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HomeMy WebLinkAbout438 Main Street - Reject Bids Received on Proposed Sale - Re A yt r;R� F _ American Title Insurance Corr.. ny National Commercial Services w ,t. 1 Frc,`American Way•Santa Ana,CA 92707 Seller's Settlement Statement Final Property: 438 Main Street,Huntington Beach, CA File No: NCS-24071-SA1 Officer: Maricel Borras/mb New Loan No: LGB Securities, L.P. Settlement Date: 06/16/2003 Disbursement Date: 06/17/2003 Print Date: 6/17/2003, 9:29 AM Buyer: LGB Securities,L.P.a California limited Address: 17912 Gothard Street, Huntington Beach, CA 92647 Seller: City of Huntington Beach Redevelopment Address: 2000 Main Street,Huntington Beach, CA 92648 Charge Description Seller Charge Seller Credit Consideration: Total Consideration 950,000.00 ........................... ......................................................................................................................................................................................................................................................................................................................................... ............................ Prorations: ............................................................................................................................................................................................................................................................................................................................................................. County Tax 2002/2003 06/16/03 to 07/01/03 @$304.86/yr 12.70 ............................................................................................................................................................. .........................................................................................................................................d............................................................................... Rents 06/16/03 to 07/O1/03 @$1600.00/mo 800.00 i ............................. Commission: .......................................................................................................................................................................................................................................................................................................................... .................................................................... Commission Paid at Settlement 28,500.00 Commission Paid at Settlement 28,500.00 ...............................-...................................................................................................................................................................................................................................................................................................;.................................................................... ...................................................................................................................................................................................................................................................................................................................................:................................................................... .. New Loan(s): Loan Discount Fee 1/2% to Pacific Liberty Bank .......................................................................... .................................................................................................................................................................................................................................................................................................... Apprai ....... sal Fee and Review Fee to Pacific Liberty Bank .......... .........................................................................................................................................................................................................................................................t.................................................................... Document Preparation Fee to Pacific Liberty Bank Flood to Pacific Liberty Bank ................................................. . ...............................................................................................................................................................................................................................................................................I......................................... Wire Fee to Pacific Liberty Bank ............................................................................................................................................................................................................................................................................................................................................................................................. Notary Fee to Pacific Liberty Bank ............................................................................................................................................................................................................................................................................................................................................................................................ Title/Escrow Charges to: .................................................. ... ................................................................................................................................................................................................................................................................... Documentary Transfer Tax-County to First American Title Insurance Company National 1,045.00 Commercial Services Closing-Escrow Fee to First American Title Insurance Company National Commercial Services 956.50 ............................... ..................................................................... ................................................................. .................................................................................................................................................. .................................................................... Messenger Service to First American Title Insurance Company National Commercial Services 12.96 ...................................... ............................................................................................................................................................................................................................................................._:..._................................................................ Policy-Standard ALTA 1992 Owner's to First American Title Insurance CompanyNational 2,472.00 Commercial Services ........................................................ . ...................... ............................................................................................... ...................................................................................................... ................................................................................................ Record Agreement to First American Title Insurance Company National Commercial Services 14.06 ........................................................................................................................................................................................................................................................................................................................:.................................................................... A._._...._..._...._...__.._........_.._ Disbursements Paid: ................................................................................y.................................................................... JCP Natural Hazard Report to JCP Geologists 199.00 .........................................................................................................................................................................................................................................................................................................................i.................................................................... I Cash(X To)( From)Seller 887,513.24 i I 950,012.70 950,012.70 / rd RI ' `F-Co � Recorded in Official Records,County of Orange rIRST Alb;.if.•td�TITLE C0�5f'AN NATloNAL C0:AMERCIAL SERVICES COMMERCAAL1NOUSTRiALDIVIStON Tom Dally,IClerk-Recorder C�II��II��!III�I�IIII4'It III IIIu�.i�l li!n�I!':,il I 14.00 RECORDATION REQUESTED BY: PACIFIC LIBERTY BANK 2003000702075 04:17pm 06/16/03 BEACH AND ADAMS 19950-BEACH BLVD. 118 ss At 2 5 HUNTiNGTON BEACH,CA 92648 0.00 0.00 0.00 0.00 8.00 0 00 0 a0 0 0e WHEN RECORDED MAIL TO: PACIFIC LIBERTY BANK BEACH AND ADAMS 19860 BEACH BLVD. HUNTINGTON BEACH,CA 92648 SEND TAX NOTICES TO: FOR RECORDER'S USE ONLY AGREEMENT THIS HAZARDOUS SUBSTANCES AGREEMENT dated June 2, 2003, is made and executed among LGB Securities L.P., 17912 Gothard Street, Huntington Beach, CA 92647 (sometimes referred to below as "Borrower' and sometimes as "Indemnitor"); and PACIFIC LIBERTY BANK, BEACH AND ADAMS, 19950 BEACH BLVD., HUNTINGTON BEACH, CA 92648 (referred to below as "Lender"). For good and valuable consideration and to Induce Lender to make a Loan to Borrower, each party executing this Agreement hereby_represents and agrees with Lender as follows: PROPERTY DESCRIPTION. The word'Property as used in this Agreement means the following Real Property located in Orange County, State of California:- LOTS 38 AND 39 IN BLOCK 403 OF HUNTINGTON BEACH,MAIN STREET SECTION, AS SHOWN ON A MAP RECORDED IN BOOK 3, PAGE 43 OF MISCELLANEOUS MAPS,RECORDS OF ORANGE COUNTY,CALIFORNIA. The Real Property or Its address is.commonly known as 438 Main Street,Huntington Beach,CA 92648. The Assessor's Parcel Number for the Real Property is 024-134-02 REPRESENTATIONS. The following representations are made to Lender,subject to disclosures made and accepted by Lender in writing: Use of Property. After due inquiry and investigation. Indemnitor has no knowledge,or reason to believe, that there has been any use, generation,manufacture storage,treafrment,refinement,tiansptxtation,disposal,release,or threatened release of any Hazardous Substance by any person on,under,or about the Property. Hazardous Substances. After due inquiry and Investigation, Indemnitor has no krowledge, or reason to believe, that the Collateral, whenever and whether owned by previous Occupants,has ever contained asbestos,PCB or other Hazardous Substances,whether used in construction or stored on the Collateral. No Notices. Indemnitor has received no summons,citation,directive,letter or other communication,written or oral, from any agency or department of any county or state or the U.S.Government concerning any intentional or unintentional action or omission on,under,or about the Property which has resulted In the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of Hazardous Substances kft any waters or onto any lends or where damage may have resulted to the lands,waters,fish,shelffish,wildlife,biota,air or other natural resources. AFFIRMATIVE.COVENANTS. Subject to disclosures made and accepted by Lender In writing,Indemnitor covenants with Lender as follows: Use of.Property. Inderrmnitor will rat use and does not Intend to use the Property to generate, manufacture, refine,transport, treat,store. harde or dispose of any Hazardous Substances. Compliance with Environmental Laws. Indemnitor shall cause the Collateral and the operations conducted on it to comply with any and all Environmental Laws and orders of any govemmental autharttles having jurisdiction under any Environmental Laws and shall obtain,keep in effect and.comply with all governmental permits and authorizations required by Environmental Laws with respect to such Collateral or operations. Indemnitor shalt furnish Lender with copies of all such permits and authorizations and any amendments or renewals of them and shag notify Lender of any expiration or revocation of such permits or authorizations. Preventive,Investigatory and Remedial Action. Indemnitor shall exercise extreme care in handling Hazardous Substances it Indemnitor uses or encounters any. Indemnitor, at Indemnitor's expense, shall undertake any and all preventive, investigatory or remedial action (Including emergency response, removal, eonta'rrunent and other remedial action) (a) required by any applicable Environmental Laws or orders by any governmental authority having jurisdiction under Environmental Laws,or (b) necessary to prevent or minimize property damage(including damage to Occupanrs own property),personal injury or damage to the environment,or the threat of any such damage or injury,by releases of or exposure to Hazardous Substances In connection with the Property or operations of any Occupant on the Property. In the event Indemnitor fails to perform any of Indemnitors obligations under this section of the Agreement,Lender may(but shall not be required to) perform such obligations at Indemriitoes expense. All such costs and expenses incurred by Lender under this section and otherwise under this Agreement shall be reimbursed by Indemnitor to Lender upon demand with interest at the Loan default rate, or in the absence of a default rate,at the Loan Interest rate. Lender and Indemnitor intend that Lender shall have full recourse to Indemnitor for any sum at airy time due to Lender under this Agreement In pertomft any such obligations of indewitor,Lender shall at all limes be deemed to be the agent of Indemnitor and shall not by reason of such performance be deemed to be assuming any responsibility of Indemnitor HAZARDOUS SUBSTANCES AGREEMENT Loan No: 10643 (Continued) Page 2 under,any Environmental Law or to any third party. Indemnitor hereby irrevocably appoints Lender as indemnitor's attomey-in-fact with full power to perform such of Indemnitor's obligations under this section of the Agreement as Lender deems necessary and appropriate. Notices. Indemnitor shall immediately notify Lender upon becoming aware of any of the following: (1) Any spill, release or disposal of a Hazardous Substance on any of the Property,or in connection with any-of its operations if such spill,release or disposal must be reported to any governmental authority under applicable Environmental Laws. (2) Any contamination, or imminent threat of contamination, of the Property by Hazardous Substances, or any violation of Environmental Laws in connection with the Property or the operations conducted on the Property. (3) Any order,notice of violation,fine or penalty or other similar action by any governmental authority relating to Hazardous Substances or Environmental Laws and the Property or the operations conducted on the Property. (4) Any judicial or administrative investigation or proceeding relating to Hazardous Substances or Environmental Laws and to the Property or the operations conducted on the Property. (5) Any matters relating to Hazardous Substances or Environmental Laws that would give a reasonably prudent Lender cause to be concerned that the value of Lender's security interest in the Property may be reduced or threatened or that may impair,or threaten to Impair,Indemnitors ability to perform any of its obligations under this Agreement when such performance is due. Access to Records. Indemnitor shall deliver to Lender,at Lender's request,copies of any and all documents in Indemnitor's possession or to which it has access relating to Hazardous Substances or Environmental Laws and the Property and the operations conducted on the Property, including without limitation results of laboratory analyses, site assessments or studies, environmental audit reports and other consultants'studies and reports. Inspections. Lender reserves the right to inspect and investigate the Property and operations on It at any time and from time to time,and Indemnitor shall cooperate fully with Lender in such inspection and investigations. If Lender at any time has reason to believe that Indemnitor or any Occupants of the Property are not complying with all applicable Environmental Laws or with the requirements of this Agreement or that a material spill,release or disposal of Hazardous Substances has occurred on or under the Property,Lender may require Indemnitor to furnish Lender at Indemntors expense an environmental audit or a site assessment with respect to the matters of concern to Lender. Such audit or assessment shall be performed by a qualified consultant approved by Lender. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to any Indemnitor or to any other person. INDEMNITOR'S WAIVER AND INDEMNIFICATION. Indemnhor hereby indemnifies and holds harmless Lender and Lenders officers,directors, employees and agents, and Lenders successors and assigns and their officers, directors, employees and agents against any and all claims, demands, losses, liabilities, costs and expenses (including without limitation attorneys' fees at trial and on any appeal or petition for review) Incurred by such person (a)arising out of or relating to any investigatory or remedial action involving the Property,the operations conducted on the Property or any other operations of Indemnitor or any Occupant and required by Environmental Laws or by orders of any governmental authority having jurisdiction under any Environmental Laws, or (b) on account of injury to any person whatsoever or damage to any property arising out of, in connection with,or in any way relating to (i)the breach of any covenant contained in this Agreement, (11) the violation of any Environmental Laws, (ii't)the use,treatment, storage,generation,manufacture,transport,release,spill disposal or other handling of Hazardous Substances on the Property, (iv)the contamination of any of the Property by Hazardous Substances by any means whatsoever(including without limitation any presently existing contamination of the Property),or (v)any costs incurred by Lender pursuant to this Agreement. In addition to this Indemnity, Indemnitor hereby releases and waives all present and future claims against Lender for indemnity or contribution in the event indemnitor becomes liable for cleanup or other costs under any Environmental Laws. PAYMENT: FULL RECOURSE TO INDEMNITOR. Indemnitor intends that Lender shall have full recourse to Indemnitor for Indewitces obligations under this Agreement as they become due to Lender. Such liabilities,losses,claims,damages and expenses shall be reimbursable to Lender as Lenders obligations to make payments with respect thereto are incurred,without any requirement of waiting for the ultimate outcome of any litigation,claim or other proceeding,and Indemnitor shall pay such liability,losses,claims,damages and expenses to Lender as so Incurred within thirty(30)days after written notice from Lender. Lenders notice shall contain a brief itemization of the amounts incurred to the date of such notice. In addition to any remedy available for failure to pay periodically such amounts,such amounts shall thereafter bear Interest at the Loan default rate,or In the absence of a default rate,at the Loan interest rate. SURVIVAL. The covenants contained in this Agreement shall survive(A) the repayment of the Indebtedness, (B) any foreclosure, whether judicial or ronjudicial,of the Property,and(C) any delivery of a deed in lieu of foreclosure to Lender or any successor of Lender. The covenants contained in this Agreement shall be for the benefit of Lender and any successor to Lender,as holder of any security interest in the Property or the Indebtedness secured thereby,or as owner of the Property following foreclosure or the delivery of a deed in lieu of foreclosure. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: Amendments. This Agreement,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Arbitration. Indemnitor and Lender agree that all disputes, claims and controversies between them whether individual, joint, or class in nature,arising from this Agreement or otherwise,Including without limitation contract and tort disputes,shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim is filed,upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement or be prohibited by this arbitration agreement. This Includes,without limitation, obtaining injunctive relief or a temporary restraining order; Invoking a power of sale under any deed of trust or mortgage;obtaining a writ of attachment or Imposition of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise of any right,concerning any Collateral,including any claim to rescind,reform,or otherwise modify any agreement relating to the Collateral,shall also be arbitrated,provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any party. Indemnitor and Lender agree that in the event of an action for judicial foreclosure pursuant to California Code r HAZARDOUS SUBSTANCES AGREEMENT Loan No: 10643 (Continued) Page 3 of Civil Procedure Section 726,or any similar provision in any other state,the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims,as lawfully may be referred to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations,estoppel,waiver,laches,and similar doctrines which would otherwise be applicable In an action brought by a party shall be applicable in any arbitration proceeding,and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction,Interpretation,and enforcement of this arbitration provision. Attorneys'Fees;Expenses. If Lender institutes any suit or action to enforce any of the terms of this Agreement,Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved,and to the extent not prohibited by law,all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit, Including attorneys'fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services,the cost of searching records,obtaining tide reports(including foreclosure reports), surveyors'reports,and appraisal fees and title insurance, to the extent permitted by applicable law. Indemnitor also will pay any court costs,in addition to all other sums provided by law. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement Governing Law. This Agreement will be governed by, construed and enforced in accordance with federal law and the laws of the State of California. This Agreement has been accepted by Lender in the State of California. Joint and Several Liability. All obligations of Indemnitor under this Agreement shall be joint and several,and all references to Indemnitor shall mean each and every Indemnitor. This means that each Indemnitor signing below is responsible for all obligations In this Agreement. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender,nor any course of dealing between Lender and Indemnitor,shall constitute a waiver of any of Lender's rights or of any of Indemnitor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent Is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Indemntor hereby waives notice of acceptance of this Agreement by Lender. Notices. Any notice required to be given under this Agreement shall be given in writing,and shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if malled,when deposited in the United States mail,as first class,certified or registered mail postage prepaid,directed to the addresses shown near the beginning of this Agreement Any party may change its address for notices under this Agreement by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the party's address. For notice purposes,Indemnitor agrees to keep Lender informed at all times of Indemnitor's current address. Unless otherwise provided or required by law, if there Is more than one Indemnitor,any notice given by Lender to any Indemnitor is deemed to be notice given to all Indemnitors. Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,that finding shall not make the offending provision illegal, invalid,or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Agreement Unless otherwise required by law,the illegality,invalidity,or unenforceability of any provision of this Agreement shall not affect the legality,validity or enforceability of any other provision of this Agreement Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Inderrinitor's interest,this Agreement shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Collateral becomes vested in a person other than Indemnitor,Lender,without notice to Indemnitor,may deal with Indemnitor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Indemnitor from the obligations of this Agreement or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall include the plural,and the plural shall include the singular,as the context may require. Words and terms riot otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word "Agreement" means this Hazardous Substances Agreement, as this Hazardous Substances Agreement may be amended or modified from time to time,together with all exhibits and schedules attached to this Hazardous Substances Agreement from time to time. Collateral. The word"Collateral"means all of Indemnitor's right,title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L.No.99-499("SARA"),the Hazardous Materials Transportation Act,49 U.S.C. Section 1801,et seq.,the Resource Conservation and Recovery Act,42 U.S.C.Section 6901, et seq.,Chapters 6.5 through 7.7 of Division 20 of the Califomla Health HAZARDOUS SUBSTANCES AGREEMENT Loan No: 10643 (Continued) Page 4 and Safety Code,Section 25100,et seq.,or other applicable state or federal laws,rules,or regulations adopted pursuant thereto. Hazardous Substances. The words "Hazardous Substances' mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics,may cause or pose a present or potential hazard to human health or the environment when improperly used,treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words 'Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word 'Indebtedness" means all principal, interest, and other amounts,costs and expenses payable under the Note or Related Documents,together with all renewals of,extensions of,modifications of,consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Indemnitoes obligations or expenses incurred by Lender to enforce Indemnitoes obligations under this Agreement,together with interest on such amounts as provided in this Agreement. Lender. The word"Lender'means PACIFIC LIBERTY BANK,its successors and assigns. Occupant. The word'Occupant"means individually and collectively all persons or entities occupying or utilizing the Collateral,whether as owner,tenant,operator or other occupant. Property. The word "Property" means all of Indemnitoes right, title and interest in and to all the Property as described in the 'Collateral Description'section of this Agreement. Real Property. The words"Real Property"mean the real property,interests and rights,as further described in this Agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT, AND EACH AGREES TO ITS TERMS. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS AGREEMENT EFFECTIVE. THIS AGREEMENT IS DATED JUNE 2,2003. BORROWER: LGB SECURI IE ,$,�P. By: 11 Ale. Gil Aouizerat, en I Pa of LGB Securities L.P. LENDER: l X & A o i ed Signer ff HAZARDOUS SUBSTANCES AGREEMENT Loan No: 10M (Continued) Page 5 CERTIFICATE OF ACKNOWLEDGMENT STATE OF ) )SS COUNTY OF ) On ,JUKE 2 20 03 before me N,494A 64SEQU)Ni #JMF_y PUbt-IG personalty appeared Gilles Aouizerat, n the basis of satisfacto eve to the persons)whose names) subscribed to the within instrument and acknowledged to me thayh gmm4hw executed the same in iaPAwMieir authorized capacity pee), and that by( '#►erhheir signature(e) on the instrument the person , or the entity upon behalf of whit the person(e+acted, executed the instrument. MARIA CASEQUIN WITNESS my hand and official seal. Comm.A 1234297 ►tnn S NOTARY PUBLIC-CALIFORNIA V! ♦ Orange County MY Comm.Expires Sept.11.2003 Signature (Seal) CERTIFICATE OF ACKNOWLEDGMENT STATE OF C� N�A ) oe W E )SS COUNTYr OF 1�-A`+� ) 1 On .1LI f l E 2 20 03 before me, MAW GAS EQ U� I/ �oTAP_y PU N4G personally appeared 7ATW M � sallied—_ev: to be the persons) whose name(e) fire subscribed '�' bed to .within instrument and acknowledged to me tha executed the same i hi authorized capacitypee), and that byl� F signature(o on the instrument the person(s), or the entity upon behalf of which the person(e)acted,executed the instrument. MARIA CASEQUIN.�< WITNESS my hand and official seal. N ' NoCARYI PUBLIC-CALIFORNIA 0 Orange County MY Comm.Expires Sept.11.2003 Signature (Seal) L&SER Pin U.&G.V r 6.2I.00=Cap.H.MM Fk LI sdww.ac.Mr.mm. AR Wphb P--.d •u cVFnl 210.FC TW IM MCL RL•CORWNG REOUESYED BY Recorded In Official Records, County of Orange MRSTAVERiCAN TrrLE COMPANY Tom Daly,Clerk-Recorder NATIONALICOAMERCIAL SERVICES COMMERCIAL/INDUSTRIAL DIVISION I IIIIII@IIIII IIIIIIIIIIIIIBIIII IIII IIIIIIIIIIIIIII 22.00 RECORDATION REQUESTED BY: PACIFIC LIBERTY BANK 2003000702074 04:17pm 06/16/03 BEACH AND ADAMS 19950 BEACH BLVD. 11e 59 D11 9 HUNTINGTON BEACH,CA 92648 0.00 0.00 0.00 0.00 16.00 0.00 0.00 0.00 WHEN RECORDED MAIL TO: PACIFIC LIBERTY BANK BEACH AND ADAMS 19950 BEACH BLVD. HUNTINGTON BEACH,CA 92648 SEND TAX NOTICES TO: LGB Securities LP. 17912 Gothard Street Huntinaton Beach,CA 92647 FOR RECORDER'S USE ONLY a3o�3�-DMA DEED OF TRUST THIS DEED OF TRUST is dated June 2, 2003, among LGB Securities L.P., a California Limited Partnership ("Trustor"); PACIFIC LIBERTY BANK, Whose address is BEACH AND ADAMS, 19950 BEACH BLVD.. HUNTINGTON BEACH, CA 92648 (referred to below sometimes as "Lender" and sometimes as "Beneficiary"); and First American Title Insurance Company, whose address is 1 First American Say, Santa Ana, CA 92707 (referred to below as "Trustee"). CONVEYANCE AND GRANT. For valuable eonslderatlon,Trustor Irrevocably grants,transfers and assigns to Trustee in bust,with power of sale,for the benefit of Lender as Beneffdary,all of Trustoes right,tide,and Interest In and to the following described real property,together with all existing or subsequently erected or affixed bulldings, Improvements and tortures; all easements, rights of way. and appurtenances: all water,water rights and ditch rights(including stock in utilities with ditch or irrigation rights);and all other rights, royalties,and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in Orange County, State of California: LOTS 38 AND 39 IN BLOCK 403 OF HUNTINGTON BEACH, MAIN STREET SECTION. AS SHOWN ON A MAP RECORDED IN BOOK 3, PAGE 43 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. The Real Property or Its address is commonly known as 438 Main Street, Huntington Beach, CA 92648. The Assessor's Parcel Number for the Real Property Is 024-134-02 Trustor presently assigns to Lender(also krlown as Beneficlary In this Deed of Trust)all of Trustor's right,tide,and interest in and to all present and future leases of the Property and all Rents from the Property. This is an absolute assignment of Rents made in connection with an obligation secured by real property pursuant to California Civil Code Section 2938. In addition, Trustor grants to Lender a Uniform Commercial Code security interest In the Personal Property and Rents. THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY,IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBUGA71ONS UNDER THE NOTE,THE RELATED DOCUMENTS,AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE Except as otherwise provided in this Deed of Trust,Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due,and shall strictly and in a timely manner perform all of Trustor's obligations under the Note,this Deed of Trust, and the Related Documents. POSSESSION AND MAINTENANCE OF 771E PROPERTY. Trustor agrees that Trustor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default,Trustor may (1) remain in possession and control of the Property; (2) use,operate or manage the Property;and (3) collect the Rents from the Property. Duty to Maintain. Trustor shall maintain the Property In tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve Its value. Compliance With Environmental Laws. Trustor represents and warrants to Lender that: (1) During the period of Trustor's ownership of the Properly,there has been no use,generation,manufacture,storage,treatment,disposal,release or threatened release of any Hazardous Substance by any person on,under,about or from the Property; (2) Trustor has no knowledge of,or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender In writing, (a) any breach or violation of any Environmental Laws, (b) any use,generation, manufacture,storage,treatment,disposal,release or threatened release of any Hazardous Substance on, under,about or from the Property by'any prior owners or occupants of the Property,or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters;and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Trustor nor any tenant,contractor,agent or other authorized user of the Property shall use,generate,manufacture,store,treat,dispose of or release any Hazardous Substance on,under,about or from the Property;and (b) any such activity shall be conducted In compliance with all applicable federal,state,and local laws,regulations and ordinances,including without limitation all Environmental Laws. Trustor authorizes Lender and DEED OF TRUST Loan No: 10643 (Continued) Page 2 its agents to enter upon the Property to make such inspections and tests, at Trustor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Deed of Trust. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person. The representations and warranties contained herein are based on Trustors due diligence in investigating the Property for Hazardous Substances. Trustor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any such laws;and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities,damages,penalties,and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Deed of Trust or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Trustor's ownership or interest in the Property,whether or not the same was or should have been known to Trustor. The provisions of this section of the Deed of Trust, including the obligation to indemnify,shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property,whether by foreclosure or otherwise. Nuisance,Waste. Trustor shall not cause,conduct or permit any nuisance nor commit, permit,or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Trustor will not remove, or grant to any other party the right to remove,any timber,minerals(including oil and gas),coal,clay,scoria,soil,gravel or rock products without Lender's prior written consent. Removal of Improvements. Trustor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent As a condition to the removal of any Improvements, Lender may require Trustor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Trustor's compliance with the terms and conditions of this Deed Of Trust. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws,ordinances,and regulations,now or hereafter In effect,of all governmental authorities applicable to the use or occupancy of the Property,including without limitation,the Americans With Disabilities Act Trustor may contest in good faith any such law,ordinance,or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lenders interests in the Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender,to protect Lenders interest Duty to Protect Trustor agrees neither to abandon or leave unattended the Property. Trustor shall do all other acts, in addition to those acts set forth above in this section,which from the character and use of the Property are reasonably necessary to protect and preserve the Property. DUE ON SALE-CONSENT BY LENDER. Lender may,at Lender's option,declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer,without Lenders prior written consent,of all or any part of the Real Property,or any interest in the Real Property. A'sale or transfer'means the conveyance of Real Property or any right,title or interest in the Real Property;whether legal,beneficial or equitable; whether voluntary or involuntary;whether by outright sale,deed,installment sale contract,land contract,contract for deed,leasehold Interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Trustor is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent (25%) of the voting stock,partnership interests or limited liability company Interests,as the case may be,of such Trustor. However,this option shall not be exercised by Lender 9 such exercise is prohibited by applicable law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust•. Payment Trustor shall pay when due(and in all events at least ten (10)days prior to delinquency) all taxes, special taxes, assessments, charges (including water and sewer),fines and Impositions levied against or on account of the Property,and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Trustor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust,except for the lien of taxes and assessments not due and except as otherwise provided in this Deed of Trust. Right to Contest Trustor may withhold payment of any tax,assessment,or claim in connection with a good faith dispute over the obligation to pay,so long as Lenders interest in the Property is not jeopardized. If a lien arises or Is filed as a result of nonpayment,Trustor shall within fifteen(15)days after the lien arises or,0 a lien is filed,within fifteen(15)days after Trustor has notice of the filing,secure the discharge of the lien,or if requested by Lender,deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys'fees,or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond fumished in the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Trustor shall notify Lender at least fifteen(15)days before any work is commenced,any services are furnished,or any materials are supplied to the Property,if any mechanic's lien,materialmen's lien,or other lien could be asserted on account of the work, services,or materials. Trustor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Trustor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust. Maintenance of Insurance. Trustor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Trustor shall also procure and maintain comprehensive DEED OF TRUST Loan No: 10643 (Continued) Page 3 general liability insurance in such coverage amounts as Lender may request with Trustee and Lender being named as additional insureds in such liability insurance policies. Additionally, Trustor shall maintain such other insurance, including but not limited to hazard, business interruption,and boiler insurance,as Lender may reasonably require. Notwithstanding the foregoing,in no event shall Trustor be required to provide hazard insurance in excess of the replacement value of the improvements on the Real Property. Policies shall be written in form, amounts,coverages and basis reasonably acceptable to Lender and Issued by a company or companies reasonably acceptable to Lender. Trustor,upon request of Lender,will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten(10)days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Trustor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area,Trustor agrees to obtain and maintain Federal Flood Insurance,if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area,for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program,or as otherwise required by Lender,and to maintain such insurance for the tens of the loan. Application of Proceeds. Trustor shall promptly notify Lender of any loss or damage to the Property ff the estimated cost of repair or replacement exceeds$5,000.00. Lender may make proof of loss If Trustor fails to do so within fifteen(15)days of the casualty. If in Lender's sole judgment Lender's security Interest in the Property has been impaired,Lender may,at Lender's election,receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the indebtedness,payment of any lien affecting the Property,or the restoration and repair of the Property. If the proceeds are to be applied to restoration and repair, Trustor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Deed of Trust,then to pay accrued iinterest,and the remainder, If any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment In full of the Indebtedness, such proceeds shall be paid to Trustor as Trustoes interests may appear. Trustor's Report on Insurance. Upon request of Lender, however not more than once a year,Trustor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer, (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value;and (5) the expiration date of the policy. Trustor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Trustor falls to comply with any provision of this Deed of Trust or any Related Documents, including but not limited to Trustor's failure to discharge or pay when due any amounts Trustor is required to discharge or pay under this Deed of Trust or any Related Documents, Lender on Trustor's behalf may (but shall not be obligated to)take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens,security interests,encumbrances and other claims,at any time levied or placed on the Property and paying all costs for insuring,maintaining and preserving the Property. All such expenditures Incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Trustor. All such expenses will become a part of the Indebtedness and,at Lender's option,will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy;or (2) the remaining term of the Note;or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of Trust also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default WARRANTY;DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed of Trust: Title. Trustor warrants that: (a)Trustor holds good and marketable title of record to the Property in fee simple,free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final tide opinion issued in favor of,and accepted by,Lender in connection with this Deed of Trust,and (b)Trustor has the full right,power,and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above,Trustor warrants and will forever defend the tide to the Property against the lawful claims of all persons. In the event any action or proceeding Is commenced that questions Trustor's tide or the interest of Trustee or Lender under this Deed of Trust,Trustor shall defend the action at Trustor's expense. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice,and Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws, ordinances,and regulations of governmental authorities. Survival of Representations and Warranties. All representations,warranties,and agreements made by Trustor in this Deed of Trust shall survive the execution and delivery of this Deed of Trust,shall be continuing in nature,and shall remain in full force and effect until such time as Trustor's Indebtedness shall be paid in full. CONDEMNATION: The following provisions relating to eminent domain and inverse condemnation proceedings are a part of this Deed of Trust: Proceedings. If any eminent domain or inverse condemnation proceeding Is commenced affecting the Property, Trustor shall promptly notify Lender in writing, and Trustor shall promptly take such steps as may be necessary to pursue or defend the action and obtain the award. Trustor may be the nominal party in any such proceeding,but Lender shall be entitled,at its election,to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to Lender such Instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. It any award is made or settlement entered into in any condemnation proceedings affecting all or any part of the Property or by any proceeding or purchase in lieu of condemnation, Lender may at its election, and to the extent permitted by law, require that all or any portion of the award or settlement be applied to the Indebtedness and to the repayment of all reasonable costs, DEED OF TRUST Loan No: 10643 (Continued) Page 4 expenses,and attorneys'fees incurred by Trustee or Lender in connection with the condemnation proceedings. IMPOSITION OF TAXES,FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender,Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes,fees,documentary stamps,and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (2) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note;and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust,this event shall have the same effect as an Event of Default,and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT;FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a security agreement are a part of this Deed of Trust: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures,and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall execute financing statements and take whatever other action is requested by Lender to perfect and continue Lender's security Interest in the Rents and Personal Property. Trustor shall reimburse Lender for all expenses Incurred in perfecting or continuing this security Interest. Upon default,Trustor shall not remove,sever or detach the Personal Property from the Property. Upon default,Trustor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within three(3)days after receipt of written demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Trustor(debtor) and Lender(secured party)from which information concerning the security interest granted by this Deed of Trust may be obtained(each as required by the Uniform Commercial Code)are as stated on the first page of this Deed of Trust. FURTHER ASSURANCES;ATTORNEY-IN-FACT. The following provisions relating to further assurances and attomey-in-fact are a part of this Deed of Trust Further Assurances. At any time,and from time to time,upon request of Lender,Trustor will make,execute and deliver,or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded,as the case may be,at such times and in such offices and places as Lender may deem appropriate,any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, Instruments of further assurance, certificates,and other documents as may, in the sole opinion of Lender,be necessary or desirable in order to effectuate,complete,perfect, continue, or preserve (1) Trustor's obligations under the Note, this Deed of Trust,and the Related Documents, and (2) the liens and security interests created by this Deed of Trust as first and prior liens on the Property,whether now owned or hereafter acquired by Trustor. Unless prohibited by law or Lender agrees to the contrary in writing,Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to In this paragraph. Attorney-in-Fact It Trustor fails to do any of the things referred to in the preceding paragraph,Lender may do so for and In the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attomey-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, In Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Trustor pays all the Indebtedness when due,and otherwise performs all the obligations imposed upon Trustor under this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security Interest In the Rents and the Personal Property. Lender may charge Trustor a reasonable reconveyance fee at the time of reconveyance. EVENTS OF DEFAULT. Each of the following,at Lender's option,shall constitute an Event of Default under this Deed of Trust Payment Default. Trustor fails to make any payment when due under the Indebtedness. Other Defaults. Trustor fails to comply with or to perform any other term,obligation,covenant or condition contained in this Deed of Trust or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained In any other agreement between Lender and Trustor. Compliance Default. Failure to comply with any other term,obligation,covenant or condition contained in this Deed of Trust,the Note or in any of the Related Documents. If such a failure Is curable and if Trustor has not been given a notice of a breach of the same provision of this Deed of Trust within the preceding twelve(12)months,it may be cured(and no Event of Default will have occurred) If Trustor,after Lender sends written notice demanding cure of such failure: (a)cures the failure within thirty(30)days;or (b) 9 the cure requires more than thirty (30)days,immediately initiates steps sufficient to cure the failure and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. Default on Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance,or any other payment necessary to prevent filing of or to effect discharge of any lien. Environmental Default. Failure of any party to comply with or perform when due any term,obligation,convenant or condition contained in DEED OF TRUST Loan No: 10643 (Continued) Page 5 any environmental agreement executed in connection with the Property. False Statements. Any warranty,representation or statement made or furnished to Lender by Trustor or on Trustor's behalf under this Deed of Trust or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Deed of Trust or any of the Related Documents ceases to be in full force and effect(including failure of any collateral document to create a valid and perfected security interest or lien)at any time and for any reason. Death or Insolvency. The dissolution or termination of Trustor's existence as a going business or the death of any partner,the insolvency of Trustor, the appointment of a receiver for any part of Trustor's property, any assignment for the benefit of creditors, any type of creditor workout,or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Trustor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Trustor's accounts, including deposit accounts,with Lender. However, this Event of Default shall not apply If there is a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Trustor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement Any breach by Trustor under the terms of any other agreement between Trustor and Lender that is not remedied within any grace period provided therein, Including without limitation any agreement concerning any indebtedness or other obligation of Trustor to Lender,whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes Incompetent,or revokes or disputes the validity of,or liability under,any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,and,in doing so,cure any Event of Default Adverse Change. A material adverse change occurs In Trustor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is Impaired. Insecurity. Lender in good faith believes itself Insecure. Right to Cure. if such a failure is curable and if Trustor has not been given a notice of a breach of the same provision of this Deed of Trust within the preceding twelve(12)months, it may be cured(and no Event of Default will have occurred) N Trustor,after Lender sends written notice demanding cure of such failure: (a) cures the failure within thirty (30) days;or (b) if the cure requires more than thirty(30)days, Immediately Initiates steps sufficient to cure the failure and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Deed of Trust, at any time thereafter,Trustee or Lender may exercise any one or more of the following rights and remedies: Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy,and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust,after Trustors failure to perform,shall not affect Lenders right to declare a default and exercise its remedies. Foreclosure by Sale. Upon an Event of Default under this Deed of Trust,Beneficiary may declare the entire Indebtedness secured by this Deed of Trust immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold the Property,which notice Trustee shall cause to be fled for record. Beneficiary also shah deposit with Trustee this Deed of Trust, the Note, other documents requested by Trustee, and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following the recordation of the notice of default,and notice of sale having been given as then required by law,Trustee,without demand on Trustor,shall sell the Property at the time and place fixed by it In the notice of sale,either as a whole or In separate parcels,and In such order as it may determine,at public auction to the highest bidder for cash In lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale,and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement In accordance with applicable law. Trustee shall deliver to such purchaser its deed conveying the Property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary may purchase at such sale. After deducting all costs,fees and expenses of Trustee and of this Trust,including cost of evidence of title in connection with sale,Trustee shall apply the proceeds of sale to payment of: all sums expended under the terms hereof,not then repaid,with accrued interest at the amount allowed by law in effect at the date hereof;all other sums then secured hereby;and the remainder, If any,to the person or persons legally entitled thereto. Judicial Foreclosure. With respect to all or any part of the Real Property,Lender shall have the right In lieu of foreclosure by power of sale to foreclose by judicial foreclosure in accordance with and to the full extent provided by California law. UCC Remedies. With respect to all or any part of the Personal Property,Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code, Including without limitation the right to recover any deficiency In the manner and to the full extent provided by California law. Collect Rents. Lender shall have the right,without notice to Trustor to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lenders costs, against the Indebtedness. In furtherance of this right,Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender,then Trustor irrevocably designates Lender as Trustor's attomey-in-fact to endorse instruments received In payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lenders demand shall satisfy the obligations for which the payments are made,whether or not any proper grounds for the DEED OF TRUST Loan No: 10643 (Continued) Page 6 demand existed. Lender may exercise its rights under this subparagraph either in person,by agent,or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property,with the power to protect and preserve the Property,to operate the Property preceding foreclosure or sale,and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond 4 permitted by taw. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Tenancy at Sufferance. If Trustor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall,at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or by law. Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten(10)days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Sale of the Property. To the extent permitted by applicable law,Trustor hereby waives any and all rights to have the Property marshalled. In exercising its rights and remedies,the Trustee or Lender shall be free to sell all or any part of the Property together or separately,in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Attorneys'Fees;Expenses. If Lender Institutes any suit or action to enforce any of the temrs of this Deed of Trust,Lender shall be entitled to recover such sum as the court may adjudge reasonable as attomeys'tees at trial and upon any appeal. Whether or not any court action is Involved,and to the extent not prohibited by law,all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of Its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear Interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph Include, without limitation, however subject to any limits under applicable law,Lender's attorneys'fees and Lender's legal expenses,whether or not there is a lawsuit, including attorneys'fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services,the cost of searching records,obtaining title reports (including foreclosure reports), surveyors'reports,and appraisal fees, title insurance,and fees for the Trustee,to the extent permitted by applicable law. Trustor also will pay any court costs,in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law,Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor. (a) join In preparing and filing a map or plat of the Real Property,including the dedication of streets or other rights to the public; (b)join in granting any easement or creating any restriction on the Real Property;and (c)join in any subordination or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien,or of any action or proceeding in which Trustor,Lender,or Trustee shall be a party,unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above,with respect to all or any part of the Property,the Trustee shall have the right to foreclose by notice and sale,and Lender shall have the right to foreclose by judicial foreclosure,in either case in accordance with and to the full extent provided by applicable law. Successor Trustee. Lender, at Lender's option,may from time to time appoint a successor Trustee to any Trustee appointed under this Deed of Trust by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of Orange County,State of Cal'rfomia. The instrument shall contain,In addition to all other matters required by state law,the names of the original Lender,Trustee,and Trustor,the book and page where this Deed of Trust Is recorded,and the name and address of the successor trustee,and the instrument shall be executed and acknowledged by Lender or its successors in Interest. The successor trustee, without conveyance of the Property, shall succeed to all the title,power,and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of Trustee shall govern to the exclusion of all other provisions for substitution. Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust,duly executed and acknowledged,is made a public record as provided by law. NOTICES. Any notice required to be given under this Deed of Trust shall be given in writing,and shall be effective when actually delivered,when actually received by telefacsimile(unless otherwise required by law),when deposited with a nationally recognized overnight courier,or,if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. Trustor requests that copies of any notices of default and sale be directed to Trustor's address shown near the beginning of this Deed of Trust All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties,specifying that the purpose of the notice is to change the parry's address. For notice purposes,Trustor agrees to keep Lender informed at all times of Trustor's current address. Unless otherwise provided or required by law,if there Is more than one Trustor,any notice given by Lender to any Trustor is deemed to be notice given to all Trustors. STATEMENT OF OBLIGATION FEE. Lender may collect a fee, not to exceed the maximum amount permitted by law, for furnishing the statement of obligation as provided by Section 2M of the Civil Code of California. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Deed of Trust: DEED OF TRUST Loan No: 10643 (Continued) Page 7 Amendments. This Deed of Trust,together with any Related Documents,constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Trustor's residence,Trustor shall furnish to Lender,upon request,a certified statement of net operating income received from the Property during Trustor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Arbitration. Trustor and Lender agree that all disputes,claims and controversies between them whether Individual,joint,or class In nature, arising from this Deed of Trust or otherwise, including without limitation contract and tort disputes, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim is filed,upon request of either party. No act to take or dispose of any Property shall constitute a waiver of this arbitration.agreement or be prohibited by this arbitration agreement. This includes,without limitation,obtaining injunctive relief or a temporary restraining order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise of any right,concerning any Property,Including any claim to rescind,reform,or otherwise modify any agreement relating to the Property,shall also be arbitrated,provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any party. Trustor and Lender agree that in the event of an action for judicial foreclosure pursuant to Californla Code of Civil Procedure Section 726,or any similar provision in any other state,the commencement of such an action will not constitute a waiver of the right to arbitrate and the court shall refer to arbitration as much of such action, Including counterclaims,as lawfully may be referred to arbitration. Judgment upon any award rendered by any arbitrator may be entered In any court having jurisdiction. Nothing in this Deed of Trust shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations,estoppel,waiver,laches,and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable In any arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity,without the written consent of Lender. Goveming Law. This Deed of Trust will be governed by,construed and enforced in accordance with federal law and the laws of the State of California. This Deed of Trust has been accepted by Lender in the State of California. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Deed of Trust unless such waiver Is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right A waiver by Lender of a provision of this Deed of Trust shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Deed of Trust No prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender's rights or of any of Trustor's obligations as to any future transactions. Whenever the consent of Lender is required under this Deed of Trust,the granting of such consent by Lender In any Instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be illegal, Invalid,or unenforceable as to any circumstance,that finding shall not make the offending provision illegal,invalid,or unenforceable as to any other circumstance. It feasible, the offending provision shall be considered modified so that it becomes legal,valid and enforceable. If the offending provision cannot be so modified,it shall be considered deleted from this Deed of Trust Unless otherwise required by law,the illegality,Invalidity,or unenforceability of any provision of this Deed of Trust shall not affect the legality,validity or enforceability of any other provision of this Deed of Trust Successors and Assigns. Subject to any limitations stated in this Deed of Trust on transfer of Trustor's interest,this Deed of Trust shall be binding upon and inure to the benefit of the parties,their successors and assigns. If ownership of the Property becomes vested in a person other than Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the Indebtedness by way of forbearance or extension without releasing Trustor from the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Deed of Trust Unless specifically stated to the contrary,all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall inciude the plural,and the plural shall include the singular,as the context may require. Words and temps not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code: Beneficiary. The word"Beneficiary"means PACIFIC LIBERTY BANK,and its successors and assigns. Borrower. The word"Borrower"means LGB Securities L.P.,and all other persons and entities signing the Note in whatever capacity. Deed of Trust. The words"Deed of Trust"mean this Deed of Trust among Trustor,Lender,and Trustee,and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Default. The word"Default"means the Default set forth in this Deed of Trust in the section tided"Default". Environmental Laws. The words "Environmental Laws' mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, at seq. ("CERCLA"), the Superfund Amendments and DEED OF TRUST Loan No: 10643 (Continued) Page 8 Reauthorization Act of 1986, Pub. L. No. 99-499("SARX),the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,et seq.,the Resource Conservation and Recovery Act,42 U.S.C.Section 6901, et seq.,Chapters 6.5 through 7.7 of Division 20 of the Califomia Health and Safety Code,Section 25100,et seq.,or other applicable state or federal laws,rules,or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Deed of Trust in the events of default section of this Deed of Trust. Guarantor. The word'Guarantor'means any guarantor,surety,or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty"means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics,may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured,transported or otherwise handled. The words "Hazardous Substances' are used In their very broadest sense and include without limitation any and all hazardous or toxic substances,materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word"Improvements"means all existing and future improvements, buildings,structures, noble homes affixed on the Real Property,facilities,additions,replacements and other construction on the Real Property. Indebtedness. The wont"Indebtedness'means all principal, interest, and other amounts,costs and expenses payable under the Note or Related Documents,together with all renewals of,extensions of,modifications of,consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Trustor's obligations or expenses Incurred by Trustee or Lender to enforce Trustor's obligations under this Deed of Trust,together with interest on such amounts as provided in this Deed of Trust. Lender. The word"Lender"means PACIFIC LIBERTY BANK,its successors and assigns. Note. The word'Note'means the promissory note dated June 2,2ow, in the original principal amount of $665,000.00 from Trustor to Lender,together with all renewals of,extensions of, modifications of, refinancings of,consolidations of,and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment,fixtures, and other articles of personal property now or hereafter owned by Trustor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums)from any sale or other disposition of the Property. Property. The word"Property"means collectively the Real Property and the Personal Property. Real Property. The words"Real Property"mean the real property,interests and rights,as further described in this Deed of Trust. Related Documents. The words "Related Documents' mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,whether now or hereafter existing,executed in connection with the Indebtedness. Rents. The word"Rents"means all present and future leases, rents, revenues, income, Issues,royalties,profits,and other benefits derived from the Property together with the cash proceeds of the Rents. Trustee. The word"Trustee"means First American Title Insurance Company,whose address is 1 First American Say,Santa Ana,CA 92707 and any substitute or successor trustees. Trustor. The word'Trustor'means LGB Securities L.P.. TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST,AND TRUSTOR AGREES TO fTs TERMS, INCLUDING THE VARIABLE RATE PROVISIONS OF THE NOTE SECURED BY THIS DEED OF TRUST. TRUSTOR: LGB SECURITIES L, By: / + ` GIIIWAISuizerat,ftoenfl Partn GB Securities L.P. 1 DEED OF TRUST Loan No: 10643 (Continued) Page 9 CERTIFICATE OF ACKNOWLEDGMENT STATE OFu )SS COUNTY OF QR 46E ) On JuNE 20 0-3 before me, MAP)A G4SE0VlN, rJ97AP_V GUtUG personally appeared Gilles Aoulzerat, ( to me on th basis of satfs acto evi ence to the person(e)whose name(e)�subscribed to the within instrument and acknowledged to me thatexecuted the same In(hi authorized capacity(fes), and that by i�er/meir signatures) on the instrument the person( , or the entity upon behalf of wha the persons) acted, executed the instrument. MARIA CASEOUIN Comm.#1234297 'n WITNESS my hand and official seal. (� Hnr4gY PUBLIC N `%my Orange County Comm.Expires Sept.11,2003 Signature T+..•.•..•••••v� (Seal) (DO NOT RECORD) REQUEST FOR FULL RECONVEYANCE (To be used only when obligations have been paid in full) To: ,Trustee The undersigned is the legal owner and holder of all Indebtedness secured by this Deed of Trust. All sums secured by this Deed of Trust have been fully paid and satisfied. You are hereby directed,upon payment to you of any sums owing to you under the terms of this Deed of Trust or pursuant to any applicable statute,to cancel the Note secured by this Deed of Trust(which is delivered to you together with this Deed of Trust), and to reconvey, without warranty,to the parties designated by the terms of this Deed of Trust,the estate now held by you under this Deed of Trust. Please mail the reconveyance and Related Documents to: Date: Beneficiary: By: its: L"M pm U.&u V..621.0mon Cap.H4 Al w a"b Yo.167,2= M PA"Pma . -CA a-ZFNPL%W1.FG M M?PR{l Recorded In Official Records. County of Orange .'ECORDtr+OPE0UESrEDBy Tom Daly,Clerk-Recorder r1RST AgERICAN TITLE COMPANY VI�IVIIIVII�II It��1�9 I�,IIlu�9luliVl��l����:li�lll NArIONAUCC.'AMERCIAL SERVICES 30.00 COMMERGAUINDUSTRIAL DIVISION 2003000702073 04:17pm 06/16/03 Recording Requested by: 118 ss G02 13 0.00 0.00 0.00 0.00 24.00 0.00 0.00 0.00 Redevelopment Agency of the City of Huntington Beach When Recorded Return to and Mail to: Agency Clerk Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92683 2 go7/--i`13 42 0343 -P(,4 GRANT DEED FOR A VALUABLE CONSIDERATION,receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,a public bode corporate and politic, of the State of California, herein called "Agency," acting under the Community Redevelopment Law(California Health and Safety Code §§ 33000, et seq.)of the State of California,hereby grants to LGB SECURITIES L.P. a California limited partnership, herein called"Grantee,"the real property,hereinafter referred to as the"Property,"whose legal description and map are set forth in Exhibit"A,"which is incorporated herein. 1. Agency excepts and reserves from the conveyance herein described any existing street,proposed street,or portion of any street or proposed street lying outside the boundaries of the Property,which might otherwise pass with a conveyance of the Property. Agency excepts and reserves from the conveyance herein described all interest of Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (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 five hundred(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 or other lands,but without,however,any right to use either the surface of the Property or any portion thereof within five hundred(500) feet of the surface for any purpose or purposes whatsoever,or to use the Property in such a manner as to create a disturbance to the use or enjoyment of the Property. 2. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 3343 of the Council of the City of Huntington Beach(the"City")on December 16, 1996, as amended, and the General Plan of the City approved by Council of City on May 13, 1996,by Resolution No. 96-36, as amended. Copies of the Redevelopment Plan and General Plan are on file with the City Clerk of the City of Huntington Beach at its offices as a public record and which are incorporated herein by reference. Page 1 of 9 GAAGREF:MT\2002\438 Main Street.doc 3. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that the Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan, the City's General Plan, the City Municipal Code and this Grant Deed, whichever document is more restrictive. 4. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that: (a) Solely at Grantee's expense, Grantee or Grantee's successor in interest shall reasonably maintain the improvements on the Property in good condition and appearance. Grantee shall keep the Property reasonably free from any accumulation of graffiti, debris and/or waste materials; (b) Grantee shall also maintain the landscaping on the Property in a reasonably healthy condition; and (c) If,at any time, Grantee fails to maintain the Property as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from Agency, either Agency or the City may perform the necessary landscape or other maintenance, or other actions and Grantee shall pay all costs incurred for such maintenance. 5. From ten(10) years from the date of recording of this deed, Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall not apply to the City for any land use entitlement or building permit for the Property without first applying to and obtaining a certificate of compliance from the Executive Director of the Agency or his designee that the proposed land use or building permit is consistent with the Redevelopment Plan. Agency shall not unreasonably withhold issuance of the certificate of compliance. Agency has the right, at its election,to reenter and take possession of the Property,with all improvements thereon, and terminate and revest in Agency the Property if Grantee (or its successors, transferees or assignees) shall obtain any land use entitlement or building permit for the Property without obtaining prior approval from the Agency Executive Director that the proposed use or building permit complies with the Redevelopment Plan. 6. Agency makes no warranty as to the presence or absence of any Environmental Contamination of the Property. Grantee takes the Property "as is." Grantee is responsible for determining the extent of any Environmental Contamination to the Property, and shall comply with all Environmental Laws in remediating and disposing of any Environmental Contamination of the Property. The term "Environmental Contamination" means contaminants or other toxic or hazardous substances, materials, constituents or wastes, including without limitation, all the following: any hazardous,toxic,corrosive, reactive, ignitable, carcinogenic or reproductive toxic substance, material, product, compound,chemical or waste (including, without limitation, petroleum, including crude oil or any fraction thereof, asbestos or asbestos-containing materials, flammable explosives, radioactive materials, and polychlorinated biphenyls) as defined in or Page 2 of 9 G:WGREEMT\2002\438 Main Street.doc regulated by any Environmental Laws. "Environmental Laws" mean the Comprehensive Environmental Response, Compensation and Liability Act(42 U.S.C. § 9601 et seq.),the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) and any other Federal, state or local statutes or the regulations regarding Environmental Contamination. 