller the acceptance of the Agreement and the Escrow set forth below and shall deliver to each of Buyer and Seller written confirmation of the date of Opening of Escrow, the date for Buyer's initial review of title under Paragraph 7, the Due Diligence Date under Paragraph 8(d) and the Closing Date under Paragraph 4. This Agreement, together with such standard provisions as may be required by Escrow, constitutes the joint Escrow Instructions of Buyer and Seller, and Escrow Holder is hereby empowered to act under this Agreement. In the event of any conflict between the terms ";of this Agreement and Escrow Holder's general conditions or other instructions, the provisions 'of this Agreement shall prevail. The parties hereto agree to do all acts reasonably necessary to close the Escrow. 4. CLOSING DATE. The term "Close of Escrow" shall mean the date the Grant Deed (defined below) is recorded in the Official Records of Los Angeles County, California. Close of Escrow shall occur on or before the Closing Date. The term "Closing Date" shall mean the date which is sixty (60) days after Opening of Escrow, or such other date as may be agreed upon in writing by the parties hereto. If the Closing Date shall fall on a Monday or fall on a weekend or holiday, the Closing Date shall be the next business day. 5. CONVEYANCE OF TITLE. Seller agrees to convey to Buyer at Close of Escrow by grant deed in form acceptable to Buyer ("Grant Deed") marketable fee simple title to the Property free and clear of all recorded and unrecorded liens, encumbrances, assessments, easements,'; leases, and taxes, subject only to the Permitted Exceptions (hereinafter defined). 6. TITLE INSURANCE POLICY. Escrow Holder shall, concurrently with the recording of the Grant Deed to Buyer, provide Buyer with a CLTA Standard Coverage Policy of Title Insurance in the amount of the Purchase Price issued by First American Title Insurance Company ("Title Company"), showing the title to the Property vested in Buyer, subject only to the Permitted Exceptions ("Title Policy"). Buyer may elect to obtain ALTA coverage at Buyer's additional cost and expense. 7: COMMITMENT FOR TITLE INSURANCE. 589830.0 2 (a) Buyer shall have the right to obtain, at Buyer's expense, a Commitment for Title Insurance issued by Title Company, together with copies of all documents referred to therein (collectively, the "Commitment") and a map prepared by Title Company plotting all easements shown therein. Buyer shall have thirty (30) calendar days following the later of (i) the date of Opening of Escrow; or (ii) the date that Buyer has received the Commitment from Title Company to accept any or all items ("Permitted Exceptions") or reject any item or items disclosed by the Commitment ('Disapproved Exceptions"). If Buyer fails to notify Seller in writing of any Disapproved Exceptions within said thirty (30) calendar day period, Buyer shall be deemed to have approved and accepted the Commitment. If Buyer shall disapprove of any item in the Commitment, Seller shall, wi►hin five (5) days following receipt of such disapproval, advise Buyer in writing whether or not Seller shall cause to be eliminated any such Disapproved Exceptions. Seller's failure to send such notice shall be deemed to constitute Seller's election not to eliminate such Disapproved Exceptions as of the end of such five (5) day period. If Seller elects to eliminate such Disapproved Exceptions, the Escrow shall remain open and Seller shall be obligated to convey the Property to Buyer subject only to the Permitted Exceptions. If Seller elects, or is deemed to have elected, not to eliminate any Disapproved Exceptions, Buyer shall have the right, within five (5) days following such election or deemed election, to either agree in writing to accept the Property subject to the Disapproved Exceptions which Seller has elected not to eliminate (in which event such Disapproved Exceptions shall be deemed Permitted Exceptions), or to terminate this Agreement and the Escrow. Buyer's failure to send such notice shall be deemed Buyer's election to terminate this Agreement and the Escrow. Upon such termination, neither Buyer nor Seller shall have any further liability hereunder, except that Buyer shall be entitled to the prompt return of any funds deposited by Buyer with Escrow Holder less Buyer's share of Escrow costs to date of cancellation. (b) Upon the issuance of any amendment or supplement to the Commitment which adds additional exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement. (c) Notwithstanding anything to the contrary herein, Buyer shall be deemed to have automatically objected to all deeds of.trust, mortgages, judgment liens, mechanics' liens, federal and state income tax liens, delinquent general and special real property taxes and assessments and similar monetary encumbrances affecting the Property, and Seller shall discharge any such non - permitted title matter of record prior to or concurrently with the Close of Escrow. 