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Home My WebLink AboutItem 4.07 Dub Honda Purch SaleG~~~ O~ DU~~2 /ll/~ 19 (~i= i =7I~),82 \~\771 1~/ 04LIFOR~~ STAFF REPORT CITY C L E R K DUBLIN CITY COUNCIL File # ^®®0^-©® DATE: February 16, 2010 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJE T~: ` Purchase and Sale Agreement with KBH Investments, LLC Prepared By: Linda Maurer, Assistant to the City Manager EXECUTIVE SUMMARY: The City Council concluded its street vacation proceeding for the westernmost portion of Scarlett Court on November 17, 2009. Staff is recommending that the City enter into a Purchase and Sale Agreement with KBH Investments, LLC, the adjacent property owner (Dublin Honda), to sell the former right-of-way property for its fair market value of $796,000. FINANCIAL IMPACT: Under the proposed agreement, the value of the parcel is established at $796,000. City will receive a cash payment of $500,000, payable in installments with interest over athree-year period following the close of escrow. The remaining $296,000 will be credited to KBH Investments, LLC for the design and construction of cul-de-sac improvements at the easternmost portion of Scarlett Court. The timing of receipt of any additional revenue will occur after June 30, 2010 and will be incorporated in the future budget. RECOMMENDATION: Adopt a Resolution approving a Purchase and Sale Agreement with KBH Investments, LLC. Submitted By eviewe By Assistant to the City Manager Assistant City ger Page 1 of 3 ITEM NO. 1. ~~ DESCRIPTION: On November 17, 2009, the City Council adopted Resolution 165-09, vacating the westernmost portion of Scarlett Court, following a duly noticed public hearing. The City Council found that the westernmost portion of Scarlett Court is unnecessary for present or prospective public use and is not useful as anon-motorized transportation facility because of the expansion of the intersection at Dougherty Road and Dublin Boulevard, which resulted in major traffic movement restrictions along this portion of the right-of-way. The disposition and sale of the westernmost portion of right-of-way has a number of limiting factors, including utility easements that run underneath the land, as well as the linear nature of the remnant piece. These restrictions make the piece of property undevelopable. The most logical and appropriate user of this property is an adjacent property owner who would be able to combine this site with an existing parcel. Staff reviewed ownership surrounding this portion of Scarlett Court and determined that the adjacent properties on the west and east sides were owned by KBH Investments, LLC, owner of Dublin Honda. Staff approached KBH Investments, and it expressed a strong interest in purchasing the property. The City initiated an appraisal to determine the fair market value of the western most portion of the street. Upon receipt of the appraisal, Staff met with KBH Investments to structure the purchase and sale of the property, which totals about 42,000 square feet (or approximately one acre of right-of-way). Under the proposed agreement (Exhibit A to Attachment 1), KBH Investments will purchase the property for $796,000 and receive a $296,000 credit towards the purchase price for the engineering and construction of a new cul-de-sac at the easternmost portion of Scarlett Court. This construction relates to the City Council's other street vacation action -Resolution 166-09 - to vacate the easternmost portion of Scarlett Court to expand the City's maintenance yard facility. The net purchase price of $500,000, plus 3% interest, will be made in three annual installments to the City beginning in August 2010. KBH Investments will execute a promissory note in the amount of the net purchase price, which will be secured by a Deed of Trust recorded against a parcel owned by KBH Investments in Tracy. In addition, KBH Investments will be responsible for the engineering and construction of a new cul-de-sac at the western end of Scarlett Court. A grant of easement to the City of approximately 4,000 square feet will be necessary from KBH Investments to provide for this needed cul-de-sac. All of the above mentioned improvements will be subject to review and approval by the City's Public Works Department. The acquisition of the vacated street will enable KBH Investments to expand its auto sales, contributing to greater economic development in the City. In one scenario, the site would become large enough to accommodate another dealership. In another scenario, the site would provide more display area space for Dublin Honda's new and used vehicles. In either scenario, the sale of the property to KBH Investments will likely increase the City's sales tax revenues from additional car sales and will also provide $500,000 in new General Fund revenue to the City over a period of three years. Page 2 of 3 NOTICING REQUIREMENTS/PUBLIC OUTREACH: None ATTACHMENTS: 1. Resolution approving a Purchase and Sale Agreement with KBH Investments, LLC (with Agreement included as Exhibit A) Page 3 of 3 ~ ~ dos RESOLUTION NO. -10 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING A PURCHASE AND SALE AGREEMENT WITH KBH INVESTMENTS, LLC RECITALS WHEREAS, on November 17, 2009, the City Council ("City Council") of the City of Dublin ("City") adopted Resolution No. 165-09 vacating the westernmost portion of Scarlett Court consisting of approximately 42,288 square feet ("Property"); and WHEREAS, the neighboring property owner, KBH Investments, LLC ("KBH"), desires to purchase the Property for the purposes of operating a car dealership; and WHEREAS, the City and KBH have negotiated a Purchase and Sale Agreement substantially in the form attached hereto as Exhibit A ("Purchase and Sale Agreement"); and WHEREAS, pursuant to the terms of the Purchase and Sale Agreement, (1) KBH will purchase the Property from the City for $796,000; (2) KBH will receive a credit of $296,000 toward the purchase price for construction of cul-de-sac improvements on the eastern end of Scarlett Court; (3) KBH will pay the remaining $500,000 over a period of three years with 3% interest; (4) KBH will execute a promissory note in the amount of $500,000, which will be secured by a Deed of Trust recorded against a parcel located in Tracy, California; (5) KBH will construct cul-de-sac improvements on the western end of Scarlett Court and will grant an easement ("Easement") to the City of approximately 4,000 square feet for public right-of--way purposes. NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Dublin does hereby approve the Purchase and Sale Agreement with KBH and the Easement. BE IT FURTHER RESOLVED THAT the City Council does hereby authorize the City Manager to execute the Purchase and Sale Agreement substantially in the form attached hereto; to make revisions to the Purchase and Sale Agreement, with the advice of counsel, which do not materially or substantially increase the City's obligations thereunder; to accept the Easement; to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the Purchase and Sale Agreement and to administer the City's obligations, responsibilities and duties to be performed under the Purchase and Sale Agreement. PASSED, APPROVED, AND ADOPTED this 16th day of February, 2010, by the following vote: AYES: ATTACHMENT 1 a ~105~ NOES: ABSENT: ABSTAIN: ATTEST: City Manager City Clerk 3~~~s PURCHASE AND SALE AGREEMENT BETWEEN THE CITY OF DUBLIN. AND KBH INVESTMENTS LLC THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into effective as of , 2010 (the "Effective Date") by and between the City of Dublin, a municipal corporation ("Seller" or "City") and KBH Investments LLC, a California limited liability company ("Buyer"). Seller and Buyer are hereinafter referred to as the "Parties." WHEREAS, Seller is the owner of (i) the westerly portion of Scarlett Court consisting of approximately 42,288 square feet and more particularly described in Exhibit A attached hereto and incorporated herein by this reference ("Parcel One"}; and (ii) the easterly portion of Scarlett Court more particularly described in Exhibit I attached hereto and incorporated herein by this reference ("Parcel Three"); WHEREAS, Buyer is the fee simple owner of that certain real property consisting of approximately 4,343 square feet, located adjacent to Scarlett Court and more particularly described in Exhibit B attached hereto ("Parcel Two"); WHEREAS, Seller intends to vacate Parcel One as apublicright-of--way in accordance with Street and Highways section 8300 et seq.; WHEREAS, as a result of the vacation of Parcel One, the City has proposed a new configuration for Scarlett Court consisting of new cul-de-sacs on each end of Scarlett Court; WHEREAS, Buyer desires to purchase Parcel One from Seller for purposes of operating a car dealership, and Seller desires to sell Parcel One to Buyer in accordance with the terms of this Agreement; and WHEREAS, City desires to acquire an easement on Parcel Two from Buyer for public right-of--way purposes, and Buyer desires to grant an easement on Parcel Two to City in accordance with the terms of this Agreement. NOW; THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Agreement to Sell and Purchase. Seller agrees to sell, and Buyer agrees to purchase, Parcel One subject to the terms and conditions of this Agreement. , 2. Purchase Price; Grant of Easement. (i) The purchase price for Parcel One shall be Seven Hundred Ninety-Six Thousand Dollars ($796,000) ("Parcel One Purchase Price"). EXHIBIT A ~~i~~ PURCHASE AND SALE AGREEMENT BETWEEN THE CITY OF DUBLIN AND KBH INVESTMENTS LLC THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into effective as of , 2010 (the "Effective Date") by and between the City of Dublin, a municipal corporation ("Seller" or "City") and KBH Investments LLC, a California limited liability company ("Buyer"). Seller and Buyer are hereinafter referred to as the "Parties." WHEREAS, Seller is the owner of (i) the westerly portion of Scarlett Court consisting of approximately 42,288 square feet and more particularly described in Exhibit A attached hereto and incorporated herein by this reference ("Parcel One"); and (ii) the easterly portion of Scarlett Court more particularly described in Exhibit I attached hereto and incorporated herein by this reference ("Parcel Three"); WHEREAS, Buyer is the fee simple owner of that certain real property consisting of approximately 4,343 square feet, located adjacent to Scarlett Court and more particularly described in Exhibit B attached hereto ("Parcel Two"); WHEREAS, Seller intends to vacate Parcel One as a public right-of--way in accordance with Street and Highways section 8300 et seq.; WHEREAS, as a result of the vacation of Parcel One, the City has proposed a new configuration for Scarlett Court consisting of new cul-de-sacs on each end of Scarlett Court; WHEREAS, Buyer desires to purchase Parcel One from Seller for purposes of operating a car dealership, and Seller desires to sell Parcel One to Buyer in accordance with the terms of this Agreement; and WHEREAS, City desires to acquire an easement on Parcel Two from Buyer for public right-of--way purposes, and Buyer desires to grant an easement on Parcel Two to City in accordance with the terms of this Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt. and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Agreement to Sell and Purchase. Seller agrees to sell, and Buyer agrees to.purchase, Parcel One subject to the terms and conditions of this Agreement. , 2. Purchase Price; Grant of Easement. (i) The purchase price for Parcel One shall be Seven Hundred Ninety-Six Thousand Dollars ($796,000) ("Parcel One Purchase Price"). 5 ~ las' (ii) Credit for Construction of Improvements. Buyer shall receive a credit toward the Parcel One Purchase Price in the amount of Two Hundred and Ninety-Six Thousand Dollars ($296,000) ("Credit") provided that Buyer constructs the right-of--way improvements on Parcel Two and Parcel Three described in Exhibit C attached hereto ("Right-of--Way Improvements"} in accordance with Section 21 of this Agreement. (iii) Net Purchase Price. Buyer shall pay a net purchase price to Seller for Parcel One in the amount of Five Hundred Thousand Dollars ($500,000) ("Net Purchase Price") in accordance with the terms of the Note (as defined below). Buyer shall execute a promissory note in the amount of the Net Purchase Price dated as of the Effective Date and substantially in the form attached hereto as Exhibit D ("Note"). The Nvte shall be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing executed by Harvey & Madding Inc. as trustor for the benefit of the City substantially in the form attached hereto as Exhibit E ("Deed of Trust"). The Deed of Trust shall provide the City with a security interest in that certain real property located a`~ 2750 Auto Plaza Way in Tracy, California and commonly known as San Joaquin County Assessor's Parcel Number 212-270-08. (iv) Grant of Easement. In consideration for Seller's agreement to sell Parcel One to Buyer, Buyer shall grant to City an exclusive easement on Parcel Two for public right-of- way purposes substantially in the form attached hereto as Exhibit H ("Grant of Easement") on the date set forth in Section 21(i). 3. Conveyance of Title. At the Close of Escrow, Seller shall convey by quitclaim deed to Buyer marketable fee simple title to Parcel One, free and clear of all recorded and unrecorded liens, encumbrances, assessments, leases and taxes except: (a) general, special and supplemental taxes and assessments as liens not yet due and payable; and (b) such other conditions, liens, encumbrances, restrictions and exceptions as may be approved in writing by Buyer ("Buyer's Permitted Exceptions"). 4. Escrow: Escrow Instructions. The Parties have opened an escrow account at the office of North American Title Company located at 4255 Hopyard Road, Suite 1, Pleasanton, California 94588 ("Title Company" or "Escrow Agent"). Within thirty (30) days following the Effective Date, the Parties shall deposit with the Escrow Agent an executed copy of this Agreement, which shall serve as the joint escrow instructions of Buyer and Seller for this transaction, together with such additional instructions as maybe executed by the Parties and delivered to the Escrow Agent, provided that in the event of a conflict between the terms of any such additional instructions and this Agreement, the terms of this Agreement shall prevail. 5. Title Insurance. At Buyer's sole cost and expense, Buyer shall obtain a preliminary title report ("Buyer Preliminary Title Report") setting forth all liens, encumbrances, easements, restrictions, 1313014.6 2 ~ ~ ion conditions, pending litigation, judgments, administrative proceedings, and other matters of record affecting Seller's title to Parcel One, together with copies of all documents relating to exceptions listed in the Buyer Preliminary Title Report ("Parcel One Title Exceptions") and complete and legible copies of all instruments referred to therein, as requested by Buyer. Buyer shall approve or disapprove each Parcel One Title Exception within fourteen (14) days following Buyer's receipt of the Buyer Preliminary Title Report by written notice to Seller and Escrow Agent. Buyer's failure to approve any Parcel One Title Exception within such period shall be deemed to be a disapproval of each such Parcel One Title Exception. If Buyer objects to any Parcel One Title Exception within the fourteen (14} day period or if Buyer is deemed to have disapproved of any such Parcel One Title Exception in accordance with this Section 5, Seller shall use its best efforts, at Seller's sole expense, to remove from title or otherwise satisfy each such Parcel One Title Exception no later than fourteen (14) days prior to the Close of Escrow and in a form that is reasonably satisfactory to Buyer. If Seller fails to remove or satisfy any Parcel One Title Exception to the satisfaction of Buyer at least fourteen (14) days prior to the Close of Escrow, Buyer shall have the option, in its sole discretion, to either terminate this Agreement or to accept title subject to such Parcel One Title Exceptions}. In the event Buyer elects to terminate this Agreement, all documents deposited into escrow by or on behalf of Buyer shall be returned to Buyer, and all rights and obligations hereunder shall terminate. Notwithstanding the foregoing, any mortgage, deed of trust or other monetary lien, other than non-delinquent real property taxes and assessment liens shall be elimiziated as exceptions to title by Seller on or prior to the Close of Escrow. At any time prior to the Close of Escrow, Buyer may obtain an updated title report ("Updated Title Report"), and shall have five (5) business days after receipt of the Updated Title Report to object in writing to any new exceptions shown on the report ("Buyer's Objection Notice"). In the event Buyer fails to approve any new exception shown on the Updated Title Report within the five-day period, any new exceptions on the Updated Title Report will be deemed disapproved. If Buyer objects to any Parcel One Title Exception within the five-day period or if Buyer is deemed to have disapproved' of any such Parcel One Title Exception in accordance with this Section 5, Seller shall use its best efforts at Seller's sole expense to remove from title or otherwise satisfy each such exception no later than fourteen (14) days prior to the Close of Escrow and in a form that is reasonably satisfactory to Buyer. If Seller fails to remove or satisfy any Parcel One Title Exception to the satisfaction of Buyer, Buyer shall have the option, in its sole discretion, to terminate this Agreement or to accept title subject to such Parcel One Title Exception(s). In the event Buyer elects to terminate this Agreement, all documents deposited into escrow by or on behalf of Buyer shall be returned to Buyer, and all rights and obligations hereunder shall terminate. At Close of Escrow, Title Company shall issue to Buyer a CLTA Owner's Title Insurance Policy ("Buyer Title Policy") in the amount of the Purchase Price for the benefit and protection of Buyer, showing title to Parcel One vested in Buyer, subject only to Buyer's Permitted Exceptions, including such endorsements as may reasonably be requested by Buyer ("Buyer Endorsements"). Closing Documents and Funds. 