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2021 Chin Family Properties LP Settlement Agrmt Addendum to & Amendment Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 1 of 8 ADDENDUM TO, AND AMENDMENT OF: SETTLEMENT AGREEMENT AND ESCROW INSTRUCTIONS by and between CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP, a California limited partnership “Chin” and CITY OF LA QUINTA, a California municipal corporation “City” Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 2 of 8 ADDENDUM TO, AND ADDITIONAL ESCROW INSTRUCTIONS REGARDING, Settlement Agreement and Escrow Instructions dated July 2, 2020 This ADDENDUM TO, AND ADDITIONAL ESCROW INSTRUCTIONS REGARDING, the Settlement Agreement and Escrow Instructions dated July 2, 2020 by and between CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP, a California limited partnership, and CITY OF LA QUINTA, a California municipal corporation (“Addendum”), is made between said parties, and modifies said Settlement Agreement and Escrow Instructions as follows: R E C I T A L S A. The Settlement Agreement and Escrow Instructions dated July 2, 2020 by and between CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP, a California limited partnership (“Chin”), and CITY OF LA QUINTA, a California municipal corporation (the “City”) (“Settlement Agreement”) provides in pertinent part as follows: 5.1 Proration of Taxes. . . . Real and personal property taxes on the Bridge Project Part Take Area shall be prorated by the parties to the apportionment date for the Bridge Project Part Take Area as set forth above at section 3.8. Real and personal property taxes on the remainder of the Property shall be prorated by the parties to the Closing Date. . . . 5.2 Rents, Other Income and Operating Expenses. Prepaid Contracts assumed by City, rents, rent concessions, all revenues under all space leases, coin-operated laundry machines, licenses, security agreements and all other fees and miscellaneous income arising out of the operation of the Property shall be prorated as of the Close of Escrow. . . . . 5.3 Laundry Lease. . . . Chin shall be entitled to collect all the coins in the laundry machines on the Property up to the Close of Escrow, and City shall be entitled to the all coins in the laundry machines and all proceeds from the operation of such laundry facilities after the Close of Escrow. 5.4 Deposits. All security deposits and other tenant deposits and prepaid rents attributable to the period following the Close of Escrow shall be credited to City at the Closing. 5.5 Utilities. Chin . . . shall be responsible for all utility services to the Property, other than utilities paid directly by the Tenants, until the Close of Escrow. . . . [T]he parties shall subsequently prorate utilities based upon the actual utility usage upon receipt of such utility statements. 5.6 Maintenance Contracts. Chin shall be responsible for payment of all maintenance services, such as janitorial services, landscape services, guard services, and similar services to the Close of Escrow, and shall Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 3 of 8 maintain all plumbing, heating, electrical and other systems on the Property (other than those systems for which individual Tenants are responsible) in good working order until the Close of Escrow. City shall be responsible for such services after Close of Escrow and for any such contracts which it elects to assume. All contracts for such services shall be terminated by the Close of Escrow unless City elects to assume same . . . . City will advise Chin of City’s decisions in this regard as expeditiously as possible after Opening of Escrow, and in no event later than as provided in Section 3.1(a) above. Any deposit or prepayment relating to any such contract that City elects to assume shall be credited to Chin at the Close of Escrow. 5.7 Insurance. Chin shall cause its policies of insurance for the Property (other than those elected to be assumed by City pursuant to Subsection 3.1(a) above and then only to the extent each such contract is assignable to City) to be terminated effective immediately after the Close of Escrow and City shall be responsible for obtaining its own insurance. All premiums and fees related to any policy of insurance assigned to City shall be prorated and that portion attributed to the period following the Close of Escrow shall be credited to Chin. 5.9 Possession. Subject to the rights of tenants in possession, City shall be entitled to possession of the Property on the Close of Escrow. . . . . 