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Home My WebLink AboutAdopt Resolution No. 2015-04 of the Oversight Board of the S Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder Commonwealth Land Title Company III III III II III III 11111 III I 1111 1 I II III 59.00 * $ R 0 0 0 7 4 2 5 7 3 2 $ 2015000178038 3:47 pm 04/07/15 FREE RECORDING REQUESTED BY 93 405 G02 12 04 1705.00 1705.00 0.00 20.00 33.00 0.00 0.00 0.00 THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager WHEN RECORDED MAIL AND SEND TAX STATEMENTS TO: Miramar GP, LP 10660 Scripps Ranch Blvd., Suite 100 San Diego, CA 92131 Attn: Suresh Patel z2y (Space Above This Line for Recorder's Office Use Only) Tran f er Tax: $3,410.0 APN: 142-081-06, 142-081-12, 142-081-11, 142-081-09. 142-081-10, and 142-081-28 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,a public body,herein called"Grantor,"hereby grants to MIRAMAR GP, LP, a Delaware limited partnership, herein called"Grantee", the real property, hereinafter referred to as the "Property", described in Exhibit "A" attached hereto and incorporated herein by this reference. 1. Grantor excepts and reserves: (a) any existing street, dedicated street, or portion of any street or dedicated street lying outside the boundaries of the Property which might otherwise pass with a conveyance of the Property;and (b) (to the extent now or hereafter validly excepted and reserved by the parties named in deeds, leases and other documents of record) all oil, gas, hydrocarbon substances and minerals of every kind and character lying more than 500 feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Property lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from the Property, but without, however, any right to use or disturb either the surface of the Property or any portion thereof within 500 feet of the surface for any purpose or purposes whatsoever. 2. The Property is conveyed in accordance with and subject to the Purchase and Sale Agreement and Joint Escrow Instructions (the "Purchase Agreement") entered into by and between GRANT DEED Grantor("Seller"therein), Grantee("Buyer"therein), and the City of Huntington Beach("City") as nt of P-C44 `j , 2015. The Purchase Agreement is a public record on file in the offices of the City Clerk of the City of Huntington Beach and is by reference thereto incorporated herein as though fully set forth herein. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Purchase Agreement. 3. Grantee hereby covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property that the Grantee, such successors and such assigns, shall develop,maintain,and use the Property only as follows: (a) The Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of City of Huntington Beach's General Plan, the Purchase Agreement(including the Scope of Development attached to the Purchase Agreement as Exhibit F and incorporated herein by this reference), plans and specifications approved by City and this Grant Deed, whichever document is more restrictive. (b) The Grantee shall use the Property exclusively for the construction of a high- quality four story, 120 to 140-room Hyatt Place hotel or other brand hotel first approved in writing by City as specifically described in the Purchase Agreement and Scope of Development attached thereto as Exhibit F (the "Project Improvements"). The Grantee shall use the Property for such uses and purposes and in accordance with plans and specifications for the development of the Property approved by City. No change in the use of the Property and no new construction or material exterior modification or alteration of any structure on the Property shall be permitted without the prior written approval of City. (c) For not less than 30 years from the date this Grant Deed is recorded in the Official Records of the Recorder's.Office of Orange County, Grantee shall use the Property only for the uses specified in this Grant Deed and the Purchase Agreement. No change in the use of the Property and no new construction or exterior modification or alteration of any structure on the Property shall be permitted without the prior written approval of the City. (d) Grantee, its successors and assigns, shall maintain the Improvements on the Property in the same aesthetic and sound condition(or better)as the condition of the Property at the time City issues the Permanent Certificate of Occupancy for the Property,reasonable wear and tear excepted. This standard for the quality of maintenance of the Property shall be met whether or not a specific item of maintenance is listed below. However, representative items of maintenance shall include frequent and regular inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or replacement of all surfaces, fencing, walls, equipment, etc., as necessary; emptying of trash receptacles and removal of litter; sweeping of public sidewalks adjacent to the Property, on-site walks and paved areas and washing-down as necessary to maintain clean surfaces; maintenance of all landscaping in a healthy and attractive condition, including trimming, fertilizing and replacing vegetation as necessary; cleaning windows on a regular basis; painting the buildings on a regular program and prior to the deterioration of the painted surfaces; conducting a roof inspection on a regular basis and maintaining the roof in a leak-free and weather-tight condition; maintaining security devices in good working order. In the event Grantee, its successors or assigns fails to maintain the Improvements in accordance with the standard for the quality of maintenance, City or its designee shall have the right but not the obligation to enter the Property upon reasonable GRANT DEED notice to Grantee, correct any violation, and hold Grantee, or such successors or assigns responsible for the cost thereof,and such cost,until paid,shall constitute a lien on the Property. (e) Grantee shall pay when due all real estate taxes and assessments assessed and levied on or against the Property subsequent to the Close of Escrow. In addition, Grantee shall remove, or shall have removed, any levy or attachment made on title to the Property (or any portion thereof), or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale of the Property thereunder. Nothing herein contained shall be deemed to prohibit the Grantee from contesting the validity or amount of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Grantee in respect thereto. 4. The Grantee covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision(m) and paragraph (1) of subdivision(p) of Section 12955, and Section 12955.2 of the Government Code, 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 him or her, 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 of the Property. With respect to familial status, this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph. 5. The Grantee covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that Grantee, its successors and assigns shall refrain from restricting the rental, sale or lease of the Property on the basis of the race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any 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 premises herein conveyed. With respect to familial status,this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, GRANT DEED 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision(d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, 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 premises herein leased. With respect to familial status, this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 him or her, 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 of the land. With respect to familial status, this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph." 6. Prior to the issuance of a Permanent Certificate of Occupancy for the Project Improvements by City, Grantee shall not make any sale, transfer, conveyance or assignment of the Property or any part thereof or the buildings or structures thereon, without the prior written approval of Grantor and City. Prior to the issuance of a Permanent Certificate of Occupancy for the Project Improvements by City, construction financing for the Hotel Project shall be permitted with the prior written approval of the City Manager or designee. In the event that Grantee does sell,transfer, convey or assign any part of the Property or buildings or structures thereon,prior to the issuance of,a Permanent Certificate of Occupancy for the Project Improvements by City in violation of this Grant Deed, Grantor shall be entitled to increase the Purchase Price paid by GRANT DEED Grantee by the amount that the consideration payable for such sale, transfer, conveyance or assignment is in excess of the Purchase Price paid by Grantee, plus the cost of improvements and development, including carrying charges and costs related thereto. The consideration payable for such sale, transfer, conveyance or assignment to the extent it is in excess of the amount so authorized shall belong and be paid to Grantor and until paid Grantor shall have a lien on the Property and any part involved for such amount. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Property. 7. 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 Grantor, City, and their respective successors and assigns against 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. S. Except as provided in the next two sentences, every covenant and condition and restriction contained in this Grant Deed shall remain in effect for 30 years from the date this Grant Deed is recorded in the Official Records of the Recorder's Office of Orange County. The covenants against discrimination set forth in paragraphs 4 and 5 of this Grant Deed shall remain in effect in perpetuity. The covenants set forth in Section 6 of this Grant Deed shall terminate and be released upon the issuance of a Permanent Certificate of Occupancy for the Project Improvements to be constructed on the Property by City pursuant to the Purchase Agreement. 9. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that 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 each Grantor and City, and such covenants shall run in favor of each Grantor and City for the entire period during which such covenants shall be in force and effect,without regard to whether Grantor or City is or remains an owner of any land or interest therein to which such covenants relate. Grantor and 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. 10. 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 interest permitted by this Grant Deed; provided, however, that any subsequent owner of the Property shall be bound by such remaining 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. 11. The covenants contained in this Grant Deed shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title. GRANT DEED IN WITNESS WHEREOF, Grantor, City and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this."6day of 2015. CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayo JiV x rd Dated A STED: r 1t lerlc Joan L. Flynn I ND APPROVED: Ci ger APPROVED FO r. v' Cit ttomey [signatures continue on following pages] GRANT DEED SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 4ha' rson Jil Ha dy Dated ATTESTED: Cler Joan L. Flynn INI D APPROVED: Ex u V Director APPROVED O G eral Legal Counsel [signatures continue on following page] GRANT DEED The undersigned hereby accepts and agrees to the terms and conditions set forth in this Grant Deed. "GRANTEE" MIRAMAR GP, LP, a Delaware limited partnership By: Excel Hospitality, Inc., a California corporation Its: General Partner By: Suresh Patel, President GRANT DEED PAGE 8 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. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On April 2, 2015, before me,P L. Esparza, Notary Public, personally appeared Joan L. Flynn and Jill Hardy who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons 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. P L.ESPARZA WITNESS my hand and official seal. Commission#2032750 LID, Notary Public-CaliP n* Orange Cam" Carait. A 4.2017 r (Seal) (Notary Signatur 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. ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On April 2, 2015, before me,P. L. Esparzca, Notary Public, personally appeared Joan L. Flynn and Jill Lardy who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons 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. N L.ESMU WITNESS my hand and official seal. commiaaion a 2032750 Notary Public-CaiitorWa orange couaay Comm.WEV08 Ago 4.2017 (seal) (Notary ignature ACKNOWLEDGMENT 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 On March 30, 2015 before me, Lisa DW Kennedy, Notary Public, personally appeared 5'uresh Patel who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person 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. USA D.W. NEOYWITNESS my hand and official seal. COn"63ioe006337 L .p o Notary Puwkai MIS z Drao� ooky AR Carom.Ea�o a FoS 1 2017 Signature (Seal) EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Huntington Beach, County of Orange, State of California, described as follows: PARCEL A: (APN: 142-081-06) LOTS 19 AND 20 IN TRACT 417, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 16. PAGE 47, MISCELLANEOUS MAPS, RECORDS OF SAID ORANGE COUNTY. EXCEPTING THEREFROM THE NORTH 20 FEET THEREOF. EXCEPTING THEREFROM ALL WATER AND/OR WATER RIGHTS APPURTENANT TO AND/OR CONNECTED WITH AND/OR UNDER SAID LAND, AS SET FORTH IN AN INSTRUMENT TO BOULEVARD GARDENS WATER COMPANY RECORDED JUNE 2, 1926 IN BOOK 652, PAGE 253, DEEDS. ALSO EXCEPTING ALL OIL, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID LANDS BUT WITHOUT, HOWEVER, THE RIGHT TO USE EITHER THE SURFACE OF SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER AS RESERVED IN THE DEED RECORDED OCTOBER 24, 1988 AS INSTRUMENT NO. 88-5437813 OF OFFICIAL RECORDS. PARCEL B: (APN: 142-081-28) LOTS 21, 22 AND 23 OF TRACT NO. 417, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 16, PAGE 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT ALL OIL, GAS, MINERALS AND OTHER HYDROCARBON SUBSTANCES WITHOUT RIGHT OF SURFACE ENTRY THERETO ABOVE A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, AS RESERVED IN THE DEED FROM BEULAH H. FINLEY, RECORDED DECEMBER 14, 1960 IN BOOK 5548, PAGE 385, OFFICIAL RECORDS. PARCEL C: (APNS: 142-081-09, 10, 11 AND 12) LOTS 24, 25, 26, 27 AND 28 OF TRACT NO. 417, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 16, PAGE 47, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL WATER AND WATER RIGHTS AS CONVEYED TO BOULEVARD GARDENS WATER COMPANY, A CORPORATION, BY DEED RECORDED FEBRUARY 11, 1925 IN BOOK 561, PAGE 287, OF DEEDS. GRANT DEED PAGE 9 AGENDA REPORT Oversight Board of the Huntington Beach Successor Agency to the former Redevelopment Agency MEETING DATE: March 5, 2015 SUB.➢ECT/ACTION: Adopt Resolution No. 2015-04 of the Oversight Board of the Successor Agency to the former Redevelopment Agency of the City of Huntington Beach relating to approving a Purchase and Sale Agreement for the Edinger Hotel STATEMENT OF ISSUE: The Oversight Board is asked to approve a Purchase and Sale Agreement between the Successor Agency of the former Redevelopment Agency and Miramir for parcels located on Edinger and Parkside for construction of a hotel. Previously on November 5, 2014, the Oversight Board had to re-approve the Purchase and Sale Agreement for parcels located on Edinger and Parkside for construction of hotel between the City of Huntington Beach and Miramir. BOARD RECOMMENDED ACTION: Motion to: 1) Adopt Resolution No. 2015-04, "A Resolution of the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach Approving a Purchase and Sale Agreement and Directing the Transfer of Ownership of Real Property in Accordance with Health and Safety Code Section 34181(a) [APN NOs. 142-081-06, 142-081-09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28]." DISCUSSION: In response to the elimination of redevelopment agencies, in March 2011, the Huntington Beach City Council and the former Redevelopment Agency took various actions to transfer Agency assets and to transition activities of the former Agency to the City of Huntington Beach(City) in order to continue to implement redevelopment in the City. Subsequent to that, AB Ix 26 was signed into law on June 29, 2011, which considered the transfer of assets to be unauthorized and invalid and which dissolved the former Redevelopment Agency as of February 1, 2012. The Huntington Beach City Council and Successor Agency approved the process documentation confirming ownership of the former Redevelopment Agency assets with the Successor Agency. On January 8, 2013, the Oversight Board took action re-confirming the property assets are with the Successor Agency. However, Department of Finance did not approve the transfers and instructed the Successor Agency to process the Long Range Property Management Plan (LRPMP) as the vehicle to re-confirm ownership. On November 5, 2014, the Oversight Board again re-approved the Purchase and Sale Agreement and directed the transfer of ownership. The action was part of the review and submittal of the LRPMP. On February 20, 2015, the Successor Agency received an Objection to the Oversight Board Action from the Department of Finance (DOF). The Agency conducted a conference call with DOF to determine how to move forward with the proposed hotel. Based upon the discussion, it 0 was determined that if the Oversight Board approved a new Purchase and Sale Agreement — between the Successor Agency and Miramir, DOF was inclined to approved the Agreement, to move forward to close of escrow. The former Redevelopment Agency issued an RFP on October 2009 in search of a hotel developer to develop a high quality, select brand hotel on the site with a minimum of 125 hotel rooms. Ayres Hotel Company was selected by staff; however,the former Agency and Ayres could not come to terms and the property was transferred from the former Agency to the City for continued attempts at redevelopment. After several failed attempts with other hotel developers, on January 27, 2012, the City entered into a PSA with Campbell Lodging to purchase the property and develop the site as a Hyatt Place Hotel, or similar brand hotel,ranging in size from 120 to 140 rooms. On October 2, 2012, Campbell Lodging, Inc. transferred its interest in the PSA to KPHL, LLC. Since then,there have been four amendments to the PSA(January 31, 2012— 1st Amendment; June 2012—2nd Amendment; and January 25, 2013 —3rd Amendment). On January 21, 2014, the parties entered into the 4th Amendment, which extended the close of escrow deadline to June 30, 2015. The property has been reconveyed to the Successor Agency and remains subject to the terms of the PSA. The extension allows additional time to process project entitlements and final parcel map as well as obtain a Finding of Completion and a certified LRPMP from the DOF. The sales price is substantiated by an appraisal review by Nagasaki &Associates, dated January 9, 2012,that valued the parcels at $2.94 million to $3.50 million. The property is fully entitled and the developer has the financing in place. Once the LRPMP has been approved by DOF,the sale can take place immediately. Attachment 1) Resolution No. 2015-04, "A Resolution of the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach Approving A Purchase and Sale Agreement and Directing the Transfer of Ownership of Real Property in Accordance with Health and Safety Code Section 34181(a) [APN Nos. 142-081-06, 142- 081-09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28]." RESOLUTION NO. 2015-04 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING A PURCHASE AND SALE AGREEMENT AND DIRECTING THE TRANSFER OF OWNERSHIP OF REAL PROPERTY IN ACCORDANCE WITH HEALTH AND SAFETY CODE SECTION 34181(a) [APN NOs. 142-081-06, 142-081-09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28] WHEREAS, the former Redevelopment Agency of the City of Huntington Beach ("Agency") 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) ("CRL"); and The Agency was responsible for the administration of redevelopment activities within the City; and Section 33220 of the CRL provides that certain public bodies may aid and cooperate in the planning, undertaking, construction or operation of redevelopment projects; and The City and the Agency entered into a number of Cooperation Agreements to continue the effort to redevelop, revitalize and/or eliminate blight in the City to achieve the purposes and goals of the CRL, to repay debt to the City and to provide for affordable housing, as appropriate and as authorized by redevelopment law in effect at the time of approval of said agreements; and Pursuant to such