7. Grantee shall furnish or cause to be furnished to the Agency the following certificates of insurance in connection with any work of improvement to the Property pursuant to issuance of a certificate of compliance: (a) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability,Fire Legal Liability, Business Automobile Bodily Injury and Property Damage Liability extending to owned, non-owned and hired vehicles of Grantee or the General Contractor used in performance of any Grantee's obligations hereunder, amended as necessary to comply with governmental requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Property, including construction and staging areas,or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the issuance of any certificate of compliance. Such policy shall have an initial minimum coverage limit per. occurrence of not less than$3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e., combined single limit), and carry a deductible per occurrence of not more than $25,000. (b) Worker's Compensation Insurance. Worker's compensation insurance, to be carried by Grantee or the Grantee's General Contractor, in an amount and form sufficient to meet all applicable governmental requirements, and employer's liability coverage to a limit of not less than$1,000,000,with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Grantee and the general contractor, and all risks to such persons arising out of construction,use or occupancy of the Property. 8. Each Insurance Policy required under Section 7 shall: (a) Be in form and substance as is then standard in California for policies of like coverage; (b) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less Page 3 of 9 GAAGREEWN2002\438 Main Stmet.doc than "A X" according to A.M. Best's Insurance Reports Key Rating Guide (unless such-rating is not commercially available at a reasonable cost,as reasonably determined by the Director) or if such rating system shall cease, then of recognized financial responsibility approved by the Agency in writing; (c) Provide coverage on an occurrence basis; (d) Contain a waiver by the insurer of the right of subrogation against Agency, the City and their respective board members, officers, employees, agents and representatives. (e) Include the following endorsements: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach,their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30)days written notice is given to the City and the Agency." (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach,their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." 9. Grantee covenants that, for itself and its successors,its assigns and every successor in interest to the Property, Grantee shall protect, defend, indemnify and hold harmless City, Agency, and their officers, employees and agents from and against any and all claims, damages, losses, expenses,judgments, demands and defense costs (including, without limitation, costs and fees of litigation(including arbitration) of every nature or liability of any kind),arising out of the Property, including, but not limited to any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation Page 4 of 9 GAAGREEM7\2002\438 Main Street.doc (including arbitration)of every nature or liability of any kind), arising out of,resulting from, or in connection with, directly or indirectly, any and all Environmental Contamination. 10. Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, it agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Grantee or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. 11. _ Grantee covenants by and for itself and any successors, transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race,color, creed, religion, sex,marital status, national origin or ancestry in the sale, lease, sublease,transfer, use, occupancy,tenure or enjoyment of the Property, nor shall Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number,use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. Grantee shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such 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 assignees, 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 race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer,use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, subtenants, sublessees or vendees in the land herein conveyed. 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 assignees, 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 race, color, creed, religion, sex, marital status, national origin, or ancestry Page 5 of 9 GAAGREEMT\2002\438 Main Street.doc 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." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer,use, occupancy, tenure or enjoyment of the premises, nor shall the transferee 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, subtenants, sublessees or vendees of the premises." 12. All conditions, covenants and restrictions contained in this Grand 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 Agency, its successors, transferees, and assignees, and the City and its successors, transferees and assigns, against Grantee, its successors,transferees and assignees, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of the Property or portion thereof. 13. All of the terms, covenants and conditions of this Grant Deed shall be binding upon Grantee and its permitted successors, transferees and assignees. Whenever the term "Grantee" is used in this Agreement, such term shall include any permitted successors, transferees and assignees. Notwithstanding anything to the contrary in this Grant Deed including, without limitation, any reference in this Grant Deed to "successors,""transferees"or "assignees" or any reference herein to any covenants, conditions and restrictions running with the land. Every other covenant and condition and restriction of this Grant Deed shall remain in effect until the end of the Redevelopment Plan. The covenants against discrimination set forth in paragraph (5)of this Grant Deed shall remain in perpetuity. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and'agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. 14. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of Page 6 of 9 GAAGREEM7\2002\438 Main Street.doc protecting the interests of the community and other parties,public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been,remains, or is an owner of any land or interest therein in the Property. Agency shall have the right, if the covenants are breached,to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any.other real property within or outside the Redevelopment Plan Project Area, or any person or entity having any interest in any other such realty. 15. 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 or change any mortgage or deed of trust or security interest placed on the property; 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, and further that if the Agency exercise its rights to re-enter and take possession of the property, it shall do so subject to any mortgage, deed of trust or security interest. 16. Both Agency, its successors,transferees and assignees, and Grantee, and the successors, transferees and assignees of Grantee in and to all or any part of the fee title to the Property shall have the right with the mutual consent of Agency to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. However, Grantee and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. [SIGNATURES ON THE FOLLOWING PAGE] Page 7 of 9 GAAGREEMT\2002\438 Main Street.doc IN WITNESS WHEREOF, Agency and Grantee have caused this instrument to executed on their behalf by their respective officers hereunto duly authorized this. day of w- , 1003 Agency-Agency: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic 414,Z- Z Rou4� DATED: c[ Z v3 Chairperson ATTEST: DATED: .Z .ZOO 3 Agency Clerk APPROVED AS TO FORM: FIL DATED: Agency General Counsel S(�103 Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. LGB SECURITIES, ., ifornia lim' d partnership By: DATED: 6 -�z(l.�b-3 it s A izerat, eneral er Page 8 of 9 GAAGREEM712002\438 Main Street doc IN WITNESS WHEREOF, Agency and Grantee have caused this instrument to executed on their behalf by their respective officers hereunto duly authorized this A -day of Age?cyA-Agency- REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic 1416- l RClrlL[ DATED: Aq,4Z Z 03 Chairperson ATTEST: DATED: Agency Clerk APPROVED AS TO FORM: DATED: Agency General Counsel Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. LGB SECURITIES, L.P., a California limited partnership By: DATED: Gilles Aouizerat, General Partner Page 8 of 9 G:WGREEMT2002\438 Main Street.doc CALIFORNIA ALL-PURPOS. ACKNOWLEDGMENT �rc•.K.:c�C`:c�•,cK:c:acty�.�!�Y�!_�..c-:C.,c-!•.c�(`.c=�c...�..GC..cf.�c!?;c�F.,cY.,i=c>.cr..e�c".car.,car"..c;ecal-'.cal-"-',.c�Y'.�r.,cxoc!".c:l.,c:(`:c.�6'.c:r.,[:r.,c-!..c^r.,c-c..[-r`.,cr.;cr`.,e_r..c>-r•; State of Calif. County of Orange i On C/� -�, (� � before me, Susan L. Caine, Notary Public •I Date Name and Title of Officer(e.g.,"Jane Doe,Notary Publicl 1 ;: :;ersonally ona y appearedT�/f s c7y y P�/f T i �. Name(s)of Signer(s) known to me-OR-D proved to me on the basis of satisfactory evidence to be the person(s) ) whose name(s)is/are subscribed to the within instrument ) and acknowledged to me that he/she/they executed the ! same in his/her/their authorized capac'ity(ies),and that by ) I { his/her/their signature(s)on the instrument theperson(s),SUSAN L. CAINE I� COMM. #1312550 or the entity upon behalf of which the person(s) acted, ' 2 i NOTARY PUBLIC-CALIFORNIA� " executed the instrument. ORANGE COUNTY rw ) 4 My Comm_Exp.Aug. 6,2005 - - - - WITNESS my hand and official seal. Sign, re o1 u is OPTIONAL Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document i i Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer ❑ Corporate Officer Title(s): Title(s): ❑ Partner—❑ Limited ❑General ❑ Partner—❑ Limited ❑ General ❑ Attorney-in-Fact ❑ Attorney-in-Fact ) ❑ Trustee ❑ Trustee _ ❑ Guardian or Conservator ❑ Guardian or Conservator i ❑ Other: Top of thumb here ❑ Other: Top of thumb here ) 1 Signer Is Representing: Signer Is Representing: • 1 01995 National Notary Association•8236 Remmet Ave.,P.O.Box 7184•Canoga Park,CA 91309-7184 Prod.No.5907 Reorder.Call Toll-Free 1-600-876-(W27 STATE OF CALIFORNIA ) ss. COUNTY OF avo3 �� �4r v�ur�yr On before me, Grj'sa'—,� hsonally appeared W j . ,personally known tome to be the person(s) whose name s) iswubscribed to the within instrument and acknowledged to me that he/she he executed the same in his/her eir uthorized capacity(ies), and that by his/he eir signature(s) on the instrument Pe person(s), or the entity upon behalf of which t e person(s) acted, executed the instrument. WITNESS my hand and official seal. t 41 Signature KELLY LOUISE MANDIC ] Cornmission ri 1372899 Z -� Notory Public - California Orange County My Comm.Expires Sep 1,2006 Page 9 of 9 G:WGREEMT2002\438 Main Street.doc Exhibit A Legal Description and Map All that certain land situated in the State of California, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, described as follows: LOTS 38 and 39 IN BLOCK 403 OF HUNTINGTON BEACH, MAIN STREET SECTION, AS SHOWN ON A MAP RECORDED IN BOOK 3, PAGE 43 OF MISCELLANEOUS MAPS,RECORDS OF ORANGE COUNTY, CALIFORNIA. Page 1 of 2 v oz4-1 3 k ACAC94 A VEM E Q -�-- ----®ate 17 k ✓ o 21 BLK.,, SOr; 2e e k 4 5 H r 26 a 1 BLK. 505,�, %" 1 .11 u.r 23 W'.K1�• 24 e. 26 25 4-63� 11 dr, 27 00 TRACT C� f PECAN AYV" tr,a,cr ur-},-w-:x �,1 � ► 12 �( tors 14 2 )cJ to ! 2 24 Lr. 13 42 29 (9gff LJo,AC- ° 0,, N Ai � 0 zo . 27 s 133 NO. 14122 31 N ---Zo 31 RA CT i;,,�, s �n; -� ►s - BLK. 40b 32 ,,,. tore .... , ,� ,� ,'► j 47 ��to. k B _x J '' r _Q for BLK. 403 22 "'k 9 �" k nerl w 1E 17 19 15 14 L33 8 k 0 a r 21 s 19 0 y 14 15 0 oer 'LOT Z 2a s � '•• 4 1 404 k 7r 36 - 0 0 21 2 z3 4 zs 3 (� 37 0 a N0. 290C•v! y oRANrE _ k AVENUE ? r----� r---� �--= r--I is N NUNTINCTON BEACH. tam sr. sre.) M.M. 3-43 NOTE - ASSESSOR'S BLOCK A ASSESSOR'S MAP MARCH 7948 TRACT NO. r7900 M.M. 671-4? TO 41 INC. PARCEL NUMBERS BOOK 024 PACE 13 TRACT NO. 14172 M.M. 656-11.12 SHOWN 1N CIRCLES COUNTY OF ORANGE First American Title Insurance Company THIS MAP IS FOR INFORMATION ONLY AND IS NOT A PART OF THIS TITLE EVIDENCE DO NOT RECORD FILOR REQUESTS DO NOT RECORD STAMP VALUE Document No. DECLARATION OF TAX DUE: SEPARATE PAPER(Section 11932-11933 Revenue&Taxation Code) AND REQUEST THAT AMOUNT OF TAX NOT BE MADE A PART OF THE PERMANENT RECORD IN THE OFFICE OF THE COUNTY RECORDER Request is hereby made in accordance with the provisions of the Documentary Transfer Tax Act that the amount of tax shall be shown on this statement which shall be affixed to the document by the Recorder after the record is made and before the original is returned as specified in Section 27321 of the Government Code. APN: The Redevelopment Agency of the City of Huntington Beach,a public body corporate and politic,of the State of California ("Grantor") and LGB Securities,L.P.a California limited partnership ("Grantee") Property described in said document is located in:the City of Huntington Beach,Orange County,CA. City Conveyance Tax is$ Survey Monument Preservation Fund is$ ( x) Computed on the consideration or value of property conveyed;or ( ) Computed on the consideration or value less liens or encumbrances remaining at time of sale Documentary Transfer Tax is $ 1,045.00 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date: 6-16-2003 Signature of Declarant Maricel Bon as Print Name Atl F R� t - H U N T li"O" T .r aci;. cA First American Title Insurance Company National Commercial Services Z003 JUN -u P 12: 1 y 1 First American Way, , Santa Ana, CA 92707 Maricel Borras Direct Phone Number:(714)800-4732 Escrow Officer FAX:(714)800-3815 mborras@firstam.com City of Huntington Beach Redevelopment Agency June 02, 2003 Attention: Connie Brockway, Agency Clerk 2000 Main Street File No: NCS-24071-SAl ( mb) Huntington Beach, CA 92648 Re: 438 Main Street, Huntington Beach, CA Ms. Brockway: Regarding the sale of your property referenced above, First American Title Insurance Company National Commercial Services will be handling your transaction. ENCLOSED please find the following for your records: • Copy of Partnership Agreement for LGB Securities, L.P. • Copy of LP - 1 • Copy of LP - 2 Should you have any questions or need further assistance, please contact the undersigned. We appreciate the opportunity to serve you. Sincerely, First American Title Insurance Company Aa 'c ras/crow Officer Enc.:Del. Page 1 of 1 hs/06/02/2003 MAY- 28. 2003 (WED) 14:31 PAC I FZ C LIBERTY BANK 714 378 0842 PACE. 3/64 amp- Apr-07-03 01:21am Proo-BROWN a STRe1A, LLP +0494532113 T-918 P.01 -230 BROWN , r r 7700 Irvine Center Di,Sune 90o Pnone 949 463 3909 Inane,Cvldo►na 92e18 FAX, 946.453.2916 DevidAllen Rtown- R"Wo P, Strvza- Vanessa J ( fta Anita K Nynws Vincent J Lo Pore Ill "A Proierriarnai Cwporahon Fax PERSONAL.AND CONFIDENT)& T'ot Gilles Awwrat Frarm MSIMe Scott for RICnerd E.Streza,Ev I. Faja (714)847.7026 Papest* 55(including this cover$heat) Company: 08 SECURITIES I.P. Atltan April 7,2003 CRottt Not 61432,50 eel As requested, a copy of the Partnersnip Agreement follows The information contained in this facsimile message is attomey privileged and confidential info aeon intended only for the use of the Individual or entity named above If the reader of this message s not the intended recipient or the employee or agent responsible to deliver it to the Intended recipient, you are hereby notieea mat any d►sseminat on,distribution or copying of this communication is stnctly prohibited. If y u have received this communcaVon in error, please immediately notify us W telephone and return the original message to us at the above address via the U.S. Postal Service THANK YOU. PLEASE CALL IF ALL THE PAGES ARE NOT RECEIVED (949)453-2900 Fax No (949)453.2916 /r MAY. 28. 2003 (WED) 1 4:32 PACIFIC" IBERTY BANK 714 378 0842 PACE. 4/64 Apr-07-03 00:21am Fro-BROWN I STRIM LLP #1404512013 1-01I P,02 F-230 MAY. 28. 2003 (WED) 1 4:32 PACIFIC LIBERTY BANK 714 378 ,0842 PACE. 5/64 WA Apr-07-03 09;24am From-BROWN 4 STREZA. LLP t9494632918 T-019 P-93/59 -230 Section 18. Net Profits and Not dosses ..........................'.........................--•- ---•... .............. 7 Section 19. Operating Expenses . .. ..... . ...................... ............................ ..... . ... 7 Section20. Partners ................................................ ... , ... ..... .............. ................ . .. ... 8 Section21. Partnership ................................................. .............. . . .... .. ....................... 8 Section 22. Partnership Funds . . ....................................................... .... . .... ...... ... ... a Section 23. Partnership Interest ... .. ..... ............................... .... .-- .. ..... ... 8 Section 24. Partnership Interest Percentage ....................... ............................ ........... .. 8 Section25. Person ..................................-----..............I... .... .... ... 8 Section 26. Personal Representative ... .. ........ ....... ............ ...... 9 Section27. Property . ........................................................................... .... --- .. .. ........... 5 Article III. Capital Contributions and Accounts . ...............•..... ... 10 .................................. ... Section 1. Establishment of Capital Accounts .. . . . 10 ri a. Initial Capital Contbutions . .... .. . .. ......... ... .. .. .. ............... . . ............... .10 0. Additional Contributions ... .... .. ................................. . ... ... ... ..10 c. Valuation of Contributed Property .... .. ......................... ...................... .... ... . 10 Section 2. Maintenance of Capital Account Selances ... ... ... .................................. ....10 a Increases in the Capital Account .. . .. .. ... ... ..... ......... ................................... ..11 1. Contributions of Property . . . . .... ... ........................................... .... ........... .11 2. Allocations of Income and Gain .... . ........................ .... ... .... . ... . 11 b. Decreases in the Capital Account ........ .... .... ...... ..... ............................................ 11 1. Distributions of Money ....................................................... •-- .-- --... ... .. . 11 2. Distributions of Property .... . . --- -- ...............I........... ... 11 3. Expenditures of the Partnership ................................... ... ... . 11 4. Losses and Deductions .... ....................................................•---.......----..... .. 11 c. Other Capital Account Adjustments ............. .......... .. .. 12 1. Revaluation .. .... . ....... .............. .... ... . . .......... ................................... . . 12 .. .. .. . . ... . . 2. Adjustments for Depreciation and Other Items .... .. .. ... .. 12 Section 3. Capital Accounts of Assignee Partners ....................... ... .. .. 12 Section 4. Revaluation Adjustment .. .. .... .. .... ... ... ..... ........................................ 12 a. Adjustments Based on Fair Market Value ................................................ . ... . .. . 12 b Adjustment for Unrealized Items .. ... . ........................ 13 c. Adjustments for Non-tax Reasons ... .... . .. 13 1. Contriputions by Partners in Exchange for a GreaterInterest ................................................................................ ..... 13 2. pistrieutions to Partners in Relinquishment ofan Interest .................................................................................... ...... ....... . 13 3. liquidation of the Partnership . . ... ......... .... ... ................ ........................... . 13 4. Partnership's Property Consists of Marketable Securities ...... ... . ........ ... ....................................... ................. . 13 Section 5. Returning Capital or Property ............. .... .. .. ............... ............................. . 13 Section 6. Drawing Accounts ... .. ..... .. . ...... ... .. .... __. _ ..__ ... 14 Section 7 Loans to and From the Partnership . . ......... ........................... .......... . 14 MAY. 28. 2003 (WED) 14: 33 PACIFIC LIBERTY BANK 714 378 0842 PACE. 6/64 5X- ENDED PAGE 1 .1 U. WJ1011D Iv r-aiu ........................................................ .. . .... Iw a Terms and Conultions .. .. .. .. .. .............. ....... ......... . ....... ....... ............. . 14 A. ' •e Article IV. Allocation of Profits anq Losses .._. ................ . ...... ......................... ... .... ... 15 Section1. Allocation ........... ... . . . .. ............. . .... ... ... .................. ..... ....................... 15 Section 2. Non-allocable Net Losses ... .. ....... . ................... .. . .............................. . 15 Section 3. Capital ACCpunts of Zero . .......................... ... ........,.....1,...I.... ..... .....I.... 15 Section 4. No Priority Among Umitecl Partners ............._. .... 1s Section S. Allocation of Net Profits and Losses . .... ........ ..................... ........................... 15 Section8 M'inimum Gain ............... .... ..... .......,................ 15 Section7. Tax Allocations ....... ........................ . .. .. .. .. . .......................................... . 1f Article V. Allocation of Funds ..... .. . . .... .. ........................ .... .. ........ . ............... ..... . 17 Section 1. Distributions of Partnerah(p Funds ........................... .... .... ........... .. 17 a. Distributions of Cash .. ........ ... ............................ ... . 17 b. Distributions Shall not Deplete the Partnership's Working Capital ... ............................. .... .. .. . ..- . 17 c. Proportionate Distrowt(ons .................... .. ........................... .... I.............. .. 17 Section-2. Distribution of Cash Flow .... ....... ... ......I...I.............. _1.. ........ ..........., . 17 a. Tax Liabilities of Limite4 Partners ... ...................._ . . ...... .... .. .......... ..... 17 b. Expenses of General Partners ........................... .. ..... ........................ . .. . .. 18 c. Deficit Loans . .... . ..... . ... ...................... .. ... . ....... .............. . ... ..... .... . 18 d. Cradit Balances in Drawing Account . ... ......................... 18 e. Balance to Partners ..... ......... .......... . . .. .............•----.. ....... . 18 Section 3. Distribution of Proceeds from Capital Transactions ......... ... ... .... ...............I............ . . . ... .. 18 a. payment of Deots and Obligations .. ..... ...................... .. ..... .... .................. .. is b. Reserves .................... .... I .........I.................... .. I... ................ ...... ... ... . 18 C. Accrued Expenses .. . .. ... .. . ....... .................. ... ... .................. .......... .. ... . . 18 d. Loans by Partners .... .... ................. ... ...... ... ......... .................. ........... ..... . 1a a. Liquidation of Capital Accounts ................... .... ... ............... .... .......... ........... 19 f. To Partners Based on Profit and Loss Allocations 19 Artda VI. Management .,... ............. .. .... ...........I....... .................. 70 Section 1. General Autnority of the General Parsers ................ . .. .....•......... .- 20 Section 2. Specific Powers of the General Partners ................ ... .... . ... .................... .. 20 a. Business Powers . . .... .. ........... ................. . ... .. ......................... ... 20 b. Employment of Agents and Others . ... ........................ . ... .. ..................... .. 20 MAY. 28. 2003 (WED) 1 4:34 PACIFIC LIBERTY BANK 714 978 0842 PACE. 7/64 37CTENDEO PAQE 1 .2 c. =Fict uuuirs it, : management or tyre Partnership ......................... ..... .... ............................. 21 d_ Investmant Powers in General ............I.. ... .... ..... ........ .. ......I.... .... I.... ... 21 e Life Insurance and Annuity Powers ................................ ... ...... ....................... .. 21 f. Loan, Borrowing, and Encumprance Powers ... .. .. ... ................................ 22 g. Maintenance of Partnership Property ............ ... ... I .............................. ... .. 2 ti. Margin. WoKerage, and Bank Account Powers ... ... ...... i. Nominee Powers ... .... ........ ... .... ...................... .. .................................. .... 22 j. Nonproductive Properly ........ . .. .... . . . ...... . .............. ... .................. 23 K. Partnership Act Powers ... .. . ... . .. ..................... . . . . ... ..... . ..... ....... 23 I. Powers of Attomay . ................. . .... .... ....................... . . .. . . ... .... ............ 23 m. Real Estate Powers ..... .... ... ,......... . ... .. ... ..................... .... --- 23 •i ii- MAY. 28- 2003 (WED) 14:34 PACIFIC LIBERTY BANK 714 378 0842 PACE. 8/64 RECRIVROt 4/ 7/03 1OZ04AM: --PCX, -ZNC; #758; PAQE 2 Apr-0T,03 02,2411111 FrodwBROWN 4 SUM, LLP +9494532213 T-919 P.04/52 -230 The PARTNERSHIP AGREEMENT OF L138 SECURITIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP Article I. Creation n of Partnershia Section 1. This Limited Partnership This Limited Pannanip Agreement for LG RITIES, L.P.,A California Limited Partnership, dated, , 20&�_, (the"Agreement") is by and between GII.LES AOUIZERAT, of Huntington Beach, California, as the General Partners (the "General Partners"), and each of the persons who have signed this Agreement and who are design Ited as a limited Partner(the "Wmite4 Partners") on Exhibit-A", which is attached to this Aare - ment and incorporated in it. The General Partners and the Limited Partners are collective referred to as the "Partners Section 2. The Name of the Partnership The name of the Partnership i$ The General Partners shall file any partnership certificate or certificates as may from time to time be requires by law The General Partners may change the name of the Partnership upon giving written notice to the Limited Partners. Section 3. The Place of Business of the Partnership The principal place of pusiness of the Partnership shall be located initially at: 1120 Pacific Coast Highway, Suite A Huntington Beach, California 92648 The General Partners may, at any time, change the location of the Partnership's principal place of business upon written notice of the change to the Limited Partners, and may esta lisn such aagitional place or places of business of the Partnership as the General Partners ma from time to time determine. Section 4. Tho Purpose of the Partnership Manage Partnership Assets and Promote Harmony Among the Partners. The Partnership's purpose is to make a Profit, increase wealth, and provide a means for the Partners to become knowledgeable of, manage, and preserve Partnership Assets. The Partnership will accomplish the following: -1- MAY• 28. 2003 (WED) 14: 35 PACIFIC LIBERTY BANK 714 378 0842 PACE. 9/64 RECEIVEo: 4/ 7/03 10:OGAM; •>Pox, INO; 0789; PAQQ 3 Apr-07-03 00:24am FroOROM A $..._LA, LLP +0494532913 T-916 P-05/50 -230 a. resolve any disputes that mayar►se among the Partners in their business a well as to preserve family harmony and avoid litigation expense and problems; n. control Partnership assets; G. consolidate fractional interests in Partnershtp Assets; d, increase Partnership wealth, e establish a method by which annual gifts may be made without fractionializaig Partnership Assets; f. continue the ownership of Partnership Assets ana restrict non-Partners rlgni to acquire interests in Partnership Assets, g. provide protection to Partnership Assets from future creditor claims against Pannership members; h. prevent a Partners interest in the Partnership being transferred because of a failed marriage; i. provide flexibility in business planning not available through trusts, corporate 5na, or other business entities; j. facilitate the administration and reduce the cost associated with a Partners aisadtltty or probating a Partners estate; and k promote the Partners* knowledge of and communication about Partnership Assets Section 5, The Term of the Partnership The Partnership has begun on the date the Cenif(cate of Umitea Partnership was filed witm the Secretary of State of California and shall terminate on January 1, 2051. unless terminated 3n an earlier date as provided in this Agreement. -2- MAY. 28. 2003 (WED) 14:35 PACIFIC LIBERTY BANK 714 378 0842 PACE. 1 0/64 RECEIVED: 4/ 7/03 10:05AM; -j1OCX, INC; 07aar PACE 4 Apr-07-03 06:25am From-BROWN A STR02A, LLP +0464532913 T-010 P.06/56 F 230 Section 6. The Tax Matters partner The. General Partners shall Serve as the Tax Matters Partner pursuant to the Tax Equity at d Fiscal Responsibility Act of 1982. a. Legal and Accounting Costs for Tax Matters The Partnership shall pear the legal and accounting costs associated with any contested or uncontested proceeding by the Internal Revenue Service with rasps to the Partnership's tax returns. b. Discretion as to Tax Matters Subject to its f+duwry duty to the Partners,the Tax Matters Partner shall have the 0ght in its reasonable good faith judgment to decide whether and in what manner to contest any aucn proceeding InaluQmg appeals or judicial proceegings, and whether and o what terms to settle any such dispute with the Internal Revenue Service. Section 7. Registered Agent The name of the Registered Agent of the Partnership is Guilles Acuizerat and the registerelld office of the Partnership is* 1120 Pacific Coast Highway, Suite A . Nwritington Beach, California 92648 Section 8. Venue Venue for any dispute arising under this Partnership Agreement or any disputes among an Partners or the Partnership shall be in the county of the Registered Office of the Limited Partnership. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY •3- MAY. 28. 2003 (WED) 14:36 PACIFIC LIBERTY BANK 714 378 0842 PACE. 11/64 "MOEIVEO: a/ 7/03 10;08AM: -- -CX, INC: 0708: PAGE 8 Apr-07-03 09:25am From-BROWN i Mc& LLP +0414632013 T-919 P•OT/59 -230 Article li. D660111,00S Section 1. Affiliated Person An Affiliated Person means any Partner, a member of a Partners Immediate Family, any legal representative, successor, or assignee or trust for the benefit of any Partner and Members of their Immediate families, and any corporation of which a majority of the voting interest is ewned by any one or more of the persons referred to in this Section. Section 2. Agreement Agreement means the I A , 20,U, Agreement of Limited Partnership as it may be amended from tiros to time. Section 3. Applicable Law The California Revised or Uniform Limited Partnership Act and any amendments thereto shall apply to this Limited Partnership. Section 4. Assignee Assignee shall mean a person who has acquired a ben®httial interest in the Partnership from a Partner by assignment, but who is not a substituted Partner pursuant to the requirements f Article Tan of this Agreement. Section S. Assignment Assignment shall mean and refer to any assignment, sale, transfer, gift, or other disposition by any Partner of all or any part of, or interest in, such Partners Partnership Interest, includin 2, Out not limited to, any assignment by operation of law, inter vivos acts, testamentary disposition, or otherwise, but excluding any pledge, hypothecation or encumbrance of su Partnership Interest, Section 6. Capital Contribution Capital Contribution means the total value of cash and other consideration contributed aild Agreed to be contributea to the Partnership by each Partner as proviged in Exhibit"B"oft is Agreement, whim is attached to this Agreement and incorporated in it. Any reference in Otis Agreement to the Capital Contribution of a current Limited Partner shall include any Capital -4- MAY. 28. 2003 (WED) 14:36 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 12/64 RECEIVED: 4/ 7/03 10:06AM; -- `CX, INC; 0766; PAGE Apr-OT^03 09152m From-BROWN A STREZA, LLP f9494532913 T-619 P.09/60 -230 Contribution previously made by any prior Partner with respect to that Limited Partners interest. Section 7. Capital Transaction Capital Transaction means any transaction the proceeds of which are not includable in determining Cash Flow, including,without limitation, the sale or other disposition of all or substantially all of the assets of the Partnership and any refinancing of any mortgage on tie Property, but excluding the payment of Capital Contributions by the Partners. Section S. Cash Flow Cash Flow, which shall be determined separately for each fiscal year or portion thereof, shall mean the profits of the Partnership sunject to the following: a. Depreclation Depreciation of building,improvements, and personal property and amortization of any items such as financing fees shall not be considered as a deduction. b. Amortization of Indebtedness Amortization of any Partnership indebtedness shall be considered as a deduction. C. Reserves Tne General Partners may deduct a reasonable reserve to provide for working capital needs,funds for improvements, or replacemants, reasonable business needs oft e Partnership, or for any other contingencies of the Partnership. d. Capital Expenditure Any amounts paid py the Partnership For capital expenditures shall be considered as a deduction, unless paid by cash withdrawal from any replacement reserve for capital expenditures e, Capital Transactions The proceeds of any Capital Transaction such as mortgage refinancing, and gain or loss from any sate, exchange, eminent domain takings, loss, damage, or destruction by fire or other casualty, or other disposition, of all or any part of me Property (other Man the proceeds of any business or rental interruption insurance) shall not pe inclwclec in determining Cash Flow. -5- MAY. 28- 2003 (WED) 14: 37 PACIFIC LIBERTY BANK 714 378 0842 PACE. 1 3/64 RECEIVED: 4/ 7/03 10:08AM; -:,-•X. INC; 0758; PAGE 7 Apr-OT-03 (11%li m frw-BROWN A STRBZA, LLP +8494532913 T-019 P•09/69 F 230 f. Insurance Proceeds Payments of insurance proceeds on account of nusiness or rental intarrupt)on shall tie included as income in Cash Flow. Payment of insurance proceeds on account of lass of partnership property shall not ba included in cash flow, g. Other Items of Profit and Loss Payment, or accrual or deduction of items or amounts, which in accordance with generally accepted accounting principles may property pe considered in determinin profits or losses of the Partnership, may be excludable from or includable in Cash Flow, as the case may be. Section 9. Charity A Charity as used ,n this Agreement must ae an organization of a type described in each o §170(b)(1)(A), §170(c), §2055(a)and§2522(a) of the Code and Regulations thereunder. Section 10. Code Code means the Internal Revenue Code of 1986, as amended. Sectlon 11. Distribution Distribution shall mean any cash or property distributed by the Partnership to its Partners, excluding payments of General Partner compensation, expenses, and other fees for servic s, and excluding repayments to the Partners of loans, including accrued interest thereon. Section 12. Expenses from Operations Expenses from Operations shall mean all expenditures that the General Partners determi e in the exercise of their discretion whicn are necessary and reasonable for the operation of the Partnership Section 13. General Partner General Partner or Genera) Partners means any person or legal entity designated in this Agreement as a General Partner, or any person or legal entity who pecomes a General Partner as provided in this Agreement, in each such persons or legal entity's capacity as a General Partner of the Partnership. -6- MAY. 28. 2003 (WED) 14:37 PACIFIC LIBERTY BANK 714 378 0842 PACE. 14/64 RECEIVED: 4/ 7/03 10106AM; -' -CX. INC, N708: PAGE 6 Apr-07-03 00:25a From-BROWN I STR1ZA, LLP +0404232013 T-210 P.10/50 F 230 Section 14. Immediate Family Immediate Family means with respect to any person, his or her spouse, parents, parents n- law, descendants, nephews, nieces, brothers, sisters, brothers-in-law, sisters-:n-law, and grandchildren-in-law. Section 15. Incompetency Incompetency means that a Partner has been declared or adjudicated as incompetent or legally incapacitated by a court of competent jurisdiction or a guardian, conservator, or other personal representative of such Partner's person or estate has been appointed oy a court of competent jurisdiction. Section 16. Limited Partner Limited Partner or Llmlted Partners means any person or legal entity designated in this Agreement as a Limited Partner or any person or legal entity who pecomes a Limited Parti ier as provided in this Agreement, :n each such person's or legal entity's capacity as a Limits Partner of the Partnership. Section 17, Majority-in-Interest Majority-In•Intsrest of the Limited Partners shall mean those L,m:ted Partners owning m re than fifty,percent of the aggregate Limited Partnership Percentage interests of all Limited Partners in the Partnership Majority-In-Interest of the General Partners snail mean those General Partners owning more than fifty percent of the aggregate General Partnership Percentage Interests of all General Partners_ Section % Net Profits and Net Losses Not Profits and Net Losses shall respectively mean all not profits and net losses of the Partnership for each accounting period as reflected on the federal income tax returns of th Partnership, adjusted to reflect any changes resulting from amendments to such returns o Internal Revenue Service audits which the Partners or the Partnership have accepted or with respect to which a final determination has been made. Section 19. Operating Expanses Operating Expenses means all the costs and expenses of any kind incurred incident to the ownership and operation of the Property after acquisition by the Partnership, including, without limitation, all taxes, including real estate taxes (put excluding income taxes), payments of interest on any mortgage on the Property, the cost of operations, maintenance, management -7- MAY. 28• 2003 (WED) 1 4:38 PACIFIC LIBERTY BANK 714 376 0642 PACE. 1 5/64 RECEIVED: 4/ 7/03 10:08AM; --mCX, INC; #758; PAGE 6 Apr-OT-03 00:26as Fram-BROWN i STREZA, U.P +0494631913 T-919 P.11/39 230 fees and other Partnership debts and repairs, and the funding of any reserves required to e maintained by any mortgage on the Property. Section zo. Partners Partners means the General Partners ano the Limited Pannars of the Partnership. Section 21. Partnership Partnership means , the terms of which are governed by this Agreement. Seaon 22. Partnership Funds Partnership Funds t;hsll mean Gash Flow and cash from Capital Transactions and any o er source of Partnership income. Section 23. Partnership Interest Partnership Interest shall mean the entire right, title, and interest owned by a Partner in th Partnership. Each Partner's interest is personal property ens, as such, ne Partner shall ha e any interest in any of the assets of the Partnership. Section 24. Partnership Interest Percentage Partnership Interest Percentage shall mean the percentage interest set forth on Exhibit" "of the Agreement, as increased or decreased py assignment(s) of interests and contributions o or withdrawals from the capital of the Partnership. Such interest may also be expressed in terms of specific partnership units or fractional units owned by a Partner Section 25. Person Person shall mean an individual, partnership, limited partnership (domestic or foreign), trus , estate, association, corporation, limited IiaUility company, or other entity -8- MAY. 28. 2003 (WED) 14:38 PACIFIC LIBERTY BANK 714 378 0842 PACE. 1 6/64 RECEIVED: 4/ 7/03 10:04SAM; :X, INO; #788; RAQG 10 Apr-OT-08 08:26am From-BRM $ STREZA, LLP +0404132913 T-9111 P.12/59 F-Z30 Sectlon 26. Personal Representative For the purposes of this Agreement, the term"personal representative"shall include an executor, administrator, guarman, custodian, conservator, Trustee, or any other form of personal representative. Sectlon 27. property Property means all Partnership property (real anq personal), assets, rece(vaples and similar holdings as desctibea in Wit*"B"and any property otherwise acquired by the Partnersh p. REMAINDER OF PACE LEFT BLANK INTENTIONALLY -9- MAY. 28• 2003 (WED) 14: 38 PACIFIC LIBERTY SANK 714 378 0642 PAGE. 1 7/64 R90SIV90: 4/ 7/03 10:06AMI •>^CX, TNC; #788; PAGE 11 Apr-OP-03 09:28om From-BROWN A a,KdZA, LLP +9494582913 T-919 P•13/50 F 230 Article Ill. Capital Contributions and Accounts Section I. Establishment of Capital Accounts There shall be established on the books of the Partnership a capital account, in accordan with the ruies of Treasury Regulation ("Reg") §1 704-1(0)(2)(iv), for each Partner with resp ct to the interest held by sucn Partner. A. Initial Capital Contributions Simultaneously with the execution of this Agreement, the Partners are transferring o the Partnership the Property Igentified an Exhibit"6"in exchange for the Partnersh p Interest shown on M hibit"A". It shall De the obligation of each Partner to make suc h capital contribution referred to in "Exhibit B". 13. Additional Contributions No Wmitea Partner shall be obligated to make any further capital contributions bey nd those required by"Exhibit 8". Any Partner may contribute additional amounts of cash or property at any time, up the written consent of the General Partnors, and receive in exchange a Partnership Interest as agreed by the Partners. C. Valuation of Contributed Property Any property other than money contributed to the Partnership $hail be valued by agreement between the contributing Partner and the non-contributing Partners. An agreement as to value shall be binding on all of the Partners and shall be conclusiv ly presumed to be correct. Section 2. Maintenanca of Capital Account Balances F_Xcept as otherwise provided by Reg§1 704"1(b)(2)(iv), a separate capital account shall b maintained for each Partner and shall consist of the amount of money contributed by him o her to the Partnership (including Partnership liabilities assumed py the Partner as provided n Reg. §1304-1(b)(2)(iv)(c)], and shall be adjusted as follows, -10- MAY. 28. 2003 (WED) 1 4: 39 PACIFIC LIBERTY SANK 714 378 0842 PACE. 1 8/64 REOEIVEQ: 4/ 7/03 10:07AM; :X, INC; 0766; PA4E 12 Apr-07-03 0148am From-BROWN A STREZA, LLP +0404132013 T-019 P.14/59 F 230 a. Increases in the Capital Account A Partner's capital account shall be increased by: 1. Contributions of Property The agreed fair market value of property (as of the date of contribution and as agreed upon as provided in Section 1.e. of this Article)or money contfibuted by it to the Partnership (net of liabilities secured by such contributed property 0 ial the Partnership is considered to assume or take subject to under Code §75 ); and 2. Allocations of Income and Gain Allocations to the Partner of Partnership income and gain (or items themof) which shall include income and gain exempt from tax and income and gain described in Reg. §1.704-1(0)(2)(iv)(g) (but excluding income and gain described in Reg. §1.704-1(b)(4)(1)]. b, Decreases in the Capital Account A Partners capital account snall be decreased by' 1. Distributions of Monay The amount of money distributed to the Partner by the Partmership [includin liabilities of the Partner assumed by the Partnersnip as provided in Reg. §1. 04-- 1(b)(2)(iv)(c)]; and the amount of any graws by a Partner against his, her or is capital account. 2. Distributions of Property The fair market value of property(as of the date of distribution) distributed to the Partner by the Partnership (net of liabilities secured by such distributed prop arty that such Partner is considered to assume or take subject to under Code §7 2); 3. Expenditures of the Partnership Allocations to the Partner of expenditures of the Partnership described in Cc ae §705(s)(2)(b); and 4. Losses and Deductions Allocations to the Partner of a Partnership loss and deduction, including loss and deduction described in Reg. §1 704-1(b)(2)(iv)(9) (but excluding losses or deductions descrined in Reg §1.704-1(b)(4)(1)]. -11- MAY. 28. 2003 (WED) 14:39 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 19/64 RECEIVED: 4/ 7/03 10:07AM: -�OCX. INC; M76a; PAGE 13 Apr-07-03 00:27am From-BROWN A a(RIZA, LLP +0424832013 T-010 P.13/59 -230 c. Other Capital Account Adjustments The capital accounts shall be otherwise adjusted in accordance with Reg. §1.704- 1(b)(2)Iiv). 1. Revaluation The capital accounts of the Partners shall be increased or decreased in accordance with Section 4. of this Article to reflect a revaluation of Partner hip Property on the Partnership's books, 2. Adjustments for Depreciation and Other Items In the event of revaluation, or in the event of a contribution to the Partnersh p of property with, as of the date of contribution, a fair Mallet value greater thar or less tnan such propertys Merl aglusted tax basis, the Partners' capital acco nts Shall be subsequently adjusted in accordance with Reg. §1.704-1(b)(2)(iv)( ) for allocations to them of depreciation, amortization and gam or loss, as comp led for book purposes [in accordance with Reg. §1 704-1(b)(2)(iv)(g)l, with resp ct to such property (and not fer tax purposes). Section 3. Capital Accounts of Assignee Partners Upon the voluntary transfer of all or part of an interest in the Partnership, the capital account of the transferor partner("Assignor') that is attributable to the transferred interest shall be ca tied over to the transferee partner("Assignee"). If the transfer of an interest in the Partnership causes a termination of the Partnership under Code §708(0)(1)(8j, the capital account that carries over to the Assignee will be adjusted in accordance with Reg. &1.704.1(b)(2)(m)(e). Section 4. Revaluation Adjustment Tne capital accounts of the Partners shall be adjustea to reflect a revaluation of Partrlershi Property (including miangiele assets such as goodwill) as provided in this Section. a. Adjustments Based on Fair Market Value Any revaluation adjustment to the Partners capital accounts shall be based on the air market valve of Partnership Property (taxing into consideration Code §7701(g)] on e date of the adjustment. -12- MAY. 28. 2003 (WED) 14:40 PACIFIC LIBERTY BANK 714 378 0842 PACE. 20/64 RECEIVED: 4/ 7/03 10:07AM; - 'oX, INO; N7aa; PAGE 14 Apr-07-03 09e37stm From-BROWN & STREZA, LI.P +9494SH913 T-019 P.18/59 F 230 b. Adjustment for Unrealized Items The capital accounts of the Partners shall be adjusted to reflect the manner in which any unrealizeci income, gain, loss, or deduction inherent in the Partnership's Property (to the extent that it has not been previously reflected in the Partners' Capital a=nts) would be allocated among all the Partners if there were a taxat3le disposition of such property for fair market value on the date of adjustment. C. Adjustments for Nan-tax Reasons Revaluation agiustments to the Partners' capital accounts shall be made for substa ntial non-tax business purposes in connection with one or more of the following events, 1. - Contributions by partners In Exchange for a Greater Interest If a new or existing Partner contripytes money or other property (other than a de minimus amount) to the Partnership as consirieration for the receipt of a Partnership interest greeter than the Partnership interest owned prior to such contrltlut)on. 2. Distributions to Partners in Relinqwishment of an Interest If there is a distribution of money or other property (other than s do minlmu amount) by the Partnership to a retiring or conanu,ng partner as considerate n for the relinquishment of some or all of such Partners Partnership interest. 3. Liquidation of the Partnership Upon termination or liquidation of the Partnership. 4. Partnership's Property Consists of Marketable Securities if substantially all of the Partnership's Property(excluding money) consists of stock, securities, commodities, options, warrants. futures, or similar instruments that are readily tradable on an established securities market,then the revaluation adjustment must be made under generally accepted industry accounting practices. Section 5. Returning Capital or Property No Partner shall have the right to demand a return of capital or of any specific property of he Partnership. No Partner small have any priority over any other Partner as to the return of capital. -13- IAY• 28. 20.03 (WED) 14:41 PACIFIC LIBERTY BANK 714 376 0842 PACE. 21/64 RE06IVED: 4/ 7/03 10:06AM; - -'OX. INC; 0768; PAGE 16 Apr-07,03 09:27am From-BROWN & STREIA, LLP +9494632913 T-019 P-17/59 F 230 Section 6. Drawing Accounts An individual drawing account shall be maintained for each Partner. All withdrawals (oche than a salary paid to a General Partner) made by a Partner shall be charged to his, Mar, o its drawing account. Each Partners share of profits and losses shall be credited or charged in that Partner's drawing account. A credit balance of a Partners drawing account shall not constitute a part of that Partner" capital account or interest in the capital of the Partnership. if, after the net profit or the ne loss of the Partnership for the fiscal year has been determined, a Partners drawing account st ows a deficit(a debit balance), whether caused by drawings in excess of the Partners share o Partnership profits or by charging the Partner for his, her or its share of a partnership loss the deficit shall constitute an obligation of that Partner to the Partnership to the extent of the Partners capital account, but in no event shall any Umited Partner be liable for any amount beyond the balance in his, her, or its capital account. Payment of any amount owing to the Partnership shall be made in a manner and time determined by the General Partners. Such obligations shall not be made payable on demand nor shall interest be charged above the prime interest rate plus 3 percentage points. The limited Partners may determine by vote of a majority in interest to transfer any portion of I heir respective profit or loss to their capital accounts at any time, provided the transfers do not change the Partners' respective Partnership interest except by written consent of all Partners Section 7. Loans to and From the Partnership The General Partners, from time to time and without obligation to do so, may lend or borrc w on behalf of, and for the account of, the Partnership. A. Purpose of Loans and Porrowings The General Partners may lend or barrow such sums as may be required by the Partnership to pay principal or interest on any indebtedness of the Partnership or f r any other Partnership purpose. b. Loans to Partners The General Partners may lend Partnership funds to any of the Partners for any purpose deemed appropriate by the General Partners. C. Terms and Conditions Any amounts lent by the General Partners to the Partnership or to a Partner shall te lent upon such terms and conlivons as the General Partners shall determine, prov ded that any loans shall bear interest at a rate no greater than the maximum rate allowed by state law and that such amounts shall be deemed loans and not capital conidbutio s by the General Partners -14- MAY. 28. 2003 (WED) 1 4:41 PACIFIC LIBERTY BANK 714 378 0842 PACE. 22/64 gBCEIVIRD: 4/ 7/03 10:06AM; - :X. XNC, 0768; PAGE 16 Apt■07-03 09:27am From-BROWN A STREZA, LLP #1404532913 T-919 P.18/59 F 230 Article IV. Allocation of profits and 4.mM Section 1. Allocation The Partnership shall allocate all not profits and losses, and every item of income, dsclwctii in, gain, loss, and credit, for each calendar year of the Partnership, to each Partner in accord nce With the ratio shown on Exhibit"A"to tnis Agreement(which may be adjusted from time to -me as provided in Article 3 of this Agreement). Section 2. Non-allocable Net tosses Any Partnership net losses which cannot be allocated to one or more of the Partners with ut creating a negative capital aceoant shall be allocated to the remaining partners in proportion to their capital accounts until all Partners have a capital account of zero. Section 3. Capital Accounts of Zero Net losses allocated when all Partners have a capital account of zero shall be allocated proportionately among the Partners according to their interests in the Partnership. Section 4. No Priority Among Limited Partners There shall be no priority of one Limited Partner over another as to the contributions to oe distriiputions from the Partnership. Section 6. Allocation of Net Profits and Losses if any Partner has a deficit Capital Account balance in any tax year of the Partnership which is attributable, in whole or in part, to allocations of net losses which are attributable to nonrecourse clebt secures by Partnership property, then, to the extent possible and at a time no later than the time at which Minimum Gain is reduced below the sum of such deficit Cal lital Account balance, such deficit Capital Account balance shall be allocated to not profits in a amount no less than the Minimum Gain determined at the and of the tax year to which Such, allocations of net losses relate. Section 6. Minimum Gain Minimum Gain, for the purposes of this Article, shall be defined as the excess of the outstanding principal balance on any nonrecourse debt secured by Partnership property cii or the adiListed basis for federal income tax purposes of such property. -15- MAY. 28• 2003 (WED) 1 4:42 PACIFIC LIBERTY BANK 714 378 0842 PACE. 23/64 RECEIVED: 4/ 7/03 10:08AM; CX, INC; #750; PAGE 17 P A r-0T-03 00:20am From-BROWN qSCA, LLP +9494532913 T-910 P.19/59 F 239 Section 7. Tax Allocations All items of income, gain, loss, and deduction for federal and state income tax purposes s iall be allocated in accordance with the corresponding "book"items consistent with ins princi les of Code §704 and Reg. 61.704-1(b)(4)(1). In the event that the Partnership has taxable income that is characterized as ordinary in me under the recapture provisions of the Code, each Partners distributive share of taxably g in or loss from the sale of Partnership assets (to the extent possible) shall include a proportions,ite share of this recapture income equal to that Partners priar snare of prior cumulative depreciation deductions with respect to the assets which gave rise to the recapture incorf e, REMAINDER OF PAGE LEFT BLANK INTENTIONALLY -16� 771-'MAY. 28• 2003 (WED) 1 4•42 PACIFIC LIBERTY BANK 714 978 0842 PACE. 24/64 RBCMXVEDa 4/ 7/03 1ooOeAM; - '3x, TNC; N768; PAGE 19 Apr-07-03 09:28am From-BROWN A STREZA, LLP #9404532113 T-919 P.20/59 F 23a Article V. allocation of Funds Section 1. Distributions of Partnership Funds It is the primary intent of the Partnership to retain Partnership Funds in amounts determined in this sate discretion of the.General Partners to meet the reasonable needs of the Partners ip and other needs described as provided in this Agreement. Any Partnership Funds not so retained may be distributed under the terms of this Article. a. Distributions of Cash The General Partners may make distributions to the Partners of available cash at i uch times and in such amounts as the General Partners, in the exercise of their discrei on, determine is reasonable and proper in accordance with sound business judgemen and accounting practices. Such distributions, as determined solely in the discretion of he General Partners, shall not impair the craoit wortnmess or adversely affect the abil ty of the Partnership to carry on its business purposes. b. Distributions Shall not Deplete the Partnership'a Working Capital Prior to making distributions of available cash,the General Partners shall determin that the expenses from operations of the Partnership have been met and that a contemplated distribution of available cash will not deplete the Partnership of suffie lent wonting capital for real and contingent obligations. c. Proportionate Distributions Any distributions made in accordance with this Section shall de made in proportion to each Partners' Partnership Interest Percentage as that term is defined in Article T o of this Agreement. Section 2. Distribution of Cash Flow The Cash Flow for each fiscal year(to the extent that a distribution of Cash Flow is permi ed) may, in the sole discretion of the General Partners, be distriouted within ninety days from Me end of each such year in the following order. a. Tax Liabilities of Limited Partners First, to each Limited Partner in sufficient amount to offset any Federal or state income tax liability incurred by such Partner by reason of allocation of recognized but undistributed Partnership income (phantom income"), so long as such distribution loes not render the Partnership insolvent. -17- MAY. 28• 2003 (WED) 1 4:43 PACIFIC LIBERTY BANK 714 378 0842 PACE. 25/64 RECeIVE(]: 4/ 7/03 10:09AM1 OX, INC! #758; PAGE 10 Apr-07-03 09:28im From-BROWN A STREZA, LLP +9494532913 T-010 P.21/50 -230 b. Expenses of General Partners Seconcl, to pay the General Partners for ail unpaid fees, salary or other compensation, and to reimburse the General Partners for all reasonable costs and expenses incurred by the General Partners as provided in this Agreement_ c, Deficit Loans Third, to repay any outstanding operating gefat loans. d. Credit Balances In Drawing Account Fourth, to pay any cregit balances in any Partners Drawing Account e. Balance to Partners Flftn, to pay the palance to the Partners, allocating to each Partner in accordance Mth the ratio that such Partner shares in the profits and losses of the partnership. Section 3. Distribution of Proceeds from Capital Transactions All cash from Capital Transactions may, in the sole discretion of the General Partners, be distributed in the following order. a. Payment of Debts and Obligations First, to the payment of debts and obligations of the Partnership (other than loans by Partners to the Partnership) if required by its lenders or creditors. b. Reserves Second, if the General Partners shall so determine, in their sole discretion, a reasonable reserve shall be deducted to provide for working capital needs, funds I or improvements, or replacements, reasonable business needs of the Partnership, of for any other contingencies of the Partnership. c, Accrued Expenses Third, to pay any accrued but unpaid fees, costs and expenses owed the General Partners d. Loans by Partners Fourth, to repay any loans by Partners made to the Partnership along with accruec and unpaid interest. -18- MAY. 28. 2009 (WED) 1 4:43 PACIFIC LIBERTY BANK 714 376 0842 PACE. 26/64 FMCEIVEO: 4/ 7/03 10:06AM; OX, INC; 071591 PAGE 20 Apr-07-03 09:262M From-BROWN m STREZA, LLP f9494532913 T-919 P.22/59 -230 a. Liquidation of Capital Accounts Fifth, to each of the Partners a sum agaal to the capital account of that Partner. f. To Partners Based on Profit and Loss Allocations Sixth, the Mance to the Partners, allocating to each Penner in accordance with ratio that such Partner shares in the profits and losses of the Partnership. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY -19- MAY. 28. 2003 (WED) 1 4:43 PACIFIC LIBERTY BANK 714 378 0842 PACE. 27/64 RMOEIVL20; 4/ 7/03 10_09AM; 7X, INC; N76e; PAGE 21 Apr-07-03 OOo W Fram-BROWN fI STRUA, LLP +9494532913 T-019 P.23/50 230 Article VI. Nana me�nt Section I. General Authority of the General Partners Subject to the specific rights given the limited Partners in this Agreement, all decisions respecting any matter affecting or arising out of the conduct of the business of the Partne ship shall be made by the General Partners who shall have the exclusive right and furl authorit to manage, conduct, and operate the Partnership business. Section 2, Specific Powers of the General Partners Specifically, but not by way of limitation, the General Partners shall be authorized to exarc se the following powers. s, Business Powers The General Partners may hold the stock of or equity interests in any corporation, limited liability company, or other partnerships, as Partnership Property, and may elect or employ directors, officers, employees, and agents and compensate them for the r services_ The General Partners may sell or liquidate any business interest that is pan of the Partnership. The General Partners may carry out the provisions of any agreement entered into for the sale of any business interest of the stock thereof, The General Partners may exercGse all of the powers granted in this Agreement regardless of whether the General Partners are personally interested or an involve party with respect to any business enterprise forming a part of the Partnership Property. Provided that so Going does not constitute a breach of this Agreement, or a material conflict with the business operations of this Partnership, General Partners may senFe as officers, directors, members, managers, or general or limited partners of any other corporation, limited liability company, or partnership b. Employment of Agents and Others The General partners may employ agents, employees, managers, accountants, attorneys, consultants, and other persons necessary or appropriate to cant'out the business and affairs of the Partnership, whetner or not any sucn persons so emplo 9d are Affiliated Persons, or are employed by Affiliated Persons. The General Partners may pay as an expense of the Partnership such reasonable fees, costs, expenses, salaries, wages and other compensation to such persons as they •20- MAY. 28. 2003 (WED) 14:44 PACIFIC LIBERTY SANK 714 376 0842 PACE. 28/64 RECEIVED: 4/ 7/03 10:09AM; :X. INC: #75B; PAGE 22 Apr-07-02 09:29am Fir wBROWN A STREZA, LLP +9494532013 T-110 P-24/39 F 230 shall determine. This shall include payment or reimbursement for all fees, costa, aild expenses incurred in the formation and organization of the Partnership. o. Expenditures in the Management of the Partnership The General Partners may make any and all expenditures and investments which they, in their sole discretion, deem necessary or appropriate in connection with the management of the affairs of the Partnership ana the carrying cut of the obligation and responsibilities under this Agreement. d. Investment Powers in General The General Partners may invest and reinvest in such classes of stocks, bonds, securities, commodities, options, metals, or other property, real or personal, as the shall determine. The General Partners may invest in investment trusts as wall as in common trust fL Ads. The General Partners may purchase accident, sickness, and magical insurance on the behalf of and for the benefit of himself or herself or any Limited Partner. e. Life Insurance and Annuity Powers The Ganeral Partners may purchase, accept, hola, and deal with as owner life insurance policies and annuity contracts. The General Partners shall have the power to execute or cancel any automatic premium loan agreement with respect to any policy, and shell have the power to elect or cancel any automatic premium loan provision in a life insurance policy. The General Partners may borrow money with which to pay premiums clue on any policy either from the company issuing the policy or from any other source and may assign any such policy as security for the loan. The General Partners snail nave the power to exercise any option contained in a policy with regard to any dividend or share of surplus apportioned to the policy, to reduce the amount of a policy or convert or exchange the policy, or to surrender a policy at an time for its cash value The General Partners may elect any paid-up insurance or any extended-term insurance nonforfaiture option contained in a policy. The General Partners shall have the power to sell policies at their fair market value to the insured or to anyone having an insurable interest in the policies. The General Partners shall nave the right to exercise any other right, option, or ber efit contained in a policy or parmitteO by the insurance company issuing that policy. -21. MAY. 28• 2003 (WED) 1 4:45 PACIFIC LIBERTY BANK 714 378 0842 PACE. 29/64 RECSXVED: 4/ 7/0G 1000AM; - :X. INC; 0798; PAGE 23 Apr-OT-03 09:26= From-BROWN A STREZA, LLP +9494532913 T-010 P.25/59 -Z20 f. Loan. Sorrowing, and Encumbrance Powers The General Partners may borrow money and, as security therefore, mortgage, pl dpe or otherwise encumber the asskts,of the Partnersnip. The General Partners may prepay in whole or in part, recast, increase, modify, ext nd or refinance any mortgages affecting the Partnership Property, and in connection therewith, execute any extensions, renewals, or mogificabons of any mortgage on the Partnerahip property, provided, however, that nothing in This Agreement shall permit the General Partners, or any of;them, from subjecting any of the Partners to persoi ial li- ability for the indebtedness Secared by any mortgage on the Partnership Property. The General Partners may, at their discretion, lend Partnership funds to any Person on such terms, interest rates (w(thih legal limits), and for such sAcuriny or collateral deetmed appropriate or necessary by the General Partners. g. Maintonance of Partnership Property The General Partners shall maintain and operate the Partnership Property in a ma nor which satisfies in alt respects this obligations imposed with respect to suCh mainter ance and operation by any mortgages encumbering the Partnership Property from time i o time, and by any other agreemeInt pertaining to the Partnership Property or any pat of it. h. Margin, Brokerage, and 13110 Account Powers The General Partners are authdr(ze(l to buy, sell, and trade in securities of any nature, including short sales and on margin. The General Partners may maintain and operate margin accounts with prokers, an may plegge any securities Meld or purchases with such brokers as securities for loans and advances maps to the Parthership The General Partners are authorized to establish and maintain bank accounts of all types in one or more oanking institutions that the General Partners may choose. i. Nominee Powers The General Partners may hold jany Partnership Property in the name of a nominee, and may enter into agreements io facilitate holding such Property. -22- MAY• 28- 2003 (WED) 1 4:45 PACIFIC LIBERTY BANK 714 378 0842 PACE. 30/64 REOEIVRO: 4/ 7103 1O:1OAM; 3x, ZNc; 0118a; PARE 24 Aar-07,03 09129am FrowiROWNN t STRIZA, UP +949+4532913 T-912 P.26/59 F 230 j. Nonproductive Property The General Partners may hold property which is non-income producing or is OtheiWise nonproductive if the holding of such property is, in the sole and absolute discretion of the General Partners, in the best interests of the Partnership. k. Partnership Act Powers In adoition to all of the powers specifically granted to the General Partners in this Agreement, the General Partners may exercise those rights and powers of genera partners as provided in the Partnership Act of the State of California. The General Partners may perform every act reasonably necessary to administer tie Partnership, Subject to any express limitations or contrary directions contained in is Agreement, the General Partners shall have both the administrative and investmer it powers enumerated under this Agreement and any other powers granted by feder.il and state law with respect to General Partners. I. powers of Attorney The General Partners may execute, deliver, and grant to any individual or corpora on a revocable or irrevocable power of attorney to transact any and all business on behalf of the Partnership. The power of attorney may grant to the attorney-in-fact all of the rights, powers, a a discretion that the General Partners could have exercised, m. Real Estate Powers The General Partners may purchase and sell real estate and make leases and grant options to lease for any term, even though the term may extend beyond the term of the Partnership. The General Partners may grant or release easements and other interests with res 8ct to real estate, enter into party wall agreements, execute estoppel certificates, and develop and swWiviae any real estate. The General Partners may dedicate parks, streets, and alleys or vacate any street or alley, and may construct, repair, alter, remodel, demolish, or abanclon improvements The General Partners may elect to insure, as they deem advisable, all actions contemplated by this subsection. The General Partners may take any other action reasonably necessary for the preservation of real estate and fixtures comprising a part of the Partnership Property or the income therefrom -23- MAY. 28. 2003 (WED) 14 46 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 31/64 MAY. 28. 2003 (WED) 1 4:46 PACIFIC LIBERTY BANK 714 378 0842 PACE. 32/64 RECRIVED: 4/ 7/03 10:10AMp 3X, INC; *768; PAGF 26 Apr-07-03 09:30am From-BROWN i STRBZA, LLP +0494532913 T-619 P.27/59 -230 n. Sale, Lease, and Other Dispositive Powers The General Partners may sell, lease, transfer, exchange, grant options with respect to, or otherwise dispose of the Partnership Property. The General Partners may deal with the Partnership Property at such time or times, for such purposes, for such considerations and upon such terms, credits, and conditic ns, and for such periods of time,whether ending before or after the term of the Partnership $s they deem advisable. The General Partners may make such contracts, deeds, leases, and any other instruments it deems proper under the immediate circumstances, and may deal wi h the Partnership Property in all other ways in which a natural person could deal with hi or her prop". o. Securities Powers In addition to those other securities powers granted throughout this Article, the Ge leral Partners may retain, exercise, or sell rights of conversion or subscription with respect to any securities held as Partnership Property, The General Partners may vote or refrain from voting at corporate meetings either in person or by proxy, whether general or limited, and with or without substitutions. p. Settlement Powers The General Partners may pay, extend, renew, modify, adjust, submit to arbitratio , prosecute, defend, or compromise, upon such terns as it may determine and upo such evidence as they may deem sufficient. any obligation, suit, liability, cause of action or claim, including %axes, either in favor of or against the Partnership q. Tax Powers The General Partners shall have full authority to make, revoke, or terminate any tax.electi 3ns required or allowed to be made by the Partners under the Code, including any elections under Section 754 of the Code. Section 3, Authorization to Execute Certain Instruments With respect to all of its obligations, powers and responsibilities under this Agreement, th General Partners are authorized to execute and deliver. for and on behalf of the Partners iip, such notes and other evidence of indebtedness, contracts, agreements, assignments, dei ads, leases, loan agreements, mortgages, and other security instruments and agreements ins ch form, and on such terms and conditions, as trey in their sole discretion deem proper. MAY. 28. 2003 (WED) 14 :47 PACIFIC LIBERTY BANK _ 714 378 0842 PAGE. 33/64 RECEIVED: 4/ 7/03 10:10AM;--CX, ITVp; M76s; PAGE 20 Apr-07-03 09 0am From-BROWN & ji`REZA, LLP +9494332912 T-919 P.28/60 -230 Section 4. No Authority to Increase the Liability of Limited Partners In no event snail the General Partners, or any one of them, be empowered to take any ac ion in any Jurisdiction which would increase tha liability of the I-imit®d Partners beyond the liat ility to which May would he subject pursuant to the terms of this Agreement Section 5. delegation among the General Partners A General Partner may delegate to any other General Partner the power to exercise any r all powers.granted the General Partners as provided in this Agreement, including those whic are aiscrotionary, if allowed by law. The delegating General Partner may revoke any such delegation at will. The delegation of any swcrl power, as well as the revocation of any such delegation, shall e eviaenced ny an instrument in writing executad by the delegating General Partner As long as any such delegation is in effect, any of the delegated powers may be exercise by the General Partner receiving such delegation with the same force and effect as if the Oalegating General Partner had personally joined in the exercise of such power. Suction S. A MAJority-in-Interest of the General Partners Required to control When more than ona General Partner is serving, the concurrence and joinder of a majorit in- interest of the General Partners shall control in all matters pertaining to the administration f the Partnership. if only two General Partners are acting and tney each have the same General Partnership interest in the Partnership, the concurrence and joinder of both snail be required Partnership interests held as a Limited Partner oy a General Partner, or by any trust of whi h a General Partner is a current income peneficiary, shall be disregarded for purposes of determining a control majority-in-Interest pursuant to this Section. REMAINDER OF PAGE LEFT RLANK INTENTIONALLY -25- MAY. 28. 