Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Beach Promenade, LLC - 2011-05-16 (2)
ncR i CITY O _ O AD Interdepartmental Memo TO: Honorable Mayor and Members f the City Council VIA: Fred A. Wilson, City Administr FROM: Bob Hall, Deputy City Manager Stanley Smalewitz, Director of Economic Development DATE: May 16, 2011 SUBJECT: Late Communication — Consent Calendar- Item #6- Approve and authorize execution of a Subordination Agreement with Beach Promenade, LLC for the Beach Atlanta Frontage Project. Based upon additional discussions, Beach Promenade, LLC and Farmers and Merchants Bank, have agreed to maintain the City's Deed of Trust first in line to the Farmers and Merchants trust deed. The Subordination Agreement, on tonight's Agenda was requesting the approval to move the City's Deed of Trust into second place. Retaining the current first in line is preferred. With the new decision from Farmers and Merchants Bank, there is now no need for the requested Subordination Agreement. Staff is requesting that this item be removed from tonight's City Council Agenda. Meeting oMe Late Communication 5 16 11 rev. 2 -1- 6/1/2009 P&-/� L.19-72' 0)/W/-�7 Gc)1C,4-7701J — ^✓U 4.77aA-) 774� Council/Agency Meeting Held:_ Deferred/Continued to: ❑ Approved ❑ Conditionally Approved ❑ Denied City Clerk's Signature Council Meeting Date: May 16, 2011 Department ID Number: ED 11-23 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Bob Hall, Deputy City Manager SUBJECT: Approve and authorize execution of a Subordination Agreement with Beach Promenade, LLC for the Beach Atlanta Frontage Road project Statement of Issue: The City Council is asked to approve the Subordination Agreement with Beach Promenade, LLC, a California limited liability company, in regards to the property that was recently purchased and commonly referred to as the Beach Atlanta Frontage Road. Financial Impact: This project will yield $1,200,000 over a maximum of ten (10) years to the General Fund, Account Number 10000100.48135. Minimum payments will be $50,000 per year plus interest and a sum of $300,000 per each Certificate of Occupancy that is issued until paid in full. Recommended Action: Motion to: A) Authorize the City Manager and the City Clerk to execute a "Subordination Agreement" between the City and Beach Promenade, LLC that has been approved to form by the City Attorney and substantially the same terms as Attachment 1; and B) Authorize the City Manager or his designee to execute any other related documents to the Subordination Agreement. Alternative Action(s): Do not approve the Subordination Agreement and direct staff accordingly. B- - Item 6.-1 REQUEST FOR COUNCIL ACTION MEETING DATE: 5/16/2011 DEPARTMENT ID NUMBER: ED 11-23 Analysis: On December 6, 2010, the City Council approved the City's sale of the 2.07 acre parcel located at the southeast corner of Beach Boulevard and Atlanta Avenue commonly referred to as the Frontage Road ("Site") to Beach Promenade, LLC. This site was formerly a frontage road and used for street and highway purposes. Escrow on this property closed on April 7, 2011. Pursuant to the approved Purchase Agreement between the City and Beach Promenade, LLC ("Owner"), it was previously agreed that the City would subordinate to construction financing for the project. This Subordination Agreement is an agreement in which the City is agreeing to subordinate its secured interest in Parcels 2 and 4 of Parcel Map No. 2009-122 in favor of the construction financing. The Owner is about to execute a deed of trust and note in the sum of $9,500,000 in favor of Farmers and Merchants Bank. If the City approves the Subordination Agreement, the Owner's loan would be superior to the City's $1,200,000 Deed of Trust (see attached). The Owner's note amount is comprised of over $6 million for direct and indirect construction costs, plus approximately $2.5 million for the conversion of the existing loans on the property to a construction loan. The Owner's note also includes a set -aside of over $1 million, which includes $350,000 for the City's initial payments, as well as a set -aside for interest reserve as required by Farmers and Merchants Bank. Staff is seeking City Council approval for the Subordination Agreement with Beach Promenade, LLC. Environmental Status: The proposed project is categorically exempt pursuant to Class V: Alterations in Land Use Limitations, sub -section (a) minor street, alley and utility easement vacations, or Resolution No. 4501 of the City of Huntington Beach. Strategic Plan Goal: Enhance Economic Development Attachment(s): Item 6. - 2 H -4 -- ATTACHMENT HB -49- Item 6. - 3 RECORDING REQUESTED BY: V4WN RECORDED, IMAIL TO: TITLE ORDER NO.: 3738961 ESCROW NO.: 1004757-LV APN.: THIS SPACE FOR RECORDER'S USE ONLY SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS AGREEMENT, made April 26, 2011 by BEACH PROMENADE LLC, a California limited liability company, owner of the land hereinafter described and hereinafter referred to as "Owner," and THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, present owner and holder of the Deed of Trust and Note first hereinafter described and hereinafter referred to as 'Beneficiary"; WITNESSETH THAT WHEREAS, BEACH PROMENADE LLC, a California limited liability company did execute a Deed of Trust, dated April 7, 2011, to FIRST AMERICAN TITLE COMPANY, as Trustee, covering: all that real property situated in the City of Huntington Beach, County of Orange, State of CA, described as: PARCELS 2 AND 4 OF PARCEL MAP NO. 2009-122, IN THE CITY HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 371, PAGES 17 THROUGH 20 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. To secure a Note in the sum of $1,200,000.00, dated April 7, 2011, in favor of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, which Deed of Trust was recorded on April 7, 2011 as Instrument No. 2011000178041, Official Records of said County; and WHEREAS, Owner has executed, or is about to execute, a Deed of Trust and Note in the sum of $9,500,000.00, in favor of FARMERS & MERCHANTS BANK OF LONG BEACH, a California corporation, hereinafter referred to as "Lender," payable with interest and upon the terms and conditions described therein, which Deed of Trust is to be recorded concurrently herewith; and WHEREAS, it is a condition precedent to obtaining said loan that said Deed of Trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land hereinbefore described, prior and superior to the lien or charge of the Deed of Trust first above mentioned; and WHEREAS, Lender is willing to make said loan provided the Deed of Trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the Deed of Trust first above mentioned and provided that Beneficiary will specifically and unconditionally subordinate the lien or charge of the Deed of Trust first above mentioned to the lien or charge of the Deed of Trust in favor of Lender; and WHEREAS, it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Beneficiary is willing that the Deed of Trust securing the same shall, when recorded, constitute a lien or -charge upon said land which is unconditionally prior and superior to the lien or charge of the Deed of Trust first above mentioned. Item 6. - 4 HB -5- NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and agreed as follows: (1) That said Deed of Trust securing said Note in favor of Lender, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the Deed of Trust above mentioned. (2) That Lender would not make its loan above described without this Subordination Agreement. (3) That this Agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the Deed of Trust first above mentioned to the lien or charge of the Deed of Trust in favor of Lender above referred to and shall supersede and cancel, but only insofar as would affect the priority between the Deeds of Trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited, those provisions, if any, contained in the Deed of Trust first above mentioned, which provide for the subordination of the lien or charge thereof to another Deed or Deeds of Trust or to another mortgage or mortgages. Beneficiary declares, agrees and acknowledges that (a) He consents to and approves (i) all provisions of the Note and Deed of Trust in favor of Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; (c) He intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the Deed of Trust first above mentioned in favor of the lien or charge upon said land of the Deed of Trust in favor of Lender above referred to and understands that in reliance upon, and in consideration of, this waiver, relinquishment and subordination, specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquishment and subordination; and (d) An endorsement has been placed upon the Note secured by the Deed of Trust first above mentioned that said Deed of Trust has by this instrument been subordinated to the lien or charge of the Deed of Trust in favor of Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. HB -51- Item 6. - 5 n o Dated: April 26, 2011 STATE OF CALIFORNIA } COUNTY OF 1 On , before me, BENEFICIARY: THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California personally appeared who proved to me on the basis of satisfactory evidence to be the By: - person(s) whose name(s) is/are subscribed to the within instrument Its: 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 By: of which the person(s) acted, executed the instrument. Its: I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA}_) COUNTY OF I On , before me, personally appeared who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature OWNER: BEACH PROMENADE LLC, a California limited liability company By: Bijan Sassounian, Its: Brian Sassounian, Its: Item 6. - 6 H -- ATTACHMENT #2 HB -53- Item 6. - 7 THIRD PARTY ESCROW INSTRUCTIONS FOR USE OF SUBORDINATION AGREEMENT To: Farmers and Merchants Bank Escrow No.: 1004757LV Date: April 13, 2011 The undersigned hands you herewith a Subordination Agreement by and between BEACH PROMENADE LLC, a California limited liability company and THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California, covering property described in the above numbered escrow, which you are authorized and instructed to use WITHOUT CONSIDERATION TO THE UNDERSIGNED, and said party is to be. at no expense therein. ALL PARTIES HERETO HAVE BEEN ADVISED TO SEEK THE ADVICE OF THEIR TAX CONSULTANT REGARDING THIS SUBORDINATION AGREEMENT, AND ESCROW HOLDER IS HEREBY RELEASED FROM ALL LIABILITY THAT IT MAY INCUR OR SUSTAIN, INCLUDING ATTORNEY' S FEES, DUE TO THE RECORDING OF THIS SUBORDINATION AGREEMENT THROUGH ESCROW. THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By: Its: By: _ Its: The foregoing instructions are approved by the undersigned and I agree to pay the costs incurred by escrow in complying with these instructions. BEACH PROMENADE LLC, a California limited liability company IZ Bijan Sassounian, Its: By: Brian Sassounian, Its: Item 6. - 8 HB -5 - ATTACHMENT r ,_ HB -- Item 6. - 9 PURCHASE AGREEMENT By And Among THE CITY OF HUNTINGTON BEACH, a municipal corporation, and BEACH PROMENADE LLC, a California Limited Liability Company Item 6. - 10 H -- LIST OF EXHIBITS EXHIBIT NO. 1 - LEGAL DESCRIPTION EXHIBIT NO.2 - SITE MAP EXHIBIT NO. 3 - METHOD OF FINANCING EXHIBIT NO.4 - SCHEDULE OF PERFORMANCE EXHIBIT NO.5 - SCOPE OF DEVELOPMENT EXHIBIT NO.6 - RESERVED EXHIBIT NO. 7 - GRANT DEED EXHIBIT NO. 8 - BUYER NOTE EXHIBIT NO.9 - CITY DEED OF TRUST EXHIBIT NO. 10 - ENVIRONMENTAL INDEMNITY EXHIBIT NO. I I - UCC1 FINANCING STATEMENT EXHIBIT NO. 12 CONDITION OF PROPERTY (§307.1) EXHIBIT NO. 13 ASSIGNMENT OF AGREEMENTS (§411.2) EXHIBIT NO. 14 FIRPTA CERTIFICATE (§305(3)(c) EXHIBIT NO. 15 PARCEL MAP n B -57- Item 6. - 11 AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY ("Purchase Agreement") is entered into,&g i*&--R 06 , (the "Effective Date") by and between THE CITY OF HUNTINGTON BEACH, a California municipal corporation, ("City") and BEACH PROMENADE LLC, a California limited liability company ("Buyer"). City and Buyer (collectively, the "Parties") hereby agree as follows: RECITALS A. CITY is the owner of a 2.07-acre parcel located at the southeast corner of Beach Boulevard and Atlanta Avenue in Huntington Beach, California, commonly referred to as the Frontage Road, and more particularly described in the legal description attached hereto as Exhibit 1 and incorporated by this reference as though fully set forth herein (the "Property"). B. Buyer owns five parcels of land totaling 3.79 acres within the Beach Promenade Shopping Center adjacent to the Property (the "Site"). The Site is depicted in the map attached hereto as Exhibit 2, and incorporated by this reference as though fully set forth herein. Buyer also owns a strip of land located between Beach Boulevard and the Property (the "Median"). The Median is also depicted on Exhibit 2. Buyer desires to acquire the Property incorporate it within a reconfiguration of the Site consistent with the goals and objectives of the City's General Plan. City desires to convey fee simple absolute title in the Property to Buyer in accordance with this Agreement. The purpose of this agreement is to promote the reconfiguration of the Site by providing for the conveyance of the Property to Buyer; the City's financing of Buyer's acquisition of the Property in the amount of One Million Two Hundred Thousand Dollars ($1,200,000.00) (the "Property Purchase Price"), as evidenced by the Buyer Note and secured by the City Deed of Trust; consolidation and reconfiguration of the Property, the Median and the Site to create new retail pads and buildings; installation of improvements to the public street adjacent to the Site, and other improvements to the infrastructure, landscaping and parking within the reconfigured Site. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: ARTICLE 1: DEFINITIONS For purposes of this Agreement, the following capitalized terms shall have the following meanings: The term "Buyer" shall mean BEACH PROMENADE LLC, a California limited liability company, whose address is 21190 Beach Boulevard, Huntington Beach, CA 92648, and any permitted assignee or nominee. G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft ba 2011 -01-11 Item 6. - 12 HB -- The term `Buyer Documents" shall mean this Agreement, the Buyer Note, the City Deed of Trust, and the UCCI Financing Statement. The term "Buyer Note" shall mean the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust, substantially in the form attached hereto as Exhibit 8, and incorporated by this reference as though fully set forth herein. The term "City" shall mean the City of Huntington Beach, a California municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to, the rights, powers, and responsibilities of City. The term "City Administrator" shall mean the individual duly appointed to the position of City Administrator of City. Subject to the terms of Sections 404, 504 and 606, whenever an administrative action is required by City to implement the terms of this Agreement, the City Administrator shall have authority to act on behalf of City, except with respect to matters reserved under California law wholly for determination by the City's governing body. The term "City Deed of Trust" shall mean the Deed of Trust with Assignment of Rents substantially in the form attached hereto as Exhibit 9, and incorporated by this reference as though fully set forth herein, in which Buyer is the Trustor and City is the Beneficiary, which secures the Buyer Note. The term "Close of Escrow" shall mean the date that all Conditions for Escrow have been fulfilled. The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date" shall mean the date the City Council of the City of Huntington Beach approves this Agreement and authorizes its execution; which date shall be inserted into the preamble of this Agreement. The term "Environmental Indemnity" shall mean the indemnity by Buyer, substantially in the form attached hereto as Exhibit 10, and incorporated by this reference as though fully set forth herein. The term "Escrow" shall mean that certain escrow opened with First American Title Insurance Company, the Escrow Agent, established for the conveyance of the Property from City to Buyer and other actions that the Escrow Agent may be authorized to perform pursuant to the terms of this Agreement. The term "Escrow Agent" shall mean First American Title Insurance Company.. The term "Force Majeure" or "Force Majeure Event" shall mean the following events, provided that they actually delay and interfere with the timely performance of the matter to 2 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 20I I-01-11 HB - - Item 6. - 13 which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference: war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any governmental agency other than City; the imposition of any applicable moratorium by a governmental agency other than City; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. The term "Force Majeure Delay" shall mean any delay in taking any action required by this Agreement, proximately caused by the occurrence of any Force Majeure Event. The term "Governmental Approvals" shall mean and include any and all general plan amendments, zoning approvals or changes, required approvals and certifications under the California Environmental Quality Act, tentative and final tract maps, parcel map(s), lot line adjustments, variances, conditional use permits, demolition permits, encroachment permits, excavation/foundation permits, grading permits, building permits, inspection reports and approvals, certificates of occupancy, and other approvals, permits, certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature whatsoever required from City and any governmental entity in order to commence and complete the Project. The term "Grant Deed" shall mean that certain Grant Deed conveying the Property from the City to Buyer, substantially in the form attached hereto as Exhibit 7, and incorporated by this reference as though fully set forth herein. The term "Hazardous Substances" shall have the meaning set forth in Section 412 and the Environmental Indemnity. The term "Improvements" shall mean the onsite and offsite private and public site, utilities, sidewalk, paving, landscaping, lighting, building and signage improvements to the Site, Median and Property, as constructed in accordance with this Agreement, including but not limited to the Scope of Development. The term "Median" shall mean the real property described as Assessor Parcel No. 148- 021-24, as depicted on the map attached hereto as Exhibit 2. G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 14 H -- The term "Method of Financing" shall mean the Method of Financing attached hereto as Exhibit 3, and incorporated by this reference as though fully set forth herein. The term "Parcel Map" shall mean the map by which the Property, Median and portions of the Site are to be consolidated and re -subdivided to create legal building parcels for the Project, substantially in the form attached hereto as Exhibit 15, and incorporated by this reference as though fully set forth herein. The term "Permitted Transfer" shall mean any Transfer that is approved by the City or expressly permitted by the terms of this Agreement. The term "Plans" shall include, but not be limited to, any and all architectural, engineering, utility, landscape, and construction plans and drawings prepared on behalf of Buyer for the Project in accordance with this Agreement. The term "Project' shall mean the consolidation and subdivision of the Property, the Median, and a portion of the Site and development of new retail pads and buildings and the installation of the Improvements„ more particularly described in the Scope of Development. