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HomeMy WebLinkAboutMUSICK, PEELER & GARRETT - 1997-03-17SAN FRANCISCO OFFICE STEUART STREET TOWER, SUITE 13W ONE MARKET PLAZA SAN FRANCLSCO. CALIFORNIA 9NM16M (415) 261-M SAN DIEGO OFFICE 225 BROADWAY, SUITE 1900 SAN DIEGO, CALIFORNIA 92IM-W 4619) SI zm • 0 MUSICK, PEELER & GARRETT LLP ATTORNEYS AT LAW ONE WILSHIRE BOULEVARD LOS ANGELES, CALIFORNIA 9DO17.3393 TELEPHONE (213) 629-7660 FACSIMILE (213) 624-1376 WRITER'S DIRECT DIAL NUMBER (213) 629-7841 FRESNO OFFICE 6011 NORTH FIRST STREET FRESNO. CALIFORNIA MID-" f207) 276-IDW ORANGE COUNTY OFFICE SUITE 600 650 TOWN CENTER DRIVE COSTA MESA CALIFORA'fA 97S2G1925 (71q 6668910 November 25, 1997 �" « Q —0.4 To: Attached Distribution List,. -< C:) C) CD C:) Re: $8,070,000 Huntington Beach Public Financing Authority Lease Revenue Bonds, 1997 Series A (Public Facilities Project) Enclosed please find the long awaited Title Policy with regard to the above captioned financing. Please insert this document under Tab No. B.7. Thank you for your patience in this regard. SSO:sso 9160274 Very truly yours, 94'. Susan S. Omokawa Paralegal for MUSICK, PEELER & GARRETT LLP • $8, 070, 000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS 1997 Series A (Public Facilities Project) Distribution List ISSUER City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 • Robert J. Franz Deputy City Administrator Ron Hagan Director of Community Services • Scott F. Field, Esq. Deputy City Attorney • Connie Brockway (z) City Clerk Roger Ham Information Systems Manager Myc/12215.0e1/x:\r)ATA\4,5\4'-50232 Noverber 25, 1997 Tel: (714) 536-5511 Fax: (714) 374-1571 Tel: (714) 536-5236 Tel: (714) 536-5486 Fax: (714) 374-1590 Tel: (714) 536-5662 Fax: (714) 374-5227 Tel: (714) 374-I557 Fax: (714) 536-5605 or 536-2895 Tel: (714) 960-8804 0 • BOND COUNSEL Musick, Peeler & Garrett LLP Fax: (213) 6244376 One Wilshire Boulevard Tel: (213) 629-7600 Los Angeles, California 90017 Maryann L. Goodkind Esq. Tel: (213) 629-7924 Musick, Peeler & Garrett LLP Fax: (415) 281-2010 Steuart Street Tower, 13th Floor One Market Plaza San Francisco, California 94105 Edsell M. Eady, Jr., Esq. Tel: (415) 281-2021 BOND COUNSEL CLOSING COORDINATOR Musick, Peeler & Garrett LLP Fax: (213) 624-1376 One Wilshire Boulevard Tel: (213) 629-7600 Los Angeles, California 90017 Susan S. Omokawa Tel: (213) 629-7841 DISCLOSURE COUNSEL Jones Hall Hill & White Fax: (415) 391-5785 A Professional Law Corporation Four Embarcadero Center, 19th Floor San Francisco, California 94111 • Andrew C. Hall, Esq. Tel: (415) 391-5780 FINANCING CONSULTANT Rod Gunn Associates, Inc. Fax: (562) 431-S446 3010 Old Ranch Parkway, Suite 330 Seal Beach, California 90740 Rodney L. Gunn Tel: (562) 598-7677 • Suzanne Q. Harrell NLG/12215.001/K:\DATA\4,5\4=50232 November 25, 1997 0 TRUSTEE First Trust of California, National Association 550 South Hope Street, Suite 500 Los Angeles, California 90071 • Linda Verstuyft Assistant Vice President TRUSTEE'S COUNSEL Dorsey & Whitney 550 South Hope Street, Suite 500 Los Angeles, California 90071 • Dennis Wong, Esq. Fax: (213) 533-8750 Tel: (213) 533-8747 Fax: (213) 533-8736 Tel: (213) 533-8735 Standard & oor's Ratings pup Fax: (415) 433-7839 555 Cal' rnia Street, 21 Floor San ancisco, Cali o is 94104 Chris in Tel: (415) 765-5020 BOND INSURER FSA Inc. Fax: (415) 995-8095 Steuart Street Tower, Suite 2350 One Market Plaza San Francisco, California 94105 Susan Shultis Tel: (415) 995-8027 • Barry Scott, Esq. Tel: (415) 995-8046 (3) Judith K. Solle, Paralegal Tel: (415) 995-8021 PURCHASER Merrill Lynch Fax: (213) 217-4596 Two California Plaza 350 S. Grand Avenue, Suite 2820 Los Angeles, California 90017 • Joe Gechtman Tel: (213) 217-4444 November 5. 19 :\DATA\415\4150232 November 25, 1997 Farm Na 1402.92 (10 17t92) ALTA Owner's Policy POLICY OF TITLE INSURANCE A M L •t• ISSUED Iff First American Title Insurance Company SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in Schedule A. sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; 4. Lack of a right of access to and from the land. The Company will also pay the costs. attorneys' fees and expenses incurred in defense of the title, as insured, but only to the extent provided in the Conditions and Stipulations. First American Title Insurance Company 4( M' 6PdALAJ�11 1 PRESIDENT J ATTEST A4 / SECRETARY I* EXCLUSIONS FROM COVERAGE • The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attomeys' fees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy, (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Dale of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens. encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained 0 the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer resutts from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. CONDITIONS AND STIPULATIONS DEFINITION OF TERMS. The following terms when used in this policy mean: (a) "insured": the insured named in Schedule A. and, subject to any rights or defenses the Company would have against the named insured. those who succeed to the rest of the named insured by operation of law as stinguished from purchase including, but not limited to, heirs. distributees. devisees, survivors, personal representa- tives. next of kin. or corporate or fiduciary successors. (b) "insured claimanr': an insured claiming loss or damage. (c) "knowledge" or "known-': actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason o'the publ!c recoras as defined in this policy or any other recoras which impart constructive notice of matters affecting the IanC (M "lanc° the land descrioea or referred to in Schedule (A), and improvements affixed thereto which by law constitute real property. The term "land' does not include any property beyond the lines of the area described or referred to in S,.neouie (A). nor any right. title. interest, estate or easement in abutting streets. road$, avenues, alleys, lanes, ways Or waterways. but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy (e) "mortgage": mortgage. deed of trust, trust deed, Or other security instrument. (f) "public records": recoras established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purcnasers for value and without Knowledge. With respect to Section 1(a)(iv) of the Exclusions From Coverage, "public records" snall also incude environmental protection liens filed in the recoras of the clerk of the United States district court for the district in which the land is located. (gi 'unmarketabikty of the title": ar alleged or apparent matter affecting the title to the land. not excluded or excepted from coverage. which would entitle a purchaser of ne estate or interest described in Schedule A to be released the obligation to purchase by virtue of a contractual dition requiring the delivery of marketable title. 2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE. The coverage of this policy shall continue in force as of Date of Poiicy in favor of an insurea only so long as the insurec retains an estate or interest in the land. or holds an indebtedness secured by a purcnase money mortgage given by a M TnaSer from the insured Or only so long as the by this policy which constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the insured claimant to provide the required proof of loss or damage. the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of me Company, ail records, books, ledgers, checks. correspondence and memoranda, whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage. Further, it requested by any authorized representative of the Company, the insured claimant shall grant its permission. in writing, for any authorized rep- resentative of the Company to examine, inspect and copy all records. books, ledgers, checks, correspondence and mem- oranda in the custody or control of a third party. which reasonably pertain to the loss or damage. All information designated as confidential by the insured claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary informa- tion from Mira parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE 807LE CLAIMS; TERMINATION OF LIABILITY. in case of a claim under this policy. the Company shall have the following additional options: (at To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the amount of insurance under this pahcy together with any costs, attorneys' fees and expenses incurred by me insured claimant, which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay. Upon the exercise by me Company of this option, all liability ana obligations to the insured under this policy. other than to make the payment required. shall terminate, including any liability or obligation to defend. prosecute, or continue for any loss or damage caused thereby. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction. and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured In settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. All payments underthis policy, except payments made for costs, attorneys' fees and expenses, shall reduce the amount of the insurance pro tanto. 11. LIABILITY NONCUMULATIVE. It is expressly understood that the Amount of In- surance underthis policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or In which the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a charge or lien on me estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment underthis policy to the insured owner. 12. PAYMENT OF LOSS. (a) No payment shall be made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed. in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter. 13. SUBROGATION UPON PAYMENT OR SETTLEMENT. (a) The Compants Right of Subrogation. Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall vest in the Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies which the insured claimant would have of Uate or Policy in favor at an insured only so long as tnt insured retains an estate or interest in the land, or holds an indebtedness secured by a purchase money mortgage giv by a purchaser from the insured, or only so long as insured snail have liability by reason of covenants of warranty made by the insured in any transfer or conveyance of the estate or interest. This policy shall not continue in force in favor of any purchaser from the insured of either (1) an estate - or interest in the land, or (ii) an indebtedness secured by a 10 chase money mortgage given to the insured. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 4(a) below, (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest which is adverse to the title to the estate or interest, as insured, and which might cause lass or damage for which the Company may be liable by virtue of this policy, or (iii) if title to the estate or interest. as insured. is rejected as unmarketable. If prompt notice shall not be given to the Company, then as to the insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required; provided, however. that failure to notify the Company shall in no case prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice. 4. DEFENSE AND PROSECUTION OF ACTIONS: DUTY OF INSURED CLAIMANT TO COOPERATE. (a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an insured in litigation in which any third parry asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or en- cumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the insured to object for reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of ,gagrry other counsel. The Company will not pay any fees, costs expenses incurred by the insured in the defense at those ses of action which allege matters not insured against by is policy. (b) The Company shall have Me right, at its own cost, to institute and prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest, as insured, or to prevent or reduce joss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not 0 shad be liable hereunder, and shall not thereby concede liability or waive any provision of this policy_ if the Company shall exercise its rights under this paragraph, it shah do so diligently. (c) Whenever the Company shall have brought an action or interposed a defense as required or permitted by Me provisions of this policy, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment at order. (d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding. the insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding. and all appeals therein, and permit the Company to use. at its option. the name of the insured for this purpose. Whenever requested by the Company, the insured, at the Companys expense, snall give the Company all reasonable aid (i) in any action or proceeding, securing evidence, obtaining witnesses. prosecuting or defending the action or proceeding. or effecting settlement, and (ii) in any other lawfw act which in the opinion of the Company may oe necessary or desirable to establish the title to the estate or interest as insured. If the Company is prejudiced by the failure of the insured to furnish the required cooperation. the Companys obligations to the insured under the policy shall rminate.:ncluging any liability or obligation to defend, secute.:r continue any litigation. with regard to the matter matters requiring such cooperation. PROOF OF LOSS OR DAMAGE. claim under Iris policy. all rlgnt at suorogation Shall vest in liability and obligations to the insured under this policy, other the .Company unaffected by any act of the insured claimant. than to make the payment required, shall terminate, includingr The Company shall be subrogated to and be entitled to all any liability or obligation to defend, prosecute, or cantinu ri ht5 and remedies which the insured claimant would nave any litipatidn. and the policy shall be surrendered to the had against any person or property in respect to the claim Company for cancellation. had this policy not been issued. If requested by the Company. (b) To Pay or Otherwise Settle With Parties Other than the insured claimant shall transfer to the Company all rights the insured or With the Insured Claimant. and remedies4gainst any person or property necessary in {i) to pay or otherwise settle with other parties for order to perfect this right of subrogabon. The insured or in the name of an insured claimant any claim insured claimant shall permit the Company to sue, compromise or against under this policy, together with any costs, attorneys' settle in the name of the insured claimant and to use the name fees and expenses incurred by Me insured claimant which of the insured claimant in any transaction or litigation were authorized by the Company up to the time of payment involving these rights or remedies. and which the Company is obligated to pay; or 11 a payment on account of a claim does not fully cover (ii) to pay or otherwise settle witn the insured the loss of the insured claimant, the Company snail be claimant the loss or damage provided for under this policy, subrogated to these rignts and remedies in the proportion together with any costs. attorneys' fees and expenses which the Companys payment bears to the whole amount incurred by the insured claimant which were authorized by the of the loss. Company up to the time of payment and which the Company is obligated to pay. Upon the exercise by the Company of either at the options provided for in paragraphs (b)(i) or (ii), the Com- panys obligations to the insured under this policy for the claimed loss or damage, other man the payments required to be made, shall terminate. including any liability or obligation to defend, prosecute or continue any litigation. DETERMINATION, EXTENT OF LIABILITY AND COINSURANCE. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurrea by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy snail not exceed the least of: (i) the Amount of Insurance stated in Schedule A; (ii) the difference between the value o1 the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (b) In the event the Amount of Insurance stated in Schedule A at the Hate of Policy is less than 80 percent of the value at the insured estate or interest or the full consideration paid for the land, whichever is less. or if subsequent to the Date of Policy an improvement is erected on the land which increases the value of the insured estate or interest by at least 20 percent over the Amount of Insurance stated in Schedule A. then this Policy is subject to the following: (i) where no subsequent improvement has been made. as to any partial joss. the Company shall only pay the loss pro rate in the proportion that the Amount of Insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (ii) where a subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rasa in the proportion that 120 percent of the Amount of Insurance stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the improvement. The provisions of this paragraph shall not apply to costs, attorneys' tees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which exceeds. in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. 8. APPORTIONMENT. If the land described in Schedule (A) (C) consists of two or more parcels which are not used as a single site, and a loss is established affecting one or more of the parcels but not all. the loss shall be computed and settled on a pro rasa basis as if the Amount of Insurance under this policy was divided pro rata as to me value on Date of Policy of each separate parcel to the whole. exclusive of any improvements made sub- seauent to Date at Policy, unless a liability or value has otherwise been agreeo upon as to each parcei by the Company and the insured at the time of the issuance of this poticy and snown by an express statement or by an endorsement atiacned 10 this policy. 9. LIMITATION OF LIABILITY. If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy. but the Company, in that event, shall be required to pay only that part of any losses insured against by this policy which shall exceed the amount. if any, lost to the Company by reason of the impairment by the insured claimant of the Companys right of subrogation. (b) the Company's Rights Against non-insured Obligors. The Companys right of subrogation against non- insured obligors shall exist and shall include. without limitation, the nghta of the insured to indemnities, guaranties, other policies at insurance or bonds. notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. 14. ARBITRATION. Unless prohibited by applicable law, either the Com- pany or the insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1.000,000 or less shall be arbitrated at the option of either the Company or the insured. All arbitrable matters when the Amount of Insurance is in excess of $1,000.000 snall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy snail be binding upon the parties. The award may include attorneys' fees only it the laws of the state in which the land is located permit a court to award attorneys, fees to a prevailing parry. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The jaw of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpret- ing any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based an negligence. and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim. shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company. 16. SEVERABILITY. In the event any provision of the policy is held invalid or unenforceable under applicable law. the policy shall be deemed not to include that provision and all other provisions snall remain in full force and effect. In addition to and after the notices required under Section 3 of these Conditions and Stipulations have peen (a) If the Company estabushes the title, or removes the 17. NOTICES, WHERE SENT. provided the Company. a proof of loss or damage signed and alleged defect. lien or encumbrance, or cures the lack of a sworn to by the insured claimant shall be furnished to the right of access to or from the land, or cures the claim of All notices required to be given the Company and any Company within 90 days after the insured claimant shall unmarketability of tine. all as insured, in a reasonably diligent statement in writing required to be fumished the Company ascertain the facts giving rise to the loss or damage The manner by any method. including litigation and the comple- shall include the number of this policy and shall be addressed E ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI SCHEDULE A TOTAL FEE FOR TITLE, EXAMINATION AND TITLE INSURANCE $11,350.50 AMOUNT OF INSURANCE: $8,070,000.00 DATE OF POLICY: MAY 13, 1997 AT 9:47 A. M. NAME OF INSURED: CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION; THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA; FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION; AND FINANCIAL SECURITY ASSURANCE INC., A NEW YORK STOCK INSURANCE COMPANY, ITS SUCCESSORS AND ASSIGNS AS DEFINED IN PARAGRAPH I (a) OF THE CONDITIONS AND STIPULATIONS OF THIS POLICY. ?_ THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THIS POLICY IS: • (A) A FEE. (B) THE LEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED BASE LEASE DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSOR AND THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSEE, FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN; AND THE SUBLEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED LEASE AGREEMENT DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSOR AND THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSEE FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN, - NOTE: THE SUBLESSOR'S INTEREST UNDER SAID SUBLEASE HAS BEEN ASSIGNED TO FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION BY AN UNRECORDED ASSIGNMENT AGREEMENT DATED MAY 1, 1997, 0 PAGE? 0 ALTA OWNERS POLICY • OR-9736089 TITLE OFFICER - SWIERCZEWSKI ALL AS DISCLOSED BY A MEMORANDUM OF LEASE RECORDED MAY l3, 1997 AS INSTRUMENT NO. 19970221305 OF OFFICIAL RECORDS.. TITLE TO THE ESTATE OR INTEREST IN THE LAWD IS VESTED IN: CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (A) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY; AND CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AND FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION EACH AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (B) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS: (SEE EXHIBIT "A" ATTACHED HERETO.) 0 PAGES 0 0 0 ALT.A OWNERS POLICY • OR-9736089 TITLE OFFICER - SWIERCZEWSKI SCHEDULE B EXCEPTIONS FROM COVERAGE THIS POLICY DOES NOT INSUREAGAINST LOSS OR DAMAGE(ANDTHE COMPANY WILL NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: 1. THE RESERVATION OF THE SOUTHERLY 30 FEET OF SECTION 26, TOWNSHIP 5 SOUTH, RANGE I WEST FOR ROAD, RAILROADS AND DITCHES, ALSO THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT, AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED IN THE DEED RECORDED MARCH 13, 1885 IN BOOK 137, PAGE 203 OF DEEDS, RECORDS OF LOS ANGELES COUNTY. 2. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM ALFRED ROBINSON, TRUSTEE, RECORDED MARCH 25, 1885 IN BOOK 137, PAGE 303 OF DEEDS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. 3. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES, AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID TRACT; AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED BY THE STEARNS RANCHOS COMPANY, A CORPORATION, 1N THE DEED RECORDED JUNE 3, 1895 IN BOOK 87, PAGE 249 OF DEEDS. 4. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM THE STEARNS RANCHOS COMPANY, RECORDED JULY 19, 1905 IN BOOK 91, PAGE 135 OF DEEDS. 5. THE CONTINGENT OBLIGATIONS AS CONTAINED IN THE DEED FROM B. T. GOTHARD AND AGNES B. GOTHARD, HIS WIFE, TO STANDARD OIL COMPANY, A CORPORATION, RECORDED MAY 26, 1921 IN BOOK 389, PAGE 240 OF DEEDS, AS FOLLOWS: "IN THE EVENT THAT WELLS ARE DRILLED AND OIL PRODUCED IN PAYING QUANTITIES WITHIN TEN YEARS OF THE DATE HEREOF UPON PROPERTY ADJOINING THE LAND HEREIN DESCRIBED PAGE 4 C • ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI AND WITHIN 300 FEET OF THE BOUNDARY LINE OF THE PROPERTY HEREIN DESCRIBED THE PARTY OF THE SECOND PART SHALL, WITHIN 90 DAYS AFTER DISCOVERY OF OIL IN PAYING QUANTITIES IN SUCH WELLS, COMMENCE AND ACTUAL DRILLING OF WELL ON THE HEREIN DESCRIBED PREMISES AND PROSECUTE THE SAME WITH REASONABLE DILIGENCE UNTIL OIL IS FOUND IN QUANTITIES DEEMED PAYING QUANTITIES BY THE PARTY OF THE SECOND PART, OR TO A DEPTH AT WHICH FURTHER DRILLING, WOULD, IN THE JUDGMENT OF THE PARTY OF THE SECOND PART, BE UNPROFITABLE. IF, HOWEVER, OIL IS NOT FOUND AND PRODUCED IN PAYING QUANTITIES FROM SUCH WELLS WITHIN 300 FEET OF THE BOUNDARIES OF THE HEREIN DESCRIBE PROPERTY, WITHIN SAID 10 YEAR PERIOD, ALL RIGHTS OF THE PARTIES OF THE FIRST PART UNDER THIS CLAUSE SHALL CEASE AND DETERMINE. "IF OIL IS FOUND IN SUCH PAYING QUANTITIES IN THE WELL SO DRILLED BY THE PARTY OF THE SECOND PART, THE PARTY OF THE SECOND PART SHALL CONTINUE TO DRILL ADDITIONAL WELLS ON SAID PREMISES AS RAPIDLY AS AT LEAST ONE STRING OF TOOLS WORKING WITH DUE DILIGENCE, CAN COMPLETE THE SAME, UNTIL FURTHER DRILLING WOULD, IN THE JUDGMENT OF THE SAID PARTY OF THE SECOND PART, BE UNPROFITABLE, OR UNTIL THERE SHALL HAVE BEEN COMPLETED ON THE PREMISES HEREIN DESCRIBED 3 WELLS.' SUBJECT TO CERTAIN PROVISIONS, COVENANTS AND CONDITIONS AS THEREIN SET FORTH, TO WHICH RECORD REFERENCE 1S MADE FOR FULL PARTICULARS. THE INTEREST OF B. T. GOTHARD HAS PASSED TO AND IS AT THE DATE HEREOF VESTED IN ID BESSIE L. GOTHARD, AS HER SEPARATE PROPERTY. THE INTEREST OF AGNES B. GOTHARD HAS PASSED TO AND WAS DISTRIBUTED TO THE FOLLOWING PERSONS BY A DECREE OF DISTRIBUTION RENDERED DECEMBER 13, 1965 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE IN THE MATTER OF THE ESTATE OF AGNES B. GOTHARD, DECEASED, (CASE NO. A-47000), A CERTIFIED COPY OF WHICH WAS RECORDED DECEMBER 15, 1965 IN BOOK 7775, PAGE 140 OF OFFICIAL RECORDS: TO CARL KRAUCHI, ONE -SIXTH THEREOF; TO ANNE M. SPRINGER, ONE -SIXTH THEREOF; TO AZALES CUMMINGS, ONE -SIXTH THEREOF; TO MARY GOLDMAN, ONE -SIXTH THEREOF: TO CHARLES A. KRAUCHI, ONE -TWELFTH THEREOF; TO DORIS ALLERS, ONE -TWELFTH THEREOF, TO DRENNEN KRAUCHI, ONE -SIXTH THEREOF. NOTE: THE NAME OF DRENNAN KRAUCHI WAS CHANGED TO DRENNAN ABERN BY DECREE RENDERED OCTOBER 26, 1934 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE, CASE NO. A-4101, PAGE 5 • ALTA OWNERS POLICY 4R-9736089 TITLE OFFICER - SWIERCZEWSKI 6. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED JUNE 14, 1921 IN BOOK 400, PAGE 229 OF DEEDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 7. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 13, PAGE 49 OF OFFICIAL RECORDS AND IN AN INSTRUMENT RECORDED IN BOOK 581, PAGE 489 OF OFFICIAL RECORDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 8. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM COUNTY OF ORANGE, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, AS GRANTEE, RECORDED DECEMBER 20, 1963 IN BOOK 6854, PAGE 265 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. 9. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 7525, PAGE 963 OF OFFICIAL RECORDS, FOR: ROAD AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 10. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 8922, PAGE 990 OF OFFICIAL RECORDS, FOR: STREET CONSTRUCTION AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 11, A JOINT USE AGREEMENT, DATED SEPTEMBER 2, 1971, EXECUTED BY STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION AND CITY OF HUNTINGTON BEACH, RECORDED NOVEMBER 29, 1971 IN BOOK 9905, PAGE 115 OF OFFICIAL RECORDS, TO WHICH RECORD REFERENCE IS MADE FOR FULL PARTICULARS. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 12. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM STANDARD OIL COMPANY OF CALIFORNIA, A DELAWARE CORPORATION, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS GRANTEE, RECORDED FEBRUARY 11, 1972 IN 1300K 9998, PAGE 389 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. NOTE: AN INSTRUMENT ENTITLED "ASSIGNMENT AND QUITCLAIM DEED" RECORDED JUNE 17, 1993 AS INSTRUMENT NO. 93-0405449 OF OFFICIAL RECORDS, REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. PAGE 6 • 0 ALTA OWNER5 POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI 13. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3434, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH OF INTENTION TO CLOSE A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 1972 IN BOOK 10023, PAGE 873 OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 14. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3441 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ORDERING THE CLOSURE OF A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 1972IN BOOK 10023, PAGE 876OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 15. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "NOTICE OF DEED RESTRICTION", EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, RECORDED IN BOOK 10357, PAGE 959 OF OFFICIAL RECORDS. 16. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED OCTOBER 19, 1973 IN BOOK 10954, PAGE 289 OF OFFICIAL RECORDS, IN FAVOR OF: STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION, AND STANDARD GASOLINE COMPANY FOR: PIPELINES, APPURTENANCES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 17. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "COVENANT", EXECUTED BY CITY OF HUNTINGTON BEACH, RECORDED 1N BOOK 11251, PAGE 546 OF OFFICIAL RECORDS. 18. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED DECEMBER 7, 1979 IN BOOK 13425, PAGE 1904 OF OFFICIAL RECORDS, IN FAVOR OF: SOUTHERN CALIFORNIA EDISON COMPANY, A CORPORATION. FOR: UNDERGROUND ELECTRICAL SUPPLY SYSTEMS, COMMUNICATION SYSTEMS AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 19. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND RECORDED IN BOOK 138, PAGE 9 OF RECORD OF SURVEYS. 20. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED JUNE 17, 1996 AS INSTRUMENT NO. 19960305030 OF OFFICIAL RECORDS. 21. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED OCTOBER 10, 1996 AS INSTRUMENT NO. 19960516765 OF OFFICIAL RECORDS. PAGE 7 • • 0 ALTA OWNER5 POLICY • OR-9736089 TITLE OFFICER - SWIERCZEWSKI 22. ANY FAILURE TO COMPLY WITH THE TERMS, CONDITIONS AND PROVISIONS OF ANY LEASE OR SUBLEASE AND THE AMENDMENTS THEREOF, AS SHOWN HEREIN. 23. ANY FACTS, RIGHTS, INTEREST OR CLAIMS WHICH A CORRECT ALTA SURVEY WOULD SHOW. PACE 8 • 0 ALTA OWNERS POLICY • EXHIBIT "A" OR-9736089 TITLE OFFICER - SWIERCZEWSKI ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE I I WEST, AS SHOWN ON MAP RECORDED 1N BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.75I FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 890 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2" 07' 44" WEST, 320.54 FEET; THENCE NORTH 870 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36' 13' 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83* 19, 27" WEST, 562.50 FEET: THENCE SOUTH 21 ° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14' 28' 10" EAST 235.93 FEET; THENCE SOUTH 77' 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2' 07' 44" WEST 92.62, FEET TO THE TRUE POINT OF BEGINNING. PAGE 9 ALTA OWNERS POLICY • DM • • OR-9736089 TITLE OFFICER - SWIERCZEWSKI WARNING "THE MAP ATTACHED HERETO MAY OR MAY NOT BE A SURVEY OF THE LAND DEPICTED THEREON. YOU SHOULD NOT RELY LION IT FOR ANY PURPOSE OTHER THAN ORIENTATION TO THE GENERAL LOCATION OF THE PARCEL OR PARCELS DEPICTED. FIRST AMERICAN EXPRESSLY DISCLAIMS ANY LIABILITY FOR ALLEGED LOSS OR DAMAGE WHICH MAY RESULT FROM RELIANCE UPON THIS MAP." PACE 10 ENDORSEMENT ATTACHED TO POLICY NO. OR-9T36089 ISSUED BY First American Title Insurance Company THECOMPANY HEREBY INSURES AGAINST LOSS WHICH THE INSURED SHALLSUSTAIN BY REASON OF ANYOFTHE FOLLOWING MATTERS: L ANY INCORRECTNESS IN THE ASSURANCE WHICH THE COMPANY HEREBY GIVES: (A) THAT THERE ARE NO PRESENT VIOLATIONS ON THE LAND OF ANY ENFORCEABLE COVENANTS, CONDITIONS OR RESTRICTIONS; IB) THAT,EXCEPTASSHOW14INSCHEDULEB,THEREARENOENCROACHMENTSOFBUILDINGS,STRUCTURES, OR IMPROVEMENTS LOCATED ON THE LAND ONTO ADJOINING LANDS, NOR ANY ENCROACHMENTS ONTO THE LAND OF BUILDINGS, STRUCTURES OR IMPROVEMENTS LOCATED ON ADJOINING LANDS. 2. UNMARKETABILITY OF THE TITLE TO THE ESTATE OR 114TEREST BY REASON OF ANY VIOLATIONS ON THE LAND, OCCURRING PRIOR TO ACQUISITION OF TITLE TO THE ESTATE OR INTEREST 13Y THE INSURED. OF ANY COVENANTS. CONDITIONS OR RESTRICTIONS. 3. DAMAGE TO EXISTING BUILDING IMPROVEMENTS. (A) WHICH ARE LOCATED OR ENCROACH UPON THE PORTION OF THE LAND SUBJECT TO ANY EASEMENT SHOWN IN SCHEDULE B, WHICH DAMAGE RESULTS FROM THE EXERCISE OF THE RIGHT TO USE OR MAINTAIN THE EASEMENT FOR THE PURPOSES FOR WHICH THE SAME WAS GRANTED OR RESERVED; (B) RESULTING FROM THE EXERCISE OF ANY RIGHT TO USE THE SURFACE OF THE LAND FOR THE EXTRACTION OR DEVELOPMENT OF THE MINERALS EXCEPTED FROM THE DESCRIPTION OF THE LAND OR SHOWN AS A RESERVATION IN SCHEDULE B. 4_ ANY FINAL COURT ORDER OR JUDGMENT REQUIRING REMOVAL FROM ANY LAND ADJOINING THE LAND OF ANY ENCROACHMENT SHOWN IN SCHEDULE B. WHEREVER IN THIS ENDORSEMENT ANY OR ALL THE WORDS "COVENANTS, CONDITIONS OR RESTRICTIONS" APPEAR, THEY SHALL NOT BE DEEMED TO REFER TO OR INCLUDE THE TERMS. COVENANTS. CONDITIONS OR RESTRICTIONS CONTAINED IN ANY LEASE. NO COVERAGE 1S PROVIDED UNDER THIS ENDORSEMENT AS TO ANY COVENANT. CONDITION, RESTRICTION OR OTHER PROVISION RELATING TO ENVIRONMENTAL PROTECTION. THE TOTAL LIABILITY OF THE COMPANY UNDER THE POLICY AND ANY ENDORSEMENTS THEREIN SHALL NOT EXCEED, IN THE AGGREGATE, THE FACE .AMOUNT OF THE POLICY AND COSTS WHICH THE COMPANY 1S OBLIGATED UNDER THE CONDITIONS AND STIPULATIONS THEREOF TO PAY. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO THE SCHEDULES. CONDITIONS AND STIPULATIONS THEREIN. EXCEPT AS MODIFIED BY THE PROVISIONS HEREOF. First American Title Insurance Company BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY F.A. Form 31.1 (Revised I1-15-951 ALTA Extended Owner (Improved Land) Restrictions. Encroachments & N4inerals ENDORSEMENT ATTACHED TO POLICY NO. OR-973b089 ISSLED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNER OF THE LAND REFERRED TO IN SCHEDULE A AGAINST LASS WHICH THE INSURED SHALL SUSTAIN IN THE EVENT THAT THE OWNER OF THE EASEMENT REFERRED TO IN PARAGRAPH 5, 7, 9, 10, 16 AND 19 OF SCHEDULE B SHALL, FOR THE PURPOSE OF "EXERCISING THE RIGHT OF USE OR (MAINTENANCE OF SAID EASEMENT" COMPEL THE REMOVAL OF ANY PORTION OF THE IMPROVEMENTS ON THE LAND WHICH ENCROACH UPON SAID EASEMENT. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance Company /I , - " BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY CLTA Form 103.3 (Rev. 9-10-93)(MODIFIED FOR OWNER) ALTA or CLTA - Lender 9 i • ENDORSEMENT ATTACHED TO POLICY NO. OR-9736089 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE INSURED AGAINST LOSS OR DAMAGE WHICH THE INSURED SHALL SUSTAIN BY REASON OF THE FAILURE OF THE LAND TO ABUT UPON A PHYSICALLY OPEN STREET KNOWN AS GOLDEN WEST STREET. THIS ENDORSEMENT 1S MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASE THE FACE AMOUNT THEREOF, First American Title Insurance Company /9 1 — " 0 BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY CLTA Form 103.7 (Rev. 6-14-96) ALTA or CLTA - Owner or Lender 0 • • ENDORSEMENT • ATTACHED TO POLICY :NO. OR-9736089 ISSUED BY First American Title Insurance Company THE POLICY IS AMENDED IN THE FOLLOWING PARTICULARS: AS TO ESTATE REFERRED TO IN PARAGRAPH 2(B) OF SCHEDULE A ONLY: A. PARAGRAPH I OF THE CONDITIONS AND STIPULATIONS 15 AMENDED BY ADDING A SUBPARAGRAPH (H), AS FOLLOWS: (H) "LEASEHOLD ESTATE THE RIGHT OF POSSESSION FOR THE TERM OR TERMS DESCRIBED 1N SCHEDULE A HEREOF SUBJECT TO ANY PROVISIONS CONTAINED IN THE LEASE WHICH LIMIT THE RIGHT OF POSSESSION. B. PARAGRAPHS 14. 15. 16 AND 17 OF THE CONDITIONS AND STIPULATIONS ARE RENUMBERED AS PARAGRAPHS 16, 17. 18 AND 19. C. THE CONDITIONS AND STIPULATIONS ARE AMENDED BY ADDING PARAGRAPHS 14 AND 15, AS FOLLOWS: 14. VALUATION OF ESTATE OR INTEREST INSURED IF, IN COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, IT BECOMES NECESSARY TO DETERMINE THE VALU£OF THE ESTATE OR INTEREST INSUREDBY THIS POLICY, THE VALUE SHALL CONSISTOF THE THEN PRESENT WORTH OFTHE EXCESS, IF ANY, OFTHE FAIR MARKET RENTAL VALUE OF THE ESTATE OR INTEREST, UNDIMINISHEDBY ANY MATTERS FOR WHICH CLAIM IS MADE, FOR THAT PART OF THE TERM STATED IN SCHEDULE A HEREIN THEN REMAINING PLUS ANY RENEWAL OR EXTENDED TERM FOR WHICH A VALID OPT10N TO RENEW OR EXTEND IS CONTAINED 1N THE LEASE. OVER THE VALUE OF THE RENT .AND OTHER CONSIDERATION REQUIRED TO BE PAID UNDER THE LEASE FOR THE SAME PERIOD. 15. MISCELLANEOUS ITEMS OF LOSS IN THE EVENT THE INSURED IS EVICTED FROM POSSESSION OF ALL OR A PART OF THE LAND BY REASON OF ANY MATTERS INSURED AGAfNSTBY THIS POLICY. THE FOLLOWING, IF APPLICABLE, SHALL BE INCLUDED IN COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, BUT NOT TO THE EXTENT THAT THE SAME ARE INCLUDED IN THE VALUATION OF THE ESTATE OR INTEREST INSURED BY THIS POLICY. (A) THE REASONABLE COST OF REMOVING AND RELOCATING ANY PERSONAL PROPERTY WHICH THE INSURED HAS THE RIGHTTO REMOVE AND RELOCATE, SITUATED ON THE LAND AT THE TIME OF EVICTION, THE COST OF TRANSPORTATION OF THAT PERSONAL PROPERTY FOR THE INITIAL TWENTY-FIVE MILES INCURRED IN CONNECTION WITH THE RELOCATION, AND THE REASONABLE COST OF REPAIRING THE PERSONAL PROPERTY DAMAGED BY REASON OF THE REMOVAL AND RELOCATION. THE COSTS REFERRED TO ABOVE SHALL NOT EXCEED IN THE AGGREGATE THE VALUE OF THE PERSONAL PROPERTY PRIOR TO ITS REMOVAL AND RELOCATION. "PERSONAL PROPERTY", ABOVE REFERRED TO. SHALL MEAN CHATTELS AND PROPERTY WHICH BECAUSE OF ITS CHARACTER AND MANNER OF AFFIXATION TO THE LAND. CAN BE SEVERED THEREFROM WITHOUT CAUSING APPRECIABLE DAMAGE TO THE PROPERTY SEVERED OR TO THE LAND TO WHICH THE PROPERTY IS AFFIXED. (B., RENT OR DAMAGES FOR USE AND OCCUPANCY OF THE LAND PRIOR TO THE EVICTION WHICH THE INSURED AS OWNER OF THE LEASEHOLD ESTATE MAY BE OBLIGATED TO PAY TO ANY PERSON HAVING PARAMOUNTTITLE TO THAT OF THE LESSOR IN THE LEASE. (Cl THE AMOUNT OF RENT WHICH. BY THE TERMS OF THE LEASE, THE ENSURED.MUST CONTINUE TO PAY TO THE LESSOR AFTER EVICTION FOR THE LAND, OR PART THEREOF, FROM WHICH THE INSURED HAS BEEN EVICTED. (Di THE FAIR MARKET VALUE. AT THE TIME OF THE EVICTION, OF THE ESTATE OR INTERESTOF THE INSURED IN ANY SUBLEASE OF ALL OR PART OF THE LAND EXISTING AT THE DATE OF THE EVICTION. (E) DANJAGES WHICH THE INSURED MAY BE OBLIGATED TO PAY TO ANY SUBLESSEE ON ACCOUNT OF THE BREACH OF ANY SUBLEASE OF ALL OR PART OF THE LAND CAUSED BY THE EVICTION. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECTTO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS. !FOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance Company /e/ 61- " BY JEFFREY L. MURDOCK • ASSISTANT SECRETARY ALTA Leasehold Owners Policy (1997 Fnrm and later) F.A. Form 16.1 (Effective 6!1187) (MODIFIED) • ENDORSEMENT ATTACHED TO POLICY NO. OR-9736089 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNERS OF THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS. 1997 SERIES A (PUBLIC FACILITIES PROJECT) REFERRED TO IN SCHEDULE A. AS THEIR INTERESTS MAY APPEAR. AGAINST LOSS OR DAMAGE SUSTAINED BY REASON OF THE FAILURE OF (1) THE SUBLEASE REFERRED TO IN PARAGRAPH 2 (B) OF SCHEDULE A HEREINAFTER REFERRED To AS "SUBLEASE.' TO BE VALID AT DATE OF POLICY AS TO THE LAND DESCRIBED THEREIN, AND (II) ATTHE COMMENCEMENT OF ITS TERM TO BE BINDING AS TO THE LAND DESCRIBED THEREIN. SUBJECT TO THE FOLLOWING: (A) ANY FACTS, RIGHTS, INTERESTS OR CLAIMS WHICH ARE NOTSHOWN BY THE PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY MAKING INQUIRY OF THE LESSOR UNDER EITHER THE LEASE REFERRED TO IN SCHEDULE A OR THE SUBLEASE; (B) ANY FAILURE TO COMPLY WITH THE TERMS AND PROVIS(ONSOF THE LEASE REFERRED TO IN SCHEDULE A OR THE SUBLEASE; (Ci ANY ACTS OF A PARTY TO THE SUBLEASE, OR ITS SUCCESSORS IN INTEREST, BY WHICH ANY RIGHTS. INTERESTS OR OBLIGATIONS THEREUNDER ARE RELEASED OR IMPAIRED; AND (Dj ANY TERMINATION OF THE SUBLEASE PURSUANT TO THE TERMS AND PROVISIONS THEREOF. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO- EXCEPT TO THE EXTENT EXPRESSLY STATED. IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. Hirst American Title Insurance Company /9 , - " BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY CLTA Form 119.4 (Rev. 6-14-96) CLTA - Bondholder's Policy (MODIFIED) I Ulf I,J Iv rV rr.F N ..,f •f. l/'r, JLU. GV, 1. J..) (1 11Y1' 1 36 34 i j srr ur ae-rrr r !I n, :yi r•Y Rl� 1Y r J.fY 02 7vF v —.... C� N � ---- r V 7i p � ?.s4 Ac OCEAN VIFP HIGH SC/IDOL 0 03 rl w 3 •7AC 04 — 05 E65-21' w z y � rINTfASaURG 3 HIGH SCHOOL . w . HIGH SCHOOL co" 'vEl11 *rs, r = II I55 -1 3 MARCH 1951 PARCEL MAP PARCEL MAP Ifi5- 20 165 - 41 Jrr rIr so 165 40 !C' �- ti I'll VA ON - nl u��sm f0' C) It) Jo IO �r � •rr ems- . �:_ '••.._ q •• :, • ?Et M. n "i—TV \ N reawl. IRJ rw b!7 AC MovIINGION CO1RAI PgNA' �O .» 69 ."Ago 159� 1 AMf rJ' surf ,fAf � ieT. in _c � ms-39 RM, . M •b - 1(i5-03 Ics -UI PM 139-27 NOTE - ASSESSORS BLOCK B ASSESSOR'S MAP PM 199 B PARCEL NUMBFRS BOOKIII RAGE 01 SHOWN IN CIRCLES COUNTY OF ORANGE x 0 0 0 • 11..1J1.) IV I Nmijif I; "lijilivIft J)Jdyy 3? V.?0111 -.H0S,;1551, - j I On L Z 01 L J-OL I JV69'1 Cq 1) (6,9 fvR:71J J8N)AV Ivi 063 un 01 6S L fh-i L I f?/ -/OC? K Id dw ? 