2003 (WED) 1 4:47 PACIFIC LIBERTY BANK 714 378 0842 PACE. 34/64 RECEIVED: 4/ 7/03 10:11AM, CX, INC: N758; PAGE 27 Apr-07-03 00(80as From-BROWN 6 STREZA, LLP +0424132013 T-012 P.22/69 -230 Article VII. Javlcgs of the Genera{ Partners Section 1. Extent and Scop(a of SerVices During the existence of the Partnership, the General Partners shall devote such time and ffon to the Partnership business as alley may, in their reasonable discretion, determine to be necessary to promote adequately the interest of the Partnership and the mutual interest o the Partners. a. Full Time Not Required Except as may be required ay any separate management or employment agreeme t, it is specifically understood and agreed that the General Partners and their affiliates hall not be required to devote full time to Partnership business b. Other Ventures The General Partners and their affiliates may engage in and possess interests in o er business ventures of any and every type or description, independently or with othe s, provided that such ventures do not conflict or compete with the business of the partnership, Neither the Partnership nor any Partner shall have right, title, or inters t an or to such independent ventures of the General Partners The existence or nonexistence of sued competition or conflict, together V11 determination of damages, if any, suffered ay the Partnership as a result of such competition or conflict shall be determined py arbitration, pursuant to the Business Arbitration Rules of the American AMitrajtion Association. It is expressly understoo and agreed that this provision with respect to conflict of interest and competition wa h the Partnersnip's business shalt be bincling on any persons who may serve as individual General Partners, or as officers, directors, managing members, or truste s of any entity General Partner, such person shall be bound by this provision for a peho of rive years from the gate of their termination of service as General Partners of this Partnership The General Partners sna u to Obligated to present any investment opportunity to tt a Partnership if sucn opportunity is of a character whicn if presented to the Partnersh p, could be taken by the Partnership for its own account. Section 2. Liability of General Partners The General Partners shall not be liable, responsible or accountable in damages or vtherw se to any Umited Partner or Limited Partners for, rind the Partnership shall indemnify the Gen tall Partners and hold the General Partners harmless against, any loss or damage incurred ay reason of any act or omission performed or omrtteq by the General Partners in good faith J. behalf of the partnership and in a manner reasonably believed by the General Partners to 0 -26- MAY. 28. 2003 (WED) 14:48 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 35/64 RECETVEO: 4/ 7/03 10:11AMv `CX, INC; #708; PAGE 26 Aar-07-03 00:31am Fran-BROWN 8 STREZA, LLP +2404632913 T-010 P.30/50 -t20 within the scope of the authority granted to the General Partners by this Agreement and 1 the best interests of the Partnership a. Gross Negligence or Willful Misconduct A General Partner shall be livois, responsible, and accountable in damages or otherwise to any Limited Partner or Limited Partners if the General Partner is gull of gross negligence or willful misconduct with respect to an act or omission and the satisfaction of any indemnification and any hold harmless shall be from and limitec to Partnership assets, eno no Limited Partner shall have any personal liability on acc unt thereof b. Good Faith Acts or omissions Any act or omission performed or omitted by a General Partner in good faith on ad ice of counsel to the Partnership shall be conclusively deemed to have been performe or omitted In good faim, c. No personal Liability for Capital Contributions The General Partners shall not be personally Fable for the retum of the capital contribution of any Partner, or any portion thereof, it being expressly understood th t any such return shall be made solely from Partnership assets. d. Indemnification of General Partners for Litigation and Controversies The Partnership shall indemnify, but only from Partnership assets to the extent available, the General Partners, or any of them, for any loss or damage incurred p reason of any act performed or omitted by the General Partner in good faith on behalf of the Partnership and in a manner reasonably believed by the General Partners to be in accordance with this Agreement and in the best interests of the Partnership. 1. Lose or Damage Loss or damage to the General Partners shall include, nut shall not be limite to, reasonable settlement costs made with a view to curtailment of costs of litig lion and reasonable attorneys' fees and all other expenses incurred in settling o defending any claims or threatened action (including any disputes with the Internal Revenue Service or tax authorities), or final, adjudicated legal proceedings. 2. No Indemnification for Certain Acts The General Partners shall not be inaemrnfied by the Partnership in the cas of gross negligence, willful misconduct, or any breach of fiduciary duty with res act to any act or omissions. -27- MAY. 28. 2003 (WED) 1 4:49 PACIFIC LIBERTY BANK 714 378 0842 PACE. 36/64 F160ETVE0: 4/ 7/03 10:11AM' CX, INC; 0746; PAGE QQ Aar-OT-03 09:31am From-BROWN A STREM LLP +9494382913 T-910 P.31/39 -230 3. No Personal Liability for the Limited Partners The Limited Partners shall not have any personal liability to the General Partners or any other Person under any circumstances on account of any uch loss or damage incurred by the General Partners or on account of the pay ent for that loss or damage. Section 3. Compensation and Expenses of General Partners The General Partners, or each of them, shall each receive a reasonable salary or other compensation for services rendered, which shall be in addition to the General Partners respective snare of Partnership profits. a. Reasonable Compensation it is the intention of the perues tnat the General Partners shall receive reasonable compensation for services rendered by them to the Partnership. Compensation sh ll be reviewed periodically and adjusted where appropriate Any such compensation shall constitute a guaranteed payment to the General Partners under§707 of the ode b. Reasonable Costs and Expenses Tne General Partners shall be entitled to charge the Partnership, and to be reimbu ed by it, for any and all reasonable costs and expenses actually incurred by the Gene I Partners in connection with the operation of the Partnership business. Any reimbursement paid to the General Partners shall be considered to be an expense f the Partnership in computing net profits or net losses. Section a. The General Partners' Responsibility to File Necessary Forms and Mak Electlons The General Partners small prepare or cause to be prepared, and execute, acknowledge, ind take all action necessary to assure prompt and timely filing of the following: The Certificate of Limited Partnership and any amendments therato, Any and all state and federal tax returns, reports, or forms, Any and all state and federal tax elections deemed by the General Partners to be in the be t interest of the Partnership. -28- MAY. 28. 2003 (WED) 14:50 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 37/64 ASCEIVED: 4/ 7/03 10:12AM; 'OX, INC; #760; PAGE 30 Apr-07-03 08:31as Froor6ROWM d STREZA, LLP +1404532213 T-919 P.32/50 -230 Section S. Limitations on the Authority of the General Partners The General Partners, or any of them, shall not be empowered, and shall have no authors y,to: Perform any act in contravention of this Agreement; Perform any act which would make it impossiOle to carry on the ordinary business f the Partnership, Make a general assignment for the benefit of cre(mors, confess a judgment again the Partnership, or file a voluntary petition under the bankruptcy laws without the unanimous approval of all partners, Possess Partnership Property or assign its rights to specific Partnership propeny f r other than a Partnership purpose; Admit a parson as a General Partner, except as permitted in this Agreement, or Admit a person as a L-imited Partner, except as permitted in this Agreement. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY .29- MAY. 28. 2003 (WED) 14:50 PACIFIC LIBERTY SANK 714 378 0842 PAGE. 36/64 RECEIVED: 41 7/03 10.1RAM 'CX, ING; 075a; PAGE 31 Aar-07-03 09;31am From-BROWN & STREZA, LLP +9494132913 T-919 P.33/39 F-230 Article Vlll. Rights and Umitation-s of the Limited Partners Section I. Rights of the Limited Partners The Limited Partners, by unanimous vote, shall have the following powers. A. Removal of a Partner The Limited Partners can remove a General Partner, or a Lamited Partner if the Li ited Partner to be removed is also a General Partner, for willful misconduct or breach his or her fiduciary opligations to the Limited Partners (without the concurrence of the General Partner aeing so removed). b. Dissolution of the Partnership Tile 1-imiteq Partners must consent to the aissowtion of the Partnership_ c, Continuance of Partnership Tne Limited Partners must agree to continue the Partnership. d. Approval for Sale The Limited Partners must approve or disapprove the sale of all or substantially all of the assets of the Partnership. e. Consent to Amendments The Limited Partners must consent to amendments to this Agreement pursuant to Article Thirteen of this Agreement. Section 2. Approval of the Admisslon of Other Partners The Limited Partners, by unanimous vote, and the consent of the General Partners, shall ve the power to approve the admission of additional Limited Partners and additional General Partners as provicied in this Agreement. This power shall be exercised upon the occurrence of either of me following events- a. No loss of Umited Liability A court of competent jurisdiction shall have previously brought relief on behaif of lirr ited partners similarly situated indicating that neitnar the grant nor the exercise of such power wili result in the loss of any Limited Partners limited liability and a court of competent jurisdiction or the internal Revenue Service has determined that neither t is -30- MAY. 28. 2003 (WED) 14:51 PACIFIC LIBERTY BANK 714 378 0842 PACE. 39/64 RECEIVED: 4/ 7/03 10:12AM; .'CX, INC; 0786; PAQE 32 Aar-07-03 09:32am From-BROWN rb STEZA, LLP +9414532913 T-919 P•34/39 F-230 grant nor the exercise of such power will result in the denial of the Partnership's s tus as a partnership for federal income tax purposes. b. Opinion of Legal Counsel Counsel for the Limited Panners (who shall be acceptable to the General Partners shell have delivereq an unqualified opinion that neither the grant nor the exercise f such power will result In ttte loss of any wmitan Partners witea liability and that a court of competent jurisdiction or the Internal Revenue Service has determined that nei er the grant nor the exercise of suen power will result in the denial of the Partnership status as a partnership for federal income tax purposes. The opinion shall 'pain a form ano substance satisfactory to the General Partners no to the Limited Partners whose partnership interests collectively constitute a majorit I of the then outstanding interests held ny the Limited Partners Section 3, Notification of the Limited Partners Any consent required by this Agreement may De obt ineq only after written notice has be n sent by the General Partners to the Limited Partners in conformance with Article Thirteen f this Agreement at least 30 days prior to the act or thing for which the consent is being requested, a. Content of Notice Such notice shall include any information or representations required by this Agreement, or Dy law, or which may be reasonably required for the Wmited Partnef s to give or deny consent b, The Method of Giving or Denying Consent Any consent or denial of consent required to be given pursuant to a notice from th General Partners must 17e given in written form in conformity with Article Thirteen o this Agreement. c. Presumption of Consent A Limited Partner who does not provide such consent or denial of consent within th rty days of notification from the General Partners shall be deemed to have given his, r. or its consent. d. Nullification of Consent Any UrnitAd Partner who has given his or her consent in conformity with this Sectio -31- MAY. 28. 2003 (WED) 1 4:51 PACIFIC LIBERTY BANK 714 378 0842 PACE. 40/64 RreOHIVEO: 4/ 7/03 1ot12AM; 'OX. INo; N768; PAGE 33 Apr-07-03 09:32am From4ROWN 8 STREZA, LLP +1404532118 T-919 P.35/19 F-230 may nullify such consent by written notice to the General Partners prior to the tap a of the 30-day period for the giving of consent. Section 4. Limitations an Limited Partners No Limited Partner, in his or her capacity as a UMitea Partner, shall engage in any of the following activities- a. Control No Limited Partner shall take part in the control of the business or affairs of the Partnership If a Partner is both a General Partner and a Limited Partner, such Pa er may. in his General Partner capacity, ao act in accordance vritn the powers of a General Partner. b. Management No trimmed Partners shall have any voice in the management or operation of any Partnership Property. c. Use of Limited Partner's Name No Limited Partner shall knowingly permit his or her name to be used in the name f the Partnership. unless the Limited Partner is also a General Partner. d. Sind the Partnership No Limited Partner snail perform any act which would be binding on the Partnershi or any other Partner. e. incur Expenditures No Limited Partner snail incur any expenditures on behalf of or with respect to the Partnership. Section S. Liability of Limited Partner The liability of each Limitea Partner for the losses, debts, and obligations of the Partnershi shall be limited to such Limited Partne0s capital contribution to the Partnership. provided, however, that under applicable partnership law, a Limited Partner may pe liable to the exte t of c1pit8l retumed to him or hot, with interest, in the event that the Partnership does not have sufficient assets to discharge its liabilities to all creditors who extended credit or whose clai s arose before the return of such capital. -32- MAY. 28. 2003 (WED) 14:52 PACIFIC LIBERTY BANK 714 378 0842 PACE. 41/64 RECEYVED: 4/ 7/03 10:12AM; '0X, XNQ; N766: PAGE 34 Apr-07-03 09:32am From-BROWN i STREZA. LLP +9494532013 T-919 P-38/59 F-230 Article IX. Books, Benords, and Bank Accounts Section 1. Books and Records The General Partners shall keep books of account with respect to the operation of the Partnership. Such books shalt be maintained at the principal place of business of the Par er- ship, or at such other place as the General Partners shalt determine, and all Partners and their duly autnoriz®d representatives shall at all reasonaole times have access to such books Section 2. Accounting Basis and Fiscal Year The books of account of the Partnership shall be kept on tha cash method of accounting, unless otherwise determined by the General Partners, and shall be closed and balanced t the end of each Partnership year. The fiscal year of the Partnership shall be the calendar ye r, or such other period as the General Partners may from time to time determine. Section S. Reports General Partners shall meet and confer, at intervals not longer than twelve months, with a ch other and with such Limited Partners, or their representatives, as may desire to attend, together with such professional personnel (attorneys, accountants, etc) as the General Partners, or any of them, may determine to be appropriate, for the purpose of review of th Partnership's financial affairs, the making or revising of financial or business plans and forecasts, and for such other purposes as may be deemed reasonstale and appropriate fo the orderly management of the Partnership Within ninety days after the end of each fiscal year, the General Partners snail cause to p prepared and sent to each person who was a Limited Partner at any time during the fiscal ear then ended, financial statements of the Partnership for the fiscal year, and a copy of the federal income tax return for the Partnership as filed, or such information to allow a Limite Partner to prepare ana fits his or her federal rncClme tax return. a. Monthly Financial Reports The General Partners may, at their discretion, d)stntiNte to each Limited Partner monthly financial reports, which may be in narrative form. b. Estimates of Profit or Loss The General Partners may, at their discretion, distnpute to each limited Partner an estimate of the partnership's profit or lass for a fiscal year prior to its and -33- MAY. 28- 2003 (WED) 14 52 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 42/64 RECr=IVHDS 4/ 7/03 10.13AM; 'CX, TNC; #738; PAGE 36 Apr-07-03 0912am From-BROWN A STREZA, LLP +9494532913 T-919 P.37/59 F-230 c. Cost of Reporting The cost of all reporting to the Partners shall be paid by the Partnership as a Partnership expanse Section 4. Sank Accounts and Partnership Funds Tne General Partners shall maintain one or mora hank accounts to oe usea for the paym nt of the expendawres incurred by the General Partners in connection with the business of the Partnership, and in which shall be depositarA any and all cash receipts a. Accounts are Property of the Partnership Ali accounts wseo by or on behalf of the Partnership shall be and remain the prope of the Partnership, and shall tie receiveq, help and aispursed by the General Partne for the purposes specFffea in tnls Agreement. b. No commingling of Funds There shall not be Qepositea in any of the Partnership accounts any funds otherth n funds belonging to the Partnership, anel no other funds shad in any way be commie led with such funds. REMAINDER OF PACE LEFT BLANK INTENTIONALLY -34- MAY. 28. 2003 (WED) 14:53 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 43/64 MCuh;IVEDO 4/ 7/00 10:13AM; -"3CX, INC; g758; PAgE 36 . Aar-07-03 09:33am From-BROWN 4 arREM LLP +9494532912 T-919 P.39/59 -230 Article X. Transfer of-Partnershia Interests by Partners Section 1. Written Consent for Sale or Transfer Except as otherwise provided in this Agreement, a umitea Partner is prohibited from self , assigning, transferring, encumpering or otherwise disposing of any interest in this Partner hip without the written consent of all of the General Partners. Section 2. Sale if the General Partners consent to a sale of a Umitea Partnership interest, a limited Partn r may sell his or her Partnership interest only after he has first offered it to the Partnership o other partners as provided in this Section, a. Notice The Selling Limited Partner shall give written notice to the General Partners and the other Limited Partners that he or she desires to dispose of his or her interest. 1. Written Offer The Selling Limited Partner shall attach to the required notice any written o er of a prospective purchaser to buy the interest This offer shall be complete in all details of purchase price and terms of payment. 2. Genuine Offer The Limited Partner shall certify in writing that the offer is genuine and in all respects what it purports to he. b. Rlght to Purchase The Partnership or the Partners, as they shall agree, shall have the exclusive right na option to purchase the Selling Partners Partnership interest at its current appraised fair market value, and shall cause a valuation of such interest to be made. c. Terms of Purchase Within thirty days after the getermination of the appraised fair market value of the Partnership interest, the Partnersnip or the Partners shall have the option to purcna e said interest and shall give the Selling limited Partner a promissory note in the prin ipal amount of the purchase price if such option is exercised. -35- MAY. 28- 2003 (WED) 14:53 PACIFIC LIBERTY BANK 714 376 0842 PACE. 44/64 na•.oyvau: 4/ 7/03 14=13AM; -*%PCX, TNC; N758; PAGE 37 Apr-07-03 09:33am From-BROWN % afREZA, LLP M9424132913 T-919 P.39/39 F-230 1. Interest Rate The promissory note snail bear interest at the rate of the appropriate Applicable Federal Rate. 2. Installment Payments The promissory note shall provide for twenty-five equal annual installment . The first installment shall become due and payable on or aefore ninety da�s from the date of the promissory note. d. Transfer of Selling Partner's Interest Simultaneously with the delivery of the promissory note by the Partnership or the Partners, the Selling Limited Partner shall deliver to the Partnersnip or the Partner any deeds, assignments, conveyances, and other instruments necessary for the prope transfer of the Partnership interest. e. Selling Partner Shall Have No Further Interest After the exchange of the note and documents transferring the Partnership interes the Selling Limited Partner shall have no further interest in the Partnership and no furtl ter liability to the Partnership. f. Right to Sell to Third Party in the event the Partnership or the Partners elect not to purchase the Selling Partn rs Partnership interest, then the Selling Limited Partner snail be free to sell and trans er his or her interest to the prospective purchaser who made the genuine offer to the Selling Limited Partner for the purchase and terms anq conditions contained in the original genuine offer. If the Selling Limited Partners Partnership interest is not so d to the prospective purchaser within 80 days of notification by the General Partners of their approval of the Sale, then the Selling Limited Partner may not sell the Selling Limit d Partners Limited Partnership Interest to the prospective seller without once again offering the Partnership Interest as provided in this Section. Section 3. Assignment to Other Partners and Immediate Family Members A Limited Partner may assign all or part of his, her, or its Partnership interest to another Partner or tie Immediate Family Member of any Partner or to any Trust established prima iy for the benefit of any Immediate Family Member of a Partner without the consent of any o er Limited Partner. The General Partners must consent to the assignment, such consent not to be unreasonably withheld. -36- MAY. 28. 2003 (WED) ]4:54 PACIFIC LIBERTY BANK 714 378 0842 PACE. 45/64 ,v:14AM; --PDX, LNC; 0758; PAGE 38 Apr-07-03 09:33w From-BROWN , AZA, LLP +0494532013 T-919 P.40/59 -230 a. Trusts A Limited Partner, upon the wntten consent of the General Partners, may assign a I or any part of his, her, or its partnership interest to any Trust in which the Partner or n Immediate Family Member is the majonty beneficial owner_ A Limited Partner that s a Trust may assign all or any part of its Partnership interest to any person or trust established for the t3enefit of any beneficiary or Immediate Family Member of any grantor or beneficiary of any person or Trust. b. Charities A Limited Partner, upon the wntten consent of the General Partners, may assign al or any part of his, her or its Partnership interest to any Charity. c. Assumption of Obligations An assignee under this Section must agree in writing to assume all of the coligatio s and undertakings of the assigning Partner under the terms of this Agreement, and o assignment or transfer shall be valid unless and until the assignee executes and delivers such instrument to the General Partners. d. Transfer to Other Partners A Limited Partner may, upon the written consent of the General Partners, enter into any agreements, options, or contracts to purchase or sell Limited Partnership interests, r any portion thereof, to any other Limited Partner(s) upon such terms and conditions as the Limited Partners may agree, provided that an executed copy of any such agreement is provided to the General Partners for review and consent at least 20 d ys prior to the effective date of such agreement, Section 4. Conditions to Become a Substituted Limited Partner Except as provided in Section 3 Of this Article, no assignee or transferee of the whole or an portion of a Limited Partner's interest in the Limited Partnership shall have the right to beco e a substitutecl Limited Partner in place of the assigning Limited Partner unless and until all o the conditions set forth in this Section have taken place. a. Consent of the Partners All General and Limited Partners (except the assigning Limited Partner), in their sot And absolute discretion, must consent in writing to the admission of the assignee as a substituted Limited Partner. -37- MAY. 28. 2003 (WED) 14:54 PACIFIC LIBERTY BANK 714 376 0842 PACE. 46/64 1u; 14AMi ->PDXj INC! 075ai PAGE SB W-07-09 09:39am From-BROWN ►. AZA, LLP +2404532013 T-910 P.41/61 -290 b. Executed Assignment The fully executed and acknowledged written instrument of assignment setting fan the intention.of the assigning Limited Partner that the assignee become a substitute Limited Partner must be delivered to the General Partners, c. Assignment of All of the Limited Partner's Interest Except for transfers to Affiliated Persons or Charities, the Limited Partnership inter st being acquired by the assignee must consist of 100% of the assigning L-imited Pa ner's interest. d. Execution of All Other Agreements The assigning Limited Partner and the assignee must execute and acknowledge any Other instruments as the General Partners may deem necessary or desirable to eff Bct the admission of the assignee as a Substituted Limited Partner, including the writtE n acceptance and adoption by the assignee of this Agreement and the assignees execution, acknowledgment and delivery to the General Partners of a Power of Attorney, the form and content of which s11e11 be provided by the General Partners. e. Payment of a Reasonable Transfer Fee A reasonable transfer fee, not exceeding $10,000 00, must be paid by the assigns 0 to the Limited Partnership. The General Partners may, in their sole and absolute discretion, establish the amount of the transfer fee on a case by case basis No transfer fee shall be required upon the voluntary transfer by a Partner to an Affiliated Person or to a Charity. Section S. Election to Treat an Assignee as a Substituted Limited Partner In the event of a voluntary assignment by a Partner, the General Partners, in their Sole discretion, may elect to treat an assignee who has not become a substituted Limited Partn r as a substituted Limited Partner should the General Partners deem that such treatment is n the best interest of the Lamited Partnership, No consent of any of the Limited Partners is required to effect the substitution of a Qm(ted Partner under this Section, except that the assigning Limited partner must evidence his or her intention that the assignee be admitte as a substituted Limited Partner in the assigning Limited Partners place and execute any instruments required by the General Partners in connection therewith, •38 MAY. 28- 2003 (WED) 1 4:55 PACIFIC LIBERTY SANK 714 376 0642 PACE. 47/64 ..� v: �•►faM; >rcx, INC; 0760; PAGE 40 Aar-OT-03 09,94am From-BROWN c 6iZA. LLP t9494532013 T-010 P.42/59 -230 Section S. Amendment of Agreement if required by law, upon the admission of a new Partner, the General Partners will be req ired to amend the Agreement of Lirnited Partnership only quartarly to reflect the substitution o Limited Partners. a. Substituted Limited Partner Acceptance Upon Amendment until the Agreement of Limitea Partnership is so amended, but only if such amend ent is required by law, an assignee shall not become a substituted Limited Partner. b. Assessment of Fees The General Partners may assess the fees, costs and expenses of any arttendme is by reason of the admission of a substituted Limited Partner against the substitute Limited Partner whose entry into tha partnership is, in the opinion of the General Partriera, necessitating such amenaments. Section 7. Death or Incompetency of a Limited Partner Upon the death or legal incompetency of an individual Limited Partner, his ar her personal representative shall have ail of the rights of a Limited Partner for the purpose of settling or managing the Limited Partners estate The Limited Partners personal representative sha I also have such power as the decedent or incompetent possesses to provide a successor s an assignee of its interest in the Limited Partnership and to join wth such assignee in making application to sunstituts such assignee as a Limited Partner. Section 8, 8ankruptoy, insolvency, or Dissolution Upon the bankruptcy, insolvency, dissolution or other cessation to exist as a legal entity of Limited Partner not an (ncliv(dual,the authorized representative of such entity shall have at the rights of a Limited Partner for the purpose of effecting the orderly winding up and disposio n of the business of such entity and such power as such entity possesses to provide a success r as an assignee of its interest in the Limited Partnership and to join with such assignee in making application to substitute such assignee as a Limited Partner Section g. Transfers Which May Result in Termination of Partnership. Notwithstanding anything in this Agreement to the contrary, no Limited Partner or other pe on who has become the holder of interests in this limiteq Partnership shall transfer, assign, or encumber all or any portion of his or her interests in the Limited Partnership during any fisc I year if such transfer, assignment, or encumbrance would (in the sole and unreviewat)le opi (on of the General Partners) result in the termination of the Partnership for purposes of the the applicable provisions of the Code, -39- MAY. 28. 2003 (WED) 1 4:56 PACIFIC LIBERTY BANK 714 378 0842 PACE. 48/64 MkCtiV613; 4/ 7/03 10:14AMp 00X, TNO; M71581 PAGE 41 Apr-07-03 00:34am From-BROWN & .,REZA, LLP +0494532013 T-110 P.43/50 -230 Section 10. Votes of Limited Partners In the event a vote of the Limited Partners mall be taken pursuant to this Agreement for ny reason, a Limited Partner shall, solely for the purpose of determining the number of Partnership units held by him or her in weighing his or her vote, be Ceemeci the holder of ny Partnership Units assigned by him or her in respect of which the assignee has not becom a substituted Limited Partner. Section 11. Approval by the SEC Notwithstanding anything in this Agreement to the contrary, no Limited Partner or other p rson who has become the holder of interests in the Partnership shall transfer, assign, or encumber all or any portion of his or her interests in the Partnership unless obtaining the pnor writte consent of the Director of the Securities Commission, if required under the Commisaian•s Ins and the opinion of counsel for the Partnership so that the transfer will not violate any fade I or applicable state securities laws Section 12, Assignment of a General Partner's Interest The interests of a General Partner in the Pannersh(p shall not be assignable, in whole or, part, without the Majority In Interest in writing of all the Limited Partners. Unless as assign ent of a General Partners interest is approved with the Majority in Interest in writing of the Lin ited Partners, the assignee shall not be entitlea to any of the rights ar powers granted to the General Partners under this Agreement. other than this right to receive all or part of the share of profits, losses, cash distributions, or returns of capital to which his, her, or its assignors would otherwise be entitled. a. Unanimous Agreement in Writing The General Partners may,if a Majority In Interest Limited Partners agree in writin admit to the Partnership one or more assignees of all or part of a General Partners interest as an additional or substitute General Partner or General Partners. b, Power of Attorney Each Limited Partner agrees that the power of attorney granted to the General Pan hers by each Limited partner in Article Thirteen entitles any General Partner to make, execute, acknowledge, swear to, deliver file, and record on behalf of each Limited Partner such documents, including, without limitation, amendments to the Partners ip's Certificate of Limited Partnership, as may be necessary to effect the admission to e Partnership of such substitute or additional General Partner. -40- MAY. 28. 2003 (WED) 1 4:57 PACIFIC LIBERTY BANK 714 378 0842 PACE. 49/64 n�ve�veu: 4/ i/Uw 10;15AMp ---PDX, INO; #758 j PAGE 4P Apr-07-93 01114aa FrwBROWN . .(REZA, LLP +9494132913 T-919 P-44/59 -230 Section 13. Additional Limited Partners The General Partners may, upon unanimous written approval of all Limited Partners, adm t additional Lirlliteq Partners, upon such limited Partners' making, or agreeing to make, sugm contribution of cash or other property to the capital of the Partnership, at such times and n such terms and conditions, and in return for such percentage of the WmdO Partners' into ast, as shall be proposed by the General Partners with such of the then Umited Partners' unanimous approval The terms of admission of such additional Limited Partners, propos d and approved as aforesaid, snail be set forth in an amendment of this Agreement, oxsew d pursuant to the power of attorney contained in Section 12 of this Article. Section 14. Termination of a General Partner If a General Partner shall cease to serve as a General Partner of this Partnership for any reason whatsoever, whether such cessation of service is voluntary or involuntary, any Go oral Partnership interest in the capital and profits of the Partnership shall thereupon convert to e Limited Partnership interest, in equivalent amount to that held by such General Penner as a General Partnership interest immediately prior to such termination of service; thereafter, s ch interests may be aggregated with, and retained or assigned in the manner set forth herein with respect to any other Limited Partners interest. Section 1S. Rules Affecting A limited Partnership Interest Subject To A Charging rder In the event that any Partnership Interest becomes subject to a charging order, then, notwithstanding anything to the contrary in this Agreement, the following provisions shall govern the rights and obligations of the Partner whose interest is so charged and the credi or in whose favor tme charging order was entered. a. No Rights In Management A creditor who obtains a charging order shall have no right to interfere in the management of the Partnership or any other rights as a Partner, except the same r ght to receive the allocation of income and losses and the distriNtions to which the transferor Partner would otherwise lie entitled. b. No Foreclosure The interest of a Partner so charged may not be foreclosed upon or otherwise sold pursuant to court order without the express written consent of all the Partners, othe than the Partner whose interest is so criarged. •41- MAY. 28. 2003 (WED) 14:57 PACIFIC LIBERTY HANK 714 378 0842 PACE. 50/64 M r-L.M."r-N: a/ F103 10:16AMi --'OGX. ING; 4107581 PAa6 43 Apr-07-03 00(35nm From-BROWN % .,REZA, LLP +0404532013 T-016 P.46/66 -230 c. Foreclosure on a General Partner's Interest Prohibited Tne Partners acknowisage and recognize that each General Partner possesses managerial skills essential for the continued operation of the business of the Partnership,and that the foreclosure on or other court-ordered sale of a General Partners interest would unduly interfere with the business and management of th Partnership. Accordingly, the interest of a General Partner may not be foreclosed n or otherwise sold pursuant to court order without the express written consent of all of the Partners, other than the General Partner whose interest.is subject to sale or foreclosure. d. Court-Ordered Foreclosure in Contraventlon of This Section. In the event that a court orders the foreclosure of a Partners interest, including th interest of a General Partner, notwithstanding the provision of this Section, then th Partnership and the other Partners shall have the option at any time prior to the consummation of the foreclosure or other court-ordered sale to redeem or purenas the interest of the Partner whose interest is so subject to foreclosure or other court-ord red sale. 1. Price of a Partner's Interest in a Forced Sale Because of the hardship placed upon the Partnership and the Partners of a court-ordered sale or foreclosure, the price and the other terms and conditions of redemption or purchase shall be equal to the balance of such Partners capital account as of the and of the calendar month iMMSCIAtely preceding the month in which the consummation of the foreclosure or other court-ordered sate Is to occur. 2. Terms and Conditions of Sale The Partnership shalt ex®cute an unsecyred promissory note payable to th Partner or redeem(ng Partner in fifteen equal annual payments plus interes at the rate of four percent(41%) per year simple interest. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY -42- MAY_ 28. 2003 (WED) 14:58 PACIFIC LIBERTY BANK 714 378 0842 PACE. 51/64 41 ♦/vA 10:15AM; -PDX, TNC; #708; PAGE 44 APr-0i'-03 09:36itm From-BROWN , .iREZA, LLP +9494522013 T-919 P.40/69 -220 Article XI. Termination 4f a Partner Section 1. Termination of a General Partner's Status If a person or entity serving as a General partner dies, becomes incapacitated, or become s pankrupt, that person's or entity's status as a General Partner shall terminate. a. Continuance of the Partnership The PaMership shall continue for as Iona as there is at least one remaining Gene al Partner, b. Dissolution of Partnership Upon termination of a sole or remaining General Partners status as General parm r, the Partnership snarl aissoiva c, Election to Continue Partnership After such dissolution, the Partnership shall thereafter conduct only activities necessary to wind up its affairs, unless within ninety days after the date of the event causing dissolution all of the remaining Partners elect in writing to continue the Partnership I. Election of Successor General Partner If an election to continue the Partnership is made, trlen a successor Gene i Partner or Partners who shall agree to serve shall be elected by a majority n interest of the Limited Partners 2. Operation of the Partnership upon the election of a successor General Partnership, the Partnership she continue to operate until the end of the term for which it is formed or until e subsequent death, incapacity, or bankruptcy of a General Partner or one of them, in which event the Partners shall again elect whether they wish to continue the PartnArship operations. 3. General Partner May Become Limited Partner An incapacitated or oankrupt General Partner or the successor in interest"'the deceased General Partner shall becom® a limited Partner only and its righ as a Limited Partner shall not be affected by termination of its General Partner status. -43- MAY. 28. 2003 (WED) 14:58 PACIFIC LIBERTY BANK 714 378 0842 PACE. 52/64- ..�.._; .=w: -#I .I W4 ,v:1 0AM; -�PDX, INC: 07581 PAGE 48 Apr-07-03 06)3620 From-BROWN dZA, LLP +1404532913 T-916 P.47/69 �-280 Seetton Z. Termination of a Limited Partner Any Partners status as a Urnited Partner will tie terminates if the Partner has transferred all of his or her interests in the Partnership in accordance with Article Ten anti all such interests are held by one or more other Umited Partners or substitute limited Partners. Section 3, Mutual Release of Liability Upon the termination of a Partners status as a Limited Partner, neither the terminated Pa Iner nor the Partnership shall have any liability to the other on account of this Partnership. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY -44- MAY• 28. 2003 (WED) 14: 59 PACIFIC LIBERTY BANK 714 378 0842 PACE. 53/64 MM%-c4.veu: 41 //03 1 p: 1 BAM; ""OX, INC; A#786: PAGE 4e Apr-07-03 00;36am From-BROWN J zZA, LLP +9404532013 T-010 P.40/50 F 230 Article XIi. Qiesolutia and TerMination Section 1. Events of Dissolution The Partnership shall be dissolved upon the occurrence of any event described in this Sectio a. Date Designated by the General Partners The Partnership shall be dissolved on a date designated by the General Partners wit the unanimous consent of all of the Limited Partners. b. Death, incapacity or Bankruptcy of a General Partner The Partnership shall be dissolved upon the death, incapacity, or bankruptcy of the I st living or existing General Partner c. Sale or Disposition of Substantially Ali of the Property The Partnership shall be dissolved upon the sale or other disposition of all or substantially all of the Partnership's right, tine and interest in and to the property and other assets with the unanimous consent of all of the Partners in accordance with ar y limitations otherwise contained in Article Eight of this Agreement concerning the right of the Limited Partners. d. End of Partnership Term In any event, the Partnership shall be dissolved on January 1, 2051, as provided in Article 1, Section 5, but may be continued as provided in Section 2 of this Article. Section 2. Continuation of Partnership Notwithstanding anything in this Agreement to the contrary, the Partnership snail remain in existence as a limited partnership if promptly after an occurrence of an event described in Section 1, of this Article all of the Partners elect to continue the Partnership a. Expiration of the Partnership's Term If, upon the expiration of the term of the Partnership, all of the remaining Partners agree to continue the Partnership,the Partnership shall continue for such additional tern, not to exceed 40 years, as may be agreed upon by the Partners. Prior to voti g an the continuation of the Partnership, the capital interest of any Partner who has indicated that he, she or it will net vote in favor of continuing the Partnership for suc additionai term or terms may, in the sole discretion of the General Partners, be retur ed to such Partner and thereafter the Partnership interest of such Partner shall be deer ea terminated. .4s- MAY. 28. 2003 (WED) 1 4:59 PACIFIC LIBERTY BANK 714 378 0842 PACE. 54/64 HhuVIVED: 4/ 7/OS 1 O:1 RAM; --'OX, INC: M7681 PARE 47 Apr-07-09 09:30am From-BROWN d ..,REZA, LLP 40404532913 T-919 P.40/50 F 230 b. No General Partner If there is no General Partner, the Limited partners shalt designate in the manner Men required under applicable state law, one or more General Partners; provided, however, that in no event shall such designation be ny the affirmative vote of less than the holders of a majority of the then outstanding limited partnership interests. o. Right to Dasignate an Additional General Partner The Limited Partners shall have the right with the concurrence of the General Pa rs in the manner and by such vote as may be required from time to tirris by applicable state law to designate an additional General Partner. Section 3. Effective Date of Dissolution Absent the election to continue the Partnership as provided in Section 2. of this Article, dissolution of the Partnership shall be effective on the date on which the event occurs givir 9 rise to the dissolution, but the Partnership shall not be wound up until the Partnership's Certificate of Limited Partnership is canceled and the assets of the Partnership have been distributed as provided in this Agreement. Section 4. Operation of the Partnership Prior to Winding Up Prior to the winding up of the Partnership, the business of the Partnership and the affairs the Partner$ shall continue to be governed Dy this Agreement. Section S. Liquidation of the Partnership Property Upon dissolution of the Partnership, the General Panners or, in the absence of a General Partner, a liquidator appointed with the majority consent of the Limited Partners shall liquid ate the Partnership Property, apply and distribute the proceeds derived from the liquidation of ihe Property as contemplated by this Agreement,and cause the cancellation of the Partnership's Certificate of L-imited Partnership a. Payment of Partnership Creditors and Provision for Reserves The Proceeds derived from the liquidation of Partnership property shall first be appi ed toward or paid to any creditor of the Partnership who is not a Partner. The order of priority of payment to any creditor shall be as required by applicable state law. After payment of liabilities owing to creditors, excluding Partners, the General Partners o liquidator shall set up such reserves as tney deem reasonaply necessary for any contingent or unforeseen liabilities or opligatipns of the Partnership. -48- MAY. 28• 2003 (WED) 1 5:00 PACIFIC LIBERTY BANK 714 378 0842 PACE. 55/64 no�mAvau: %/ 7/03 10:16AM; --PDX, INC; #7a8; PAg6 48 Apr-OT-03 09:36am FrwBROWM a -iREZA, LLP +9404532913 T-910 P.50/69 F-230 1- Ability to Create an Escrow Account Any reserves for contingent liabilities may, but need not, be paid over by ir e General Partners or liquidator to a Dank to be held in escrow for the purpose of paying any such contingent or unforeseen liabilities or obligations. 2. Distribution of Reserves Following the expiration of such penod as the General Partners or liquidat r may deem advisable, such remaining reserves shalt be distributed to the Partners or their assigns in the order of priority set forth in the provisions o Article Five of this Agreement related to the distribution of Cash Flow. b. Distribution of Property After the Payment of Liabilities and Establish ant of Reserves After paying such liabilities and providing for swch reserves, the General Partners or liquidator shall cause the remaining net assets of the Partnership to be paid to cr® itors who may bA Partners, if any, and then distributed in the same manner as providoe for aistributions of proceeds from Capital Transactions as provided in Article Five. c. Non-cash Assets. In the event that any part of the net assets distributable to the Partners consists o notes or accounts receiveme or other non-cash assets, the General Partners or liquidator may take whatever steps deemed appropriate to convert such assets in cash or any other form to facilitate distriputlon. if any assets of the Partnership ar to be distributed in-kind, such assets shall be distributed on the pasts of their fair ma et value at the date of distiipution. REMAINDER OF PAGE LEFT BLANK INTENTIONALLY -47- MAY. 28. 2003 (WED) 1 5:01 PACIFIC LIBERTY,BANK_ .�� 714 378 0842 PAGE. 56/64 Apr-07-03 00:36am From-BROWN AZA. LLP +848483201�, T-019 P.61/50 F-230 Article Xlll. Gan2raLlVinttm Section 1. Mortgage Requirements Any conveyance or transfer of title to all or any portion of the Property required or permi etl under this Agreement shall in all respects be subject to all conditions, approvals, and oth r requirements of any mortgages on the Property Section 2. Successors and Assigns Subject to the restrictions on transfers provided in this Agreement, this Agreement, and ch and every provision of it, shall be binding upon and shall inure to the benefits of the Pa ers, their respective successors, successors-in-tale, personal representatives, heirs and assig is. Section 3. Power of Attomey Each limited Partner(including any substituted i,imited Partner) by tha execution of this Agreement or any its counterpart, does hereby irrevocably constitute and appoint the tie I erat Partners, or any one or more of them, his or her true and lawful agent and attorney-in-fad,with full power and authority in his or her name, place, and stead, to make, execute, sign, acknowledge, swear to, deliver, file, and record such documents as may be necessary or appropriate to carry out the provisions of this Agreement, including, but not limited to: The Partnership's Certificate of Limited Partnership and any amendments thready The dissolution of the Partnership following its termination, Any duly adopted amendments to the Agreement; and All such other instruments, documents, and certificates which may from time to tim be required by the law of the State of California, the United States of America, or any other jurisdiction in which the Partnership shall determine to do business, or any political subdivision or agency thereof: to effectuate, implement, continue and defend the lid and subsisting existence of the Partnership. The foregoing power of attorney is hereby achrtowledged to be coupled with an interest a Cl Cher®fare is irrevocable, and snail survive the death, dissolution or incapacity of any Limit d Partner. Notwitnstanging the foregoing, no attorney-in-fact hereunder shall take any actio which would increase the liability of any Limited Partner beyond such Limited Partner's lia ility as set forth in this Agreement. .4s, MAY. 28. 2003 (WED) 15:01 PACIFIC LIBERTY BANK 714 378 0842 PACE. 57/64 RoCIRIV90: 4/ 7/03 10:17AM PCX, XNO; N766; PAGE 60 Apr-07-03 09:38am Fram4ROWN A STREYA, LLP +9414532913 T-019 P.62/51 F-230 Section 4. Amendment This Agreement may be amended by the General Partners with the unanimous consent f the Limited Partners. Section S. Partition_ The Partners hereby agree that no Partner, nor any successor-in-interest to any Partner, shall nave the right while this Agreement remains in effect to have the Property of the Partner hip partitioned, or to file a complaint or institute any proceeding at law, or to demand, reques or require the liquidation or dissolution of the Partnership, the return of capital or any specifi assets of the Partnership or in equity to have the Property of the Partnership partitioned, nd each Partner, on behalf of himself or herself, his or her successar, representative, hairs, nd assigns, hereby waives any such right It is the Intention of the Partners tnat auring their term of mis Agreement, the right of the Partners and their successors-in-interest, as among themselves, shall be governed by th terms of this Agreement, and that the right of any Partner or successors-in-interest to ass gn, transfer, sell, or otherwise dispose of his or her interest in the Partnership shall be subje to the limitations ana restrictions of this Agreement. Section 6. No Waiver The failure of any Partner to insist upon strict performance of any'provision or obligation f this Agreement, irrespective of the iengtn of time for which such failure continues, shall not p a waiver of sucn Partners right to demand strict compliance in the future. No consent or w iver express or implied, to or of any breach or default in the performance of any obligations u er this Agreement, shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation. Section 7. Changing the Partnership's Situs The sites of this Partnership may Do changed by the unanimous consent of all of the Part ers. Section S. General Matters The following general matters of construction shalt apply to the provisions of mis Agreeme t: -49- MAY. 28. 2003 (WED) 1 5:02 PACIFIC LIBERTY BANK 714 378 0842 PAGE. 5F3/64 RECEIVED: 4/ 7/03 10:17AM; �PCX, INC; N759; RAdE 01 Apr-07-08 06:37am From-BROWN A STREtA, LLP +0414532213 T-919 P-63/59 P-230 a, Construction Unle8s the context requires otherwise, words denoting the singular may be const wed as denoting the plural, and words of the plural may pe construed as denoting the singular. Words of one gender may be construed as denoting another gender as is appropriate within such context. b. Headings of Articles, Sections, and Paragraphs The headings of Articles, Sections, and Paragraphs used within this Agreement a e indud(gd solely for the convenience and reference of the reader. They shall have no significance in tho interpretation or construction of this Agreement. c. Notices All notices required to be given in this Agreement shall be made in writing by eith r. Personally delivering notice to the party requinng It, and securing a written receipt, or Mailing notice by certified United States mail, return receipt requested, to t e last Known address of the party requiring notice. The effective date of the notice shall be the date of the written receipt or the date f the return receipt, if received, or if not, the date it would have normally been received is certified mail, provided there is evidence of mailing. d. Delivery For purposes of this agreement-aelivary"shall mean" Personal delivery to any party, or Delivery oy certifieo United States mail, return receipt requested to the part making delivery, The effective date of delivery shall be the date of personal delivery or the date of t e return receipt, if received, or if not, the date it would have normally been received v a certified mail, provided there is evidence 'of mailing. e. Applicable State Law The validity of this Agreement shall be determined by reference to the laws of the tale of California, unless the s)tus of the Partnership has peen changed by unanimous consent of the Partners, in which case the validity of this Agreement shall be determined by reference to the laws of the then current situs. -50- MAY. 28. 2003 (WED) 1 5:03 PACIFIC LIBERTY BANK 714 376 0642 PAGE. 59/64 - . Y. . 1v.2 1v:1 /AM; -?PDX, INO; #780; PA©E 62 Apr-07-03 COMM F(WIRX, _- STRUA, LLP 49494532013 T-219 P-64/59 F-230 f. Arbitration in the event of any dispute ansing out of the operation or interpretation of this Agreement, or in the event of a deadlock in voting Dy General Partners or Limited Partners, said such dispute or deaglocK shall De resolved by arbitration conducted pursuant to the Business Arbitration Rules of the American Arbitration Association e parties to such arbitration shall be entitled to all rights of discovery permissible under applicable state law or the Rules of the American Arbitration Association, the decision or award of such aroitrator(s) shall be final and binding on all parties,and a judgment thereon can be entered in any court of competent jurisdiction. The prevailing party in such arbinat(on, which party shall be determined and declared by the arbitrator(s), sh II be entitleq to recover its attomays'fees and costs of such arbitration, including actual attorneys, fees incurred or expended, discovery costs and expert witness fees, if any. Nothing in this section shall be Men to discourage or prevent any parties to such aispute from engaging in a mediation process, utilizing such resources and mediators is may be appropriate to the nature of the dispute. g. Duplicate Originals This Agreement may be executed in several counterparts, each counterpart shall be considered a duplicate original Agreement. h. Severabillty If any provision of this Agreement is declared by arbitration or a court of competent jurisdiction to be invalid for any reason, such invalid4y shall not effect the remaining provisions of this Agreement. The remaining provisions shall be fully severable, and it is Agreement shall be construed and enforced as if the invalid provision had never been included. 1. Acceptance Each General and Limited Partner hereby acknowledges and confirms that he, she or i has reviewed this Limited Partnership Agreement, accepts all its provisions, and agree to be bound by all the terms, conditions and restrictions of this Agreement. IN WITNESS WHEREOF, the Partners have executed this Agreement as of the day and year first above written. GENERAL PARTNER. c illy Aouiz -51- MAY. 28. 2003 (WED) 1 5:03 PACIFIC LIBERTY BANK 714 378 0842 PACE. 60/64 ------- —1 . iv.a lu:18AM; -sPCX. XNC; B758; PACE 53 Apr-07-09 09:97am From-BROW, ifAVA, LLP +9494532913 T-910 P•55/59 F-230 LIMITED PARTNERS. '1/y� e 'o"— �Ues Aoui2 Lilliane O. AnulArirt d A xerat STATE OF CALIFORNIA ) ) SS. COUNTY OF ORANGE ) On L&Lnh St , 20P3 pefore me. MaY;4%a mr"Yca, personally appear d pep9enoy "ovin to me (or proved to me an the basis of satisfactory evidence) to be the pemon(s) whose nante(s) is/are subscribed to the within instrument and acknowledged to me that heisigehhey executed the same in 04~1tneir auth0fted capecity(ies), and that by pisiiwttheir signature(s) on the instrument the person(s), or the entity upon pehalf of which th person(s) acted, executed the instrument. WITNESS my hand and official seal, MaR7tu1 P.DE I ARCO CwnrnGa W 12M aw�p�pn►tyr Notary Public in and for said County and State swcar"M -92- MAY. 28. 2003 (WED) 1 5:04 PACIFIC LIBERTY BANK 714 376 0842 PACE. 61/64 R6oEIVEO: 4/ 7/03 10:1eAM -PDX, INC; 0768p RAGE 64 Apr-07-03 00:30am From-BROWN A STREZA, LLP +9494632213 T-919 P.68/99 F-230 STATE OF CAU ORNIA j ss. COUNTY OF��� On _�n 2002�pefore me, r' u Rxiz-: , personally appeared ~ r V74 . art proved to me on the bans of satisfactory eviaence) to be the person( wh4sa namejo W rrt subsefrbed to the within instrument and acknowledged me that h executea the same in his/psrll;hzit authorized cap>acityJW4. and that by his/he y�s:gnatureW on the instrument the person�r the entity upon behalf of whi h the person acted, executed the instrument WITNESS my hand and official seal. GWEN LYN SAND oN COmmrEsi0f1 136 956 Norary Pul c - Cai lamto Comic Costa Co my My C0Wft E.,Pres Nov 9.Z006 ota upli�in and for said County and State STATE OF CALIFORNIA ) j sS. COUNTY OF ORANGE ) On 20._., before me, personally appeared personally known to me (or provel to me on the oasis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed to the within instrument ana acknowledged to e that he/she/tney executed the same in his/her/their authorized capacay(ies), and that by his/her/their :9ignature(s) on the instrument the person(s), or the entity upon behalf of whi the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Punlic in and for said County and State •53- MAY. 28. 2003 (WED) 14: 30 PACIFIC LIBERTY BANK 714 378 0842 PACE. 1/64 IQM BEACH BLVD.,HUNTINGTON BEACH,CA 92648 (714)429-2100 FAX:(714) 37MB42 PACIFIC LIBERTY BANK ftx `-. Tb: Mabel Slack—First American Title Prom: Liz Sumgamer Insurance Company F= (714)800-3815 Pages: Total Pages 63 Phone: (714)800-4732 Date: 5-28-03 Re: Escrow#NCS-24071-SA1 CC: 0 Urgent X For Review 0 Please Comment ❑Please Reply ❑Please Recycl e Comments: Mabel, Per our conversation, I am forwarding a copy of t he S ecretary of S tate F iling a nd t he P artnershi Agreement. I will be preparing my loan documents to show the vesting as follows: LGB Securities L.P.,A California Limited Partnership If this is incorrect,please let me know as soon as possible. I would also appreciate your sending me th supplement to the escrow instructions so that I can update our file. Our customer is hoping to sign th loan documents with us on Monday, June 2, 2003. 1 will try and prepare our escrow instructions soon as I can and fax a copy to you, then if you could please fax (714) 37MB42 me a copy of the estimated dosing statement, it would greatly be appreciated. If you have any questions, I can be reached at(714)429-2102. Thank you for your help. Liz MAY. 28. 2003 (WEA) 1 4:31 PACIFIC LIBERTY BANK 714 378 0842 PACE. 2/64 California Business Search P ge 1 of 1 ,,�,�.�a,,;J;i";��T.",,��y�.,.1'f,�w:111��.�.. ,:�'tC•!�''�I(,e`„1�..!�:'.l,ti'� DISCLA MR:The information displayed here is current as of May 23, 2003 and is updated weekly. It is not a complete or certified record of the Limited Partnership or Limited Liability Company. LP/LLC LGB SECURITIES L.P. Number: 200202400018 jDate Filed: 1/16/2002 Status: active Principal Address 17912 GOTHARD STREET fflWflNGTON BEACH, CA 92647 Agent for Service of Process GILLES AOUIZERAT 17912 GOTHARD STREET HUNTINGTON BEACH, CA 92647 Fees and instructions for requesting certification of limited partnership and/or limited liability company records are included on the LP/LLC Records Order Form. Blank fields indicate the information is not contained in the computer Cale. If the agent for service of process is a corporation,the address of the agent must be requested in writing. Fees and instructions for requesting this information are included on the Corporate Records Order Form. htip://kepler.ss.ca.gov/corpd ata/ShowLplicAlIList?QueryLpl lcNumbet=200202400018&pr... 5 I27/2003 Malk30 03 02: 21p Marraret VanHerk 714 969-6689 P. 3 i MaY-26-03 01:02am From-BROWN i �,xVA, LAP +9494532913 T-322 P.04/05 F-333 9 GE OFrti o " IZ. � �1 9�AAY SECRETARY OF STATE I, Kevin Shelley, Secretary of State of the State of California, hereby certify: That the attached transcript of page(s) has been compared with the record on file in this office, of which it purports to be a copy, and that it is full, true and correct. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of r• '� ' , p R 2003 p 3 0 •r: , f secretary of Srate Svt Q-t..Form CE•107 tmv 11031 , j"Osr 03 71r.90 M:IJ( 30 03 02: 21p Marraret VanHerk 714 969-6689 � p. 4 11ar-28-03 01:03pm From-BROWN l ..KEZA. LLP +0404632613 T-322 P.05/05 F-333 State of California Secretary of State Kevin Shelley n Sate AMENDMENT TO CERTIFICATE OF LIMITED PARTNERSHIP APR 2 v 4003 KcVi 'm ^ L_cY A$30.00 filing fee must accompany this form• c�r- State IMPORTANT--Read instructions before completing this form. w,,,..,,t�.. . y Tnia Space Fa Filing use Only I 29=2400018LG6 SECURITIES L.P. S. COMPLETE ONLY THE BOXES WHERE INFORMATION 1S BEING CHANGED. ADDITIONAL PAGES MAY BE ATTACVFQ.W NECESSARY. A LIMITED PARTNERSHIP NAME (ENO THE NAME WITH TILE WORDS -LrIITEO PARTNERSHIP* OR Tr1E ABBREVIATION 'LP.') Tnh bT A0014633 OF Thd PRVICIPA� F ICE ADDsess 17012 GOTHARD STREET CITY HUNTINGTON BEACH RTATF, GA AT c g2647 C. TTIE STREETAODRESS IN CALIFORNIA WKR£RECORDS ARE KEPT STREETAO0R@S5 17912 GOTHARD STREET cm HUNTINGTON BEACH STATE CA ZIP cQDE 92647 D. ThE ADDRESS OF GENERAL PARTNea(s) NAME ADDRESS E NAME CnANGE OF A GENERAL PARTNER FROM, To. F. GENERAL PARTNER($) CESSATION G. GENERAL PARTNER ADDED NAME ADDRESS CITY STATE ZIP CODE h. THE PERSON(S)wuTHORIZEO TO WIND UP AFFAIRS OF ThE LIMITED PARTNERSHIP NAME AODA9= I. ThC NAME OF THE AGENT FOR 5FRw4E OF PROCESS j IF AN WDwIDuAL,CALIFORNIw ADDRESS Of THE AGENT FOR SERVICE OF PROCESS ADDRESS 17212 GOTHARD STREET nTM HUNTINGTON BEACH s7ATE CA ZIP cooE 92647 IL NwBER OF GENERAL PARTNERS 310NATURES REQuIREO FOR FILINO CERTIFICATES OF AMJENOMEIvT.RESTATEMENT.MERGER.DISSOLuT)ON, CONTINUATION AN0 CANCELLATION. L. OTKER MATTZRS(ATTAC01 AOOITIONAL PAGES.IF NECESSARY) AGE OF ry 4 NLW ATr^r"E0 (IMMI S. I CERTIfr t:8T ENTS NTAINED IN ThIS DOCUMENT ARE TRUE AND CORRECT TO Mr OWN KNOWLEDGE I DEt E N WHO N NSTR ENT,WHICH ExECuTION IS MY ACT AND DEED. A� Gen Ptr GILLES AOUIZERAT ��+ '� SITION OR TITLE TINT NAME A PATE S ATLIRE FSSITION OR Y17LIE PRINT N DwT SEC)STATE (REv 01.03) FORM LP-2-FLING FE6' S30.00 Ma 30 03 02: 21p Marraret VanHerk 714 969-6689 P- 1 Iay-26-03 01:00pm Fran-BROWN 6 SIR M LLP +0494532913 T-322 P.02/05 F-333 � S S ta SECRETARY OF STATE Ir of I, BILL JONES, Secretary of State of the State of California, hereby certify: That the attached transcript of page(s) has been compared with the record on file in this office, of which it purports to be a copy, and that it is full, true and correct. z `�,•u., • '�' IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of .ti Secretary of Statr SOC/Si.m rum,ce-Ml (I— e:aa) �.. O�J� Ot a5156 Ma q 30 03 02: 21p Margaret VanHerk 714 969-SGBS s p. 2 flay-28-03 0I:01pm From-BROWN 6 STREZA, LLP +9494532613 T-322 P.03/05 F-333 U U 2 0 2 4 0 0 018 OPcretarp of btate il[�oneg . CERTIFICATE OF LIMITED PARTNERSHIP of McSlaleotCa;1.;�;.:, JAN 16 2002 A$78.00 Ming faa mint ACCOMpany lhl*loran. BILL JONES,Secretary of St3 IMPORTANT—Rssd Inskuaftne twforn compladnd this fora» JW&Was FW FWV U"Dray 1. NAAAE OF TK LIMITED PART?fflA911P (END T►IE NAME MITI H THE vvWS 'LutMO PARTNERSHIP OR THE ARBREVIATION 'LP•) B C T S Z IIP COOE 1120 PACIFIC COAST HIGHWAY, SUITE-A HUNTINGTON REACH CA 91648 > IA OFFICEMMEAE REGOR=ARE KEPT MY zip 35sr- 1120 PACIFIC COAST HIGHWAY, SUITE A IiLJN'PINGTON BCH CA 91648 4 CQMMZM IF WMW PARTMMKP VAS F&=PRIOR TO DULY 1.1254 AND-13 M fASTEWA ON R OMTE TK4 CBRTFICATT3 IS EXECUTED THE OPA04AL UMMM PART►ORSH P CERTIFICATE VAS RECORDED Ow 19 VAT"THE RECORaER OF COUNTY. FLE OR RICORlIATION NUMBER i NAME TNR AOENT FOR IMAM Of PA="AND WCK THR APPROPRIATE PRONSION ItEW W. GILLES AOUIZERAT a 16e1 AN MIONIDUAL UPOW IN CALIFOP." PROCEED 10 ITEM e. we FI •e T7Eeu msEctiow,e P mTb IL V AN OF GERM CE OF PROCE&L, ADDRESS 1120 PACIFIC COAST HIGHWAY, SUITE A cmr. HUNTINGTON BEACH STATE: CA 92641B T-HARMS AND A WdWRA GF ALi GENERAL PARTNiLW Y►TTACH At1OITIONAL PAGES_IF NECESSARY) A. NAME- GILLES AOUIZMIMT ADDREss:1120 PACIFIC COAST HIGHWAY, SUITE A CRY: HUNTINGTON BEACH STATE CALIFORNIA ZP COM 92648 IL NAME ADOR..SS'. CAI. NTATE ZW CODE e. *am-m r-w I OF OENERAL PARTNERS 6iGNATy$ OtIIRED FOR FLUNG C6xWWAW4 OF AMENDNT.RESTAMONT,MEAGER. D Rt 11113 oN. TICM AMD CAMCCL"TIOM. e. 0TNCA11rI►T11eRa TA 81r QdtLuOF~D 1t�TNIS ClR11iMM MAY M 6ET FORTH ON SEPARATE ATTACH►AGED-ASP ARE MWE A PART OF TMta CERTIFIC Br�GNE'C�IaNG TMIs WiL OT?SER MATTERS WAY n CLuM THE PURPOSE OF BUSINESS OF THE LI&WIED PARTN6ASnIP EG Ca&Wa4l 1<N WRISM to. TaTA L*at=OF PAGESATTAZAw.IF Awv. ED 11. 1 CERT1Pb THAT THE 5111ATI:MENTS CONTAINED W ThA GOCLOWWARE TRUE Ap#D CORRECT TO W 0VW KNOM4POGR I DECLARE TWIT 1 AM THE PERS. wMp Is ESSCUTINO p4 ,"1e14 CKFC 10N T6 MY4CrAND DEED- GENERAL PTR GILLES AOUIZERAT MON OR fGQF T PR W OATt SIGRATURE PORTION OR Vw OATI WMISTATE (Ray. Ilml FOftlt LRi-FuNG FEE: Vain pudW by Ssarototy W ISMS Q�.... . . \� �!/ w � First American Title Insurance Company D" National Commercial Services Division 1 First American Way, , Santa Ana, CA 92707 Maricel Borras Direct Phone Number:(714)800-4732 Escrow Officer FAX:(714)800-3815 mborras@firstam.com City of Huntington Beach Redevelopment Agency May 05, 2003 Attention: Connie Brockway, Agency Clerk 2000 Main Street File No: NCS-24071-SAl ( mb) Huntington Beach, CA 92648 Re: 438 Main Street, Huntington Beach, CA Ms. Brockway: Regarding the sale of your property referenced above, First American Title Insurance Company National Commercial Services Division will be handling your transaction. PLEASE SIGN AND RETURN, retain the copy for your records: •_ Commitment For Title Insurance Report Should you have any questions or need further assistance, please contact the undersigned. We appreciate the opportunity to serve you. Sincerely, First American Title Insurance Company Maricel Borr s/I Escrow Officer Enc.:Del. cc: Curt Stalder, Lee&Associates (via delivery) Page 1 of 1 hs/05/05/2003 r� Form No. 1068-2(rev. 10/17/92) OR-2303434 Exhibit A to Commitment TITLE OFFICER-DAVID M.NEAL T a �tF � f 4S c IN, �r Commitment Title nsurance First American Title hisurance Company Alta Plain OR-2303434 Language Commitment TITLE OFFICER-DAVID M.NEAL First American Title Insurance Company 2 First American Way,Santa Ana,California 92707 {P.O.Box 267,Santa Ana,California 92702) (714)900-3000 The Title Insurance Commitment is a legal contract between you and the company. It is issued to show the basis on which we µill issue a Title Insurance Policy to you. The Policy µill insure you against certain risks to the land title,subject to the limitations shown in the Policy. The Company µill give you a sample of the Policy form,if you ask. The Commitment is based on the land title as of the Commitment Date. Any changes in the land title or the transaction may affect the Commitment and the Policy. The Commitment is subject to its Requirements,Exceptions and Conditions. THIS INFORMATION 1S NOT PART OF THE TITLE INSURANCE COMMITMENT TABLE OF CONTENTS Page AGREEMENT TO ISSUE POLICY 1 CONDITIONS 2 SCHEDULE A 1. Commitment Date 3 2. Policies to be issued,Amounts and Proposed Insureds 3 3. Interest in the Land and Owner 3 4. Description of the Land 3 SCHEDULE B-1—Requirements SCHEDULE B-2—Exceptions YOU SHOULD READ THE COMMITMENT VERY CAREFULLY. If you have any questions about the Commitment,please contact the issuing office. Alta Plain OR-2303434 Language Commitment t I rLE OFFICER-DAVID M.NEAL COMMITMENT FOR TITLE INSURANCE ISSUED BY First American Title Insurance Company AGREEMENT TO ISSUE POLICY We agree to issue a policy to you according to the terms of this Commitment. When we show the policy amount and your name as the proposed insured in Schedule A,this Commitment becomes effective as of the Commitment Date shown in Schedule A. If the Requirements shown in this Commitment have not been met within six months after the Commitment Date, our obligation under this Commitment will end. Also,our obligation under this Commitment will end when the Policy is issued and then our obligation to you will be under the policy. Our obligation under this Commitment is limited by the following: The Provisions in Schedule A. The Requirements in Schedule B-1. The Exceptions in Schedule B-2. The Conditions on Page 2. The Commitment is not valid without SCHEDULE A and Sections 1 and 2 of SCHEDULE B. First American Title Insurance Company BY4'a' PRESIDENT ATTEST 7X SECRETARY eS�tLNs�� COLTNTERSI TED r��!.• 00.P 0 p' ' �4 / f SEPTUDER 24 a BY DAVID M.NEAL,TITLE OFFICER �_ •�4l DIRECT TELEPHONE NUMBER -714-800-4966 `y� FAX NUMBER-714-800-4751 PAGE I Alta Plain OR-2303434 Language Commitment t ITLE OFFICER-DAVID M.NEAL CONDITIONS 1. DEFINITIONS (a) "Mortgage"means mortgage,deed of trust or other security instrument. (b)"Public Records"means title records that give constructive notice of matters affecting the title according to the state law where the land is located. 2. LATER DEFECTS The Exceptions in Schedule B-Section 2 may be amended to show any defects,liens or encumbrances that appear for the first time in the public records or are created or attached beaveen the Commitment Date and the date on which all of the Requirements(a)and(c)of Schedule B-Section 1 are met. We shall have no liability to you because of this amendment. 3. EXISTING DEFECTS If any defects,liens or encumbrances existing at Commitment Date are not shown in Schedule B,we may amend Schedule B to show them. If we do amend Schedule B to show these defects,liens or encumbrances,we shall be liable to you according to Paragraph 4 below unless you knew of this information and did not tell us about it in writing. 4. LIMITATION OF OUR LIABILITY Our only obligation is to issue to you the Policy.referred to in this Commitment,when you have met its Requirements. If we have any liability to you for any loss you incur because of an error in this Commitment,our liability will be limited to your actual loss caused b% your relying on this Commitment when you acted in good faith to: comply with the Requirements shown in Schedule B-Section I or eliminate with our written consent any Exceptions shown in Schedule B-Section 2. We shall not be liable for.more than the Policy Amount shown in Schedule A of this Commitment and our liability is subject to the terrns of the Policy form to be issued to you. 5. CLAIMS MUST BE BASED ON THIS COMMITMENT Any claim,whether or not based on negligence,which you may have against us concerning the title to the land must be based on this Commitment and is subject to its terms. PAGE �S A M E R � First American Title Company ppp���... 9 1 FIRST AMERICAN WAY,SANTA ANA,CALIFORNIA 92707 � � (P.O. BOX 267, SANTA ANA,CALIFORNIA 92702) ' (714) 800-3000 MAY 02, 2003 FIRST AMERICAN TITLE COMPANY 1 FIRST AMERICAN WAY SANTA ANA,CA 92707 ATTN: MARICEL BORRAS LUL; YOUR NO. 24071-MB OUR NO. 2303434 �f DATED AS OF MARCH 21,2003 AT 7:30 A.M. SUPPLEMENTAL COMMITMENT THE ABOVE-NUMBERED COMMITMENT (INCLUDING ANY SUPPLEMENTS OR AMENDMENTS THERETO) IS HEREBY MODIFIED AND/OR SUPPLEMENTED IN ORDER TO REFLECT THE FOLLOWING ADDITIONAL ITEMS RELATING TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE AS FOLLOWS: ITEM NO.6 IS AMENDED TO READ: 6. UNRECORDED LEASE, FOR THE TERM, AND UPON THE TERMS, COVENANTS AND CONDITIONS PROVIDED THEREIN,AS DISCLOSED BY A RENT STATEMENT DATED APRIL 29, 2003: TENANT: A-CREATIVE BY DAVID M.NEAL,TITLE OFFICER DIRECT TELEPHONE NUMBER -714-800-4966 FAX NUMBER-714-8004751 /PF Alta Plain OR-2303434 Language Commitment i ITLE OFFICER-DAVID M.NEAL RE: 438 MAIN STREET,HUNTINGTON BEACH SCHEDULE A 1. COMMITMENT DATE: MARCH 21,2003 AT 7:30 A.M. 2. POLICY OR POLICIES TO BE ISSUED: OWNERS POLICY: AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY- 1992 WITH REGIONAL EXCEPTIONS (#9 ON COMMITMENT COVER) POLICY AMOUNT: $(TO BE DETERMINED) PREMIUM AMOUNT: $(TO BE DETERMINED) PROPOSED INSURED: (TO BE DETERMINED). 3:(a) THE ESTATE OR INTEREST IN THE LAND DESCRIBED IN THIS COM\IITMENT IS: A FEE. 3.(b) TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: THE CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY. 4. THE LAND REFERRED TO IN THIS COMMITMENT IS DESCRIBED AS FOLLOWS: PAGES Alta Plain OR-2303434 Language Commimicnt TITLE OFFICER-DAVID M.NEAL ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA,COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH,DESCRIBED AS FOLLOWS: LOTS 38 AND 39 IN BLOCK 403 OF HUNTINGTON BEACH, MAIN STREET SECTION, AS SHOWN ON A MAP RECORDED IN BOOK 3, PAGE 43 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. PAGE 4 Alta Plain OR-2303434 Language Commimient I ITLE OFFICER-DAVID M.NEAL WARNING "THE MAP ATTACHED HERETO MAY OR MAY NOT BE A SURVEY OF THE LAND DEPICTED THEREON. YOU SHOULD NOT RELY UPON IT FOR ANY PURPOSE OTHER THAN ORIENTATION TO THE GENERAL LOCATION OF THE PARCEL OR PARCELS DEPICTED. FIRST AMERICAN EXPRESSLY DISCLAIMS ANY LIABILITY FOR ALLEGED LOSS OR DAMAGE WHICH MAY RESULT FROM RELIANCE UPON THIS SOAP": PAGES Alta Plain OR-2303434 Language Commitment LE OFFICER-DAVID M.NEAL SCHEDULE B -SECTION 1 REQUIREMENTS THE FOLLOWING REQUIREMENTS MUST BE MET: (A) PAY THE AGREED AMOUNTS FOR THE INTEREST IN THE LAND AND/OR THE MORTGAGE TO BE INSURED. (B) PAY US THE PREMIUMS.FEES AND CHARGES FOR THE POLICY. (C) DOCUMENTS SATISFACTORY TO US CREATING THE INTEREST IN THE LAND AND?OR THE MORTGAGE TO BE INSURED MUST-BE SIGNED,DELIVERED AND RECORDED. . (D) YOU MUST TELL US C:1VRITING THE NA v1E OF ANYONE NOT REFERRED TO IN THIS COMMITMENT WHO WILL GET AN INTEREST IN THE LAND OR WHO WILL MAKE A LOAN ON THE LAND. WE MAY THEN MAKE ADDITIONAL REQUIREMENTS OR EXCEPTIONS. (E) RELEASE(S)OR RECONVEYANCE(S)OF ITEM(S) (F) OTHER- (G) YOU MUST GIVE US THE FOLLOWING INFORMATION: X I. ANY OFF RECORD LEASES,SURVEYS,ETC. X 2. STATEMENT(S)OF IDENTITY,ALL PARTIES. X 3 OTHER— WE WILL REQUIRE A CERTIFIED RENT ROLL AND FULL COPIES OF ALL UNRECORDED LEASES AFFECTING THE LAND. PAGE Alta Plain OR-2303434 Language Commitment fLE OFFICER-DAVID M.NEAL SCHEDULE B -SECTION.2 EXCEPTIONS ANY POLICY WE ISSUE WILL HAVE THE FOLLO\\'ING EXCEPTIONS UNLESS THEY ARE TAKEN CARE OF TO OUR SATISFACTION. THE PRINTED EXCEPTIONS AND EXCLUSIONS FROM THE COVERAGE OF THE POLICY OR POLICIES ARE SET FORTH IN EXHIBIT A ATTACHED. COPIES OF THE POLICY FOR,\1S SHOULD BE READ. THEY ARE AVAILABLE FROM THE OFFICE WHICH 15Sl'ED THIS COMMITMENT. 1. GENERAL AND SPECIAL TAXES FOR THE FISCAL YEAR 2003-2001, A LIEN NOT YET DUE OR PAYABLE. 2. SECOND INSTALLMENT GENERAL AND SPECIAL TAXES FOR THE FISCAL YEAR 2002-2003, NOW A LIEN NOT YET DELINQUENT; AMOUNTS 152.46; CODE AREA: 04-035. A.P.NO.: 024-134-02. 3. THE LIEN OF SUPPLEMENTAL TAXES ASSESSED PURSUANT TO CHAPTER 3.5 COMMENCING WITH SECTION 75 OF THE CALIFORNIA REVENUE AND TAXATION CODE: NOTE: ALTHOUGH THE ABOVE SUPPLEMENTAL TAXES MAY BE A LIEN, THE INSTALLMENTS THEREOF ARE NOT YET DUE OR PAYABLE. 4. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED MARCH 22, 1974 IN BOOK 11100,PAGE 1998 OF OFFICIAL RECORDS, FOR: AN EASEMENT FOR STREET,PUBLIC UTILITY AN-D FNICIDENTAL PURPOSES. OVER: THE EAST 2.50 FEET OF LOTS 38 AND 39.OF BLOCK 403 OF HUNTINGTON_ BEACH MAIN STREET SECTION AS SHOWN ON A MAP RECORDED IN BOOK 3,PAGE 43,MISCELLANEOUS MAPS,RECORDS OF SAID COUNTY: 5. AN EASEMENT AS SET FORTH IN AN INSTRUMENT RECORDED J LY 17, 1974 IN BOOK 11197,PAGE 1956 OF OFFICIAL RECORDS, FOR: AN EASEMENT FOR STREET,PUBLIC UTILITY AN-D INCIDENTAL PURPOSES. OVER: THE EAST 2.50 FEET OF LOTS 38 AND 39 OF BLOCK 403 OF HUNTINGTON BEACH MAIN STREET SECTION AS SHOWN ON A MAP RECORDED IN BOOK 3,PAGE 43, MISCELLANEOUS MAPS,RECORDS OF SAID COUNTY. 6. RIGHTS OF PARTIES IN POSSESSION OF THE LAND BY REASON OF UNRECORDED LEASES, IF ANY. DM PLATS(CC&R'S,IF ANY)ENCLOSED. PAGE Alta Plain OR-2303434 Language Commitment LE OFFICER-DAVID M.NEAL NOTE 1: ACCORDING TO THE PUBLIC RECORDS, THERE HAVE BEEN NO DEEDS CONVEYING THE PROPERTY IN THIS COMMITMENT«WITHIN A PERIOD OF SIX MONTHS PRIOR TO THE DATE OF THIS REPORT,EXCEPT AS FOLLOWS: NONE. NOTE 2: PREMIUM CHARGED FOR TITLE POLICY WILL BE BASE RATE. NOTE 3: THERE IS LOCATED ON THE LAND COMMERCIAL IMPROVEMENTS KNTOWN AS 438 MAIN STREET,HUNTINGTON BEACH,CALIFORNIA. NOTE 4 WIRING INSTRUCTIONS FOR SUB-ESCROW DEPOSITS ARE AS FOLLOWS: FIRST AMERICAN TRUST COMPANY ACCOUNT#15040 ABA#122241255 114 E.FIFTH STREET ACCOUNT NAME: FIRST AMERICAN SANTA ANA,CA 92701 TITLE COMPANY CREDIT TO FIRST AMERICAN TITLE COMPANY OR-2303434 TITLE OFFICER-DAVID M.NEAL DISREGARD IF FIRST AMERICAN IS YOUR ESCROW SETTLEMENT AGENT-- CONTACT ESCROW OFFICER FOR WIRING INSTRUCTIONS PAGE Alta Plain OR-2303434 Language Commitment E OFFICER-DAVID M.NEAL PRIVACY POLICY WE ARE COMMITTED TO SAFEGUARDING CUSTOMER INFORMATION IN ORDER TO BETTER SERVE YOUR NEEDS NOW AND IN THE FUTURE,WE MAY ASK YOU TO PROVIDE US WITH CERTAIN INFORMATION. WE UNDERSTAND THAT YOU MAY BE CONCERNED ABOUT WHAT WE WILL DO WITH SUCH INFORMATION-PARTICULARLY ANY PERSONAL OR FINANCIAL INFORMATION. WE AGREE THAT YOU HAVE A RIGHT TO KNOW HOW WE WILL UTILIZE THE PERSONAL INFORMATION YOU PROVIDE TO US. THEREFORE,TOGETHER WITH OUR PARENT COMPANY, THE FIRST AMERICAN CORPORATION, WE HAVE ADOPTED THIS PRIVACY POLICY TO GOVERN THE USE AND HANDLING OF YOUR PERSONAL NFORMATION. APPLICABILITY THIS PRIVACY POLICY GOVERNS OUR USE TO THE INFORMATION WHICH YOU PROVIDE TO US. IT DOES NOT GOVERN THE MANNER IN WHICH WE MAY USE INFORMATION WE HAVE OBTAINED FROM ANY OTHER SOURCE,SUCH AS INFORMATION OBTAINED FROM A PUBLIC RECORD OR FROM ANOTHER PERSON OR ENTITY. FIRST AMERICAN HAS ALSO ADOPTED BROADER GUIDELINES THAT GOVERN OUR USE OF PERSONAL INFORMATION REGARDLESS OF ITS SOURCE. FIRST AMERICAN CALLS THESE GUIDELINES ITS FAIR INFORMATION VALUES, A COPY OF WHICH CAN BE FOUND ON OUR WEBSITE AT WWW.FIRSTAM.COM. TYPES OF INFORMATION DEPENDING UPON WHICH OF OUR SERVICES YOU ARE UTILIZING,THE TYPES OF NONPUBLIC PERSONAL INFORMATION THAT WE MAY COLLECT INCLUDE: INFORMATION WE RECEIVED FROM YOU ON APPLICATIONS,FORMS AND IN OTHER COMMUNICATIONS TO US, WHETHER IN WRITING,IN PERSON,BY TELEPHONE OR ANY OTHER MEANS; ■ INFORMATION ABOUT YOUR TRANSACTIONS WITH US,OUR AFFILIATED COMPANIES,OR OTHERS;AND ■ INFORMATION WE RECEIVE FROM A CONSUMER REPORTING AGENCY. USE OF INFORMATION WE REQUEST INFORMATION FROM YOU FOR OUR OWN LEGITIMATE BUSINESS PURPOSES AND NOT FOR THE BENEFIT OF ANY NONAFFILIATED PARTY. THEREFORE, WE WILL NOT RELEASE YOUR INFORMATION TO NONAFFILIATED PARTIES EXCEPT: (1) AS NECESSARY FOR US TO PROVIDE THE PRODUCT OR SERVICE YOU HAVE REQUESTED OF US; OR (2) AS PERMITTED BY LAW. WE MAY, HOWEVER, STORE SUCH INFORMATION INDEFINITELY, INCLUDING THE PERIOD AFTER WHICH ANY CUSTOMER RELATIONSHIP HAS CEASED. SUCH INFORMATION MAY BE USED FOR ANY INTERNAL PURPOSE, SUCH AS QUALITY CONTROL EFFORTS OR CUSTOMER ANALYSIS. WE MAY ALSO PROVIDE ALL OF THE TYPES OF NONPUBLIC PERSONAL INFORMATION LISTED ABOVE TO ONE OR MORE OF OUR AFFILIATED COMPANIES. SUCH AFFILIATED COMPANIES INCLUDE FINANCIAL SERVICE PROVIDERS, SUCH AS TITLE INSURERS, PROPERTY AND CASUALTY INSURERS,AND TRUST AND INVESTMENT ADVISORY COMPANIES,OR COMPANIES INVOLVED IN REAL ESTATE SERVICES,SUCH AS APPRAISAL COMPANIES,HOME WARRANTY COMPANIES,AND ESCROW COMPANIES. FURTHERMORE, WE MAY ALSO PROVIDE ALL THE INFORMATION WE COLLECT,AS DESCRIBED ABOVE,TO COMPANIES THAT PERFORM MARKETING SERVICES ON OUR BEHALF, ON BEHALF OF OUR AFFILIATED COMPANIES, OR TO OTHER FINANCIAL INSTITUTIONS WITH WHOM WE OR OUR AFFILIATED COMPANIES HAVE JOINT MARKETING AGREEMENTS. FORMER CUSTOMERS EVEN IF YOU ARE NO LONGER OUR CUSTOMER,OUR PRIVACY POLICY WILL CONTINUE TO APPLY TO YOU. CONFIDENTIALITY AND SECURITY WE WILL USE OUR BEST EFFORTS TO ENSURE THAT NO UNAUTHORIZED PARTIES HAVE ACCESS TO ANY OF YOUR INFORMATION. WE RESTRICT ACCESS TO NONPUBLIC PERSONAL INFORMATION ABOUT YOU TO THOSE INDIVIDUALS AND ENTITIES WHO NEED TO KNOW THAT INFORMATION TO PROVIDE PRODUCTS OR SERVICES TO YOU. WE WILL USE OUR BEST EFFORTS TO TRAIN AND OVERSEE OUR EMPLOYEES AND AGENTS TO ENSURE THAT YOUR INFORMATION_WILL _ BE HANDLED RESPONSIBLY AND IN ACCORDANCE WITH THIS PRIVACY. POLICY AND FIRST.AMERICAN'S FAIR INFORMATION VALUES, WE CURRENTLY MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS THAT COMPLY WITH FEDERAL REGULATIONS TO GUARD YOUR NONPUBLIC PERSONAL INFORMATION. PAGE9 Alla Plain OR-2303434 Language Cor-nitment .'LE OFFICER-DAVID M.NEAL NOTICE SECTION 12,13.1 OF THE CALIFORNIA INSURANCE CODE.EFFECTIVE JANUARY 1,1990,REQUIRES THAT ANY TITLE INSURANCE CO%;PANY. UNDERWRITTEN TITLE COMPANY,OR CPNTROLLED ESCROW COMPANY HANDLING FUNDS IN AN ESCROW OR SUB-ESCROWW CAPACITY, WAIT A SPECIFIED NUMBER OF DAYS AFTER DEPOSITING FUNDS, BEFORE RECORDING ANY DOCnIENTS IN CONNECTION WITH THE TRANSACTION OR DISBURSING FUNDS. THIS STATUTE ALLOWS FOR FUNDS DEPOSITED BY WIRE TRANSFER TO BE DISBURSED THE SAME DAY AS DEPOSIT. IN THE CASE OF CASHIER'S CHECKS OR CERTIFIED CHECKS, FUNDS MAY BE DISBURSED THE NEXT DAY AFTER DEPOSIT. IN ORDER TO AVOID UNNECESSARY DELAYS OF THREE TO SEVEN DAYS,OR MORE, PLEASE USE WIRE TRANSFER. CASHIER'S CHECKS, OR CERTIFIED CHECKS WHENEVER POSSIBLE. IF 1'OU HAVE ANY QUESTIONS ABOUT THE EFFECT OF THIS NEW LAW, PLEASE CONTACT YOUR LOCAL FIRST AMERICAN OFFICE FOR MORE DETAILS. NOTICE IN ACCORDANCE WITH SECTIONS 18662 AND 18668 OF THE REVENUE AND TAXATION CODE,A BUYER MAY BE REQUIRED TO WITHHOLD AN AMOUNT EQUAL TO THREE AND ONE-THIRD PERCENT OF THE SALES PRICE IN THE CASE OF THE DISPOSITION OF CALIFORNIA REAL PROPERTY INTEREST BY EITHER: 1. A SELLER WHO IS AN INDIVIDUAL WITH A LAST KNOWN STREET ADDRESS OUTSIDE OF CALIFORNIA OR WHEN THE DISBURSEMENT INSTRUCTIONS AUTHORIZE THE PROCEEDS BE SENT TO A FINANCIAL INTERMEDIARY OF THE SELLER,OR 2. A CORPORATE SELLER WHICH HAS NO PERMANENT PLACE OF BUSINESS IN CALIFORNIA. THE BUYER MAY BECOME SUBJECT TO PENALTY FOR FAILURE TO WITHHOLD AN AMOUNT EQUAL TO THE GREATER OF 10 PERCENT OF THE AMOUNT REQUIRED TO BE WITHHELD OR FIVE HUNDRED DOLLARS(S500). HOWEVER, NOTWITHSTANDING ANY OTHER PROVISION INCLUDED IN THE CALIFORNIA STATUTES REFERENCED ABOVE,NO BUYER WILL BE REQUIRED TO WITHHOLD ANY AMOUNT OR BE SUBJECT TO PENALTY FOR FAILURE TO WITHHOLD IF: 1. THE SALES PRICE OF THE CALIFORNIA REAL PROPERTY CONVEYED DOES NOT EXCEED ONE HUNDRED THOUSAND DOLLARS($100,000),OR 2. THE SELLER EXECUTES A WRITTEN CERTIFICATE,UNDER THE PENALTY OF PERJURY,CERTIFYING THAT THE SELLER IS A RESIDENT OF CALIFORNIA, OR IF A CORPORATION, H.AS A PERMANENT PLACE OF BUSINESS IN CALIFORNIA,OR 3. THE SELLER,WHO IS AN INDIVIDUAL,EXECUTES A WRITTEN CERTIFICATE,UNDER THE PENALTY OF PERJURY, THAT THE CALIFORNIA REAL PROPERTY BEING CONVEYED IS THE SELLER'S PRINCIPAL RESIDENCE(AS DEFINED IN SECTION 1034 OF THE INTERNAL REVENUE CODE). THE SELLER IS SUBJECT TO PENALTY FOR KNOWINGLY FILING A FRAUDULENT CERTIFICATE FOR THE PURPOSE OF AVOIDING THE WITHHOLDING REQUIREMENT. THE CALIFORNIA STATUTES REFERENCED ABOVE INCLUDE PROVISIONS WHICH AUTHORIZE THE FRANCHISE TAX BOARD TO GRANT REDUCED WITHHOLDING AND WAIVERS FROM WITHHOLDING ON A CASE-BY-CASE BASIS. THE PARTIES TO THIS TRANSACTION SHOULD SEEK AN ATTORNEYS, ACCOUNTANT'S, OR OTHER TAX SPECIALIST'S OPINION CONCERNING THE EFFECT OF THIS LAW ON THIS TRANSACTION AND SHOULD NOT ACT ON A:NY STATEMENTS MADE OR OMITTED BY THE ESCROW OR CLOSING OFFICER. PAGE 10 09 la' J�� 024— 3 y ACACIA AVEAK.E 3 - t � ms• me' n. lx xr 2B a7T s—=---- ---®=. 17 19 24 2.7 ti • 21 s,27 ro• ^20 A NY 1- _ !01)' zt BLK.1a^,17506 4 J r� 27 � O tir 6 \ BLK. 505,,., 12 24 B 7 23 2 \� s c^ < J� o. --n- 24 -6 '5 ro 22 < sd�o r M'- 71 26 -5. r xx25 I7 J9 79 2827 TRACT . tea' Oi PECAN AVENUE Y� °d PROJECT 937-f9-154-226 i, ' " 17 / '- cols ,s ? •.../o� � �'36 16 15 30 / J 2 "z, 2� J 133 NO. 14122 ,: . 134 sr 17 „ w 31 20 f9 a"TRACT BLK. 406 32 . .LOT ' / / �r 'i' SO��'S'O.,.9 -- 28 �. a 27 wLOT a.,u• ro,:e 0 ,i:" BLK. 403 22 1, 29 1 ,J �`37J} ,7 t6 ,5 :tam ip3E o 32,° 38 6 21 .ls r` .la "are,.. ae• .s.a g J9 ^ s 60 ti 30 rz Q 11 m• U mow. :. use;, -? ..o•34 +.' 76 X 404 _ ^za ,.. — y 'y 14 15 rma •17 - > - >•' l S wss -wn• .lo l07 c s .--- m..• wm wls el Tr nxr 351 u.r t8 .o W -_a 7 _- ti ..�78 9 10'r tl 11-' 7.n•o ! ror f6 �- --- -- ^j6 �� t�I "A, on s•b d 36 w w• r5>•J_—12-- R-$ W n " ,9 20 21 22 23 2a 25 x 7+ v, J n -{;}.._ •� Te � us•• a -rlr x.. `2--- BEACH �T4 NO 900` i-_---- zJ T ORANGE ^ ` AVENUE 14 q r HUNTINGTON BEACH. tm/R sr. sEE.7 M.M. 3-43 NOTE - ASSESSOR'S 8L OCK 8 ASSESSOR'S MAP MARCH 1948 TRACT NO. 12900 M.M. 6?1-4? TO 41 INC. PARCEL NUM8ERS BOOK 024 PAGE 13 TRACT NO. 14122 M.M. 656-11.12 SHOWN IN CIRCLES COUNTY OF ORANGE First American Title Insurance Company THIS MAP IS FOR INFORMATION ONLY AND IS NOT A PART OF THIS TITLE EVIDENCE EXHIBIT A LIST OF PRI' EXCEPTIONS AND EXCLUSIONS(By Pc Type) 1. CALIFORNIA LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY-1990 SCHEDULE B EXCEPTIONS FROM COVERAGE This policy foes not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses)which arise by reason of: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. Proceedings by a public agency which may result in taxes or assessments,or notice of such proceedings, whether or not shown by the records of such agency or by the public records. 2. Any facts,rights,interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or which may be asserted by persons in possession thereof. 3. Easements,liens or encumbrances,or claims thereof,which are not shown by the public records. 4. Discrepancies,conflicts in boundary lines,shortage in area,encroachments,or any other facts which a correct survey would disclose,and which are not shown by the public records. 5. (a)Unpatented mining claims;(b)reservations or exceptions in patents or in Acts authorizing the issuance thereof;(c)water rights,claims or title to water,whether or not the matters excepted under(a),(b),or(c)are shown by the public records. EXCLUSIONS FROM COVERAGE The following:matters are expressly excluded from the coverage of this.policy and the Company will not pay loss or damage,costs,attorneys'fees or expenses which arise by reason of: 1. (a) Any law,ordinance or governmental regulation(including but not limited to building and zoning laws;ordinances,or regulations]restricting,regulating,prohibiting or relating to(i)the occupancy,use,or enjoyment of the land;(ii)the character,dimensions or location of any improvement now or hereafter erected on the land,(iii)a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part,or(iv)environmental protection,or the effect of any violation of these laws,ordinances or governmental regulations,except to the extent that-a notice of the enforcement thereof or a notice of a defect,lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any govemmental police power not excluded by(a)above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy,but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects,liens,encumbrances,adverse claims,or other matters: (a) whether or not recorded in the public records at Date of Policy,but created,suffered,assumed or agreed to by the insured claimant; (b) not known to the Company,not recorded in the public records at Date of Policy,but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy;or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage or for the estate or interest insured by this policy. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with the applicable'doing business'laws of the state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage,or claim thereof,which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6.. Any claim,which arises out of the transaction vesting in the insured the estate or interest insured.by their policy or the transaction creating the interest of the insured lender,by reason of the operation of federal bankruptcy,state insolvency or similar creditors'rights laws. 2. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY FORM B-1970 SCHEDULE OF EXCLUSIONS FROM COVERAGE 1. Any law,ordinance or govemmental regulation(including but not limited to building and zoning ordinances)restricting or regulating or prohibiting the occupancy,use or enjoyment of the land,or regulating the character,dimensions or location of any improvement now or hereafter erected on the land, or prohibiting a separation in ownership or a:eduction in the dimensions of area of the land,or the effect of any violation of any such law,ordinance or governmental regulation. 2. Rights of eminent domain or governmental rights of police power unless notice of the exercise of such rights appears in the public records at Date of Policy. 3. Defects,liens,encumbrances,adverse claims,or other matters(a)created, suffered,assumed or agreed to by the insured claimant; (b)not known to the Company and not shown by the public records but known to the insured claimant either at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy and not disclosed in writing by the insured claimant to the Company prior to the date such insured claimant became an insured hereunder,(c)resulting in no loss or damage to the insured claimant;(d)attaching or created subsequent to Date of Policy;or(e)resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 3. AMERICAN LAND TITLE ASSOCIATION OWNERS POLICY FORM B-1970 WITH REGIONAL EXCEPTIONS When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 2 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage by reason of the matters shown in parts one and two following: Part One: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. 2. Any facts,rights,interests,or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements,claims of easement or encumbrances which are not shown by the public records. 4. Discrepancies,conflicts in boundary lines,shortage in area;encroachments,or any other fats which a correct surveywould disclose,and which are not shown by. public records. 5. Unpatented mining claims,reservations or exceptions in patents or in Acts authorizing the issuance thereof;water rights,claims or title to water.- 6. Any lien,or right to a lien,for services,labor or material heretofore or hereafter furnished,imposed by law and not shown by the public records. 4. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY- 1970 WITI T.A. ENDORSEMENT FORM 1 COVERAGE SC. .ULE OF EXCLUSIONS FROM COVERAGE 1. Any law,ordinance or governmental regulation(including but not limited to balding and zoning ordinances)restricting or regulating or prohibiting the occupancy,use or enjoyment of the land,or regulating the character,dimensions or locatior of any improvement now or hereafter erected on the land,or prohibiting a separation in ownership or a reduction in the dimensions or area of the land,or the effev:;f any violation of any such law ordinance or governmental regulation. 2. Rights of eminent domain or governmental rights of police power unless nc:::e of the exercise of such rights appears in the public records at Date of Policy. 3. Defects,liens,encumbrances,adverse claims,or other matters(a)create=.suffered,assumed or agreed to by the insured claimant; (b)not known to the Company and not shown by the public records but known to the insured claimant ea'-,er at Date of Policy or at the date such claimant acquired an estate or interest insured by this policy or acquired the insured mortgage and not disclosed in writing t,the insured claimant to the Company prior to the date such insured claimant became an insured hereunder;(c)resulting in no loss or damage to the insured claimant:(d)attaching or created subsequent to Date of Policy(except to the extent insurance is afforded herein as to any statutory lien for labor or material or to the extent nsurance is afforded herein as to assessments for street improvements under construction or completed at Date of Policy). 4. Unenforceability of the lien of the insured mortgage because of failure of t:insured at Date of Policy or of any subsequent owner of the indebtedness to comply with applicable'doing business'laws of the state in which the land is situated. 5. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY-1970 WITH REGIONAL EXCEPTIONS When the American Land Title Association Lenders Policy is used as a Standar'Coverage Policy and not as an Extended Coverage Policy, the exclusions set forth in paragraph 4 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage by reason of the matters shown.in parts one and two following: Part One- 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. 2. Any facts,rights,interests,or claims which are not shown by the public re=rds but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements,claims of easement or encumbrances which are not shown by�e public records. 4. Discrepancies,conflicts in boundary lines, shortage in area,encroachmers.or any other facts which a correct survey would disclose,and which are not shown by public records. 5. Unpatented mining claims;reservations or exceptions in patents or in Acts eithorizing the issuance thereof;water rights,claims or title to water. 6. Any lien,or right to a lien,for services,labor or material theretofore or hereafter furnished,imposed by law and not shown by the public records. 6. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY-1992 WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and t-e Company will not pay loss or damage,costs,attorneys'fees or expenses which arise by reason of: 1. (a) Any law,ordinance or governmental regulation(including but not limited t-building and zoning laws,ordinances,or regulations)restricting,regulating,prohibiting or relating to(i)the occupancy,use,or enjoyment of the land,(ii)the chara,—=r,dimensions or location of any improvement now or hereafter erected on the land,(iii)a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part;or(iv)environmental protection,or the effect of any violation of these laws,ordinances or governmental regulations,except to the extent that a notice of the enforcement thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the Ian_has been recorded in the public records at Date of Policy. (b) Any govemmental police power not excluded by(a)above,except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been rewrded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date of Policy,but not excluding from coverage any taking which has occurred prior to the Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects,liens,encumbrances,adverse claims,or other matters: (a) created,suffered,assumed or agreed to by the insured claimant; (b) not known to the Company,not recorded in the public records at Date of Po icy,but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy(except to the extent tha:this policy insures the priority of the lien of the insured mortgage over any statutory lien for services,labor or material or the extent insurance is afforded herein as to assessments for street improvements under construction or completed at date of policy);or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the insured mortgage. 4. Unenforceability of the lien of the insured mortgage because of the inability or failure of the insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with the applicable'doing business'laws of ne state in which the land is situated. 5. Invalidity or unenforceability of the lien of the insured mortgage,or claim txreof,which arises out of the transaction evidenced by the insured mortgage and is based upon usury or any consumer credit protection or truth in lending law. 6. Any statutory lien for services,labor or materials(or the claim of priority of any statutory lien for services,labor or materials over the lien of the insured mortgage) arising from an improvement or work related to the land which is contractet for and commenced subsequent to Date of Policy and is not financed in whole or in part by proceeds of the indebtedness secured by the insured mortgage which at Date of Policy the insured has advanced or is obligated to advance. 7. Any claim,which arises out of the transaction creating the interest of the mortgagee insured by this policy, by reason of the operation of federal bankruptcy, state insolvency,or similar creditors'rights laws,that is based on: (i) the transaction creating the interest of the insured mortgagee being deeme=a fraudulent conveyance or fraudulent transfer,or (ii) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination;or (iii) the transaction creating the interest of the insured mortgagee being deeme-4 a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer;or (b) of such recordation to impart notice to a purchaser for value or a judg,nent or lien creditor. 7. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY-1992 WITH REGIONAL EXCEPTIONS When the American Land Title Association policy is used as a Standard Covera Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 6 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage(and mpany will not pay costs,attorneys'fees or expenses)w ise by reason of: 1. Taxes or assessments which are not shown as e—..,g liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. 2- Any facts,rights,interests,or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements,claims of easement or encumbrances which are not shown by the public records. 4. Discrepancies,conflicts in boundary lines,shortage in area,encroachments,or any other facts which a correct survey would disclose,and which are not shown by public records. 5. Unpatented mining claims;reservations or exceptions in patents or in Acts authorizing the issuance thereof;water rights,claims or title to water. 6- Any lien,or right to a lien,for services.labor or material theretofore or hereafter furnished,imposed by law and not shown by the public records. 8. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY-1992 EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage,costs,attorneys'fees or expenses which arise by reason of: 1. (a) Any law,ordinance or governmental regulation(including but not limited to building and zoning laws,ordinances,or regulations)restricting, regulating,prohibiting or relating to(i)the occupancy,use,or enjoyment of the land;(ii)the character,dimensions or location of any improvement now or hereafter erected on the land,(iii)a separation in ownership or a change in the dimensions or area of the land or any parcel of which the land is or was a part;or(iv)environmental protects:n,or the effect of any violation of these laws, ordinances or governmental regulations,except to the extent that a notice of the enforcement thereof or a notice of a defect. lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. (b) Any governmental police power not excluded by(a)above, except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a-violation or alleged violation affecting the land has been recorded in the public records at Date of Policy. 2. Rights of eminent domain unless notice of the exercise thereof hasbeen recorded in the public records at Date of Policy,but not excluding from coverage any taking which has occurred prior to the Date of Policy which would be binding on the rights of a purchaser for value without knowledge. 3. Defects,liens,encumbrances,adverse claims,or other matters: (a) created,suffered,assumed or agreed to by the insured claimant; (b) not known to the Company,not recorded in the public records at Date of Policy;but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy; (c) resulting in no loss or damage to the insured claimant; (d) attaching or created subsequent to Date of Policy,or (e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for the estate or interest insured by this policy. 4. Any claim,which arises out of the transaction vesting in the insured the estate or interest insured by this policy,by reason of the operation of federal bankruptcy,state insolvency,or similar creditors'rights laws,that is based on: (i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance or fraudulent transfer;or (ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer except where the preferential transfer results from the failure: (a) to timely record the instrument of transfer;or (b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor. 9. AMERICAN LAND TITLE ASSOCIATION OWNER'S POLICY-1992 WITH REGIONAL EXCEPTIONS When the American Land Title Association policy is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 8 above are used and the following exceptions to coverage appear in the policy. SCHEDULE B This policy does not insure against loss or damage(and the Company will not pay costs,attorneys`fees or expenses)which arise.by reason of: Part One: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property w by the public records. 2. Any facts,rights,interests,or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements,claims of easement or encumbrances which are not shown by the public records. 4. Discrepancies,conflicts in boundary lines,shortage in area,encroachments,or any other facts which a correct survey would disclose, and which are not shown by public records. 5. Unpatented mining claims;reservations or exceptions in patents or in Acts authorizing the issuance thereof;water rights,claims or title to water. 6. Any lien,or right to a lien,for services,labor or material theretofore or hereafter furnished,imposed by law and not shown by the public records. 10. AMERICAN LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY-1987 EXCLUSIONS In addition to the Exceptions in Schedule B,you are not insured against loss,costs,attorneys'fees and expenses resulting from: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning ordinances and also laws and regulations concerning: • land use land division • improvements on the land • environmental protection This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date. This exclusion does not limit the zoning coverage described in Items 12 and 13 of Covered Title Risks. 2. The right to take the land by condemning it,unless: • a notice of exercising the right appears in the public records on the Policy Date • the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking. 3. Title Risks: • that are created,allowed,or agreed to by you • that are known to you,but not to us.on the Policy Date-unless they appeared in the public records • that result in no loss to you • that first affect your title after the Policy Date-this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 4. Failure to pay value for your title. 5. Lack of a right: • to any land outside the area specifically described and referred to in Item 3 of Schedule A,or • in streets,alleys,or waterways that touch your land This exclusion does not limit the access coverage in Item 5 of Covered Title Risks. Form No.1491.EAGLE(10198) Addendum to Exhibit A ADDENDUM TO EXHIBIT A LIST OF PRINTED EXCEPTIONS AND EXCLUSIONS (By Policy Type) 11. EAGLE PROTECTION OWNER'S POLICY CLTA HOMEOWNER'S POLICY OF TITLE INSURANCE—1998 ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE—1998 Covered Risks 14(Subdivision Law Violation),15(Building Permit),16(Zoning)and 18(Encroachment of boundary walls or fences)are Subject to Deductible Amounts and Maximum Dollar Limits of Liability EXCLUSIONS In addition to the Exceptions in Schedule B,you are not insured agair:s:loss,costs,attorneys'fees,and expenses resulting from: 1. Governmental police power,and the existence or violation of any la::or government regulation. This includes ordinances,laws and regulations concerning: a. building b. zoning, c. land use d. improvements on the land e. land division f. .environmental protection This Exclusion does not apply to violations or the enforcement of'ese matters if notice of the violation or enforcement appears in the Public Records at the Policy Date. This Exclusion does not limit the coverage described in Covered Risk 14,15.16.17 or 24. 2. The failure of Your existing structures,or any part of them,to be constructed in accordance with applicable building codes. This Exclusion does not apply to violations of building codes if notice of the violation appears in the Public Records at the Policy Date. 3. The right to take the Land by condemning it,unless: a. a notice of exercising the right appears in the Public Records a:the Policy Date;or b. the taking happened before the Policy Date and is binding on You if You bought the Land without Knowing of the taking. 4. Risks: a. that are created,allowed,or agreed to by You,whether or no::ney appear in the Public Records; b. that are Known to You at the Policy Date,but not to Us,unless they appear in the Public Records at the Policy Date; c. that result in no loss to You;or d. that first occur after the Policy Date—this does not limit the coverage described in Covered Risk 7,8.d,22.23,24 or 25. 5. Failure to pay value for Your Title. 6. Lack of a right: a. -to any Land outside the area specifically described and referre'to in paragraph 3 of Schedule A;and b. in streets,alleys,or waterways that touch the Land This Exclusion does not limit the coverage described in Covered Risk 11 or 18. 12. AMERICAN LAND TITLE ASSOCIATION LOAN POLICY-1992 WITH A.L.T.A. ENDORSEMENT FORM 1 COVERAGE WITH EAGLE PROTECTION ADDED EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage,costs,attorneys'fees or expenses which arise by reason of: 1. (a) Any,law,ordinance or governmental regulation(including but not limited to building and zoning laws,ordinances,or regulations)restricting,regulating,prohibiting or relating to(i)the occupancy,use,or enjoyment of the Land;(ii)the character,dimensions or location of any improvement now or hereafter erected on the Land;(iii)a separation in ownership or a change in the dimensions or area of the Land or any parcel of which the Land is or was a part;or(iv)environmental protection,or the effect of any violation of these laws,ordinances or governmental regulations,except to the extent that a notice of the enforcement thereof or a notice of a defect,lien or encumbrance resulting from a violation or alleged violation affecting the Land has been recorded in Public Records at Date of Policy. This exclusion does not limit the coverage provided under insuring provisions 14,15,16 and 24 of this policy. (b) Any governmental police power not excluded by(a)above,except to the extent that a notice of the exercise thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting the land has been recorded in the Public Records at Date of Policy. This exclusion does not limit the coverage provided under insuring provisions 14,15,16 and 24 of this policy. 2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the Public Records at Date of Policy, but not excluding from coverage any taking which has occurred prior to Date of Policy which would be binding on the rights of a purchaser for value without Knowledge. 3. Defects,liens,encumbrances,adverse claims or other matters: (a) created,suffered,assumed or agreed to by the Insured Claimant (b) not Known to the Company,not recorded in the Public Records at Date of Policy;but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy(this paragraph(d)does not limit the coverage provided under insuring provisions 7,8,16, 17,19.20,21,23.24 and 25);or (e) resulting in loss or damage which would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of the Insured at Date of Policy,or the inability or failure of any subsequent owner of the indebtedness,to comply with applicable doing business laws of the state in which the Land is situated. 5. Invalidity or unenforceability of the lien of the Insured Mortgage.o7 claim thereof,which arises out of the transaction evidenced by the Insured Mortgage and is based upon: (a) usury,except as provided under insuring provision 10 of this po';:y,or (b) any consumer credit protection or truth in lending law 6. Taxes or assessments of any taxing or assessmen rity which become a lien on the Land subsequent to Date cy. 7. Any claim,which arises out of the transaction creating the interest of the mortgage insured by this policy. by reason of the operation of federal bankruptcy, stare insolvency,or similar creditors'rights laws,that is based on: (a) the transaction creating the interest of the insured mortgagee being deemed a fraudulent conveyance or fraudulent transfer,or (b) the subordination of the interest of the insured mortgagee as a result of the application of the doctrine of equitable subordination,or (c) the transaction creating the interest of the insured mortgagee being deemed a preferential transfer except where the preferential transfer results from the failure: (i) to timely record the instrument of transfer;or (ii) of such recordation of impart notice to a purchaser for value or a judgment or lien creditor. B. Any claim of invalidity,unenforceability or lack of priority of the lien of the Insured Mortgage as to advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy.This exclusion does not limit the coverage provided under insuring provision 7. 9. Lack of priority of the lien of the Insured Mortgage as to each and every advance made after Date of Policy.and all interest charged thereon,over liens,encumbrances and other matters affecting title,the existence of which are Known to the Insured at: (a) The time of the advance;or (b) The time a modification is made to the terms of the Insured Mortgage which changes the rate of interest charged,if the rase of interest is greater as a result of the modification than it would have been before the modification. This exclusion does not limit the coverage provided under insuring provision 7. SCHEDULE B This policy does not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses)which arise by reason of: 1. Environmental protection liens provided for by the following existing statutes,which liens will have priority over the lien of the Insured Mortgage when they arise:NONE. 13.AMERICAN LAND TITLE ASSOCIATION LOAN POLICY—1992 WITH EAGLE PROTECTION ADDED WITH REGIONAL EXCEPTIONS When the American Land Title Association loan policy with EAGLE Protection Added is used as a Standard Coverage Policy and not as an Extended Coverage Policy the exclusions set forth in paragraph 12 above are used and the following exceptions to coverage appear in the policy: SCHEDULE B This policy does not insure against loss or damage(and the Company will not pay costs,attorneys'fees or expenses)which arise by reason of: Part One: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies.taxes or assessments on real property or by the public records. 2. Any facts,rights,interests,or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of. persons:in possession thereof. 3. Easements,claims of easement or encumbrances which are not shown by the public records. 4: Discrepancies,conflicts in boundary lines,shortage in area,encroachments,or any other facts which a correct survey would disclose,and which are not shown by public records. 5. Unpatented mining claims;reservations or exceptions in patents or in acts authorizing the issuance thereof;water rights,claims or title to water. 6. Any lien,or right to a lien,for services,labor or material theretofore or hereafter furnished,imposed by law and not shown by the public records. Part Two: 1. Environmental protection liens provided for by the following existing statutes,which liens will have priority over the lien of the Insured Mortgage when they arise:NONE. i z �• x First American Title Insurance Company National Commercial Services Division 1 First American Way, , Santa Ana, CA 92707 Maricel 8orras Direct Phone Number:(714)800-4732 Escrow Officer FAX:(714)800-3815 mborras@firstam.com City of Huntington Beach Redevelopment Agency April 18, 2003 Attention: Connie Brockway, Agency Clerk 2000 Main Street File No: NCS-24071-SA1 ( mb) Huntington Beach, CA 92648 V Re: 438 Main Street, Huntington Beach, CA Ms. Brockway: Regarding the sale of your property referenced above, First American Title Insurance Company National Commercial Services Division will be handling your transaction. PLEASE SIGN AND RETURN, retain the copy for your records: • Supplemental Escrow Instructions dated April 18, 2003 • Commission Instructions 1 COMPLETE IN FULL, SIGN AND RETURN the enclosed items: • FIRPTA Affidavit • Certification for Information Reporting on the Sale of Property (IRS 1099 Reporting Form) • Loan Information Request Form • Rent Statement ENCLOSED please find the following for your records: • Privacy Policy Notice EFFECTIVE 3ANUARY 1, 2003,THE CALIFORNIA REAL ESTATE WITHHOLDING LAWS APPLICABLE TO REAL ESTATE TRANSACTIONS HAVE BEEN MATERIALLY AMENDED. PLEASE CAREFULLY REVIEW SECTION 18.B OF THE ESCROW GENERAL PROVISIONS REGARDING EACH PARTTS OBLIGATIONS UNDER THE NEW WITHHOLDING LAW. INFORMATION REGARDING THE WITHHOLDING LAW MAY BE OBTAINED BY CONTACTING THE FRANCHISE TAX BOARD AT(800)852-5711 OR VISITING THEIR WEBSITE AT WWW.FTB.CA.GOV. SPECIFIC QUESTIONS REGARDING THE APPLICABILITY OF THE WITHHOLDING LAW TO THIS TRANSACTION SHOULD BE DIRECTED TO YOUR LEGAL COUNSEL, TAX ADVISOR OR THE FRANCHISE TAX BOARD. Page 1 of 2 dc/04/18/2003 i a - First American Title Insurance Company National Commercial File No.: NCS-24071-SAl (mb) Services Division Date: April 18, 2003 Should you have any questions or need further assistance, please contact the undersigned. We appreciate the opportunity to serve you. Sincerely, First Am ' an Tit Insur ce Company aricel rras Escrow Officer mb:dc encl/delivery cc: Curt Stalder, Lee&Associates (via delivery) Page 2 of 2 First American Title Insurance Company National Commercial Services Division 1 First American Way, Santa Ana, CA 92707 (714) 800-3000 - Fax SUPPLEMENTAL ESCROW INSTRUCTIONS ESCROW NO.: NCS-24071-MB DATE: April 18, 2003 First American Title Insurance Company is hereby handed by the undersigned parties, that certain "original" document entitled STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (hereinafter "Agreement") dated March 24, 2003 executed by and between City of Huntington Beach Redevelopment Agency, ("seller") and LGB Investments, ("buyer"). First American Title Insurance Company is hereby requested to accept the " STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE" as its escrow instructions and to act as escrow agent for the parties in accordance with the terms and conditions contained in said document. Each of the parties to this escrow specifically acknowledges that the consummation of this escrow is contingent upon compliance with some or all of the executory terms and provisions of this "Agreement", and that the parties to this "Agreement" are and shall be the sole persons entitled to and authorized to determine whether all of said executory terms and.provisions due to be performed prior to the close of escrow have been met or complied with prior to such close. Accordingly, the parties hereby agree that prior to the scheduled close of escrow they shall each deposit with Escrow Holder a written instruction or acknowledgement specifying that all the executory terms and provisions of this "Agreement", insofar as the same pertain to each said party respectively and any obligation of escrow holder relative thereto, have been fully met or complied with, or are waived. Further, each said party shall specifically release Escrow Holder from all liability, if any, which it may have in connection with this escrow because of any parry's failure to meet or comply with any such executory term or provision of this "Agreement", prior to close of escrow. Deposit of written instruction or acknowledgement with Escrow Holder shall constitute each said parry's specific authorization to close this escrow. General provisions of First American Title Insurance Company, attached hereto and made a part hereof, are hereby incorporated in said "Agreement". To the extent that the agreement contains any provisions inconsistent with or contrary to the provisions of the General Provisions attached as Exhibit "A" to these instructions, such "Agreement" shall remain as the agreement of the parties thereto but. First American Title Insurance shall be guided by the terms of their General Provisions. 1. The Opening Date of Escrow is April 17, 2003. 2. The Escrow Holder is in receipt of Buyer's initial deposit in the amount of$20,000.00. SIGN V RF'T TROT Page 1 of 6 First American Title Insurance Company National Commercial File No.: NCS-24071-SAl (mb) Services Division Date: April 18, 2003 Funds Held Fee Agreement If funds remain in escrow on the date which is 90 days after close of escrow (or in the event escrow has not closed, 90 days after the estimated closing date set forth in these instructions) then a monthly funds held fee of $25.00 shall accrue for each month or fraction of a month thereafter that the funds, or any portion thereof, remain in escrow. Escrow is authorized to deduct the monthly funds held fee directly from the funds held on a monthly, or other periodic basis (i.e. quarterly, semi-annually, etc.). By signing below, the parties acknowledge and agree to pay these sums to compensate you for your administration, monitoring, accounting, reminders and other notifications and processing of the funds so held in accordance with this funds held fee agreement. City of Huntington Beach Redevelopment LGB Investments Agency, a public body corporate and politic, of the State of California By. By: Ray. 9111ver Executive Director By: By: Connie Brockway , 77 Agency Clerk APPROVED AS TO FORM EJ ER McORATH,City Altomey y I,eonie Mulvihill Deputy City Attorney Page 2 of 6 First American Title Insurance Company National Commercial File No.: NCS-24071-SA1 (mb) Services Division Date: April 18, 2003 Exhibit "A" The parties understand and acknowledge: 1. Deposit of Funds&Disbursements Unless directed in writing to establish a separate, interest-bearing account together with all necessary taxpayer reporting information, all funds shall be deposited in general escrow accounts in a federally insured financial institution including those affiliated with Escrow Holder ("depositories"). All disbursements shall be made by Escrow Holder's check or by wire transfer unless otherwise instructed in writing.The Good Funds Law requires that Escrow Holder have confirmation of receipt of funds prior to disbursement. 2. Disclosure of Possible Benefits to Escrow Holder As a result of Escrow Holder maintaining its general escrow accounts with the depositories, Escrow Holder may receive certain financial benefits such as an array of bank services, accommodations, loans or other business transactions from the depositories ("collateral benefits"). All collateral benefits shall accrue to the sole benefit of Escrow Holder and Escrow Holder shall have no obligation to account to the parties to this escrow for the value of any such collateral benefits. 3. Miscellaneous Fees Escrow Holder may incur certain additional costs on behalf of the parties for services performed by third party providers.The fees charged by Escrow Holder for such services may include a mark up over the direct cost of such services to reflect the averaging of direct, administrative and overhead charges of Escrow Holder for such services. 4. Prorations &Adjustments The term "close of escrow" means the date on which documents are recorded. All prorations and/or adjustments shall be made to the close of escrow based on a 30-day month, unless otherwise instructed in writing. 5. Contingency Periods Escrow Holder shall not be responsible for monitoring contingency time periods between the parties. The parties shall execute such documents as may be requested by Escrow Holder to confirm the status of any such periods. 6. Reports As an accommodation, Escrow Holder may agree to transmit orders for inspection, termite, disclosure and other reports if requested, in writing or orally, by the parties.or their agents. Escrow Holder shall deliver copies of any such reports as directed. Escrow Holder is not responsible for reviewing such reports or advising the parties of the content of same. 7. Information from Affiliated Companies Escrow Holder may provide the parties' information to and from its affiliates in connection with the offering of products and services from these affiliates. 8. Recordation of Documents Escrow Holder is authorized to record documents delivered through escrow which are necessary or proper for the issuance of the requested title insurance policy(ies). Buyer will provide a completed Preliminary Change of Ownership Report form ("PCOR"). If Buyer fails to provide the PCOR, Escrow Holder shall close escrow and charge Buyer any additional fee incurred for recording the documents without the PCOR. Escrow Holder is released from any liability in connection with same. Page 3 of 6 First American Title Insurance Company National Commercial File No.: NCS-24071-SA1 (mb) Services Division Date: April 18, 2003 9. Personal Property Taxes No examination, UCC search, insurance as to personal property and/or the payment of personal property taxes is required unless otherwise instructed in writing. 10. Real Property Taxes Supplemental taxes may be assessed as a result of a change in ownership or completion of construction. Adjustments due either party based on a supplemental tax bill will be made by the parties outside of escrow and Escrow Holder is released of any liability in connection with same. The first installment of real property taxes is due November 1st(delinquent December 10th) and the second installment is due February 1st (delinquent April 10th). If a tax bill is not received from the County at least 30 days prior to the due date, buyer should contact the County Tax Collector's office and request one. Escrow Holder is not responsible for same. 11. Cancellation of Escrow Any party desiring to cancel this escrow shall deliver written notice of cancellation to Escrow Holder. Within a reasonable time after receipt of such notice, Escrow Holder shall send by regular mail to the address on the escrow instructions,one copy of said notice to the other party(ies). Unless written objection to cancellation is delivered to Escrow Holder by a party within 10 days after date of mailing, Escrow Holder is authorized, at its option, to comply with the notice and terminate the escrow. If a written objection is received by Escrow Holder, Escrow Holder is authorized, at its option, to hold all funds and documents in escrow (subject to the funds held fee) and to take no other action until otherwise directed by either the parties' mutual written instructions or a final order of a court of competent jurisdiction. If no action is taken on this escrow within 6 months after the closing date specified in the escrow instructions, Escrow Holder's obligations.shall, at its option, terminate. Upon termination of this escrow., the parties shall pay all fees, charges and reimbursements due to Escrow Holder and all documents and remaining funds held in escrow shall be returned to the parties depositing same. 12. Conflicting Instructions &Disputes If Escrow Holder becomes aware of any conflicting demands or claims concerning this escrow, Escrow Holder shall have the right to discontinue all further acts of Escrow Holder's part until the conflict is resolved to Escrow Holder's satisfaction. Escrow Holder has the right at its option to file an action in interpleader requiring the parties to litigate their claims/rights. If such an action is filed,the parties jointly and severally agree (a)to pay Escrow Holder's cancellation charges, costs (including the funds held fees) and reasonable attorney's fees, and (b)that Escrow Holder is fully released and discharged from all further obligations under the escrow. If an action is brought involving this escrow and/or Escrow Holder, the parties agree to indemnify and hold the Escrow Holder harmless against liabilities, damages and costs incurred by Escrow Holder(including reasonable attorney's fees and costs) except to the extent that such liabilities, damages and costs were caused by the gross negligence or willful misconduct of Escrow Holder: 13. Usury Escrow Holder is not to be concerned with usury as to any loans or encumbrances in this escrow and is hereby released of any responsibility and/or liability therefor. 14. Amendments to Escrow Instructions Any amendment to the escrow instructions must be in writing, executed by all parties and accepted by Escrow holder. Escrow Holder may, at its sole option, elect to accept and act upon oral instructions from the parties. If requested by Escrow Holder the parties agree to confirm said instructions in writing as soon as practicable. The escrow instructions as amended shall constitute the entire escrow agreement between the Escrow Holder and the parties hereto with respect to the subject matter of the escrow. Page 4 of 6 First American Title Insurance Company National Commercial File No.: NCS-24071-SAl (mb) Services Division Date: April 18, 2003 15. Insurance Policies In all matters relating to insurance, Escrow Holder may assume that each policy is in force and that the necessary premium has been paid. Escrow Holder is not responsible for obtaining fire, hazard or liability insurance, unless Escrow Holder has received specific written instructions to obtain such insurance prior to close of escrow.from the parties or.their respective lenders: 16. Copies of Documents;Authorization to Release Escrow Holder is authorized to rely upon copies of documents, which include facsimile, electronic, NCR, or photocopies as if they were an originally executed document. If requested by Escrow Holder, the originals of such documents shall be delivered to Escrow Holder. Escrow Holder may withhold documents and/or funds due to the party until such originals are delivered. Documents to be recorded MUSTcontain original signatures. Escrow Holder may furnish copies of any and all documents to the lender(s), real estate broker(s), attorney(s) and/or accountant(s) involved in this transaction upon their request. 17. Execution in Counterpart The escrow instructions and any amendments may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute the same instruction. 18. Tax Reporting,Withholding &Disclosure The parties are advised to seek independent advice concerning the tax consequences of this transaction, including but not limited to, their withholding, reporting and disclosure obligations. Escrow Holder does not provide tax or legal advice and the parties agree to hold Escrow Holder harmless from any loss or damage that the parties may incur as a result of their failure to comply wit federal and/or state tax laws. WITHHOLDING OBLIGATIONSARE THE EXCLUSIVE OBLIGATIONS OF THE PARTIES. ESCROW HOLDER.IS NOT RESPONSIBLE TO PERFORM THESE OBLIGA TIONS UNLESS ESCROW HOLDER AGREES IN WRITING. A. Taxpayer Identification Number Reporting Federal law requires Escrow Holder to report Seller's social security number and/or tax identification number,forwarding address, and the gross sales price to the Internal Revenue Service ("IRS").To comply with the USA PATRIOT Act, certain taxpayer identification information may be required by Escrow Holder from certain persons or entities involved (directly or indirectly) in the transaction prior to closing. Escrow cannot be closed nor any documents recorded until the information is provided and certified as to its accuracy to Escrow Holder. The parties agree to promptly obtain and provide such information as requested by Escrow Holder. Page 5 of 6 B. State Withholding &Reporting For Closina Prior to January 1, 2003: A buyer may be required to withhold and deliver to the Franchise Tax Board (FTB) an amount equal to 3.33% of the sales price of a California real property interest ("Real Property") by either: 1) a seller who is an individual with either a last known street address outside of California or when the seller's disbursement instructions direct the proceeds to be sent to a financial intermediary of the seller; OR 2) a corporate seller which has no permanent place of business in California. Buyer may become subject to a penalty for failing to withhold in an amount equal to the greater of: (i) 10% of the amount required to be withheld or(ii) $500. However, the buyer is not required to withhold.any amount and will not be subject to penalty for failure to withhold if; a) the sales price of the California.real property interest conveyed does not exceed $100,000; b)the seller_executes a. . written certificate, under the penalty of perjury;certifying that the seller is a resident of California, or if a corporation, has a permanent place of business in California; OR c) the seller, who is an individual, executes a written certificate, under the penalty of perjury, that the Real Property is the seller's principal residence. FTB may grant reduced withholding or waivers. For Closina After January 1, 2003: Under California law (Rev&Tax Code §18662), a buyer may be required to withhold and deliver to the Franchise Tax Board (FTB) an amount equal to 3.33%of the sales price in the case of disposition of California real property interest("Real Property") by either: 1) a seller who is an individual or when the disbursement instructions authorize the proceeds to be sent to a financial intermediary of seller; OR 2) a corporate seller that has no permanent place of business in California. Buyer may be subject to a penalty (equal to the greater of 10% of the amount required to be withheld or $500)for failing to withhold and transmit the funds to FTB in the time required by law. Buyer is not required to withhold any amount and will not be subject to penalty for failure to withhold if: a)the sales price of the Real Property does not exceed $100,000, b)the seller executes a written certificate under penalty of perjury certifying that the seller is a corporation with a permanent place of business in California; OR c) the seller, who is an individual, executes a written certificate under penalty of perjury certifying one of the following: (i)the Real Property was the seller's principal residence (as defined in IRC §121); (ii) the Real Property is or will be exchanged for property of like-kind (as.defined in IRC §1031) and that the seller intends to acquire property similar or related in service or use so as to be eligible for nonrecognition of gain for California income tax purposes under IRC §1031; (iii) the Real Property has been compulsorily or involuntarily converted (as defined in IRC §1033) and the seller intends to acquire property similar or related in service or use so as to be eligible for nonrecognition of gain for California income tax purposes under IRC §1033; or(iv)the Real Property sale will result in a loss for California income tax purposes. Seller is subject to penalties for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding laws. FTB may grant reduced withholding and waivers from withholding on a ease-by-case basis for corporations or other entities. Contact FTB: For additional information regarding California withholding, contact the Franchise Tax Board at (toll free) 888-792-4900), by e-mail nrws@ftb.ca.gov; or visit their website at wwww.ftb.ca.gov. C. Federal Withholding &Reporting Certain federal reporting and withholding requirements exist for real estate transactions where the seller (transferor) is a non-resident alien, a non-domestic corporation or partnership, a domestic corporation or partnership controlled by non-residents or non-resident corporations or partnerships. D. Taxpayer Identification Disclosure Parties to a residential real estate transaction involving seller-provided financing are required to furnish, disclose, and include taxpayer identification numbers in their tax returns. Escrow Holder is not required to transmit the taxpayer I.D. numbers to the IRS or the parties. Escrow Holder is authorized to release any parry's taxpayer I.D. numbers to any other parry upon receipt of a written request. The parties waive all rights of confidentiality regarding their taxpayer I.D. numbers and agree to hold Escrow Holder harmless against any fees, costs, or judgments incurred and/or awarded because of the release of taxpayer I.D. numbers. Page 6 of 6 %1 i k.1 - 4 t � =1 .x First American Title Insurance Company National Commercial Services Division 1 First American Way, Santa Ana, CA 92707 (714) 800.-3000 - Fax INSTRUCTIONS TO PAY COMMISSION To: First American Title Insurance Company National April 18, 2003 Commercial Services Division Escrow Officer: Maricel Borras File No.: NCS-24071-SA1 (mb) Property: 438 Main Street, Huntington Beach,California, Upon close of escrow, you are instructed to pay commission from funds received and/or held by you on my behalf as follows: Lee&Associates a licensed real estate broker, the sum of $ 28,500.00 Lifestyle Homes a licensed real estate broker,the sum of $ 28,500.00 This is an IRREVOCABLE COMMISSION ORDER and cannot be amended or revoked, insofar as it relates to payment of commission, without the prior written consent of the Broker(s) named herein, who shall be deemed a party to the escrow for the sole and exclusive purpose of receiving said commission. I have read and approve the foregoing instruction. I irrevocably instruct Escrow Holder to pay the commission only if this escrow is consummated. The undersigned further instructs Escrow Holder as our agent to deliver copies of all escrow instructions, any amendments thereto, and closing statements, during the term of this escrow to the parties named above, unless we shall have given Escrow Holder written instructions to the contrary. SIGN & IXX I N Page 1 of 2 First American Title Insurance Company National Commercial File No.: NCS-24071-SAl (mb) Services Division Date: April 18, 2003 City of Huntington Beach Redevelopment Agency, a public body corporate and politic, of the State of California APPROVED AS TO FORNI NI R M BATH,C�it/y Attorney Rayever ��O�03 By: a I.eoaie Mulvllii)1 Executive Director y / Deputy City Attorney By: Connie Brockway Agency Clerk Lee&Associates By: Address: 3991 MacArthur Boulevard Suite 100,Newport Beach, CA 92660 Phone: Lifestyle Homes By: Address: 16912 Warner Avenue Suite #201, Huntington Beach,CA 92649 Phone: (714) 969-1516 Page 2 of 2 COMPLETE & RETURN SELLER`S AFFIDAVIT OF NONFOREIGN STATUS File No: NCS-24071-SAl (mb) April 18, 2003 Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property.interest must withhold tax if the transferor is a "foreign person". I understand that this certification may be disclosed to the Internal Revenue Service by the transferee and that any false statement I have made herein (if an entity transferor, on behalf of the transferor) could be punished by fine, imprisonment, or both. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest located at 438 Main Street, Huntington Beach,CA, I hereby declare, under penalty of perjury, the following (if an entity transferor, on behalf of the transferor): THIS SECTION FOR INDIVIDUAL TRANSFEROR: 1. I am not a non resident alien for purposes of U.S. income taxation; 2. My U.S. taxpayer identification number (Social Security Number) is ; 3. My home address is THIS SECTION FOR CORPORATION, PARTNERSHIP,TRUST OR ESTATE TRANSFEROR: 1. [name of transferor] ('Transferor'.')is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. Transferor's U.S. employer identification number is ; 3. Transferor's office address is 4. I,the undersigned individual, declare that I have authority to sign this document on behalf of the transferor. Date: Signature Telephone: ( ) Ray Silver - Typed or Printed Name Executive Director . Title (if signed on behalf of an entity transferor) Si nature Connie Brockway Typed or Printed Name Agency Clerk Title APPROVED AS TO FORI,l FeyLon�ie �V��,City Attcr.:Mulvikill �( LJDeputy City Attomev t '" r R'� COMPLETE & RETURN P5 1099-S INPUT Company No. Office No. T e Order/Escrow/File Number Actual Closing Date NATLAC 1 Add Change Delete NCS-24071-SA1(mb) [1] [2] [3] [4] [5] SSUBIECT PROPERTYINFORMAT7ON Street Address or Brief form of Legal Description(for vacant land, use APN) [6] 438 Main Street City(for vacant land use county) State Zip Huntington Beach CA Transaction Data Contract Sales Price. No.of 2 or More 1099-S Buyers Part of Real Contingent Exchange. (Line 401 of HUD-1 Form)Note: If this 1099-S Forms. Estate Tax. Show any Transaction. Is Was(or will is an exchange,provide total dollar forms If 2 or more 1099-S real estate tax,on a this a contingent there be) value of cash, notes and debt relief required forms are required for residence,charged to transaction wherein other received by this exchanger. for the this transaction,record the buyer at settlement. gross proceeds property or sale of the dollar amount for cannot be services this this seller based on the determined with received? property. seller's declaration. certainty at time of closing? [71 $950,000.00 [8] $ $ a Yes Yes SELLER INFORMATION-PLEASE PRINT CLEARL Y Seller's Name [9] City of Huntington Beach Redevelopment Agency Seller's Forwarding Street Address 2000 Main Street City State Zip(or county if not USA) Huntington Beach,CA 92648 SELLER'S SOCIAL SECURITY NUMBER SELLER'S TAX IDENTIFICATION NUMBER [10] OR You are required by law to provide your closing agent with your correct Under penalties of perjury,I certify that the number shown above is my Taxpayer Identification Number. If you do not provide your closing correct Taxpayer Identification Number. agent with your correct Taxpayer Identification Number, you may be subject to civil or criminal penalties:imposed bylaw under the Tax Reform Act of 1986 under Internal Revenue Code Section 6045(E),6676, d--� 6722,6723, and 7203. Seller's Sig tore Date INSTRUCTIONS A) Make sure all data fields and areas indicated by numbers are accurately completed. 8) If there is more than one seller in this transaction,each seller must have a separate 1099-S form. In most cases a husband and wife are considered one seller and,only one name and corresponding Social Security Number or Tax Identification Number can appear on this form. C) Also,if more than one seller,indicate the total number of 1099-S forms required for the transaction and report the correct dollar value for this seller in area number(8]. D) Make sure all seller's information(name,forwarding address,Social Security or Taxpayer Identification Number,and seller's signature)is obtained. Missing or incorrect information may be subject to IRS penalty. E) Double check all information for completeness and accuracy before submitting for processing. APPRC)VFI ��. JE IFft,1hcTr '1 t l it�'Ape�Ipsu�ance 1/2001 Page 1 By L.eonie Mulvihill Y r�L FIRST AMERICAN TITLE INSURANCE COMPANY I'First American Way, Santa Ana, CA 92707 (714) 800-3000 - Fax COMPLETE & RETURN :E: Escrow No.: NCS-24071-SAi Date: 04/18/2003 Officer: Maricel Borras Property: 438 Main Street Huntington Beach,CA LOAN INFORMATION REQUEST i order for us to obtain statements of account from your existing lender(s)or homeowner's association, please provide us with ie following information on your accounts. We must have accurate and complete information on your accounts, as some take p to 30 days to return our request. Please fill out and return this form as soon as possible. ederal Regulation 545-132D requires authorization in writing from you before a lender can release any payoff iformation to an escrow holder. A delay in returning this signed and completed form could delay the close of this scrow. FIRST TRUST DEED Lender Name Address Loan Number Phone Number Fax Number, SS#/TIN SECOND TRUST DEED Lender name Address Loan Number Phone Number Fax Number SS#(TIN HOMEOWNER'S ASSOCIATION (if applicable) Association Name Management Co. Address Account Number Phone Number Fax Number SS#/'TIN signatures below are to be considered instructions for obtaining statements; to comply with the instructions of'the above ned companies; and out authorization to pay from funds due us at the close of escrow said companies'fees, including, but not ted to: Statement Fees, Transfer Fees, Late Fees, Prepayment Penalties, Impound Account Shortages without our further )roval. ase Provide Your Forwarding Address below,so funds or documents may be sent to you after close of escrow. Effective Date: SELLER(S): City of Huntington Beach Redevelopment Agency Ray Sily , -.Executive Director APPROVED AS TQ FORM By: IP R MlMhIll RATH, Attor:.oy 2000 Main Street `i 03 Huntington Beach,CA 92648 �ssi+Ma Connie Brockway, Agency Clerk �'F"�►'ci ' Y SIGN & RETURN . IP4 First American Title Insurance Company National Commercial Services Division 1 First American Way Santa Ana, CA 92707 RENT STATEMENT TO: FIRST AMERICAN TITLE COMPANY COMPLETE & RETURN ESCROW NO.: NCS-24071-SAI In order that rents for the property I am conveying may be correctly prorated through escrow, I hereby state that rentals as to amounts and dates to which they are paid, are as follows: Unit Tenant Rate per month 3 Date paid Security deposit Option to Right of to Purchase ist Y or N Refusal Y or N Bldg A—Creative $1,600. 00 llst,mo. n/a � Unless prior to date of.recording I have notified you in writing of some change in tenancy, you are to assume I will collect all rents which fall due according to the foregoing statement prior to close of escrow, and you will prorate the rents accordingly. You will also pay the grantee the above security deposit(if any), charging my account. DATED SELLER Ray Siiver, Executive uIrector SELLER Connie Brockway, Agency Clerk The above rent statement is hereby approved as a basis for rent prorations through this escrow. DATED BUYER BUYER Page 1 of 1 dc/04/18/2003 MARICEL BORRAS Escrow Ofr?cer National Commercial Senices Firs[American Title Insurance Comp�y� 1 FIRST'AMERICAN WAY•SANTA ANA,CALIFORNIA 92707 (714)800.4732•1800)054.3643•FAX(714)800.3815 . - mb0rras0f1rsfam.c0m•www.firstam.com NYSE:FAF 1 orl:�. �d YUike �+tlille�e, .�. CO`� 04k First American Title Insurance Company National Commercial Services Division 1 First American Way, , Santa Ana, CA 92707 Maricel Borras Direct Phone Number:(714)800-4732 Escrow Officer FAX:(714)800-3815 mborras@firstam.com City of Huntington Beach Redevelopment Agency April 23, 2003 Attention: Connie Brockway, Agency Clerk 2000 Main Street File No: NCS-24071-SAl ( mb) Huntington Beach, CA 92648 Re: 438 Main Street, Huntington Beach, CA Ms. Brockway: Regarding the sale of your property referenced above, First American Title Insurance Company National Commercial Services Division will be handling your transaction. PLEASE SIGN AND RETURN, retain the copy for your records: • JCP Natural Hazard Disclosure Report and Invoice - please complete, sign and return page 1 and a copy of Invoice to escrow Should you have any questions or need further assistance, please contact the undersigned. We appreciate the opportunity to serve you. Sincerely, First Akrican Title Insurance Company Maric /HS Escro Enc.:Del. cc: Curt Stalder, Lee &Associates (via delivery) Page 1 of 1 hs/04/23/2003 JCPGeologists COMPLETE —=...�` 4 Division o/ ABS ConsuLring SIGN & RETURN WE WILL FORWARD A COMPLETED PAGE ONE UPnN RECEIPT FRO%-f SELLER Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063 Date: 04/21/2003 j - r SELLERS) ACKNOWLEDGEMENT AND. DISCLOSURES The following blank sections are provided for the Seller's convenience in providing certain disclosures that may be applicable to the property and this transaction.This section is to be completed by the seller or their agent and provided to the purchaser. The following disclosures are provided by: ❑Seller or ❑Seller(s)Agent Date ❑Seller or ❑Seller(s)Agent Date Seller Disclosure - Earthquake Safety ==' This structure is built prior to 1975 and has walls of(i)pre-cast(e.g.tilt-up)concrete or reinforced masonry together withy '; wood frame floors or roofs or is constructed of(ii)unreinforced masonrya^ ; Yes No Do not know If(1)the improvements on the property were constructed prior to 1975,and(2)said improvements include structures ; with(i)pre-cast(e.g.tilt-up)concrete or reinforced masonry walls together with wood frame floors or roofs or(ii)unreinforced masonry walls,Buyer must be provided with a copy of the Commercial Property Owner's Guide to Earthquake Safety (copy included with this report) published by the California Seismic Safety Commission(California Government Code §8893 et seq.).This booklet explains that owners of unreinforced masonry buildings in SeismicZone 4(most of California)Who have received notice that their buildings have load-bearing unreinforced masonry walls must post their buildings with signs Warning that they may be unsafe in an earthquake(California Government Code§8875.8).This information was provided by the Seller or Broker.JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Water Heater Bracing Installation Yes No Do not know If the property contains one or more water heaters,Seller is required by California Health and Safety Code§19211 to certify to the Buyer that all such water heaters have been braced,strapped and/or anchored in accordance with law.This water heater bracing installation information was provided by the Seller er Broker.JCP has not validated this information in any way and takes no responsibility for its accuracy. Seller Disclosure - Title Insurance is provided by the Purchase Agreement. Yes No Do not know This Title Insurance information was provided by the Seller or Broker.JCP has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that title insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and,in accordance with California Civil Code.§1057.6,is advised as follows: IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY;IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE f.IAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED.A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. END SELLER'S DISCLOSURES. BEGIN REPORT RECEIPT AND ADDITIONAL THIRD PARTY DISCLOSURES BUYER S 5�...��v�AKNOWLEDl. GEMENT I(WE)HAVE READ AND UNDERSTOOD THE ABOVE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD,AND MOLD DISCLOSURES THAT FOLLOW IN THIS REPORT Signature of Buyer Date Signature of Buyer Date Page 1 of 8 JCP Geologists 1 1 JLPGeologists —� A Division of ABS Consulting Report Number•.2003041800063 I n Date: 04/21/2003 V COMMERCIAL PROPERTY ORDER INVOICE e Cahfornia Overnight Maricel Borris Escrow Number: 24071 MB First American Title Company APN: 024 134 02 1 First American Way Subject Property: Santa Ana, CA 92702 SIGNATURE REQUIRED 438 Main St SUNRISE CALIFORNIA OVERNIGHT Huntington Beach, Orange County IlIIlI�IIII IIII!IIlII II!!I lIIII lIIII!lIII lIIII 111!IIII 4 5 4 8 2 2 0 4 Date Product Name Price 04/21/2003 Commercial EnviroCheck Disclosure Report $100.00 04/21/2003 04/21/2003 Natural Hazards Commercial Properties Report $118.00 ~Sr1E FOLLOW ING co, �'/ ' Ar-; ..PVC D y: S APR 2 2 2003 114 Sy Mail Check to: P.O. Box 7604 San Francisco, CA 94120-7604 Please reference JCP Report Number 2003041800063 on the check. Demand is hereby made on the above referenced escrow for JCP disclosure services. This demand is due and payable upon the close of escrow. If for any reason escrow is transfered to another account, please fax the new - information to us at (800)329-9527. We will submit the invoice.to the new escrow company. If for any reason this escrow is canceled, please contact us immediately. We will forward the invoice to the responsible party. Please Note: This report was Total for Services: 199.00 requested by the following party: Amount Paid $0.00 First American Title Company Balance Due 199.00 1 First American Way If there are any billing questions, please Santa Ana, CA 92702 contact our invoice department at (800)-748-5233. Thank you. =_ JCP Geologists 321 Warren Avenue Fremont CA 941539 800.748.5233 reports@jcp-inc.com vvv,,;f.jcp reports.com O 2003 , JigQCPIGeologists � A Division o/ABS Consulting Report Number 2003041800063 I Date: 04/21/2003 V COMMERCIAL PROPERTY ORDER INVOICE i e CaRifornna Overnight Maricel Borris Escrow Number: 24071 MB First American Title Company APN: 024 134 02 1 First American Way Santa Ana, CA 92702 Subject Property: SIGNATURE REQUIRED 438 Main St SUNRISE CALIFORNIA OVERNIGHT Huntington Beach, Orange County Ililll IIIII IIIII IIIII IIIII IIIH IIIII IIIII IIIII IIII IIII 7 4 5 4 8 2 2 0 4 Date Product Name Price r 04/21/2003 Commercial EnviroCheck Disclosure Report $100.00 04/21/2003 04/21/2003 Natural Hazards Commercial Properties Report $118.00 L lll APR 22 2003 u J � By _ Mail Check to: P.O. Box 7604 San Francisco, CA 94120-7604 Please reference JCP Report Number 2003041800063 on the check. Demand is hereby made on the above referenced escrow for JCP disclosure services. This demand is due and payable upon the close of escrow. If for any reason escrow is transfered to another account, please fax the new _. information to us at (800)329-9527. We will submit the invoice to the new escrow company. If for any reason this escrow is canceled, please contact us immediately. We will forward the invoice to the responsible party. Total for Services: 199.00 Please Note: This report was requested by the following party: Amount Paid $0.00 First American Title Company Balance Due 199.00 1 First American Way If there are any billing questions, please Santa Ana, CA 92702 contact our invoice department at -=- (800)-748-5233. Thank you. JCP Geologists 321 Warren Avenue Fremont CA 94539 800.748.5233 reports@jcp-inc.com www.jcpreports.com @ 2003 zS J PGeologists Sl A Division o'ABS Consulting � .h �a !r' .a � 5 '.:. sS Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063. Date: 04/21/2003 . k3.x"3Urm�•h'�'`- - -" NO -O"��+ fi StELLER(Sj �ACKNO�WLEDGEMENTANDt j�D`ISCLO�URES iFY�� = The following blank sections are provided for the Seller's convenience in providing certain disclosures that may be applicable to the property and this transaction.This section is to be completed by the seller or their agent and provided to the purchaser. The following disclosures are provided by: ❑Seller or ❑Seller(s)Agent Date ❑Seller or ❑Seller(s)Agent Date Seller Disclosure - Earthquake Safety j This structure is built prior to 1975 and has walls of(i)pre-cast(e.g.tilt-up)concrete or reinforced masonry together with wood frame floors or roofs or is constructed of(ii)unreinforced masonry Yes No Do not know If(1)the improvements on the property were constructed prior to 1975,and(2)said improvements include structures with(i)pre-cast(e.g.tilt-up)concrete or reinforced masonry walls together with wood frame floors or roofs or(ii)unreinforced wi masonry walls, Buyer must be provided with a copy of the Commercial Property Owner's Guide to Earthquake Safety (copy included with this report) published by the California Seismic Safety Commission(California Government Code §8893 et seq.).This booklet explains that owners of unreinforced masonry buildings in Seismic Zone 4(most of.California)who = ri have received notice that their buildings have load-bearing unreinforced masonry walls must post their buildings with signs _ : warning that they may be unsafe in an earthquake(California Government Code§8875.8).This information was provided by the =r raj Seller or Broker.JCP has not validated this information in any way arid takes no responsibility for its accuracy. `_` Seller Disclosure - Water Heater Bracing Installation �aT3n Yes No Do not know - t If the property contains one or more water heaters,Seller is required by California Health and Safety Code§19211 to certify 1" Y=v to the Buyer that all such water heaters have been braced,strapped and/or anchored in accordance with law.This water : heater bracing installation information was provided by the Seller or Broker.JCP has not validated this information in any way a= t and takes no responsibility for its accuracy. Iwl Seller Disclosure - Title Insurance is provided b the Purchase Agreement. P Y 9 Yes No Do not know This Title Insurance information was provided by the Seller or Broker.JCP has not validated this information in any way and takes no responsibility for its accuracy. In the event that the Purchase Agreement does not at present provide that titleV: insurance will be obtained, Buyer is strongly urged to consider purchasing such insurance, and, in accordance with California Civil Code§1057.6, is advised as follows: IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES f WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED.A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. END SELLER'S DISCLOSURES. BEGIN REPORT RECEIPT AND ADDITIONAL THIRD PARTY DISCLOSURES BUYER(S) ACKNOWLEDGEMENT n� I(WE)HAVE READ AND UNDERSTOOD THE ABOVE SELLER'S DISCLOSURES AS WELL AS THE NATURAL HAZARD,AND MOLD - DISCLOSURES THAT FOLLOW IN THIS REPORT r� Signature of Buyer Date = Signature of Buyer Date Page 1 of 8 JCP Geologists 321 V%!arren Av nL:;a_ - 5 i-on-1 CA _`539 800.748.5233 re ,___jcp-inc.com ....;/.icpreports.cor- _ .. Jl...l— GeologiSLS A vision of ABS Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041.800063 Date: 04/21/2003 05 a Y -�- v�X -�-- r"m.