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit 4, and incorporated by this reference as though fully set forth herein, setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development' shall mean the anticipated scope of development for the Project as set forth in the document attached hereto as Exhibit 5, and incorporated by this reference as though fully set forth herein. The term "Site" shall mean that real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as the Beach Promenade Shopping Center and described as Assessor Parcels Nos. 142-021-12, 14, 15, 17, 18 and 19, as depicted on Exhibit 2. The term "Subordination Agreement' shall mean that agreement by which the City agrees to subordinate its secured interest in Parcels 2 and 4 of the Parcel Map in favor of the construction financing. The term "Transfer" shall mean: (i) the assignment or attempted assignment of this Agreement or any right herein or the sale, agreement to sell, transfer or conveyance of the Property or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment sale contract or similar instrument affecting all or a portion of the Property, except as provided in subparagraph (iii), below. G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 HB -61- . Item 6. - 15 (ii) "Transfer" shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Buyer, or any conversion of Buyer to an entity form other than that of Buyer at the time of execution of this Agreement. (iii) Notwithstanding paragraphs (i) and (ii), "Transfer" shall not include any of the following, which shall constitute Permitted Transfers: (a) The leasing for occupancy of all or any part of the Site. (b) The granting of easements or rights of way to facilitate the development of the Project. (c) Provided that Bijan Sassounian remains as managing member of Buyer, a transfer of ownership of Buyer between Bijan Sassounian and any immediate family member or entity of which Bijan Sassounian is an owner. (d) A transfer of ownership for any parcel after the City Deed of Trust recorded on such parcel has been released. The term "UCCI Financing Statement" shall mean a document substantially in the form attached hereto as Exhibit 11, and incorporated by this reference as though fully set forth herein. ARTICLE 2: SUBJECT OF THIS AGREEMENT Section 201: Purpose of Agreement 1. The purpose of this Agreement is to implement the City's General Plan to promote development of the Property, Median and Site by providing for the conveyance of the Property from City to Buyer; Buyer's consolidation and resubdivision of the Property, Median and portion of the Site; development of additional retail parcels, buildings, parking areas and infrastructure improvements to the Site. The Project and the fulfillment generally of this Agreement are in the best interests of City and Buyer and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements under which the Project has been undertaken. Section 202: Prohibition Against Transfers 1. The qualifications and identity of Buyer are of particular concern to City. It is because of those qualifications and identity that City has entered into this Agreement with Buyer. No voluntary or involuntary successor in interest of Buyer shall acquire any rights or powers under this Agreement except as expressly set forth herein. 2. Except for the Permitted Transfers set forth in this Agreement's definition of the term "Transfer," which are exempt from the provisions of this paragraph (b), Buyer shall not assign all or any part of this Agreement nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, without the prior written approval of the G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 16 HB - - City, which approval may be withheld in City's reasonable discretion. Any proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by City, to fulfill the obligations undertaken in this Agreement by Buyer. Any such proposed transferee, by instrument in writing satisfactory to City and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of City shall expressly assume all of the obligations of Buyer under this Agreement and agree to be subject to all conditions and restrictions applicable to Buyer in this Agreement. There shall be submitted to City for review all instruments and other legal documents proposed to affect any such Transfer, and if approved by the City, its approval shall be indicated to Buyer in writing. Buyer agrees to reimburse City for its reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested Transfer that requires City's approval hereunder, in an amount not to exceed Five Thousand Dollars ($5,000.00) for each such Transfer (which amount shall be adjusted by the escalation in the Consumer Price Index measured from the Effective Date of this Agreement to the date of Buyer's request for approval of the Transfer). 3. For the reasons cited above, Buyer represents and agrees for itself and any successor in interest that, except for the Permitted Transfers set forth in this Agreement's definition of the term "Transfer," without the prior written approval of the City, there shall be no cumulative change in ownership interest of any general partner of Buyer of greater than 49%, or with respect to the identity of the parties in control of Buyer or the degree thereof, by any method or means. 4. Buyer shall promptly notify City of any and all changes whatsoever in the identity of the parties in control of Buyer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by City and City may exercise any and all available remedies, if there is any significant change (voluntary or involuntary) in membership, management or control, of Buyer (other than (i) the Permitted Transfers set forth in this Agreement's definition of the term "Transfer", (ii) Transfers approved in writing by City pursuant to this Agreement, and (iii) changes occasioned by the death or incapacity of any individual. 5. A Transfer approved by the City shall be deemed to relieve Buyer from its continuing obligations under this Agreement only if the approved transferee expressly assumes all of the obligations of Buyer under this Agreement and agrees to be subject to all conditions and restrictions applicable to Buyer in this Agreement. Notwithstanding the foregoing, no Transfer, approved or otherwise, shall operate to relieve Buyer of its indemnification obligations related to Buyer's ownership and operation of the Project. 6. Consent to one Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. ARTICLE 3: BUYER'S ACQUISITION OF THE PROPERTY Section 301: Ownership of the Property As of the Effective Date of this Agreement, fee title to the Property is held by City. G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 H -- Item 6. - 17 Section 302: City's Agreement to Sell and Buyer's Agreement to Purchase 1. City agrees to sell and convey fee title to the Property and Buyer agrees to accept title to the Property from City. 2. Buyer shall pay as the purchase price for the Property the amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00) (the "Property Purchase Price"). Property Purchase Price will be paid by Buyer to City as set forth in the Buyer Documents and the Method of Financing and through the execution of the Buyer Note in the original principal amount of the Property Purchase Price, substantially in the same form as Exhibit 8. The Buyer Note will be secured by a deed of trust to be recorded against Parcels 2 and 4 of the Parcel Map, substantially in the form of the deed of trust attached hereto as Exhibit 9. 3. Subject to any mutually agreed upon extension of time, City shall convey title to the Property to Buyer upon Close of Escrow (so long as all conditions precedent have been satisfied), or such later date mutually agreed to in writing by City and Buyer and communicated in writing to the Escrow Agent. 4. City shall convey to Buyer title to the Property in the condition provided in paragraph (5) below by grant deed, substantially in the form attached hereto as Exhibit 7. 5. Subject to the terms and conditions of this Agreement, City shall convey to Buyer fee simple merchantable title to the Property free and clear of all liens, encumbrances, assessments, easements, leases and taxes, except those which have been approved by Buyer as provided in Section 304. Title to the Property shall be conveyed to Buyer free of any possession or right of possession except to the extent waived by Buyer in writing. 6. Buyer acknowledges and agrees that, except as expressly set forth in this Agreement, City makes no representations and warranties, express or implied, as to the Property. It is understood and agreed that with respect to the physical condition of the Property, such property is being sold and conveyed hereunder and, upon tender of conveyance, Buyer agrees to accept the Property "as is," "where is" and "with all faults" and subject to any condition which may exist, without any representation or warranty by City except as expressly set forth in this Agreement. Other than the representations and warranties set forth in this Agreement, Buyer hereby expressly acknowledges and agrees that Buyer is relying solely upon its inspections, examination, and evaluation of the Property in purchasing the Property on an "as is," "where is" and "with all faults" basis. Section 303: Buyer's Due Diligence 1. Delivery of Title Report. Within thirty (30) days of the execution of this Agreement, the Buyer shall be provided, at City's expense, with a Preliminary Title Report on the Property. 2. Approval Period. From the date of delivery of the Preliminary Title Report until ninety (90) calendar days thereafter (the "Approval Period"), Buyer shall review and approve the 7 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 18 HB - 4- Preliminary Title Report, the Conditions of Property, and review and investigate the physical and environmental condition of the Property and any other factors or matters relevant to Buyer's decision to purchase the Property (collectively, the "Buyer's Due Diligence"). If the Property is not acceptable for any reason whatsoever, Buyer shall have the right, by giving written notice to City on or before the last day of the Approval Period, to terminate this Agreement. If Buyer does not deliver written notice terminating this Agreement to City on or before the last day of the Approval Period, Buyer shall be deemed to have approved the Property and this Agreement shall continue in full force and effect. Section 304: Conditions to Close of Escrow 1. City's Conditions to Close of Escrow. City, at its election, shall not be obligated to close escrow if (i) Buyer is in material default of this Agreement; (ii) any of Buyer's representations and warranties contained herein shall be proven materially untrue; (iii) Buyer shall not have deposited Buyer's share of costs described in Section 305(7) herein with Escrow Agent; or (iv) Buyer shall not have deposited with Escrow Agent any document reasonably required of it by Escrow Agent to close the Escrow. 2. Buyer's Conditions to Close of Escrow. Buyer, at its election, shall not be obligated to close escrow if: (i) City is in material default of this Agreement; (ii) any of City's representations and warranties contained herein shall be proven materially untrue; (iii) if, after review of a preliminary title report issued by Title Company (as hereinafter defined) (the "Title Report"), Buyer determines that the condition of title is not as represented herein by City, or First American Title Insurance Company ("Title Company"), upon payment of its regularly scheduled premium, has not agreed to issue a Standard Title Insurance Policy ("Title Policy") for the Property upon the Close of Escrow, in the amount of the Property Purchase Price showing title to the Property vested of record in the name of Buyer in fee simple subject only to such exceptions as approved by Buyer in writing; (iv) Buyer does not approve the condition of the Property after performing Buyer's Due Diligence (as hereinafter defined); (v) City has not executed and delivered to Escrow the Grant Deed, or any other document reasonably required of it by Escrow Agent to close escrow, or (vi) all Government Approvals required for development of the Project in substantial conformance with the Scope of Development have not been obtained, including the expiration of any legal challenge period for any of the Government Approvals 3. Termination. In the event each of the conditions set forth in Section 304(2) is not fulfilled within the time provided in Section 302(3) or waived in writing by Buyer prior to the date scheduled for the Close of Escrow, Buyer may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder, and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer and all deposit documents delivered by City to Buyer or Escrow Agent returned to City shall be returned to Buyer. In the event that each of the conditions set forth in Section 304(1) are not fulfilled or waived in writing by City prior to the date scheduled for the Close of Escrow, City may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder, and all documents delivered by City to Buyer or Escrow Agent shall be returned immediately to City and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer. No demand for termination shall be recognized until G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 HB- - Item 6. - 19 10 days after the Escrow Agent (or the party making such demand) shall have mailed copies of such demand to the other party or parties at the addresses set forth in Article I of this Agreement and in the manner set forth in Section 703 of this Agreement for notices between the parties hereto. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the 10-day period, in which event the Escrow Agent is authorized to hold all money, papers, and documents with respect to the escrow until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible. Section 305: Escrow 1. Opening of Escrow. City and Buyer agree to open an escrow with the Escrow Agent for City's conveyance to Buyer of title to the Property. This Section 305 shall constitute the joint escrow instructions of City and Buyer, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. The Escrow Agent to whom these instructions are delivered is hereby authorized and instructed to act under this Agreement. The Parties hereto agree to use commercially reasonable best efforts to do all acts necessary to close this Escrow in the shortest possible time. City and Buyer shall provide such additional escrow instructions consistent with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to City and Buyer within five (5) days after opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder. 2. Escrow Agent Authorization. The Escrow Agent is authorized to, and shall: (a) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (b) Pay and charge Buyer for any escrow fees, charges, and costs payable under this Agreement; (c) Disburse funds, deliver, and record the Grant Deed when Buyer and City have fulfilled conditions of this Escrow; and (d) Do such other actions as necessary, including obtaining the policy of title insurance, to fulfill its obligations under this Agreement. 3. Close of Escrow Obligations of Cily. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow (unless indicated otherwise), City shall deliver to Escrow Agent (unless indicated to be delivered directly to Buyer) the following documents and other items: City; (a) The Grant Deed duly executed and acknowledged (where appropriate) by (b) The City Deed of Trust duly executed and acknowledged by City; G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 20 H -66- (c) A certification ("FIRPTA Certificate") duly executed by each party comprising City under penalty of perjury in substantially the form of Exhibit 14, setting forth City's addresses and social security numbers, and certifying that none of the parties comprising City is a "foreign person" for purposes of Section 1445 (as may be amended) of the Internal Revenue Code of 1986, as amended, and any regulation promulgated thereunder and City is a resident taxpayer in the State of California for purposes of Revenue and Taxation Code Sections 18805 and 26131. (d) Two (2) duplicate original copies of the Close of Escrow Statement duly executed by City; (e) Any other documents, instruments, funds and records required to be delivered to Buyer under the terms of this Agreement which have not been previously delivered or are otherwise required by Escrow Agent or title Company in order to close Escrow., 4. Close of Escrow Obligations of Buyer. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deliver to Escrow Agent copies of the following documents and other items: (a) One (1) original of the City Deed of Trust duly executed by Buyer; (b) One (1) original of the Buyer Note duly executed by Buyer; (c) Two (2) duplicate original copies of the Environmental Indemnity Agreement, duly executed by Buyer; (d) Two (2) duplicate original copies of the Close of Escrow Statement duly executed by Buyer; (e) Evidence of the existence, organization and authority of Buyer and of the authority of persons executing documents on behalf of Buyer reasonably satisfactory to the Escrow Agent and the Title Company; and (f) Any other documents, instruments or funds required to be delivered by Buyer under the terms of this Agreement or are otherwise required by Escrow Agent or Title Company in order to close Escrow which have not previously been delivered. Procedure. Escrow Agent shall close Escrow for the Property as follows: (a) Record the Grant Deed, the Parcel Map, and the City Deed of Trust with the Recorder of Orange County, California; (b) Forward all Deposits paid by Buyer to City reduced by appropriate charges against City hereunder; G:PDA2009drafts: Beach-Atlanta00 PSADraft 6a2011-01-11 10 HB -7- Item 6. - 21 (c) Deliver the FIRPTA Certificates to Buyer; (d) Instruct the Title Company to deliver the Title Policy to Buyer; (e) Forward to both Buyer and City a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date endorsed thereon. (f) The Escrow Agent is authorized to, and shall: (1) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (2) Pay and charge Buyer for any escrow fees, charges, and costs payable when Buyer and City have fulfilled conditions of this Escrow. (3) Do such other actions as necessary, including obtaining the policy of title insurance, to fulfill its obligations under this Agreement. 6. Delivery of Documents by Escrow Agent. Escrow Agent shall deliver a conformed copy of the Grant Deed and the City Deed of Trust, to Buyer after recordation thereof and Escrow Agent shall only deliver to Buyer one duplicate original of the documents submitted as duplicate originals. Escrow Agent shall deliver to the Seller one duplicate original of all of the items listed above on the Close of Escrow and a conformed copy of the Grant Deed, and the City Deed of Trust, after recordation thereof. Escrow Agent shall deliver to the Seller and the Buyer a conformed copy of the UCCI Financing Statement showing the filing number. 7. Close of Escrow Costs. (a) City shall pay the cost of premiums for a Standard Title Insurance Policy for Buyer and no other escrow fees which may be charged by Escrow Agent in connection with the closing of this transaction. (b) Buyer shall pay all other costs, fees and charges relating to the conveyance of the Property from City to Buyer set forth in the Close of Escrow Statement approved by City and Buyer. 8. Tax Adjustment Procedure. Escrow Agent is authorized and is instructed to comply with the following: (a) Pay and charge City for any unpaid delinquent taxes and/or penalties and interest thereon, and for any delinquent or non -delinquent assessments or bonds against the Property; and (b) Pay and charge City for all taxes which will be due at the Close of Escrow and Escrow Agent shall prorate taxes consistent with the requirements of the Orange County Tax II G_PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 22 H -- Collector's office. Real and personal property taxes and assessments for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty-five (365) day year on the basis that City is responsible for (i) all such taxes for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii) that portion of such taxes for the Current Tax Period to 12:00 a.m. on the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period" refers to the fiscal year of the applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Close of Escrow, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re -prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. 9. Close of Escrow Statement. No later than three (3) business days prior to the date scheduled for the Close of Escrow, Escrow Agent shall prepare for approval by Buyer and City a closing statement ("Close of Escrow Statement") on Escrow Agent's standard form indicating, among other things, Escrow Agent's estimate of all Close of Escrow costs and prorations made pursuant to this Agreement. Buyer and City shall assist Escrow Agent in determining the amount of all prorations. 10. All funds received in this escrow shall be deposited by the Escrow Agent in a general escrow account with any state or national bank doing business in the State of California and reasonably approved by Buyer and City, and may be combined in such with other escrow funds of the Escrow Agent. 11. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agent ("General Instructions"). In the event of a conflict between this Agreement and any such General Instructions, this Agreement shall control, unless otherwise mutually agreed by the parties. The parties agree, however, that they will refuse to sign General Instructions which (1) purport to relieve the Escrow Agent of liability for negligence or intentional wrong -doing; (2) excuse the Escrow Agent from strict compliance with each and all of the provisions of this document and the General Instructions; or (3) purport to authorize the Escrow Agent to follow the instructions or directive of any person not a direct signatory party to this Agreement. Any amendment to the escrow instructions shall be in writing and signed by both City and Buyer. At the time of any amendment the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. 12. All communications from the Escrow Agent to City or Buyer shall be directed to the addresses set forth in this Agreement, and in the manner set forth in Section 603 of this Agreement for notices between the parties hereto. 13. In the event this Escrow terminates because of the non -satisfaction of any condition or the default of City or Buyer under this Agreement, the cancellation charges, if any, required to be paid by and to Escrow Agent and the Title Company shall be borne by the party 12 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 HB - - Item 6. - 23 incurring the same, or in the event of termination due to default, the party in default. 14. Close of Escrow. If, for any reason, the Close of Escrow has not occurred by the date provided for in Section 302(3) and the Schedule of Performance, either Buyer or City may terminate this Agreement by providing written notice of termination to the other parties. Section 306: Broker's Fees Neither City nor Buyer shall be liable for any real estate commissions, brokerage fees or finders fees which may arise from this transaction. City and Buyer each represent to the other that it has employed no broker, agent, or finder in connection with this transaction. Buyer and City shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. Section 307: Representations and Warranties The representations and warranties set forth herein shall survive the Close of Escrow. Representations and Warranties of City. City represents and warrants to Buyer as follows: (a) Authori . City has full right, power and lawful authority to grant, sell and convey the Property to Buyer as provided herein; and (b) Title. City, at the time of the execution of this Agreement, is seized of the Property in fee simple and is the lawful owner of and has good indefeasible title to the Property; and (c) Litigation. To the best of City's knowledge, after due inquiry of appropriate parties, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the Property or any portion thereof, at law, or in equity before any court or governmental entity, domestic or foreign; and (d) Condition of Property. Except as disclosed on Exhibit 12 hereto, the Property is in good condition and without any known defects or malfunctions; and (e) FIRPTA. City is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or that City has complied and will comply with all the requirements under FIRPTA or any similar state statute; and (t) No Conflict. City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound; and 13 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 24 HB -- (g) Governmental Compliance. City has not received any notice from any governmental agency, .entity or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation and environmental condition; and (h) No City Bankruptcy. City is not the subject of a bankruptcy proceeding. 2. Representations and Warranties of Buyer. Buyer represents and warrants to City as follows: (a) Authorily. Buyer has full right, power, and lawful authority to purchase the Property as provided herein; and (b) No Conflict. Buyer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Buyer is a party or by which it is bound. 3. Ongoing_ Representations and Warranties. Until the Close of Escrow, City and Buyer shall, upon learning of any fact or condition which would cause any of the warranties and representations made by them in Sections 307(1) and 307(2), respectively, not to be true as of the Close of Escrow, immediately give written notice of such fact or condition to the other party. Such exception to a representation shall not be deemed a breach by such party hereunder, but shall constitute an exception which the other party shall have a right to approve or disapprove. If Buyer elects to close Escrow following disclosure of information that would have an effect on the value and/or operation of the Property, City's representations and warranties contained herein shall be deemed to have been made as of the Close of Escrow, subject to such exception(s). If, following the disclosure of such information, Buyer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 307 shall survive the Close of Escrow. Section 308: Risk of Loss or Damage Loss or damage to the Property, by fire or other casualty, occurring prior to the recordation of the Grant Deed shall be at the risk of City. In the event that loss or damage to the improvements on the Property, by fire or other casualty, occurs prior to the Close of Escrow, Buyer may elect to (i) require that City pay to Buyer the proceeds of any insurance which may become payable to City by reason thereof; or (ii) reduce the total price by an amount equal to the diminution in value of the Property by reason of such loss or damage or the amount of insurance payable to City, whichever is greater. Any insurance policies for fire or casualty are not to be transferred, and City will cancel its own policies after the Close of Escrow. G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 14 HB -71- Item 6. - 25 Section 309: Surviving Obligations Notwithstanding the close of escrow, the terms of this Agreement continue in full force and effect. ARTICLE 4: DEVELOPMENT OF THE PROPERTY Section 401: Scope of Development The Property shall be developed in accordance with and within the limitations established in the Scope of Development, subject to the Government Approvals. It is anticipated that Buyer will contract for performance of specific activities. Such contracts shall not in any way diminish or waive Buyer's obligations under this Agreement. Section 402: City Cooperation Prior to conveyance of the Property by City, City shall cooperate with Buyer in applying for permits and obtaining Government Approvals required for the development of the Property. Section 403: Cost of Development of Property The cost of developing the Property shall be the sole responsibility of the Buyer. Section 404: Schedule of Performance 1. Subject to Force Majeure Delays, Buyer and City shall perform all acts respectively required of such party in this Agreement within the times provided in the Schedule of Performance. 2. Upon Effective Date, Buyer shall promptly begin and thereafter diligently prosecute to completion the Project in the Scope of Development. Subject to Force Majeure Delays, Buyer shall begin and complete all development within the times specified in the Schedule of Performance, with such reasonable extensions of said times as may be granted by City. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing by Buyer and the City Administrator. 3. During periods of construction, Buyer shall submit to City a written report of the progress of the development when and as requested by City. The report shall be in such form and detail as may be reasonably required by City and shall include a reasonable number of construction photographs (if requested) taken since the last report by Buyer. Section 405: Local. State, and Federal Laws 1. Buyer hereby agrees to carry out development, construction (as defined by applicable law) and operation of the Project on the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and 15 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 26 H -7 - federal laws, rules and regulations and all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). 2. Buyer shall be responsible for obtaining Government Approvals required by City for the Project, ensuring that the use of the Property for the purposes described in this Agreement complies with the zoning and other City land use regulations (including any applicable exemptions and/or exceptions) applicable to the Property. 3. This Agreement is not a "Development Agreement" as provided in Section 65864 et M. of the California Government Code. Buyer shall comply with all applicable conditions of approval required by the City of Huntington Beach as part of the Government Approvals. Section 406: Insurance Buyer shall procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that City waives any such insurance requirement or requirements in writing, the following policies of insurance: 1. Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Buyer acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation. Buyer covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Property. To the extent Buyer directly employs personnel at the Project, Buyer shall maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Buyer shall require all contractors to provide such Workers' Compensation Insurance for all of the contractors' and subcontractors' employees. Buyer shall furnish City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Buyer shall similarly require all contractors and subcontractors to waive subrogation. 2. General Liability and Auto Insurance. Buyer shall carry general commercial liability insurance, including coverage for bodily injury, property damage, products/completed operations and blanket contractual liability in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to City Administrator. Such insurance shall name the City and its officers, agents, and employees acting in their official capacity, as additional insureds. Buyer shall require its insurer to waive its subrogation rights against City and shall provide certificates of insurance evidencing same. 3. Property Insurance. Buyer shall obtain and maintain in force, all -perils (to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Property, in an amount equal to the Property Purchase Price, less the amount of G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011 -01 -1I UUM H -73- Item 6. - 27 any and all payments made by Buyer to City. The policy shall name City and its officers, agents and employees acting in their official capacity as additional insureds. 4. Certificate of Insurance: Additional Insured Endorsements. Prior to the Close of Escrow, Buyer shall furnish to City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty (30) days prior written notice to City. S. If Buyer fails or refuses to procure or maintain insurance as required by this Agreement, City shall have the right, at City's election, and upon ten (10) days prior notice to Buyer, to procure and maintain such insurance. The premiums paid by City to maintain insurance for the Property shall be treated as a loan, due from Buyer, to be paid on the first day of the month following the date on which the premiums were paid. City shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). Section 407: Indemnification During the term of this Agreement, Buyer agrees to and shall protect, defend, indemnify and hold harmless City, its members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of (i) Buyer's failure to perform any obligations as and when required by this Agreement or any document referred to herein to which Buyer is a party, and (ii) the death of any person or any accident, injury loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Property and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, Buyer or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Buyer shall not be responsible for, and City shall protect, defend, hold harmless and indemnify Buyer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the sole negligence or willful misconduct of City or its members, officers, officials, employees, agents, representatives, servants, or contractors. Section 408: Disclaimer of Responsibility by the City Except as otherwise expressly provided in this Agreement, City neither undertakes nor assumes nor will have any responsibility, right or duty to Buyer or to any third party to review, inspect, supervise, pass judgment upon or inform Buyer or any third party of any matter in connection with the Property, whether with respect to the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Buyer and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Buyer or to any third party by City in connection with such matter is for 17 G:PDA:2009 drafts: Beach-Attanta00 PSA Draft 6a 2011-01-11 Item 6. - 28 H -74- the public purpose of disclaimer, and neither Buyer (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. Section 409: Rights of Access City shall have the right, at its sole risk and expense, to enter the Property or any part thereof at reasonable times and with as little interference as possible, for the purpose of inspecting the Property to determine Buyer's compliance with this Agreement. All The representatives of City entering the Property shall be identified in writing in advance by the City Administrator (or his or her designee). Any such entry shall be made only after reasonable notice to Buyer, and City shall indemnify and hold Buyer harmless from any claims or liabilities pertaining to such entry. Any damage or injury to the Property resulting from such entry shall be promptly repaired at the sole expense of the City. Buyer agrees to provide and maintain continuous Fire Department access, from the northerly end of the frontage road which is adjacent to the Huntington Breakers Apartments (the "Apartments") across the Site, and to a public street. In order to restrict the access to only Fire Department vehicles during construction, Buyer shall provide collapsible bollards, or other approved barrier, along the property line between the Apartments and the Site. Prior to commencement of any construction that would disrupt said access, Buyer shall submit a plan for Fire Department review and approval, depicting the proposed emergency route to be maintained during construction. Section 410: Taxes, Assessments, Encumbrances and Liens Subject to Buyer's right to claim any exemption to which it may be entitled under State law, Buyer shall be responsible for paying when due all real estate taxes and assessments, if any, assessed and levied on or against the Property or any portion thereof or interest therein. Without the prior written approval of City, Buyer shall not place, or allow to be placed, on the Property or any portion thereof or interest therein, any mortgage, trust deed, encumbrance (excluding easements not unreasonably interfering with the use of the Property) or lien (excluding mechanic's liens paid prior to foreclosure or liens for current year property taxes not paid) except the Permitted Transfers. Buyer shall remove, or shall have removed, any levy or attachment made on the Property (or any portion thereof or interest therein), or shall assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure. Nothing herein contained shall be deemed to prohibit Buyer from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Buyer in respect thereto. The covenants of Buyer set forth in this Agreement relating to the placement of any unauthorized mortgage, trust deed, encumbrance or lien, shall remain in effect until the final release and reconveyance of the City Deed of Trust. Section 411: Rights to Plans 1. All work product prepared pursuant to this Agreement, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to the Property are hereby assigned to City as security for Buyer's 18 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 HB -7- Item 6. - 29 obligations hereunder. In the event that this Agreement is terminated by City, Buyer shall, within ten (10) days of such termination, transmit all such work product to City. 2. To effectuate the assignment described in paragraph (1), concurrently with executing this Agreement, Buyer shall execute and deliver to City an Assignment of Agreements (the "Assignment"), substantially in the form attached to this Agreement as Exhibit 13, granting to City all of Buyer's rights to: (1) the Plans prepared pursuant to this Agreement; (2) the contracts between Buyer and its architect and between Buyer and its general contractor; (3) all permits relating to the Project; and all similar rights and property interests. Section 412: Hazardous Substances 1. To City's knowledge, and except as otherwise disclosed on Exhibit 12 hereto, there are not present on or about the Property any Hazardous Substances in quantities in violation of Governmental Requirements, and City has not received any written notice from any governmental authority concerning the removal of any Hazardous Materials from the Property, or concerning any restrictions on the use or development of the Property on account of the presence of any Hazardous Materials on the Property. 2. Lead -Based Paint and Asbestos Containing Materials. It is acknowledged by the Parties that neither City nor Buyer has any knowledge of the presence of lead -based paint or asbestos hazards on the Property. If such hazards are discovered during the course of the construction of the Improvements pursuant to this Agreement, Buyer shall prepare and submit to City a plan for the abatement of such hazards in compliance with all applicable Hazardous Materials Laws (as such term is defined in the Environmental Indemnity). Implementation of the plan must qualify the Property for a closure letter or similar clearance from the appropriate governmental entity having jurisdiction over the Property indicating that all lead -based paint and asbestos hazards have been fully abated to the satisfaction of such governmental entity. 3. Indemnification. Buyer, from and after the Close of Escrow shall indemnify, defend, and hold harmless City and its officers, employees, agents and representatives (collectively, the "Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law occurring after the Close of Escrow pertaining to (i) the storage of Hazardous Substances on the Property or (ii) contamination of the Property by a release of Hazardous Substances. As a condition precedent to the Close of Escrow, Buyer shall execute and deliver to the City an Environmental Indemnity, substantially in the form of Exhibit 10 to this Agreement. ARTICLE 5: DEFAULTS, REMEDIES AND TERMINATION Section 501: Defaults; Notice of Cure; Cure Rights 1. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, Z G:PDA2009 drafts: Beach-Atlanta00 PSA Draft ba 2011-01-11 Item 6. - 30 H -7 - correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. 2. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or. remedies. 3. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default shall have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. 