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HomeMy WebLinkAbout01-19-2016 SLO Chinatown LLC, Hotel SLO LLC, Sutter Tustin SLO, LLC - First Amendment to Agreement of Purchase and Sale of Palm Development SiteFIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE Palm Development Site This First Amendment to Agreement ( "Amendment') is made and entered into as of January 19, 2016, by and between SLO CHINATOWN, LLC, a California limited liability company ( "Copelands "), HOTEL SLO, LLC, a California limited liability company ( "Hotel LLC ") and Sutter Tustin SLO, LLC ,a California limited liability company ( "ST SLO "; and collectively with Hotel LLC, "Hotel Developer"), and the CITY OF SAN LUIS OBISPO, a municipal corporation and charter city ( "City "), with respect to that certain Agreement of Purchase and Sale — Palm Development Site, dated as of December 19, 2011 (the "Agreement "), by and between the Copelands and the City. City, Hotel Developer, and Copelands are each a "Party" hereto, and are sometimes collectively referred to as "Parties ". Capitalized terms not otherwise defined herein shall have the same meaning as in'the Agreement. RECITALS A. Copelands has requested City consent to the assignment of the Agreement because the assignment, in the absence of City's consent, would violate the Agreement, would be null and void and would confer no right or benefit upon Hotel Developer or any other party. B. In connection with the proposed Assignment, Copelands and Hotel Developer have requested that certain terms of the Agreement be amended to expedite the start and subsequent completion of the planned hotel project. C. ' In cor)sideration of the representations, warranties and covenants herein made by Copelands and Hotel Developer in favor of the City, the City is willing to consent to the proposed assignment to Hotel Developer, and to amend the Agreement, pursuant to the provisions and subject to the limitations set forth in this Agreement. Now therefore, the parties agree as follows: AGREEMENT 1, Effective Date of Assignment. The assignment of Copelands' interest in the Agreement to Hotel Developer, and the assumption thereof by Hotel Developer, shall take effect on or before January 19, 2016 (the "Effective Date "). Assignment and Assumption. 2.01 Assignment. As of the Effective Date, Copelands as assignor assigns all of its rights under the Agreement to Hotel Developer. 2.02 Assumption. As of the Effective Date, Hotel Developer accepts the assignment from Copelands and assumes, in favor of each of Copelands and the City, all obligations under the Agreement, which obligations Hotel Developer hereby covenants to perform fully and timely. 3, Consent. As of the Effective Date and provided that the representations and warranties made in Section 5 of this Amendment shall be true and correct as of the Effective Date, the City hereby consents to the foregoing assignment from Copelands to Hotel Developer and accepts Hotel Developer as the purchaser under the Agreement. 4. No Implied Consent or Waiver. The City's consent to the assignment of the Agreement from Copelands to Hotel Developer is specifically limited to this assignment in particular on all the terms set forth in this Amendment. The City has granted this consent upon the understanding and agreement of Copelands and Hotel Developer, which understanding and agreement Copelands and Hotel Developer hereby ratify and confirm, that the City's consent to this assignment: (a) is not a consent to any future assignment of the Agreement; and (b) shall in no way diminish or waive the City's right, as set forth in the Agreement, to restrict any subsequently proposed assignment or other transfer of the rights under the Agreement. Representations and Warranties by Copelands and Hotel Develo er. 5.01 Representations and Warranties of Copelands. Copelands makes the following representations and warranties to City: (a) Copelands is a California limited liability company duly organized and validly existing under the laws of the State of California, and is qualified to do business in the State of California. (b) Copelands has the right, power and authority to enter into this Amendment and to perform its obligations hereunder, and the person(s) executing this Amendment on behalf of Copelands have the right, power and authority to do so. (c) This Amendment constitutes the legal, valid and binding obligation of Copelands enforceable against Copelands in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. Neither this Amendment nor the consummation of any of the transactions contemplated hereby violates or shall violate any provision of any agreement or document to which Copelands is a party or to which Copelands is bound. (d) Copelands is not bankrupt or insolvent under any applicable Federal or state standard. Copelands has not filed for protection or relief under any applicable bankruptcy or creditor protection statute. Copelands has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. Copelands is not entering into the transactions described in this Amendment with an intent to defraud any creditor or to prefer the rights of one creditor over any other, City and Copelands have negotiated this Amendment at arms - length and the consideration to be paid represents fair value for the assets to be transferred. All representations and warranties of Copelands in this Amendment are made as of the date of this Amendment, and shall survive the Closing and the recordation of the Grant Deed. 5.02 Representations and Warranties of Hotel Developer. Hotel LLC and ST SLO each make the following representations and warranties to City: (a) Hotel LLC and ST SLO are each a California limited liability company duly organized and validly existing under the laws of the State of California, and each is qualified to do business in the State of California. (b) Hotel LLC and ST SLO each have the right, power and authority to enter into this Amendment and to perform its obligations hereunder, and the person(s) executing this Amendment on behalf of Hotel LLC and ST SLO each have the right, power and authority to do so, (c) This Amendment constitutes the legal, valid and binding obligation of Hotel LLC and ST SLO enforceable against each of them in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the rights of contracting parties generally. Neither this Amendment nor the consummation of any of the transactions contemplated hereby violates or shall violate any provision of any agreement or document to which Hotel LLC or ST SLO is a party or to which Hotel LLC or ST SLO is bound. No consent from any third party is required before the Palm Development Site may be purchased by Hotel Developer. (d) Neither Hotel LLC nor ST SLO is bankrupt or insolvent under any applicable Federal or state standard. Neither Hotel LLC nor ST SLO have filed for protection or relief under any applicable bankruptcy or creditor protection statute. Neither Hotel LLC nor ST SLO have been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. Neither Hotel LLC nor ST SLO is entering into the transactions described in this Amendment with an intent to defraud any creditor or to prefer the rights of one creditor over any other. City and Hotel Developer have negotiated this Amendment at arms - length and the consideration to be paid represents fair value for the assets to be transferred. All representations and warranties of Hotel Developer in this Amendment are made as of the date of this Amendment and as of the Closing, and shall survive the Closing and the recordation of the Grant Deed. It shall be a material default if Hotel Developer is unable to make such representations and warranties truthfully as of the Closing Date. 6. Amendments to Agreement. As of the Effective Date, the Agreement is amended as follows: 6.01 Purchaser. All references in the Agreement to Copelands shall be understood to mean Hotel Developer. Notwithstanding the foregoing, all references in this Amendment to Copelands shall continue to mean SLO Chinatown, LLC, a California limited liability company. 6.02 Conditions to Closing. Section 4.02(c). Construction on Palm Development Site: Section 4.02(c) of the Agreement is hereby deleted in its entirety and shall be replaced as follows: (c) Construction on Palm Development Site. Hotel Developer shall have provided evidence reasonably satisfactory to the City that it is prepared to commence construction on the Palm Development Site in accordance with San Luis Obispo City Council Resolution No. 10128 (2009 Series), adopted November 17, 2009, and in conformity with the 2009 EIR (including without limitation the reuse of the Shanghai Low Restaurant sign), or as such entitlements subsequently may be modified and approved by the City in the normal exercise of its development review authority following request therefor by Hotel Developer or its predecessors in interest (the "Project ") as follows: (i) Hotel Developer has obtained such demolition and grading permits for Project as may be reasonably needed to prepare for construction of the Project (the "Demolition Permit ") and the Demolition Permit has not expired; (ii) Hotel Developer shall have submitted evidence to the City's reasonable satisfaction demonstrating sufficient financial resources, from construction lenders and from equity funds and investors as may be necessary, to complete the construction and equipping of the Project in accordance with a budget prepared by Hotel Developer; (iii) Hotel Developer shall have submitted evidence to the City's reasonable satisfaction that Hotel Developer has entered into construction contracts for the Project evidencing that the work of construction can be completed within the budget; and (iv) Hotel Developer has submitted evidence to the City that a binding contract has been entered into, or is not appropriate, between Hotel Developer and an operator of the completed Project. (v) The Closing on the Palm Development Site is conditioned on closing concurrently with the closing of the construction loan from the construction lender referenced in subsection (ii) above; (vi) Hotel Developer has provided security in the amount of $1,000,000 to City to ensure diligent progress in construction of the Project, which shall be available for restoration of the Palm Development Site if Hotel Developer fails to diligently commence and pursue construction. The security shall be forfeited to City, (a) if Hotel Developer does not obtain all building permits for the Palm Development Site and commence construction within twelve (12) months of the Closing Date, and (b) if Hotel Developer does not diligently pursue construction; provided, City shall release three - fourths of the security when all building permits are issued, and the remaining one -fourth when the foundation is signed off by the City. 6.03 Conditions to Closing. Section 4.02 d . Construction on Monterey Parcels: Section 4,02(d) of the Agreement is hereby deleted in its entirety and shall be replaced as follows: (d) Construction_ on Monterey Parcels. Significant progress on the construction of the Monterey Improvements on the Monterey Real Property has been made and Copelands is diligently pursuing completion thereof. 6.04 Early_ Termination. Section 4.08, Earl Termination: Section 4.08 of the Agreement is hereby deleted in its entirety and not replaced. 6.05 Post Closing Obligations. Section 7.01. Limitations and Restrictions on the Use of Palm Development Site; Reverter. Section 7.01 of the Agreement is hereby deleted in its entirety and shall be replaced as follows: After the Closing, Hotel Developer agrees to promptly commence construction on the Project and to diligently pursue such construction to completion thereafter in accordance with the Demolition Permit and the construction Permits (collectively, the "Permits ").The parties agree, and the Grant Deed shall contain property restrictions and conditions, in a form acceptable to the City Attorney and in substantively the same form as Exhibit F -1 attached hereto (the "Property Restrictions "). The Property Restrictions shall reflect, that until Substantial Completion(as defined below) of the Project in accordance with the Permits: (i) the use of the Palm Development Site shall be limited and restricted to the construction of the Project in accordance with the Permits; (ii) Hotel Developer shall not encumber the Palm Development Site except as security for construction loans to finance the construction of the Project: and (iii) the City has the right of reverter and a power of termination (Civil Code section 885.010) to cause the title of Hotel Developer to the Palm Development Site to terminate and to revert to the City under the conditions set forth in the next sentence. The Grant Deed or other document shall reflect that City may exercise its right of reverter and power of termination described above (a) if Hotel Developer does not obtain all of the Permits required to construct the Project within twelve (12) months of the Closing Date and (b)if Hotel Developer does not commence work on the Project in accordance with any of the Permits within six (6) months of the Closing Date; or (c) if construction is commenced but construction is not diligently pursued by Hotel Developer to Substantial Completion within twenty -four (24) months of the Closing Date, or within such additional period of time to which the City may consent in writing upon demonstration by Hotel Developer of diligence and good cause, including time diligently spent in archaeological review and remediation, such consent not to be unreasonably withheld. "Substantial Completion" shall be deemed to have occurred when the Project is complete in accordance with the construction contract the Permits and Project approvals, including the exterior shell(s) roofed, exterior windows and doors installed, final exterior siding /stucco with finishes applied, all public improvements including, but not limited to, sidewalks, relocated parking and driveways, required by the Permits or Project approvals, have been accepted by the City or other applicable public entity, and all debris, construction fencing ,materials or equipment that encroach in the right of way removed. Substantial Completion does not include, and excepts, interior improvements, a final punch list of construction items related to the above work and a final issuance of a Certificate of Occupancy. If the City exercises its power of termination and right of reverter, in return for waiving its right to recover attorneys' fees and costs incurred in the exercise of such power and right, as set forth in the Grant Deed, City shall not be required to repay the Purchase Price, the Palm Parking Mitigation Payment, or any other sums expended or incurred by Hotel Developer or any other person or entity in connection with Hotel Developer's purchase or development of the Palm Development Site. In the event the City, being entitled to do so, causes the title to the Palm Development Site to revert to the City, the City shall be entitled permanently to retain title to the Palm Development Site, including but not limited to 861/863 Palm Parcel and shall have no obligation to offer, return or to sell title to the Palm Development Site to Hotel Developer, any co- tenant or any other person or entity. Upon the timely substantial completion of the Project in accordance with the Permits, the City shall execute and deliver to Hotel Developer a Certificate of Completion in substantially the form attached hereto as Exhibit F -2, which shall acknowledge that the deed restriction and any right of reverter in favor of the City have terminated. 6.06 Assignment. Section 11.11. Successors and Assigns: The following subsection (d) shall be added to Section 11.11 of the Agreement and thereafter, shall collectively be referred to, along with subsections (a), (b) and (c), as "Permitted Assignments ": (d) The assignment of the Agreement to Hotel Developer as provided herein in which: (i)the Copelands have no less than a 13.3% equity interest in the Project ; and (ii) Hotel LLC will have at least a 75% majority and controlling interest in the Project; and (iii) Hotel LLC is the manager of the project and the managers of Hotel LLC are Metrovation LLC, a California Limited Liability Company and Piazza Hotel Management LLC, a California Limited Liability Company; and (iv) the Copelands continue to provide construction and pre- opening management services, including without limitation working as the primary liaison with the City, and the Copelands deliver to the City satisfactory evidence of such ownership and management. 6,07 Attachment of Exhibit Q -- Legal Description A copy of the legal description for the Palm Development Site is attached as Exhibit "B" and incorporated by this reference. 6.08 Effect of Amendment. Any and all terms and provisions of the Agreement are hereby modified wherever necessary, and even though the same may not be specifically addressed herein, so as to conform to the amendment(s) set forth in the preceding paragraph(s) hereof. 7. Address for Notices to Hotel Developer. If to Hotel SLO, LLC: Metrovation, LLC its Manager 580 Second Street, Suite 260 Oakland, CA 94607 With a copy to: Delphi CRE Funding LLC C/o ACORE Capital Mortgage, LP 80 E. Sir Francis Drake Blvd., Suite 2A Larkspur, CA 94939 Attn: Stew Ward, Managing Partner If to Sutter Tustin SLO, LLC: Louis Upset, its Manager 2590 Pacific Avenue San Francisco, CA 94115 With a copy to: Steven D. Seiler Seiler Epstein Ziegler & Applegate, LLP 601 Montgomery Street, Suite 2000 San Francisco, CA 94111 With a copy to: Delphi CRE Funding LLC c/o ACORE Capital Mortgage, LP 80 E. Sir Francis Drake Blvd., Suite 2A Larkspur, CA 94939 Attn: Stew Ward, Managing Partner 8. Miscellaneous Authorization. The person executing this Amendment on behalf of Copelands and Hotel Developer hereby warrant and represent to City that all necessary legal prerequisites to that party's execution of this Amendment have been satisfied and that he or she is fully authorized to do so and to bind the party of whose behalf he or she signs. The person executing this Amendment on behalf of City claims to do so to the extent the authority to do so has been duly delegated to that person by the City Council of the City in accordance with applicable law, Counterparts. A counterpart of this Amendment with separate but fully executed signature pages attached thereto shall have the full force and effect of an original executed instrument. [signature blocks begin on next page] 0 This Amendment is executed by the parties as of the date first written above. SLO CHINATOWN, LLC, a California limited liability company �`A et. Copeland Its: Manager HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager Mark Seiler, Manager By: Piazza Hotel Management, LLC, a California limited liability company, its Manager Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, a California limited liability company, its Manager By: Louis Lipset CITY OF SAN LUIS OBISPO, a municipal corporation and Charter City Katie Lichtig, City Manager Approved as to Form: BV: City Attorney 7 This Amendment is executed by the parties as of the date first written above. SLO CHINATOWN, LLC, a California limited liability company By: James C. Copeland Its: Manager HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager p � 4 JL.r Mar r, Manager y: Pia za otel Management, LLC, a California limited It bility m ny, its Manager Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutt"ustin, a California limited liability company, its Manag t / By: Louis Lipset CITY OF SAN LUIS OBISPO, a municipal corporation and Charter City By: Katie Lichtig, City Manager Approved as to Form By:_ City Attorney 7 This Amendment is executed by the parties as of the date first written above. i SLO CHINATOWN, LLC, a California limited liability company By: James C. Copeland Its: Manager HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager Mark Seiler, Manager By: Piazza Hotel Management, LLC, a California limited liability company, its Manager Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, a California limited liability company, its Manager By: Louis Lipset CITY OF SAN LUIS OBISPO, a municipal corporat}gn and Charter City i �r , I J 0 Lichtig,'City Manager 7 This Amendment is executed by the parties as of the date first written above. SLO CHINATOWN, LLC, a California limited liability company By: James C. Copeland Its: Manager HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager Mark Seiler, Manager By: Piazza Hotel Management, LLC, a California limited liability company, its Manager Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, a California limited liability company, its Manager By: Louis Lipset CITY OF SAN LUIS OBISPO, a municipal corporat' n and Charter City 1 /1, ._r By: e Lichtfg,' City Manager codrnu�secr M4 f- I r/" a 7 A- LN Exhibit B to Palm Development Site PSA LEGAL DESCRIPTION Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 54° 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 35° 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 350 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 330 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 530 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 360 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST 36.75 FEET TO A POINT; THENCE NORTH So 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 12,75 FEET TO A POINT; THENCE NORTH 500 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 540 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 540 06' WEST, 72,44 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT N0, 2012042357, OF OFFICIAL RECORDS, PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 540 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 540 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS, N. E, CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 530 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 360 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 530 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. First American Title Insurance Company Page 1 of 3 Exhibit B to Palm Development Site PSA EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89,65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23'50" EAST, 100,1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 530 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 331 16' 30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 7D4, PAGE 439 OF OFFICIAL RECORDS. PARCEL 7: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH S3° 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO First American 77de Insurance Company Page 2 of 3 Exhibit B to Palm Development Site PSA CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 530 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET. APN(S); 002- 416 -031, 002- 416 -035 and 002 - 416 -038 First American Title Insurance Company Page 3of3 Exhibit F -1 To Palm Development PSA When recorded return to: Steven D. Seiler, Esq. Seiler Epstein Ziegler & Applegate LLP 601 Montgomery Street, Suite 2000 San Francisco, CA 94111 GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, Grant CITY OF SAN LUIS OBISPO, a municipal corporation and a chartered city organized and existing under the Constitution of the State of California ("Grantor "), hereby grants to HOTEL SLO, LLC, a California limited liability company, as to a 79.2% undivided interest and SUTTER TUSTIN SLO, LLC, a California limited liability company, as to a 20.8% undivided interest, as tenants -in- common (collectively, the "Grantee "), certain real property (herein called "Palm Development Site ") specifically described on the attached Exhibit A incorporated herein by this reference, on the terms and conditions set forth herein. The Palm Development Site is conveyed to carry out the public purposes of that certain Agreement of Purchase and Sale —Palm Development Site (as amended, the "Agreement "), a public document in the records of the Clerk of City of San Luis Obispo, dated December 19, 2011, which was amended by that certain First Amendment to Agreement of Purchase and Sale -- Palm Developments Site, dated as of January _, 2016, The Agreement was approved by the City Council of the City of San Luis Obispo on December 13, 2011. Palm Development Site Restrictions and Conditions Until the Project (as that term is defined in the Agreement has been substantially completed in the time and manner required by the Agreement or as otherwise provided herein, the terms set forth in this paragraph and the following paragraphs numbered 1 through 8 (hereinafter, the "Palm Development Site Restrictions ") shall govern the ownership and use of the Palm Development Site, Grantor, upon request of the owner of the Palm Development Site and submission to Grantor of evidence reasonably satisfactory to Grantor that the Project has been substantially completed in accordance with the Agreement, shall deliver the Certificate of Completion in substantially the form attached hereto as Exhibit B (the "Certificate of Completion "), which is suitable for retardation in the Official Records and the terms of these Palm Development Site Restrictions shall automatically cease and terminate. Grantor and Grantee agree as follows: I , Prior to the date Grantor is required to issue the Certificate of Completion, Grantee hereby covenants for itself, its successors, its assigns and every successor in interest to the Palm Development Site or any part thereof that: a. The Palm Development Site shall not be used for any purpose other than the construction, development and operation of the Project; b. Grantee shall commence construction of the Project as required by the Agreement and shall diligently pursue such construction to completion thereafter as required by the Agreement. The Grantee shall be deemed to be in default; (a) if Grantee does not obtain all of the permits required to construct the Project within twelve (12) months of the Closing Date and (b)if Grantee does not commence work on the Project in accordance with any of the Permits (as that term is defined in the Agreement) within six (6) months of the Closing Date; or (c) if construction is commenced but construction is not diligently pursued by Grantee to Substantial Completion (defined below) within twenty -four (24) months of the Closing Date, or within such additional period of time to which the City may consent in writing upon demonstration by Grantee of diligence and good cause, including time diligently spent in archaeological review and remediation, such consent not to be unreasonably withheld. "Substantial Completion" shall be deemed to have occurred when the Project is complete in accordance with the construction contract the Permits and Project approvals, including the exterior shell(s) roofed, exterior windows and doors installed, final exterior sidinglstucco with finishes applied, all public improvements including, but not limited to, sidewalks, relocated parking and driveways, required by the Permits or Project approvals, have been accepted by the City or other applicable public entity, and all debris, construction fencing ,materia]s or equipment that encroach in the right of way removed. Substantial Completion does not include, and excepts, interior improvements, a final punch list of construction items related to the above work and a final issuance of a Certificate of Occupancy. C. Crrantee shall have no power to make, and shall not make or attempt to make, any total or partial sale, transfer, conveyance, encumbrance, lease or assignment of the Palm Development Site or any part thereof without the prior written consent of Grantor, except for (i) any mortgage, deed of trust, sale and leaseback or other form of conveyance or encumbrance for financing, including without limitation the lien created by that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated as of January ", 2116 and recorded on or about the date hereof ( "Deed of Trust ") by Grantee for the benefit of Delphi CRE Funding LLC, a Delaware limited liability company (together with its successors and assigns, the "Lender ") together with any other deed of trust or mortgage (collectively, "Mortgage"), for the purpose of securing loans whose proceeds shall only be used for financing the direct and indirect costs (including, without limitation, financing costs, tenant improvement allowances, interest and commissions) of designing, constructing and developing the Project , (ii) the sale or conveyance of the Palm Development Site or any portion thereof pursuant to the exercise of its remedies by Lender or another lender under a Mortgage (each, a "Mortgage Lender ") under the relevant loan documents or a deed given in lieu of the exercise of such remedies; (iii) the conveyance or dedication of any portion of the Palm Development. S ite to the City, or other appropriate governmental City or municipal corporation; (iv) the granting of easements or permits to facilitate the construction, development or operation of the Project, including without limitation, utility easements; and (v) the leasing of space in the ordinary course of business in the Project for occupancy by retail, restaurant, office or other commercial businesses following completion of the Project.. In the absence of specific written agreement by Grantor, no such unauthorized sale, transfer, conveyance or assignment of the Palm Development Site shall be deemed to relieve Grantee or any other party from any obligations under these Palm Development Site Restrictions; d. Grantee shall not place or suffer to remain undischarged on the Palm Development Site for more than sixty (60) days after notice from Grantor any lien or encumbrance other than a Mortgage unless such lien or encumbrance, or the amount thereof, is being contested in good faith by appropriate proceedings diligently conducted; e, Grantee shall pay prior to delinquency all real property taxes and assessments assessed and levied on or against the Palm Development Site subsequent to the conveyance of the Palm Development Site to Grantee by Grantor unless such tax or assessment is being contested in good faith by appropriate proceedings diligently conducted; f. Grantee shall remove, or shall have removed, any levy or attachment made on the Palm Development Site, or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder unless such levy or attachment, or the amount thereof, is being contested in good faith by appropriate proceedings diligently conducted; g. If Grantee shall fail perform or observe any term or covenant in any loan document or other obligation secured by the Mortgage, Grantee shall cure such failure within sixty (60) days after notice thereof to Grantee from the Mortgage Lender; h. Grantee, its successors and assigns, and any successor -in- interest to the Palm Development Site shall hold the Palm Development Site as one parcel and shall not subdivide the Palm Development Site without the prior written consent of Grantor; and i. Grantee shall cure any violation of the provisions of this paragraph l within 60 days after the date of receipt of written notice of such violation by Grantor to Grantee, or, if such violation is of nature that it cannot be cared withal 60 days, then Grantee shall have commenced to cure such violation within 60 days after the date of receipt of ~Witten notice of such violation and shall diligently continue to act to cure such violation. Grantor shall provide Mortgage Lender with notice of the breach or default by Grantee hereunder (the ")(Default Notice "). After Mortgage Lender receives a Default Notice, Mortgage Lender shall have a period of thirty (30) days beyond the time available to Grantee hereunder or the Agreement (whichever is longer) in which to cure the breach or default by Grantee. Mortgage Lender shall have no obligation to cure (and shall have no liability or obligation for not curing) any breach or default by Grantee, except to the extent that Mortgage Lender agrees or undertakes othenArise in writing. In addition, as to any breach or default by Mortgage Lender the cure of which requires possession and control of the Palm Development Site, Mortgage Lender's cure period shall continue for such additional time as Mortgage Lender may reasonably require to either: (i) obtain possession and control of the Palm Development Site with due diligence and thereafter cure the breach or default with reasonable diligence and continuity; or (ii) obtain the appointment of a receiver and give such receiver a reasonable period of time in which to cure the default. The foregoing shall not be construed to limit or modify Section 5 below. 2. Prior to the date Grantor is required to issue the Certificate of Completion and subject to the Deed of Trust, Grantor hereby reserves and shall retain for exercise at its option, the additional right and power of termination of the estate conveyed by this Grant Deed and to re -enter and take possession of the Palm Development Site hereby conveyed with all improvements thereon, and to terminate Grantee's ownership interest in, and revest in Grantor, the Palm Development Site (the "Power of Termination ") in the event that Grantee is in violation of any subparagraph of paragraph 1 of these Palm Development Site Restrictions and such violation is not cured by Grantee in a timely manner, 3. The Power of Termination of Grantor with respect to the Palm Development Site shall be interpreted in light of the fact that Grantor would not have agreed to the Purchase Price and Palm Parking Mitigation Payment (each as defined in the Agreement) for the Palm Development Site and would not have agreed to convey the Palm Development Site to Grantee except for the covenant and promise of Grantee to construct and develop the Project on the Patin Development Site and the trust and confidence placed by Grantor in the good faith intent and abilities of the Grantee, and that Grantor hereby conveys the Palm Development Site to Grantee for development of the Project to benefit and enhance the planning goals of the City of San Luis Obispo for the benefit of its citizens, and not for speculation in undeveloped land. 4, in the event title to the Palm Development Site conveyed by Grantor to Grantee by the Grant Deed is reverted in Grantor by reason of the exercise by Grantor of its Power of Termination as provided in these Palm Development Site Restrictions: (i) Grantee shall have delivered to Grantor a quitclaim deed in recordable forrn fox the Palm Development Site naming Grantor as the grantee; (ii) a land title insurance company satisfactory to Grantor shall commit to issue a title insurance policy to Grantor as the insured, showing fee title vested in Grantor subject to no liens, encumbrances or third party claims incurred by or through Grantee, its successors and assigns, except for a Mortgage or as otherwise allowed by these Palm Development Site Restrictions (the "Allowable Exceptions "), with coverage in a reasonable amount to be determined by Grantor; and (iii) Grantee shall reimburse Grantor for any payment made or necessary to be made to discharge or prevent any current or delinquent taxes, encumbrances, liens, levies or attachments or third party claims incurred by or through Grantee, except for the Allowable Exceptions, from attaching to the title at the time it is revested in Grantor by the exercise of its Power of Termination, 5. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in these Palm Development Site Restrictions, or exercise of any Power of Termination, shall defeat or render invalid or in any way impair the lien or charge of any Mortgage permitted by these Palm Development Site Restrictions and made in good faith and for value. For the avoidance of doubt, the Mortgage is a first priority lien and the Power of Termination is subordinate to the Mortgage in all respects. Further, the terms of these Palm Development Site Restrictions shall automatically cease and terminate ninety (90) days after a Mortgage Lender has provided Grantor with written notice of a default (the "Mortgage Default Notice ") in the obligations under any agreement secured by the Mortgage, if such default has not been cured within such ninety (90) day period, as to Mortgage Lender or any owner of the Palm Development Site who has acquired the Palm Development Site pursuant to a Mortgage Lender's exercise of its remedies under the relevant loan documents or pursuant to a deed given in lieu of the exercise of such remedies (a "Successor Owner "). Further, Grantor shall forbear from exercising its rights and remedies to enforce the Power of Termination from the time Grantor has received the Mortgage Default Notice and thereafter during the time that Mortgage Lender is diligently enforcing Mortgage Lender's rights and remedies against Grantee under the Mortgage and other loan documents, including without limitation, sending default notices, efforts to enter into a loan workout or modification, acceleration of the loan, foreclosure or deed in lieu of foreclosure and defending Mortgage Lender's rights under Grantee's bankruptcy proceedings, Upon the transfer of title to the Mortgage Lender or any Successor Owner and the resulting termination of these Palm Development Site Restrictions pursuant to this paragraph, the Grantor agrees to execute and record in the Official Records a notice that these Palm Development Site Restrictions have been terminated in form and substance reasonably satisfactory to then owner of the Palm Development Site. Nothing contained herein shall be deemed to obligate the holder of the Mortgage, its successors or assigns, or any Successor Owner to undertake the construction and development of the Project, Notwithstanding the foregoing, if a Successor Owner subsequently undertakes to construct the Project, then such Successor Owner shall diligently pursue such construction to completion. 6. Grantor, in the event of any breach of any covenant in these Palm Development Site Restrictions, shall have the right to exercise all the rights and remedies, and to maintain any action at law or suits in equity or other proper proceedings to enforce the curing of such breach. 