1313014.6 _l~ I ~r (a) Seller. (A) Within forty-five (45) days following Effective Date, Seller shall deposit into escrow all of the following: (i) a quitclaim deed, substantially in the form attached hereto as Exhibit F ("Quitclaim Deed"), duly executed and acknowledged, conveying to Buyer good and marketable fee simple title to Parcel One, subject only to Buyer's Permitted Exceptions; and (ii) Such additional duly executed instruments and documents as the Escrow Agent may reasonably require to consummate the transaction contemplated hereby. (B) No later than one (1) business day prior to Close of Escrow, Seller shall deposit into escrow immediately available funds in the amount necessary to pay one-half (1/2) of all escrow fees and recording fees. (b) Buyer• (A) Within forty-five (45) days following the Effective Date, Buyer shall deposit into escrow all of the following: (i) the Note and the Deed of Trust, duly executed and acknowledged by Buyer, as applicable; (ii) the Security described in Section 21(h}; (iii) Buyer's affidavit ofnon-foreign status and Buyer's certification that Buyer is a resident of California, each executed by Buyer under penalty of perjury as required by state and federal law; and (iv) such additional duly executed instruments and documents as the Escrow Agent may reasonably require to consummate the transaction contemplated hereby. (B) No less than one (1) business day prior to the Close of Escrow, Buyer shall deposit into escrow (i) all governmental conveyance fees and transfer taxes required to be paid as a condition to the conveyance of Parcel One to Buyer; (ii) one-half (1/2) of all escrow fees and recording fees; and (iii) all of Buyer's and City's title insurance and title report costs. 7. Close of Escrow. Unless this Agreement is terminated pursuant to the terms hereof, Close of Escrow shall occur no later than July 15, 2010, or on such other date as the Parties mutually agree in writing ("Closing" or "Close of Escrow"). The Escrow Agent shall close escrow by: (i) causing the Quitclaim Deed to be recorded in the official records of Alameda County, California; (ii) causing the Deed of Trust to be recorded in the official records of San Joaquin County, California; (iii) issuing the Buyer Title Policy and delivering same to Buyer; 1313014.6 4 g~ 105 (iv) issuing the City Title Policy (as defined in Section 10 (bZ(iii)) and delivering same to City (iii) delivering to Seller the Note and the Deed of Trust; and (v) delivering to Buyer the original Quitclaim Deed, together with a conformed copy thereof indicating recording information thereon. Possession of Parcel One shall be delivered to Buyer at the Close of Escrow. 8. Intentionally Omitted. 9. Prorations. At the Close of Escrow, the Escrow Agent shall make the following prorations: (i} property taxes shall be prorated as of the Close of Escrow based upon the most recent tax bill available, including any property taxes which maybe assessed after the Close of Escrow but which pertain to the period prior to the transfer of title to Parcel One to Buyer, regardless of when or to whom notice thereof is delivered; and (ii) any bond or assessment that constitutes a lien on Parcel One at the Close of Escrow shall be assumed by Buyer. Notwithstanding the foregoing, if any of the prorations described above cannot be calculated accurately as of the Close of Escrow, then the same shall be calculated as soon as reasonably practicable after the Close of Escrow and either party hereto owing the other party hereto a sum of money based on such subsequent prorations) shall promptly pay such sum to the other party, but in no event later than 10 days after demand therefor. 10. Conditions to Closing. (a) Buyer's Conditions to Closing. The Close of Escrow and Buyer's obligation to purchase Parcel One is conditioned upon: (i) the performance by Seller of each obligation to be performed by Seller under this Agreement within the applicable time period, or the waiver by Buyer of such obligation; (ii) Seller's representations and warranties contained in this Agreement being true and correct as of the Effective Date and the Close of Escrow; (iii) the commitment by Title Company to issue and deliver the Buyer Title Policy subject only to the Buyer's Permitted Exceptions at the Close of Escrow; (iv) the commitment by the Title Company to issue the Buyer's Endorsements in conjunction with the Buyer Title Policy at the Close of Escrow; and (iv) Buyer's approval of the condition of Parcel One pursuant to Section 11 Should any condition to closing fail to occur, excepting any such conditions that have been waived by Buyer, Buyer shall have the right, exercisable by giving written notice to Seller, to cancel the escrow, terminate this Agreement, and recover any and all amounts paid by Buyer to Seller or deposited with the Escrow Agent by or on behalf of Buyer. The exercise of this right 1313014.6 5 `~ ~,~ by Buyer shall not constitute a waiver by Buyer of any other rights Buyer may have at law or in equity. (b) Seller's Conditions to Closing. The Close of Escrow and Seller's obligation to sell Parcel One is conditioned upon: (i) the performance by Buyer of each obligation to be performed by Buyer under this Agreement within the applicable time period, or waiver by Seller of such obligation; (ii) Buyer's representations and warranties contained in this Agreement being true and correct as of the Effective Date and the Close of Escrow; and (iii) the commitment by the Title Company to issue and deliver to City an A.L.T.A. lender's policy of title insurance ("City Title Policy") for the benefit of the City in the amount of the Note, insuring that th? lien of the Deed of Trust is subject only to such defects, liens, conditions, encumbrances, restrictions, easements and exceptions as City may approve in writing (collectively, the "City's Permitted Exceptions") and containing such endorsements as City may reasonably require, with the cost of such City Title Policy to be paid by Buyer. 11. Additional Conditions to Closing. Buyer's obligation to purchase Parcel One is also conditioned upon Buyer's review and approval of the condition of Parcel One pursuant to this Section. (i) Feasibility Studies. During the period commencing on the Effective Date and ending on the thirty-fifth (35th) day after the Effective Date ("Buyer Due Diligence Period") Buyer may, at Buyer's expense, undertake an inspection and review of Parcel One, including without limitation (i) a review of the physical condition of Parcel One, including but not limited to, inspection and examination of soils, environmental factors, Hazardous Materials (as defined in Section 15(a)), and archeological information relating to Parcel One; (ii) a review and investigation of the effect of any zoning, maps, permits, reports, engineering data, regulations, ordinances, and laws affecting Parcel One, and (iii) an evaluation of Parcel One to determine its feasibility for Buyer's intended use. Buyer may consult with or retain civil engineers, contractors, soils and geologic engineers, architects and other specialists in its investigation, and may consult with or retain other consultants to determine if Parcel One is suitable for Buyer's intended use. If Buyer's environmental consultants require additional time to determine the existence and extent of any Hazardous Substances on Parcel One, Buyer shall have the right, exercisable by delivering written notice to Seller prior to the expiration of the Buyer Due Diligence Period, to extend the Buyer Due Diligence Period for up to fifteen (15) additional days to complete the testing at no additional cost to Buyer. (ii) Other matters. During the Buyer Due Diligence Period, Buyer may inspect, examine, survey and review any other matters concerning Parcel One, including without limitation, any and all studies or reports provided by Seller, all contracts, leases, rental agreements and other obligations relating to Parcel One, and Parcel One's confornury with all 1313014.6 6 ~ I~~ applicable laws and regulations. During the Buyer Due Diligence Period, Buyer shall have the right to perform due diligence regarding the investigation, assessment, and monitoring of the environmental condition of the Parcel One, and upon completion of the Buyer Due Diligence Period, unless Buyer elects to terminate this Agreement pursuant to any of the terms set forth in this Agreement, Buyer will purchase Parcel One in its "AS IS" condition as such condition exists at the end of the Buyer Due Diligence Period, subject only to Seller's express agreements, covenants, representations and warranties set forth in this Agreement. (iii) Disapproval of Property Condition. Should Buyer fail to approve the condition of Parcel One or its feasibility for Buyer's intended use in writing within five (5) days following the end of the Buyer Due Diligence Period, Buyer shall have the right, exercisable by giving written notice to Seller, to cancel the escrow, terminate this Agreement, and recover any and all amounts paid by Buyer to Seller or deposited with the Escrow Agent by or on behalf of Buyer. The exercise of this right by Buyer shall not constitute a waiver by Buyer of any other ;fights Buyer may have at law or in equity. 12. Intentionally Omitted. 13. Studies, Reports and Investigations. Seller agrees to make available to Buyer within five (5) business days following the Effective Date, any and all information, studies, reports, investigations, contracts, leases, rental agreements and other documents concerning or relating to Parcel One which are in Seller's possession or which are reasonably available to Seller, including without limitation surveys, studies, reports and investigations concerning Parcel One's physical, environmental or geological condition, habitability, or the presence or absence of Hazardous Materials in, on or under Parcel One and the compliance by Parcel One with Environmental Laws (as defined in Section 15(a) 14. Right of Entry. During the Buyer Due Diligence Period, Buyer and Buyer's agents shall have the right, upon reasonable notice to Seller, to enter upon Parcel One for the purpose of inspecting, examining, surveying and reviewing Parcel One in accordance with Section 11, Buyer's inspection, examination, survey and review of Parcel One shall be at Buyer's sole expense. Buyer shall obtain Seller's advance consent in writing to any proposed physical testing of Parcel One by Buyer or Buyer's agents, which consent shall not be unreasonably conditioned, withheld or delayed. Buyer shall repair, restore and return Parcel One to its original condition after such physical testing, at Buyer's sole expense. Buyer shall schedule any such physical tests during normal business hours unless otherwise approved by Seller. Buyer shall assure that its contractors maintain, public liability and property damage insurance with a combined single limit of not less than $2,000,000 to insure against all liability of Buyer and its agents, employees or contractors, arising out of any entry or inspections of Parcel One pursuant to the provisions hereof, and Buyer shall provide Seller with reasonable evidence of such insurance coverage upon request by Seller. Buyer agrees to indemnify Seller and hold Seller harmless from and against all liability, loss, cost, damage and expense (including, without limitation, reasonable attorney's fees and costs of litigation) resulting from Buyer's or Buyer`s agents entry upon Parcel One, except to the extent that such liability, loss, cost, damage and expense arises as a result of the negligence or other wrongful conduct of Seller or its agents. 1313014.6 u ~,os 15. Condition of Parcel One . (a) Defmitions. (i) "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, agency or governmental body, and includes without limitation (i} petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference} as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000; et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfund" or "Superlien" law, or any Environmental Law; (v) any material determined to be hazardous based on deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity; or (vi) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. (ii) "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental 1313014.6 k~~~ Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. (b) No Representations by Seller. Buyer acknowledges that except as expressly set forth herein, Seller makes no representations or warranties express or implied regarding the condition of Parcel One or the fitness or suitability thereof for Buyer's purposes, including but not limited to, the condition of the soil, its geology, topography, the presence or absence of fill, the presence or absence of Hazardous Materials, drainage, flood zone designation, access to public roads, or compliance with Environmental Laws, and no patent or latent defect or deficiency in the condition of Parcel One shall affect the rights of Buyer or Seller hereunder. Buyer shall rely solely on its own independent investigation and judgment as to all matters relating to Parcel One. Seller shall have no responsibility to undertake any environmental remediation nor any responsibility for site preparation, demolition; or any other construction or pre-construction activity. Buyer acknowledges and agrees that it shall make such investigations of Parcel One, including without limitation, such inquiries of governmental agencies, soils testing, tests and inspections as Buyer deems necessary to determine the condition of Parcel One, and that if Buyer does not terminate this Agreement by written notice prior to expiration of the Buyer Due Diligence Period, Buyer shall be deemed to have approved all such characteristics and conditions and shall purchase Parcel One in its condition as of the end of such period "AS- IS" "WHERE-IS" AND "WITH ALL FAULTS" but subject to Seller's express agreements, covenants, representations and warranties set forth in this Agreement. If following the Buyer Due Diligence Period, provided that Buyer has not terminated this Agreement in accordance with the terms hereof, Buyer determines that the condition of Parcel One, as it existed during the Buyer Due Diligence Period, is not in all respects entirely suitable for Buyer's proposed uses of Parcel One, then, subject to the provisions of Section 20 below, it shall be the sole responsibility and obligation of Buyer to correct any soil, subsurface, or structural conditions, demolish any improvements, and otherwise put Parcel One in a condition suitable for Buyer's uses. Subject to the provisions of Section 20 below, Buyer hereby waives any right to seek reimbursement from Seller for costs Buyer incurs in connection with the correction of any physical condition on Parcel One except to the extent such costs are related to Hazardous Materials known to Seller but not disclosed to Buyer. (c) Release of Claims by Buyer. Buyer hereby waives its right to recover from releases and discharges forever Seller and its elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the "Seller Releasees") from all present and future liability, claims, and/or responsibility that Buyer may now have or hereafter acquire against any 1313014.6 1Y ~fi, o~ ~l of the Seller Releasees for any loss, cost, expense (including without limitation attorneys' fees and costs of litigation), demand, action, penalty, deficiency, fine, order, and damage (all of the foregoing collectively "Buyer Claims") arising out of or in any way connected with the condition of Parcel One, any Hazardous Materials on, under, in or about Parcel One, or the existence of Hazardous Materials contamination due to the generation of Hazardous Materials from Parcel One, however they came to be placed there, except to the extent the Buyer Claims arise out of, result from or are based on the gross negligence or willful misconduct of the Seller Releasees or upon the breach of any agreement, covenant, representation or warranty of Seller hereunder, and provided that under no condition shall this release be deemed to waive or release any obligation of Seller or any other Seller Releasee that is created by this Agreement. Buyer is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST H MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR As such relates to th~i ection 15 c ,Buyer hereby waives and relinquishes all rights and benefits which it may have'}. ~r Section 1542 of the California Civil Code. Buyer's Notwithstanding the foregoing, nothing set forth in this Section 15(c) shall be interpreted as an agreement by Buyer to indemnify, defend, and/or hold Seller or any Seller Releasee harmless from any against any liability, claims, andlor responsibility for any loss, cost, expense (including without limitation attorneys' fees and costs of litigation), demand, action, penalty, deficiency, fine, order, and damage arising out of or in any way connected with the condition of Parcel One, any Hazardous Materials on, under, in or about Parcel One, or the existence of Hazardous Materials contamination due to the generation of Hazardous Materials from Parcel One, where such claims are initiated, prosecuted or threatened by any third party ("Third Party Claims"). 16. Buyer's Representations and Warranties. (a) Intentionally Omitted. (b) Buyer represents and warrants that this Agreement and all other documents delivered or to be delivered in connection herewith prior to or at the Close of Escrow: (a) have been duly authorized, executed, and delivered by Buyer; (b) are binding obligations of Buyer; and (c) do not violate the provisions of any agreement to which Buyer is a party or which affects Parcel Two. (c) Buyer further represents and warrants that the persons who have executed this 1313014.6 10 w~~~ Agreement on behalf of Buyer are authorized to do, that Buyer has the legal right to enter into this Agreement and to perform all of its terms and conditions, and that this Agreement is enforceable against Buyer in accordance with its terms. (d) Buyer further represents and warrants that alI requisite action has been taken by Buyer in connection with the execution and delivery of all of the instruments referenced in this Agreement that Buyer is required to execute, and the consummation of the transaction contemplated under this Agreement. (e) Buyer further represents and warrants that the individual(s) executing the instruments referenced in this Agreement on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and conditions thereof. (f) Intentionally Omitted. (g) Intentionally Omitted. (h) Intentionally Omitted. (i) Buyer shall notify City of any facts that would cause any of the representations contained in this Agreement to be untrue as of the Close of Escrow. If City reasonably believes that a fact materially and adversely affects Parcel Two, City shall have the option to terminate this Agreement by delivering written notice thereof to Buyer. In the event City elects to terminate this Agreement, all funds and documents deposited into escrow by or on behalf of City shall be returned to City, and all rights and obligations hereunder shall terminate. (j) Buyer shall indemnify, defend and hold harmless City and its elected and appointed officers; officials, employees, agents, consultants, and contractors (collectively, "City Indeznnitees"} from all liability, loss, cost, expense (including, without limitation attorneys' fees and costs of litigation), claims, demands, actions, suit, judicial or administrative proceedings, penalty, deficiencies, fine, order and damage incurred by reason of, or in any manner resulting from the breach of any representation or warranty contained in this Section. 