4. If a non -monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the party in default (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party. If Buyer fails to take corrective action or cure the default within such reasonable time, City shall give Buyer notice thereof. In no event shall the City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. Section 502: Institution of Legal Actions Subject to the notice and cure provisions of Section 501 and the limited recourse provisions of Section 507, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California.. Section 503: Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 20 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 H -77- Item 6. - 31 Section 504: Acceptance of Service of Process 1. In the event that any legal action is commenced by City against Buyer, service of process on Buyer shall be made by personal service upon Buyer (or upon an officer of Buyer) and shall be valid whether made within or without the State of California, or in such manner as may be provided by Iaw. 2. In the event that any legal action is commenced by Buyer against City, service of process on City shall be made by personal service upon the City Administrator or the City Clerk or in such other manner as may be provided by law. Section 505: Rights and Remedies Are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 506: Specific Performance If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 501, the non -defaulting party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. Section 507: Limited Recourse Obligations Each obligation of Buyer under this Agreement is a nonrecourse obligation of Buyer and its partners. Except as provided otherwise in this Agreement, neither Buyer nor any of its general or limited partners, nor any other party, shall have any personal liability for payment of obligations to City. The sole recourse of City shall be the exercise of its rights against the Property and the Project and any related security for the Buyer Note. Notwithstanding the foregoing, City may obtain a judgment or order (including, without limitation, an injunction) requiring Buyer or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Note; may proceed against any person or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and may recover directly from Buyer or any other party: 1. Any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee (acting within the scope of his or her employment) of Buyer or of any general partners; 21 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6. - 32 HEM -- 2. Any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances; and 3. All court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. Section 508: Buyer's Remedies. Subject to any applicable cure periods and the right to notice provided for in this Agreement, upon a default or breach of this Agreement by City, Buyer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Close of Escrow, may terminate this Agreement. Buyer cannot sue for monetary damages and hereby fully and finally releases City from any claims for monetary damages arising directly or indirectly from City's breach of its obligations under this Agreement. Section 509: Attorney's Fees Except as otherwise expressly provided in this Agreement, in the event that any action, suit or other proceeding is brought to enforce the obligations of any party under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. ARTICLE 6: GENERAL PROVISIONS Section 601: Buyer's Warranties. Buyer represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable Buyer to fully comply with the terms of this Agreement; (2) that it and its general partners are duly organized, validly existing and in good standing under the laws of the State of California; (3) that it has the full power and authority to undertake the Project and to execute this Agreement; (4) that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of Buyer; (5) except as disclosed to the City in writing, there are no actions or proceedings pending or, to the best of the Buyer's knowledge, threatened against the Buyer or Buyer's general partners before any court or administrative City in any way connected with the Property or the Project which could adversely affect the Buyer's ability to perform the activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which the Buyer or a general partner of Buyer is a party or which affects the Project or any part thereof, (7) the Buyer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) neither the Buyer nor its general partners has not entered into any agreements which will adversely affect the title to the Project or the Buyer's right to develop and use the Project as provided in this Agreement, and neither the G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 22 H -7 - Item 6. - 33 Buyer nor its general partners will not enter into any such agreements after the Effective Date hereof. Section 602. City's Warranties City represents and warrants (1) that it has access to professional advice and support to the extent necessary to enable City to fully comply with the terms of this Agreement; (2) that it is duly organized, validly existing and in good standing under the laws of the State of California; (3) that it has the full power and authority to execute this Agreement; (4) that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of City; (5) except as disclosed to Buyer in writing, there are no actions or proceedings pending or, to the best of City's knowledge, threatened against City or City's officers before any court or administrative City in any way connected with the Property or the Project which could adversely affect City's ability to perform its obligations hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which City or an officer of City is a party or which affects the Project or any part thereof; (7) City is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) neither City nor its officers have entered into any agreements which will adversely affect the title to the Project or Buyer's right to develop and use the Project as provided in this Agreement, and neither City nor its officers will enter into any such agreements after the Effective Date hereof. Section 603- Notices, Demands and Communications between the Parties Formal notices, demands, and communications between City and Buyer shall be sufficiently given if (i) personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Buyer: Beach Promenade LLC 21190 Beach Boulevard Huntington Beach, CA 92648 Attn: Bijan Sassounian With a copy to: Dennis G. Harkavy, Esq. 23901 Calabasas Road, Suite 2003 Calabasas, CA 91302 If to City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator 23 GPDA:2004 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Item 6.-34 H -80- With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of (i) receipt of refusal to accept delivery, or (ii) noon on the second business day following deposit in the United States mail. Section 604: Conflicts of Interest 1. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is, directly or indirectly, interested. 2. Buyer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Section 605: Nonliability of City Officials and Employees No member, official, employee or consultant of City shall be personally liable to Buyer, or any successor in interest, in the event of any default or breach by City or for any amount that may become due to Buyer or to its successor, or on any obligations under the terms of this Agreement. Section 606: Extension of Times of Performance I . In addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default as a result of a Force Majeure Delay. An extension of time for a Force Majeure Delay shall be limited to the period of such delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days of the commencement of the cause. In the event of such delay, the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. 2. Times of performance under this Agreement may also be extended by mutual written agreement by City and Buyer. In addition, the City Administrator shall have the authority on behalf of City to approve extensions of time to the Schedule of Performance not to exceed a cumulative total of one (1) year. Section 607: Assurances to Act in Good Faith. Buyer and City agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to 24 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 B -1- Item 6. - 35 accomplish the acquisition and development of the Property in accordance with the provisions hereof Section 608: Interpretation The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. Section 609: Severability If any provision of this Agreement shall be adjudged invalid, illegal or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall not be affected thereby, but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, and the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 610: No Third Party Beneficiaries This Agreement is made solely and specifically between City and Buyer and their respective successors and assigns; and, except as expressly provided otherwise in this Agreement, no other person will have any rights, interest or claims under this Agreement or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise. Section 611: City Approvals and Actions The City Administrator shall have the authority to approve non -substantive changes and amendments to this Agreement as may be approved by the City Attorney and to take such other and further action, and execute documents or other agreements as may be necessary to effect the terms of this Agreement. Such amendment may require the review and approval by the City Council as needed to comply with applicable law and internal policies and procedures. Section 612: Titles and Captions Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. Section 613: Gender and Number. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 25 QPDA:2009 drafts: Beach-Atianta00 PSA Draft 6a 2011-01-11 Item 6. - 36 HB - - ARTICLE 7: ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS 1. This Agreement consists of U pages and one (1) signature page and (__) Exhibits which constitute the entire understanding and agreement of the parties. This Agreement shall be executed in three duplicate originals each of which is deemed to be an original. This Agreement and its attached Exhibits shall constitute the entire understanding and agreement of the parties. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all (or any part of or any interest in) the Property. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written. 3. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Buyer, and all amendments hereto must be in writing and signed by the appropriate authorities of the parties to be bound thereby. The waiver by City or Buyer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. 4. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one agreement binding on City and Buyer. The signature page of this Agreement may be detached from and added to any counterpart of this Agreement identical in form. ARTICLE 8: EFFECTIVE DATE OF AGREEMENT This Agreement does not take effect until executed by City. [SIGNATURES APPEAR ON NEXT PAGE] G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 26 NEB -83- Item 6. - 37 IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the Effective Date. "BUYER" BEACH PROMENADE LLC, A California limitedJialrifitv= / Vice President �� A1VI) i` By: ; � Its: (ci cle one) Secretary Chief Financial Officer / Asst. Secretary / Treasurer "CITY" CITY OFFHHU�iTINGTON B , a municip oration o e State of VED AS TO FORM: n— City Attorney INITIATED AND APPROVED: Director of Economi velopment APPROVED: G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 City 27 Item 6. - 38 H -- cl)(AV �1 Exhibit A SHEET 1 OF 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOl_SAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS, AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89°37'06" EAST, 89.21 FEET, TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39" WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 901025", AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00.4U14" WEST, 730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89-37'06" WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00-40'14" EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09-50'39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS (2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS -OF -WAYS AND EASEMENTS OF RECORD. EXHIBIT "B" ATTACHED AND THIS REFERENCE MADE A PART HEREOF. o LAND 1Y Exp. 12-31-11 JOSEPH G. DERLETH �y LS. 7340 �• J' 4 PLS 7340, EXPIRES 12/31/11 rF of CALF° Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE LA� � CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -5- Item 6. - 39 i NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM _ lPER PM 94-590 (N89'37'06"E) _ _ ATIANTA AVE_ 30' 7 5p. 50' --------- r-__-_...- 'ARCEL 2, PM 84-590,------� 202/48-50 PM I �8, f I W'LY LINE SEC 13 l T6S, R11 W, SBM j i I <M I D ! n 110' I M f- �`^ T rl � zI PARCEL 2, PM 84-590,----;- 202/48-50 PM PARCEL 2, PM 202/48-50 PM 44'4 ( }= RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS �=PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 90,340 SQ FT, (2.07 ACRES) EXHIBIT SHEET I OF 3 GRAPHIC SCALE — -I 1 inch =150 ft. •N'LY LINE 15D I 0 75 ISO PARCEL 1 PM 84-590 202/48-50 PM I { IN FM ) I EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH ARTMENT OF PUBLIC WORKS Item 6. - 40 H -- ATLANTA AVE I (N89'37'06"E) F22'- NW'LY COR SEC 13 ch T6S, R11 W, SBM a PER PM 84-590 {' } = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202,. PAGES 48 THROUGH 50 .� INCLUSIVE OF PARCEL MAPS. o0 i) = RECORD PER STATE 1 HIGHWAY MAP FILED IN BOOK °3 5, PAGES 45 AND 46. I �= PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. C r M M --i t7D M �< Z M I LINE TABLE: L1= N89'37'06"E, 89.21' L2= N00'40'14"W, 730.41' PARCEL 2, PM 84-590,-z4 202/48-50 PM I o (---W'LY LINE SEC 13 T6S, R11 W, SBM POINT OF v BEGINNING, SE COR PARCEL 2, q k PM 84-590, { 202/48-50 PM {54.91'} N'LY LINE PARCEL i PM 84-590 (N89'37'06"E, 489.56') GRAPHIC SCALE I inch =50 TL 50 0 25 50 C { IN FEET ) E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. 6: 8 ?` IE NE COR PARCEL 1, PM 84-590, 202/48-50 PM EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS _ Imo. HB -7- Item 6. - 41 (N89'37'06"E) { "-NW LY COR SEC 13 f T6S, R11 W, SBM i PER PM 84-590 = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. GRAPHIC SCALE 1 inch =50 it N'LY LINE SEC 13 o zs 50 T65, R11 W, S.B.M. ATLANTA AVE IN FEE 30' A PARCEL 2, PM 84-590, { r/ 202/48-50 PM PORTION OF STATE HIGHWAY a RELINQUISHMENT NUMBER I c 632, RECORDED 2/26/68, IN o 8526/461 O.R., ALSO BEING a A PORTION OF PARCEL 1, j rTi STATE HIGHWAY MAP BOOK v V 00 5, PAGES 45 AND 46. {� LINE TABLE: L3= S89'37'06"W, 88.00' W'LY LINE SEC 13 T6S, R11 W, SBM PARCEL 2, I PM 84-590, 202/48-50 PM -' �22' 88 I I 50' 44:'41 ?.' T E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT PUBLIC WORKS Item 6. - 42 H - - C`7 �7� �' $ 8 +•4 R 409.551 NC Of THE OF THE NY 1/4 R n S FRAC. SEC. 13-6-11. I � x oblou• w ssle,P4• z s _ — — — — x aosou• w _ _ IOPI.or — �^— — JO.m' 1PJ.G0' _ J70.tq' u N OOlblr - $ PCL 2 t. $ I � AM 44140 „� $ In � 'b N W7Mel• W 11500' IQ00' x 1000' h I N 00'+0'II' W Pro.oJ' x 0040•Ir w$ 40OF- — W e V x m+blr w Po.00• PARCEL 3 $ PCL I $ $b r b $" PM 15/18 �W PARCEL 2 g PCL 3 �= $ a $ PARCEL 1 N oa46-11• N PM 15/27 ; PM 44/40 . 18� 112091506 O.R. 9 h $ I1209 506 O.R. °' 'a'oo 1.69 ACRES �a 0,91 ACRES 1 $ 0.18 ACRES _ 0.19 ACRES — INSTRUMENT N0 ^ �I / axob+all"1 le000' y 82-0030390.R. 0.16ACRES x yb$ } 3 yy) $ J.+r sxx• — m 2.27ACRES K r,_• M Obu_Sf x I10o0' g: $ x aJ r-1 x 100.00 $((tt�� — —I9~�`N C040'Ir wx wla�u•PCL 2PM 41/40� 0.31ACRx avaa_ss' r saeWPARCEL 2l I209/506 N OAS ACRES s,S PARCEL 3 g PCL 4 PM 15/18 11209/505 O.R. xl a 8 � 0.50 ACRES >0•11' ry{ ry 9 N LIPIO'Ir w IJI.ee' J99.1P' IJO.IY J0.11' ! `• l•159.01' x 0040.14' W N 00+0'lI WM 191,56 e39.e9• Y I.Ogy9••U. • �� I I 9109 SdO '11-9-EI '035 OYBi '4/1 MN 3Ht 30 83NdOO 'Af'N E'LY LINE OF 7985/557 O.R. _ — _ _ N 00'40•Ir W _ _ OJO10' — _ — — — — — — N O—Z-1 W 1021 Ob — — BEACH BLVO.— — — — — x ob4o'TI w r5'"' — 'a", PCL 2 'a>; PM 84-590 0.60 ACRES — OWNERSHIP EXHIBn• ALDEN & ara — ssocu•res BEACH PROMENADE BEACH 80 1"ARD 8 A71.ANTA AVENUE W4 Iuxnal0e IWK. 1 CU N EXHIBIT 3 METHOD OF FINANCING This Method of Financing is attached to the Purchase Agreement and Escrow Instructions (the "Purchase Agreement") between the City of Huntington Beach ("City") and Beach Promenade LLC, a California corporation ("Buyer"), relating to Buyer's acquisition from City of real property to be consolidated and reconfigured with adjacent parcels. Any capitalized term not otherwise defined herein shall have the meaning ascribed to it in the Purchase Agreement. Pursuant to the Purchase Agreement, Buyer agrees to purchase the Property from City for the Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00). Buyer's purchase of the Property will be financed by a Buyer Note for the amount of the Property Purchase Price. I . Definitions. The following capitalized terms shall mean as follows and in the event of a conflict between the definitions in this Method of Financing and the definitions in the other City Loan Documents, the definitions in this Method of Financing shall control: The term "Buyer Documents" shall mean the Purchase Agreement, the Buyer Note, the City Deed of Trust and the UCC I Financing Statement_ The term "Buyer Note" shall the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust. The term "City Deed of Trust" shall mean one or more Deeds of Trust with Assignment of Rents substantially in the form attached as Exhibit No. " T' to the Purchase Agreement, in which Buyer is the Trustor and City is the Beneficiary, which secures the Buyer Note. The term "Property Purchase Price" shall mean the purchase price for the Property in the amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00) to be paid by Buyer to City. The term "Environmental. Indemnity" shall mean the indemnity by Buyer, substantially in the form attached to the Purchase Agreement as Exhibit 10. 2. Buyer Note. In accordance with and subject to the terms and conditions of the Purchase Agreement, the Buyer Note and this Method of Financing, the City and Buyer agree that: (a) Once acquired by Buyer, the Property will be consolidated with Buyer's other parcels and re-parcelized into Parcels 1, 2, 3, 4 and 5 by recordation of a Parcel Map in substantial conformance with Exhibit "15." G.PDA:20091)rafts:Beach-Atlanta03_Method of Financing Draft 7a 2011 01 1 1 Item 6. - 44 1--11 - 0- (b) The Buyer Note shall be secured by the City Deed of Trust recorded on Parcels 2 and 4. 3. Recordation. Upon the Close of Escrow, the Title Company shall record the Parcel Map and the Buyer Documents in accordance with instructions contained in the Purchase Agreement (as such instructions may be jointly amended by the City and the Buyer) and shall be prepared to issue to the City and Buyer a policy of title insurance, insuring the priority of the City Deeds of Trust in amounts and with endorsements as the City may reasonably require. 4. Repayment. The repayment terms of the Buyer Note shall be as follows, and as set forth in the Schedule of Performance attached to the Purchase Agreement as Exhibit 4: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent (7%) per annum commencing upon the Close of Escrow, not to exceed Three Thousand Five Hundred Dollars ($3,500.00) per annum. (c) On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deposit sufficient funds with the Escrow Agent to fund the Close of Escrow (the "Initial Deposit"). Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to City the sum of Fifty-three Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments") of which Fifty Thousand Dollars ($50,000.00) will be applied to the principal amount outstanding. (d) Buyer shall pay City Three Hundred Fifty Thousand Dollars ($350,000.00) within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four (4) years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00) within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map, or within six (6) years of the Close of Escrow, whichever occurs first. (f) Buyer shall pay City Three Hundred Thousand Dollars ($300,000) within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight (8) years of the Close of Escrow, whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten (10) years from the Close of Escrow. (h) All sums paid by Buyer to City are nonrefundable. GPDA:2009Drafts:Beach-Atlanta03_Method of Financing Draft 7a 2011 01 _1 1 HB - 1-- Item 6. - 45 EXHIBIT 4 SCHEDULE OF PERFORMANCE ACTION ITEM I. Opening of Escrow. 2. Deposits into Escrow. 3. Close of Escrow; Recordation of Grant Deed, Parcel Map, and City Deed of Trust. TIME FOR PERFORMANCE Within 180 days of City approval of the Agreement. The Buyer and City shall make deposits into escrow as provided for in the Agreement. When all conditions to close Escrow have been fulfilled. 4. Buyer makes additional payments to Upon each anniversary of Close of City of $50,000.00, plus interest in the Escrow until Property Purchase Price amount of 7% of the unpaid balance of the paid in full _ Entire Property Purchase Property Purchase Price, interest payment Price to be paid in full no later than not to exceed $3,500.00 per year. I0 years from Close of Escrow. 5. Commencement of construction of building on Parcel I of the Parcel Map. 6. Completion of construction of building on Parcel I of the Parcel Map, 7. Buyer's initial payment (of $350,000.00) to City towards balance of Property Purchase Price. 8. Commencement of construction of second building on Parcel 2 or 4 of the Parcel Map, whichever is second. 