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The Waterfront Hotel, LLC - 2015-12-21
Dept ID ED 15-38 Page 1 of 3 Meeting Date 12/21/2015 f CITY OF HUNTINGTON BEACH REQUEST FOR SUCCESSOR AGENCY ACTION MEETING DATE: 12/21/2015 SUBMITTED TO: Successor Agency Chair and Board Members SUBMITTED BY: Fred A Wilson, Executive Director PREPARED BY: Ken Domer, Assistant Executive Director Kellee Fritzal, Deputy Director, Business Development SUBJECT: Approve and authorize execution of Purchase and Sale Agreements for the Hilton/Parcel C Property, 21100 Pacific Coast Highway (APN 024-252-01 and 02) and Hyatt Property, 21500 Pacific Coast Highway (APN 024-251-01) Statement of Issue Following the dissolution of redevelopment agencies in California, the Successor Agency was required to create a Long Range Property Management Plan (LRPMP) that described how Agency- owned properties would be disposed The LRPMP was approved by the Successor Agency, the Oversight Board, and the California Department of Finance (DOF) and calls for the Agency's interests in the Hilton/Parcel C and Hyatt properties to be sold At this time, the Successor Agency is asked to approve two Purchase and Sale Agreements for the Hilton/Parcel C property and the Hyatt Property Financial Impact The Successor Agency does not own the hotel or site improvements on the properties, it owns only the leased fee interest in the properties The lease fee interests are encumbered by long-term ground leases that expire in 2102 and 2114 Moreover, the DDA/Lease with Mayer Financial, L P (Mayer) provides Mayer with a "right of first refusal" on the sale of both properties Appraisals were prepared for the properties based on these factors, and the resulting agreed upon sales prices for the Hilton/Parcel C property and Hyatt Property are $5,607,950 and $7,900,000, respectively In accordance with the dissolution statute, the proceeds from the sale of the properties must be distributed to the taxing entities, the majority of which are allocated to the local school districts The City's statutorily set share of the sales proceeds is 15 6% This equates to approximately $913,000 for the sale of the Hilton/Parcel C sites, and $1,229,000 from the sale of the Hyatt site, for a total of $2,142,000 The sale of the property will also increase the property tax revenue received by the City annually Based on the City's 15 6% share of the 1% property tax revenues, the total increase is $21,400 per year This amount will increase at the statutorily set cap of 2% per year Recommended Action A) Approve the "Purchase and Sale Agreement and Escrow Instructions by and between Successor Agency to the Redevelopment Agency of the City of Huntington Beach, a public agency, and The Waterfront Hotel, LLC, a California limited liability company," and, B) Approve the "Purchase and Sale Agreement and Escrow Instructions by and between Item 23. - 1 HB -258- Dept ID ED 15-38 Page 2 of 3 Meeting Date 12/21/2015 Successor Agency to the Redevelopment Agency of the City of Huntington Beach, a public agency, and PCH Beach Resort, LLC, a California limited liability company," and, C) Authorize the Chair, Executive Director, and Clerk to sign all necessary documents to effectuate the agreements Alternative Action(s) Do not approve the Purchase and Sale Agreements and direct staff as necessary Analysis Successor Agencies were created from each former Redevelopment Agency to "wind down" all activities of the former Agency, including the sale, transfer, or purchasing the property for redevelopment/economic development activities Assembly Bill 1484 set forth these requirements and required that a LRPMP be adopted The Agency had seven (7) properties that needed to be disposed, of which the Hilton/Parcel C Property and the Hyatt Property represent two of the seven Of the remaining five, one was sold and the other four transferred to the City The LRPMP was reviewed and approved by the Successor Agency and the Oversight Board and on March 24, 2015, the Department of Finance gave final approval The approved LRPMP calls for the Successor Agency's interests in the Hilton/Parcel C and Hyatt parcels to be sold The following factors must be considered in valuing the Successor Agency's interests in the properties l 1 The Successor Agency owns fee title to the land under the Hilton/Parcel C and the Hyatt 2 Mayer Financial, LP is currently ground leasing the properties from the Successor Agency Mayer owns the hotels located on the properties, and these hotels will remain in Mayer's control until the ground leases expire in 2102 for the Hyatt and 2114 for the Hilton and Parcel C 3 Until the ground leases expire, the Successor Agency's financial interest in the properties is limited to the ground lease payment obligations defined in the executed ground leases 4 The Successor Agency cannot sell its interest in the properties at any time during the ground lease period without first offering the properties to Mayer at a price and terms established by the Successor Agency If Mayer does not accept the offer, the Successor Agency may sell its leased fee interest on the open market as long as the sales price and terms are no more favorable than the offer that was made to Mayer Based on these factors, the fair market value of the properties was appraised using the following methodology 1 The fair market value of the Successor Agency's leased fee interest is equal to the present value of the ground lease payments plus the present value of the hotels when they revert to the Successor Agency at the end of the ground-lease period (2102 and 2114) 2 PKF, an internationally recognized expert in hotel valuation, estimated the values of the Successor Agency's leased fee interest in the three properties based on recent sales of leased fee interests in hotel properties, and on projections of the present values of the anticipated ground lease payments for the three Successor Agency properties 3 Estimated Values a PKF estimated the fair market value of the Successor Agency's leased fee interest in the Hilton/Parcel C properties at $5 61 million based on the following assumptions i Construction on the Hilton addition will start by December 31, 2016, and the properties will be conveyed to Mayer at that time xB -259- Item 23. - 2 Dept ID ED 15-38 Page 3 of 3 Meeting Date 12/21/2015 II The Hilton is anticipated to achieve stabilized occupancy in 2020 At that time, the total of the base rent and participation rent are projected at approximately $452,000 iii The Successor Agency will continue to receive the scheduled ground lease payments until the properties are conveyed to Mayer This payment totaled $421,600 in 2013, and it escalates annually based on changes in the Consumer Price Index b PKF estimated the fair market value of the Successor Agency's leased fee interest in the Hyatt property at $7 9 million based on the following assumptions i In 2014, the Hyatt ground lease payment totaled $356,000 Approximately, 60% of the ground lease payment came from the participation rent formula ii To reflect the riskier nature of the participation rent payments, PKF projected the present value of the base ground lease payments at a 5 5% discount rate, and the participation rent payments at a 7% discount rate Based on the results of the PKF appraisals, and the schedule of performance requirements imposed on the development of Parcel C, the proposed Purchase and Sale Agreements include the following key terms 1 The Hilton/Parcel C Purchase and Sale Agreement includes a The sales price is $5,607,950 b The property will not be transferred until construction financing for the construction of the second hotel tower on Parcel C is secured and approved by the Successor Agency c The closing date for the sale of the leased-fee interest in the Hilton and Parcel C can be extended by the Executive Director for a reasonable period of time, past February, 2016 d The Grant Deed for the sale of the properties includes a covenant that restricts the use of the properties, to include Parcel C, for hotel use for 30 years and includes the requirement that the hotel be of a first class hotel 2 The Hyatt Purchase and Sale Agreement includes a The sale price is set at $7,900,000 b Prior to the close of escrow, the current Community Facilities District Bond (CFD) that is secured on leasehold payments from the parcel will need to be restructured This will require drafting new CFD bond documents and will be at the cost of the buyer Staff recommends that the Successor Agency approve the Purchase and Sale Agreement, and forward it to the Oversight Board and then the Department of Finance for review/approval Environmental Status Not Applicable Strategic Plan Goal Strengthen economic and financial sustainability Attachments) 1 Purchase and Sale Agreement and Escrow Instructions by and between Successor Agency to the Redevelopment Agency of the City of Huntington Beach, a public agency, and The Waterfront Hotel, LLC, a California limited liability company 2 Purchase and Sale Agreement and Escrow Instructions by and between Successor Agency to the Redevelopment Agency of the City of Huntington Beach, a public agency, and PCH Beach Resort, LLC a California limited liability company Item 23. - 3 xB -260- ATTACHMENT # 1 PURCHASE AND SALEACREFJVIBsTrANDESCROW INSTRUCIIONS by and between SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF TI-E CITY OF HUNIINGTON BEACH, a public agency, and THE WATERFRONT HOTEL,,LL:C, a California limited liability company 12-1B-15 V9 TABLE OF CONTENTS Page 1. Definitions................................. . . ......... .. . . . .. ................................ . ....... ... . . . . .4 2. Purchase and Sale of Property. ... . ...... . . . .. ... ..... . . . .... . . .. 6 3. Purchase Pnce. ...................................................6 4 Payment of Purchase Price . .. ..6 5. Physical and Environmental Condition. .. . ... ........ . . .................. . . . .. ...............6 6. Condition ofTitle and Grant Deed 7 6.1 Tale Report;Permitted Exceptions .. . ... ....................................... .. . . . . . .7 6.2 Title Insurance......... ... . . .. ... ... . ............ ... . . . . . ...... 8 7 Escrow and Conditions . .. ..............8 7.1 Opening of Escrow and Escrow Instructions................ . . 8 72 Close of Escrow. . . .. .. . ........................ .. . .. . . . . ... ... . . ....... ...9 7.3 Buyer's Conditions to Close of Escrow ... ................... . . ... . .. 10 74 Seller's Conditions to Close of Escrow.. . . .. . . . ................................ .......11 7.5 Cooperation Regarding Conditions............ ... . ... . .. . . . ............... .. . 12 7.6 Failure of Conditions to Close of Escrow.. ... . ............................... .12 8. Closing Costs. . ........... . ...... .. ........................................ ... .. . 12 9 Deliveries to Escrow Holder..... . ... .. ... . .... . . ..... 12 9.1 Deliveries by Sellee . .. .................... .. . ..... . .. .... . ... . . .. .... ... . .12 92 Deliveries by Buyer. .. .. . . . ...13 10. Disbui sements and Other Actions by Escrow Holder 13 11 Buyer's Representations and Warranties.... . . ... .. . . . .. .. . ... .13 11.1 Authority ........... . ............................... ..............................................................14 11.2 No Consents. . . ... .14 113 No Violations of Agreements . . . ... .... ... . . ..... . 14 11.4 Binding Agreement .. . ...... . ... .............. ... . .. .... ..... .......... .. .. .........14 11.5 No Violation ofL,aws............... . . . ...................... . . ...................... 14 11.6 Brokers.. .._. 14 12 Seller's Representations and Warranties... .. ... ................ .. .... . . .. ....................... ...14 12.1 Authority. . .... ..... . .. . .. ........................... . . .. ... ..... .... ....... ... 12.2 No Consents... .. . . ..... . 15 12.3 No Violations of Agreements.... ... . . ..._ _. 15 124 Binding Agreement .. ............... . . . . . ... ...............15 12.5 Broker......................................................... .... ................ ........ .. ....... 15 12-18-1 S V9 ^1^ Page 126 No Litigation. ... .... 15 12.7 Assessinents/Improvements. . ................................................... 15 12.8 Bankruptcy. . . . . . . . . . ... . . . ...... . . . ........................ . ...15 12.9 Compliance ...... . ..... . . . . ... .............. .......... ... . . . . . . .........15 1210 Foreign Person... . . . . . ......... • • •............................. . ..........15 13. General Provisions......................... ..... . . ................................... . . ..... 16 13 1 Events of Default, ............. . . 16 13.2 Legal Fees......................................... .. ................................... .16 133 Brokers and Finders ............... ............. . . . .... ... ............... 17 134 Notices... ... .... . . . ... .. . . . ..... .17 13 5 Survival. . ... . .. .. .. .. ............ .......18 136 Successors and Assigns ... . .18 . . . . . . . ........... .. 13.7 Required Actions ofBuyer and Seller. .. ...................... . 13.8 Entire Agreement........ ..................... .... . . 18 13.9 Time of Essence .. . .. . . 19 13.10 Counterparts................................ . ............................. ...... .....19 1311 Severability.. . .... .. ... ....... . ... ...... . .... .................................. ..................19 13 12 Headings.................. 19 13 13 Construction ..... . . . . .... ........ .......... . . . ............ .... .. 19 13.14 No Waiver .............. ...... ... ... . . . ...... . .... . . . .20 13 15 Relationship Between Parties . . .. . .............. ... ....20 13 16 Thud Party Beneficiaries......................... . . ..... .. .20 13.17 Estoppels.. . . . . . . . ................... ... . . ..................................20 13.18 Indemnity......... .. .. ......................... . . . . .. . .20 14 Right of Entry... . . .. . . . ................. .......... . . . ........... .. . .. .... ..... ............. .21 14.1 Grant of Right of Entry........... .......... . . ................ . 2I 14.2 Insurance . .. .. . . . . . ....... ............ . . . . ........ .. ...................21 14.3 Liens ..... ..... ... .... . . ... ... 21 14.4 Restoration........ .. . . . .......... ......... . . . . ......................... . . . . ............21 14.5 Compliance With Laws/Permits................... ... . . . .. ...................... .. ........... .22 14.6 Indemnification.................... .. .. ...22 147 Inspection... .................................... .:...:...:.. .............. . . ....... .23 14.8 Section 14 To Terminate Upon Closing of Consolidated Long-Tenn Lease............................. ............................. .. .. ........................ .... 23 EICFMHS "A-l" LBO&DESCIZE ION OF TIIEHILTON PARCEL "A-2" LEGALDESCRIMON OF PARCELC "A-3" DEPICTION OF TI IELAND "B" FORM OF BIA KUASSIGNMENT'AND BILL OF SAL)✓ "C" Tf=,REPOKI' "D" GRANTDMD 12-15-15 V9 -11- PURCHASE AND SALEAGRFEMR; T AND ESCROW INSTRUCnONS This Purchase and Sale Agreement and Escrow Instructions ("Agreement") is dated for reference purposes as of ? 7'y71 ,U , 20IS ("Effective Date"), and is being entered into by and between SUCCESSORAGENCYTO THE RMEVELOPMENFAGENCY OF THE C11Y OF HUNTINGTON BEACI-I, a public agency, coipoiate and politic (alternatively, "Seller" or "Successor Agency'), and TI-113- WATERFRONT'HUIE,,LLC, a California limited liability company (`Buyer"). Seller and Buyer arc sometimes hereinafter individually referred to as a"Party" and collectively as the "Parties " RECITALS: This Agreement is entered into with reference to the following facts A. On or about April 28, 1989,the Redevelopment Agency of the City of Huntington Beach("RDA"},as lessor, and Waterfront Construction No. 1, a California limited partnership, as lessee, entered into that certain lease (the "Hilton Parcel Lease") for the lease of that certain real property located in the City of Huntington Beach, County of Orange, State of California, consisting of approximately 3.60 acres of land area,with a street address of21100 Pacific Coast Highway, bounded by Pacific Coast Highway, Huntington Street, Pacific View Drive, and more particularly described and depicted in Exhibits "A-1" and "A-3" hereto (the "Hilton Parcel"). A memorandum of the Hilton Parcel Lease was recorded in the Official Records of the Orange County Recorder an April 28, 1989, as Instrument No. 89-225546 (the "Hilton Parcel Lease Memorandum") On or about July 3, 1997, Waterfront Construction No. 1 and Buyer entered into that certain Lease Assignment and Assumption Agreement that was recorded in the Official Records of the Orange County Recorder on July 17, 1997, as Instrument No. 97-0338159, pursuant to which Waterfront Construction No. 1 assigned to Buyer and Buyer assumed from Waterfront Construction No. 1 all of Waterfront Construction No. 1's right, title, and interest in and under the Hilton Parcel Lease(the"Hilton Parcel Lease Memorandum Assignment'). B. On or about November 5, 1998, the RDA, as lessor, and Buyer, as lessee, entered into that certain Interim Short-Term Lease (the "Interim Short-Term Lease") for the lease of that certain real property located in the City of Huntington Beach, County of Orange, State of California, also with a street address of 21100 Pacific Coast Highway, consisting of approximately 3.63 acres of land area, bounded by Pacific Coast Highway,Twin Dolphin Drive, Pacific View Drive, and the Hilton Parcel, and more particularly described and depicted in Exhibits"A-2" and "A-3"hereto ("Parcel C). A memorandum of the Interim Short-Term Lease dated March 16, 1999, was recorded in the Official Records of the Orange County Recorder on April 19, 1999, as Instrument No 19990285625 and on April 7, 2000, as Instrument No 20000179415 (collectively,the"Interim Short Terin Lease Memorandum"). On or about August 29,2006,Buyer and Mayer Financial,L.P., a California limited partnership ("M17), entered into that certain Assignment of Lease that was recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No 2006000582100, pursuant to which Buyer assigned to MF and MF assumed from Buyer all of Buyer's right, title, and interest in and 12-18-15 V9 -l- under the Interim Short-Term Lease (the "Interim Short-Term Lease Memorandum Assignment"). C. The Hilton Parcel and Parcel C are hereinafter collectively referred to as the "band." The Hilton Parcel Lease provides for the development and operation of a hotel and related improvements (collectively, the "Existing Hotel' on the Hilton Parcel. Buyer intends to develop an expansion to the Existing Hotel on the Land(the"Hotel Addition,"together with the Existing Hotel the 'Txpanded Hotel"). The Hotel Addition shall mean the addition of approximately one hundred fifty-two (152) net guestrooms, including a minimum of one hundred twenty-five(125)suites,to the Existing Hotel on the Land, plus an additional ballroom, meeting rooms, restaurant, and ancillary facilities, as approved by City prior to the Effective Date per Conditional Use Permit No. 09-037 or such other improvements as may be approved by City D. The RDA was a redevelopment agency in the City of Huntington Beach ("City"), duly created pursuant to the California Conununity Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code (the "Redevelopment Law") E. Assembly Bill No. XI 26 (2011-2012 1" Ex Sess.) ("AB 26") was signed by the Governor of CaEifoinia on Tune 28, 2011, making certain changes to the Redevelopment Law and to the California Health and Safety Code ("H&S Code"), including adding Part 1.8 (commencing with Section 34161) ("Part 1 8") and Part 1 85 (commencing with Section 34170) ("Part 1.85") to Division 24 of the H&S Code F Pursuant to AB 26, as modified by the California Supreme Courts on December 29, 2011, by its decision in California Redevelopment Association v Matosantos (2011) 53 Cal 231, all California redevelopment agencies, including the RDA, were dissolved on February 1, 2012, and successor agencies were designated and vested with the responsibility of paying, performing, and enforcing the enforceable obligations of the former redevelopment agencies and expeditiously winding down the business and fiscal affairs of the former redevelopment agencies G. The City Council of the City elected for the City to serve as the successor agency to the RDA upon the dissolution of the RDA under AB 26("Successor Agency"). H On June 27, 2012, the Legislature passed and the Governor signed Assembly Bill No 1484 ("AB 1484", Chapter 26, Statutes 2012). AB 1484 imposes additional statutory provisions relating to the activities and obligations of successor agencies and to the wind down process of former redevelopment agencies, including the preparation of a Long Range Propeity Management Plan (`IRPMP'). AB 26 and AB 1484, as further amended, are collectively referred to herein as the "Dissolution Act." I H&S Code Section 34179 of the Dissolution Act establishes a seven (7) member local entity with respect to each successor agency and such entity is titicd the "oversight board." The oversight board has been established for the Successor Agency ("Oversight Board") 12-18-IS v9 -2- J. Pursuant to H&S Code Section 34191.5(b) and (c) of the Dissolution Act, within six (6) months after the California Department of Finance ("DOF) issues a Finding of Completion to the Successor Agency, the Successor Agency is obligated to prepare a LRPMP that addresses the disposition and use of certain real properties of the former RDA, which LRPMP is subject to the review and approval of the Oversight Board and DOF. Pursuant to H&.S Code Section 34191.3 of the Dissolution Act, once a LRPMP is approved by DOF the LRPMP shall govern and supersede all other provisions of the Dissolution Act relating to the disposition and use of the properties addressed therein. K On May 13, 2014,DOF issued its Finding of Completion to the Successor Agency. L. Pursuant to the Dissolution Act,the Successor Agency then prepared a proposed IRPMP which included 13 parcels comprising 7 properties, including the Ia.nd that is the subject of this Agreement(as Parcel Nos 6 and 7)(the"Original Proposed LRPMP") M On November 3, 2014, the Successor Agency approved the Original Proposed LRPMP. N. On November 5, 2014, the Oversight Board adopted its Resolution No. 2014-06 approving the Initial Proposed LRPMP and the Successor Agency thereafter submitted the Original Proposed LRPMP to DOF O Subsequently, the Successor Agency received correspondence from DOF requesting that modifications be made to the Original Proposed LRPMP and the Successor Agency prepared an amended LRPMP to address the issueslconcerns set forth in DOF's request ("Amended LRPMP"). P. As noted in the Amended LRPMP, the Successor Agency estimated the cuzient value of the Successor Agency's leased fee interest in the Land at $5,607,950, based on an appraisal prepai ed by "the highly respected consulting firm of PKF Consulting USA." The Amended LRPMP also noted that the existing Hilton Parcel Lease does not expire until 2088,the lessee(Buyer)has the right to extend the term of the Hilton Parcel Lease and the Interim Short- Term Lease for a new 99-year team if certain conditions are satisfied by January 1, 2016, and the lessee (Buyer)has a right of first refusal if the Successor Agency should sell the Land prior to the end of the (extended)Lease term The Amended LRPMP noted that the Successor Agency was "currently in negotiations with [Buyer] with the goal of selling the fee interest in Parcels 6 and 7"to Buyer,it identified 4 alternative"disposition alternatives"for Parcels 6 and 7,it noted that the alternative of selling Parcels 6 and 7 to Buyer (Alternative 1) "wll generate the highest proceeds of the 4 alternatives," and it stated the Successor Agency's intention to reach agreement with Buyer on the sale transaction terms and sell Parcels 6 and 7 to Buyer sometime on or before January 1,2016, Q. On March 5, 2015, the Oversight Board adopted its Resolution No. 2015-05 approving the Amended LRPMP and the Successor Agency thereafter submitted the Amended I RPMP to DOF. R On March 23, 2015, DOF approved the Amended LRPMP(including with respect to the Land),DOF confirmed that, pursuant to H&,S Code Section 341913 of the Dissolution Act, 12-ls-is v9 -3- the approved Amended LRPMP "shall govern, and supersede all other provisions [of the Dissolution Act] relating to, the disposition and use of all the real property assets of the former redevelopment agency," and noted that any Successor Agency actions taken pursuant to the Amended LRPMP which require the Successor Agency to enter into a "new agreement" are subject to Oversight Board approval per H&S Code Section 34181(f), which Oversight Board approval trust then be submitted to DOF for review and approval. S. Subject to the necessity of submitting this Agreement to the Oversight Board and DOF,Sellei desires to implement the approved Amended LRPIVIP by selling the Land and other appurtenant rights relating to the Laud(collectively, the"Property") to Buyer and Buyei desires to purchase the Property from Seller, all on the terms and conditions set forth in this Agreement. COVENANTS Bascd upon the foregoing Recitals, which are incorporated into this Agreement by this reference, and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both Parties,Seiler and Buyer agree as follows; 1 Definitions. In addition to the terms defined elsewhere in this Agreement, as used in this Agreement the terms set forth below shall have the following meanings. "Agreement"has the meaning set forth in the first paragraph of this Agreement. "Authorities" means the various governmental and quasi-governmental bodies and agencies having jurisdiction over the Property, including, without limitation, the City, the County, the State, and federal agencies, courts, special taxing districts, administrative tribunals, and public and private utilities. "BIanket Assignment and Bill of Sale"means the written blanket assignment from Seller to Buyer in the form attached het a to as Exhibit B `Buyer"has the meaning set forth in the first paragraph of this Agreement. "Buyer's Closing Conditions" ai a those conditions to Buyer's obligation to close the Escrow that are set forth in Section 7.3 of this Agreement. "Buyer's Title Policy" means the policy of title insurance described in Section 6 of this Agreement. "City"means the City of Huntington Beach,California. "Closing" or "Close of Escrow" means the conveyance by Seller to Buyer of title of the Property. Conveyance of the Property shall occur through the Escrow upon recordation of the Grant Deed. "Closing Conditions" mean, collectively, the Buyer's Closing Conditions and the Seller's Closing Conditions. 12-19-IS V9 -4- "Closing Date"has the meaning set forth in Section 7.2 of this Agreement. "Default"means each of the events so designated in Section 13 1 of this Agreement "Effective Date" has the meaning set forth in the introductory paragraph of this Agreement. "Escrow"means the above described Escrow to be opened with Escrow Holder or,in the event Escrow holder ceases to exist or fails or refuses to act as Escrow Holder for the transactions contemplated by this Agreement, any other escrow with an Escrow Holder selected by Buyer which is not affiliated with either patty "Escrow Date" is the date Escrow is opened in accordance with Section 7 1 of this Agreement. "Escrow Holder" means fidelity National Title Insurance Company in an office located in Orange County,California. "Existing DDA"has the meaning ascribed to that teim in Section 7.2 of this Agreement. "Grant Deed" means the deed by which Seller is to convey the Property to Buyer The form of the Grant Deed to be used ul this transaction is attached hereto as Exhibit D,subject to any modifications that may be mutually approved by Seller,Buyer, and Title Company "Hazardous Material" means any substance, material, or waste which is or becomes regulated by the United States government, the State of California, or any local or other governmental authority, including, without limitation, any material, substance, or waste which is(i)defined as a"hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or"extremely hazardous waste" under Sections 25115, 25117 or 25122 7, of listed pursuant to Section 25140 of the California Health and Safety Code, (ii)defined as a"hazardous substance" under Section 25316 of the California Health and Safety Code, (lit) defined as a "hazardous material," "hazardous substance," or"hazardous waste" under Section 25501 of the California Health and Safety Code; (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, (v)petroleum; (vi)asbestos; (vii) a polychlorinated biphenyl; (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (N) designated as a "hazardous substance"pursuant to Section 311 of the Clean Water Act(33 U.S C.Section 1317), (x)defined as a"hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act (42 U S.0 Section 6903); ( xi) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response,Compensation and Liability Act(42 U.S.C,Section 9601), or (xii) any other substance, whether in the form of a solid, liquid, gas, or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, treatment or disposal, or is defined as "hazardous" or is harmful to the environment or capable of posing a risk of injury to public health and safety 12-18-15 V9 -5- "Hazardous Material Law" means any federal, state, or local law, ordinance, or regulation, any order, demand, or guidance document of any governmental agency or any licenses or permits relating to Hazardous Material "land" has the meaning ascribed to that term in Recital A and Exhibits "A 1" and "A-2" hereto `saws" means all federal, state, and local laws, rules, regulations, ordinances, and codes. The term "Laws"includes Hazardous Material Laws "Lender"has the meaning set forth in Section 13.17 of this Agreement. "Permitted Exceptions"has the meaning set forth in Section 6.1 of this Agreement. "Person" means any natural person or entity, whether an individual, trustee, corporation, partnership, joint stock company, trust, unincorporated association, bank, business association,firm or otherwise "Property" means the Land and all of Seller's right, title and interest in and to all entitlements,easements,rights, mineral rights,oil and gas rights, water,water rights, air rights, development rights and privileges appurtenant thereto and all improvements located thereon, and, in addition, the rights of the declarant under any declaration of covenants, conditions and restrictions recorded against title to the Land, if any, and all items of personal property that may be situated on, in, or under the Land, excluding, however, any recorded dedications existing as of the Effective Date "Purchase Price" means the purchase price for the Property set forth to Section 3 of this Agreement "Seller"has the meaning set forth in the first paragraph of this Agreement. "Seller's Closing Conditions" are those conditions to Seller's obligation to close the Escrow that are set forth in Section 7 4 of thisAgreement. 