` .'r+" ww IR NASTURAL sIiAZARD DISCLOSURES a � i,. k ar"".. �ci: f.'..{^._...,.- -: - - .,..i___-uss._.....:a�i(_- -au3>,eez :s- :- .z �.x�.•. s`..�- Natural Hazard Disclosure: Disclosure of certain officially mapped natural hazard information is required j in all real property transactions in California.This report is designed to provide a parcel-specific map reading to fulfill disclosure requirements as well as help in decision-making processes prior to entering into purchase negotiations or due diligence commitments for a prospective commercial or industrial property. THE SUBJECT REAL PROPERTY LIES WITHIN THE FOLLOWING AREA(S): -; 7 1. A Special Flood Hazard Area (Any type Zone "A"or "W) designated by the Federal Emergency ' Management Agency. Title 42 U.S. Code §4104(a). • Yes •No X •Do not know and information not available from local jurisdiction JCP determination based on the officially adopted maps: NOT in a special flood hazard area. Located in Zone 'X"Areas of minimal flooding determined to be outside the 500-year flood plain. Lenders are not federally required to have homeowners purchase and maintain F flood insurance for property in this zone designation. r= 2. An Area of Potential Flooding shown on a dam failure inundation map pursuant to§8589.5 of the California Government Code. • Yes •No X •Do not know and information not available from local jurisdiction JCP determination based on the officially adopted maps: NOT in an Area of Potential Flooding Caused By Dam Failure according to the maps adopted by The State of a: California Office of Emergency Services. "wt e; i } 3. A Wildland Area That May Contain Substantial Forest Fire Risks and Hazards pursuant to §4125 of the California Public Resources Code. The owner of this property is subject to the maintenance requirements of§4291 of the CaliforniaPublic Resources Code. Additionally, it is not the state's responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into an agreement with a local agency for those purposes pursuant to §4142 of the California Public Resources Code. • Yes •No X JCP determination based on the officially adopted maps: NOT in an official State Responsibility Area. Fire protection services for structures in this area are provided by local fire departments. Page 2 of 8 JCP Geologists 21 Warren Avenue Fremont CA 94539 600.748.5233 re.portsJjcp-inc.com %-i%rr/.jcpreports.com O 2003 } JCPGeoIogists —F,.[ A Division of ABS Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 02413402 Report Number: 2003041800063 Date: 04/21/2003 4. A Very High Fire Hazard Severity Zone pursuant to §51178 or 51179 of the California Government Code The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code. • Yes •No X JCP determination based on the officially adopted maps: NOT in an area of Very High Fire Hazard Severity Zone as defined on the State level maps (Gov. Code 51178). A local agency may exclude or include additional fire zones at their option. Concerned parties should contact their local fire services for more information. 5. AN EARTHOUAKE FAULT ZONE pursuant to §2622 of the California Public Resources Code. h"} • Yes •No X r t JCP determination based on the officially adopted maps: NOT in an official Earthquake Fault Zone. There are no Alquist-Priolo state level mapped active fault traces on the ro ert . P p Y �5�... NOTE: This determines the exposure of the asset to surface fault rupture hazard as defined by officially mapped Earthquake Fault Zones. It does not address earthquake shaking hazard. Earthquake shaking is the primary source of risk to the asset if the structure is not built directly across a fault trace. For a preliminary assessment of seismic shaking hazard and structure vulerability consult an EQE PropertyRisk Seismic Risk Screening ReportTm available through www.propertyrisk.com. 6. A Seismic Hazard Zone pursuant to§2696 of the California Public Resources Code. = = • Yes (Landslide Zone) • Yes (Liquefaction Zone) : • No X • Map not yet released by state JCP determination based on the officially adopted maps: r. Not in an Official Seismic Hazard Zone. In an area of no state-level identified Liquefaction Hazard.Other Seismic Hazards that may eventually be addressed on these.maps have not yet been evaluated for Orange County. 7. County Level Geologic and Seismic Zone Information Based on the officially adopted natural hazard maps in the county's General Plan, the site is: NOT in a zone of high geologic hazard. Located in Slope Stability Zone 1, Seismic Shaking Zone B, and an area of Low Expansivity for Soils. In an area of no county-level identified Mudflow & Rockfall, tsunami, liquefaction or fault hazards as shown on the adopted General Plan maps used in this report. See the County Geologic Zones Explanation included with this report for more information. Y; Page 3 of 8 JCP Geologists 321 Warren Avenu: Frer'-c:n CA- 94539 800.7 18.5233 rePcrs@jcp-irc.corn v,1,vwJcpreporis.co:, _003 JUGeologists A Divisio.^ 43S Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063 ..Date: 04/21/2003 } 8. City Level Geologic Hazard Zone Determination Based on the officially adopted natural hazard maps in the city's General Plan, the site is:. Located in either an unincorporated area of the County or does not have officially adopted mapped information available to us at this time from which a geologic determination can be made. . j . 1 I t$ , � OfherR>fsk-Effl xposures � � � «,� `. : : t The descriptions,explanations and natural hazard disclosures provided in this report are not intended to be full and complete disclosures of all possible hazards and their effects to the Buyer and/or the property. Identified natural hazards and any others that may exist but are not addressed in this report may limit the ability to develop the real property, to obtain insurance, or to receive assistance after a disaster. In the event this document indicates 'J the property is affected by one or more natural hazards, buyer(s)and seller(s)are advised to: .L. 1. Review the applicable laws in their entirety: 2.Seek advice of counsel as to any legal consequences of the disclosed items. j= 3. Retain appropriate consultants to review and investigate the impact of said disclosures. On-site inspections and/or due diligence assessments by appropriately licensed engineers and experts are recommended prior to completing a real estate, loan, or insurance transaction. 4 f•_.-- s . - h? �. s^"- -'--•Y -?x �3e ^t,"�' m �� -"'Silv`x -* i-.,,, s K-,EXP.LA'NATIONS OF�HAZARD�ZONES uT. `S� fi §i 4' >z s' ._�..-121.fi s: 1,.�:.c- .�:...:� £-.� ,d i�...t.'_Zr. _-d. �i � i. £ .i • • SPECIAL FLOOD HAZARD AREAS • Property in a Special Flood Hazard Area"A"or"V' is subject to flooding in a "100-year rainstorm." Federally connected lenders are required to have homeowners maintain flood insurance in these zones.A 100-year flood occurs on average once every 100 years, but may not occur in 1,000 years or may occur in successive years. Other types of flooding, such as dam failure, are not considered in developing these zones. In some cases,the insurance requirement may be waived or modified by obtaining a"Letter of Map Revision"(LOMR)or"Letter of Map Amendment"(LOMA)from the Federal Emergency Management Agency(FEMA).This might be possible where flooding is shallow and fill was placed on the site, appropriate flood control measures were taken,or only the lot and no part of the structure is in the zone.Contact FEMA directly for more information. Flood insurance for properties in Zones B,C,X or D is available but is not required. c.. Zones _A, AO, AE, AH, Al-A30:"100-year"flooding areas-a 1%or greater chance of yearly flooding from excessive rainfall. Zones V, V1-V30: Area of"100-year"flooding in coastal_(shore front)areas subject to wave action. Zone B: Area of moderate flood risk.These are areas between the"100"and "500"year flood-risk levels. Zones X: An area of moderate flood risk(when shaded on the map,a Zone X is equivalent to Zone B)or an area of minimal flood risk(an unshaded"X"zone on the map). Zones C, D: NOT IN an area of"100-year"flooding.Area of minimal(Zone C)or undetermined(Zone D)flood hazard. • • AREAS OF POTENTIAL FLOODING CAUSED BY DAM FAILURE • • These areas are subject to potential flooding in the event of a sudden or total failure of a dam and injury could occur as a result. Most areas are defined assuming an instantaneous dam failure with a full reservoir. However,dams rarely fail instantaneously and reser- voirs are not always filled to capacity. Not all dams in the state have innundation zones mapped.There may be exceptional conditions where such a map was not required by the Office of Emergency Services;therefore,the zones are not delineated. • • VERY HIGH FIRE HAZARD SEVERITY ZONES • • Very High Fire Hazard Severity Zones(VHFHSZ)must be identified by the California Department of Forestry and local fire authorities in Local Responsibility Areas of California(areas where fire suppression is the responsibility of a local fire department). Properties — in these zones may have a higher risk for fire damage.Structures in these zones are required to have a"Class A"roof for new =� construction or replacement of existing roofs. In addition, proper ty owners must clear tree limbs from within ten feet of chimneys and stovepipes,clear roofs of leaves etc., maintain spark screens over chimneys and stovepipes,and generally maintain vegetation Page 4 of 8 JCP Geologists 321 Avenue Fremont C1 94539 8C 48.5233 reports@jcp-inc.com www.jcpreporls.ccm 0 2003 Sri JCPGeologists A Division oI ABS Con;ultir,g Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063 Date.: 04/21/2003 clearance of 30 feet around structures.This is just a general summary of the basic requirements. Please contact your fire department for a complete list of the requirements and exceptions. • • WILDLAND AREAS OF FOREST FIRE RISK (State Responsibility Areas) • Wildland Fire Risk Areas(also called State Responsibility Areas or"SRA's")are zones where the State is responsible for suppressing fires using the California Department of Forestry(CDF)fire protection services.SRA's are generally rural areas with a significant wild- land fire potential. Unless the property is in a county which has assumed fire suppression responsibility or has an agreement with a local fire agency,property owners in SRA's are responsible for organizing structural fire protection services.Such information is not included on the maps;therefore, it can't be provided here. For very isolated properties with no local fire services,there may be significant fire risk or only seasonal fire services.Owners of properties in SRA zones are required to clear tree limbs from within ten feet of chimneys and stovepipes, maintain trees adjacent to any building free of dead wood,clear roofs of leaves etc., maintain spark screens over chimneys and stovepipes, and generally maintain a vegetation clearance of 30 feet around structures.Contact a fire department for a complete list of the requirements and exceptions. EARTHQUAKE FAULT ZONES (Alquist-Priolo Zones) Earthquake Fault Zones are delineated and adopted by California as part of the Alquist-Priolo Special Studies Zone Act of 1972.This v Act was later re-titled as the 'Alquist-Priolo Earthquake Fault Zone Act." Property in an Earthquake Fault Zone does not necessarily have a fault trace existing on the site. Earthquake Fault Zones are areas or bands delineated on both sides of known active earth- quake faults. In some places,the zones are more than one-quarter of a mile wide.The potential for"fault rupture'(ground cracking along the fault trace)damage is relatively high only if a structure is located directly on a fault trace. If a structure is not on a fault =` trace, shaking will be the primary effect of an earthquake. During a major earthquake,shaking will be strong in the vicinity of the : fault and may be strong at some distance from the fault depending on soil and bedrock conditions. ram: • SEISMIC HAZARD ZONES (Seismic Hazard Mapping Act) •.• - Seismic Hazard Zone maps delineate areas subject to earthquake hazards. Maps are only available for limited areas now, but will f' eventually cover all of California. New development in a Seismic Hazard Zone is only permitted if it can be shown that mitigation makes the site acceptably safe.The hazards addressed are: liquefaction, enhanced ground shaking,earthquake induced land - slides, and various other ground failures.The first release of maps only addresses liquefaction and/or landslide zones. Liquefaction Hazard Zones are areas where there is a potential for or an historic occurrence of liquefaction.Liquefaction is a rare soil phenomenon that can occur when loose,water saturated,fine-grained sands and silty sands that lie within 50 feet of the ground surface are shaken in a significant earthquake.The soil temporarily becomes liquid-like and structures may settle unevenly. Liquefaction Hazard Zones may also include areas with a potential for earthquake-induced landslides.This typically exists near an ; existing landslide toe, downslope from rockfall or debris flow source areas, or steep stream banks. Earthquake-Induced Landslide Hazard Zones are areas where there has been a recent landslide,or where the local slope, geological,geotechnical, and ground moisture conditions indicate a potential for landslides such that mitigation would be required prior to development. • 0 ORANGE COUNTY GEOLOGIC ZONES • The Orange County Seismic Safety Element defines approximately 15 zones that represent different hazard levels.The zones were defined using a variety of geologic, hydrologic and slope gradient information, but have been generalized and simplified by necessity: RELATIVE SLOPE STABILITY ` The relative slope stability zones represent average slope stability conditions for each area.Any individual property within a Relative v Slope Stability Zone could be at less or more relative risk than is indicated by the zone designation. If site-specific information regarding slope stability is desired, JCP recommends that a geotechnical consultant be retained to study the site. *Slope Stability Zone 1:Zone 1 has a very low potential for massive bedrock landslides under normal conditions and a very low potential under seismic (earthquake) conditions. *Slope Stability Zone 2:Zone 2 has a low potential for massive bedrock landslides under normal conditions and also a moderately low potential under seismic(earthquake)conditions. c *Slope Stability Zone 3:Zone 3 has a moderately low potential for massive bedrock landslides under normal conditions and also a moderately high potential under seismic(earthquake)conditions.This zone designation could represent a greater risk of slope failure . during earthquakes if the slope gradient is greater than 20%and the slope is underlain by relatively weak bedrock or weak soil materials. *Slope Stability Zone 4:Zone 4 has a moderately high potential for massive bedrock landslides under normal conditions and a high potential under seismic (earthquake) conditions. ,,Slope Stability Zone 5:Zone 5 has a high potential for massive bedrock landslides under normal conditions and also a very high r potential under seismic (earthquake) conditions. •Slope Stability Zone 6: Zone 6 has a very high potential for massive bedrock landslides under both normal and seismic conditions'' *Slope Stability Zone W:Zone W represents coastal areas which have unstable slopes resulting from periodic wave erosion. Page 5 of 8 •Rockfall Zones represent areas which may experience falling rocks during periods of exceptionally high rainfall or seismic shaking. JCP Geologists 321bNarre"-.A'-;5"':e Fremont C=. 94339 800.748.0-233 reportsr?jcp-inc.cc JCPGeologi,,s A Division, of ABS Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report .Number: 2003041800063 Date: 04/21/2003 j •Mud Flow Zones represent areas of potential mud-debris flows. Such flows may occur during periods of exceptionally high j rainfall, such as that which occurred during the February-March 1969 floods. SEISMIC SAFETY ZONING Several seismic zones have been defined by Orange County to seperate areas having varying responses to earthquake shaking.The zones were defined utilizing a variety of geologic, hydrologic and slope gradient information, but by necessity, have been generalized. 1 Any single property within a Seismic Zone could be at less or more relative risk than is indicated by the zone designation. If site-specific a information regarding seismic hazards is desired,JCP recommends that a geotechnical consultanat be retained to study the site. ,Tsunami Zone:This area has been designated as a zone of moderate risk for tsunami(seismic sea wave or"tidal wave")run-up. Properties in a tsunami zone may be inundated with waves which recur on the average of once every 100 years. •Seismic Shaking Zone A: Zone A represents areas of least earthquake shaking.The maximum expected damage to modern construction due to shaking is expected to be minor to moderate in this zone. •Seismic Shaking Zone B: Zone B represents areas of intermediate earthquake shaking.The maximum expected damage to _.R. `;l modern construction due to shaking is expected to be moderate in this zone. =:Y •Seismic Shaking Zone C: Zone C represents areas of high geologic hazard only if strong earthquake shaking produces liquefaction. See section below for an explanation for liquefaction. <' *Liquefaction Potential:Liquefaction is a liquid-like condition of the soil which sometimes occurs during earthquake shaking where the ground water level is close to the surface and the subsurface materials are loose and cohesionless(such as sandy soil).These r= factors have the potential to combine to produce liquefaction in certain local areas. I *Potentially Active Fau Its:Faults active sometime within the last three million years, but with no historical activity, are considered _ r.; "potentially active"by Orange County. Properties in a zone 500 feet wide on either side of a potentially active fault trace may be at some risk of fault rupture(ground cracking along a fault trace)if that structure straddles a fault trace. For more discussion of fault zones, see the Alquist-Priolo Earthquake Fault Zone section above. EXPANSIVE SOILS. ,.: ..mow.... Expansive soils occur throughout much of Orange County.These areas are subjectto the seasonal shrink-swell cycles of soils,as well as slope yielding if locally on a slope.Three possible conditions related to expansive soils exist in the County. Differential Swell is the uneven tilting or lifting of a structure by the greater expansion of thicker soils on one side of the structure. Concentric Swell is caused by "' the migration of water toward the center of a structure,causing expansion of the soils, and lifting of the center of the structure. K, Slope Yielding is a slow downslope movement of soils,causing tilting of the foundation of a structure. Experts agree that no residence is completely safe from cracking, slipping or sinking to some degree. Expansive soil problems can be mitigated, in most cases,through �- P Y 9� PP� 9 9 9 P g 9 structural and design modifications and, in some cases,through soil treatment techniques. CITY-LEVEL GEOLOGIC ZONES • :y This disclosure report reviews the officially adopted geologic hazard maps in the Safety Element that each incorporated city in California is required to include in its General Plan.The city the subject property is located in has either not officially adopted hazard zonation maps in its General Plan at an appropriate scale to delineate where hazards may exist on a single parcel basis or will not make such maps available outside city offices. However, potential natural hazards may exist and be delineated on other sources used by the city in its Planning, Engineering,or Building Departments. Such potential sources are not reviewed in this report. All parties should be aware that California is"earthquake country." Faults that may exist in this City or in neighboring regions could rs. cause earthquake shaking or other fault related phenomena at the property.Other geologic hazards such as, but not limited to, i liquefaction (a type of soil settling that can occur when loose,water-saturated sediments are shaken significantly in an earthquake) { may occur in certain valley floor areas and landslides are a possibility in any hillside area.To investigate other sources of natural hazard information that may be available,contact the city Engineering, Planning or Building Departments. k NOTE:County and city-level information sources are developed independently of each other and do not necessarily define or delineate hazards in the same way.A site can be in a geologic hazard zone according to the city and not in a zone according to the county and vice versa.Cities and counties may use other information in addition to their General Plan sources to determine if hazards exist at a site or which sites may require geologic studies prior to new or additional construction.Such information could be a material fact to be disclosed in addition to General Plan information. Additional natural hazards may exist and be delineated on other sources used by the City in its Planning, Engineering,or Building Departments. Such potential sources are not reviewed in this report.To investigate other sources of natural hazard information that may be available and used at the city level, contact the city Engineering, Planning or Building Departments. Page 6 of 8 JCP Geologists 321 Vdarren Avenue Fremont CA 94539 800.74= 2K s^jcp-inc.com ��j%%,.••.,Jcpreports.com ©2003 JCPGeologists =,:L 4 Drvislon 0A6S Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063 Date: 0.4/21/2003. MO�LDADVISORY The Buyer is hereby advised that naturally occuring molds may exist both inside and outside of any building and may not be visible to casual inspection. Persons exposed to extensive mold levels can become sensitized and develop allergies to the mold or other health problems. Extensive mold growth can damage a structure and its contents.All prospective purchasers of residential and commercial property are advised to thoroughly inspect the subject property for mold. Be sure to inspect the property inside and out for sources of excess moisture,current water leaks and evidence of past water damage. For molds to grow and reproduce,they need only a food source- any organic material,such as leaves,wood,paper,or dirt and moisture. Because molds grow by digesting the organic material,they gradually destroy whatever they grow on.Mold growth on surfaces can often be seen in the form of discoloration, frequently green, gray,brown,or black but also white and other colors. As part of a buyer's physical inspection of the condition of a property,the buyer may consider engaging an appropriate and :. qualified professional to inspect and test for the presence of harmful molds and to advise the buyer of any potential risk and =s_ options available. This advisory is not a disclosure of whether harmful mold conditions exist at a property or not.JCP Geologists rrT lI has not performed testing or inspections of any kind. Any use of this form is acknowledgement and acceptance that JCP does not disclose,warrent or indemnify mold conditions at a property in any way and is not responsible in any way for mold conditions _; that may exist. Information is available from the California Department of Health Services Indoor Air Quality Section fact sheet --. entitled, "Mold in My Home:What Do I Do?"The fact sheet is available at www.dhs-iaq.org or by calling(510)540-2476. The Toxic Mold Protection Act of 2001 requires that information be developed regarding the potential issues surrounding naturally occuring molds within a home. Information was written by environmental authorities for inclusion in the =� I Environmental Hazards:A Guide for Homeowners, Buyers, Landlords and Tenants booklet developed by the California Environmental Protection Agency and the.Department of Health Services. It is found in Chapter VI of that booklet,and includes. references to sources for additional information. For local assistance, contact your county or city Department of Health, Housing, or Environmental Health. CONFIRMATION OFCOVERAGVAN WS1NDEMNIFI.CATI N Y This Confirmation of Coverage Statement applies only to the current transaction for which this JCP report was prepared, as of the date this report was prepared. 75;R This statement is confirmation that JCP Geologists is included as an insured under a$20 million Professional Liability policy for errors &omissions arising from the services JCP performs. : -- v Coverage, which is subject to specific terms and conditions in the policy, is provided for damages JCP is obliged to pay as a result of its negligent acts, errors or omissions arising out of its Natural Hazard Disclosure Professional Services provided for the above referenced : property as of the date this report was prepared. r JCP's Professional Liability insurance policies contain an agreement which, subject to the specific terms and conditions contained in the policy, indemnifies and provides defense of the Clients of JCP against claims caused by the negligent acts, errors or omissions of JCP that fall within the 9-0 scope of a contractual indemnification obligation of JCP to its Clients. For this purpose, Clients of JCP are the contractual parties to this transaction and their respective real estate agents for which JCP has provided professional services. t Date: 04/21/2003 By: JCP Geologists Greg Rufe - - ' President Page 7 of 8 JCP Geologists 391 Wa' ren Avenue F.en-iont CA '.Oo. -8. �33 oor. ,_-nc.com JCPGeologi5,s sAri A Division of ABS Consulting Commercial Natural Hazard Disclosure Report Property Address: 438 Main St, Huntington Beach, Orange Co., CA APN: 024 134 02 Report Number: 2003041800063 Date: 04/21/2003 .-z-S s ��rr JCP Geologists(JCP)provides this Commercial Natural Hazard Disclosure Report as disclosure of certain mandated natural hazard information i and transmission of certain Seller provided disclosures.It provides the investor with an early cost-effective guide to aid in decision making prior to entering into purchase negotiations or due diligence commitments for a prospective property asset.Use of this report is acknowledgment of and agreement to abide by all Terms and Conditions set forth in this report. The report is specifically prepared for the land parcel(s)identified by Assessor Parcel Number(s)(APN's)or developer's Tract and Lot numbers i supplied to JCP by the client(or reasonably inferred from current owner information if that was supplied instead).In the event that the parcel identification i provided us is incomplete,the subject property is assumed to comprise a single land parcel and is dentified for the purposes of this report by ithe corresponding single APN.All parties understand that the information provided in the disclosures does not apply to any other assessors parcel numbers other than those identified in this report. For the Natural Hazard Disclosures,JCP examines only the following maps:(a)NFIP Flood Hazard Boundary Maps,(b)California Office of -,--y Emergency Services Dam Failure Inundation maps,(c)AB 6.Real Estate:disclosure(CDF)maps(d)Alquist-Pdolo Earthquake Fault Zone maps, -• {_•- (f)California Seismic Hazards Mapping Act maps(where available),(g)certain LOMR's or LOMA's(not all that exist may be available to JCP),(g)certain natural hazard Safety Element maps adopted by a county as part of its General Plan,and(h)certain natural hazard Safety Element maps adopted by a city as part of its General Plan only for location of the above property as identified by the Seller or Seller's agent.JCP relies on these official sources for the information in this report and does not produce,maintain or verify the information from these sources.Other hazard or disclosure information that may exist in a jurisdictional Safety Element,General Plan or any other source is not provided in this report. ,. The following procedures and limitations apply to all of the disclosures on all pages of this report Our services include,where appropriate,use of the :} assessor's rolls,cadastral-type maps,photographic enlargements of maps and various cartographic techniques to locate the site on the appropriate map.The determination is made as accurately as reasonably possible using these said maps.For purposes of defining property lines,the '^ t' assessor's for c h erl number and parcel maps are used.Any errors in the assessors data may affect the determination procedures and JCP will not be :r .. Our determination for Mello Roos Special Tax Assessments was made using a proprietary third-party database of Community.Facilities Districts CFD P 9 P P ry, P rtY ty ( ) re' that have issued bonds as the method to pay for facilities.Only CFD's which levied a tax against the subject property in the previous tax year are :. disclosed.CFD information may not be available if the property is in foreclosure for delinquent or non-payment of a Mello-Roos Assessment. _z JCP cannot be held responsible for not reporting these cases.The databases are deemed to be accurate based on information supplied by bond issuers.Under no circumstances will JCP Geologists be responsible for errors in the data supplied by bond issuers and suppliers of the tax r _2,° databases.Information is up-dated on a yearly basis as soon as reasonably possible after updated information is released. r . No study of the assessor's or jurisdiction's files was made to determine the presence of any other tax or assessment which may exist for the - ..y property.Other types of"special assessments"likely exist that are not Mello-Roos Assessments.This JCP report is for disclosure only and is not intended to provide any type of tax advice.JCP suggests that if any party to this transaction has any concerns or questions regarding Mello-Roos Community Facilities Districts,or 1915 Special Assessment Districts they contact an appropriate expert. . <�... Decisions by jurisdictions relative to required studies,reports,etc.may be made using the information disclosed in this report,as well as other information in their files and/or local ordinances and procedures.Additional information which maybe material to this transaction ma exist in other sources not used in this report;however,research of such possible sources or the information in such sources is beyond the scope o this report and will not be reported here.The disclosure information in this report cannot be construed as a substitute for geologic or engineering stud Po Po. Po 9 9 9 9• Y �'- nor that a city or county will not require such studies.No visual examination of the subject site was performed nor was a study of any jurisdiction's :. files or other sources made to determine the existence of any hazard which may exist on the site.This report is for the purpose of certain map-based, i Y > real estate transaction disclosures only and is not a substitute for the broker/agent property inspection.JCP performs services for the real estate `g a entlbroker,current owner,and buyer.This report is for the exclusive use of the contractual roes,their brokersta ents,and the current owner's sale 9 Y Po parties, g for which it was issued.Due to changes in tax districts,disclosure maps,laws and contractual parties, this report cannot be relied upon for other b" ro erties or for future transactions of the subject property. All parties should be aware that the Information is subject to change. P p 1 P PertY• P j { JCP is not responsible for advising parties of any changes that may occur after the date of this report.Upon request within six months " of issuing this report,JCP will update the report for no additional charge for the same transaction. a All representations regarding earthquake safety,water heater bracing,and title insurance presented in this report are provided for the buyer's convenience by the seller(s)or agentof the subject property.JCP has not validated this information and takes no responsibility for its accuracy. t' If any party to this transaction has concerns relative to the stability or condition of the property or if"red flags"are observed during Y P rty' P 9i9 appropriate Y P P an a s Inspection,we suggest an a ro riate consultant be retained to stud the site and render a professional opinion.This =a; report is provided for the singe property for which it was issued as of the date of this report,and has been prepared for the exclusive O 9 O P Y property. 9 Y ;�. use of the current sellers,their a ant s,and potential buyers of this The findings are not intended for use b other parties and may not contain sufficient information for the purposes of other parties or other uses.Our professional services are performed using a degree of care and skill ordinarily exercised under similar circumstances by reputable consultants practicing in this field at this time. No other warranty,expressed or Implied,is made as to the professional advice presented in this report. =•s= Page 8 of 8 All sections copyrighted 1976-2003 JCP Geologists 321 Warren Avenue Fremont CA 9=1539 800.743•.5233 ­_orts`cDicp-inc.com w:AYwJcpreports.com 0 2003 Report Date: - "21/2003 .JCPGeolo lsts V711- 9 Report Number: 2003041800063 —nV" A Division of ASS Consul!ing Commercial EnviroCheCkTM Commercial EnviroCheck Report TM Transaction Screening Analysis Subject Property 438. Main St, Huntington Beach, CA 9.2648-5132 This records research is prepared according to the government records inquiry guidelines determined by ASTM International. This report is limited to an electronic search of certain federal and state level record systems for properties that lie within the search radius distances stated below. Please see the Terms and Conditions Section for additional information on the preparation and limitations of this screening-level report. } Subject Property Determination An exact match for the subject property address as listed above was NOT found in the records searched for this report. Refer to the lists beginning on page 3 for any site addresses that may be similar to the subject property address. Errors or omissions in addresses as listed in the government records can result in a site not being found. Environmental Risk Screening Summary O ;mile to 118;;to 1/2 to. DATABASE , SEARCHED'(Officiat.ustDesignation) ;:.Contaminated 1/8- mile;-_ 112 :mile 1 mile; State List of Underground Storage Tanks (UST) 4 9 4 State List of Aboveground Storage Tanks (AST) 0 0 O/S State List of Leaking Underground Storage Tanks (LUSTIS) YES 0 9 O/S Solid Waste Landfill Facilities (SWIS) MAYBE 0 0 O/S Federal National Priorities List or"Superfund" sites (NPL) YES 0 0 0 State Equivalent of National Priorities List (AWP) YES 0 0 0 Treatment, Storage & Disposal Sites for Hazardous Materials (RCRA TSD) 0 0 O/S *` Potential Generator of hazardous materials Sites (RCRA GEN) 1 3 O/S Corrective Action Sites, sites with known contamination (RCRA COR) YES 0 0 0 Federal Sites investigated for possible inclusion in the NPL (CERCLIS) MAYBE 0 0 O/S ' State Equivalent of Federal CERCLIS sites (CALSITE) MAYBE 0 0 O/S O/S Out of Required ASTM Search Radius - "MAYBE" means that contamination is pos- ASTM TOTALS 5 21 4 " sible because, for example, .the database CONTAMINATED SITE TOTALS 0 9 ': 0 searched includes a mix of contaminated and non-contaminated sites that are not ' TOTAL OF SITES FOUND 30 ' distinguished, or landfill sites where conta- mination is common although not certainly identified, or sites currently being investigated for contamination by the responsible agency. r BUYER(S) ACKNOWLEDGEMENT I have read this JCP Commercial EnviroCheck Report prior to signing and have received a copy of this report. ,.<„>.., Buyer Date ` Buyer Date Page 1 JCS' Geologists 321 Warren Free_^; C1 2 j�. .5'� repor s@@ cC:-"_-.com vAvv..,cpreporis.co�". }_ JCPGeo1OgiSLZ; Report Date: 04/21/2003 1 Dr:isi of ABS Consulting Report Number: 2003041800063 i JCP Commercial EnviroCheck ReportTM Subject Property 438 Main St, Huntington Beach ..W ations . . View of Listed Site Loc •4 �= I hia 17- na\Cir CO 1�londra-Drm s �= .-K I Ye 1 6 4 s !� '�8`lve ,r �btide Cir f l r `}`�i r0 h.' N -Bacon Lf1BE b - ��' r • =i 1. GOral ' Mary.(`if I Evel n Cir � T a Neptune;.DF_ ��C?.S - • .� � 913�� { Cherry Hill Rd Q o f' r C Subject Property o 1is 12 1 mile ♦ (LUSTIS)Leaking Underground Storage Tanks' (UST)Underground Storage Tanks QQ (NPL) Federal National Priorities List or"Superfund°sites 0 (AST)Above ground Storage Tanks �. (CERCLIS) Federal Sites investigated for possible inclusion in the NPL" (SWIS)Solid Waste Landfill Facilities' ❑ (RCRA TSD)Treatment,Storage&Disposal Sites for Hazardous Materials' © (AWP)State Equivalent of NPL ® (RCRA GEN) Potential Generator of hazardous materials Sites ' + (CALSITE)State Equivalent of (RCRA COR)Corrective Action Sites,sites with known contamination Federal CERCLIS sites' t 'Sites that exist outside of the ASTM search radius listed on the previous page are not shown on this map. ----- = ----__.�-__--__Page-2 JCP Geologists 321 % Iarren Avenue Fremont CA '-_-�- 39 300.71=_._233 reports@jcp-inc.com www.jcpreports.com Q 2003 JCPGeologists a Report mate: 04/21/2003 E ` A Division of ABS Consul!ing Report Number: 2003041800063 JCP Commercial EnviroCheck Repo rTMrt Subject Property 438 Main St, Huntington Beach, CA 92648-5132 Sources of Known and L Potential ContaminationFound on the Databases -d i i N/P = Not Provided on list used N/A = Not Applicable -currently uncontaminated site listed as using or storing hazardous substances Active = Site undergoing clean-up or investigation Closed = Clean-up completed LUSTIS 1 HUNTINGTON BEACH, CI 301 MAIN ST HUNTINGTON BEAC 92648 CLOSED LUSTIS 755 ft. _ 2 HUNTINGTON BEACH POS 316 OLIVE ST HUNTINGTON BEAC 92648 CLOSED LUSTIS 765 ft. 3 OLD LAKE FIRE STATIO 704 LAKE ST HUNTINGTON BEAC 92648 CLOSED LUSTIS 938 ft. 4 ABC PROPERTIES 122 MAIN ST HUNTINGTON BEAC 92648 ACTIVE LUSTIS 1473 ft. t £ 5 TERRY BUICK 122 5TH ST HUNTINGTON BEAC 92648 CLOSED LUSTIS 1487 ft. `r 6 WIND AND SEA SURFBOA 520 PACIFIC COAST HWY HUNTINGTON BEAC 92648 CLOSED LUSTIS 1694 ft. 7 JAVA JUNGLE 602 PACIFIC COAST HWY HUNTINGTON BEAC 92649 ACTIVE LUSTIS 1770 ft. 8 SAV-MOR OIL CO 620 OCEAN AVE HUNTINGTON BEAC 92648 CLOSED LUSTIS 1788 ft. 9 CITY OF HUNTINGTON B 44 HUNTINGTON ST HUNTINGTON BEAC 92646 CLOSED LUSTIS 2280 ft. RCRAGEN 1 CONTINENTAL 1 HOUR C . 411 MAIN ST HUNTINGTON BEAC 92648. N/A RCRAGEN 19.6 ft. - 2 WEST COAST AUTO PAIN 303 3RD.ST HUNTINGTON BEAC 92648 N/A RCRAGEN 746 ft. rY: 3 HUNTINGTON AUTO SVC 610 MAIN HUNTINGTON BEAC 92648 NIA RCRAGEN 811 ft. 4 PRISTINE PORSCHE 225 5TH ST HUNTINGTON BEAC 92648 N/A RCRAGEN 893 ft. UST ram' 1 & Z IMPORT MOTORS 410 MAIN ST HUNTINGTON BEAC 92648 UST 296 ft. _ 2 TY OF HUNTINGTON B 424 MAIN ST HUNTINGTON BEAC 92648 UST 301 ft. cz. 3 TY OF HUNTINGTON B 301 MAIN ST HUNTINGTON BEAC 92648 UST 608 ft. • 4 KE FIRE STATION 530 LAKE ST HUNTINGTON BEAC 92648 UST 614 ft. 5 S POSTAL SERVICE 316 OLIVE AVE HUNTINGTON BEAC 92648 UST 719 ft. .: 6 GERMAN CAR 303 3RD ST HUNTINGTON BEAC 92648 UST 746 ft. 7 T E HUNTINGTON BEA 602 MAIN ST HUNTINGTON BEAC 92648 UST 754 ft. r,F 8 D LAKE FIRE STATIO 704 LAKE ST HUNTINGTON BEAC 92648 UST 1053 ft. 9 RRY BUICK INC 122 5TH ST HUNTINGTON BEAC 92648 UST 1289 ft. z` 10 ND & SEA SURFBORAD 520 PACIFIC COAST HWY HUNTINGTON BEAC 92648 UST 1483 ft. - 11 VA JUNGLE 602 PACIFIC COAST HWY HUNTINGTON BEAC 92648 UST 1538 ft. 12 EVRON 706 PACIFIC COAST HWY HUNTINGTON BEAC 92648 UST 1627 ft. 13 NTINGTON BEACH MNT, 44 HUNTINGTON ST HUNTINGTON BEAC 92648 UST 2439 ft. 14 RY KERR 503 JOLIET AVE. HUNTINGTON BEAC . 92648 UST 2813 ft. i " 15 NTINGTON BCH CITY 770 17TH ST HUNTINGTON BEAC 92648 UST 4108 ft. 16 ATE LANDS COMMISSI 1700 PACIFIC COAST HWY HUNTINGTON BEAC 92648 UST 4242 ft. ' cr 17 ERS PLUMBING 222 E ADAMS AVE HUNTINGTON BEAC 92648 UST 4299 ft. Page 3 JCP Geologists 321 \A'arren Avenue Fremont CA 94539 800.7a.8.5233 reports@1cp-inc.cc-- -preports.com -- JCPGeologis,. A Division of ABS Consulting Report Date: 04/21/2003 Report Number: 2003041800063 JCP Commercial EnviroCheck Report TM Subject Property 438 Main St, Huntington Beach, CA 92648-5132 Sites Missing Key Location Information N/P = Not Provided on list used N/A = Not Applicable-currently uncontaminated site listed as using or storing hazardous substances Active = Site undergoing clean-up or investigation Closed = Clean-up completed A limited number of listed sites contain address information that is inaccurate, incorrect, or is missing key information necessary to locate the site with confidence using the geocoding methods used in this report.These sites are reported in the generalized list below for your review based on their possible existence in proximity to the subject site. Sites in this section are not necessarily within a one mile search radius of the subject property and are not included on the map in this report. We are providing this list for general information only. -"s,� .s r- - ",R—.`Fc -' - ':y - +[�'��-�''+t'.tlh�.Y•"_ - Sile�Namenz", � Addresses *? -sStafus ��DtAbaseDAtsSOUICe Y. wt.. �'3r�i'J...'�. �i-• .�'.S'�b..�z=�._z .`•[A, 3i��.'.+.. �fp<� 1-• 643 GEERS PLUMBING 222 ADAMS AVE Huntington Beac 92648 LUSTIS Unlocated ?' HAS9KS FIELD NW CORNER OF GOTHARD && Huntington Beac 92648 PROPERTY/SITE Unlocated OCEAN VIEW MUSHROOM 18196 GOLDEN WEST Huntington Beac. 92648 UST Unlocated SHELL WESTERN E & P, 21ST ST Huntington Beac 92648 LUSTIS Unlocated ROGER'S CABLE COMPAN PACIFIC COAST HWY Huntington Beac 92648 LUSTIS Unlocated r MCCALLEN PARK DEVELO HUNTINGTON ST Huntington Beac 92648 LUSTIS Unlocated r - - ------- --- - — -- - Page 4 JCP Geologists 321 Warren Avenue Fremont CA 94539 800.748. % ? -=ports@jcp-inc.com wvvw.jcpreports.com 0 2003 r .. JCPGeolo ists __,�,— 9 Report ..ate: 04/21/2003 -.:.� A Dior; _n a`A=S Coa; lting Report Number: 2003041800063 TM JCP Commercial EnviroCheck Report Subject Property 438 Main St, Huntington Beach, CA 92648-5132 listedContact and source information for sites in this report LIST sites are selected from the list maintained by the State Water Resources Control Board. Information regarding the contents of the tank,and any inspections or testing can be found on the web page www.geotracker.swrcb.ca.gov. Information on AST sites can be obtained by contacting the State's Aboveground Petroleum Storage unit at(916)341-5671. Sites that have been identified as having a leak may also appear on one or more of the other lists reported above.Sites listed on LUSTIS or RCRACOR may not appear on the UST or AST lists if the tank has been removed and the case has been closed.Sites listed on the SWIS list may contain hazardous materials. Information is available at www.ciwmb.ca.gov/swis. NPL sites are listed by the U.S. EPA as contaminated sites that have received Federal funding to assist in cleanup. Information is available from the State at www.dtsc. ca.gov or from www.epa.gov and by calling(916)323-3399.The CERCLIS list includes sites the Federal EPA is investigating for i possible inclusion on the NPL.The AWP is the State's equivalent of.NPL.CALSITE is the State's equivalent of CERCLIS. For additional information on the lists searched for this report, see JCP's web site at www.jcpreports.com/htmUarticles/envirolists.htmi. Terms and Conditions i REPORT-Any use of this report is considered an understanding of and agreement to abide by these Terms and Conditions. rt This JCP Commercial EnviroCheclZm reportprovides a radius-screening and summary tabulation of hazardous materials storage, contamination,and clean-upsites in the vicinity of a subject roe " ty �Trn f property rty as identified from certain government agency Government maintained lists.The JCP Commercial EnviroChec Report is produced in accordance with the ASTM International Records Research guidelines as set forth in E1528-00.A site inspection is not conducted for this report, nor is there a review of historical use data such as aerial photographs,Sanborn maps, local permits, or other records. Note that the level of information will vary =_^ between contaminated sites and certain information may not be available for all sites.Additional information may exist that is not r ; included in the sources used to create this report. Research into other sources beyond those identified is beyond the scope of _. this report. Interested parties are directed to investigate other sources if additional information is desired. 4 The contaminated site lists used may contain errors or omissions made by the official agencies responsible for maintaining `_ these lists.JCP will not be liable for any such errors.The lists used in this report are updated at various intervals with some being updated on an irregular basis. Update schedules are determined by the agency responsible for maintaining the list and are subject to change without notice. For those lists maintained on a"continuous update as needed"type schedule, JCP updates on a quarterly schedule.All parties should be aware that the lists are subject to change at any time.Therefore, 4= ' Na. -. the sites identified for a property can change as the lists do.JCP is not responsible for advising parties of any changes that may occur after the date of this report.This report is for use for the single property in the single transaction process for which it was issued. Due to changing information, laws and contractual parties,this report cannot be relied upon for other properties or future transactions of the subject property. JCP shall not be liable to anyone who may claim any right through his relationship with the agent except when acts or omissions are due to willful misconduct or negligence by JCP. y This determination has been made using digital address geocoding and GIS mapping system,therefore,this electronic3> determination incorporates some degree of uncertainty. Locations are not field checked.The accuracy of geographic locations will reflect any errors in the address provided and JCP will not be liable for such errors. Some sites from the lists could not be located b the methods used in preparing this report due to poor or inadequate address information. In these cases, Y P P 9 P P q the sites could not be included as being "within"or"not within"the search radius around the subject property.A list of such =• sites is included in this report. JCP does not make any representations as to the accuracy,validity or completeness of any of these lists nor.to the significance or extent of the contamination on any of the sites identified on the lists.We do not make any representations as to the health hazards to humans or animals that may be associated with any of the substances that may exist at the sites disclosed in this report or how the may or may not affect the subject roe This report does not address the drinking water sources for the p Y Y Y 1 property.rtY• P 9 subject property. JCP did not perform a visual examination of the subject property or any of the sites identified in this report.This report does not Y;<= address hazardous substances, if any, that may exist on the subject property unless the property is on one of the lists used.This =' report is not a substitute for an on-site environmental assessment. NOTE:This is a limited scope report designed for preliminary screening only. Additional contaminated sites may exist that are not a: listed on the sources used in this report. If any party to this transaction has any actual knowledge of contamination at the subject ` property, that information must be disclosed in addition to this report. We recommend that if any party to this transaction has concerns,they contact the agency noted for additional information and appropriate experts as necessary. - >�a • INDEPENDENT CONTRACTOR -In performance of the services, hereunder, it is agreed that JCP is and shall be and remain at all times an independent contractor and neither JCP nor any of its officers, employees, servants, agents or sub-contractors shall - be or act as the employee, servant or agent of any other party hereto in its performance of any of the terms and conditions hereof. LIABILITY -The Client or his assignee or successor in interest agrees to indemnify and hold harmless JCP from and against any and all claims,demands, lawsuits or actions for damages, including legal fees to persons and/or property tangible, JCP Geologists = Frcm_ .. CA t-0;339 S00. -3.523 _ - ^'c; _.__ _oorts.com _ !Z- JCPGeologiSLS k-_aort Date: 04/21/2003 7%�--_ A Givisian o;ABS Co.�sulting r- Report Number: 2003041800063 JCP Commercial EnviroCheck Report TM � Subject Propert=438Maint, Huntington Beach, CA 92648-5132 Terms and Conditions Continued intangible or otherwise which may be brought against JCP incidental to,arising out of or in connection with the work to be done, services to be performed or material to be furnished hereunder except for those claims caused solely and completely by the negligence of JCP, its directors, officers, employees, agent or subcontractors. In the event JCP is proven negligent in any respect, the liability of JCP, its agents, employees and subcontractors,for Client's claims of loss, injury,death or damage, including,without limitation, Client's claims for contribution and indemnification with respect to third party claims, shall not exceed: (1)The greater of the total sum of$100,000 or twice the sum actually paid JCP for services alleged to be misperformed,deficient or omitted; (2)The total sum of$1,000,000 for injury,loss or damage caused by negligence,or other causes for which JCP has any legal liability,other than as described in item(1). Client shall save, defend and hold JCP harmless against any claims in excess of the limits set forth above. CONSEQUENTIAL DAMAGES -In no event shall either JCP or Client be liable for consequential damages,including without limitation, loss of use or loss of profits, incurred by one another or their subsidiaries or successors, regardless of whether - ' such claim is based upon alleged breach of contract,willful misconduct, or negligent act or omission,whether professional `= or non-professional,of either of them or their employees, agents or subcontractors. = DISPUTES -JCP and the Client will make every effort to settle any dispute amicably. In the event an amicable resolution rrt is not achieved,any and all differences and disputes of whatsoever nature arising out of this Agreement shall be put to 4"`t arbitration in the City of Fremont,CA pursuant to the laws relating to arbitration there in force,before a board of three arbitrators. Arbitrators shall be selected one person by the Client,one by JCP and the third by the two arbitrators T previously selected. The decision of any two of the three on any point or points shall be final. Until such time as the arbitrators finally close the hearings, either party shall have the right by written notice served on the arbitrators and on an officer of the other party to specify disputes or differences under this Agreement for hearing and determination. The arbitration is to be conducted in accordance with such rules and procedures as maybe selected by the.:arbitrators.The. arbitrators may grant any relief other than punitive damages which they,or a majority of them deem just and equitable and within the scope of the agreement of the parties,.including,but not limited to,specific performance. Awards made pursuant y to this clause may include costs including a reasonable allowance for attorney's fees and judgment may be entered upon any award made hereunder in any court having jurisdiction. Both parties hereby mutually waive any and all claims to unitive damages in any forum. , . Client shall be required to notify JCP within thirty(30)days of the commencement of any arbitration between it and third parties which may concern JCP's work in connection with this Agreement and shall afford JCP an opportunity,at JCP's sole option,to participate in the arbitration. CONTROVERSIES -If upon completion of the services hereunder JCP is requested to assist the Client in any dispute between the Client and its suppliers,the Client will pay JCP any and all costs for the time JCP spends on such disputes as additional compensation ASSIGNMENT - In performance of this Agreement,JCP may at its discretion designate one or more subcontractors to perform all or any part of its duties hereunder. ENTIRE AGREEMENT-This Agreement entered into by and between JCP and the Client,constitutes the entire tr i Agreement between the parties. None of the Terms and Conditions contained herein may be added to,modified,superseded or otherwise altered except by written instrument signed by an authorized representative of JCP and the Client. TIME BAR TO LEGAL ACTION -Any statutes of limitation notwithstanding, Client expressly agrees that its right to bring or to assert against JCP any and all claims,demands,or proceedings whether in arbitration or otherwise,shall be waived unless(a)notice is received by JCP within thirty(30)days after the Client had notice of or should reasonably have been expected to have had notice of the basis for such claims;and(b)arbitration or legal proceedings, if any, based on such q claims or demands of whatever nature are commenced within one 1( )year of the date of such notice to JCP. NON-WAIVER -No waiver by either party of any breach of any of the terms of this Agreement shall be construed as a waiver of any subsequent breach,whether of the same or of any other term thereof. No delay or omission on the part of JCP in exercising any right or remedy under this Agreement,shall impair that right or remedy or operate as or be taken to be a waiver of it, nor shall any single,partial or defective exercise by JCP of any such right or remedy,preclude any other or further exercise under this Agreement,or that or any other right or remedy. The remedies provided in this Agreement are cumulative and are not exclusive of any remedies provided by law. SEVERANCE - If at any time,any of the provisions of this Agreement, is or becomes illegal, invalid or unenforceable, J� in any respect under any law or regulation of any jurisdiction, neither the legality,validity and enforceability of the remaining provisions of this Agreement nor the legality,validity and enforceability of such provisions under the law of any other jurisdiction, -* shall be in any way affected or impaired,as a result. GOVERNING LAW -The validity, interpretation and performance of this Agreement shall be governed by the Laws of the State of California. JCP Geologists 321 VVarren Avenue Fremont CA. 94539 800.748.5_33 re port J�ICp-nc.com www.jcpr_.--r•s.com 02003 r • #' I� City of Huntington Beach ' 2000 MAIN STREET CALIFORNIA92648 k DEPARTMENT OF ECONOMIC DEVELOPMENT Director 714/536-5582 Redevelopment 714/536-5582 FAX 714/375-5087 Housing 714/536-5542 HAND DELIVERED April 18, 2003 Maricel Borras First American Title 1 First American Way Santa Ana, CA 92701 TRANSMITTAL: ORIGINAL AGREEMENT&ESCROW INSTRUCTIONS FOR 438 MAIN STREET, HUNTINGTON BEACH Transmitted herein are the original agreement and escrow instructions for the sale of 438 Main Street, Huntington Beach, CA(APN 024-134-02). Upon the close of escrow this original document needs to be returned to the City Clerk's Office at 2000 Main Street, Huntington Beach, CA 92648. Should you have any questions,please call me at (714) 536-5224. Sincerely, C � Carol A. Runzel Assistant Project Manager cc: Connie Brockway, City Clerk Clay Martin, Director of Administrative Services ORIGINAL ` STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) American Industrial Real Estate Association March 24, 2003 (Date for Reference Purposes) 1. Buyer. 1.1 LGB Investments ("Buyer") hereby offers to purchase the real property, hereinafter described, from the owner thereof("Seller")(collectively, the "Parties"or individually, a "Party"), through an escrow("Escrow")to close on on or before the sixtieth (60th) day from the date of agreement ("Expected Closing Date")to be held by First American Title ("Escrow Holder") whose address is 1 First American Way, Santa Ana, CA 92101 Phone No. (714) 8 0 0—4 7 32 Facsimile No. upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that is the subject of this offer consists of(insert a brief physical description)an approximate 4, 250—square—foot office building situated on an approximately 5, 875—square—foot parcel of land is located in the City of Huntington Beach County of Orange State of California -,is commonly known by the street address of 4 38 Main Street and is legally described as: to be provided through escrow (APN: 024-134-02 ). 2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer, the permanent improvements thereon, including those items which the pursuant to applicable law are a part of the property,as well as the following items,if any,owned by Seller and at present located on the Property:electrical distribution systems (power panel, bus ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks and connections only); space heaters; heating, ventilating, air conditioning equipment ("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings; and (collectively,the"Improvements"). 2.4 The fire sprinkler monitor:❑is owned by Seller and included in the Purchase Price,or❑ is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided in Paragraph 2.3,the Purchase Price does not include Seller's personal property,furniture and furnishings,and 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be $950, 000.00 ,payable as follows: (a) Cash down payment,including the Deposit as defined in paragraph 4.3(or if an all cash transaction,the Purchase Price): $2 8 5, 0 0 0.0 0 (Strike if not applicable) (b) Amount of"New Loan"as defined in paragraph 5.1,if any: $665, 000.00 Closft ef appraxlmatel, $ Said sirct AIotA IS P%Qbke at$ POF MORth �Swkg it not iRGILJ146A9 Interest at the rate of 06--pe ;p pacabis) :ntire unpaid balanso is due on Y.. Gesing of approximately $ Said Seeond Alote is pa,able at$ per MoRih. 0 entire unpaid balance is dus.en ` (Swka ig not (d) Buyer rh211 give SalleF 2 deed of Wis,(2112wr-chaee Money Deed a!Trust")OR the '"Rurohaso Money.Noto=; ^'• $ Total Purchase Price: $950, 000.00 3.2 If Buyer is taking title to the Property subject to, or assuming, and Existing Deed of Trust and such deed of trust permits the beneficiary to demand payment of fees including, but not limited to, points, processing fees, and appraisal fees as a cogdition_tg,.bp transfer of the Pro rty, Buyer AP VED AS TO FORM BR oGRAM,City Attomey /92 Initials Page 1 of 8 Initials 2000-American Industrial Real Estjp p� t y REVISED Form OFA-4-8100E r agrees to pay such fees up to a maximum of A of the unpaid principal balance of the applicable Ea.-..ng Note. 4. Deposits. 4.1 ❑ Buyer has delivered to Broker a check in the sum of$ payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,or 0 Buyer shall deliver to Escrow Holder a check in the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited into the Escrow's trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer, be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed In paragraph 9.1 (a)through (k)are approved or waived, Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collectively the "Deposit"), in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable instrument is redeemed prior to its specified maturity. Buyer's Federal Tax Identification Number is . NOTE:Such interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. 5. Financing Contingency.(Strike if not applicable) 5.1 This offer is contingent upon Buyer obtaining from an insurance company,financial institution or other lender, a commitment to lend to Buyer a sum equal to at least 70 %of the Purchase Price, at terms reasonably acceptable to Buyer. Such loan ("New Loan")shall be secured by a first trust or mortgage on the Property. If this Agreement provides for Seller to carry back junior financing,then Seller shall have the right to approve the terms of the New Loan. Seller shall have 7 days from receipt of the commitment setting forth the proposed terms of the New Loan to approve or disapprove of such proposed terms. If Seller fails to notify Escrow Holder,in writing,of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan. 5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan, If Buyer shall fail to notify its Broker, Escrow Holder and Seller, In writing within 30 days following the Date of Agreement,that the New Loan has not been obtained, it shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan contingency. 5.3 If, after due diligence, Buyer shall notify its Broker, Escrow Holder and Seller, in writing,within the time specified in paragraph 5.2 hereof, that Buyer has not obtained said New Loan, this Agreement shall be terminated, and Buyer shall be entitled to the prompt return of the Deposit, plus any interest earned thereon,less only Escrow Holder and Title Company cancellation fees and costs,which Buyer shall pay. 0 AgFeemoRt 0 shall ke payable with Fespe't+0 aRy payms;it of p4AripW Wows' QF oths;GhiaFgas Agt made-witl;4" days afte;ifac-dwe, Siallogs behalf 2 Faquest fQF Aetice --AIGF sale with wqwd to 92Gh rAc4gage oF dead of W ict to AAUGh etwill 1;�� 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties (check the applicable boxes): 0 Lee & Associates - Newport Beach, Inc. represents Seller exclusively("Seiler's Broker"); 0 Lifestyle Homes represents Buyer exclusively("Buyer's Brokee');or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement. See paragraph 24 for disclosures regarding the nature of a real estate agency relationship. Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person,firm,broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1,and no broker or other person,firm or entity,other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify,defend,protect and hold the other harmless from and against any costs, expenses or liabliity for compensation, commission or charges which may be claimed by any broker, finder or other similar party, other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller, this Agreement, Including any counter-offers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located,Including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder Is located, the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by record' general tM VED AS TO FORM G R M�3RATH,City Attorney Initials Page 2 of 8 Initials 2000-American industrial Real Estate Association REVISED Y Lwnie mulwW3121 10 Form OFA-4-8/OOE warranty deed (a grant deed In California)and me other documents required to be recorded, and by oisbursing the funds and documents in accordance with this Agreement. 8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes.Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing.The matters contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (1), (n),and (o), 9.4, 9.5, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as defined in paragraph 9.2, then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty in this Agreement. In the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing;provided,however,that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Seller's breach or default, then at Seller's request, and as a condition to the return of Buyer's deposit, Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports,maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property. Provided, however, that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER,IN WRITING,OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT.Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction of the condition Imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (1) the pre-printed time periods shall control unless a different number of days is inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See American Industrial Real Estate Association ("AIR") standard form entitled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property,duly executed by or on behalf of Seiler in the current form or equivalent to that published by the AIR within 10 ec_days following the Date of Agreement. Buyer has 30 days from the date of agreement 1 disstosures.to approve or disapprove the matters disclosed. (b)Physical Inspection.Buyer has4G-or 30 days from the Date of Agreement,whiGheve; tatec,to satisfy itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report. Buyer has 30 or- days frocaipt et the Date of Agreemen whiGhevs;is to satisfy itself with regard to the environmental aspects of the Property. Seiler recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture,disposal or effect, render it subject to Federal,state or local regulation,investigation,remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d) Soil Inspection. Buyer has 30 ec- -;ays from the-ceseipt-ef the Date of Agreement.-wWGheueP-is later,to satisfy Itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (e) Governmental Approvals. Buyer has 30 Qw- days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property,including,but not limited to,permits and approvals required with respect to zoning,planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (f)Conditions of Title. Escrow Holder shall cause a current commitment for title insurance("Title Commitment")concerning the Property issued by the Title Company,as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10-ec.—�-d8 --days following the Date of Agreement. Buyer has 30=days from the wceipi of the Date of Agreement to satisfy itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance,which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation,at Seller's expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey. Buyer has 30 Qw- days from the Date of Agreement to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles• structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyers direction and expense. if Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10-er—days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collectively, "Existing Leases")affecting the Property, and with a tenancy statement ("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 30 40 days from the receipt of the Date of Agreement said-Existing to satisfy itself with regard to the Existing Leases and any other tenancy issues. (i)Other Agreements. Seller shall within 10 ems--days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 304"ays from the Date of Agreement receipt-of 620d 9thoF Agmameatrrto satisfy itself with regard to such Agreements. 0) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency. ") t (1)Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has44-ec 3 0 days from the Date of Agreement to satisfy itself with regard to the title condition of such personal property. SJ&pR0VeWM fM UQIKbtain a UCC-1 V ny such JEN ER M RkTHP Ck Attorney Initials Page 3 of 8 By e MuIAW 312') )(a Initials 2000-American Industrial Real Estate Association REVISED Deputy City Attomey Form OFA-4-8100E report shall be paid for by Buyer. Seller shall r.,)vide Buyer copies of any liens or encumbrances affb_ng such personal property that it is awbre of within 10 0; days of the Date of Agreement. (m)Destruction, Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is$10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option,within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this transaction or to purchase the Property notwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this transaction, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified in writing, Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change in the status of the use, occupancy, tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p) Warranties. That each representation and warranty of Seller herein be true and correct as of the Closing. Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee. Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned,and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"), Seiler shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election"). Seller's failure to give to Buyer within such period,written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. If Seller elects,either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the election,within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item shall constitute Buyer's election to terminate this transaction. Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item,or(c)if Seller elects not to cure,the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and agrees that until such time as all Buyer's Contingencies have been satisfied or waived, Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) if applicable,the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (e)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h)If the Seller is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate tax service contract(at Buyer's expense), assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED.A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING:Any insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. 1-16 APEROVED AS TO FORM gaNR M M QtyAt omwInitials Page 4 of 8 Initials 2000-American Industrial Real Estate Association REVISED Form OFA-4-8/OOE 1 �(J 1 V4 Security Deposit.Security Deposits h.,d by Seller shall be given to Buyer as a credit to the ca.n required of Buyer at the Closing. 11.5 Post Closing Matters.Any Item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s),and in the event that a Beneficiary Statement as to the applicable Existing Note(s)discloses that the unpaid principal balance of such Existing Note(s)at the Closing will be more or less than the amount set forth in paragraph 3.1(c) hereof("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or Increased by the amount of such Existing Note Variation. 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years, and, are true, material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller.Seller is the owner of the Property and/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in Its present condition, ordinary wear and tear excepted. The HVAC, plumbing, elevators, loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks. Seller has no knowledge,except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d) Compliance. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations, codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty insurance company requiring any investigation, remediation, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (0 Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materialmens'lien rights concerning the Property. (h)Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seller prior to the Closing. 