9. Completion of construction of second building on Parcel 2 or 4 of the Parcel Map, whichever is second. Within 2 years of recordation of the Parcel Map. No later than 2 years following commencement of construction of building upon Parcel 1. Within 120 days after issuance of Certificate of Occupancy for building upon Parcel 1, but no later than 4 years after Close of Escrow. Within 4 years of recordation of the Parcel Map. Within 2 years following commencement of construction of second building on Parcel 2 or 4 of the Parcel Map, whichever is second. I G- PDA: 2009drafts: Beach-Atlanta04 Schedufe OCPerformance Draft 4a 2011-01-1I Item 6. - 46 HS- - 10. Buyer's second payment (of $300,000.00) to City towards balance of Property Purchase Price. 11. Release and partial reconveyance of City Deed of Trust recorded on second commercial pad site. 12. Commencement of construction of third building on Parcel 2 or 4 of the Parcel Map, whichever is third. 13. Completion of construction of third building on Parcel 2 or 4 of the Parcel Map, whichever is third. 14. Buyer's third payment (of $300,000.00) to City towards remaining balance of the Property Purchase Price. 15. Release and Full Reconveyance of City Deed of Trust. Within 120 days of issuance of Certificate of Occupancy for building on the second commercial pad site, but no later than 6 years after Close of Escrow. Within 10 days following Buyer's second payment of $300,000.00 to City towards balance of Property Purchase Price. No later than six years from recordation of the Parcel Map. No later than eight years from recordation of the Parcel Map. Within 120 days of issuance of Certificate of Occupancy for building on the third commercial pad site, but no later than 8 years after Close of Escrow. Within 30 days of Buyer's payment of the full Property Purchase Price and any interest. NOTES: It is understood that this Schedule of Performance is subject to all of the terms and conditions of the Agreement. The summary of the items in this Schedule of Performance is not intended to supersede or modify the more complete description in the Agreement; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text of the Agreement shall govern. The time period set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Buyer and City. The City Administrator of City shall have the authority to approve on behalf of City reasonable extensions of time for performance of the actions set forth above, not to exceed a cumulative total of one year. Any other requests for extensions of time shall require the review and approval of the City Council of City as needed to comply with applicable law and internal policies and procedures of City. 2 G: PDA: 2009drafts: Beach-Atlanta04 Schedule Of Performance Draft 4a 201 I-01-I 1 HB - - Item 6. - 47 EXHIBIT 5 SCOPE OF DEVELOPMENT The Project consists of Buyer's acquisition from the City of an existing frontage road consisting of a total of approximately 90,387 square feet, Iocated adjacent to Beach Boulevard at Atlanta Avenue (the "Property"). The Property is to be consolidated with the Median and a portion of the existing shopping center Site owned by Buyer located on the east and west boundaries of the Property, and resubdivided by the recordation of a Parcel Map in order to create legal parcels for the development and construction of three additional new retail building pads consisting of a total of approximately 28,326 square feet and associated private and public Improvements to the Site, as further described in the Agreement, in conformity with the applicable local and state laws, rules and regulations. In addition, the Project will provide for improved ingress and egress, access and parking for the existing parcels and buildings within the shopping center Site. GTDA:2009Drafts:Beach-Atlanta: Beach-Atianta0 —Scope of Devefopment.doc Item 6. - 48 H -- IAJ cy�" (-0 - ;i�e.5e rve oG H - - Item 6. - 49 -.qg Kequesieci Liy American Title NHS City of Huntington Beach Real Estate Services Division P.O. Box 190 / 2000 Main Street Huntington Beach, CA 92648 WHEN RECORDED MAIL TO: BEACH PROMENADE LLC 21190 Beach Blvd. Huntington Beach, CA 92648 INCORPORATED AREA GRANT � DEED ® DOCUMENTARY�t)tSFER TAX $ EXEMPT N APN(s): /r�l�/tJP 4�R6• G �.v`�,�� Location: Gtv of Huntington Beach Signature of Declarant or Agent determining tax FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Huntington Beach, a California municipal corporation, hereby GRANT(S) to BEACH PROMENADE LLC, a California Limited Liability Company, the real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: See Exhibits "A" and "B" for legal description and sketch EXCEPTING therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting, developing, producing, removing and marketing said substances; and FURTHER EXCEPTING THEREFROM a permanent easement and right at any time or from time to time, to construct, maintain, operate, replace, remove, and/or renew water lines, and for the transportation or distribution of water including access to and from the property for said purpose, over a portion of said land as described in the legal description and sketch entitled "Beach Boulevard Frontage Road Water Easement," collectively attached hereto as Exhibits "C" and "D", and incorporated by this reference as though fully set forth herein. _ Dated: �� , 2011 V BEACH corporation APPROVED AS TO FORM: �Y'�� 0 ;?%Z y City Attorney MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE: BEACH PROMENADE LLC. 21190 Beach Blvd., Huntington Beach, CA 92648 G:PDA:2009Drafts: Beach-Atlanta07 Grant Deed Final 2011 02 02 Item 6. - 50 H -96- State of County of OAM ( C On before me L-- �its�d/ rsonal{ � Y Date Name & Title of Officer (1k, Jane Doe No ry Public) appeared Z.. a'&'j Name(s) of Signer(s) -OR- )q proved to me on the basis of satisfactory evidence to be the personewhose namess 4s/�e ubscribed to the within instrument and acknowledged to me that a ecuted the same in N44eqCei uthorized capaci ies and that by 85 P L. ESPARtA wmfothei ignatur@�'js ion the instrument the person, or the Commission tZAA entity upon behalf of which the persorOacted, executed the ® Notary Public - California instrument. orange County WITN d offici al. M Comm. Ex Tres Aug4. 2013 Signatur f Notary ---------------------------------------- OPTIONAL --------------------_-®----------_----- Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. ®ascription of Attached Document Title or Type of Document i Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Seller(s) Signer's Name ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner ❑ Limited ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other Signer Is Representing: General Right Thumbprint of Signer G:PDA:2009Drafts: Beach-AtlantaOJ_Grant Deed Final 2011_02_02 Number of Pages Signer's Name ❑ Individual ❑ Corporate Officer Title(s): ❑ Partner ❑ Limited ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other Signer Is Representing: Right Thumbprint of Signer HB -7- Item 6. - 51 Exhibit A SHEET 1 OF 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL i OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS, AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89*37'06' EAST, 89.21 FEET, TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09°50'39" WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9°10'25", AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14" WEST, 730Al FEET TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89°37'06" WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'W' EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09`50'39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS (2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS -OF --WAYS AND EASEMENTS OF RECORD. EXHIBIT "B" ATTACHED AICA ND THIS REFERENCE MADE A PART HEREOF. y4 LAND s�'9 O JAW JOSEPH G. DERLETH J,9r� �� 7 PLS 7340, EXPIRES 12/31/11 of cAL� Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE ®�J CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 52 H -98- i NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11W, SBM PER PM 94-590 (N89'37'06"E) I _ - ATLANTA AVE- _ 30'Sppp 50' Z ----------- ------- ARCEL 2, PM 84-590,-----�- 02/48-50 PM r I WLY LINE SEC 13� I T6S, R11 W, SBM j n r i I Mr- �--,10T zQ ' I rn � I ! PARCEL 2, PM 202/48-50 PM 84-590,------I- y I ►---110' ! z ! a r ! o� ! �r I o� ! �+ f o � ! PARCEL 2, PM B4-590,------ }- 202/48-50 PM �8>� lr I 44140 151 i6 Dhs ( }= RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS ®=PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 90,340 SO FT, (2.07 ACRES) 4g 6 '8 ; [ t.. _GRAPHIC SCALE j—l 1 inch o i50 it. 7 so 5 150 "N'LY LINE — -/ ' PARCEL 1 PM 84-590 202/48-50 PM i { ' IN FEr ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB - - Item 6. - 53 ATLANTA AVE (N89'37'06"E) �22'' NW'LY COR SEC 13 •� T6S, R11 W, SBM f 8- PER PM 84-590 0 0 } = RECORD PER PARCEL MAP 84-590, FILED 1N BOOK 202, m PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. w }) = PD RECORD PER STATE i HIGHWAY MAP FILED IN BOOK ^c' / 5, PAGES 45 AND 46. Ij PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. I '{( LINE TABLE: 1 L1= N89'37'06"E, 89.21' I L2= ND0'40'14"W, 730.41' PARCEL 2, C PM 84-590,.'j C W 202/48-50 PM I o rnn o i-W'LY LINE SEC 13 I _ T6S, R11 W, SBM M W POINT OF I < BEGINNING, SE 00 COR PARCEL 2, M 0 ( PM 84-590, 202/48- 50 PM (N89'37'06"E, N'LY LINE PARCEL PM 84-590 489.55') GRAPHIC SCALE I inch =50 ft. 50 0 25 50 — L ( IN FEET } E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. 6/:6 P:: NE COR PARCEL 1, PM 84-590, 202/48- 50 PM _ Y I EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 54 H -100- I GRAPHIC SCALE I 1 inch =50 IL N'LY LINE SEC 13 3o o so T6S, R11W, S.B.M. --� ATLANTA AVE ( IN nW (N89'37'06"E) NW'LY COR SEC 13 T6S, R11W, SBM A 50' 50 I PER PM 84-590 L3 = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 / INCLUSIVE OF PARCEL MAPS. g PARCEL 2, - - PM 84-590, j 202/48-50 PM I I/ = PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER ( �, 632, RECORDED 2/26/68, IN Q 8526/461 O.R., ALSO BEING TI A PORON OF PARCEL 1, I rn STATE HIGHWAY MAP BOOK v 5, PAGES 45 AND 46. co {� LINE TABLE: L3= S89'37'06"W, 88.00' W'LY LINE SEC 13 L CA o T6S, R11W, SBM q I PARCEL 2, M = PM 84-590, z g 202/48-50 PM m ou 122� �� a 8 I� 0 i o zf M 44r 40 Pe z o 4P 0 EXHIBIT S SHEET 3 OF 3 (A 0 E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE. CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -101- Item 6. - 55 Exhibit C SHEET 1 OF 2 THOSE CERTAIN LANDS LOCATED IN THE NORTH 154822 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTV OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS, AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89°37'06" EAST, 79.08 FEET, TO THE TRUE POINT OF BEGINNING, OF THIS DESCRIPTION; THENCE CONTINUING EASTERLY ALONG SAID NORTHERLY LINE, NORTH 89°37'06"--EAST, 10.14 FEET TO THE INTERSECTION OF SAID NORTH LINE, WITH THE EAST LINE OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968,1N BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09°50'39" WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9-10-25", AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH'00°4914" WEST, 730AI FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG LAST SAID PARALLEL LINE, SOUTH 89°37'06" WEST,10.00 FEET TO A LINE PARALLEL WITH AND 10.00 FEET WESTERLY OF THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE SOUTHERLY ALONG LAST SAID PARALLEL LINE, SOUTH 00-40'14" EAST, 730.46 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1010.00 FEET; Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH Pao &V DEPARTMENT OF PUBLIC WORKS Item 6. - 56 H -102- Exhibit C SHEET 2 OF 2 THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE, THROUGH A CENTRAL ANGLE OF 9-10'25", AN ARC DISTANCE OF 161.71 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE, SOUTH 09'50'39" EAST, 132.18 FEET, TO THE TRUE POINT O� BEGINNING. CONTAINING 10,244 SQUARE FEET MORE OR LESS (0.24 ACRES). EXHIBIT "D" ATTACHED AND BY THIS REFERENCE MADE A PART HEREOF. �] ?y�O LAND SG� �c`JJ� L O � D{P. 12-31-11 � JOSEPH G. DERLETH PLS 7340, EXPIRES 12/31/11 mq Ls lac OF CALIF Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i Item 6. - 57 i NW'LY COR SEC 13 N'LY LINE SEC 13 p T6S, R11W, SBM T6S, R11W, SBM PER PM 94-590 (NB9'37'06"E) _ - ATMTA AVE7 5p' 30' PARCEL 2, PM 84-590,--- 202/48-50 PM F I W'LY LINE SEC 13 T6S, R11W, SBM F I nD = ` I z W �----110' I r" � I I PARCEL 2, PM 84-590, --I- 202/48-50 PM { �----110' i z I o� I a� { F I _ I O I j I 1 cI I v +1 I PARCEL 2, PM 84-590; --�-- 202/48-50 PM �81.-- i ( I f I I 1v 38' 44/40 8o ' oo 10.00' OD r> � m o i `` 16 P j ( )= RECORD PER PARCEL MAP $8, 78'ol 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 10.00' INCLUSIVE OF PARCEL MAPS lo lo ®=10.00' EASEMENT FOR WATER AND INCIDENTAL PURPOSES TO THE CITY OF HUNTINGTON BEACH. 6 A 8 GRAPHIC SCALE 1 inch =150 fi.. ,N'LY LINE 50 I o 7I t50 PARCEL 1 PM 84-590 202/48-50 PM I ( iN nwr ) EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH TMENT OF PUBLIC Item 6. - 58 H -104- ATLANTA AVE 1 ! (N89'37'06"E) F22'-- NW'LY COR SEC 13 1 Ln i T6S, R11 W, SBM o PER PM 84-590 r8t -- -tom ( ) = RECORD PER PARCEL MAP a 84-590, FILED IN BOOK 202, ' PAGES 48 THROUGH 50 "{ INCLUSIVE OF PARCEL MAPS. oo I OD {{ )) = RECORD PER STATE I HIGHWAY MAP FILED IN BOOK �'- 5, PAGES 45 AND 46. ----58' 22' ®= 10.00EASEMENT FOR WATER AND INCIDENTAL PURPOSES TO THE CITY OF HUNTINGTON BEACH. I LINE TABLE: t L1= N89'37'06"E, 79.08' L2= N89'37'06"E, 10.14' L3= NOO'40'14"W, 730.41' L4= SOO'40'14"E, 730.46' { 1 C PARCEL 2, N �p PM 84-590, L rn m Z 202/48-50 PM o c nn p i--W'LY LINE SEC 13 1►i T6S, R11W, SBM 1 rnW r' o POINT OF j P c4 �-- -j COMMENCEMENT, l! 01A cn ® SE COR PARCEL M o 2. PM 84-590, 202/48-50 PM TRUE POINT OF g' BEGINNING -� 88.00' 54.91' L7 \— N'LY LINE PARCEL 11 PM 84-590 (N89'37'06"E, 489.56') GRAPHIC SCALE 1 inch =50 ft o n ( IN FEET ) 21 e, LE'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. EXHIBIT D SHEET 2 OF 3 a g 8 id' t 1 � PN, z NE COR PARCEL 0 1, PM 84-590, 202/48-50 PM 10.00' w c,= OD oL Y L2 EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -1 o5- Item 6. - 59 I GRAPHIC SCALE ' N'LY LINE SEC 13 1 inch =50 ft. T6S, R11W, S.B.M. u ss ATLANTA AVE (N89'37'06"E) NW'LY COR SEC 13 30' T65, R11 W, SBM ' PER PM 84-590 L6 ( ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. --�8'- PARCEL 2, PM 84-590, 202/48-50 PM =10.00' EASEMENT FOR WATER AND INCIDENTAL PURPOSE TO THE CITY OF HUNTINGTON BEACH. Uy 0 1 � 0 LINE TABLE: L5= S89'37'06"W, 10.00' ou L6= N8937'06"E, 78.00' (TIE] co cr En C r W'LY LINE SEC 13 k < W z T6S, R11 W, SBM j rn o �D �' I PARCEL 2, I rn S PM 84-590, z 202/48-50 PM Mv L22'- l 8, <`-' Fr-4 O ' I 7$� 8' M v I l V) 0 0 0 rri 0 rn I so z 0 o I5.J6 P 0 1 EXHIBIT D SHEET 3 OF 3 w 0 E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. no EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT • FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH - .. Item 6. - 60 HB -106- __......__.__------------- _ - _ _ _ - _ _ -.._ ... ..... --. ._.........._...... ............. ...... ... ........ ... . - ._.... _......- .......... ......_. ,D PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA Beach Promenade, LLC Huntington Beach, California $1,200,000.00 72011 FOR VALUE RECEIVED, Beach Promenade LLC, a California Limited Liability Company ("Buyer"), hereby promises to pay to THE CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California, or order, a principal amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00), pursuant to the Agreement and Escrow Instructions for Purchase and Sale of Real Property dated December 6, 2010 (the "Agreement") between Buyer ("Buyer" therein), and the City of Huntington Beach ("City or Seller" therein), incorporated herein by this reference. The Agreement is a public record on file in the offices of the City- The Buyer shall pay interest at the rate, in the amount and at the time hereinafter provided. 1. Definitions.. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition, the following terms shall have the following meanings: The term "City Deed of Trust" shall mean the Deed of Trust recorded against the Property, in which Buyer is the Trustor and the City of Huntington Beach is the Beneficiary, which secures the Buyer Debt. The term "Buyer Debt" shall mean Buyer's obligation to pay City the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), as evidenced by this Note and secured by the City Deed of Trust. The term "Buyer Documents" shall mean the Agreement, this Note, the City Deed of Trust and the UCC1 Financing Statement. The term "Environmental Indemnity" shall mean the unrecorded environmental indemnity entered into by Buyer in favor of the City and the Agency, dated on or about the date hereof. The term "UCCI Financing Statement" shall mean the UCC1 Financing Statement dated on or about the date hereof and recorded against the Property and filed in the California Secretary of State's Office in connection with the Buyer Debt. 2. This Note evidences the obligation of the Buyer to the City for the payment of the Buyer Debt. Buyer may prepay the principal balance of this Note at any time without penalty. l G:PDA:2009Drafrs:Beach-Atlanta: Beach-Atlanta08_Buyer Note Final 2011_02_02 NB -1 07- Item 6. - 61 3. This Note is payable at the principal office of City, 2000 Main Street, Huntington Beach, California 92648, or at such other place as the holder hereof may inform the Buyer in writing, in lawful money of the United States_ 4. This Note is secured by the City Deed of Trust. 5. This Note shall accrue simple interest at the rate of seven percent (7%) per annum on the principal amount outstanding, from the date of disbursement, with fitrther provisions as follows: (a) However, if any event occurs giving the City the right to accelerate repayment of this Note, the entire unpaid and unforgiven principal balance owing hereunder shall, as of the date of such default, commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non -usurious interest rate permitted by law, whichever is less (the "Default Rate'). 6. The unpaid principal balance of this Note and all accrued but unpaid interest shall be due and payable on the earliest to occur of the following (which shall be referred to herein as the "Maturity Date"): (a) the tenth anniversary of the date of recordation of City of Huntington Beach Parcel Map No. 2009-122. (b) the date on which there is a Default by the Buyer under the terms of this Note, the Agreement, the City Deed of Trust, the Environmental Indemnity, or any deed of trust or other instrument securing the Buyer Debt, which is not cured or waived within the respective time period provided herein and therein. 7. The repayment terms of the Buyer Debt shall be as follows: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent (71/6) per annum commencing upon the close of escrow. (c) On or before 12:00 noon on the business day preceding the date scheduled for the CIose of Escrow, Buyer shall deposit Fifty Thousand Dollars ($50,000.00) with the Escrow Agent (the "Initial Deposit") which will be applied to the principal amount outstanding. Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to the City the sum of Fifty Three Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments"), of which Fifty Thousand Dollars ($50,000) will be applied to the principal amount outstanding. 2 G:PDA:2009Drafts:Beach-At1an1a: Beach-Atlanta0 —Buyer Note Final_2011_02_02 Item 6. - 62 HB -108- (d) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00) within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four (4) years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00) within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map, or within six (6) years of the Close of Escrow, whichever occurs first. (t) Buyer shall pay City Three Hundred Thousand Dollars ($300,000) within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight (8) years of the Close of Escrow, whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten (10) years from the Close of Escrow. (h) Except as otherwise provided by herein, payments to the City shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Buyer pursuant to the terms of the Buyer Documents (in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal amount owed. However, the Deposit shall be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of a default under the City Deed of Trust, all amounts received by the City from any party shall be applied in such order as the City, in its sole discretion, may elect. All sums paid by Buyer to City are nonrefundable. 8. Any breach by Buyer of the provisions of Section 202 (entitled "Prohibition Against Transfers") of the Agreement shall constitute a default under this Note. The cure periods under the Agreement and this Note in connection with such a default shall run concurrently. 