authority set forth in the CRL and other applicable law, on March 7, 2011, by Resolution No. 2011-17, the City approved and accepted the transfer of certain real property located in the City of Huntington Beach, California, APN Nos. 142-081-06, 142-081- 09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28 (collectively, the "Agency Property"); and Pursuant to Resolution No. 2011-17, the City executed certificates of acceptance (collectively, the "Certificates of Acceptance") for the Agency Deeds designed to transfer ownership of the Agency Property from the Agency to the City (collectively the "Agency Deeds"); and On or about March 10, 2011, the Agency Deeds, along with the Certificates of Acceptance, were recorded in the official records of the County of Orange; and Neither the Cooperation Agreements nor the purported transfer of the Agency Property (or any of the related documents and actions) were challenged within the applicable statute of limitations; and 15-4625/118160 1 Oversight Board Reso. 2015-04 AB xl 26 ("AB 26") was signed by the Governor of California on June 28, 2011, making certain changes to the CRL and adding Part 1.8 and Part 1.85 to Division 24 of the California Health and Safety Code; and AB 26 states, in part, that "[t]he Legislature hereby finds that a transfer of assets by a redevelopment agency [after January 1, 2011] is deemed not to be in the furtherance of the [CRL] and is thereby unauthorized."; and AB 26 further states, in part, that "[c]ommencing [February 1, 2012], ... arrangements between the city ... that created the redevelopment agency and the redevelopment agency are invalid..."; and AB 26 further states, in part, that "[a]ll ... properties [and] buildings ... of the former redevelopment agency are transferred on [February 1, 2012], to the control of the successor agency"; and Subsequent to the date of transfer of the Agency Property to the City, the City and Campbell Lodging, Inc. entered into that certain Purchase Agreement and Joint Escrow Instructions dated January 27, 2012, as further amended by an Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated January 31, 2012, and further amended by that Escrow Amendment/Supplement dated April 25, 2012, and further amended by that Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated June 25, 2012, and further amended by that Third Amendment to Purchase and Sale Agreement and Joint Escrow hnstructions dated as of January 25, 2013, and further amended by that Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 21, 2014 (collectively, the "Prior Purchase Agreement") relating to the sale of the Agency Property and the development thereon of a high-quality, first-class, four story, 120-140 room Hyatt Place Hotel or other brand hotel ("Project"). The rights of `Buyer" under the Prior Purchase Agreement were assigned to Miramar GP, LP, a California limited partnership ("Miramar"), a private third party developer; and On or about April 20, 2012, the California State Controller issued correspondence stating, in part, that "[i]f your city ... received any assets from a redevelopment agency after January 1, 2011, your city ... hereby is ordered to ... reverse the transfer and return the applicable assets to the successor agency of the relevant redevelopment agency"; and Under AB 26, each successor agency shall have an oversight board with fiduciary responsibilities to holders of enforceable obligations and the taxing entities that benefit from distributions of property taxes and other revenues pursuant to California Health and Safety Code Section 34188; and The oversight board has been established for Successor Agency to the Redevelopment Agency of the City of Huntington Beach ("Successor Agency") (which oversight board shall hereinafter be referred to as the "Oversight Board") and all seven (7) members have been appointed to the Oversight Board pursuant to California Health and Safety Code Section 34179; and 15-4625/118160 2 Oversight Board Reso. 2015-04 AB 1484 ("AB 1484") was signed by the Governor of California on June 27, 2012, making changes to AB 26 and certain additional changes to the CRL; and AB 1484, at Section 34179.5(c)(2) of Part 1.85 of the California Health and Safety Code, categorizes certain assets as those "transferred after January 1, 2011 ... by the redevelopment agency ... to the city ... that formed the redevelopment agency..." ("Section 34179.5(c)(2) Assets"); and AB 1484, at Section 34179.5(c)(1) of Part 1.85 of the California Health and Safety Code, categorizes certain other assets as those "transferred from the former redevelopment agency to the successor agency on or about February 1, 2012." ("Section 34179.5(c)(1) Assets"); and Because (i) AB 26 states that a transfer of assets by a redevelopment agency after January 1, 2011 was "unauthorized", (ii) AB 26 states that commencing February 1, 2012, arrangements between a redevelopment agency and the city that created it are "invalid" and (iii) the State Controller has purported to order that ownership of certain assets be vested in successor agencies, the Agency Property is therefore not categorized as Section 34179.5(c)(2) Assets; and Because AB 26 states that all properties and buildings of the former redevelopment agency are transferred on February 1, 2012 to the control of the successor agency, the Agency Property was therefore categorized as Section 34179.5(c)(1) Assets; and The City and Successor Agency do not acknowledge that the purported transfer of the Agency Property by the Agency to the City in 2011 was not in furtherance of the CRL; and The City and Successor Agency do not acknowledge the effectiveness of the Legislature's purported deeming not to be in furtherance of the CRL of the purported transfer of assets that was conducted in accordance with the CRL at the time when made and was not challenged within the applicable statute of limitations; and The City and Successor Agency do not acknowledge that commencing February 1, 2012, arrangements between the redevelopment agency and the city that created it are invalid; and The City and Successor Agency do not acknowledge the effectiveness of the California State Controller's order to reverse the transfer of the Agency Property and return the applicable assets to the Successor Agency; and The City and Successor Agency have limited financial resources and desire not to initiate litigation at this time with regard to AB 26, AB 1484 and/or the purported order by the California State Controller that ownership of the Agency Property be vested in the Successor Agency; and Therefore, in order to avoid the costs of litigation and other costs, the City and Successor Agency took action in a manner consistent with AB 26, AB 1484 and the California State Controller's purported order, and in furtherance of the Successor Agency's duties under Section 34179.6(h)(1) and Section 34179.6(f), by processing documentation reflecting ownership of the Agency Property by the Successor Agency pursuant to City Resolution No. 2012-71 and Successor Agency Resolution No. 2012-07, without acknowledging the effectiveness of AB 26, 15-4625/118160 3 Oversight Board Reso. 2015-04 AB 1484 and/or such order and duties, expressly disclaiming the same. Quitclaim Deeds were recorded on October 17, 2012 whereby the City quitclaimed to the Successor Agency the City's right, title and interest in the Agency Property; and Pursuant to H&S Code Section 34191.5(b) of the Dissolution Act, once the California Department of Finance ("DOF") issues a Finding of Completion to the Successor Agency, the Successor Agency shall prepare a Long Range Property Management Plan ("LRPMP") that addresses the disposition and use of certain real properties of the former Agency. The LRPMP shall be submitted to the Oversight Board and the DOF for approval no later than 6 months following the issuance of the Finding of Completion to the Successor Agency; and On May 13, 2014, the Successor Agency received its Finding of Completion; and On November 5, 2014, the Oversight Board reviewed and approved the LRPMP and Prior Purchase Agreement which was then sent to DOF on November 7, 2014. On March 3, 2015, the Successor Agency received correspondence from DOF regarding modifications to the LRPMP. On or about the same date in March 2015, DOF requested modifications to the Prior Purchase Agreement; and The Successor Agency prepared a proposed Amended LRPMP to address the modifications requested by DOF and likewise prepared a new proposed Purchase and Sale Agreement and Joint Escrow Instructions by and among the Successor Agency, Miramar, and the City of Huntington Beach which would supersede and tenninate in its entirety the Prior Purchase Agreement,("Purchase Agreement"); and At this same meeting of the Oversight Board, the Oversight Board will consider for approval the Successor Agency's Amended LRPMP whereby the Successor Agency proposes, among other things, to sell the Agency Property to Miramar pursuant to the proposed Purchase Agreement. The Amended LRPMP will thereafter be submitted to the DOF for review concurrently with the proposed Purchase Agreement; and The disposition of the Agency Property pursuant to the Purchase Agreement is aimed at maximizing value in that the purchase price for the Agency Property pursuant to the Purchase Agreement is within the fair market value range of the Agency Property as determined by an appraisal of the Agency Property dated January 9, 2012 prepared by Nagasaki & Associates; and The anticipated sale proceeds from the sale of the Agency Property to Miramar pursuant to the proposed Purchase Agreement in the amount of$3,100,000 will be remitted after the close of escrow to the Orange County Auditor-Controller's Office for distribution to the taxing entities in accordance with H&S Code Section 34191.5(c)(2)(B) of the Dissolution Act; and All of the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 15-4625/118160 4 Oversight Board REso. 2015-04 1. The Oversight Board hereby finds and determines that the foregoing recitals are true and correct. 2. The Oversight Board hereby approves of the terms of the Purchase Agreement. 3. The Oversight Board hereby approves of and directs the sale and conveyance of the Agency Property from the City or Successor Agency to Miramar in accordance with the terms and conditions set forth in the Purchase Agreement, for the purpose of developing the Project. 4. The Oversight Board hereby approves of the transfer to the Successor Agency of the purchase price received from the sale of the Agency Property for distribution to the taxing agencies in accordance with AB 26/AB 1484. Specifically, the Oversight Board hereby approves of the transfer of all of the net proceeds received from the sale of the Agency Property to the Orange County Auditor-Controller and the distribution of such proceeds to the taxing entities. 5. The Oversight Board hereby acknowledges and agrees that the Purchase Agreement constitutes the existence of an enforceable obligation pursuant to Part 1.8 and Part 1.85 of Division 24 of the Health and Safety Code for the purposes of, without limitation, the disposition of assets previously owned by the Agency. 6. The Oversight Board hereby authorizes and directs the Executive Director of the Successor Agency, or his or her designee, and the City Manager, or his or her designee, to take all actions and sign any and all documents necessary to implement and effectuate the Purchase Agreement and the actions approved by this Resolution (including, without limitation, approving extensions of deadlines or dates set forth in the Purchase Agreement and its attachments) as deterimined necessary by the City Manager or Executive Director, or his or her designee, approving amendments to the Purchase Agreement and its attachments as determined necessary by the City Manager or Executive Director, or his or her designee, to effectuate the Purchase Agreement, executing documents on behalf of the Successor Agency and City (including, without limitation, assignment and assumption agreements, certificates of acceptance, grant deeds and quitclaim deeds), and administering the Successor Agency's and City's obligations, responsibilities and duties to be performed pursuant to this Resolution and the Purchase Agreement. 7. The Oversight Board does not intend, by adoption of this Resolution, to waive any constitutional, legal and/or equitable rights of the Oversight Board, the Successor Agency or the City under law and/or in equity by virtue of the adoption of this Resolution and actions approved and taken pursuant to this Resolution and, therefore, reserves all such rights of the Oversight Board, the Successor Agency and the City under law and/or in equity. 8. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or 15-4625/118160 5 Oversight Board Reso. 2015-04 application, and to this end the provisions of this Resolution are severable. The Oversight Board declares that its Board would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution. 9. This Resolution shall take effect upon the date of its adoption. PASSED AND ADOPTED by the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach at a meeting thereof held on the 5th day of March, 2015. hairpe n REVIEWED AND APPROVED: INITIATED AND APPROVED: cz-4�El x4 ive Director Deputy Executive Director APPROVED AS TO FORM: Board Counsel 15-4625/118160 6 Res. No. 20I5-04 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUN'TING'TON BEACH ) I, JOAN FLYNN, Secretary of the Huntington Beach Oversight Board of the Successor Agency of the Former City of Huntington Beach Redevelopment Agency, Huntington Beach, California DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Huntington Beach Oversight Board of the Successor Agency of the Former City of Huntington Beach Redevelopment Agency at a meeting held on March 05,2015 and that it was so adopted by the following vote: AYES: Board Members: Delgado, L. Dunn, Fritzal, Hardy, Katapodis NOES: Board Members: None ABSENT: Board Members: A. Dunn, Bone ABSTAIN: Board Members: None SVi f of the Huntington h Oversight Bof the Successor Agen of the Former C Huntington Beach Redevelopment Agency, Huntington Beach, California PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS Address: 7872 Edinger Avenue Huntington Beach,California APN Nos.: 142-081-06,142-081-12, 142-081- 11,142-081-09,142-081-10,and 142-081-28 This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS ("Agreement")is made and entered into as of this,-7"," day of ,2015,by and among the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Seller"), MIRAMAR GP, LP, a California Limited Partnership ("Buyer"), CITY OF HUNTINGTON BEACH, a municipal corporation("City"). The City and Campbell Lodging, Inc. entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions dated January 27, 2012, and as further amended by an Amendment to Purchase and Sale.Agreement and Joint Escrow Instructions dated January 31, 2012, and as further amended by that Escrow Amendment/Supplement dated April 25, 2012, and as further amended by that Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated June 25, 2012,and further amended by that Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 25, 2013, and further amended by that Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 21,2014 (collectively, the"Prior Agreement"). The Prior Agreement pertains to the sale and purchase of that certain real property described in the "Legal Description" attached hereto as Exhibit A and incorporated herein by this reference, and shown on the "Property Map" attached hereto as Exhibit B and incorporated herein by this reference,together with all Improvements as hereinafter defined(collectively,the"Property"). The Prior Agreement was assigned by Campbell to KPHL, LLC pursuant to an Assignment and Assumption dated as of May 29, 2012. The Prior Agreement was further assigned by KPHL, LLC to Buyer pursuant to an Assignment and Assumption Agreement dated as of February 13, 2014, and further amended by that First Amendment to Assignment and Assumption Agreement dated as of May 18,2014. This Agreement shall supersede and replace the Prior Agreement in its entirety, and the Prior Agreement is hereby terminated,canceled and voided in its entirety. - 1 - Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Pordwse&SaleAgeonent v1 3-3-15 This Agreement constitutes an agreement by which the Seller agrees to sell to Buyer, and which the Buyer agrees to purchase,on the terms and conditions hereinafter set forth,the Property. The terms and conditions of this Agreement and the instructions to Lawyers Title or any other title company mutually acceptable to the parties(the"Escrow Holder")with regard to the escrow ("Escrow")created pursuant hereto are as follows: 1. Property. The Property to be acquired by Buyer from Seller under this Agreement consists of six (6) land parcels approximately 1.9 acres in size located at 7872 Edinger Avenue, Huntington Beach, California and Improvements located on the Property, including without limitation a commercial building. Seller currently owns fee title to the Property and all of the Improvements. For purposes of this Agreement,the term"Improvements"shall mean and include all buildings, structures, improvements, pavement, areas improved with asphalt, concrete or similar materials, and fixtures and equipment installed upon or located in or on the Property owned by Seller. For purposes of this Agreement, the term "Property" shall mean and include the above-referenced parcel of land, the Improvements, and all and singular estates, rights, privileges, easements and appurtenances owned by Seller and belonging or in any way appertaining to the Property. 2. Acquisition. a. Purchase Price. The purchase price to be paid by Buyer to Seller for the Property shall be Three Million One Hundred Thousand Dollars no/cents ($3,100,000.00) (the "Purchase Price"). b. Purchase As-Is, Where Is. Buyer expressly acknowledges and agrees, and represents and warrants to Seller and City, that Buyer is purchasing the Property "AS IS, WHERE IS", and "WITH ALL FAULTS", after such inspection, analysis, examination and investigation Buyer cares to make and expressly without Seller's or City's covenant,warranty or representation as to physical condition,title, leases,rents,revenues, income, expenses,operation, zoning or other regulation, compliance with law, suitability for particular purposes or any other matter whatsoever. Neither Seller nor City has any obligation to make repairs, replacements or improvements to the Property, or to pay any fees, costs or expenses related to the Property. Buyer acknowledges and agrees that, except as expressly provided in Paragraph 15, neither Seller, nor City nor any of Seller's or City's respective agents, contractors, consultants, attorneys or representatives have made, make and specifically negate and disclaim and Buyer is not relying on any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to the Property, including, but not limited to, (a) the value of the Property; (b) the income to be derived from the Property; (c) the suitability of the Property for any and all activities and uses which Buyer may conduct thereon, including the possibilities for 2_ Purchase& Sale Agreement and Joint Escrow Instructions Edinger Hotel Parchwe&Sek Agreement vl ' 3-3.15 development of the Property; (d) the habitability, marketability, merchantability, profitability or fitness for a particular purpose of the Property; (e) the manner, quality, state of repair or lack of repair of the Property, (f) the nature, quality or condition of the Property, including without limitation, soils and geology; (g) the compliance of or by the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental authority or body; (h) compliance with any environmental protection, pollution or land use laws, rules, regulation, orders or requirements, including but not limited to, Title III of the Americans with Disabilities Act of 1990, California Health and Safety Code, the Federal Water Pollution Control Act, the Federal Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency regulations at 40 CFR part 261, the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, the Resources Conservation and Recovery Act of 1976, the Clean Water Act, the Safe Drinking Water Act,the Hazardous Materials Transportation Act and the Toxic Substance Control Act, as any of the foregoing may be amended from time to time and regulations promulgated under any of the foregoing from time to time; (i)the presence or absence of Hazardous Materials at,on,under, or adjacent to the Property; 0)the content,completeness or accuracy of the Due Diligence Materials or the Preliminary Report; (k) the conformity of the Property to past, current or future applicable zoning or building requirements; (1) deficiency of any drainage or undershoring; (m)that the Property may be located on or near earthquake faults; (xiv) the existence or non-existence of land use, zoning or building entitlements affecting the Property; (n)the land use status of the Property,including,but not limited to,general plan status, specific plan status, zoning status, subdivision status under the California Subdivision May Act or the subdivision ordinances of the City or any other Entitlements; (o) the applicability of the Federal or California endangered species acts and the existence of any species protected thereunder; (p)any non-compliance of the Property or any improvements thereon with California Civil Code Sections 895, et seq.; or(q) any other matter. Buyer further acknowledges and agrees that having been given the opportunity to inspect the Property and having obtained and examined such information and documentation affecting the Property as Buyer has deemed necessary or appropriate, Buyer is relying solely on its own investigations and review, and not on any information provided or to be provided by Seller or City. As of the date of this Agreement Buyer acknowledges, (i) Buyer has conducted such surveys and inspections and (ii) Buyer has had adequate opportunity to make such inspection of the Property as Buyer has,in Buyer's discretion, deemed necessary or advisable as a condition precedent to Buyer's purchase of the Property and to determine the characteristics listed in this Paragraph and all other aspects of the Property. C. No Obligation to Repair. Any reports, repairs or work required by Buyer are the sole responsibility of Buyer, and Buyer agrees that there is no obligation on the part of Seller or City to make any changes,alterations or repairs to the Property or to cure any violations of law or to comply with the requirements of any insurer. d. No Meruer. The provisions of this Paragraph 2 shall survive the Close of Escrow and shall not be deemed merged into any instrument or conveyance delivered at the Close of Escrow. - 3 - Purchase&Sale Agreement and Joint Escrow Instructions Ed'mga Had Pw%twe&Sak Agromwa vl 3-3-15 3. Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows: a. Buyer Deposit. Within the time periods set forth in the Schedule of Performance attached hereto as Exhibit D and incorporated herein by this reference, Buyer shall deposit or cause to be deposited with Seller, in cash or by a certified or bank cashier's check made payable to Seller or a confirmed wire transfer of funds, a deposit in the amount of One Hundred and Ten Thousand Dollars ($110,000.00) (the `Buyer Deposit"). The parties hereby acknowledge and agree that a portion of the Buyer Deposit in the amount of One Hundred Thousand Dollars ($100,000) (the 1100,000 Non-Refundable Portion of Buyer Deposit") is hereby non-refundable and shall be retained by the Seller as the Seller's property so long as a "Project Denial" (defined below) does not occur. Provided Buyer is not in default of this Agreement, in the event the Planning Commission of the City of Huntington. Beach (the "Planning Commission")does not approve all of the applications submitted by Buyer for permits and entitlements necessary for the development of the Hotel Project (the "Application(s) for Permits and Entitlements") Buyer shall be required to appeal such disapproval(s) to the City Council of the City of Huntington Beach (the "City Council Appeal"). In the event(A)the City Council of the City of Huntington Beach (the "City Council") disapproves any of the Applications(s) for Permits and Entitlements during the City Council Appeal prohibiting the development of the Hotel Project, or (B) the City. Council disapproves an Application(s) for Permits and Entitlements which is only required to be reviewed by the City Council and not the Planning Commission prohibiting the development of the Hotel Project, and the following conditions/events occur, (1) Buyer does not elect to amend and re-submit such denied application(s), and (2) such City Council disapproval is not due to Buyer's failure to submit plans, specifications and drawings for the Hotel Project which do not satisfy applicable City building, zoning and design codes and requirements, including, but not limited to the design requirements set forth in the City of Huntington Beach's Beach and Edinger Corridors Specific Plan (collectively the "Project Denial"), then the $100,000 Non-Refundable Portion of Buyer Deposit shall be refunded to Buyer and this Agreement shall terminate. The Project Denial shall not constitute a default by Seller or City. The Buyer Deposit shall be retained by Seller and,upon the Close of Escrow, shall be credited towards Buyer's payment of the Purchase Price. Buyer acknowledges and agrees that neither Seller nor City is under any obligation to place the Buyer Deposit in an interest bearing account and in the event interest is earned or accrued on such funds, such interest shall be retained by Seller as its sole and separate property. Buyer hereby waives and releases any interest,right or claim in and to any interest that may be earned or accrue on the funds constituting the Buyer Deposit. Buyer has deposited with the Escrow Holder funds in the amount$500,000 as the "original" Buyer Deposit under the Prior Agreement. This Section. 3.a. provides that the Buyer Deposit shall be in the amount of$110,000. To adhere to this Section.3.a,to the extent it has not already done so, Buyer shall have the right to withdraw, from the escrow account established -4- Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement A 3-3-IS with Escrow Holder for the sale of the Property, the total amount of $390,000, so long as a balance of$110,000 of the original funds deposited by Buyer remains in such escrow account pursuant to Section 3.a. of this Agreement. Neither Seller nor City shall not be responsible for any costs related to the aforementioned Buyer withdrawal. b. Closing_Funds. Within five (5) days of written request from Escrow Holder, and in any event no later than three (3) days prior to the Close of Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder, in cash or by a certified or bank cashier's check made payable to Escrow Holder or a confirmed wire transfer of funds, the Purchase Price less the Buyer Deposit delivered to Seller, plus any additional amounts needed to pay Buyer's share of its Closing Costs as provided in Paragraph 11 below. All escrow, recording and title insurance costs shall be paid in accordance with Paragraph 11 below. 4. Development of Property. a Scope of Development. The Property shall be developed by Buyer as a high-quality, four story, 120 to 140-room Hyatt Place hotel or other brand hotel first approved in writing by City as specifically described in the Scope of Development attached hereto as Exhibit F and incorporated herein by this reference (the "Hotel Project"). Buyer shall commence construction of the Hotel Project within the time period set forth in the Schedule of Performance attached hereto as Exhibit D and incorporated herein by this reference. Buyer shall complete demolition the existing building Improvements pursuant to Paragraph 4.b. below, and complete all remediation of the Property pursuant to Paragraph 17 below. b. Demolition of Improvements: Commencement of Construction. Buyer shall demolish and remove the Improvements, including, but not limited to all above grade structures or improvements, located on the Property and commence construction of the Hotel Project in accordance with this Agreement and the Scope of Development on or before the time period set forth in the Schedule of Performance. In the event Buyer fails, within the time periods set forth in the Schedule of Performance, to demolish the existing building Improvements and commence construction of the Hotel Project on the Property pursuant to this Paragraph 4,Buyer shall pay to City on the fast day of each and every month following such failure a fee of$22,445 until such time as Buyer demolishes the existing building Improvements and commences construction of the Hotel Project on the Property in accordance with the terms and conditions of this Agreement. 7 In connection with the demolition activities required herein, Buyer shall contact City for the appropriate procedures pertaining to assessment,remediation and cleanup of such demolition. C. Permits, Entitlements. Before commencement of the demolition, remediation, construction or development of any buildings, structures or other work of improvement upon any portion of the Property, Buyer shall, at its own expense, secure or cause -5 - Purchase&Sale Agreement and Joint Escrow Instructions BdhWHOW Purchase&Sak Agrmnent vl 3-9-15 to be secured, any and all permits and/or entitlements which may be required by the City of Huntington Beach or any other governmental agency affected by such construction,development or work. Before commencement of construction or development of any buildings, structures or other work of improvement upon any portion of the Property,Buyer shall satisfy all conditions to the issuance of any permit required for the development of the Property. Buyer shall obtain all permits and entitlements within the time period set forth in the Schedule of Performance. The parties acknowledge and agree that this Agreement shall be void and of no further force and effect in the event Buyer fails to obtain all permits and entitlements necessary for the development of the Hotel Project within the time periods set forth in the Schedule of Performance and Buyer's failure to timely obtain all permits and entitlements necessary for the development of the Hotel Project is not due to an act or failure to act by Buyer but rather due to a disapproval of such permits and entitlements by the City Council of the City of Huntington Beach. Buyer hereby acknowledges and agrees that Buyer's failure to obtain all permits and entitlements necessary for the development of the Hotel Project within the time periods set forth in the Schedule of Performance due to a disapproval of such permits and entitlements by the City Council of the City of Huntington Beach shall not constitute a default by Seller or City under this Agreement. d. Cost of Demolition and Remediation. The cost of demolishing any Improvements on the Property (the "Demolition Costs") and the cost of remediating any Hazardous Materials located on the Property, including, but not limited to the Release, shall be the sole responsibility of Buyer,without any cost to Seller or City. e. Funds for Demolition and Remediation. (1) On or prior to the date set forth in the Schedule of Performance, Seller or City, as applicable, shall assign to Buyer any rights Seller or City, as applicable, may have to receive funds in the amount of$114,860.86 (or such amount as may be remaining after the first renewal/extension of the Environmental Insurance Policy(defined below)as described in subsection (2), below) pursuant to that certain Settlement Agreement Regarding BB Auto 1, LLC, et al, dated November 1, 2011, between the Redevelopment Agency of the City of Huntington Beach,a public body, corporate and politic and BB Auto L LLC,a California limited liability company (the "Settlement Funds") pursuant to an assignment agreement or equivalent document in a form and substance approved in writing by the City Manager of the City of Huntington Beach or designee (the "City Manager") in his/her absolute discretion. The Settlement Funds shall only be used by Buyer to pay remediation costs and Demolition Costs and for fees and costs for the first renewal/extension of the Environmental Insurance Policy as described in subsection (2), below. The assignment of the Settlement Funds shall not become effective until the Close of Escrow. 6- Purchase& Sale Agreement and Joint Escrow Instructions Edinger HOW Pwdiw&Sale Agreement vl l3-IS (2) On or prior to the date set forth in the Schedule of Performance,to the extent permitted by the insurer, Seller or City, as applicable, shall transfer, or cause to be transferred, to Buyer a Pollution Liability Select Policy issued by American International Specialty Lines Insurance Company Policy No. PLS 15012298 with a policy aggregate limit of $5,000,000 (the "Environmental Insurance Policy") pursuant to a transfer agreement or equivalent document in a form and substance approved in writing by the City Manager in his/her absolute discretion. The transfer of the Environmental Insurance Policy shall not become effective until the Close of Escrow. Seller or City, as applicable, shall endeavor to renew/extend, or endeavor to cause the renewal/extension of, the Environmental Insurance Policy for a 3 to 5 year period (such period to be determined by the Seller). The parties agree that, to the extent available to be used, Settlement Funds(as defined above)shall be used to pay the fees and costs for such fast renewal/extension of the Environmental Insurance Policy. Buyer shall cause the Environmental Insurance Policy to name the following as additional insureds: City of Huntington Beach, a municipal corporation, and the Successor Agency to the Redevelopment Agency of the City of Huntington Beach, and their respective officers, officials, members, employees, contractors and agents. Funds from the Environmental Insurance Policy shall be used by Buyer to pay for the remediation of any unknown Hazardous Materials on the Property pursuant to the terms of such policy. Buyer shall renew/extend the term of the Environmental Insurance Policy, on the same terms, for an additional five year period after the expiration of the renewed/extended term. f. Schedule of Performance. (1) Each party to this Agreement shall perform the obligations to be performed by such party pursuant to this Agreement within the respective times provided in the Schedule of Performance, subject to the extensions of time set forth in Paragraph 25 of this Agreement, and if no such time is provided, within a reasonable time. The Schedule of Performance shall be subject to amendment from time to time upon the mutual written agreement of Buyer and City unless otherwise provided herein. The City Manager may, on behalf of City and without referring such matter to the governing body of City, extend all pending deadlines in the Schedule of Performance. (2) After the Close of Escrow and within the times specified in the Schedule of Performance or within such reasonable extensions of said dates as maybe granted by City, Buyer shall promptly begin and thereafter diligently prosecute to completion the remediation, demolition and construction of the Hotel Project as required in this Agreement. g. Nondiscrimination. Buyer shall not discriminate on the basis of race, gender, religion, national origin, ethnicity, sexual orientation, age or disability in the solicitation, selection, hiring or treatment of any contractors or consultants, to participate in subcontracting/subconsulting opportunities. Buyer understands and agrees that violation of this clause shall be considered a material breach of this Agreement and may result in termination, Purchase& Sale Agreement and Joint Escrow Instructions Winger Hotel PuEdwe&sale Agraema¢vt 3-3-IS debarment or other sanctions. This language shall be incorporated into all contracts between Buyer and any contractor,consultant,subcontractor, subconsultants,vendors and suppliers. h. Local,State and Federal Laws Buyer hereby agrees to carry out development, construction (as defined by applicable law) and operation of the Property, including, without limitation, any and all public works (as defined by applicable law),in conformity with all applicable local,state and federal laws,including,without limitation, all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). Buyer hereby expressly acknowledges and agrees that neither Seller nor City has ever previously affirmatively represented to Buyer or its contractor(s)for the Property in writing or otherwise,in a call for bids or otherwise,that the work to be covered by the bid or contract is not a "public work," as defined in Section 1720 of the Labor Code. Buyer hereby agrees that Buyer shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726, 1776 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Buyer hereby agrees that Buyer shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work)which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Buyer hereby agrees that Buyer shall have the obligation, at Buyer's sole cost, risk and expense, to obligate any party as may be required by Labor Code Sections 1726, 1776 and 1781, as the same may be enacted, adopted or amended from time to time,or any other provision of law. Buyer shall indemnify,protect,defend and hold harmless Seller and City and their respective officers, officials, employees, contractors and agents, with counsel reasonably acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the development, construction(as defined by applicable law) and/or operation of the Property, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (1)the noncompliance by Buyer of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws (including, without limitation, if applicable, the requirement to pay state prevailing wages); (2)the implementation of Chapter 804, Statutes of 2003; (3)the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (4)failure by Buyer to provide any required disclosure, representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726, 1776 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; (5)failure by Buyer to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other - 8- Purchase&Sale Agreement and Joint Escrow Instructions Mover Hotel Purchase&Sale Agmmnent A 3-3-15 provision of law; and/or(6)failure by Buyer to obligate any party as may be required by Labor Code Sections 1726, 1776 and 1781, as the same may be enacted,adopted or amended from time to time, or any other provision of law. It is agreed by the parties that, in connection with the development and construction(as defined by applicable law) of the Property, including,without limitation, any public work (as defined by applicable law), Buyer shall bear all risks of payment or nonpayment of state prevailing wages and/or the implementation of Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs"as used in this paragraph shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing defense and indemnification obligations shall survive termination of this Agreement and the Close of Escrow and shall continue after the City of Huntington Beach issues a permanent Certificate of Occupancy for the Property. i. Disclaimer of Re§Ronsibility_by Seller or City. Neither Seller nor City undertakes nor assumes nor will have any responsibility or duty to Buyer or to any third party to review, inspect, supervise,pass judgment upon or inform Buyer or any third party of any matter in connection with the development or construction of the Improvements, whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Property, any person furnishing the same, or otherwise. Buyer and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Buyer or to any third party by the Seller or City in connection with such matter is for the public purpose of developing the Property, and neither Buyer (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon.Neither Seller nor City shall be responsible for any of the work of construction,improvement or development of the Property. 5. Use Restrictions. The parties hereto acknowledge and agree that the covenants, conditions and restrictions set forth in the Grant Deed attached hereto as Exhibit C (collectively, "Covenants")are an integral part of this Agreement, and that Seller would not have agreed to sell the Property if such Covenants were not included in said Grant Deed. The parties acknowledge and agree that the Covenants are reasonably related to one or more legitimate objectives of the Seller and City, including without limitation, Seller's and City's plan to revamp the Huntington Beach corridor at Edinger Avenue and Beach Boulevard in the City of Huntington Beach. Buyer, on behalf of itself, its successors and assigns, agrees to abide by said Covenants, and to include said Covenants,or a reference to the Covenants set forth in the recorded Grant Deed,in all deeds executed by Buyer,its successors and assigns. 