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• <br /> with the conveyance of the Property to City. City shall pay the cost of any policy of title <br /> insurance City elects to purchase in connection with the transactions contemplated hereby. <br /> 4. AS -IS Conveyance. City acknowledges and agrees that: (i) prior to the Closing <br /> Date, in City's discretion, City shall inspect the Property and examine the legal, environmental, <br /> • <br /> zoning, land use, seismic, title, survey and physical characteristics and condition of the <br /> Property; (ii) by acquiring the Property, City shall be deemed to have approved of all such <br /> characteristics and conditions; (iii) the Property is to be conveyed to, and accepted by City in its <br /> present condition, "AS IS ", "WHERE IS" AND WITH ALL FAULTS, and no patent or latent <br /> defect or deficiency in the condition of the Property whether or not known or discovered, shall <br /> affect the rights of either Agency or City hereunder. <br /> • <br /> 5. Agency's Covenants. Agency covenants that from the Effective Date and <br /> through the Closing Date, Agency: (1) shall not permit any liens, encumbrances, or easements to <br /> be placed on the Property without the consent of City; (ii) shall not enter into any agreement <br /> regarding the sale, rental, management, repair, improvement, or any other matter affecting the <br /> Property that would be binding on City or the Property after the Closing Date without the prior <br /> written consent of City; (iii) shall not permit any act of waste or act that would tend to diminish <br /> the value of the Property for any reason, except that caused by ordinary wear and tear; and (iv) <br /> shall maintain the Property in its condition as of the Effective Date, ordinary wear and tear <br /> excepted, and shall manage the Property substantially in accordance with Agency's established <br /> practices. <br /> 6. Damage and Destruction. In the event of any damage or other loss to the <br /> Property, or any portion thereof, caused by fire, flood or other casualty prior to the Closing Date <br /> in an amount not exceeding $50,000, City shall not be entitled to terminate this Agreement, but <br /> shall be obligated to acquire the Property as provided in this Agreement, provided that Agency <br /> shall: (i) assign and transfer to City all of Agency's rights under any insurance policy covering <br /> the damage or loss, and all claims for monies payable from Agency's insurer(s) in connection <br /> with the damage or loss, and (ii) pay to City on the Closing Date the amount of Agency's <br /> deductible under the insurance policy or policies covering the damage or loss. In the event of <br /> damage or destruction of the Property or any portion thereof prior to the Closing Date in an <br /> amount in excess of $50,000, City may elect either to terminate this Agreement upon written <br /> notice to Agency, or to consummate the acquisition of the Property, in which case Agency shall <br /> (i) assign and transfer to City all of Agency's rights under any insurance policy covering the <br /> damage or loss, and all claims for monies payable from Agency's insurer(s) in connection with <br /> the damage or loss, and (ii) pay to City on the Closing Date the amount of Agency's deductible <br /> under the insurance policy or policies covering the damage or loss. if City elects to terminate <br /> this Agreement, all funds and documents deposited into escrow by or on behalf of City shall be <br /> returned to City, and all rights and obligations hereunder shall terminate. <br /> 7. Condemnation. If prior to Close of Escrow, a material portion of the Property is <br /> taken by eminent domain (or an action of eminent domain has been commenced against all or <br /> any portion of the Property) (excluding for purposes of this Section, the exercise of any eminent <br /> domain powers by the City), upon Agency's receipt of notice thereof Agency shall promptly <br /> notify City of such fact, and City shall have the option to terminate this Agreement upon notice <br /> 1604875.2 3 <br />