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78 Page 3 All tenants and occupants, other than SIAC, are required to vacate the Property before the closing of the purchase and sale. Conditions on Prooertv: The Property is currently used for industrial purposes. Further investigations regarding the types of prior uses and potential presence of hazardous materials will be undertaken during the Feasibility Period. CEMEX is required to deliver possession of the Property in the condition required by the tenants' leases and free of waste, debris and the tenants' personal property. Subject to CEMEX's express obligations under the Agreement, the Property will be sold in its "as is" condition. Please see "Attachment No.2" to the staff report for more detailed summary of the Agreement. Amendment No.1 to the Professional Services Agreement with Sares Regis Group In November 2008, the City Manager retained Sares Regis Group to provide professional services required to affect the purchase of the Property. The initial agreement is in the amount of $20,000, and was executed under the approval authority of the City Manager. The original scope of work was to provide the City with initial professional services of a real estate developer to scope, schedule, and coordinate the due diligence process in relation to the acquisition of the Property. To date, approximately $12,000 has been expended. The Consultant has the required experience in providing these services, and has served the City very competently up to this juncture. The City now requires rapid completion of the full due diligence work plan. Amendment No.1 will not exceed a total of $160,000.00. There are three phases of the due diligence process. The first phase has been completed, which included the environmental report - phase 1, and appraisal. Phase 2 will include the completion of the environmental report, architectural test fits, civil engineering, legal and contingency costs. Please see attached Exhibit "AtI to the Agreement Amendment NO.1 for more detailed information. Brokerage Fee Agreement with NAI BT Commercial Real Estate During the price negotiations with CEMEX, the City Manager determined that it was in the City's best interests to pay the brokerage fee directly to the local broker who has been involved in the transaction for some time. The amount for the brokerage services will be based on 4.50/0 of the sale price, and payable only upon successful closing of the transaction. Inter-Fund Loan Agreement The City's Capital Outlay Fund has $2,500,000 of unappropriated fund balance that may be applied to the purchase of the CEMEX property which is expected to cost the city a total of $5,000,000. For a more detailed budget, please see Attachment No.5. The