6. Escrow. a Opening of Escrow. For purposes of this Agreement, the Escrow shall be deemed opened on the date Escrow Holder shall have received an executed counterpart of this Agreement from the parties (the "Opening Date"). Escrow Holder shall notify the parties, in T.9- Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Putt'=e&sale Agreement vl 3-3-15 writing, of the Opening Date and the Closing Date, as defined in paragraph b.b, below. In addition, the parties agree to execute, deliver, and be bound by any reasonable or customary supplemental joint escrow instructions of Escrow Holder,or other instruments as may reasonably be required by Escrow Holder, in order to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend, or supersede any portion of this Agreement. If there is any inconsistency between such supplemental instructions and this Agreement,then this Agreement shall control. b. Close of Escrow. For purposes of this Agreement, "Close of Escrow" shall be defined as the date the Grant Deed, the form of which is attached hereto as Exhibit C (the "Grant Deed") conveying the Property to Buyer, is recorded in the Official Records of Orange County, California. The Close of Escrow shall occur on or prior to June 30, 2015 (the "Closing Date"). Buyer shall deliver to Seller a written notice of the anticipated Close of Escrow (the "Notice to Close Escrow) no later than one hundred twenty-five (125) days prior to the Close of Escrow. C. Due Diligence Period. Pursuant to the Prior Agreement, Buyer had a 60 day period (the"Due Diligence Period") to conduct all due diligence research and inspections as it deemed necessary for purposes of approving (i) conditions of title pursuant to Paragraph 7 below, (ii) the Due Diligence Materials, and (iii) to determine, in its reasonable discretion, whether or not(1)the actual construction costs and fees for the development of the Hotel Project were "economically infeasible" or (2) the availability of hotel brands from major franchisors were acceptable to Buyer. In the event Buyer disapproved of any of the items set forth under clauses (i), (ii) or (iii) prior to the expiration of the Due Diligence Period, subject to the terms and provisions set forth in the Prior Agreement, Buyer had the right to terminate the Prior Agreement. Buyer acknowledges and agrees that the Due Diligence Period under the Prior Agreement has expired and there is no new or additional due diligence period provided in this Agreement. Accordingly, Buyer shall have no right to terminate this Agreement based on its due diligence research and inspections. 7. Conditions of Title. It shall be a condition to the Close of Escrow that Seller shall convey good and marketable fee simple title to the Property by the Grant Deed, subject only to the following approved conditions of title(herein the"Approved Condition of Title"): a. A lien to secure payment of real estate taxes,not delinquent. b. Matters affecting the Approved Condition of Title created by or with the written consent of Buyer. - 10- Purchase&Sale Agreement and Joint Escrow Instructions EdiagaHotd - Pmcchm&sale Agrem mt vl 33-(S C. Exceptions which are disclosed by the Preliminary Title Report described in Paragraph 8. a. (1) hereof and which are approved or deemed approved by Buyer in accordance with Paragraph 8.a.(2)hereof. d. Title to the Property shall be conveyed from Seller to Buyer under this Agreement free and clear of any easement,right of way or any other right whatsoever in Seller to access the Property. e. Seller covenants and agrees during the term of this Escrow, Seller will not cause or knowingly permit title to the Property to differ from the Approved Condition of Title described in this Paragraph 7. Any liens, encumbrances, easements, restrictions, conditions, covenants, rights, rights-of-way, or other matters affecting the Approved Condition of Title which appeared of record or were revealed after June 25, 2012, shall be subject to Buyer's approval. Buyer shall have the right to disapprove such matters by delivery of written notice to Seller and City within five(5)days after the date Buyer receives knowledge of such matters,and Seller and City shall each have the right to elect to cure the same,upon delivery of written notice to Buyer within five(5)days after Seller's and City's receipt of such notification from Buyer. 8. Conditions to Close of Escrow. a. Conditions to Buyer's Obligations. The Close of Escrow and Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions for Buyer's benefit on or prior to the dates designated below for the satisfaction of such conditions: (1) Delivery of Due Diligence Materials/Title. Pursuant to the Prior Agreement, City delivered to Buyer copies of the following items, if and to the extent such items were in City's possession: (i) a Preliminary Title Report for the Property and legible copies of all documents, whether recorded or unrecorded, referred to in the Preliminary Title Report; (ii) a copy of a tax bill relating to the Property; (iii) any and all environmental reports relating to the Property, including,but not limited to those certain documents listed on the Document List attached hereto as Exhibit E. and incorporated herein by this reference; and (iv) copies of any and all material documents that pertain to the physical and/or economic condition of the Property (collectively referred to herein as the "Due Diligence Materials"). (2) Review and Approval of Documents and Materials. Buyer hereby acknowledges that Buyer has had an opportunity to review, at Buyer's sole cost and expense, and hereby approves of, all environmental reports, soils inspection, conditions of title, zoning, surveys, all physical inspections of the Property, the Purchase c& Sale Agreement and Joint Escrow Instructions EdhWHoW Pumbne&Sale Agm ew v1 3.3.15 Due Diligence Materials, and all other reports or inspections Buyer has deemed necessary or appropriate in connection with this Agreement. (3) Representations Warranties and Covenants of Seller. Seller shall have duly performed each and every agreement to be performed by Seller hereunder and Seller's representations, warranties, and covenants set forth in Paragraph 15 shall be true and correct as of the Closing Date. (4) No Material Changes. At the Closing Date, there shall have been no material adverse changes in the physical condition of the Property. (5) Inspections and Studies. Buyer hereby acknowledges and agrees that Buyer has approved the results of any and all inspections,investigations,tests and studies (including, without limitation, investigations with regard to zoning, building codes and other governmental regulations, architectural inspections, engineering tests, economic feasibility studies and soils, seismic and geologic reports) with respect to the Property (including all structural and mechanical systems and leased areas) elected or obtained by Buyer. During the term of this Escrow, Buyer, its agents, contractors and subcontractors, upon at least twenty- four (24) hours written notice, shall have the right to enter upon the Property, at reasonable times during ordinary business hours, to make any and all additional inspections and tests as may be necessary or desirable in Buyer's sole judgment and discretion, except that Buyer needs Seller's written approval for any inspection that could materially alter the physical condition of the property or create any violation of any environment requirements. Buyer shall use care and consideration in connection with any of its inspections. Buyer shall indemnify, defend and hold Seller and City and the Property harmless from any and all claims, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of, or resulting from the negligence of Buyer's, and/or Buyer's agents, contractors and/or subcontractors directly resulting from such entry or activities upon the Property. In conducting any inspections, tests or studies, Buyer and its authorized agents and representatives shall (a) be insured for not less than $1,000,000.00 insuring without limitation, coverage for bodily injury, property damage, contractual liability and personal injury liability with respect to the Improvements on the Property or arising out of any of Buyer's use, inspection or occupancy of the Property, or arising out of any of the indemnified claims, and shall name Seller and City as additional insureds, (b) not materially interfere with lawful operation, use, occupancy, and maintenance of the Property, except for normal damage incidental to studies, inspections, investigations and tests, which shall be immediately repaired at Buyer's sole cost to the reasonable approval of Seller,(c) - 12- Purchase&Sale Agreement and Joint Escrow Instructions MAW Hole rumww&sale Agrmwdi vl 3-3a5 not damage any part of the Property or any personal property owned or held by any third party, (d) not injure or otherwise cause bodily harm to Seller or City or any of their respective agents, contractors and employees or any other third party, (e)promptly pay when due the cost of all inspections, tests or studies, and(f)not permit any liens to attach to the Property by reason of the exercise of their rights under this Paragraph 8.a.(5). Seller and City shall each be provided an opportunity to have a representative of Seller or City present during any testing, Seller's and City's rights to indemnity, defense, to be held harmless and insurance coverage under this paragraph shall survive the termination of this Agreement and the Close of Escrow. (6) Vacation of Easements. Seller shall use commercially reasonable efforts to vacate or cause the vacation of those property easements as permitted by the dominant tenement listed on the Preliminary Title Report and identified by Seller in writing which are detrimental to and prohibit the development of the Hotel Project (the "Detrimental Easements"). In the event Seller is unable to deliver title to the Property free of the Detrimental Easements as of the scheduled Closing Date, the scheduled Closing Date shall automatically extend an additional thirty (30) days to permit Seller to vacate or cause the vacation of such Detrimental Easements. Seller and City agree that if Seller is unable to deliver title to the Property free of the Detrimental Easements as of the scheduled Closing Date, including any extensions thereto, then Buyer shall have the option by delivering written notice to Seller and City to cancel the Escrow created pursuant to this Agreement, in which case the entire Buyer Deposit (to the extent such funds have been received by the Seller or delivered into Escrow) shall be immediately refunded to Buyer, including the $2,500 portion considered non- refundable, and the rights and obligations of the parties hereunder shall thereafter terminate per Paragraph 22 a. (7) Title to the Pronertv. Seiler shall deliver title to the Property to Buyer free and clear of any liens except as otherwise disclosed by the Preliminary Title Report and approved in writing by Buyer and Seller. b. Conditions Precedents to Seller's and City's Obligations. For the benefit of Seller and City, the Close of Escrow shall be conditioned upon the occurrence and satisfaction of each of the following conditions (or Seller's and City's waiver thereof, it being agreed Seller and City may waive any or all of such conditions): (1) Permits. Buyer shall have delivered to City a list of all permits required for any demolition and the construction and use of the Improvements, demonstrating to the satisfaction of the City Manager that all variances (if any), - 13 Purchase&Sale Agreement and Joint Escrow Instructions f 6dmgcHotd Purrbwe&Sale Agteanent A 3-3-15 entitlements and approvals have been obtained and that all conditions for the issuance of all necessary permits have been satisfied. In addition, Buyer shall have obtained approval, from the appropriate public agency(e.g., the City of Huntington Beach and Orange County) or utility company, of all plans and permits necessary for Buyer's completion of construction of the Hotel Project, environmental remediation work and utility relocation work related to the development and construction of the Hotel Project. (2) Buyer Deposit. Buyer shall have paid to Seller the Buyer Deposit when and as required pursuant to Paragraph 3.a. above. (3) Buyer's Obligations. Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer, and (4) Documents. Buyer shall have executed, in recordable form as necessary, and delivered into escrow where appropriate, all of the documents, when and as required herein. (5) Buyer's Representations and Warranties. All representations and f warranties made by Buyer in this Agreement shall be true and correct as of the Close of Escrow. 9. Deposits by Seller. At least one (1) business day prior to the Close of Escrow, Seller shall deposit or cause to be deposited with Escrow Holder the following documents and instruments: a. Grant Deed. The Grant Deed conveying the Property to Buyer duly executed by Seller, acknowledged and in recordable form, substantially similar to Exhibit C. Upon receiving said executed Grant Deed, Escrow Holder is instructed to forward a copy of Grant Deed to Buyer so that an original Certificate of Acceptance can be attached. b. Closing Costs. Seller's share of Closing Costs, if any. C. Settlement Funds. A document evidencing assignment of the Settlement Funds pursuant to Paragraph 4.e.(1). above. d. Environmental Insurance Polite. A document evidencing transfer of the Environmental Insurance Policy to Buyer in a form approved in writing pursuant to Paragraph 4.e.(2)above. 14 Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Purcbme&Sale Agmvxot A 3-3-15 10. Deposits by Buver. At least three (3)business days prior to the Close of Escrow, Buyer shall deposit, or cause to be deposited with Escrow Holder,the following: a. Funds. Funds which are to be applied toward the payment of the Purchase Price in the amounts and at the times designated in Paragraph 3 above; and b. Certificate of Acceptance to Grant Deed. An original Certificate of Acceptance, acknowledged and in recordable form, substantially similar to Exhibit C, attached hereto and incorporated herein by this reference. 11. Costs and Expenses. The cost and expense of the Title Policy attributable to ALTA coverage, plus the cost of any endorsements insuring title requested by Buyer, including, but not limited to the costs of an endorsement insuring Buyer's title against any mechanics' liens as of the Closing Date,shall be paid by Buyer. Buyer shall pay any Escrow fees. Buyer shall pay all documentary transfer taxes, if any, payable in connection with the recordation of the Grant Deed. The amount of such transfer taxes shall not be posted on the Grant Deed, but shall be supplied by separate affidavit. Buyer shall pay the Escrow Holder's customary charges to Buyer and Seller for document drafting, recording, and miscellaneous charges. Each party shall be responsible for their respective legal fees and, except as otherwise provided herein, their respective costs in connection with this transaction. 12. Proration. Escrow Holder shall prorate all rents, real estate taxes, bonds or assessments(general and special)as of 12:01 a.m. on the date of the Close of Escrow. a. All operating expenses of the Property including,without limitation,utility charges, maintenance charges, management fees, and other costs and expenses shall be prorated between Buyer and Seller as of 12:01 a.m. on the date of Close of Escrow. Any utility services shall be transferred to the name of the Buyer effective as of the Close of Escrow and Seller shall be relieved of any future liability for such charges incurred after the Close of Escrow. In the event Seller or City has made any utility deposits, Seller or City,as applicable, shall be entitled to a refund of such deposits directly from the utility companies and any future deposits shall be paid directly to the utility companies by Buyer; provided, however, that Buyer may elect, in its sole discretion,to require Seller or City to assign the rights to utility deposits to Buyer in exchange for a credit to Seller through Escrow for the amount of such deposits. b. At least three (3) business days prior to the Closing Date, Seller shall provide to Buyer a schedule of all prorations accompanied by the latest available billings for any operating expenses and statements for rent,if applicable. Buyer and Seller shall agree upon such prorations and notify Escrow Holder on or before two (2) business days prior to the Closing Date. - 15 - Purchase&Sale Agreement and Joint Escrow Instructions EdhpLT Hotel PuwJ=e&S*Agre=ad vl 3-3-15 C. Seller shall pay all bills incurred with respect to the Property prior to the Close of Escrow;provided,however,with respect to bills not received by Seller before the Close of Escrow, Seller shall pay the portion of such bills attributable to the period prior to the Close of Escrow within ten(10)days after Seller's receipt of same. Said covenant of Seller shall survive the Close of Escrow. Buyer shall pay all bills incurred with respect to the Property following the Close of Escrow. d. In the event that there are any unknown amounts to be prorated as of the Close of Escrow,then Seller and Buyer will prorate the same promptly after the Close of Escrow and outside the escrow. 13. Taxes. a. Property Taxes. Seller shall be liable for all Property taxes affecting the Property until the Close of Escrow. Buyer shall be liable for all Property taxes affecting the Properly from and after the Close of Escrow. b. Payment of Taxes. Buyer shall pay all documentary transfer taxes imposed upon the conveyance of the Property to Buyer,if any. 14. Disbursements and Other Actions by Escrow Holder. Upon the Close of Escrow, the Escrow Holder shall promptly undertake all of the following in the manner indicated: a. Prorations. Prorate all matters referenced herein to be prorated by Escrow, based upon the statement delivered into Escrow signed by the parties. b. Recording. Cause the Grant Deed and any other documents which the parties hereto may mutually direct, to be recorded in the Official Records of Orange County, California (the "Official Records"). Escrow Holder is instructed not to affix the amount of documentary transfer tax on the face of the Grant Deed,but to supply same by separate affidavit. C. Funds. (i) From funds deposited by Buyer with Escrow Holder, after payment for all items chargeable to the account of Buyer, disburse the Purchase Price to Seller, (ii)disburse funds for all items chargeable to the account of Seller in payment of such costs from the Purchase Price payable to Seller; and(iii)disburse the balance of such funds,if any,to Buyer. d. Documents to Buyer. When issued,the Title Policy,to Buyer. e. Pay demands of existing iienholders. Pay all demands of lienholders with ;F valid claims as of the Closing Date. - 16 Purchase&Sale Agreement and Joint Escrow Instructions Edmga Hotel Purchase&Sale Agreement A 3-3-15 15. Seller's Representations and Warranties. For purposes of this Agreement "Dissolution Act" shall mean AB xl 26 which was signed by the Governor of California on June 28, 2011, making certain changes to the California Community Redevelopment Law and the California Health and Safety Code by adding Part 1.8 (commencing with Section 34161)and Part 1.85 (commencing with Section 34170)("Part 1.85")to Division 24 of the California Health and Safety Code, as amended by Assembly Bill No. 1484 (Chapter 26, Statutes 2012) which was signed by the Governor of California on June 27, 2012, and as further amended by Assembly Bill No. 1585 which was signed by the Governor of California on September 29, 2012, and as further amended by Senate Bill No. 341 which was signed by the Governor of California on October 13, 2013,and as may be further amended from time to time. Buyer acknowledges and understands that the Property is an"asset"of the Seller and conveyance i of the Property to Buyer and the terms and conditions of this Agreement(and Seller's and City's ability to perform hereunder) are subject to the provisions of the Dissolution Act, including, without limitation, approval of the Oversight Board to Seller("Oversight Board") and the State Department of Finance of the terms and conditions of this Agreement and conveyance of the Property to Buyer. In the event either Seller or City is unable to perform hereunder due to the provisions of the Dissolution Act (including, without limitation, disapproval by the Oversight Board and/or the State Department of Finance of the conveyance of the Property to Buyer as set forth in this Agreement), then the $100,000 Non-Refundable Portion of Buyer Deposit shall be refunded to Buyer and this Agreement shall terminate. Any such inability to perform by either Seller or City shall not constitute a default by Seller or City. In consideration of Buyer entering into this Agreement, and as an inducement to Buyer to purchase the Property, Seller makes the following representations and warranties, each of which is material and is being relied upon by Buyer (and the continued truth and