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HomeMy WebLinkAboutCDC/2010-25 1 2 3 4 5 6 7 8 RESOLUTION NO. CDC/2010-25 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE A CERTAIN ASSIGNMENT AGREEMENT AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT FOR A CERTAIN PROMISSORY NOTE FOR PROPERTY LOCATED IN THE CENTRAL CITY REDEVELOPMENT PROJECT AREA WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") has 9 the authority to undertake redevelopment activities in the Central City Redevelopment Project Area 10 (the "Project Area") pursuant to the duly adopted redevelopment plan for the Project Area and to 11 acquire interest in real property in furtherance of the redevelopment goals of the Agency; and 12 WHEREAS, the Agency has currently in effect certain Investment Policies that are approved 13 by and updated by the Community Development Commission of the City of San Bernardino (the 14 "Commission") as the governing body of the Agency and are in full force and effect as of the date of 15 this Resolution that provide for the Agency to borrow funds secured in whole or in part with the 16 pooled investments as maintained from time-to-time by the Agency; and 17 WHEREAS, the Agency proposes to enter into a certain transaction as further described in 18 the Assignment of Contract as attached hereto as Exhibit "A" (the "Assignment Agreement") 19 together with the Exclusive Right to Negotiate Agreement (the "ERN") in the form as attached to 20 the Assignment Agreement in furtherance of the redevelopment powers of the Agency within the 21 Project Area; and 22 WHEREAS, the Agency intends to obtain a loan from Citizens Business Bank in a principal 23 amount equal to $16,250,000 as authorized by the Investment Policies to acquire an interest in real 24 property through the purchase of a certain promissory note secured by one or more deeds of trust on 25 real property located within the Project Area all as further authorized and permitted by the 26 Investment Policies as approved by this Commission; and 27 WHEREAS, the Agency intends to acquire the real property interests as specified above and 28 as further set forth in the Assignment Agreement in furtherance of the redevelopment purposes of P:\Agendas\Resoluljons\R~solulions\20 I 0105-03-10 Panauoni - Assignment and ERN Agreement CDC Roso.doc CDC/2010-25 1 the Agency as permitted pursuant to Health & Safety Code Sections and 33391 and 33601; and 2 WHEREAS, it is in the best interests and in furtherance of the redevelopment goals of the 3 Agency within the Project Area for this Commission to approve the documents as attached to this 4 Resolution and the transactions as contemplated therein. 5 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 6 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 7 FOLLOWS: 8 Section 1. The Commission hereby finds and determines that the recitals to this 9 Resolution as set forth above are true and correct in all respects. The Commission further finds and 10 determines that (i) the acquisition by the Agency of the contract rights identified in the Assignment 11 Agreement for the purchase of a certain promissory note constitutes the acquisition of a real 12 property interest as permitted by the Community Redevelopment Law (the "CRL" as found in 13 Health & Safety Code Section 33000, et seq.) in furtherance of the redevelopment purposes of the 14 Agency within the Project Area, and (ii) such acquisition of a real property interest does not 15 constitute the investment of Agency moneys held in reserves or sinking funds or other moneys not 16 required for the immediate disbursement pursuant to Health & Safety Code Section 33603. 17 Section 2. The Commission hereby authorizes the Interim Executive Director of the 18 Agency, or such other designated representative of the Agency, to do any and all things and take 19 any and all actions as may be deemed necessary or advisable to effectuate the purposes of the 20 Assignment Agreement together with the ERN, including making non-substantive modifications to 21 the Assignment Agreement together with the ERN for the acquisition of the real property interest as 22 identified therein. The Interim Executive Director is further authorized to enter into the loan 23 transaction with Citizens Business Bank as permitted by the Investment Policies and in furtherance 24 of the transactions as contemplated in this Resolution and the Assignment Agreement for the 25 acquisition of the real property interests located within the Project Area and as identified in the 26 Assignment Agreement. 27 Section 3. This Resolution shall take effect from and after its date of adoption by this 28 Commission. 2 P\Agendas\Resolutions\Resolutions\2010105-0J-l0 Panattoni - Assignment and ERN Agreement CDC Resodoc 1 2 3 4 5 6 CDC/2010-25 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") TO EXECUTE A CERTAIN ASSIGNMENT AGREEMENT AND EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT FOR A CERTAIN PROMISSORY NOTE FOR PROPERTY LOCATED IN THE CENTRAL CITY REDEVELOPMENT PROJECT AREA I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 7 Development Commission of the City of San Bernardino at a joint adjourned 8 thereof, held on the 5th day of May 9 Commission Members: Aves 10 MARQUEZ --1L 11 DESJARDINS x 12 BRINKER x 13 SHORETT X - KELLEY X 14 JOHNSON X 15 16 MC CAMMACK 17 18 19 meeting , 2010, by the following vote to wit: Nays Abstain Absent X Z ,JliJ;l Secretary 20 The foregoing Resolution is hereby approved this ~nr _day of May 21 22 23 24 ,2010. Patrie J. Morris, Cli' erso nity Development of the City of San Bernardino Approved as to Form: 25 26 By: \~ 27 -Agency ounsel 28 3 P:\AgendBs\Resolulions\Resolulions\2010\OS-03-10 Panattoni _ Assignmenl and ERN Agreement CDC Reso.doc CDC/2010-25 1 EXHIBIT "A" 2 ASSIGNMENT AGREEMENT 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PIAgendas\Resolulions\ResolutionsUO I 0\05.03-10 Panauoni - Assignment and ERN Agreement CDC Resodoc AGREEMENT FOR ASSIGNMENT OF CONTRACT This Agreement for Assignment of Contract (this "Alrreement") is entered into on May _,2010 ("Effective Date") by and between PANATTONl DEVELOPMENT COMPANY, INC., a California corporation ("Assil!Jlor") and the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic established as a community redevelopment agency ("Buver"). RECITALS: A. Assignor and Center Bank ("Seller") are parties to that certain Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions dated January 14,2010, a copy of which is attached hereto as Exhibit" A" (the "PSA"), whereby Assignor has the right to acquire the Seller's interest in those certain Assets, and Assignor has the right to assign such interest to Buyer, relating to the financing that encumbers the real property commonly known as a portion of the Carousel Mall, located at 295 Carousel Mall, in the City of San Bernardino, California, as more particularly described in the PSA (the "Prooertv"). B. Assignor desires to sell, transfer and assign to Buyer, and Buyer desires to acquire and assume, all of Assignor's right, title, interest, obligations and liabilities in and under the PSA, pursuant to and in accordance with the terms and conditions of this Agreement. Any initial capitalized terms not otherwise defined herein shall have the meanings set forth in the PSA. AGREEMENT: NOW THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor and Buyer hereby agree as follows: 1. Agreement to Assign. Pursuant to and subject to the terms of this Agreement, Assignor agrees to sell and assign to Buyer, and Buyer shall acquire and assume from Assignor, all of Assignor's right, title, interest, obligations and liabilities in, to and under the PSA. Pursuant to Section 12 of the PSA Assignor may freely assign its interest under the PSA to Buyer without consent of Seller. Assignor agrees to provide written notice to Seller and Escrow Agent in the manner required by Section 12 of the PSA within one (1) business day after the date Buyer gives Assignor written notice to give Seller notice of assignment of the PSA, but in no event later than two (2) days prior to the Closing under the PSA. Pursuant to the PSA, Assignor and Seller have established Escrow No. 277539 ("PSA Escrow") with Stewart Title Company, at the office listed in Section 13 below (the "Title Comoanv"). Subject only to the terms and provisions of the PSA subsequent to the Effective Date of this Assignment, nothing contained in this Assignment shall require Buyer to proceed to conclude the Closing to acquire the Seller's interests in the Assets except at the sole and absolute discretion of Buyer. 2. Initial Deposit. Concurrently with execution of this Agreement, Buyer shall wire transfer good funds in the amount of Four Hundred Thousand Dollars ($400,000.00) (the "Initial Deoosit") to Title Company for deposit into an escrow account to be established pursuant to this Agreement (the "Assil!nment Escrow"). Title Company shall hold and release the Initial Deposit pursuant to the terms of this Agreement. The Initial Deposit shall be invested in a 4848-1488-9222.1487/020858-0022 1087739.05 a04128110 federally-insured, interest-bearing account approved by Buyer, and all interest earned thereon shall accrue to the benefit of the party hereunder entitled to the Initial Deposit as further provided in Sections 3 and ~ herein. Buyer shall pay the Title Company's escrow fees for the Assignment Escrow. 3. Assignment Fee. Concurrently with Closing pursuant to the PSA, Title Company shall immediately, without further instructions from the parties, wire transfer One Hundred Thousand Dollars ($100,000.00) ("Assilmment Fee") of the Initial Deposit outside of Escrow to Assignor as partial consideration for Assignor entering into this Agreement. The Assignment Fee shall be deemed earned upon Closing under the PSA, and Buyer shall not be entitled to a refund of the Assignment Fee for any reason. Interest earnings on the dollar amount of the Assignment Fee shall accrue to Buyer from the date of deposit by Buyer of the Initial Deposit until the date that the Assignment Fee is remitted to Assignor upon compliance with the conditions contained in this Assignment for such remittance to Assignor. 4. ACQuisition Fee. Concurrently with any acquisition of fee title to the Property by Buyer or any of its successors or assigns, whether by judicial foreclosure, non-judicial foreclosure, deed-in-lieu of foreclosure or any other means, Title Company shall immediately, without further instructions from the parties, wire transfer Three Thousand Dollars ($300,000.00) ("Acquisition Fee") of the Initial Deposit outside of Escrow to Assignor as partial consideration for Assignor entering into this Agreement. The Acquisition Fee shall be deemed earned upon acquisition of fee title to the Property by Buyer or any of its successors or assigns, and Buyer shall not be entitled to a refund of the Acquisition Fee for any reason. Notwithstanding the foregoing, Buyer shall not be required to pay any Acquisition Fee to Assignor if, and only if: (a) the Property is acquired by the Buyer through involuntary and independent condemnation proceedings; or (b) the entire outstanding balance of the Loan is timely paid in full by the Borrower without any discount, and without any amendment, extension, modification or waiver of the terms of the Loan following the Effective Date, and the Buyer acquires fee title to the Property more than two (2) years following the date the Loan was paid in full. Interest earnings on the dollar amount of the Acquisition Fee shall accrue to Buyer from the date of deposit by Buyer of the Initial Deposit until the date that the Acquisition Fee is remitted to Assignor upon compliance with the conditions contained in this Assignment for such remittance to Assignor. 5. Assignment and Assumption Agreement. Concurrently with the execution of this Agreement, the parties shall each execute and deliver two (2) duplicate originals of that certain Assignment and Assumption of Purchase Agreement in the form set forth on Exhibit "B" attached hereto ("Assilmment of PSA"). 6. Exclusive Right to Negotiate Agreement. As additional consideration for Assignor entering into this Agreement, the parties each agree to execute and deliver two (2) duplicate originals of that certain Exclusive Right to Negotiate Agreement in the form of Exhibit "C" attached hereto ("ERN") on the date that Buyer acquires title to the Property pursuant to the PSA or as otherwise required by the terms of the ERN which are incorporated herein by reference. This provision shall survive the termination and expiration of this Agreement. 4848-1488-9222.1487/020858-0022 1087739.05 a04/28/10 -2- 7. Additional Documents. The parties agree to execute any additional documents that the Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement. 8. Agency Relationshio and PSA Amendment. From execution of this Agreement until Closing under the PSA, Buyer hereby engages Assignor as its exclusive consultant and agent for purposes of attempting to negotiate a reduction of the Purchase Price under the PSA and any related terms in connection therewith into an amendment to the PSA ("PSA Amendment"). Assignor shall present any proposed PSA Amendment to Buyer for review, and approval or disapproval, in Buyer's sole and absolute discretion. In the event that Buyer approves a PSA Amendment, Assignor shall be authorized to execute and deliver the approved PSA Amendment to Seller as Buyer's agent. Furthermore, upon Buyer's approval of a PSA Amendment, Buyer shall promptly comply with all obligations thereunder, including without limitation, immediately delivering any additional earnest money deposits that may be required thereunder. In the event that Buyer approves a PSA Amendment that provides for a reduction of the original Purchase Price under the PSA ($16,450,000.00), then Buyer agrees that concurrently with Closing under the PSA, Buyer shall wire transfer good funds in the amount of one-half (Y2) of the difference between the original Purchase Price and the lower Purchase Price under the PSA ("Continl!:encY Fee"), to Title Company for immediate release to Assignor without further instructions upon the occurrence of the Closing. The Contingent Fee is in addition to all of the other fees payable to Assignor as set forth above, and is not included in the funds to be released from the Initial Deposit. 9. Reoresentations and Warranties. A. Reoresentations and Warranties of Assignor. Assignor hereby warrants and represents to Buyer as follows: (i) Assignor is duly organized, existing, and in good standing under the laws of California. Assignor has full right, title and authority to enter into this Agreement, and no other party has any right, option, interest, or claim to all or any of Assignor's interest in the PSA, and Assignor's rights as "Buyer" under the PSA have not been heretofore transferred, assigned, conveyed or sold. (ii) To Assignor's actual knowledge, the PSA is in full force and effect and Assignor has not committed a material default under the PSA. Assignor has received no written notice from the Seller of any default under the PSA. (iii) Assignor has the right pursuant to the PSA to assign its interests therein to any third party including Buyer without the requirement to seek the prior approvals of Seller and but with prior written notice to Seller and Escrow Agent (as defined in the PSA) all as provided in Section 12 of the PSA. (iv) The person signing below on behalf of Assignor represents that he or she is duly authorized to execute this Agreement and to bind Assignor. Assignor further represents that it has the capacity to enter into this Agreement. 4848.1488.9222.1487/020858-0022 1081739.05 a04/28/1O -3- The phrase "Assilmor's actual knowledl!e" means the current actual knowledge of Mark D. Payne, without conducting any investigations whatsoever, or inquiry or review of any files in Assignor's possession or control in connection with this transaction or the making of the representations and warranties contained in this Section. Buyer agrees that Mark D. Payne shall not be personally liable for any breaches of the Assignor's representations and warranties. B. No Further Reoresentations. Buyer acknowledges and agrees that, except as expressly set forth in this Agreement, neither Assignor nor any partner, employee, agent or representative Assignor has made, and Assignor is not liable or responsible for or bound in any manner by any express or implied representations, warranties, covenants, agreements, obligations, guarantees, statements, information or inducements pertaining to the PSA, Assets or the Property or any part thereof; the value, nature, quality or condition of the Property, the suitability of the Assets or Property for any uses contemplated by Buyer; compliance of or by the Property's operation with any laws, rules, ordinances or regulations of any applicable governmental authority, including, without limitation, any such laws, rules, ordinances or regulations concerning environmental protection, pollution or land use; the environmental condition of Property, the income, expenses or operation thereof and the value of profitability thereof; the adequacy and workmanship of construction; the quality and composition of materials incorporated in construction; the current and future zoning of the Property; the priority, validity or enforceability of the Loan Documents, any defenses, rights or offsets the Borrower may have under the Loan Documents or any other matter or thing whatsoever with respect thereto. Buyer acknowledges, agrees, represents and warrants that it has had or will have such access to the Assets and Property and due diligence matters and to information data relating to the Assets and Property and due diligence matters as Buyer considers necessary, prudent, appropriate or desirable for the purposes of this transaction and that Buyer and its employees, agents and representatives have or will have inspected, examined, investigated, analyzed and appraised all of the same and all other matters it has determined are necessary to assume the PSA and purchase the Assets and analyze the Property. Without limiting the foregoing, Buyer acknowledges and agrees that, in entering into this Agreement, Buyer has not been induced by and has not relied upon any representations, warranties or statements, whether express or implied, written or verbal, made by Assignor or any partner, agent, employee or other representative of Assignor, or any other person, which are not expressly set forth in this Agreement, whether or not such representation, warranty or statement was made orally or elsewhere in writing. Without limiting the foregoing, Buyer acknowledges and agrees it has been informed by Assignor that the Property may contain some materials in and under it that are considered "toxic" or "hazardous" or otherwise be injurious to persons and may require remediation or repair pursuant to federal, state or local laws, the nature and extent of which are unknown to Assignor. Without limiting the foregoing, the parties furthermore expressly acknowledge and agree that, except as expressly set forth in this Agreement, Buyer is acquiring the Assignor's interest under the PSA, the Assets and Property; in their "AS IS," "WHERE IS" and "WITH ALL FAULTS" condition. In addition to, and without in any way limiting the foregoing, or anything in this Agreement, Buyer acknowledges and agrees that upon assignment and transfer of the PSA, and Assets, Buyer shall be subject to the terms, conditions and provisions of Section 7 of the PSA. C. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF ASSIGNOR SET FORTH IN SECTION 9.A, UPON EXECUTION OF THIS AGREEMENT 4848-1488-9222.1487/020858-0022 1087739.05 a04/28110 -4- BUYER HEREBY FULLY AND FOREVER RELEASES, ACQUITS AND DISCHARGES ASSIGNOR OF AND FROM AND HEREBY FULLY AND FOREVER WAIVES ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION, SUITS, PROCEEDINGS, DEMANDS, RIGHTS, DAMAGES, COSTS, EXPENSES OR OTHER COMPENSATION WHATSOEVER WHETHER KNOWN OR UNKNOWN, DIRECT OR INDIRECT, FORESEEABLE OR UNFORESEEABLE, ABSOLUTE OR CONTINGENT, THAT BUYER NOW HAS OR MAY HAVE WHICH MAY ARISE IN THE FUTURE ARISING OUT OF, DIRECTLY OR INDIRECTLY OR IN ANY WAY CONNECTED WITH THE ASSETS, PSA AND/OR THE PROPERTY OR ANY OF THE MATTERS RELATING TO THE ASSETS, PSA AND/OR THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE MATTERS DESCRffiED IN SECTION 9.B ABOVE. WITHOUT LIMITING THE SCOPE OR GENERALITY OF THE FOREGOING RELEASE AND WAIVER PROVISIONS, THIS PROVISION SHALL SPECIFICALLY INCLUDE AND COVER (I) ANY CLAIM FOR OR RIGHT TO INDEMNIFICATION, CONTRIBUTION OR OTHER COMPENSATION BASED ON OR ARISING UNDER ANY ENVIRONMENTAL LAW NOW OR HEREAFTER IN EFFECT, AND (II) ANY CLAIM FOR OR BASED ON TRESPASS, NUISANCE, WASTE, NEGLIGENCE, NEGLIGENCE PER SE, STRICT LIABILITY, ULTRA HAZARDOUS ACTIVITY, INDEMNIFICATION, CONTRIBUTION OR OTHER THEORY ARISING UNDER THE COMMON LAW OF THE STATE OF CALIFORNIA (OR ANY OTHER APPLICABLE JURISDICTION) OR ARISING UNDER ANY APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, AND SPECIFICALLY WAIVES THE PROTECTION OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR". Buyer's Initials Assignor's Initials 10. Remedies. In the event of a breach by either party of this Agreement, the other party shall have the right to pursue any and all remedies available at law or equity, including without limitation damages and specific performance. 11. Indemnification. A. Bv Buver. Upon execution of this Agreement, Buyer hereby agrees to indemnify, defend (with counsel selected by Buyer) and hold harmless the Assignor and its affiliates, subsidiaries, parent companies, principals, representatives, partners, directors, members, officers, shareholders, employees, consultants, attorneys and agents from any and all claims, actions, losses, damages, offsets, liabilities, fines, penalties, costs, expenses and fees including without limitation attorney's fees, of any kind arising from or in any way relating to (i) this Agreement, (ii) the Property, (iii) the Assets; and/or (iii) the PSA. The terms of this provision shall survive the completion of the transactions contemplated by this Agreement and/or the termination of this Agreement. 4848-1488-9222.1487/020858-0022 1087739.05 a04/28/10 -5- B. Bv Assignor. Upon execution of this Agreement, Assignor hereby agrees to indemnify Buyer for any a judgment against Buyer that relates to or arises from the intentional conduct of Assignor occurring prior to the Effective Date relating to Assignor's negotiation and execution of the PSA, Assignor's prior agreement to purchase the Property, or Assignor's efforts to assign the PSA. This obligation to indemnify shall be deemed to be an obligation to indemnify, and not an obligation to provide a defense; however, Assignor shall indemnify Buyer for the reasonable cost of defense, including attorneys fees upon a determination that Buyer is entitled to indemnification. In no event shall the total amount of indemnification, including cost of defense, exceed and amount equal to one-half (1/2) of the amount actually paid to Assignor by Buyer as the Assignment Fee. 12. Broker Fees. Buyer and Assignor each warrant and represent to each other that, except for the Finder listed in the PSA, whose commissions are the responsibility of Seller, no real estate broker was involved in the transactions contemplated by this Agreement. Notwithstanding anything to the contrary in this Agreement, Assignor shall remain responsible for payment of any broker or finder's fee due to Cushman and Wakefield upon Closing occurring under the PSA. Assignor shall indemnify Buyer against any claim of any broker claiming by, through or under Assignor. Buyer shall indemnify Assignor against any claim of any broker claiming by, through or under Buyer. These warranties and representations shall survive the termination of this Agreement and the completion of the transactions contemplated hereby. 13. Notices. All notices or other communications required or permitted under this Agreement shall be in writing, and shall be delivered to the receiving party at the address below by: (i) personal delivery (including by means of professional messenger service); (ii) nationally recognized overnight courier; (iii) registered or certified mail, postage prepaid, return receipt requested; or (iv) facsimile transmission, electronic mail, or electronic transmission of a PDF document followed by delivery of a hard copy through one of the methods outlined in (i)-(iii) above, and shall be deemed received upon the date of receipt (or refusal to accept delivery) thereof; provided, however, that notices received after 5:00 p.m. California Time or on a non- business day shall be deemed received on the next business day. As used herein, a "business dav" is any day that is not a Saturday, Sunday, legal holiday or day on which banking institutions are generally authorized or obligated by law to close in the State of California. Any time period not specifically referring to business days shall be measured in calendar days; however, if any period of time set forth in this Agreement expires on a non- business day, then such expiration date or date for performance shall be on the next business day. Notice of change of address shall be given by written notice in the manner detailed in this Section. If to Assignor: Panattoni Development Company, Inc. 34 Tesla, Suite 200 Irvine, CA 92618 Attention: Mark D. Payne Senior Vice President Phone: (858) 531-2602 Fax: (916) 669-4841 E-mail: mpayne@panattoni.com 4848-1488-9222.1487/020858-0022 -6- 1087739.05804/28/10 With a copies to: CVM Law Group, LLP 34 Tesla, Suite 200 Irvine, CA 92618 Attention: Fredric Albert, Esq. Phone: (949) 296-2992 Fax: (916) 669-4860 E-mail: falbert@cvmlaw.com Rutan & Tucker, LLP 611 Anton Blvd., Suite 1400 Costa Mesa, CA 92626 Attention: Hans VanLigten, Esq. Phone (714) 662-4640 Fax: (714) 546-9035 Email: hvanligten@rutan.com If to Buyer: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Attention: Emil A. Marzullo Phone: (909)663-1044 Fax: (909) 888-9413 Email: emarzullo@sbrda.org With a copy to: Lewis Brisbois Bisgaard & Smith LLP Agency Counsel, Redevelopment Agency of the City of San Bernardino 650 East Hospitality Lane, Suite 600 San Bernardino, CA 92408 Attention: Timothy J. Sabo, Agency Counsel Phone: (909) 381-7187 Fax: (909) 387-1138 Email: sabo@lbbslaw.com If to Title Company: Stewart Title of California, San Diego Division 7676 Hazard Center Drive, Suite 1400 San Diego, California 92108 Attn: Mr. Frank Green Phone: (619) 692-1600 x3035 Fax: (619) 398-8149 Email: fgreen@stewart.com 4848-1488-9222.1487/020858-0022 -7- 1087739.05 a04128/1O 14. Miscellaneous. A. Authoritv. (i) The person signing below on behalf of Buyer has been du1y authorized to execute this Agreement and to bind Buyer. The Buyer further represents that it has the capacity to enter into this Agreement and that this Agreement is binding and enforceable against Buyer. (ii) The person signing below on behalf of Assignor has been du1y authorized to execute this Agreement and to bind Assignor. Assignor further represents that it has the capacity to enter into this Agreement and that this Agreement is binding and enforceable against Assignor. B. Entire Al!feement. This Agreement, including the exhibits attached hereto, contains the entire agreement between Assignor and Buyer and all other representations, negotiations and agreements, written and oral, including any letters of intent which pre-date the Effective Date hereof, with respect to the Property and/or the PSA, are superseded by this Agreement and are of no force and effect. This Agreement may be amended and modified only by instrument, in writing, executed by Assignor and Buyer. All exhibits to this Agreement are fully incorporated herein as though set forth at length. C. Assignment. Buyer shall be strictly prohibited from assigning its rights or obligations under this Agreement without the prior written consent of Assignor which may be withheld in Assignor's sole and absolute discretion. D. Parties Bound. This Agreement shall be binding upon and inure to the benefit of Assignor and Buyer, their heirs, successors, administrators and permitted assigns, subject to the provisions and limitations on assignment set forth above. E. Aoolicable Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of laws principles thereof. Any action brought to interpret or enforce this Agreement shall be brought in a court of competent jurisdiction in the County of San Bernardino, and each party hereto hereby consents to jurisdiction and venue in such court. F. Partial Invaliditv. In the event that any section or portion of this Agreement is determined to be unconstitutional, unenforceable or invalid, such section or portion of this Agreement shall be stricken from and construed for all purposes not to constitute a part of this Agreement, and the remaining portion of this Agreement shall remain in full force and effect and shall, for all purposes, constitute this entire Agreement. G. Construction of Al!feement. All parties hereto acknowledge that they have had the benefit of independent counsel with regard to this Agreement and that this Agreement has been prepared as a result of the joint efforts of all parties and their respective counsel. Accordingly, all parties agree that the provisions of this Agreement shall not be construed or interpreted for or against any party hereto based upon authorship. The captions contained herein are for convenience only and are not a part of this Agreement. The use of any 4848-1488-9222.14871020858-0022 1087739.05 a04/28110 -8- gender shall be deemed to refer to the appropriate gender, whether masculine, feminine or neuter, and the singular shall be deemed to refer to the plural where appropriate, and vice versa. H. Counteroarts. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original, but all such counterparts shall constitute one and the same instrument. Executed copies hereof may be delivered by facsimile or email of a PDF document, and, upon receipt, shall be deemed originals and binding upon the parties hereto. Without limiting or otherwise affecting the validity of executed copies hereof that have been delivered by facsimile or email of a PDF document, the parties will use their commercially reasonable efforts to deliver originals as promptly as possible after execution. Signature pages may be detached and reattached to physically form one document. I. Time. Time is of the essence of this Agreement. J. Attornevs' Fees. In the event of any litigation between the parties hereto concerning this Agreement, the subject matter hereof or the transactions contemplated hereby, the losing party shall pay the reasonable attorneys' fees, expert witness fees, and litigation expenses incurred by the prevailing party in connection with such litigation including fees and costs incurred on appeal. K. Third Parties. Nothing in this Agreement, whether expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement upon any other person other than the parties hereto and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third parties any right of subrogation or action over or against any party to this Agreement. This Agreement is not intended to and does not create any third party beneficiary rights whatsoever. L. No Partnership. Nothing in this Agreement shall create any partnership, agency, employment or joint venture relationship between the parties. [Signature Page Immediately Follows) 4848-1488-9222.1487/020858-0022 1087739.05 a04/28/10 -9- IN WITNESS WHEREOF, Assignor and Buyer hereby execute this Agreement as of the dates set forth below. ASSIGNOR: PANATTONI DEVELOPMENT COMPANY, INC. a California corporation By: Name: Mark D. Payne Title: Senior Vice President, Project Principal BUYER: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Name: Title: ATTEST: By: Name: Title: APPROVED AS TO FORM: Agency Counsel 4848-1488-9222.1487/020858-0022 1087739.05 a04/28/10 -10- ACCEPTANCE BY TITLE COMPANY Stewart Title of California, referred to in this Agreement as the "Title Company," hereby acknowledges receipt of one (I) fully executed counterpart of this Agreement. Title Company certifies that it has received and understands this Agreement and hereby accepts the obligations of Title Company as set forth herein, including, without limitation, its agreement to receive the Deposits and the transfer of same, in strict accordance with the terms and provisions of this Agreement and the PSA. TITLE COMPANY: STEW ART TITLE OF CALIFORNIA By: Name: Title: Date: May ,2010 4848-1488-9222.1487/020858-0022 1087739.05 a04/28110 EXHIBIT "A" COPY OF THE PSA 4848-1488-9222.1487/020858-0022 1087739.05 a04128/10 EXHIBIT A MORTGAGE LOAN PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS SELLER: CENTER BANK BUYER: PANA TTONI DEVELOPMENT COMPANY, INC. CB LOAN: 157918 ~ DEFINED TERMS Effective Date: January ]4,2010 Seller: CENTER BANK Seller's Address: 2222 West Olympic Blvd. Los Angeles, CA 90006 Attention: John Kim Telephone: (213) 637-9585 Facsimile: (213) 384-8686 E-Mail: johnk@centerbank.com Seller's Counsel: KANG, P.C. 27201 Puerta Real, Suite 465 Mission Viejo, CA 92691 Attention: John C. Kang, Esq. Telephone: (949) 387-2000 ext. ] 0] Facsimile: (949) 266-9076 E-Mail: john@kangpc.com Buyer: PANATfONI DEVELOPMENT COMPANY, INC., a California corporation Buyer '~. Address: Mark D. Payne Senior Vice President Panattoni Development Company, Inc. 34 Tesla, Suite 200 Irvine, CA 92618 Telephone: (949) 296-2945 Facsimile: (916) 669-484] E-Mail: mpayne@panattoni.com Buyer's Counsel: CVM Law Group, LLP 34 Testa, Suite 200 Irvine, CA 92618 Telephone: (949) 296-2992 Facsimile: (916) 669-4860 E-Mail: FAlbert@cvmlaw.com ~ Loan: That certain commercia] real estate loan originally made by Seller to PLACO SAN BERNARDINO, LLC, a California limited liability company ("Borrower"), as evidenced by that certain promissory note, dated February 13, 2008, in the original principal sum of Sixteen Million Four Hundred Fifty Thousand and No/I00 Dollars ($16,450,000.00) (as amended, the "Note"); Loan No. 157918. Purchase Price: Sixteen Million Four Hundred Fifty Thousand and No/IOO Dollars ($16,450,000.00) I nidal Deposit: Fifty Thousand and No/] 00 Dollars ($50,000.00) Additional Deposit: Fifty Thousand and Noll 00 Dollars ($50,000.00) Title Company: Sixty (60) days after the Opening of Escrow and Seller's representation to Buyer that Seller has delivered to Buyer all Due Diligence Matters (as defined in Section 4(b) below) in Seller's possession or control, as may be extended by an additional period of thirty (30) days pursuant to Section 4(c) below. Within (10) days after the expiration or waiver of the Due Diligence Period. Stewart Title of California, San Diego Division 7676 Hazard Center Drive, Suite 1400 San Diego, CA 92]08 Attention: Mr. Frank Green Telephone: (619) 692-]600 ext. 3035 E-Mail: fgreen@Stewart.com Due Diligence Period: Closing Date: Escrow Agent: Stewart Title of California, San Diego Division 7676 Hazard Center Drive, Suite 1400 San Diego, CA 92108 Attention: Ms. Rhonda Bernardini Te]ephone: (619) 692-1600 ex!. 3012 E-Mail;rbemardini@stewart.com Finder: AAP DEVELOPMENT CA, LLC, a California limited liability company iii 'V' Exhibits and Schedules: Exhibit "A": Loan Oocwnents Exhibit "B": ALTA Lender's Title Insurance Policy Exhibit "C": Assignment ofOeed of Trust Exhibit "0": Assignment of Loan Oocwnents iv ~ MORTGAGE LOAN PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS THIS MORTGAGE LOAN PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this "Agreemenf') is made and entered into as of the Effective Date by and between Buyer and Seller. RECIT ALS A. Seller has previously made the Loan to Borrower, as evidenced by the Note. The Note is secured by, among other collateral, that certain deed of trust (the "Deed of Trllsf'), dated as of February 13,2008, and recorded on February 15, 2008, as Document No. 2008-0070328, in the Official Records of San Bernardino County, California (the "Official Records"), encumbering certain real property located at 295 Central City Mall, in the city of San Bernardino, California 9240 I. The real property encumbered by the Deed of Trust is referred to as the "Lund," and all improvements located thereon are referred to collectively as the "Project." The Project and Land are referred to collectively as the "Real Property." The Real Property and certain related personal property are referred to collectively as the "Property." The Note, Deed of Trust and certain other documents evidencing the Loan are more particularly described in Exhibit "A" attached to this Agreement and are referred to collectively as the "Loan Docllments." B. Seller desires to sell the Loan, Loan Documents, any other agreement, instrument, guaranty and such other documents executed in connection with the Loan, any subsequent modification thereto and all of the Seller's loan files (including, without limitation, any certificates, legal opinions or other documents related to, or evidencing, the Loan, appraisals, insurance certificates, borrower estoppel certifications and subordination agreements for leases, financial statements and operating statements, credit reports, lender's title insurance policy, engineering report, soils report, environmental audit report, architect's certificate as applicable to the Loan, and all infonnation that is maintained by Seller in the ordinary course of business in connection with the origination, servicing and administration of the Loan) (collectively, the "Loan File") and all of Seller's right, title and interest therein (collectively, the "Assets") to Buyer, and Buyer desires to purchase the Assets from Seller, on the terms and conditions of this Agreement. It is understood and agreed that the Assets shall be deemed to exclude, all privileged or proprietary communications to or from Seller (collectively, the "Exclllded Materials"). NOW THEREFORE, for valuable consideration, Buyer and Seller (referred individually as a "Party" and collectively as the "Parties") agree as follows: I. SALE OF ASSETS. Seller agrees to sell the Assets to Buyer, and Buyer agrees to purchase the Assets from Seller, at the Purchase Price and on the other terms and conditions contained in this Agreement. ? 2. PURCHASE PRICE. The Purchase Price shall be paid in accordance with the provisions set forth below. (a) Initial Deposit. Concurrently with the Opening of Escrow, Buyer shall deliver to Escrow Agent, in Immediately Available Funds (as defined below), the Initial Deposit. As used in this Agreement, "Immediately Available Funds" means an amount credited by wire transfer into Escrow Agent's or Seller's bank account as required under this Agreement. (b) Additional Deoosil. Buyer will, concurrently with Buyer's delivery of a Notice of Approval (as defined in Section 4(b)), deliver the Additional Deposit to Escrow Agent in Immediately Available Funds. (c) Aoplicabilitv of Deposit. As used in this Agreement, the term "Deposif' refers collectively to the Initial Deposit and Additional Deposit, together with all interest earned thereon. If Escrow closes for the purchase and sale of the Assets, the Deposit shall be applicable to the Purchase Price. (d) Balance of Purchase Price. Not less than one (I) Business Day before the Closing Date, Buyer shall deposit into Escrow, in Immediately Available Funds, an amount equal to the balance of the Purchase Price (and such additional amounts as may be required for closing prorations). (e) Interest on the Deoosit. Interest on the Deposit while held in Escrow shall be for the benefit of Buyer. Seller is not required to pay any interest on the Deposit while the Deposit is held by Seller outside of Escrow. 