'Title Company"means Fidelity National Title Insurance Company in its Newport Beach office or another office located in Orange County,California 'Title Report" means that certain Preliminary Report issued by the Title Company with respect to the Property dated as of September 15,2015{Order No. 997-23057599-Crl}. A true and correct copy of the Title Report is attached hereto as Exhibit C 2. Purchase and Sale of Property. Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller, to each case upon the terms and subject to the conditions set forth in this Agreement. 3. Purchase Price Buyer's purchase price for the Property shall be the sum of Five Million Six Hundred Seven Thousand Nine Hundred Fifty Dollars($5,607,950)(the"Purchase Price"), 12-19-IS V9 -6- 4 Pa ment of Purchase Price Buyer shall pay the entire Purchase Price through the Escrow by wire transfer of immediately available funds 5. Physical and Environmental Condition. Buyer acknowledges that it has been the ground lessee in possession of the Land since April 28, 1989, that it excavated, filled, and graded the Land and constructed the improvements currently situated thereon, that it remcdiated the Land in conjunction with its development, that it has continuously owned, operated, and maintained the improvements now situated on the Land for over 25 years, that prior to the commencement date of the Hilton Parcel Lease and the Interim Short-Term Cease an affiliated entity of Buyer leased and occupied the Land for many years, that Buyer is thoroughly familiar with the physical and environmental condition of the Land, and that Buyer is not relying upon any information or knowledge of Seller with respect to any of such matters. Accordingly,to the maximum extent permitted by law, ScRer shall convey the Property to Buyer in a strictly"AS IS, WHERE IS, W1711-1 ALL FAULTS' physical and environmental condition, with no warranty or representation by Seller, express or implied, regarding the presence of uncompacted fill, the condition of the soils, the geology, seismology, hydrology, or other similar matters on, under, or affecting the Land, the condition of any buildings of improvements located thereon, the presence or absence of any Hazardous Materials, or the Property's compliance with any applicable hazardous Material Law It shall be the sole responsibility of Buyer, at Buyer's expense, to investigate and determine the soil conditions of the Property and the suitability of the Property for the development to be constructed by Buyer. If the soil conditions of the Property, or any part thereof, are not in all respects entirely suitable for the use or uses to which the Property will be put, then it is the sole responsibility and obligation of Buyer to take such action as may be necessary to place the Property and the soil conditions thereof in all respects in a condition entirely suitable for the development of the Property, which may include demolition, clearing, or moving buildings, structures, or other improvements, and removal of Hazardous Materials Buyer hereby further waives, releases, acquits, and forever discharges Seller, the City,their respective officers,employees, and agents,and their successors and assigns with respect to any such matters The foregoing shall not be deemed to limit Buyer's obligations set forth in the Hilton Parcel Lease or the Interim Shoi t-Term Lease (or the Consolidated Long-Tenn Lease if in effect) prior to the Closing The provisions of this Section 5 shall survive the Closing. Buyer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows. "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." As such relates to the matters addressed in this Section 5, Buyer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 6. Condition of Title and Grant Deed 12-19-15 V9 -7- 61 Title Report; Permitted Exceptions. Within ten (10)days after the Effective Date, Buyer shall review the Title Report and notify Seller and the Title Company in writing of those exceptions to title identified therein that are disapproved by Buyer, which disapproved exceptions shall include but not be limited to the following(collectively, the"Disapproved Title Exceptions"): (i) the Hilton Parcel Lease Memorandum (Exception #3) and Hilton Parcel Lease Memorandum Assignment identified in Recital A of this Agreement, (ii)the Estoppel Agreement Regarding Ground Lease dated as of July 27, 2006, and recorded in the Official Records of the Orange County Recorder on July 27, 2006, as Instrument No. 2006000503301 (Exception #14), (iii) the Interim Short-Term Lease Memorandum and Interim Short-Term Lease Memorandum Assignments identified in Recital B of this Agreement (Exception #11, 12), (iv) the Reciprocal Fire and Access Easement Agreement dated as of August 30, 1995, and recorded in the Official Records of the Orange County Recorder on September 1, 1995, as Document No 95-0384750, as subsequently assigned by Waterfront Construction No l to Buyer pursuant to an Assignment and Assumption of Easements dated July 30, 1997, and recorded in the Official Records of the Orange County Recorder on August 1, 1997, as Instrument No 19970367563 and as subsequently reaffirmed pursuant to the Easement Agreement (Reaffirmation)dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30,2006, as Instrument No. 2006000582101 (Exception #6); (v) the Waterfront Parking Easement Agreement dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No. 2006000582103 (Exception #16), and (vi) the Parcel C Parking Easement Agreement dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No. 2006000582104 (Exception #17) The following exceptions to title are hereby approved by Buyer(collectively,the "Permitted Exceptions': (i)non-delinquent property taxes, possessory interest taxes, and assessments (to be paid by Buyer at the Closing in accordance with this Agreement), (ii) any pre-printed standard exceptions and exclusions in the Title Company's Title Report; (iii) matters affecting the condition of title to the Property created by or with the written consent of Buyer; and (iv) the exceptions to title identified in the Title Report that are not among the Disapproved Exceptions listed by Buyer in accordance with the preceding sentence. The Title Policy to be issued at the Closing shall be issued by Title Company subject only to the Permitted Exceptions 6.2 Title Insurance. At the Closing, Title Company shall issue to Buyer a standard form C[ 1'A Owner's Policy of Title Insurance with liability equal to the Purchase Price, showing fee simple title to the Property vested in Buyer subject only to the Permitted Exceptions (the "Buyer's Title Policy's Buyer may elect by delivery of written notice to the Title Company to obtain additional coverage, to upgrade to an ALTA Extended Coverage Owner's Policy of Title Insurance, and/or to obtain non-standard endorsements to the Buyer's Title Policy, provided Buyer's inability to obtain such additional or extended coverage and/or non-standard endorsements or its delay in obtaining the same shall not constitute a failure of the Closing Condition set forth in Section 7.3(d) of this Agreement or a justification or excuse for delaying the Closing. Seller shall be responsible for paying one hundred percent (100%) of the cost of Buyer's Title Policy; provided that Buyer shall be responsible to pay one hundred percent (100%)of the marginal additional cost, if any, to obtain such additional or extended coverage (including without limitation any survey that may be conducted) and/or non-standard endorsements requested by Buyer, 12-18-15 v9 -8- 7. Escrow and Conditions. 7.1 Opening of Escrow and Escrow Instructions. Buyer and Seller promptly shall cause Escrow to be opened for the consummation of the transaction contemplated by this Agreement by delivering a fully executed copy of this Agreement to the Escrow holder. This Agreement shall constitute instructions to the Escrow Holder with respect to such transaction. The Escrow Holder immediately shall notify Buyer and Seller of the Escrow Date Buyer and Seller shall execute such additional escrow instructions as reasonably may be required to consummate the transaction contemplated by this Agreement and as Buyer and Seller may approve, which approval shall not be unreasonably withheld. To the extent such additional escrow instructions conflict with any provisions of thus Agreement, the provisions of this Agreement shall control unless the Parties each separately initial such change. 7.2 Close of Escrow Subject to the next two paragraphs below and subject to satisfaction (or waiver by the benefited Party or Parties) or all of the conditions to closing set forth in Sections 7 3 and 7 4, the Close of Escrow for conveyance of the Property shall occur on or before February 29, 2016 (the "Closing Date"). In this regard, prior to the Effective Date Buyer has advised Seller that Buyer desires to coordinate the Closing hereunder with the closing of a construction loan for a major expansion of the existing hotel located on the Property (the "Construction Loan") and, at Buyer's request, Seller agrees to cooperate with Buyer to provide for a concurrent closing of this transaction with the closing of the Construction Loan; provided, however, that in no event shall any delay or failure by Buyer to cause the Construction Loan to close constitute the failure of a condition to Buyer's obligation to close this transaction or delay the Closing Date hereunder In the event the condition set forth in Sections 7.3(a)and 7.4(a) below has not been satisfied in time for the Close of Escrow to occur on or before February 29, 2016, this Agreement shall remain in full force and effect and the outside Closing Date provided for in the preceding paragraph shall be extended from February 29, 2016, to the date that is two (2) weeks after the Parties receive notice that the condition set forth in Sections 7 3(a) and 7 4(a) has been satisfied or May 1, 2016, whichever date is earlier, provided that the City Manager/Executive Director of Seller shall have the authority on behalf of Seller to further extend the May 1,2016, deadline for a reasonable additional period or periods of time if he/she determines there is a reasonable likelihood that the condition set forth in Sections 7 3(a) and 7.4(a)will be satisfied within such additional time period(s). Notwithstanding the foregoing, nothing set forth in this Agreement is intended or shall be interpreted to prohibit or prevent Buyer from proceeding under Article 200 of the Amended and Restated Disposition and Development Agreement dated as of September 14, I998, as previously amended by the First Implementation Agreement dated as of May 15, 2000, the Second Implementation Agreement dated as of February 5, 2001, the Third Implementation Agreement dated as of October 20, 2008, the Fourth Implementation Agreement dated as of October 18, 2010, and the Fifth Implementation Agreement dated as of May 16, 2011 (collectively, the "Existing DDX , to satisfy the conditions to closing for conveyance to Buyer of a long-term consolidated leasehold interest in the Hilton Parcel and Parcel C and execution and delivery of such long-term lease in the form set forth as Exhibit No. 1 to the Fifth Implementation Agreement(herein,the"Consolidated Long-Term Lease"). 12-18-15 V9 -9- Nothing herein is intended to or shall be interpreted to modify or to change in any way any provision of the Existing DDA, including, without limitation, Section 203.3 of the Existing DDA and the outside date by which all conditions precedent for conveyance of the leasehold interest in Parcel C must be satisfied (which is December 31, 2016, as of the date of this Agreement) 7.3 Buyer's Conditions to Close of Escrow. Notwithstanding any other provision set forth in this Agreement to the contrary, Buyer's obligation to close the Escrow under this Agreement is subject to the satisfaction of each of the following conditions or Buyer's express written waiver(in its sole and absolute discretion) of any unsatisfied condition(s),in either case not later than the Closing Date: (a) Oversight Board and DOF Approval. The Oversight Board shall have adopted a resolution at a properly noticed and agendized public meeting approving Seller's sale of the Property to Buyer pursuant to this Agreement, a copy of the Oversight Board's resolution shall have been delivered electronically to DOF in accordance with H&S Code Section 34179(h), and DOF shall either have formally approved the transaction contemplated by this Agreement or the time shall have elapsed for DOF to request a review of the transaction contemplated by this Agreement as provided in H&S Code Section 34179(h) without DOF having requested such a review. Seller shall exercise commercially >easonable diligence to cause the Oversight Board meeting at which such matters will be considered to be properly noticed, agendized, and held as soon as practicable after the Effective Date and, assuming the Oversight Board adopts a resolution approving this Agreement, Seller shall deliver a copy of such resolution electronically to DOF in accordance with H&S Code Section 34179(h) within two (2) business days thereafter. When DOF approves the transaction contemplated by this Agreement (either after review or by lapse of the time within which to request review, whichever first occurs), Sellez shall promptly notify Buyer and the Escrow Holder and the date upon which Seiler so notifies Buyer and the Escrow Holder shall be deemed the date on which the condition set forth in this Section 7 3(a)has been satisfied (b) Seller's Representations Seller's representations and warranties set forth in Section 12 shall be true and correct as of the Closing. (c) Seller's Deliveries and Default Seller shall have delivered to Buyer and Escrow Holder all documents required to be delivered by Seller to Buyer and Escrow Holder, respectively, pursuant to the terms of this Agreement, Seller shall not be in Default under the terms of this Agreement, and no event shall have occurred which would constitute a Default by Seller under the terms of this Agreement but for the requirement that notice be given or time elapse or both (d) Title. At the Closing the Title Company shall be committed to issuing to Buyer a standard form CLTA Owner's Policy of Title lnsuiance with coverage in the amount of the Purchase Price and subject to only the Permitted Exceptions. (e) Assigmnent On or before the Closing, Seller shall have executed the Blanket Assigiunent and Bill of Sale with respect to the Property and delivered the same to the Escrow Holder. 12-18-15 V9 -to- The foregoing conditions are solely for the benefit of Buyer and may be waived only by Buyer. Buyer shall at all times have the right to waive any condition, which waiver or waivers must be in writing to be effective. Neither the waiver by Buyer of any condition nor the satisfaction of any condition shall relieve Seller of any liability or obligation as respects any representation, warranty or covenant of Seller under this Agreement unless Buyer shall so agree in writing 7.4 Seller's Conditions to Close of Escrow. Notwithstanding any other provision set forth in this Agreement to the contrary, Seller's obligation to close the Escrow under this Agreement is subject to the satisfaction of each of the following conditions or Seller's express written waiver(in its sole and absolute discretion)of any unsatisfied conditions, in either case not later than the Closing;Date: (a) Oversight Board and DOF Approval. The Oversight Board shall have adopted a resolution at a properly noticed and agendized public meeting approving Seller's sale of the Property to Buyer pursuant to this Agreement, a copy of the Oversight Board's resolution shall have been delivered electronically to DOF in. accordance with H&S Code Section 34179(h), and DOF shall either have formally approved the transaction contemplated by this Agreement or the time shall have elapsed for DOF to request a review of the transaction contemplated by this Agreement as provided in H&S Code Section 34179(h) without DOF having requested such a review. When DOF approves the transaction contemplated by this Agreement (either after review or by lapse of the time within which to request review, whichever first occurs), Setter shall promptly notify Buyer and the Escrow Holder and the date upon which Seller so notifies Buyer and the Escrow Holder shall be deemed the date on which the condition set forth in this Section 7.4(a)has been satisfied. (b) Buyer's Representations Buyer's representations and waiianties set forth in Section 1 I shall be true and correct as of the Closing. (c) Buyer's Deliveries and Default Buyer shall have delivered to Seller and Escrow Holder all funds and documents required to be delivered by Buyer to Seller and Escrow Holder, respectively, pursuant to the terms of this Agreement, Buyer shall not be in Default under the terms of this Agreement, and no event shall have occurred which would constitute a Default by Buyer under the terms of this Agreement but for the requirement that notice be given or time elapse or both. (d) Construction Loan Buyer shall have delivered to Seller, in a form reasonably approved by the Successor Agency Fxecutive Director, a copy of all construction loan documents (e.g., notes, trust deeds, indentures, loan agreements, etc) necessary to assure closing and complete funding for the development and construction of the Hotel Addition. if construction financing is insufficient to assure complete funding for the development and construction of the Hotel Addition, Buyer shall have delivered to Seller, in a form reasonably approved by the Successor Agency Executive Director, evidence of sources of capital sufficient to demonstrate that Buyer has or will have sufficient equity capital to cover the excess, if any,of the cost of development and construction over the financing authorized by mortgage loans. 12-19-15 Vh l The foregoing conditions are solely for the benefit of Seller and may be waived only by Seller. Seller shall at all times have the right to waive any condition, which waiver or waivers must be in writing to be effective. Neither the waiver by Seller of any condition nor the satisfaction of any condition shall relieve Buyer of any liability or obligation as respects any representation, warranty or covenant of Buyer under this Agreement unless Seller shall so agree in writing 75 Cooperation Regarding Conditions Each Party shall exercise commercially reasonable diligence in an effort to satisfy the Closing Conditions as expeditiously as possible after the Effective Date. Each Party shall cooperate with the other Party, at the written request of the other Party,in the other Party's efforts with respect to the satisfaction of the conditions, provided, however, that the reasonable costs of such cooperation shall be borne by the Party making the request. 7.6 Failure of Conditions to Close of Escrow. if one or more of the Closing Conditions set forth in Sections 7.3 or 7 4 is not satisfied prior to the outside Closing Date provided for in Section 7.2 and the benefrtted Party or Parties is not willing to waive the unsatisfied condition(s), then (1) this Agreement, the Escrow, and the rights and obligations of Buyer and Seller shall terminate, except as otherwise expressly provided herein, (2) Buyer shall pay one hundred percent (100%) of Escrow Holder's and Title Company's cancellation charges, (3) Escrow Holder is instructed piomptly to return to Seller and Buyer all funds and documents deposited by them, respectively, into Escrow which are held by Escrow Holder on the date of such termination, and (4) the Existing;DDA,ITilton Parcel Lease, and Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) and all other agreements related thereto shall continue in full force and effect in accordance with the terms thereof. This Section 7.6 is not intended to limit or restrict the remedies of a Party if the failure of one or more of the Closing Conditions is due to a Default by the other Party Nothing Herein is intended to or shall be interpreted to modify or to change in any way any provision of the Existing DDA, the Hilton Parcel Lease, or the Interim Short-Term Lease (oi the Consolidated Long-Term Lease if in effect) 8 Closing Costs If the Escrow closes, (a) Seller shall pay one hundred percent (100%) of the premium for a CLTAStandard Owner's Policy of title with coverage in an amount equal to the Purchase Price,(b)documentary transfer taxes and recording fees shall be paid by Seller,(c) the escrow fees of Escrow Holder shall be paid one-half by Buyer and one-half by Seller, (d) any difference in premium cost between a CLTA Standard Owner's Policy with coverage in the amount of the Purchase Price and Buyer's Title Policy shall be paid by Buyer; (e) any property taxes, possessory interest taxes,and assessments required to close the Escrow shall be paid by Buyer, and (f) all other costs to close the Escrow shall be allocated between Seller and Buyer in accordance with customary practice for similar transactions in the County of Orange. 9. Deliveries to Escrow Holder. 9.1 Deliveries b Sy eller. Prior to the Closing(unless otherwise provided), Seller shall deposit the following documents into Escrow (a) a Grant Deed for the Property consistent with this Agreement and in substantially the form attached hereto as Exhibit "M duly executed by Seller, notarized and in recordable form; (b) four (4) copies of the Blanket Assignment and Bill 12-1 S-I S v9 -12- of Sale for the Property duly executed by Seller; (c)such proof of Seller's authority to enter into this Agreement and to perform the transaction contemplated by this Agreement as reasonably may be required by the Title Company; (d) a certification as to the non-foreign status of Seller for federal tax withholding purposes, completed and executed by Seller, if required by the Escrow Holder;(e) a Withholding Exemption Certificate on California Franchise Tax Board Form 593-C, duty executed by Seller,if required by the Escrow Holder; and (0 such other documents as may Escrow Holder may require Seller to execute that are consistent with this Agreement and required to enable Escrow Holder to perform its duties hereunder. 9.2 Deliveries by Buyer. Prior to the Closing(unless otherwise provided),Buyer shall deposit the following funds and documents into Escrow. (a) the entire Purchase Price, (b) a Grant Deed for the Property consistent with this Agreement and in substantially the form attached hereto as Exhibit "D" duly executed by Buyer, notarized and in recordable form; (c) the escrow and title fees and charges and other closing costs required hereunder; (d) all funds required to fully perform Buyer's monetary obligations to Seller that are set forth in the Hilton Parcel Lease and the Interim Short-Term Lease (or the Consolidated Lang Term Lease if in effect) prorated to the Closing, including without limitation the payment of any Ground Rent owing through the Closing (including an estimate of the Participation Rent that wr11 be due through the Closing Date based upon Buyer's and Seller's mutually agreed upon good faith estimate of Adjusted Room Revenue through that date, and with an appropnate adjustment of any underpayment or overpayment to be made between Seller and Buyer outside of Escrow within ninety(90)days after the Closing, as a matter with which the Escrow Holder shall not be concerned), (d) such proof of Buyer's authority to enter into this Agreement and to perform the transaction contemplated by this Agreement as reasonably may be required by the Title Company, and (e) such other documents as may Escrow Holder may require Buyei to execute that are consistent with this Agreement and required to enable Escrow Holder to perform its duties hereunder. 10. Disbursements and Other Actions by Escrow Holder Upon the Closing, Escrow Holder promptly shall undertake all of the following (a) disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price, Buyer's portion of the escrow and title fees and charges and closing costs, and any payments owing by Buyer to Seller pursuant to the Hilton Parcel Lease and/or the Interim Short-Term Lease(or the Consolidated Long-Tenn Lease if in effect)for the period ending on the Closing Date as set forth in Section 9.2, deduct all items chargeable to the account of Seller under Section 8, pay the amounts owing to the Persons entitled to payment,and disburse the remaining balance of the funds to Seller,or in accordance with Seller's written instructions, promptly upon the Close of Escrow; (b)cause the Grant Deed (with documentary transfer tax information to be affixed after recording), and any other documents which Buyer or the Parties may direct to be recorded in the Official Records of the Orange County Recorder in the order directed by the Parties;(c)prepare and deliver to each of Buyer and Seller two conformed copies of the Grant Deed; (d) cause the Title Company to issue the Buyer's Title Policy to Buyer; (e) deliver two executed copies of the Blanket Assignment and Bill of Sale for the Property to each of Buyer and Seller; (f) deliver to Buyer any proof of authority deposited into Escrow by Seller pursuant to Section 9.1; (g) deliver to Buyer the certifications deposited into Escrow by Seller pursuant to Section 9 1(d) and (e); and (g) deliver to Seller any proof of authority deposited into Escrow by Buyer pursuant to Section 9 2 32 18.15 v9 -13- 11. Buyer's Representations and Warranties. Buyer represents and warrants to Seller as follows, provided that all such representations and warranties arc limited to Buyer's actual current knowledge,without any duty of inquiry or investigation, and all of such representations and warranties shall survive the close of Escrow for the limited period of one (1) year and, except to the extent Sellci has filed an action against Buyer within said time period alleging Buyer has committed a Default with respect to a specific representation or warianty, all of such representations and warranties as to which such an action is not timely filed shall automatically expire on the first anniversary of the Closing 11.1 Authority. Buyer is a limited liability company duty organized and validly existing under the laws of the State of California. Buyer has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement. Those individuals executing this Agreement on behalf of Buyer have the right, power, legal capacity, and authority to enter into this Agreement on behalf of Buyer and to execute all other documents and perform all other acts as may be necessary to perform all of Buyer's obligations under this Agreement 11.2 No Consents. No approval or consent not previously obtained by any Person is necessary in connection with the execution of this Agreement by Buyer or the performance of Buyer's obligations under this Agreement. 11.3 No Violations of Agreements. Neither this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement, or instrument to which Buyer is a party or by which it may be bound. 114 Binding Agreement. The Agreement constitutes the legally valid and binding obligation of Buyer and is enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moi atorium, or similar laws,or by equitable principles relating to or limiting the rights of creditors generally. 11 5 No Violation of Laws. The consummation of the transaction contemplated by this Agreement does not violate any Law. 11.6 Brokers. No broker, salesperson, or finder has been engaged by Buyer in connection with the transactions contemplated by this Agreement. Each of the foregoing representations and warranties shall be, and Buyer shall cause them to be, true in all respects on and as of the date of this Agreement and on and as of the close of Escrow as though made at that time. 12 Seller's Representations and Warranties Seller represents and warrants to Buyer as follows, provided that all such representations and warranties are limited to Seller's actual current knowledge,without any duty of inquiry or investigation, and all of such representations and warranties shall survive the close of Escrow for the limited period of one (1) year and, except to the extent Buyer has filed an action against Seller within said time period alleging Seller has committed a Default with respect to a specific representation or warranty, all of such representations and warranties as to which such an action is not timely filed shall automatically expire on the first anniversary of the Closing: 12-IS-15 v9 -14- 12.1 Authors . Seller is a public agency duly organized and validly existing under the laws of the State of California. Subject to Section 12 2, Seller has the light, power, legal capacity, and authority to enter into and perform its obligations under this Agreement and those individuals executing this Agreement on behalf of Seller have the right, power, legal capacity,and authority to enter into this Agreement on behalf of Seller and to execute all other documents and perform all other acts as may be necessary to perform all of Seller's obligations under this Agreement. 12.2 No Consents. With the exception of the need to obtain approval from the Oversight Board and, potentially,DOF, as referred to in Sections 7.3(a) and 7.4(a), no approval or consent not previously obtained by any Person is necessary in connection with the execution of this Agreement by Seller or the performance of Seller's obligations under this Agreement 12.3 No Violations of Agreements Subject to Section 12.2, neither this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement, or instrument to which Seller is a party or by which it may be bound. 124 Binding Agreement Subject to Section 12 2, this Agreement constitutes the legally valid and binding obligation of Seller and is enfoiceable against Seller in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws, or by equitable principles ielating to or limiting the rights of creditors geneially. 12.5 Broker. No broker, salesperson or finder has been engaged by Seller in connection with the transactions contemplated by this Agreement, 12.6 No Litigation. There is no suit, action, claim, proceeding or protest pending or threatened which may adversely affect the Property. 12 7 Assessments/Improvements. There is no proposed or existing public improvement which may involve any charge being levied or assessed upon the Property or any plan, study, or effort by any of the Authorities or any other Person or any existing or proposed Law which may adversely affect the Property. 12 8 Bankruptey Neither Seller nor any entity or person that owns or controls or compiises Seller is bankrupt or insolvent under any applicable Federal or state standard, has filed for protection or relief under any applicable bankruptcy or creditor protection statute, or has been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute Seller is not entering into the transaction described in this Agreement intending to defraud any creditor or to prefer the rights of one creditor to any other. Seller and Buyer have negotiated this Agreement at arm's length and the consideration paid represents fair value for the assets being transferred. 