accuracy of which shall constitute a condition precedent to Buyer's obligations hereunder): a. Validly Existing. Seller is a public body, duly formed,validly existing and in good standing under the laws of the State of California. b. Authorization. Except as described above in the introductory paragraphs to this Section, this Agreement has been duly and validly authorized, executed and delivered by Seller,and no other action is requisite to the execution and delivery of this Agreement by Seller. c. Threatened Actions. There are no actions, suits or proceedings pending against,or,to Seller's actual knowledge,threatened or affecting the Property in law or equity. d. Third Party Consents. Except as described above in the introductory paragraphs to this Section, no consents or waivers of, or by, any third party are necessary to permit the consummation by Seller of the transactions contemplated pursuant to this Agreement. - 17- Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agromom♦1 33-15 e. No Violation of Law. To the Seller's actual knowledge, there is no violation of law or governmental regulation by Seller with respect to the Property. f. Condemnation. There are no pending, or, to the best of Seller's actual knowledge, threatened proceedings in eminent domain or otherwise, which would affect the Property or any portion thereof. g. Comvliance with Law. To Seller's actual knowledge, all laws, ordinances, rules, and requirements and regulations of every governmental agency, body, or subdivision thereof bearing on the Property have been complied with by Seller. h. Agreements. Seller is not a party to any agreement (whether oral or written) affecting or relating to the right of any party with respect to the possession of the Property, or any portion thereof, which are obligations which will affect the Property or any portion thereof subsequent to the recordation of the Grant Deed, except as may be reflected in the Approved Condition of Title. i. Documents. To Seller's actual knowledge, all documents delivered to Buyer pursuant to this Agreement are true and complete copies of originals, without any representation or warranty as to the contents or accuracy thereof. j. Occupancy Agreements. There are no leases, subleases, occupancies or tenancies in effect pertaining to the Property, and Seller has no knowledge of any oral agreements with anyone, including tenants,with respect to the occupancy of the Property. k. Hazardous Materials. Neither Seller nor City makes any representation or warranty, express or implied, regarding any conditions of the Property, except that Seller represents and warrants to Buyer that Seller or City has/have disclosed and provided to Buyer all information; true, correct and complete copies of studies, reports, investigations and contracts; and other obligations concerning or related to the Property which are in Seller's possession or which are known by and available to Seller, including, without limitation, correspondence, studies, reports and investigations concerning the Property's environmental condition and the presence or absence of Hazardous Materials in, on or under the Property and its compliance with environmental laws. For purposes of this Agreement,the term"Hazardous Materials"means any substance, material or waste which is regulated as hazardous/contaminating or potentially hazardous/contaminating 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, or 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; (iii) defined as a "hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the - 18 - Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase 8c Sak Agreement vl 3-3-IS 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) lead; (viii) a polychlorinated biphenyl; (ix) 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; (x) designated as a "hazardous substance"pursuant to Section 311 of the Clean Water Act (33 U.S.C. Section 1317); (xi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act (42 U.S.C. Section 6903); (xii) defined as a "hazardous substance"pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act(42 U.S.C. Section 9601); (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, with respect to which any governmental regulations or requirements provide for special handling in its use, transportation, generation, collection, storage, treatment or disposal; (xiv) any substance, product, waste, or other material of any nature whatsoever which may give rise to liability under any of the above statutes or under any statutory or common law theory based on negligence, trespass, intentional tort, nuisance or strict liability or under any reported decisions of a state or federal court; (xv) petroleum or crude oil other than petroleum and petroleum products which are contained within regularly operated motor vehicles;and(xvi)asbestos. 1. Due Diligence Materials. To Seller's knowledge,there are no other reports relating to the physical condition of the Property that are in existence, but not in Seller's possession. Seller's representations and warranties made in this Paragraph 15 shall be continuing and shall be true and correct on and as of the Close of Escrow. The truth and accuracy of Seller's representations and wan-antics made herein shall survive the Close of Escrow or termination of this Agreement for a period of twelve(12)months. 16. Buyer's Representations and Warranties. in consideration of Seller and City entering into this Agreement, and as an inducement to Seller to sell the Property to Buyer,Buyer makes the following representations and warranties, each of which is material and is being relied upon by Seller and City(the continued truth and accuracy of which shall constitute a condition precedent to Seller's and City's obligations hereunder): a. Buyer is a corporation, duly formed, validly existing and in good standing under the laws of the State of California. b. Buyer has the full right, power and authority to enter into this Agreement and the instruments referenced herein;and to consummate the transactions contemplated hereby. C. The persons executing this Agreement, the instruments referenced herein, and any other documents executed and delivered on behalf of Buyer have the full right, power - 19- Purchase&Sale Agreement and Joint Escrow Instructions 5dmger Hotel Ptmehese&Selo Agro mmt vl 3-3-15 and authority to do so and have been duly authorized to do so by Buyer, and no other persons are required to execute this Agreement on behalf of Buyer. d. This Agreement has been,and all documents executed by Buyer under this Agreement which are to be delivered to Seller at the time of Close of Escrow will be, duly authorized, executed, and delivered by Buyer, and is, or as to all documents to be executed by Buyer at the Close of Escrow,will be, legal,valid, and binding obligations of Buyer, and do not, and at the Close of Escrow will not violate any provisions of any agreement or judicial order to which Buyer is a party or to which it is subject. C. The representations and warranties of Buyer set forth in this Agreement shall be continuing and shall be true and correct on and as of the Close of Escrow. 17. Environmental Remediation. a. Neither Seller nor City makes any representation or warranty,express or implied,regarding any conditions of the Property. b. Neither Seller nor City has any responsibility or obligation to remediate any Hazardous Materials on, under or about the Property. Any liability of Seller or City with respect to any Hazardous Materials on, under or about the Property shall terminate upon the conveyance of the Property to Buyer. Buyer acknowledges and agrees that neither Seller nor City shall have any responsibility to pay for any remediation costs. To the extent required by any applicable laws, statutes,regulations, or regulatory orders,Buyer shall have sole responsibility to perform any remediation of Hazardous Materials existing on the Property. Buyer agrees to perform such remediation under the oversight of the Orange County Department of Environmental Health (DEH), the City of Huntington Beach Fire Department or another appropriate regulatory agency, including, without limitation, receiving approval of a remedial action plan(or plan of similar effect)prior to construction activities. Buyer shall comply with all federal, state and local laws, statutes, regulations and regulatory orders in performing any remediation any Hazardous Materials on,under or about the Property. C. Hazardous Materials have been discovered within the Property (the "Release")as identified in that certain Phase I(as defined in Exhibit E)and Limited Phase U(as defined in Exhibit E). Buyer,at Buyer's sole cost and expense, shall take all necessary actions to remediate the Release in accordance with all federal, state, and local regulations, including, without limitation, performing any and all required removal action(s), mitigation actions or remedial actions to address the Release pursuant to the Remediation Work Plan (as defined in Exhibit E) and the City Fire Department Additions to Remediation Work Plan (as defined in Exhibit E). Furthermore,Buyer agrees that it shall defend, indemnify,and hold harmless Seller, City and their respective employees, agents, attorneys, successors, and assigns from and against any and all claims, liabilities, penalties, fines,judgments, forfeitures, losses, costs, or expenses -20- Purchase&Sale Agreement and Joint Escrow Instructions Efter Hotel " Purchase&Sate Agreement vl 3.3.15 (including reasonable attorneys' fees,consultants fees, and expert fees)arising from or caused in whole or in part, directly or indirectly, related to the Release or remediation of the Release and from any and all costs incurred in connection with any site investigation and any and all costs for repair,cleanup,detoxification or decontamination,or other remedial action of the Property. d. Neither Seller nor City makes any representations or warranties, express or implied,that the Remediation Work Plan, City Fire Department Additions to Remediation Work Plan or any other remediation plan approved in connection with this Agreement will remediate all Hazardous Materials on, in, under or about the Property. Buyer agrees that it will accept the Property with knowledge that Hazardous Materials may exist on, in, under or about the Property at the time of conveyance, and may also exist following the completion of Buyer's remediation effort, As Buyer will accept the Property with the potential for some residual contamination to remain following remediation, neither Seller nor City shall have any liability for, and shall not defend or indemnify Buyer with respect to any liability,loss or claim resulting from the existence of Hazardous Materials on,in,under or about the Property. e. Buyer shall be responsible for the continuing remediation of the Release or any other unknown Hazardous Materials on, under or about the Property in accordance with all applicable laws and regulations. f. Buyer further agrees, at its sole cost and expense, to properly handle any contaminated media encountered during future development of the Property in accordance with all applicable laws and regulations and in a manner which protects human health and the environment. Buyer also agrees, at its sole cost and expense, to utilize proper health and safety protocols during on-site activities and to implement and maintain appropriate engineering controls to prevent human exposure to contaminated media remaining on the Property. g. Upon completion of any remediation, Buyer (on its own or through an environmental consultant) shall prepare a closure report documenting the remediation that occurred on, under or about the Property and requesting that the regulatory agency providing oversight issue a "No Further Action" letter, or other document of similar effect. Buyer will receive such "No Further Action" letter (or document of similar effect) prior to obtaining its temporary certificate of occupancy. h. Buyer shall defend, indemnify and hold harmless Seller, City and their respective officers, representatives, agents, employees, contractors and attorneys from and against any claims, liability, injury, damages,costs and expenses(including,without limiting the generality of the foregoing, the cost of any required remediation of Hazardous Materials and the cost of attorneys' fees) which may be sustained as the result of the presence or remediation of ` Hazardous Materials on,under or about the Property. The foregoing defense and indemnification obligations shall survive termination of this Agreement and the Close of Escrow, @21 Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase t sate ngeeeent vl 3-3-ts 18. Damage or Condemnation Prior to Closing. a. Material Damage or Destruction. In the event of material damage to or destruction of the Property prior to the Close of Escrow, through no fault of Seller, Buyer shall have the right, but not the obligation, exercisable by giving notice to Seller and City within fifteen (15) days after receiving written notice of such damage or destruction, either (i) to terminate this Agreement, in which case no party shall have any further rights or obligations hereunder except that (a) all funds deposited into Escrow or documents in Escrow shall be returned to the party depositing the same, and(b) Buyer and Seller each shall be responsible for one-half of any title or escrow cancellation fee, or(ii)to accept the Property in its then condition and to proceed with the Close of Escrow, in which event upon the Close of Escrow,Buyer shall be entitled to receive an assignment of all of Seller's rights to any insurance proceeds payable by reason of such damage or destruction. If Buyer elects to proceed under clause (ii) above, Seller shall not compromise, settle or adjust any claims to such proceeds without Buyer's prior written consent. b. Eminent Domain. In the event that prior to the Close ot-Escrow, all or any material portion of the Property is subject to a taking or a threatened taking by a public authority, Buyer shall have the right, but not the obligation, exercisable by giving notice to Seller and City within fifteen (15) days after receiving written notice of such taking, either (i) to terminate this Agreement, in which case no party shall have any further rights or obligations hereunder except that (a) all funds deposited into Escrow or documents in Escrow shall be returned to the party depositing the same, and (b)Buyer and Seller each shall be responsible for one-half of any title or escrow cancellation fee, or(ii)to accept the Property in its then condition and to proceed with the Close of Escrow without an abatement or reduction in the Purchase Price, in which case Buyer shall be entitled to receive an assignment of all of Seller's rights to any condemnation award payable by reason of such taking. If Buyer elects to proceed under clause(ii)above, Seller shall not compromise, settle or adjust any claims to such award without Buyer's prior written consent. C. Non-Material Taking or Damage. In the event that prior to the Close of Escrow, any non-material portion of the Property is damaged, destroyed or subject to a taking or a threatened taking by a public authority,Buyer shall accept the Property in its then condition and proceed with the Close of Escrow without any abatement or reduction in the Purchase Price, in which case Buyer shall be entitled to receive an assignment of all of Seller's rights to (i) any applicable insurance proceeds; and/ or(ii) any condemnation award payable by reason of such taking. In the event of any such non-material damage, destruction or taking, Seller shall not compromise, settle or adjust any claims to such award without Buyer's prior written consent. 19. Notices. Formal notices, demands and communications between the parties shall be deemed sufficiently given if dispatched by first class mail,registered or certified mail,postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of . -22 - Purchase&Sale Agreement and Joint Escrow Instructions E&W Hotel PmchW9&SekASrewxW Y1 3345 a "hard" copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), to the addresses of the parties as set forth below. Such written notices, demands and communications may be sent in the same manner to such other addresses as any party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission (delivered during normal business hours) followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. To Buyer: Miramar GP, LP 10660 Scripps Ranch Blvd., Suite 100 San Diego, California 92131 Attention: Suresh Patel To City: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: City Manager With a Copy To: Office of the City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, California 9264 Attention: City Attorney To Seller: Successor Agency c/o City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attention: Executive Director With a Copy To: Office of General Legal Counsel City of Huntington Beach 2000 Main Street Huntington Beach, California 9264 Attention: General Legal Counsel Notice of change of address shall be given by written notice in the manner detailed in this paragraph. Rejection or other refusal to accept, or the inability to deliver because of changed - 23 - Purchase & Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement v1 3-3-15 T i address of which no notice was given, shall be deemed to constitute receipt of the notice, demand,request,or communication sent. 20. Legal Fees. Each party shall be responsible for their respective legal fees and costs in connection with any action or suit against the other parry hereunder arising out of this Agreement. 21. Assignment. Buyer shall not be entitled to assign this Agreement without the prior written consent of Seller's Executive Director and the City's City Manager, which consent shall not be unreasonably withheld. a. Prior to the issuance of the permanent Certificate of Occupancy by the City for the Hotel Project, Buyer shall not assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale,transfer,conveyance or assignment of the whole or any part of the Property,or the Improvements without prior written approval of the Seller's Executive Director or the City's City Manager. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Property. b. In the event Buyer does assign this Agreement or any of the rights herein, or does sell,transfer, convey or assign the Property or the buildings or structures thereon prior to the issuance of the permanent Certificate of Occupancy by the City for the Hotel Project without the written approval of the Executive Director and City Manager, Seller and City shall each have the right to terminate this Agreement. a t C. In the absence of a specific written agreement by the Executive Director and City Manager no such sale, transfer, conveyance or assignment of this Agreement or the Property(or any portion thereof), or approval by the Executive Director and City Manager of any such sale, transfer, conveyance or assignment, shall be deemed to relieve Buyer or any other party from any obligations under this Agreement. d. Except for a Permitted Transfer (defined below), Buyer represents and agrees for itself and any successor in interest that prior to the issuance of the permanent Certificate of Occupancy by the City for the Hotel Project, without the prior written approval of the Seller and City, there shall be no significant change in the ownership of Buyer or in the f relative proportions thereof, or with respect to the identity of the parties in control of Buyer or the r degree thereof, by any method or means. The term "Permitted Transfer"used herein shall mean an assignment of this Agreement and all of Buyer's interests in the Property to a limited liability company or limited partnership and Buyer,with Jack B. Campbell,J.Alan Campbell, and Martin A. Campbell as the principal owners (collectively the "Principals"), collectively or individually, shall enter into a management agreement, subject to the reasonable written approval of the City Manager or designee for the limited purpose of ensuring compliance with the terms and conditions of this paragraph, with assignee to develop, manage and operate the Hotel Project(the -24- Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Pmehase$Sale Agrommm vt 3-3-l5 "Management Agreement");provided,however that such Principals have power and control over management and development of the Hotel Project and further provided that such assignment is memorialized in an assignment and assumption agreement the form and content of which is first approved in writing by the Executive Director and City Manager or designees. The documentation evidencing any such transfer shall be subject to the reasonable approval of the Executive Director and City Manager or designees in accordance with the standards set forth in the respective provisions of this Agreement. Any change in the identity of the management company designated in the Management Agreement, including any amendments thereto, shall be first approved in writing by the Executive Director and City Manager or designees, in the Executive Director and City Manager or designees reasonable discretion. e. Buyer shall promptly notify the Seller and City of any and all changes whatsoever in the identity of the partners of Buyer, of which Buyer or any of its officers and/or partners have been notified or otherwise have knowledge or information.This Agreement may be terminated by the Seller or City if there is any significant change (voluntary or involuntary) in partnership,management or control of Buyer(other than such changes occasioned by the death or incapacity of any individual) prior to the issuance of the permanent Certificate of Occupancy by the City for the Hotel Project, except in the event of a Permitted Transfer. The term"control"as used herein shall mean(i)with respect to a corporation or limited liability company is the right to exercise or control, directly or indirectly, 49% or more of the voting rights attributable to the controlled corporation, and (ii) with respect to any individual, partnership, trust, other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direction of the management or policies of the controlled entity. 