3. ESCROW. DEPOSIT AND CLOSING. (a) Ooeninll: of Escrow. For purposes of this Agreement, the escrow ("Escrow") shall be deemed opened ("Opening of Escrow") on the date that Escrow Agent receives (i) a copy of this Agreement fully executed by Buyer and Seller, and (ii) the Initial Deposit. Buyer and Seller shall use their best efforts to cause the Opening of Escrow to occur within one (I) Business Day after the Effective Date. Escrow Agent shall promptly notify Buyer and Seller in writing of the date of the Opening of Escrow. Buyer and Seller agree to execute, deliver and abide by any reasonable or customary supplemental escrow instructions or other instruments reasonably required by Escrow Agent to consummate the transaction contemplated by this Agreement; provided, however, no such instruments shall conflict with, amend or supersede any portion of this Agreement. If there is any conflict or inconsistency between the terms of such instruments and the terms of this Agreement, then the terms of this Agreement shall control. (b) Deoosit. Concurrently with Buyer's execution and delivery of this Agreement, Buyer shall deposit or cause to be deposited with Escrow Agent the Initial Deposit in Immediately Available Funds. Escrow Agent shall immediately invest the Deposit in a federally-insured, interest-bearing account, and all interest accruing thereon shall be credited to the Party entitled thereto. If Buyer disapproves or is deemed to have disapproved of its investigations regarding the Assets during the Due Diligence Period, then Buyer shall be entitled to an immediate refund of the Initial Deposit without further instructions of Seller and Buyer. -2- 'f/ Upon Buyer's delivery of a Notice of Approval (as defined in Section 4(b)) and the Additional Deposit, the Deposit shall be nomefundable, and shall, upon receipt of Buyer's Additional Deposit, be immediately released to Seller without further instructions of Seller and Buyer. If Escrow fails to close due to a default by Seller or a failure of a condition precedent to the Close of Escrow set forth in Section 4(i), Buyer shall be entitled to the refund of the Deposit, and each Party shall be released from any further obligations hereunder except for such indemnity and other obligations of each Party that expressly survive the termination or Closing. (c) Closinll. The close of Escrow (the "Close of Escrow" or "Closing") shall occur on the Closing Date. 4. BUYER'S DUE DILIGENCE: CONomONS TO CLOSE OF ESCROW: CLOSING DELIVERIES. (a) Loan File. Within ten (10) days after the Opening of Escrow, to the extent not previously provided to Buyer, Seller shall provide to Buyer copies of, or otherwise make available to Buyer for inspection and review, all the Due Diligence Matters in Seller's possession or control, together with a certificate representing to Buyer that Seller has provided all such materials to Buyer. In addition, from and after the Effective Date, Seller shaH provide prompt written notice to Buyer (but not later than two business days after SeHer becomes aware thereof) (A) of any default or event of default under the Loan Documents occurring after the Effective Date, (B) of any notice from Borrower or any guarantor thereof with respect to the Loan (including any claim by any such party that such party has any affirmative defense, claim or offset with respect to the Loan, affirmative actions against Seller or any claim of invalidity of the Loan Documents for any reason), (C) upon becoming aware of any casualty at the Real Property, of any condemnation or other govermnentaI proceeding against the Real Property, the Borrower or any guarantor thereof, any litigation commenced with respect to the Real Property, Borrower or the guarantor thereof, or any default by any tenant at the Real Property, or (D) of Borrower or any guarantor thereof being subject to any proceeding under Title 11 of the United States Code (the "Supplemental Due Diligence"). (b) Buver's Due Dilie:ence. During the Due Diligence Period, Buyer will analyze the feasibility of the acquisition of the Assets. Such investigations shall include, without limitation, and subject to the provisions of Section 4(c) of this Agreement, an investigation and review of the Loan File, underlying title exceptions, including any declaration of covenants, conditions and restrictions and development agreement, existing entitlements for the Project, geologic, engineering and environmental reports, all plans and such other aspects regarding the Real Property, any and all Supplemental Due Diligence, and all other matters pertaining to the Loan (collectively, the "Due Diligence Matters"). Upon the expiration of the Due 'Diligence Period, if Buyer has approved of its studies and investigations, Buyer shall deliver to Escrow Agent and Seller a notice of approval ("Notice of Approvar). If Buyer delivers a Notice of Approval, Buyer shall concurrently deliver the Additional Deposit, in Immediately Available Funds, to Escrow Agent. The failure of Buyer to deliver Notice of Approval, together with the Additional Deposit by the expiration of the Due Diligence Period will be deemed to be Buyer's deemed disapproval of its investigations during such Due Diligence Period, and in such case, this Agreement shall automatically terminate and the provisions of Section 3(b) shall apply. - 3- ~ contingencies or conditions precedent of any kind whatsoever, except as expressly set forth in Section 4(i)4(e). (e) Title Insurance Endorsement. It shall be a condition to Buyer's obligation to proceed to Closing and to purchase the Assets that, at the Close of Escrow, Escrow Agent shall cause the Title Company to commit to issue a CLTA Endorsement No. 104.1 or 104.13 (at Buyer's election) to Buyer insuring the validity of the assignment of Seller's beneficial interest under the Deed of Trust to Buyer, subject only to (i) the title exceptions which are shown in the existing ALTA Lender's Policy of Title Policy issued to Seller by LandAmerica Lawyers Title on February 15,2008 (Policy No. 9210423A) in connection with Seller's origination of the Loan and more particularly described in Exhibit "B" attached to this Agreement (the "ALTA Lender's Title InsurfUlce Policy"); and (ii) any exceptions which are directly or indirectly caused or created by or attach through Buyer. The title insurance endorsements described in this Section are referred to as the "Title Endorsements." (t) Termination Unon Failure of Title Insurance Condition. This Agreement and the Escrow shall terminate upon Buyer's election (in its sole and absolute discretion) to terminate this Agreement for any reason prior to the expiration of the Due Diligence Period pursuant to Section 4(b), Section 4(c), the failure of the condition set forth in Section 4(e) above to be satisfied at the Close of Escrow (unless the failure ofsuch condition in Section 4(e) was the result of any act or omission by Buyer), or if Buyer elects to terminate this Agreement pursuant to Section 10. Upon any such termination, (i) each Party shaIl promptly execute and deliver to Escrow Agent such documents as Escrow Agent may reasonably require to evidence such termination; (ii) Escrow Agent shall return all documents to the respective parties who deposited such documents with Escrow Agent; (iii) each of the Parties shall pay one-half of the Escrow Agent's and Title Company's respective cancellation fees, if any; (iv) Buyer shall return to Seller all documents relating to the Assets; (v) Escrow Agent shall return to Buyer all funds deposited into Escrow by Buyer; (vi) Escrow Agent shall return any part of the Deposit held by Escrow Agent to Buyer, with interest, after deducting Buyer's share of the cancellation fees described in clause (iii) above; (vii) Seller shall return any part of the Deposit received by Seller, without interest; and (viii) all of the respective obligations of Buyer and Seller under this Agreement shall terminate, except as otherwise expressly provided in this Agreement. (g) Limitation on Buver's Remedies. If Buyer claims that Seller has failed to perform any of its obligations under this Agreement on or before the Close of Escrow, then (i) Buyer shall give written notice of such breach to Seller, which notice shall specify in reasonable detail the nature of Seller's breach; and (ii) Seller shall not be deemed to be in breach or default under this Agreement if Seller causes such breach to be cured within ten (IO) Business Days after Seller's receipt of such notice from Buyer. If Seller's breach remains uncured beyond the ten (10) Business Day cure period described in this Section, Buyer agrees that its sole and exclusive remedy on account of such breach shall be (at Buyer's election, in its sole and absolute discretion) either (A) to terminate this Agreement by giving written notice of such termination to Seller within three (3) Business Days after the expiration of such ten (10) Business Day cure period, in which event the Parties shall take the actions described in Section 4(t) above and Escrow Agent shall refund to Buyer the full amount of the Purchase Price paid by Buyer; provided in such event, Seller shall pay all costs set forth in Section 4(f)(iii); or (A) to seek specific performance of Seller's obligations under the terms of this Agreement and injunctive - 5- 'P' relief. Buyer acknowledges and agrees (1) that the remedies set forth in this Section shall constitute the sole and exclusive remedies available to Buyer in the event of a breach by Seller of any of its obligations under this Agreement prior to the Close of Escrow; and (2) except those remedies expressly set forth herein, Buyer waives all other rights and remedies, whether at law or in equity, that Buyer would otherwise have against Seller arising out of or as a result of such breach by Seller, including all rights to any consequential or other damages of any kind, except to the extent attributable to Seller's intentional acts, gross misconduct or fraud. (h) Transfer of Loan Documents bv Seller. Seller shall transfer and assign the Assets to Buyer, on a servicing released basis, by executing and acknowledging (where appropriate) and delivering to the Escrow Agent the following documents and items on the Closing Date: (i) The original Note, together with a separate allonge endorsement to the Note, which endorsement shall be executed by Seller in favor of Buyer, or order, without recourse, representation or warranty of any kind, except as may be expressly set forth in this Agreement; (ii) The original or conformed copy of the Deed of Trust; (iii) The original or confonned copy of any filed or recorded UCC-l Financing Statement, ifany; (iv) The ALTA Lender's Title Insurance Policy issued by the Title Company; (v) All other Loan Documents that are identified in Exhibit "A" attached to this Agreement; (vi) An Assignment of Deed of Trust (the "Assignment of Deed of Trusf') in the form of Exhibit "c" attached to this Agreement executed by Seller in favor of Buyer; (vii) A General Assignment of Loan Documents dated as of the Close of Escrow (the "Assignment of Loan Documents") in the form of Exhibit "D" attached hereto executed by Seller in favor of Buyer. (viii) A Notice to Borrower and Guarantors, indicating the Loan has been sold to Buyer. (i) Conditions to Closing. Notwithstanding anything in this Agreement to the contrary, Buyer's obligation to purchase the Assets shall be subject to and contingent upon the satisfaction (or waiver by Buyer) of each of the following conditions precedent, prior to or on the Closing: (i) All documents necessary to consummate the transactions contemplated in this Agreement shall have been executed and delivered by Seller as required by Section 4(h) of this Agreement; -6- ~ (ii) There shall not have been any casualty or condemnation with respect to the Real Property or, if any has occurred, Buyer has waived its rights to terminate this Agreement pursuant to Section 10 hereof; (iii) Neither Buyer nor Seller shall have terminated this Agreement pursuant to the terms of this Agreement; (iv) Each and every representation and warranty of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing; and (v) The Title Company shall be irrevocably committed to issue the Title Endorsements. (j) Closing Costs and Charges. (i) Closing Costs. Each Party shall pay one-half (112) of the Escrow, recording, closing costs and such other costs as is customary in the County of San Bernardino. Seller agrees to pay the cost of the Title Endorsements. (ii) Attornevs' Fees. Each Party shall be responsible for payment of the fees and expenses of each respective Party's counsel relating to this Agreement and the transactions contemplated by this Agreement. (iii) Due Diligence Costs. All inspections, reviews, examinations, and other activities at any time undertaken by Buyer in connection with its review and inspection of the Due Diligence Matters or the Property shall be made or performed by Buyer at its sole cost and expense. (k) Denosit of Documents bv Seller. Not later than I :00 p.m. on the Closing Date, Seller shall deposit into Escrow the following items, each of which shall be duly executed and acknowledged by Seller, where appropriate or required: (i) The documents and items described in Section 4(h) above; and (ii) All other documents that may reasonably be required by Escrow Agent to close the Escrow in accordance with this Agreement. Notwithstanding anything to the contrary contained in this Agreement, the Assignment of Deed of Trust and Assignment of Loan Documents, and Seller's endorsement of the Note shall not be deemed to be effective until the Close of Escrow. (I) Denosit of Documents and Funds bv Buver. Not later than I :00 p.m. on the Business Day prior to the Closing Date, Buyer shall deposit into Escrow or cause to be deposited into Escrow the following funds and items, each of which documents shall be duly executed and acknowledged by Buyer, where appropriate or required: (i) The cash balance of the Purchase Price in Immediately Available Funds, plus an amount equal to such other fees, costs, and charges as Buyer may be required to -7 - 'F' pay under the terms of this Agreement, which amount shall be paid in Immediately Available Funds; (ii) A counterpart of the Assignment of Loan Documents executed by Buyer; and (iii) All other funds and documents that may be reasonably required by Escrow Agent to close the Escrow in accordance with this Agreement. (m) Deliverv and Recordation of Documents and Delivery of Funds at Closing. Provided that the conditions to the Close of Escrow set forth in this Agreement have been satisfied or waived in writing by the Party for whose benefit the condition has been established, on the Closing Date, and Seller's counsel has given Escrow Agent verbal or written approval to proceed, Escrow Agent shall conduct the closing of the sale of the Assets to Buyer by recording and distributing the following documents and funds in the following manner: (i) Record the Assignment of Deed of Trust in the Official Records; (ii) Cause the original Title Endorsements to be delivered to Buyer; (iii) Deliver to Buyer the original Assignment of Loan Documents and the other Loan Documents delivered by Seller to Escrow; (iv) Deliver to Seller the counterpart of the Assignment of Loan Documents executed by Buyer; (v) Pay the costs and charges referred to in Sections 4(j); and (vi) Disburse the net Purchase Price to Seller in Immediately Available Funds. (n) Deliverv After Closing. At the Closing, Seller shall deliver to Buyer the portion of the Loan File not previously delivered to Buyer by Escrow Agent pursuant to Section 4(m) above. (0) Loan Prorations. Payments of principal and/or interest payable pursuant to the Loan or any of the Loan Documents shall be the property of Seller and shall not be prorated as between Buyer and Seller if received by Seller on or before the Closing. Notwithstanding the foregoing, Buyer shall be entitled (i) to any principal or interest paid prior to the Closing and attributable to the period after the Closing, and (ii) all amounts paid under the Loan Documents after the Closing Date. There shall be no proration of amounts due and payable for the period prior to the Closing which have not been paid by Borrower. Any and all amounts received by Seller after the Closing attributable to payments made under the Loan Documents accruing after the Closing Date shall be delivered to Buyer within two (2) Business Days after Seller's receipt thereof. .8. y 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that as of the date of execution of this Agreement and as of the Close of Escrow: (a) Existence and Authority. Seller is validly existing and in good standing under the laws of the State of California. Seller has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and to sell the Assets free and clear of all liens, and the Persons executing this Agreement on behalf of Seller are authorized to do so. (b) Aoorovals and Consents. No approvals or consents of any Person not previously obtained are required in order for Seller to enter into this Agreement and to perform its obligations under this Agreement. (c) No Assil!IlInent. Seller is the current owner and holder of the Note, Deed of Trust, and other Loan Documents, and Seller has not previously transferred the Note, Deed of Trust, or other Loan Documents to any third Person, other than the sale of the Loan Documents to Buyer pursuant to this Agreement. (d) Outstandinl! Balance. According to Seller's records maintained by Seller in the ordinary course of business, and to Seller's actual knowledge based upon such records, the unpaid principal balance of the Note is Sixteen Million Four Hundred Fifty Thousand and No/IOO Dollars ($16,450,000.00) as of the date of this Agreement. (e) Loan Files. Other than the Excluded Materials, the Loan File contains aII information, reports, notices, appraisals, insurance information and other materials relating to the Loan in SelIer's possession or control. (f) Comoleteness of Loan Documents. Seller hereby represents and warrants as of the date hereof and as of the Closing Date, that (i) Seller has given or will give Buyer copies of all of the Loan Documents in SelIer's possession or control; (ii) the copies of the Loan Documents are true and complete copies thereof; (iii) to the best of its knowledge, each of such instruments is in fuII force and effect, binding, and unmodified in accordance with their terms; other than as are set forth in the Loan Documents; and (iv) there are no oral or written modifications or amendments to the Loan and no rights of Seller thereunder have been waived or modified, except as otherwise reflected in the Loan File. (g) Litil!ation. Seller has not filed or commenced any action, suit, arbitrations or proceeding before any court, arbitrator or any governmental or administrative agency with respect to the Assets and there are no orders, injunctions, awards, judgments or decrees outstanding against, affecting or relating to the Assets. Except as otherwise disclosed by Seller to Buyer in writing, to the knowledge of Seller, there are no actions, suits or administrative, arbitration or other proceedings or governmental investigations (collectively, "Cases"), pending or threatened, against SelIer as of the date hereof by or before any court, governmental or regulatory authority or by any third party, in each case relating to the Assets, other than Cases and investigations that are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect (as defined below). .9. '7 (h) Disclosure. The representations and warranties of Seller set forth in this Agreement or any exhibit, schedule, list or other document delivered by Seller to Buyer pursuant hereto, do not contain any untrue statement of material fact or omit to state any material fact necessary in light of the circumstances under which they were made to make the statements contained herein not misleading. (i) Compliance with Aoolicable Law. With respect to the Assets, to the knowledge of Seller, Seller has not received any notice, as of the date hereof, of any violation of applicable Laws in connection with Seller's origination or servicing of the Assets that could, individually or in the aggregate, reasonably likely to have a Material Adverse Effect. If Seller becomes aware of any such allegations after the date hereof, Seller shall, within two (2) Business Days, notify Buyer thereof. (j) Seller Not Aware of Borrower Defenses. Seller is not presently aware of any valid defenses to payment of the Loan that may be available to Borrower. To Seller's actual knowledge, Seller has performed and complied with all the agreements, conditions, modifications and amendments contained in the Loan Documents required to be performed or complied with and, Seller is not aware of any default in any of its responsibilities or obligations under the Loan, the Loan Documents, or any amendments made thereto. (k) Excluded Material. None of the Excluded Materials (if any) are items required by law to be disclosed to Buyer or would otherwise materially affect Buyer's decision to purchase the Assets on the terms and conditions set forth in this Agreement. For purposes of this Agreement, "Material Adverse Effecf' means an occurrence that renders the Loan Documents or any of the Assets invalid as a whole or substantially interferes with Buyer's realization of the principal benefits andlor security provided thereby, including, without limitation, judicial or non-judicial foreclosure if an event of default occurs as a result of Borrower's material breach of a material covenant contained in the Loan Documents. 6. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to Seller that as of the date of execution of this Agreement and as of the Close of Escrow: (a) Buver's Authoritv. Buyer has the power and authority to execute, deliver, and perform its obligations under this Agreement. (b) Apnrovals and Consents. No approvals or consents of any Person not previously obtained are required in order for Buyer to enter into this Agreement and to perform its obligations under this Agreement. (c) Confidentialitv. Both Buyer and Seller agree to keep this Agreement and the terms hereof CONFIDENTIAL and commit not to disclose such information to third parties without prior written consent of the other party. However, the Parties may disclose such terms to the accountants, attorneys, lenders and other necessary consultants, advisors or governmental authorities having jurisdiction over the Property. Buyer will have the right to disclose the terms of this Agreement to its investors, joint venture partners, mezzanine lenders, assignees, real estate brokers, and mortgage bankers. Seller will have the right to disclose the existence of this -10- 'Y' Agreement and the transactions contemplated herein to the Borrower and guarantors under the Loan Docwnents ("Guarantors"). (d) Securities Laws. (i) Buyer understands that (A) neither the Assets, nor any interest therein or evidence thereof, has been registered or qualified under the Securities Act of 1933, as amended (the "Securities Ad'), or the securities laws of any state or any other jurisdiction, and (B) Seller is not required, and does not intend, to so register or qualify the Assets. (ii) Buyer is a substantial, sophisticated investor having such knowledge and experience in financial and business matters, and in particular in matters relating to the purchase, sale, origination or ownership of notes and loan participations such as the Assets, that it is capable of evaluating the merits and risks of investment in the Assets and understands and is able to bear the economic risks of such an investment (including a totalloss of its investment and the risk that Buyer might be required to hold the Assets for an indefinite period of time). (iii) Buyer is acquiring the Assets for investment, for its own account, and not for or on account of any other person or entity, and not with a view to or for sale in connection with a distribution within the meaning of Section 5 of the Securities Act. (iv) Buyer has been furnished with, and has had an opportunity to review and understands, all information relating to the Assets as has been requested and as is considered necessary by Buyer, and has had all questions arising from or relating to such review answered to the satisfaction of Buyer. (v) Neither Buyer nor anyone acting on its behalf has, in active violation of the Securities Act, (A) offered, transferred, pledged, sold or otherwise disposed of any of the Assets (or any interest therein or evidence thereot), or (B) solicited any offer to buy or accept a transfer, pledge or other disposition of any of the Assets (or any interest therein or evidence thereot) from, or (C) otherwise approached or negotiated with respect to any of the Assets (or any other interest therein or evidence thereof) with any person or entity in any manner, or taken any other action that would constitute a distribution under, or render the disposition to Buyer or the disposition by Buyer to any other party of any of the Assets (or any interest therein or evidence thereof) a violation of the Securities Act or of any other securities law or require registration or qualification pursuant thereto, nor will it act, nor has it authorized or will it authorize any person or entity to so act, in any such manner with respect to the Assets (or any interest therein or evidence thereof). (vi) Either (A) Buyer is not an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a plan within the meaning of Section 4975(e)(I) of the Internal Revenue Code, and Buyer is not, directly or indirectly, purchasing the Assets on behalf of, as investment manager of, as named fiduciary of, as trustee of or with assets of any such plan; or (B) Buyer's purchase of the Assets (1) will not cause Seller to be deemed a fiduciary of any such plan, or (2) either will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of - 11 - ~ . the Internal Revenue Code or wiII be exempt from the prohibited transaction rules in Section 406 of ERISA and Section 4975 of the Intemal Revenue Code. Notwithstanding any anything to the contrary contained in this Section 6(d), no provision hereof is intended to preclude Buyer's transfer and assignment rights as provided in Section 12 of this Agreement. (e) Anti-Terrorism Statute ComDliance. Buyer is not: (i) in violation of any Anti-Terrorism Law (as defined helow); (ii) conducting any business or engaging in any transaction or dealing with any Prohibited Person (as defined below), including the making or receiving or any contribution of funds, goods or services to or for the benefit of any Prohibited Person; (iii) dealing in, or otherwise engaging in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224; (iv) engaging in or conspiring to engage in any transaction that evades or avoids, or had the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in any Anti-Terrorism Law; or (v) a Prohibited Person, nor are any of its partners, members, managers, officers or directors a Prohibited Person. As used herein, "Antiterrorism Law" is defined as any law relating to terrorism, anti-terrorism, money laundering or anti-money laundering activities, including Executive Order No. 13224 and Title 3 of the USA Patriot Act (as defined below). As used herein "Executive Order No. 13224" is defined as Executive Order No. 13224 on Terrorist Financing effective September 24, 200 I, and relating to "Blocking Property and Prohibiting Transactions With Persons Who Commit, or Support Terrorism." "Prohibited Person" is defined as (I) a person or entity that is listed in the Annex to Executive Order 13224; (2) a person or entity with whom a person is prohibited from dealing or otherwise engaging in any transaction by any Anti Terrorism Law, or (3) a person or entity that is named as a "specially designated national and blocked person" on the most current list published by the U.S. Treasury Department Office Of Foreign Assets Control as its official website, http://www.treas.gov/ofacltllsdn.pdfor at any replacement website or other official publication of such list. "USA Patriot Ad' is defined as the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001" (Public Law 107-56), as amended. 7. BUYER'S EXAMINATION OF THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS PURCHASING THE ASSETS SOLELY IN RELIANCE ON BUYER'S OWN INDEPENDENT INVESTIGATION, ANALYSIS AND EVALUATION OF THE ASSETS AND ALL OTHER ASPECTS OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, HAVE BEEN MADE BY SELLER OTHER THAN AS HEREIN PROVIDED, ANY OF SELLER'S AGENTS, OR ANY OTHER PERSON ACTING FOR OR ON BEHALF OF SELLER REGARDING THE ASSETS OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THIS SECTION OR ANY OTHER PROVISION OF THIS AGREEMENT, BUYER ACKNOWLEDGES AND AGREES AS FOLLOWS: (a) PHYSICAL INSPECTION. PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD, BUYER WILL HAVE CONDUCTED, OR WILL HAVE HAD - 12- ~ THE OPPORTUNITY TO CONDUCT, ITS OWN INDEPENDENT INSPECTION, INVESTIGATION, ANALYSIS AND EVALUATION OF THE PROPERTY AND WILL HAVE DETERMINED SOLELY IN RELIANCE THEREON THAT THE PHYSICAL CONDITION OF THE PROPERTY IS ACCEPTABLE TO BUYER, INCLUDING THE ROOF, ALL STRUCTURAL ELEMENTS OF THE PROPERTY, AND ALL MECHANICAL, ELECTRICAL, HEATING, AIR CONDITIONING, VENTILATION, FIRE SAFETY, SECURITY, PLUMBING AND OTHER SYSTEMS IN THE PROPERTY. (b) REVIEW OF RECORDS. PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE PERIOD, BUYER WILL HAVE HAD ACCESS TO AND WILL HAVE CONDUCTED, OR WILL HAVE HAD THE OPPORTUNITY TO CONDUCT, ITS OWN INDEPENDENT INSPECTION, INVESTIGATION, ANALYSIS AND EVALUATION OF ALL INSTRUMENTS, RECORDS AND DOCUMENTS WHICH BUYER HAS DETERMINED TO BE APPROPRIATE OR ADVISABLE TO REVIEW IN CONNECTION WITH BUYER'S PURCHASE OF THE ASSETS AND THIS TRANSACTION, INCLUDING THOSE RELATING TO ALL ZONING REGULATIONS AND OTHER GOVERNMENTAL REQUIREMENTS, SITE AND PHYSICAL CONDITIONS, TITLE MATTERS, AND ALL OTHER MATTERS AFFECTING THE USE, OCCUPANCY, VALUE, AND CONDITION OF THE PROPERTY, AND BUYER WILL HAVE DETERMINED SOLELY IN RELIANCE THEREON THAT THE INFORMATION AND DATA CONTAINED THEREIN OR EVIDENCED THEREBY IS SATISFACTORY TO BUYER. (e) REVIEW OF LOAN DOCUMENTS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS OF ANY KIND TO BUYER REGARDING THE LOAN DOCUMENTS. WITHOUT LIMITING THE GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, BUYER ACKNOWLEDGES AND AGREES THAT NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, HAVE BEEN MADE BY SELLER, ANY OF SELLER'S AGENTS, OR ANY OTHER PERSON ACTING FOR OR ON BEHALF OF SELLER REGARDING ANY OR ALL OF THE FOLLOWING MATTERS: (i) THE VALIDITY, LEGALITY, ENFORCEABILITY, OR SUFFICIENCY OF THE LOAN DOCUMENTS OR THE COLLECTIBILlTY OF THE NOTE OR OF ANY OTHER INDEBTEDNESS EVIDENCED BY ANY OR ALL OF THE LOAN DOCUMENTS; (ii) THE EXISTENCE OR NON-EXISTENCE OF ANY DEFENSES, CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, OFFSETS, OR DEDUCTIONS THAT THE BORROWER OR ANY OTHER PERSON MAY HAVE WITH RESPECT TO THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS; (iii) THE FINANCIAL CONDITION OF BORROWER OR ANY OTHER PERSON; (iv) THE ABILITY OF BORROWER OR ANY OTHER PERSON TO PERFORM THEIR RESPECTIVE OBLIGATIONS PURSUANT TO THE TERMS AND CONDITIONS OF THE LOAN DOCUMENTS; (v) THE LIEN POSITION OR LIEN PRIORITY OF THE DEED OF TRUST OR ANY OTHER SECURITY AGREEMENT OR ENCUMBRANCE SECURING ALL OR PART OF THE LOAN; (vi) THE COMPLIANCE OR NON-COMPLIANCE OR CONFORMITY OR NON-CONFORMITY OF THE LOAN DOCUMENTS WITH ANY LENDING OR UNDERWRITING CRITERIA OR PRACTICES; AND (vii) THE ACCURACY OF ANY INFORMATION FURNISHED TO BUYER. WITHOUT LIMITING THE GENERALITY OF THIS SECTION, BUYER - 13- ~ ACKNOWLEDGES AND AGREES THAT ITS PURCHASE OF THE ASSETS IS WITHOUT RECOURSE OF ANY KIND, AND THE NOTE SHALL BE ENDORSED BY SELLER TO BUYER WITHOUT RECOURSE, REPRESENTATION OR WARRANTY OF ANY KIND, EXCEPT ONLY FOR THE REPRESENT A TIONS AND W ARRANTIES EXPRESSLY MADE BY SELLER IN THIS AGREEMENT. (d) SALE OF ASSETS IN "AS-IS" CONDITION. BUYER IS A SOPHISTICATED AND EXPERIENCED INVESTOR IN REAL PROPERTY AND REAL PROPERTY-SECURED LOANS AND IS FAMILIAR WITH AND EXPERIENCED IN TRANSACTIONS OF THE TYPE AND CHARACTER THAT ARE THE SUBJECT OF THIS AGREEMENT. THE ASSETS ARE BEING PURCHASED BY BUYER IN THEIR "AS-IS" CONDITION, AND THE PURCHASE PRICE AND OTHER TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT ARE THE RESULT OF ARM'S-LENGTH NEGOTIATIONS BETWEEN PARTIES FAMILIAR WITH TRANSACTIONS. OF THIS KIND, AND THE PURCHASE PRICE AND OTHER TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT TAKE INTO ACCOUNT THE FACT THAT BUYER IS NOT ENTITLED TO RELY ON ANY INFORMATION PROVIDED BY'SELLER, ANY OF ITS AGENTS, OR ANY OTHER PERSON ACTING FOR OR ON BEHALF OF SELLER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL INFORMATION, WHETHER WRITTEN OR ORAL, PREVIOUSLY, NOW, OR HEREAFTER MADE A V AILABLE TO BUYER BY SELLER, ITS AGENTS, OR ANY OTHER PERSON ACTING FOR OR ON BEHALF OF SELLER, WHETHER IN THE FORM OF APPRAISALS, MAPS, SURVEYS, SOIL REPORTS, ENGINEERING STUDIES, ENVIRONMENTAL STUDIES, INSPECTION REPORTS, PLANS AND SPECIFICATIONS, HAS BEEN OR WILL BE FURNISHED BY SELLER TO BUYER SOLELY AS A COURTESY, AND NEITHER SELLER OR ITS AGENTS HAVE VERIFIED THE ACCURACY OF SUCH INFORMATION OR THE QUALIFICATIONS OF THE PERSONS PREPARING SUCH INFORMATION, AND BUYER ASSUMES ALL RISKS ARISING FROM ITS RELIANCE ON SUCH INFORMATION IN ENTERING INTO THIS AGREEMENT AND COMPLETING ITS PURCHASE OF THE ASSETS PURSUANT TO THIS AGREEMENT. 8. LIOUIDATED DAMAGES. NOTWITHSTANDING ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT, IF THE SALE OF THE ASSETS IS NOT CONSUMMATED BY REASON OF ANY DEFAULT BY BUYER UNDER THE TERMS OF THIS AGREEMENT, OR IF THE FAILURE OF THE CONDITION SET FORTH IN SECTION 4(e) ABOVE IS THE RESULT OF ANY ACT OR OMISSION BY BUYER, THEN IN EITHER OF SUCH CIRCUMSTANCES, SELLER SHALL BE ENTITLED TO RETAIN THE FULL AMOUNT OF THE DEPOSIT (THE "LIQUIDATED DAMAGES") AS SELLER'S LIQUIDATED DAMAGES AND SOLE REMEDY. BUYER AND SELLER AGREE THAT SELLER'S DAMAGES WHICH WOULD RESULT FROM BUYER'S FAILURE TO PURCHASE THE ASSETS IN BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT ARE IMPRACTICABLE AND EXTREMELY DIFFICULT TO ASCERTAIN, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, THE LIQUIDATED DAMAGES IN THE AMOUNT SET FORTH ABOVE REPRESENTS A REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES FOR THE BREACH OF -14- ~ BUYER'S OBLIGATION TO PURCHASE THE ASSETS UNDER THIS AGREEMENT IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES AND SOLE REMEDY OF SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671. THE PARTIES HAVE SET FORTH THEIR INITIALS BELOW TO INDICATE THEIR AGREEMENT WITH THE LIQUlDA TED DAMAGES PROVISION CONTAINED IN THIS SECTION. ?'tr? Seller's Initials Buyer's Initials 9. follows: RELEASE BY BUYER. Effective only upon the Close of Escrow, Buyer agrees as (a) Release. Except as expressly set forth in Section 9(c) below, Buyer, for itself and on behalf of its officers, directors, shareholders, partners, agents, employees, representatives, heirs, administrators, successors, and assigns (such persons and entities other than Buyer are referred to collectively as the "Other Releasors''), forever releases and discharges Seller and its current and former officers, directors, shareholders, representatives, agents, employees, attorneys, insurers, successors and assigns (collectively, the "Seller Releasees"), from any and all claims, actions, causes of action, losses, promises, liabilities, agreements, obligations, judgments, debts, demands, rights, damages, costs and expenses of every kind and nature, in law, equity or otherwise ("Claims"), whether known or unknown, suspected or unsuspected, fixed or contingent, foreseen or unforeseen, liquidated or unliquidated, which Buyer and any or all of the Other Releasors have or may have as of the Close of Escrow, or previously had or may have had, arising out of, based upon, relating to or in any manner connected with any or all of the following: (i) the Property; (ii) the Loan; (iii) the Loan Documents; and (iv) any act or omission by any or all of the Seller Releasees occurring prior to the Close of Escrow and related to any or all of the matters described in clauses (i), (ii), or (iii) of this Section. (b) Waiver. Buyer acknowledges that it is aware of California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HA VE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR. With full awareness and understanding of this provision, Buyer, on behalf of itself and the Other Releasors, waives all rights which this provision or any comparable provision under any state or federal law may give to them in connection with the releases contained in Section 9(a) above. -15 - ~ BUYER'S OBLIGATION TO PURCHASE THE ASSETS UNDER THIS AGREEMENT IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTI11JTE LIQUIDATED DAMAGES AND SOLE REMEDY OF SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671. THE PARTIES HAVE SET FORTH THEIR INmALS BELOW TO INDICATE THEIR AGREEMENT WITH THE LIQUIDATED DAMAGES PROVISION CONTAINED IN THIS SECTION. Buyer's Initials r=v- Seller's Initials 9. follows: RELEASE BY BUYER. Effective only upon the Close of Escrow, Buyer agrees as (a) Release. Except as expressly set forth in Section 9(c) below, Buyer, for itself and on behalf of its officers, directors, shareholders, pllJ'lners, agents, employees, representatives, heirs, administrators, successors, and assigns (such persons and entities other than Buyer are referred to collectively as the "Otller Reteasan"), forever releases and discharges Seller and its current and former officers, directors, shareholders, representatives, agents, employees, attorneys, insurers, successors and assigns (collectively, the "SeUer Releas"s"), from any and all claims, actions, causes of action, losses, promises, liabilities, agreements, obligations, judgments, debts, demands, rights, damages, costs and expenses of every kind and nature, in law, equity or otherwise ("Claims"), whether known or unknown, suspected or unsuspected, fixed or contingent, foreseen or unforeseen, liquidated or unliquidated, which Buyer and any or all of the Other Releasors have or may have as of the Close of Escrow, or previously had or may have had, arising out of, based. upon, relating to or in any manner connected with any or all of the following: (i) the Property; (Ii) the Loan; (iii) the Loan Documents; and (iv) any act or omission by any or all ofthe Seller Releasees occurring prior to the Close of Escrow and related to any or all of the matters described in clauses (i), (ii), or (ili) of this Section. (b) Waiver. Buyer acknowledges that it Is aware of California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR. With full awareness and understanding of this provision, Buyer, on behalf of itself and the Other Releasors, waives all rights which this provision or any comparable provision under any state or federal law may give to them in connection with the releases contained in Section 9(a) above. IS (c) Certain Oblil!8tions Not Released. Notwithstanding anything to the contrary contained in Sections 9(a) or 9(b) above, the release contained in this Section 9: (i) shall become effective only upon the Close of Escrow; (ii) shall not be deemed to release any or all of the Seller Releasees from, or otherwise affect, their respective representations, warranties, and obligations under this Agreement, which shall survive the Closing for a period of six (6) months, or any of the documents executed by any or all of the Seller Releasees in connection with this Agreement; and (iii) shall not release any Seller Releasees attributable to their intentional acts, gross negligence or fraud. (d) No Admission of Liabilitv. Nothing contained in this Section,9 constitutes or shall be construed as an admission by any or all of the Seller Releasees of any liability whatsoever. (e) No Assil!TlTllent. The Buyer, for itself and on behalf of all Other Releasors, warrants and represents to Seller that Buyer and the Other Releasors have not sold, assigned, transferred, conveyed or otherwise disposed of, whether voluntarily or involuntarily, any claims which are the subject of Section 9(a) above, except as otherwise expressly set forth herein. (t) Discovery of Unknown or Different Facts. Buyer, for itself and on behalf of all Other Releasors, acknowledges and agrees that the facts relating to the release of claims which is the subject of this Section 9 may hereafter be found to be different from the facts now believed by Buyer to be true, and Buyer, on behalf of itself and all Other Releasors, expressly accepts and assumes the risks of such possible differences and agrees that the release of claims contained in this Section 9 shall be and remain effective notwithstanding such differences in facts. 