1-7.yvj 1661 Hiluv" 01 12 R-d rr d -691 44 Iv r I NOW I L-011 IS Af N 10 ID9 60 E First American Title Insurance Company THIS MAP 15 FOR INFORMATION ONLY AND IS NOT A PART OF THIS T1Ttf IVIDINCe CO� A M F k I ti 0 A6 y� First American Title Insurance Company 7 POLICY OF TITLE INSURANCE 0 0 • • • 0 SAN FRANCISCO OFFICE SIEUART STREET TOWER. SLTIE ]300 ONE MARKET PLAZA SAN FRANCISCO, CALIFORNIA 951M1403 (413T 281-2000 SAN DID EGO OFFICE 2Y1 BROADWAY. SUDS 1900 SAN DIEGO, CALIFORNIA 921MZC6 (619) 525-2500 To: Attached Distribution List MUSICK, PEELER & GARRETT LLP ATTORNEYS AT LAW ONE WILSHIRE BOULEVARD LOS ANGELES, CALIFORNIA 90017.3363 TELBPHONE (213) 629-76DO FACSIMILE (213) 624-1376 WRITER'S DIRECT DEAL NUMBER (213) 629-7841 November 25, 1997 RECOVE0 C1TY f,_ERA H U N T I ► ('.11 �; = � Cr"A b6EiCE 6011 NORTH FIRST STREET DEC �RTjE t W 937 G-%" ORANGE COUNTY OFFICE SUITE S00 00 TOWN CENTER DRIVE COSTA MESA CALIFORNIA 926751925 (7141 666M0 Re: $8,070,000 Huntington Beach Public Financing Authority Lease Revenue Bonds, 1997 Series A (Public Facilities Project) Enclosed please find the long awaited Title Policy with regard to the above captioned financing. Please insert this document under Tab No. B.7. Thank you for your patience in this regard. S50:sso 9160274 Very truly yours, usan S. Omokawa Paralegal for MUSICK, PEELER & GARRETT LLP CJ • $8, 070, 000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS 1997 Series A (Public Facilities Project) Distribution List ISSUER City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 0 Robert J. Franz Deputy City Administrator Ron Hagan Director of Community Services • Scott F. Field, Esq. Deputy City Attorney • Connie Brockway (a) City Clerk Roger Ham Information Systems Manager N.LG/12215.001/K:\DATA\415\4150232 November 25, 1997 Tel: (714) 536-5511 Fax: (714) 374-1571 Tel: (714) 536-5236 Tel: (714) 536-5486 Fax: (714) 374-1590 Tel: (714) 536-5662 Fax: (714) 374-5227 Tel: (714) 374-1557 Fax: (714) 536-5605 or 536-2895 Tel: (714) 960-8804 • BOND COUNSEL IS Musick, Peeler & Garrett LLP Fax: (213) 624-1376 One Wilshire Boulevard Tel: (213) 629-7600 Los Angeles, California 90017 Maryann L. Goodkind Esq. Tel: (213) 629-7924 Musick, Peeler & Garrett LLP Fax: (415) 281-2010 Steuart Street Tower, 13th Floor One Market Plaza San Francisco, California 94105 Edsell M. Eady, Jr., Esq. Tel: (415) 281-2021 BOND COUNSEL CLOSING COORDINATOR Musick, Peeler & Garrett LLP Fax: (213) 624-1376 One Wilshire Boulevard Tel: (213) 629-7600 Las Angeles, California 90017 Susan S. Omokawa Tel: (213) 629-7841 DISCLOSURE COUNSEL Jones Hall Hill & White Fax: (415) 391-5785 A Professional Law Corporation Four Embarcadero Center, 19th Floor San Francisco, California 94111 • Andrew C. Hall, Esq. Tel: (415) 391-5780 FINANCING CONSULTANT Rod Gunn Associates, Inc. Fax: (562) 431-5446 3010 Old Ranch Parkway, Suite 330 Seal Beach, California 90740 Rodney L. Gunn Tel: (562) 598-7677 • Suzanne Q. Harrell MLG/_22':5.001/K:\DA':A\4:5\4=50232 November 25, 1997 0 0 TRUSTEE First Trust of California, National Association 550 South Hope Street, Suite 500 Los Angeles, California 90071 • Linda Verstuyft Assistant Vice President TRUSTEE'S COUNSEL Dorsey & Whitney 550 South Hope Street, Suite 500 Los Angeles, California 90071 • Dennis Wong, Esq. Fax: (213) 533-8750 Tel: (213) 533-8747 Fax: (213) 533-8736 Tel: (213) 533-8735 Standard & oor's Ratings"P Fax: (4I5) 433-7839 555 CaW rnia Street, 21 wFloor San ancisco, Califo is 94104 Chris in Tel: (415) 765-5020 BOND INSURER FSA Inc. Fax: (415) 995-8095 Steuart Street Tower, Suite 2350 One Market Plaza San Francisco, California 94105 Susan Shultis Tel: (415) 995-8027 • Barry Scott, Esq. Tel: (415) 995-8046 (3) Judith K. Solle, Paralegal Tel: (415) 995-8021 PURCHASER Merrill Lynch Fax: (213) 217-4596 Two California Plaza 350 S. Grand Avenue, Suite 2820 Los Angeles, California 90017 • Joe Gechtman Tel: (213) 217-4444 Min+/12215.001/K:\AATA\415\4150232 Nevericer 25, 1997 • 0 • • SAN FRANCISCO OFFICE STEL'ART STREET TOWER, SURE 1300 ONE MARKEC PLAZA SAN FRANCISCO, CAUFORNIA 94115-14M (413) 2S1a0In SAN DIEGO OFFICE 225 BROADWAY. SU11E 1900 SAN DIEGO. CALIFORNIA 921("-= (619) 515,-1500 To: Attached Distribution List MUSICK, PEELER & GARCITY cITRETT LLP C vFo _ � „LEZA ATTORNEYS AT LAW '?Y OF Ht)NTJNJ;Tr> PEAMi,A6t9NOOFFICE ONE WILSHIRE BOULEVARD 6[41 NORTH FIRST S7REET LOS ANGELES, CALIFORNIA 90017.3383 DEC 56 ��"al,2>a1m" TELEPHONE (213) 629-7600 FACSIMILE 12131 624-1376 WRITER'S DIRECT DIAL NUMBER (213) 629 -78 41 November 25, 1997 Re: $8,070,000 Huntington Beach Public Financing Authority Lease Revenue Bonds, 1997 Series A (Public Facilities Project) 650 TOWN CENTER DRIVE COSTA MESA, CALIFORNIA 92Q&1925 (914) 666- G Enclosed please find the long awaited Title Policy with regard to the above captioned financing. Please insert this document under Tab No. B.7. Thank you for your patience in this regard. SSO:sso 9160274 Very truly yours, �=an S. Omokawa Paralegal for MUSICK, PEELER 86 GARRETT LLP $8, 070, 000 HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS 1997 Series A (Public Facilities Project) Distribution List ISSUER City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 • Robert J. Franz Deputy City Administrator Ron Hagan Director of Community Services • Scott F. Field, Esq. Deputy City Attorney • Connie Brockway (�) City Clerk Roger Ham Information Systems Manager N.L--/122=5.001/K:\DATA\415\4150232 November 25, 1997 Tel: (714) 536-5511 Fax: (714) 374-1571 Tel: (714) 536-5236 Tel: (714) 536-5486 Fax: (714) 374-1590 Tel: (714) 536-5662 Fax: (714) 374-5227 Tel: (714) 374-1557 Fax: (714) 536-5605 or 536-2895 Tel: (714) 960-8804 BOND COUNSEL Musick, Peeler & Garrett LLP Fax: (213) 624-1376 One Wilshire Boulevard Tel: (213) 629-7600 Los Angeles, California 90017 Maryann L. Goodkind Esq. Tel: (213) 629-7924 Musick, Peeler & Garrett LLP Fax: (415) 281-2010 Steuart Street Tower, 13th Floor One Market Plaza San Francisco, California 94105 Edsell M. Eady, Jr., Esq. Tel: (415) 281-2021 BOND COUNSEL CLOSING COORDINATOR Musick, Peeler & Garrett LLP Fax: (213) 624-1376 One Wilshire Boulevard Tel: (213) 629-7600 Los Angeles, California 90017 Susan S. Omokawa Tel: (213) 629-7841 DISCLOSURE COUNSEL Jones Hall Hill & White Fax. (415) 391-578S A Professional Law Corporation Four Embarcadero Center, 19th Floor San Francisco, California 94111 • Andrew C Hall, Esq. Tel: (415) 391-5780 FINANCING CONSULTANT Rod Gunn Associates, Inc. Fax: (562) 431-5446 3010 Old Ranch Parkway, Suite 330 Seal Beach, California 90740 Rodney L. Gunn Tel: (562) 598-7677 • Suzanne Q. Harrell MLG/12215.001/K:\DATA\415\4150232 November 25, 1997 • TRUSTEE IS First Trust of California, National Association 550 South Hape Street, Suite 5010 Los Angeles, California 90071 • Linda Verstuyft Assistant Vice President TRUSTEE'S COUNSEL Dorsey & Whitney 550 South Hope Street, Suite 500 Los Angeles, California 90071 • Dennis Wong, Esq. Fax: (213) 533-8750 Tel: (213) 533-8747 Fax: (213) 533-8736 Tel: (213) 533-8735 Standard & nor's Ratings ,muP Fax; (415) 433-7839 555 CaWmia Street, 2!p f oor San ancisco, Califo is 94104 • Chris in Tel: (415) 765-5020 BOND INSURER FSA Inc, Fax: (415) 995-8095 Steuart Street Tower, Suite 2350 One Market Plaza San Francisco, California 94105 Susan Shultis Tel: (415) 995-8027 • Barry Scott, Esq. Tel: (415) 995-8046 (3) Judith K. Solle, Paralegal Tel: (415) 995-8021 PURCHASER Merrill Lynch Fax: (213) 217-4596 Two California Plaza 350 S. Grand Avenue, Suite 2820 Los Angeles, California 90017 • Joe Gechtman Tel: (213) 217-4444 ML,G/12215.6.0:/K:\--ATA\415\4150232 November 25, 1997 Form No. 1402.92 (10117/921 ALTA Owner's Pol:cy POLICY OF TITLE INSURANCE 14"L'EU BY First American Title Insurance Company SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage. not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of: l 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any detect in or lien or encumbrance on the title; 3. UnmarketabilV of the title; 4. Lack of a right of access to and from the land. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured, but only to the extent provided in the Conditions and Stipulations. First American Title Insurance Company 131' Y44-'LX!i PRE5IDEN7 J A77EST �;4 / SECRETARY • EXCLUSIONS FROM COVERAGE . The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attomeys' fees or expenses which arise by reason of: 1. (a) Any iaw, ordinance or governmental regulation (including but not limited to building and zoning laws, ordinances. or regulations) restricting. regulating, prohibiting or relating to (i) the occupancy. use. or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy, (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered. assumed or agreed to by the insured claimant; (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy; or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer: or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer; or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. CONDITIONS AND STIPULATIONS DEFINITION OF TERMS. The following terms when used in this policy mean - (a) 'insured': the insured named in Schedule A. and, subject to any rights or defenses the Company would have Oagainst the named insured. those who succeed to the rest of the named insured by operation of law as tinguished from purchase including, but not limited to, heirs. distnbutees. devisees. survivors, personal representa- tives, next of km. or corporate or fiduciary successors. (a) '-insured claimant': an insured claiming loss or damage. (cl "knowledge" o, "known": actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of the public recoras as defined in this policy or any other recoras wh;ch impart constructive notice of matters affecting the land. (d) "land": the land descnbea or referred to in Schedule (A), and improvements affixed thereto wnich by law constitute real property. The term "land' does not include any property beyond the lines of the area deSCnbed or referred to in Schedule (A). nor any nght. bile, interest. estate or easement in aouning streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured oy this policy. (e; "mortgage': mortgage, deed of trust. trust deed. or other secunty instrument. (f) -public records": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. With respect to Section 1(a)riv) of the Exc!usions From Coverage, "public records" shall also incuae environmental protection liens filed in the records of the clerk of the United States district court for the c.strict in which the land is located. (g) "unmarketabdity of the title': an alleged or apparent matter affecting the title to the land. not excluded or excepted from coverage. wnich would entitie a purchaser of he estate or interest described inSchedule A to be released the obrigation to purcnase by virtue of a contractual ddion requiring the delivery of markeiaole title. 2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE. The coverage of this policy shall continue in force as of Date o1 Policy in favor of an insures only so long as the insurea retains an estate or interest in the land. or hulas an indebtedness secured ny a purcnase money mortgage given by a purchaser from the insured. or only so long as the by this policy which constitutes the basis of loss or damage and shall state, to the extern possible. the basis of calculating the amount of the loss or damage. H the Company is prejudiced by the failure of the insured claimant to provide the required proof of loss or damage, the Companys obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, won regard to the matter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company, all records, books, ledgers, checks. correspondence and memoranda. whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant snail grant its permission, in writing. for any autnorized rep• resentauve of the Company to examine, inspect and copy all retards, books. ledgers. checks, correspondence and mem- oranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All Information designated as confidential by the insured claimant provided to the Company pursuant to this Section shall not be disclosed to others unless. in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary informa- tion from third parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. b. OPTIONS To PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance_ To pay or tender payment of the amount of insurance under this policy together with any costs, attomeys' fees and expenses incurred by the insured claimant which were authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to pay. Upon the exercise by the Company of this option, all liability and obligations to the insured under this policy. other than to make the payment required. shall terminate, including any liability or obligation to defene. prosecute. or continue for any loss or damage caused thereby. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the insured in Settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. All payments under this policy, except payments made for costs. attorneys' fees and expenses, shall reduce the amount of the insurance pro tanto. 11. LIABILITY NONCUMULATIVE. It is expressly understood that the Amount of In- surance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed, or taken subject. or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be deemed a payment under this policy to the insured owner. 12. PAYMENT OF LOSS. (a) No payment shall be made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed. in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations. the loss or damage shall be payable within 30 days thereafter. 13. SUBROGATION UPON PAYMENT OR SETTLEMENT. (a) The Company's Right of Subregetfon. Whenever the Company shall have settled and paid a claim under this policy, all right of Subrogation shall vest in the'Company unaffected by any act of the insured claimant. The Company shall be subrogated to and be entitled to all rights and remedies which the insured claimant would have of Date bL Policy in favor of an insured only so long as tot; insured retains an estate or interest in the land. or holds an �N�„ ,..c 6AC.,..QZ .., .. a w Ilwd. J — .,,,J . -%d,,. c., liability and obligations to the insured under this policy, other Cia:m unaer this policy. all ngnt of subrogation Snail vest in the Company unaffected by any act of the insured claimant. indebtedness secured by a purchase money mortgage give by a purchaser from the insured, or only so long as than to make the payment required, shall terminate, including The Company shall be subrogated to and be entitled to all any liability or obligation to defend, prosecute, ar continue rights and remedies which the insured claimant would nave insured shall have Liability by reason of covenants of warranty made by rite insured in any transfer or conveyance of the any litigation. and the policy shall be surrendered to the Company for cancellation. had against any person or property in respect to the Ciaim had this policy not been issued. It requested by the Company. estate or interest. This policy shall not continue in force in (b) To Pay or Otherwise Settle With Parties Other than the insured claimant shall transfer to the Company all rights favor of any purchaser from the insured of either (1) an estate. the Insured or With the Insured Claimant. and remedies- against any person or property necessary in r interest in the land, or (ii) an indebtedness secured by a (i) to pay or otherwise settle with other parties for order to perfect this right of subrogation. The insured hase money mortgage given to the insured. or in the name of an insured claimant any claim insured claimant shall permit the Company to sue, compromise or against under this policy, together with any costs, attorneys' settle in the name of the insured claimant and to use me name NOTICE OF CLAIM TO BE GIVEN BY fees and expenses incurred by the insured claimant which of the insured claimant in any transaction or litigation INSURED CLAIMANT. were authorized by the Company up to the time of payment involving these rights or remedies. and which the Company is obligated to pay: or If a payment on account of a claim does not fully cover The insured shall notify the Company promptly in (ii) to pay or otherwise settle with the insured the loss of the insured claimant, the Company shall be writing (i) in case of any litigation as set forth in Section 4(a) claimant the loss or damage provided for under this policy, subrogatea to these rights and remedies in the proportion below. (ii) in case knowledge shall come to an insured together with any costs, attorneys, fees and expenses which the Companys payment bears to the whole amount hereunder of any claim of title or interest which is adverse to incurred by the insured claimant which were authorized by the of the loss. the title to the estate or interest, as insured, and which might Company up to the time of payment and which the Company If loss should result from any act of the insured cause loss or damage for which the Company may be liable is obligated to pay. claimant. as stated above, that act shall not void this policy. by virtue of this policy. or (iii) if title to the estate or interest, Upon the exercise by the Company of either of the but the Company, in that event, shall be required to pay only as insured, is rejected as unmarketable. If prompt notice snail options provided for in paragraphs (b)(i) or (ii), the Corn- that part of any losses insured against by this policy which not be given to the Company, then as to the insured all liability pangs obligations to the insured under this policy for the shall exceed the amount, d any, lost to the Company by of the Company shall terminate with regard to the matter or claimed loss or damage, other than the payments required to reason of the impairment by the insured claimant of the matters for which prompt notice is required; provided, be made, shall terminate, including any liability or obligation Company's right of subrogation. however, that failure to notify the Company shall In no case to defend, prosecute or continue any litigation. prejudice the rights of any insured under this policy unless 7 DETERMINATION, EXTENT OF LIABILITY the Company shall be prejudiced by the failure and then only to the extent of the prejudice. AND COINSURANCE. 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE. (a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay. shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or en- cumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the insured to object for reasonable cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of y other counsel. The Company will not pay any fees, costs xpenses incurred by the insured in the defense of those ses of action which allege matters not insured against by his policy. (b) The Company shall have the right, at its own cost, to institute and prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest, as insured, or to prevent or reduce loss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (c) Whenever the Company snall have brought an action or interposed a defense as required or permitted by the provisions of this policy, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in Its sale discretion, to appeal from any adverse judgment or order. (d) in all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding, IN insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, and all appeals therein, and permit the Company to use, at Its option, the name of the insured for this purpose. Whenever requested by the Company, the insured, at the Company's expense, shall give the Company all reasonable aid (i) in any action or proceeding, securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement. and (ii) in any other lawful act wnich in the opinion of the Company may be necessary or desirable to establish the title to the estate or interest as insured. If the Company is prejudiced by the failure at the insured to furnish the required cooperation, the Company's obligations to the insured under the policy shall rminate. !ncluaing any liability or obligation to defend, secute, cr continue any litigation. with regard to the matter matters requiring such cooperation. 5. PROOF OF LOSS OR DAMAGE. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (1) the Amount of Insurance stated in Schedule A; (ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the detect. Gen or encumbrance insured against by this policy. (b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estate or interest or the full consideration paid for the land, whichever is less. or if subsequent to the Date at Policy an improvement is erected on the land which increases the value of pre insured estate or interest by at least 20 percent over the Amount of Insurance stated in Schedule A. then this Policy is subject to the following; (i) where no subsequent improvement has been made. as to any partial loss, the Company shall only pay the loss pro rata in the proportion that the Amount of Insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (ii) wnere a subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rata in the proportion that 120 percent of the Amount of Insurance stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for me improvement. The provisions of this paragraph shall not apply to costs, attorneys' fees and expenses for which the Company is liable under this policy. and shall only apply to that portion of any loss which exceeds. in the aggregate. 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs. attorneys' fees and expenses incurred in accordance with Section 4 of these Conditions and Stipulations. B. APPORT10NMENT. If the land described in Schedule (A)(C) consists of two or more parcels which are not used as a single sim and a loss is established affecting one or more of the parcels but not all, the lass shall be computed and settlea on a pro rata basis as if the Amount of Insurance under this policy was divided pro rata as to the value on Date of Policy of each separate parcel to the whole. exclusive of any improvements made suD- Sequent to Date of Policy. unless a liability or value has otherwise been agreed upon as to each parcei by the Company and the insured at the time of the issuance at this policy and shown by an express statement or by an endorsement attached to this pocy. 9. LIMITATION OF LIABILITY. (b) The Company's Rights Against non-insured Obligors. The Company's right of subrogation against non- insured obligors shall exist and shall include, without limitation. the rights of the insured to indemnities, guaranties. Omer policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. 