9. Buyer waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Buyer hereby agrees to pay all costs and expenses, including reasonable attorney's fees, which may be incurred by the holder hereof, in the enforcement of this Note, the City Deed of Trust or any term or provision of either. 10. Upon the failure of Buyer to perform or observe any term or provision of this Note, or upon the occurrence of any event of default under the terms_ of the Agreement, the City Deed of Trust, or the Environmental Indemnity, the holder may exercise its rights or remedies hereunder or thereunder. All such rights and remedies shall 3 GTDA:200913raRs:Beach-Atlanta: Beach-Atlanta08_Buyer Note Final 2011_02_02 H -1 0- Item 6. - 63 be cumulative. Upon the event of a default that is not cured or waived within the time provided therefore, the whole of the unpaid principal and interest owing on this Note shall, at the option of City and without notice, become immediately due and payable. This option may be exercised at any time after any such event and the acceptance of one or more payments from any person thereafter shall not constitute a waiver of City's option. City's failure to exercise said option in connection with any particular event or series of events shall not be construed as a waiver of the provisions hereof as regards that event or any subsequent event. 11. (a) Subject to the extensions of time set forth in Section 12, and subject to the further provisions of this Section 11, failure or delay by Buyer to perform any material term or provision of this Note, the Agreement, the City Deed of Trust, or the Environmental Indemnity, constitutes a default under this Note. (b) City shall give written notice of default to Buyer, specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by City in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights orremedies. Delays by City in asserting any of its rights and remedies shall not deprive City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies- (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, the City shall give the Buyer written notice of such default. The Buyer shall have a period of ten (10) days after such notice is given within which to cure The default prior to exercise of remedies by the City. (e) If a non -monetary event of default occurs, prior to.exercising any remedies hereunder, City shall give Buyer notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Buyer shall have such period to effect a cure prior to exercise of remedies by City. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Buyer (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Buyer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. If Buyer fails to take corrective action or cure the default within a reasonable time, City shall give Buyer not to exceed 90 days, provided such limited partner is otherwise in compliance with the foregoing provisions. In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. (f) Any notice of default shall be deemed given only if either (1) dispatched by first class mail, registered or certified, postage prepaid, return receipt 4 GTDA2009Drafts:Beach-Atlanta: Beach-Atlanta08BvyuNote Final_2011_02_02 Item 6. - 64 -1 10- requested, to the addresses specified for the Buyer in Section 16 of this Note, or (ii) by electronic facsimile transmission to the facsimile numbers specified for the Buyer, followed by delivery by the method described in clause (i), or (iii) by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express) to the addresses specified for the Buyer in Section 16 of this Note. Receipt shall be deemed to have occurred on the earlier of (i) the date of successfully completed electronic facsimile transmission or (ii) the date marked on a written postal service or messenger or courier service receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If either party gives notice of a change of address in the manner specified in this paragraph, all notices, demands and communications originated after receipt of the change of address (or the effective date specified in the notice of change of address, if later) shall be transmitted, delivered or sent to the new address. (g) Notwithstanding specific provisions of this Note, non -monetary performance hereunder shall not be deemed to be in default where delays are due to causes beyond the control and without the fault of the party claiming an extension of time to perform (a "Force Majeure Delay"), provided that they actually delay and interfere with the timely performance of the matter to which they would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference, including: war; insurrection; strikes; lock- outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; acts or failure to act of any Governmental Agency (except acts or failure to act of City shall not excuse performance by City); the imposition of any applicable moratorium by a Governmental Agency; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the parry claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such parry obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. 12. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid. 13. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Buyer and its partners. Neither the Buyer nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the Buyer Debt. The sole recourse of the City with respect to repayment of the Buyer Debt shall be the 5 G:PDA2009Drafts:Beach-A0anta Beach-Atlanta08 Buyer Note Final_201I_02_02 H -111- Item 6. - 65 exercise of its rights against the Site and the improvements thereon and any related security for the Buyer Debt. Notwithstanding the foregoing, the City (a) may obtain a judgment or order (including, without limitation, an injunction)requiring Buyer or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Debt; and (b) may recover directly from Buyer or any other party: (i) any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee of Buyer or of any general partner of Buyer; (ii) any damages, costs and expenses incurred by City as a result of any misappropriation of funds provided for the Project as described in the Agreement, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; (iii) any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances; and (iv) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions_ 14. The address of Buyer for purposes of receiving notices pursuant to this Note is as follows: 21190 Beach Blvd., Huntington Beach, CA 92648. 15. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by City and Buyer. 16. Notwithstanding any provision in this Note, the City Deed of Trust or other document securing same, the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 17. This Note has been executed and delivered by Buyer in the State of California and is to be governed and construed in accordance with the internal Iaws thereof. 18. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable, and this Note shall be construed as if such illegal, invalid or unenforceable term or provision had not been contained herein. 6 GYDA:2009Drafts:Beach-Atlanta: Beach-Atlanta08_Buyer Note FinaT_201 1_02_02 Item 6. - 66 H -1 - 19. Time is of the essence in the performance of each provision hereof. IN WITNESS WHEREOF, Buyer has executed this Note as of the day and year set forth above. RTiVPP. print name ITS: (circle on hai. resident/Vice President AND By: ee641"'ll-SOc1ti/4 f" print name. ITS: (circle one) SecretaryhiefFinanctal /Asst. Secretary - Treasurer 7 G:PDA:2009Drafls:Beach-Atlanta: Beach-Atianta08_Buyer Note Final _20110202 Item 6. - 67 11FCOM" RMUE9T1:0 ". FIRST AMERICAN TrU COMPANY W BMISM � v►cE8 ARTMENT FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator ;3n 3W3C19--A (z-g- (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code § 6103 & 27383) APN: DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY BEACH PROMENADE LLC FOR THE BENEFIT OF THE CITY OF HUNTINGTON BEACH This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of Rents) is made this _ day of , 20_ by Beach Promenade LLC, a California Limited Liability Company (hereinafter referred to as "Trustor") (whose address is 21190 Beach Blvd., Huntington Beach, CA 92648, to First American Title Company, (hereinafter called "Trustee"), for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter called "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648. Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the following property (the "Trust Estate"): (1) All of Trustor's rights, title and interest in and to that certain real property in the City of Huntington Beach, County of Orange, State of California more particularly described in Exhibit "A" attached hereto and by this reference made a part hereof (hereafter referred to as the "Subject Property"); (2) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (the "Improvements"); (3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefiting or otherwise relating to the Subject Property 1 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atianta09_City Deed of Trust Final_2011_02_02 Item 6. - 68 H - 14- or the Improvements, including easements, rights -of -way and development rights (the "Appurtenances"). (The Appurtenances, together with the Subject Property and the Improvements, are hereafter referred to as the "Real Property"); (4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or occupancy of the Trust Estate, including those past due and unpaid (the "Rents"); (5) all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (the "UCC"), and whether existing now or in the future) now or in the future located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water - , tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor (the "Goods," and together with the Real Property, the "Property"); and (6) all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types on 2 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 H -115- Item 6. - 69 intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (the "Intangibles"). Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estate described above in which a security interest may be created under the UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a "secured party" under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c) and 9604 of the UCC. FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, all of the following: (1) Due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in that certain promissory note in the original principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), payable as set forth in the Method of Financing, executed by Trustor ("Buyer" therein) of even date herewith (the "Buyer Note"); (2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of One Million Two Hundred Thousand Dollars ($1,200,000.00) or so much thereof as shall be advanced, evidenced by the Buyer Note, with interest, according to the terms of the Buyer Note; (3) Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when such future advance of obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; (4) The Purchase Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Purchase Agreement, the Buyer Note, the Assignment of Rents, the Assignment of Agreements, and the UCCI Financing Statement, all as described in the Purchase Agreement (collectively referred to as the "Secured Obligations") and all of their terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced. Any capitalized term that is not otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the Purchase Agreement. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 3 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atianta09_City Deed of Trust Final_2011_02 02 Item 6. - 70 H -1 16- 1. That Trustor shall pay the Buyer Note at the time and in the manner provided therein, and perform the obligations of the Trustor as set forth in the Secured Obligations at the time and in the manner respectively provided therein; 2. That Trustor shall not permit or suffer the use of any of the Property for any purpose other than the uses permitted by the Secured Obligations; 3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. 4. That, subject to the prior rights, if any, of a lender whose lien is senior to this Deed of Trust ("Senior Lender"), all rents, profits and income from the Trust Estate are assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations. 5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the Trust Estate and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the Improvements insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by the Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies shall be deposited with the Beneficiary; 7. To pay, at least 10 days before delinquency, any taxes and assessments affecting the Property; to pay, when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7. 4 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 HB -117- Item 6. - 71 8. To keep the Property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon (subject to Trustor's right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof; not to commit, suffer or permit any act upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property; not to permit or suffer any material alteration of or addition to the Improvements without the consent of the Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees. Notwithstanding the foregoing, in the event of default under this Deed of Trust, the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary shall specify in writing the particular records that must be maintained and the information or reports that must be submitted; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Buyer Note; 13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor to keep and perform all the covenants, conditions, and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Buyer Note shall at the option of the Beneficiary of this Deed 5 G:PDA:2009Drafts:Beach-Atlanta:Beach-Attanta09_City Deed of Trust Final_2011_02 02 Item 6. - 72 HB -118- of Trust become due and payable, anything contained herein to the contrary notwithstanding; 14. . Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor shall, at Beneficiary's written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure) record in the Office of the Recorder of Orange County, a surety bond in an amount one -and -one-half (12) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary; 15. That any and all improvements made or about to be made upon the premises covered by the Deed of Trust, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14, Division 3, of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of Senior Lender, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. Subject to the rights of the Senior Lenders, all such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including attorney's fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or 6 G:PDA:2009Dra8s:Beach-Atlanta:Beach-Atlanta09_city Deed of Trost Final_2011_02_02 NB -11- Item 6. - 73 damaged, shall be applied to the amount due under the Buyer Note secured hereby. No amount applied to the reduction of the principal shall relieve the Trustor from making regular payments as required by the Buyer Note. If the Buyer Note has been repaid, the remainder of the balance shall revert to the Trustor; 18. Upon default by Trustor in making any payments provided for in the Buyer Note secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby; 19. a. Prior to the repayment in full of the Buyer Debt, the Trustor shall not assign or attempt to assign the Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Improvements, or any portion thereof or interest therein (referred to hereinafter as a "Transfer"), without prior written approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary shall not unreasonably withhold or delay its decision regarding consent. If consent should be given, any such transfer shall be subject to this Section 19, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. b. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary, to fulfill the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee, by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary shall expressly assume all of the obligations of the Trustor under the Secured Obligations, and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust. There shall be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval shall be indicated to the Trustor in writing. C. In the absence of specific written agreement by the Beneficiary, no unauthorized Transfer, or approval thereof by the Beneficiary, shall be deemed to relieve the Trustor or any other party from any obligations under the Secured Obligations. d. In the event of a Transfer prior to the time the Buyer Debt is paid in full and without the prior written consent of the Beneficiary, the net proceeds shall be paid to the 7 G:PDA:2009Dra8s:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final _2011_02_02 Item 6. - 74 HB -120- Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the Buyer Debt. e. (1) As used herein, "Transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project, except as provided in this Section 19 or the Secured Obligations. (2) "Transfer" shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of the Agreement, except as set forth in the Secured Obligations. f. Beneficiary shall not unreasonably withhold, condition or delay its decision regarding approval of any matter for which its approval is required hereunder. Any disapproval shall be in writing and contain Beneficiary's reasons for disapproval. 20. After the lapse of such time as may then be required by law following the recordation of a notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Buyer Note; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and 8 G:PDA:2009Dra8s:Beach-Atlanta:Beach-Atianta09_city Deed of Trust Final_201I_02_02 Hl -121- Item 6. - 75 duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, including but not limited to the obligations set forth in the Agreement, and upon surrender of this Deed of Trust and any note, instrument or instruments setting forth all obligations secured hereby to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the Property then held hereunder. The recitals in such reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof. To the extent permitted by law, the grantee in such reconveyance may be described as "the person or persons legally entitled thereto." Neither Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. When the Property has been fully reconveyed, the last such reconveyance shall operate as a reassignment of all future rents, issues and profits of the Property to the person or persons legally entitled thereto; 24. The trust created hereby is irrevocable by Trustor; 25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Buyer Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several; 26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor,-Beneficiary, or Trustee shall be a party unless brought by Trustee. Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law; 27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this 9 G:PDA:2009Drafts:Beach-Attanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 Item 6. - 76 H -122- Deed of Trust. After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been admitted to the Trustor, Beneficiary shall send to the Investor Limited Partner a copy of all notices of default and all other notices that Beneficiary sends to Trustor, at the address for the Investor Limited Partner as provided by written notice to Beneficiary by Trustor. 28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary. 29. Reserved. 30. Trustor agrees that, except as otherwise provided in the Buyer Note, upon sale or refinancing of the property, the entire principal balance of the debt secured by this Deed of Trust, plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due and payable. 31. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the exercise of its rights against the Property and any related security for the Buyer Debt. Notwithstanding the foregoing, Beneficiary may obtain a judgment or order (including, without limitation, an injunction) requiring Trustor or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Debt; and may recover directly from Trustor or from any other party: (a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer; director or employee of Trustor, or of any general partner of Trustor; (b) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the rehabilitation of the Property as described in the Agreement, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; (c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity; and (d) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 10 G:PDA2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final 2011_02_02 HB -123- Item 6. - 77 32. Notwithstanding specific provisions of this Deed of Trust, non -monetary performance hereunder shall not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter, and, despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor: War; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental Authority (except acts or failure to act of the Beneficiary shall not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Trustor shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. 