8. DUE DILIGENCE REVIEW. (a) Within ten (10) days following the Opening of Escrow, Seller shall deliver to Buyer all Due Diligence Items for Buyer's review. The term "Due Diligence Items" shall collectively refer to all documents relating to the Property which Seller has in its possession or control (or has reasonable access thereto and knowledge thereof), including without limitation (and to the extent such items exist), copies of the by-laws and articles of incorporation for any owner's association affecting the Property; all leases, contracts and agreements and all amendments and modifications to any such leases, contracts and agreements; surveys (including any ALTA surveys); insurance claims reports and copies of insurance policies; engineering reports, soils studies, soils compaction reports; and environmental audits and reports, environmental remediation plans (and all 589830.v 1 3 correspondence and documents related thereto); copies of all building and operational permits, plans and specifications, inspection reports and other items relating to the construction of improvements and governmental approvals thereof. (b) The foregoing recitation of documents shall not be construed to imply that Seller has in its possession any such documents. Seller shall not be required to obtain documents which are not presently in the possession of Seller, including without limitation, any documents on file with any governmental agency and Buyer shall be responsible for obtaining any such documents, provided that Seller will cooperate with Buyer's efforts in regard thereto. (c) Buyer or Buyer's representatives may enter on the Property to make such tests, surveys or other studies of the Property so long as Buyer pays for all such tests and studies and keeps the Property free and clear of any liens, repairs or damage to the Property. (d) The term "Due Diligence Date" shall mean the date which is forty-five (45) days after the later of (i) the date of Opening of Escrow; or (ii) the date that Buyer has received all Due Diligence Items from Seller. Buyer shall deliver written notice to Seller on or before the Due Diligence Date as to Buyer's approval or disapproval of the Due Diligence Items and of Buyer's inspection of the Property. In the event Buyer fails to deliver such notice, Buyer shall be deemed to have disapproved the Due Diligence Items. 9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE ESCROW. Buyer's obligation to acquire the Property is subject to the satisfaction of the following conditions which are for Buyer's benefit only: (a) Buyer has approved title to the Property as provided in Paragraph 7. (b) On or before the Due Diligence Date, Buyer has received and approved (to the extent Buyer elects to do so): (i) the physical condition of the Property; (ii) a Phase 1 environmental report; (iii) an ALTA survey of the Property prepared by a licensed surveyor; and (iv) all other Due Diligence Items delivered by Seller to Buyer or otherwise obtained by Buyer. (c) Title Company commits to issue the Title Policy dated as of the Close of Escrow. (d) All representations and warranties of Seller specified in Paragraph 12(a) or otherwise in this Agreement are true and correct as of Close of Escrow. 589830M 4 0 • (e) Escrow Holder holds and will deliver to Buyer as of Close of Escrow the instruments accruing to Buyer pursuant to this Agreement. If Buyer has not delivered written notice of approval of the above conditions to Seller by the times provided, or if no time is provided, on or before the Close of Escrow, each such condition shall automatically and conclusively be deemed to have been disapproved by Buyer, and Buyer shall have the right to terminate this Agreement and the Escrow. Upon such termination, thereafter neither Buyer nor Seller shall have any further liability hereunder, except that Buyer shall be entitled to the prompt return of any funds deposited by Buyer with Escrow Holder less Buyer's share of Escrow costs to date of cancellation. 