7. The covenants contained in these Palm Development Site Restrictions shall be interpreted without regard to technical classification or designation, and shall not benefit or be enforceable by any person, firm, or corporation, public or private, except Grantor and Grantee and their respective successors and assigns. & In the event any action is brought to enforce, modify or interpret the provisions of these Palm Development Site Restrictions, neither party shall be entitled to attorneys' fees or court costs in connection with such action, If any clause, sentence or other portion of these Palm Development Site Restrictions shall be or become illegal, unenforceable or void for any reason, the remaining portion shall continue in full force and effect. [remainder of page intentionally left blank] Execution IN WITNESS WHEREOF, Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunder duly authorized, as of this day of 20 GRANTOR: City of San Luis Obispo, a municipal corporation and charter city By :_ VI or APPROVED AS TO FORM AND LEGAL EFFECT: ity Attorney ' Dated: GRANTEE: Hotel SLO, LLC, a California limited liability company By: Metrovation, LLC, its co- manager By: lylkifk Seiter, s: Manage r By: Piazza Hotel Management, LLC, its co- manager By: Fa-0 o e rove, anager Sutter Tustin SLO, LLC, a California limited liability company By: Sutter Tustin, LLC, a California limited liability company, it Manager By: Dais 1,lpset, Manager Exhibit F -2 to Palm Development PSA Exhibit B Certificate of Completion RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO; Certificate of Completion City of San Luis Obispo, a municipal corporation and a chartered city organized and existing under the Constitution of the State of California ( "Grantor "), hereby certifies with respect to Section 7.01 of that certain Agreement of Purchase and Sale — Palm Development Site, dated as of December _, 2011, which was amended by that certain First Amendment to Agreement of Purchase and Sale -- Palm Developments Site, dated as of January _, 2016, executed by Hotel SLO; LLC, a limited liability company and Sutter Tustin SLO, LLC, a California limited liability company, as tenants -in- common (collectively, the "Grantee ") in favor of Grantor, and that certain Grant Deed recorded in the Official Records of the County of San Luis Obispo County on- , 200_, as document number , with respect to the real property more specifically described in Exhibit 1 attached hereto (collectively, the "Palm Development Site Restrictions "), as follows: and 1. The Project has been substantially completed in accordance with the Permits; 2. All covenants and obligations of Grantee and its successors and assigns under the Palm Development Site Restrictions, including without limitation the right of reverter and power of termination of Grantor, have ceased and terminated. All capitalized terms not otherwise defined in this Certificate of Completion shall have the meaning given in the Palm Development Site Restrictions, This Certificate of Completion has been duly executed by an authorized person on behalfofGrantor as of —.200, , GRANTOR: CITY OF SAN LUIS OBISPO, a municipal corporation and Charter City By: Its: APPROVED: City Attorney City of San Luis Obispo Exhibit F -2 to Palm Development PSA LEGAL DESCRIPTION Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS; BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 54° 06' EAST, 109,31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 350 54' WEST, 80.D0 FEET TO A POINT; THENCE NORTH 540 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 3510 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 33° 02' WEST, 148,54 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 530 38' EAST, 12,00 FEET TO A POINT; THENCE SOUTH 36° 22' EAST, 70,25 FEET TO A POINT; THENCE SOUTH 811 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8,13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 12.75 FEET TO A POINT;. THENCE NORTH 500 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 5411 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 351 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 540 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL TWO; THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS; BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 54° 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 54° 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS, N, E, CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS, N, E. CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 530 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 360 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 530 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38,08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W, J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. First American Title Insurance Company Exhibit F -2 to Palm Development PSA EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT N0, 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 53° 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89,55 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38" EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 231 50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 530 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 53'0 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 33° 16' 30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.19 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF FART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 11 PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS, PARCEL 7: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 53° 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY .CONVEYED TO FERDINANDO First American Title Insurance Company Exhibit F -2 to Palm Development PSA CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 530 38' WEST, 148,25 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET, APN(S): 0.02- 416 -031, 002 - 416 -035 and 002- 416 -038 (new # 002 - 416-040) First American Title Insurance Company L TO: FIRST AMERICAN TITLE INSURANCE COMPANY 1850 Mt. Diablo Boulevard Suite 300 Walnut Creek, CA. 94596 (925) 927 -2100 January 21, 2016 Escrow No.: 692048 PROPERTY: APN(S): 002- 416 -031, 002 - 416 -035 AND 002-416-038, SAN LUIS OBISPO COUNTY, CA Escrow Officer: Pamela Nicolini JOINT BUYERS AND SELLERS ESCROW CLOSING INSTRUCTIONS Seller hands you herewith: Grant Deed First Amendment to Agreement of Purchase and We — Palm Development Site Certification of Non-Foreign Status Estimated Closing Statement CA Real Estate Withholding Exemption Certificate 593C Owner's Authorizing Resolution Owner's Affidavit/Gap Indemnity Seller's Exchange Acknowledgement for Sutter Tustin Parking Lease (not to be recorded) Closing Certificate You are authorized to record the Grant Deed when it is fully executed by Seller and Buyer, and when you have received: a fully executed First Amendment to Agreement of Purchase and Sale -Palm Development Site from Seller and Buyer, a fully executed Closing Certificate from Seller and Buyer, a fully executed Parking Lease(Standard Industrial /Commercial Single Tenant Lease -Net) from Seller and Buyer, and funds for Seller in the amount of $3,666,418.00 and are in a position to record the Deed of Trust from Delphi CRE Funding LLC following the recordation of the Grant Deed. Buyer hands you herewith: Grant Deed Approved TITLE COMMITMENT Estimated Closing Statement Funds due to close IN THE FORM OF A WIRE, PER THE SIGNED ESTIMATED CLOSING STATEMENT WHICH INCLUDES $I,000,000 to be paid to City as a security deposit AND $2,193,050 TO BE PAID TO CITY AS PARKING MITIGATION IN ADDITION TO PURCHASE CONSIDERATION Closing Certificate Parking Lease (not to be recorded) First American Title Insurance Escrow No. 692048 January 21, 2016 Page 2 Memorandum of Tenants in Common Agreement Quitclaim of 1914 Right of Way from JCC Mission, LLC and TMC Mission, LLC WITH SEPARATE AUTHORIZATION INSTRUCTION FROM GRANTORS Reciprocal Easement Agreement for Pedestrian Plazas and Walkways WITH SEPARATE AUTHORIZATION INSTRUCTION FROM ALL NON BUYER PARTIES NEW LOAN DOCUMENTS PRELIMINARY CHANGE OF OWNERSHIP REPORT FORM FOR GRANT DEED AND QUITCLAIM DEED ENTITY DOCUMENTS WITH CERTIFICATIONS EXCHANGE DOCUMENTS FOR SUTTER TUSTIN which you are authorized and instructed to record, deliver and /or disburse, as needed to consummate this escrow, when you have for delivery to the undersigned Seller AND BUYER AS SHOWN BELOW, AND when you have accomplished, AND are in a position to accomplish all of the following: (1) when you are in a position to record ALL OF THE DOCUMENTS LISTED BELOW IN THE ORDER LISTED pursuant to THESE INSTRUCTIONS AND those certain instructions to you from Delphi CRE Funding LLC, a Delaware limited liability company ( "Lender "), dated as of January 25, 2016, and (2) you ARE PREPARED TO DELIVER UPON RECEIPT OF RECORDING CONFIRAMTION the following: FOR SELLER ACCOUNT: Balance of proceeds per the attached statement in the form of a Wire per our wiring instructions E- MAILED TO YOU I /14/16 3:13 P.M. FROM ANNE RUSSELL and your Final Closing Statement Closing Certificates First Amendment to Agreement of Purchase and Sale — Palm Development Site Copy of Parking Lease Copy of recorded Grant Deed FOR BUYER ACCOUNT: YOUR FINAL CLOSING STATEMENT Grant Deed FIRPTA and 593C forms Closing Certificate First Amendment to Agreement of Purchase and Sale — Palm Development Site Parking Lease And when you can issue your ALTA Extended Owner's Policy — 2006 of title insurance with a liability of $30,000,000. IN THE FORM OF THE OWNERS PROFORMA POLICY ATTACHED HERETO DOCUMENTS TO BE RECORDED AT CLOSE IN THE FOLLOWING ORDER: 1. Grant Deed 2. Memorandum of TIC; First American Title Insurance Escrow No. 692048 January 21, 2016 Page 3 3. Quitclaim (re; Easement); 4. R EA; 5. Deed of Trust; 6. Assignment of Rents and Leases; 7. UCC; ANY REFUND OF EXCESS FUNDS DUE BUYER SHALL BE DISBURSED TO HOTEL SLO, LLC ONLY PER WIRING INSTRUCTIONS HANDED YOU VIA E -MAIL FROM LIMA CONOCONO 1/19/16 9.45A.M. ALL MATTERS PERTAINING TO CALIFORNIA NATURAL HAZARD DISCLOSURE REQUIREMENTS HANDLED OUTSIDE OF ESCROW. No rents or taxes to be prorated. Taxes are currently not assessed to the property since it is City owned. Utilities and rent payable under the Lease for 955 Morro Street shall be prorated by the parties outside of escrow. There shall be no transfer of tenant security deposits between buyer and seller through escrow. This property IS NOT subject to any association dues and /or assessments. The parties to this escrow acknowledge that they have deposited that certain Agreement of Purchase and Sale — Palm Development Site, dated as of December 19; 2011, as amended by that certain First Amendment, dated as of January 19, 2016 (collectively, the "Purchase Agreement ") into this escrow which contains, among other things, items which do not relate to this escrow. Escrow is not to be concerned with any items contained in the Purchase Agreement and shall act only pursuant to the provisions set forth in these escrow instructions. You shall date any documents handed you undated as of the close of escrow, unless specifically instructed otherwise. You shall fill in the blank date for the Deed of Trust (on page 2, Paragraph 1 (c) of the Grant Deed) as of the close of escrow. THE GENERAL PROVISIONS attached hereto are fully incorporated herein by reference, have been read and are hereby approved by the undersigned. THESE INSTRUCTIONS are effective until the "time limit date" of January 26, 2016, unless revoked by written demand and authorization satisfactory to you. If no demand for cancellation is made, you will proceed to close this escrow when the principals have complied with the escrow instructions. AT CLOSE OF ESCROW you are to disburse funds for the account of the undersigned in accordance with the settlement sheet attached to these instructions. ALL DOCUMENTS, funds and statements due the undersigned are to be mailed to the address shown below; provided, funds due to Seller shall be wired for Seller's benefit in accordance with wiring instructions provided to you. First American Title Insurance Escrow No. 692048 January 21, 2016 Page 4 FIRST AMERICAN TITLE INSURANCE COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUT14ORITY NO. 251 ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE, Buyer: HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager By:_ Mark Seiler, Manager By: Piazza Hotel Management, LLC, a California limited liability company, its Manager Paolo Patrone,mManager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, LLC, a California limited liability company, its Manager By: Louis Lipset, Manager Seller: City of San Luis Obispo, a municipal corporation and a chartered city organized and existing under the Constitution of the Late of California B y: rk1f, A 4) - ... - Katie i.iclttig., ity M ;" 'ger ApproveOls to form nn lc , I effect: By #16��/fnpbussell, Interim Assistant City Attorney First American Title Insurance Escrow No. 692048 January 2I, 2016 Page 4 FIRST AMERICAN TITLE INSURANCE COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY NO. 251 ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. Saver: HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability coms�ge� By: Mark Seiler, Manager By: Piazza Hotel Management, LLC, a California limited liability company, its Manager By: Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, LLC, a California limited liability company, its Manager LZA Louis Lipset, Manager Seller: City of San Luis Obispo, a municipal corporation and a chartered city organized and existing under the Constitution ofthe State of California I By: Katie Lichtig, City Manager Approved as to form and legal effect: IN Anne Russell, Interim Assistant City Attorney First American Title insurance Escrow No. 692048 January 2 ] 2016 Page 4 FIRST AMERICAN TITLE INSURANCE COMPANY :CONDUCTS ESCROW.BUSINESS UNDER CERTIFICATE OF AUTHORITY NO. 251 ISSUED BY THE STATE OF :CALIFORNIA DEPARTMENT OF INSURANCE. u er: HOTEL SLO, LLC, a California iimitcd liability company By: Metrovation, LLC, a Califomia limited ,, .:..:;: • ::;: liability company, its Manager By: 12ark Seiler, Manager By: Piazza Hotcl Management, LLC, a California limited liability company, its ` Manager By: Paolo Patrone, Manager SUTTER TUSTIN SLO, LLC, a .California limited liability company By: Sutter Tustin, LLC, a California limited 1iabilit' cpmpany, its anager By: -Louis Lipset, Manager Selle City of San. Luis Obispo, a municipal corporation „ and a chartered city organized and existing under, the Constitution of the State of California By: , Katie Lichtig, City Manager :. • • t Approved as to form and legal effect: By: Anne Russell, Interim Assistant City Attorney First American Title Insurance Escrow No: 692048 January 21; 2016 Page 4 I FIRST AMERICAN TITLE INSURANCE COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY NO. 251 ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. Buyer: h HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager Bv: Mark 7I-Ioett' r, Manage r By: Pia77a Mana ement, LLC a rr g C.%Illifornia limited liability company, its ivfln`ager By: / Paolo Patrone, Manager 1 SUTTER TUSTIN SLO, LLC, a California.limited liability company By: Sutter Tustin, LLC, a California limited liability company, its Manager By: Louis Lipset, Manager Seller; I City of San Luis Obispo, a municipal corporation and a chartered city organized and existing under the Constitution of the State of California r r By: r Katie Lichtig, City Manager Approved as to form and legal effect: f r By: _ Anne Russell, interim Assistant City Attorney 4 Escrow General Provisions- REVISED JULY 22, 2014 Receipt of these provisions deems acceptance of the terms. Please read for general information about the escrow process. 1. SPECIAL DISCLOSURES: A. DEPOSIT OF FUNDS & DISBURSEMENTS Unless directed in writing to establish a separate, interest - bearing account together with all necessary taxpayer reporting information, all funds shall be deposited in general escrow accounts in a federally Insured financial institution including those affiliated with Escrow Holder ( "depositories'). All disbursements shall be made by Escrow Holder's check or by wire transfer unless otherwise instructed in writing. The Good Funds Law (California Insurance Code 12413.1) mandates that Escrow Holder may not disburse funds until the funds are, in fact, available in Escrow Holder's account. Wire transfers are immediately disbursable upon confirmation of receipt. Funds deposited by a cashier's or certified check are generally available on the next banking day following deposit. Funds deposited by a personal check and other types of instruments may not be available until confirmation from Escrow Holder's bank which can vary from 2 to 10 days. B. DISCLOSURE OF POSSIBLE BENEFITS TO ESCROW HOLDER As a result of Escrow Holder maintaining its general escrow accounts with the depositories, Escrow Holder may receive certain financial benefits such as an array of bank services, accommodations, loans or other business transactions from the depositories ( "collateral benefits'. All collateral benefits shall accrue to the sole benefit of Escrow Holder and Escrow Holder shall have no obligation to account to the parties to this escrow for the value of any such collateral benefits. C. MISCELLANEOUS FEES Escrow Holder may incur certain additional costs on behalf of the parties for services performed, or fees charged, by third parties. The fees charged by Escrow Holder for services Including, but not limited to, wire transfers, overnight delivery/courier services, etc. may include a mark up over the direct cost of such services to reflect the averaging of direct, administrative and overhead charges of Escrow Holder for such services which shall, In no event, exceed $10 for each markup. D. METHOD TO DELIVER PAYOFF TO LENDERS /LIENHOLDERS To minimize the amount of interest due on any existing loan or lien, Escrow Holder will deliver the payoff funds to the lender /lienholder as soon as Escrow Holder is able after confirmation of recordation /close of escrow and as demanded by the lender /lienholder using (a) personal delivery, (b) wire transfer, or (c) overnight delivery service, unless otherwise directed in writing by the affected party. Certain payments such as home equity line of credit payoffs ( "HELOCS'� may require additional time to process. 2. "CLOSE OF ESCROW" / PRORATION S & ADJUSTMENTS The term "close of escrow" means the date on which documents are recorded. All prorations and /or adjustments shall be made to the close of escrow based on the number of actual days, unless otherwise instructed in writing. 3. CONTINGENCY PERIODS Escrow Holder shall not be responsible for monitoring contingency time periods between the parties. The parties shall execute such documents as may be requested by Escrow Holder to confirm the status of any such periods. 4. REPORTS a. Preliminary Report - Escrow Holder has neither responsibility nor liability for any title search that may be performed in connection with the issuance of a preliminary report. b. Other Reports -As an accommodation, Escrow Holder may agree to transmit orders for inspection, termite, disclosure and other reports if requested, in writing or orally, by the parties or their agents. Escrow Holder shall deliver copies of any such reports as directed. Escrow Holder is not responsible for reviewing such reports or advising the parties of the content of same. 5. INFORMATION FROM AFFILIATED COMPANIES Escrow Holder may provide the parties' information to and from its affiliates in connection with the offering of products and services from these affiliates. THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. p 2014 First American Title Insurance Company and/or its affiliates. Page 1 of 4 All rights reserved. ♦ NYSE: FAF # 1 • .. 1 �, sr 6. RECORDATION OF DOCUMENTS Escrow Holder is authorized to record documents delivered through escrow which are necessary or proper for the issuance of the requested title insurance policy(ies). Buyer will provide a completed Preliminary Change of Ownership Report form ( "PCOR'). If Buyer fails to provide the PCOR, Escrow Holder shall close escrow and charge Buyer any additional fee incurred for recording the documents without the PCOR. Escrow Holder Is released from any liability in connection with same. 7. PERSONAL PROPERTY TAXES No examination, UCC search, insurance as to personal property and /or the payment of personal property taxes is required unless otherwise instructed in writing. 8. REAL PROPERTY TAXES Real property taxes are prorated based on the most current available tax statement from the tax collector's office, Supplemental taxes may be assessed as a result of a change in ownership or completion of construction. Adjustments due either party based on the actual new tax bill issued after close of escrow or a supplemental tax bill will be made by the parties outside of escrow and Escrow Holder is released of any liability in connection with such adjustments. The first installment of California real property taxes is due November 1st (delinquent December 10th) and the second installment is due February 1st (delinquent April 10th). If a tax bill Is not received from the County at least 30 days prior to the due date, buyer should contact the County Tax Collector's office and request one, Escrow Holder is not responsible for same. 9. CANCELLATION OF ESCROW a, Any party desiring to cancel this escrow shall deliver written notice of cancellation to Escrow Holder. Within a reasonable time after receipt of such notice, Escrow Holder shall send by regular mail to the address on the escrow instructions, one copy of said notice to the other party(ies). Unless written objection to cancellation is delivered to Escrow Holder by a party within 10 days after date of mailing, Escrow Holder is authorized, at its option, to comply with the notice and terminate the escrow. If a written objection is received by Escrow Holder, Escrow Holder is authorized, at its option, to hold all funds and documents in escrow (subject to the Funds Held in Escrow fee) and to take no other action until otherwise directed by either the parties' mutual written instructions or a final order of a court of competent jurisdiction. If no action is taken on this escrow within 6 months after the closing date specified in the escrow instructions, Escrow Holder's obligations shall, at its option, terminate. Upon termination of this escrow, the parties shall pay all fees, charges and reimbursements due to Escrow Holder and all documents and remaining funds held in escrow shall be returned to the parties depositing same. b. Notwithstanding the foregoing; upon receipt of notice of cancellation by a seller in a transaction subject to the Home Equity Sales Contract law (CC §1695 et seq.), Escrow Holder shall have the right to unilaterally cancel the escrow and may return all documents and funds without consent by or notice to the buyer. 10. CONFLICTING INSTRUCTIONS & DISPUTES If Escrow Holder becomes aware of any conflicting demands or claims concerning this escrow, Escrow Holder shall have the right to discontinue all further acts on Escrow Holder's part until the conflict is resolved to Escrow Holder's satisfaction. Escrow Holder has the right at its option to file an action in interpleader requiring the parties to litigate their claims /rights. If such an action is filed, the parties jointly and severally agree (a) to pay Escrow Holder's cancellation charges, costs (including the Funds Held in Escrow fee) and reasonable attorneys' fees, and (b) that Escrow Holder is fully released and discharged from all further obligations under the escrow. If an action is brought involving this escrow and /or Escrow Holder, the party(ies) involved in the action agree to indemnify and hold the Escrow Holder harmless against liabilities, damages and costs incurred by Escrow Holder (including reasonable attorneys' fees and costs) except to the extent that such liabilities, damages and costs were caused by the negligence or willful misconduct of Escrow Holder, 11. FUNDS HELD IN ESCROW When funds remain in escrow over 90 days after either close of escrow or estimated close of escrow, a monthly holding fee of $25 shall be imposed by Escrow Holder that Is to be charged against the funds held. 12. USURY Escrow Holder is not to be concerned with usury as to any loans or encumbrances in this escrow and is hereby released of any responsibility and /or liability therefore. THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY [$SUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. p 2014 First American Title Insurance Company and /or Its affiliates. Page 2 of 4 All rights reserved. ♦ NYSE: FAF 13. AMENDMENTS TO ESCROW INSTRUCTIONS Any amendment to the escrow instructions must be in writing, executed by all parties and accepted by Escrow Holder. Escrow Holder may, at its sole option, elect to accept and act upon oral instructions from the parties. If requested by Escrow Holder the parties agree to confirm said instructions in writing as soon as practicable. The escrow instructions as amended shall constitute the entire escrow agreement between the Escrow Holder and the parties hereto with respect to the subject matter of the escrow. 14. FIRE, HAZARD OR LIABILITY INSURANCE POLICIES In all matters relating to fire, hazard or liability insurance, Escrow Holder may assume that each policy is in force and that the necessary premium has been paid. Escrow Holder is not responsible for obtaining fire, hazard or liability insurance, unless Escrow Holder has received specific written instructions to obtain such insurance prior to close of escrow from the parties or their respective lenders. 15. COPIES OF DOCUMENTS; ELECTRONIC SIGNATURES; AUTHORIZATION TO RELEASE Escrow Holder is authorized to rely upon copies of documents, which include facsimile, electronic, NCR, or photocopies as if they were an originally executed document. Escrow Holder may agree to accept electronically signed documents from a platform or program approved by Escrow Holder. If requested by Escrow Holder, the originals of such documents and /or original signatures shall be delivered to Escrow Holder. Escrow Holder may withhold documents and /or funds due to the party until such originals are delivered. Documents to be recorded MUST contain original signatures. Escrow Holder may furnish copies of any and all documents to the lender(s), real estate broker(s), attorney(s) and /or accountant(s) involved in this transaction upon their request. Delivery of documents by escrow to a real estate broker or agent who is so designated in the purchase agreement shall be deemed delivery to the principal. 16. EXECUTION IN COUNTERPART The escrow instructions and any amendments may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute the same instruction. 17. TAX REPORTING, WITHHOLDING & DISCLOSURE The parties are advised to seek independent advice concerning the tax consequences of this transaction, including but not limited to, their withholding, reporting and disclosure obligations. Escrow Holder does not provide tax or legal advice and the parties agree to hold Escrow Holder harmless.from any loss or damage that the parties may incur as a result of their failure to comply with federal and /or state tax laws. WITHHOLDING OBLIGATIONSARE THE EXCLUSIVE OBLIGA 77ONS OF THE PARTIES. ESCROW HOLDER IS NOT RESPONSIBLE TO PERFORM THESE OBLIGATIONS UNLESS ESCROW HOLDER AGREES IN WRITING. A. TAXPAYER IDENTIFICATION NUMBER REPORTING Federal law requires Escrow Holder to report seller's social security number or tax identification number (both numbers are hereafter referred to as the "TIN "), forwarding address, and the gross sales price to the Internal Revenue Service ( "IRS's. To comply with the USA PATRIOT Act, certain taxpayer Identification information (including, but not limited to, the TIN) may be required by Escrow Holder from certain persons or entities involved (directly or indirectly) in the transaction prior to closing. Escrow cannot be closed nor any documents recorded until the information is provided and certified as to its accuracy to Escrow Holder. The parties agree to promptly obtain and provide such information as requested by Escrow Holder. B. STATE WITHHOLDING & REPORTING In accordance with Section 18662 of the Revenue and Taxation Code (R &TC), a buyer may be required to withhold an amount equal to 3 1/3% (.0333) of the sale price, or an optional gain on sale withholding amount certified by the seller in the case of a disposition of California real property interest by either; 1. A seller who is an individual, trust, estate, or when the disbursement instructions authorize the proceeds to be sent to a financial intermediary of the sellers. 2. A corporate seller that has no permanent place of business in California immediately after the transfer of title to the California property. THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. © 2014 First American Title Insurance company and /or its affiliates, Page 3 of 4 All rights reserved. • NYSE: FAF The buyer may become subject to penalty for failure to withhold an amount equal to the greater of 10 percent of the amount required to be withheld or five hundred dollars ($500). However, notwithstanding any other provision included in the California statutes referenced above, no buyer will be required to withhold any amount or be subject to penalty for failure to withhold if any of the following applies: 1. The sale price of the California real property conveyed does not exceed one hundred thousand dollars ($100,000). 2. The seller executes a written certificate under the penalty of perjury certifying that the seller is a corporation with a permanent place of business in California. 3. The seller, who is an individual, trust, estate, or a corporation without a permanent place of business In California, executes a written certificate under the penalty of perjury of any of the following: a. The California real property being conveyed is the seller's or decedent's principal residence (within the meaning of Section 121 of the Internal Revenue Code (IRC)). b. The last use of the property being conveyed was by the transferor as the transferor's principal residence (within the meaning of IRC Section 121). c. The California real property being conveyed is, or will be, exchanged for property of like kind (within the meaning of IRC Section 1031), but only to the extent of the amount of gain not required to be recognized for California income tax purposes under IRC Section 1031. d. The California real property has been compulsorily or Involuntarily converted (within the meaning of IRC Section 1033) and the seller intends to acquire property similar or related in service or use so as to be eligible for nonrecognition of gain for California Income tax purposes under IRC Section 1033. e. The California real property transaction will result in a loss or net gain not required to be recognized for California income tax purposes. The seller is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding requirement. Contact FTB: For additional information regarding California withholding or for the Alternative Withholding, contact the Franchise Tax Board at (toll free) 888 - 792 - 4900), by e-mail WSCS.GEN @ftb.ca.gov; or visit their website at www,ftb.ca.gov. C. FEDERAL WITHHOLDING & REPORTING Certain federal reporting and withholding requirements exist for real estate transactions where the seller (transferor) is a non - resident alien, a non - domestic corporation, partnership, or limited liability company; or a domestic corporation, partnership or limited liability company controlled by non - residents; or non - resident corporations, partnerships or limited liability companies. D. TAXPAYER IDENTIFICATION DISCLOSURE Federal and state laws require that certain forms include a party's TIN and that such forms or copies of the forms be provided to the other party and to the applicable governmental authorities. Parties to a real estate transaction involving seller - provided financing are required to furnish, disclose, and include the other party's TIN in their tax returns. Escrow Holder is authorized to release a party's TINS and copies of statutory forms to the other party and to the applicable governmental authorities in the foregoing circumstances. The parties agree to hold Escrow Holder harmless against any fees, costs, or judgments incurred and /or awarded because of the release of their TIN as authorized herein. THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE. (g) 2014 Flrst American Title Insurance Company and /or Its affiliates. Page 9 of 4 All rights reserved. V NYSE: FAF Form No, 1402.06 Policy Page s ALTA Owner's Policy (6- 17 -06) Policy Number: 692048 1100302PO50600 OWNER'S POLICY OF TITLE INSURANCE ISSUED BY First American Title Insurance Company Any notice of claim and any other notice or statement In writing required to be given to the Company under this policy must be given to the Cornpany at the address shown In Section 16 of the Conditions. COVERED RISKS SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS, FIRST AMERICAN TTTLE INSURANCE COMPANY, a Nebraska corporation (the "Company) Insures, as of Date of Policy and, to the extent staters in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of; 1, Title being vested other than as stated In Schedule A. 2. Any defect In or lien or encumbrance on the Title, This Covered Risk Includes but Is not limited to insurance against loss from (a) A defect in the Title caused by (1) forgery, fraud, undue Influence, duress, Incompetency, Incapacity, or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (Ili) a document affecting Tide not properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered; (Iv) failure to perform those acts necessary to create a document by electronic means authorized by law; (v) a document executed under a falsified, expired, or otherwise Invalid power of attorney; (vi) a document not properly filed, recorded, or indexed In the Public Records including failure to perform those acts by electronic means authorized by law; or (vii) a defective judicial or administrative proceeding. (b) the lien of real Mate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.. (c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land, The term "encroachment" includes encroachments of existing Improvements located on the Land onto adjoining sand, and encroachments onto the Land of existing improvements located an adjoining land. 3. Unmarketable Title. a. No right of ac:ess to and from the Land. S. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (a) the occupancy, use, or enjoyment of the land; (b) the character, dimensions, or location of any Improvement erected on the Land; (c) the subdivision of land; or (d) environmental protection if a notice, describing any part of the Land, is recorded In the Public Records setting forth the violation or Intention to enforce, but only to the extent of the violation or enforcement referred to in that notice, i, An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5 If a notice of the enforcement action, describing any part of the land, is recorded In the Public Records, but only to the extent of the enforcement referred to In that notice. 7. The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, Is recorded in the Public Records. 8. Any taking by a governmental body that has occurred and is binding on the rights of a Purchaser for value without Knowledge. 9. Title being vested other than as stated In Schedule A or being defective (a) as a result of the avoldance In whose or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of the the to or any Interest in the Land occurring prior to the transaction vesting Title as shown in Schedule A because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state Insolvency, or similar creditors' rights laws; or (b) because the Instrument of transfer vesting Title as shown In Schedule A constitutes a preferential transfer under federal bankruptcy, state insolvency, or similar creditors' rights laws by reason of the failure of Its recording In the Public Records (1) to be timely, or (II) to Impart notice of Its existence to a purchaser for value or to a judgment or lien creditor. 10. Any defect In or lien or encumbrance on the Title or other matter Included in Covered Risks 1 through 9 that has been created or attached or has been filed or recorded In the Public Records subsequent to Date of Policy and prior to the recording of the deed or other Instrument of transfer in the Public Records that vests Title as shown In Schedule A, The Company will also pay the costs, attorneys' fees, and expenses Incurred in defense of any matter insured against by this policy, but only to the extent provided in the Conditions. First American Title Insurance Company Rennes J Gihcmin Yresldenr Jeryroy S Robimon Secrotary Farm No. 1902,06 ALTA Owner's Policy (6- 17 -06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' Fees, or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to (i) the occupancy, use, or enjoyment of the land; (it) the character, dimensions, or location of any Improvement erected on the Land; (iii) the subdivision of land; or IN) environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations, This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk S. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain, This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters (a) created, suffered, assumed, or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting In no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risks 9 and 10); or (e) resulting in loss or damage that would not have been sustained If the Insured Claimant had paid value for the Title. 9, Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A, is (a) a fraudulent conveyance or fraudulent transfer; or (b) a preFerentlal transfer for any reason not stated In Covered Risk 9 of this policy. S. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other Instrument of transfer in the Public Records that vests Title as shown in Schedule A. CONDITIONS 1. DEFINITION OF TERMS The following terms when used in this policy mean: (a) "Amount of Insurance" The amount stated In Schedule A, as may be increased or decreased by endorsement to this policy, Increased by Section B(b), or decreased by Sections 10 and tt of these Conditions. (b) "Date of Policy The date designated as "Date of Policy" In Schedule A. (c) "Entity A corporation, partnership, trust, limited liability company, or other similar legal entity. (d) 'Insured ": The Insured named In Schedule A. (i) The term "Insured" also Includes (A) successors to the Title of the Insured by operation of law as distinguished from purchase, Inducing heirs, devisees, survivors, personal representatives, or next of kin; (8) successors to an Insured by dissolution, merger, consolidation, distribution, or reorganization; (C) successors to an Insured by Its conversion to another kind of Entity; (D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Tide (1) if the stock, shares, memberships, or other equity Interests of the grantee are wholly -owned by the named Insured, (2) if the grantee wholly owns the named Insured, (3) if the grantee is wholly -owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly -owned by the same person or Entity, or (4) if the grantee Is a trustee or beneficiary of a trust created by a written Instrument established by the Insured named In Schedule A for estate planning purposes. paltry Cage 2 Polley Number; 692048 (ii) with regard to (A), (B), (C), and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured. (e) "Insured Claimant An Insured claiming loss or damage. (f) "Knowledge" or "Known ": Actual knowledge, not constructive knowledge or notice that may be Imputed to an Insured by reason of the Public Records or any other records that Impart constructive notice of matters affecting the Tltle. (g) "Land ": The land described In Schedule A, and affixed Improvements that by law constitute real property. The term "Land" does not Include any property beyond the lines of the area described In Schedule A, nor any right, Ode, Interest, estate, or easement in abutting streets, roads, avenues, alleys, lanes, ways, or waterways, but this does not modify or limit the extent that a right of access to and from the Land is insured by this policy. (h) "Mortgage ": Mortgage, deed of trust, trust deed, or other security instrument, including one evidenced by electronic means authorized by law. (1) "Public Records Records established under state statutes at Date of Policy for the purpose of Imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge. With respect to Covered Risk 5(d), "Public Records" shall also include environmental protection liens filed in the records of the clerk of the United States District Court for Lhe district where the Land Is located. (j) "Title The estate or interest described In Schedule A. (k) "Unmarketable Title "; Title affected by an alleged or apparent matter that would permit a prospective purchaser or lessee of the Title or lender on the Title to be released from the obligation to purchase, lease, or lend if there Is a contractual condition requiring the delivery of marketable title. 2. CONTINUATION OF INSURANCE The coverage of this policy shall continue In force as of Date of Policy in favor of an Insured, but Only so long as the Insured retains a estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties In any transfer or conveyance of the Title. This polity shall not continue In force in favor of any purchaser from the Insured of elther (1) an estate or Interest In the Land, or (ii) an obligation secured by a purchase money Mortgage given to the Insured. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT The Ensured shall notify the Company promptly in writing (1) In case of any litigation as set forth in Section S(a) of these Conditions, (II) In case Knowledge shall come to an Insured hereunder of any claim of title or Interest that Is adverse to the Tide, as Insured, and that might cause loss cr damage for which the Company may be liable by virtue of this policy, Or (iii) If the Title, as Insured, is rejected as Unmarketable Title. If the Company is prejudiced by the rallure of the Insured Claimant to provide prompt notice, the Company's liability to the Insured Claimant under the policy shall be reduced to the extent cf the prejudice. 4. PROOF OF LOSS In the event the Company Is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of payment that the Insured Claimant furnish a signed proof of loss. The proof of loss must describe the defect, lien, encumbrance, or other matter Insured against by this policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. DEFENSE AND PROSECUTION OF ACTIONS (a) Upon written request by the Insured, and subject to the options contained in Section 7 of these Conditions, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an Insured in litigation In which any third party asserts a claim covered by this policy adverse to the Insured. This obligation Is limited to only those stated causes of action alleging matters Insured against by this policy, The Company shall have the right to select counsel of Its choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those stated causes or action. It shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs, or expenses Incurred by the Insured In the defense of those causes of action that allege matters not Insured against by this policy, (b) The Company shall have the right, In addition to the options contained in First American Title Insurance Company, Form No. 1402.06 ALTA Owner's Polity (6 -17 -06) Section 7 of these Conditions, at Its own cost, to Institute and prosecute any action or proceeding or to do any other act that In Its opinion may be necessary or desirable to establish the Tide, as Insured, or to prevent or reduce loss or damage to the Insured. The Company may take any appropriate action under the terms of this policy, whether or not It shall be liable to the insured. The exercise of these rights shall not be an admission of liability or waiver of any provision of this polity. If the Company exercises its rights under this subsection, It must do so diligently. (c) Whenever the Company brings an action or asserts a defense as required or permitted by this policy, the Company may pursue the lidgatlon to a Anal determination by a court of competent jurisdiction, and it expressly reserves the right, in its sole discretion, to appeal any adverse judgment or order. DUTY OF INSURED CLAIMANT TO COOPERATE (a) in all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding and any appeals, the Insured shall secure to the COmpasry the right to so prosecute or provide defense In the action or proceeding, Including the right to use, at Its option, the name of the Insured for this purpose. Whenever requested by the Company, the Insured, at the Company's expense, shall give the Company all reasonable aid (1) In securing evidence, obtainirg witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (ll) In any other lawful art that in the opinion of the Company may be necessary or desirable to establish the Titte or any other matter as Insured. If the Company Is prejudiced by the fallum of the Insured to furnish the required Cooperation, the Company's obligations to the Insured under the policy shall terminate, Induding any IIatN icy or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation. (b) The Company may reasonably require the Insured Claimant to submit to examination under oath by any authonzed representative of the Company and to produce for examination, inspection, and copying, at such reasonable times and places as may be designated by the authorized representative of the Company, all records, in whatever medium maintained, Inc uding books, ledgers, checks, memoranda, correspondence, reports, e- mails, disks, tapes, and videos whether bearing a date be`ore or after Date of Policy, that reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the Insured Claimant shall grant Its permission, In writing, for any authorised representative of the Company to examine, inspect, and copy all of these records in the Custody or control of a third party that teasonaby Pertain to the Ions or damage. Ail Information designated as confidential by the insured Claimant provided to the Company oirsuant to this SC 101) Shall not be disclosed to others unless, In the reasonable judgment of the Company, It Is necessary In the administration of the claim. Failure of the Insured Claimant to submit for examination under oath, produce any reasonably requested Information, or grant permission to secure reasonably necessary Information from third parties as required In this subsection, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim, OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY In case of a claim under this policy, the Company shall have the following additional options; (a) To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys' fees, and expenses incurred by the insured Claimant that were authorized by the Company up to the time of payment or tender or payment. and that the Company Is obligated to pay. Upon tine exercise: by the Company of this option, all liahiilty and obligations of the Company to the insured under this policy, other than to make the payment required in this subsection, shall terminate, Including any liability or obligation to defend, prosecute, or continue any litigation, (b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant, (1) To pay or otherwise settle with other parries for or in the name of an Insured Claimant any claim Insured against under this policy. In addition, the Ccmgony will pay any casts, attorneys' fees, and expenses Incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to flay, or (ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, Policy Page 3 Policy Number: 692048 attorneys' fees, and expenses Incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay, Upon the exercise by the Company of either of the options provided for in subsections (b)(1) or (II), the Company's obligations to the Ensured under this policy for the clalmed loss or damage, other than the payments required to be made, shall terminate, Including any liability or obligation to defend, prosecute, or Continue any litigation. S. DETERMINATION AND EXTENT OF LIABILITY This pulicy fs a contract or Indemnity against actual nnonetary loss or damage sustained or Incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against W ttll�. ppllcy. (a) The extent or liability of the Company for loss or damage under this policy shall not exceed the lesser of (i) the Amount of Insurance; or (11) the difference between the value of the Title as Insured and the value of the Tide subject to the risk insured against by this policy. (b) If the Company pursues Its rights under Section 5 of these Conditions and is unsuccessful In estabtlshing the Title, as insured, (t) the Amount of insurance shall be Increased by 10°%, and (II) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant or as of the date It Is settled and paid. (c) In addition to the extent of liability under (a) and (b), the Company will also pay those costs, attorneys' fees, and expenses incurred In accordance with Sections 5 and 7 of these Conditions. 9, LIMITATION OF LIABILITY (a) If the Company establishes the Title, or removes the alleged defect lien, or encumbrance, or cues the lack of a right of access to or from the Land, or cures the claim of Unmarketable Tide, all as insured, in a reasonably diligent manner by any method, Including litigation and the completion of any appeals, It shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the insured. (b) In the event of any litigation, Including litigation by the Company or vrlth the Company's Consent, the Company shall have no ifablllty for lass or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals, adverse to the Tide, as insured. (c) The Company shall not be liable for lass or damage to the Ensured for nobility voluntarily assumed by the Insured in settling any claim or suit Without the prior written Consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY All payments under this policy, except payments made for casts, attorneys' fees, and expenses, shall reduce the Amount of Insurance by the arnaunt 0 the payment. 