33. If the rights and liens created by this Deed of Trust shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the unsecured portion of such obligations shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations. 34. (a) Subject to the extensions of time set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under this Deed of Trust. (b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the Beneficiary. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 11 G:PDA:2009Drafls:Beach-Atlanta:Beach-Aflanta09_City Deed of Trust Final_2011_02_02 Item 6. - 78 NB -124- (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary. (e) If a non -monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. (f) Except as otherwise required to comply with the provisions of California Civil Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Trustor; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. REST OF PAGE INTENTIONALLY LEFT BLANK 12 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 H -125- Item 6. - 79 IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set forth above. !' "TRUSTOR" Beach tint name ITS: (circle o Chairma resident/Vice President M. X f I" SA010(lwod print name ITS: (circle one) Secretary hief Financial Office Asst. Secretary - Treasurer APPROVED BY: THE C rY OF TINGTON BEACH, a munic al core ion of the State of California Mayor AS TO FORM: City Attorney INITIAD7 APPROVED: _'e� -2�— Director of Econom' Development REVIEW AID APPROVED: Administrator 13V G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_Ciry Deed of Trust Final_2011_02_02 Item 6. - 80 HB -126- IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day set forth above. 'WI— N "TRUSTOR" Beach print-Dme ITS: (circle o Chairm resident/VicePresident AND fUA r��ua•,� s�sSovti,�,n/ print name ITS: (circle one) Secretaryhief Financial Offic Asst. Secretary - Treasurer � 1�fI� SAS 3oulJis�� �c"'�'RM,aa� -u. ,�etml sA150 (fiv`4 l CwJ APPROVED BY: THE CJ TY OF Mayor MTINGTON BEACH, a of the State of California AS TO FORM: &City Attorney INITIATED AN APPROVE : Director of Econ7 Development REVIE APPROVED: 7 ty Administrator 1 G:PDAi2009Drafts:Beach-Atianta:Bcach-AtlantaC9_City Deed of Trust Final 20i 102_02 HB -127- Item 6. - 81 State of California County of Orange ) On hi&44t. D-4 , 2V0!/ before me, 7 • L' a Notary Public, personally appeared. efk& .! a,liq L , who proved to me on the basis of satisfactory evidence to be the personQ whose namejj ismsubscribed to the within instrument and acknowledged to me that hefsl� )executed the same in hislbeAZD authorized capacity fgs and that by his4w4signaturgs on the instrument the persorin or the entity upon behalf of which the persoro acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P L. ESPARIA iiOMM'S3i0n 0 18S1021 Notary Public • CaHlortda Orange County Signature (Seal) eomm. E Au 4, 2013 " State of California ) County o€srang ) On U&;r(.% 29 ,?-011 before me, -R� n6ka Uy1 a Notary Public, personally appeared Bt�.,ams gn?rri► i's�ow► =also �`�`hw o proved to me on the basis of satisfactory evidence to be the person(s) whose names) K/are subscribed to the within instrument and acknowledged to me that hoAhe/they executed the same in hisf wr/their authorized capacity(ies), and that by hisfher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. RHO p N C MM.#1844094 ►aora... Pv _ ; � � .auFe>�: fug Signature (Seal) fi�sr,.�cEwsecu�rr My Comm Ypt'-"' -4"i; 3 U . var.•°9`rt�cw� .. 14 G:PDA:2009Drafts:Beach-Attania:Beach-Atianta09 City Deed of Trust Final 2011_02_02 Item 6. - 82 HB -128- State of California County of Orange On Fabx Ayw 0-4 . P011 before me, • L. _, a Notary Public, personally appeared -,73-FCAi,d&a c T L&jL. EjyrA&2 , who proved to me on the basis of satisfactory evidence to be the person(p whose nameM }s rpsubscribed to the within instrument and acknowledged to me that+eMw e' xecuted the same in his/heAZO authorized capacitytMand that by lisAter et ignaturq on the instrument the person; or the entity upon behalf of which the persor4Oacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature State of California County of Orange On P. L. ESPARZA Commission # 1857021 Notary Public - California Orange County (Seal) 11011 Comm. E ire$ Aug4, "v% before me, , a Notary Public, personally appeared , who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature. (Seal) 14 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed ofTrast Final_2011_02_02 NB -129- Item 6. - 83 PARCELS 2 AND 4 OF PARCEL MAP NO.2009-122, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK PAGES THROUGH INCLUSIVE, OF PARCEL MAPS, RECORDS OF THE COUNTY RECORDER OF SAID COUNTY. AS SHOWN ON EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF. V *LDEN & SSOCIATES CIVIL ENGINEERS - LAND SURVEYORS - PLANNERS 2552 WHITE ROAD, SUITE B • IRVINE, CA 92614-6274 (949)-660-0110 FAX:660-0418 EXHIBIT "A" LEGAL DESCRIPTION W.O. No.1623-478-001 Date: 12/16/2010 Engr.B.J.W. Chk'd. J.W. Sheet I of i Item 6. - 84 H -1 30- T- ATLANTA AVENUE PARCEL 1 N 89043' 12" W 198.00' .00' j 110.00' v) 0 N Lr)00 W W �1 f 0 0 in m O z 0 U `t' Q z w 0 m Q V) z 0 Li1 PARCEL 2 vp 0.6501 ACRES -0, tO Q, o tj C14 N T-' u � � N z o z 0 N N89043' 12" W 1 10.00, z Y ' 100 50 0 100 SCALE IN FEET 1 inch =100 ft. U P' a PARCEL 3 > ! ! N 9°42'55' W 331.02' V 88.00' j 243.02' c� J w � co� Q `D o IL °ocNv PARCEL 4 o 1.232 ACRES z I� oD W � L 00 PARCEL 5 z N 89025'31" W 243.00' vlocss EN& EXHIBIT "B" OCIATES SKETCH TO ACCOMPANY A LEGAL DESCRIPTION CIVIL ENGINEERS - LAND SURVEYORS - PLANNERS 2552 WHITE ROAD, SUITE B •IRVINE, CA 92614-6236 W.O. No. 1623-478-001 Date 12/16/2010 (949) 660-0110 FAX: 660-0418 Engr. B.J.W. Chk'd. J.W. Sheet I of 1 HB -131- Item 6. - 85 ENVIRONMENTAL INDEMNITY IN FAVOR OF THE CITY OF HUNTINGTON BEACH THIS ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated , 2011, and made by Beach -Promenade LCC, a California limited liability company (referred to as "Buyer"), whose address for purposes of giving notices is 21190 Beach Blvd., Huntington Beach, CA 92648, in favor of THE CITY OF HUNTINGTON BEACH (the "City"), whose address for purposes of giving notice is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH WHEREAS, Buyer has agreed to acquire the real property in the City of Huntington Beach described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon (collectively referred to as the "Property"); WHEREAS, Buyer and the City, entered into that certain Purchase Agreement, dated December 6, 2010 (the "Agreement"), pursuant to which the City agreed to sell to Buyer for the purpose of expanding an existing shopping center (the "Project") (the Agreement and the documents and instruments referred to therein which are being executed by Buyer concurrently herewith are referred to collectively as the "Purchase Documents"); WHEREAS, Buyer has agreed to acquire the Property in an "As -Is" condition, and execute and deliver to the City this Indemnity to induce the City to make the Sale; NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Buyer hereby agrees with City as follows: DEFINITIONS For the purpose of this Indemnity, "Hazardous Materials" or "Hazardous Substances" shall include, but not be limited to, oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances defined as "extremely hazardous substances," "hazardous substances," "hazardous materials," "hazardous waste" or "toxic .substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, including the Superfund Amendments and Reauthorization Act of 19.86, 42 U.S.C. Sections 9601 et sea. ("CERCLA'); the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of I976, as amended, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as emended, 33 U.S.C. Section 1251 et se -; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency Planning and Community Right -to -Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe G:PDA:2009Draft:Beach-Atlanta:13each-Atlantat0 Environmental Indemnitv Final 2011 02 02 Item 6. - 86 SIB -132- Drinking Water Act, as amended, 42 U.S.C. Section 300f et seg.; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code, as "infectious waste" in Section 25117.5 of the California Health and Safety Code, or as "hazardous substances" in Section 25316 of the California Health and Safety Code or "hazardous materials" as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and orders and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity shall have the meanings ascribed to them in the Housing Agreement with the same force and effect as if set forth in full below. 2. COVENANTS AND INDEMNITY The following covenants, and indemnities are hereby given and made by Buyer: 2.1 Covenants. (a) Buyer covenants that it will strictly comply with any and all laws, regulations, and/or orders which may be promulgated from time to time relating to Hazardous Materials ("Hazardous Materials Laws'), to immediately take, at Buyer's sole expense, all remedial action required by any Hazardous Materials Law or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claim (as defined herein below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials Law or in relation to any Hazardous Materials Claim. (b) Buyer covenants that the Property will not, while Buyer is the owner of any portion thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, transportation, presence, discharge or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in strict compliance with all Hazardous Materials Laws and required in connection with the routine rehabilitation, operation and maintenance of the Property. (c) City shall have the right, at any time, to conduct an environmental audit of the Property at City's expense, unless Hazardous Materials are found in violation of this Indemnity, then at Buyer's sole cost and expense, and Buyer shall reasonably cooperate in the conduct of any such environmental audit. Other than. in an emergency, such audit shall be conducted only after prior written notice has been given to Buyer and only in the presence of a representative of Buyer. Buyer shall give the City and its agents and employees access to the Property to remove, or otherwise to mitigate the effects of, Hazardous Materials and Buyer shall not unreasonably delay or condition such access. (d) Buyer shall not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by any Hazardous Materials Laws, and, with respect to any such material currently present in or brought onto the Property after Buyer acquired the Property, Buyer shall promptly either (i) remove or cause to be removed any material that such Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply with such Hazardous Materials Laws, all at Buyer's sole cost and expense. If Buyer shall fail to so do within the cure period permitted under applicable law, regulation, or order, the City may do whatever is necessary to eliminate said substances from the 2 G:PDA:2009DraR:Beach-Atlanta:Beach-Atlantal0 Environmental Indemnity Final_2011_02_02 H -1 - Item 6. - 87 premises or to otherwise comply with all Hazardous Materials Laws, and the costs thereof shall be added to the Obligations (as hereinafter defined) of Buyer under this Section 2. (f) Buyer shall immediately advise the City in writing of any of the following: (i) any pending or threatened claim against Buyer or the Property by any governmental entity or agency or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any condition or occurrence on the Property that (A) results in noncompliance by Buyer with any Hazardous Materials Laws, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any Hazardous Materials Law, or (C) could reasonably be anticipated to form the basis of a Hazardous Materials Claim against the Property or Buyer. 2.2 Indemnity. Buyer hereby agrees to defend, indemnify, protect, and hold harmless the City and its respective members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against any and all damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third party tort claims), litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, attorneys' and experts' fees and disbursements) of any kind or of any nature whatsoever, whether foreseeable or unforeseeable, (collectively, the "Obligations") which may at any time be imposed upon, incurred by or asserted or awarded against the City as a direct or indirect consequence of: (a) The presence of any Hazardous Materials on, in, under, or affecting all or any portion of the Property or any surrounding areas, which were stored, discharged, released or emitted after the Close of Escrow conveying the Property from the City to Buyer; (b) The breach of any covenant made by Buyer in Section 2.1 hereof, or (c) The enforcement by the City of any of the provisions of this Section 2.2 or the assertion by Buyer of any defense to its obligations hereunder. 3. BUYER'S UNCONDITIONAL OBLIGATIONS 3.1 Unconditional Obligations. Buyer hereby agrees that the Obligations will be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Purchase Documents or affecting any of the rights of the City with respect thereto. The obligations of Buyer hereunder shall be absolute and unconditional irrespective of, and Buyer waives any defense based upon, (a) The validity, regularity, or enforceability of the Purchase Documents or any other instrument or document executed or delivered in connection therewith; (b) Any alteration, amendment, modification, release, termination, or cancellation of any of the Purchase Documents, or any change in the time, manner, or place of G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0 Environmental Indemnity Final_203I_02_02 Item 6. - 88 H -134- payment of, or in any other terra in respect of, all or any of the obligations of Buyer contained in any of the Purchase Documents; (c) Any extension of the maturity of or any waiver of, or consent to any departure from, any provision contained in any of the Purchase Documents; (d) Any exculpatory provision in any of the Purchase Documents limiting the City's recourse to property encumbered by the Deed of Trust securing the Property. (e) Any exchange, addition, subordination, or release of,. or nonperfection of any lien on or security interest in, any collateral for the Buyer Debt, or any release, amendment, waiver of, or consent to any departure from any provision of, any other surety or guarantee given in respect of the Buyer Debt; (f) The insolvency or bankruptcy of Buyer or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Buyer Debt; or (g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of Buyer, Buyer's General Partners, or any other indemnitor or guarantor with respect to the Buyer Debt or any or all of the Obligations. 3.2 Continuation. The term of this Indemnity shall commence upon close of escrow and shall continue until such time as no legal action can be successfully brought against City due to applicable statutes of limitation. This Indemnity (a) is a continuing indemnity and shall remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Loan or the release or other extinguishment of the Deed of Trust, or any other security for the Loan); and (b) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the City upon the insolvency, bankruptcy, or reorganization of Borrower, Borrower's General Partners or otherwise, all as though such payment had not been made. 3.3 Survival. Borrower's duty to indemnify shall survive any judicial or non judicial foreclosure under the City Deed of Trust or transfer of the Property in lieu thereof, the release and reconveyance or cancellation of the City Deed of Trust, and the satisfaction of all of Borrower's obligations under the Loan Documents; provided, however, that the City shall only have the right to enforce this Indemnity after any such transfer, reconveyance or foreclosure, with respect to Hazardous Materials present onthe the Property before the date of the transfer, reconveyance or foreclosure- 4 G:PDA:2009Drafr:Beach-Atlanta:Be3ch-Atiantal0_Environmental Indemnity Final_2011_02_02 H -13 - Item 6. - 89 1 f i 4. WAIVER Buyer acknowledges that possible defenses to the enforceability of the Obligations may presently exist and/or may arise hereafter and as part of the City's consideration for entering into the Agreement. It has specifically bargained for the waiver and relinquishment by Buyer of all such defenses. Buyer agrees that it has had the opportunity to seek and receive legal advice from skilled legal counsel of its choosing and represents and confirms that Buyer is fully informed regarding, and thoroughly understands, the nature of such possible defenses, the circumstances under which they may arise, the benefits that they might confer upon Buyer and the legal consequences to Buyer of waiving such defenses. Buyer makes this Indemnity with the intent that this Indemnity shall be fully enforceable by the City and that the City is induced to enter into the Agreement in material reliance upon such presumed full enforceability. Nothing herein contained shall be deemed to prohibit Buyer from contesting, in good faith, the validity of any Hazardous Materials Claims or from asserting that Buyer is not in breach of its obligations under this Indemnity. 5. NOTICES Any notice, demand, statement, request, or consent made hereunder shall be in writing and shall be personally served, mailed by first-class registered mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, or given by electronic facsimile ("fax") transmission to the fax numbers stated below, with confirmations mailed by first class registered mail, return receipt requested to the address set forth above, of the party to whom such notice is to be given (or to such other address as the parties hereto, shall designate in writing): In the case of the City: 714-374-1590 In the case of Buyer: 714-374-2211 Any notice that is transmitted by fax transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. 6. MISCELLANEOUS 6.1 Buyer shall make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to City, as applicable, at its address specified in the first paragraph hereof. 6.2 No amendment of any provision of this Indemnity shall be effective unless it is in writing and signed by Buyer and City, and no waiver of any provision of this Indemnity, and no consent to any departure by Buyer from any provision of this Indemnity, shall be effective unless G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental indemnity Final 2011_02 02 Item 6. - 90 H -1 36- it is in writing and signed by the City, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 6.3 No failure on the part of City to exercise, and no delay in exercising, any right hereunder or under any Purchase Document shall operate as a waiver hereof or thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of City provided herein and in the Purchase Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of City hereunder the Agreement against any party thereto are not conditional or contingent on any attempt by the Ci�t to exercise any of its rights hereunder or under the Agreement against such party or against any other person or collateral. 6.4 If any provision of this Indemnity shall be determined by a court of competent jurisdiction to be invalid; illegal or unenforceable, then that provision shall, as to such jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction. 6.5 This Indemnity shall (a) be binding upon Buyer, and Buyer's successors and assigns; and (b) inure, together with all rights and remedies of City hereunder, to the benefit of City, their respective directors, officers, employees, and agents, any successors to the City's interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of the City's rights and remedies under the Agreement, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. 