10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE ESCROW. Seller's obligation to perform this Agreement is subject to the satisfaction of the following conditions which are for Seller's benefit only: (a) Escrow Holder holds and will deliver to Seller as of Close of Escrow the Note and instruments accruing to Seller pursuant to this Agreement. .. 11:. CLOSING DOCUMENTS. (a) On or before 1:00 p.m. on the business day preceding the Closing Date, Seller will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Grant Deed; (ii) an original Non -Foreign Affidavit on Escrow Holder's form; (iii). an original California Form 590-RE Real Estate Withholding Exemption Certificate; and (iv) if requested by Buyer, a Closing Certification as defined in Paragraph 12(c). (b) On or before 1:00 p.m. on the business day preceding the Closing Date, Buyer will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Note; and (ii) if elected by Buyer, a preliminary change of ownership statement. (c) Both parties shall execute and deliver through Escrow any other documents or instruments which are reasonable necessary in order to consummate the purchase and sale of the Property. (d) Escrow Holder shall confirm that any documents signed in counterpart are the matching documents and shall combine the signature pages thereof so as to create fully executed documents. Escrow Holder will cause the Grant Deed to be recorded when it can issue the Title Policy in the form described in Paragraph 6, and holds for the account of Buyer and Seller, respectively, the funds and items described above to be delivered to Buyer and Seller, respectively, through Escrow, less costs, expenses and disbursements chargeable to Seller pursuant to the terms hereof. Promptly following Close of Escrow, Escrow Holder shall date all undated documents as of Close of Escrow and shall distribute to each of Buyer and Seller Escrow Holder's closing statement and an original of each closing document deposited by the other party in Escrow and copies (conformed if recorded) of any other documents deposited in Escrow. 589830M 5 12. REPRESENTATIONS OF SELLER. (a) Seller hereby makes the following representations and warranties to Buyer, each of which is material and relied upon by Buyer in making its determination to enter into this Agreement, is true in all respects as of the date hereof and shall be true in all respects on the date of Close of Escrow on the Property, and shall survive the Close of Escrow of the purchase and sale of the Property -as well as any future transfer of the Property to Buyer or any transferee, successor or assignee of Buyer: (i) Seller is the owner of and has full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein and to carry out Seller's obligations hereunder. Seller has obtained, or will obtain before the Close of Escrow, all required consents, releases and permissions in order to vest good and marketable title in Buyer subject to no other possessory, ownership or leasehold interests. (ii) Seller will have received no notices, orders or directives as of Close of Escrow from any applicable governmental authority of zoning, building, environmental protection, clean air, pollution, fire or health code violations with respect to the Property. (iii) As used herein, "Hazardous Substances" means any substance, material or waste defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic substance, or other similar term, including, without limitation, petroleum products or byproducts, or asbestos containing products, which is or becomes regulated by any federal, state or local governmental authority, statute, regulation or ordinance, including, but not limited to, any substance defined as such or regulated by any "Superfund" or "Superlien" law, or any other federal, state or local law, statute, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning Hazardous Materials and/or oil wells and/or underground storage tanks and/or pipelines, as now, or at any time hereafter, in effect. To the best of Seller's knowledge, (i) there exist no Hazardous Substances on, under or around the Property, groundwater, or otherwise; (ii) Seller has received no written notice from any third parties, prior owners of the Property, or any federal, state or local govern -mental agency, indicating that any additional hazardous waste remedial or clean-up work will be required; (iii) there are not any on -site spills, releases, discharges or disposal of Hazardous Substances which have occurred or are presently occurring on any of the Property; (iv) no spills or disposal of Hazardous Substances have occurred