129 Comphance Seller has not received any written requests to modify or terminate any use of the Property from any of the Authorities. 12-18.15 V9 -15- 12.10 Foreign Person. Seller is not a "foreign person" within the meaning of Internal Revenue Code Section 1445 and Seller will deliver the Non-Foreign Affidavit through Escrow if requested to do so by Escrow Holder. Seller represents and warrants that Seller is not subject to the withholding requirements under Section 18662 of the California Revenue and Taxation Code and Seller will deliver the California Withholding Certificate through Escrow if requested to do so by Escrow Holder Each of the foregoing representations and warranties shall be, and Seller shall cause them to be, true in all respects on and as of the date of this Agreement and on and as of the Closing as though made at that time. 13. General Provisions. 13.1 Events of Default. The occurrence of any one or more of the following events before the Closing shall constitute a Default by a Party under this Agreement- (a) Failure to Perform. The failure of the Party to perform any material obligation set forth in this Agreement on its part to be performed if the failure should continue uncured for a period of fifteen (15)days, including without limitation a failure to deposit funds or documents or tape other actions required to timely close the Escrow provided for herein, after written notice is given to the Party of the occurrence of the failure; provided, however, that the failure shall not be deemed to have occurred if the failure is of a nature that reasonably requires more than fifteen (15) days to cure, is capable of being cured fully before the outside Closing Date set forth in Section 7 2 and the Party is proceeding continuously and diligently to cure the failure and does cure the failure before said outside Closing Date; further provided, however, in no event shall any cure period run or be permitted to run past said outside Closing Date; (b) Representation/Warrant x Any representation or warranty made by the Party in this Agreement proves to have been materially incorrect as of the date made or as of any other date on which the representation and warranty was required by the terms of this Agreement to be true(provided that in order for any breach of a Buyer or Seller representation and warranty to constitute a Default hereunder, Seller's or Buyer's claim with respect thereto must have been filed within the time set forth in Sections I I and 12, as applicable); (c) Relief of Debtoi s. Institution by the Party of proceedings under any law of the United States or of any state or foreign jurisdiction for the relief of debtors; (d) General Assignment A general assignment by the Party for the benefit of creditors or the filing of a voluntary petition in bankruptcy, (e) Bankruptcy. The fling of an involuntary petition in bankruptcy against the party by the creditors of such Party, such petition remaining undischarged for a period of thirty(30)days after the date the same was filed(or to the date of Close of Escrow if such date occurs before the expiration of the thirty(30)day period); (f) Receiver. The appointment of a receiver to take possession of any of the assets of the Party, such receivership remaining undischarged for a period of thirty (30) days 12-18-15 V9 -16- from the date of its appointment (or to the date of Close of Escrow if such date occurs before the expiration of the thirty(30)day period),or (g) Attachment. The attachment, execution, or other judicial seizure of the Party's interest in this Agreement (and, in the case of Seller, in all or any portion of the Property), such attachment, execution or seizure being to an amount not less than Fifty Thousand Dollars ($50,000) and remaining undismissed or undischarged for a period of thirty (30) days after the levy of the attachment, execution, or seizure (or to the date of close of Escrow if such date occurs before the expiration of the thirty(30)day period). 13.2 Legal Fees. In the event of the bringing of any action or suit by either Party against the other Party by reason of any breach of any of the covenants, conditions, agreements, or provisions on the part of the other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to have and recover of and from the other Party all costs and expenses of suit,including reasonable attorneys' fees(or, in the event of any action to enforce this Agreement, the prevailing Party shall be entitled to recover all of its costs and expenses of the action, including reasonable attorney's fees), as determined by a court of competent junsdiction. 13.3 Brokers and Finders. Each Party represents to the other Party that it has not had any contact, dealings, or communications with a broker or finder in connection with the transaction contemplated by this Agreement or any other person who can claim a right to a commission or finder's fee. If any other broker, finder, or other person makes a claim for a commission or finder's fee based upon any contract, dealing, or communication with a Party, then such Party shall indemnify,defend, and hold the other Party harmless from and against all damages, claims, losses, and expenses, including attorneys' fees, arising out of the broker's, finder's, or other person's claim 13.4 Notices. All notices or other communication provided for under this Agreement shall be in writing, and shall be delivered personally, via facsimile or email, by reputable overnight mail equivalent carver, or sent by registered or certified mail, return receipt requested, postage prepaid, addressed to the person to receive such notice or communication at the following address and shall be effective upon delivery or refusal to accept delivery: To Seller- Successor Agency to the Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach,CA 92648 Attn:Executive Director Fred Wilson Phone: 714-536-5575 Fax: 714-375-5087 Email:fred wilson@surfcity-hb org (with copies to City of Huntington Beach 2000 Main Street Huntington Beach,CA 92648 12-18-IS V9 -17- Attn• City Attorney Michael Gates Email:Michael gates a,surfcity-hb org To Buyer: The Waterfront Hotel,LLC c/o The Robert Mayer Corporation 8951 Research Drive Irvine,CA 92618 Attn. RT Mayer Phone 949-8091 Fax- 949-988-7176 Email, U@maycrcorp.com (with copies to:) Rutan&Tucker,UT 611 Anton Boulevard, 14`h Floor Costa Mesa,CA 92626 Jeffrey M.Oderman,Esq. Phone 714-641-5100 Fax: 714-546-9035 Email: loderman a,rutan com Notice of change of address shall be given by written notice in the manner set forth in this Section. Notices sent by email and facsimile shall be deemed received upon successful transmission 13.5 Survival. All of the covenants, representations, and warranties set forth in this Agreement shall survive the Closing, delivery of the Grant Deed, provided that Buyer's and Seller's representations and warranties shall terminate at the time set forth in Sections 11 and 12). Where the context shall require, the provisions of this Agreement shall survive the termination of this Agreement prior to the Closing. 13.6 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, successors, and assigns, provided, however, prior to the Close of Escrow, neither Party to this Agreement shall assign or transfer this Agreement or any interest,right, or obligation in this Agreement without the prior written consent of the other Party, and any such assignment or transfer without such written consent shall be null and void No assignment by either Party of its rights and obligations hereunder shall release that Party of its obligations to the other Party hereunder without such other Party's written consent, which consent may be withheld in such Party's sole and absolute discretion 13.7 Regwred Actions of Bu, ey r and Seller. Buyer and Seller agree to execute all instruments and documents and to take all actions consistent with this Agreement as may be required in order to consummate the transaction contemplated by this Agreement and shall use their reasonable efforts to accomplish the Closing in accordance with the provisions of this Agreement; provided, that this Section 13.7 is not intended and shall not be construed to modify this Agreement or require a Party to waive its rights hereunder. 12-18-IS v9 -18- 13.8 Entiie A ig eement. Thus Agreement contains the entire agreement between the Parties concerning the subject matter of this Agreement and supersedes any prior agreements, understandings, or negotiations, except for the Existing DDA, the 1-hlton Parcel Lease, and the Interim Short-Tenn Lease (or the Consolidated Long-Term Lease if in effect). From and after the Closing the Hilton Parcel Lease and the Interim Short-Term Lease(or the Consolidated Long- Term Lease if in effect) shall be deemed to have been terminated and of no further force or effect, provided, however, that nothing in this Agreement shall be deemed to modify, amend, or terminate any or the obligations of either Party set forth in either the Hilton Parcel Lease or the Interim Short-Term Lease (or the Consolidated Long-Term.Lease if in effect) that have not been fully performed as of the Closing (including without limitation Buyer's obligation to pay the Ground Rent and all utilities, impositions, insurance costs, thereunder through the date of the Closing and the Parties' mutual obligation set forth in Section 9.2 to make any required adjustments to the amounts paid by Buyer to Seller pursuant to the Hilton Parcel Lease and the Interim Short-Term Lease (or the Consolidated Long-Tenn Lease if in effect) prior to the Closing). Notwithstanding the foregoing, the Parties acknowledge and agree that this Agreement is not intended to modify, amend, terminate, or in any way affect: (a) the ongoing obligations of Seller set forth in Attachment No. 8 (the"Schedule of Feasibility Gap Payments") of the Existing DDA; (b) any agreement set forth in the Existing DDA,Hilton Parcel Lease, or Interim Short-Term Lease (oi the Consolidated Long-Term Lease if in effect) to waive or release claims and any obligation set forth in the Existing DDA, Hilton Parcel Lease, or Interim Short- Term Lease (or the Consolidated Long Term Lease if in effect) to indemnify, defend, and hold harmless Successor Agency and/or City shall survive in accordance with the provisions set forth therein; (c) the credit to which Buyer is entitled against the Seventh Extension Payment as provided for in Section 203.3(a)(12)(g) of the Existing DDA (the amount of which shall be calculated based on the date the Closing occurs pursuant to this Agreement rather than the close of escrow for the conveyance of the long-term Lease for Parcel C,as provided therein), (d) any other provisions of the Existing DDA,Hilton Parcel Lease, or Interim Short-Tcrm Lease (or the Consolidated Long-Term Lease if in effect) which survive the expiration oi tennination of such agreement shall survive in accordance with the provisions set forth therein; (e) to the extent necessary to permit the pasties to enforce any of the surviving obligations set forth in clauses (a) — (d), the general provisions set forth in the Existing DDA, Hilton Parcel Lease, or Interim Short-Term Lease (oi the Consolidated Long-Term Lease if in effect) shall survive, and (f) the rights or obligations of City and Buyer as set forth in that certain License Agreement to Provide Landscaping and Other Impi ovcments in the Public Right of Way dated as of February 20, 2001, and recorded in the Official Records of the Orange County Recorder's office as Instrument No.20010232765 on April 18,2001. 139 Time of Essence Time is of the essence of each and every term, condition, obligation, and provision set forth in this Agreement. 13.10 Counterparts. This Agreement may be executed in counterparts, each of which shalt be deemed an original, but all of which, together, shall constitute one and the same instrument 13.11 Severabiliiv. If any portion of this Agreement shall be declared by any court of competent Jurisdiction to be invalid, illegal, or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining parts of this Agreement shall remain in full iz-isas v9 -19- force and effect, as fully as though such invalid, illegal, or unenforceable portion had never been part of this Agreement 13.12 Headings. Headings at the beginning of each section are solely for convenience of reference and are not a part of this Agreement. 13.13 Constiuction Whenever the context of this Agreement requires the same, the singular shall include the plural and the masculine, feminine, and neuter shall include the others. Without limitation, any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to any number of the relevant class This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties had prepared the same Unless otherwise indicated, all references to sections are to sections in this Agreement. All exhibits are incorporated in this Agreement by reference. The term "Agreement" includes such exhibits (as exhibits and, if appropriate, as subsequently executed agreements and instruments) If the Clay on which Buyer or Seller is acquired to take any action under the terms of this Agreement is not a business Clay, the action shall be taken on the next succeeding business day For purposes of this Agreement, business days shall not include Saturdays, Sundays, of holidays recognized by the Federal Reserve Bank of San Francisco. Any reference in this Agreement to an agreement or other instrument shall mean such agreement or instrument as it may from time to time be supplemented, modified, amended, and extended in accordance with the terms of this Agreement. Taus Agreement is executed and delivered in the State of California and shall be construed and enforced in accordance with, and governed by, the internal laws of the State of California, without regard to conflict of laws principles. 13.14 No Waiver. No waiver by a Party of any Default by the other Party under this Agreement shall be implied from any omission or delay by the non-defaulting Party to take action on account of the Default if the Default persists or is repeated Any waiver of any covenant, term, or condition contained in this Agreement must be in writing Any such express written waiver shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition, nor shall it affect any Default other than the Default expressly made the subject of the waiver Any such express waiver shall be operative only for the time and to the extent stated in the waiver The consent or approval by a Party to or of any act by the other Party shall not be deemed to waive or render unnecessary consent or approval to or of any subsequent act. 13.15 Relationship Between Parties. Seller and Buyer agree that (a) the relationship between them is, is intended to be, and shall at all times remain, in connection with the transactions contemplated by this Agreement,that of seller and purchaser and(b)neither Party is, is intended to bc, or shall be construed as a partner, joint venturer, alter ego, manager, controlling person, or other business associate or participant of any kind of the other Party and neither Party intends to ever assume such status. 13.16 Third Party Beneficiaries. This Agreement is made for the purpose of defining and setting forth certain rights and obligations of Buyer, Seller, and City. It is made for the sole protection of Buyer, Seller and City and Buyer's, Seller's and City's respective heirs, executors, 12-iR-IS V9 -20- administrators, successors, and assigns No other Person shall have any rights of any nature under or by reason of this Agreement. 13.17 Estoppels. Upon the written request of Buyer or any current or prospective holder of a deed of trust,mortgage, or other security interest in the Property O'L ender"),Seller shall cooperate with Buyer and/or such Lender in executing an appropriate estoppel certificate confirming the status of any of the agreements referred to in Section 13.8 of this Agreement or any other matters affecting the rights and obligations of Buyer and such Lender relating to the Property that will survive the Closing as to which Buyer or Lender may inquire. Such estoppel certificate shall be for the benefit of Buyer, Lender, and their respective successors and assignees Buyer or such Lender, as applicable, shall prepare the form of the estoppel certificate, subject to the reasonable approval of Seller as to form and content Buyer shall compensate Seller for Seller's actual and reasonable costs incurred in investigating the matters addressed in any such estoppel certificate and reviewing and approving the same. 13.18 Indemnity. Buyer shall indemnify, defend and hold harmless Seller, City and each of their respective officials, employees, attorneys, consultants, and agents from and against any and all loss, liability, damage, claim, cost and/or expense (including, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses, court and litigation costs and fees of expert witnesses) (collectively, `Claims") resulting or arising from or in any way connected to Seller approving or entering into this Agreement, implementation of this Agreement, Seller's performance of this Agreement, or the transaction contemplated hereunder, including, without limitation, any Claim that the Purchase Price is less than fair market value and results, directly or indirectly,in a distribution of net sale proceeds to the affected taxing entities in an arnount less than the amount to which the affected taxing entities are entitled by law or any Claim relating in any way to a challenge pertaining to the sufficiency and/or adequacy of the value or consideration for the transaction contemplated hereunder The foregoing covenant shall not merge with the Grant Deed and shall survive the Closing. Without limiting the foregoing, and as a part of the foregoing indemnity, defense and hold harmless, Buyer shall be liable for promptly paying or reimbursing Seller and/or City, as applicable, for any and all of Seller's and/or City's actual and reasonable costs and expenses related to any contest, challenge and/or defense of any disapproval/determination or threat of any disapproval/determination of this Agreement by DOF or any third party, including, without limitation, participating in whatever administrative appeal or proceeding, meet-and-confer and/or meet-and-discuss process may be available and/or initiating, cooperating with, participating in, defending and/or pursuing litigation (including any appellate proceeding relating to any order or judgment entered in any such litigation or administrative appeal or proceeding). SucI3 costs and expenses shall include, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses, court and litigation costs and fees of expert witnesses. Seller shall have no obligation to defend this Agreement to DOF or any third party. 12-18-15 v9 -21- 14 Right of En Lq. 14.1 Grant of Right of Entry. Provided that all of the terms and conditions of this Section 14 are and remain fully satisfied, subject to the Interim Short-Term Lease, Seller hereby grants to Buyer and its agents and contractors, a temporary and conditional non-exclusive right to enter upon Parcel C from the Effective Date to Close of Escrow for the purpose of demolition, excavation, and rough grading on Parcel C (and such other work as may be pre-approved in writing Seller's Executive Director) as necessary for the development and construction of the Hotel Addition. The right to enter may be revoked by Seller's Executive Director for Buyer's noncompliance with any of the conditions set forth herein. Seller shall not be obligated foi any loss, financial or otherwise, which may be incurred by Buyer as a result of such revocation or the termination of the right of entry. Buyer expressly waives any claim for expense or loss which Buyer might incur as a result of Seller's revocation or termination of the right of entry in accordance with the foregoing. 14.2 Insurance. Prior to Buyer entering Parcel C, Buyer shall furnish evidence satisfactory to the City Attorney of the City that Buyer or its contractors have obtained comprehensive liability insurance in an amount and in the form as is approved by the City Attorney of the City for the purpose of protecting Seller and City and their officers, employees, agents, contractors, and consultants from claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorneys' fees and costs), which may be caused by any of Buyer's activities under the right of entry, whether such activities or performance thereof be by Buyer or anyone directly or indirectly employed or contracted with by Buyer and whether such damage shall accrue or be discovered before or after the termination of this Agreement. 14.3 Liens Buyer shall not permit to be placed against Parcel C, or any part thereof, any design professional's, mechanic's, materialmen's, contractor's or subcontractor's liens (collectively, `Liens") Buyer shall indemnify, defend, and hold harmless Seller from all liability far any and all liens, claims, and demands, together with costs of defense and reasonable attorneys' fees, arising from any Liens. Seller reserves the right, at its sole cost and expense, at any tune and from tune to time, to post and maintain on Parcel C,or any portion thereof,or on any improvements on Parcel C, any notices of non-responsibihty or other notice as may be desirable to protect Seller against liability In addition to, and not as a limitation of Seller's other rights and remedies under this Section 14, should Buyer fail, within 10 calendar days of written request from Seller, either to discharge any Lien or to bond for any Lien, or to defend, indemnify,and hold harmless Seller from and against any loss,damage, injury, liability, or claim arising out of alien, then Seller, at its option but without the obligation, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to Seller by Buyer upon written demand. 14 4 Restoration. Subject to Section 14.8 below, in the event Close of Escrow provided for in this Agreement does not occur by the outside Closing Date referred to in Section 7 2, immediately following written request by Seller,Buyer shall be obligated, at Buyer's sole cost and expense, to cause Parcel C to be placed in the condition required pursuant to all of the following, as and to the extent applicable(the `Restoration"). (a) the Hilton Parcel Lease(or the 12-I8-15 V9 -22- Consolidated Long-Term Lease if in effect); (b) the applicable land use entitlements for the Hilton Parcel and Parcel C,(c) the Reciprocal Fire and Access Easement Agreement dated as of August 30, 1995, and recorded in the Official Records of the Orange County Recorder on September 1, 1995, as Document No 95-0384750, as subsequently assigned by Waterfront Construction No. 1 to Buyer pursuant to an Assignment and Assumption of Easements dated July 30, 1997, and recorded in the Official Records of the Orange County Recorder on August 1, 1997, as Instrument No. 19970367563 and as subsequently reaffirmed pursuant to the Easement Agreement (Reaffirmation) dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No. 2006000582101; and (d) the Parcel C Parking Easement Agreement dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No 2006000582104 Buyer agrees that if Buyer does not cause the Restoration of Parcel C(or such applicable portion thereof) as required by this Section, and has not cured such failure within ninety (90) days following written notice from the City (or, if such Restoration cannot with reasonable diligence be completed within ninety (90) days, then within such additional period of time that such Restoration can be completed with the exercise of commercially reasonable diligence), then the City shall have the right, at the City's election (in its sole and absolute discretion) to enter Parcel C (or such applicable portion thereof) and complete, or cause the completion of, the Restoration of Parcel C (or such applicable portion thereof) at Buyer's sole cost and expense. In the event that the City makes such an election, then Seller and Buyer agree that Seller and Buyer shall cooperate with the City with regard to the Restoration and Seller and Buyer shall permit City entry upon Parcel C limited to such purpose. "Restoration" includes providing adequate security measures for Parcel C in order to prevent accidents or injuries. All Restoration shall be performed in compliance with (a) all applicable Laws of all Authorities, and (2) all directions, rules, and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquinnglunsdretion over the Restoration. Restoration shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction over the Restoration, and Buyer shall be responsible for the procurement and maintenance thereof, at Buyer's sole cost and expense. 14.5 _Compliance With Laws/Permits. Buyer shall, in all activities undertaken pursuant to this Section 14, comply and cause its contractors, agents, and employees to comply with all Laws of all Authorities. Without limiting the generality of the foregoing, Buyer, at its sole cost and expense, shall obtain any and all permits which may be required by any of the Laws for any activities Buyer conducts pursuant to this Section 14 and shall conduct, or cause to be conducted, any work on Parcel C in accordance with any such permits. 14 6 Indemnification. Buyer hereby agrees to indemnify, defend, assume all liability for, and hold harmless Seller, the City, and their officers, employees, agents, contractors, and consultants from and against all actions,claims, suits, penalties,obligations,liabilities, damages to property, and claims or injuries to persons (collectively;"Claims") arising out of or in connection with Buyer's right of entry pursuant to this Section 14. Buyer's indemnity given under this Section 14 shall apply whether caused by actions of Buyer or anyone directly or indirectly employed or under contract with Buyer, and whether such CIasms shall accrue or be 12-18-15 ve -23- discovered before or after the expiration or termination of this Agreement or termination of the rights afforded under this Section 14 Notwithstanding the foregoing, Buyer's indemnity shall not apply to the extent that claims are caused by any negligent or intentional acts of Seller or City. 14.7 Inspection. Seller and its representatives, employees, agents, and independent contractors may enter and inspect the Parcel C or any portion thereof or any improvements thereon at any time and from time to time at reasonable times to verify Buyer's compliance with the terms and conditions of this Section 14 14.8 Section 14 To Terminate Upon Closing of Consolidated Lon Term Lease If Buyer closes on the Consolidated Long-Term Lease, as referred to in the second paragraph of Section 7.2, the right of entry and obligations to provide insurance and to cause the Restoration provided in this Section 14 shall automatically terminate and be of no further force or effect at that time. IN Wn NESS WHEREOF,the Parties have executed this Agreement as of the day and year first above written Seller- SLUESSORACEICYTO EVIIAPM©�TT AGINCY OF IIY O GTON EACH By: 2240A MOW ts• hwrpe n ATTEST- Its•S etary APPROVED AS ORM: By I s neral Counse Buyer, 'II-IE WATERFRONT HOTE7,TLC,a California limited liability company By: Waterfront Development,Inc , a California co n,its Managing Member By 7job L.May ,Jr.,President 12-IB-IS V9 -24- EXHIBIT "A-1" LEGAL DESCRIPTION OF THE HILTON PARCEL All that certain land situated in the State of California, County of Orange, City of Huntington Beach, and is described as follows Lot 1 of Tract No 13045, as shown on a map filed in Book 628, pages 46 and 47 of Miscellaneous Maps, Records of Orange County, California APN 024-252-02 12-16-15 v8 EXHIBIT "A-I" EXHIBIT "A-2" LEGAL DESCRIPTION OF PARCEL C All that certain land situated in the State of California, County of Orange, City of Huntington Beach, and is described as follows Lot 2, Tract No 15535, per map recorded in Book 790, Pages 44 through 50 of Maps, in the office of the County Recorder, County of Orange APN 024-252-01 12-16-15 va EXHIBIT"A-2" EXHIBIT "A-3" DEPICTION OF THE LAND [BEHIND THIS PAGE] 'Z-'6-'s VS EXHIBIT"A-3" THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH A 9CI,rjC S LINE N 1/2 OF NE 1/4 LOT 1 PAR Ell,2 SECTI❑N 14, T 6S, R 11W TRACT NO. 13045 BOOK 628,PAGES 46&47 M.M. ORANGE COUNTY NOT TO SCALE 4 APN:024-252-02 \ PORTION N 1/2 OF NE 1/4 SECTION 14,T 6 S.,R. I I W.,S B.B.&M. PARCEL i IN RANCHO LAS BOLSAS BOOK 51,PAGE 14 M M. 5 LOT 1 ORANGE COUNTY JR 13045 1112 17 PARCEL A LOT 2 TR 15535 P. I. Q. ' (4) 90-001191 D.R. (6'&14' WIDE) 9 / • (5) 90-671427 O.R. (165'XI7' WIDE) \ (6) 90-0384750 ❑.R, (WIDTH VARIES) • (6) 19970367563 ❑.R, (WIDTH VARIES) (6) 2006000582101 ❑,R. (WIDTH VARIES) (9) TR. 15535 (WIDTH VARIES) 01) 19990285625 0,R, 0(11) 20000179415 D.R. LOT BOTH APPR❑XIMATE L❑CATION ONLY TRACT NO. 15535 0 C 12) 20000179415 D.R. BOOK 790,PAGES 44-50 M.M. TRACT MAP CERTIFICATE OF CORRECTION BOTH APPR❑XIMATE L❑CATI❑N ONLY INSTRUMENT NO.03-659669 O.R. •(16) 2006000582103 O.R. JUNE6,2003 BOTH APPROXIMATE L❑CATI❑N ONLY ORANGE COUNTY • 07) 2006000582104 O.R. (WIDTH VARIES) APN 024-252-01 This at is for our aid in locatin our ana wi re erence o s ree s and oLner parcels wnill t a a a e ieve o correc i eTlEy mationa7T."It7e insurance assumes no liabilit y or any loss occurr nq y ORDERNO. 