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HomeMy WebLinkAboutBeach/Atlanta Frontage Road - Resolution 2010-98 Declaring d RECORDING REQUESTED BY: First.American Title Company WIN RECORDED,MAIL TO: City of Huntington Beach Economic Development Dept. 2000 Main St. Huntington Beach, CA 92648 TITLE ORDER NO.:3738961 ESCROW NO.: 1005691-LV THIS SPACE FOR RECORDER'S USE ONLY SUBSTITUTION OF TRUSTEE AND PARTIAL, RECONVEXANCE THE UNDERSIGNED, present beneficiary under that certain Deed of Trust executed by BEACH PROMENADE LLC, a California corporation as Trustor, to FIRST AMERICAN TITLE COMPANY as original Trustee, and recorded on April 7, 2011 as Instrument No. 2011- 000 178041 of Official Records of Orange County, California. HEREBY APPOINTS AND SUBSTITUTES THE CITY OF HUNTINGTON BEACH, a municipal corporation as new and substituted Trustee thereunder in accordance with the terms and provisions contained therein: and As such duly appointed and substituted Trustee thereunder. Now Therefore, in accordance with said request and the provisions of said Deed of Trust, THE CITY OF HUNTINGTON BEACH, a municipal corporation, as Trustee, does hereby RECONVEY, without warranty, to THE PERSON OR PERSONS LEGALLY ENTITLED THERETO, all estate now held by it thereunder in and to that property situated in said county. State of California_ described as follows: PARCEL 2. INCLUSIVE, OF PARCEL MAP NO. 2009-122, LN THE CITY HUNTINGTON BEACH, ORANGE COUNTY, STATE OF CALIFOR.NLA, AS PER MAP RECORDED IN BOOK 371 PAGES I7 THROUGH 20, INCLUSIVE, OF PARCEL NLAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. The remaining property described in said Deed of Trust shall continue to be held by said Trustee under the terms thereof. As provided in said Deed of Trust, this Partial Reconveyance is made without affecting the personal liability of any person for payment of the.indebtedness secured by said Deed of Trust. Dated:March 28, 2013 THE CI OF HUNMGTON BEACH BY: Its: .�C.TI�� C/TY nj i4gER By: APPROVED AS TO FORM �A Its: JENNIFER MoGRA'TH,City Attm-y 3/Ze JZo�3 By Paul D'Aho Ansistant City Aitomey which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference: war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any governmental agency other than City;the imposition of any applicable moratorium by a governmental agency other than City; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten(10) business days after it obtains actual knowledge of the event. The term"Force Majeure Delay" shall mean any delay in taking any action required by this Agreement,proximately caused by the occurrence of any Force Majeure Event. The term"Governmental Approvals" shall mean and include any and all general plan amendments, zoning approvals or changes, required approvals and certifications under the California Environmental Quality Act,tentative and final tract maps, parcel map(s), lot line adjustments, variances, conditional use permits, demolition permits, encroachment permits, excavation/foundation permits, grading permits, building permits, inspection reports and approvals, certificates of occupancy, and other approvals,permits, certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature whatsoever required from City and any governmental entity in order to commence and complete the Project. The term"Grant Deed" shall mean that certain Grant Deed conveying the Property from the City to Buyer, substantially in the form attached hereto as Exhibit 7, and incorporated by this reference as though fully set forth herein. The term "Hazardous Substances" shall have the meaning set forth in Section 412 and the Environmental Indemnity. The term "Improvements" shall mean the onsite and offsite private and public site, utilities, sidewalk, paving, landscaping, lighting, building and signage improvements to the Site, Median and Property, as constructed in accordance with this Agreement, including but not limited to the Scope of Development. The term "Median" shall mean the real property described as Assessor Parcel No. 148- 021-24, as depicted on the map attached hereto as Exhibit 2. 3 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 The term "Method of Financing" shall mean the Method of Financing attached hereto as Exhibit 3, and incorporated by this reference as though fully set forth herein. The term"Parcel Map" shall mean the map by which the Property, Median and portions of the Site are to be consolidated and re-subdivided to create legal building parcels for the Project, substantially in the form attached hereto as Exhibit 15, and incorporated by this reference as though fully set forth herein. The term "Permitted Transfer" shall mean any Transfer that is approved by the City or expressly permitted by the terms of this Agreement. The term"Plans" shall include, but not be limited to, any and all architectural, engineering, utility, landscape, and construction plans and drawings prepared on behalf of Buyer for the Project in accordance with this Agreement. The term "Project" shall mean the consolidation and subdivision of the Property,the Median, and a portion of the Site and development of new retail pads and buildings and the installation of the Improvements„ more particularly described in the Scope of Development. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit 4, and incorporated by this reference as though fully set forth herein, setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development" shall mean the anticipated scope of development for the Project as set forth in the document attached hereto as Exhibit 5, and incorporated by this reference as though fully set forth herein. The term "Site" shall mean that real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as the Beach Promenade Shopping Center and described as Assessor Parcels Nos. 142-021-12, 14, 15, 17, 18 and 19, as depicted on Exhibit 2. The term "Subordination Agreement' shall mean that agreement by which the City agrees to subordinate its secured interest in Parcels 2 and 4 of the Parcel Map in favor of the construction financing. The term "Transfer" shall mean: (i)the assignment or attempted assignment of this Agreement or any right herein or the sale, agreement to sell, transfer or conveyance of the Property or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise,the execution of any installment sale contract or similar instrument affecting all or a portion of the Property, except as provided in subparagraph (iii), below. 4 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (ii) "Transfer" shall also include the transfer, assignment,hypothecation or conveyance of legal or beneficial ownership of any interest in Buyer, or any conversion of Buyer to an entity form other than that of Buyer at the time of execution of this Agreement. (iii) Notwithstanding paragraphs (i) and(ii), "Transfer"shall not include any of the following,which shall constitute Permitted Transfers: (a) The leasing for occupancy of all or any part of the Site. (b) The granting of easements or rights of way to facilitate the development of the Project. (c) Provided that Bijan Sassounian remains as managing member of Buyer, a transfer of ownership of Buyer between Bijan Sassounian and any immediate family member or entity of which Bijan Sassounian is an owner. (d) A transfer of ownership for any parcel after the City Deed of Trust recorded on such parcel has been released. The term "UCC1 Financing Statement" shall mean a document substantially in the form attached hereto as Exhibit 11, and incorporated by this reference as though fully set forth herein. ARTICLE 2: SUBJECT OF THIS AGREEMENT Section 201: Purpose of Agreement 1. The purpose of this Agreement is to implement the City's General Plan to promote development of the Property, Median and Site by providing for the conveyance of the Property from City to Buyer; Buyer's consolidation and resubdivision of the Property, Median and portion of the Site; development of additional retail parcels, buildings, parking areas and infrastructure improvements to the Site. The Project and the fulfillment generally of this Agreement are in the best interests of City and Buyer and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements under which the Project has been undertaken. Section 202: Prohibition Against Transfers 1. The qualifications and identity of Buyer are of particular concern to City. It is because of those qualifications and identity that City has entered into this Agreement with Buyer. No voluntary or involuntary successor in interest of Buyer shall acquire any rights or powers under this Agreement except as expressly set forth herein. 2. Except for the Permitted Transfers set forth in this Agreement's definition of the term"Transfer,"which are exempt from the provisions of this paragraph(b), Buyer shall not assign all or any part of this Agreement nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, without the prior written approval of the 5 GTDA2009 drafts. Beach-Atlanta00 PSA Draft 6a 2011-01-11 City, which approval may be withheld in City's reasonable discretion. Any proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by City, to fulfill the obligations undertaken in this Agreement by Buyer. Any such proposed transferee, by instrument in writing satisfactory to City and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of City shall expressly assume all of the obligations of Buyer under this Agreement and agree to be subject to all conditions and restrictions applicable to Buyer in this Agreement. There shall be submitted to City for review all instruments and other legal documents proposed to affect any such Transfer, and if approved by the City, its approval shall be indicated to Buyer in writing. Buyer agrees to reimburse City for its reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested Transfer that requires City's approval' hereunder, in an amount not to exceed Five Thousand Dollars($5,000.00)for each such Transfer (which amount shall be adjusted by the escalation in the Consumer Price Index measured from the Effective Date of this Agreement to the date of Buyer's request for approval of the Transfer). 3. For the reasons cited above, Buyer represents and agrees for itself and any successor in interest that, except for the Permitted Transfers set forth in this Agreement's definition of the term"Transfer,"without the prior written approval of the City, there shall be no cumulative change in ownership interest of any general partner of Buyer of greater than 49%, or with respect to the identity of the parties in control of Buyer or the degree thereof, by any method or means. 4. Buyer shall promptly notify City of any and all changes whatsoever in the identity of the parties in control of Buyer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by City and City may exercise any and all available remedies, if there is any significant change (voluntary or involuntary) in membership, management or control, of Buyer(other than(i)the Permitted Transfers set forth in this Agreement's definition of the term"Transfer", (ii) Transfers approved in writing by City pursuant to this Agreement, and (iii) changes occasioned by the death or incapacity of any individual. 5. A Transfer approved by the City shall be deemed to relieve Buyer from its continuing obligations under this Agreement only if the approved transferee expressly assumes all of the obligations of Buyer under this Agreement and agrees to be subject to all conditions and restrictions applicable to Buyer in this Agreement. Notwithstanding the foregoing, no Transfer, approved or otherwise, shall operate to relieve Buyer of its indemnification obligations related to Buyer's ownership and operation of the Project. 6. Consent to one Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. ARTICLE 3: BUYER'S ACQUISITION OF THE PROPERTY Section 301: Ownership of the Property As of the Effective Date of this Agreement, fee title to the Property is held by City. 6 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Section 302: City s Agreement to Sell and Buyer's Agreement to Purchase 1. City agrees to sell and convey fee title to the Property and Buyer agrees to accept title to the Property from City. 2. Buyer shall pay as the purchase price for the Property the amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00) (the"Property Purchase Price"). Property Purchase Price will be paid by Buyer to City as set forth in the Buyer Documents and the Method of Financing and through the execution of the Buyer Note in the original principal amount of the Property Purchase Price, substantially in the same form as Exhibit 8. The Buyer Note will be secured by a deed of trust to be recorded against Parcels 2 and 4 of the Parcel Map, substantially in the form of the deed of trust attached hereto as Exhibit 9. 3. Subject to any mutually agreed upon extension of time, City shall convey title to the Property to Buyer upon Close of Escrow(so long as all conditions precedent have been satisfied), or such later date mutually agreed to in writing by City and Buyer and communicated in writing to the Escrow Agent. 4. City shall convey to Buyer title to the Property in the condition provided in paragraph (5) below by grant deed, substantially in the form attached hereto as Exhibit 7. 5. Subject to the terms and conditions of this Agreement, City shall convey to Buyer fee simple merchantable title to the Property free and clear of all liens, encumbrances, assessments, easements, leases and taxes, except those which have been approved by Buyer as provided in Section 304. Title to the Property shall be conveyed to Buyer free of any possession or right of possession except to the extent waived by Buyer in writing. 6. Buyer acknowledges and agrees that, except as expressly set forth in this Agreement, City makes no representations and warranties, express or implied, as to the Property. It is understood and agreed that with respect to the physical condition of the Property, such property is being sold and conveyed hereunder and, upon tender of conveyance, Buyer agrees to accept the Property"as is," "where is" and "with all faults"and subject to any condition which may exist, without any representation or warranty by City except as expressly set forth in this Agreement. Other than the representations and warranties set forth in this Agreement, Buyer hereby expressly acknowledges and agrees that Buyer is relying solely upon its inspections, examination, and evaluation of the Property in purchasing the Property on an"as is,""where is" and"with all faults"basis. Section 303: Buyer's Due Diligence 1. Delivery of Title Report. Within thirty(30) days of the execution of this Agreement,the Buyer shall be provided, at City's expense, with a Preliminary Title Report on the Property. 2. Approval Period. From the date of delivery of the Preliminary Title Report until ninety(90) calendar days thereafter(the"Approval Period"),Buyer shall review and approve the 7 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by and through their authorized officers the day, month and year first above written. ASSIGNOR: ASSIGNEE: BEACH PROM a California CITY OF HUNTINGTON BEACH, A limited lia compa municipal corporation of the Stat California By: pai name/title 2 Date /2�/ r � �/ Maor By: t. &?- AJV 5'71sSOUAI<,AN —� print name/title INI ATED AND APPROVED: Director of Econo De elopment APPROVED AS TO FORM: r-City Attorney REV AND APPROVED: Ci A instrator 2 Beach-Atlantali_Assignment of Agreements Final 2011_02_02 EXHIBIT 14 FIRPTA CERTIFICATE TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor(seller) is a foreign person. To inform Beach Promenade LLC (the "Transferee")that withholding of tax is not required upon the disposition of a U.S. property interest by the City of Huntington Beach (the "Transferor"), the undersigned hereby certifies the following on behalf of the Transferor: 1. That the Transferor is the owner of the following described real property, to wit: (see legal description attached hereto as Exhibit"A") 2. The Transferor is not a non-resident alien for purposes of the U.S. income taxation(as such term is defined in the Internal Revenue Code and Income Tax Regulations). 3. The Transferor's U.S. employer or taxpayer identification number is t7 5 • &600l d 3 4. The Transferor's address is 2000 Main Street, Huntington Beach, CA 92648. 5. The Transferor understands that this certification will be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury, I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of the Transferor. "TRANSFEROR" CITY OF HUNTINGTON BEACH A Califiorni4 mu icipal corporation Dated: 30 120 By: py t dministrator APPROVED AS TO FORM: r �✓C,/ /i/Z��z—o�a City Attorney G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlantal4 FIRPTA Certificate Exhibit A SHEET 10E 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN i BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF € SAID COUNTY, DESCRIBED AS FOLLOWS: i BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580, NORTH 89°37'06"EAST, 89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; } Y THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39"WEST, 133.85 FEET,TO THE J BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9'1025",AN ARC DISTANCE OF 160.11 FEET; { THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89°37'06"WEST, 88.00 FEET TO THE EAST LINE,OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14" EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 09-50-39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B" ATTACHED AND THIS REFERENCE MADE A PART HEREOF. LAND SG�, U vl tv EXP. 12-31-11 * * 1 JOSEPH G.DERLETH sr L S. 7340 PLS 7340, EXPIRES 12131/11 qrF OF caN�4°�` Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS 4 t I NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11W, SBM -T6S R11W, SBM PER PM 94-590 (N89-37'06"lE) ATLANTA AVE "-3 5 50 — — —— — — — — —— —— --L—— —— —— — o, PARCEL 2, PM 84. 202/48-50 PM 4 4 4 3E W'LY LINE SEC 13 T6S, R11W, SBM m > ,)n m:r z m C loll 7 RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 IPARCEL 2, PM 84-590,. INCLUSIVE OF PARCEL MAPS 202/48-50 PM =PORTION OF STATE HIGHWAY i o4 RELINQUISHMENT NUMBER 632, — RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP � BOOK 5, PAGES 45 AND 46. o 90,340 SQ FT, (2.07 ACRES) Co. EXHIBIT B PARCEL 2, PM 84-590, 202/48-5D PM SHEET I OF 3 5 ( 8 GRAPHIC SCALE - — —— — — 1 inch =150 ft. 150 I 0 7$ 150 PARCEL 1 PM 84-590 202/48-50 PM IN FM EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i ATLANTA AVE GRAPHIC SCALE (N89'37'06"E) �22' 1 inch =50 ft. NW'LY COR SEC 13 so 25 so T6S, R11 W, SBM o 8' PER PM 84-590 C? o ( IN FEET } ( } = RECORD PER PARCEL MAP I 84-590, FILED IN BOOK 202, s— PAGES 48 THROUGH 50 1-11 E'LY LINE, PARCEL 1 PER STATE HWY MAP INCLUSIVE OF PARCEL MAPS. oo BOOK 5, PAGES 44 {( }} = po RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK C1 5, PAGES 45 AND 46. _ �= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, i RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A EXHIBIT PORTION OF PARCEL 1, STATE R HIGHWAY MAP BOOK 5. ?j SHEET 2 OF 3 I E i LINE TABLE: IE L1= N89'37'06"E, 89.21' L2= N00'40'14"W, 730.41' PARCEL 2, PM 84-59Q, 202/48-50 PM cr mm 0 1 C 85 Cm Q o f--W'LY LINE SEC 13 Z T6S, R11 W, SBM "� 0 W POINT OF NE COR PARCEL 3 0 - 1, PM 84-590, BEGINNING, SE 8' 202/48-50 PM ® COR PARCEL 2, w m o PM 84-590, 202/48-50 PM } rn� 1 8' (88.00') (54-91') L1 N'LY LINE PARCEL 1� PM 84-590 (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FOBFROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i i 1 i GRAPHIC SCALE k 1 inch =50 ft N'LY LINE SEC 13 5D 0 25 50 T6S, R11 W, S.B.M. i ATLANTA AVE ( IN FEET ) (N89*37'06"E) NW'LY COR SEC 13 30' T6S, R11 W, SBM 50' 50' PER PM 84-590 L3 { ) = RECORD PER PARCEL MAP 44./410- 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. g' 8 22' PARCEL 2, 0 0 PM 84-590, o :�?' 6 202/48-50 PM , o - REELIINIQUISON OHMEN TTNUMBERW �Y g EXHIBIT B 632, RECORDED 2/26/68, IN a SHEET 3 OF 3 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, v STATE HIGHWAY MAP BOOK - 5, PAGES 45 AND 46. ! °o 00 I rn IE t LINE TABLE: i L3= S89'37'06"W, 88.00' C W'LY LINE SEC 13 1 E'LY LINE, PARCEL 1 W z T6S, R11 W, SBM PER STATE HWY MAP i m o I BOOK 5, PAGES 41 a PARCEL 2, AND 42. '• rn PM 84-590, z 202/48-50 PM m �22' 1TI �"' O 00 m 881 E EXHIBIT B { BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE j CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i TENTATIVE LEGAL pA SHOTION: z PARCEL MAP NO. 2009-122 1ITH THE—IT oRDo f�so=PA E o DEfD REcoaC=o,IULr I I.less Iry eo R sn or omcwI REc°Ros. IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE -mod® STATE OF CALIFORNIA QWNERs: SUBDIVIDER: MAP PREPARER tls IIANN A.P. NO.: 148-210-15, 19 & 24 11IH.ca IF- Co111,111T, . e AREA: 5.28 ACRES na-sTa-5175 n NTRIT sre,o H IA ersao .,,,,Hfr d.wnmEN, s s�< AUGUST 2009 ne-na-SST H'IN szs<a s -Cl NENDNCTON DEAN,CA szsao t NOTES: to Ig _ - x elui eauufxelnc HUNTINGTON BEACH CHANNEL _ IC e. nnuOF IIINTINCT.N e(Puauc) — _ _ _ _ H N- RI II-F.nlv"sro wnwr-arvr vfAC A _ 12n ix 0. 1R mnA noon iu�aAry E FATE UAP nuusEa a5o5sco25 PM6 A e 9 • s a. T oN FINAL PARCEL rAE Br THE cItt°F IIV4TINGTFI BFRavIacV,aaAp)to BE neArvourvro/vauiEc �. 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A R-1 BEACH PROMENADE,LLC s�sier oe (vvv)eev-DEED Fax:eav-win HUNTINGTON BEACH,CALIFORNHA I Council/Agency Meeting Held: 1A 6/O Deferred/Continued to: Approved ❑ Conditionally Approved ❑ Denied y rk's Si ature Council Meeting Date: December 6, 2010 Department ID Number: ED 10-010 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Administrator PREPARED BY: Bob Hall, Deputy City Administrator - SUBJECT: Adopt Resolution No. 2010-98 declaring disposition-of certain surplus - property; and, approve and authorize execution of a Purchase Agreement between the City and-Beach Promenade LLC for the purchase of property referred to as the Beach/Atlanta Frontage Road Statement of Issue: The City Council is asked to approve the-Purchase Agreement By and Among the City of Huntington Beach and Beach Promenade LLC, a California Limited Liability Company, for the Purchase of Property commonly referred to as the Beach Atlanta Frontage Road. Financial Impact: This transaction will eventually yield $1,200,000 over a maximum of ten (10) years to the General Fund, Account Number 10000100.48135. Minimum payments will be $50,000 per year plus interest and a sum of $300,000 per each Certificate of Occupancy that is issued until paid in full. Recommended Action: Motion to: A) Approve and authorize the Mayor and City Clerk to execute-the "Purchase Agreement By and Among the City of Huntington Beach, a Municipal Corporation, and Beach Promenade LLC, a California Limited Liability Company," for the purchase of property commonly referred to as the Beach Atlanta Frontage Road; and, B) Authorize the City Administrator or his designee to execute any other related escrow documents; and, C) Adopt Resolution No. 2010-98, "A Resolution of the City Council of the City of Huntington Beach Declaring the Disposition of Certain Surplus Property." - Alternative Action(s): Do not approve the Purchase Agreement and/or Resolution declaring the Disposition of Surplus Property and direct staff accordingly. HB -29- Item 2. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 12/06/2010 DEPARTMENT ID NUMBER: ED 10-10 Analysis: The City of Huntington Beach (City) is the owner of a 2.07 acre parcel located at the southeast corner of Beach-Boulevard and Atlanta Avenue commonly referred to as the Frontage Road (Site). This site was formerly a frontage road and used for street and highway purposes. The buyer, Beach Promenade LLC, owns five parcels of land totaling 3.79 acres within the Beach Promenade Shopping Center adjacent to the frontage road. The buyer also owns a strip of land located between Beach Boulevard and the frontage road. The buyer desires to acquire the site to incorporate-it within a reconfiguration of the site, consistent with the goals and objectives of the City's General Plan (Attachment 2 - existing Site-Plan). The property owner received approval of CUP 2008-13 and VAR 2008-07 by the City Council on May 4, 2009, which proposed to remodel the existing shopping center. At that time, City Council directed staff to work-with the buyer in order to incorporate the frontage road as part of their project. The buyer then amended the application proposing to expand the shopping center by acquiring the frontage road parcel and merging it with the adjacent shopping center. The amended project, under EPA 2009-09 and TPM 2009-79, would allow for expansion of the existing-parking and landscaping improvements and would create three new parcels and the associated building pads for future retail uses (Attachment 3 - proposed Site Plan). As part of the City process to vacate the road, the Planning Commission approved the General Plan Conformance No. 09-007 on February 9, 2010, with a finding that the street vacation conforms to the City's General Plan. An amended application was submitted and on June 22, 2010, the Planning Commission approved Entitlement Plan Amendment No. 09- 009, Tentative Parcel Map No. 09-079, CUP No. 10-005, VAR No. 10-001 (Amendment to CUP No. 08-013 and VAR No. 08-007) to fully entitle the project. City Council approved the adoption of Resolution No. 2010-78 ordering the intent to vacate the frontage road at the August 16, 2010, City Council meeting. At the October 18, 2010, City Council meeting, a Pubtic Hearing was held and City Council approved Resolution No. 2010-78 ordering the vacation of the frontage road. Staff negotiated with the buyer to purchase the frontage road site for $1,200,000 (or approximately $13 per square foot), which is the fair market value based on two appraisal reports. Both appraisers are licensed by the Office of Real Estate Appraisers and have an MAI appraiser designation. The method of payment to the City is as follows: The buyer will deposit $50,000 into escrow. Upon each anniversary of the date of deposit of the initial payment, the buyer will pay the City $53,500 (which includes seven percent (7%) per annum interest). The buyer will pay the City $300,000 within 120 days of issuance of a Certificate of Occupancy for the first building, or within four (4) years of the close of escrow, whichever occurs first. The buyer will pay another $300,000 within 120 days of issuance of a Certificate of Occupancy for the second building, or within six (6) years of the close of escrow (whichever comes first), and the third Item 2. - 2 HB -30- REQUEST FOR COUNCIL ACTION MEETING DATE: 12/06/2010 DEPARTMENT ID NUMBER: ED 10-10 $300,000 installation is for the third building within eight (8) years of the close of escrow, or whichever occurs first. Any remaining unpaid portion of the purchase price must be paid no later than ten (10) years from the close of escrow. All sums paid by the buyer to the City are nonrefundable. This payment schedule is identified in more detail in the Purchase Agreement as well as Exhibit 4-Schedule of Performance. Approval of this Purchase Agreement does not approve the overall potential project. The buyer will be working with the City's Planning Department for future project approvals. Staff is also seeking City Council approval for the Resolution declaring the Disposition of the frontage road as surplus property(Attachment 4). Environmental Status: The proposed project is categorically exempt pursuant to Class V: Alterations in Land Use Limitations, sub-section (a) minor street, alley and utility easement vacations, or Resolution No. 4501 of the City of Huntington Beach. Strategic Plan Goal: Enhance Economic Development. Attachment(s): a 1. Purchase Agreement By and Among the City of Huntington Beach and Beach Promenade LLC, a California Limited Liability Company, for the Purchase of the Property referred to as the Beach Atlanta Frontage Road 2. Current Site Plan 3. Proposed Site Plan 4. Resolution No. 2010-98, "A Resolution of the City Council of the City of Huntington Beach Declaring the Disposition of Certain Surplus Property" HB -31- Item 2. - 3 ATTACHMENT # 1 Item 2. . 4 Ha -32- C PURCHASE AGREEMENT By And Among THE CITY OF HUNTINGTON BEACH, a municipal corporation, and BEACH PROMENADE LLC. a California Limited Liability Company LIST OF EXHIBITS EXHIBIT NO. 1 - LEGAL DESCRIPTION EXHIBIT NO.2 - SITE MAP EXHIBIT NO. 3 - METHOD OF FINANCING EXHIBIT NO.4 - SCHEDULE OF PERFORMANCE EXHIBIT NO. 5 - SCOPE OF DEVELOPMENT EXHIBIT NO. 6 - RESERVED EXHIBIT NO. 7 - GRANT DEED EXHIBIT NO. 8 - BUYER NOTE EXHIBIT NO. 9 - CITY DEED OF TRUST EXHIBIT NO. 10 - ENVIRONMENTAL INDEMNITY EXHIBIT NO. 11 - UCC 1 FINANCING STATEMENT EXHIBIT NO. 12 CONDITION OF PROPERTY(§307.1) EXHIBIT NO. 13 ASSIGNMENT OF AGREEMENTS (§411.2) EXHIBIT NO. 14 FIRPTA CERTIFICATE (§305(3)(c) EXHIBIT NO. 15 PARCEL MAP ii AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY("Purchase Agreement") is entered 06 , ;D/D- (the"Effective Date") by and between THE CITY OF HUNTINGTON BEACH, a California municipal corporation, ("City")and BEACH PROMENADE LLC, a California limited liability company("Buyer"). City and Buyer(collectively,the"Parties") hereby agree as follows: RECITALS A. CITY is the owner of a 2.07-acre parcel located at the southeast corner of Beach Boulevard and Atlanta Avenue in Huntington Beach,California, commonly referred to as the Frontage Road,and more particularly described in the legal description attached hereto as Exhibit I and incorporated by this reference as though fully set forth herein (the"Property"). B. Buyer owns five parcels of land totaling 3.79 acres within the Beach Promenade Shopping Center adjacent to the Property(the"Site"). The Site is depicted in the map attached hereto as Exhibit 2, and incorporated by this reference as though fully set forth herein. Buyer also owns a strip of land located between Beach Boulevard and the Property(the"Median"). The Median is also depicted on Exhibit 2. Buyer desires to acquire the Property incorporate it within a reconfiguration of the Site consistent with the goals and objectives of the City's General Plan. City desires to convey fee simple absolute title in the Property to Buyer in accordance with this Agreement. The purpose of this agreement is to promote the reconfiguration of the Site by providing for the conveyance of the Property to Buyer;the City's financing of Buyer's acquisition of the Property in the.amount of One Million Two Hundred Thousand Dollars ($1,200,000.00) (the "Property Purchase Price"), as evidenced by the Buyer Note and secured by the City Deed of Trust; consolidation and reconfiguration of the Property,the Median and the Site to create new retail pads and buildings; installation of improvements to the public street adjacent to the Site, and other improvements to the infrastructure,-landscaping and parking within the reconfigured Site. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties agree as follows: ARTICLE 1: DEFINITIONS For purposes of this Agreement,the following capitalized terms shall have the following meanings: The term `Buyer" shall mean BEACH PROMENADE LLC, a California limited liability company, whose address is 21190 Beach Boulevard, Huntington Beach, CA 92648, and any permitted assignee or nominee. 1 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 The term `Buyer Documents"shall mean this Agreement, the Buyer Note, the City Deed of Trust, and the UCCI Financing Statement. The term"Buyer Note"shall mean the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust, substantially in the form attached hereto as Exhibit 8, and incorporated by this reference as though fully set forth herein. The term"City" shall mean the City of Huntington Beach, a California municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to,the rights,powers, and responsibilities of City. The term"City Administrator"shall mean the individual duly appointed to the position of City Administrator of City. Subject to the terms of Sections 404, 504 and 606, whenever an administrative action is required by City to implement the terms of this Agreement,the City Administrator shall have authority to act on behalf of City, except with respect to matters reserved under California law wholly for determination by the City's governing body. The term "City Deed of'Trust"shall mean the Deed of Trust with Assignment of Rents substantially in the form attached hereto as Exhibit 9, and incorporated by this reference as though fully set forth herein, in which Buyer is the Trustor and City is the Beneficiary, which secures the Buyer Note. The term "Close of Escrow" shall mean the date that all Conditions for Escrow have been fulfilled. The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days, unless otherwise specified. The term "Effective Date"shall mean the date the City Council of the City of Huntington Beach approves this Agreement and authorizes its execution; which date shall be inserted into the preamble of this Agreement. The term "Environmental Indemnity" shall mean the indemnity by Buyer, substantially in the form attached hereto as Exhibit 10, and incorporated by this reference as though fully set forth herein. The term "Escrow" shall mean that certain escrow opened with First American Title Insurance Company, the Escrow Agent, established for the conveyance of the Property from City to Buyer and other actions that the Escrow Agent may be authorized to perform pursuant to the terms of this Agreement. The term "Escrow Agent" shall mean First American'Title Insurance Company.. The term "Force Majeure"or"Force Majeure Event" shall mean the following events, provided that they actually delay and interfere with the timely performance of the matter to 2 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 which it would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference: war; insurrection; strikes; lock-outs; riots; floods;earthquakes; fires; casualties; acts of God;acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any governmental agency other than City;the imposition of any applicable moratorium by a governmental agency other than City; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing,none of the foregoing events shall constitute a Force Majeure Event unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause,when and how such party obtained knowledge,the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. The term "Force Majeure Delay"shall mean any delay in taking any action required by this Agreement, proximately caused by the occurrence of any Force Majeure Event. The term"Governmental Approvals" shall mean and include any and all general plan amendments,zoning approvals or changes, required approvals and certifications under the California Environmental Quality Act, tentative and final tract maps, parcel map(s), lot line adjustments, variances, conditional use permits, demolition permits, encroachment permits, excavation/foundation permits, grading permits, building permits, inspection reports and approvals,certificates of occupancy, and other approvals, permits, certificates, authorizations, consents, orders, entitlements, filings or registrations, and actions of any nature whatsoever required from City and any governmental entity in order to commence and complete the Project. The term "Grant Deed" shall mean that certain Grant Deed conveying the Property from the City to Buyer, substantially in the form attached hereto as Exhibit 7, and incorporated by this reference as though fully set forth herein. The term "Hazardous Substances" shall have the meaning set forth in Section 412 and the Environmental Indemnity. The term"Improvements" shall mean the onsite and offsite private and public site, utilities, sidewalk, paving, landscaping, lighting, building and signage improvements to the Site, Median and Property, as constructed in accordance with this Agreement, including but not limited to the Scope of Development. The term "Median"shall mean the real property described as Assessor Parcel No. 148- 021-24, as depicted on the map attached hereto as Exhibit 2. 3 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 The term "Method of Financing" shall mean the Method of Financing attached hereto as Exhibit 3, and incorporated by this reference as though fully set forth herein. The term "Parcel Map"shall mean the map by which the Property, Median and portions of the Site are to be consolidated and re-subdivided to create legal building parcels for the Project, substantially in the form attached hereto as Exhibit 15, and incorporated by this reference as though fully set forth herein. The term "Permitted'Transfer" shall mean any Transfer that is approved by the.City or expressly permitted by the terms of this Agreement. The term "Plans"shall include, but not be limited to, any and all architectural, engineering, utility, landscape, and construction plans and drawings prepared on behalf of Buyer for the Project in accordance with this Agreement. The term"Project'shall mean the consolidation and subdivision of the Property,the Median, and a portion of the Site and development of new retail pads and buildings and the installation of the Improvements„ more particularly described in the Scope of Development. The term "Schedule of Performance" shall mean that certain schedule attached hereto as Exhibit 4, and incorporated by this reference as though fully set forth herein, setting forth the times upon which performance by the parties under this Agreement is due. The term "Scope of Development' shall mean the anticipated scope of development for the Project as set forth in the document attached hereto as Exhibit 5, and incorporated by this reference as though fully set forth herein. The term "Site"shall mean that real property located in the City of Huntington Beach, County of Orange, State of California, commonly known as the Beach Promenade Shopping Center and described as Assessor Parcels Nos. 142-021-12, 14, 15, 17, 18 and 19, as depicted on Exhibit 2. The term "Subordination Agreement" shall mean that agreement by which the City agrees to subordinate its secured interest in Parcels 2 and 4 of the Parcel Map in favor of the construction financing. The term "'Transfer" shall mean: (i)the assignment or attempted assignment of this Agreement or any right herein or the sale, agreement to sell, transfer or conveyance of the Property or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise,the execution of any installment sale contract or similar instrument affecting all or a portion of the Property, except as provided in subparagraph (iii), below. 4 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (ii) "Transfer"shall also include the transfer, assignment;hypothecation or conveyance of legal or beneficial ownership of any interest in Buyer, or any conversion of Buyer to an entity form other than that of Buyer at the time of execution of this Agreement. (iii) Notwithstanding paragraphs(i)and(ii), "Transfer"shall not include any of the following,which shall constitute Permitted Transfers: (a) The leasing for occupancy of all or any part of the Site. (b) The granting of easements or rights of way to facilitate the development of the Project. (c) Provided that Bijan Sassounian remains as managing member of Buyer, a transfer of ownership of Buyer between Bijan Sassounian and any immediate family member or entity of which Bijan Sassounian is an owner. (d) A transfer of ownership for any parcel after the City Deed of Trust recorded on such parcel has been released. The term"UCC1 Financing Statement" shall mean a document substantially in the form attached hereto as Exhibit 11, and incorporated by this reference as though fully set forth herein. ARTICLE 2: SUBJECT OF THIS AGREEMENT Section 201: Purpose of Agreement 1. The purpose of this Agreement is to implement the City's General Plan to promote development of the Property, Median and Site by providing for the conveyance of the Property from City to Buyer; Buyer's consolidation and resubdivision of the Property, Median and portion of the Site; development of additional retail parcels, buildings, parking areas and infrastructure improvements to the Site. The Project and the fulfillment generally of this Agreement are in the best interests of City and Buyer and are in accordance with the public purposes and provisions of applicable federal, state, and local laws and requirements under which the Project has been undertaken. Section 202: Prohibition Against Transfers 1. The qualifications and identity of Buyer are of particular concern to City. It is because of those qualifications and identity that City has entered into this Agreement with Buyer. No voluntary or involuntary successor in interest of Buyer shall acquire any rights or powers under this Agreement except as expressly set forth herein. 2. Except for the Permitted Transfers set forth in this Agreement's definition of the term "Transfer,"which are exempt from the provisions of this paragraph(b), Buyer shall not assign all or any part of this Agreement nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, without the prior written approval of the 5 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 City, which approval may be withheld in City's reasonable discretion. Any proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by City,to fulfill the obligations undertaken in this Agreement by Buyer. Any such proposed transferee, by instrument in writing satisfactory to City and in form recordable among the land records, for itself and its successors and assigns, and for the benefit of City shall expressly assume all of the obligations of Buyer under this Agreement and agree to be subject to all conditions and restrictions applicable to Buyer in this Agreement. There shall be submitted to City for review all instruments and other legal documents proposed to affect any such Transfer, and if approved by the City, its approval shall be indicated to Buyer in writing. Buyer agrees to reimburse City for its reasonable costs and attorneys' fees incurred in connection with the processing and documentation of any requested Transfer that requires City's approval hereunder, in an amount not to exceed Five Thousand Dollars($5,000.00) for each such Transfer (which amount shall be adjusted by the escalation in the Consumer Price Index measured from the Effective Date of this Agreement to the date of Buyer's request.for approval of the Transfer). 3. For the reasons cited above, Buyer represents and agrees for itself and any successor in interest that, except for the Permitted Transfers set forth in this Agreement's definition of the term"Transfer,"without the prior written approval of the City, there shall be no cumulative change in ownership interest of any general partner of Buyer of greater than 49%, or with respect to the identity of the parties in control of Buyer or the degree thereof, by any method or means. 4. Buyer shall promptly notify City of any and all changes whatsoever in the identity of the parties in control of Buyer or the degree thereof, of which it or any of its officers have been notified or otherwise have knowledge or information. This Agreement may be terminated by City and City may exercise any and all available remedies, if there is any significant change (voluntary or involuntary)in membership, management or control,of Buyer(other than (i) the Permitted Transfers set forth in this Agreement's definition of the term "Transfer", (ii)Transfers approved in writing by City pursuant to this Agreement, and(iii) changes occasioned by the death or incapacity of any individual. 5. A Transfer approved by the City shall be deemed to relieve Buyer from its continuing obligations under this Agreement only if the approved transferee expressly assumes all of the obligations of Buyer under this Agreement and agrees to be subject to all conditions and restrictions applicable to Buyer in this Agreement.Notwithstanding the foregoing, no Transfer, approved or otherwise,shall operate to relieve Buyer of its indemnification obligations related to Buyer's ownership and operation of the Project. 6. Consent to one Transfer shall not be deemed to be a waiver of the right to require consent to future or successive Transfers. ARTICLE 3: BUYER'S ACQUISITION OF THE PROPERTY Section 301: Ownership of the Property As of the Effective Date of this Agreement, fee title to the Property is held by City. 6 G:PDA:2009 drafts: Beach-Aflanta00 PSA Draft 6a 201 1-01-11 Section 302: City's Agreement to Sell and Buyer's Agreement to Purchase 1. City agrees to sell and convey fee title to the Property and Buyer agrees to accept title to the Property from City. 2. Buyer shall pay as the purchase price for the Property the amount of One Million, Two Hundred Thousand Dollars($1,200,000.00)(the"Property Purchase Price"). Property Purchase Price will be paid by Buyer to City as set forth in the Buyer Documents and the Method of Financing and through the execution of the Buyer Note in the original principal amount of the Property Purchase Price, substantially in the same form as Exhibit 8. The Buyer Note will be secured by a deed of trust to.be recorded against Parcels 2 and 4 of the Parcel Map, substantially in the form of the deed of trust attached hereto as Exhibit 9. 3. Subject to any mutually agreed upon extension of time, City shall convey title to the Property to Buyer upon Close of Escrow(so long as all conditions precedent have been satisfied), or such later date mutually agreed to in writing by City and Buyer and communicated in writing to the Escrow Agent. 4. City shall convey to Buyer title to the Property in the condition provided in paragraph (5) below by grant deed, substantially in the form attached hereto as Exhibit 7. 5. Subject to the terms and conditions of this Agreement, City shall convey to Buyer fee simple merchantable title to the Property free and clear of all liens, encumbrances, assessments, easements, leases and taxes, except those which have been approved by Buyer as provided in Section 304. Title to the Property shall be conveyed to Buyer free of any possession or right of possession except to the extent waived by Buyer in writing. 6. Buyer acknowledges and agrees that, except as expressly set forth in this Agreement, City makes no representations and warranties, express or implied, as to the Property. It is understood and agreed that with respect to the physical condition of the Property, such property is being sold and conveyed hereunder.and, upon tender of conveyance, Buyer agrees to accept the Property"as is,""where is" and"with all faults"and subject to any condition which may exist, without any representation or warranty by City except as expressly set forth in this Agreement. Other than the representations and warranties set forth in this Agreement, Buyer hereby expressly acknowledges and agrees that Buyer is relying solely upon its inspections, examination, and evaluation of the Property in purchasing the Property on an"as is,""where is" and"with all faults" basis. Section 303: Buyer's Due Dili eg nce 1. Delivery of Title Report. Within thirty(30)days of the execution of this Agreement,the Buyer shall_be provided, at City's expense,with a Preliminary Title Report on the Property. 