6.1 Warranties and Representations by Chin. . . . . (d) Chin shall indemnify City against and hold City harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys’ fees, which City may reasonably incur or sustain either prior to or following the Closing Date by reason of or in connection with . . . (iii) the existence on the Property, as of the Close of Escrow, of any Hazardous Materials or Substances (as defined above) placed on the Property by Chin or Chin’s employees, agents, or representatives, . . . . 6.2 City to Indemnify Chin and Hold Chin Harmless. City shall indemnify Chin against and hold Chin harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys’ fees, which Chin may reasonably incur or sustain either prior to or following the Closing Date by reason of or in connection with . . . (ii) the existence on the Property, after the Close of Escrow, of any Hazardous Materials or Substances . . . . . . . . Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 4 of 8 B. On December 17, 2020, the Court entered Judgment in City of La Quinta v. Chin Family Properties Limited Partnership, et al., Riverside County Superior Court Case No. PSC1803284 (the “Judgment”). The Judgment provides in pertinent part as follows: 7. City Authorized to Immediate Possession of Remainder Parcel The CITY is authorized to take possession of the Remainder Parcel immediately upon entry of this Stipulated Judgment. . . . . 9. Cancellation of Property Taxes Pursuant to Revenue and Taxation Code section 5082: . . . . (b) the “date of apportionment” as to the Bridge Easement Parcel, Bridge Residential Parcel and the Bridge TCE Parcel is July 23, 2020, . . . . (c) the “date of apportionment” as to the Remainder Parcel is the date of this Stipulated Judgment, . . . . C. The area described in the Settlement Agreement as the “Bridge Project Part Take Area” constitutes the same area as is described in the Judgment as the “Bridge Easement Parcel, Bridge Residential Parcel and the Bridge TCE Parcel.” D. The just compensation set forth in the Settlement Agreement and the Judgment has been distributed to Chin pursuant to section 4 of the Judgment, after the remaining balance of the just compensation was deposited on December 16, 2020, with the State Treasurer’s Office Condemnation Deposit Fund. E. The City elected to receive an assignment of Chin’s management contract with J & H Asset Property Management, Inc. (“Property Manager”). To facilitate said assignment, Chin, City and Property Manager entered into the Addendum to and Reservation of Rights for Assignment and Assumption Agreement, effective December 31, 2020. F. City and Chin now wish to memorialize proration of various items and risk of loss in light of the Judgment entered December 17, 2020, the Final Order in Condemnation and Withdrawal of Lis Pendens being filed January 7, 2021 and certified copy thereof received after that date due to COVID-19 and court administrative processes, and to revise the escrow instructions insofar as they relate to the matters set forth at paragraph A above. Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 5 of 8 NOW, THEREFORE, City and Chin hereby agree as follows: 1. Right of Possession and Risk of Loss. Pursuant to the Judgment entered December 17, 2020, the City was entitled to take possession of each of the following specified parcels at the following times: (a) as to the Roadway Easement Parcel: November 14, 2018; (b) as to the Bridge Easement Parcel, Bridge Residential Parcel and the Bridge TCE Parcel: July 23, 2020; and (c) as to the Remainder Parcel: December 17, 2020. Based on confirmation of no known losses or incidents by the City and Chin as of December 17, 2020, risk of loss was transferred to the City on December 17, 2020. 2. Amendment to Settlement Agreement and Escrow Instructions. Those portions of the Settlement Agreement referenced above at paragraph A are hereby amended and, as so amended, now provide as follows: 5.1 Proration of Taxes. . . . Real and personal property taxes on the Bridge Project Part Take Area shall be prorated by the parties as of July 23, 2020. Real and personal property taxes on the remainder of the Property shall be prorated by the parties as of December 31, 2020. . . . 5.2 Rents, Other Income and Operating Expenses. Prepaid Contracts assumed by City, rents, rent concessions, all revenues under all space leases, coin-operated laundry machines, licenses, security agreements and all other fees and miscellaneous income arising out of the operation of the Property shall be prorated as of December 31, 2020. . . . . 5.3 Laundry Lease. . . . Chin shall be entitled to collect all the coins in the laundry machines on the Property through 11:59 p.m. on December 31, 2020, and City shall be entitled to the all coins in the laundry machines and all proceeds from the operation of such laundry facilities after December 31, 2020. 