11. LIABILITY NONCUMULATIVE The Amount of Insurance shall be reduced by any amount the Company pays under any polity insuring a Mortgage to which exception Is taken In Schedule B or to which the Insured has agreed, assumed, or taken subject, or which Is executed by an Insured after Date of Policy and which is a charge or lien on the Tide, and the amount so paid shall be deemed a payment to the Insured under this policy. 12. PAYMENT OF LOSS When liability and the extent of loss or damage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days. 13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT (a) Whenever the Company shall have settled and paid a claim under this polity, It shall be subrogated and entitled to the rights of the Insured Claimant in the Title and all other rights and remedies in respect to the Claim that the Insured Claimant has against any person or property, to the extent of the amount of any loss, costs, attorneys` fees, and expenses paid by the Company. If requested by t?te Company, the Insured Ualmant shall execute documents to evidence the transfer to the Company of these rights and remedies. The Ensured CI8lmant shall parniit the Company to sue, compromise, or settle In the name of the Ensured Claimant and to use the name of the Insured Claimant in any transaction or litigation Involving these rights and remedies. If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of Its right to recover until after the Insured Claimant shall have recovered its loss. First American Tide Insurance Company Form No. 1402.06 ALTA Owner's P011cy (6.17 -06) (b) The Company's right of subrogation includes the rights of the Insured to indemnities, guaranties, other policies of Insurance, or bonds, notwithstanding any terms or conditions contained in those Instruments that address subrogation rights, 14. ARBITRATION Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Title Association ( "Rules'l, Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons. A-bitrable matters may Include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service In connection with its Issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy. All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s) may be entered In any court of competent junsdiction, 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT (a) This policy together with all endorsements, If any, attached to It by the Company is the entire policy and contract between the Insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage that arises out of the status of the Title or by any action asserting such claim shall be restricted to this policy. (c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule A of this policy. f -*, P911cy page 4 f\,• I f Policy Nurnbc,: 692048 (d) Each endorsement to this policy Issued at any time is made a part of this policy and Is subject to all of Its terms and provisions, Except as the endorsement expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsement, (Ili) extend the Date of Policy, or (Iv) Increase the Amount of Insurance, 16. SEYERABILITY In the event any provision of this polity, In whole or In part, Is held Invalid or unenforceable under applicable law, the policy shall be deemed not to Include that provision or such part held to be invalid, but all other provisions shall remain In full force and effect. 17. CHOICE OF LAW; FORUM (a) Choice of Law: The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged therefore in reliance upon the law affecting Interests in real property and applicable to the Interpretation, rights, remedies, or enforcement of policies of title insurance or the Jurisdiction where the Land is located. Therefore, the court or an arbitrator shall apply the law of the jurisdiction where the Land is located to determine the validity of claims against the Title that are adverse to the Insured and to interpret and enforce the terms of this policy, In neither case shall the court or arbitrator apply Its conflicts or law principles to determine the applicable law. (b) Choice of Forum: Any litigation or other proceeding brought by the Insured against the Company must be filed only in a state or federal court within the United States of America or Its territories having appropriate Jurisdiction. 18. NOTICES, WHERE SENT Any notice of claim and any other notice or statement In writing required to be given to the Company under this policy must be given to the Company at 1 First American Way, Santa Ana, CA 92707, Attn: Claims Department. POLICY OF TITLE INSURANCE S T A M Ej? I a 1W l 7� W'. + First American Title Insurance Company Form N6+1402106 ,a; ALTA 6wners Poky SCHEDULE A First American Title Insurance Company Name and Address of the issuing Title Insurance Company: First American Title Insurance Company 1850 Mt, Diablo Blvd., Suite 300 Walnut Creek, CA 94596 -, - Pa41cy page-5 I . . rI Policy N6rrikr: 02448 File No.: NCS- 692048 -CC Policy No.: PRO -FORMA (1/20/16 at 4:15 p.m.) Address Reference: 861 -863 and 877 Palm Street and 955 Morro Street, San Luis Obispo, CA Amount of Insurance: $30,000,000.00 Premium: $ Date of Policy: Date and time of recording 1. Name of Insured: Hotel SLO, LLC, a California limited liability company, as to a 79.2% undivided interest, and Sutter Tustin SLO, LLC, a California limited liability company, as to a 20.8% undivided interest, as tenants- in-common 2. The estate or Interest in the Land that Is insured by this policy is: A Fee as to Parcels One through Seven; an easement as to Parcel Eight 3. Title is vested in; Hotel SLO, LLC, a California limited liability company, as to a 79.2% undivided Interest, and Sutter Tustin SLO, LLC, a California limited liability company, as to a 20.8% undivided Interest, as tenants -In- common 4. The Land referred to in this policy is described as follows: Real property In the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 540 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 35° 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 35° 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 330 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 360 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 530 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 12.75 FEET TO A POINT; THENCE NORTH 500 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 54° 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 350 . ; I r .��. ' , f First American Title Insurance Company Form No. 1402.06 ALTA Owner's Policy (6- 17.06) Policy Page 6 Policy Number; 692048 54' EAST, 146,00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 54° 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS, PARCEL TWO; THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 540 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 541 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 331 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N, E, CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 530 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 360 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 53° 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38,08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23' 50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 530 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 330 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 53° 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. First American TRIe insurance Company Form No. 1402.U6 ALTA Owner's Policy (6.17.06) PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: l' R , Policy P$ge 7' 0011Cy NUrthber: 692048 LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS, PARCEL SEVEN: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 530 38' EAST, 143,33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53° 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING, EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET, PARCEL EIGHT. NON - EXCLUSIVE EASEMENTS OVER WALKWAYS CREATED AS AN APPURTENANCE TO PARCELS ONE THROUGH SEVEN ABOVE IN THE "RECIPROCAL EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS" EXECUTED BY JCC MISSION, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL, RECORDED , 2016 AS INSTRUMENT N0, OF OFFICIAL RECORDS. APN(S): 002 -416 -031 (PARCEL SEVEN), 002- 416 -035 (PARCELS ONE AND TWO) AND 002 -416- 038 (PARCELS THREE, FOUR AND SIX) NOTICE: This is a pro -forma policy furnished to or on behalf of the party to be insured. It neither reflects the present status of title, nor is it intended to be a commitment to insure. The inclusion of endorsements as part of the pro -forma policy in no way evidences the willingness of the Company to provide any affirmative coverage shown therein. There are requirements which must be met before a final policy can be Issued in the same form as this pro-forma policy. A commitment to insure setting forth these requirements should be obtained from the Company. First American Ttle Insurance Company Fofm N0, 4401;06. , , ALTA owner's P61fcy (6- 1706) File No,; NCS- 692048 -CC SCHEDULE B Policy No.: 692048 EXCEPTIONS FROM COVERA E iRollcy Page 8. Policy Number; 40048 This Policy does not insure against loss or damage, and the Company will not pay costs, attorneys' fees, or expenses that arise by reason of: 1. General and special taxes and assessments for the fiscal year 2016 -2017, a lien not yet due or payable, 2, General and special taxes and assessments for the fiscal year 2015 -2016, a lien not yet due or payable. 3. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3,5 commencing with Section 75 of the California Revenue and Taxation Code. 4. An easement for fire escape and Incidental purposes, recorded April 23, 1959 in Book 995 of Deeds, Page 481. In Favor of: Clara Sauer, et al Affects: Parcel 5. Any facts, rights, interests or claims that may exist or arise by reason of the following matters disclosed by an ALTA /ACSM survey made by Above Grade Engineering on January 7, 2016, last revised . 2016, designated Job Number 14212: a, Building to the west encroaches 0.06 to 0.15' onto the Land. 6. The terms and provisions contained In the document entlbed "Grant Deed" recorded , 2016 as Instrument No. of Official Records. Said deed contains, among other things, a Power of Termination in favor of the City of San Luis Obispo. 7. The terms and provisions contained In the document entitled "Tenants- In•Common Agreement" a memorandum of which recorded , 2016 as Instrument No. of Official Records. 8. Matters in a document entitled "Reciprocal Easement Agreement for Pedestrian Plazas and Walkways ", executed by and between KC Mission, LLC, TMC Mission, LLC, Hotel SLO, LLC and Sutter Tustin SLO, LLC, recorded , 2016 as Instrument No. of Officlal Records, including but not limited to covenants, conditions, restrictions, easements, liens and charges. First American Title Insurance Company r Forrfa f�o.6r � ALTA Owners 2'lC PwIky (5-17 -06) Policy Number; 60A 9. A deed of trust to secure an indebtedness In the original principal amount of $30,000,000.00 recorded 2015 as Document No, of Official Records. Dated: , 2015 Trustor: Hotel SLO, LLC, a California limited liability company and Sutter Tustin SLO, LLC, a California limited liability company Trustee: Beneficiary: Delphi CRE Funding LLC, a Delaware limited liability company A document entitled "Assignment of Rents and Leases" recorded , 2015 as Instrument No. 2015- _ of Official Records, as additional security for the payment of the Indebtedness secured by the deed of trust, 10. A flnancing statement recorded 2015 as Instrument No. 2015- of Official Records. Debtor: Hotel SLO, LLC, a California limited liability company and Sutter Tustin SLO, LLC, a California limited liability company Secured party: Delphi CRE Funding LLC, a Delaware limited liability company First American We Insurance Company Form No. 3402.06 ALTA Owner's Policy (6- 17 -06) First American ZONING ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.: 692048 He No,: NCS- 692048 -CC .Policy Page •10 Policy N,imber: 692048 1. The Company insures against loss or damage sustained by the Insured In the event that, at Date of Policy, a. According to applicable zoning ordinances and amendments, the Land is not classified Zone C -D -H, Commercial Downtown Historic District; b. The following use or uses are not allowed under that classification: Hotel 2, There shall be no liability under this endorsement based on a. Lack of compliance with any conditions, restrictions, or requirements contained In the zoning ordinances and amendments, including but not limited to the failure to secure necessary consents or authorizations as a prerequisite to the use or uses. This paragraph 2.a. does not modify or limit the coverage provided In Covered Risk 5. b, The invalidity of the zoning ordinances and amendments until after a final decree of a court of competent jurisdiction adjudicating the Invalidity, the effect of which is to prohibit the use or uses. C. The refusal of any person to purchase, lease or lend money on the Title covered by this policy, This endorsement is issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (Iv) Increase the Amount of Insurance, To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls, Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. Date: First American Title Insurance Company [?4tiirr5 J Gihnon.� Pn:5loc•nt Aq,fj JoHrey $, Rnbm5on . ecr67ury Form 50-1000i(7-1-i4)" 'Page 10 of 24 - ALTA 3 -06 Zoning (6.17 -06) First American Title Insurance Company Foim Nb.'I402.C6 " ALTA Owner's Policy (6 -17 -06) R 'r First American COMMERCIAL ENVIRONMENTAL PROTECTION LIEN ENDORSEMENT Issued by First American TWO Insurance Company Attached to Policy No,: 692048 File No.: NCS- 692048-CC Policy Number: 692048 The Company insures against loss or damage sustained by the Insured by reason of an environmental protection lien that, at Date of Policy, Is recorded In the Public Records or filed in the records of the clerk of the United States district court for the district in which the Land is located, unless the environmental protection lien is set forth as an exception in Schedule B. This endorsement is Issued as part of the policy. Except as It expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls, Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American: Title insurance Company r'fs7Se� @fi[ JeffTey 5 Rotunson 5ocr, ptary Form 50 -10021 (7 -1 -14) Page 1l of 24 ALTA 8.2.06 Commercial Environmental Protection lien (10- 16.08) CLTA 110.9.1 -06 (10- 16.08) First American Title Insurance Company Form No. 1402.06 ALTA Owner's noriey (6-17.06) L First American ACCESS AND ENTRY ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.: 692048 File No.: NCS- 692048 -CC Pollcy page I2' Policy ftrf ber: 692048 The Company insures against loss or damage sustained by the Insured if, at Date of Policy (1) the land does not abut and have both actual vehicular and pedestrian access to and from Palm Street and Morro Street (the "Streets "), (ii) the Streets are not physically open and publicly maintained, or (Iii) the Insured has no right to use existing curb cuts or entries along that portion of the Streets abutting the Land. This endorsement Is issued as part of the policy. Except as It expressly states, It does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American TWO Insurance Company Otrrlrt�S.I (irdrnrlCQ r \JPre- slaGtA1✓`''f�' JefireY' $ faCinsvn @C'ffJdflfy Form 50 -10045 (7 -1.14) page 12 of 24 ALTA 17.06 Access and Entry (6-17 -06) First American Title Insurance Company Form No. 1402:06 1 � ALTA OwneYs Oclky (6- 17.06) First American UTILITY ACCESS ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.: 692048 File No.: NCS- 692048 -CC p6lkv Pso -131 , Fali[y Number: 6$2x+18 The Company insures against loss or damage sustained by the Insured by reason of the lack of a right of access to the following utilities or services: X Water service X Natural gas service X Telephone service X Electrical power service X Sanitary sewer X Storm water drainage either over, under or upon rights -of -way or easements for the benefit of the Land because of: (1) a gap or gore between the boundaries of the Land and the rights -of -way or easements; (2) a gap between the boundaries of the rights -of -way or easements; or (3) a termination by a grantor, or its successor, of the rights -of -way or easements. This endorsement is Issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (II) modify any prior endorsements, (Ili) extend the pate of Policy, or (iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement Is Inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Time Insurance Company Prg.idenr jvfMre:y 5 Rcbmson $9croiary Form 50-10047 (7.1 -14) Page 13 of 24 First American Inbe Insurance Company ALTA 17.2 -06 Utility Access (10- 16 -08) + - t ,r Form Np.;1402.06 , , ALTA OWWS Policy (6- 17.06) First American wRyi ..r,� MULTIPLE TAX PARCEL ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.: 692048 File No.: NCS- 692048-CC I -- ; - 'P61 icy Pijel4;' Polity Nurmkr 692048 The Company Insures against loss or damage sustained by the Insured by reason of: 1. those portions of the Land identified below not being assessed for real estate taxes under the listed tax identification numbers or those tax identification numbers including any additional land: Tax Identification Numbers: 002- 416 -031 002- 416 -035 002 -416 -038 2. the easements, if any, described in Schedule A being cut off or disturbed by the nonpayment of real estate taxes, assessments or other charges Imposed on the servient estate by a governmental authority. This endorsement Is issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (li) modify any prior endorsements, (ili) extend the Date of Policy, or (iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement Is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement Is subject to all of the terms and provisions of the policy and of any prior endorsements, First American Title Insurance Company Onnnis J Colmnrn F're! cent �" Fo J,�,Hr:y S Robinson sr-crewq Form 50 -1D049 (7 -1 -14) Page 14 of 24 First American Title Insurance Company ALTA 18.1 -06 Multiple Tax Parcel (6- 17.06) Form No.'- 1402.06' ALTA Owners$ Policy (6.17 -06) K,`Z w First American CONTIGUITY - MULTIPLE PARCELS ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No,; 692048 File No,; NCS- 692048 -CC The Company Insures against loss or damage sustalned by the Insured by reason of; the failure of Parcel One of the Land to be contiguous to Parcels Two and Seven Parcel Two to be contiguous to Parcels Three, Four and Seven; Parcel Three to be contiguous to Parcels Four and Six ; or •:Pb'(icy Pa9e.15; Polley Number: 692046 2, the presence of any gaps, strips, or gores separating any of the contiguous boundary lines described above. This endorsement is issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (Iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement Is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title insurance Company Oonias� !`r�yaiora �'rasi7rn� ,lefty 4 Rohmaon Secremry Form 50 -10050 (7 -1 -14) Page 15 of 24 First American Title Insurance Company ALTA 19.06 Contiguity - Multiple Parcels (6 -17 -06) Form N644p2.06 ALTA Owner's Policy (6- 17 -06) ` First American LOCATION ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.; 692048 File No.: NCS- 692048 -CC Policy Numfier: 642048 The Company Insures against loss or damage sustained by the Insured by reason of the failure of a Commercial Structures known as 861 -863 and 877 Palm Street and 955 Morro Street, San Luis Obispo, California, to be located on the Land at Date of Policy. This endorsement is issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (li) modify any prior endorsements, (ill) extend the Date of Policy, or (Iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company �X..,.., a. �4- ,, IlplI YIS .I rillitll]Pr7 Freslognt ,lefl ry 3 Rohinsrn $rr r{s'�I rY Form 50 -10054 (7 -1 -14) Page 16 of 24 . , t U First American Title Insurance Company ALTA 22 -06 Locadon (6 -17 -06) Form No, 1402.06 ALTA Owner's Policy (6.17.06) First American SAME AS SURVEY ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No,: 692048 File No.: NCS- 692048 -CC Poles u bier 692"8' 92 8 ' r a The Company Insures against loss or damage sustained by the Insured by reason of the failure of the Land as described in Schedule A to be the same as that Identified on the survey made by Above Grade Engineering dated January 7, 2016, last revised 2016, and designated Job No. 14212. This endorsement Is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (il) modify any prior endorsements, (iii) extend the Date of Policy, or (Iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provislon of this endorsement, this endorsement controls, Otherwise, this endorsement Is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company D3 nwxs J 074110ie 3 }miident P441 � ic-&Gy 5 RctimSPn 50S[t�7prY Form 50 -10059 (7 -1 -14) Page 17 of 24 First American Tale Insurance Company ALTA 25 -06 Same as Survey (10 -16 -08) CLTA 116.1 -06 (10. 16-08) Form N0, 1402.06 ALTA Owner's Policy (6-17 -06) N First American SUBDIVISION ENDORSEMENT Issued by FirstAlmerican Title Insurance Company Attached to Policy No.; 692048 File No.; NCS- 692048 -CC PoIIGjr Page'18 Policy Number: 692048 The Company Insures against loss or damage sustained by the Insured by reason of the failure of Parcels One and Two; Parcels Three, Four and Six, and Parcel Seven to constitute lawfully created parcels according to the subdivision statutes and local subdivision ordinances applicable to the Land. This endorsement is issued as part of the policy. Except as it expressly states, It does not (1) modify any of the terms and provisions of the policy, (il) modify any prior endorsements, (iii) extend the Date of Policy, or (Iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement Is Inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company A4--' lnt�hor Presoont ;#VJ V 'P JeMrey $ Rgbinspn socrecery Form 50 -10061 (8 -1 -09) Page 18 of 24 ALTA 26-06 Subdivision (10- 16-08) First American Title Insurance Company Form No. 1402106 ALTA Owner's Policy (6.17 -06) First American ENCROACHMENTS - BOUNDARIES AND EASEMENTS ENDORSEMENT Issued by FirstAmerican Tit le Insurance Company Attached to Policy No.: 692048 File No.: NCS- 692048 -CC :- -<Polliy Page 19!¢ Policy Number: 692018 The insurance provided by this endorsement Is subject to the exclusions in Section 4 of this endorsement; and the Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the policy. For purposes of this endorsement only, "Improvement" means an existing building, located on either the Land or adjoining land at Date of Policy and that by law constitutes real property. 3. The Company Insures against loss or damage sustained by the Insured by reason of: a. An encroachment of any Improvement located on the Land onto adjoining land or onto that portion of the Land subject to an easement, unless an exception In Schedule B of the policy identifies the encroachment; b. An encroachment of any Improvement located on adjoining land onto the Land at Date of Policy, unless an exception in Schedule B of the policy identifies the encroachment; C. Enforced removal of any Improvement located on the Land as a result of an encroachment by the Improvement, onto any portion of the Land subject to any easement, In the event that the owners of the easement shall, for the purpose of exercising the right of use or maintenance of the easement, compel removal or relocation of the encroaching Improvement; or d, Enforced removal of any Improvement located on the Land that encroaches onto adjoining land. 4. This endorsement does not Insure against loss or damage (and the Company will not pay costs, attorneys' fees, or expenses) resulting from the encroachments listed as Exceptions S of Schedule B. This endorsement is issued as part of the policy. Except as It expressly states, it does not (1) modify any of the terms and provisions of the policy, (il) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is Inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement Is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company • ': 102,06 �..�, LTA nor' Policy t6. 17-06) First American Tice insurance Company � 4 .14 � -- ,, Ckernasi CIA" 16m rrft'sracns M-U� V, fi"v-� Je" S. Robinson Secretary f -,z Palley P e (a) R KAA Iky Number: 652048 SUBJECT TO RECEIPT AND REVIEW OF SATISFACTORY ALTA /AGSM LAND TITLE SURVEY Form 50 -10808 (7 -1 -14) Page 20 of 24 ALTA 28.1 -06 - Encroachments - Boundaries and Easements (4 -2 -12) First Amerlcan We Insurance Company Form No. 1402',C6 ALTA Owner's Polley (6.17.06) Policy tdtimdser; 692048 t_ First American EASEMENT - DAMAGE OR ENFORCED REMOVAL ENDORSEMENT Issued by FirstAmerican Title Insurance Company Attached to Policy Number.: 692046 Reno.: NCS- 692048 -CC The Company Insures against loss or damage sustained by the Insured if the exercise of the granted or reserved rights to use or maintain the easement(s) referred to In the Exception(s) 4 and 8 of Schedule B results in. (1) damage to an existing building located on the Land, or (2) enforced removal or alteration of an existing building located on the Land. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of thls endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of thepolicy and of any prior endorsements. First American Title Insurance Company Dooms,i Oslnrro ProsiJon, deNray S Itrrinxn �ucmtarr Form 50.10588 (7 -1 -14) Page 21 of 24 ALTA 28 -06 Easement - Damage or Enforced Removal (Rev. 2- 3- 10) /CLTA 103.1 First American Title Insurance Company form No, 1402.06 ALTA Owner's Polley (6-.17 -06) First American DELETION OF ARBITRATION - ALTA LOAN POLICY ENDORSEMENT Issued by First American Title Insurance Company Attached to Policy No.: 692048 File No,: NCS- 692048 -CC �„ •Y R poky pne 2 `. ;. f' . ti Pol(cy Number. 692048 1. The policy Is hereby amended by deleting Paragraph 14 from the Conditions of the policy. This endorsement is issued as part of the policy, Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (Iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls, Otherwise, this endorsement Is subject to all of the terms and provisions of the policy and of any prior endorsements. First American Title Insurance Company 1]311111$ � fiilY1 }S11R Qr@Wrync Jeflrey S. Robinson Socreiary Form 50 -10880 (7 -1 -14) Page 22 or 24 First American Title Insurance Company Deletion of Arbitration - ALTA Loan Policy (1 -91) Forts No.-1402.06 . ALTA dwner's 6)icy (6. 17.06) ENDORSEMENT Attached to Policy No. NCS- 692048 -CC Issued By First American Title Insurance Company V t -H Policy Page QY) ► 1 Policy Number; $92048 Notwithstanding the Amount of Insurance set forth on Schedule A of the policy, the liability under the policy at date hereof is limited to $ 4,700,000.00. Liability hereunder shall Increase to the Amount of Insurance set forth In Schedule A as contemplated Improvements are made. The amount of Insurance available for payment of any loss insured against by this policy shall include the above stated sum, plus the amount expended by or on behalf of the insured for additional Improvements located upon the land at the time the loss occurs, not to exceed the Amount of Insurance set forth in Schedule A. Any such expenditures made for such additional Improvements subsequent to the date of policy shall be deemed made as of the date of policy. This endorsement is issued as part of the policy. Except as it expressly states, it does not (1) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (lil) extend the Date of Policy, or (Iv) Increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. F.A. Form 61.3 (11- 15 -95) Pending Improvements Endorsement First American 11tle Insurance Company Form N0 , 140 .06 ALTA Owner's Policy (6- 11 -06) • Fjrf5iAmerican Tite l 4r f + kpoiipaglefyf 24• f I e Policy IVUmb@l; 692018 Privacy Information We Are Committed to Safeguarding Customer Information 1n order to better serve your needs now and In the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we win do with such Information • particularly any personal or Flnancial Information, We agree that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our subsidiaries we have adopted this Privacy Policy to govern the use and handling of your personal information. Applicability This Privacy Policy governs our use of the information that you provide to us. It does not govern the manner in which we may use Information we have obtained from any other source, such as infomhabon obtained from a public record or from another person or entity, First American has also adopted broader guidelines that govern our use of personal Information regardless of its source. First American calls these guidelines Its Fair Information Values. Types of Information Depending upon which of our services you are utilizing, the types of nonpublic personal Information that we may collect Include, • Informatlon we receive from you on appikatlons, forms and In other communications to us, whether in writing, In person, by telephone or any other means; • Information about your transactions with us, our MOON companies, or others; and • Information we receive from a consumer reporting agency. use of information We request Information from you for our own legitimate business purposes and not for the benefit or any nonaffiliated party, Therefore, we will not release your Information to nonaffiliated parties except; (1) as necessary for us t0 provide the product or service you have requested of us; or (2) as permitted by law. We may, however, store such Information Indefinitely, Including the period after which any customer relationship has ceased. Such information may be used for any Internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal Information listed above to one or more of our amllated companies, Such affiliated Companies include financial service providers, such as tide Insurers, property and casualty Insurers, and trust and Investment advisory companies, or companies Involved In real estate services, such as appraka? companies, home warranty companies and escrow companies, Furthennore, we may also provide all the Information we collect, as described above, to companies That pv dorm marketing ser.+crs on wr behalf, on tsthall of our affiliated companies or to other nnarsclal institutions with whom we or our affiliated companies have joint marketing agreements. Former Customers Even If you are no longer our customer, our Privacy Policy will continue to apply to you Conndentlallty and Security We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you W those Individuals and entities who need to know that Information to provide products or services to you, We will use our best effurts to train and oversee our employees and agents to ensure that your Information will be handled responsibly and In accordance with this Privacy Policy and First American's Fair Information values. We currently maintain physical, electronic, and procedural safeguards that comply with Federal regulabons to guard your nonpublic personal Information. Information Obta fined Through Our Web Site First American Financial Corporation is sensldve to privacy issues on the Internet. We believe It Is important you know how we treat the Information about you we receive on the Internet, In general, you can visit First American or Its affillates' Web Sites on the World Wide Web without telling us who you are or revealing any information about yourself. Our Web servers tolled the domain names, not the e-mail addresses, of visitors. This Information Is aggregated to maasure the number of visits, average time spent on the site, pages vlewec and similar Information. First American uses this Information to measure the use of our site and to develop Ideas to improve the content of our she, There are times, however, when we may need Information from you, such as your name and email address. When information Is needed, we will use our best efforts to let you know at the time of collection how we will use the personal inforruatlon. Usually, the personal Information we culkv3 Is used only by us to respond to your Inquiry, process an order or allow you to access spedfic account/progle Information. If you choose to share any personal Information with us, we will only use it In accordance with the policies outlined above, Business Relationships First American Financial Corporatlon's site and Its affiliates' sites may contain links to other Web sites. While we try to link only to sites that share our high standards and respect for privacy, we are not responsible for the content or the privacy practices employed M other saes. Cookies Some of First Amerkart's Web sites may make use of "coolde" technology to measure site activity and to customize information to your personal tastes. A cookie Is an element of data that a Web site gsend to your browser, which may then store the 000We on your hard drive. tAm.com uses stored cookies. The goal of this technology is to lxttcr serve you when visiting our site, save you time when you are here and to provide you with a more meaningful and productive Web site experience. Fair Information Values Fairness We consider consumer expectations about their privacy In all our businesses. We only offer products and servlce5 [hat assure a favorable balance between consumer benefits and consumer Privacy, Public Record We believe that an open public record creates significant value for society, enhances consumer choke and creates consumer opportunity. We actively support an open public record and emphasize its importance and contribution to our economy, Use We believe we should behave responsibly when we use information about a consumer in our business. We will obey the laws goveming the collection, use and dissemination of data, Accuracy We will take reasonable steps to help assure the accuracy of the data we collet, use and disseminate, Where possible, we will take reasonable steps to correct inaccurate Information, When, as with the public record, we cannot correct Inaccurate Information, we will take all reasonable steps to assist consumers In Identifying the source of the erroneous data so that the consumer can secure the required corrections. Education We endeavor to educate the users or our products and services, our employees and others In our Industry about the importance of consumer privacy. We will Instruct our employees on our fair inrormation values and on the responsible collection and use of data. We will encourage others In our Industry to collect and use Information In a responsible manner. Security We will maintain appropriate facilities and systems to protect against unauthorized access to and corruption of the data we maintain. Form 50- PRIVACY (9/1/10) Page 1 of 1 Privacy Information (2001 -2010 First Amer can Financial Corporation) 3 1 t a First American Title Insurance Company IV&5611�0Y� PREPARED BY AND UPON RECORDATION RETURN TO: Kutak Rock LLP 1801 California Street, Suite 3000 Denver, CO 80202 Attn: Micah J. Halverson, Esq. WE HEREBY CERTIFY THIS TO BE A TRUE AND CORRECT COPY fj�OF THE ORIGINAL RECORDED ON: r —Z .—I .�INSTRUMEN7'0 O — 60 31% COUNTY OF: FIRS TIM A TITLE COMPAIgY BY. DEED OF TRUST, ASSIGNMENT OF LEASES AND DENTS, SECURITY AGREEMENT, AND FIX'T'URE FILING From HOTEL SLO, LLC, a California limited liability company and SUTTER TUSTIN SLO, LLC, a California Iimited liability company, each as trustor to FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee For the Benefit of DELPHI CRE FUNDING LLC, a Delaware limited liability company, as beneficiary Date: January 25, 2016 Property Address: 861 -863 Palm Street, 877 Palm Street, 955 Morro Street San Luis Obispo, California 93401 APN/Tax ID No. (if any): 002 -416 -031, 002 -416 -035, 002 -416 -038, 4845.7357 -5722 6 Deed of Trust— Hotel SLo DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING (this "Security Instrument") is made as of this 25`h day of .January, 2016, by HOTEL SLO, LLC, a California limited liability company, having its principal place of business at c/o Metrovation, LLC, 580 Second Street, Suite 260, Oakland, California 94607, and SUTTER TUSTIN SLO, LLC, a California limited liability company, having its principal place of business at 2509 Pacific Avenue, San Francisco, California 94115, each as trustor (collectively, "Trustor "), to FIRST AMERICAN TITLE COMPANY, having an address at 1850 Mt. Diablo Blvd., Suite 300, Walnut Creek, California 94596, as trustee (together with its successors and/or assigns, "Trustee "), for the benefit of DELPHI CRE FUNDING LLC, a Delaware limited liability company, having an address at c/o ACORE Capital Mortgage, LP, 80 E. Sir Francis Drake Blvd., Suite 2A, Larkspur, California 94939, as beneficiary (together with its successors and/or assigns, "Beneficiary ") RECITALS: WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith between Trustor and Beneficiary, Beneficiary has agreed to make a Loan to Trustor in the original principal amount of up to THIRTY MILLION AND 00 /100 DOLLARS ($30,000,000) (as the same may be amended, the "Loan Agreement "); capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and WHEREAS, Beneficiary is not willing to make the Loan to Trustor unless Trustor executes and delivers this Security Instrument. NOW, THEREFORE, as an inducement to Beneficiary to make the Loan to Trustor, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Trustor hereby agrees as follows: 1. Grant of Security. Trustor does hereby irrevocably grant, pledge, and collaterally assign, transfer and convey to Trustee in trust for the benefit and security of Beneficiary, and its successors and assigns, WITH THE POWER OF SALE (to the extent permitted by applicable law), all of its right, title, and interest in and to the property, rights, interests and estates described on Schedule 1 attached hereto, whether now owned, or hereafter acquired (collectively, the 'Property") to secure the payment to Beneficiary of the Loan and the Debt (including, without limitation, all additional advances of the Loan made by Beneficiary from time to time under any of the Loan Documents) in the manner provided for in the Loan Agreement and performance of the other Obligations of Trustor. 2. Assignment of Leases and Rents. Trustor hereby absolutely and unconditionally assigns to Beneficiary all of Trustor's right, title and interest in and to all current and future Leases and Rents; it being intended by Trustor that this assignment constitutes a present, absolute and unconditional assignment and not an assignment for additional security only. Nevertheless, subject to the terms of the Loan Agreement, the Assignment of Leases and Section 7.2 (h) of this Security Instrument, Beneficiary grants to Trustor a revocable license (which shall be automatically revoked during the continuance of an Event of Default) to collect, receive, use and enjoy the Rents and otherwise deal with the Leases in accordance with the terms and conditions of the Loan Agreement. 3, Security Agreement, This Security Instrument is a real property deed of trust, a "security agreement," a "financing statement" and a "fixture fling" within the meaning of the Uniform Commercial Code in effect in the State where the Land is located (the "UCC "). The Property includes Z Deed of Trust — Hotel SLO 4845-7357-57216 both real and personal property and all other rights and interests, whether' tangible or intangible in nature, of Trustor in the Property.. By executing and delivering this Security Instrument, Trustor hereby grants to Beneficiary, as security for the Debt and other Obligations, a security interest in the Fixtures, the Equipment, and the UCC Collateral (as defined on Schedule 1). Trustor's (debtor's) principal place of business is as set forth on the first page hereof and the address of Beneficiary (secured party) is as set forth on the first page hereof. Trustor and Beneficiary agree that the foregoing is intended to grant in favor of Beneficiary a first priority continuing lien and security interest in the Property. Trustor authorizes the Beneficiary to file UCC financing statements in form and substance satisfactory to the Beneficiary describing the Property and the UCC Collateral. Such financing statements may describe as the property covered thereby "all assets of the debtor, whether, now owned or hereafter acquired" or words to that effect, notwithstanding that such UCC Collateral description may be broader in scope than the UCC Collateral described in this Security Instrument. The organizational identification number of Hotel SLO, LLC is 201430910186 and the organizational identification number of Sutter Tustin SLO, LLC is 201534910140 4. 1- imur�e Filing. Certain of the Property is or will become "fixtures" (as that term is defined in the UCC) on the Land, and this Security Instrument, upon being filed for record in the real estate records of the city or county wherein such fixtures are situated, shall operate also as a financing statement (naming Trustor as the debtor and Beneficiary as the secured party) filed as a fixture filing in accordance with the applicable provisions of the UCC upon such of the Property that is or may become fixtures. 