17. Seller's Representations and Warranties. (a) Intentionally Omitted. (b) Seller represents, warrants and covenants that this Agreement and all other documents delivered in connection herewith, prior to or at the Close of Escrow: (i) have been duly authorized, executed, and delivered by Seller; (ii} are binding obligations of Seller; (iii) are collectively sufficient to transfer all of Seller's right, title and interest in and to Parcel One; and (iv) do not violate the provisions of any agreement to which Seller is a party. Seller further represents and warrants that the persons who have executed this Agreement on behalf of Seller are duly authorized to do, that Seller has the legal right to enter into this Agreement and to perform all of its terms and conditions, and that this Agreement is enforceable against Seller in 1313014.6 11 ~o~ accordance with its terms. (c) Seller further represents and warrants that Seller has the legal power, right and authority to execute all of the instruments referenced in this Agreement that Seller is required to execute, and to consummate the transaction contemplated under this Agreement. (d) Seller further represents and warrants that all requisite action has been taken by Seller in connection with the execution and delivery of all of the instruments referenced in this Agreement that Seller is required to execute, and the consummation of the transaction contemplated under this Agreement. (e) Seller further represents and warrants that the individual(s) executing the instruments referenced in this Agreement onbehalf of Seller have the legal power, right and actual authority to bind Seller to the terms and conditions thereof. {f) Seller further represents and warrants that except (i) as previously disclosed in writing to Buyer, and (ii) as set forth in the Buyer Title Report, to the actual knowledge of Seller, there are no written commitments to, or understandings or agreements with, any private party or any governmental authority or agency that would materially adversely affect the development of Parcel One. Seller has not entered into any other contracts for the sale of Parcel One which are currently in effect, nor do there exist any rights. of first refusal or options to purchase Parcel One. (g) Seller further represents and warrants that there is no litigation or legal proceeding pending in writing against the Seller or Parcel One that could reasonably be expected to materially adversely affect Seller's or Buyer's ability to perform their respective obligations hereunder. (h) Seller further represents and warrants that except (i) as previously disclosed in writing to Buyer, and (ii) as set forth in the Buyer Title Report, to the actual knowledge of Seller, there are no unrecorded leases, licenses, or other possessory interests in Parcel One. (i) Seller shall notify Buyer of any facts that would cause any of the representations contained in this Agreement to be untrue as of the Close of Escrow. If Buyer reasonably believes that a fact materially and adversely affects Parcel One, Buyer shall have the option to terminate this Agreement by delivering written notice thereof to Seller. In the event Buyer elects to terminate this Agreement, all funds and documents deposited into escrow by or on behalf of Buyer shall be returned to Buyer, and all rights and obligations hereunder shall terminate. (j) Seller shall indemnify, defend and hold harmless Buyer and its managers, members, officers, employees, agents, consultants, contractors, successors and assigns (collectively, "Buyer Indemnitees") from all liability, loss, cost, expense (including, without limitation attorneys' fees and costs of litigation), claims, demands, actions, suit, judicial or administrative proceedings, penalty, deficiencies, fine, order and damage incurred by reason of, or in any manner resulting from the breach of any representation or warranty contained in this Section. 1313014.6 12 ~ e o> 18. Seller's Covenants. Seller covenants that from the Effective Date and through the Close of Escrow, Seller: (i} shall not permit any liens, encumbrances, or easements to be placed on Parcel One, other than Buyer's Permitted Exceptions; (ii) shall not enter into any agreement regarding the use, sale, rental, management, repair, improvement, or any other matter affecting Parcel One that would be binding on Buyer or Parcel One after the Close of Escrow without the prior written consent of Buyer; (iii) shall not permit any act of waste or act that would tend to diminish the value of Parcel One for any reason, except that caused by ordinary wear and tear; and (iv) shall maintain Parcel One in its condition as of the Effective Date, ordinary wear and tear excepted, and shall manage Parcel One substantially in accordance with Seller's established practices. 19. Intentionally Omitted. 20. Damage and Destruction. In the event of any damage or other loss to Parcel One, or any portion thereof, caused by fire or other casualty prior to the Close of Escrow in an amount not exceeding $50,000, Buyer shall not be entitled to terminate this Agreement, but shall be obligated to close the escrow and purchase Parcel One as provided in this Agreement, without abatement in the Parcel One Purchase Price, provided that Seller shall: (i) assign and transfer to Buyer all of Seller's rights under any insurance policy covering the damage or loss, and all claims for monies payable from Seller's insurer(s) in connection with the damage or loss, and (ii) pay to Buyer at the Close of Escrow the amount of Seller's deductible under the insurance policy or policies covering the damage or loss. In the event of damage or destruction of Parcel One or any portion thereof prior to the Close of Escrow in an amount in excess of $50,000, Buyer may elect either to terminate this Agreement upon written notice to Seller, or to consummate the purchase of Parcel One, in which case Seller shall (i) assign and transfer to Buyer all of Seller's rights under any insurance policy covering the damage or loss, and all claims for monies payable from Seller's insurer(s) in connection with the damage or loss, and (ii) pay to Buyer at the Close of Escrow the amount of Seller's deductible under the insurance policy or policies covering the damage or loss.. In the event Buyer elects to terminate this Agreement pursuant to this Section, all funds and documents deposited into escrow by or on behalf of Buyer shall be returned to Buyer, and all rights and obligations hereunder shall terminate. 21. Construction of Right-of--Way Improvements. Buyer shall construct the Right- of-Way Improvements, at Buyer's sole cost and expense, in accordance with the following terms: (a) Construction Schedule. Buyer shall complete construction of the Right- of-Way Improvements on Parcel Three by August 15, 2010, unless otherwise agreed to in writing by both Parties. Buyer shall complete construction of the Right-of--Way Improvements on Parcel Two by December 1, 2010, unless otherwise agreed to in writing by both Parties. Notwithstanding the foregoing, the Parties expressly acknowledge and agree that if this Agreement is terminated for any reason prior to the Close of Escrow, Buyer's obligation to construct the Right-of--Way Improvements and all of Buyer's related obligations under this Section 21 shall likewise terminate immediately effective upon the date that this Agreement is terminated. 1313014.6 13 ~~ ~,~. (b) Approval of Plans and Specifications. Prior to commencement of construction of the Right-of--Way Improvements, Buyer shall submit the plans and specifications for~the Right-of--Way Improvements ("Plans and Specifications") to the City for its approval. If Buyer desires to make any material change in the approved Plans and Specifications prior to or during the course of construction, Buyer shall submit the proposed change in writing to City in accordance with its standard review process. (c) Equal Opportunity. During the construction of the Right-of--Way Improvements, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction of the Right of-Way Improvements, and Buyer shall direct its contractors and subcontractors to refrain from discrimination on such basis. (d} Prevailing Wage Requirements. Buyer shall pay or shall cause Buyer's contractors and subcontractors to pay prevailing wages for the construction of the Right-of-Way Improvements as those wages are determined pursuant to California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto ("Prevailing Wage Laws"). Buyer shall also comply or shall cause its contractors and subcontractors to comply with all applicable local, federal, and state labor standards and prevailing wage provisions. Buyer shall indemnify, defend (with counsel approved by City, which approval shall not be unreasonably withheld) and hold the City Indemnitees harmless from and against all Third Party Claims which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all '~ claims that maybe made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competitive bidding in the construction of the Right-of--Way Improvements, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Buyer related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Third Party Claims. It is further agreed that City does not and shall not waive any rights against Buyer which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Buyer's deposit with City of, any of the insurance policies described in this Agreement. The provisions of this Section 21(d) shall survive the expiration or earlier termination of this Agreement. Buyer's indemnification obligations set forth in this Section shall not apply to Third Party Claims arising fram the gross negligence or willful misconduct of the City Indemnitees. (e) Compliance with Laws. Buyer shall carry out and shall cause its contractors to carry out the construction of the Right-of--Way Improvements in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions 1313014.6 14 ~~:~ IOS of the City's Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.. Buyer shall indemnify, defend (with counsel approved by City) and hold harmless the City Indemnitees from and against any and all Third Party Claims arising in connection with the breach of Buyer's obligations set forth in this Section whether or not any insurance policies shall have been determined to be applicable to any such Third Party Claims. It is further agreed that City does not and shall not waive any rights against Buyer which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Buyer's deposit with City of any of the insurance policies described in this Agreement. Buyer's indemnification obligations set forth in this Section shall not apply to Third Party Claims arising from the gross negligence or willful misconduct of the City Indemnitees. Buyer's defense and indemnification obligations set forth in this Section 21 e shall survive the expiration or earlier termination of this Agreement. (f) Insurance. Prior to commencing construction of the Right-of--Way Improvements, Buyer shall obtain, or cause to be obtained and filed with City, all insurance required under this paragraph, and such insurance shall have been approved by the Administrative Services Director of City, or his designee, as to form, amount and carrier. Prior to commencing construction of the Right-of--Way Improvements, Buyer's general contractor _ shall obtain, or cause to be obtained and filed with the Administrative Services Director, all ~._.. insurance required under this paragraph, and such insurance shall have been approved by the Administrative Services Director of City as to form, amount and carrier. Buyer shall not allow any contractor or subcontractor to commence construction of the Right-of--Way Improvements until all insurance required by this paragraph has been obtained and approved. Said insurance shall be maintained in full force and effect until the completion of the Right-of--Way Improvements and the final acceptance thereof by City. All requirements herein provided shall appear either in the body of the insurance policies or as endorsements and shall specifically bind the insurance carrier. Minimum Scope of Insurance. Coverage shall be at least as broad as: (i) Insurance Services Office form number GL 0002 (Ed. 1/73) covering comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability; or Insurance Services Office Commercial General Liability coverage ("occurrence" form CG 0001.) (ii) .Insurance Services Office form number CA 0001 (Ed. 1/78) covering Automobile Liability, code 1 "any auto" and endorsement CA 0025. (iii) Workers' Compensation insurance as required by the Labor Code of the State of California and Employers Liability Insurance. 1313014.6 1 S ~~ A~9~ Minimum Limits of Insurance. Coverage shall contain limits no Less than: (i) General Liability: $1,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. (ii) Automobile Liability: $1,000,000 combined single limit per accident for bodily injury and property damage. (iii) Workers' Compensation and Employers Liability: Workers' compensation limits as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. 3. Deductibles and Self-Insurance Retentions. Any deductibles or self- insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City, its officers, officials and employees; or Buyer shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. 4. Other Insurance Provisions. The policies are to contain, or be endorsed to contain, the following provisions: (i) General Liability and Automobile Liability Coverages. (a) The City Indemnitees shall be named as additional insureds as respects. The coverage shall contain no special limitations on the scope of the protection afforded to City Indemnitees. (b) Buyer's insurance coverage shall be primary insurance as respect to the City Indemnitees. Any insurance or self- insurance maintained by the City Indemnitees shall be excess of Buyer's insurance and shall not contribute with it. (c) Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City Indemnitees. (d) The Buyer's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 1313014.6 16 (ii) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City Indemnitees for losses arising from work performed by Buyer. (iii) AlI Coverages. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to City. (a) Acceptability of Insurers. Insurance is to be placed with insurers with a Bests' rating of no less than A:VII. (b) Verification of Coverage. Buyer shall famish City with certificates of insurance and with original endorsements effecting coverage required by this clause. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be received and approved by City before work commences. City reserves the right to require complete, certified copies of all required insurance policies, at any time. Subcontractors. Buyer and/or Buyer's general contractor shall include all subcontractors as insureds under its policies or shall obtain separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. (g) Construction Indemnity. Buyer shall indemnify, defend (with counsel approved by City) and hold harmless the City Indemnitees from and against any and all Third Party Claims which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to the construction of the Right-of--Way Improvements whether or not any insurance policies shall have been determined to be applicable to any such Third Party Claims. It is further agreed that City does not and shall not waive any rights against Buyer which it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Buyer's deposit with City of, any of the insurance policies described in this Agreement. The provisions of this Section 21(x) shall survive the expiration or earlier termination of this Agreement. Buyer's indemnification obligations set forth in this Section shall not apply to Third Party Claims arising from the gross negligence or willful misconduct of the City Indemnitees. (h) Bonds. Within the time set forth in Section 6(b), Buyer shall deposit into 1313014.6 17 ai ~ ~nS Escrow the following security in a form satisfactory to the City Attorney (collectively, "Security"): a. Faithful Performance. Either a cash deposit, a corporate surety bond issued by a company duly and legally licensed to conduct a general surety business in the State of California, or an instrument of credit equivalent to one hundred percent (100%) of the Credit and sufficient to assure City that the Right-of--Way Improvements will be satisfactorily completed. b. Labor and Materials. Either a cash deposit, a corporate surety bond issued by a company duly and legally licensed to conduct a general surety business in the State of California, or an instrument of credit equivalent to one hundred percent (100%) of the Credit and sufficient to assure City that Buyer's contractors, subcontractors, and other persons furnishing labor, materials, or equipment shall be paid therefor. City shall be the sole indemrritee named on any instrument required pursuant to this paragraph. Any instrument or deposit required pursuant to this paragraph shall conform to the provisions of Chapter 5 of the Subdivision Map Act. (i) Right of Entry. City grants to Buyer a right of entry to enter upon Parcel Three with such personnel, equipment, machinery, vehicles and materials as maybe necessary for the sole purpose of construction of the Right-of--Way Improvements pursuant to this Agreement. This right of entry shall be effective upon March 1, 2010 and shall terminate upon acceptance ofRight-of--Way Improvements by the City. There shall be no payment for the right of entry. Buyer's obligation to indemnify, defend and hold City Indemnitees harmless, as described in Section 21(x), shall be applicable to any acts or omissions of Buyer, its contractors, subcontractors and agents, in connection with this right of entry. (j) Acceptance of Right-of-Wa~provements. Upon completion of the Right-of--Way Improvements on Parcel Three by Buyer, Buyer shall deliver to the City a written notice of completion of the Right-of--Way Improvements ("Notice of Completion") together with a set of final as-built mylar plans with electronic files. Following the City's receipt of the Notice of Completion, the City, through its City Engineer or his designated representative, shall examine the Right-of--Way Improvements on Parcel Three, and, if found to be in accordance with the Plans and Specif cations and this Agreement, shall recommend acceptance of the Right-of- Way Improvements on Parcel Three to the City Council. Upon completion of the Right-of--Way Improvements on Parcel Two by Buyer, Buyer shall deliver to the City a Notice of Completion together with (i) a set of final as-built mylar plans with electronic files; and (ii) the Grant of Easement, duly executed and acknowledged by Buyer. Following the City's receipt of the Notice of Completion, the City, through its City Engineer or his designated representative, shall examine the Right-of--Way Improvements on Parcel Two, and, if found to be in accordance with the Plans and Specifications and this Agreement, shall recommend acceptance of the Right-of--Way Improvements on Parcel Two and the Grant of Easement to the City Council. 