23057599—CT1 reason o fe ance tnereon FIDELITY NATIONAL TITLE COMPANY EXHIBIT B FORM OF BLANKET ASSIGNMENT AND BILL OF SALE Reference is made to that certain property located in the City of Huntington Beach, County of Orange, State of California, and described in more detail in Exhibit A attached hereto and made a part hereof, and the improvements located thereon and the rights, privileges, and entitlements incident thereto (the "Property") For good and valuable consideration, receipt of which is acknowledged, the undersigned, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Seller"), to the full extent owned or possessed by Seller, sells, transfers, assigns, conveys, and delivers to THE WATERFRONT HOTEL, LLC, a California limited liability company ("Buyer"), all of Seller's right, title, and interest in all assets, rights, materials, reimbursements, refunds, and/or claims owned, used or held in connection with the ownership, use, management, development, or enjoyment of the Property, including, without limitation (i) all entitlements, permits, subdivision agreements, and other agreements relating to the development of the Property, (u) all plans, specifications, maps, drawings, and other renderings relating to the Property, (in) all warranties, claims, indemnities, and any similar rights relating to and benefiting the Property or the assets transferred hereby, (iv) all intangible rights, goodwill, and similar rights benefiting the Property, (v) all development rights benefiting the Property, (vi) all rights, refunds, claims, and awards benefiting or appurtenant to the Property, (vii) all rights to receive a reimbursement, credit, or refund from the applicable agency or entity of any deposits or fees paid in connection with the development of the Property, and (viu) all claims, counterclaims, defenses or actions, whether at common law or pursuant to federal, state, or local laws or regulations, against third parties relating to the existence of any Hazardous Materials in, at, on or under the Property Seller shall, at any time and from time to time upon written request therefor, execute and deliver to Buyer, its nominees, successors, and/or assigns, any new or confirmatory instruments and do and perform any other acts that Buyer, its nominees, successors, and/or assigns may request in order to fully transfer possession and control of, and protect the rights of Buyer, its nominees, successors, and/or assigns in, all of the assets of Seller intended to be transferred and assigned hereby Seller SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTO CH By Its Chai on 1 EXHIBIT"B" 12-16-15 V8 -I- EXHIBIT "C" TITLE REPORT [BEHIND THIS PAGE] 12-16-15 V8 EXHIBIT"C" x>V,o/r G - 0 Fidelity National Title Company 1300 Dove Street,Suite 310,Newport Beach,CA 92660 Phone (949)622-5000•Fax Issuing Policies of Fidelity National Title Insurance Company Title Officer Curtis Taplm(MA) Order No 997-23057599--CTI TO The Robert Mayer Corporation 8951 Research Drive Irvine,CA 92618 ATTN R.J.Mayer YOUR REFERENCE Hilton Fee PROPERTY ADDRESS: 21100 Pacific Coast Highway-Hilton Fee,Huntington Beach,CA AMENDED PRELIMINARY REPORT In response to the application for a policy of title insurance referenced herein, Fidelity National Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Attachment One The policy to be issued may contain an arbitration clause When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Attachment One Copies of the policy forms should be read They are available from the office which issued this report This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested r The policy(s) of title insurance to be issued hereunder will be policy(s) of Fidelity National Tale Insurance Company, a Nebraska Corporation Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully The exceptions and exclusions are meant to provideyou with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all!tens,defects and encumbrances affecting title to the land. Countersigned by Authorized Signature CLTA Preliminary Report Form—Modified(11/17/06) Page 1 0 Fidelity National Title Company 1300 Dove Street,Suite 310,Newport Beach,CA 92660 Phone (949)622-50000 Fax AMENDED PRELIMINARY REPORT EFFECTIVE DATE: September 15,2015 at 7:30 a.m.,Amended: September 25,2015,Amendment No. ORDER NO.: 997-23057599--CTI The form of policy or policies of title insurance contemplated by this report is ALTA Extended Owners Policy(6-17-06) 1 THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS A Fee as to Parcel(s) 1,2 and A Easement(s)more fully described below as to Parcel(s)3,4,B,C and D 2 TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 3 THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS See Exhibit A attached hereto and made a part hereof. CLTA Preliminary Report Form—Modified(11/17/06) Page 2 1 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT1 EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA,AND IS DESCRIBED AS FOLLOWS PARCEL 1 LOT 1 OF TRACT NO 13045, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 628, PAGES 46 AND 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY EXCEPT ANY AND ALL OIL, OIL RIGHTS, PETROLEUM, MINERALS, MINERAL RIGHTS, NATURAL GAS RIGHTS, AND OTHER HYDROCARBON SUBSTANCES BY WHATSOEVER NAME KNOWN, GEOTHERMAL RESOURCES(AS DEFINED IN CALIFORNIA PUBLIC RESOURCES CODE,SECTION 6903),AND ALL PRODUCTS DERIVED FROM ANY OF THE FOREGOING THAT MAY BE WITHIN OR UNDER THE LAND, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING, PROSPECTING AND OPERATING THEREFOR AND STORING IN AND REMOVING THE SAME FROM THE PREMISES OR ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN THOSE CONVEYED HEREBY, OIL OR GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE PREMISES, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS,TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF,AND TO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,DEEPEN AND OPERATE ANY SUCH WELLS OR MINES, WITHOUT, HOWEVER, THE RIGHT TO ENTER, DRILL, MINE, STORE, EXPLORE OR OPERATE ON OR THROUGH THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE OF THE PREMISES,AS SET FORTH IN A LEASE DATED APRIL 28, 1989 AND MEMORANDUM RECORDED APRIL 28, 1989 AS INSTRUMENT NO 89-225546,OFFICIAL RECORDS ALSO EXCEPT ANY AND ALL WATER, WATER RIGHTS OR INTERESTS THEREIN, NO MATTER HOW ACQUIRED BY LESSOR,TOGETHER WITH THE RIGHT AND POWER TO EXPLORE,DRILL,REDRILL,REMOVE AND STORE THE SAME FROM THE PREMISES OR TO DIVERT OR OTHERWISE UTILIZE SUCH WATER, WATER RIGHTS OR INTERESTS ON ANY OTHER PROPERTY OWNED OR LEASED BY LESSOR, WHETHER SUCH WATER RIGHTS SHALL BE RIPARIAN, OVERLYING, APPROPRIATIVE, PERCOLATING, LITTORAL, PRESCRIPTIVE, ADJUDICATED, STATUTORY OR CONTRACTUAL, BUT WITHOUT, HOWEVER, ANY RIGHT TO ENTER UPON THE SURFACE OF THE PREMISES IN THE EXERCISE OF SUCH RIGHTS AND PROVIDED FURTHER, THAT THE EXERCISE OF ANY SUCH RIGHTS BY LESSOR SHALL NOT RESULT IN ANY DAMAGE OR INJURY TO THE IMPROVEMENTS, INCLUDING WITHOUT LIMITATION ANY SUBSIDENCE OF ALL OR ANY PART OF THE IMPROVEMENTS, AS SET FORTH IN A LEASE DATED APRIL 28, 1989 AND MEMORANDUM RECORDED APRIL 28, 1989 AS INSTRUMENT NO 89-225546,OFFICIAL RECORDS ASSESSOR'S PARCEL NO 024-252-02 PARCEL 2 THAT PORTION OF THE NORTH HALF OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,DESCRIBED AS FOLLOWS BEGINNING AT A POINT IN THE SOUTH LINE OF SAID NORTH HALF THAT IS DISTANT THEREON NORTH 89043'07" EAST 103 28 FEET FROM CENTERLINE OF HUNTINGTON STREET, AS SHOWN ON RECORD OF SURVEY NO 81-1151, FILED 1N BOOK 103, PAGES 28 AND 29 OF RECORDS OF SURVEY IN THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING ON A NON-TANGENT 2355 00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHWESTERLY, A RADIAL TO SAID POINT BEARS NORTH 31056'15" EAST, THENCE NORTHWESTERLY 5 94 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0008'40" TO THE BEGINNING OF A 32 00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHERLY, THENCE WESTERLY 41 11 CLTA Preliminary Report Form—Modified(11/17/06) Page 3 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT1 r EXHIBIT A (Continued) FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 73036'25" TO SAID SOUTH LINE, THENCE NORTH 89043'07"EAST 43 24 FEET ALONG SAID SOUTH LINE TO THE POINT OF BEGINNING PARCEL 3 REAL PROPERTY RIGHTS AS CONTAINED IN THAT CERTAIN DOCUMENT ENTITLED "LICENSE AGREEMENT TO PROVIDE LANDSCAPING AND OTHER IMPROVEMENTS IN THE PUBLIC RIGHT-OF-WAY" EXECUTED BY AND BETWEEN THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION OF THE STATE OF CALIFORNIA, THE WATERFRONT HOTEL, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY AND MAYER FINANCIAL, L P, A CALIFORNIA LIMITED PARTNERSHIP DATED FEBRUARY 20, 2001 AND RECORDED APRIL 18, 2001 AS INSTRUMENT NO 20010232765 AND ASSIGNED BY "ASSIGNMENT OF LICENSE AGREEMENT TO PROVIDE LANDSCAPING AND OTHER IMPROVEMENTS IN THE PUBLIC RIGHT OF WAY"AND RECORDED AUGUST 30,2006 AS INSTRUMENT NO 2006000582102,BOTH OF OFFICIAL RECORDS OF ORANGE COUNTY,CALIFORNIA, SUBJECT TO THE TERMS,COVENANTS AND CONDITIONS CONTAINED THEREIN PARCEL 4 A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AND PARKING PURPOSES AS DISCLOSED IN THAT CERTAIN DOCUMENT ENTITLED "WATERFRONT PARKING EASEMENT AGREEMENT", DATED AUGUST 29, 2006, EXECUTED BY AND BETWEEN MAYER FINANCIAL, L P, A CALIFORNIA LIMITED PARTNERSHIP AND THE WATERFRONT HOTEL, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY AND RECORDED AUGUST 30, 2006 AS INSTRUMENT NO 2006000582103, OF OFFICIAL RECORDS OF SAID COUNTY PARCEL A LOT 2 OF TRACT NO 15535, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 790, PAGES 44 THROUGH 50 INCLUSIVE, OF MISCELLANEOUS MAPS, AND A TRACT MAP CERTIFICATE OF CORRECTION RECORDED JUNE 6, 2003 AS INSTRUMENT NO 03-659669,OFFICIAL RECORDS,IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY PARCEL B A NON-EXCLUSIVE RECIPROCAL FIRE LANE ACCESS EASEMENT AGREEMENT RECORDED SEPTEMBER 1, 1995 AS INSTRUMENT NO 95-384750 AND ASSIGNED AUGUST 1, 1997 AS INSTRUMENT NO 97-367563 OFFICIAL RECORDS PARCEL C A NON-EXCLUSIVE REVOCABLE LICENSE TO UTILIZE THAT CERTAIN AREA DEFINED AS"OVERCROSSING IMPROVEMENT AREA" AND"GRANT COAST RESORT IMPROVEMENT AREA" IN THAT CERTAIN "LICENSE AGREEMENT TO PROVIDE LANDSCAPING AND OTHER IMPROVEMENTS IN THE PUBLIC RIGHT-OF-WAY" ("AGREEMENT") RECORDED APRIL 18, 2001 AS INSTRUMENT NO 20010232765 AND ASSIGNMENT RECORDED AUGUST 30,2006 AS INSTRUMENT NO 06-582102 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, AND DELINEATED ON EXHIBIT "F" ATTACHED THERETO, FOR THE INSTALLATION, MAINTENANCE, REPAIR AND REPLACEMENT OF LANDSCAPING AND OTHER IMPROVEMENTS, AS SAID LICENSE IS SET FORTH IN PARAGRAPH 2 OF THE AGREEMENT Page 4 CLTA Preliminary Report Form—Modified(11/17/06) PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CTI EXHIBIT A (Continued) PARCEL D A NON-EXCLUSIVE PARKING EASEMENT AGREEMENT RECORDED AUGUST 30, 2006 AS INSTRUMENT NO 2006-582104,OFFICIAL RECORDS ASSESSOR'S PARCEL NO 024-252-01 n CLTA Preliminary Report Form—Modified(11/17/06) Page 5 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CTI EXCEPTIONS AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A Property taxes,which are a lien not yet due and payable, including any assessments collected with taxes to be levied for the fiscal year 2015-2016 B There were no taxes levied for the fiscal year 2014-2015 as the property was vested in a public entity C A Notice of Proposed Boundaries of the City of Huntington Beach Community Facilities District No 200-1 (Grand Coast Resort) Recorded June 26,2000,as Instrument No 20000038289,of Official Records Reference is hereby made to said document for full particulars D Any liens or other assessments, bonds, or special district liens including without limitation, Community Facility Districts,that arise by reason of any local, City,Municipal or County Project or Special District E The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3 5 (commencing with Section 75)or Part 2, Chapter 3, Articles 3 and 4,respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy 1 Water rights,claims or title to water,whether or not disclosed by the public records 2 The ownership of said Land does not include rights of access to or from the street,highway,or freeway abutting said Land,such rights having been relinquished by said map/plat I Affects The Northwesterly and Southwesterly Imes of said land, except at approved driveway locations Affects Parcels 1 and 2 3 An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein as disclosed by the document Entitled Memorandum of Lease Lessor The Redevelopment Agency of the City of Huntington Beach,a public agency Lessee Waterfront Construction No 1,a California limited partnership Recording Date April 28, 1989 Recording No 89-225546,Official Records The present ownership of the leasehold created by said lease and other matters affecting the interest of the lessee are not shown herein Affects Parcel's 1 and 2 4 Easement(s)for the purpose(s)shown below and rights incidental thereto,as granted in a document Granted to Southern California Edison Company Purpose Public utilities Recording Date January 2, 1990 Recording No 90-001191,of Official Records Affects As set forth in said document CLTA Preliminary Report Form—Modified(11/17/06) Page 6 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT1 EXCEPTIONS (Continued) 5 Easement(s)for the purpose(s)shown below and rights incidental thereto,as granted in a document Granted to The City of Huntington Beach,a Municipal corporation Purpose Water meter purposes Recording Date December 24, 1990 Recording No 90-671427,of Official Records Affects As set forth in said document 6 Matters contained in that certain document Entitled Reciprocal Fire Lane Access Easement Agreement Dated August 30, 1995 Executed by The Redevelopment Agency of the city of Huntington Beach, a public body, corporate and politic ("Agency"), Robert L Mayer, as Trustee of the Robert L Mayer Trust of 1982,dated June 22, 1982,as amended("Mayer Trust"),and Waterfront Construction#1, a California limited partnership Recording Date September 1, 1995 Recording No 95-0384750,of Official Records Reference is hereby made to said document for full particulars Matters contained in that certain document Entitled Assignment and Assumption of Easements Dated July 30, 1997 Executed by Waterfront Construction #1, a California Limited Partnership and the Waterfront Hotel, LLC,a California Limited Liability Company Recording Date August 1, 1997 Recording No 19970367563,of Official Records Reference is hereby made to said document for full particulars Matters contained in that certain document Entitled Easement Agreement(Reaffirmation) Dated August 29,2006 Executed by The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic, The Waterfront Hotel, LLC, a California Limited Liability Company and Mayer Financial,L P,a California limited partnership Recording Date August 30,2006 Recording No 2006000582101,of Official Records Reference is hereby made to said document for full particulars CLTA Preliminary Report Form—Modified(11/17/06) Page 7 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT 1 EXCEPTIONS (Continued) 7 Matters contained in that certain document Entitled Amended and Restated Development Agreement Dated September 21, 1998 Executed by City of Huntington Beach and Mayer Financial, LTD, a California limited partnership, and The Waterfront Hotel,LLC,a California limited liability company Recording Date October 21, 1998 Recording No 1998-0711512,of Official Records Reference is hereby made to said document for full particulars and Re-Recording Date December 7, 1998 and Re-Recording No 98-838602,of Official Records 8 An unrecorded Amended and Restated Disposition and Development Agreement adopted by the Agency on September 14, 1998 executed by and between the Redevelopment Agency of the City of Huntington Beach, Mayer Financial LTD, a California limited partnership and The Waterfront Hotel, LLC, a California limited liability company,upon the terms, covenants,conditions and restrictions therein provided,as disclosed by the Amended and Restated Development Agreement recorded December 7, 1998 as Instrument No 19980838602, Official Records Reference is hereby made to said document for full particulars Matters contained in that certain document entitled "Estoppel Agreement Regarding Development Agreement and Property Agreements" dated May 15,2004,executed by and between City of Huntington Beach,PCH Beach Resort, LLC, a California limited liability company, PCH Resort Holding, LLC, a Delaware limited liability company, GMAC Commercial Mortgage Bank, a Utah Industrial bank, GMAC Commercial Mortgage Corporation, a California corporation recorded October 15,2004,Instrument No 2004000934786,of Official Records Reference is hereby made to said document for full particulars 9 Easement(s)for the purpose(s) shown below and rights incidental thereto as delineated or as offered for dedication, on the map of said tract Purpose Pedestrian access Affects As shown on said Tract Map 15535 10 The fact that the ownership of said land does not include rights of access to or from the street,highway, or freeway abutting said land,such rights having been relinquished by the map of said Tract Affects Pacific Coast Highway, Beach Boulevard, Twin Dolphin Drive and Pacific View Avenue except at locations approved by the traffic engineer 11 An unrecorded lease with certain terms, covenants, conditions and provisions set forth therein as disclosed by the document Entitled Memorandum of Interim Short-Term Lease and Parking Easement Agreement Lessor The Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic Lessee The Waterfront Hotel,LLC,a California limited liability company Recording Date 'April 19, 1999 Recording No 19990285625,Official Records The present ownership of the leasehold created by said lease and other matters affecting the interest of the lessee are not shown herein CLTA Preliminary Report Form—Modified(11/17/06) Page 8 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT I EXCEPTIONS (Continued) and Recording Date April 07,2000 and Recording No 20000179415,Official Records 12 Matters contained in that certain document entitled "Memorandum of Interim Short-Term Lease and Parking Easement Agreement" dated March 16, 1999,executed by and between The Redevelopment Agency of The City of Huntington Beach, a public body corporate and politic, and The Waterfront Hotel, LLC, a California Limited Liability Company recorded April 7, 2000, Instrument No 20000179415, of Official Records, which document, among other things, contains or provides for In the event that the Lease expires or terminates for certain reasons described in the Lease, the Parking Easement Agreement shall become operative and shall burden the Site, as the servient tenement, in favor and for the benefit of certain real property in the City of Huntington Beach, County of Orange, State of California, adjacent to the Site which is more particularly described on Exhibit B therein (the "Waterfront Hilton Parcel")Reference is hereby made to said document for full particulars 13 Matters contained in that certain document Entitled License Agreement to Provide Landscaping and Other Improvements in the Public Right- Of-Way Dated February 20,2001 Executed by The City of Huntington Beach, a municipal corporation of the State of California, The Waterfront Hotel,LLC,a California limited liability company and Mayer Financial,L P, a California limited partnership Recording Date April 18,2001 Recording No 2001-0232765,Official Records Reference is hereby made to said document for full,particulars Matters contained in an Assignment of License Agreement to provide Landscaping and other Improvements in the public right of way,recorded August 30,2006 as Instrument No 2006000582102,Official Records 14 Matters contained in that certain document Entitled Estoppel Agreement Regarding Ground Lease Dated July 27,2006 Executed by The Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, The Waterfront Hotel, LLC, a California Limited Liability Company and Capmark Finance Inc,a California corporation (formerly known as GMAC Commercial Mortgage Corporation Recording Date July 27,2006 Recording No 2006000503301,of Official Records Reference is hereby made to said document for full particulars 15 Matters contained in that certain document Entitled Estoppel Agreement Regarding Development Agreement Dated July 27,2006 Executed by The City of Huntington Beach, a public body, corporate and politic, The Waterfront Hotel, LLC, a California Limited Liability Company and Capmark Finance Inc, a California corporation(formerly known as GMAC Commercial Mortgage Corporation Recording Date July 27,2006 Recording No 2006000503302,of Official Records Reference is hereby made to said document for full particulars CLTA Preliminary Report Form—Modified(11/17/06) Page 9 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CT1 REQUIREMENTS SECTION 1 The requirement that this company be furnished proper regulatory statutes authorizing this transaction and appropriate documentation indicating who may execute on behalf of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach 2 Unrecorded matters which may be disclosed by an Owner's Affidavit or Declaration A form of the Owner's Affidavit/Declaration is attached to this Preliminary Report/Commitment This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction Your prompt attention to this requirement will help avoid delays in the closing of this transaction Thank you The Company reserves the right to add additional items or make further requirements after review of the requested Affidavit/Declaration END OF REQUIREMENTS PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CTI INFORMATIONAL NOTES SECTION 1 None of the items shown in this report will cause the Company to decline to attach CLTA Endorsement Form 100 to an Extended Coverage Loan Policy,when issued 2 The Company is not aware of any matters which would cause it to decline to attach CLTA Endorsement Form 1 l6 indicating that there is located on said Land Commercial properties, known as 21100 Pacific Coast Highway - Hilton Fee,located within the city of Huntington Beach,Califorma,,to an Extended Coverage Loan Policy 3 Note The policy of title insurance will include an arbitration provision The Company or the insured may demand arbitration 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 Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage 4 Note The only conveyance(s) affecting said Land, which recorded within 24 months of the date of this report, are as follows Grantor The City of Huntington Beach,a California Municipal Corporation Grantee The Successor Agency to the Redevelopment Agency of the City of Huntington Beach Recording Date December 20,2012 Recording No 2012000789960,Official Records 5 Note The current owner does NOT qualify for the$20 00 discount pursuant to the coordinated stipulated judgments entered in actions filed by both the Attorney General and private class action plaintiffs,for the herein described Land END OF INFORMATIONAL NOTES Curtis TapLn(MA)/en0 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CTi FIDELITY NATIONAL FINANCIAL PRIVACY NOTICE Fidelity National Financial, Inc and its majority-owned Cookies From time to time, FNF or other third parties may subsidiary companies providing real estate- and loan-related send a "cookie" to your computer A cookie is a small piece of services (collectively, "FNF", "our" or "we") respect and are data that is sent to your Internet browser from a web server and committed to protecting your privacy This Privacy Notice lets stored on your computer's hard drive and that can be re-sent to you know how and for what purposes your Personal Information the serving website on subsequent visits A cookie, by itself, (as defined herein) is being collected, 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voluntarily elect to utilize, we do not share any of Under California's "Shine the Light" law, California residents the Personal Information that you provide to us with any of the who provide certain personally identifiable information in websites to which the Websrte links, although we may share connection with obtaining products or services for personal, aggregate, non-Personal Information with those other third family or household use are entitled to request and obtain from parties Please check with those websites in order to determine us once a calendar year information about the customer their privacy policies and your rights under them information we shared, if any, with other businesses for their European Union Users own direct marketing uses If applicable,this information would If you are a citizen of the European Union, please note that we include the categories of customer information and the names may transfer your Personal Information outside the European and addresses of those businesses with which we shared Union for use for any of the purposes described in this Privacy customer information for the immediately prior calendar year Notice By providing FNF with your Personal Information, you (e g, requests made in 2015 will receive information regarding consent to both our collection and such transfer of your Personal 2014 sharing activities) Information in accordance with this Privacy Notice To obtain this information on behalf of FNF, please send an Choices With Your Personal Information email message to privacy@fnf com with "Request for California Whether you submit Personal Information to FNF is entirely up Privacy Information" in the subject line and in the body of your to you You may decide not to submit Personal Information, in message We will provide the requested information to you at which case FNF may not be able to provide certain services or your email address in response products to you Please be aware that not all information sharing is covered by the You may choose to prevent FNF from disclosing or using your "Shine the Light" requirements and only information on covered Personal Information under certain circumstances ("opt out") sharing will be included in our response You may opt out of any disclosure or use of your Personal Additionally, because we may collect your Personal Information Information for purposes that are incompatible with the from time to time, California's Online Privacy Protection Act purpose(s) for which it was originally collected or for which you requires us to disclose how we respond to"do not track"requests subsequently gave authorization by notifying us by one of the and other similar mechanisms Currently,our policy is that we do methods at the end of this Privacy Notice Furthermore, even not recognize"do not track" requests from Internet browsers and where your Personal Information is to be disclosed and used in similar devices accordance with the stated purposes in this Privacy Notice, you may elect to opt out of such disclosure to and use by a third party No Representations or Warranties that is not acting as an agent of FNF As described above, there By providing this Privacy Notice, Fidelity National Financial, are some uses from which you cannot opt-out Inc does not make any representations or warranties whatsoever Please note that opting out of the disclosure and use of your concerning any products or services provided to you by its Personal Information as a prospective employee may prevent you majority-owned subsidiaries In addition, you also expressly from being hired as an employee by FNF to the extent that agree that your use of the Websrte is at your own risk Any provision of your Personal Information is required to apply for an services provided to you by Fidelity National Financial, Inc open position and/or the Websrte are provided "as is" and "as available" for your use, without representations or warranties of any kind, If FNF collects Personal Information from you,such information either express or implied, unless such warranties are legally will not be disclosed or used by FNF for purposes that are incapable of exclusion Fidelity National Financial, Inc makes incompatible with the purpose(s) for which it was originally no representations or warranties that any services provided to collected or for which you disclosure and use you by it or the Websrte, or any services offered in connection You may opt out of online behavioral advertising by following with the Websrte are or will remain uninterrupted or error-free, the instructions set forth above under the above section that defects will be corrected, or that the web pages on or "Additional Ways That Information Is Collected Through the accessed through the Websrte, or the servers used in connection Websrte,"subsection"Third Party Opt Out" with the Websrte, are or will remain free from any viruses, worms, time bombs, drop dead devices, Trojan horses or other Access and Correction harmful components Any liability of Fidelity National Financial, To access your Personal Information in the possession of FNF Inc and your exclusive remedy with respect to the use of any and correct inaccuracies of that information in our records,please product or service provided by Fidelity National Financial, Inc Privacy Notice Effective January 6,2015 PRELIMINARY REPORT Fidelity National Title Company Your Reference Order No 997-23057599--CTI including on or accessed through the Website, will be the re- If you have additional questions or comments,please let us know performance of such service found to be inadequate by sending your comments or requests to Your Consent To This Privacy Notice Fidelity National Financial,Inc By submitting Personal Information to FNF, you consent to the 601 Riverside Avenue collection and use of information by us as specified above or as Jacksonville,Florida 32204 we otherwise see fit, in compliance with this Privacy Notice, Attn Chief Privacy Officer unless you inform us otherwise by means of the procedure (888)934-3354 identified below If we decide to change this Privacy Notice, we privacy@fnf com will make an effort to post those changes on the Website Each Copyright © 2015 Fidelity National Financial, Inc All Rights time we collect information from you following any amendment Reserved of this Privacy Notice will signify your assent to and acceptance of its revised terms for all previously collected information and EFFECTIVE AS OF JANUARY 6,2015 information collected from you in the future We may use comments, information or feedback that you may submit in any manner that we may choose without notice or compensation to you Privacy Notice Effective January 6,2015 Notice of Available Discounts Pursuant to Section 2355 3 in Title 10 of the California Code of Regulations Fidelity National Financial, Inc and its subsidiaries ("FNF")must deliver a notice of each discount available under our current rate filing along with the delivery of escrow instructions,a preliminary report or commitment Please be aware that the provision of this notice does not constitute a waiver of the consumer's right to be charged the field rate As such,your transaction may not qualify for the below discounts You are encouraged to discuss the applicability of one or more of the below discounts with a Company representative These discounts are generally described below, consult the rate manual for a full description of the terms, conditions and requirements for each discount These discounts only apply to transaction involving services rendered by the FNF Family of Companies This notice only applies to transactions involving property improved with a one-to-four family residential dwelling FNF Underwntten Title Company FNF Underwriter FNTC-Fidelity National Title Company FNTIC-Fidelity National Title Insurance Company FNTCCA—Fidelity National Title Company of California Available Discounts CREDIT FOR PRELIMINARY REPORTS AND/OR COMMITMENTS ON SUBSEQUENT POLICIES(FNTIC) Where no major change in the title has occurred since the issuance of the original report or commitment,the order may be reopened within 12 or 36 months and all or a portion of the charge previously paid for the report or commitment may be credited on a subsequent policy charge DISASTER LOANS(FNTIC) The charge for a lender's Policy(Standard or Extended coverage)covering the financing or refinancing by an owner of record,within 24 months of the date of a declaration of a disaster area by the government of the United States or the State of California on any land located in said area,which was partially or totally destroyed in the disaster,will be 50%of the appropriate title insurance rate CHURCHES OR CHARITABLE NON-PROFIT ORGANIZATIONS(FNTIC) On properties used as a church or for charitable purposes within the scope of the normal activities of such entities, provided said charge is normally the church's obligation