10. CASUALTY OR CONDEMNATION. If, after the Opening of Escrow, there is a material casualty loss affecting the Property (a "Material Casualty Los~'), or in the event any portion of the Property is taken by condemnation or eminent domain or there is any actual or threatened condemnation or eminent domain action affecting any direct or indirect access to the Property prior to the Closing Date, then Buyer shall have the right (in its sole and absolute discretion) to terminate this Agreement by giving written notice of termination to Seller and Escrow Agent and, upon such termination, neither Seller or Buyer shall thereafter have any obligation to each other, except as otherwise expressly provided in this Agreement. In the alternative, in the event of a Material Casualty Loss or any such taking, as applicable, Buyer may elect by giving written notice to Seller to complete the transaction on the terms set forth in this Agreement and, in such event, the Buyer shall receive a full assignment from Seller of all Insurance proceeds or condemnation award (as applicable), if any, payable in connection with such Material Casualty Loss (other than proceeds expended prior to Closing in restoration and repair of the Property by Seller and except that rent loss proceeds (if any) shall be prorated) or taking. The phrase "taking by eminent domain" includes any notices of taking or commencement of proceedings under eminent domain power. For purposes of this Agreement, -16- 'Y' the term "Material Casualty Loss" shall mean a casualty loss that (a) affects the soil, geological or physical condition of the Property in a manner that would adversely affect the development of the Property in any material respect of any kind; or (b) would materially interfere with access to the Property. 11. FINDER'S FEE. Buyer and Seller each represents and warrants to the other that it is unaware of any commission, finder's fee, or brokerage fee arising out of the transactions contemplated by this Agreement, except to the Finder identified in the Defined Terms section of this Agreement, to whom Seller will pay(by wire transfer of funds at Closmg) a tee pursuant to a G;~~~~~6H separate written agreement between Seller and Finder. ]n the event of a claim for any other broker's or finder's fees or commissions in connection with the negotiation or execution of this ?II'" Agreement or the transactions contemplated hereby, Seller shall indemnify and hold Buyer harmless from and against such claim and all liabilities relating thereto (including attorneys' fees) if it shall be based upon any agreement entered into by Seller, and Buyer shall indemnify and hold Seller harmless from and against such claim and all liabilities relating thereto (including attorneys' fees) ifit shall be based upon any agreement entered into by Buyer, including, without limitation, any claim that may be made by Cushman and Wakefield. 12. ASSIGNMENT. Buyer shall have the right to assign its rights under this Agreement upon delivery of written notice to Seller and Escrow Agent. 13. ADDmoNAL COVENANTS OF PARTIES. (a) Seller Coolleration. Seller shall, at no cost or expense to Seller, cooperate with Buyer after the Closing with respect to any reasonable requests to be made by Buyer to Seller in furtherance of Buyer's ownership of the Assets and enforcement of the Loan Documents. At Buyer's request, Seller agrees to exert commercially reasonable efforts to obtain (i) subordination, non-disturbance agreements and estoppel certificates from Borrower's tenants; and (ii) estoppel certificates from Borrower and/or the Guarantors. (b) Enforcement Action Onlv ]n Buver's Name. Following the Close of Escrow, Buyer shall not commence or threaten to commence any action or proceeding to enforce any or all of its rights and remedies under the Loan Documents in Seller's name or in the name of any predecessor of Seller, as the holder of the Loan Documents, and Buyer shall at all times take such actions as may be necessary or reasonably required to disclose the fact that Buyer is the holder of the Note and other Loan Documents to third Persons with whom Buyer is dealing. (c) Reoorting. From and after the Close of Escrow, Buyer shall be solely responsible with respect to all federal and state tax reporting requirements applicable to the holder of the Loan, including reporting requirements with respect to Form 1099. (d) Servicing. The Loan shall be sold on a "servicing released" basis. During the Due Diligence Period, Seller shall promptly notify Buyer of any enforcement action, proceeding, loan amendment, waiver, consent, release, indulgence or other administrative action taken by Seller with respect to the Loan; provided, however, during such Due Diligence Period, with respect to any insurance proceeds paid with respect to any security for the Loan, such insurance proceeds shall either be held in escrow or utilized for restoration of such security. - 17- r From and after the expiration of the Due Diligence Period, Seller shall not make any amendment to any Loan Document, enforce any right or take or fail to take any other action with respect to the Loan, including application or use of casualty proceeds or release of Borrower or any guarantor thereof. Nothing contained herein shall prevent Seller from making protective advances for expenses in connection with the Loan. (e) Survival. The Parties agree that Seller's and Buyer's warranties and representations contained in this Agreement and in any document (including any certificate) executed pursuant to this Agreement shall survive the Closing for a period of six (6) months (the "Su11'ival Periotl'). Neither Party shall have any liability to the other for a breach of any representation or warranty unless written notice containing a description of the specific nature of such breach action shall have been commenced by the claiming party within two (2) months after the expiration of the Survival Period. . 14. NOTICES. All notices and other communications provided for in this Agreement shall be in writing and shall be effective on the earliest of the following dates: (a) on the first (1st) Business Day after the date on which the sender's facsimile transmitting equipment issues a confirmation record of receipt of such notice by the recipient's facsimile equipment or on the same Business Day that receipt of a facsimile transmission is confirmed by the sender of such transmission by telephone at the confirmation telephone number set forth above in the Defined Terms section of this Agreement, if notice is sent by facsimile transmission to the recipient's facsimile number set forth above in the Defined Terms section of this Agreement; (b) the date when actually delivered if delivered in person to the recipient; (c) on the first (1st) Business Day after depositing such notice for next Business Day delivery with a reputable independent nationally-recognized overnight courier service, postage and charges prepaid, addressed to the recipient as set forth above in the Defined Terms section of this Agreement; or (d) on the third (3rd) day after depositing such notice in a sealed envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to the recipient at the address set forth above in the Defined Terms section of this Agreement. The notice addresses may be changed by notice given in accordance with this Section. 15. ADDmONAL DOCUMENTS. Each Party agrees to perform any further acts and to execute and deliver such further documents as may be reasonably required to carry out the express terms of this Agreement. 16. ENTIRE AGREEMENT. This Agreement together with the documents expressly contemplated by this Agreement constitute the entire agreement and understanding between Seller and Buyer concerning the subject matter of this Agreement and such documents, and this Agreement and such documents supersede all prior and contemporaneous agreements, terms, understandings, conditions, representations, and warranties, whether written or oral, made by either of the Parties concerning the matters covered by this Agreement and such documents. This Agreement has been drafted through a joint effort of the Parties and their respective counsel and therefore shall not be construed in favor of or against either of the Parties as the Party who prepared this Agreement. 17 . WANER. No waiver by Buyer or Seller of any of the terms or conditions of this Agreement or any of their respective rights under this Agreement shall be effective unless such - 18- "f' waiver is in writing and signed by the Party charged with the waiver. Without limiting the generality of the immediately preceding sentence, (a) a Party's waiver of any tenn or condition of this Agreement shall not be considered to be a waiver of any other tenn or condition of this Agreement; (b) a Party's waiver of the time for performing any act shall not constitute a waiver of the time for performing any other act or an identical act required to be performed at a later time; and (cl except as specifically provided in Section 4(g) above, the exercise of any remedy to which a Party is entitled shall not be a waiver of any other remedy provided by law or in this Agreement. 18. MODIFICATIONS: INTERPRETATION. This Agreement may be modified only by a written agreement signed by Seller and Buyer. For purposes of this Agreement, (a) the tenn "including" means "including, without limitation;" (b) the tenn "Business Day" or "business day" means any day on which commercial banks are generally open to carry on their ordinary commercial banking business in California; (c) the term "Person" or "person" means any natural person or any entity, including any corporation, partnership, joint venture, trust, limited liability company, unincorporated organization, or trustee; and (d) the tenn "Personal Property" means the personal property in which a borrower may grant a security interest. Whenever the context of this Agreement reasonably requires, all words used in the singular shall be deemed to have been used in the plural, and the neuter gender shall be deemed to include the masculine and feminine gender, and vice versa. 19. TiME OF mE ESSENCE. Time is of the essence with respect to each provision of this Agreement. Without limiting the generality of the preceding sentence, if for any reason Buyer fails to deposit the fees and/or documents with Escrow Agent by the time and in the manner required by this Agreement (regardless of whether or not such failure was the result of causes or circumstances beyond Buyer's reasonable control), Buyer shall conclusively be deemed to be in material default under this Agreement, and Seller shall be entitled to obtain recovery of Liquidated Damages from Seller pursuant to Section 8 above. 20. HEADINGS. The headings to sections of this Agreement are for convenient reference only, and they do not in any way limit or amplify the tenns of this Agreement and shall not be used in interpreting this Agreement. 21. CALIFORNIA LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 22. INDEPENDENT COUNSEL. Each Party acknowledges that it has been represented by independent counsel in connection with this Agreement and that it has executed this Agreement with the advice of such counsel. 23. ATTORNEYS' FEES. If either Party institutes an action or proceeding to enforce any of the tenns of this Agreement or arising out of this Agreement, the prevailing Party in such action or proceeding shall be entitled to recover all reasonable costs and expenses, including reasonable attorneys' fees and costs, from the other Party in addition to any other relief awarded by the court. -19- y 24. COUNTERPARTS: DELIVERY BY FACSIMILE. This Agreement may be executed in counterparts, each of which shall constitute an original, and all of which together shall constitute one agreement. Each Party shall be entitled to rely upon a facsimile counterpart of this Agreement executed by the other Party with the same force and effect as if such facsimile copy were an ink-signed original signed by the Party sending such facsimile and delivered to the other Party. If any Party delivers a signed copy of this Agreement to the other Party by facsimile, the Party sending such facsimile shall deliver an ink-signed original to the other Party within three (3) business days after sending such facsimile. For purposes of this Paragraph, all references to the term "facsimile" or "facsimile copy" shall be deemed to include a document forwarded by telecopy transmission or a document forwarded by electronic mail as a Portable Document Format (e.g., Adobe Acrobat) (or so-called PDF) attachment to such electronic mail. 25. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns. 26. No THIRD PARlY BENEFICIARIES. This Agreement is entered into for the sole benefit of Buyer and Seller and their respective permitted successors and assigns, and no other Person shan have any rights or causes of action under this Agreement. 27. TERMINATION. Notwithstanding anything to the contrary contained in this Agreement, if this Agreement is terminated pursuant to Section 4(f) above, the respective agreements, representations, and warranties of the Parties set forth in this Agreement shall remain in fun force and effect until performed in full or unless otherwise agreed to in writing by the Parties. 28. REVIEW WITH INDEPENDENT COUNSEL. EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT (a) IT HAS CAREFULLY READ AND UNDERSTANDS ALL OF THE TERMS OF THIS AGREEMENT; (b) IT HAS ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY, AFTER HAVING CONSULTED WITH ITS OWN INDEPENDENT LEGAL COUNSEL; (c) EACH OF THE WAIVERS CONTAINED IN THIS AGREEMENT IS REASONABLE, NOT CONTRARY TO PUBLIC POLICY OR LAW, AND HAS BEEN INTENTIONALLY, KNOWINGLY, AND VOLUNTARILY AGREED TO BY THE PARTIES; AND (d) EACH OF THE WAIVERS CONTAINED IN THIS AGREEMENT HAS BEEN AGREED TO BY SUCH PARTY WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND CONSEQUENCES. 29. EXCULPATION OF SELLER: No OPTION. Notwithstanding anything to the contrary contained herein, Seller's shareholders, partners, members, the partners or members of such partners, the shareholders of such partners, members, and the trustees, officers, directors, employees, agents and security holders of Seller and the partners or members of Seller assume no personal liability for any obligations entered into on behalf of Seller and its individual assets shall not be subject to any claims of any person relating to such obligations. FURTHERMORE, THE SUBMISSION OF THIS AGREEMENT BY SELLER, ITS AGENT OR REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY BUYER DOES NOT CONSTITUTE AN OPTION OR OFFER TO SELL THE ASSETS UPON THE TERMS AND CONDITIONS CONTAINED HEREIN ORA RESERVATION OF THE ASSETS IN FAVOR OF BUYER, IT BEING INTENDED HEREBY THAT THIS AGREEMENT SHALL ONLY -20- ~ BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY SELLER AND BUYER AND DELNERY OF A FULLY EXECUTED AGREEMENT TO BUYER. The foregoing shall govern any direct and indirect obligations of Seller under this Agreement. The provisions of this Section shall survive the Closing and any termination of this Agreement. 30. SEVERABD..ITY. Should any provision of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Agreement, which remaining provisions shall remain in full force and effect and the application of such invalid or unenforceable provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and enforced to the fullest extent permitted by law. [Remainder of page left intentionally blank] -21- ~ IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date. Buyer: P ANA nONI DEVELOPMENT COMPANY, INC., a California corporation '7fJ ~~ ~ Name: M4~'(: /"A'y/<Jfir Its: 'S e Nf;ott... 1/.& c::.8 fP;Cf!ilS :r.r::>e...Jr By: Seller: CENTER BANK By: Name; Its: - 22. ~ IN WITNESS WHEREOF, the panies hereto have executed this Agreement as of the Effective Date. Buyer: PANATIONI DEVELOPMENT COMPANY, INC., a California corporation By: Name: Its: SeUer: CENTER BANK BY:~ Name: ~"I,... \fl.... Its: for,j. flD,.",.J! L.- ~ 22 ACCEPTANCE BY ESCROW AGENT STEWART TITLE OF CALIFORNIA, INC., a California corporation, hereby acknowledges that it has received a fully executed original of the foregoing Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions by and between CENTER BANK, as Seller, and PANATTONI DEVELOPMENT COMPANY, INC., a California corporation, as Buyer, and agrees to act as Escrow Agent thereunder and to be bound by and strictly perform the terms thereof as such terms apply to Escrow Agent. Escrow Agent shall execute two (2) originals of this Acceptance by Escrow Agent and deliver one (I) original to Seller and Buyer promptly following the opening of Escrow. Dated: January _,2010 STEWART TITLE OF CALIFORNIA, INC., a California corporation By: Name: Its: -23 - 'Y EXHIBIT "A" DESCRIPTION OF LOAN DOCUMENTS I. Promissory Note dated February 13, 2008 in the original principal sum of Sixteen Million Four Hundred Fifty Thousand and No/IOO Dollars ($16,450,000.00), executed by PLACO SAN BERNARDINO, LLC, a California limited liability company ("Borrower") in favor of CENTER BANK ("Lender"). 2. Business Loan Agreement dated February 13, 2008, executed by Borrower and Lender. 3. Deed of Trust dated February 13,2008 and recorded on February 15,2008 as Document No. 2008-0070328, in the Official Records of San Bernardino County, California, encumbering certain real property located at 295 Central City Mall, in thl( city of San Bernardino, California 92401. 4. UCC-I Financing Statement filed with the California Secretary of State of February IS, 2008 as UCC File No. 20080581817. 5. Commercial Security Agreement dated February 13, 2008 executed by Borrower in favor of Lender. 6. Commercial Guaranty executed by DMC INVESTMENT HOLDINGS, LLC ("DMC'), in favor of Lender. 7. Commercial Guaranty executed by DONALD CHAE, in favor of Lender. 8. Commercial Guaranty executed by MIN CHAE, in favor of Lender. 9. Disbursement Request and Authorization dated February 13, 2008, executed by Borrower. 10. Notice oflnsurance Requirements dated February 13, 2008, executed by Borrower. II. Hazard Insurance Disclosure dated February 13, 2008, executed by Borrower. 12. Agreement to Provide Insurance dated February 13, 2008, executed by Borrower. 13. Limited Liability Company Resolution to Borrow/Grant Collateral dated February 13, 2008, executed by the members of Borrower. 14. Limited Liability Company Resolution to Guarantee dated February 13, 2008, executed by the manager ofDMC. IS. Resolution of Limited Liability Company Member dated February 13, 2008, executed by the manager ofDMC. ~ EXHIBIT "8" ALTA TITLE POLICY [TO BE A TIACHED] 'f EXHIBIT "C" ASSIGNMENT OF DEED OF TRUST RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: PANATTONIDEVELOPMENT COMPANY, INC. 34 Tesla, Suite 200 Irvine, CA 92618 Attn: Mark D. Payne SPACE ABOVE THIS UNE FOR RECORDER'S USE ASSIGNMENT OF BENEFICIAL INTEREST IN DEED OF TRUST For value received, the undersigned hereby grants, assigns and transfers to P ANA TTONI DEVELOPMENT COMPANY, INC., a California corporation ("Assignee"), all of the undersigned's beneficial interest in that certain deed of trust ("Deed of Trud') executed by PLACO SAN BERNARDINO, LLC, a California limited liability company, as trustor, in favor of CENTER BANK, as beneficiary, dated February 13,2008 and recorded on February ]5, 2008 as Document No. 2008-0070328, in the Official Records of San Bernardino County, California, encwnbering certain real property located at 295 Central City Mall, in the city of San Bernardino, California 9240 I, as more particularly described in the Deed of Trust and Exhibit "A" attached hereto and incOlporated herein by this reference, TOGETHER with any and all notes and contracts secured by said Deed of Trust, all sums, including interest, due or to become due thereunder, and all rights accrued or to accrue thereunder. IN WITNESS WHEREOF, this Assignment of Beneficial Interest in Deed of Trust was executed as of the date first stated above. Dated: ,2010 ASSIGNOR: CENTER BANK By: Name: Its: (ALL SIGNATURES MUST BE ACKNOWLEDGED) 'if STATE OF CALIFORNIA ) ) ss: COUNTY OF LOS ANGELES ) On , before me, ,personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshelthey executed the same in his/her/their authorized capacity/capacities, and that by his/her/their signature(s) on the instrument the person(s), or the entity on 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. Notary Public [Signature of Notary] My Commission expires: if EXHIBIT "A" LEGAL DESCRIPTION All that certain real property situated In the County of San Bernardino, State of California, described as follows: Parcel A: Parcels 5 and 6 of Parcel Map No. 688, In the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded In Book 25, Pages 47 through 58 Inclusive, of parcel maps In the Office of the County Recorder of said County. Parcel B: Parcels 9, 10, 11, 13, 14, 16, 18 and 19 of Parcel Map No. 688, In the City of San Bernardino, County of San Bernardino, State of California, as per plat recorded In Book 25, Pages 47 through 58, Inclusive, of percel maps In the OffIce Of the County Recorder of said County. APNs: 0134-181-28-0-000 and 0134-211-34-0-000 and 0134-211-38-0-000 and 0134-231-27-0- 000 and 0134-231-29-0-000 and 0134-291-11-0-000 and 0134.301-22-0-000 and 0134-231-28- 0-000 and 0134-221-45-0-000. PARECL C: All ....m.nts created by or arising out of that cert.ln Instrum.nt .ntltl.d "Decl.ratlon of Restrictions, Construction, Oper.tlons, R..trlctlon .nd I.s.m.nt Agreement" d.t.d aa or December 24, 1970, Executed by the Redev.lopm.nt Ag.ncy of the City of S.n Bernardino, a public body corporate and politic, John S. Griffith. Co., . corpor.tlon, and Curci-Turner Co., . partner.hlp, joint venturers under the n.me .nd styl. of C.ntral City Comp.ny J.C. Penney Company, Inc., . corpor.tlon, Monwar Prop.rty, Corporation, a . Corporation, the H.rrl. Comp.ny, . Corporation, City of San B.rnardlno, California, a Municipal Corpor.tlon, Uph.m D.v.lopm.nt Company, . T.xa. Llmlt.d P.rtn.rshlp, and Connecticut Gener.1 Mortg.ge .nd Re.lty Investments, . M....chu..tts Busln_ Trust. which Instrument w.. r.corded on Dec.mber 24, 1970, In book 7580, P.g. 280, Offici. I R.cord. of San Bernardino, Callfornl., Including rights of pad.strl.n and vehicular Ingre.., egre.. .nd .cce.., a. ..Id ....m.nts lire more p.rtlculllrly d..crlbed the..ln. .