0) No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller is not the subject of a bankruptcy,insolvency or probate proceeding. (1)Personal Property.Seller has no knowledge that anyone will,at the Closing,have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated in this Agreement, Buyer is purchasing the Property in its existing condition and will, by the time called for herein, make or have waived all Inspections of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, inducements, promises, agreements, assurances, oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer teams that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then,and in that event, Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period,Buyer,and Its agents and representatives,shall have the right at reasonable times and subject to rights of tenants,to enter upon the Property for the purpose of making inspections and tests specified in this Agreement. No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work,including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,defend, protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'fees),damages,including those for injury to person or property,arising out of or relating to any such work or materials or the acts or omissions of Buyer,its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each,diligently and in good faith, undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents,reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding(Including arbitration)Involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party(as hereafter defined)in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered In a separate suit, whether or not such action or proceeding is pursued to decision or judgment.The term"Prevailing Party"shall Include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense.The attomeys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer is the defaulting party, payment of said Brokerage Fee is in -- --•additiomto-anyobilgationwlth°respecYto'liquldafed'or'otherdamages.`�- 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice,demand, request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally, by messenger or by mail, postage prepaid, to the address set forth in this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt(confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time,by notice in writing,designate a different address to which,or a different person or additional persons to whom,all communications are thereafter to be made. AP OVED AS TO FORM AX MER M��,City Attorney Initials Page 5 of 8 Initials 2000-American Industrial Real Estate Association REVISED Mlvi�3/, I Form OFA�.8100E 20. Duration of Offer. 20.1 if this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach, California on the date of April 8, 2003 it shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $20, 000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Bu tlals Seller Initials _FCC AKIM ED DAMAGES Bpi;for InlfiaJc SoNa-Jr�Walr 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each Incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located. 23.3 Time of Essence. Time is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures,is authorized and Instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized in paragraph 24.2. 24.2 When entering into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction,as follows: (a) Seller's Agent. A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following affirmative obligations:(1)To the Seller.A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller. (2)To the Buyer and the Seller. a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained fr the other APPROVED AS TO FORM J FIER MaG TH,City Attomey Initials Page 6 of 8 Initials 2000-American Industrial Real Estate Association REVISED By Laonie Mvlvil�ill Z� 1� Form OFA-4.8IOOE Deputy Chy ` Party which does not Involve the affirmative duties set forth above. (b)Buyer's Agent.A selling agent can,with a Buyer's consent,agree to act as agent for the Buyer only. In these situations,the agent is not the Seller's agent,even if by agreement the agent may receive compensation for services rendered,either in full or in part from the Seller.An agent acting only for a Buyer has the following affirmative obligations. (1)To the Buyer. A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2)To the Buyer and the Seller. a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer. (1)In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2. (2) In representing both Seller and Buyer, the agent may not without the express permission of the respective Party, disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. (3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seiler should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired,consult a competent professional. (d) Further Disclosures. Throughout this transaction Buyer and Seller may receive more than one disclosure, depending upon the number of agents assisting in the transaction.Buyer and Seller should each read its contents each time it is presented,considering the relationship between them and the real estate agent in this transaction and that disclosure. Brokers have no responsibility with respect to any default or breach hereof by either Party.The liability(including court costs and attorneys'fees), of any Broker with respect to any breach of duty, error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to identify to Brokers as"Confidential"any communication or information given Brokers that is considered by such Party to be confidential. 25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement.Whenever required by the context,the singular shall include the plural and vice versa. Unless otherwise specifically indicated to the contrary, the word "days"as used in this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,if any,are as follows or are attached hereto by an addendum consisting of paragraphs through (If there are no additional provisions write"NONE".) 29. Mineral Rights: Any oil, mineral rights, etc. shall be retained by Seller. 30. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: (a) Covenant requiring use of property to be consistent with Purposes Designated in. Redevelopment Plan; (b) Covenant as to Nondiscrimination and Nonsegregation; (c) Maintenance Covenant. Breach of any of the above covenants shall cause the property to revert to Seller. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR B ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION T RICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER' INTENDED USE. ARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEE O BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: Lifest 1 ome LGB Inves nts -- Attu: Margaret Van Herk By: Title: Date: Address: 16912 Warner Avenue, Suite 201 Name Printed: 62GS Huntington Beach, CA 92649 Title: _ Telephone: 714—9 6 9-1516 Telephone%Facsimmo ile: q— — (� Facsimile: Federal ID No. By: Date: Name Printed: Title: Address: Telephone/Facsimile: Federal ID No. APPROVED AS TO FORM TE �:MaC3RATH,City AttornayInitials Page 7 of 8 Initials 2000-American Industrial Real Estate Association REVISED nyll �' Form OFA-4-8/OOE 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement. In consideration of real estate brokerage service rendered by Brokers, Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 %, of the Purchase Price divided in such shares as said Brokers shall direct in writing. This Agreement shall serve as an irrevocable instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seiler at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Assoc' — ew ort Beach, Inc. City of Huntington Beach Redevelopment Aqenpvv Attn: Curt Stalder By: Title: Senior Vice President Date: Address: 3991 MacArthur Blvd. , #100 Name Printed, Catherine T. Greed+ Newport Beach, CA 92660 Title: Agency Chairperson (Vice) Telephone: 9 4 9—7 2 4—10 0 0 Telephone/Facsimile: Facsimile: 9 4 9—8 3 3—0 6 0 8 Federal ID No. By: �C=Sfi.aJ ci"t�' Date: /S 3 Name Printe : Connie Brockway Title: Agency Clerk Address: d?OpD 14W jy- Telephone/Facsi ile: ( 3 L —57AA7 F44:A7S/- Federal ID No. 7 These forms are often modified to meet changing requirements of law and needs of the Industry. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 90017.(213)687-8777. ®Copyright 2000-By American Industrial Real Estate Association. All rights reserved. No part of these works may be reproduced in any form without permission In writing. 5ta/der/LGB lnv ourch Agree Ap VED AS TO FORM F R M RATH,City Attorney _0.Mulvihill 31�1 l03 Deputy City Attorney Initials Page 8 of 8 Initials 2000-American Industrial Real Estate Association REVISED Form OFA-4-8/OOE Tice Notes Office of the City Clerk -= Huntington Beach, CaCifornia �3 y—is-- 03 4c f� v v ,C3 :. -s rr t. z STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) American Industrial Real Estate Association March 24, 2003 (Date for Reference Purposes) 1. Buyer. 1.1 LGB Investments ("Buyer") hereby offers to purchase the real property, hereinafter described, from the owner thereof("Seller")(collectively, the"Parties"or Individually, a "Party"), through an escrow("Escrow")to close on on or before the sixtieth (60th) day from the date of agreement ("Expected Closing Date") to be held by First American Title ("Escrow Holder") whose address is 1 First American Way, Santa Ana, CA 92101 Phone No. (714) 800-4732 Facsimile No. upon the terms and conditions set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement"as used herein shall be the date when by execution and delivery(as defined in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that is the subject of this offer consists of(insert a brief physical description)an approximate 4, 250-square-foot office building situated on an approximately 5, 875-square-foot parcel of land Is located in the City of Huntington Beach County of Orange State of: California Is commonly known by the street address of 4 38 Main Street and is legally described as: to be provided through escrow (APN: 024-134-02 ). 2.2 If the legal description of the Property is not complete or is inaccurate, this Agreement shall not be Invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ("Title Company"),which shall issue the title policy hereinafter described. 2.3 The Property Includes, at no additional cost to Buyer, the permanent improvements thereon, including those Items which the pursuant to applicable law are a part of the property,as well as the following items,if any,owned by Seller and at present located on the Property:electrical distribution systems (power panel, bus ducting, conduits, disconnects, lighting fixtures); telephone distribution systems (lines, jacks.and connections only); space heaters; heating, ventilating, air conditioning equipment("HVAC"); air lines; fire sprinkler systems; security and fire detection systems; carpets; window coverings; wall coverings; and (collectively,the"Improvements"). 2.4 The fire sprinkler monitor: ❑is owned by Seller and Included in the Purchase Price,or 13 is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. .2.5 Except as provided In Paragraph 2.3,the Purchase Price does not Include Seller's personal property,furniture and furnishings,and 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be $950, 000.00 payable as follows: (a) Cash down payment,Including the Deposit as defined in paragraph 4.3(or If an all cash transaction,the Purchase Price): $285, 000.00 (Strike if not applicable) (b) Amount of"New Loan"as defined in paragraph 5.1,if any: $665, 000.00 Clccing of apprc�ximatelr S 0 app!lCabla� --fire tjAp. ld 1—,�po 1�a..s,... Closing of approXimatelje 3 u MoRey We") Total Purchase Price: $950, 000.00 3.2 If Buyer is taking title to the Property subject to, or assuming,.and Existing Deed of Trust and such deed of trust permits the beneficiary to demand payment of fees including, but not limited to, points, processing fees, and appraisal fees as a cor)dition_to,bp transfad of the Pro rty, Buyer AP VED AS TO FORM ER *GRATH,City Attorney Initials M, l7-16 Page 1 of 8 Initials 2000-American Industrial Real EstfttrfIa19 % 1ey, REVISED Form OFA-4.8/OOE ,agrees to pay such fees up tb a maximum of 1.5%of the wlpaid principal balance of the applicable Existing Notc, 4. Deposits. 4.1 ❑ Buyer has delivered to Broker a check In the sum of$ payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,or 10 Buyer shall deliver to Escrow Holder a check In the sum of'$20,000.00 when both Parties have executed this Agreement and the executed Agreement.has been delivered to Escrow Holder. When cashed,the check shall be deposited Into the Escrow's trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's check or funds shall,upon request by Buyer, be promptly returned to Buyer.. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1 (a)through (k)are approved or waived, Buyer shall deposit.with Escrow Holder the additional sum of$ N/A to be applied to.the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collectively the "Deposit"), in a Slate.or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction. The Interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalties or interest forfeitures if the applicable Instrument is redeemed prior to Its specified maturity. Buyer's Federal Tax Identification Number Is .NOTE:Such interest bearing account cannot be opened until Buyer's Federal Tax Identification Number is provided. S. Financing Contingency..(Strike if not applicable) 5.1 This offer is contingent upon Buyer obtaining from an Insurance company, financial institution or other lender,a commitment to lend to Buyer a sum equal to at least 70 . %of the Purchase Price, at terms reasonably acceptable to Buyer. Such loan ("New Loan")shall be secured by a.first trust or mortgage on the Property:If this Agreement provides for Seller to carry back junior financing,then Seller shall have the right to approve the terms of the New Loan. Seller shall have 7 days from receipt of the commitment setting forth the proposed terms of the New Loan to approve or disapprove of such proposed terms.If Seller falls to notify Escrow Holder,in writing,of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan. 5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan. If Buyer shall fail to notify its Broker, Escrow Holder and Seller, in writing within 30 days following the Date of Agreement,that the New Loan has not been obtained,it shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan contingency. 5.3 If, after due diligence, Buyer shall notify Its Broker, Escrow Holder and Seller, in writing, within the time specified in paragraph 5.2 hereof, that Buyer has not obtained said New Loan, this Agreement shall be terminated, and Buyer shall be entitled to the prompt return of the Deposit, plus any Interest earned thereon,less only.Escrow Holder and Title Company cancellation fees and costs,which Buyer shall pay. 0 and D.,rn1 2r@ Mgpay Dead of Tr.m1 sliall be on 11:104404 ^1 AgreemeaL 0 days,attar-+c is due. 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): 0 Lee & Associates — Newport Beach, Inc. represents Seller exclusively("Seller's Broker"); O Lifestyle Homes represents Buyer exclusively("Buyer's Broker');or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that_Brokers are the procuring cause of this Agreement. See paragraph 24 for disclosures regarding the nature of a real estate agency relationship. Buyer shall use the services of Buyer's Broker exclusively in connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Seller each represent and warrant to the other that he/she/(t has had no dealings with any person,firm,broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1,and no broker or other person,firm or entity,other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnity,defend, protect and hold the other harmless from and against any costs, expenses or liability for compensation, commission or charges which may be claimed by any broker, finder or other similar party, other than said named Brokers by reason of any dealings or act of the indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,Including any counter-offers incorporated herein by the Parties, shall constitute not only the agreement of purchase and sale between Buyer and Seller, but also instructions to Escrow Holder for the consummation of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and practice of the community in which Escrow Holder is located,including any reporting requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail. 8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder shall close this escrow (the "Closing") by recordi general APIWVED AS TO FORM G LR jc�3RATH,City Attorney Initials Page 2 d 8 Initials 2000-American Industrial Real Estate Association REVISED y Leonia MulviW-3 —� l0 Form OFA-4-8/OOE Deputy City Att way 3 warranty deed (a grant deed in California)and the othE. ,;uments required to be recorded, and by disbursii a funds and documents in accordance with this Agreement. 8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes.Seller shall pay the premium for a standard coverage owner's or joint protection policy of title insurance. 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing.The matters contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 9.5, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the Parties only and are not instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency, as defined in paragraph 9.2, then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty in this Agreement. in the event of such termination, Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder, less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing; provided,however,that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instructions of the Parties, a Party not then in default under this Agreement may notify the other Party, Escrow Holder, and Brokers, in writing that, unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein, the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow is terminated for any reason other than Seller's breach or default, then at Seller's request, and as a condition to the return of Buyer's deposit, Buyer shall within 5 days after written request deliver to Seller,at no charge, copies of all surveys,engineering studies,soil reports,maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property. Provided, however, that Buyer shall not be required to deliver any such report if the written contract which Buyer entered into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER, iN WRITING,OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT.Buyer's conditional approval shall constitute disapproval, unless provision is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement. whichever is later, for the satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly provide all Parties with copies of any'written disapproval or conditional approval which it receives. With regard to subparagraphs (a) through (1) the pre-printed time periods shall control unless a different number of days is Inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See American Industrial Real Estate Association ("AIR") standard form entitled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property Information Sheet ("Property Information Sheet")concerning the Property,duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or- days following the Date of Agreement. Buyer has 30 daye from the date of agreement 1 disstesures.to approve or disapprove the matters disclosed. (b)Physical Inspection.Buyer has 10-er 30 days from the Date of Agreemen6-04Qhever-46 Late;,to satisfy itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report. Buyer has 30 ems--- days from-�ipt-ef 1hQ l2ropepty 1 ptGrmatiGA Shoot Gr the Date of Agreement to satisfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A "Hazardous Substance"for purposes of this Agreement is defined as any substance whose nature and/or quantity of existence, use, manufacture,disposal or effect, render it subject to Federal,state or local regulation,investigation, remediation or removal as potentially injurious to public health or welfare.A"Hazardous Substance Condition" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d) Soil Inspection. Buyer has 30 op- -:ays from the-;sseipt of the Date of AgreementrAvl isuaus" fate;,to satisfy itself with regard to the condition of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (e) Governmental Approvals. Buyer has 30 e;— days from the Date of Agreement to satisfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable in connection with its intended use of the Property,including,but not limited to,permits and approvals required with respect to zoning,planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (f)Conditions of Title. Escrow Holder shall cause a current commitment for title insurance("Title Commitment")concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment("Underlying Documents")to be delivered to Buyer within 10-or----days following the Date of Agreement. Buyer has 30 40 days from the re�@ips€the Date of Agreement Title to satisfy itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance,which by the terms of this Agreement is not to remain against the Property after the Closing, shall not be considered a failure of this contingency, as Seller shall have the obligation,at Seller's expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer has 30 e;,-days from the Date of Agreement FoGemp,of tho Title commitmept aAGi WpdorlyiAg DOGI IMOPIr to satisfy Itself with regard to any ALTA title supplement based upon a survey prepared to American Land Title Association ("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any Improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direction and expense. If Buyer has obtained a survey and approved the ALTA title supplement, Buyer may elect within the period allowed for Buyer's approval of a . survey to have an ALTA extended coverage owner's form of title policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10.sr--days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collectively, "Existing Leases")affecting the Property, and with a tenancy„statement ("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 30 4-0 days from the receipt of the Date of Agreement said-Pxistip ppol GaAafiG2 es to satisfy itself with regard to the Existing Leases and any other tenancy issues. (i)Other Agreements. Seller shall within 10 or days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will affect the Property after Closing. Buyer has 3044-days from the Date of Agreement receipt of said Gtlw9 A 9Fseu;eats-to satisfy itself with regard to such Agreements. Q) Financing. If paragraph 5 hereof dealing with a financing contingency has not been stricken, the satisfaction or waiver of such New Loan contingency. Q61bJ@Gi after the Glor,*Aq ErGpovx Woldep shall promptly roquest from the holdeFs of thQ EXictiAg NQtQG @ bQAQ9G*aFY&t2t@MQAt("AGRefirlwy St t (I)Personal Property. In the event that any personal property is Included in the Purchase Price, Buyer has IA Q 30 days from the Date of Agreement to satisfy itself with regard to the title condition of such personal property. SR tljj�6tSil btain a UCC-1 re ny such JEN ER M RATH,City Attorney Initials Page 3 of 8 $y nie Mulvihill �J)2-) I(� Initials 2000-American Industrial Real Estate Association REVISED Deputy City Attorney Form OFA-4-8/OOE repprt shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecting suci,,,ersonal property that it is aware of within 10 or days of the Date of Agreement. (m)Destruction, Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to, the Property or any portion thereof, from any cause whatsoever,which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is$10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the option,within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure, to either terminate this transaction or to purchase the Property notwithstanding such loss, but without deduction or.offset against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this transaction, Buyer shall be entitled to any insurance proceeds applicable to such loss. Unless otherwise notified.in writing, Escrow Holder shall assume no such destruction, damage or loss has occurred prior to Closing. (n)Material Change. Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change. "Material Change"shall mean a change in the status of the use,occupancy, tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing. Unless otherwise notified in writing, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p) Warranties. That each representation and warranty of Seller herein be,true and correct as of the Closing. Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee. Payment at the Closing of such brokerage fee as,is.specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"), Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date ("Seller's Election"). Seller's failure to give to Buyer within such period, written notice of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's Election not to cure such Disapproved Item. If Seller elects, either by written notice or failure to give written notice, not to cure a Disapproved Item, Buyer shall have the election,within 10 days after Seller's Election to either accept title to the Property subject to such Disapproved Item, or to terminate this transaction. Buyer's failure to notify Seller in writing of Buyer's election to accept title to the Property subject to the Disapproved Item shall constitute Buyer's election to terminate this transaction. UnIaGis expressly provided otherwirse herein, Seller's right to Gure shall pot apply to the remediallaR of Wax-ard-in SubstaRce Unless the Parties mutually instruct otherwise, if the time periods for the satisfaction of contingencies or for Seller's and Buyer's said Elections would expire on a date after the Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiration of: (a)the applicable contingency period(s),,(b)the period within which the Seller may elect to cure the Disapproved Item,or(c)if Seller elects not to cure,the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and,agrees that until such time as all Buyer's Contingencies have been satisfied or waived, Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto. The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d)If applicable, Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (e)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a "nonresident" within the meaning of California Revenue and Tax Code Section 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h)If the Seller is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder as immediately collectable funds, no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract(at Buyer's expense), assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessor's Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (e)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f) If the Buyer is a corporation, a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owner's form policy of title insurance effective as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring title to the Property vested in Buyer, subject only to the exceptions approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transaction, the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED.A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING:Any Insurance which Seller maintained will terminate on the Closing. Buyer Is advised to obtain approprlato Insuranco to cover the Property. 11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing.Notes, utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. ff.% dPFhTH, D AS TO FORM M ✓VL —City AttorneyInitials Page 4 of.8 Initials 2000-American Industrial Real Estate Association REVISED —7 Form OFA-4-8/OOE Deputy City Attome � / �3 11.4 Security Deposit.Security Deposits held by St. shall be given to Buyer as a credit to the cash requ. J Buyer at the Closing. 11.5 Post Closing Matters.Any Item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer Is purchasing the Property subject to an Existing Deed of Trust(s),and in the event that a Beneficiary Statement as to the applicable Existing Note(s)discloses that the unpaid principal balance of such Existing Note(s)at the Closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or Increased by an amount equal to such Existing Note Variation. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a)shall be reduced or Increased by the amount of such Existing Note Variation. . 11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph 5.1,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years, and, are true, material and relied upon by Buyer and Brokers in all respects.Seller hereby makes the following warranties and representations to Buyer and Brokers: (a)Authority of Seller.Seller is the owner of the Property and/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b) Maintenance During Escrow and Equipment Condition At Closing. Except as otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the Property until the Closing in Its present condition, ordinary wear and tear excepted. The HVAC, plumbing, elevators, loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in writing, of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. . (d) Compliance. Seller has no knowledge of any aspect or condition of the Property which violates applicable laws, rules, regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable govemmental agency or casualty Insurance company requiring any Investigation, remediation, repair, maintenance or Improvement be performed on the Property. (e) Changes In Agreements. Prior to the Closing, Seller will not violate or modify any Existing Lease or Other Agreement, or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Llens.There are no unsatisfied mechanics'or matedalmens'lien rights concerning the Property. (h)Actions, Suits or.Proceedings. Seller has no knowledge of any actions, suits or proceedings pending or threatened before any commission, board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (1) Notice of Changes. Seller will promptly notify Buyer and Brokers in-writing of any Material Change (see paragraph 9.1(n)) affecting the Property that becomes known to Seiler prior to the Closing. 0) No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller is not the subject of a bankruptcy,insolvency or probate proceeding. (1)Personal Property.Seller has no knowledge that anyone will,at the Closing,have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated in this Agreement,Buyer Is purchasing the Property In Its existing condition and will, by the time called for herein;make or have waived all Inspections of the Property Buyer believes are necessary to protect Its own Interest in, and Its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated in this Agreement, no representations, Inducements, promises, agreements, assurances, oral or written, conceming the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then,and In that event, Buyer waives any right that it may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at Its own risk. Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyer's Entry. At any time during the Escrow period,Buyer,and its agents and representatives,shall have the right at reasonable times and subject to rights of tenants,to enter upon the Property for the purpose of making Inspections and tests specified in this Agreement.No destructive testing shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in writing by Seller, Buyer shall return the Property to the condition it was in prior to such entry or work,including the recompaction or removal of any disrupted soil or material as Seller may reasonably direct.All such Inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,defend, protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attomeys'fees),damages,including those for injury to person or property,arising.out of or relating to any such work or materials or the acts or omissions of Buyer,Its agents or employees In connection therewith. 15. Further Documents and Assurances. The Parties shall each, diligently and in good faith,undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents,reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding (including arbitration)involving the Property whether founded in tort, contract or equity,or to declare rights hereunder, the Prevailing Party(as hereafter defined)In any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded In the same suit or recovered in a separate.suit, whether or not such action or proceeding Is pursued to decision or judgment.The term"Prevailing Party"shall Include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense.The attomeys'fees award shall not be computed In accordance with any court fee schedule,but shall be such as to fully reimburse all attorneys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer Is the defaulting party, payment of said Brokerage Fee-is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any notice,demand, request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail, postage prepaid, to the address set forth In this Agreement or by facsimile transmission. 19.2 Service of any such communication shall be deemed made on the date of actual receipt if personally delivered.Any such communication sent by regular mail shall be deemed given 48 hours after the same is mailed. Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed delivered upon telephonic confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mall. if such communication is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 19.3 Any Party.or Broker hereto may from time to time,by notice in writing,designate a different address to which, or a different person or additional persons to whom,all communications are thereafter to be made. AP OVED AS TO FORM BR Mci TH,City Attorney Initials Page 5 of 8 I� Initials 2000-American Industrial Real Estate Association REVISED. M� ]) Form OFA-4-8/OOE Doty City,Aktot,3121 I 20. Duration of Offer. 20.1 If this offer is not accepted by Seller on or before 5:00 P.M.according to the time standard applicable to the city of Huntington Beach, California on the date of April 8, 2003 It shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2,shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$20, 000.00 UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Bu tials Seller Initials " PROVIS=1 IS VOLUNTARY- WE WAVE READ AISID 1-11411-DERST.-AAlm T-WC FOREGGIISIG 'Wra MATTERS 8u;for.laltlals Sailor.aulals 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties. Paragraphs 21 and 22 are each Incorporated Into this Agreement only if Initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law.. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located. 23.3 Time of Essence. Time is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures,Is authorized and Instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement.. 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized.in paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers in this transaction,as follows: (a)Seller's Agent. A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following affirmative obligations: (1)To the Seller.A fiduciary duty of utmost care,integrity,honesty, and loyalty in dealings with the Seller.(2)To the Buyer and the Seller. a. Diligent exercise of reasonable skills and care In performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of, the Parties. An agent Is not obligated to reveal to either Party any confidential Information obtained fr the other APPROVED S TC I ORM MIFER Ci TH,City Attorney Initials Page 6 of 8 Initials 2000-American Industrial Real Estate Association REVISED Form OFA-4-8/OOE By L some M.14M Deputy City Attorney 7 • Party which does not Involve the affirmative duties s,__.,,rth above. (b)Buyer's Agent.A selling agent can,with a Buyer's consent,agree to act as agent for the Buyer only. In these situations, the agent Is not the Seller's agent,even if by agreement the agent may receive compensation for services rendered,either in full or in part from the Seller.An agent acting only for a Buyer has the following affirmative obligations. (1)To the Buyer.•A fiduciary duty of utmost care, Integrity, honesty, and loyalty in dealings with the Buyer. (2)To the Buyer and the Seller.a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not Involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer. (1)In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty In the dealings with.either Seller or the Buyer. b. Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2. (2) In representing both Seller and Buyer, the agent may not without the express permission of the respective Party, disclose I the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.(3)The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate.If legal or tax advice is desired,consult a competent professional. (d) Further Disclosures. Throughout this transaction Buyer and Seller.may receive more than one disclosure, depending upon the number of agents assisting In the transaction. Buyer and Seller should each read.its contents each time It is presented,considering the relationship between.them and the real estate agent in this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party:The liability(Including court costs and attorneys'fees),of any Broker with respect to any breach of duty,error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or information given Brokers that is considered by such Party to be confidential. 25. Construction of Agreement. In construing this Agreement, all headings and titles are for the convenience of the parties only and shall. not be considered a part of this Agreement.Whenever required by the context, the singular shall Include the plural and vice versa. Unless otherwise specifically Indicated to the contrary, the word "days"as used in this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,.but rather according to Its fair meaning as a whole,as if both parties had prepared it. 26 Additional Provisions: Additional provisions of this offer,if any,are as follows or are attached hereto by an addendum consisting of paragraphs through (If there are no additional provisions write"NONE".) 29. Mineral Rights: Any oil, mineral rights, etc. shall be retained by Seller. 30. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: (a) Covenant requiring use of property to be consistent with Purposes Designated in Redevelopment Plan; (b) Covenant as to Nondiscrimination and Nonsegregation; (c) Maintenance Covenant. Breach of any of the above covenants shall cause the property to revert to Seller. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR B ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION T RICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, TH INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER' INTENDED USE. WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEE O BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. BROKER: BUYER: Lifest 1 ome LGB Inves nts y Attn: Margaret Van Herk By: Title: Date: 3 Address: 16912 Warner: Avenue, Suite 201 Name Printed: S Huntington Beach, CA 92649 Title: Telephone: 714—9 6 9-1516 .Telephone/Facsimile: Facsimile: Federal ID No. By: :Date: Name Printed: Title: Address: Telephone/Facsimile: Federal ID No. APPROVED AS TO FORM �By $R MaC3RATH,City Attoruoy Initials Page 7 Of 8 Initials 2000-American Industrial Real Estate Association REVISED. a Mulvlbill Form OFA-4-8100E n�• r;ty Attorney r 21, 'Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth in this Agreement. In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 % of the Purchase Price divided in such shares.as said Brokers shall direct in writing. This Agreement shall serve as an Irrevocable Instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates —Newport Beach, Inc. . . City of Huntington Beach Redevelopment A en Attn: Curt Stalder By: Title: Senior Vice President Date: Address: 3991 MacArthur Blvd. , #100 : Name Printed• Catherine T. Greeij Newport Beach, CA 92660 Title: Agency Chairperson (Vice) Telephone: 9 4 9-7 2 4-10 00 Telephone/Facsimile: Facsimile: 94 9-833-0608 Federal ID No. By: 40" G( Date: 1$ 3 Name Printe : Connie Brockway Title: Agency Clerk Address: Telephone/Facsi ile: `7( S�L -5';4 7 04437 Federal ID No. These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Association,700 South Flower Street,Suite 600,Los Angeles,CA 80017.(213)e87.8777. ®Copyright 2000-By American Industrial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without permission In writing. 5ta/Aer/LGB Inv-Aurch Agree AP VED AS TO FORM F R M RATH,City Attorney Mtalvibill 3I2�lu3 Deputy City Attorney Initials Page 8 of 8 Initials 2000-American Industrial Real Estate Association REVISED . Form OFA-4-8/60E Council/Agency Meeting Held: Deferred/Continued to: G�6 )�Approved ❑ Conditionally Approved ❑ Denied City Clerk's Sign ure Council Meeting Date: April 7, 2003 Department ID Number: ED 03-04 CITY OF HUNTINGTON BEACH REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION { C o _ SUBMITTED TO: HONORABLE MAYOR/CHAIRMAN AND COUNCIL/ REDEVELOPMENT AGENCY MEMBERS ': SUBMITTED BY: RAY SILVER, City Administrator/Executive Directori� PREPARED BY: DAVID C. BIGGS, Director of Economic Development/Dleputy Executive Director CLAY MARTIN, Director of Administrative Services SUBJECT: CONDUCT JOINT PUBLIC HEARING AND APPROVE ALE OF PROPERTY AT 438 MAIN STREET J E:t,m,:,:tof Issue, Funding Source,Recommended Action,Alternative Action(s),Analysis, Environmental Status,Attachment(s) Statement of Issue: The Redevelopment Agency recently offered 438 Main Street for sale to the highest bidder. -A purchase offer has been accepted and the Redevelopment Agency is requested to approve the sale of 438 Main Street. Funding Source: Costs associated with concluding the sale will be funded from sales proceeds through escrow. The net proceeds of the sale will be revenue to the Redevelopment Agency. Recommended Action: Motion to: 1. Open, Conduct, and Close the Joint Public Hearing; and City Council 2. Adopt Resolution No. 2003- Approving the Sale of Property Located Within the Huntington Beach Redevelopment Project Area. Redevelopment Agency 3. Adopt Resolution No. Approving the Sale ofpevi ---tl�e— �. Property Located Within the Huntington Beach Redevelopment Project Area and Authorize the Mayor/Agency Chairperson and City/Agency Clerk to execute the Standard Offer, Agreement and Escrow Instructions with LGB Investments, a limited partnership, in the amount of$950,000. REQUEST FOR CUL1 NCI L/REDEVELOPMENT AGENCY ACTION MEETING DATE: April 7, 2003 DEPARTMENT ID NUMBER: ED 03-04 Alternative Action(s): 1. Reject the recommended purchaser and direct staff to notice a public hearing to consider sale of the property to the alternative purchaser; or 2. Reject all offers and direct Staff to continue to market the property for sale. Analysis: On August 19, 2002, the Redevelopment Agency rejected the bids which resulted from a prior offer to sell 438 Main Street and authorized the use of a commercial real estate broker in the sale of the property. Staff solicited proposals from commercial real estate firms and Lee & Associates was selected to market the property for sale. Lee & Associates began marketing the property in the last quarter of 2002. The first offer to purchase was received in January 2003 and was rejected based on the advice of the City Attorney's office. Subsequently, two additional offers were received and evaluated by staff. Staff recommends entering into a Standard Offer, Agreement and Escrow Instructions with LGB Investments, a limited partnership, the party who initially offered the highest purchase price of$950,000. The subject property was purchased by the Redevelopment Agency at a point in time when it was anticipated that the area in which this parcel is located would be a larger redevelopment site. However, the pattern of land use and private redevelopment activities, including the development of new homes in the area, has precluded this option. As such, it is appropriate to sell the property. Since the property was purchased by the Redevelopment Agency with tax increment funds for the purposes of redevelopment, the property must be sold in conformance with the provisions of the State Health & Safety Code which governs redevelopment agencies. There is a public hearing requirement for the lease or sale of property by a Redevelopment Agency. The notice of this public hearing was published in the Independent on March 20tn and March 27th, which meets the requirement for publication for not less than once a week for two weeks prior to the hearing. In addition, Staff has prepared a Summary Report on the proposed sale pursuant to Health & Safety Code Section 33433 which is attached and has been available to the public as of the date on which the legal notice first appeared. The property is being sold for $950,000, which is above the 2002 appraised value of $735,000, and is considered to be the fair market value given the offers to purchase received. For this transaction, a Standard Offer, Agreement and Escrow Instructions form is proposed as the form of contract which will govern the transaction. The Redevelopment Agency's special provisions regarding requirements that the property be used in conformance with the Redevelopment Plan and the legally required on-going covenants are set forth in the Grant Deed which will be used to convey the property to the purchaser. GADavid\RCAS\438main.doc -2- 3/27/2003 3:46 PM REQUEST FOR CuIJNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: April 7, 2003 DEPARTMENT ID NUMBER: ED 03-04 Under the terms of the Standard Offer, Agreement and Escrow Instructions, the purchaser will have 30 days to undertake its due diligence, after which time the purchasers $20,000 deposit will become non-refundable. Escrow on the transaction must close within 60 days after the end of the due diligence period. The property is being sold as-is, with the Redevelopment Agency making no warranties as to the condition of the building. Environmental Status: A Notice of Exemption for sale of 438 Main Street was approved by the Planning Department on February 11, 2003, and filed with the Orange County Clerk Recorder's Office. Attachment(s): City Clerk's P. . - Number No. Description 1 City Council Resolution No. '760-3_a�4 2 Redevelopment Agency Resolution No. 3 `,IX 3 Standard Offer, Agreement and Escrow Instructions 4 Grant Deed 5 Offer to Purchase 6 33433 Summary Report 7 1 Notice of Exemption RCA Author: D. Biggs, ext. 5909 G:\David\RCAS\438main.doc -3- 3/27/2003 3:46 PM City Council Resolution ATTACHMENT # 1 RESOLUTION NO. 2003-24 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE SALE OF PROPERTY LOCATED WITHIN THE HUNTINGTON BEACH REDEVELOPMENT PROJECT AREA WHEREAS,the Redevelopment Agency of the City of Huntington Beach(the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Merged Redevelopment Project Areas of the City of Huntington Beach (collectively the "Redevelopment Plan"); and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33000 et seq.), the Agency acquired real property located at 438 Main Street, Huntington Beach, which is located in the Redevelopment Project Area, Main-Pier sub area; and The real property consists of a 5,750 square foot parcel and includes a commercial two- story office building of approximately 4,250 square feet, and is legally described as Assessor's Parcel Number 24-134-02 (hereafter,the"Property"); and The Agency purchased the Property in anticipation of acquiring adjacent parcels for a larger redevelopment site. ` However, as a result of the pattern of land use and private redevelopment activities, including the development of new homes in the vicinity, the Agency has determined that acquiring adjacent parcels is no longer feasible; and In order to carry out and implement the Redevelopment Plan, the Agency proposes to enter into a Sale Agreement(the "Agreement")for the Property; and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33433) the Agency and the City Council held a joint public hearing on the Agreement, having duly published notice of such public hearing and having made copies of the proposed Agreement and other reports and documents (including the Summary Report required by Section 33433) available for public inspection and copying; and The Agency has duly considered all terms and conditions of the proposed transaction and believes that it is consistent with the Redevelopment Plan,will assist in eliminating blight in the Redevelopment Project area, is in the best interests of the Redevelopment Project area,the City and the health, safety, morals and welfare of,its residents, and is in accord with the public purposes and provisions of applicable State and local law and requirements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Huntington Beach as follows: SECTION 1. The City Council hereby finds and determines that the consideration to be paid for the purchase of the Property conveyed to it by the Redevelopment Agency is not less than the fair reuse value at the uses and with the covenants and conditions and development authorized by the sale. g/03reso/cc sale/3/25/03 1 SECTION 2. The City Council hereby finds and determines that the sale of the Property within the Project area pursuant to the Agreement will assist in the elimination of blight. SECTION 3. The City Council hereby fords and determines that the sale of the Property pursuant to the Agreement.is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code. SECTION 4. The Sale Agreement is hereby approved in substantially the form presented at this meeting, with such minor changes as may be approved by the Executive Director of the Agency with the approval as to form by the City Attorney. SECTION 5. The Summary Report prepared pursuant to Section 33433 is hereby adopted. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 7th day of April 2002- 2003. Mayor ATTEST: APPROVED AS TO FORM: al fl�L City Jerk / &ityAtto ey REVIEWED AND APPROVED: INITIATED AND APPROVED: .f City Admifffstrator Director of Economic evelopment g/03reso/cc sale/3/25/03 2 Res. No. 2003-24 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF.HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on the 7th day of April 2003 by the following vote: AYES: Coerper, Green, Boardman, Cook, Houchen, Hardy NOES: None ABSENT: Sullivan ABSTAIN: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California Redevelopment Agency Resolution ATTACHMENT #2 RESOLUTION NO. 344 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE SALE OF PROPERTY LOCATED WITHIN THE HUNTINGTON BEACH REDEVELOPMENT PROJECT AREA WHEREAS,the Redevelopment Agency of the City of Huntington Beach (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan for the Merged Redevelopment Project Areas of the City of Huntington Beach(collectively the "Redevelopment Plan"); and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33000 et seq.), the Agency acquired real property located at 438 Main Street, Huntington Beach, which is located in the Redevelopment Project Area, Main-Pier sub area; and The real property consists of a 5,750 square foot parcel and includes a commercial two- story office building of approximately 4,250 square feet, and is legally described as Assessor's Parcel Number 24-134-02 (hereafter, the"Property"); and The Agency purchased the Property in anticipation of acquiring adjacent parcels for a larger redevelopment site. However, as a result of the pattern of land,use and private redevelopment activities, including the development of new homes in the vicinity, the Agency has determined that acquiring adjacent parcels is no longer feasible; and In order to carry out and implement the Redevelopment Plan, the Agency proposes to enter into a Sale Agreement(the"Agreement")for the Property; and Pursuant to the California Community Redevelopment Law(California Health and Safety Code, Section 33433)the Agency and the City Council held a joint public hearing on the Agreement, having duly published notice of such public hearing and having made copies of the proposed Agreement and other reports and documents (including the Summary Report required by Section 33433) available for public inspection and copying; and The Agency has duly considered all terms and conditions of the proposed transaction and believes that it is consistent with the Redevelopment Plan,will assist in eliminating blight in the Redevelopment Project area, is in the best interests of the Redevelopment Project area, the City and the health, safety,morals and welfare of its residents, and is in accord with the public purposes and provisions of applicable State and local law and requirements. NOW, THEREFORE,BE IT RESOLVED by the Redevelopment Agency of the City of Huntington Beach as follows: SECTION 1. The Agency hereby finds and determines that the consideration to be paid for the purchase of the Property conveyed to it by the Agency is not less than the fair reuse value at the uses and with the covenants and conditions and development authorized by the sale. g/03reso/rda sale2/3/25/03 1 SECTION 2. The Agency hereby finds and determines that the sale of the Property within the Project area pursuant to the Agreement will assist in the elimination of blight. SECTION 3. The Agency hereby finds and determines that the sale of the Property pursuant to the Agreement is consistent with the implementation plan adopted pursuant to Section 33490 of the Health and Safety Code. SECTION 4. The Sale Agreement is hereby approved in substantially the form presented at this meeting, with such minor changes as may be approved by the Executive Director of the Agency with the approval as to form by the Agency General Counsel. SECTION 5. The Summary Report prepared pursuant to Section 33433 is hereby adopted. SECTION 6. The Chairman of the Agency and the Agency Clerk are hereby authorized _ to execute and alter the Agreement on behalf of the Agency as may be approved by the City Attorney. A copy of the Agreement when executed by the Agency shall be placed on file in the Office of the Agency Clerk. SECTION 7. The Executive Director of the Agency and the Agency Clerk are hereby authorized, on behalf of the Agency, to sign all documents necessary and appropriate to carry out and implement the Agreement, and to administer the Agency's obligations, responsibilities and duties to be performed thereunder. The Chairman of the Agency and the Agency Clerk shall execute the Grant Deed. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on the 7th day of April , 2003. Chairman ATTEST: APPROVED AS TO FORM: Agency Clerk Agency General C un el I-( 1A5 I(03. REVIEWED AND APPROVED: INITIATED AND APPROVED: Executiv Director Director of Economic evelopment J03reso/rda sale2/3/31/03 2 Res. No. 344 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on the 7th day of January, 2003 and that it was so adopted by the following vote: AYES: Coerper, Green, Boardman, Cook, Houchen, Hardy NOES: None ABSENT: Sullivan ABSTAIN: None Clerk of the Redevelopment Agency of the City of Huntington Beach, CA Standard Offer & Instructions ATTAC HAM E N;-T #3 STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non-Residential) American Industrial Real Estate Association March 24, 2003 (Date for Reference Purposes) 1. Buyer. 1.1 LGB Investments ("Buyer) hereby offers to purchase the real property,hereinafter described,from the owner thereof("Seller)(collectively,the"Parties'or individually,a"Party"), through an escrow("Escrow")to close on on or before the sixtieth (60th) day from the date of agreement ('Expected Closing Date")to be held by First American Title ("Escrow Holder) whose address is 1 First American Way, Santa Ana, CA 92701 Phone No. (714) 800-4732 Facsimile No. upon the terms and conditions set forth In this agreement('Agreement"). Buyer shall have the right to assign Buyer's rights hereunder,but any such assignment shall not relieve Buyer of Buyer's obligations herein unless Seller expressly releases Buyer. 1.2 The term Mate of Agreemenr as used herein shall be the date when by execution and delivery(as defined.in paragraph 20.2)of this document or a subsequent counteroffer thereto,Buyer and Seller have reached agreement in writing whereby Seller agrees to sell,and Buyer agrees to purchase,the Property upon terms accepted by both Parties. 2. Property. 2.1 The real property("Property")that Is the subject of this offer consists of(Insert a brief physical description)a n approximate 4,250-square-foot office building situated on an approximately 5,875-square-foot parcel of land Is located In the City of Huntington Beach County of Orange State of California ,is commonly known by the street address of 438 Main Street and is legally described as: to be provided through escrow (APN: 024-134-02 ). 2.2 If the legal description of the Property Is not complete or is inaccurate,this Agreement shall not be invalid and the legal description shall be completed or corrected to meet the requirements of First American Title ('Title Company'),which shall Issue the title policy hereinafter described. 2.3 The Property includes, at no additional cost to Buyer,the permanent Improvements thereon, including those items which the pursuant to applicable law are a part of the property,as well as the following Items,if any,owned by Seller and at present located on the Property:electrical distribution systems(power panel, bus ducting,conduits,disconnects, lighting fixtures); telephone distribution systems(lines,jacks and connections only); space heaters;heating,ventilating,air conditioning equipment("HVAC');air lines;fire sprinkler systems;security and fire detection systems;carpets;window coverings; wall coverings; and _ (collectively,the"Improvements"). 2.4 The fire sprinkler monitor:O is owned by Seller and Included in the Purchase Price,or O is leased by Seller,and Buyer will need to negotiate a new lease with the fire monitoring company. 2.5 Except as provided In Paragraph 2.3,the Purchase Price does not Include Seller's personal property,furniture and furnishings,and 3. Purchase Price. 3.1 The purchase price("Purchase Price")to be paid by Buyer to Seller for the Property shall be $950,000.00 payable as follows: (a) Cash down payment,including the Deposit as defined in paragraph 4.3(or if an all cash transaction,the Purchase Price): $285,000.00 (Strike if not applicable) (b) Amount of"New Loan"as defined in paragraph 5.1.if any: $665,000.00 Cledng of aPPraximatsly i n Closng of�PPro><imatcly t Saltl go-OR"Note is Pnynhlo of Including IntsroclaWso::a of- 14 P QIM1^^1"(^^"1^.,h^ (strike W no! 811ye,Gliall give Sell,; deed of Uunt(Milmhum MQney nead a!UAW!OR We Total Purchase Price: $950,000.00 3.2 If Buyer is taking I tle to the Property subject to,or assuming,and Existing Deed of Trust and such deed of trust permits the beneficiary to demand payment of fees Including,but not limited to,points,processing fees,and appraisal fees as a co0dition_tg,(hp transfer of the Pro rty,Buyer AP WED AS TO FORM ER OGRATH,CityAttomey Initials {'I M ��� Page 1 of Initials 2000-American Industrial Rjal Est8#A1~0,,q REVISED Form OFA-4-8/OOE agrees to pay such, p to a maximum of 1.5%of the unpaid principal balance of the i Is Existing Note. 4. Deposits. 4.1 ❑ Buyer has delivered to Broker a check in the sum of$ payable to Escrow Holder,to be held by Broker until both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder,or 0 Buyer shall deliver to Escrow Holder a check In the sum of$20,000.00 when both Parties have executed this Agreement and the executed Agreement has been delivered to Escrow Holder. When cashed,the check shall be deposited Into the Escrows trust acount to be applied toward the Purchase Price of the Property at the Closing. Should Buyer and Seiler not enter Into an agreement for purchase and sale,Buyers check or funds shall,upon request by Buyer, be promptly returned to Buyer. 4.2 Additional deposits: (a)Within 5 business days after the Date of Agreement,Buyer shall deposit with Escrow Holder the additional sum of $ N/A to be applied to the Purchase Price at the Closing. (b)Within 5 business days after the contingencies discussed in paragraph 9.1(a)through(k)are approved or waived,Buyer shall deposit with Escrow Holder the additional sum of$ N/A to be applied to the Purchase Price at the Closing. 4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2(collectively the"Deposit").in a State or Federally chartered bank in an Interest bearing account whose term is appropriate and consistent with the timing requirements of this transaction.The Interest therefrom shall accrue to the benefit of Buyer,who hereby acknowledges that there may be penalties or interest forfeitures if the applicable Instrument Is redeemed prior to Its specified maturity. Buyer's Federal Tax Identification Number is .NOTE:Such interest bearing account cannot be opened until Buyers Federal Tax Identification Number is provided. 5. Financing Contingency.(Strike if not applicable) 5.1 This offer is contingent upon Buyer obtaining from an Insurance company,financial Institution or other lender,a commitment to lend to Buyer a sum equal to at least 70 %of the Purchase Price,at terms reasonably acceptable to Buyer.Such loan("New Loan")shall be secured by a first trust or mortgage on the Property.If this Agreement provides for Seller to carry back junior financing,then Seller shall have the right to approve the terms of the New Loan.Seller shall have 7 days from receipt of the commitment setting forth the proposed terms of the New Loan to approve or disapprove of such proposed terms.It Seller fails to notify Escrow Holder,In writing,of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan. 5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan. If Buyer shall fall to notify Its Broker,Escrow Holder and Seiler,in writing within 30 days following the Date of Agreement,that the New Loan has not been obtained,It shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan contingency. 5.3 If,after due diligence,Buyer shall no0fy Its Broker,Escrow Holder and Seller,in writing,within the time specified in paragraph 5.2 hereof,that Buyer has not obtained said New Loan,this Agreement shall be terminated,and Buyer shall be entitled to the prompt return of the Deposit,plus any Interest earned thereon,less only Escrow Holder and Title Company cancellation fees and costs,which Buyer shall pay. 0 TM..12 1r4h^.. Money AI^,....^A O,F-h2n^04QAQY r1..^M Of 3:9UG1.. all b 11,^^ l� 0 7. Real Estate Brokers. 7.1 The following real estate broker(s)("Brokers")and brokerage relationships exist in this transaction and are consented to by the Parties(check the applicable boxes): 0 Lee & Associates — Newport Beach, Inc. represents Seller exclusively("Seller's Broker); 0 Lifestyle Home's represents Buyer exclusively("Buyers Brokef);or ❑ represents both Seller and Buyer("Dual Agency"). The Parties acknowledge that Brokers are the procuring cause of this Agreement.See paragraph 24 for disclosures regarding the nature of a real estate agency relationship.Buyer shall use the services of Buyer's Broker exclusively In connection with any and all negotiations and offers with respect to the Property for a period of 1 year from the Date of Agreement. 7.2 Buyer and Setter each represent and warrant to the other that helshellt has had no dealings with any person,firm,broker or finder in connection with the negotiation of this Agreement and/or the consummation of the purchase and sale contemplated herein,other than the Brokers named in paragraph 7.1,and no broker or other person,firth or entity,other than said Brokers is/are entitled to any commission or finder's fee in connection with this transaction as the result of any dealings or acts of such Party.Buyer and Seller do each hereby agree to indemnify,defend,protect and hold the other harmless from and against any costs,expenses or liability for compensation,commission or charges which may be claimed by any broker,finder or other similar party, other than said named Brokers by reason of any dealings or act of the Indemnifying Party. 8. Escrow and Closing. 8.1 Upon acceptance hereof by Seller,this Agreement,including any counteroffers Incorporated herein by the Parties,shall constitute not only the agreement of purchase and sale between Buyer and Seller,but also Instructions to Escrow Holder for the consummation of the Agreement through the Escrow.Escrow Holder shall not prepare any further escrow Instructions restating or amending the Agreement unless specifically so instructed by the Parties or a Broker herein.Subject to the reasonable approval of the Parties,Escrow Holder may,however,include its standard general escrow provisions. 8.2 As soon as practical after the receipt of this Agreement and any relevant counteroffers,Escrow Holder shall ascertain the Date of Agreement as defined In paragraphs 1.2 and 20.2 and advise the Parties and Brokers,in writing,of the date ascertained. 8.3 Escrow Holder Is hereby authorized and Instructed to conduct the Escrow In accordance with this Agreement,applicable law and custom and practice of the community in which Escrow Holder Is located,including any reporting requirements of the Internal Revenue Code.In the event of a conflict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located,the law of the state where the Property Is located shall prevail. 8.4 Subject to satisfaction of the contingencles herein described, Escrow Holder shall close this escrow(the'Closing")by recordi general AP VED AS TO FORM G IQ R MpQRATH,City Attorney Initials 4` Page 2 of 8 Initials 2000"American Industrial Real Estate Association REVISED y�e M" J Form OFA-4-8/OOE Doty City Attorney 3 7. warranty deed(a! end in California)and the other documents required to be rest nd by disbursing the funds and documents in accordance with this Agreement. 8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes.Seller shaft pay the premium for a standard coverage owner's or joint protection policy of title insurance. 8.6 Escrow Holder shall verify that all of Buyer's contingencies have been satisfied or waived prior to Closing.The matters contained In paragraphs 9.1 subparagraphs(b),(c),(d),(a),(g),(1),(n),and(o),9.4,9.5.12,13.14,16,18,20.21,22,and 24 are,however,matters of agreement between the Parties only and are not Instructions to Escrow Holder. 8.7 If this transaction is terminated for non-satisfaction and non-waiver of a Buyer's Contingency,as defined in paragraph 9.2,then neither of the Parties shall thereafter have any liability to the other under this Agreement,except to the extent of a breach of any affirmative covenant or warranty in this Agreement.In the event of such termination,Buyer shall be promptly refunded all funds deposited by Buyer with Escrow Holder,less only Title Company and Escrow Holder cancellation fees and costs,all of which shall be Buyer's obligation. 8.8 The Closing shall occur on the Expected Closing Date,or as soon thereafter as the Escrow is in condition for Closing;provided,however,that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual Instructions of the Parties,a Party not then in default under this Agreement may notify the other Party,Escrow Holder,and Brokers,In writing that,unless the Closing occurs within 5 business days following said notice,the Escrow shall be deemed terminated without further notice or instructions. 8.9 Except as otherwise provided herein,the termination of Escrow shall not relieve or release either Party from any obligation to pay Escrow Holder's fees and costs or constitute a waiver,release or discharge of any breach or default that has occurred in the performance of the obligations, agreements,covenants or warranties contained therein. 8.10 If this Escrow Is terminated for any reason other than Setters breach or default,then at Seller's request,and as a condition to the return of Buyers deposit,Buyer shall within 5 days after written request deliver to Seller,at no charge,copies of all surveys,engineering studies,soil reports,maps, master plans,feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.Provided,however,that Buyer shall not be required to deliver any such report if the written contract which Buyer entered Into with the consultant who prepared such report specifically forbids the dissemination of the report to others. 9. Contingencies to Closing. 9.1 The Closing of this transaction Is contingent upon the satisfaction or waiver of the following contingencies.IF BUYER FAILS TO NOTIFY ESCROW HOLDER,IN WRITING,OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN,IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM,MATTER OR DOCUMENT.Buyers conditional approval shall constitute disapproval,unless provision Is made by the Seller within the time specified therefore by the Buyer in such conditional approval or by this Agreement, whichever is later,for the satisfaction of the condition Imposed by the Buyer.Escrow Holder shall promptly provide all Parties with copies of any written disapproval or conditional approval which it receives.With regard to subparagraphs(a)through(1)the pre-printed time periods shall control unless a different number of days Is Inserted in the spaces provided. (a)Disclosure.Seller shall make to Buyer,through escrow,all of the applicable disclosures required by law(See American Industrial Real Estate Association("AIR")standard form entitled"Sellers Mandatory Disclosure Statement")and provide Buyer with a completed Property Information Sheet ('Property Information Sheet*)concerning the Property,duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or- days following the Date of Agreement.Buyer has 30 daye from the into of agreement 1 dlackwAwas.to approve or disapprove the matters disclosed. (b)Physical Inspection.Buyer has4Q 30 days fro the Date of Agreement,uvhkl+awcJs IaW,to satisfy Itself with regard to the physical aspects and size of the Property. (c)Hazardous Substance Conditions Report.Buyer has 30 ex. days froni4ho-waaipW the Date of Agreemen satisfy itself with regard to the environmental aspects of the Property.Seiler recommends that Buyer obtain a Hazardous Substance Conditions Report concerning the Property and relevant adjoining properties. Any such report shall be paid for by Buyer. A"Hazardous Substance"for purposes of this Agreement Is defined as any substance whose nature and/or quantity of existence,use,manufacture,disposal or effect, render It subject to Federal,state or local regulation,Investigation,remediation or removal as potentially Injurious to public health or welfare.A"Hazardous Substance Condition"for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediation and/or removal under applicable Federal,state or local law. (d)Soil Inspection.Buyer has 30 or- —„ays from the;oGoipl at the Date of Agreemen6-wWwbow"4c later,to satisfy Itself with regard to the condition of the soils on the Property.Seller recommends that Buyer obtain a soil test report.Any such report shall be paid for by Buyer.Seller shall provide Buyer copies of any soils report that Seller may have within 10 days of the Date of Agreement. (a)Governmental Approvals.Buyer has 30 ar.