14. ARBITRATION. Unless prohibited by applicable law, either the Com- pany or the insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1.000,000 or less shall be arbitrated at the option of either the Company or the insured. All arbitrable matters when the Amount at Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Mules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy snail be binding upon the parties. The award may include attorneys' fees only it the laws of the state in which the land is located permit a court to award attomeys' fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. (a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpret- ing any provision of this policy, this policy shall be construed as a whole_ (b) Any claim of loss Or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President. a Vice President. the Secretary, an Assistant Secretary, or validating officer or authorized signatory of the Company- 16. SEVERABILITY. In the event any provision of the policy is held invalid or unenforceable unaer applicable law. the policy snail be deemed not to include that provision and all other provisions shall remain in full force and effect. In addition to and after the notices required under Section 3 of These Conditions and Stipulations have been (a) It the Company establishes the title. or removes the 17. NOTICES. WHERE SENT. proviaea the Company. a proof of lass or damage signed and alleged defect, lien or encumbrance, or cures the lack of a sworn to by the insured claimant shall tie furnisned to the right of access to or from the land, or cures the claim of All notices required to be given the Company and any Company within 90 Gays after me insured Claimant Shall unmarketability of title, all as insured, in a reasonably diligent statement in writing required to be furnished the Company aScerrain me facts diving rise to the loss or Damage. The manner by any method. including litigation and the comple- shall include the number of this policy and shall be addressed ��._ , .. , .- . - - .. - . . • C� • • ALTA OWNERS POLICY AMOCNT OF INSURANCE: DATE OF POLICY NAME OF INSURED. SCHEDULE A TOTAL FEE FOR TITLE, EXAMINATION AND TITLE INSURANCE $11,350.50 $8,070,000.00 MAY 13, 1997 AT 9:47 A. M. OR-9736089 TITLE OFFICER - SWIERCZEWSKI CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION; THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA; FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION; AND FINANCIAL SECURITY ASSURANCE INC., A NEW YORK STOCK INSURANCE COMPANY, ITS SUCCESSORS AND ASSIGNS AS DEFINED IN PARAGRAPH I(a) OF THE CONDITIONS AND STIPULATIONS OF THIS POLICY. THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THIS POLICY IS: (A) A FEE. (B) THE LEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED BASE LEASE DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSOR AND THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSEE, FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN; AND THE SUBLEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED LEASE AGREEMENT DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSOR AND THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSEE FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN: NOTE: THE SUBLESSOR'S INTEREST UNDER SAID SUBLEASE HAS BEEN ASSIGNED TO FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION BY AN UNRECORDED ASSIGNMENT AGREEMENT DATED MAY 1, 1997, PAGE 2 • C' ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI ALL AS DISCLOSED BY A MEMORANDUM OF LEASE RECORDED MAY 13, 1997 AS INSTRUMENT NO. 19970221305 OF OFFICIAL RECORDS.. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN: CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (A) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY; AND CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AND FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION EACH AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (B) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS: (SEE EXHIBIT "A" ATTACHED HERETO.) • 0 PAGE 3 0 ALTA OWNERS POLICY 9 OR-9736089 TITLE OFFICER - SWIERCZEWSKI SCHEDULE B EXCEPTIONS FROM COVERAGE THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS, ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: 1. THE RESERVATION OF THE SOUTHERLY 30 FEET OF SECTION 26, TOWNSHIP 5 SOUTH, RANGE 11 WEST FOR ROAD, RAILROADS AND DITCHES, ALSO THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT, AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED IN THE DEED RECORDED MARCH 13, 1885 IN BOOK 137, PAGE 203 OF DEEDS, RECORDS OF LOS ANGELES COUNTY. 2. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM ALFRED ROBINSON, TRUSTEE, RECORDED MARCH 25, 1885 IN BOOK 137, PAGE 303 OF DEEDS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. 3. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES, AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID TRACT; AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED BY THE STEARNS RANCHOS COMPANY, A CORPORATION, IN THE DEED RECORDED JUNE 3, 1895 IN BOOK 87, PAGE 249 OF DEEDS. 4. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM THE STEARNS RANCHOS COMPANY, RECORDED JULY 19, 1905 IN BOOK 91, PAGE 135 OF DEEDS. 5. THE CONTINGENT OBLIGATIONS AS CONTAINED IN THE DEED FROM B. T. GOTHARD AND AGNES B. GOTHARD, HIS WIFE, TO STANDARD OIL COMPANY, A CORPORATION, RECORDED MAY 26, 1921 IN BOOK 389, PAGE 240 OF DEEDS, AS FOLLOWS: "IN THE EVENT THAT WELLS ARE DRILLED AND OIL PRODUCED IN PAYING QUANTITIES WITHIN TEN YEARS OF THE DATE HEREOF UPON PROPERTY ADJOINING THE LAND HEREIN DESCRIBED PAGE 4 0 0 ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI AND WITHIN 300 FEET OF THE BOUNDARY LINE OF THE PROPERTY HEREIN DESCRIBED THE PARTY OF THE SECOND PART SHALL, WITHIN 90 DAYS AFTER DISCOVERY OF OIL IN PAYING QUANTITIES IN SUCH WELLS, COMMENCE AND ACTUAL DRILLING OF WELL ON THE HEREIN DESCRIBED PREMISES AND PROSECUTE THE SAME WITH REASONABLE DILIGENCE UNTIL OIL IS FOUND IN QUANTITIES DEEMED PAYING QUANTITIES BY THE PARTY OF THE SECOND PART, OR TO A DEPTH AT WHICH FURTHER DRILLING, WOULD, IN THE JUDGMENT OF THE PARTY OF THE SECOND PART, BE UNPROFITABLE. IF, HOWEVER, OIL IS NOT FOUND AND PRODUCED IN PAYING QUANTITIES FROM SUCH WELLS WITHIN 300 FEET OF THE BOUNDARIES OF THE HEREIN DESCRIBE PROPERTY, WITHIN SAID 10 YEAR PERIOD, ALL RIGHTS OF THE PARTIES OF THE FIRST PART UNDER THIS CLAUSE SHALL CEASE AND DETERMINE. "IF OIL IS FOUND IN SUCH PAYING QUANTITIES IN THE WELL SO DRILLED BY THE PARTY OF THE SECOND PART, THE PARTY OF THE SECOND PART SHALL CONTINUE TO DRILL ADDITIONAL WELLS ON SAID PREMISES AS RAPIDLY AS AT LEAST ONE STRING OF TOOLS WORKING WITH DUE DILIGENCE, CAN COMPLETE THE SAME, UNTIL FURTHER DRILLING WOULD, IN THE JUDGMENT OF THE SAID PARTY OF THE SECOND PART, BE UNPROFITABLE, OR UNTIL THERE SHALL HAVE BEEN COMPLETED ON THE PREMISES HEREIN DESCRIBED 3 WELLS." SUBJECT TO CERTAIN PROVISIONS, COVENANTS AND CONDITIONS AS THEREIN SET FORTH, TO WHICH RECORD REFERENCE IS MADE FOR FULL PARTICULARS. THE INTEREST OF B. T. GOTHARD HAS PASSED TO AND IS AT THE DATE HEREOF VESTED IN BESSIE L. GOTHARD, AS HER SEPARATE PROPERTY. THE INTEREST OF AGNES B. GOTHARD HAS PASSED TO AND WAS DISTRIBUTED TO THE FOLLOWING PERSONS BY A DECREE OF DISTRIBUTION RENDERED DECEMBER 13, 1965 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE IN THE MATTER OF THE ESTATE OF AGNES B. GOTHARD, DECEASED, (CASE NO. A-47000), A CERTIFIED COPY OF WHICH WAS RECORDED DECEMBER 15, 1965 IN BOOK 7775, PAGE 140 OF OFFICIAL RECORDS: TO CARL KRAUCHI, ONE -SIXTH THEREOF; TO ANNE M. SPRINGER, ONE -SIXTH THEREOF; TO AZALES CUMMINGS, ONE -SIXTH THEREOF; TO MARY GOLDMAN, ONE -SIXTH THEREOF, TO CHARLES A. KRAUCHI, ONE -TWELFTH THEREOF; TO DORIS ALLERS, ONE -TWELFTH THEREOF; TO DRENNEN KRAUCHI, ONE -SIXTH THEREOF. NOTE; THE NAME OF DRENNAN KRAUCHI WAS CHANGED TO DRENNAN ABERN BY DECREE RENDERED OCTOBER 26, 1934 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE, CASE NO. A-4101. PAGE • ALTA OWNERS POLICY 4R-9736089 TITLE OFFICER - SWIERCZEWSKI 6. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED JUNE 14, 1921 IN BOOK 400, PAGE 229 OF DEEDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 7. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 13, PAGE 49 OF OFFICIAL RECORDS AND IN AN INSTRUMENT RECORDED IN BOOK 581, PAGE 489 OF OFFICIAL RECORDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 8. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM COUNTY OF ORANGE, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, AS GRANTEE, RECORDED DECEMBER 20, 1963 1N BOOK 6854, PAGE 265 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. 9. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 7525, PAGE 963 OF OFFICIAL RECORDS, FOR: ROAD AND INCIDENTAL PURPOSES. OVER.: A PORTION OF THE LAND. 10. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 8922, PAGE 990 OF OFFICIAL RECORDS, FOR: STREET CONSTRUCTION AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. II. A JOINT USE AGREEMENT, DATED SEPTEMBER 2, 1971, EXECUTED BY STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION AND CITY OF HUNTINGTON BEACH, RECORDED NOVEMBER 29, 1971 IN BOOK 9905, PAGE 115 OF OFFICIAL RECORDS, TO WHICH RECORD REFERENCE IS MADE FOR FULL PARTICULARS. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 12. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM STANDARD OIL COMPANY OF CALIFORNIA, A DELAWARE CORPORATION, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS GRANTEE, RECORDED FEBRUARY 11, 1972 IN BOOK 9998, PAGE 389 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. NOTE: AN INSTRUMENT ENTITLED "ASSIGNMENT AND QUITCLAIM DEED" RECORDED JUNE l7, 1993 AS INSTRUMENT NO. 93-0405449 OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. PAGE 6 0 0 ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI 13. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3434, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH OF INTENTION TO CLOSE A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 1972 IN BOOK 10023, PAGE 873 OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 14. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3441 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ORDERING THE CLOSURE OF A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 19721N BOOK 10023, PAGE 876OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 15. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "NOTICE OF DEED RESTRICTION", EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, RECORDED IN BOOK 10357, PAGE 959 OF OFFICIAL RECORDS. 16. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED OCTOBER 19, 1973 IN BOOK 10954, PAGE 289 OF OFFICIAL RECORDS, IN FAVOR OF: STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION, AND STANDARD GASOLINE COMPANY FOR: PIPELINES, APPURTENANCES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 17. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "COVENANT", EXECUTED BY CITY OF HUNTINGTON BEACH, RECORDED IN BOOK 11251, PAGE 546 OF OFFICIAL RECORDS. 18. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED DECEMBER 7, 1979 IN BOOK 13425, PAGE 1904 OF OFFICIAL RECORDS, IN FAVOR OF: SOUTHERN CALIFORNIA EDISON COMPANY, A CORPORATION. FOR: UNDERGROUND ELECTRICAL SUPPLY SYSTEMS, COMMUNICATION SYSTEMS AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 19. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND RECORDED IN BOOK 138, PAGE 9 OF RECORD OF SURVEYS. 20. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED JUNE 17, 1996 AS INSTRUMENT NO. 19960305030 OF OFFICIAL RECORDS. 21. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED OCTOBER 10, 1996 AS INSTRUMENT NO. 19960516765 OF OFFICIAL RECORDS. 0 PAGE? 0 AI.iA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI 22. ANY FAILURE TO COMPLY WITH THE TERMS, CONDITIONS AND PROVISIONS OF ANY LEASE OR SUBLEASE AND THE AMENDMENTS THEREOF, AS SHOWN HEREIN. 23, ANY FACTS, RIGHTS, INTEREST OR CLAIMS WHICH A CORRECT ALTA SURVEY WOULD SHOW. PAGE 8 0 ALTA OWNERS POLICY • OR-9736089 TITLE OFFICER - SWIERCZEWSKI EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE it WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND FASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26; THENCE SOUTH 890 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET, THENCE NORTH 87' 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36' 13, 50" WEST, 535.78 FEET; THENCE NORTH 0° 12' 15" EAST, 377.82 FEET; THENCE NORTH 83° 19' 27" WEST, 562.50 FEET; THENCE SOUTH 210 08' 07" WEST, 261.18 FEET; THENCE SOUTH 14' 28' 10" EAST 235.93 FEET; THENCE SOUTH 770 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2° 07, 44" WEST 92.62, FEET TO THE TRUE POINT OF BEGINNING. PAGE 9 • • ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI DM WARNING "THE MAP ATTACHED HERETO MAY OR MAY NOT BE A SURVEY OF THE LAND DEPICTED THEREON, YOU SHOULD NOT RELY UPON IT FOR ANY PURPOSE OTHER THAN ORIENTATION TO THE GENERAL LOCATION OF THE PARCEL OR PARCELS DEPICTED. FIRST AMERICAN EXPRESSLY DISCLAIMS ANY LIABILITY FOR ALLEGED LOSS OR DAMAGE WHICH MAY RESULT FROM RELIANCE UPON THIS MAP." PAGE 10 ENDORSEMENT ATTACHED TO POLICY NO. OR-9736Q$9 LSSUED BY . First American Title Insurance Company THE COMPANY HEREBY INSURES AGAINST LOSS WHICH THE INSURED SHALLSUSTAIN BY REASON OF ANY OF THE FOLLOW14G MATTERS - ANY INCORRECTNESS IN THE ASSURANCE WHICH THE COMPANY HEREBY GIVES: (A) THAT THERE ARE NO PRESENT VIOLATIONS ON THE LAND OF ANY ENFORCEABLE COVENANTS. CONDITIONS OR RESTRICTIONS: (B) THAT. EXCEPT AS SHOWN INSCHEDULEB,THEREARENOENCROACHMENTS OFBUILDINGS, STRUCTURES. OR IMPROVEMENTS LOCATED ON THE LAND ONTO ADJOINING LANDS. NOR ANY ENCROACHMENTS ONTO THE LAND OF BUILDINGS. STRUCTURES OR IMPROVEMENTS LOCATED ON ADJOINING LANDS. 2. UNMARKETABILITY OF THE TITLE TO THE ESTATE OR INTEREST BY REASON OF ANY VIOLATIONS ON THE LAND, OCCURRING PRIOR TO ACQUISITION OFTITLE TO THE ESTATE OR INTEREST BY THE INSURED. OF ANY COVENANTS. CONDITIONS OR RESTRICTIONS. DAMAGE TO EXISTING BUILDING IMPROVEMENTS, (A) WHICH ARE LOCATED OR ENCROACH UPON THE PORTION OF THE LAND SUBJECT TO ANY EASEMENT SHOWN IN SCHEDULE B, WHICH DAMAGE RESULTS FROM THE EXERCISE OF THE RIGHT TO USE OR MAINTAIN THE EASEMENT FOR THE PURPOSES FOR WHICH THE SAME WAS GRANTED OR RESERVED: (B) RESULTING FROM THE EXERCISE OF ANY RIGHT TO USE THE SURFACE OF THE LAND FOR THE EXTRACTION OR DEVELOPMENT OF THE MINERALS EXCEPTED FROM THE DESCRIPTION OF THE LAND OR SHOWN AS A RESERVATION IN SCHEDULES. 4- ANY FINAL COURT ORDER OR JUDGMENT REQUIRING REMOVAL FROM ANY LAND ADJOINING THE LAND OF ANY ENCROACHMENT SHOWN IN SCHEDULE B. WHEREVER IN THIS ENDORSEMENT ANY OR ALL THE WORDS "COVENANTS, CONDITIONS OR RESTRICTIONS' APPEAR, THEY SHALL NOT is BE DEEMED TO REFER TO OR INCLUDE THE TERMS. COVENANTS. CONDITIONS OR RESTRICTIONS CONTAINED IN ANY LEASE. NO COVERAGE IS PROVIDED UNDER THIS ENDORSEMENT AS TO ANY COVENANT. CONDITION, RESTRICTION OR OTHER PROVISION RELATING TO ENVIRONMENTAL PROTECTION. THE TOTAL LIABILITY OF THE COMPANY UNDER THE POLICY AND ANY ENDORSEMENTS THEREIN SHALL NOT EXCEED. IN THE AGGREGATE. THE FACE AMOUNT OF THE POLICY AND COSTS WHICH THE COMPANY IS OBLIGATED UNDER THE CONDITIONS AND STIPULATIONS THEREOF TO PAY. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO THE SCHEDULES, CONDITIONS AND STIPULATIONS THEREIN, EXCEPT AS MODIFIED BY THE PROVISIONS HEREOF. First American Title Insurance Company BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY F.A. Form 31-1 (Revised 11-15.95) ALTA Extended Owner (Improved Land) Rtsirininns. Encrnachmems &Minerals ENDORSEMENT ATTACHED To POLicv No. QR-9736089 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNER OF THE LAND REFERRED TO IN SCHEDULE A AGAINST LOSS WHICH THE INSURED SHALL SUSTAIN IN THE EVENT THAT THE OWNER OF THE EASEMENT REFERRED TO IN PARAGRAPH 6, 7, 9, 10. 16 AND 18 OF SCHEDULE B SHALL. FOR THE PURPOSE OF "EXERCISING THE RIGHT OF USE OR MAINTENANCE OF SAID EASEMENT" COMPEL THE REMOVAL OF ANY PORTION OF THE IMPROVEMENTS ON THE LAND WHICH ENCROACH UPON SAID EASEMENT. TIIIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance Company /e/ , - " BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY Cl-TA Form 103.3 (Rm 9-10-93) (MODIFIED FOR OWNER) ALTA or CLTA - Lender 0 ENDORSEMENT ATTACHED TO POLICY \O. OR-9736089 LSSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE INSURED AGAINST LOSS OR DAMAGE WHICH THE INSURED SHALL SUSTAIN BY REASON OF THE FAILURE OF THE LAND TO ABUT UPON A PHYSICALLY OPEN STREET KNOWN AS GOLDEN WEST STREET. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance Company lel 0-�— " BY JEFFREY L. MURDOCK - ASSISTANT SECRETARY CI -TA Farm 103.7 (Rev. 6-14.96) ALTA or CLTA - Owner or Lender • • ENDORSEMENT ATTACHED TO POLICY NO. OR-9736059 ISSUED BY 0 First American Title Insurance Company C THE POLICY IS AMENDED IN THE FOLLOWING PARTICULARS: AS TO ESTATE REFERRED TO IN PARAGRAPH 2(B) OF SCHEDULE A ONLY: A. PARAGRAPH I OF THE CONDITIONS AND STIPULATIONS IS AMENDED BY ADDING A SUBPARAGRAPH (H), AS FOLLOWS: (H) -LEASEHOLD ESTATE': THE RIGHT OF POSSESSION FOR THE TERM OR TERMS DESCRIBED IN SCHEDULE A HEREOF SUBJECT TO ANY PROVISIONS CONTAINED IN THE LEASE WHICH LIMIT THE RIGHT OF POSSESSION. B. PARAGRAPHS 14, 15. 16 AND 17 OF THE CONDITIONS AND STIPULATIONS ARE RENUMBERED AS PARAGRAPHS 16. 17, 18 AND 19_ C. THE CONDITIONS AND STIPULATIONS ARE AMENDED BY ADDING PARAGRAPHS 14 AND IS. AS FOLLOWS: 14. VALUATION OF ESTATE OR INTEREST INSURED IF, IN COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, IT BECOMES NECESSARY TO DETERMINE THE VALUEOF THE ESTATE OR INTEREST INSURED BY THIS POLICY. THE VALUE SHALLCONSISTOF THE THEN PRESENT WORTH OFTHE EXCESS, IF ANY, OFTHE FAIR MARKET RENTAL VALUE OF THE ESTATE OR INTEREST, UNDIMIKISHEDBY ANY MATTERS FOR WHICH CLAIM IS MADE, FOR THAT PART OF THE TERM STATED IN SCHEDULE A HEREIN THEN REMAINING PLUS ANY RENEWAL OR EXTENDED TERM FOR WHICH A VALID OPTION TO RENEW OR EXTEND IS CONTAINED IN THE LEASE. OVER THE VALUE OF THE RENT AND OTHER CONSIDERATION REQUIRED TO BE PAID UNDER THE LEASE FOR THE SAME PERIOD. 15. MISCELLANEOUS ITEMS OF LOSS IN THE EVENT THE INSURED IS EVICTED FROM POSSESSION OF ALL OR A PART OF THE LAND BY REASON OF ANY MATTERS INSURED AGAINST BY THIS POLICY, THE FOLLOWING, IF APPLICABLE. SHALL BE INCLUDED 1N COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, BUT NOT TO THE EXTENT THAT THE SAME ARE INCLUDED IN THE VALUATION OF THE ESTATE OR INTEREST INSURED BY THIS POLICY. (A) THE REASONABLE COST OF REMOVING AND RELOCATING ANY PERSONAL PROPERTY WHICH THE INSURED HAS THE RIGHT TO REMOVE AND RELOCATE, SITUATED ON THE LAND AT THE TIME OF EVICTION. THE COST OF TRANSPORTATION OF THAT PERSONAL PROPERTY FOR THE INITIAL TWENTY-FIVE MILES INCURRED IN CONNECTION WITH THE RELOCATION, AND THE REASONABLE COST OF REPAIRING THE PERSONAL PROPERTY DAMAGED BY REASON OF THE REMOVAL AND RELOCATION. THE COSTS REFERRED TO ABOVE SHALL NOT EXCEED IN THE AGGREGATE THE VALUE OF THE PERSONAL PROPERTY PRIOR TO ITS REMOVAL AND RELOCATION. 'PERSONAL PROPERTY'. ABOVE REFERRED TO, SHALL MEAN CHATTELS AND PROPERTY WHICH BECAUSE OF ITS CHARACTER AND MANNER OF AFFIXATION TO THE LAND, CAN BE SEVERED THEREFROM WITHOUT CAUSING APPRECIABLE DAMAGE TO THE PROPERTY SEVERED OR TO THE LAND TO WHICH THE PROPERTY IS AFFIXED. (B) RENT OR DAMAGES FOR USE AND OCCUPANCY OF THE LAND PRIOR TO THE EVICTION WHICH THE INSURED AS OWNER OF THE LEASEHOLD ESTATE MAY BE OBLIGATED TO PAY TO ANY PERSON HAVING PARAMOUNT TITLE TO THAT OF THE LESSOR IN THE LEASE. (C) THE AMOUNT OF RENT WHICH, BY THE TERMS OF THE LEASE, THE INSURED MUST CONTINUE TO PAY TO THE LESSOR AFTER EVICTION FOR THE LAND. OR PART THEREOF, FROM WHICH THE INSURED HAS BEEN EVICTED. i Di THE FAIR MARKET VALUE. AT THE TIME OF THE EVICTION. OF THE ESTATE OR INTEREST OF THE INSURED IN ANY SUBLEASE OF ALL OR PART OF THE LAUD EXISTING AT THE DATE OF THE EVICTION. (E) DAMAGES WHICH THE INSURED MAY BE OBLIGATED TO PAY TO ANY SUBLESSEE ON ACCOUNT OF THE BREACH OF ANY SUBLEASE OF ALL OR PART OF THE LAND CAUSED BY THE EVICTION. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBIECTTO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED. IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASETHE FACE AMOUNT THEREOF. First American Title Insurance Company /9 0-4 " BY JEFFREY L_ MURDOCK - ASSISTANT SECRETARY ALTA Leasehold Owners Policy (1987 Form and later) F.A. Fomi 16.1 (Effective 6/1187) (MODIFIED) ENDORSEMENT ATTACHED TO POLICY NO. OR-9736OH9 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNERS OF TH E HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS. 1997 SERIES A (PUBLIC FACILITIES PROJECT) REFERRED TO IN SCHEDULE A, AS THEIR INTERESTS MAY APPEAR, AGAINST LOSS OR DAMAGE SUSTAINED BY REASON OF THP FAILURE OF (1) THE SUBLEASE REFERRED TO IN PARAGRAPH 2 (B) OF SCHEDULE A HEREINAFTER REFERRED TO AS "SUBLEASE," TO BE VALID AT DATE OF POLICY AS TO THE LAND DESCRIBED THEREIN, AND (II) AT THE COMMENCEMENT OF ITS TERM TO BE BINDING AS TO THE LAND DESCRIBED THEREIN, SUBJECT TO THE FOLLOWING: (A) ANY FACTS, RIGHTS. INTERESTS OR CLAIMS WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY MAKING INQUIRY OF THE LESSOR UNDER EITHER THE LEASE REFERRED TO IN SCHEDULE A OR THE SUBLEASE; (BI ANY FAILURE TO COMPLY WITH THE TERMS AND PROVISIONS OF THE LEASE REFERRED TO IN SCHEDULE A OR THE SUBLEASE: (C) ANY ACTS OF A PARTY TO THE SUBLEASE. OR ITS SUCCESSORS IN INTEREST, BY WHICH ANY RIGHTS, INTERESTS OR OBLIGATIONS THEREUNDER ARE RELEASED OR IMPAIRED; AND (D) ANY TERMINATION OF THE SUBLEASE PURSUANTTO THE TERMS AND PROVISIONS THEREOF. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND 1S SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO- EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS. NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. • First American Title Insurance Company /e/6,— " BY JEFFREY L. MURDOC)e - ASSISTANT SECRETARY CLTA Form 119.4 (Rev. 6-14.96) CLTA - Bondholders Policy (MODIFIED) is r vl J r r rr lz 'I u ✓ rr ri -t, ,!C_ U. L V, I J .7 , I1. 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' ,,.� ORIGINAL Form No. 1402.92 10!1792; ALTA Owner's Poky J POLICY OF TITLE INSURANCE 2 ,V.i ISSUED 13Y First American Title Insurance Company SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called the Company, insures, as of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated In. Schedule A, sustained or incurred by the insured by reason of: 1. Title to the estate or interest described in Schedule A being vested other than as stated therein; 2. Any defect in or lien or encumbrance on the title; 3. Unmarketability of the title; 4. Lack of a right of access to and from the land. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured, but only to the extent provided in the Conditions and Stipulations. First American Title Insurance Company BY PRESIDEM1`T ATTEST SECRETARY EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage. costs, attorneys' tees or expenses which arise by reason of: 1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws. ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy. use, or enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of these laws, ordinances or governmental regulations. except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by (a) above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects, liens, encumbrances. adverse claims or other matters: (a) created, suffered, assumed or agreed to by the insured claimant: (b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Dale of Policy: or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer; or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer: or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. CONDITIONS AND STIPULATIONS DEFINITION OF TERMS. The following terms when used in this policy mean: (a) "insured": the insured named in Schedule A. and. subject to any rights or defenses the Company would have had against the named insured, those who succeed to the interest of the named insured by operation of law as distinguished from purchase including, but not limited to. heirs, disiributees, devisees. survivors, personal representa- tives, next of kin, or corporate or fiduciary successors. (b) "insured claimant": an insured claiming loss or damage. (c) "knowledge" or "known": actual knowledge, not constructive knowledge or notice which may be imputed to an insured by reason of the public records as defined in this policy or any other records which impart constructive notice of matters affecting the land. (d) "land": the land described or referred to in Schedule (A), and improvements affixed thereto which by law constitute real property. The term land" does not include any property beyond the lines of the area described or referred to in Schedule (A), nor any right, title, interest. estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a fight of access to and from the land is insured by this policy. (e) "mortgage": mortgage, deed of trust, trust deed, or other security instrument, (f) "public records": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without knowledge. With respect to Section 1(a)(iv) of the Exclusions From Coverage, "public records" shall also incude environmental protection liens filed in the records of the clerk of the United States district court for the district in which the land is located. (g) "unmarketability of the title": an alleged or apparent matter affecting the title to the land, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in Schedule A to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of marketable title. for any loss or damage caused thereby. (0) In the event of any litigation. including litigation by the Company or with the Company's consent. the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured. (c) The Company shall not be liaole for loss or damage to any insured for liability voluntarily assumed by the insured in settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. All payments under this policy, except payments made for costs. attorneys' fees and expenses, shall reduce the amount of the insurance pro tanto. 11. LIABILITY NONCUMULATIVE. It is expressly understood that the Amount of In- surance under this policy shall be reduced by any amount the Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a charge or lien on the estate or interest described or referred to in Schedule A. and the amount so paid shall be deemed a payment under this policy to the insured owner. 12. PAYMENT OF LOSS. (a) No payment shall be made without producing this policy for endorsement of the payment unless the policy has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of the Company. (b) When liability and the extent of loss or damage has been definitely fixed in accordance with these Conditions and Stipulations. the loss or damage shall be payable within 30 o pay orten er payment a the amount o insurance days thereafter. under this policy together with any costs, attorneys' fees and 13. SUBROGATION UPON PAYMENT 2. CONTINUATION OF INSURANCE AFTER expenses incurred by the insured claimant, which were OR SETTLEMENT. CONVEYANCE OF TITLE. authorized by the Company, up to the time of payment or tender of payment and which the Company is obligated to (a) The Company's Right of Subrogatlon. The coverage of this policy shall continue in force as pay Whenever the Company shall have settled and paid a of Date of Policy in favor of an insured only so long as tf:r{flability and obligations to the insured under this poicy. other Upon the exercise by the Company of this option, al claim under this policy, all right of subrogation shall vest in l insured retains an estate or interest in the land, or holds an the Company unaffected by any act of the insured claimant. indebtedness secured by a purchase money mortgage given than to make the payment required, shall terminate, including The Company shall be subrogated to and be entitled to all by a purchaser from the insured, or only so long as the any liability or obligation to defend, prosecute, or continue ri hts and remedies which the insured claimant would have Inv litigatinn Inrl fhr r-lirl., chill ha eur•anrlororl to tha . g by this policy which constitutes the basis of loss or damage and shall state, to the extent possible. the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the insured claimant to provide the required proof of loss or damage. the Company's obligations to the insured under the policy shall terminate, including any liability or obligation to defend. prosecute. or continue any litigation, with regard to the matter or matters requiring such proof of loss or damage. In addition, the insured claimant may reasonably be required to submit to examination under oath by any authorized representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorized representative of the Company. all records, books, ledgers. checks, correspondence and memoranda, whether bearing a date before or after Date of Policy, which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the insured claimant shall grant its permission, in writing. for any authorized rep- resentative of the Company to examine, inspect and copy all records, books, ledgers, checks. correspondence and mem- oranda in the custody or control of a third party, which reasonably pertain to the loss or damage. All information designated as confidential by the insured claimant provided to the Company pursuant to this Section shag not be disclosed to others unless, in the reasonable judgment of the Company it is necessary in the administration of the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably requested information or grant permission to secure reasonably necessary informa- tion from third parties as required in this paragraph, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim. 6. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance. T d f f $� AMERr ti 0 First American Title Insurance Company POLICY OF TITLE INSURANCE .uv al lull'a to w• uy 97 -9dd[A1 OF uUV0lhdl Rb U1 WdU dlIt]I made by the insured in any transfer or conveyance of the Company far cancellation. - nao against any person or ploperry in —respect to me claim had this policy not been issued. If requested by the Company, estate or interest. This policy shall not continue in force in (b) To Pay or Otherwise Settle With Parties Other than the insured claimant shall transfer to the Company all rights favor of any purchaser from the insured of either (i) an estate the Insured or With the Insured Claimant. and remedies -against any person or property necessary in or interest in the land, or (ii) an indebtedness secured by as (i) to pay or otherwise settle with other parties lad order to Rerfect this right of subrogation. The insured purchase money mortgage given to -the insureb. or in the name of an insured claimant any claim insured claimant shall permit the Company to sue, compromise or against under this policy, together with any costs, attorneys'. settle in the name of the insured claimant and to use the name 3. NOTICE OF CLAIM TO BE GIVEN BY fees and expenses incurred by the insured claimant which of the insured claimant in any transaction or litigation INSURED CLAIMANT. were authorized by the Company up to the time of payment involving these rights or remedies. and which the Company is obligated to pay; or If a payment on account of a claim does not fully cover The insured shall notify the Company promptly in (ii) to pay or otherwise settle with the insured the loss of the insured claimant, the Company shall be writing (i) in case of any litigation as set forth in Section 4(a) claimant the loss or damage provided for under this policy, subrogated to these rights and remedies in the proportion below, (ii) in case knowledge shall come to an insured together with any costs, attorneys' fees and expenses which the Company's payment bears to the whole amount hereunder of any claim of title or interest which is adverse to incurred by the insured claimant which were authorzed by the of the loss. the title to the estate or interest, as insured. and which might Company up to the time of payment and which the Company If loss should result from any act of the insured cause loss or damage for which the Company may be liable is obligated to pay. claimant, as stated above, that act shall not void this policy, by virtue of this policy, or (iii) if title to the estate or interest. Upon the exercise by the Company of either of the but the Company, in that event, shall be required to pay only as insured, is rejected as unmarketable. If prompt notice shall options provided for in paragraphs (b) (i) or (i), the Com- that part of any losses insured against by this policy which not be given to the Company, then as to the insured all liability pany's obligations to the insured under this policy for the shall exceed the amount, if any, lost to the Company by of the Company shall terminate with regard to the matter or claimed loss or damage, other than the payments required to reason of the impairment by the insured claimant of the matters for which prompt notice is required; provided, be made, shall terminate, including any liability or obligation t d f nit It t' I't' t' Company's right of subrogation. however, that failure to notify the Company shall In no case o e e , prosec a or can lnue any l iga ion, prejudice the rights of any insured under this policy unless the Company shall be prejudiced by the failure and then only 7. DETERMINATION, EXTENT OF LIABILITY to the extent of the prejudice. AND COINSURANCE. 4. DEFENSE AND PROSECUTION OF ACTIONS; DUTY OF INSURED CLAIMANT TO COOPERATE. (a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured, but only as to those stated causes of action alleging a defect, lien or en- cumbrance or other matter insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the insured to object for reasonabie cause) to represent the insured as to those stated causes of action and shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs or expenses incurred by the insured in the defense of those causes of action which allege matters not insured against by this policy. (b) The Company shall have the right, at its own cost, to institute and prosecute any action or proceeding or to do any other act which in its opinion may be necessary or desirable to establish the title to the estate or interest, as insured, or to prevent or reduce loss or damage to the insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights under this paragraph, it shall do so diligently. (c) Whenever the Company shall have brought an action or interposed a defense as required or permitted by the provisions of this policy; the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or order. (d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding, the insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, and all appeals therein, and permit the Company to use, at its option, the name of the insured for this purpose. Whenever requested by the Company, the insured. at the Company's expense, shall give the Company all reasonable aid (i) in any action or proceeding, securing ev,dence, obtaining witnesses. prosecuting or defending the action or proceeding. or effecting settlement, and (k) in any other lawful act which in the opinion of the Company may be necessary or desirable to establish the title to the estate of interest as insured. li the Company is prejudiced by the failure of the insured to furnish the required cooperation, the Cam panys obligations to the insured under the policy shall terminate, including any liability or obligation to defend, prosecute, -r continue any litigation, with regard to the matter or matters requiring such cooperation. PROOF OF LOSS OR DAMAGE. In addition to and after the ,,^otices required u.7der Section 3 of these Conditions and Stipulations have been provided the Company, a proof of loss or damage signed and sworn to oy the nsured claimant shall be furnished to the Company within 90 days after the insured claimant shall ascertain the facts giving rise :o the loss or carnage. The proof of loss or carnage sha,l cescribe the defect in, or lien or encumbrance on the title, or other matter insured against This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the insured claimant who has suffered lass or damage by reason of matters insured against by this policy and only to the extent herein described. (a) The liability of the Company under this policy shall not exceed the least of: (1) the Amount of Insurance stated in Schedule A; or (ii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the defect, lien or encumbrance insured against by this policy. (b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of the value of the insured estate or interest or the full consideration paid for the land, whichever is less, or if subsequent to the Date of Policy an improvement is erectea on the land which increases the value of the insured estate or interest by at least 20 percent over the Amount of Insurance stated in Schedule A. then this Policy is subject to the following: (i) where no subsequent improvement has been made. as to any partial loss, the Company shall only pay the loss pro rats in the proportion that the Amount of Insurance at Date of Policy bears to the total value of the insured estate or interest at Date of Policy; or (ii) where a subsequent improvement has been made, as to any partial loss, the Company shall only pay the loss pro rats in the proportion that 120 percent of the Amount of Insurance stated in Schedule A bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the improvement. The provisions of this paragraph shall not apply to costs. attorneys, fees and expenses for which the Company is liable under this policy, and shall only apply to that portion of any loss which exceeds, in the aggregate, 10 percent of the Amount of Insurance stated in Schedule A. (c) The Company will pay only those costs, attorneys' fees ar'd expenses incurred in accordance with Sec!ion 4 of these Conditions and Stipulations. B. APPORTIONMENT. If the land described in Schedule (A)(C) consists of two or more parcels which are not used as a single site, and a loss is established affecting one or more of the parcels but not all. the loss shall be computed and settled on a pro !ata basis as if the Amount of Insurance under this policy was divided pro rata as to the value on Date of Policy of each separate parcel !o the whole, exclusive of any improvements made sub- sequent to Date of Policy, unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the insured at the time of the issuance of tris policy and shown by an express statement or by an endorsement attached to this policy. 9. LIMITATION OF LIABILITY. (a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the rack of a right of access to or from the land. or cures the c,aim of unmarketability of title, all as insured. in a reasonably diligent manner by any method, including litigation and the comple- tion of any appeals Oerefrorn, it shall have fury performed its obligations with respect to that matter and shall not be liable (b) The Company's Rights Against non -Insured Obligors. The Company's right of subrogation against non- insured obligors shall exist and shall include, without limitation, the rights of the insured to indemnities, guaranties. other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments which provide for subrogation rights by reason of this policy. 14. ARBITRATION. Unless prohibited by applicable law, either the Com- pany or the insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is S1,000,000 or less shall be arbitrated at the option of either the Company or the insured. All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys' tees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy of the Rules may be obtained from the Company upon request. 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. (a) This policy together with all endorsements, if any, — attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpret- ing any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. (c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary. or validating officer or authorized signatory of the Company. 16. SEVERABILITY. In the event any provision of the policy is held invalid or unenforceable urder applicable law, the policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect. 17. NOTICES, WHERE SENT. All notices required to be given the Company and any statement in writing required to be furnished the Company shall include the number o+ tris policy and shall be addressed to the Company at 114 East Fifth Street, Santa Ana, California 92701. or to the office which issued this policy. ALTA OWNERS POLICY SCHEDULE A TOTAL FEE FOR TITLE, EXAMINATION AND TITLE INSURANCE S11,350.50 AMOUNT OF INSURANCE: S8,070,000.00 DATE OF POLICY: MAY 13, 1997 AT 9:47 A. M. NAME OF INSURED: OR-9736089 TITLE OFFICER - SWIERCZEWSKI CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA; FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION; AND FINANCIAL SECURITY ASSURANCE INC., A NEW YORK STOCK INSURANCE COMPANY, ITS SUCCESSORS AND ASSIGNS AS DEFINED IN PARAGRAPH 1(a) OF THE CONDITIONS AND STIPULATIONS OF THIS POLICY. THE ESTATE OR INTEREST IN THE LAND WHICH IS COVERED BY THIS POLICY IS: (A) A FEE. (B) THE LEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED BASE LEASE DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSOR AND THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSEE, FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN; AND THE SUBLEASEHOLD ESTATE CREATED BY THAT CERTAIN UNRECORDED LEASE AGREEMENT DATED MAY 1, 1997 EXECUTED BY AND BETWEEN THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY, A JOINT EXERCISE OF POWERS AGENCY DULY ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF CALIFORNIA, AS LESSOR AND THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS LESSEE FOR THE TERM, AND UPON THE TERMS COVENANTS AND CONDITIONS PROVIDED THEREIN; NOTE: THE SUBLESSOR'S INTEREST UNDER SAID SUBLEASE HAS BEEN ASSIGNED TO FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION BY AN UNRECORDED ASSIGNMENT AGREEMENT DATED MAY 1, 1997; PAGE 2 ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI ALL AS DISCLOSED BY A MEMORANDUM OF LEASE RECORDED MAY 13, 1997 AS INSTRUMENT NO. 19970221305 OF OFFICIAL RECORDS.. 3. TITLE TO THE ESTATE OR INTEREST IN THE LAND IS VESTED IN - CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (A) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY; AND CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AND FIRST TRUST OF CALIFORNIA, A NATIONAL BANKING ASSOCIATION EACH AS TO THE ESTATE OR INTEREST IN THE LAND DESCRIBED OR REFERRED TO IN PARAGRAPH 4 OF SCHEDULE A OF THIS POLICY AS SET FORTH IN ITEM (B) OF PARAGRAPH 2 OF SCHEDULE A OF THIS POLICY. 