or are presently occurring off the Property as a result of any activities on the Property; and (v) there exist no underground gasoline or other storage tanks on, under or about the Property. Nothing in the foregoing shall diminish any obligations of Seller under applicable federal, state or local law. (iv) There are no pending or threatened litigation, allegations, lawsuits or claims, whether for personal injury, property damage, landlord -tenant disputes, property taxes, contractual disputes or otherwise, which do or may affect the Property or the operation or value thereof, and there are no actions or proceedings pending or, to the best of Seller's knowledge, threatened against Seller before any court or administrative agency in any way connected with the Property and neither the entering into of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction or 589830M 6 decree issued against or imposed upon it, nor constitute or result in any default or event that with the notice or lapse of time, or both, would be a default, breach or violation of any lease, mortgage, deed of trust or other agreement, instrument or arrangement by which Seller or the Property are bound. (v) There are no contracts, leases, claims or rights affecting the Property and no contracts .or agreements have been entered into by or under Seller, oral or written, which shall survive the Close of Escrow. (vi) All Due Diligence Items provided by Seller to Buyer are true, accurate and complete copies of same and, to the best knowledge of Seller, all information contained in the Due Diligence Items is true, accurate and complete. (vii) Seller is not a "foreign person" within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended, or California Revenue and Tax Code Section 1880, as amended. (b) Within five (5) days following the Opening of Escrow, Seller shall deliver to Buyer any and all disclosures as required by applicable law in connection with the proposed transfer of ownership of real property. (c) If Seller becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by Seller under this Agreement, whether as of the date given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon Seller's knowledge and/or belief as of a certain date, Seller will give immediate written notice of such changed fact or circum-stance to Buyer, but such notice shall not release Seller of its liabilities or obligations with respect thereto. If requested by Buyer, Seller shall issue a certificate regarding representations and warranties in form reasonably satisfactory to Buyer and Seller for delivery to Buyer through Escrow at the Close of Escrow ("Closing Certification"), stating that all the representations and warranties contained in Paragraph 12(a) are true and correct as of said date, or setting forth in detail which of such matters are not true and correct. 13. Indemnity. Seller shall indemnify Buyer against and hold Buyer harmless from any and all loss, damage, liability or expense, including court costs and reason -able attorneys' fees, which. Buyer may reasonably incur or sustain either prior to or following the Close of Escrow by reason of or in connection with (i) any misrepresentation made by or on behalf of Seller contained in any certificate or other instrument furnished or to be furnished by Seller, or at its request hereunder; (ii) any breach of Seller's representations and/or warranties contained herein; (iii) the failure of Seller to fulfill any of its covenants or agreements under this Agreement; (iv) any and all obligations, liabilities, claims, accounts, demands, liens or encumbrances, whether direct, contingent or consequential, and no matter how arising, in any way related to or arising from any act, conduct, omission, contract, agreement or commitment of Seller or in any way relating to or arising from the construction, completion, sale, use or occupancy of the Property prior to -the Close of Escrow; or (v) in any way relating to the generation, treatment, storage or disposal of Hazardous Materials or Substances prior to the Close of Escrow. Buyer shall notify Seller within ten (10) days in the event 589830M 7 any claim is made against it for which Seller shall have agreed to indemnify Buyer as set forth in this Agreement, and Seller shall thereupon undertake to defend and hold Buyer free and harmless therefrom. Should Seller fail to discharge or undertake- to defend against any such liability, then Buyer may settle the same, and Seller's liability to Buyer shall be conclusively established by such settlement, the amount of such liability shall include both the settlement consideration and the reasonable costs, attorneys' fees and expenses necessarily incurred by the Buyer in effecting such settlement. 