�—days from the Date of Agreement to satisfy Itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over the Property and which Buyer deems necessary or desirable In connection with Its Intended use of the Property,Including,but not limited to,permits and approvals required with respect to zoning,planning,building and safety,fire,police,handicapped and Americans with Disabilities Act requirements,transportation and environmental matters. (0 Conditions of Title.Escrow Holder shall cause a current commitment for title Insurance("Title Commitment")concerning the Property Issued by the Title Company,as well as legible copies of all documents referred to In the Title Commitment('Underlying Documents')to be delivered to Buyer within 10-or mays following the Date of Agreement.Buyer has 30 40 days from the raesipt of the Data of Agreement to satisfy Itself with regard to the condition of title.The disapproval of Buyer of any monetary encumbrance,which by the terms of this Agreement Is not to remain against the Property after the Closing,shall not be considered a failure of this contingency,as Seller shall have the obligation,at Sellers expense,to satisfy and remove such disapproved monetary encumbrance at or before the Closing. (g)Survey.Buyer has 30a& days from the Date of Agreement to satisfy Itself with regard to any ALTA fide supplement based upon a survey prepared to American Land Tide Association("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal description and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines.Any such survey shall be prepared at Buyers direction and expense.If Buyer has obtained a survey and approved the ALTA title supplement,Buyer may elect within the period allowed for Buyers approval of a survey to have an ALTA extended coverage owners form of tide policy,in which event Buyer shall pay any additional premium attributable thereto. (h)Existing Leases and Tenancy Statements.Seller shall within 10ar_days of the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases,subleases or rental arrangements(collectively,"Existing Leases")affecting the Property,and with a tenancy statement ("Estoppel Certificate")in the latest form or equivalent to that published by the AIR,executed by Seller and/or each tenant and subtenant of the Property. Seller shall use Its best efforts to have each tenant complete and execute an Estoppel Certificate. If any tenant fails or refuses to provide an Estoppel Certificate then Seller shall complete and execute an Estoppel Certificate for that tenancy. Buyer has 3040 days from the receipt of the Date of Agreement said-liml-Iiag to satisfy itself with regard to the Existing Leases and any other tenancy issues. (1)Other Agreements.Seller shall within 10 or- days of the Date of Agreement provide Buyer with legible copies of all other agreements ("Other Agreements")known to Seller that will affect the Property after Closing.Buyer has 30 44.days from the Date of Agreement Gthep 59memeAls to satisfy itself with regard to such Agreements. (j)Financing.If paragraph 5 hereof dealing with a financing contingency has not been stricken,the satisfaction or waiver of such New Loan contingency. Ad FOW (Go ") t (1)Personal Property.In the event that any personal property is included in the Purchase Price,Buyer has34ac 30 days from the Date of Agreement to satisfy Itself with regard to the title condition of such personal property.SWPPRMVWM Iva ffQRA61ain a UCC-1 re ny such JEN ER Me BATH,City Attorney Initials Page 3 of 8 $y ie Mvlvthill Z'� la Initials Deputy CityAttomey Form OFA�-9/OOE 2000-American Industrial Res[Estate Association REVISED report shall be pay y Buyer.Seller shall provide Buyer copies of any liens or encun s affecting such personal property that it is aware of within 10 or--days of the Date of Agreement. (m)Destruction,Damage or Loss.There shall not have occurred prior to the Closing,a destruction of,or damage or loss to,the Property or any portion thereof,from any cause whatsoever,which would cost more than$10.000.00 to repair or cure.If the cost of repair or cure is$10,000.00 or less, Seller shall repair or cure the loss prior to the Closing.Buyer shall have the option,within 10 days after receipt of written notice of a loss costing more than $10,000.00 to repair or cure,to either terminate this transaction or to purchase the Property notwithstanding such loss,but without deduction or offset against the Purchase Price.If the cost to repair or cure is more than$10,000.00,and Buyer does not elect to terminate this transaction.Buyer shall be entitled to any insurance proceeds applicable to such loss.Unless otherwise notified in writing,Escrow Holder shall assume no such destruction,damage or loss has occurred prior to Closing. (n)Material Change.Buyer shall have 10 days following receipt of written notice of a Material Change within which to satisfy itself with regard to such change."Material Change"shall mean a change In the status of the use,occupancy,tenants,or condition of the Property that occurs after the date of this offer and prior to the Closing.Unless otherwise notified in writing.Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (o)Seller Performance.The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement. (p)Warranties.That each representation and warranty of Seller herein be true and correct as of the Closing.Escrow Holder shall assume that this condition has been satisfied unless notified to the contrary in writing by any Party prior to the Closing. (q)Brokerage Fee.Payment at the Closing of such brokerage fee as is specified in this Agreement or later written instructions to Escrow Holder executed by Seller and Brokers("Brokerage Fee"). It is agreed by the Parties and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned,and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement,without the written consent of Brokers. 9.2 All of the contingencies specified in subparagraphs(a)through(p)of paragraph 9.1 are for the benefit of,and may be waived by,Buyer,and may be elsewhere herein referred to as"Buyer Contingencies." 9.3 If any Buyer's Contingency or any other matter subject to Buyer's approval is disapproved as provided for herein in a timely manner ("Disapproved Item"),Seller shall have the right within 10 days following the receipt of notice of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date("Seller's Election").Seller's failure to give to Buyer within such period,written notice of Sellers commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Sellers Election not to cure such Disapproved Item.If Seller elects,either by written notice or failure to give written notice,not to cure a Disapproved Item,Buyer shall have the election,within 10 days after Sellers Election to either accept title to the Property subject to such Disapproved Item,or to terminate this transaction.Buyers failure to notity Seller in writing of Buyers election to accept title to the Property subject to the Disapproved Item shall constitute Buyers election to terminate this transaction.Unless expressly pro Unless the Parties mutually instruct otherwise,if the time periods for the satisfaction of contingencies or for Seller's and Buyers said Elections would expire on a date after the Expected Closing Date,the Expected Closing Date shall be deemed extended for 3 business days following the expiration of:(a)the applicable contingency period(s),(b)the period within which the Seller may elect to cure the Disapproved Item,or(c)if Seller elects not to cure,the period within which Buyer may elect to proceed with this transaction,whichever is later. 9.4 Buyer understands and agrees that until such time as all Buyer's Contingencies have been satisfied or waived.Seller and/or its agents may solicit,entertain and/or accept back-up offers to purchase the subject Property. 9.5 The Parties acknowledge that extensive local,state and Federal legislation establish broad liability upon owners and/or users of real property for the Investigation and remediation of Hazardous Substances.The determination of the existence of a Hazardous Substance Condition and the evaluation of the impact of such a condition are highly technical and beyond the expertise of Brokers.The Parties acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on this Property or adjoining properties, and Buyer and Seller are not relying upon any investigation by or statement of Brokers with respect thereto.The Parties hereby assume all responsibility for the impact of such Hazardous Substances upon their respective interests herein. 10. Documents Required at or before Closing: 10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the Parties. 10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the Closing: (a) Grant or general warranty deed,duly executed and in recordable form,conveying fee title to the Property to Buyer. (b) If applicable,the Beneficiary Statements concerning Existing Note(s). (c) If applicable, the Existing Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of Existing Leases shall be on the most recent Assignment and Assumption of Lessor's Interest in Lease form published by the AIR or its equivalent. (d)If applicable,Estoppel Certificates executed by Seller and/or the tenant(s)of the Property. (a)An affidavit executed by Seller to the effect that Seller is not a"foreign person"within the meaning of Internal Revenue Code Section 1445 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers. (f)If the Property is located in California,an affidavit executed by Seller to the effect that Seller is not a"nonresident"within the meaning of California Revenue and Tax Code Section 18662 or successor statutes.If Seller does not provide such affidavit in form reasonably satisfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at the Closing deduct from Sellers proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (g)If applicable,a bill of sale,duly executed,conveying title to any included personal property to Buyer. (h)If the Seller is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the sale of the Property. 10.3 Buyer shall deliver to Seller through Escrow: (a)The cash portion of the Purchase Price and such additional sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder,by federal funds wire transfer,or any other method acceptable to Escrow Holder as immediately collectable funds,no later than 2:00 P.M.on the business day prior to the Expected Closing Date. (b)If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement,the duly executed originals of those documents,the Purchase Money Deed of Trust being in recordable form,together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee,and a real estate tax service contract(at Buyers expense),assuring Seller of notice of the status of payment of real property taxes during the life of the Purchase Money Note. (c)The Assignment and Assumption of Lessors Interest in Lease form specified in paragraph 10.2(c)above,duly executed by Buyer. (d)Assumptions duly executed by Buyer of the obligations of Seller that accrue after Closing under any Other Agreements. (a)If applicable,a written assumption duly executed by Buyer of the loan documents with respect to Existing Notes. (f)If the Buyer is a corporation,a duly executed corporate resolution authorizing the execution of this Agreement and the purchase of the Property. 10.4 At Closing,Escrow Holder shall cause to be Issued to Buyer a standard coverage(or ALTA extended,if elected pursuant to 9.1(g))owner's form policy of title insurance effective as of the Closing,issued by the Title Company in the full amount of the Purchase Price,insuring title to the Property vested in Buyer,subject only to the exceptions approved by Buyer.In the event there is a Purchase Money Deed of Trust in this transaction,the policy of title insurance shall be a joint protection policy insuring both Buyer and Seller. IMPORTANT:IN A PURCHASE OR EXCHANGE OF REAL PROPERTY,IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED.A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING. 11. Prorations and Adjustments. 11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing,based upon the latest tax bill available.The Parties agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing.Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill. 11.2 Insurance. WARNING:Any insurance which Seller maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,interest on Existing Notes,utilities,and operating expenses shall be prorated as of the date of Closing.The Parties agree to promptly adjust between themselves outside of Escrow any rents received after the Closing. AP VED AS TO FORM N R M Crty Attorn ey Initials j Page 4 of 8 IWI/L-- Initials 2000-American Industrial Real Estate Association REVISED D�ru��b 27 u)3 Form OFA-4-8100E 11.4 Security it.Security Deposits held try Seller shall be given to Buyer as a the cash required of Buyer at the Closing. 11.5 Post Closing Matters.Any Item to be prorated that is not determined or determir,_ .at the Closing shall be promptly adjusted by the Parties by appropriate cash payment outside of the Escrow when the amount due is determined. 11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing the Property subject to an Existing Deed of Trust(s),and in the event that a Beneficiary Statement as to the applicable Existing Note(s)discloses that the unpaid principal balance of such Existing Note(s)at the Closing will be more or less than the amount set forth in paragraph 3.1(c)hereof("Existing Note Variation"),then the Purchase Money Note(s)shall be reduced or Increased by an amount equal to such Existing Note Variation.If there is to be no Purchase Money Note,the cash required at the Closing per paragraph 3.1(a)shall be reduced or increased by the amount of such Existing Note Variation. 11.7 Variations In New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ultimately obtained exceeds the amount set forth in paragraph SA,then the amount of the Purchase Money Note,if any,shall be reduced by the amount of such excess. 12. Representation and Warranties of Seller and Disclaimers. 12.1 Seller's warranties and representations shall survive the Closing and delivery of the deed for a period of 3 years,and,are true,material and relied upon by Buyer and Brokers in all respects.Seiler hereby makes the following warrantees and representations to Buyer and Brokers: (a)Authority of Seller.Seller is the owner of the Property and/or has the full right,power and authority to sell,convey and transfer the Property to Buyer as provided herein,and to perform Seller's obligations hereunder. (b)Maintenance During Escrow and Equipment Condition At Closing.Except as otherwise provided in paragraph 9.1(m)hereof,Seller shall maintain the Property until the Closing in Its present condition, ordinary wear and tear excepted. The HVAC, plumbing,elevators, loading doors and electrical systems shall be in good operating order and condition at the time of Closing. (c)Hazardous Substances/Storage Tanks.Seller has no knowledge,except as otherwise disclosed to Buyer in writing,of the existence or prior existence on the Property of any Hazardous Substance,nor of the existence or prior existence of any above or below ground storage tank. (d)Compliance.Seller has no knowledge of any aspect or condition of the Property which violates applicable laws,rules,regulations,codes or covenants,conditions or restrictions,or of Improvements or alterations made to the Property without a permit where one was required,or of any unfulfilled order or directive of any applicable governmental agency or casualty Insurance company requiring any investigation,remediation,repair,maintenance or Improvement be performed on the Property. (a)Changes in Agreements.Prior to the Closing,Seller will not violate or modify any Existing Lease or Other Agreement,or create any new leases or other agreements affecting the Property,without Buyer's written approval,which approval will not be unreasonably withheld. (f)Possessory Rights.Seller has no knowledge that anyone will,at the Closing,have any right to possession of the Property,except as disclosed by this Agreement or otherwise in writing to Buyer. (g)Mechanics'Liens.There are no unsatisfied mechanics'or materialmans'lien rights concerning the Property. (h)Actions,Suits or Proceedings.Seller has no knowledge of any actions,suits or proceedings pending or threatened before any commission, board,bureau,agency,arbitrator,court or tribunal that would affect the Property or the right to occupy or utilize same. (1)Notice of Changes. Seller will promptly notify Buyer and Brokers In writing of any Material Change(see paragraph 9-1(n))affecting the Property that becomes known to Seller prior to the Closing. 0)No Tenant Bankruptcy Proceedings. Seller has no notice or knowledge that any tenant of the Property is the subject of a bankruptcy or Insolvency proceeding. (k)No Seller Bankruptcy Proceedings.Seller is not the subject of a bankruptcy,insolvency or probate proceeding. (1)Personal Property.Seller has no knowledge that anyone will,at the Closing,have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property,except as disclosed by this Agreement or otherwise in writing to Buyer. 12.2 Buyer hereby acknowledges that,except as otherwise stated in this Agreement.Buyer is purchasing the Property in its existing condition and will, by the time called for herein, make or have waived all inspections of the Property Buyer believes are necessary to protect its own interest in,and its contemplated use of, the Property. The Parties acknowledge that, except as otherwise stated In this Agreement, no representations, inducements, promises, agreements, assurances,oral or written, concerning the Property, or any aspect of the occupational safety and health laws, Hazardous Substance laws,or any other act,ordinance or law,have been made by either Party or Brokers,or relied upon by either Party hereto. 12.3 In the event that Buyer learns that a Seller representation or warranty might be untrue prior to the Closing,and Buyer elects to purchase the Property anyway then,and in that event,Buyer waives any right that It may have to bring an action or proceeding against Seller or Brokers regarding said representation or warranty. 12.4 Any environmental reports,soils reports,surveys,and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or seller's representatives, have been delivered as an accommodation to Buyer and without any representation or warranty as to the sufficiency,accuracy,completeness,and/or validity of said documents,all of which Buyer relies on at its own risk.Seller believes said documents to be accurate,but Buyer is advised to retain appropriate consultants to review said documents and Investigate the Property. 13. Possession. Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under Existing Leases. 14. Buyers Entry. At any time during the Escrow period,Buyer,and Its agents and representatives,shall have the right at reasonable times and subject to rights of tenants,10 enter upon the Property for the purpose of making Inspections and tests specified in this Agreement.No destructive testing shall be conducted,however, without Seller's prior approval which shall not be unreasonably withheld.Fallowing any such entry or work,unless otherwise directed in writing by Seller. Buyer shall return the Property to the condition It was in prior to such entry or work,including the recompaction or removal of any disrupted soil or material as Seiler may reasonably direct All such Inspections and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall Indemnity,defend,protect and hold harmless Seller and the Property of and from any and all claims,liabilities,losses,expenses(including reasonable attorneys'tees),damages,including those for injury to person or property,arising out of or relating to any such work or materials or the acts or omissions of Buyer,its agents or employees in connection therewith. 15. Further Documents and Assurances. The Parties shall each,diligently and in good faith,undertake all actions and procedures reasonably required to place the Escrow in condition for Closing as and when required by this Agreement.The Parties agree to provide all further information,and to execute and deliver all further documents,reasonably required by Escrow Holder or the Title Company. 16. Attorneys'Fees. If any Party or Broker brings an action or proceeding(Including arbitration)Involving the Property whether founded in tort,contract or equity,or to declare rights hereunder,the Prevailing Party(as hereafter defined)In any such proceeding,action,or appeal thereon,shall be entitled to reasonable attorneys' fees.Such fees may be awarded In the same suit or recovered In a separate suit,whether or not such action or proceeding is pursued to decision or judgment The term"Prevailing Party"shall Include,without limitation,a Party or Broker who substantially obtains or defeats the relief sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of Its claim or defense.The attomeys'fees award shall not be computed In accordance with any court fee schedule,but shall be such as to fully reimburse all attomeys'fees reasonably incurred. 17. Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement are effective only if made in writing and executed by Buyer and Seller. 18. Broker's Rights. 18.1 If this sale is not consummated due to the default of either the Buyer or Seller,the defaulting Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated.If Buyer Is the defaulting party,payment of said Brokerage Fee is in addition to any obligation with respect to liquidated or other damages. 18.2 Upon the Closing,Brokers are authorized to publicize the facts of this transaction. 19. Notices. 19.1 Whenever any Party,Escrow Holder or Brokers herein shall desire to give or serve any notice,demand,request,approval,disapproval or other communication,each such communication shall be in writing and shall be delivered personally,by messenger or by mail,postage prepaid,to the address set forth In this Agreement or by facsimile transission. m 19.2 Service of any such communication shall be deemed made on the date of actual receipt it personally delivered.Any such communication sent by regular mall shall be deemed given 46 hours after the same is mailed.Communications sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours after delivery of the same to the Postal Service or courier.Communications transmitted by facsimile transmission shall be deemed'delivered upon telephonic confirmation of receipt(confirmation report from fax machine is sufficient),provided a copy Is also delivered via delivery or mail.If such communication Is received on a Saturday.Sunday or legal holiday,it shall be deemed received on the next business day. 19.3 Any Party or Broker hereto may from time to time,by notice In writing,designate a different address to which,or a different person or additional persons to whom,all communications are thereafter to be made. AP OVED AS TO FORMWERTH,City AttorneyInitials j Page 5 of 8 Initials 2000-American Industrial Rel Estate Assoeiatian REVISED ��I� Form OFA 4 BIOOE Deputy City Attsrn.y 20. Duration oft 20.1 If this o%..,not accepted by Seller on or before 5:00 P.M.according to the tim. Aard applicable to the city of Huntington Beach, California on the date of April 8, 2003 it shall be deemed automatically revoked. 20.2 The acceptance of this offer,or of any subsequent counteroffer hereto,that creates an agreement between the Parties as described in paragraph 1.2.shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed writing unconditionally accepting the last outstanding offer or counteroffer. 21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if initialed by both Parties). THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE,IF,AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT,BUYER BREACHES THIS AGREEMENT,SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF$20,000.00 UPON PAYMENT OF SAID SUM TO SELLER,BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER,AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER. Bu ilals Seller Initials iNWERE A=W T.Hr- AREA M ^a MCA. CQ�A T-9=TWAT. IS TWE SUBJECT OF T.WIS AZZORNS GLI-ARS SAW" PROVISION IS 11011141T.AW4 Q�grsr Joltlala SalJar Jnttlala 23. Miscellaneous. 23.1 Binding Effect. This Agreement shall be binding on the Parties without regard to whether or not paragraphs 21 and 22 are initialed by both of the Parties.Paragraphs 21 and 22 are each Incorporated into this Agreement only if initialed by both Parties at the time that the Agreement is executed. 23.2 Applicable Law. This Agreement shall be governed by,and paragraph 22.3 is amended to refer to,the laws of the state in which the Property Is located. 23.3 Time of Essence. Time Is of the essence of this Agreement. 23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts,each of which shall be deemed an original,and all of which together shall constitute one and the same Instrument. Escrow Holder, after verifying that the counterparts are identical except for the signatures,is authorized and Instructed to combine the signed signature pages on one of the counterparts,which shall then constitute the Agreement. 23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 24. Disclosures Regarding The Nature of a Real Estate Agency Relationship. 24.1 The Parties and Brokers agree that their relationship(s)shall be governed by the principles set forth in the applicable sections of the California Civil Code,as summarized in paragraph 24.2. 24.2 When entering Into a discussion with a real estate agent regarding a real estate transaction,a Buyer or Seller should from the outset understand what type of agency relationship or representation It has with the agent or agents in the transaction. Buyer and Seller acknowledge being advised by the Brokers In this transaction,as follows: (a)Seller's Agent.A Seller's agent under a listing agreement with the Seller acts as the agent for the Seller only.A Seller's agent or subagent has the following affirmative obligations:(1)To the Seller.A fiduciary duty of utmost care,integrity,honesty,and loyalty in dealings with the Seller.(2)To the Buyer and the Seller, a.Diligent exercise of reasonable skills and care in performance of the agent's duties. b.A duty of honest and fair dealing and good faith. c.A duty to disclose ail facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained fr the other APPROVED AS TO PORN -- -- J PER MaG TH City Attamey Initials }. Page 6 of 8 �V'l� � Initials 2000-American Industrial Real Estate Association REVISED By L�onie Mu�vibill Z Form OFA-4-8100E Deauty City"Attamev Party which does n, ve the affirmative duties set forth above. (b)Buye/s Agent.A selling agent can,with a Buyer's consent,agree to act as ab_ tor the Buyer only.In these situations,the agent Is not the Seller's agent,even if by agreement the agent may receive compensation for services rendered,either in full or In part from the Seller.An agent acting only for a Buyer has the following affirmative obligations.(1)To the Buyer.A fiduciary duty of utmost care.Integrity,honesty,and loyalty in dealings with the Buyer.(2)To the Buyer and the Seller.a.Diligent exercise of reasonable skills and care in performance of the agent's duties.b.A duty of honest and fair dealing and good faith.c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to,or within the diligent attention and observation of,the Parties.An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not Involve the affirmative duties set forth above. (c)Agent Representing Both Seller and Buyer.A real estate agent,either acting directly or through one or more associate licenses,can legally be the agent of both the Seller and the Buyer in a transaction,but only with the knowledge and consent of both the Seller and the Buyer.(1)In a dual agency situation,the agent has the following affirmative obligations to both the Seller and the Buyer.a.A fiduciary duty of utmost care,integrity,honesty and loyalty in the dealings with either Seller or the Buyer.b.Other duties to the Seller and the Buyer as stated above in their respective sections(a)or(b)of this paragraph 24.2.(2)In representing both Seller and Buyer,the agent may not without the express permission of the respective Party,disclose to the other Party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.(3)The above duties of the agent In a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assure that they adequately express their understanding of the transaction.A real estate agent is a person qualified to advise about real estate.If legal or tax advice is desired,consult a competent professional. (d)Further Disclosures.Throughout this transaction Buyer and Seller may receive more than one disclosure,depending upon the number of agents assisting in the transaction.Buyer and Seller should each read its contents each time it is presented,considering the relationship between them and the real estate agent In this transaction and that disclosure.Brokers have no responsibility with respect to any default or breach hereof by either Party.The liability(including court costs and attorneys'fees),of any Broker with respect to any breach of duty,error or omission relating to this Agreement shall not exceed the fee received by such Broker pursuant to this Agreement;provided,however,that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. 24.3 Confidential Information:Buyer and Seller agree to Identify to Brokers as"Confidential"any communication or information given Brokers that is considered by such Party to be confidential. 25. Construction of Agreement.In construing this Agreement,all headings and Was are for the convenience of the parties only and shall not be considered a part of this Agreement.Whenever required by the context,the singular shall include the plural and vice versa.Unless otherwise specifically Indicated to the contrary,the word"days"as used In this Agreement shall mean and refer to calendar days.This Agreement shall not be construed as if prepared by one of the parties,but rather according to Its fair meaning as a whole,as if both parties had prepared it. 25 Additional Provisions: Additional provisions of this offer,if any,are as follows or are attached hereto by an addendum consisting of paragraphs through (If there are no additional provisions write"NONE".) 29. Mineral Rights: Any oil, Mineral rights, etc. shall be retained by Seller. 30. Grant Deed and Covenants: Buyer acknowledges receipt of the Grant Deed and the conditions of the following covenants: (a) Covenant requiring use of property to be consistent with Purposes Designated in Redevelopment Plan; (b) Covenant as to Nondiscrimination and Nonsegregation; (c) Maintenance Covenant. Breach of any of the above covenants shall cause the property to revert to Seller. ATTENTION:NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR 8 ANY BROKER AS TO THE LEGAL SUFFICIENCY,LEGAL EFFECT,OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION T WHICH IT RELATES.THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT. . RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATIO SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PROPERTY,TH INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS,AND THE SUITABILITY OF THE PROPERTY FOR BUYER' INTENDED USE. ARNING:IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEE O BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED. NOTE: 1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY. 2. IF THE BUYER IS A CORPORATION,IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS. The undersigned Buyer offers and agrees to buy the Property on the terms and conditions stated and acknowledges receipt of a copy hereof. -' BROKER: BUYER: Lifestylp,yornegLGB Inves nts Attn: Margaret Van Herk By: Title: Date: 3 Address: 16912 Warner Avenue, Suite 201 Name Printed: S -r Huntington Beach, CA 92649 Title: ¢ /1t! Telephone: 714-969-1516 Telephone/Facsimile: /t(-Jam/- 3-03 r ot{ S Facsimile: _ - Federal ID No. By: Date: Name Printed: Title: Address: Telephone/Facsimile: Federal tD No. APPROVED AS TO FORM E BR Md3RATH,City Attorney Initials Page 7 of 8 I b'j Initials 2000-American Industrial Real Estate Association REVISED Mull ✓ Form OFA-4-8/OOE Laonkn--..�.nity At!omav 27. Acceptance. 27.1 Seller accepts the foregoing offer to purchase the Property and hereby agrees to sell the Property to Buyer on the terms and conditions therein specified. 27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and are the procuring cause of the purchase and sale of the Property set forth In this Agreement.In consideration of real estate brokerage service rendered by Brokers,Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal to 6 %of the Purchase Price divided in such shares as said Brokers shall direct in writing.This Agreement shall serve as an Irrevocable Instruction to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer. NOTE:A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER: SELLER: Lee & Associates — Newport Beach, Inc. City of Huntington Beach Redevelopment Agency Attn: Curt Stalder By: Agency Chatrman Titre: Senior Vice President Date: Address: 3991 MacArthur Blvd., #100 Name Printed: Newport Beach, CA 92660 Title: Telephone: 9 4 9—7 2 4—10 0 0 Telephone/Facsimile: Facsimile: 94 9-833-0608 Federal lDNo. By: Agency Clerk Date: Name Printed: Title: Address: Telephone/Facsimile: Federal ID No. These forms are often modified to meet changing requirements of law and needs of the Industry. Always write or call to make sure you are utilizing the most current - form:American Industrial Real Estate Association,700 South Flower Street,Suite e00,Los Angeles,CA 90017.(213)687.8777. - - - ®Copyright 2000-By Amerlean Industrial Real Estate Association. All rights reserved. . - - No part of these works may be reproduced In any form without permission In writing. Stelder/CGB lm Purch Agree Ap VED AS TO FORM F R M RATH,City Attorney . Mulvikill 31��Lu3 Deputy City Attorney Initials Page 8 of 8 Initials 2000-American Industrial Real Estate Association REVISED Form OFA-4-8/OOE Grant Deed � ATTACHMENT #4 Recording Requested by: FREE RECORDING REQUESTED (Government Code Section 6103) Redevelopment Agency of the City of Huntington Beach When Recorded Return to and Mail to: Agency Clerk Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92683 GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic, of the State of California, herein called "Agency," acting under the Community Redevelopment Law(California Health and Safety Code §§ 33000, et seq.) of the State of California, hereby grants to LGB Investments, a Limited Partnership, herein called "Grantee,"the real property, hereinafter referred to as the "Property," whose legal description and map are set forth in Exhibit"A," which is incorporated herein. 1. Agency excepts and reserves from the conveyance herein described any existing street, proposed street, or portion of any street or proposed street lying outside the boundaries of the Property, which might otherwise pass with a conveyance of the Property. Agency excepts and reserves from the conveyance herein described all interest of Agency in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (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 five hundred (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 or other lands, but without, however, any right to use either the surface of the Property or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Property in such a manner as to create a disturbance to the use or enjoyment of the Property. 2. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 3343 of the Council of the City of Huntington Beach (the "City") on December 16, 1996, as amended, and the General Plan of the City approved by Council of City on May 13, 1996, by Resolution No. 96-36, as amended. Copies of the Redevelopment Plan and General Plan are on file with the City Clerk of the City of Huntington Beach at its offices as a public record and which are incorporated herein by reference. Page 1 of 9 3. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that the Property shall be devoted only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan, the City's General Plan, the City Municipal Code and this Grant Deed, whichever document is more restrictive. 4. Grantee hereby covenants and agrees for itself, its successors, transferees, assignees and every successor in interest to the Property that: (a) Solely at Grantee's expense, Grantee or Grantee's successor in interest shall reasonably maintain the improvements on the Property in good condition and appearance. Grantee shall keep the Property reasonably free from any accumulation of graffiti, debris and/or waste materials; (b) Grantee shall also maintain the landscaping on the Property in a reasonably healthy condition; and (c) If, at any time, Grantee fails to maintain the Property as required by this Section, and such failure is not corrected within thirty (30) days after the date of written notice from Agency, either Agency or the City may perform the necessary landscape or other maintenance, or other actions and Grantee shall pay all costs incurred for such maintenance. 5. From ten (10) years from the date of recording of this deed, Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall not apply to the City for any land use entitlement or building permit for the Property without first applying to and obtaining a certificate of compliance from the Executive Director of the Agency or his designee that the proposed land use or building permit is consistent with the Redevelopment Plan. Agency shall not unreasonably withhold issuance of the certificate of compliance. Agency has the right, at its election, to reenter and take possession of the Property, with all improvements thereon, and terminate and revest in Agency the Property if Grantee (or its successors, transferees or assignees) shall obtain any land use entitlement or building permit for the Property without obtaining prior approval from the Agency Executive Director that the proposed use or building permit complies with the Redevelopment Plan. 6. Agency makes no warranty as to the presence or absence of any Environmental Contamination of the Property. Grantee takes the Property "as is." Grantee is responsible for determining the extent of any Environmental Contamination to the Property, and shall comply with all Environmental Laws in remediating and disposing of any Environmental Contamination of the Property. The term "Environmental Contamination" means contaminants or other toxic or hazardous substances, materials, constituents or wastes, including without limitation, all the following: any hazardous, toxic, corrosive, reactive, ignitable, carcinogenic or reproductive toxic substance, material, product, compound, chemical or waste (including, without limitation, petroleum, including crude oil or any fraction thereof, asbestos or asbestos-containing materials, flammable explosives, radioactive materials, and polychlorinated biphenyls) as defined in or Page 2 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc regulated by any Environmental Laws. "Environmental Laws" mean the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.) and any other Federal, state or local statutes or the regulations regarding Environmental Contamination. 7. Grantee shall furnish or cause to be furnished to the Agency the following certificates of insurance in connection with any work of improvement to the Property pursuant to issuance of a certificate of compliance: (a) General Liability Insurance. Commercial general liability insurance, including Broad Form Property Damage, Personal Injury Liability, Product and Completed Operations Liability, Fire Legal Liability, Business Automobile Bodily Injury and Property Damage Liability extending to owned, non-owned and hired vehicles of Grantee or the General Contractor used in performance of any Grantee's obligations hereunder, amended as necessary to comply with governmental requirements. Such coverage shall insure on an occurrence basis against claims for "personal injury" and "property damage," including but not limited to bodily injury, death or property damage occurring upon, in or about the Property, including construction and staging areas, or any adjoining sidewalk, streets, and passageways. Such coverage shall take effect and afford protection on or prior to the issuance of any certificate of compliance. Such policy shall have an initial minimum coverage limit per occurrence of not less than $3,000,000 with respect to personal injury or death to any one or more persons or damage to property (i.e., combined single limit), and carry a deductible per occurrence of not more than $25,000. (b) Worker's Compensation Insurance. Worker's compensation insurance, to be carried by Grantee or the Grantee's General Contractor, in an amount and form sufficient to meet all applicable governmental requirements, and employer's liability coverage to a limit of not less than $1,000,000, with respect to personal injury or death to any one or more persons or damage to property. Such policies shall cover all persons providing labor or services to or on behalf of Grantee and the general contractor, and all risks to such persons arising out of construction, use or occupancy of the Property. 8. Each Insurance Policy required under Section 7 shall: (a) Be in form and substance as is then standard in California for policies of like coverage; (b) Be issued by insurance carriers qualified and licensed to engage in the insurance business in the State of California and having a current Policyholder's Management and Financial Size Category Rating of not less Page 3 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc than "A V according to A.M. Best's Insurance Reports Key Rating_Guide (unless such rating is not commercially available at a reasonable cost, as reasonably determined by the Director) or if such rating system shall cease, then of recognized financial responsibility approved by the Agency in writing; (c) Provide coverage on an occurrence basis; (d) Contain a waiver by the insurer of the right of subrogation against Agency, the City and their respective board members, officers, employees, agents and representatives. (e) Include the following endorsements: (i) Additional named insured: "The City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees are added as additional name insureds with respect to this subject project and contract with the Agency." (ii) Notice: "Said policy shall not terminate nor shall it be canceled or the coverage reduced until after thirty (30) days written notice is given to the City and the Agency." (iii) Primary coverage: "Said policy and coverage as is afforded to the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach, their elective and appointive boards, officers, agents and employees shall be primary insurance and not contributing with any other insurance maintained by the City of Huntington Beach or the Redevelopment Agency of the City of Huntington Beach." 9. Grantee covenants that, for itself and its successors, its assigns and every successor in interest to the Property, Grantee shall protect, defend, indemnify and hold harmless City, Agency, and their officers, employees and agents from and against any and all claims, damages, losses, expenses,judgments, demands and defense costs (including, without limitation, costs and fees of litigation (including arbitration) of every nature or liability of any kind), arising out of the Property, including, but not limited to any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation Page 4 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc (including arbitration) of every nature or liability of any kind), arising out of, resulting from, or in connection with, directly or indirectly, any and all Environmental Contamination. 10. Grantee covenants that for itself and its successors, its assigns and every successor in interest to the Property, it agrees to and shall indemnify and hold the Agency, the City, and their officers, employees and agents harmless from and against all liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person directly or indirectly caused by any acts done thereon or any errors or omissions of the Grantee or its agents, servants, employees or contractors, except for the active negligence or willful misconduct of the Agency. 11. Grantee covenants by and for itself and any successors, transferees and assignees that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Grantee itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. Grantee shall refrain from restricting the rental, sale or lease of the Property on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such 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 assignees, 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 race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, subtenants, sublessees or vendees in the land herein conveyed. 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 assignees, 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 race, color, creed, religion, sex, marital status, national origin, or ancestry Page 5 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc 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." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee 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, subtenants, sublessees or vendees of the premises." 12. All conditions, covenants and restrictions contained in this Grand 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 Agency, its successors, transferees, and assignees, and the City and its successors, transferees and assigns, against Grantee, its successors, transferees and assignees, to or of the Property conveyed herein or any portion thereof or any interest therein, and any party in possession or occupancy of the Property or portion thereof. 13. All of the terms, covenants and conditions of this Grant Deed shall be binding upon Grantee and its permitted successors, transferees and assignees. Whenever the term "Grantee" is used in this Agreement, such term shall include any permitted successors, transferees and assignees. Notwithstanding anything to the contrary in this Grant Deed including, without limitation, any reference in this Grant Deed to "successors," "transferees"or "assignees"or any reference herein to any covenants, conditions and restrictions running with the land. Every other covenant and condition and restriction of this Grant Deed shall remain in effect until the end of the Redevelopment Plan. The covenants against discrimination set forth in paragraph (5) of this Grant Deed shall remain in perpetuity. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. 14. In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that Agency is deemed the beneficiary of the terms and provisions of this Deed and of the covenants running with the land, for and in its own right and for the purposes of Page 6 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit the covenants running with the land have been provided, without regard to whether Agency has been, remains, or is an owner of any land or interest therein in the Property. Agency shall have the right, if the covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Redevelopment Plan Project Area, or any person or entity having any interest in any other such realty. 15. 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 or change any mortgage or deed of trust or security interest placed on the property; 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, and further that if the Agency exercise its rights to re-enter and take possession of the property, it shall do so subject to any mortgage, deed of trust or security interest. 16. Both Agency, its successors, transferees and assignees, and Grantee, and the successors, transferees and assignees of Grantee in and to all or any part of the fee title to the Property shall have the right with the mutual consent of Agency to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. However, Grantee and Agency are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. [SIGNATURES ON THE FOLLOWING PAGE] Page 7 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc IN WITNESS WHEREOF, Agency and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized this day of , Agency-Agency: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic DATED: Chairperson ATTEST: DATED: Agency Clerk APPROVED AS TO FORM: DATED: Agency General Counsel Grantee hereby accepts this Grant Deed, subject to all of the matters hereinbefore set forth. a California corporation By: DATED: print name ITS: (circle one) Chairman/President/Vice President AND By: DATED: print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary—Treasurer Page 8 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, , personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Page 9 of 9 CADocuments and Settings\biggsd\Local Settings\Temporary Internet Files\OLK59\438 Main Street.doc Offer to Purchase AT TACHMENT #5 WAR. 27. 2003 8:511A�M MargnMet vanHerk 714 Boa-oao- 5830 P. 2 "• . February 20,2003 Curt Stadler Lee&Associates 3991 MacArthur Blvd.#100 Newport Beach,CA 92660 Curt: Please find the following offer to purchase the property located at 438 Main St. Huntington Beach. As you can see by the offer the buyer is a straight to the point businessman. Here is a little background on him He is a long time resident of Huntington Beach. He owns a home in the downtown area as well as a business in Huntington Beach. He is the owner and CEO of PCX Inc. established in 1995. He currently has 23 employees and is growing. Last year he purchased 2 buildings on Gothard St. (an excess of 26,000 sq ft.,) to accomodate his growing company and need for warehouse space. PCX. Inc currently has a bank account balance of approximately$800,000. LGB Inv, has approximately$820,000 as well as S60,000 in his own personal account. His desire is to leverage into the property to allow him ample cash to rehab the property staying in the theme of the downtown area.To take the property from it's outdated and deteriorated state to one of pride and desirability for the potential businesses he would lease to. He takes great pride in living and running a large business in Huntington Beach, He is impressed by all the growth that has taken place in the last 10 years. Buying this property- and working with the city to continue to improve the downtown area would give him a great deal of personal satisfaction. In your discussion with the city please let them know that he would be interested in any financing or redevelopment funds that may be available as it pertains to this property. We will be glad to provide any additional inforrnation the city may require. I hope to hear from you soon. I can be reachcd at 714 969-1516 and my fax number is 714 969-6689. . Thank you for your assistance. 0.1-A 1Z__ Margaret Van Berk Lifestyle Homes 16912 Werner Ave, #201 Huntington Beach, CA 92649 MAR-27-2003 09:07 9E% P.02 rerivimn. L/. LUUj 8:S;A;ti1 Margaret VanHerk . . � , . �/i9 J0:7-000NO. 583G P. 4 C A L I F O IZ r.-A COMMERCIAL PRC iTY PURCHASE A(SMGEM6,T ASSOCIATION AND JOINT ESCROW INSTRUCTIONS _ OF IZEALTORS( (NON-RESIOENTIAL) ! .� (C.A.A.Form CPA,Revised 10102) , Oak Cafdornia. 3 1. OFFER: A. THIS IS AN OFFER FROM (-Buyer"). D Individual(s), 0 A Corporation, C1 A Partnership, O An LLC, An LLP or Q1 Other a S. THE REAL PROPERTY TO BE ACOUIRED Is described as ses S Parcel No. situated in try Coun o1 Califoni a, ('Proper y'1. s. C. THE PIJRCHASE PR offered is Dolfai S D. CLOSE OF ESCROW shall occur on (data)(or0 Days After Acceptance). Z• FINANCE TERMS:Obtaining the loans below Is a contingency of this Agreement unless:(1)eltner 2L or 2M is checked below;•or (11)otherwise agreed in writing.Buyer shall act diligently and in good faith to obtain the designated loans.Obtaining deposit,down ' payment and closing costs Is not a contingency.Buyer represents that funds will a good when deposited with Escrow Holder. A. INITIAL DEPOSIT.Buyer has given a deposit In the amount of to the agent submitting the offer(or to O_ ,by Personal Check (or O ), made payable to which shall be held uncashed until Acceplarwe and then deposited In 3 bu ass days after Acceptance or 0 ,with Escrow Holder, f or❑into Broker's trust account. _ 4 B. INCREASED DEPOSIT:Buyer shall deposit with Escrow Holder an increased deposit In the amount of..$ within_•Days AfterAcceptance,orp / �d C. FIRST LOAN IN THE AMOUNT OF. .. . .. .. . . . . .. . . ... .. .. .. .. . . . . . . . . . . . . . . . . .... . . . . .3 (� NEW First Deed of Trust in favor of I Lander, ❑ Seller, OR 0 ASSUMPTION of(or 0 "subject tn")Existing First Deed of Trust -------. encumbering the Property, securing a note payable at maximum interest of % fixed rat , or /e initial adj table rate with a maximum interest rate of %, balance due in I years,amortited over years.(If checked: O and with a margin not to exceed 1'e,tied to the following index )Buyer shall pay loan fees/points not to ix%eed Z Additional terms D. SECOND LOAN IN THE AMOUNT OF . . .. . . . . . . . . . ... . . .. . . . . . . .. . . . . . . . .. . . ... .. . . . .. .5 e NEW Second Deed of Trust In favor of ❑ Lander, 0 Seller, btr OR 0 ASSUMPTION of(or O 'subject to")Existing Second Deed of Trust encumbering the Property,securing a note payable at maximum Interest of %fixed rate,or ----. Mal adjustable rate with a ma)imurn.interest rate of %,balance due in years,amortized 6_ over years. (if checked:❑ and with a margin not to exceed %, tied to the following Index: )Buyer shall pay loan fees/points not to exceed Additional terms E. ADDITIONAL FINANCING TERMS: . . • •• • • •• • .• • • • ••• Y- F. BALANCE OF PURCHASE PRICE(not including oosls of obtaining loans and other dosing costs)In the amount of . ..b � • to be deposited with Escrow Holder within sufficient time to close escrow. ' G. PURCHASE PRICE(TOTAL):.. . --. . . . . a: H. LOAN APPLICATIONS: Within 7(or O ��Days After Acceptance, Buyer shall provide Seller a letter from iender or mortgage loan broker stating that, based on a review of Buyer's written application and credit report. Buyer is prequalified or preapproved for any NEW loan specified above. I. VERIFICATION OF DOWN PAYMENTAND CLOSING COSTS: Buyer(or Buyer's lender or loan broker pursuant to 2H)shall, within 7(or G +)Days After Acceptance,provide Wer written verification of Buyer's clown payment and dosing costs. J. LOAN CONTINGENCY REMOVAL(1)Within 17(or O _�)Days After Acceptance Buyer shall,as speclFied in paragraph 17,remove the loan contingency or cancel this Agreement;OR(Il)(it checked) 0 loan contingency shall remaln in effect until the designated loans are funded. IL APPRAISAL CONTINGENCY AND REMOVAL;This Agreement Is(OR,it checked,0 Is NOT)contingent upon the Properly appraising at no less than the specified purchase price. Buyer shall, as specified in paragraph 17, remov0 the appraisal contingency or cancel Iris Agreement when the loan contingency is removed(or,if checked O,within 17(or 0 __J Days Alter Acceptance). tTo wOJrfOh!ISM I of Rre tinned SIe196(;'ila 17 u.&Code)forum Ns+u-reulhoriAeu Buyer's Initials a—)I raprodutdon of whys farm,or any potion Irareol,ny photactuy inorhlr•o or uny othor Seller's Initials f 1( ) maeno. Irlduding tamifgila or compurarlted farmels. CApyrighl 0 1991-2002. CALIFORNIA'ASSOCIATION OF RFAtTOR9rA,INC.ALL RIGHTS RESEAvFD, Reviewed by Date onrrAua�*• CPA REVISED 10/02(PAGE 1 OF 10) Print Date BDC Oct 02 MAR-27-2003 09:08 96x 0 MA r,eIMAK. 27. 20C3 8:52A;y Mar et VanFierk - r I1't Lrbb—Gba-. , 583C P. 5 r- PpopertyAddress: � �� sate: NO. L U NO LOAN CON1i&MCY(If checked):Obtaining any loan,in paragraphs 2C,2D,2E or elsewhere in inis Agreement.is NOT a contingency of this Agreement.If Buyer does not obtain the loan and as a result Buyer does not purchase the Property.Seller may be entitled to Buyer's deposit or other legal remedies, td. ❑ALL CASH OFFER(It checked):No loan is needed to purchase the Property.Buyer shall,within 7(or C __J Days After Acceptance,provide Seller written verification of sufficient funds to close this transaction. N. SELLER FINANCING:For any Seller financing designated above, Buyer is to execute a note secured by a deed of trust in favor of Seller,on the terms and conditions set forth in the attached addendum(C.A.R.Form SFA). O. ASSl1f1AEU OR"SUBJECT TO"PJ MtCING:Seller represents that Seller is not delinquent on any payments due on any loans. Soifer shall,within the time specified in paragraph 17,provide Copies of all applicable notes and deeds of trust,loan balances and current Interest rates to Buyer. Buyer shall then, as specified in paragraph 17, remove this contingency or cancel this Agreement. Differences between estimated and actual loan balances shall be adjusted at Close Of Escrow by cash down payment. Impound accounts, if any, shall be assigned and charged to Buyer and credited to Seder. Seller is advised that Buyer's assumption of an existing loan may not release Seller from liability an that loan. 11 the Property is acquired subject to an existing loan, Buyer and Seller are advised to consult with legal counsel regarding the abtllcy of an existing lender to call the loan due,and the consequences thereof. 3, CLOSING AND OCCUPANCY A. Seller-Occupled or Vacant Units: Occupancy shall be delivered to Buyer at AfWPW ;:i on the date of Close Of Escrow;C) on : or❑ no later than Days After Close Of E6CIOw. (C.A.R. Form PAA. paragraph 2.) if transfer of title and occupancy do not occur at the same time. Buyer and Seller are advised to: p) enter into a written occupancy agreement;and(11)consult with their Insurance and legal advisors. 6. Tenant Occupied Units:Possession and occupancy,subject to the rights of tenants under existing leases,shall be delivered to Buyer on Close Of Escrow. C. At Close Of Escrow,Seiler assigns to Buyer any assignable warranty rights for items included in the sale and shall provide any avallable Copies of such warranties.Brokers cannot and will not determine the assignability of any warranties. D. At Close Of Escrow,unless otherwise agreed in writing,Seller shall provide keys and/or means to operate all locks,mailboxes, security systems,alarms and garage door openers.if the Property is a unit In a condominium or located in a common-interest subdivision,Buyer may be required to pay a deposit to the Owners'Assodatlon('OA")to obtain keys to accessible OAfacifilies. 4. SECURITY DEPOSITS:Security deposits.It any, to the extent they have not been applied by Seller in accordance with any rental agreement and current Law, shall be transferred to Buyer on Close Of Escrow. Seller shall notify each tenant, in compliance with the Civil Code. S. ALLOCATION OF COSTS(if checked):Unless otherwise specified here,this paragraph only determines who is to pay for the report, inspection,test or,service mentioned.If not specified here or elsewhere in this Agreement,the determination of who is to pay for any work recommended or identified by any such repon,inspection,test or service is by the method specified in paragraph 17. A. INSPECTIONS AND REPORTS: t (1) ❑ Buyer Cl Seller shall pay for sewer connection,if required by Law prior to Close Of Escrow (2) ❑ Buyer CO Seller shall pay to have septic or private sewage disposal system inspected (3) Q Buyer ❑Seller shall pay to have domestic wells tested for water potability and productivity (4) U Buyer '(.,Seller shall pay for a natural hazard zone disclosure repArt prepared t)y (S) ❑ Buyer CPoller shall pay for the following inspection or report . 7/h-i^^1_71 7 (6) ❑ Buyer U Seller shall pay for the following inspection or report B. GOVERNMENT REQUIREMENTS AND RETROFIT- (1) 0 Buyer 0 Seller shalt pay for smoke detector Installation and/or water heater bracing, It required by Law. Prior to Close Of Escrow, Seller shall provide Buyer a written statement of compliance in accordance with state and local Law, unless exempt. (2) D Buyer C Seller shall pay the cost of compliance with any other minimum mandatory government retrofit standards. inspections find reports if required as a condition of closing escrow under any Law, (3) ❑ Buyer O Seller shall pay for installation of approved fire exiingulsher(s),sprinkler(s),and hose(s),if required by Law, which shall be installed prior to Close Of Escrow.Prior to Close Of Escrow Seller shalt provide Buyer a written statement of compliance,if required by Law. C. ESC OW AND TITLE: (1) ' Buyer Seller shalt pay e w fee .—. Escrow Holder shelf be XU p A4 A (2) O Buyer 15.Seller shaft pay for owner insurance po'cy specified)n paragraph 16 Owner's title policy to be Issued by lh-4_. i AuAA (Buyer shall pay for any title Insurance policy insuring Buyers lender,unless otherwise agreed In writing.) D. OTHER COSTS: (1) ❑ Buyer oiler shall pay County transfer tax or transfer fee (2) O Buyer ❑Seller shall pay City transfer tax or transfer fee _ (3) ❑ Buyer ❑Seiler shall pay OA transfer fees — (4) ❑ Buyer ❑Seller shall pay OA document preparation fees (5) ❑ Buyer C Seller shall pay for (6) ❑ Buyer Cl Seller shall pay for Buyer's Initials Seller's Inldat6 rr Cgvy1yin1 N�99�-[UUY..CnurO,�Nu;..:SbC�anW�<�!.ns:Al.rc+Flsr.,iNt Reviewed by Date CPA REVISED 1WO2(PAGE 2 OF 10) MAR-27-2003 09:06 FeNAR. 27. 20C3 8.524 Harr—et VanHerk 714 -969-ssFN0. 5830 P. 6 P' S Property-Address: ' (.Q,Utt, ` Date: C. NOTE TO BUYER; You are strongly advised to conduct Investigation= of the enure Property In order to determine Its present condition since Sailer may not be aware of all defects affecting the Property or other factors that you consider important Property Improvements may not be built according to code, In compliance with current Law, or have had permits Issued. D. NOTE TO SELLER;Buyer has the right to inspect the Property and,as specified In paragraph 17,based upon information discovered In those inspections: (i)cancel this Agreement;or(t)request that you make Repairs or take other action. 12. ITEMS INCLUDED AND EXCLUDED: A. NOTE TO BUYER AND SELLER: Items listed as Included or excluded In the MLS, flyers or marketing materials are not included in the purchase price or excluded from the sale unless specified In 128 or C. B. ITEMS INCLUDED IN SALE: (1)All EXISTING fixtures and fittings that are attached to the Property: (2)Existing electrical, mechanical, lighting,plumbing and heating fixtures,ceiling fans, Fireplace inserts, gas logs and grates, solar systems,built-in appliances.window and door screens,awnings,shutters,window coverings,allachec floor coverings, television antennas, satellite dishes, private integrated telephone systems, air coolers/conditioners. pool/spa equipment. garage door openers/remote controls, mailbox. In-ground landscaping, trees/shrubs. water softeners, water purifiers, security srtems/alanns: (3)A complete inventory of all personal property of Seller currently used in the operation of the Property and included in the purchase price shall be delivered to Buyer within the time specified in paragraph 17. (4)Seiler represents that all Items Included in the purchase price are,unless otherwise specified,owned by Seller.Within the time specified in paragraph 17,Seller shall give Buyer a list of fixtures not owned by Seller. (5)Seller shall deliver title to the personal property by Bill of Sale, free of all liens and encumbrances, and without warranty of condition. (6)As additional security for any note in favor of Seller for any pan of the purchase price. Buyer shall execute a UCC-t Financing Statement to be flied with the Secretary of State, covering the personal property Included in the purchase, replacement thereof,and Insurance proceeds. C. ITEMS EXCLUDED FROM SALE: 13. BUYER'S INVESTIGATION OF PROPERTY AND MATTERS AFFECTING PROPERTY: A. Buyer's acceptance of the condition of, and any other matter affecting the Property is a contingency of this Agreement, as specified in this paragraph and paragraph 17.Within the time specified In paragraph 17, Buyer shall have the righl.at Buyers expense unless otherwise agreed, to conduct inspections. Investigations, tests, surveys and other studies ('Buyer Investigations"), including,but not limited to, the right to.(i)inspect for lead-based paint and other lead-based point hazards; (li)inspect for wood destroying pests and organisms: (Ili) confirm the insurability of Buyer and the Property; and (tv) satisfy Buyer as to any matter of concern to Buyer. Without Seller's prior written consent, Buyer shall neither make nor cause to be made:(1)Invasive or destructive Buyer Investigations: or(it)Inspections by any governmental building or zoning inspector, or government employee.unless required by Law. B. Buyer shall complete Buyer Investigations and,as specified in paragraph 17,remove the contingency or cancel this Agreement. Buyer shalt give Seiler, at no cost, complete Copies of all Buyer Investigalion reports obtained by Buyer. Seller shall make Property available for all Buyer Investigations.Seller shall have water,gas,electricity,and all operable pilot lights on for Buyer's Investigations and through the date possession is made available to Buyer. 14. REPAIRS; Repairs shall be completed prior to final verification of condition unless otherwise agreed In writing. Repairs to be s performed at Seller's expense may be performed by Seller or through others,provided that the work complies with applicable Law. including governmental permit, Inspection and approval requirements. Repairs shall be performed in a good, skillful manner with materials of quality and appearance comparable to existing materials.It is understood that exact restoration of appearance or cosmetic items following all Repairs may not be possible.Seller shall:(i)obtain receipts for Repairs performed by others:(11)prepare a written statement indicating the Repairs performed by Seller and the date of such Repairs:and(ill)provide Copies of receipts and statements to Buyer prior to Mal verification of condition. 15. BUYER INDEMNITY AND SELLER PROTECTION FOR ENTRY UPON PROPERTY`. Buyer shall: (1) Keep the Property free and clear of liens;(in Repair all damage arising from Buyer Investigations:and(tin indemnity and hold Seller harmless from all resulting liability, claims,demands, damages and costs. Buyer shall carry,or Buyer shall require anyone acting an Buyer's behalf to carry policies of liability, workers' compensation and other applicable insurance. defending and protecting Seller from liability for any Injuries to persons or property occurring during any Buyer Investigations or work done on the Property at Buyer's direction prior to Close Of Escrow. Seiler is advised that certain protections may be afforded Seller by recording a-Notice of Non-Responsibility' (C.A.R. Form NNR) for Buyer Investigations and work done on the Property at Buyer's direction. Buyer's obligations under this paragraph shall survive the termination of this Agreement. 16. TITLE AND VESTING: A. Within the time specified in paragraph 17, Buyer shall be provided a current preliminary(title)report,which is only an offer by the title insurer to issue a policy of He insurance and may not contain every item affecting title.Buyer's review of the preliminary report and any other matters which may affect title are a contingency of this Agreement as specified in paragraph 17. B. Title Is taken in its present condition subject to all encumbrances,easements.covenants,motions,restrictions,rights and other matters,whether of record or not,as of the date of Acceptance except:(i)monetary liens of record unless Buyer Is assuming those obligations of taking the property subject to those obligations:and(11)those matters which Seller has agreed to remove in writing. C. Within the time specified in paragraph 17. Seiler has a duty to disclose to Buyer all matte► own to Seiler affecting line, whether of record or not. Buyers Initials )( Seller's Initials t: yy y�ni u iBe9 20��,!.�AUFONyut�.iUGrnriON JI At�I.rURy4 rvl: AQ'VIawed by,_Date CPA REVISED 10102(PAGE 4 OF 10) on�aruull MAR-27-2003 09:09 P.06 FeMAR. 21 2003 8:53A:M mart!�rex. vannerK , .� .�.N� 5830 P. ). ' v Property ,Address: 3 0 ' /i.� Date: 7 �0-01U 7D 6. SELLER DISCLOSURES; A. NATURAL AND ENVIRONMENTAL DISCLOSURES: Seller shall, within the time specified in paragraph 17, if required by Law: (i)deliver to Buyer earthquake guides (and questionnaire) and environmental hazards booklet; (11)even if exempt from the obligation to provide an NHD, disclose If the Property Is located In a Special Flood Hazard Area: Potential Flooding (Inundation)Area Very High Fire Hazard Zone;State Fire Responslblfity Area; Earthquake Fault Zone;Seismic Hazard Zone; and(lii)disclose any other zone as required by Law and provide any other information required for those zones. B, ADDITIONAL DISCLOSURES:within the time specified in paragraph 17,Seller shall provide to Buyer,in writing,the following disclosures,documentation and information: (1)RENTAL SERVICE AGREEMENTS: (1) All current leases, rental agreements, service contracts, and other agreements pertaining to the operation of the Property; and (it) a rental statement including names of tenants, rental rates, period of rental, date of last rent increase, security deposits, rental concessions, rebates, or other benefits, It any, and a list of delinquent rents and their duration.Seller represents that no tenant Is entitled to any concession, rebate, or other benefit. except as set forth in these documents. (2)INCOME AND EXPENSE STATEMENTS: The books and records, including a statement of income and expense for the 12 months preceding Acceptance. Seller represents that the books and records are those maintained in the ordinary and n anal course of business,and used by Seller in the computation of federal and state income tax returns. (3) TENANT ESTOPPEL CERTIFICATES: (11 checked)Tenant estoppel certificates(C.A.R.Form TEC)completed by Seller 4r, Seller's agent,and signed by tenants, acknowledging:(1)that tenants'rental or lease agreements are unmodified and in force and effect(or If modified,stating all such modifications);(11)that no lessor defaults exist:and(111)stating the amount of any prepaid rent or security deposit. (4)SURVEYS, PLANS AND ENGINEERING DOCUMENTS: Copies of surveys, plans. specifications and engineering documents,if any,in Seller's possession or control. (5)PERMITS. If in Seller's possession, Copies of all permits and approvals concerning the Property, obtained from any governmental entity,including,but not limited to.certificates of occupancy,conditional use permits,development plans,and licenses and permits pertaining to the operation of lne Properly. (6)STRUCTURAL MODIFICATIONS:Any known structural additions or alterations to, or ine Installation. alteration, repair or replacement of,significant components of the structure(s) upon the Property. (7)GOVERNMENTAL COMPLIANCE:Any Improvements, additions, alterations or repairs made by Seller. or known to Seller to have been made,without required governmental permits,final Inspections,and approvals. (9)VIOLATION NOTICES.,Any notice of violations of any Law filed or issued against the Property and actually known to Seller. (9)MISCELLANEOUS r'tEMS:Any of the following, if actually known to Seller:(I)any current pending lawsult(s).Investigatlon(s), lnquiry(iss), ac6on(s), or other proceeding(s) affecting the Property, or the right to use and occupy it: (11) any unsatisfied mechanic's or materiatmaws lien(s)affecting the Property;and(ill)that any tenant of the Property Is the subject of a bankruptcy, 7. iJ ENVIRONMENTAL SURVEY (If checked): Within Days After Acceptance, Buyer shall be_provided a phase one environmental survey report paid for and obtained by 0 Buyer C-1 Seller.Buyer shall then,as specified in paragraph 17. remove this contingency or cancel this Agreement. 9. CONDOMINIUM/PLANNED UNIT DEVELOPMENT DISCLOSURES: A. SELLER HAS:7(or CJ )Days After Acceptance to disclose to Buyer whether the Property is a condominium,or located In a planned unit development or other common interest subdivision. B. If Properly is a condominium,or located In a planned unit development or other common Interest subdivision, Seller has 3(or❑--__ ) Days After Acceptance to request from the CA(C.A,R. Form HOA):(1)Copies of any documents required by Law;(If)disclosure of any pending or anticipated claim or litigation by or against the OA; (Ili) a statement containing the location and number of designated parking and storage spaces;(iv) Copies of the most recent 12 months of CIA minutes for regular and special meetings; and (v) the names and 'contact Information of all ONs governing the Property. (Collectively. "Cl Disclosures.")Seller Shall itemize and deliver to Buyer all Cl 01sclosures received from the OA and any CI Disclosures in Seller's possession.Buyer's approval of CI Disclosures is a contingency of this Agreement as specified in paragraph 17. 9. SUBSEQUENT DISCLOSURES: In the event Seller, prior to Close Of Escrow, becomes aware of adverse conditions materially affecting the Property. or any material Inaccuracy in disclosures, information or representations previously provided to Buyer of which Buyer is otherwise unaware,Seller shall promptly provide a subsequent or amended disclosure or notice in writing,covering those Items.However,a subsequent or amended disclosure shall not be required for conditions and material Inaccuracies disclosed In reports ordered and paid for by Buyer. 10. CHANGES DURING ESCROW: A. Prior to Close Of Escrow, Seller may only engage In the following acts, ("Proposed Changes'7. subject to Buyer's rights in paragraph 17:(1)rent or lease any vacant unh or other part of the premises;(li)alter,modify,or extend any existing rental or lease agreement;(iio enter into,alter,modify or extend any service contract(s):or(iv)change the status of the condition of the Property. B. At least 7(or❑__ 1 Days prior to any Proposed Changes.Seller shall give wrtnen notice to Buyer of any Proposed Changes. 11. CONDITIONS AFFECTING PROPERTY: A. Unless otherwise agreed:(n the Property Is sold(a)in its PRESENT physical condition as of the date of Acceptance and (b) subject to Buyer's Investigation rights; (11) the Property, including pool, spa, landscaping and grounds. Is to be maintained in substantially the same condhlon as on the date of Acceptance; and (ill) all debris and personal property not included In the sale shall be removed by Close Of Escrow. B. SELLER SHALL. within the time specified in paragraph 17, DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS affecting the Property,including known Insurance claims within the past five years,AND MAKE OTHER DISCLOSURES REQUIRED BY LAW. Buyer's Initlais I I 1 Seller's Millais (_ l( ) Caprl'9^t!?1993•2002.CALIPGFINIAASSOCIAr1IIN QF raI;ALT(II;S0 INC Reviewed Date orunw 0 CPA REVISED IGM2(PAGE 3 OF 10) erra+win ��ecTcci rn�v MAR-27-2003 09:10 P.O? F°MAR. 27. 2003 8:53AM Mar et vanHertc rl•r a05-ooc- 5830 P 8 r. , Properly Address: 3 �'r •�-Bate: - 0. At Close Of Escrow, Buyer Shall receive a grant deed conveying title (or, for stock cooperative or long-term lease, an assignment of stock certificate or of Seller's leasehold Interest),including oil,mineral and water rights If currently owned by Seller.Title shall vest as designated In Buyer's supplemental escrow instructions.THE MANNER OF TAKING TITLE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL. E_ Buyer shall receive a standard Coverage owner's CLTA policy of title insurance. An ALTA policy or the addition of endorsements may provide greater coverage for Buyer. A title company, at Buyer's request, can provide information about the availability, desirability, coverage, and cost of various title insurance coverages and endorsements, It Buyer desires title coverage other than that required by this paragraph, Buyer shall instruct Escrow Holder in writing and pay any increase in cost. 17. TIME PERIODS; REMOVAL OF CONTINGENCIES;CANCELLATION RIGHTS:The following time periods may only be extended,altered,modified or changed by mutual written agreement.Any removal of contingencies or cancellation under this paragraph must be In writing(C.A.R. Form FIRCR). A. SELLER HAS: 7(or Z?