5, Due on Sale/Encumbrance. Trustor shall not cause or suffer to occur a Transfer of the Property or any interest therein, or any direct or indirect interest in Trustor, other than as may be permitted pursuant to the Loan Agreement, 6. Default, Remedies., During the existence of an Event of Default and the continuance thereof beyond any applicable notice and cure period, the license granted to Trustor under Section 2 hereof shall automatically be revoked, and Trustor agrees that Beneficiary may take such action, without notice, presentment, demand, protest, or notice or action of any kind whatever (each of which is hereby expressly waived by Trustor), as it deems advisable to protect and enforce its rights against Trustor and the Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Beneficiary may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Beneficiary (personally or by causing the Trustee to do so): (a) accelerate the Maturity Date of the Debt and declare any or all of the Debt to be immediately due and payable, whereupon the same shall become immediately due and payable. Upon any such acceleration, payment of such accelerated amount shall constitute a prepayment of the principal balance of the Debt and any applicable prepayment fee, if any, provided for in the Loan Agreement shall then be immediately due and payable; (b) institute proceedings (judicial or otherwise) for the full or partial foreclosure of this Security Instrument under any applicable provision of law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner as Beneficiary shall elect in its sole and absolnte discretion; (c) sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Trustor therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and place, upon such terms and after such notice thereof, all as may be required or permitted by law, and, without limiting the foregoing, Beneficiary may, (i) elect to treat any of the Property which consists of (x) a right in action, or 3 Deed of Trust — Hotel SLO 4845 -7357 - 5722.6 (y) which is property that can be severed from the Land covered hereby, or (z) any Improvements (without causing structural damage thereto), as if the same were UCC Collateral, and dispose of the same in accordance with applicable law, separate and apart from the sale of the Land; (ii) from time to time postpone any sale hereunder by making public announcement thereof at the time and place noticed for any such sale; (iii) to the extent the Property consists of several lots, parcels, condominium units or items of property, (A) designate the order in which such lots, parcels, condominium units or items shall be offered for sale or sold, and/or (B) elect to sell such lots, parcels, condominium units or items through a single sale, or through two or more successive sales, or in any other manner Beneficiary (or Trustee) designates. No sale (whether conducted pursuant to a judicial action or otherwise) of less than all of the Property shall operate to terminate or otherwise affect the lien of this Security Instrument on any part of the Property not sold until the Debt has been satisfied in full (exclusive of any indemnification or other obligations which are expressly stated in any of the Loan Documents to survive repayment of the Debt); (d) institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained in the Loan Documents; (e) recover judgment on the Note either before, during or after any proceedings for the enforcement of this Security Instrument or- the other Loan Documents; (f) apply for the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Debt and without regard to the solvency of Trustor, any guarantor or indemnitor with respect to the Loan or any Person otherwise liable for the payment of the Debt or any part thereof, it being agreed that Beneficiary shall be entitled to appointment of such receiver, trustee, liquidator or conservator as a matter of right; (g) enter into or upon the Property, either personally or by its agents, nominees or attorneys, and dispossess Trustor and its agents therefrom, without liability for trespass, damages or otherwise, and exclude Trustor and its agents wholly therefrom, and take possession of all books, records and accounts relating thereto and Trustor agrees to surrender possession of the Property and of such books, records and accounts to Beneficiary upon demand, and thereupon Beneficiary may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct the business thereat, (ii) complete any construction on the Property in such manner and form as Beneficiary deems advisable, (iii) make alterations, additions, renewals, replacements and improvements to or on the Property, (iv) exercise all rights and powers of Trustor with respect to the Property, whether in the name of Trustor- or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof, (v) require Trustor to pay monthly in advance to Beneficiary, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Trustor, (vi) require Trustor to vacate and surrender possession of the Property to Beneficiary or to such receiver and, in default thereof: Trustor may be evicted by summary proceedings or otherwise, and (vii) apply the receipts from the Property to the payment of the Debt and the performance of the Obligations, in such order, priority and proportions as Beneficiary shall deem appropriate in its sole discretion after deducting therefrom all third -party, out of pocket costs and expenses (including, without limitation, reasonable attorneys' fees and costs) incurred by Beneficiary in connection with the aforesaid operations and all amounts necessary to pay the Property Taxes, Other Charges, Insurance Premiums and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Beneficiary, its counsel, agents and employees; (h) exercise any and all rights and remedies granted to a secured party upon default under the UCC, including, without limiting the generality of the foregoing: (i) the right to take possession of the Fixtures, the Equipment and/or the other' UCC Collateral or any part thereof, and to take such other Deed of Trust -- Hotel 5L O 4345 -7357 -5722 6 measures as Beneficiary may deem necessary for the care, protection and preservation of the Fixtures, the Equipment and/or the other UCC Collateral; and (ii) require Trustor at its sole cost and expense to assemble the Fixtures, the Equipment and/or the other UCC Collateral and make it available to Beneficiary at a convenient place acceptable to Beneficiary. Any notice of sale, disposition or other intended action by Beneficiary with respect to the Fixtures, the Equipment and/or the UCC Collateral sent to Trustor in accordance with the provisions hereof at least ten (10) days prior to such action, shall constitute commercially reasonable notice to Trustor. The proceeds of any disposition of the UCC Collateral, or any part thereof, may, except as otherwise required by applicable law, be applied by Beneficiary to the repayment of the Debt in such priority and proportions as Beneficiary in its sole discretion shall deem proper; (i) apply any sums then deposited or held in Reserve Accounts, escrow or otherwise by or on behalf of Beneficiary in accordance with the terms of the Loan Agreement to the payment of the Debt in such order, priority and proportions as Beneficiary shall deem to be appropriate in its sole and absolute discretion; and/or (j) pursue such other remedies as Beneficiary may have under applicable law and/or- in equity. 7. Application of Proceeds. The purchase money, proceeds and avails of any disposition of the Property (after deducting all costs, fees and expenses of Beneficiary, Trustee, and of this Security Instrument), and or any part thereof, or any other sums collected by Beneficiary pursuant to the Loan Documents, may be applied by Beneficiary to the payment of the Debt in such priority and proportions as Beneficiary in its discretion shall deem proper, to the extent consistent with law. 8. Actions and Proceedings. Beneficiary has the right to appear in and defend any action or' proceeding brought with respect to the Property and to bring any action or proceeding, which Beneficiary, in its sole and absolute discretion, decides should be brought to protect its interest in the Property. 9. Other Rights, etc. The failure of Beneficiary to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument Trustor shall not be relieved of Trustor's obligations hereunder by reason of (i) the failure of Beneficiary to comply with any request of Trustor or any guarantor or indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Note or, the other Loan Documents, (ii) the release, regardless of consideration, of the whole or any part of the Property, or of any Person liable for the Obligations or any portion thereof, or (iii) any agreement or stipulation by Beneficiary extending the time of payment or otherwise modifying or supplementing the terms of the Loan Documents except as expressly set forth therein. It is agreed that the risk of loss or damage to the Property is on Trustor, and Beneficiary shall have no liability whatsoever for any decline in value of the Property, for failure to maintain the Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks insured. Possession by Beneficiary shall not be deemed an election of .judicial relief if any such possession is requested or obtained with respect to any Property or' collateral not in Beneficiary's possession. Beneficiary may resort for the payment of the Debt and the performance of the Obligations to any other security held by Beneficiary in connection with the Loan in such order and manner as Beneficiary, in its sole discretion, may elect. The rights of Beneficiary under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No act of Beneficiary shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. 10. Right to Release Any Portion of the .Proper. Beneficiary may release any portion of the Property for such consideration as Beneficiary may require without, as to the remainder of the Property, Deed of Trust — Hotel SW 4845- 7357 -5722 6 in any way impairing or affecting the lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the Debt shall have been reduced by the actual monetary consideration, if any, received by Beneficiary for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Beneficiary may require without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security interest in the remaining portion of the Property 11. Recourse and Choice of Remedies. Beneficiary and other Indemnified Parties are entitled to enforce the obligations of Trustor, any guarantor and indemnitor contained in any other Loan Document without first resorting to or exhausting any security or collateral for the Debt, and in the event Beneficiary commences a foreclosure action against the Property, Beneficiary is entitled to pursue a deficiency judgment with respect to such obligations against Trustor and any guarantor or indemnitor with respect to the Loan to the extent permitted under applicable law and under the Loan Documents. The liability of Trustor and any guarantor or indemnitor with respect to the Loan pursuant to any other Loan Document is not limited to the original principal amount of the Loan: Notwithstanding any other provision of this Security Instrument, however, Trustor's obligations hereunder are subject to the terms and conditions of Section 6.3 of the Loan Agreement, which terms are incorporated herein by reference. 12. Waivers., Trustor hereby waives (in each case to the full extent permitted by applicable law): (a) the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein; (b) any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Trustor, and on behalf of each and every, Person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent permitted by applicable law; (c) any notices of any nature whatsoever from Beneficiary (except as otherwise required by the Loan Documents or applicable law); (d) any right to plead any statute of limitations as a defense to payment of the Debt or performance of the Obligations, 11 GOVERNING JURISDICTION; SERVICE OF PROCESS. WITH RESPECT TO MATTERS RELATING TO THE CREATION, PERFECTION AND PROCEDURES RELATING TO THE ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THIS SECURITY INSTRUMENT (INCLUDING, WITHOUT LIMITATION, FORECLOSURE), THIS SECURITY INSTRUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF), IT BEING UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE LOAN DOCUMENTS, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN §§ 5 -1401 AND 5 -1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)) SHALL GOVERN ALL MATTERS RELATING TO THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR THEREUNDER PURSUANT TO SECTION 5 -1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, ALL PROVISIONS OF THE LOAN AGREEMENT INCORPORATED HEREIN BY REFERENCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF) PURSUANT TO SECTION 5 -1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. TRUSTOR (A) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY BE BROUGHT IN A COURT OF RECORD IN THE COUNTY WHERE THE Deed of Trust — Hotel SL.O 4845- 7357 -5722 6 PROPERTY IS LOCATED OR IN THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SAID COUNTY, (B) CONSENTS TO THE JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (C) WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, TRUSTOR IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY SERVICE OF COPIES OF SUCH PROCESS TO TRUSTOR AT ITS ADDRESS PROVIDED HEREIN. NOTHING CONTAINED IN THIS SECURITY INSTRUMENT SHALL PREVENT BENEFICIARY FROM BRINGING AN ACTION, ENFORCING ANY AWARD OR JUDGMENT, OR EXERCISING ANY RIGHT OR REMEDY AGAINST TRUSTOR, OR AGAINST ANY SECURITY OR COLLATERAL FOR THE DEBT, WITHIN ANY OTHER COUNTY, STATE OR ANY OTHER FOREIGN OR DOMESTIC JURISDICTION. 14.. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRUSTOR AND BENEFICIARY (BY ITS ACCEPTANCE OF THIS SECURITY INSTRUMENT) HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST, WITH REGARD TO THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH., THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY TRUSTOR AND BENEFICIARY AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE, THE PARTIES HERETO ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER. 15. Subrogation. If any or all of the proceeds of the Loan have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of the funds so used, Beneficiary shall be subrogated to all of the rights, claims, liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Beneficiary and are merged with the lien and security interest created herein as cumulative security for the payment of the Debt, the performance and discharge of Trustor's obligations hereunder, under the Loan Agreement, the Note and the other Loan Documents and the performance and discharge of the Obligations. 16. Limitation on Beneficiary's Responsibility. No provision of this Security Instrument shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Beneficiary, nor shall it operate to make Beneficiary responsible ar liable for any waste committed on the Property by the tenants or any other, Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, employee or, stranger. Nothing herein contained shall be construed as constituting Beneficiary as a "murtgagee in possession" unless Beneficiary actually elects in writing to become a "mortgagee in possession." IT After- Acquired Property. All property and tights acquired by Trustor after the date of this Security Instrument which by the terms of this Security Instrument shall be subject to the Lien and the security interest created hereby, shall immediately upon the acquisition thereof by Trustor and without further amendment, modification, supplement, conveyance or assignment become subject to the Lien and 7 Deed of Trust — Hotel 5L O 4845 - 7357 -5722 6 security interest created by this Security Instrument. Nevertheless, Trustor shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further amendments, modifications, supplements, security agreements, financing statements, assignments and assurances as Beneficiary shall require for accomplishing the purposes of this Security Instrument, 18. Reif ase, If Trustor shall pay to Beneficiary the Debt in the manner provided in the Note, the Loan Agreement and this Security Instrument, and shall perform the Obligations then outstanding as set forth in this Security Instrument and shall abide by and comply with each and every covenant and condition set forth herein and in the Note, the Loan Agreement and the other Loan Documents, this Security instrument shall terminate. 19. Miscellaneous. All notices, consents, approvals and requests required or permitted hereunder shall be given (and shall be deemed effect) in the manner described in Section 8,6 of the Loan Agreement. No failure to exercise, and no delay in exercising, on the part of Beneficiary, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. This Security Instrument shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns; provided, however, Trustor may not assign any of its rights, powers, duties or obligations hereunder. This Security Instrument embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof. There are no oral agreements between Trustor and Beneficiary. If any provision of this Security Instrument is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable and all other provisions of this Security Instrument shall remain in full force and effect. This Security Instrument may be amended only by an instrument in writing executed by the party against whom such amendment is sought to be enforced.. If Trustor consists of more than one Person, the obligations and liabilities of each such Person shall be joint and several. This Security Instrument may be executed in counterparts. 20.. Trustee Provisions. Trustee accepts this trust when this Security Instrument, duly executed and acknowledged, is made a public record as provided by law, and by its acceptance hereof, Trustee covenants faithfully to perform and fulfill the trusts herein created, being liable, however, only for illegal acts, willful misconduct and bad faith, and Trustee hereby waives any statutory fee and agrees to accept reasonable compensation, in lieu thereof, for any services rendered by it in accordance with the terms hereof.. Trustee may resign at any time upon giving thirty (30) days' notice in writing to Trustor and to Beneficiary. Beneficiary may, from time to time, by written instrument executed and acknowledged by Beneficiary, mailed to Trustor and recorded in the county in which the Real Property is located, and by otherwise complying with the provisions of applicable law of the state in which the Real Property is located, substitute a successor or successors to the person or persons then named herein or acting hereunder as Trustee. Beneficiary, with or without cause, is authorized either in its own name or through an attorney or attorney -in -fact appointed for the purpose by written instrument duly recorded and without any formality other than a designation in writing of a successor substitute trustee, to appoint a successor or, substitute trustee who shall thereupon become vested with and succeed to all the rights, title and powers given to Trustee herein named, the same as if the successor or substitute trustee had been named original Trustee herein. Such right to appoint a successor, or substitute trustee shall exist as often and whenever Beneficiary desires. Trustee, or anyone acting in its stead, shall have, in its discretion, authority to employ all proper agents and attorneys in the execution of this trust and in the conducting of any sale made pursuant to the terms hereof', and to pay for such services rendered out of the proceeds of the sale of the Property, should any be realized. If no sale be made or if the proceeds of sale be insufficient to pay the same, then Trustor hereby undertakes and agrees to pay the reasonable costs of such services rendered to Trustee. If Trustee shall be made a party to or shall intervene in any action or proceeding affecting the Property or the title thereto, or the interest of Trustee or Beneficiary under this Deed of Trust — Hotel SLO 4845-7357-5722:6 Security Instrument, except for any action or proceeding arising out of the willful misconduct or, to the extent prohibited by law, the bad faith or illegal acts of Trustee or Beneficiary, Trustee and Beneficiary shall be reimbursed by Trustor, promptly within ten (10) days of written demand, for all reasonable costs, charges and attorneys' fees incurred by them or any of them in any case, and the same shall become so much additional indebtedness secured hereby. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Security Instrument for endorsement, and without affecting the personal liability of any person with respect to any of the Obligations or the effect of this Security Instrument upon the remainder of the Property, Trustee may (i) reconvey any part of the Property, (ii) consent in writing to the making of any map or plat thereof, (iii) join in granting any easement thereon, or (iv) join in any extension agreement, agreement subordinating the lien or charge hereof, or other agreement or document relating hereto or to the Property. TRUSTOR SHALL INDEMNIFY TRUSTEE AGAINST ALL CLAIMS, ACTIONS, LIABILITIES, ,JUDGMENTS, THIRD PARTY, OUT OF POCKET COSTS, REASONABLE ATTORNEYS' FEES OR OTHER CHARGES OF WHATSOEVER KIND OR NATURE MADE AGAINST OR INCURRED BY TRUSTEE, AND ARISING OUT OF THE PERFORMANCE BY TRUSTEE OF THE DUTIES OF TRUSTEE HEREUNDER, OTHER THAN THOSE ARISING DUE TO TRUSTEE'S ILLEGAL ACTS, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, TRUSTEE'S BREACH OF THE LOAN DOCUMENTS, OR THAT FIRST ARISE AFTER A FORECLOSURE OR A DEED IN LIEU OF FORECLOSURE OF THE PROPERTY. 21. State - Specific Provisions. The terms and conditions of this Section 21 shall control over any inconsistent terms and conditions elsewhere in this Security Instrument.. (a) Fixture Filing. This Deed of Trust serves as a Fixture Filing under Section 9 -502 of the California Uniform Commercial Code and covers goods that are or become fixtures on the land. (b) California Insurance Provisions. Beneficiary has disclosed and hereby discloses to Trustor in writing that under Section 2955.5 of the California Civil Code: "No lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property." (c) California Environmental Provisions. In the event that any portion of the Property is determined to be "environmentally impaired" (as "environmentally impaired" is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as "affected parcel" is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting Beneficiary's or Trustee's rights and remedies under this Deed of Trust, Beneficiary may elect to exercise its right under California Code of Civil Procedure Section 726.5(a) to (a) waive its lien on such environmentally impaired or affected parcel portion of the Property and (b) exercise (i) the rights and remedies of an unsecured creditor -, including reduction of its claim against Trustor to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), Trustor shall be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant or user of any portion of the Property and Trustor knew or should have known of the activity by such lessee, occupant or user which caused or contributed to the release or threatened release. All costs and expenses, iucludutg, but nut limited to, reasonable attorneys' fees and costs and court costs incurred by Beneficiary in connection with any action commenced under this Section, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the Default Rate, provided that such 9 Deed of Trust — Hotel SL.O 4845 -7357 -5722 6 interest rate shall not exceed the maximum interest rate permitted by law, until paid, shall be added to the Obligations secured by this Deed of Trust and shall be due and payable to Beneficiary upon its demand made at any time following the conclusion of such action. [NO FURTHER TEXT ON THIS PAGE] 10 peed of Trust — Hotel SID 4845- 7357 - 5722,6 IN WITNESS WHEREOF, this Security Instrument has been executed by Trustor as of the day and year first above written. TRUSTOR: HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager By:' Name: Mark Seiler Title: Manager By: ' z a Hotel Management, LLC, a California Iimi d Ii bility company By: �� Name: Paolo Petrone Title: Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, LLC, a California limited liability company, its Manager By: Louis Lipset, Manager Deed of Trust — Hotel SLO 4645- 7357 -5722 A notary public or other officer completing this - certificate verifies only the Identity of the ;Individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Contra Costa On ..Ianuary 21, 2016 before me, :So 1^1 t 1 60►'1 Notary Public, personally appeared Mark Seiler and Paolo Patrone and Louis Lipset, 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) C. J. WILSON��; Comm, f 2135156 rr�� NOTARY POIIIC- CAUFORMA V� �' CONTRA PC Ol r2my 11, U. DE i019"� Schedule 1 B4OPERTY The term "Property" shall mean all of the following: (a) Land, The real property described on Exhibit A attached hereto and made a part hereof (the "Land "), and all additional lands, estates and development rights hereafter acquired by Trustor for use in connection with the Land and all additional lands and estates therein which may, from time to time owned by Trustor; (b) Improvements. The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the "Improvements "); (c) Fixtures. All Equipment (as defined below) and other items attached to and/or related to the Land and/or the Improvements forming part of the Property that it are deemed "fixtures" and/or "real property" under the law of the state where the Land is located ( including, without limitation, all building or, construction materials intended for construction, alteration, or repair of the Property (collectively, the "Fixtures "); it being understood and agreed that the Improvements and the Fixtures are part and parcel of the Land appropriated to the use thereof and, whether affixed or annexed to the Land or not, shall for the purposes of this Security Instrument be deemed conclusively to be real estate and encumbered hereby; (d) Easements. All easements, rights -of -way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and/or the Improvements and the reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Trustor of, in and to the Land and the Improvements and every part and parcel thereof, with the appurtenances thereto (collectively, the "Easements "); (e) Equipment. All "equipment" as such term is defined in the UCC (as hereinafter defined) used or installed (or intended to be used or installed) at or, in connection with the Improvements or the Land (wherever located) (including, but not limited to, all machinery, equipment, furnishings, furniture, tools, appliances, fittings, apparatuses, engines, devices, pumps, pipes, plumbing, conduits, tanks, structures, and any and all systems and related items for cleaning, sprinklers, fire extinguishing, heating, cooling, ventilating, laundry, incinerating, electrical, lighting, sound, pollution control, security, disposal, sewer, utilities, data transmission, communications, paging, intemet, television, and all other structures, together with all accessions, appurtenances, additions, replacements, betterments and substitutions for any of the foregoing (collectively, the "Equipment "); Sl -1 Deed of Trust — Hotel SL,O 4845- 7357 - 5722.6 (f) UCC Collateud.. All personal property, intangibles, general intangibles, documents, instruments, chattel paper-, and accounts, as such terms are defined in the UCC (including, without limitation, all furniture, furnishings, objects of art, Equipment, supplies, contract rights, entitlements, the Clearing Account, the Cash Management Account, the Reserve Accounts (and any sums, cash, checks, drafts, securities, certificates and instruments, if any, from time to time deposited or held therein or credited thereto), money, accounts receivable, credit card receivables, franchises, licenses, certificates, permits, claims, suits, choses, approvals, plans, specifications, drawings, surveys, reports, trademarks, trade names, servicemarks, logos, copyrights, goodwill, books and records, any interest rate cap agreements or other interest rate hedging contracts or products, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, dishware, silverware, utensils, glassware, linens, pillows, blankets, foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, mini -bars, liquor and other drink dispensers, icemakers, kitchen equipment, radios, television sets, potted plants, cutlery and dishes, food, beverages, reservation systems, and computer software), and any other' property or rights constituting to the full extent that the same may be subject to the UCC, now or hereafter owned by Trustor, whether used in connection with or relating to the Property or otherwise, together with all accessories, replacements and substitutions thereto (collectively, the "UCC Collateral "); (g) Leases and Rents.. All Leases, together with all extensions and amendments thereto, all income, rents, fees, payments, revenues, issues profits, royalties bonuses and other amounts payable thereunder, all guaranties of the lessees' obligations thereunder, all security deposits (whether in cash, letter of credit, securities or otherwise) provided in connection therewith, and all room rents, revenues, accounts and receivables derived from the use or, occupancy of all or any portion of the Land or Improvements, credit card receivables and receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of property or rendering of services by Trustor or, any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other space, halls, stores, and offices, and deposits securing reservations of such space), license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales (including mini -bar revenues), service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance (collectively, the "Rents "); (h) Condemnation Awards. All Awards which may heretofore and hereafter be made with respect to the Property; (i) Insurance Proceeds. All proceeds and other payments payable under or in respect of any insurance policies covering or relating to the Property; 0) Tax Certiorari. All refunds, rebates or credits in connection with reduction in Property Taxes or Other Charges charged against the Property; (k) Conversion.. All proceeds of the conversion, voluntary or involuntary, of any of the foregoing including, without limitation, Insurance Proceeds and Awards, into cash or, liquidation claims; (1) Rights.. The right, in the name and on behalf of Trustor, to appear, in and defend any action or proceeding brought with respect to the Property and to commence any action or' proceeding to protect the interest of Beneficiary in the Property; S 1 -2 Deed of'Trust — Hotel SLo 4815- 7357 - 5722.6 W Proceeds, All "proceeds" as such term is defined in the UCC of any of the foregoing, claims, suits, (collectively called the "Intangibles"); and (n) Other Rights. Any and all other rights of Trustor in and to the items set forth in Sections (a) through (m) above, S 1 -3 Deed of Trust — Hotel SL.O 4845 - 7357.5722 6 EXHIBIT A Le al Desch tion of the Land Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows: PARCEL, ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 540 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 350 54' WEST, 80,00 FEET TO A POINT; THENCE NORTH 54° 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 35° 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 33° 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 360 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 53° 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 81' 38' EAST, 8,.13 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 12.75 FEET TO A POINT; THENCE NORTH 500 13' EAST, 3816 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 540 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 540 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 540 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 540 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N. E. CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 53° 38' WEST ALONG A -1 Deed of Trust — Hotel SL,O 4845 - 7357 - 5722.6 SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 36° 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 53° 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. .I. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 35° 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING,. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 53° .38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 33° 23'50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 530 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 33° 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2,100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 53° 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0..35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, A -2 Deed of Trust — Hotel SLQ 4845- 7357 - 5722.6 ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. k MAINO, ET UX, RECORDED APRIL 07, 195.3 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS„ PARCEL SEVEN: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 530 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO L MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 81 ° 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 8" 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53" 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING, EXCEPTING., THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET. PARCEL EIGHT: NON - EXCLUSIVE EASEMENTS OVER WALKWAYS CREATED AS AN APPURTENANCE TO PARCELS ONE THROUGH SEVEN ABOVE IN THE "RECIPROCAL EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS" EXECUTED BY JCC MISSION, LLC, A CALIFORNIA LIMITEI7� LIABILITY COMPANY, ET AL, RECORDED �T, 2016 AS 1NSTRUIVIENT NO. %Q °3..t=T�.. OF OFFICIAL RECORDS. APN(S): 002 - 416 -031 (PARCEL SEVEN), 002 -416 -035 (PARCELS ONE AND TWO) AND 002 -416- 038 (PARCELS THREE, FOUR AND SIX) A -3 Deed ofTnist— Hotel 5L.0 4845 - 7357 -5722 6 N(2,(0 ce Zo 4ce PREPARED BY AND UPON RECORDATION RETURN TO: Kutak Rock LLP 1801 California Street Suite 3000 Denver, CO 80202 Attn: Micah J. Halverson, Esq. -TRIJE AND V1lE 1riEREar CERTIFYVjE OWGINAL RiECOR D 'ORRECT c4�� �� I — J ` HSTAlt1M N� o�: _ t. 0 4 COl1HTY Of: 1r1RST AMA C N T1TI.E COMPANY ASSIGNMENT OF LEASES AND RENTS THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment ") made as of the 25"' day of January, 2016, by HOTEL SLO, LLC, a California limited liability company, and SUTTER TUSTIN SLO, LLC, a California limited liability company, each as assignor (collectively "Assignor ") to DELPHI CRE FUNDING LLC, a Delaware limited liability company (together with its successors and/or assigns, "Assignee ") - RECITALS; WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith between Assignor and Assignee, Assignee has agreed to make a Loan to Assignor in the original principal amount of up to THIRTY MILLION AND 00 /100 DOLLARS ($30,000,000) (as the same may be amended, the "Loan Agreement"); capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and WHEREAS, Assignee is not willing to make the Loan to Assignor unless Assignor executes and delivers this Assignment. NOW, THEREFORE, as an inducement to Assignee to make the Loan to Assignor, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Assignor hereby agrees as follows: I. Assignment. Assignor hereby absolutely and unconditionally assigns and grants to Assignee all of Assignor's right, title and interest in and to the following property, rights, interests and estates, now owned, or hereafter acquired by Assignor: (a) all existing and future Leases encumbering or relating to the Land (and the Improvements thereon) more particularly described in Exhibit A attached hereto; (b) All rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Action) or in lieu of rent equivalents, additional rents, revenues, issues and profits (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, deposits (including, without limitation, security, utility and other deposits), accounts and receipts payable pursuant to any Lease or otherwise from the Land and/or, the Improvements whether paid or accruing before or after- the filing by or against Assignor of any petition for relief under the 11 U,S,C.. §101 et seq., as the same may be amended from time to time (the "Bankruptcy Code "), including all claims and rights to the payment of damages arising from any rejection by a Iessee of any Lease under the Bankruptcy Code (collectively, the "Rents "); (c) all of Assignor's right, title and interest in and claims under any and all lease guaranties, letters of credit and any other credit support (a "Lease Guaranty ") given by any Person in connection with any of the Leases; (d) all proceeds from the sale or other disposition of the Leases, the Rents, the Lease Guaranties and the Rents; (e) all rights, powers, privileges, Assignment of Leases and Rents — Hotel SLO 4939- 6913 -7194 5 PREPARED BY AND UPON RECORDATION RETURN TO: Kutak Rock LLP 1801 California Street Suite 3000 Denver, CO 80202 Attn: Micah J. Halverson, Esq. INE NIIIEBY O%R�i 1FY THIS E ORiG1K+�L ORS O co���cT cnPY a� �l� o ON: COutJTY OF: IRST AM 0 N TITLE COMPANY F BY:� ASSIGNMENT OF LEASES AND RENTS THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment ") made as of the 25 "' day of January, 2016, by HOTEL SLO, LLC, a California limited liability company, and SUTTER TUSTIN SLO, LLC, a California limited liability company, each as assignor (collectively "Assignor ") to DELPHI CRE FUNDING LLC, a Delaware limited liability company (together with its successors and/or assigns, "Assignee "). RECITALS; WHEREAS, pursuant to that certain Loan Agreement dated of even date herewith between Assignor and Assignee, Assignee has agreed to make a Loan to Assignor in the original principal amount of up to THIRTY MILLION AND 00 /100 DOLLARS ($30,000,000) (as the same may be amended, the "Loan Agreement "); capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement; and WHEREAS, Assignee is not willing to make the Loan to Assignor unless Assignor executes and delivers this Assignment. NOW, THEREFORE, as an inducement to Assignee to make the Loan to Assignor, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Assignor hereby agrees as follows: I. Assignment. Assignor hereby absolutely and unconditionally assigns and grants to Assignee all of Assignor's right, title and interest in and to the following property, rights, interests and estates, now owned, or hereafter acquired by Assignor: (a) all existing and future Leases encumbering or relating to the Land (and the Improvements thereon) more particularly described in Exhibit A attached hereto; (b) All rents, rent equivalents, moneys payable as damages (including payments by reason of the rejection of a Lease in a Bankruptcy Action) or, in lieu of rent equivalents, additional rents, revenues, issues and profits (including all oil and gas or other mineral royalties and bonuses), income, fees, receivables, deposits (including, without limitation, security, utility and other deposits), accounts and receipts payable pursuant to any Lease or otherwise from the Land and/or' the Improvements whether paid or accruing before or after the filing by or against Assignor of any petition for relief under the 11 U.S.C.. §101 et seq., as the same may be amended from time to time (the "Bankruptcy Code "), including all claims and rights to the payment of damages arising from any rejection by a Iessee of any Lease under the Bankruptcy Code (collectively, the "Rents "); (c) all of Assignor's right, title and interest in and claims under any and all lease guaranties, letters of credit and any other credit support (a "Lease Guaranty ") given by any Person in connection with any of the Leases; (d) all proceeds from the sale or other disposition of the Leases, the Rents, the Lease Guaranties and the Rents; (e) all rights, powers, privileges, Assignment of Leases and Rents — Hotel SLO 4939- 6913.7194 5 options and other benefits of Assignor as lessor under the Leases and beneficiary under the Lease Guaranties, including without limitation the immediate and continuing right to make claim for, receive and collect all Rents payable or receivable under the Leases and all sums payable under the Lease Guaranties or pursuant thereto (and to apply the same to the payment of the Debt), and to do all other things which Assignor or any lessor is or may become entitled to do under the Leases or the Lease Guaranties; and (f) any and all other, rights of Assignor in and to the items set forth in clauses (al through (e) above, and all amendments, modifications, replacements, renewals and substitutions thereof. 2. Present Assignment and License Back. The assignment described in Section 1 above constitutes a present, absolute assignment of the property and rights described therein (and is not an assignment for security purposes only); rop vded, however, subject to the terms of the Loan Agreement, Assignee grants to Assignor a revocable license to collect, receive, use and enjoy the Rents and other sums due under the Leases and the Lease Guaranties, and to otherwise deal with the Leases, in accordance with the terms and conditions of the Loan Agreement effective so long as no Event of Default exists 3. Default: Remedies- During the existence of an Event of Default and the continuance thereof beyond any applicable notice and cure period; (a) the license granted to Assignor in Section 2 of this Assignment shall automatically be revoked, and Assignee shall immediately be entitled to possession of all Rents and sums due under any Lease Guaranties, whether or not Assignee enter's upon or takes control of the Property; (b) Assignee shall have the right to enter upon the Property in person, by agent or by court - appointed receiver, and shall have an absolute right to the appointment of a receiver of its choosing, to facilitate or exercise Assignee's rights and remedies hereunder; (c) Assignee, at its option, may (i) complete any construction on the Property in such manner and form as Assignee deems advisable, (ii) exercise all rights and powers of Assignor, including, without limitation, the right to negotiate, execute, cancel, enforce or modify any Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents from the Property and all sums due under any Lease Guaranties, (iii) require Assignor to pay monthly in advance to Assignee, or, any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupancy of such part of the Property as may be in possession of Assignor', and/or (iv) require Assignor to vacate and surrender possession of the Property to Assignee or to such receiver and, in default thereof, Assignor may be evicted by summary proceedings or otherwise, Assignor hereby authorizes and directs the lessees named in the Leases or any other future lessees or occupants of the Property and all guarantors of a Lease to pay over to Assignee or to such other party as Assignee directs all Rents and all sums due under any Lease Guaranties upon receipt from Assignee of written notice to the effect that Assignee is then the holden of this Assignment and that an Event of Default (as defined in the Loan Agreement) exists, and to continue so to do until otherwise notified by Assignee. Assignor grants Assignee an irrevocable power- of attorney, coupled with an interest, to take any and all of the actions set forth in this Assignment, effective during the existence of an Event of Default.. Nothing herein contained shall be construed as constituting Assignee a "mortgagee in possession" in the absence of the taking of actual possession of the Property by Assignee, In the exercise of the powers herein granted Assignee, no liability shall be asserted or enforced against Assignee, all such liability being expressly waived and released by Assignor. 4. Waivers.. Nothing contained in this Assignment and no act done or omitted by Assignee pursuant to the power and rights granted to Assignee hereunder shall be deemed to be a waiver by Assignee of its rights and remedies under the Loan Agreement, the Note, or the other Loan Documents and this Assignment is made and accepted without prejudice to any of the rights and remedies possessed by Assignee under the terms thereof. The right of Assignee to collect the Debt and to enforce any other security therefor held by it may be exercised by Assignee either prior to, simultaneously with, or subsequent to any action taken by it hereunder. Assignor hereby absolutely, unconditionally and irrevocably waives any and all rights to assert any setoff, counterclaim or crossclaim of any nature -2- Assignment of Leases and Rents — Hotel SLO 4839-6913-7194 5 whatsoever with respect to the obligations of Assignor under this Assignment, the�Loan Agreement, the Note, the other Loan Documents or otherwise with respect to the Loan in any action or proceeding brought by Assignee to collect same, or any portion thereof, or to enforce and realize upon the lien and security interest created by this Assignment, the Loan Agreement, the Note, or any of the other Loan Documents (provided, however, that the foregoing shall not be deemed a waiver of Assignor's right to assert any compulsory counterclaim if such counterclaim is compelled under, local law or rule of procedure, nor shall the foregoing be deemed a waiver of Assignor's right to assert any claim which would constitute a defense, setoff, counterclaim or crossctaim of any nature whatsoever against Assignee in any separate action or proceeding).. 5. Bankruptcy. Upon or at any time after the occurrence and during the continuance of an Event of Default beyond any applicable notice and cure period, Assignee shall have the right to proceed in its own name or in the name of Assignor in respect of any claim, suit, action or proceeding relating to the rejection of any Lease, including, without limitation, the right to file and prosecute, to the exclusion of Assignor, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in respect of the lessee under such Lease under the Bankruptcy Code. If there shall be filed by or against Assignor a petition under the Bankruptcy Code, and Assignor, as lessor under any Lease, shall determine to reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then Assignor shall give Assignee not less than ten (10) days' prior notice of the date on which Assignor shall apply to the bankruptcy court for authority to reject the Lease. Assignee shall have the right, but not the obligation, to serve upon Assignor within such ten -day period a notice stating that (i) Assignee demands that Assignor assume and assign the Lease to Assignee pursuant to Section 365 of the Bankruptcy Code and (ii) Assignee covenants to cure or provide adequate assurance of future performance under the Lease. If Assignee serves upon Assignor the notice described in the preceding sentence, Assignor shall not seek to reject the Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Assignee of the covenant provided for in clause (ii) of the preceding sentence. 