~ EXHIBIT "0" ASSIGNMENT OF LOAN DOCUMENTS (CENTER BANK Loan No. 157918) THIS ASSIGNMENT OF LOAN (this "Assignment') is entered into as of , 2010 (the "Effective Date") between CENTER BANK ("Assignor"), and PANATTONI DEVELOPMENT COMPANY, INC., a California corporation ("Assignee"). RECITALS A. Assignor is the lender under that certain loan ("Loan") made to PLACO SAN BERNARDINO, LLC, a California limited liability company ("Borrower") on or about February 13,2008, in the original principal amount of$16,450,OOO.OO. B. The Loan is evidenced and reflected by, among others, a Promissory Note ("Note"), a Business Loan Agreement ("Loan Agreement'), and certain Deed of Trust (the "Deed of Trust') executed by Borrower, as trustor, in favor of CENTER BANK, as beneficiary. The Note, Loan Agreement, Deed of Trust and all other documents related to the Loan as described in the Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 14, 2010 (the "Purchase Agreemenf'), are collectively referred to as the "Loan Documents." C. Assignor desires to transfer and assign to Assignee all of Assignor's right, title and interest in and to the Loan, Loan Documents, any other agreement, instrument, guaranty(ies) or other document executed in connection with the Loan, any subsequent modification thereto and all of the Assignor's loan files (including, without limitation, any certificates, legal opinions or other documents related to, or evidencing, the Loan, appraisals, insurance certificates, borrower estoppel certifications and subordination agreements for leases, financial statements and operating statements, credit reports, lender's title insurance policy, engineering report, soils report, environmental audit report, architect's certificate as applicable to the Loan, and all information that is maintained by Assignor in the ordinary course of business in connection with the origination, servicing and administration of the Loan) and all of Assignor's right, title and interest therein (collectively, the "Assets"), and Assignee desires to accept such transfer and assignment from Assignor of all of Assignor's right, title and interest in and to the Assets upon, subject to, and in accordance with the terms and provisions of this Assignment. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: I. Assilmment. For value received, the receipt and sufficiency of which is hereby acknowledged, Assignor hereby remises, releases, sells, conveys, transfers and assigns to Assignee, its successors and assigns, all of Assignor's right, title and interest, in and to the Assets. ~ 2. Assumotion. Assignee hereby accepts the foregoing assignment and assumes and agrees to perfonn all of Assignor's obligations, duties and responsibilities under the Assets arising from and after the date hereof. 3. Assil!llee's Reoresentations and Covenants rellardim! Securities Law. Assignee hereby acknowledges and agrees with Assignor as follows: (a) Assignee understands that (i) neither the Assets, nor any interest therein or evidence thereof, has been registered or qualified under the Securities Act of 1933, as amended (the "Securities Act'), or the securities laws of any state or any other jurisdiction, and (ii) the Assignor is not required, and does not intend, to so register or qualify the Assets. (b) Assignee is a substantial, sophisticated investor having such knowledge and experience in financial and business matters, and in particular in matters relating to the purchase, sale, origination or ownership of notes and loan participations such as the Assets, that it is capable of evaluating the merits and risks of investment in the Assets and understands and is able to bear the economic risks of such an investment (including a total loss of its investment and the risk that Assignee might be required to hold the Assets for an indefinite period of time). (c) Assignee is acquiring the Assets for investment, for its own account, and not for or on account of any other person or entity, and not with a view to or for sale in connection with a distribution within the meaning of Section 5 of the Securities Act. (d) Assignee has been furnished with, and has had an opportunity to review and understands, all infonnation relating to the Assets as has been requested and as is considered necessary by Assignee, and has had all questions arising from or relating to such review answered to the satisfaction of Assignee. (e) Neither Assignee nor anyone acting on its behalf has, in active violation of the Securities Act, (i) offered, transferred, pledged, sold or otherwise disposed of any of the Assets (or any interest therein or evidence thereof) or, (ii) solicited any offer to buy or accept a transfer, pledge or other disposition of any of the Assets (or any interest therein or evidence thereof) from, or (iii) otherwise approached or negotiated with respect to any of the Assets (or any other interest therein or evidence thereof) with any person or entity in any manner, or taken any other action that would constitute a distribution under, or render the disposition to Assignee or the disposition by Assignee to any other party of any of the Assets (or any interest therein or evidence thereof) a violation of the Securities Act or of any other securities law or require registration or qualification pursuant thereto, nor will it act, nor has it authorized or will it authorize any person or entity to so act, in any such manner with respect to the Assets (or any interest therein or evidence thereof). (f) Either (i) Assignee is not an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a plan within the meaning of Section 4975(e)(I) of the Internal Revenue Code, and Assignee is not, directly or indirectly, purchasing the Assets on behalf of, as investment manager of, as named fiduciary of, as trustee of or with assets of any such plan; or (ii) Assignee's purchase of the Assets (A) will not cause Assignor to be deemed a fiduciary of any such plan, or (B) either ~ will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code or will be exempt from the prohibited transaction rules in Section 406 of ERISA and Section 4975 of the Internal Revenue Code. Notwithstanding anything to the contrary contained in this Section 3, no provision hereof is intended to preclude Buyer's transfer and assignment rights as provided in Section 12 of the Purchase Agreement. 4. Indemnity. Assignor shall indemnify, hold harmless, and defend (by counsel reasonably approved by Assignee), Assignee and its members, and their respective officers, directors, shareholders, partners, members, managers, and employees, and the successors and assigns of each the foregoing, from and against any and all claims, lawsuits, liabilities, damages, costs, or other expenses, including, without limitation, reasonable attorneys' fees and costs ("Claims"), arising from any breach, default, or obligation of Assignor arising on or before the Effective Date with respect to the Assets in so far as such Claims relate to (a) Assignor's origination ofthe loan documents that are part of the Assets; (b) Assignor's servicing of the loan and (c) any breach of Assignor's representations and warranties as expressly provided in the Purchase Agreement. Assignee shall indemnify, hold harmless, and defend (by counsel reasonably approved by Assignor), Assignor and its members, and their respective officers, directors, shareholders, partners, members, managers, and employees, and the successors and assigns of each the foregoing, from and against any and all claims, lawsuits, liabilities, damages, costs, or other expenses, including, without limitation, reasonable attorneys' fees and costs, arising from any breach, default, or obligation of Assignee arising after the Effective Date with respect to the Assets. 5. Successors and Assigns. This Assignment shall be binding on the parties hereto, will be enforceable against the parties' respective successors and assigns, and shall inure to the benefit of their respective heirs, successors, and assigns. 6. Governing Law. The interpretation, construction and the remedies for enforcement or breach of this Assignment are to be applied pursuant to, and in accordance with, the laws of the State of California for contracts made and to be performed therein. 7. Counteroarts. This Assignment may be executed in counterparts, and such counterparts shall be construed together as one original document. Facsimile signatures on this Assignment shall be considered as original signatures. 8. Attornevs' Fees. If either Assignor or Assignee brings any action or suit against the other for any matter relating to or arising out of this Assignment, or the Assets, or if either party appears in any bankruptcy proceeding relating to the other party arising from a dispute under this Assignment, then the prevailing party in such action, suit, or proceeding, whether by final judgment or out of court settlement, shall be entitled to recover from the other party all costs and expenses of suit, including actual attorneys' fees. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including actual attorneys' fees incurred in enforcing, perfecting, and executing such judgment. For the purposes of this Section, such costs and expenses shall include, but not be limited to, in-house and outside attorneys' fees, costs and expenses incurred in such action, / suit, or proceeding, including, but not limited to the folIowing: (i) post-judgment motions; (ii) contempt proceedings; (iii) garnishment, levy, and debtor and third party examinations; (iv) discovery; (iv) bankruptcy proceeding and litigation (including post-petition proceedings); and (vi) appeals. ASSIGNOR: CENTER BANK, a California banking corporation By: Name: Its: ASSIGNEE: PANATIONI DEVELOPMENT COMPANY, INC., a California corporation By: Name: Its: 1V' January 14,2010 Mark D. Payne Senior Vice President Panattoni Development Company, Inc. 34 Tesla, Suite 200 Irvine, CA 92618 Re: Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 12,2010 (the "Purchase Agreement") between Center Bank (as "Seller"), and Panattoni Development Company, Inc. ("Buver") Dear Mr. Payne: , This letter confirms that Seller will pay AAP DEVELOPMENT CA, LLC, a California limited liability company, upon the closing of the transactions contemplated by the Purchase Agreement, a finder's fee equal to $500,000. In the event of a claim for any other broker's commissions or finder's fees in connection with the negotiation or execution of the Purchase Agreement or the transactions contemplated thereby, Buyer shall indemnify and hold Seller harmless from and against any and all claims and liabilities relating thereto (including attorneys' fees) ifit shall be based upon any agreement entered into by Buyer, including, without limitation, any claim that may be made by Cushman and Wakefield. V cry tml y yours, CENTER BANK By: Name: Its: ~ EXHIBIT B ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT THIS ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT ("Assignment") is made as of May _, 2010 ("Effective Date") between PANATTONI DEVELOPMENT COMPANY, INC., a California corporation ("Assignor"), and REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic established as a community redevelopment agency ("Assignee"). R!,;CIIA.!:~ A. Assignor and Assignee are parties to that certain Agreement for Assignment of Contract dated May _ , 2010 ("Assignment Agreement"), whereby Assignor has agreed to assign its rights and obligations under that certain Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions dated January 14, 2010, between Assignor and Center Bank ("Purchase Agreement") to Assignee. C. Pursuant to the Assignment Agreement, Assignor desires to assign to Assignee and Assignee desires to assume Assignor's rights and obligations under the Purchase Agreement. NOW, THEREFORE, Assignor and Assignee agree as follows: 1. Assilmment. On the Effective Date, Assignor hereby unconditionally assigns to Assignee all of Assignor's rights and interest, and delegates to Assignee all of its duties. liabilities and obligations under the Purchase Agreement. 2. Assumption. On the Effective Date, Assignee hereby unconditionally accepts the foregoing assignment and assumes and agrees to timely keep, perform and discharge all of the duties, liabilities and obligations of Assignor under the Purchase Agreement. 3. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of California and shall inure to the benefit of Assignor and Assignee, and their respective successors, assigns, parent corporations, subsidiaries and affiliates. 4. Cooperation. Assignor and Assignee shall cooperate with one another at reasonable times and on reasonable conditions and shall execute and deliver such instruments and documents as may be necessary in order to fully carry out the intent and purposes of the transaction contemplated hereby. 5. Attornevs' Fees. Should any litigation, be commenced between the parties concerning any provision of this Assignment or the rights and duties of any person or entity hereunder, the prevailing party shall be entitled to its reasonable attorneys' fees, expert witness fees. 4848-1488-9222.1487/020858-0022 1087739.05 a04I28/1O EXHIBIT B 6. Indemnitv. The parties agree that the provisions of Section 11 of the Assignment Agreement are hereby fully incorporated herein by reference and shall be binding on the parties to this Assignment. 7. Successors. This Assignment is binding upon both parties and their respective successors and assigns. 8. Counteroarts and Facsimile Execution. To facilitate execution, this Assignment may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature of or on behalf of, each party, or that the signature of all persons required binding any party, appearing on each counterpart. All counterparts shall collectively constitute a single instrument. Any page containing the signature or initials of a party to this Amendment may be detached from a counterpart without impairing the legal effect of the signatures thereon and may thereafter be attached to another counterpart identical thereto except having attached to it pages bearing the signature of other parties. Execution of counterparts of this Amendment may be by facsimile transmission. Executed counterparts of this Amendment bearing only the facsimile signatures of the parties' duly authorized representatives shall be effective and binding on such parties as though they bore original signatures. [Signatures appear on following page.] 4848-1488-9222.1487/020858-0022 1087739.05 a04/28/1O -2- IN WITNESS WHEREOF, the parties have executed this Assignment as of the day and year first above written. ASSIGNOR: PANATTONI DEVELOPMENT COMPANY, INC. a California corporation By: Name: Mark D. Payne Title: Senior Vice President, Project Principal ASSIGNEE: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Name: Title: 4848-1488-9222.1487/020858-0022 1087739.05 a04/28110 -3- EXHIBIT "C" FORM OF EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT 4848-1488-9222.1487/020858.0022 1087739.05 a04/28/1O EXHIBIT C REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT CAROUSEL MALL THIS EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT (this "Agreement") is dated as of , _ (the "Effective Date" being the date that the Agency has acquired title to the Property as herein provided), and is entered into by and between Panattoni Development Company, Inc. (the "Developer"), a California corporation, and the Redevelopment Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, in light of the facts set forth in the following recital paragraphs: RECITALS A. The Agency desires to encourage and effectuate the redevelopment of certain real property, located within the Central City Redevelopment Project Area (the "Proiect Area") of the City of San Bernardino (the "City") and commonly known as a portion of the Carousel Mall, located at 295 Carousel Mall, in the City of San Bemardino, California, as more particularly described in Exhibit "A" comprising the buildings and the associated parking areas of the Carousel Mall in-line shops, the former Montgomery Wards department store and tire-battery- auto facility (the "Property"). B. The Developer is qualified to assist the Agency to undertake the study of specific proposals and plans for a coordinated and economically sustainable redevelopment project within the Study Area as illustrated on Exhibit "A" which will require specific study, evaluation and planning by the City and the Agency, as applicable, of appropriate and feasible community redevelopment program alternatives. C. The Developer and the Agency believe it is appropriate for the Developer to perform certain redevelopment studies, in consultation with the Agency, to evaluate the feasibility of redeveloping the Property by the Agency with the Developer acting as the Development Management Consultant ("DMC"), subject to the terms and conditions as set forth below. COVENANTS IN CONSIDERATION OF THE FOREGOING RECITALS, WHICH ARE INCORPORATED INTO THIS AGREEMENT BY THIS REFERENCE AND THE MUTUAL COVENANTS AND PROMISES SET FORTH HEREIN, THE DEVELOPER AND THE AGENCY HEREBY AGREE, AS FOLLOWS: 1. Developer Acknowledgments and Term of Agreement. a. The Developer hereby acknowledges and agrees that no proVIsIOn of this Agreement shall be deemed to be an offer by the Agency or an acceptance by the 4816-4491-4950.1 Agency of any offer or proposal from the Developer to convey any interest in the Property to the Developer. During the term of this Agreement, any studies relating to the Project (as defined below) that may hereafter be undertaken by the Developer, in its sole discretion, shall be the sole responsibility and property of the Developer and shall not be deemed to be undertaken for the benefit of the Agency and the City. b. The qualifications and identity of the Developer and its principals are of particular importance to the Agency. The Agency relied on these qualifications and identity in entering into this Agreement with the Developer. Accordingly, except as expressly set forth herein below, during the term of this Agreement, the Developer shall not transfer or assign all or any of the Developer's rights or obligations set forth in this Agreement (hereinafter, collectively, a "Transfer") and no voluntary or involuntary successor-in-interest of the Developer shall acquire any rights or power under this Agreement except pursuant to an assignment approved in writing by the Interim Executive Director of the Agency, such approval not to be unreasonably withheld, delayed or conditioned. For purposes of this Agreement, a Transfer shall include both (i) a transfer on a cumulative basis of more than twenty-five percent (25%) of the beneficial ownership interest in the