2. Approval Period. From the date of delivery of the Preliminary Title Report until ninety(90)calendar days thereafter (the "Approval Period"), Buyer shall review and approve the 7 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Preliminary Title Report, the Conditions of Property, and review and investigate the physical and environmental condition of the Property and any other factors or matters relevant to Buyer's decision to purchase the Property(collectively,the`Buyer's Due Diligence"). If the Property is not acceptable for any reason whatsoever, Buyer shall have the right, by giving written notice to City on or before the last day of the Approval Period,to terminate this Agreement. If Buyer does not deliver written notice terminating this Agreement to City on or before the last day of the Approval Period, Buyer shall be deemed to have approved the Property and this Agreement shall continue in full force and effect. Section 304: Conditions to Close of Escrow 1. City's Conditions to Close of Escrow. City, at its election, shall not be obligated to close escrow if(i) Buyer is in material default of this Agreement; (ii)any of Buyer's representations and warranties contained herein shall be proven materially untrue; (iii)Buyer shall not have deposited Buyer's share of costs described in Section 305(7)herein with Escrow Agent; or(iv) Buyer shall not have deposited with Escrow Agent any document reasonably required of it by Escrow Agent to close the Escrow. 2. Buyer's Conditions to Close of Escrow. Buyer, at its election, shall not be obligated to close escrow if. (i)City is in material default of this Agreement; (ii)any of City's representations and warranties contained herein shall be proven materially untrue; (iii) if, after review of a preliminary title report issued by Title Company(as hereinafter defined) (the"Title Report"), Buyer determines that the condition of title is not as represented herein by City, or first American Title Insurance Company("Title Company"), upon payment of its regularly scheduled premium, has not agreed to issue a Standard Title Insurance Policy("Title Policy") for the Property upon the Close of Escrow, in the amount of the Property Purchase Price showing title,to the Property vested of record in the name of Buyer in fee simple subject only to such exceptions as approved by Buyer in writing; (iv)Buyer does not approve the condition of the Property after performing Buyer's Due Diligence(as hereinafter defined); (v) City has not executed and delivered to Escrow the Grant Deed, or any other document reasonably required of it by Escrow Agent to close escrow, or(vi) all Government Approvals required for development of the Project in substantial conformance with the Scope of Development have not been obtained, including the expiration of any legal challenge period for any of the Government Approvals 3. Termination. In the event each of the conditions set forth in Section 304(2) is not fulfilled within the time provided in Section 302(3) or waived in writing by Buyer prior to the date scheduled for the Close of Escrow, Buyer may, at its option, terminate this Agreement and the Escrow opened hereunder, thereby releasing the parties from further obligations hereunder, and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer and all deposit documents delivered by City to Buyer or Escrow Agent returned to City shall be returned to Buyer. In the event that each of the conditions set forth in Section 304(1) are not fulfilled or waived in writing by City prior to the date scheduled for the Close of Escrow, City may, at its option,terminate this Agreement and the Escrow opened hereunder,thereby releasing the parties from further obligations hereunder, and all documents delivered by City to Buyer or Escrow Agent shall be returned immediately to City and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer. No demand for termination shall be recognized until 8 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 10 days after the Escrow Agent(or the party making such demand) shall have mailed copies of such demand to the other party or parties at the addresses set forth in Article I of this Agreement and in the manner set forth in Section 703 of this Agreement for notices between the parties hereto. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the 10-day period, in which event the Escrow Agent is authorized to hold all money, papers, and documents with respect to the escrow until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, the escrow shall be closed as soon as possible. Section 305: Escrow 1. Opening of Escrow. City and Buyer agree to open an escrow with the Escrow Agent for City's conveyance to Buyer of title to the Property. This Section 305 shall constitute the joint escrow instructions of City and Buyer, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. The Escrow Agent to whom these instructions are delivered is hereby authorized and instructed to act under this Agreement. The Parties hereto agree to use commercially reasonable best efforts to do all acts necessary to close this Escrow in the shortest possible time. City and Buyer shall provide such additional escrow instructions consistent.with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to City and Buyer within five(5)days after opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder. 2. Escrow AjZent Authorization. The Escrow Agent is authorized to, and shall: (a) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (b) Pay and charge Buyer for any escrow fees, charges, and costs payable under this Agreement; (c) Disburse funds, deliver, and record the Grant Deed when Buyer and City have fulfilled conditions of this Escrow;and (d) Do such other actions as necessary, including obtaining the policy of title insurance, to fulfill its obligations under this Agreement. 3. Close of Escrow Obligations of City. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow(unless indicated otherwise), City shall deliver to Escrow Agent(unless indicated to be delivered directly to Buyer)the following documents and other items: (a) The Grant Deed duly executed and acknowledged (where appropriate)by City; (b) The City Deed of Trust duly executed and acknowledged by City; 9 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (c) A certification("FIRPTA Certificate") duly executed by each party comprising City under penalty of perjury in substantially the form of Exhibit 14, setting forth City's addresses and social security numbers, and certifying that none of the parties comprising City is a"foreign person"for purposes of Section 1445 (as may be amended)of the Internal Revenue Code of 1986, as amended, and any regulation promulgated thereunder and City is a resident taxpayer in the State of California for purposes of Revenue and Taxation Code Sections 18805 and 26131. (d) Two(2)duplicate original copies of the Close of Escrow Statement duly executed by City; (e) Any other documents,-instruments, funds and records required to be delivered to Buyer under the terms of this Agreement which have not been previously delivered or are otherwise required by Escrow Agent or title Company in order to close Escrow. 4. Close of Escrow Obligations of Buyer. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deliver to Escrow Agent copies of the following documents and other items: (a) One (1) original of the City Deed of Trust duly executed by Buyer; (b) One(1)original of the Buyer Note duly executed by Buyer; (c) Two(2)duplicate original copies of the Environmental Indemnity Agreement, duly executed by Buyer; (d) Two (2)duplicate original copies of the Close of Escrow Statement duly executed by Buyer; (e) Evidence of the existence, organization and authority of Buyer and of the authority of persons executing documents on behalf of Buyer reasonably satisfactory to the Escrow Agent and the Title Company;and (f) Any other documents, instruments or funds required to be delivered by Buyer under the terms of this Agreement or are otherwise required by Escrow Agent or Title Company in order to close Escrow which have not previously been delivered. 5. Procedure. Escrow Agent shall close Escrow for the Property as follows: (a) Record the Grant Deed, the Parcel Map, and the City Deed of Trust with the Recorder of Orange County, California; (b) Forward all Deposits paid by Buyer to City reduced by appropriate charges against City hereunder; 10 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (c) Deliver the FIRPTA Certificates to Buyer; (d) Instruct the Title Company to deliver the Title Policy to Buyer; (e) Forward to both Buyer and City a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow,with such recording and filing date endorsed thereon. (f) The Escrow Agent is authorized to, and shall: (1) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (2) Pay and charge Buyer for any escrow fees, charges, and costs payable when Buyer and City have fulfilled conditions.of this Escrow. (3) Do such other actions as necessary, including obtaining the policy of title insurance,to fulfill its obligations under this Agreement. 6. Delivery of Documents by Escrow Agent. Escrow Agent shall deliver a conformed copy of the Grant Deed and the City Deed of Trust, to Buyer after recordation thereof and Escrow Agent shall only deliver to Buyer one duplicate original of the documents submitted as duplicate originals. Escrow Agent shall deliver to the Seller one duplicate original of all of the items listed above on the Close of Escrow and a conformed copy of the Grant Deed, and the City Deed of Trust, after recordation thereof, Escrow Agent shall deliver to the Seller and the Buyer a conformed copy of the UCC1 Financing Statement showing the filing number. 7. Close of Escrow Costs. (a) City shall pay the cost of premiums for a Standard Title Insurance Policy for Buyer and no other escrow fees which may be charged by Escrow Agent in connection with the closing of this transaction. (b) Buyer shall pay all other costs, fees and charges relating to the conveyance of the Property from City to Buyer set forth in the Close of Escrow Statement approved by City and Buyer. 8. Tax Adjustment Procedure. Escrow Agent is authorized and is instructed to comply with the following: (a) Pay and charge City for any unpaid delinquent taxes and/or penalties and interest thereon, and for any delinquent or non-delinquent assessments or bonds against the Property; and (b) Pay and charge City for all taxes which will be due at the Close of Escrow and Escrow Agent shall prorate taxes consistent with the requirements of the Orange County Tax 11 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Collector's office. Real and personal property taxes and assessments for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty-five(365)day year on the basis that City is responsible for(i)all such taxes for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period(as defined below) and(ii)that portion of such taxes for the Current Tax Period to 12:00 a.m. on the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period"refers to the fiscal year of the applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Close of Escrow, then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. 9. Close of Escrow Statement. No later than three(3) business days prior to the date scheduled for the Close of Escrow,Escrow Agent shall prepare for approval by Buyer and City a closing statement("Close of Escrow Statement")on Escrow Agent's standard form indicating, among other things,Escrow Agent's estimate of all Close of Escrow costs and prorations made pursuant to this Agreement. Buyer and City shall assist Escrow Agent in determining the amount of all prorations. 10. All funds received in this escrow shall be deposited by the Escrow Agent in a general escrow account with any state or national bank doing business in the State of California and reasonably approved by Buyer and City, and may be combined in such with other escrow funds of the Escrow Agent. 11. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agent("General Instructions"). In the event of a conflict between this Agreement and any such General Instructions, this Agreement shall control, unless otherwise mutually agreed by the parties. The parties agree, however, that they will refuse to sign General Instructions which(1) purport to relieve the Escrow Agent of liability for negligence or intentional wrong-doing; (2)excuse the Escrow Agent from strict compliance with each and all of the provisions of this document and the General Instructions; or(3)purport to authorize the Escrow Agent to follow the instructions or directive of any person not a direct signatory party to this Agreement. Any amendment to the escrow instructions shall be in writing and signed by both City and Buyer. At the time of any amendment the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. 12. All communications from the Escrow Agent to City or Buyer shall be directed to the addresses set forth in this Agreement, and in the manner set forth in Section 603 of this Agreement for notices between the parties hereto. 13. In the event this Escrow terminates because of the non-satisfaction of any condition or the default of City or Buyer under this Agreement, the cancellation charges, if any, required to be paid by and to Escrow Agent and the Title Company shall be borne by the party 12 G:PDA2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 incurring the same, or in the event of termination due to default, the party in default. 14. Close of Escrow. If, for any reason,the Close of Escrow has not occurred by the date provided for in Section 302(3)and the Schedule of Performance, either Buyer or City may terminate this Agreement by providing written notice of termination to the other parties. Section 306: Broker's Fees Neither City nor Buyer shall be liable for any real estate commissions,brokerage fees or finders fees which may arise from this transaction. City and Buyer each represent to the other that it has employed no broker, agent, or finder in connection with this transaction. Buyer and City shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. Section 307: Representations and Warranties The representations and warranties set forth herein shall survive the Close of Escrow. 1. Representations and Warranties of Cit . City represents and warrants to Buyer as follows: (a) Authority. City has full right, power and lawful authority to grant, sell and convey the Property to Buyer as provided herein; and (b) Title. City, at the time of the execution of this Agreement, is seized of the Property in fee simple and is the lawful owner of and has good indefeasible title to the Property; and (c) Litigation. To the best of City's knowledge, after due inquiry of appropriate parties, there are no actions, suits,material claims, legal proceedings,or any other proceedings affecting the Property or any portion thereof, at law, or in equity before any court or governmental entity, domestic or foreign; and (d) Condition of Property. Except as disclosed on Exhibit 12 hereto, the Property is in good condition and without any known defects or malfunctions; and (e) FIRPTA. City is not a"foreign person"within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or that City has complied and will comply with all the requirements under FIRPTA or any similar state statute; and (f) No Conflict. City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound; and 13 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (g) Governmental Compliance. City has not received any notice from any governmental agency,entity or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation and environmental condition; and (h) No City Bankruptcy. City is not the subject of a bankruptcy proceeding. 2. Representations and Warranties of Buyer. Buyer represents and warrants to City as follows: (a) Authority. Buyer has full right, power, and lawful authority to purchase the Property as provided herein; and (b) No Conflict. Buyer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Buyer is a party or by which it is bound. 3. Ongoing Representations and Warranties. Until the Close of Escrow, City and Buyer shall, upon learning of any fact or condition which would cause any of the warranties and representations made by them in Sections 307(1)and 307(2), respectively, not to be true as of the Close of Escrow, immediately give written notice of such fact or condition to the other party. Such exception to a representation shall not be deemed a breach by such party hereunder, but shall constitute an exception which the other party shall have aright to approve or disapprove. If Buyer elects to close Escrow following disclosure of information that would have an effect on the value and/or operation of the Property, City's representations and warranties contained herein shall be deemed to have been made as of the Close of Escrow, subject to such exception(s). If, following the disclosure of such information,Buyer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 307 shall survive the Close of Escrow. Section 308: Risk of Loss or Damage Loss or damage to the Property, by fire or other casualty, occurring prior to the recordation of the Grant Deed shall be at the risk of City. In the event that loss or damage to the improvements on the Property, by fire or other casualty, occurs prior to the Close of Escrow, Buyer may elect to(i) require that City pay to Buyer the proceeds of any insurance which may become payable to City by reason thereof; or(ii)reduce the total price by an amount equal to the diminution in value of the Property by reason of such loss or damage or the amount of insurance payable to City, whichever is greater. Any insurance policies for fire or casualty are not to be transferred, and City will cancel its own policies after the Close of Escrow. 14 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Section 309: Surviving Obligations Notwithstanding the close of escrow, the terms of this Agreement continue in full force and effect. ARTICLE 4: DEVELOPMENT OF THE PROPERTY Section 401: Scope of Development The Property shall be developed in accordance with and within the limitations established in the Scope of Development, subject to the Government Approvals. It is anticipated that Buyer will contract for performance of specific activities. Such contracts shall not in any way diminish or waive Buyer's obligations under this Agreement. Section 402: City Cooperation Prior to conveyance of the Property by City, City shall cooperate with Buyer in applying for permits and obtaining Government Approvals required for the development of the Property. Section 403: Cost of Development of Property The cost of developing the Property shall be the sole responsibility of the Buyer. Section 404: Schedule of Performance 1. Subject to Force Majeure Delays, Buyer and City shall perform all acts respectively required of such party in this Agreement within the times provided in the Schedule of Performance. 2. Upon Effective Date, Buyer shall promptly begin and thereafter diligently prosecute to completion the Project in the Scope of Development. Subject to Force Ma_jeure Delays, Buyer shall begin and complete all development within the times specified in the Schedule of Performance, with such reasonable extensions of said times as may be granted by City. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing by Buyer and the City Administrator. 3. During periods of construction, Buyer shall submit to City a written report of the progress of the development when and as requested by City. The report shall be in such form and detail as may be reasonably required by City and shall include a reasonable number of construction photographs (if requested)taken since the last report by Buyer. Section 405: Local, State, and Federal Laws 1. Buyer hereby agrees to carry out development, construction(as defined by applicable law) and operation of the Project on the Property, including, without limitation, any and all public works (as defined by applicable law), in conformity with all applicable local, state and 15 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 federal laws, rules and regulations and all applicable federal and state labor laws(including, without limitation, any requirement to pay state prevailing wages). 2. Buyer shall be responsible for obtaining Government Approvals required by City for the Project, ensuring that the use of the Property for the purposes described in this Agreement complies with the zoning and other City land use regulations(including any applicable exemptions and/or exceptions)applicable to the Property. 3. This Agreement is not a"Development Agreement"as provided in Section 65864 et sec. of the California Government Code. Buyer shall comply with all applicable conditions of approval required by the City of Huntington Beach as part of the Government Approvals. Section 406: Insurance Buyer shall procure and maintain,during the term of this Agreement,at its sole cost and expense, until the date that City waives any such insurance requirement or requirements in writing, the following policies of insurance: 1. Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Buyer acknowledges awareness of Section 3700 et seq. of said code, which requires every employer to be insured against liability for workers' compensation. Buyer covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Property. To the extent Buyer directly employs personnel at the Project, Buyer shall maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Buyer shall require all contractors to provide such Workers' Compensation Insurance for all of the contractors' and subcontractors' employees. Buyer shall furnish City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Buyer shall similarly require all contractors and subcontractors to waive subrogation. 2. General Liability and Auto Insurance. Buyer shall carry general commercial liability insurance, including coverage for bodily injury, property damage, products/completed operations and blanket contractual liability in an amount not less than ONE MILLION DOLLARS ($1,000,000.00) per occurrence and TWO MILLION DOLLARS ($2,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to City Administrator. Such insurance shall name the City and its officers, agents, and employees acting in their official capacity, as additional insureds. Buyer shall require its insurer to waive its subrogation rights against City and shall provide certificates of insurance evidencing same. 3. Property Insurance. Buyer shall obtain and maintain in force, all-perils(to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Property, in an amount equal to the Property Purchase Price, less the amount of 16 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 any and all payments made by Buyer to City. The policy shall name City and its officers, agents and employees acting in their official capacity as additional insureds. 4. Certificate of Insurance; Additional Insured Endorsements. Prior to the Close of Escrow, Buyer shall furnish to City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty(30) days prior written notice to City. 5. If Buyer fails or refuses to procure or maintain insurance as required by this Agreement, City shall have the right, at City's election, and upon ten(10)days prior notice to Buyer, to procure and maintain such insurance. The premiums paid by City to maintain insurance for the Property shall be treated as a loan, due from Buyer,to be paid on the first day of the month following the date on which the premiums were paid. City shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). Section 407: Indemnification During the term of this Agreement, Buyer agrees to and shall protect, defend, indemnify and hold harmless City, its members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from.and against all liability, loss, damage,cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of(i) Buyer's failure to perform any obligations as and when required by this Agreement or any document referred to herein to which Buyer is a party, and (ii)the death of any person or any accident, injury loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Property and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, Buyer or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Buyer shall not be responsible for, and City shall protect, defend, hold harmless and indemnify Buyer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the sole negligence or willful misconduct of City or its members, officers, officials, employees, agents, representatives, servants, or contractors. Section 408: Disclaimer of Responsibility by the City Except as otherwise expressly provided in this Agreement, City neither undertakes nor assumes nor will have any responsibility, right or duty to Buyer or to any third party to review, inspect, supervise, pass judgment upon or inform Buyer or any third party of any matter in connection with the Property, whether with respect to the quality,adequacy or suitability.of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Buyer and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision,exercise of judgment or information supplied to Buyer or to any third party by City in connection with such matter is for 17 G:PDA-2009 drafts: Beach-Atranta00 PSA Draft 6a 2011-01-11 the public purpose of disclaimer, and neither Buyer(except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. Section 409: Rights of Access City shall have the right, at its sole risk and expense, to enter the Property or any part thereof at reasonable times and with as little interference as possible, for the purpose of inspecting the Property to determine Buyer's compliance with this Agreement. All The representatives of City entering the Property shall be identified in writing in advance by the City Administrator(or his or her designee). Any such entry shall be made only after reasonable notice to Buyer, and City shall indemnify and hold Buyer harmless from any claims or liabilities pertaining to such entry. Any damage or injury to the Property resulting from such entry shall be promptly repaired at the sole expense of the City. Buyer agrees to provide and maintain continuous Fire Department access, from the northerly end of the frontage road which is adjacent to the Huntington Breakers Apartments (the "Apartments") across the Site, and to a public street. In order to restrict the access to only Fire Department vehicles during construction, Buyer shall provide collapsible bollards, or other approved barrier, along the property line between the Apartments and the Site. Prior to commencement of any construction that would disrupt said access, Buyer shall submit a plan for Fire Department review and approval, depicting the proposed emergency route to be maintained during construction. Section 410: Taxes, Assessments, Encumbrances and Liens Subject to Buyer's right to claim any exemption to which it may be entitled under State law,Buyer shall be responsible for paying when due all real estate taxes and assessments, if any, assessed and levied on or against the Property or any portion thereof or interest therein. Without the prior written approval of City, Buyer shall not place, or allow to be placed, on the Property or any portion thereof or interest therein, any mortgage,trust deed, encumbrance(excluding easements not unreasonably interfering with the use of the Property) or lien(excluding mechanic's liens paid prior to foreclosure or liens for current year property taxes not paid) except the Permitted Transfers. Buyer shall remove, or shall have removed, any levy or attachment made on the Property(or any portion thereof or interest therein), or shall assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure. Nothing herein contained shall be deemed to prohibit Buyer from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Buyer in respect thereto. The covenants of Buyer set forth in this Agreement relating to the placement of any unauthorised mortgage, trust deed, encumbrance or lien, shall remain in effect until the final release and reconveyance of the City Deed of Trust. Section 411: Rights to Plans 1. All work product prepared pursuant to this Agreement, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to the Property are hereby assigned to City as security for Buyer's 18 G:PDA:2009 drafts` Beach-Atlanta00 PSA Draft 6a 2011-01-11 obligations hereunder. In the event that this Agreement is terminated by City, Buyer shall, within ten(10) days of such termination, transmit all such work product to City. 2. To effectuate the assignment described in paragraph(1), concurrently with executing this Agreement, Buyer shall execute and deliver to City an Assignment of Agreements (the"Assignment"), substantially in the form attached to this Agreement as Exhibit 13, granting .to City all of Buyer's rights to: (1)the Plans prepared pursuant to this Agreement; (2)the contracts between Buyer and its architect and between Buyer and its general contractor; (3)all permits relating to the Project; and all similar rights and property interests. Section 412: Hazardous Substances 1. To City's knowledge, and except as otherwise disclosed on Exhibit 12 hereto, there are not present on or about the Property any Hazardous Substances in quantities in violation of Governmental Requirements, and City has not received any written notice from any governmental authority concerning the removal of any Hazardous Materials from the Property, or concerning any restrictions on the use or development of the Property on account of the presence of any Hazardous Materials on the Property. 2. Lead-Based Paint and Asbestos Containing Materials. It is acknowledged by the Parties that neither City nor Buyer has any knowledge of the presence of lead-based paint or asbestos hazards on the Property. If such hazards are discovered during the course of the construction of the Improvements pursuant to this Agreement, Buyer shall prepare and submit to City a plan for the abatement of such hazards in compliance with all applicable Hazardous Materials Laws(as such term is defined in the Environmental Indemnity). Implementation of the plan must qualify the Property for a closure letter or similar clearance from the appropriate governmental entity having jurisdiction over the Property indicating that all lead-based paint and asbestos hazards have been fully abated to the satisfaction of such governmental entity. 3. Indemnification. Buyer, from and after the Close of Escrow shall indemnify, defend, and hold harmless City and its officers, employees,agents and representatives (collectively, the"Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law occurring after the Close of Escrow pertaining to (i)the storage of Hazardous Substances on the Property or(ii)contamination of the Property by a release of Hazardous Substances. As a condition precedent to the Close of Escrow, Buyer shall execute and deliver to the City an Environmental Indemnity, substantially in the form of Exhibit 10 to this Agreement. ARTICLE 5: DEFAULTS,REMEDIES AND TERMINATION Section 501: Defaults;Notice of Cure; Cure Rights 1. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, 19 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. 2. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided.in this Agreement,any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 3. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default shall have a period of ten(10) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. 4. If a non-monetary event of default occurs, prior to exercising any remedies hereunder,the injured party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty(30) days, the party in default shall have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured within thirty(30) days, and the party in default(i) initiates corrective action within said period, and(ii)diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party. If Buyer fails to take corrective action or cure the default within such reasonable time,City shall give Buyer notice thereof. In no event shall the City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety(90)days after the first notice of default is given. Section 502: Institution of Legal Actions Subject to the notice and cure provisions of Section 501 and the limited recourse provisions of Section 507, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California. Section 503: Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 20 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Section 504: Acceptance of Service of Process 1. In the event that any legal action is commenced by City against Buyer, service of process on Buyer shall be made by personal service upon Buyer(or upon an officer of Buyer) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law. 2. In the event that any legal action is commenced by Buyer against City, service of process on City shall be made by personal service upon the City Administrator or the City Clerk or in such other manner as may be provided by law. Section 505: Rights and Remedies Are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Agreement,the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it,at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 506: Specific Performance If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 501,the non-defaulting party, at its option,may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. Section 507:Limited Recourse Obligations (Each obligation of Buyer under this Agreement is a nonrecourse obligation of Buyer and its partners. Except as provided otherwise in this Agreement,neither Buyer nor any of its general or limited partners, nor any other party, shall have any personal liability for payment of obligations to City. The sole recourse of City shall be the exercise of its rights against the Property and the Project and any related security for the Buyer Note. Notwithstanding the foregoing, City may obtain a judgment or order(including, without limitation, an injunction)requiring Buyer or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Note; may proceed against any person or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and may recover directly from Buyer or any other party: I. Any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee(acting within the scope of his or her employment) of Buyer or of any general partners; 21 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 2. Any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances; and 3. All court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. Section 508: Buyer's Remedies. Subject to any applicable cure periods and the right to notice provided for in this Agreement, upon a default or breach of this Agreement by City, Buyer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Close of Escrow, may terminate this Agreement. Buyer cannot sue for monetary damages and hereby fully and finally releases City from any claims for monetary damages arising directly or indirectly from City's breach of its obligations under this Agreement. Section 509: Attorney's Fees Except as otherwise expressly provided in this Agreement, in the event that any action, suit or other proceeding is brought to enforce the obligations of any party under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. ARTICLE 6: GENERAL PROVISIONS Section 601: Buyer's Warranties. Buyer represents and warrants(1)that it has access to professional advice and support to the extent necessary to enable Buyer to fully comply with the terms of this Agreement; (2)that it and its general partners are duly organized, validly existing and in good standing under the laws of the State of California; (3)that it has the full power and authority to undertake the Project and to execute this Agreement; (4)that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of Buyer; (5) except as disclosed to the City in writing,there are no actions or proceedings pending or, to the best of the Buyer's knowledge, threatened against the Buyer or Buyer's general partners before any court or administrative City in any way connected with the Property or the Project which could adversely affect the Buyer's ability to perform the activities contemplated hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which the Buyer or a general partner of Buyer is a party or which affects the Project or any part thereof; (7)the Buyer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice; lapse of time, or both,would constitute or result in any such default under this Agreement; and (8)neither the Buyer nor its general partners has not entered into any agreements which will adversely affect the title to the Project or the Buyer's right to develop and use the Project as provided in this Agreement, and neither the 22 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-1 l Buyer nor its general partners will not enter into any such agreements after the Effective Date hereof. Section 602: City's Warranties City represents and warrants(1)that it has access to professional advice and support to the extent necessary to enable City to fully comply with the terms of this Agreement; (2)that it is duly organized, validly existing and in good standing under the laws of the State of California; (3)that it has the full power and authority to execute this Agreement; (4)that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of City; (5)except as disclosed to Buyer in writing,there are no actions or proceedings pending or,to the best of City's knowledge, threatened against City or City's officers before any court or administrative City in any way connected with the Property or the Project which could adversely affect City's ability to perform its obligations hereunder; (6)neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which City or an officer of City is a party or which affects the Project or any part thereof; (7) City is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which; after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and(8)neither City nor its officers have entered into any agreements which will adversely affect the title to the Project or Buyer's right to.develop and use the Project as provided in this Agreement, and neither City nor its officers will enter into any such agreements after the Effective Date hereof. Section 603: Notices Demands and Communications between the Parties Formal notices, demands, and communications between City and Buyer shall be sufficiently given if: (i)personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or(iii) dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses set forth below: If to Buyer: Beach Promenade LLC 21190 Beach Boulevard Huntington Beach, CA 92648 Attn: Bijan Sassounian With a copy to: Dennis G. Harkavy, Esq. 23901 Calabasas Road, Suite 2003 Calabasas, CA 91302 If to City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator 23 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-0 1-11 With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(i)receipt of refusal to accept delivery, or(ii) noon on the second business day following deposit in the United States mail. Section 604: Conflicts of Interest 1. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his personal interests ors 'e interests of any corporation, partnership or association in which he is,'directly or indirectly,'interested. 2. Buyer warrants that it has not paid or given,and will not pay or give,any third party any money or other consideration for obtaining this Agreement. Section 605: Nonliability of City Officials and Employees No member, official, employee or consultant of City shall be personally liable to Buyer, or any successor in interest, in the event of any default or breach by City or for any amount that may become due to Buyer or to its successor, or on any obligations under the terms of this Agreement. Section 606: Extension of Times of Performance I. In addition to the specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default as a result of a Force Majeure Delay. An extension of time for a Force Majeure Delay shall be limited to the period of such delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen(15) days of the commencement of the cause. In the event of such delay,the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. 2. Times of performance under this Agreement may also be extended by mutual written agreement by City and Buyer. In addition, the City Administrator shall have the authority on behalf of City to approve extensions of time to the Schedule of Performance not to exceed a cumulative total of one(1) year. Section 607: Assurances to Act in Good Faith. Buyer and City agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to 24 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 accomplish the acquisition and development of the Property in accordance with the provisions hereof. Section 608: Interpretation The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. Section 609: Severability If any provision of this Agreement shall be adjudged invalid, illegal or unenforceable by a court of competent jurisdiction,the remaining provisions of this Agreement shall not be affected thereby, but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, and the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 610: No Third Party Beneficiaries This Agreement is made solely and specifically between City and Buyer and their respective successors and assigns; and, except as expressly provided otherwise in this Agreement, no other person.will have any rights, interest or claims under this Agreement or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise. Section 611: City Approvals and Actions The City Administrator shall have the authority to approve non-substantive.changes and amendments to this Agreement as may be approved by the City Attorney and to take such other and further action, and execute documents or other agreements as may be necessary to effect the terms of this Agreement. Such amendment may require the review and approval by the City Council as needed to comply with applicable law and internal policies and procedures. Section 612: Titles and Captions Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. Section 613: Gender and Number. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 25 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 ARTICLE 7: ENTIRE AGREEMENT,WAIVERS AND AMENDMENTS 1. This Agreement consists of pages and one (1) signature page and (__)Exhibits which constitute the entire understanding and agreement of the parties.This Agreement shall be executed in three duplicate originals each of which is deemed to be an original. This Agreement and its attached Exhibits shall constitute the entire understanding and agreement of the parties. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all(or any part of or any interest in)the Property. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings,representations,and statements, oral or written. 3. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Buyer, and all amendments hereto must be in writing and signed by the appropriate authorities of the parties to be bound thereby. The waiver by City or Buyer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. 4. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute one agreement binding on City and Buyer. The signature page of this Agreement may be detached from and added to any counterpart of this Agreement identical in form. ARTICLE 8: EFFECTIVE DATE OF AGREEMENT This Agreement does not take effect until executed by City. [SIGNATURES APPEAR ON NEXT PAGE-1. 26 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 IN WITNESS WHEREOF,the parties hereto have entered into this Agreement as of the Effective Date. "BUYER" "CITY' BEACH PROMENADE LLC, CITY OF H TINGTON B , a A California limit pany munici oration o e State of Ca- orn' B . (circ a one airman resident/vice President yor By. rk Its: (ci'cle one)Secretary Chief Financial Officer/ OVED AS TO FORM: Asst.Secretary/Treasurer City Attorney INITIATED AND APPROVED: Director of Econorm velopment REVIE APPROVED: R City&Ai istrator 27 G:PDA2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Exhibit A SHEET 10F 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH,COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS;SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-58.0, NORTH 89°37'06"EAST,89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09°50'39"WEST, 133.85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9*1025",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89037'06"WEST,88.00 FEET TO THE EAST LINE,OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00040114"EAST,818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 09-50'39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. v LANU SUS U2 F O � - EXP. 12-31-11 � it JOSEPH G.DERLETH sr L.S. 7340 PLS 7340, EXPIRES 12/31/11 9rF 0fi eA��4oc� Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE ®�� iff CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94-590 (N89'37'06"E) _ ATLANTA AVE_ 305 50 PARCEL 2, PM 84-590,-----� 8, 202/48-50 PM 1 W'LY LINE SEC 13� I T6S, R11 W, SBM I V) + I <m I I i J,!1.6 c7 na m ' 1 m r- �-110, 1 z 0 ' I ( )= RECORD PER PARCEL MAP m I 8 84-590, FILED IN BOOK 202, I PAGES 48 THROUGH 50 PARCEL 2, PM 84-590, ------I- INCLUSIVE OF PARCEL MAPS 202/48-50 PM I I ®=PORTION OF STATE HIGHWAY --11fl' I RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF Z I PARCEL 1, STATE HIGHWAY MAP o I BOOK 5, PAGES 45 AND 46. o f I 90,340 SQ FT, (2.07 ACRES) I 6`?'8 P' I o j + I C I I EXHIBIT PARCEL 2, PM 84-590,---{- 202/48-50 PM 8�-_1 6``'8 '" SHEET 1 OF 3 I , I $ GRAPHIC SCALE ------- — —— //�. � 1 1 inch =150 ft.. I N'LY LINE 150 1 0 75 150 ' I PARCEL 1 I PM 84-590 I 202/48-50 PM I ( IN FEET ) i EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS t ATLANTA AVE GRAPHIC SCALE _ (N89'37'06"E) �22' I inch =50 ft. NW'LY COR SEC 13 so o is 50i T6S, R11 W, SBM PER PM 84-590 0 r ( IN FEET ) 0 ( } = RECORD PER PARCEL MAP I -> 84-590, FILED IN BOOK 202, (- PAGES 48 THROUGH 50 N E'LY LINE, PARCEL 1 INCLUSIVE OF PARCEL MAPS. oo PER STATE MAP BOOK. 5, PAGES 41 {( )) = PD RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK °'- 5, PAGES 45 AND 46. $ 22 �i6 �= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A EXHIBIT S PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. 8 SHEET 2 OF 3 1 � U LINE TABLE: L1= N89'37'06"E, 89.21' j L2= N00'40'14"W, 730.41' I PARCEL 2, r` 7p PM 84-59Ct 0, m 0 202/48-50 PM� a C?Q W'LY LINE SEC 1.3 1 0 z T6S, R11 W, SBM W 1 o NE COR PARCEL m C o POINT OF Q t° 1, PM 84-590, BEGINNING, SE 202j48-50 PM Z® COR PARCEL 2, 8'00 +� m a PM 84-590, �,, 202/48-50 PM OD 8' (88.00') (54.91') L1 I N'LY LINE PARCEL 1� PM 84-590 (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA •�� FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS T- GRAPHIC SCALE 1 inch =50 ft. N'LY LINE SEC 13 50 0 25 W T6S; R11 W, S.B.M. ATLANTA AVE { IN FEE (N89'37'06"E) _ NW'LY COR SEC 13 30° T6S; R11 W, SBM 50' 50' y PER PM 84-590 L3 ( ) = RECORD PER PARCEL MAP 44/4!0 ? j 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 8' �22- PARCEL 2, o PM 84-590, 202/48-50 PM , o ®= PORTION OF STATE HIGHWAY o 41 RELINQUISHMENT NUMBER ( o EXHIBIT 632, RECORDED 2/26/68, IN o SHEET 3 OF 3 8526/461 O.R., ALSO BEING P- o A PORTION OF PARCEL 1, ffi STATE HIGHWAY MAP BOOK - 5, PAGES 45 AND 46. I 00 ` 90 LINE TABLE: L3= S89'37'06"W, 88.00' C W'LY LINE SEC 13 E'LY LINE, PARCEL 1 00 Z T6S, R11 W, SBM PER STATE HWY MAP [TI m o , BOOK 5, PAGES 41 D o I PARCEL 2, AND 42. m -m .P PM 84-590, 202/48-50 PM I M W o L22' z ® � � I EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS E'LY LINE OF THE W'LY 489.55'OF THE N.W. I/4 o S $ FRAC.SEC. 13-6-II. 4� a S a8 ag I � :. - - - x ouw•u•w laasr. _ a u nnlmu•w loa�or . 