6. No Liabili_t_y of Assignee. This Assignment shall not be construed to bind Assignee to the performance of any of the covenants, conditions or provisions contained in any Lease or Lease Guaranty or otherwise impose any obligation upon Assignee. Assignee shall not be liable for any loss sustained by Assignor resulting from Assignee's failure to lease space at the Property after an Event of Default or from any other act or, omission of Assignee in managing the Property after an Event of Default unless such loss is caused by gross negligence, illegal acts, willful misconduct or bad faith of Assignee, 7. No Oral Chanac. This Assignment and any provisions hereof may llut be mudified, amended, waived, extended, changed, discharged or terminated orally, or by any act or failure to act on the part of Assignor or Assignee, but only by an agreement in writing signed by the party against whom the enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. 8. Inapplicable Provisions. If any term, covenant or condition of this Assignment is held to be invalid, illegal or unenforceable in any respect, this Assignment shall be construed without such provision.. 91 GOVERNING LAW, RMSDICTION: SERVICE OF PROCESS, WITH RESPECT TO MATTERS RELATING TO THE CREATION, PERFECTION AND PROCEDURES RELATING TO THE- ENFORCEMENT OF THE LIENS CREATED PURSUANT TO THIS ASSIGNMENT, THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE. WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF), IT BEING UNDERSTOOD THAT, EXCEPT AS -3- Assignment of Leases and Rents — Hotel SL.O 4839 -6913 -7194 5 EXPRESSLY SET FORTH IN THIS PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THE LOAN DOCUMENTS, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN H 5 -1401 AND 5 -1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)) SHALL GOVERN ALL MATTERS RELATING TO THIS ASSIGNMENT AND THE OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR THEREUNDER PURSUANT TO SECTION 5 -1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. ALL PROVISIONS OF THE LOAN AGREEMENT INCORPORATED HEREIN BY REFERENCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF) PURSUANT TO SECTION 5 -1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. BORROWER (A) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS ASSIGNMENT MAY BE BROUGHT IN A COURT OF RECORD IN THE COUNTY WHERE THE PROPERTY IS LOCATED OR IN THE COURTS OF THE UNI'T'ED STATES OF AMERICA LOCATED IN SAID COUNTY, (B) CONSENTS TO THE JURISDICTION OF EACH SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (C) WANES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY SERVICE OF COPIES OF SUCH PROCESS TO BORROWER AT ITS ADDRESS PROVIDED HEREIN. NOTHING CONTAINED IN THIS ASSIGNMENT SHALL PREVENT ASSIGNEE FROM BRINGING AN ACTION, ENFORCING ANY AWARD OR JUDGMENT, OR EXERCISING ANY RIGHT OR REMEDY AGAINST BORROWER, OR AGAINST ANY SECURITY OR COLLATERAL FOR THE DEBT, WITHIN ANY OTHER COUNTY, STATE OR ANY OTHER FOREIGN OR DOMESTIC JURISDICTION„ 10. WAIVER OF TRIAL BY JURY, BORROWER AND ASSIGNEE (BY ITS ACCEPTANCE OF THIS ASSIGNMENT) HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THIS ASSIGNMENT, THE NOTE, OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ASSIGNEE, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH OF BORROWER AND ASSIGNEE AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY .IURY WOULD OTHERWISE ACCRUE. EACH OF BORROWER. AND ASSIGNEE ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER. 11. Termination of Assignrl ew.. Upon payment in full of the Debt, this Assignment shall become and be void and of no effect. 12. Notices. All notices or other• written communications hereunder shall be delivered in accordance with Section 8.6 of the Loan Agreement. 13. Exculpation. The provisions of Section 6.3 of the Loan Agreement ar -e hereby incorporated by reference into this Assignment to the same extent and with the same force as if fully set forth herein. -4- 4839-6913-11945 Assignment of Leases and Rents— Hotel SLO 14, Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and assigns forever, 15. State-Specific Provisions. The terms and conditions of this Section 15 shall control over any inconsistent terms and conditions elsewhere in this Assignment. On or after an Event of Default and the continuance thereof beyond any applicable notice and cure period, in addition to and as part of the remedies set forth in Section 3 hereof, and after the date Assignee takes one or more of the enforcement steps described below, Assignee shall be entitled to collect and receive all Rents that have accrued but remain unpaid and uncollected by Assignor or its agents or, for Assignee's benefit on that date and all Rents that accrue on or after that date. Such enforcement steps shall include one or more of the following: (i) The appointment of a receiver. (ii) Obtaining possession of the Rents, (iii) Delivery to any one or more of the tenants of a written demand for turnover of Rents in the form specified in subdivision (j) of California Civil Code Section 29:38 as then in effect or subsequently amended, a copy of which demand shall also be delivered to Assignor; and a copy of which shall be mailed to all other assignees of record of the Leases and Rents of the Property at the address for notices provided in the Leases. (iv) Delivery to Assignee of a written demand for the Rents, a copy of which shall be mailed to all other assignees of record of the Leases and Rents of the Property at the address for notices provided in the assignment or, if none, to the address to which the recorded assignment was to be mailed after recording., To the maximum extent permitted by law, Assignor waives any right, including, without limitation, any rights of Assignor under California Civil Code Section 2938(g), to require Assignee to utilize Rents for purposes other than as provided under the Loan Documents. Assignor agrees that monies received by Assignee pursuant to this Section shall be applied by Assignee to the Debt in accordance with the terms of the Loan Agreement; provided, however', that neither the application nor the failure to so apply the Rents shall result in a loss of any lien or security interest which Assignee may have in the Property or any other collateral, render the Obligations unenforceable, constitute a violation of Section 726 of the Code of Civil Procedure, or othcrvuisc limit any right available to Lender with respect to its security. (NO FURTHER TEXT ON THIS PAGE] -5- 4839 - 6913 -7194 5 Assignment of Leases and Rents — Hotel 5Lo above written. IN WITNESS WHEREOF, Assignor has executed this instrument the day and year first ASSIGNOR: HOTEL SLO, LLC, a California limited liability company By: Metrovation, LLC, a California limited liability company, its Manager By: �?.L Name: Mark Seiler Title: Manager By: Pia a Hotel Management, LLC, a California (limitkd liability company By:' Name: Paolo Pe Title: Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By: Sutter Tustin, LLC, a California limited liability company, its Manager By: C Louis Lipset, Manager 4839 -6913 -7194 Assignment of Leases and Reins — Hotel SLO A notary public or other officer completing this ;certificate verifies only the Identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Contra Costa On .January 21, 2016 before me, C . • w le— 'fd/z'- _, Notary Public, personally appeared Mark Seiler and Paolo Patrone and Louis Lipset, 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(les), 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) Comm. i 213811;8 +� VI k g NOTARY HOUG A CAU ?OASfA 4+ Sit Cuua Esp. D90 21 ;2011 EXHIBIT A Leal DesgiRdon of Property Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as Follows: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 540 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 350 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06 EAST 12.67 FEET TO A POINT; THENCE NORTH 35° 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 33° 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 53° 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 81° 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 12.75 FEET TO A POINT; THENCE NORTH 501 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 541 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 54° 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS. PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN Assignment of Leases and Rents — 4839- 6913 -7194 5 Hotel sL0 SAID CITY, DISTANT NORTH 540 6 EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 540 6 EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 33° 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N. E. CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 53° 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 36° 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 530 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W, J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK O, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS„ PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23'50" EAST, 100,1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 53° 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 33° 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2,100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING, PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF Assignment of Leases and Renu — Hotel SLO 4839 - 6913 -7194 5 CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL SEVEN: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 530 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53° 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET, PARCEL EIGHT: Assignment of Leases and Rents — Hotel SL,O 4839 -6913- 7194.5 NON - EXCLUSIVE EASEMENTS OVER WALKWAYS CREATED AS AN APPURTENANCE TO PARCELS ONE THROUGH SEVEN ABOVE IN THE "RECIPROCAL EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS" EXECUTED BY JCC MISSION, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL, RECORDED I -2S , 2016 AS INSTRUMENT NO. OF OFFICIAL RECORDS. APN(S): 002 - 416 -031 (PARCEL SEVEN), 002 -416 -035 (PARCELS ONE AND TWO) AND 002- 416 -038 (PARCELS THREE, FOUR AND SIX) Assignment of Leases and Rents — Hotel SLQ 4839- 6913 - 7194.5 1 DEBTOR'S NAME: Provide only =a Dablor name (1a or 1b) (use exact full name; do not omit modify, or abbreviate any part of the Debtors name); If any port of the Individual Doblor's name will not dl In line ib leave allot Item 1 blank check herb E] and provide the Individual Deblorinfonnallon In Item 10 of the Financing Statement Addendum (Form UCC1Ad) Hotel SLO, LLC OR 1b INOIVIDUAL'SSURNAME FIRST PERSONAL NAME lc MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY c/o Metrovation, LLC 580 Second Street, Suite 260 Oakland CA 94607 USA 2 DEBTOR'S NAME: Provide only ma Debtor name (2o or 2b) (use exact, full name: do not omit modify or abbreviate any part of the Debtors name); If any part of the Individual Debtor's name will not fit In line 2b. leave all of item 2 blank cheek here ❑ and provide the Individual Debtor Information In Item 10 of the Financing Statement Addendum (Form UCC1Ad) WE HEREBY CERTIFY THIS TO BE A TRlll; AND UCC FINANCING STATEMENT CORRECT COPY OF THE ORIGINAL RECORDED FOLLOW INSTRUCTIONS i B A NAME & PHONE OF CONTACT AT FILER (optional) Micah Halverson, Esq. (303) 297 -2400 ON; `) I ( d B E -MAIL CONTACT AT FILER (optional) COUNV OIR ' micah.halverson@lcutnkroelc.com PANY FIRS77;= C SEND ACKNOWLEDGMENT TO: (Name and Address) STATE F—Kutal( Rocl( LLP BY, -� 1801 California Street San Francisco Suite 3000 94115 Denver, CO 80202 Attention: Micah Halverson I ".J THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1 DEBTOR'S NAME: Provide only =a Dablor name (1a or 1b) (use exact full name; do not omit modify, or abbreviate any part of the Debtors name); If any port of the Individual Doblor's name will not dl In line ib leave allot Item 1 blank check herb E] and provide the Individual Deblorinfonnallon In Item 10 of the Financing Statement Addendum (Form UCC1Ad) Hotel SLO, LLC OR 1b INOIVIDUAL'SSURNAME FIRST PERSONAL NAME lc MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY c/o Metrovation, LLC 580 Second Street, Suite 260 Oakland CA 94607 USA 2 DEBTOR'S NAME: Provide only ma Debtor name (2o or 2b) (use exact, full name: do not omit modify or abbreviate any part of the Debtors name); If any part of the Individual Debtor's name will not fit In line 2b. leave all of item 2 blank cheek here ❑ and provide the Individual Debtor Information In Item 10 of the Financing Statement Addendum (Form UCC1Ad) 3 SlC;UH1zU FAARTY13 NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED 3e ORGANIZATION'S NAME Delphi CRE Funding LLC Provide only ono Secured Partv name ­13b INDIVIDUAL'S SURNAME 2a ORGANIZATION'S NAME ADDITIONAL NAME(S)IINITIAL(S) Sutter Tustin SLO, LLC OR CITY Larkspur STATE CA 2b INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)IINIT1AL(S) SUFFIX 2c MAILING ADDRESS CTTY STATE POSTAL CODE COUNTRY 2509 Pacific Avenue San Francisco CA 94115 USA 3 SlC;UH1zU FAARTY13 NAME (or NAME of ASSIGNEE of ASSIGNOR SECURED 3e ORGANIZATION'S NAME Delphi CRE Funding LLC Provide only ono Secured Partv name ­13b INDIVIDUAL'S SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)IINITIAL(S) SUFFIX 3c. MAILING ADDRESS 80 E. Sir Francis Drake Blvd., Suite 2A CITY Larkspur STATE CA JPOSTALCOOE 94939 COUNTRY USA 9 LULL -h I lZMAL; I nla nnancing atarament covers the ronawing collateral; See Exhibit A attached hereto and incorporated herein by this reference. S. Check agy if applicablo and check "lIt one box: Collateral is U held In a Trust (too UCC1Ad, Item 17 and Instrucilonq U bolnu administered by a Decedent's Porsonal Roprosanta0vo 6a Check 2aW II applicable and check Ujg one box: fib Chock s?Dly If applicable and check 20iy one box; lJ Publlc- Flnence Transaction Q Manufaclured -Home Transaction A Debtor Is a Transmitting Utility I ® Agriwllural Lien F] Non•UCC Filing 7. ALTERNATIVE DESIGNATION Of applicable): ® LesseelLeasor ® ConslanoolConalgnor ® Sullorteuyar BelloolBailor ❑ LicansealLlcansor S. OPTIONAL FILER o County, DATA: ( ) JV0 fC f� ����Q) San Luis Obispo County, CA 860102 -3 re Decd of Trust In(emallonal Assoetallon of Commercial Administrators OACA) FILING OFFICE COPY — UCC FINANCING STATEMENT (Form UCC1) (Rev 04120111) UCC FINANCING STATEMENT ADDENDUM FOLLOW INSTRUCTIONS 9 NAME OF FIRST DEBTOR: Soma as line 1a or tb on Financing Statement; If line 1 b was loll blank because Individual Debtor name did not fit. check hero I—`7 9a ORGANIZATION'S NAME Hotel SLO, LLC OR! 9b INDIVIDUAL'S SURNAME FIRST PERSONAL NAME THE ABOVE SPACE 15 FOR FILING OFFICE USE ONLY 10 DEBTOR'S NAME: Provide (toe or 10b) only 2oa additional Debtor name or Debtor name that did not Ill In line 1b or 2b of the Financing Statement (Form UCC1) (use exact full name; do not omit, modify. or abbreviate any part of the Debtor's name) and enter the matting address In line 10c OR Igo ORGANIZATION'S NAME. - - - - - -- Sutter Tustin SLO, LLC 10b INDIVIDUAL'S SURNAME - - INDIVIDUAL'S FIRST PERSONAL NAME - - -- INDIVIDUAL'S ADDITIONAL NAME(SVINITIAL(S) - SUFFIX loc MAILiNGADORESS CITY STATE ]PO6TALCODE COUNTRY 11 :1 ADDITIONAL SECURED PARTY'S NAME [] ASSIGNOR SECURED PARTY'S NAME: Provide only era name (11a or 11b) OR I la. DRGANIZATION'S NAME TT._ ......... - -�- —'!`-- 116 INDIVIOUALS SURNAME FIRST PERSONAL NAME ADDITIONAL NAME(S)ANITIAL(S) SUFFIX 11c MAILING ADDRESS CITY STATE 1POSTAILCODE COUNTRY 12 ADDITIONAL SPACE FOR ITEM 4 (Collateral): See Exhibit A attached hereto and incorporated herein by this reference. 13 ❑✓ This FINANCING STATEMENT is to be riled [for record] (or recorded) in the 114 This FINANCING STATEMENT: REAL ESTATE RECORDS (if applicable) Namo and address of a RECORD OWNER of real estate described In Item 10 (If Debtor does not have a record Inlerasl): 17 MISCELLANEOUS: covers Hanker to be cut 16 Description of real oslala: covers as-extracted collateral Is filed as a rixlure filing See Schedule 1 to Exhibit A to Financing Statement attached hereto and incorporated herein by this reference. Intemalional Association of Commercial Administrators (IACA) FILING OFFICE COPY — UCC FINANCING STATEMENT ADDENDUM (Form UCC1Ad) (Rev 04120111) EXHIBIT A EXHIBIT A TO FINANCING STATEMENT Collateral Description (Deed of Trust) Exhibit A to Uniform Commercial Code National UCC Financing Statement (Form UCC -1) ( "Financing Statement "), naming HOTEL SLO, LLC, a California limited liability company, and SUTTER TUSTIN SLO, LLC, a California limited liability company, collectively as "Debtor," and DELPHI CRE FUNDING LLC, a Delaware limited liability company, as "Secured Party," dated as of January 22, 2016. COLLATERAL DESCRIPTION, The Financing Statement includes the following described personal property in which Debtor now or at any time hereafter has any interest (collectively, the " Collateral"); (a) Land. The real property described on Schedule I attached hereto and made a part hereof (the "Land "), and all additional lands, estates and development rights hereafter acquired by Debtor for use in connection with the Land and all additional lands and estates therein which may, from time to time owned by Debtor; (b) Improvements. The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the "Improvements "); (c) Fixtures. All Equipment (as defined below) and other items attached to and/or related to the Land and/or the Improvements forming part of the Collateral that are deemed "fixtures" and/or "real property" under the law of the state where the Land is located (including, without limitation, all building or construction materials intended for construction, alteration, or repair of the Collateral) (collectively, the "Fixtures "); it being understood and agreed that the Improvements and the Fixtures are part and parcel of the Land appropriated to the use thereof and, whether affixed or annexed to the Land or not, shall for the purposes of this Financing Statement be deemed conclusively to be real estate and encumbered hereby; (d) Easements, All easements, rights- of-way or use rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and /or the Improvements and the reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Debtor of, in and to the Land and the Improvements and every part and parcel thereof, with the appurtenances thereto (collectively, the "Easements "); (e) Equipment. All "equipment" as such term is defined in the UCC (as hereinafter defined) used or installed (or intended to be used or installed) at or in connection with the Improvements or the Land (wherever located) (including, but not limited to, all machinery, equipment, furnishings, furniture, tools, appliances, fittings, apparatuses, engines, devices, pumps, pipes, plumbing, conduits, tanks, structures, and any and all systems and related items for cleaning, sprinklers, fire extinguishing, heating, cooling, ventilating, laundry, incinerating, electrical, lighting, sound, pollution control, security, disposal, sewer, utilities, data transmission, communications, paging, internet, television, and all other, structures, together with all accessions, Page A -1 4841-9793-74514 appurtenances, additions, replacements, betterments and substitutions for any of the foregoing (collectively, the "Equipment "); (f) UCC Collateral. All personal property, intangibles, general intangibles, documents, instruments, chattel paper, and accounts, as such terms are defined in the UCC (including, without limitation, all furniture, furnishings, objects of art, Equipment, supplies, contract rights, entitlements, the Clearing Account, the Cash Management Account, the Reserve Accounts (and any sums, cash, checks, drafts, securities, certificates and instruments, if any, from time to time deposited or held therein or credited thereto), money, accounts receivable, credit card receivables, franchises, licenses, certificates, permits, claims, suits, choses, approvals, plans, specifications, drawings, surveys, reports, trademarks, trade names, servicemarks, logos, copyrights, goodwill, books and records, any interest rate cap agreements or other, interest rate hedging contracts or products, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, dishware, silverware, utensils, glassware, linens, pillows, blankets, foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, mini - bars, liquor and other drink dispensers, icemakers, kitchen equipment, radios, television sets, potted plants, cutlery and dishes, food, beverages, reservation systems, and computer software), and any other property or rights constituting to the full extent that the same may be subject to the UCC, now or hereafter owned by Debtor, whether used in connection with or relating to the Property or otherwise, together with all accessories, replacements and substitutions thereto (collectively, the "UCC Collateral "); (g) Leases and Rents. All Leases, together with all extensions and amendments thereto, all income, rents, fees, payments, revenues, issues profits, royalties bonuses and other amounts payable thereunder, all guaranties of the lessees' obligations thereunder, all security deposits (whether in cash, letter of credit, securities or otherwise) provided in connection therewith, and all room rents, revenues, accounts and receivables derived from the use or occupancy of all or any portion of the Land or Improvements, credit card receivables and receipts collected from guest rooms, restaurants, bars, meeting rooms, banquet rooms and recreational facilities, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of property or rendering of services by Debtor or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others (including, without limitation, from the rental of any office space, retail space, guest rooms or other space, halls, stores, and offices, and deposits securing reservations of such space), license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales (including mini -bar revenues), service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance (collectively, the "Rents "); (h) Condemnation Awards. All Awards which may heretofore and hereafter be made with respect to the Collateral; (i) Insurance Proceeds. All proceeds and other payments payable under or in respect of any insurance policies covering or relating to the Collateral; (j) Tax Certiorari. All refunds, rebates or credits in connection with reduction in Property Taxes or Other Charges charged against the Collateral; (k) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of the foregoing including, without limitation, Insurance Proceeds and Awards, into cash or liquidation claims; Page A -2 4841-9193-74514 (1) Rights. The right, in the name and on behalf of Debtor, to appear in and defend any action or proceeding brought with respect to the Collateral and to commence any action or proceeding to protect the interest of Beneficiary in the Collateral; (m) Proceeds. All "proceeds" as such term is defined in the UCC of any of the foregoing, claims, suits, (collectively called the "Intangibles "); and (n) Other Rights. Any and all other rights of Debtor in and to the items set forth in Sections (a) through (m) above. 2. As to all of the above described personal property "UCC" shall mean the California Uniform Commercial Code, as amended or recodified from time to time. [Remainder of Page Intentionally Left Blank] Page A -3 4841-9793-74514 SCHEDULE 1 to EXHIBIT A SCHEDULE 1 TO EXHIBIT A TO FINANCING STATEMENT Description of Land Schedule I to Exhibit A to Financing Statement Description of Land. The real property referred to in Paragraph 1 of Exhibit A to this Financing Statement is located in the County of San Luis Obispo, State of California, and is described as follows: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 54° 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 35° 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06' EAST 12,67 FEET TO A POINT; THENCE NORTH 350 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 33° 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 360 221 WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 53° 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 811 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 531 38' EAST :36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 12.75 FEET TO A POINT; THENCE NORTH 50° 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 54° 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 54° 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 54° 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 54° 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N. E. CALL, 351 FEET TO THE SOUTHERLY 5 -1 4841-9793-74514 SCHEDULE I to EXHIBIT A LINE OF PALM STREET; THENCE SOUTH 53° 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 36° 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 53° 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 35° 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS, PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 531 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 33'23'50" EAST, 1001 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 530 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 53° 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 33° 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2,100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 531 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING, PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO S -2 4841-9793-74514 SCHEDULE 1 to EXHIBIT A THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL, SEVEN: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 53° 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 36° 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 81 ° 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 3 8' EAST, 36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53° 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET. PARCEL EIGHT: NON - EXCLUSIVE EASEMENTS OVER WALKWAYS CREATED AS AN APPURTENANCE TO PARCELS ONE THROUGH SEVEN ABOVE IN THE "RECIPROCAL EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS" EXECUTED BY JCC MISSION, LLC, A CALIFORNIA. LIMITED LIABILITY COMPANY, ET AL, RECORDED — _J_ --�,$ - , 2016 AS INSTRUMENT NO. _ OF OFFICIAL RECORDS. APN(S): 002 - 416 -031 (PARCEL SEVEN), 002- 416 -035 (PARCELS ONE AND TWO) AND 002 -416 -038 (PARCELS THREE, FOUR AND SIX) S -3 4841. 9793 -74514 RECORDING REQUESTED BY MAIL TAX STATEMENT AND WHEN RECORDED MAIL DOCUMENT TO: Hotel SLO, LLC and Sutter Tustin SLO, LLC c/o Steven D. Seiler, Esq. Seiler Epstein Ziegler & Applegate LLP 601 Montgomery Street, Suite 2000 San Francisco, CA 94111 WE HEREBY CERTIFY THIS TO BE A TRUE AND CORRECT COPY OF THE ORIGINAL RECORDED ON:L -: $ l (oINSTRUMENT0 0'06- (5031 -7 COUNTY OF: ,� 1 - t _C-)b iS FIRST MEFI1 AN TITLE COMPANY BY: Above This Line for Recorder's Use Only EASEMENT QUITCLAIM DEED A.P.N.: C:07-- yt to - o -31 i eoz - 4t6 -o3S ) =)Z-416-0-39 -, 03g File No.: NCS- 692048 -CC (pi The Undersigned Grantor(s) Declare(s): 1 ,(� CITY TRANSFER TAX $ to N o Co %1�S Gr7 P�O� u c) n - -Fer"j/yl DOCUMENTARY TRANSFER TAX $ SURVEY MONUMENT FEE $ — [ ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full valueless value of liens and /or encumbrances remaining at time of sale, [ ] unincorporated area; [ ] Cty of San Luis 0t !W.n and SURVEY MONUMENT FEE $ FOR A VALUABLE CONSIDERATION, receipt of which Is hereby acknowledged, ]CC Mission, LLC, a California limited liability company and TMC Mission, LLC, a California limited liability company hereby remise, release and forever quitclaim to Hotel SLO, LLC, a California limited liability company, as to an undivided 79.2 % interest and Sutter Tustin SLO, LLC, a California limited liability company, as to an undivided 20,8 % interest the following described property in the City of San Luis Obispo, County of San Luis Obispo, State of California: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 54° 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 35° 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 350 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 330 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 360 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 530 38' EAST, 12.00 FEET TO A POINT; THENCE SOUTH 360 22' EAST, 70.25 FEET TO A POINT; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 36° 22' WEST, 12.75 FEET TO A POINT, THENCE NORTH 50° 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 54° 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 54° 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. Page 1 or 5 EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS. PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 540 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 54° 6' EAST ALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS. N. E. CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N. E. CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 530 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 360 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56.36 FEET TO A POINT; THENCE NORTH 530 38' EAST AND PARALLEL WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK O, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS. PARCEL THREE. THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS i AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23'50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 530 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 530 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 330 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: INTENTIONALLY DELETED Page 2 of 5 PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL 7: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 530 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 811 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 53° 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 8° 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53° 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET. APN(S): 002 - 416 -031 (PARCEL SEVEN), 002- 416 -035 (PARCELS ONE AND TWO) AND 002- 416 -038 (PARCELS THREE, FOUR AND SIX) This deed is given to terminate and relinquish any and all right, title and interest of Grantor under and pursuant to that certain Easement recorded May 12, 1914 in Book 101 of Deeds, Page 85 of Official Records. Signed this as of this 25th day of January 2016 JCC Mission a California limited liability company ` es c Copeland, Manager TMC Mission, LLC, a California limited liability company By; opeland, Manager Page 3 of 5 File No.: NCS- 692048 -CC (pn) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF California )SS COUNTY OF San Luis Obispo On January 20, 2016_ before me, Suzanne Fir rer , Notary Public, personally appeared James C, Copeland 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) an 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 x-P- This area for official notarial seal Sl12ANHE FRYER Commission # 1974270 Notary Public - California Z7 San Luis Obispo County' MY Carom. Expires May 3, 2016 Page 4 of 5 A notary public or other officer completing this certificate verifies only the identity of the Individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF California )SS COUNTY OF San Luis Obispo On January 20, 2016 _ before me, Suzanne Fryer , Notary Public, personally appeared James C. Copeland who proved to me on the basis of satisfactory evidence to be the per_ sons) 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(les), 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 iaws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature This area for official notarlal seal. U NEPRYER on # 1974270 z blic • Calltornla v 0bispo County p'sres May 3,2016$ Page 5 of 5 BOE -502 -A (P1) REV. 12 (05-13) PRELIMINARY CHANGE OF OWNERSHIP REPORT To be completed by the transferee (buyer) prior to a transfer of subject property, In accordance with section 9803 of the Revenue and Taxation Code. A Preliminary Change of Ownership Report must be filed with each conveyance in the County Recorder's office for the county where the property is located. NAME AND MAILING ADDRESS OF BUYER/TRANSFEREE (Make necessary corrections to the printed name and mailing address) Hotel SLO, LLC and Sutter Tustin SLO, LLC FOR RECORDERS USE ONLY ASSESSOR'S PARCEL NUMBER 002- 416 -029 SELLER/TRANSFEROR ;CC Mission LLC and TMC Mission LLC BUYER'S DAYTIME TELEPHONE NUMB R (105 1 Z) 7- - zG 97 z ) A9 �?3i-�''�ca BUYER'S EMAIL ADDRESS STREET ADDRESS OR PHYSICAL LOCATION OF REAL PROPERTY 861 -863 and B77 Palm Street and 955 Morro Street San Luis Obis o, CA MAIL PROPERTY TAX INFORMATION TO (NAME) C�t)���1%2r7 /2� I / ADDRESS 5 �,ri �� ��y B r r, # 2 d CITY � N� CATS ZIP yj;�e ❑ YES ❑X NO((// This property iissf intended as my principal residence. If YES, please Indicate the date MO DAY YEAR of occupancy or intended occupancy. PART 1. TRANSFER INFORMATION Please complete all statements, This section contains possible exclusions from reassessment for certain types of transfers. YES NO L_._! ❑X A. This transfer Is solely between spouses ( addition or removal of a spouse, death of a spouse, divorce settlement, etc), ® X❑ B. This transfer is solely between domestic partners currently registered with the California Secretary of State (addition or removal of a partner, death of a partner, termination settlement; etc.). ❑ ❑X *C. This Is a transfer: ❑ between parent(s) and children) ❑ from grandparent(s) and grandchlid(ren) ❑ ❑X *D. This transfer is the result of a cotenants death. Date of death — X❑ *E, This transaction Is to replace a principal residence by a person 55 years of age or older Within the same county? ❑ YES ❑ NO ❑ ❑X *F This transaction Is to replace a principal residence by a person who is severely disabled as defined by Revenue and Taxation Code section 69 S. Within the same county? F—] YES rI NO ❑ ❑X G. This transaction Is only a correction of the name(s) of the person(s) holding title to the property (e.g., a name change upon marriage). If YES, please explain: ❑ a H The recorded document creates, terminates, or reconveys a lender's interest In the property, ❑ ❑X, I. This transaction Is recorded only as a requirement for financing purposes or to create, terminate, or reconvey a security interest (e g., cosigner). If YES, please explain: ❑ ❑ I The recorded document substitutes a trustee of a trust, mortgage, or other similar document. K This Is a transfer of property: ❑ a 1 to /from a revocable trust that may be revoked by the transferor and is for the benefit of ❑ the transferor, and /or D the transferor's spouse ❑ registered domestic partner ❑ ❑X 2 to /from a trust that may be revoked by the creator /grantor /trustor who Is also a joint tenant, and which names the other joint tenant(s) as beneficiaries when the creator /grantor /trustor dies ❑ a 3 to /from an irrevocable trust for the benefit of the ❑ creator /grantor /trustor and /or ❑ grantor's /trustar's spouse ❑ grantor's /tnistor's registered domestic partner ❑ Q L. This property Is subject to a lease with a remaining lease term of 35 years or more Including written options. ❑ ❑X M This Is a transfer between parties In which proportional interests of the transferor(s) and transferee(s) In each and every parcel being transferred remain exactly the same after the transfer. ❑ ❑X N This Is a transfer subject to subsidized low- Income housing requirements with governmentally imposed restrictions ❑ 0 *0 This transfer Is to the first purchaser of a new building containing an active solar energy system. r Please refer to the instructions for Part I Please provide any other information that will help the Assessor understand the nature of the transfer, THIS DOCUMENT IS NOT SUBJECT TO PUBLIC INSPECTION SOE -502 -A (P2) REV. 12 (05 -13) PART 2. OTHER TRANSFER INFORMATION Check and complete as applicable. A Date of transfer, If other than recording date: B. Type of transfer: Purchase ❑ Foreclosure ❑ Gift ❑ Trade or exchange ❑ Merger, stock, or partnership acquisition (Farm BOE- 100-8) �❑ Contract of sale Date of contract: L._.I Inheritance. Date of death: sale/leaseback ❑ creation of a lease ❑ Assignment of a lease ❑ Termination of a lease. Date lease began: Original term in years (including written options); _____ Remaining term In years (Induding written options); x❑ Other Please explain: TERMINATION OF EASEMENT ONLY FOR NO CONSIDERATION C. Only a partial Interest In the property was transferred, ❑ YES ❑X NO If YES, Indicate the percentage transferred: %a PART 3. PURCHASE PRICE AND TERMS OF SALE Check and complete as applicable. A. Total purchase price $ 0 B Cash down payment or value of trade or exchange excluding closing costs Amount $ C. First deed of trust @ I % Interest for years. Monthly payment $ Amount $ ❑ FHA (_Discount Points) ❑ Cal -Vet [] VA (_„_Discount Points) ❑ Fixed rate ❑ Variable rate ❑ Bank /Savings & Loan /Credit Union ❑ Loan carried by seller ❑ Balloon payment $ Due date: D. Second deed of trust @ % Interest For __years. Monthly payment $ Amount $ ❑ Fixed rate ❑ Variable rate ❑ Bank /Savings & Loan /Credit Union ❑ Loan carried by seller ❑ Balloon payment $ Due date: E. Was an Improvement Bond or other public fnancing assumed by the buyer? []YES ❑NO Outstanding balance $ F Amount, if any, of real estate commission fees paid by the buyer which are not Included in the purchase price $ G The property was purchased: ❑Through real estate broker. Broker name: Phone number: ( ) ❑ Direct from seller ❑ From a family member- Reladonshlp © Other Please explain: TERMINATION OF EASEMENT ONLY FOR NO CONSIDERATION H Please explain any special terms, seller concessions, broker /agent fees waived, financing, and any other information (e.g., buyer assumed the existing loan balance) that would assist the Assessor In the valuation of your property PART 4: PROPERTY INFORMATION A. Type of property transferred ❑ Single- family residence ❑ Multiple - family residence Number of units: ❑ Other Description: (Le , timber, mineral, water rights, etc.) Check and complete as applicable, ❑ Co -op /Own- your -own Manufactured home ❑ Condominium R Unimproved lot ❑ Timeshare ❑ Commerdal/Industrlal 5 ❑ YES [;.NO Personal /business property, or Incentives, provided by seller to buyer are Intfuded In the purchase price. Examples of personal property are furniture, farm equipment, machinery, etc Examples of Incentives are club memberships, etc. Attach list if available. If YES, enter the value of the personal /business property: $ Incentives $ C ❑ YES 0 A manufactured home is Included In the purchase price If YES, er'r he value attributed to the manufactured home: $ ❑ YES ❑ NO The manufactured home Is subject to local property tax. If NO, enter decal number: D ❑ YES [�g NO The property produces rental or other Income. If YES, the Income is from: ❑ Lea:ae /rent f � Contract ❑ Mineral rights ❑ Other: E The condition of the property at the time of sale was: ❑ Good ❑ Average NFalr Poor Please describe: CERTIFICATION I certily (or declare) that the foregoing and all information hereon, Including any accompanying statements or documents, is true and correct to the best of my knowledge and belief. SIGNATURE OF %)YERjI SF CE OR CORPORATE OFFICER DATE TEUPHON NAME OF BUYERITRANSFLREEJLL•GAL REPRESENTATIVE/CORPORATE OFFICER (PLEASE PRINT) TITLE E-MAIL ADDRESS M A-2)L S I L L cf/- /YJ451--'(41eff M k S i 7 L f'd 6 AD L, loco? The Assessor's office may contact you for addlbonal Information regarding this transaction. FirstAmerican Title Company National Commercial Services +i� gl��• 1850 Mt Diablo Blvd., Suite 300 • Walnut Creek, CA 94596 Office Phone :(925)927- 21000ffice Fax:(714)824 -5640 Seller's Final Settlement Statement Property: 861 -863 and 877 Palm Street and, 955 Morro File No: NCS- 692048 -CC Street, San Luis Obispo, CA Officer: Pamela Nicolini /pn Settlement Date: 01/25/2016 Charge Description Disbursement Date: 01/25/2016 Consideration: Print Date: 01/25/2016, 3:13 PM Buyer: Hotel SLO, LLC as to 79.2% Interest; West Coast Accommodator, Inc. as Qualified Intermediary for Adjustments: Sutter Tustin SLO, LLC as to 20.8% interest Address: c/o Metrovation 580 Second St #260, (Attn: Lina Conocono), Oakland, CA 94607 Seller: City of San Luis Obispo Address: 990 Palm Street, San Luis Obispo, CA 93401 Lender: Delphi CRE Funding LLC Address: 3,666,418.00 3,666,418.00 New Loan No.: Charge Description Seller Charge Seller Credit Consideration: Total Consideration j 473,368.00 Adjustments: Payment for Parking Mitigation 2,193,050 00 Security Deposit to City per PSA 1,000,000.00 Cash (X To) ( From) Seller 3,666,418.00 Totals 3,666,418.00 3,666,418.00 Proration of tenant rents /tenant security deposits will be handled OUTSIDE OF ESCROW. No Proration of Taxes through escrow. Buyer will be responsible to pay all real property taxes directly to San Luis Obispo County Tax Collector from close of escrow forward. Any refund of overpayment due buyer shall be disbursed to Hotel SLO, LLC only. Page 1 of 1 d WE HEREBY CERTIFY THIS TO BE A I il1L Aik ) When recur ed return to: CORRECT COPY OF THE ORIGINAL RECORIJED Steven D. Seiler, Esq, 5-_X1(0 ZO 00317x` Seiler Epstein Ziegler & Applegate LLP ON: INSTRUMENT d 601 Montgomery Street, Suite 2000 COUNTY OF: 4u 0 66 6, ?