Developer, and (ii) a transfer of the management and control of the Developer to any third party other than to an Affiliate of the Developer. As used herein, the term "Affiliate" means any entity that is either a parent, co-venturer or subsidiary of the Developer and/or any entity in which the Developer, or such parent or subsidiary owns a controlling interest and exercises management control or which is directly or indirectly controlled by Carl D. Panattoni. The Interim Executive Director of the Agency shall approve or disapprove any requested Transfer requiring Agency approval within ten (IO) business days after receipt of a written request for approval from the Developer, together with such documentation as may be reasonably required by the Interim Executive Director of the Agency, to evaluate the proposed transaction and the proposed assignee's or transferee's experience and qualifications, including the proposed assignment and assumption agreement by which the assignee expressly agrees to assume all rights and obligations of the Developer under this Agreement arising after the effective date of the assignment, and in which the assignee or transferee agrees to assume, or the Developer expressly remains responsible for, all performance and obligations of the Developer arising prior to the effective date of the Transfer. The assignment and assumption agreement shall be in a form reasonably acceptable to the Agency's legal counsel. No later than the date the Transfer becomes effective, the Developer shall deliver to the Agency the fully executed assignment and assumption agreement. c. Notwithstanding any other provision set forth in this Agreement to the contrary, the Agency's approval of a Transfer by the Developer shall not be required in connection with any of the following transactions: (I) Transfers resulting from the death or mental or physical incapacity of an individual who is a principal of the Developer; 4816-4491-4950.1 -2- (2) the approval and execution by the Developer of one or more purchase/sale agreements, leases and other similar agreements, including without limitation any co-venture agreements with third parties, that are not inconsistent with the Developer's ultimate development of the Project (as defined below), and with the understandings that no such agreement shall be deemed to limit or restrict the Agency's or the City's discretion with respect to the terms and conditions of any agreements pertains to all or any portion ofthe Property; or (3) Transfers for financing purposes. d. This Agreement shall automatically terminate, without further notice or action, and be of no further force or effect (i) the later of one-hundred-eighty (180) days following the Effective Date, or (ii) immediately upon the effectiveness of a DMC with the Developer, unless: (1) the parties each agree at their sole discretion to extend the term of this Agreement in writing to a specific date, subject to the Interim Executive Director of the Agency first making a finding based upon written documentation and other facts presented to verify that satisfactory progress is being made to complete the activities to be performed by the Developer set forth in Section 5; or (2) a party terminates this Agreement as provided under Section 18 or Section 19, as applicable. e. Notwithstanding any other provision of this Agreement, if the Agency acquires fee title to the Property by any means other than pursuant to the PSA within two and one-half (2 \1,) years of date the Promissory Note is paid in full [Sixteen Million Four Hundred Fifty Thousand Dollars ($16,450,000)] plus accrued interest through date of payment, this Agreement shall be deemed to be in full force and effect as of the date of acquisition of the Property by Agency. 2. The Proiect. Subject to the terms and conditions of this Agreement, development and execution of a mutually satisfactory Project DMC, the approval by the City, the Agency and other governmental agencies with jurisdiction over the Project Area and the Study Area of any permits and approvals that are needed to accommodate the development contemplated by the Project, the City's or the Agency's completion of the environmental review process and certification of CEQA documentation for the development of the Property within the Study Area pursuant to the California Environmental Quality Act ("CEOA") and compliance with all other applicable state and local laws, ordinances and regulations for such development, the Developer shall take all reasonable actions required or necessary for determining a scope of proposed development management consulting work relating to the feasibility of the redevelopment of the Property and the projected development of premier office and mixed use facilities (the "Project") while taking 481644914950.\ -3- the needs and concerns of the Agency, the City and other stakeholders at the present Carousel MaH into consideration. 3. Negotiation Period. a. The rights and duties of the parties established by this Agreement shall commence foHowing the Effective Date of this Agreement and shall continue as provided in this Agreement. Such time period during which this Agreement shall be in effect (including any extensions of time approved by the Agency) is referred to as the "Negotiation Period". b. Within two (2) business days of acquiring title to the Property, Agency shall give written notice of the Effective Date to the Developer. c. Within sixty (60) calendar days foHowing the Effective Date, the Developer shaH submit to the Agency a proposed scope of work for the development of the Property (the "DMC Proposal"). d. Each party shaH bear its own legal fees and overhead and administrative costs in connection with the preparation, review and negotiation of the DMC Proposal. e. AH third party consultants retained by the Agency to prepare any study or document as part of the DMC negotiation process shall be subject to the sole control and direction of the Agency. The work product of any such person shall be the property of the Agency and the Agency shaH have the right to use and republish such work product for any purpose. f. The Parties hereto acknowledge and agree that: (A) the Property consists of parcels which are owned by third parties ("Third Party Parcels"); (B) the identification of the Property as the site for a future project is conceptual only; (C) no specific project for the Property has been proposed and that a purpose of this Agreement is to provide for a period of negotiation which will include the identification of a project for the Property or portion thereto; (D) owner participation rights under the Community Redevelopment Law of the State of California have not yet been provided to the owners and tenants of the Property, and (E) should a project be identified in the future for which the Agency will need to make a selection of a developer, the selection of the Developer as the selected developer of any such project shall be subject to the Agency's owner participation process and that as between the Developer and an owner-participant (which includes tenants), the Agency, without liability to the Developer, may select as the selected developer an eligible and qualified owner-participant (which includes any partnership, limited liability company, joint venture, or other entity in which such owner-participant has an interest), rather than the Developer. g. Within fifteen (15) calendar days from receipt of any information from the Developer as provided in this Section 3, the Interim Executive Director of the Agency shaH determine whether such information is satisfactory. If the specific item of information is unsatisfactory to the Interim Executive Director of the 4816-4491-4950.1 -4- Agency, he shall notifY the Developer in writing of the reason or reasons that the information is unsatisfactory. If the Interim Executive Director of the Agency does not make a determination regarding any item of information submitted by the Developer under this Section 3 within fifteen (15) calendar days from receipt of such information, the information shall be deemed submitted in acceptable form by the Agency. The determinations to be made by the Interim Executive Director of the Agency under this subsection shall in no way bind or constitute the approval ofthe Agency, accept as provided herein. 4. Tolling of Negotiation Period. If Agency detennines not to pursue any project after the Effective Date, the Agency may give written notice thereof to the Developer and direct the Developer to stop work. The Negotiation Period shall be tolled from the date of giving notice to stop work and the tolling shall tenninate when the Agency gives written notice to the Developer to resume work. The Negotiation Period shall then re-commence from the end of the tolling period. 5. Obligations of the Developer. During the Negotiation Period, the Developer shall proceed diligently and in good faith to perform the following: a. Review and provide the DMC Proposal information described in Section 3 and, if acceptable to the Developer, submit an executed copy of the final form of the DMC to the Interim Executive Director of the Agency on or before the end of the Negotiation Period (or such later date corresponding to an authorized extension of the Negotiation Period); and b. Consult with the Agency on a regular basis and keep the Agency advised on the progress of the Developer in completing its obligations under this Agreement on written reports to be submitted to the Interim Executive Director every thirty (30) calendar days from and after the date the Agency acquires fee title to the Property. 6. Agencv Not to Negotiate with Others. a. The Agency currently deems the redevelopment of the Property for a feasible Project to be appropriate for further review and consideration, and the Developer appears to be qualified to undertake the task of planning the details for the development of the Property and the management of such process. b. During the Negotiation Period, the Agency shall not negotiate with any other person or entity regarding either the disposition of the Property or the redevelopment of all or any portion of the Project. The term "negotiate", as used herein, shall be deemed to preclude the Agency from approving any other offer or proposal from a third party to develop the Property or present another project or plan for the Property, and from discussing other redevelopment proposals for the Property with third persons or entities. 4816-44914950.1 -5- c. Notwithstanding any other provision of this Agreement, during the Negotiation Period, the Agency shall not be precluded from furnishing to persons or entities unrelated to the Developer information in the possession of the Agency relating to the redevelopment of any other land owned or controlled by the City or the Agency outside but in close proximity to the Property but specifically excluding therefrom properties owned by the City and/or the Agency either presently or hereafter acquired within the area bounded by "E" Street, Second Street, "G" Street, and Third and Fourth Streets, whether or not encumbered by the Reciprocal Easement Agreement ("REA") which provides for reciprocal parking rights and other common area usage adjacent and in proximity to the Property. Subject to its obligations set forth in Section 6.b. above, the Agency may also provide any other information in its possession that would customarily be furnished to persons requesting information from the Agency regarding the Property and other Agency public information concerning its activities, goals and matters of a similar nature, or as required by law to be disclosed upon request. 7. Agencv Cooperation. During the Negotiation Period, the Agency shall: a. at the request of the Developer, use its best efforts to assemble written materials and documents relating to the Property that are in the possession of the Agency; b. use its best efforts to provide appropriate and timely comments to the Developer with respect to one or more conceptual development plans, as may be proposed by the Developer for the Project, and the redevelopment of the Property, including, but not limited to, conceptual plans or studies of vacation, realignment or abandonment of public property and facilities, the installation and improvement of public improvements, any formal development entitlement applications that may be filed by the Developer during the Negotiation Period, and any environmental evaluation of the Project that may be undertaken during the Negotiation Period under CEQA; provided, however, that the Agency reserves its discretion and authority with regard to support and approval of any development permit applications that may be filed by the Developer during the Negotiation Period; c. use its best efforts to ensure that the Developer has access to the Property during the Negotiation Period for the purpose of conducting customary due diligence investigations and observations thereon, including environmental investigations of the subsurface or any structure thereon, but excluding any destructive testing, subject to the terms and conditions of a separate environmental investigation and inspection license agreement to be agreed upon by the Agency and the Developer, at some later date, if applicable; d. use its best efforts to provide the Developer with information or copies of all reports, studies and other information in the City's or the Agency's possession relative to the Property and the status of the current building plans, conditional 4816-4491-4950.1 -6- use permits, occupancy certificates and other City approvals with respect to the building structures and the Property; and e. use its best efforts to coordinate the location of parking and the feasibility of providing commitments for the continued use of on-street and off-street public parking in the vicinity of the Property; and f. use its best efforts to address security issues within the Downtown Area and in particular security issues related to the vicinity of the Property; g. use its best efforts to identify the parking and other security requirements and the location and number of public parking spaces and other parking spaces as may be committed to and/or available to the users of the Property and the type of security, hours of operation and numbers of security personnel required in furtherance of the redevelopment of the Property; and h. consider in good faith the proposals submitted by the Developer, respond within the times provided in this Agreement, and provide the Developer the opportunity to respond to comments before making any final decision on proposals submitted by Developer. 8. Negotiation of the DMC. It is the intent of the parties that the Developer and the Agency will negotiate the final terms and conditions of a proposed DMC between the date that the Developer submits the DMC Proposal to the Agency pursuant to Section 3 of this Agreement and the end of the Negotiation Period. Notwithstanding such commitment of the Agency to negotiate the terms and conditions of the final DMC, nothing contained herein commits the Agency Staff to recommend approval of any final form of a DMC presented for consideration by the Community Development Commission (the "Commission"), nor shall the Commission be committed to approve any final form ofa DMC by reason of the execution of this Agreement or by reason of any other actions of the Agency, the Agency Staff or the Commission prior to the conducting of a noticed public meeting on the consideration of the DMC in the manner as required by law. 9. Consideration for this Agreement and Reservation of Rights. In consideration for the Agency entering into this Agreement, the Developer will undertake its obligations under this Agreement and provide the Agency with copies of all studies and reports and other information generated by the Developer or its consultants regarding the Project to be used only in connection with this Agreement; provided, however, that nothing set forth in this Agreement shall obligate the Developer to provide the Agency with confidential financial or business information that is not reasonably required by the Agency to perform its obligations as set forth in this Agreement. The parties agree that, if this Agreement terminates for any reason, or the Agency fails to extend the Negotiation Period, or the DMC is not finally approved by the Agency, for any reason, neither party shall have any further obligation to the other under this Agreement regarding the acquisition, reuse, redevelopment or development of the Property, except as provided in the Assignment and Assumption Agreement. 4816-4491-4950.1 -7- 10. Planning and Design; Related Acknowledgments of the Parties. Certain development standards and design controls for the Project may be established between the Developer and the Agency, but it is understood by both parties that the Project must conform to the City's development, design and architectural standards. The Agency shaH fully cooperate with the Developer's professional associates in providing information in connection with the Developer's preparation of drawings, plans, and specifications. Nothing in this Agreement shaH be considered approval of any plans or specifications for the Project itself by either the Agency or the City. 11. Developer Financial Disclosures. Subject to its reserved rights set forth in Section 9 hereinabove, the Developer acknowledges that it may be requested to make certain confidential financial disclosures to the Agency, its staff or legal counsel, as part of the financial due diligence investigations of the Agency relating to the potential development of the Project. The parties recognize that such financial disclosures may contain sensitive information relating to other business transactions of the Developer, that the disclosure of such information to third parties could impose commerciaHy unreasonable and/or anti-competitive burdens on the Developer. Accordingly, the Agency agrees to maintain the confidentiality of any business records described in Government Code Section 6254.15, as may be provided by the Developer to the Agency or its consultants, as permitted by law. The Agency shall advise the Developer of any Public Records Act requests for such business records, and the proposed response of the Agency thereto, a reasonable time prior to the Agency's delivery of such response and, if the Agency proposes to disclose any such business records, the Agency shall first agree to confer with the Developer to consider any objections that the Developer may have to such disclosure. 12. Nondiscrimination. The Developer shall not discriminate against nor segregate any person, or group of persons on account of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry in undertaking its obligations under this Agreement. 13. Reauired Approvals. No DMC between the parties shall have any force or effect until the terms and conditions of the DMC are considered and approved by the governing body of the Agency, as required by law. 14. Press Releases. The Developer agrees to discuss any press releases it may propose relating to the Property or Project with the Interim Executive Director of the Agency or his designee, prior to publication, to assure accuracy and consistency of the information. 4816-4491-4950.1 -8- 15. Notice. All notices required hereunder shall be presented either (i) in person or (ii) by fax and confirmed by First Class certified or registered United States mail with return receipt requested. Notice shall be deemed confirmed by United States mail effective the second business day after deposit with the United States Postal Service. Notice by personal service shall be deemed effective upon delivery. Either party may change its address for receipt of notice by notifying the other party in writing. Notice shall be deemed to have been completed when the notices have been properly delivered as provided in this Section regardless of whether notice has been delivered to any other person entitled to receive a copy of such notice. Failure to provide notice to any person listed herein to receive a copy of notices shall not defeat or render as incomplete any notice as delivered to the other party that is a signatory to this Agreement. TO DEVELOPER: Panattoni Development Company, Inc. Mark D. Payne 34 Tesla, Suite 200 Irvine, California 92618 Fax: (916) 669-4841 WITH A COPY TO: CVM Law Group, LLP 34 Tesla, Suite 200 Irvine, California 92618 Attn: Fredric Albert, Esq. Fax: (916) 669-4860 TO AGENCY: Redevelopment Agency of the City of San Bemardino Attn.: Emil Marzullo, Interim Executive Director 201 North "E" Street, Suite 301 San Bemardino, California 92401 Fax: (909) 888-9413 16. Acceotance of Agreement by the Developer. The Developer shall acknowledge its acceptance of this Agreement by delivering three (3) counterpart executed copies of this Agreement. 