14. PRORATIONS AND EXPENSES. (a) All non -delinquent general and special real property taxes and assessments shall be pro -rated to the Close of Escrow. Any supplemental tax bills received after Close of Escrow shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and by Buyer to the extent they relate to a period after Close of Escrow. (b) Buyer and Seller shall cause any and all utilities which are in the name of Seller to be transferred to the name of Buyer as of the Close of Escrow or as soon thereafter as practicable. (c) In the event final amounts with respect to any proration are not available as of Close of Escrow, the proration shall be done on an estimated basis and the parties shall prepare a final proration within sixty (60) days following Close of Escrow. Any party who is obligated to pay net amounts based on said final proration shall reimburse the other party said amount within thirty (30) days after completion of the final proration. (d) Buyer shall pay the premium for the standard ALTA policy of title insurance and the cost of ALTA coverage if Buyer elects to obtain such ALTA coverage. Buyer and Seller shall each pay one-half of the Escrow fees. Seller shall pay the recording fees and any required documentary transfer taxes. All other costs of Escrow not otherwise specifically allo-cated by this Agree-ment shall be apportioned between the parties in a manner consistent with the custom and usage of Escrow Holder. 15. INFORMATION REPORT. The "Reporting Person" within the meaning of Treasury Regulation Section 1.6045-4(e)(5) with respect to the transactions contemplated by this Agreement shall be Escrow Holder. The name and address of Escrow Holder are set forth in Paragraph 3 of this Agreement. It is agreed that Escrow Holder is an eligible person under Section 1.60454(e)(5)(ii) of said Regulations. Escrow Holder hereby agrees to be responsible for complying with the reporting and other requirements of Internal Revenue Code Section 6045(e) and the income tax regulation promulgated thereunder. Pursuant to said regulation, the address for the transferor and transferee are as set forth for Seller and Buyer set forth in Paragraph 25 below and the identifying information regarding the real estate transferred is the legal description for the Property set forth on Exhibit "A" attached hereto. Escrow Holder agrees to file the form required by said regulations between the end of the calendar year in which the Close of Escrow occurs and February 28 of the following calendar year. Buyer and Seller agree (i) to cooperate with Escrow Holder and with each other in completing any report and/or other information required to be delivered to the Internal 589830.v 1 8 0 . 9 Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction contemplated by this Agreement, including, without limitation, Internal Revenue Service Form 1099-S as such may be hereafter modified or amended by the Internal Revenue Service or as may be required pursuant to any regulation now or hereafter promulgated by the Treasury Department with respect thereto; (ii) that Buyer and Seller, their respective employees and attorneys, and Escrow Holder and its employees may disclose to the Internal Revenue Service, any information regarding this Agreement or the transaction contemplated herein as such party reasonably deems to be required to be disclosed to the Internal Revenue Service by such party pursuant .to Internal Revenue Code Section 6045(e); (iii) that neither Buyer nor Seller shall seek to hold any such party liable for the disclosure to the Internal Revcuue Service of any such information; and (iv) to retain this Agreement for at least four (4) years following the close of the calendar year in which the Close of Escrow occurs. 