4. THE LAND REFERRED TO IN THIS POLICY 19 DESCRIBED AS FOLLOWS: (SEE EXHIBIT "A" ATTACHED HERETO.) PAGE 3 0 ALTA OWNERS POLICY SCHEDULE B EXCEPTIONS FROM COVERAGE OR-9736089 TITLE OFFICER - SWIERCZEWSKI THIS POLICY DOES NOT IWSURE AGAINSTLOSS OR DAMAGE (AND THE COMPANY WILL NOT PAY COSTS. ATTORNEYS' FEES OR EXPENSES) WHICH ARISE BY REASON OF: 1. THE RESERVATION OF THE SOUTHERLY 30 FEET OF SECTION 26, TOWNSHIP 5 SOUTH, RANGE 11 WEST FOR ROAD, RAILROADS AND DITCHES, ALSO THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT, AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED IN THE DEED RECORDED MARCH 13, 1885 IN BOOK 137, PAGE 203 OF DEEDS, RECORDS OF LOS ANGELES COUNTY. 2. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM ALFRED ROBINSON, TRUSTEE, RECORDED MARCH 25, 1885 IN BOOK 137, PAGE 303 OF DEEDS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. 3. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES, AND THE RESERVATION OF THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID TRACT; AND THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS RESERVED BY THE STEARNS RANCHOS COMPANY, A CORPORATION, IN THE DEED RECORDED JUNE 3, 1895 IN BOOK 87, PAGE 249 OF DEEDS. 4. THE RESERVATION FOR ROADS, RAILROADS AND DITCHES OF A STRIP OF LAND 30 FEET WIDE, ALONG, ADJOINING AND EACH SIDE OF THE TOWNSHIP AND SECTION LINES AND THE USE AND CONTROL OF CIENEGAS AND NATURAL STREAMS OF WATER, IF ANY, NATURALLY UPON, FLOWING ACROSS, INTO OR BY SAID DESCRIBED TRACT AND RESERVING THE RIGHT OF WAY FOR AND TO CONSTRUCT IRRIGATION OR DRAINAGE DITCHES THROUGH SAID TRACT TO IRRIGATE OR DRAIN THE ADJACENT LAND, AS CONTAINED IN THE DEED FROM THE STEARNS RANCHOS COMPANY, RECORDED JULY 19, 1905 IN BOOK 91, PAGE 135 OF DEEDS. 5. - THE CONTINGENT OBLIGATIONS AS CONTAINED IN THE DEED FROM B. T. GOTHARD AND AGNES B. GOTHARD, HIS WIFE, TO STANDARD OIL COMPANY, A CORPORATION, RECORDED MAY 26, 1921 IN BOOK 389, PAGE 240 OF DEEDS, AS FOLLOWS: "IN THE EVENT THAT WELLS ARE DRILLED AN❑ OIL PRODUCED IN PAYING QUANTITIES WITHIN TEN YEARS OF THE DATE HEREOF UPON PROPERTY ADJOINING THE LAND HEREIN DESCRIBED PAGE 4 0 ALTA OWNM POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI AND WITHIN 300 FEET OF THE BOUNDARY LINE OF THE PROPERTY HEREIN DESCRIBED THE PARTY OF THE SECOND PART SHALL, WITHIN 90 DAYS AFTER DISCOVERY OF OIL IN PAYING QUANTITIES IN SUCH WELLS, COMMENCE AND ACTUAL DRILLING OF WELL ON THE HEREIN DESCRIBED PREMISES AND PROSECUTE THE SAME WITH REASONABLE DILIGENCE UNTIL OIL IS FOUND IN QUANTITIES DEEMED PAYING QUANTITIES BY THE PARTY OF THE SECOND PART, OR TO A DEPTH AT WHICH FURTHER DRILLING, WOULD, IN'THE JUDGMENT OF THE PARTY OF THE SECOND PART, BE UNPROFITABLE. IF, HOWEVER, OIL IS NOT FOUND AND PRODUCED IN PAYING QUANTITIES FROM SUCH WELLS WITHIN 300 FEET OF THE BOUNDARIES OF THE HEREIN DESCRIBE PROPERTY, WITHIN SAID 10 YEAR PERIOD, ALL RIGHTS OF THE PARTIES OF THE FIRST PART UNDER THIS CLAUSE SHALL CEASE AND DETERMINE. "IF OIL IS FOUND IN SUCH PAYING QUANTITIES IN THE WELL SO DRILLED BY THE PARTY OF THE SECOND PART, THE PARTY OF THE SECOND PART SHALL CONTINUE TO DRILL ADDITIONAL WELLS ON SAID PREMISES AS RAPIDLY AS AT LEAST ONE STRING OF TOOLS WORKING WITH DUE DILIGENCE, CAN COMPLETE THE SAME, UNTIL FURTHER DRILLING WOULD, IN THE JUDGMENT OF THE SAID PARTY OF THE SECOND PART, BE UNPROFITABLE, OR UNTIL THERE SHALL HAVE BEEN COMPLETED ON THE PREMISES HEREIN DESCRIBED 3 WELLS." SUBJECT TO CERTAIN PROVISIONS, COVENANTS AND CONDITIONS AS THEREIN SET FORTH, TO WHICH RECORD REFERENCE IS MADE FOR FULL PARTICULARS. THE INTEREST OF B. T. GOTHARD HAS PASSED TO AND IS AT THE DATE HEREOF VESTED IN BESSIE L. GOTHARD, AS HER SEPARATE PROPERTY. THE INTEREST OF AGNES B. GOTHARD HAS PASSED TO AND WAS DISTRIBUTED TO THE FOLLOWING PERSONS BY A DECREE OF DISTRIBUTION RENDERED DECEMBER 13, 1965 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE 1N THE MATTER OF THE ESTATE OF AGNES B. GOTHARD, DECEASED, (CASE NO. A-47000), A CERTIFIED COPY OF WHICH WAS RECORDED DECEMBER 15, 1965 IN BOOK 7775, PAGE 140 OF OFFICIAL RECORDS: TO CARD KRAUCHI, ONE -SIXTH THEREOF; TO ANNE M. SPRINGER, ONE -SIXTH THEREOF; TO AZALES CUMMINGS, ONE -SIXTH THEREOF; TO MARY GOLDMAN, ONE -SIXTH THEREOF; TO CHARLES A. KRAUCHI, ONE -TWELFTH THEREOF; TO DORIS ALLERS, ONE -TWELFTH THEREOF; TO DRENNEN KRAUCHI, ONE -SIXTH THEREOF. NOTE: THE NAME OF DRENNAN KRAL:CHI WAS CHANGED TO DRENNAN ABERN BY DECREE RENDERED OCTOBER 26, 1934 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF ORANGE, CASE NO. A-4101. PAGE 5 • ALTA OWNERS POLICY QR-9736089 TITLE OFFICER - SWIERCZEW SKI 6. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED JUNE 14, 1921 IN BOOK 400, PAGE 229 OF DEEDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 7. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 13, PAGE 49 OF OFFICIAL RECORDS AND IN AN INSTRUMENT RECORDED IN BOOK 581, PAGE 489 OF OFFICIAL RECORDS, FOR: PIPE LINES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 8. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM COUNTY OF ORANGE, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, AS GRANTEE, RECORDED DECEMBER 20, 1963 IN BOOK 6854, PAGE 265 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. 9. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN. BOOK 7525, PAGE 963 OF OFFICIAL RECORDS, FOR: ROAD AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 10. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED IN BOOK 8922, PAGE 990 OF OFFICIAL RECORDS, FOR: STREET CONSTRliCTION AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 11. A JOINT USE AGREEMENT, DATED SEPTEMBER 2, 1971, EXECUTED BY STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION AND CITY OF HUNTINGTON BEACH, RECORDED NOVEMBER 29, 1971 IN BOOK 9905, PAGE 115 OF OFFICIAL RECORDS, TO WHICH RECORD REFERENCE IS MADE FOR FULL PARTICULARS. NOTE: ALL OF THE RIGHT, TITLE AND INTEREST UNDER THE EASEMENT AND RIGHT OF WAY HAVE BEEN ASSIGNED TO CHEVRON PIPE LINE COMPANY, A CORPORATION BY AN INSTRUMENT RECORDED APRIL 19, 1994 AS INSTRUMENT NO. 94-0272205 OF OFFICIAL RECORDS. 12. EASEMENTS, COVENANTS AND CONDITIONS CONTAINED IN THE DEED FROM STANDARD OIL COMPANY OF CALIFORNIA, A DELAWARE CORPORATION, AS GRANTOR, TO CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, AS GRANTEE, RECORDED FEBRUARY 1 1,.1972 IN BOOK 9998, PAGE 389 OF OFFICIAL RECORDS. REFERENCE BEING MADE TO SAID DOCUMENT FOR FULL PARTICULARS. NOTE: AN INSTRUMENT -ENTITLED "ASSIGNMENT AND QUITCLAIM DEED" RECORDED JUNE 17, 1993 AS INSTRUMENT NO. 93-0405449 OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. PAGE ALTA OWNERS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI 13. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3434, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH OF INTENTION TO CLOSE A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 1972 IN BOOK 10023, PAGE 873 OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 14. AN INSTRUMENT ENTITLED "RESOLUTION NO. 3441 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH ORDERING THE CLOSURE OF A PORTION OF TALBERT AVENUE" RECORDED MARCH 2, 1972 IN BOOK 10023, PAGE 876OF OFFICIAL RECORDS; REFERENCE BEING MADE TO THE RECORD THEREOF FOR FULL PARTICULARS. 15. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "NOTICE OF DEED RESTRICTION", EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION, RECORDED IN BOOK 10357, PAGE 959 OF OFFICIAL RECORDS. 16. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED OCTOBER 19, 1973 IN BOOK 10954, PAGE 289 OF OFFICIAL RECORDS, IN FAVOR OF: STANDARD OIL COMPANY OF CALIFORNIA, A CORPORATION, AND STANDARD GASOLINE COMPANY FOR: PIPELINES, APPURTENANCES AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 17. THE TERMS, PROVISIONS AND CONDITIONS CONTAINED IN A DOCUMENT ENTITLED "COVENANT", EXECUTED BY CITY OF HUNTINGTON BEACH, RECORDED IN BOOK 11251, PAGE 546 OF OFFICIAL RECORDS. 18. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED DECEMBER 7, 1979 IN BOOK 13425, PAGE 1904 OF OFFICIAL RECORDS, IN FAVOR OF: SOUTHERN CALIFORNIA EDISON COMPANY, A CORPORATION. FOR: UNDERGROUND ELECTRICAL SUPPLY SYSTEMS, COMMUNICATION SYSTEMS AND INCIDENTAL PURPOSES. OVER: A PORTION OF THE LAND. 19. THE EFFECT OF A MAP PURPORTING TO SHOW THE HEREIN DESCRIBED AND OTHER LAND RECORDED IN BOOK 138, PAGE 9 OF RECORD OF SURVEYS. 20. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED JUNE 17, 1996 AS INSTRUMENT NO. 19960305030 OF OFFICIAL RECORDS. 21. AN UNRECORDED LEASE DATED APRIL 18, 1996, EXECUTED BY THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION AS LESSOR, AND PACIFIC BELL MOBILE SERVICES, A CALIFORNIA CORPORATION AS LESSEE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN, AS DISCLOSED BY MEMORANDUM OF LEASE RECORDED OCTOBER 10, 1996 AS INSTRUMENT NO. 19960516765 OF OFFICIAL RECORDS. PACE 7 ALTA OV+WNEPS POLICY OR-9736089 TITLE OFFICER - SWIERCZEWSKI 22. ANY FAILURE TO COMPLY WITH THE TERMS, CONDITIONS AND PROVISIONS OF ANY LEASE OR SUBLEASE AND THE AMENDMENTS THEREOF, AS SHOWN HEREIN. 23. ANY FACTS, RIGHTS, INTEREST OR CLAIMS WHICH A CORRECT ALTA SURVEY WOULD SHOW. PAGE B ALT.A OWNERS POLICY QR-9736089 TITLE OFFICER - SWIERCZEWSKI EXHIBIT "A" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, AND IS DESCRIBED AS FOLLOWS: THAT CERTAIN PARCEL OF LAND, BEING THAT PORTION OF THE RANCHO LAS BOLSAS, SECTIONS 26 AND 35, TOWNSHIP 5 SOUTH, RANGE 11 WEST, AS SHOWN ON MAP RECORDED IN BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTERLINE INTERSECTION OF GOLDEN WEST STREET AND ELLIS AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5059" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2200569.821 FEET AND EASTING 6027477.751 FEET; THENCE NORTH 0° 16' 33" EAST, 2641.81 FEET ALONG THE CENTERLINE OF GOLDEN WEST STREET TO A POINT OF INTERSECTION WITH THE CENTERLINE OF TALBERT AVENUE, SAID CENTERLINE INTERSECTION BEING DELINEATED AS THE ORANGE COUNTY HORIZONTAL CONTROL STATION "GPS #5073" HAVING A STATE PLANE COORDINATE VALUE OF NORTHING 2203211.545 FEET AND EASTING 6027490.465 FEET AND SAID POINT BEING THE SOUTHWESTERLY CORNER OF SAID SECTION 26, THENCE SOUTH 890 43' 27" EAST, 207.74 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 2° 07' 44" WEST, 320.54 FEET; THENCE NORTH 87' 20' 19" EAST, 1122.81 FEET; THENCE NORTH 36' 13' 50" WEST, 535.78 FEET; THENCE NORTH 00 12' I5" EAST, 377.82 FEET; THENCE NORTH 83' 19, 27" WEST, 562.50 FEET; THENCE SOUTH 21 ° 08' 07" WEST, 261.18 FEET; THENCE SOUTH 140 28' 10" EAST 235.93 FEET; THENCE SOUTH 77' 48' 10" WEST, 201.57 FEET; THENCE SOUTH 2' 07' 44" WEST 92.62, FEET TO THE TRUE POINT OF BEGINNING. PAGE 9 • ALTA OWNERS POLICY AVVJ OR-9736089 TITLE OFFICER - SWIERCZEWSKI WARNING "THE MAP ATTACHED HERETO MAY OR MAY NOT BE A SURVEY OF THE LAND DEPICTID THEREON. YOU SHOULD NOT RELY UPON IT FOR ANY PURPOSE OTHER THAN ORIENTATION TO THE GENERAL LOCATION OF THE PARCEL OR PARCELS DEPICTED. FIRST AMiERICAN EXPRESSLY DISCLAIMS ANY LIABILITY FOR ALLEGED LOSS OR DAMAGE WHICH MAY RESULT FROM RELIANCE UPON THIS MAP." PAGE 10 • ENDORSEMENT ATTACHED TO POLICY NO. OR-9736089 ISSUED BY First American Title Insurance Company THE COM PANY HEREBY INSURES AGAINST LOSS WHICH THE INSURED SHALL SUSTAIN BY REASON OF ANY OF TH E FOLLOWING MATTERS: ANY INCORRECTNESS IN THE ASSURANCE WHICH THE COMPANY HEREBY GIVES: (A) THAT THERE ARE NO PRESENT VIOLATIONS ON THE LAND OF ANY ENFORCEABLE COVENANTS. CONDITIONS OR RESTRICTIONS; (B) THAT. EXCEPT AS SHOWN IN SCHEDULE B, THERE ARE NO ENCROACHMENTS OF BUILDINGS, STRUCTURES, OR IMPROVEMENTS LOCATED ON THE LAND ONTO ADJOINING LANDS, NOR ANY ENCROACHMENTS ONTO THE LAND OF BUILDINGS, STRUCTURES OR IMPROVEMENTS LOCATED ON ADJOINING LANDS. 2. UNMARKFTABILITY OF THE TITLE TO THE ESTATE OR INTEREST BY REASON OF ANY VIOLATIONS ON THE LAND, OCCURRING PRIOR TO ACQUISITION OF TITLE TO THE ESTATE OR INTEREST BY THE INSURED, OF ANY COVENANTS. CONDITIONS OR RESTRICTIONS, 3. DAMAGE TO EXISTING BUILDING IMPROVEMENTS. (A) WHICH .ARE LOCATED OR ENCROACH UPON THE PORTION OF THE LAND SUBJECT TO ANY EASEMENT SHOWN IN SCHEDULE B. WHICH DAMAGE RESULTS FROM THE EXERCISE OF THE RIGHT TO USE OR MAINTAIN THE EASEMENT FOR THE PURPOSES FOR WHICH THE SAME WAS GRANTED OR RESERVED; (B) RESULTING FROM THE EXERCISE OF ANY RIGHT TO USE THE SURFACE OF THE LAND FOR THE EXTRACTION OR DEVELOPMENT OF THE MINERALS EXCEPTED FROM THE DESCRIPTION OF THE LAND OR SHOWN AS A RESERVATION 1N SCHEDULE B. 4. ANY FINAL COURT ORDER OR JUDGMENT REQUIRING REMOVAL FROM ANY LAND ADJOINING THE LAND OF ANY ENCROACHMENT SHOWN IN SCHEDULE B. WHEREVER IN THIS ENDORSEMENT ANY OR ALL THE WORDS 'COVENANTS. CONDITIONS OR RESTRICTIONS" .APPEAR, THEY SHALL NOT BE DEEMED TO REFER TO OR INCLUDE THE TERMS, COVENANTS. CONDITIONS OR RESTRICTIONS CONTAINED IN ANY LEASE. NO COVERAGE IS PROVIDED UNDER THIS ENDORSEMENT AS TO ANY COVENANT, CONDITION, RESTRICTION OR OTHER PROVISION RELATING TO ENVIRONMENTAL PROTECTION. THE TOTAL LIABILITY OF THE COMPANY UNDER THE POLICY AND ANY ENDORSEMENTS THEREIN SHALL NOT EXCEED, IN THE AGGREGATE, THE FACE AMOUNT OF THE POLICY AND COSTS WHICH THE COMPANY IS OBLIGATED UNDER THE CONDITIONS AND STIPULATIONS THEREOF TO PAY. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO THE SCHEDULES, CONDITIONS AND STIPULATIONS THEREIN. EXCEPT AS MODIFIED BY THE PROVISIONS HEREOF. First American Title Insurance Company /,X �, " BY JEFFREY L. MURDOCK- ASSISTANT SECRETARY F.A. Fnrm 31.1 (Revised 11-15.95) ALTA Extended Owner (Improved Land) Restrictions, Encroachments & Minerals i� • ENDORSEMENT ATTACHED TO POLICY NO. OR-9736089 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNER OF THE LAND REFERRED TO IN SCHEDULE A AGAINST LOSS WHICH THE INSURED SHALL SUSTAIN IN THE EVENT THAT THE OWNER OF THE EASEMENT REFERRED TO IN PARAGRAPH 6, 7, 9. 10. 16 AND 18 OF SCHEDULE B SHALL, FOR THE PURPOSE OF "EXERCISING THE RIGHT OF USE OR MAINTENANCE OF SAID EASEMENT" COMPEL THE REMOVAL OF ANY PORTION OF THE IMPROVEMENTS ON THE LAND WHICH ENCROACH UPON SAID EASEMENT. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFTECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASE THE FACE AMOUNT THEREOF_ First American Tine Insurance Company /9 0-4 " BY JEFFFEY L. MURDOCK- ASSISTANT SECRETARY CLTA Fonn 103.3 (Rev. 9-10-93) (MODIFIED FOR OWNER) ALTA or CLTA - Lender ENDORSEMENT ATTACHED TO POLICY NO. OR-9736089 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE INSURED AGAINST LOSS OR DAMAGE WHICH THE INSUREDSHALL SUSTAIN BY REASON OF THE FAILURE OF THE LAUD TO ABUT UPON A PHYSICALLY OPEN STREET KNOWN AS GOLDEN REST STREET. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO, EXCEPT TO THE EXTENT EXPRESSLY STATED. IT NEITHER MODIFIES .ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND .ANY PRIOR ENDORSEMENTS, NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance Company 14 6 -." - 13Y ]EFFREY L. MURDOCK - ASSISTANT SECRETARY CLTA Form 103.7 ("Rev. 6-14-96) ALTA or CLTA - Owner or Lender • ENDORSEMENT 40 ATTACHED TO POLICY No. OR-9736089 ISSUED BY First American Title Insurance Company THE POLICY IS AMENDED IN THE FOLLOWING PARTICULARS: AS TO ESTATE REFERRED TO IN PARAGRAPH 2(B) OF SCHEDULE A ONLY: A. PARAGRAPH I OF THE CONDITIONS AND STIPULATIONS IS AMENDED BY ADDING A SUBPARAGRAPH (H). AS FOLLOWS: (H) "LEASEHOLD ESTATE": THE RIGHT OF POSSESSION FOR THE TERM OR TERMS DESCRIBED IN SCHEDULE A HEREOF SUBJECT TO ANY PROVISIONS CONTAINED IN THE LEASE WHICH LIMIT THE RIGHT OF POSSESSION. B. PARAGRAPHS 14, 15. 16 AND 17 OF THE CONDITIONS AND STIPULATIONS ARE RENUMBERED AS PARAGRAPHS 16. 17, 18 AND 19. THE CONDITIONS AND STIPULATIONS ARE AMENDED BY ADDING PARAGRAPHS 14 AND 15, AS FOLLOWS: 14. VALUATION OF ESTATE OR INTEREST INSURED IF, IN COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, IT BECOMES NECESSARY TO DETERMINE THE VALUE OF THE ESTATE OR INTEREST INSURED BY THIS POLICY, THE VALUE SHALL CONSIST OF THE THEN PRESENT WORTH OF THE EXCESS, IF ANY, OFTHE FAIR MARKET RENTAL VALUE OF THE ESTATE OR INTEREST, UNDIMINISHEDBY ANY MATTERS FOR WHICH CLAIM IS MADE, FOR THAT PART OFTHE TERM STATED IN SCHEDULE A HEREIN THEN REMAINING PLUS ANY RENEWAL OR EXTENDED TERM FOR WHICH A VALID OPTION TO RENEW OR EXTEND IS CONTAINED IN THE LEASE, OVER THE VALUE OF THE RENT AND OTHER CONSIDERATION REQUIRED TO BE PAID UNDER THE LEASE FOR THE SAME PERIOD. 15. MISCELLANEOUS ITEMS OF LOSS IN THE EVENT THE INSURED IS EVICTED FROM POSSESSION OF ALL OR A PART OF THE LAND BY REASON OF ANY MATTERS INSURED AGAINSTBY THIS POLICY. TH1= FOLLOWING, IF APPLICABLE, SHALL BE INCLUDED IN COMPUTING LOSS OR DAMAGE INCURRED BY THE INSURED, BUT NOT TO THE EXTENT THAT THE SAME ARE INCLUDED IN THE VALUATION OF THE ESTATE OR INTEREST INSURED BY THIS POLICY. (A) THE REASONABLE COST OF REMOVING .AND RELOCATING ANY PERSONAL PROPERTY WHICH THE INSURED HAS THE RIGHT TO REMOVE AND RELOCATE. SITUATED ON THE LAND AT THE TIME OF EVICTION, THE COST OF TRANSPORTATION OF THAT PERSONAL PROPERTY FOR THE INITIAL TWENTY-FIVE MILES INCURRED IN CONNECTION WITH THE RELOCATION, AND THE REASONABLE COST OF REPAIRING THE PERSONAL PROPERTY DAMAGED BY REASON OF THE REMOVAL ,AND RELOCATION. THE COSTS REFERRED TO ABOVE SHALL NOT EXCEEP IN THE AGGREGATE THE VALUE OF THE PERSONAL PROPERTY PRIOR TO ITS REMOVAL AND RELOCATION. "PERSONAL PROPERTY". ABOVE REFERRED TO, SHALL MEAN CHATTELS AND PROPERTY WHICH BECAUSE OF ITS CHARACTER AND MANNER OF AFFIXATION TO THE LAND, CAN BE SEVERED THEREFROM WITHOUT CAUSING APPRECIABLE DAMAGE TO THE PROPERTY SEVERED OR TO THE LAND TO WHICH THE PROPERTY IS AFFIXED. (B) RENT OR DAMAGES FOR USE AND OCCUPANCY OF THE LAND PRIOR TO THE EVICTION WHICH THE INSURED AS OWNER OF THE LEASEHOLD ESTATE MAY BE OBLIGATED TO PAY TO ANY PERSON HAVING PARAMOUNT TITLE TO THAT OF THE LESSOR IN THE LEASE- (C) THE AMOUNT OF RENT WHICH. BY THE TERMS OF THE LEASE, THE INSURED MUST CONTINUE TO PAY TO THE LESSOR AFTER EVICTION FOR THE LAND, OR PART THEREOF, FROM WHICH THE INSURED HAS BEEN EVICTED. (D) THE FAIR MARKET VALUE, AT THE TIME OF THE EVICTION. OF THE ESTATE OR INTEREST OF THE INSURED 1N ANY SUBLEASE OF ALL OR PART OF THE LAND EXISTING AT THE DATE OF THE EVICTION. (E) DAMAGES WHICH THE INSURED MAY BE OBLIGATED TO PAY TO ANY SUBLESSEE ON ACCOUNT OF THE BREACH OF ANY SUBLEASE OF ALL OR PART OF THE LAND CAUSED BY THE EVICTION. THIS ENDORSEMENT IS MADE A PART OF THE POLICY AND 1S SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED, IT NEITHER MODIFIES .ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ,ANY PRIOR ENDORSEMENTS, NOR DOES IT IKCREASETHE FACE AMOUNT THEREOF. First American Title Insurance Company /0 �— - " BY JEFFREY L. MURDOCK- ASSISTANT SECRETARY ALTA Leasehnld Owners Policy (1987 Form and later) F.A. Form 16.1 (Effective 6f1187) (MODIFIED) ENDORSEMENT ATTACHED TO POLICY \O. OR-1736OH9 ISSUED BY First American Title Insurance Company THE COMPANY HEREBY INSURES THE OWNERS OF THE HUNTINGTON BEACH PUBLIC FINANCING AUTHORITY LEASE REVENUEBONDS, 1997 SERIES A (PUBLIC FACILITIES PROJECT) REFERRED TO IN SCHEDULE A, AS THEIR INTERESTS MAY APPEAR, AGAINST LOSS OR DAMAGE SUSTAINED BY REASON OF THE FAILURE OF (1) THE SUBLEASE REFERRED TO IN PARAGRAPH 2 (B) OF SCHEDULE A HEREINAFTER REFERRED TO AS "SUBLEASE." TO BE VALID AT DATE OF POLICY .AS TO THE LAND DESCRIBED THEREIN. AND (11) AT THE COM-MLNCEMENT OF ITS TERM TO BE BINDING AS TO THE LAND DESCRIBED THEREIN, SUBJECT TO THE FOLLOWING: (A) ANY FACTS. RIGHTS. INTERESTS OR CLAIMS WHICH ARE NOT SHOWN BY THE PUBLIC RECORDS BUT WHICH COULD BE ASCERTAINED BY MAKING INQUIRY OF THE LESSOR UNDER EITHER THE LEASE REFERRED TO IN SCHEDULE A OR THE SUBLEASE; (B) ANY FAILURE TO COMPLY WITH THE TERMS AND PROVISIONS OF THE LEASE REFERRED TO IN SCHFDLJLE A OR THE SUBLEASE; (C) ANY ACTS OF A PARTY TO THE SUBLEASE. OR ITS SUCCESSORS IN INTEREST, BY WHICH ANY RIGHTS, INTERESTS OR OBLIGATIONS THEREUNDER ARE RELEASED OR IMPAIRED. AND (D) ANY TERMINATION OF THE SUBLEASE PURSUANT TO THE TERMS AND PROVISIONS THEREOF. THIS ENDORSEMENT 1S -MADE A PART OF THE POLICY AND IS SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF AND OF ANY PRIOR ENDORSEMENTS THERETO. EXCEPT TO THE EXTENT EXPRESSLY STATED. IT NEITHER -MODIFIES ANY OF THE TERMS AND PROVISIONS OF THE POLICY AND ANY PRIOR ENDORSEMENTS, NOR DOES IT EXTEND THE EFFECTIVE DATE OF THE POLICY AND ANY PRIOR ENDORSENIENTS. NOR DOES IT INCREASE THE FACE AMOUNT THEREOF. First American Title Insurance BY JEFFREY L. MURDOCK - .ASSISTANT SECRETARY CLTA Form 119.4 (Rev. 6-14-96) CLTA - BondhoIder's Police (NIODIFI1rD) Company f L./I I -) I v Pt " 'I 4-A ..I. rr_ &� -r, if- U. c- U, I ) ) , fl. I I /fr. 36 34 L — . fNFrft ir OW.10 p I -At W lerN 02 ?.a# AC 601111AR1.1 -3 nl r- -I I VCFAJV V11 W lelGH sroloot z na 141of Sr. Nool 60I.IJF# wl, 5 08 165 13 MARCH 195, PARM MAP PA RCCL MAP P(iri- 20 165-41 4� vs —IJ 01 VA IM . K4 A6 C) rR) -iw 10.77 AC cmv7p4L PA/eor 0 LD 8.9 A&I ar L A.W.97,W 16,)-31) rz 03 v-'s (A NIX' PM 139-P7 NOrr - ASSESSOR'S BLOCK ASSESSOR'S MAP PR 199-8 PARM NUMSFR.; BOOK iii PAGE 01 SHOWN IN CIRCLES coilAfry OF ORANGE ,-?),qjlj f47 Imow; Sir lil"f1tv I 13Wd v"FoWl ;,HOS535sv - 7101v Oil V 69 0 L OD ZI-104? Wd dVN 733dva 1 561 N.)dW OIL 60 Jvf 1,: 6 o) i f �) Cv} 311N3A V IVISAdy.) C J (0) Of -I 'd ff d il 9� Ln ca C-6' CI_L -I V N \ z )v�8� '! 