1313014.6 1$ ~' ~ ios 22. Assi n,~ merit. Neither Party may assign by operation of law or otherwise all or part of its rights or obligations under this Agreement without the prior written consent of the other Party, and any such assignment by operation of law or otherwise shall be void. 23. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is conf rmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; (iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first- class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.rn. recipient's time or on a nonbusiness day. Buyer: KBH Investments, LLC 7099 Amador Plaza Rd. Dublin, CA 94568 Attention: Ken Harvey with a copy to: Greenan, Peffer, Sallander & Lally LLP 6111 Bollinger Canyon Road, Suite 500 San Ramon, CA 94583 Attention: Ray Peffer, Esq. Seller: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager with a copy to: Meyers, Nave, Riback, Silver & Wilson 555 12th Street, Suite 1500 Oakland, CA 94607 Attention: John Bakker 1313014,6 19 ~~ i~~~ 24. Litigation Costs. If any legal action or any other proceeding, including arbitration or action for declaratory relief, is brought for the enforcement of this Agreement or because of an alleged breach or default in connection with this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and other costs, in addition to any other relief to which such Party maybe entitled. 25. Waivers: Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the waiving party. This Agreement maybe amended or modified only by a written instrument executed by the Parties. 26. Successors. This Agreement shall bind and inure to the benefit of the respective heirs, personal representatives, successors and assignees of the Parties. 27. Provisions Not Merged. None of the provisions, terms, representations, warranties and covenants of this Agreement are intended to or shall be merged by the Quitclaim Deed or the Grant of Easement, and neither the Quitclaim Deed or the Grant of Easement nor any other document shall effect or impair the provisions, terms, representations, warranties and covenants contained herein. Without limiting the generality of the foregoing, Buyer's and Seller's representations, warranties and covenants contained herein shall survive the Close of Escrow. 28. Construction. The section headings used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 29. Action or Approval. Where action and/or approval by City is required under this Agreement, City's City Manager may act on and/or approve such matter unless the City Manager determines in his or her discretion that such action or approval requires referral to the City Council for consideration. 30. Entire Agreement. This Agreement, including Exhibits A to I attached hereto and incorporated herein by this reference, contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter thereto. 1313014.6 20 a~~ ~~s' 31. Counterparts. This Agreement maybe executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. 32. Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged thereby. 33. No Third Party Beneficiaries. Nothing in this Agreement is intended to or shall confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder. 34. Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. 35. Non-Liability of Officials, Employees and Agents. No member, official, employee or agent of Seller shall be personally liable to Buyer or its successors in interest in the event of any default or breach by Seller or for any amount which may become due to Buyer or its successors in interest pursuant to this Agreement. 36. Time of the Essence. Time is of the essence for each condition, term, obligation and provision o this Agreement. 37. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. 38. Time for Performance. When the time for performance of any obligation under this Agreement is to be measured from another event, such time period shall include the day of the other event. If the day of the time for performance is not a regular business day, then the time for such performance shall be by the regular business day following such day. SIGNATURES ON FOLLOWING PAGE. 1313014.6 21 ash i~~ IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. SELLER: ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney CITY OF DUBLIN, a municipal corporation By: City Manager BUYER: KBH INVES ME T LLC, a California 1' ite 1' bility company r ~ / ~~ By:, I ~ ts: ~ 7 ~ ~c " - v ~ 1313014.6 22 ~ ~ lob EXHIBIT A Parcel One (Attach legal description) 1313014.6 23 Scarlett Court City of Dublin County of Alameda Exhibit "A" Legal Description Right of Way Abandoz~znent ~7 ~ osr Page 1 of Real pz-operty situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel 4 as shown on the plat in the proposed relinquishment deed to the County of Alameda recorded on April 30, 1970, in Reel 2608 at Image 205, and later relinquished to the County of Alameda an July 27, 1970 in Ree12661 at Image 819, Offcial Records of the County of Alameda, State of California, a portioza of the parcel to the County of Alameda as recorded on May 14, 1969 in Ree12402 at Image 255, Official Records of the County of Alameda, State of California and a portion of Scarlett Court shown on the map entitled Parcel Map 9185 filed on July 29, 2008 in Baolc 308 of Parcel Maps at Page 57, Alameda County Records, described as follows: Beginning on the northeastern line of said Parcel 4, being the noz-theastern line of Scarlett Court and the southwestern corner of Parcel B of said Parcel Map 9185; thence along said northeastern line, South 32°48'00"East, 143.43 feet to a curve to the left having a radius of 572.00 feet, a delta of 24°45'01 "; thence along said curve an arc length of 247.09 feet to a non-tangezat curve to the left having a radial which bears North 63°23'48" West, a radius of 50.50 feet, a delta of 74°1G'13"; thence leaving said northeastern line, southerly along said curve an arc length of 65.46 feet to the southwestern line of said Parcel 4, also being the southwestern line of Scarlett Court; thence along said southwestern luxe, Naz-th 61°40'00"West, 108.83 feet to anon-tangent curve to the right having a radial which bears South 38°34'13" West, a radius of 628.00 feet, a delta of 18°37'41 "; thence northwesterly along said curve an arc length of 204.18 feet; thence North 32°48'00"West, 365.64 feet; thence leaving said southwestern line, Noz-th O1°12'36"East, 13.41 feet; thence North 32°48'00"West, 77.76 feet to a curve to the right having a radius of 85.50 feet, a delta of 33°04'50"; thence along said curve an arc length of 49.36 feet; thence North 32°51'13"West, 12.81 feet; thence North 57°08'47"East, 56.85 feet to the southwestern line of said Parcel B and a point of cusp having a radial which bears North 32°51'13" West, a radius of 22.00 feet, a delta of 14°38'39"; thence southweste~•ly along last said line and said curve an arc length of 5.62 feet to a non- tangent curve to the left having a radial which bears North 74°39'33" West, a z-adius of 50.00 feet, a delta of 48°08'27"; thence southwesterly and southerly along said curve an arc length of 42.01 feet; thence, South 32°48'00"East, 332.G6 feet to the Point of Beginning. Contaiziing 42,288 Sq. Ft. ~ Reserving there from the following described easements: Created on 8/27/2009 2:41 PM G:\AdzninUobs-09\09IOS5\SURVEY\scarlett with resezves.doc EXHIBIT A Scarlett Court City of Dublin County of Alameda Exhibit "A" Legal Description Right of Way Abandonment Public Utility Easement Being all the above described parcel. Emergency Vehicle Access Easement Page2of3 Real property situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel 4 as shown on the plat in the proposed relinquishzrzent deed to the County ofAlameda z-ecorded on April 30, 1970, in Reel 2608 at Tznage 205, and later relinquished to the County of Alameda ozl July 27, 1970 in Reel 2661 at Image 819, Official Records ofthe County of Alameda, State of California, a portion of the parcel to the County of Alameda as recorded on May 14, 1969 in Ree12402 at linage 255, Official Records of the County of Alameda, State of California, described as follows: Commencing on the northeastern line of said Parcel 4, being the northeastez-n line of Scarlett Court and the southwestern corner of Parcel B of Parcel Map 9185 filed on July 29, 2008 in Book 308 of Parcel Maps at Page 57, Alameda County Records; thence along said northeastern line, North 32°48'00"West, 34.42 feet to anon-tangent curve to the left having a radial which bears North 32°48'00" West, a radius of 28.00 feet, a delta of 90°00'00"; thence leaving last said line, and southwesterly, and southerly along said curve an arc length of 43.98 feet; thence, South 32°48'00"East, 149.85 feet, said point being on a-curve to the left having a radius of 600.00 feet, a delta of 17°45'14"; thence along said curve an arc length of 185.92 feet to a compound curve having a radius of 280.00 feet, a delta of 11 °OG'4G"; thence along said curve an arc length of 54.31 feet; thence South 61 °40'00"East, 27.22 feet to the eastern line of the above described parcel, said point being on anon-tangent curve to the left having a radial which bears South 88°39'37" West, a radius of 50.50 feet, a delta of 33°20'15"; thence southerly along said eastern line, and said curve an arc length of 29.38 feet to a point to be referred to as Point "A"; thence leaving said eastern line, North 61 °40'00"West, 48.18 feet to a curve to the right having a radius of 300.00 feet, a delta of 11 °06'46"; thence along said curve an arc length of 58.19 feet to a compound curve having a radius of 620.00 feet, a delta of l7°45'14"; thence. along said curve an arc length of 192.12 feet; thence, North 32°48'00"West, 197.86 feet; thence North 57°12'00"East, 48.00 feet to said northeastern line; thence along said noz-theasten~ line, South 32°48'00"East, 20.01 feet to the Point of Beginning. Containing 10,304 Sq. Ft. ~ Created on 8/27/2009 2:41 PM G:\Adznin\.Iobs-09\091055\SURVEY\scarlett with reserves.doc Scarlett Court City of Dublin County of Alameda Storm Drain Easement Exhibit "A" Legal. Description Right of Way Abandozzixzent Page 3 of 3_ `r'-,~~lj ~~ Real pz-aperty situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel 4 as shown on the plat izl tl~e proposed relinquishment deed to the County of Alameda recorded on April 30, 1970, in Reel 2608 at Image 205, and. later relinquished to the County of Alameda on 3uly 27, 1970 izl Ree12661 at Image 819, Official Records of the County of Alameda, State of California, described as follows: Beginning at the fore mezZtioned "Point A"; thence, along said southwestern line of Scarlett Court, North 61°40'00"West, 38.26 feet; thence North 28°20'00"East, 47.48 feet to said northeastern line of Scarlett Court and a point of cusp, being a curve to the left radial which bears North 63°23'48" West, a radius of 50.50 feet, a delta of 74°16'13"; thence southerly and southeasterly along said curve an arc length of 65.46 feet to the Point of Beginning. Containing 483 Sq. Ft. ~ -t..r~i Ch'arl.es ellznan L.S. 5186 Date ~~g~~S S~~L `' No. 5186 ~~. o6~so-1j , Qfi Created on 8/27/2009 2:41 PM G:~Adrnin~.Yobs-09\091055~SURVEY~scarlett with reserves.dac ~~~~~ i ~, ~ ~ i --- N ._ ~ 0 100 200 ~ (IN roc ) ~.,~ ~ 1 inch = 100 f~. X914 \ ~ ------ ~~ ~'~ ~ ,~ ~ ?~ ° s?~r~~ DET IL "A" NOT TO SCALE ~ LEGEND \ ~~ ~ EX EVAE PER ~ MAP 9185 aG ~ ~ pARC I/L B ~j,, _ PARCEL MAP 9 ~ ~5 ~ BK 30~ PARC.~L MAPS PG ~7 ~ ~ ~- EXISTING STREET ~\ P.O.B. \ RIGHT OF WAY I ~ ~~~ ~ TO BE ABANDONED ~~ ~ ~ 42,2881 SQ.FT. j ~ \ \ PARCEL A ~ ~ PARC1/L MAP 5i 3~ ~ \ \ BK X08 PARCEL MAPS PG 57 0' EI~AE 2 ~. ~. ~ I P.O.B. (R) {T) SQ.FT. EVAE SDE a~~P~ SEE /~ POINT OF BEGINNING RADIAL TOTAL SQUARE FEET EMERGENCY VEHICLE ACCESS EASEMENT STORM DRAIN EASEMENT EXHIBIT B PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR STREET RIGHT OF WAY ABANDONMENT CITY OF DUBLIN, AI.AMEDA COUNTY, CALIFORNIA ~ ~~ SHEET 1 OF 2 6VtblM~pjFpwi-W7wiekMsb.L•d~'.d~0 .~. 1 RUGGERI-JENSEN~AZAR ENGINEERS • PLANNERS ^ SURVEYORS 4690 CHABOT DRIVE, SUI7E 200 PLEASANTON, CA 94588 PHONE: (925) 227-9100 FAX: (925) 227-9300 SCALE: ©ATE: JOB NO.: 1"=100' 9-11-09 091055 LINE TABLE N0. BEARING DISTANCE L 1 S32'48'00"E 143 43' L2 N61'40'00"W 108.83' L3 N32'48'00"W 365.64' L4 N0172'36"E 13.41' L5 N32'48'00"W 77.76' L6 N32'S1'13"W 12.81' L7 N57'OS'47"E 56.85' L8 S32'48'00"E 332.66' CURVE TABLE ND. RADIUS DELTA LENGTH Cl 572.00' 24 45'01 " 247.09' C2 50.50' 7476'13" 65.46' C3 628.00' 18'37'41 " 204.18' C4 85.50' 33'04'50" 49.36' C5 22.00' 1438'39" 5.62' C6 50.00' 48'08'27" 42 01' ~~~~ ~~~~ ~~¢~ ~~~~ ~~ ~ ~~~ / ~a~ \ \ ~^~ \ ~",~~ ~~ `S,d i i i -N- \ 0 100 200 ~~ \ ~ (IN FEET ) ,~~ 1 inch = 100 ft. ~~ \ EX EVAE PER MAP 9185 LINE TABLE N0. BEARING DISTANCE L 1 S32'48'04 "E 149.85' L2 S61'44'00"E 27.22' L3 N61 '40'00 "W 48.1 B' L4 N32'48'00"W 197.86' L5 N57'12'04"E 48.00' L6 S32'4$'40"E 20.01' L7 N6)'44'00"W 38.26' L8 N2820'00"E 47.48' L9 N32 48'00"W 34.42' CUR#/E TABLE N0. RADIUS DELTA LENGTH Cl 28.00' 90 00'00" 43.98' C2 604.00' 17 45'14" 185.92' C3 280.00' 1106'46" 54.31' C4 50.50' 33 20'15" 29.38' C5 300.04' 11'06'46" 58.19' ~i \ \ \ ~'~` `I _ N32'48'00"W R PARCEL MAPE9l a~ BK X08 ~ <L~ 6' P.O.B. EVAE PARCEL MAPS PG 57 CUR I/E TABLE N0. RADIUS DELTA LENGTH C6 620.00' 17'45'14" 192.12' C7 50.50' 7476'13" 65, 46' C8 640.00' 4 56'30" 51.75' \ ~ P.D.C. EVAE ~~ ~~~- EI/AEN14,304f SQ.FT. ! ~ Y" ~ ~~ ~~ j \ , ~.~AE PARCEL A ! ~~ ~ 2p PARCEL MAP 9 ] 55 ~ BK 305 PARCEL MAPS PC ~7 ~\ ~~ \ \ p~~ ~ ~ LEGEND ~~' ~ ~ 'S°' , ~~ ~"~ o °; N P.O.B. POINT OF BEGINNING \ ~ `~ ~6 ~ w w ~ P.O.C. PO#NT OE COMMENCEMENT ~ ~ ~ (R} RADIAL (T} TOTAL SQ.FT, SQUARE FEET EVAE EMERGENCY VEHICLE ACCESS EASEMENT SDE STORM DRAIN EASEMENT EXHIBIT B PLAT TO ACCOMPANY LEGAL DESCRIPTION. FOR STREET RIGHT OF WAY ABANDONMENT CI`T'Y OF DUBLIN, ALAMEDA COUNTY, CALT~'ORNiA ~~ z ! cs ~!? L8 ~ - ! SDEN483t SQ.~ 2~2y9s9 L 7(SDE) F P.O.B. SDE (POINT '~A ") ~ ~ '~ SHEET 2 4F 2 1 1 RUGGERI-JENSEN-AZAR ENGINEERS ^ PLANNERS ^ SURVEYORS 4690 CHA607 DRIVE, SUITE 200 PLEASANTON, CA 94588 t'HONE: (925) 227-9700 fAX: (925) 227-9300 SCALE: DATE: JOB NO.: 1"=100' 9-11-09 091055 ~~~~~ EXHIBIT B Parcel Two (Attach legal description) 1313014.6 24 Parcel A PM 9185 City of Dublin County of Alameda Legal Description Right of Way 33~ lad Real property situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel A as shown. on the map entitled Parcel Map 91.85 filed on July 29, 2008 in Book 308 of Parcel 1~Iaps at Page 57, Alameda County Records, described as follows: Commencing at the southeastern conger of said Parcel A; thence along the southwestern line of said Parcel A, North bl°40'00"West, 48.55 feet to the Point of Beginning; thence continuing along said southwestern line, North 61°40'00"West, 71.48 feet to a curve to the right, having a radius of 572.40 feet, a delta. of 04°06'59"; thence along said curve an arc length of 41.10 feet to anon-tangent curve to the right having a radial which bears North. 63°23'48" West, a radius of 50.50 feet, a delta of 16b°55'43"; thence leaving said southwestern line, northeasterly, easterly, southeasterly, and southerly along said curve an arc length of 147.13 feet to a reverse curve graving a radius of 24.50 feet, a delta of 49°57'12"; thence along said curve an arc distance of 21.36 feet to the Point of Beginning. Containing 4,343 Sq. Ft. ~ Charles SelIman L.S. 5186 a ~- .jam ,2c.~a g Date Created on 7/30/2009 9:50 AM G:~Admin\Tobs-09\091 OS S~SURV EY~HONDA.doc ~„RNb S~ 4$° ~ ~fi ~~ Na. 5186 Exp. Q6.30.11 , ~~ EXHIBIT B ~ - PARC~I B elf ~~~ PARCI/L MAP 9 ~ ~~ BK 30~ PARC.~L MAP5 P~ 57 LINE TABLE ND. BEARING DISTANCE L 1 N6144'00"W 48, 55' L2 N61 '4G'00 "W 71, 48' ~ I CURVE rABLE N0. RADIUS DEL TA LENGTH C1 572. DD' 4 06'59" 41.1 ~' C2 50, 50' 166'55'43" 147.13' C3 24.50' 49 57'i2" 21, 36' S~ \ `~.~, PARCEL A ~~ ~ PARCEL MAP 9 ~ ~~ ~ BK 3C3 PARG~L MAPS PC ~7 I ~~~ RIGHT OF WAY ~ ~~` ~ ,~ ~~• ACQUISITION ~ ti6 . ~~5~~ s9.~ 4,343E SQ.FT. ~A~~s ~a~, ~~ ~~•p.J ~ oSO~~~~J ~ I ~ ~ C2 ~ ! \ ` o ~ N N ~ z ~? z ~ ~ A ~' 1 • 0 e ~~ LEGEND ~ 0 6Q 120 P.O.B. POINT OF BEGINNWG ` \ P.O.C. POINT OF COMMENCEMENT \ A\ ( IN FEET) ~ ~ ~ 0 C; 1 inch = 60 ft. (R} RADIAL (T) TOTAL \ SQ.FT. SQUARE FEET ~ ~ EXHIBIT B. PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR STREET RIGHT 4F WAY CITY OF DUBLIN, ALAMEDA COUNTY, CALIFORNIA G~}620D71091RSW ppFnW nb~scerie tl-xsS-acy W tia,d.p RUGGERIrJENSEN-AZAR ENGINEERS ^ PLANNERS • SURVEYORS 4690 CHABOT DRIVE, SUITE 200 PLEASANTON, CA 94588 PfiONE: (925) 227-9100 FAX: (925) 227-9300 SCALE: DATE: JOB NO.: 1"=60~ 09-11-09 091055 35~ ~,~5' ~- EXHIBIT C Right-of--Way Improvements (Attach description of improvements) 1313014.6 25 ~~ l~?~ Exhibit C Roadway Improvements The "Roadway Improvements" shall consist of those improvements located on Scarlett Court shown on the attached improvement plans entitled Improvement Plans. 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N';~ 2 Q: - ~ x=' ~ A uWI.Tz ~' ~4Z7;'a ~ pp~ ,~:~, _ i N 'l~ a • ~' W.gc " L7:e. d t7`~q ~:: ~~ $ 1 z Yi ~~~ ~ ~i i i I ~ l i y4-o~ 100 EXHIBIT D Note (attach pronnissory note) 1313014.6 26 SECURED PROMISSORY NOTE $500,000 Dublin, California . 2010 FOR VALUE RECEIVED, KBH Investments LLC, a California limited liability company ("KBH") promises to pay to the City of Dublin, a municipal corporation ("City"), in lawful money of the United States of America, the principal sum of Five Hundred Thousand Dollars ($500,000), together with interest on the outstanding principal balance in accordance with the terms and conditions described herein. This Secured Promissory Note (this "Note") has been executed and delivered pursuant to a Purchase and Sale Agreement dated as of the date hereof by and between KBH and City (the "Purchase and Sale Agreement"), and is subject to the terms and conditions of the Purchase and Sale Agreement, which are by this reference incorporated herein and made a part hereof. This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing ("Deed of Trust") dated as of the date hereof, executed by Harvey & Madding Inc. as Trustor for the benefit of City and encumbering the property described therein. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, and in the Purchase and Sale Agreement. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Deed of Trust. 