16. RISK OF PHYSICAL LOSS. Risk of physical loss to the Property shall be bome by Seller prior to the Close of Escrow and by Buyer thereafter. In the event that the Property shall be damaged by fire, flood, earthquake or other casualty, Seller shall deliver prompt written notice thereof to Buyer, in which event, Buyer shall have the option to terminate this Agreement, provided notice of such termination is delivered to Seller within twenty (20) days following the date Buyer receives Seller's notice of the occurrence of such casualty. If Buyer fails to terminate this Agreement pursuant to the foregoing sentence within said twenty (20) day period, Buyer shall complete the acquisition of the Property, in which case Seller shall assign to Buyer the interest of Seller in all insurance proceeds relating to such damage (subject to the rights of tenants under leases of the Property). Seller shall consult with Buyer regarding any proposed settlement with the insurer and Buyer shall have the reasonable right of approval thereof. Seller shall hold such proceeds until the Close of Escrow. In the event this Agreement is terminated for any reason, Buyer shall have no right to any insurance proceeds. 17. PRE -CLOSING OBLIGATIONS. Prior to Close of Escrow, Seller agrees not to enter into any new lease or contract affecting the Property without Buyer's prior written consent, which consent may be withheld in Buyer's sole and absolute discretion. Seller shall maintain the Property in good condition and repair at Seller's sole cost and expense. 18. POSSESSION. Possession of the Property shall be delivered to Buyer at Close of Escrow. In the event any personal property remains on the Property following the Close of Escrow, it shall automatically become the property of Buyer. 19. INTEGRATION. This Agreement and other documents expressly incorporated herein by reference contain the entire and exclusive under -standing and agreement between the parties relating to the matters contemplated hereby and all prior or contemporaneous negotiations, agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. .20. BROKERAGE COMMISSION. Buyer and Seller represent and warrant to each other that no broker's commission or finder's fee is payable with regard to this transaction and each 589830.v1 9 • will indemnify, defend and hold the other harmless with respect to any claim or any broker's fee claimed as a result of a breach of this warranty. 21. SURVIVAL. All "warranties and covenants stated in this Agreement shall survive Close of Escrow and the delivery of the Grant Deed. 22. TIME. Time is of the essence in this Agreement. 23. ATTORNEYS' FEES. In the event of any dispute between the par -ties hereto arising out of the subject matter of this Agreement or the Escrow; or in connection with the Property, the prevailing party in such action shall be entitled to have and to recover from the other party its reasonable attorneys' fees and other reasonable expenses in connection with such action or proceeding in addition to its recoverable court costs. 24. MODIFICATIONS. Any alteration, change or modification of or to this -Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in such instance executed on behalf of each party hereto. 25. NOTICES. Any notice which either party may desire to give to the other party or to the Escrow Holder must be in writing and shall be effective (i) when personally delivered by the other party or messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of a telecopy or fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective parties as set forth below or to such other address and to such other persons as the parties may here -after designate by written notice to the other parties hereto. To Seller: Virgil I Butler P.O. Box 4102 Covina, CA 91723 Facsimile: To Buyer: City of West Covina 1444 West Garvey Ave. South West Covina, CA 91790 Attn: Thomas M. Mayer Facsimile: (626) 813-8660 Copy to: Fulbright & Jaworski L.L.P. 865 S. Figueroa Suite 2900 Los Angeles, CA 90017 Attn: Colin Lennard, Esq. Facsimile: (213) 680-4518 589830.v 1 10 26• SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. 27. EXECUTION IN COUNTERPART. This Agreement and any modifications, amendments or supplements thereto may be executed in several counterparts; and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [end - signature page follows] 589830M 11 IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement for Acquisition of Real Property and Escrow Instructions as of the date and year first above written. "SELLER": "U VIRGIL J. BUTLER ROSEMARY I. B LER "BUYER": CITY OF WEST COVINA, a municipal corporation By: Its: ATTEST: City Clerk JANET BERRY APPROVED AS TO FORM: City Attorney ARNOLD M. ALVAREZ-GLASMAN AGREED AND ACCEPTED AS OF 589830.0 12 • SOUTH HILLS ESCROW CORPORATION "ESCROW HOLDER" 589830.v 1 13 • �1: LEGAL_ DEg�R1P��N OF LA1yD The Land is that certain real property, located in the City of West Covina, County of Los Angeles, State of California, more particularly described as follows: PARCEL 1: THAT PORTION OF LOT 72 OF TRACT 930, IN THE CITY