22. Legal and Equitable Enforcement of this Agreement. a. Default by Seller. In the event the Close of Escrow and the acquisition of the Property by Buyer does not occur by reason of any default by Seller, Buyer shall be entitled to the return of the Closing Funds (i.e., Escrow fees if deposited with Escrow and the refundable portion of the Buyer Deposit if deposited with Escrow or Seller) not including the ONE HUNDRED THOUSAND DOLLAR($100,000)Non-Refundable Portion of Buyer Deposit, and all of its reasonable out-of-pocket expenses incurred in connection with the transaction in an amount not to exceed ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000) or, alternatively, shall have the right to pursue specific performance of this Agreement, if filed within one hundred and twenty(120)days after the scheduled Closing Date, and Buyer expressly waives any rights it may have to seek or obtain damages or any other act or thing, of any kind or character, due to the default by Seller or City in the terms hereof; excluding surviving obligations, if any. Out of pocket expenses shall include, reasonable attorneys' fees and expenses, consultant's fees and expenses, expenses related to inspection and investigation of the Property (including, without limitation, environmental studies and reports and survey fees and expenses)and escrow fees and title fees and expenses. -25 - Purchase&Sale Agreement and Joint Escrow Instructions Edit Hotel Purchase&sale Agremimt vl 3-3-15 b. Default By Prior to the Close of Escrow. IN THE EVENT THE CLOSE OF ESCROW AND THE ACQUISITION OF THE PROPERTY BY BUYER DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF A DEFAULT OF BUYER, BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE BUYER AND SELLER DO HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY IS AND SHALL BE, AS SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), THE AMOUNT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) (THE "LIQUIDATED DAMAGE AMOUNT"). THE PAYMENT TO SELLER OF THE LIQUIDATED DAMAGE AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED BY SELLER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. UPON DEFAULT BY BUYER, THIS AGREEMENT SHALL BE TERMINATED AND NO PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER AND THE SURVIVING OBLIGATIONS HEREUNDER. COUNTERPART Buyer's Initials Seller's Initials b.1.Notice and Cure Periods Prior to Close of Escrow. Prior to the Close of Escrow, if a monetary event of default occurs, prior to exercising any remedies set forth in Paragraphs 22a. and 22 b. above, as applicable, the non- defaulting party shall give the party in default written notice of such default. The party in default shall have a period of ten (10) business days after such notice is given within which to cure the default prior to exercise of the applicable remedies set forth in Paragraphs 22 a. and 22 b. above by the injured party. Prior to the Close of Escrow, if a non-monetary event of default occurs, prior to exercising any remedies set forth in Paragraphs 22a. and 22 b. above, as applicable, the non- defaulting party shall give the party in default written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the non-defaulting party. If the default is - 26 - Purchase& Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement vl 3-3-15 b. Default By Buffer Prior to the Close of Escrow. fN i HE EVENT THE CLOSE OF ESCROW AND THE ACQUISITION OF THE PROPERTY BY BUYER DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF A DEFAULT OF BUYER,BUYER AND SELLER AGREE THAT IT WOULD BE IMIPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER THEREFORE BUYER AND SELLER DO HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY IS AND SHALL BE, AS SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), THE AMOUNT OF ONE HUNDRED THOUSAND DOLLARS ($100,000) (THE "LIQUIDATED DAMAGE AMOUNT"). THE PAYMENT TO SELLER OF THE LIQUIDATED DAMAGE AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED BY SELLER THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. UPON DEFAULT BY BUYER, THIS AGREEMENT SHALL BE TERMINATED AND NO PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER AND THE SURVIVING OBLI94TIONS HEREUNDER *::�/l A — Buyer's Initials S#1eki Initials COUNTERPART b.1.Notice and Cure Periods Prior to Close of Escrow. Prior to the Close of Escrow, if a monetary event of default occurs, prior to exercising any remedies set forth in Paragraphs 22a. and 22 b. above, as applicable, the non- defaulting parry shall give the party in default written notice of such default. The party in default shall have a period of ten (10)business days after such notice is given within which to cure the default prior to exercise of the applicable remedies set forth in Paragraphs 22 a. and 22 b. above by the injured party. Prior to the Close of Escrow, if a non-monetary event of default occurs, prior to exercising any remedies set forth in Paragraphs 22a. and 22 b. above, as applicable, the non- defaulting party shall give the party in default written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the non-defaulting party. If the default is -26- Purc'hase&Sale Agreement and Joint Escrow Instrructions EakwHatd Radme&Sak Apecoait v1 3.3-15 such that it is not reasonably capable of being cured within thirty (30) days, rty in and the pa default (i) initiates corrective action within said thirty (30) day period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible,then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the non-defaulting party,but in no event shall such period exceed sixty(60)days from the date such notice is received or deemed received. In no event shall the non-defaulting party be precluded from exercising the remedies set forth in Paragraphs 22 a. and 22 b. above, as applicable, if its security becomes or is about to become materially jeopardized by any failure to cure a default. c.Default byBUZ After the Close of Escrow. The parties hereto acknowledge and agree that the following terms and provisions shall apply in connection with an event of default pursuant to this Agreement that occurs after the Close of Escrow: (1) After the Close of Escrow, if a monetary event of default occurs, prior to exercising any remedies hereunder,the non-defaulting party shall give the party in default written notice of such default. The party in default shall have a period of ten(10)business days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. f (2) After the Close of Escrow, if a non-monetary event of default occurs,prior to exercising any remedies hereunder, the non-defaulting party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the non-defaulting party. If the default is such that it is not reasonably capable of being cured within thirty(30) days, and the party in default (i)initiates corrective action within said thirty(30) day period,and(ii)diligently,continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the non-defaulting party,but in no event shall such period exceed sixty(60)days from the date such notice is received or deemed received. In no event shall the non- defaulting Party be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default. (3) After the Close of Escrow, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), any party may institute legal action to cure,correct or remedy any default,to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of Orange County, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California. -27 - Purchase&Sale Agreement and Joint Escrow Instructions Uinga Hated Pardbaee&sale Agreement vl 3.3-15 (4) In the event that any legal action is commenced by the Buyer against the City, service of process on the City shall be made by personal service upon the City Manager or in such other manner as may be provided by law. In the event that any legal action is commenced by the Buyer against the Seller, service of process on the Seller shall be made by personal service upon the Seller's Executive Director or in such other manner as may be provided by law. (5) In the event that any legal action is commenced by the Seller or City against the Buyer, service of process on the Buyer shall be made by personal service upon the Buyer (or upon an officer of the Buyer) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law. (6) Except with respect to rights and remedies expressly declared to be exclusive in this Agreement,the rights and remedies of the parties are cumulative, and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. ( ) Subject to the notice and cure provisions of this Paragraph 22 c, if any party defaults with regard to any provisions of this Agreement, the defaulting party shall be liable to the non-defaulting party for any damages caused by such default, and the non-defaulting party may, after such notice and opportunity to cure(but not before)commence an action for damages against the defaulting party with respect to such default. (8) After the Close of Escrow, if any party defaults with regard to any of the provisions of this Agreement and subject to the notice and cure provisions of this Paragraph 22 c., the non-defaulting party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. (9) The non-defaulting party shall give written notice of default to the party in default, specifying the default complained of by the non-defaulting party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement, any failures or delays by any party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by any party in asserting any of its rights and remedies shall not deprive any party of its right to institute and maintain any 28 Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel Pmhase&Sale Agram=a rl 3-3-15 actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 23. Miscellaneous. a. Survival of Covenants. The covenants, representations and warranties of both Buyer and Seller set forth in this Agreement shall survive the recordation of the Grant Deed and the Close of Escrow,unless provided otherwise. b. Required Actions. The parties each agree to execute such instruments and documents and to diligently undertake such actions as may be reasonably required in order to consummate the purchase and sale herein contemplated, and shall use their best efforts to accomplish the Close of Escrow in accordance with the provisions hereof. C. Time of Essence.Time is of the essence of each and every term,condition, obligation, and provision hereof. d. Countemarts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which,together, shall constitute one and the same instrument. e. Captions. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the parties hereto, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof. f. No Real Estate Commissions; No Brokerage Fees; Indemnity. Buyer and Seller each represent and warrant to the other parties that neither has dealt with or engaged a broker in connection with this transaction, and agrees to indemnify and save harmless the other party from and against all claims, costs, liabilities and expense (including court costs and reasonable attorneys' fees) incurred by any other party as a result of a breach of this representation. Buyer shall indemnify, defend and hold harmless the Seller,City and their respective elected and appointed officials, officers, employees, agents, contractors and consultants (individually and collectively, the "Indemnitees") from and against any and all claims, lawsuits, judgments, liability, injury or damage, including without limitation associated and reasonably incurred attorneys' fees and court and litigation costs arising out of the defense of any such claims and/or lawsuits, and actual attorneys' fees and court and litigation costs that may be awarded by the court and required to be paid by the Indemnitees resulting or arising from or in any way connected to the Hotel Project or this Agreement. Buyer shall not be responsible for any liability, loss,damage, cost, or expense(including reasonable attorney's fees and court costs) arising from -29- Purchase&Sale Agreement and Joint Escrow Instructions Edinger Hotel PIUCi�t&SB1e 1�gRp1lQll Yl 3-3-15 or as a result of the gross negligence or willful misconduct of the Indemnitees. Seller and City shall each have the sole discretion to select legal counsel to represent the Seller's or City's legal interests in the defense of any such lawsuits, claims or other actions filed against the Seller or City. The obligation of the Seller and/or City to pay any costs in connection with this Agreement shall be a special limited obligation of the Seller and/or City payable exclusively from funds paid by the Redevelopment Agency of the City of Huntington Beach,a public body,corporate and politic (the "Agency") and its successors. Nothing contained herein shall be construed to create any obligation payable from the City of Huntington Beach's general fund. g. No Oblivations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon,nor obligate any of the parties hereto,to any person or entity other than the parties hereto. h. Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference. i. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. j. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. k. Fees and Other Expenses. Except as otherwise provided herein, each of the parties shall pay its own fees and expenses in connection with this Agreement. 1. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. m. Severability. In the event that any provision of this Agreement or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal,void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. n. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day(such as the day Escrow opens),and including -30 Purchase&Sale Agreement and Joint Escrow Instructions Efta Howl Pwdme&Sale Agroemera v1 3-3-15 the last day, unless the last day is a holiday or Saturday or Sunday, in which case the time shall be extended to the next business day. o. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. P. Conflicts of Interest. No member, official or employee of the parties shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is, directly or indirectly,interested. q. Gender and Number. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. r. Notice Of Cancellation Rescinded. Buyer acknowledges and agrees that (i) Buyer's purported notice of cancellation of the Prior Agreement set forth in that certain letter dated January 30, 2012 and addressed to Seller and/or City, and (ii) Buyer's proposed Amendment #1 to Purchase and Sale Agreement and Joint Escrow Instructions (7872 Edinger Ave. Huntington Beach) dated January 30, 2012 and attached to such letter, were rescinded in their entirety and of no further force and effect. S. Consent to Assiamnent/Transfer. Buyer acknowledges and agrees that it approves, consents to and ratifies any transfer by the City of the City's ownership interests in the Property to the Seller and'any assignment by City of any and all related agreements to the Seller. By operation of Assembly Bill No. 26 (201 I-2012 1 st Ex. Sess.) ("AB 26"), the former Redevelopment Agency of the City of Huntington Beach("Redevelopment Agency")was dissolved on February 1, 2012. Pursuant to AB 26, the City Council of the City of Huntington Beach elected to be the Successor Agency to the former Redevelopment Agency(the"Successor Agency"). Pursuant to AB 26, the Successor Agency is the successor-in-interest to the former Redevelopment Agency. The Successor Agency is a legal entity that exists separate and independent of the City of Huntington Beach. 24. Indemnification of Escrow Holder. a. If this Agreement or any matter relating hereto shall become the subject of any litigation or controversy, Buyer and Seller agree, jointly and severally, to hold Escrow Holder free and harmless from any loss or expense, including attorney's fees, that may be -31 - Purchase&Sale Agreement and Joint Escrow Instructions FdingerHOW Pwchm&SWe Agreceeml A }3-15 suffered by it by reason thereof except for losses or expenses as may arise from Escrow Holder's negligent or willful misconduct. If conflicting demands are made or notices served upon Escrow Holder with respect to this Agreement, the parties expressly agree that Escrow Holder shall be 4 entitled to file a suit in interpleader and obtain an order from the court requiring the parties to t interplead and litigate their several claims and rights among themselves. Upon the filing of the action in interpleader,Escrow Holder shall be fully released and discharged from any obligations imposed upon it by this Agreement,and b. Escrow Holder shall not be liable for the sufficiency or correctness as to form, manner, execution, or validity of any instrument deposited with it, nor as to the identity, authority or rights of any person executing such instrument,nor for failure of any party to comply with any of the provisions of any agreement, contract or other instrument filed with Escrow Holder, or referred to herein. Escrow Holder's duties hereunder shall be limited to the safekeeping of all monies, instruments,or other documents received by it as Escrow Holder,and for their disposition in accordance with the terms of this Agreement. 25. Enforced Delay Extension of Time of Performance. Performance by any party hereunder shall not be deemed to be in default where delays or defaults are due to war, insurrection, strikes,lock-outs,riots,floods,earthquakes,fires,casualties,acts of God,acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure necessary labor,material or tools, delays of any contractor, sub-contractor or supplier, acts of the other party, acts or failure to act of the Seller or City(in any other capacity other than as"Seller" herein) or any other public or governmental agency or entity. An extension of time for any such cause(a"Force Majeure Delay")shall be for the.period of the enforced delay and shall commence to run from the time of the commencement of the cause,if notice by the party claiming such extension is sent to the other parties within thirty(30) days of knowledge of the commencement of the cause. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other•parties written notice describing the event, its cause,when and how such party obtained knowledge,the date and the event commenced,and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within thirty(30)days after it obtains actual knowledge of the event. 26. Entire Agreement Waivers and Amendments. a. This Agreement shall be executed in four (4) duplicate originals each of which is deemed to be an original. This Agreement and its attached Exhibits shall constitute the entire understanding and agreement of the parties. -32 - Purchase&Sale Agreement and Joint Escrow Instructions E ftw Hotel ?wdme&8do A&renTAM v] 3.3-15 b. This Agreement integrates an of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all (or any part of or any interest in)the Property. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings,representations,and statements,oral or written. C. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the parties, and all amendments hereto must be in writing and signed by the appropriate authorities of the parties to be bound thereby. d. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. The signature page of this Agreement may be detached from and added to any counterpart of this Agreement identical in form. e. The City Manager, or designee, on behalf of the City and the Executive Director, or designee, on behalf of the Seller, are each authorized to make such non-substantive changes to this Agreement or the documents and instruments attached to this Agreement as may be necessary or appropriate to effectuate this Agreement. [Remainder of Page Intentionally Blank] [Signatures on Following Page] �33 - Purchase&Sale Agreement and Joint Escrow Instructions >:a�eeoml Putd=e&Sale Agmm=t vl 3-3.15 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Ma Dated ATTESTED: City erk INIT ND APPROVED: ger APPROVED AS TO FORM: City Attorney [Signatures Continue on Following Page] - 34 - Purchase& Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement v1 3-3-15 "SELLER" SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH .r-r Ch ' erson U Dated ATTESTED: Cler INITI T ND APPROVED: -)2, E ut' e birector APPROVED AS TO FORM: 1 ,4— General Legal Counsel - 35 - Purchase & Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement vl ' 3-3-15 "BUYER" MIRAMAR GP, LP, a California limited partnership By: Excel Hospitality, Inc., a California corporation Its: General Partner Dated: 3 15 By: Suresh Patel, President - 36 - Purchase& Sale Agreement and Joint Escrow Instructions Edinger Hotel Purchase&Sale Agreement v 1 3-3-15 { i EXHIBIT A LEGAL DESCRIPTION Real Property in the City of Huntington Beach,Orange County, State of California,described as follows: PARCEL A: (APN: 142-081-06) LOTS 19 AND 20 IN TRACT 417, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 16,PAGE 47,MISCELLANEOUS MAPS,RECORDS OF SAID ORANGE COUNTY. EXCEPTING THEREFROM THE NORTH 20 FEET THEREOF. EXCEPTING THEREFROM ALL WATER AND/OR WATER RIGHTS APPURTENANT TO AND/OR CONNECTED WITH AND/OR UNDER SAID LAND, AS SET FORTH IN AN INSTRUMENT TO BOULEVARD GARDENS WATER COMPANY RECORDED JUNE 2, 1926 IN BOOK 652,PAGE 253,DEEDS. ALSO EXCEPTING ALL OIL, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER LYING MORE THAN 500 FEET BELOW THE SURFACE OF SAID LAND,TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE AND OCCUPY ALL PARTS OF SAID LAND LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND THEREOF FOR ANY AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR MINERALS FROM SAID LANDS BUT WITHOUT, HOWEVER, THE RIGHT TO USE EITHER THE SURFACE OF SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER AS RESERVED IN THE DEED RECORDED OCTOBER 24, 1988 AS INSTRUMENT NO. 88-543781,OF OFFICIAL RECORDS. PARCEL B: (APN: 142-081-28) LOTS 21, 22 AND 23 OF TRACT NO. 417, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 16 PAGE 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT ALL OIL, GAS, MINERALS AND OTHER HYDROCARBON SUBSTANCES WITHOUT RIGHT OF SURFACE ENTRY THERETO ABOVE A DEPTH OF 500 FEET FROM THE SURFACE THEREOF, AS RESERVED IN THE DEED FROM BEULAH H. FINLEY, RECORDED DECEMBER 14, 1960 IN BOOK 5548. PAGE 385, OFFICIAL RECORDS. Purchase&Sale Agreement and Joint Escrow Instructions EXHIBIT A LEGAL DESCRIPTION PAGE 1 OF 2 t PARCEL C. (APNS. 142-081-09, 10, 11 AND 12) LOTS 24, 25, 26, 27 AND 28 OF TRACT NO. 417, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS PER MAP RECORDED IN BOOK 16 PAGE 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT THEREFROM ALL WATER AND WATER RIGHTS AS CONVEYED TO BOULEVARD GARDENS WATER COMPANY, A CORPORATION, BY DEED RECORDED FEBRUARY 11, 1925 IN BOOK 561,PAGE 287,OF DEEDS. Purchase&Sale Agreement and Joint Escrow Instructions EXHIBIT A LEGAL DESCRIPTION PAGE 2 OF 2 i 1, i. EXHIBIT B PROPERTY MAP [Behind this page] r i k c i Purchase&Sale Agreement and Joint Escrow Instructions EXHIBIT B PROPERTY MAP Comer of Edinger Avenue and Parkside Lane rra es nAAwo Pea r. 142-08 u"i t�x'le A ' 0. 107-7$ e rol.lwvrrr I e MACM fxerrramrs ela. ARRA VAW 0 - A y 1 1 1 1 I I I 11 1 I I 1 1 I I 1 I I I I I...IS.Vt1 M I IPA Y'I f7°l r I I i' 1 1 11 I I 1 I Oil f �y 1 1 1 O n 0 ✓olt i 1 18 I ski ICf IC:( Y6 1 1 pl 1 1�'1 11 I I le) 1 11 I lG 1 { I 1 I 1 1 1 1 I I 7 I I I 1 1 1 1 1 1 I I 1 J 1 I 1 1 1 1 1 1 1 ' I o� - j n �- .�.I 1 i• •'"I � •2 1 1 1 I ! I I��--III��1��1�� "1 A.1•I J I I I I ! I I.1" t . 1. • •1� d�At7iLSl,i 1 •I •1•I� •I I J 8 e s 083 o�� ® ® o " o mL----- - ----- © o o - " --- : It- ---- --« - fi I1. 10 ♦P.Y -If F9,41 9, PAASLS W x' LAW //8 n UM IN2 TRACT 0. 411 ALAI.I"? NOTE-ASSESSOR'S SLOCR S ASSESSOR'S YAP PARCEL MR P.M 0-41. rof-M PARCEL AVMRM SOWf 142 PACE W - SROWI'IN CIRCLES C&WTY Of ORANGE - EXHIBIT C GRANT DEED FREE RECORDING REQUESTED BY � AND WHEN RECORDED MAIL TO: i THE CITY OF HUNTINGTON BEACH 2000 Main Street f Huntington Beach,CA 92648 Attn: City Manager t t MAIL TAX STATEMENTS TO: [insert Grantee entity name&address] c (Space Above This Line for Recorder's Office Use Only) ! (Exempt from Recording Fee per Gov. Code§6103&27383) APN: [insert] K GRANT DEED i FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,a public body,herein called"Grantor,"hereby grants to MULWAR GP, f LP,a California limited partnership,herein called"Grantee",the real property,hereinafter referred to as the "Property", described in Exhibit "A" attached hereto and incorporated herein by this reference. 1. Grantor excepts and reserves: (a) any existing street,dedicated street, or portion of any street or dedicated street lying outside the boundaries of the Property which might otherwise pass with a conveyance of the Property, and (b) (to the extent now or hereafter validly excepted and reserved by the parties named in deeds, leases and other documents of record) all oil, gas,hydrocarbon substances and minerals of every kind and character lying more than 500 feet below the surface,together with the right to drill into, through, and to use and occupy all parts of the Property lying more than 500 feet below the PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 1 I surface thereof for any and all purposes incidental to the exploration for and production of oil,gas, hydrocarbon substances or minerals from the Property, but without, however, any right to use or disturb either the surface of the Property or any portion thereof within 500 feet of the surface for any purpose or purposes whatsoever. 2. The Property is conveyed in accordance with and subject to the Purchase and Sale Agreement and Joint Escrow Instructions(the"Purchase Agreement")entered into by and between Grantor("Seller"therein Grantee(`Buyer"therein),and the City of Huntington Beach("City")as Of 2015. The Purchase Agreement is a public record on file { in the offices of the City Clerk of the City of Huntington Beach and is by reference thereto incorporated herein as though fully set forth herein. Any capitalized term not defined herein shall have the meaning ascribed to such term in the Purchase Agreement. 3. Grantee hereby covenants and agrees for itself its successors, its assigns, and every successor in interest to the Property that the Grantee, such successors and such assigns, shall develop,maintain,and use the Property only as follows: (a) The Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of City of Huntington Beach's General Plan, the Purchase Agreement(including the Scope of Development attached to the Purchase Agreement as Exhibit F and incorporated herein by this reference), plans and specifications approved by City and this Grant Deed,whichever document is more restrictive. (b) The Grantee shall use the Property exclusively for the construction of a high- quality four story, 120 to 140-roam Hyatt Place hotel or other brand hotel first approved in writing by City as specifically described in the Purchase Agreement and Scope of Development attached thereto as Exhibit F (the "Project improvements"). The Grantee shall use the Property for such uses and purposes and in accordance with plans and specifications for the development of the Property approved by City. No change in the use of the Property and no new construction or material exterior modification or alteration of any structure on the Property shall be permitted without the prior written approval of City. (c) For not less than 30 years from the date this Grant Deed is recorded in the Official Records of the Recorder's Office of Orange County, Grantee shall use the Property only for the uses specified in this Grant Deed and the Purchase Agreement. No change in the use of the Property and no new construction or exterior modification or alteration of any structure on the Property shall be permitted without the prior written approval of the City. (d) Grantee, its successors and assigns, shall maintain the Improvements on the Property in the same aesthetic and sound condition(or better)as the condition of the Property at the time City issues the Permanent Certificate of Occupancy for the Property, reasonable wear and tear excepted. This standard for the quality of maintenance of the Property shall be met whether or not a specific item of maintenance is listed below. However,representative items of maintenance shall include frequent and regular inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or replacement of all surfaces, fencing, walls, equipment, etc., as PURCHASE&SALE AGRFRmET AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 2 necessary; emptying of trash receptacles and removal of litter; sweeping of public sidewalks adjacent to the Property,on-site walks and paved areas and washing-down as necessary to maintain clean surfaces; maintenance of all landscaping in a healthy and attractive condition, including trimming, fertilizing and replacing vegetation as necessary; clearing windows on a regular basis; painting the buildings on a regular program and prior to the deterioration of the painted surfaces; conducting a roof inspection on a regular basis and maintaining the roof in a leak-free and weather- tight condition; maintaining security devices in good working order. In the event Grantee, its successors or assigns fails to maintain the Improvements in accordance with the standard for the quality of maintenance, City or its designee shall have the right but not the obligation to enter the Property upon reasonable notice to Grantee, correct any violation, and hold Grantee, or such successors or assigns responsible for the cost thereof; and such cost, until paid, shall constitute a lien on the Property. (e) Grantee shall pay when due all real estate taxes and assessments assessed and levied on or against the Property subsequent to the Close of Escrow. In addition, Grantee shall remove, or shall have removed, any levy or attachment made on title to the Property (or any portion thereof), or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale of the Property thereunder. Nothing herein contained shall be deemed to prohibit the Grantee from contesting the validity or amount of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Grantee in respect thereto. 4. The Grantee covenants and agrees for itself,its successors,its assigns and every successor in interest to the Property or any part thereof that there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision(a)or (d) of Section 12955 of the Government Code, as those bases are defined.in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,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 him or her, 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 of the Property.With respect to familial status,this paragraph shall not be construed to apply to housing for older persons,as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph- 5. The Grantee covenants and agrees for itself,its successors,its assigns and every successor in interest to the Property or any part thereof,that Grantee,its successors and assigns shall refrain from restricting the rental, sale or lease of the Property on the basis of the race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry of any person. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 3 (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors,administrators, and assigns,and all persons claiming under or through them,that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision(a)or(d)of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her,establish or permit any 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 premises herein conveyed. With respect to familial status,this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status,nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision(d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p) of Section 12955 of the Government Code shall apply to this paragraph.The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself; or any person claiming under or through him or her, 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 premises herein leased. With respect to familial status, this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision(d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p)of Section 12955 of the Government Code shall apply to this paragraph." (c) In contracts: "There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 him or her, 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, PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 4 G i I or vendees of the land. With respect to familial status, this paragraph shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code.With respect to familial status, nothing in this paragraph shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o) and (p)of Section 12955 of the Government Code shall apply to this paragraph." 6. Prior to the issuance of a Permanent Certificate of Occupancy for the Project Improvements by City, Grantee shall not make any sale, transfer, conveyance or assignment of the Property or any part thereof or the buildings or structures thereon, without the prior written approval of Grantor and City. In the event that Grantee does sell, transfer, convey or assign any part of the Property or buildings or structures thereon, prior to the issuance of a Permanent Certificate of Occupancy for the Project Improvements by City in violation of this Grant Deed, Grantor shall be entitled to increase the Purchase Price paid by Grantee by the amount that the consideration payable for such We, transfer, conveyance or assignment is in excess of the Purchase Price paid by Grantee, plus the cost of improvements and development, including carrying charges and costs related thereto. The consideration payable for such sale, transfer, conveyance or assignment to the extent it is in excess of the amount so authorized shall belong and be paid to Grantor and until paid Grantor shall have a lien on the Property and any part involved for such amount. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Property. 7. 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 Grantor, City, and their respective successors and assigns against 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 thereo£ 8. Except as provided in the next two sentences, every covenant and condition and restriction contained in this Grant Deed shall remain in effect for 30 years from the date this Grant Deed is recorded in the Official Records of the Recorder's Office of Orange County. The covenants against discrimination set forth in paragraphs 4 and 5 of this Grant Deed shall remain in effect in perpetuity.The covenants set forth in Section 6 of this Grant Deed shall terminate and be released upon the issuance of a Permanent Certificate of Occupancy for the Project Improvements to be constructed on the Property by City pursuant to the Purchase Agreement. 9. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that 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 each Grantor and City, and such covenants shall run in favor of each Grantor and City for the entire period during which such covenants shall be in force and effect,without regard to whether Grantor or City is or remains an PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 5 t owner of any land or interest therein to which such covenants relate. Grantor and 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. 10. 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 interest permitted by the Purchase Agreement; provided,however,that any subsequent owner of the Property shall be bound by such remaining 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. 11. The covenants contained in this Grant Deed shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title. [SIGNATURES APPEAR ON FOLLOWING PAGE] i I PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 6 IN WITNESS WHEREOF,Grantor,City and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this_day of ,2015. [INSERT CITY AND SUCCESSOR AGENCY SIGNATURE BLOCKS] i PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 7 CERTIFICATE OF ACCEPTANCE This is to certify that the interest in real property conveyed by the Grant Deed dated as of 2015 from the Grantor, Successor Agency to the Redevelopment Agency of the 5 City of Huntington Beach, a public body, granted to MIRAMAR GP, LP, a California limited partnership, Grantee, is hereby accepted by Grantee subject to all of the matters hereinbefore set forth,pursuant to authority conferred by The Grantee hereby consents to recordation of such Grant Deed. "GRANTEE" MIR.AMAR GP,LP, a California limited partnership By: Excel Hospitality,Inc.,a California corporation Its: General Partner Dated: 316 115 By: t Suresh Patel, President PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 8 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real property in the City of Huntington Beach,County of Orange, State of California, described as follows: [to be added) APN: PURCHASE&SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS EXHIBIT C GRANT DEED PAGE 9 EXHIBIT D SCHEDULE OF PERFORMANCE 1) GENERAL PROVISIONS 1. Execution of Purchase and Sale Agreement As soon as feasible after Buyer's and Joint Instructions( ent)by Seller execution of Agreement. and Ci Seiler and City shall execute the Agreement. 2. Submission of Good Faith D osit. Buyer Within three (3) days after Seller's and shall submit the entire Buyer Deposit to City's execution of the Agreement. Seller. 3. Open Escrow. Seller shall open Escrow. Concurrently with Seller's execution of the Agreement. 4. Assignment of Settlement Funds. Seller At least one(1)business day prior to the shall deliver into escrow a document Close of Escrow. evidencing assignment of rights to the Settlement Funds to Buyer pursuant to Paragraph 4.e. (1)of the Agreement. 5. Transfer of Environmental Insurance Policy. At least one(1)business day prior to the To the extent permitted by the insurer, Seller Close of Escrow. shall deliver into escrow a document evidencing transfer of the Environmental Insurance Policy to Buyer pursuant to Paragraph 4.e.(2)of the Agreement. 6. Close Escrow. Buyer shall have satisfied all On or prior to June 30,2015. conditions precedent to Close of Escrow for the Property as required by the Agreement, including, but not limited to obtaining all entitlements and permits necessary to develop the proposed project. Purchase&Sale Agreement and Joint Escrow Instructions EXHMrr D SCHEDULE OF PERFORMANCE PAGE 1 2) DEVELOPMENT 1. Receipt of Entitlements. Buyer shall obtain On or prior to June 30,2015. all entitlements and permits necessary for the development of the Property pursuant to Paragraphs 4.a and 17 of the Agreement. 2. Demolition of Existing Improvements. Within sixty (60) days of the Close of Buyer shall complete demolish of all Escrow. existing building Improvements on the Property pursuant to subparagraphs a. and b. of Paragraph 4 of the Agreement. 3. Environmental Remediation of Pronerty. Within sixty (60) days of completing Buyer shall complete environmental the demolition of the existing remediation of the Property, prepare a improvements, but in no event no later Closure Report and request a "No Further than one hundred and twenty(120)days Action Letter" from the applicable from the Close of Escrow unless such regulatory agency, pursuant to Paragraph 4.a time is extended in writing by the City and 17 of the Agreement. Manager or designee. 4. Commencement of Construction. Buyer Within fifteen(15)days after delivery to shall commence construction of the Hotel Buyer of a "No Further Action Letter" Project (as defined in the Agreement), as or the equivalent, from the Orange required by the Agreement. County Department of Environmental Health (DEH), the City of Huntington Beach Fire Department or another appropriate regulatory agency. 