3 50.W/ ITSOP' _•J)A00' — _ _ — u — — — — — - — — — -$_ — x ovw•r�w ur.er•— — 8 PCL 2 e PM 44/40 `O x OOTT'N W ii0.00' Ie00' IO.00 I - HW10'11'W 200,00' N0010'11'W$ c I I .$ I _ x owwu ao— W _ w.00• PARCEL J PARCEL 2 J� PCL I I- $ PCL 3 ,� 8 vemi �$ PARCEL 7 $`^N o010'11•w PM 15/18 I- PM 15/27 $ / I I12091506 O.R. 11209/506 0 R.= wm' 1.69 ACRES ti 0. 44 40 @ n 6 �;', 0.91 ACRES o + INSTRUMENT NO. ry °� #h 0.28 ACRES 019 ACRES •- W .$ _ x avla W Ico.ro• 0.16 ACRES 82-008039 O.R. - $e8 7.42. 1se.ex' 2,27 ACRES n a n I •" H avaa•sr w Imao• -Ig., _ _ a x oDr- 1741 ,w a.ro' 9_ x oolarl x%Is•'- I x Dula 14-PCL 10.31Pm RESH ew2T'N w ITem' - PARCEL 21I2091506 O,R. j $ .OA3 ACRES 's� PARCEL 3 p PCL 4'• - - PM 15/18 a 11209/506 O.R. / 0.50 ACRES N OW14'W Q7..ee' / 000.W H 0010'tl' S39.5e 109'O9']5' NJtl10'le'W 59I56' �+ CLY LINE OF 7985/557 O.R. a aa41 b. ` — _ _ _ _ _ _ _ xoww'�.• _ _ ex.ie• _ _ _ _ — _ _ _ _ — �Gl� PCL 2 PM 84-59060 ACRES $ ioTi.eo' m Y ' w 3 — BEACH BWO.— — — — — n onwTw Isle.ar — — — — — gq 8 BIOS SAO '11-9-f1 �35'.7VN3'b/I MN 3H1 30 83N800'M'N Q� b fL .�.p.� g�W A SOC& wu w� �w90W8SOCIATES wwM xe WWWixxViiw''' PROMEMME BEACH BOWEYAW&ARAM AVEMIE 1 8 - - xwminmofJrau 7 EXHIBIT 3 METHOD OF FINANCING This Method of Financing is attached to the Purchase Agreement and Escrow Instructions (the"Purchase Agreement")between the City of Huntington Beach("City") and Beach Promenade LLC, a California corporation ("Buyer"), relating to Buyer's acquisition from City of real property to be consolidated and reconfigured with adjacent parcels. Any capitalized term not otherwise defined herein shall have the meaning ascribed to it in the Purchase Agreement. Pursuant to the Purchase Agreement, Buyer agrees to purchase the Property from City for the Property Purchase Price of One Million,Two Hundred Thousand Dollars($1,200,000.00). Buyer's purchase of the Property will be financed by a Buyer Note for the amount of the Property Purchase Price. l. Definitions. The following capitalized terms shall mean as follows and in the event of a conflict between the definitions in this Method of Financing and the definitions in the other.City Loan Documents, the definitions in this Method of Financing shall control: The term "Buyer Documents"shall mean the Purchase Agreement, the Buyer Note,the City Deed of Trust and the UCC 1 Financing Statement. The term"Buyer Note"shall the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust. The term "City Deed of Trust"shall mean one or more Deeds of Trust with Assignment of Rents substantially in the form attached as Exhibit No. "T'to the Purchase Agreement, in which Buyer is the Trustor and City is the Beneficiary,which secures the Buyer Note. The term "Property Purchase Price" shall mean the purchase price for the Property in the amount of One Million, Two Hundred Thousand Dollars($1,200,000.00)to be paid by Buyer to City. The term "Environmental Indemnity" shall mean the indemnity by Buyer, substantially in the form attached to the Purchase Agreement as Exhibit 10. 2. Buyer Note. In accordance with and subject to the terms and conditions of the Purchase Agreement.. the Buyer Note and this Method of Financing,the City and Buyer agree that: (a) Once acquired by Buyer,the Property will be consolidated with Buyer's other parcels and re-parcelized into Parcels 1, 2, 3, 4 and 5 by recordation of a Parcel Map in substantial conformance with Exhibit "15." t G PDA:2009Drafts.Beach-Atlanta03_Method of Financing Draft 7a 2011 01_l 1 (b) The Buyer Note shall be secured by the City Deed of Trust recorded on Parcels 2 and 4. 3. Recordation. Upon the Close of Escrow,the Title Company shall record the Parcel Map and the Buyer Documents in accordance with instructions contained in the Purchase Agreement(as such instructions may be jointly amended by the City and the Buyer) and shall be prepared to issue to the City and Buyer a policy of title insurance, insuring the priority of the City Deeds of Trust in amounts and with endorsements as the City may reasonably require. 4. Repayment. The repayment terms of the Buyer Note shall be as follows,and as set forth in the Schedule of Performance attached to the Purchase Agreement as Exhibit 4: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent (7%) per annum commencing upon the Close of Escrow, not to exceed Three Thousand Five Hundred Dollars ($3,500.00)per annum. (c) On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deposit sufficient funds with the Escrow Agent to fund the Close of Escrow (the"Initial Deposit"). Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to City the sum of Fifty-three Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments") of which Fifty Thousand Dollars ($50,000.00) will be applied to the principal amount outstanding. (d) Buyer shall pay City Three Hundred Fifty Thousand Dollars($350,000.00) within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four(4)years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00) within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map,or within six (6)years of the Close of Escrow, whichever occurs first. (f) Buyer shall pay City Three Hundred Thousand Dollars($300,000)within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight(8)years of the Close of Escrow, whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten(10) years from the Close of Escrow. (h) All sums paid by Buyer to City are nonrefundable. 2 G:PDA:2009Drafts:Beach-Atlanta03_Method of Financing Draft 7a 201.1 01_1 1 I EXHIBIT 4 SCHEDULE OF PERFORMANCE ACTION ITEM TIME FOR PERFORMANCE 1. Opening of Escrow. Within 180 days of City approval of the Agreement. 2. Deposits into Escrow. The Buyer and City shall make deposits into escrow as provided for in the Agreement. 3. Close of Escrow; Recordation of Grant When all conditions to close Escrow Deed, Parcel Map, and City Deed of Trust. have been fulfilled. 4. Buyer makes additional payments to Upon each anniversary of Close of City of$50,000.00, plus interest in the Escrow until Property Purchase Price amount of 7%of the unpaid balance of the paid in full. Entire Property Purchase Property Purchase Price, interest payment Price to be paid in full no later than not to exceed $3,500.00 per year. 10 years from Close of Escrow. 5. Commencement of construction of Within 2 years of recordation of the building on Parcel I of the.Parcel Map. Parcel Map. 6. Completion of construction of building No later than 2 years following on Parcel 1 of the Parcel Map. commencement of construction of building upon Parcel 1. 7. Buyer's initial payment (of Within 120 days after issuance of $350,000.00) to City towards balance of Certificate of Occupancy for building Property Purchase Price. upon Parcel 1, but no later than 4 years after Close of Escrow. 8. Commencement of construction of Within 4 years of recordation of the second building on Parcel 2 or 4 of the Parcel Map. Parcel Map, whichever is second. 9. Completion of construction of.second Within 2 years following building on Parcel 2 or 4 of the Parcel commencement of construction of Map, whichever is second. second building on Parcel 2 or 4 of the Parcel Map, whichever is second. 1 G-PDA:2009drafts: Beach-Atlanta04 Schedule Of Performance Draft 4a 201 1-01-11 10. Buyer's second payment(of Within 120 days of issuance of $300,000.00)to City towards balance of Certificate of Occupancy for building Property Purchase Price. on the second commercial pad site, but no later than 6 years after Close of Escrow. 11. Release and partial reconveyance of Within 10 days following Buyer's City Deed of Trust recorded on second second payment of$300,000.00 to commercial pad site. City towards balance of Property Purchase Price. 12. Commencement of construction of No later than six years from third building on Parcel 2 or 4 of the Parcel recordation of the Parcel Map. Map,whichever is third. 13. Completion of construction of third No later than eight years from building on Parcel 2 or 4 of the Parcel recordation of the Parcel Map. Map, whichever is third. 14. Buyer's third payment (of Within 120 days of issuance of $300,000.00) to City towards remaining Certificate of Occupancy for building balance of Property Purchase Price. on the third commercial pad site,but no later than 8 years after Close of Escrow. 15. Release and Full Reconveyance of Within 30 days of Buyer's payment City Deed of Trust. of the full Property Purchase Price and any interest. NOTES: It is understood that this Schedule of Performance is subject to all of the terms and conditions of the Agreement. The summary of the items in this Schedule of Performance is not intended to supersede or modify the more complete description in the Agreement; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the text of the Agreement shall govern. The time period set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Buyer and City. The City Administrator of City shall have the authority to approve on behalf of City reasonable extensions of time for performance of the actions set forth above, not to exceed a cumulative total of one year. Any other requests for extensions of time shall require the review and approval of the City Council of City as needed to comply with applicable law and internal policies and procedures of City. 2 G-PDA_2009draft& Beach-Atlanta04 Schedule Of Performance Draft 4a 2011-01-11 EXHIBIT 5 SCOPE OF DEVELOPMENT The Project consists of Buyer's acquisition from the City of an existing frontage road consisting of a total of approximately 90,387 square feet, located adjacent to Beach Boulevard at Atlanta Avenue(the"Property"). The Property is to be consolidated with the Median and a portion of the existing shopping center Site owned by Buyer located on the east and west boundaries of the Property, and resubdivided by the recordation of a Parcel Map in order to create legal parcels for the development and construction of three additional new retail building pads consisting of a total of approximately 28,326 square feet and associated private and public Improvements to the Site, as further described in the Agreement, in conformity with the applicable local and state laws,rules and regulations. In addition,the Project will provide for improved ingress and egress, access and parking for the existing parcels and buildings within the shopping center Site. G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta05_Scope of Development.doc ri ACKNOWLEDGMENT State of California County of Orange On April 3, 2013 before me, Kathleen Nelson, Notary Public, personally appeared Bob Mall who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. KATHLEEN NELSON Commission*1991094 WITNESS my hand and official seal. Notary Public-California Orange County M Comm.Ett Tres Sag 23.2016 Signature (Seal) BENEFICIARY'S DEMAND Long Beach,California March 26,2013 ESCROW INSTRUCTIONS TO: Farmers&Merchants Bank ESCROW#1005691-LV We hand you herewith the following document: ® Substitution of Trustee and Partial Reconveyance affecting that certain trust deed recorded on April 7,2011,as Instrument No.20 1 1-000 1 76680,Official Records of Orange County. You are authorized to use all of the above described documents and deliver them to the persons entitled thereto when you hold for payment to the undersigned the principal sum of$350,000.00,with accrued interest of$3,500.00. THE C F HU ON BEACH By: Its: 1'T Y >M�IJAAE', Bv: Its: APPROVED AS TO FORM JENNIFER MCGUTH,City Attorney �X By Paul D'Alcsos>Jo Aseiatent City Attorney o INSTRUCTION FOR DISBURSEMENT OF PROCEEDS To: Farmers and Merchants Bank of Long Beach Re: Escrow No. 1005691-LV Escrow Holder is hereby authorized and instructed to disburse the proceeds due the undersigned at the close of escrow as follows: By check payable to the undersigned Hold check for pick up Mail check ^` By wire transfer—wire instructions are as follows: Bank Name LA nivyl �Qn� Routing Number(ABA) IQ — Account Number 7 0 I For Credit of(name) i Un+In C Address of beneficiary 2l10 4 �o7c� as al,�� BY payable check a able to Address Deposit to F&M Bank account number Name of account holder Address THE C F HUNTIN TON BEACH By: Its: By: Its: City of Huntington Beach e DEPARTMENT OF ECONOMIC DEVELOPMENT 0 ` LETTER OF TRANSMITTAL Date: April 4,2013 To: Farmers & Merchants Dank of song Beach ® We are sending you: ® By Mail ❑ By Fax (pages inc. this sheet): ❑ We are hand delivering: ❑ Prints ❑ Plans ❑ Copy of letter ❑Change Order ® Other: Sub of Trustee and Partial Reconveyance .On'anal Description Item# g. , 1 1 Substitution of Trustee and Partial Reconveyance(Escrow No. 1005691-LV) 2 1 Beneficiary's Demand 3 1 Instructions for Disbursement of Proceeds 4 5 These are transmitted as checked below: ❑ For approval ❑ Approved as submitted ❑ Resubmit copies for approval ❑ For your use ❑ Approved as noted ❑ Submit copies for distribution ® As requested ❑ Returned for corrections ❑ Return corrected prints ❑ For review/comment ❑ Other: c: File By: LuZ z—R a erty Agent—(714) 536-5544 PURCHASE AGREEMENT By And Among THE CITY OF HUNTINGTON BEACH, a municipal corporation, and BEACH PROMENADE LLC, a California Limited Liability Company LIST OF EXHIBITS EXHIBIT NO. 1 - LEGAL DESCRIPTION EXHIBIT NO. 2 - SITE MAP EXHIBIT NO. 3 - METHOD OF FINANCING EXHIBIT NO. 4 - SCHEDULE OF PERFORMANCE EXHIBIT NO. 5 - SCOPE OF DEVELOPMENT EXHIBIT NO. 6 - RESERVED EXHIBIT NO. 7 - GRANT DEED EXHIBIT NO. 8 - BUYER NOTE EXHIBIT NO. 9 - CITY DEED OF TRUST EXHIBIT NO. 10 - ENVIRONMENTAL INDEMNITY EXHIBIT NO. 11 - UCC 1 FINANCING STATEMENT EXHIBIT NO. 12 CONDITION OF PROPERTY (§307.1) EXHIBIT NO. 13 ASSIGNMENT OF AGREEMENTS (§411.2) EXHIBIT NO. 14 FIRPTA CERTIFICATE (§305(3)(c) EXHIBIT NO. 15 PARCEL MAP ii AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND SALE OF REAL PROPERTY ("Purchase Agreement") is entered into,4ECEivB�-;q 06 , V/0 (the"Effective Date") by and between THE CITY OF HUNTINGTON BEACH, a California municipal corporation, ("City") and BEACH PROMENADE LLC, a California limited liability company("Buyer"). City and Buyer(collectively, the"Parties") hereby agree as follows: RECITALS A. CITY is the owner of a 2.07-acre parcel located at the southeast corner of Beach Boulevard and Atlanta Avenue in Huntington Beach, California, commonly referred to as the Frontage Road, and more particularly described in the legal description attached hereto as Exhibit 1 and incorporated by this reference as though fully set forth herein (the "Property"). B. Buyer owns five parcels of land totaling 3.79 acres within the Beach Promenade Shopping Center adjacent to the Property(the "Site"). The Site is depicted in the map attached hereto as Exhibit 2, and incorporated by this reference as though fully set forth herein. Buyer also owns a strip of land located between Beach Boulevard and the Property(the "Median"). The Median is also depicted on Exhibit 2. Buyer desires to acquire the Property incorporate it within a reconfiguration of the Site consistent with the goals and objectives of the City's General Plan. City desires to convey fee simple absolute title in the Property to Buyer in accordance with this Agreement. The purpose of this agreement is to promote the reconfiguration of the Site by providing for the conveyance of the Property to Buyer;the City's financing of Buyer's acquisition of the Property in the amount of One Million Two Hundred Thousand Dollars ($1,200,000.00) (the "Property Purchase Price"), as evidenced by the Buyer Note and secured by the City Deed of Trust; consolidation and reconfiguration of the Property,the Median and the Site to create new retail pads and buildings; installation of improvements to the public street adjacent to the Site, and other improvements to the infrastructure, landscaping and parking within the reconfigured Site. NOW, THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,the Parties agree as follows: ARTICLE 1: DEFINITIONS For purposes of this Agreement, the following capitalized terms shall have the following meanings: The term "Buyer" shall mean BEACH PROMENADE LLC, a California limited liability company, whose address is 21190 Beach Boulevard, Huntington Beach, CA 92648, and any permitted assignee or nominee. 1 G:PDA2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 The term `Buyer Documents" shall mean this Agreement, the Buyer Note, the City Deed of Trust, and the UCCI Financing Statement. The term`Buyer Note" shall mean the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust, substantially in the form attached hereto as Exhibit 8, and incorporated by this reference as though fully set forth herein. The term "City" shall mean the City of Huntington Beach, a California municipal corporation, having its offices at 2000 Main Street, Huntington Beach, CA 92648, and any assignee of, or successor to,the rights,powers, and responsibilities of City. The term "City Administrator" shall mean the individual duly appointed to the position of City Administrator of City. Subject to the terms of Sections 404, 504 and 606,whenever an administrative action is required by City to implement the terms of this Agreement,the City Administrator shall have authority to act on behalf of City, except with respect to matters reserved under California law wholly for determination by the City's governing body. The term "City Deed of Trust" shall mean the Deed of Trust with Assignment of Rents substantially in the form attached hereto as Exhibit 9, and incorporated by this reference as though fully set forth herein, in which Buyer is the Trustor and City is the Beneficiary, which secures the Buyer Note. The term "Close of]Escrow" shall mean the date that all Conditions for Escrow have been fulfilled. The term "Days" shall mean calendar days and the statement of any time period herein shall be calendar days and not working days,unless otherwise specified. The term"Effective Date" shall mean the date the City Council of the City of Huntington Beach approves this Agreement and authorizes its execution; which date shall be inserted into the preamble of this Agreement. The term "Environmental Indemnity" shall mean the indemnity by Buyer, substantially in the form attached hereto as Exhibit 10, and incorporated by this reference as though fully set forth herein. The term "Escrow" shall mean that certain escrow opened with First American Title Insurance Company, the Escrow Agent, established for the conveyance of the Property from City to Buyer and other actions that the Escrow Agent may be authorized to perform pursuant to the terms of this Agreement. The term "Escrow Agent" shall mean First American Title Insurance Company.. The term "Force Majeure"or"Force 1VMajeure Event" shall mean the following events, provided that they actually delay and interfere with the timely performance of the matter to 2 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Preliminary Title Report, the Conditions of Property, and review and investigate the physical and environmental condition of the Property and any other factors or matters relevant to Buyer's decision to purchase the Property(collectively, the"Buyer's Due Diligence"). If the Property is not acceptable for any reason whatsoever, Buyer shall have the right, by giving written notice to City on or before the last day of the Approval Period, to terminate this Agreement. If Buyer does not deliver written notice terminating this Agreement to City on or before the last day of the Approval Period, Buyer shall be deemed to have approved the Property and this Agreement shall continue in full force and effect. Section 304: Conditions to Close of Escrow 1. City's Conditions to Close of Escrow. City, at its election, shall not be obligated to close escrow if(i) Buyer is in material default of this Agreement; (ii) any of Buyer's representations and warranties contained herein shall be proven materially untrue; (iii)Buyer shall not have deposited Buyer's share of costs described in Section 305(7)herein with Escrow Agent; or(iv) Buyer shall not have deposited with Escrow Agent any document reasonably required of it by Escrow Agent to close the Escrow. 2. Buyer's Conditions to Close of Escrow. Buyer, at its election, shall not be obligated to close escrow if: (i) City is in material default of this Agreement; (ii) any of City's representations and warranties contained herein shall be proven materially untrue; (iii) if, after review of a preliminary title report issued by Title Company(as hereinafter defined) (the"Title Report"), Buyer determines that the condition of title is not as represented herein by City, or First American Title Insurance Company("Title Company"), upon payment of its regularly scheduled premium, has not agreed to issue a Standard Title Insurance Policy ("Title Policy") for the Property upon the Close of Escrow, in the amount of the Property Purchase Price showing title to the Property vested of record in the name of Buyer in fee simple subject only to such exceptions as approved by Buyer in writing; (iv)Buyer does not approve the condition of the Property after performing Buyer's Due Diligence(as hereinafter defined); (v) City has not executed and delivered to Escrow the Grant Deed, or any other document reasonably required of it by Escrow Agent to close escrow, or(vi) all Government Approvals required for development of the Project in substantial conformance with the Scope of Development have not been obtained, including the expiration of any legal challenge period for any of the Government Approvals 3. Termination. In the event each of the conditions set forth in Section 304(2) is not fulfilled within the time provided in Section 302(3) or waived in writing by Buyer prior to the date scheduled for the Close of Escrow, Buyer may, at its option,terminate this Agreement and the Escrow opened hereunder,thereby releasing the parties from further obligations hereunder, and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer and all deposit documents delivered by City to Buyer or Escrow Agent returned to City shall be returned to Buyer. In the event that each of the conditions set forth in Section 304(1) are not fulfilled or waived in writing by City prior to the date scheduled for the Close of Escrow, City may, at its option, terminate this Agreement and the Escrow opened hereunder,thereby releasing the parties from further obligations hereunder, and all documents delivered by City to Buyer or Escrow Agent shall be returned immediately to City and all documents delivered by Buyer to City or Escrow Agent shall be returned to Buyer. No demand for termination shall be recognized until 8 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 10 days after the Escrow Agent(or the party making such demand) shall have mailed copies of such demand to the other party or parties at the addresses set forth in Article I of this Agreement and in the manner set forth in Section 703 of this Agreement for notices between the parties hereto. Objections, if any, shall be raised by written notice to the Escrow Agent and to the other party within the 10-day period, in which event the Escrow Agent is authorized to hold all money, papers, and documents with respect to the escrow until instructed by a mutual agreement of the parties or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made,the escrow shall be closed as soon as possible. Section 305: Escrow 1. Opening of Escrow. City and Buyer agree to open an escrow with the Escrow Agent for City's conveyance to Buyer of title to the Property. This Section 305 shall constitute the joint escrow instructions of City and Buyer, and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. The Escrow Agent to whom these instructions are delivered is hereby authorized and instructed to act under this Agreement. The Parties hereto agree to use commercially reasonable best efforts to do all acts necessary to close this Escrow in the shortest possible time. City and Buyer shall provide such additional escrow instructions consistent with this Agreement as shall be necessary. The Escrow Agent hereby is empowered to act under such instructions, and upon indicating its acceptance thereof in writing, delivered to City and Buyer within five (5) days after opening of the escrow, the Escrow Agent shall carry out its duties as Escrow Agent hereunder. 2. Escrow Agent Authorization. The Escrow Agent is authorized to, and shall: (a) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (b) Pay and charge Buyer for any escrow fees, charges, and costs payable under this Agreement; (c) Disburse funds, deliver, and record the Grant Deed when Buyer and City have fulfilled conditions of this Escrow; and (d) Do such other actions as necessary, including obtaining the policy of title insurance, to fulfill its obligations under this Agreement. 3. Close of Escrow Obligations of City. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow(unless indicated otherwise), City shall deliver to Escrow Agent (unless indicated to be delivered directly to Buyer)the following documents and other items: (a) The Grant Deed duly executed and acknowledged(where appropriate)by City; (b) The City Deed of Trust duly executed and acknowledged by City; 9 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (c) A certification ("FIRPTA Certificate") duly executed by each party comprising City under penalty of perjury in substantially the form of Exhibit 14, setting forth City's addresses and social security numbers, and certifying that none of the parties comprising City is a"foreign person"for purposes of Section 1445 (as may be amended) of the Internal Revenue Code of 1986, as amended, and any regulation promulgated thereunder and City is a resident taxpayer in the State of California for purposes of Revenue and Taxation Code Sections 18805 and 26131. (d) Two (2) duplicate original copies of the Close of Escrow Statement duly executed by City; (e) Any other documents, instruments, funds and records required to be delivered to Buyer under the terms of this Agreement which have not been previously delivered or are otherwise required by Escrow Agent or title Company in order to close Escrow. 4. Close of Escrow Obligations of Buyer. On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deliver to Escrow Agent copies of the following documents and other items: (a) One (1) original of the City Deed of Trust duly executed by Buyer; (b) One (1) original of the Buyer Note duly executed by Buyer; (c) Two (2) duplicate original,copies of the Environmental Indemnity Agreement, duly executed by Buyer; (d) Two (2)duplicate original copies of the Close of Escrow Statement duly executed by Buyer; (e) Evidence of the existence, organization and authority of Buyer and of the authority of persons executing documents on behalf of Buyer reasonably satisfactory to the Escrow Agent and the Title Company; and (f) Any other documents, instruments or funds required to be delivered by Buyer under the terms of this Agreement or are otherwise required by Escrow Agent or Title Company in order to close Escrow which have not previously been delivered. 5. Procedure. Escrow Agent shall close Escrow for the Property as follows: (a) Record the Grant Deed, the Parcel Map, and the City Deed of Trust with the Recorder of Orange County, California; (b) Forward all Deposits paid by Buyer to City reduced by appropriate charges against City hereunder; 10 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (c) Deliver the FIRPTA Certificates to Buyer; (d) Instruct the Title Company to deliver the Title Policy to Buyer; (e) Forward to both Buyer and City a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date endorsed thereon. (f) The Escrow Agent is authorized to, and shall: (1) Pay and charge City for any amount necessary to place title in the condition necessary to satisfy this Agreement; (2) Pay and charge Buyer for any escrow fees, charges, and costs payable when Buyer and City have fulfilled conditions of this Escrow. (3) Do such other actions as necessary, including obtaining the policy of title insurance, to fulfill its obligations under this Agreement. 6. Delivery of Documents by Escrow AjZent. Escrow Agent shall deliver a conformed copy of the Grant Deed and the City Deed of Trust, to Buyer after recordation thereof and Escrow Agent shall only deliver to Buyer one duplicate original of the documents submitted as duplicate originals. Escrow Agent shall deliver to the Seller one duplicate original of all of the items listed above on the Close of Escrow and a conformed copy of the Grant Deed, and the City Deed of Trust, after recordation thereof Escrow Agent shall deliver to the Seller and the Buyer a conformed copy of the UCC1 Financing Statement showing the filing number. 7. Close of Escrow Costs. (a) City shall pay the cost of premiums for a Standard Title Insurance Policy for Buyer and no other escrow fees which may be charged by Escrow Agent in connection with the closing of this transaction. (b) Buyer shall pay all other costs, fees and charges relating to the conveyance of the Property from City to Buyer set forth in the Close of Escrow Statement approved by City and Buyer. 8. Tax Adjustment Procedure. Escrow Agent is authorized and is instructed to comply with the following: (a) Pay and charge City for any unpaid delinquent taxes and/or penalties and interest thereon, and for any delinquent or non-delinquent assessments or bonds against the Property; and (b) Pay and charge City for all taxes which will be due at the Close of Escrow and Escrow Agent shall prorate taxes consistent with the requirements of the Orange County Tax 11 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Collector's office. Real and personal property taxes and assessments for the Property shall be prorated by the parties to the Close of Escrow on the basis of a three hundred sixty-five(365) day year on the basis that City is responsible for(i) all such taxes for the fiscal year of the applicable taxing authority occurring prior to the Current Tax Period (as defined below) and (ii)that portion of such taxes for the Current Tax Period to 12:00 a.m. on the Close of Escrow, whether or not the same shall be payable prior to the Close of Escrow. The phrase "Current Tax Period"refers to the fiscal year of the applicable taxing authority in which the Close of Escrow occurs. All tax prorations shall be based upon the latest available tax statement. If the tax statements for the fiscal tax year during which Escrow closes do not become available until after the Close of Escrow,then the rates and assessed values of the previous year, with known changes, shall be used, and the parties shall re-prorate said taxes outside of Escrow following the Close of Escrow when such tax statements become available. 9. Close of Escrow Statement. No later than three (3) business days prior to the date scheduled for the Close of Escrow, Escrow Agent shall prepare for approval by Buyer and City a closing statement("Close of Escrow Statement") on Escrow Agent's standard form indicating, among other things, Escrow Agent's estimate of all Close of Escrow costs and prorations made pursuant to this Agreement. Buyer and City shall assist Escrow Agent in determining the amount of all prorations. 10. All funds received in this escrow shall be deposited by the Escrow Agent in a general escrow account with any state or national bank doing business in the State of California and reasonably approved by Buyer and City, and may be combined in such with other escrow funds of the Escrow Agent. 11. The parties understand they may be required to execute additional standard form escrow instructions required by the Escrow Agent("General Instructions"). In the event of a conflict between this Agreement and any such General Instructions,this Agreement shall control, unless otherwise mutually agreed by the parties. The parties agree, however,that they will refuse to sign General Instructions which (1)purport to relieve the Escrow Agent of liability for negligence or intentional wrong-doing; (2)excuse the Escrow Agent from strict compliance with each and all of the provisions of this document and the General Instructions; or(3)purport to authorize the Escrow Agent to follow the instructions or directive of any person not a direct signatory party to this Agreement. Any amendment to the escrow instructions shall be in writing and signed by both City and Buyer. At the time of any amendment the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. 12. All communications from the Escrow Agent to City or Buyer shall be directed to the addresses set forth in this Agreement, and in the manner set forth in Section 603 of this Agreement for notices between the parties hereto. 13. In the event this Escrow terminates because of the non-satisfaction of any condition or the default of City or Buyer under this Agreement, the cancellation charges, if any, required to be paid by and to Escrow Agent and the Title Company shall be borne by the party 12 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 incurring the same, or in the event of termination due to default, the party in default. 14. Close of Escrow. If, for any reason,the Close of Escrow has not occurred by the date provided for in Section 302(3) and the Schedule of Performance, either Buyer or City may terminate this Agreement by providing written notice of termination to the other parties. Section 306: Broker's Fees Neither City nor Buyer shall be liable for any real estate commissions, brokerage fees or finders fees which may arise from this transaction. City and Buyer each represent to the other that it has employed no broker, agent, or finder in connection with this transaction. Buyer and City shall each indemnify, defend, and hold harmless the other from any claims or damages for payment of any real estate commissions or broker's fees or finder's fees arising out of the acts or representations of the other with respect to any of the transactions contemplated by this Agreement. Section 307: Representations and Warranties The representations and warranties set forth herein shall survive the Close of Escrow. 1. Representations and Warranties of City. City represents and warrants to Buyer as follows: (a) Authority. City has full right, power and lawful authority to grant, sell and convey the Property to Buyer as provided herein; and (b) Title. City, at the time of the execution of this Agreement, is seized of the Property in fee simple and is the lawful owner of and has good indefeasible title to the Property; and (c) Litigation. To the best of City's knowledge, after due inquiry of appropriate parties, there are no actions, suits, material claims, legal proceedings, or any other proceedings affecting the Property or any portion thereof, at law, or in equity before any court or governmental entity, domestic or foreign; and (d) Condition of Property. Except as disclosed on Exhibit 12 hereto, the Property is in good condition and without any known defects or malfunctions; and (e) FIRPTA. City is not a"foreign person"within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or that City has complied and will comply with all the requirements under FIRPTA or any similar state statute; and (f) No Conflict. City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound; and 13 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 (g) Governmental Compliance. City has not received any notice from any governmental agency, entity or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation and environmental condition; and (h) No City Bankruptcy. City is not the subject of a bankruptcy proceeding. 2. Representations and Warranties of Buyer. Buyer represents and warrants to City as follows: (a) Authority. Buyer has full right, power, and lawful authority to purchase the Property as provided herein; and (b) No Conflict. Buyer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Buyer is a party or by which it is bound. 3. Ongoing Representations and Warranties. Until the Close of Escrow, City and Buyer shall, upon learning of any fact or condition which would cause any of the warranties and representations made by them in Sections 307(1) and 307(2), respectively, not to be true as of the Close of Escrow, immediately give written notice of such fact or condition to the other party. Such exception to a representation shall not be deemed a breach by such party hereunder, but shall constitute an exception which the other party shall have a right to approve or disapprove. If Buyer elects to close Escrow following disclosure of information that would have an effect on the value and/or operation of the Property, City's representations and warranties contained herein shall be deemed to have been made as of the Close of Escrow, subject to such exception(s). If, following the disclosure of such information, Buyer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 307 shall survive the Close of Escrow. Section 308: Risk of Loss or Damage Loss or damage to the Property, by fire or other casualty, occurring prior to the recordation of the Grant Deed shall be at the risk of City. In the event that loss or damage to the improvements on the Property, by fire or other casualty, occurs prior to the Close of Escrow, Buyer may elect to (i)require that City pay to Buyer the proceeds of any insurance which may become payable to City by reason thereof, or(ii) reduce the total price by an amount equal to the diminution in value of the Property by reason of such loss or damage or the amount of insurance payable to City, whichever is greater. Any insurance policies for fire or casualty are not to be transferred, and City will cancel its own policies after the Close of Escrow. 14 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Section 309: Surviving Obligations Notwithstanding the close of escrow, the terms of this Agreement continue in full force and effect. ARTICLE 4: DEVELOPMENT OF THE PROPERTY Section 401: Scope of Development The Property shall be developed in accordance with and within the limitations established in the Scope of Development, subject to the Government Approvals. It is anticipated that Buyer will contract for performance of specific activities. Such contracts shall not in any way diminish or waive Buyer's obligations under this Agreement. Section 402: City Cooperation Prior to conveyance of the Property by City, City shall cooperate with Buyer in applying for permits and obtaining Government Approvals required for the development of the Property. Section 403: Cost of Development of Property The cost of developing the Property shall be the sole responsibility of the Buyer. Section 404: Schedule of Performance 1. Subject to Force Majeure Delays, Buyer and City shall perform all acts respectively required of such party in this Agreement within the times provided in the Schedule of Performance. 2. Upon Effective Date, Buyer shall promptly begin and thereafter diligently prosecute to completion the Project in the Scope of Development. Subject to Force Majeure Delays, Buyer shall begin and complete all development within the times specified in the Schedule of Performance, with such reasonable extensions of said times as may be granted by City. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing by Buyer and the City Administrator. 3. During periods of construction, Buyer shall submit to City a written report of the progress of the development when and as requested by City. The report shall be in such form and detail as may be reasonably required by City and shall include a reasonable number of construction photographs (if requested)taken since the last report by Buyer. Section 405: Local, State, and Federal Laws 1. Buyer hereby agrees to carry out development, construction(as defined by applicable law)and operation of the Project on the Property, including,without limitation, any and all public works(as defined by applicable law), in conformity with all applicable local, state and 15 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 federal laws, rules and regulations and all applicable federal and state labor laws (including, without limitation, any requirement to pay state prevailing wages). 2. Buyer shall be responsible for obtaining Government Approvals required by City for the Project, ensuring that the use of the Property for the purposes described in this Agreement complies with the zoning and other City land use regulations (including any applicable exemptions and/or exceptions) applicable to the Property. 3. This Agreement is not a"Development Agreement"as provided in Section 65864 et sec of the California Government Code. Buyer shall comply with all applicable conditions of approval required by the City of Huntington Beach as part of the Government Approvals. Section 406: Insurance Buyer shall procure and maintain, during the term of this Agreement, at its sole cost and expense, until the date that City waives any such insurance requirement or requirements in writing,the following policies of insurance: I. Workers' Compensation Insurance. Pursuant to California Labor Code Section 1861, Buyer acknowledges awareness of Section 3700 et seq. of said code,which requires every employer to be insured against liability for workers' compensation. Buyer covenants that it will comply with such laws and provisions prior to commencing any work of construction or rehabilitation on the Property. To the extent Buyer directly employs personnel at the Project, Buyer shall maintain such Workers' Compensation Insurance in an amount not less than the statutory requirements in California for bodily injury and disease and must maintain employer's liability coverage in an amount not less than ONE MILLION DOLLARS ($1,000,000.00). Buyer shall require all contractors to provide such Workers' Compensation Insurance for all of the contractors' and subcontractors' employees. Buyer shall furnish City with a certificate of waiver of subrogation under the terms of the Workers' Compensation Insurance and Buyer shall similarly require all contractors and subcontractors to waive subrogation. 2. General Liability and Auto Insurance. Buyer shall carry general commercial liability insurance, including coverage for bodily injury,property damage, products/completed operations and blanket contractual liability in an amount not less than ONE MILLION DOLLARS ($1,000,000.00)per occurrence and TWO MILLION DOLLARS ($2,000,000.00) annual aggregate, combined single limit for bodily injury and property damage. All such insurance shall be provided by insurance companies admitted in California, or if not admitted in California, then reasonably acceptable to City Administrator. Such insurance shall name the City and its officers, agents, and employees acting in their official capacity, as additional insureds. Buyer shall require its insurer to waive its subrogation rights against City and shall provide certificates of insurance evidencing same. 3. Property Insurance. Buyer shall obtain and maintain in force, all-perils (to include fire and vandalism protection) property insurance with extended coverage endorsements thereon, on the Property, in an amount equal to the Property Purchase Price, less the amount of 16 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 any and all payments made by Buyer to City. The policy shall name City and its officers, agents and employees acting in their official capacity as additional insureds. 4. Certificate of Insurance; Additional Insured Endorsements. Prior to the Close of Escrow, Buyer shall furnish to City certificates of insurance and additional insured endorsements evidencing the foregoing insurance coverages as required by this Agreement. Such certificates and endorsements shall be subject to the reasonable approval of the City Attorney and shall provide the name and policy number of each carrier and policy and shall state that the policy is currently in force and shall promise to provide that such policies will not be cancelled without thirty(30) days prior written notice to City. 5. If Buyer fails or refuses to procure or maintain insurance as required by this Agreement, City shall have the right, at City's election, and upon ten(10) days prior notice to Buyer,to procure and maintain such insurance. The premiums paid by City to maintain insurance for the Property shall be treated as a loan, due from Buyer, to be paid on the first day of the month following the date on which the premiums were paid. City shall give prompt notice of the payment of such premiums, stating the amounts paid and the name of the insured(s). Section 407: Indemnification During the term of this Agreement, Buyer agrees to and shall protect, defend, indemnify and hold harmless City, its members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against all liability, loss, damage, cost or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of(i) Buyer's failure to perform any obligations as and when required by this Agreement or any document referred to herein to which Buyer is a party, and(ii)the death of any person or any accident, injury loss, or damage whatsoever caused to any person or to the property of any person which shall occur on the Property and which shall be directly or indirectly caused by the acts of, or any errors or omissions of, Buyer or its officers, shareholders, directors, members, agents, servants, employees, contractors, or invitees. Buyer shall not be responsible for, and City shall protect, defend, hold harmless and indemnify Buyer against any liability, loss, damage, cost, or expense (including reasonable attorney's fees and court costs) arising from or as a result of the sole negligence or willful misconduct of City or its members, officers, officials, employees, agents, representatives, servants, or contractors. Section 408: Disclaimer of Responsibility by the City Except as otherwise expressly provided in this Agreement, City neither undertakes nor assumes nor will have any responsibility, right or duty to Buyer or to any third party to review, inspect, supervise, pass judgment upon or inform Buyer or any third party of any matter in connection with the Property, whether with respect to the quality, adequacy or suitability of the plans, any labor, service, equipment or material furnished to the Project, any person furnishing the same or otherwise. Buyer and all third parties shall rely upon its or their own judgment regarding such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Buyer or to any third party by City in connection with such matter is for 17 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 the public purpose of disclaimer, and neither Buyer(except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. Section 409: Rights of Access City shall have the right, at its sole risk and expense,to enter the Property or any part thereof at reasonable times and with as little interference as possible, for the purpose of inspecting the Property to determine Buyer's compliance with this Agreement. All The representatives of City entering the Property shall be identified in writing in advance by the City Administrator(or his or her designee). Any such entry shall be made only after reasonable notice to Buyer, and City shall indemnify and hold Buyer harmless from any claims or liabilities pertaining to such entry. Any damage or injury to the Property resulting from such entry shall be promptly repaired at the sole expense of the City. Buyer agrees to provide and maintain continuous Fire Department access, from the northerly end of the frontage road which is adjacent to the Huntington Breakers Apartments (the "Apartments") across the Site, and to a public street. In order to restrict the access to only Fire Department vehicles during construction, Buyer shall provide collapsible bollards, or other approved barrier, along the property line between the Apartments and the Site. Prior to commencement of any construction that would disrupt said access, Buyer shall submit a plan for Fire Department review and approval, depicting the proposed emergency route to be maintained during construction. Section 410: Taxes, Assessments, Encumbrances and Liens Subject to Buyer's right to claim any exemption to which it may be entitled under State law, Buyer shall be responsible for paying when due all real estate taxes and assessments, if any, assessed and levied on or against the Property or any portion thereof or interest therein. Without the prior written approval of City, Buyer shall not place, or allow to be placed, on the Property or any portion thereof or interest therein, any mortgage,trust deed, encumbrance (excluding easements not unreasonably interfering with the use of the Property) or lien (excluding mechanic's liens paid prior to foreclosure or liens for current year property taxes not paid) except the Permitted Transfers. Buyer shall remove, or shall have removed, any levy or attachment made on the Property(or any portion thereof or interest therein),.or shall assure the satisfaction thereof within a reasonable time but in any event prior to foreclosure. Nothing herein contained shall be deemed to prohibit Buyer from contesting the validity or amount of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Buyer in respect thereto. The covenants of Buyer set forth in this Agreement relating to the placement of any unauthorized mortgage,trust deed, encumbrance or lien, shall remain in effect until the final release and reconveyance of the City Deed of Trust. Section 411: Rights to Plans 1. All work product prepared pursuant to this Agreement, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to the Property are hereby assigned to City as security for Buyer's 18 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 201 1-01-11 obligations hereunder. In the event that this Agreement is terminated by City, Buyer shall, within ten (10) days of such termination,transmit all such work product to City. 2. To effectuate the assignment described in paragraph(1), concurrently with executing this Agreement, Buyer shall execute and deliver to City an Assignment of Agreements (the "Assignment"), substantially in the form attached to this Agreement as Exhibit 13, granting to City all of Buyer's rights to: (1)the Plans prepared pursuant to this Agreement; (2)the contracts between Buyer and its architect and between Buyer and its general contractor; (3) all permits relating to the Project; and all similar rights and property interests. Section 412: Hazardous Substances 1. To City's knowledge, and except as otherwise disclosed on Exhibit 12 hereto, there are not present on or about the Property any Hazardous Substances in quantities in violation of Governmental Requirements, and City has not received any written notice from any governmental authority concerning the removal of any Hazardous Materials from the Property, or concerning any restrictions on the use or development of the Property on account of the presence of any Hazardous Materials on the Property. 