-- ---. -- San Francisco, CA 94111 FIRST ITLE CO,&I 'AIV BY: GRANT DEED For valuable consideration, the receipt of which is hereby acknowledged, Grant CITY OF SAN LUIS OBISPO, a municipal corporation and a chartered city organized and existing under the Constitution of the State of California ( "Grantor "), hereby grants to HOTEL SLO, LLC, a California limited liability company, as to a 79.2% undivided interest, and SUTTER TUSTIN SLO, LLC, a California limited liability company, as to a 20.8% undivided interest, as tenants -in- common (collectively, the "Grantee "), certain real property (herein called "Palm Development Site ") specifically described on the attached Exhibit A incorporated herein by this reference, on the terms and conditions set forth herein. The Palm Development Site is conveyed to carry out the public purposes of that certain Agreement of Purchase and Sale —Palm Development Site (as amended, the "Agreement "), a public document in the records of the Clerk of City of San Luis Obispo, dated December 19, 2011, which was amended by that certain First Amendment to Agreement of Purchase and Sale -- Palm Developments Site, dated as of .ianuary 19, 2016. The Agreement was approved by the City Council of the City of San Luis Obispo on December 13, 201 L Palm Development. Site Restrictions and Conditions: Until the Project (as that term is defined in the Agreement has been substantially completed in the time and manner required by the Agreement or as otherwise provided herein, the terms set forth in this paragraph and the following paragraphs numbered I through 8 (hereinafter, the "Palm Development Site Restrictions ") shall govern the ownership and use of the Palm Development Site. Grantor, upon request of the owner of the Palm Development Site and submission to Grantor of evidence reasonably satisfactory to Grantor that the Project has been substantially completed in accordance with the Agreement, shall deliver the Certificate of Completion in substantially the form attached hereto as Exhibit B (the "Certificate of Completion "), which is suitable for recordation in the Official Records and the terms of these Palm Development Site Restrictions shall automatically cease and terminate. Grantor and Grantee agree as follows: course of'business in the Project for occupancy by retail, restaurant, office or other commercial businesses following completion of the Project.. In the absence of specific written agreement by Grantor, no such unauthorized sale, txansfer, conveyance or assignment of the Paine Development Site shall be deemed to relieve Grantee or any other party from any obligations under these Palm Development Site Restrictions; d. Grantee shall not place or suffer to remain undischarged on the Palm Development Site for more than sixty (60) days after notice from Grantor any lien or encumbrance other than a Mortgage unless such lien or encumbrance, or the amount thereof, is being contested in good faith by appropriate proceedings diligently conducted; e, Grantee shall pay prior to delinquency all real property taxes and assessments assessed and levied on or against the Palm Development Site subsequent to the conveyance of the Palm Development Site to Grantee by Grantor unless such tax or assessment is being contested in good faith by appropriate proceedings diligently conducted; f: Grantee shall remove, or shall have removed, any levy or attachment made on the Palm Development Site, or shall assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder unless such levy or attachment, or the amount thereof, is being contested in good faith by appropriate proceedings diligently conducted; g. if Grantee shall fail perform or observe any term or covenant in any loan document or other obligation secured by the Mortgage, Grantee shall cure such failure within sixty (60) days after notice thereof to Grantee from the Mortgage Lender; h. Grantee, its successors and assigns, and any successor -in- interest to the Palm Development Site shall hold the Palm Development Site as one parcel and shall not subdivide the Palm Development Site without the prior written consent of Grantor; and i. Grantee shall cure any violation of the provisions of this paragraph 1 within 60 days after the date of receipt of written notice of such violation by Grantor to Grantee, or, if such violation is of a nature that it cannot be cured within 60 days, then Grantee shall have commenced to cure such violation within 60 days after the date of receipt of written notice of such violation and shall diligently continue to act to cure such violation. Grantor shall provide Mortgage Lender with notice of the breach or default by Grantee hereunder (the "Default Notice "). After Mortgage Lender receives a Default Notice, Mortgage Lender shall have a period of thirty (30) days beyond the time available to Grantee hereunder -or the Agreement (whichever is longer) in which to cure the breach or default by Grantee. Mortgage Lender shall have no obligation to cure (and shall have no liability or obligation for not curing) any breach or default by Grantee, except to the extent that Mortgage Lender agrees or undertakes otherwise in writing. In addition, as to any breach or default by Mortgage Lender the cure of which requires possession and control of the Palm Development Site, Mortgage Lender's cure period shall continue for such additional time as Mortgage Lender may reasonably require to either: (i) obtain possession and control of the Palm Development Site with due diligence and thereafter cure the breach or default with reasonable diligence and continuity; or (ii) obtain the appointment of a period, as to Mortgage Lender or any owner of the Palm Development Site who has acquired the Palm Development Site pursuant to a Mortgage Lender's exercise of its remedies under the relevant loan documents or pursuant to a deed given in lieu of the exercise of such remedies (a "Successor Owner "). Further, Grantor shall forbear from exercising its rights and remedies to enforce the Power of Termination from the time Grantor has received the Mortgage Default Notice and thereafter during the time that Mortgage Lender is diligently enforcing Mortgage Lender's rights and remedies against Grantee under the Mortgage and other loan documents, including without limitation, sending default notices, efforts to enter into a loan workout or modification, acceleration of the loan, foreclosure or deed in lieu of foreclosure and defending Mortgage Lender's rights under Grantee's bankruptcy proceedings. Upon the transfer of title to the Mortgage Lender or any Successor Owner and the resulting termination of these Palm Development Site Restrictions pursuant to this paragraph, the Grantor' agrees to execute and record in the Official Records a notice that these Palm Development Site Restrictions have been terminated in form and substance reasonably satisfactory to then owner of the Palm Development Site. Nothing contained herein shall be deemed to obligate the holder of the Mortgage, its successors or assigns, or any Successor Owner to undertake the construction and development of the Project.. Notwithstanding the foregoing, if a Successor Owner subsequently undertakes to construct the Project, then such Successor Owner, shall diligently pursue such construction to completion_ 6. Grantor, in the event of any breach of any covenant in these Palm Development Site Restrictions, shall have the right to exercise all the rights and remedies, and to maintain any action at law or suits in equity or other proper proceedings to enforce the curing of such breach. 7� The covenants contained in these Palm Development Site Restrictions shall be interpreted without regard to technical classification or designation, and shall not benefit or be enforceable by any person, fnm, or corporation, public or private, except Grantor and Grantee and their respective successors and assigns. 8. In the event any action is brought to enforce, modify or interpret the provisions of these Palm Development Site Restrictions, neither party shall be entitled to attorneys' fees or court costs in connection with such action. If any clause, sentence or other portion of these Palm Development Site Restrictions shall be or become illegal, unenforceable or void for any reason, the remaining portion shall continue in full force and effect. [remainder- of page intentionally left blank] nd Ik notary public or other officer completing this Fertificate verifies only the identity of the jindividual who signed the document to which this ..ertiFcate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Contra Costa On January 21, 2016 before me, S°AI Notary Public, personally appeared Mark Seller and Paolo Patrone and Louis Upset, 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) C. J. WILSON s� � Comma 2135956 " Ko-r,��r PuBUC•c�uFo-�K�� � CuKT1G COSTA COGKf7 � MT Com Em W. 21, IM "; Exhibit A Legal Description of the Palm Development Site EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS, PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89:65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23'50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 53° 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0,56 FEET TO THE MOST SOUTHERLY CORNER. OF SAID LOT; THENCE NORTH 330 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0,35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, PARCEL FIVE: INTENTIONALLY DELETED PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL 7: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 53° 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO Page 2 of 3 Exhibit B Certificate of Completion RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Certificate of Completion City of San Luis Obispo, a municipal corporation and a chartered city organized and existing under the Constitution of the State of California ( "Grantor "), hereby certifies with respect to Section 7.01 of that certain Agreement of Purchase and Sale — Palm Development Site, dated as of December 2011, which was amended by that certain First Amendment to Agreement of Purchase and Sale -- Palm Developments Site, dated as of January _, 2016, executed by Hotel SLO, LLC, a limited liability company and Sutter Tustin SLO, LLC, a California limited liability company, as tenants -in- common (collectively, the "Grantee ") in favor of Grantor, and that certain Grant Deed recorded in the Official Records of the County of San Luis Obispo County on 200_, as document number , with respect to the real property more specifically described in Exhibit I attached hereto (collectively, the "Palm Development Site Restrictions "), as follows: I. The Project has been substantially completed in accordance with the Permits; and 2. All covenants and obligations of Grantee and its successors and assigns under the Palm Development Site Restrictions, including without limitation the right of reverter and power of termination of Grantor, have ceased and terminated. All capitalized terms not otherwise defined in this Certificate of Completion shall have the meaning given in the Palm Development Site Restrictions. This Certificate of Completion has been duly executed by an authorized person on behalf of Grantor as of -, 200_. GRANTOR: CITY OF SAN LUIS OBISPO, a municipal corporation and Charter City By: Its: APPROVED: City Attorney City of San Luis Obispo BOE -502 -A (P2) REV: 12 (05 -13) PART 2. OTHER TRANSFER INFORMATION Check and complete as applicable. A. Date of transfer, if other than recording date: B. Type of transfer: I X I Purchase ❑ Foreclosure ❑ Gift []Trade or exchange ❑ Merger, stock, or partnership acquisition (Form BOE- 100 -B) ❑ Contract of sale. Date of contract: ❑ Inheritance. Date of death: ❑ sale/leaseback ❑ Creation of a lease ❑ Assignment of a lease ❑ Termination of a lease: Date lease began: Original term in years (including written opflonsr _ Remaining term in years (including written opdonst ❑ Other Please explain: C Only a partial interest in the property was transferred ❑ YES PART 3. PURCHASE PRICE AND TERMS OF SALE Q NO If YES, indicate the percentage transferred: Check and complete as applicable, A. Total purchase price $ 473,3fig.D0 B Cash down payment or value of trade or exchange excluding dosing costs Amount $ 11/21 C First deed of trust @ _% Interest for years. Monthly payment $ Amount $ 3 1 &V X0 a ❑ FHA (_Discount Points) ❑ Cal-Vet ❑ VA (— Discount Points) 7 Fixed rate ❑ Variable rate 6eV4 iri,,17,44 ❑ Bank /Savings & Loan /Credit Union ❑ Loan carried by seller iCG�IiV fi7lr7� sT El Balloon payment $_ Due date: i�Js��`s D Second deed of trust @ % interest for _years. Monthly payment $ Amount $ ❑ Fixed rate ❑ Variable rate ❑ Bank /Savings & Loan /Credit Union ❑ Loan carried by seller ❑ Balloon payments __ Due date: E Was an Improvement Bond or other public financing assumed by the buyer? ❑YES D<NO Outstanding balance $ F. Amount, if any, of real estate commission fees paid by the buyer which are not included in the purchase price $ G. The property was purchased: ❑ Through real estate broker, Broker name: Phone number: .Direct from seller ❑ From a family member - Relationship ❑ Other Please explain: H Please explain any special terms, seller concessions, broker /agent fees waived, financing, and any other Information (e.g , buyer assumed the existing loan balance) that would assist the assessor in the valuation of your property. PART 4: PROPERTY INFORMATION Check and complete as applicable. A Type of property transferred [❑ single- family residence ❑ Co -op /Own -your -own ❑ Manufactured home ❑ Multiple- family residence Number of units: ❑ Condominium ❑ Unimproved lot ❑ Other Description: (i.e;, timber, mineral, water rights, etc) ❑ Timeshare ® Commercial /Industrial B ❑ YES g NO Personal /business property, or incentives, provided by seller to buyer are included in the purchase price, Examples of personal property are furniture, farm equipment, machinery, etc Examples of incentives are club memberships, etc. Attach list if available. If YES, enter the value of the personal /buslness property: g Incentives $ C. ❑ YES [)§ NO A manufactured home is Included In the purchase price. If YES, enter the value attributed to the manufactured home: $ ❑ YES ❑ NO The manufactured home Is subject to local property tax If NO, enter decal number: D ❑ YES M NO The property produces rental or other income If YES, the income Is from: ❑ Lease /rent 0 Contract ❑ Mineral rights ❑ Other: E The condition of the property at the time of sale was: ❑ Good ❑ Average 'M.Fair Poor Please describe: CERTIFICATION I cc'tify (or declare) that the foregoing and all information hereon, including any accompanying statements or documents, is hve and correct to the best of my NAM VF SOYERfTI A4oio OR CORPORATE OFFICER DATE REEILEGAL REPRESENTATIVE /CORPORATE OFFICER (PLEASE PRINT) TITLE The Assessor's office may contact you for additional Information r gardinq this i tcrnvwc ( !y 3oZ. -2QQfoQ E A]U � pORCS5 ,C 4 C s L L4,W action. , 00 ry Project, and each owner having any interest in this Agreement derived in any manner through any Tenant -in- Common or Successor. This Memorandum may be executed in any number of original or telecopy counterparts, each of which will be effective on delivery and all of which together will constitute one binding agreement of the parties. Any signature page of the Memorandum may be detached from any executed counterpart of the Memorandum without impairing the legal effect of any signatures and may be attached to another counterpart of the Memorandum that is identical in form to the document signed (but that has attached to it one or more additional signature pages), [Signature Page Follows] z 4848 - 8628 -6636 2 A notary public or other officer completing this pertifscate verifies only the identity of the individual who signed the document to which this 'certificate Is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Contra Costa On _]anuary %J ` � ' . , . , Notary Public, personally appeared Mark Sgilelr end Paolo Patrone and Lousy E inset, 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 slgnature(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 PEPJURY under the laws of the State of California that the foregoing paragraph is true and correct WITNESS my hand and official s al. (S Signature (Seal) e l ) C. �. wIi.soH ++y�� COMMJ 2#3516& �p � ` n c >PDIARY iUBLIC- CAUFORHIA U! M Caw CoslAco r36f9', EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO, 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 531 38' EAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 33° 23' 50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 5311 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 330 16'30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 531 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, SPATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: [INTENTIONALLY DELETED] PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, ET UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL 7: ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN L U IS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 530 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; 4848- 8628 -6636 2 SELLER'S CERTIFICATION OF NON - FOREIGN STATUS UNDER FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ( "FIRPTA ") (26 U.S.C. 1445) File No: NCS- 692048 -CC January 15, 2016 All items in this form must be completed by each seller. All sellers must have a taxpayer identification number (TIN) even if sellers CANNOT provide this certification and FIRPTA withholding must be done. A TIN is not an indication that the seller is a resident alien or U.S. Citizen. Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. THIS SECTION FOR ENTITY TRANSFEROR: For U.S. tax purposes (including Section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by the undersigned, the undersigned hereby certifies the following on behalf of Transferor: 1. Transferor IS ( ) IS NOT ( X ) a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations) (if you are a foreign entity, withholding will be done unless another exemption applies); 2. Transferor IS ( ) IS NOT ( X ) a disregarded entity as defined in Section 1.1445- 2(b)(2)(iii); 3. Transferor's U.S. employer identification number is _956000781 4. Transferor's office address is 990 Palm St., San Luis Obispo, CA 93401 Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Transferor. City of San Luis Ui)po,AmunicipaI corporation Print Nak,e: Katie Its:City Manager OWNER'S AFFIDAVIT The undersigned first being duly sworn, deposes and says: 1. That they are the owner of the certain real property in the State of California, described in your Commitment for Title Insurance or Preliminary Title Report No. NCS- 692048 -cc Pro e : 861 -863 and 877 Palm St, and 955 Morro St, San Luis Obispo, CA 2. That the land is improved by a: PUBLIC PARKING LOT AT 861 -863 AND 877 PALM ST.; OFFICE BUILDING AND PARKING LOT AT 955 MORRO ST. 3. First American Title Insurance Company (further referred to as "First American ") has been requested to issue a form of policy of title insurance showing as an exception to title in Schedule B therein all existing leases affecting the real property referred to above and described in the Commitment /Preliminary Title Report issued in connection with this transaction. In addition to any other requirements it may have, First American has requested that the undersigned provide it with a certified list of all of the lessees under existing leases. Therefore, in response to such request made by First American, the undersigned hereby declares that the rent roll attached hereto as Exhibit "A ", represents all of the lessees under all subsisting leases affecting the subject property. The undersigned also declares that to the best of their knowledge, no leases contain provisions for either options to purchase or the rights of first refusal, or both, other than: NONE (Insert Info. or Specify "NONE ", as applicable) and First American and Buyer /Borrower have been provided with copies of all the leases, including any modifications and amendments thereto. 4. That there have been no repairs, work of improvements or materials furnished to the premises within 90 days, except _NONE BY OWNER. (Insert Info. or Specify "NONE ", as applicable.) That the work of improvement, if any: O Started on O Was completed on Will be completed on _____ 5. That there are no unpaid bills for labor or material because of any improvements made to the above premises, except: NONE BY OWNER (Insert Info. or Specify "NONE ", as applicable.) 6. That there is no one in possession of, or has access to the premises other than () The undersigned () Tenants based only on month -to -month rental agreements (X) Lessees based upon existing leases shown on the rent roll attached hereto 7. That no person(s) other than those mentioned above and in the Commitment /Preliminary Title Report have any rights, easements, licenses, or agreements allowing them to use, encroach on, or travel over said real property except: 1970 ENCROACHMENT ,PERMIT FOR PRIVATE IMPROVEMENTS ON PUBLIC PROPERTY THAT DO NOT APPEAR TO EXIST AT THIS TIME . MINOR ENCROACHMENT OF ADJACENT BUILDING ON PALM ST.' 1959 FIRE ESCAPE EASEMENT FOR ADJACENT BUILDING ON PALM ST. 1914 EASEMENT (Insert Info. or Specify "NONE ", as applicable.) 8. That the undersigned has not received any supplemental tax bill which is unpaid. 9. The undersigned is not aware of any release reports or commitment statements which have been issued under California Civil Code 850, et seq. 10. That this Affidavit is given for the purpose of inducing First American Title Insurance Company and its Agents, Offices and Subsidiaries to issue its Policy(ies) of Title Insurance which may provide coverage as to the items mentioned above and that the statements made herein are true and correct to my /our own knowledge. 11. The undersigned acknowledge that they have read the foregoing and fully understand the legal aspects of any misrepresentation and /or untrue statements made herein and indemnify and hold harmless First American Title Insurance against liability occasioned by reason of reliance upon the statements made herein. 12. Grantor has not and will not, for the period commencing on current prelim /commitment date through the recording of the Deed transferring or encumbering title to the Property to the Grantee (such period is called the "Gap Period "), encumber, cause any defect to appear in the title to the Property or make any conveyance of all or any part of the Property except for the documents executed in favor of, or at the request of Grantee. Grantor agrees to hold harmless and indemnify First American Title Insurance Company ('Title Company ") against all reasonable costs, expenses and attorneys' fees suffered or incurred by Title Company as a result of the failure of Grantor, upon receipt of written notice from the Title Company, to promptly remove, bond or otherwise dispose of any such encumbrance, defect or conveyance that may arise or be filed against the Property as a result of any act or omission of the Grantor during the Gap Period. 13. The undersigned certifies the property is not subject to any additional Assessments and /or Dues not collected with the regular County property taxes. 14. No produce or other food commodities as described under The Perishable Agricultural Commodities Act, 1930 (7 U.S.C. § §499a, et seq.) or the Packers and Stockyards Act (7 U.S.C. § §181 et seq.) or under similar state laws have been purchased by the undersigned. Signed this 21�7' day of January 2016 Property Owner: City of �arq Luis Obi p i a rjVnicipal corporation By: Print Ndme: KATIE LICHTIG Its: CITY MANAGER RENT ROLL - EXHIBIT "A" (COMPLETE ALL APPLICABLE INFORMATION BELOW) () There are NO tenants, written or unwritten lease or rental agreements () Residential Tenants based on residential rental agreements (x ) Leases as described below or attached hereto 1. STANDARD INDUSTRIAL /COMMERCIAL SINGLE TENANT LEASE -NET BETWEEN CITY OF SAN LUIS OBISPO, A MUNICIPAL CORPORATION AND CHARTER CITY AS LANDLORD AND SLO CHINATOWN LLC, A CALIFORNIA LIMITED LIABILITY COMPANY AS TENANT DATED DECEMBER 19, 2011 REGARDING 955 MORRO ST. 2. STANDARD SUBLEASE INDUSTRIAL /COMMERCIAL SINGLE - TENANT LEASE - GROSS BETWEEN SLO CHINATOWN AS SUBTENANT AND CAL POLY CORPORATION, A CALIFORNIA CORPORATION AS SUBTENANT REGARDING 955 MORRO ST., DATED MAY 25, 2012 REGARDING 955 MORRO 3. PARKING LEASE BETWEEN SELLER AND BUYER TO BE HANDLED THROUGH ESCROW REGARDING 861 -863 AND 877 PALM ST. TAXABLE YEAR ■ CALIFORNIA FORM 2016 Real Estate Withholding Certificate 593 -C Part I — Seller /Transferor Return this form to your escrow company. Name SSN or ITIN City of San Luis Obispo, a municipal corporation and charter city Spouse's /RDP's name (if jointly owned) Spouse's /RDP's SSN or ITIN (if jointly owned) Address (apt. /ste., room, PO Box, or PMB no.) [T] FEIN ❑ CA Corp no. ❑ CA SOS file no. 990 Palm Street 956000781 City (If you have a foreign address, see instructions.) State ZIP Code Ownership Percentage San Luis Obispo CA 93401 100 Property address (if no street address, provide parcel number and county) 861 -863 and 877 Palm Street and 955 Morro Street San Luis Obispo, CA To determine whether you qualify for a full or partial withholding exemption, check all boxes that apply to the property being sold or transferred. (See instructions) Part II — Certifications which fully exempt the sale from withholding: 1. ❑ The property qualifies as the seller's /transferor's (or decedent's, if sold by the decedent's estate or trust) principal residence within the meaning of Internal Revenue Code (IRC) Section 121. 2. ❑ The seller /transferor (or decedent, if sold by the decedent's estate or trust) last used the property as the seller 's /transferor's(decedent's) principal residence within the meaning of IRC Section 121 without regard to the two -year time period. 3. ❑ The seller /transferor has a loss or zero gain for California income tax purposes on this sale. To check this box you must complete Form 593 -E, Real Estate Withholding- Computation of Estimated Gain or Loss, and have a loss or zero gain on line 16. 4. L The property is being compulsorily or involuntarily converted and the seller /transferor intends to acquire property that is similar or related in service or use to qualify for nonrecognition of gain for California income tax purposes under IRC Section 1033. S. ❑ The transfer qualifies for nonrecognition treatment under IRC Section 351 (transfer to a corporation controlled by the transferor) or IRC Section 721 (contribution to a partnership in exchange for a partnership interest). 6. i The seller /transferor is a corporation (or a limited liability company (LLC) classified as a corporation for federal and California income tax purposes) that is either qualified through the California Secretary of State (SOS) or has a permanent place of business in California. 7. ❑ The seller /transferor is a California partnership or a partnership qualified to do business in California (or an LLC that is classified as a partnership for federal and California income tax purposes and is not a single member LLC that is disregarded for federal and California income tax purposes). 8. ❑X The seller /transferor is a tax - exempt entity under California or federal law. 9. ❑ The seller /transferor is an insurance company, individual retirement account, qualified pension /profit sharing plan, or charitable remainder trust. Part III — Certifications that may partially or fully exempt the sale from withholding: Real Estate Escrow Person (REEP): See instructions for amounts to withhold. 10. ❑ The transfer qualifies as a simultaneous like -kind exchange within the meaning of IRC Section 1031. 11. ❑ The transfer qualifies as a deferred like -kind exchange within the meaning of IRC Section 1031. 12. ❑ The transfer of this property is an installment sale where the buyer /transferee is required to withhold on the principal portion of each installment payment, Copies of Form 593 -I, Real Estate Withholding Installment Sale Acknowledgement, and the promissory note are attached. Seller /Transferor Signature To learn about your privacy rights, how we may use your information, and the consequences for not providing the requested information, go to ftb.ca.gov and search for privacy notice. To request this notice by mail, call 800.852.5711. Under penalties of perjury, I hereby certify that the information provided above is, to the best of my knowledge, true and correct. If conditions change, I will promptly inform the withholding agent, I understand that I must retain this form in my records for 5 years and that the Franchise Tax Board may review relevant escrow documents to ensure withholding compliance. Completing this form does not exempt me from filin Cali rnia income or franchise tax return to report this sale. City of San Luis Obispo / City Manager Katie Lichtig Seller's /Transferor's Name and Title Seller's /Transferor's Signature a Date January 20,2016 Spouse's /RDP's Name Spouse's /RDP's Signature ` Date Seller/ If you checked any box in Part II , you are exempt from real estate withholding. Transferor If you checked any box in Part III, you may qualify for a partial or complete withholding exemption. Except as to an installment sale, if the seller /transferor did not check any box in Part II or Part III of Form 593 -C, the withholding will be 3 1/3% (.0333) of the total sales price or the optional gain on sale withholding amount from line 5 of Form 593, Real Estate Withholding Tax Statement. If the seller /transferor does not return the completed Form 593 and Form 593 -C by the close of escrow, the withholding will be 3 1/3% (.0333) of the total sales price, unless the type of transaction is an installment sale. If the transaction is an installment sale, the withholding will be 3 1/3% (,0333) of the first installment payment, If you are withheld upon, the withholding agent should give you one copy of Form 593. Attach a copy to the lower front of your California income tax return and make a copy for your records. 7131163 F_ Form 593 -C C2 2015 ■ NCS g20A When recorded return to: Thomas M. Copeland P.O. Box 12260 San Luis Obispo, CA 93406 WE HEREBY CERTIFY THIS TO BE A TRUE AND CORRECT COPY OF THE ORIGINAL RECORDED ON: a5_ ~INSTRUMENT# Z,,r- 66 _oa �7 .L COUNTY Or %_� `� r FIR l AN7ITLECOMPANY 9Y: RECIPROCAL EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS THIS RECIPROCAL. EASEMENT AGREEMENT FOR PEDESTRIAN PLAZAS AND WALKWAYS (this "Agreement ") is made as of January 25 , 2016, by JCC Mission, LLC, a California limited liability company, and TMC Mission, LLC, a California limited liability company (collectively, the "Monterey Owner ") and Hotel SLO, LLC, a California Limited Liability Company, and Sutter Tustin SLO, LLC, a California limited liability company ( "Palm Owner ") The Monterey Owner and the Palm Owner will sometimes be referred to collectively as the "Owners" or individually, each as an "Owner ". The term "Monterey Owner" shall include each and every party which, after the date of this Agreement, becomes the owner of any portion of the Monterey Site as said term "Monterey Site" is defined below.. The term "Palm Owner" shall include each and every party which, after the date of this Agreement, becomes the owner of any portion of a Palm Site as said term "Palm Site" is defined below. The term "Owner" shall include any party which, after, the date of this Agreement, becomes the owner of any a Project Property as said term "Project Property" is defined below. RECITALS A. This Agreement concerns real property located in the City of San Luis Obispo ( "City ") on which the Monterey Owner and the Palm Owner intend to develop, or cause to be developed, a multi -use project (the "Project ") for retail, housing, hospitality, restaurant, and office uses. The Project is located on the property described on Exhibit A, which is generally bound by Monterey Street, Chorro Street, Palm Street and Morro Street (although not all of the property in that block is included in the Project) in the city of San Luis Obispo, California, The Project consists of two areas, the Monterey Development Site (the "Monterey Site ") and the Palm Development Site (the "Palm Site "), each of which is shown on Exhibit B attached hereto.. The Monterey Site and the Palm Site may each be divided into more than one parcel of real property, including condominium units and airspace rights, which are included in the Project and the Monterey Site and Palm Site will sometimes individually be called a "Project Property" and collectively be called the "Project Properties" herein. B. Certain of the Project Properties may be residential, office or retail condominium projects consisting of individual condominium units (each a "Condominium Unit ") and for which there is a duly appointed and acting owners' association (each, an "Owner's Association "), C. The Project includes certain plazas and walkways identified on Exhibit C attached hereto (collectively, the "Walkways ") in the Project that will be owned, operated and managed pursuant to this Agreement. For the avoidance of doubt, there may be other plazas and walkways in the Project which are not identified on Exhibit C and such plazas and walkways are not subject to the term of this Agreement. GRANT Section 1. Intention and Purpose of this Agreement. A. Purpose„ The Owners wish to develop the Walkways as a privately owned and privately operated and maintained pedestrian mall and coordinate the uses which the Owners make of the Walkways. The Owners intend the integrated development of the Walkways to benefit all the Project Properties mutually.. The Owners will improve the Walkways (hereinafter, the "Planned Walkway Improvements ") in accordance with the development plan for the Walkways as shown on the initial set of Approved Drawings (as defined in Section 2.A. below) for each Project Property ( "Walkways Improvement Plan "). Except as provided below, no Owner other than Monterey Owner shall, without Monterey Owner's prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, make any alterations of, or additions to, the Planned Walkway Improvements. At its cost, Monterey Owner shall construct the Planned Walkway Improvements on the Monterey Site and the Palm Owner shall construct the Planned Walkway Improvements on the Palm Site. B. Adoption of Restrictions. Accordingly, the Owners therefor agree to and assume the mutual obligations set forth in this Agreement including a fair and equitable allocation of the expenses which the upkeep and preservation of the Walkways will foreseeably entail (the "Obligations ") and hereby fix and establish the restrictions ( "Restrictions ") set forth in this Agreement, upon and subject to which the Walkways shall be operated, used, maintained, improved and preserved. The Obligations and Restrictions shall constitute covenants which run with the Project Properties. The Obligations and Restrictions shall bind the Project Properties and inure to their benefit. The Obligations and Restrictions shall constitute mutual equitable servitudes upon the Project Properties. The benefits of the Obligations and Restrictions shall be appurtenant to each Project Property as a dominant tenement and the burdens of the Restrictions shall encumber each Project Property as a servient tenement. The Obligations and Restrictions and all the provisions of this Agreement shall inure to the benefit of and shall bind the successors and assigns of the Owners in their respective ownerships of the Project Properties. -2- Section 2. No Build Zone; Use and Operation of the Walkways. A.. No Build Zone. No Owner shall construct any building within the Walkways which increases the footprint thereof except in accordance with construction drawings already approved, or approved at a future time, by the City (the "Approved Drawings "). B. Permitted and Prohibited Uses. The Walkways are hereby reserved for the sole and exclusive use of the Owners and their respective tenants, subtenants, licensees, contractors, agents and employees, and the customers, invitees and employees of such tenants, subtenants, licensees, contractors and agents. Walkways may be used for the following uses and for no other uses unless this Agreement expressly permits such other uses: a walkway for pedestrian traffic; benches; deliveries using hand carts; directional and informational signs; landscaping including planter boxes, floor pots and hanging pots; utility installations, which, so far as practical, shall be placed underground; waste disposal facilities for invitees who use the Walkways; security video cameras; and uses described or depicted in the Walkways Improvement Plan and the rules and regulations attached hereto as Exhibit D (hereinafter, collectively the "Improvement Standards "). The Owners also agree, provided that it is in compliance with any applicable law or regulation, that the Palm Site may use the southwest portion of the Palm Site (not included in the Walkways) as identified in Exhibit B for private events, meetings and receptions. The Owners of the Palm Site shall be required to thoroughly clean up all waste, garbage and other debris that emanates from such private event, meeting and /or reception within six hours of the completion of such event, meeting and /or reception, Tables, chairs, umbrellas and other furniture or equipment for outdoor food and beverage service may be placed or used on the Walkways only if such use (i) conforms to all applicable City requirements, (ii) has been approved in writing by Manager (as defined in paragraph 2C below) in its reasonable discretion (as defined below), who may condition its approval upon the agreement of the Owner or person seeking the approval to pay directly for any associated costs such as cleaning, disposal ofwaste, and wear and tear; and (iii) so long as such use conforms to any other applicable requirements of this Agreement, including the Improvement Standards.. Any Owner (or any person or entity whose rights derive from such Owner) on whose Project Property any such outdoor facilities are permitted in accordance with this Agreement shall, at such Owner's cost, keep and maintain the Walkways clean, clear and free of (a) any waste food or beverage products and materials resulting from such use and (b) any insects, vermin, rodents or other pests attracted by such use. In addition to those included in the Walkways Improvement Plan and Improvement Standards, building projections, or other improvements which occupy any portion of Walkways, which exist at the date of this Agreement or- are later added in accordance with this Agreement, including all building projections and improvements that are set forth on the Approved Drawings, balconies, balustrades, flagpoles, signs, fire escapes, awnings, eaves and roof overhangs (including columns or posts supporting any of the foregoing), normal foundations, utility cabinets and meters, signs, doors and stairways for ingress and egress, and the like, are allowable uses_ Any building projections, or other- improvement which occupy any portion of' the Walkways, which are added or installed after the date of this Agreement must conform to applicable City requirements.. Except -3- as otherwise set forth in this Agreement, no Owner shall cause or permit any portion of any improvement on its own Project Property to exist upon the Walkways or to project into and /or occupy any air space over the Walkways. Incidental encroachments upon Walkways may occur as a result of the use of ladders, scaffolds, store front barricades and similar facilities in connection with the construction, maintenance, repair, replacement, alteration or expansion of (i) buildings adjacent to the Walkways and signs or other features on the facades of said buildings, and (ii) improvements and facilities located on the Walkways themselves which are otherwise permitted under this Agreement. Such incidental encroachments are permitted under this Agreement provided the work which necessitates the encroachment(s) is prosecuted diligently, completed expeditiously, and performed so as to minimize any interference with the normal use of Walkways hereunder. After the planned improvement of the Walkways, (i) each Owner shall keep the facade of its Project Property in good condition and repair and (ii) except as otherwise provided herein, Manager shall keep the Walkways clean and free from waste and debris and shall generally maintain the Walkways in good condition and repair as more specifically provided elsewhere in this Agreement. To the extent, however, that any portion of the Walkways shall require extraordinary maintenance or repair, or replacement, during the term of this Agreement, the Owner on whose Project Property such portion of the Walkways exists shall be exclusively liable for performing and paying for the necessary work, If, after reasonable notice from Manager or another Owner (with a copy to Manager), an Owner fails to perform any such work or to repair any damage which an Owner (or any party whose rights derive from the Owner) may cause to the Project Property of any other Owner, Manager may cause the work to be performed and the cost thereof' to be charged to the pertinent Owner. C. Operation and Maintenance,. The Owners hereby appoint the Monterey Owner as the Owner initially responsible for acting as the manager ( "Manager ") of the Walkways, and Monterey Owner hereby accepts said appointment and assumes, for the duration of its service as Manager, the managerial obligations set forth in this Agreement„ The Manager shall automatically be deemed to have resigned as Manager upon the transfer of all of its ownership in the Project Properties and it shall concurrently appoint a successor Manager. If the Monterey Owner fails to appoint a successor Manager, the party purchasing the last parcel of the Project Properties previously owned by the Monterey Owner shall automatically become the successor Manager. The Owners intend and agree that the Walkways shall at all times be operated and maintained in first- class, attractive, clean, safe and good operating condition.. Accordingly, the Owners hereby authorize and direct Manager to maintain Walkways at all times in first- class, attractive, clean, safe and good operating condition. Manager shall either itself perform or shall contract with a third party or parties to perform its duties under this Agreement. If Manager contracts for a service, Manager shall monitor performance by the third party to verify the service is properly performed. The Owner's which own one or more Project Properties in the Monterey Site shall collectively reimburse Manager for one -half of the Common Costs (as defined below) associated with performing the managerial duties which are set forth in this Agreement with respect to the operation of the Walkways and the Owners which own one or more Project -4- Properties in the Palm Site shall collectively reimburse Manager for the other one -half of such Common Costs. Manager shall reasonably estimate, bill and reconcile Common Costs (as defined below) on a calendar year basis. Each Owner shall pay such Common Costs to Manager on a monthly estimated basis on the first day of each month. As used in this Agreement, "Common Costs" shall mean the costs of operating, maintaining, repairing and replacing improvements and facilities on the Walkways., Common Costs shall include all costs and expenses in the following categories: (i) surface cleaning, maintenance and repair; (ii) facilitating waste and trash disposal; (iii) maintenance and periodic renewal of landscaping, including fertilizing and watering; (iv) utilities and lighting; (v) insurance on the Walkways as provided in Section 7.13. below; (vi) security; and (vii) any other costs and expenses in connection with the operation, use, maintenance, repair and replacement of improvements and facilities which are not included in the foregoing categories.. Common Costs shall not include any of the following: (i) any late charges or fees resulting from Manager's failure to pay an amount by the due date therefor unless the failure results from the delinquent payment of a monthly installment of Common Costs by the person responsible therefor, in which case such party shall be charged for and shall pay the late charges or fees; and (ii) expenses in connection with services or-other benefits which are offered to one or more Owners who are charged directly for such services or other benefits. D. Exceptions to Improvement Standards. It is the parties goal that the Walkways shall at all times be operated and maintained in a first class, attractive, clean, safe and good operating condition, and to accomplish such goal, the parties recognize that from time to time exceptions may be made to the use of, or improvements to, the Walkways in accordance with the Improvement Standards. The Monterey Owner and the Palm Owner shall each appoint one person to serve on behalf of their respective Site as a representative to a committee (the "Standards Committee "), which shall review any request by an Owner Party for a deviation from any use or maintenance from the Improvement Standards. There shall never be more than one representative from the Monterey Site and the Palm Site serving as a representative of the Standards Committee and each representative shall have one vote. Any Owner Party malting such request (the "Requesting Owner ") shall be responsible for reimbursing the other Owner Parties for any reasonable costs relating to the review of the request by the Standards Committee, whether or not such deviation is approved. The Standards Committee shall promptly respond in writing to the Requesting Owner to any request for such deviation, and may request such additional information as it deems necessary in order to evaluate such request„ If the Standards Committee does not unanimously agree to the request, then the Standards Committee shall specify in reasonable detail the reasons for such inability to agree to the request, Notwithstanding anything to the contrary herein, each Party Owner may make use of, or improvements to, the Walkways in accordance with any request approved in writing by the Standards Committee. Section 3. Indemnification of Manager and other Indemnitees. Neither Manager nor any of the Indemnitees (as defined below) shall be liable or responsible in any way for -, and each Owner Party (as defined below) hereby waives all claims against the Indemnitees with respect to or arising out of: (a) any death or any injury of any nature whatsoever that may be suffered or -5- sustained by such Owner Party from any causes whatsoever except to the extent such injury or, death is caused by the gross negligence or willful misconduct of the Indemnitees; or (b) any loss or damage or in to any property outside or within the Walkways or the Project Property owned by such Owner except to the extent such injury or damage is to property not covered by insurance carried by such Owner Party and is caused by the gross negligence or willful misconduct of the Indemnitees. Subject to the foregoing, none of the Indemnitees shall be liable for any damage or damages of any nature whatsoever to persons or property caused by explosion, fire, theft or breakage, by sprinkler, drainage or plumbing systems, by failure for any cause to supply adequate drainage, by the interruption of any public utility or service, by steam, gas, water, rain or other substances leaking, issuing or flowing into any part of the Walkways or, the Project, by natural occurrence, acts of the public enemy, terrorism, riot, strike, insurrection, war, court order, requisition or order of governmental body or authority, or