the charge for an owner's policy shall be 50%to 70%of the appropriate title insurance rate, depending on the type of coverage selected The charge for a lender's policy shall be 40%to 50%of the appropriate title insurance rate,depending on the type of coverage selected OWNER'S DECLARATION The undersigned hereby declares as follows 1 (Fill in the applicable paragraph and strike the other) a Declarant("Owner")is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CT1 for full legal description(the"Land") b Declarant is the of ("Owner"),which is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CT1 for full legal description(the"Land") 2 (Fill in the applicable paragraph and strike the other) a During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever b During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with upon the Land in the approximate total sum of$ but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Fidelity National Title Company against any and all claims arising therefrom 3 Owner has not previously conveyed the Land, is not a debtor in bankruptcy(and if a partnership,the general partner thereof is not a debtor in bankruptcy), and has not received notice of any pending court action affecting the title to the Land 4 Except as shown in the above-referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records 5 The Land is currently in use as , occupy/occupies the Land, and the following are all of the leases or other occupancy rights affecting the Land 6 There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements,claims of easement,or boundary disputes that affect the Land 7 There are no outstanding options to purchase or rights of first refusal affecting the Land This declaration is made with the intention that Fidelity National Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on at Signature CA Discount Notice Effective Date 12/02/2014 Attachment One(Revised 06-05-14) CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY—1990(04-08-14) 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'fees or expenses which arise by reason of 1 (a) Any law,ordinance or governmental regulation(including but not limited to building or zoning laws,ordinances,or regulations) restricting,regulating,prohibiting or relating(i)the occupancy, use, or enjoyment of the land, (u)the character, dimensions or location of any improvement now or hereafter erected on the land,(ni)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 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) whether or not recorded in the public records at Date of Policy, but 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 insured mortgage or for the estate or interest insured by this policy 4 Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with the applicable doing business laws of the state in which the land is situated 5 Invalidity or unenforceability of the hen of the insured mortgage,or claim thereof,which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law 6 Any claim, which arises out of the transaction vesting in the insured the estate of interest insured by this policy or the transaction creating the interest of the insured lender,by reason of the operation of federal bankruptcy,state insolvency or similar creditors'rights laws EXCEPTIONS FROM COVERAGE—SCHEDULE B,PART I 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 Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records Proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records 2 Any facts,rights,interests,or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof 3 Easements,liens or encumbrances,or claims thereof,not shown by the public records 4 Discrepancies,conflicts in boundary Imes,shortage in area,encroachments,or any other facts which a correct survey would disclose, and which are not shown by the public records 5 (a) Unpatented mining claims, (b)reservations or exceptions in patents or in Acts authorizing the issuance thereof, (c)water rights, claims or title to water,whether or not the matters excepted under(a),(b)or(c)are shown by the public records 6 Any lien or right to a hen for services,labor or material not shown by the public records CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE(12-02-13) ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE EXCLUSIONS In addition to the Exceptions in Schedule B,You are not insured against loss,costs,attorneys'fees,and expenses resulting from 1 Governmental police power,and the existence or violation of those portions of any law or government regulation concerning a building, b zoning, ©California Land Title Association All rights reserved The use of this Form is restricted to CLTA subscribers in good standing as of the date of use All other uses are prohibited Reprinted under license or express permission from the California Land Title Association CLTA PRELIMINARY REPORT FORM,Attachment One(Revised 06-05-14) c land use, d improvements on the Land, e land division,and f environmental protection This Exclusion does not limit the coverage described in Covered Risk 8 a, 14, 15, 16, 18, 19,20,23 or 27 2 The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes This Exclusion does not limit the coverage described in Covered Risk 14 or 15 3 The right to take the Land by condemning it This Exclusion does not limit the coverage described in Covered Risk 17 4 Risks a that are created,allowed,or agreed to by You,whether or not they are recorded in the Public Records, b that are Known to You at the Policy Date,but not to Us,unless they are recorded in the Public Records at the Policy Date, c that result in no loss to You,or d that first occur after the Policy Date-this does not limit the coverage described in Covered Risk 7,8 e,25,26,27 or 28 5 Failure to pay value for Your Title 6 Lack of a right a to any land outside the area specifically described and referred to in paragraph 3 of Schedule A,and b in streets,alleys,or waterways that touch the Land This Exclusion does not limit the coverage described in Covered Risk 11 or 21 7 The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency,or similar creditors'rights laws 8 Contamination,explosion,fire,flooding,vibration,fracturing,earthquake,or subsidence 9 Negligence by a person or an Entity exercising a right to extract or develop minerals,water,or any other substances LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows • For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A The deductible amounts and maximum dollar limits shown on Schedule A are as follows Our Maximum Dollar Your Deductible Amount Limit of Liability 1 00%of Policy Amount Shown in Schedule A or$2,500 00 Covered Risk 16 (whichever is less) / $10,000 00 1 00%of Policy Amount Shown in Schedule A or$5,000 00 Covered Risk 18 (whichever is less) $25,000 00 1 00%of Policy Amount Shown in Schedule A or$5,000 00 Covered Risk 19 (whichever is less) $25,000 00 1 00%of Policy Amount Shown in Schedule A or$2,500 00 Covered Risk 21 (whichever is less) $5,000 00 2006 ALTA LOAN POLICY(06-17-06) 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'fees,or expenses that arise by reason of 1 (a) Any law,ordinance, permit,or governmental regulation(including those relating to building and zoning)restricting,regulating, prohibiting,or relating to (i) the occupancy,use,or enjoyment of the Land, (u) the character,dimensions,or location of any improvement erected on the Land, (w) the subdivision of land,or (►v) environmental protection, or the effect of any violation of these laws, ordinances, or governmental regulations This Exclusion I(a) does not modify or limit the coverage provided under Covered Risk 5 (b) Any governmental police power This Exclusion 1(b)does not modify or limit the coverage provided under Covered Risk 6 2 Rights of eminent domain This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8 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, ©California Land Title Association All rights reserved The use of this Form is restricted to CLTA subscribers in good standing as of the date of use All other uses are prohibited Reprinted under license or express permission from the California Land Title Association CLTA PRELIMINARY REPORT FORM,Attachment One(Revised 06-05-14) (d) attaching or created subsequent to Date of Policy(however,this does not modify or limit the coverage provided under Covered Risk 11, 13 or 14),or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage 4 Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing- business laws of the state where the Land is situated 5 Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-m-lending law 6 Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage,is (a) a fraudulent conveyance or fraudulent transfer,or (b) a preferential transfer for any reason not stated in Covered Risk 13(b)of this policy 7 Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b) The above policy form may be issued to afford either Standard Coverage or Extended Coverage In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage EXCEPTIONS FROM COVERAGE Except as provided in Schedule B - Part II, this policy does not insure against loss or damage, and the Company will not pay costs, attorneys'fees or expenses,that arise by reason of PART I The above policy form may be issued to afford either Standard Coverage or Extended Coverage In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage 1 (a)Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records,(b)proceedings by a public agency that may result in taxes or assessments,or notices of such proceedings,whether or not shown by the records of such agency or by the Public Records 2 Any facts,rights, interests,or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land 3 Easements,Dens or encumbrances,or claims thereof,not shown by the Public Records 4 Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records 5 (a)Unpatented mining claims, (b)reservations or exceptions in patents or in Acts authorizing the issuance thereof, (c)water rights, claims or title to water,whether or not the matters excepted under(a),(b),or(c)are shown by the Public Records 6 Any lien or right to a lien for services,labor or material not shown by the Public Records PART II In addition to the matters set forth in Part I of this Schedule,the Title is subject to the following matters,and the Company insures against loss or damage sustained in the event that they are not subordinate to the lien of the Insured Mortgage 2006 ALTA OWNER'S POLICY(06-17-06) 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'fees,or expenses that arise by reason of I (a) Any law,ordinance,permit,or governmental regulation(including those relating to building and zoning)restricting,regulating, prohibiting,or relating to (i) the occupancy,use,or enjoyment of the Land, (ii) the character,dimensions,or location of any improvement erected on the Land, (in) the subdivision of land,or (iv) environmental protection, or the effect of any violation of these laws, ordinances, or governmental regulations This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5 (b) Any governmental police power This Exclusion 1(b)does not modify or limit the coverage provided under Covered Risk 6 2 Rights of eminent domain This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8 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(however,this does not modify or limit the coverage provided under Covered Risk 9 and 10),or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title ©California Land Title Association All rights reserved, The use of this Form is restricted to CLTA subscribers in good standing as of the date of use All other uses are prohibited Reprinted under license or express permission from the California Land Title Association CLTA PRELIMINARY REPORT FORM,Attachment One(Revised 06-05-14) 4 Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A,is (a) a fraudulent conveyance or fraudulent transfer,or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy 5 Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A The above policy form may be issued to afford either Standard Coverage or Extended Coverage In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage,and the Company will not pay costs,attorneys' fees or expenses, that arise by reason of The above policy form may be issued to afford either Standard Coverage or Extended Coverage In addition to the above Exclusions from Coverage,the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage 1 (a)Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records,(b)proceedings by a public agency that may result in taxes or assessments,or notices of such proceedings,whether or not shown by the records of such agency or by the Public Records 2 Any facts, rights, interests,or claims that are not shown in the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land 3 Easements,liens or encumbrances,or claims thereof,not shown by the Public Records 4 Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and that are not shown by the Public Records 5 (a)Unpatented mining claims, (b)reservations or exceptions in patents or in Acts authorizing the issuance thereof, (c)water rights, claims or title to water,whether or not the matters excepted under(a),(b),or(c)are shown by the Public Records 6 Any lien or right to a lien for services,labor or material not shown by the Public Records 7 Variable exceptions such as taxes,easements,CC&R's,etc shown here ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY(12-02-13) 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' fees or expenses which arise by reason of 1 (a) Any law,ordinance,permit,or governmental regulation(including those relating to building and zoning)restricting,regulating, prohibiting,or relating to (i) the occupancy,use,or enjoyment of the Land, (n) the character,dimensions,or location of any improvement erected on the Land, (in) the subdivision of land,or (iv) environmental protection, or the effect of any violation of these laws,ordinances, or governmental regulations This Exclusion ](a) does not modify or limit the coverage provided under Covered Risk 5,6, 13(c), 13(d), 14 or 16 (b) Any governmental police power This Exclusion l(b)does not modify or limit the coverage provided under Covered Risk 5,6, 13(c), 13(d), 14 or 16 2 Rights of eminent domain This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8 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(however,this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19,20,21,22,23,24,27 or 28),or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage 4 Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing- business laws of the state where the Land is situated 5 Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury,or any consumer credit protection or truth-in-lending law This Exclusion does not modify or hmrt the coverage provided in Covered Risk 26 6 Any claim of invalidity,unenforceability or lack of priority of the hen of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy This Exclusion does not modify or limit the coverage provided in Covered Risk 11 7 Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy This Exclusion does not modify or hmrt the coverage provided in Covered Risk i 1(b)or 25 8 The failure of the residential structure,or any portion of it,to have been constructed before,on or after Date of Policy in accordance with applicable building codes This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6 ©California Land Title Association All rights reserved The use of this Form is restricted to CLTA subscribers in good standing as of the date of use All other uses are prohibited Reprinted under license or express permission from the California Land Title Association CLTA PRELIMINARY REPORT FORM,Attachment One(Revised 06-05-14) 9 Any claim, by reason of the operation of federal bankruptcy, state insolvency,or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage,is (a) a fraudulent conveyance or fraudulent transfer,or (b) a preferential transfer for any reason not stated in Covered Risk 27(b)of this policy 10 Contamination,explosion,fire,flooding,vibration,fracturing,earthquake,or subsidence 11 Negligence by a person or an Entity exercising a right to extract or develop minerals,water,or any other substances ©California Land Title Association All rights reserved The use of this Form is restricted to CLTA subscribers in good standing as of the date of use All other uses are prohibited Reprinted under license or express permission from the California Land Title Association � C\j a ' _ ■Lu 2 a )§k �-o kn\ jd§ � $ � ƒ.�■ � �£ � § $\ %k! � ■ §)% ct ® ~Q ! co - ~ k 2 Lu { a In m 2 k ~ B� � §§ kk - =` k - 1�) i . 2� 7 2\ k 2Nk 713 3 2�| @p9� OWNER'S DECLARATION The undersigned hereby declares as follows I (Fill in the applicable paragraph and strike the other) a Declarant("Owner") is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CTI for full legal description(the"Land") b Declarant is the of ("Owner"),which is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CTI for full legal description(the"Land") 2 (Fill in the applicable paragraph and strike the other) a During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever b During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with upon the Land in the approximate total sum of$ but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Fidelity National Title Company against any and all claims arising therefrom 3 Owner has not previously conveyed the Land, is not a debtor in bankruptcy(and if a partnership,the general partner thereof is not a debtor in bankruptcy), and has not received notice of any pending court action affecting the title to the Land 4 Except as shown in the above-referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records 5 The Land is currently in use as , occupy/occupies the Land, and the following are all of the leases or other occupancy rights affecting the Land 6 There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements,claims of easement,or boundary disputes that affect the Land 7 There are no outstanding options to purchase or rights of first refusal affecting the Land i This declaration is made with the intention that Fidelity National Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein I declare under penalty of per]ury that the foregoing is true and correct and that this declaration was executed on _ at Signature MISCO220 doc—Owner's Declaration(Rev 02/03/14) OWNER'S DECLARATION The undersigned hereby declares as follows 1 (Fill in the applicable paragraph and strike the other) a Declarant("Owner") is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CT1 for full legal description(the"Land") b Declarant is the of ("Owner"),which is the owner or lessee,as the case may be,of certain premises located at further described as follows See Preliminary Report/Commitment No 23057599-997-MAT-CT1 for full legal description(the"Land") 2 (Fill in the applicable paragraph and strike the other) a During the period of six months immediately preceding the date of this declaration no work has been done, no surveys or architectural or engineering plans have been prepared, and no materials have been furnished in connection with the erection, equipment, repair, protection or removal of any building or other structure on the Land or in connection with the improvement of the Land in any manner whatsoever b During the period of six months immediately preceding the date of this declaration certain work has been done and materials furnished in connection with upon the Land in the approximate total sum of$ , but no work whatever remains to be done and no materials remain to be furnished to complete the construction in full compliance with the plans and specifications, nor are there any unpaid bills incurred for labor and materials used in making such improvements or repairs upon the Land, or for the services of architects, surveyors or engineers, except as follows Owner, by the undersigned Declarant, agrees to and does hereby indemnify and hold harmless Fidelity National Title Company against any and all claims arising therefrom 3 Owner has not previously conveyed the Land, is not a debtor in bankruptcy(and if a partnership,the general partner thereof is not a debtor in bankruptcy), and has not received notice of any pending court action affecting the title to the Land 4 Except as shown in the above-referenced Preliminary Report/Commitment, there are no unpaid or unsatisfied mortgages, deeds of trust, Uniform Commercial Code financing statements, claims of lien, special assessments, or taxes that constitute a lien against the Land or that affect the Land but have not been recorded in the public records 5 The Land is currently in use as , occupy/occupies the Land, and the following are all of the leases or other occupancy rights affecting the Land 6 There are no other persons or entities that assert an ownership interest in the Land, nor are there unrecorded easements,claims of easement,or boundary disputes that affect the Land 7 There are no outstanding options to purchase or rights of first refusal affecting the Land This declaration is made with the intention that Fidelity National Title Company (the "Company") and its policy issuing agents will rely upon it in issuing their title insurance policies and endorsements Owner, by the undersigned Declarant, agrees to indemnify the Company against loss or damage (including attorneys fees, expenses, and costs) incurred by the Company as a result of any untrue statement made herein I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed on _ at Signature MISCO220 doe—Owner's Declaration(Rev 02/03/14) Recorded In Official Records, Orange County Hugh Nguyen, Clerk-Recorder 73.00 FIDELITY NATIONAL TITLE Co. III I I III III III III II IIII I IIIII II II II * $ R 0 0 0 8 1 4 6 2 6 0 $ 201600005743012:22 pm 02110116 OFFICIAL BUSINESS 48 401 G02 10 04 3084.40 3084.40 20.00 20.00 27.00 0.00 0.00 0.00 t ' s RECORDING REQUESTED BY: WHEN RECORDED MAIL TO AND SEND ; TAX STATEMENTS TO The Waterfront Hotel, LLC c/o The Mayer Corporation I 8951 Research Drive ; Irvine, CA 92618-4237 Attention: Robert L Mayer, Jr. SPACE ABOVE THIS LINE FOR RECORDING USE k DOCUMENTARY TRANSFER TAX $ O ' 3 � f X Computed on the consideration or value of property conveyed,OR Signature of Declarant or Agent determining tax Computed on the consideration or value less liens or encumbrances remaining at time of sale. s 1 GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, herein called "Grantor," hereby grants to THE WATERFRONT HOTEL, LLC, a California limited liability company, herein called "Grantee," that certain real ' property located in the City of Huntington Beach, County of Orange, State of California (the "Property"), more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference,in accordance with and subject to the covenants,conditions E and restrictions set forth in this Grant Deed. 1 Grantor and Grantee agree as follows: 1. Use of Property. Grantee covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any portion thereof, that during construction of the Hotel Addition and thereafter for a period of thirty(30)years from the date of this Grant Deed, Grantee, such successors, and such assignees shall not use or suffer to be used the Property other than as a hotel without the City of Huntington Beach's prior written consent. s 6151015900.0074 9285134 3 AM16 , f i i . t 1 2 4 Uses normally incidental to a hotel use, including without limitation a restaurant, cocktail lounge, cleaning and laundry service, banquet and catering facilities, meeting rooms, gift shop, spa, resort retail, magazine stand, barber or beauty shop, travel agency, airline ticket office, automobile rental operation,and recreational facilities shall also be permitted. f ' Not by way of limitation of the foregoing, the hotel to be operated by Grantee on the Property shall be operated as a "first-class hotel." As used herein, the term "first-class hotel" shall mean that, subject to any limitations imposed by the physical structure and configuration of the improvements on the Property as initially constructed or changed or altered as permitted by the City of Huntington Beach, the improvements on the Property shall be maintained and the hotel shall be operated in a manner at least comparable to the standard of quality for full service hotels operated and maintained from time to time by any of the following hotel compames- ', Hilton, Sheraton, Marriott, Hyatt, or any subsidiaries thereof The designation "first-class" is intended to reflect the highest standard of hotel operation other than deluxe, luxury, or resort hotels It is recognized that not all services and facilities available in one first-class hotel will F necessarily be provided by all first-class hotels, but that the composite of service and facilities provided by each first-class hotel will cause the same to be deemed to constitute a first-class f hotel. The City of Huntington Beach and/or Grantee may request additions or deletions to such list, subject to the reasonable approval of the other;provided,however, in no event shall there be fewer than four(4) hotel companies on such list at any one time 2. Obligation to Refrain from Discrimination. There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy,tenure,or enjoyment of the Property, and Grantee itself or any person claiming under " or through it shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, Lessees,subtenants, sublessees, or vendees of the Property. 3 Form of Nondiscrimination and Non-segregation Clauses. Grantee shall refrain from restricting the rental, sale, or tease of the Property, or any portion thereof, on the basis of sex, marital status, race, color, creed, religion, ancestry, or national origin of any person. All such deeds, leases, or contracts pertaining to the foregoing matters shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses: (a) In deeds_ "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed.The foregoing covenants shall run with the land." i t i f i Z 615/015800-0074 9295134 3 AM16 -2- 1 s ' z ` (b) In leases: "The lessee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions. i That there shall be no discrimination against or segregation of any person or group of jpersons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased nor shall the a lessee itself, or any person claiming under or through it, establish or permit any such practice or 3 practices of discrimination or segregation with reference to the selection, location, number, use, i or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased" (c) In contracts: "There shall be no discrimination against or segregation of, 4 any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, E establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land." r 4. All conditions, covenants and restrictions contained in this Grant Deed shall be 9 covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by the Grantor, its successors and assigns, and the City and its successors and assigns, against the Grantee, its successors and = assigns, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof. I 5. The conditions contained in paragraph (1) of this Grant Deed shall terminate and become null and void thirty (30) years from the date of this Grant Deed The conditions E contained in paragraphs (2) and(3) of this Grant Deed shall remain in effect in perpetuity. 6. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that the Grantor and City shall each be deemed a beneficiary of the agreements and covenants provided hereinabove both for and in its own right and also for the purposes of protecting the interests of the community All covenants without regard to technical classification or designation shall be binding for the benefit of the Grantor and City, and such covenants shall run in favor of the Grantor and City for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor or the City is or remains an owner of any land or interest therein to which such covenants relate. The Grantor and the City shall each have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any actions at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant. 7. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security; provided, however, that any subsequent owner of the Property shall be bound by the covenants, conditions, restrictions, f 615/015800-0074 9295134 3 AM16 _3- 1 r r 1 , s - limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise i 8 None of the terms, covenants, agreements or conditions heretofore agreed upon in writing in other instruments between the parties to this Grant Deed with respect to obligations to be performed, kept or observed by the Grantee or the Grantor in respect to the Property or any part thereof after this i conveyance of the Property shall be deemed to be merged with this Grant.t 9. The covenants contained in this Grant Deed shall be construed as covenants running with the land. [signatures on following page] E € [remainder of page intentionally left blank] 3 9 } V E (rr i .y� E b l 51 V t 580OM74 e 9285134 3 AM16 4- i s I I 4 1 F a 1 Grantor: r SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTIN TON BE f By: Its. Chairperson F ATTEST• By Its: Sec etary 3 0 APPROVED FORM: 9 By- 'IC y Its: ener ounsel f Grantee. THE WATERFRONT HOTEL, LLC, a California limited liability company By. Waterfront Development, Inc., a California corporation, its Manager By: Ro L. ayer, Jr., Chief Executive O i i } A 615/0159OD-0074 9295134 l _ E r z A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. t State of California County of Qn / toll. before me, T�' n— 10 �,yt hit (insert a and title otthe officer) Notary Public, personally appeared S d CsrXWIs who proved to me on the basis of satisfactory evidence to be the person s&whose narneo subscribed to the within instrument and acknowledged to me that he�xecuted the same in etr uthorized capacity ies and that by ` then sxgnature0on the instrument the perso s or the entity upon behalf of which the perso95Actcd, executed the instrument i F certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P L ESPIARU ` WITNESS my hand and o icial seal. commission s 20327SO Notary Pub k-C81NIVNIA oreap County Signature = eat} k i f 1 i I 1 is t c a s F 515101 S$A4-�74 9285134 -2— f€ c Government Code 273617 i I certify under the penalty of perjury that the illegible portion of this document, to which this statement is attached, reads as follows P L ESPARZA Commission#2032750 Notary Public—California ORANGE County VENDOR OR MANUFACTURER NUMBER NNA1 My Comm Expires AUGUST 4, 2017 Place of execution NEWPORT BEACH, CA Fidelity National Title Insurance Company i t i C 8 F A Notary Public or other officer completing this certificate verifies only the identity of the # individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document i State of California ) County of q�� �_ } i z On 1 , before me ° G -5 �the rt name and title of the tsfficer) Notary Public,personally appeared 7R who proved to me on the basis of satisfactory�eviden�cetoperson whose name(s) isle subscribed to the within instrument and acknowledged to me that he/sihey executed the same in hisAwr/thWr authorized capacity(Tss), and that by his/her/their signatures) on the instrument the person(,or the entity upon behalf of which the person(s)acted, executed the instrument ! I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 1UT1LEM: M.YMA1rS WITNESS my hand and official seal. CMwMnM r 2123M "MY PWM-C+Otct tea + Signa Caonnrtt.