2. Lead-Based Paint and Asbestos Containing_Materials. It is acknowledged by the Parties that neither City nor Buyer has any knowledge of the presence of lead-based paint or asbestos hazards on the Property. If such hazards are discovered during the course of the construction of the Improvements pursuant to this Agreement, Buyer shall prepare and submit to City a plan for the abatement of such hazards in compliance with all applicable Hazardous Materials Laws(as such term is defined in the Environmental Indemnity). Implementation of the plan must qualify the Property for a closure letter or similar clearance from the appropriate governmental entity having jurisdiction over the Property indicating that all lead-based paint and asbestos hazards have been fully abated to the satisfaction of such governmental entity. 3. Indemnification. Buyer, from and after the Close of Escrow shall indemnify, defend, and hold harmless City and its officers, employees, agents and representatives (collectively, the"Indemnified Parties") from and against any and all liabilities (including penalties, fines and monetary sanctions) arising from a violation of state or federal law occurring after the Close of Escrow pertaining to (i)the storage of Hazardous Substances on the Property or(ii) contamination of the Property by a release of Hazardous Substances. As a condition precedent to the Close of Escrow, Buyer shall execute and deliver to the City an Environmental Indemnity, substantially in the form of Exhibit 10 to this Agreement. ARTICLE 5: DEFAULTS,REMEDIES AND TERMINATION Section 501: Defaults;Notice of Cure; Cure Rights 1. Subject to Force Majeure Delay, as such term is defined in this Agreement, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who fails or delays must immediately commence to cure, 19 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 correct or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence. 2. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. Except as otherwise expressly provided in this Agreement,any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 3. If a monetary event of default occurs, prior to exercising any remedies hereunder, the injured party shall give the party in default written notice of such default. The party in default shall have a period of ten(10) days after such notice is given within which to cure the default prior to exercise of remedies by the injured party. 4. If a non-monetary event of default occurs, prior to exercising any remedies hereunder,the injured party shall give the party in default notice of such default. If the default is reasonably capable of being cured within thirty (30)days,the party in default shall have such period to effect a cure prior to exercise of remedies by the injured party. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the party in default(i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then the party in default shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the injured party. If Buyer fails to take corrective action or cure the default within such reasonable time, City shall give Buyer notice thereof. In no event shall the City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety(90) days after the first notice of default is given. Section 502: Institution of Legal Actions Subject to the notice and cure provisions of Section 501 and the limited recourse provisions of Section 507, in addition to any other rights or remedies (and except as otherwise provided in this Agreement), either party may institute legal action to cure, correct or remedy any default, to recover damages for any default,or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in any other appropriate court of that county, or in the United States District Court for the Central District of California. Section 503: Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 20 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Section 504: Acceptance of Service of Process 1. In the event that any legal action is commenced by City against Buyer, service of process on Buyer shall be made by personal service upon Buyer(or upon an officer of Buyer) and shall be valid whether made within or without the State of California, or in such manner as may be provided by law. 2. In the event that any legal action is commenced by Buyer against City, service of process on City shall be made by personal service upon the City Administrator or the City Clerk or in such other manner as may be provided by law. Section 505: Rijzhts and Remedies Are Cumulative Except with respect to rights and remedies expressly declared to be exclusive in this Agreement,the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 506: Specific Performance If either party defaults with regard to any of the provisions of this Agreement, subject to the notice and cure provisions of Section 501,the non-defaulting party, at its option, may, after such notice and opportunity to cure (but not before) commence an action for specific performance of the terms of this Agreement pertaining to such default. Section 507: Limited Recourse Obligations Each obligation of Buyer under this Agreement is a nonrecourse obligation of Buyer and its partners. Except as provided otherwise in this Agreement, neither Buyer nor any of its general or limited partners, nor any other party, shall have any personal liability for payment of obligations to City. The sole recourse of City shall be the exercise of its rights against the Property and the Project and any related security for the Buyer Note. Notwithstanding the foregoing, City may obtain a judgment or order(including,without limitation, an injunction)requiring Buyer or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Note; may proceed against any person or entity whatsoever with respect to the enforcement of any guarantees, surety bonds, letters of credit, reimbursement agreements or similar rights to payment or performance; and may recover directly from Buyer or any other party: I. Any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee(acting within the scope of his or her employment) of Buyer or of any general partners; 21 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 2. Any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances; and 3. All court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. Section 508: Buyer's Remedies. Subject to any applicable cure periods and the right to notice provided for in this Agreement, upon a default or breach of this Agreement by City, Buyer may bring an action for specific performance of this Agreement or any term or provision hereof, or, if prior to the Close of Escrow, may terminate this Agreement. Buyer cannot sue for monetary damages and hereby fully and finally releases City from any claims for monetary damages arising directly or indirectly from City's breach of its obligations under this Agreement. Section 509: Attorney's Fees Except as otherwise expressly provided in this Agreement, in the event that any action, suit or other proceeding is brought to enforce the obligations of any party under this Agreement, each party shall bear its own costs and expenses of suit, including attorneys' fees, expert witness fees and all costs incurred in each and every such action, suit or other proceeding, including any and all appeals or petitions therefrom. ARTICLE 6: GENERAL PROVISIONS Section 601: Buyer's Warranties. Buyer represents and warrants(1)that it has access to professional advice and support to the extent necessary to enable Buyer to fully comply with the terms of this Agreement; (2)that it and its general partners are duly organized, validly existing and in good standing under the laws of the State of California; (3)that it has the full power and authority to undertake the Project and to execute this Agreement; (4)that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of Buyer; (5) except as disclosed to the City in writing,there are no actions or proceedings pending or,to the best of the Buyer's knowledge,threatened against the Buyer or Buyer's general partners before any court or administrative City in any way connected with the Property or the Project which could adversely affect the Buyer's ability to perform the activities contemplated hereunder; (6)neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which the Buyer or a general partner of Buyer is a party or which affects the Project or any part thereof; (7)the Buyer is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8) neither the Buyer nor its general partners has not entered into any agreements which will adversely affect the title to the Project or the Buyer's right to develop and use the Project as provided in this Agreement, and neither the 22 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 Buyer nor its general partners will not enter into any such agreements after the Effective Date hereof. Section 602: City's Warranties City represents and warrants (1)that it has access to professional advice and support to the extent necessary to enable City to fully comply with the terms of this Agreement; (2)that it is duly organized, validly existing and in good standing under the laws of the State of California; (3)that it has the full power and authority to execute this Agreement; (4)that the persons executing and delivering this Agreement are authorized to execute and deliver such documents on behalf of City; (5) except as disclosed to Buyer in writing,there are no actions or proceedings pending or,to the best of City's knowledge, threatened against City or City's officers before any court or administrative City in any way connected with the Property or the Project which could adversely affect City's ability to perform its obligations hereunder; (6) neither this Agreement nor anything provided to be done hereunder violates or shall violate any contract, agreement or instrument to which City or an officer of City is a party or which affects the Project or any part thereof, (7) City is not in default in respect of any of its obligations or liabilities pertaining to this Agreement, nor is there any state of facts or circumstances or conditions or events which, after notice, lapse of time, or both, would constitute or result in any such default under this Agreement; and (8)neither City nor its officers have entered into any agreements which will adversely affect the title to the Project or Buyer's right to develop and use the Project as provided in this Agreement, and neither City nor its officers will enter into any such agreements after the Effective Date hereof. Section 603:Notices, Demands and Communications between the Parties Formal notices, demands, and communications between City and Buyer shall be sufficiently given if. (i)personally delivered; (ii) delivered by same day or overnight courier (acknowledged by receipt showing date and time of delivery); or (iii) dispatched by registered or certified mail,postage prepaid, return receipt requested,to the addresses set forth below: If to Buyer: Beach Promenade LLC 21190 Beach Boulevard Huntington Beach, CA 92648 Attn: Bijan Sassounian With a copy to: Dennis G. Harkavy, Esq. 23901 Calabasas Road, Suite 2003 Calabasas, CA 91302 If to City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator 23 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 With a copy to: City Attorney's Office City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Notices personally delivered or delivered by courier shall be effective upon receipt or refusal to accept delivery. Mailed notices shall be effective on the earlier of(i)receipt of refusal to accept delivery, or(ii) noon on the second business day following deposit in the United States mail. Section 604: Conflicts of Interest 1. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation,partnership or association in which he is, directly or indirectly, interested. 2. Buyer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Section 605: Nonliability of City Officials and Employ No member, official, employee or consultant of City shall be personally liable to Buyer, or any successor in interest, in the event of any default or breach by City or for any amount that may become due to Buyer or to its successor, or on any obligations under the terms of this Agreement. Section 606: Extension of Times of Performance 1. In addition to the specific provisions of this Agreement,performance by either party hereunder shall not be deemed to be in default as a result of a Force Majeure Delay. An extension of time for a Force Majeure Delay shall be limited to the period of such delay, and shall commence to run from the time of the commencement of the cause, provided notice by the party claiming such extension is sent to the other party within fifteen (15) days of the commencement of the cause. In the event of such delay,the party delayed shall continue to exercise reasonable diligence to minimize the period of delay. 2. Times of performance under this Agreement may also be extended by mutual written agreement by City and Buyer. In addition,the City Administrator shall have the authority on behalf of City to approve extensions of time to the Schedule of Performance not to exceed a cumulative total of one(1)year. Section 607: Assurances to Act in Good Faith. Buyer and City agree to execute all documents and instruments and to take all action, including timely depositing funds as required hereby, and shall use their respective best efforts to 24 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 accomplish the acquisition and development of the Property in accordance with the provisions hereof. Section 608: Interpretation The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against any party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. Section 609: Severability If any provision of this Agreement shall be adjudged invalid, illegal or unenforceable by a court of competent jurisdiction,the remaining provisions of this Agreement shall not be affected thereby, but this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been contained herein, and the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 610: No Third Party Beneficiaries This Agreement is made solely and specifically between City and Buyer and their respective successors and assigns; and, except as expressly provided otherwise in this Agreement, no other person will have any rights, interest or claims under this Agreement or be entitled to any benefits under or on account of this Agreement as a third party beneficiary or otherwise. Section 611: City Approvals and Actions The City Administrator shall have the authority to approve non-substantive changes and amendments to this Agreement as may be approved by the City Attorney and to take such other and further action, and execute documents or other agreements as may be necessary to effect the terms of this Agreement. Such amendment may require the review and approval by the City Council as needed to comply with applicable law and internal policies and procedures. Section 612: Titles and Captions Titles and captions are for convenience only and shall not be construed to limit or extend the meaning of this Agreement. Section 613: Gender and Number. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. 25 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 ARTICLE 7: ENTIRE AGREEMENT,WAIVERS AND AMENDMENTS 1. This Agreement consists of (_) pages and one (1) signature page and (__) Exhibits which constitute the entire understanding and agreement of the parties. This Agreement shall be executed in three duplicate originals each of which is deemed to be an original. This Agreement and its attached Exhibits shall constitute the entire understanding and agreement of the parties. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to all (or any part of or any interest in)the Property. This Agreement and all documents incorporated herein contain the entire understanding among the parties hereto relating to the transactions contemplated herein and all prior or contemporaneous agreements, understandings, representations, and statements,oral or written. 3. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Buyer, and all amendments hereto must be in writing and signed by the appropriate authorities of the parties to be bound thereby. The waiver by City or Buyer of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. 4. This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall be an original,but all of which together shall constitute one agreement binding on City and Buyer. The signature page of this Agreement may be detached from and added to any counterpart of this Agreement identical in form. ARTICLE 8: EFFECTIVE DATE OF AGREEMENT This Agreement does not take effect until executed by City. [SIGNATURES APPEAR ON NEXT PAGE] 26 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 IN WITNESS WHEREOF,the parties hereto have entered into this Agreement as of the Effective Date. "BUYER" "CITY" BEACH PROMENADE LLC, CITY OF H TINGTON B , a A California limited�liab' ' pany munici oration o e State of Ca ' orn' B . (circ e one airman resident/Vice President ayor '� AND By: r` / rk Its: (ci cle one)Secretary Chief Financial Officer/ OVED AS TO FORM: Asst.Secretary/Treasurer �1 City Attorney INITIATED AND APPROVED: Director of Economi velopment REV*-4tD APPROVED: City d i lstrator 27 G:PDA:2009 drafts: Beach-Atlanta00 PSA Draft 6a 2011-01-11 } ek/1) Exhibit SHEET 1 OF 1 4 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH,COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING I A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRuARY r 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF E SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89°37'06" EAST, 89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39"WEST, 133,85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 991025",AN ARC DISTANCE OF 160.11 FEET; f 4 THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89°37'06"WEST,88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2, OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14"EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 09°5u39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). b SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. ��o LANO SAP EXP. 12-31-11 JOSEPH G. DERLETH s� L.S. 7340 PLS 7340, EXPIRES 12/31/11 9rF of CALt4�e Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE s CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i E NW'LY COR SEC 13 WILY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94—590 (N89'37'06"E) _ _ ATLANTA AVET— 30' S — _— 5� -- -- I i - --- - PARCEL 2, PM 84-590,----- —L 202/48-50 PM { iI 8 S k ) 8j. 44/40% W'LY LINE SEC 13 T6S, R11 W, SBM I � I � G m 1 I D I it;el 6 P:M m= } mr— 10' I I z p RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, I PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,--- -� INCLUSIVE OF PARCEL MAPS 202/48-50 PM I ==PORTION OF STATE HIGHWAY I RELINQUISHMENT NUMBER 632, �—`110, I RECORDED 2/26/68, IN 8526/461 z I SO BEING A PORTION OF PARCEL L 1, STATE HIGHWAY MAP Q I BOOK 5, PAGES 45 AND 46. C I 90,340 SQ FT, (2.07 ACRES) _ I 0 I EXHIBITB PARCEL 2, PM 84-590,----I-- `,: 202/48-50 PM g'--I SHEET 1 OF 3 I ' I a GRAPHIC SCALE -------�— ——— —— I N'LY LINE 55D l o zs tI ' I PARCEL 1 I PM 84-590 202/48-50 PM ( IN FEET ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA ®�J FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS a ; f ATLANTA AVE GRAPHIC SCALE (N89-37'06"E) �22' 1 inch =50 Tt N W'LY COR SEC 13 50 o zs so V)T6S, R11 W, SBM o 8} PER PM 84-590 0 IN FEET ) ( ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, N E'LY LINE, PARCEL 1 PAGES 48 THROUGH 50 v PER STATE HWY MAP INCLUSIVE OF PARCEL MAPS. w BOOK 5, PAGES 41 {{ )} = RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK °7- 5, PAGES 45 AND 46. ------88' 22' 0 6: �= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN B526/461 O.R., ALSO BEING A EXHIBIT B PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. ul`"'iEET 2 OF 3 g � E 1 LINE TABLE: L1= N89'37'06"E, 89.21' 4 J L2= N00'40'14"W, 730.41' I C PARCEL 2, N PM 84-590, < 202/48-50 PM o -< n C) o f---W'LY LINE SEC 13 rti �o M X to T6S, R11 W, SBM l di � 03 � i 0 Q NE COR PARCEL M POINT OF 1, PM 84-590, BEGINNING, SE 202/48-50 PM COR PARCEL 2, 8' W Il'i o ! PM 84-590, � �, 202/48-50 PM OD 8' (54.91') L1 N'LY LINE PARCEL 11 PM 84-590 (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS t 1 i GRAPHIC SCALE I I inch =50 ft. N'LY LINE SEC 13 50 0 25 50 T6S, R11 W, S.B.M. ATLANTA AVE IN FEET } (N89'37'06"E) (S�NVLY COR SEC 13 30, T6S, R11 W, SBM 50' 50' I PER PM 84-590 L3 ( ) = RECORD PER PARCEL MAP 4 " =' 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 8' 22' PARCEL 2, o PM 84-590, o ; ' 202/48-50 PM ' o = PORTION OF STATE HIGHWAY o {' ������ RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN o v SHEET 3 OF 3 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, Fli STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. I 00 90 LINE TABLE: Cli L3= S8937'06"W, 88.00' C W'LY LINE SEC 13 I E'LY LINE, PARCEL 1 z T6S, R11W, SBM PER STATE HWY MAP m o i BOOK 5, PAGES 41 '< o I PARCEL 2, AND 42, nn,,,l .p PM 84-590, Z 202/48-50 PM W L22' TTI I—' o bo 2 of EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA LA, FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE iff CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS INE o 489,551'OF THE NEW. 1/4 oEly OF WLY (RAC.SEC. 13-5-11. S a a �— x pu+o'1+•w Is9e a+' — x ou+o'Ir w loal or SpoO' i15.00' - ])0.00' w H Op'90'11--to, - g PCL 2 b x PM 44/40 � F 40.00_W40'N'W aD0."L- ar9p l aD9p19'W F 8 W o.00' PARCEL J _r PARCEL 2 PCL I $_' '� b' 8b x m+o'l4'w PM 15/18 W PM 25 w �8 � R PCL 3 8 � � w$ PARCEL 1 - b /17 4 - PM 44/40 � 11109 506 O.R. °�� R Jo.co• 1.69 ACRES o A I / 17209 506 O.R.�, �a 0,91 ACRES 0.28 ACRES V m — —0.19 ACRES — INSiRUMENi N0. °�_ / P +'w SD.00• 0. 82-008039 O.R. 0.16 ACRES — z J.9r 10'11ss.sa• 2.27 ACRES a W N ppaas+'W IaO.Op' 8 z M pP90It'w I..., �n F m(- I s rl—IV17PCL 2PM 44/400,31 ACRESPARCEL2 2091506 O,R. W OA3 ACRES qi PARCEL 3 PCL 4 $ — PM 15/18 112/9/506 O.R. z Q 3 O.50 ACRES ]pall' N 0T4p'14'W 131.88' N ar+0'14'W N DD90'19 WW 651,55' s59.68'� 1=05'p9'JS E1Y LINE OF 7985/557 O.R. � I 05.45'_ W�1 1 0_ PCL 1_ I PM 84-590 0,6O ACRES x oa4olr w Ipzl oo' z �aa S — — — _ — — REACH BLVD. 9109 SdO 11-9—f1 '03S'OVNd'4/I MN 5 3H1 10 83N800 M'N d OWNERSHIP EXHIBfr AV� ALDEN& I,ten.zu. SSOCIATES BEACH PROMENADE �� 5 �0:•°�°�'�° •�"""�• I• BEACH BOULEVARD&ATLANTA AVENUE v U luxlwdclow wrux,u 7 EXHIBIT 3 METHOD OF FINANCING This Method of Financing is attached to the Purchase Agreement and Escrow Instructions (the"Purchase Agreement") between the City of Huntington Beach ("City") and Beach Promenade LLC, a California corporation ("Buyer"),relating to Buyer's acquisition from City of real property to be consolidated and reconfigured with adjacent parcels.Any capitalized term not otherwise defined herein shall have the meaning ascribed to it in the Purchase Agreement. Pursuant to the Purchase Agreement,Buyer agrees to purchase the Property from City for the Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00). Buyer's purchase of the Property will be financed by a Buyer Note for the amount of the Property Purchase Price. 1. Definitions. The following capitalized terms shall mean as follows and in the event of a conflict between the definitions in this Method of Financing and the definitions in the other City Loan Documents, the definitions in this Method of Financing shall control: The term "Buyer Documents" shall mean the Purchase Agreement,the Buyer Note,the City Deed of Trust and the UCC 1 Financing Statement. The term"Buyer Note"shall the Promissory Note by which Buyer promises to pay to City the Property Purchase Price in accordance with the Schedule of Performance and secured by the City Deed of Trust. The term "City Deed of Trust" shall mean one or more Deeds of Trust with Assignment of Rents substantially in the form attached as Exhibit No. "T'to the Purchase Agreement, in which Buyer is the Trustor and City is the Beneficiary,which secures the Buyer Note. The term "Property Purchase Price" shall mean the purchase price for the Property in the amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00)to be paid by Buyer to City. The term "Environmental Indemnity"shall mean the indemnity by Buyer, substantially in the form attached to the Purchase Agreement as Exhibit 10. 2. Buyer Note. In accordance with and subject to the terms and conditions of the Purchase Agreement, the Buyer Note and this Method of Financing,the City and Buyer agree that: (a) Once acquired by Buyer,the Property will be consolidated with Buyer's other parcels and re-parcelized into Parcels 1, 2, 3, 4 and 5 by recordation of a Parcel Map in substantial conformance with Exhibit "15." i G:PDA:2009Drafts:Beach-Atlanta03_Method of Financing Draft 7a 201 1_01_1 I (b) The Buyer Note shall be secured by the City Deed of Trust recorded on Parcels 2 and 4. 3. Recordation. Upon the Close of Escrow, the Title Company shall record the Parcel Map and the Buyer Documents in accordance with instructions contained in the Purchase Agreement(as such instructions may be jointly amended by the City and the Buyer) and shall be prepared to issue to the City and Buyer a policy of title insurance, insuring the priority of the City Deeds of Trust in amounts and with endorsements as the City may reasonably require. 4. Repayment. The repayment terms of the Buyer Note shall be as follows, and as set forth in the Schedule of Performance attached to the Purchase Agreement as Exhibit 4: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent (7%) per annum commencing upon the Close of Escrow, not to exceed Three Thousand Five Hundred Dollars ($3,500.00)per annum. (c) On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deposit sufficient funds with the Escrow Agent to fund the Close of Escrow (the "Initial Deposit"). Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to City the sum of Fifty-three Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments'') of which Fifty Thousand Dollars ($50,000.00)will be applied to the principal amount outstanding. (d) Buyer shall pay City Three Hundred Fifty Thousand Dollars ($350,000.00) within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four(4)years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00) within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map, or within six (6)years of the Close of Escrow, whichever occurs first. (f) Buyer shall pay City Three Hundred Thousand Dollars ($300,000)within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight(8)years of the Close of Escrow,whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten(10)years from the Close of Escrow. (h) All sums paid by Buyer to City are nonrefundable. 2 G:PDA:2009Drafts'Beach-Atlanta03_Method of Financing Draft 7a 2011 01_l 1 EXHIBTI'4 SCHEDULE OF PERFORMANCE ACTION ITEM TIME FOR PERFORMANCE 1. Opening of Escrow. Within 180 days of City approval of the Agreement. 2. Deposits into Escrow. The Buyer and City shall make deposits into escrow as provided for in the Agreement. 3. Close of Escrow; Recordation of Grant When all conditions to close Escrow Deed, Parcel Map, and City Deed of Trust. have been fulfilled. 4. Buyer makes additional payments to Upon each anniversary of Close of City of$50,000.00, plus interest in the Escrow until Property Purchase Price amount of 7%of the unpaid balance of the paid in full. Entire Property Purchase Property Purchase Price, interest payment Price to be paid in full no later than not to exceed $3,500.00 per year. 10 years from Close of Escrow. 5. Commencement of construction of Within 2 years of recordation of the building on Parcel 1 of the Parcel Map. Parcel Map. b. Completion of construction of building No later than 2 years following on Parcel 1 of the Parcel Map. commencement of construction of building upon Parcel 1. 7. Buyer's initial payment (of Within 120 days after issuance of $350,000.00)to City towards balance of Certificate of Occupancy for building Property Purchase Price. upon Parcel 1, but no later than 4 years after Close of Escrow. 8. Commencement of construction of Within 4 years of recordation of the second building on Parcel 2 or 4 of the Parcel Map. Parcel Map, whichever is second. 9. Completion of construction of second Within 2 years following building on Parcel 2 or 4 of the Parcel commencement of construction of Map,whichever is second. second building on Parcel 2 or 4 of the Parcel Map, whichever is second. I G PDA:2009drafs:Beach-Atlanta04 Schedule Of Performance Draft 4a 2011-01-11 10. Buyer's second payment(of Within 120 days of issuance of $300,000.00)to City towards balance of Certificate of Occupancy for building Property Purchase Price. on the second commercial pad site, but no later than 6 years after Close of Escrow. 11. Release and partial reconveyance of Within 10 days following Buyer's City Deed of Trust recorded on second second payment of$300,000.00 to commercial pad site. City towards balance of Property Purchase Price. 12. Commencement of construction of No later than six years from third building on Parcel 2 or 4 of the Parcel recordation of the Parcel Map. Map,whichever is third. 13. Completion of construction of third No later than eight years from building on Parcel 2 or 4 of the Parcel recordation of the Parcel Map. Map,whichever is third. 14. Buyer's third payment (of Within 120 days of issuance of $300,000.00)to City towards remaining Certificate of Occupancy for building balance of the Property Purchase Price. on the third commercial pad site, but no later than 8 years after Close of Escrow. 15. Release and Full Reconveyance of Within 30 days of Buyer's payment City Deed of Trust. of the full Property Purchase Price and any interest. NOTES: It is understood that this Schedule of Performance is subject to all of the terms and conditions of the Agreement. The summary of the items in this Schedule of Performance is not intended to supersede or modify the more complete description in the Agreement; in the event of any conflict or inconsistency between this Schedule of Performance and the text of the Agreement,the text of the Agreement shall govern. The time period set forth in this Schedule of Performance may be altered or amended only by written agreement signed by the Buyer and City. The City Administrator of City shall have the authority to approve on behalf of City reasonable extensions of time for performance of the actions set forth above, not to exceed a cumulative total of one year. Any other requests for extensions of time shall require the review and approval of the City Council of City as needed to comply with applicable law and internal policies and procedures of City. 2 G:PDA:2009drafts:Beach-Atlanta04 Schedule Of Performance Draft 4a 2011-01-11 EXHIBIT 5 SCOPE OF DEVELOPMENT The Project consists of Buyer's acquisition from the City of an existing frontage road consisting of a total of approximately 90,387 square feet, located adjacent to Beach Boulevard at Atlanta Avenue (the"Property"). The Property is to be consolidated with the Median and a portion of the existing shopping center Site owned by Buyer located on the east and west boundaries of the Property, and resubdivided by the recordation of a Parcel Map in order to create legal parcels for the development and construction of three additional new retail building pads consisting of a total of approximately 28,326 square feet and associated private and public Improvements to the Site, as further described in the Agreement, in conformity with the applicable local and state laws, rules and regulations. In addition,the Project will provide for improved ingress and egress, access and parking for the existing parcels and buildings within the shopping center Site. G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta05_Scope of Development.doc ve RECORDING REQUESTED BY: ` City of Huntington Beach ` . . Real Estate Services Division Cif Document Recorded P.O. Box 190/2000 Main Street j 7 Huntington Beach, CA 92648 p 1' j 7, NO WHEN RECORDED MAIL TO: ::ompared with original. BEACH PROMENADE LLC �N6E }COUNTY F,ECGRDER 21190 Beach Blvd. Huntington Beach, CA 92648 APN(S). INCORPORATED AREA 14T DEEDDOCUMENTARY TRANSFER TAX;EXEMPT AAVVII Location:G of Huntington Beach I Signature of Declarant or Agent determining tax FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Huntington Beach, a California municipal corporation, hereby GRANT(S)to BEACH PROMENADE LLC, a California Limited Liability Company, the real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: See Exhibits"A"and"B"for legal description and sketch EXCEPTING therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting, developing, producing, removing and marketing said substances; and FURTHER EXCEPTING THEREFROM a permanent easement and right at any time or from time to time, to construct, maintain, operate, replace, remove, and/or renew water lines, and for the transportation or distribution of water including access to and from the property for said purpose, over a portion of said land as described in the legal description and sketch entitled "Beach Boulevard Frontage Road Water Easement,"collectively attached hereto as Exhibits "C"and"D", and incorporated by this reference as though fully set forth herein. Dated: { 2011 C N N BEACH alifo a icipal corporation r i ler A ROVED AS TO FORM: City Attorney MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE: BEACH PRO SENADE LLG 21190 Beach Blvd-Huntingl.9nP 8eachy CA 92648 G:PDA:2009Drafts: Beach-Atianta07_Grant Deed Final 2011_02_02 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT State of IA- County of � 6C On before me, rsonally Dater Name tk Titte of Officer(iee,Jane Doe No ary Public) appeared _—�e CY446V ,W.6 SLY Names)of Signer(s) knewRie-niv -OR- A proved to me on the basis of satisfactory evidence to be the persor6)whose nam as/ ee ubscribed to the within instrument and acknowvedged to me that ecuted the same in 4is;l�uthorized capaci es and that by P.L.ESPARIA 7 4ts+e hel ignatun9M)on the instrument the person,or the Commission d 1857021 entity upon behalf of which the personpacted, executed the q ® Rotary Public-California instrument. Orange County WITN d offici eal. M Comm.Ex irsa Aug 4,2013 Signatur f Notary ----------------------------------------®PillONAL--------------------------------------- 7hough the data below is not required bylaw,it may prove valuable to persons relying on me document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document C� 7'" ��� Title or Type of Document Document Date: Number of Pages Signer(s)Other Than Named Above: Capadty(ies)Claimed by Seller(s) Signer's Name Signer's Name ❑ Individuai ❑ Individual ❑ Corporate Officer ❑ Corporate officer Title(s): Titie(s): ❑ Partner ❑ Limited ❑ General ❑ Partner ❑ Limited General ❑ Attorney-in-Fad Right Thumbprint of ❑ Attorney-in-Fact Right Thumbprint of Signer Signer ❑ Trustee ❑ Trustee ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other ❑ Other Signer Is Representing: Signer Is Representing: G:PDA:2009Drafts: Beach-Atlantao7_Grant Deed Final 2011_02_02 Exhibit A { SHEET' 1 OF 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS SOLSAS, IN THE CITY OF HUNTINGTON BEACH,COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51,PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632,RECORDED FEBRUARY 26,1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN ` BOOK 5,PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY,DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590,FILED IN BOOK 202,PAGES 46 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580,NORTH 89'37'06"EAST,89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632,RECORDED FEBRUARY 26, 1968,IN BOOK 8526,PAGE 461 OF OFFICIAL RECORDS; } THENCE.NORTHERLY ALONG SAID EAST LINE,NORTH 09"50'39"WEST, 133.85 FEET,TO THE ` BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; ` THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9"10'25",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,NORTH 00'40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; i THENCE WESTERLY ALONG SAID PARALLEL LINE;SOUTH 89"37'06"WEST,88.00 FEET TO THE EAST ! LINE,OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, $OUTH 00'40'14"EAST,818.16 FEET; I THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2,SOUTH 09°50'39" i EAST,206.45 FEET TO THE POINT OF BEGINNING, CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS,RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. o �-ANp SG� w � u o � EXP. 12-31-11 A � JOSEPH G.DERLETH sr S. 734p PLS 7340,EXPIRES 1WIM1 of Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH `I DEPARTMENT OF PUBLIC WORKS 1 I I NW'LY COR SEC 13 T6S, R11 W, SBM N'LY LINE SEC 13 PER PM 94-590 T6S, R11 W, SBM I f _ _ (N89'37'06"E) _ ATLANT_A AVE I ( -- ------ 12 ---- -- F02/48-25k M 84-590, -II 8' PM I I__gg=l 44/40 Pki W'LY LINE SEC 13� I T6S, R11 W, SBM N 1 � aR)t I I n , 1 i5!16 0.M { W --110' I r 1 ( )= RECORD PER PARCEL MAP 1 m I 1 84-590, FILED IN BOOK 202, y I PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,------4 INCLUSIVE OF PARCEL MAPS 202/48-50 PM I VZzM=PORTION OF STATE HIGHWAY } RELINQUISHMENT NUMBER 632, t---110' I RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF PARCEL 1, STATE HIGHWAY MAP Q I BOOK 5, PAGES 45 AND 46. o I 90,340 SO FT, (2.07 ACRES) OD o ` I EXHIBIT B PARCEL 2, PM 84-590; }- 6!!8 I SHEET 1 OF 3 202/48-50 PM �B,J I I 8 _ GRAPHIC SCALE -------�-- — 1 inch c 150 It. iso 8 iso N LY LINE - PARCEL 1 PM 84-590 1 202/48-50 PIA EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA o FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS 1 ATLANTA AVE ! GRAPHIC SCALE I _ (N89'37'06"E) �22' 1 inch -50 m NW LY COR SEC 13 50 ° 2'Ln SO T6S, R11 W, SBM 0 PER PM 84-590 0 ( ) = RECORD PER PARCEL MAP I o ( IN FEES ) 84-590, FILED IN BOOK 202, -t N PAGES 48 THROUGH 50 PER STATE PARCEL E'LY LINE, PAEL 1 HWYMAP INCLUSIVE OF PARCEL MAPS. co Eo BOOK 5, PAGES 41 (( )) = RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK c' 5, PAGES 45 AND 46. �-- ----''88 22' cD �=PORTION OF STATE HIGHWAY c RELINQUISHMENT NUMBER 632, d, RECORDED 2/26/58, IN 8526/461 O.R., ALSO BEING A EXHIBIT B PORTIHIIGHWON OF AY MAP BRCEL 1,OOK 5. STATE R SHEET 2 OF 3 8 � LINE TABLE: L1= N89'37'06"E, 89.21' `` 1 IE L2= N00'40'14"W, 730.41' I C PARCEL 2, N P PM 84-590, W 202/48-50 PM I o, � Z 6.f/I6 PIit rn I--W'LY LINE SEC 13 En % m T6S, RIMSBM N --j gp I 91 w NE COR PARCEL POINT OF 41 c° 1, PM 84-590, ® BEGINNING, SE 202/48-50 PM COR PARCEL 2, LA m a PM 84-590, w 202/48-50 PM 8' (58,00') (54.91 ) L1 1 N'LY LINE PARCEL 1 f PM 84-590 I (N89'37'06"E, 489.56') i EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH Of ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS GRAPHIC SCALE ' 2 inch -50 it. I N'LY LINE SEC 13 50 o Ys so TSS, R11W, S.B.M. ATLANTA AVE (N89'37'06"E) IN CEP I NW'LY COR SEC 13 T6S, R11W, SBM 3 PER PM 84-590 5 5 ' L3 — — i ( ) = RECORD PER PARCEL MAP 44/40 P14; I 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 , INCLUSIVE OF PARCEL MAPS. 8 8t-�22' PARCEL 2, 0 PM 84-590, I o 15/16 PIN! 202/48-50 PM I oLn 3 = PORTION OF STATE HIGHWAY 0 j RELINQUISHMENT NUMBER I EXHIENT B j 632, RECORDED 2/26/68, 1N q 14 SHEET 3 OF. 3 B526/461 O.R., ALSO BEING o A PORTION OF PARCEL 1, rvl STATE HIGHWAY MAP B0000 5, PAGES 45 AND 46. 90 LINE TABLE: I L3= S89'37'06"W, 88.00' 6 C W'LY LINE SEC 13 I E'LY LINE, PARCEL 1 W z T6S, R11W, SBM PER STATE HWY MAP 0 I BOOK 5, PAGES 41 o ( PARCEL 2, AND 42. rn = PM 84-590. z 202/48-50 PM W L22' X -0 k—� 8' 6/i8 PF:R z ® a � EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Exhibit C SHEET 1 OF 2 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS,SAID LANDS ALSO BEING A PORTI�OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 25, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5,PAGES 45 • AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED 1N RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY;THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89°3T06"EAST,79.08 FEET,TO THE TRUE POINT OF BEGINNING,OF THIS DESCRIPTION; THENCE CONTINUING EASTERLY ALONG SAID NORTHERLY LINE, NORTH 89°37-06"-EAST, 10.14 FEET TO THE INTERSECTION OF SAID NORTH LINE,WITH THE.EAST LINE OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968,IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09°50'39"WEST, 133.85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9010'25",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00940'14"WEST, 730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG LAST SAID PARALLEL LINE, SOUTH 89°37'06"WEST, 10.00 FEET TO A LINE PARALLEL WITH AND 10.00 FEET WESTERLY OF THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526,PAGE 461 OF OFFICIAL RECORDS; THENCE SOUTHERLY ALONG LAST SAID PARALLEL LINE, SOUTH 00'40'14"EAST,730.46 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1010.00 FEET; Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE g CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS i 1 • 1 f Exhibit C SHEET 2 OF 2 i THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE,THROUGH A CENTRAL 4 ANGLE OF 9°10'25",AN ARC DISTANCE OF 161.71 FEET; 1 THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE, SOUTH 09"50'39"EAST, 132.18 FEET,TO THE TRUE POINT d BEGINNING. CONTAINING 10,244 SQUARE FEET MORE OR LESS(0.24 ACRES). EXHIBIT"D"ATTACHED AND BY THIS REFERENCE MADE A PART HEREOF. i LAND sG9`k711 ` V �A 0 „ EW.12-31-tt A JOSEPH G.DERLETH PLS 7340, EXPIRES 12/31/11 s 7aao ,`� lF OF CA01 Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS I i NW LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94-590 F202/48-50 _ (N89'37'06"E) ATLANTA AVE_7' 30' —._..-- — _„_ - -590, I 78' 10.00' W LY LINE SEC 13 Ioo T6S, R11W, SBM Iol _ I 15/i6 PM r- z 0 I ( )= RECORD PER PARCEL MAP I I 768'- 84-590, FILED IN BOOK 202, y I PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,----�- 10.00' INCLUSIVE OF PARCEL MAPS 202/48-50 PM I I oo ` I =10.00' EASEMENT FOR WATER ---110' AND INCIDENTAL PURPOSES TO THE CITY OF HUNTINGTON Ioo BEACH. oo o � Ilo 0I I 0 {, I 6/18 -ni o oco I I m o I � 6/I6 PM EXHIBIT D PARCEL 2, PM 84-590, ��p��-I- 1 �F 3 202/48-50 PM H—g8'—! 10.00' I , I 7 8 GRAPHIC SCALE -------r-- — , I inch -150 M I N'LY LINE —f '50 I ° 75 15° PARCEL 1 PM 84-590 202/48-50 PM EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT Wal FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE me CITY OF HUNTINGTON BEACH 1B DEPARTMENT OF PUBLIC WORKS IATLANTA AVE I GRAPHIC SCALE 1 inch =50 ft. (N89'37'06"E) -22'--� s, 29 5 rNW'LY COR SEC 13 6S, R11W, SBM0ER PM 84-590 a 78 ( IN FEET ) ( ) = RECORD PER PARCEL MAP I 0 10.00' 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 rn) w E'LY LINE, PARCEL 1 INCLUSIVE OF PARCEL MAPS. ao PER STATE HWY MAP I m I BOOK 5, PAGES 41 (( )) = RECORD PER STATE I AND 42, HIGHWAY MAP FILED IN BOOK °'- 5, PAGES 45 AND 46, �- 88� 22' CO o 6/!6 P�! ®- 10.00' EASEMENT FOR WATER I c e AND INCIDENTAL PURPOSES TO THE CITY OF HUNTINGTON - BEACH. EXHIBIT I o SHEET 2 OF 3 I 8 � LINE TABLE: I $ L1= N89'37'06"E, 79.08' I r L2= N89'37'06"E, 10.14' L3= N00'40'14"W, 730.41 -? L4= SOO'40'14"E, 730.46' I 1 C PARCEL 2, a PM 84-590, W — 202/48-50 PM o s'�`8 P" I LI too- N Z Q(� o F—W'LY LINE SEC 13 r.i o Q M_ T6S, R11W, SBM I cfl v, NE COR PARCEL No 0 0 1, PM 84-590, m W o POINT OF �Y �, 202/4$-50 PM COMMENCEMENT, I �: m z® SE COR PARCELOD 10.00 m o f 2, PM 84-590, 8 w w 202/48-50 PM I tco ]EUE POINT OF $ BEGINNING (88.00') (54.91') L1 N'LY LINE PARCEL i� L2 I 1 PM 84--590 (N89-37'06 E, 489.56) EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS FGRAPHIC SCALE N'LY LINE SEC 13 1 inch -50 ttT6S, R11W, S.B.M. 25 ao ATLANTA AVE (N89'37'06"E) _( IN Y C NW'LOREC S 13 30, T6S, R11 W, SBM 5)' 5 ' I PER PM 84-590 L5 I L6 — — — ( ) = RECORD PER PARCEL MAP 4 4/4 0 P: 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 10.00' 22' PARCEL 2, o 0 PM 84-590, I 0 0 15/:G Pis; 202/48-50 PM I I o 0 ®=10.00' EASEMENT FOR WATER I i AND INCIDENTAL PURPOSESI TO EXHIBIT D THE CITY OF HUN71NGTON SHEET 3 OF 3 BEACH. n wo w 0 I IN Ct LINE TABLE: r I L5= S89'37'06"W, 10.00' ( a E L6= N8937'06"E, 78.00' [TiES I co at G W'LY LINE SEC 13 I E'LY LINE, PARCEL 1 00 z T6S, R11 W, SBM I PER STATE HWY MAP o I BOOK 5, PAGES 41 o( PARCEL 2, AND 42, P O � PM 84-590, 202/48-50 PM I _ 6/iB Pm 7d W o 8, L22'-1 OD z of I s m EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT i FROM 50' SOUTH OF TO 1072' SOUTH OF ATL.ANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS I i PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA Beach Promenade, LLC Huntington Beach, California $1,200,000.00 , 2011 FOR VALUE RECEIVED, Beach Promenade LLC, a California Limited Liability Company ("Buyer"), hereby promises to pay to THE CITY OF HUNTINGTON BEACH ("City"), a municipal corporation of the State of California, or order, a principal amount of One Million, Two Hundred Thousand Dollars ($1,200,000.00), pursuant to the Agreement and Escrow Instructions for Purchase and Sale of Real Property dated December 6, 2010 (the "Agreement")between Buyer ("Buyer"therein), and the City of Huntington Beach ("City or Seller" therein), incorporated herein by this reference. The Agreement is a public record on file in the offices of the City. The Buyer shall pay interest at the rate, in the amount and at the time hereinafter provided. 