_J Daya After Acceptance to dclivor to Buyer all reports, disclosures and information for which Seller is responsible under paragraphs 5, 6A and B.BA, 118, 12B (3) and(4)and 16. B. BUYER HAS: 17(or C,�)Days After Acceptance, unless otherwise agreed in writing,to: (1) complete all Buyer Investigations; approve all disclosures, reports and other applicable information. which Buyer receives from Seller:and approve all matters affecting the Property(Including lead-based paint and lead-based paint hazards as well as other information specified in paragraph 6 and insurability of Buyer and the Property). (2)Within the time specified in 178(1), Buyer may request that Seller make repairs or take any other action regarding the Property(C.A.R. Form RR).Seller has no obligation to agree to or respond to Buyer's requests. (3)By the end of the time specified in 17B(1) (or 2J for loan contingency or 2K for appraisal contingency), Buyer shall remove. in writing, the applicable contingency (C.A.R. Form RRCR) or cancel this Agreement. However, if the following inspections, reports or disclosures are not made within the time specified in 17A, then Buyer has S (or :, _ )Days after receipt of any such Items, or the time specified in 178(1), whichever is later, to remove the applicable contingency or cancel this Agreement In writing:(i)govemment•mandaled inspections or reports required as a condition of dosing;(ii)Common Interest Disclosures pursuant to paragraph BB;(Ili)a subsequent or amended disclosure pursuant to paragraph 9; (Iv) Proposed Changes pursuant to paragraph 108; and (v) environmental survey pursuant to paragraph 7. C. CONTINUATION OF CONTINGENCY OR CONTRACTUAL OBLIGATION;SELLER RIGHT TO CANCEL: (1)Seller right to Cancel: Buyer Contingencies: Seller, after first giving Buyer a Notice to Buyer to Perform (as specified below),may cancel this Agreement in writing and authorize return of Buyer's deposit if,by the time specified in tho Agreement, Buyer does not remove in writing the applicable contingency or cancel this Agreement. Once all contingencies have been removed, failure of either Buyer or Seller to close escrow in time may be a breach of this Agreement. (2)Continuation of Contingency: Even after the expiration of the time specified in 1713(1). Buyer retains the right to make requests to Seller, remove in writing the applicable contingency or cancel this Agreement until Seller cancels pursuant to 17C(1). Once Seller receives Buyer's written removal of all contingencies, Seller may not cancel this Agreement pursuant to 17C(1). (3)Seller right to Cancel: Buyer Contract Obligations:Seller,after first giving Buyer a Notice to Buyer to Perform(as specified below),may cancel this Agreement in writing end authorize return of Buyers deposit for any of the following reasons:()))I Buyer falls to deposit funds as required by 2A or 28;(ii)if the funds deposited pursuant to 2A or 2B are not good when deposited; (Ili) if Buyer fails to provide a letter as required by 2H; (iv) if Buyer fails to provide verification as required by 21 or 2M; (v)if Seller reasonably disapproves of the verification provided by 21 or 2M;(vi) It Buyer falls to return statutory disclosures as required by paragraph SA(2), or(vii)if Buyer fails to sign or initial a separate liquidated damage form for an increased deposit as required by paragraph 21. Seller is not required to give Buyer a Notice to Perform regarding Close Of Escrow. (4)Notice To Buyer To Perform:The Notice to Buyer to Perform(C.A.R. Form NBP)shall(i)be in writing;(li)be signed by Seller and(ill) give Buyer at least 24 (or r )hours (or until the time specified in the applicable paragraph, whichever occurs last)to take the applicable action.A Notice to Buyer to Perform may not be given any earlier than 2 Days Prior to the expiration of the applicable time for Buyer to remove a contingency or cancel the Agreement or most an 17C(3)obligation. D. EFFECT OF BUYER'S REMOVAL OF CONTINGENCIES:If Buyer removes, In writing,any contingency or cancellation rights, unless otherwise specified in a separate written agreement between Buyer and Seller, Buyer shall conclusively be deemed to have. (1) completed all Buyer Investigations, and review of reports and other applicable information and disclosures pertaining to that contingency or cancellation right; (11) elected to proceed with the transaction; and (iil) assumed all liability, responsibility,and expense for Repairs or corrections pertaining to that contingency or cancellation right. or for inability to obtain financing. E. EFFECT OF CANCELLATION ON DEPOSITS: If Buyer or Seller gives written notice of cancellation pursuant to rights duly exercised under the terms of this Agreement, Buyer and Seller agree to Sign mutual instructions to cancel the sale and escrow and release deposits,teas fees and costs,to the party entitled to the funds. Fees and costs may be payable to service providers and vendors for services and products provided during escrow. Release of funds will require mutual Signed release instructions from Buyer and Seller,Judicial decision or arbitration award. SeUe'S niiiai 5 ( ) SeUer's ktiG815 1( ) � QJpyi,gr1112 199V-2Q0'd.CAUFOFWrAA55OCIMION OF AEALT0A$!9 (NC PevteweC by Otte ,an.ns4 CPA REVISED 10M2(PAGE S OF 10) •�»•*��^ S•Acrcm r-riuv MAR-27-2003 09:10 96i P.09 FEyAR. 27.l'u; E:-4AM -Caret VanHerk 714 9GS-GG00 ,830 P. 9 P.8 'Property Address: _ _ r�U� T��_. 16. FINAL VERIFICATION OF CONDITION:Buyer shall have the right make a final inspection of the Properly within 5(or Days Prior to Close 01 Escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm: (1) Ir+e Property is maintained pursuant to paragraph IIA:(II)Repairs have been completed as agreed:and(Ili)Seller has complied with Seller's other obligations under this Agreement. 19. ENVIRONMENTAL HAZARD CONSULTATION:Buyer and Seller acknowledge:(i)Federal,state,and local legislation impose liabllity upon existing and former owners and users of real property. In applicable situations,for certain legislatively defined. environmentally hazardous substances;(R)Broker(s)has/nave made no representation conceming the applicability of any such Law to this transaction or to Buyer or to Seller,except as otherwise indicated in this Agreement;(111)Brokers)has/have made no representation concerning the existence, testing,discovery,location and evaluation offfor.and risks posed by,environmentally hazardous substances,If any,located on or potentially affecting the Property;and IN)Buyet and Seller are each advised to consult with technical and legal experts concerning the existence,testing,discovery,location and evaluation dl/for,and risks posed by. environmentally hazardous substances,it any,located on or potentially affecting the Property. 2e. AMERICANS WITH DISABILITIES ACT The Americans With Disabilities Act(-ADA')prohibits discrimination against individuals with disabilities.The ADA affects almost all commercial facilities and public accommodations.The ADA can require,among other things;that buildings be made readily accessible to the disabled.Different requirements apply to new construction,alterations to existing buildings,and removal of barriers in existing buildings.Compliance with the ADA may require significant costs.Monetary and injunctive remedies may be incurred if the Property is not in compliance.A real estate broker does not have the technical expertise to determine whether a building is in compliance with ADA requirements,or to advise a principal on those requirements. Buyer and Seller ate advised to contact an allorney,contractor,architect,engineer or other qualified professional of Buyer's or Seller's own choosing to determine to what degree,if any,the ADA impacts that principal or this transaction. 21.LIQUIDATED DAMAGES:If Buyer fails to complete this purchase because of Buyer's default,Seller shall retain, as liquidated damages,the deposit actually paid.Buyer and Seller agree that this amount Is a reasonable sum given that It IS Impractical or extremely difficult to establish the amount of damages that would actually be suffered by Seller in the event Buyer were to breach this Agreement.Release of funds will require mutual,Signed release instructions from both Buyer and Seller,Judicial decision or arbitration award. BUYER AND SELLER SHALL SIGN A SEPARATE LIQUIDATED DAMAGES PROVISION FOR ANY INCREASED DEPOSIT(C.A.R,FORM RID). Buyer's Initials Seller's Initials 22. DISPUTE RESOLUTION: A. MEDIATION:Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement,or any resulting transaction,before resorting to arbitration or coup action.Paragraphs 22B(2)and(3)below apply whether or not the Arbitration provision is initialed.Mediation fees,if any,shall be divided equally among the parties involved.If,lot any dispute _ or claim to which this paragraph applies,any parry commences an action without first attempting to resolve the manor through mediation,or refuses to mediate after a request has been made,then that parry shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. B. ARBITRATION OF DISPUTES:(1)Buyer and Seller agree that any dispute or claim In Law or equity arising between them out of this Agreement or arty resulting transaction,which Is not settled through mediation,shell be decided by neutral,binding albitre on,Including and subject to Paragraphs 228(2)and(3)below.The arbitrator shall be a routed judge or lustice,or an atrorney with at beat 5 years of real estate transactional Lew experience,unless the parties mutually agree to a different arbtbalor,who shall render an award In accordance with substantive calffomile Law,The parties shall have the right to discovery In aoeordai whit Code of CNN Procedure§1281.115. In all other respect%the arbitration shall be conducted In accordance with Title 9 of Pan Iti of the CalXomia Cade of Civil Procedure, Judgment upon the award of the arbitraloriI may be entered Into any court having jurisdiction.Interpretation of this agreement to arbitrate shag be governed by the Federal Arbitration Act. (2)EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from mediation and arbitration: (1) a judicial or non-judicial foreclosure or other action or proceeding to enforce a dead of(rust, mortgage, or instatlmenr land sale contract as defined in Civil Code§2985:(li)an unlawful detainer action;(ill)the filing or enforcement of a mechanic's lien:and(iv)any matter that is within the jurisdiction of a probate.small claims,or bankruptcy court.The filing or a court acliom to enable the recording of a notice of pending action,lot order of attachment,receivership,injunction,or other provisional remedies,shall not constitute a waiver of the mediation and arbllratlon provisions. (3)BROKERS:Buyer and Seller agree to mediate and arbitrate disputes or claims involving either or both Brokers.consistent with 22A and B, provided either or both Brokers shall have agreed to such mediation or arbitration prior to,or within a reasonable time alter,the dispute or Claim Is presented to Brokers.Any election by either or both Brokers to participate in mediation or arbitration shall not result in Brokers being deemed parties to the Agreement. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE'ARBITRATION OF DISPUTES'PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CAUFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE'ARBITRATION OF DISPUTES'PROVISION.IF YOU REFUSE _. _..- ---•----.. .._.. ..... .. .. r en to Property Address:_3 �,v. 1 r' ' ��u _ Date: 7—U 23.ASSIGNMENT: Buyer shall not assign all or any part of Buyer's interests in this Agreement without first having obtained the written consent of Seller.Such consent shall not be unreasonably withheld,unless otherwise agreed in writing Any total or partial assignment shall not relieve Buyer of Buyer's obligations pursuant to thls Agreement. 24.SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon, and inure to the benefit of, buyer and Seiler and their respective successors and assigns,except as otherwise provided herein. 25.COPIES:Seiler and Buyer each represent that Copies of all reports,documents,certificates,approvals and other documents that are furnished to the other are true,correct and unaltered Copies of the original documents,if the originals are in the possession of the furnishing party. 26. NOTICES:Whenever notice is given under this Agreement, each notice shall be in writing, and shall be delivered personally, by facsimile, or by mail, ppostage prepaid. Notice shall be delivered to the address set forth below the recipient's signature of acceptance.either party may change its notice address by providing notice to the other party. 27.AUTHORITY:Any person or persons signing this Agreement represent(s) that such person has full power and authority to bind that person's principal, and that the designated Buyer and Seller has full authority to enter into and perform this Agreement. Entering into this Agreement,and the completion of the obligations pursuant to this contract, does not violate any Articles of Incorporation, Articles of Organization, 8 Laws, Operating Agreement, Partnershipp Aggreement or other document governing the activity of either Buyer or Seller. 28.GOVERNINGlAW;This Agreement shall be governed by the Laws of the slate of California. 29.PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall be PAID CURRENT and prorated between Buyer and Seller as of Close Of Escrow:real property taxes and assessments, interest,rents, HOA regular,special,and emergency dues and assessments imposed prior to Close Of Escrow,premiums on insurance assumed by Buyer,payments on bonds and assessments assumed by Byer,and payments on Mello-Roos and other Special Assessment District bonds and assessments that are now a lien.The following items shall be assumed by Buyer WITHOUT CREDIT toward the purchase Price: prorated payments on Mello-Roos and other Special Assessment District bonds and assessments and HOA special assessments that are now a lien but not yet due. Property will be reassessed upon change of ownership.Any supplemenlal tax bills shall be paid as follows:(1)for periods after Close Of Escrow,by Buyer;and(Il for periods prior to Close Of Escrow,by Seller.TAX BILLS ISSUED AFTER CLOSE OF ESCROW SHALL BE HAN�LED DIRECTLY BETWEEN BUYER AND SELLER.Prorations shall be made based on a 30-day month. 30,WITHHOLDING TAXES: Seller and Buyer agree to execute any instrument, affidavit, statement or instruction reasonably necessary to cornppIy�with federal(FfRPTA)and California withholding Law•if required(C.A.R.Form AS). 31.MULTIPLE LISTING SERVIMAOPERTY DATA SYSTEM:If Broker is a participant of a Multiple Listing Service ('MLS')or Property Data Svstem("POS").Broker is authorized to report to the MLS or PDS a pending sale and, r MAR-27-2003 09:11 P.09 MAR. 27. 20'3 8:^ A1.o comply with teaeral(I-IMP-1A)an �allromla wunrtuiumy w".,n..,,NO. ;830,,.,J. 10,.,,,,r. 31,M4LTIPLE LISTING SERA" (PROPERTY DATA SYSTEM:If Broke►ie a participant QI a Multiple Listing Service ('MLS')or Property Dell am("PDS"),Broker is authorized to report to the MLS S a pending sate and, upon Close Of Escrow, rms of this transaction to be Dublished and dlsseminE persons and entities authorized to use the Information on terms approved by the MLS or POS. 32.EQUAL HOUSING OPPORTUNITY: The Property is sold in compliance with federal, state and local anti- discrimination Laws. 33.ATTORNEY FEES: In any action, proceeding or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shalt be entitled to reasonable attorney fees and costa from the non- prevailing Buyer or Seller,exce t as provided in paragraph 22A. 30.SELECTION OF SERVICE PROVIDERS- If Brokers refer Buyer or Seller to persons, vendors, or service or product providers("Providers'),Brokers do not guarantee the performance of any Providers.Buyer and Seller may select ANY Providers of their own choosing. 36.TIME OF ESSENCE- ENTIRE CONTRACT;CHANGES:Time is of the essence.All understandings between the parties are incorpora{ed in this Agreement.Its terms are Intended by the parties as a final,complete and exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement.If any provision of this Agreement is held to be ineffective or Invalid.the remaining provisions will nevertheless be given full force and effect.Neither this Agreement nor any provlslon in It may be extended,amended,modified,altered or changed,except In writing Signed by Buyer and Seller. 36. OTHER TERMS AND CONDITIONS,including attached supplements: A. C Buyer Inspection Advisory(C.A.R.Form BIA B. ❑ Seller Financing Addendum and Disclosure(C.A.R.Form SFA) C. C Purchase Agreement Addendum(C.A.R.Form PAA paragraph numbers: ) 0. ❑ Buyer Intent To Exchange Supplement C.A,R.Form BES) E. ❑ Iler Inten Ex e Supplem t(�. R.F 7 SES) F. .Idanrt °i� heng �,vvyrtlr T I l PA l BuyiW6 millets /rp t 1 seller's Initial¢ ( N I l;yrynptV 6116413.1W2.C.KIFQfINIA 4531]U4110N OF ge.AltnWGr.iHG � CPA REVISED 10/02(PAGE 7 OF 10) Reviewed by Date ,ar,lme wnw"m MAR-27-2003 09:11 75% P.10 MAR. 27. 2M 8:55A,M Mar-nr-et VanHerl< 714 96s-6tN0, 5830 P. 11 P- 1 party Address: Date: ASSIGNMENT Buyer shall not assign all or any part of Buyer's interests in this Agreement without first having obtained the written consent of Seller. Such consent shall not be unreasonably withheld, unless otherwise agreed in writing.Any.total or partial assignment shall not relieve Buyer of Buyer's obligations pursuant to this Agreement. 24. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon, and inure to the benefit of, buyer and Seller and their respective successors and assigns, except as otherwise provided herein. 25. COPIES. Seller and Buyer each represent that Copies of all reports, documents, certificates, approvals and other documents that are furnished to the other are true, correct and unaltered Copies of the original documents, if the orIs are in the possession of the furnishing arty. Zfi. g�na NOTICES. Whenever notice Is given under this Agreement, each notice shall be in writing, and shall be delivered personally, by facsimile, or by mall, postage prepaid. Notice shall be defivered to the address set forth below the recipient's signature of acceptance. Either party may change Its notice address by providing notice to the other party. 27. AUTHORITY: Any person or persons signing this Agreement represent(s) that such person has full power and authority to bind that person's principal, and that the designated Buyer and Seller has full authority to enter into and perform this Agreement. Entering into this Agreement, and the completion of the obligations pursuant to this contract, does not violate any Articles of Incorporation, Articles of Organization, Bylaws, Operating Agreement, Partnership Agreement or other document governing the activity of either Buyer or Seiler. 26. GOVERNING AM This Agreement shall be governed by the Laws of the state of California. 29. PRORATIONS OF PROPERTY TAXES AND OTHER ITEMS: Unless otherwise agreed in writing, the following items shall be PAID CURRENT and prorated between Buyer and Seller as of Close of Escrow: real property taxes and assessments, interest, rents, HOA regular, special, and emergency dues and assessments imposed prior to Close Of Escrow, premiums on insurance assumed by Buyer, payments on bonds and assessments assumed by Buyer, and payments on Mello-Roos and other Special Assessment District bonds and assessments that are now a lion. The following items shall be assumed by Buyer WITHOUT CREDIT toward the purchase price: prorated payments on Mello-Roos and other Special Assessment District bonds and assessments and HOA special assessments that are now a lien but not yet due. Property will be reassessed upon change of ownership. Any supplemental tax bills shall be paid as follows: (1)for periods after Close Of Escrow,by Buyyer; and(It forperiods prior - to Close Of Escrow, by Seller.TAX BILLS ISSUED AFTER CLOSE OF ESCROW SHALL BE HANDLED DIRECTLY BETWEEN BUYER AND SELLER. Prorations shall be made based on a 30-day month. 30. WITHHOLDING TAXES: Seller and Buyer agree to execute any instrument, affidavit, statement or instruction reasonably necessary to comppI Ith federal (FTAPTA) and California withholding Law, if required (C.A.R. Form AS). 31. MULTIPLE LISTING SERVICE/PROPERTY DATA SYSTEM: If Broker is a participant of a Multiple Listing Service ("MLS" or Property Data System ("POS'), Broker is authorized to report to the MLS or PDS a pending sale and, upon Close Of Escrow, the terms of this transaction to be published and disseminated to persons and entities authorized to use the information on terms approved by the MLS or PDS. 32. EOUAL HOUSING OPPORTUNITY: The Property is sold in compliance with federal, state and local anti- discrimination Laws. 33. ATTORNEY FEES: In anY action, proceeding or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non- prevalling Buyer or Seller, except as provided In paragraph 22A. 34. SELECTION OF SERVICE PROVIDERS: If Brokers refer Buyer or Seller to persons. vendors, or service or product providers ("Providers".),Brokers do not guarantee the performance of any Providers. Buyer and Seller may select ANY Providers of their own choosing. 35. TIME OF ESSENCE; ENTIRE CONTRACT; CHANGES: Time is of the essence. All understandings between the parties are incorporated in this Agreement. Its terms are intended by the parties as a final, compete and exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. If any provision of this Agreement Is held to be ineffective or mvalld, the remaining provisions will nevertheless be given,full force and effect. Neither this Agreement nor any provision In It maybe extended,amended,modified, altered or changed, except Iri writing Signed by Buyer and Seller. 36, OTHER TERMS AND CONDITIONS,including attached supplements: A. O Buyer Inspection Advisory(C.A.R. Form BIA)) S. 0 Seller Financing Addendum and Disclosure(C.A.R. Form SFA) C. Li Purchase Agreement Addendum (C.A.R. Form PAA paraggraph numbers: ) _. D. ❑ Buyyer Intent To Exchange Supplement(C.A.R. Form 10) E. D ller Inten to Eat han a Supplem t(C. .R. F rm SES) F Buye0lnillal5 U 1( t Seller's Initials ( )(_. 1 = G:UMYi,i)lu d.179:f�L(?0:.I;/�L II�ORNI.1.4:i5Ul;lA PION GR H(•./117:;R.W._iN:, Reviewed by Olit@ CPA REVISED 10102(PAGE 7 OF 10) MAR-27-2003 09:12 P.11 F`MAR. 21. 2003 8:56AM Mar -meet VanHerk - ' 714 �"9-66N�. 583Q P. �L p, 2 Property Address: `f 3 9' I V l L't_.,rw ..Date: "!}U/L) ?- 37. DEFINITIONS:As used in this Agreement A. "Acceptance"means the time the offer or final counter offer is accepted in writing by a party and is delivered to and personMy received by the other party or that parry's authorized agent in accordance with this offer or it final counter offer. B. "Agreement"means the terms and conditions of this accepted Commercial Property Purchase Agreement and any accepted counter offers and addenda. C. "C.A.R.Form"means the speclfic form referenced, or another comparable form agreed to by the parties. 0. "Close Of Escrow"means the date the grant deed, or other evidence of transfer of title,is recorded. if the scheduled close of escrow falls on a Saturday,Sunday or legal holiday.then close of escrow shall be the next business day after the scheduled close of escrow date. E. "Copy"means copy by any means Including photocopy.NCR, facsimile and electronic. F. "Days"means calendar days, unless otherwise required by Law. G. "Days Alter" means the specified number of calendar days after the occurrence of the event specified, not counting the calendar date on which the specified event occurs, and ending at 1 t:59PM on the final day. H. "Days Prior" means the specified number of calendar days before the occurrence of the event specified, not counting the calendar date on which the specified event is scheduled to occur. 1, "Electronic Copy"or"Electronic Signature"means,as applicable,an electronic copy or signature complying with California Law.Buyer and Seller agree that electronic means will not be used by either one to modify or alter the content or Integrity of the Agreement without the knowledge and consent of the airier. J. "Law" means any taw, code, statute, ordinance, regulation, rule or order, which Is adopted by a controlling city,county,slate or federal legislative,judicial or executive body or agency. _ K. "Notice to Buyer to Perform"means a document(C.A.R.Form NBP),whicl+shall be in writing and Signed by Seller and shall give Buyer at least 24 hours(or as otherwise specified in paragraph 17C(4))to remove a contingency or perform as applicable. L. "Repairs"means any repairs(Including pest control), alterations, replacements, modifications and retrofitting of the property provided for under this Agreement. M. "Slgned"means either a handwritten or electronic signature on an original document,Copy or any counterpart. N. Singular and Plural terms each include the other,when appropriate. 36. BROKERAGE:Neither Buyer nor Seller has utilized the services of,or for any other reason owes compensation to,a licensed real estate broker(individual or corporate), agent,finder, or other entity, other than as specified In this Agreement, In connection with any act relating to the Property. Including, but not limited to, Inquiries, introductions, consultations and negotiations leading to this Agreement.Buyer and Seller each agree to indemnity,defend.and hold the other.the Brokers specified herein and their agents, harmless from and against any costs, expenses or liability for compensation claimed Inconsistent with the warranty and representations In this paragraph. 39. AGENCY. A. POTENTIALLY COMPETING BUYERS AND SELLERS: Buyer and Seller each acknowledge receipt of a disclosure of the Possibility of multiple representation by the Broker representing that principal. This disclosure may be part of a listing agreement, buyer-broker agreement or separate document (C.A.R. Form DA). Buyer understands that Broker representing Buyer may also represent other potential buyers,who may consider,make offers on or ultimately acquire the Property.Seller understands that Broker representing Seller may also represent airier sellers with competing properties of interest to this Buyer. B. CONFIRMATION:The following agency relationships are hereby confirmed for this transaction: Listing Agent (Print Firm Name) is the agent of (check one):G the Seller excl vet o C oth t e Buyer ppd Seller. Selling Agent 7 (Print Finn Name) (It not same as Listing Agent)is the agent of(check one):X the Buyer exclusively: or'] the Seller exclusively: or 0 both the Buyer and Sailer. Real Estate Brokers are not parties-ld the Agreement between Buyer and Seller. 40. JOINT ESCROW INSTRUCTIONS TO ESCROW HOLDER: A. The following paragraphs,or applicable portions thereof,of this Agreement constitute the joint escrow Instructions of Buyer and Seller to Escrow Holder,which Escrow Holder Is to use along with any related counter offers and addenda and any additional mutual instructions to close the escrow:1,2, 4, 5,16, 17E, 29,30.35 368•F,37,40,42.45A, 46 and paragraph D of the section titled Real Estate Broker on page 10. I(a Copy of the separate compensation agreement(s) provided for in paragraph 42 or 45A, or paragraph D of the section tlued Real Estate Broker on page 10 is deposited with Escrow Holder by Broker, Escrow Holder shall accept such agreement(s)and pay out from Buyer's or Seller's funds,or both, as apolfcabfe,the Broker's compensation provided for in such agreament(s). The terms and conditions of this Agreement not set forth in the specified paragraphs are additional matters for the information of Escrow Holder,but about which Escrow Holder need not be concerned. Buyer and Seller will receive Escrow Holder's general provisions directly from Escrow Holder and will execute such provisions upon Escrow Holder's request.To the extent the general provisions are inconsistent or conflict with this Agreement, the general provisions will control as to the duties and obligations of Escrow Holder only. Buyer and Seiler will execute additional instructions, documents and lorms provided by Escrow Holder that are reasonably necessary to close the escrow. Buyer's Initials (__.._) Seller's Initials 1 t( ) c: y11 1:94t240:.CIA01WORNnA ASSOCiAT10N OF REA:FOws•+, in,c: Pevlewed Dy. Date CPA REVISED 10/02(PAGE 8 OF 10) ano�nnun MASTER COPY MAR-27-2023 09:12 9i;z NAR, 21. 260 8:56W Mar—aret VanHerk 714 s-sL..,., P. 3 rroperiy Address: q ' I . t _ A(.1r�k `Lf Date. �b ' 45. BROKER COMPENSATION FROM SELLER: A. Upon Close Of Escrow, Seller agrees to pay compensation to Broker as specified in a separate written agreement between Seller and Broker, B. It escrow does not close,compensation is payable as specified in that separate written agreement. 46. ACCEPTANCE OF OFFER:Seller warrants that Seller is the owner of the Property,or has the authority to execute this Agreement. Seller accepts the above offer,agrees to sell the Property on the above terms and conditions,and agrees to the above confirmation of agency relationships.Seller has read and acknowledges receipt of a Copy of this Agreement,and authorizes Broker to deliver a Signed Copy to Buyer. 0(I(checked)SUBJECT TO ATTACHED COUNTER OFFER,DATED Seller By Date Name Printed Address _ City State Zlp Telephone Fax E-mall _..._. Seller By Date _ Name Printed Address City State ZIP Telephone Fax _ E-mail Notice Address,If Different L._._J_.J Confirmation of Acceptance:A Copy of Signed Acceptance was personally received by Buyer or Buyer's authorized agent (Initials) an(date) at WPM. A binding Agreement is created when a Copy of Signed Acceptance is personally received by Buyer or Buyer's authorized agent whether or not confirmed In this document. Completion of this confirmation is not legally required in order to create a binding Agreement;it is solely intended to evidence the date that Confirmation of Acceptance has occurred. REAL ESTATE BROKERS. A. Reel Estate Brokers are not parties to the Agreement between Buyer and Seller. B. Agency relationships are confirmed as stated in paragraph 39 above. C. If specified in paragraph ZA,Agent who submitted offer for Buyer acknowledges receipt of deposit. D. COOPERATING BROKER COMPENSATION: Listing Broker agrees to pay Cooperating Broker (Selling Firm) and Cooperating Broker agrees to accept, out of Llsling Broker's proceeds in escrow:(1)the amount specified in the MLS or PDS, provided Cooperating Broker is a Participant of the MLS or PDS in which the property is offered for sale or a reciprocal MLS or PDS:or(11)J(It checked) the amount specified in a separate written agreement (C.A.R. Form COC) between Llsling Broker and Cooperating Broker. Real lie Broker(Se It QrFirm) _ By f1 1A Date Address I/ Slale��� Z( Telephone Fax Al. Real Estate Broker(Listing Firm) By Date Address City State Zip Telephone Fax E-mail ESCROW HOLDER ACKNOWLEDGMENT: Escrow Holder acknowledges receipt of a Copy of this Agreement, (it checked, a deposit in the amount of S _ 1 counter offer numbers and .and agrees to act as Escrow Holder subiect to paragraph 40 of this Agreement,any supplemental escrow insirucNons and the terms of Escrow Holders general provisions. Escrow Holder Is advised that the date of Confirmation of Acceptance of the Agreement as between Buyer and Seller is Escrow Holder Escrow p By Oate Address _. Phone/F&WE•mad Escrow Holder is licensed by the California Department of^,Corporations.21 Insuranee.::Rest Estate.Llccnse+► THIS FORM WAS BEEN APPROVED BY THE CAUFORNIA ASSOCIATION OF REALTORSO(C.A.R.),NO PEPRESENTATION is MADE AS TO THE LEGAL VALIDITY OR AUEOUAGY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS.IF YOU DESIRE LEGAL OR TAX ADVICE,CONSULT AN APPROPRIATC PROFESSIONAL. ruts form Is available for use by the antlrs real oatale Industry.It Is r.ol intended to Identify tho user as a REALTORS.REALTOFIS is a registered eohf.•cuve mambertn+o mare which may be used only,Dy members of the NATIONAL ASSOCIATION OF REALTORSO who subscribe to Its Code of Ethicz. (��� ♦ Published by the California Association of REALTORSS tneSystem IdrStxceas` Reviewed by Date eaauoac CPA REVISED 10/02(PAGE 10 OF 10) er.anvurr n�ncrt=�l r.nnv C367 P. MAR. 11- 2-6 3 8:57AM, Mar aret VanHerk 714 "C9-6L�0.-5830—P. 14 p. 4 Property Address: Date; 45. BROKER COMPENSATION FROM SELLER: A. Upon Close Of Escrow, Seller agrees to pay compensation to Broker as specified In a separate written agreement between Seller and Broker. B. If escrow does not close,Compensation is payable as specified in that separate written agreement. 46. ACCEPTANCE OF OFFER:Seller warrants that Seller is the owner of the Property,or has the authority to execute this Agreement. Seller accepts the above offer,agrees to sell the Property on the above terms and conditions,and agrees to the above confirmation of agency relationships.Seller has read and acknowledges receipt of a Copy of this Agreement,and authorizes Broker to deliver a Signed Copy to Buyer. 0(If checked)SUBJECT TO ATTACHED COUNTER OFFER,DATED Seller BY Date Name Printed Address City State Zip Telephone Fax E-mail Seller By Date Name Printed Address City State Zip Telephone Fax E-mail Notice Address,H Different UJ )Confirmation of Acceptance:A Copy of Signed Acceptance was personally received by Buyer or Buyer's authorized agent (Initials) on (date) _ at AM/PM. A binding Agreement Is created when a Copy of Signed Acceptance Is personally received by Buyer or Buyer's authorized agent whether or not confirmed In this document. Completion of this confirmation Is not legally required in order to create a binding Agreement;It is solely Intended to evidence the date that Confirmation of Accepbnce has occurred. REAL ESTATE BROKERS: A. Real Estate Brokers are not parties to the Agreement between Buyer and Seller. B. Agency relationships are confirmed as stated In paragraph 39 above. C. It specified in paragraph 2A,Agent who submitted offer for Buyer acknowledges receipt of deposit. D. COOPERATING BROKER COMPENSATION: Listing Broker agrees to pay Cooperating Broker (Selling Firm) and Cooperating Broker agrees to accept,out of Listing Broker's proceeds in escrow:(i) the amount specified in the MLS or PDS, provided Cooperating Broker Is a Participant of the MLS or PDS in which the property is offered for sale or a reciprocal MLS or PDS;or(in C.(if checked) the amount specified in a separate wrilten agreement (C.A.R. Form CBC)between Listing Broker and Cooperating Broker. ))� Real a BrokgSeFlrm) _L kBy DaAd rasa C. ` Stale Lp le Telephone Fax C E- i1 rL f+ e_ rff_ Real Estate Broker(Listing Firm) By Date Address City State Zip Telephone Fax E-mail ESCROW HOLDER ACKNOWLEDGMENT: Escrow Holder acknowledges receipt of a Copy of INS Agreement,(II checked,'.j a deposit in the amount of$_ 1, counter offer numbere end .and agrees to act as Escrow Holder subject to paragraph 40 of this Agreement. any supplemental escrow instructions and the terms of Escrow Holder's general provisions. Escrow Holder is advised that the date of Confirmation of Acceptance of the Agreement as between Buyer and Seller Is Escrow Holder Escrow ri By Date Address .... .. . Phone/Fax/E-mail Escrow Holder is licensed by the California Osparin+ent M❑Corpomlions,0 insurance._l Real Estate.License p THIS FORM HAS BEEN APPROVED 13Y THE CALIFORNIA ASSOCIATION OF REALTORS6(C.A.R,1.NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER is THE PERSON OUAUFIED TO ADVISE ON REAL cSTATE TRANSACTIONS.IF YOU DESIRE LEGAL CA TAX ADVICE,CONSULT AN APPROPRIATE PROFESSIONAL. Th;s form is evallaWe for use by the entire teei estate industry.it is not Intended to Identify the user as a REALTORS.REALTOfiw is a registered collective memcership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORSO who subscribe to its Code of Ethics. A E` s • Publi9riedCalifornia s the The System for S=113s' Caliloie Assoclabori of REACTORS® CPA REVISED 10/02(PAGE 10 OF 10) Reviewed by Date mm m ae.o arme3 ern OTC17 nr1D�i mnP-27-2003 09:13 96% P.14 .SENT MAR• 27:.20C3_ 8:57AM NO. 5830—P. 11 714 274 1119; MAA-6-r 2:56PM; PAGE 2 Lee Assodatese CC11WM[At7AL RCJkL ESTATE! VLOVIM Match 6, 2003 Ms.Margaret van Keck LIFESTYLE HOMES 16912 Warner Ave.. Suite 201 Huntington Beach. CA 92649 RE: 438 Main St., Huntington Beach Dar Margaret: Thaak you for your Offer to Atrchase the subject property un b a)Fof LGB 1nvestrnenty ifebruary 20, 2003: The Owner might consider a aalo of the property undo a(0110wing general terms aed conditions: I. HIM LGB lnvtatrneats 7. hrem 439 Main St. An ap roximde 4,250 square foot office building on as appm ammo S),813 square fbot parcel. 3. '. PurchasaFriue: The purchase pric sha!) be nint huodied fifty thousand dollars (S950,000. a) T_)eWJill;, U execeti411 of a Puechaae and sale Agreement, Bu shaU deposit into ua row $20.000.00, which together ith any interest earned Is referred to as -Deposit". Th Deposit shall be credited to the Purchase Price at the clot of naQw. b) al a The balance of the Purchase Price shall be d asked btut verow prior:t0 closing. 4. Emil rir A¢rXmtnt, Duc of Akreement hall be the date when by:execution and delivery of the Purchase audlSals Agieemmat;Bayer and Seller have reached agree ent in writing whereby:Sellar agrees to sdl ,geed Bum a s to purdwe, the Propeay upon terns accepted by both P dea. S. Cwt�,l'ggt y Period: The Purchase and a Agree merit shall provide that the Buyer &hall have thirty(3 )days (tom the"Due of Agreement"to approve of duap ve the•condltion of the Property ; ("Contingency Per d") Including but not Ilti>t'ted to the following. �/ � G\'l..•IC+nf11ROKlfALNJa AbINYvM.eA� J'` L!9 b AtfgCiGl6f• Nerperi Been,InC. �MaTggl�I 11\e� at/�jOCAItI(�If)utf�f(;11npJni�S 3991 MOCArmur eoulevaiv.SWft 100!Newnorl Paocn.Catilwi.0 926V / ne•ce: 040/724.1CU / Fas: 949/602-9048 MAR-27-2003 09:14 96% P.15 SENT PAR, 27. 200 8:57AM - - - — — 714 274 1119; IrAR-6 C 2.g�O- 5�3�1P. �E PAGE 3 Match 6. 2003 Ms. Margaret van Hark rave 2; a) T,�: The Buyer all have the tight to review ua) approve in Owner Preilminmy Title Rcporc and all eaceptloas to the limitimy Tide Report issued by Fiat American Title C any, including.Coveatptt;, Conditions and Restrictioae leh truy apply to the pttapetty. b) rinancimg: Buycr:Shell save the right to obtain a Itttctet of Buyer's choice at. rats and eonditiom as ameptably to Buyer. C) thwgial 118IDSCII : Buyer, at Its cost, shill have the right to conduct any i eeuom of studies re*4ing the condition of the ; erty lacluding•but adi]imited to wood destroying pears,: eginestting arc. is It curtisidets prudent, at a mutually w erieint time upon,revs 4wAe notice to Setter. Duna ag to to hold Sellei harmless from any personal injury 4 property damage caused by Buyei and it's deslgnated r tesenestives it the Ptvpmy. d) it a al i : The buyer, at its cost,sltall have the right to conduct 4mvirontelntal audit and such other Cavirttnmental s dies and investigations:regarding Ne eovitc►norental c ndition of the property:as the Buyer dIaLi mints is No so-called Phisc U environm W t ting shall bt t:ttnducted without Seller's specific prior a Val. e) v m t : The buyer atialt have the tight to review and ove.the zoning, subdivision, land use and other Cove mental regulatiocs, 6w3,permits and approvals that ply to the Property. i) VmMM a Buyerahall bave the right to review and approve all car act3,leases, rent rolls; bpera ag repurts, plain, studim tepotu in SeUer's posat�aion that hind the Property riot will affect the use of the Propeny afier the dust,of es tow. Buyer shall have the oppottunily to begin teviewi this information abet the Seller apptvvcs this eoatempla ad trattettetlon. : Tie Buyer sbdl have the right to satisfy itself that it't mended:use of the property will be approved by the City o lintuti &Tl Beacfi, 6'. �ItKsi n[1»se-ttN: Escrow shall clam slaty(60)days front the"Data of Agreement' : T, 'ftlle Tasyeynee: On the closing d to, Stilt:[Shall ddlvcr to$uytr an ALTA b lfn�:;1:SILt\Cott:\FN�IlUS►'.\ON M.IJImVII.Ww A550dKM TZAR-27-2003 09:14 96i o , .SENT BNAR., 2�. 7003 a; 58Au . >>a 274 iilg; MAR-6-0� ?;ur7pNO 5830 P, ii_ rAU d/5 Much b. 2003 Ms. Margaret Van Hcrk Page 3: Owner's Policy of Tit] Insurance issued by First American Title Cmpany incur' euyerla the amount of the Purchase Price, that marteub(c 'de to the propem is vested in Buyer and is subject only to aaersdisclosed by the approved Preliminary Title Rep rt to be delivered to BuyRt urd not diszpprr►vtd by Buyer urine tht Contingezcy:Period. S. Prerntlfl[t d gg At the close of esao , Seller shill pay the cost of the ALTA Owner's Policy of idt insurance, all documeatary transfer axes, rccutding tax a rectarding feat atad 50% of esaow i'W, Each party shall pay is own Ines and expeMaea of As atmrners and other aons0tants' All security deposit ohllgar.iona shall be credited to Buyer st lose of escrow. Seller, through escr utd rt its cost, shall pmvide Buyer with 's Nawml Naurd Dl closure Report, 9. Q.tt,[dgj i(I Buyer and its ag;nts and representatives shall kttp all information and r its obtained from Seller or relating to the Property or the pro osed transaction confidential and ehall not dist;tuse any such fiderttial information to any ocher person Of entity without o Ming the prior writtdtr consent of Shcer. 10; ,. . "Me tioilowing G : n. ate a(tachod to this letter and will be incurpofsted into i e Purchme imil Side Agreement; a) Covatamt Req'iring Uae of Property to be Consistent With Purposes Desi tad in Redevelopment Plus. b) Covenant at t Nondiscriminaaion and Noosegregation. c;) Ma�trtenance ovensnt. : breach of any c tfte Ctyveuarnt shall cause the Property m revert to the Real eloptneat Agency. ),I, Arbilrylm a o!'DiP Utke: The Arbitration f Disputes clauso :hA11 be deleted in its uttirety. 12. Mi r Ri 3s; Any oil, mineral'rights etc.shall he rctAuud by Ow iet. 0, Purclit►<8 po,�a a Agraxrn;nt Attached is the rm of Purchue And Sile:agreement, Lee L nTG:csr:\CurtS\PRU:ds1 \00 Ma, nvn.J�, A%odmn MAR-27-2003 09:14 N0, 5830� P. 18 .SENT ."cMAF—9,,20�3 , 8:58AM �` 714 .274 1119; MAR•6-C 1:57PM; PAGE 5/5 Muds S.2003 Ms. Marpm Van lurk Post:4 14. i CMSMWkL A sales comnitviom aal to dx PUS(6%)of db Pmchsme P ioa sWl be split (Sala) WhWaa Lac A AUxi#d (Sd iers bsnkQ)Ltd Haaros(gayat's brolly) 15. &rya 11 ba* awae dW tt A*v ofGrs bM hao snbeaikd for Ow Property and Cwuw is clacdoi 0 rrspo"10 aMcsl of Qwso o ffon. tTiis kAw is swrely a redtmcm of de oneral rmdcandiad of the of a eoetesoplNoi lessaoeica sod is w uw*W ed to br. sad *Ill eat be oomaaed an a oodomM mr yadee. 'Nth pasty sadl be om mmlally brood mw Mal moo>A s faster Nt&M aad Agretmeat it Bally 0064W. SIaWd s formal PWAW and 5do Apomrm we be f*c mmud.Iher Prd°'"I lave ne hobw obiigoeon m ihs other rdmin to tl mar.ceam, Tbm*yott in your i0ow in 439 M"SuW. Sincel* LEE AMMUM COMMnCIAL IIAL MATZ SCAVICBS Curt 3olda Sesioc Vial President Dboo!Lacs(949)724N3 i AGUW AND ACCUTED; Buytx I,GO�w Dw Ac�o�wled4ed: I%vdfAjmi%pvrvmnte anq aeceingsxeedea\i.oc.i rll.•\otx=\17I MALAW.Y.dea MAR-27-2003 09:14 95/. P 1A Summary Report 33433 ATTAC H M E N T #6 SUMMARY REPORT PURSUANT TO SECTION 33433 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW ON THE SALE OF 438 MAIN STREET, HUNTINGTON BEACH BY THE REDEVELOMENT AGENCY OF THE CITY OF HUNTINGTON BEACH TO LGB INVESTMENTS The summary report has been prepared for the Huntington Beach Redevelopment Agency ("AGENCY") pursuant to Section 33433 of the California Health and Safety Code. This report sets for the certain details of the proposed Sale Agreement("Agreement') between the Agency and LGB Investments ("BUYER") for the sale of 438 Main Street, Huntington Beach, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area,specifically in the`Main- Pier sub-area. This report describes and specifies the following: (i) The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency, plus the expected interest on any loans or bonds to finance the agreements. (ii) The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the plan. (iii) The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale. If the sale price is less than the fair market value of the interest to be conveyed, determined at the highest and best use consistent with the redevelopment plan,then the agency shall provide as part of the summary an explanation of the reasons for the difference. (iv) An explanation of why the sale or lease of the property will assist in the elimination of blight, with reference to all supporting facts and materials relied upon in making this explanation. (v)The report shall be made available to the public no later than the time of publication of the first notice of the hearing mandated by this section. A. SALIENT POINTS OF THE AGREEMENT Under the terms of the proposed Agreement the BUYER will purchase in fee title from the Agency for$950,000 with the requirement that the BUYER will conform to: 438 Main Street 1 33433 Report, 3/19/2003 I. The BUYER is responsible for either rehabilitating the building within three years of the sale or constructing a new building. In both instances,the project must meet the requirements of the City's Downtown Specific Plan and all applicable City codes, plus the Redevelopment Plan for the Huntington Beach Redevelopment Project(Merged). 2. The BUYER is responsible for securing all entitlements and approvals for the redevelopment of the property. 3. The AGENCY is providing no warranties or other certification regarding the property, as it is being sold"as is." 4. The AGENCY will provide a grant deed with certain condition, covenants and restrictions with the AGENCY as the beneficiary as required by the State Redevelopment Law(Health& Safety Code). B. COSTS OF AGREEMENT TO THE AGENCY Agency Acquisition $325,500 (1) Tenant Relocation $20,000 (2)(3) Lease Revenue (6/1993- 2/2003) - $ 164,600 (4) Total Costs: $180,900 (1) Purchased in 1988 from the Mola Corporation (2) Tenant Relocation Costs 1992 (3) Per the existing lease agreement with A-Creative Property Management and its subleases with tenants, lessee and tenants are not entitled to any relocation rights or benefits. (4) Lease Agreement with A-Creative Management provided for$1,600/month beginning the third year up until June 2002. C. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED TO THE BUYER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The AGENCY will convey the property in fee to the BUYER in an"as is" condition. Appraisal (2002) $735,000 D. PURCASE PRICE PAID BY BUYER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN The Buyer will be paying $950,000 which is above the 2002 appraised value and based upon the purchase offers received deemed to be the Fair Market Value. 438 Main Street 2 33433 Report,3/19/2003 Notice of Exemption ATTACHMENT #7 NOTICE OF VNIMPTION To: From: ❑ Office of Planning and Research City of Huntington Beach 1400 Tenth Street,Room 121 Planning Department Sacramento,Ca 95814 2000 Main St.,3rd Fir. Huntington Beach,CA 92648 ■ Orange County Clerk Recorder's Office Public Services Division P.O.Box 238 Santa Ana,CA 92702 Project Title: Sale of 438 Main Street Applicant Name and Address: City of Huntington Beach Redevelopment Agency, 2000 Main Street, Huntington Beach, CA.92648 Project Location-Specific: 438 Main Street(East side of Main between Pecan Avenue and Orange Avenue) Project Location-City: HUNTINGTON BEACH Project Location-County:ORANGE Project Description: The sale of a redevelopment agency owned two-story commercial office building consisting of pproximatey 4,250 square feet on a 5,750 square feet parcel located in the Main-Pier subarea of the Huntington Beach Redevelopment Project Area. Public Agency Approving Project: City of Huntington Beach Redevelopment Agency Person or Agency Carrying Out Project: City of Huntington Beach Redevelopment Agency Exempt Status: ❑ Ministerial(Sec. 21080(b)(1); 15268). ❑ Declared Emergency(Sec. 21080(b)(3); 15269(a)). ❑ Emergency Project(Sec. 21080(b)(4); 15269(b)(c)). ■ Categorical Exemption(Classl2;Section 15312). ❑ Statutory Exemption(State Code Number J. ❑ Other(Govt. Code Sec.�. Reasons why the project is exempt: The use of the property has not changed since the time of purchase by the public agency and does not have significant values for wildlife habitat or other environmental purposes. ■ Fee: Exempt per Govt. Code Section 6103 Lead Agency Contact Person: David Big_�s Telephone: (714) 536-5909 If filed by applicant: 1. Attach certified document of exemption finding. 2. Hasa Notice of Exemption been filed by the Public Agency approving the project? Yes No Signature: Title:A,5MsTA7­kY • )ATAW Date: L 1�•o; ■ Signed by Lead Agency 7 ❑ Signed by Applicant GAENVIROWNOEFORM-438 Main.DOC REQUEST FOR LATE SUBMITTAL (To accompany RCA's submitted after Deadline Department: ED/AS-� Subject Sale of 438 Main Street Council Meeting Date: 4/7/03 Date of This Request: 3/27103 REASON (Why is this RCA being submitted late?): Final signed contract was received today. EXPLANATION (Why is this RCA necessary to this agenda?): The City Council acted on this item in closed session on 3/17 and the purchaser was advised that the public hearing would occur on 417 and the public hearing has been noticed for 4/7. CONSEQUENCES (How shall delay of this RCA adversely impact the City?): Any delay will result in lost revenue to the Redevelopment Agency. Signature: O-Approved 0 Denied Department Head Ray Silver City Administrator n. .... .«c A7/A A/AA RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Develo ment/Admin Services SUBJECT: CONDUCT PUBLIC HEARING AND APPROVE SALE OF PROPERTY AT 438 MAIN STREET COUNCIL MEETING DATE: Aril 7, 2003 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attorney) Attached Subleases, Third Party Agreements, etc. Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION. FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator Initial City Administrator Initial City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: (Below • . For RCA Author: D. Biggs, ext. 5909 in H[iCiiINGTON BFACH I N D ,DEAR ADVERTISER, Monday,Apr .7,2003 at 7'0Gjy;p.m. or soon thereafter in�91'he City Council 'ClfwAers lo- St e, , unti Main ENCLOSED PLEASE FIND A CLIPPING OF YOUR AD FROM THE FIRST i Street, Huntington 'Beach, ',California, to ' consider the sale'of 438 Main street, a Qom-PUBLICATION, BEGINNING ON 20 AND EXPIRING ON mercial two-story office building consisting of approximately 4,250 square feet t parcel, a 5 square' feet IF YOU NEED TO MAKE ANY CHANGES OR CORRECTIONS, PLEASE CALL (APN# -24-134-02). The property is located in the,*Huntington Beach Redevelopment Project E AT YOUR EARLIEST CONVENIENCE. -Area,'specifically'in the -Main-Pier sub-area. 'As required by' Cali- fornia Redevelopment THE COST OF THIS PUBLICATION WILL BE $ IN „ Law (Section 33433), a report on the,sale is available for public inspection' in and in the the City Clerk's Office THANKS FOR YOUR COOPERATION AND PATRONAGE. Department of Economic Development.The report summarizes.the costs of the sale agreement, the estimated value of the interest to be conveyed SINCERELY, to LGB Investments, LP, CITY OF as determined, at the highest and best uses HUNTINGTON BEACH permitted` ,unifier the REDfYEIOPHEti'AGENCY G redevelopment plan, the OF THE CITY OF estimated-value"of the MICHAEL SLETTEN, interestAo be conveyed HUNTINGTON BEACH ,and the purchase price NOTICE OFA LEGAL ADVERTISING REPRESENTATIVE of. $950,000.00, Inter- ested persons ma"y PUBLIC HEARING inspect and, upon pay- ment of the "costs of reproduction, 'obtain OWNED PROPERTY copies of the 33433 438 MAIN STREET Report and sale.- docu- NOTICE -IS HEREBY ments. At any time not.later GIVEN that the City than the hour set forth Council and the Rede- velopmentabove for, the 'hearing, Agency of the comments on the pro- City of Huntington Beach posed sale may' be (1'Agency") will hold a' submitted in writing to `Joint public hearing on the Agency Clerk. -Connie Brockway,, Agency Clerk P.O.Box 190 2000 Main Street, 2nd Floor Huntington Beach,' CA 92648 Published Huntington Beach Independent 330 West Bay Street, Costa Mesa, Califomia 92627 March20,27;2003 032-265 (949) 642-4321 - Fax(949)646-5008 Publication of Times Communitv News • A Division of the flos Angeles Mmes PROOF OF PUBLICATION ,CITY OF STATE OF CALIFORNIA) HUNTINGTON BEACH REDEVELOPMENT AGENCY S S. OF THE CITY OF , COUNTY OF ORANGE ) HUNTINGTON BEACH.' NOTICE OF A PUBLIC HEARING I am a Citizen of the United States and a ON THE SALE OF AGENCY OWNED PROPERTY resident of the County aforesaid; I am 438 MAIN STREET NOTICE IS ,HEREBY over the age of eighteen years, and not a GIVEN ,that the City. Council jand the Rede party to or interested in the below entitled velopment Agency of the matter. I am a principal clerk of the City of Huntington Beach ("Agency") will hold joint public hearing on HUNTINGTON BEACH INDEPENDENT, 7:0n0dayp m. o,r2so�oan thereafter in the City a newspaper of general circulation, Council Chambers lo- cated at. 2000 Main printed and published in the City of Street, Huntington Beach, California, to Huntington Beach Countyof Orange, consider the sale of 438 g 9 Main Street, a com- State of California and that attached mercin two-story office � building consisting of approximately 4,2501 Notice is a true and complete copy as square feet on a 5,750 square feet parcel,; was printed and published in the (APN# -24-134-02). The (property is located ini Huntington Beach issue of said Huntington(Redevelopment Project Beach newspaper to wit the Issue(s) of: Area specifically in the Main-Pier sub-area. As required by Cali- fornia Redevelopment Law (Section 33433), a i report on the sale is' available for public inspection in the City March 2O ZOOS Clerk's Office and in the Department of Economic. March 27 , 2003 Development.The report' summarizes the costs of the sale agreement, the estimated value of the interest to be conveyed, to LGB Investments, LP as determined at the highest and best uses', I declare under penalty of perjury, that permitted under the' estimatedmvaluel of f f the the foregoing is true and correct. interest to be conveyed and the purchase price of $950,000.00. Inter- ested persons may inspect and, upon pay Executed on March 27 2003 me of the costs of , reprr oduction, obtain at Costa Mesa, California. copies of the 3343 Report.and sale docu- ments. At any time not later than the hour set forth above for the hearing, / comments on the pro- posed sale may be submitted in writing to Signature the Agency Clerk. Connie,Brockway, Agency Clerk P.O.Box 190 2000 Main Street, 2nd Floor Huntington Beach, CA 92648 Published Huntington; Beach Independent, March 20,27,2003 632-265' I ;C:Ex-e. $la 3 6127/s3 CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH NOTICE OF A PUBLIC HEARING ON THE SALE OF AGENCY OWNED PROPERTY 438 MAIN STREET NOTICE IS HEREBY GIVEN that the City Council and the Redevelopment Agency of the City of Huntington Beach ("Agency") will hold a joint public hearing on Monday, April 7, 2003 at 7:00 p.m. or soon thereafter in the City Council Chambers located at 2000 Main Street, Huntington Beach, California, to consider the sale of 438 Main Street, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel, (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main-Pier sub-area. As required by California Redevelopment Law (Section 33433), a report on the sale is available for public inspection in the City Clerk's Office and in the Department of Economic Development. The report summarizes the costs of the sale agreement, the estimated value of the interest to be conveyed to LGB Investments, LP as determined at the highest and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed and the purchase price of$950,000.00. Interested persons may inspect and, upon payment of the costs of reproduction, obtain copies of the 33433 Report and sale documents. At any time not later than the hour set forth above for the hearing, comments on the proposed sale may be submitted in writing to the Agency Clerk. Connie Brockway, Agency Clerk P.O. Box 190 2000 Main Street, 2"d Floor Huntington Beach, CA 92648 Publication Dates: March 20 & 27, 2003. G:Carol\Proj ects\RDA_MainPier\43 8 Mai n\notice - 438Main.doc Page 1 of 1 Ehring, Liz From: Bodek, Amy Sent: Monday, March 17, 2003 6:26 PM To: Ehring, Liz; Runzel, Carol; Duran, Gus Cc: Biggs, David; Martin, Clay Subject: RE: Public Notice Hello all: The name of the potential buyer for 438 Main is LGB Investments, a limited partnership. The purchase price is $950,000. Thank you for all your help. —Amy -----Original Message----- From: Ehring, Liz Sent: Monday, March 17, 2003 4:37 PM To: Runzel, Carol; Duran, Gus; Bodek, Amy Cc: Brockway, Connie Subject: RE: Public Notice Everyone - please be advised that Mike at the Independent Newspaper is waiting for the fill-ins for your public hearing notice at the earliest possible moment. Please e-mail me the final version for us to FAX to the paper. It is of the utmost importance. Thanks, Liz -----Original Message----- From: Runzel, Carol Sent: Monday, March 17, 2003 4:09 PM To: Ehring, Liz Cc: Duran, Gus; Kuhnke, Elaine; Nelson, Kathi Subject: Public Notice Importance: High Hi Liz, Either Gus or Kathi will get the two pieces of information to you tomorrow morning. The information will be to substitute the Buyer's name and the amount. 3/18/2003 CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH NOTICE OF A PUBLIC HEARING ON THE SALE OF AGENCY OWNED PROPERTY 438 MAIN STREET NOTICE IS HEREBY GIVEN that the City Council and the Redevelopment Agency of the City of Huntington Beach ("Agency")will hold a joint public hearing on Monday, April 7, 2003 at 7:00 p.m. or soon thereafter in the City Council Chambers located at 2000 Main Street, Huntington Beach, California, to consider the sale of 438 Main Street, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel, (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main-Pier sub-area. As required by California Redevelopment Law (Section 33433), a report on the sale is available for public inspection in the City Clerk's Office and in the Department of Economic Development. The report summarizes the costs of the sale agreement; the estimated value of the interest to be conveyed to BUYER as determined at the highest and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed and the purchase price of $xxx,xxx. Interested persons may inspect and, upon payment of the costs of reproduction, obtain copies of the 33433 Report and sale documents. At any time not later than the hour set forth above for the hearing, comments on the proposed sale may be submitted in writing to the Agency Clerk. Connie Brockway, Agency Clerk P.O. Box 190 2000 Main Street, 2„d Floor Huntington Beach, CA 92648 Publication Dates: March 20 &27, 2003. G:Caro l\Projects\RDA_MainPier\438Main\notice - 438Main.doc I E, r7 lk 4, AIR F= Plu� 5ILit , Rllwu 04 MEETING DATE: April 7, 2003 DEPARTMENT SUBJECT: REQUESTING: Ec Development Sale of Agency Owned Property at 438 Main Street TODAY'S DATE March 18, 2003 VERIFIED BY /l ADMININSTRATION: APPROVED BY: Ray Silver City Administrator 3/18/2003 8:25 AM CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH NOTICE OF A PUBLIC HEARING ON THE SALE OF AGENCY OWNED PROPERTY 438 MAIN STREET NOTICE IS HEREBY GIVEN that the City Council and the Redevelopment Agency of the City of Huntington Beach("Agency")will hold a joint public hearing on Monday, April 7, 2003 at 7:00 p.m. or soon thereafter in the City Council Chambers located at 2000 Main Street, Huntington Beach, California, to consider the sale of 438 Main Street, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel, (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main-Pier sub-area. As required by California Redevelopment Law (Section 33433), a report on the sale is available for public inspection in the City Clerk's Office and in the Department of Economic Development. The report summarizes the costs of the sale agreement, the estimated value of the interest to be conveyed to LGB Investments, LP as determined at the highest and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed and the purchase price of$950,000.00. Interested persons may inspect and, upon payment of the costs of reproduction, obtain copies of the 33433 Report and sale documents. At any time not later than the hour set forth above for the hearing, comments on the proposed sale may be submitted in writing to the Agency Clerk. Connie Brockway, Agency Clerk P.O. Box 190 2000 Main Street, 2nd Floor Huntington Beach, CA 92648 Publication Dates: March 20 & 27, 2003. G:Carol\Projects\RDA MainPier\438Main\notice - 438Main.doc CITY OF HUNTINGTON BEACH REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH NOTICE OF A PUBLIC HEARING ON THE SALE OF AGENCY OWNED PROPERTY 438 MAIN STREET NOTICE IS HEREBY GIVEN that the City Council and the Redevelopment Agency of the City of Huntington Beach("Agency") will hold a joint public hearing on Monday, April 7, 2003 at 7:00 p.m. or soon thereafter in the City Council Chambers located at 2000 Main Street, Huntington Beach, California, to consider the sale of 438 Main Street, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel, (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the Main-Pier sub-area. As required by California Redevelopment Law(Section 33433), a report on the sale is available for public inspection in the City Clerk's Office and in the Department of Economic Development. The report summarizes the costs of the sale agreement,the estimated value of the interest to be conveyed to LGB Investments, LP as determined at the highest and best uses permitted under the redevelopment plan, the estimated value of the interest to be conveyed and the purchase price of$950,000.00. Interested persons may inspect and, upon payment of the costs of reproduction, obtain copies of the 33433 Report and sale documents. At any time not later than the hour set forth above for the hearing, comments on the proposed sale may be submitted in writing to the Agency Clerk. Connie Brockway, Agency Clerk P.O. Box 190 2000 Main Street, 2°d Floor Huntington Beach, CA 92648 Publication Dates: March 20 &27, 2003. C c C7 O � 3 ` ) CD -i i. G:Caro l\Projects\RDA_MainPier\438 Mai n\notice - 4381Main.doc NJ cry __J D v L SUMMARY REPORT PURSUANT TO r: SECTION 33433 OF THE - — CALIFORNIA COMMUNITY REDEVELOPMENT LAW .T ON THE SALE OF :5 0 438 MAIN STREET, HUNTINGTON BEACH BY THE REDEVELOMENT AGENCY OF THE CITY OF HUNTINGTON BEACH TO LGB INVESTMENTS The summary report has been prepared for the Huntington Beach Redevelopment Agency ("AGENCY") pursuant to Section 33433 of the California Health and Safety Code. This report sets for the certain details of the proposed Sale Agreement ("Agreement") between the Agency and LGB Investments ("BUYER") for the sale of 438 Main Street, Huntington Beach, a commercial two-story office building consisting of approximately 4,250 square feet on a 5,750 square feet parcel (APN# -24-134-02). The property is located in the Huntington Beach Redevelopment Project Area, specifically in the'Main- Pier sub-area. This report describes and specifies the following: (i) The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency, plus the expected interest on any loans or bonds to finance the agreements. (ii) The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the plan. (iii) The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale. If the sale price is less than the fair market value of the interest to be conveyed, determined at the highest and best use consistent with the redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference. (iv) An explanation of why the sale or lease of the property will assist in the elimination of blight,with reference to all supporting facts and materials relied upon in making this explanation. (v) The report shall be made available to the public no later than the time of publication of the first notice of the hearing mandated by this section. A. SALIENT POINTS OF THE AGREEMENT Under the terms of the proposed Agreement the BUYER will purchase in fee title from the Agency for $950,000 with the requirement that the BUYER will conform to: 438 Main Street 1 33433 Report,3/19/2003 I. The BUYER is responsible for either rehabilitating the building within three years of the sale or constructing a new building. In both instances, the project must meet the requirements of the City's Downtown Specific Plan and all applicable City codes, plus the Redevelopment Plan for the Huntington Beach Redevelopment Project (Merged). 2. The BUYER is responsible for securing all entitlements and approvals for the redevelopment of the property. 3. The AGENCY is providing no warranties or other certification regarding the property, as it is being sold"as is." 4. The AGENCY will provide a grant deed with certain condition, covenants and restrictions with the AGENCY as the beneficiary as required by the State Redevelopment Law(Health & Safety Code). B. COSTS OF AGREEMENT TO THE AGENCY Agency Acquisition $325,500 (1) Tenant Relocation $20,000 (2)(3) Lease Revenue (6/1993- 2/2003) - $ 164,600 (4) Total Costs: $180,900 (1) Purchased in 1988 from the Mola Corporation (2) Tenant Relocation Costs 1992 (3) Per the existing lease agreement with A-Creative Property Management and its subleases with tenants, lessee and tenants are not entitled to any relocation rights or benefits. (4) Lease Agreement with A-Creative Management provided for $1,600/month beginning the third year up until June 2002. C. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED TO THE BUYER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The AGENCY will convey the property in fee to the BUYER in an"as is" condition. Appraisal (2002) $735,000 D. PURCASE PRICE PAID BY BUYER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN The Buyer will be paying $950,000 which is above the 2002 appraised value and based upon the purchase offers received deemed to be the Fair Market Value. 438 Main Street 2 33433 Report,3/19/2003 p. \ 'n �r Fri Sale of 438 Main Street City Council Meeting April 7, 2003 Agenda Item D-1 . 438 Main Street • 5,875-sf. parcel • Improved with a 4,250-sf. building. • Currently leased on a month-to-month basis. 1 Background Purchased with tax increment. Anticipated to be part of a larger redevelopment site. Property offered for sale initially in 2002. Background Agency rejected bids in August 2002. Broker retained to market property. Offers to Purchase received and evaluated. Ffi_ R x: FOR SALE S 3 i:,fJfk'lt"A Xi iLU[4(, Proposed Purchaser: LGB Investments I Purchase Price: I� $950,000 µ 30-day due diligence 60-day escrow period Public Hearing Approval of sale requires public hearing. Standard offer, agreement and escrow instructions. E.- Grand Deed with covenants. Summary Report 33433. 3 A Sale Terms 0 Property being sold for Fair Market Value. Recommended Actions Open, conduct and close Joint Public Hearing. City Council adopt resolution. Redevelopment Agency adopt resolution and authorize execution of agreement. 4 a } The End 5 C. Y401rq, am. sov. L '. Council/Agency Meeting Held: ob—�9-d1 Deferred/Continued to: Approved 0 Conditionaily Approved 0 Denied Pep-C' Jerk's ignature Council Meeting Date: August 19, 2002 Department ID Num r: AS 02-24 CITY OF HUNTINGTON BEACH T REQUEST FOR REDEVELOPMENT AGENCY ACTION cz C =' SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY `?-�; MEMBERS 1 T(1 SUBMITTED BY: RAY SILVER, Executive Director ce r�2 PREPARED BY: DAVID C. BIGGS, Deputy Executive Director n CLAY MARTIN, Director of Administrative Services SUBJECT: REJECT ALL BIDS RECEIVED IN CONJUNCTION WITH THE PROPOSED SALE OF 438 MAIN STREET AND AUTHORIZE USE OF COMMERCIAL BROKER TO MARKET PROPERTY FOR SALE Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: On June 21, 2002, staff received bids in conjunction with the sale of 438 Main Street. Staff presented a summary of the bids at the July 8, 2002, Economic Development Committee (EDC) meeting. Given the volatile real estate market in which sale prices have repeatedly exceeded appraised values, EDC members recommended that the Redevelopment Agency Board reject all bids and solicit assistance from a professional real estate agent or broker in marketing the property in anticipation of receiving higher bids. Funding Source: One time revenue for the Redevelopment Agency, which would facilitate debt repayment to the General Fund. Recommended Action: Direct the Real Estate Services Division to reject all bids and solicit new offers in the open market using the assistance of a professional real estate agent or broker, including authorization of a broker commission up to 6% of the sale price. Alternative Action(s): Approve and direct the Real Estate Services Division to conclude negotiations with one of the bidders and sell 438 Main Street in accordance with all applicable codes and procedures. REQUEST FUR REDEVELOPMENT AGENuY ACTION MEETING DATE: August 19, 2002 DEPARTMENT ID NUMBER: AS 02-24 Analysis: On August 27, 2001, the City Council and the Redevelopment Agency approved a process to surplus and sell excess City and Redevelopment Agency (Agency) owned property that retains no present or future anticipated uses. One of the properties considered for sale was 438 Main Street (please see Attachment 1 for the Assessor Parcel Map). The property is improved with a small two-story commercial office building originally built in 1974. The Agency purchased the property in 1988 for $325,000 in a voluntary sale in anticipation of future development opportunities. In 1993, the Agency entered into a lease with A-Creative Property Management, whose lease expired in June of this year. A-Creative Property Management is currently on month-to-month status. In May, staff solicited offers to purchase the property through a sealed bid process. The property was advertised for sale in the Los Angeles Times, The Orange County Register and the western edition of the Wall Street Journal. The solicitation of bids was also mailed to local brokers and a 2% commission based on sale price was offered to any broker that brought forth a successful purchaser. Staff conducted a bid opening on June 21, 2002, at which time five legitimate bids were received, ranging in value from $425,000 to $875,000 (please see Attachment 2 for a summary of the bids received). The estimated appraised value of the property, as determined by an independent appraiser, was $735,000. Staff presented a summary of the bids at the July 8, 2002, Economic Development Committee (EDC) meeting. Given the volatile real estate market in which sale prices have repeatedly exceeded appraised values, EDC members recommended that the Redevelopment Agency reject all bids and solicit assistance from a professional real estate agent or broker in marketing the property in anticipation of receiving higher bids. If staff were to solicit a broker's assistance, the City Council would be authorizing payment of a broker commission of up to 6% of the sale price, which is an industry-wide standard. If a broker successfully markets the property and achieves a higher sales price, staff would abide by all applicable codes and procedures regarding the sale of Redevelopment Agency surplus property. Environmental Status: Not applicable. Attachment(s): City Clerk's Page Number No. Description 1 Assessor Parcel Map for 438 Main Street 2 Summary of bids received June 21, 2002 RCA Author: A. Bodek, x5445 D:\Documents and Settings%odekaft Documents\RCA Letters\81902.438 Main.rejectbids.doc -2- 0/4nJ1%nn1b n.CO A•• ATTACHMENT # 1 Attachment 1 Map of 438 Main Street APN 024-134-02 v . § ACACIA AVENGE ; t00' two y 0 12 y 135 • 21 BLK. 506 6 s a � \ ON 6 o `�`� BLK. 505 = 25 24 _8 _ J 2 • Tg-i � n• � w �` iJp tl 70// /� S TRACT +a t '� e,�� aa, r• 2 PECAN AVEJ" : ' PaaXCr 937-ro-154-226 17 LOTS r a a y/5�`J. 2J 4 :a. 13 42 29 /A u v '� 1i'+} ,e. 28 L308 AG zl 133 NO. 14122b 13�4 ,'St n O 20 .. 7 i , s ---�0 31 -�'`t5 & �a 40 22 9 e a as as 18 17 18 15 14 . L 3 32$6 g S 6 9 �° n• 2y �+ is 39/ g „ a — Q 14, 13 15 ..:a a.m ` -28 • +k 4 ' 404 - R21 S -� A y w..• vt LOT C tag q 35 tea► m 18 sa --- Mir a ---t9 -- • an. rrb d J8 a _ 12A --= }7 19 0 21 2 3 4 ©s 3? a BEACH xz. a i -�— a r ------ NO. 2900 e 1------- ORANGE -- R AVENUE It 8 1 r-1 �'—1 I+=_1 �1 14 N ATTACHMENT #2 438 Main Street: Bid Opening June 21, 2002 Attachment 2 Add'I costs to HB Bid Net Bidder Experience Terms (besides escrow, etc.) Amount Proceeds Proposes$350K down payment, $525K financed(no indication of pre-approval). 45 day Joint venture between two private escrow. Requests City cooperate in 1031 $25K credit for repairs, 1 investors/developers. Buyer's Tax Exchange. rent-up expenses, T.I. $ 875,000 $ 850,000 Joint venture between owners of Proposes$275K cash, $450K financed (no property mgmt company and private indication of pre-approval). Submitted$25K 2 investor/developer. GFD to open escrow. n/a $ 750,000 $ 750,000 Private contractor. Wife owns public relations company&would take most of space&sublease remainder of Proposes all cash, pre-approved financing, no 3 bldg. contingency, 30-60 day escrow. n/a $ 736,000 $ 736,000 Proposes all cash, pre-approved financing, no contingency, 30 day escrow. Submitted $50K 2%commission 4 Commercial/residential developer. GFD to open escrow. ($12,100) $ 605,000 $ 592,900 Proposes$107K down payment, $318K 5 Art gallery owner. financed(no evidence of pre-approval). n/a $ 425,000 $ 425,000 438Main.bids,7/19/2002,3:59 PM -RCA OUTING 4' INITIATING DEPARTMENT: Administrative Services SUBJECT: Reject all bids received in conjunction with the proposed sale of 438 Main Street and authorize the use of a commercial broker to market the property for sale. COUNCIL MEETING DATE: August 19, 2002 RCKAT- 7-AGHMENTS STAT-TUS" Ordinance (w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits - Attached Contract/Agreement (w/exhibits if applicable) (Signed in full by the City A ttomey) Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attomey) Not Applicable Certificates of Insurance (Approved by the City Attomey) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (if applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION SING-ATT CHMENM`- M ` .REVIEW '; RETURNED F Administrative Staff Assistant City Administrator (Initial) City Administrator (Initial) City Clerk EXPLANATION.,FOR RETURN OF ORR _4 -�ITEW­ (Below Space For City Clerk's Use Only) RCA Author: A. Bodek, x5445