�G 1120111 f ro 1 t fit t G f C i 615101 5800-W74 � 92951U .3- Government Code 273617 1 certify under the penalty of perjury that the illegible portion of this document, to which this statement is attached, reads as follows KATHLEEN M VALDES Commission#2123838 Notary Public—California ORANGE County VENDOR OR MANUFACTURER NUMBER- NNA1 My Comm Expires AUGUST 16, Z019 Place of execution NEWPORT BEACH, CA 3 Fidelity National Title Insurance Company i r r s 4 t Z e t 4 a i - n 7 EXHIBIT A Legal Description i !A 9 ' That certain real property located in the County of Orange, State of California,more particularly described as follows- Y PARCEL. I LOT I OF TRACT NO 13045, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 628, PAGES 46 AND 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.. 1 PARCEL 2: THAT PORTION OF THE NORTH HALF OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE I1 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTH LINE OF SAID NORTH HALF THAT IS DISTANT THEREON NORTH 89043'07" EAST 103.28 FEET FROM CENTERLINE OF HUNTINGTON STREET, AS SHOWN ON RECORD OF SURVEY NO. 81-1151, FILED IN BOOK 103, PAGES 28 AND 29 OF RECORDS OF SURVEY IN THE OFFICE OF SAID COUNTY RECORDER, SAID POINT BEING ON A NON-TANGENT 2355.00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHWESTERLY, A RADIAL TO SAID POINT BEARS NORTH 31°56'15" EAST, THENCE NORTHWESTERLY 5.94 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 0008'40" TO THE BEGINNING OF A 32.00 FOOT RADIUS CURVE THAT IS CONCAVE SOUTHERLY; THENCE WESTERLY 41.11 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 73°36'25" TO SAID SOUTH LINE, THENCE NORTH 89043'OT' EAST 43 24 FEET ALONG SAID SOUTH LINE TO THE POINT OF BEGINNING. PARCEL 3: � LOT 2 OF TRACT NO. 15535, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 790, PAGES 44 { THROUGH 50 INCLUSIVE, OF MISCELLANEOUS MAPS, AND A TRACT MAP CERTIFICATE OF CORRECTION RECORDED .TUNE 6, 2003 AS INSTRUMENT NO. 03- � 659669, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. Y f f 6 1 5/8 1 580Q-0074 9285134 F EXHIBIT "D" GRANT DEED OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 27383 RECORDING REQUESTED BY WHEN RECORDED MAIL TO AND SEND TAX STATEMENTS TO SPACE ABOVE THIS LINE FOR RECORDING USE GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, herein called "Grantor," hereby grants to THE WATERFRONT HOTEL, LLC, a California limited liability company, herein called "Grantee," that certain real property located in the City of Huntington Beach, County of Orange, State of California (the "Property"), more particularly described in the legal description attached hereto as Exhibit A and incorporated herein by this reference, in accordance with and subject to the covenants, conditions and restrictions set forth in this Grant Deed Grantor and Grantee agree as follows 1 Use of Property Grantee covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property or any portion thereof, that during construction of the Hotel Addition and thereafter for a period of thirty (30) years from the date of this Grant Deed, Grantee, such successors, and such assignees shall not use or suffer to be used the Property other than as a hotel without the City of Huntington Beach's prior written consent Uses normally incidental to a hotel use, including without limitation a restaurant, cocktail lounge, cleaning and laundry service, banquet and catering facilities, meeting rooms, gift shop, spa, resort retail, magazine stand, barber or beauty shop, travel agency, airline ticket office, automobile rental operation, and recreational facilities shall also be permitted Not by way of limitation of the foregoing, the hotel to be operated by Grantee on the Property shall be operated as a "first-class hotel " As used herein, the term "first-class hotel" 12-16.15 V8 EXHIBIT"D" Page 1 of 5 shall mean that, subject to any limitations imposed by the physical structure and configuration of the improvements on the Property as initially constructed or changed or altered as permitted by the City of Huntington Beach, the improvements on the Property shall be maintained and the hotel shall be operated in a manner at least comparable to the standard of quality for full service hotels operated and maintained from time to time by any of the following hotel companies Hilton, Sheraton, Marriott, Hyatt, or any subsidiaries thereof The designation "first-class" is intended to reflect the highest standard of hotel operation other than deluxe, luxury, or resort hotels It is recognized that not all services and facilities available in one first-class hotel will necessarily be provided by all first-class hotels, but that the composite of service and facilities provided by each first-class hotel will cause the same to be deemed to constitute a first-class hotel The City of Huntington Beach and/or Grantee may request additions or deletions to such list, subject to the reasonable approval of the other, provided, however, in no event shall there be fewer than four(4) hotel companies on such list at any one time 2 Obligation to Refrain from Discrimination There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy,tenure, or enjoyment of the Property, and Grantee itself or any person claiming under or through it shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property 3 Form of Nondiscrimination and Non-segregation Clauses Grantee shall refrain from restricting the rental, sale, or lease of the Property, or any portion thereof, on the basis of sex, marital status, race, color, creed, religion, ancestry, or national origin of any person All such deeds, leases, or contracts pertaining to the foregoing matters shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses a In deeds "The grantee herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed The foregoing covenants shall run with the land" b In leases "The lessee covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this lease is made and accepted upon and subject to the following conditions That there shall be no discrimination against or segregation of any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or 12-16-15 V8 EXHIBIT"D" Page 2 of 5 practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land herein leased" c In contracts "There shall be no discrimination against or segregation of, any person or group of persons on account of sex, marital status, race, color, creed, religion, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the land" 4 All conditions, covenants and restrictions contained in this Grant Deed shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by the Grantor, its successors and assigns, and the City and its successors and assigns, against the Grantee, its successors and assigns, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof 5 The conditions contained in paragraph (1) of this Grant Deed shall terminate and become null and void thirty (30) years from the date of this Grant Deed The conditions contained in paragraphs (2) and(3) of this Grant Deed shall remain in effect in perpetuity 6 In amplification and not in restriction of the provisions set forth heremabove, it is intended and agreed that the Grantor and City shall each be deemed a beneficiary of the agreements and covenants provided hereinabove both for and in its own right and also for the purposes of protecting the interests of the community All covenants without regard to technical classification or designation shall be binding for the benefit of the Grantor and City, and such covenants shall run in favor of the Grantor and City for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor or the City is or remains an owner of any land or interest therein to which such covenants relate The Grantor and the City shall each have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any actions at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant 7 No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security, provided, however, that any subsequent owner of the Property shall be bound by the covenants, conditions, restrictions, limitations, and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure,trustee's sale or otherwise 8 None of the terms, covenants, agreements or conditions heretofore agreed upon in writing in other instruments between the parties to this Grant Deed with respect to obligations to 12-16-15 V8 EXHIBIT"D" Page 3 of 5 be performed, kept or observed by the Grantee or the Grantor in respect to the Property or any part thereof after this conveyance of the Property shall be deemed to be merged with this Grant 9 The covenants contained in this Grant Deed shall be construed as covenants running with the land [signatures on following page] [remainder of page intentionally left blank] 12-16-15 V8 EXHIBIT"D" Page 4 of 5 Grantor SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By Its Chairperson ATTEST By Its Secretary APPROVED AS TO FORM By Its General Counsel Grantee THE WATERFRONT HOTEL, LLC By Waterfront Development, Inc , a California corporation, its Managing Member By Robert L Mayer, Jr, President 12-16-15 V8 EXHIBIT"D" Page 5 of 5 i Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder FIDELITY NATIONAL TITLE CO. III I I I II I II I II I I I I I III I I II I III I III 18.00 a * $ R 0 0 0 8 1 4 6 2 5 7 $ Recordmg requested by and retum to 201600005742712:22 pm 02/10/16 48 401 Al2 F13 4 - CITY OF HUNTINGTON BEACH 0.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 Department of Planning&Building 2000 Main Street Huntington Beach, CA 92648 2305+5'i c i 3 , COVENANT TO HOLD PROPERTY AS ONE PARCEL i In consideration of the matters set forth herein, the Huntington Beach Redevelopment Agency Successor Agency("Successor Agency")hereby certifies that it currently is the owner in fee, and The Waterfront Hotel, LLC("Hotel Owner")and Mayer Financial, L.P. ("MFLP")hereby certify 3 that they are currently the lessees of Lot 1 and Parcel C (defined below), respectively, of the property located in the City of Huntington Beach, County of Orange, State of California, 3 described as follows: x Legal Description: Lot 1 of Tract No. 13045, filed in Book 628, Pages 46 and 47 ("Lot 1"), Together with Lot 2 of Tract No. 15535, filed in Book 790, Pages 44 through 50 inclusive ("Parcel C"), both in the office of the Orange County Recorder, State of California. 3 # A.P.Number(s): 024-252-01 and 024-252-02 Street Address: 21100 Pacific Coast Highway and, for the purpose of consolidating the above-described lots in compliance with Section 257.14 of the Huntington Beach Zoning and Subdivision Ordinance; , a and, with the understanding and intent that the burden set forth touches and concerns the land s herein-above described, Successor Agency, Hotel Owner and MFLP do hereby covenant with the City of Huntington Beach ("City") that the above legally described land shall be held as a single parcel and building site, and no portion shall sold, leased, conveyed or otherwise transferred or used as a separate or more than one parcel and building site, without prior written consent of the i City. This Covenant shall run with the land in perpetuity, and shall be binding upon the undersigned owner and lessees and future owners, encumbrancers, and their successors, heirs, and assignees, unless otherwise released by authority of the City. Notwithstanding the foregoing, this Covenant shall automatically terminate and expire if the Interim Short-Term Lease for Parcel C that was entered into by and between the former Redevelopment Agency of the City of Huntington Beach (the "RDA"), as, lessor, and Hotel I Owner, as lessee, on or about March 16, 1999, as assigned to MFLP, expires or terminates without either of the following two events occurring. ( 1) the transfer of the long-term leasehold interest in Parcel C by Successor Agency to Hotel Owner (or approved assignee) pursuant to i { i 162/015800-0074 92288512 AM16 i f that certain Amended and Restated Disposition and Development Agreement entered into by and between the RDA and Mayer Financial, L P dated as of September 14, 1998, as amended or (2) 3 the transfer of fee title to Parcel C by Successor Agency to Hotel Owner(or approved assignee) pursuant to that certain purchase and sale agreement entered into on December 21, 2415, by and between Successor Agency and Hotel Owner (or approved assignee) on or before the closing date set forth therein Upon the request of Successor Agency, Hotel Owner and MFLP agree to cooperate in taking any actions and executing any documents that may be reasonably be required to confirm and memorialize the termination and expiration of this Covenant,if applicable. Dated: This da f y o Fe- I"dot P ,2016 (type name) (sign e) Successor Agency to the Redevelopment Agency of the City of Huntington Beach The Waterfront Hotel, LLC By. Waterfront Development,Inc. t E (By- o L. Mayer,Jr r 4 Mayer Financial,L.P. By: RLM Management,Inc s y- be . Mayer,Jr, Approved for Recording. By Department o lanning and Building Date Approved as to Form. Michael Gates,City Attorney By • 16MIS900-0074 � 9228831 2 AMk6 -2- S I E i j I i i ! A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy,or validity of that document. State of California ) County of Orange ) 1 �� 6 j�Mi On oZ �' OL before m , ( insertpp and title of the officer) Notary Public,personally appeared �.. kky<J� , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are R subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s),or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. - KAMLMW K vALM Ca�del�"0 212UN ! d Nof�rr P9blie-C�aMi Signa C011lp� t8 2019+ i S i 162/015800-0074 922885 1 2 AM]6 -4- i i Government Cade 273617 1 certify under the penalty of perjury that the illegible portion of this document, to which this statement is attached, reads as follows KATHLEEN M VALDES Commission#2123838 Notary Public—California ORANGE County VENDOR DR MANUFACTURER NUMBER NNA1 My Comm Expires AUGUST 16, 2019 r Place of execution NEWPORT BEACH, CA Fidelity National Title Insurance Company i 7 E a 7 i i i r l PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS by and between SUCCESSOR AGENCY TO THE RED VELOPMENT AGENCY OF THE CITY OF HUN INGTON BEACH, a public agency, and r THE WATERFRONT HOTEL, LLC, a California limited liability company i d / 12-16-15 V8 TABLE OF CONTENTS Page 1 Definitions 4 2 Purchase and Sale of Property 6 3 Purchase Price 6 4 Payment of Purchase Price 6 5 Physical and Environmental Condition 6 6 Condition of Title and Grant Deed ! 7 61 Title Report, Permitted Exceptions 7 62 Title Insurance 8 7 Escrow and Conditions 8 71 Opening of Escrow and Escrow Instructions 8 72 Close of Escrow , 9 73 Buyer's Conditions to Close of Escrow 10 74 Seller's Conditions to Close of Escrow 11 75 Cooperation Regarding Conditions 12 76 Failure of Conditions to Close of Escrow 12 8 Closing Costs 12 9 Deliveries to Escrow Holder / 12 91 Deliveries by Seller 12 92 Deliveries by Buyer 13 10 Disbursements and Other Actions by Escrow Holder 13 11 Buyer's Representations and Varranties 13 111 Authority 14 112 No Consents 14 11 3 No Violations ofrA'�greements 14 114 Binding Agreement 14 115 No Violation of Laws 14 116 Brokers . 14 12 Seller's Represent4 tions and Warranties 14 121 Authority 14 122 No Consents 15 123 No Violations of Agreements 15 124 Binding Agreement . . ..... . ....... .. 15 125 Broker 15 12-16-15 VS D -I- Page 126 No Litigation 15 127 Assessments/Improvements 15 128 Bankruptcy 15 129 Compliance 15 12 10 Foreign Person 15 13 General Provisions 16 13 1 Events of Default 16 132 Legal Fees 16 13 3 Brokers and Finders 17 13 4 Notices 17 13 5 Survival / 18 13 6 Successors and Assigns /l 18 13 7 Required Actions of Buyer and Seller l 18 13 8 Entire Agreement I� 18 13 9 Time of Essence / 19 1310 Counterparts 19 1311 Severability 19 1312 Headings 19 1313 Construction 19 13 14 No Waiver 20 13 15 Relationship Between Parties I 20 13 16 Third Party Beneficiaries 20 1317 Estoppels 20 13 18 Indemnity 20 14 Right of Entry 21 141 Grant of Right of Entry 21 142 Insurance 21 143 Liens 21 14 4 Restoration 21 14 5 Compliance With Laws/Permits 22 146 Indemnification 22 14 7 Inspection rr 23 148 Section 14 To Te hate Upon Closing of Consolidated Long-Term Lease 23 EXHIBITS "A-1" LEGAL DESCRIPTION OF THE HILTON PARCEL "A-2" LEGAL DESCRIPTION OF PARCEL C "A-3" DEPICTION OF/THE LAND "B" FORM OF BLANKET ASSIGNMENT AND BILL OF SALE "C" TITLE REPORT "D" GRANT DEED 12-16-15 V8 -11- PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS This Purchase and Sale Agreement and Escrow Instructions ("Agreement") is dated for reference purposes as of .21 , 2015 ("Effective Date"), and is being entered into by and between SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public agency, corporate and politic (alternatively, "Seller" or "Successor Agency"), and THE WATERFRONT HOTEL, LLC, a California limited liability company ("Buyer") Seller and Buyer are sometimes hereinafter individually referred to as a "Party" and collectively as the "Parties " RECITALS: This Agreement is entered into with reference to the following facts A On or about April 28, 1989, the Redevelopment Agency/Of the City of Huntington Beach ("RDA"), as lessor, and Waterfront Construction No 1, a California limited partnership, as lessee, entered into that certain lease (the "Hilton Parcel Lease;) for the lease of that certain real property located in the City of Huntington Beach, County f Orange, State of California, consisting of approximately 3 60 acres of land area, with a street address of 21100 Pacific Coast Highway, bounded by Pacific Coast Highway, Huntington S4-eet, Pacific View Drive, and more particularly described and depicted in Exhibits "A-1" and "A 3" hereto (the "Hilton Parcel") A memorandum of the Hilton Parcel Lease was recorded in the Official Records of the Orange County Recorder on April 28, 1989, as Instrument/No 89-225546 (the "Hilton Parcel Lease Memorandum") On or about July 3, 1997, WateJrfront Construction No 1 and Buyer entered into that certain Lease Assignment and Assumption Agreement that was recorded in the Official Records of the Orange County Recorder on -my 17, 1997, as Instrument No 97-0338159, pursuant to which Waterfront Construction N"o 1 assigned to Buyer and Buyer assumed from Waterfront Construction No 1 all of Waterfront Construction No 1's right, title, and interest in and under the Hilton Parcel Lease (the"Hi'ltori Parcel Lease Memorandum Assignment") B On or about November/5, 1998, the RDA, as lessor, and Buyer, as lessee, entered into that certain Interim Short-Te ase (the "Interim Short-Term Lease") for the lease of that certain real property located in the City of Huntington Beach, County of Orange, State of California, also with a street address of 21100 Pacific Coast Highway, consisting of approximately 3 63 acres of land area, bounded by Pacific Coast Highway, Twin Dolphin Drive, Pacific View Drive, and the/Hilton Parcel, and more particularly described and depicted in Exhibits"A-2" and "A-3" hereto ("Parcel C") A memorandum of the Interim Short-Term Lease dated March 16, 1999, was recorded in the Official Records of the Orange County Recorder on April 19, 1999, as Instrument No 19990285625 and on April 7, 2000, as Instrument No 20000179415 (collectively,the "Interim Short-Term Lease Memorandum") On or about August 29, 2006, Buyer and Mayer Financial, L P , a California limited partnership ("MF"), entered into that certain Assignment of Lease that was recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No 2006000582100, pursuant to which Buyer assigned to MF and MF assumed from Buyer all of Buyer's right, title, and interest in and under the Interim Short-Term Lease (the"Interim Short-Term Lease Memorandum Assignment") 0�12-16-15 4- C The Hilton Parcel and Parcel C are hereinafter collectively referred to as the "Land " The Hilton Parcel Lease provides for the development and operation of a hotel and related improvements (collectively, the "Existing Hotel") on the Hilton Parcel Buyer intends to develop an expansion to the Existing Hotel on the Land (the "Hotel Addition," together with the Existing Hotel the "Expanded Hotel") The Hotel Addition shall mean the additio of approximately one hundred fifty-two (152) net guestrooms, including a minimum of one I ndred twenty-five (125) suites, to the Existing Hotel on the Land, plus an additional ballroom eeting rooms, restaurant, and ancillary facilities, as approved by City prior to the Effectiv Date per Conditional Use Permit No 09-037 or such other improvements as may be approved by City D The RDA was a redevelopment agency in the City of Huntington�Beach ("City"), duly created pursuant to the California Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code (the "Redevelopment Law") E Assembly Bill No XI 26 (2011-2012 1st Ex. Sess) ("AB 26") was signed by the Governor of California on June 28, 2011, making certain changes to the Redevelopment Law and to the California Health and Safety Code ("H&S Code"), including/adding Part 1 8 (commencing with Section 34161) ("Part 1 8") and Part 1 85 (commencing wi{h Section 34170) ("Part 1 85") to Division 24 of the H&S Code F Pursuant to AB 26, as modified by the California Supreme Courts on December 29, 2011, by its decision in California RedevelopmentlAssociation v Matosantos (2011) 53 Cal4t" 231, all California redevelopment agencies Yincluding the RDA, were dissolved on February 1, 2012, and successor agencies were dessgnated and vested with the responsibility of paying, performing, and enforcing the enforceable obligations of the former redevelopment agencies and expeditiously winding down the business and fiscal affairs of the former redevelopment agencies G The City Council of the City elected for the City to serve as the successor agency to the RDA upon the dissolution of the RDA under AB 26 ("Successor Agency") H On June 27, 2012, the,/Legislature passed and the Governor signed Assembly Bill No 1484 ("AB 1484", Chapter 26, Statutes 2012) AB 1484 imposes additional statutory provisions relating to the activities and obligations of successor agencies and to the wind down process of former redevelopment agencies, including the preparation of a Long Range Property Management Plan ("LRPMP') AB 26 and AB 1484, as further amended, are collectively referred to herein as the"Dissolution Act" I H&S Code Section 34179 of the Dissolution Act establishes a seven (7) member local entity with respeceto each successor agency and such entity is titled the "oversight board " The oversight board has been established for the Successor Agency("Oversight Board") J Pursuant to H&S Code Section 34191 5(b) and (c) of the Dissolution Act, within six (6) months after the California Department of Finance ("DOF") issues a Finding of Completion to the Successor Agency, the Successor Agency is obligated to prepare a LRPMP that addresses the disposition and use of certain real properties of the former RDA, which 12-16-15 V8 —2— LRPMP is subject to the review and approval of the Oversight Board and DOF Pursuant to H&S Code Section 34191 3 of the Dissolution Act, once a LRPMP is approved by DOF the LRPMP shall govern and supersede all other provisions of the Dissolution Act relating to the disposition and use of the properties addressed therein K On May 13, 2014, DOF issued its Finding of Completion to the ccessor Agency L Pursuant to the Dissolution Act, the Successor Agency then prepared a proposed LRPMP which included 13 parcels comprising 7 properties, including the /nd that is the subject of this Agreement(as Parcel Nos 6 and 7) (the "Original Proposed LRPMP") M On November 3, 2014, the Successor Agency approved the Original Proposed LRPMP N On November 5, 2014, the Oversight Board adopted its Resolution No 2014-06 approving the Initial Proposed LRPMP and the Successor Agency thereafter submitted the Original Proposed LRPMP to DOF O Subsequently, the Successor Agency received correspondence from DOF requesting that modifications be made to the Original Proposed LRPMP and the Successor Agency prepared an amended LRPMP to address the issues/concerns set forth in DOF's request ("Amended LRPMP") P As noted in the Amended LRPMP, the Successor Agency estimated the current value of the Successor Agency's leased fee interest in the Land at $5,607,950, based on an appraisal prepared by "the highly respected consulting firm of PKF Consulting USA" The Amended LRPMP also noted that the existing Hilton Parcel Lease does not expire until 2088, the lessee (Buyer) has the right to extend the term of the Hilton Parcel Lease and the Interim Short- Term Lease for a new 99-year term if certain conditions are satisfied by January 1, 2016, and the lessee (Buyer) has a right of first refusal if the Successor Agency should sell the Land prior to the end of the (extended) Lease term The Amended LRPMP noted that the Successor Agency was "currently in negotiations with [Buyer] with the goal of selling the fee interest in Parcels 6 and 7" to Buyer, it identified 4 alternative "disposition alternatives" for Parcels 6 and 7, it noted that the alternative of selling Parcels/6 and 7 to Buyer (Alternative 1) "will generate the highest proceeds of the 4 alternatives," and/it stated the Successor Agency's intention to reach agreement with Buyer on the sale transaction/terms and sell Parcels 6 and 7 to Buyer sometime on or before January 1, 2016 Q On March 5, 2015, the Oversight Board adopted its Resolution No 2015-05 approving the Amended LRPMP and the Successor Agency thereafter submitted the Amended LRPMP to DOF R On March 23, 2015, DOF approved the Amended LRPMP (including with respect to the Land), DOF confirmed that, pursuant to H&S Code Section 34191 3 of the Dissolution Act, the approved Amended LRPMP "shall govern, and supersede all other provisions [of the Dissolution Act] relating to, the disposition and use of all the real property assets of the former redevelopment agency," and noted that any Successor Agency actions taken pursuant to the / 12�16-IS va -3- Amended LRPMP which require the Successor Agency to enter into a "new agreement" are subject to Oversight Board approval per H&S Code Section 34181(f), which Oversight Board approval must then be submitted to DOF for review and approval S Subject to the necessity of submitting this Agreement to the Oversight Board and DOF, Seller desires to implement the approved Amended LRPMP by selling the Land and other appurtenant rights relating to the Land (collectively, the "Property") to Buyer and Buyer desires to purchase the Property from Seller, all on the terms and conditions set forth in this Agreement COVENANTS Based upon the foregoing Recitals, which are incorporated into this Agreement by this reference, and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both Parties, Seller and Buyer agree as follows 1 Definitions In addition to the terms defined elsewhere in this Agreement, as used in this Agreement the terms set forth below shall have the following meanings "Agreement" has the meaning set forth in the first paragraph of this Agreement "Authorities" means the various governmental and quasi-governmental bodies and agencies having jurisdiction over the Property, including, without limitation, the City, the County, the State, and federal agencies, courts, special taxing districts, administrative tribunals, and public and private utilities "Blanket Assignment and Bill of Sale" means the written blanket assignment from Seller to Buyer in the form attached hereto as Exhibit B "Buyer" has the meaning set forth in the first paragraph of this Agreement "Buyer's Closing'Conditions" are those conditions to Buyer's obligation to close the Escrow that are set forth in Section 7 3 offtthis Agreement "Buyer's Title Policy" means tli policy of title insurance described in Section 6 of this Agreement "City" means the City of Huntington Beach, California "Closing" or "Close of Escrow" means the conveyance by Seller to Buyer of title of the Property Conveyance of the Property shall occur through the Escrow upon recordation of the Grant Deed "Closing Conditions" mean, collectively, the Buyer's Closing Conditions and the Seller's Closing Conditions "Closing Date" has the meaning set forth in Section 7 2 of this Agreement "Default"means each of the events so designated in Section 13.1 of this Agreement (f6-15D -4- "Effective Date" has the meaning set forth in the introductory paragraph of this Agreement "Escrow" means the above described Escrow to be opened with Escrow Holder or, in the event Escrow Holder ceases to exist or fails or refuses to act as Escrow Holder for the transactions contemplated by this Agreement, any other escrow with an Escrow Holder selected by Buyer which is not affiliated with either party / "Escrow Date" is the date Escrow is opened in accordance with Sec ion 7 1 of this Agreement "Escrow Holder" means Fidelity National Title Insurance Company in an office located in Orange County, California "Existing DDA" has the meaning ascribed to that term in Section 7 2 of this Agreement "Grant Deed" means the deed by which Seller is to convey the Property to Buyer The form of the Grant Deed to be used in this transaction is attached/hereto as Exhibit D, subject to any modifications that may be mutually approved by Seller, Buyer, and Title Company "Hazardous Material" means any substance, matey"idal, or waste which is or becomes regulated by the United States government, the Stat V/Of California, or any local or other governmental authority, including, without limitation, any material, substance, or waste which is (i) defined as a "hazardous waste," "acutely hazardous waste," "restricted hazardous waste," or "extremely hazardous waste" under Sections 25116, 25117 or 25122 7, or listed pursuant to Section 25140 of the California Health and Safet/C' ode, (u) defined as a "hazardous substance" under Section 25316 of the California Health and Safety Code, (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the California Health and Safety Code, (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, (v)petroleum, (vi) asbestos, (vu) a polychlormated biphenyl, (viii) listed under Article 9 or defined/as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as a "hazardous substance"pursuant to Section 311 of the Clean Water Act(33 U S C Section 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act (42 U S C Section 6903), ( xi) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act (42 U S C Section 9601), or/(xu) any other substance, whether in the form of a solid, liquid, gas, or any other form whatsoever, which by any governmental requirements either requires special handling in its use, transportation, generation, collection, storage, treatment