17. Authority. Each signatory to this Agreement represents and warrants that he or she has the authority to execute this Agreement on behalf of the principal whom he or she purports to represent. 18. Ootional Termination by Developer or by Agency. a. The Developer may, in its sole and absolute discretion, exercise an election to terminate this Agreement provided that the Developer gives at least a ten (10) calendar day advance written notice to the Agency. If the Developer terminates this Agreement, it shall remain responsible for performance of its indenmity 4816-4491-4950.1 -9- obligations set forth in Section 21 of this Agreement with respect to any acts or omissions of the Developer occurring prior to the effective date of the termination, and otherwise, neither party shall have any further rights or obligations to the other party hereunder. b. The Agency may not exercise an election to terminate this Agreement other than as provided in Section 19 hereof. 19. Defaults and Breach - General. Failure or delay by either party to perform any material term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if the party who is otherwise claimed to be in default by the other party commences to cure, correct or remedy the alleged default within five (5) business days after receipt of written notice specifying such default and shall in fact complete such cure, correction or remedy, with reasonable diligence, such party shall not be deemed to be in default hereunder. The party, which may claim that a default has occurred, shall give written notice of default to the party in default, specifying the alleged default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the injured party shall have no right to exercise any remedy for a default as set forth herein without delivering the written default notice as specified herein. Any failure to delay by a party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with such a default. In the event of an uncured material breach, the party who is not in default shall be entitled to seek any appropriate remedy by initiating legal proceedings; provided, however, that, other than with respect to a Developer default in failing to perform its indemnity obligations set forth in Section 21, (i) the Agency shall not be entitled to specific performance or other equitable or injunctive relief against the Developer for a default by the Developer hereunder. In the event that a material breach has occurred and the non-performing party has not cured such breach within the period of time provided for in this Section 19, the party who is not then in default may terminate this Agreement by serving the other party with a written notice of termination, and thereafter, the Agreement shall terminate on the date specified in such notice, which date shall not be earlier than the later of (i) ten (10) calendar days following the date of service of the notice of termination on the other party or (ii) the date otherwise specified in such notice. 20. Attornevs' Fees. If any party hereto files any action or brings any action or proceeding against the other arising out of this Agreement, or is made a party to any action or proceeding brought by a third party, then as between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to 4816-4491-4950.1 -10- recover such attorneys' fees. As between the Developer and the Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. In the event the City becomes a party to any such action or proceeding or otherwise pursuant to Section 21 hereof, the words "reasonable attornevs' fees" in the case of the Agency shall include the salaries, costs and overhead of lawyers employed in the Office of the City Attorney of the City of San Bernardino. 21. Indemnification. Each party agrees to indemnify, protect, defend and hold the other, and their officers, employees and agents, hannless from and against, without limitation, all actions, causes of action, claims, demands, damages, judgments, costs, expenses and penalties (including, without limitation, attorneys' fees, court costs, consultant fees and costs, and all attorneys' fees and court costs incurred in connection with all appeals), to the extent arising from or related to any uncured default by the other party hereunder or any intentional misconduct or negligent act or omission of the other party, its agents, employees and/or independent contractors (and the successors and/or assigns of each of them) in performing, omitting, or failing to perform, in its obligations hereunder (collectively, the "Claims"); provided, however, that (i) the foregoing indemnity obligation shall not apply to the extent any Claims arise out of any default by the other party in performing its obligations set forth in this Agreement or to the extent the other party has engaged in any intentional misconduct or is guilty of gross negligence and (ii) the foregoing indemnity obligation shall not cover any Claim for exemplary or punitive damages unless the other party is guilty of malice. The party claiming default shall give the other party written notice of the occurrence of any Claim for which it seeks indemnity under this Section as promptly as practicable following such party's knowledge of the occurrence of such matter and the other party shall reasonably cooperate with the other in the defense of any such Claim. This indemnity provision shall survive the execution, delivery, expiration and/or termination of this Agreement and shall apply to the City in the same manner as it shall be applicable to the Agency. 22. Governing Law; Venue. The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California. Further, the parties to this Agreement hereby agree that any legal actions arising from this Agreement shall be filed in California Superior Court, in the County of San Bernardino, San Bernardino District. 23. Severabilitv. If any term, provision or portion of this Agreement or the application thereof 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 or portion thereof to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 4816-4491-4950.1 -11- 24. No Intent to Create Third partv Beneficiaries. The parties intend that the rights and obligations under this Agreement shall benefit and burden only the parties hereto, and do not intend to nor shall it create any rights in, or right of action to or for the use or benefit of any third party, including any governmental agency, who is not one of the parties to this Agreement. 25. Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of the time for performance of any obligation or act to be performed herein shall be deemed to be an extension of the time for performance of any other obligation or act to be performed under this Agreement. 26. Entire Agreement. This Agreement (including Exhibits "A" and "!!" as attached hereto) is the final expression of, and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the appropriate party or by its agent duly authorized in writing or as otherwise expressly permitted herein. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall constitute a single instrument. 27. Time of Essence. Time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof. Failure to timely perform any of the terms, conditions, obligations or provisions hereof by either party shall constitute a default under this Agreement by the party so failing to perform, which default can be waived by the other party at its sole and complete discretion. 28. Construction. Headings at the beginning of each Section, paragraph and subparagraph are solely for the convenience of the parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to Sections are to this Agreement. Exhibit "A" and Exhibit "B" as referred to in this Agreement is attached hereto and incorporated herein by this reference as if fully set forth herein in its entirety. 4816-4491-4950.1 -12- 29. Pavment for Development Consulting Services. Developer, for the term of this Agreement, shall be compensated at a fair market rate determined by the parties each at their sole and absolute discretion for any development services pre-approved by the Agency as indicated in Exhibit "B" attached hereto or negotiated by the parties in writing at a later date. 48164491-4950.1 -\3- IN WITNESS WHEREOF, Panattoni Development Company, Inc., and the Redevelopment Agency of the City of San Bernardino execute this Exclusive Right to Negotiate Agreernent on the dates indicated next to each of the signatures of their authorized representatives as they appear below, and this Agreement shall be deemed to be in full force and effect upon the Effective Date. DEVELOPER Panattoni Development Company, Inc., a California corporation By: Name: Its: Mark D. Payne Senior Vice President Dated: AGENCY Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic By: Name: Its: Dated: Emil Marzullo Interim Executive Director Approved as to Form and Legal Content: By: Agency Counsel 4816-4491-4950.1 -14- EXHIBIT "A" Pronertvand Study Area 4816-4491-4950.1487/020858-0022 1087454.06 a05/03/10 EXHIBIT "A" EXHIBIT "B" DeveloDrnent Services 4816-4491-4950.1 EXHIBIT "e" CDC/2010-25 ASSIGNMENT OF LOAN DOCUMENTS (CENTER BANK Loan No. 157918) THIS ASSIGNMENT OF LOAN (this "Assignment") is entered into as of May 10,2010 (the "Effective Date") between CENTER BANK ("Assignor"), and REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic, as successor-in-interest to P ANA TTONI DEVELOPMENT COMPANY, INC., a California corporation ("Assignee"). RECIT ALS A. Assignor is the lender under that certain loan ("Loan") made to PLACO SAN BERNARDINO, LLC, a California limited liability company ("Borrower"), on or about February 13, 2008, in the original principal amount of $16,450,000.00. B. The Loan is evidenced and reflected by, among others, a Promissory Note ("Note"},.-~ Business Loan Agreement ("Loan Agreement"), and certain Deed of Trust (the "Deed of Trust") executed by Borrower, as trustor, in favor of CENTER BANK, as beneficiary. The Note, Loan Agreement, Deed of Trust and all other documents related to the Loan as described in the Mortgage Loan Purchase and Sale Agreement and Joint Escrow Instructions dated as of January 14,2010 (as amended, the "Purchase Agreement"), are collectively referred to as the "Loan Documents." C. Assignor desires to transfer-and assign to Assignee all of Assignor's right, title and interest in and to the Loan, Loan Documents, any other agreement, instrument, guaranty(ies) or other document executed in connection with the Loan, any subsequent modification thereto and all of the Assignor's loan files (including, without limitation, any certificates, legal opinions or other documents related to, or evidencing, the Loan, appraisals, insurance certificates, borrower estoppel certifications and 'subordination agreements for leases, financial statements and operating statements, credit reports, lender's title insurance policy, engineering report, soils report, environmental audit report, architect's certificate as applicable to the Loan, and all information that is maintained by Assignor in the ordinary course of business in connection with the origination, servicing and administration of the Loan) and all of Assignor's right, title and interest therein (collectively, the "Assets"), and Assignee desires to accept such transfer and assignment from Assignor of all of Assignor's right, title and interest in and to the Assets upon, subject to, and in accordance with the terms and provisions of this Assignment. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Assignment. For value received, the receipt and sufficiency of which is hereby acknowledged, Assignor hereby remises, releases, sells, conveys, transfers. and assigns to Assignee, its successors and assigns, all of Assignor's right, title and interest, in and to the Assets. CDCj2010-25 2. Assumption. Assignee hereby accepts the foregoing assignment and assumes and agrees to perform all of Assignor's obligations, duties and responsibilities under the Assets arising from and after the date hereof. 3. Assignee's Representations and Covenants regarding Securities Law. Assignee hereby acknowledges and agrees with Assignor as follows: (a) Assignee understands that (i) neither the Assets, nor any interest therein or evidence thereof, has been registered or qualified under the Securities Act of 1933, as amended (the "Securities Acf'), or the securities laws of any state or any other jurisdiction, and (ii) the Assignor is not required, and does not intend, to so register or qualify the Assets. (b) Assignee is a substantial, sophisticated investor having such knowledge and experience in financial and business matters, and in particular in matters relating to the purchase, sale, origination or ownership of notes and loan participations such as the Assets, that it is capable of evaluating the merits and risks of investment in the Assets and understands and is able to bear the economic risks of such an investment (including a total loss of its investment and the risk that Assignee mi-ght be required to hold the Assets for an indefinite period of time). (c) Assignee is acquiring the Assets f~r investment, for its own account, and not for or on account of any other person or entity, and not with a view to or for sale in connection with a distribution within the meaning of Section 5 of the Securities Act. - (d) Assignee has been furnished with, and has had an opportunity to review and understands, all information relating to the Assets as has been requested and as is considered necessary by Assignee, and has had all questions arising from or relating to such review answered to the satisfaction of Assignee. (e) Neither Assignee nor anyone acting on its behalf has, in active violation of the Securities Act, (i) offered, transferred, pledged, lSold or otherwise disposed of any of the Assets (or any interest therein or evidence thereof) or, (ii) solicited any offer to buy or accept a transfer, pledge or other disposition of any of the Assets (or any interest therein or evidence thereof) from, or (iii) otherwise approached or negotiated with respect to any of the Assets (or any other interest therein or evidence thereof) with any person or entity in any manner, or taken any other action that would constitute a distribution under, or render the disposition to Assignee or the disposition by Assignee to any other party of any of the Assets (or any interest therein or evidence thereof) a violation of the Securities Act or of any other securities law or require registration or qualification pursuant thereto, nor will it act, nor has it authorized or will it authorize any person or entity to so act, in any such manner with respect to the Assets (or any interest therein or evidence thereof). (f) Either (i) Assignee is not an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a plan within the meaning of Section 4975(e)(l) of the Internal Revenue Code, and Assignee is not, directly or indirectly, purchasing the Assets on behalf of, as investment manager of, as named fiduciary of, as trustee of or with assets of any such plan; or (ii) Assignee's purchase of the Assets (A) will not cause Assignor to be deemed a fiduciary of any such plan, or (B) either 2 CDC/2010-25 will not result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code or will be exempt from the prohibited transaction rules in Section 406 of ERISA and Section 4975 of the Internal Revenue Code. Notwithstanding anything to the contrary contained in this Section 3, no provision hereof is intended to preclude Buyer's transfer and assignment rights as provided in Section 12 of the Purchase Agreement. 4. Indemnity. Assignor shall indemnify, hold harmless, and defend (by counsel reasonably approved by Assignee), Assignee and its members, and their respective officers, directors, shareholders, partners, members, managers, and employees, and the successors and assigns of each the foregoing, from and against any and all claims, lawsuits, liabilities, damages, costs, or other expenses, including, without limitation, reasonable attorneys' fees and costs ("Claims"), arising from any breach, default, or obligation of Assignor arising on or before the Effective Date with respect to the Assets in so far as such Claims relate to (a) Assignor's origination of the loan documents that are part of the Assets; (b) Assignor's servicing of the loan and (c) any breach of Assignor's representations and warranties as expressly provided in the Purchase Agreement. Assignee shaH jndemnify, hold harmless, and defend (by counsel reasonably approved by Assignor), Assignor and its members, and their respective officers, directors, shareholders, partners, members, managers, and employees.. and the successors and assigns of each the foregoing, from and against any and all claims, lawsuits, liabilities, damages, costs, or other expenses, including, without limitation, reasonable attorneys' fees and costs, arising from any breach, default, or obligation of Assignee arising after-the Effective Date with respect to the Assets. 5. Successors and Assigns. This Assignment shall be binding on the parties hereto, will be enforceable against the parties' respective successors and assigns, and shall inure to the benefit of their respective heirs, successors, and assigns. 6. Governing Law. The interpretation, constructfon and the remedies for enforcement or breach of this Assignment are to be applied pursuant to, and in accordance with, the laws of the State of California for contracts made and to be performed therein. 7. Counterparts. This Assignment may be executed in counterparts, and such counterparts shall be construed together as one original document. Facsimile signatures on this Assignment shall be considered as original signatures. 8. Attorneys' Fees. If either Assignor or Assignee brings any action or suit against the other for any matter relating to or arising out of this Assignment, or the Assets, or if either party appears in any bankruptcy proceeding relating to the other party arising from a dispute under this Assignment, then the prevailing party in such action, suit, or proceeding, whether by final judgment or out of court settlement, shall be entitled to recover from the other party all costs and expenses of suit, including actual attorneys' fees. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including actual attorneys' fees incurred in enforcing, perfecting, and executing such judgment. For the purposes of this Section, such costs and expenses shall include, but not be limited to, in-house and outside attorneys' fees, costs and expenses incurred in such action, u_ 3 CDCj2010-25 suit, or proceeding, including, but not limited to the following: (i) post-judgment motions; (ii) contempt proceedings; (iii) garnishment, levy, and debtor and third party examinations; (iv) discovery; (iv) bankruptcy proceeding and litigation (including post-petition proceedings); and (vi) appeals. ASSIGNOR: CENTER BANK, a California banking corporation By: Name: Its: ASSIGNEE: REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Name: Title: %~ ::TE~ )L Name: DovJ t}c!-6- Title: O~ ~ (/ t- P-6--1Pr- APPROVED AS TO FORM: \/~~ A~ENCY CO SEL 4 CDC/2010-25 suit, or proceeding, including, but not limited to the following: (i) post-judgment motions; (ii) contempt proceedings; (iii) garnishment, levy, and debtor and third party examinations; (iv) discovery; (iv) bankruptcy proceeding and litigation (including post-petition proceedings); and (vi) appeals. ASSIGNOR: CENTER BANK, a California banking corporation BY:~ Name: ~ l?~ "" Its: ~V(>t-~'If~ l,,~ ~ ASSIGNEE: REDEV..ELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic By: Name: Title: ATTEST: By: Name: Title: ~ APPROVED AS TO FORM: AGENCY COUNSEL 4