1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition,the following terms shall have the following meanings: The term"City Deed of Trust" shall mean the Deed of Trust recorded against the Property, in which Buyer is the Trustor and the City of Huntington Beach is the Beneficiary, which secures the Buyer Debt. The term"Buyer Debt" shall mean Buyer's obligation to pay City the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), as evidenced by this Note and secured by the City Deed of Trust. The term "Buyer Documents" shall mean the Agreement, this Note, the City Deed of Trust and the UCC 1 Financing Statement. The term"Environmental Indemnity" shall mean the unrecorded environmental indemnity entered into by Buyer in favor of the City and the Agency, dated on or about the date hereof. The term "UCC1 Financing Statement" shall mean the UCC1 Financing Statement dated on or about the date hereof and recorded against the Property and filed in the California Secretary of State's Office in connection with the Buyer Debt. 2. This Note evidences the obligation of the Buyer to the City for the payment of the Buyer Debt. Buyer may prepay the principal balance of this Note at any time without penalty. 1 G:PDA:2009 Drafts:Beach-Atlanta:Beach-Atlanta08 Buyer Note Final_2011_02_02 3. This Note is payable at the principal office of City, 2000 Main Street, Huntington Beach, California 92648, or at such other place as the holder hereof may inform the Buyer in writing, in lawful money of the United States. 4. This Note is secured by the City Deed of Trust. 5. This Note shall accrue simple interest at the rate of seven percent (7%)per annum on the principal amount outstanding, from the date of disbursement, with further provisions as follows: (a) However, if any event occurs giving the City the right to accelerate repayment of this Note,the entire unpaid and unforgiven principal balance owing hereunder shall, as of the date of such default,commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non-usurious interest rate permitted by law, whichever is less(the"Default Rate"). 6. The unpaid principal balance of this Note and all accrued but unpaid interest shall be due and payable on the earliest to occur of the following (which shall be referred to herein as the "Maturity Date"): (a) the tenth anniversary of the date of recordation of City of Huntington Beach Parcel Map No. 2009-122. (b) the date on which there is a Default by the Buyer under the terms of this Note, the Agreement, the City Deed of Trust, the Environmental Indemnity, or any deed of trust or other instrument securing the Buyer Debt,which is not cured or waived within the respective time period provided herein and therein. 7. The repayment terms of the Buyer Debt shall be as follows: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent (7%)per annum commencing upon the close of escrow. (c) On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deposit Fifty Thousand Dollars ($50,000.00) with the Escrow Agent(the "Initial Deposit") which will be applied to the principal amount outstanding. Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to the City the sum of Fifty Three Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments"), of which Fifty Thousand Dollars ($50,000) will be applied to the principal amount outstanding. 2 GTDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08_Buyer Note Final 2011_02 02 (d) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00)within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four(4) years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00)within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map, or within six (6)years of the Close of Escrow, whichever occurs first. (f) Buyer shall pay City Three Hundred Thousand Dollars ($300,000) within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight (8) years of the Close of Escrow, whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten (10) years from the Close of Escrow. (h) Except as otherwise provided by herein, payments to the City shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Buyer pursuant to the terms of the Buyer Documents (in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal amount owed. However,the Deposit shall be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of a default under the City Deed of Trust, all amounts received by the City from any party shall be applied in such order as the City, in its sole discretion, may elect. All sums paid by Buyer to City are nonrefundable. 8. Any breach by Buyer of the provisions of Section 202 (entitled "Prohibition Against Transfers") of the Agreement shall constitute a default under this Note. The cure periods under the Agreement and this Note in connection with such a default shall run concurrently. 9. . Buyer waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Buyer hereby agrees to pay all costs and expenses, including reasonable attorney's fees, which may be incurred by the holder hereof, in the enforcement of this Note, the City Deed of Trust or any term or provision of either. 10. Upon the failure of Buyer to perform or observe any term or provision of this Note, or upon the occurrence of any event of default under the terms of the Agreement, the City Deed of Trust, or the Environmental Indemnity, the holder may exercise its rights or remedies hereunder or thereunder. All such rights and remedies shall GTDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08 Buyer Note Final_2011_02_02 be cumulative. Upon the event of a default that is not cured or waived within the time provided therefore, the whole of the unpaid principal and interest owing on this Note shall, at the option of City and without notice, become immediately due and payable. This option may be exercised at any time after any such event and the acceptance of one or more payments from any person thereafter shall not constitute a waiver of City's option. City's failure to exercise said option in connection with any particular event or series of events shall not be construed as a waiver of the provisions hereof as regards that event or any subsequent event. 11. (a) Subject to the extensions of time set forth in Section 12, and subject to the further provisions of this Section 11, failure or delay by Buyer to perform any material term or provision of this Note, the Agreement, the City Deed of Trust, or the Environmental Indemnity, constitutes a default under this Note. (b) City shall give written notice of default to Buyer, specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by City in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by City in asserting any of its rights and remedies shall not deprive City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, the City shall give the Buyer written notice of such default. The Buyer shall have a period of ten(10) days after such notice is given within which to cure the default prior to exercise of remedies by the City. (e) If a non-monetary event of default occurs,prior to exercising any remedies hereunder, City shall give Buyer notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Buyer shall have such period to effect a cure prior to exercise of remedies by City. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Buyer (i) initiates corrective action within said period, and(ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Buyer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. If Buyer fails to take corrective action or cure the default within a reasonable time, City shall give Buyer not to exceed 90 days, provided such limited partner is otherwise in compliance with the foregoing provisions. In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given. (f) Any notice of default shall be deemed given only if either (i) dispatched by first class mail, registered or certified, postage prepaid,return receipt 4 G:PDA:2009Drafts:Beach-A11anta:Beach-Atlanta08 Buyer Note Finat 20]1 02 02 requested, to the addresses specified for the Buyer in Section 16 of this Note, or (ii)by electronic facsimile transmission to the facsimile numbers specified for the Buyer, followed by delivery by the method described in clause (i), or(iii) by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express)to the addresses specified for the Buyer in Section 16 of this Note. Receipt shall be deemed to have occurred on the earlier of(i)the date of successfully completed electronic facsimile transmission or(ii)the date marked on a written postal service or messenger or courier service receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). If either party gives notice of a change of address in the manner specified in this paragraph, all notices, demands and communications originated after receipt of the change of address (or the effective date specified in the notice of change of address, if later) shall be transmitted, delivered or sent to the new address. (g) Notwithstanding specific provisions of this Note, non-monetary performance hereunder shall not be deemed to be in default where delays are due to causes beyond the control and without the fault of the party claiming an extension of time to perform (a"Force Majeure Delay"), provided that they actually delay and interfere with the timely performance of the matter to which they would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference, including: war; insurrection; strikes; lock- outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; acts or failure to act of any Governmental Agency (except acts or failure to act of City shall not excuse performance by City); the imposition of any applicable moratorium by a Governmental Agency; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten(10)business days after it obtains actual knowledge of the event. 12. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid. 13. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Buyer and its partners. Neither the Buyer nor any of its general or limited partners,nor any other party, shall have any personal liability for repayment of the Buyer Debt. The sole recourse of the City with respect to repayment of the Buyer Debt shall be the 5 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08_Buyer Note Final_2011_02_02 exercise of its rights against the Site and the improvements thereon and any related security for the Buyer Debt. Notwithstanding the foregoing,the City (a) may obtain a judgment or order (including, without limitation, an injunction)requiring Buyer or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Debt; and (b) may recover directly from Buyer or any other party: (1) any damages, costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee of Buyer or of any general partner of Buyer; (ii) any damages, costs and expenses incurred by City as a result of any misappropriation of funds provided for the Project as described in the Agreement, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; (iii) any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances; and (iv) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 14. The address of Buyer for purposes of receiving notices pursuant to this Note is as follows: 21190 Beach Blvd., Huntington Beach, CA 92648. 15. Neither this Note nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by City and Buyer. 16. Notwithstanding any provision in this Note,the City Deed of Trust or other document securing same,the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 17. This Note has been executed and delivered by Buyer in the State of California and is to be governed and construed in accordance with the internal laws thereof. 18. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable, and this Note shall be construed as if such illegal, invalid or unenforceable term or provision had not been contained herein. 6 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08 Buyer Note Final 2011_02_02 19. Time is of the essence in the performance of each provision hereof. IN WITNESS WHEREOF, Buyer has executed this Note as of the day and year set forth above. BUYER: - Beach Promenade A Califo i rted Liabi 'ty o pany B print name ITS: (circle on e hairman residentNice President AND By: sSZ1,441 S;;IY-S-0 U X//A A/ print name ITS: (circle one) Secretary hief Finance O c�/Asst. Secretary-Treasurer 7 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08 Buyer Note Final 2011_02_02 his Document was electronically recorded by RECORDING REQUESTED ft FIRST AMERICAN TITLE COMFNNY First American NHS Rancho Cucamonga NATIONAL HOMEBUILDER SERVICES SUBDIVISION DEPARTMENT Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: I IIIIIIII II I IIIII IIII IIIIII I IIIIII III NO FEE 2011000178041 04:05pm 04/07/11 66 406 DI S02 A36 18 THE CITY OF HUNTINGTON BEACH 0.00 0.00 0.00 0.00 51.00 0.00 0.00 0.00 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator Zc (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§ 6103 &27383) APN: DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY BEACH PROMENADE LLC FOR THE BENEFIT OF THE CITY OF HUNTINGTON BEACH This Deed of Trust,5pcurity Agreement and Fixture Filing (With Assignment of Rents) is made this�Te day of r1- , 20&_by Beach Promenade LLC, a California Limited Liability Company (hereinafter referred to as "Trustor") (whose address is 21190 Beach Blvd., Huntington Beach, CA 92648, to First American Title Company, (hereinafter called "Trustee"), for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California (hereinafter called `Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648. Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION all present and future right, title and interest of Trustor in and to the following property (the "Trust Estate"): (1) All of Trustor's rights,title and interest in and to that certain real property in the City of Huntington Beach, County of Orange, State of California more particularly described in Exhibit "A" attached hereto and by this reference made a part hereof(hereafter referred to as the "Subject Property"); (2) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property (the 'Improvements"); (3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefiting or otherwise relating to the Subject Property 1 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 C or the Improvements, including easements, rights-of-way and development rights (the "Appurtenances"). (The Appurtenances, together with the Subject Property and the Improvements, are hereafter referred to as the "Real Property"); (4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or occupancy of the Trust Estate, including those past due and unpaid (the "Rents"); (5) all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code (the "UCC"), and whether existing now or in the future)now or in the future located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators,boilers, furnaces, water tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts,proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor (the "Goods," and together with the Real Property, the "Property"); and (6) all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv)takeout, refinancing and permanent loan commitments, (v)warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to,trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits,bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money,trade names, trademarks, goodwill and all other types on 2 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09 City Deed of Trust Final 2011_02 02 intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (the "Intangibles"). Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estate described above in which a security interest may be created under the UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a"secured party"under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c) and 9604 of the UCC. FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, all of the following: (1) Due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in that certain promissory note in the original principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), payable as set forth in the Method of Financing, executed by Trustor ("Buyer" therein) of even date herewith (the "Buyer Note"); (2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of One Million Two Hundred Thousand Dollars ($1,200,000.00) or so much thereof as shall be advanced, evidenced by the Buyer Note, with interest, according to the terms of the Buyer Note; (3) Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay and/or perform (whether as principal, surety or guarantor)for the benefit of Beneficiary, when such future advance of obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; (4) The Purchase Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Purchase Agreement, the Buyer Note,the Assignment of Rents, the Assignment of Agreements, and the UCC I Financing Statement, all as described in the Purchase Agreement(collectively referred to as the "Secured Obligations") and all of their terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof however evidenced. Any capitalized term that is not otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the Purchase Agreement. AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 3 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final 2011_02 02 1. That Trustor shall pay the Buyer Note at the time and in the manner provided therein, and perform the obligations of the Trustor as set forth in the Secured Obligations at the time and in the manner respectively provided therein; 2. That Trustor shall not permit or suffer the use of any of the Property for any purpose other than the uses permitted by the Secured Obligations; 3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period,the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. 4. That, subject to the prior rights, if any, of a lender whose lien is senior to this Deed of Trust ("Senior Lender"), all rents, profits and income from the Trust Estate are assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period,to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations. 5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice,to take possession and protect the Trust Estate and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the Improvements insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by the Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies shall be deposited with the Beneficiary; 7. To pay, at least 10 days before delinquency, any taxes and assessments affecting the Property; to pay, when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7. 4 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09 City Deed of Trust Final_2011_02_02 8. To keep the Property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon(subject to Trustor's right to contest the validity or applicability of laws or regulations); not to commit or permit waste thereof, not to commit, suffer or permit any act upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property; not to permit or suffer any material alteration of or addition to the Improvements without the consent of the Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided, then Beneficiary or Trustee,but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase, contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees. Notwithstanding the foregoing, in the event of default under this Deed of Trust, the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary shall specify in writing the particular records that must be maintained and the information or reports that must be submitted; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Buyer Note; 13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor to keep and perform all the covenants, conditions, and agreements of said agreements, the principal sum and all arrears of interest, and other charges provided for in the Buyer Note shall at the option of the Beneficiary of this Deed 5 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Trust Final_2011_02_02 of Trust become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting,provided that Trustor shall, at Beneficiary's written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure)record in the Office of the Recorder of Orange County, a surety bond in an amount one-and-one-half (12) times the amount of such claim item to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary; 15. That any and all improvements made or about to be made upon the premises covered by the Deed of Trust, and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14, Division 3, of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of Senior Lender, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. Subject to the rights of the Senior Lenders, all such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including attorney's fees, the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or 6 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09 City Deed of Trust Final 2011_02_02 damaged, shall be applied to the amount due under the Buyer Note secured hereby. No amount applied to the reduction of the principal shall relieve the Trustor from making regular payments as required by the Buyer Note. If the Buyer Note has been repaid, the remainder of the balance shall revert to the Trustor; 18. Upon default by Trustor in making any payments provided for in the Buyer Note secured hereby or in this Deed of Trust, or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this Deed of Trust, below, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust, the Note and all documents evidencing expenditures secured hereby; 19. a. Prior to the repayment in full of the Buyer Debt,the Trustor shall not assign or attempt to assign the Agreement or any right therein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property, the Improvements, or any portion thereof or interest therein(referred to hereinafter as a"Transfer"), without prior written approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary shall not unreasonably withhold or delay its decision regarding consent. If consent should be given, any such transfer shall be subject to this Section 19, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. b. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary,to fulfill the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee, by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary shall expressly assume all of the obligations of the Trustor under the Secured Obligations, and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust. There shall be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval shall be indicated to the Trustor in writing. C. In the absence of specific written agreement by the Beneficiary, no unauthorized Transfer, or approval thereof by the Beneficiary, shall be deemed to relieve the Trustor or any other party from any obligations under the Secured Obligations. d. In the event of a Transfer prior to the time the Buyer Debt is paid in full and without the prior written consent of the Beneficiary, the net proceeds shall be paid to the G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the Buyer Debt. e. (1) As used herein, "Transfer" includes the sale, agreement to sell, transfer or conveyance of the Property, the Project, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project, except as provided in this Section 19 or the Secured Obligations. (2) "Transfer" shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor, or any conversion of Trustor to an entity form other than that of Trustor at the time of execution of the Agreement, except as set forth in the Secured Obligations. f. Beneficiary shall not unreasonably withhold, condition or delay its decision regarding approval of any matter for which its approval is required hereunder. Any disapproval shall be in writing and contain Beneficiary's reasons for disapproval. 20. After the lapse of such time as may then be required by law following the recordation of a notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of(1)the expenses of such sale,together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2)the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Buyer Note; (4) all other sums then secured hereby; and (5)the remainder, if any,to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with all title, powers, and 8 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Trust Final_2011 02_02 duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, including but not limited to the obligations set forth in the Agreement, and upon surrender of this Deed of Trust and any note, instrument or instruments setting forth all obligations secured hereby to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty,the Property then held hereunder. The recitals in such reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof. To the extent permitted by law, the grantee in such reconveyance may be described as "the person or persons legally entitled thereto."Neither Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. When the Property has been fully reconveyed, the last such reconveyance shall operate as a reassignment of all future rents, issues and profits of the Property to the person or persons legally entitled thereto; 24. The trust created hereby is irrevocable by Trustor; 25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Buyer Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several; 26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or, of any action or proceeding in which Trustor,Beneficiary, or Trustee shall be a party unless brought by Trustee. Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law; 27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this 9 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Trust Final_2011_02_02 Deed of Trust. After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been admitted to the Trustor, Beneficiary shall send to the Investor Limited Partner a copy of all notices of default and all other notices that Beneficiary sends to Trustor, at the address for the Investor Limited Partner as provided by written notice to Beneficiary by Trustor. 28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary. 29. Reserved. 30. Trustor agrees that, except as otherwise provided in the Buyer Note, upon sale or refinancing of the property, the entire principal balance of the debt secured by this Deed of Trust, plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due and payable. 31. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners,nor any other party, shall have any personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the exercise of its rights against the Property and any related security for the Buyer Debt. Notwithstanding the foregoing, Beneficiary may obtain a judgment or order (including, without limitation, an injunction)requiring Trustor or any other party to perform (or refrain from) specified acts other than repayment of the Buyer Debt; and may recover directly from Trustor or from any other party: (a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of Trustor, or of any general partner of Trustor; (b) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the rehabilitation of the Property as described in the Agreement, rents and revenues from the operation of the Project, or proceeds of insurance policies or condemnation proceeds; (c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity; and (d) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. to G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Final_2011_02_02 32. Notwithstanding specific provisions of this Deed of Trust, non-monetary performance hereunder shall not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter, and, despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor: War; insurrection; strikes;.lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor, or suppliers; acts of the other party; acts or failure to act of any Governmental Authority (except acts or failure to act of the Beneficiary shall not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Trustor shall deliver such written notice within ten (10) business days after it obtains actual knowledge of the event. 33. If the rights and liens created by this Deed of Trust shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the unsecured portion of such obligations shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations. 34. (a) Subject to the extensions of time set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under this Deed of Trust. (b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the Beneficiary. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. ll G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Trust Final 2011_02_02 (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of seven (7) days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary. (e) If a non-monetary event of default occurs, prior to exercising any remedies hereunder, Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured within thirty(30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. (f) Except as otherwise required to comply with the provisions of California Civil Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a"hard" copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Trustor; and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date,of receipt thereof. REST OF PAGE INTENTIONALLY LEFT BLANK 12 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Tnist Final_2011_02_02 IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set forth above. i "TRUSTOR" Beach Pr nade LL print name ITS: (circle o Chairma resident/Vice President AND By: 1 S D(/iV print name ITS: (circle one)Secretary/ hief Financial Office Asst. Secretary-Treasurer -' APPROVED BY: THE TY OF TINGTON BEACH, a municipal core ion of the State of California Mayor UE y C rD AS TO FORM: City Attorney INITIATED AN APPROVED: Director of Econom' Development REVIEW APPROVED: ty Administrator G:PDA:2009Drafts:Beach-Atianta:Beach-Atlanta09_city Deed of Trust Final_2011_02_02 IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and-year set forth above. "TRUSTOR" Beach P nade LL not name ITS: (circle o Chairma resident/Vice President AND By: N��"� print name ro C) ITS: (circle one)Secretary hief Financial Offic Asst. Secretary-Treasurer APPROVED BY: THE C Y OF TINGTON BEACH, a munic al core ion of the State of California Mayor ity C rk A ED AS TO FORM: -Cit✓y Attorney INITIA; D7 APPROVED: Director of Econorn' Development REVIEW APPROVED: I .,-/, - yty Administrator G:PDAi2009Drafts:Beach-Atlanta:Beach-AtiantaO9_City Deed of Trust Final_2011_02_02 State of California ) County of Orange ) On r (�` �0// before me, a Notary Public, personally appeared ejwE pk&ec e Tp ak.) , who proved to me on the basis of satisfactory evidence to be the personQ whose nametq is�osubscribed to the within instrument and acknowledged to me that e xecuted the same in his4 e7 authorized capacitytjo and that by flier ei ignaturgs on the instrument the person, or the entity upon behalf of which the persoroacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P i. ESPARZA Commission # 1851021 ` Notary Public -California z Orange County __XzA Signature (Seal) M Comm.Ett irea Au 4,2013 ET State of California ) Lcf-"cam County o� On r 2g 20 l 1 before me, . �T.MtA a Notary Public, personally appeared'� knfivi `' sntRn�"w`ho proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) /are subscribed to the within instrument and acknowledged to me that heAs+e/they executed the same in hisftfer/their authorized capacity(ies), and that by hi!0=/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. RHONDA UN . >.= COMM.#1844094 � n s— ;";, syerAR:PUBn.IC;CALIFORNIA 3 Signature — (Seal) LOSANGE,Esc0UNI-y sb�v f`�rrir�ae��;=e��,n�7Sri€70,3013 14 G:PDA2009Drafts:Beach-Atlanta:Beach-Atianta09_City Deed of Trust Final_2011_02_02 State of California ) County of Orange ) On F(.. j p-4 . Ap// before me, a Notary Public, personally appeared i,�CA4.&,ro , job L.r.,arj , who proved to me on the basis of satisfactory evidence to be the personp whose name('-- i- re subscribed to the within instrument and acknowledged to me that-he fhe xecuted the same in hisAhe thei authorized capacity es and that by kisFlter ei ignaturgs on the instrument the persolo or the entity upon behalf of which the persoro acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P L. ESPARZA Commission o 1857021 Notary Public-California i Orange County Signature (Seal) My Comm.Expires Aug4,2013 State of California ) County of Orange ) On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 14 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_city Deed of Trust Final_2011_02_02 PARCELS 2 AND 4 OF PARCEL MAP NO. 2009-122, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK 1 , PAGES THROUGH�INCLUSIVE, OF PARCEL MAPS, RECORDS OF THE COUNTY RECORDER OF SAID COUNTY. AS SHOWN ON EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF. NL LAND NLLEH�gIG�,� a ya No. 7914 Exp. 12-31-11 rfq�� � f r A \EQ�� l EXHIBIT"A" ALDEN & SSOCIATES LEGAL DESCRIPTION CIVIL ENGINEERS—LAND SURVEYORS-PLANNERS 2552 WHITE ROAD,SUITE B•IRVINE,CA 92614-6274 W.O.No.1623-478-001 Date: 12/16/2010 (949)-660-0110 FAX:660-0418 Engr.B.J.W. Chk'd. J.W. Sheet 1 of 1 1 ATLANTA AVENUE 100 50 0 100 Cr vi o — f SCALE IN FEET z LJ m PARCEL 1 1 inch = 100 ft. N 89°43'12" W 198,00, u 88.00'-j 110.00' 1 PARCEL 2 00 S I 0.601 ACRES 0') - � N � r- W o N o n Q/ 00 N `- 0 _ 0 N Q 0 I Z 0-) Z W O J 0 O p N O 0 1 / m Z _ N89043'12"W �p�Ql LAND Q oz 1 10.00' �� r� � �� ALLElV�y9G,p� m U O )]-\ Gi 2 a z ,�11 �' No. 7914 Exp. 12-31-11 s Q OF C N\\- PARCEL 3 Ld N 89°42'55" W 331 .02' - \ C 88.00'- 243.02' 1 J W W W U 00 � Q o � � o a_ o cN•i PARCEL 4 o cN•i O 1 .232 ACRES O PARCEL 5 z z 1 r N 89025'31" W 243.00' ALDEN & EXHIBIT "B" S S 0 CIATE S SKETCH TO ACCOMPANY A LEGAL DESCRIPTION CIVIL ENGINEERS-LAND SURVEYORS-PLANNERS 2552 WHITE ROAD,SUITE B-IRVINE,CA 92614-6236 W.O.No. 1623-479-001 Date 12/16/2010 (949)660-0110 FAX:660-0418 Engr.B.J.W. Chk'd. J.W. Sheet I of 1 ENVIRONMENTAL INDEMNITY IN FAVOR OF THE CITY OF HUNTINGTON BEACH THIJ ENVIRONMENTAL INDEMNITY (this "Indemnity"), dated V(1 , 2011, and made by Beach-Promenade LCC, a California limited liability compa y (referred to as "Buyer"), whose address for purposes of giving notices is 21190 Beach Blvd., Huntington Beach, CA 92648, in favor of THE CITY OF HUNTINGTON BEACH (the "City"), whose address for purposes of giving notice is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH WHEREAS, Buyer has agreed to acquire the real property in the City of Huntington Beach described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon (collectively referred to as the "Property"); WHEREAS, Buyer and the City, entered into that certain Purchase Agreement, dated December 6, 2010 (the "Agreement'), pursuant to which the City agreed to sell to Buyer for the purpose of expanding an existing shopping center (the "Project") (the Agreement and the documents and instruments referred to therein which are being executed by Buyer concurrently herewith are referred to collectively as the "Purchase Documents"); WHEREAS, Buyer has agreed to acquire the Property in an "As-Is" condition, and execute and deliver to the City this Indemnity to induce the City to make the Sale; NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Buyer hereby agrees with City as follows: 1. DEFINITIONS For the purpose of this Indemnity, "Hazardous Materials" or "Hazardous Substances" shall include, but not be limited to, oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances defined as "extremely hazardous substances," "hazardous substances," "hazardous materials," "hazardous waste" or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Sections 6901, et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as emended, 33 U.S.C. Section 1251 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe 1 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code, as "infectious waste" in Section 25117.5 of the California Health and Safety Code, or as "hazardous substances" in Section 25316 of the California Health and Safety Code or "hazardous materials" as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and orders and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity shall have the meanings ascribed to them in the Housing Agreement with the same force and effect as if set forth in full below. 2. COVENANTS AND INDEMNITY The following covenants, and indemnities are hereby given and made by Buyer: 2.1 Covenants. (a) Buyer covenants that it will strictly comply with any and all laws, regulations, and/or orders which may be promulgated from time to time relating to Hazardous Materials ("Hazardous Materials Laws"), to immediately take, at Buyer's sole expense, all remedial action required by any Hazardous Materials Law or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claim (as defined herein below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials Law or in relation to any Hazardous Materials Claim. (b) Buyer covenants that the Property will not, while Buyer is the owner of any portion thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, transportation, presence, discharge or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in strict compliance with all Hazardous Materials Laws and required in connection with the routine rehabilitation, operation and maintenance of the Property. (c) City shall have the right, at any time, to conduct an environmental audit of the Property at City's expense, unless Hazardous Materials are found in violation of this Indemnity, then at Buyer's sole cost and expense, and Buyer shall reasonably cooperate in the conduct of any such environmental audit. Other than in an emergency, such audit shall be conducted only after prior written notice has been given to Buyer and only in the presence of a representative of Buyer. Buyer shall give the City and its agents and employees access to the Property to remove, or otherwise to mitigate the effects of, Hazardous Materials and Buyer shall not unreasonably delay or condition such access. (d) Buyer shall not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by any Hazardous Materials Laws, and, with respect to any such material currently present in or brought onto the Property after Buyer acquired the Property, Buyer shall promptly either(i) remove or cause to be removed any material that such Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply with such Hazardous Materials Laws, all at Buyer's sole cost and expense. If Buyer shall fail to so do within the cure period permitted under applicable law, regulation, or order, the City may do whatever is necessary to eliminate said substances from the 2 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 premises or to otherwise comply with all Hazardous Materials Laws, and the costs thereof shall be added to the Obligations (as hereinafter defined) of Buyer under this Section 2. (f) Buyer shall immediately advise the City in writing of any of the following: (i) any pending or threatened claim against Buyer or the Property by any governmental entity or agency or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any condition or occurrence on the Property that (A) results in noncompliance by Buyer with any Hazardous Materials Laws, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any Hazardous Materials Law, or (C) could reasonably be anticipated to form the basis of a Hazardous Materials Claim against the Property or Buyer. 2.2 Indemnity. Buyer hereby agrees to defend, indemnify, protect, and hold harmless the City and its respective members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against any and all damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third party tort claims), litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, attorneys' and experts' fees and disbursements) of any kind or of any nature whatsoever, whether foreseeable or unforeseeable, (collectively, the "Obligations") which may at any time be imposed upon, incurred by or asserted or awarded against the City as a direct or indirect consequence of: (a) The presence of any Hazardous Materials on, in, under, or affecting all or any portion of the Property or any surrounding areas, which were stored, discharged, released or emitted after the Close of Escrow conveying the Property from the City to Buyer; (b) The breach of any covenant made by Buyer in Section 2.1 hereof, or (c) The enforcement by the City of any of the provisions of this Section 2.2 or the assertion by Buyer of any defense to its obligations hereunder. 3. BUYER'S UNCONDITIONAL OBLIGATIONS 3.1 Unconditional Obligations. Buyer hereby agrees that the Obligations will be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Purchase Documents or affecting any of the rights of the City with respect thereto. The obligations of Buyer hereunder shall be absolute and unconditional irrespective of, and Buyer waives any defense based upon, (a) The validity, regularity, or enforceability of the Purchase Documents or any other instrument or document executed or delivered in connection therewith; (b) Any alteration, amendment, modification, release, termination, or cancellation of any of the Purchase Documents, or any change in the time, manner, or place of G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 payment of, or in any other term in respect of, all or any of the obligations of Buyer contained in any of the Purchase Documents; (c) Any extension of the maturity of or any waiver of, or consent to any departure from, any provision contained in any of the Purchase Documents; (d) Any exculpatory provision in any of the Purchase Documents limiting the City's recourse to property encumbered by the Deed of Trust securing the Property. (e) Any exchange, addition, subordination, or release of, or nonperfection of any lien on or security interest in, any collateral for the Buyer Debt, or any release, amendment, waiver of, or consent to any departure from any provision of, any other surety or guarantee given in respect of the Buyer Debt; (f) The,insolvency or bankruptcy of Buyer or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Buyer Debt; or (g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of Buyer, Buyer's General Partners, or any other indemnitor or guarantor with respect to the Buyer Debt or any or all of the Obligations. 3.2 Continuation. The term of this Indemnity shall commence upon close of escrow and shall continue until such time as no legal action can be successfully brought against City due to applicable statutes of limitation. This Indemnity (a) is a continuing indemnity and shall remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Loan or the release or other extinguishment of the Deed of Trust, or any other security for the Loan); and (b) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the City upon the insolvency, bankruptcy, or reorganization of Borrower, Borrower's General Partners or otherwise, all as though such payment had not been made. 3.3 Survival. Borrower's duty to indemnify shall survive any judicial or non judicial foreclosure under the City Deed of Trust or transfer of the Property in lieu thereof, the release and reconveyance or cancellation of the City Deed of Trust, and the satisfaction of all of Borrower's obligations under the Loan Documents; provided, however, that the City shall only have the right to enforce this Indemnity after any such transfer, reconveyance or foreclosure, with respect to Hazardous Materials present on the Property before the date of the transfer, reconveyance or foreclosure. 4 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 4. WAIVER Buyer acknowledges that possible defenses to the enforceability of the Obligations may presently exist and/or may arise hereafter and as part of the City's consideration for entering into the Agreement. It has specifically bargained for the waiver and relinquishment by Buyer of all such defenses. Buyer agrees that it has had the opportunity to seek and receive legal advice from skilled legal counsel of its choosing and represents and confirms that Buyer is fully informed regarding, and thoroughly understands, the nature of such possible defenses, the circumstances under which they may arise, the benefits that they might confer upon Buyer and the legal consequences to Buyer of waiving such defenses. Buyer makes this Indemnity with the intent that this Indemnity shall be fully enforceable by the City and that the City is induced to enter into the Agreement in material reliance upon such presumed full enforceability. Nothing herein contained shall be deemed to prohibit Buyer from contesting, in good faith, the validity of any Hazardous Materials Claims or from asserting that Buyer is not in breach of its obligations under this Indemnity. 5. NOTICES Any notice, demand, statement, request, or consent made hereunder shall be in writing and shall be personally served, mailed by first-class registered mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, or given by electronic facsimile ("fax") transmission to the fax numbers stated below, with confirmations mailed by first class registered mail, return receipt requested to the address set forth above, of the party to whom such notice is to be given (or to such other address as the parties hereto, shall designate in writing): In the case of the City: 714-374-1590 In the case of Buyer: 714-374-2211 Any notice that is transmitted by fax transmission followed by delivery of a"hard" copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. 6. MISCELLANEOUS 6.1 Buyer shall make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to City, as applicable, at its address specified in the first paragraph hereof. 6.2 No amendment of any provision of this Indemnity shall be effective unless it is in writing and signed by Buyer and City, and no waiver of any provision of this Indemnity, and no consent to any departure by Buyer from any provision of this Indemnity, shall be effective unless 5 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02 02 it is in writing and signed by the City, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 6.3 No failure on the part of City to exercise, and no delay in exercising, any right hereunder or under any Purchase Document shall operate as a waiver hereof or thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of City provided herein and in the Purchase Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of City hereunder the Agreement against any party thereto are not conditional or contingent on any attempt by the City to exercise any of its rights hereunder or under the Agreement against such party or against any other person or collateral. 