or disposal, or is defined as "hazardous"or is harmful to the environment or capable of posing a risk of injury to public health and safety "Hazardous Material Law" means any federal, state, or local law, ordinance, or regulation, any order, demand, or guidance document of any governmental agency or any licenses or permits relating to Hazardous Material "Land" has the meaning ascribed to that term in Recital A and Exhibits "A-I" and "A-2" hereto f12-16-15 V8 -5- 1 "Laws" means all federal, state, and local laws, rules, regulations, ordinances, and codes The term "Laws" includes Hazardous Material Laws "Lender" has the meaning set forth in Section 13 17 of this Agreement "Permitted Exceptions" has the meaning set forth in Section 6 1 of this Agreement "Person" means any natural person or entity, whether an individual, trustee, corporation, partnership, joint stock company, trust, unincorporated association, bank, business association, firm or otherwise "Property" means the Land and all of Seller's right, title and interest in and to all entitlements, easements, rights, mineral rights, oil and gas rights, water, water rights, air rights, development rights and privileges appurtenant thereto and all improvements located thereon, and, in addition, the rights of the declarant under any declaration of covenants, conditions and restrictions recorded against title to the Land, if any, and all items of personal property that may be situated on, in, or under the Land, excluding, however, any recorded/dedications existing as of the Effective Date "Purchase Price" means the purchase price for the Property set forth in Section 3 of this Agreement "Seller" has the meaning set forth in the first paragraph of this Agreement "Seller's Closing Conditions" are those conditions to Seller's obligation to close the Escrow that are set forth in Section 7 4 of this Agreement "Title Company" means Fidelity National STitle Insurance Company in its Newport Beach office or another office located in Orange County, California "Title Report" means that certain Preliminary Report issued by the Title Company with respect to the Property dated as of September 15, 2015 (Order No 997-23057599-CT1) A true and correct copy of the Title Report is attached hereto as Exhibit C 2 Purchase and Sale of Pr Seller agrees to sell the Property to Buyer and Buyer agrees to purchase the Property from Seller, in each case upon the terms and subject to the conditions set forth in this Agree went 3 Purchase Price Buyer's purchase price for the Property shall be the sum of Five Million Six Hundred Seven Thousand Nine Hundred Fifty Dollars ($5,607,950) (the "Purchase Price") 4 Payment of Purchase Price Buyer shall pay the entire Purchase Price through the Escrow by wire transfer of immediately available funds 5 Physical and Environmental Condition Buyer acknowledges that it has been the ground lessee in possession of the Land since April 28, 1989, that it excavated, filled, and graded the Land and constructed the improvements currently situated thereon, that it remediated the Land in conjunction with its development, that it has continuously owned, operated, and maintained the (f] -16-IS s -6- improvements now situated on the Land for over 25 years, that prior to the commencement date of the Hilton Parcel Lease and the Interim Short-Term Lease an affiliated entity of Buyer leased and occupied the Land for many years, that Buyer is thoroughly familiar with the physical and environmental condition of the Land, and that Buyer is not relying upon any information or knowledge of Seller with respect to any of such matters Accordingly, to the maximum extent permitted by law, Seller shall convey the Property to Buyer in a strictly "AS IS, WHERE IS, WITH ALL FAULTS"physical and environmental condition, with no warranty or representation by Seller, express or implied, regarding the presence of uncompacted fill, the condition of the soils, the geology, seismology, hydrology, or other similar matters on, under, orsaffecting the Land, the condition of any buildings or improvements located thereon, the presence or absence of any Hazardous Materials, or the Property's compliance with any applicable Hazardous Material Law It shall be the sole responsibility of Buyer, at Buyer's expense(to investigate and determine the soil conditions of the Property and the suitability of the Property for the development to be constructed by Buyer If the soil conditions of the/Property, or any part thereof, are not in all respects entirely suitable for the use or uses to which the Property will be put, then it is the sole responsibility and obligation of Buyer to take such action as may be necessary to place the Property and the soil conditions thereof ir�/all respects in a condition entirely suitable for the development of the Property, which may include demolition, clearing, or moving buildings, structures, or other improvements, and removal of Hazardous Materials Buyer hereby further waives, releases, acquits, and forever discharges Seller, the City, their respective officers, employees, and agents, and their successors and assigns with respect to any such matters The foregoing shall not be deemed to limit/Buyer's obligations set forth in the Hilton Parcel Lease or the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect)prior to the Closing The provisions of this Section 5 shall survive the Closing Buyer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at/the time of executing the release, which if known by him must have materially affected his settlement with the debtor" As such relates to the matters addressed in this Section 5, Buyer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code 6 Condition of Title and Grant Deed 61 Title Report, Permitted Exceptions Within ten (10) days after the Effective Date, Buyer shall review the Title Report and notify Seller and the Title Company in writing of those exceptions to title identified therein that are disapproved by Buyer, which disapproved exceptions shall include but/not be limited to the following (collectively, the "Disapproved Title Exceptions") (i) the Hilton Parcel Lease Memorandum (Exception #3) and Hilton Parcel Lease Memorandum Assignment identified in Recital A of this Agreement, (ii) the Estoppel Agreement Regarding Ground Lease dated as of July 27, 2006, and recorded in the Official Records of the Orange County Recorder on July 27, 2006, as Instrument No. 2006000503301 (Exception #14), (iii) the Interim Short-Term Lease Memorandum and Interim Short-Term Lease Memorandum 12-16-15 vs -7- Assignments identified in Recital B of this Agreement (Exception #11, 12), (iv) the Reciprocal Fire and Access Easement Agreement dated as of August 30, 1995, and recorded in the O ficial Records of the Orange County Recorder on September 1, 1995, as Document No 95-0 84750, as subsequently assigned by Waterfront Construction No 1 to Buyer pursuant to an Assignment and Assumption of Easements dated July 30, 1997, and recorded in the Official Records of the Orange County Recorder on August 1, 1997, as Instrument No 19970367 63 and as subsequently reaffirmed pursuant to the Easement Agreement(Reaffirmation) dated/as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder 6n August 30, 2006, as Instrument No 2006000582101 (Exception #6), (v) the Waterfront P king Easement Agreement dated as of August 29, 2006, and recorded in the Official Records of the Orange County Recorder on August 30, 2006, as Instrument No 2006000582103 xceptlon #16), and (vi) the Parcel C Parking Easement Agreement dated as of August 29, 200 , and recorded in the Official Records of the Orange County Recorder on August 30, 2006,� as Instrument No 2006000582104 (Exception #17) The following exceptions to title/�ire hereby approved by Buyer (collectively, the "Permitted Exceptions") (i) non-delinquen�Property taxes, possessory interest taxes, and assessments (to be paid by Buyer at the Cloyng in accordance with this Agreement), (u) any pre-printed standard exceptions and exclusions in the Title Company's Title Report, (in) matters affecting the condition of title to the Property created by or with the written consent of Buyer, and (iv) the exceptions to title identified in the Title Report that are not among the Disapproved Exceptions listed by Buyer in accordance/wrth the preceding sentence The Title Policy to be issued at the Closing shall be issued by Title Company subject only to the Permitted Exceptions / 62 Title Insurance At the Closing, Title Company shall issue to Buyer a standard form CLTA Owner's Policy of Title Insurance with liability equal to the Purchase Pace, showing fee simple title to the Property vested in Buyer subject only to the Permitted Exceptions (the "Buyer's Title Policy") Buyer may elect by delivery of written notice to the Title Company to obtain additional coverage, to upgrade to an/ALTA Extended Coverage Owner's Policy of Title Insurance, and/or to obtain non-standard endorsements to the Buyer's Title Policy,provided Buyer's inability to obtain such additional or extended coverage and/or non-standard endorsements or its delay in obtaining the/same shall not constitute a failure of the Closing Condition set forth in Section 7 3(d) of this Agreement or a justification or excuse for delaying the Closing Seller shall be responsible for paying one hundred percent (100%) of the cost of Buyer's Title Policy, provided that/Buyer shall be responsible to pay one hundred percent (100%) of the marginal additiona�6ost, if any, to obtain such additional or extended coverage (including without limitation any survey that may be conducted) and/or non-standard endorsements requested by Buyer 7 Escrow and Conditions 7 1 Opening .of Escrow and Escrow Instructions Buyer and Seller promptly shall cause Escrow to be /pened for the consummation of the transaction contemplated by this Agreement by delivering a fully executed copy of this Agreement to the Escrow Holder This Agreement shall constitute instructions to the Escrow Holder with respect to such transaction The Escrow Holder immediately shall notify Buyer and Seller of the Escrow Date Buyer and Seller shall execute such additional escrow instructions as reasonably may be required to consummate the transaction contemplated by this Agreement and as Buyer and Seller may 12-16-15 V8 -8- approve, which approval shall not be unreasonably withheld To the extent such additional escrow instructions conflict with any provisions of this Agreement, the provisio s of this Agreement shall control unless the Parties each separately initial such change 72 Close of Escrow Subject to the next two paragraphs below d subject to satisfaction (or waiver by the benefited Party or Parties) or all of the condition to closing set forth in Sections 7 3 and 7 4, the Close of Escrow for conveyance of the Property shall occur on or before February 29, 2016 (the "Closing Date") In this regard, prior to 4e Effective Date Buyer has advised Seller that Buyer desires to coordinate the Closing hereunder with the closing of a construction loan for a major expansion of the existing hotel located�on the Property (the "Construction Loan") and, at Buyer's request, Seller agrees to cooperate(with Buyer to provide for a concurrent closing of this transaction with the closing of the Construction Loan, provided, however, that in no event shall any delay or failure by Buyer to causeythe Construction Loan to close constitute the failure of a condition to Buyer's obligation to close this transaction or delay the Closing Date hereunder In the event the condition set forth in Sections 7 3(a)and 7 4(a) below has not been satisfied in time for the Close of Escrow to occur on or/before February 29, 2016, this Agreement shall remain in full force and effect and the outside Closing Date provided for in the preceding paragraph shall be extended from February 29, 20416, to the date that is two (2) weeks after the Parties receive notice that the condition set forth in Sections 7 3(a) and 7 4(a) has been satisfied or May 1, 2016, whichever date is earlier, profv�ided that the City Manager/Executive Director of Seller shall have the authority on behalf of Seller to further extend the May 1, 2016, deadline for a reasonable additional period or periods of time if he/she determines there is a reasonable likelihood that the condition set forth in Sections 7 3(a) and 7 4(a) will be satisfied within such additional time period(s) Notwithstanding the foregoing, nothing set forth in this Agreement is intended or shall be interpreted to prohibit or prevent Buyer from proceeding under Article 200 of the Amended and Restated Disposition and Development Agreement dated as of September 14, 1998, as previously amended by the First Implementation Agreement dated as of May 15, 2000, the Second Implementation Agreement dated as of February 5, 2001, the Third Implementation Agreement dated as of October 20, 2008, the Fourth Implementation Agreement dated as of October 18, 2010, and the Fifth Implementation Areement dated as of May 16, 2011 (collectively, the "Existing DDA"), to satisfy the conditions to closing for conveyance to Buyer of a long-term consolidated leasehold interest in the Hilton Parcel and Parcel C and execution and delivery of such long-term lease in the form set forth as Exhibit No 1 to the Fifth Implementation Agreement (herein,the"Consoli ated Long-Term Lease") Nothing herein is intended to or shall be interpreted to modify or to change in any way any provision of the Existing DDA, including, without limitation, Section 203 3 of the Existing DDA and the outside date which all conditions precedent for conveyance of the leasehold interest in Parcel C mu� be satisfied (which is December 31, 2016, as of the date of this Agreement) 73 Buyer's Conditions to Close of Escrow Notwithstanding any other provision set forth in this Agreement to the contrary, Buyer's obligation to close the Escrow under this 12-16-15 vs -9- Agreement is subject to the satisfaction of each of the following conditions or Buyer's express written waiver (in its sole and absolute discretion) of any unsatisfied condition(s), in either case not later than the Closing Date (a) Oversight Board and DOF Approval The Oversight Board shall have adopted a resolution at a properly noticed and agendized public meeting approving Seller's sale of the Property to Buyer pursuant to this Agreement, a copy of the Oversight Bodrd's resolution shall have been delivered electronically to DOF in accordance with H&S Code Section 34179(h), and DOF shall either have formally approved the transaction contemplated by this Agreement or the time shall have elapsed for DOF to request a review of the transaction contemplated by this Agreement as provided in H&S Code Section 34'179(h) without DOF having requested such a review Seller shall exercise commercially reasonable diligence to cause the Oversight Board meeting at which such matters will be considered to be properly noticed, agendized, and held as soon as practicable after the Effective Date and, assuming the Oversight Board adopts a resolution approving this Agreement, Seller shall deliver a copy of such resolution electronically to DOF in accordance with H&S/Code Section 34179(h) within two (2) business days thereafter When DOF approves the transaction contemplated by this Agreement (either after review or by lapse of the time within which to request review, whichever first occurs), Seller shall promptly notify Buyer and the Escrow Holder and the date upon which Seller so notifies Buyer and the Escrow Holder shall be deemed the date on which the condition set forth in this Section 7 3(a)has been satisfied (b) Seller's Representations Sellers s representations and warranties set forth in Section 12 shall be true and correct as of the Closing (c) Seller's Deliveries and Default Seller shall have delivered to Buyer and Escrow Holder all documents required to be delivered by Seller to Buyer and Escrow Holder, respectively, pursuant to the terms of this A/greement, Seller shall not be in Default under the terms of this Agreement, and no event shall have occurred which would constitute a Default by Seller under the terms of this Agreement but for the requirement that notice be given or time elapse or both (d) Title At th�Closmg the Title Company shall be committed to issuing to Buyer a standard form CLTA Owner's Policy of Title Insurance with coverage in the amount of the Purchase Price and subject to only the Permitted Exceptions (e) Assi nment On or before the Closing, Seller shall have executed the Blanket Assignment and Bill of Sale with respect to the Property and delivered the same to the Escrow Holder The foregoing conditions are solely for the benefit of Buyer and may be waived only by Buyer Buyer shall at all times have the right to waive any condition, which waiver or waivers must be m`writing to be effective Neither the waiver by Buyer of any condition nor the satisfaction of any condition shall relieve Seller of any liability or obligation as respects any representation, warranty or covenant of Seller under this Agreement unless Buyer shall so agree in writing 12-16-15 V8 -1 0- 74 Seller's Conditions to Close of Escrow Notwithstanding any other provisiorrset forth in this Agreement to the contrary, Seller's obligation to close the Escrow and�j� this Agreement is subject to the satisfaction of each of the following conditions or Seller'sf/8xpress written waiver (in its sole and absolute discretion) of any unsatisfied conditions, in either case not later than the Closing Date (a) Oversight Board and DOF Approval The Oversight Board shall have adopted a resolution at a properly noticed and agendized public meeting approvidg Seller's sale of the Property to Buyer pursuant to this Agreement, a copy of the Oversight Board's resolution shall have been delivered electronically to DOF in accordance with H&S Code/Section 34179(h), and DOF shall either have formally approved the transaction contemplated by this Agreement or the time shall have elapsed for DOF to request a review of the transaction'contemplated by this Agreement as provided in H&S Code Section 34179(h) without DOF having requested such a review When DOF approves the transaction contemplated by this/Agreement (either after review or by lapse of the time within which to request review, whyichever first occurs), Seller shall promptly notify Buyer and the Escrow Holder and the date -pon which Seller so notifies Buyer and the Escrow Holder shall be deemed the date on whic the condition set forth in this Section 7 4(a) has been satisfied (b) Buyer's Representations Buyer's representations and warranties set forth in Section 11 shall be true and correct as of the Closing (c) Buyer's Deliveries and Default. Buyer shall have delivered to Seller and Escrow Holder all funds and documents required t�q/be delivered by Buyer to Seller and Escrow Holder, respectively, pursuant to the terms of this Agreement, Buyer shall not be in Default under the terms of this Agreement, and no event shall have occurred which would constitute a Default by Buyer under the terms of this Agr ement but for the requirement that notice be given or time elapse or both (d) Construction Loan Buyer shall have delivered to Seller, in a form reasonably approved by the Successo Agency Executive Director, a copy of all construction loan documents (e g , notes, trust deeds, indentures, loan agreements, etc ) necessary to assure closing and complete funding for/the development and construction of the Hotel Addition If construction financing is insufficient to assure complete funding for the development and construction of the Hotel Ad tion, Buyer shall have delivered to Seller, in a form reasonably approved by the Successor �gency Executive Director, evidence of sources of capital sufficient to demonstrate that Buyer`has or will have sufficient equity capital to cover the excess, if any, of the cost of developmentand construction over the financing authorized by mortgage loans The foregoing conditions are solely for the benefit of Seller and may be waived only by Seller Seller shall at all times have the right to waive any condition, which waiver or waivers must be in/writing to be effective Neither the waiver by Seller of any condition nor the satisfaction of a4 condition shall relieve Buyer of any liability or obligation as respects any representation, warranty or covenant of Buyer under this Agreement unless Seller shall so agree in writing 12-16-15 V8 -11- 1 75 Cooperation Regarding Conditions Each Party shall exercise commercially reasonable diligence in an effort to satisfy the Closing Conditions as expeditiously as possible after the Effective Date Each Party shall cooperate with the other Party, at the writt n request of the other Party, in the other Party's efforts with respect to the satisfaction of the conditions, provided, however, that the reasonable costs of such cooperation shall be borne by the Party making the request 76 Failure of Conditions to Close of Escrow If one or more of the Closing Conditions set forth in Sections 7 3 or 7 4 is not satisfied prior to the outside Closing Date provided for in Section 7 2 and the benefitted Party or Parties is not willing to waive the unsatisfied condition(s), then (1) this Agreement, the Escrow, and the rights and obligations of Buyer and Seller shall terminate, except as otherwise expressly prodded herein, (2) Buyer shall pay one hundred percent (100%) of Escrow Holder's and Title Company's cancellation charges, (3) Escrow Holder is instructed promptly to return to Seller and Buyerall funds and documents deposited by them, respectively, into Escrow which are held by Escrow Holder on the date of such termination, and (4) the Existing DDA, Hilton Parcel Lease, and Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) and all other agreements related thereto shall continue in full force and effect in accordance with the terms thereof This Section 7 6 is not intended to limit or restrict the remedies of a Party if the failure of one or more of the Closing Conditions is due to a Default by the other Party Nothing herein is intended to or shall be interpreted to modify or to change in any way any provision of the Existing DDA, the Hilton Parcel Lease, or the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) 8 Closing Costs. If the Escrow closes, (a) Seller shall pay one hundred percent (100%) of the premium for a CLTA Standard Owner's Policy of title with coverage in an amount equal to the Purchase Price, (b) documentary transfer taxes and recording fees shall be paid by Seller, (c) the escrow fees of Escrow Holder shall be/paid one-half by Buyer and one-half by Seller, (d) any difference in premium cost between a/CLTA Standard Owner's Policy with coverage in the amount of the Purchase Price and Buyer's Title Policy shall be paid by Buyer, (e) any property taxes, possessory interest taxes, andssessments required to close the Escrow shall be paid by Buyer, and (0 all other costs to close the Escrow shall be allocated between Seller and Buyer in accordance with customary practice for similar transactions in the County of Orange 9 Deliveries to Escrow Holder 91 Deliveries bwSeller Prior to the Closing(unless otherwise provided), Seller shall deposit the following documents into Escrow (a) a Grant Deed for the Property consistent with this Agreement and in ubstantially the form attached hereto as Exhibit "D" duly executed by Seller, notarized and yin recordable form, (b) four (4) copies of the Blanket Assignment and Bill of Sale for the Property duly executed by Seller, (c) such proof of Seller's authority to enter into this Agreement and to perform the transaction contemplated by this Agreement as reasonably may be requiredAby the Title Company, (d) a certification as to the non-foreign status of Seller for federal tax/withholding purposes, completed and executed by Seller, if required by the Escrow Holder, (e) a Withholding Exemption Certificate on California Franchise Tax Board Form 593-C, duly executed by Seller, if required by the Escrow Holder, and (f) such other 12-16-IS V8 -12- documents as may Escrow Holder may require Seller to execute that are consistent with this Agreement and required to enable Escrow Holder to perform its duties hereunder 92 Deliveries by Bum Prior to the Closing (unless otherwise provided), Buyer shall deposit the following funds and documents into Escrow (a) the entire Purchase Price,(b) a Grant Deed for the Property consistent with this Agreement and in substantially the form attached hereto as Exhibit"D" duly executed by Buyer, notarized and in recordable form; (c) the escrow and title fees and charges and other closing costs required hereunder, (d) all funds required to fully perform Buyer's monetary obligations to Seller that are set forth/in the Hilton Parcel Lease and the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) prorated to the Closing, including without limitation the payment of any Ground Rent owing through the Closing (including an estimate of the Participation Rent that will be due through the Closing Date based upon Buyer's and Seller's mutually agreed upon good faith estimate of Adjusted Room Revenue through that date, and with an appropriate adjustment of any underpayment or overpayment to be made between Seller and/Buyer outside of Escrow within ninety (90) days after the Closing, as a matter with which the/Escrow Holder shall not be concerned), (d) such proof of Buyer's authority to enter into this Agreement and to perform the transaction contemplated by this Agreement as reasonably may be required by the Title Company, and (e) such other documents as may Escrow Holder may require Buyer to execute that are consistent with this Agreement and required to enable Escrow Holder to perform its duties hereunder 10 Disbursements and Other Actions by Escrow Holder Upon the Closing, Escrow Holder promptly shall undertake all of the following (a) disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price, Buyer's portion of the escrow and title fees and charges and closing costs, and any payments owing by Buyer to Seller pursuant to the Hilton Parcel Lease and/or the Interim Short-Term Lease/(or the Consolidated Long-Term Lease if to effect) for the period ending on the Closing Date as set forth in Section 9 2, deduct all items chargeable to the account of Seller under Section 8, pay the amounts owing to the Persons entitled to payment, and disburse the remaining balance of the funds to Seller, or in accordance with Seller's written instructions, promptly upon the Close of Escrow, (b) cause the Grant Deed (with documentary transfer tax information to be affixed after recording), and any other documents which Buyer or the Parties may direct to be recorded in the Official Records of the Orange County Recorder in the order/directed by the Parties, (c) prepare and deliver to each of Buyer and Seller two conformed copies of the Grant Deed, (d) cause the Title Company to issue the Buyer's Title Policy to Buyer, (�e) deliver two executed copies of the Blanket Assignment and Bill of Sale for the Property toy"each of Buyer and Seller, (f) deliver to Buyer any proof of authority deposited into Escrow by Seller pursuant to Section 9 1, (g) deliver to Buyer the certifications deposited into Escrow by Seller pursuant to Section 9 1(d) and (e), and (g) deliver to Seller any proof of authority deposited into Escrow by Buyer pursuant to Section 9 2 11 Buyer's Representations and Warranties Buyer represents and warrants to Seller as follows, provided that all such representations and warranties are limited to Buyer's actual current knowledge, without any duty of inquiry or investigation, and all of such representations and warranties shall survive the close of Escrow for the limited period of one (1) year and, except to the extent Seller has filed an action against Buyer within said time period alleging Buyer has committed a Default with respect to a specific representation or warranty, all of such 12-16-15 VS -13- representations and warranties as to which such an action is not timely filed shall automatically expire on the first anniversary of the Closing 11 1 Authority Buyer is a limited liability company duly organized and validly existing under the laws of the State of California Buyer has the right, power, legal cadpacity, and authority to enter into and perform its obligations under this Agreement Those individuals executing this Agreement on behalf of Buyer have the right, power, legal capacityt,and authority to enter into this Agreement on behalf of Buyer and to execute all other documents and perform all other acts as may be necessary to perform all of Buyer's obligations under this Agreement 112 No Consents No approval or consent not previously obtained by any Person is necessary in connection with the execution of this Agreement by Buyer or the performance of Buyer's obligations under this Agreement 11 3 No Violations of Agreements Neither this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement, or instrument to which Buyer is a party or by whichfrt may be bound 114 Binding Agreement The Agreement cons t tutes the legally valid and binding obligation of Buyer and is enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws, or by equitable principles relating to or limrtingithe rights of creditors generally 11 5 No Violation of Laws The consummation of the transaction contemplated by this Agreement does not violate any Law 11 6 Brokers No broker, salesperson, or finder has been engaged by Buyer in connection with the transactions contemplated by this Agreement Each of the foregoing representations and warranties shall be, and Buyer shall cause them to be,true in all respects on and as of the date of this Agreement and on and as of the close of Escrow as though made at that time 12 Seller's Representations3'and Warranties Seller represents and warrants to Buyer as follows, provided that all such representations and warranties are limited to Seller's actual current knowledge, without any duty of inquiry or investigation, and all of such representations and warranties shall survive the close of Escrow for the limited period of one (1) year and, except to the extent Buyer has filed an action against Seller within said time period alleging Seller has committed a Default with respect to a specific representation or warranty, all of such representations and warranties as to which such an action is not timely filed shall automatically expire on the first anniversary of the Closing 121 Authority Seller is a public agency duly organized and validly existing under the laws of the State of California Subject to Section 12 2, Seller has the right, power, legal capacity, and authority to enter into and perform its obligations under this Agreement and those individuals executing this Agreement on behalf of Seller have the right, power, legal capacity, and authority to enter into this Agreement on behalf of Seller and to execute all other documents 2-16-IS vs -14- I and perform all other acts as may be necessary to perform all of Seller's