1. INTEREST RATE; MATURITY DATE. Commencing on August 1, 2010 through the date that all indebtedness and other amounts payable under this Note are paid in full, interest shall accrue on the outstanding principal balance of this Note at the rate of three percent (3%) simple interest per annum. The entire outstanding principal balance of this Note, together with accrued interest, if any, and all other sums accrued hereunder shall be payable in full on August 1, 2012 (the "Maturity Date"). 2. PAYMENTS. Commencing on August 1, 2010, and continuing on each anniversary thereafter through the Maturity Date, KBH shall make annual payments of principal to the City in the amount of One Hundred Sixty-Six Thousand Six Hundred Sixty-Seven Dollars ($166,667.00), together with interest accrued thereon. Any other amounts owing under this Note shall be due and payable on the Maturity Date. Payments shall be credited first to any unpaid late charges and other costs and fees then due, then to accrued interest, if any, and then to principal. In no event shall any amount due under this Note become subject to any rights, offset, deduction or counterclaim on the part of KBH. 3. DUE ON SALE OR DEFAULT. The entire unpaid principal balance and all sums accrued hereunder shall be immediately due and payable upon the Transfer (as defined in Section . ~f6~lo~ 7_6 of the Deed of Trust) absent City consent, of all or any part of the Property or the Improvements, or any interest therein, or upon the occurrence of an Event of Default under this Note or the Deed of Trust, subject to the expiration of any applicable cure period. Without limiting the generality of the foregoing, this Note shall not be assumable without City's prior written consent, which consent may be granted or denied in City's sole discretion. 4. PREPAYMENT. KBH may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note provided that each such repayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such repayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. 5. MANNER OF PAYMENT. All payments on this Note shall be made to City at 100 Civic Plaza, Dublin, CA 94568 or such other place as City shall designate to KBH in writing, or by wire transfer of immediately available funds to an account designated by City in writing. 6. EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"): (a) KBH fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after City notifies KBH thereof in writing. (b) KBH fails to cause Harvey & Madding Inc, maintain insurance on the Property as required pursuant to the Deed of Trust and KBH fails to cure such default within 10 days. (c) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), KBH (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against KBH in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for KBH; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (d) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against KBH in an involuntary case, (ii} appoints a trustee, receiver, assignee, liquidator or similar official for KBH or substantially all of KBH's assets, (iii) orders the liquidation of KBH; or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Improvements, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. (e) KBH shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60} days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such 2 47~,d~' lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution; (f) KBH shall have been dissolved or terminated; (g) A default arises under any debt instrument secured by a mortgage or deed of trust on the Property and remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder. (h) Subject to Harvey & Madding Inc.'s right to contest the following charges pursuant to the Deed of Trust, if KBH fails to cause Harvey & Madding Inc. to pay prior to delinquency taxes or assessments due on the Property or fails to pay when due any other charge that may result in a lien on the Property or the Improvements, and KBH fails to cure such default within thirty (30) days of date of delinquency, but in all events upon the imposition of any such tax or other lien. (i) Any representation or warranty contained in this Note or the Deed of Trust proves to have been false or misleading in any material adverse respect when made. (j) An event of default shall have been declared under the Deed of Trust subject to the applicable cure period set forth in such document. (k) KBH defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 6 contained in this Note or in the Deed of Trust, and unless such document specifies a different cure period for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to KBH (or such longer time as City may agree upon in writing), provided that in each case KBH commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith. 7. REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to KBH, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the Deed of Trust, including without limitation the right to pursue foreclosure under the Deed of Trust. KBH shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. S. DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of ten percent (10%) per annum (the "Default Rate"); provided however, if any payment due hereunder is not paid when due, the ~~ f o. Default Rate shall apply commencing upon the due date for such payment. When KBH is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in Section 1 of this Note. Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies Reserved. 9. MISCELLANEOUS 9.1 WAIVER. The rights and remedies of City under this Note shall be cumulative and not alternative. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law (a) no claim or right of City arising out of this Note can be discharged by City, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by City; (b) no waiver that may be given by City will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on KBH will be deemed to be a waiver of any obligation of KBH or of the right of City to take further action without notice or demand as provided in this Note. KBH hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds 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. 9.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 23 of the Purchase and Sale Agreement. 9.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. 9.4 GOVERNING LAW: VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. All persons and entities in any manner obligated under this Note consent to the jurisdiction of any federal or state court having in the jurisdiction in which the Property is located (the "Property Jurisdiction"). KBH agrees that any controversy arising under or in relation to the Note or the Deed of Trust shall be litigated exclusively in the Property 3urisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Note or the Deed of Trust. KBH irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and 4 ~°Pl~~ ~f waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. 9.5 PARTIES IN INTEREST. This Note shall bind KBH and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. 9.6 SECTION HEADINGS CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. 9.7 RELATIONSHIP OF THE PARTIES. The relationship of KBH and City under this Note is solely that of borrower and lender, and the loan evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of KBH. 9.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note. 9.9 JOINT AND SEVERAL OBLIGATION. If KBH consists of two or more individuals, the obligations of such individuals hereunder shall be joint and several. SIGNATURES ON FOLLOWING PAGE. ~ ~ ids IN WITNESS WHEREOF, KBH has executed and delivered this Note as of the date first written above. BORROWER KBH Investments LLC, a California limited liability company By: Print Name: Title: 6 s~~~ EXHIBIT E Deed of Trust (attach deed of trust) 1313014.6 27 ~.~ ~ ~~~ RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 above this line for Recorder's use. DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is made as of , 2010 by Harvey & Madding Inc., a California corporation ("Trustor") to North American Title Company, as trustee ("Trustee"), for the benefit of the City of Dublin, a municipal corporation ("Beneficiary"). RECITALS A. Trustor owns fee simple title to the land commonly known as San Joaquin County Assessor's Parcel Number 212-270-08 in Tracy, California and more particularly described in EXhibit A attached hereto and incorporated herein by this reference (the "Land"). B. Beneficiary and KBH Investments LLC ("KBH") have entered into a Purchase and Sale Agreement dated as of the date hereof (the "Purchase and Sale Agreement") pursuant to which KBH will purchase certain real property from the City for a net purchase price of $500,000 ("Net Purchase Price"). C. The Purchase and Sale Agreement requires KBH to pay Beneficiary the Net Purchase Price within three years. D. KBH has issued to Beneficiary a secured promissory note dated as of the date hereof (the "Note") to evidence KBH's obligation to pay the Net Purchase Price. E. Trustor will have a direct or indirect ownership interest in the property KBH is purchasing from Beneficiary pursuant to the Purchase and Sale Agreement and/or will otherwise derive a material financial benefit from Beneficiary's agreement to allow KBH to pay the Net Purchase Price over 3 years. F. As a condition precedent to allowing KBH to pay the Net Purchase Price over 3 years, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Property (defined below) to secure repayment of the Note. 1 ~3o{~os~ ~l NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows. 1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired: a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land ("Improvements"); b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which maybe in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, "Appurtenances"); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and riow or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and alI improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, "Equipment"); d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, "Leases"), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, "Rents"); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding ("Proceeds"); f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor ("Gross Revenues"); g. All architectural, structural and mechanical plans, specifications, design ~~f ~ ~ oS documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, "Plans"); and h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, "Financing"). All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances., Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the "Property." 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the "Secured Obligations"): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor or KBH to Beneficiary under the Purchase and Sale Agreement; (iii) all additional present and future obligations of Trustor or KBH to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor or KBH to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust. 3. Assig~rrient of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not 55~ ~ ~S Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary's written consent, Trustor shall not accept prepayment of rents for any rental period exceeding one month. 4. Security A~eement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property maybe or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the "UCC"), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section maybe modified or supplemented) of the Land and Improvements. 5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it. Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii} any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the 4 ~ ~ ~~ R priority of Beneficiary's lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government. 6. Fixture Filing, This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of San Joaquin County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for alI purposes under the UCC. 7. Trustor's Representations, Warranties and Covenants; Rights and Duties of the Parties. 7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens approved in writing by Beneficiary ("Permitted Encumbrances"), this Deed of Trust creates a valid Lien on Trustor's entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor's office is specified in Section 10.2. 7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Property that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) ~-~~ ,as all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor's agents have disclosed to Beneficiary all material facts concerning the Property. 7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c} do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor's knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor's ownership of the Property. 7.4 PaXrnent and Performance of Secured Obli atg ions. Trustor shall promptly pay and perform all obligations of Trustor arising in connection with the Secured Obligations. 7.5 Preservation and Maintenance of Pro~erty Compliance with Laws. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary's consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which maybe constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to this Deed of Trust. 7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property, any part thereof, or interest therein is voluntarily or involuntarily sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered ("Transfer") without the prior written consent of the Beneficiary. If any such Transfer shall occur in violation of this Deed of Trust, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period. 7.7 Inspections. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with this Deed of Trust. 7.8 Charges Liens Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may 6 58 ~ ~o~ become) a lien on all or part of the Property. Trustor may, at Trustor's expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property. Trustor shall immediately discharge or cause to be discharged any lien on the Property (other than encumbrances approved by Beneficiary as of the date hereof in writing). Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively c;.ontested in good faith and by appropriate actions and/or proceedings. 7.9 Subro ag tion. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust. 7.10 Hazard Liability and Workers' Compensation Insurance. At all times during the term hereof, at Trustor's expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the Improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, the proceeds collected under any insurance policy maybe applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding anything to the contrary set forth herein, provided that Trustor is not in default under the Note or this Deed of Trust, Trustor shall be permitted to use the proceeds of insurance to rebuild the Improvements. 7.10.1 Trustor shall at all times during the term hereof, maintain a comprehensive general liability insurance policy in an amount not less than One Million Dollars ($1,000,000) each occurrence, Two Million Dollars ($2,000,000) annual aggregate, together with Three Million Dollars ($3,000,000) excess liability coverage or such other policy limits as Beneficiary may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Beneficiary as an additional insured. 7 ~ ~,ds Trustor shall maintain workers' compensation insurance as required by law. 7.10.2 Upon Beneficiary's request, Trustor shall file with Beneficiary certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required by this Section, and_ such certificates (or policies) shall provide that at least thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. 7.10.3 If any insurance policy required hereunder is canceled or the coverage provided thereunder is reduced, Trustor shall, within fifteen (15) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least 30 days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof. If any insurance policy required pursuant to this Deed of Trust is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor's expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary. 7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled,- disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor's possession or 8 ~o~,os reasonably available to Trustor relating to the Land concerning Hazardous Materials. Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the maintenance of property similar to the Property and in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below). Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, "Indemnitees") harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually "Claim" and collectively "Claims") arising in connection with the breach of Trustor's covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property: The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Landis in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources. Without limiting the generality of the foregoing, Trustor shall, at Trustor's own cost and expense, do all of the following: a. pay or satisfy any judgment or decree that maybe entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation out- of-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding. Trustor's obligation to indemnify the Indetnrutees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of the Note or the Purchase and Sale Agreement; (ii) any extensions of time for performance required by the Note or the Purchase and Sale 9 ~i ~ ids Agreement; (iii) any provision in the Note or the Purchase and Sale Agreement limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under the Note or the Purchase and Sale Agreement, {v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under the Note or the Purchase and Sale Agreement; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary's failure to properly perfect any lien or security interest given as security for the Secured Obligations. The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemriitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the Note, the Purchase and Sale Agreement or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust. Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the "Environmental Provisions"), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the Califomia Code of Civil Procedure ("Section 736") for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. "Hazardous Materials" means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct ar indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a "hazardous substance", "hazardous material", "hazardous waste", "toxic waste", "toxic pollutant", "toxic substance", "solid waste" or "pollutant or contaminant" in or pursuant to, or similarly identified as hazardous to human health ox the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251 ], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act 10 ~~ >~~+ [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any "Superfitnd" or "Superlien" law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. "Environmental Law" means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder. 7.12 Notice of Claims• Defense of Security Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three 11 ~~ business days of Trustor's receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof. b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims. c. Compensation• .Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee iri any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys' fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes: Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining.to the Property. 7.13 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor's covenants under the Note, this Deed of Trust or Purchase and Sale Agreement, (b) any representation by Trustor in the Note, the Purchase and Sale Agreement or this Deed of Trust which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or the Improvements, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, the Note, the Purchase and Sale Agreement or this Deed of Trust or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Note and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust. 7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to 12 Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise. any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary. 7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, so long as the value of Beneficiary's lien is not impaired, insurance and/or condemnation proceeds may be used to repair and/or restore the Improvements. ,... 7.16 Release Extension. Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations. 7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance. 7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of 13 bs~ ~~~- Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary's or Trustee's sole judgment is or maybe senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section 7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust. 8. Default and Remedies. 8.1 Events of Default. Trustor acknowledges and agrees that an event of default ("Event of Default") shall occur under this Deed of Trust upon the occurrence of any one or more of the following events: a. The occurrence of an event of default under the Note or the Purchase and Sale Agreement, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; c. If Trustor's interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.6 hereof and Trustor fails to rescind such conveyance or otherwise cure such breach within the time period specified in paragraph j below; d. Trustor fails to maintain the insurance coverage required hereunder or otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the time specified in Section 7.10; e. Subject to Trustor's right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 10 days. f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust, the Note, the Purchase and Sale Agreement or in any certificate or statement furnished pursuant hereto proves to have been false or misleading in any material adverse respect when made; g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors ("Bankruptcy Law"), Trustor (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor in an involuntary case; (iii) consents to the appointment of a 14 r-~, .,,` trustee, receiver, assignee, liquidator or similar official for Trustor; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor in an involuntary case, (ii} appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or substantially all of such Trustor's assets, (iii) orders the liquidation of Trustor, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Land or the Improvements, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance. i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder's documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary's reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than sixty (60) days following receipt of notice of default. 8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in the Note and the Purchase and Sale Agreement, and any other remedy existing at law or in equity or by statute. All of Beneficiary's rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys' fees and costs. a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately. b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of ail of Trustor's or the then owner's 15 ~~ ~~~ books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments. d. UCC Remedies. Beneficiary. may exercise any or all of the remedies granted to a secured party under the UCC. e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided bylaw for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust. f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law. 8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust. Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, 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, and at Beneficiary's request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place 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 such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale. 16 ~,9s After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys' fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto. Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an event of default has occurred under the Note or the Purchase and Sale Agreement, and if in connection with such event of default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note. At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law. Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations: a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose. 8.4 Trustor's Right to Reinstate. Notwithstanding Beneficiary's acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust i£ (a) Trustor pays Beneficiary all sums which would be then due under the Note and the Purchase and Sale Agreement if the Secured Obligations had no acceleration provision; (b) Trustor cures ali breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary's and Trustee's remedies as provided herein, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary's interest in the Property and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 9. Third Party Trustor. 9.1 Definitions. As used in this Section 9, "Third Party Secured Obligation" means 17 ~9~ dos any Secured Obligation that is required to be performed by KBH. 9.2 Rights of Beneficiary. Trustor authorizes Beneficiary to perform any or all of the following acts at any time in its sole and absolute discretion, all without notice to Trustor and without affecting Beneficiary's rights or Trustor's obligations under this Deed of Trust: (a) Beneficiary may alter any terms of any Third Party Secured Obligation, including renewing, compromising, extending or accelerating, or otherwise changing the time for payment of, or increasing or decreasing the rate of interest on, any Third Party Secured Obligation; (b) Beneficiary may take and hold security for any Third Party Secured Obligation, accept additional or substituted security for that obligation, and subordinate, exchange, enforce, waive, release, compromise, fail to perfect, and sell or otherwise dispose of any such security; (c) Beneficiary may direct the order and manner of any sale of all or any part of any security now or later to be held for any Third Party Secured Obligation, and Beneficiary may also bid at any such sale and may apply all or any part of any Third Party Secured Obligation against the amount so bid; (d) Beneficiary may apply any payments or recoveries from KBH, Trustor, or any other source, and any proceeds of any security, to Third Party Secured Obligations in the manner, order, and priority Beneficiary may elect, in its sole and absolute discretion, whether that obligation is secured by this Deed of Trust or not at the time of the application; (e) Beneficiary may release KBH of its liability for any Third Party Secured Obligation or any part of it; (f) Beneficiary may substitute, add, or release any one or more guarantors or endorsers; and (g) In addition to the Third Party Secured Obligation, Beneficiary may extend other credit to KBH, and may take and hold security for the credit so extended, whether or not such security is also security for the Third Party Secured Obligation, all without affecting Beneficiary's rights or Trustor's liability under this Deed of Trust. 9.3 Deed of Trust to be Absolute. Trustor expressly agrees that until the Secured Obligations are paid and performed in full, and each and every term, covenant, and condition of this Deed of Trust is fully performed, Trustor will not be released by or because of: (a) Any act or event that might otherwise discharge, reduce, limit, or modify Trustor's obligations under this Deed of Trust; (b) Any waiver, extension, modification, forbearance, delay, or other act or omission of Beneficiary, or its failure to proceed promptly or otherwise as against KBH, Trustor, 18 ~n~ ~~5 or any security; (c) Any action, omission, or circumstance that might increase the likelihood Trustor may be called upon to perform under this Deed of Trust or that might affect the rights or remedies of Trustor against KBH; (d) KBH becoming insolvent or subject to any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships and as a result thereof some or all of the Third Party Secured Obligation being terminated, rejected, discharged, modified or abrogated; (e) Any dealings occurring at any time between KBH and Beneficiary, whether relating to the Third Party Secured Obligation or otherwise; or (f) Any action of Beneficiary described in Section 9.2 above. Trustor hereby acknowledges that absent this Section 9.3, Trustor might have a defense to the enforcement of this Deed of Trust as a result of one or more of the foregoing acts, omissions, agreements, waivers or matters. Trustor hereby expressly waives and surrenders any defense to its liability under this Deed of Trust based upon any of such acts, omissions, agreements, waivers, or matters. It is the express purpose and intent of this Deed of Trust that the obligations of Trustor under this Deed of Trust are and shall be absolute, unconditional and irrevocable. 9.4 Trustor's Waivers. To the fullest extent permitted bylaw, Trustor waives: (a) All statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary, to the fullest extent permitted by law; (b) Any right it may have to require Beneficiary, KBH or any other party, to proceed against or exhaust any security held from KBH or any other party, or pursue any other remedy in Beneficiary's power to pursue; (c) To the extent permitted by applicable law, the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (d) All rights of marshalling in the event of foreclosure; (e) Any defense based on any claim that Trustor's obligations exceed or are more burdensome that those of KBH; (f) Any defense based on: (i) any legal disability of KBH, (ii) any release, discharge, modification, impairment, or limitation of the liability of KBH to Beneficiary from any cause, whether consented to by Beneficiary or arising by operation of law or from any voluntary or involuntary proceeding under the United States Bankruptcy Code or any other 19 1~~ ~oS federal or state law relating to insolvency or relief of debtors ("Insolvency Proceeding") or (iii) any rejection, disallowance or disaffirmance of the Third Party Secured Obligation, or any part of it, or any security held for it, in any Insolvency Proceeding; (g) Any defense based on any action taken or omitted by Beneficiary in any Insolvency Proceeding involving KBH, including without limitation, filing, defending, settling or obtaining a judgment or order on any proof of claim or any adversary proceeding, making any election to have Beneficiary's claim allowed as being secured, partially secured or unsecured, including any election under 11 U.S.C. Section 1111(b), seeking relief from the automatic stay or adequate protection, including submitting an appraisal of any security, voting to reject or accept or failing to vote on any reorganization plan, making any extension of credit by Beneficiary to KBH in any Insolvency Proceeding, and the taking and holding by Beneficiary of any security for any such extension of credit, whether or not such security is also security for the Third Party Secured Obligation; (h) ;All presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind; (i) Any defense based on or arising out of any defense that KBH may have to the payment or performance of the Third Party Secured Obligation or any part of it; and (j) Any defense based on or arising out of any action of Beneficiary described in Sections 9.2 or 9.3 above. 9.5 Waivers of Subrogation and Other Rights and Defenses. (a) The obligations of Trustor hereunder are independent of the obligations of KBH, and a separate action or actions may be brought against Trustor whether or not action or suit is brought against KBH or KBH is joined in any such action or actions. At the option of Beneficiary, Trustor may be joined in any action or proceeding commenced by Beneficiary against KBH in connection with or based on the Tliird Party Secured Obligation or any security for such obligation, and recovery may be had against Trustor in such action or proceeding without any requirement that Beneficiary first assert, prosecute or exhaust any remedy or claim against KBH. (b) Upon a default by KBH, Beneficiary, in its sole and absolute discretion, without prior notice to or consent of Trustor, may elect to: (i) foreclose either judicially or nonjudicially against any real or personal property security it may hold for the Third Party Secured Obligation, other than the Property hereby encumbered, (ii) accept a transfer of any such security in lieu of foreclosure, (iii) compromise or adjust the Third Party Secured Obligation or any part of it or make any other accommodation with KBH or Trustor, or (iv) exercise any other remedy against KBH or any security other than the Property hereby encumbered. With respect to security other than the Property hereby encumbered, no such action by Beneficiary will release or limit the liability of Trustor, who will remain liable under this Deed of Trust after the action, 20 ~~ ~ ids even if the effect of the action is to deprive Trustox of any subrogation rights, rights of indemnity, or other rights to collect reimbursement from KBH for any sums paid to Beneficiary, whether contractual or arising by operation of law or otherwise. After any foreclosure or deed in lieu of foreclosure of any real or personal property pledged to secure the Third Party Secured Obligation, Trustor shall under no circumstances be deemed to have any right, title, interest or claim in or to such property, whether it is held by Beneficiary or any third p~Y• (c) Regardless of whether Beneficiary may have recovered against Trustor, Trustor hereby waives: (i) all rights of subrogation, all rights of indemnity, and any other rights to collect reimbursement or contribution from KBH or any other party for any recovery by Beneficiary against Trustor, whether contractual or arising by operation of law (including the United States Bankruptcy Code or any successor or similar statute) or otherwise (collectively, "Reimbursement Rights"), (ii) all rights to enforce any remedy that Beneficiary may have against KBH, and (iii) all rights to participate in any security now or later to be held by Beneficiary for the Third Party Secured Obligation. To the extent Trustor's waiver of Reimbursement Rights is found by a court of competent jurisdiction to be void or voidable for any reason, any Reimbursement Rights Trustor may have against KBH or any collateral or security shall be junior and subordinate to any rights Beneficiary may have against KBH and to all right, title, and interest Beneficiary may have in any such collateral or security. If any amount should be paid to Trustor on account of any Reimbursement Rights at any time when the Third Party Secured Obligation has not been paid in full, such amount shall be held in trust for Beneficiary and shall immediately be paid over to Beneficiary to be credited and applied against the Third Party Secured Obligation, whether matured or unmatured, in accordance with the terms of the Note. The covenants and waivers of Trustor set forth in this Section 9.5 shall be effective until the Third Party Secured Obligation has been paid and performed in full and are made solely for the benefit of Beneficiary. (d) Trustor waives all rights and defenses that Trustor may have because the Third Party Secured Obligation maybe secured by real property other than the Property hereby encumbered. This means, among other things: (i) Beneficiary may collect from Trustor (including enforcing this Deed of Trust against Trustor) without first foreclosing on any real or personal property collateral pledged by KBH; (ii) If Beneficiary forecloses on any real property collateral pledged by KBH: (A) The amount of the Third Party Secured Obligation maybe reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price. (B) Beneficiary may collect from Trustor (including enforcing this Deed of Trust against Trustor) even if Beneficiary, by foreclosing on the real property collateral pledged by KBH, has destroyed any right Trustor may have to 21 ~3~ 1~ collect from KBH. This Section 9.5 is an unconditional and irrevocable waiver of any rights and defenses Trustor may have because the Third Party Secured Obligation maybe secured by real property other than the Property hereby encumbered. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure. (e) Without limiting the generality of the foregoing Section 9.5, Trustor understands and acknowledges that if Beneficiary forecloses judicially or nonjudicially against any real property securing the Third Party Secured Obligation other than the Property hereby encumbered, that foreclosure could impair or destroy any ability that Trustor may have to seek reimbursement, contribution or indemnification from KBH or others based on any Reimbursement Right Trustor may have for any recovery by Beneficiary under this Deed of Trust. Trustor further understands and acknowledges that in the absence of this Section 9.5, such potential impairment or destruction of Trustor's rights, if any, may entitle Trustor to assert a defense to this Deed of Trust based on Section 580d of the California Code of Civil Procedure a interpreted in Union Bank v. Gradsky, 265 Ca1.App.2d 40 (1968). By executing this Deed. of Trust, Trustor freely, irrevocably and unconditionally: (i} waives and relinquishes that defense and agrees that Trustor will be fully liable under this Deed of Trust even though Beneficiary may foreclose judicially or nonjudically against any real property security for the Third Party Secured Obligation other than the Property; (ii) agrees that Trustor will not assert that defense in any action or proceeding which Beneficiary may commence to enforce this Deed of Trust; (iii) acknowledges and agrees that the rights and defenses waived by Trustor under this Deed of Trust include any right or defense that Trustor may have or be entitled to assert based upon or arising out of any one or more of Sections 580a, 580b, 580d or 726 of the California Code of Civil Procedure or Section 2848 of the California Civil Code; and (iv) acknowledges and agrees that Beneficiary is relying on this waiver in extending credit to KBH in the form of the Third Party Secured Obligation, and that this waiver is a material. part of the consideration which Beneficiary is receiving for extending such credit to KBH. (f) Trustor waives all rights and defenses arising out of an election of remedies by Beneficiary, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Trustor's rights of subrogation and reimbursement against KBH by operation of Section 580d of the California Code of Civil Procedure or otherwise. (g) Trustor waives Trustor's rights of subrogation and reimbursement, including (i) any defenses Trustor may have by reason of an election of remedies by Beneficiary, and (ii) any rights or defenses Trustor may have by reason of protection afforded to KBH with respect to the Third Party Secured Obligation pursuant to the anti-deficiency or other laws of California limiting or discharging KBH's obligations, including Sections 580a, 580b, 580d or 726 of the California Code of Civil Procedure. (h) Trustor waives any rights, defenses and benefits that maybe derived from Sections 2787 to 2855, inclusive, of the California Civil Code or comparable provisions of the laws of any other jurisdiction and further waives all other suretyship defenses Trustor would 22 ~4 ~ -o~ otherwise have under the laws of California or any other jurisdiction. (i) Trustor waives any right to a fair value hearing under California Code of Civil Procedure Section 580a, or any similar law, to determine the size of any deficiency owing (for which Trustor would be liable hereunder) following a nonjudicial foreclosure sale of any property other than the Property hereby encumbered. (j) No provision or waiver in this Deed of Trust shall be construed as limiting the generality of any other provision or waiver contained in this Deed of Trust. All of the waivers contained herein are irrevocable and unconditional and are intentionally and freely made by Trustor. 9.6 Revival and Reinstatement. If Beneficiary is required to pay, return, or restore to KBH, or any other person, any amounts previously paid on the Third Party Secured Obligation because of any Insolvency Proceeding of KBH, any stop notice, or any other reason, the obligations of Trustor will be reinstated and revived, and tbN rights of Beneficiary will continue with regard to such amounts, all as though they had never been paid, and this Deed of Trust shall continue to be effective or be reinstated, as the case maybe. 9.7 Information Regarding KBH. Trustor represents that: (a) Beneficiary has made no representation to Trustor as to the creditworthiness of KBH, and (b) no oral promises, assurances, representations or warranties have been made by or on behalf of Beneficiary to induce Trustor to execute and deliver this Deed of Trust. Trustor has received and approved copies of the Purchase and Sale Agreement and the Note. Before signing this Deed of Trust, Trustor investigated the financial condition and business operations of KBH and any other matters Trustor deemed appropriate to assure itself of KBH's ability to discharge its obligations in connection with the Third Party Secured Obligation. Trustor assumes full responsibility for that due diligence, as well as for keeping informed of all matters that may affect KBH's ability to pay and perform their respective obligations to Beneficiary. Beneficiary has no duty to disclose to Trustor any information that Beneficiary may have or receive about KBH's financial condition or business operations, or any other circumstances bearing on KBH's ability to perform. 9.8 Miscellaneous. Trustor acknowledges that Trustor has had adequate opportunity to carefully read this Deed of Trust and to consult with an attorney of Trustor's choice prior to signing it. No consent, approval or authorization of or notice to any person or entity is required in connection with Trustor's execution of and obligations under this Deed of Trust. No course of prior dealing, usage of trade, parol or extrinsic evidence of any nature may be used to supplement, modify or vary any of the terms hereof. 10. Miscellaneous Provisions. 10.1 Additional Provisions. The Note and the Purchase and Sale Agreement grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property. 10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of 23 75 ~~ 1~ Trustor as debtor under the UCC. Beneficiary's address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. Beneficiary: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Trustor: Harvey & Madding Inc. 6300 Dublin Blvd Dublin, CA 94568 Attention: Kenneth Harvey With copy to: KBH Investments LLC 385 Castle Crest Road Alamo, CA 94507 Attn: Kenneth Harvey Trustee: North American Title Company 4255 Hopyard Road, Suite 1 Pleasanton, California 94588 10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 10.3 does not waive any provision of this Deed of Trust or the Note 24 ,~ ~,~ imposing restrictions on transfer. 10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of San Joaquin County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein. 10.5 Attorneys' Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys' fees. 10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the "Property Jurisdiction"}. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Deed of Trust. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural. 10.7 Waiver. Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary's or Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary's acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 10.8 Action by Beneficiary. Except as maybe otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action maybe given, made or taken by Beneficiary's City Manager or by any person who shall have been designated by Beneficiary's City Manager, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other determination by 25 ~~~ i~ Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith. 10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor's obligations under this Deed of Trust. 10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust. SIGNATURES ON FOLLOWING PAGE. 26 1g ~ ~o~ IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. TRUSTOR: Harvey & Madding Inc., a California corporation By: Its: SIGNATURES MUST BE NOTARIZED. 27 ~~ ~ ~~ . STATE OF CALIFORNIA ) COUNTY OF SAN JOAQUIN) On , 2010 before me, , (here insert name and title of the officer), 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) STATE OF CALIFORNIA ) COUNTY OF SAN JOAQUIN) On , 2010, before me, , (here insert name and title of the officer), 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 byhis/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) 28 8~ ~ X05 Exhibit A LAND 1315591.4 29 g~ ~ ~~~ ~~ EXHIBIT F Quitclaim Deed (attach quitclaim deed) 1313014.6 28 ~W~ Recording Requested by and when Recorded, return to: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Manager EXEMPT FROM RECORDING FEES PER CALIFORNIA GOVERNMENT CODE §§6103, 27383 (SPACE ABOVE THIS LINE RESERVED FOR QUITCI,AIlVI DEED 'S USE) FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the City of Dublin, a municipal corporation ("Grantor") hereby quitclaims, releases and conveys to KBH Investments, LLC, a California liznited liability company ("Grantee") any and all right, titze and interest in and to the property described in Exhibit A attached hereto and incorporated by this reference. IN WITNESS WHEREOF, Grantor has executed this Quitclaim Deed as of this day of , 2010. GRAN'T'OR: City of Dublin, a municipal corporation By: Its SIGNATURES MUST BE NOTARIZED. ~~~~b~+ ~_ ~, ~ ~A~ State of California County of Alameda On , 20 , before me, , (here insert name and title of the officer), 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) 1315601.1 Exhibit A to Quitclaim (attach legal description) 1315601.1 Scarlett Couz-t City of Dublin County of Alameda Exhibit "A" Legal Description Right of Way Abaz~doz~znent ~ ~,~~. Pa e 1 of 3 /1 g Real property situate in the City of Dublin, County of Alameda, State of Califoznia, described as follows: Being a portion of Parcel 4 as shown on the plat in the proposed relinquishment deed to the County of Alameda recorded on Apri130, 1970, in Reel 2608 at Iz~iage 205, and later relinquished to the County of Alameda on .luly 27, 1970 in Reel 2661 at Image 819, Official Records of the County of Alameda, State of California, a portion of the parcel to the County of Alameda as recorded on May 14, 1969 in Ree12402 at Image 255, Official Records of the County of Alameda, State of California and a portion of Scarlett Court shown on the map entitled Parcel Map 9185 filed on July 29, 2008 in Boole 308 of Parcel Maps at Page 57, Alameda County Records, described as follows: Beginning on the northeastern line of said Parcel 4, being the northeastern lute of Scarlett Court and the southwestern corner of Parcel B of said Parcel Map 9185; thence along said northeastern Tine, South 32°48'00"East, 143.43 feet to a curve to the left having a radius of 572.00 feet, a delta of 24°45'01 "; thence along said curve an arc length of 247.09 feet to a non-tangexat curve to the left having a radial which bears North 63°23'48" West, a radius of 50.50 feet, a delta of 74°16'13"; thence Leaving said northeastern line, southerly along said curve an arc length of 65.46 feet to the southwestern line of said Parcel 4, also being the southwestern line of Scarlett Court; thence along said southwestern Line, North 61°40'00"West, 108.83 feet to anon-tangent curve to the right having a radial which bears Soutli 38°34'13" West, a radius of 628.00 feet, a delta of 18°37'41 "; thence northwesterly aloa~g said curve an arc length of 204.18 feet; tl~zence North 32°48'00"West, 365.64 feet; thence leaving said southwestern line, North Ol ° 12'36"East, 13.41 feet; thence Noz-th 32°48'00"West, 77.76 feet to a curve to the right having a radius of 85.50 feet, a delta of 33°04'50"; thence along said curve an arc length of 49.36 feet; thence North 32°51'13"West, 12.81 feet; thence North 57°08'47"East, 56.85 feet to the southwestern line of said Parcel B and a point of cusp having a radial which bears North 32°51'13" West, a radius of 22.00 feet, a delta of 14°38'39"; thence southwesterly along last said line and said curve an arc length of 5.62 feet to a nozl- tangent curve to the left having a radial ~vhiclz bears North 74°39'33" West, a radius of 50.00 feet, a delta of 48°08'27"; thence southwesterly and southerly along said curve an arc length of 42.01 feet; thence, South 32°48'00"East, 332.66 feet to the Point of Beginning. Containing 42,288 Sq. Ft. ~ Resezvi.ng there from the following described easements: Created on 8/27/2009 2:41 PM G:\Adznin\Jobs-09\091055\SURVEY\scarlett with reserves.doc Scarlett Court City of Dublin County of Alameda Exhibit "A" Legal Descz•iption Right of Way Abandonment Public Utility Easement Being alI the above described parcel. Emez-gency Vehicle Access Easement ~~ Page2of3 Real property situate iz-z the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel 4 as shown on the plat in the proposed relinquishment deed to the County of Alameda recorded on April 30, 1970, iza Ree12608 at Image 205, and later relinquished to the County of Alameda on July 27, 1970 in Ree12661 at Image 819, Official Records of the County of Alameda, State of California, a portion of the parcel to the County of Alameda as recorded on May 14, 1969 in Ree12402 at Image 255, Official Records of the County of Alameda, State of California, described as follows: Commencing on tlae northeastern line of said Parcel 4, being the northeastern line of Scarlett Court and the southwestern corner of Parcel B of Parcel Map 9185 bled on July 29, 2008 in Book 308 of Parcel Maps at Page 57, Alameda County Records; thence along said northeastern line, North 32°48'00"West, 34.42 feet to anon-tangent curve to the left laving a z-adial which bears North 32°48'00" West, a radius of 28.00 feet, a delta of 90°00'00"; thence leaving Tast said line, and southwesterly, and southerly along said curve an arc length of 43.98 feet; thence, South 32°48'00"East, I49.85 feet, said point being on a curve to the left having a radius of 600.00 feet, a delta of 17°45' 14"; thence along said curve an arc length of 18592 feet to a compound curve having a radius of 280.00 feet, a delta of 11 °06'46"; thezlce along said curve an arc length of 54.31 feet; thence South 6I °40'00"East, 27.22 feet to the eastern line of the above described parcel, said point being on anon-tangent curve to the left having a radial which bears South 88°39'3'7" West, a radius of 50.50 feet, a delta of 33°20'15"; thence southerly along said eastern line, and said curve an arc length of 29.38 feet to a point to be referred to as Point "A"; thence leaving said eastern line, North 61 °40'00"West, 48.18 feet to a curve to the right having a radius of 300.00 feet, a delta of 11 °06'46"; thence along said curve an arc. length of 58.19 feet to a compound curve having a radius of 620.00 feet, a delta of 17°45'14"; thence along said curve an arc length of 192.12 feet; thence, North 32°48'00"West, 197.86 feet; thence North 57°12'00"East, 48.00 feet to said northeastern line; thence along said noz-theastern lizae, South 32°48'00"East, 20.01 feet to the Point of Beginning. Containing 10,304 Sq. Ft. ~ Created on 8/27/2009 2:41 PM Cr:\Admin\Jabs-09\091055\SURVEY\scarlett with reserves.doc Scarlett Court City of Dublin County of Alameda Exhibit "A" Legal. Description Right of Way Abandozament Storm Drain Easement Page3of3 ~~ ~~ Real property situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion. of Parcel 4 as shown on the plat in the proposed relinclttshment deed to the County of Alameda recorded on April 30, 1970, in Reel 2608 at Image 205, and later relinquished to the County of Alameda on July 27, 1970 in Reel 2661 at Image 819, Official Records of the Cotulty of Alameda, State of California, described as follows: Beginning at the fore mentioned "Point A"; thence, along said southwestern line of Scarlett Court, North. 61°40'00"West, 38.26 feet; thence North 28°20'00"East, 47.48 feet to said northeastern line of Scarlett Caurt and a point of cusp, being a cu~vc to the left radial which bears North 63°23'48" West, a radius of 50.50 feet, a delta of 74°16'13"; thence southerly and southeasterly along said curve an arc length of 65.46 feet to the Point of Beginning. Containing 483 Sq. Ft. ~ ~'-~i `~ ,gyp ,.~ .. -- vU,~L ~~ ~~S Sit < C~-les ellman L.S. 5186 v ~' Na. 5186 0'~~ U u .,~.v~ ~' `~ Exp. 06-30-11 Date ~'j. ~ ~~~ 4F GALS Created on 8/27/2009 2:41 PM G:\AdminUobs-09\091055\SURVEY\scarlett with reserves.doc ~,~~~. ~~y~ ~~ 5 ~~~ ~~ / ~( ~---- ,, Gh h i ~~ ti~j tij ~? ~, ~~~~~~ i E ~ I __. ^s ~ O 100 200 ,~ 1 inch = 100 f . ~~ `~ ~ EX EVAE PER \ ~~~ ~ ~ MAP 9185 ~ ~~ ,~ ~ ~ ~ ~~ ~~ ~ ~~ \~ \`~ ~ ~ ~ ~ ~ ~b ~ \~ ~ ~fl~.S ~9~3~~1 \ OQ ~~ DETAIL "A" ~ NOT TO SCALE/ LEGEND P.O.B. POINT OF BEGINNING {R) RADIAL {T) TOTAL SQ.FT. SQUARE FEET EVAE EMERGENCY VEHICLE ACCESS EASEMENT SDE STORM DRAIN EASEMENT EXHIBIT B PLAT Td ACCOMPANY LEGAL DESCRIPTION FOR STREET RIGHT ~F WAY. ABANDONMENT CITY QF DUBLIN. ALAMEDA COUNTY, CALIFORNIA LINE TABLE NQ BEARING DISTANC L 1 S32'48'00"E 143.43' L2 N61 '4D'00"W 108.83' L3 N32'4$'00"W 365.64' L4 N0172'36 "E 13.41 ' L5 N32'48'0D"W 77.76' L6 N32'S1'13"W 12.81' L 7 N57'08'47"E 56.85' L8 S32'48'00"E 332.66' CURVE TABLE ND. RADIUS DELTA LENGTH C1 572.OD' 24'45'01 " 247.09' C2 50.50' 7476'13" 65.46' C3 628.00' 18 ;37'41 " 204.18' C4 85.50' 33'04'50" 49.36' C5 22.00' 14'38'39" 5.62' C6 50.00' 48'08'27" 42. Dl ' PARCEL B PARCEL MAP 9985 BK 3d~ PARCEL MAPS PG 57 P.O.B. EXISTING STREE~ RIGHT OF WAY l TO BE ABANDONED 42,288f SQ.FT. ~ PARCEL A PARCEL MAP g ~ 8~ \ BK 30g PARCEL MAP5 PC ~7 ~ 20' EVAE ,~~ ,~ ~ \c~ ~ ~ ~~' ,Q~ .kph p0,~^a ~~ ~~, ~ ~ ti ~`~ Q~° ~r- ~ ... ji~'a ~~ ~ \ \ I ~~ ^ 1 I ~ ~~ SHEET 1 OE 2 ~ '~ RUG,GERI~J~NSEN~AZ~-R ENGINEERS + PLANNERS ^ SURVEYORS 4690 CHABOT DRIVE, SUIT£ 200 PLEASAN70N, CA 94588 PHONE: (925) 227-9100 FAX: (925) 227-9300 SCALE: DATE: JOB NO.: 1 "=1 OO' 9-11-09 091055 ~~~~ 0~~~ ti~~ ~ ~~~ / ~~~i \ ~^~ \ ~~~ \ .~- ~o `S~~ i i ~N- \ a 1Qa 2OO ~~ \ ,~ (n~ FEET ) ,~ ~ ~~h = Sao ft. ~~ \ EX EIAE PER MAP 9185 LINE TABLE NQ. BEARING DISTANCE L 1 S32'48'00 "E 149.85' L2 S61'40'00"E 27.22' L3 N61 '40'00 "W 48.18' L4 N32'48'00"W 197.86' L5 N5772'00"E 48.00' L6 S32'48'DO"E 20.01' L 7 N61 °40'00"W 38.26' L8 N28'20'00"E 47 48' L9 N32'48'00"W 34.42' CURIE TABLE N0. RADIUS DELTA LENGTH Cl 28.00' 90'00'00" 43.98' C2 600.00' 1745'14" 185.92' C3 280.00' 11'06'46" 54.31' C4 50, 50' 33'20'15" 29.38' C5 300.40' 1106'46" 58.19' G \ \ ~J'' l N32'48'00"W R PARCEL MAP~9i 8~ SK 30~ \ ~~, - PARCEL MAPS PC ~~ ~ <Lc~ P.O.B. EVAE CURIE TABLE N0. RADIUS DELTA LENGTH C6 620.00' 17'45'14" 192.12' C7 50.50' 7476'13" 65, 46' C8 600.00' 4 56'30" 51.75' \ ~ P.D.C. EVAE \~ ~\~ EVAEN1D,304.~ SQ.FT. ~ \~ \ \\~~' \ Q E~P~ PARCEL CMAPA9 ~ 85 ~~' ~ 2 BK 305 PARCEL MAPS PG ~7 ~\ ~ ~ ,~ ~ ~ i LEGEND ~ ~ ~'~ , F. P.O.B. POINT Of BEGINNING ~ ~ \ ~ ti~ P.O.C. POINT Of COMMENCEMENT {R) RADIAL \ ~ (T) TOTAL ~~' SQ.fT. SQUARE FEET EVAE EMERGENCY VEHICLE ACCESS EASEMENT SDE^~483,f SQ.FT.~ SDE STORM DRAIN EASEMENT L7(SDE)- P.O.B. SDE (POINT '"A EXHIBIT B -PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR STREET RIGHT OF WAY ABANDONMENT CITY OF DUBLIN, ALAMEDA COUNTY, CALIFORNIA SHEEP 2 OF' 2 ~vra~re~,.. 