6.4 If any provision of this Indemnity shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, then that provision shall, as to such jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction. 6.5 This Indemnity shall (a) be binding upon Buyer, and Buyer's successors and assigns; and (b) inure, together with all rights and remedies of City hereunder, to the benefit of City, their respective directors, officers, employees, and agents, any successors to the City's interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of the City's rights and remedies under the Agreement, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. 6.6 Buyer hereby (a) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Orange County in any action or proceeding arising out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court. Buyer irrevocably consents to the service of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity or in any other manner provided by law. Buyer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. 6.7 The title of this document and the captions used herein are inserted only as a matter of convenience and for reference and shall in no way define, limit, or describe ,the scope or the intent of this Indemnity or any of the provisions hereof. 6.8 This Indemnity shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California. 6 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 6.9 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one agreement. BUYER: BEACH PROMENAD LL A4;E ompany �` <. By: Its: 7 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 EXHIBIT A LEGAL DESCRIPTION 8 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Final_2011_02_02 Exhibit A , SHEET 1 OF 1 f THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING I A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS, ALL OF WHICH ARE LOCATED IN RECORDS OF f SAID COUNTY, DESCRIBED AS FOLLOWS: t BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580, NORTH 1 89°37'06"EAST, 89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID i PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; R THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09°50'39"WEST, 133.85 FEET,TO THE t 3 BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; 1 i THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9°10'25",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00"40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE,SOUTH 89°37'06"WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14" EAST, 818.16 FEET; i THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09-50,39" EAST, 206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. �A o ° N sU� U '� O EXP. 12-31-11 a JOSEPH G. DERLETH sry L.S. 7340 PLS 7340, EXPIRES 12/31/11 tF of ca��F°R Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94-590 (N89'37'06' - - ATLANTA AVE _ 30' S 50' -- -- - - ------ - --- -- -- - i F2� PM0,------k 8 8, 5' m F I m! E WILY LINE SEC 135 T6S, R11 W, SBM { � I � <m { D nc� ! };` � m� --110' { RECORD PER PARCEL MAP rn ( 8 84-590, FILED IN BOOK 202, { PAGES 48 THROUGH 50 PARCEL 2, PM 84-590, ----T INCLUSIVE OF PARCEL MAPS I 202/48-50 PM I � { L'L,�M=PORTION OF STATE HIGHWAY I ►-- 110, RELINQUISHMENT NUMBER 632, I RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF I PARCEL 1, STATE HIGHWAY MAP C� I I BOOK 5, PAGES 45 AND 46. o ( I 90,340 SQ FT, (2.07 ACRES) o { l { EXHIBIT B PARCEL 2, PM 84-590,------1- 6; 202/48-50 PM 8'-{ SHEET 1 OF 3 { G { 8 _GRAPHIC SCALE --- —( 1 inch =150 ft. { N'LY LINE so I o �s Aso J PARCEL 1 { PM 84-590 { 202/48-50 PM i ( IN FEET ) *�wm EXHIBIT B LBEACHBOULEVARD FRONTAGE ROAD VACATION AREAH OF TO 1072' SOUTH OF ATLANTA AVE OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS I a TATLANTA AVE f GRAPHIC SCALE — (N89_37'06"E) � 22' s inch =50 ft 50 0 25 50 NW'LY COR SEC 13 T6S, R11 W, SBM o g i PER PM 84-590 Q IN FEET } { ( ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, r i E'LY LINE, PARCEL 1 PAGES 48 THROUGH 50 PER STATE NWY MAP ! INCLUSIVE OF PARCEL MAPS. oo i BOOK 5, PAGES 41 {( )) = RECORD PER STATE I AND 42. HIGHWAY MAP FILED 1N BOOK °'- 5, PAGES 45 AND 46. ------88 22' ®= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A EXHIBIT B PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. SHEET 2 OF 3 8 � I LINE TABLE: IE 1 L1= N89'37'06"E, 89.21' 1 L2= N00'40'14"W, 730.41' C PARCEL 2, �p PM 84-590, Lo rn 202/48-50 PM un 0 G/iB pm C� r) �-W'LY LINE SEC 13 _ T6S, R11 W, SBM o j � c,� NE COR PARCEL M r- o POINT OF p `� 1, PM 84-590, r-- C BEGINNING, SE 202/48-50 PM COR PARCEL 2, 8' rn o PM 84-590, 202./48-50 PMCo 8' {88.00 ) (54.91 ) L N'LY LINE PARCEL 1 f PM 84-590 k (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA •J� FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS J f 1 i GRAPHIC SCALE 1 inch =50 ftn N'LY LINE SEC 13 5o 0 25 so T6S, R11 W, S.B.M. 3 ATLANTA AVE IN FEET (N89'37'06"E) ( } i i NW'LY COR SEC 13 30' T6S, R11 W, SBM 5Q' 50' PER PM 84-590 L3 { ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 8' II i F-22' PARCEL 2, zo PM 84-590, 202/48-50 PM , o = PORTION OF STATE HIGHWAY o a'_ RELINQUISHMENT NUMBER o EXHIBIT B 632, RECORDED 2/26/68, IN o SHEET 3 OF 3 8526/461 O.R., ALSO BEING - o A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. I 00 ` 00 9D ` c LINE TABLE: ! L3= S8937'06"W, 88.00' C W'LY LINE SEC 13 E'LY LINE, PARCEL 1 Wz T6S, R11 W, SBM PER STATE HWY MAP d BOOK 5, PAGES 41 s nPARCEL 2, - AND 42. rn PM 84-590, z 202/48-50 PM I f rn W o L22' r � C 8 l i z ® � � rn 1 f. 1 EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA o FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE e"aff CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS I UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS front and baZ CAREFULLY A.NAME&PHONE OF CONTACT AT FILER[opt[onag B.SEND ACKNOWLEDGEMENT TO: (Name and Address) DA ! -City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager LTHE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1.DEBTOR'S EXACT FULL LEGAL NAME-insert ony ne debtor name(1e or 1b)-do not abbreviate orwribine names 1a.ORGANZZATOON'S NAME Beach Promenade, LLC. OR 1b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 1c.MAILINGADDRESS CITY STATE 1POS7ALCODE COUNTRY 21190 Beach Blvd Huntington Beach CA 92648 NADD'LINFORE ;Ia.TYPE OF ORGANIZATION i1f.JURISDICTION OF ORGANIZATION r19.ORGANIZATIONALID#.ifany I ORGANIZATION[ ( i DEBTOR LLC ( ❑NONE 2.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME—insert only one debtor name(2a or 2b)—do not abbreviate or combine names 2a.ORGANZZATOONAS NAME OR 2b.INDMDUALB LAST NAME FIRST NAME MIDDLE NAME SUFFIX 2c.MAILING ADDRESS CITY STATE 1POSTALCODE COUNTRY ADD'L INFO RE .TYPE OF ORGANIZATION 12f.JURISDICTION OF ORGANIZATION :29.ORGANIZATIONALIO#.if any ORGANIZATION � ' ' DEBTOR ❑NONE 3.SECURED PARTY'S NAME(or NAME of TOTAL ASSIGNEE of ASSIGNOR SIP)-insert on one secured party name(3a or 3b) 3a.ORGANIZATION'S NAME City of Huntington Beach OR 3b.INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 30.MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 2000 Main Street Huntington Beach CA 92648 4.This FINANCING STATEMENT covers the following oollaterzC ' This financing covers the following collateral. See attached legal description. S.ALTERNATME DESIGNATION fd applicable):❑LESSEEILESSOR❑CONSIGNEE/CONSIGNOR❑BAIL.EEBAILOR❑SELLER/BUYER❑AG.LIEN NON-UGC FILING This FINANCING STATEMENT is to be filed[for record](or recorded)in 7.Check to REQUEST SEARCH REPORT(S)on Debtors) 6. Ej ❑All Debtors❑Debtor 1 ❑Debtor 2 the REAL ESTATE RECORDS. Attach Addendum [if Mliicable]I[ADDITIONAL FEE] LOPN-1 S.OPTIONAL FILER REFERENCE DATA FILING OFFICE COPY—NATIONAL UCC FINANCING STATEMENT(FORM UCC1)—CALIFORNIA(REV.01/01108) i UCC FINANCING STATEMENT ADDENDUM FOLLOW INSTRUCTIONS(front and bad)CAREFULLY 9.NAME OF FIRST DEBTOR(la or 1b)ON RELATED FINANCING STATEMENT ft ORGANIZATION NAME - Beach Promenade, LLC OR gb,INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME,SUFFIX 10.MISCELLANEOUS: THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 11.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME—insert only one name(Ile or 1lb)—do not abbreviate or combine names 11a.ORGANIZATIONS NAME OR 11b.INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 11a MAILING ADDRESS CITY STATE 1POSTALOODE COUNTRY ADD'LINFORE :11e.TYPE OF ORGANIZATION ;11f.JURISDICTION OF ORGANIZATION :11g.ORGANIZATIONAL IDk,ir any ORGANIZATION ' DEBTOR ❑NONE W12. ADD1M7"10NMALCURED PARTY'S or Lj ASSIGNOR S/P S NAME—insert only M2 name 12a cr 12b) 12a.ORGANIZATIONS NAME OR 12b.INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 12c.MAILING ADDRESS CITY STATE JPOSTALMDE COUNTRY 13.This FINANCING STATEMENT covers❑timber to be cut or❑aaextraded I&Additional collateral description: collateral,or is riled as a❑fixture filin& See attached legal description. 14.Description of real estate: 15.Name and address of a RECORD OWNER of above-described real estate (tF Debtor does not have a record intereaty 17.Check only If applicable and check only one box. - Debtor Is a❑Trust or❑Trustee acting with respect to property held in trust or❑Decedent's Estate 1 B.Check only if applicable and check 20k one box. _ ❑Debtor is a TRANSMITTING UTILITY ❑Filed in connection with a ManutacWred-Home Transaction—effective 30 years ❑Filed in connection with a Public-Finance Transaction—effective 30 years FILING OFFICE COPY—NATIONAL UCC FINANCING STATEMENT ADDENDUM(FORM UCC1Ad)—CALIFORNIA(REV.01/01/08) j PARCELS 2 AND 4 OF PARCEL MAP NO. 2009-122,IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK PAGES THROUGH cP0 INCLUSIVE, OF PARCEL MAPS,RECORDS OF THE COUNTY RECORDER OF SAID COUNTY. AS SHOWN ON EXHIBIT`B"ATTACHED HERETO AND MADE A PART HEREOF. \�NNl LANp s ALLfiy�y9 G�,G l F` No. 7914 Exp. 12-31-11 ��qTF OF CA ALDEN & EXHIBIT"A" S S 0 CIATE S LEGAL DESCRIPTION CIVIL ENGINEERS—LAND SURVEYORS-PLANNERS 2552 WHITE ROAD,SUITE B •IRVINE,CA 92614-6274 W.O.No.1623-478-001 Date: 12/13/2010 (949)-660-0110 FAX:660-0418 Engr.B.J.W. Chk'd.J.W. Sheet 1 of 1 ATLANTA AVENUE 100 50 0 100 o PARCEL 1 SCALE IN FEET 00 1 inch =100 ft. � N 89043'12" W I { 198.00' — u 88.00'-'i 110.00, a� 0 ``' PARCEL 2 `'' 00 o, 0.601 ACRES o0 a, ? 0.) 0-1 >> N w oN N oN Q 00 I W c'o Z O z J O � °p N m O �. z O _ N89°43" 2"W p NL LANp Q o 1 10.00' r� �`'� � NLLLu EN�ysG�G 0 z ,��,P� No. 7914 to Exp. 12-31-11 s Q o OF Q PARCEL 3 w �! ! N 89042'55' W 331.02' Cf) I 1 I C� � m w U w 00 � Q o � � O r- o N PARCEL 4 o N O 1.232 ACRES 0 z z PARCEL 5 i 1 N 89025'31" W 243.00' wss EN & EXHIBIT "B" 0 CIATE S SKETCH TO ACCOMPANY A LEGAL DESCRIPTION CIVIL ENGINEERS-LAND SURVEYORS-PLANNERS 2552 WHITE ROAD,SUITE B-rRVINE,CA 92614-6236 W.O.No. 1623-478-001 Date 12/13/2010 (949)660-0110 FAX:660-0418 Engr,B.7.w. Chk'd. J.W. Sheet I of I EXHIBIT 12 CONDITION OF THE PROPERTY The Property was acquired by the City several decades ago. It was formerly owned by the State of California, Department of Transportation (Caltrans). The Property was previously used for roadway and public right of way purposes. The Huntington Beach Fire Department has identified two existing oil wells on the Property (Surf#1-6, Surf#2)that do not meet the 1989, present, or 2010 new Division of Oil and Gas abandonment standards. For this reason both wells will have to be vented with an approved system. A vertical riser will have to be installed. The Huntington Beach Fire Department recommends that no structures be built or placed over either of the abandoned oil wells. If any of the wells are to be covered by a structure, it may require re-abandonment under current 2010 Division of Oil and Gas standards, and may also require an approved vent system post 2010 abandonment standards. If the structure is to be public, or multi-family, a 24-hour continuous methane monitoring system should be installed. In addition to the existing oil wells, there is an existing 8-inch water main along the eastern edge of the current frontage road, over which the City has reserved and recorded a 10'wide easement in preparation for the conveyance of the property. There is a 3-inch gas main along the western edge of the frontage road that is subject to a relocation agreement between the Buyer and the Southern California Gas Company. The City is unaware of any other issues with the Property, and it is sold to Buyer in"As-Is" condition. G:PDA:Beach-Atlanta:Beach-Atlanta12_Condition Of The Property Draft 2 2010_11_19 ASSIGNMENT AGREEMENT FROM BEACH PROMENADE LLC TO THE CITY OF HUNTINGTON BEACH This ASSIGNMENT AGREEMENT is made this day of ,,,�C&5nwel , 20J C) , by and between BEACH PROMENADE LLC, a California Limited Liability Company, hereinafter referred to as "Assignor," and the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to "City or Assignee." RECITALS WHEREAS, on December 6, 2010, Assignor entered into a Purchase Agreement with the City, whereby City agreed to sell, and Assignor agreed to buy, certain real property (the "Property") owned by Assignee; and As a condition of sale, and in order to secure Assignor's obligations under the Purchase Agreement, Assignor has agreed to assign to City all of its rights,title and interest in all work product prepared by Assignor related to the purchase of the Property, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to-the Property, the contracts (if any) between Assignor and its architect and between Assignor and its general contractor, and all similar rights and property interests (the "Work Product"), NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged,Assignor and Assignee agree as follows: I. Assignor hereby assigns all of its right, title, and interest in the Work Product to Assignee. In the event of any termination of the Purchase Agreement, within ten (10) days of such termination, Assignor shall transmit all of the Work Product to Assignee. 2. Assignee hereby accepts and consents to the assignment of the Work Product. 3. Notwithstanding the foregoing, Assignor agrees to defend and indemnify the City from any and all claims, actions,judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from Assignor's use of the Work Product prior to this Assignment. SIGNATURES ON FOLLOWING PAGE I Beach-AtlantaB Assigmnent of Agreements Final_2011_02_02 ��se ►�vP � RECORDING REQUESTED BY: City of Huntington Beach Real Estate Services Division �C✓ P.O. Box 190/ 2000 Main Street Huntington Beach, CA 92648 WHEN RECORDED MAIL TO: BEACH PROMENADE LLC 21190 Beach Blvd. Huntington Beach, CA 92648 INCORPORATED AREA GRANTDOCUMENTARY TRANSFER TAX$EXEMPT ®��® APN(s): Location:G of Huntin ton Beach Signature of Declarant or Agent determining tax FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Huntington Beach, a California municipal corporation, hereby GRANT(S) to BEACH PROMENADE LLC , a California Limited Liability Company, the real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: See Exhibit"A"for legal description EXCEPTING therefrom all oil, gas and other hydrocarbon substances and minerals lying below a depth of 500 feet from the surface of said land, but without the right of surface entry at any time upon said land or within the top 500 feet thereof, for the purpose of exploiting, developing, producing, removing and marketing said substances; and FURTHER EXCEPTING THEREFROM a permanent easement and right at any time or from time to time, to construct, maintain, operate, replace, remove, and/or renew water lines, and for the transportation or distribution of water including access to and from the property for said purpose, over a portion of said land as described in the legal description and sketch entitled "Beach Boulevard Frontage Road Water Easement,"collectively attached hereto as Exhibits C- and , and incorporated by this reference as though fully set forth herein. Dated: 20 CITY OF HUNTINGTON BEACH A California municipal corporation Mayor City Clerk APT OVED AS TO FORM: City Attorney MAIL TAX STATEMENTS TO PARTY SHOWN ON THE FOLLOWING LINE: BEACH PROMENADE PROMENADE LLC,21190 Beach Blvd,Huntington Beach. 92648Beach Blvd..Huntington Beach.CA 92648 G:PDA:2009Drafts:Beach-Adanta07 Grant Deed Draft 3 2010 11 19 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT State of County of On before me, personally Date Name&Title of Officer(i.e,Jane Doe Notary Public) appeared J Name(s)of Signer(s) ❑ 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 of Notary ----------------------------------------OPTIONAL___-------_-___-___-_-__--------®.._---- Though the data below is not required bylaw,it may prove valuable to persons relying on the document and couldprevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document Document Date: Number of Pages Signer(s) Other Than Named Above: Capacity(ies) Claimed by Seller(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 Right Thumbprint of ❑ Attorney-In-Fact Right Thumbprint of Signer Signer ❑ Trustee ❑ Trustee ❑ Guardian or Conservator ❑ Guardian.or Conservator ❑ Other ❑ Other Signer Is Representing: Signer Is Representing: G:PDA:2009Drafts:Beach-Atlanta07 Grant Deed Draft 3 2010 11 19 i Exhibit A SHEET 1 OF 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, 1N THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS,SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED 1N BOOK 5, PAGES 45AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED 1N BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580, NORTH 89°37'06"EAST,89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26; 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09-50'39"WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 901025",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE,SOUTH 89°37'06"WEST, 88.00 FEET TO THE EAST LINE, OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14"EAST, 818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 09-50'39" EAST,206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES)_ SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. ��a L-AND �G9 � EXP. 12-31-11 A JOSEPH G_DERLETH L.S. 7340 PLS 7340,EXPIRES 12/31/11 9TF OF CALN' Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE ��� IV CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS NW'LY COR SEC 13 N'LY LINE SEC 13 R T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94--590 (N89'37'06"E) _ �ATLANTA AVE _ — 30' S , --- --- ----- 5p'-- -- --_® PARCEL 2, PM 84-590,------1 8> 202/48-50 PM I W'LY LINE SEC 13 T6S, R11 W, SBM I � I � 5l: > s m s I z -T— < )= RECORD PER PARCEL MAP m ` I 8 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,--- t INCLUSIVE OF PARCEL MAPS 202/48-50 PM I i ®=PORTION OF STATE HIGHWAY �-- 110, RELINQUISHMENT NUMBER 632, I RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF Z I PARCEL 1, STATE HIGHWAY MAP Q I BOOK 5, PAGES 45 AND 46. C I 90,340 SQ FT, (2.07 ACRES) I a I � I o � ! EXH113 T PARCEL 2, PM 84-590,---�_ �+; 7 SHEET , �� 202/48-50 PM8'� i , $ GRAPHIC SCALE — —— — — — 1 1 inch =150#t. N'LY LINE ,so j o �s iso ` } PARCEL 1 m � I PM 84-590 i 202/48-50 PM ( IN FEET ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE Lv CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS ATLANTA AVE GRAPHIC SCALE (N8937'06"E) F22' I inch =50 ft. 50 NW'LY COR SEC 13 so o zs i T6S, R11 W, SBM 0 8' -- PER PM 84-590 IS. { IN FM ( } = RECORD PER PARCEL MAP I 84-590, FILED IN BOOK 202, -- N EL 1 E'LY LINE, PARCEL PAGES 48 THROUGH 50 .� PER STATE ARCHWY MAP INCLUSIVE OF PARCEL MAPS. co BOOK 5, PAGES 41 {{ )) = RECORD PER STATE I AND 42. HIGHWAY MAP FILED 1N BOOK - 5, PAGES 45 AND 46. �= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, , RECORDED 2j26/68, IN 8526/461 O.R., ALSO BEING A EXHIBIT B PORTION OF PARCEL 1, STATE R SHEETHIGHWAY MAP BOOK 5. S g � 1 { LINE TABLE: 1 L1= N89'37'06"E, 89.21' L2= N00'40'14"W, 730.41' 1 C PARCEL 2, 0 � l PM 84-590, � m202j48-50 PM} c� i c C� (--W'LY LINE SEC 13 fTi uo M M T6S, R11 W, SBM C? NE COR PARCEL m POINT OF 1, PM 84-590, BEGINNING, SE 8, -1 202/48-50 PM ® COR PARCEL 2, w m o PM 84-590, 202/48-50 PM - 8' (88.00') (54.91') L1 N'LY LINE PARCEL 1 PM 84-590 (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE Lv CITY OF HUNTINGTON BEACH - DEPARTMENT OF PUBLIC WORKS GRAPHIC SCALE I inch =50 M N'LY LINE SEC 13 5o 0 25 50 • T65, R11 W, S.B.M. ATLANTA AVE { IN FEET (N89'37'O6"E) _ NW'LY COR SEC 13 30' T6S, R11 W, SBM 50' 50' PER PM 84-590 L3 { ) = RECORD PER PARCEL MAP 4fi/40% P" 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. g' 88 8' 22' PARCEL 2, o PM 84-590, 202/48-50 PM I o = PORTION OF STATE HIGHWAY o -? RELINQUISHMENT NUMBER ( EXHIBT B 632, RECORDED 2/26/68, IN Q SHEET 3 OF 3 8526/461 O.R., ALSO BEING P Cl A PORTION OF PARCEL 1, n STATE HIGHWAY MAP BOOK - 5, PAGES 45 AND 46. 00 a rn �1 LINE TABLE: L3= S89'37'06"W, 88.00' C W'LY LINE SEC 13 M E'LY LINE, PARCEL 1 CO z T6S, R11 W SBM PER STATE HWY MAP rn o BOOK 5, PAGES 41 < > o I PARCEL 2, AND 42. m PM 84-590, z 202/48-50 PM ®D L22, M r- o , m EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Exhibit C SHEET 1 OF 2 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET, OF THE WEST 489.55 FEET, OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTI(JN OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1, OF SAID PARCEL MAP 84-580, NORTH 89037'06" EAST, 79.08 FEET,TO THE TRUE POINT OF BEGINNING, OF THIS DESCRIPTION; THENCE CONTINUING EASTERLY ALONG SAID NORTHERLY LINE, NORTH 89°37'06"-EAST, 10.14 FEET TO THE INTERSECTION OF SAID NORTH LINE, WITH THE EAST LINE OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09050'39"WEST, 133.85 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9°10'25",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00040'14"WEST, 730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG LAST SAID PARALLEL LINE, SOUTH 89037'06"WEST, 10.00 FEET TO A LINE PARALLEL WITH AND 10.00 FEET WESTERLY OF THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE SOUTHERLY ALONG LAST SAID PARALLEL LINE, SOUTH 00°40'14" EAST,730.46 FEET, TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1010.00 FEET; Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE 0Je CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Exhibit C SHEET 2 OF 2 THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE,THROUGH A CENTRAL ANGLE OF 9010'25",AN ARC DISTANCE OF 161.71 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID PARALLEL LINE, SOUTH 09°50'39"EAST, 132.18 FEET,TO THE TRUE POINT Or BEGINNING. CONTAINING 10,244 SQUARE FEET MORE OR LESS (0.24 ACRES). EXHIBIT"D"ATTACHED AND BY THIS REFERENCE MADE A PART HEREOF. (, 10 1.ANp 0 EXP. 12-31-11 JOSEPH G. DERLETH PLS 7340, EXPIRES 12/31/11 sf� Ls. 7W T £OF como" Legal Description BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE J CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS E NW'LY COR SEC 13 NTY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM _ PER PM 94-590 (N89'37'06"E) _ _ ATLANTA AVE 30' 5 50' ------- - --- ---L----- - - PARCEL 2, PM 84-590,--i N 202/48-50 PM , i 78' i 10.00' W'LY LINE SEC 13— i T6S, R11 W, SBM i (c n � 16 z 0 E l ( }= RECORD PER PARCEL MAP- I j 8 84-590, FILED IN BOOK 202, ' 78' PAGES 48 THROUGH 50 PARCEL 2, PM 84-590, 10.00' INCLUSIVE OF PARCEL MAPS 202/48-50 PM I i ®=10.00' EASEMENT FOR WATER AND INCIDENTAL PURPOSES '--110, TO THE CITY OF HUNTINGTON i BEACH. lo z i lo oco o � o 6;/ 8 EXHIBIT PARCEL 2, PM 84-590,— {— {, 202/48-50 PM 8'---� 10.00' SHEET I O 3 i 78' 8' GRAPHIC SCALE -----� —— --——— —1 1 inch =150 ft. N'LY LINE �� i o 75 Eso ' PARCEL 1 PM 84-590 i 202/48-50 PM I ( IN FE1+:P EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS ATLAIVTA AVE GRAPHIC SCALE i 1 inch =50 ft. (N89'37'06"E) `---22'—y 50 o 25 so NW'LY COR SEC 13 i T6S, R11 W, SBM l a g' PER PM 84-590 78 ( IN FEET ) 0 10.00' ( } = RECORD PER PARCEL MAP I 84-590, FILED IN BOOK 202, r r > PAGES 48 THROUGH 50ri �+ E LY LINE, PARCEL 1 INCLUSIVE OF PARCEL MAPS. oo PER STATEI BOOK 5, PAGGESES 41 HWYMAP 1 {( )) = RECORD PER STATE I � AND 42. HIGHWAY MAP FILED IN BOOK °'- 5, PAGES 45 AND 46, 8' 22' �_ 6 8 P. �= 10.00' EASEMENT FOR WATER 1 AND INCIDENTAL PURPOSES TO THE CITY OF HUNTINGTON - - - BEACH. T EXHIBIT D o S fl SHEET 2�OF 3 LINE TABLE: g'- - L1= N8937'06"E, 79.08' 71 - L2= N89'37'06"E, 10.14' ' L3= NOO'40'14"W, 730.41' L4= SOO'40'14"E, 730.46' t j C PARCEL 2, PM 84-590, 6;' 8 W Z 202/48-50 PM o a C)C`) {--W LY LINE SEC 13 ,n Q M� ►� T6S, R11 W, SBM t° �, NE COR PARCEL o 0 0 1, PM 84—590, o POINT OF � 202/48--50 PM r- COMMENCEMENT, r� 10.00' ® SE COR PARCEL CID 2, PM 84-590, 8 PTI try W 202/48-50 PM Nco TRUE POINT OF g' BEGINNING (88.00') T (54.91') L1 N'LY LINE PARCEL 11 L2 PM 84-590 (N89'37'06"E, 489.56') EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS GRAPHIC SCALE N'LY LINE SEC 13 1 inch =5o f-L T6S, R11W, S.B.M. 50 0 25 50 ATLANTA AVE 0 m mi (N 89'37'06"E) { IN FEET ) NW'LY COR SEC 13 30' T6S, R11 W, SBM PER PM 84-590 L5 L6 ( ) = RECORD PER PARCEL MAP 44" 4`, 84-590, FILED IN BOOK 202, 4 PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 10 fl0' 8• 78' 22' PARCEL 2, 0 0 PM 84-590, o q I'':°I6 202/48-50 PM o o U =10.00' EASEMENT FOR WATER AND INCIDENTAL PURPOSES TO m g EXHI IT D THE CITY OF HUNTINGTON SIDE 3 OF 3 BEACH. w W O p LINE TABLE: L5= S89'37'06"W, 10.00' 00 g L6= N8937'06"E, 78,00' (TIE] co � W'LY LINE SEC 13 E'LY LINE, PARCEL 1 00 z T6S, R11 W, SBM PER STATE HWY MAP rn ( BOOK 5, PAGES 41 AND42. Cl PARCEL 2, PM 84-590, 202/48-50 PM m 0 8, L22'-l ® o I �- 78g, 10.00' m .: { EXHIBIT D BEACH BOULEVARD FRONTAGE ROAD WATER EASEMENT °Ja FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH -- DEPARTMENT OF PUBLIC WORKS i EXHIBIT 8 BUYER NOTE PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH CALIFORNIA Beach Promenade,I,LC Huntington Beach,California $1,200,000.00 , 20 FOR VALUE RECEIVED, Beach Promenade LLC, a California Limited Liability Company("Buyer"), hereby promises to pay to THE CITY OF HUNTIN(1'I"ON BEACH ("City"), a municipal corporation of the State of California, or order, a principal amount of One Million, Two Hundred Thousand Dollars($1,200,000.00), pursuant to the Agreement and Escrow Instructions for Purchase and Sale of Real Property dated , 20 (the "Agreement") between Buyer("Buyer"therein), and the City of Huntington Beach ("City or Seller"therein), incorporated herein by this reference. The Agreement is a public record on file in the offices of the City. The Buyer shall pay interest at the rate, in the amount and at the time hereinafter provided. 1. Definitions. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the Agreement. In addition,the following terms shall have the following meanings: The term "City Deed of Trust" shall mean the Deed of Trust recorded against the Property, in which Buyer is the Trustor and the City of Huntington Beach is the Beneficiary, which secures the Buyer Debt. The term "Buyer Debt" shall mean Buyer's obligation to pay City the principal amount of One Million Two Hundred Thousand Dollars ($1,200,000.00), as evidenced by this Note and secured by the City Deed of Trust. The term "Buyer Documents", shall mean the Agreement, this Note, the City Deed of Trust and the UCC 1 Financing Statement. The term "Environmental Indemnity"shall mean the unrecorded environmental indemnity entered into by Buyer in favor of the City and the Agency, dated on or about the date hereof. The term"UCCI Financing Statement" shall mean the UCC I Financing Statement dated on or about the date hereof and recorded against the Property and filed in the California Secretary of State's Office in connection with the Buyer Debt. I GTDA:2009Drafts-Beach-Atlanta:Beach-Atlanta08 Buver Note Draft 32011 01 1 1 2. This Note evidences the obligation of the Buyer to the City for the payment of the Buyer Debt. Buyer may prepay the principal balance of this Note at any time without penalty. 3. This Note is payable at the principal office of City, 2000 Main Street, Huntington Beach, California 92648, or at such other place as the holder hereof may inform the Buyer in writing, in lawful money of the United States. 4. This Note is secured by the City Deed of Trust. 5. This Note shall accrue simple interest at the rate of seven percent(7%)per annum on the principal amount outstanding, from the date of disbursement,with further provisions as follows: (a) However, if any event occurs giving the City the right to accelerate repayment of this Note,the entire unpaid and unforgiven principal balance owing hereunder shall, as of the date of such default,commence to accrue interest at a rate equal to two percentage points above the reference rate published by Bank of America N.A., or the maximum non-usurious interest rate permitted by law,whichever is less(the"Default Rate"). 6. The unpaid principal balance of this Note and all accrued but unpaid interest shall be due and payable on the earliest to occur of the following (which shall be referred to herein as the"Maturity Date"): (a) the tenth anniversary of the date of recordation of City of Huntington Beach Parcel Map No. 2009-122. (b) the date on which there is a Default by the Buyer under the terms of this Note, the Agreement, the City Deed of Trust,the Environmental Indemnity, or any deed of trust or other instrument securing the Buyer Debt, which is not cured or waived within the respective time period provided herein and therein. 7. The repayment terms of the Buyer Debt shall be as follows: (a) The Property Purchase Price of One Million, Two Hundred Thousand Dollars ($1,200,000.00) is the principal owed. (b) Interest shall be at seven percent(7%)per annum commencing upon the close of escrow. (c) On or before 12:00 noon on the business day preceding the date scheduled for the Close of Escrow, Buyer shall deposit sufficient funds with the Escrow Agent to fund the Close of Escrow (the"Initial Deposit"). Upon each anniversary of the date of deposit of the Initial Deposit, Buyer will pay to the City the sum of Fifty Three 2 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08_Buyer Note Draft 3_2011 0111 _ Thousand Five Hundred Dollars ($53,500.00) ("the Supplemental Payments"), of which Fifty Thousand Dollars ($50,000)will be applied to the principal amount outstanding. (d) Buyer shall pay City Three Hundred Fifty Thousand Dollars ($350,000.00)within 120 days of issuance of a Certificate of Occupancy for the first building on Parcel 1 of the Parcel Map, or within four(4)years of the Close of Escrow, whichever occurs first. (e) Buyer shall pay City Three Hundred Thousand Dollars ($300,000.00)within 120 days of issuance of a Certificate of Occupancy for the second building on either Parcel 2 or 4 of the Parcel Map, or within six(6)years of the Close of Escrow, whichever occurs first. (f) Buyer shall pay City Three Hundred Thousand Dollars($300,000) within 120 days of issuance of a Certificate of Occupancy for the third building on either Parcel 2 or 4 of the Parcel Map, or within eight(8) years of the Close of Escrow, whichever occurs first. (g) Any remaining unpaid portion of the Property Purchase Price shall be paid no later than ten (10)years from the Close of Escrow. (h) Except as otherwise provided by herein, payments to the City shall be applied first to the payment of all expenses, charges, costs and fees incurred by or payable to City by Buyer pursuant to the terms of the Buyer Documents(in such order and manner as City, in its sole discretion, may elect), then to the payment of all interest accrued to the date of such payment, and then to reduce the principal amount owed. However, each Supplemental Payment shall be applied to the most remote principal installment or installments until paid. Notwithstanding anything to the contrary contained herein, after the occurrence and during the continuation of a default under the City Deed of Trust, all amounts received by the City from any party shall be applied in such order as the City, in its sole discretion, may elect. All sums paid by Buyer to City are nonrefundable. 8. Any breach by Buyer of the provisions of Section 202(entitled "Prohibition Against Transfers") of the Agreement shall constitute a default under this Note. The cure periods under the Agreement and this Note in connection with such a default shall run concurrently. 9. Buyer waives presentment for payment, demand, protest, and notices of dishonor and of protest; the benefits of all waivable exemptions; and all defenses and pleas on the ground of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Buyer hereby agrees to pay all costs and expenses, including reasonable attorney's fees, which may be incurred by the holder hereof, in the enforcement of this Note, the City Deed of Trust or any term or provision of either. 3 G:PDA:2009Drafts Beach-Atlanta:Beach-Atlanta08 Buyer Note Draft 3 2011 01 1 1 10. Upon the failure of Buyer to perform or observe any term or provision of this Note, or upon the occurrence of any event of default under the terms of the Agreement, the City Deed of Trust, or the Environmental Indemnity,the holder may exercise its rights or remedies hereunder or thereunder. All such rights and remedies shall be cumulative. Upon the event of a default that is not cured or waived within the time provided therefore,the whole of the unpaid principal and interest owing on this Note shall, at the option of City and without notice, become immediately due and payable. This option may be exercised at any time after any such event and the acceptance of one or more payments from any person thereafter shall not constitute a waiver of City's option. City's failure to exercise said option in connection with any particular event or series of events shall not be construed as a waiver of the provisions hereof as regards that event or any subsequent event. 11. (a) Subject to the extensions of time set forth in Section 12, and subject to the further provisions of this Section 11, failure or delay by Buyer to perform any material term or provision of this Note, the Agreement, the City Deed of Trust, or the Environmental Indemnity, constitutes a default under this Note. (b) City shall give written notice of default to Buyer, specifying the default complained of by the City. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by City in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by City in asserting any of its rights and remedies shall not deprive City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. (d) If a monetary event of default occurs, prior to exercising any remedies hereunder, the City shall give the Buyer written notice of such default. The Buyer shall have a period of ten (10) days after such notice is given within which to cure the default prior to exercise of remedies by the City. (e) If a non-monetary event of default occurs, prior to exercising any remedies hereunder, City shall give Buyer notice of such default. If the default is reasonably capable of being cured within thirty(30)days, Buyer shall have such period to effect a cure prior to exercise of remedies by City. If the default is such that it is not reasonably capable of being cured within thirty (30)days, and Buyer(i) initiates corrective action within said period, and (ii)diligently, continually, and in good faith works to effect a cure as soon as possible, then Buyer shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by City. If Buyer fails to take corrective action or cure the default within a reasonable time, City shall give Buyer not to exceed 90 days, provided such limited partner is otherwise in compliance with the foregoing provisions. In no event shall City be precluded from exercising remedies if its security becomes or is about to become materially jeopardized a G:PDA:2009Drafu:Beach-Atlanta.Beach-Atlanta08 Buyer Note Draft 3 2011 01 11 by any failure to cure a default or the default is not cured within ninety(90)days after the first notice of default is given. (f) Any notice of default shall be deemed given only if either(i) dispatched by first class mail, registered or certified, postage prepaid, return receipt requested,to the addresses specified for the Buyer in Section 16 of this Note, or(ii)by electronic facsimile transmission to the facsimile numbers specified for the Buyer, followed by delivery by the method described in clause(i), or(iii)by personal delivery (including by means of professional messenger or courier service such as United Parcel Service or Federal Express)to the addresses specified for the Buyer in Section 16 of this Note. Receipt shall be deemed to have occurred on the earlier of(i)the date of successfully completed electronic facsimile transmission or(ii)the date marked on a written postal service or messenger or courier service receipt as the date of delivery or refusal of delivery(or attempted delivery if undeliverable).If either party gives notice of a change of address in the manner specified in this paragraph, all notices, demands and communications originated after receipt of the change of address(or the effective date specified in the notice of change of address, if later) shall be transmitted, delivered or sent to the new address. (g) Notwithstanding specific provisions of this Note, non-monetary performance hereunder shall not be deemed to be in default where delays are due to causes beyond the control and without the fault of the party claiming an extension of time to perform (a"Force Majeure Delay"), provided that they actually delay and interfere with the timely performance of the matter to which they would apply and despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such interference, including: war; insurrection; strikes; lock- outs; riots; floods; earthquakes; fires;casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof-, unusually severe weather; acts or failure to act of any Governmental Agency(except acts or failure to act of City shall not excuse performance by City);the imposition of any applicable moratorium by a Governmental Agency; or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing,none of the foregoing events shall constitute a Force Majeure Delay unless and until the party claiming such delay and interference delivers to the other party written notice describing the event, its cause, when and how such party obtained knowledge, the date the event commenced, and the estimated delay resulting therefrom. Any party claiming a Force Majeure Delay shall deliver such written notice within ten(10)business days after it obtains actual knowledge of the event. 12. If the rights created by this Note shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the remaining obligations must be completely performed and paid. 5 G:PDA:2009Drafts Beach-Atlanta:Beach-Atlanta08_Buyer Note Draft 3_2011_01_11 13. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Buyer and its partners. Neither the Buyer nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the Buyer Debt.The sole recourse of the City with respect to repayment of the Buyer Debt shall be the exercise of its rights against the Site and the improvements thereon and any related security for the Buyer Debt. Notwithstanding the foregoing,the City (a) may obtain a judgment or order(including,without limitation, an injunction)requiring Buyer or any other party to perform (or refrain from)specified acts other than repayment of the Buyer Debt; and (b) may recover directly from Buyer or any other party: (i) any damages,costs and expenses incurred by City as a result of fraud or any criminal act or acts of Buyer or any partner, shareholder, officer, director or employee of Buyer or of any general partner of Buyer; (ii) any damages,costs and expenses incurred by City as a result of any misappropriation of funds provided for the Project as described in the Agreement, rents and revenues from the operation of the Project, or proceeds of insurance policies or.condemnation proceeds; (iii) any and all amounts owing by Buyer pursuant to Buyer's indemnification regarding Hazardous Substances, and (iv) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 14. The address of Buyer for purposes of receiving notices pursuant to this Note is as follows: 21190 Beach Blvd., Huntington Beach, CA 92648. 15. Neither this Note nor any tern hereof may be waived, amended, discharged, modified,changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by City and Buyer. 16. Notwithstanding any provision in this Note,the City Deed of Trust or other document securing same,the total liability for payment in the nature of interest shall not exceed the limit now imposed by applicable laws of the State of California. 17. This Note has been executed and delivered by Buyer in the State of California and is to be governed and construed in accordance with the internal laws thereof. 18. Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not affect the balance of the terms and provisions hereof, which 6 GPDA2009Drafts Beach-Atlanta-Beach-Atlanta08 Buver Note Draft 32011 0111 terms and provisions shall remain binding and enforceable, and this Note shall be construed as if such illegal, invalid or unenforceable term or provision had not been contained herein. 19. Time is of the essence in the performance of each provision hereof. IN WITNESS WHEREOF, Buyer has executed this Note as of the day and year set forth above. BUYER: Beach Promenade LLC A California Limited Liability Company By: print name ITS: (circle one)Chairman/President/Vice President AND By: print name ITS: (circle one)Secretary/Chief Financial Officer/Asst. Secretary-Treasurer G PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta08 Buyer Note Draft 32011 0111 t FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator (Space Above This Line for Recorder's Office Use Only) (Exempt from Recording Fee per Gov. Code§6103 &27383) APN: DEED OF'TRUST,SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS) BY BEACH PROMENADE LLC FOR THE BENEFIT OF THE CITY OF HUNTINGTON BEACH This Deed of Trust, Security Agreement and Fixture Filing(With Assignment of Rents) is made this_day of , 20 by Beach Promenade LLC, a California Limited Liability Company(hereinafter referred to as "Trustor") (whose address is 21190 Beach Blvd., Huntington Beach, CA 92648, to First American Title Company, (hereinafter called "Trustee"), for the benefit of THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California(hereinafter called"Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648. Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION all present and future right,title and interest of Trustor in and to the following property(the"Trust Estate"): (1) All of Trustor's rights,title and interest in and to that certain real property in the City of Huntington Beach, County of Orange, State of California more particularly described in Exhibit"A"attached hereto and by this reference made a part hereof(hereafter referred to as the "Subject Property"); (2) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property(the"Improvements"); (3) all tenements, hereditaments, appurtenances, privileges, franchises and other rights and interests now or in the future benefiting or otherwise relating to the Subject Property t GPDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2 2010_11_22 or the Improvements, including easements, rights-of-way and development rights(the "Appurtenances"). (The Appurtenances,together with the Subject Property and the Improvements, are hereafter referred to as the"Real Property"); (4) subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income,revenues, royalties and profits now or in the future.payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management, operation, leasing or occupancy of the Trust Estate, including those past due and unpaid(the "Rents"); (5) all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code(the"UCC"), and whether existing now or in the future)now or in the future located at,upon or about, or affixed or attached to or installed in,the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings; machinery, appliances,building materials and supplies, generators,boilers, furnaces,water tanks, heating ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property, but not including personal property that is donated to Trustor(the"Goods,"and together with the Real Property, the"Property"); and (6) all accounts,general intangibles, chattel paper, deposit accounts,money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership,use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the property or any other part of the Trust Estate, including(to the extent applicable to the Property or any other portion of the Trust Estate) (i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents,leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies,together with insurance payments and unearned insurance premiums, (vi) claims,demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation(or conveyance in lieu of condemnation)or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates,discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types on 2 GTDA:2009Drafts Beach-Atlanta:Beach-Atla=09 City Deed of Trust Draft 2 2010 11 22 intangible personal property of any kind or nature, and(ix)all supplements,modifications, amendments, renewals, extensions,proceeds, replacements and substitutions of or to any of such property(the"Intangibles"). Trustor further grants to Trustee and Beneficiary,pursuant to the UCC, a security interest in all present and future right,title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estate described above in which a security interest may be created under the UCC (collectively,the"Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a"secured party" under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9502(c) and 9604 of the UCC. FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, all of the following: (1) Due, prompt and complete observance, performance and discharge of each and every condition, obligation, covenant and agreement contained herein or contained in that certain promissory note in the original principal amount of One Million Two.Hundred Thousand Dollars ($1,200,000.00), payable as set forth in the Method of Financing, executed by Trustor(`Buyer" therein) of even date herewith(the"Buyer Note"); (2) Payment of indebtedness of the Trustor to the Beneficiary in the principal sum of One Million Two Hundred Thousand Dollars ($1,200,000.00) or so much thereof as shall be advanced, evidenced by the Buyer Note, with interest, according to the terms of the Buyer Note; (3) Payment and performance of all future advances and other obligations that the then record owner of all or part of the Property may agree to pay and/or perform(whether as principal, surety or guarantor) for the benefit of Beneficiary,when such future advance of obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; (4) The Purchase Agreement, including all Attachments thereto, and the documents and instruments executed by Trustor in connection with the Project, including the Purchase Agreement,the Buyer Note,the Assignment of Rents, the Assignment of Agreements, and the UCCI Financing Statement,all as described in the Purchase Agreement(collectively referred to as the"Secured Obligations")and all of their terms are incorporated herein by reference and this conveyance shall secure any and all extensions,amendments, modifications or renewals thereof however evidenced. Any capitalized term that is not otherwise defined in this Deed of Trust shall have the meaning ascribed to such term in the Purchase Agreement. AND TO PROTECT TIIE SECURITY OF THIS DEED OF TRUST,TRUSTOR COVENANTS AND AGREES: 3 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_2010_1122 1. That Trustor shall pay the Buyer Note at the time and in the manner provided therein,and perform the obligations of the Trustor as set forth in the Secured Obligations at the time and in the manner respectively provided therein; 2. That Trustor shall not permit or suffer the use of any of the Property for any purpose other than the uses permitted by the Secured Obligations; 3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust. Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period,the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. 4. That, subject to the prior rights, if any, of a lender whose lien is senior to this Deed of Trust("Senior Lender"), all rents, profits and income from the Trust Estate are assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period,to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations. 5. That upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice,to take possession and protect the Trust Estate and operate same and collect the rents, profits and income therefrom; 6. That Trustor will keep the Improvements insured against loss by fire and such other hazards, casualties, and contingencies as may reasonably be required in writing from time to time by the Beneficiary, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. In no event shall the amounts of coverage be less than 100 percent of the insurable value of the Property. Such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies shall be deposited with the Beneficiary; 7. To pay, at least 10 days before delinquency, any taxes and assessments affecting the Property;to pay, when due, all encumbrances, charges and liens, with interest, on the Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this Trust. Notwithstanding anything to the contrary contained in this Deed of Trust,Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Section 7. 4 G:PDAi2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed o£Trust Draft 2 2010_1 122 8. To keep the Property in good condition and repair, subject to ordinary wear and tear, casualty and condemnation, not to remove or demolish any buildings thereon;to complete or restore promptly and in good and workmanlike manner any building which may be constructed,damaged, or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor;to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon(subject to Trustor's right to contest the validity or applicability of laws or regulations);not to commit or permit waste thereof;not to commit, suffer or permit any act upon the Property in violation of law and/or covenants, conditions and/or restrictions affecting the Property; not to permit or suffer any material alteration of or addition to the Improvements without the consent of the Beneficiary; 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear; 10. Should Trustor fail to make any payment or do any act as herein provided,then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of any applicable cure period, Beneficiary or Trustee being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, purchase,contest, or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto,and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay reasonable attorney fees.Notwithstanding the foregoing, in the event of default under this Deed of Trust,the Beneficiary may also require Trustor to maintain and submit additional records. Beneficiary shall specify in writing the particular records that must be maintained and the information or reports that must be submitted; 11. Beneficiary shall have the right to pay fire and other property insurance premiums when due should Trustor fail to make any required premium payments. All such payments made by the Beneficiary shall be added to the principal sum secured hereby; 12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure at the rate specified in the Buyer Note; 13. That the funds to be advanced hereunder are to be used in accordance with the Secured Obligations and upon the failure of Trustor to keep and perform all the covenants, conditions, and agreements of said agreements,the principal sum and all arrears of interest, and other charges provided for in the Buyer Note shall at the option of the Beneficiary of this Deed 5 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2 2010_11 22 of Trust become due and payable, anything contained herein to the contrary notwithstanding; 14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the property subject to this Deed of Trust any lien or liens except as permitted by the Secured Obligations or otherwise approved by Beneficiary, and further that it will keep and maintain the Property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting,provided that Trustor shall, at Beneficiary's written request, within thirty(30) days after the filing of any claim or lien(but in any event, and without any requirement that Beneficiary must first provide a written request, prior to foreclosure)record in the Office of the Recorder of Orange County,a surety bond in an amount one-and-one-half (12)times the amount of such claim item to protect against a claim of lien,or provide such other security reasonably satisfactory to Beneficiary; 15. That any and all improvements made or about to be made upon the premises covered by the Deed of Trust, and all plans and specifications,comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office; 16. Trustor herein agrees to pay to Beneficiary or to the authorized loan servicing representative of the Beneficiary a reasonable charge for providing a statement regarding the obligation secured by this Deed of Trust as provided by Section 2954, Article 2, Chapter 2 Title 14,Division 3, of the California Civil Code. IT IS MUTUALLY AGREED THAT: 17. Should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of Senior Lender, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage. Subject to the rights of the Senior Lenders, all such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insurance affecting the Property, are hereby assigned to Beneficiary. After deducting therefrom all its expenses, including attorney's fees,the balance of the proceeds which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or 6 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_2010 11_22 damaged, shall be applied to the amount due under the Buyer Note secured hereby.No amount applied to the reduction of the principal shall relieve the Trustor from making regular payments as required by the Buyer Note.If the Buyer Note has been repaid,the remainder of the balance shall revert to the Trustor; 18. Upon default by Trustor in making any payments provided for in the Buyer Note secured hereby or in this Deed of Trust,or in performing any obligation set forth in any of the Secured Obligations, and if such default is not cured within the respective time provided therefor in Section 34 of this Deed of Trust, below,Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust,the Note and all documents evidencing expenditures secured hereby; 19. a. Prior to the repayment in full of the Buyer Debt,the Trustor shall not assign or attempt to assign the Agreement or any right therein,nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property,the Improvements, or any portion thereof or interest therein(referred to hereinafter as a"Transfer"), without prior written approval of the Beneficiary, except as otherwise permitted in the Secured Obligations. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary shall not unreasonably withhold or delay its decision regarding consent. If consent should be given, any such transfer shall be subject to this Section 19,and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. b. Any such proposed transferee shall have the qualifications and financial responsibility necessary and adequate as may be reasonably determined by the Beneficiary,to fulfill the obligations undertaken by Trustor in the Secured Obligations. Any such proposed transferee, by instrument in writing satisfactory to the Beneficiary and in form recordable among the land records of Orange County, for itself and its successors and assigns, and for the benefit of the Beneficiary shall expressly assume all of the obligations of the Trustor under the Secured Obligations, and agree to be subject to all conditions and restrictions applicable to the Trustor in this Deed of Trust. There shall be submitted to the Beneficiary for review all instruments and other legal documents proposed to effect any such transfer; and if approved by the Beneficiary its approval shall be indicated to the Trustor in writing. C. In the absence of specific written agreement by the Beneficiary,no unauthorized Transfer, or approval thereof by the Beneficiary, shall be deemed to relieve the Trustor or any other party from any obligations under the Secured Obligations. d. In the event of a Transfer prior to the time the Buyer Debt is paid in full and without the prior written consent of the Beneficiary,the net proceeds shall be paid to the 7 G:PDA:2009Drafts:Beach-Atl anta:Beach-Atianta09_City Deed of Trust.Draft 2_2010_11_22 Beneficiary to the extent necessary to pay in full the accrued interest, if any, current interest and remaining principal balance of the Buyer Debt. e. (1) As used herein, "Transfer" includes the sale, agreement to sell, transfer or conveyance of the Property,the Project, or any portion thereof or interest therein, whether voluntary, involuntary,by operation of law or otherwise,the execution of any installment land sale contract or similar instrument affecting all or a portion of the Property or Project, or the lease of all or substantially all of the Property or Project, except as provided in this Section 19 or the Secured Obligations. (2) "Transfer"shall also include the transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of any interest in Trustor,or any conversion of, Trustor to an entity form other than that of Trustor at the time of execution of the Agreement, except as set forth in the Secured Obligations. f. Beneficiary shall not unreasonably withhold,condition or delay its decision regarding approval of any matter for which its approval is required hereunder.Any disapproval shall be in writing and contain Beneficiary's reasons for disapproval. 20. After the lapse of such time as may then be required by law following the recordation of a notice of default, and notice of sale having been given as then required by law, Trustee,without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale,either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary,may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of(1)the expenses of such sale,together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale, and the actual cost_of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's deed; (3)all sums expended under the terms hereof, not then repaid, with accrued interest at the rate specified in the Buyer Note; (4)all other sums then secured hereby; and (5)the remainder, if any, to the person or persons legally entitled thereto; 21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Trust. Upon such appointment, and without conveyance to the successor trustee,the latter shall be vested with all title, powers, and 8 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2 2010_I 1_22 duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which,when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee; 22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law; 23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, including but not limited to the obligations set forth in the Agreement, and upon surrender of this Deed of Trust and any note, instrument or instruments setting forth all obligations secured hereby to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey,without warranty,the Property then held hereunder. The recitals in such reconveyance of any matters or fact shall be conclusive proof of the truthfulness thereof. To the extent permitted by law,the grantee in such reconveyance may be described as"the person or persons legally entitled thereto."Neither Beneficiary nor Trustee shall have any duty to determine the rights of persons claiming to be rightful grantees of any reconveyance. When the Property has been fully reconveyed, the last such reconveyance shall operate as a reassignment of all future rents, issues and profits of the Property to the person or persons legally entitled thereto; 24. The trust created hereby is irrevocable by Trustor; 25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary"shall include not only the original Beneficiary hereunder but also any future owner and holder including pledgees, of the Buyer Note secured hereby. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder are joint and several; 26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee. Beneficiary, at its option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property,the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law; 27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to Trustor at the address set forth on the first page of this 9 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 220101122 Deed of Trust. After Trustor gives written notice to Beneficiary that the Investor Limited Partner has been admitted to the Trustor, Beneficiary shall send to the Investor Limited Partner a copy of all notices of default and all other notices that Beneficiary sends to Trustor, at the address for the Investor Limited Partner as provided by written notice to Beneficiary by Trustor. 28. Trustor agrees at any time and from time to time upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income,renr:s, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession,together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary. 29. Reserved. 30. Trustor agrees that,except as otherwise provided in the Buyer Note, upon sale or refinancing of the property,the entire principal balance of the debt secured by this Deed of Trust, plus any accrued but unpaid interest thereon, shall at the option of Beneficiary be immediately due and payable. 31. The obligation to repay the Buyer Debt is a nonrecourse obligation of the Trustor and its partners. Neither Trustor nor any of its general or limited partners, nor any other party, shall have any personal liability for repayment of the loan. The sole recourse of Beneficiary shall be the exercise of its rights against the Property and any related security for the Buyer Debt. Notwithstanding the foregoing, Beneficiary may obtain a judgment or order(including, without limitation, an injunction)requiring Trustor or any other party to perform(or refrain from.) specified acts other than repayment of the Buyer Debt; and may recover directly from Trustor or from any other party: (a) any damages, costs and expenses incurred by Beneficiary as a result of fraud or any criminal act or acts of Trustor or any partner, shareholder, officer, director or employee of Trustor, or of any general partner of Trustor; (b) any damages, costs and expenses incurred by Beneficiary as a result of any misappropriation of funds provided for the rehabilitation of the Property as described in the Agreement, rents and revenues from the.operation of the Project, or proceeds of insurance policies or condemnation proceeds; (c) any and all amounts owing by Trustor pursuant to the indemnification regarding Hazardous Substances pursuant to the Environmental Indemnity;and (d) all court costs and attorneys' fees reasonably incurred in enforcing or collecting upon any of the foregoing exceptions. 10 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_2010_11_22 32. Notwithstanding specific provisions of this Deed of Trust, non-monetary performance hereunder shall not be deemed to be in default where delays or defaults are proximately caused by any of the following Force Majeure events, provided such event actually delays and interferes with the timely performance of the matter, and,despite the exercise of diligence and good business practices, such event is beyond the reasonable control of Trustor: War; insurrection;strikes; lock-outs;riots; floods;earthquakes; fires;casualties; acts of God;acts of the public enemy;epidemics;quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor,materials or tools; delays of any contractor,subcontractor,or suppliers; acts of the other party; acts or failure to act of any Governmental Authority(except acts or failure to act of the Beneficiary shall not excuse performance by the Beneficiary); the imposition of any applicable moratorium by a Governmental Authority;or any other causes which despite the exercise of diligence and good business practices are or would be beyond the reasonable control of the party claiming such delay and interference. Notwithstanding the foregoing, none of the foregoing events shall constitute a Force Majeure Event unless and until Trustor delivers to Beneficiary written notice describing the event, its cause, when and how Trustor obtained knowledge,the date the event commenced, and the estimated delay resulting therefrom. Trustor shall deliver such written notice within ten(10)business days after it obtains actual knowledge of the event. 33. If the rights and liens created by this Deed of Trust shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the Secured Obligations, the unsecured portion of such obligations shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations. 34. (a) Subject to the extensions of time set forth in Section 32, and subject to the further provisions of this Section 34, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or this Deed of Trust constitutes a default under this Deed of Trust. (b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the Beneficiary. Failure or delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default. (c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies. 11 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2 2010_11 22 (d) If a monetary event of default occurs, prior to exercising any remedies hereunder,Beneficiary shall give Trustor written notice of such default. Trustor shall have a period of seven(7)days after such notice is given within which to cure the default prior to exercise of remedies by Beneficiary. (e) If a non-monetary event of default occurs,prior to exercising any remedies hereunder,Beneficiary shall give Trustor notice of such default. If the default is reasonably capable of being cured within thirty(30) days,Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary. If the default is such that it is not reasonably capable of being cured within thirty(30)days, and Trustor(i) initiates corrective action within said period, and(ii)diligently, continually, and in good faith works to effect a cure as soon as possible,then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. (f) Except as otherwise required to comply with the provisions of California Civil Code Section 2924 et seq. that are applicable thereto, any notice of default that is transmitted by electronic facsimile transmission followed by delivery of a"hard"copy, shall be deemed delivered upon its transmission; any notice of default that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt by Trustor;and any notice of default that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. REST OF PAGE INTENTIONALLY LEFT BLANK 12 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_2010_11_22 IN WITNESS WHEREOF Trustor has executed this Deed of Trust as of the day and year set forth above. "TRUSTOR" Beach Promenade LLC By: print name ITS: (circle one)Chairman/PresidentfVice President AND By: print name ITS: (circle one)Secretary/Chief Financial Officer/Asst. Secretary-Treasurer APPROVE BY: THE CI OF TINGTON BEACH, a J—ni,—in-A orpo on of the State of California ayor ity erk cz D AS TO FORM: � L 3 mole /,/City Attorney INITIATED AND AP ROVE Director of Economic Deve opment REVIE D APPROVED: ity Administrator 13 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_2010_11_22 State of California ) County of Orange ) On /.3 - ,ap// before me,� a Notary Public, personally appeared / - AyA, who proved to -me on the basis of satisfactory evidence to be the persor}�s whose nameos if4ar subscribed to the within instrument and acknowledged to me that holsh executed the same in-4Ls44e their authorized capacity es and that by h' er signature son the instrument the perso (s or the entity upon behalf of which the persona acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L.ESPARZA WITNESS my hand and official seal. Commission 1357021 Notary Public-California z Orange County Signature (Seal) M Comm.Ex Irgs Au 4,2013 0 State of California ) County of Orange ) On before me, , a Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) 14 G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlanta09_City Deed of Trust Draft 2_201011_22 EXHIBIT A TO BE INSERTED EXHIBIT 10 ENVIRONMENTAL INDEMNITY IN FAVOR OF THE CITY OF HUNTINGTON BEACH THIS ENVIRONMENTAL INDEMNITY(this"Indemnity"), dated 2010, and made by Beach-Promenade LCC,a California limited liability company(referred to as"Buyer"),whose address for purposes of giving notices is 21190 Beach Blvd., Huntington Beach, CA 92648, in favor of THE CITY OF HUNTINGTON BEACH(the "City"), whose address for purposes of giving notice is 2000 Main Street, Huntington Beach, California 92648. WITNESSETH WHEREAS, Buyer has agreed to acquire the real property in the City of Huntington Beach described on Exhibit "A" attached hereto and made a part hereof, and the improvements thereon(collectively referred to as the "Property"); WHEREAS, Buyer and the City, entered into that certain Purchase Agreement, dated ,/re.. 06, 20/0 (the "Agreement"), pursuant to which the City agreed to sell to Buyer for the purpose of expanding an existing shopping center (the "Project") (the Agreement and the documents and instruments referred to therein which are being executed by Buyer concurrently herewith are referred to collectively as the"Purchase Documents"); WHEREAS, Buyer has agreed to acquire the Property in an "As-Is" condition, and execute and deliver to the City this Indemnity to induce the City to make the Sale; NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual agreements hereinafter set forth, Buyer hereby agrees with City as follows: I. DEFINITIONS For the purpose of this Indemnity, "Hazardous Materials" or "Hazardous Substances" shall include, but not be limited to, oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances defined as "extremely hazardous substances," "hazardous substances," "hazardous materials," "hazardous waste" or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, including the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Sections 6901, et sea.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seg.; the Federal Water Pollution Control Act, as emended, 33 U.S.C. Section 1251 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency 1 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Draft 1.2 from City_2010_1123 Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et sea.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et sea.; and those substances defined as "hazardous waste" in Section 25117 of the California Health and Safety Code, as "infectious waste" in Section 25117.5 of the California Health and Safety Code, or as "hazardous substances" in Section 25316 of the California Health and Safety Code or"hazardous materials" as defined in Section 353 of the California Vehicle Code; and in the regulations adopted and orders and publications promulgated pursuant to said laws. Other capitalized terms used in this Indemnity shall have the meanings ascribed to them in the Housing Agreement with the same force and effect as if set forth in full below. 2. COVENANTS AND INDEMNITY The following covenants, and indemnities are hereby given and made by Buyer: 2.1 Covenants. (a) Buyer covenants that it will strictly comply with any and all laws, regulations, and/or orders which may be promulgated from time to time relating to Hazardous Materials ("Hazardous Materials Laws"), to immediately take, at Buyer's sole expense, all remedial action required by any Hazardous Materials Law or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claim (as defined herein below), and to keep the Property free of any lien imposed pursuant to any Hazardous Materials Law or in relation to any Hazardous Materials Claim. (b) Buyer covenants that the Property will not, while Buyer is the owner of any portion thereof, be used for any activities involving, directly or indirectly, the use, generation, treatment, storage, release, transportation, presence, discharge or disposal of any Hazardous Materials, except for de minimis quantities used at the Property in strict compliance with all Hazardous Materials Laws and required in connection with the routine rehabilitation, operation and maintenance of the Property. (c) City shall have the right, at any time, to conduct an environmental audit of the Property at City's expense, unless Hazardous Materials are found in violation of this Indemnity, then at Buyer's sole cost and expense, and Buyer shall reasonably cooperate in the conduct of any such environmental audit. Other than in an emergency, such audit shall be conducted only after prior written notice has been given to Buyer and only in the presence of a representative of Buyer. Buyer shall give the City and its agents and employees access to the Property to remove, or otherwise to mitigate the effects of, Hazardous Materials and Buyer shall not unreasonably delay or condition such access. (d) Buyer shall not install, or permit to be installed, on the Property friable asbestos or any substance containing asbestos and deemed hazardous by any Hazardous Materials Laws, and, with respect to any such material currently present in or brought onto the Property after Buyer acquired the Property, Buyer shall promptly either(i) remove or cause to be removed any material that such Hazardous Materials Laws deem hazardous and require to be removed, or (ii) otherwise comply with such Hazardous Materials Laws, all at Buyer's sole cost 2 G:PDA2009Draft:Beach-Atlanta:Beach-Atlanta I 0_Environmental Indemnity Draft 1.2 from City_2010_1 l_23 and expense. If Buyer shall fail to so do within the cure period permitted under applicable law, regulation, or order, the City may do whatever is necessary to eliminate said substances from the premises or to otherwise comply with all Hazardous Materials Laws, and the costs thereof shall be added to the Obligations(as hereinafter defined)of Buyer under this Section 2. (f) Buyer shall immediately advise the City in writing of any of the following: (i) any pending or threatened claim against Buyer or the Property by any governmental entity or agency or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws ("Hazardous Materials Claims"), (ii) any condition or occurrence on the Property that(A) results in noncompliance by Buyer with any Hazardous Materials.Laws, (B) could reasonably be anticipated to cause the Property to be subject to any restrictions on the ownership, occupancy, use or transferability of the Property under any Hazardous Materials Law, or (C) could reasonably be anticipated to form the basis of a Hazardous Materials Claim against the Property or Buyer. 2.2 Indemnity. Buyer hereby agrees to defend, indemnify, protect, and hold harmless the City and its respective members, officers, officials, employees, agents, representatives, servants, contractors, successors and assigns from and against any and all damages, losses, liabilities, obligations, penalties, claims (including, without limitation, any third party tort claims), litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, or expenses (including, without limitation, attorneys' and experts' fees and disbursements) of any kind or of any nature whatsoever, whether foreseeable or unforeseeable, (collectively, the "Obligations") which may at any time be imposed upon, incurred by or asserted or awarded against the City as a direct or indirect consequence of: (a) The presence,of any Hazardous Materials on, in, under, or affecting all or any portion of the Property or any surrounding areas, which were stored, discharged, released or emitted after the Close of Escrow conveying the Property from the City to Buyer; (b) The breach of any covenant made by Buyer in Section 2.1 hereof; or (c) The enforcement by the City of any of the provisions of this Section 2.2 or the assertion by Buyer of any defense to its obligations hereunder. 3. BUYER'S UNCONDITIONAL OBLIGATIONS 3.1 Unconditional Obligations. Buyer hereby agrees that the Obligations will be paid and performed strictly in accordance with the terms of this Indemnity, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of the Purchase Documents or affecting any of the rights of the City with respect thereto. The obligations of Buyer hereunder shall be absolute and unconditional irrespective of, and Buyer waives any defense based upon, (a) The validity, regularity, or enforceability of the Purchase Documents or any other instrument or document executed or delivered in connection therewith; 3 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlanta10_Environmental Indemnity Draft 1.2 from City_2010_1 1_23 (b) Any alteration, amendment, modification, release, termination, or cancellation of any of the Purchase Documents, or any change in the time, manner, or place of payment of, or in any other term in respect of, all or any of the obligations of Buyer contained in any of the Purchase Documents; (c) Any extension of the maturity of or any waiver of, or consent to any departure from, any provision contained in any of the Purchase Documents; (d) Any exculpatory provision in any of the Purchase Documents limiting the City's recourse to property encumbered by the Deed of Trust securing the Property. (e) Any exchange, addition, subordination, or release of, or nonperfection of any lien on or security interest in, any collateral for the Buyer Debt, or any release, amendment, waiver of, or consent to any departure from any provision of, any other surety or guarantee given in respect of the Buyer Debt; (f) The insolvency or bankruptcy of Buyer or of any indemnitor or guarantor under any other indemnity or guarantee given in respect of the Buyer Debt; or (g) Any other circumstance that might otherwise constitute a defense available to, or a discharge of Buyer, Buyer's General Partners, or any other indemnitor or guarantor with respect to the Buyer Debt or any or all of the Obligations. 3.2 Continuation. The term of this Indemnity shall commence upon close of escrow and shall continue until such time as no legal action can be successfully brought against City due to applicable statutes of limitation. This Indemnity (a) is a continuing indemnity and shall remain in full force and effect until the satisfaction in full of all of the Obligations (notwithstanding the payment in full of the Loan or the release or other extinguishment of the Deed of Trust, or any other security for the Loan); and (b) shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the City upon the insolvency, bankruptcy, or reorganization of Borrower, Borrower's General Partners or otherwise, all as though such payment had not been made. 3.3 Survival. Borrower's duty to indemnify shall survive any judicial or non judicial foreclosure under the City Deed of Trust or transfer of the Property in lieu thereof, the release and reconveyance or cancellation of the City Deed of Trust, and the satisfaction of all of Borrower's obligations under the Loan Documents; provided, however, that the City shall only have the right to enforce this Indemnity after any such transfer, reconveyance or foreclosure, with respect to Hazardous Materials,present on the Property before the date of the transfer, reconveyance or foreclosure. 4 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Draft 1.2 from City_2010_11 23 4. WAIVER Buyer acknowledges that possible defenses to the enforceability of the Obligations may presently exist and/or may arise hereafter and as part of the City's consideration for entering into the Agreement. It has specifically bargained for the waiver and relinquishment by Buyer of all such defenses. Buyer agrees that it has had the opportunity to seek and receive legal advice from skilled legal counsel of its choosing.and represents and confirms that Buyer is fully informed regarding, and thoroughly understands, the nature of such possible defenses, the circumstances under which they may arise, the benefits that they might confer upon Buyer and the legal consequences to Buyer of waiving such defenses. Buyer makes this Indemnity with the intent that this Indemnity shall be fully enforceable by the City and that the City is induced to enter into the Agreement in material reliance upon such presumed full enforceability. Nothing herein contained shall be deemed to prohibit Buyer from contesting, in good faith, the validity of any Hazardous Materials Claims or from asserting that Buyer is not in breach of its obligations under this Indemnity. 5. NOTICES Any notice, demand, statement, request, or consent made hereunder shall be in writing and shall be personally served, mailed by first-class registered mail, return receipt requested, to the address set forth in the first paragraph of this Indemnity, above, or given by electronic facsimile ("fax") transmission to the fax numbers stated below, with confirmations mailed by first class registered mail, return receipt requested to the address set forth above, of the party to whom such notice is to be given (or to such other address as the parties hereto, shall designate in writing): In the case of the City: 714-374-1590 In the case of Buyer: 714-374-2211 Any notice that is transmitted by fax transmission followed by delivery of a"hard"copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. 6. MISCELLANEOUS 6.1 Buyer shall make any payment required to be made hereunder in lawful money of the United States of America, and in same day funds, to City, as applicable, at its address specified in the first paragraph hereof. 6.2 No amendment of any provision of this Indemnity shall be effective unless it is in writing and signed by Buyer and City, and no waiver of any provision of this Indemnity, and no consent to any departure by Buyer from any provision of this Indemnity, shall be effective unless 5 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlanta 10_Environmental Indemnity Draft 1.2 from City_2010_I t 23 it is in writing and signed by the City, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 6.3 No failure on the part of City to exercise, and no delay in exercising, any right hereunder or under any Purchase Document shall operate as a waiver hereof or thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of City provided herein and in the Purchase Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of City hereunder the Agreement against any party thereto are not conditional or contingent on any attempt by the City to exercise any of its rights hereunder or under the Agreement against such party or against any other person or collateral. 6.4 If any provision of this Indemnity shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, then that provision shall, as to such jurisdiction, be deemed ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction. 6.5 This Indemnity shall (a) be binding upon Buyer, and Buyer's successors and assigns; and (b) inure, together with all rights and remedies of City hereunder, to the benefit of City, their respective directors, officers, employees, and agents, any successors to the City's interest in the Property, any other person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of the City's rights and remedies under the Agreement, any successors to any such person, and all directors, officers, employees, and agents of all of the aforementioned parties. 6.6 Buyer hereby (a) irrevocably submits to the jurisdiction of any California or federal court sitting, in each instance, in Orange County in any action or proceeding arising out of or relating to this Indemnity, (b) waives any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines, and (c) irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such California or federal court. Buyer irrevocably consents to the service of any and all process which may be required or permitted in any such action or proceeding to the address specified in the first paragraph of this Indemnity or in any other manner provided by law. Buyer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. 6.7 The title of this document and the captions used herein are inserted only as a matter of convenience and for reference and shall in no way define, limit, or describe the scope or the intent of this Indemnity or any of the provisions hereof. 6.8 This Indemnity shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California applicable to contracts made and to be performed therein, except to the extent that the laws of the United States preempt the laws of the State of California. 6 GTDA:2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Draft 1.2 from City_2010_11 23 6.9 This Indemnity may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one agreement. BUYER: BEACH PROMENADE LLC A California limited liability company By: Its: By: Its: 7 G PDA2009Draft:Beach-Atlanta:Beach-Atlantal0_Environmental Indemnity Draft 1.2 from City_2010_11_23 EXHIBIT A LEGAL DESCRIPTION 8 G:PDA:2009Draft:Beach-Atlanta:Beach-Atlanta I 0_Environmental Indemnity Draft 1 2 from City_2010_11_23 Exhibit A SHEET10F1 THOSE CERTAIN LANDS LOCATED 1N THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH,COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY.LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580, NORTH 89°37'06"EAST, 89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39"WEST, 133.85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, THROUGH A CENTRAL ANGLE OF 9°10'25",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,NORTH 00"40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE,SOUTH 89°37'06"WEST,88.00 FEET TO THE EAST LINE,OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00`40'14"EAST,818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 09-50-39" EAST,206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. o LAnD sG� U O EW. 12-31-11 JOSEPH G.DERLETH L.S 7340 PLS 7340, EXPIRES 12/31/11 9lF OF CAL�4�f� Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE ®�� iff CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM PER PM 94-590 (N89-37'06"E)_i_-_ ATLANTA AVE PARCEL 2, PM 84-590,- ---� 8, 202/48-50 PM 81 ( 44r 40% P _ 1 W'LY LINE SEC 13� { T6S, R11 W, SBM n , - �= I z m 110, z p RECORD PER PARCEL MAP m ( 8 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,------; INCLUSIVE OF PARCEL MAPS 202/48-50 PM l ( �=PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, 11 fl' ( RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF ( PARCEL 1, STATE HIGHWAY MAP Q ( BOOK 5, PAGES 45 AND 46. o I 90,340 SQ FT, (2.07 ACRES) o � EXHIBIT PARCEL 2, PM 84-590---}- 202/48-50 PM 8'-1 6;=` SHEET 1 OF 3 ( 8' { ( �150 GRAPHIC SCALE 1 1 inch =150 ft. N'LY LINE I o 7$ Asa ' ( PARCEL 1 ( PM 84-590 ' 202/48-50 PM ( IN FEET ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS ATLANTA AVE GRAPHIC SCALE �/-(N8937'06"E) �22' 1 inch =50 It. 50 0 2s 50 (1\,NWLY COR SEC 13 mill T6S, R11 W, SBM a g PER PM 84-590 { IN FEET } ( ) = RECORD PER PARCEL MAP I 84-590, FILED IN BOOK 202, m E'LY LINE, PARCEL 1 PAGES 48 THROUGH 50 PER STATE HWY MAP INCLUSIVE OF PARCEL MAPS. o_o BOOK 5, PAGES 41 j (( )) RECORD PER PER STATE I � AND 42. HIGHWAY MAP FILED IN BOOK c' 5, PAGES 45 AND 46. ------58' 22' � 6:':6 ' ®= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A EXHIENT PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. SHEET 2 OF 3 i LINE TABLE: L1= N89'37'06"E, 89.21' (( I£ L2= N00'40'14"W, 730.41' 1 C PARCEL 2, PM 84- 90, 5 rn 202/48-50 PM! di 0 C�Q o [--W LY LINE SEC 13 to : T6S, R11 W, SBM '� o POINT OF C71 NE COR PARCEL m�" o P - 1, PM 84--590, v BEGINNING, SElol 202/48-50 PM COR PARCEL 2, 8' - fm o PM 84-590, 202/48-50 PM 8' (88.00') (54.91') L1 { N'LY LINE PARCEL 11 PM 84-590 (N89.37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 503 SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS J GRAPHIC SCALE 1 inch =50 ft N'LY LINE SEC 13 50 0 25 50 T6S, R11 W, S.B.M. � m ATLAIVTA AVE � IN FEET ) (N89'37'06"E) _ NW'LY COR SEC 13 30' T6S, R11 W, SBM 5)' 50' � PER PM 84-590 L3 { ) = RECORD PER PARCEL MAP 44�r4-' 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' 8' 22' PARCEL 2, o PM 84-590, 202/48-50 PM , a = PORTION OF STATE HIGHWAY o a' RELINQUISHMENT NUMBER I o X I 632, RECORDED 2/26/68, IN SHEET 3 OF 3 8526/461 O.R., ALSO BEING C4 A PORTION OF PARCEL 1, ! STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. °0 LINE TABLE: L3= S8937'06"W, 88.00' 4 W'LY LINE SEC 13 1 E'LY LINE, PARCEL 1 z T6S, R11 W, SBM PER STATE WY MAP M o , BOOK 5, PAGES 41 '< > o ! PARCEL 2, AND 42. C) C) i PM 84-590, g 202/48-50 PM -103 �22' � ® 00Ir ! EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS DFaRA BowE T 1 SECRETARY OF STATE I STATE OF CALIFORNIA BUSINESS PROGRAMS I UNIFORM COMMERCIAL CODE i5oo uth Sheeetl Sacramento,CA 95814lP.O.Box 9428351 Sacramento,CA 94235-00011(9i6)653 35i6l www sos€a.gov January 4, 2010 REDACTION OF SOCIAL SECURITY NUMBERS In order to protect personal privacy and in compliance with California Uniform Commercial Code (UCC) section 9526.5, the Secretary of State's office (SOS) has removed ("redacted") social security numbers, if provided, from,all UCC records filed prior to December 31, 2007. In addition, the SOS commenced redacting any social security number provided on a record filed on paper after January 1, 2008. For each UCC record that is redacted, the SOS maintains the original un-redacted official filing image and creates a redacted public filing image, which is available for UCC information requests. The un-redacted official filing image only is available to the public pursuant to a subpoena or an order from a court of competent jurisdiction. In the event that the SOS misses redacting a social security number from a UCC record, any person may notify the SOS and specify the file or document number of the record and the location of the social security number within the record, and the SOS will create a redacted public filing image of the record within 10 business days from the date of notification. In addition, the SOS has made a filing form available pursuant to UCC section 9521 that removes the space identified for the disclosure of the social security number of an individual. These UCC filing forms can be obtained by visiting the California Business Portal at www.sos.ca.gov and clicking on the Forms & Fees link. UCC filings are public records. Please do not put people at risk of identity theft by including social security numbers on any documents for filing with the Secretary of State. For more information on identity theft, you may want to visit the California Office of Privacy Protection's website at www.privacy.ca.gov/ or review its consumer information on social security number privacy available at http://www.privacy.ca.gov/ssn.htm. SSN Notice (rev. 01/2010) Instructions for National UCC Financing Statement(Form UCC1) Please type or laser-print this form. Be sure it is completely legible. Read all Instructions,especially Instruction 1; correct Debtor name is crucial. Follow Instructions completely. Fill in form very carefully;mistakes may have important legal consequences. If you have questions,consult your attorney.The filing office cannot give legal advice. Do not insert anything in the open space in the upper portion of this form;it is reserved for filing office use. When properly completed,send Filing Office Copy,with required fee,to filing office.If you want an acknowledgment,complete item B and,if filing in a filing office that returns an aclviowledgment copy furnished by filer,you may also send Acknowledgment Copy;otherwise detach.If you want to make a search request,complete item 7(after reading Instruction 7 below)and send Search Report Copy,otherwise detach.Always detach Debtor and Secured Party Copies. If you need to use attachments,use 8-1/2 X 11 inch sheets and put at the top of each sheet the name of the first Debtor,formatted exactly as it appears in item 1 of this form;you are encouraged to use Addendum(Form UCC1 Ad). A.To assist filing offices that might wish to communicate with filer,filer may provide information in item A.This item is optional. B. Complete item B if you want an acknowledgment sent to you.If filing in a filing office that returns an acknowledgment copy furnished by filer, present simultaneously with this form a carbon or other copy ofthis form for use as an acknowledgment copy. 1. Debtor name:Enter only one Debtor name in item 1,an organizaton's 2. If an additional Debtor is included, complete item 2, determined and name(1 a)or an individuars name(1 b).Enter Debtor's exact full legal formatted per Instruction 1.To include further additional Debtors,or one name.Don't abbreviate. or more additional Secured Parties, attach either Addendum (Form UCC1 Ad)or other additional page(s),using correct name format.Follow la. Organization Debtor.."Organization" means an entity having a legal Instruction 1 for determining and formatting additional names. identity separate from its owner.A partnership is an organization;a sole proprietorship is not an organization,even if it does business under a 3. Enter information for Secured Party or Total Assignee,determined and trade name. If Debtor is a partnership,enter exact full legal name of formatted per Instruction 1.If there is more than one Segued Party,see partnership; you need not enter names of partners as additional Instruction 2. If there has been a total assignment of the Secured Debtors.If Debtor is a registered organization(e.g.,corporation,limited Party's interest prior to filing this form,you may either(1)enter Assignor partnership, limited liability company), it is advisable to examine S/P's name and address in item 3 and file an Amendment(Form UCC3) Debtor's current filed charter documents to determine Debtor's correct [see item 5 of that form]; or (2) enter Total Assignee's name and name,organization type,and jurisdiction of organization. address in item 3 and, if you wish, also attaching Addendum(Form UCC1 Ad)giving Assignor S/P's name and address in item 12. 