obligations under this Agreement 122 No Consents With the exception of the need to obtain approval from the Oversight Board and, potentially, DOF, as referred to in Sections 7 3(a) and 7 4(a), nApproval or consent not previously obtained by any Person is necessary in connection with the execution of this Agreement by Seller or the performance of Seller's obligations under this Agreement 123 No Violations of Agreements Subject to Section 12 2, neither` this Agreement nor anything provided to be done under this Agreement violates or shall violate any contract, document, understanding, agreement, or instrument to which Seller is a party or by which it may be bound 124 Binding Agreement Subject to Section 12 2, this Agreement constitutes the legally valid and binding obligation of Seller and is enforceable against Seller in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws, or by equitable principles relating to or limiting the rights of creditors generally 125 Broker No broker, salesperson or finder has been engaged by Seller in connection with the transactions contemplated by this Agreement 126 No Lit ag tion There is no suit, action", claim, proceeding or protest pending or threatened which may adversely affect the Property 127 Assessments/Improvements There is no proposed or existing public improvement which may involve any charge being levied or assessed upon the Property or any plan, study, or effort by any of the Authorities or any other Person or any existing or proposed Law which may adversely affect the Property 128 Bankruptcy Neither Setter nor any entity or person that owns or controls or comprises Seller is bankrupt or insolve t under any applicable Federal or state standard, has filed for protection or relief under any applicable bankruptcy or creditor protection statute, or has been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute Seller is not/entering into the transaction described in this Agreement intending to defraud any creditor or to prefer the rights of one creditor to any other Seller and Buyer have negotiated this Agreement at arm's length and the consideration paid represents fair value for the assets being tr 'sferred 129 Compliance Seller has not received any written requests to modify or terminate any use of the Property fromany of the Authorities 12 10 Foreign�Person Seller is not a "foreign person" within the meaning of Internal Revenue Code Section 1445 and Seller will deliver the Non-Foreign Affidavit through Escrow if requested to do so by Escrow Holder Seller represents and warrants that Seller is not subject to the withholding requirements under Section 18662 of the California Revenue and Taxation Code and Seller will deliver the California Withholding Certificate through Escrow if requested to do so by Escrow Holder 12-16-IS V -15- Each of the foregoing representations and warranties shall be, and Seller shall cause them to be, true in all respects on and as of the date of this Agreement and on and as of the Closing as though made at that time 13 General Provisions 13 1 Events of Default The occurrence of any one or more of the following events before the Closing shall constitute a Default by a Party under this Agreement (a) Failure to Perform The failure of the Party to perform any material obligation set forth in this Agreement on its part to be performed if the failure should continue uncured for a period of fifteen (15) days, including without limitation a failure to deposit funds or documents or take other actions required to timely close the Escrow provided for herein, after written notice is given to the Party of the occurrence of the failure, provided, however, that the failure shall not be deemed to have occurred if the failure is of a nature that reasonably requires more than fifteen (15) days to cure, is capable of being cured fully before the outside Closing Date set forth In Section 7 2 and the Party is proceeding continuously and diligently to cure the failure and does cure the failure before said outside Closing Date, further provided, however, in no event shall any cure period run or be permitted to run past said outside Closing Date, (b) Representation/Warranty Any representation or warranty made by the Party in this Agreement proves to have been materiallyincorrect as of the date made or as of any other date on which the representation and warranty was required by the terms of this Agreement to be true (provided that in order for any breach of a�Buyer or Seller representation and warranty to constitute a Default hereunder, Seller's or Buyer's claim with respect thereto must have been filed within the time set forth in Sections 11 and 2, as applicable), y (c) Relief of Debtors Institution by the Party of proceedings under any law of the United States or of any state or foreign jurisdiction for the relief of debtors, (d) General Assignment A general assignment by the Party for the benefit of creditors or the filing of a voluntary petition in bankruptcy, (e) Bankruptcy The filing of an involuntary petition in bankruptcy against the party by the creditors of such Party, such petition remaining undischarged for a period of thirty (30) days after the date the same was filed (or to the date of Close of Escrow if such date occurs before the expiration of the thirty (30) day period), (f) Receiver The appointment of a receiver to take possession of any of the assets of the Party, such receivership remaining undischarged for a period of thirty (30) days from the date of its appointment (or to the date of Close of Escrow if such date occurs before the expiration of the thirty QO) day period), or (g) Attachment The attachment, execution, or other judicial seizure of the Party's interest in this Agreement (and, in the case of Seller, in all or any portion of the Property), such attachment, execution or seizure being in an amount not less than Fifty Thousand Dollars ($50,000) and remaining undismissed or undischarged for a period of thirty (30) days 12-16-IS �g -16- after the levy of the attachment, execution, or seizure (or to the date of close of Escrow if such date occurs before the expiration of the thirty(30)day period) 132 Legal In the event of the bringing of any action or suit by either Party against the other Party by reason of any breach of any of the covenants, conditions/greements, or provisions on the part of the other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to have and recover of and/from the other Party all costs and expenses of suit, including reasonable attorneys' fees (or, in the event of any action to enforce this Agreement, the prevailing Party shall be entitled to recofiver all of its costs and expenses of the action, including reasonable attorney's fees), as determined by a court of competent J urisdiction /� 133 Brokers and Finders Each Party represents to the other Party that it has not had any contact, dealings, or communications with a broker or finder in connection with the transaction contemplated by this Agreement or any other person who can claim a right to a commission or finder's fee. If any other broker, finder, or other person makes a claim for a commission or finder's fee based upon any contract, dealing, or communication with a Party, then such Party shall indemnify, defend, and hold the other Part harmless from and against all damages, claims, losses, and expenses, including attorneys' fees, arising out of the broker's, finder's, or other person's claim 134 Notices All notices or other communication provided for under this Agreement shall be in writing, and shall be delivered personally,/via facsimile or email, by reputable overnight mail equivalent carrier, or sent by registered or certified mail, return receipt requested, postage prepaid, addressed to the person to receive' such notice or communication at the following address and shall be effective upon delive�ry�or refusal to accept delivery- To Seller Successor Agency to°the Redevelopment Agency of the City of Huntington Beach 2000 Main Street/ Huntington Beach, CA 92648 Attn Execute e Director Fred Wilson Phone 714-536-5575 Fax: 714- Email fred wilsongsurfcity-hb org (with copies to City of Huntington Beach 2000�Main Street Huntington Beach, CA 92648 Attn City Attorney Michael Gates Email Michael ag tes(2surfci , -hb org 12-16-15 VS -17- To Buyer The Waterfront Hotel, LLC c/o The Robert Mayer Corporation 8951 Research Drive Irvine, CA 92618 Attn RJ Mayer Phone. 949-8091 Fax 949-988-7176 Email rigmayercorp com (with copies to Rutan & Tucker, LLP 611 Anton Boulevard, 141h Floor Costa Mesa, CA 92626 Jeffrey M Oderman, Esq Phone 714-641-5100 Fax 714-546-9035 Email yodermangrutan com Notice of change of address shall be given by written nonce in the manner set forth in this Section Notices sent by email and facsimile shall be deemed received upon successful transmission 13 5 Survival All of the covenants, representations, and warranties set forth in this Agreement shall survive the Closing, delivery of the Grant Deed, provided that Buyer's and Seller's representations and warranties shall terminate at the time,set forth in Sections 1 1 and 12) Where,the context shall require, the provisions of this Agreement shall survive the termination of this Agreement prior to the Closing 136 Successors and Assigns ThisAgreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, successors, and assigns, provided, however, prior to the Close of Escrow, neither Party to this Agreement shall assign or transfer this Agreement or anyinterest, right, or obligation in this Agreement without the prior written consent of the other/Party, and any such assignment or transfer without such written consent shall be null and void No assignment by either Party of its rights and obligations hereunder shall release/that Party of its obligations to the other Party hereunder without such other Party's written/consent, which consent may be withheld in such Party's sole and absolute discretion 137 Required Actions of Buyer and Seller Buyer and Seller agree to execute all instruments and documents(and to take all actions consistent with this Agreement as may be required in order to consummate the transaction contemplated by this Agreement and shall use their reasonable efforts/to accomplish the Closing in accordance with the provisions of this Agreement; providedVthat this Section 13 7 is not intended and shall not be construed to modify this Agreement or require a Party to waive its rights hereunder. 13 8 Entire Agreement This Agreement contains the entire agreement between the Parties concerning the subject matter of this Agreement and supersedes any prior agreements, understandings, or negotiations, except for the Existing DDA, the Hilton Parcel Lease, and the 12-16-15 V8 -18- Interim Short-Term Lease (or the Consolidated Long-Term Lease if to effect) From and after the Closing the Hilton Parcel Lease and,the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) shall be deemed to have been terminated and of no further force or effect, provided, however, that nothing in this Agreement shall be deemed to modify, amend, or terminate any or the obligations of either Party set forth in either the Hilton Parcel Lease or the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) that have not been fully performed as of the Closing (including without limitation Buyer's obligation to pay the Ground Rent and all utilities, Impositions, insurance costs, thereunder through the date of the Closing and the Parties' mutual obligation set forth in Section 9 2 to make any required adjustments to the amounts paid by Buyer to Seller pursuant to the Hilton/Parcel Lease and the Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) prior to the Closing) Notwithstanding the foregoing, the Parties acknowledge and agree that this Agreement is not intended to modify, amend, terminate, or in any way affect (a�the ongoing obligations of Seller set forth in Attachment No 8 (the"Schedule of Feasibility Gap Payments") of the Existing DDA, (b) any agreement set forth in the Existing DDA, Hilton Parcel Lease, or Interim Short- Term Lease (or the Consolidated Long-Term Lease if in effect)Ito waive or release claims and any obligation set forth in the Existing DDA, Hilton Parcel Lease, or Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) to indemnify, defend, and hold harmless Successor Agency and/or City shall survive in accordance ith the provisions set forth therein, (c) the credit to which Buyer is entitled against the Seventh Extension Payment as provided for in Section 203 3(a)(12)(g) of the Existing DDA (the amount of which shall be calculated based on the date the Closing occurs pursuant to this Agreement rather than the close of escrow for the conveyance of the long-term Lease for Parcel C,as provided therein), (d) any other provisions of the Existing DDA, Hilton Parcel Lease, or Interim/Short-Term Lease (or the Consolidated Long- Term Lease if to effect) which survive the expiration or termination of such agreement shall survive in accordance with the provisions set forth therein, (e) to the extent necessary to permit the parties to enforce any of the surviving obligations set forth in clauses (a) — (d), the general provisions set forth in the Existing DDA, Hilton Parcel Lease, or Interim Short-Term Lease (or the Consolidated Long-Term Lease if in effect) shall survive, and (f) the rights or obligations of City and Buyer as set forth in that certain License Agreement to Provide Landscaping and Other Improvements in the Public Right of Way dated as of February 20, 2001, and recorded in the Official Records of the Orange County Recorder's office as Instrument No 20010232765 on April 18, 2001 139 Time of Essence Time is of the essence of each and every term, condition, obligation, and provision set �rth in this Agreement 13 10 Counterparts This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument 13 11 Sever ability If any portion of this Agreement shall be declared by any court of competent jurisdiction to be invalid, illegal, or unenforceable, such portion shall be deemed severed from this/Agreement, and the remaining parts of this Agreement shall remain in full force and effect, as fully as though such invalid, illegal, or unenforceable portion had never been part of this Agreement 12-16-15 V8 -19- 13 12 Headings Headings at the beginning of each section are solely for convenience of reference and are not a part of this Agreement 13 13 Construction Whenever the context of this Agreement requires the same, the singular shall include the plural and the masculine, feminine, and neuter shall include the others Without limitation, any defined term used in the plural shall refer to all members A the relevant class, and any defined term used in the singular shall refer to any number of the/relevant class This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties had prepared the same Unless otherwise indicated, all references to sections are to sections in this Agreement All exhibits are incorporated in this Agreement by reference The term "Agreement" includes such exhibits (as exhibits and, if appropriate, as subsequently executed agreements and instruments) If the day on which Buyer or Shcler 1s required to take any action under the terms of this Agreement is not a business day, the/action shall be taken on the next succeeding business day For purposes of this Agreement, business days shall not include Saturdays, Sundays, or holidays recognized by the Federal Reserve Bank of San Francisco Any reference in this Agreement to an agreement or other instrument shall mean such agreement or instrument as it may from time to time be supplemented, modified, amended, and extended in accordance with the terms of this Agreement /fThis Agreement is executed and delivered in the State of California and shall be construed and enforced in accordance with, and governed by, the internal laws of the State of California without regard to conflict of laws principles - 13 14 No Waiver No waiver by a Party o�any Default by the other Party under this Agreement shall be implied from any omission or delay by the non-defaulting Party to take action on account of the Default if the Default/persists or is repeated Any waiver of any covenant, term, or condition contained in this A4 eement must be in writing Any such express written waiver shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition, nor shall it affect anypefault other than the Default expressly made the subject of the waver Any such express waiver shall be operative only for the time and to the extent stated in the waiver The consent or approval by a Party to or of any act by the other Party shall not be deemed to waive or render unnecessary consent or approval to or of any subsequent act 13 15 Relationship Between Parties Seller and Buyer agree that (a) the relationship between them is, is intended to be, and shall at all times remain, in connection with the transactions contemplated by/this Agreement, that of seller and purchaser and (b) neither Party 1s, is intended to be, or shall be construed as a partner, joint venturer, alter ego, manager, controlling person, or other business associate or participant of any kind of the other Party and neither Party intends to ever assume such status J 1 13 16 Third Party Beneficiaries This Agreement is made for the purpose of defining and setting forth certain rights and obligations of Buyer, Seller, and City It is made for the sole protection of Buyer, Seller and City and Buyer's, Seller's and City's respective heirs, executors, administrators, successors, and assigns No other Person shall have any rights of any nature under or by reason of this Agreement 816-15 (:12 8 -20- 13 17 Estoppels Upon the written request of Buyer or any current or prospective holder of a deed of trust, mortgage, or other security interest in the Property ("Lender"), Selleshall cooperate with Buyer and/or such Lender in executing an appropriate estoppel certificate confirming the status of any of the agreements referred to in Section 13 8 of this Agreement or any other matters affecting the rights and obligations of Buyer and such Lender relating to the Property that will survive the Closing as to which Buyer or Lender may inquire Such estoppel certificate shall be for the benefit of Buyer, Lender, and their respective successors and assignees Buyer or such Lender, as applicable, shall prepare the form of the estoppel certificate, subject to the reasonable approval of Seller as to form and content Buyer,shall compensate Seller for Seller's actual and reasonable costs incurred in investigating the matters addressed in any such estoppel certificate and reviewing and approving the same 13 18 Indemnity Buyer shall indemnify, defend and hold harmless Seller, City and each of their respective officials, employees, attorneys, consultants, and agents from and against any and all loss, liability, damage, claim, cost and/or expense Qncludmg, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses, court and litigation costs and fees of expert witnesses) (collectively, "Claims") resulting or arising from or to any way connected to Seller approving or entering into this/Agreement, implementation of this Agreement, Seller's performance of this Agreement, or the transaction contemplated hereunder, including, without limitation, any Claim that the Purchase/Price is less than fair market value and results, directly or indirectly, in a distribution of net sale proceeds to the affected taxing entities in an amount less than the amount to which the affected taxing entities are entitled by law or any Claim relating in any way to a challenge pertaining to the sufficiency and/or adequacy of the value or consideration for the transaction contemplated hereunder The foregoing covenant shall not merge with the Grant Deed and shall survive the Closing Without limiting the foregoing, and as a part of the foregoing indemnity, defense and hold harmless, Buyer shall be liable foripromptly paying or reimbursing Seller and/or City, as applicable, for any and all of Seller'Vand/or City's actual and reasonable costs and expenses related to any contest, challenge and/or defense of any disapproval/determination or threat of any disapproval/determination of this Agreement by DOF or any third party, including, without limitation, participating in whatever administrative appeal or proceeding, meet-and-confer and/or meet-and-discuss process may be available and/or initiating, cooperating with, participating in, defending and/or pursuing litigation (including any appellate proceeding relating to any order or judgment entered in any such' litigation or administrative appeal or proceeding) Such costs and expenses shall include, without limitation, reasonable attorneys' and consultants' costs and fees, travel costs and expenses court and litigation costs and fees of expert witnesses Seller shall have no obligation to defend this Agreement to DOF or any third party 14 Right of Entry 141 Grant of Right of Entry Provided that all of the terms and conditions of this Section 14 are/and remain fully satisfied, subject to the Interim Short-Term Lease, Seller hereby grants to Buyer and its agents and contractors, a temporary and conditional non-exclusive right to enter uponTarcel C from the Effective Date to Close of Escrow for the purpose of demolition, excavation, and rough grading on Parcel C (and such other work as may be pre-approved in writing Seller's Executive Director) as necessary for the development and construction of the D V8 -21- Hotel Addition The right to enter may be revoked by Seller's Executive Director for Buyer's noncompliance with any of the conditions set forth herein Seller shall not be obligatedlfor any loss, financial or otherwise, which may be incurred by Buyer as a result of such revocation or the termination of the right of entry Buyer expressly waives any claim for expense or/loss which Buyer might incur as a result of Seller's revocation or termination of the rightt`of entry in accordance with the foregoing 142 Insurance Prior to Buyer entering Parcel C, Buyer shall furnish evidence satisfactory to the City Attorney of the City that Buyer or its contractors have obtained comprehensive liability insurance in an amount and in the form as is approved by the City Attorney of the City for the purpose of protecting Seller and City and their officers, employees, agents, contractors, and consultants from claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorneys' fees and costs), which may be caused by any of Buyer's activities under the right of entry, whether such activities or performance thereof be by Buyer or anyone directly or indirectly employed or contracted with by Buyer and whether such damage shall accrue or be discovered before or after the termination of this Agreement 143 Liens Buyer shall not permit to be placed against Parcel C, or any part thereof, any design professional's, mechanic's, materialmen's, contractor's or subcontractor's hens (collectively, "Liens") Buyer shall indemnify, de end, and hold harmless Seller from all liability for any and all liens, claims, and demands, together with costs of defense and reasonable attorneys' fees, arising from any Liens Seller reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on Parcel C, or any portion thereof, or on any improvements on Parcel C, any notices of non-responsibility or other notice as may be desirable to protect Seller against liability Inyaddition to, and not as a limitation of Seller's other rights and remedies under this Section 14, should Buyer fail, within 10 calendar days of written request from Seller, either to dischargep any Lien or to bond for any Lien, or to defend, indemnify, and hold harmless Seller from and against any loss, damage, injury, liability, or claim arising out of a Lien, then Seller, at its option but without the obligation, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to Seller by Buyer upon written demand 144 Restoration Subject to Section 14 8 below, in the event Close of Escrow provided for in this Agreement does not occur by the outside Closing Date referred to in Section 7 2, immediately followi g written request by Seller, Buyer shall be obligated, at Buyer's sole cost and expense, to cause Parcel C to be placed in the condition required pursuant to all of the following, as and to the extent applicable (the "Restoration") (a) the Hilton Parcel Lease (or the Consolidated Long-Term Lease if in effect), (b) the applicable land use entitlements for the Hilton Parcel and Parcel C; (c) the Reciprocal Fire and Access Easement Agreement dated as of August 30, 1995I and recorded in the Official Records of the Orange County Recorder on September 1, V995, as Document No 95-0384750, as subsequently assigned by Waterfront Construction No 1 to Buyer pursuant to an Assignment and Assumption of Easements dated July 30, 1997/and recorded in the Official Records of the Orange County Recorder on August 1, 1997, as Instrument No 19970367563 and as subsequently reaffirmed pursuant to the Easement Agreement (Reaffirmation) dated as of August 29, 2006, and recorded in the Official Records of 12-16-IS 12 -22- the Orange County Recorder on August 30, 2006, as Instrument No 2006000582101, and d)the Parcel C Parking Easement Agreement dated as of August 29, 2006, and recorded in the fficial Records of the Orange County Recorder on August 30, 2006, as Instrument No 200600P582104 Buyer agrees that if Buyer does not cause the Restoration of Parcel C (or such applicable portion thereof) as required by this Section, and has not cured such failure within ninety(90) days following written notice from the City (or, if such Restoration cannot with reasonable diligence be completed within ninety (90) days, then within such additional period of time that such Restoration can be completed with the exercise of commercially reasonable diligence), then the City shall have the right, at the City's election (in its sole and absolute discretion)to enter Parcel C (or such applicable portion thereof) and complete, or cause the completion�of, the Restoration of Parcel C (or such applicable portion thereof) at Buyer's sole cost and expense In the event that the City makes such an election, then Seller and Buyer agree that/Seller and Buyer shall cooperate with the City with regard to the Restoration and Seller and Buyer shall permit City entry upon Parcel C limited to such purpose "Restoration" includes providing adequate security measures for Parcel C in order to prevent accidents or injuries All Restoration shall be performed in compliance with (a) all applicable Laws of all Authorities, and (2) all directions, riffes, and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction over the Restoration Restoration shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction over the Restoration, and Buyer shall be responsible for the procurement and maintenance thereof, at Buyer's `le cost and expense 145 Compliance With Laws/Permits Buyer shall, in all activities undertaken pursuant to this Section 14, comply and cause its contractors, agents, and employees to comply with all Laws of all Authorities Without limiting the generality of the foregoing, Buyer, at its sole cost and expense, shall obtain any and all permits which may be required by any of the Laws for any activities Buyer conducts pursuant to this Section 14 and shall conduct, or cause to be conducted, any work on Parcel C in accordance with any such permits 146 Indemnification Buyer,hereby agrees to indemnify, defend, assume all liability for, and hold harmless Seller, the City, and their officers, employees, agents, contractors, and consultants from and against all actions, claims, suits, penalties, obligations, liabilities, damages/ to property, and claims or injuries to persons (collectively, "Claims") arising out of or in connection with Buyer's right offentry pursuant to this Section 14 Buyer's indemnity given under this Section 14 shall apply whether caused by actions of Buyer or anyone directly or indirectly employed or under contract with Buyer, and whether such Claims shall accrue or be discovered before or after the expiration or termination of this Agreement or termination of the rights afforded under thisSection 14 Notwithstanding the foregoing, Buyer's indemnity shall not apply to the extent that claims are caused by any negligent or intentional acts of Seller or City 147 Inspection Seller and its representatives, employees, agents, and independent contractors may enter and inspect the Parcel C or any portion thereof or any improvements thereon at any time and from time to time at reasonable times to verify Buyer's compliance with the terms and conditions of this Section 14 12-16-IS vs -23- discovered before or after the expiration or termination of this Agreement or termination of the rights afforded under this Section 14 Notwithstanding the foregoing, Buyer's indemnity shall not apply to the extent that claims are caused by any negligent or intentionall"acts of Seller or City. 14.7 Inspection. Seller and its representatives, employees, agents, and independent contractors may enter and inspect the Parcel C or any portion thereof or/any improvements thereon at any time and from time to time at reasonable times to verify Buyer's compliance with the terms and conditions of this Section 14 JJ 14.8 Section 14 To Terminate Upon Closing of Consolidated Long-Term Lease. If Buyer closes on the Consolidated Long Term Lease, as referred to"in the second paragraph of Section 7.2, the right of entry and obligations to provide insurance and to cause the Restoration Provided in this Section 14 shall automatically terminate and be of no further force or effect at that time IN WITNESS WHEREOF,the Parties have executed this Agreement as of the day and year first above written Seller: SUCCESSOR AGENCY TO THE EVIIOPMEI�TT AGEiCYOF 1TYO GTONBEACH By: isVial rpe n ATIEST. ZL Its.Se etary APPROVED AS ORM By I s. neral Counse Buyer: THE WATERFRONT HOTEL,TIC,aCalifornia limited liability company % By- Waterfront Development,Inc, a California cor n, its Managing Member By: . b L May ,Jr,President V9 -24- 148 Section 14 To Terminate Upon Closing of Consolidated Lon -Term Lease If Buyer closes on the Consolidated Long-Term Lease, as referred to in the second aragraph of Section 7 2, the right of entry and obligations to provide insurance and t e o cause t Restoration provided in this Section 14 shall automatically terminate and be of no further rce or effect at that time 15 Completion of Hotel Addition. Buyer shall complete construction the Hotel Addition within thirty-six(36) months after the Close of Escrow IN WITNESS WHEREOF, the Parties have executed this Agr ement as of the day and year first above written Seller SUCCESSOR AG CY TO THE REDEVELOPME T A CY OF THE CITY OF T GT AC By is C airp rsoeq ATTEST Its Secretary kv C()) �' T APPROVED FORM r-1-. B is eneral Counsel Buyer THE WATERFRONT HOTEL, LLC, a California limited liability company By Waterfront Development, Inc , a California co its Managing Member By ob M yer, Jr, President 12-16-15 vs -24- AT 1 ACHMENT #2