5. Completion of Construction. Buyer shall Within twelve (12) months of the complete construction of the Hotel Project commencement of construction. (as defined in the Agreement),in accordance with the Agreement. Purchase&Sale Agreement and Joint Escrow Instructions EYMIT D SCHEDULE OF PERFORMANCE PAGE 2 NOTES: 1. Deadlines set forth in this Schedule of Performance are subject to the enforced delay provisions of Paragraph 25 of the Agreement. 2. Extensions may be approved in writing pursuant to Paragraph 41 of the Agreement. 3. Descriptions of items of performance and deadlines in this Schedule of Performance are not intended to supersede more complete descriptions in the text of the Agreement; and in the event of any conflict between the text of the Agreement and this Schedule,the text of the Agreement shall govern. Purchase&Sale Agreement and Joint Escrow Instructions EXHIBrF D SCHEDULE OF PERFORMANCE PAGE 3 EXHIBIT E DOCUMENT LIST I. Phase I Environmental Site Assessment Report,Project No. 6824,dated April 21,2008, prepared by Phase One,Inc.(the"Phase I") 2. Limited Phase lI Environmental Site Assessment dated May 12,2008,prepared by Phase One, Inc. (the"Limited Phase II") 2. Site Assessment Report and Soil Remediation Work Plan,prepared by Phase One,Inc. (the"Remediation Work Plan") 3. City of Huntington Beach Fire Department,comments to Site Assessment Report and Soil Remediation Work Plan,dated June 1,2009("City Fire Department Additions to Remediation Work Plan") Purchase&Sale Agreement and Joint Escrow Instructions EX HBIT E DOCUMENT LIST EXHIBIT F SCOPE OF DEVELOPMENT This is the Scope of Development attached to the Purchase and Sale Agreement and Joint Escrow Instructions ("Purchase Agreement"). Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Purchase Agreement. I. PROJECT DESCRIPTION The Property is located at 7872 Edinger Avenue, Huntington Beach, California. The Project entails the following components, as the same may be amended from time to time in accordance with plans and permits approved by the City of Huntington Beach (but with the understanding that the type of Hotel Project required pursuant to the Purchase Agreement shall in no event be reduced without City's written approval): k • The Property shall be developed as a high quality select brand hotel with approximately 120 to 140 rooms as approved by the City in writing. • The Hotel Development shall meet the following minimum criteria; o Nationally recognized brand of hotel, including,but not limited to Hyatt Place or equivalent product, subject to the prior written approval of the City in the City's sole and absolute discretion; o Amenities shall include business center,pool/spa, limited food service,lounge and beverage service; and o Incorporation of sustainable building practices,including the goals of the City regarding Green Building standards, to the extent feasible • The facility design shall incorporate a high level of aesthetic quality in a manner that conforms to the overall theme and intent of the Beach and Edinger Corridors Specific Plan and City codes and regulations. 11. Ilti1PROVEMENTS The Hotel Project shall be constructed by Buyer and in accordance with conceptual plans approved by the City of Huntington Beach. The Hotel Project and all other Improvements constructed by Buyer on the Property shall be constructed in accordance with all federal, state, and/or local development regulations and/or agreements. Purchase&Sale Agreement and Joint Escrow Instructions EXHIBIT F SCOPE OF DEVELOPMENT PAGE 1 III. ENVIRONMENTAL REVIEW Buyer shall be responsible for causing the preparation of all California Environmental Quality Act ("CEQA") documents necessary for the entitlements for the Hotel Project and the development of the Improvements on the Property. The City shall be responsible for certification of any CEQA documentation in connection with the approval of the Hotel Project. Buyer shall be responsible for the payment of all CEQA compliance costs and shall fully comply with all mitigation measures set forth in the Hotel Project entitlements. Purchase&Sale Agreement and Joint Escrow Instructions EXFMrr F SCOPE OF DEVELOPMENT PAGE 2 RESOLUTION NO. 2015-04 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCSSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE TY OF HUNTINGTON BEACH APPROVING A PURCHASE /.ND SALE AGREEMENT AND DIRECTING THE TRANSFER OF OWNERSHIP OF REAL PROPERTY IN ACCORDANCE WITH HEALTH/�ND SAFETY CODE SECTION 34181(a) [APN NOs. 142-081-06, 142-08/1-09, 142-081-10, 1.42-081-11, 142-081-12, and 142-081-281 WHEREAS, the former Redevelopment Agency of 01e City of Huntington Beach ("Agency") 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) ("CRL"); and r` The Agency was responsible for the administration of redevelopment activities within the City; and Section 33220 of the CRL provides that rtain public bodies may aid and cooperate in the planning, undertaking, construction or opera on of redevelopment projects; and The City and the Agency entered int,6 a number of Cooperation Agreements to continue the effort to redevelop, revitalize and/or e urinate blight in the City to achieve the purposes and goals of the CRL, to repay debt to the C' y and to provide for affordable housing, as appropriate and as authorized by redevelopment la in effect at the time of approval of said agreements; and Pursuant to such authority et forth in the CRL and other applicable law, on March 7, 2011, by Resolution No. 2011-1 , the City approved and accepted the transfer of certain real property located in the City of untington Beach, California, APN Nos. 142-081-06, 142-081- 09, 142-081-10, 142-081-11, 2-081-12, and 142-081-28 (collectively, the "Agency Property"); and Pursuant to Res o ution No. 2011-17, the City executed certificates of acceptance (collectively, the "Cert' icates of Acceptance") for the Agency Deeds designed to transfer ownership of the Age cy Property from the Agency to the City (collectively the "Agency Deeds"); and On or abo March 10, 2011, the Agency Deeds, along with the Certificates of Acceptance, were tcorded in the official records of the County of Orange; and Neither the Cooperation Agreements nor the purported transfer of the Agency Property (or any of the related documents and actions) were challenged within the applicable statute of limitations; and 15-4625/118160 1 Oversight Board Reso. 2015-04 AB xl 26 ("AB 26") was signed by the Governor of California on June 28, 2011, making certain changes to the CRL and adding Part 1.8 and Part 1.85 to Division 24 of the California Health and Safety Code; and /transfer AB 26 states, in art, that "[t]he Legislature hereby finds that of assets by a P redevelopment agency [after January 1, 2011] is deemed not to be n the furtherance of the [CRL] and is thereby unauthorized.''; and AB 26 further states, in part, that "[c]ommencing [Febru y 1, 2012], ... arrangements between the city ... that created the redevelopment agency anddthe redevelopment agency are invalid..."; and AB 26 further states, in part, that "[a]ll ... propertiI s [and] buildings ... of the former redevelopment agency are transferred on [February 1, 2112], to the control of the successor agency"; and Subsequent to the date of transfer of the Agency Property to the City, the City and Campbell Lodging, Inc. entered into that certain Purchase Agreement and Joint Escrow Instructions dated January 27, 2012, as further amended by an Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated J nuary 31, 2012, and further amended by that Escrow Amendment/Supplement dated April 2,5, 2012, and further amended by that Second Amendment to Purchase and Sale Agreement aid Joint Escrow Instructions dated June 25, 2012, and further amended by that Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 25, 2013, and further amended by that Fourth Amendment to Purchase and Sale Agree,Znt and Joint Escrow Instructions dated as of January 21, 2014 (collectively, the "Prior Purchase Agreement") relating to the sale of the Agency Property and the development thereo of a high-quality, first-class, four story, 120-140 room Hyatt Place Hotel or other brand h el ("Project"). The rights of "Buyer" under the Prior Purchase Agreement were assigned to Miramar GP, LP, a California limited partnership ("Miramar"), a private third party veloper; and On or about April 20, 20 , the California State Controller issued correspondence stating, in part, that "[i]f your city ... r ceived any assets from a redevelopment agency after January 1, 2011, your city ... hereby is o dered to ... reverse the transfer and return the applicable assets to the successor agency of the r evant redevelopment agency"; and Under AB 26, ea¢"h successor agency shall have, an oversight board with fiduciary responsibilities to holder of enforceable obligations and the taxing entities that benefit from distributions of property axes and other revenues pursuant to California Health and Safety Code Section 34188; and The oversight oard has been established for Successor Agency to the Redevelopment Agency of the City of Huntington Beach ("Successor Agency") (which oversight board shall hereinafter be referred to as the "Oversight Board") and all seven (7) members have been appointed to the Oversight Board pursuant to California Health and Safety Code Section 34179; and 15-4625/118160 2 Oversight Board Reso. 2015-04 AB 1484 ("AB 1484") was signed by the Governor of California on June 27, 2012, making changes to AB 26 and certain additional changes to the CRL; and AB 1484, at Section 34179.5(c)(2) of Part 1.85 of the California Healt and Safety Code, categorizes certain assets as those "transferred after January 1, 2011 ... b the redevelopment agency ... to the city ... that formed the redevelopment agency..." ("Section 34179.5(c)(2) Assets"); and AB 1484, at Section 34179.5(c)(1) of Part 1.85 of the California alth and Safety Code, categorizes certain other assets as those "transferred from the former redevelopment agency to the successor agency on or about February 1, 2012." ("Section 34179.5(c)(1) Assets"); and Because (i) AB 26 states that a transfer of assets by a redevelopment agency after January 1, 2011 was "unauthorized", (ii) AB 26 states that commencing February 1, 2012, arrangements between a redevelopment agency and the city that created/it are "invalid" and (iii) the State Controller has purported to order that ownership of certain assets be vested in successor agencies,the Agency Property is therefore not categorize bd'as Section 34179.5(c)(2) Assets; and Because AB 26 states that all properties and buildings of the former redevelopment agency are transferred on February 1, 2012 to the A ntrol of the successor agency, the Agency Property was therefore categorized as Section 341�.5(c)(1) Assets; and The City and Successor Agency do 7n /a.cknowledge that the purported transfer of the Agency Property by the Agency to the City ii011 was not in furtherance of the CRL; and The City and Successor Age do not acknowledge the effectiveness of the Legislature's purported deeming not to furtherance of the CRL of the purported transfer of assets that was conducted in accorda&e with the CRL at the time when made and was not challenged within the applicable stat to of limitations; and The City and Successor gency do not acknowledge that commencing February 1, 2012, arrangements between the redevelopment agency and the city that created it are invalid; and The City and SucceMe Agency do not acknowledge the effectiveness of the California State Controller's order to the transfer of the Agency Property and return the applicable assets to the Successor A ,ency; and The City and Successor Agency have limited financial resources and desire not to 'initiate litigation at this time with regard to AB 26, AB 1484 and/or the purported order by the California State Controller that b�wnership of the Agency Property be vested in the Successor Agency; and Therefore, in order to avoid the costs of litigation and other costs, the City and Successor Agency took action in a manner consistent with AB 26, AB 1484 and the California State Controller's purported order, and in furtherance of the Successor Agency's duties under Section 34179.6(h)(1) and Section 34179.6(f), by processing documentation reflecting ownership of the Agency Property by the Successor Agency pursuant to City Resolution No. 2012-71 and Successor Agency Resolution No. 2012-07, without acknowledging the effectiveness of AB 26, 15-4625/118160 3 e Oversight Board Reso. 2015-04 AB 1484 and/or such order and duties, expressly disclaiming the same. Quitclaim Deeds were recorded on October 17, 2012 whereby the City quitclaimed to the Successor ency the City's right, title and interest in the Agency Property; and Pursuant to H&S Code Section 34191.5(b) of the Dissolution A , once the California Department of Finance ("DOF") issues a Finding of Completion to th Successor Agency, the Successor Agency shall prepare a Long Range Property Managem nt Plan ("LRPMP") that addresses the disposition and use of certain real properties of the fo mer Agency. The LRPMP shall be submitted to the Oversight Board and the DOF for app oval no later than 6 months following the issuance of the Finding of Completion to the Succe sor Agency; and On May 13, 2014, the Successor Agency received its ending of Completion; and On November 5, 2014, the Oversight Board re ewed and approved the LRPMP and Prior Purchase Agreement which was then sent to DOF' on November 7, 2014. On March 3, 2015, the Successor Agency received corres/20 , rom DOF regarding modifications to the LRPMP. On or about the same date in MarOF requested modifications to the Prior Purchase Agreement; and The Successor Agency preparedd Amended LRPMP to address the modifications requested by DOF and like ise prepared a new proposed Purchase and Sale Agreement and Joint Escrow Instructions), and among the Successor Agency, Miramar, and the City of Huntington Beach which would supersede and terminate in its entirety the Prior Purchase Agreement ("Purchase Agreement"); d At this same meeting of e Oversight Board, the Oversight Board will consider for approval the Successor Agency' Amended LRPMP whereby the Successor Agency proposes, among other things, to sell th Agency Property to Miramar pursuant to the proposed Purchase Agreement. The Amende LRPMP will thereafter be submitted to the DOF for review concurrently with the prop o ed Purchase Agreement; and The disposition f the Agency Property pursuant to the Purchase Agreement is aimed at maximizing value in . at the purchase price for the Agency Property pursuant to the Purchase Agreement is withi . the fair market value range of the Agency Property as determined by an appraisal of the AgX-ncy Property dated January 9, 2012 prepared by Nagasaki & Associates; and The antypated sale proceeds from the sale of the Agency Property to Miramar pursuant to the propose Purchase Agreement in the amount of$3,100,000 will be remitted after the close of escrow to t�e Orange County Auditor-Controller's Office for distribution to the taxing entities in accordan ce with H&S Code Section 34191.5(c)(2)(B) of the Dissolution Act; and t Allfof the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 15-4625/118160 4 Oversight Board Reso. 2015-04 1. The Oversight Board hereby finds and determines that the foregoing recitals are true and correct. 2. The Oversight Board hereby approves of the terms of the Purchase Agreement. 1 3. The Oversight Board hereby approves of and directs the sal and conveyance of the Agency Property from the City or Successor Agency to Miramar i accordance with the terms and conditions set forth in the Purchase Agreement, for the pu ose of developing the Proj ect. 4. The Oversight Board hereby approves of the transf to the Successor Agency of the purchase price received from the sale of the Agency Prope for distribution to the taxing agencies in accordance with AB 26/AB 1484. Specifically, the Oversight Board hereby approves of the transfer of all of the net proceeds received frdm the sale of the Agency Property to the Orange County Auditor-Controller and the distrib tlon of such proceeds to the taxing entities. 5. The Oversight Board hereby acknO vledges and agrees that the Purchase Agreement constitutes the existence of an enforceable obligation pursuant to Part 1.8 and Part 1.85 of Division 24 of the Health and Safety Code for the purposes of, without limitation, the disposition of assets previously owned by the Agency. 6. The Oversight Board hereby.rtuthorizes and directs the Executive Director of the Successor Agency, or his or her designed the City Manager, or his or her designee, to take all actions and sign any and all documents necessary to implement and effectuate the Purchase Agreement and the actions approved b this Resolution (including, without limitation, approving extensions of deadlines or dates se forth in the Purchase Agreement and its attachments) as determined necessary by the Cit, Manager or Executive Director, or his or her designee, approving amendments to the P7chase Agreement and its attachments as determined necessary by the City Manager or Exec five Director, or his or her designee, to effectuate the Purchase Agreement, executing docu ents on behalf of the Successor Agency and City (including, without limitation, assign . nt and assumption agreements, certificates of acceptance, grant deeds and quitclaim deeds , and administering the Successor Agency's and City's obligations, responsibilities and dunes to be performed pursuant to this Resolution and the Purchase Agreement. 7. The Oversight Board does not intend, by adoption of this Resolution, to waive any constitutional legal and/or equitable rights of the Oversight Board, the Successor Agency or the City under law and/or in equity by virtue of the adoption of this Resolution and actions approved and taken pursuant to this Resolution and, therefore, reserves all such rights of the Oversight Board, the Successor Agency and the City under law and/or in equity. �t 8. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or 15-4625/118160 5 i Oversight Board Reso. 2015-04 application, and to this end the provisions of this Resolution are severable. The Oversight Board declares that its Board would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution. 9. This Resolution shall take effect upon the date of its adoption. PASSED AND ADOPTED by the Oversight Board of the Suc /ssorency to the Redevelopment Agency of the City of Huntington Beach at a meeting theof held on the 5th day of March, 2015. a Chairperson REVIEWED AND APPROVED: INITI qED AND APPRO Executive Director Deputy Exec v Direec APPROVED AS TO FORM: 9—Board Counsel r 1 f f 15-4625/118160 6 g City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov Office of the City Clerk 1T;1999. ® ' Joan L. Flynn, City Clerk I March 10, 2015 Grace Kim, Escrow Officer Commonwealth Land Title 4100 Newport Place, Suite 120 Newport Beach, CA 92660 Dear Ms. Kim: Enclosed for your records is a duplicate original of the "Purchase and Sale Agreement and Joint Escrow Instructions". Sincerely, Joan L. Flynn, CMC City Clerk JF:pe Enclosure Sister Cities: Anjo, Japan ® Waitakere, New Zealand City Of Huntington Beach 2000 Main Street s Huntington Beach, CA 92648 (714) 536-5227 ® www.huntingtonbeachca.gov FHB Office of the City Clerk 17 1444 Joan L. Flynn, City Clerk March 10, 2015 Suresh Patel Miramar GP, LP 10660 Scripps Ranch Blvd., Suite 100 San Diego, CA 92131 Dear Mr. Patel: Enclosed for your records is a duplicate original of the "Purchase and Sale Agreement and Joint Escrow Instructions". Sincerely, Joan L. Flynn, CMC City Clerk 1F:pe Enclosure Sister Cities: Anjo,Japan 0 Waitakere,New Zealand Esparza, Patty From: Villegas, Duran Sent: Friday, March 06, 2015 2:45 PM To: Esparza, Patty Subject: RE: Mailing of P&S Agreement-7872 Edinger Ave. Kellee figured that since we have a 4th extra original,we'll take one for the file. Thank you. From: Esparza, Patty Sent: Friday, March 06, 2015 2:44 PM To: Villegas, Duran Subject: RE: Mailing of P&S Agreement- 7872 Edinger Ave. YOU want an original?Thought you wanted a copy From: Villegas, Duran Sent: Friday, March 06, 2015 2:42 PM To: Esparza, Patty Cc: Fritzal, Kellee Subject: Mailing of P&S Agreement - 7872 Edinger Ave. Hi Patty, I spoke with Kellee and an executed original P&S Agreement for Edinger Project should be mailed/delivered to the following parties: 1. Suresh Patel Miramar GP, LP 10660 Scripps Ranch Blvd.,Suite 100 San Diego, CA 92131 2. Grace Kim, Escrow Officer Commonwealth Land Title 4100 Newport Place, Suite 120 Newport Beach, CA 92660 /3. City Clerk /4. Kellee Fritzal -Office of Business Devlp. Please send these out and let me know if you have any questions. Thank you, Duran Villegas Real Estate Services Manager Office of Business Development P.O. Box 190 Huntington Beach, CA 92648 P (714) 536-5544 F (714) 536-5087 1