for any damage or inconvenience which may arise through repair, maintenance or alteration of any part of the Project, or by anything done or omitted to be done by any tenant, occupant or person in the Project. As used in this Agreement, the term "Indemnitees" shall mean Manager and the members of the Standards Committee, and their respective agents, and each of their respective direct and indirect partners, officers, shareholders, directors, members, managers, trustees, beneficiaries, employees, principals, contractors, tenants, subtenants, servants, agents, and representatives. As used in this Agreement, the term "Owner Party" shall mean an Owner or any employee, tenant, subtenant, licensee, invitee, guest, agent or customer of such other Owner and each of their respective direct and indirect partners, officers, shareholders, directors, members, managers, trustees, beneficiaries, employees, principals, contractors, servants, agents, and representatives. Further, except to the extent of any such injury or damage resulting from the gross negligence or willful misconduct of Manager or Manager's agents or employees, each Owner Party shall indemnify, defend, protect and hold harmless each of the Indemnitees from and against any and all Losses (as defined below) resulting from any claims (i) against the Indemnitees arising from any act, omission or negligence of such Owner Party; (ii) against the Indemnitees arising from any accident, injury or damage to any person or to the property of any person and occurring in or about the Walkways or the Project, and (iii) against the Indemnitees resulting from any breach, violation or nonperformance of any covenant, condition or agreement of this Agreement on the part of such Owner Party to be fulfilled, kept, observed or performed. As used in this Agreement, the term "Losses" shall mean any and all tosses, liabilities, damages, claims, judgments, fines, suits, demands, costs, interest and expenses of any kind or nature (including reasonable attorneys' fees and disbursements) incurred in connection with any claim, proceeding or judgment and the defense thereof, and including all costs of repairing any damage to the Walkways or any Project Property or the appurtenances of any of the foregoing to which a particular indemnity and hold harmless agreement applies. Section 4. Property Taxes. The Owners acknowledge that the Assessor's Tax Parcels on the basis of which local real and personal property taxes and assessments on the Project Properties are assessed and levied include or will include the portion of the Walkways which each Owner owns. Accordingly each Owner hereby covenants to assume and to pay, prior to delinquency, the real property taxes and assessments levied on its Project Property, including the portion of the Walkways included therein as such portion is initially improved pursuant to this Agreement and as it may be improved hereafter. -6- Section 5. Cross - Easements. Each Owner, as grantor, hereby grants to each other, Owner, as grantee, for the benefit of each Project Property belonging to each of the other Owners, the following non - exclusive easements over the Walkways portion of the Project Property owned by the grantor Owner. Nothing in this Section 5, however, shall prohibit the use of Walkways for, any use otherwise allowed by this Agreement, including use of Walkways for building projections or other improvements which occupy a portion of Walkways allowed under Section 2A. The provisions of this Section 5 shall survive the expiration or termination of this Agreement. A. Ingress and Egress„ An easement for ingress and egress for pedestrian traffic and for fire and emergency vehicles as required by applicable law or regulation. B. Improvements, Facilities and Amenities. An easement for the location, construction, use, operation, repair, maintenance and replacement of the improvements, facilities and amenities described on the Walkways Improvement Plan and for any additions thereto permitted under this Agreement. C. Utilities. An easement for the location, installation, use, operation, maintenance, repair and replacement of utility lines. To the extent feasible utility facilities shall be installed underground. If; following completion of the planned Walkways improvements, an Owner shall need to exercise the Owner's rights in the utility easement created by this Agreement, such Owner shall pay all expenses in connection therewith, including the repair and replacement to as new condition of any portion of Walkways improvements and facilities which the Owner's work in the easement shall have disturbed or damaged. Each Owner hereby agrees to grant any additional easement over the Owner's portion of Walkways which any public or private utility company providing service to Walkways or any Project Property may reasonably require. D. Trash Pickup Area. In addition to the foregoing cross - easements, Monterey Owner hereby grants to Palm Owner a nonexclusive easement over that portion of the Monterey Site commonly known as the "Alley" and described as Parcel 8 on Exhibit A attached hereto and incorporated herein (hereinafter the "Alley "), to use for ingress and egress and the temporary placement of its trash bins and containers for such limited time as may be necessary each day to allow the contracted garbage service to pick up the trash within such bins in the Alley at Palm Owner's sole cost and expense. The use by Palm Owner of such easement shall not interfere in an unreasonable manner with the other uses in the Alley, including without limitation use of the Alley for vehicular, or, pedestrian ingress or egress or the use of the Alley by Monterey Owner for the temporary placement of its trash bins and containers for such limited time as may be necessary each day to allow the contracted garbage service to pick up the trash within such bins in the Alley. As long as Palm Owner is using the Alley on a regular basis, then Manager shall be obligated to clean and maintain the Alley and the costs related to such cleaning and maintenance shall be included in Common Costs.. Section 6., No Dedication. Nothing contained in this Agreement shall constitute or be deemed to be a gift or dedication of any portion of Walkways or of any Project Property to the -7- City or the general public, or for any public use or purpose whatsoever. The Owners intend that the rights, benefits and privileges which this Agreement creates and bestows with respect to the use of Walkways shall be private in nature, restricted in application, and function exclusively for the benefit of the Owners, their respective tenants and subtenants, and the agents, contractors, employees, and invitees of the Owners and their respective tenants and subtenants. Except as specifically set forth in this Agreement, no right, benefit or privilege of any Owner shall inure to the benefit of any third party, nor shall any third party be deemed to be a beneficiary of any of the provisions contained in this Agreement.. Arl Owner shall have the right LU c10Se Lhe purLion of Walkways on its Project Property from time to time, if necessary in the opinion of such Owner's attorney to prevent a dedication thereof or the accrual of any rights of the public therein. An Owner shall have the right to cause the removal from Walkways by appropriate public authorities of any person whose presence on Walkways is not allowed under this Agreement or whose conduct is offensive or potentially or actually harmful to other persons or to property. Section 7_ Miscellaneous. A. No Merger.. Notwithstanding that a Project Property may include more than one separately described and legally subdivided parcel of land, the Restrictions created by this Agreement and the easements herein granted shall burden and benefit each such parcel individually, without merger as a result of any such common ownership. Accordingly, upon any conveyance of such a parcel that has been one of two or more parcels owned by a single Owner, the parcel shall remain subject to and bound by this Agreement, and neither the Owner conveying the parcel nor the transferee acquiring the parcel shall need to execute any assumption of this Agreement or any other additional documentation to evidence or agree to the continuing applicability of this Agreement to the parcel. The Restrictions created by this Agreement and the easements herein granted shall relate back to and shall be effective upon and against all the land included in the Project Properties of the date this Agreement is first recorded in the Official Records of San Luis Obispo County; provided, however, that restrictions and obligations relating to the common use, ingress and egress, operation and maintenance and cost sharing relating thereto, shall not be effective until earlier of. (i) the substantial completion of the Walkways or (ii) thirty (30) days after the initial issuance of a Certificate of Occupancy for the use of the Palm Site as a hotel. B. Insurance; Casualty Damage to the Walkways. Each Owner shall maintain such liability insurance as the party may elect with respect to its own Project Property including the portion of Walkways to which the Owner has title and shall use reasonable commercial efforts to name Manager as an additional insured under any such liability policy, Manager shall maintain, at its expense, liability insurance on Walkways, shall use reasonable commercial efforts to name the other Owners as additional insureds under any such liability policy, and shall maintain property insurance on the improvements and common facilities which are part of Walkways. If any such improvements or common facilities are damaged or destroyed by any cause whatsoever, whether insured or uninsured, during the term of this Agreement, other than damage caused by ordinary use or wear and tear', except as otherwise provided herein, Manager shall oversee the repair and replacement thereof as needed on behalf of the affected Owner or Owners and shall pay for such repair and replacement at its cost. Notwithstanding the foregoing, Manager, may terminate this -8- Agreement at its option following the occurrence of substantial destruction or damage to the Project, the repair or replacement of which is greater than available insurance proceeds. If this Agreement is not terminated, then each affected Owner agrees to deliver to Manager, for use in paying the cost of the repair and restoration work, any insurance proceeds which such Owner receives on account of the casualty, if any.. If any such damage or destruction results in whole or in part from the intentional or negligent acts or omissions of an Owner, such Owner shall be exclusively responsible for the cost of the repair and replacement work in proportion to its responsibility for the damage or destruction.. C.• Eminent Domain. If any part of Walkways shall be taken by right of eminent domain or any similar authority of law (in each instance a "Taking "), the entire award for the value of the land and improvements so taken shall belong to the Owner which owns the Project Property affected by the Taking. If more than one Project Property is affected, the award shall be separately determined for each affected Project Property. If a partial Taking of Walkways property occurs, the Owner which owns the affected Project Property shall, at its exclusive cost, restore the Walkways improvements, facilities and amenities located on the portion of Walkways which remains as part of its Project Property as nearly as possible to the condition existing prior to the Taking. The purpose of such restoration is to preserve, to the extent possible, the continued usability of the easements granted herein and the continued functioning of Walkways as a privately owned and privately operated and maintained pedestrian mall which integrates the building facades which face on to Walkways„ D.. Effect of Sale by Owner. If an Owner sells or otherwise conveys title to all or any portion of its Project Property, as of the date (the "Conveyance Date ") the conveyance is recorded in the Official Records of San Luis Obispo County, and provided the conveying Owner shall have delivered a written notice to the Manager which specifies the Conveyance Date and identifies the name and address of the transferee, the Owner shall be released and discharged from the Owner's obligations under this Agreement with respect to the Project Property conveyed, which obligations first arise on or after the Conveyance Date, and the transferee shall thereafter be responsible for the performance of said obligations. But the conveying Owner shall remain liable for all obligations arising under this Agreement prior to the Conveyance Date. Should an Owner of the Monterey Site convey less than all of its interest in the Monterey Site, the Deed evidencing such conveyance shall include an allocation of the share of the Common Costs payable by the Owner of such Project Property, which allocation shall be made solely in the discretion of the conveying Owner and new Owner. By way of'example, if an Owner conveys one third of its interests in the Monterey Site to a new Owner, then the Deed might provide that such new Owner shall pay one -sixth of the Common Costs (i.e., one third of the one -half payable by the Owners of the Monterey Site), or, depending on the agreement between the conveying Owner and the new Owner, and in those parties sole discretion, the Deed might provide that such new Owner shall pay more or less than one -sixth of the Common Costs.. Similarly, should an Owner of the Palm Site convey less than all of its interest in the Palm Site, the Deed evidencing such conveyance shall include an allocation of the share of the Common Costs payable by the Owner of such Project Property, which allocation shall be made solely in the discretion of the conveying -9- Owner and new Owner. The conveying Owner shall promptly provide written notice on the allocation of Common Costs to the Manager. E. Successors and Assigns. The provisions of Agreement shall inure to the benefit of and shall bind (i) the Owners, their heirs, personal representatives, successors and assigns, and (ii) any person or entity acquiring all or any portion of a Project Property and their respective heirs, personal representatives, successors and assigns, whether the transfer of ownership occurs pursuant to contract or by operation of law or otherwise. F. Term of this Agreement. A Majority of the Owners (as defined in Section TH. below) may terminate this Agreement.. Upon the termination of this Agreement, all rights and privileges derived from and all duties and obligations created and imposed by the provisions of the Agreement shall cease and have no further force or effect.. The termination of this Agreement shall not, however, limit or affect any remedy at law or in equity that an Owner may have against any other Owner with respect to any liability or obligation arising or to be performed under this Agreement prior to the date of such expiration or termination. Notwithstanding the termination of this Agreement, given the function of Walkways in providing access to the portions of the Project Properties which front on Walkways, the easements which this Agreement creates, and the rights and duties related to said easements, shall remain in full force and effect until such time any such easement is abandoned with the unanimous consent of all the then owners of the Project Properties and such abandonment is approved by the City, G. Injunctive Relief. if any violation or threatened violation of any of the Restrictions contained in this Agreement occurs, any one of more of the Owners shall have the right to enjoin such violation or threatened violation in a court of competent jurisdiction. The right of injunction shall be in addition to all other remedies set forth in this Agreement or provided by law. K Modification; Consent, This Agreement may be modified or amended only by the unanimous approval of the representatives of the Standards Committee; provided however that the Restrictions in Section 2A above prohibiting building in the Walkways except in accordance with construction drawings approved by the City may not be amended without the prior written consent of the City. Notwithstanding the foregoing, no Owner of a Project Property shall be bound by a modification to this Agreement which materially increases such Owner's obligations with respect to the maintenance, repair or improvement of the Walkways, or any improvements or common facilities thereon, materially decreases such Owner's rights under this Agreement or which materially increases the restrictions on the Project Properties or the Walkways, unless such Owner (or the Owner's Association which is authorized to grant consent on its behalf) is a signatory to such modification or amendment. No modification or amendment shall be effective, however, until a counterpart thereof has been executed in recordable form by a Majority of the Owners and recorded in the Official Records of San Luis Obispo County. Notwithstanding anything to the contrary in any conveyance deed or agreement, each Owner which owns a Condominium Unit hereby grants to its Owner's Association the right to consent to any matter under this Agreement, including the modification of this Agreement, on its behalf, without prior notice. -10- 1.. Estoppel Certificates. In connection with a sale or other conveyance, lease, and/or financing or refinancing of a Project Property, the Owner may request the Manager, as the agent and on behalf of the other Owners, to execute a certificate certifying that, to the knowledge of the Manager, (i) neither the requesting Owner nor any other Owner is in default in the performance of its obligations under this Agreement, or, if a default is alleged, specifically describing the nature and amount thereof, and (ii) confirming that this Agreement has not been amended (or, if so, identifying the amendments), and is in full force and effect. The Owners hereby authorize and direct the Manager to issue such certificates on their behalf when requested to do so. The issuance of such an estoppel certificate shall in no event subject the Manager to any liability for the negligent or inadvertent failure to disclose correct and/or relevant information (but it shall estop the Owners from making assertions contrary to those set forth in this certificate for the period covered by this certificate).. J. Breach Shall Not Permit Termination. No breach or default under this Agreement on the part of an Owner shall entitle any Owner to terminate this Agreement. The foregoing limitation shall not, however, affect in any manner any other rights or remedies which an Owner may have hereunder by reason of such a breach or default. No breach or default hereunder shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith for value, but this Agreement shall be binding upon and be effective against any Owner whose title is acquired by foreclosure, trustee's sale or otherwise. K. Notices. All notices given pursuant to this Agreement shall be in writing and shall be given by personal delivery, by United States mail or by United States express mail or other established express delivery service (such as Federal Express), postage or delivery charge prepaid, return receipt requested, addressed to the person and address shown on the then current real property tax rolls of San Luis Obispo County; except that each Owner which owns a Condominium Unit hereby grants to its Owner's Association the right to receive notice on any matter under this Agreement, including the modification of this Agreement, on its behalf. The person and address to which notices are to be given may be changed at any time by any party upon written notice to the other parties. All notices given pursuant to this Agreement shall be deemed given upon receipt. During the term of any first mortgage loan encumbered by either of the Party Properties, any notice given to the Owner of such Party Property shall simultaneously be given to the first mortgagee of such Party Property in writing at the address set forth in the mortgage or deed of trust encumbering such Party Property, together with the right (but not the obligation) of such mortgagee to cure any default hereunder caused by the Owner of such Party Property within thirty (30) days after receipt of such notice prior to the exercise of remedies against such Owner or such Party Property as provided hereunder. L. Waiver.. The failure of an Owner to insist upon strict performance of any of the Restrictions contained herein shall not be deemed a waiver of any rights or remedies that the Owner may have, or of any subsequent breach or default in the performance of any of the Restrictions contained herein by the same or any other Owner„ M.. Attorneys` Fees. if the Manager or, an Owner initiates or defends any legal action or proceeding to enforce or interpret any of the provisions of this Agreement, the prevailing party -11- in any such action or proceeding shall be entitled to recover from the losing party in any such action or proceeding its reasonable costs and attorneys' fees (including its reasonable costs and attomey's fees on any appeal). N. Severability. If any provision of this Agreement or the application of it to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the extent permitted by law. 0„ No Partnership. The provisions of this Agreement are not intended to create, nor shall they be in any way interpreted or construed to create, a joint venture, partnership, co- tenancy or any other similar relationship among the Owners. Each Owner shall be considered a separate party and no Owner shall have the right to act as agent for another, unless expressly authorized to do so herein or by separate written instrument signed by the Owner to be charged.. P.. No Third Party Beneficiary Rights.. This Agreement is not intended to create, nor, shall it be in any way interpreted or construed to create, any third party beneficiary rights in any person not an Owner hereto unless otherwise expressly provided herein. Q. Captions and Headings, The captions and headings in this Agreement are for reference only and shall not be deemed to define or limit the scope or intent of any of the terms, covenants, conditions or agreements contained herein. R. Governing Law and Interpretation. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. Whenever the context requires in construing the provisions of this Agreement, the use of one gender shall include all genders, use of the singular shall include the plural, and the use of the plural shall include the singular.. The word "including" shall be construed inclusively, and not in limitation, whether or, not the words "without limitation" or "but not limited to" (or words of similar importance) are used with respect thereto. The provisions of this Agreement shall be construed as a whole and not strictly for or against any party. S. Entire Agreement; Exhibits. This Agreement and the Exhibits hereto contain the entire agreement among the Owner's relating to the subject matter of this Agreement and supersede any and all prior agreements, oral or written, with respect to the subject matter hereof. The Exhibits to this Agreement are integral and essential parts of this Agreement and shall be treated as though set forth in full in the body of this Agreement„ T. Joint and Several Status. If any Owner is composed of more than one person or entity, the obligations of said person(s) and entity(ies) with respect to the Owner- shall be joint and several., U. Recordation.. So long as this Agreement is fully executed by the Owners, the Manager shall record this Agreement in the Official Records of San Luis Obispo County. -12- V. Limitation on Liability. Except as specifically provided below, no person or entity who at any time or from time to time may constitute an Owner or any Indemnitee (as defined in Section 3 above) (including, without limitation, the members, shareholders, partners, officers, directors, employees and agents of any Owner and any Indemnitee) shall have any entity or personal liability for the performance of any obligation or for any breach, violation or default under this Agreement, including without limitation the provision of security services. If a breach or default hereunder on the part of any Owner or any Indemnitee shall occur, the Owner who seeks recovery from such Owner or any Indemnitee, as the case may be, shall look solely to the interest of such Owner and /or such Indemnitee in the Project Property owned by such Owner or such Indemnitee, as the case may be, for the satisfaction of any ,judgment the Owner seeking recovery may obtain. If such Owner and such Indemnitee are Owners of the same interest in the Project Property, then such Owner's Project Property shall not be charged fora breach ordefault hereunder on the part of such Indemnitee and vice versa. Each Owner further agrees that its sole remedy against any other Owner arising out of the use and operation of Walkways shall be based on a breach or a default hereunder or in any other written agreement relating to Walkways by and among any of the Owners and waive any other remedy based on tort, strict liability or any other legal basis. The foregoing limitations shall not in any way impair, limit or prejudice the right of any Owner to pursue equitable relief under this Agreement, including a proceeding for a temporary restraining order, preliminary injunction, permanent injunction or specific performance. W. Lienholder Protection No breach hereof or lien asserted hereunder shall defeat, render invalid, diminish or impair the lien of any first mortgage or first deed of trust made in good faith and for value, but the covenants and restrictions, easements and conditions herein contained shall be binding upon and effective against the Owner or any Project Property, or any portion thereof', whose title thereto is acquired by foreclosure, trustee's sale, deed in lieu of foreclosure, or otherwise, pursuant to the aforesaid mortgage or, deed of trust; provided that first mortgagee or successor owner, thereof shall not be liable for any such assessments or liens created hereunder prior to the date that the first mortgagee or successor, owner takes title to the Project Property or portion thereof through foreclosure or deed in lieu. Any lien created pursuant to the provisions hereof'shall be subject and subordinate to the interest of any mortgagee or beneficiary pursuant to a first trust deed or mortgage encumbering all or any portion of any Project Property who acquired its interest for fair value prior to the date of recordation of the claim of lien, subject to the limitations set forth above and notwithstanding the fact that the claim of lien may be asserted with respect to work performed or costs incurred prior to the date the claim was duly recorded. X. Time of Essence; Force Majeure. Time is of the essence with respect to the performance of each obligation of this Agreement. Whenever performance is required by any person or entity hereunder, such person or entity shall use all due diligence to perform and take all necessary measures in good faith to perform; provided, however, that ifcompletion of performance shall be delayed at any time by reason of acts of God, war', civil commotion, riots, strikes, picketing or other labor disputes, unavailability of labor or materials, damage to work in progress by reason of fire or other casualty, or any other cause beyond the reasonable control of such person or entity, then the time for performance as herein specified shall be extended by the amount of the delay -13- actually so caused. Notwithstanding the foregoing, the provisions of this section shall not operate to excuse any person or entity from the prompt payment of any monies required by this Agreement, Y. Owner's Right to Cure or Abate. If any Owner (a "Defaulting Owner ") violates any portion of this Agreement or permits or suffers any occupant of its Project Property to violate this Agreement, then in addition to any other remedy provided for in this Agreement, any Owner (each or together, as applicable, the "Creditor Owner ") may demand by written notice (the "Default Notice ") that the violation be cured,. If the Defaulting Owner does not cure the violation of a monetary obligation within ten (10) days after delivery of the Default Notice, or' if such non - monetary default is of a kind that cannot reasonably be cured within thirty (30) days and the Defaulting Owner does not within such thirty (30) day period commence to cure such default and diligently thereafter prosecute such cure to completion, then the Creditor Owner (and its agents and employees) will have the right to (i) pay any sum owed by the Defaulting Owner to the person entitled thereto, (ii) enter upon the Project Property of the Defaulting Owner (or any portion of the Common Area owned by the Defaulting Owner) and summarily abate, remove or otherwise remedy any improvement, thing or condition which violates this Agreement, and (iii) enter upon the Project Property of the Defaulting Owner (or any portion of the Common Area owned by the Defaulting Owner) and perform any obligation of the Defaulting Owner to be performed thereon. The Defaulting Owner will, within ten (10) days of written demand by any other Owner, accompanied by appropriate supporting documentation, reimburse the Creditor Owner for all costs and expenses incurred by the Creditor Owner in undertaking any of the actions permitted by clauses (i) through (iii) in the preceding sentence, including without limitation, wages, benefits and overhead allocable to the time expended by any employee of the Creditor Owner in taking such actions, together with interest thereon accruing from the date such costs and expenses were advanced or incurred by the Creditor Owner, at the Default Interest Rate (as herein defined).. For purposes of this Agreement, the "Default Interest Rate" is the rate equal to the lesser of: (i) four percent (4 %) per annum in excess of the "Prime Rate," or (ii) the highest lawful rate. The "Prime Rate" will be the rate announced as such from time to time by Bank of America or its successor. [remainder of page intentionally left blank] MEE IN WITNESS WHEREOF, the Owners have executed this Agreement as of the date first above written. JCC MISSION, LLC, a California limited liability company By- �-- ames C_ Copeland Its: Manager TMC MISSION, LLC, a Califomia limited liability company By: C. Copeland Its; anager HOTEL SLO, LLC, a California limited liability company By: Metrovation. LLC, a California limited liability company, its Manager iler, Manager Hotel Management, LLC, a Califomia limited liability company, its Manager , Manager SUTTER TUSTIN SLO, LLC, a California limited liability company By:ytter Tustin, a California limited liability company, its Manager %., � , By: Louis Lipset I" CONSENT OF LIENHOLDER AND SUBORDINATION OF LIEN The undersigned, Heritage Oaks Bank, as beneficiary under that certain Construction Deed of Trust, dated .July 1, 2015, recorded July 8, 2015, as Document No, 2015033857, in the Official Records of the County of San Luis Obispo (the "Deed of Trust "), and consents to all the provisions of the foregoing Reciprocal Easement Agreement for Pedestrian Plazas and Walkways (the "Agreement ") and agrees that the lien of such Deed of Trust shall be junior and subordinate and subject to this Abreernent. Heritage Oaks Bank By. . Its Authorized 6,11 -16- ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of T__ San Luis Obispo_ -� On .January 20, 2016 before me, Suzanne Fryer, Notary Public (insert name and title of the officer) personally appeared James C. Copeland 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 SUZANNE FRyt:Ft WITNESS m hand and official seal �` commission # 1974270 y z Notary Public - California San Luis Obispo County il My Comm. Expires May 3, 2016 Signature (Seal) ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validi of that document. State of California County of San Luis Obispo On January 20, 2016 before me, _Suzanne Fryer, Notary Public (insert name and title of the officer) personally appeared James C. Copeland 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) SUZAfuNE FRYER Commission # 1974270 Z • y� Notary Public - Ca1lfornia San Luls Obispo Counly My Comm. Expires May 3, 2016 ~ ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity_ of that document. State of California County of Santa Barbara On January 20, 2016 before me, Suzanne Fryer, Notary Public (insert name and title of the officer) personally appeared _ C. L. Bradfield 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 x SUZANNE FF # 1974 Commission Notary Public - California San Luis Obispo Counly Z My Gomm. E—r— i4lay 3, 201$ (Sealy I notary public or other officer completing this certificate verifies only the identity of the liindividual who signed the document to which this s :ertiflcate is attached, and not the truthfulness, !accuracy, or validity of that document. State of California County of Contra Costa On January 21, 2016 _ before me, `fy'y . Notary Public, personally appeared Mary Seiler and Paolo Patrone and Louis Lipset, 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 signatures) 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 seaall. Signature (Seal) r W C. I WILSON yp d' Xi COMM.O 2135156 �n UJ � . . t NOiAAYPU6idC�CAlJFONHIA V+ COAIAA COSTA COONTY rw;ZWM• MT Cow EAP. DEC. is. 241 ?'" LIST OF EXHIBITS Exhibit A Legal Descriptions of Project Properties Exhibit B Depiction of Monterey Site and Palm Site Exhibit C Depiction of Walkways Exhibit D Rules and Regulations -17- EXHIBIT A LEGAL DESCRIPTION OF PARTY PROPERTIES LEGAL DESCRIPTION OF MONTEREY SITE: (parcels 1,2 3, 4, 5, 6, 7 and 8) This land is situated in the City of San Luis Obispo, County of San Luis Obispo, State of California, and is described as follows: THAT PORTION OF BLOCK 14 OF MAP OF THE TOWN OF SAN LUIS OBISPO IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AS SHOWN ON THE MAP FILED IN BOOK A, PAGE 168 OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY AND STATE MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCEL 1: THAT PROPERTY PER DOCUMENT NUMBER 2015 - 000440, RECORDED ON JANUARY 6, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING'AT THE MOST SOUTHERLY CORNER OF SAID BLOCK 14; THENCE NORTH 361 22' WEST ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK, 129 -1/2 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO PEDRO QUINTANA BY DEED DATED JULY 22, 1907 AND RECORDED JULY 23, 1907 IN BOOKS 75 OF DEEDS, PAGE 248, RECORDS OF SAID COUNTY; SAID POINT BEING THE CENTER OF A WALL THENCE NORTH 540 12' EAST ALONG THE CENTER LINE OF SAID WALL 36 FEET; THENCE SOUTH 360 22' EAST 9 INCHES TO THE NORTHWESTERLY LINE OF THE PROPERTY CONVEYED TO ESTEVAN QUINTANA BY DEED DATED JANUARY 30, 1872, AND RECORDED MAY 03, 1872 IN BOOK D OF DEEDS, PAGE 74, RECORDS OF SAID COUNTY; THENCE NORTH 5411 15' EAST ALONG SAID NORTHWESTERLY LINE 36.55 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY CONVEYED TO ANDREW SAUER BY DEED DATED JUNE 25, 1887, AND RECORDED JUNE 25, 1887, IN BOOK Y OF DEEDS, PAGE 154, RECORDS OF SAID COUNTY; THENCE SOUTH 361 09' EAST ALONG THE WESTERLY LINE OF THE PROPERTY SO CONVEYED 48.46 [SIC 49.461 FEET TO THE NORTHWESTERLY LINE OF THE PROPERTY CONVEYED TO ANDREW SAUER BY DEED DATED JANUARY 30, 1872, AND RECORDED FEBRUARY 20, 1872, IN BOOK. C OF DEEDS, PAGE 664, RECORDS OF SAID COUNTY; THENCE SOUTH 520 45' WEST ALONG SAID NORTHWESTERLY LINE 11.42 FEET TO THE MOST WESTERLY CORNER OF THE PROPERTY SO CONVEYED; THENCE SOUTH 350 54' EAST ALONG THE WESTERLY LINE OF SAID PROPERTY 79 FEET TO THE SOUTHEASTERLY LINE OF SAID BLOCK; THENCE SOUTH 540 06' WEST ALONG SAID SOUTHEASTERLY LINE 61.22 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. SAVING AND EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED IN MONTEREY STREET AS WIDENED. -18- PARCEL 2: THAT PROPERTY PER DOCUMENT NUMBER 2015- 000440, RECORDED ON JANUARY 6, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, CONVEYED TO E. QUINTANA BY THE TOWN TRUSTEES OF THE TOWN OF SAN LUIS OBISPO BY DEED DATED JANUARY 30, 1872 RECORDED IN BOOK D AT PAGE 74 OF DEEDS; SAID PORTION OF SAID LOT COMMENCING AT A POINT ON THE NORTHERLY LINE OF SAID QUINTANA LOT, DISTANT NORTH 54 1/4° EAST 72,55 FEET FROM THE MOST WESTERLY CORNER OF SAID QUINTANA LOT, AND RUNNING THENCE ALONG THE EAST LINE OF A CERTAIN BOARD FENCE STANDING ON SAID LOT SOUTH 360 9' EAST, 49.46 FEET TO THE NORTHERLY LINE OF A CERTAIN LOT OF LAND CONVEYED BY SAID TOWN TRUSTEES TO ANDREW SAUER BY DEED DATED JANUARY 30, 1872 IN BOOK C AT PAGE 664 OF DEEDS; THENCE ALONG THE BOUNDARY LINES OF SAID QUINTANA LOT AS FOLLOWS: IN A NORTHEASTERLY DIRECTION 49 FEET TO THE MOST EASTERLY CORNER OF SAID QUINTANA LOT; THENCE IN A NORTHWESTERLY DIRECTION ABOUT 48 FEET TO THE MOST NORTHERLY CORNER OF SAID QUINTANA LOT; THENCE IN A SOUTHWESTERLY DIRECTION ABOUT 4995 FEET TO THE POINT OF BEGINNING, AND BEING THE SAME LOT CONVEYED TO PEDRO QUINTANA FROM ANDREW SAUER BY DEED DATED JUNE 25, 1887 IN BOOK Y AT PAGE 154 OF DEEDS. TOGETHER WITH : ALL THAT PORTION OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, 86 FEET AND 2 AND 5/8 INCHES NORTHEASTERLY FROM THE INTERSECTION OF THE NORTHERLY LINE OF MONTEREY STREET WITH THE CENTER LINE OF CHORRO STREET, AND RUNNING THENCE ALONG THE NORTHERLY LINE OF MONTEREY STREET AND NORTHEASTERLY 48 AND 1/12 FEET; THENCE AT RIGHT ANGLES TO SAID MONTEREY STREET AND NORTHWESTERLY 80 FEET; THENCE SOUTH 520 45' WEST, 48 AND 1112 FEET; THENCE SOUTHEASTERLY 79 FEET TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PART THEREOF INCLUDED WITHIN THE PRESENT BOUNDARY OF MONTEREY STREET. PARCEL 3: THAT PROPERTY PER DOCUMENT NUMBER 2012 - 042357, RECORDED ON JULY 31, 2012 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK A AT PAGE 168 OF MAPS ON FILE IN THE COUNTY RECORDER'S OFFICE OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: -19- COMMENCING AT THE INTERSECTION OF THE NORTHEASTERLY RIGHT OF WAY OF CHORR.O STREET AND THE PRESENT LOCATION OF THE NORTHWESTERLY RIGHT OF WAY OF MONTEREY STREET, BEING 45.00 FEET NORTHWESTERLY OF THE CENTERLINE OF MONTEREY STREET AND AS SHOWN ON THE PLAT RECORDED IN BOOK 94 AT PAGE 69 OF RECORDS OF SURVEYS ON FILE IN SAID COUNTY RECORDER'S OFFICE; THENCE NORTHEASTERLY ALONG SAID RIGHT OF WAY OF MONTEREY STREET NORTH 560 14' 05" EAST" 227.69 FEET TO A POINT ON THE NORTHEASTERLY LINE OF THE LAND DESCRIBED AS PARCEL 1 OF DOCUMENT NUMBER 2005028853 RECORDED APRIL 12, 2005 AND ON FILE IN OFFICIAL RECORDS OF SAID COUNTY RECORDER'S OFFICE; THENCE LEAVING SAID RIGHT OF WAY, NORTHWESTERLY ALONG SAID LINE NORTH 33° 45'55" WES f 116.00 FELT TO THE NORTHERLY CORNER OF SAID PARCEL 1, SAID CORNER BEING THE TRUE POINT OF BEGINNING; THENCE CONTINUING NORTHWESTERLY ALONG THE EXTENSION OF SAID LINE NORTH 330 45'55" WEST 4.00 FEET; THENCE LEAVING THE EXTENSION OF SAID LINE SOUTH 560 14' OS" WEST 103.80 FEET TO A POINT ON THE SOUTHWESTERLY LINE OF THE PARCEL OF LAND DESCRIBED IN DEED TO THE CITY OF SAN LUIS OBISPO DATED JULY 05, 1966 AND RECORDED IN BOOK 1402 AT PAGE 177 OF OFFICIAL RECORDED ON FILE IN SAID COUNTY RECORDER'S OFFICE; THENCE SOUTHEASTERLY ALONG SAID SOUTHWESTERLY LINE SOUTH 300 59'03" EAST 35,87 FEET; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID DEED, SOUTH 33'.' 