OF WEST COVINA. AS PER MAP RECORDED IN 800K 17 PAGE 38 OF MAPS, IN THR OFFICE OF THE COUNTY RECORDER OF SAID COUNTYLYING SOUTHERLY OF A LINE PARALLEL OR , CONCENTRIC WITH 32.00 FEET SOUTHERLY, MEASURED AT RIGHT ANGL RADIALLY. FROM THE FOLLOVWNG DESCRIBED LINE. OR COMMENCING AT A POINT IN THE CENTER LINE OF CITRUS STREET DISTANT SOUTH 0 2T 05' WEST 582.6 FEET- ALONG SAID CENTER LINE FROM THE EASTERLY PROLONGATION OF THE SOUTHERLY LINE OF TRACT 196M AS SAID CENTER LINE AND SAID PROLONGATION ARE SHOWN ON MAP OF =0 TRACT 19682 RECORDED IN BOOK 498 PAGES 18,19, COUNTY RECORDER OF SAID COUNTY, SAID POINT BEING IN A CURVE COFFICE NCH E TO THE NORTH AND HAVING A RADIUS OF 1629 FEET, A RADIAL LINE OF SAID CURVET10 SAID CURRVE SAID POINT BEARS SOUTH 2° 01' W EAST, THENCE EASTERLY ALONG 164.14 FEET; THENCE TANGENT TO SAID CURVE NORTH Sr 11, 42' EAST. 200.30 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTH AND hAVING A RADIUS OF 970 FEET, THENCE EASTERLY AND NORTHEASTERLY ALONG SAID CURVE 550 6B FEET. E=EPT THAT PORTION OF SAID LOT LYING SOUTHEASTERLY OF A STRAIGHT LINE EXTENDING FROM THE SOUTHWEST CORNER OF SAID LOT TO A POINT IN THE EAST LINE OF SAID LOT DISTANT NORTHERLY THEREON 330.00 FEET FROM THE SOUTHEAST CORNER OF SAID LOT EXCEPT THEREFROM THE -PRECIOUS METALS AND ORES THEREOF- AS EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND, SR., AND WILLIAM WORKMAN, IN THE PARTITION DEED RECORD® IN BOOK 10 PAGE 39, OF DEEDS. ALSO EXCEPT HYDROCAARSON SUBSTANC�sEREFROM - OIL, GAS, PETROLEUM AND OTHER SURFACE ENTRY, AS RESERVED N THE D� FROM ANG D MINERALS, BUT WITHOUT RIGHT COUNTY F1000 CONTROL, DISTRICT' IN DEED RECORDED MARCH 10, 1964 AS INSTRUMENT NO.4916. (CONTINUED) 0 PARCEL 2: THAT PORTION OF LOT 72 OF TRACT 930, IN THE CITY OF WEST COVINA. AS PER MAP RECORDED IN BOOK 17 PAGE 38 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 72; THENCE NORTH 49° 25' Or EAST ALONG THE SOUTHEASTERLY LINE OF THE LAND DESCRIBED AS PARCEL NO. 535 IN A FINAL JUDGMENT HAD IN . SUPERIOR COURT CASE NO 766503, A CERTIFIED COPY OF WHICH IS RECORDED IN BOOK 01505 PAGE 575, OFFICIAL RECORDS, A DISTANCE OF 127.07 FEET; THENCE SOUTH 3r OS WEST 112.02 FEET TO A POINT IN THE SOUTHERLY LINE OF SAID LOT 72; THENCE NORTH 896 34, ST WEST ZZ.g6 FEETTO THE POINT OF BEGINNING. EXCEPT THEREFROM THE -PRECiOUS METALS AND ORES THEREOF" AS EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND, SR. AND VtgLL AM WORKMAN' IN THE PARTITION DEED RECORDED IN BOOK 10 PAGE 39, OF DEEDS. PARCEL 3: AN EASEMENT FOR INGRESS AND EGRESS OVER THE SOUTHERLY 15 00 FEET OF THE NORTHERLY 40 FEET OF THAT PORTION OF LOT 71, OF TRACT 9309. IN THE CITY OF WEST COVINA, AS PER MAP RECORDED IN BOOK 17 PAGE 38 OF MAPS. IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. LYING SOUTHERLY OF A LINE THAT IS PARALLEL WITH AND DISTANT 32.00 FEET SOUTHERLY, MEASURED AT RIGHT ANGLES OR RADIALLY FROM THE FOLLOWING DESCRIBED UNE BEGINNING AT A POINT IN THE CENTER UNE OF CITRUS STREET, SAID POINT BEING DISTANT SOUTH 00 25' 05" WEST 5BM FEET ALONG SAID CENTER LINE OF TRACT 19682, AS SAID CENTER LINE AND SAID PROLONGATION ARE SHOWN ON MAP OF SAID TRACT 1968Z RECORDED IN BOOK 406 PAGES 18 TO 20 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. SAID POINT BEING IN A CURVE CONCAVE TO THE NORTH AND HAVING A RADIUS OF 1629 FEET, A RADIAL LINE OF SAID CURVE TO SAID POINT BEARS SOUTH r 01' W EAST; THENCE EASTERLY ALONG SAID CURVE, 164.14 FEET; THENCE TANGENT TO SAID CURVE. NORTH 8Z° 11' 42' EAST 200.30 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTH AND HAVING A RADIUS OF S70 FEET: THENCE EASTERLY AND NORTHEASTERLY ALONG SAID CURVE 550.68 FEET EXCEPT THEREFROM THAT PORTION OF SAID LOT 71; COMPRISING PARCELS 502 AND 471 OF THE FINAL ORDER OF CONDEMNATION ENTERED IN SUPERIOR COURT CASE NO. 766503 OF THE SUPERIOR COURT OF SAID COUNTY. A CERTIFIED COPY OF WHICH WAS RECORDED APRIL 11. 1962 IN BOOK D1577 PAGE 65, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, SAID LAND DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE ABOVE DESCRIBED PARALLEL LINE WITH THE WESTERLY LINE OF SAID LOT 7; THENCE ALONG SAIO WESTERLY LINE, SOUTH 00 25' Or WEST 70.35 FEET: THENCE SOUTH 8V w Sr EAST 10.00 FEET TO A LINE PARALLEL WITH AND 10.00 FEET EASTERLY, MEASURED AT RIGHT ANGLES, FROM SAID WESTERLY LINE; THENCE ALONG SAID LAST MENTIONED PARALLEL. LINE, NORTH 00 ZT Or EAST 49.00 FEET; THENCE NORTH 250 OS EAST 49.14 FEET TO SAID FIRST MENTIONED PARALLEL. LINE; THENCE WESTERLY ALONG SAID FIRST MENTIONED PARALLEL LINE TO THE POINT OF BEGINNING.