1b. Individual Debtor. "Individual'means a natural person;this includes a sole proprietorship,whether or not operating under a trade name.Don't 4. Use item 4 to indicate the collateral covered by this Financing use prefixes(Mr.,Mrs.,Ms.).Use suffix box only for titles of lineage(Jr., Statement If space in item 4 is insufficient, put the entire collateral Sr., III) and not for other suffixes or titles (e.g., M.D.). Use married description or continuation of the collateral description on either woman's personal name (Mary Smith, not Mrs. John Smith). Enter Addendum(Forth UCC1 Ad)or other attached additional page(s). individual Debtor's family name(sumame)in Last Name box,first given name in First Name box,and all additional given names in Middle Name 5. If filer desires (at filer's option) to use titles of lessee and lessor, or box. consignee and consignor,or seller and buyer(in the case of accounts For both organization and individual Debtors:Don't use Debtor's trade or chattel paper), or bailee and bailor instead of Debtor and Secured name,DBA,AKA,FKA,Division name,etc.in place of or combined with Party,check the appropriate box in item 5.If this is an agricultural lien Debtor's legal name; you may add such other names as additional (as defined in applicable Commercial Code)filing or is otherwise not a Debtors if you wish(but this is neither required nor recommended). UCC security interest.filing (e.g., a tax lien,judgment lien,etc.),check the appropriate box in item 5, complete items 1-7 as applicable and 1 c. An address is always required for the Debtor named in la or 1 b. attach any offer items required under other law. 1d. This field has been removed pursuant to California Uniform 6. If this Financing Statement is filed as a fixture filing or if the collateral Commercial Code,Section 9526.5. consists of timber to be cut or as-extracted collateral,complete items 1- 5,check the box in item 6,and complete the required information(items 1 e,f,g.`Add'dional information re organization Debtor"is always required.Type 13,14 and/or 15)on Addendum(Form UCC1 Ad). of organization and jurisdiction of organization as well as Debtor's exact legal name can be determined from Debtor's current filed charter 7. This item is optional.Check appropriate box in item 7 to request Search documerd.Organizational ID#,if any,is assigned by the agency where Report(s) on all or some of the Debtors named in this Financing the charter document was filed;this is different from tax ID#;this should Statement The Report will list all Financng Statements on file against be entered preceded by the 2-character U.S. Postal identification of the designated Debtor on the date of the Report, including this state of organization if one of the United States(e.g.,CA12345,for a Financing Statement.There is an additional fee for each Report.If you California corporation whose organizational ID#is 12345); if agency have checked a box in item 7,file Search Report Copy together with does not assign organizational ID#, check box in item 1g indicating Filing Officer Copy(and Acknowledgment Copy).Note:Not all states do "none! searches and not all states will honor a search request made via this form;some states require a separate request form. Note: If Debtor is a trust or a trustee acting with respect to property held in trust,enter Debtor's name in item 1 and attach Addendum(Form UCC1Ad) 8. This item is optional and is for filer's use only.For filer's convenience of and check appropriate box in item 17.If Debtor is a decedents estate,enter reference, filer may enter in item 8 any identifying information (e.g., name of deceased individual in item lb and attach Addendum (Form Secured Party's loan number, law firm file number, Debtor's name or UCC1Ad) and check appropriate box in item 17.If Debtor is a transmitting other identification,state in which form is being filed,etc.)that filer may utility or this Financing Statement is filed in connection with a Manufactured- find useful. Home Transaction or a Public-Finance Transaction as defined in applicable Commercial Code,attach Addendum(Form UCC1 Ad)and check appropriate box in item 18. Instructions for National UCC Financing Statement Addendum (Form UCC1Ad) 9. Insert name of first Debtor shown on Financing Statement to which this Addendum is related,exactly as shown in item 1 of Financing Statement. 10. Miscellaneous:Under certain circumstances,additional information not provided on Financing Statement may be required.Also,some states have non-uniform requirements. Use this space to provide such additional information or to comply with such requirements;otherwise,leave blank. 11. If this Addendum adds an additional Debtor,complete item 11 in accordance with Instruction 1 on Financing Statement.To add more than one additional Debtor,either use an additional Addendum form for each additional Debtor or replicate for each additional Debtor the formatting of Financing Statement item 1 on an 8-1/2 X 11 inch sheet(showing at the top of the sheet the name of the first Debtor shown on the Financing Statement),and in either case give complete information for each additional Debtor in accordance with Instruction 1.on Financing Statement. All additional Debtor information, especially the name,must be presented in properformat exactly identical to the format of item 1 of Financing Statement. 12. If this Addendum adds an additional Secured Party,complete item 12 in accordance with Instruction 3 on Financing Statement. in the case of a total assignment of the Secured Parry's interest before the filing of this Financing Statement,if filer has given the name and address of the Total Assignee in item 3 of the Financing Statement,filer may give the Assignor S/P's name and address in item 12. 13-15. If collateral is timber to be cut or as-extracted collateral,or if this Financing Statement is filed as a fixture filing,check appropriate box in item 13;provide description of real estate in item 14;and,if Debtor is not a record owner of the described real estate,also provide,in item 15,the name and address of a record owner.Also provide collateral description in item 4 of Financing Statement.Also check box 6 on Financing Statement. Description of real estate must be sufficient under the applicable law of the jurisdiction where the real estate is located. 16. Use this space to provide continued description of collateral,if you cannot complete description in item 4 of Financing Statement. 17. If Debtor is a trust or a trustee acting with respect to property held in trust or is a decedent's estate,check the appropriate box. 18. If Debtor is a transmitting utility or if the Financing Statement relates to a Manufactured-Home Transaction or a Public-Finance Transaction as defined in the applicable Commercial Code,check the appropriate box. UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS Lfront and back CAREFULLY A.NAME&PHONE OF CONTACT AT FILER[optional] B.SEND ACKNOWLEDGEMENT TO: (Name and Address) F LTHE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1.DEBTOR'S EXACT FULL LEGAL NAME—insert only one debtor name(1 a or 1 b)—do not abbreviate or combine names la.ORGANIZATOON'S NAME OR 1b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME - SUFFIX 1c.MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY ADD'L INFO RE :1e.TYPE OF ORGANIZATION :1f.JURISDICTION OF ORGANIZATION tg.ORGANIZATIONAL ID#,if any ORGANIZATION ' DEBTOR a ❑NONE 2.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME—insert only one debtor name(2a or 2b)—do not abbreviate or combine names 2a.ORGANIZATOONAS NAME OR 2b.INDIVIDUAL'S LAST NAME FIRST NAME - MIDDLE NAME SUFFIX 2c.MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY ADD'L INFO RE ;2e.TYPE OF ORGANIZATION :2f.JURISDICTION OF ORGANIZATION i2g.ORGANIZATIONAL ID#,if any ORGANIZATION DEBTOR - ❑NONE 3.SECURED PARTY'S NAME(or NAME of TOTAL ASSIGNEE of ASSIGNOR SIP)—insert only one secured party name(3a or 3b) 3a.ORGANIZATOONAS NAME OR 3b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c.MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY 4.This FINANCING STATEMENT covers the following collateral: 5.ALTERNATIVE DESIGNATION[if applicable]:❑LESSEE/LESSOR ❑CONSIGNEE/CONSIGNOR ❑BAILEE/BAILOR ❑SELLER/BUYER []AG.LIEN ❑NON-UCC FILING 6. ❑ This FINANCING STATEMENT is to be filed[for record](or recorded)in 7.Check to REQUEST SEARCH REPORT(S)on Debtor(s) ❑All Debtors ❑Debtor 1 ❑Debtor 2 the REAL ESTATE RECORDS. Attach Addendum [if applicable] [ADDITIONAL FEE] [optional] 8.OPTIONAL FILER REFERENCE DATA FILING OFFICE COPY—NATIONAL UCC FINANCING STATEMENT(FORM UCC1)—CALIFORNIA(REV.01/01/08) UCC FINANCING STATEMENT ADDENDUM FOLLOW INSTRUCTIONS(front and back)CAREFULLY 9.NAME OF FIRST DEBTOR(1a or 1b)ON RELATED FINANCING STATEMENT 9a.ORGANIZATION NAME OR 9b.INDIVIDUALS LAST NAME 7ME— MIDDLE NAME,SUFFIX 10.MISCELLANEOUS: THE ABOVE SPACE IS FOR FILING OFFICE USE.ONLY 11.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME—insert only one name(11 a or 11b)—do not abbreviate or combine names 11 a.ORGANIZATION'S NAME OR 11b.INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME SUFFIX - 11 c.MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY ADD'LINFO RE ;11e.TYPE OF ORGANIZATION ;11f.JURISDICTION OF ORGANIZATION ;11g.ORGANIZATIONAL ID#,if any ORGANIZATION DEBTOR ❑NONE W12.. ADDIWTIONALCURED PARTY'S or ASSIGNOR S/P'S NAME—insert only one name(12a or 12b) 12a.ORGANIZATION'S NAME - OR 12b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 12c.MAILING ADDRESS CITY STATE 1POSTALCODE COUNTRY 13.This FINANCING STATEMENT covers❑timber to be cut or❑as-extracted 16.Additional collateral description: collateral,or is filed as a❑fixture filing. 14.Description of real estate: - 15.Name and address of a RECORD OWNER of above-described real estate (if Debtor does not have a record interest): 17.Check only if applicable and check only one box. Debtor is a❑Trust or❑Trustee acting with respect to property held in trust or®Decedent's Estate 18-Check only if applicable and check only one box. ❑Debtor is a TRANSMITTING UTILITY ❑Filed in connection with a Manufactured-Home Transaction—effective 30 years ❑Filed in connection with a Public-Finance Transaction—effective 30 years FILING OFFICE COPY—NATIONAL UCC FINANCING STATEMENT ADDENDUM(FORM UCC1Ad)—CALIFORNIA(REV.01101108) EXHIBIT 12 CONDITION OF THE PROPERTY The Property was acquired by the City several decades ago. It was formerly owned by the St of California, Department of Transportation (Caltrans). The Property was previously used R roadway and public right of way purposes. The Huntington Beach Fire Department has identified two existing oil wells on the Property (Surf 41-6, Surf#2)that do not meet the 1989, present, or 2010 new Division of Oil and Gas abandonment standards. For this reason both wells will have to be vented with an approved system. A vertical riser will have to be installed. The Huntington Beach Fire Department recommends that no structures be built or placed over either of the abandoned oil wells. If any of the wells are to be covered by a structure, it may require re-abandonment under current 2010 Division of Oil and Gas standards, and may also require an approved vent system post 2010 abandonment standards. If the structure is to be public, or multi-family,a 24-hour continuous methane monitoring system should be installed. In addition to the existing oil wells, there is an existing 8-inch water main along the eastern edge of the current frontage road, over which the City has reserved and recorded a 10'wide easement in preparation for the conveyance of the property.There is a 3-inch gas main along the western edge of the frontage road that is subject to a relocation agreement between the Buyer and the Southern California Gas Company. The City is unaware of any other issues with the Property, and it is sold to Buyer in"As-Is" condition. QPDA:Beach-Atlanta:Beach-Atlanta12_Condition Of The Property Draft 2 2010_11_19 EXHIBIT 13 ASSIGNMENT OF AGREEMENTS ASSIGNMENT AGREEMENT FROM BEACH PROMENADE LLC TO THE CITY OF HUNTINGTON BEACH This ASSIGNMENT AGREEMENT is made this day of 20 , by and between BEACH PROMENADE LLC,a California Limited Liability Company, hereinafter referred to as"Assignor,"and the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to"City or Assignee." RECITALS WHEREAS,oncCE/h FJ O6 , 20/O, Assignor entered into a Purchase Agreement with the City, whereby City agreed to sell, and Assignor agreed to buy, certain real property(the "Property") owned by Assignee; and As a condition of sale, and in order to secure Assignor's obligations under the Purchase Agreement, Assignor has agreed to assign to City all of its rights, title and interest in all work _ product prepared by Assignor related to the purchase of the Property, including but not limited to all Plans, construction documents, soils tests and similar reports, permits and other entitlements relating to the Property, the contracts(if any)between Assignor and its architect and between Assignor and its general contractor, and all similar rights and property interests(the"Work Product"), NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration,the sufficiency of which is hereby acknowledged, Assignor and Assignee agree as follows: I. Assignor hereby assigns all of its right, title, and interest in the Work Product to Assignee. In the event of any termination of the Purchase Agreement, within ten(10)days of such termination, Assignor shall transmit all of the Work Product to Assignee. 2. Assignee hereby accepts and consents to the assignment of the Work Product. 3. Notwithstanding the foregoing, Assignor agrees to defend and indemnify the City from any and all claims, actions,judgments, liabilities, proceedings and costs, including reasonable attorneys' fees and other costs of defense and damages, resulting from Assignor's use of the Work Product prior to this Assignment. SIGNATURES ON FOLLOWING PAGE 1 Beach-Atlanta 13_Assignment of Agreements Draft 4 2010_1 I_19 IN WITNESS WHEREOF,the parties hereto have caused this Assignment Agreement to be executed by and through their authorized officers the day,month and year first above written. ASSIGNOR: ASSIGNEE: BEACH PROMENADE LLC, a California CITY OF HUNTINGTON BEACH, A limited liability company municipal corporation of the Sta California By: print name/title Date May r :. By: > C k printname/title INIT TED AND APPROVED: Director of Econom evelopment APPROVED AS TO FORM: City Attorney REV AND APPROVED: Vy/X(#ninstrator 2 Beach-Atlantal3_Assignment of Agreements Draft 4 20101119 EXHIBIT 14 FIRPTA CERTIFICATE TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee(buyer)of a U.S. real property interest must withhold tax if the transferor(seller) is a foreign person. To inform Beach Promenade LLC (the"Transferee")that withholding of tax is not required upon the disposition of a U.S. property interest by the City of Huntington Beach(the "Transferor"),the undersigned hereby certifies the following on behalf of the Transferor: 1. That the Transferor is the owner of the following described real property, to wit: (see legal description attached hereto as Exhibit"A") 2. The Transferor is not a non-resident alien for purposes of the U.S. income taxation(as such term is defined in the Internal Revenue Code and Income Tax Regulations). 3. The Transferor's U.S. employer or taxpayer identification number is 4. The Transferor's address is 2000 Main Street, Huntington Beach, CA 92648. 5. The Transferor understands that this certification will be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury, I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of the Transferor. "TRANSFEROR" CITY OF HUNTINGTON BEACH A Califiorni4 muilicipal corporation Dated: , 20 By: y dministrator APPROVED AS TO FORM: r �✓L !�/Ly Lofo t4 City Attorney G:PDA:2009Drafts:Beach-Atlanta:Beach-Atlantal4 FIPPTA Certificate Exhibit A SHEEN" 1 gE 1 THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489.55 FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH,RANGE 11 WEST, IN.THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51, PAGE 14 OF MISCELLANEOUS MAPS, SAID LANDS ALSO BEING A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968,IN BOOK 8526,PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2, AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS, IN SAID RECORDS OF SAID COUNTY; THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580,NORTH 89"37'06"EAST, 89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632,RECORDED FEBRUARY 26, 1968, IN BOOK 8526,PAGE 461 OF OFFICIAL RECORDS; THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09'50'39"WEST, 133.85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9-10-25",AN ARC DISTANCE OF 160,11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE, NORTH 00°40'14"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE, SOUTH 89°37'06"WEST,88.00 FEET TO THE EAST LINE,OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE, OF SAID PARCEL 2, SOUTH 00°40'14"EAST,818.16 FEET; THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 09-50-39" EAST,206.45 FEET TO THE POINT OF BEGINNING. CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS, RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. v SAND � 4 U EXP, 12-31-11 O m JOSEPH G.DERLETH sry LS. 73A PLS 7340, EXPIRES 12/31/11 rF OF CAI��°� Legal Description BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE ®J� Iff CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS 1 NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM , PER PM 94-590 (N89'37'06"E) ATLANTA AVE 30' S, _ �;- _ _ i -- —— — ——— — —— --L—— —— —— — PARCEL 2, PM 84-590,— 202/48-50 PM W'LY LINE SEC 13� I T6S, R11 W, SBM �m { �>nn rn= j m W — 110' z zD RECORD PER PARCEL MAP m 8 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 PARCEL 2, PM 84-590, --T INCLUSIVE OF PARCEL MAPS 202/48-50 PM l � =PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, 110, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF z PARCEL 1, STATE HIGHWAY MAP Q 4 BOOK 5, PAGES 45 AND 46. o I 90,340 SO FT, (2.07 ACRES) ? = a j J 1 CO C j EXHUT S PARCEL 2, PM 84-590;----} �`;, 202/48-50 PM 8�--{ SHEET 1 OF 3 8 GRAPHIC SCALE -'--- —— — — — — 1 1 inch =150 ft. N'LY LINE Sso j o as Aso y PARCEL 1 PM 84-590 202/48-50 PM { IN FEET ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS s x ATLANTA AVE GRAPHIC SCALE (N8937-06"E) �22' 1 inch =50 ft.. 50 0 25 50 NW'LY COR SEC 13 � T6S, R11 W, SBM o g PER PM 84-590 Q { INFER' } o ( } = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, N E'LY LINE, PARCEL 1 PAGES 48 THROUGH 50 PER STATE HWY MAP INCLUSIVE OF PARCEL MAPS. oo. BOOK 5, PAGES 4}l ({ )) = RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK a'- 5, PAGES 45 AND 46. ------88 22' �= PORTION OF STATE HIGHWAY o RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN ` 8526/461 O.R., ALSO BEING A EXHIBIT B PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. SHEET 2 OF 3 8 � g LINE TABLE: IE L1= N89'37'06"E, 89.21' L2= N00'40'14"W, 730.41' i (n PARCEL 2, PM 84-590, rn 202/48-50 PM( o 0 1 0(-) - 1---W'LY LINE SEC 13 Z M a T6S, R11 W, SBM _N fl W NE COR PARCEL M POINT OF 1 4 - 1, PM 84-590, r- BEGINNING, SE 8' 202/48-50 PM COR PARCEL 2, m o PM 84-590, w w 202/48-50 PM ou 8' (88.00') - -_ (54.91') L1 N'LY LINE PARCEL 1� PM 84-590 (N89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE e CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS GRAPHIC SCALE F4,/—(N89'37'06"E) 1 inch =50 ft N'LY LINE SEC 13 5o o Z5 50 T6S, R11W, S.B.M.ATLANTA AVE INFes, LY COR SEC 13 30' , R11 W, SBM 5 PER PM 84-590 L3 ( ) = RECORD PER PARCEL MAP 44 '4 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8' $ 22' PARCEL 2, 0 PM 84-590, o I 202/48-50 PM ' o = PORTION OF STATE HIGHWAY o -'_ RELINQUISHMENT NUMBER o EXHIBIT S 632, RECORDED 2/26/68, IN a SHEET 3 OF 3 8526/461 O.R., ALSO BEING o A PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. °0 rn �1 £ LINE TABLE: LL3= S8937'06"W, 88.00' C W'LY LINE SEC 13 1 E'LY LINE, PARCEL 1 100 z T6S, R11 W SBM PER STATE HWY MAP o BOOK 5, PAGES 41 Q -l" ( PARCEL 2, AND 42: m :m 4t PM 84-590, z 202/48-50 PM m � o L22' 8' z ® c ti y EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS TENTATIVE ^/ Q //�•//J IEGa OEcCRIPItON� PARCEL MAP IVOE iso®v/�I6:�6:� SnOWx ON TIEwWPNOLEE'"BOOK 25,PnG0EK2J50G. EL u-50 1AE F F PaNCFLAl. MM x inf MMI O&IOM�NGE COUNtt. aOpnN,tOGEixEp wlP nE OPM'1 DEED RE�ROED LLYw 11.19BS IN BOON J905 PAGE 59J OF OFCFI+i.RECORDS, 50 i5I ND �I IN THE CITY OP HUNTINGTON BEACH, COUNTY OF ORANGE -1 STATE OF CALIFORNIA OWNERS: $UBH.-H NAP PREPARERS SCKE Ix fEEt BP(ANER CENTER I-PPOUExADE,uc, wALOFN k AR.,BuES A.P. NO.: 14L1-210-15, 19 & 24 LE.1 a rT'DO B A.SOULNAND c0, w rU No..Su,tE e EAC BFACH,G 935A0 21 90 FA[x BOULEVARD RWNF,Ca 9351H AREA: 5.2©ACRES na-nR-sx3B 1Ya i:°NssvoE"cx.cn 93c<B IFFFeEr a III-S.m11 AUGUST 2009 sasoLHAH 2,so a11-1 HuNnxm Bucx,n 9'H. I I - nA-vA-sem OTI or I,STIREE°N x �. - - xunnwTOn eucn.u92Bw I Id_ a 1l4IEs MB[R I . Oii0 PMCEu":5 ,HUNTINGTON BEACH CHANNEL . E ZO GERC AGtFNEFAl COUw AifER:C144 OF HUND—N BFSCn(PUBLc) LISA R Eo,SON cOMvaNr DELEPnOUE:ENEFIDTIN or u,,fORNu 'R+ 5 ROOD iOxE: ZONE-AS SPECAI ROOO w2ARo ARENE SUB.IELT TO INDEpao603 Pea '' ol ANONRsm IEeRCEE F.Ou R—,PFR'11A,FLOOD INSURANCF RATE M P xuM 9c029JN"` ro CH¢cEL owNED BY 11 Hu DNGrox BEACH(FR-AGE-1)TO BE ABANDONED/Lu.1EO D I 4 q i f G ON Flw,l.PaiCEl MV BY�nCFCIttxOF HUMInG10N BEAtn. - �- PARCEEL 5 a TO REMury rO nO,Na D95 Es r_ EASEMENT NOTES /\ 9 9 q NO BMILOIINS i-+ SETS µO nc9oEN eooRANI �eiiA 11 esE�i LINES. 00 a cclRlsi UI.`iFORNiA Eoan caupExr [RCORom 0 NCMNN {- BER 26. ,P e r AL RECOR05. ® ICATES AN ENSENENTTFOR uNDEROR0-LINES,cONOLnR WCLUDiNG ANOrE-aROUNo APPURT[NINT �r �� xfuRFS AND INCIOEM uRPOSOREee lxvaGEp3>o'1HHlERN RDE=B. EDISON CO.—.NECORom SEPTONDEN 5,19J5.IN 9 P n d • P Y5 B a' i V a J 2 f� © 1 EISEMENT i0R PIPE UNEs,TFLEORARI AND 7110 oNE LINES O nN NCIDDNTAL.PURPAES. SPMB 44roO iN lF_DP STANDARDS R COS—NEED—FEBRUaRY III OF LEEBE a ND ERRUWY 1 IN BOON E 95 OF LEASESB FLiPiIOn IN SAND 5• �fi ERE M P� p QLITCWMm BY INSixUMENT NECOROED ILr 20, BON O0R JIaO.PACE IS2 MFICAL RECORDS. 1+' DILATES AN EASEMENT FOR FIRE LIES, 0 is AND INCIDENTAL PUPRIC FS.IN'AROR OP SI'ANOSRD D S OR COMPANY CPLIFORNA,RECORDED ALKUsil 19,19s9 BOO, E 3 OFTIO.RECORDS. ® INDIGTFS AN EM FOR USE, rE S.FACI.BES AND-URFANCES FOR THE TRANSMISSION ECIRIC ENEA�OY FRR EECEMMUNOADON AND OMERg PURNOe�M%A,DR 0E BEHERAI TELEPHONEE So [[ F 34 SS ['ABLE 0 ,N_or uLFORNIA LNDER Novn9BER BA H 500, I D5. ' t Y< a F a S .4 1.3J ACFSS y S © INa0FAATCS AN EASCMEM FOR PO`EO LINES, D NBSEIN BOOMRi OIESPaiEAsiS of SOUTHERN 5 i5 POSSBINE VpE LIPO d B SLR _ rnBS, 3 c NA FRISDN GOMPANr. Rom SEPTEISEN 29,1 rrIM"A"OFIDS I SLRFS`PER x9< URFRI OFR ON - n ICujES p o BE pF N c OF nuNDxGiOn BEACH FOR PIS IC ON- "I TMpPOSEs FNFILFAIENIP, a Gu'S i PARCE%l PARCEL 2 p R 5supr"i-`e PERinpro e rT _ I y S LURE, POSSISLC RELL POINL t✓F arS E n vim— tx "BEAC L BOULEVARD _ y ___________ _____________________._ _____ ____ _ ____ _______ let•*� � � CT _ _ _ ________ n _ wn n _ 6 LEGEND: gg ti ..- 11 -ISgWRNNH i GMCR[tE P -HNtlILAP PAVfWG \\ - -cacBnr -For, N Q I PARCEL 1 .\ --14,1ORPIE -PkN iR[[ VICINITY�LAP ( ,Q - fAI5iiX4 LAS IIK -FLfAINXG WALL N fdlsilNG warts LIM _ II 0 -1 L-T 5N 1-1NO I.LI., Q -R[cl--[%IStIX4 rLCLTBICN LIK _PTjTY-I [ 0111111 RLCR-LIK Po -GA&[N AA1 BOA lOB NUYB6R O -WATER 1.11 ,pAy 9px teas-4aB-oDE -reifmavr Prasru ALDEN & IACN11nD TENTATIVE PARCEL MAP HATE:OB tB / 9w ® -$I4Y PI1Nx6ps DRARN:H.T. CITAIL oA• IeElmna ccnrrea vuvf _o�i In.EL SSOCIATE3 _ o --ot[ 0 rsFaDscTBOI.I 1 NO. 2009-122 cxfiCKeD:D.k, LE -Los f[TCB SHEET RBB9—BOM.R01rt IN I.—CA BEACH PROMENADE,LLC OF (w}eeB-ol:B HUNTINGTON BEACH,CALIFORNIA 1 ATTACHMENT #2 pia -133- Item 2. _ 105 i i i i- o EXISTING EXISTING BANK SHOPS 1 BIG LOTS SHOPS 2 DRUG STORE SHOPS 3 8,705 SQ.FT. �g 8,160 SQ.FT. 26,340 SQ.FT. 7,000 SQ.FT. 19,962 SQ.FT. 14,940 SQ.FT. 26 KIN EA „ 10 0 18 16 16 ® ® ® 16 12 ® 19 BEACH BOULEVARD - - - - - - - - - - - - - - - - - - - BEACH -BOULEVARD - - - - - - - - - - - - - - - - - - - - - - - ---------------------------------------------------------------------------------------------------- - -----------, - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - XISTING BUILDING AREA PARKING (ISTING BANK 8,705 SQ.FT. EXISTING PARKING SPACES 274 lops 1 8,160 SQ.FT. G LOTS 26,340 SO.FT. TOPS 2 7,000 SQ.FT. (ISTING DRUG STOP 19,962 SQ.FT. iOPS 3 14,940 SQ.FT. ATTACHMENT #3 Ha -135- Item z _ ,o, t € F t i�' w•evie �� _ n � Q`� ��h;� 1 W-mml ME .f ` is � '�'N f;• y '�}r!`'?i _ ,U �♦a ,tE. s :s8r s� '{-+- � i♦ • A H:' .,V: �R �^ a� � +f s.'�,`.x .f��w�ti, r1��r�•'r M s�.i 4 +`at ,Aa+ 4r .>_�! t aJ, k x�. .�.�e. ,',,r•,e • ATTACHMENT #4 - RESOLUTION NO. 2010-98 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH(DECLARING THE (DISPOSITION OF CERTAIN SURPLUS PROPERTY WHEREAS,the City of Huntington Beach is the owner of certain real property more particularly set forth on Exhibit A which is attached hereto and incorporated by this reference (the"Property"); and The City acquired the Property from the State of California,Department of Transportation; and The City Administrator has recommended to this Council that the Property be declared surplus property; and Huntington Beach Municipal Code Section 3.06.010(b) authorizes the City to dispose of surplus property, and sets out the procedures therefore, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: l. That the Property described above is surplus and the public interest and necessity require the disposition thereof. 2. That the Property has been appraised to establish the fair market value. 3. That the costs incurred in preparing the Property for sale, including all related expenses and appraisal fees, have been added to and made a part of the value to be paid on the sale of the Property. 4. That the Property is to be first offered for sale to the adjacent property owner; if there exists no interest, it then will be made available to the general public through a highest sealed bid process subject to a declared reserve. 5. That the Property described herein is to be sold for cash or upon other such terms as the City Administrator may recommend and the City Council may approve. 6. The City Administrator is hereby authorized and directed to execute all documents and take all steps necessary to dispose of the Property,pursuant to the determinations of this Council and the procedures set forth in Chapter 3.06 of the Huntington Beach Municipal Code. i 07-1130 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 6th day of December , 2010. Mayor INITIATED AND APPROVED: APPROVED AS TO FORM: Director of E omic Development City Attorney RE VI AND APPROVED: Ci inistrator 2 07-1130 Resol uti on.. No. 2010-.98 Exhibit A r I SHEET 10F 1 I THOSE CERTAIN LANDS LOCATED IN THE NORTH 1548.22 FEET,OF THE WEST 489M FEET,OF THE NORTHWEST QUARTER OF SECTION 13,TOWNSHIP 6 SOUTH,RANGE 11 WEST, IN THE RANCHO LAS BOLSAS,IN THE CITY OF HUNTINGTON BEACH,COUNTY OF ORANGE,STATE OF CALIFORNIA,AS SHOWN ON THE MAP FILED IN BOOK 51,PAGE 14 OF MISCELLANEOUS MAPS,SAID LANDS ALSO BEING f A PORTION OF PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968,IN BOOK 8526, PAGE 461 OF OFFICIAL RECORDS,AS SHOWN ON THE MAP RECORDED IN f BOOK 5, PAGES 45 AND 46 OF STATE HIGHWAY MAPS,ALL OF WHICH ARE LOCATED IN RECORDS OF SAID COUNTY,DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2,AS SHOWN ON PARCEL MAP 84-590, FILED IN BOOK 202,PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS,IN SAID RECORDS OF SAID COUNTY; } THENCE EASTERLY ALONG THE NORTHERLY LINE OF PARCEL 1,OF SAID PARCEL MAP 84-580,NORTH 89"37'06"EAST,89.21 FEET,TO THE INTERSECTION OF SAID NORTH LINE WITH THE EAST LINE OF SAID { PARCEL 1 OF STATE HIGHWAY RELINQUISHMENT NUMBER 632, RECORDED FEBRUARY 26, 1968, IN BOOK 8526,PAGE 461 OF OFFICIAL RECORDS; r THENCE NORTHERLY ALONG SAID EAST LINE, NORTH 09050'39"WEST, 133.85 FEET,TO THE BEGINNING OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 1000.00 FEET; i THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,THROUGH A CENTRAL ANGLE OF 9*1025",AN ARC DISTANCE OF 160.11 FEET; THENCE CONTINUING NORTHERLY ALONG SAID EASTERLY LINE,NORTH 00°40114"WEST,730.41 FEET, TO A LINE PARALLEL WITH AND 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION 13; THENCE WESTERLY ALONG SAID PARALLEL LINE,SOUTH 89°37'06"WEST,88.00 FEET TO THE EAST LINE,OF SAID PARCEL 2,OF SAID PARCEL MAP 84-580; THENCE SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2, SOUTH 00°40'14"EAST,818.16 FEET; j THENCE CONTINUING SOUTHERLY ALONG SAID EASTERLY LINE,OF SAID PARCEL 2,SOUTH 09°5V39" EAST,206.45 FEET TO THE POINT OF BEGINNING. s CONTAINING 90,340 SQUARE FEET MORE OR LESS(2.07 ACRES). SUBJECT TO ALL COVENANTS, RIGHTS,RIGHTS-OF-WAYS AND EASEMENTS OF RECORD. i EXHIBIT"B"ATTACHED AND THIS REFERENCE MADE A PART HEREOF. hip SAND SG,p a y DV. 12-31-11 t JOSEPH G.DERLETH s� yr S. 7aao �� f PLS 7340,EXPIRES 12/31/11 F ofi CA01 Legal Description _ BEACH BOULEVARD FRONTAGE ROAD VACATION AREA , FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE •� >� CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Exhibit "A" - Resolution No. 2010-98 NW'LY COR SEC 13 N'LY LINE SEC 13 T6S, R11 W, SBM T6S, R11 W, SBM _ PER PM 94-590 (N89'37'06"E) ATLANTA AVE_ 30' 5 _.._. _ s' _M _!_ --_._.- 1 PARCEL 2, PM 84-590,---11 202/48-50 PM 8 8 , 4/4 F-1,11 W'LY LINE SEC 13� T6S, R11 W, SBM I 6/ 6 !'A m r ---110' I p RECORD PER PARCEL MAP m ` I 8 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 PARCEL 2, PM 84-590,-------I- INCLUSIVE OF PARCEL MAPS 202/48-50 PM I ®=PORTION OF STATE HIGHWAY I RELINQUISHMENT NUMBER 632, RECORDED 2/26/68, IN 8526/461 O.R., ALSO BEING A PORTION OF I PARCEL 1, STATE HIGHWAY MAP o i I BOOK 5, PAGES 45 AND 46. o I 90,340 SQ FT, (2.07 ACRES) I o � I Co EXHIBIT B PARCEL 2, PM 84-590,- ; 6r,j 202/48-50 PM SHEET 1 OF 3 I 8 GRAPHIC SCALE ---- -�-- —{ 1 inch =15o ft 150 1 0 I N'LY LINE 75 15Q ' PARCEL 1 I PM 84-590 I 202/48-50 PM ( IN FEET ) EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA 'J.j FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH t DEPARTMENT OF PUBLIC WORKS i Exhibit "A" - Resolution No. 2010-98 ATLANTA AVE � GRAPHIC SCALE 1 inch =50 ft. I (N89'37 Q6„E) �22' 50 0 25 50 WILY COR SEC 13 •• 1 T6S, R11 W, SBM 0 8• E PER PM 84-590 0 IN E , i a ( ) = RECORD PER PARCEL MAP 84-590, FILED IN BOOK 202, �-- PAGES 48 THROUGH 50 N E LY LINE, PARCEL 1 PER STATE HWY MAP INCLUSIVE OF PARCEL MAPS. oo BOOK 5, PAGES 41 1 (( )} = RECORD PER STATE I AND 42. HIGHWAY MAP FILED IN BOOK °3- 5, PAGES 45 AND 46. �-----$8' 22' sr 6 P= i �= PORTION OF STATE HIGHWAY o j RELINQUISHMENT NUMBER 632, RECORDED 2/26/58, IN 8526/461 O.R., ALSO BEING A EXHIBIT B PORTION OF PARCEL 1, STATE HIGHWAY MAP BOOK 5. SHEET .2 OF 3 LINE TABLE: L1= N8917'06"E, 89.21' !! 1 L2= N00'40'14"W, 730.41' f i PARCEL 2, } PM 84-590, 0I Z 202/48-50 PM{ n i > f--W'LY LINE SEC 13 ` �► to v M T6S, R11 W, SBM o i --4 NE COR PARCEL I POINT OF 1, PM 84-590, ® BEGINNING, SE [ 202/48-50 PM I COR PARCEL 2, 8' o PM 84-590, � 202/48-50 PM CO., 8' + 88.00' —— {54.91 ) L1 { ) N'LY LINE PARCEL 1 PM 84-590 (N 89'37'06"E, 489.56') EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE e CITY OF HUNTINGTON BEACH DEPARTMENT OF PUBLIC WORKS Exhibit "A" - Resolution No. 2010-98 GRAPHIC SCALE r 1 inch =50 tL N'LY LINE SEC 13 so 0 25 so T5S, R11 W, S.S.M. ����--- ATLANTA AVE ( IN (NB9'37'06"E) NW'LY COR SEC 13 3p' T6S, R11 W, SBM 50' S0' ` PER PM $4-590 L3 { ) = RECORD PER PARCEL MAP 44/40 P` 84-590, FILED IN BOOK 202, PAGES 48 THROUGH 50 INCLUSIVE OF PARCEL MAPS. 8 f 8' 22' PARCEL 2, 0 PM 84-590, 202/48-50 PM = PORTION OF STATE HIGHWAY RELINQUISHMENT NUMBER I $ EXHIeff B 632, RECORDED 2/26/68, IN CZ SHEET 3 OF 3 8526/461 O.R., ALSO BEING a A PORTION OF PARCEL 1, } 4 STATE HIGHWAY MAP BOOK 5, PAGES 45 AND 46. 0 �D ; O) LINE TABLE: L3= S89'37'06"W, 88.00' I } W LY LINE SEC 13 I E'LY LINE, PARCEL 1 z T6S, R11 W, SBM PER STATE HWY MAP o I BOOK 5, PAGES 41 I "� AND 42. Q 1 PARCEL 2, P PM 84-590, 202/48-50 PM 22' F � ® 00 EXHIBIT B BEACH BOULEVARD FRONTAGE ROAD VACATION AREA FROM 50' SOUTH OF TO 1072' SOUTH OF ATLANTA AVE CITY OF HUNTINGTON BEACH I DEPARTMENT OF PUBLIC WORKS Res. No. 2010-98 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH I, JOAN L. FLYNN 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 a regular meeting thereof held on December 6, 2010 by the following vote: AYES: Carchio, Coerper, Hardy, Green, Bohr, Dwyer, Hansen NOES: None ABSENT: None ABSTAIN: Dwyer City erk and ex-officio Cl k of the City Council of the City of Huntington Beach, California Bijan Sassounian REAL ESTAxTE DEVELOPMENT �ivt.f�l -- - COMMUNICATION , December 3, 201(} MeetkV D8$e 4 L Mayor _ .. 'Honorable Cathy,green, Ma y� Huntington Beach.City Council Age Wa Item No. � 200g'Main Street -� - Huntington Beach; CA 92649 Subject. Purchase Agreement for Acquisition of Frontage-Road at Beach Boulevard and Atlanta Avenue Proposed Credit for Buyee-s Costs Incurred to Cure Seller's Title issues Mayor,Green and Councilmembers: I want to thank you and your staff for your'continued support for my efforts to,remodel, expand. and improverthe Beach Promenade Shopping,Center. This expansion project has been in the planning stages for many years and, when;completed,..will have significant,economic benefits.''- for the:City of Huntington Beach, nearby residents.and the other owners ofpbuildings with nrthe center. As you know; I have incurred significant up-front. expenditures :(in excess,, of $500,00 ,to prepare conceptual architectural, landscape and engineering plans, _geo echnical:' .and, environmental.investigations; and traffic and parking analyses-regiiired for;staf# andrPlanning Commission approval of the proposed�Phaise 2 expansion a�nd�remodei�prtijed'incorporating thew. frontage road: Although the,'other building`and property owners at the center are-very, supportive of the remodel end expansion project; and =improvements` to their�'buitdings and properties; their participation in-the costs and financial risks of this°project is minimal. Following the City Councils approval cif>the Deal Point. Memarandurn for';acquisrtion of t#ie frontage road by Beach Promenade LLC on Auguste, 2009, l have proceed*d In good fa th';et ; my sole and cflnsiderable cost to obtain City',app�rov�ais for.aa conditit�nal,use,permit;`parcel,map; coastal development permit, Caltrans permits.and -other, related entitlements and,*mits to; permitexpansion of the shoppingcenter in anticipation.oft acquiring the,frontage-road-frcirn they City per the#erms of Ahe.approved Deal Point Memorandum. During.the formal road vacation process and our due diligence into'the'condition of the frontage road to; be purchased,:.two issues came to light that .we identified as'. r`etjuinng addition6af consideration in the purchase and,sale agreement, These 'include..1) the relpcatlon of a . previously,unidentified I Southern California Gas t0mpa6y:pVpel ne located irr the frontage road and 2) mitigation cif potential methane issues related.to'tWo previousiy-aban&6ecl'oil and gas wells. During the road vacation process, the Gas Gompany'',identified ain existing pipeline 'which conflicts with the-location of the three future buildings (Buildings G,°H-and l) on,the appraved .site plan. In order for the frontage .rand vacation process to proceed, we.were required to negotiate an agreement with the Gas Company to. provide an easemertt.;and'relo.cate the,gas line from the frontage road onto my private property at no cost to the Gas Company. The total L19(�"8eucir Blvd; Huntington-Beach, C 92648 9 1- - Fax(714)37472�1-f • rr�r��t �iz����t�:r�r�ksrhrr�r� costs for relocation of this gas line, which are legitimately the Seller's (City's) cost to provide clear title to the frontage road property,:are $52;893.50, as detailed.on Attachment 1, As`'to the abandoned oil.and gas wells located in the frontage road, we were initially advised by the Fire Department that the only likely methane mitigation required would be installation of a. vapor barrier under one future building, subject to review of the wells by the California Division of Oil, Gas and +Geothermal Resources (DOGGR). A# my sole cost, a:Construction.Site;Review and Well Disposition Reports .were prepared for review by DOGGR and the Fire bepartmenti, and the wells were exposed; surveyed and leak tested for methane by DOGGR. Although no methane was detected at the wellheads, the Fire Department is nonetheless' requiring, installation of methane vents for these two wells ,and a. methane membrane,Vnder'futzure,, Building G. The unanticipated, cost of installing methane vents for these two;;wells is approximately $10,000.00, In: consideration of the, Buyer's advancing the costs described above.to allow for-the City to convey clear title to the frontage road and to mitigate the potential methane issues related to the abandoned wells located in the frontage road-, I am hereby. requesting:-the Cjtv�11 6uncil to' provide the Buyer, Beach Promenade LLC; with a .credit equal to the Initial Payment of $50,000.00 required Lat close of escrow to cover these costs advanced by the Buyer. , We believe this is a fair and modest request, and.thank you for your continued efforts to improve the Beach Promenade Shopping Center for all of the residents of and visitors to Huntington Beach. Si erely, Bijan Sa sounian Beach Promenade LLC Attachment 1: Summary of Costs for Relocation of Gas Pipeline cc: Fred Wilson, City Administrator Bob Hall; Deputy City Administrator Beach Boulevard Frontage Road Summary of Gusts for Relocation of Southern California Gas Company 3" Pipeline November 19, 2010 (Description Cost Civil Engineering--survey existing line, realignment studies and exhilbits, preparation of legal description for new easement on Sassounian property-Wadden & Associates $3,127.50 Gas Company Invoice for Collectible Work Authorization $19,766.00 Trenching and Bac fill Cost Estimate-Delta Pipeline, Inc, 30 000.00 Total Costs to relocate gas line $529893.50 lirnau - nuginuctui ,uv5o ivi -i g4z imc iciv%;auv" rage 1 vi 1 Bill Holman<bholman24Q8@gmall.com> Engineering costs for 3" gas fine relocation Steve Krieger 4skrleger@waldenassociates.net> Wed; Nov 10,2010 at 2:12 PM To: Bill Holman <bholman2008@gmail.com> Cc:Dave Bacon <dbacon@waldenassociates.net> Hill, As requested, please see the breakdown: Survey of existing gas line- $595 Legal description for new gas line easement (this is an estimate at this time) —$900 Alignment studies and exhibits - $1,632.50 Regards, Steve `alders &Associates 2552,White Road, Suite B Ire 1�xc�, CA 9261.4 ,(9=9)660LOl!U (949)660-0418 far sk>ieger@waldenassociates.net Please note we are currently observing a four day work week and wilt be closed on Fridays. From: Dave Bacon Send Monday, November 08, 2010 10:35 AM To: Bill Holman Cc: Steve Krieger Subject: RE: Engineering costs for 3" gas line relocation [Quoted tex',hidden) https://mail.google.com/mail/?ui=2&ik=58fbaeO ed&view=pt&q=skrieger�/`4Owaidex sociates.... 11/19/2010 Put SOUTHERN,CAL.]rFORNIA CAS COMPANY CIO COLL CTtBL E WORK AUTHORIZATION tonipany Iwo# 8,151,9 Date Prepared 10121/2010 Work Re:yuest 2025506 10# 300653319 Estimate Prepared,By William Gastelum ML 9352 Phone (714)634-3034 Purchaser Name and Job Address Rifling(Name and Addrexss,if[?iff nt �+� r Name Bijanrt '9 Nilvwt 'Bijas"40ftift" �llm Address 21190 Beach Blvd. Address 21190 Beach Blvd, City Huntington Beach State; CA Zip 92648 City Huntington Beach State CA Zip 92648 Phone 11 (714)374-5678 Phone# (7141374-5678 Purchaser's SS## 579-64-7940 Or Federal Tax ID# Purrhaser regvicsts and authorizes;The Gas Company to perform the following work: Install-1025 feet of 3"plastic gas main.. Abandon-400 feet of 3'1 steel kas main Abandon-970 feet of 3"Plastic gas.rnailt Tt1`l'`AL �D 1'0i'A14 "!'t71AI'' P T"!' �Fi<eORG 1�AljihlG, Ct)1�1t'A1ti 1l >uicludl PGR14�If ;i 4 `AL f3 _ °Lr4l_6 kmA` :1t1 i nntruc ►t t.tllar'.3'. t lfl{IP IU#i3: 1!l 11;3T8.(t{t i 9 .pp 11V".00 3,I 10.00 16,0.0 00 3,t32.00 19;76ti OO Purchaser`tigrnes to fray The Ga..Company the actual cast-the estimated amount is due and payable bn advance and any addifianai balance within30 days of invoice. Ibe esliniated cost of the Work is funiishad only for the convenience of the Purchaser.It is Intended to refract The Gas Company's general past experience of the cost of similar work under favorablfj condiNnne.Eyacause of unfdr. an co tin arneias arut other factors,the actual coast May be considerably higher or lowe7r than this edfintata>.Thnratora,the restimate is not a warranty by The Gas Company of the actual Cost.Tha actual cost shall Include overhead costs contained in The Gas.Company's apprdprfate billing formula.Purchaser agrees to pay within 30 days at bivoice any additional amounts whenever The Gas Company deterrninas the cost of Work completed exceeds any amounts previously paid:When labor costa exceed the estirmataa,The Gas Company may,but it not obligated to nottfy Purchasm,and auitue so Work until appioval for the Incmasert t ft#obtained from P et.11 the totwlacivaf rota{is less than the de il(s?, The Gas Company will refund the difference(withoul interest),Purchaser agrees that it The Gas Company brings any action to enforce the provisions of this Agnr�tirarit,it shall be entmed to recover its attortyey s fees and costs,In addition to any other relief to which it is entitled. Purchasm agrees that any excavation made by Purchaser that is to tie entered by Gas Company employees.agents or subcontractors shall conform to aA require is of tha State of California constructi❑n sahsty ordain,parliculaarty I h u piovfskrrts of A ' B;.Sections 1539 through 1 W,which relate to the.rtefa cnattuctlin of trenches anti excavations,Purr baasor r (tgroes A take oil reasonable carrtt in protecting The Gas Company's property from damage,including the use of procedures which will riot place any undue strain on pipes during excavation and baclfill or cause damage,to pipe protective coatings. Purchaser mall irndemnify,defend and hold harmlrss The Gas Company and against any and an tiattility of every lead and nature for-(0 Injury to or death of persons,including without limit dkin,empkwfiss or agents of The Gas Company or of Purchaser,jfi)damage,destruction or kiss,consequential or otherwise,to or of any and as property,real or personal.including. witho;rt Nmitatfon;prepony of Tho Gars Company:Purchaser or any differ person,(ill)violation of kicalt.state or federal Ism or rogulatioi'iti(excluding environmenriat taws or regulations):and(Iv) including attorney's fees incurred in defending against such liability or enforcing this provisim-requiting from or in any mainner arising out of or in connection with the perfgrmance of the Wofk including the Indemnify obtigations imposed on The Gas Company,by the owner of the Job Address M other than Purchaser,by the local jurisdiction In which the Work is performed or which issue«a permit€or arly-part of#no work,excepting only those flabithkei arising from the sole negligence of willful misconduct cif The Gas Company or Its agents-cornparad to any other person Purchaser shall indemnity,defend and held The Gas Company harmless from and against any and call liability(including attorneys f s inau in,ttetartdir#g erfaxist such liability or in enfRrr:ing 11iis proviidon)arising out of or in any way cvnnectod with the violation of or oompflanco with any local,state or fed envinernantat law at,regulation as a resu$of conditions at Ihe'Job Address.release or spill of any pr"xi;ting hnzardons materials or waste,or out of the management and disposal of any pre-existing contaminated sells orlfroundwatear, haz<amous or hat ardour,removed from the ground as a resull of the Work(Pre-ExiiiGng Environmental LIeUffity"),Including but not fimiitid to habilify fcfr the costs,o9pailintili and Lgat irabiffiy tar die environmental fnvestigoWns.montlaaing,rxirttainmeri,,abatttmeriL removal,repair,cleanup,restoration,remedial Wool,peruildes,and f ntas arising tram the viaiation of anylocaL state or.faderal law or reputation,auorney's teas.disbursements:and other rrssponse costs.A,s between Purchaser and The Gas Company,Purchaser agrees to accept full responsi liefy for and bast all casts associated with Fite-Exesing Environmental liability.Purchaw ag"s that The Gas Company may stop Work,terminate the Work,redesign it to a different location or take other action reasonably necessary try compeers the Work without incurring any Pre-Existing Environmenlaf Liability. AGREED AND ACCEPTED PURCHASER Bifan. " st°xioss-*00Ut4(414 i DAM t NAVIZOrr-MOANY) THE.CiAS Cs()WANY BY NAMPiPRINT1 PURC,IMSPRttRAlMititttITOREPH—MM-A'nY1t TUNNY) TITLE - };iCirdR'r[1Rf# - �OrdklATtjiir'-C'iti'Fri,iftCnA',f:R1 OR AVr#tflR12.E0ftE ILSC,ff`A'trVE_ P.kNwMFNT INFORMATION kf0IJN1T ttl7f."JVIf ❑ cAsil ❑['U>CK C'IJF K tf IyATW ktFNT T'tiAht ra IN, fly I NAtrS;'z M 1"MI'LCTTU'r t'A)'N1l1M rURNfj.)IN AT, itOn7rAr(s trftr{:#rti.Lt.-t'r "1 ACk'rXjw'roil;.("Pr.V t',*tiSTUMER,c:`Cit'1f-HIMIONPILL St'OTIIEriNCAhri'Cif#rIAGAS COMPANY-i"t7Rh AllI-FI N,4=94i) • •i CAPITAL WO#:. 181519 Gsamin Compm A O SeITtpra Energy utility" BUSINESS AREA: D 2010 Distribution ❑2020 TransmIssian CONTACT: William Gastelum. WORK REQ#: 2025506 INTERNAL ORDER#: 300653319 BILL TO: Bi}an Saftunian SAP COST CENTER: 2200-0562 21190 Beach Blvd: COST ELEMENT: 6350710 Huntington Beach CA 92648 DATE PREPARED: 10121/2010 Retum this form when mailing payment tMl-TO: Southern California Gas Company TOTAL AMOUNT DUE $ 99,766.00 SUIICIry Billing Make checks payable to Southern Calitomia Gas Company and P.O. Box 2007 Include internal order number on check Monterey Park, CA 91754-0957 PLEASE MAKE TIMELY PAYMENT TO AVOID DELAYS IN JOB SCHEDULE t, DE-L TA- IL PIPELINE I People Principle Purpose BEACH PROMENADE 7/30/2610 GAS TRENCH J BACKFILL BUDGET GAS TRENCH 1 BACKFILL TRENCH I BACKRLL 900 LF $9,000.00 TRENCH!BACKFILL IN AG 360 LF . $000.00 REMOVE AND REPLACE AC 900 SF $15:300:00 GAS TRENCH t BACKFILL TOTAL $30,000.00 BUDGET ONLY, PLANS NOT AVAILABLE t4 Main Office: 1407.Foothili Blvd,Suite 232 La Verne CA 91750 Ph 662.493a0227 CA 1-4 630256 Fx 562,493,4527 AZ Lic.ROC247435 jeremy&eltapipeline.net COUNCIL COMMITTEE — APPOINTMENTS — LIAISON REPORTS AND ALL AB 1234 DISCLOSURE REPORTING Coerper, Hardy, Green reported. CONSENT CALENDAR 1. Approve and adopt minutes Recommended Action: Approve and adopt the minutes of the City Council/Redevelopment Agency/Public Financing Authority regular meeting of November 15, 2010 as written and on file in the Office of the City Clerk. Approved 7-0 2. Adopt Resolution No. 2010-98 declaring disposition of certain surplus property; and, approve and authorize execution of a Purchase Agreement between the City and Beach Promenade LLC for the purchase of property referred to as the Beach/Atlanta Frontage Road Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute the "Purchase Agreement By and Among the City of Huntington Beach, a Municipal Corporation, and Beach Promenade LLC, a California Limited Liability Company," for the purchase of property commonly referred to as the Beach Atlanta Frontage Road; and, B) Authorize the City Administrator or his designee to execute any other related escrow documents; and, C) Adopt Resolution No. 2010-98, "A Resolution of the City Council of the City of Huntington Beach Declaring the Disposition of Certain Surplus Property." Approved with amendment to buying agreement. The buyer is responsible for paying all of the escrow fees and the City will defer an initial payment of the $50,000, less the City's portion of the escrow fees, to not more than 120 days after the issuance of the certificate of occupancy for parcel V. Approved 7-0 3. Approve and authorize execution of Amendment No. 1 to the Professional Services Contract between the Redevelopment Agency of the City of Huntington Beach and Kane, Ballmer & Berkman for Legal Services in the amount of$150,000 for a total contract amount not to exceed $300,000 Redevelopment Agency Recommended Action: Approve and authorize the Chairperson and Agency Clerk to execute "Amendment No. 1 to Professional Services Contract Between the Redevelopment Agency of the City of Huntington Beach and Kane, Ballmer& Berkman for Legal Services." Approved 7-0 -3-