1 ~. RUGGERI~JENS~N-AZAR ENGINEERS • PLANNERS ^ SURVEYORS 4690 CHABOT DRIVE, SUITE 200 PLEASANTON, CA 94588 PHONE: (925) 227-9100 PAX: (925) 227-9300 SCALE: DATE: JOB NO.: 1 "=100' 9-11--09 091055 ~~ i~~ EXHIBIT G INTENTIONALLY OMITTED 1313014.6 29 ~1 ~~OS EXHIBIT H Grant of Easement (attach grant of easement} 1313014.6 3 0 ~ ~ ~~ Recording Requested by and when Recorded, return to: The City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103, 27383 (SPACE ABOVE THIS LINE RESERVED A 'S USE) GRANT OF EASEMENT 'This Grant of Easement ("Grant") is made as of , 2010 by and between KBH Investments, LLC ("Grantor") and the City of Dublin, a municipal corporation ("Grantee"). Grantor anc; Grantee shall hereinafter be referred to collectively as the "Parties" and each individually as a "Party." RECITALS A. Grantor is the owner of that certain real property located in Alameda County, California and more particularly described in Exhibit A attached hereto ("Property"). B. Pursuant to that certain Purchase and Sale Agreement dated as of , 2010 by and between Grantor and Grantee (the "Purchase Agreement"), in consideration for Grantee's agreement to sell certain real property to Grantor, Grantor agreed to grant to Grantee an exclusive, perpetual easement and right of way in, through, over and across the portion of the Property described in Exhibit B attached hereto (the "Easement Area") for public road purposes. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows. 1. Grantor hereby grants to Grantee an exclusive, perpetual easement in, through, over, and across the Easement Area for public road purposes, including but not limited to, pedestrian and vehicular use, ingress, egress, passage, circulation and access and for construction, use, maintenance, operation, alteration, repair, replacement, reconstruction, inspection and removal of "Roadway Improvements," utilities and appurtenances incidental thereto. As used herein, the term "Roadway Improvements" shall mean the cul-de-sac improvements described in Exhibit C attached hereto, together with curbs, gutters, drainage improvements, lighting improvements, and landscaping. ("Easement"). 2. This Grant shall not become effective unless and until (a) the Grantee has accepted the Roadway Improvements and this Grant pursuant to a formal resolution adopted by the City Council of the Grantee (the "Acceptance"); (b) an authorized representative of the Grantee has duly executed and acknowledged this Grant and delivered a copy of the executed and acknowledged Grant to Grantor; and (c) the Grantee has caused the fully executed and 1342196.5 Ex~~~ ~ 93~ ,~~ . acknowledged Grant to be recorded in the Official Records of Alameda County. Each Party agrees to take all necessary actions and to execute all necessary documents to accomplish the Acceptance. The date that the Acceptance is accomplished is herein referred to as the "Acceptance Date." Intentionally omitted. 4. Grantee acknowledges and agrees that, upon Acceptance, (a) pursuant to California Streets and Highway Code Section 1806, Grantee shall be solely liable for maintaining and repairing the Easement Area and the Roadway Improvements in good condition and repair; (b) pursuant to California Government Code Section 830 et seq., Grantee will be solely liable for any injuries incurred as a proximate result of the Grantee's failure to maintain and repair the Easement Area, and Roadway Improvements in accordance with its obligations under applicable law. Grantee further agrees that, in determining the Grantee's liability for any injuries hereunder, the Easement Area and the Roadway Improvements shall be deemed to be "Property of a public entity" for the purposes of California Government Code Section 830(c). 5. As a material part of the consideration for this Grant, Grantee hereby agrees to indemnify, protect, defend and hold Grantor harmless from and against any loss, damage, injury, accident, fire or other casualty, liability, claim, cost or expense (including but not limited to actual attorneys' fees) (collectively, "Claims") of any kind or character to any person or property occurring before or after the Acceptance Date and arising from, caused by or related to (i) any use of the Easement Area by Grantee or its representatives, (ii) any bodily injury, property damage, accident, fire or other casualty on the Easement Area caused by the entry or activities of Grantee, (iii) any breach by Grantee of its obligations described hereunder, including, without limitation, its obligations to maintain and repair the Easement Area and the Roadway Improvements in accordance with Paragraph 4 above and its obligation and/or (iv) any injuries to third parties arising from or related to the Grantee's use of the Easement Area for the purposes contemplated herein and/or failure to maintain the Easement Area and/or Roadway Improvements in accordance with its obligations hereunder and pursuant to applicable law. Grantee's indemnity obligations set forth in this Paragraph shall not apply to any Claims which are directly or indirectly, in whole or in part, caused by, arise out of, or relate to the presence, release or discharge or alleged presence, release or discharge of any contamination existing at, on, in, or under, or migrating to or from, the Property prior to the Effective Date. For purposes of this paragraph, "contamination" means: (i) any substance included within the definitions of "hazardous substance," "hazardous waste," "hazardous material," "toxic substance," "solid waste," "contaminant" or "pollutant", as those terms are defined in their broadest sense by any federal, state or local law, rule, regulation or order, or amendment or modification thereto, pertaining to the protection of the environment and public health, including the meaning assigned to the term "hazardous substance" in Section 736(f)(3) of the California Code of Civil Procedure, as that section maybe amended from time to time, as well as all substances designated as toxic wastes or hazardous substances or similar designations, and all substances in any way regulated by any present or future environmental laws; (ii) other substances, materials, and wastes that are or become regulated or classified as hazardous or toxic under federal, state, or local Laws; and (iii) any material, waste, or substance that is asbestos, polychlorinated biphenyl, a flammable explosive, or a radioactive material, naturally occurring or otherwise. 1342196.5 q~~ ~ The provisions of this Paragraph 5 shall survive any termination of this Grant. 6. Grantor hereby declares, represents and warrants to Grantee that Grantor is the record title owner and occupant of the Property and has full right and lawful authority to grant the Easement to the Grantee. Grantor further warrants, promises and agrees to defend the Grantee in the exercise of its rights hereunder against any defect in Grantor's title to the Property or Grantor's right to grant the Easement. 7. Grantor shall not (i) construct or place any permanent structure or building on any part of the Easement Area; (ii) construct or maintain any wall, fence or barrier of any kind on or adjacent to the Easement Area, which impairs or impedes access to, or use of, the Easement; or (iii) do anything which shall prevent, impair or discourage the use or exercise of the Easement or the free access and movement across the Easement Area. Grantee may remove any structure or building constructed or placed within the Easement Area in violation of this paragraph at Grantor's sole cost and expense, and without any liability for damages. Grantee shall have the right to cut, trim, control and remove trees, brush and other obstructions which injure or interfere with the Grantee's use, occupation or enjoyment of the Easement without any liability for damages. 8. Grantor hereby subjects the Property to the covenants, conditions and restrictions set forth in this Grant. Grantor hereby declares its express intent that all such covenants, conditions and restrictions shall be deemed covenants running with the land and shall pass to and be binding upon Grantor and its successors and assigns. Each and every contract, deed or other instrument hereafter executed applicable to or conveying the Property or any portion thereof or interest therein shall conclusively be held to have been executed, delivered and accepted subject to such covenants, conditions and restrictions, regardless of whether or not such covenants, conditions and restrictions are set forth in such contract, deed or other instrument. This Grant shall be binding upon and shall inure to the benefit of the parties hereto and to their respective successors and assigns. 9. This Grant may be modified or amended, in whole or in part, only by an instrument in writing, executed and acknowledged by Grantor and Grantee, and recorded in the Official Records of Alameda County. 10. This Grant shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 11. If any legal action or proceeding arising out of or relating to this Grant is brought by either Party, the prevailing Party will be entitled to receive from the other Party, in addition to any other relief that maybe granted, the reasonable attorney's fees, costs, and expenses incurred in the action or proceeding by the prevailing Party. 12. This Grant constitutes the entire agreement between Grantor and Grantee relating to the Easement. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Grant are of no force and effect. 1342196.5 3 ~~ 19S/ 13. This Grant maybe executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. IN WITNESS WHEREOF, the Parties have executed this Grant as of the date first set forth hereinabove. GRANTOR: KBH INVESTMENTS LLC, a California limited liability company By: Its: GRANTEE: CITY OF DUBLIN, a municipal corporation By: Its: ATTEST: By: City Clerk APPROVED AS TO FORM: By: City Attorney SIGNATURES MUST BE NOTARIZED. 1342196.5 4 gL~~oS Exhibit A Property (attach legal description 1342196.5 LEGAL DESCRIPTION t~ 7 IQS r~ i Real property in the City of DUBLIN, County of ALAMEDA, State of California, described as follows: - PARCEL ONE: BEING A PORTION OF PARCEL 4 AS SHOWN ON THE PLAT IN THE PROPOSED RELINQUISHMENT DEED TO THE COUNTY OF ALAMEDA RECORDED ON APRIL 30, 1970, IN REEL 2608 AT IMAGE 205, AND LATER RELINQUISHED TO THE COUNTY OF ALAMEDA ON JULY 27, 1970 IN REEL 2661 AT IMAGE $I9, OFFICIAL RECORDS OF THE COUNTY OF ALAMEDA, STATE OF CALIFORNIA, A PORTION OF THE PARCEL TO THE COUNTY OF ALAMEDA AS RECORDED ON MAY 14, 1969 IN REEL 2402 AT IMAGE 255, OFFICIAL RECORDS OF THE COUNTY OF ALAMEDA, STATE OF CALIFORNIA AND A PORTION OF SCARLETT COURT SHOWN ON THE MAP ENTITLED PARCEL MAP 9185 FILED ON JULY 29, 208 IN BOOK 308 OF PARCEL MAPS AT PRGE 57, ALAMEDA COUNTY RECORDS, DESCRIBED AS FOLLOWS: BEGINNING ON THE NORTHEASTERN LINE OF SAID PARCEL 4, BEING THE NORTHEASTERN LINE OF SCARLETT COUNT AND THE SOUTHWESTERN CORNER OF PARCEL B OF SAID PARCEL MAP 9185; THENCE ALONG SAID NORTHEASTERN LINE, SOUTH 32°4$`00"EAST, 143.43 FEET TO A CURVE TO THE LEFT HAVING A RADIUS OF 572.00 FEET, A DELTA OF 24°45'01"; THENCE ALONG SAID CURVE AN ARC LENGTH OF 247.09 FEET TO ANON-TANGENT CURVE TO THE LEFT HAVING A RADIAL WHICH BEARS NORTH 63°23'48" WEST, A RADIUS OF 50.50 FEET, A DELTA OF 74°16'31"; THENCE LEAVING SAID NORTHEASTERN LINE, SOUTHERLY ALONG SAID CURVE AN ARC LENGTH OF 65.46 FEET TO THE SOUTHWESTERN LINE OF SAID PARCEL 4, ALSO BEING THE SOUTHWESTERN LINE OF SCARLETi' COURT; THENCE ALONG SAID SOUTHWESTERN LINE, NORTH 61°40'00" WEST, 108.83 FEETTO ANON-TANGENT CURVE TO THE RIGHT HAVING A RADIAL WHICH BEARS SOUTH 38°34'13" WEST, A RADIUS OF 628.00 FEET, A DELTA OF 18°37'41"; THENCE NORTHWESTERLY ALONG SAID CURVE AN ARC LENGTH OF 204.18 FEET; THENCE NORTH 32°48'00" WEST, 487.29 FEET' TO THE SOUTHERN EASTERN CORNER OF SAID PARCEL (R2402I255} SAID POINT BEING ON A CURVE TO THE LEFT HAVING A RADIUS OF 72.00 FEET, A DELTA OF 21°45'04"; THENCE ALONG THE SOUTHWESTERN LINE OF LAST SAID PARCEL, AND SAID CURVE AN ARC LENGTH OF 27.33 FEET; THENCE LEAVING SAID SOUTHWESTERN LINE, NORTH 57°08'47" EAST, 83.33 FEET TO THE SOUTHWESTERN LINE OF SAID PARCEL B AND A POINT OF CUSP HAVING A RADIAL WHICH BEARS NORTH 32°51'13" WEST, A RADIUS OF 22.00 FEET', A DELTA OF 14°38'39"; THENCE SOUTHWESTERLY ALONG LAST SAID LINE AND AND SAID CURVE AN ARC LENGTH OF 5.62 FEET TO A NON- TANGENTCURVE TO THE LEFT HAVING A RADIAL WHICH BEARS NORTH 74°39'33" WEST, A RADIUS OF 50.00 FEET, A DELTA OF 48°08'27"; THENCE SOUTHWESTERLY AND SOUTHERLY ALONG SAID CURVE AN ARC LENGTH OF 42A1 FEET; THENCE, SOUTH 32°48'00" EAST, 332.66 FEET TO THE POINT OF BEGINNING. PARCEL TWO: BEING A PORTION OF PARCEL A AS SHOWN ON THE MAP ENTITLED PARCEL MAP 9185 FILED ON JULY 29, 2008 IN BOOK 308 OF PARCEL MAPS AT PAGE 57, ALAMEDA COUNTY RECORDS, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEASTERN CORNER OF SAID PARCEL A; THENCE ALONG THE SOUTHWESTERN LINE OF SAID PARCEL A, NORTH 61°40'00" WEST, 48,55 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID SOUTHWESTERN LINE, NORTH 61°40'00" WEST, 71.48 FEET TO A CURVE TO THE RIGHT, HAVING A RADIUS OF 572.00 FEET', A DELTA OF 04°06'59"; THENCE ALONG SAID CURVE AN ARC LENGTH OF 41.10 FEET TO A NON- TANGENT CURVE TO THE RIGHT HAVING A RADIAL WHICH BEARS NORTH 63°23`48" WEST, A RADIUS OF 50,50 FEET, A DELTA OF 166°55'43"; THENCE LEAVING SAID SOUTHWESTERN LINE, NORTHEASTERLY, EASTERLY, SOUTHEASTERLY, AND SOUTHERLY ALONG SAID CURVE AN ARC LENGTH OF 147.13 FEET TO A REVERSE CURVE HAVING A RADIUS OF 24.50 FEET, A Page 5 Order No.; 56901-952990-09 DELTA OF 49°57'12"; THENCE ALONG SAID CURVE AN ARC DISTRNCE OF 21.36 FEET TO THE POINT OF BEGINNING. APN: 941-fl550-014-06 (PORTION} ~~~~ ' ~~~ PARCEL THREE: BEING A PORTION OF PARCEL A AS SHOWN ON THE MAP ENTITLED PARCEL MAP 1177 FILER IN 800K 87 OF PARCEL MAPS AT PAGE 69, ALAMEDA COUNTY RECORDS, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHWESTERN CORNER OF SAID PARCEL A; THENCE ALONG THE SOUTHERN LINE OF SAID PARCEL A, NORTH 89°14'44" EAST, 13.43 FEET TO THE POINT OF BEGINNING SAID POINT BEING ANON-TANGENT CURVE TO THE RIGHT HAVING A RADIAL WHICH BEARS NORTH 68°18'10" WEST, A RADIUS OF 45.50 FEET, A DELTA OF 135°05'48"; THENCE LEAVING SAID SOUTHERN LINE, NORTHEASTERLY, EASTERLY, SOUTHEASTERLY, AND SOUTHERLY ALONG SAID CURVE AN ARC LENGTH OF 107.28 FEET TO SAID SOUTHERN LINE; THENCE ALONG SAID SOUTHERN LINE, SOUTH 89°14'44" WEST, 84.10 FEET TO THE POINT OF BEGINNING, APN: 941-0550-029 (PORTION) NOTE: THE ABOVE PARCELS ONE, TWO AND THREE ARE SHOWN FOR CONVENIENCE ONLY AND HAVE NOT BEEN CREATED OF RECORD. Page 6 Order No.: 56901-95299p-09 q~ ~ ioS Exhibit B Easement Area (attach description and plat) 1342196.5 Parcel A PM 9185 City of Dublin County of Alameda Legal Description Right of Way i~~ ios Real property situate in the City of Dublin, County of Alameda, State of California, described as follows: Being a portion of Parcel A as shown. on the map entitled Parcel Map 91.85 filed on July 29, 2008 in Book 308 of Parcel Maps at Page 57, Alameda County Records, described as .follows: Commencing at the southeastern corner of said Parcel A; thence along the southwestern line of said Parcel A, North 61 °40'00"West, 48.55 feet to the Point of Beginning; thence continuing along said southwestern line, North. 61 °40'00"West, 71..48 feet to a curve to tl~e right, having a radius of 572.00 feet, a delta. of 04°06'59"; thence along said curve an arc length of41.10 feet to anon-tangent curve to the right Laving a radial which bears North 63°23'4$" West, a radius of 50.50 feet, a delta of 166°55'43"; thence leaving said southwestern line, northeasterly, easterly, southeasterly, and southerly along said curve an arc length of 147.13 feet to a reverse curve having a radius of 24.50 feet, a delta of 49°57'12'"; thence along said curve an arc distance of 21.36 feet to the Point of Beginning. Containing 4,343 Sq. Ft. ~ ~~~~ Charles Selhnan L.S. 5186 Date Created on 7/30f2009 9:50 AM G:\AdminUobs-09\09105 51SURV EYIHONDA.doc ~`S S~~, -'~~ c3 Nc. 51$6 ,Exp. 06-30.11 , ~fi ~xl~~b~f 3 PARCEL B ~I ~ ~~~( PARCEL MAP 9185 BK 308 PARCEL MAP5 PG 57 LINE TABLE N0, BEARING DISTANCE L 1 N61 '40'00 "W 48.55' L2 N61 '40'00 "W 71.48' ~ I CURIE TABLE N0. RADIUS DELTA LENGTH Cl 572.00' 4 06'59" 41.10' C2 50.50' 166 55'43" 147.13' C3 24.50' 49 57'12" 21.3fi' S~ `~' PARCEL A ~~ ~ PARCEL MAP 9 ~ ~5 ~` ~ BK 3Q~ PARCEL MAPS PC ~7 ~ ~~ i \ ~'~j,, ~~ • RIGHT OF WAY ~ ,~\~ ~~, ACQUISITION ~ ti~ , S~~ s9.~ 4,343f SQ.FT. ~ qs°~~~~J ~ I ~ ~ ~ C2 R3 I o ~ N N '~ _N..._.. c ~ ~. z :~ ~~ ~ I A ~ 1 • ~e ~~ LEGEND ~ ~ 0 60 120 P.O.B. POINT OF BEGINNING \ \ P.O.C. POINT OF COMMENCEMENT \ A\ (IN FEET) ~ ~ ' Q C; 1 inch = 60 ft. (R) RADIAL (T) TOTAL \ SQ.FT. SQUARE FEET ~ ~ EXHIBIT B PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR STREET RIGHT OF WAY CITY OF DUBLIN, ALAMEDA COUNTY, CALIFORNIA G~6bOC71D9165VtgptpWeb\scdiet4-se~S-.cp6flkndy .~1')~- 11,. 1 RUCGERI~JENSEN-AZAR ENGINEERS • PLANNERS + SURVEYORS 4690 CHABOT ORIVC, SUITE 200 PL@ASANTON, CA 94588 PHONE: (925) 227-9100 FAX: (925) 227-9300 SCALE: DATE: JOB NO.: 1 °=fi0' 09--11-09 091055 ~c~ ~ dos Exhibit C Roadway Improvements The "Roadway Improvements" shall consist of those improvements located within the new westerly cul-de-sac on Scarlett Court shown on the improvement plans entitled Improvement Plans, Scarlett Court, prepared by Ruggeri-Jensen-Azar, consisting of Sheets 1-6 (6 Sheets total), dated August 7, 2009 or on such plans subsequently approved by the City Engineer. 1342196.5 7 1~3~~oS EXHIBIT I Parcel Three (attach legal description) 1313014.6 31 Parcel A PM 1177 City of Dublin ~ ~ ~ I~~ Couzity of Alameda Legal Descriptiozl Right of Way Real property situate in the City of Dublin, County of Alameda, State of California, described as .follows: Being a poz~tian of Parcel A as shown on tlae nzap entitled Parcel Map 1177 bled in Book 87 of Parcel Maps at Page 69, Alameda County Recards, described as follows: Commencing at the southwestern corz~zer of said Parcel A; thence along the southern line of said Parcel A, North 89° 14'44"East, 13.43 feet to the Point of Beginniz~zg said point being a zlon-tazlgent ctzzti~e to the right having a radial ~vlaich bears North 68°18'10" West, a radius of 45.50 feet, a delta of 135°p5'48"; thence leaving said southern line, northeasterly, easterly, southeasterly, and southerly along said curve an arc length of 107.28 feet to said southern line; thence along said soutl~ez~i line, South 89° 14'44"West, 84.10 feet to the Point of Beginning. Containing 1,710 Sq. Ft. t v ~ f/_ Charles Selh-r~zan L.S. S 86 ~~t- ft--,~.d Date Created ors 7/3012009 3:39 PM G:\Admin\7obs-09\091055\SURVEY\84 Lumber.doc ~'~ ~S SF~,.'~`G~,o` / '~' ~ .,~ ~Jo. 51136 ~ ti Exp. 06-34-11 ~.1 EKh.~b~t T LEGEND P.O.B. POINT OF BEGINNING 'd~ P.O.C. POINT OF COMMENCEMENT O 60 120 (R} RADIAL { IN FEET } - ~ _ (T} TOTAL 1, inch = 60 f~. SQ.FT. SQUARE FEET \ PARCEL B PARCEL Jv~AP ~ ~~'~ ~ PK ~7 PARCEL 1~lAP PC 6~ ~ i N ~ I L1 P.o.c. P.o.e. SCARL~f'7 CtiUR7 '~i 1N7~R57A7~ 5 3ti EXHTBTT B LINE TABLE N0. BEARING DISTANCE L 1 N8974'44 "E 13.43' L2 S8974'44"W 84.10' CURIiE TABLE N0. RADIUS DELTA LENG7N Cl 45.50' 135'05'48 107.28' RIGHT OF WAY ACQUISITION 1,710 SQ.F.T. PARC.~L A PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR STREET RTGHT OF WAY CITY OF DUBLIN, ALAMEDA COUNTY, CALIFORNIA ~~~~ 1 l,~ RUGGERI-JENSEN-AZAR ` ENGINEERS • PIANNERS • SURVEYORS 4590 CHABOT DRIVE, SUITE 200 P~EASANTON, CA 94588 PHONE: (925) 227-9100 FAX: (925) 227-9300 SCALE: QATE: JOB NO.: 1 "=60' 9-11-09 091055 ,~F „~~