45' 55" EAST 34.17 FEET; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID DEED, SOUTH 56° 14'05" WEST 12.67 FEET; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID DEED, SOUTH 33° 45' 55" EAST 6000 FEET TO A POINT ON SAID PRESENT NORTHWESTERLY RIGHT OF MONTEREY STREET; THENCE NORTHEASTERLY ALONG SAID RIGHT OF WAY AND THE SOUTHERLY LINE OF SAID DEED, NORTH 56° 14'05" EAST 72.46 FEET TO A POINT IN THE SOUTHWESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 2 OF SAID DOCUMENT NUMBER 2005028853; THENCE LEAVING SAID RIGHT OF WAY NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 2 OF DOCUMENT NUMBER 2005028853, NORTH 33° 45'55" WEST 126.00 FEETTO THE NORTHWEST CORNER OF SAID PARCEL 2; THENCE NORTHEASTERLY ALONG THE NORTHWESTERLY LINE OF PARCEL 1 AND PARCEL 2 OF SAID DOCUMENT NUMBER 2005028853 NORTH 56° 14'05" EAST 45.75 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 4 THAT PROPERTY PER DOCUMENT NUMBER 2015 - 000439, RECORDED ON JANUARY 6, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET IN SAID CITY, DISTANT THEREON NORTH 540 06' EAST, 181.77 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE NORTH 350 54' WEST, 146.00 FEET TO A POINT; THENCE NORTH 540 06' EAST, 2287 FEET TO A POINT ON THE SOUTHWESTERLY LINE OF THE PROPERTY DESCRIBED IN DEED TO DAVID MUZIO, RECORDED JULY 03, 1912 IN BOOK 93, PAGE 134 OF DEEDS: -20- THENCE SOUTH 35° 54' EAST, ALONG SAID SOUTHWESTERLY LINE, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF MONTEREY STREET; THENCE ALONG SAID LINE, SOUTH 540 06' WEST, 22,87 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION INCLUDED WITHIN THE PRESENT LINES OF MONTEREY STREET. PARCEL 5 : THAT PROPERTY PER DOCUMENT NUMBER 2015- 000439, RECORDED ON JANUARY 6, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY OF SAN LUIS OBISPO, SAID POINT BEARING NORTH 54° 06' EAST, 204.645 FEET DISTANT FROM THE NORTHEASTERLY CORNER OF MONTEREY AND CHORRO STREETS; THENCE NORTH 540 06' EAST ALONG THE NORTHERLY LINE OF MONTEREY STREET, 22.875 FEET; THENCE AT RIGHT ANGLES TO THE NORTH LINE OF MONTEREY STREET, NORTH 350 54' WEST, 146 FEET TO THE MOST EASTERLY CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI, BY DEED RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 540 06' WEST, 22,87 FEET TO A POINT; THENCE SOUTH 350 54' WEST, 146 FEET TO THE' POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF MONTEREY STREET PARCEL 6 THAT PROPERTY PER DOCUMENT NUMBER 2012 - 042357, RECORDED ON JULY 31, 2012 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT PORTION OF BLOCK 14 OF THE MAP OF TOWN OF SAN LUIS OBISPO, IN THE C.TTY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AS SHOWN ON THE MAP RECORDED IN BOOK A AT PAGE 168 OF MAPS ON FILE IN THE COUNTY RECORDER'S OFFICE OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE INTERSECTION OF THE NORTHEASTERLY RIGHT OF WAY OF CHORRO STREET AND THE PRESENT LOCATION OF THE NORTHWESTERLY RIGHT OF WAY OF MONTEREY STREET, BEING 45.00 FEET NORTHWESTERLY OF THE CENTERLINE OF MONTEREY STREET AND AS SHOWN ON THE PLAT RECORDED IN BOOK 94 AT PAGE 69 OF RECORDS OF SURVEYS ON FILE IN SAID COUNTY RECORDER'S OFFICE; THENCE NORTHEASTERLY ALONG SAID RIGHT OF WAY OF MONTEREY STREET -21- NORTH 560 14'05" EAST 227.69 FEET TO A POINT ON THE NORTHEASTERLY LINE OF THE LAND DESCRIBED AS PARCEL 1 OF DOCUMENT NUMBER 2005028853 RECORDED APRIL 12, 2005 AND ON FILE IN OFFICIAL RECORDS OF SAID COUNTY RECORDER'S OFFICE, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE LEAVING SAID RIGHT OF WAY NORTHWESTERLY ALONG SAID LINE NORTH 330 45'55" WEST 126.00 FEET TO THE NORTHERLY CORNER OF SAID PARCEL 1;THENCE CONTINUING NORTHWESTERLY ALONG THE EXTENSION OF SAID LINE NORTH 330 45'55" WEST 4.00 FEET; THENCE LEAVING SAID EXTENSION NORTH 560 14'05" EAST 58.80 FEET TO A POINT ON THE SOUTHWESTERLY LINE OF THE ALLEY PROPERTY SHOWN ON THE PLAT RECORDED IN BOOK 1 AT PAGE 43 OF RECORDS OF SURVEYS ON FILE IN SAID COUNTY RECORDER'S OFFICE; THENCE SOUTHEASTERLY ALONG SAID SOUTHWESTERLY LINE OF SAID ALLEY AND THE SOUTHWESTERLY LINE OF LOT 11 OF BLOCK 14 AS SHOWN ON SAID RECORD OF SURVEY SOUTH 310 08' 19" EAST 130.14 FEET TO A POINT ON SAID NORTHWESTERLY RIGHT OF WAY OF MONTEREY STREET, THENCE SOUTHWESTERLY ALONG SAID RIGHT OF WAY SOUTH 560 14'05" WEST 52.83 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 7: THAT PROPERTY PER DOCUMENT 2015 - 000440, RECORDED ON JANUARY 6, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: LOT 11 OF THE MAP ENTITLED "MAP OF SUBDIVISION OF PART OF BLOCKS 14 AND 18, IN THE CITY OF SAN LUIS OBISPO, THE PROPERTY OF MRS. N.E. CALL ", IN THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED OCTOBER 9, 1895 IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING ALL THAT PORTION TAKEN FOR THE WIDENING OF MONTEREY STREET PARCEL 8: THAT PROPERTY PER DOCUMENT NUMBER 2015- 007898, RECORDED ON FEBRUARY 24, 2015 IN THE OFFICE OF THE COUNTY RECORDER IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND REPEATED HERE FOR CONVENIENCE: THAT CERTAIN PARCEL OF LAND DESIGNATED AS "ALLEY" ON THE MAP OF THE SUBDIVISION OF PART OF BLOCK 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. TOGETHER WITH THE NORTHWESTERLY 5.5 FEET OF LOT 12 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCK 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY MEASURED AT RIGHT ANGLES AND ADJACENT TO THE NORTHWESTERLY LINE OF SAID LOT. THE SIDE LINE TO BE EXTENDED OR SHORTENED TO TERMINATE ON THE NORTHEASTERLY AND SOUTHWESTERLY LINES OF SAID LOT -22- THIS LEGAL DESCRIPTION IS PURSUANT TO "NOTICE OF MERGER AND CERTIFICATE OF SUBDMSION COMPLIANCE" RECORDED MARCH 04, 2015 AS INSTRUMENT NO. 2015009445 OF OFFICIAL RECORDS. APN: 002- 416 -040 LEGAL DESCRIPTION OF PALM SITE: (parcels 1, 2 3, 4, 6 and 7) Real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows: PARCEL ONE: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT THEREON, NORTH 540 06' EAST, 109.31 FEET FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREET, THENCE NORTH 35° 54' WEST, 80.00 FEET TO A POINT; THENCE NORTH 540 06' EAST 12.67 FEET TO A POINT; THENCE NORTH 3510 54' WEST, 34.17 FEET TO A POINT; THENCE NORTH 330 02' WEST, 148.54 FEET TO A POINT; THENCE NORTH 360 22' WEST, 86.50 FEET TO A POINT ON THE SOUTHERLY LINE OF PALM STREET AS SHOWN ON SAID MAP; THENCE ALONG SAID SOUTHERLY LINE NORTH 53° 38' EAST, 1100 FEETTO A POINT; THENCE SOUTH 360 22' EAST, 70.25 FEETTO A POINT; THENCE SOUTH 81° 22' EAST, 8.13 FEETTO A POINT; THENCE NORTH 530 38' EAST 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 3611 22' WEST, 12,75 FEET TO A POINT; THENCE NORTH 500 13' EAST, 38.16 FEET TO A POINT; THENCE SOUTH 350 54' EAST, 148.56 FEET TO A POINT; THENCE SOUTH 540 06' WEST, 45.75 FEET TO A POINT; THENCE SOUTH 35° 54' EAST, 146.00 FEET TO A POINT ON THE NORTHERLY LINE OF SAID MONTEREY STREET, THENCE ALONG SAID LINE SOUTH 54° 06' WEST, 72.44 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINATOWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS, PARCEL TWO: THAT PORTION OF BLOCK 14 OF THE MAP OF THE TOWN OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP FILED FOR RECORD MAY 01, 1878, IN BOOK A, PAGE 168, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHERLY LINE OF MONTEREY STREET, IN SAID CITY, DISTANT NORTH 540 6' EAST, 227 FEET 6 INCHES FROM THE NORTHEASTERLY CORNER OF CHORRO AND MONTEREY STREETS; THENCE RUNNING NORTH 540 6' EASTALONG SAID NORTHERLY LINE OF MONTEREY STREET, 52 FEET AND 6 INCHES TO THE SOUTHWESTERLY CORNER OF THE LOT FORMERLY OWNED BY MRS, N. E. CALL; THENCE NORTH 330 22' WEST ALONG THE WESTERLY LINE OF SAID LOT OF MRS. N. E. CALL, 351 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE SOUTH 530 38' WEST ALONG SAID SOUTHERLY LINE OF PALM STREET, 107 FEET TO THE NORTHWESTERLY CORNER _2;_ OF THE LOT FORMERLY OWNED BY B. BRIZZOLARA; THENCE SOUTH 360 22' EAST ALONG THE WESTERLY LINE OF SAID BRIZZOLARA LOT, 56,36 FEET TO A POINT; THENCE NORTH 530 38' EAST AND PARALLEL. WITH THE SOUTHERLY LINE OF PALM STREET, 38.08 FEET TO THE EASTERLY LINE OF A LOT CONVEYED BY NATHAN AND ISSAC GOLDTREE TO W. J. OAKS, BY DEED DATED AUGUST 21, 1882 AND RECORDED IN BOOK 0, PAGE 431 OF DEEDS AND FOLLOWING; THENCE SOUTH 350 54' EAST ALONG THE EASTERLY LINE OF SAID OAKS LOT, 296 FEET TO THE NORTHERLY LINE OF MONTEREY STREET AND THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO SLO CHINA I OWN, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED JULY 31, 2012, IN INSTRUMENT NO. 2012042357, OF OFFICIAL RECORDS. PARCEL THREE: THAT PORTION OF LOTS 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER, OF LOT 1 OF SAID BLOCK; THENCE SOUTH 530 38' WEST ALONG THE NORTHWESTERLY LINE OF LOTS 1 AND 2, 89.65 FEET TO THE TRUE POINT OF BEGINNING; WHICH POINT BEARS NORTH 530 38' FAST, 0.35 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE SOUTH 330 23' 50" EAST, 100.1 FEET TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING NORTH 53° 38' EAST, 0.56 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 530 38' WEST ALONG THE SOUTHEASTERLY LINE OF SAID LOT 3, 0.56 FEET TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTH 330 16' 30" WEST ALONG THE SOUTHWESTERLY LINE OF SAID LOTS 3 AND 2, 100.14 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 2; THENCE NORTH 530 38' EAST ALONG THE NORTHWESTERLY LINE OF SAID LOT 2, 0.35 FEET TO THE TRUE POINT OF BEGINNING. PARCEL FOUR: LOTS 4 AND 10 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. PARCEL FIVE: [ INTENTIONALLY DELETED] PARCEL SIX: LOTS 1, 2 AND 3 OF THE MAP OF THE SUBDIVISION OF PART OF BLOCKS 14 & 18, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF FILED IN BOOK 1, PAGE 43 OF RECORD OF SURVEYS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO C. A. MAINO, Er UX, RECORDED APRIL 07, 1953 IN BOOK 704, PAGE 439 OF OFFICIAL RECORDS. PARCEL 7: -24- ALL THAT PART OF BLOCK 14 OF THE CITY OF SAN LUIS OBISPO, IN THE COUNTY OF SAN L U I S OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 01, 1878 IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHWESTERLY LINE OF SAID BLOCK, DISTANT THEREON NORTH 53° 38' EAST, 143.33 FEET FROM THE MOST WESTERLY CORNER OF SAID BLOCK, SAID POINT BEING THE MOST NORTHERLY CORNER OF THE PROPERTY CONVEYED TO FERDINANDO CHIESA BY DEED DATED JULY 01, 1912 IN BOOK 93, PAGE 136 OF DEEDS; THENCE SOUTH 360 22' EAST, 70.25 FEET TO THE MOST WESTERLY-CORNER OF THE PROPERTY CONVEYED TO SERAFINO J. MARTINELLI AND CARMEL MARTINELLI BY DEED DATED FEBRUARY 08, 1966 AND RECORDED APRIL 01, 1966 IN BOOK 1391, PAGE 479 OF OFFICIAL RECORDS; THENCE SOUTH 810 22' EAST, 8.13 FEET TO A POINT; THENCE NORTH 530 38' EAST, 36.75 FEET TO A POINT; THENCE NORTH 80 38' EAST, 8.13 FEET TO A POINT; THENCE NORTH 360 22' WEST, 70.25 FEET TO THE SOUTHERLY LINE OF PALM STREET; THENCE ALONG THE SOUTHERLY LINE OF PALM STREET SOUTH 53° 38' WEST, 48.25 FEET TO THE POINT OF BEGINNING.. EXCEPTING THEREFROM THAT PORTION THEREOF INCLUDED WITHIN THE PRESENT LINES OF PALM STREET. APN(S): 002 -416 -031, 002- 416 -035 and 002 -416 -038 (PARCEL ONE, T'WO, THREE, FOUR, SIX AND SEVEN) -25- EXHIBIT B DEPICTION OF MONTEREY SITE AND PALM SITE The map can viewed.at the office of Thomas Copeland 1026 Chorro Street, Suite 200, 93401 -26- Exhibit C DEPICTION OF WALKWAYS The map can viewed at the office of Thomas Copeland 1026 Chorro Street, Suite 200, 93401 _77_ EXHIBIT D RULES AND REGULATIONS The following rules and regulations shall apply to Walkways on both the Monterey Site and the Palm Site: 1. Deliveries: Only hand - trucks that do not damage the Walkway may be used for deliveries.. Deliveries shall be scheduled when feasible between 9am and 8pm on business days and, where feasible, should be avoided between lam and 9am on business days and on the weekends and holidays, 2. Trash Containers: Although the Walkways may be used for trash ingress /egress from each business to and /or from a common trash room or a location for pickup of trash by the garbage company, the parties shall take reasonable steps so that such use does not interfere with use and enjoyment of the Walkways.. I Landscaping Hours Restrictions: Objectionable or unreasonably loud noises from landscaping activities (such as a leaf blower and lawn mowing) shall be prohibited between 8pm- 9am daily and shall be prohibited on weekends. 4. Outdoor Noise Restrictions: Objectionable or unreasonably loud noise, including from music, from use of outdoor facilities on the Party Properties shall be prohibited between 9pm- 9am, every day except in the case of private events as further set forth in the Reciprocal Easement Agreement whereby the outdoor music may continue past the 9pm designation so long as it does not violate any government law or restriction. 5. Signage: No sign, placard, advertisement, name, or notice shall be inscribed, displayed, printed or affixed on or, to any part of the Walkways or Project Properties that face the Walkways, other than signage in compliance with City standards. The Parties agree to use reasonable efforts to approve only signage which is tasteful and consistent with a first class retail and hospitality establishment and is consistent with the aesthetics of the Approved Drawings as the time initially approved for each Site. Owners or their tenants shall not place anything or allow anything to be placed near the glass of any window, door, partition, or wall except in compliance with City standards. There shall be no "A" frames signs allowed on the Walkways, The Monterey Site and the Palm Site shall comply with such obligations and shall incorporate these restrictions into the rules and regulations for their respective tenants_ b. Surfaces: The paved surfaces of the Walkways shall be maintained in a level, smooth and evenly covered condition with the type of'surfacing material originally installed or such substitute as will in all respects be substantially equal or superior in quality -28- 7, Cleaning: All papers, debris, filth and refuse shall be promptly removed from the Walkways, trash receptacle placed in the Walkways shall be collected to a common trash room and the ground level surfaces of the Walkways shall be thoroughly sweep to the extent reasonably necessary to keep the area in a clean and orderly condition. 8. Construction Hours for Party Properties: In addition to the foregoing with respect to the Walkways, the Owners agree to take reasonable steps to minimize objectionable or unreasonable noise from construction activities and that construction activities shall be scheduled when feasible between 9am and 8pm on business days and, where feasible, should be avoided between lam and 9am on business days and on the weekends and holidays, as well as whenever prohibited by City ordinance. -29- /V &S6voY� PREPARED BY AND UPON RECORDATION RETURN TO: Kutak Rock LLP 1801 California Street, Suite 3000 Denver, CO 80202 Attn: Micah J. Halverson, Esq. WE HEREBY CERTIFY THIS TO BE A 'CRU AND CORRECT COPY /,,OFTHE ORIGINAL RECORDED ON: _ r f & INSTRUMENT 0 o /- 6e 6 l-] 7 COUNTY OR �_ L� V FIRS A TITLE COMPAIJY BY. DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, AND FIXTURE FILING From HOTEL SLO, LLC, a California limited liability company and SUTTER TUSTIN SL.O, LLC, a California limited liability company, each as trustor to FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee For the Benefit of DELPHI CRE FUNDING LLC, a Delaware limited liability company, as beneficiary Date: January 25, 2016 Property Address: 861 -863 Palm Street, 877 Palm Street, 955 Morro Street San Luis Obispo, California 93401 APN/Tax ID No. (if any): 002 -416 -031, 002- 416 -035, 002 -416 -038, Deed of Trust —Motel S LO 4845.7357 -5722 6 FirstAmerican Title Company National Commercial Services 1850 Mt Diablo Blvd., Suite 300 • Walnut Creek, CA 94596 Office Phone:(925)927- 21000ffice Fax:(714)824 -5640 Seller's Estimated Settlement Statement Amended: Tuesday Jan 19, 2016 5 :32 PM Property: 861 -863 and 877 Palm Street and, 955 Morro File No: NCS- 692048 -CC Consideration: Total Consideration Adjustments: _ Payment for Parking Mitigation SeCLOty Deposit to CiY per PSA Cash (X To) ( From) Seller Street, San Luis Obispo, CA Officer: Pamela Nicolini /pn 3,666,418.00 f' Estimated Settlement Date: 01/22/2016 Disbursement Date: 3,666,418.00 3,666,418.00 Print Date: 01/19/2016, 5:33 PM Buyer: Hotel SLO, LLC as to 79.2% Interest; Sutter Tustin SLO, LLC as to 20.8% interest Address: c/o Metrovation 580 Second St #260, (Attn: Lina Conocono), Oakland, CA 94607 Seller: City of San Luis Obispo Address: 990 Palm Street, San Luis Obispo, CA 93401 Lender: Delphi CRE Funding LLC Address: Now Loan No.: Charge Description Seller Charge Seller Credit Consideration: Total Consideration Adjustments: _ Payment for Parking Mitigation SeCLOty Deposit to CiY per PSA Cash (X To) ( From) Seller 473,368 00 2,193,050.00 1� ,000,000.00_ 3,666,418.00 f' Totals 3,666,418.00 3,666,418.00 Notice - This Estimated Settlement Statement is subject to changes, corrections or additions at the time of final computation of Escrow Settlement Statement. Proration of tenant rents /tenant security deposits will be handled OUTSIDE OF ESCROW. No Proration of Taxes through escrow. Buyer will be responsible to pay all real property taxes directly to San Luis Obispo County Tax Collector from close of escrow forward. Seller: City of, "isQq�] By: Print N corporation Page 1 of 1 STANDARD INDUSTRIAL/COMMERCIAL SINGLE- TENANT LEASE - NET Basic Provisions ( "Basic Provisions "). 1.1 Parties: This Lease ( "Lease "), dated for reference purposes only January 19, 2016, is made by and between, HOTEL SLO, LLC, a California limited liability company, and SUTTER TUSTIN SLO, LLC, a California limited liability company, as tenants -in- common ( "Lessor") and CITY OF SAN LUIS OBISPO, a municipal corporation and charter city ( "Lessee "), (collectively the "Parties ", or individually a "Party "), 1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as San Luis Obispo City Parking Lots #3 and #11, which are located on the property to be acquired by Lessor pursuant to that certain Agreement of Purchase and Sale — Palm Development Site, dated as of December 19, 2011, as amended by that certain First Amendment, dated as of January 19, 2016, to be executed and delivered between Lessor and Lessee (the 'Palm Agreement "), as generally shown on Exhibit A attached hereto located in the County of San Luls Obispo, State of California. 1.3 Term: commencing on the Closing Date, as that term is defined in the Palm Agreement ( "Commencement Date ") and, and if the Closing Date is on or before January 22, 2016, ending at midnight on January 25, 2016, and if the Closing date is after January 22, 2016, at midnight of the calendar day following the Closing Date ( "Expiration Date "). (See also Paragraph 3) 1.4 Early Possession: NIA ( "Early Possession Date ") (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent: $1.00 per month ( "Base Rent"), payable on the First of each month commencing on the Commencement Date. (See also Paragraph 4) ❑ If this box is checked, there are provisions in this Lease to be adjusted. 1.6 Base Rent and Other Monies Paid Upon Execution: (a) Base Rent: $ -0-, for the period , (b) Security Deposit: $ -0- ( "Security Deposit "). (See also Paragraph 5) (c) Association Fees: $-0 -, for the period (d) Other: $-0-, for_ (e) Total Due Upon Execution of this Lease: $-0-, 1.7 Agreed use: Parking lot available for public parking (See also Paragraph 6) 13 Insuring Party. Lessee is the "Insuring Party" unless otherwise stated herein. (See also Paragraph S) 1.9 Real Estate Brokers: (See also Paragraph 15) (a) Representation: The following real estate brokers (the "Brokers ") and brokerage relationships exist in this transaction (check applicable boxes): ❑, None represents Lessor exclusively ( "Lessor's Broker"); ❑, None represents Lessee exclusively ( "Lessee's Broker"); or ❑, None , ____.,._ represents both Lessor and Lessee ( "Dual Agency "). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers the Brokerage fee agreed to In a separate written agreement (or if there is no such agreement, the sum of -0- or, -D-, % of the total Base Rent) for the brokerage services rendered by the Brokers. 1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by, NIA ( "Guarantor"). (See also Paragraph 37) 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: ❑ an Addendum consisting of Paragraphs _ through © a plot plan depicting the Premises, which Is attached as Exhibit A hereto; ❑ a current set of the Rules and Regulations; ❑ a Work Letter; ❑ other (specify); 2. Premises. 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree Is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less. Note: Lessee is advised to verity the actual size prior to executing this Lease. 2.2 Condition. Lessor shall deliver the Premises to Lessee AS IS, WHERE IS, with no warranty of any nature whatsoever on the Commencement Date ( "Start Date "). 2,3 Compliance. Lessor makes no warranty with respect to whether improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ( "Applicable Requirements ") that were in effect at the time that each improvement, or portion thereof, was constructed. Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended Use and acknowledge that past uses of the Premises may not longer be allowed. If the Premises do not comply with the Applicable Requirements and Lessee gives Lessor written notice of non compliance, then Lessee shall correct such non compliance at Lessee's sole cost and expense as soon as reasonably possible thereafter, and shall provide Lessor with satisfactory assurance of such correction within a reasonable time under the circumstances. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Premises ( "Capital Expenditure" ), Lessee shall be fully responsible for the cost thereof or Lessee may instead terminate this Lease. If Lessee elects termination, Lessee shell immediately cease the use of the Premises which require such capital expenditure and deliver to Lessor written notice specifying a termination date at least 60 days thereafter. Such termination date may, however, be the last day that Lessee could legally utilize the Premises without commencing such capital expenditure if such date is earlier than 60 days from the date of such termination notice. 2.4 Acknowledgements. Lessee acknowledges that it is currently in possession of the Premises and that: (a) it has been advised by Lessor and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial capability and /or suitability of all proposed tenants. 2.5 Lessee as Prior Owner /Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 3. Term. 3.1 Term. The Commencement Date, Expiration Date and Term of this Lease are as specified in Paragraph 1.3. 3.2 [INTENTIONALLY OMITTED.] 3.3 [INTENTIONALLY OMITTED.] 3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of Insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Rent. 4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ( "Rent "). 42 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it is due_ All monetary amounts shall be rounded to the nearest whole dollar. In the event that any Invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessors rights to the balance of such Rent, regardless of Lessors endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashiers check. Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or costs. 4.3 [intentionally omitted] Security Deposit. [INTENTIONALLY OMITTED.] Use. 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and /or is not significantly more burdensome to the Premises_ If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessors objections to the change in the Agreed Use. PAGE 2 OF 15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5105E 6.2 Hazardous Substances. (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance or waste whose presence, use or manufacture, disposal, transportation or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (III) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory, Hazardous Substances shall include, but not be limited to hydrocarbons, petroleum, gasoline and/or crude oil or any products, by products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substance, without the express written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or, use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (ill) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with Applicable requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. If addition, Lessor may condition the consent to any reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public the Premises and /or the environment against damage, contamination injury and or liability, including but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and /or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall Immediately give written notice of such fad to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Remediation. Lessee shall not cause or knowingly permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (Including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all investigatory and /or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance in or on the Premises during the term of this Lease, by or for Lessee . (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and /or damages, liabilities, judgment, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee (provided however, that Lessee shall have no liability under the Lease with respect to underground migration of any Hazardous Substances under the Premises from adjacent properties not caused or contributed by Lessee. Lessee's obligations shall include, but not be limited to, the effects of any contamination or Injury to person, property or the environment created or knowingly permitted by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from Its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor In writing at the time of such agreement. (e) [intentionally omitted] (f) [intentionally omitted] (g) Lessor Termination Option. If a Hazardous Substance Condition (see paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefore (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights and Paragraph 6,2(d) and Paragraph 13), Lessor may, at Lessor's option, either(i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, In which event this Lease shall continue In full force and effect, or (ii) only after the parking lot and exits therefrom onto Palm Street have been reconfigured as described in the PSA Agreements, give written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the cost of the remediation of such Hazardous Substance Condition. Lessee shall provide Lessor with satisfactory assurance of the availability of said funds within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessee shall proceed to make such remediation as soon as reasonably possible. If Lessee does not give such notice and provide the required assurance of available funds within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination. 6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date, Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises. PAGE 3OF15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5105E 6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. 7.1 Lessee's Obligations. (a) In General. Subject to the provisions of Paragraph 2.2(Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessors Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's xnle expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as parking lots, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Lessee's obligations shah include restorations, replacements or renewals when necessary to keep the Premises and all Improvements thereon or a part thereof in good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Premises in a first -class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity. (b) [intentionally omitted] (c) Failure to Perform. If Lessee falls to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Promises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof. (d) [intentionally omitted] 7.2 Lessors Obligations. Subject to the provisions of Paragraphs 2.2(Condition), 2.3 (Compliance), 9 (Damage or Destruction), and 14 (Condemnation), it is Intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee, other than as provided in the PSA Agreements. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it Is inconsistent with the terms of this Lease. 7.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and /or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing unnecessary damage to the Premises, Including but not limited to parking meter heads, curb stops and lighting fixtures. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and /or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) No Consent, Lessee shall be entitled to make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. (c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materlalmen's lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non - responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adversejudgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall fumish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability forthe same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs. 7.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee. Other than the parking meter heads referred to in paragraph 7.4(b) hereof and Trade Fixtures, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal of Parking Meter Heads. Promptly following the end of the tern of this Lease, Lessee shall remove all parking meter heads and Trade Fixtures from the Premises, and such parking meter heads and Trade Fixtures shall remain the property of Lessee. (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Lessee shall PAGE 4 OF 15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5/05E completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee to the amounts required by applicable law (except for Hazardous Substances which were deposited via underground migration from areas outside of the Premises, or if applicable, the Premises). Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed promptly following the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 8. Insurance; Indemnity. 8.1 Payment For Insurance. Lessee shall pay directly for all Insurance required under Paragraph 8. 8.2 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional Insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $3,000,000.00 per occurrence with an annual aggregate of not less than $5,000,000.00. Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured- Managers or Lessors of Premises" Endorsement. The policy shall not contain any intra- insured exclusions as between Insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said Insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. (b) Carried by Lessor. Lessor may maintain such liability insurance as Its deems appropriate and such insurance shall be in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 8.3 Property Insurance - Building, Improvements and Rental Value. (a) Building and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground - lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full insurable replacement cost of the Premises [City Is confirming this amount], as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. If Lessor is the insuring Party, however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be Insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, walver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Consumers for the city nearest where the Premises are located, If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an insured Loss. The obligation to carry insurance under Sections 8.3 and 8.4 may be met with self - insurance. (b) Rental Value. [INTENTIONALLY OMITTED]. (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's Property; Business interruption Insurance. (a) Property Damage. [INTENTIONALLY OMITTED]. (b) Business Interruption. [INTENTIONALLY OMITTED]. (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" of at least A -, VII Vi, as set forth in the most current issue of "Best's Insurance Guide ", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the Insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same. 8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property PAGE 5 OF 15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5/05E damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby. 8.7 indemnity. Except for Lessor's negligence orwillful misconduct, Lessee shall Indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and /or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and /or liabilities arising out of, involving, or In connection with, the use and/or occupancy of the Premises by Lessee other than as expressly provided in the PSA Agreements. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises, or from other sources or pleees, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee Is required to maintain pursuant to the provisions of paragraph 8. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and /or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever Is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional rlsk/costs that Lessor will incur by reason of Lessee's failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease. Damage or Destruction. 9.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 2 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 2 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2, in, on, or under the Premises which requires repair, remediation, or restoration. 9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessee shall, at Lessee's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect 913 Partial Damage - Uninsured Loss. If a Premises Partlal Damage that is not an Insured Loss occurs, unless caused by a negligent orwillful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessee may either: (i) repair such damage as soon as reasonably possible at Lessee's expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessor within 30 days after receipt by Lessee of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessee elects to terminate this Lease, Lessor shall have the right within 10 days after recelpt of the termination notice to give written notice to Lessee of Lessor's commitment to pay for the repair of such damage without reimbursement from Lessee. Lessor shall provide Lessee with said funds or satisfactory assurance thereof within 30 days after making such commitment, In such event this Lease shall continue in full force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessor does not make the required commitment, this Lease shall terminate as of the date specified In the termination notice. 9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessors damages from Lessee, except as provided in Paragraph 8.6. PAGE 6 OF 15 INITIALS INITIALS Q2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5105E 9.5 [intentionally omitted] 9.6 Abatement of Rent; Lessee's Remedies. (a) Abatement.; Right to Action. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration Is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs, 9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor. 10. Real Property Taxes. 10.1 Definition. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than Inheritance, personal income or estate taxes); improvement bond; and /or license fee Imposed upon or levied against any legal or equitable Interest of Lessor in the Premises or the Project, Lessors right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any Increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change In the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 10.2 Payment of Taxes. If the Premises are or become exempt from Real Property Taxes because they are leased by Lessee, a governmental agency, then Lessee shall have no obligation to pay any amount for Real Property Tax installments. However, if the Premises are not exempt from such taxes, then Lessor shall pay them. . 10.3 Joint Assessment.. 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Trade Fixtures, and all personal property of Lessee. When possible, Lessee shall cause Its Trade Fixtures, and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessors real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. There shall be no abatement of rent and Lessor shall not be liable In any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessors reasonable control or in cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment ") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessors prior written consent. (b) [Intentionally omitted] (c) [intentionally omitted] (d) [Intentionally omitted]. (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and /or injunctive relief. (f) Lessor may reasonably withhold consent to a proposed assignment or subletting If Lessee is in Default at the time consent is requested. (g) [intentionally omitted] 12.2 Terns and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessors consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee. PAGE 7 OF 15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5.5 /05E (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessors right to exercise its remedies for Lessee's Default or Breach. (c) Lessors consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) in the event of any Default or Breach by Lessee. Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessors remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall be In writing, accompanied by information relevant to Lessors determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the Intended use andlor required modification of the Premises, if any, together with a fee of $500 as consideration for Lessors considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and /or documentation as may be reasonably requested. (See also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every tern, covenant, condition and obligation herein to be observed or perforated by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Optidh granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2) 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessors prior written consent. (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedies. 13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period. (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. (c) The commission of waste, act or acts constituting public or private nuisance, and /or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee. (d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any guaranty and /or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. PAGE 8OF15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5/05E (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, otherthan those described in subparagraphs 111(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cure, then It shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion, (f) The occurrence of any of the following events: (1) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) [intentionally omitted] 13.2 Remedies. If Lessee falls to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 120% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (Iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detalner statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detalner and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and /or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, In which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and /or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the tern hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, Inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance. 13.4 [intentionally omitted] 13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 3D days following the date on which it was due for non - scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31 st day after it was due as to non - scheduled payments. The interest ( "Interest ") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4. 13.6 Breach by Lessor. PAGE 9 OF 15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5/05E (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 10 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation is such that more than 10 days are reasonably required for its performance, then Lessor shall not be in breach if performance Is commenced within such 10 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, or Lessee may elect to cure such breach at Lessee's expenses and pursue an action at law or in equity against Lessor including without limitation an action seeking specific performance of this Lease Lessee shall document the cost of said cure and supply said documentation to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation "), this Leese shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 25% of that portion of the Premises, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease In accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and /or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid bythe condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Fees. 15.1 Additional Commission.. 15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest In this Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monles to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed. 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder in connection with this Lease, and that no one is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to Indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto. 16. Estoppel Certificates. (a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party ") execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and /or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (1) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. (c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor' as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (In cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and /or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and /or covenants In this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. PAGE 10 OF 15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5-5/05E 18. Severablllty. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 19. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used In this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction. 21. Time of Essence. Time Is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and Is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered In person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing. 23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 24. Waivers. (a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any otherterm, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and /or condltlons shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment, (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 2s. [intentionally omitted] 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be Increased to $---:Of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27, Cumulative Remedies. No remedy or election hereundershall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and condltlons. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall Include the plural and vice versa. This Lease 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. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be Initiated in the county in which the Premises are located. 30. Subordination; Attomment; Non - Disturbance. 30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device "), now or hereafter placed upon the PAGE 11 OF 15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5/05E Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and /or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof. 30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure ortermination of a Security Devise to which this Lease is subordinated (1) Lessee shall, have the right to terminate this Lease or, at its election, subject to the non - disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder (but not of its obligations under the PSA Agreements) and such new owner shall assume all of Lessors obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non - Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non - disturbance agreement (a "Non - Disturbance Agreement") from the Lender which Non - Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not In Breach hereof and attoms to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non - Disturbance Agreement from the holder of any pre- existing Security Device which is secured by the Premises. In the event that Lessor Is unable to provide the Non - Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non - Disturbance Agreement. 30.4 Self - Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender In connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non - Disturbance Agreement provided for herein. 31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the some suit or recovered in a separate suit, whether or not such action or proceeding Is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attomeys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation). 32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessors agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and /or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction. 34. Signs. Lessor may place on the Premises any sign without Lessor's prior written consent so long as any such sign complies with all Applicable Requirements. 35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such Interest. 36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request. 37. [intentionally omltted] PAGE 12 OF 15 INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM MTN- 5 -5105E 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. [intentionally omitted] 40. [intentionally omitted] 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum, If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery of sums paid "under protest" with 6 months shall be deemed to have waived its right to protest such payment. 44. Authority; Multiple Parties; Execution. (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) If this Lease is executed by more than one person or entity as "Lessee ", each such person or entity shall be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document. (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 45. Conflict Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 47. Amendments, This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non - monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. 48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and /or the Arbitration of all disputes between the Parties and /or Brokers arising out of this Lease - ❑ Is ® Is not attached to this Lease. 50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and /or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES, ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. PAGE 13 OF 15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5105E WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. Executed at: r" , ", a-0 16 On: Iomd, I C V By LESSOR: HOTEL SLO, LLC, a California limited liability company By, Name Printed: A we S 4 14.t.+c Title: Manager SUTTER TUSTIN SLO, LLC, a California limited Viability parry By: 0 -. Name Printed: 1,0 N ('S 14 - I- t 5� Title: Manager Executed at: San Luis Obispo, CA On: By LESSEE: CITY OF SAN LUIS OBISPO, a municipal corporation and charter city By: Name Printed: Katie Licht'ig Title: City Manager By: Name Printed: Title: Address: Telephone:(-__) Facsimile:L_j Federal ID No. Approved as to Form i3y: Anne Russell, Interim Assistant City Attorney NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687 -8777. Fax No.: (213) 687 -8616. © Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced in any form without permission in writing. PAGE 14 OF 15 INITIALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5fO5E WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates specilled above their respective signatures. Executed at: San Luis Obispo, CA Executed at: San Luis Obispo, CA On: On: By LESSOR: By LESSEE: HOTEL SLO, LLC, CITY OF SAN LUIS OBISPO, a Califomia limited liability company a m*dnle4: ti and arter city By; By: Name Printed: Name Uchitg Title: Ma nager Title: City Manager By: SUTTER TUSTIN SLO, LLC, Name Printed: a California limited liability company Title: Address: By: Name Printed: Telephone:() Title: Manager Facsimile:( Federal ID No. Approved ap6( Fort Interim Assistant City Attorney NOTICE: These forms are often modified to meet changing roquImments of law and Industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 8th Stroot, Suite 800, Los Angeles, CA 90017, Telephone No. (213) 6878777. Fax No.: (213) 687 -8616. Copyright 2001 - By AIR Commercial Real Estate Association, All rights reserved. No part of these works may be reproduced In any form without permission in writing. PAGE 14 OF 15 INITIALS INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN- 5 -5105E 0 Y z�a� �• f ZN '04- O�O� �qy .t oaf 0000e 0 VO" �f o$ m Iff v^'o� o z -. Savo � r- r�" w V 1 • � �' ,� O n � �� w 6 O • (e � r 5O O� �~ r oil �ty"" � X025 o, po'oo �dn� :°. _ AN r Y 4 r Oti0 1 `k OyOL 00 � C* Me