5.4 Deposits. All security deposits and other tenant deposits and prepaid rents attributable to the period after December 31, 2020 shall be credited to City at the Closing. 5.5 Utilities. Chin . . . shall be responsible for all utility services to the Property, other than utilities paid directly by the Tenants, through 11:59 p.m. on December 31, 2020. . . . [T]he parties shall subsequently prorate utilities based upon the actual utility usage upon receipt of such utility statements. Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 6 of 8 5.6 Maintenance Contracts. Chin shall be responsible for payment of all maintenance services, such as janitorial services, landscape services, guard services, property manager services, and similar services incurred through 11:59 p.m. on December 31, 2020, and shall maintain all plumbing, heating, electrical and other systems on the Property (other than those systems for which individual Tenants are responsible) in good working order through 11:59 p.m. on December 31, 2020. City shall be responsible for such services after December 31, 2020 and for any such contracts which it elects to assume. All contracts for such services shall be terminated before December 31, 2020 unless City elects to assume same . . . . City will advise Chin of City’s decisions in this regard as expeditiously as possible after Opening of Escrow, and in no event later than as provided in Section 3.1(a) above. Any deposit or prepayment relating to any such contract that City elects to assume shall be credited to Chin at the Close of Escrow. 5.7 Insurance. Chin shall cause its policies of insurance for the Property (other than those elected to be assumed by City pursuant to Subsection 3.1(a) above and then only to the extent each such contract is assignable to City) to be terminated effective as of December 17, 2020 and City shall obtain its own insurance. All premiums and fees related to any policy of insurance assigned to City shall be prorated and that portion attributed to the period following December 16, 2020 shall be credited to Chin. 5.9 Possession. Subject to the rights of tenants in possession, City shall be entitled to possession of the Property as of December 17, 2020, pursuant to the Judgment. . . . . 6.1 Warranties and Representations by Chin. . . . . (d) Chin shall indemnify City against and hold City harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys’ fees, which City may reasonably incur or sustain either prior to or following the Closing Date by reason of or in connection with . . . (iii) the existence on the Property, as of December 17, 2020, of any Hazardous Materials or Substances (as defined above) placed on the Property by Chin or Chin’s employees, agents, or representatives, . . . . 6.2 City to Indemnify Chin and Hold Chin Harmless. City shall indemnify Chin against and hold Chin harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys’ fees, which Chin may reasonably incur or sustain either prior to or following the Closing Date by reason of or in connection with . . . (ii) the existence on the Addendum to and Amendement of Settlement Agreement and Escrow Instructions Page 7 of 8 Property, after December 16, 2020, of any Hazardous Materials or Substances . . . . . . . . 3. Escrow Holder Not Required to Hold Released Funds. Escrow Holder shall not be required to comply with the provision of section 2.10 of the Settlement Agreement providing for Escrow Holder to send the Certified Judgment to the State Treasurer with a request for distribution of funds in the amount of $6,125,000 or to hold such funds as a condition to Close of Escrow. 4. Remainder of Settlement Agreement Unchanged. Except for the amendments set forth herein, and except as necessary to effectuate the amendments set forth herein, each of the terms of the Settlement Agreement shall remain unchanged. 5. Counterparts. This Addendum may be signed by the parties in different counterparts and the signature pages combined to create a document binding on all parties. IN WITNESS WHEREOF, City and Chin have executed this Addendum as of the date first above written. Date: CHIN FAMILY PROPERTIES LIMITED PARTNERSHIP, a California limited partnership By: DUNE PALMS MOBILE ESTATES, LLC, its General Partner THE CHIN FAMILY SURVIVOR’S TRUST UNDER AGREEMENT DATED JUNE 7, 1974, Sole Manager of the General Partner By: ___________________________ PAMELA G. CHIN, Co-Trustee By: ___________________________ RANDAL R. CHIN, Co-Trustee [Signatures continue next page]