6.6 Buyer hereby (a) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Orange County in any action or proceeding arising out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court. Buyer irrevocably consents to the service of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity or in any other manner provided by- law. Buyer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced-- in any other jurisdiction by suit on the judgment or in any other manner provided by law. 6.7 The title of this document and the captions used herein are inserted only as a matter of convenience and for reference and shall in no way define, limit, or describe the scope or the intent of this Indemnity or any of the provisions hereof. 6.8 This Indemnity shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California. 6 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 HB -137- Item 6. - 91 6.9 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one agreement. BEACH PROMENADE A California lira By: Its: 7 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental ]ndemnity Final _2011_02_02 Item 6. - 92 HB -138- EXHIBIT A LEGAL DESCRIPTION G:PDA:2009Draft:Beach-Atlanta:Beach-Atlanta]0_Environmental Indemnity Final_201 ]_02_02 H -1 39- Item 6. - 93 Exhibit A SHEET 1 QF 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS, AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED 1N BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89'37'06" EAST, 89.21 FEET, TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1, OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26,1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09-50'39" WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9'10'25", AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00'4V14' WEST, 730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89'37'06" WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00-40'14n EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09'50'39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS (2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS -OF -WAYS AND EASEMENTS OF RECORD_ EXHIBIT "B" ATTACHED AND THIS REFERENCE MADE A PART HEREOF_ �10 01N1) sv� U � O � FXP.12-31-it a JOSEPH G_ DERLETH �9 S. 734D �. s Q PLS 7340, EXPIRES 12/31/11 lF OF CAL\1 . Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE 1j, Iid CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 94 HB -140- i NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94-590 (N89-37'06"E) ATLANTA AVE 30!- f-------------L------- 'ARCEL 2, PM 84-590,------� 8> '_02/48-50 PM O81 44_%40- ?' ! € W'LY LINE SEC 13� { T6S, R11 W, SBM �U3 I i1ls6 r.7v rn M 1-110' t G p t ( )= RECORD PER PARCEL MAP rn j 8 84-590, FILED IN BOOK 202, z / PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,-----{- 202/48-50 PM I I z ! o� o{ I � I t J { p i t PARCEL 2, PM 84-590,----j1 202/45-50 PM t INCLUSIVE OF PARCEL MAPS V,�==PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 90,340 SQ FT, -'(2.07 ACRES) EXHIBIT B SHEET 1 QE 3 - _ - GRAPHIC SCALE LY LINE >so � .75 1 inch o 150 f iso .N PARCEL 1 PM 84-590 202/48-50 PM i ( IN FM ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS HB -141- Item 6. - 95 ATLANTA AVE (N8937'06"E) �22'v/ VNY COR 5EC 13En IR11W, SBM o PM 84-590 0 -� ( } = RECORD PER PARCEL MAP I o 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. eo (( )) = RECORD PER STATE I HIGHWAY MAP FILED IN BOOK c' 5, PAGES 45 AND 46. ----88' 22' �= PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. 1 `` LINE TABLE: 1 L1= N89'37'06"E, 89.21' L2= N0Q'40'14"W, 730.41' I PARCEL 2, C PM 84-590,� 70 C m z 202/48-50 PM� �> � n C) o f~W'LY LINE SEC 13 ` M x ? T6S, R11 W, SBM -z-i IOU M �o POINT OF ` BEGINNING, SE v 1 z co COR PARCEL 2, rn o PM 84-590, 202/48-50 PM (88.00')—(54.91'JL1� N'LY LINE PARCEL PM 84-590 (N89'37'06"E, 489.56') GRAPHIC SCALE 1 inch =50 It 3p p 25 Sp ( IN FEET') E"LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. EXHIBIT B SHEET 2 OF 3 NE COR PARCEL 1, PM 84-590, 202/48-50 PM _ V l EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 96 HB -142- a { GRAPHIC SCALE { 1 inch =50 ft NTY LINE SEC 13 5D u 25 so M T6S, R11 W, S.B.M. — ! ATLANTA AVE 1?1 � -(N89'37'06" E) NW'LY COR SEC 13 30, DrD R11 W, SBM PER PM 84-590 = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 r INCLUSIVE OF PARCEL MAPS. F PARCEL 2, PM 84-590, { 202/48-50 PM j/ { PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, W Q 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, j ri STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. I I c r LINE TABLE: 4 L3= S89'37'06"W, 88.00' cc: LINE SEC 13 T6S, R11W, SBM rno rnG> o � PARCEL 2, � M = PM 84-590, 202/48-50 PM m 0 �22'--t r- 8. 70 < M vi IN FEET ) 50 50' 44_' 40; EXHIBIT B �► SHEET 3 OF 3 I� E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH hl DEPARTMENT OF PUBLIC WORKS Item 6. - 97 UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS (front and back) CAREFULLY NAME & PHONE OF CONTACT AT FILER [opfionaq B. SENDACKNOWLEDGEMENTTO: (NameandAddmss) DA i City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager 1. DEBTOR'S EXACT FULL LEGAL NAME - insert ony, ng_e debtor r la.OReMIZATIONS NAME Beach Promenade, LLC. OR tb. INDIVIDUALS LAST NAME 1r. MAILINGADDRFSS 21190 Beach Blvd RE i1e. TYPE OF ORGANIZATION KIN LLQ a THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY do not NAME Huntington Beach I CA ( 92648 JURISDICTION OF ORGANIZATION ;1g.ORGANIZATIONALIDA.ff" i ❑NONE 2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - irmelt o* one debtor name Pa er 2b)-do not abbreviate or oomb'me remes OR 2a. ORGANIZATIONS NAME 2b. INDNIDUAVS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 2a.MAILINGADDRESS CITY STATE POSTALCODE COUNTRY %DD'LINFU Kh i2e. TYPE OF ORGANIZATION i21. JURISDICTION OF ORGANIZATION i2g. UKGANIZATIONALIEM a any MGAN17ATION )9MR NAME for NAMF of TOTAL ASSInNFF of ASSIGNOR SlPI _ inter! nnty ene cea�md early name 13a nr 361 ❑NONE oR 3a. ORGANIZATIONS NAME City of Huntington Beach 3b. INDIVMIJAUS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3t MAILINGADDRESS CITY STATE POSTALCODE COUNTRY 2000 Main Street Huntington Beach CA 92648 ,.. a rn . a.a.ni crnr��ww�ulc.uimwartJ wnenim. This financing covers the following collateral. See attached legal description. FILING OFFICE COPY — NATIONAL UCC FINANCING STATEMENT (FORM UCC1) —CALIFORNIA (REV. 01/01108) Item 6. - 98 H -144- UCC FINANCING STATEMENT ADDENDUM FOLLOW INSTRUCTIONS (ttont and back) CAREFULLY 9. NAME OF FIRST DEBTOR (1a or 1b) ON RELATED FINANCING STAI ea. ORCMZATION NAME Beach Promenade, LLC 10. MISCELLANEOUS; I THE ABOVESPACEISFOR FILING OFFICE USEONLY 11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME —insert wily one name cite or 11b)— do not abbreviate orcombine names NAME Un 11b. MDIVIDLIAVS LAST NAME FIRST RAME btIWLE NAME SUFFIX 11a MAILiNGADDRMS CITY STATE POSTALCODE COUNTRY ADD•LINFORE ;Ste. TYPE OF ORGANIZATION ;IILJURf3DIGIIUN0F0KUAN1ZATLVN ;119.UKURNILAffUNAL1U7.vafry ORGANIZATION DEBTOR ❑NONE R2.A=DD1MT10KAL SECURED PARTY S orLj ASSIGNOR SIPS NAME — insert only orye name (12a or 12b) 12a. ORGANIZATION'S NAME OR 12b, INDNIDUAVS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 12c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY I& This FINANCING STATEMENT covers ❑ timber to be cut or ❑ as•exbaded 16, Adddlonal collateral description; collateral, or Is filedasa❑fbchnefirmg. See attached legal description. 14. Description of real astata; ' 15. Name and address of a RECORD OWNER of above -described real estate (d Debtor does W have a record interesq. . Debtor Is a QTrust of [7]Trustee acting with respect to property held in trust cr ❑Decedent's Estate 18. Check only it applicable and check only one box. ❑Debtor Is a TRANSMITTING UTILITY - []Filed In connection with a Mamdactured-Home Transaction — effective 30 years ❑Filed in connection with a Publo-Finance Transaction —effective 30 years FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT ADDENDUM (FORM UCC IAd) —CALIFORNIA (REV. 01/01/08) Item 6. - 99 PARCELS 2 AND 4 OF PARCEL MAP NO.2009-122, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK PAGES THROUGH INCLUSIVE, OF PARCEL MAPS, RECORDS OF THE COUNTY RECORDER OF SAID COUNTY. AS SHOWN ON EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF. Vw�SSOCIATES EN & CIVIL ENGINEERS - LAND SURVEYORS - PLANNERS 2552 WHITE ROAD, SUITE B • IRVINE, CA 92614-6274 (949)-660-0110 FAX:660-0418 EXHIBIT "A" LEGAL DESCRIPTION W.O. No.1623-478-001 Date: 12/13/2610 Engr.B.J.W. Chk'd. J.W. Sheet 1 of 1 Item 6. - 100 HB -146- ATLANTA AVENUE PARCEL 1 N 89043' 12" W 198.00' .00'—i 110.00, i� 0 N LO 00 Q 00 J( o p o Ln m Q z Q z w � m U D 07 z O e w Of V) M PARCEL 2 00 am 0.601 ACRES cO Z. c� N csJ N ON O I O z O z O N ui 4- N89"43' 12" W 110.00, O z Q 42'55" W 100 50 0 100 SCALE IN FEET 1 inch "=100 ft. U 1 gf� JAB -�T l V PARCEL 3 331.02' PARCEL 4 1.232 ACRES II m W � "� o a- o �. r` O N . O PARCEL 5 z N 89025'31" W 243.00' kSDEN & EXHIBIT "B" SOCIATES SKETCH TO ACCOMPANY A LEGAL DESCRIPTION CIVIL ENGINEERS - LAND SURVEYORS - PLANNERS 2552 WHITE ROAD, SUITE B •IRVINE, CA 92614-6236 W.O. No. 1623-478-001 Date 12/1312010 (949) 660-0110 FAX: 660-0418 Engr. B.J.W. Md. J.W. Sheet I of I H -147- Item 6. - 101 EXHIBIT 12 CONDITION OF THE PROPERTY The Property was acquired by the City several decades ago. It was formerly owned by the State of California, Department of Transportation (Caltrans). The Property was previously used for roadway and public right of way purposes. The Huntington Beach Fire Department has identified two existing oil wells on the Property (Surf #1-6, Surf #2) that do not meet the 1989, present, or 2010 new Division of Oil and Gas abandonment standards. For this reason both wells will have to be vented with an approved system. A vertical riser will have to be installed. The Huntington Beach Fire Department recommends that no structures be built or placed over either of the abandoned oil wells. If any of the wells are to be covered by a structure, it may require re -abandonment under current 2010 Division of Oil and Gas standards, and may also require an approved vent system post 2010 abandonment standards. If the structure is to be public, or multi -family, a 24-hour continuous methane monitoring system should be installed. In addition to the existing oil wells, there is an existing 8-inch water main along the eastern edge of the current frontage road, over which the City has reserved and recorded a 10` wide easement in preparation for the conveyance of the property. There is a 3-inch gas main along the western edge of the frontage road that is subject to a relocation agreement between the Buyer and the Southern California Gas Company. The City is unaware of any other issues with the Property, and it is sold to Buyer in "As -Is" condition. G:PDA:Beach-Atlanta: Beach-At]antaI2_Condition Of The Property Draft 2 2010_1 I_19 Item 6. - 102 HB -1 8- t: /r 40 ASSIGNMENT AGREEMENT FROM BEACH PROMENADE LLC TO THE CITY OF HUNTINGTON BEACH This ASSIGNMENT AGREEMENT is made this day of 20_1Q, by and between BEACH PROMENADE LLC, a California Limited Liability -Company, hereinafter referred to as "Assignor," and the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to "City or Assignee." RECITALS WHEREAS, on December 6, 2010, Assignor entered into a Purchase Agreement with the City, whereby City agreed to sell, and Assignor agreed'to buy, certain real property (the "Property") owned by Assignee; and As a condition of sale, and in order to secure Assignor's obligations under the Purchase Agreement, Assignor has agreed to assign to City all of its rights, title and interest in all work product prepared by Assignor related to the purchase of the Property, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to the Property, the contracts (if any) between Assignor and its architect and between Assignor and its general contractor, and all similar rights and property interests (the "Work Product"), NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, Assignor and Assignee agree as follows: 1. Assignor hereby assigns all of its right, title, and interest in the Work Product to Assignee. In the event of any termination of the Purchase Agreement, within ten (10) days of such termination, Assignor shall transmit all of the Work Product to Assignee. 2. Assignee hereby accepts and consents to the assignment of the Work Product. 3. Notwithstanding the foregoing, Assignor agrees to defend and indemnify the City from any and all claims, actions, judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from Assignor's use of the Work Product prior to this Assignment. SIGNATURES ON FOLLOWING PAGE Beach-Atlanta13_Assignmentof AgreementsFinal_2011_02 02 HB -14- Item 6. - 103 IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by and through their authorized officers the day, month and year first above written. ASSIGNOR: ASSIGNEE: BEACH PROM a California CITY OF HUNTINGTON BEACH, A limited li co m municipal corporation of the Stat California By: _ print name/title Date 212yf?�li By: /4,-IAN EA5:S-U(JIV(AN print name/title Beach-Atlantal3 Assignment of'Agreements Final 2011 02 02 INI'IATED AND APPROVED: Director of Econpi6 Development APPROVED AS TO FORM: r-City Attorney REV AND APPROVED: Ci A instrator 2 Item 6. - 104 H -1 o- EXHIBIT 14 FIRPTA CERTIFICATE TRANSFEROR'S CERTIFICATION OF NON -FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform Beach Promenade LLC (the "Transferee") that withholding of tax is not required upon the disposition of a U.S. property interest by the City of Huntington Beach (the "Transferor"), the undersigned hereby certifies the following on behalf of the Transferor: 1. That the Transferor is the owner of the following described real property, to wit: (see legal description attached hereto as Exhibit "A") 2. The Transferor is not a non-resident alien for purposes of the U.S. income taxation (as such term is defined in the Internal Revenue Code and Income Tax Regulations). 3. The Transferor's U.S. employer or taxpayer identification number is q - & 600'Za-3 4. The Transferor's address is 2000 Main Street, Huntington Beach, CA 92648. 5. The Transferor understands that this certification will be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury, I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of the Transferor. "TRANSFEROR" CITY OF HUNTINGTON BEACH A Dated: �-3RO , 20 0 B3 APPROVED AS TO FORM: r t City Attorney G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlantal4 FIRPTA Certificate HB -151- Item 6. - 105 Exhibit A SHEET 10E 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS, AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89`37'06" EAST, 89.21 FEET, TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39" WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9-10-25", AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14" WEST, 730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89'37'06" WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14" EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09-50'39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS (2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS -OF -WAYS AND EASEMENTS OF RECORD. EXHIBIT "B" ATTACHED AND THIS REFERENCE MADE A PART HEREOF. O O } EXP. 52-31-t1 A t JOSEPH G. DERLETH ��y L.S. 7340 PLS 7340, EXPIRES 12/31/11 TF OF CAl.�FO� Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 106 NB -1 2- NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM _ PER PM 94--590 30' 7 ARCEL 2, PM 84-590,----- 02/48-50 PM I W'LY T6S, �8, I I LINE SEC 13� { R11 W, SBM I + I <M I D I M + I W----110'-j zo + { l I PARCEL 2, PM 202/48-50 PM 84-590,-------�- � I }�--110' f I z �o+ o� I � 1 1 o I p f I � } I PARCEL 2, PM 84-590,-}- 202/48-5D PM I I + { I T6S, R11 W, SBM (N8937'06"E) _ _ ATLANTA AVE50 ------------ 1-------- 44/4;, "sir 6 x IE ( )- RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS �= PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 90,340 SQ FT, (2.07 ACRES) EXHIBIT B SHEET 1 OF 3 ----- GRAPHIC SCALE — 1 I inch =150 ft" N'LY LINE 'so I o �s iso PARCEL 1 PM 84-590 202/48-50 PM I ( IN FEET ) 1 EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA •�1 FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH , DEPARTMENT OF PUBLIC WORKS HB -153- Item 6. - 107 ATLANTA AVE (N89'37'06"E) �22'- NW'LY COR SEC 13 i T6S, R11 W, SBM a t PER PM 84-590 j ( ) = RECORD PER PARCEL MAP o-P 84-590, FILED IN BOOK 202, -' rri PAGES 48 THROUGH 50 1. INCLUSIVE OF PARCEL MAPS. co {( }} = RECORD PER STATE I HIGHWAY MAP FILED IN BOOK c' 5, PAGES 45 AND 46. -----88' 22 ®= PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. ` LINE TABLE: 1 L1= N89'37'06"E, 89.21' I L2= NOO'40'14"W, 730.41' U) PARCEL 2, C PM 84-590,-E4 rn'� 202/48-50 PM1 �> o C) n i--W'LY LINE SEC 13 T6S, R11 W, SBM W M C -> POINT OF BEGINNING, SE ` z Q Co COR PARCEL 2, M o ! PM 84-590, 202/48-50 PM —��(54.91'� L1 N'LY LINE PARCEL PM 84-590 (N89'37'06"E, 489.56') GRAPHIC SCALE I inch =50 ft. 50 0 25 50 ( IN FEET } E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 4'! AND 42. EXHIBIT B SHEET 2 OF 3 NE COR PARCEL 1, PM 84- 590, 202/48-50 PM _ V E EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Item 6. - 108 H -154- (N 89'37' 06"E) NW'LY COR SEC 13 T6S, R11 W, SBM PER PM 84-590 GRAPHIC S C ALE 1 inch =50 ft N'LY LINE SEC 13 so 0 25 50 T6S, R11 W, S.B.M. ATLANTA AVE Ix, 30' 50' I r L3 ( ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, / PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 822' PARCEL 2, PM 84-590, 202/48-50 PM , !�� = PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER ! �; 632, RECORDED 2/26/68, IN c / 8526/461 O.R., ALSO BEING - A PORTION OF PARCEL 1, I STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 1 , I rnl LINE TABLE: I L3= S89'37'06"W, 88.00' C W'LY LINE SEC 13 I C 00 z T6S, R11 W, SBM I E'i'1 0 "{ n _c I PARCEL 2, M PM 84-590, z g 202/48-50 PM / � 0 8' �-22 �f J z® of I M I z 0 0 0 L W 0 44/410 ? .: J._ !i i:V -. EXHIBIT B SHEET 3 OF 3 E'LY LINE, PARCEL 1 PER STATE HWY MAP BOOK 5, PAGES 41 AND 42. 6; 8 EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS H -155- Item 6. - 109 TENTATIVE z PARCEL MAP NO. 2009-122 n 151 so DD IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE � STATE OF CALIFORNIA SCuf w RR 'S0 ° A.P. NO.: 148-210-15. 19 & 24 AREA: 5,28 ACRES AUGUST 2009 1� 1 1 I I / ¢ � BARGEE t \ JD � SE ^DETAIL -'A" I Gfp f]FCCRIPTION: AO Lam, o SNAP NOxN ON MC'El FR[D wpADWt , CR —CC AO 1A—C L. NoSOM5 WP CR ME uAP fxCC IN DOOR .LPv.Lp[CS 10 b IMWSN[ OF P1. OIL WE. - Ro or III COux36a WGOOORIt �06 Pk[ C.x0l OR—ILI4MRf[-CME. SON ME I — OWNERS: 2,- CCxrFR O RBO[Atx BOUIfCAD ii1B N BEACx, G 025+0 S �R�MMDFR• A vROUEWD[. LL U.I. UnBRM O }1 O. uap P& ASSoCR• N A.... Es CO. wSJOE CA RD., 9unC B BRAnC. G eLai+ +=i)+-sno OWrr S SSOVNo GN B LOAD G 71 Iry M —1-TON BGCx xUxnNGIOxROGtx. G B)S.0 e3a.O I. CA DGcx. G Bm+D )Ix-J]1-5a)6 D-Jeo-ol to JCrtxfv w w4pfN. v.l_5. I91+ N wSFR M vARCflS: J ]. wrnxc uza c°Yuucul SALVIRER1 o)R or Hor-nixOf%v OF�ACM lvuBUG) w: SCUMURN CNUrCRw w co~ u1xCRx C '-" FORD" COU— ,rLEPxOx[ KRi3ON Or GUIQRnu S. ROOD r E: —C'AP AS Ell— R —D ACAS SUBIER 10 1— Dt ME 1• AL E—OE R000 MNr, P[A r— ROOD IMU-lE MTC — NUUDER O60MC016]x, RfNSEO rCDR— 10. 300+. a 11 —11 pr [Kx (RanACE 0—) lO D[ IDADo—A-11C ON FI- PACLL YAP DI' MCCCIIYNOr NUIR IRON DG[x. FAc u� N� T `NRCIES A fASEUGLr FOR UNDCUCR3 ID ONES, CONDuxS ICLUONI QM-GRCUIID A quxt[NUR SLPRu&R 26. 111D.'ClIR BOOR -1. x— ID OT OFI�iCNi -...1. [D50x COWUM, LNRDCO ® iPOSRo�xF9IxOCu R[ FCONNUN, VAaDEifOOCON— INCLUDING -ORu[060NCR[CORO[O SRTUOCR S. is 3. 11 p IWO. PACE — OF — RCCOROS. ® w01GRs ON EIEE o O R OYVIV r R[' TELCGRU+x Ux0 )[L[PNO]O L— I D JVNp pErrt ] PURPOSES,.... �ORDRD ..— Sp +: uP OURItO.M'R16. 1ei5 ii+ B OPt Ox a' SUN [Ai�u�` s MOr 0—RUUENI GR[CC—D —1 DO. lis. rx BOWr )L.O, nW:E r.SL, uC RECORDS. ® CAL CO—OOr —ORI& OR NECOID[O .AVCGi ST 9. - ,D DWI �OS.v CR1,t OIM- RECORDS. Q iNDGSRS A Gs c FOR USE, uUMCxM'CC, !KINGS AD --ES IOR It TMxOUISADx CDup`S° oP EF �Nu�RcoDw11 I e1P OMER 1De+ wDSDoov 'MOOor . — i51, 51C� rzi4 a-.. ® CLwu OPNN [05 xuc 4PIM•tR, nPCOCOLDS5u0Ut 39, 195JLIN 800HR)b015vOCCAIif 0!I COL`LMPCCOPps. © RID Ur— aRTO PDSPS PER G-1 YACLI C p OF r1UxTNGfOx BfKn FOR PUDut CIMR FORD Ns __ ___ ____...__ _ ECT .____________ _______________________ qg G _— efAcx P4a 'C �y Y i �H sn ENCaOsuLE � • narmrar rBLrwG iv vw - scour caurrr oercenr - rur rPAns' . - rRAsrmoL - rn 1KL II VAC MAP _RI_ GISRNC GD IRd _6FL— R151 No WARR lV[ —d)-- CU51wG 5EMR LRS - 2rA1NNG WU! �i"0 - 514rr LItlO u NGlNITY O s —OO)—• C11 INO Srg91lL'! attl--- rU511NG IIlOMOK'Re OV LOr tlrlli tl • COVE P - PONTR IIXC —(col-- [L Ri[MOK LNS m NAl 00.1 ivAIVC 1. a . rrumar[ rtDrsru IXR— TENTATIVE PARCEL MAP B 1L 01®YPU' SOCIATES °1A1"'w Ai--1 "'0 l -nAwaf A-Op�F�"n� 0 NO. 2009-122 BD: J.11.m - Gs KlrR s 3CONEMr eErnr F, 16 e\C V O r C6 ^E W