0 N LO-111 r. I '0tivlrlD�� I Wd LZ -6SI OZ -61,1 First American Title Insurance Company THIS MAP 13 FOR INFORMATION ONLY AND IS NOT A PART OF THIS TITLE EVIDENCI CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK CLTYCLERK LETTER QF TRAM,��i, YTT,AX RE GARDITTCG ITEM ARPRQVFD BY THE CIT e COUNCILIREDEYELOPM NT AGENCY APPRQVED ITEM DATE: TO: City, State, Zip MWA?l See Attached Action Agenda Item 6 � JJiTTENTION: "J'(J/�-J, DEPARTI IENT: REGARDING: Date of Approval Enclosed For Your Records Is An Executed Copy Of The Above Referenced Item For Your Records. Connie Brockway City Clerk Attachments: Action Agenda Paae Agreement Bonds RCA Deed Other Remarks: L C. Van' a, mcrl RCA � Agreement Dep nment RC j( :1l,ceMent Name Dcpanrnent ./CA AgreementRisk ;Management Department Insurance Cope Insurance insuranc Othcr lnsurartc Q[hcr Insurance outer 0YWom up-agrntts '.ransi[r (Telephone: 714.536.5227 M 94 Council/Agency Meeting Held: 34,)a7 6 00• r o Deferred/Continued to: 0Approved ❑ Conditionally Approved ❑ Denied Drr.4 City Clerk's Siffhature 11-A Council Meeting Date: March 17, 1997 Department ID Number: CA 96-28 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL ACTION SUBMITTED TO: ONORABLE MAYOR AND CITY COUNCIL MEMBERS iD `rA'1 SUBMITTED BY: dil/Houttton, City Attorney PREPARED BY: ail Hutton, City Attorney SUBJECT: Tax Exempt Bonds to finance, acquire, construct and equip 800 MHz communication system, and a portion of the capital improvements related to Pier Plaza Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: That the City provide tax exempt bond financing for the 800 MHz communication system, and a portion of the costs of Pier Plaza Funding Source: Bond proceeds. 1. That the City Council approve and authorize the Mayor to sign a Professional Services Agreement with Musick, Peeler & Garrett to serve as bond counsel in connection with the tax exempt financing, and accept a self -insured retention of $250,000 with a certificate of insurance stating that the insurer will endeavor to provide notice of any cancellation. 2. That the City Council approve and authorize the Mayor to sign a Professional Services Agreement with Jones Hall Hill & White to serve as disclosure counsel, and accept a deductible of $250,000 with a certificate of insurance stating that the insurer will endeavor to provide notice of any cancellation. REQUEST FOR COUNCIL ACTIN MEETING DATE: March 17, 1997 DEPARTMENT ID NUMBER: CA 96-28 Analysis: The City is joining with other Orange County cities in purchasing an 800 MHz communication system at an estimated cost of $5,900,000.00. In addition, the City is proceeding with the Pier Plaza Project at a budgeted cost of $6,300,000.00. in order to pay for $4,000,000 of the 800 MHz system and $2,700,000 of the Pier Plaza Project, previous Council actions have approved the use of bond financing. Currently, the estimated amount of the bonds is $6,825,000, The City has assembled the bond financing team. Two key components of that team are bond counsel and disclosure counsel. Essentially, bond counsel represents the City in issuance of the bonds. Bond counsel is primarily responsible for preparing the financing documents, and issuing an opinion that the City has the authority to issue the bonds and that they are tax exempt. Disclosure counsel is responsible for reviewing the City's bond offering documents in order to insure full disclosure to the market. Pursuant to the City Ordinance regarding the hiring of professional services, the City initially sought proposals to serve as bond counsel from a number of law firms. From the proposals received, three finalists were selected and interviewed. All three finalists were extremely well -qualified but in the end, both the City Attorney and the Director of Administrative Services agreed that Edsell M. Eady and Maryann L. Goodkind of Musick, Peeler & Garrett were both particularly well -qualified, and in addition, their bid of $35,000.00 plus costs not to exceed $3,000 was the lowest of the three. Consequently, Staff recommends that they be hired to serve as bond counsel. It is further recommended that the City Council waive the requirement that there be no self - insured retention or deductible on Musick, Peeler's Errors and Omissions insurance policy (i.e., malpractice insurance). In this case, Musick, Peeler & Garrett obtains malpractice insurance from Attorneys' Liability Assurance Society. They have coverage of $40 million per -claim and an $80 million annual aggregate. They also are subject to a self -insured retention (SIR) of $250,000. We have reviewed the annual financial statement of Musick, Peeler & Garrett and believe that they will be well able to meet their SIR, should that be necessary. While we have agreed to maintain the confidentiality of the firm's annual statement, we can report that they have annual revenues of $35 million, that they carry zero dollars of debt and they have cash reserves currently in the amount of $1,347,000.00. Now that the City has cleared the beach property of TLC's concession interest, Staff has moved rapidly forward with bond financing, and in particular, sought proposals from law firms that could serve as disclosure counsel. Again, all finalists were well -qualified, but the City Attorney and Director of Administrative Services recommend that Andrew Hall of the firm of Jones Hall Hill & White serve as disclosure counsel. Their bid is $10,000 plus costs not to exceed $1, 500. In their case as well, Staff recommends an exception be made to the policy concerning self - insured retentions. In this case, Jones Hall obtains malpractice insurance from Lloyds of 96-028.130C -2- 03/05/97 11:10 AM REQUEST FOR COUNCIL ACAN MEETING DATE: March 17, 1997 DEPARTMENT ID NUMBER: CA 96-28 London. They have coverage of $5 million per claim and a $5 million annual aggregate. They also are subject to a deductible of $250,000. We have reviewed the annual financial statement. of Jones Hall and believe that they will be well able to meet their deductible, should that be necessary. While we have agreed to maintain the confidentiality of the firm's annual statement, we can report that they have annual revenues of between $8 to $12 million, and have a line of credit of $800,000 available to pay an deductible. Environmental Status: Not applicable. 1 Professional Services Agreement with Musick, Peeler & Garrett 2 Professional Services Agreement with Jones Hall Hill & White 96-028.DOC -3- 03/05/97 11:12 AM 'at%�����• ` CERTIFICAT�FNSURANC DATEIMM/DD/YYI THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION Herbert L. Jamison & CO. L.L.C. ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 100 Executive Drive ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. West Orange; NJ 07052 COMPANIES AFFORDING COVERAGE COMPANY A Lloyd's of London INSURED �_s.d...0 s�'r Jones Hall Hill & White "� Four Embarcadero Center V00.10 19th Floor COMPANY B COCANY San Francisco; CA 94111 geo/V yp COMPANY COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED T( THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MMIDDIYYI .POLICY EXPIRATION DATE IMMIDDIYV) LIMITS GENERAL LIABILITY GENERAL AGGREGATE 5 PRODUCTS-COMPiOPAGG $ COMMERCIAL GENERAL LIABILITY CLAIMS MADE 7 OCCUR PERSONAL & ADV INJURY $ ' EACH OCCURRENCE S OWNER'S & CONT PROT FIRE DAMAGE (Any one fire) $ MED EXP (Any ore person! S I AUTOMOBILE LIABILITY ANY AUTO COMBINED SINGLE LIMIT S BODILY INJURY )'Per parson} 5 ' ALL OWNED AUTOS SCHEDULED AUTOS BODILY INJURY I (Per accivanTI 3 HIRED AUTOS NON -OWNED AUTOS II i PROPERTY DAMAGE $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ ANY AUTO APPROVFDASTO FOriim OTHER THAN AUTO ONLY; GAI 141.j TON, 1, ���4! !�(jar�j�,� EACH ACCIDENT S AGGREGATE . 5 r aCiA py.ap me EXCESS LIABILITY UMBRELLA FORM ;"FP OTHER THAN UMBRELLA FORM �! �� ` EACH OCCURRENCE S AGGREGATE i S. is WORKERS COMPENSATION AND STATUTORY LIMITS 1. EMPLOYERS' LIABILITY • EACH ACCIDENT S THE PROPRIETOR/ INCL PARTNERS!EXECUTIVE OFFICERS ARE: EXCL DISEASE - POLICY LIMIT DISEASE -EACH EMPLOYEE $ S OTHER X' Lawyers Professional Liability LLPP053 I01/03/97 01/03/98 $5;000;000/$5;000;000 DESCRIPTION OF OPERATIONSILOCATIONSIVEHICLES!SPECIAL ITEMS CERTIFICATE HOLDER _ _ _ _ N J' _C_ANCELLATION City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE 2000 Main Street - 4th Floor EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL Huntington Beach , CA 92648 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT BU F LIE TO MAIL SUCH NOTIC HALL IMPOSE NO OBLIGATION OR LIABILITY Al TN : Scott F. Field OF AIND PON THE CoNY ITITS OR REPRESENTATIVES. AUT r E TIV MCA __ . ACORD 25-S I3193} _ -____ _ .__.�- -� -- O COR R74TION 1993� 29 188 MARKET ST, #7W- ,. SAN FRANCISCO, CA 94103 (415) 978.3600 1797 FAX (416) 978.3825 a „ „ , O INSURED . JONES, HALL, HILL & WHITE, A PROFESS O CORPORATION i FOUR EMBARCADERO CENTER, SUITE 1900 SAN FRANCISCO, CA 94111 I THIS CERTIFICATE IS ISSUE S A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPO CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EX TEN ALTER THE COVERAGE AFFORDED BY THE i POLICIES BELOW. OMPAN ES AFFORDING COVERAGE iOOMPANY --- -- ) A HARTFORD INSURANCE COMPANY - B CALIFORNIA COMPENSATION COMPANY _� C COMPANY D THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO' NOTWITHSTANDING ANY REOUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER Di PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL HAVE BEEN REDUCED BY PAID CLAIMS. MAY BE ISSUED OR MAY POLICIES. LIMITS SHOWN MAY 'O 0 TYPE OF WSURANCE - --- POLICY NUMBER POLICY EFFECTIVE DATE I POLICY EXPIRATION DATE (MMIODA'O LIMIT$ (MMIDOIVY) I GENERAL LIABILITY 'GENERALAGGREGATE i 1,000,000 COMMERCIAL GENERAL LIABILITY I 57UUN HT 9599 OCT 196 OCT 197 PRODUCTS-00MPIOP AGG i 1,00g000 !AIMS MADE OCCUR I PER SONAL 8 ADV UiIURY S 1,000,000 A OWNER'S& CONTRACTOR'SPROT. EACH OCCURRENCE 5 1,000,0DO FIRE OAMA(0E(Any Orw Fkv) I - 300.000 i MED. EXPEN E(AnY One Pmon 3 1b sod AUTOMQBILE LIABILITY ' COMBINED SINGLE LIMIT S ANY AUTO _ ALL OWNED AUTOS BODILY INJURY $CHEDULED AUTOS I (Par Pusm) S HIRED AUTO$ - BaalLr INJURY 6 NON -OWNED AUTOS I I (Per Aoc+dant) — ! ry ' PROPERTY DAMAGE 3 I GARAGE LIABILITY AUTO ONLY• FA ACCIDENT 6 OTHER THAN AUTO ONLY, l i ANYAUYO - EACH ACCIDENT . 6 --' - AGGREGATE l 6 EXCESS LIABILITY i EACH OCCURRENCE • 3 UMBRELLA FORM ? AGGREGATE 16 — FF''OTHER THAN UMBRELLA FORM i WORKER'$ COMPENSATION AND I STATUTORY LIMITS EMPLOYERS' LIABILITY W964002905 APR 1 96 APR 1 97 I EACH ACCIDENT l.UUU.UUU $ THE PROPRIETOR/ INCL DISEASE -POLICY LIMIT $ 11000,000 PARTNERSIBMCUTNE OFFICERS ARE; I " EXCL I S 1,000,000 OTHER UC.7l.rilr' 1 IVI'1 4r yrsraw a r�r�ae.�t.n r rvrv,,ryGrTII.LCbrbl-C4 W4 r, ema APPROVED AS TO FORM GAIT_ HUTTON, City Attorney By- Deputy Cit Attorne .s+•r:.,.}-n�"..r...:Fr.>k�=�Rs:?:•', .:•RAIilfxFl7'A7ka .. ..:[•:R.9:'=E::,�•..�:r.'1:TI:�:i3:;�:r:S:�tiv..�..:i1 .a1 CITY OF HUNTINGTON BEACH 2000 MAIN STREET .._ 4TH FLOOR HUNTINGTON BEACH, CA 92648 ATTN: SCOTT F. FIELD DEPUTY CITY ATTORNEY SMALL IMPOSE I ITS AS,ENTS OR WILL 30 TOTAL P.GT' Section 1 2 3 4 5 6 7 S 9 10 11 12 13 14 15 16 17 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MUSICK, PEELER AND GARRETT FOR LEGAL SERVICES Table of Contents Employment Fees Reporting . Termination Hold Harmless Independent Contractor Workers" Compensation . Insurance . Certificates of Insurance; Additional Insured Responsible Attorney Delegation Modification City Employees and Officials Immigration Nondiscrimination Notices Entire Agreement . .1 2 2 2 .2 3 3 .4 5 .5 6 .6 6 6 6 6 7 i 0 �. CITY OF HUNTINGTON BEACH 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK CITY CLERK LETTER QF TF—ANSIIITTAL REGARDING ITEM APPROVED BY 1HE -CITY-COUNCILIREDEVELOPNIENT AGENCY PPR VED ITEtII DATE: 9 See Attached Action Agenda Item "I,-- Z ATTENTION: S DEPARTIIEtiT: REGARDING: Date of Approval 7 Enclosed For Your Records Is An Executed Copy Of The Above Referenced Item For Your Records. Connie Brockway City Clerk Attachments: Action Agenda P e Agreement ✓ Bonds Insurance V RCA Deed Other Remarks: CC: Lid ✓ V Nam mrjtt RC/ Agreement Insurance / Other a c Dep. tmcnt RCA :1ucenh'llly fnsurw Other Name Department RCA Agreement 1115Urance Other Risk M mal;ement Department I11Surance Cope G:rollo++up ::gntta IransItr (Telephone: 714-536.52271 • 0 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND ]ONES HALL HILL & WHITE FOR LEGAL SERVICES Table of Contents Section 1 Employment 1 2 Fees 2 3 Reporting 2 4 Termination 2 5 Hold Harmless 2 6 Independent Contractor 2 7 Workers' Compensation 3 8 Insurance 3 9 Certificates of Insurance; Additional Insured 4 10 Responsible Attorney I Delegation 5 12 Modification 5 13 City Employees and Officials 5 14 Immigration 6 15 Nondiscrimination 6 16 Notices 6 17 Entire Agreement . 7 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND JONES HALL HILL & WHITE, ATTORNEYS AT LAW, FOR LEGAL SERVICES THIS AGREEMENT is made and entered into this 17 t h day of r e 1997, by and between the CITY OF HUNTINGTON' BEACH ("City") and JONES HALL HILL & WHITE, a professional law corporation ("Legal Counsel"). WHEREAS, City desires to employ disclosure counsel in connection with the issuance of tax exempt obligations (the "Obligation"), the proceeds of which will be used to finance, acquire, construct and equip a portion of an 800 MHz communication system, a portion of certain capital improvements relating to Pier Plaza and administrative costs related therein (the "Project"); Legal Counsel represents that it is ready, willing and able to provide the legal services to the City; NOW, THEREFORE, the parties hereto mutually agree as follows: SECTION 1. Employment. City hereby employs Legal Counsel and Legal Counsel hereby accepts such employment to serve as disclosure counsel to the City in connection with issuance of the Obligation for the Project. In serving as disclosure counsel for the issuance of the Obligation to the Project, Legal Counsel shall perform the services described in the Scope of Services attached hereto as Exhibit A. SF/s: PCD:Agree:Jonesl lal 2! 19!'97 2.' 19,97-x2 SECTION 2. . Legal Counsel's fee for serving as disclosure counsel shall be contingent upon the issuance of the Obligation. The fee shall be Ten Thousand Dollars ($10,000.00) plus recoverable expenses. Total compensation under this agreement including costs and expenses, shall not exceed Eleven Thousand Five Hundred Dollars ($11,500.00). SECTION 3. Reporting. In performing legal services under this Agreement, Legal Counsel shall work under the direction and control of the City Attorney and shall not render additional legal services other than those specified in this Agreement without the advance concurrence of the City Attorney. SECTION 4. Termination., This Agreement may be terminated by the City at any time by giving written notice to Legal Counsel with or without cause. In the event of termination, all finished and unfinished documents, pleadings, exhibits, reports, and evidence shall, at the option of the City, become its property and shall be delivered to it by Legal Counsel. SECTION 5. Hold Harmless. Legal Counsel shall defend, indemnify and hold harmless City, its officers, agents and employees, from and against any and all liability, judgments, damages, costs, losses, claims, including Workers' Compensation claims, and expenses resulting from Legal Counsel's negligence or other tortious conduct in the performance of this Agreement. SECTION 6. Independent Contractor. Legal Counsel is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Legal Counsel shall secure at its expense and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, Workers' Compensation, and payroll deductions for Legal Counsel and its 2 SF/sTMAgree:Jonesi lal 21,19/97 2! l9.'97-4 2 officers, agents and employees, and all business licenses, if any, in connection with the services to be performed hereunder. SECTION 7. Workers' Compensation. Legal Counsel shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Labor Code and all amendments thereto; and all similar state or federal acts or laws applicable; and shall indemnify, defend and hold harmless City from and against all claims, demands, payments, suits, actions, proceedings and judgments of every nature and description, including attorneys' fees and costs presented, brought or recovered against City, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by Legal Counsel under this Agreement. Legal Counsel shall obtain and furnish evidence to City of maintenance of statutory workers' compensation insurance and employers' liability in an amount of not less than $100.000 bodily injury by accident, each occurrence, $100,000 bodily injury by disease, each employee, and $250,000 bodily injury by disease, policy limit. SECTION S. Insurance. In addition to workers' compensation insurance and Legal Counsel's covenant to indemnify City, Legal Counsel shall obtain and furnish to City the following insurance policies covering their services as bond counsel: A. General Liability Insurance. A policy of general public liability insurance, including motor vehicle coverage. Said policy shall indemnify Legal Counsel, its officers, agents and employees, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Project, and shall provide 3 SR'S MAgreeJonesl-fal 11,19M 219r97-#2 coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of $1,000,000 per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than $1,000,000. Said policy shall name City, its officers, and employees as additional insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Project shall be deemed excess coverage and that Legal Counsel's insurance shall be primary. B. Professional Liability Insurance. Legal Counsel shall furnish a professional liability insurance policy covering the work performed by it hereunder. Said policy shall provide coverage for Legal Counsel's professional liability in an amount not less than $5,000,000 per claim. A claims made policy shall be acceptable. Under no circumstances shall this insurance contain a self -insured retention, or a "deductible" or any other similar form of limitation on the required coverage in excess of S250,000. 9. Cgr1ificates of lnsurgnce. Prior to commencing performance of the work hereunder, Legal Counsel shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Agreement; said certificates shall: 1. provide the name and policy number of each carrier and policy; 2. shall state that the policy is currently in force; and 3. shall promise to provide that such policies will not be canceled or modified without thirty (30) days prior written notice of City. 4 S Fls: PCD: Agree:loneslial 2/ 19/97 2/ 19/97-42 Legal Counsel shall maintain the foregoing insurance coverages in force until the work under this Agreement is fully completed and accepted by City. The requirement for carrying the foregoing insurance coverages shall not derogate from the provisions for indemnification of City by Legal Counsel under the Agreement. City or its representative shall at all times have the right to demand the original or a copy of all said policies of insurance. Legal Counsel shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 10. Responsible Attorney. Legal Counsel hereby designates Andrew Hall as the attorney primarily responsible for the services rendered hereunder. Primary responsibility for the work shall rest with Andrew Hall, and no work will be assigned to attorneys within the firm without the written consent of the City Attorney. SECTION 11. Delegation. This agreement is a personal services agreement, and the services provided hereunder shall not be performed by or delegated to any person or entity other than Legal Counsel without the express prior written approval of the City Attorney. SECTION 12. Modification. No. waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. SECTION 13. City Employees and Officials. Legal Counsel shall not employ any City official or any regular City employee in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement in violation of California Government Code Sections 1090, et seq. 5 Sf/s:PCD:Agree:JonesHal 2/ l9/ 97 2/ t 9/97-4 2 SECTION 14. Immigration. Legal Counsel shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of 8 U.S.C. § 1324a regarding employment verification. SECTION 15. Nondiscrimination. Legal Counsel agrees not to discriminate against any person or class of persons by reason of sex, age, race, color, creed, physical handicap, or national origin in employment practices and in the activities conducted pursuant to this agreement, in accordance with Government Code § 19702. SECTION 16. Notices. Any notices or special instructions required to be given in -writing under this Agreement shall be given either by personal delivery to Legal Counsel or to the City Attorney as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Services, addressed as follows: TO CITY: Gail Hutton, City Attorney City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 Telephone: (714) 536-5555 Facsimile: (714) 374-1590 6 Sr/s: PCD:Agree:Iones Hal 2/19/97 2/19/97-42 TO LEGAL COUNSEL Andrew Hall, Esq. .tones Hall Hill & White Four Embarcadero Center, Nineteenth Floor San Francisco, CA 94111-4106 (415) 391-5890 (415) 391-5784 0 0 SECTION 17. Entire Agreement. This Agreement contains the entire agreement between the parties respecting the subject matter of this Agreement and supersedes all prior understandings and agreements, whether oral or in writing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. JONES HALL HILL & WHITE, a professional law corporation By:CM6�; __.. oko r ke—s Al aAA_S (print name) Its: (circle one) Chairma reside Vice President By: AN.006to if, Np Jn. (print name) Its: (circle one) Secretary. Lief Financial Officer: Asst. Secretary -Treasurer REVIEWED AND APPROVED: Citv Administrator 7 S F/s: PC Q:Agrcc: JoncsHal 2/19/97 2/19!97--42 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ATTEST: _ n 4wz;l City Clerk 1i 97 APPROVED AS TO FORM: City Attorney INITIATED AND APPROVED: City Attorney SCOPE OF SERVICES LEGAL COUNSEL shall provide the following legal services in a timely manner: A. Consult and cooperate with the financial advisor and bond counsel and other consultants, underwriters, staff and employees in the formulation of a coordinated financial and legal financing program based on economic business decisions of the CITY; B. Render a Rule 1 OB-5 Opinion. C. Participate and assist the CITY Staff, bond counsel and financial advisor in the preparation and review of a preliminary official statement, an official statement and other disclosure documents to be used in connection with the offering and sale of the bonds. D. Provide such other and further legal counsel to the CITY regarding all aspects of the bonds normally provided by disclosure counsel on an as -needed basis. :-r FA)ITRANSMITTAL FROM; KATHERINE BERKMAN , ��, - Li f 111 3: 58 CALENDER-ROBINSON CO., INC. 786 MARKET STREET #760 SAN FRANCiSCO, CA 94'103 f �'C� `TY "' �° L:"A nH PHONE - 416-978-3809 FAX - 416-978-3825 4k CA # FB0267063 DATE: February 24, 1997 TO; Scott F. Field -- Deputy City Attorney -- 714-374-1590 SUBJECT: Jones Hall Hill & White PAGES (including cover): 2 Mr. Field.... Please find a current certificate of insurance attached. The original is in today's mail. Feel free to call me with any questions. cc: Mike Heidorn Jones Hall Hill & White eJONES HALL HILL & WHITE, A PROFESSIONAL LAW CORPORATION ATTORNEYS AT LAW CHARLES F. ADAMS FOUR EMBARCADERO CENTER STEPHEN R. CASALEGGIO s` - > ' -1% -✓ -NINETEENTH FLOOR MIGHAF_L D. GASTELLI n Ci I T ti A T T Ci s E Y SA_\` FRA_\ CAGISCO. A 04111 THOMASA.DOWN-EY HJNTI1�GT0f��f f�� BEACH (415)301-B760 ANDREWC.HALL, JR. FACSIMILE CHRISTOPHER K. LYNGH (413) 391-3764 WILLIAM H. MADISON D"rD J.OSTER KEN NETH I. JONES BRIAN D. QUINT OF COUNSEL PAULJ.THIMMIG March 3, 1997 DAVID A. WALTON R0I3ERT J. HILL (1922.1B8a) SHARON STANTON WHITE HOMEPAGM hrip://www.jhhw.com Scott F. Field Deputy City Attorney City of Huntington Beach 200 Main Street Huntington Beach, California 92648 Re: Huntington Beach Public Financing Authority Lease Revenue Bonds 1997 Series A (Public Facilities Project) Dear Mr. Field: Enclosed is the agreement executed by Mr. Adams and Mr. Hall. Please let us know if you have any further comments or questions. Thank you. Very truly yours, 4%4e&& Dorinda A. Mercado Secretary to Andrew C. Hall, Jr. :dam Enclosure 0 0 CITY OF 1- UNTINGTON BEACH 2000 AGAIN STREET OFFICE OF THE CITY CLERK CONNIE BROCKWAY CITY CLERK CALIFORNIA 92648 ITY CLERK LETTER OF TRANSMITTAL -REGARDING ITEINI APPROVED BY THE DATE: TI CITY ti ILIRED VEL PLN NT AGENCY APPR VED ITEM ATTENTION: DEPARTMENT: REGARDING: 621Z- See Attached Action Agenda Item '6 - 6 Date of Approval / /99T Enclosed For Your Records Is An Executed Copy Of The Above Referenced Item For Your Records. Connie Brockway City Clerk Attachments: Action Agenda Pale RCA Remarks: CC: Name Agreement Bonds Insurance Deed Other RCA / Agreement X Dep rncnt RC:1/ Departnlem CA Risk Nlanagement Department Insurance Copy G:Falk, wi narnits t:ansar ( Telephone: 714.536.5227 ) A_reentent A cement Insurance / Other Insurance• 01her 111Surance Other • 0 AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MUSICK, PEELER AND GARRETT, ATTORNEYS AT LAW, FOR LEGAL SERVICES THIS AGREEMENT is made and entered into this 1 7 th day of March, 1 997 by and between the CITY OF HUNTINGTON BEACH ("City") and MUSICK, PEELER & GARRETT LLP, Attorneys at Law ("Legal Counsel"). WHEREAS, City desires to employ bond counsel in connection with the issuance of tax exempt obligations (the "Obligation"), the proceeds of which will be used to finance, acquire, construct and equip a portion of an 800 MHz communication system, a portion of certain capital improvements relating to Pier Plaza and administrative costs related therein (the "Project"); Legal Counsel represents that it is ready, willing and able to provide the legal services to the City; NOW, THEREFORE, the parties hereto mutually agree as follows: SECTION 1. Employment. City hereby employs Legal Counsel and Legal Counsel hereby accepts such employment to serve as bond counsel to the City in connection with issuance of the Obligation for the Project. In serving as bond counsel for the issuance of the Obligation to the Project, Legal Counsel shall perform the services described in the Scope of Services attached hereto as Exhibit A. SF/s:PCD:Agree: Musick 11 /7/96 2/13/97-43 0 SECTION 2. Fm. Legal Counsel's fee for serving as bond counsel shall be contingent upon the issuance of the Obligaton. The fee shall be Thirty-five Thousand Dollars ($35,000.00) plus recoverable expenses. Legal Counsel shall comply with the Billing Protocols set forth in Exhibit B attached hereto and incorporated herein. Total compensation under this agreement including costs and expenses, shall not exceed Thirty-eight Thousand Dollars ($38,000.00). SECTION 3. $epQrting. In performing legal services under this Agreement, Legal Counsel shall work under the direction and control of the City Attorney and shall not render additional legal services other than those specified in this Agreement without the advance concurrence of the City Attorney. Legal Counsel shall consult with the City Attorney on the strategy and conduct of the case and shall not file any motions without prior approval of the City Attorney. SECTION 4. Termination. This Agreement may be terminated by the City at any time by giving written notice to Legal Counsel with or without cause. In the event of termination, all finished and unfinished documents, pleadings, exhibits, reports, and evidence shall, at the option of the City, become its property and shall be delivered to it by Legal Counsel. SECTION 5. Hold Harmless. Legal Counsel shall defend, indemnify and hold harmless City, its officers, agents and employees, from and against any and all liability, judgments, damages, costs, losses, claims, including Workers' Compensation claims, and expenses resulting from Legal Counsel's negligence or other tortious conduct in the performance of this Agreement, 2 S F/s:PCD:Agree:Musick 11 /7/96 Z/ 13/97-43 I] 0 SECTION 6. Independent Contractor. Legal Counsel is, and shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of City. Legal Counsel shall secure at its expense and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, Workers' Compensation, and payroll deductions for Legal Counsel and its officers, agents and employees, and all business licenses, if any, in connection with the services to be performed hereunder. SECTION 7. Workers' Compensation. Legal Counsel shall comply with all of the provisions of the Workers' Compensation Insurance and Safety Acts of the State of California, the applicable provisions of Division 4 and 5 of the California Labor Code and all amendments thereto; and all similar state or federal acts or laws applicable; and shall indemnify, defend and hold harmless City from and against all claims, demands, payments, suits, actions, proceedings and judgments of every nature and description, including attorneys' fees and costs presented, brought or recovered against City, for or on account of any liability under any of said acts which may be incurred by reason of any work to be performed by Legal Counsel under this Agreement. Legal Counsel shall obtain and furnish evidence to City of maintenance of statutory workers' compensation insurance and employers' liability in an amount of not less than $100,000 bodily injury by accident, each occurrence, $100,000 bodily injury by disease, each employee, and $250,000 bodily injury by disease, policy limit. SF/s:PCD:Agree Nusick 11 /7/96 2/13/97-43 SECTION S. Insurance. In addition to workers' compensation insurance and Legal Counsel's covenant to indemnify City, Legal Counsel shall obtain and furnish to City the following insurance policies covering their services as bond counsel: A. General Liability Insurance. A policy of general public liability insurance, including motor vehicle coverage. Said policy shall indemnify Legal Counsel, its officers, agents and employees, while acting within the scope of their duties, against any and all claims arising out of or in connection with the Project, and shall provide coverage in not less than the following amount: combined single limit bodily injury and property damage, including products/completed operations liability and blanket contractual liability, of $1,000,000 per occurrence. If coverage is provided under a form which includes a designated general aggregate limit, the aggregate limit must be no less than $1,000,000. Said policy shall name City, its officers, and employees as additional insureds, and shall specifically provide that any other insurance coverage which may be applicable to the Project shall be deemed excess coverage and that Legal Counsel's insurance shall be primary. B. Prgfgssional Liability Insurance. Legal Counsel shall furnish a professional liability insurance policy covering the work performed by it hereunder. Said policy shall provide coverage for Legal Counsel's professional liability in an amount not less than $10,000,000 per claim. A claims made policy shall be acceptable. Under no circumstances shall this insurance contain a self -insured retention, or a "deductible" or any other similar form of limitation on the required coverage in excess of $250,000. 4 SF/s:PCD:Agree:Musick 11/7/9G 2/13/97-43 • 9. Certificates of in$,ut;fluce. Prior to commencing performance of the work hereunder, Legal Counsel shall furnish to City certificates of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages as required by this Agreement; said certificates shall: provide the name and policy number of each carrier and policy; 2. shall state that the policy is currently in force; and 3. shall promise to provide that such policies will not be canceled or modified without thirty (30) days prior written notice of City. Legal Counsel shall maintain the foregoing insurance coverages in force until the work under this Agreement is fully completed and accepted by City. The requirement for carrying the foregoing insurance coverages shall not derogate from the provisions for indemnification of City by Legal Counsel under the Agreement. City or its representative shall at all times have the right to demand the original or a copy of all said policies.of insurance. Legal Counsel shall pay, in a prompt and timely manner, the premiums on all insurance hereinabove required. SECTION 10. Responsible Attorney. Legal Counsel hereby designates Edsell M. Eady and Maryann L. Goodkind as the attorneys primarily responsible for the services rendered hereunder. Primary responsibility for the work shall rest with Edsell M. Eady and Maryann L. Goodkind, and no work will be assigned to attorneys within the firm without the written consent of the City Attorney. SFlsTMAgrecAusick 1117i96 2/13/9743 SECTION 11. Delegation. This agreement is a personal services agreement, and the services provided hereunder shall not be performed by or delegated to any person or entity other than Legal Counsel without the express prior written approval of the City Attorney. SECTION 12. MQdi Callon. No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. SECTION 13. City Employees -and Officials. Legal Counsel shall not employ any City official or any regular City employee in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement in violation of California Government Code Sections 1090, et seq. SECTION 14. Immigration. Legal Counsel shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of 8 U.S.C. § 1324a regarding employment verification. .SECTION 15. Nondiscrimination. Legal Counsel agrees not to discriminate against any person or class of persons by reason of sex, age, race, color, creed, physical handicap, or national origin in employment practices and in the activities conducted pursuant to this agreement, in accordance with Government Code § 19702. SECTION 16. Notices. Any notices or special instructions required to be given in writing under this Agreement shall be given either by personal delivery to Legal Counsel or to the City Attorney as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Services, addressed as follows: 6 SF/s: MAgrec Musick 11/7/96 2/13/97-.43 9 0 TO CITY: Gail Hutton, City Attorney City of Huntington Beach 2000 Main Street, P.O. Box 190 Huntington Beach, CA 92648 TO LEGAL COUNSEL Maryann Goodkind, Esq. Musick, Peeler and Garrett One Wilshire Boulevard Los Angeles, CA 90017-3383 Telephone: (714) 536-5555 (213) 629-7600 Facsimile: (714) 374-1590 (213) 624-1376 SECTION 17. Entire Alreement. This Agreement contains the entire agreement between the parties respecting the subject matter of this Agreement and supersedes all prior understandings and agreements, whether oral or in writing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers the day, month and year first above written. MUSICK, PEELER & GARRETT LLP Attorneys at Law By: t- ED5C l_L fA, Ay, _� r�_- (print name) General Partner REVIEWED AND APPROVED: 7 s F/ s: PC D: A gre e'N us i c k l ! 17196 2/13/97-43 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor ATTEST - City Clerk 3 q 7 _f APPROVED AS TO FORM: r � � � ey INITIATED AND APPROVED: T 1 , n / / _1-. City Attorney 3' J o -S 7 Exhibit A SCOPE OF SERVICES COUNSEL shall provide the following legal services in a timely manner: A. Consult and cooperate with the financial advisor and disclosure counsel and other consultants, underwriters, staff and employees in the formulation of a coordinated financial and legal financing program based on economic business decisions of the CITY; B. Prepare all resolutions, notices and other documents required by California law for the authorization of the Bonds and for the execution and delivery of the Bonds; C. Prepare and/or render service and instruction to the CITY regarding all legal proceedings for the authorization, execution and delivery of the Bonds; certify the terms and conditions upon which the Bonds are to be executed; prepare the resolution authorizing the execution and delivery of the Bonds; prepare and/or review all other documents required for the execution and delivery of the Bonds, and supervise such delivery; prepare and/or review all other proceedings incidental or in connection with the execution and delivery of the Bonds; D. Attend all meetings of the CITY and any administrative meetings at which proceedings are to be discussed for the proper planning of the financing proceedings; E. Assist in presenting information to bond rating organizations and municipal bond insurance companies; F. Counsel the CITY regarding all disclosure issues necessary for the Bond issue; participate and assist the City's staff, disclosure counsel, financial advisor and/or underwriter in the preparation and review of an official statement and other disclosure documents to be used in connection with the offering and sale of the Bonds, including rendering a 1 0b-5 opinion to the CITY, and, at the CITY'S request, conduct a briefing of the CITY'S staff and Council as to the content and sufficiency of all disclosure material; G. Prepare and complete all validation proceedings, if necessary; H. Provide tax advice, including the preparation of a non -arbitrage certificate for federal income tax purposes; I. Prepare and provide a complete transcript of the conduct of the proceedings necessary to accompany the issuance of the Bonds; J. Upon completion of the proceedings to the satisfaction of COUNSEL, provide an unqualified legal opinion approving in all respects the validity of the Bonds, the legality of all the proceedings for the authorization, execution and delivery of the Bonds and all other transactions relating to the Bonds, and stating that the interest on the Bonds is excluded from gross income for federal tax purposes and exempt from State personal income taxation (subject to certain qualifications) which opinion shall inure to the benefit of the CITY and the purchasers of the Bonds; MWMinWWM 1MM0h/t:%DATA14M41W218 K. Provide direction and supervision to CITY staff and consultants regarding the preparation of documents for compliance with SEC Rule 15c2-12 -for the first two years following issuance of the Bonds, and provide review of the continuing disclosure documents over the remaining life of the Bonds, including advice on disclosure of post - closing material events which CITY staff, the trustee for the Bonds or other interested parties bring to the attention of COUNSEL; L. Provide such other and further legal counsel to the CITY regarding all aspects of the Bonds normally provided by bond counsel on an as needed basis. MW&km*W— 8*dUK'WATA%d1W160210 -2 ALAS r�f 7 S ATTORNEYS, LIABILITY ASSURANCE SOCIETY, INC., A RISK RETENTION GROUP 7 12 'BOAR D.01F.-DIRECTORS77. cit HU fq ��N Fc L(,P -Bogle'& GatAl-, -ACH March 4, 1997 PUS.%, i -r;PRESDEivTjA_Njdb jj r-1 F -- " a & n. .14 _i. Mr. Scott F. Field Rober91 frptpjr� Deputy City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 RE: Confirmation of Insurance for Musick, Peeler & Garrett LLP J:. .16enois C: Bro!" To Whom It May Concern: ,;fij We hereby confirm that Musick, Peeler & Garrett LLP has Primmar & P pe, Professional Liability Coverage under Policy ALA# 1037 with an annual limit of $40,000,000 per claim and $80,000,000 in the aggregate with Phi!ade'6h fit the right, under stated conditions, to purchase extended reporting rights ­!-- f frl , ff raF - i upon termination of such policy by ALAS. The self -insured retention fir under such Polidy is $250,000 each claim, up to an annual aggregate of ' Edward R. Lawrence $500,000 and $100,000 each claim thereafter. The Policy effective date Im is from April 1, 1996 to April 1, 1997. i,616 _StaPtce9(,:6h so The Policy can only be canceled if the Firm gives ALAS, Inc. M -.-.?.iJHarri i. 4 iefs 1:1 written notice 30 days prior to expiration of the Policy period -- or, if Locke n Harie" ALAS, Inc. gives the Firm 60 days notice prior to expiration of the Policy n period. Schlaf IV ii—i-SuLouis-A Such policy is subject to the terms, conditions, limitations and RObeDdi6e '&'A V exclusions stated therein. n 6n�e 10 60 a a a . ft,z , tattinius 0-.,ister J. I ATTORNEYS' LIABILITY ASSURANCE SOCIETY, INC., A RISK RETENTION GROUP lj t -' ALartaJ Donald S:,Young, BY: -7 DATE: 3/z/X nt J. use e s Member S r ice Manager CJK/dhr.- cc: �JamesB.-Berter_o; Esq. IPJ h. Musi6k','Pedler & Garrett LLP By- Deputty"uy *100161 File 311 South Wacker Drive / Suite 5700 Chicago, Illinois 60606-6622 * (312) 697-6900 1 FAX (312) 697-6901 ALAS BOARD OF DIRECTORS CHAIRMAN PeuI W. Steere Bogle & Gates Seat:'.e VICE CHAIRMAN Robert E. O'Malley Washington, D.C. P1�ESIDENT AND CEO John B. Foley Robert B. Acomb, Jr, Jone4, Walker, Waechter, Poitovent, Ca•rdre & Dendgre New Orleans Julian W. Atwater N'xon, Hargrave, Devans & Doyie RoChester John J. Bourne Snail & Wilmer Phoenix Dennis C. Brown Manger, Toss & Olson Los Angeles James E. Clemons Primmer & P:per Montpelier, Vr C. Clark Hodgson, Jr. .radley Ronon Stevens & Young Ph;:ace'DHA Donald L. Howell 7rnson & E:Kins H0Lston Edward P. Lawrence Ropes & Gray Boston Robert E. McLaughlin Steptoe & Johnson Washington. D.C. Harriet Miers Locke Purnell Rain Harrell Dallas Edwin L. Noel Armstrong. Teesdale, Sc"):aily & Davis St. Louis Robert J. Struyk Dorsey & W!, trey M.nneapolis Thomas T. Terp Tafl, Stettinius & Hollister O9C9 ^,sti Neil Williams, Jr. Alston & Bird Atlanta Donald S. Young Dykema Gossett Detroit ...,�,r ^r..--�-"'ter --�'.r._=-,�.. .:,,:.-+i �--r. s,,y,--r-'+•i^^'--.._� ATTORNEYS, LIABILITY ASSURANCE SOCIETY, INC., i,.. A RISK RETENTION GROUP ,3)1 F; C; Marcie 4, 1997 Mr. Scott F. Field Deputy City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 RE: Confirmation of Insurance for Musick, Peeler & Garrett LLP To Whom It May Concern: We hereby confirm that Musick, Peeler & Garrett LLP has Professional Liability Coverage under Policy ALA#1037 with an annual limit of $40,000,000per claim and $80,000,O00in the aggregate with the right, under stated conditions, to purchase extended reporting rights upon termination of such policy by ALAS. The self -insured retention under such Policy is $250,000 each claim, up to an annual aggregate of $500,000 and $100,000 each claim thereafter. The Policy effective date is from April 1, 1996 to April 1, 1997. The Policy can only be canceled if the Firm gives ALAS, Inc. written notice 30 days prior to expiration of the Policy period -- or, if ALAS, Inc. gives the Firm 60 days notice prior to expiration of the Policy period. Such policy is subject to the terms, conditions, limitations and exclusions stated therein. ATTORNEYS' LIABILITY ASSURANCE SOCIETY, INC., A RISK RETENTION GROUP BY: -f,1 i, / ._ DATE: 3 A1/1 7 Eyinthia'J. � use Member Ser ices Manager CJK/dhr cc: James B. Bertero, Esq. Musick, Peeler &Garrett LLPY File 311 Souti, 1'Nac'-cer rive 1 Sai;e 5700 ? Chicago, I )o:s 0606-6622 . (3' 21 697-6900 / ;AX 1,312) 697.6901